Henshaw v. Insurance Co. of New York

Gayntob, J.: As the insured knew at the time the policy of reinsurance was issued that some of the property had already been destroyed the contract of reinsurance did not cover the destroyed property, but only the part of it in existence. A contract of insurance may be retrospective where by reason of the remoteness of the property it is not known to the insured whether it is not already destroyed, a familiar case being the insurance of ships and cargoes at sea, “ lost or not lost ”; but if the insured know of Its loss, and does not reveal it, the contract is fraudulent and not-' binding (2 Parsons on Cont. 444; 3 Kent's Com. 258; Ins. Co. v. Folsom, 18 Wall. 237; Bentley v. Columbia Ins. Co., 17 N. Y. 421; Hallock v. Commercial Ins. Co., 26 N. J. L. 268; 27 N. J. L. 645; Security Fire Ins. Co. v. Kentucky Marine & Fire Ins. Co., 7 Bush (Ky.) 81; Hammond v. Allen, 2 Sumn. 387). The policy [407] in this case by its terms covers a period prior to the fire, it is true, viz., from June 27th, 1899, but its legal effect can only be to insure the part of the property in existence at the time the contract of insurance was made, viz., on July 3rd, and in the condition it then was. Moreover, in this case the insurer also knew of the fire, and it would be ultra vires for it to insure property against damage or loss which it knew had already taken place. In addition to all this the letter sent by the defendant with the policy shows that the policy was expressly delivered as covering only the property then in existence and this was therefore the contract, Judgment for the defendant.