Hobby v. Dana

By the Court, Gridley, J. This is a proceeding to review the report of referees appointed under the statute respecting claims against insolvent corporations. The claim itself was made on a policy of insurance executed to one Jonas S. Seaman, for the sum of six hundred dollars, on “his hay and grain, live stock, &c. carriages, &c. described in the application as situated in a barn on Oarnahan-street in the city of Utica, occupied by the applicant as a tavern barn.” By the terms of the policy, the loss or damage is to be paid only “ after due notice and proof thereof made by the insured in conformity to the by-laws and conditions annexed to the policy.” The policy also states, “that it is also agreed and understood, and this policy is made and accepted subject to and in reference to the terns, by-laws and conditions of the company, which are to be used and resorted to, to explain and, ascertain the rights and liabilities of the parties hereto, in all cases not herein otherwise provided for.” One of the conditions annexed to the policy, among other things provides that, as a part of the preliminary proofs served on the company and verified by affidavit, there shall be a statement “ that there has been no alteration, or occupation of said premises (not assented to by the company) which increased the hazard of said property, since the insurance was effected.” This provision applies expressly to property in a building, as well as to the building itself. The statement in the application that the building in which the insured property was situated was occupied as a tavern barn, is a representation that the same was so occupied. (7 Wend. 72. 2 Hall’s S. C. Rep. 539, and cases cited by counsel, 16 Wend. 485.) The terms of the policy above recited, in connection with the terms of the condition above referred to, control the construction of the contract of insurance, and bind the insured by an agreement that the premises should not be occupied so as to increase the risk, after the insurance. Such are the rights and obligations of the parties, by the plain language of the instrument on which the plaintiff seeks to recover. This will lead us to examine the finding of the referees. They find that one Marsh was allowed to keep a livery stable in the [115] barn where the property was situated. But the majority of the rfeferees also find that an occupancy for this purpose was not such a change in the use of the premises as to materially increase the risk; and that no notice of such change wag necessary to be given to the company. And this decision was placed on the ground that the occupation of Marsh was not to interfere with the right of Seaman to occupy the whole barn as a tavern barn; and that Seaman had a right to turn him out whenever he pleased. Nevertheless, a livery stable was kept there for about Jive months, and was so kept at the time of the fire; and in the absence of proof, it may be quite as likely that the fire caught by means of the carelessness of the servants belonging to the livery stable, as of those belonging to the tavern. If the fact that Marsh was subject to go out whenever Seaman s'hould so determine, were to exempt the policy from tíre effect of a more hazardous use of the premises, it will readily be seen that it is in the option and power of the insured to permit the premises to be occupied for the most hazardous occupation, during the entire period of the insurance, with impunity. Such a construction of the rights of the parties would defeat a plain provision by which the rights of the insurers were guarded by the agreement of both parties' to the instrument. The rule mentioned by the referees, referred to a temporary and casual use of the premises, and not to a continuing use of them for a purpose clearly prohibited by the policy. (O’Niel v. The Buffalo Fire Ins. Co., 3 Comst. 122.) In that case the depositing of oils and paints during the temporary repair of the premises, was held not to be an occupation that rendered the policy void. Marsh kept a Every stable with six or eight horses secured by halters; and he kept no office or stove in the barn; yet he had two men besides himself, who went into the barn at all hours of the night, as late as two or three o’clock in the morning, as became necessary in the business of letting his horses and carriages and sleighs for evening parties; when they returned at. late hours; Now there was positive proof that this úse of the barn Was material to the risk. Mr. Hart swears that the rate of premium [116] Was two cents and an half, and that of tavern barns was two per cent. To the same point was the testimony of John Brown and J. W. Williams, both experienced insurance agents. We are therefore of opinion that the majority of the referees erred in holding that the keeping of this livery stable on the premises was not such a change in the use of the premises as materially increased the risk. And they erred also, in holding that the fact that Marsh wa's only a tenant at will and subject to be removed at the pleasure of Seaman, prevented his use of the premises being in law an occupation that rendered the policy void. In fact it seems to be admitted by the referees that this feature in the case alone prevented the occupation being a bar to the recovery. [Onondaga General Term, October 3, 1853. Gridley, W. F. Allen, Hubbard and Pratt, Justices.] We also think the questions put to the witness Brown, and rejected, should have been answered. Such is the established rule in England and in Massachusetts, and we think it should be followed; though we do not place our decision on this ground. Hew trial granted.