Mowry v. Agricultural Ins.

Martin, J. The facts as found by the referee were fully sustained by, the evidence, and the only question presented is whether his conclusions of law were justified by the facts as found. As the case now stands, and as it. was presented on the trial, the only real controversy between the parties is-whether the policy in suit was void because of the existence of the mortgages given by the plaintiff to Robert L. Ingersoll. That the plaintiff had, before the policy was issued, executed and delivered to Ingersoll a mortgage as security for future as well as present indebtedness; was clearly shown by the mortgage, which was recorded, and was undisputed. That such a mortgage stands as security for the liabilities of the mortgagor, whether existing when it was given or created subsequently, seems to be well settled; and where a mortgage is given as security for future advances, and it is so stated therein, the sum named as the consideration is of no importance. Robinson v. Williams, 22 N. Y. 380; Miller v. Lockwood, 32 N. Y. 293; Brown v. Kiefer, 71 N. Y. 610. Therefore, when the policy in suit was issued, Ingersoll had a mortgage that was a valid incumbrance upon the property insured, not only for any indebtedness that then existed, but for such future indebtedness to Ingersoll as might thereafter be incurred by the plaintiff. The appellant’s agent was fully informed of the existence of this incumbrance, and of its nature, extent, and purpose. Possessing such information, he forwarded to the appellant an application for the policy in suit, in which he stated that there were no incumbrances upon the property. The application was in the handwriting of the company’s agent, which must have been known to its officers, and did not purport to be signed by any one. Upon this unsigned application the company issued the policy in suit. It is now claimed by the company that the existence of that incumbrance when the policy was issued rendered it void under the conditions contained therein, and that the plaintiff should not recover thereon. That under the conditions of the policy it would have been void by reason of the existence of that mortgage, if the plaintiff had made the written application introduced in evidence in this case, or if he had not informed the company’s agent of the existence of such mortgage, there can be but little doubt. But that was not the case. Here there was no written application by the plaintiff. It was made by the defendant’s agent. It was incorrect, and made by the agent with a full knowledge of the facts. It would seem that, under such circumstances, the appellant could not justly claim that its policy should be avoided because the incumbrance was not stated in the application or indorsed on its policy. A contract of insurance is not defeated by a misrepresentation contained in an application prepared by the-agent of an insurance company in the name of the insured, but without his authority, and upon which the company acted in issuing the policy. Benninghoff v. Insurance Co., 93 N. Y. 496; Sprague v. Insurance Co., 69 N. Y. 128; Vilas v. Insurance Co., 72 N. Y. 590; Ames v. Insurance Co., 14 N. Y. 253. So, where ah agent, authorized to fill out an application in the name of the assured, misstates the information given by the assured, and thereby misleads the company, the error of the agent cannot be imputed to the as 839 sured. Such misstatements, as between the parties, are to be regarded as those of the agent, and not of the assured, and, consequently, would not avoid the policy. Rowley v. Insurance Co., 36 N. Y. 550; Bennett v. Insurance Co., 106 N. Y. 243, 12 N. E. Rep. 609. Another principle which seems to> be established by the authorities in this state is that an insurance company cannot insist upon a condition declaring the contract to be void if a certain fact or situation exists not represented to the company in the application or indorsed on the policy, where the company or its authorized agent at the time it was made knew of the fact or situation which is relied upon to defeat the contract. Van Schoick v. Insurance Co., 68 N. Y. 434; Richmond v. Insurance Co., 79 N. Y. 230; Short v. Insurance Co., 90 N. Y. 16. The doctrine of these cases is recognized in Sanders v. Cooper, 115 N. Y. 279, 386, 22 N. E. Rep. 212, and the principles are there stated by Judge Andrews in substantially the language here employed. The evidence, which discloses that the plaintiff neither made nor authorized any written application for the policy in suit, that the application was made by and was in the handwriting of the defendant’s agent, that when the policy was issued the company indorsed thereon the name of Stowell as its agent, thereby representing and assuring the plaintiff that Stowell was authorized to represent the company in matters pertaining to the policy, was, we think, sufficient to justify the referee in lidding that the knowledge of the agent was imputable to the company. Patridge v. Insurance Co., 17 Hun, 95; Broadhead v. Insurance Co., 14 Hun, 452; Chase v. Insurance Co., Id. 456; Vanderhoef v. Insurance Co., 46 Hun, 333; Smith v. Insurance Co., 47 Hun, 30; Van Schoick v. Insurance Co., 68 N. Y. 434; Sprague v. Insurance Co., 69 N. Y. 128; Whited v. Insurance Co., 76 N. Y. 415. An application of the principles of law stated to the facts in this case would seem to justify the referee’s holding that the existence of the first mortgage did not render the policy void. This leads us to consider the effect upon the policy of the second mortgage, given by the plaintiff to Ingersoll. In examining this question it should be remembered that the mortgage first given was a continuing security, intended to cover all the indebtedness that might exist between the parties, so that it, in fact, covered all the indebtedness which was secured by the second mortgage. It is true, the plaintiff’s second wife joined in this mortgage, but her right of dower was subject to the first mortgage, so that there was no actual increase of security, and consequently no added incumbrance. Although the giving of the second mortgage in no way increased the incumbrance upon the property insured, still the appellant contends that it rendered the policy void. To sustain that contention it relies upon the condition in the policy which provides that, “if the property * * * shall become incumbered by mortgage, judgment, or otherwise, * * * this entire policy, and every part thereof, shall be null and void, unless the written consent of the company at the home office be obtained.” Thus, the question is presented whether the giving of the second mortgage was an incumbrance of the property insured, within the intent and meaning of that provision. As we have already seen, it in no way increased the amount of the incumbrance thereon. It at most only settled the amount. The manifest purpose of that condition in the policy was to prevent the assured from incumbering the property, thereby reducing his interest therein, and thus increasing the hazard. As there was in this case no-increase or addition to the incumbrance, the interest of the insured in the property was in no way reduced by this second mortgage, and was not within the purpose of the provision. We are of the opinion that under the circumstances developed by the evidence, and upon the facts as found by the referee, it was properly held that the execution and delivery of the second mortgage to Ingersoll did not create such an incumbrance upon the property insured as rendered the policy void, although the written consent of the company was not obtained. Russell v. Insurance Co., 71 Iowa, 69, 32 N. W. Rep. 840 95. If these conclusions are correct, it follows that the judgment should be affirmed, as we have examined all the exceptions to which our attention has been called by the appellant, but have found none that would justify a reversal of the judgment. Judgment affirmed, with costs.