Ladd v. Aetna Insurance

PUTNAM, J. It is not claimed that the policy of insurance on which this action was brought, when issued, was invalid. Plaintiffs were the owners of the property insured, and received the policy from the' duly-authorized agent of defendant. But it is urged that the policy became void in consequence of the contract executed, after the issuing thereof to King & Trushaw, which transferred to the latter the equitable title to the mill, and by the alleged erroneous indorsement on said policy that the title was vested in them. Notwithstanding the contract, plaintiffs remained the legal owners of the property, and could insure it;» probably for the whole value, but certainly to the extent of their interest in it. Insurance Co. v. Updegraff, 21 Pa. St. 513; Tallman v. Insurance Co., 4 Abb. Dec. 345; Wood v. Insurance Co., 46 N. Y. 421. Plaintiffs remaining the legal owners of the property, and with an insurable interest therein, their valid policy did not become invalid in consequence of the contract if they correctly represented to defendant’s agent the facts as to such transfer. There was evidence on the trial from which the jury could have found that defendant’s agent was notified that the sale to King & Trushaw was by contract, and hence, a nonsuit having been granted, we must now assume that the agent was truly informed as to the said contract. Under such circumstances, we understand it is well settled that the mistake of the agent in making., the indorsement will not avoid the policy. Mowry v. Insurance Co., 64 Hun, 144, 18 N. Y. Supp. [386] 834; Van Schoick v. Insurance Co., 68 N. Y. 434; Berry v. Insurance Co., 132 Y. 49, 30 N. E. Rep. 254. We do not regard the eases cited by respondent (Quinlan v. Insurance Co., 133 N. Y. 356-364, 31 N. E. Rep. 31; Allen v. Insurance Co., 123 N. Y. 6, 25 N. E. Rep. 309) parallel to the cases under consideration. These are not cases where a valid policy was issued to the insured, and by a mistake of the agent of the insurers the proper indorsement of a transfer was not placed upon the policy of insurance, the agent being duly and properly notified of such transfer. The indorsement made was as follows: “Inert made on policy No. 9,932, Aetna Insurance Co., June 30, 1891: “It is hereby understood that the title of this property is now vested in P. King and N. Trushaw, and loss, if any, is payable to Ladd & SmaUman, as interest may appear. S. B. Skinner, Agent.” It has been decided that the company by the words “as interest may appear” insured the plaintiffs for any insurable interest which they might have in the insured property, and waived the condition requiring a specific statement of such interest in the policy. De Wolf v. Insurance Co., 16 Hun, 116; Burke v. Insurance Co., (Sup.) 12 N. Y. Supp. 254. We have assumed that in making the indorsement above set out the agent incorrectly stated that the title to said insured property was in King & Trushaw. The latter, however, under the contract, were the equitable owners of the property, and there are authorities holding that such vendees who have taken possession under a contract have the title, and may insure as the owners. Pelton v. Insurance Co., 13 Hun, 23, 77 N. Y. 605. We therefore conclude that the policy was not avoided in consequence of the contract to King & Trushaw. The court below granted the nonsuit on the ground that the insured property, being a manufacturing establishment, ceased to be operated as such for at least 10 days at some time prior to the fire, and hence, under the conditions in the policy, it became void. The conditions referred to provide that, if the subject insured be a manufacturing establishment, and ceases to be operated for more than 10 consecutive days, or if the building therein described, whether intended for occupancy by the owner or a tenant, be and become vacant or unoccupied, and so remain for 10 days, the. policy shall be void. We think the position of appellants correct, that ordinarily the term “occupy,” as applied to' such a sawmill, must be deemed synonymous with “operate.” It is held “that to constitute occupancy of a building used for manufacturing purposes there must be some practical use or employment of the property.” Halpin v. Insurance Co., 118 N. Y. 174, 23 N. E. Rep. 482. A condition of the kind above set out is to be construed in view of the circumstances and character of the property insured and in view of the contingency as to its use within the reasonable contemplation of the parties. Caraher v. Insurance Co., 63 Hun, 93, 17 N. Y. Supp. 858. The property insured was a sawmill run by water power. It was destroyed by [387] fire on January 9, 1892. The mill was kept running up to December 9th, when King, the sawyer, was taken ill, and work was suspended until three days before the fire, when the witness Trushaw sawed two logs. He testified he was intending to gó to the mill the following Monday to saw the logs there. When King became ill he had arranged to saw out a bill of lumber the next day. There was quite a quantity of logs at the mill to be sawed, and arrangements had been made to have others drawn, and logs were drawn there during King’s illness, and up to the time of the fire, and lumber taken away. He stopped work on account of the illness. If an insurance policy on a sawmill run by water power is vitiated by a temporary suspension of the operation of the mill in consequence of the illness of the sawyer, absence of logs, low water, or any circumstances which must necessarily cause such suspension from time to time, such a policy would have but little value. In Whitney v. Insurance Co., 72 N. Y. 117, 9 Hun, 37, a case of insurance upon a sawmill, at the time of the fire no sawing had been done for 16 or 18 days, but there were logs in the yard, which the plaintiff intended to saw; lumber piled in the yard and in the mill, from which sales were made from time to time before the fire. It will be seen that the facts were similar to those in this case. In that case it is said: “Delays and interruptions incident to the business of conducting a sawmill, although involving a temporary discontinuance of the active use of the mill for sawing purposes, would not, we think, make the mill ‘vacant’ and ‘unoccupied’ within the meaning of the policy. Take the case of the insurance of a church building or schoolhouse or cider mill. Would the fact that the church was closed for six days consecutively each week be a violation of the condition in question, or would the schoolhouse in vacation time, or the cider mill when no apples were to be had, be without the protection of the policy? These illustrations serve to show that the condition against vacancy and non-occupation is to be construed and applied in view of the subject-matter of the contract, and of the ordinary incidents attending the use of the insured property.” In Poss v. Assurance Co., 7 Lea, 704, it was held that a clause similar to the one in question in an insurance policy is not avoided by a temporary cessation of work caused by an epidemic. In Albion Lead Works v. Williamsburgh City Fire Ins. Co., 2 Fed. Rep. 480, it is determined that such a clause is not violated by a temporary suspension of work at the mill. We think the above-cited cases place the proper construction on such a provision in a policy. The suspension of work that would avoid a policy in such a case must be either permanent or something more than a suspension of work from some temporary cause. The distinction between this case and such cases as Halpin v. Insurance Co., 118 N. Y. 165, 23 N. E. Rep. 482, is apparent. In the latter case the insured property had been occupied as a morocco factory, but the tenant had left, and the building was locked up and in the hands of the agent to rent, and it remained in that position for months. It had ceased to be operated at all until another tenant could be found. The suspension of work in the case cited was very different from the temporary suspension in the case under consideration, which [388] was only continued during the illness of the sawyer. We conclude that the, policy of insurance in question was not rendered void by the brief suspension of the operations of the mill in consequence of King’s illness, and that the court erred in taking the case from the jury, and in granting the motion for a nonsuit; and hence, without considering the other questions raised in the case, the judgment should be reversed, and a new trial granted, costs to abide the event. All concur.