Driscoll v. German-American Insurance

MAYHAM, P. J. The respondent, through its general agent, who was authorised to fill up and issue policies signed in blank by the president and secretary of the respondent, issued its policy to Dennis Driscoll for one year from January 3, 1891, to January 3. 1892, for a premium of $8.75 on an amount of $700, on building described in the policy as follows: “On his one-story frame, shingle-roof building, 30x50, occupied as a lodge room, situate detached at Hickory Bush, in the town of Rosendale, N. Y., payable, in case of loss, to Catherine Cummings, mortgagee, as her interest may appear.” [647] This policy was indorsed as follows: “January 6, 1891. “This company hereby agrees to recognize Catherine Cummings as sole owner of insured property; loss, if any, payable to her. “Chas. B. Westbrook, Agent” “February 21, 1891. “The title to insured property is now vested in Johanna Driscoll as owner; loss, if any, payable to her. Chas. B. Westbrook, Agent.” At the time of issuing this policy the hall was occupied one night each week as a lodge room for the Knights of Labor. The proof shows that the building was also used as a place for Sunday schools and religious service on Sundays, and for shows, dancing parties, and other public entertainments week days, when not occupied by the Knights of Labor on the nights of their meetings. One key was always kept by the plaintiff, who was her own janitor of the building, kept it swept and in order for use, hired it to parties, and received the income for its use. On the trial the witness who negotiated with the defendant’s agent and procured the policy was asked by the plaintiff this question: “Did you state to Charles B. Westbrook,, the agent who issued the policy, how the building was occupied at the time the policy was issued?” This question was objected to, and the objection was sustained, and the plaintiff excepted. This question was later in the trial followed by an offer by the plaintiff, as follows: “I offer to show that the agent who issued the policy was informed of the way that this building was used in all its details,—that it was used for church purposes, Sabbath schools, for dances and other public entertainments, and that the plaintiff was in the continual occupation of the property herself. (Defendant objected. Objection sustained. Plaintiff excepted.)” We are inclined to the opinion that the exclusion of this offered evidence was error. The evidence offered did not tend to prove an unauthorized change in the condition of the policy by the agent. Its object and effect were to prove that the defendant had knowledge, at the time of taking the risk, of the manner in which this building was occupied, and the purpose for which it was constructed and used; and while it was, as set out in the application, used as a lodge room, it was also, to the knowledge of the company, used by the owner for the purpose of a hall for public meetings of various kinds, and for that purpose was in her possession and under her control; and the proof shows that it continued so to be used and controlled up to the time of its destruction by fire, except that the Knights of Labor had ceased using it for one night each week, as they were doing at the time the policy was issued. With this knowledge directly imputable to the respondent, it did not lie with them to set up the removal of the lodge as a violation of the policy of insurance, but rather such knowledge worked a waiver by it of the condition upon which it now seeks to avoid liability. It would be little less than a fraud upon the assured to allow an insurance company to receive the premium, and issue a policy, with. knowledge of the existence of a fact at the time of such issue, upon which they could claim, on the happening of a loss against which [648] it assumes to insure, a forfeiture of the policy. In Forward v. Insurance Co., (Sup.) 21 N. Y. Supp. 665, the court, in discussing the principle involved in the question and offer above quoted, uses this language: “The question is not whether the plaintiff can avail himself of an unauthorized waiver by the defendant’s agent of any provision contained in the policy. It is rather whether the knowledge of the existence of the chattel mortgage, brought home to the company in this manner through its agent who procured the policy, effects a waiver of any ground set up for avoiding liability. Two recent cases in the court of appeals seem to have settled this question in favor of the contention in 'behalf of the plaintiff, namely, Berry v. Insurance Co., 132 N. Y. 49, 30 N. E. 254, and Cross v. Insurance Co., 132 N. Y. 133, 30 N. E. 390.” In Berry v. Insurance Co., 132 N. Y. 49, 30 N. E. 254, the assured informed the agent who issued the policy that his son had bought ■the property of him; that he was to have it as a home as long as he lived, and was to insure it, and the court held that this statement fairly gave notice that the plaintiff was not the owner. In Cross v. Insurance Co., 132 N. Y. 133, 30 N. E. 390, the defendant’s agent who issued the policy knew that the premises were vacant and unoccupied, having personal knowledge of that fact, and had notice of the plaintiff’s title. The policy provided that it should be void if the insured were not the sole and unconditional owner, or if the building were not on ground owned by him in fee, or if they should remain vacant and unoccupied, and it was held that •the plaintiff had an insurable interest, and that the conditions as to the plaintiff’s title, and the premises remaining vacant and unoccupied, must be deemed to have been waived. Within these cases, and many others that might be cited, we think it must be held that the knowledge of the agent was that of the company, and that it was competent for the plaintiff to prove that knowledge, and the exclusion of evidence offered for that purpose was error. Again, the language of the policy and application, that the building was used as a.lodge, while it was true in fact, cannot, we think, be construed into a warranty that occupancy for that particular purpose was to be continuous. O’Neil v. Insurance Co., 3 N. Y. 122; Smith v. Insurance Co., 32 N. Y. 399; Blood v. Insurance Co., 12 Cush. 472. The policy itself excepted from the ground of forfeiture “exchange of occupants without increased hazard;” and, if the question of increased hazard existed in the case, it was clearly one for the jury. Walradt v. Insurance Co., 136 N. Y. 375, 32 N. E. 1063. A change of occupancy will not avoid a policy unless there is a substantial increase of risk. Miller v. Insurance Co., 18 Hun, 525. We are also inclined to the opinion that there was sufficient evidence upon the question of occupancy to require the submission of that point to the jury, and that it was error to deny plaintiff’s motion to submit the question to the jury. The judgment should be reversed, and a new trial ordered; cost to abide the event. PUTNAM, J., concurs. HERRICK, J., concurs in the result.