Kiernan v. Agricultural Ins.

BRADLEY, J. By the policy in question the defendant insured the plaintiff against loss by fire on a dwelling house, §2,000, and on certain personal property therein, §300; also, on other personal property, specified amounts. The house and its contents were destroyed by fire. The trial court determined that the insurance on the property covered by it was indivisible, for the purposes of relief, and that the incumbrance placed upon such other personal property, and the lien by judgment created upon the real property, subsequent to the inception of the policy, rendered it entirely void. The judgment for the defendant was affirmed. 72 Hun, 519, 25 N. Y. Supp. 438. Since then the affirmance by the court of appeals of the decision in Knowles v. Insurance Co., 66 Hun, 220, 21 N. Y. Supp. 50; Id., 142 N. Y. 641, 37 N. E. 567,—has furnished a reason for the reconsideration of this case. There, the divisibility of the insurance was held available to render it effectual as to a part of the property, although it was void as to the other portion of the property covered by it. By the policy in that case the insurance on a- crop of hops of 1889 was §1,200, and on that of 1890, §800. It provided, that the entire policy should be void “if the subject of the insurance be personal property, and it be or become incumbered by a chattel mortgage.” There was such a mortgage upon the crop of 1889. Both • crops were in the same hop house, and destroyed by fire. It was held that the policy was void as to the crop of 1889, and valid as to the other. The. question here is whether, in view of the doctrine of the Knowles Case, the trial court erred in dismissing the complaint. The contract of insurance contains the condition that the entire policy shall be void, unless otherwise provided, “if the subject of insurance be personal property, and be or become incumbered by chattel mortgage;” also, that “if the property, real or personal, covered by this policy, be or become incumbered by a mortgage, trust deed, judgment, or otherwise, the entire policy shall be void, unless otherwise provided,” etc. The former of these two provisions corresponds with that in question in the Knowles Case. It was there construed to mean that the entire policy should be void as to the property so incumbered. The application of that rule of interpretation to the policy in the present case would seem to lead to the conclusion that it remained valid as to the insurance of §300 on the personal property in the dwelling house. It is true that 893 the condition last before mentioned is somewhat broader than the other, as it relates to both real and personal property, and is applied to the policy in question. And while it may be so interpreted as to import that an incumbrance upon the real property would render the policy, as a whole, void, it is not, in view of the construction given to the other provision in the Knowles Case, i necessarily entitled to such effect. But by it, as well as by the other, the policy may be deemed vitiated only as to the incumbered property covered by it; that is to say, if the real property is incumbered, the policy, as to that, is void, and the same as to the 1 personal property, or so much of it as is incumbered in the manner therein mentioned, in violation of the condition. And thus the language employed does not take the contract out of the rule of construction applied to the policy in Merrill v. Insurance Co., 73 N. Y. 452. This meaning given to the term “entire policy” was obviated in Smith v. Insurance Co., 118 N. Y. 518, 23 N. E. 883, by the more definite provision of the policy that “if the property, either real or personal, or any part thereof shall be incumbered, * """ * the entire policy, and every part thereof, shall be void.” Upon the authority of the Knowles Case, the judgment should be reversed, and a new trial granted; costs to abide the event. All concur. J