Gray v. Guardian Assur. Co.

PUTNAM, J. The defendant, by its policy of insurance dated March 31, 1892, insured Davis Bros., to an amount not exceeding $1,000, on their stock of merchandise contained in their store at Malone, N. Y., for the period of one year. On the 18th of June, 1892, Davis Bros, executed a chattel mortgage on the property insured to one Henrietta Briggs, to secure the payment of $500. The policy provided that “this entire policy shall be void if the subject of insurance be personal property, and be or become incumbered by a chattel mortgage.” It requires no citation of authorities to show that, on the execution of the chattel mortgage in question, the policy under which plaintiff seeks to recover in this case at once became void. Being void, it could not subsequently acquire validity, so as to cover merchandise thereafter placed in the store of Davis Bros. On the execution of the mortgage the policy, by its terms, ceased, and could not thereafter have any force, unless revived by some act or by consent of the defendant. Mead v. Insurance Co., 7 N. Y. 530. [238] We think the only serious question in the case is whether there was a waiver by defendant, after the loss, of the clause in the policy rendering it void if the merchandise insured became incumbered by a chattel mortgage. It is urged by the learned counsel for the plaintiff that, after the fire by which the property insured was destroyed, Congdon, the adjuster of defendant, with full knowledge of the execution of the chattel mortgage, directed Davis Bros, to prepare proofs of loss, and send the same to the defendant, and that, in pursuance of his direction, Davis Bros, afterwards did prepare and send such proofs, at an expense of two dollars. We think the evidence in the case fails to establish any waiver by defendant. “To establish a waiver of a forfeiture, the proof must show a distinct recognition of the validity of the policy, after a knowledge of the forefeiture, by the person by whom it is claimed the forefeiture is waived.” Weed v. Insurance Co., 116 N. Y. 106-118, 22 N. E. 229. Assuming that there was testimony given from which the jury could have properly found that, at the interview between Davis Bros, and Congdon, the adjuster of defendant, after the loss, the latter told the former to make out proofs of loss, it was shown by the testimony of four witnesses that at the interview at which Congdon made that remark, after he learned that the insured property was covered by a chattel mortgage, he denied the liability of the company, and claimed that the policy became void because of said mortgage. He did not recognize the validity of the policy after he found out the fact of its existence, but, on the contrary, asserted its invalidity. Daniel F. Davis, as a witness, did not deny that Congdon made such a statement. He only said: “I don’t remember any such statement. That is all I will say about it.” On this testimony the trial judge was justified in assuming as clearly proved that Congdon, defendant’s adjuster, on learning of the existence of the chattel mortgage, denied the liability of the company, and refused to proceed further in the matter of the adjustment. Under the circumstances, if he did at the same time tell the plaintiff to make out proofs of loss, such remark should be deemed rather advisory than as a request on his part on behalf of the company. In any event, Congdon, after learning of the chattel mortgage, made no distinct recognition of the validity of the policy, as held necessary in all the cases, but, on the contrary, asserted that it had become void, and declined to proceed further with the adjustment. Under all the circumstances, we think the plaintiff failed to establish a waiver on the part of the defendant’s adjuster. See Ronald v. Association, 132 N. Y. 378, 30 N. E. 739. But it is not shown that Congdon was a general agent or officer of the defendant. He was a special agent and adjuster. At the time of his interview with Davis Bros., the policy under which plaintiff claimed was forfeited. It was, by its terms, void. Congdon, as special agent and adjuster, was not shown to have had power to waive the forfeiture. Weed v. Insurance Co., 116 N. Y. 106, 22 N. E. 229. We conclude that the trial judge properly nonsuited the plaintiff, and hence that the judgment should be affirmed, with costs. All concur.