Richardson v. Westchester Fire Insurance

Daniels, J.: Tbe action was upon a policy of insurance, by which tbe defendant insured Samuel Elliott in the sum of $2,000, on a two-story frame dwelling, situate on the south side of the landing in tbe village of Hastings, Westchester county. The insurance extended from tbe 14th of March, 1875, until the 14tk of March, 1876, and tbe building was destroyed by fire on the 19th day of April in the former year. By the terms of the policy the loss was payable to the plaintiff as mortgagee. It appeared that the building, while it was insured as a dwelling, was, in a part of tbe first story, used as a store, and that articles of a specially hazardous nature constituted a portion of the stock. But it had been so insured by tbe defendant in the year 1870, and that policy had, from time to time, been renewed, until the one in suit was issued [473] in the same terms, and the applications for the renewals stated that the first story was used for a store and dwelling. The defendant was therefore informed, in writing, of the particular manner of the occupancy of the assured; and after receiving that information, and continuing the preceding policy, and in fact issuing the present one also upon it, the defendant could not properly be allowed to avoid its liability on account of this misdescription by which the subject of insurance was designated a dwelling, instead of a store and dwelling, as it literally was, for its conduct was such as to indicate that for the purposes of the insurance it was satisfied to insure the property, as it was, in fact, under that description. But a still more serious defect than this existed in the plaintiff’s case. That arose out of one of the conditions of insurance indorsed upon the policy, by which it was declared that, “ if the insured shall have, or shall hereafter make, any other insurance on the property hereby insured, or any part thereof, without the consent of this company written hereon, * * * this policy shall be void.” The defendant proved that Elliott had a policy in the Orient Insurance Company on the frame building and store, $2,000; the stock of groceries and other merchandise usually kept in a country store, $1,000; and furniture, $500; the policy being dated September 5, 1873, for one year, and renewed September 5, 1874, for one year; and that he had another policy in the Allemania Insurance Company, dated March 6, 1875, on the building, $500; on the stock of threads, needles, groceries, etc., $1,500. Both these policies permitted other insurance. It was shown that Elliott gave notice to the defendant’s agent of the existence of these insurances about the fall of 1874, before either the policy in suit or the one taken from the Allemania Insurance Company was issued, and that notice in writing to that effect was also previously sent by the agent to the company; but when the insurance in suit was made, both the other insurances mentioned in ■the notice had been effected on the property. They then existed as the defendant had been already notified in writing of them; but nothing beyond these facts transpired upon the subject of these insurances between the assured and the defendant. They [474] were not indorsed upon the defendant’s policy, as that was required by the terms of this condition; and as nothing more was done from which its waiver by the defendant may be inferred than the existence and receipt of this notice and the subsequent execution of the policy, the point is presented, whether these facts will justify the conclusion that the company had dispensed with a literal or further performance of the condition. To hold that it did not do so would be simply saying, in effect, that it should be protected in issuing a policy which, at the time, it had every reason for believing would be of no possible advantage to the person receiving it; that it might receive the premium and at the same time frame and deliver its contract in such terms as would avoid all future liability upon it. This would be to sanction a palpable fraud, which coui-ts of justice always very properly refuse to do. It would be a legal snare, seriously impairing the utility of a large class of obligations, in most cases very carelessly as well as heedlessly accepted, and relied upon by the persons taking them. It was undoubtedly the intention of the defendant to issue á valid and binding policy of insurance when the one in suit was delivered, and that it could only do in the form in which the business was done, by waiving this condition, which it should be held to have done, in view of the notice it had previously received of the other insurances. The object of the condition was to secure unequivocal evidence on the subject, and that had been obtained by the written notice, and all that then remained was a formal statement of the fact in writing on the policy afterwards issued. That was necessary in order to render the policy formally complete, and the defendant should have done that before it allowed the instrument to be delivered. It omitted to do so, and that omission should now be held a waiver of its right to insist upon this failure as a defense to the action. ( Van Schoick v. Niagara Fire Ins. Co., 68 N. Y., 434.) The fact that specially hazardous articles composed a portion of the stock in the store did not invalidate the policy, although not insured as such, for they seem to have been an appropriate and ordinary portion of the stock of such a store as was maintained upon the premises. The plaintiff offered proof which [475] would have estabhshed this fact if it had been received, and for the present purposes it must be assumed that the truth was as the plaintiff proposed to show it. That would have removed the objection taken on this portion of the case to the plaintiff’s right to recover. (Pindar v. Kings Co. Fire Ins. Co., 36 N. Y., 648.) The case was certainly one in which the complaint could not be legally dismissed. At most, the defendant could properly claim nothing more than that the facts, upon which the points were presented, should have been past upon and decided by the jury. The nonsuit must be set aside and a new trial ordered, with costs to abide the event. Ingalls, P. J., and Potter, J., concurred. Nonsuit set aside; new trial ordered; costs to abide event.