VAN DEUSEN against THE CHARTER OAK FIRE AND MARINE INSURANCE COMPANY

VAN DEUSEN against THE CHARTER OAK FIRE AND MARINE INSURANCE COMPANY. New York Superior Court ; General Term, May, 1863. Pboofs of Loss.—Dismissal, of Complaint.—Insubaltoe • Policy. Where insurers received and examined the proofs of loss presented by the insured, and, in answer to subsequent inquiries on his part, whether there were any further proofs that he could show, or anything further was wanted of him, answered that there was not, and afterward offered to compromise the claim, but without making any objection to the proofs;— Held, that they could not defeat his action on the policy by objecting that the magistrate’s certificate, which the policy required should accompany the proofs of loss, was never served on them. A motion to dismiss the complaint, in such case, at the trial, upon the ground that the papers served on the defendants were not in compliance with.the terms of the policy, does not authorize the defendant to raise the objection on appeal that the person on whom the magistrate’s certificate was served, was not the authorized agent of the defendants to receive it. "Where a policy of insurance upon a stock of merchandise covered the goods sold but not delivered, and its printed condition provided tha-t “in case of any transfer or termination of the interest of the insured in the property, by sale or otherwise, * * * the policy shall be void;” and “that in case of any sale, alienation, transfer or change of title in the property insured, * * * or of any individual interest therein, such insurance shall be void; and the entry of a foreclosure of a mortgage, or the levy of an execution, or an assignment for the benefit of creditors, shall be deemed an alienation of the property;”—Held, that the giving of a chattel mortgage upon the goods, without parting with the possession, or the right to possession, did not avoid the policy. The words “ sale, alienation or transfer ” should be construed to mean some act which divests the title absolutely. ' Appeal by the defendant from a judgment in favor of the plaintiffs, entered on a verdict. The action was brought upon a policy of insurance, and was tried before Mr. Justice Moitobief, and a jury, on December 5th, 1862. By the policy, the defendants insured, the plaintiff, Alonzo Van.Deusen, “ against loss or damage by fire to the amount of five thousand dollars, on merchandise hazardous and not hazardous, his own, or held by him in trust or on commission, or sold, but not delivered, contained in the brick and stone building situate No. 40 Murray street, city of New York.” It contained a clause declaring that “ no part of this contract can be waived, except in writing, signed by the secretary.” Among the conditions of the policy, were the following: “ III. Property held in trust, or on commission, must be insured as such; otherwise, the policy will not cover such property; and in case of loss, the names of the respective owners shall be set forth in the preliminary proofs of such loss, .together with their respective interests therein. Property on storage must be separately and specifically insured. “ If the interest in property to he ^rsured be a leasehold, or any other interest not absolute, or if it be equitable, it must be so represented to the company in writing, with the true title of the insured, and the extent of his interest, and so expressed in the policy in writing, otherwise the insurance shall be void. And this policy shall not be construed to protect the interest of any person-not named herein : “[Note.] By ‘property held in trust’ is intended property held under a deed of trust, or under the appointment of a court of law or equity, or property held as collateral security; in which latter case, this company shall be liable only to the extent of the interest of the assured in such property. “ IV. This policy, or any claim arising under it, shall not be assigned, transferred, pledged or sold, either before or after a loss, without the consent of the company, expressed by indorsement, made thereon. In case of assignment, transfer, pledge or sale, without such consent, whether of the whole policy, or of any interest in it, the liability of the company, present and future, shall then cease. And the company reserves the right to elect, either to consent to a transfer before a loss, or return. a ratable proportion of the premium and cancel the policy. And in case of any sale, alienation, transfer or change of title in the property insured by this company, or of any undivided interest therein, such interest shall be void, and cease. And the entry of a foreclosure of a mortgage, or the levy of an execution, or an assignment for the benefit of creditors, shall be deemed an alienation of the property. “ In case of claim for loss or damage on a policy assigned,, where there is no actual sale or transfer of the property insured, proofs of loss shall be made by the assured in conformity with the conditions of this policy, the same as if no assignment had been .made; otherwise this policy shall be void, and all liability on the pari of this company shall cease.” The eighth condition also contained a provision that the insured should, in case of loss, deliver an account and proofs thereof to the defendants, and should, also, “ produce a certificate under the hand and seal of a magistrate, notary public, or commissioner of deeds' (most contiguous to the place of the fire, and not concerned in the .oss, as a creditor or otherwise, or related to the insured or sufferers), stating that he has examined the circumstances ” attending the loss alleged, and he is acquainted with the character of the claimants, and that they have "x" * sustained loss to a specific amount. The goods insured were almost wholly destroyed by fire on the 5th day of December, 1861. The plaintiff’s loss was eleven thousand -one hundred and* sixteen dollars and seventy-nine cents. Upon the trial, Elisha Peck, the agent of the defendants in the city of Hew York, testified that immediately after the fire he wrote to the defendants to send somebody down to look after it, and they sent their agent, Chapman (who heard of the fire a day or two after it occurred), to examine into the circumstances. He arrived in Hew York on the 9th day of December, went to the scene of the fire with Peck, and made a critical examination, and examined theqffaintiff’s books of account. On the 10th Chapman asked the plaintiff for his proofs of loss, and the plaintiff gave to him the paper • containing them, which Chapman took to the office of the defendants, in Hartford, Connetieut, and the defendants produced it on the trial.' The plaintiff and another witness, testified that two or three days after this, and before Chapman left the city, the plaintiff asked him “ if there was anything further he could do, anything further they wanted of him. The reply, was, there was not; if there was, they would let him know.” , • After the plaintiff rested, the defendants’ counsel moved to dismiss the complaint, on the ground that the paper served on the defendants as above was not in compliance with the terms and conditions of the policy, as • a prerequisite to the right tó recover. The court denied the motion ; to this denial and» decision the defendants’ counsel excepted. In the proofs of loss it was stated that “'said property was, at the time of said fire, subject to a mortgage, executed by the deponent to Mark E. Van Deusen, of the town of Alford, Berkshire county, Massachusetts, dated July 6th, 1861, and filed' in the Eegister’s Office for the city and county of Hew York, and numbered 10,223, and which contained the condition that the deponentc should pay the holders thereof when due, or cause to be paid, all promissory notes which (then) have been or hereafter may be made and signed by the party of the first part (deponent) as principal, and indorsed or signed as surety by the party of the second part’ (morfcgagee). That there is no other mortgage or incumbrances on said property.” The counsel for defendants offered in evidence the chattel mortgage mentioned in the proofs of loss, to show an alienation, transfer, or change of title, in the property insured ; and it was admitted, against plaintiff’s objection and exception. It did not appear that the mortgagee ever had the right to take possession, or had actually entered into possession of the property. A certifícate of a notary was made and delivered to Elisha Peck, on the 13th day of December, and he sent it to the home office, a day or two after he received it; but the president of the defendants testified that they never received it. The plaintiff, before the commencement of this action, called upon the defendants for payment of his claim, and they refused ; but finally offered to pay a portion of it, by way of compromise. There was no evidence that they ever requested further proofs, or objected to payment on the ground that the proofs were defective, or intimated that the plaintiff had not complied with the terms and conditions of the policy. The defendants’ counsel requested the court to charge the jury, that, by the terms of the policy, there could be no waiver, except in writing, signed by the secretary ; also that the chattel mortgage put in evidence showed that there was such a sale, alienation, transfer, or change of title, in the property insured by defendants, as rendered the insurance void, and it ceased. The court refused so to charge, to which ruling the defendants’ counsel excepted. The jury rendered a verdict for plaintiff for five thousand two hundred and fifty-four dollars and seventy cents; and judgment having been entered, the defendants appealed.» Henry C. Pratt, for defendants, appellants. I. The court erred in not dismissing the complaint. The plaintiff alleges performance of all the conditions on his part. The conditions of the policy required plaintiff to produce, with his proofs of loss, a formal certificate in regard to certain specified facts. None such was produced. No evidence on the part of plaintiff shows a performance. Nor does it show a waiver of such certificate under the terms of the policy. Nor is a waiver a performance. II. The court erred in not charging the jury, as requested, that tli re could be no waiver, except in writing signed by the secretary. III. The court erred in not charging the jury, as requested, that the chattel mortgage rendered the insurance void. ' That mortgage was a sale and transfer to the mortgagee, of the whole legal title to the goods and chattels mortgaged, being “ the property insured ” (Bank of Rochester v. Jones, 4 N. Y. [4 Comst.], 497, 507; Butler v. Miller, 1 N. Y. [1 Comst.], 496, 500; Southworth v. Isham, 3 Sandf., 448 ; Hull v. Carnley, 2 Duer, 99, 106; Rich v. Milk, 20 Barb., 616; Stewart v. Hanson, 35 Maine, 508 ; Shuart v. Taylor, 7 How. Pr., 251, 254). Thereupon, by plaintiff’s own act, the policy and insurance were made void* of no effect, and ceased (Edmands v. Mutual Safety Fire Ins. Co., 1 Allen, 311; Abbott v. Hampden Mutual Fire Ins. Co., 30 Maine, 414; Orrell v. Hampden Fire Ins. Co., 13 Gray, 431). T. D. Pelton, for plaintiff, respondent. I. The defendant might waive a compliance with the conditions in the policy relating to preliminary proofs, either expressly or by implication, and there is no requirement in the policy, that the waiver should be in writing, and signed by the secretary. In this case, a waiver may be implied from either of the following facts. 1. From the declaration of the defendants’ agent (Franklin Ins. Co. v. Coates, 14 Md., 285; Clark v. New England Ins. Co., 6 Cush., 342; Conover v. Mutual Ins. Co., 3 Den., 254). 2. From the silence of the defendants touching the proofs (Ætna Fire Ins. Co. v. Tyler, 16 Wend., 400 ; Savage v. The Corn Exchange Ins. Co., 4 Bosw., 1; Bilbrough v. The Metropolis Ins. Co., 5 Duer, 587; O’Niel v. The Buffalo Fire Ins. Co., 3 N. Y. [3 Comst.], 122 ; Kernochan v. The Bowery Ins. Co., 17 N. Y., 428; Child v. Sun Mutual Ins. Co., 3 Sandf., 26, 42; Vos. v. Robinson, 9 Johns., 192; Clark v. The New England Mutual Ins. Co., 6 Cush., 342; Underhill v. The Agawam Ins. Co., Id., 440 ; Heath v. The Franklin Ins. Co., 1 Cush., 257, 264; Inland Ins. Co. v. Stauffer, 33 Penn., 397; Allegre v. Ins. Co., 6 Harr. & J., 408; Angell on Ins., §§ 242, 249). 3. From the negotiations and offer of the defendants to pay a part of the claim (Bodle v. The Chenango Ins. Co., 2 N. Y. [2 Comst.], 53 ; McMasters v. The Western Ins. Co., 25 Wend., 379 ; Westlake v. St. Lawrence Ins. Co., 14 Barb., 206, 212). II. The object of the condition requiring preliminary proofs, was fnlly secured to the defendants (Lawrence v. Ocean Ins. Co., 11 Johns., 241; Barber v. Phoenix Ins. Co., 8 Id., 318)) III. The proofs having been accepted without objection, it is immaterial whether they were in compliance with the terms and conditions of the policy or not. And the motion to dismiss the complaint was made upon a specified ground (Boynton v. Clinton &c. Ins. Co., 16 Barb., 254 ; Bumstead v. Dividend Mutual Ins. Co., 12 N. Y. [2 Kern.], 90). The mortgage put in evidence by the defendants was not such an alienation as rendered the insurance void (Shepard v. The Mutual Ins. Co., 38 N. H., 232 ; Jackson v. Massachusetts Fire Ins. Co., 23 Pick., 418 ; Conover v. The Mutual Ins. Co., 3 Den., 254; Angell on Ins., § 58, 205; 1 Philips on Ins., § 286). [MAJORITY — By the Court.—Bosworth, Ch. J.] By the Court.—Bosworth, Ch. J. The objection that the .preliminary proofs did not contain a certificate of a magistrate, as required by the eighth of the consditions annexed to the policy, cannot be first taken at the trial (Bilbrough v. Metropolis Ins. Co., 5 Duer, 587 ; O’Niel v. The Buffalo Fire Ins. Co., 3 N. Y. [3 Comst.], 128). The objection to these proofs, taken on the motion to dismiss the complaint, was that ‘* the pap>er served on the defendants, as above, was not in compliance with the laws and conditions of the policy, as a prerequisite to the right to recover.” The terms of the objection not only do not raise any question whether the person on whom the service was made, was a proper person for the purpose, but import that he was. The plaintiff had testified that “ either Bowers (the president of The City Fire Insurance Company, which had also insured the same property), or Chapman The defendants’ agent), asked for the proofs of loss, and I went and got them, and handed them to them, and they examined the proofs; * * two or three days afterward we had a conversation, and I then asked ‘if there was anything further that I could do; any further proofs that I could show on the case; anything further they wanted of me;’ they said there was not; if so, they would let me know.” * * The defendants, by their authorized agent, Elisha Peck, subsequently offered to settle and compromise the claim; but no complaint or intimation of the insufficiency of the preliminary proofs was at any time suggested. On such a state of facts,' the rule stated in Bodle v. The Chenango Mutual Ins. Co. (2 N. Y. [2 Comst.], 57, 58), should be applied, and the defect be held to be waived. The only other question of substance relates to the effect of the giving of the chattel mortgage. The policy declares that, “ in case of any transfer or termination of the interest of the insured in the property, by sale or otherwise, * * the policy shall be void.” The fourth condition declares that, “in case of any sale, alienation, transfer, or change of title in the property insured, * * or of any individual interest therein, such insurance shall be void. And the entry of the foreclosure of a mortgage, or the levy of an execution, or an assignment for the benefit of creditors, shall be deemed an alienation of the property.” The giving of the mortgage would not avoid the insui’ance, as being an “ alienation, sale, or transfer of title, within the meaning of the policy. The mortgagee did not také actual possession, and had no right to do so, until the plaintiff made default in payment of the moneys secured thereby (Conover v. The Mutual Ins. Co. of Albany, 1 N. Y. [1 Comst.], 290 ; Rice v. Tower, 1 Gray, 426). Does the giving of the mortgage make a “ change of title,” within the meaning of ,the policy? If it does, then, if the goods were mortgaged when insured, payment of the mortgage before the loss, would also work a change of title.” Such a construction makes the words equivalent to alteration or modification of the nature of the title. I think the words “ change of title,” as used in this policy, should be construed to mean some act, which divests it absolutely ; and thus permit the words, “ the entry of the foreclosure of a mortgage ” to have a natural, and not a forced application. . Construing the whole as permitting the insured to mortgage, where he retains possession, and has the right to possession, without avoiding the policy, then the same effect is given to an entry to foreclose the mortgage, as to the levy of an execution; either of which the parties agree shall he deemed an alienation. Any other construction would restrict the the application of the words, “ the entry of a foreclosure of a mortgage ” to goods mortgaged when the policy was issued, and would defeat the policy by reason of the mere fact of paying the mortgage prior to a loss. For whatever change of title is effected by the mere execution of a mortgage, a corresponding change is produced by satisfying it. Orrell v. Hampden Fire Ins. Co. (13 Gray, 431) is not an authority to the point, that a mortgage is a change of title, within the meaning of a policy, written like the present. The concluding part of the opinion (2) is, that to constitute a breach of • the condition of insurance, “ there must have been an actual sale or transfer of property, valid as between the parties.” All else that is said, is qualified by the word “ perhaps,” and does not touch a point in judgment. In Abbott v. Hampden Mutual Fire Ins. Co. (30 Maine, 414), one article of the defendants’ by-laws was, that the policy should' be void if the assured should sell or alienate the property in whole or in part, without consent of the company. The conveyances in that ease were held to be an alienation in part. This case, therefore, has not much application to the case before us. In Edwards v. Mut. Safety Fire Ins. Co. (1 Allen, 311) the by-laws provide that “all alienations and alterations in the ownership, situation or state of the property insured by tbi« company, in any material particular, shall make void any policy covering such property.” A subsequent mortgage of the property was said to be “ an alteration in the ownership. * * It introduces a new owner to the extent of the sum secured by the mortgage, and to the same extent it takes away the direct interest of the assured.” That case may.be conceded to be correctly decided upon the particular facts of the. case, and yet not be an authority in support of the proposition that a mortgage, though not due, and not giving the mortgagee a right to the possession of the property, makes “ a change of title ” within the meaning of the policy in the case at bar. In neither of the three cases last cited, does there appear to be any clause in the by-laws to the effect that “ the entry of the foreclosure of a mortgage shall be deemed an alienation.” Within the good sense and spirit of the terms of the body of the policy, and of the fourth condition, the words, “ any sale, alienation or transfer ” should he construed as applying to acts which terminate the interest of the assured. By the body of the polity, property “ iold, but not delivered” is insured. This shows that “ sale ” means an executed contract of sale, which has transferred the title. Applying the maxim, noscitur a soeiix, to the words “ change of title,” and keeping in mind the further provision that ‘‘the entry of"the foreclosure of a mortgage” shall be deemed an alienation, the conclusion is reasonable, and, I think, clear, that the change of title here meant is„a termination of it; and that the giving of the mortgage no more worked a change of title, within the meaning of the policy, than it did a transfer or alienation. That it is not an alienation within the meaning of the policy, is settled. If these views are correct, the further questions involved in the other exceptions taken need not be considered, and the judgment should he affirmed. Ordered accordingly. Present Bosworth, Oh. J., Moncrier and White, JJ.