Ames against The New-York Union Insurance Company

Ames against The New-York Union Insurance Company. By the terms of a policy of insurance, and the conditions annexed, which were made a part of it, it was provided that all applications for insurance should he in writing, and specify all incumbrances and existing insurances on the property; and that the facts stated in the application should be deemed and taken to be a part of the policy and a warranty by the assured, whether the application was signed by him or not. They further declared that in case of other insurances, not noted on the application or endorsed on the policy, or otherwise approved by the secretary of the company in writing, the policy should be void; that there should be no waiver of any of the conditions without the concurrence of the secretary endorsed on the policy, or otherwise specifically acknowledged in writing by him; and that any want of conformity to the conditions should render the policy void, and bar an action thereon. The agent of the company, to whom blank policies were delivered, signed by the president and secretary, issued one to the plaintiff, having first inserted in it a statement of other insurances existing on the building insured, which, in terms, referred to application No. 146 for a more particular description. No application was signed by the assured, but the agent filled up what purported to be one, and, without showing it to the assured, or making inquiry of him as to its contents, forwarded it to the company, with a memoranda upon it of the amount insured and the premium paid, and this was retained by the company without objection. There was no mention in the application of the other insurances, or of any mortgage upon the premises, nor ivas there any notice of any incumbrance, except that the agent, two years previous, when effecting an insurance to the plaintiff, of which the policy in question was a renewal, was informed by the plaintiff that there was a mortgage of $3000 to the City Bank on the premises. In an action on the policy to recover a loss accruing about a month after it was issued; Held, that the policy was valid notwithstanding the mortgage remained unpaid, and the other insurances were not noted or approved by the secretary, except by being stated on the face of the policy by the agent. Where, by the provisions of a pplicy, the loss was to be paid within ninety days after proofs should be completed and filed, any suit not commenced within six months after the loss accrued should be barred. The loss was on the'Sth of July, and on the 14th of that month proofs were served on the company. On the 7th of October a defect in the proofs was pointed out by the company,-which was supplied on the 14th of the same month; and on the 2d of January the secretary of the company, upon being applied to at its office for'payment, stated that payment would not be due until the 14th of that month, when it would be made. In an action commenced on the policy on the 18th of January, Held, that it was maintainable. The action was upon a policy of insurance, and was tried at the Oswego co.unty circuit in 1854, before Mr. Justice Bacon. On the trial the plaintiff read in evidence the policy of insurance. It bore date the 3d of June, 1853, was signed by the president and secretary of the defendant, and conn-: tersigned at Oswego by Seth Maltbie, the agent of the defendant at that place. By its terms the defendant agreed to insure the plaintiff against damage by fire to liis-warehouse, situate at the foot of East Cayuga-street, in Oswego, during a year from the date of the policy, to the amount of $200u. In the body of the policy was a written statement that the plaintiff ha'd insurance on the building to the amount of $6000, being $2000 in each of three companies named. After a general description of the building and its location, and the above statement as to other insurances, the policy contained the following clause: “For a more particular description and statement, as forming part of this policy, reference being had to application No. 146, on file in this office.” There was a provision in the policy that the loss or damage was “to be paid within ninety days after due notice and proof thereof, made by the Insured in conformity to the conditions annexed to this policy.” There was also a provision, that in case the insured had any other insurance on the property, “ not notified to the company according to the annexed conditions, then this insurance to be void.” It was further provided by the policy that it was made and accepted, subject to and in reference to the conditions annexed, as forming part of it; and that the same should not be valid unless countersigned by Seth Maltbie, agent cf the company at Oswego. The conditions annexed to the policy contained the following, among other provisions: All applications for insurance were to be in writing, according to the printed forms of the company, specifying, among other particulars, all incumbrances, of every description, upon the premises; and the amount, if any, of insurances upon the property. The statement of loss required to be furnished was to be verified by oath, and to show what incumbrances were upon the property; and the loss or damage was declared to be due and payable “in ninety days after due proofs of loss, amended and completed, shall have been filed in the office of the company, in compliance with the terms and conditions of insurance.” The conditions further declared that no suit or action against the company, for the recovery of any claim upon, under or by virtue of the policy, should be sustainable, unless the same should be commenced within six months next after the loss or damage should occur; and in case the suit should be commenced after that period, the lapse of time should be taken and deemed conclusive evidence against the validity of the claim sought to be enforced. They also declared that when a policy wras issued and made upon a survey, description and valuation of property, the survey, description and valuation, together with all other facts stated in the application, should be deemed and taken to be a part of the policy, and a warranty on the part of the assured, whether he signs the application or not; and that, in all cases of application for insurance in the company, the applicant should state and set forth the amount already insured on the property, and the whole amount and the nature and kind of incumbrances thereon • and in case of other insurances, whether prior or subsequent, or of cotemporaneous date, and “not noted on the application or endorsed on the policy, or otherwise approved in writing by the secretary, then the policy to be void ;” that there should be no waiver of any of the terms and conditions without the concurrence of the secretary of the company endorsed on the policy, or otherwise specifically acknowledged in writing by him; and any want of conformity'- to these terms and conditions, it was provided, should render the policy void, and should be a full bar to all claims arising under or by virtue of the same. The plaintiff proved that the building insured was destroyed by fire on the 5th of July', 1853, and that proofs of the loss were served on the defendant on the 14th of the same month. On the 7th of the ensuing October, the secretary of the defendant wrote the plaintiff, stating that in his proofs of loss he had omitted to state whether or not the insured property was incumbered. The plaintiff thereupon, and on the 14th of the same month, made and sent to the defendant an affidavit, stating that at the time the policy was issued there was a mortgage upon the land upon which the building stood, and' other real estate of the plaintiff, for $3000, which had been executed to the City Bank of Oswego, July 1, 1850, and which remained unpaid at the time of the fire; and on the trial it was admitted that the facts, as stated in this affidavit, were true. It was also admitted that the building was worth more than $8000 at the time it was destroyed, and that the action was commenced on the 18th of January, 1854. The plaintiff called Seth Maltbie, who was sworn, and testified' that prior to and at the time the policy in suit was issued, and subsequently7, he was the agent of the defendant; that he issued the policy, and then wrote in it the statement as to other insurances on the property; that at the time the policy was issued nothing was said by the plaintiff about the premises being incumbered, or as to the mortgage to the City7 Bank;- that in June, 1851, he, as agent of the defendant, issued to plaintiff a policy on this property for $2000, for one year, and that he issued another, as such agent, for the same amount, in June, 1852; that when he issued the . first policy, the plaintiff informed him of the mortgage to the City Bank, saying it covered the premises insured and other premises. This evidence as to the former policies, and the information then given to Maltbie as to the mortgage, was objected to by the defendant’s counsel and allowed and he excepted. The witness further testified that a handbill produced and purporting to be made by the defendant, and stating the terms and conditions on which the defendant proposed to insure property, and dated May, 1850, was sent to" him by the defendant, and that it was posted in a conspicuous place in his office at Oswego. The following clause was read in evidence from this bill: “ The company will hold itself responsible for all surveys and other official acts of its authorized agents. This will end all cavil about the agents being the agents of the applicant and not of the company.” On his cross-examination, he testified that when he issued the policy, in 1852, nothing was said about the mortgage, - and that neither then or when he issued the policy in suit did he know whether the mortgage or any part of it had been paid; that the plaintiff told him to renew the policies; that he, the witness, made out applications and sent them to the defendant, to show the company what he had done; that he never communicated to the defendant or its officers the existence of the mortgage, or that the premises were incumbered; that blank policies, signed by the president and secretary, were sent to him, and he filled up and issued them, and that he filled up and issued the one in question; that he made no note or memorandum of the mortgage on the applications or either of the policies; that the application No. 146, shown to him, was the one on which the policy in question was issued. The counsel for the defendant gave the said application in evidence. It purported to be an application by the plaintiff to the defendant for insurance, being a renewal of the policy, issued by the defendant in 1852, on the same property. It stated that the plaintiff owned the property, and that there was “ no incumbrance, excepting”—. At the foot of it was a memorandum, signed by Maltbie, the agent, stating that the insurance applied for was a renewal of the prior policy, which expired on that day. No mention wras made in it of any other insurance on the property. The application, on which the policy of 1852 was issued, contained the same statement as the above as to incumbrances; was not signed by or on behalf of the plaintiff, and had attached to it a memorandum, signed by the agent, stating that the property was the same as that insured by the policy of 1851, to the survey as to which reference could be had. On the back of each of these applications was a memorandum, stating the insurance made, the date, amount and premium paid. Each of these applications, in terms, required the applicant to state the amount of incumbrances, if any. The defendant also gave in evidence the application for the insurance made in 1851. This was signed by the plaintiff as applicant, and stated that there was an insurance of $4000 on the property in the Northwestern Insurance Company. No mention was made in it of the mortgage to the City Bank, or of there being any incumbrance on the property. Annexed to this application was a survey of the building insured. Robert Anderson, a witness sworn for the plaintiff, testified that on the 2d of January, 1854, he was at the defendant’s office, and saw the secretary and president of the defendant there; that he informed the secretary that the plaintiff desired him to inquire when the defendant would pay the loss, and that the secretary replied, “ When it is due,” and added, “When does Ames say it is due?” that he, the witness, answered the 8th of January; that the secretary said he thought not, and then turning to a clerk in the office, inquired of him when it was due, and that the clerk replied the 14th of January, and that thereupon the secretary stated that the plaintiff would get his pay when it was due, and that the witness might go tell him. He further testified that he informed the plaintiff of this the next Saturday morning. The foregoing statements of the secretary wTere objected to as incompetent evidence against the defendant, and an exception taken to its admission. At the close of the evidence, the counsel for the defendant requested the court to nonsuit the plaintiff on the grounds: '!. The evidence shows that, at the time of the making and delivery of the policy of insurance in question, the plaintiff had insured on the same property, in three other companies, $6000, and that said additional insurance was not noted in the said application No. 146, nor in any way approved of by the secretary of the company, as required by the said policy and the terms and conditions of insurance thereto annexed, and that for that reason the said policy, at the time the said building mentioned therein was destroyed by fire, was void and of no force or effect, and is still void; 2. That said policy of insurance, at the time the building mentioned therein was destroyed by fire, was, according to the terms and conditions of insurance thereto annexed, void and of no force or effect, on account of and by reason of the said insured property being incumbered by the said mortgage given by the plaintiff to S. Hubbell Reynolds, president of the City Bank of Oswego, to secure the payment of $3000, and that the said policy, for the reason above stated, is still void and of no force or effect whatever; 3. That according to the said policy, and the terms and conditions of insurance thereto annexed, the time within which an action could be brought or maintained on said policy had expired before the 18th day of January, 1854, the day on which it is admitted by plaintiff this action was commenced, and that, according to the said contract or policy, an action cannot be maintained thereon unless commenced within six months next after the loss or damage to the insured property occurs ; 4. That, on the whole case, the plaintiff was not entitled to recover. The court denied the motion, and defendant’s counsel excepted. The court thereupon ordered a verdict for the amount of the policy, and the counsel for the defendant again excepted. Judgment was entered upon the verdict, which was affirmed by the court at a general term in the fifth district. The defendant appealed to this court. J. H. Reynolds, for the appellant. S. Beardsley, for the respondent. [MAJORITY — Wright, J.] Wright, J. The application and conditions of insurance were, by apt words, made a part of the contract. If, therefore, the application is to be treated as the application of the plaintiff, and it contained an express warranty that there was no incumbrance on the insured property; or if there were prior insurances, not noted in the application or endorsed on the policy, or otherwise approved in writing by the secretary, the policy cannot be enforced, unless there has been a waiver, or the defendants are estopped from claiming that the contract was void al initio. The application, however, must be that of the plaintiff, and so construed, or this branch of the defence fails. Though the conditions of insurance provided that all applications should be in writing, according to the printed forms of the company, specifying’ incumbrances and the amount of prior insurance, if any, and the application is to be deemed part and portion of the policy, whether signed by the insured or not, yet it cannot be doubted that a formal application in writing might be dispensed with, or waived, by the company, and a policy issued or renewed without any survey or written application on the part of the assured; or the company’s agent might make the survey and fill out the- application, in such case acting as the defendants’ and not the plaintiff’s agent. It is to be observed, that neither in the policy in this case, nor in the conditions of insurance, was it provided that in making the survey and application, or in filling up the blank forms provided by the company, the agent of the defendants, to effect insurances, was to be regarded and treated as the agent of the assured. The first ground assumed on the motion for a nonsuit was, that there were prior insurances on the property, not noted in the application or in any way approved of by the secretary of the company. This ground was abandoned on the argument, and very properly, as, conceding the application to be the plaintiff’s, and that he thereby expressly wrrranted against prior insurances, it was frivolous. The policy was to be void only in the event of an omission to notify the defendants of prior insurances, and this notice might be given in writing on the application or policy. It was only in the case of prior insurance, not noted on the application or endorsed on the policy, or otherwise approved in writing by the secretary, that the policy was to be void. In this case the prior insurances were stated in express terms in the body of the policy. This was a sufficient compliance with the condition. It was the act of the company itself, and they were notified substantially in the mode prescribed. But if the insertion, by the agent, of the prior insurances in the body of the policy was not strictly an endorsement within the language of the condition, this was waived, and the defendants, having noted them on the face of the instrument, are estopped from making the objection that they were not endorsed thereon or noted on the-application. The noting of a prior insurance, by the company’s agent, on the face, instead of the back, of the policy, cannot have the effect to avoid the contract. Another ground urged was, that there was an incumbrance on- the property not stated or set forth in the application. ' It is assumed here that the application was made by the plaintiff; that it was a part of the contract; that he agreed or warranted that the property was unincumbered; that there was a breach of warranty on his part, and, as a consequence, the policy never took effect. This point was not distinctly made on the motion for a nonsuit, for the fact was not alluded to that the application failed to state or set forth the incumbrance. The point then urged was that the policy was void, for the reason that the City Bank mortgage existed on the property, and not because, when inquired of as to incumbrances, the plaintiff had omitted to state, either through mistake or design, the amount of incumbrance on the building proposed to be insured. As the objection is of the most technical kind, I am not sure that the defendants ought not to be met by one of an equally technical character, viz., that they omitted on the trial to distinctly and specifically direct the mind of the judge to the point now raised. But as the general ground was assumed, that on the whole case the plaintiff was not entitled to recover, let me briefly inquire whether, under the proof, the omission by the defendants’ agent to fill up the blank respecting incumbrances in the printed form of application, which he transmitted to the company’s office, unknown to the plaintiff, as a memorandum of what he had done-, in law avoided the contract of insurance ; and, if so (the defendants, having verbal notice of the incumbrance, received the premium and issued the policy), whether they can take the objection that the policy is bad because the notice was not w'ritten. The supreme court held that the policy in question was issued without a written application on the part of the plaintiff; that the agent filled up the printed form of application, and sent it to the company as a .private memorandum, taking the place of the written application required by the conditions of insurance; that the act of the agent, waiving a formal application on the part of the plaintiff, was approved and acceded to by the company, they having received the unsigned memorandum of the agent without signifying their disapproval,' and adopted his act; and that consequently the application given in evidence could not be referred to as containing ar y warranty on the part of the plaintiff in regard to incumbrances. If this be so, it would dispose of the question of any breach of warranty on the part of the plaintiff. Waiving an application by the plaintiff in the particular instance, and not inquiring of him as to incumbrances, there could be no warranty on his part that none existed on the property. I am disposed to agree with the supreme court, that the imperfect application transmitted by the agent to the defendant is not to be treated as an act of the plaintiff; but that the defendants chose to insure his building without any express representations or warranty on his part respecting incumbrances. But conceding the application technically to be the plaintiff’s, and that he is responsible for all it contained, or omitted to contain, should the defendants be heard now to object that they had not written notice of the incumbrance ? for this is all there is of the point. Maltbie, as the defendants’ agent, issued the three policies of 1851, 1852 and 1853, being duly authorized so to do. The defendants were responsible for all his official acts. The policy of 1853 was asked for as a renewal policy. The application for it said there was no incumbrance on the property “ excepting * * and the property thé same in all respects.” The first policy had been issued by the agent with verbal notice from the plaintiff of the City Bank mortgage, and ho issued the one in suit as a renewal policy, with full knowledge of such mortgage, the property remaining in the same condition as when first insured. The defendants took the premium for insuring the plaintiff, and issued the policy, well knowing that there had been verbal notice, but, none in writing. Honesty and good faith demand that they should not be allowed to make the objection now, that, though verbally notified of the incumbrance, for want of a written notice the policy is bad. They waived the necessity of such written notice, and, to prevent fraud and iujustice, are estopped from making the objection. They took the plaintiff’s money, and issued a policy to him upon verbal notice of the incumbrance, though their conditions of insurance required the notice to be in' writing. They affirmed the policy to be valid without written notice and the plaintiff acted upon such affirmation, and» paid the consideration for insurance. The defendants ought not to be permitted to gainsay their acts when the effect would be to defraud the other contracting party. A third ground was, that there could be no recovery, for the reason that.the action was not commenced within six months next after the loss occurred. The fire was on the 5th July, and the six months expired the 5th of the January following. It was undoubtedly competent for the parties to stipulate that the action should be barred unless commenced within a stated.period, and it was equally competent for the defendants to waive the stipulation. So, also, if the conduct of the defendants was such as to^ induce the plaintiff to suppose that it was not intended to insist upon, but to waive the condition, and by the act of the company itself he was prevented from bringing his suit until after the expiration of six months, there would be no bar. It was not in all cases that the action was to be barred unless commenced within six months after' the loss. By a prior condition to the one in question, the proofs of loss were to be delivered to the secretary within thirty days after the fire. Losses were due and payable at the secretary’s office m ninety days after due proofs of loss, amended and completed, had been filed in his office, in compliance with the terms and conditions of insurance. The company could wait- the six months, and then interpose objections to the proofs, and upon such objections being obviated, and the amended or completed proofs filed, have ninety days thereafter to pay the loss. In such case clearly there would be no bar. If the insured commenced his suit, under the twelfth condition, within six months after the loss, the company might defend themselves on the ground that it was prematurely brought, losses not being due and payable by the ninth condition, until ninety days after filing the amended proofs in the secretary’s office. It seems quite obvious that the twelfth condition only contemplated a case where the proofs of loss were originally complete and filed without objection, and the insured delayed bringing his suit, not only for the ninety days after such filing (which he was bound to do), but for an indefinite period afterwards. The object in view was to effect a speedy settlement of claims against the company. The defendants were to have ninety days to pay the loss, after the completion and filing of the proofs, but if they chose for any reason to defend, then the action was to be brought within a limited time after neglect or refusal to pay, or be barred. The defendants had it in their power, by objecting to the proofs of loss, and neglecting or refusing to file them, to extend the time, in which they were required to pay, beyond the period of six months after the occurrence of the loss; and in such case clearly it could not be pretended that the insured had stipulated away his right of action, but the defendants would be deemed to have waived the twelfth condition. In this case the proofs of loss were delivered to the defendants some nine days after the fire. They were retained, without objection, eighty-five days, or within five days of the time when the loss was due and payable by the ninth condition. It was then first suggested by the secretary that the proofs were incomplete, in not setting forth, as required, whether or not the insured property was incumbered. Seven days thereafter, and on the 14th October, the plaintiff transmitted an affidavit to the company, supplying the alleged defect. No further objection was heard from the defendants; but they had secured all that was probably desired, an extension of the time to pay the loss for ninety days from the 14th October, and put it out of the power of the plaintiff to successfully maintain an action commenced within six months after the loss occurred. The six months would have expired on the 5th January, 1854, whilst the loss was not due and payable by the ninth condition, nor could the company be compelled to pay, until after the 12th January. Thus things remained until the 2d January (within three days of the expiration of six months after the loss), when the secretary was asked when the defendants would pay the plaintiff his loss. The inquiry was made to the president and secretary, in the office of the company, and the secretary replied, when it was due—that the plaintiff would-then get his pay, and might be so informed. The time when due, as stated in the office, was the 14th January, aud it wuis then the company promised that payment should be made. The plaintiff was notified that the company would rely upon the ninth condition. No intimation was given that, unless action was brought within three days afterwards, they wmuld avail themselves of the bar prescribed in the twelfth condition. Indeed, the acts and promise of the officers of the company were directly calculated to lull the plaintiff into inactivity, and to assure him that if he would forbear suing until the 14th January, his money should be promptly forthcoming. He was told, in effect, that the defendants would insist on the terms of the ninth condition, as to the time when the loss was due and payable, and that if he commenced an action to save the bar prescribed by the twelfth condition, they should interpose the defence that, by the contract, the insurance money was not yet due and payable. It cannot be doubted, under the proof in the case, that the defendants intended to and did waive the limitation stipulated by the twelfth condition. One of the conditions provided that the assured should not be entitled to demand or recover any more than two-thirds of the cash value of any building (exclusive of the cellar), nor any larger sum than should, together with all other insurance thereon, amount to a sum equal to twotliirds of the cash value .of the insured property. The evidence showed that the plaintiff had insurance on the building in other companies than the defendants’, to the amount of $6000. In the proofs of loss, the cash value of the building was stated at $22,000. The defendants, on the trial, admitted that it was worth $8000. The point now made is, that the evidence showed the value of the building destroyed to be but $8000, and as the plaintiff had insured in other companies the sum of $6000, being more than two-thirds of its cash value, he was not entitled to a verdict against the defendants for any amount whatever. This proposition was neither put forth on the trial or at the bar of the supreme court, and being untenable in law, and resting on no foundation of fact, should have been omitted here. It is a sufficient answer that the proof did not conclusively fix the cash value of the building destroyed at but $8000. The defendants’ agent had, but the year previously, in the memorandum which he forwarded to the defendant, estimated it at almost double that sum. The judgment of the supreme court must be affirmed. Judgment accordingly.