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Alston v. Mechanics' Mutual Insurance

1 Hill & Den. 510 Court N.Y. Sup. Ct. English

Delivered by *511 By the Court, Cowen, J.

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p. 510
Alston vs. The Mechanics’ Mutual Insurance Company in the City of Troy.

Headnote

Where the insured, on applying for insurance upon a building against fire, promised the insurers verbally that if they would grant his application he would discontinue the use of a fire-place in the basement and Use a stove instead thereof; but, after obtaining the policy, persisted in using the fire-place as before : Held, that this avoided the policy.
A representation, within the meaning of that term as applied to policies of insurance, may, like a warranty, be either affirmative in its character, or promissory.
A warranty, being matter contained in the policy, is fatal to it, if violated only in the letter. Otherwise, as to a representation ; for this being matter aliunde requires only a substantial compliance.
A representation, whether promissory or affirmative in its nature, must relate to something material to the risk.
Motion to set aside the report of referees, The action was on a policy of insurance against fire upon a brick house of the plaintiff; and the policy after describing the height of the house above the basement, added—“ which basement is privileged as a cabinet-maker’s shop.” The cause was referred to referees.
On the hearing before the referees, after the plaintiff had made out a prima facie case and rested, the defendants proved, among other things, that before obtaining the policy, the plaintiff used a fire-place in the basement of the house ; but on the defendants’ refusing for that reason to insure, he promised to. abandon the use of the fire-place and confine himself to the use of a stove. The promise was entirely disregarded, and the house was burned soon after the policy was executed, the fire originating in the basement. The defendants relied upon the above promise and subsequent conduct of the defendant, as showing a misrepresentation which should bar the plaintiff’s right of recovery. The referees reported in favor of the defendants, and the plaintiff now moved to set aside the report.
M. T. Reynolds, for the plaintiff.
D. L. Seymour & S. Stevens, for defendants.

The promise not to use the fire-

place, which was considered quite material by both parties, was made, but grossly violated, and the house was burned down. There is no doubt that the policy was avoided by this breach of good faith, provided the promise as to the future condition of the shop can be considered a representation. It was said in argument that a representation must relate to a present fact. It ' generally does so; but no case has been cited showing that it may not be made of a prospective one. On the contrary, courts have certainly assumed that it may; for instance, that a ship will sail with a certain number of guns and men. (Edwards v. Footner, 1 Camp. 530. Vid. also Bize v. Fletcher, Doug. 284, 5; Park on Ins. 270, S. C., Lond, ed. 1809.) Indeed it seems to me that if representations are to be received at all, they must very often be, in effect, promissory, however they may be expressed; as if a representation be made in the present tense of a fact, the existence of which would be material to the safety of the ship or house insured during the whole time mentioned in the policy. This is a very common case both as to warranties and representations,. Accordingly an eminent writer on insurance says, “A representation, like a warranty, may be either affirmative, as where the insured avers the existence of some fact or circumstance which may affect the risk, or promissory, as where he engages for the performance of something executory.” (1 Marsh, on Ins. 450, Am. cd. of 1810, ch. 10, § 1.) No book was shown on the argument contradicting this, nor am I aware of any. A warranty is very commonly promissory, and if violated only in the letter, the policy is-avoided. The only difference between that and a representation is, that the latter being collateral to and out of the policy, it is enough that it be substantially complied with. The same thing, whether in the present or future tense, which, in a policy, would be a warranty, would, out of it, affect the policy as a representation, if material to the risk.

Motion denied.