Dowd v. American Fire Insurance Co. of Philadelphia — 3 N.Y. St. Rep. 793

Majority

p. 793

Mary Dowd et al., Resp’t, v. The American Fire Ins. Co., of Philadelphia, App’lt.

(Supreme Court, General Term, Third Department,

Filed June, 1886.)

Headnote

Insurance (Fire)—When policy rendered void by failure of the,

INSURED TO HAVE HIS INTEREST IN PROPERTY TRULY STATED.

A policy of fire insurance provided that only property specifically mentioned in said policy was covered by it and further that if the interest of the party insured was “a leasehold or other interest not amounting to absolute or sole ownership, or if the building insured stands on leased ground it must be so represented to the company and expressed in the policy in writing, otherwise the insurance as to such property shall be void." The instrument under which the plaintiffs title accrued stated that J. H. who was the original owner of the land demised, leased, and to farm let,

p. 794

unto the assignor of the plaintiff, the land upon which the building in question was erected, and to his heirs and assignees forever and provided for perpetual payment of an annual rent with a clause for re-entry for condition broken, in a suit for the amount of this insurance on said building, it having been burned. Held, that the building stood on leased ground! and as that fact was not represented to the company nor expressed in the policy, the latter was void. Van Belioick v. Miagara Mre Ins. Oo. 68 N. 5T., 436, distinguished.

Appeal from a judgment entered in Saratoga county, upon the report of a referee in favor of the plaintiff.

The action was brought upon a policy of fire insurance. The insurance by the terms of this policy was made subject among other conditions and limitations to the following: that property was not covered by the policy unless specifically mentioned. That if the property which was sought to be insured was ‘ ‘ a leasehold or other interest, not amounting to absolute or sole ownership, or if the building insured stands on leased ground it must be so represented to the company and expressed in the policy in writing, otherwise the insurance as to such property shall be void.”

The building covered by the policy stood on ground held under a perpetual lease and was destroyed by fire.

Alden Chester, for app’lt; J. C. Armsby, for resp’t.

It seems to me plainly proved that the building which was insured under the policy, put in evidence in this case,- stood on leased ground, and it was not so represented to the company nor expressed in the policy in writing, and the policy contained a provision that otherwise the insurance as to such property should be void. The instrument, under which the plaintiffs’ title accrued, stated that John House, who was the original owner of the land demised, leased and to farm let unto the assignor of the plaintiffs the land upon which the building in question was erected, and to his heirs and assignees forever, and provided for perpetual payment of an annual rent, with a clause of re-entry for condition broken.

It was proved that at the time when the policy was executed the rent had been in arrears for a number of years. The ground was leased ground within the meaning of the language used in the policy. Tyler v. Heidorn, 46 Barb., 439 ; Van Rensselaer v. Barringer, 39 N. Y., 1 , at 18. The first cited case shows the view taken by the general term in this department of the character of those instruments which reserved rent, even when in the language used they were, in terms, conveyances in fee, subject to the payment of rent; the court saying that the parties to the instrument were landlord and tenant, even when the language was as above stated. The language in the instrument in question is technically that which is used in leases, “demise, lease

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and to farm let/’ “yielding and paying therefor’* * * * “the annual lent,” etc. '

I think it must be held that it was proved, the building stood on leased ground. In regard to such a condition as is contained in this policy, making it necessary to be stated, etc., Folger. J., said. “It is to be observed of this condition, that it is not one of those which are subsequent to the formation of the contract, a breach of which may occur after there had been a valid contract made and entered into, and continued in existence for a part of its prescribed term It is a condition precedent, lying at the threshold of the making of the contract, and which, if not then performed or not then obviated, prevents the formation of an enforceable contract. It is obvious that this building, being on leased ground, the very moment that the policy passed from the defendant to the plaintiff the insurance on it was void if the condition holds. See Van Schoick v. Niagara Fire Ins. Co., 68 N Y., 434 , at 436.

It appeared, in that case, that the agent of the defendant, who procured the insurance, knew the state of the title before the policywas executed or delivered, and knew the building stood on leased ground. It was held that the defendant was_ liable on the ground that it must be presumed to have waived that condition as to presume otherwise would be to impute to defendant a fraudulent intent in issuing a policy known by it to be invalid This knowledge of the fact by the agent of the company prior to the delivery of the policy was che plaintiff s' reply, in above case, to the defense based on that condition of the policy and its breach ' bic such knowledge is shown in this case, and in the absence of such proof no reply is made to the defense of defendant founded upon that condition in the policy and its breach.

For these reasons the judgment must be reversed, new trial granted, with costs to abide event, and referee discharged.

Bocees, P. J., and Landón, J., concur.