Hyperlawhypertext legal database Roby v. American Central Ins. 31 N.Y. St. Rep. 560

← Cases

Roby v. American Central Ins.

31 N.Y. St. Rep. 560 Court N.Y. Decision date 1890-06-03 English

Delivered by *561 Yann, J.

Contents

Majority

p. 560
Sidney B. Roby, Resp’t, v. The American Central Ins. Co. of St. Louis, App’lt.[1]
(Court of Appeals, Second Division,
Filed June 3, 1890.)

Headnote

1. Insurance (eire)—Change op title—Partnership.
The mere dissolution of a firm does not destroy the joint interest of the copartners in the partnership property, nor make them tenants in common, so as to avoid a policy of insurance which forbids a “ change of title.”
S. Same—Repairs .and alterations—Increase op risk—"Waiver.
If in any negotiations or transactions with the insured, after knowledge of a forfeiture, the company recognizes the continued validity of the policy, or does acts based thereon, or requires the insured by virtue thereof to do some act or incur some trouble or expense, the forfeiture is as matter of law waived and such waiver need not be based upon any new agreement or estoppel.
3. Same.
Where the company knew that, after the risk was placed, the insured made certain alterations and yet demanded further proof of loss, and insured in complying with the demand was put to expense and inconvenience, it cannot refuse payment of the loss on the ground that such alterations worked a forfeiture.
Appeal from a judgment of the general term of the supreme court, in the fifth judicial department, affirming a judgment entered on a verdict and also affirming ah order denying a motion for a new trial.
Action upon an insurance policy issued by the defendant on the 26th of January, 1882, whereby it insured the firm of William Corris & Co. in the sum of $2,000 for the period of one year from said date against loss or damage by fire to their stock, “fixtures, tools and machinery, as manufacturers of woodwork for carriages, contained in” a certain building in Rochester. Said ■firm was composed of William Corris and the plaintiff, and in September, 1882, the firm name was changed to the Rochester Wheel Company. A dissolution of the copartnership was then in contemplation, but the business was continued under the management of the plaintiff without any change in the books and with the same machinery until in January, when there was a formal dissolution. The property insured was partially destroyed by fire on the 8th of January, 1883, and in March following William Corris assigned all his interest in the firm assets to the plaintiff. The defendant pleaded in its answer that there had been a change of title to the property insured without its consent; that the risk had been increased by repairs and alterations without its knowledge; that the proofs of loss were defective, and that the fire was caused “ by said repairs, alterations or additions, or some one of them.”
A.x J. Abbott, for app’lt; William K Cogswell, for resp’t,

The policy in question provided that if the risk should be increased by any cause known to the insured unless notice thereof should be given to the defendant and its consent endorsed upon the policy; or if there should be any change of "title to the property insured without such consent, the policy should thereupon cease to be binding upon the company. It further provided that the working of carpenters, plumbers or other mechanics in building, altering or repairing the property, building or premises named in the policy should avoid the same, unless permission for such work were given in the usual way.

Whether there was an increase of risk within the meaning of the policy was a question of fact that was duly submitted to the jury. They are presumed to have found against the defendant upon that issue and as their conclusion is supported by sufficient evidence it cannot be reviewed here. Hynes v. McDermott, 91 N. Y., 451 , 464.

We think that there was no change of title to the property insured, because the mere dissolution of a firm does not destroy the joint interest of the co-partners in the partnership property, nor make them tenants, in .common. Murray v. Mumford, 6 Cow., 441 ; Tarbell v. West, 86 N. Y., 280 , 290; King v. Leighton, 100 id., 386, 392 ; Dresser v. United Fireman's Ins. Co., 45 Hun, 298 ; 12 N. Y. State Rep., 434; Story on Partnership, § 325; Lindley on Partnership, 5th ed., 218.

The co-partnership continued, in a limited sense, with reference to past transactions and existing assets. While the power previously possessed by each partner to bind the other was determined, that which was partnership property before the dissolution continued to be such afterward, until one of the copartners sold his interest to the other.

The motion to non-suit was based upon many grounds, some of which are too general to require attention and none of which need further notice except the following:

“ 6. That the proofs of loss furnished the defendant show upon their face that the fire originated through friction in the exhaust fan, which the proofs on the trial show was put into the building where the property insured was located after the policy was issued and without the consent of the defendant as provided by the. policy.”

The defendant excepted to the denial of said motion and also to the instruction of the court to the jury, “ that if the company, after it had notice of the repairs or alterations upon which it now relies to defeat the policy, requires, by virtue of the policy, any action on the part of the plaintiff by which he was subjected to inconvenience or expense, it has waived this forfeiture.”

plaintiff stated in the proofs of loss “ that the fire originated through friction in the exhaust fan as deponent verily believes,” The exhaust fan consisted of a circular iron case, about four feet in diameter, with a wheel within, described as a paddle wheel with broad blades. This wheel by rapid revolution created a powerful current of air that carried away the

p. 562
shavings. The evidence showed that such machines are largely used for that object; that they are introduced for “ the very purpose of their safety,” and that while they are liable to friction, as all machinery is, “as a whole they decrease the risk.”

Defendant’s agent, whose authority is not questioned, testified that he visited the building in which the risk was located at the time that he issued the policy; that he knew what the property insured generally consisted of, and what the business of the firm was; that the next day after the fire he examined the premises and found that this exhaust fan had been put in, and through the conversation of other agents learned about the alterations, improvements and changes that had been made. The proofs of loss were received January 29, 1883, and on the third of February the defendant, through its general adjuster, notified the insured, in writing, that such proofs were unsatisfactory because they were not properly signed and sworn to; that they were signed “ William Corris & Co., composed of Sidney B. Roby,” and that “William Corris & Co., collectively, are incompetent to make an oath testifying to" the correctness of the statements in the pretended proofs; some one or more of the individual members of such firm must sign his or their individual names as of and for the said firm and testify and each for himself sign and testify under oath to the correctness of such statements;” that the signature of the notary was not authenticated by a seal and that the jurat was defective in form. The notice further stated as follows: “ Proofs of loss in due form covering the objections and requirements hereinbefore mentioned and referred to and conforming to the requirements of the printed condition of said policy * * * should be made under said policy and * * * are required of you.” Full information under oath was also required as to who- composed the firm of William Corris & Co., and as to each and every transfer or change of title to the property mentioned in the policy. No information was required upon any other subject, and no .intimation was given that the company intended to rely upon the forfeiture clauses, or that it claimed that the policy was void for any reason.

Upon the receipt of this notice the insured employed counsel to advise what it was necessary to do, and on March 3, 1883, prepared and served a supplementary affidavit, substantially covering the points as to which further information was required by the company. The policy contained explicit provisions in regard to the proofs of loss to be furnished by the insured, and required that they should be “ signed by" his own hand ” and accompanied by “his oath or affirmation.” They were to contain information upon many points, and among others, as to who was the owner of all the property insured.

Thus it appears that after the fire, and after the defendant knew of the facts involving the forfeiture now insisted upon, it recognized the validity of the policy, and subjected the insured to trouble and expense by requiring them to furnish information pursuant to its provisions. Thus, this case is brought within the principle- laid down in Titus v. Glens Falls Ins. Co., 81 N. Y.,

p. 563
410 . The court, in deciding that case, said: “It may be asserted broadly that if in any negotiations or transactions with the insured, after knowledge of the forfeiture, it (the company) recognizes the continued validity of the policy, or does acts based thereon, or requires the insured by virtue thereof to do some act or incur some trouble or expense, the forfeiture is, as matter of law, waived, and it is now settled in this court, after some difference of opinion, that such a waiver need not be based upon any new agreement or estoppel.” Among many cases cited in support of this proposition are Goodwin v. Mass. Mut. Life Ins. Co., 73 N. Y., 480 , 493; Prentice v. Knickerbocker Life Ins. Co., 77 id., 483 , and Brink v. Hanover Fire Ins. Co., 80 id., 108. The principle is recognized in Robertson v. Metropolitan Life Ins. Co., 88 N. Y., 541 , 545, but was not applied; as in that case as well as in Weed v. L. & L. Fire Ins. Co., 116 N. Y., 106 , 118; 26 N. Y. State Rep., 414, the company did not know of the facts relied upon to work a forfeiture when its action, that was claimed to constitute a waiver, was taken.

The policy in question was void or valid as a whole. If any part was valid, it was all valid. The defendant could not enforce any part without practically admitting that it was operative in all its parts. By demanding further proofs of loss, in fact and in form, it demanded that which it had contracted for, and thus attempted to enforce the contract in part. The insured complied with the demand, and was thereby put to expense and inconvenience, and thus the defendant succeeded in enforcing the -contract in part. It then knew, or is presumed from the evidence and the verdict of the jury to have known, that the exhaust fan had been put in by the insured after the date of the policy. Hyatt v. Clark, 118 N. Y., 563 , 569; 29 N. Y. State Rep., 851. Knowing that it could insist upon a forfeiture on this ground, and without attempting to reserve any right, it called on the insured to perform their part of the contract, and thus put itself in the position of deliberately asserting its validity, and of insisting that it .should be carried into effect. When, in turn, it was called upon to perform its own part thereof, it could not recede from that position. It could not enforce the contract as valid in so far as it was favorable, and resist it as void in so far as it was unfavorable. After requiring performance from the insured with knowledge of the facts, it could not refuse performance on the ground that those facts had worked a forfeiture. We think, therefore, that the learned trial judge correctly announced and applied the law when he instructed the jury that if they found the facts in accordance with the theory of the plaintiff, the defendant had waived its right to insist upon a forfeiture.

As we find no exception that requires a new trial, we think that the judgment should be affirmed, with costs.

All concur, except Bradley and Haight, JJ., not sitting.