Cross v. National Fire Insurance — 43 N.Y. St. Rep. 482

Majority

p. 482

Sidney S. Cross, Resp’t, v. The National Fire Ins. Co. of New York City, App’lt.^[1]

(Court of Appeals, Second Division,

Filed March 8, 1892.)

Headnote

1. Insurance (Fire)—Insurable interest.

One who has agreed for a consideration to take possession of property and care for it, rent it and keep it insured has an insurable interest in it. although he has no legal or equitable title in the land.

3. Same—Waiver—Knowledge of agent.

Plaintiff’s son was the general agent of defendant and personally examined the buildings before issuing the policy and knew they were vacant and unoccupied, and had notice of the nature of the title, and the policy described the plaintiff as a trustee. No information was requested of plaintiff and he made no representations to the agent and as there was no-claim of collusion the defendant was bound by the contract even if it was. deceived by its agent as to the condition or title- of the property.

p. 483

Appeal from a judgment of the general term of the fifth judicial department, affirming a judgment entered upon the verdict ■of a jury.

Action upon a policy of insurance against fire issued to the plaintiff as ‘"Trustee.”

The firm of Daniels & Mack were originally the owners of the insured property. The firm, being insolvent, made a general assignment to John E. Pound, and, subsequently having been adjudicated bankrupts, John T. Joyce was made the assignee in bankruptcy of the individual members of the firm.

Willard J. Daniels died in 1877, and John Hodge and Howard W. Helmer were administrators of his estate, and, as such, were creditors of Daniels .& Mack in the sum of $20,000.

In consideration of this indebtedness the assignee aforesaid conveyed the real estate on which the buildings insured were situated to Hodge' and Helmer as administrators, and in May, 1886, said administrators, having substantially settled all matters relating to their trust, and having no property in their possession except said real estate, conveyed it to the plaintiff in trust to sell it within two years for not less than $2,000, and after deducting a commission of five per cent to distribute the proceeds of the sale among the heirs of their intestate, and upon receiving said conveyance plaintiff orally agreed with the administrators to take possession of the property, care for it, rent it and keep it insured. Pursuant to that agreement the insurance in question was effected. Further facts appear in the opinion.

I. N. Ames, for app’lt; A. K. Potter, for resp’t.

A contract of insurance is intended as an indemnity against an uncertain event which, if it occurs, will cause loss to the assured.

The assured must, therefore, have some interest in or have such a relation to the insured property that he will sustain a loss from the peril insured against; otherwise the policy would be a wager which the law condemns.

The courts of this state are disposed to maintain policies where the assured has an insurable interest, and when that fact appears their validity will be determined by the conditions of the contract.

The party applying for insurance is not bound to disclose the nature or extent of his interest to the insurer unless requested. It may be shown by paroi to exist and the . company must pay its value to the extent of the amount named in the policy. Crowley v. Cohen. 3 B. & Ad., 478; Kernochan v. N. Y. Bowery Ins. Co., 17 N. Y., 428 .

The learned counsel for the appellant has argued several interesting questions relating to plaintiff’s title to the land and the effect of the conveyance from the assignee of Daniels & Mack to the administrators and from the administrators to the plaintiff. We do not deem it necessary to consider these questions. With, the distribution of the fund arising from the insurance the defendant has no concern, and it has none with the legal title to the land any further than it may be made applicable to the case by

p. 484

the conditions of the contract. While the policy Contains the-, usual conditions declaring it void if the plaintiff was other than, the sole and unconditional owner or if the buildings were on. ground not owned by the insured in fee simple, or if it should become or remain vacant or unoccupied for ten days, the court held that these conditions were waived and the evidence clearly supported that conclusion.

The plaintiff’s son was the general agent of the defendant and personally examined the buildings before issuing the policy, and knew that they were vacant and unoccupied. He also had notice of the nature of the title and the policy described the plaintiff as-a “trustee.” No information was requested of the plaintiff and he made no representations at all to the agent, and there being no-claim of collusion the defendant was bound by the contract even if it was deceived by its agent as to the condition or title of the-property.

The only -question of importance in the case, therefore, is as to-the plaintiff’s insurable interest. This he could have without any legal or equitable title in the land, and hence it is not important, to discuss the effect of the conveyance referred to.

He had agreed for a consideration to take possession of the- ■ property and care for it, rent it and keep it insured. There was-a possible liability which might arise out of that agreement which created in him an insurable interest to the extent of the value of the buildings, and the case falls within the principle of numerous and well recognized authorities, a few of which are cited. Stilwell v. Staples, 19 N. Y., 401 ; Waring v. Indemnity F. Ins. Co., 45 id., 606; Sturm v. Atl. M. Ins. Co., 63 id., 77; Kline v. Ins. Co. 7 Hun, 267 ; 69 N. Y., 614 ; Berry v. Central Ins. Co., 43 St. Rep., 400 , and cases cited.

No other questions require consideration.

The judgment should be affirmed.

Judgment affirmed, with costs.

All concur.