Poughkeepsie Savings Bank v. Manhattan Fire Insurance

Headnote

Agency — when a fire inswanee company is estopped from setting up an erroneous statement as to the oxonership of the property, which was inserted in the policy by the mistalce of its agent.

Appeal from a judgment in favor of the plaintiff, entered upon the trial of this action by the court without a jury.

In April 1869, the defendant Edward Cranston, being the owner of certain land in Ulster county, executed and delivered a mortgage on the same accompanied by Iris bond to Edgar B. Newkirk, to secure the payment of' §800, which came to the plaintiff by regular assignment. Cranston procured a policy of insurance on the house upon the premises to the plaintiff. Olay, Merrill and Dubois were the

agents of the Connecticut Insurance Company at Kingston in Ulster county, and through them the plaintiff obtained several renewals of the policy, the last one expiring October 23,1879. The loss, if any, was payable to the plaintiff as collateral to the mortgage.

At the expiration of the last renewal, these same agents forwarded by mail to the plaintiff the policy in suit issued by the defendant, on the same building, with mortgage condition slips .attached, and Edward Cranston paid the premium. These agents were the agents of the defendant at Kingston, and without the knowledge of the plaintiff had ceased to be the agents of the Connecticut Company. Previous to the issuance of the policy in suit, the title of the property had been changed by the foreclosure of a second mortgage, and became vested in the defendant Anna Cranston, who was then the owner. This fact was then unknown to the plaintiff, the defendant and the agents, and no representation or request of any kind respecting the property or the policy were made to the defendant or the agents by any person.

The property was destroyed by fire June 25, 1881, and the loss has been adjusted at $930. The mortgage of the plaintiff is unpaid.

It was found by the trial court that the policy constituted an agreement by the defendant to insure the house described, and that the mistake made by the agents of the defendant in.naming the owner was not caused by any fraud or, misrepresentation. That by the payment and acceptance of the premium the owner acquired the right to the benefit of the insurance, and that the policy was valid as to the plaintiff and the owner. Judgment went for the plaintiff.

The court at General Term said : “We find no reason to question its correctness. The policy was delivered and the premium received with full purpose of insuring the building, and there was no fraud or misz'epresentation. Clearly the error of the agents cannot be set up by the company as a breach of warrantee, and the policy of insuz’ance should be applied to the subject and interest intended to be covez-ed. (Bidwell v. North - Western Ins. Go., 19 N. Y., 182 .)

“ The just rule on the subject now is, -that where a mistake is the fault of the agent the insurer is bound to i-espond on the contract actually made. ” (Rowley v. Empire Insurance Company, 36 N. Y., 550 .)