Hyperlawhypertext legal database Van Deusen v. Charter Oak Fire & Marine Insurance 24 N.Y. Super. Ct. 55

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Van Deusen v. Charter Oak Fire & Marine Insurance

24 N.Y. Super. Ct. 55 1 Rob. 55 Court N.Y. Super. Ct. Decision date 1863-05-30 English

Contents

Majority

p. 55
Alonzo Van Deusen, plaintiff and respondent, vs: The Charter Oak Fire and Marine Insurance Company, defendants and appellants.

Headnote

1. Insurers can not defeat an action on a policy of insurance issued by them, by the objection that a magistrate’s certificate required thereby was never served on them, after they had received and examined other proofs of loss presented by the insured, and stated in answer tó subsequent inquiries On his part whether there were any further proofs that ho could show, or any thing further was wanted of him, that there was not, and offered to compromise the claim, without any objection to the proofs.
2. when a Motion to dismiss the compíaint in suóh case' at the trial, placed solely upon the ground that the papers served on the defendants were not in compliance with tho terms of the policy is denied, no objection can be raised on appeal by the insurers against such denial, that the person on whom a magistrate’s certificate required by the policy was served, was not the authorized agent of the defendants to receive it.
8. A chattel mortgage given upon goods covered by a policy of insurance upon a stock of merchandise, including goods sold but not delivered, without parting with their possession or the right of possession thereto, will not avoid such policy, although one of its printed conditions provides that “ in case of any transfer or termination of the interest of the insured in the property, by sale or otherwise * * * the policy shall be void; and.“that in case of any sale, alienation, transfer or change of title in the property insured * * * or of any individual interest therein, such insurance shall be void; and the entry of a foreclosure of a mortgage, or the levy of an execution, or an assignment for the benefit of creditors, shall be deemed an alienation of the property.” The meaning of the words “ sale, alienation or transfer ” in such condition is to be confined to acts which absolutely divest the title of the insured.
(Before Bosworth, Ch. J. and Moncrief and White, JJ.)
Heard May 14, 1863;
decided May 30, 1863.
p. 56
This was an appeal by the defendants from a judgment in favor of the plaintiff, entered on a verdict.
The action was brought upon a policy of insurance, and was tried before Mr. Justice Hohcbief and a jury, on December .5, 1862.
By the policy the defendants insured the plaintiff “ against .loss or damage by fire to the amount "of $5000, on merchandise hazardous and not hazardous, his own, or held by him in trust or on commission, or sold but not delivered, contained in the brick and stone building, situate Ho. 40 Murray street, city of Hew York.”
It contained a clause declaring that “ no part of this contract can be-waived except in writing signed by the secretary.”
Such policy contained the following conditions :
III. “Property held in trust or on commission must be insured as such'; otherwise the policy will not cover such property ; and in case of loss, the names of the respective owners shall be set forth in the preliminary proofs of such loss, together with their respective interests therein. Property on storage must be separately and specifically insured.
If the. interest in property to be insured be a leasehold, or any other interest not absolute, or if it be equitable, it must be so represented to the company in writing, with the true title of the insured and the extent of his interest, and so expressed in the policy in writing, otherwise the insurance shall be void, And this policy shall not be construed to protect the interest of any person not named herein.
[Note.] By‘property held in trust’ is intended property held under a deed of trust, or under the appointment of a court of law or equity, or property held as collateral security; in which latter case, this company shall be liable only to the extent of the interest of the assured in such property.
IV. This policy, or any claim arising under it, shall not be assigned, transferred, pledged or sold, either before or after a loss, without the consent of the company, expressed by indorsement made thereon. In case of assignment, transfer, pledge or sale, without such consent, whether of the whole
p. 57
policy, or of any interest in it, the liability of the company, present and future, shall then cease. And the company reserves the right to elect, either to consent to a transfer before a loss, or return a ratable proportion of the premium and cancel the policy. And in case of any sale, alienation, transfer or change of title in the property insured by this company, or of any undivided interest therein, such insurance shall be void and cease. And the entry of a foreclosure of a mortgage, or the levy of an execution, or an assignment for the benefit of creditors, shall be deemed an alienation of the property.
In case of claim for loss or damage on a policy assigned, where there is no actúal sale or transfer of the property insured, proofs of loss shall be made by the assured, in. conformity with the conditions of this policy, the same as if no assignment had been made; otherwise this policy shall be void, and all liability on the part of this company shall cease.”
An additional condition (VIII) required the insured, in case of loss, to deliver an account and proofs thereof to the defendants, and also to “produce a certificate under the hand and seal of a magistrate, notary public, or commissioner of deeds, (most contiguous to the place of the fire and not concerned in the loss, as a creditor or otherwise, or related to the insured or sufferers,) stating that he has examined the circumstances attending the loss alleged, and is acquainted with the character and circumstances of the claimants, and that they have sustained loss to a specified amount.”
The goods insured were almost wholly destroyed by fire on the 5th day of December,. 1861. The plaintiff’s loss was $11,116.79. Upon the trial Elisha Peek, the agent of the defendants, in the city of New York, testified that immediately after the fire he wrote to the defendants to send somebody down to look after it, and they sent their agent Chapman, (who heard of the fire a day or two after it occurred) to examine into the circumstances. He arrived in New York on the 9th day of December, went to the scene of the fire with Peck,
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and made a “ critical examination,” and examined the plaintiff’s hooks of account.
On the 10th, upon Chapman’s asking the plaintiff for his proofs of loss, the latter gave him the paper containing them, which Chapman took to the office of the defendants in Hartford, Conn, and the defendants produced it on the trial. The plaintiff and another witness testified that two or three days after this, and before Chapman left the city, the plaintiff asked him “ if there was any thing further he could do, any thing furthey they wanted of him.” The reply was, “ There was not; if there was, they ioould let him know.”
After the plaintiff had rested, the defendants’ counsel moved to dismiss the complaint, on the ground that the paper so served on the defendants was not in compliance with the terms and conditions of the policy, as a prerequisite to the right to recover.
The court denied the motion ; to which denial the defendants’ counsel excepted.
In the proofs of loss it was stated in an affidavit of the insured, that such “ property was at the time of said fire subject to a mortgage executed by the £ insured,’ to Mark R. Van Deusen, of the town of Alford, Berkshire county, Mass, dated July 6, 1861, and filed in the register’s office for the city and county of Hew York, which contained the condition that the insured £ should pay the holders thereof, when due, or cause to be paid, all promissory notes which ’ had been .or thereafter might be £ made and signed by the ’ insured £ as prin-. cipal, apd indorsed or signed as surety by the ’ mortgagee. That there was no other mortgage or incumbrances on said property.”
The counsel for the defendants offered, in evidence, the chattel mortgage mentioned in the proofs of loss, to show an alienation, transfer, or change of title, in the property insured, which was admitted, against the plaintiff’s objection and exception. It did not appear that the mortgagee had ever had the right to take possession, or had actually entered into possession of the property.
A certificate of a notary was made and delivered to Elisha
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Peck, on the 13th day of December, which he sent to the home office, a day or two after he received it; but the president of the defendants testified that they never received it. The plaintiff, before the commencement of this action, called upon the defendants for payment of his claim, and they refused, but finally offered to pay .a portion of it, by way of compromise. There was no evidence that they ever requested further proofs, or objected to payment on the ground that the proofs were defective, or intimated that the plaintiff had not complied with the terms and conditions of the policy.
The defendant’s counsel requested the court to charge the jury, that under the terms of the policy there could be no waiver, except in writing signed by the secretary, Also that the chattel mortgage put in evidence showed that there was such a sale, alienation, transfer or• change of title, in the property insured by the defendants, as rendered the insurance void, and it ceased. The court refused so to charge, to which ruling the defendants’ counsel excepted.
The jury rendered a verdict for the plaintiff for $5254.70, and judgment having been entered, the defendants appealed therefrom.
Henry C. Pratt, for the defendants, appellants,
I. The court erred, in not dismissing' the complaint. The • plaintiff alleges performance of all the conditions on his part, The conditions of flie policy required the .plaintiff to produce with his proofs of loss, a formal certificate in regard to certain specified facts. None such was produced. No evidence on the part of the plaintiff shows a performance. Nor does it show a waiver of such certificate under the terms' of the policy. Nor is a waiver a performance.
II. The court erred in not charging the jury, as requested, that there could be no waiver, except in writing signed by the secretary.
III. The court erred in not charging the jury, as requested, that the chattel mortgage rendered the insurance void. That mortgage was a sale and transfer to the mortgagee, of the
p. 60
whole legal title to the goods and chattels mortgaged, being “the property insured.” (Bank of Rochester v. Jones, 4 N. Y. Rep. 497 , 507. Butler v. Miller, 1 id. 496, 500. Southworth v. Isham, 3 Sandf. 448 . Hull v. Carnley, 2 Duer, 99 , 106. Rich v. Milk, 20 Barb. 616 . Stewart v. Hanson, 35 Maine R. 508. Shuart. v. Taylor, 7 How. Pr. 251 , 254.) Thereupon by the plaintiff’s own act, the policy and insurance were made void, of no effect, and ceased. (Edmands v. Mutual Safety Fire Ins. Co., 1 Allen, 311 . Abbott v. Hampden Mutual Fire Ins. Co., 30 Maine Rep. 414 . Orrell. v. Hampden Fire Ins. Co.. 13 Gray, 431 .)
T. D. Pelton, for the plaintiff, respondent.
I. The defendants could waive a compliance with the conditions in the policy relating to preliminary proofs, either expressly or by implication. There is no requirement in the policy, that such waiver should be in writing, and signed by the secretary. In this case a waiver may be implied from either of the following facts:
1. From the declaration of the defendants’ agent. (Franklin Ins. Co. v. Coates, 14 Md. Rep. 285 . Clark v. New England Ins. Co., 6 Cush. 342 . Conover v. Mutual Ins. Co. 3 Denio, 254 .)
2. From the silence of the defendants touching the proofs. (Ætna Fire Ins. Co. v. Tyler, 16 Wend. 400 . Savage v. The Corn Exch. Ins. Co., 4 Bosw. 1 . Bilbrough v. Metropolis Ins. Co., 5 Duer, 587 . O’Niel v. The Buffalo Fire Ins. Co., 3 Comst. 122. Kernochan v. The Bowery Ins. Co., 17 N. Y. Rep. 428 . Child v. Sun Mutual Ins. Co., 3 Sandf. 26 , 42. Vos v. Robinson, 9 John. 192 . Clark v. The New England Mutual Ins. Co., 6 Cush. 342 . Underhill v. The Agawam Ins. Co., Id. 440 . Heath v. The Franklin Ins. Co., 1 id. 257, 264. Inland Ins. Co. v. Stauffer, 33 Penn. Rep. 397 . Allegro v. Insurance Co., 6 H. & J. 408 . Angell on Insurance, §§ 515, 249.
3. From the negotiations and offer of the defendants to pay a part of the claim. (Bodle v. The Chenango Ins. Co., 2 Comst.
p. 61
53. McMasters v. The Western Ins. Co., 25 Wend. 379 . Westlake v. St. Lawrence Ins. Co., 14 Barb. 206 , 211.)
II. The object of the defendants in the condition requiring preliminary proofs, was fully attained. (Lawrence v. Ocean Ins. Co., 11 John. 241 . Barker v. Phoenix Ins. Co., 8 id. 318 .)
III. The proofs having been accepted without objection, it is immaterial whether they were in compliance with the terms and conditions of the policy or not. The motion to dismiss the complaint was made upon a specified ground only. (Boynton v. Clinton &c. Ins. Co., 16 Barb. 254 . Bumstead v. Dividend Mutual Ins. Co., 2 Kern 90.)
IY. The mortgage put in evidence by the defendants, was not such an alienation as rendered the insurance void. (Shepherd v. The Mutual Ins. Co., 38 N. H. Rep. 232 . Jackson v. Mass. Fire Ins. Co., 23 Pick. 418 . Conover v. The Mutual Ins. Co., 3 Denio, 254 . Angell on Ins. §§ 58, 205. 1 Phillips on Ins. 286.)

The objection that the preliminary proofs do not contain the certificate of a magistrate, as required by the eighth of the conditions annexed to the policy, can not be taken for the first time at the trial. (Bilbrough v. Metropolis Ins. Co., 5 Duer, 587 . O’Niel v. The Buffalo Fire Ins. Co., 3 Comst. 128.)

The objection to these proofs, taken on the motion to dismiss the complaint, was that “ the paper served on the defendants, as above, was not in compliance with the terms and conditions of the policy, as a prerequisite to the right to recover.” The terms of the objection not only do not raise any question whether the person on whom the service was made was a proper person for the purpose, but import that he was.

The plaintiff had testified that “ either Bowers (the president of the City a Fire Insurance Company which had also insured the same property,) or Chapman (the defendants’ agent) asked for the proofs of loss, and I went and got them, and handed them to them, and they examined the proofs; * * two or three days afterward we had a conversation, and I then

p. 62
asked if there was any thing further that I could do ; any further proofs that I could show in the case; any thing further they wanted of me; they said there was not; if so they would let me know; ” * *

The defendants, by their authorized agent, Elisha Peck, subsequently offered to settle and compromise the claim; but no complaint or intimation of the insufficiency of the preliminary proofs was1 at any time suggested.

On such a state of facts, the rule stated in Bodle v. The Chenango Mut. Ins. Co., (2.Comst, 57, 58,) should be applied, and the defect be held to he waived.

The only other question of substance relates to the effect of the giving of the chattel mortgage.

The policy declares that “in case of any transfer or termination of the interest of the insured in the property, by sale or otherwise, * ® the policy shall be void.”

The fourth condition declares that “in case of any sale, alienation, transfer or change of title in the property insured, * * or of any individual interest therein, such insurance

shall be void. And 'the entry of the foreclosure of a mortgage, or the levy of an execution, or an assignment for the benefit of creditors, shall be deemed an alienation of the property.”

The giving of the mortgage would not avoid the insurance, as being an “alienation, sale or transfer of title,” within the meaning of the policy. The mortgagee did not take actual possession, and had no right to do so until the plaintiff made default in payment of the moneys secured thereby. (Conover v. The Mutual Ins. Co. of Albany, 1 Comst. 290. Rice v. Tower, 1 Gray, 426 .)

Does the giving of the mortgage work a “ change of title,” within the meaning of the policy ? If it does, then if the goods were mortgaged when insured, payment of the mortgage before the loss, would also work “a change ef title.” Such a construction makes the words equivalent to alteration in, or modification of, the nature of the title.

I think the words “ change of title,” as used in this policy, should be construed to mean some act which divests it abso

p. 63
lutely, and thus permit the words, “ the entry of the foreclosure of a mortgage,” to have a natural, and not a forced application. ■

Construing the whole as permitting the insured to mortgage, where he retains possession and has the right of possession, without avoiding-the policy, then the same effect is given to an entry to foreclose the mortgage, as to the levy of an execution, either of which the parties agree shall be deemed an alienation.

Any other construction would restrict the application of the words, “ the entry of the foreclosure of a mortgage,” to goods mortgaged when the policy was issued, and would defeat the policy by reason of the mere fact of paying the mortgage prior to a loss.

For whatever change of title is effected by the mere execution of a mortgage, a corresponding change is produced by satisfying it.

Orrell v. Hampden Fire Ins. Co. ( 13 Gray, 431 ,) is not an authority to the point, that a mortgage is a change of title, within the meaning of a policy written like the present. The concluding part of the opinion is, that to constitute a breach of the condition of insurance, “ there must have been an actual sale or transfer of property, valid as between the parties.” All else that is said is qualified by the word C( perhaps,” and does not touch a point in judgment.

In Abbott v. Hampden Mut. Ins. Co. ( 30 Maine Rep. 414 ,) one article of the defendants’ by-laws was, that the policy should be void if the assured should sell or alienate the property, in whole or in part, without consent of the company. The conveyances in that case were held to be an alienation in part. This case, therefore, has not much application to the case before us.

In Edmands v. Mut. Safety Fire Ins. Co. ( 1 Allen, 311 ,) the by-laws provide that “ all alienations and alterations in the ownership, situation or state of the property insured by this company, in any material particular, shall make void any policy covering such property.” A subsequent mortgage of the property was said to be <£an alteration in the oionership.

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* * It introduces a new owner, to the extent of the sum secured by the mortgage, and to the same extent it takes away the direct interest of the assured.” That' case may be conceded to be correctly decided, upon the particular facts of the case, and yet not be an authority in support of the proposition that a mortgage, though not due, and not giving the mortgagee a right to the possession of the property, works “ a change of title/’ within the meaning of the policy, in the case at bar. In neither of the three cases last cited, does there appear to be any clause in -the by-laws to the effect that “ the entry of the foreclosure of a mortgage ” shall be deemed an alienation.

Within the good sense and spirit of the terms of the body of the policy, and of the fourth condition, the words, “ any sale, alienation ox'transfer” should be construed as applying to acts which terminate the interest of the assured. By the body of the policy, property “sold, but not delivered,” is insured. This shows that “sale” means an executed contract of sale, which has transferred the title. Applying the maxim noseitur a sociis to the words “ change of title,” and keeping in mind the further provision, that “ the entry of the foreclosure of a mortgage” shall be deemed an alienation, the conclusion is reasonable, and I think clear, that the change of title -here meant, is a termination of it, and that the giving of the mortgage no more worked a change of title, within the meaning of the policy, than it did a transfer or alienation. That it is not an alienation, within the meaning of the policy, is settled.

If these views are correct, the further questions involved in the other exceptions taken need not be considered, and the judgment should be affirmed.

Ordered accordingly.

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