Case Name: GUSTAVE BRUECK, Respondent, v. THE PHŒNIX INSURANCE COMPANY, Appellant
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1880-06
Citations: 28 N.Y. Sup. Ct. 542
Docket Number: 
Parties: GUSTAVE BRUECK, Respondent, v. THE PHŒNIX INSURANCE COMPANY, Appellant.
Judges: 
Reporter: Supreme Court Reports (Hun)
Volume: 28
Pages: 542–550

Head Matter:
GUSTAVE BRUECK, Respondent, v. THE PHŒNIX INSURANCE COMPANY, Appellant.
Policy of insurance against fire — when a renewal thereof is avoided hy an increase in the risk, though the assured had no knowledge thereof.
A policy of insurance issued by the defendant provided that “this insurance (the risk not being changed) may be continued for such further time as shall be agreed on, provided the premium therefor is paid and indorsed on this policy, or a receipt given for the same, and it shall be considered as continued under the original representations, and for the original amounts and divisions, unless otherwise specified in writing: but in case there shall have been any change in the risk, either within itself or by neighboring buildings, not made known lo the company by the assured, at the time of renewal, this policy and renewal shall be void.”
In an action to recover for a loss occurring after a renewal of the policy,— Seld, that if there had been any change in the risk, increasing the hazard, after the first insurance and before the renewal was delivered, whether known or not known to the plaintiff, and it was not made known to the defendant at the time of the 'renewal, the policy and the renewal thereof was void, and no recovery could be had thereon. (Brady, J., dissenting.)
Appeal from a judgment in favor of the plaintiff, entered upon the verdict of a jury, and from an order denying a motion for a new trial made upon the minutes of the justice before whom the action was tried.
This action was brought to recover the damages caused by a fire which destroyed certain stock and materials which were claimed by the plaintiff to have been insured, at the time of - the- fire, by the defendant. The fire occurred at Nos. 315 to 321 East Twenty-second street, in New York city, on April 18, 1877, in a large five-story building, in the • third story of which the plaintiff manufactured fans. On April 7, 1876, the defendant issued its policy of insurance to one A. Hoegg, against loss or damage by fire to the amount of $1,500, on the stock and materials used in the manufacturing of fang on said premises, for the period of one year from that date. On January 10, 1877, the interest of the said Hoegg was, with the consent of the defendant, assigned to the plaintiff.
Herbert 0. Plass, a man who had for years been an insurance broker in the city of New York, acted as the agent of the insured in procuring this policy, and as the plaintiff’s agent in obtaining the defendant’s consent to the said’ assignment, and afterwards in obtaining a certificate of the renewal of the policy.
At about the time the policy was issued, the defendant caused the premises (where the insured property was kept) to be surveyed by Mr. Mayer. A few days after the delivery of the certificate of renewal, the defendant had the premises re-surveyed by Mayer, who found, and reported to the defendant, that the risk had been changed since the policy was issued, and before the renewal was applied for.
In consequence of this change of risk, the defendant sent for Mr. Plass, and three days thereafter, on April 16,1877 (two days before the fire), Mr. Plass called upon the company. The defendant required a greater premium to continue the insurance, but Mr. Plass declined to give it. The defendant then demanded the renewal certificate to be returned, and it was claimed by it on the trial that Mr. Plass promised to do so, and agreed, that the policy should be considered canceled.
The defendant had no notice of the change in the risk, when the renewal receipt was given.
B. G. M. Ingraham, for the appellant.
B. F Watson, for the respondent.

Opinion:
Barrett, J.:
I am unable to concur in the second point discussed by niy brother Brady. In my judgment the refusal to charge as requested by the defendant's counsel:
" That if there was any change in the risk, increasing the hazard after the first insurance and before the renewal was delivered, whether known or not known to the plaintiff, and it was not made known to the defendant at the time of the renewal, then this policy is 'fluid, and the plaintiff cannot recover upon it," was error. It was provided in the policy as follows:
" This insurance (the risk not being changed) may be continued for such further time as shall be agreed on, provided the premium therefor is paid and indorsed on this policy, or a receipt given for the same, and it shall be considered as continued under the original representation, and for the original amounts and divisions, unless otherwise specified in writing; 'but in case there shall home been am/y change in the risk, either within itself or by neigliborvng buildings, not made known to the compa/ny. by the assured, at the tíme of renewal, this policy and renewal shall be void."
This language is unambiguous — " any change in the risk " not " any change in the risk known to the insured." The change referred to is, of course, such as increased the risk. (Parker v. Arctic Fire Ins. Co., 59 N. Y., 1.) But of such a change, the plaintiff under his contract could not plead ignorance. The provision cited would become practically valueless, if the insured could escape its force and effect by shutting his eyes to his own affairs, neglecting his business or other inactivity. Nor were the defendants bound to prove a scienter. If they established to the satisfaction of the jury such a change as increased the risk, the renewal fell. As was said in Parker v. Arctic Fire Ins. Co., supra, "if notice was not gimen, the assured would lose the benefit of the contract, if it turned out that the risk was increased thereby." This is in accordance with the spirit as well as the letter of the contract. The parties fully understood their respective rights under the original policy. The renewal was predicated upon an unaltered status. The provision requiring the insured, as a prerequisite to a valid renewal, to make known to the company any change in the risk, was for the express purpose of throwing upon him the burden of knowledge. He was bound to inform himself upon the subject before applying for a renewal. This was not unreasonable, considering his facilities for information as to his own property and business. What was important to the company was the faet as to a change. This provision was intended to obviate any necessity for inquiry upon its part, every time the policy was renewed, and to compel the insured to speak if there was anything of importance to be said. Under this, the company was not bound to make any investigation or inquiry as to a change in the risk. It was entirely justified in resting upon the contract and assuming, in the absence of notice; that the condition of things contemplated by the policy remained unchanged.
Nor am I entirely prepared to concur in the view taken of the insurance broker's authority. It seems difficult to distinguish the case on this head from Standard Oil Co. v. Triumph Ins. Co. (64 N. Y., 85). The same doubts apply to the exclusion of the evidence offered as to custom. But without passing definitively upon these latter questions, I think there should be a new trial because of the refusal to charge as requested with respect to the change in the risk.
Davis, P* J.:
The application for the renewal, without notice of any change in the risk, taken in connection with the language of the policy, was, in my judgment, in legal effect a warranty on the part of the assured that no change, substantially increasing the risk, had taken place. It would make no difference in the effect of such warranty that a material change, increasing the risk, was in fact unknown to the assured. He undertakes that it does not exist, and not that he is ignorant of its existence, and he must be bound by his contract. Por this reason, as well as for the views suggested by my brother Barrett, I fully concur with him that a new trial must be granted on the exception to the refusal of- the court to charge on this subject, as requested by defendant.