Case Name: William T. Walton and Eliza D. Walton, Respondents, v. Agricultural Insurance Company, Appellants
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1889-10-22
Citations: 116 N.Y. 317
Docket Number: 
Parties: William T. Walton and Eliza D. Walton, Respondents, v. Agricultural Insurance Company, Appellants.
Judges: 
Reporter: New York Reports
Volume: 116
Pages: 317–329

Head Matter:
William T. Walton and Eliza D. Walton, Respondents, v. Agricultural Insurance Company, Appellants.
(Argued June 5, 1889;
decided October 22, 1889.)
Defendant, a Are insurance company, issued a policy to W. and his wife upon a barn, etc., the title to which was in W. It contained a clause that if the property insured should be sold or conveyed, or the interest of the parties changed in any manner, the policy should be null and void until the written consent of the company at the home office is obtained. Subsequently W. conveyed said property to a third person, who on the same day conveyed it to W.’s wife. No notice of these transfers was given to defendant, nor was its written consent obtained. Held, that the transfer rendered the policy void.
In an action by W. and his wife upon the policy oral evidence on the part of plaintiffs was received, under objection, tending to show that W., on application for the insurance, informed defendant’s solicitor of his intention to convey the property to his wife, and requested that the policy be so drawn as to coyer his interest before conveyance, and that of his wife afterwards, and was informed by him that .this could be accomplished by issuing the policy to himself and wife. Held, error; that as the action was not to reform the contract but to enforce it, and as the act which vitiated it had not been performed when it was issued, such evidence was incompetent to show a waiver of its condition, and thus estop defendant from interposing as a defense a breach thereof; that it was an attempt to vary or contradict by parol evidence one of the express provisions of the policy, and was, therefore, inadmissible.
Van Schoickr. Niagm'a Insurance Company (68 N. Y. 434); Woodruff v. Imperial N. Insurance Company (83 id. 135); Short v. Nome Insurance Company (90 id. 16) distinguished.
Appeal from judgment of the General Term of the Supreme Court in the second judicial department, entered upon an order made the second Monday of February, 1886, which affirmed a judgment in favor of plaintiffs, entered upon a verdict, and affirmed an order denying a motion for a new trial.
This action was brought upon a policy of insurance issued by the defendant, to recover the sum of $500 for loss sustained by the burning of a barn, a quantity of hay and grain and two horses, covered by the policy.
Said policy contained the following condition: “ If the said property be sold or conveyed, or if the interest of the parties. therein be changed in any manner, whether by the act of the parties or by operation of law, * * * then, and in every such case and. in either of said events, this policy shall be null and void, until the written consent of the company at the home office is obtained.”
At the time of the application for, and issuance of the policy, William T. Walton was the owner of the premises insured. About five months thereafter he conveyed said property to a third person, who, on the same day, duly conveyed the same to Eliza D. Walton, the wife of William. ¡Notice of these transfers was never given to the defendant, neither was the written consent of the company at the home -office obtained. William T. Walton, against the objection of the defendant, testified that he told the agent, at the time the application for insurance was made, that as soon as he had finished repairing the buildings he should convey the property to his wife, and that he wanted a policy so made out as to cover his interest now and the interest of his wife after conveyance made. That the agent replied that he could accomplish that result by making the policy out to William T. Walton and wife. It was thereupon arranged that such a policy should be applied for, and he signed an application to the company. 'The evidence was duly objected to by the defendant and an exception taken to its admission. ÜSTorthrup, the agent, contradicted Walton’s testimony in such respect. But that question was determined in favor of the plaintiffs in a special finding made by the jury.
The agent or solicitor who made out the application was not a general agent, and did not have authority to issue policies. His duty was to make out applications for insurance .and forward them to the home office of the company where they were passed upon. If rejected, the matter was at an end; if accepted, a policy of insurance was made out and forwarded to the agent for delivery on receipt of premium. Respecting the extent and limitation of the authority of the .agent to represent the defendant, the policy in question pro-vided as follows : “Agents of the company are permitted to .give the consent of the company to assignment of policies-But no agent of the company is permitted to give consent of the company in any other cases required by the provisions of this policy, or to waive any stipulation or condition contained herein ; but in all cases where the consent of the company is required by this policy, other than consent to the assignment of the policy, such consent must be obtained at the home office of the company.”
The trial court charged the jury, as a matter of law, that the conveyance from husband to wife through a third person did not vitiate the policy, and that the plaintiffs were entitled to recover. Defendant excepted.
A. H. Sawyer for appellant.
There was no proof in the •case that any notice of loss was ever given to the defendant as required by the terms of the policy. Plaintiffs must both allege and prove the giving of such notice. (Inman v. Western Ins. Co., 12 Wend. 452; McEvers v. Lawrence, 1 Hoff. Ch. 172; Sherwood v. A. Ins. Co., 10 Hun, 593; Brown v. L. A. Corp., 4 id. 101; Whitehurst v. N. C. Ins. Co., 7 Jones, 433 ; 4 Bennett’s F. Ins. Cas. 331, 482; 5 id. 564; Edwards v. L. Ins. Co., 75 Penn. St. 378; Trask v. S. Ins. Co., 29 id. 198.) The plaintiffs had not, at the commencement of the action, and never had any joint interest in the property destroyed. Hence there can be no recovery in this action by the parties jointly. •(Howard v. A. Ins. Co., 3 Denio, 301; Murdock v. C. C. M. Ins. Co., 2 Comst. 210; Fowler v. N. Y. I. I. Co., 26 N. Y. 422; A. Ins. Co. v. Montague, 38 Mich. 548; 31 Am. Rep. 326; Code Civ. Pro. §§ 449,450; Christman v. S. Ins. Co., 18 Pac. Rep. 466, 469; Zimmerman v. F. Ins. Co., 41 N. W. Rep. 39.) The transfers were clearly within the prohibition of the policy, .and being without the consent of the company, rendered the policy void. (Oaks v. M. Ins. Co., 131 Mass. 164; Baldwin v. H. F. Ins. Co., 12 Rep. 116; Savage v. H. Ins. Co., 52 N. Y. 504; Tatham v. C. Ins. GC., 4 Hun, 136 ; Germond v. H. Ins. Co., 2 id. 540; Perry v. L. Ins. Co., 6 Lans. 201; 61 N. Y. 214; Sherwood v. A. Ins. Co., 73 id. 447; Foote v. H. Ins. Co., 119 Mass. 259 ; F. Ins. Co. v. Archer, 36 Ohio St. 608; 10 Ins. L. J. 370; Baldwin, v. P. Ins. Co., 60 N. H. 164; Langdon v. M. F. Ins. Assn., 22 Minn. 193.) The evidence tending to show that ETorthrup, the solicitor of the defendant, was informed that the plaintiff, ■ William T. Walton, owned the property, but intended at some future time to convey the same to his wife, Eliza D. Walton, should have been excluded. ( Wilson v. G. M. Ins. Co., 14 N. Y. 418; Alexander v. G. F. Ins. Co., 66 id. 467; Merserau v. P. M. L. Ins. Co., 66 id. 274; McCloskey v. P. W. Ins. Co., 126 Mass. 306; A. Ins. Co. v. Montague, 38 Mich. 548; 31 Am. Rep. 326.) The agent had no power to waive the conditions of the policy. (Walsh v. H. F. Ins. Co., 73 N. Y. 5 ; Marvin v. U. L. Ins. Co., 85 id. 278, 282; W. Ins. Co. v. Rector, 3 S. W. Rep. 415; F. D. L., etc., Works v. M. and M. Ins. Co., 34 N. W. Rep. 35, 37; Havens v. Home Ins. Co., 12 N. E. Rep. 137; 111 Ind. 90; Forbes v. A. M. F. Ins. Co., 9 Cush. 470; McNierny v. A. Ins. Co., 48 Hun, 239, 243.) The trial judge erred in charging “ that a policy to a husband and wife is not void because the husband alone had the fee, and that an assignment of that policy from the husband to the wife, the wife taking the fee in place of the husband, does not destroy the policy.” (Oakes v. M. Ins. Co., 131 Mass. 164; Baldwin v. H. F. Ins. Co., 12 Rep. 116; A. Ins. Co. v. Montague, 38 Mich. 548; 31 Am. Rep. 326 Baldwin v. P. Ins. Co., 60 N. H. 164; Langdon v. M. F. Ins. Assn., 22 Minn. 193.) The refusal of the trial court to charge the jury that there can be no recovery for horses under the policy, as the animals destroyed were not in the barn insured by the policy, was error. (L. Ins. Co. v. Updegraff 40 Penn. St. 311; P., etc., R. R. Co. v. Y. Ins. Co., 10 R. I. 74; Severance v. Con. Ins. Co., 5 Biss. 156; Hews v. Atlas Ins. Co., 126 Mass. 389; A., etc. R. R. Co. v. B. Ins. Co., 32 Md. 37; E. S. F. v. C. Ins. Co., 1 Cliff. 300; Bryce v. L. Ins. Co., 55 N. Y. 240, 244.) Words and phrases, not. technical in their character, used in policies of insurance are to be construed according to their ordinary acceptance. (Springfield F. and M. Ins. Co. v. Allen, 43 N. Y. 394; Groat v. Gile, 51 id. 431; Glancius v. Black, 67 id. 563; Blossom v. L. Ins. Co., 64 id. 162.)
W. W. Westervelt for respondent.
The application for insurance was special. (Richmond v. N. Ins. Co., 79 N. Y. 230.) The application was acted upon by appellant and the policy issued in conformity therewith. (Benninghoff v. A. Ins. Co., 93 N. Y. 495.) The transfer of title from William T. Walton through a third party to his wife before loss occurred is not such a transfer as would void the policy. (Wolfe v. S. F. Ins Co., 39 N. Y. 49; Benninghoff v. A. Ins. Co., 93 id. 495.) If either plaintiff is entitled to judgment a nonsuit cannot be granted. (Code of Civ. Pro. §§ 448, 498, 499, 1204.)

Opinion:
Parker, J.
The contract of insurance upon which the plaintiffs base their right to recover in this action, provided that if the property insured be sold or conveyed, or if the interest of the parties be changed in any manner, the policy shall be null and void, until the written consent of the company at the home office shall be obtained.
Subsequent to the issuance of the policy the property was conveyed by Walton, through a third person, to his wife without the written consent of the company. Thus, by the terms of the contract, the policy of insurance became of no effect. Upon the trial the plaintiffs sought to relieve themselves from the effect of the violated condition by the introduction of oral evidence tending to show that Walton informed the defendant's solicitor of his intention to convey to his wife after a few months, and requested that the policy be so drawn as to cover his interest before conveyance and that of Ms wife afterwards, and that the,solicitor informed him that he could accomplish that result by issuing the policy to William T. Walton and wife. The evidence upon that subject was seasonably objected to by the defendant, but was received by the court, and the jury, in a special finding, found-the fact to be as contended for by the plaintiffs.
The question presented, therefore, is, can the plaintiffs be permitted to show, in contradiction of the express terms of the contract, that it was orally agreed before its making and delivery that they should be permitted thereafter to do an act which the contract forbids ?
This is not an action brought to so reform a contract as that it shall be made to voice the agreement which the parties intended to make. On the contrary, it is based on the policy as it was written, and cannot be maintained by evidence that the contract was intended to be a different one. For a policy of insurance is presumed to embrace the entire agreement of the parties. The precedent oral agreement cannot be regarded as a part of the policy or in any wise effective as a contract. Like other written contracts the oral agreement, preceding its execution and delivery, is presumed to have become merged in it, and its terms cannot be controlled or varied by parol evidence. (Pindar v. Resolute Fire Ins. Co., 47 N. Y. 114; Ripley v. Ætna Ins. Co., 30 id. 136; Alston v. Mechanics' Mutual Ins. Co., 4 Hill, 329.)
The cases of Van Schoick v. Niagara Insurance Company (68 N. Y. 434); Woodruff v. Imperial Insurance Company (83 id. 135) and Short v. Home Insurance Company (90 id. 16), are not in conflict with this rule. True, oral evidence was received in each. of those cases. It was not received, however, for the purpose of contra^ dieting the written agreement, or to show that the parties made a different contract than the one expressed, but to demonstrate that the insurer, at the time of the issuance of the policy, had knowledge of the facts, the existence of which were asserted upon the trial, to constitute a breach of warranty. Hpon such proof was predicated an estoppel against the insurer. It was held, in effect, that if the insurer receive pay for a policy of insurance, knowing it to be invalid when issued, he shall be deemed to be estopped from insisting upon its invalidity. The object of this rule is to prevent fraud and to render it impracticable for insurers to attempt the acquisition of premiums upon policies known to be invalid when issued. The principle of those cases cannot be applied here. The act which the contract declares shall vitiate the policy had not been performed when the policy was issued. It was not an existing fact The policy was, therefore, valid at the time of its issuance, and so remained until the property was conveyed without the consent of the defendant. Certainly, the facts here disclosed fail to suggest a fraud which will estop the defendant from interposing as a defense the warranty against a conveyance of the property. As the defendant is not estopped and the action is brought upon the contract as it was written, it follows 'that the admission of parol testimony to vary or contradict one of its provisions was error.
The judgment should be reversed and a new trial granted, costs to abide the event.