Case Name: George C. Carpenter et al., Resp'ts, v. The German-American Insurance Co., App'lt
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1892-10-04
Citations: 47 N.Y. St. Rep. 862
Docket Number: 
Parties: George C. Carpenter et al., Resp’ts, v. The German-American Insurance Co., App’lt.
Judges: 
Reporter: New York State Reporter
Volume: 47
Pages: 862–866

Head Matter:
George C. Carpenter et al., Resp’ts, v. The German-American Insurance Co., App’lt.
(Court of Appeals,
Filed October 4, 1892.)
1. Insurance (fire)—Notice to general agent that assured- is not SOLE OWNER.
A., the sub agent of M., a general agent of defendant, before the original policy was issued, of which the policy in suit is a renewal, was sent by the latter to inspect the premises and arrange the insurance, and was then' informed by plaintifl: that the property upon which the insured building was erected was held under a contract of purchase from a New Jersey bank. Held, that this constituted notice to defendant that assured was not the sole owner.
2. Same—Proofs of loss—Delay in furnishing.
Notice of the fire was given hy plaintiff to the company on the day it occurred. Adjusters come to the premises a few days after. After some delays by adjusters and experts the principal plaintiff was called to Philadelphia several times on business. Held, that under the circumstances a delay of 115 days after the fire in serving proofs of loss was not as matter of law unreasonable.
3. Same—Waiver.
The insistence of the company upon the right to examine plaintiffs-under oath as to the loss, and their subsequent examination by the defendant, was a waiver of any objection founded on the delay in serving proof of loss.
4. Same—Title of assured—Estoppel.
Plaintiff had a contract of sale for the property insured with the State-Bank of Elizabeth, N. J., which was only the beneficial owner, the title being held by its president in his own name, who knew of the sale to plaintiff by the bank, and consented thereto, having forgotten that he held, the title. Held, that the principle of equitable estoppel applied against the president, and plaintiff had an insurable interest in the property.
Appeal from judgment of the supreme court, fifth department, affirming judgment for plaintiff.
Martin W. Cooke, for app’lt; George Wadsworth, for resp’ts.
Affirming 40 St. Rep., 988.

Opinion:
Andrews, J.
—It must be assumed, in disposing of this appeal, that Andrews, the sub-agent of Mandeville, before the original policy was issued, of which the policy upon which this action is brought is a renewal, was sent by Mandeville to inspect the premises and arrange the insurance, and that he was then informed by the plaintiff that the property upon which the insured building was erected was held under a contract of purchase from the State Bank of Elizabeth, New Jersey. If this constituted notice to the defendant then, within our decisions, the policy was not avoided by the printed condition that if the assured is not the " sole, absolute and unconditional owner of the property insured, or if said property be a building and the insured be not the owner of the land on which said building stands, by title in fee simple, and this fact is not expressed in the written portion of the policy, this policy shall be void." Van Schoick v. The Niagara Fire Ins. Co., 68 N. Y., 434.
It appears that Mandeville was a general agent of the defendant, clothed with power- to make contracts of insurance and to issue policies, and was furnished with printed forms, which he filled up as occasion required. He was agent for several other companies also, which presumably upon the evidence was known to the defendant. Andrews had been employed by him for several years before the policy in question was issued, to solicit insurance, acting as Mandeville's clerk and employee. It has been the common custom and practice of agents of insurance companies, having the power of general agents, to employ subordinates to render services similar to those rendered by Andrews, and we have held that notice to such a sub-agent while engaged in soliciting insurance of any fact material to the risk, and which affects, the contract of-insurance, is notice to the company and binds the company to the same extent as though it had been given directly to the agent himself. Arff v. Star Ins. Co., 125 N. Y., 57; 34 St. Rep., 366; Bodine v. Exchange Ins. Co., 51 N. Y., 123.
The point, therefore, based on the condition as to the ownership of the insured property must be overruled.
Another question relates to the delay in serving proofs of loss. The fire occurred October 10, 1883. The proofs of loss were not received by the company until February 2, 1884, 115 days after the fire. The policy provides that in case of loss " the assured shall give immediate notice thereof and shall render to the company a particular account of said loss under oath," embracing certain facts specified. Under this clause it became the duty of the plaintiffs to furnish proofs of loss within a reasonable time. What is such reasonable time may become a question of law, as where there has been a long delay, unexcused, and the company has not waived a compliance with the requirement of the policy. But in cases where circumstances are shown which reasonably justify the delay, or the insured acted with reasonable promptness in view of all the facts disclosed, having regard both to his own situation and the protection of the company, it may be a question for the jury whether the provision as to proofs has been violated. So, also, it is competent for the company, either before or after the alleged delay, to waive an insistence upon this clause, and such waiver may be express or it may be implied from conduct inconsistent with an intention to rely upon this defense.
In this case it appears that notice of the fire was given by the plaintiff to the company on the same day on which it occurred. Adjusters of companies represented by ."Mandeville came to the premises a few days afterwards and examined into the circumstances. The plaintiffs, according to their evidence, proceeded to secure a millwright and another expert to make estimate of the value of the machinery and property burned or injured. When this had been accomplished, after considerable delay, the matter of preparing the formal proofs was put in charge of an insurance man, who delayed the preparation for about a month. The principal plaintiff, after the fire and before the proofs were forwarded, was called to Philadelphia several times on important business connected with the delivery of cattle under contracts made by him before the fire, and was unable to give personal attention to the preparation and foiwarding of the proofs.
Under the circumstances, we are not prepared to say that it could be ruled as a question of law that the delay in furnishing the proofs was unreasonable. The performance of the stipulation .as to proofs of loss is not made a condition of liability of the defendant by the terms of the policy, but it is a condition of recovery. The furnishing of proofs of loss promptly may, in many cases, be important to the protection of the rights of the insurer against fraud, and the company may insist upon prompt action by the assured. But when, as in this case, the matter was left open, under the obligation expressed in the policy without more, we cannot, under the circumstances disclosed, say, as matter of law, that the delay was unreasonable.
We think, also, the insistence of the company upon the right to examine the plaintiffs under oath upon matters relating to the loss, made in the letter of February 20,1884, and their subsequent examination by the defendant, was a waiver of any objection founded on the delay in serving proofs of loss. It is claimed that the demand contained in the letter was conditioned upon the assent of the plaintiffs that such examination should not be construed as a waiver by the company of the objection. The letter is at least equivocal. The plaintiffs could not safely refuse to submit to an examination, and the letter does not state that the company would dispense with the examination in case the plaintiffs did not acquiesce in the condition.
The points as to the proofs of loss, and the exception of the defendant based thereon, are not, we think, tenable.
The remaining question relates to the claim that the plaintiffs, at the time of the insurance and of the fire, had no insurable interest in the building, which was, in part, the subject of the insurance. It is doubtless true that the State Bank of Elizabeth, the vendor in the contract of sale to the plaintiffs, had no legal title to the property embraced therein. It was, however, the beneficial owner. The bank owned the mortgage and bid off the property on the foreclosure in 1877, but its agent at the sale, under advice of its attorney, directed the conveyance to be made to Mr. Kean, the president of the bank, because of the statute of Pennsylvania which prohibited any foreign corporation from acquiring and holding any real estate within the commonwealth " directly in the corporate name, or by or through any trustee or other device whatsoever, unless specially authorized to hold such property by the laws of this commonwealth." Purdon's Dig., § 56, p. 292.
Mr. Kean paid nothing for the property and acknowledged that it belonged to the bank, and never made any claim to it whatever. He knew of the negotiation between the bank and Carpenter for the sale and purchase of the property, and advised and -consented to the contract by the bank, and was fully acquainted with the fact that Carpenter was paying the purchase money of the land in reliance upon the ownership of the property by the bank. The bank, Carpenter and Kean acted in good faith, supposing that the bank held the legal title to the land. The officers of the bank had forgotten that the title had been taken in Kean's name, and for this reason the contract with Carpenter was made in the name of the corporation.
We deem it unnecessary to go into the abstruse questions which have been argued at the bar as to the legal and equitable right to the land, as between the bank and Kean, growing out of the conveyance to the latter of the legal title on the foreclosure sale. Assuming (but without deciding) that the bank could not, in view of the Pennsylvania statute, have established a trust in its favor, enforcible against Kean, or compelled him to convey the legal title to the corporation, yet it is we think very plain that as between Carpenter on the one side, and the bank and Kean on the other, Carpenter, oiiAthe performance of his contract, could have maintained a suit in equity to compel the bank and Kean to convey the land. Kean would be bound by the plainest principles of equity and justice to make the contract good, which was entered into with his advice and upon which Carpenter had advanced his money. It would be no answer that Kean did not act mala fide, but supposed that the legal title was in the bank. He stood by and encouraged the sale and knew of the payment of the purchase money by Carpenter in reliance upon the right of the bank to sell the property. Storrs v. Barker, 6 Johns. Ch., 166; Continental Nat. Bank v. Nat. Bank of Commonwealth, 50 N. Y., 576; Thompson v. Simpson, 128 id., 270; 40 St. Rep., 164. His mistake prej udiced no real right or equity in the land. He asserted none therein, and now acknowledges that the bank is entitled to the benefit of the policy.
The principle of equitable estoppel applies with persuasive force against Kean, preventing him from asserting as against Carpenter any right in the land, and a court of equity would require him to convey so that the just expectations of Carpenter should not be disappointed. Carpenter had therefore an insurable interest in the property.
The questions decided dispose of all the material points in the appeal.
The result is that the judgment should be affirmed, with costs.
All concur.