Case Name: SALOMON v. NORTH BRITISH & MERCANTILE INS. CO. OF NEW YORK
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1912-05-31
Citations: 135 N.Y.S. 806
Docket Number: 
Parties: SALOMON v. NORTH BRITISH & MERCANTILE INS. CO. OF NEW YORK.
Judges: 
Reporter: West's New York Supplement
Volume: 135
Pages: 806–810

Head Matter:
SALOMON v. NORTH BRITISH & MERCANTILE INS. CO. OF NEW YORK.
(Supreme Court, Appellate Division, First Department.
May 31, 1912.)
1. Insurance (§§ 533, 622*)—Fibe Insurance—Liability of Insurer to
Mortgagee.
The liability of an insurance company to a mortgagee, entitled to payment of a loss as his interest may appear, is different from the liability to the owner, and the provisions of the policy as to presentation of proof of loss and as to the short statute of limitations do not apply to a mortgagee.
[Ed. Note.—For other cases, see Insurance, Cent. Dig. §§ 1320, 1544-1556; Dec. Dig. §§ 533, 622.*]
2. Insurance (§ 143*)—Reformation of Policy—Mutual Mistake—Evi-
dence.
A fire policy made a loss payable to the mortgagee as his interest might appear. An assignee of the bond and mortgage delivered the policy to his broker with instructions to have a memorandum made on it to the effect that the loss, if any, was payable to him as mortgagee. The policy was sent to insurer with, a request that an indorsement be made on it to the effect that the assignee had become the owner of the property and that the loss, if any, should be payable as before. Such an indorsement . was made, and the policy was returned to the assignee, who retained it without objection until after a loss. Held that, since the insurer by this indorsement intended to continue the insurance for the benefit of the mortgagee, but by an erroneous indorsement it left the policy payable to the former mortgagee instead of to the assignee, the policy must be reformed so as to make it payable to the assignee as mortgagee to the extent of his interest.
[Ed. Note.—For other eases, see Insurance, Cent. Dig. §§ 265-272; Dec. Dig. § 143.*]
3. Reformation of Instruments (§ 19*)—Mutual Mistake—Evidence.
The court may reform an instrument on the ground of mutual mistake, though the mistake on the part of each party is not with respect to precisely the same facts.
[Ed. Note.—For other cases, see Reformation of Instruments, Cent. Dig. §§ 74-78;' Dec. Dig. § 19.*]
Ingraham, P. J., and McLaughlin, J., dissenting.
‘•For other cases see same topic & § number in Dec. & Am. Digs. 1907 to date, & Rep’r Indexes
Appeal from Special Term, New York County.
Action by Morris Salomon against the North British & Mercantile Insurance Company of New York. From a judgment dismissing the complaint on the merits, plaintiff appeals. Reversed, and new trial granted.
See, also, 142 App. Div. 940, 127 N. Y. Supp. 1143.
Argued before INGRAHAM, P. J., and McLAUGHLIN, LAUGHLIN, MILLER, and DOWLING, JJ.
Jacob R. Schiff, of New York City, for appellant.
Leo Levy, of New York City, for respondent.

Opinion:
LAUGHLIN, J.
The material facts are stated in the first point discussed in the opinion of Mr. Justice McLAUGHLIN; but I am unable to agree with his view of the evidence with respect to the_ assignment of the plaintiff's interest to Greenberger, and the reassignment thereof to the plaintiff, for no issue'•with respect thereto was presented by the pleadings, and the point was not taken upon the trial, and the assignment and reassignment are not printed in full in the record, doubtless for that reason, and therefore it must be assumed that the plaintiff assigned, not merely the bond and mortgage and his interest in the insurance policy, but his cause of action to have it reformed, for it so appears by his testimony, and also that the assignment was made merely for the purpose of bringing the action, and for the same reason it must be presumed that the reassignment was of the entire cause of action. On the other point, which was the only question litigated, I am of opinion that the plaintiff is entitled to have the policy reformed and to recover thereon.
It must now be conceded that the liability of an insurance company to a mortgagee is quite different from its liability to the owner, and that the provisions of the policy with respect to presentation of proof of loss, and with respect to the short statute of limitations, do not apply to the mortgagee. Heilbrunn v. German Alliance Insurance Co., 140 App. Div. 557, 125 N. Y. Supp. 374, affirmed 202 N. Y. 610, 95 N. E. 823.
If, therefore, the defendant did not intend to insure the mortgagee, of course the court could not reform the contract so as to make it liable to the mortgagee; but in the case at bar, it clearly appears that, before the bond and mortgage were assigned to the plaintiff, the defendant had insured the interest of his assignors, the mortgagees, and it clearly appears by the indorsement, which the defendant made upon the policy when the same was forwarded by the plaintiff, after he obtained the assignment of the bond and mortgage, with a view to having his interest insured, erroneously described by his agents as owner, that the defendant, while changing the name of the owner, still continued the .policy payable, as before, to the mortgagee. It is perfectly plain that the defendant, by this indorsement, intended to continue the insurance for the benefit of the mortgagee; but by the erroneous indorsement which it made upon the policy, it left the policy payable to the former mortgagees, the plaintiff's assignors. It thus appears that the plaintiff intended to have his interest as mortgagee insured, and the defendant intended to continue to insure the interest which had been assigned to the plaintiff. The fact, that the defendant was not informed of the. assignment of the bond and mortgage does not, I think, preclude • the plaintiff from having the policy treformed. His failure to inform the insurance company that he had become the assignee of. the bond and mortgage, instead of the grantee of the premises, was through the inadvertence of his agents, but did not affect the risk or the rights of the defendant. It may be conceded that the defendant was led to believe that he was the owner, but it was not prejudiced by that fact, for the real owner, whose name was on defendant's records as the owner before it made this change, duly presented proofs of loss within the time required by the contract.
The uncontroverted evidence therefore shows that there was a mutual mistake, and it is not essential, I think, to the right to the reformation of an instrument, that the mistake on the part of each party shall be with respect to precisely the same facts. The essential fact was that the plaintiff intended to have his interest as mortgagee, under this bond and mortgage, and the defendant intended to continue the insurance in favor of the mortgagee, but was erroneously informed that plaintiff had succeeded to the ownership of the legal title instead of the mortgaged interest.
For these reasons, I am of opinion that the judgment should be reversed, and a new trial granted, with costs to appellant to abide the event.
MILLER and DOWLING, JJ., concur.