Court Opinion

ID: 5455123
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:16:20.174114+00
Date Added: 2024-06-11T08:32:36.418369
License: Public Domain

Davies, Ch. J.
[After stating the facts.]—On January 9, 1863, when Brown, the plaintiff's assignor, reinsured with the defendants, in the sum. of one thousand dollars, his interest in the property covered by the policy, it was, in fact, an insurance for his benefit. As between him and Sturtevant, Sons & Co., he remained and continued the owner of the property covered by the insurance. The arrangement between Brown and that firm seems to have been well understood by Chapin, the defendants’ agent. If Brown continued the owner of the property, notwithstanding the executory contract of sale of November, 1860 (and as between him and the firm, he certainly did) then the insurance was, in fact, upon his property, though, in form, upon the property of Sturtevant, Sons & Co. Burt v. Dutcher, 34 N. Y. 493. We said, in the case of Bidwell v. Northwestern Ins. Co., 24 Id. 302: “ Indeed, it is not easy to perceive why an insurance company, by reason of the formal words or clauses (of a general and comprehensive nature) inserted in a policy, intended to reach broad classes of contingencies,' should ever be allowed to avoid liability on the ground that facts, of which the company had full knowledge at the time of issuing the policy, were then not in accordance with the formal words of the contract, or some of its multifarious conditions. If such facts are to be held a breach of such a clause, they are a breach eo instant! of the making of the contract, and are so known to _ be, by the company, as well as the insured. And to allow the company to take the premium without taking the risk, would be to encourage a fraud.” We also held, in that case, that parol *350evidence was admissible to show that the property insured was the owner’s equity of redemption in the . vessel, which was subject to certain mortgages known to the insurer.
This is precisely what was shown upon the trial of this action. Sturtevant, Sons & Co.' allowed the policy to expire,. so far as it related to any interest they might have, in it. It was then renewed by Brown, to cover his interest, and to the extent of his interest, and he, by his agent, paid to the defendants’ agent the premium demanded; and to allow these defendants to take a premium for a known and intended risk, without assuming it, and holding them answerable for their contract, would be. to encourage a fraud. Brown had an interest in the property covered by the policy, either as owner or mortgagee, to the extent of one thousand dollars. It was an insurable interest. The defendants assumed the risk of the preservation of the property for the period within which the claim of Brown was to be extinguished, and, in case of its destruction, to pay to him the sum agreed upon. That property was destroyed, without any fault or fraud on his part. He did nothing, after the issuing of the policy to him, and prior to its destruction", to change, in any particular whatever, his relations to that’ property. He made no transfer of it, or of his interest in it. He' effected no other insurance upon it; and the fact of the mortgage to Tallman by Sturtevant, Sons & Co., of their interest in the property covered by this policy, was notified to the defendants’ agent, and duly acknowledged. The subsequent foreclosure by Tallman of the mortgage and the sale, thereby vesting in him absolutely all the right, title and interest of Sturtevant, Sons & Co., without the knowledge, consent, or assent of Brown, cannot, in any way, impair or affect the rights of the latter, under his contract of insurance with the defendants.
The judge at the trial, therefore, properly refused to non-suit the plaintiff.
[Remarks on immaterial exceptions are omitted.]
The order of the general term, granting a new trial, should be reversed, and judgment on the verdict should be affirmed, with costs.
*351A majority of the judges concurred.
Order granting new trial reversed, and judgment on verdict affirmed, with costs.