Court Opinion

ID: 5182147
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:43:35.086704+00
Date Added: 2024-06-11T08:26:36.546068
License: Public Domain

Hatch, J.:
The purpose of this action is to recover a sum secured to be paid by a policy of insurance. The defense to the claim is that liability under the policy was avoided by reason óf the . execution of a chattel mortgage by the insured upon the property covered by the policy after the same was executed. The assured, by the terms of the policy, were Melissa and William H. H. Williams, the owners of the property, and Harvey J. Sarles, an incumbrancer by chattel mortgage.
The facts are brief. The Williams applied to the plaintiff, Neafie, who was the general agent representing the insurance company in that territory, for insurance upon their property. Subsequently a policy was issued, bearing date the 1st day of November, 1894. At this time Neafie held a chattel mortgage upon the insured property bearing da*te October 24, 1894, and had also arranged to take *620another chattel mortgage at the same date upon the same property, to secure the payment of a note held by a bank. The exact amount of this note was not known at this time, and the execution of this mortgage was deferred until it could be ascertained. It was executed and delivered on the 3d day of November, 1894, after the date of the policy, but before its delivery. Neither of these mortgages were mentioned in the policy. While the plaintiff herein was the agent of the insurance company, and also the.mortgagee, yet it is not claimed that there was any collusion between the assured and the plaintiff. In fact he was protected by another policy of insurance upon the same property, and the amount of his liens have been paid from the proceeds of that policy, and the only person presently interested is the mortgagee Sarles. The plaintiff testified and the court found that on the 1st day of November, 1894, he notified the defendant of the insurance and also that he held liens upon the property subject to the liens of the defendant Sarles, by way of chattel mortgage, in over the sum of $600. The company acquiesced in the issuance of the policy and remained silent respecting the notice it had received.
The property was destroyed by fire about the 14th day of December, 1894, resulting in a total loss. On January 9, 1895, jmoofs of loss were furnished. Thereafter further proof was required, and supplementary proof furnished which disclosed the existence of the plaintiff’s mortgages, and which was received by the defendant on February 1,1895. Subsequently further proof was required and furnished, all of which proofs the defendant retained without objection.
The clause in the policy respecting forfeitures is the same as is in the New York standard policies: That “this entire policy * * * shall .be void * * * if the subject of insurance be personal property, and be or become incumbered by a chattel mortgage.” We are of opinion that the defendant cannot avail itself of this clause of the policy to defeat liability thereunder. It is to be observed that at the time when the policy was delivered all of the facts relating to the two chattel mortgages held by the plaintiff were known to the company. If, therefore, the giving of the second chattel mortgage rendered the policy void, then, at the instant' of delivery, there was a breach of condition, and while the policy said the property was insured, at *621the same time its conditions were broken and the insurance was void. Such a condition cannot exist where all the facts are known to the parties at the time of the delivery of the policy, as the court Avill not presume that the parties intended to do a vain thing. Such a breach is not a condition subsequent to the formation of the contract; it is coexistent Avith its inception. The company having, under such circumstances, chosen to deliver the policy, will be held estopped from setting up its invalidity (Van Schoick v. Niagara Fire Ins. Co., 68 N. Y. 434; Gray v. Germania Fire Ins. Co., 84 Hun, 504), or be held to have waived the forfeiture. (Berry v. A. C. Ins. Co., 132 N. Y. 49.) The waiver of the forfeiture in this case may also be predicated upon the action of the company in demanding additional proofs of loss, Avhen taken in connection AA'ith its knoAvledge of the existence of the mortgage at the time of the delivery of the policy. (Titus v. Glens Falls Ins. Co., 81 N. Y. 410 ; Weed v. I. & L. Fire Ins. Co., 116 id. 106.)
The mortgage executed to Jennie Y. S. Williams did not have the effect of creating a forfeiture. It was never delivered to the mortgagee and never had a legal inception, as the purpose for which it was executed failed. It never became a lien upon the property, and the title of the assured was not affected thereby. (Forward v. C. Ins. Co., 142 N. Y. 382.)
The defendant claims that the 9th finding of fact, which is to the effect that the defendant was notified by the plaintiff of the existence of the chattel mortgage, is without proof to sustain it. There are several answers to this claim. The plaintiff testified to this fact and gave the contents of the notice which he sent, and which had been lost. The denial of the defendant left a conflict of evidence upon this point. Besides, there is no certificate attached to the case that it contains all the evidence, and in its absence we are bound to presume that evidence was given sufficient to support the finding. In addition to this the plaintiff had knowledge of the condition, and, in the absence of fraud or collusion, his knowledge was imputable to the company, and became binding upon it. (Forward v. C. Ins. Co., supra.) The evidence was sufficient to show the loss of the letter sent by the plaintiff to the defendant, and parol proof of its contents became competent. The search was made by both parties in the place where it would naturally be, and neither were able *622to find it. The objection of the defendant thereto cannot, therefore, avail, and this is so even though the search made by the defendant did not appear until after the evidence was received. It is sufficient that it did appear and cures any error which might have existed.
Note.— The rest of the cases of this term, will be found in the next volume, 16 App. Div.— [Rep.
Prior to the trial of this action the defendant Woodcock made application to the court to have Melissa and William H. IT. Williams brought into the action and made parties defendant therein. This motion was opposed by the plaintiff, but the same was granted and the plaintiff was directed to serve upon these persons a copy of the complaint. In obedience to the order the plaintiff served a copy of the complaint; the persons so served did not appear in the action, no judgment passed against them and they are not parties to this appeal. The appealing defendant now urges that this order was erroneous and that such persons could not be brought in as parties except by the service of a summons upon them. We are unable to see how this order in any wise affects this appeal. The persons directed to be brought in had no interest whatever in the controversy. True, they were the assured, but all their rights, title and interest in and to the policy and its proceeds had become vested in the plaintiff before the commencement of the action and they were without interest therein. But, aside from this, the defendant is entirely responsible for their appearance upon the record. He was the moving party and, against the opposition of the plaintiff, obtained the order. It would be a singular rule if he could now be permitted to disturb this judgment by a complaint that the order was improvident, granted without authority and was ineffectual. If it was effectual for any purpose in the disturbance of this judgment, the defendant would be estopped from urging it, and it would be in repudiation of his own act and available as advantage of his own wrong. This the law does not tolerate. We find no error in the record.
The judgment should, therefore, be affirmed, with costs.
All concurred.
Judgment affirmed, with costs.