Opinion
November, 1892.
Thomas Brennan, for plaintiff.
August Kohn, for defendant.
This action was brought to recover upon a policy of insurance against loss by fire, in a sum not exceeding $1,000, issued by defendant to the plaintiff, and affected certain stock and fixtures at 47 Vesey street in the city of New York of which it is admitted plaintiff was the owner. The policy was issued for one entire premium and the risk was distributed by limiting it to $500 on the stock, and a like amount on the fixtures. It was therein provided that "this entire policy shall be void if the insured has concealed, or misrepresented, in writing or otherwise, any material fact or circumstance concerning this insurance or the subject thereof, or if the interest of the insured in the property be not truly stated therein; or in case of any fraud or false swearing by the insured touching any matter relating to this insurance, or the subject thereof, whether before or after a loss;" also that "this entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void * * * if the interest of the insured be other than an unconditional and sole ownership; or if the subject of insurance be personal property and be or become encumbered by a chattel mortgage;" and that the policy was to be regarded as made and accepted subject to those conditions. At the time of issuing the policy, the fixtures were encumbered by a chattel mortgage of which fact defendant had not been previously informed, nor did defendant make inquiry to ascertain if there was any. Thereafter the stock and fixtures were damaged by fire, proofs of loss were submitted to defendant, and it is mutually conceded by the parties that the proportion of the loss which the policy under review bears to the total amount of insurance is $312.58 on the stock, and $152.78 on the fixtures. Defendant refused payment of both sums on the ground that the policy was avoided by the chattel mortgage, and in answer to the complaint interposed as affirmative defenses that plaintiff was not at the time of issuing the policy the "unconditional and sole" owner of the property insured because of the outstanding chattel mortgage on the fixtures, and that pursuant to the terms of the policy it was to be totally void if the "subject of insurance" was thus encumbered. The learned trial judge dismissed the complaint as to the loss on fixtures and directed a verdict for the plaintiff for the amount of the loss on stock, subject to the opinion of the General Term, to which direction, as well as the refusal of the judge to dismiss the complaint as to both items, due exception was taken by defendant's counsel. Plaintiff now moves for judgment on the verdict.
The motion should be granted. The provision of the policy, to the effect, that its validity shall be dependent upon plaintiff's "unconditional and sole" ownership of the property insured, had reference only to the quality of plaintiff's title, not to liens and encumbrances on the property, and the policy was, therefore, not rendered void because of the chattel mortgage. Conover v. Ins. Co., 1 N.Y. 290; Savage v. Howard Ins. Co., 52 id. 502; Noyes v. Hartford Ins. Co., 54 id. 668; Pelton v. Westchester Fire Ins. Co., 77 id. 605; Carson v. Jersey City Fire Ins. Co., 39 Am. Rep. 584; Hartford Fire Ins. Co. v. Walsh, 5 id. 115; Commercial Ins. Co. v. Spankneble, 4 id. 582; Washington Fire Ins. Co. v. Kelly, 3 id. 149; Hubbard v. Hartford Fire Ins. Co., 33 Iowa 325; Kronk v. Birmingham Ins. Co., 91 Penn. St. 300; Strong v. North Am. Fire Ins. Co., 1 Alb. Law J. 162; Green v. Homestead Fire Ins. Co., 17 Hun, 467.
The policy, however, was invalidated as to the fixtures by the mortgage under the provision that it should be void if the subject of insurance be encumbered by a chattel mortgage, but remained effective with reference to the stock. Having made the property distinct subjects of insurance by separately valuing it, by distributing the insurer's risk among the several subjects of insurance, and limiting its risk among the several subjects of insurance, and limiting its risk as to each, the parties to the contract will be deemed to have intended as many distinct insurances as there may be subjects of insurance; and the avoidance of the policy by breach of its condition as to one of the subjects of insurance will not have the effect of avoiding it as to the others, in the absence of language clearly indicating that such was the intention of the parties. Trench v. Chenango Co. Mut. Ins. Co., 7 Hill, 122; Burrill v Chenango Mut. Ins. Co., 1 Edm. Sel. Cas. 233; Noyes v. Hartford Fire Ins. Co., 54 N.Y. 668; Merrill v. Agricultural Ins. Co., 73 id. 453; Schuster v. Dutchess Co. Ins. Co., 102 id. 260; Pratt v. D.H.M. Fire Ins. Co., 130 id. 207; Smith v. Home Ins. Co., 14 N.Y. St. Repr. 106; Woodward v. Republic Fire Ins. Co., 32 Hun, 365; McGowan v. People's Mut. Fire Ins. Co., 41 Am. Rep. 843, Hartford Fire Ins. Co. v. Walsh, 5 id. 115.
It is true, as counsel for defendant observes, that the cases hitherto decided by the courts of this state, so far as they have been reported, were those wherein the policy applied to both real and personal property and so differ from the one under review in which the policy affected personal property only, but we fail to see, because of this difference, any ground for departure from the reported decisions. These were not put upon the ground that all of the property insured was not of the same species, and the principles underlying the decisions and elaborately stated in Merrill v. Agricultural Ins. Co., supra, are no less applicable to a policy insuring distinct subjects of insurance, all being personal property, than to one insuring real and personal property; and the distinction here sought to be made was not recognized in Hartford Fire Ins. Co. v. Walsh, 5 Am. Rep. 115, where the subjects of insurance consisted of distinct parcels of real property, and the policy was held valid as to one and avoided as to the other.
We are requested also to observe that the policy before us reads that "this entire policy shall be void, etc.," while in the reported cases the word " entire" was absent, but we fail to appreciate any additional force from the language here employed. Under the ruling of Merrill v. Agricultural Ins. Co., it can have no other effect than to invalidate the policy only as to the subject of insurance, in respect to which the condition of insurance was broken or remained unperformed.
As a last objection to the granting of plaintiff's motion for judgment, defendant's counsel urges that the policy is invalidated because plaintiff concealed or misrepresented the existence of the chattel mortgage when it applied for and received the policy. This was not among the defenses interposed by the answer, but assuming that it was, there was no evidence to support it on the trial. The case fails to disclose that there was ever at any time, before the policy was issued, even the remotest discussion or correspondence concerning liens, or incumbrances, on the property insured, or part thereof, and where there is no representation there can be no "misrepresentation." It remains to inquire what evidence there is of "concealment." Concealment is the " willful withholding of some facts material to the risk which the insurer had a right to know, and which the insured was under a duty to disclose" (Lawson's Rights, Remedies Practice, Vol. 5, § 2060, p. 3520), but plaintiff, and its officers and agents, cannot be said to have willfully withheld any material fact from defendant's knowledge unless they knew, or had reason to know, that the information was required by it. There is nothing before us from which we may ascertain that the application for insurance required that the liens or incumbrances be stated, or that inquiry was at any time, before the policy was issued, made of plaintiff, its officers or agents, respecting these matters, and in the absence of every intimation that such was desired, plaintiff was under no duty to disclose the particulars of its interest in the property insured. Cross v. Nat. Fire Ins. Co., 132 N.Y. 133; Tyler v. Ætna Ins. Co., 12 Wend. 507; Turner v. Burrows, 5 id. 541; Burritt v. Ins. Co., 5 Hill, 188. It cannot, therefore, be successfully said that there was "concealment."
Defendant's exceptions should be overruled and plaintiff's motion for judgment on the verdict granted, with costs.
DALY, Ch. J., concurs.
Judgment for plaintiff.