Opinion
Argued March 9, 1883
Decided March 27, 1883
Frank B. Lown for appellant.
H.H. Hustis for respondents.
Certain provisions of the policy of insurance issued by the defendant company are relied upon as constituting a defense to the plaintiffs' recovery. These are that the contract shall be void "if the building become unoccupied without the assent of the company indorsed" on the policy; that "the use of general terms, or any thing less than a distinct, specific agreement, clearly expressed and indorsed on the policy, shall not be construed as a waiver of any printed or written condition contained in it; and that the agent of the company "has no authority to waive, modify or strike from this policy any of its printed conditions; nor is his knowledge of, or assent to insurance in other companies, or to an increase of risk, even if within the limit of his authority herein expressed, binding upon the company, until the same is indorsed in writing on the policy, and the increased premium (if any) "paid therefor." As matter of fact the building insured was unoccupied when the policy was issued, as well as when it was burned. We must assume from the verdict that such fact was known to the agent who delivered the policy at the inception of the contract, and who issued it without indorsing upon it the assent of the company. The insurance was obtained by mortgagees, and, although in the name of the assignee of the mortgagor, was for the benefit of the mortgagees, and the loss payable to them. The insurance was temporary, and for a brief period, running only for two months, and the premium charged was at the rate of twenty-five cents per hundred, which the evidence shows was appropriate to a case of unoccupied property, but at least double the rate charged for the same time on an occupied building. The defense rests upon the omission of any indorsement on the policy. The case of Woodruff v. Imperial Fire Ins. Co. ( 83 N.Y. 133) is fatal to the defense unless the effort of the appellant to point out a material difference proves successful. It was there held that when a policy is issued upon an unoccupied house, the agent having knowledge of the fact, the defendant cannot be permitted to say it never assumed the risk; and in such case the stipulation requiring an indorsement of the company's consent must be deemed waived by the agent, and through him by the company. But in that case it did not appear that the policy contained the provision present in this, which expressly denied to the agent any power to waive, modify or strike from the policy any of its printed conditions; and it is argued that this limitation of the agent's authority, plainly expressed in the policy, was thus brought to the knowledge of the insured, and the company was not bound and could not be affected by the knowledge and waiver of the agent. But the latter had authority to insure an unoccupied building, and could bind his company by so doing. There was no restraint upon his power to make the precise contract which he did make. Only the manner of his doing it was regulated, and as to that it is not clear that he violated the instructions of his principal, and it is certain that the insured was not fairly chargeable with knowledge that he was so doing. The condition of indorsement as it exists in the language of the policy might have been fairly interpreted by the insured as relating only to the future, and as not affecting the inception of the contract. The language is "if the building become unoccupied without the consent of the company indorsed hereon," and the condition is associated with others equally relating to the future. If the building "shall, at any time, be occupied or used so as to increase the risk," if "the risk be increased by the erection or occupation of neighboring buildings;" if the property "be sold or transferred;" if it "be assigned under any insolvent or bankrupt law;" "or if the policy shall be assigned before a loss;" these, and others like them, are the surrounding and accompanying conditions printed in the policy. All of them apparently relate to changes following after an existing and valid contract. The mode of assent to such changes by an indorsement upon the policy indicates the same construction. It assumes a policy already existing, and valid in its inception, upon which a change of its terms is to be noted. So that it will hardly do to say that the insured, upon reading the instrument, was bound to know that an indorsement was essential to its original existence. He might fairly, and naturally, read it as referring only to possible events occurring in the future. But were it otherwise, if not the agent, at least the company, could and did waive the condition. Their agent had authority to insure an unoccupied dwelling; he did so in fact; he charged and received the appropriate premium; we must assume that he accounted for it to the company, which has neither returned nor offered to return the money; the insurer did not repudiate the contract, but has admitted its original validity, recognizing it as a policy of insurance by the letter of its general agent pointing out by whom proofs of loss should have been made, and by its answer when sued. The waiver of conditions at the inception of a policy grows out of the consideration that the company must have intended to make a valid contract, or else to perpetrate a fraud. Their agent had authority to insure the building, although unoccupied, and having done so the company must be held to have waived a condition essential to its validity, and cannot be permitted to receive and keep its fruits, and yet repudiate its existence.
We cannot interfere with the verdict of the jury upon the question whether the compromise between the parties was procured by fraud, and was for that reason invalid. The evidence on the subject shows that Haight was an old man, putting confidence in Thompson, in whose name the policy ran, and influenced by his advice while unconscious that a promise to retain him had been made by the company. The proof is not convincing, but there was enough of it to take the question to the jury, and we cannot review their conclusion.
Nor was the policy avoided by the sale on foreclosure. There was no change of title. No deed was given, and not even a report of sale made and presented to the court for confirmation. Until then the sale and transfer of possession were inchoate and conditional, and had not become absolute and complete. ( Browning v. Home Ins. Co., 71 N.Y. 508; 27 Am. Rep. 86.)
The judgment should be affirmed, with costs.
All concur.
Judgment affirmed.