Summary
In Bennett v. Agricultural Insurance Company of Watertown, N.Y., 106 N.Y. 243, 12 N.E. 609, in holding the defendant liable under a policy which was issued by it when the property was vacant and such vacancy was known to the agent of the defendant, the court said: "The claim is that although the house was insured as unoccupied, yet as the plaintiff afterwards, during the life of the policy, occupied it for a time by a tenant, he could not thereafter discontinue the occupation during the subsequent life of the policy, and leave the premises vacant without forfeiting the insurance.
Summary of this case from McKinney v. Insurance Co.Opinion
Argued June 6, 1887
Decided June 14, 1887
A.H. Sawyer for appellant. D.A. King for respondent.
The defense, based upon the statement in the application for insurance, that the house at the time of the application was occupied as a residence by a tenant, when in fact it was vacant and unoccupied, was met on the trial by evidence on the part of the plaintiff that the application was taken by Kellogg, the solicitor and agent of the defendant, who furnished the printed form of application used by the defendant, and propounded the questions to the plaintiff, and assumed to enter in writing in the blanks left for that purpose in the application, his answers, and that although Kellogg was correctly informed by the plaintiff that the house was unoccupied, but that when occupied it was occupied by a tenant or hired man, he untruly represented the plaintiff as answering that the house was occupied as a residence by a tenant, and that the plaintiff, supposing that the answers given by him to the questions were correctly entered, signed the application without noticing the misstatements. There was a conflict of evidence as to what occurred. The agent Kellogg testified that the answers were entered as given. The referee, however, found upon this issue in favor of the plaintiff, whose testimony was corroborated by several witnesses, and the finding, having been sustained by the General Term, is conclusive in this court. The agent Kellogg in taking the application was acting within the scope of his authority. He had been accustomed, with the knowledge of the defendant, to fill in the answers of applicants for insurance in the printed forms of application used by the company. Upon the case as it stands it must be assumed that he was informed by the plaintiff that the house was unoccupied. His error in incorrectly inserting the plaintiff's answers, cannot be imputed to the plaintiff or deprive him of the benefit of the policy. If the plaintiff, as found by the referee, answered the questions truly, he is absolved from responsibility. The misstatements in the application were, as between the parties, those of the defendant's agent, and not of the plaintiff, and did not constitute a breach of warranty by the assured. The authorities in this State are quite decisive in support of this view. ( Rowley v. Empire Ins. Co., 36 N.Y. 550; Flynn v. Equitable Life Ins. Co., 78 id. 568; Grattan v. Metropolitan Life Ins. Co., 80 id. 281.) The referee pursuant to the prayer of the complaint, reformed the application by inserting the answers as given by the plaintiff, as of the date of the application, and the evidence justified this relief. The defendant insists that treating the policy as having taken effect as a valid contract of insurance upon an unoccupied dwelling, there was a breach of a condition subsequent contained in the policy, which rendered it void. The policy was issued in August, 1876, for the term of three years. In April, 1878, a tenant was let into possession of the house, and occupied it until November, 1878, when he moved out and the house remained unoccupied from that time until the fire, July 17, 1879. The claim is that although the house was insured as unoccupied, yet as the plaintiff afterwards, during the life of the policy, occupied it for a time by a tenant, he could not thereafter discontinue the occupation during the subsequent life of the policy, and leave the premises vacant without forfeiting the insurance. The policy contains these among other conditions: "If the dwelling house or houses herereby insured, shall cease to be occupied by the owner or occupant in the usual and ordinary manner in which dwelling-houses are occupied as such, or be so unoccupied at the time of effecting insurance, and not so stated in the application; then, and in every such case, or in either of said events, this policy shall be null and void until the written consent of the company at the home office is obtained." The defendant bases his contention upon the first of the conditions above quoted. It is plain, we think, that this condition was intended to protect the company against an increase of risk, by leaving premises vacant which were occupied at the time the insurance was effected, and that it has no application to a risk taken on an unoccupied dwelling-house. The cost of insurance is regulated by the hazard, and when the company insure a vacant building, it charges an equivalent for its undertaking, and if the contract contains no provision limiting the vacancy, it may continue during the whole time of the policy and the premium presumably covers the risk. The condition in question imposes no obligation upon the owner of a dwelling-house, insured as vacant property, to occupy it for any period during the running of the policy, and it must be conceded that if the plaintiff had permitted the house to remain vacant during the whole time after the policy was issued, to the fire, there would have been no defense founded upon the condition in question. The claim is that the plaintiff, having voluntarily put a tenant in possession, although he was not bound to do so, could not, thereafter, terminate the tenancy without forfeiting the insurance. We think this construction of the condition is not admissible. The conditions which precede the one in question relate to acts or conditions occurring subsequent to the contract, which change the risk and increase the hazard. The condition in question is of the same character. It does not permit the owner of a dwelling-house insured as an occupied house, to increase the hazard by allowing it to become vacant, without the consent of the company. If it is unoccupied when insured, the fact must be stated in the application. The fact of non-occupation was stated in the application as reformed, and was known to the agent, who should have stated it in the application as originally furnished. As between the company and the plaintiff, it must be deemed to have been stated.
The question as to notice of loss was properly decided.
We think the judgment is right, and it should, therefore, be affirmed.
All concur.
Judgment affirmed.