Opinion
Argued November 20, 1879
Decided December 16, 1879
A.P. Laning, for appellant.
Samuel Hand and Spencer Clinton, for respondent.
The General Term reversed the judgment of the trial court on the ground that there was a breach of the condition in the policy which declares that "if the interest of the insured in the property be any other than the entire, unconditional and sole ownership of the property for the use and benefit of the assured, it must be so represented to the company and so expressed in the written part of this policy, otherwise the policy shall be void." The decision of the General Term proceeds upon the ground that the delivery by Berry Co., to Richmond of the two warehouse receipts, prior to the execution of the contracts of insurance operated to divest the former of the legal title to the wheat embraced therein and to transfer it to the latter as a security in the nature of a pledge or mortgage, leaving in Berry Co. the equitable right of redemption only on repayment to Richmond of the money advanced by him, and that the interest remaining in Berry Co. was not therefore the entire, unconditional and sole ownership of the wheat within the meaning of the condition. This qualified interest of Berry Co. was not expressed in the policy and the General Term in coming to the conclusion reached by it, assumes that the nature of the interest of Berry Co. in the wheat was not represented to the insurers when the contracts of insurance were made.
It is claimed by the plaintiff that the interest of Berry Co. in the wheat, transferred to Richmond as security merely, was an entire, unconditional and sole ownership within the meaning of the condition in question, and the case of Manhattan Ins. Co. v. Weill (28 Gratt. [Va.], 389) is cited in support of the view. But it is unnecessary to pass upon this question in this case as we are of opinion that it does not appear from the bill of exceptions that the question upon which the General Term decided the case was litigated upon the trial, or any exception taken which enables the court to consider it upon appeal. One of the defenses in the answer presents this defense. But it does not appear from the evidence, findings or exceptions, that it was alluded to on the trial. The case was tried by the court, without a jury. The judge made specific findings of fact and law. The case as settled does not contain the evidence in full, but recites that certain facts were proved. There is no suggestion whether or not any proof was made of representations by Berry Co. as to the nature of their interest, no request to find upon that subject and no finding, and the only exceptions which appear in the case are to the findings of fact and law made by the court. Upon this state of the record the question upon which the court below decided the case, was not, we think, before it. It is quite consistent with the case as presented that Berry Co. disclosed to the company when the insurance was effected the exact nature of their interest. The underwriter's policy, upon which the insurance was indorsed, does not contain any reference to or description of the interest or title of Berry Co. in the wheat. If the insured when the insurance was procured informed Osborn, who was the general agent of the underwriters, of the nature of their interest, and he omitted to describe it in the policy but delivered the certificates to Berry Co. without having made such entry, the companies would, in accordance with numerous authorities, be deemed to have waived the condition requiring that the interest of the assured, if not an entire, unconditional and sole ownership should be expressed in the policy. ( Trustees, etc., v. Brooklyn Fire Ins. Co., 19 N.Y., 305; Sheldon v. Atlantic Ins. Co., 26 id., 460; Pitney v. Glen's Falls Ins. Co., 65 id., 6; Van Schoick v. Niagara Ins. Co., 68 id., 434.) The burden of proving a breach of the condition was upon the defendant. It cannot be assumed that Berry Co. did not correctly represent the nature of their title in the absence of any proof on the subject, and especially in view of the finding of the judge on the trial that the insured had duly kept and performed all the conditions of the policy on their part.
But other grounds are insisted upon as justifying the reversal of the original judgment. It is claimed that Berry Co. had no insurable interest in the wheat in the elevator. This point proceeds upon the assumption that the insured had, prior to the insurance in question, issued warehouse receipts covering a larger amount of grain than was in the elevator when the insurance was effected, and that their title to the wheat having passed to the holders of the receipts they had no interest left, which was the subject of insurance. The defendant did not claim on the trial that there was any fraud on the part of Berry Co. which avoided the insurance. It also appears that the whole insurance on the wheat in the elevator was less than its value. Assuming that Berry Co. had parted with the legal title to the wheat by force of warehouse receipts issued by them before the receipts to Richmond were executed, and that the latter therefore acquired no interest in any of the wheat in the elevator by virtue of the receipts issued to him, it would not follow that Berry Co. had no insurable interest in the property. They occupied at least the position of warehousemen, in possession of the wheat, and, as bailees, had duties in respect to the care and custody of the property, and an interest which was the subject of insurance. (1 Phillips on Insurance, § 191.) The insurance was not on wheat owned by Richmond, so that if he owned none, there would have been no insurable subject, but was on wheat in bulk, in the elevator, without any specification of the persons in whom the title was vested. But there is another answer to the objection we are now considering. There is no finding that Berry Co. were not the owners of the wheat in the elevator when the insurance was effected. On the contrary the case states that it was proved that Berry Co. were the owners and the finding is that they were such owners, and there is no finding that any receipts had been issued except those issued to Richmond. The defendant did not request any finding in respect to other receipts issued by Berry Co. and, if we look into the evidence, it does not appear that the other receipts referred to related to the wheat in the elevator at the time of the insurance. But it is sufficient to say that the finding of ownership is supported by the evidence and cannot be questioned in this court, and the point that Berry Co. had no insurable interest in the property cannot be maintained.
There was, at the time the insurance in question was effected, other insurance on the property which was not consented to in writing by the underwriters on the policy, and it is claimed that this avoids the policy, under the provision contained therein that it should be void "if the assured shall have, or shall hereafter make any other insurance on the property hereby insured, or any part thereof, without the consent of the company written hereon." It was proved and found that Osborn was the general agent at Oshkosh of the defendant and other companies which issued the open, or underwriter's policy, under which, by indorsements thereon and certificates issued, insurance was to be effected in favor of persons applying for insurance to the agent in whose name the policy was issued. It also appears that the other insurances mentioned were effected through Osborn as agent for the companies issuing the policies and were known to him to be in existence when the insurance in question was made. Under these circumstances, the issuing by Osborn of the policies sued upon without noting thereon the written consent of the defendant to the other insurance, was a plain waiver by him, binding the defendant, of the provision in question, under the authorities already cited. This case is much stronger than many of the cases where companies have been held to have waived conditions. Here the agent was the person named as the insured in the body of the open policy. It was clearly contemplated that he was to retain the custody of the instrument and create insurances in favor of third persons by issuing certificates of the fact. It was the plain duty of Osborn to have indorsed on the open policy the consent of the underwriters to the other insurance, of which he was advised, and his omission to do this was the omission of the general agent of the defendant and the other companies in whose behalf the insurance in question was made. It would be in the highest degree inequitable to permit the default of the defendant's agent, under such circumstances, to defeat a recovery in this action.
There are no other questions requiring examination. The result is that the order of the General Term should be reversed and the judgment for the plaintiff on the trial be affirmed.
All concur.
Order reversed, and judgment affirmed.