Erie County NyArchives Court.....Carpenter, George Vs. German-American Insurance Co Of N Y 1889
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Source: Reports Of Cases - New York
Written: 1889

Fifth Department, March Term, 1889.


GEORGE C. CARPENTER and HENRY M. CARPENTER, Respondents, v. GERMAN-AMERICAN 
INSURANCE COMPANY OF NEW YORK, Appellant.

Policy of insurance—failure to furnish proofs of loss—failure to prove title in 
the assured at the date of the policy.

In an action, brought to recover for a loss sustained by the burning of a steam 
mill, which was insured by the defendant, a defense was interposed to the effect 
that the plaintiffs had violated a condition of the policy in respect to 
rendering proofs of loss. The language of the policy in that respect was 
that "in case of loss the assured shall give immediate notice thereof, and shall 
render to the company a particular account of said loss, under oath, stating," 
etc. (Here followed a specification of the facts required to be stated in what 
are commonly called the preliminary proofs of loss.)

It appeared upon the trial that an immediate notice of the loss was given, but 
that no proofs of loss were furnished until about six months after the loss 
occurred.

Held, that, as the stipulation in respect to furnishing proofs of loss was not 
made a condition of the policy, the delay in rendering these proofs did not of 
itself work a forfeiture of the policy or preclude a recovery by the plaintiffs.

One of the conditions of the policy was that the assured were, at the date of 
the insurance, the sole, absolute and unconditional owners of the property 
insured. 

The proofs and admission of the plaintiffs showed that, at the date when the 
insurance was effected, the plaintiffs had no legal title to the property 
insured, but held it under a contract of sale executed by the National State 
Bank of Elizabeth, N. J., the party of the first part thereto, by which it 
agreed to sell and convey the premises to the plaintiff George C. Carpenter on 
or before December 6, 1882. On the contract there was indorsed a transfer from 
George C. Carpenter to Henry M. Carpenter of an undivided half of the premises.

The jury found that the plaintiffs had, at or before the time of the issuance of 
the policy to them, informed the agent of the defendant, who countersigned and 
issued the policy, "that they held the mill and premises on which it was 
situated by contract for purchase and not by deed."

The evidence given by the plaintiff on the trial showed that the plaintiffs had 
a contract from the Bank of Elizabeth, but that the title of the property was in 
one John Kean.

Held, that the plaintiffs, having failed to show that, at the time of the 
issuance of the policy, they held an equitable title by virtue of a contract of 
sale from the owner of the property, as, in substance, the jury found they 
informed the defendant's agent, they could not recover.

Appeal from a judgment in favor of the plaintiffs, rendered at the Erie Circuit, 
which was entered in the office of the clerk of Erie county on the 24th day of 
July, 1888; also from an order of a Special Term, dated July 11, 1888, denying a 
motion for a new trial on a case and exceptions, which was entered in the said 
clerk's office on July 11, 1888.

M. W. Cooke, for the appellant.

George Wadsworth, for the respondents.

Dwight, J.:

This action was on a fire policy for the loss of a steam saw-mill in McKean 
county, Pa. Several defenses were set up by the answer, only two of which are 
insisted upon on this appeal, viz.: 1st. That the plaintiffs have violated the 
condition of the policy in respect to rendering proofs of loss. 2d. That the 
plaintiffs had no insurable interest in the property at the time of effecting 
the insurance.

The omission to render proofs of loss, until about six months after the loss was 
incurred, is admitted. The language of the policy in that respect is as 
follows: "In case of loss the assured shall give immediate notice thereof, and 
shall render to the company a particular, account of said loss, under oath, 
stating," etc. Here follows a specification of the facts required to be stated, 
in what are commonly called the preliminary proofs of loss, and the requirement 
of a certificate of a magistrate or other specified official, in support of such 
statement. The immediate notice of the loss was given and acknowledged. No time 
being fixed within which the preliminary proofs should be rendered, the contract 
will be construed to intend a reasonable time; and there was nothing in the case 
which would have justified the court in holding that the delay of six months was 
reasonable. But what was the effect of failure on the part of the plaintiff to 
perform this stipulation of the contract? None is specified in the policy. 
Peformance of the stipulation is not, in terms, made a condition of liability on 
the part of the defendant, nor is a forfeiture of the policy attached to that 
stipulation as a penalty for its non-performance. The undertaking of the 
defendant is expressed to be "in consideration of the receipt of fifty dollars."

But there are in the contract a score of expressed conditions upon the existence 
or non-existence of which the validity of the policy or the liability of the 
defendant are made to depend. Thus, if the assured make an erroneous 
representation in an application; if he omit to make known any fact pertaining 
to the risk; if there be any other insurance; if the risk be increased; if the 
assured be adjudged a bankrupt; if any change take place in the title (whether 
voluntary or otherwise); if the policy be assigned; if the assured is not the 
sole, absolute and unconditional owner of the property insured; if gunpowder or 
any one of many other things be kept or used on the premises; if the mill be run 
over hours or lie still for more than ten days, and upon many other expressed 
conditions existing previous to loss, the policy shall be void. So, too, after 
loss, no recovery shall be had on this policy beyond the actual damage to the 
property or its cash value if totally destroyed, to be determined by appraisal, 
if not agreed upon. A refusal to answer questions on an examination under oath, 
to which the assured may be required to submit, or to subscribe his evidence 
taken on such examination, or any fraud or attempt at fraud, or false swearing 
on the part of the assured, shall cause a forfeiture of all claim under this 
policy.

Finally, at the close of the contract, occurs the provision: "This policy is 
made and accepted on the above expressed conditions." This language may, we 
think, with propriety be held to refer to those provisions of the policy, of 
which illustrations have been given, which are expressly made conditions of its 
validity, or of liability on the part of the insurer, or of the limitation of 
such liability. The stipulation in respect to rendering proofs of loss is not 
made one of those conditions, and we think the delay in rendering those proofs 
did not of itself necessarily work a forfeiture of the policy or preclude a 
recovery by the plaintiffs.

The other question is possibly one of more difficulty. It is made by the 
contract one of the conditions of the validity of the policy that the assured 
were, at the date of the insurance, the sole, absolute and unconditional owners 
of the property insured. If not so, the policy is declared to be void. The 
proofs and admission of the plaintiff show that, at the date when the insurance 
was effected, the plaintiffs had no legal title to the property insured, but 
held it under a contract of sale. The contract was executed by the National 
State Bank of Elizabeth, N. J., as party of the first part, dated September 10, 
1881, and thereby the bank agreed to sell and convey the premises to the 
plaintiff, George C. Carpenter, on or before the 6th day of December, 1882. On 
the contract was indorsed an assignment by George C. Carpenter to the plaintiff 
Henry M. Carpenter of "an undivided one-half part of the premises." There was 
also evidence tending to show, and the jury, by a special verdict, found the 
fact to be, that the plaintiffs, at or before the time of the issuance of the 
policy to them, informed the agent of the defendant, who countersigned and 
issued the policy, "that they held the mill and premises on which it was 
situated by contract for purchase, and not by deed."

We do not understand the defendant to question here the proposition maintained 
by counsel for the plaintiffs, and upon which the court directed a general 
verdict for the plaintiffs, that the notice found by the jury to have been given 
to the agent at the time of issuing the policy, was notice to the defendant; and 
that the defendant is chargeable with knowledge of the facts thus communicated 
to the agent, so far as they were facts, to the same effect as if those facts 
had been stated in the contract itself. But there is the further question here, 
whether that statement represented the actual facts of the case. If not, it had 
no effect to relieve the plaintiffs from the express condition of the contract, 
to the effect that they were the sole, absolute and unconditional owners of the 
property insured; and upon that question the burden of proof was clearly on the 
plaintiffs. By their contract with the defendant, the plaintiffs have expressly 
consented to the condition that if they were not, at the date of the contract, 
the sole, absolute and unconditional owners of the property, the policy should 
be void. It is conceded that this condition was not fulfilled; the plaintiffs 
seek to avoid the condition by proof that the insurer was informed, at the time 
of making the contract, that they were not the sole, absolute and unconditional 
owners of the property, but held an equitable title thereto by virtue of a 
contract of purchase and sale. The theory of the plaintiff's case, in this 
respect, is that the defendant was estopped from insisting upon the violated 
condition because it contracted in view of the actual facts of the case, which 
were communicated to its agent at the time of the contract. Clearly, in order to 
avail themselves of the estoppel, it was necessary for the plaintiffs to prove 
both the fact of the communication to the defendant's agent and the truth of the 
fact communicated. This they have failed to do. The evidence is that the 
plaintiffs had a contract from the Bank of Elizabeth, but that the title of the 
property was in one John Kean. There is a suggestion that Kean was the president 
of the bank, and that he held the title in trust for the latter, but there is no 
evidence to that effect, and, so far as the evidence goes, it negatives the 
proposition that the vendor in the plaintiff's contract of purchase had any 
title to convey.

The plaintiffs have, therefore, failed to show that at the time of the issuance 
of the policy they held an equitable title by virtue of a contract of sale from 
the owner of the property, as, in substance, they allege and the jury have 
found, they informed the defendant's agent. We must consider the plaintiffs as 
having failed to make a case in the respect last considered, and that the 
defendant was entitled to a direction of a verdict in its favor on the first and 
second grounds stated in its motion to that effect.

The judgment and order appealed from should be reversed and a new trial granted.

Barker, P. J., and Macomber, J., concurred.

Judgment and order reversed and new trial granted with costs to abide the event.

Additional Comments:
Reports of Cases Heard and Determined in the Supreme Court of the State of New 
York. Marcus T. Hun, Reporter. Volume LIX, 1889, HUN 52. Banks & Company, 
Albany, NY. 1901.

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