Benedict v. . Ocean Insurance Company

The policy on which this action is brought describes the insured property in these words:

"$1,800 on stock as a cabinet maker, manufactured and unmanufactured, and in process of manufacture, including materials for making the same, and $200 on tools and benches, all contained in the five story brick building, tin roof, situated in the rear of Nos. 195 and 197 Christie street, in this city."

On the trial it appeared that "there was a cellar under the whole building," and that there were some boards, mahogany, chair tops and other materials in the cellar.

It is claimed, first, that the omission to mention the cellar in the description of the building is a misdescription amounting to a breach of warranty; second, that such omission was the concealment of a fact material to the risk and vitiated the policy. The subject matter of the insurance was the stock and other personal property in the building, and not the building itself. There is no pretense that the property insured was misdescribed.

The locality of the building and the materials of which it was constructed are correctly given, and it is called "the five story brick building." I think there was no misdescription. The words "five story brick building" are appropriate to describe such a building whether there be a cellar or not; a cellar is never called a story in common parlance, but a house is spoken of as of one, two or more stories, with reference merely to the number of floors, or spaces between the floors, above the ground. The word "building" necessarily embraces the foundation on which it rests; and the cellar, if there be one under the edifice, is also included in the term house or building. To speak of a building as being five stories simply communicates the idea of its height above the ground, and neither asserts nor denies that there is a cellar under it. If there be a cellar the word building includes it unaffected by the idea of its height above the foundation.

The construction claimed by the appellant would vitiate a large proportion of the policies issued throughout the country. It is almost universally the practice to describe the building as by naming its material and number of stories, without allusion to the cellar; and where the policy covers the personal property in a house it is universally described "as the furniture, provisions," c., c., contained therein; and it has never been held that the property usually kept in cellars was not embraced in such a policy. There is nothing, therefore, in the points of the appellant based on the idea of a misdescription or of a concealment.

The case of Wall v. East River Ins. Co. (3 Seld., 370), was one of warranty of the purposes for which the building was used, which the court held was necessarily implied from the description, and it appearing that the building was also used for other purposes, the breach of warranty was held fatal. In this case there is no pretext for saying that such a question arises.

In the body of the policy, and following the statement of the amount insured and the description of the property, the company inserted in writing these words, "Privilege for $4,500 additional insurance." The printed portion of the policy contains this provision, "and if said insured or his assigns shall hereafter make any other insurance upon the same property, and shall not, with all reasonable diligence, give notice thereof to this corporation, and have the same indorsed on this instrument, or otherwise acknowledged by them in writing, this policy shall cease and be of no further effect."

The assured effected subsequent insurance on the property to the amount of $4,500, but no more. Notice was not given to the company, nor were their insurances "indorsed on the policy or otherwise acknowledged in writing." It is insisted that the defendants' policy was thereby avoided. This question depends altogether upon the effect to be given to the written clause inserted by the company, above quoted. That clause is made a part of the contract, and is to be construed in connection with all its various provisions. Clearly it gives an express assent to further insurance not exceeding the amount mentioned; but such assent was not necessary to the right to make such further insurance, and the clause is therefore ineffective, unless it operates upon some consequence that would otherwise flow from making the same; or modifies some other provision of the contract itself.

Collating and reading the two clauses, above quoted, together, I think there is little difficulty in giving the construction intended by the parties: "Privilege for $4,500 additional insurance" is given, "and if the insured shall hereafter make anyother insurance upon the same property, and shall not with all reasonable diligence give notice thereof," c., this policy shall cease. By force of the written clause, the word "other" is enlarged to include the additional insurance for which the privilege is given. So that, in legal effect, the contract reads that if the assured shall make any insurance beyond the amount insured by this policy, for which express consent is hereby given, he shall immediately give notice thereof, and have the same indorsed. In this way full effect is given to every provision of the contract without violence to any; and the question is not one of waiver, but of construction. No notice was therefore required by the contract so long as the insured kept within the bounds set for him by the written clause. But if it be said that this construction deprives the company of a notice in which they intended to secure for a purpose essential to their protection, the obvious answer is, that the whole matter was the subject of contract, and it was equally in their power to have stricken out the clause altogether as to have modified it as they did, or to have preserved it in its full vigor. The court is to carry the contract into effect as the parties have seen fit to make it.

The primary object of the clause under consideration was, I think, to guard the company against fraud by over insurance. So far as its intent may also have been to secure to themselves the more effectively the benefit of a pro rata distribution in case of loss, that is saved by another provision of the contract, to be found in the 9th condition of insurance, which requires sworn statements of all additional insurances to be served with copies of the written portions of the policies as part of the proofs of loss. Nothing is clearer than that the object of the company, in inserting the privilege for $4,500 additional insurance, was to declare that that sum was not objectionable as an over insurance; and hence, there is no force in the idea that they still meant to require notices of such insurance, to protect themselves from fraud by excessive insurance.

In Harper v. The Albany Mutual Ins. Co. (17 N.Y., 194), it is said to be "a well settled point that the written part of a policy shall always prevail over the printed part in cases of repugnancy" (2 Hall, 622); that "the substance of the contract is always in the written part;" and that "nothing but the most stern legal necessity should constrain the court to give it (the policy) a construction which would nullify it and render it a mere deception instead of the protection which the parties to it designed." (PRATT, J., id., 198.)

I think the construction of the policy in this case demanded by the appellant, would operate to render the contract a mere deception instead of the protection designed. But if the construction of the instrument above indicated be not the true one, in my judgment the court below did not err in giving to it the effect of an express waiver of the requirement of notice and indorsements, or acknowledgment of the additional insurance.

The exception to the decision of the court, overruling the objection to proof of "the acts and declarations" of Wilcox, is not well founded. The testimony sufficiently showed that Wilcox was the agent of defendant. He applied to Janson to insure, and represented himself to be such agent. He received, in part, the premium in advance, and after the surveyor of defendant had examined the building, he brought the policy to the insured, and then received the residue of the premium. His acts were evidently adopted and acted upon by the company.

If there were any of his declarations which ought not to have been admitted, they were not pointed out by a general objection to all "his acts and declarations." Hence it was no error to overrule such general objection, because it included acts which were clearly admissible. But I think the declarations proved were properly regarded as part of the res gestæ.

The judgment should be affirmed.

All the judges concurring,

Judgment affirmed.