1918.] Statement of case. [225 N. Y.] a number of cottages used in connection with it. The alleged libel was an article with regard to the condition of these cottages. Such an article, the court held, was calculated to injure the plaintiff's reputation in the way of its business and no special damage need be proved. The judgment appealed from should be reversed and a new trial ordered, with costs to abide the event. HISCOCK, Ch. J., COLLIN, CUDDEBACK, CARDOZO, POUND and CRANE, JJ., concur. Judgment reversed, etc. EMPIRE DEVELOPMENT COMPANY et al., Appellants, v. TITLE GUARANTEE AND TRUST COMPANY, Respondent. Title guaranty when vendee who at time of execution of contract of sale knew of defect in title cannot recover against drawer of contract and of subsequent deed for failure to protect him - policy of insurance may define "loss" intended to be covered - when owner of real property may insure himself against defects in title of which he had knowledge — when dismissal of counterclaim pleading facts which would entitle insurer to reformation of policy is error. 1. Where, in an action to recover for the alleged negligence of defendant, a title guarantee company, for error in drawing a contract for the purchase of real property and the subsequent deed, whereby the plaintiff, its employer, became liable to pay certain assessments, it appears by uncontradicted evidence that at the time the contract of sale was made the plaintiff knew of the assessments, the complaint is properly dismissed, since, knowing the facts, the negligence of the defendant, if there was any, in no way injured the plaintiff. 2. While every policy of insurance is so far a contract of indemnity that the insured must possess an insurable interest and that wagers are prohibited, there is no fundamental objection to definition between the parties to an insurance contract of the loss which they intend to cover, so long as it is made in good faith and not as merely the cover of a wager. 3. The words " loss or damage in a policy insuring the owner of real property against loss by reason of defective title thereto and [225 N. Y.] Points of counsel. [Dec., other incumbrances thereon can only mean damages caused to the owner by an existing defect in the title. Hence, it is error to dismiss the complaint in an action against the insurer to recover the amount of assessments paid by the insured because the latter knew that at the time title passed and the policy was dated the lien of such assessments had been perfected. Against the payment of these liens the owners had a right to secure themselves and the mere knowledge by them of the defect did not constitute a defense. 4. Where, however, undisputed evidence shows that both parties knew of the assessment and that the issuance of the policy was delayed and an agreement made that the particular assessment should not be excepted from the policy because of the promise of the plaintiffs that they would pay the same and have it canceled and thereafter the assessment was paid by the plaintiffs and the policy was issued but its date was given as before the payment, the defendant is entitled to a reformation of the policy so as to relieve it from paying this particular assessment, and where such a defense was pleaded as a counterclaim its dismissal was error. Empire Development Co. v. Title Guarantee & Trust Co., 171 App. Div. 116, reversed. (Argued October 31, 1918; decided December 10, 1918.) APPEAL from a judgment, entered January 24, 1916, upon an order of the Appellate Division of the Supreme Court in the first judicial department, reversing a judgment in favor of plaintiffs entered upon a verdict directed by the court and directing a dismissal of the complaint. The nature of the action and the facts, so far as material, are stated in the opinion. Joab H. Banton and John E. Roeser for appellants. The defendant was not entitled to a reformation of the contract. (Levy v. Louvre Realty Co., 222 N. Y. 14; City of New York v. Matthews, 213 N. Y. 563; Southard v. Curley, 134 N. Y. 148; A. B. Co. v. Allison, 144 N. Y. 21; C. S. R. Co. v. T. T. S. Ry. Co., 149 N. Y. 51.) It was not error for the trial court to dismiss its counter 1918.] Opinion, per ANDREWS, J. [225 N. Y.] claim asking for reformation, and direct a verdict in favor of the plaintiffs. (Cannon v. Fargo, 222 N. Y. 321; B. P. Co. v. Reinhardt, 210 N. Y. 162; City of New York v. Matthews, 213 N. Y. 563.) The judgment of the Appellate Division should be reversed and that of the Trial Term affirmed. (El Paso & S. W. R. Co. v. Eichel & Weinkel, 226 U. S. 591; Anson on Contracts [Huffcut's ed.], 376, § 390; Trenton Potteries Co. v. Title G. & T. Co., 50 App. Div. 490; 176 N. Y. 65; Pearsall v. L. T. Guarantee Co., 94 Mo. App. 5, 13; Minn. Title Ins. Co. v. Drexel, 70 Fed. Rep. 194, 198; Foehrenbach v. G. A. T. & T. Co., 217 Penn. St. 331; Ehmer v. Title G. & T. Co., 156 N. Y. 10; Economy Building & Loan Assn. v. West Jersey Title Co., 64 N. J. L. 27, 28.) Harold Swain and Archer P. Cram for respondent. The plaintiffs have suffered no loss or damage within the meaning of the policy. (Trenton Potteries Co. v. Title G. & T. Co., 176 N. Y. 65; Palatine Ins. Co. v. O'Brien, 68 Atl. Rep. 484.) If the policy, as drawn, imports liability by reason of the assessments in question, then it did not correctly set forth the contract made, and should have been reformed accordingly. (Taylor v. Bowen, 52 App. Div. 126; Pennsylvania Steel Co. v. Title G. & T. Co., 193 N. Y. 37, 45; Trenton Potteries Co. v. Title G. & T. Co., 176 N. Y. 65.) The plaintiffs failed to establish any negligence on the part of the defendant. (Livingston v. Spero, 18 Misc. Rep. 243.) ANDREWS, J. The complaint sets forth two causes of action. By the first it is alleged that the defendant issued a policy of title insurance to the plaintiffs covering certain premises conveyed to them at that time; that upon said premises at the date of the policy assessments, not excepted in the policy itself, were a lien; that these assessments, amounting to over $6,000, were paid by [225 N. Y.] Opinion, per ANDREWS, J. [Dec., the plaintiffs and that they sustained a loss in that amount with interest. By the second cause of action it is alleged that the plaintiffs were negotiating for the purchase of the premises described; that the defendant agreed to represent the plaintiffs in the transaction and to safeguard their interests as an attorney would do; to take charge of the matter of the purchase; to advise, guide and direct the plaintiffs and then to insure their title. Because of the negligence of the defendant the contract and deed were not properly drawn and the plaintiffs became liable to the vendors to pay the assessments above mentioned and thereby sustained the losses mentioned in the first cause of action. At the close of the evidence motions were made by both parties for the direction of a verdict. The trial court directed a verdict for the plaintiffs. Thereupon the defendant withdrew its motion and asked leave to submit the questions of fact involved in the case to the jury. This motion was denied as made too late. From the judgment in favor of the plaintiffs an appeal was taken to the Appellate Division. The Appellate Division reversed the judgment, not on the facts but solely upon questions of law and dismissed the complaint. We must first determine whether there was any evidence in the case justifying a finding of the trial court in favor of the plaintiffs upon the second cause of action. Without discussing this question in detail it is enough to say that assuming the negligence of the defendant as claimed by the appellants, the uncontradicted evidence shows that the contract of sale between them and the vendors was made on February 13th, 1907. At this time the plaintiffs knew of the assessments. This evidence is not impeached in any way either by witnesses or by facts and circumstances. It may, therefore, be assumed to be true. Knowing the facts the negligence of the defendant, if there was negligence, in no way injured the plaintiffs. 1918.] Opinion, per ANDREWS, J. [225 N. Y.] Therefore, so far as this cause of action is concerned the result reached in the Appellate Division was right. As to the first cause of action, the policy of insurance was executed and delivered to the plaintiffs after July 18th, 1907. It was dated April 4th, 1907, the time when the title was closed and the deed taken. The assessments became liens on February 27th. They were paid by the plaintiffs on April 20th. Concededly the issuance of this policy was part of the transaction relating to the purchase of the property. In pursuance to the arrangement made between the parties the policy insured the plaintiffs against loss or damage which the insured should sustain by reason of any defect or defects of title affecting the premises or affecting the interest of the insured therein or by reason of the unmarketability of the title insured or by reason of liens and incumbrances charging the same at the date of the policy. The theory of the Appellate Division was that the contract of sale made on February 13th, 1907, provided that the premises were to be taken subject to all assessments which became a lien on the premises after December 14th, 1906. This assessment became a lien after that date. The plaintiffs in their contract had agreed to pay it. Therefore, when they in fact paid it they suffered no loss or damage. They did simply what they had agreed to do. The policy of insurance was an indemnity policy insuring them against loss or damage; and if they sustained none, as they did not in this case, there can be no recovery under it. This conclusion raises the interesting and important question as to the nature of the usual contract for title insurance. May the owner of land insure his existing title? Or, because it is either good or bad; because in either event his situation is unchanged; because an insurance contract is said to be a contract of indemnity, is such a transaction an idle ceremony? Is the legitimate |