CHAPTER XIV.

CLAUSES OF THE NEW YORK STANDARD FIRE POLICY CONTINUED.

NEW YORK COURT OF APPEALS, 1890.

SMITH v. AGRICULTURAL INS. CO.

(118 N. Y. 522.)

Warranty against incumbrances.

FOLLETT, CH. J.-This action was defended on the ground, among others, that the following conditions in the policy were violated by the insured:

(1) "If the property, either real or personal, or any part thereof, shall be encumbered by mortgage, judgment or otherwise, it must be so represented to the company in the application, otherwise this entire policy and every part thereof shall be void."

(2) "This policy of insurance is based upon a written application on file in the company's office, purporting to be signed by the applicant, or by his authority, and all statements contained therein are warranties on the part of the assured."

The application on which the policy was issued was signed by the duly authorized agent of the insured, and contains this question and answer:

"Q. How much is the real estate encumbered? A. $1,000." When the policy was issued, and when the loss occurred, there were five mortgages on the fifty acres, the principal sums of which aggregated $4,411.14, with arrears of interest amounting to more than $600, so that the premises were encumbered for upward of $5,000; and, in addition, there was mortgage upon six acres, adjoining the fifty acres, of $500, with interest from July 1, 1887.

Since 1880, Elton M. Smith, the insured, has not resided in

ance.

this State, and Elijah Smith, his father, has occupied the property, and acted as the agent of his son in respect to this insurSince some time before the date of the policy, Abram Weed has been an agent of the defendant, with powers defined by the following clause in the application: "The powers of the agents of this company are limited to receiving proposals for insurance and collecting premiums, and giving the assent of the company to assignments of policies." The oral negotiations, which resulted in the execution and delivery of the application on which the policy was issued, were conducted by Elijah Smith in behalf of the insured, and Abram Weed in behalf of the defendant. Elijah Smith testified: "Q. What was said (between you and Weed) on the subject of incumbrances? A. He asked if there was a $1,000 incumbrance, and I told him there was over $2,000 incumbrance on it. Q. Did you tell him there was $1,000 incumbrance on it? A. No, sir; the application was not read to me, and I did not read it; that representation that there was only $1,000 incumbrance was not true; I signed it not knowing that that was there."

Abram Weed testified that Elijah Smith stated that the place was encumbered for $1,000, and that he did not say it was encumbered for over $2,000.

The court instructed the jury, that, if Elijah Smith stated to Abram Weed that the place was encumbered for $1,000, the plaintiff could not recover. But if Smith told Weed the place was encumbered for over $2,000, that the discrepancy between such statement and the amount of the incumbrances was not a defense to the action. To this instruction the defendant excepted, and asked the court to instruct the jury, that, if they found that Smith stated to Weed that the property was encumbered for over $2,000, the plaintiff could not recover, which was refused, and an exception taken. This question was also raised by a motion to non-suit.

The most favorable view which can be taken by the court for the plaintiff is to consider the case as though the question and answer testified to by Smith had been inserted in the application instead of in the question and answer appearing therein.

Assuming, then, that the conversation between the agents

of the contracting parties about incumbrances was precisely as testified to by the insured's agent, there was a material misrepresentation in respect to the amount of the liens. The answer that the place was incumbranced "for over $2,000,” to the question, "Is there a $1,000 incumbrance on it?" did not actually or proximately disclose the fact inquired about. The answer, over $2,000," cannot by any fair construction be held to be notice to the defendant, or its agent, that the place was then encumbered for over $5,000.

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It is urged by the respondent that this contract of insurance is severable; that the insurance on the barn should be deemed one contract, the insurance on its contents another contract; and that a misstatement in respect to the amount for which the realty was encumbered does not invalidate the insurance on the personalty; and that defendant, having asked the court to rule that no part of the loss could be recovered, asked for too much in the instruction prayed for and in its motion for a non-suit, and that the exceptions to these rulings are unavailable. Under forms of policies quite different from the one in the case at bar, insuring specific amounts on separate items of property, contracts have been held severable. The following cases illustrate the rule: Merrill v. Agricultural Ins. Co., 73 N. Y. 452; Herrman v. Adriatic Fire Ins. Co., 85 id. 162; Schuster v. Dutchess Co. Ins. Co., 102 id. 260; Holmes v. Drew, 16 Hun, 491; Sunderlin v. Etna Ins. Co., 18 id. 522; Dacey v. Agricultural Ins. Co., 21 id. 83; Woodward v. Republic Fire Ins. Co., 32 id. 365; Baldwin v. Hartford Fire Ins. Co., 60 N. H. 422.

It is expressly stipulated in this policy, that if either the real or personal property, or any part of it, be encumbered, it must be so represented to the company in the application; otherwise the entire policy and every part of it shall be void.

This policy is quite different in its legal effect from those considered in the cases cited; it not being expressly provided in those policies, as in this, that a misrepresentation of the situation of one of the subjects insured should invalidate the insurance on all other property covered by the policy.

Regarding the application amended so as to conform to the testimony produced by the plaintiff, and then construing the application and policy together as the parties have stipulated

that we must, there was breach by the insured of the terms of the contract of insurance, which defeats the plaintiff's claim to recover.

The judgment should be reversed, and a new trial granted, with costs to abide the event.

All concur, except BROWN, J., dissenting; and BRADLEY and HAIGHT, JJ., not sitting.

Judgment reversed.

CHAPTER XV.

CLAUSES OF THE NEW YORK STANDARD FIRE POLICY-CONTINUED

KINGSTON SURREY SPRING ASSIZES, 1870.

CHAPMAN v. POLE.

(22 L. T. N. S. 306.)

Fraud and overvaluation.

ACTION against the Sun Insurance Company, on a fire policy. Plea, "that there appeared to be, and was, fraud in the claim made by the plaintiff upon the company, for and in respect of the said alleged loss and damage, etc., on account of the said loss or damage delivered to the company's office."

The policy was effected in February, 1866. The fire occurred in the following September, and the claim was made forthwith for £418 as for a total loss, but no particulars were delivered until required under the conditions. The particulars of the claim when delivered appearing-on comparison with the salvage and débris-grossly exaggerated, payment was refused. In November this action was brought, and in February, 1867, interrogatories were delivered to the plaintiff, which, not being answered, the action was stayed until, in January, 1870, they were answered, and the action proceeded.

After the plaintiff made a claim of damage to the amount of £418, further particulars being required, in October particulars of claim were delivered, claiming large sums for specific articles to each room. The plaintiff also made a statutory declaration in the usual form," that the said estimate or account contains, to the best of my knowledge and belief, a true and faithful account of the loss and damage sustained by me in my said goods and chattels, all of which were my own property, and were in and upon the said house when the fire happened,