Shoemaker v. Glens Falls Insurance Company.

A new trial should be denied, and judgment ordered on the verdict.

Judgment accordingly.

[MONROE GENERAL TERM, December 6, 1869. E. D. Smith, Johnson and J. C. Smith, Justices.]

60

84 87a 77

SHOEMAKER vs. THE GLENS FALLS INSURANCE COMPANY.

Where a policy of insurance against fire referred to the application, "for a more full and particular description, and forming a part of this policy;" and declared that the policy was made and accepted in reference to the terms and conditions therein contained and thereto annexed, which were declared to be a part of the contract; Held that by force of such reference, the application was made a part of the contract.

The conditions annexed required that applications for insurance should be in
writing, and that any misrepresentation, concealment, suppression or omis-
sion of facts or circumstances known to the insured, increasing the hazard,
should avoid the policy. The defendant, in an application for insurance
upon premises covered by a mortgage, falsely stated that there was no
incumbrance thereon; and at the foot of such application covenanted and
agreed to and with the insurers that "the foregoing statement is a just, full
and true exposition of all the facts and circumstances in regard to the con-
dition, situation, value and risk of the property to be insured, so far as the
same are known to the applicant and are material to the risk." Held that
this covenant was a warranty.

Whatever is expressly embraced in a policy, or in any condition or collateral
instrument annexed thereto and made expressly a part of the contract, is a
warranty in respect to the facts specified therein, or clearly referred to.
This rule applies to all substantial statements which relate to the risk, and not
to matters merely stated incidentally.

When the question as to the materiality of a statement made by an applicant
for insurance arises upon a representation unconnected with a warranty, the
materiality of the statement presents a question of fact to be submitted to
the jury. But when there is a specific inquiry in regard to incumbrances
by mortgage, and the answer is positive, denying the existence of any mort-
gage upon the premises, the question of the materiality of the statement in
respect to the risk is settled by the parties as matter of contract.
When a nonsuit is moved for upon the whole case and evidence, and the right
judgment or decision is rendered, it will not be set aside, as a general rule,
upon exceptions to such decision, because an erroneous reason was given

Shoemaker v. Glens Falls Insurance Company.

for denying the motion. But if the point presented for the motion be a sound one, it must be clearly avoided or overreached by other clear facts or points in the case; or else an exception to the erroneous ruling must prevail.

TH

HIS action was brought to recover indemnity for a loss of property by fire, which property was covered by a policy issued by the defendant to the plaintiff, on the 1st of February, 1867, to the amount of $2000, for the term of three years from the last named day, upon the following property:

A portion of the property insured, viz., the barn and its contents, was destroyed by fire, on the night of July 29, 1867; and the plaintiff claimed damages to the amount of $520.

The action was tried at the Steuben circuit in October 1868, before the court and a jury. At the close of the evidence, the defendant's counsel moved for a nonsuit, upon the ground that the contract showed a warranty that there was no incumbrance upon the premises, and that there was no conflict of evidence as to the breach of the covenant; that there was a mortgage upon the premises, given by the plaintiff, which was a valid lieu. The motion was denied by the court, and the defendant's counsel excepted. The plaintiff had a verdict for $433.

The defendant moved for a new trial, on the judge's minutes, which motion was denied, and the defendant appealed from the order and decision denying said motion. Judgment was entered in favor of the plaintiff, upon the

Shoemaker v. Glens Falls Insurance Company.

verdict, on the 12th day of October, 1868, for $558.20, and the defendant appealed therefrom. The cause now came up for hearing on said appeals.

Brown & Sheldon, for the appellants.

I. The court erroneously declined to charge the jury, that if they believed the application in evidence is the one drawn up by Price, the agent, and directed to be signed by the plaintiff, then as a matter of law there was a warranty against incumbrances and a breach, and the plaintiff could not recover. And the court also erred in charging the jury that the application did not constitute a warranty against incumbrances.

The court, by its refusal to charge as requested, and the proposition stated to the jury, excluded from the jury the question as to whether the application in evidence was the one executed by the authority of the plaintiff, for him and in his presence, so far as the question of warranty is concerned, and disposed of that question as a matter of law, against the defendant. There was no dispute but what a valid outstanding mortgage existed upon the property at the time the insurance was effected. The defendant's case is thus freed from any embarrassment, on this appeal, by the claim made on the trial, that the application in evidence is not the one the plaintiff' made.

The policy, by its terms, made the application a part of the contract, the language being,"reference being had to the application of the insured above named, for a more full and particular description, and forming a part of this policy." (Jennings v. Chenango Co. Mu. Ins. Co., 2 Denio, 75. Egan v. Mu. Ins. Co. of Albany, 5 id. 326.) In the last case the language in the policy is identical, on the above subject, with the one in this case, in all the material parts. (Murdock v. Chen. Mu. Ins. Co., 2 N. Y. 210. Chase v. Hamilton Ins. Co., 20 id. 52. Ripley v. Ætna Ins. Co., 30 id. 136. Sheldon v. Hartford Ins. Co., 22 Conn. 235.

The

Battles v. N. Y. Co. Mu. F. Ins. Co., 41 Maine, 208.) application being thus made a part of the contract, all that it contained was, in contemplation of law, inserted on the face of the policy, and the construction of the whole instrument, composed of the two papers-the policy and application becomes important. The application states that there is no incumbrance on the property. Such a statement or stipulation is a warranty. (Jennings v. Chen. Co. Mu. Ins. Co., 2 Denio, 75. Kennedy v. St. Law. Co. Ins. Co., 10 Barb. 285. Mead v. N. W. Ins. Co., 3 Selden, 530. Glendale Co. v. Pro. Ins. Co., 21 Conn. 19. Wood v. Hartford Ins. Co., 13 Conn. 533. Wilson v. Herk. Co. Ins. Co., 2 Seld. 53. Ripley v. Ætna Ins. Co., 30 N. Y. 136. Houghton v. Manuf. Ins. Co., 8 Metc. 114.) The warranty is a condition precedent, and unless performed, there can be no recovery. It is immaterial for what purpose the warranty was inserted, or whether the breach related to the cause of the fire. (Jennings v. Chen. Co. Mu. Ins. Co., 2 Denio, 81. Angell on Ins. § 142. Phillips on Ins. § 866. 2 Greenl. Ev. § 383. Mead v. N. W. Ins. Co., 3 Selden, 530. Gates v. Madison Co. Mu. Ins. Co., 2 N. Y. 43. Ripley v. Etna Ins. Co., 30 id. 163. Le Roy v. Market Fire Ins. Co., 39 id. 90.) That such statement in the application was false in fact, was proved by the plaintiff himself, as well as by the documentary evidence. Such a false statement of incumbrances, on the face of the policy, or in the application, when made a part of the policy, was ruled to be a warranty, and a breach thereof to defeat all claim by the assured, in Bowditch M. F. Ins. Co. v. Winslow, (3 Gray, 415, and 8 id. 38, and cases cited.) See also Murphy v. People's E. M. F. Ins. Co., (7 Allen, 239.) And the same rule obtains when the insurance is made by a stock as well as by a mutual company. (Draper v. Charter Oak F. Ins. Co., 2 Allen, 573. Davenport v. N. E. M. F. Ins. Co., 6 Cush. 341. Richardson v. Marine Ins. Co., 46 Maine, 394.) The express covenant made by the plaintiff, at the end of the application,

Shoemaker v. Glens Falls Insurance Company.

does not limit the effect of the clause in the policy making the application a part of the contract, nor restrict the effect of the plaintiff's false statement as a warranty, to the limits of that covenant. (Draper v. Charter Oak, &c., 2 Allen, 569. Bowditch M. F. Ins. Co. v. Winslow, 8 Gray, 38.) On the contrary, that covenant applies to and embraces the false statement. The plaintiff was required to state, and covenant as to his statement, and he did covenant that the statement in the application, that there was no incumbrance on the premises, was true. 1. There is and could be no question but he knew of the incumbrance, for he admits he did know, and he made the mortgage himself. 2. It was material to the risk; all questions asked in the survey, and answered by the plaintiff, are made material by the parties-the one asking and the other answering. (2 Allen, 573. Patten v. Merchants &c. Ins. Co., 38 N. H. 338. 6 Cush. 430.) In Bowditch M. F. Ins. Co. v. Winslow, (3 Gray, 415,) it was held that although the jury had found the false statement or concealment as to incumbrance was immaterial, as an independent question of fact, and although there was evidence tending to show that the mortgage was disclosed to the agent of the company, and there being a covenant like the one in this case, that it was in law material, the insurer should be truly informed on that subject, the company having made the inquiry, and that the assured could not recover. Such statement, whether the property is incumbered, affects the condition, situation and risk of the property.

The court, in Richardson v. Marine Ins. Co., says, in reference to the claim of the plaintiff's counsel in that case, that the agreement by the assured, that the application contained a true statement, &c., "in regard to the condition, situation, value and risk of the property insured, &c., could have no reference to the outstanding mortgage;" that "the store and the barn were covered by the mortgage. The company deemed it important to know every