Opinion
Argued October 21, 1881
Decided November 22, 1881
James C. Cloyd for appellant.
N.B. Hoxie for respondent.
The first condition in each of the policies of insurance upon which this action was brought provides that if any application, etc., is referred to in the policy, it "shall be considered a part of this contract, and a warranty by the assured." It is then stated that if any false representation by the assured, of the condition, etc., of the property shall be made, or any omission to make known any fact material to the risk," etc., "or any overvaluation, or any misrepresentation whatever, either in the written application or otherwise," and after enumerating other things, concludes that "then and in every such case this policy shall be void." The evident meaning and purpose of the concluding clause is, that if any of the conditions named are violated, the policy shall be avoided. The judge upon the trial held that the provision touching any misrepresentation was a warranty which prevented a recovery, and directed a verdict in favor of the defendant, and the plaintiff's counsel excepted to the ruling. It is claimed by the appellant's counsel that this was error, for the reason: First, that the statement insisted upon as a ground for forfeiture, was a misrepresentation, and if untrue, must be shown to be material, to avoid the policy. Second, whether material or not was a question for the jury. We think that the position taken cannot be upheld, and that the true interpretation of the policy is, that it is void in case of any misrepresentation whatever in reference to the particulars which are enumerated. The concluding clause specifies quite distinctly what should be the result of a violation of any of the conditions named, and giving full force and effect to the phraseology employed, it cannot be questioned that any misrepresentation whatever avoided the policy. While it may well be that a misrepresentation of a matter which does not affect the risk, and is not material in some cases, as is claimed, will not avoid the policy, and whether it is material is a question for the jury, such rule has, we think, no application whereby the terms of the policy misrepresentations are converted into warranties by a stipulation that an untrue answer will avoid the policy. (May on Insurance, 104, § 195.) If it is stipulated that if there is any misrepresentation whatever, the contract should be void, it is of no importance whether it is a warranty or a representation. The materiality is contracted for and under the rule as to warranties is not a subject of consideration. A condition in a policy, that if a building stands on leased ground, that fact must be especially represented to the company and expressed in the policy, is ordinarily considered as a warranty that the building did not stand on leased ground, and the truth of that warranty becomes a condition precedent to any liability of the insurer. ( Van Schoick v. Niagara Fire Ins. Co., 68 N.Y. 439.) So also, a provision that if the insured suffer any judgment or decree as a lien to pass against him, without communicating it to the insurer, it is held to be an express warranty. ( Egan v. M. Ins. Co., Den. 326.)
In Anderson v. Fitzgerald (4 H. of L. Cas. 484), false answers were made to questions contained in the proposal for life insurance, and it was agreed that the particulars mentioned in the proposal should constitute the basis of the contract. Several things were also mentioned that the insured warranted, but nothing was said about false answers. The policy also contained a provision that if any thing warranted should not be true, or if any circumstance material to the insurance shall not be truly stated, or shall have been misrepresented or concealed, or any false statement made to the company in or about the obtaining or effecting the insurance, it should be void. It was held that this prohibited every false statement whatever, whether in matters actually material or immaterial, and leaves no room for dispute whether the particular matter to which it related was material or not, leaving for the company to determine for itself what matters it deemed material, and what not, and that it was error to leave to the jury the question whether the representation was material or false, the question being as to the truth and not the materiality of the representation. The cases cited establish the principle that where the provisions of the contract explicitly declare that it shall be void in case of misrepresentation, and certain conditions which are enumerated are not performed, the truth and not the materiality of the misrepresentations is the real question.
We have been referred to some authorities by the counsel for the appellant which are claimed to hold adversely to the doctrine laid down in the cases already cited, but we think they are not analogous. In Owens v. The Holland Purchase Ins. Co. ( 56 N.Y. 568), the application for insurance contained a valuation of the lands and buildings which was excessive, and which contained a covenant that the "valuation, description and survey is true and correct and that they are submitted as his warranty and the basis of the desired insurance." The policy in referring to the application stated that the insurance was "on the following property as described in application." It was held that this only adopted that portion of the application describing the property, and that there was no warranty as to the value. The rule is also laid down that when parts of the application are not adopted and made the basis of the contract, so as to constitute warranties, they are to be treated as representations, not prejudicing the rights of the insured, unless they are material to the risk, are untrue and were not made in good faith. This rule must be considered in reference to the facts presented in the case cited and cannot be regarded as adverse to the rule laid down in the cases to which we have referred.
The case cited from the Massachusetts Reports, Vose v. E.L. H. Ins. Co. (6 Cush. 47) does not present a state of facts so precisely similar as renders it directly in point, but even if it were otherwise, it cannot control the adjudications in this State. Although the misrepresentation as to the ownership of the property was oral, it is nevertheless within the rule that such a representation as to a present fact as to the title, situation, use or condition of the property material to the risk may be shown to avoid the contract. (Wood on Ins. 415, § 212; Alston v. Mechanics' Ins. Co., 4 Hill, 329, reversing 1 id. 510.)
This limitation, however, relates to a misrepresentation where there is no warranty. But where there is a warranty in the policy covering "any misrepresentations whatever, either in the written application or otherwise," the materiality of the representation is not usually controlling.
Even if it be assumed that the materiality of the misrepresentation actually made is important, we think it is sufficiently established that the statement made as to the ownership of the property was material, and that the representation, if untrue, was such a violation of the terms of the policy as rendered it void. A distinct inquiry was made at the time as to the ownership of the property, of the plaintiff's agent, and a direct and positive answer given. It was stated by the agent, when the application for the first policy was made, that Mrs. Catharine E. Jack, the widow of Captain Jack, of Brooklyn, was the owner, and that she was going to keep a first-class hotel upon the premises. When the second policy was applied for it was represented that there was a mistake in giving the name, and that it should be Margaret instead of Catharine in the first policy, and the same was altered; and the same representation was made again, that the party was the widow of Captain Jack. These statements were untrue, and the evidence showed that Margaret E. Jack was not an adult, but an infant child three years of age, and that the widow of Captain Jack did not keep the hotel. The representations were also believed by the defendant's agent, and upon the faith of them the policies were issued. The inquiry made evinces that it was material, and it is evident that it was important to the underwriter to know the person who owned the property, and who was to keep the hotel and conduct the business; whether it was one well known or otherwise — an adult who would be likely to exercise proper care over the same, or an infant who would be unable to do so, and who, as the evidence shows in this case, had no general guardian to protect her rights. The insurer has a right to know to what extent the insured has the ability to protect, or an interest in protecting against the perils insured against. ( Savage v. Howard Ins. Co., 52 N.Y. 502, 504.) And in a case like this, when a specific inquiry is made, the question of the materiality of the statement in respect to the risk is settled by the parties as a matter of contract. A broad distinction exists whether the statement is made in answer to inquiries or otherwise. In the one case the answers are made material by the act of the assured, whether they are in fact or not, while in the other case, even though the statements are made a part of the policy, they are not efficacious as warranties, although material in fact. (Wood on Fire Ins. 422, § 214.) This is especially the case when the inquiry calls upon the party to communicate the nature of his interest in the property, and he is bound to answer accurately and at his peril. ( Shoemaker v. Glens Falls Ins. Co., 60 Barb. 84; Birmingham v. Empire Ins. Co., 42 id. 457; Davenport v. N.E.M.F. Ins. Co., 6 Cush. 340; Wood on Fire Ins., §§ 216, 218; Burritt v. Saratoga Ins. Co., 5 Hill, 188.) The cases which hold that the materiality of a misrepresentation should be submitted to a jury are distinguishable and do not apply where there is an express stipulation as to misrepresentation, and it is manifestly plain, as in the case at bar, that it might have affected the underwriter in taking the risk, had all the facts been disclosed. (See Anderson v. Fitzgerald, supra.) In the case at bar it was undisputed that an infant of tender years could not, and was not bound by reason of this disability to perform the various conditions and provisions of the contract, and that the inability to do so might have been a serious objection had it been known to the underwriter. When the fact as to the materiality is not in dispute, as is clearly the case here, the question is for the court and not for the jury. (Wood on Fire Ins., § 177; Appleby v. Astor Fire Ins. Co., 54 N.Y. 253; Leitch v. Atlantic Mut. Ins. Co., 66 id. 100; Savage v. Howard Ins. Co., 52 id. 502.) The question as to a waiver of the right to claim a forfeiture is fully considered in the opinion of the General Term. The defendant has insisted there was no valid claim from the time it was presented, and has not waived its right to defend on the ground that the policy was void. Titus v. Glens Falls Ins. Co. ( 81 N.Y. 410) is not analogous, and no case is cited which holds that there was a waiver under circumstances like those now presented to our consideration.
The claim that the condition of the policy in question has no relevancy when the special mortgage clause attached to the policy is considered, and that the plaintiff was relieved thereby from such condition, and that it superseded the same, is not, we think, well founded. This clause provides that the interest of the mortgagee shall not be invalidated by any act or neglect of the mortgagor or owner of the property, and it clearly contemplated a case where the owner could act or could neglect, and not a case where the policy was issued in the name of an infant, who, by reason of its incapacity, could not furnish any protection to the company whatever. A policy obtained through misrepresentation as to the owner cannot fairly be considered as embraced within the meaning of the clause referred to, nor can such misrepresentation be regarded of itself as an act or neglect within the terms of the policy.
The authorities cited by the appellant's counsel to sustain a different position do not apply to the facts here presented.
We think that there was no erroneous ruling as to evidence which could affect the result, and the judgment should be affirmed.
All concur.
Judgment affirmed.