175 N.E. 351 | NY | 1931
Plaintiff, an inexperienced woman, unable to speak English, bought a farm from the defendant, giving back a purchase-money mortgage for $12,000, payable to defendant's wife. In the mortgage was the usual clause (Real Prop. Law; Cons. Laws, ch. 50, § 254, subd. 4) that the mortgagor would keep the buildings insured against loss by fire for the benefit of the mortgagee. One of the policies expired two years thereafter, and the defendant gave notice to the plaintiff to renew it. She told him that she was unable to insure because she was without the needed money, to which he answered that in that event he would insure the buildings himself. This he promptly did. He took out a policy for $2,000 in the name of the plaintiff as the assured, with a standard mortgage clause appended to protect his wife, the mortgagee. The premium was $60. The defendant sent the plaintiff a bill for that amount. She reimbursed him for the outlay with the next installment of the interest.
The policy, which was kept in the defendant's custody, was voidable in its inception as between the insurer and the plaintiff. It was voidable because it contained a clause to the effect that the insurer would not be liable if there was any other policy covering the property insured. Such a policy there was, as the defendant well knew. With that knowledge he omitted to disclose the truth to the insurer, and to obtain the waiver or consent that would have made the new insurance valid. A year or more thereafter the dwelling was destroyed by fire. The insurer refused to recognize the policy as valid in so far as there was an apparent coverage of the interest of the owner. It made a settlement with the defendant, who was then the holder of the mortgage by succession *4 to his wife, and took an assignment of an undivided interest in the mortgage proportioned to the payment.
The plaintiff brings this action to recover damages from the defendant for his negligence in taking out a policy unavailing to protect her. Negligence there was, or so the triers of the facts might find, and negligence that was actionable if diligence was a duty. The defendant disputes the agency and so denies the duty. In his view he was acting, not as agent for the owner, but solely in his own behalf or in that of his wife, the mortgagee, to give protection to the mortgage lien. The trial judge left the quality of the relation to be determined by the jury as an inference of fact in the light of all the circumstances. A judgment for the plaintiff was reversed by the Appellate Division (two justices dissenting), the majority of the court holding "that the record presents no evidence on which a finding can be based that defendant was acting as plaintiff's agent in procuring the insurance" (
We think the record permits the inference that the defendant in procuring the insurance was acting as the plaintiff's agent, and was chargeable with a duty of reasonable diligence. The words of his promise may be insufficient to prove an agency if they are extracted from their setting. They wear another aspect in the light of the events that followed. The defendant did not take out a policy confined to his own interest, or to the interest of his wife, who was then the holder of the mortgage (Carpenter v.Providence Washington Ins. Co., 16 Pet. [U.S.] 495; Leyden v.Lawrence,
A question remains as to the measure of the damage. If the policy had been valid as between the insurer and the owner, the sum of $2,000, due from the insurer, would have been applied by the mortgagee in reduction of the mortgage, or paid over to the mortgagor for the restoration of the building (Real Property Law, §
A point is made that the plaintiff was to blame for the forfeiture of the policy, in that she failed to furnish the insurer with timely proofs of loss. There was thus negligence, it is said, on her part, which neutralized the defendant's negligence in respect of the form of the insurance. As to this a sufficient answer is that within *7 the term of sixty days allowed by the policy for the presentation of the proofs, the plaintiff turned over to the defendant the business of collection, and that the defendant professed thereafter to act in her behalf. We do not overlook the fact that the testimony as to the assumption of this duty is uncertain and at times conflicting. In view of the failure of the defendant to take the stand in his own defense, a jury, not unreasonably, resolved the doubt against him.
The judgment of the Appellate Division should be reversed and that of the Trial Term affirmed with costs in the Appellate Division and in this court.
CRANE, LEHMAN, KELLOGG and O'BRIEN, JJ., concur; POUND and HUBBS, JJ., not sitting.
Judgment accordingly.