128 N.E. 160 | NY | 1920
Lead Opinion
This is an action on a policy of fire insurance covering personal property. The defense is that the policy is void because the property was incumbered with a chattel mortgage. The plaintiff asserts that the chattel mortgage was void by reason of usury and a nullity in *203 law. The question is whether the contract of the parties contemplated the disclosure to the insurance company of the existence of the usurious chattel mortgage.
The stipulation in the policy in suit provided: "This entire policy, unless otherwise provided by agreement endorsed hereon or added hereto, shall be void * * * if the subject of insurance be personal property and be or become incumbered by a chattel mortgage." This language is not unlike the stipulation inBigler v. N.Y. Central Insurance Company (
STORY, J., in the similar case of Carpenter v. ProvidenceWashington Insurance Co. (16 Pet. 495, 511) said: "The stipulations in the policy as to notice of any prior and subsequent policies, were designed to apply to all cases ofpolicies then existing in point of fact, without any inquiry intotheir original validity and effect, or whether they might be voidor voidable."
This is the New York rule on the subject of insurance by its terms void if the insured had other insurance. The rule differed in other jurisdictions. (Turner v. Meridan Fire Ins. Co., 16 Fed. Rep. 454, and cases cited.) The present standard form of fire insurance policy has a clause against other insurance which adds the words "whether valid or not" to the original clause in order to remove all doubts as to the meaning of the policy, but New York had already refused to sustain the contention that an invalid policy might be ignored.
We may assume that the chattel mortgage is void as matter of law. (Sabine v. Paine,
In Forward v. Continental Insurance Co. (
To paraphrase the language of ANDREWS, J., in Landers v.Watertown Fire Insurance Co. (
The judgment appealed from should be affirmed, with costs.
Dissenting Opinion
There is no dispute in regard to the cardinal facts: The defendant issued to the plaintiff a policy in the standard form of this state insuring the property burned, and other property, for the period of three years from November 14, 1916. The property burned December 14, 1916. At the time of the burning there were and had been since September 20, 1916, executed and filed chattel mortgages covering the insured property as security for the payment of a promissory note made by defendant and held by one Manson for eight hundred and fifty dollars. The defendant had not at any time until after the proofs of loss were filed knowledge or information of the existence of the chattel mortgages. The policy of insurance provided: "This entire policy, unless otherwise provided by agreement endorsed hereon or added hereto, shall be void * * * if the subject of insurance be personal property and be or become incumbered by a chattel mortgage." There was not indorsed on or added to the policy an agreement *206 concerning the chattel mortgages. The receiving in evidence of the chattel mortgages and the note for the payment of which they were given as security was objected to by the plaintiff upon the ground that they were usurious and void. The plaintiff subsequently introduced evidence, which remained wholly uncontradicted, tending and sufficient to support a finding that they were usurious and the jury by the verdict so found. The ultimate decision of the trial justice was: "There was sufficient evidence to justify a finding that the mortgage was usurious, but not in my judgment to support a finding that the plaintiff had elected to treat the mortgage as void for usury before the issuance of the policy."
A contract of insurance is to be interpreted as are other contracts. The intention of the parties as gathered from the whole instrument must prevail. If the language used by the parties has a plain meaning, unaffected by that of other clauses or provisions of their contract, the ordinary effect must be given it. The established rules of interpretation are aids in ascertaining the intention. The parties in the instant case stipulated that if the insured property was incumbered by a chattel mortgage at the issuance of the policy the policy should be void. Such is the practical effect and operation of the stipulation under the facts of the case. Whether or not the property was incumbered by the chattel mortgages is the ultimate and determinative question we are to answer. If it was not the plaintiff might lawfully regard the instruments as effectless and mere nothings. The difference between a chattel mortgage in mere words and a valid, effectual incumbering by a chattel mortgage is indicated by the stipulation; it is the difference between the impotent instrument and the object sought by it. In this state a chattel mortgage incumbers property only by effecting a present transfer to the mortgagee of the property mortgaged by it, defeasible by the payment of the sum *207
it is given to secure. (Barrett Manufacturing Co. v. VanRonk,
In virtue of the finding of the jury the note and mortgages were usurious and were, therefore, as a matter of law void. (Sabine v. Paine,
The judgments should be reversed, the verdict reinstated and judgment rendered upon it for the plaintiff, with costs in all the courts.
HISCOCK, Ch. J., McLAUGHLIN and ANDREWS, JJ., concur with POUND, J.; HOGAN and ELKUS, JJ., concur with COLLIN, J.
Judgment affirmed.