229 A.D. 2 | N.Y. App. Div. | 1930
In these actions to recover on policies of fire insurance tried together, verdicts for the defendants were directed.
At the time of the issuance of the policies, the Kingston Chemical Manufacturing Co., Inc. (since become bankrupt), was engaged in erecting a building to be used as a manufacturing plant. The contract for the building was let in May, 1916, and the building was completed in the latter part of July or early in August. The first policy of insurance issued was dated June 9, 1916. It covered the building in process of erection and contained a builder’s risk clause. As this policy is not involved in the litigation, it is mentioned here only in relation to subsequent events. The second policy was issued on July 5, 1916, and covered a stock of merchandise to be used in manufacturing. This policy is the subject of another appeal (Metzger v. Ætna Ins. Co., No. 3, 229 App. Div. 26)
The building and contents were destroyed by fire on February 5, 1917. No question is raised about notice or proof of loss or the amount of such loss. Instead, the defenses are that the policies here in question became ineffective before the loss by reason of the voluntary cancellation or abandonment thereof by the plaintiff, or by the failure of the minds of the parties to meet on the terms of the contract. The differences between them arose solely over the amount of premium to be paid.
The parties differ somewhat concerning certain conversations and arrangements preceding the issuance of the policies. The plaintiff says that all the conversations occurred at the time of the issuance of the policy of June ninth. The agents say that the same conversations were, in effect, repeated before the issuance of each policy. If the difference were material, we would be bound to adopt the plaintiff’s version. In effect, the parties agree that at the time of issuance there was no known, fixed rate for the policies on this building because it had not been inspected; and that the rates agreed upon were tentative only. After inspection a new rate was to be fixed. At first the agents offered a proposed rate of sixty-five cents per hundred. Later plaintiff was advised the policies could not be issued at that rate but there would be a tentative rate equal to that on builder’s risk policies of one dollar and twenty-five cents per hundred; but that he might apply after inspection to have it reduced; and efforts were made by the agents to get a reduction. All these conversations related to subsequent events. In the meantime the policies were issued at the tentative rate agreed upon with no reservation as to a future change. These premiums were paid.
The building was subsequently inspected and a rate was fixed by the Underwriters Association, which defendant claims had legal authority to act. (See Ins. Law, § 141, since amd.) Notice was
That there was no cancellation as a matter of law, either by the company or by the plaintiff with its assent, is very apparent. The policies on their face are complete in all particulars necessary to express the entire agreement. Parol evidence to vary their terms by showing prior negotiations or agreements would be incompetent as contradictory to those expressed in the writing. (Thomas v. Scutt, 127 N. Y. 133; Studwell v. Bush Co., 206 id. 417; Allen v. City of Oneida, 210 id. 496; Newburger v. Am. Surety Co., 242 id. 134; Seitz v. Brewers’ Refrigerating Co., 141 U. S. 510.) But when in view of their prior arrangement regarding a substitute rate, the plaintiff took and attached to his policy the indorsement slip show
The contract as modified became binding on both parties and the original provisions as to premium were waived and a new amount substituted. (Solomon v. Vallette, 152 N. Y. 147; Archibald v. Panagoulopoulos, 233 id. 478; Lieberman v. Templar Motor Co., 236 id. 139, 147; Sayer v. Sunderland, 219 App. Div. 615, 619.) Such modifications may be made to contracts of insurance. (Trustees of First Baptist Church v. Brooklyn Fire Ins. Co., 19 N. Y. 305; Ludwig v. Jersey City Ins. Co., 48 id. 379.) If it can be said as a question of fact that there was no agreement on modification, then the original contract was still in force. The defendants had done nothing which as a matter of law constituted acquiescence in the alleged repudiation of the contract by plaintiff in refusing to pay the additional premium.
As the evidence stands, there was then a policy of insurance modified only as to the premium, which in spite of his protestations, the plaintiff was bound to pay. (Train v. Holland P. Ins. Co., 62 N. Y. 598, 602.) Credit is commonly extended by agents for premiums, and the-company is bound if the policy is delivered and the time of payment of the premium deferred. (Trustees of First Bapist Church v. Brooklyn Fire Ins. Co., supra; Angell v. Hartford Fire Ins. Co., 59 N. Y. 171; Squier v. Hanover Fire Ins. Co., 162 id. 552, 555; Hartwig v. Ætna Life Ins. Co., 164 Wis. 20.) The evidence is not entirely clear, but it indicates that the agents submitted bills for the premiums and continued negotiations for payment after delivery of the indorsement slip. Failure to pay the additional premiums while the amount was in dispute did not cause forfeiture of the policies. (Perry v. Bankers’ Life Ins. Co., 47 App. Div. 567; affd., 167 N. Y. 607.) During the dispute concerning the rate and its payment, two courses were open to the defendants. One to cancel the policy and return the unearned premium; the other to proceed by suit or otherwise to collect the premiums against which, on defendants’ theory of the oral modification, the plaintiff had no defense. . They adopted neither, but elected to temporize with the matter until the fire occurred. Under the facts and well
The theory of conditional delivery now argued by respondents appears for the first time on this appeal. It was not considered nor was the case decided upon that ground at the trial. There was an oral condition or agreement that a new rate should be substituted at a later date, but no restricted delivery. The policy was in effect as valid insurance. (Grannis v. Stevens, 216 N. Y. 583.) We do not need to speculate on what the legal effect of the agreement on a new future rate might have been had the plaintiff failed to accept the slip, and if he had not in legal effect adopted the modification of the contract. (See St. Regis Paper Co. v. Hubbs & Hastings P. Co., 235 N. Y. 30.)
The judgments should be reversed on the law and a new trial granted, with costs to the appellant to abide the event.
Van Kirk, P. J., Hinman, Hill and Hasbrouck, JJ., concur.
Judgments reversed on the law, and a new trial granted, with costs in one action to the appellant to abide the event.