79 N.Y.S. 736 | N.Y. App. Div. | 1903
Lead Opinion
This action was brought to recover upon a policy of insurance issued by the defendant to the respondent Rosenstein, and containing a clause in favor of the other respondent, the Brock-port Loan & Building Association, as mortgagee. The defense urged upon the trial and upon this appeal was and is that said policy became invalidated through a violation of a clause therein contained respecting a change of title without notice to or consent by the company. The learned trial justice held that the evidence disclosed no such violation of said clause as invalidated said policy, and therefore rendered judgment in favor of plaintiffs. We think that he committed such error in so ruling as requires a reversal of the judgment appealed from. The clause contained in the policy which is material provides that “the entire policy shall be void if any change, other than by the death of the insured, should take place in the interest, title, or possession of the subject of insurance, whether by legal process or judgment, or by voluntary act of the insured, or otherwise.” The subject of the insurance was real property. After the policy was issued, without any notice to the defendant, the plaintiff and insured, Rosenstein and his wife executed to their son a warranty deed of the premises, which was thereafter delivered to him, and still later by the father duly placed upon record in the county cleric’s office. Thereafter the fire occurred which occasioned the loss in question. There was no dispute in the evidence concerning the execution of this transfer, and in regard to what took place in connection therewith. It seems that a judgment had been recovered against the plaintiff Rosenstein about io years before the execution of this deed. He desired to so place the real estate covered by the policy of insurance that the judgment could not be enforced against it. His son took counsel with an attorney, and, in accordance with advice received, had a deed prepared, which he took to his father, who thereafter executed the same, his wife joining in the
“Nothing was done except to execute and file a paper. There was no intention in fact to transfer the title, or vest any beneficial interest in the nominal vendee. * * * It was a mere paper transfer without consideration, and without delivery of possession, and, while it had the form, it had none of the legal elements, necessary, even between the parties, to constitute a valid contract of sale. In legal effect, it was * * * the same as an unexecuted gift.”
In the case at bar the property is real estate. All that was necessary to be done to accomplish an absolute and perfect change of title from the grantor to the grantee was done when the deed was duly executed and placed on record. An alteration in the possession of the property was, to say the least, no such essential element
When we come to the consideration of the respective clauses in the two cases claimed to have been violated, we find what seems to us to be a wide difference. As already stated, the clause in the Forward Case called for an absolute, unconditional ownership of the property by the insured, and, as already indicated, the .court found that such ownership existed. In this case the clause provides against a change in the “interest, title, or possession” of the subject of insurance. Those words, to our mind, are very comprehensive and explicit. They guard against a change in the interest of
We do not lose sight of the contention made by respondents that this deed was not intended eventually to be effective as between the father and the son, but that it was only executed for a qualified purpose; that the spirit and intention of the clause in the policy of insurance such as is under consideration here is to guard against any moral hazard involved in changed relations to the insured property, and that there is no such change here as supplies the basis for such a hazard. We are, however, uiiable to agree with this argument. The defendant had a right to say in its policy that the same should be invalidated by a change in the title, and, having done this, we think that upon the facts devéloped in this case it is entitled to insist that a violation has occurred. Further than that, however, we do not think that the transaction between the father and son was entirely free from those features which would entitle the defendant to insist that it had an equitable and meritorious right to object to the change in the situation brought about by the parties. We think that under the clause quoted it might fairly insist that it should not be held liable for property subject to a shifting and uncertain title, which at one time, for one purpose, would be claimed to be in one person, and at another time, for another purpose, would be claimed to be somewhere else. We certainly do not feel that there is any such lack of merit in the defendant’s defense in this case as should lead us to put a strained and unnatural construction upon the clause in order to relieve the insured from the difficulties created by him.
It is further urged that, so far as the loan association is concerned, it is harsh to deprive it, as a mortgagee, which took no part in the transfer, from the protection of the insurance. In support of this contention the learned counsel for the respondents calls our attention to a clause framed by the statutes of this state, which provides that the “insurance, as to the interest of the mortgagee only therein, shall not be invalidated by any act or neglect of the mortgagor or owner of the within-described property.” We think that this argument discloses its own weakness. The law provided a clause for the benefit of the mortgagee, which it might have insisted upon, and which would have amply protected it from the loss which it is now suffering. It failed and neglected to insist upon this clause, and to secure the protection afforded thereby, and this court is powerless to relieve it from the consequences of its omission. In accordance with these views, the judgment appealed from should be reversed, and a new trial granted, with costs to the appellant to abide event.
WILLIAMS and NASH, JJ., concur.
Dissenting Opinion
(dissenting). The action was commenced to recover the amount of the loss sustained by the plaintiffs by the destruction of a barn by fire, insured by a policy of insurance issued by the defendant, insuring the building alleged to be owned by the plaintiff Rosenstein against such loss. The loss, if any, was made payable to the plaintiff building association, as its interest might appear, it being the owner of a mortgage upon the premises. The policy was the standard policy, and contained the usual provision which provided that the policy should be void in case there should be any change in the ownership or interest in the property without the consent of the company indorsed thereon. The policy was issued on the 24th day of May, 1 goo. The barn was destroyed by fire on the 19th day of March, 1901. The amount of the loss is not in dispute. After the policy was issued, the plaintiff Rosenstein and his wife, without the knowledge ' or consent of the defendant, executed a warranty deed in the usual form, of the farm upon which the bam was situated, in which deed his son, Abraham Rosenstein, was named as grantee. The consideration expressed in the deed was $3,000. The deed was procured to be executed by Solomon Rosenstein through his son, and it was procured to be recorded in the office of the clerk of Orleans county on the 14th day of January, 1901, by the grantor, and since it was recorded it has-been in his possession. The learned trial court found that the deed was never delivered to the grantee, although he knew of its execution • that no part of the consideration was ever paid; that the grantor continued in possession of the premises after the deed was executed the same as before, and that it was not the intention of the parties- that any title to or interest in the farm should pass to the grantee by virtue of such deed; that it was made and recorded for the purpose of preventing the collection of a judgment which had been recovered by a creditor against the grantor, the father of the grantee, and for nq other purpose. The court also found that, notwithstanding the execution and recording of such deed, the plaintiff Solomon Rosenstein continued at all times to- be the owner of the farm in question and of the building insured. The facts upon which such findings were based were testified to by the grantee, and are not contradicted, the defendant having offered no evidence to rebut the same. The only defense urged is that, as matter of law,, the execution and recording of the deed in question rendered the policy void.
It seems to me that the decision in Forward v. Insurance Co., 142 N. Y. 382, 37 N. E. 615, 25 L. R. A. 637, is decisive of the case, and compels an affirmance of the judgment upon the facts found by the court. In that case the policy covered a store, stock of goods, and store fixtures, and the personal property was destroyed by fire. The policy contained'substantially the same provisions in relation to a change of title or interest as the policy in question. The owner e-xe
Again, we call attention to the fact that in the case at bar the learned trial court has found that such deed was never delivered by the plaintiff Solomon Rdsenstein, the grantor-.named therein, and was never accepted as such- by the grantee; that the consideration expressed in- said deed was-the. sum of $3,000, but in reality .there was no consideration whatever for said deed; that said deed was colorable only,-, and was- not intended to transfer the title to said premises. In the case of Barry v. Insurance Co., 110 N. Y. 1, 17 N. E. 405, it was held- that, where a policy of fire insurance, contained a condition- to the effect that a sale •or transfer of. the, property, or any change in the title, without the consent of the company, would- void, the policy, a deed of the property, -executed simply to secure a debt, was not within- the condition, and did not affect the policy. In the Forward Case, supra, Judge O’Brien, in writing the opinion of the court, said:
“When the- transfer or incumbrance is merely colorable or nominal', and not real or effective, the reasons that induced the stipulation do- not apply. Was there- any real sale or transfer of this property within the- meaning of the policy? Nothing was done except to execute and.file a paper. There was no intention, in fact, to. transfer the title, or vest, any beneficial interest in the nominal1 vendee. There was no debt to be enforced; No consideration passed, and the use and possession remained, unchanged. The filing of the paper added nothing to- its- validity. It was not a mortgage, nor intended- as a security for any debt.. It was a mere transfer, without consideration, and without delivery of possession; and, while it had the form, it had none of the legal elements; necessary, even between the parties, to constitute a valid-contract of sale. In legal- effect it was, I think, the same as an unexecuted gift. The worst that can be said of it is that it was intended to defraud*743 creditors, and, if that be true, the moral hazard, which was the basis of the condition of the policy, would still be absent, since the plaintiff’s interest in the property at the time of the insurance was, in fact, the same as before the same was executed.”
The part of the opinion of Judge O’Brien above quoted covers in all essentials the facts of the case at bar. As we have seen, and as the court found upon sufficient evidence, the grantor did not intend to convey, the grantee did not intend to receive a conveyance, the possession remained unchanged, and delivery of the deed was not in fact made with intent that it should convey title or interest.
In the case of Ten Eyck v. Whitbeck, 156 N. Y. 341, 50 N. E. 963, the court said:
“The delivery of a deed is essential to the transfer of title, and there can be no delivery without an acceptance by the grantee. The question of delivery, involving as it does acceptance, is always one of intention; and, where there is a conflict in the evidence, it becomes a question of fact to be determined by a jury. There must be both a delivery and acceptance with the intent of making the deed an effective conveyance. Jackson v. Phipps, 12 Johns. 418; Same v. Leek, 12 Wend. 105; Brackett v. Barney, 28 N. Y. 383, 340; McIlhargy v. Chambers, 117 N. Y. 532, 23 N. E. 561; Younge v. Guilbeau, 3 Wall. 641, 18 L. Ed. 262.”
Many other cases of like import might be cited, but it would seem that those referred to should be regarded as controlling upon the question presented by this appeal. Was there an intention to transfer or convey the title to the insured property ? The trial court, by its finding, has said no. Was there an intention on the part of the grantee to acquire by such deed any title to or interest in the premises ? The answer of the trial court is in the negative. Was there any delivery of the deed, or any intention to deliver it? Again the finding of the trial court is in the negative. The possession of the premises remained unchanged. No consideration was paid by the grantee for any transfer to him of the premises. It was simply a colorable transfer, made for the purpose of preventing the creditors of the grantor from recovering their indebtedness. Under those circumstances, and assuming those to be the facts, under the decisions referred to we think it cannot be held that the condition in the policy was violated, but, on the contrary, that the plaintiffs are entitled to recover. If the question had not been decided by the court of last resort, we might be quite willing to assent to the reasoning and logic of the majority of the court, as expressed in the prevailing opinion, but, as it seems to have been decided, we should yield to such decision.
It follows that the judgment should be affirmed, with costs.
SPRING, J., concurs.