
    Johanna Driscoll, App’lt, v. The German American Insurance Company of New York, Resp’t.
    
      (Supreme Court, General Term, Third Department,
    
    
      Filed December, 1893.)
    
    1. Insurance—Fere.
    An insurance company cannot, after receiving the premium and issuing a policy with knowledge, at the time of such issue, of the existence of a fact which would work a forfeiture, claim, on the happening of a loss, a forfeiture on such ground.
    3. Same—Agency.
    The knowledge of such fact by the agent, who issued the policy, is the knowledge of the company, and it is error to reject such proof, when ofeered by the insured to rebut a forfeiture.
    3. Same—Warranty.
    Where the application and policy state that the building was used as a lodge, such language cannot, even if true in fact, be construed into a warranty that occupancy for that purpose was to be continuous.
    4. Same.
    A change of occupancy will not avoid a policy, unless there is a substantial increase of risk.
    
      Appeal from a judgment entered upon a non-suit at the circuit.
    
      J. F. & J. O. Van JEtten {J. IS. Van JEtten, of counsel), for app’lt; William D. Murray, for resp’t.
   Mayham, P. J.

The respondent, through its general agent, who was authorized to fill up and issue policies signed in blank by the president and secretary of the respondent, issued its policy to Dennis Driscoll for one year from January 3, 1891, to January ■3, 1892, for a premium of $8.75 on an amount of $700 on building described in the policy as follows: “ On his one-story frame, shingle roof building, 30x50, occupied as a lodge room, situate, detached at Hickory Bush in the town of Rosendale, bf. Y., payable in case of loss to Catherine Cummings, mortgagee, as her interest may appear. This policy was endorsed as follows :

January 6, 1891.

“ This company hereby agrees to recognize Catherine Cummings as sole owner of insured property, loss, if any, payable to her. Chas. B. Westbrook, Agent.”

February 21, 1891.

“ The title to insured property is now vested in Johanna Driscoll, as owner. Loss, if any, payable to her.

“ Chas. B. Westbrook, Agent.”

At the time of issuing this policy the hall was occupied one night each week as a lodge room for Knights of Labor.

The proof shows that the building was also used as a place for Sunday schools and religious services on Sundays, and for shows, dancing parties and other public entertainments week days when not occupied by the Knights of Labor on the nights of their meetings. One key was always kept by the plaintiff, who was her own janitor of the building. Kept it swept, and in order for use, hired it to parties and received the income for its use. •

On the trial the witness who negotiated with the defendant's agent and procured the policy, was asked by the plaintiff this question : “ Did you state to Chas. B. Westbrook, the agent who issued the policy, how the building was occupied at the time the policy was issued.” This question was objected to, and the objection was sustained, and the plaintiff excepted.

This question was later in the trial followed by an offer by the plaintiff as follows:

“I offer to show that the agent who issued the policy was informed of the way that this building was used in all its details, that it was used for church purposes, Sabbath schools, for dances and other public entertainments, and that the plaintiff was in the continual occupation of the property herself. ” Defendant objected. Objection sustained. Plaintiff excepted.

We are inclined to the opinion that the exclusion of this offered evidence was error. The evidence offered did not tend to prove an unauthorized change in the condition of the policy by the agent. Its object and effect was to prove that the defendant had knowledge at the time of taking the risk, of the manner in which this building was occupied, and the purpose for which it was constructed and used; and while it was, as set out in the application, used as a lodge room, it was also to the knowledge of the company used by the owner for the purpose of a hall for public meetings of various kinds, and for that purpose was in her possession, and under her control, and the proof shows that it continued so to be used and controlled, up to the time of its destruction by fire, except that the Knights of Labor had ceased using it for one night each week, as they were doing at the time the policy was issued.

With this knowledge directly imputable to the respondent it did not lie with them to set up the removal of the lodge as a violation of the policy of insurance, but rather such knowledge worked a waiver by it of the condition upon which it now seeks-to avoid liability. It would be little less than a fraud upon the assured to allow an insurance company to receive the premium and issue a policy with knowledge of the existence of a fact at the time of such issue upon which, they could claim on the happening of a loss against which it assumes to insure, a forfeiture of the policy.

In Forward v. Continental Ins. Co., 21 N. Y. Supp., 665; 49 St. Rep., 867, the court in discussing the principle involved in the the question and offer above quoted, uses this language: “The-

question is not whether the plaintiff can avail himself of an unauthorized waiver by the defendant’s agent of any provision contained in the policy. It is rather whether the knowledge of the existence of the chattel mortgage brought home to the company in this manner through its agent, who procured the policy, effects a waiver of any ground set up for avoiding liability. The recent cases in the court of appeals seem to have settled this question in favor of the contention in behalf of the plaintiff, namely, Berry v. Insurance Co., 132 N. Y., 49; 43 St. Rep., 400; Cross v. Insurance Co., 132 N. Y., 133; 43 St. Rep., 482.

In Berry v. American Central Ins. Co., 132 N. Y., 49; 43 St. Rep., 400, the assured informed the agent who issued the policy, that his son had bought the property of him; that he was to have it as a home as long as he lived, and was to insure it, and the court held that this statement fairly gave notice that the plaintiff was not the owner.

In Cross v. National Ins. Co., 132 N. Y., 133; 43 St. Rep., 482, the defendant’s agent who issued the policy, knew that the premises were vacant, and unoccupied, having personal knowledge of that fact, and had notice of the plaintiff’s title. The policy provided that it should be void if the insured were not the sole and unconditional owner, or if the building were not on the ground owned by him in fee, or if they should remain vacant and unoccupied, and it was held that the plaintiff had an insurable interest, and that the condition as to the plaintiff’s title, and premises remaining vacant, and unoccupied, must be deemed to have been waived.”

Within these cases and many others that might be cited we think it must be held that the knowledge of the agent was that of the company, and that it - was competent for the plaintiff to prove that knowledge, and the exclusion of evidence offered for that purpose was error.

Again, the language of the policy and application, that the. building was used as a lodge, while it was true in fact, cannot, we think, be construed into a warranty that occupancy for that particular purpose was to be continuous. O’Neil v. Buffalo Fire Ins. Co., 3 N. Y., 122; Smith v. Mechanics and Traders’ Ins. Co., 32 N. Y., 399; Blood v. Howard Fire Ins. Co., 12 Cush., 472. The policy itself, excepted from the ground of forfeiture “ exchange of occupants without increased hazard,” and if the question of increased hazard existed in the case, it was clearly one for the jury. Walradt v. Phœnix Ins. Co., 136 N. Y., 375 ; 49 St. Rep., 666. A change of occupancy will not avoid a policy unless there is a substantial increase of risk. Miller v. Oswego & Onondaga Ins. Co., 18 Hun, 525.

We are also inclined to the opinion that there was sufficient evidence upon the question of occupancy to require the submission of that point to the jury, and that it was error to deny plaintiff’s motion to submit the question to the jury.

The judgment should be reversed, and a new trial ordered, costs to abide the event.

Putnam, J., concurs; Herrick, J., concurs in result.  