
    Broadway Realty Company, Respondent, v. Lawyers Title Insurance and Trust Company, Appellant, Impleaded with United States Mortgage and Trust Company, as Trustee under the Mortgage of The Broadway Realty Company, Dated July 25, 1896, Respondent.
    First Department,
    March 17, 1916.
    Insurance —title insurance — description of lands by metes and bounds — erection of encroachment exceeding boundaries covered by policy — when insurer not liable — defects caused by acts of assured.
    Where a policy of title insurance described the boundaries of the lands which did not cover any portion of the adjoining street and stated that the title intended to be insured was that on which a building now stands, as shown by the annexed survey, and the latter did not show any encroachment upon the street, and the policy further excepted liability for any “ defects, objections, liens or incumbrances created by the
    
      act or with the privity of the assured,” the latter cannot recover damages sustained by reason of being compelled to remove a portion of a building subsequently erected which encroached upon the public street.
    
      It seems, that the exception as to defects, etc., created by the act of the assured covered all defects caused by the assured, either before or after the issuance of the policy.
    Appeal by the defendant, Lawyers Title Insurance and Trust Company, from a judgment of the Supreme Court in favor of the respondents, entered in the office of the clerk of the county of New York on the 5th day of June, 1915, upon the verdict of a jury rendered by direction of the court, and also from an order entered in said clerk’s office on the éth day of June, 1915, denying appellant’s motion for a new trial made upon the minutes.
    
      P. 8. Dean, for the appellant.
    
      Arthur H. Masten, for the plaintiff, respondent.
   Smith, J.:

This action was brought to recover upon a policy of title insurance issued by the appellant. On July 25, 1896, plaintiff purchased of one Richmond certain premises fronting on Bowling Green, between Broadway and Greenwich street, giving a mortgage to a trust company to secure bonds issued. By this mortgage plaintiff was required to insure the title and on December 16, 1896, procured the policy in suit. This policy seems to have been the usual title insurance policy wherein the appellant agreed upon consideration -to keep harmless and indemnify the plaintiff and its assignees against all loss or damage not exceeding one million eight hundred thousand dollars which the said assured shall sustain by reason of defects or unmarketability of the title of the assured to the estate, mortgage or interest described in Schedule £ A ’ hereto annexed or because of liens or encumbrances charging the same at the date of this policy excepting judgments against the assured and estates, defects, objections, liens or encumbrances created by the act or with the privity of the assured * *

In Schedule ££ A” annexed to the policy is a description of the property, the title of which was intended to be insured. That description is specific and does not cover any land within the limits of Broadway. At the end of that description is inserted the phrase, and also the building now being erected on said premises known as the Bowling Oreen offices.” In the next paragraph of the policy it is stated: The land the title to which is hereby intended to be insured being that on which said building now stands as shown on the survey of Francis W. Ford dated February 27, 1897, a duplicate of which survey is hereto annexed.”

The facts upon which the appellant’s liability is here claimed are that at the time of the issuance of the policy the building upon the premises described was so erected that the approach thereto extended about one foot beyond the line of the land described into Broadway. The plaintiff was compelled to take off so much of the approach as was situated upon Broadway at a cost of about $16,000 and has recovered therefor against the appellant as for a defect existing at the time that the policy was issued and against which the appellant has insured.

There are three objections to this judgment.

(1) The insurance is of title to lands specifically described which confessedly do not include any land in Broadway, and the insurance of the title to the building erected thereon must be construed as the insurance of the title of so much of the- building as stands -upon the land thus specifically described. This would seem to be a matter of first impression as there is. no evidence of any knowledge on behalf of the appellant that the building was not wholly upon the land described, and as the title to the building which is insured must of necessity rest upon the title to the land upon which it stands, it is fair to presume that the insurance of the title to the building was upon the assumption and to the extent only that that building rested wholly upon land specifically described. Further, this interpretation would seem to be supported by the case of Griffiths v. Morrison (106 N. Y. 165).

(2) The provision that the land, the title to which is hereby intended to be insured, being that on which said building now stands as shown by the survey annexed, makes the survey a part of the contract and upon that survey the building appears to be wholly within the metes and bounds of the land described, and in no way to encroach upon Broadway.

(3) In the policy specific exception is made of any “defects, objections, liens or encumbrances created by the act or with the privity of the assured.”

It appears that this building was erected by the assured and so much of the approach of the building as extended into Broadway was put there by the assured or at least by persons in privity with the assured. Mr. Peabody, the secretary and treasurer of the assured, testified that it was his custom to visit the building twice a week during its entire construction; that it was being constructed in 1896 and that the construction was substantially completed upon December 15, 1896, the date of the issuance of the policy. The exception in the policy is not limited to defects caused by the assured after the issuance of the policy but would seem to cover all defects caused by the assured either before or after its issuance.

The validity or effect of title insurance issued after the purchase of property is not free from doubt. (Empire Development Co. v. Title Guarantee & Trust Co., 171 App. Div. 116; Trenton Potteries Co. v. Title Guarantee & Trust Co., 176 N. Y. 65.) In the view which I have taken of the proper interpretation of this contract, the determination of this question becomes unnecessary. Upon the purchase of the property it was agreed that $1,800,000 should be paid by bonds secured by a mortgage thereupon. The purchaser was required to obtain title insurance. Under the reasoning in the Trenton Potteries Co. Case (supra) this insurance policy might well be dated back to the time of the purchase of the property. At that time this building was not erected and it was only substantially erected upon December fifteenth when the policy was in fact issued. The policy refers to the building as “now being erected.” While it appears that these encroachments upon Broadway existed upon December fifteenth when the policy was in fact issued, it does not appear that they existed when the property was purchased, and in fact the inference is to the contrary, and if this policy is dated back to the time when the property was purchased it clearly would not cover this encroachment thereafter built.

It would seem to follow that the judgment and order refusing to set aside the verdict should he reversed, with costs, and the complaint dismissed, with costs'.

Clarke, P. J., Laughlikt, Scott and Page, JJ., concurred:

Judgment and order reversed, with costs, and complaint dismissed, with costs. Order to be settled on notice.  