
    Edward R. C. Clarkson et al., Appl’ts, v. Western Assurance Company, Resp’t.
    
      (Supreme Court, General Term, Fifth Department,
    
    
      Filed December 28, 1895.)
    
    1. Verdict—Subject to opinion op court.
    Where a verdict is ordered subject to the opinion of the court without qualification, exceptions cannot be heard; and the only question before the general term is which party is entitled to final judgment on the unconlroverted fact. In such case, it is improper to direct a verdict subject to the opinion of the court, where exceptions have been taken on the trial or the facts are controverted.
    2. Same.
    Upon a simple motion for a now trial, upon exceptions to be heard in the first instance at general term, the court has only to consider whether there was any question for the jury, and whether that question is brought before it by the exception finally taken by the plaintiff to the direction of a verdict in favor of the defendant.
    S. Insurance—Policy.
    Where an insurance company refuses to deliver the policy of insurance and resists payment of the loss on the ground that no obligation to insure was entered into, it cannot take advantage of a limitation clause that might ■ have been inserted in the policy had it been delivered.
    
      4. Same—Issuance of policy.
    The company, in an action to compel an insurance company to execute a policy after a loss in accordance with an accepted application, cannot show that, under tliis form of policy, the insured’s claim for insurance money would be barred by limitation.
    5. Same—Action.
    A party may recover on an oral contract to issue a Are insurance policy.
    6. Same—Forfeiture—Reinstatement.
    The acceptance by an agent of premiums on a forfeited policy does not reinstate the policy, unless such agent was authorized to receive the money or to waive the forfeiture. r~-
    Appeal from an order, setting aside a verdict directed for defendant, subject to the opinion of the general term, and ordering a new trial.
    Benjamin H. Williams, for pl’ffs ; George Clinton, for deft.
   WARD, J.

—The complaint in this action alleged, in substance, that on the 9th day of December, 1892, Melville F. Brown and Charles H. Blakesly were the owners of the steamer Northerner, and Thomas Maytham, Edward 0. Maytbam, Lambert W. Drake, and John Kelderhouse were mortgagees, holding a mortgage thereon, and that, on said last-named day, the said mortgagees applied to the defendant to insure $6,000 on said steamer against loss by fire for the term of four months from that date, loss, if any, payable to said mortgagees; that the defendant accepted the application, and on the 12th day of December, 1892, before any policy was delivered, the steamer burned and was totally destroyed at L’Anse, Mich.; that afterwards the defendant was' tendered the premium, but refused to deliver the policy or pay the amount insured. The answer, among other things, denied the allegations in the complaint, and alleged that in the application for insurance it was represented and warranted that said steamer lay at L’Anse, Mich., arid that she was properly moored and laid up for the winter, which was not true; that the' steamer had on hoard petroleum; that the risk was extra hazardous, which was unknown to the defendant It further alleged that the policy which would have been issued by the defendant would have contained, among othér provisions, a clause to the effect that no suit or action on sucli policy for the recovery of any claim should be sustainable until after a full compliance by the insured with the requiiements set forth in the policy, nor unless commenced within twelve months after the fire; the relief demanded in the complaint was that the defendant deliver to the plaintiffs a policy of insurance in accordance with the agreement to insure, and that plaintiffs have judgment for tiie sum of $6,000, and intetest thereon from the 1st day of May, 1893. The action was not commenced until after the expiration of twelve months from the time of the fire. The policy was never delivered, nor was it produced upon the trial. No premium was in fact paid, but, by the custom of the defendant, such premiums were to he paid upon bill rendered for the premiium, and thus credit given to some- extent; and no point is made here because such premium was not paid previous to the fire. The plaintiffs were the owners of the cause of the action at the commencement of the action. At the conclusion of the plaintiffs’ evidence, the defendant moved for a nonsuit. The plaintiffs asked to go to the jury upon the questions in the case, and the trial judge stated that there were two exceptions in the case that had been taken by the plaintiffs as to the admission of evidence, and, if they were out of the way, he would make a disposition of the case by sending it to the general term, scbject to its opinion. These exceptions were waived by the plaintiffs’ attorney, and the learned trial judge proceeded to make a statement of the facts in the case, with a view of apprising the general term of the view the trial court had taken of the evidence, but expressly stating that the statement did not bind any one as to the facts, and then directed a verdict for the defendant, subject to the opinion of the court at general term, to which the plaintiffs excepted. The case is here, therefore, on this order of the trial court, burdened with the -exception last referred to; and the first question that presents itself is as to what disposition shall be made of the case, and upon what principle it shall be considered by the general term.

In Durant v. Abendroth, 69 N. Y. 148, 151, Rapallo, J., speaking for the court of appeals, says:

“This is not strictly, the case of a verdict subject to the opinion of the court, for at the time of directing the verdict for the plaintiff the court ordered the exceptions to be heard in the first instance at the general term. Where a verdict is ordered subject to the opinion of the court without qualification, exceptions cannot be heard; and the only question before the general term is, which party is entitled to final judgment on the uncontroverted facts? And for that reason it is improper to direct a verdict subject to the opinion of the court where exceptions have been taken on the trial of the facts are controverted.”

In Matson v. Insurance Co., 73 N. Y. 310, which was an action brought upon a policy of fire insurance, and the policy contained the provision, in substance, that the defendant should not be liable for a loss occasioned by the use of kerosene oil; and on the trial the defendant’s counsel asked for a nonsuit, on the ground that the0condition above mentioned was violated, and the policy thereby rendered void,—the court denied the motion, and directed a verdict for the plaintiff for the amount of the loss, subject to the opinion of the court at general term, to which defendant’s counsel duly excepted. The court (RAPALLO, J.), says at page 314:

“The case seems to have been considered by the-general term upon the assumption that the fire was occasioned by the use of kerosene, and to have been decided on the ground that, such use not having been habitual, the company was not exempt from liability. The facts stated in the case are not sufficient to show whether the loss was or was not thus occasioned, and therefore ife was not a proper case for a verdict, subject to the opinion of the court. To render the direction of such a verdict proper, all the facts necessary to enable the court to render a final judgments one way or the other must be conceded or established beyond controversy. The cáse as presented is deficient in this respect.”

The. court then proceeds to consider whether there were any questions for the jury, and held that there were in that case, and concludes:

“We are of opinion that there was a mistrial, and that the judgment must be reversed, and a new trial ordered.”

If we are to regard this case as coming to us withoot exception, and without any contest as to the facts, our duty then will simply be to pass upon the evidence in the place of the jury, and determine which party should recover in this action. If, on the other hand, this is simply a motion for a new trial, upon exceptions to be heard in the first instance at the general term, then we have only to consider whether there was any question for the jury, and whether that question is brought before us by the exception finally taken by the plaintiffs to the direction of a verdict in favor of the defendant. We have reached the conclusion that the exception brings before us the question of the plaintiff’s right' to. go to the jury upon the issues in the case, and that the plaintiffs are not concluded by their waiver of the exceptions taken upon the trial, or by the statement of facts of the trial court, which appears in the record before us. Indeed, the learned counsel for the defendant concedes in his points that, if there were any contested ■ questions of fact in the case upon which the plaintiffs, were entitled" to go to the jury, “the court had no power to direct a verdict subject to the opinion of the general term, and in which event there has been a mistrial, and a new trial must be ordered.” So that the question before us is whether we can sustain the plaintiffs’ contention that there was a question of fact for the jury, and, in considering that question, the evidence and the inferences therefrom must be considered as favorably to the plaintiffs as the case will warrant. This involves a somewhat careful review of the" evidence and the facts.

Edward T. Hitchcock, the agent of the • insured, testified that on the 9th of December, 1892, he applied to the agents of the defendant for an insurance upon the steamer of $50,000, and the agents agreed to take $40,000 fire insurance on her and distribute it among severel companies, of which they were agents, $6,000 of which was apportioned to the defendant; the agent of the insured stating that he received a telegram that morning from the owners of the vessel that she was laid up at L’Anse, and to procure fire insurance for her. The agent exhibited this telegram at the time to the defendant’s agents, and signed a blank application for fire insurance, in which the several companies that were to take the insurance were specified, and upon which the words, “ Northerner laid up at L’Anse,” were written in after it was signed by Hitchcock, but in his presence, and with his apparent consent. L’Anse is a point located on the north peninsula of Michigan, on this side of Keweenaw Point, about 700 miles from Buffalo. Upon this application a policy of insurance was prepared, but it was never delivered to the insured. The master of the Northerner, Peter A, McKinnon, testified that the vessel left Buffalo on December 2d, and on the morning of the 7th or 8th of December she got ashore on Keweenaw Point, and was relieved by throwing a part of her cargo,overboard, and she proceeded to L’Anse in a leaky condition. When there, the manager telegraphed to Capt. Ward, of Detroit, who had chartered the vessel for the season, and had control of her, telling him what had happened, and asked him for instructions. “ Ward telegraphed, 1 Better lay her up,’ and we obeyed instructions, commenced laying the Northerner up, got chai ns-out of the locker, cleaned up her some, turned the yawl boats upside down, put the tackles away, and the engineer commenced to disconnect her engine.” He thinks this was the 8th of December; that it took a day to do these things that were necessary to lay her up. That she continued to lie there until the 12th of December, when she caught fire, and was burned. One Capt. Rounds came there the night of the 9th, and assumed to represent the marine underwriters, and directed that the vessel be taken to Duluth. That, without change of position, the vessel was got into readiness to go to Duluth on the night of the 11th of December. Capt. Rounds had agreed to go with them, but at the last moment Rounds refused to go and abandoned the vessel, and, before the fire actually occurred, the master had again changed his mind, and concluded to remain at L’Anse, and to make a slight change of position of the boat, so as to give a more secure position for the winter.

Another witness for the plaintiffs testified that he was the mate of the vessel; that the 7th or 8th day of December she went to L’Anse, where they obtained orders to lay her up, which they proceeded to do, and took steps substantially as stated by the ■other witness for that purpose. On his cross-examination he says:

“ We commenced laying up on the 9th. It was in the morning. ■ We kept at work until the morning of the 10th, and then we began refitting her on the morning of the tenth. We had not completed laying her up when we began to refit her. She burned on Monday morning.. We started to fit her out on the Saturday morning before she burned. We had got the chains up, but we had not put them out. In laying a boat up there it is customary to use a chain to moor her, and that is why we got the chains up ready to put out.”

A telegram was produced from Charles H. Blakosly, one of the owners, dated at Rochester, December 6, 1892, to Eber Ward, the lessee at Detroit, which was as follows: “Where is Northerner ?

Lay her up. Cannot permit her to run further.” This telegram was received by Mr. Ward before he ordered the boat laid up as above stated. Mr. Blakesly testified that when he was advised that the Northerner had met with this disaster, and gone to L’Anse, he did not in any way consent to her proceeding further on the voyage..

John Kilderhouse testified that he had owned a great many vessels, had a good many vessels insured, and testified without objection as.an expert upon the subject, and stated ? ■

“I understand about a vessel being laid up. When you go to an insurance office to get fire insurance, that we are commencing to lay up. When we speak of a vessel being laid up, we simply mean that she has reached the port of safety, with the intention of staying there; and, in this matter of work to be done, some do more and some less. Some longer laying up than others, and some lay up better than others. Sometimes they keep the engine in readiness to work all winter. I have known one to have her boiler ready to work all winter long. I do not think they lay up generally alike; they vary.”

Edward Smith was sworn for the plaintiffs, was a vessel owner, had experience, and was asked as an expert, without objection :

“Q. When you apply for insurance, what do you understand by the term ‘laid up’ ? A. I usually govern myself to have winter fire insurance placed at the expiration of the marine. I don’t think everybody lays up alike. Some do more work than others. Everybody does not take out chains. They turn over their boats, unless they don’t mind much about taking care of their property. The engine is not often so it can be used during the winter, unless the vessel has been ashore, or something that 'required steam to pump her during the winter more than could be done by hand; then it might be kept; it would be cheaper. Seventy-five per cent, of the vessels have ship keepers living on board, and they have lamps, of course. Sometimes it takes several weeks to lay up a vessel.”

The defendant offered no evidence, but lays great stress upon the fact that after the arrival at L’Anse, and when the vessel was substantially laid up under the direction of Capt. Rounds, the master, without authority from the'owners or the lessee of the vessel, and against the express directions of the lessee (Mr. Ward), had concluded to go to Duluth, and had taken some steps to put the vessel in condition to start, but without actually starting or at all changing her position, when this intention was abandoned, and the original intention of remaining at L’Anse for the winter, and being laid up there, was resumed. .

The learned counsel for the defendant admits that, to justify the direction of a verdict, it must clearly appear that the vessel was not “laid up” at L’Anse, within the meaning of the insurance contract, and claims that, taking the whole evidence together, such is the only rational view to be taken of the evidence. In this we cannot concur. There was certainly some evidence to go to the jury upon the question as to whether the vessel was laid up at the point mentioned at the time the insurance was taken and the fire, occurred. It is clear that the vessel was lying in the harbor of' L’Anse, and the men upon the vessel were busy in fitting her for winter quarters at that point at the time the insurance contract was made (the 9th of December); that on the 12th of December, when the fire occurred, all intention of proceeding further on the voyage or leaving this port of safety had been abandoned, and nothing appears to have occurred in the interim to have increased the risk or endangered the vessel; and, without desiring.to express any opinion upon the1 weight of the evidence to influence the jury upon another trial, we are clear that there was evidence, or, at least, there could be drawn inferences from the evidence, taking it altogether, that the "vessel, within the spirit and purpose of the contract of insurance, was laid up at L’Anse, both at the time of the making of the contract and the time of the destruction of th© vessel.

As before said, the policy of insurance was not introduced in evidence. The counsel for the defendant makes several points upon the assumption that the assumed policy had been proved, and its conditions violated by the plaintiffs. It is difficult to see how such objections can be made, predicated upon a paper that is not in the case. A blank form of policy appears in the evdence, which the defendant seems to assume was the kind of policy that would have been issued if it had been filled up, executed, and delivered to the plaintiffs; and he makes the point, based upon a paragraph in the assumed policy, that, by the terms thereof, it was void if petroleum or any of its products of a greater inflammability than kerosene oil of the Unites States standard was kept, used or allowed on the vessel, and that it was the undisputed evidence of the master that there were in the neighborhood of 2,000 barrels of kerosene oil on the vessel, which was being carried as a part of her cargo. Assuming that this point is available under the circumstances, it is not well taken, because it did not appear from the evidence that the kerosene on board of this vessel was of greater inflammability than kerosené oil of the United States standard. Another point is that the assumed policy contained a special provision that “no suit or action on this policy for the recovery of any claim shall be sustained in any court of law or equity * ® * unless commenced within twelve months after the fire,” Assuming, again, that this point is available (there having been no policy proved), it is a sufficient answer to say that this action is not upon the policy. The defendant had refused to deliver a policy, and the plaintiffs were consequently obliged to bring this action to compel a delivery of the policy and payment of the claim. Where the insurance company refuses to deliver the policy of insurance, and resists payment of the loss, on the ground that no. obligation to insure was entered into, it cannot take advantage of a limitation clause that might have been inserted in the policy had one been delivered. Smith v. Insurance Co., 62 N. Y. 85 ; Shaw v. Insurance Co., 69 N. Y. 286 ; Tayloe v. Insurance Co., 9 How. 390 ; Hay v. Insurance Co., 77 N. Y. 235.

A further point is made by the defendant that the agent Hitchcock misrepresented the condition of the boat as being laid up at L’Anse, when it in fact was not so laid up. That was a question of fact for the jury, to be passed upon by it, and depends upon the fact to be found whether the boat was or was not laid up ate the port indicated. Hone ,of the objections last considered impressed the trial court if urged before it, as the verdictwas directed solely upon the ground that the boat was not laid up at the time of the contact of insurance and of the destruction by fire of th© vessel

While the plaintiffs demand equitable relief in this action, and it might well have been treated as one of equitable cognizance purely, the parties seem to have acted qpon the assumption that it was a proper case for the jury, and tin point is made here but what it was. It can be further treated as such, and a recovery can be had upon the parol contract of insurance, if the jury shall find with the plaintiffs. Insurance Co. v. Colt, 20 Wall. 560 ; Ellis v. Insurance Co., 50 N. Y. 402.

The verdict for the defendant should be set aside, and a new trial ordered, with costs to abide event.

All concur.  