
    Harriet S. Chamberlain, Resp’t, v. The Insurance Company of North America, App’lt.
    
      (Supreme Court, General Term, Fifth Department,
    
    
      Filed January 11, 1889)
    
    1. Insurance (fire) policy—Breach of conditions.
    A policy of insurance contained a clause providing that the entry of a decree of foreclosure, or the taking into possession or custody of the property by virtue of legal process or judicial decree, or the acquiring by a. third party of an insurable interest, or any. change whatever in title or right of possession shall causes an immediate termination of the policy. Held, that a decree of foreclosure entered prior to the contract of insurance did not come within the terms of the condition.
    2. Same—Sale under judgment recovered prior to contract of insurance—Code Civil Pro., § 1440.
    Where property is sold under an execution issued on a judgment recovered prior to the contract of insurance, Held, that plaintiff’s title was-not divested by the sale, at least so long as her right of redemption continued, and that she had an insurable interest when the policy was made and at the time of the loss.
    3. Same—Judgment recovered after issuance of policy, lien of—No. encumbrance.
    A judgment recovered after the policy was issued was not within the meaning of the term “encumbrance,” as used in the policy. It .was a general lien upon any real property in the county to which the plaintiff then had title, and it produced to the creditor no insurable interest in the land.
    Appeal from judgment entered on report of referee against the defendant.
    
      Worthington Frothingham, for app’lt; Geo. D. Forsyth, for resp’t.
   Bradley, J.

The action was brought upon a policy, by which the defendant insured the plaintiff against loss by fire, $2,000, on her dwelling house, and $500 on her furniture, etc., in it, for the term of three years from January 20, 1887. The house was destroyed, and its contents injured by fire July 4, 1887. The plaintiff recovered. The question presented is, whether there was a breach of any of the conditions of the policy, on the observance of which by the plaintiff, the liability of the defendant was dependent. It provided that “ The passing or entry of a decree of foreclosure pr sale, under a deed of trust; or the taking into possession or custody of the property herein described, or any part thereof, by virtue of legal process or judical decree; or a dispute as to the title of the property, in any proceeding in law or equity; or the acquiring by a third party, of an insurable interest in the property, or any part thereof, by virtue of a mortgage or deed of trust, executed by the assured, subsequent to the date hereof; or a voluntary assignment of the property for the benefit of creditors, ■or proceedings under any bankrupt or insolvent law, divesting the assured of the absolute right of controlling and disposing of the property; or any change whatever, in title or right of possession not herein specified, succussion by reason of the death of the assured excepted, shall, each and all, cause the immediate termination of this policy, unless otherwise provided by special agreement clearly' expressed in the body of the policy.”

. In April, 1881, the plaintiff made to James Wood, a mortgage on the premises, to secure the payment of five hundred dollars and interest in three years, and on December 21, 1886, a decree of foreclosure of this mortgage in favor of Wood, was entered in the clerk’s office of the county in which the property was situated, directing a sale,, and out of the proceeds payment to him of $673.33, besides costs. The contention on the part of. the defense is, that the entry of such decree came within the condition of the policy and terminated it.

This would have been the effect of the entry of such a decree after the date of the policy. But it was entered be-: fore that time. And the apparent import and fair construction of the provision, in that respect, of the policy, are such as to embrace within it the entry of a decree subsequently and not prior to the making of the contract of insurance. And, therefore, the decree in question did not come within the terms of the condition.

In Titus v. Glens Falls Ins. Co. (81 N. Y., 410), the decree was entered after the policy there was made. By the terms of the policy' in the present case the loss (if any) was payable to Wood as his mortgage interest should appear. His. mortgage interest was represented by the decree. It does not appear that any misrepresentation in,, that respect was made by the assured to the defendant.

• In April, 1886, William Hamilton recovered a judgment against the plaintiff for $336.81, and, by virtue of an execution issued upon it, the premises were, in October, 1886, sold, bid in by him, and a sheriff’s certificate of sale made to Hamilton and recorded in the office of the clerk of such county. This sale was before the policy was issued, and at the time of the fire the period for redemption by the plaintiff had not expired. The plaintiff’s title was not divested by the sale, at least, so long as her right of redemption continued (Code Civ. Pro., § 1440). And she had an insurable interest in the property when the policy was made and at the time of the loss. Cone v. Niagara Falls Ins. Co., 60 N. Y., 619.

There is no finding that there was a failure to redeem, or that title derived from such sale became vested in another. The insurable interest of the purchaser resulting from the sale having been acquired solely by such purchase before the policy was made, did not come within the terms of the conditions in respect either tó time when or the manner in which it was acquired. As there is no case containing evidence, the facts here for consideration are such only as are found by the referee.

The policy is not set out in the record, and the consideration of questions raised upon its provisions are necessarily confined to the clauses that are represented by the referee’s findings. The provision that “if the assured shall,in such application, survey or plan, or in. any statement or description, written or oral, make any misrepresentation as to the character, condition, situation, value or ownership of such property, or as to the occupancy of the premises, or the exposure thereto, or any other misrepresentation whatever, or fail to make known every fact material to the risk, including the amount of incumbrance on said property, if any, this policy shall be void,” apparently had reference to the application for the insurance, and to what might take place at or preceding the time of making the policy and leading to its issue.

There is no finding that any application or statement or misrepresentation was in any form made before or at the time the policy was' issued. But further consideration will be given to those conditions without such limitation of their application and effect. It may be observed that no provision of the policy appears, requiring proofs of loss or stating how they should be made, or what they should contain. The referee upon that subject has found that “proofs of loss were served on the defendant as required by the policy,” and that in them “it was stated that the property belonged to the plaintiff, * * * and there was an incumbrance on said property amounting to the sum of $1,175.”

The proofs were signed and sworn to by the plaintiff. And the policy contained the provision that “An attempt to defraud the company in the matter of a claim for loss by false swearing or otherwise shall cause forfeiture or this policy and all claims for loss hereunder.”

In view of these several provisions of the policy and of the statement as made in the proofs of loss of amount of incumbrance, it is contended that the plaintiff was chargeable with misrepresentation, and writh concealment of facts material to the risk, also with an attempt by false swearing to defraud the company, and that as the consequence her claim under the policy was forfeited.

It does not appear that any fact material to the risk, including incumbrance, was concealed from the defendant at. the time the policy issued, or that the company was not. then in all those respects fully advised.

The facts are such only as the referee has found, and the sole question is whether they support his conclusions of law. Code Civ. Pro., § 998; Stoddard v. Whiting, 46 N. Y., 627.

The referee found that at the time of issuing the policy, and of the fire, the plaintiff was owner of the premises subject to the incumbrance or liens, wrhich he had also found. They were the mortgage upon which the decree of foreclosure was entered, the judgment, by virtue of the execution issued, on which the sale was made as before mentioned, and another mortgage of $600, made in 1880, to Hamilton.

Also a judgment recovered by Wood against the plaintiff in June, 1887, for' $236.74. It may be assumed upon the finding that at the time the policy was issued all of these liens except the last mentioned judgment existed, and it may perhaps be inferred from it, that the amount remained the same, with such judgment added, at the time of the fire. But it is not seen how it can be assumed, or as matter of law held that the defendant was not advised at the time of making the policy of the incumbrances then upon the premises, or that the plaintiff was chargeable with misrepresentation. And inasmuch as it does not appeár that any provision of the policy required, in the proofs of loss, any statement of the encumbrance, it cannot as matter of law be held that the statement in them of the-amount as such, less than that of the encumbrance then existing, was an attempt to defraud the company by false-swearing.

Forfeiture must depend upon breach of an express condition of the policy, and in view of such consequences, provisions of that character are not extended by construction beyond what their terms clearly import. Hitchcock v. North Western Ins Co., 26 N. Y., 68-69; Griffey v. N. Y. Cen. Ins. Co., 100 N. Y., 417.

. The Wood judgment recovered after the policy was issued, was not, we think, within the meaning of the term encumbrance as used in the policy. It was but a general lien upon any real property in the county to which the plaintiff then had title, and it produced to the creditor no-insurable interest in the land. Owen v. Farmers' Joint Stock Ins. Co., 57 Barb , 518; Walton v. Hargroves, 42 Miss., 18; 97 Am. Dec., 429; Grevemeyer v. Southern Mut. Fire Ins. Co., 62 Penn. St. 340; 1 Am. R., 420.

The referee also found that on the day of the service of the proofs of loss on the defendant, its general manager notified the plaintiff that the company disclaimed any liability for the loss because the policy became null and void prior to the time of the fire, within conditions first above mentioned, and that the proofs of loss were on file subject to the plaintiff’s order. <

As the defendant then denied its liability and put its refusal to pay the plaintiff’s claim upon such specific ground, the matter of proofs of loss became unimpoi’tant, and may properly have been deemed as waived. And if those furnished were in any respect erroneous, and the plaintiff may otherwise have discovered and sought to correct the error in them, she was not, in view of such waiver, required to do so for the protection of her claim. Brink v. Hanover Fire Ins. Co., 80 N. Y., 108; Batchelor v. People's Ins. Co., 40 Conn., 56; McBride v. Republic Fire Ins. Co., 30 Wis., 562.

The question whether Wood should have been joined as a party requires no consideration, because his non-joinder as such, is not pleaded.

The referee’s conclusions of law seem to have been warranted by the facts found by him.

The judgment should be affirmed.

Barker, P. J., Haight and Dwight, JJ., concur.  