McCormick v. Springfield Fire & Marine Ins. Co.
Before: McKinstry
Synopsis
Fibe Insubanoe—Insubance bt Factoe—Incobbect Statement as to Ownebshib — Estoppel.—The defendant insured against loss by fire a stock of goods, the property of a corporation in which the plaintiffs were stockholders. The plaintiffs held the goods as security for advances made to the corporation. The application of the plaintiffs described the property as their own. The policy referred to the application, and made it a part thereof, and the statements therein warranties, and provided that if the assured was not the sole, absolute, and unconditional owner of the property insured, and such interest were not truly stated in the policy, then the policy should . be void. Held, that the policy was invalid, and that the insurers were not estopped to deny its invalidity, because they did not assert it immediately after the loss, when they discovered the true nature of the plaintiffs’ interest.
McKinstry, J. The policy of insurance on which this action was brought contains the covenants:
“ If the assured is not the sole, absolute, and unconditional owner of the property insured, * * * and the interest of the assured be not truly stated in the policy, * * * then and in every such case the policy shall be void.
“ If an application * * * is referred to in this policy * * * such application * * shall be considered a part of this policy and a warranty by the assured; and if the assured, in a written or verbal application, makes any erroneous misrepresentation, * * * then and in every such case this policy shall be void.”
The plaintiffs’ application for the insurance was “ on their stock of manufactured manilla paper, while contained in the round brick warehouse in the rear of their paper-mill building,” etc.
The evidence showed that the insured property was the property of the “ Lick Paper Company,” a corporation; that the plaintiffs were stockholders of the Lick Paper Company to the extent of one-half of the capital stock, and that they held a power of attorney representing the other half; that plaintiff McCormick was president, and plaintiff Delanoy was secretary, of the corporation; that the plaintiffs were commission merchants, and sold the product of the corporation on a commission of five per cent., and that they held such product as security [363]for advances made by them to the corporation, which advances varied from time to time; and at the time of the loss they amounted to about $20,000.
And it further appeared that the corporation, at the time of the loss, was solvent, and plaintiffs had other security for their advances.
On this evidence the defendant moved for a nonsuit, on the ground that the evidence showed “ that plaintiffs were not the sole, or absolute, or unconditional owners of the property insured, and the nature of their interest did not appear either in their application for insurance nor in the policy itself.”
The court below erred in denying the motion for nonsuit.
The most that can be claimed on the part of the respondents is, that they were stockholders in the corporation that owned the insured property, and that they were also commission merchants, holding the property as security for advances.
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