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Salomon v. North British & Mercantile Ins. Co. of New York

Supreme Court of New York, Appellate Division

May 31, 1912

MORRIS SALOMON, Appellant,
v.
NORTH BRITISH AND MERCANTILE INSURANCE COMPANY OF NEW YORK, Respondent.

Page 729

APPEAL by the plaintiff, Morris Salomon, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York on the 30th day of December, 1911, upon the decision of the court, rendered after a trial at the New York Special Term, dismissing the complaint upon the merits.

COUNSEL

Jacob R. Schiff, for the appellant.

Leo Levy, for the respondent.

LAUGHLIN, J.:

The material facts are stated in the first point discussed in the opinion of Mr. Justice MCLAUGHLIN, but I am unable to agree with his view of the evidence with respect to the assignment of the plaintiff's interest to Greenberger and the reassignment thereof to the plaintiff, for no issue with respect thereto was presented by the pleadings, and the point was not

Page 730

taken upon the trial, and the assignment and reassignment are not printed in full in the record, doubtless for that reason, and, therefore, it must be assumed that the plaintiff assigned, not merely the bond and mortgage and his interest in the insurance policy, but his cause of action to have it reformed, for it so appears by his testimony, and also that the assignment was made merely for the purpose of bringing the action, and for the same reason it must be presumed that the reassignment was of the entire cause of action. On the other point, which was the only question litigated, I am of opinion that the plaintiff is entitled to have the policy reformed and to recover thereon. It must now be conceded that the liability of an insurance company to a mortgagee is quite different from its liability to the owner, and that the provisions of the policy with respect to presentation of proof of loss, and with respect to the short Statute of Limitations, do not apply to the mortgagee. ( Heilbrunn v. German Alliance Insurance Co., 140 A.D. 557; affd., 202 N.Y. 610.) If, therefore, the defendant did not intend to insure the mortgagee, of course the court could not reform the contract so as to make it liable to the mortgagee; but in the case at bar it clearly appears that before the bond and mortgage were assigned to the plaintiff the defendant had insured the interest of his assignors, the mortgagees, and it clearly appears by the indorsement, which the defendant made upon the policy when the same was forwarded by the plaintiff, after he obtained the assignment of the bond and mortgage, with a view to having his interest insured, erroneously described by his agents as owner, that the defendant, while changing the name of the owner, still continued the policy payable, as before, to the mortgagee. It is perfectly plain that the defendant, by this indorsement, intended to continue the insurance for the benefit of the mortgagee, but by the erroneous indorsement which it made upon the policy it left the policy payable to the former mortgagees, the plaintiff's assignors. It thus appears that the plaintiff intended to have his interest as mortgagee insured, and the defendant intended to continue to insure the interest which had been assigned to the plaintiff. The fact that the defendant was not informed of the assignment of the bond and mortgage does not, I think,

Page 731

preclude the plaintiff from having the policy reformed. His failure to inform the insurance company that he had become the assignee of the bond and mortgage, instead of the grantee of the premises, was through the inadvertence of his agents, but did not affect the risk or the rights of the defendant. It may be conceded that the defendant was led to believe that he was the owner, but it was not pre-judiced by that fact, for the real owner, whose name was on defendant's records as the owner before it made this change, duly presented proofs of loss within the time required by the contract.

The uncontroverted evidence, therefore, shows that there was a mutual mistake, and it is not essential, I think, to the right to the reformation of an instrument that the mistake on the part of each party shall be with respect to precisely the same facts. The essential fact was that the plaintiff intended to have his interest as mortgagee under this bond and mortgage insured, and the defendant intended to continue the insurance in favor of the mortgagee, but was erroneously informed that plaintiff had succeeded to the ownership of the legal title instead of the mortgage interest.

For these reasons I am of opinion that the judgment should be reversed and a new trial granted, with costs to appellant to abide the event.

MILLER and DOWLING, JJ., concurred; INGRAHAM, P. J., and ...


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