Hukle v. Great American Insurance

Martin, J.

On August 25, 1928, a fire damaged the premises known as Nos. 723-727 East One Hundred and Thirty-fifth street, county of Bronx, city of New York, which premises were covered by three policies of fire insurance issued by the respective defendants.

The plaintiff now seeks to recover from the insurance companies the loss sustained by the fire amounting to $1,142.28. The defendants disclaim all liability on the sole ground that the premises were unoccupied for a period of about four months prior to. the fire. The question of vacancy is not in the case, the parties having stipulated that at no time prior to the fire were the premises vacant. The building was owned by Mary Hukle, the plaintiff’s assignor, and was equipped as a machine shop and leased to a tenant. After the tenant had ceased to occupy the building, it remained unoccupied and unused as a factory and machine shop for a period of about four months, when the fire occurred, resulting in the claim made upon the defendants for the proportionate amount of the fire insurance carried by plaintiff’s assignor.

*478Each of the said policies of insurance contained the standard provision in the body of the form as follows: “ Unless otherwise provided by agreement in writing added hereto, this Company shall not be liable for loss or damage occurring * * * (f) while a

described building, whether intended for occupancy by owner or tenant, is vacant or unoccupied beyond a period of ten days.”

The tenant of these premises was in possession and continued to maintain control and supervise the property under its lease and also continued to pay rent for the premises to Mary Hulde. The premises were not vacant from the 1st day of May, 1928, down to and including the 25th day of August, 1928, nor at any other time, but during the said period from. May 1, 1928, to August 25, 1928, the building was unoccupied as an active manufacturing establishment.

The defendants contend that they are not liable because the policy contained a clause that unless otherwise provided ” by agreement in writing added thereto, the company shall not be liable for loss or damage if the building is unoccupied beyond a period of ten days. Such a construction overlooks the fact that it was otherwise provided arid that attached to this policy was what is commonly known as a “ rider,” in which it was otherwise provided that the premises might remain unoccupied for a portion of the year. It is now well settled that a rider attached to the face of the poHcy is a part of the contract. (Hopkins v. Conn. Gen. Life Ins. Co., 225 N. Y. 76; Scharles v. Hubbard, Jr. & Co., 74 Misc. 72; Hardy v. Lancashire Ins. Co., 166 Mass. 210; Quinn v. Fire Association of Philadelphia, 180 id. 560; Benedict v. Ocean Insurance Co., 31 N. Y. 389.)

In the case of Davern v. American M. L. Ins. Co. (241 N. Y. 318) the Court of Appeals held that a rider to a poHcy of indemnity insurance providing that in consideration of an additional premium “ and subject to the terms and conditions of the poHcy to which this indorsement is attached,” the defendant would indemnify the plaintiff against loss or damage to his own automobile, merely enlarged the scope of the insurance or indemnity provided by the policy; that it was a part of the same contract, subject to the same conditions, based upon the same appheation and the declarations made therein were incorporated by reference into the rider, and that misrepresentations, therefore, made in the appheation for the indemnity poHcy would furnish defense to an action to recover for damage insured against by the rider.

In Knowlton v. Patrons’ Androscoggin Mutual Fire Ins. Co. (100 Me. 481; 62 Atl. 289) it was held that the provisions of the standard poHcy relating to the vacancy of the premises was *479modified by the separate slip or rider attached to the policy. In that case it was further held that the term rider ” is applied to an additional paper attached to and forming a part of an insurance policy.

The rider in the case before the court was in writing and as frequently occurs when parties enter into a contract of insurance it was found that the period of unoccupancy permitted in the body of the policies was too short and should be extended. The rider attached to the policy was for the purpose of extending the period during which the premises might remain unoccupied. It was to enlarge the rights of the insured under the policy so that the property might be covered by insurance though it was unoccupied for a longer period than ten days.

The policy clearly contemplated that it might be necessary to enlarge the time that the building might remain unoccupied beyond the period of ten days. This is emphasized by the phraseology of the clause with reference to this subject. It is there stated that “ unless otherwise provided by agreement in writing ” the period shall be but ten days. If it was otherwise provided in writing, the period of unoccupancy would be in accordance therewith.

It is impossible to read the rider in question without coming to the conclusion that it was intended thereby to grant some privilege, for it says “ privileged to remain unoccupied a portion of each year.” If this rider is to be read in the ordinary manner, it means that an additional privilege was given that the building might remain unoccupied for a portion of each year and in case of fire the insurer would be hable. If this rider were not to be read as contended by the plaintiff it would serve no purpose whatever. The defendants contend that it means privileged to remain unoccupied for ten days of each year. Without any rider the policy gave the right to permit the premises to remain unoccupied for a period of ten days. It was, therefore, unnecessary to annex a rider to accomplish the same result. The purpose and intent of a rider in many instances is to grant additional rights or privileges to the insured, which rights or privileges are either not granted by the original policy or are limited and insufficient. In order to make such rights and privileges conform to the wishes of the insured, that purpose is accomplished by annexing to the policy a rider such as is annexed to the policies of insurance in question.

We have reached the conclusion that a proper construction of these policies requires us to hold the defendants liable for the amount agreed upon by the parties as the share these policies must bear toward reimbursing the plaintiff for the loss sustained by the fire.

*480The plaintiff should, therefore, have judgment against the defendant Great American Insurance Company for the sum of $241.89, with interest from October 22, 1928, and against the defendant The Phoenix Insurance Company of Hartford, Connecticut, for the sum of $497.23, with interest from said date, and against the defendant Springfield Fire and Marine Insurance Company of Springfield, Massachusetts, for the sum of $403.16, with interest from said date, but without costs.

Dowling, P. J., and Finch, J., concur; McAvoy and O’Malley, JJ., dissent.