Northeastern Shares Corp. v. International Insurance

Untermyer, J.

(dissenting). In May, 1930, one Emily M. Roller was indebted to the Chelsea Bank and Trust Company upon her bond secured by a mortgage on her dwelling located on the north side of the road leading from Purdy’s Station to Somers, Town of Somers.” In order to protect its interest as mortgagee, the bank instructed its insurance broker to insure this property against loss by fire. In doing so, however, it failed to transmit to the broker a description of the premises. The bank’s broker, by telephone, communicated to the agent of the defendant insurance company a description of the premises, as follows: “ situate on road leading to Summer Dwelling, Pleasantville off Bronx River Parkway, Town of Summer, County of Westchester, State of New York,” and the description in this form was incorporated in the policy. The error, if any, in the description, it would seem, is attributable to the fact that the bank’s broker took that description from a card in its office, which in turn corresponded to a description contained in an earlier policy of insurance issued by another company. In any event the evidence leaves no possible doubt that the defendant insurance company received the description from the agent of the bank and exactly in accordance with instructions so received inserted that description in the policy. There is no evidence that the insurance company was at all aware, or had reason to believe, that that *86description was not correct. Upon receipt of the policy by the bank it was filed, without examination of the description, with the other papers relating to the Emily M. Roller mortgage loan. It also appears that Pleasantville is sixteen miles distant from the town of Somers.

A fire having occurred at the premises owned by Emily M. Roller, this action was brought by an assignee of the bank, and has been successfully maintained, for the reformation of the policy by striking therefrom the words on road leading to Summer Dwelling, Pleasantville off Bronx River Parkway, Town of Summer,” and substituting the words “ on the north side of the road leading from Purdy’s Station to Somers, Town of Somers,” and for judgment against the defendant upon the policy as so reformed.

The findings disclose that the theory on which judgment in the plaintiff’s favor was rendered by the trial court was that the alleged erroneous description of the property was the result of a mutual mistake of fact, for it is manifest that the plaintiff is not entitled to succeed unless the mistake was common to both parties to the instrument. If the bank intended to insure a dwelling situated in one locality and the defendant intended to insure a dwelling situated elsewhere, then the minds of the parties never met and there was no contract to be rectified. (Salomon v. North British & M. Ins. Co., 215 N. Y. 214; Bryce v. Lorillard Fire Ins. Co., 55 id. 240.) The record here establishes beyond dispute that the defendant wrote the policy precisely as it had been instructed to do and that it never intended to insure any property except as described therein. It is true that the defendant intended to insure a dwelling belonging to Emily M. Roller and that Emily M. Roller owned no other dwelling. But the defendant intended to insure that dwelling only in the location specified in the policy. That location con•stituted a warranty on which the insurer was .entitled to rely. (American Surety Co. v. Patriotic Assurance Co., 242 N. Y. 54.) We cannot convert the defendant’s undertaking to insure premises owned by Emily M. Roller in a particular location into a contract of insurance of property differently located, even though the rate of insurance was the same, without doing violence to the defendant’s right to determine for itself the location of property which it would insure. (Mead v. Westchester Fire Ins. Co., 64 N. Y. 453.) To entitle the plaintiff to a reformation of the policy it would, therefore, be necessary to show that both parties had intended to insure the dwelling of Emily M. Roller, as correctly described, and that as the result of a mutual mistake an incorrect description was inserted in the policy. (Lewitt & Co., Inc., v. Jewelers' Safety Fund Soc., 249 N. Y. 217; Maher v. Hibernia Ins. Co., 67 id. 283; *87New York Ice Co. v. Northwestern Ins. Co., 23 id. 357.) If the policy, properly construed, did not describe the property of Emily M. Roller in the town of Somers the court could not reform the policy to cover property which it did not include.

It is our opinion, therefore, that the judgment cannot be sustained on the theory on which it was rendered, and that in any event there must be a new trial. We think, however, that the complaint should not be dismissed on this appeal, but that a new trial should be ordered for the reason that the plaintiff may be able to establish that the description in the policy is susceptible of a construction which accords with the correct location of the premises. Those premises were situated in the town of Somers and to this town the description in the policy makes specific reference. It is possible that the “ road leading to Summer Dwelling, Pleasantville off Bronx River Parkway,” referred to in the policy, will be found to correspond to “ the road leading from Purdy’s Station to Somers ” or it may be found that the description in the policy is so ambiguous as to require extrinsic evidence in explanation of the ambiguity, entitling the plaintiff to relief in equity. (Maher v. Hibernia Ins. Co., supra.) The surrounding circumstances heretofore not adequately disclosed, including the location of the various roads, may thus show that the description in the policy, when properly explained, corresponds to the correct location of the premises.

The judgment should be reversed and a new trial ordered, with costs to the appellant to abide the event.

Townley, J., concurs.

Judgment affirmed, with costs.