193 F2d 428 Ross v. Insurance Co of North America
193 F.2d 428
INSURANCE CO. OF NORTH AMERICA.
United States Court of Appeals, Second Circuit.
Argued November 5, 1951.
Decided January 4, 1952.
This is a suit brought by plaintiff as assignee of Lamar Wilson to whom the defendant insurance company issued a "binder" of risk insurance against all risks of loss or damage on June 23, 1947. It covered four fur coats. She testified that, on the morning of that day, the four coats were in her apartment, when she left with a lawyer, Strauss, to go to the Criminal Court Building in New York City; and that when she was in that building at about 9:30 a. m. — while she was awaiting trial on criminal charges including the keeping of a house of prostitution — she asked Strauss to phone her insurance broker and arrange for risk coverage on the furs. Strauss testified that he spoke to the broker who asked whether Miss Wilson was still in the real estate business; that, after consulting her, he answered, "Yes." Lederer, an agent of the defendant, testified that, before issuing the binder, he asked the broker about the business of the insured, and the broker answered that it was real estate. The binder then issued. Subsequently, Lederer learned that the insured, on May 26, 1947, had pleaded guilty to a charge of illegally possessing drugs, and that, when the application was made for the binder, the insured was about to be tried for maintaining a house of prostitution.
Strauss further testified as follows: Late in the afternoon of June 23, he went, at the request of the insured, to her apartment to feed her dog; he then observed that the fur coats were in place and that everything was in order. He returned to the apartment the next day at about 10 a. m.; the lights were on, the shades drawn, the room in disorder, clothes in the closet were thrown about — and three of the fur coats were missing. He notified the police, and two police detectives examined the apartment; to them, Strauss reported that three coats were missing. At the trial, before a district judge without a jury, defendant stipulated that, if called as witnesses, experts would testify that in December 1946 they had valued two of the coats at $2500, and that the third had been valued on June 21, 1947, at $600. The trial judge entered a judgment in plaintiff's favor for $2800 plus interest.
Powers, Kaplan & Berger, New York City, Moses Finesilver, New York City (Irwin Leibowitz, New York City, of counsel), for defendant-appellant.
Joseph L. Greenberg, New York City, for plaintiff-appellee.
Before SWAN, Chief Judge, and FRANK, Circuit Judge and COXE, District Judge.
FRANK, Circuit Judge.
Defendant argues that the recovery is barred by the non-disclosures (1) that the insured had earlier been convicted and (2) that she was about to be tried for prostitution. We think not. According to Stecker v. American Home Fire Assur. Co., 299 N.Y. 1, 84 N.E.2d 797, this kind of policy, although called an "inland marine policy," is governed by the ordinary insurance rule concerning disclosure of matters material to the risk. Under this rule, absent an inquiry by the insurer, the insured had no duty to make such disclosures. We think no fraud was proved. As the trial judge saw and heard plaintiff's witnesses and found their stories credible, we must reject defendant's attack on their credibility. We think there was no affirmative misrepresentation in the statement that she was in the real estate business, since she did lease and sublet apartments, even if she sub-let part of the premises for prostitution purposes.
The judge, in entering judgment in the principal sum of $2800, found in effect that this was the value of the furs at the time of the loss. On the evidence, we cannot say this was "clearly erroneous."1
1. The judge could reasonably conclude that two of the missing items had been worth $2500 some six months before the loss, and that, because of wear and tear, they were worth $2200 at the date of loss; he could also reasonably conclude that the third item was worth $600 when the loss occurred.