[225 N. Y.]

Opinion, per HISCOCK, Ch. J.

[Feb.,

Beechley v. Beechley, 134 Ia. 75; Sheffield Car Co. v. Hydraulic Co., 171 Mich. 423; N. Y. Rubber Co. v. Rothery, 107 N. Y. 310; Shakman v. U. S. Credit System Co., 92 Wis. 366; Maple v. Kussart, 53 Penn. St. 348; Wilmore v. Stetler, 137 Ind. 127; Baker v. Seavey, 163 Mass. 522; Barnett v. Kamp, 258 Mo. 139; Rudd v.. Matthews, 79 Ky. 479.)

Neither has there been in our opinion any such delay of action by the pledgor or the plaintiff as to sustain the conclusion as matter of law that there was acquiescence in what had been done and a waiver of rights which might have existed. A failure to act in repudiation of something which has been done may often be evidence of acquiescence and through such delay there may arise under some circumstances such a condition of estoppel as will prevent an injured party from securing relief. It is sufficient to say that in this case we do not find these elements as matter of law at least.

The findings contain some evidence that if the dividends had been properly applied to the payment of Brightson's indebtedness and the stock sold there would have been realized several thousand dollars more than was realized by the proceedings which were indulged in, and, therefore, there should be a new trial. This being so we think that we should indicate to some extent the rule of damages which should be followed and our entire dissent from the one which plaintiff is urging.

It is insisted that plaintiff should be allowed to recover as damages the entire and aggregate amount made up of dividends and of the value of the stock without any reference to the indebtedness for which the stock was held. This, in our opinion, would be a most unreasonable and unjust conclusion. The stock and dividends were held as security by the Claflin Company for a debt which was unpaid and unquestioned. If plaintiff had sued it for the alleged conversion there is no question

1919.]

Opinion, per HISCOCK, Ch. J.

[225 N. Y.]

that in proving her damages she would have been compelled to make allowance for the indebtedness which was a claim upon the stock and payable out of the proceeds of the sale. (Baker v. Drake, 53 N. Y. 211, 220; Hancock v. Franklin Ins. Co., 114 Mass. 155; Garlick v. James, 12 Johns. 146; Baltimore Marine Ins. Co. v. Dalrymple, 25 Md. 269; Shaw v. Ferguson, 78 Ind. 547; Work v. Bennett, 70 Penn. St. 484; Hallack L. & M. Co. v. Gray, 19 Colo. 149.)

We do not doubt that the same rule in this respect which would have been applied for the benefit of the pledgee is applicable for the benefit of defendant who was acting for it and in its behalf. It is to be inferred from the findings that the proceeds of the sale were applied to the reduction of Brightson's indebtedness. The corporation would have been entitled to apply to the indebtedness held by it the proceeds of the sale and to have this taken into account in determining the amount of damages suffered by the wrongful conduct of the sale. When it acted through the defendant, its agent and representative and the proceeds were so applied, we feel clear that this reduction with the proceeds of the pledgor's indebtedness must be taken into account in estimating plaintiff's damages. The real damages as the case now stands are those which the pledgor suffered by reason of an improper and unlawful sale as the result of which there was realized a smaller sum than should have been realized for application on his indebtedness or for restoration to him in case there was a surplus over and above the indebtedness.

While that question is not now before us and we do not intend to decide it finally we have doubts whether it was necessary for the defendant to set up these facts by way of answer. If they were inherent in the evidence which plaintiff would be compelled to give to prove her damages it would hardly seem to be necessary to set

[225 N. Y.]

Statement of case.

[Feb.,

them up. We leave that question for further consideration, if necessary.

The judgments should be reversed and a new trial granted, with costs to abide the event.

CHASE, COLLIN, CUDDEBACK, HOGAN, MCLAUGHLIN and CRANE, JJ., concur.

Judgments reversed, etc.

EMILY G. K. BAUMANN, Appellant, v. THE PREFERRED ACCIDENT INSURANCE COMPANY OF NEW YORK, Respondent.

SAME, Appellant, v. SAME, Respondent.

Insurance (accident)

application of Insurance Law (Cons. Laws, ch. 28, § 107, as amd. by L. 1913, ch. 155, and § 58, as amd. by L. 1906, ch. 326).

1. The provision of the Insurance Law (Cons. Laws, ch. 28, § 107, as amd. by L. 1913, ch. 155) that the falsity of any statement in the application shall not bar a recovery unless made with intent to deceive applies only to policies issued after January 1, 1914.

66

2. An annual receipt issued by the company to the insured on the policy issued to him at an earlier date for a period of twelve months, with the privilege of annual renewals, is not in effect a re-issue of the policy so as to bring it within the meaning and operation of section 107 of the Insurance Law, as amended in 1913. 3. The provision of section 58 of the Insurance Law that every policy of insurance issued or delivered on or after January 1, 1907, by any life insurance corporation shall contain the entire contract between the parties and all statements purporting to be made by the insured shall in the absence of fraud be deemed representations and not warranties," is by its express words limited to policies issued "by any life insurance corporation," and has no application to accident insurance.

*

* *

Baumann v. Preferred Accident Ins. Co., 174 App. Div. 871, affirmed.

(Argued December 11, 1918; decided February 25, 1919.)

1919.]

Points of counsel.

[225 N Y.]

APPEAL in each of the above-entitled actions from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered July 5, 1916, affirming a judgment in favor of defendant entered upon a verdict directed by the court.

The nature of the actions and the facts, so far as material are stated in the opinion.

John B. Stanchfield, George M. Pinney, Frederick W. Kobbe and J. Arthur Leve for appellant. In so far as the defendant company insured against death by accident as provided in the policies, it is to be deemed a life insurance corporation and comes within the purview of section 58 of the Insurance Law (L. 1906, ch. 326) which took effect January 1, 1907. (Moore v. Prudential Casualty Co., 170 App. Div. 849.) Under section 107 of the Insurance Law, as amended by chapter 155, Laws of 1913, which became operative January 1, 1914, the statement with reference to prior insurance appearing in the application and in the policies sued on, even if deemed to have been made by Gustav Baumann, was a representation or statement and not a warranty. (Ogden v. N. Y. Mut. Ins. Co., 8 Bosw. 248; Hodgson v. Preferred Acc. Ins. Co., 100 Misc. Rep. 155; 182 App. Div. 381; Brady v. N. W. Ins. Co., 11 Mich. 425; Hartford Fire Ins. Co. v. Walsh, 54 Ill. 167; Bickford v. Ætna Ins. Co., 101 Maine, 130; MacArthur v. U. S. Health & Accident Ins. Co., 151 Ill. App. 515; DeJernette v. Fidelity & Casualty Co., 98 Ky. 563; Grocery Co. v. U. S. Fidelity & Guaranty Co., 130 Mo. App. 430.) The incorrect statement as to any prior rejection for life insurance, inserted by the defendant itself, and not by Mr. Baumann, was not, as matter of law, material to the risk assumed by the defendant company in issuing the two accident policies which insured Mr. Baumann against death by

[225 N. Y.]

Points of counsel.

[Feb.,

accident alone, as therein provided. (Richards on Ins. Law [3d ed.], § 101; Armour v. T. F. Ins. Co., 90 N. Y. 450; Kidder v. Order of Golden Cross, 192 Mass. 326; Etna L. Ins. Co. v. Claypool, 128 Ky. 43; Price v. Standard L. & A. Ins. Co., 90 Minn. 264; Continental Casualty Co. v. Owen, 131 Pac. Rep. 1084; Life Ins. Co. v. Judge, 191 Penn. St. 484.) As the incorrect statement with reference to Mr. Baumann's prior rejection for a particular form of life insurance was not made by him but by the defendant's own agent, the policies should not thereby be vitiated, Mr. Baumann having acted throughout in perfect good faith and there being no evidence that the error was ever brought to his notice. (Wilder v. P. M. A. Assn., 14 N. Y. S. R. 365; Rowley v. Empire Ins. Co., 36 N. Y. 550; Mowry v. Rosendale, 74 N. Y. 360; Grattan v. Met. Life Ins. Co., 80 N. Y. 293; 92 N. Y. 284; Miller v. Phoenix Mut. Life Ins. Co., 107 N. Y. 301; Sternaman v. Met. Life Ins. Co., 170 N. Y. 27; Mead v. S. & W. F. Ins. Co., 81 App. Div. 285; Kenyon v. Knights Templars Aid Assn., 48 Hun, 283; Malara v. Prudential Ins. Co., 147 App. Div. 578; Dunbar v. Phoenix Ins. Co., 40 N. W. Rep. 386; Temmink v. Met. Life Ins. Co., 40 N. W. Rep. 469.)

William D. Guthrie and George W. Sill for respondent. The insured must be held bound by the provisions of the policies sued on. (Hook v. M. M. L. Ins. Co., 44 Misc. Rep. 478; 139 App. Div. 922; Enthoven v. American Fidelity Co., 128 N. Y. Supp. 805; 150 App. Div. 928; 211 N. Y. 561; Quinlan v. P. W. Ins. Co., 133 N. Y. 356; Carmichael v. J. H. Mut. L. Ins. Co., 116 App. Div. 291; May v. N. Y. S. R. F. Society, 14 Daly, 389; Taufer v. Brotherhood of Painters, 137 App. Div. 838; Tilton v. Farmers Ins. Co., 82 Misc. Rep. 79; Gioia v. Met. Life Ins. Co., 97 Misc. Rep. 380, 383; Bollard v. N. Y. L. Ins. Co., 98 Misc. Rep. 286; Lumber Underwriters v.