DE CORSO v. CONCORDIA FIRE INS. CO., 121 N.J. Eq. 89 (1936)

187 A. 145

TERESA DE CORSO, complainant-respondent, v. CONCORDIA FIRE INSURANCE COMPANY OF MILWAUKEE, defendant-appellant.

Court of Errors and Appeals.Argued May 28th, 1936.
Decided October 2d 1936.

A fire insurance policy was not violated by the owner because a club met on the insured premises, contrary to the provisions of the policy, there being no knowledge of the meeting by the owner. And though a lease had been executed for a tailor shop on part of the

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premises, operations had not yet been begun; there was no knowledge by the owner of gasoline being kept on the premises; accordingly, the terms of the policy were not violated by her.

On appeal from the court of chancery.

Mr. James A. McTague, Jr., for the complainant-respondent.

Messrs. Lum, Tamblyn Fairlie (Mr. John S. Foster, of counsel), for the defendant-appellant.

PER CURIAM.

The issue in this case is whether a fire insurance policy should be avoided as between the owner of the premises (mortgagor) and the company. The fire loss was paid to the mortgagee, under the terms of the policy, the insurance company taking a pro tanto interest in the mortgage by assignment, in the nature of a subrogation. The prayer of the bill was that the amount paid the mortgagee by the insurance company be credited on the mortgage debt and that the subrogation agreement be canceled.

The defenses were that the premises were permitted to be used for the meeting of a social club, contrary to the terms of the policy; that a lease had been executed to rent part of the premises for a tailor shop, and that gasoline was kept in the premises, all of which was contrary to the terms of the insurance policy.

The court held that a club meeting, there having been but one, of which it did not appear the owner had knowledge, did not violate the warranty clause relied upon; that the tailor shop had not commenced operations, no equipment having been installed, and only the lease having been signed, was not in violation of the policy, and that knowledge of, participation in, or consent to the keeping of gasoline on the premises, was not brought home to the owner.

We agree with the conclusions of the learned vice-chancellor and the decree is therefore affirmed.

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For affirmance — THE CHIEF-JUSTICE, LLOYD, BODINE, HEHER, PERSKIE, DEAR, WELLS, RAFFERTY, JJ. 8.

For reversal — HETFIELD, WOLFSKEIL, JJ. 2.