Harwyn Publishing Corp. v. Great American Insurance , 12 A.D.2d 399 ( 1961 )

Bastow, J.

The order appealed from grants plaintiff’s motion for summary judgment and directs a jury trial of the amount of damages for which judgment should be entered. Plaintiff is a book publisher. In 1958 it produced a picture encyclopedia for children. Group Promotions, Inc., was employed to compose the text material and Bud Norton Associates, Inc., was similarly employed to do the art work. In Bonneetion with the latter some 2,100 pen and ink drawings on individual boards, each approximately 14 by 18 inches, were prepared.

Upon completion of publication the art work remained for several months in the possession of Group Promotions, Inc. On November 13, 1958 defendant or its predecessor, issued to plaintiff a policy in the amount of $100,000 against “ all risks of physical loss or damage to the property” except as therein excluded. Subsequently, and following inspection by defendant, the coverage was reduced to $75,000. There was incorporated in the policy a so-called “ processing endorsement ” extending coverage to the property while temporarily detained on the premises of processors for the purpose of performing work on the property for the account of the assured. This indorsement specifically stated that the property was located at Group Promotions at a stated number on 56th Street in Manhattan.

In 1959 plaintiff undertook to revise the encyclopedia and had the art work transferred by Brinks, Inc., a nationally known security risk delivery service, from the premises of Group Promotions on 56th Street to Bud Norton Associates, Inc., on Lexington Avenue in Manhattan. Before doing so plaintiff obtained from defendant an indorsement effective July 21, 1959 amending the policy and specifically naming Bud Norton Associates, 480 Lexington Avenue as a processor with the same limit of liability. Thereafter, and in late July, 1959, between a Friday afternoon and Monday morning all of the art work disappeared from the premises of Bud Norton Associates.

This action was commenced to recover the amount of plaintiff’s loss under the terms of the policy. Defendant answered and served a third-party complaint on Bud Norton Associates, Inc., alleging negligence on the part of the latter and seeking indemnity as subrogee under the policy. Plaintiff, pursuant to demand, has served a detailed bill of particulars. Bach party has examined the other at length before trial.

The policy, as has been stated, insured against all risks of physical loss with stated exclusions. Here pertinent is a provision exempting defendant from liability if the loss was caused by “ infidelity, conversion or any act of a dishonest character ” on the part of the insured or its employees, any processor or its employees, or of any party to whom the property was delivered or entrusted. Upon this motion defendant has shown no facts sufficient to establish a triable issue as to this defense. It contends in substance that the facts as presented by plaintiff are “ so incredible and the theft of this type of property by anyone not connected with the plaintiff was so purposeless that, in themselves, these matters raise issues of fact ”.

The defendant misses entirely the posture of the parties at the time of the loss. For more than a year the insured property had been out of plaintiff’s possession. For 11 months it had been with one processor and for a short time with Bud Norton Associates, another processor. The risk of loss while the property was in the possession of strangers was presumably one of the reasons plaintiff desired protection. It carefully sought and obtained indorsements from defendant extending coverage to the two named processors while the property was in their respective possessions. Defendant inspected the property and reduced the amount of the coverage.

Suslensky v. Metropolitan Life Ins. Co. (180 Misc. 624, affd. 267 App. Div. 812) relied on by appellant, is distinguishable. There the issue presented was whether the death of insured as the result of a poison taken by him was accidental or with suicidal intent. The facts, of course, were within the possession of the beneficiary. This principle has been frequently stated. Thus, in Newman v. Newark Fire Ins. Co. (281 App. Div. 852) it was said: “ In our opinion the facts as to the loss or theft of the insured articles are exclusively within the knowledge of the moving party, since appellant has only hearsay knowledge thereof, derived from statements made by respondent herself. In such a case summary judgment should not be granted, and respondent should be required to prove her case by common-law proof, subject to cross-examination.” (See, also, Verity v. Peoples State Bank of Baldwin, 1 A D 2d 833.)

Here, however, the plaintiff is as much a stranger to the circumstances surrounding the loss as is the defendant. It has produced the facts in its possession. The appellant has produced nothing to substantiate its defense that the loss was caused by ‘ ‘ infidelity, conversion or any act of a dishonest character ”. It simply asserts that the claim of a loss is incredible because, it argues, the property had no apparent marketable value. This is insufficient. If, as defendant suggests, the processor, who had possession of the property, ‘ ‘ still owed $6,000 to the various artists who had worked * * * on the first encyclopedia ’ ’ this together with all other relevant evidence may be produced upon the trial of the third-party complaint of defendant against that processor.

Defendant further confuses the issue by its extended contentions ‘‘ that in order to accomplish this theft, the thief probably would have had to do ” 12 specific acts, including forcible entry of the building, entry of the offices of the processor, removal of the 2,100 boards by the use of a truck on a week end in mid-Manhattan and so forth. The short answer is that we are not concerned with that kind of a loss. The policy issued by defendant was not designed to indemnify against loss occasioned by the felonious abstraction of property from the interior of a specific building or part thereof. If appellant had extended only such coverage the burden would have been placed on plaintiff of proving a loss under circumstances which not only supported an inference of theft but pointed strongly and persuasively to the conclusion that a theft was committed. (Wolf v. Ætna Acc. & Liab. Co., 183 App. Div. 409, 411, affd. 228 N. Y. 524.) (See, generally, 1 Richards, Insurance [5th ed.], § 28.)

We are here considering, however, an inland marine policy which by indorsement gave coverage to plaintiff ‘ ‘ for all risks of physical loss or damage to the property [with stated exceptions] ” while “ temporarily detained” by processors. The Insurance Law (§ 46, subd. 20, par. [a]) describes “marine insurance ” as including “ all personal property floater risks ”. (Cf. Davis Yarn Co. v. Brooklyn Yarn Dye Co., 293 N. Y. 236, 248; Stecker v. American Home Fire Assur. Co., 299 N. Y. 1.) In the latter decision the court said (p. 6) that “ there was nothing ‘ marine ’ about this policy or the risk insured against, as men ordinarily use the word ‘ marine ’. It was, in insurance men’s language, a ‘ dry ’, not a ‘ wet ’, risk. It was, essentially, the same kind of policy a householder buys to cover his wife’s furs or jewelry on a vacation trip, by land, from one part of the United States to another.”

‘ ‘ The All-Risk policy is in terms a promise to pay upon the fortuitous and extraneous happening of loss or damage to a specified thing or person from any cause whatsoever. This type of contract has been said to cover every conceivable loss or damage that may happen, except when occasioned by the wilful or fraudulent act or acts of the insured.” (2 Richards, Insurance [5th ed.], § 212.) Here there is not a scintilla of evidence that the loss was occasioned by the willful or fraudulent act of the insured. Neither is there any proof that the loss was caused by infidelity, conversion or an act of dishonest character on the part of insured or processor or any employee of either within the meaning of the exclusion clause of the policy. Assuming that the insured upon a trial is required to establish that the action was not barred by this exclusion provision (cf. Sagorsky v. Malyon, 4 A D 2d 1016), it is difficult to understand what proof could be offered beyond that now found in the moving papers. The defendant, as has been stated, views the loss as suspicious and contends that inasmuch as it was not a party to the transaction or happening there should be a trial. The short answer again is that neither was plaintiff a party to the transaction or happening. Whatever occurred to the property took place while it was in the hands of a third party. Appellant insured against the risk of loss from any cause during such possession. No proof has been suggested from which it could be found that a triable issue exists.

The order should be affirmed, with costs.