Mayor, Lane & Co. v. Commercial Casualty Insurance

The action is brought on a policy of -insurance issued to plaintiff in respect of an automobile truck owned and operated by it. The cause of action arises out of a suit brought against the plaintiff by reason of an accident and the settlement of that suit, after ample notice to defendant to undertake the defense thereof. The insurance covered loss arising “by reason of the ownership, maintenance, or use” of the automobile in question.

Apparently the dismissal was based on the theory that plaintiff’s testimony disclosed a warranty in the policy to the effect that “none of the automobiles herein described are rented to others”; whereas, the automobile involved in the accident was rented to others. The warranty in the policy, however, speaks as of its date—i. e., May 14, 1912—and cannot be held to have been violated because the automobile was rented out at the time of the accident, April 24, 1914. See Smith v. Mechanics’ Co., 32 N. Y. 399.

Judgment reversed, and new trial granted, with costs to appellant to abide the event. All concur.