People's Insurance v. Spencer

The opinion of the court was delivered, by Woodward, C. J. In the dozen assignments of errors upon this record there are several that shall be despatched with a very few words. It cannot be doubted that debt will lie upon a policy of insurance renewed by a parol endorsement: Franklin Ins. Co. v. Massey, 9 Casey 221. Nor that the amended narr. embraced the “ hops” that were added to the policy. And as to the allegations that plaintiffs had taken no license from the Government for distilling whiskey, and that they effected insurance in other companies as brewers and maltsters without disclosing their operations as distillers, or that they had made false representations on the subject to Mr. McFadden as agent of other companies, the evidence was properly rejected, for manifestly these topics of inquiry were irrelevant to the present issue. So was the propo [360] sition to prove the classification of risks and rates of insurance in other companies. In a word, the bills of exception to evidence present no ground for reversing the judgment. And the errors assigned upon the charge all resolve themselves into two question's: first, whether the company had notice of the intended distilling operations before the policy in suit was issued; and, second, whether the whiskey on hand at the time of the fire was a violation of any of the covenants of the assured. The first was a question of fact. If it had not been found for the plaintiffs, it would have beén fatal to their action, because under the conditions of the policy they could not increase the risk after the policy issued without notice to the company and an endorsement thereof on the policy. There was no such endorsement, and the only way to excuse the want of it was to prove that distilling had been added to the business of brewing before the policy issued, and consequently that it was one of the risks intended to be insured. The evidence upon this point was conflicting, Gardner, the agent, denying that he knew that plaintiffs intended to add the business of distilling whiskey to their. appropriate business, but several other witnesses proved him there inspecting the premises •in November 1863, when all the arrangements for distilling were pointed out and explained to him. One of these witnesses, Robert Watson, speaking of Gardner’s visit in November 1863, says, “ he came there to see around; I showed him around. He inspected the building; showed him the mash-tubs ; showed him where we were going to move the boiler. I had then ordered a new boiler, and showed him where we were going to set it. The still was there, it had been put up the month before. I showed him the old mash-tub and the new one, and where we mashed the grains and took the extract out of them for making whiskey. I think it was some three or four weeks before the policy of December 5th 1863 was taken out.” On his cross-examination, this witness said he did not tell Gardner we were then distilling whiskey, but I told him that we were going to do it, and showed him the machinery we were putting up. Other witnesses testified to the same effect, so that the court had the right to submit the question of notice and the jury to find it as they did. And notice to the agént was notice to the company, but was it prior to the policy in suit ? On this point there is a little intricacy in the dates of the several policies. The first policy on the “ Phoenix Brewery” issued December 5th 1862 for $5000, at one year. By endorsement on the policy made in December 1863, this risk was renewed for a year, to expire December 5th 1864. On the 2d December 1864, the plaintiffs took another policy for $5000 on “ barley and malt contained in assured’s malt-house and brewery, known as [361] Phoenix Brewery,” to expire on 29th November 1866. On the 5th December 1864, an endorsement was made upon the last-named policy, by which an additional risk of $5000, upon the same barley and malt, was taken in consideration of an additional premium paid. It would seem that this was a continuation of, or rather a substitution for, the policy of 1862 and the renewal of 1863. It is upon this policy of 2d and 5th December 1864 for $10,000, that the suit is brought. Now if this policy, or the renewal of the policy of 1862 made in December 1863, were granted with the full knowledge of the agent of the company that distilling whiskey was to be carried on in the brewery, the conditions about endorsement of notices have no application, and the company have no ground to allege an increase of risk: Girard Fire Ins. Co. v. Stephenson, 1 Wright 298. The condition or covenant is, that without notice endorsed upon the policy the risk shall not be increased “ during-the continuance of the insurance.” But where a policy is for a year, and then is renewed, and then is substituted by a new policy, and the assumption of an additional risk by endorsement on such new policy, notice of an increased risk given before the renewal of the original policy, runs through all the subsequent insurances. The company must be held, therefore, to have assumed these subsequent risks upon the barley and malt with their eyes wide open to the fact that distilling whiskey, as well as brewing ale, was carried on in the Phoenix Brewery. 2d. It appeared in evidence that there were two barrels of whiskey near thfe still, and a considerable quantity, perhaps thirty barrels, stored in the cellar at the time of the fire, which the court treated as a natural and necessary incident to the business of distilling. Although the fire did not originate from this whiskey, nor from the distillery business in any of its parts, this answer of the court is assigned for error on the ground that there was no proof of a custom among distillers to retain in their distillery so large a quantity of the manufactured article. We believe that distillers do not always have warehouses for storing their liquors in, and where the business is only incidental to that of brewing, such a warehouse could hardly be expected. Nor do we know that thirty or forty barrels of whiskey are an unusual quantity for a distiller to have on hand in his distillery. The court said it was a natural incident of the business, and we are bound to believe it until the contrary is shown. Had there been any evidence of the custom of distillers, it would have raised a question for the jury; but without such evidence, there was nothing to submit to the jury on this head, and non constat that the court erred in what they said. The judgment is affirmed.