Philad. Tool Co. v. British Am. Assurance Co.

Opinion, Mr. Justice Williams : A glance at the facts of this case will prepare the way for the application of the legal principles that control it. The action is on a policy of insurance. The insured was a manu [241] factoring company occupying brick and frame buildings on Oakford street, in the city of Philadelphia, as a lessee. Its machinery and tools were in these buildings, in which its business was conducted. It had no title, legal or equitable, to the real estate, and no interest in it except as lessee. Its property was therefore all personal, and insurable as such, consisting of the leasehold interest in the real estate, and the machinery and tools used in the business. The tool company wanted insurance on its property. In some manner, not explained by the testimony, this fact became known to the representative of the British America Assurance Company, and that company issued a policy for $2,500, $1,000 of which was on the buildings, and the remainder on the tools and machinery contained therein. The do fence now taken is, that the policy is partly upon real estate and partly on personal property, for which an entire premium was paid, and that, as the assured had no title to the land, the policy is void as to it, and being void in part is void in whole, so that no recovery can now be had. This position rests on one of the almost innumerable conditions, stipulations, and provisos which appear on the policy, and which asserts that if the assured is not the sole and unconditional owner of the property, or if the building stands on ground not owned in fee-simple by the assured, or if the interest of the assured is not truly stated in the policy, then the policy shall be void. Is this condition applicable to the case presented on this policy ? A policy of insurance, like any other contract, is to he read in the light of the circumstances that surround it. This policy was issued without any application or written request describing the interest of the assured in the buildings. No actual representation of any sort upon the subject, oral or written, is alleged to have been made by or on behalf of the assured. We ought to assxime that a policy written under such circumstances was written upon the knowledge of the representative of the insurer, and intended to cover in good faith the interest which the insured had in the buildings. Fraud is never to be presumed, and in this case no fraudulent representation is shown -or alleged, unless it can be deduced from the statements of the insurer, made, as we must presume, on the knowledge of its representative, and for which the insured is in no manner responsible. W e must also remember that this policy is to be [242] interpreted most strongly against the company whose contract it is. Applying these principles to the question now raised, we conclude that the policy written on the knowledge of the insurer was made in view of the facts of the case, and was intended to cover such interest in the buildings as the insured had. This was a leasehold only, but it was an insurable interest. Presumably it is the interest which an application, if one had been made, would have shown, for it is the only interest which the tool company ever had or claimed to have. To such an interest, the proviso whose protection is invoked is not applicable. The policy covering only the interest of the lessee, the ownership of the fee becomes immaterial. The lessee cannot control its transfer, and has no right to be heard upon any subject relating to its ownership, so long as its possession under its lease is not disturbed. This view of the case renders it unnecessary to refer to the cases cited in support of the general doctrine, that a false affirmation of ownership, on which insurance is induced, will relieve the insurer from liability on the policy. The court below erred in entering judgment non obstante veredicto on the reserved point, and Judgment is now entered on the verdict. Mr. Justice Mitchell dissented.