Hinckley v. Germania Fire Insurance

C. Allen, J. The report does not state the grounds upon which the ruling rested, that the plaintiff was not entitled to recover. The defendant, in its brief, relies on various objections, which we have considered. In the first place, the defendant suggests that there is certainly great doubt whether the license, under which the plaintiff was doing business on the day when the policy was dated and delivered, was of any validity, since this license ran to both brothers, Edwin R. Hinckley and Herbert A. Hinckley, though — 44 — Herbert had ceased to have any interest in the place before the license was dated and issued. No authority is cited or reason assigned for so strict a construction; and we are of opinion that a license duly granted to two persons, under the Pub. Sts. o. 102, .§ Ill, to keep a billiard or pool table, or a bowling alley, for hire, is available to each of them. This is not like a case wrhere two persons seek to avail themselves of a license granted to only one of them. It is then urged that, after the license had expired, the plaintiff kept the insured property in violation of law, from May 1, 1883, till the last week in June, 1883. The policy was dated March 15,1883, and the license then existing expired on May 1, 1883. The fire occurred on August 6, 1883, and it was conceded that there was no illegal use of the property after the last week of the preceding June, at which time the plaintiff ascertained that his license would not be renewed. The .defendant rests its objection on two grounds: first, that the illegality and criminality of the plaintiff’s act in respect to the insured property vitiate the policy by operation of law, independently of any express provisions contained in the policy; and, secondly, that under a provision of the policy the right to recover is taken away. The authorities cited in support of the first proposition do not support it. In Kelly v. Home Ins. Co. 97 Mass. 288, the policy was on intoxicating liquors, which, at the time of the insurance, and thereafter to the time of the loss, were intended for sale in violation of law. The policy never attached. There was never a moment when the liquors were not illegally kept; and all that the case decides is, that goods so kept at the time when the policy issued, or at the time of the loss, cannot be the subject of a valid insurance. In Johnson v. Union Ins. Co. 127 Mass. 555, the facts were similar. The policy was on billiard tables, balls, cues, &c., kept without a license at the time the policy was issued, as well as at the time of the loss. The ground of the decision in both the above cases is stated to be, “ that the object of the assured in obtaining the policy was to make their illegal business safe and profitable, and that, the direct and immediate purpose of the contract of insurance — 45 — being to protect and encourage an unlawful traffic, the contract was illegal and void, and the policy never attached.” The-same facts existed in Lawrence v. National Ins. Co. 127 Mass. 557, n. In Cunard v. Hyde, 2 El. & El. 1, the cargo which was the subject of insurance was partly loaded on deck, in violation of law, and while in that condition was totally lost. In the present case, the plaintiff had a license at the time when the policy issued, and the policy therefore was valid when obtained. If it be assumed, without discussion, that the policy would cease to be operative during the time when the property was kept in use without a license, the question remains, whether such temporary illegal use of the property has the effect to avoid the policy altogether, or merely to suspend it during the continuance of such illegal use. There is nothing in the case to show that it was found, as a matter of fact, that the plaintiff, at the time of taking out the policy, intended to make it cover any illegal use of the property. He may have expected to get his license renewed; or, failing in that, he may have intended to close the place where the property was used, as, according to his own testimony, in point of fact he did. Under this state of facts, we are of opinion, that the temporary use of the property without a license, if uncontemplated at the time of taking out the policy, would not of itself, and as matter of law, render the policy void during the whole of the rest of the time which it was to run. If there were any special or peculiar reasons why such absolute invalidity should be declared, they should be made to appear. In the absence of such reasons, such temporary and uncontemplated illegal use of the property should not be visited with so severe a penalty as the absolute avoidance of the policy. It does not appear that the defendant was or could be in any way injuriously affected thereby, after such illegal use had ceased. It has the benefit of the temporary suspension of the risk, without any rebate of the premium. There is no hardship to the defendant in requiring it to show an actual injury, or else to avail itself of the clause in the policy giving the defendant a right to cancel it upon notice and a return of a ratable proportion of the premium. There is no rule of law preventing the revival of a policy of insurance after a temporary suspension. “ The doctrine that — 46 — the risk may be suspended and again revive without an express provision for the purpose, seems to be within the strictest juridical principles.” 1 Phil. Ins. § 975. Accordingly, temporary unseaworthiness, if the ship has become seaworthy again, will not defeat the policy. 1 Phil. Ins. § 734. So as to other stipulations, as, for instance, that of neutral character and conduct. 1 Phil. Ins. § 975. And in Worthington v. Bearse, 12 Allen, 382, it was held, on great consideration, by this court, that, if the assured in a marine policy temporarily parts with his interest in the property insured, and afterwards buys it in again, the policy will revive, if there are no express provisions making it void, and there is no increase of risk. As between the insurer and the assured, there is no reason why the former should be allowed to avail himself of a temporary illegal use, like that which existed in the present case, unless it can also be shown that the subsequent risk was thereby increased, or the position of the insurer otherwise injuriously affected; and, as a matter of general policy, it does not seem reasonable to impose upon the assured so severe a consequence as the forfeiture of his policy, in addition to the penalty of one hundred dollars, which the Legislature has considered adequate as the maximum punishment for his offence against the public. Pub. Sts. e. 102, § 111. It is further contended by the defendant,, that, however it might be under the general rule of law, the policy contained a provision making it void. In the standard form of policy established by the Legislature, which was used in the present case, the matters avoiding a policy are enumerated. Omitting matters not here material, the provision is: “ This policy shall be void .... if the insured shall make any attempt to defraud the company, either before or after the loss, — or if gunpowder or other articles subject to legal restriction shall be kept in quantities or manner different from those allowed or prescribed by law, — or if camphene, benzine, naphtha, or other chemical oils or burning fluids shall be kept or used by the insured on the premises insured, except that what is known as refined petroleum, kerosene, or coal-oil may be used for lighting.” In this Commonwealth, under the statutes for the regulation of trade, and providing for licenses and municipal regulations of police, there are a great many articles which, in a certain sense, — 47 — may be said to be “ subject to legal restriction.” Dogs, fish, nails, commercial fertilizers, hacks and horses in cities, may be referred to as examples. It may well be questioned whether, under the maxim noscitur a sociis, the clause in the policy above quoted ought not to be limited in .its application to other articles of a character similar to gunpowder, the keeping of which may have a natural tendency to increase the risk. It would be rather a strained construction of this clause to hold that a policy should be void because an unlicensed dog was kept upon the premises; and yet such a dog, being subject to legal restriction, would be kept in a manner different from that allowed by law. It would not be sensible to give to these words the broadest construction of which they are susceptible. But, irrespectively of this consideration, it is not the necessary meaning of the word “ void,” as used in policies of insurance, that it shall, under all circumstances, imply an absolute and permanent avoidance of a policy which has once begun to run; but the meaning of the word is sufficiently satisfied by reading it as void or inoperative for the time being. In Phil. Ins. § 975, it is said: “After it [the policy] has begun, so that the premium is become due, it surely is but equitable that a temporary noncompliance should have effect only during its continuance. To carry it further is to inflict .a penalty upon the assured, and decree a gratuity to the insurer, who is thus permitted to retain the whole premium when he has merited but part of it. A forfeiture certainly ought not to be extended beyond the grounds on which it is incurred.....And there does not appear to be any good reason why, in the absence of all fraud and of all prejudice to the underwriter, the same doctrine should not be applicable to express stipulations in the nature of warranties, or conditions, unless, by the circumstances or the express provisions of the policy, such application is excluded.” In accordance with this doctrine, a provision in a policy that it should be void, and be surrendered to the directors of the company to be cancelled, in case of alienation of the property by sale or otherwise, was held to mean that it should be inoperative for the time being; and the assured, upon regaining title, after a sale of the property by him, was held entitled to recover. Lane v. Maine Ins. Co. 12 Maine, 44. So, where a policy provided that, “ in case — 48 — of any transfer or termination of the interest of the insured, either by sale or otherwise, without such consent [i. e. of the company], this policy shall from thenceforth be void and of no effect,” it was held that after such sale the policy revived upon the assured acquiring again the title, and holding it at the time of the fire. Power v. Ocean Ins. Co. 19 La. 28. The same rule of construction has been applied to provisions against other insurance. Obermeyer v. Globe Ins. Co. 43 Mo. 573. New England Ins. Co. v. Schettler, 38 Ill. 166. Mitchell v. Lycoming Ins. Co. 51 Penn. St. 402. The court in Illinois has gone so far as to apply it also to a provision against an increase of risk, which ceased before the loss. Schmidt v. Peoria Ins. Co. 41 Ill. 295. Ins. Co. of North America v. McDowell, 50 Ill. 120, 129. Without at present going beyond what is called for by the circumstances of the present case, we are of opinion that, assuming the temporary use of the property insured without a license to come within the prohibition of the policy, in the clause above quoted as to gunpowder or other articles subject to legal restriction, yet that clause is not to receive such a construction as to prevent the policy from reviving after such temporary use has ceased. The only remaining objection urged by the defendant is, that the statements of loss rendered to it by the plaintiff were insufficient, in failing to state that the plaintiff had no legal title to the insured property, and that the Spurrs had an interest in it. But there is no finding, as matter of fact, that the plaintiff was not the owner of the property; and upon the report of the case, we cannot say, as matter of law, that it appears that he was not such owner. Bailey v. Hervey., 135 Mass. 172. McCarthy v. Henderson, 138 Mass. 310. Moreover, no attempt to defraud the defendant being found or charged, the provision of the policy, that a statement shall be rendered setting forth the interest of the insured therein, was sufficiently complied with. There was no provision calling for an exact statement of his title or interest, in detail, and a general statement of ownership was sufficient. Fowle v. Springfield Ins. Co. 122 Mass. 191. New trial granted.