Oberman v. United States Fire Insurance Co. of New York

Mr. Justice Thompson delivered the opinion of the court: February 11, 1922, the department store which had been conducted by appellees for several months in the city of Danville was destroyed by fire. Appellees claimed their total loss was about $50,000. They carried insurance amounting to $38,000, which was distributed among nine companies. Shortly after the fire an adjuster, acting for all the insurance companies, made an investigation, and after examining the books of appellees and what remained of the merchandise fixed the total damages to the stock caused by the fire at $35,000. He 'prepared proofs of loss on this basis and submitted them to appellees for execution. They agreed to the adjustment, executed the proofs of loss and returned them to the adjuster. He forwarded them to the several companies for their action. The amounts due under nine of the fifteen policies were paid in accordance with the agreement as to amount reached by the adjusters for the respective parties. Five thousand dollars of the insurance was carried by appellant in three policies, — two of $1000 each and one of $3000. Appellant paid the amount due under the $3000 policy and under one of the $1000 policies and refused to pay the sum of $921.05 due under the policy involved in this case. Thereupon this action was begun in the circuit court of Sangamon county and the trial was had before the court without a jury. At the close of all the evidence appellant moved that judgment be entered in its favor for the reason that there was no evidence showing the amount of the loss. This motion was denied. Propositions of law offered by appellant were refused and some offered by appellees were held. There was a judgment in favor of appellees for the amount agreed upon by the adjusters, and on appeal this judgment was affirmed by the Appellate Court. A certificate of importance was granted and this further appeal prosecuted. All controverted questions of fact have been settled in favor of appellees by the judgment of the Appellate Court. Our investigation of the facts of the case is limited to determining whether there is any competent evidence in the record which supports the judgment. The adjuster for the companies testified that after considerable negotiation with the adjuster for appellees they agreed on the amount of the loss, and that that amount was fixed at $35,000 in the event there was a liability. Pursuant to this agreement the adjuster for the companies prepared proofs of loss and a schedule apportioning the amount due under each policy, and after these documents were duly executed by appellees and approved by the adjuster for the companies they were forwarded to the respective companies. Where the amount of the loss has been fixed by agreement of the parties there is no necessity for making further proof of the fact. (Illinois Mutual Fire Ins. Co. v. Archdeacon, 82 Ill. 236; Bond v. National Fire Ins. Co. (W. Va.) 88 S. E. 389; Wilms v. New Hampshire Fire Ins. Co. (Mich.) 161 N. W. 940; 5 Joyce on Insurance,—2d ed.—sec. 3771.) The fact that the amount of the loss has been adjusted does not necessarily entitle the assured to recover that amount. The adjustment of itself merely amounts to an admission on the part of the insurer that the sum fixed is due if the insured is to have anything under the policy, and does not stop the insurer from setting up fraud, breach of conditions of the policy or other acts of the insured that operate to defeat the insurer’s liability. ( Willoughby v. St. Paul German Ins. Co. 68 Minn. 373, 71 N. W. 272; Commonwealth Ins. Co. v. Solomon, (Del.) 119 Atl. 850; 2 Wood on Fire Insurance,—2d ed.—sec. 482.) The parties having agreed in this case as to the amount due in the event of liability, and there being no claim of fraud or mistake in fixing the amount, it stands as an admission of appellant, and, being unimpeached and uncontradicted, is sufficient proof of the amount due to sustain the judgment. It is contended by appellant that the record does not contain competent evidence showing the agreement as to the amount of the loss. The proof of loss and the schedule of apportionment of the amounts due under the several policies under the agreed loss of $35,000 which was sent to appellant was not produced at the trial. Appellees requested appellant to produce the document, and counsel for appellant denied any knowledge of it. Where an original document is in the hands of the opposing party, the party may introduce secondary evidence of its contents where the opposing party fails or refuses to produce the original on proper demand. (Union Surety and Guaranty Co. v. Tenney, 200 Ill. 349.) It was not necessary, however, for appellees to produce the proof of loss approved by appellant’s adjuster and filed with it in order to establish the agreed amount of the loss. Appellant’s adjuster was called as a witness by appellant and testified in his direct examination that he agreed with appellees “on what the amount of loss and damages should be in the event of liability.” There appears in the record in several places competent evidence to the effect that the adjusters agreed that the amount of the loss was $35,000. The policy on which action is brought provides that it shall be void if there be kept, used or allowed on the premises gasoline and other named inflammable articles exceeding twenty-five pounds in quantity. There is attached to the policy a gasoline permit, which grants permission to keep and use on the premises not to exceed ten gallons of gasoline, provided it is kept in a tight and entirely closed metal can free from leak. At the time of the fire there was in the basement of the premises insured a gallon glass container substantially full of gasoline. Appellant contends that the keeping of this gallon of gasoline in a glass container renders the policy void. This court has held that the keeping of prohibited articles on the premises in violation of the provisions of the contract of insurance vitiates it, (Norwaysz v. Thuringia Ins. Co. 204 Ill. 334; Commercial Ins. Co. v. Mehlman, 48 id. 313;) but there must be a plain violation of the contract in order to destroy it. Insurance contracts are prepared by the insurer, and if ambiguous words or terms are used the doubt arising therefrom will be resolved against the insurer. This rule is applied in construing provisions prohibiting designated articles. (Annotation, L. R. A. 1917C, 278.) If the rider had not been placed on the policy in question then the insured might have kept upon the premises a quantity of gasoline in excess of the amount they did keep, without violating the provisions of the policy. When the insurer granted the insured permission to keep ten gallons of gasoline on the premises, provided it was kept in a closed metal can free from leak, it was for the purpose of extending the privilege of keeping gasoline and not for the purpose of adding another condition, a violation of which would render the policy void. At no place in the policy is it said that keeping on the premises a quantity of gasoline less than twenty-five pounds in a glass bottle will render the policy void. Reading the two provisions of the policy together we have this result: The policy shall be void if more than twenty-five pounds (approximately three gallons) of gasoline is kept on the premises, except that permission is granted the insured to keep ten gallons of gasoline on the premises provided it is kept in a tight, closed metal can free from leak. There is nothing in the policy that justifies our holding that the keeping of a gallon of gasoline in a glass bottle renders the policy void. There is no evidence whatever in the record indicating that this bottle of gasoline contributed in the slightest degree to the cause or extent of the fire. The judgment of the Appellate Court is affirmed. Judgment affirmed. Mr. Justice Heard took no part in this decision.