Rafel v. Nashville Marine & Fire Insurance

By the court: Slidell, J. This action is upon a policy by which the defendants insured Joseph Rafel, “ against loss and damage by fire, to the amountof five thousand dollars, on jewelry and clothing, being stock in trade, contained in the store occupied by him on St. Charles street.” There was a verdict in favor of the plaintiff for $4197 50. The defendants applied for a new trial, which the district judge refused. In doing so, he remarked, that he could not understand upon what principles of law or evidence the jury found the verdict in the case ; but preferred to send the matter before this court for final settlement, rather than to grant a new trial before a jury, which would consume time, and might be attended with equally unsatisfactory results. The first question which presents itself for our consideration is, whether this policy covers a large number of articles which the plaintiff, who was a pawnbroker, held in pawn. The conditions attached to a policy form part of the contract. This has been long settled. See Duncan v. Sun Insurance Company, 6 Wendell, 488. Ellis on Fire Insurance, p. 12. Moreover, the present policy itself declares, that it is [246] made and accepted in reference to the conditions- thereto annexed; which are to be used and resorted to, in order to explain the rights and obligations of the parties thereto, in all cases not therein otherwise specially provided for. The 8th condition of the policy is in these words: “ Goods.held in trust or on commission are to be declared and insured as such; otherwise, this policy will not cover such property. Goods on storage must be separately and specially insured.” The goods in question were not the property of the plaintiff. He had, at best, a privilege upon them. They were his security for monies advanced to the pawners. His holding was in the nature of a trust for the owners, to whom he was to restore the goods upon their paying him the amount loaned. He must be regarded as coming within the class of holders contemplated in the condition of the policy. In the common law States and in England, from which this form of policy was derived, a pawnee is considered as clothed with the character of a trustee. See Kent, vol. 2, p. 583. The condition, upon which alone property held by the plaintiff in trust could be covered by the policy, has not been fulfilled, and the policy never attached to the articles so held. It is not, perhaps, necessary to seek for the motive of this condition; but a reasonable motive for it may be easily imagined. As was said in the case of De Forest v. The Fulton Ins. Co., 1 Hall, 84, the declaration and insurance by the trustee or factor of the goods he holds, as goods held in trust or on commission, must have been required, on the ground that the legal title of the trustee and the special property of the factor, though conferring upon each an insurable interest to the value of the goods, yet did not authorize a calculation upon that active zeal and watchful vigilance in the safe-guard of the goods, which an absolute ownership would insure. See, also, Columbian Insurance Company v. Lawrence, 2 Peters, 49. The case of Brichba v. N. Y. Lafayette Insurance Company, 2 Hall, 375, is not distinguishable in principle from the present. There the plaintiff, effected a policy of insurance against fire, with the defendants, “ on goods and furniture contained in his counting room.” Among other items of loss, the plaintiff claimed a sum of $280, for damage by the fire to certain piano fortes, watches, &c., which had been deposited with him for sale, and on which -he had made advances. The court observed : The third condition annexed to the policy declares, that goods held in trust or on commission shall not be covered, unless they are insured as such. The articles in question were not the property of the plaintiff; they were held by him “ in trust or on commission.” He had a lien upon them for advances, which could have been defeated by a repayment of the money advanced. His interest was not absolute, but conditional; and it could not be covered by a mere insurance upon his own property. If the goods in question were to be covered by the policy, they should have been specified in it as goods held in trust or on commission; and it would be violating the plain terms of the third condition annexed to the policy, if this claim were to be allowed. Another question raised by the appellants is, what kinds of goods are covered by the terms of the policy, which is “ on jewelry and clothing, being stock in trade, contained in the store occupied by him on St. Charles street?” If the words had been simply “stock in trade,” it would have been sufficient to cover all kinds of goods belonging to the plaintiff, contained in the store and pertaining to its business, except, perhaps, such as, under the conditions of the [247] pelicy, might require a special designation. But those words, as they are here used, are limited by the antecedent words, and cannot be considered as comprehending any other effects besides jewelry and clothing. There was no attempt to show by evidence, that any peculiar meaning is attached to such a description by the usage of trade; and we are therefore left to construe the words according to their plain, ordinary and popular sense. Testing the rights of the parties by this standard, we are quite unable to say that the terms “jewelry and clothing,” include such articles as musical instruments, surgical instruments, guns, pistols, books, and many others that appear in the statement of loss. Excluding the articles held in pawn, and those which cannot be classed either as jewelry or clothing, the loss sustained by the plaintiff is below the claim made by him under oath. The excessiveness of the claim over the real loss within the policy, was a fraud, it is said, which, under one of the conditions annexed to the policy, deprived the plaintiff of all recourse. This condition requires the assured who has sustained a loss, to deliver in a particular account of such loss or damage, under oath; and provides, that if there appear any fraud or false swearing, the insured shall forfeit all claim under the policy. To subject the plaintiff to this penalty, it should appear that the exaggeration of his claim was wilful and fraudulent. The plaintiff may well have thought he was covered for the goods held in pawn; and his mistake with regard to his legal rights, is not to be visited upon him as a fraud or perjury. It is therefore decreed, that the judgment of the district court be reversed, and that this cause be remanded for a new trial; the costs of this appeal to be paid by the plaintiff.