President of the Maryland Fire Insurance v. Whiteford

Stewart, J., delivered the opinion of the Court. The party insured in this case, according to the terms of their policy, were not to keep in the buildings occupied by them, any articles, goods, or merchandise denominated hazardous, or extra or specially hazardous, in the conditions of insurance annexed to the policy, except as provided in the policy, or thereafter agreed to by the insurers in writing upon the policy. The original contract between the parties was modified by the endorsement upon the policy of the 24th November, 1865, specially referring to the article'described as “benzine.” This endorsement is in the following language: “ Permission given to keep one barrel of benzine or turpentine in tin cans, and one half-barrel of varnish, for use in No. 9 Commerce street.” As we comprehend the import of this endorsement, the quantity mentioned of benzine was authorized to be used on the premises, and unquestionably the insured had the permission to keep one barrel of benzine in tin cans upon the property, without incurring risk .of forfeiture of any of their rights under the policy of insurance. [225] A fair and reasonable construction must be given to the endorsement, so far as the intention of the parties can he deduced from the terms employed. Policies of insurance, like other contracts, should have such practical and ordinary interpretation, as to carry into effect the obvious understanding of the parties concerned in them. This endorsement is not a warranty, but a permission given by the insurers, and to be substantially complied with on the part of the insured, to enable them to claim the benefit of the privilege. Judging of this endorsement by the rules of ordinary construction, we think there can be no doubt of the real meaning and purpose of the parties to allow the quantity of one barrel of benzine to be kept for use on the premises, but for better security against fire, from the dangerous character of the article, the benzine was required to be kept, not in the wooden barrel, but in a suitable metallic vessel, either in tin cans, or in one tin can, equally safe and proper, and better calculated than the wooden vessel to prevent accident from its use. It was proven at the trial that benzine is the product from the distillation of coal oil or petroleum, the most volatile of which is called gasoline; that benzine is inflammable and explosive when in contact with the atmosphere, and vaporizes from agitation. According to the testimony of those familiar with its character and properties, the keeping of benzine in one tin can, large enough to hold the quantity of a barrel, or less amount, is quite as safe, if not more so, than to keep it in tin cans. There was, therefore, a substantial compliance with the provisions of the endorsement, in keeping the quantity specified in one tin can. If there could be any rational doubt of this being the purport of the language, apposite analogy will fortify the construction we put upon the endorsement. [226] A representation is substantially complied with by the adoption of precautions which, if not those exactly stated in the application, may be such as tend to accomplish the same purpose, and considered equally efficacious ; for example, when it is stated that ashes are taken up in iron hods, it would be a substantial compliance if brass or copper were substituted. So when it is represented that casks of water, with buckets, are kept in each story, if a reservoir be placed above, with pipes to convey water to each story, and found by skilful and experienced persons, to be equally efficacious, it would be a substantial compliance. Angell on Ins., 195; referring to Houghton vs. Manufacturers’ Ins. Co., 8 Metcalf, (Mass.,) 122. Under the permission to keep the benzine for use, to the extent specified, the insured were not restricted in their right to procure it in any usual way; and the purchase or procuring of a barrel of it from merchants or other persons having it, and its introduction and transfer from the wooden barrel to the tin can, were allowed to' the insured by every fair intendment. If it had been the intention of the parties to make the permission more restrictive, proper terms to that effect should have been employed. We perceive no valid objection to the prayer of the appellee, insisting that the insurers were not exempted from their liability for the loss in this instance, because of the introduction of benzine in the wooden barrel,’its transfer, and the keeping of it on the premises of the insured as described in the prayer. Certainly its temporary introduction in the barrel, was not the keeping of it in the wooden barrel, and cannot, in any just sense, be considered violative of the terms of the endorsement. The concluding portion of the appellees’ prayer is also unobjectionable; as the fire may have been attributable [227] to tbe want of ordinary care, or tbe fault and negligence of the appellees, or their employes, or agents, yet, in the absence of fraud or design, their right of recovery was not barred thereby. Eires frequently occur from some negligence of the party assured or his agents, and the underwriters insure against this, unless they choose to stipulate otherwise, which has not been done in this case. A loss by fire occasioned by the fault and negligence of the insured or his servants, and without fraud or design, is a loss within the policy, upon the general ground that the fire is the proximate cause of the loss; and, also', upon the ground that the express exceptions in policies against fire, leave this within the scope of the general terms of such policies. Columbia Ins. Co. vs. Lawrence, 10 Peters, 578; Johnson vs. Berkshire Mutual Fire Ins. Co., 4 Ala., 388. There is no exception in the policy here', to' exempt the appellants from their obligation to indemnify the insured, on account of such negligence. But, on the contrary, the appellants promise to make good all loss or damage, within the limits of the insurance, as shall happen by fire, except any loss by fire, “ by means of any invasion, insurrection, riot, or civil commotion, or of any military or usurped power.” These express exceptions, necessarily exclude others to be implied, extending to negligence or fault on the part of the insured; where there is fraud or design and not mere carelessness occasioning the fire, other considerations may fortiiy exemption and exonerate the company insuring. No allegation of fraud is made or proved in this, instance. The prayers of the insurers could not be properly granted by the Court, insisting as they did by the first, that the habit of the insured, as they needed benzine, of bringing it upon the premises in a wmoden barrel, and then trans [228] ferring it to the can, as described in the prayer, did amount to keeping it on the premises in a wooden barrel, and constituted a breach of the permission, construing it as a warranty; and by the second prayer, upon the similar theory of a warranty, that because the appellee, the insured, usually kept benzine in a quantity, not exceeding one barrel, in one large tin can, and at the time of the fire were having the can filled from a barrel of benzine on the premises, they violated or committed a breach of the endorsement. (Decided 30th June, 1869.) The mere fact of the barrel of benzine being on the premises for the purposes described, could not, upon any fair construction of the terms of the contract, amount to keeping benzine in a wooden barrel upon the premises. Nor could its being kept to the amount of a barrel, in one tin can, be reckoned other than a substantial compliance with the endorsement upon the policy, and such as the parties, it may be presumed, would have expressly agreed to at the time of tbe endorsement, if required. Under the terms of the original policy, the keeping of any of the prohibited articles, or the storing thereof on the insured premises only operated to make void the policy, so long as they were so used, but the policy was not absolutely forfeited by the storing or keeping of the forbidden article. "What may have been the habits of the insured in regard to the keeping of the benzine, could, neither under the terms of the original policy or the endorsement have any application, unless at the time of the occurrence of the fire, the barrel of benzine was actually stored or kept upon the premises in the wooden barrel. The hypothesis of facts assumed in the prayers of the insurers,, as well as their theory of construction of the contract between the parties, was liable to objection, and the Court below very correctly refused to grant them. Judgment affirmed.