United States Fire & Marine Insurance v. Kimberly

Brent, J., delivered the opinion of the Court. This action is brought upon a policy of insurance, issued on the 28th of March, 1867, by the United States Fire and Marine Insurance Company of Baltimore, to Kimberly Bros., by which the company agreed to insure them against loss and damage, to tiie amount of eight thousand dollars, “ on the — 230 — four-story briol: warehouse, situate on Wide Water street, near Church street, Norfolk, Va. First floor occupied by machinery, used for making barrels, with privilege of storing barrels on the premises, and other merchandise not more hazardous. Steam-boiler encased in brick about ten feet from building.” This portion of the policy was written, and upon it arises the principal question presented by this appeal. The policy also contains the following clause: “In all applications for insurance of property, the applicant must furnish an accurate and just description of the same, viz: of what materials each building is constructed; whether occupied as a private dwelling or hoto otherwise; where situated; the^name of the present occupier; how situated with respect o other buildings. And in the insurance of goods, wares and merchandise, the place where the same are deposited to be described; also, a general description of such goods; and whether any manufactory is carried on in the premises; all of which is to be certified and attested in such manner as the nature of the case may admit. And if any person or persons shall insure his or their building or goods, and shall cause them to be described in the policy otherwise than they really are, so that the same be charged at a lower premium than would otherwise be demanded; or if such description be false or fraudulent, such insurance shall be void and of none effect.” The premises had been leased on the 1st of February, 1867, for two years, to the firm of Baird & Roper, and at the time of issuing the policy, were used for no other purpose than those described in the written part of it. Subsequently, small circular saws and a work bench wTere introduced in the second story for the purpose of making boxes, and had been used for that purpose in the season, which was spring, summer and early fall; but this description of work had ceased, and no boxes had been made for from two to four months before the fire. The circular saw's and work-bench were left, however, in the building, and evidence wras offered, tending to show — 231 — that the work was to be resumed at a future time. A lathe had also been put up, the day preceding the night of the fire, for the purpose of making broom-handles and brush-blocks, but had never been used. The appellants insist, that the written portion of the policy is a continuing warranty, and that it was broken by the introduction of the manufacture of boxes upon the premses, during the running of the insurance. There can be no doubt, from the apparent conflict of the authorities which have been cited, that it is sometimes very difficult to determine whether the stipulations in a policy are descriptive only, or are intended by the parties, that the premises should continue to be used in the manner designated and in no other. But in the present case, we think the intention is very clear, and that the written portion of this policy is nothing more than a warranty in prcesenti,. The second clause of the policy, which we have quoted, requires the applicant for insurance to describe with accuracy the building to be insured— how occupied, the materials of which it is constructed, and where and how situated with respect to other buildings. If the description is untrue, so that a lower premium is charged than would otherwise be demanded, the policy is thereby rendered void. The use, to which this building was appropriated, that of manufacturing barrels, is among those excepted in the printed portion of the policy, and its statement was an essential part of the description to enable the insurers to fix the amount of premium to be paid for the risk. Had it been omitted, the description would have been imperfect; and as that use was continued up to the time the fire occurred, no recovery for the loss could have been had upon the policy. The clause certainly requires a true and accurate description of the use and occupation of the property under the penalty of forfeiture, and if such description is not in the written portion, it, is no where to be found in any other part of the policy. Courts are not disposed to favor a warranty by construction, and if the terms used are fully satisfied — 232 — as a description, they will not be extended to include a warranty, unless it is clearly expressed that such was the design and meaning of the parties. These views are sustained by authorities entitled to great consideration. In the case of Blood vs. Howard Fire Ins. Co., 12 Cushing, 472, the policy being upon a building “ of wood, two stories high, formerly used as a machine shop, all of which business is now stopped and shop fastened up, and only used for the purpose of the meeting of the band, during two evenings of the week, on the second floor,” it was held to be a description of the build- ' ing, and not a warranty of its future use or occupation. In the case of Smith, vs. Mechanics & Traders’ Ins. Co., 32 N. Y., 399, the policy was upon a “two-story framed building, used for winding and coloring yarn, and for storage of spun yarn, with the machinery and fixtures in it,” it was held, as the terms of the clause were fully satisfied as a description, they would not be construed to be a continuing warranty of future .-use. To the same effect are the'cases of O’Neil vs. Buffalo Fire Ins. Co., 3 Comst., 122; Billings vs. Tolland County Mutual Fire Ins. Co., 20 Conn., 139; Catlin vs. Springfield Ins. Co., 1 Sum., 435, and Joyce vs. Maine Ins. Co., 45 Maine, 168. The cases in 2 Denio, 75, and 3 Seld., 370, relied upon by the appellant in this case, are referred to by the Court in their, opinion, in 32 New York, 399, and held not to be in conflict with the decision in that case. There is another clause in the policy before us, which furnishes very conclusive proof, that the parties never understood or designed the written portion in question to be anything more than a warranty of present use. In that clause “ it is agreed and declared to be the true intent and meaning of the parties hereto, and of these presents, that in case the above mentioned premises shall, at any time after the making and during the time this policy would otherwise continue in force, be appropriated or used for the purpose of carrying on or exercising the trade, business or vocation of soap-boiler, tallow-chandler, brewer, maíster, baker, rope-maker, sugar-re — 233 — finer, distiller, chemist, varnisli-maker, paper-maker, stable-keeper, tavern-keeper, china, glass or earthenware seller, oil and col orinan, printer, bookbinder, cooper, carpenter, cabinetmaker, coach-maker, boat-builder, ship-chandler or apothecary, or any manufactory which requires the use of fire-heat, or shall be used for the purpose of storing therein gunpowder, hemp, flax, oils, pitch, tar, rosin, turpentine, spirits of turpentine, aqua fortis, straw, hay, grain unthrashed, fodder, distilled spirits, or other hazardous goods, for theatrical or other public exhibitions, steam-engine used or undergoing repairs, then and from thenceforth, so long as the said premises shall be wholly or in pari appropriated or used for any or either of the purposes aforesaid, these premises shall cease and be of no force or effect, unless otherwise specially agreed by this corporation, and such agreement be signed in writing in or on the policy.” If the parties understood that the terms of the policy had already warranted against other use of the property insured, it is not perceived why this special agreement should have been entered into. There was substantially a similar clause in the policy in the ease in 12 Cushing, 474, already referred-to. The Court says in regard to it, “this leaves no room for doubt that the sole object of the warranty in question was to ascertain the precise nature and condition of the property at the time the risk was proposed to the defendants in the application of the plaintiff, and enable them to judge'of its extent and character, and the rate of premium at which they would insure it. But it is clear that they did not rely upon it as an executory stipulation, by which the plaintiff was to lie bound after the contract was entered into. To guard against any increase of risk which might arise in the structure or use of the property, they relied upon a special agreement., designed for that purpose only. If they relied on the warranty, such an agreement was superfluous and useless.” This reasoning applies with equal force to the case before us. But further, the two clauses are inconsistent, if the first is to be taken as a warranty of future use, for the second does not avoid the — 234 — policy absolutely by the use or occupation of the premises by any of the prohibited trades, but only suspends it during such use or occupation. They .cannot both stand together with the interpretation contended for by the appellant. The only manner in which they can be recited, is by construing the first to be a present warranty of the condition of the property at the time of the application for insurance, and the second as the sole special agreement between the parties in reference to its future use. And this construction, giving efficacy to each part of the policy, we think is the correct one. There is no doubt, that under the stipulations of the policy the insured could not have recovered, if the premises had been appropriated or used at the time of the fire, in the manufacture of boxes, as that occupation is embraced in the'terms “ trade, business or vocation of a carpenter.” The parties, however have contracted that such prohibited use destroys or suspends the force and effect of the policy only so long as the premises shall be appropriated or used for any of the prohibited purposes. The plain meaning of the language employed is, not that the policy is rendered void to all intents and purposes by such prohibited use or occupation, but that it is to have no force or effect only during the time the premises are so used. Or in other words that it is then suspended. When therefore the use ceases to exist, the policy is again in full force, and the insured restored to all his rights under it. New England Fire & Mar. Ins. Co., 32 Ill., 221. But it has been argued that the building in question was in fact appropriated at the time of fire to a prohibited use, inasmuch as the saws and work-bench, which had been used for the manufacture of boxes, still remained in the building to be again used for that purpose. This is not such an appropriation as is contemplated by the policy. The thing guarded against by its stipulations is increased risk, and this would bo occasioned only by a present use and occupation of the building in carrying on and conducting the prohibited manufacture. So soon as there was a suspension or abandonment of — 235 — it, as there liad been in this ease for some months, the risk ceased. We do not think, therefore, that there ivas any such use or appropriation of the building, at the time of its destruction by lire, as will prevent a recovery upon this policy. These views cover the propositions presented in the several prayers offered, and it results from them, that the Court below properly rejected the prayers of the defendant, and granted the one offered by the plaintiffs. (Decided 21th February, 1871. Judgment affirmed.