Franklin Fire Insurance v. Chicago Ice Co.

Bartol, C. J., delivered the opinion of the Court. This is an action of covenant on a policy of insurance, issued by the appellant to the appellee, “ on their one-story frame ice house, -situate, detached, on the line of the Chicago and N. W. R». R., at Chrystal Lake, McHenry Co;, Illinois.” — 117 — So question arises upon the pleadings, all errors therein having been waived by agreement. The first ground of defence relied on by the appellant, was the failure of the appellee to furnish the preliminary proof of loss, in manner and form as required by the tenth condition of the policy. The fire occurred on the morning of the 11th of August, 1869, and on the same day, notice thereof was given to the agents of the appellant, who on the same day notified the appellant. Proofs of loss were made up and transmitted to the appellant within a reasonable time, but it is objected that they were defective and insufficient. The appellee on the other hand contended that the appellant, by its conduct and proceeding, after it had been notified of the fire, and received the proofs of loss, had waived all objection thereto, and ivas precluded from objecting to their sufficiency. By the first prayer of the appellee (which was granted) the jury were instructed that if they should find from the evidence. the facts therein enumerated, the appellant could not. now object to the sufficiency of the proofs of loss, or to the absence of a certificate as required by the tenth condition of the policy. Distinct objection to this prayer was made in the Court below, on the ground of the want of evidence to support it; and the same objection is urged in this Court by the appellant ; not because there was no evidence tending to prove the facts enumerated in the prayer, but because there was no testimony in the cause of an express waiver, as required by the eighth condition of the policy; without which, it is argued, the obligation to furnish preliminary proof, in accordance with the tenth condition of the policy, could not be released; and that an implied waiver would not be sufficient, and could not be shown in the face of the eighth condition. Apart from the terms contained in the last clause of the eighth condition of the policy, there can be no doubt that the facts staled in the appellee’s first prayer, if believed by the — 118 — jury, wopld amount to a waiver of the defects in the preliminary proofs, and preclude the appellant from objecting to their sufficiency. Allegre vs. Ins. Co., 6 H. & J., 412, 413; Edwards vs. The Baltimore Fire Ins. Co., 3 Gill, 186; Franklin Fire Ins. Co. vs. Coates & Glenn, 14 Md., 294, 295; Tayloe vs. Merchants’ Fire Ins. Co., 9 Howard, 403, 404. These decisions sufficiently show the principles which govern in ordinary eases, arising under policies of insurance, containing stipulations with regard to the preliminary proofs of loss to be furnished by the assured. The difficulty in the present case grows out of the terms of the eighth condition in the policy; which is in these words: “Should the assured, in making application for insurance, submit a survey, plan or description of the property herein insured, upon which this insurance is effected, such application, survey, plan or description shall be' considered a part of this contract and a warranty by the assured. And any misrepresentation whatsoever, whether in written application or otherwise, or any omission to disclose and make known every fact material to this risk, will vitiate this policy. Nothing but a distinct, specific agreement, clearly expressed, and endorsed on this policy, shall operate as a waiver of any printed or written condition, warranty or restriction therein.” The effect of a provision of this kind, in a policy of insurance, was considered by the Supreme Court of Massachusetts, in Blake vs. Exchange Mutual Ins. Co., 12 Gray, 265. The language of the very able Judge who gave the opinion of the Court is so apposite to this case, that we quote it at length. “How far the provisions as to the form of the notice and proofs of loss, after a valid contract has been made and a loss taken place under it, can be regarded as conditions of the contract itself, it is not necessary to determine, nor whether their being classed under the designation of conditions of insurance could change the nature and purpose of the stipulations themselves; for it seems to us that the question is not as to the provisions of the contract, but as to the per — 119 — formalice of the provisions. The plaintiff is not seeking to set up a contract from which a material provision has been omitted by the oral consent of the officers of the company. The policy contained the usual provisions as to notice and proofs of loss. Upon the happening of the loss, the plaintiff sent to the defendants certain notices and proofs in pursuance of the requisition of the by-laws upon the subject. If the notices were defective, good faith on the part of the underwriters required them to give notice to the insured. If they failed to do so, if they proceeded to negotiate with the plaintiff, without adverting to the defects, if still further, they put their refusal to pay, on other and distinct grounds, they are, upon familiar principles of law, estopped to set up and rely upon the defective notices; the law assumes that the notices were correct, and will not listen to the defendant when he seeks to show the contrary.” After citing several authorities the learned Judge proceeds: “ If the plaintiff relied upon any exemption from the obligations of the policy, or any modification of them by the agents or officers of the company, or any addition, he must show such exemption, modification or addition by endorsement upon the policy. But the question whether a stipulation as to notice and proofs of loss has been fulfilled, or whether the defendant is in a condition to be heard upon that question, must be tested by the ordinary rules of law. There is a time when objections in matters of form must be taken. If they are not then made, they never can be made. The law does not say the procedure was perfect, but that the question is not open. The adherence to and liberal application of this principle are necessary to the maintainance of good faith and fair dealing in judicial proceedings.” We concur in the reasoning of the Court in 12 Gray, and consider it applicable to the present case. According to our construction of the last clause in the eighth condition of the policy, it refers to those conditions and provisions of the policy which enter into and form a part of the contract of — 120 — insurance and are essential to make it a binding contract .between the parties; and which are properly designated as conditions; and that it has no reference to those stipulations which are to be performed after a loss has occurred; such as giving notice and furnishing proofs of loss. These are not conditions inherent in the contract itself, but stipulations to be performed by the assured as preliminary to his right of action on the contract, or to the liability of the company to pay the loss. When we read this part of the eighth condition with the context, and construe the whole together, we are satisfied that it has no reference to the requirements with regard to the preliminary proofs of loss found in the “tenth condition” of the policy; and that it was not contemplated with respect to them, that no defect or omission could be waived by the company without a written, agreement to that effect endorsed upon the policy. The cases of Hale vs. Mechanics’ Mutual Fire Ins. Co., 6 Gray, 169; Forbes vs. Agawam Mutual Fire Ins. Co., 9 Cush., 470, and Abbott vs. Gatch 13 Md., 314, cited by the appellant seem to us to be inapplicable. In each of those cases, the matters which the parties stipulated should be evidenced only by agreement in writing, constituted an integral part of the contract essential to make it binding between the parties. In our opinion there was no error in granting the first .prayer of the appellee; and for the reasons before stated the second prayer of the appellant was properly refused. The next question arises upon the first prayer of the appellant. The witness James P. Smith, Jr., (the president of the ice company,) stated in his testimony that the “ice house was n.early as good as new, for the reason that he always kept a crew of men and a carpenter or two about the building the year round, and was constantly making repairs and keeping the building in thorough condition.” The appellant contends, and by its first prayer asked the Court to instruct the jury that these facts, if believed by them, vitiate the policy — 121 — under the memorandum printed thereon entitled “Builder’s Bisk,” which provided that “the working of carpenters, roofers, tinsmiths, gasfitters, plumbers, or other mechanics, in building, altering or repairing tbe premises named in the policy, without permission endorsed in writing on the policy, should vitiate it.” "We think that by a fair and reasonable interpretation of this article of the policy, it cannot be understood as referring to tbe casual patching up of tile building, such as spoken of by the witness; but as prohibiting such hazardous use of the building as is generally denominated “Builder’s Risk,” which arises from placing it in tbe possession or under the control of workmen for rebuilding, alteration or repairs. To place upon it such a construction as contended for by the appellant, would defeat the intent of the parties, and be repugnant to the written clause of the policy insuring the building; which, looking at its size, structure and use, must have reasonably contemplated tbe necessity for such repairs as the witness described, as indispensable to the proper conduct of the appellee’s business. The evidence shows that the building was two hundred and sixteen feet long and one hundred and forty feet wide; that the height, from the top of the sill to the under sill of the plate, was twenty-six feet; that the walls were of joists three by six inches, hollow two feet thick, filled in with tan; the materials all wood, bound with ironr There was a balcony round the upper part of the house, and an inclined plain, or tramway, fourteen feet wide, extending from tbe lake to the plate of the ice house, on which the ice was dragged up by horse power. Tbe capacity of the house was twenty-four thousand tons of ice. It is very obvious that a building so constructed would necessarily be constantly jiable to be injured and damaged by the use for’which it was intended, rendering it indispensable for the prosecution of the business of tbe appellee, that breakages should be repaired, as they occurred; all of which was known to the appellants, and will be presumed to have been in their contemplation at — 122 — the time the contract was made, and permitted by the‘written terms of the policy insuring the premises as an ice house. . For the principles governing the construction of policies of insurance, we refer to Harper vs. The Albany Mutual Insurance Co., 17 N. Y., 194, and Washington Fire Insurance Co. vs. Davison and Symington, 30 Md., 92, 107, 108. We think there was no error in refusing the appellant’s first prayer. And upon the same principle, the modification made by the Court below in the appellant’s third, sixth and seventh prayers, is free from objection. The modification added to the appellant’s fifth prayer stated the law correctly, and though it appears to have been excepted to below, has not been made a ground of objection in the argument in this Court. The appellant was not entitled to have its eighth prayer granted, as there was no evidence whatever of any misrepresentation as to contributing insurance made at the time of the contract. The .proposition asserted in the ninth prayer, that the assured was obliged to continue the same insurance on the property as existed at the time of the application, is erroneous, and was properly rejected. There was no such warranty in the policy. Forbush vs. Western Massachusetts Insurance Co., 4 Gray, 337. * The appellant’s tenth prayer was also properly refused. It asks an instruction to the jury, “that there is no legal and competent evidence in the cause to show that the plaintiff had any legal insurable interest in the property mentioned as destroyed by fire, either at the time of the making of the policy, or at the time of the fire.” The proof in the cause is, that the appellee was in possession of the property, claiming and occupying it as its owner. This is prima facie evidence of'title. “A person in possession of land is prima facie presumed to be seized in fee.” 1 Phillips on Evidence, 646, and note. In the absence of proof of an outstanding title in others, or any iucumbrance upon the — 123 — property, this prima facie presumption of a seizin in fee, growing out of the occupation by the appellee as owner of the property, was sufficient to show an insurable interest therein, and consequently there was no error in rejecting the tenth prayer of the appellant. (Decided 22d May, 1872.) There appearing to be no error in the rulings of the Court below, we affirm the judgment. Judgment affirmed.