Duncan v. Sun Fire Insurance

6 Wend. 488 | N.Y. Sup. Ct. | 1831

By the Court,

Savage, Cb. J.

It is not denied that one of the buildings insured was destroyed, and four of the others injured, by the peril insured against. The defendants must therefore pay the amount of the plaintiff’s loss, not exceeding the amount insured, unless they are excused in consequence of gunpowder being stored in some of the buildings. Whether the powder was there with the knowledge or agency of the plaintiff, seems to me not very material. The absence of agency or knowledge, on the part of the plaintiff, excuses him from any imputation of fraud, or an intention to violate his contract. The policies say nothing about the knowledge or agency of the plaintiff in storing articles therein prohibited, but the contract is in substance, that if the buildings shall be used for storing articles not privileged to be there, then, so long as they shall be so used, the policies shall cease, and be of no force or effect. The plaintiff could not be supposed to know what articles were deposited in all thesebuildings, they being let to different persons. The building destroyed was divided into four tenements; two of which were used for storing goods, another as a commission store, and the other for counting rooms; but whether he knew that there was powder in the stores or not, if the buildings were used in a manner prohibited by the policy, the liability of the defendants ceased.

The proposals and conditions attached to the policy form part of the contract, and have the same force and effect as if contained in the body of the policy. 1 H. Black. 254. 2 id. 574, 7, n. 6 T. R. 710. 6 Cowen, 576. It is expressly stipulated that the buildings may contain articles denominated not hazardous, hazardous and extra hazardous; but if they contain those included in the memorandum of special rates, while they are so used, the policy shall cease and be of no effect. The stipulations in policies are considered express warranties; an express warranty is an agreement expressed in the policy, whereby the assured stipulates that certain facts relating to the risk are, or shall be true, or certain acts relating to the same subject have been, or shall be done. It is not requisite that the circumstance or act warranted should be material to the risk; in this respect an express warranty is distinguished from a representation. Lord Eldon says: “It is a first principle in the law of insurance, that if there is a warranty it is a part of the contract, that the matter is such as it is represented to be. The materiality or immateriality signifies nothing. The only question is as to the mere fact.” Phil. Ins. 124, 5. A warranty in a policy of insurance is a condition or contingency, and unless that be performed, there is no contract, per Lord Mansfield, 1 Taunt. 345, 6, who was then speaking of a condition precedent; but the same reasons apply to put an end to the policy, where the condition or warranty applies to matters subsequent. In The New Castle Fire Ins. Co. v. Marmoran, 3 Dow, 255, in a policy upon a cotton mill, it was warranted that the mill was conformable to the first class of cotton and woollen rates. According to the proposals of the company, buildings of the first rate of risks were those having sieves or coakles standing at a distance of not more than one foot from the wall; those having stove pipes or flues more than two feet in length, were considered to belong to the second class of risks. At the time of making the policy the building was not of the first class, but had been altered so as to conform to that class before the loss took place. Lord Eldon said, if the mill was warranted as being of the first class, it must be such as it was warranted to be, otherwise there is no contract. In this case I consider the policy and the proposals and conditions annexed as saying in substance, that the buildings are privileged to contain goods—not hazardous, hazardous and extra hazardous—warranted not to contain those included in the memorandum of special rates. If gunpowder, by the policy, is included in the class denominated extra hazardous, then it was privileged to be stored in the buildings insured ; if not, and it is admitted that gunpowder was contained in the buildings at ¡he time of the fire, then the policy was thereby rendered inoperative and of no effect. To.determine whether gunpowder belongs to one or the other of the classifications mentioned, recourse must be had to the instrument itself. The clause in dispute reads thus: e< Extra hazardous. The following trades and occupations, goods, wares and merchandise are deemed extra hazardous, and will be charged 25 cents and upwards, per $100, in addition to the premium above specified, for each class, viz: apothecaries, or druggists,55 &c. enumerating a great number; ending with grain unthreshed, and concluding with a period. Then follows in the same line a distinct sentence, as follows : “ Gunpowder is not insurable, unless by special agreement.55 After which a distinct paragraph commences, as follows: “ Special mem. Gristmills,55 &c. &c. “ will he insured at special rales of premium.55 I understand these proposals as including gunpowder under articles extra hazardous, but distinctly stating that it will not be insured at the same rate as the other articles within the same class. I think the defendants so understood it, as is inferrible from that part of the policy out of which the controversy arises, and which I have quoted. The printed part of the policy excludes every thing denominated hazardous, extra hazardous, or included in the memorandum of special rates, unless specially provided for. This was evidently intended to exclude every thing but such as was considered not hazardous. Gunpowder is either included in extra hazardous, or forms a distinct class; if it forms a distinct class, then the printed form permits gunpowder when it excludes articles hazardous and extra hazardous, which are less combustible, and are insured at lower rates, which is an inconsistency not to be presumed or inferred. My inference from the manner in which the clause relating to gunpowder is printed, and from the fact that it is not treated as a distinct head or class in this stipulation in the policy, is, that it was considered extra hazardous, but not to be insured under that class at the rate of the other articles; and therefore to be excluded from any estimate of loss, unless specifically insured.

My conclusion is, that the plaintiff had a right, by the terms of the policy, to put gunpowder in his buildings insured; but in case of loss by fire, he is not entitled to compensation for such gunpowder; not having insured it by special agreement. If such is not the proper construction of the policy, then there is no positive exclusion of gunpowder, as it is clearly not included in the paragraph headed special mem., and which is referred to in the clause of the policy in question, as “ the memorandum of special rates.” I place my opinion, however, upon the construction of the policy taken all together, that gunpowder belongs to the class denominated extra hazardous; and that of course, the buildings were privileged to contain it.

I am, therefore, of opinion that a new trial be denied.