Faust v. American Fire Insurance Co. of Philadelphia

91 Wis. 158 | Wis. | 1895

Maeshall, J.

The main question presented on this appeal is whether the presence of a small amount of benzine on the premises for use in the repair shop rendered the contract of insurance void. Keeping in mind the undisputed evidence that the prohibited article was not kept as an article of merchandise for sale, but as an article usually and necessarily kept in operating the business of the repair department of the furniture store, which the policy expressly covered, we find abundant authority to support the general rule, which we adopt, that where a contract of insurance, by the written portion, covers property to be used in conducting a particular' business, the keeping of an article necessarily used in such business will not avoid the policy, even though expressly prohibited in the printed conditions of the contract. To that effect are Mears v. Humboldt Ins. Co. 92 Pa. St. 15; Viele v. Germania Ins. Co. 26 Iowa, 9; Collins v. Farmville Ins. & B. Co. 79 N. C. 279,— cited by appellant’s counsel, to which many may be added: Carrigan v. Lycoming F. Ins. Co. 53 Vt. 418; Stout v. Comm. U. Ass. Co. 11 Biss. 313; Franklin F. Ins. Co. v. Updegraff, 43 Pa. St. 350, 353; Plinsky v. Germania F. & M. Ins. Co. 32 Fed. Rep. 47; Bryant v. Poughkeepsie Mut. Ins. Co. 17 N. Y. 200; Phoenix Ins. Co. v. Taylor, 5 Minn. 492; Whitmarsh v. Conway F. Ins. Co. 16 Gray, 359; Franklin F. Ins. Co. v. Chicago I. Co. 36 Md. 102; Carlin v. Western Ass. Co. 57 Md. 515; Harper v. Albany Mut. Ins. Co. 17 N. Y. 197; Hall v. Ins. Co. of N. A. 58 N. Y. 292; and many others.

In the early case of Harper v. Albany Mut. Ins. Co. 17 N. Y. 197, it was held that the underwriters must be presumed to have been acquainted with the business and with the materials necessarily used in prosecuting it, and to have included such materials in the risk, the same as if each article had been particularly mentioned in the written portion of the policy; that the written portion in that regard will control the printed portion prohibiting the keeping of such articles. This case has been frequently cited and approved, and may be said to be strictly in line with the great weight of authority on the subject. In Hall v. Ins. Co. of N. A. 58 N. Y. 292, the court referred to Harper v. Albany Mut. Ins. Co. 17 N. Y. 197, and several others of like character, stating, in effect, that they were all cases where the use of the prohibited article was necessary in the business; while in the case then under consideration it was only said to be usually used. It was sought by the insurance company to avoid the policy, notwithstanding, by distinguishing between necessary and customary use, but the court held that, under a policy covering a business, permission to use all articles ordinarily, as well as articles necessarily, used must be held to be given and covered by the contract of insurance. In Carlin v. Western Ass. Co. 57 Md. 515, the policy covered a factory and machinery, and prohibited the keeping or use of petroleum. The court held, in effect, that if the engine room and machinery were included in the description of the insured premises, the keeping of petroleum, although among the prohibited articles, would not avoid the policy if the evidence showed that it was an appropriate and customary article used in the assured’s trade for lubricating machinery, and that he kept it solely for that purpose; that the insurance company, when it issued the policy, knew that the factory could not be run without machinery, and it must be supposed to have contracted with reference to such use as an ordinary incident of the business; that if petroleum oil was usual and necessary, then such use must have been contemplated, though prohibited in the printed portion of the policy. The court concluded that the rule in respect to the question under consideration as stated is well settled.

■ It must be recognized that there is some conflict in the authorities on this subject, but the great weight of authority fully .sustains the' rule as above stated.

In the light of the foregoing, obviously the contract of insurance which covered the building to be used as a repair shop in connection with the furniture store permitted all things necessary to the enjoyment of the property for such use. The clause in the written portion of the policy, “ Four hundred dollars on the stock of furniture, upholstery goods, and other merchandise, not more hazardous, usual to a retail furniture store,” must be construed to cover merchandise kept in the trade in the furniture store, and .the words “ not more hazardous ” to refer to such merchandise only and have no .reference to the necessary articles kept for use in'the repair shop. The words “ any usage or custom of trade or manufacture to the'contrary notwithstanding,” contained in the printed portion of the policy, so far as they .would otherwise prohibit the necessary use of benzine in the repair shop, must be held to be controlled by the written portion of the policy, which expressly insures the building in part as a repair shop; this upon the presumption, that must exist, that the parties intended that the repair shop as it was, and as it must necessarily continue tó be if it continued at all, must be carried on with all usual and necessary incidents, and that as. such it was protected by the contract of insurance; also by force of the well-established rule, that the written special description of the particular subject matter, wherever inconsistent with the printed clauses of the policy, must control. ,Citizens' Ins. Co. v. McLaughlin, 53 Pa. St. 485; Cushman v. N. W. Ins. Co. 34 Me. 487; Archer v. Merchant's & 31. Ins. Co. 43 Mo. 434. The construction we thus give the policy renders the contract just and reasonable, and carries out the obvious intention of the parties to it. Any other construction would lead to the absurd result that the prohibitory clause of the policy would absolutely prevent the carrying on of the business expressly permitted in the written portion. Uo such absurdity can be held to have been contemplated by the parties, unless the terms.of the contract are such as not to permit of any other reasonable construction. As said in Corlin v. Western Ass. Co. 57 Md. 515: “ Where the contrary is not expressly made to appear, it is not to be presumed that, when an insurance is effected with reference to an established and current business, whose protection is really the object of the insurance, such a narrow and stringent construction of the provisions of the policy was intended as will necessarily cause its serious embarrassment or suspension.”

The only other question which requires consideration is whether there has been a failure to comply with the condition requiring proofs of loss, so as to defeat a recovery on the policy. The circumstances of the defendant’s adjuster’s visit to plaintiff soon after the fire; his receiving and taking away a list of the property destroyed, furnished by plaintiff, and the retention of the same by the company or its agent; and the denial of liability for the loss on account of the presence of benzine on the premises,— are sufficient to constitute a waiver of the provisions of the policy requiring proofs of loss. Vankirk v. Citizens' Ins. Co. 79 Wis. 627; Zielke v. London Ass. Corp. 64 Wis. 442; McBride v. Republic F. Ins. Co. 30 Wis. 562; Parker v. Amazon Ins. Co. 34 Wis. 363; King v. Hekla F. Ins. Co. 58 Wis. 508; Harri-man v. Queen Ins. Co. 49 Wis. 71; Phenix Ins. Co. v. Bach-elder, 32 Neb. 490; Carson v. Germam, Ins. Co. 62 Iowa, 433; Boyd v. Cedar Rapids Ins. Co. 70 Iowa, 325; O’Brien v. Ohio Ins. Co. 52 Mich. 131. In McBride v. Republic F. Ins. Co. 30 Wis. 562, the court held that when the agent of the insurance company, after examining upon the spot the circumstances attending the loss, told plaintiff he could not recommend the company to pay the loss for certain reasons, it was a denial of all liability on the part of the company, and a waiver of its right to demand the usual proofs of loss. That substantially fits this case. The adjuster visited the premises, and when he discovered the presence of benzine, according to his testimony, he did very little further, and told the assured the policy was to all intents and purposes void; that he could do nothing for him; and that he, the assured, would have to present his claim to the company as provided by the policy. That, coupled with the refusal of the company to hold any communication thereafter with the assured, constituted a denial of liability by the company on the ground of a violation of the clause prohibiting the use of benzine on the premises, and effectually waived proofs of loss.

It follows from the foregoing that the judgment of the circuit court must be reversed and a new trial granted.

By the Gourt.— The judgment of the circuit court is reversed, and the cause remanded for a new trial.