Carr v. Roger Williams Ins. ( 1881 )

The motion for a nonsuit is founded on the fact that, at the time of the fire, the buildings containing the property insured were unoccupied. Assuming this to be so, it was competent for the defendants to waive this provision of the contract of insurance, and if there was competent evidence of such waiver the motion was properly denied.

The policies were obtained through Morrill Danforth, who were general insurance agents, but were not specially appointed agents of the defendants. The plaintiff applied to them, informing them that Fifield had purchased an interest in the property, and that he held a mortgage upon Fifield's interest, and requesting them to examine the property, stating the amount of insurance wanted, and the way in which the building and machinery were used. Morrill Danforth replied that they were well acquainted with the mill; that they had a full survey of it, and, if the plaintiff desired insurance, it was only necessary that he should state the amount. In September, 1876, Fifield told Morrill Danforth the mill was not running, and that it could not be run all the time owing to the lack of water. Again, in September, 1877, Fifield told Morrill Danforth that the mill might not run all the time. Neither the plaintiff nor Fifield knew that Morrill Danforth were not the authorized agents of the defendants.

Soon after the fire, Smith, the defendants' agent, told Fifield it was necessary for him to make out a schedule of the loss and send it to the defendants, at the same time insisting that the defendants were not liable by reason of the non-occupation or non-operation of the mill. The schedule was sent as requested, to which Smith replied, requesting another, and giving directions what it should contain and how it should be executed. It was prepared and forwarded to the defendants, and, about two months after, the plaintiff having received no reply, his attorney wrote for an explanation. Smith replied that no schedule such as was required had been received. The attorney prepared and sent such a schedule, stating therein that "the mill was last operated by Wm. Gordon, who leased it from assured, on or about April 1, 1877, for fourteen months. After running it for some six months more or less, Gordon abandoned the property, which has since been unoccupied and idle." To this the plaintiff caused to be added the following, — "of which said company had due notice, and said company was duly notified in the outset that, owing to the nature of the business and the lack of a constant supply of water, said machinery would necessarily be idle a part of the time;" and the schedules were then duly executed and sent to the defendants, who acknowledged their receipt, and informed the plaintiff that they admitted no liability "for the reason that the said policy by its conditions was rendered void from the fact that the property was unoccupied and inoperative at the time of the fire, and had been so for months previous, and no consent of the company was endorsed on the policy as the conditions require."

There was no denial of the statement in the schedule that the defendants had notice and were fully informed at the outset that the machinery would necessarily be idle a part of the time. After receiving the defendants' answer to the statements in the last schedule sent, the plaintiff brought these suits.

Assuming that the condition as to occupation applies to this case, there was evidence on which the jury might have found a waiver. The fact that the defendants did not deny knowledge regarding the occupation of the premises, but placed their defence on the sole ground that their consent was not endorsed on the policy, was evidence from which, unexplained, the jury would have been warranted in finding that they did know the facts in regard to occupation that were stated in the schedule of loss. The defendants' answers to the last schedule of loss sent them were, in legal effect, a confession and an attempted avoidance, an admission of knowledge and an endeavor to evade the force of it. If, with full information on the subject of the use and occupation of the property insured, the defendants issued the policies, it is immaterial whether their consent was endorsed or not. By issuing them they waived all conditions which they knew or had reason to believe were violated. Marshall v. Columbian Ins. Co., 27 N.H. 157; Campbell v. Ins. Co., 37 N.H. 35; Taylor v. Ins. Co., 51 N.H. 50; May Fire Ins. 605, 627; Wood Ins., ss. 496, 497. The fact that the defendants required schedules of the loss after they were informed of the facts upon which they rely as a defence, was competent on the question of waiver of the alleged breach of the conditions as to occupation. When Smith, the defendants' agent, was informed of the non-occupation, he told the plaintiff it was necessary to make out a schedule of the loss and send to the defendants; and he called for a second and a third. It would not be unreasonable for the plaintiff to infer, that while the defendants might not be legally liable because there was a breach of the conditions of the policies, they did not intend to insist on such breach as a defence against the plaintiff's claim under them. The claim that the policies were void on the ground of non-occupation, and the calling for proofs, which were only necessary upon the theory that they were valid, were inconsistent; and the fact that the call for the proofs was subsequent to the knowledge of facts which might be insisted on as a reason for avoiding their liability, afforded evidence of a waiver of the breach of the conditions. What weight it should receive was for the jury. The motion for a nonsuit was properly denied on this ground.

But there is another ground on which the motion was properly denied. Neither the insured nor the plaintiff owned the building or had any interest therein except as lessee, and the policy did not cover the building. The insurance was upon "the machinery, shafting, belting, tools, and fixtures contained in a two-story frame building and additions to same, known as the Kearsarge Paper Mill." The mention of the building is merely descriptive of the location of the property. The property being movable, it was important to state its location to distinguish it from other property of the same kind. The description would not necessarily have been different if the property had been stored. The conditions, the breach of which the defendants claim avoids the policies, have no application to the facts of these cases. They relate to the building and nothing else. The term "premises" does not include and is never used to designate personal property. It is used, both in law and in common speech, to indicate lands and tenements. Robinson v. Ins. Co., 27 N.J. Law 134; Howard Fire Ins. Co. v. Cornick, 24 Ill. 455. The connection in which the term is used indicates no intention to use it in any but its natural and ordinary sense. But to defeat the plaintiff's recovery we are compelled to find that there was such an intention, and to give to the word a strained and unusual signification. We have found no case in which it is even hinted that the word "premises" is ever used in connection with personal property only. If the insured had owned the building and the policy had covered the building as well as the machinery, it might be claimed that the condition relating to occupancy was applicable to both building and machinery, and other property described in the policies; but the fact that the title to real and personal property is in different hands, coupled with the further fact that we are compelled to give to the word "premises" an unusual and unnatural meaning, sustains the view that these conditions have no application to this case. And when we consider that the policies cover personal property and nothing else, because the insured had no insurable interest in the real estate, the inference fairly to be drawn is, that at least one of the parties to the contract did not understand that they were making a contract whereby they were bound to keep their machinery in motion if they would have it insured.

But if it is admitted that the conditions as to occupation and vacancy apply to such property as is described in these policies, we cannot say as matter of law that the plaintiff cannot recover. The question what constitutes vacancy or non-occupation is one of law and fact. to be determined by the trier of the facts. It depends on a variety of circumstances, among which are the situation and surroundings of the property insured, its uses and purposes, and the like. No definite and inflexible rule can be drawn that shall apply alike to all cases. The line between occupancy and unoccupancy, vacancy and the reverse, cannot be definitely drawn. The question must be decided in view of all the circumstances of each case. Cummins v. Ag'l Ins. Co., 67 N.Y. 260; Whitney v. Black River Ins. Co., 72 N.Y. 118; Herrman v. Merchants' Ins. Co.,81 N.Y. 184; Phoenix Ins. Co. v. Tucker, 92 Ill. 64; American Ins. Co. v. Foster, 92 Ill. 334; Stupetski v. Transatlantic Fire Ins. Co., 43 Mich. 373.

On this question the evidence was that the machinery was not in operation from the date of the policies until the fire. Just before it was burned arrangements were being made to put it in operation. The machinery and other property insured was in its proper place from the issue of the policies to the time of the fire. On this evidence we cannot say, as matter of law, that the jury could not have found that the premises were not vacant and unoccupied, within the meaning of those words as used in the conditions contained in the contracts in suit.

It might be argued on another ground, that there was no breach of the conditions contained in the policy issued by defendant "A." The condition there is, that if the premises shall become vacant or unoccupied, the policy shall be void. It might be said that this condition relates to something to occur in the future; that the language used admits of no other construction; that it means some change in the situation of the property, to come into existence in the future; that the policy must be understood as covering the property in the condition it was in when insured, and the condition must be treated as a stipulation by the insured that its then present condition should not be changed. If this is the correct construction, on which we express no opinion, there is no evidence of a breach of the conditions of that policy, and the plaintiff is entitled to recover.

The defendants object that the property belonging to Fifield, and the policies being issued in his name, the action cannot be maintained in the plaintiff's name. If this were a valid objection, it might be avoided by an amendment (Stebbins v. Ins. Co, 59 N.H. 143, Folsom v. Ins. Co.,59 N.H. 54, The State v. Hollis, 59 N.H. 390, Boudreau v. Eastman,59 N.H. 467), but the case shows that the plaintiff's claim, under his mortgage, exceeds the amount of both policies. Fifield, consequently, has no interest in them except in so far as they go to extinguish his debt. This being the case, no amendment is necessary.

Case discharged.

All concurred in the result, on the ground that the evidence on the question of waiver was competent for the jury.