Bastian v. British American Assurance Co.

Action upon a policy of fire insurance. The case was tried before the court, findings filed, and judgment entered in favor of plaintiff. This appeal is from the judgment on a bill of exceptions. The policy covered a two-story frame lodging-house and the furniture therein. It was provided in the policy that it should be void "if (any usage or custom of trade or manufacture to the contrary notwithstanding) there be kept, used, or allowed on the above-described premises . . . dynamite."

The answer alleged that dynamite was kept and used upon the premises, contrary to and in violation of the terms and conditions of the policy. The court did not find upon the issue so tendered by the answer, but found that the fire which destroyed the property "was not caused by any of the articles mentioned in said policy of insurance as being prohibited or forbidden to be used, or kept, or allowed upon the insured premises." The court evidently proceeded upon the theory that it was immaterial as to whether or not dynamite was kept or allowed upon the premises, unless it was made to appear that the fire which destroyed the property was caused by the dynamite. It seems to be admitted that at the time of the fire, and for several months prior thereto, there was kept upon the premises a stick and a half of dynamite; in fact, the position of plaintiff's counsel is in accord with that of the court below, and is thus stated: "Counsel for appellant contend that it is wholly immaterial what was the origin of the fire, or what caused the fire, or whether the dynamite in question had anything to do with the fire or not; that the dynamite was upon the premises during the life of the policy of insurance; and its mere presence there was sufficient in itself to render said policy null and void, regardless entirely of the question as to whether the dynamite had anything whatever to do with the fire, or in any manner contributed thereto or to the destruction of respondent's property. If counsel's position on the law be correct, then they must prevail in this court, because it is admitted that during the life of the policy of insurance issued to respondent by appellant on August 19, 1901, respondent had something like ten pounds of dynamite on the insured premises, all of which he had used in sinking a well, except a stick and a half which was in the cellar of his lodging-house at the time the fire occurred."

We are of opinion that the court could not set aside and ignore the plain provisions of the contract of insurance. Defendant had the right to limit its liability by the terms of the contract it made with plaintiff. It agreed to insure the plaintiff's premises, but not in case the plaintiff kept or allowed dynamite thereon. It was expressly stated that if dynamite should be kept or used upon the premises, the policy should be void. There is no question here as to the condition having been waived by any acts or conduct of defendant. The condition was not made to depend upon the question as to whether or not the fire was caused by dynamite. If it were incumbent on the insurer in such case to prove that the fire was caused by dynamite being on the premises, it would render the clause in most cases of no effect. It would place the certain definite stipulation in such a condition that in cases where the origin of the fire was uncertain no effect could be given to it. Most insurance policies contain stipulations that the policy shall become void if the premises are allowed to remain vacant for a certain time, or if the risk is increased by the erection of buildings of a certain character near to the insured premises, yet it has never been held that it is incumbent on the insurance company to prove that the fire was caused by reason of such vacancy or such adjoining buildings. Contracts of insurance are contracts of indemnity upon the terms and conditions specified in the policy or policies. For a consideration the insurer undertakes to guarantee the insured against loss or damage upon the terms and conditions agreed upon, and upon no other, and when called upon to pay the insurer may justly rely and insist upon the terms and conditions of the policy. If the insured cannot bring himself within the terms and conditions of the policy, he cannot recover. The terms of the policy constitute the measure of the insurer's liability. If it appears that the contract has been violated, and thus terminated by the assured, he cannot recover. He seeks to recover by reason of a contract, and he must show that he has complied with such contract on his part. It may be that the terms and conditions are such that the contract is most favorable to the insurer, but this is not for the courts. If the conditions are uncertain, or contradictory, or ambiguous, the courts will construe a doubtful provision in favor of the insured, but this rule does not go to the extent of disregarding a plain provision of the policy. If the parties have made certain terms and conditions upon the terms of which their contract shall continue or terminate, they must abide by them. The terms of an insurance policy, like any other contract, are to be taken in their plain, ordinary, and popular sense. In such case it is the duty of the court to enforce them like other contracts, and not to speculate as to the hardship or injustice of their provisions. In this case the parties plainly agreed that the policy should be void, if the insured kept dynamite on the promises. He kept dynamite on the premises, and it was there at the time of the fire, — it is true, not in a large quantity, but the policy did not allow it in any quantity. An explosion was heard about the time or shortly after the fire started. Whether the explosion caused the fire or occurred after the fire had been started from other causes is wholly immaterial. The explosion may have rendered it much more difficult to control or extinguish the fire. It is said in Ostrander on Fire Insurance (2d ed., sec. 327): "The insurance policy in most cases prohibits the keeping or storing of such explosive substances as gunpowder, dynamite, nitroglycerine, and saltpeter, and the courts have held without exception that when these things are kept on the premises insured, in violation of the terms of the policy, the insuring company will not be liable."

Where a policy contained a clause that it should be void if any burning fluid or chemical oils were used, it was held that the use of kerosene oil on the premises rendered the policy void.(Cerf v. Home Ins. Co., 44 Cal. 320.¹) So where the policy insured a building "while occupied as a dwelling-house" it was held that if the premises ceased to be used as a dwelling-house, but were occupied as a disreputable bawdy-house, it would cause the policy to become void. (Allen v. Home Ins. Co., 133 Cal. 29.) It was there said: "The policy was a contract to pay only in case of loss of the insured premises while occupied as a dwelling-house. The liability was limited by the terms of the contract, and such limitations are held valid. It is the business of the insured, and the burden is upon him, to see that the premises are not used in such manner as to make void the policy. The insurer is at liberty to select the character of risk he will assume, and he is not liable except upon proof that the loss occurred within the terms of the policy."

The rule is laid down in the Civil Code (sec. 2611): "A policy may declare that a violation of specified provisions thereof shall avoid it, otherwise the breach of an immaterial provision does not avoid the policy." (See, also, Slinkard v. Manchesteretc. Co., 122 Cal. 595.)

The above propositions are supported by all of the well-considered cases. (Mead v. Northwestern Ins. Co., 7 N.Y. 530; Westfall v. Hudson River Fire Ins. Co., 12 N.Y. 289; Wheeler v. Trader's Ins. Co., 62 N.H. 327; Wheeler v. Traders' Ins. Co.,62 N.H. 450;² Imperial Fire Ins. Co. v. Coos County,151 U.S. 452; Trustees of Fire Assn. of Philadelphia v. Williamson, 26 Pa. St. 196; Commercial Ins. Co. v. Mehlman, 48 Ill. 313;¹ Boyer v. Grand Rapids Fire Ins. Co.,124 Mich. 455.²)

We advise that the judgment be reversed.

Chipman, C., and Harrison, C., concurred.

For the reasons given in the foregoing opinion the judgment appealed from is reversed.

McFarland, J., Lorigan, J., Henshaw, J.

¹ 13 Am. Rep. 165.

² 13 Am. St. Rep. 582.

¹ 95 Am. Dec. 543.

² 83 Am. St. Rep. 338.