Pittsburgh Insurance v. Frazee

Mr. Justice Clark

delivered the opinion of the court, January 19th, 1885.

The policy of insurance upon which this suit was brought is dated August 13, 1881; it provided indemnity to Jonas Frazee against loss by fire for one year upon “liis stock of dry goods, groceries and merchandise usually kept in a country store, contained in the frame building occupied as store and dwelling, situate, detached, in the village of Selbysport, Garrett county, Maryland.”

By one of the general provisions of the policy, it was agreed that it should be void “ unless the assured be and shall remain the sole, undisputed and exclusive owner of the legal title to the subject of insurance mentioned in the policy.” Jonas Frazee in substance testified that he owned the stock of goods himself; that he purchased it from liis brother, Charles F. Frazee, and paid for it with his own money; that his brother Jasper had no interest whatever in it, but was employed merely to conduct the business, receiving for his services one half of the profits realized, less one half of the losses from bad debts. In this he was corroborated by his brother Jasper, who stated that he never had, nor claimed to have, any interest in the stock, and that he was simply an agent or employee of his brother, the plaintiff, who was the absolute owner.

There was, it is true, much countervailing proof on this point; the books were opened in the name of J'. Frazee & Bro.; the sign set up in front of their place of business was in the same form, and the first proofs of loss clearly stated a joint ownership of the goods. These apparently inconsistent facts were to some extent explained, however, and the question as to the real ownership of the stock was plainly one for the jury; there was without doubt abundant evidence to justify the submission.

The court instructed the jury that “if the plaintiff furnished the original stock of goods, and kept if up with his own money, and his brother Jasper had no interest in it, but for his services in keeping the store, instead of a salary, was to receive one half of the net profits, and be responsible for one half of the bad debts, then the goods would be the sole property of Jonas Frazee.” In this, we think the court was clearly correct. No question as to any partnership relation or liability which by construction of law might be supposed to-exist, as to third persons or creditors, is here presented. The inquiry is as to the ownership of the stock as between the parties themselves, and, in such case, where there is a positive agreement that must govern. If the evidence of Jonas and Jasper Frazee is believed, there was such agree ment, and Jonas Frazee, as against Jasper at least, was cer tainly the sole, undisputed and exclusive owner of the goods. The first and sixth assignments are therefore not sustained.

The remaining assignments, however, relating to the ruling of the court as to the plaintiff’s right under the policy to store gunpowder in the building containing the insured property, in excess of the amount specified in the policy, possess more merit. In Franklin Fire Insurance Co. v. Updegraff, 7 Wr. 357, the insurance was upon “merchandise such as is usually kept in country stores; ” the stock, at the time of the fire, consisted in part of hardware, china and glassware. By the terms of the policy, merchandise of this character was classed as “ hazardous,” and subjected the insured to the payment of higher rates; by the 12th condition, the omission to specify such property voided the policy; it was held, however, in a suit to recover the loss, that the insurance was not void because hardware, china and glassware were not specifically mentioned, if the articles were such as were usually kept in a country store. The expression “merchandise, such as is usually kept in country stores,” was deemed a sufficient designation of the articles insured, and to include “ hardware, china and glassware,” if these articles were usually so kept. The company accepting such a general description of the stock insured was bound to know what was usually kept in a country store, and the finding of the jury was conclusive on that question.

In Citizens’ Insurance Co. v. McLaughlin, 3 P. F. S. 485, the insurance was upon “ a tannery and patent leather manu-factory ; ” the policy provided that benzole, to the amount of five barrels, might be kept in a shed detached from the buildings, one hundred feet distant, and nowhere else on the premises; it was stored in the shed, as stipulated, but was carried in cans into the buildings insured as needed and used in the process of japanning leather. It appeared, however, that benzole was ordinarily used in the manufacture of patent leather, and that this was the purpose in providing for its storage; therefore, it was held, that the presumption was that it was intended by the contracting parties that benzole might be used in the factory as it was ordinarily used in similar factories; that the policy included whatever was necessary and essential in conducting the business, if not expressly excepted.

Under the doctrine declared in Franklin Ins. Co. v. Updegraff, the insurers were bound to know, if the fact were so, that gunpowder was a commodity usually kept in a country store, whether specifically set out in the policy or not; the right to keep and sell that article, does not in this case, however, depend upon mere construction, it is not left to inference ; by special mention, within certain limits, the right is expressly conceded, and the case last referred to we think becomes unimportant. It is said, however, that as the insurance is upon such articles as are kept in a country store, the presumption is, that-the parties intended that gunpowder should be kept in the usual quantity, and the case of Citizens Ins. Co. v. McLaughlin is relied upon as supporting this view. There is, however, a plain distinction between that case and the case under consideration. There was no restriction in that case as to the amount of benzole to be used in the factory in the manufacture of Japanned leather, the presumption was, that it was intended to be used as it was ordinarily used, in similar factories ; but in this case the amount of gunpowder which might be kept on hand in the store for the purpose of sale, in the plaintiff’s business, is expressly limited, and the limitation is written as a condition of the policy. No fraud is shown, no undue advantage alleged, no ambiguity or uncertainty exists in the contract and we must, therefore, read the contract as it is plainly written. It is true that the restriction is contained in, the printed portion of the policy, which is prepared in such, general form as to meet all cases presented; that the written parts inserted must therefore be taken as being more immediately expressive of the intention of the parties, and if there be any repugnancy or conflict between them, the latter must have controlling effect; that the language of the policy is the language of the company, and in case of doubt and ambiguity must be taken most strongly against the company; but we can discover no such repugnancy or conflict: the contract is clear and therefore conclusive. Nor can we regard the restrie-tion as unreasonable; it applies only to the particular building containing the property insured, and it is a wise precaution when practicable, not only upon the part of the insurer but the insured, that thé storage of a highly dangerous and inflammable substance like gunpowder, should be in a place apart from, and reasonably removed from the general store.

The court erred, we think, in receiving evidence of the general custom of merchants in country stores as to the quantity of gunpowder usually kept on hand, and in submitting to the jury the question, whether the conduct of the insured was in compliance with that custom.

The judgment is therefore reversed and a venire facias de novo awarded.