Hynds and another against The Schenectady County Mutual Insurance Company

Hynds and another against The Schenectady County Mutual Insurance Company. A condition in a policy of insurance upon a building, which prohibits its being • appropriated, applied or used for the purpose of storing or keeping therein certain articles" denominated hazardous, is not violated by a mere temporary or casual deposit of such articles in the building. But if the building or any part thereof is used for the purpose either of storing or of keeping therein prohibited articles, it is a violation of the condition. Action upon a policy of insurance dated the 10th of June, 1848, by which the defendant insured the plaintiffs against loss and damage by fire to the amount of $1500 on their flouring mill and machinery, and $500 on their carding machine and machinery, situate in the town of Seward, Schoharie county. The cause was tried in October, 1850, at the Schoharie county circuit, before Mr. Justice Wright and a jury. The policy of insurance above mentioned was read in evidence. It contained a provision as follows: “ And it is agreed and declared to be the true intent and meaning of the parties hereto, that in case the - above mentioned premises shall at any time after the making and during the. time this policy would otherwise continue in force, he appropriated, applied or used to or for the purpose of carrying on or exercising therein any trade, business or vocation denominated hazardous or extra-hazardous, or specified in the' memorandum of special rates in the terms and conditions annexed to this policy, or for the purpose either of storing or of keeping therein any of the articles, goods or merchandise in the same terms and conditions denominated hazardous, or included in the memorandum of special rates, except as herein specially provided for, or hereafter agreed to by the company in writing, to be added to or indorsed upon this policy,-then and from thenceforth, so long as the same shall be so appropriated, .applied or used, these presents shall cease and be of no force or effect.” The policy also contained a provision, that it was made and accepted in reference to the terms and conditions thereto annexed, which were to be used and resorted to in order to explain the rights and obligations of the parties in all cases. By the conditions annexed to the policy, an applicant for the insurance of a building was required to state, among other things, “how it was occupied; whether as a private dwelling or otherwise, and particularly whether any manufactory was carried on within or about the premises, and the occupation of contiguous buildings and in case of loss, the insured, in his account thereof to be furnished to the company, was required to state “ in what general manner (as to trade, manufactory, merchandise or otherwise) the building insured, or containing the subject insured, and the several parts thereof, were occupied at the time of the loss.” It was further provided by these conditions, “ that any misrepresentation or concealment, or fraud, or false swearing in any statement or affidavit in relation to the loss or damage, should forfeit all claim by virtue of the policy, and be a bar to any remedy on the same.” Among the articles denominated hazardous, in and by the terms annexed to the policy, was flax. In the application, as in the policy, the property was described as a flouring mill and machinery, and carding machine for wool and machinery; the carding machine building being thirty feet square. It was not mentioned in the application or policy that flax was stored or kept upon the premises, or that there was any flax in either building. It was proved that on the 12th of June, 1848, a fire originated in the carding machine building, which consumed it and its contents, and the flouring mill and its machinery. It appeared that prior to the 27th of May, 1848, the carding machine building had been used for carrying on the business of dressing flax; that between this date and the 10th of June, when the policy was executed, this business was discontinued, the flax machinery taken down, and the building furnished and appropriated for a carding machine. When the change was made, the refuse flax and tow were removed from the building; but some unbroken flax, being in bulk about two and one half feet high, three feet wide and of the length of the flax, was placed in the corner room of the building, and was there when the policy was issued, and remained there till the fire occurred. In the statement of loss furnished the company by the plaintiffs, the carding machine building was described, and the use to which each portion of it was applied in carding and dyeing wool, and fulling and dressing cloth, and the machinery therein for this purpose at the time of the fire, were stated, but no mention was made of said flax, or that the building was used or occupied for keeping or storing flax, or that it contained any flax at or prior to the fire. In verifying this statement, the plaintiffs made affidavit that this was a true statement of how and for what each distinct room in the building was used or occupied at the time of the loss. At the close of the case, the counsel for the defendant moved the court to nonsuit the plaintiffs, on the grounds, (1,) that the application did not truly state how or in what manner the carding machine building and the several parts thereof were occupied ; (2,) that the application omitted to state that flax was kept or stored in the basement story thereof; (3,) that the plaintiffs,in their proof of loss, untruly stated the general manner in which the building and its several parts were occupied at the time of the loss, and concealed the fact that flax was kept or stored in the basement room; and (4,) that in such proofs the plaintiffs omitted to state that, at the time of the loss, flax was stored or kept in the building. The court refused to nonsuit the plaintiffs, and the defendant’s counsel excepted. The counsel for the defendants requested the court to charge the jury, 1. That if they believed that there was flax kept in the lower room of- the carding machine building at the time of the fire, the policy would be of no effect. The court refused to charge upon this proposition other than as is hereafter stated; to which refusal the defendant’s counsel excepted. 2. That if the jury "should believe that there was flax in the lower story of the carding machine building for safe keeping and not for the purpose of consumption, or in the usual course of business for which the building was occupied, the plaintiffs were not entitled to recover. The court refused to charge upon this proposition, other than as is hereafter stated; to which refusal the defendant’s counsel excepted. 3. That if the jury believed that the fire originated'in the flax or tow in the lower room of the carding machine building, the plaintiffs are not entitled to recover. The court refused so to charge, and the defendant’s counsel excepted. The court then, amongst other things, charged the jury, that the policy of insurance was, in effect, a contract between the parties. In it there is a warranty on the part of the plaintiffs, that after the making and during the time the policy would otherwise continue in force, the building insured should not be appropriated, applied or used for the purpose of carrying on or exercising therein any trade, business or vocation denominated hazardous or extra-hazardous, as specified in the terms annexed to the policy, or for the purpose of either storing or keeping therein any of the articles, goods or merchandise in the terms denominated hazardous or extra-hazardous. That the violation of this warranty rendered the policy of no force or effect, whilst the building was so appropriated, applied or used. That if, at the time the fire occurred, the evidence satisfies the jury that the building was appropriated, applied or used for the storage of flax, the policy was of no force, and the plaintiff should not recover; but if the building was not devoted to or used for that purpose, and the small pile of undressed flax, said to have been in the lower room of the carding machine building, was there but temporarily, and with no intention of having it regularly stored or kept there, then the policy would not be avoided. To the last branch of this paragraph of the charge the defendant’s counsel excepted. The jury rendered a verdict in favor of the plaintiffs for $2289.20, upon which judgment was entered. The defendant made a bill of exceptions, and on appeal the judgment was affirmed by the supreme court sitting in the third district, at general term. («S'ee 16 Barb. 119.) The defendant appealed to this court. P. Potter', for the ^appellant. I. The learned justice erred in refusing to nonsuit the plaintiffs as requested. The .omission of ■ the plaintiffs to disclose, in their, application for insurance, that there was flax piled up in one of the rooms of the carding machine building, is a concealment, and fatal to their right to recover upon the policy. (Wilson v. The Herkimer Co. Mutual Ins. Co., 2 Selden, 59; Gates v. The Madison Co. Mutual Ins. Co., 2 Comst. 48, 51.) 1. “ The concealment of a material fact is fatal to the policy, whether it occur through fraud, accident or honest mistake.” (1 Phil, on Ins. §§ 531 to 534, 537. 3 Kent’s Com. 6th ed. 282, 283.) 2. The materiality of the fact was entirely clear, and was not a fact for the jury. 3. The question is whether the fact was material in the estimation of the underwriter; not whether it would be so in the estimation of others. 4. The parties made the fact material by the terms of their agreement. (2 Comst. 49, 52; 5 Hill, 188; 2 Denio, 75, 83. See brief of Hill, counsel, sustained by this court, 2 Seld. 57. 5 Hill, 193.) II. The learned judge erred in not charging the jury, as requested by the defendant’s counsel, that if they believed that there was flax kept in the lower room of the carding machine building at the time of the fire, the policy would be of no effect, and in charging as he did. The case of O’Neil v. The Buffalo Fire and Marine Ins. Co., (3 Comst. 122,) is probably the case which was in the mind of the judge. But this case settles no such doctrine as that contained in the charge. Again, the word storing is the only prohibitory word used in the policy under consideration in that case. In the • ease now before the court, the policy prohibits the party from keeping the forbidden article, either temporarily or permanently. The flax in this case was not necessarily required by, nor was it introduced for any purpose connected with the legitimate occupation of the building. If the party had no right to keep flax in the building, the intention with which it was kept is not important. (Fowler v. Ætna Ins. Co., 6 Cowen, 673; 1 Phil. on Ins. 351, 354 ; 5 Hill, 193.) III. The learned judge erred in refusing to charge the jury, that if they should believe that there was flax in the lower story of the carding machine building for safe keeping, and not for the purpose of consumption, nor in the usual course of business for which the buildings were occupied, the plaintiffs were not entitled to recover. (3 Comst. 127 ; O’Niel v. Buffalo Fire Ins. Co., 2 Hall, 226.) If the case of Shaw v. Robberds, (6 Adol. & E. 75,) cited by Justice Harris in the court below, goes to the extent supposed by that learned judge, it is in conflict with the cases in our own courts. That it is not intended to be in conflict, will be seen by the fact that it cites the case in 1 Mood. Sp M. 90, and no other authority, for the principle it lays down. This latter case is not in conflict with our authorities nor with the principle we contend for. N. Hill, Jr., for the respondents. I. The condition as to the keeping or storing of hazardous articles is not violated, except by acts which fairly show a habitual use of the building or some part of it for that purpose. 1. The condition applies to the general purposes for which the building or some part of it is used or occupied ; not to every deposit of hazardous goods in it. (Dobson v. Sotheby, 22 Eng. Com. L. R. 260 ; Moore v. Pro. Ins. Co. 29 Maine R. 97. See cases cited under next subdivision.) 2. An act of temporary or casual deposit, not repeated so as to show a user or habit, nor sufficient to mark one of the purposes for which the building is occupied, is no breach. (Moore v. Pro. Ins. Co., 29 Maine R. 97; 2 Greenl. Ev. § 408, 3d ed.; Dobson v. Sotheby, 22 Eng. Com. L. R. 260; Shaw v. Robberds, 33 id. 12, 15, 16 ; O’Niel v. B. I. Co., 3 Comst. 122, 126, 7; Gates v. Mad. Co. M. Ins. Co., 1 Seld. 469, 479; N. Y. Fire Ins. Co. v. Langdon, 6 Wend. 623; see Potter v. Bank of Ithaca, 5 Hill, 490; Suydam v. Morris &c. id. 491, note (a) ; Sacket’s Har. B. v. Pres. &c. 11 Barb. 213.) 3. The cases relating to articles introduced into the building under circumstances which show that storage or safe keeping was, not a leading purpose, stand on this principle. (Moore v. Pro. Ins. Co., 29 Maine R. 97; Dobson v. Sotheby, 22 Eng. Com. L. R. 260; O'Niel v. B. Ins. Co., 3 Comst. 126; Gates v. Mad. Co. Mu. Ins. Co., 1 Seld. 469, 477. See the other cases cited under subd. 2, supra.) 4. The rule is the same, where the article is not deposited by . the assured or his agent, but is left in the building without his knowledge by a trespasser. 5. And so, if the article is • in the building' at the moment of insurance, and the fire occurs before the premises are used, or a removal is possible. 6. In these, and the like cases, the insured cannot be said to have appropriated the building for the purpose of storing or keeping the article, after making the policy. (Tice v. Reid, 12 Law Journal, 299, C. P. new series.) 7. The construction claimed by the defendants would render the following acts a forfeiture, though done but once, which clearly is not the intent expressed by the condition. (1.) Bringing a pound of flax into a' building in the evening, and leaving it till morning. (2.) So placing it in- a desk for safety, while the depositor is transacting other business in the building: (3.) So if the building insured is a farmer’s dwelling house, and a small quantity of flax is in it at the time of the fire. 8. The condition being the language of the underwriters, and involving a forfeiture, is not to be extended. If the defendants meant to prohibit all deposits of flax indiscriminately, they should have said so plainly. (22 Eng. Com. L. 260, 1, per Ld. Tenterden ; Catlin v. Spr. F. Ins. Co., 1 Sumn. 434; 1 Arnould on Ins. 588, § 215; Palmer v. W. Ins. Co., 1 Story's R. 364; Blackett v. R. E., 2 Crompt. & Jer. 251.) II. The question, whether the plaintiffs had appropriated or applied the building for the purpose of storing or keeping flax, after the making of the policy, was properly submitted to the jury. 1. The policy was dated on Saturday the 10th of June, at Schenectady, and the fire occurred on Monday morning, the 12th of the same month". (See 5 Hill, 104, 6, per Bronson, J.) 2. There was no evidence that the plaintiffs used the building for any purpose, after making the policy, and during its continuance. 3, The judge was not bound to charge as requested without qualification, and his refusal was therefore proper. (See point I, and its subdivisions: Cowen & Hill’s Notes, 790 ; Doughty v. Hope, 3 Denio, 594: 1 Kern. 61, 79; 4. If the charge was ambiguous, or some word was omitted, or an inaccurate one used, the judge’s attention should have been called to it at the time. (Cowen & Hill’s Notes, 790 ; Hall v. Mannin, 3 Bligh’s R. 22, N. S.; Gardner v. Picket, 19 Wend. 186 ; Reab v. McAllister, 8 id. 112 ; Sellick v. S. H. T. Co., 13 Conn. R. 460.) III. The questions as to concealment in the application were properly disposed of on the trial, and no exception was taken to ■this part of the charge. 1. The omission to remove the flax not being a breach of the condition, the question of concealment was for the jury. (2 Greenl. Ev. §§ 397, 8, 408; Tyler v. Ætna Ins. Co., 12 Wend. 507 ; Grant v. Howard, 5 Hill, 10 ; Jefferson Ins. Co. v. Cotheal, 7 Wend. 72, 79; Masters v. Madison Co. Mu. Ins. Co., 11 Barb. 624.) 2. Ho question was put by the application calling for disclosure as to the flax, nor were the plaintiffs apprised that this was desired. (Gates v. Madison Co. Ins. Co., 1 Seld. 469, 474, 5; Masters v. Mad. Co. Mu. Ins. Co., 11 Barb. 624.) [MAJORITY — Gardiner, Ch. J.] Gardiner, Ch. J. The language of the condition of the policy in question, so far as it is applicable to the case before us, is “ that in case the premises insured shall be appropriated, applied to or used for the purpose, either of storing or keeping therein any of the articles, goods, &c., denominated hazardous, &c., then, from thenceforth, so long as the same shall be so appropriated, applied, or used, these presents shall be of no force or effect.” It is not enough, according to this phraseology, that hazardous articles are upon the premises, They must be there for the purpose of being stored or kept; and the premises must be appropriately applied or used to effect that purpose. This is the definition that has been settled by repeated decisions in reference to the word “storingand there is no reason why it should not be applied to “ keeping,” a word of more extensive signification undoubtedly, but which, in this connection, seems to demand a continued occupation of the whole, or a part of the premises insured, in pursuance of a design for that specified purpose. Thus, the storing of gunpowder, implies the user of the. premises for that purpose, and such a condition would not be violated by keeping that article for sale at retail. But such a “ keeping” would be a breach of the condition of this policy, because it would require a continued user of some part of the premises to effect that pur-, pose. But if the insured, on his return from hunting, should leave his flask, containing powder, in a desk in a building covered by the policy, for an hour, or á day, this would not be within the prohibition, for the act would not involve the notion of the appropriation, application or user of the premises for the purpose of storing, or keeping gunpowder. The counsel for the appellant was probably right in his suggestion, that the word keeping was introduced into these policies after the decisions in 1 Hall, 226, and other cases w.hich restricted the term “ storing” to its ordinary commercial meaning. The alteration was designed to reach a class of cases where hazardous goods were kept for retail, or other purposes, which presupposed a continued deposit, and which were excluded from the condition by the construction. given by the courts to the policies in the cases mentioned. But it is not to be presumed that the company in this case intended by a formal condition to prohibit the insured from bringing a match upon the premises for the purpose of lighting a' fire, or a bottle of oil to apply to the machinery, although both might remain in the building for a brief period, and although if might be. said that in the broadest sense of the term that both- were kept upon the premises, while they remained there. There is a manifest distinction between a deposit of hazardous goods, and a deposit for the purpose of keeping them. A distinction which is recognized by 'the terms of the condition, and which is necessary to prevent the policy from being altogether worthless as an-indemnity, if not a mere imposition on the insured. This is the only point presented of any importance. It was raised on the motion to nonsuit and in the request to the iudge for specific instructions to the jury. The charge was in conformity to the views above suggested. The judgment of the supreme court should be affirmed. Ruggles, Denio, Johnson and Edwards, Js., concurred in the foregoing opinion. Selden, Parker and Allen, were in favor of reversing the judgment. Judgment affirmed.