Westfall against The Hudson River Fire Insurance Co.

Westfall against The Hudson River Fire Insurance Co. Where a policy of insurance against loss by fire to goods in a store contained a provision, that in case the premises containing the goods should be appropriated, applied or used for the purpose of storing or keeping therein any of the articles denominated hazardous or extra-hazardous, or included in the memorandum of special rates in the terms and conditions annexed, except as specially provided for in the policy or thereafter agreed to by the insurers in writing endorsed on or added to the same, the policy should be void; and in the terms annexed to the policy, there were enumerated, under the classes of hazardous and extra-hazardous, various articles, and a statement that a per centage named would he charged thereon in addition to the ordinary premium; and under the class of special rates, after an enumeration of articles, there was a statement that eamphene, when used in stores, subjected the goods therein to an additional charge of ten cents on the lmnderd dollars, and that the premium for such use must he endorsed in writing on the' policy; Held, that the use of eamphene to light the 'Store was prohibited, and that its use, without a compliance with the special provision in reference to it, avoided the policy. Appeal from a judgment of the superior court of the city of Hew-.York. The action was on a policy of insurance issued by the defendants to Carston Hennings, who, after the loss, assigned the claim to the plaintiff. The insurance was against loss by fire to groceries and store fixtures, in a store in Christopher-street, in the city of Hew-York, to the amount of $1000, and. a premium of, $10 was in the policy stated to have, been paid. The body of the policy contained the following clause: “ And it is agreed and declared to be the true intent and meaning of the parties hereto, that in case the above mentioned premises or any part thereof shall, at anytime, after the making and during the time this policy would otherwise continue in force, be appropriated, applied or used to or for the purpose of carrying on or exercising therein any trade, business or occupation, denominated hazardous or extra-hazardous, or specified in the memorandum of. special rates in the terms and conditions annexed to the policy, or for the purpose either of storing or keeping therein any of the articles, goods or merchandise in the same terms or conditions denominated hazardous or extra-hazardous, or included in the memorandum of special rates, except as herein specially provided for or hereafter agreed to by this corporation in writing to be added to or endosed upon tin's policy, then, and from thenceforth so long as the same shall he so appropriated, applied or used, these presents shall cease and be of no force or effect.” It also contained a clause, as follows : “ and that this policy is made and accepted in reference to the terms and conditions hereto annexed, which are to be used and resorted to in order to explain the rights and obligations of the parties hereto in all cases not herein otherwise specially provided for.” In the “ proposals for insuring houses,” &c., annexed to the policy, the classes of hazards are specified as follows: Not hazardous. Such goods, it was said, were to be insured at an advance of 5 cents per $100 on the buildings in which they were contained. Hazardous. Under this head there was a list of occupations and of goods, and it was said that such occupations and goods were charged 10 cents per $100 in addition to the premium. Extra-hazardous. Under this caption there is also a list of occupations and of goods, with a statement that they would be charged 20 cents per $100 in addition to the premium. The last head is special mem., with another list of employments and goods; after which the following clauses are added: “ Saltpetre, gunpowder and cotton are expressly prohibited from being deposited, stored or kept in any building insured or containing any' goods or merchandise insured by this policy, unless by special consent in writing on the policy. ‘‘ Camphene, spirit gas or burning fluid, when used in stores or warehouses as a light, subjects the goods therein to an additional charge of 10 cents per $100, and premium for such use must be endorsed on the policy.” On the trial before Mr. Justice Bosworth, in April, 1853, the plaintiff proved the policy and the loss of the goods by fire, during the period insured, and the assignment of the claim to him. On the cross-examination of Hennings, the original insured party, whom the plaintiff examined as a witness, the defendants proved that camphene was used in lamps for lighting the store from the time of the insurance until the fire. The defendants’ counsel moved for a nonsuit on the ground, among others, “ that the plain tiff’s proof showed that the assured had violated the conditions of insurance in relation to the use of camphene as a means of light.” The motion was denied, and the judge ultimately directed the jury to find a verdict for the plaintiff for such amount of damages as they should believe from the evidence had been incurred by the plaintiff in the burning of the property insured. Verdict for plaintiff. Upon appeal to the general term the judgment was affirmed. (See 2 Diner, 490.) The defendants appealed to this court. G. W. Stevens, for the appellant. N. Hill, Jr., for the respondent. [MAJORITY — Denio, J.] Denio, J. I am of opinion that by the true construction of the provisions of this policy, the use of camphene as a light in stores or warehouses, where such buildings or personal property contained in such buildings are insured, is prohibited. The policy declares that the carrying on of any of the occupations mentioned in the hazardous, extra-hazardous or special rate classes, in the building, or using it for storing or keeping any of the articles enumerated in these classes, shall suspend the operation of the policy for the time, unless such use of the premises shall be specially provided for in the policy, or shall be afterwards agreed to by the company in writing, to be added to or endorsed on the policy. This language, and still more clearly the statement annexed to the enumeration of the hazardous and extra-hazardous occupations and articles, to the effect that a specified additional premium will be required where these more dangerous trades are carried on and such combustible articles are kept, shows that it was not intended to exclude such employments and property from the privilege of being insured, but only that the insured parties in. respect to them, should pay such additional premium as was deemed adequate to the increased risk; and that the corporation should not be deemed to have assented to take that class of risks, without an express provision to that effect in the contract, or annexed to or endorsed upon it. The theory of the contract is, that without some special language, either in the description of the subject of insurance or otherwise, the policy will prohibit the trades and goods enumerated in the three classes from being kept in the building which is insured or which contains the insured goods ; so that the injured party must not only pay the premium exacted for the risk which attaches to his property, but he must see that in the description of the property, or by some provision therein or an endorsement thereon, or in some other way, the contract shall contain a recognition of his right to exercise the more hazardous occupation or to keep the more combustible goods on Ms premises. The provision, that the premises shall not be used to carry on the enumerated employments, or for the storage or keeping of the enumerated chattels without a special provision to that effect, is a warranty, the breach of which avoids the policy and prevents any claim for indemnity for a loss, though it appear that the fire arose from some other cause quite unconnected with the prohibited employment or article. (Mead v. The Northwestern Ins. Co., 3 Seld., 530.) I have rehearsed these principles, not because they are unfamiliar, but in order to examine the provision directly under consideration in connection with them. Following immediately after the enumeration in the special memorandum is the clause : “ Saltpetre, gunpowder and cotton are expressly'prohibited from being deposited, stored or kept in any building insured or containing any goods or merchandise insured by this policy, unless by special consent in writing on the policy.” The effect of this is to add to the enumeration of articles which must be insured in special terms— , the three articles mentioned. Two of the articles were already enumerated, but for some reason, or without any, they are repeated in this connection. The terms of the clause, however, only suffice to put them in the same category with those before enumerated. Next follows the clause upon which this action depends : “ Camphene, spirit gas or burning, fluid, when used in stores or warehouses as a light, subjects the goods therein to an additional charge of 10 cents per $100, and premium for such use must be endorsed in writing on the policy.” The effect of the language, I think, is to attach the same consequences to the use of these articles in stores and warehouses, which is visited upon the .exercise of .the hazardous occupations, or the storage of the hazardous goods mentioned in the first classification of subjects which are to be specially insured. The practice is not absolutely prohibited, but it must be paid for; and, moreover, it must be specially recognized by an endorsement on the policy. It seems pretty obvious that inasmuch as the practice of using camphene for a light could not, upon the plan of the instrument, be inserted in the classes of risks, they being devoted to the enumeration of trades and occupations and of particular chattels, a special paragraph was framed to. explain that the practice was prohibited under the ordinary policy, but the right to pursue it could be obtained by the payment of a certain premium and having the evidence of the purchase endorsed on the policy. If this is a fair interpretation of the lan guage, there can be no doubt but that the prohibition, like every other positive provision in a policy of insurance, is a warranty, which, if violated, precludes a recovery on the instrument. In Meads v. The Northwestern Insurance Co., to which I have already referred, the policy seems to have been essentially like the one we are considering, except that the clause respecting camphene is thus: “ Camphene cannot be used in the building where insurance is effected, unless by special permission in writing.” It was held that the use of camphene for lighting avoided the policy. The provision is certainly more direct and perspicuous than the one before us, but I cannot doubt but that both mean precisely the same thing, and I think it would be a refinement to establish a distinction between them. The superior court was of opinion that camphene could not be used as a light under this policy, without.subjecting the insured to the hazard of any loss which might arise from it. If this is so, it is because the use of it is prohibited in a certain qualified manner. I do not see anything in the language of the instrument to warrant this construction. If prohibited at all, the usual consequences follow from its use, that is to say, that the insured will be precluded from recovery for any loss on account of violating a warranty. If an article enumerated in the list of hazardous articles is stored or kept in the building, and there is "a loss by fire, the insurers are not liable, though the fire had no connection with the hazardous property; but the insured may avoid such consequences by paying the extra premium and procuring a proper endorsement on the policy. The clause under consideration declares that the use of camphene as a light subjects the insured to a certain extra premium, and that an endorsement of the payment of the premium must be made .on the policy. But it does not say, except by implication, that camphene may not be used without such payment or without an endorsement; but the implication is nearly as strong as though the language had been express and positive. I do not think we are at liberty to read it as though the use of the article was permitted. The judgment of the superior court should be reversed and a new trial ordered. All the judges concurred. Judgment accordingly.