Chute v. North River Ins. Co.

• Decision Date: 17 June 1927
• Docket Number: No. 26104.,26104.
• Citation: 172 Minn. 13,214 N.W. 473
• Parties: CHUTE et al. v. NORTH RIVER INS. CO.
• Court: Minnesota Supreme Court

214 N.W. 473

172 Minn. 13

CHUTE et al. v. NORTH RIVER INS. CO.

No. 26104.

Supreme Court of Minnesota.

June 17, 1927.

Appeal from District Court, Hennepin County; E. F. Waite, Judge.

Action by Bessie C. Chute and another against the North River Insurance Company. From an order sustaining a general demurrer to the complaint, plaintiffs appeal. Affirmed.

Cobb, Wheelwright, Hoke & Benson and L. M. Staples, all of Minneapolis, for appellants.

Ware & Melrin and P. F. Sherman, all of Minneapolis (Forrest E. Single, of New York City, of counsel), for respondent.

STONE, J.

Appeal from an order sustaining a general demurrer to the complaint in an action to recover on an insurance policy.

The policy covers "jewelry * * * and/ or on furs as per schedule attached, against all risks of loss or damage during transportation (including all risks of loss or damage caused by breakage, fire and theft) or otherwise." Claims for breakage of glass, overwinding, denting and internal damage" to watches and for damage to furs arising "from moth, vermin, wear and tear, or gradual deterioration" are expressly excluded.

Recovery is sought for a fire opal valued at $2,000, because, according to the complaint, while the policy was in force, "the opal * * * became cracked." It "was not cracked at the time said policy of insurance became effective but developed said crack after said policy became effective but during the time it was in force." Then, with commendable candor, the complaint avers "that said crack was due to an inherent vice in said opal and was not the result of outside force." The one question is thus plainly apparent — Can there be recovery for mere cracking arising from an inherent defect or tendency of the insured property and not at all from extraneous and fortuitous cause? According to a work on "Gems and Precious Stones of North America" (George F. Kunz, 293), quoted by counsel for plaintiff, fire opals are as "sensitive" as they are gorgeous. They have a tendency to "fissures" and, with "only a small loss of color, have become entirely flawed, the cracks being such as to render the stones unfit for setting, since they are liable to break."

The diligence of counsel has failed to furnish us any case in point or even of much help except those arising on policies of marine insurance. But they furnish, we think, a fair analogy. The contract is an "all risk" policy, and of a kind which characterizes marine insurance more than any other. The rule of marine insurance is that, under such a policy, the insurer is not liable "for losses resulting from inherent vice, defect, or infirmity in the subject-matter insured." 38 C. J. 1097. In Arnould on Marine Insurance (11th Ed.) § 778, it is put thus:

"* * * The underwriter is not liable for that loss or deterioration which arises solely from a principle of decay or corruption inherent in the subject insured, or, as the phrase is, from its proper vice; as when fruit becomes rotten, or flour heats, or wine turns sour, not from external damage but entirely from internal decomposition."

In applying this rule, we are not unmindful that in marine cases there is on the part of the insured an implied warranty of seaworthiness, and that risks insured against are "perils of the sea." Clarke v. Mannheim Ins. Co. (Tex. Com. App.) 210 S. W. 528. But "the purpose of the policy is to secure an indemnity against accidents which may happen, not against events which must happen." Gulf Transportation Co. v. Fireman's Fund Ins. Co., 121 Miss. 655,...