Epstein v. Northwestern Nat. Ins. Co.

• Decision Date: 06 June 1929
• Citation: 267 Mass. 571,166 N.E. 749
• Parties: EPSTEIN v. NORTHWESTERN NAT. INS. CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

267 Mass. 571

166 N.E. 749

EPSTEIN

v.NORTHWESTERN NAT. INS. CO.

Supreme Judicial Court of Massachusetts, Suffolk.

June 6, 1929.

Report from Superior Court, Suffolk County; Louis S. Cox, Judge.

Action by Abraham J. Epstein against the Northwestern National Insurance Company. Verdict for defendant. On report from superior court. Judgment for plaintiff per stipulation.Myer L. Orlov and Phillip Cowin, both of Boston, for plaintiff.

Walter Hartstone, of Boston, for defendant.

PIERCE, J.

This is an action of contract to recover upon a fire insurance policy. The case comes before us on a report after a directed verdict for the defendant.

The facts, which the jury warrantably could have found supported the case of the plaintiff, are in substance as follows: The plaintiff, a woolen merchant, had occupied the premises wherein the fire occurred for three years prior to the date of the fire. The premises consisted of a stockroom and office. ‘The stockroom was in the basement and the office upstairs on the street floor.’ Access to the basement was by an uncovered stairway in the left corner of the store, guarded by a railing in full view from the store. The plaintiff's stock was kept in the stockroom; ‘the store was used for office purposes and just showing samples.’ These premises with an entrance through a doorway on the street floor numbered 50 Essex street, Boston, were located in a large building that occupied the triangular lot at the corner of Chauncy and Essex streets and Harrison avenue; the building had various entrances. A fire occurred on Friday, July 3, 1925, in the basement of the plaintiff's premises and the damage was confined to the merchandise therein.

At the time of the fire the plaintiff had eighteen policies covering the property contained in the building. The policy sued on, numbered 30517, was a Massachusetts standard form policy which was placed with R. S. Hoffman & Co., general agent of the defendant, by an insurance broker, one Mr. Isenberg. The descriptive clause relating to the property insured and to its location was set forth in a ‘rider’ attached to the policy, the pertinent language of which reads:¹ ‘ $3500 On Stock in Trade and Merchandise, consisting principally of woolens * * * all while contained in and on brick, concrete and steel building occupied at the time this policy is written wholly or principally for office and/or mercantile and/or manufacturing purposes with or without dwellings. Situated No. 50 Essex Street, Boston, Mass., 1st floor.’ Of the eighteen policies covering the property of the plaintiff, ten in 1922 were placed by his insurance broker, one Isenberg. Five of the ten policies contained the words ‘first floor’ in the description of the entrance to the building, and five of them did not. The rate per thousand on all ten policies was the same. The rates of insurance were the same whether the insurance covered merely the first floor or first floor and basement.

We do not agree with the contention of the defendant that it was immaterial that the rates were the same whether the policy covered the stock in trade on the first floor or on the first floor and basement. This was a material fact, and was relevant upon the possible issue whether the location of the stock in trade was an essential element in the description of the property intended to be insured.

The policy sued on was a renewal of previous insurance policies placed with the defendant through its general agent, R. S. Hoffman & Co. On cross-examination the insurance broker, Isenberg, testified that the insurance policies came back to him from Hoffman's office; that he did not read them at that time; that all Hoffman's policies in 1925 read alike, that is, all included the words ‘first floor’; that all the other policies did not include the words ‘first floor’; that he did not know that Hoffman's policies did not read the same as the others prior to the loss; that he assumed that all the policies read alike; that he did know that the prior policies were all alike for previous years; that they did not contain the words ‘first floor’; and that when the policies were placed he went over them carefully, but ‘as to renewals, he just let them go by.’

The location of property insured is usually an essential element in the description, and the policy will not be extended to cover property not within the terms of the description. Heath v. Franklin Ins. Co., 1 Cush. 257, 261, 262. A renewal of insurance is in essence a new contract wherein the rights of the parties are to be determined by a consideration of the terms and conditions of the original policy; Brady v. Northwestern Ins. Co. 11 Mich. 425;Hartford Fire Ins. Co. v. Walsh, 54 Ill. 164, 167,5 Am. Rep. 115;Jenkins v. Covenant Mutual Life Ins. Co., 171 Mo. 375, 71 S. W. 688;Guptill v. Pine Tree State Mutual Fire Ins. Co., 109 Me. 323, 84 A. 529; unless a new policy be belivered to the insured or to his authorized agent in connection with the contract of renewal, in which case the insured is presumed to have assented to the terms of the new policy if it is retained without reading or read without complaint and rejection until after the destruction by fire of the insured property. Thomson v. Southern Mutual Ins. Co., 90 Ga. 78, 15 S. E. 652. In the instant case the new policy sued on was retained by the agent, who placed the insurance for the plaintiff, without examination and without reading from December 12, 1924, until after the fire on July 3, 1925. In such circumstances there is no room for an argument that the words ‘first floor’ in the renewal policy should be rejected because they were improperly added or that they can be disregarded in the construction to be given to the descriptive terms of the insurance contract. Sampson v. Security Ins. Co., 133 Mass. 49, 55.

Assuming the words ‘first floor’ are of the terms of the contract, the question for decision, in the light of the fact that there were various entrances to the building and a single one to the plaintiff's premises, is, Are the words ‘situated No. 50 Essex Street,...