Franklin Fire Insurance Co. v. Hewitt, Allison & Co.

• Decision Date: 25 October 1842
• Citation: Franklin Fire Insurance Co. v. Hewitt, Allison & Co., 42 Ky. 231 (Ky. Ct. App. 1842)
• Court: Kentucky Court of Appeals
• Parties: Franklin Fire Insurance Company of Philadelphia <I>vs</I> Hewitt, Allison, & Co.

42 Ky. 231

Franklin Fire Insurance Company of Philadelphia vs Hewitt, Allison, & Co.

Court of Appeals of Kentucky.

October 25, 1842.

ERROR TO THE LOUISVILLE CHANCERY COURT.

JUDGE MARSHALL delivered the opinion of the Court.

THIS bill was filed by Hewitt. Allison, & Co. to rectify a policy of insurance, averred to have been made out by mistake or fraud, in terms not embracing the subject intended, to recover for the loss, according to the agreement set up, independently of the policy. The contract of insurance was negociated on the part of the Insurance company, by Wm. S. Vernon, their agent in Louisville, who, upon receipt of the premium, delivered a receipt or certificate, dated on the 15th of April, 1840, and to the effect that he had "Received of Messrs. Hewitt, Allison, & Co. $55 premium for Fire Insurance, in the sum of $10,000, on their stock of merchandize, generally contained in their three story brick building, metal roof, situated on the south side of main street, between fifth and sixth streets, city of Louisville, Kentucky, and occupied by them as a commission house," &c. The insurance to continue for one year from that date, at 12 o'clock meridian, on the terms and conditions of the policies issued by the Franklin Fire Insurance Company of Philadelphia. The certificate to be void on delivery of the policy. A few weeks after the date of the certificate, a policy was sent out by the company at Philadelphia, and delivered, as the certificate had been, to the chief Clerk of Hewitt, Allison, & Co. by whom also, the premium had been paid. The policy insures Hewitt, Allison, & Co. (according to the printed proposals and conditions annexed,) upon "their stock of merchandize generally contained in their new three story brick building, fire proof, situated on the south side of main street, between fifth and sixth streets, Louisville, Kentucky, occupied by them." One of the conditions annexed to the policy, was that "goods held in trust or on commission, are to be insured as such, which may be done by inserting the words, `for account of whom it may concern,' otherwise the policy will not cover such property." On the 24th of November, 1840, a fire occurred by which the merchandize then contained in the building described in the policy, was consumed, to the value of $5179 84, of which all except goods to the value of $114 15, were the property of others held on consignment, and for sale by Hewitt, Allison, & Co. who then had in that building, merchandize to the value of $114 15, only. But they then had other goods, both of their own property and on consignment, in a contiguous building. And they had in their buildings at the time of the insurance, goods on consignment of the value of $10,000 or upwards, and also goods of their own not exceeding $5000, as stated by their Clerk, from an examination of the books, but exceeding $10,000 as proved by the agent and two other witnesses, to have been admitted by one of the firm after the fire. In what manner or proportion either class of these goods was distributed among the different buildings or warehouses, at the time of the insurance, does not appear. But it was proved by the Clerks, that they had advertised to do an exclusive commission business, and that their own goods were not expected to be long on hand.

The Insurance Company having refused to pay any part of the loss upon the goods held on consignment, and they not being embraced in the policy, Hewitt, Allison & Co. filed their bill alledging, among many facts, which are denied, the following, which is not denied, and which being moreover proved by the certificate, and referred to in it, may properly be considered in giving construction to it, viz: that in applying for the insurance, they informed the agent that they were commission merchants, doing business as such in their said building. It is also alledged, and not denied, that he knew that they had on hand, and were constantly receiving goods on consignment, on some of which they were making advances, and on others insurance was ordered by the consignors, and also that they applied to the agent for insurance on the stock of merchandize contained, &c and it is expressly proved, that before the negociation for the insurance was complete, they told him they wanted insurance on the consigned goods, and but for them and the orders of their owners, they would not care about it. These circumstances clearly indicate the character and purpose of the application. They leave no room to doubt that insurance was desired, and must have been understood as being desired to cover consigned goods, and in our opinion, they afford a proper key to the true construction of the words "occupied by them as a commission house," which are introduced into the certificate. That the three last of these words were not deemed requisite for the identification of the building in which the goods were contained, is proved by the omission of them in the policy. For what purpose then were they inserted in the certificate? We answer, not merely to identify the building, but to show the character of the business done in it, and of the stock of merchandize contained in it, and thus to indicate the character and extent of the insurance intended to be effected. And this inference may be drawn from the face of the certificate itself, as it shows the principal facts referred to without other evidence. The word "their," used in the certificate as designating the stock to be insured, may in its strict sense, denote absolute property, and might, if it stood unqualified by other words or circumstances, confine the insurance to the stock of which the insured were the actual owners. But it is also susceptible of another sense, and it is one in ordinary use, in which it denotes not absolute or general ownership, but the precise relation of special property, which subsists between a consignee, agent or bailee, and the goods of others which may be in his possession and under his control; and in this sense the possessive pronoun "his" or "their," is often used even in legal proceedings, in which proof of special property, or even of possession alone is deemed sufficient to sustain the title implied by the use of one of these words. Has a commission merchant, whose house is filled with goods of others, held on consignment, for sale by him, but who has no goods of his own, no stock? Most assuredly it is no misuse of terms, to say, that as commission merchant he has a stock, and that the goods held on consignment and commission constitute his stock. The absolute sense of the word "his" is plainly qualified by the character in which he holds the stock. The reference in the certificate to the manner in which the insured occupied the building, and to the business done therein, clearly shows that they had goods on commission in the building, and that such goods constituted the stock in the business referred to. These facts are sufficient to authorize the use of the word "their," as applied to the relation in which the insured stood to the goods on commission. And as there was no necessity nor sufficient reason for referring to these facts in the certificate, but to show that the insured had goods on commission to which the word "their" was intended to be applied. And as, moreover, the reference by the insured to their character of commission merchants, in applying for insurance, plainly indicating their desire to be insured on goods held in that character, required a reference to such goods to be made in the certificate which was to contain the elements of the contract, we are of opinion, that the reference in the certificate to the character of the insured, and of the business done by them, in the building in which the goods to be insured were contained, should be understood as having been introduced for the purpose of indicating that goods belonging to the business referred to were to be insured, and of thus qualifying the word "their," and showing that it was applied to the goods held in the character and business referred to. This construction is not affected by the fact, that the insured had goods of their own at the time of the insurance — for it is not shown that the agent, before giving the certificate, knew that they had any other goods but those held on commission in either of the buildings, except by evidence which also proves that he was informed by the complainants that they wanted...