Liverpool & L. & G. Ins. Co. v. Farnsworth Lumber Co.

• Decision Date: 06 May 1895
• Parties: LIVERPOOL & LONDON & GLOBE INSURANCE Co. v. FARNSWORTH LUMBER CO
• Court: Mississippi Supreme Court

17 So. 445

72 Miss. 555

LIVERPOOL & LONDON & GLOBE INSURANCE Co. v. FARNSWORTH LUMBER CO

Supreme Court of Mississippi

May 6, 1895

FROM the circuit court of Jackson county, HON S. H. TERRAL, Judge.

Action by Farnsworth Lumber Company against Liverpool & London &amp Globe Insurance Company on a policy of fire insurance. The property insured is described in the policy as follows "Pitch pine lumber, dressed and rough, while piled on yards and in lumber sheds of the Farnsworth Lumber Company's mill, situated on the east bank of the Pascagoula river, in Scranton, Mississippi." The policy contained the following, among other clauses: "Warranted by the insured that a continuous clear space of fifty feet shall hereafter be maintained between the property herein insured and any woodworking or manufacturing establishment and that said space shall not be used for the handling or piling of lumber thereon for temporary purposes, tramways for which lumber is piled alone being excepted. But this shall not be construed to prohibit loading or unloading within, or the transportation of lumber or timber products across, such clear space; it being specially understood and agreed by the assured that any violation of this warranty shah render this policy null and void." In view of the opinion it is not deemed necessary to notice the pleadings and the specific errors assigned to the rulings thereon. The main defense asserted was a breach by the assured of the warranty in the policy above quoted as to the maintenance of a clear space of fifty feet, and the testimony was mainly directed to that issue. There was evidence for the defendant showing that at the time of the fire the lumber insured was piled within less than fifty feet of a planing mill and the shed covering and inclosing it, also within less than fifty feet of a dry kiln a shed within which lumber was piled for drying purposes, and in which a fan was operated by steam conducted through pipes leading from the planing mill. There was also some testimony for the defendant tending to show that some of the lumber was piled near the sawmill proper, but it seems that the measurement taken to show this was made, not from the main building, but from an open platform surrounding it. In behalf of the plaintiff, it was shown that one Morrill, the local agent of the defendant and other insurance companies solicited from the superintendent of the lumber company insurance on the buildings and lumber, which were already insured in several companies but the policies were about to expire. Morrill visited the mill in person, and, before writing any policy, inspected the mill and sheds and the lumber piles, and made measurements as to the distances. He then wrote the policy in question, and, several weeks later, again visited the mill and lumber, yard and wrote two other policies of concurrent insurance on the lumber. At that time a large quantity of the lumber was piled in the shed which inclosed the planing mill, and in another shed just across the railroad track from it, and not fifteen feet away. It was shown that the lumber company had no other sheds in which it piled lumber, and that the words, "and in lumber sheds," appearing in the description of the property insured, were inserted by Morrill at the suggestion of the superintendent, and for the purpose of removing all doubt as to whether the lumber, as then piled in the sheds, was covered by the policy. It was further shown that no objection was made by Morrill as to the manner in which the lumber was piled, and nothing was said, either by him or the superintendent of the lumber company, about moving any of the lumber or the lumber sheds. One of the instructions given for the plaintiff was to the effect that if it was physically impossible to maintain a clear space of fifty feet between the planing mill, the shed and the dry kiln, and that Morrill, when he insured the property, intended to accept the risk, notwithstanding the condition of things as then existing was intended to continue, then the warranty of the policy as to the maintenance of a continuous clear space of fifty feet between the property insured and any woodworking or manufacturing establishment was waived.

By another instruction for plaintiff, the court informed the jury that the burden of proof was on the defendant to show a breach of said warranty, "and if, upon the evidence, the minds of the jury are not satisfied to a reasonable degree of certainty of that breach, they should find for the plaintiff upon that issue." There was a verdict and judgment for plaintiff, and, after a motion for a new trial overruled, defendant appeals.

Judgment affirmed.

Calhoon & Green, for appellant.

As the lumber insured was piled in the yards and in sheds, the words "any woodworking or manufacturing establishment" cannot embrace the sheds, as this would result in an absurdity. They must be limited to mean woodworking or manufacturing machines. Applying the language, thus interpreted, to the facts, we find there was a planer in the larger shed, a dry kiln in the yard not fifty feet away from the shed, and the sawmill proper, which was more than fifty feet from the shed. We think the meaning of the condition is that the lumber insured must be piled in the yards and in the sheds, with a continuous clear space between it and the planer and the dry kiln and the sawmill, and these are the woodworking establishments meant by the policy: Contracts of insurance, being neither mala prohibita nor mala in se, are to be regulated by the same rules that govern in ordinary agreements. Cooperative Ass'n v. Leflore, 53 Miss. 1. The precise language of this policy was involved in Shingle Mill Co. v. Insurance Co., 91 Mich. 441, and was held to be a warranty in futuro and not in proesenti. A warranty implies the truth of the matter of the covenant, and its materiality is placed beyond controversy by the contract of the parties. Co-operative Ass'n v. Leflore, supra; Jeffries v. Insurance Co., 22 Wall., 47; 7 Wend., 73. Promissory warranties must be strictly performed. 1 Bid. on Ins., § 566; Shingle Mill Co. v. Insurance Co., supra. The warranty is in futuro, and the then existing location of the lumber, so far from determining the rights of the company, cuts no figure, save that, if contrary to the covenant, it would have to be removed the prescribed distance. If it be true that it was impossible to maintain the space between the sheds and between the lumber piled in the planing mill shed and the planer, this would not show there had not been a breach as to the lumber piled in the yards and the other shed. It is unnecessary to cite authorities to show that a covenant of warranty must be performed. Klyce v. Broyles, 37 Miss. 524; Kimbrough v. Curtis, Ib., 117.

The burden of proof of breach of warranty is upon the plaintiff. 1 Bid. on Ins., §§ 557, 566; 30 Penn., 315; 22 Wall., 47; Klyce v. Broyles, supra; 2 Saunders on Pl. & Ev., 596, 599; Winn v. Skipwith, 14 Smed. & M., 14:; Holliday v. Cooper, 1 Ib., 633; Porter v. Still, 63 Miss. 357. Besides, the plaintiff alleged excuse for nonperformance, and this was in confession and avoidance of the breach, and put the burden on it. 1 Saunders on PI. & Ev.,. 127.

The instruction is erroneous in requiring the minds of the jury to be satisfied to a reasonable degree of certainty. What may be a reasonable degree of certainty for one mind may not be for another. Verdicts must rest upon belief of the existence of facts, and not upon satisfaction to a reasonable degree of certainty.

R. H. Clarke and Brame & Alexander, for appellee.

1. Inasmuch as all the facts touching the main defense presented were brought out, and each party obtained the benefit of all the evidence, the court will not pass seriatim upon the rulings on the pleadings, Insurance Co. v. Scales, 71 Miss. 975. It has come to be characteristic of insurance companies to seek to escape from liability in the mazes of the score or more stipulations of their policies, all of which are for their protection and none for the benefit of the insured, and, that failing, in a labyrinth of special pleadings.

It is indisputable that the insured was led to believe and understand that the lumber in the sheds was insured, and that the lumber, as piled, conformed to the stipulations of the policy. The words of the contract must be taken in the sense in which they were understood by the person to whom they were addressed--that is, in the sense in which the promisee understood them. Greenwood v. Ligon, 10 Smed. & M 615. If an exception in a policy be capable of two interpretations equally reasonable, that must be adopted most favorable to the insured. 22 Penn., 351; 20 Am. St. R., 826; 40 Ib., 405. It is now settled, and by almost unanimity in the late decisions, that where an agent of an insurance company thoroughly examines the risk, and understands there is something connected with it that violates the conditions of the policy, and knows the assured intends to act in a certain way, yet makes no objection, but issues the policy and accepts the premiums, the company must be held to have waived the conditions. 2 Biddle on Insurance, § 1060. This is the law also announced by May and Ostrander in their works on insurance. It hardly seems necessary to cite authorities from other states, but we refer to 3 Wis. 254; 10 La. Ann., 737; 65 Iowa 308; 68 Ib., 737; 87 Mo. 62; 54 Vt. 223; 52 Ark. 11; 76 Cal. 50. Even Massachusetts, which formerly held to a different rule, has relaxed. 135 Mass. 248. And so in Pennsylvania. 120 Penn., 504. But the matter is set at rest in this state by Mitchell v. Insurance Co., ante, p. 53. See, also, Insurance Co. v. Gibson, ante, p. 58; Insurance Co. v. Sheffy, 71 Miss. 919. There is no real distinction...