Louisville Underwriters v. Durland

• Decision Date: 01 March 1890
• Docket Number: 14,345
• Citation: 24 N.E. 221,123 Ind. 544
• Parties: The Louisville Underwriters v. Durland et al
• Court: Indiana Supreme Court

24 N.E. 221

123 Ind. 544

The Louisville Underwriters v. Durland et al

No. 14,345

Supreme Court of Indiana

March 1, 1890

From the Vanderburgh Circuit Court.

Judgment affirmed, with costs.

T. D Lincoln, J. E. Iglehart and E. Taylor, for appellant.

G. V Menzies, A. Gilchrist and C. A. De Bruler, for appellees.

OPINION

Berkshire, J.

This was an action upon a marine insurance policy. There was a trial below and a judgment rendered for the appellees.

The appellant assigns two errors in this court:

1st. The court erred in overruling the demurrer to the complaint.

2d. The court erred in overruling the motion for a new trial.

We find no objection to the complaint. By the terms of the policy the appellant was liable for any loss occasioned to the steamer by fire, "except when caused by explosion of boiler," and except as limited by certain warranties contained in the policy. The complaint alleges that the loss was caused by fire which was not caused by the explosion of any boiler, and alleges generally that the appellees had performed all the conditions of the contract on their part.

Appellant contends that the complaint is bad because it fails to allege in specific terms that the loss did not occur because of the breach of some one or more of the warranties contained in the policy.

Among other things covered by the warranties of the appellees, is loss occasioned "by the bursting of boilers, by the collapsing of flues."

Perhaps we had better set out this portion of the policy so far as material to the question under consideration:

"Warranted by the assured that this company shall be free from all claims for loss or damage arising from or caused by theft barratry, robbery, civil commotion, war or piracy, or during any time said vessel shall be seized and taken possession of or detained by any act of the United States government or other legally excluded cause; by damage that may be done by the vessel hereby insured to any other vessel or property; from any loss or damage occasioned by said vessel being improperly laden, by the bursting of boilers, by the collapsing of flues, by the explosion of gunpowder, by the derangement or breaking of the engine or machinery, or from consequences of any character resulting from either of the foregoing exceptions, unless the same be caused by unavoidable external violence."

We have the following statute, section 370, R. S. 1881: "In pleading the performance of a condition precedent in a contract, it shall be sufficient to allege, generally, that the party performed all the conditions [of the contract] on his part. If the allegation be denied, the facts showing a performance must be proved on the trial."

If the clauses "by the bursting of boilers, by the collapsing of flues," are conditions precedent, then the foregoing statute rendered it unnecessary for the appellees to allege in their complaint specifically the performance of those conditions. Fairbanks v. Meyers, 98 Ind. 92; Purdue v. Noffsinger, 15 Ind. 386. This statute applies to insurance policies the same as other contracts. Continental Life Ins. Co. v. Kessler, 84 Ind. 310; American Ins. Co. v. Leonard, 80 Ind. 272; Home Ins. Co. v. Duke, 43 Ind. 418; Phoenix Ins. Co. v. Pickel, 119 Ind. 155, 21 N.E. 546.

If they amount to warranties, or are exceptions (and they are given both names by the appellant) it was not necessary that their violation be negatived in the complaint. It is not required of the plaintiff in an action on an insurance policy that he in his complaint negative warranties and exceptions stated in the policy.

If the loss is within a warranty or exception, it is matter of defence, which must be pleaded affirmatively by the defendant. National Benefit Ass'n v. Grauman, 107 Ind. 288, 7 N.E. 233; Piedmont, etc., Life Ins. Co. v. Ewing, 92 U.S. 377, 23 L.Ed. 610; John Hancock Mut. Life Ins. Co. v. Daly, 65 Ind. 6; Northwestern Mut. Life Ins. Co. v. Hazelett, 105 Ind. 212, 4 N.E. 582; Phenix Ins. Co. v. Pickel, supra; May Ins., section 183.

In coming to a conclusion upon many of the questions involved, it becomes necessary that we construe the policy. By its terms and conditions the appellant assumed in express terms all unavoidable dangers of the waters which the vessel was to navigate, and of fires, with one stipulated exception, which was exemption from fires caused by the explosion of boilers. Further on in the instrument the appellees obligated themselves in general terms in the nature of warranties, which it is claimed modified the express covenants of the appellant.

The covenant of the appellant being an express covenant against loss occasioned by fire except as therein limited, the question is presented, did not the appellant thereby become bound to the appellees for all losses caused by fire while they were running and operating the said steamer upon said waters except fires caused by the explosion of boilers? We are inclined to the opinion that the appellant was so bound. The covenants of warranty were general in their character, while the covenants of the appellant, and especially as to loss occasioned by fire, were express and specific. And again, the warranties are covenants on the part of the appellees, and form no part of the covenants of the appellant. The most that can be claimed for them is that for any loss coming within their terms they operated to release and discharge the appellant from the responsibility to which its covenants bound it. Policies of insurance, like other contracts, are to be reasonably construed. "The contract of insurance should be liberally construed, with a view to effectuate its purpose. The language of the policy, and of the interrogatories and provisions of the application, is carefully and deliberately prearranged by the insurer; in its preparation the insured has no part. Whatever there may be in the language so prepared by the insurer, which has any tendency to defeat the main purpose of the contract, should be strictly construed against the insurer. If there be any ambiguity in an interrogatory propounded to the applicant, or it be capable of more than one answer, it should be construed most strongly against the insurer, and most favorably to the insured, in whose favor all doubt should be resolved." Penn Mut. Life Ins. Co. v. Wiler, 100 Ind. 92; Phenix Ins. Co. v. Pickel, supra; Boatman, etc., Ins. Co. v. Parker, 23 Ohio St. 85.

We quote the following, which seems to be in point, from Wood Fire Insurance, p. 259: "The court further laid down the rule that it is the duty of an insurance company seeking to limit the operation of its contract of insurance by special provisos or exceptions, to make such limitations in clear terms, and not leave the insured in a condition to be misled. The insured may reasonably be held entitled to rely on a construction favorable to himself where the terms will rationally permit it."

It is also a well-settled rule, or canon of construction, applicable to all contracts, that such construction will be applied as will give force and effect to all parts of the contract, if it can be done without doing violence to the language employed and the evident intention of the parties, and especially will this be done if such a construction will carry into effect the evident intention of the parties.

When appe...