McClure v. Mutual Fire Ins. Co. of Chester Co

Decision Date27 June 1913
Docket Number163
Citation88 A. 921,242 Pa. 59
PartiesMcClure, Appellant, v. Mutual Fire Ins. Co. of Chester Co
CourtPennsylvania Supreme Court

Argued April 19, 1913

Appeal, No. 163, Jan. T., 1912, by plaintiff, from judgment of C.P. Lancaster Co., May T., 1911, No. 44, for defendant n.o.v. in case of Lillie McClure v. The Mutual Fire Insurance Company of Chester Co. Reversed.

Assumpsit on a policy of fire insurance. Before LANDIS, P.J.

The opinion of the Supreme Court states the facts.

Verdict for plaintiff for $2,730. Subsequently on motion the court entered judgment for defendant n.o.v. Plaintiff appealed.

Error assigned was in entering judgment for defendant n.o.v.

Judgment reversed and is here entered for plaintiff on the verdict.

W. U Hensel, for appellant. -- The articles alleged to be kept upon the premises did not avoid the policy: Franklin Fire Ins. Co. v. Updegraff, 43 Pa. 350; Wall v. Howard Ins. Co., 14 Barb. (N.Y.) 383; Bryant v. Poughkeepsie Mut. Fire Ins. Co., 21 Barb. (N.Y.) 154; New York Eq. Ins. Co. v. Langdon, 6 Wend. 623; Moore v. Prot. Ins. Co., 29 Me. 97; Germania Fire Ins. Co. v. Francis, 52 Miss. 457; Phoenix Ins. Co. v. Slaughter, 79 U.S. 404; Aurora Fire Ins. Co. v. Eddy, 55 Ill. 213; Reaper City Ins. Co. v. Jones, 62 Ill. 458; Washington Mut. Ins. Co. v. M. & M. Ins. Co., 5 Ohio St. 450; Franklin Fire Ins. Co. v. Brock, 57 Pa. 74; Whitmarsh v. Charter Oak Fire Ins. Co., 2 Allen 581; Cobb v. Ins. Co., of N.A., 11 Kansas 93; Western Assur. Co. v. Rector, 85 Ky. 294; Mut. Fire Insurance Co. v. Coatesville Shoe Factory, 80 Pa. 407; Norwaysz v. Thuringia Ins. Co., 204 Ill. 334; Turnbull v. Home Insurance Co., 83 Md. 312; Bastian v. British Amer. Assurance Co., 143 Cal. 287; Boyer v. Grand Rapids Fire Ins. Co., 124 Mich. 455.

John E. Malone, with him Gheen & Parke, for appellee. -- The appellant having unquestionably violated this condition of the policy, the court below properly held under the authorities in Pennsylvania, that the policy was thereby rendered void and appellant was not entitled to recover: Fire Asso. v. Williamson, 26 Pa. 196; Lancaster Fire Ins. Co. v. Lenheim, 89 Pa. 497; Birmingham Fire Ins. Co. v. Kroegher, 83 Pa. 64; Heron v. Ins. Co., 180 Pa. 257; Hutton v. Ins. Co., 191 Pa. 369; McCurdy v. Insurance Co., 30 Pa.Super. 77; Diehl v. Ins. Co., 58 Pa. 443; Norwaysz v. Thuringia Ins. Co., 204 Ill. 334; Turnbull v. Home Ins. Co., 83 Md. 312; Bastian v. British Amer. Assurance Co., 143 Cal. 287; Boyer v. Grand Rapids Fire Ins. Co., 124 Mich. 455.

Before FELL, C.J., BROWN, MESTREZAT, POTTER, ELKIN, STEWART and MOSCHZISKER, JJ.

OPINION

MR. JUSTICE ELKIN:

This suit was brought on a fire insurance policy to recover for the total loss of a frame store building, dwelling house and attachments; and the defenses are: first, that the hazard of the risk was increased by changing the business conducted in the insured building from a general country store to a broom factory; and, second, that the keeping of gasoline, illuminating oil and gunpowder on the premises avoided the policy. The case was submitted to the jury and resulted in a verdict for the plaintiff. The jury were specifically instructed that there could be no recovery if the hazard were increased by the change of business and from the record here presented we must assume as an established fact that the hazard of the risk was not increased by the change of business. The verdict of the jury was conclusive on this question, and it may be eliminated from further discussion here.

The controlling question raised by this appeal is whether the policy was rendered void because some prohibited articles enumerated therein were kept on the premises during the life of the insurance contract. In order to properly understand the question involved it is necessary to briefly state some of the material facts. The policy was taken out in 1893 and was in full force and effect at the time of the fire in 1911, unless avoided by what occurred in the meantime. Appellant paid the annual assessments upon the premium endorsed on the policy of insurance and renewal receipts were issued to her by the company year by year from the time the insurance contract was entered into until the fire occurred. In other words the insured paid her premiums as stipulated in the policy for a period of eighteen years for the very purpose of protecting her property against loss by fire, and it now remains to be determined whether all this shall go for naught because her tenant kept on the premises some of the prohibited articles enumerated in the policy. In this connection it should be observed that the tenant conducted a general store in the building from 1893 until 1908 or 1909 at which time the store business was closed out and a small broom factory started. It was during the time the general store business was conducted in the building that gasoline, illuminating oil and gunpowder in any considerable quantities were kept on the premises. It is also an established fact that all of these articles were a part of the general stock of merchandise kept for sale in a country store, and that the tenant in the case at bar did keep these prohibited articles as merchandise for sale to his customers. When the tenant closed out his store business he disposed of all of his merchandise, including the prohibited articles. This occurred at least two years prior to the fire, so that it may be assumed, the insured paid two annual premiums and received two renewal receipts after the tenant had ceased to keep the prohibited articles on the premises. On this branch of the case one very important question for decision is whether under the facts just stated the policy was rendered absolutely void or only suspended during the time the prohibited articles were kept on the premises. Upon this precise question there is great conflict of authority, but after an exhaustive examination of many cases in our own State, as well as in other jurisdictions, we have concluded that the sounder and more equitable rule is against absolute forfeiture and in favor of the doctrine that the policy although suspended during the time the prohibited articles are kept on the premises may be revived by a discontinuance of the keeping or use of such prohibited articles. Upon this question we cite with approval Sumter Tobacco Warehouse Co. v. Phoenix Insurance Co., 10 L.R.A. (N.S.) 736, and more especially the note to the report of this case in which the authorities are collected. While this case had to do with the increase of hazard, the same rule is applied to clauses in insurance policies relating to the keeping or using of prohibited articles on the premises. When a prohibited article had been kept or used on the insured premises, but the insurer had not declared a cancellation or forefeiture of the policy on that account, and the keeping or use of the article had been discontinued prior to the happening of the fire, the following cases are authority for the doctrine that the keeping or use of the article did not absolutely avoid the policy, but merely suspended it during the continuance of the violation: Phoenix Ins. Co. v. Lawrence, 81 Am. Dec. 521 (Ky.); North British Mercantile Ins. Co. v. Union Stock Yards Co., 87 S.W. Repr. 285 (Ky.); Williams v. New England Mutual Fire Insurance Co., 31 Me. 219; Crete Farmers' Mut. Twp. Ins. Co. v. Miller, 70 Ill.App. 599; Kircher v. Milwaukee Mut. Ins. Co., 74 Wis. 470; Putnam v. Com. Ins. Co., 4 Fed. Repr. 753; Port Blakely Mill Co. v. Springfield Fire & Marine Ins. Co., 110 Pac. Repr. 36. In further support of this general doctrine, see Traders Ins. Co. v. Catlin, 163 Ill. 256; Organ v. Hybernia Ins. Co., 3 Mo.App. 576; Mutual Fire Insurance Co. v. Coatesville Shoe Factory, 80 Pa. 407; Mears v. Humboldt Fire Ins. Co., 92 Pa. 15. It is true that in the two Pennsylvania cases just cited the broad doctrine of forfeiture or suspension was not fully considered, but in the later case it was decided that what was intended to be prohibited in this and similar clauses of insurance policies, is the habitual use of the prohibited articles, and not their temporary or exceptional use. In the case at bar the keeping of the prohibited articles as a component part of the stock of merchandise in the store had been discontinued for at least two years before the fire occurred, and premiums were paid and renewal receipts issued long after the discontinuance of such use. Under these circumstances it is our conclusion, that the policy was not rendered absolutely void by what occurred, but was only suspended during the time the prohibited articles were kept on the premises, and that it was revived by a discontinuance of the prohibited use and by the payment of premiums and the issuance of renewal receipts after that time.

The learned counsel for appellee rely on Fire Association v Williamson, 26 Pa. 196; Lancaster Fire Ins. Co. v. Lenheim, 89 Pa. 497; Birmingham Fire Ins. Co. v. Kroegher, 83 Pa. 64; and Heron v. Ins. Co., 180 Pa. 257, to support their contention that the policy in the present case was absolutely forfeited and could not be revived without the consent of the insurer. If these cases be considered without reference to the particular facts upon which they were decided the argument that they are controlling here would have great weight. But in none of these cases was the question we are now considering either discussed or decided. It was held in those cases that the policies were forfeited because their terms had been violated, but nothing was said about a revival of the policies by a discontinuance of the prohibited uses and the payment of annual premiums thereafter. A reargument was ordered in the present case for the purpose...

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