Phoenix Ins. Co. v. Flemming

• Decision Date: 05 February 1898
• Citation: 44 S.W. 464
• Parties: PHOENIX INS. CO. v. FLEMMING et al.
• Court: Arkansas Supreme Court

44 S.W. 464

PHOENIX INS. CO. v. FLEMMING et al.

Supreme Court of Arkansas.

February 5, 1898.

Appeal from circuit court, Phillips county; Hance N. Hutton, Judge.

Action by Flemming & Co. against the Phœnix Insurance Company. From a judgment in favor of plaintiffs, defendant appeals. Reversed.

Action upon an insurance policy issued by the defendant, the Phœnix Insurance Company, upon a stock of merchandise owned by plaintiffs for the sum of $1,500. The presiding judge, at the trial in the circuit court, among other instructions, gave to the jury the following, at the request of the plaintiffs, to which the defendant objected: "(3) And even if the agent did not have such notice, or give plaintiffs permission to keep these articles, still, if you find from the evidence introduced that after the loss by fire defendant's agent was informed of these facts, and with full knowledge thereof required plaintiffs to exhibit to him their books of account, and demanded of them proofs of loss, as prescribed by the policy, and in pursuance of these demands plaintiffs did produce to them their books, and afterwards made out, at inconvenience and expense, proofs of their loss for defendant, in that event a forfeiture of the policy, if there was one, was waived by defendant, and plaintiffs are entitled to a verdict on that issue. The reason of this rule of law is that, as soon as an insurance company ascertains the facts which they claim cause a forfeiture of the policy, it is their duty to notify the plaintiffs that they deny all liability under the policy, and, if they fail to do so, but insist on proofs of loss, or examining his affairs, and putting to trouble and expense, the law estops them from afterwards claiming such forfeiture." There was a verdict and judgment against the insurance company.

John J. & E. C. Hornor, for appellant. Stephenson & Trieber and Quarles & Moore, for appellees.

RIDDICK, J. (after stating the facts).

This is an action upon a fire insurance policy to recover the value of property insured which had been destroyed by fire. The property is described in the written portion of the policy as a "stock of merchandise, consisting of drugs, stationery, liquors, tobacco, toys and fancy articles, paints, oils, chemicals, and such other goods, not more hazardous, such as is usually kept for sale in a drug store." The printed portion of the policy stipulated that the policy should be void if benzine or fireworks were kept, unless by agreement indorsed on the policy. No such agreement was indorsed upon the policy, and the evidence showed that both benzine and fireworks were kept in the store of plaintiffs. The insurance company contends that this avoided the policy. As to the benzine, only a small quantity was kept in the store. This was put up in bottles containing from two to six ounces each, to be sold to ladies for the purpose of cleansing gloves. It amounted to about a gallon in all. The testimony showed that it was customary for druggists to keep benzine bottled in small quantities, to be sold for such purposes, and that, as one witness stated, "a drug store without it would be incomplete." The question arises whether this benzine was not included in the written description of the property insured, for, if it was a part of the property insured, it follows as a matter of course that its presence in the store did not avoid the policy. The written portion of the policy insuring the benzine as a part of the stock of merchandise would override the printed portion, forbidding it to be kept. To hold otherwise would make the contract mean, in effect, that the company contracted to take pay and insure the owner of this benzine against its destruction by fire, but only on condition that no benzine was kept. The courts will not presume that the parties intended to make such an absurd agreement, but in such a case will presume that the intention was that the printed portions of the policy, forbidding the keeping of benzine, should not apply to the keeping of it bottled in small quantities, as customary with druggists, but only to storing or keeping it in large quantities. Faust v. Insurance Co., 91 Wis. 158, 64 N. W. 883; Mears v. Insurance Co., 92 Pa. St. 15; Hall v. Insurance Co., 58 N. Y. 292; Pindar v. Insurance Co., 36 N. Y. 648; Harper v. Insurance Co., 17 N. Y. 197; Archer v. Insurance Co., 43 Mo. 434; Cushman v. Insurance Co., 34 Me. 487. Now, the property insured is described as a stock of merchandise consisting, among other things, of "drugs" and "chemicals." The word "drug" is defined as any animal or mineral substance used in the composition of medicines; any stuff used in dyeing or in chemical operations; any ingredient used in chemical preparations employed in the arts. Webst. Dict.; Cent. Dict. The term "chemical" is defined as a substance used for producing a chemical effect, or one produced by a chemical process; a chemical agent prepared for scientific or economic use. Webst. Dict.; Cent. Dict. The definition of "benzine" given in Webster's International Dictionary is: "A liquid consisting mainly of the lighter and more volatile hydrocarbons of petroleum or kerosene oil, used as a solvent, and for cleansing soiled fabrics." It is used in the arts as a solvent for fats, resins, and certain alkaloids. Cent. Dict. Without going into a discussion of the scientific or exact meaning of these terms, we will say that, in our opinion, the evidence shows that benzine kept in the quantities and for the purposes kept by plaintiffs was included in the terms "drugs" and "chemicals," used in describing the property insured, and that the company intended to insure such benzine. As the company writes the policy, the rule is to resolve doubts arising as to its meaning in favor of the assured. Jones v. Insurance Co., 38 Fed. 19. Benzine put up in small quantities was a part of the stock asked to be insured. Bottled and corked in such quantities, it was probably not more dangerous than other chemicals. It was not necessary to give the particular name of each drug or chemical, or other article that went to make up the entire stock, and the company, in describing the property insured, has chosen to use general terms, which we think fairly include the benzine in the stock. For these reasons we are of the opinion that the policy was not avoided by the fact that benzine was kept bottled in small quantities as a part of the stock of drugs and chemicals. The agents of the appellant company seem to have been of this opinion also, for, after the fire, when they had examined the books, and knew the facts, they stated to plaintiffs that their policy was void because they kept fireworks, but said nothing of the benzine.

Was the policy avoided by the fact that fireworks were kept in plaintiffs' store? We will first notice the contention made by plaintiffs that the forfeiture, if any existed, was waived by a demand made on the part of the company after knowledge that fireworks were kept in the store, that plaintiffs should exhibit their books, and make out proof of...