Phoenix Insurance Co. v. Flemming

Citation44 S.W. 464,65 Ark. 54
PartiesPHOENIX INSURANCE CO. v. FLEMMING
Decision Date05 February 1898
CourtArkansas Supreme Court

Appeal from Phillips Circuit Court HANCE N. HUTTON, Judge.

STATEMENT BY THE COURT.

Action upon an insurance policy issued by the defendant, the Phoenix 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 plaintiff, 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 plaintiff 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.

Judgment reversed.

Jno. J. & E. C. Hornor, for appellant.

The second instruction given for appellees is erroneous, because (1) it assumes as proved that the prohibited articles were in stock; (2) even had this been true, appellees knew the stipulation in the contract, and should not have acceded to it. if they did not desire to be bound by it. 62 Ark. 63; 58 Ark. 281; 50 Ark. 406; 26 P. 718; 2 S.E. 258. In the absence of fraud, appellees are bound by the agreement not to keep fireworks, etc. 151 U.S. 462; 104 U.S. 259; 60 F. 358; 96 U.S. 547. Demand, by appellant, of proofs of loss or examination of affairs of appellees, after appellant knows of the facts which it claims work a forfeiture of the policy, do not constitute a waiver of such forfeiture. 47 N.W. 350; 16 S.W. 470; Ostrander on Fire Insurance, 754; 144 U.S. 439; 47 N.Y. 118; 1 May, Ins. § 232. Parol evidence is not admissible to show an agreement to allow the handling of extra-hazardous goods under a policy prohibiting such. The burden of showing a waiver of the forfeiture on conditions was on the appellees. They must show that, by the acts or declarations of an agent duly authorized, a reasonable belief of waiver was induced in their minds. 136 N.Y. 551; 29 N.W. 521. Knowledge coming to an agent in his individual capacity, after the contract is made, does not affect the principal. Wood on Ins. § 403; 15 S.W. 34. Where waiver of the conditions of a policy is, by its terms, required to be in writing and indorsed on the policy, any waiver or change must be so evidenced. 141 N.Y. 219; 136 N.Y. 547; 133 N.Y. 356; 85 N.Y. 278; 73 N.Y. 10; 10 N.E. 522; 6 Gray, 169 11 Cush. 265; 54 N.W. 21. The power to restrict by such a condition was upheld by the following cases: 54 N.W. 455; 46 N.W. 483; 42 P. 611; 32 N.W. 660; 15 A. 353; 35 N.W. 34; 4 P. 764; 8 P. 379; Ostrander, Fire Ins. 748. Stipulations which do not properly amount to conditions are governed by a different rule. 36 N.E. 662; 8 N.E. 285; 52 Ark. 11; 60 Ark. 538; 13 S.E. 236; 69 F. 71.

Stephenson & Trieber and Quarles & Moore, for appellees.

A general exception to a number of instructions is bad if any of them be good. 28 Ark. 8; 38 Ark. 528; 54 Ark. 16; 59 Ark. 312; 60 Ark. 250. If an instruction is not clear, it is the duty of the complaining party to call attention to it below. 58 Ark. 253; 62 ib. 203; 60 Ark. 333. Knowledge of agent, at time of insurance of policy, that prohibited articles were in stock, estops the insurance company to rely on such a defense. 52 Ark. 11; 53 Ark. 215; 69 F. 71; 62 Ark. 562. Continuation of dealings with appellee waived any forfeiture. 53 Ark. 494. The printed portions of a policy are controlled by the written ones, in case of repugnancy; hence it was proper for the court to instruct the jury that the policy was not defeated by the keeping of benzine in such small quantities as are usually kept by drug stores. 17 N.Y. 194; 36 N.Y. 648; 93 Am. Dec. 544 and note; 53 Vt. 418; 12 F. 554; 32 F. 48; 54 N.Y. 90; 1 May, Ins. § 233; 64 N.W. 883; 47 N.Y. 114; 111 Cal. 503; 95 Ga. 601; 170 Pa.St. 151; Wood, Ins. §§ 63, 64; 11 Bissell, 309; 43 Pa.St. 350; 32 F. 47. When an agent or adjuster of an insurance company, with full knowledge of all the acts constituting the forfeiture claimed in the trial, puts the plaintiff to the inconvenience, trouble and expense of perfecting his proof of loss, such conduct waives proof of loss. Such conduct operates as a waiver of the conditions, and a written indorsement of such waiver is thereby rendered unnecessary. 53 Ark. 494; 52 Ark. 11; 60 Ark. 532; 62 Ark. 348; 69 F. 71; 62 Ark. 562; 49 Kans. 178; 63 Ark. 187; 63 ib. 204; 32 S.W. 214; 33 Kas. 497; 136 U.S. 408; 11 Am. & Eng. Enc. Law, 338; 92 N.Y. 51; 39 N.W. 76; 41 N.W. 60.

OPINION

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. Am. Ins. Co., 91 Wis. 158, 64 N.W. 883; Mears v. Humboldt Ins. Co., 92 Pa. 15; Hall v. Insurance Co., 58 N.Y. 292; Pindar v Insurance Co., 36 N.Y. 648; Harper v. Albany Ins. Co., 17 N.Y. 194; Archer v. Merchants' Ins. Co., 43 Mo. 434; Cushman v. Ins. 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; and ingredient used in chemicals preparations employed in the arts. Webster's Dict., The Century 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. Webster's Dict. The Century Dict. The definition of benzine given in Webster's International Dictionary is "a liquid consisting mainly of the lighter and more volatile hydro-carbons 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. Century Dict.

Without going into 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 that the proof shows that it was 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. Ins. Co., 38 F. 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...

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