Rabok Mfg. Co. v. Scottish Union & National Ins. Co.

• Decision Date: 08 November 1921
• Docket Number: No. 16586.,16586.
• Citation: 236 S.W. 918
• Court: Missouri Court of Appeals
• Parties: RABOK MFG. CO. v. SCOTTISH UNION & NATIONAL INS. CO. OF EDINBURG, SCOTLAND.

236 S.W. 918

RABOK MFG. CO. v. SCOTTISH UNION & NATIONAL INS. CO. OF EDINBURG, SCOTLAND.

No. 16586.

St. Louis Court of Appeals. Missouri.

November 8, 1921.

Rehearing Denied February 2, 1922.

Appeal from Circuit Court, Audrain County; Ernest G. Gantt, Judge.

"Not to be officially published."

Action by the Rabok Manufacturing Company against the Scottish Union & National Insurance Company of Edinburg, Scotland. Judgment for plaintiff, and defendant appeals. Affirmed.

Leahy & Saunders, of St. Louis, Clarence A. Barnes, of Mexico, Mo., and David W. Voyles, of St. Louis, for appellant.

Abbott, Fauntleroy, Cullen & Edwards, of St. Louis, for respondent.

BECKER, J.

The plaintiff company, a corporation engaged in the manufacture of paints such as are used generally by railroad companies, recovered a judgment below against the defendant insurance company upon a policy of fire insurance; the judgment being for the full face of the policy plus 10 per cent, damages, and a sum allowed as attorney's fees for wrongful and vexatious refusal to pay. The insurance company in due course brings this appeal.

It appears that the plaintiff company, prior to June 12, 1918, carried 16 policies of fire Insurance, aggregating $13,500, upon its personal property. Each of these policies was of the kind that is designated "blanket" form of insurance, but on that date, in order to obtain a lower premium rate, plaintiff had the form of its several policies of insurance changed from the "blanket" to a "specific" form, by attaching a printed rider thereto which provided that $3,750 of the insurance specifically covered machinery, equipment, and fixtures, and $9,750 specially covered its —

"stock in trade, consisting principally of paint, dried and in oil, paint pigments, oils, minerals, colors, manufactured, unmanufactured, and in the process of manufacture, and all materials and supplies used in and for the manufacture, storage, shipping, packing, and sale thereof; on barrels, drums, cans, boxes, stationery, and advertising matter, and all merchandise and material constituting their stock in trade and incident or necessary to the business as conducted by them. * * *"

Amongst plaintiff's said policies of insurance is the one herein sued on which is for $500 and covers its proportion of each of the said two general classifications of property insured.

The policy, among other provisions, contains the following:

"Work and Materials Clause.

"Permission granted for the use of the premises as stated above and for other purposes not any more hazardous, and when not in violation of any law, statute, or municipal restriction, to keep and use all articles and materials usual to the business conducted therein, but the use, handling, or storing of benzine, benzole, calcium carbide, dynamite, ether, fireworks, gasoline, Greek fire, gunpowder exceeding twenty-five (25) pounds in quantity, naphtha, nitroglycerine, or other explosives, phosphorus, petroleum, or any of its products of greater inflammability than kerosene oil of the legal standard is prohibited unless a specific permit is attached hereto. * * *

"This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void, * * * or if (any usage or custom of trade or manufacture to the contrary notwithstanding) there be kept, used, or allowed on the above-described premises, benzine, benzole, dynamite, ether, fireworks, gasoline, Greek fire, gunpowder exceeding twenty-five pounds in quantity, naphtha, nitroglycerine, or other explosives, phosphorus or petroleum or any of its products of greater inflammability than kerosene oil of the United States standard (which last may be used for lights and kept for sale according to law, but in quantities not exceeding five barrels, provided it be drawn and lamps filled by daylight or at a distance not less than ten feet from artificial light)."

Counsel for plaintiff company in his opening statement to the jury, and in fact throughout the case, conceded that on the 29th day of July, 1918, the date on which the fire loss occurred, the plaintiff was using naphtha in the manufacture of its paint in and on the premises, without having any permission from the defendant so to do attached to or upon said policy of insurance; and it is the contention of the defendant below, appellant here, that the use of naphtha in the manufacture of paint is a violation of the contract of insurance such as to render the policy in question null and void and of no effect.

The appellant contends that the learned trial court erred in refusing to direct a verdict for defendant on the opening statement of counsel for plaintiff and the pleadings, and at the close of plaintiff's case, and at the close of all of the evidence. To dispose of this assignment of error it is necessary to determine whether the use of naphtha by plaintiff in the manufacture of its paints rendered the policy in question void.

The record discloses that the plaintiff manufactured its paints in mills situated in the basement of the building it occupied; that there were four of such mills, having a capacity of approximately 1,300 gallons each. These mills were large round tanks made of galvanized iron, on the inside of which was certain mixing machinery which was operated by electric power. Gilsonite was placed at the bottom of the tanks and naphtha was then run into the tanks, which was ground up with the gilsonite by a mechanical process.

It appears that the plaintiff never kept any naphtha in the building except in the process of the manufacture of paint. When plaintiff received its naphtha in carloads or, tank cars, it was unloaded and stored in drums on the sidewalk outside of the building until needed in the manufacture of paint, when the drums were rolled onto an elevator and taken to the first floor of the building, where the naphtha was emptied from the drums into a big funnel into the mill in which paint was to be manufactured. Sometimes naphtha was obtained from local institutions in St. Louis. In such cases the exact amount of naphtha that was required for use in a particular mill was ordered delivered by wagon, and the naphtha was discharged from the tank wagon directly into a pipe on the street through which it flowed into the mill.

On the day of the fire 940 gallons of naphtha which had been purchased from a local concern had been delivered by wagon and run into mill No. 2. This mill was in operation grinding the naphtha and gilsonite when the fire occurred. According to the testimony of plaintiff's witnesses, and it is not contradicted, this mill did not explode or burn up at the time of the fire, and its contents were afterwards sold. It is not disputed that in the course of the fire one or more explosions occurred and that two people were killed, one of whom was the president of the plaintiff company.

Plaintiff introduced testimony tending to show that the use of naphtha was necessary and essential to the carrying on of its business, and that naphtha had been extensively and generally used in the city of St. Louis and elsewhere in the manufacture of paints of the character manufactured by the plaintiff company. And J. Will Finlay, a witness for defendant, testified that he was superintendent for the Waters Pierce Oil Corporation at St. Louis, and had been engaged in the oil business for 36 years; that he is familiar with the various products of petroleum oil; that naphtha is a commercial product of petroleum oils of a heavier Beaume gravity than gasoline, and will flash at the ordinary room temperature. He testified that the flash point represents the degree of temperature in which vapors are present in sufficient quantity to ignite when a light or flame is applied. He further testified that various oil companies make a product commercially known as "heavy" naphtha for use in the manufacture of paints and varnishes; this so-called "heavy" naphtha had a flash point varying from 85 to 101 degrees temperature; that "heavy" naphtha has a greater inflammability than kerosene of the legal standard; that inasmuch as Interstate Commerce Commission required a triangular red label to be attached to any products that had a flash point below 80 degrees Fahrenheit as a caution against lightning or fire while in transit, the various oil companies had developed the "heavy" naphtha with a flash point sufficiently high that the manufacturers of paint could use it without being required to apply such label; and that his company sells "heavy" naphtha to paint factories in St. Louis and throughout the Mississippi Valley.

This witness further testified that both the ordinary naphtha, which has a flash point at ordinary room temperature, and heavy naphtha, which flashes at temperature of 85 to 101 degrees, "are naphtha, but of a different flash point, and either can be used in the manufacture of paints." And when asked whether each represents the kind of petroleum products that are furnished by oil companies to paint manufacturers throughout the United States and are used in the manufacture of paints, he answered:

"As are specified.

"Q. And they are generally and usually used by paint manufacturers in the city of St. Louis and elsewhere? A. Yes, sir.

"Q. And have been for a large number of years? A. Yes, sir."

In light of the testimony we have thus set out above, we are clearly of the opinion that the learned trial court properly submitted to the jury the question as to whether the use of naphtha by plaintiff in the manufacture of its paint voided the policy. In arriving at this conclusion we are not unmindful of the fact that there is an inconsistency between certain of the general clauses of the policy of insurance and the clause in the policy which specifically enumerates the property to be covered by this particular policy.

Because of these clauses which clearly contradict each other and are not capable of a reasonable construction when read together so...