State v. Allen

• Decision Date: 31 July 1923
• Docket Number: No. 23414.,23414.
• Citation: 254 S.W. 194
• Parties: STATE ex rel. AGRICULTURAL INS. CO. OF WATERTOWN, N.Y., v. ALLEN et al., Judges.
• Court: Missouri Supreme Court

254 S.W. 194

STATE ex rel. AGRICULTURAL INS. CO. OF WATERTOWN, N.Y., v. ALLEN et al., Judges.

No. 23414.

Supreme Court of Missouri, Division No. 1.

July 31, 1923.

Rehearing Denied August 15, 1923.

Certiorari to St. Louis Court of Appeals.

Certiorari by the State of Missouri, on the relation of the Agricultural Insurance Company of Watertown, N. Y., against Wm. H. Allen and others, Judges of the St. Louis Court of Appeals. Writ quashed.

Leahy, Saunders & Walther, of St. Louis, far relator.

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

RAGLAND, J.

Original proceeding by certiorari. Relator alleges that the opinion of the St. Louis Court of Appeals in the case of Rabok Manufacturing Co. v. Agricultural Insurance Co. of Watertown, N. Y., reported in 236 S. W. 516 and following, contravenes, in certain particulars, prior rulings of this court. In response to our writ the record has been certified here for review.

The suit was on a policy of fire insurance; the plaintiff obtained judgment in the circuit court for the face of the policy and interest and attorney fees as for a vexatious refusal to pay; the judgment, on defendant's appeal, was affirmed by the Court of. Appeals. As disclosed by the opinion of the latter court, the salient facts of the case are briefly these:

Plaintiff was engaged in the manufacture of paints. The policy covered machinery, equipment, and fixtures, and plaintiff's "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."

The policy contained what was therein designated "work and materials clause." The pertinent portion thereof was as follows:

"This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void * * * 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."

Plaintiff at all times, both before and after the issuance of the policy, used large quantities of naphtha in the manufacture of its paint. Such use was necessary and essential to the carrying on of its business and was in accordance with a custom universally followed by manufacturers of paints of the character of that manufactured by plaintiff. However, plaintiff never kept any naphtha in the building on its premises except that actually in use in the process of manufacturing paint.

All forms of naphtha are of "greater inflammability than kerosene oil of the United States standard." Notwithstanding, on the date of the fire no agreement had been indorsed upon the policy permitting the use of naphtha on the premises occupied by the property insured.

At the trial of the cause evidence was offered by plaintiff tending to show that the person who solicited the insurance and delivered the policy was the agent of the defendant and at such times had full knowledge of the use made of naphtha by plaintiff in its business of manufacturing paint; evidence contra was offered by defendant.

At the close of plaintiff's case and again at the close of all the evidence, the defendant asked an instruction in the nature of a demurrer to the evidence. In each instance its request was refused. By instruction No. 1 given for plaintiff the trial court instructed the jury;

" * * * If you believe that plaintiff was engaged in manufacturing paints in the building situated at Nos. 102-104 South Commercial Street, St. Louis, Mo., at and before the time the policy was issued, and that the plaintiff on said date and prior thereto used naphtha, petroleum, or any of its products of greater inflammability than kerosene oil of the legal standard, and if you further believe that said products were necessarily used in the process of manufacturing paint, and the use of said products was usual and indispensable to the business conducted by plaintiff, and if you further believe that on said date W. B. Berry was the agent of the defendant, as explained and defined in other instructions, and that he had been informed and knew before and at the time he issued the policy that plaintiff was using such grade of naphtha or petroleum products in manufacturing paint, then you are instructed that the use of naphtha or such petroleum products did not avoid the policy, and your verdict should be for plaintiff."

By plaintiff's instruction No. 2 the jury was told that if certain facts were found by them they were authorized to further find that Berry was defendant's agent.

An instruction given for defendant, No. 4, after telling the jury that no condition or provision of the policy could be waived by any officer or agent of the company except by written waiver indorsed upon or attached to the policy, proceeded as follows:

"You are further instructed that by the terms of said policy the having, using, or keeping upon the insured premises of naphtha is prohibited, and that there is no consent of the defendant in writing indorsed in or on said policy waiving said provision of said policy. And you are further instructed that the burden of proof is upon the plaintiff to establish to your satisfaction by the greater weight or preponderance of the credible testimony in this case, before you can find in favor of the plaintiff, that defendant or some agent duly authorized by it" to sign policies of insurance for defendant, with knowledge of the facts at the time, did waive compliance by plaintiff with said provision of said contract before said fire."

I. With reference to defendant's assignment of error based upon the trial court's refusal to sustain its demurrers to the evidence, the Court of Appeals ruled that, if naphtha was an essential ingredient for the manufacture of paint and "incident or necessary to the business as conducted" by plaintiff, it was included in the property insured as described in the policy, and its use did not avoid the policy notwithstanding a printed portion thereof so provided; whether its use was in fact incident or necessary to plaintiff's business was, under the evidence, for the jury to determine. In this connection it was impliedly held by the court that, if the use of naphtha was incident and necessary to the business as conducted by the plaintiff, the insurer was conclusively presumed to have known of such use and to have assented thereto, and that it was not necessary therefore for plaintiff to have shown actual knowledge on the part of defendant's officers or agents as the basis of a waiver. This holding relator contends is in conflict with the ruling in Kenefick-Hammond Co. v. Fire Ins. Society, 205 Mo. 294, 103 S. W. 957.

In support of the holding just referred to the Court of Appeals cited Archer v. Ins. Co., 43 Mo. 434. In that case the policy covered "a wagon-maker's shop and materials used in manufacturing wagons," and it contained a provision that the insurer would not be liable for damages occasioned by "explosions caused by gunpowder, gas, or explosive: substances." The upper story of the building insured was used as a paintshop, where were kept paints, oils, and other materials for Painting wagons, and among the material was about half a barrel of benzine used in mixing paints, and which was proved to be of a very inflammable nature. The fire broke out La the paintshop, and in that part of it where the benzine was kept. Defendant denied that it had any notice that a paintshop was kept in the building, or that benzine was kept there, and contended that the keeping of the paintshop and benzine in the building violated the policy. It was shown in the evidence that a paintshop was a common part of a wagon-maker's shop; that paints were used as materials for manufacturing wagons, and were customarily kept in the building for that purpose, and that benzine had been used for several years as a material for mixing paint. The evidence was objected to, but admitted. The question for determination was stated an follows:

"The paints and benzine, disconnected and by themselves, would belong to the class designated as extrahazardous, and therefore excluded from the terms of the policy. But as it was proved that they were materials usual and customary in the manufacture of wagons, and generally kept in the same shop where wagons were made, the question is, Were they not included and covered by its terms?"

In answering this question, Judge Wagner in delivering the opinion of the court said:

"The testimony introduced in this case was plainly admissible. Among the articles...