U.S. Fire & Marine Ins. Co. of Baltimore v. Kimberly

• Decision Date: 24 February 1871
• Citation: 34 Md. 224
• Parties: THE UNITED STATES FIRE AND MARINE INSURANCE COMPANY, of Baltimore, v. WILLIAM H. KIMBERLY and EDWARD KIMBERLY.
• Court: Maryland Court of Appeals

34 Md. 224

THE UNITED STATES FIRE AND MARINE INSURANCE COMPANY, of Baltimore, v. WILLIAM H. KIMBERLY and EDWARD KIMBERLY.

Court of Appeals of Maryland

February 24, 1871

APPEAL from the Superior Court of Baltimore City.

This was an action brought by the appellees to recover upon a policy of insurance issued by the appellant. The facts of the case are sufficiently set out in the opinion of the Court. The verdict and judgment were for the plaintiffs and the defendant appealed.

The cause was argued before BRENT, MAULSBY, MILLER, ALVEY and ROBINSON, J.

I Nevett Steele, for the appellant.

If the following language in the written portion of the policy, viz " on a four-story warehouse. First floor occupied by machinery used for making barrels, with privilege of storing barrels on the premises," &c constitutes an agreement between the parties, not looking merely to the inception of the policy, but continuing during the period which the insurance covers, it would seem to be clear that the establishment of a box manufactory, with its saws and carpenter's bench on the second floor, and the manufacture of large quantities of boxes and brush blocks was a clear and substantial violation of the contract. The first question, then, which the case presents is, what is the true meaning of this clause in the policy. This Court has recently decided, in the case of the Washington Ins. Co. vs. Kelly, 32 Md., 421, that a policy of insurance is not in its construction to be taken most strongly against the insurer, but is to be construed, like other contracts, with a view to the ascertainment of the true meaning and intention of the parties.

Could it have been the intention of the parties here, that this clause should be regarded as mere description, and that the insured should be at liberty, the moment after the policy was signed, to introduce machinery on all the floors of the warehouse, for any manufacturing purposes he might think proper? The mode and the extent in and to which the warehouse should be occupied by machinery for such purposes, were material to the risk, and therefore the representation on that subject was a continuing representation, which by its incorporation in the policy became a warranty. Mead vs. Ins. Co., 3 Selden, 530; Lee vs. Ins. Co., 3 Gray, 583; Wood vs. Hartford Ins. Co., 13 Conn., 533-544; Stetson vs. Mass. Ins. Co., 4 Mass., 337; Jennings vs. Chenango Mutual Ins. Co., 2 Denio, 75; Murdock vs. Chenango Mutual Ins. Co., 2 Comstock, 210; 1 Phillips on Ins., sec. 866; Sillem vs. Thornton, 3 Ell. & Black., 868, in 77 E. C. L. Rep.

If the manufacture of boxes falls within the trade or business of a carpenter, as was held by the Court below, and the written clause of the policy is to be construed in connection with the printed stipulation in reference to that trade, the question then presents itself, what is the true construction of the words "appropriated or used," as found in that stipulation? If machinery, &c., were placed on the second floor for making boxes, and used for that purpose from time to time, as suited the convenience of the manufacturer, then there was an appropriation of part of the building for the purpose of such manufacture; and so long as the machinery, &c., remained there, with the intention on the part of the manufacturer so to use it from time to time, such appropriation of the building continued. It would be a very narrow construction to hold that the machinery must be in actual use at the moment of the fire, in order to give the insurer the benefit of this stipulation. Such a construction, instead of giving meaning to all the words used by the parties, would throw out the word "appropriated," and give effect only to the word ""used." If the use of the machinery had been finally and permanently abandoned, a different case would have been presented, but the proposition involved in the prayers of the appellant presents the case, not of such an abandonment, but of machinery set up and kept up, and used and to be used from time to time, as the ordinary course of business in that manufacture required.

It will not be questioned that the insured is responsible for the acts of his tenant in this matter. Howell's Ex'rs vs. Balt. Eq. So., 16 Md., 386, 387; Clarke vs. Man. Ins. Co., 2 Wood. & Min., 472, 489, 494.

Henry E. Kennard and S. Teackle Wallis, for the appellees.

Even if the written clause in the policy had stood disconnected from the printed provisions above, it would have imported no warranty that the premises should not be put, during the running of the insurance, to any other uses than those indicated by its language. If the proposition of the appellants' counsel to the contrary were true, then there was an obligation on the appellees not only not to apply the premises to other purposes, but not to abandon their use for the named purposes. The failure to continue the warranted uses, would have been as much a breach of the warranty as the substitution of other and different uses, even although such cessation had greatly diminished instead of increasing the risk.

The clause in question is really nothing more than a description of the existing employment of the premises, coupled with a permission, as to their future use in the way of storage. So far as the permission is concerned, that of course imports no warranty, as this Court has expressly decided. Md. Fire Ins. Co. vs. Whiteford, 31 Md., 221.

So far as the description goes, it imposed no obligation but that of truthfulness and good faith. It was a statement of the then character and occupation of the premises, as required by the printed conditions of the policy, and there is no pretence that it was not a true statement. New England Fire & M. Ins. Co. vs. Wetmore, 32 Ill., 221, 243, 245; Smith vs. Merch. & Traders' Ins. Co., 32 N. Y., 402; O'Neill vs. Buffalo Fire Ins. Co., 3 Comst., 124; Blood vs. How. F. Ins. Co., 12 Cush., 472; Cattin vs. Springfield F. Ins. Co., 1 Sumn., 442; Lounsbury vs. Protective Ins. Co., 8 Conn., 467; Pim vs. Reid, 46 E. C. L., 1; Budd vs. Fairmaner, 21 E. C. L., 218; Leggett vs. Ætna Ins. Co., 10 Richardson (Law,) 202; Smith vs. Merchants' Ins. Co., 29 Howard, (N. Y.,) 384; Lycoming Ins. Co. vs. Mitchell, 48 Pa., 372; Stokes vs. Cox, 1 Hurls. & Nor., 320, 533.

But the written clause does not stand alone. It is to be read with and interpreted by the printed clause in regard to increase of risk, which follows it in the body of the policy, and even if it were a warranty, its meaning and effect would be governed and limited by that clause. The printed clause enumerates certain employments and uses of the most hazardous character, and then provides that if the premises shall be diverted to any such, during the running of the policy, and without the consent of the underwriters, the policy shall cease and be of no effect, "so long as the said premises shall be wholly or in part appropriated or used for any or either of the purposes aforesaid." Budd vs. Fairmaner, 21 Eng. C. L., 218; Blood vs. How. Fire Ins. Co., 12 Cush., 472; Stokes vs. Cox, 1 Hurls. & Nor., 320, 533.

Apart from this clause, the effect of diverting the premises to any of the more hazardous uses enumerated, would have been to deprive the insured of the right to recover, only in case the loss was produced in whole or in part by such dedication. Jolly vs. Equitable Ins. Co., 1 H. & G., 295; Allen vs. Mutual Ins. Co. 2 Md., 128; Washington Fire Ins. Co. vs. Davidson, &c., 30 Md., 102.

Under the clause, the underwriters were released by the mere application of the premises to the more hazardous uses, without regard to the non-connection of the latter with the loss, provided the loss should occur during such application. The underwriters thus relieved themselves from the necessity of proving that the increased risk contributed to the loss, if they could show that the fire happened pending such risk. This was what they gained by the introduction of the printed clause, and nothing more.

The policy is to be taken altogether, and it imports that if the premises should be used for or appropriated to any more hazardous employment than that described in writing, and a loss should happen, pending such employment, the insured could not recover at all, if the employment was one of those excepted, and if it was not, they could not recover, unless the occupation contributed to the loss. The right to increase the risk was given, subject only to the penalty of having the policy suspended meanwhile.

Use and appropriation, in the printed clause referred to, mean actual present use or appropriation--such as expose the premises to the increased risk provided against. The clause looks to and allows a more hazardous use with a suspension of the policy pending such use. It does not contemplate a forfeiture. When the use ceases actually, so that the risk ceases, the suspension of the insurance ceases and the assured recovers his rights under the policy. Md. Ins. Co. vs. Whiteford, 31 Md., 228.

BRENT J., delivered the opinion of the Court.

This action is brought upon a policy of insurance, issued on the 28th of March, 1867, by the United States Fire and Marine Insurance Company of Baltimore, to Kimberly Bros., by which the company agreed to insure them against loss and damage, to the amount of eight thousand dollars, " on the four-story brick warehouse, situate on Wide Water street near Church...