Cady v. Imperial Ins. Co.

4 F. Cas. 984, 4 Cliff. 203

• Court: U.S. Circuit Court for the District of Rhode Island
• Decided: June 15, 1873
• Status: Published

Opinion

CLIFFORD, Circuit Justice.

Insurance against fire is a contract to indemnify the insured for loss or daipage, occasioned by that agency, to such of the property of the insured as is described in the policy, during the period therein specified. Fland. Ins. 17; Ang. Ins. § 45. Policies of insurance, like all other written contracts, are to be construed by ascertaining the intention of the parties, and in collecting that intention, the words of the policy must be understood in their plain, ordinary and popular signification, unless, in view of the subject-matter, or the usage of trade, the words have acquired a different meaning, or unless the context clearly shows that they are employed in some special and peculiar sense. Carr v. Montefiore, 5 Best & S. 408; Robertson v. French, 4 East, 135; Shore v. Wilson, 9 Clark & F. 569.

(After a review of the facts given in the foregoing statement, the court stated its findings as follows:) 1. That the forcing-pump and hydrants were in the building insured at the date of the policy, and that they were, at that time, in good working order. 2. That shortly after that, it was discovered that the forcing-pump was out of order, and the agent and superintendent took it out and sent it to the manufacturers to have it repaired, supposing that all it needed was a new cap; and it appears that the manufacturers took off the old cap and made a new one, and sent the pump back, and it was put in place; but it would not work. Subsequent attempts were made by the agent and the same superintendent to discover what the difficulty was. but without success, though the attempts were repeated a number of times. On the 1st of June the superintendent left, and a now one was appointed in his place; and it appears that he, by the direction of the agent, went immediately to work on the pump to see what it was that prevented it from operating; and the agent testifies that the new superintendent worked upon it without success, until he, the agent, got tired of having the men so employed, and towards the last of August he went and got the manufacturers to send a man to the mill for that purpose; and it appears that he came, and finally discovered that the defect consisted of a small hair-crack, so called, hardly discoverable by the eye, but which was sufficient to prevent the pump from working. He took out that section of the pipe, and cast a new one, or caused it to be done, and replaced the defective part with the new casting, and the pump was put in good working order in the first week in September. Satisfactory proof was also introduced by the plaintiff, showing that it was examined on the 1st of October following, and found to be in good working order, and again, on the 1st of November of the same year, when it was also found to be in the same condition. Testimony was also introduced, showing that the forcing-pump was examined as late as the middle of November, and the superintendent testifies to the effect that it wgs in good order. Viewed in the light of the whole evidence, the court is of the opinion, and accordingly finds, that the forcing-pump was put in good working order during the first week in September; that it was examined the 1st of October and the 1st of November following, and again about the middle of November in the same year, and found to be in good working condition; and that the evidence furnishes no reason to doubt that it remained in the same condition until the night of the 30th of the last-named month, when it was rendered inoperative by freezing. 3. That there was a sufficient supply of water-casks and buckets for each room, situated either in the room itself, or in an entry connected with and opening into the room, and so located as to be convenient and accessible for use in each room of the building. 4. That there is no evidence showing any breach of the other clauses of the stipulation.

Assume the facts to be as found by the court, and it is clear that all of the propositions submitted by the defendants in respect to the forcing-pump, except two. may be overruled without further remark. They, the defendants, still insist that the policy is void for three reasons: 1. Because the forcing-pump was out of order from the middle of March to September 1st in the same year. 2. Because it was not in good working order at the time of the fire. 3. Because the water-casks and buckets were, in some instances, located in an entry connected with the room, and not in the room itself, as they insist the terms of the policy require. Completely repaired, as the forcing-pump was, during the first week of the preceding September, no one would contend, it is presumed, if it had continued without any defect, and had been in good working condition at the fire, that the prior omission to prevent it from getting out of order would operate as a forfeiture of the indemnity secured by the policy. Such a proposition, it would seem, is too unreasonable to receive a moment’s countenance, and yet it must be adopted, or the first defence must fail, as the second defence, founded upon the fact that the forcing-pump would not operate at the time of the fire, is in every sense a distinct matter, the one having no connection whatever with the other, showing beyond controversy that each must stand or fall by itself, wholly without aid from the other, or in other words that the policy, if it was forfeited by the first omission, never after-wards became operative, and that if it was not forfeited by that omission, it continued to be operative throughout, unless it was forfeited by some new breach of the same stipulation, or some other wholly irrespective of the prior omission. Warranfics are of two kinds, affirmative and promissory; and they may arise from express words, or they may be implied. Affirmative warranties, whether express or implied, are representations, in the policy, of the existence of some fact or state of things at the time, or previous to the time, of making the policy, and they are conditions precedent, which, if untrue, the policy does not attach as the contract of the insurer. New Castle Fire Ins. Co. v. MacMorran, 3 Dow, 262; Biccard v. Shepherd, 14 Moore, P. C. 475.

Promissory warranties may also be express or implied, and they have respect to. the happening of some future event, or the performance of some future act, and they may be conditions precedent or conditions subsequent. Their character depends upon the intention of the parties, to be ascertained from the language employed, the subject-matter, and the surrounding circumstances. 1 Marsh. Ins. 346; 1 Arn. Ins. (2d Ed.) 580. Courts of justice, in some cases, and some text-writers have denied that there is any difference between an affirmative warranty and a promissory stipulation of the kind mentioned, and insists that the latter, as well as the former, must always be regarded as conditions precedent, on the literal truth or ful-filment of which the validity of the entire contract depends; but it is evident that the rule, if it be one, must have many exceptions, as otherwise the greatest injustice would be done to the insured, in view of the known fact that policies of insurance, of late years, are crowded with stipulations imposing almost innumerable conditions,, covenants and agreements, wholly unknown to such instruments until within a recent period, and which, it is to be feared, attract very little attention from the owner of the property insured, until they are put forward subsequent to the loss, to show that the losing party is not entitled to the indemnity for which the premium was paid. Borradaile v. Hunter, 5 Man. & G. 639; Alston v. Mechanics’ Mut. Ins. Co., 4 Hill, 329; Ang. Ins. § 145. Even words of warranty are subject to construction, and will receive a strict or liberal construction, tb meet the justice of the case, as where there was a warranty that a certain cotton mill was worked by day only, it was held that the warranty was not infringed, because it appeared that the engine and unconnected shafting was kept running all night, as the mill and machinery were not substantially worked. Mayall v. Mitford, 6 Adol. & E. 670; Shaw v. Robberds, Id. 75; Whitehead v. Trice, 2 Comp., M. & R. 447; Buny. Ins. 65; 1 Phil. Ins. (4th Ed.) § 872.

Beyond doubt, a warranty in respect to an existing fact is a condition precedent, and if it be not true when reasonably construed, it avoids the policy, whether it is material or immaterial, as the condition is a part of the contract which cannot be enforced unless it appears that the condition is fulfilled; but the insured, even in such a case, is only held to a substantial compliance, it being well-settled law that the condition cannot be' extended by construction, so as to include what is not necessarily implied in its terms. Turley v. North American Fire Ins. Co., 25 Wend. 374; Fland. Ins. 205. Somewhat different rules are to be applied to the execu-tory stipulations in the policy, which are sometimes denominated promissory warranties, as such stipulations are rather to be regarded as having the legal effect of representations than of warranties, as understood in the law of marine insurance, though partaking in some measure of the character of both. They are like representations, in requiring that the facts shall be true and correct, and, so far as they are executory, that they shall be substantially performed, but not like warranties, in requiring an exact and literal compliance. It is enough, therefore, if these statements, relied on as the basis of the contract, are made in good faith, and without intent to deceive; that they are substantially true and correct, as to existing circumstances, and substantially complied with, so far as they are ex-ecutory and regard the future. Houghton v. Manufacturers’ Mut. Fire Ins. Co., 8 Metc. [Mass.] 120; 1 Pars. Mar. Ins. 423; Daniels v. Hudson R. Ins. Co., 12 Cush. 416; Hall v. People’s Ins. Co., 6 Gray, 185; Columbian Ins. Co. v. Lawrence, 2 Pet [27 U. S.] 25; Ang. Ins. § 153; Gilliat v. Pawtucket Mut. Fire Ins. Co., 8 R. I. 292. Substantially the same question was presented in the case of Aurora Fire Ins. Co. v. Eddy, 49 Ill. 106, heard and determined in the supreme court of Illinois. Insurance was granted to the plaintiff in that case, upon his flax factory, and the policy contained a stipulation “that the assured is to keep eight buckets, filled with water, on the first floor where the machinery is run, and four in the basement by the reservoir, ready for use at all times in case of fire.” Payment being refused, the insured sued the company, and the verdict was for the plaintiff. Exceptions were taken by the defendants to the instructions given to the jury, and the supreme court, among other things, decided that the stipulation was not a condition precedent, that it was an agreement in the nature of a promissory warranty, and that it was to be construed like other written agreements; that it did not bind the insured to a literal performance; that a substantial compliance was all that was required; that the jury should have been told that a literal compliance could not have been in the contemplation of the parties, as it might have been impossible, from freezing or other unavoidable causes; that such a construction would be unreasonable, as it would require what, is impossible; but that it was incumbent on the insured to show that the required number of buckets were at the places designated in the agreement, ready for instant use in case of fire; and inasmuch as one of the instructions given was of a different character, the court set aside the verdict, and granted a new trial. Evidently the general views of the court in that case were the same as those expressed by the supreme court of Massachusetts in the cases previously referred to, and those cases appear to furnish the correct rule for the construction of the stipulation under consideration. Examined in view of those suggestions, and the authorities cited in their support, as the stipulation should be, the court is of the opinion that the first defence must be overruled.

Enough has already been remarked to show that the second defence cannot be sustained, as it is based upon the extreme rule that the stipulation in question is a condition precedent, and that nothing will excuse a strict performance of the same, which cannot be admitted, as it would render the policy void if the forcing-pump was rendered inoperative by lightning or flood, or even by the fire, which is the peril covered by the policy. Such a rule can never be adopted, as it would render the policy little better than a nullity. Sayles v. Northwestern Ins. Co. [Case No. 12,422]; Fland. Ins. 206; Peoria M. & F. Ins. Co. v. Lewis, 18 Ill. 553; Hide v. Bruce. 3 Doug. 213; Underhill v. Agawam Ins. Co., 6 Cush. 440. Sufficient is also remarked to show that the third defence must be overruled, as the first branch of it, which assumes that the supply of water-casks and buckets was deficient, is negatived by the finding of the court; and the second branch .of it is plainly untenable, as it contravenes the proper rule of construction to be applied to the contract. Houghton v. Manufacturers’ Mut. Fire Ins. Co., 8 Metc. [Mass.] 120; Jones Manuf’g Co. v. Manufacturers’ Ins. Co., 8 Cush. S4; Aurora Fire Ins. Co. v. Eddy, 49 Ill. 106. Viewed in any light, the court is of the opinion that the plaintiff is entitled to judgment. Damages and interest to be computed under the direction oí the court.

Judgment for the plaintiff.