Langdon v. New-York Equitable Insurance — 1 N.Y. Super. Ct. 226

Majority

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Israel C. Langdon versus The New-York Equitable Insurance Company.

Oct. Term, 1828.

Headnote

The keeping of oil and spirituous liquors by a grocer in his store for the “ purposes of ordinary retail," “ and in quantities not unusually large,” is not a “ storing” of them, within the meaning of that clause of the policies of insurance against fire, commonly used in the city of New-York, which prohibits, the appropriation of the building insured, for the purpose of “ storing therein,” any goods denominated hazardous or extra-hazardous, in the memorandum of special rates annexed to the policies.

This was an action of assumpsit, upon a policy of insurance against fire, for five years, executed by the defendants in favour of the plaintiff, to the amount of $2000, upon “ a three .story brick building, with a slate roof, situated on the corner of Hudson and King streets,” in the city of New-York, as described in a certain report, filed in the office of the defendants.

The report here referred to was a survey made by the agent of the defendants, at their request and by their direction, wherein the building in question was described as unfinished at the date of the survey; but as one which was to be completed, with a cellar and cellar kitchen ; the first story to have one room with a fire place, “ the store, entry, and stairs.”

This survey was produced at the trial by the defendants, upon the requisition qf the plaintiff, and made part of the evidence in the cause, but the plaintiff bad no knowledge thereof at the time it was made and filed in the office of the defendants.

The policy (like other fire policies in the city of New-York) Contained.the following clause, to wit: “'And it is agreed and de- “ dared to be the true intent and meaning of the parties hereto, “ that in case th& above mentioned building shall, at any time af- “ ter the making, and during the time this policy would otherwise “ continue in force, be appropriated, applied of used to or for the “ purpose of carrying on, or exercising therein, any trade, busi- “ ness, or vocation denominated hazardous or extra-hazardous, or

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“ specified in the memorandum of special rates, in the proposals “ annexed to this policy, or for the purpose of storing therein any “ of the articles, goods, or merchandise, in the same proposals de- “ nominated hazardous, or extra-hazardous, or included in the “ memorandum of special rates, unless herein otherwise specially “ provided for, or hereafter agreed by this corporation in writing, “ to be added to, or endorsed upon this policy, then and from “ thenceforth," so long as the same shall be so appropriated, ap- “ plied or used, these presents shall cease, and be of no force or “ effect.” *

In the proposals annexed to the policy, oil and.spirituous liquors are classed among the goods denominated hazardous; but the business of a grocer is not included among the hazardous or extra hazardous occupations; while that of a tavern keeper is enumerated among the former.

The cause was tried before Mr. Justice Hoffman.

At the trial, the plaintiff proved that the building insured was worth $3000, and that it was destroyed by fire on the morning of the first of November, 1827. The fire originated at some distance from the premises in question, in a yard fronting on Hamersleystreet, whence it extended to a carpenter’s shop in the neighbourhood, and from thence along the' adjoining fences to a wooden building in Hudson-street, four lots distant from the building insured, and from thence along the intermediate buildings to the house in question. The witnesses for the plaintiff also testified, that the situation of the house, at the intersection of two streets, and the manner in which a part of it teas built, indicated that it was intended for a “ grocery store” at the time it was erected.

The defendants proved, that at the time when the house was consumed, and for some time anterior thereto, the store on the first floor of the building, and the cellar under the same, were occupied by one Archer, as a “ family retail grocery;” and that at the time of the fire, he had on hand, in the store and cellar, “ some molasses, some potatoes, one cask of oil, one barrel of rum, one cask of Jamaica spirits, and one pipe of gin.” The oil was in the cellar, and in its original cask; but from the other casks, more or less of the liquors had been drawn out for the use of the store;

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and all the liquors in the store had been taken from these casks. These goods were purchased and kept for the purpose of being gold in small quantities by retail. Archer usually kept all kinds of spirituous liquors, and used the cellar for the purpose of put-a palj 0f pjg goods'thei'ein; but such only as were intended to be retailed in the store, which was replenished, as occasion required, from the stock in the cellar. At the time of the fire, the goods in the store were saved; but those in the cellar were consumed.

The counsel for the defendants then offered to prove, that it is, and ever has been, the uniform custom among underwriters on policies against fire in the city of New-York, in all cases of insurance upon grocery stores, whore it is the, intention of the insured to keep spirituous liquors therein, for sale by retail, to state such privilege, either by inserting it in the body "of the policy, or by endorsement thereon, or by some other memorandum in writing. But this testimony was excluded by the presiding judge, and the counsel for the defendant excepted to his opinion.

Upon this state of facts, the counsel for the defendants contended, that the plaintiff was not entitled to recover; and prayed that the jury might be charged, that keeping a “ grocery store” in the said building, and the keeping of oil and spirituous liquors therein for the purpose of retail, in the manner herein before mentioned, was a “ storing” of the same, within the meaning of the policy, and a violation of the contract on the part of the plaintiffs, which precluded a recovery.

This instruction the presiding judge refused to give, but charged the jury that- the plaintiff was entitled to recover to the extent of the loss proved; and the jury thereupon returned a verdict for $2000 in favour of the plaintiff. .

The counsel for the defendants having objected to this opinion, now moved for a new trial, upon the ground of a misdirection.,

Mr. C. C. King, for the defendants, made the following points":

I. That the keeping of spirituous liquors and oil in the “ store and cellar” of the building, for the purposes of sale in the manner stated in the testimony, was a “ storing” therein within the

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intent and meaning of the policy; and that as the building was used for such purposes at the time of the fire, the policy was void.

II. The testimony as to the usage, offered at the trial, was admissible, for the purpose of showing the real meaning of the term, “ storing,” as used in the policy.

Every express stipulation or condition contained in the policy, must be strictly performed, whatever may be the motive of its insertion, or whether material to the risk or not. [1 Condy’s Mar. 348. Phil. on In. 124, 125. Park, on In. ch. 18. [Lon. ed.) 318, 319, 20. 3 Kent’s Com. 235. and the authorities there.] If the warranty be not complied with, although for the best reasons, the policy has no effect. [Park, 320. Marsh. 349. Phil. 127, 128.]

This is the rule relative to marine policies, and there is no difference in this respect between marine and fire policies. [Fowler v. The Ætna In. Co. 6 Cow. Rep. 673 . 3 Dow. 262. 4 Mass. R. 330 .] The rate of insurance shows, that no hazardous risk was contemplated, and there is nothing in the policy itself which waives the conditions. The survey says, that the -first story is to have one room with a fire-place,' “ the store, entry, and stairs.” This was all the written evidence offered at the trial, and it cannot be pretended, that it is “specially provided in writing,” by this survey, that the building might be used for the storing of hazardous articles therein. The term “store,” used in the survey, does not imply a permission to use the building for any purpose not warranted by the policy: because the implication (if admissible at all) must be such a necessary implication as to amount to a special provision in writing. To reach this, the words must, ex vi termini, mean a store in which hazardous and extra-hazardous goods may be kept. But this is by no means a necessart'y implication arising from the expressions of the survey. Neither does the situation of the building at the intersection of two streets indicate, as a necessary consequence, that it was to be used for a grocery. There was no proof that it was to be appropriated to this purpose, and yet the court are called upon to infer a fact, andfrom that, a privilege, which cannot exist except by express permission in writing. That oil and spirits were in the building at the time

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of the fire, is fully proved, and the question is, whether they were stored, there in such manner as to violate the contract, and avoid the policy_

^le common acceptance of the terms, the keeping of goods in a place for sale or preservation, is a storing. In this sense of the word, the policy was undoubtedly .violated; and if a storing be proved, then, by the rules of construction, applicable to the express stipulations in the policy, the court must intend that it is a storing within the meaning of the contract, unless the contrary clearly appear. x

The quantity of goods in the store, or the mode of sale, cannot affect the question; because, if the policy be construed by this rule, it may include one grocer, and exclude another, which is manifestly incorrect. The roles of construction must be uniform and consistent, and if the business of a grocer necessarily implies that hazardous goods may be kept by him for sale within the building insured, then the extent to which that business may be carried on, cannot be the criterion by which to establish the meaning of the words used.

But if there were a doubt upon this point, then the testimony of the witness was admissible, not to prove the contract, but the acceptation of the term “ storing,” among those who are most interested in the question. We are seeking after the meaning of a peculiar term used in the policy, and if that be doubtful, the manner in which it is received by uniform custom—by the usage— may be proved by parol. [Beau. v. Stupont, Doug. 1 l.]

Mr. J. Anthon and Mr. Slosson, for the plaintiff.

There are noadjudicated cases bearing upon the point now before the court, and the only way in which the question can be solved, is by a critical examination of the policy itself It is said, that the construction to be given to this contract must be strict. If by strict, an interpretation is meant, derived from the words of the agreement itself, we admit that the construction must be strict, and we claim that, from the very terms of the policy, the property of the assured Was fully protected.

In the first place, the articles usually kept in a grocery store, are not to he found among those denominated hazardous or extra-

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hazardous, in the “ proposals for insuring” attached to the policy. And were it not for the proviso in the agreement itself, the assured would have a perfect right to keep a “ store” of any kind in the building insured.

This proviso is to be divided into two parts: the first has reference to the business to be carried on, and the second .to the articles which may be stored.

With regard to the first, the plaintiff has an undoubted right to cany on any business in the building, which is not prohibited by the policy. Now, the business of a grocer is not prohibited by the policy, nor is it classed among the “ trades” or occupations denominated hazardous or extra-hazardous by the proposals. If, then, the assured may carry on the business of a grocer, without any objection derived from the contract itself, he may undoubtedly carry it on to its fullest extent. Any fraudulent evasion of the policy, by the storing of an unusual quantity of spirituous liquors, not necessary for the business carried on, might perhaps be fatal to the contract. But here there are certain trades and occupations (ship chandlers, tavern keepers, tobacco manufacturers, &c.) excepted by the terms of the contract; and the exceptions prove that the agreement covers every occupation not expressly prohibited.

Besides this, the insurers knew from the report of their own agent, that a part of this building was to be occupied as a grocery, and they knew it also, from the nature and situation of the premises insured. There is no surprise in the case, no deception, no fraud,; and there is no pretence that any real injury has actually occurred to- the defendants from the use to which this building was appropriated. Can this defence, then, be sustained upon the grounds assumed by the defendants 1 and will the assured be allowed to shield themselves from the obligations of their contract by a forced construction of their own words'?

ll But what is the real meaning of the words, and what construction is to he put upon the term storing, as used in the policy 1 In its correct acceptation, the word means, the repositing of specific articles in a warehouse for preservation and redelivery in

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specie; and there can be no good reason why any" other'meaning should be attached to it, in construing a policy of insurance. There is a broad distinction between goods reposited on storage, and those kept for the purpose of being sold by retail: and the „ , . .... T. . , , . reason for the distinction is obvious. If a warehouse used tor the purposes of storing, contain a large quantity of spirituous liquors and oil, these very articles, if once set on fire, would cause the conflagration of the premises insured, and every thing connected with them. But the accidental burning of such small quantities of spirituous liquors as are usually kept by a grocer, would hardly produce this result, and'was never contemplated by the parties. If the construction contended for by the defendants be correct, if the quantity of the articles prohibited, and the purpose for which they are kept,, have no bearing upon the meaning of the word, as used in the policy, what private dwelling which contains a cask of . brandy, can be considered as safe within the terms of this agreement % If the keeping of spirituous liquors and oil in a grocery for the purposes of ordinary retail, can be considered as a storing within the meaning of the policy, the same meaning must be extended to the keeping of the same articles in a private dwelling for the purposes of ordinary consumption. Such a construction of the contract never entered into the contemplation of the parties, is not warranted by a fair interpretation of the words used, and. would work special injustice to those who have paid their money upon the faith of the indemnity held out by the contract.

Mr. David B. Ogden, in reply.

We abandon the second point presénted for argument on the part of the defendants, believing that the court will, in all proba- . bility, be against us as to that. But upon the first point, we confidently rely. If the insurers are protected by the laws of the land, they are to be considered as justly protected; and no argument drawn from the adventitious circumstances of any particular case, can weigh with the court in expounding the terms of a written agreement.,

• The defendants are not bound beyond their owii express contract, as contained in the policy ; and the whole question in the

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case is confined to the construction to be put upon the word “ storing,” as used by the parties. What are the facts of the case 1 The plaintiff has effected insurance upon a “ three story brick building” situated at the intersection of two certain streets. TT . He appropriates a part of the building insured as a grocery store. In the cellar of this building he deposits a quantity of spirituous liquors and oil, and carries them from their place of deposit into his store for sale. Is not this “ using or appropriating” the building insured “ for the purpose of storing therein articles denominated hazardous in the proposals,” attached to the policy 1 The goods are stored in the cellar, and carried from thence to the shop, from time to time, for the purposes of sale, as occasion may require. This is an obvious violation of the very words of the contract, and the court cannot restrict the meaning of the terms by any inquiries as to the quantity of goods thus stored in each particular case. The construction to be given to the words is matter of law, and that construction must be uniform and consistent, else the meaning of the terms used may vary with different cases, and be wholly uncertain and indefinite. If the construction depends upon the quantity of goods reported, or the purposes for which they are kept, then what is the quantity, and what are the purposes,, which may amount to a storing within the meaning of the policy 1 By the rule contended for, the present plaintiff may recover, while another grocer, more extensively engaged in the business of his vocation, may be totally unprotected. Such an interpretation of the word is altogether too loose and vague to be adopted by any court in fixing a legal meaning upon the terms of a written contract. But it is said, that the construction contended for by the defendants may vitiate a policy upon the residence of a private individual. If this were to be the consequence, it cannot vary the' matter; for no private individual has a right to increase the risk of the underwriter, by storing spirituous liquors in his dwelling house. But there is an obvious distinction between the case of a grocer and that of a private individual, The former keeps his goods for the purposes of sale, whereby the risk is greatly enhanced, while the latter keeps a mere private stock for his own use.

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We are told however, that the defendants knew that a part of this building was to be used as a grocery, at the time they made insurance. There is no proof of this. But if the fact were so> does it follow, because a building is to be used as a grocery, that spirituous liquors are to be stored therein by the permission of the underwriters 1 They may perhaps allow the grocer to keep such articles as enhance not the risk; but they give him no permission to keep hazardous articles by reason of his occupation. But there is no authority given, by any express words, for the keeping of a grocery even: the power is derived from implication, and you cannot, by implication, extend the obligation of the insurers beyond the terms of their agreement. This would be unjust, as well as illegal, for they may be compelled by this means to assume a risk they never contemplated, without any adequate premium.

after stating the facts of the case.

The principal question arising on the bill of exceptions taken at the trial, is, whether the above state of facts suspended the policy, so that it did not cover the building at the time of the fire, by virtue of the clause contained in it, which provides, in case the building insured should at any time, during the continuance of the policy, be used for the purpose of carrying on any trade, business, or vocation denominated hazardous or extra-hazardous, as specified in the memorandum of special rates in the proposals annexed to the policy, “ or for the purpose of storing therein any of “ the articles, goods, or merchandise, in the same proposals deno- “ minated hazardous or extra-hazardous, unless specially pravid ed for in the policy, or subsequently agreed to by the defendants “ in writing; that then, so long as the same building should be so appropriated, applied, or used, the said policy should cease, “ and be of no force or effect.” In the proposals annexed to the policy, oil and spirituous liquors are denominated hazardous articles.

It is contended, on the part of the plaintiffs, 1st. That the building being used as a “ store,” and the business of keeping a grocery store not being denominated hazardous, and therefore not pro

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hibited by the policy, the plaintiff had a right to carry on that • • business, and to keep all such articles as are usually kept in such stores.

2. That if not, the keeping of the liquors and the oil, under the circumstances, was not á storing, within the meaning of the contract.

Where the insurance is general on the building, or where a store in general terms is insured, the true construction of the policy undoubtedly is, that all kinds of business may be carried on, and all kinds of goods or merchandise kept in the building, except such as are expressly prohibited. Any other construction would render all the restrictions in the policy inoperative and void. Some efficacy must unquestionably be given to the clause which prohibits the storing of hazardous articles, rvithout the written consent of the defendants. If the right of storing such articles foEowed as appurtenant to the general business of a grocer, it would equally follow as appurtenant to that of a commission merchant. His business, as such, would not be prohibited by a policy like the present ; and yet it might consist entirely in storing the hazardous or extra-hazardous articles enumerated in the policy.

Thus it will be seen, that upon the construction contended for by the plaintiff, a case can scarcely be imagined in which the prohibition in the policy, against the storing of such articles, could be applied. The true meaning of the contract seems to me to be very clear and simple. The plaintiff is authorized to keep any store in the building insured, provided in doing so he does not use any part of it for the purpose of storing certain articles of merchandise, which are denominated hazardous or extra-hazardous in the policy itself.

The only question then is, whether the keeping of the casks of oil and spirituous liquors in the cellar of the building, in the manner in which they were kept, is a violation of the prohibition in the policy.

In the present case it appears, that the oil and liquors in question were purchased by the grocer, and deposited in his ceEar. The cask of oil was unbroken, but the casks of liquors were partly drawn out. These casks were deposited in the cellar for the pur

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pose of replenishing his store from time to time, as occasion might require. They constituted then a part of his ordinary stock in trade as a retail grocer, and I am of opinion, that the keeping of them under the circumstances, and for the purposes of ordinary retail, and not in universal quantities, is not a storing of them, within the meaning of the clause in the policy under consideration.

It is difficult, perhaps, to affix any precise meaning to the word storing, as used in the policy. Its import is in a degree vague and uncertain. Without undertaking here to define it, it is sufficient to say, that it does not, in my judgment, reach a case like the present,

Judgment for the plaintiffs.

[E. Anthon, Att'y for plff. C. C. King, Att'y for defts.]

Jfote.—One of the principal points of defence relied upon by the underwriters, at the outset of this cause, rested on the ground, that the plaintiff had materially increased the risk, after effecting the insurance, by dividing off 20 feet of the rear of the lot upon which the building stood, at the distance of 75 feet from the house, and erecting thereon a carpenter's shop. This point was presented to the court at the trial, and insisted on as a substantial ground of defence; but the judge charged the jury, that if they considered the risk to be enhanced by the erection of the carpenter’s shop, they would find a verdict for the defendants. The jury found, however, that the risk was not thereby increased, and the defendants, therefore, did not make this a point of defence upon the argument at bar.

The defendants also offered to prove by pa.ro!, that it is the custom among underwriters, whenever they insure a grocery, to exact a higher premium than for an ordinary building. But upon the question being objected to, it was withdrawn ; the presiding judge intimated, however, that the inquiry was improper.

The counsel for the plaintiff in the course of the trial, upon the examination of the surveyor of the defendants, asked him, “ whether the plaintiff did not inform him, at the time the survey was made, that the store in the building was intended for a grocery ?” This question being objected to was overruled by the judge, and an exception taken to his opinion by the counsel for the plaintiff But this exception was not afterwards brought forward, or in any way agitated upon the argument before the whole court.

This cause Was subsequently carried into the Supreme Court by writ of error, where the judgment of this court was affirmed.