American National Fire Insurance v. Lapidus

Moser, J., by special assignment, delivered the opinion of the Court. Separate suits were filed in the Superior Court of Baltimore City by Samuel Lapidus, the appellee, against the In ³⁹¹ surance Company of North America and American National Fire Insurance Company, appellants, to recover amounts which were alleged to be due under separate policies of fire insurance issued by each Company. The cases were consolidated at nisi prius in the Superior Court of Baltimore City. The trial resulted in judgments for the appellee in the amount of $500.00 against the Insurance Company of North America and $300.00 against American National Fire Insurance Company.

This appeal involves the construction of the policies of insurance, with special emphasis upon alleged forfeiture of the appellee’s right to recover because of an alleged prohibited use of the insured premises. The appellee, Samuel Lapidus, is the owner of property known as No. 1029 North Eutaw Street, in the City of Baltimore, said property being improved by a three-story brick building which fronts on Eutaw Street and a two-story brick building at the rear of the lot which fronts on an alley known as Jordan Street. The buildings are detached. On January 6, 1955, at which time the insurance policies were in effect, the two-story building was damaged by fire.

The fire insurance policy carried by the Insurance Company of North America was in the amount of $5,000.00, and the policy of the American National Fire Insurance Company was in the amount of $3,000.00. Both policies contained an identical clause providing as follows: “The insured may apply up to ten per cent (10%) of the amount specified for Item I to cover all private structures appertaining to the described premises and located thereon, but not structures used for mercantile, manufacturing or farming purposes.” The Item I referred to in the aforegoing clause related to the coverage of $5,000.00 and $3,000.00 hereinbefore recited. The fire damage was in the amount of $2821.00. Pursuant ³⁹² to the aforegoing clauses of said policies, the appellee made demand upon the appellants for payment of the damages.

Liability was denied and is contested here on the ground that at the time of the fire the outbuilding, which at one time was a carriage house, was used for mercantile purposes and thereby within the use prohibition contained in the policies. At the time of the fire the garage had been rented by Lapidus to Joseph Johnson. The tenant stored a truck in the garage and it was for^this use that the garage had been rented to him.. Incidental to Johnson’s outside operations with the truck, he occasionally acquired scrap lumber, furniture and other, odd articles.

These he would either have on his truck when he brought it in, or leave in the garage until he could dispose of them on the outside. Under examination by counsel for the appellants, Johnson testified as follows: “Q. Did people in the neighborhood ever come down to you and buy wood which they would carry on home or ask you to deliver it to them? A. Well, I mean I was only there sometimes, when I was unloading the wood there; when I was unloading or loading up wood. Q. When you were taking wood off the truck to put in the building or taking it out of the building to put on the truck people would come down and buy wood from you then?

A. Might ask me about a load then, a basket of wood while I was loading the thing.” Cross-examined by appellee’s attorney, Johnson testified: “Q. You sold the wood from the truck, is that right? A. Yes, I peddle wood right on the truck. Q. And this business of having wood was just an occasional happening? You didn’t do that regularly?

It was just once in a while you had some wood, isn’t that right ? A. I mean I didn’t have the wood in there regular, but I mean I sold wood sometimes. ³⁹³ 0- Whenever you had it? A. Yes. Q. And you only had it occasionally?

(The Court) Where do you get the wood? (The Witness) I clean out cellars and yards. (The Court) Where did you get the wood that you sold? (The Witness) Sometimes I clean out cellars and things and get it, and sometimes I get it wherever I was working at.

Q. (by appellee’s attorney). It would just be scrap wood wherever you would be working. You do hauling.

Hauling is your regular business, isn’t it? A. Hauling and moving.” The trial court held that a fair interpretation of the facts did not warrant a forfeiture under the mercantile use clause of the