Planters' Mutual Insurance v. Engle

Robinson, J., delivered the opinion of the Court. This is an action on a policy insuring “ the stock in trade ” of the appellees against loss by fire. The main question is, whether certain fertilizers delivered to the appellee sfor sale on commission, are covered by the policy ? We understand it to be conceded that a consignee of goods delivered to be sold on commission, has an insurable interest in such goods.

Thus far the law is well settled. Whether it is necessary for the insured to set forth in the application or policy the nature and extent of the interest, for the protection of which the insurance is intended, is a question about which there is some conflict of opinion. The Supreme Court, in the Columbia Ins. Co. vs. Lawrence, 2 Peters, 25 , held that it was, for the reason, among others, that insurances against fire are made in the confidence that the insured will use all the precautions to avoid loss which his own interest would suggest, and that the extent of this interest must always influence the underwriters in taking or rejecting the risk and estimating the amount of premium.

These views have been recognized and adopted in several States. The current of decisions, however, seem to be the other way, and to hold that it is sufficient if the subject-matter of the insurance, and the nature of the risk, are set forth in ⁴⁷⁹ the policy, without stating the extent of the interest of the insured in the property, unless so required by the conditions of the policy, or where the failure to state it would operate as a fraud. Niblo vs. The North American Ins. Co., 1 Sand., 551; Tyler vs. Ætna Ins.

Co., 12 Wend., 507 ; Locke vs. North American Ins. Co., 13 Mass., 61 ; 1 Caines, 276 ; 1 Johns., 276 ; Phillips on Ins., 41, 64, 94; 2 American Leading Cases, 930 . It is unnecessary, however, to decide this question here, because, conceding that the plaintiffs were not obliged to state the nature and extent of the interest to be insured, we are of opinion that they did not intend to insure the goods held hy them for sale on commission. As a general rule, an insurance on u the stock in trade ” of a merchant means such goods as he may from time to time buy in the ordinary course of business.

But it is argued that inasmuch as the plaintiffs were forwarding and commission merchants, a policy issued to them on stock in trade must he construed as embracing not only goods bought and sold by them, hut also goods delivered for sale on commission. This may or may not be so, according to the intentions of the parties. Now in this case, the plaintiffs in their application, which is made part of the policy, propose to insure “ our property which we describe as follows: No 1. Three thousand dollars on stock in trade, consisting of grain, guano and salt in forwarding house.” Here is an application to insure our property, our stock in trade, and the record shows they bought and sold grain, guano and salt on their own account, and that they also sold fertilizers on commission.

If they had been engaged in carrying on a commission business simply, then it might well be contended that the policy covered goods for sale on commission, because in that event they could have liad no other goods on hand constituting “ stock in trade,” to be protected by the insurance. So looking to the face of the policy and the nature of the business in which the plaintiffs were engaged, it is ⁴⁸⁰ doubtful, to say the least, whether they intended to insure goods held by them on commission, and for the loss of which they were not responsible. But the doubt, if any there be, is entirely removed by the letter written by the plaintiffs to the Insurance Company after the loss, in which, after stating that the owners of the fertilizers insist that their fertilizers are covered by the policy, the plaintiffs say uwe do not think so.” Here, then, is written admission by the plaintiffs after the loss, that they did not intend to insure the fertilizers held by them for sale on commission, and now, in the face of this admission, they ask a Court to say, that they did mean to insure such fertilizers. It is hardly necessary to say, the plaintiffs could not take out a policy to insure their own property, and then appropriate it to the use of somebody else as an after thought.

If the intention did not exist when the policy was issued, it could not subsequently be imported into the contract. Steele vs. Franklin Insurance Co., 5 Harris, 290; Newsom vs. Douglass, 7 Harris & Johnson, 451; Augusta Ins. Co. vs. Abbott, 12 Md., 348 ; Watson vs. Swann, 11 C. B. N. S., 755; Fleming vs. The Marine