Schaeffer v. Farmers' Mutual Fire Insurance

McSherry J. delivered the opinion of the Court. The appellant’s tannery, bark-mill and stock in trade, which, with other property owned by him, were insured under one and the same policy issued by the appellee, were destroyed by fire on February the twenty-seventh, 1892. ⁵⁷⁰ Due preliminary proof of loss was made, and subsequently suit was brought upon the policy to recover the amount of insurance written on that portion of the property which had been burned. During the progress of the trial in the Circuit Court for Carroll County, five exceptions were taken. The second one of these, though it appears in the reeord, was not signed by the Judge.

It cannot, therefore, be considered by us beyond its recitals of facts. These, by reason of the unsigned bill of exceptions being connected with the succeeding one, form part of the latter. Cooper v. Holmes, 71 Md. 20 . The first, third and fourth bills of exception relate to questions of evidence, and the fifth to the several prayers presented by both parties.

The verdict and judgment were against the plaintiff and he has appealed. It will obviate much unnecessary discussion if we proceed at once to an examination of .the fundamental and controlling questions involved in the controversy, instead of considering separately the several exceptions in the order in which they appear in the record. The defendant resists the claim of the plaintiff on the ground that the unauthorized use by the plaintiff of a steam engine located about fifty feet away from the bark mill, but connected with the machinery in the latter by a leather band, worked a forfeiture of the policy under the terms and conditions set forth therein and endorsed thereon. And it relies in support of this position on the recent case of The Farmers' Mut.

Fire Ins. Co. v. Hull, 77 Md. 498 . On the other hand the plaintiff insists, first, that the use of the steam engine for the purpose of grinding bark did not cause a forfeiture; and, secondly, that even if a forfeiture did occur, the defendant unequivocally waived it. It can scarcely be necessary to reaffirm what has been so often and so uniformly decided, that forfeitures by mere implication are never favored in the law.

A company which resists, on the ground of forfeiture, the payment of a loss against which it has insured, must show both that its policy or written contract contains, either in express terms or by ⁵⁷¹ clear implication, some provision forfeiting the policy in specified contingencies; and also that the insured has brought himself within the scope and conditions of that provision. The policy is a contract between the insurer and the.insured, and as they have written it, and not otherwise, so Courts must construe and enforce it. To the policy, then, and to all that forms a part of it, must resort be had to ascertain not only whether a forfeiture is .in fact provided for, but the conditions and circumstances under which it becomes applicable and effective. In the body of the policy now before us there are two' causes of forfeiture; and in the conditions of insurance thereto annexed and in the by-laws, made a part thereof by reference, there are three more.

Those first alluded to relate, the one to the taking out by the insured, without notice to’ the insurer, additional insurance on the same property in a different company; and the other, first, to alterations of the premises, and secondly, to their use for the purpose of carrying on therein any trade or business “ which, according to the by-laws and conditions, class of hazards or rates hereto annexed, would increase the hazard,” unless by the consent of the insurer endorsed upon the policy. Those set forth in the- conditions are, first, alterations made in any building which increases the risk; secondly, the omission for thirty days after demand to pay any assessment levied on the assured’s premium note ; and thirdly, the sixteenth condition, which* without qualification, prohibits the use of “ any steam engine temporarily employed for the purpose of threshing out crops of any kind.” Under the policy sued on, which was issued in February, 1887, and covered a period of seven years, the appellant’s dwelling-house, household furniture, tenant-house, wagon-shed, barn, hay-shed, and other farm buildings and farming implements, together with his tan-shop, bark-shed, bark-mill house, stock in trade, consisting of bark, hides, leather, finished and unfinished, were all insured. The engine used on the premises the day of the fire was not located at the ⁵⁷² barn or employed for the purpose of threshing out crops of any kind, but was stationed between fifty and sixty feet away from the bark-mill house and was, and for more than a year and a-half previously had been used once a month to furnish the motive power for grinding bark for the plaintiff’s tannery. On the day of the fire the engine was in use for grinding bark, and whilst the employes were at dinner and the engine was not running and its fires were banked, a fire broke out in the bark-mill house and consumed the tannery buildings and stock in trade.

When first discovered the fire was within the building, whose sides towards the engine were tightly weatherboarded and stripped. Earlier on the same day a slight fire. broke out about the same spot, but was promptly extinguished. There was evidence tending to show that the first fire was produced by the friction of the machinery, but there is no evidence whatever in the record to show what caused the second and destructive fire. It is not pretended that the first of the two causes of forfeiture set forth in the body of the policy, and the second of those contained in the conditions and by-laws, have any relation to the case at bar.

There was other insurance in a different company, but it was taken out only after notice had been given to, and a written permit had been procured from, the general agent of the defendant. The third of the causes of forfeiture contained in the conditions, being the one numbered sixteen, was the one under consideration in Hull’s case. Hull stationed a portable engine within thirty feet of his barn, and connected it by a strap and pulley with machinery in the barn, and used it there in chopping and threshing his grain. The barn was destroyed by fire whilst the engine was so used, and we held that the policy, which was identical in terms with the policy in this case, and was issued by the same company, though, of course, covering different property, was forfeited.

The conduct of Hull was directly within the terms of the sixteenth condition endorsed on the policy, and there was no possible escape from the conclusion that his policy was forfeited thereby, and, hence, ⁵⁷³ the only contention in that case was whether the company had waived this forfeiture. Apart from other provisions of the policy now under examination, it is clear that an engine regularly employed in grinding bark for use in a tannery in the process of tanning leather, is not a “ steam engine temporarily employed for the purpose of threshing out crops of any kind,” and is not within the sixteenth condition, and is not, therefore, the cause of forfeiture specified therein. It is manifest that this provision was intended to prohibit the use of engines for the purpose of threshing out crops in the vicinity of barns and other equally inflamable farm buildings ; and, imposing as it does, a forfeiture for such a use, it must be strictly confined in its application to cases within its terms as written, and is not to be enlarged to include by implication another class of circumstances neither within its letter nor its evident design. In the vital particular that the use made of the engine by the appellant was not a use prohibited or at a place prohibited by the sixteenth condition on the policy, the case at bar is widely distinguishable from Hull’s case.

That condition cannot control this case unless restrictions and inhibitions which are not there now are first imported into it by mere construction. That this view of the limited scope and effect of the sixteenth condition is the correct one, is made even more apparent, by other and different provisions embodied in the seventeenth condition, which was obviously framed to meet a class of cases not covered by the sixteenth condition. Whilst this latter condition provides without qualification of any sort that “ this company will not become responsible for any loss or damage by fire * * * * resulting from the use of any steam engine temporarily employed for the purpose of threshing out crops of any kind’,' the seventeenth condition distinctly and in terms recognizes the liability of the company for losses or damage by fire resulting from the use of other steam engines than those referred to in the sixteenth condition, and specifically prescribes what shall be done by ⁵⁷⁴ the company and by the insured when such other steam engines are employed; but it no where imposes a forfeiture. The seventeenth section or condition is in these words: “ That in the event of an engine being stationed on the premises, and in close proximity to the buildings insured by this company, then, in that event, the president of the company shall appoint a committee of three discreet men, who shall be members of this company, who shall proceed forthwith to said property to make a fair and impartial examination, in order to ascertain the amount of increased risk on account of said engine; and if they shall find that the risk is increased thereby, then they shall take an additional premium note for such increase, upon which the assured shall pay ten percentum at the time of the execution, and the said