Hoffecker v. New Castle County Mutual Insurance

The Court,

GHlpin, C. J.,

charged the jury: That the case was to be considered and decided by them according to the evidence which had been submitted to them in the trial of it, and in the same manner as if it were a suit between natural parties, and not between two respectable but unfortunate citizens of their county and a • wealthy corporation which had been created by the legislature of the State for wise and beneficent purposes. That the charter of the company contained provisions which expressly exempt it from any action on a policy of insurance for a loss by fire for ninety days from the date of the fire and after due notification of the loss occasioned by it, and of which the person injured is required to give immediate notice to the president or secretary at the office of the company. In this case the fire occurred and the brick factory of the plaintiffs’, the building insured, was destroyed by fire on the 11th day of September, 1870 ; in four days thereafter, on the 15th day of that month, notice of the fire and loss was given by the plaintiffs to the proper officer of the company, and on the 19th day of October, 1870, this suit was instituted by them to recover for the loss, or within less than ninety days after the occurrence of it. And *116the first question presented for consideration in this case under the facts proved has been whether the action was not commenced prematurely or too soon and before the company was liable under the charter to be sued for it; and the proper answer to this inquiry will depend upon the determination of the question of fact which has been presented for the consideration and decision of the jury upon the evidence of Mr. Smith, the secretary of the company, in regard to the letter which he stated he was directed by the president of it to write to the plaintiffs in reply to their notice of the fire and loss and their claim for the amount of the insurance. The learned counsel for the parties respectively, as well as the members of the court, differ in their recollection as to the words used by him and the substance and effect of his statement in relation to the matter, and which was objected to and arrested by the counsel for the defendants before it was completed by him. The counsel for the plaintiffs contend that his evidence was that he was directed by the president to write such a letter to the plaintiffs declining (that is, to pay the claim), when he was so interrupted and stopped from saying more on the subject; while the counsel for the defendants on the other hand insisted that he did not utter the word declining or any equivalent expression, but was stopped as soon as he had said that he was directed by the president to write a letter to the plaintiffs. It was, therefore, a question of fact in the case between the counsel for the jury to decide, and it would be their duty to determine from their own recollection of his testimony what he said on that as well as other matters in the case. As it is a well-settled principle of law, however,-that a party to a contract may voluntarily waive any condition or limitation of it in his own favor or even a forfeiture of it, and also any privilege or exemption conferred upon him by it if he chooses to do so, and this may be sometimes done by implication as well as expressly or directly, it is the duty of the court to say to the jury that if they should be satisfied from the evidence which they had heard in the case that the defendants had at any time before the commencement of the suit expressly refused or declined to pay the insurance on the claim or demand of the plaintiffs after the loss and destruction *117of the building by fire, it would constitute in law a waiver by the defendants of their privilege and exemption from liability to be sued for it until ninety days after the fire and loss and their due notification of it by the plaintiffs. And if such was the fact in this case then they waived the credit of the ninety days and the suit was not commenced too soon, but the action could be maintained notwithstanding it was commenced before the ninety days had expired. If, however, such was not the fact, and the defendants did not refuse or decline to pay the insurance to the plaintiffs before the action was instituted, then it was instituted prematurely and the plaintiffs could not recover.

The policy of insurance is dated and was issued on the 22d day of August, 1865, on a stock of wool, woolen goods, materials, etc., in a two-story brick factory of the plaintiffs, in the town of Smyrna, and the insurance, which was for the sum of three thousand dollars, was afterward duly transferred on the 22d day of January, 1868, by the agreement of the parties, from the stock of goods to the building itself, the first story of which, as was stated in the application for the insurance, was used as a machine shop for the repair of machinery and very little shavings made in it. But this transfer of the insurance from the stock of goods to the building or factory did not in any respect vary or affect the terms of the policy or the application beyond the mere fact of transferring the insurance from the goods to the building; for it did that and nothing more. The class of risk, that is to say, the insurance and extent of the risk assumed by the company on the transfer being made, was the measure and extent of risk which it incurred and which existed in respect to a brick building, used as a woolen factory, with the first story used as a machine shop for the repair of machinery and where very little shavings were made. And this risk under the policy is to be measured by the use or uses to which the building was originally appropriated. But it is contended on behalf of the defendants that the plaintiffs or their tenants to whom they subsequently rented the building after they had removed their stock of wool, woolen goods, and materials from it to their factory in Milford, changed and increased *118the risk of loss by fire, by the change which was made in the character of the business carried on in it. The proposition of the defendants is, and they so insist, that they so assumed only the degree or rate of risk incident to a woolen factory where wool, woolen goods, and materials are manufactured and kept and the first story of which is used as a machine shop for the repair of machinery and where very little shavings are or were to be made, and that they assumed no risk beyond that. The court considered this proposition to be correct and that it ascertained and determined the degree and magnitude of the risk assumed by them and against which they agreed to indemnify the plaintiffs in this case under the policy and transfer of insurance in question, for they did not undertake by their policy of insurance to insure the brick factory when the transfer of insurance was made to it against any greater risk than that which has just been indicated. The question then is, and which was purely a question of fact for the consideration and decision of the jury, did the plaintiffs or their tenants so occupy or use the premises at any time as to increase the risk of injury or loss of the building by fire ? If they did so increase the risk they were not entitled to recover, for the law on that subject was very plain and well settled as well in this State as elsewhere in the States of this country and in England. That law declares that in every contract or policy of insurance against fire there is an implied promise or undertaking on the part of the insured that he will not after the making of the policy alter or change the premises or alter or change the kind or character of business carried on or to be carried on there, so as to increase the risk of loss by fire. And this is the rule of law, although there be no by-law of the company oh the subject.

The application, as it is called, for the insurance and on which the policy is issued enters into and constitutes part and parcel of the contract of insurance and is made such by the express terms of the policy itself; and from this and the policy must be ascertained and determined the degree or extent of the risk which the defendants assumed and agreed to insure against. And in consequence of this the description of the building contained in the application and the fact stated in it that the *119first story of it was then used as a machine shop for the repair of machinery and little shavings made became a material part of the contract and policy of insurance in this case, and constituted an express and essential limitation and restriction in respect to the making of shavings in the building. The plaintiffs ceased to manufacture woolen goods in it in the latter part of the fall of 1867, and removed with their woolen machinery to their factory at Milford, after which the building remained empty for a time, but in March, 1867, Mr. Smith became the tenant of the second story of it and occupied and used it as a carpenter’s shop and so continued to use it for a period of two years. In March, 1870, Mitchell & Weddle occupied and used the building for the purpose of general carpentering work, manufacturing doors, windows, window frames, sash, and the preparation of wooden building materials generally and afterward as a factory for the making of peach baskets and one of the witnesses stated that he had seen more shavings in the building during the time it was so occupied and used than could have accumulated in it he thought in one day merely. Now, although the insured, the plaintiffs in this case, or their tenants might lawfully change or alter the premises or appropriate them to purposes other than the manufacture of woolen goods and materials, yet they were bound in law to be careful not to so change or alter it or to occupy or use it for any other purpose or purposes which would increase the risk or danger of injury or destruction by fire. And therefore if either the insured, the plaintiffs, or their tenants in fact increased that risk or danger by any of the other and subsequent uses or branches of business to which it was at any time appropriated by them after the transfer of the insurance to it, the contract of insurance was vitiated by it and was thereby rendered void and no action would lie upon the policy of insurance for the loss sustained in this case. But if such change of use or business, or the manner of conducting such other and new business by them, or any "of them, did not in any material degree or respect increase such risk, then the contract and policy of insurance would continue valid and in full force and effect.

R. Harrington, Ridgely, and Massey, attorneys for the plaintiffs. Bates and Saulsbury, attorneys for the defendant.

There has been much speculation indulged in by counsel in the course of the trial as to the manner in which the fire probably occurred, but the origin of it is wholly immaterial and is not a question to be considered in the case. The main fact to be ascertained and determined by the jury was whether the risk of loss by fire of the two-story brick factory was increased after the 22d day of January, 1868, the day when the insurance was transferred from the stock of goods, etc., to the building. It makes no difference when the fire occurred, or what cause originated it. If the risk of loss by fire was increased after that time by reason of any of the changes before suggested, by that fact and circumstance alone and at that very instant the policy of insurance was forfeited and rendered null and void.

After being out several hours, the jury,. not being able to agree on a verdict, were discharged.