Blumer v. Phœnix Insurance Co. of Brooklyn

TayloR, J.

I dissent from the opinion of the court in this case, for the reasons stated in my dissenting opinion filed upon the former argument of this case.

In that opinion I stated what I then thought, and still think, is the true rule for the determination of cases of this kind, as follows: “ None of the cases go further than this, that where a question, in an application for insurance, relates to the manner of using a mill or other manufacturing establishment upon which insurance is sought, or to the precautions taken against fire, and the answer is affirmative or negative, if the court can determine from the question and answer, as a matter of law, that the continuance of the custom or use, as the answer states it to be, will lessen the risk, such answer will generally be held to be a continuing warranty; but when the custom or use is such that the court cannot say, as a matter of law, that its continuance will necessarily lessen the risk, it will not be held to be a continuing warranty unless it be expressly so agreed in the contract.” After a very careful *539examination of the authorities, I am satisfied that the rule above stated is supported by an overwhelming weight of authority, and is fully sustained by the fundamental rules of construction applicable to contracts of this nature.

That this court cannot say, as a matter of law, that the fact that “ one or two hands slept in the mill ” did in fact lessen the risk, was clearly demonstrated by the learned counsel for the appellants upon the argument, and I do not understand that a majority of the members of this court hold otherwise. It is not denied that, in this case, the question whether there was a continuing warranty, is dependent upon the construction which shall be given to the language used. Clearly the language itself does not necessarily imply that there was a continuing warranty that the hands should sleep in the mill during the running of the policy. The language used is certainly as susceptible of a meaning which limits it to the present and past status of things as to the future; and to extend it to the future depends upon construction; and the intention of the parties to be derived from all the circumstances attending the making of the contract, as well as the nature of the contract itself, ought to control such construction. If it cannot be said, as a matter of law, that the continuance of the custom would be beneficial to the insurance company, how can we infer that it was the intention of the parties that it should extend to the future? If we cannot say, as a matter of law, that the insurance company would be benefited by the continuance of the 'custom, there certainly does not arise any presumption, from the nature of the custom itself, that the company intended it should be so continued.

If the answer had been that “ no watch was kept,” would there have been any presumption that the insurance company intended to bind the assured to continue the custom of not having a watch during the continuance of the policy? Such presumption would be little less than an absurdity. So in any case where the court cannot, as a matter of law, say that *540the custom is beneficial, and it remains ail open question as to whether it is beneficial or prejudicial, there is certainly no reason for holding that it was intended the custom should continue. If the custom is neither beneficial nor prejudicial to the insurance company, why should it be construed to be a warranty that it shall continue? The only result of so holding is, that the insurer may, upon a doubtful construction of the contract, import into it a warranty as to a wholly immaterial matter, the breach of which, on the part of the insured, shall forfeit the policy. Contracts are not thus liberally construed for the purpose of importing into them conditions subsequent, for the mere purpose of creating forfeitures by their breach, without showing any damage arising from such breach.

Justice Lyon, in his opinion on the first hearing of this case, undoubtedly felt the force of this position, and, in order to strengthen the opinion upon the main question, stated it as his opinion that, as a matter of law, the continuance of the custom was material to and lessened the risk. With great deference-to the judgment of the learned justice, I think the question whether it was material to the risk is not a question of law for the court, but one of fact for the jury; nor is it a question upon which one not an expert in the insurance business would be permitted to give an opinion as a witness upon the issue as to whether it was or was not material to the risk. That there is nothing in the form of the questions in the application, nor in the answer, from which the court can say that it was made material by the parties by the contract itself, is, I think, fully shown in my former opinion.

I am unable to add anything further to the argument made in my opinion filed on the first argument of the case, against the views held by the majority of the court, and will only add the following case to those heretofore cited, lately decided by the supreme court of Pennsylvania: Knecht v. Life Ins. Co., Albany Law Journal, January 31, 1880, p. 192, which I think tends to support my views of this case.

*541I think the learned circuit judge erred in directing a verdict for the defendant, and that the judgment of the circuit court ought to be reversed.

By the Oourt, — Judgment affirmed, with costs.