Planters' Mutual Insurance v. Engle

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 *479the 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 *480doubtful, 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 Ins. Co., 4 Wharton, 59.

We are of opinion, therefore, that the policy issued in this case, embraces only such stock in trade, as belonged to the appellees, and that it does not, therefore, embrace fertilizers consigned to them for sale on commission.

In regard to “ Whitelock’s fertilizer,” there seemed to be some conflict in the testimony, whether it belonged to the plaintiffs, or was held by them for sale on commission. This was a question for the jury to be determined under instructions by the Court. If it was bought by the plaintiffs, or if they had become liable for it to the owners by course of dealing, it would be embraced by the policy.

We do not think, however, the plaintiffs’ fifth prayer states the law accurately on this subject. The fact that the fertilizer was charged to them when delivered, with *481the understanding that they were to account for it at the price thus charged if sold, and if not sold, it was to remain In their hands subject to the order of Whitelock & Co., would not make the plaintiffs the owners of the fertilizer. On the contrary they would under such circumstances still hold it as consignees.

As to the proofs of loss, it was necessary of course for the plaintiffs to furnish such proofs within the time prescribed by the policy; or to prove that this condition had been waived by the insurer.

It appears that the Whitelock fertilizer was not embraced in the proofs of loss, but the plaintiffs proved that Messrs. Pole and Strite were sent by the company to in■spect and ascertain the nature and extent of the loss; that the plaintiffs told them they were not certain whether the Whitelock fertilizer belonged to them, or was held for sale on commission.

That Pole then requested the plaintiffs not to include in the proofs any fertilizers not in fact belonging to them, and that if the Whitelock fertilizer proved to be the property of the plaintiffs the Company would pay for it.

If this fertilizer was omitted in the proofs of loss in ■consequence of what was thus said to the plaintiffs, such acts and conduct on the part of the Company would, in our opinion, amount to a waiver of proof of loss in this respect.

It was also argued that guano, as used in the policy, ■does not embrace fertilizer. Strictly speaking, it may be true that guano does not embrace every kind of fertilizer used for agricultural purposes. But we are dealing with ■a contract of insurance, and the question is, what did the parties mean by it as used in this connection ? The proof shows that at the time the policy was issued the plaintiffs had fertilizers on hand, hut did not have any guano, and it *482is very clear that they meant it to embrace such fertilizers-And it also appears in the partial settlement of loss fire-insurance Company paid the plaintiffs for all fertilizers-which were admitted to be their property, and refused to-pay for such as were held on commission; and we think it may therefore be fairly implied, that the insurer also understood the word as here used to embrace fertilizers.

The letter written by Pole, the treasurer of the Company, to the plaintiffs, was clearly not admissible in evidence as against the latter. It was but the written declarations of an officer of the Company in regard to his construction of the policy.

The proposition of law embraced in the first prayer is too well settled to admit of discussion. If the proofs of loss were furnished in time, and such proofs were defective, and no objection was made to them by the defendant on that ground, but the refusal to pay was based on other grounds, the insurer will be considered as having waived all objections to the proofs on the ground of- such defects, and will not be permitted to rely on them in a suit upon the policy.

It follows also from what we have said, there is no error in the instruction granted by the Court in lieu of the plaintiffs’ seventh prayer. The facts set forth in this instruction if found by the jury would amount to a waiver of' proof in regard to the Whitelóck fertilizer.

Being of opinion that the plaintiffs are not entitled to-recover for fertilizers held on commission, the instruction granted as a substitute for the plaintiffs’ third prayer has-no longer any application to this case.

We find no error in the refusal to grant the several prayers offered by the defendant.

The Court erred, however, in granting the plaintiffs’ fifth prayer, and also in the instruction given by the Court. *483itself, and for these reasons the judgment will he reversed.

Judgment reversed, and

new trial awarded.

Miller, J., dissented.