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LIVERPOOL & LONDON INS. CO. V. GUNTHER, 116 U. S. 113 (1885)
U.S. Supreme Court
Liverpool & London Ins. Co. v. Gunther, 116 U.S. 113 (1885)
Liverpool and London Insurance Company v. Gunther
Argued November 12, 1885
Decided December 21, 1885
116 U.S. 113
A violation of any of the prohibitions in a policy of insurance against fire by a tenant, who occupies the insured premises with the permission of the assured, is a violation by the assured himself.
If a policy of insurance forbids the keeping of gasoline or benzine on the insured premises, but authorizes the use of gasoline gas there, the latter authority gives no warrant for keeping gasoline or benzine there for any purpose other than the manufacture of gas.
As the practice in New York allows a variance between proof and pleadings to be cured by amending the latter when the opposite party is not misled, if, in the trial of an action in that state on a policy of insurance, evidence is offered without objection, establishing or tending to establish a defense under the policy which have not been properly pleaded, and, on defendant's request for instructions, founded on that evidence, no objection is made that the defense was not within the issues, it is competent for the defendant to rely upon the defense after the opportunity for amending the pleadings has passed.
This is an action at law brought by Charles Godfrey Gunther, a citizen of New York, in the supreme court of that state, against the plaintiff in error, a corporation created by the laws of Great Britain, and consequently an alien, and by the latter removed into the circuit court of the United States
for the Southern District of New York. There was a verdict and judgment for the plaintiff below, brought here for review by this writ of error.
The object of the action was to recover the amount claimed to be due on two policies of fire insurance, issued by the defendant below, in favor of the plaintiff: one for $20,000 on the two-story hotel, frame building, with one-story frame kitchen and two-story frame pavilion building adjoining and communicating, situate in Gravesend Bay, of Bath, Kings County, Long Island, $1,000 on the two-story frame stable occupied in part as a dwelling, and $200 on frame bathing houses, and the other for $8,500 on the contents of the buildings insured. The loss by fire is alleged to have occurred on August 15, 1879, while both policies were in force.
The execution of the policies and the fact of the destruction by fire of the insured premises were admitted by the answer, which, however, denied generally all the allegations of the complaint not expressly admitted, or otherwise controverted in the answer, and, in addition, set out the following special defense:
"Tenth. For a separate and distinct defense to the causes of action alleged in the complaint, in addition to the matters and things hereinbefore set forth, the defendant avers that it was provided in and by the terms and conditions of said policies of insurance, among other things, as follows:"
"If the assured shall keep gunpowder, fireworks, nitroglycerine, phosphorus, saltpeter, nitrate of soda, petroleum, naphtha, gasoline, benzine, benzole, or benzine varnish, or keep or use camphene, spirit gas, or any burning fluid or chemical oils, without written permission in this policy, then and in every such case this policy shall be void."
"That petroleum, rock-earth, coal, kerosene, or carbon oils of any description, whether crude of refined; benzine, benzole, naphtha, camphene, spirit gas, burning fluid, turpentine, gasoline, phosgene, or any other inflammable liquid, are not to be stored, used, kept, or allowed on the above premises, temporarily or permanently, for sale or otherwise, unless with written permission endorsed on this policy, excepting the use of refined coal, Kerosene, or other
carbon oil for lights, if the same is drawn and the lamps filled by daylight; otherwise this policy shall be null and void."
"And the defendant avers that the said conditions of insurance were broken and violated on the part of the plaintiff, among other things, in that, without written permission of the defendants endorsed on said policies or otherwise, there were stored, used, kept, and allowed on the insured premises mentioned and described in said policies, benzine or other inflammable burning fluids or liquids, prohibited by said policies, and defendant avers that the fire mentioned and referred to in the complaint originated and was caused by such storing, using, keeping, and allowance of such prohibited articles on said insured premises, and defendant avers that it is advised and believes that, by reason of the premises, the said policies became and were null and void."
Each of the two policies, after the description of the premises insured, contained the following clause:
"Privilege to use gasoline gas; gasometer, blower, and generator being underground about 60 feet from main building, in vault; no heat employed in process."
Among the conditions in the body of the policies is also the following:
"Petroleum, rock-earth, coal, kerosene, or carbon oils of any description, whether crude or refined; benzine, benzole, naphtha, camphene, spirit gas, burning fluid, turpentine, gasoline, phosgene; or any other inflammable liquid, are not to be stored, used, kept, or allowed on the above premises, temporarily or permanently, for sale or otherwise, unless with written permission endorsed on this policy, excepting the use of refined coal, kerosene, or other carbon oil for lights, if the same is drawn and the lamps filled by daylight. Otherwise this policy shall be null and void."
To the first policy there was attached the following: "Privileged to use kerosene oil for lights, lamps to be filled and trimmed by daylight only." And also the following: "Privileged to keep not exceeding five barrels of kerosene oil on said premises."
To the second policy the first only of the foregoing privileges was attached.
On the trial, the plaintiff, having produced the policies sued on, with the renewal receipts, showing that they were in force at the time of the loss, was called as a witness, and testified, among other things, as follows:
"I was the owner of the insured property at the time of the insurance, and have continued such until the present time. A fire occurred on the 15th of August, 1879, about dusk, by which the building and its contents were totally destroyed. I was seated on the piazza of the building proper in sight of the pavilion. I saw some parties with pails and a light. There were some children playing. Mr. Lanier Walker was playing with some boys around some small trees that I had planted in the lot, and my attention was attracted by hallooing, and I saw the men come out as though they were on fire. It did not occur to me then that there was any fire in the oil room, although I saw it. I saws these men, and ran out and said, 'Roll in the grass.' One man struck for the water and the other one had the fire threshed out by the crowd. In another instant I saw the oil room burning. The wind was from the southwest, blowing very hard right over the kitchen. The pavilion immediately caught, and in one hour's time or less the building was level with the ground."
The proofs of loss were read in evidence and the amount of the loss proven. The plaintiff also testified that during the summer of 1879, he had a room at the hotel, where he stayed on an average of four nights out of the week. The rest of the time he was in New York. Mrs. Fannie Walker kept the hotel as his tenant, her husband, Mr. John Walker, being manager for her.
The plaintiff having rested his case the defendant introduced evidence, not objected to, tending to prove the following facts:
A gas-making apparatus for the use of gasoline, including a gasometer, generator, and blower, about sixty feet from the house, and all underground but the roof, had been in use for lighting the main building for about eleven years, up to and including the summer of 1878, but its use was discontinued in
the fall of 1878, and it was not in use at all during the year 1879.
There was an oil room in the basement of the hotel under the pavilion, about ten by twelve feet, with low ceiling. In this room the lighting material was kept. The fire originated in the oil room, "about dusk, August 15, 1879." Three persons were in the room at the time: Jacob Constine, James Marrion, and one Schuchardt. The last-named was in Walker's employ as night watchman, and had charge of the oil room. The others were employed at premises about a mile distant from the Locust Grove Hotel, called the Bath Park Hotel, where gasoline was used for lighting the last-named hotel and an adjoining pavilion.
Constine and Marrion were sent by the bookkeeper of the Bath Park House to the Locust Grove Hotel to borrow five gallons of gasoline, and each of them carried a wooden pail in which to fetch it. On reaching Locust Grove they saw Walker, who directed Schuchardt to give them the gasoline. Schuchardt took them into the oil room. He carried a glass lantern with a wire frame around it, "a regular closed stable lamp, with wire, and then little holes on top." The lamp was lighted.
Schuchardt placed the lantern on the floor, and drew fluid from a barrel which was raised on stanchions a little above the floor. He drew from the end of the barrel, into which a piece of gas pipe had been placed as a faucet. On pouring into the pails, it was found that one of them leaked, and Schuchardt got a five-gallon can into which to pour the oil, and while filling the can, there was "a sort of bluish flame, and explosion, and the place was full of fire."
The fire spread with great rapidity. Schuchardt was burned to death. Constine was badly burned, and was laid up thirteen weeks. Marrion was burned a little -- not much.
The hotel and all the buildings were destroyed by the fire. "In one hour's time or less the building was level with the ground."
There was no conflict of evidence as to the origin of the fire.
Walker purchased in New York, and had shipped to the
hotel, on August 13, a barrel of kerosene, and a half barrel of benzine containing about 21 gallons, which were received and put into the oil room under the pavilion on the morning of August 14, the day before the fire. There was evidence tending to show that gasoline, benzine, or naphtha was used in torches for the purpose of lighting the pavilion, and also other evidence that it was intended for use in lighting grounds for a picnic. The plaintiff introduced evidence in rebuttal tending to prove that no gasoline or benzine had been brought to the premises or was kept there. The testimony having been closed on both sides, the defendant's counsel then requested the court to direct the jury to find a verdict for the defendant on the ground that it appeared from the undisputed evidence that there was a violation of the condition of the policy providing that, in the use of refined kerosene oil, the same must be drawn by daylight, the evidence being undisputed that three persons went into the oil room with a lighted lamp, and that whatever was drawn there was drawn not by daylight, but by the use of a lighted lamp, the presence of which was the direct cause of the fire. The court refused so to direct the jury, to which refusal the defendant's counsel then and there excepted.
The defendant's counsel requested the court to instruct and charge the jury, as matters of law, as follows:
1. That the several conditions contained in the policy respecting the keeping, using, or allowance on the insured premises of the products of petroleum, specified therein, were lawful provisions, and formed a part of the conditions of the insurance, which, if violated, rendered the policy void.
2. That if the jury believe from the evidence that gasoline, naphtha, or benzine were kept, used, or allowed on the insured premises at the time of the fire, whether permanently or temporarily, the plaintiff cannot recover, and the defendant is entitled to a verdict.
3. That if the jury believe from the evidence that gasoline, naphtha, or benzine was used in the summer of 1879, previous to the fire, on the insured premises for lighting the pavilion, by means of the torches described in the evidence, then the plaintiff
cannot recover, and the defendant is entitled to a verdict.
4. That if the jury believe from the evidence that any fluid product of petroleum, used for lighting purposes, was actually drawn after sundown in the oil room by the light of a lamp, the flame of which ignited the fumes or vapors of such fluid and caused the fire, then there was a violation of the conditions of insurance, and the plaintiff cannot recover, and the defendant is entitled to a verdict. Also, and as a part of the above request, that the permission endorsed on the policy to keep five barrels of kerosene oil did not vary or affect the conditions of the policy in drawing refined oil by daylight, and if the fire was caused by drawing refined kerosene oil after sundown and in the presence of a lighted lamp, the plaintiff cannot recover, and the defendant is entitled to a verdict.
5. That if the jury believe from the evidence that the risk of fire was increased by the actual presence on the insured premises of gasoline, naphtha, or benzine, then the plaintiff cannot recover, and the defendant is entitled to a verdict.
6. That irrespective of the questions raised by the preceding fourth and fifth requests, if the jury believe from the evidence that the fire was caused by the ignition of the fumes of gasoline, naphtha, or benzine in the oil room, while such gasoline, naphtha, or benzine was being drawn from a barrel or keg, or poured from one vessel to another in the oil room, then the plaintiff cannot recover, and the defendant is entitled to a verdict.
7. That if any of the conditions of the policy were violated by the presence or use of gasoline, naphtha, or benzine on the insured premises, it is immaterial whether or not the plaintiff knew of such violation. If the fact of the violation is established, the defendant is entitled to a verdict.
8. That the permission in the policy to use gasoline gas -- the generator, gasometer, and blower to be underground 60 feet from the main building, no heat to be used in the process -- did not authorize the plaintiff or anyone occupying the premises under him to use gasoline, naphtha, or benzine for lighting the pavilion by the torches described by defendant's witnesses or
to keep gasoline, naphtha, or benzine in the oil room for use in such torches.
9. That in weighting the evidence, the jury must determine on which side the preponderance of proof lies and decide accordingly; that the testimony of the plaintiff in his own favor must be scrutinized in view of his interest as plaintiff, and that the evidence of witnesses not discredited or impeached, who swear positively to certain facts as within their own knowledge and actual observation, is not to be overcome by mere negative testimony of other witnesses that such facts were not observed by them at the same time and place.
At the conclusion of the charge, a juror asked the court whether the jury were to consider the matter of drawing oil in the daylight.
The court thereupon charged and instructed the jury that there was no question in the case in reference to the drawing of the oil by daylight, no such question having been made by the pleading. To which ruling and charge the defendant's counsel then and there excepted.
The defendant's counsel then excepted specifically to that part of the charge which instructed the jury that any question arose in the case under the permission in the policy to use gasoline gas.
The defendant's counsel then further excepted specifically to the refusal of the court to charge that if benzine was allowed on the premises at all, the plaintiff cannot recover, so far as the court did refuse.
The defendant's counsel then further excepted to that portion of the charge which confined the questions in the case to the three questions specified in the charge as being the sole questions which the jury were to consider.
The defendant's counsel then further excepted specifically to that portion of the charge which instructed the jury that if the benzine was brought to the insured premises by Walker for an outside purpose, it did not vitiate the policy. The defendant's counsel then further excepted specifically to that portion of the charge which instructed the jury that the only effect of the question whether torches were used was in
reference to the question of the half barrel of benzine being brought to the insured premises or not.
The defendant's counsel then further specifically excepted to the refusal of the court to charge the several propositions contained in the foregoing second, third, fourth, fifth, sixth, seventh, eighth, and ninth requests on the part of the defendant in the language as requested, and separately to each separate refusal to charge each separate request, so far as the court did so refuse.
In the charge to the jury, the circuit court stated in substance that under the pleadings and upon the evidence, there were but three questions for their consideration:
The first was whether in fact the half barrel of benzine testified to had been brought to the premises and stored in the oil room; if not, the whole defense was taken away, and the verdict must be for the plaintiff.
Second. If otherwise, had it been brought over and stored there by the authority of Walker in his management of the premises for his wife under her lease? If it had been brought and stored there by him for an outside purpose, referring to some testimony in reference to its intended use in lighting the picnic grounds, then the verdict should be for the plaintiff.
Third. This question was stated by the court as follows:
"If it was brought there, and brought there by Walker in the course of his management, then would bringing that benzine there and putting it in the oil room come within what would be expected when the company gave the assured the privilege of using the gasoline gas, the gasometer, generator, and blower to be under ground, sixty feet from the main building? It would not come within that unless you can say that by the common and ordinary mode of the use of such apparatus, as it would be understood by this contract to be used, it was proper to store somewhere else benzine or gasoline for use in the apparatus. If you can see that it would come within that, then that would be written permission to have so much stored there, although it was not to be used for that purpose. And if you find that the benzine was there, and then that Walker got it there, still if you find that it came within that clause of the
policy, then you may return a verdict for the plaintiff; otherwise you must return a verdict for the defendant. If the defendant has made out these three things, then you must return a verdict for the defendant, and you must find this upon the proof, and not upon any conjecture. And I feel bound to say to you that, as to the use of a gasometer, generator, and blower, it is a matter with which perhaps you might not be familiar. I am not sufficiently so to know what the ordinary use would be. The only evidence directly is what one of these manufacturers and dealers in such things, and familiar with them (I don't remember his name) said. He said the gasometer was used to store the gasoline or benzine, or whichever was used in it. That is all the direct evidence I call to mind on that subject. Still I submit it to you to say on the whole what you think the fact is in this view. "
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