Grandin v. Rochester German Insurance , 107 Pa. 26 ( 1884 )

Mr. Justice PaxsoN

delivered the opinion of the court, June 9, 1884.

. This case is not free from difficulty. The suit was brought in the court below upon a policy of insurance issued by the .defendant company to the plaintiff to recover for a loss by fire upon petroleum burned in the Tidioute and Titusville Pipe Line, at the city of Titusville, in June, 1880. The insurance was for “ 2,500 on petroleum, his own or held by him in trust .for others, or sold but not delivered, while in custody of the Tidioute and Titusville Pipe Line Limited ” &c. Among the numerous clauses of forfeiture enumerated in the printed portion of the policy is the following: “ or if the assured is not the ■sole, absolute and unconditional owner of the propert}^ insured ” &e.

• The plaintiff sought to recover for 1st, “ certain oil in which he had no interest, but which the owners had requested him in writing to insure; 2d, oil of which he was the undisputed and sole owner, and 3d, a large amount of oil in which he had an undivided interest as tenant in common. Upon the case stated, the court below entered a judgment for the plaintiff for only the oil secondly above mentioned.

. That there could be no recovery for the first class of oil is ■clear. The plaintiff had no insurable interest; he was not a ¡consignee, and had no possession or control of the oil and the policy was not “ on account of whom it may concern ; ” nor did. it contain any clause or expression that would make the company liable without reference to the ownership. The difficulty iu the case arises upon the third class, and is mainly owing to the fact that in making this insurance a form of policy has been used evidently intended for another and very different purpose. It contains conditions and stipulations which have no application to the insurance of oil in a Pipe Line. As an illustration, among the conditions which render the policy void are the following: “ If the premises insured shall become vacant by the removal of the owner or occupant and so remain for a period of more than thirty days, without notice to the company and consent endorsed thereon; ” or, “ If petroleum fluid, or crude earth or coal oils.are kept or used on the premises, except that kerosene oil may be used for lights in dwellings; ” or, “ If burning fluid or refined earth or coal oils are kept for sale, stored or used on the premises in quantities exceeding one barrel at any time without written consent.this policy shall be void.”

We have here a number of conditions which as applied to this particular contract of insurance are meaningless. It would be absurd to attempt to give them any force or effect. The insurance itself is of a peculiar character; the form of policy is one in general use in ordinary contracts of insurance upon ordinary property; many of its conditions are admittedly inapplicable to this kind of insurance. Under such circumstances, when it is attempted to defeat a recovery upon the ground that under one of its conditions the policy is void, we are driven to an examination of the character of the condition and the reason upon which it is founded, in order to ascertain whether it could have been in the contemplation of the parties when the contract of insurance was made. The necessity for this arises from the act of the defendant company in issuing a policy not adapted to the subject matter of insurance, and containing so many incongruous' conditions.

The defendant company alleges that the plaintiff was not “the sole, absolute and unconditional owner” of the third class of oil, and as a legal deduction from this fact claims that the plaintiff is not entitled to recover to the extent of his interest.

If the insurance were upon a horse, a house or a stock of merchandise, there would -be great force in this position. But does the condition apply to the insurance of oil in a Pipe Line ?

In considering this question we must take a reasonable view of the contract. It was evidently one of indemnity. It was for this the plaintiff contracted, and we would not do the company the injustice even to suggest that it bad not the same end in view. The plaintiff paid f250 for his indemnity; under the ruling of the court only 297 barrels of his oil was covered by bis policy, worth but little more than the premium which he paid, and the amount for which judgment was entered was $25.53. This is not indemnity; yet if'it was what the parties contracted for no one has any cause of complaint. And if the condition in'question applies to this policy; if it was in the contemplation of the parties when the contract of insurance was made and was intended to apply thereto, the judgment must stand.

Assuming then that this was a contract of indemnity, and was'so intended by the parties, we find that the plaintiff is insured on petroleum, “ his own, or held by him in trust for others, or sold but not delivered.” This clause of the policy is in writing, and must be taken to be what the parties intended ; the condition is in the printed portion. The settled rule is that where the written and printed portions are repugnant to each other, the printed form must yield to the deliberate written expression: Harper v. The Insurance Company, 22 N. Y. 443. So far, therefore, as this printed condition is applicable at all and conflicts with the written portion of the contract the it must give away to the latter.

But is the condition applicable to this insurance?

There are a number of cases in which the courts have refused to enforce a condition of forfeiture because the case did not come within the reason of such condition. A familiar instance may be given in the condition to be found in most insurance policies that the policy should cease at and from the time the property insured shall be levied on or taken into possession or custody under any proceeding at law or in equity. It has been repeatedly held that this condition was not broken by a levy upon the property insured unless the same was taken into the actual possession of the sheriff, or other officer: Ins. Co. v. Berger, 6 Wright, 285; nor where the property insured was levied upon under an execution against a stranger : Ins. Co. v. Mills, 8 Wright 241.

It was held by this court in Ins. Co. v. Berger, supra, that a mere levy without actual seizure while good as a levy, was not within the meaning and reason of the condition. It was said by Mr. Justice StboNG: “The eleventh condition (execution clause) must have been attached to the policy for at least some supposed substantial reason. Its purpose, doubtless, was to secure the company against any other hazard than that which they first assumed. To them it was important that while the risk continued, the goods should not be taken out of the possession of the assured.”

It will thus be seen that where the reason of a condition does not apply this court lias refused to apply it. Other instances of the same kind might be cited were it necessary. We are not to suppose that conditions involving forfeitures are introduced into policies by insurance companies, which are purely arbitrary and without reason, merely as a trap to the assured or as a means of escape for the company in case of loss. When therefore a general condition has no application to a particular policy; where the reason which alone gives it force is out of the case, the condition itself drops out with it.

The condition in question refers to the title or ownership; indirectly it bears upon the custody. Where a house or a stock of goods is insured it may be very important to the risk for the company to know whether the insured is sole or only part owner, because the ownership of personal property at least draws to it the custody and possession thereof as an incident. The possession is usually an actual possession. An insurance company might be very well satisfied to insure a stock of merchandise owned by A. and in Ms actual possession while they might object to insure a stock in which B. was jointly interested with A. for the reason that while they knew A. to be an honest man they might know equally well that B. was a rogue. No such reason applies in this case. The subject matter of this insurance was petroleum. It was not in the possession of plaintiff nor of his other tenants in common. On the contrary it was in the tanks and pipes of the Tidioute and Titusville Pipe Line Company. Here comes in one of the peculiarities of the insurance. It could not be said to be upon any particular oil. The plaintiff’s oil was mixed with the oil of other persons. His certificates entitled him to draw out so many barrels of oil; not the specific oil he put in, but an equal quantity of other oil of like value. As was said in Hutchinson v. Commonwealth, 1 Norris 472, “Each barrel of oil in the pipes is the precise counterpart of every other barrel of oil contained therein.” It is true this is not set out in the case stated; but it does show that the oil was in the Pipe Line, and the manner of conducting business by the pipe lines in this respect is too public and notorious for us to shut our eyes and pretend not to see it. The whole matter has been before us judicially again and again and we know that individual oil is mixed with other oil in the pipe lines as well as we know that water will run down hill.

While the plaintiff was not the owner of any particular barrels of oil, yet he had the right to draw out of the pipe lines a certain number of barrels of oil. Pic had such an ownership as was decided in Hutchison v. Com., supra, to be the subject of embezzlement. It was certainly the subject of insurance. Yet here again the insurance was peculiar; for losses of oil in the pipe lines there appears to have been a liability of assessment upon the remaining oil in the pipes; and it was to protect against this liability that this policy was taken out.

To the extent that the plaintiff held oil in the pipe lines in common with others, he was the owner of such oil to the amount of his interest. Thus if he owned 15,000 barrels in common with B. & C., he would be owner of 5,000 barrels, and as such entitled to draw it- out. I do not speak of the form by which this would be accomplished; I refer to the right to the oil; to the fact of ownership, and the right to appropriate it to his own use. To this extent he would be sole owner of his share of the oil; the fact that it is undivided makes no difference; all the oil in the pipe line was undivided ; it was mixed with the oil of others, just as his share was mixed with that of his co-tenants. He was therefore the sole owner of certain undivided oil, and the condition of the policy, even if applicable, cannot fairly be held to bar his recovery. There is nothing in the policy which avoids it because the property insured consists of undivided interests, which means merely undivided oil.

We have a right to assume that the parties contracted with reference to the peculiar nature and situation of the subject matter insured. It is not reasonable to suppose the plaintiff was contracting for the insurance of only a few hundred barrels of oil, when he had many thousands -of barrels in the pipe lines, of which he was undoubted owner. -He contracted for indemnity, and when the defendant company received his money it is only a fair construction of the contract to hold that the company intended and agreed to indemnify him to the extent of his oil in the pipe lines. This reasonable view is not to be defeated by setting up one of many conditions in the policy, which was probably inserted as applying to other subjects of insurance, and the reason and object of which do not appear to apply to this particular contract. Whatever doubt there may be in regard to this condition must be resolved in favor of the assured. If there is any obscurity in the meaning of the policy it is the fault of the company in not giving it clearer expression; and as between the parties it must be construed most strongly against the insurer.

Assuming that the condition referred to was at least intended for a reasonable purpose, of what possible importance was it to the defendant company, that other parties were interested with the plaintiff in certain of the oil ? He was not in actual possession; his co-tenants were not in possession; by no act of his or theirs could, the risk be increased, whether such act was the result of fraud or mere negligence. The oil was in the pipe lines; it was in the custody of other parties, whose care of it would not be affected by anything the owners might do or leave undone. The case differs essentially from the ordinary one of insurance upon property which is in the manual possession of the insured, and the risk of which may be increased or diminished because of such possession.

We are of opinion that the plaintiff is entitled to recover for the oil which he owned as tenant in common with others.

The judgment is reversed, and judgment is now entered here for the plaintiff upon the case stated, for two thousand five hundred dollars (12,500) with interest from October 17, 1880, and costs.