Copp v. German American Insurance Co.

The following opinion was filed February 8, 1881:

LyoN, J.

The stipulations in the contract of insurance to be considered on this appeal, and which are contained in the questions propounded by the insurance company in the application and the answers of the insured therein, are promissory warranties in the nature of conditions subsequent. It is the settled law in this state that any substantial breach of such stipulations in policies containing provisions like those in the policy in suit, defeats the policy. Blumer v. Ins. Co., 45 Wis., 622 ; Redman v. Ins. Co., 49 Wis., 431 . It is freely admitted by the learned counsel for the defendant company, that, to work a forfeiture of the contract, the breach must be a substantial one. Such is doubtless the true rule of law. A trifling departure from the letter of the condition — a mere technical breach,— or probably an accidental or involuntary failure to perform the condition, not sanctioned by or known *641 to the insured, which does not increase the risk, would not be held to defeat the policy. This rule is based on the presumption that the parties could not hare intended by their contract that so serious a result should follow a failure to fulfill the strict letter of the stipulation, when the risk was not increased by such failure. It is difficult to lay down any general rule by which to determine whether a failure in any given case literally to perform a condition is or is not a substantial breach of the condition. The question must be determined upon the facts and circumstances of the case in which it arises. In the case before us, we are clearly of the opinion that if the insured, in the usual course of business, ordered lard and sperm oil for lubricating purposes, and believed they obtained and were using what they ordered, and if the oil they used contained lard and sperm oil, and (although compounded with a product of petroleum) was equally as good and safe as pure lard and sperm oil, there is no substantial breach of the condition concerning lubricators.

It appears that, some time before the mill was burned, the insured received from the Backus Oil Company, of Cleveland, a consignment of oil, branded “ Fine Engine Oil,” and “ XXX Cylinder Oil,” which they used for several months before the fire to lubricate their machinery. The plaintiff offered to prove that such consignment was made pursuant to a negotiation in' the usual course of business with an agent of the oil company for the purchase of a compound of lard and sperm oils; that the agent represented that he sold such compound under the name of “ Fine Engine Oil,” for use in mills; that they purchased and received the oil under an express agreement that it was a compound of lard and sperm oils, and used it believing it to be such; and that the oil so used was equally as good and safe as pure lard and sperm oils. This testimony was rejected by the court. We think it should have been received. No analysis of the oil so used by the insured was proved, and there is no direct testimony on the part of the *642 defendant as to the ingredients which it contained. The only specific proof given by the defendant on the subject is the statements of witnesses who testify from recollection as to its color and smell. It was in testimony that petroleum is usually the basis of fine engine and XXX cylinder oils; yet the testimony tends to show that these brands were placed by the oil company on very different compounds, some of which contain tallow and lard aud sperm oils, according to the orders which the company received from its customers. It is a fair inference from the testimony of both the secretary and the superintendent of the oil company, that a compound of pure lard and sperm oils was liable to be branded with the above brands, and would have been had a customer requested it.

There was much testimony given on behalf of the defendant tending to show the usual composition of oils of the above brands. This testimony was mostly given by experts, some of whom were evidently concealing what they regarded as secrets of the trade. The result is that the testimony is, in some respects, quite uncertain and unsatisfactory. We will assume, however, that it proved, prima facie, a breach of the condition in respect to lubricators. Against this testimony, which is by no means conclusive or indisputable, Mr. Redmon, one of the insured, testified that he had used oils a good deal for twenty years; that the oil used in the mill was lard and sperm oil; that he examined the oil in question, when it came, and that his judgment and understanding is that it was lard and sperm oil mixed. It seems to us that, in view of the doubtful and inconclusive character of the evidence of the defendant on the subject, the foregoing direct and positive testimony of Mr. Redmon fairly raised an issue of fact for the jury on thev question as to whether there had been a substantial breach of the condition under consideration. How can it be correctly said that it was conclusively proved that the oil used was not lard or sperm oil, when one of the insured, who was an expert and knew the facts, testified that it was lard and sperm? If *643 we regard Mr. Redmon’s testimony as only the expression of an opinion as to the kind of oil used, it still tends to show performance of the condition. In that view it was sufficient to send the case to the jury.

We greatly doubt whether the court can properly assume a fact to be proved, and take it from the jury, if the proof consists mainly of the testimony of experts, as it does in this case. It is only when the testimony leaves no reasonable doubt of the fact, that the court should exercise that power; and in the very nature of things there are usually elements of doubt, uncer* tainty and inconclusiveness in expert testimony. It is upon this principle that, in actions for infringements of patents and trade-marks (which usually depend upon expert testimony) the courts do not decide the question of infringement on demurrer to the pleadings, no matter how clearly the infringement or non-infringement may be alleged therein, but put the parties to their proofs. Leidersdorf v. Flint, 50 Wis., 401 , is such a case. We do not determine the point, however, but only suggest it. As to the stipulations in regard to the force pump and hose, all that need be said is, that the evidence tends to show that there was a force pump on the premises designed expressly for putting out fires; that it was at all times in condition for use, and that it had attached to it fifty feet of hose. Whether these facts were proved, and whether there was a “ proper supply ” of hose, as required by the contract, were clearly questions for the jury.

The learned circuit judge left none of these disputed questions of fact to the jury, but directed a verdict for the defendant, on the ground (as we are informed) that the evidence conclusively proved a breach of the condition in respect to lubricators. In the view we have taken of the evidence, we think this was error.

By the Gourt.— The judgment of the circuit court is reversed, and the cause is remanded for a new trial.

Upon a motion for a rehearing, Mr. LusJc, in behalf of the *644 'respondón!, contended that it was not conceded that the plaintiffs might recover unless there had been such a breach of the warranty as increased the risk. He argued that a breach of the warranty, whether material to the risk or not, would defeat a recovery, citing, in addition to the cases in his former brief, Redman v. Ins. Co., 47 Wis., 99 ; Duncan v. Ins. Co., 6 Wend., 495 ; Nicoll v. Ins. Co., 3 W. & M., 529; 2 Parsons on Con., 429: Mut. B. L. Ins. Co. v. Miller, 39 Ind., 475 ; 1 Phillipps on Ins., 418; May on Ins., 160; 3 Kent’s Comm., 472; Burritt v. Ins. Co., 5 Hill, 193 ; Wood on Ins., 317, 318, 271; Wood v. Ins. Co., 13 Conn., 533 . And the plaintiff cannot recover even if the breach of the contract was to the advantage of the company. Jeffries v. Ins. Co., 22 Wall., 53 . It is therefore immaterial whether the oil used “ was equally as good and safe as pure lard and sperm oils.” Nor, if the assured bought the oil for lard and sperm, can his ignorance or carelessness excuse the violation of the contract. 1 Phillipps on Ins., 464; May on Ins., 161; Cooper v. Ins. Co., 50 Pa. St., 299; Lœhner v. Ins. Co., 17 Mo., 247 . It is the duty of the court to grant a nonsuit or direct a verdict when, as in this case, the evidence is so clearly one way that the court would feel bound to set aside a contrary verdict. See Commissioners v. Clark, 94 U. S., 284 ; Lawrence University v. Smith, 32 Wis., 592 .