Insurance Company v. Slaughter - 79 U.S. 404 (1870)
U.S. Supreme Court
Insurance Company v. Slaughter, 79 U.S. 12 Wall. 404 404 (1870)
Insurance Company v. Slaughter
79 U.S. (12 Wall.) 404
1. A condition in a policy of assurance by which the policy was made void in case the assured kept gunpowder, phosphorus, saltpeter, and benzine on the premises held, under the punctuation of the policy, to mean "in quantities exceeding a barrel," this being a more reasonable construction than one which made the policy void if there was any quantity, however small, of these articles, on the premises.
2. When insurance companies restrict, by conditions subsequently stated, the liability which the policy in its body appears to create, they should set forth these restrictions in terms which cannot admit of controversy, and should print these restrictive clauses in type large enough to arrest the attention of the assured. Nonpareil criticized as not being so.
The Phoenix Insurance Company of Hartford insured goods owned by one Slaughter, in a certain storehouse described in the policy. The policy was on one side of a sheet of paper sixteen inches long by ten wide, the upper seven being left blank for the name of the person insured, and a description in writing of the property insured. Four printed lines, in the type known as minion, * but leaded so as to be sufficiently legible, declared that
"the company agreed to make good as to the assured his loss to the amount insured, to be estimated according to the actual cash value of the property at the time of the loss, and to be paid sixty days after due notice and proofs of the same made by the assured and received at this office, in accordance with the terms of this policy hereinafter mentioned."
Then followed, in a smaller type, not leaded, eight paragraphs, covering the rest of the sheet, and making a solid body of finely printed matter, most of the matter being provisions in favor of the company, some of them restricting the liability apparently incurred in the body of the instrument, and not a few making the policy entirely void. There was abundant room on the sheet, if less blank space had
been left, to have printed all these terms of the policy in a larger type.
The fourth subdivision of these terms ran thus, the size of the type and leading being here reproduced [see typography in U.S. Reports]. The commas and semicolons were the same as here given, though here, for the benefit of the reader's eye, the pointing in some places is made more conspicuous than on the policy itself:
"If the assured shall have or shall hereafter make any other insurance of the property hereby insured or any part thereof without the consent of the company written hereon, or if the above-mentioned premises shall be occupied so as to increase the risk, or become vacant and unoccupied for a period of more than thirty days, or the risk be increased by any means whatever within the control of the assured without the consent of this company endorsed hereon; or if the property be sold or transferred, or any change take place in title or possession whatever, by legal process, judicial decree, voluntary transfer, or conveyance; or if this policy shall be assigned, either before or after a loss, without the consent of the company endorsed hereon; or if the assured is not the unconditional and sole owner of the property; or if the interest of the assured in the property, whether as owner, trustee, consignee, factor, mortgagee, lessee, or otherwise, is not truly stated in this policy; or if gunpowder, phosphorus, saltpeter, naphtha, benzine, benzoin, varnish, benzole, petroleum, or crude earth oils are kept on the premises, or if camphene, burning-fluid, refined coal or earth oils are kept for sale, stored, or used on the premises in quantities exceeding one barrel at any one time, without written permission in, or endorsed upon, this policy, then and in every such case, this policy shall be void."
The goods having been destroyed by fire, Slaughter sued the company, which set up as a plea that
"the plaintiffs, contrary to the terms and provisions of the policy, without the written permission, or permission endorsed on it by the company, did keep gunpowder on the premises and in the said storehouse described where the goods so insured were kept."
The plaintiffs demurred, and the demurrer being sustained, and judgment given against the company, it brought the case here.
Whether or not the plea was good and the judgment rightly given depended, of course, upon the proper construction of the part above italicized of the portion of the conditions of the policy in which it was found. It was contended by the insurance company that keeping gunpowder in the store in any quantity vacated the policy, while the assured insisted that the policy was not defeated if they did not keep more than one barrel at a time. Which was the right conclusion was the matter to be now decided.