Court Opinion

ID: 6856351
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:42:38.252813+00
Date Added: 2024-06-11T16:05:10.065457
License: Public Domain

WOOLLEY, Circuit Judge
(dissenting).
The Insurance Company, conceding liability for the first fire, resisted payment for losses in the second on the admitted fact that at the time it occurred the property had not been occupied for forty days and on terms of the policy which provide in such case that the insurer is not liable. The insured, having agreed to this provision and recognizing its legal force, replied that it had been waived by an oral agreement. The Insurance Company answered by showing that it had not exercised its option to repair and by pointing to a clause in the policy which provides, inter alia, that no “provision or condition (of the policy shall) be held to be waived unless such waiver shall be in writing added heretp.” The insured then came back and said, even so, the forty days’ provision of the policy as to vacancy was waived by the fact- that the premises were made uninhabitable by the first fire. The learned trial judge, being of the plaintiff’s view on both points and having admitted testimony of an oral waiver, submitted to the jury two questions: One, under Pennsylvania decisions, whether the Insurance Company had waived the vacancy provision of the policy by oral agreement; the other, under Nebraska decisions and corresponding instructions, whether the property was uninhabitable after the first fire and, if so, whether, in consequence, there was a waiver of the provision as to vacancy. The plaintiff had a verdict for damages for both fires. As the Insurance Company admitted liability in damages for the first fire, the controversy revolved around its liability in damages for the second and it was to that liability the questions submitted were directed.
I think it was error to submit either of them.
Whether the first question — oral waiver— could be validly submitted rests primarily on another question: Is the construction of a contract of fire insurance one of state law or general commercial law?
Except perhaps when a question arises under a state statute it is one of general commercial law upon which federal courts are at liberty to entertain an independent opinion. Hartford Fire Ins. Co. v. Nance (C. C. A.) 12 F.(2d) 575; Home Insurance Co. v. Scott (C. C. A.) 46 F.(2d) 10; Cain v. Commercial Pub. Co., 232 U. S. 124, 34 S. Ct. 284, 58 L. Ed. 534; and particularly Meigs v. London Assurance Co. (C. C.) 126 F. 781, where Pennsylvania and federal rules were in conflict, Judge McPherson followed the federal rule and this court affirmed him. Id., 134 F. 1021. Federal courts, so far as I can find, have uniformly expressed opinions, which they have formulated into a federal rule, that where a contract of insurance forbids a waiver of any of its provisions except in writing, parol evidence to establish an oral waiver is not admissible. Meigs v. London Assurance Co., 134 Fed. 1021 (C. C. A. 3rd), *753affirming (C. C.) 126 F. 781; Fidelity-Phenix Fire Ins. Co. v. Queen City Bus & Transfer Co. (C. C. A.) 3 F.(2d) 784; Christian & Brough Co. v. St. Paul Fire & Marine Ins. Co. (C. C. A.) 5 F.(2d) 489; Hartford Fire Ins. Co. v. Nance (C. C. A.) 12 F.(2d) 575; Forkner v. Twin City Fire Ins. Co. (C. C. A.) 19 F.(2d) 419; Great American Ins. Co. v. Johnson (C. C. A.) 25 F.(2d) 847.
The second question — waiver by consequences — arises under a provision of the policy that the “company shall not be liable for loss or damage occurring — (f) while a described building * * * is vacant or unoccupied beyond a period of ten days,” extended by another clause to forty days. This provision is a mutual recognition of an unaccepted risk. By its terms the parties agreed that the fact of vacancy, not its cause, made the provision operative and determined the liability of the Insurance Company.
Nevertheless, the validity of the submission of the second question as to liability of the Insurance Company for the second Are when the property had remained vacant, because uninhabitable, for a greater period than allowed by the contract of insurance is, under the authorities, debatable. The authorities, however, are meager. There are only three reported eases on the subject. Two are the Nebraska eases on which the learned trial court relied. Lancashire Ins. Co. v. Bush, 60 Neb. 116, 82 N. W. 313; Schmidt v. Williamsburgh City Fire Ins. Co., 98 Neb. 61, 151 N. W. 920. The other is a New Jersey case. Kupfersmith v. Delaware Ins. Co., 84 N. J. Law, 271, 86 A. 399, 45 L. 11. A. (N. S.) 847, Ann. Cas. 1914C, 1172. The Nebraska decisions hold that in case of two fires on the same premises the fact that the first has made the premises uninhabitable amounts to a waiver — and nullification — of a provision of the policy requiring occupancy as a condition of the company’s liability. Against that conclusion I find myself moved by the legalistic logic of the New Jersey decision, as well as by the general observation that it is not the province of a eourt to make a contract for parties to a suit, or to modify the one which they have themselves deliberately made because it may appear that they might have made one that would have been more equitable or more advantageous. Page v. Sun Ins. Office (C. C. A.) 74 F. 203, 33 L. R. A. 249; Meigs v. London Assurance Co., supra. Like the court in the New Jersey case (with a Nebraska decision before it) I am constrained to restrict an interpretation of the contract in suit to what the parties said and utterly disregard what they might have said but did not say. As I subscribe fully to the reasoning of Chief Justice Gurnmere, I stand on the New Jersey decision under which the second question could not bo submitted.
I think the learned trial court committed two errors in instructing the jury on the questions under review, and that, as the jury founded their verdict on one or the other or on both, the judgment should be reversed.