Court Opinion

ID: 9336210
Source: CourtListenerOpinion
Date Created: 2022-12-15 21:50:20.175832+00
Date Added: 2024-06-11T17:15:12.055401
License: Public Domain

SANBORN, Circuit Judge
(dissenting). Is opening a Areproof safe in one’s place of business in which a book is securely locked, and either taking the book out and losing it, or leaving it in an open safe so that it is burned up by an approaching Are which destroys the building in which it is situated, the performance of an agreement to keep the book “securely locked in a Areproof safe, * * * or in some secure place, not exposed to a Are which would destroy the house where such business is carried on”? The opinion of the majority answers this question in the affirmative. I have been unable to resist the conclusion that it should be answered in the negative. The book certainly was not kept securely locked in a safe, nor was *318i t kept "in some secure place not exposed to a ñre which would destroy the house where such business is carried on.” On the other hand, the safe was unlocked, and the book was either lost or was actually exposed in the open safe or elsewhere to the fire which burned the house where the business was conducted, and was thereby destroyed. Is losing a book keeping it? Is exposing it to a fire by which it is destroyed keeping it in some secure place not exposed to that fire? It is said that the insured had the option to keep the book securely locked in the safe, or in somé secure place not exposed to a fire which would destroy the business house, that this was a continuing option, and that they complied with their contract if they lost the book in transit in the night while they were attempting to exercise this option, and to take it from the safe to another secure place. But is this argument sound? The contract was that “at night, and at all times when the store mentioned in the within policy is not actually open for business,” they would keep the book locked in the safe, or in some secure place not exposed to a fire which would burn the building in which the safe was situated. It was that they Would keep the book in one of two secure places during all of every night while the store was closed. It was not that they would keep it in one of those places, or in transit between them. They undoubtedly had the right each day to choose in which place they would keep their book during the coming night, but, after the night had come, and after the store was closed, if they took the book from the place which they had selected, and exposed it to the fire against which they had agreed to guard it, I see no escape from the conclusion that they violated their contract, because they no longer kept it in either of the secure places specified; and this, whether they removed it with the intention of transferring it from one place to the other or with some other purpose. They were not keeping it in either place while they were transferring it from one to the other. The contention of the majority here proves too much. If the insured could exercise their option once during the night, and after the store was closed, and expose the book to the danger of fire, they could exercise it many times, and could' thus keep the book continually in transit, and in neither of the safe places where they agreed to have it during the entire night. In my opinion, an agreement to keep an article in one of two specified secure places during certain hours of the night is not performed by losing it in transit between them during those hours.
There is another proposition of the majority to which I cannot yield assent. It is that an agreement to safely keep and to produce a book upon the trial of a lawsuit is not broken by a failure to keep and produce it, unless that failure is due to a wrongful or fraudulent act, or to the culpable negligence of the defaulter. The agreement of the insured here was as. clear and unambiguous as the English language could make it. It was that they would keep the inventory securely locked in the safe, or in the other secure place specified, each night; that they would produce it in case of a loss under the policy, and that, if they failed to do so, no action upon the policy should be maintained. The}' failed to keep it in either of the places named in the agreement, and they failed to produce it. It is said, however, that they never *319meant to agree to keep it or produce it; that they only ini ended to contract that they would not by any wrongful or fraudulent act or by any culpable negligence of theirs fail to keep and produce the book; that the contract should be construed according to this latter intention; and that, as the insurance company failed to prove any such fraudulent act or culpable negligence of the insured, there was no evidence of a breach of the agreement, although the defendants in error utterly failed to do the acts which, by the plain terms of the written contract, they agreed to perform. But there is no evidence of the intention of the parties to this contract except the policy itself. The policy contains no agreement that the defendants in error will not be guilty of fraudulent or wrongful acts or of culpable negligence in their care of the book. It nowhere mentions these terms, or makes any reference to the subjects which they suggest. It is only a bald, plain contract to keep the book in one of the places specified, and to produce it. The terms of this agreement seem to me too plain for construction. In my opinion, they bring these cases under the familiar rules that, “where the parties have deliberately put their engagements into writing in such terms as to import a legal obligation without any uncertainty as to the object or extent of such an engagement, it is conclusively presumed that the whole engagement of the parties, and the manner and extent of their undertaking, was reduced to writing” (Thompson v. Libby, 34 Minn. 374, 377, 26 N. W. 1; Barnes v. Railway Co., 4 C. C. A. 199, 54 Fed. 87, and 12 U. S. App. 1, 7; Wilson v. Ranch Co., 20 C. C. A. 244, 73 Fed. 994, and 36 U. S. App. 634, 643), and that “contracts of insurance, like other contracts, are to be construed according to the sense and meaning of the terms which the parties have used, and, if they are clear and unambiguous, their terms are to be taken and understood in their plain, ordinary and popular sense” (Imperial Fire Ins. Co. v. Coos Co., 151 U. S. 452, 463, 14 Sup. Ct. 379; Fred J. Kiesel & Co. v. Sun Ins. Office of London, 31 C. C. A. 515, 88 Fed. 246). Under these rules I am unable to find anything in this contract to indicate that the parties to it intended to make any other agreement than that which it so clearly expressed. Would it be any defense to an action upon an absolute promise to pay a debt ihat the debtor only intended to agree that he would not be guilty of any fraudulent act or culpable negligence which would prevent him from paying it, and that he had not been? Would it be I he province of the court, in the absence of other evidence, to conslrue a contract to build a house, to dig a well, to sell a horse, or to do any other act, into an agreement not to commit any fraudulent act or culpable negligence which would prevent the performance of the contract? The rule that courts may not make new contracts for parties which they never considered, and to which their minds never assented, answers these questions. The same rule seems to me to apply to an unconditional agreement to keep in a specified place, and to produce, a book. I can find in such a contract no evidence that the parties to it intended to make any other agreement. I am unable to see in it any proof that they intended that the insured should not agree to keep and produce the book, but that they should merely contract not to commit any fraudulent act or culpabíe *320negligence that would prevent them from keeping and producing it. The latter contract seems to me to be in the teeth of the former. It destroys the written agreement, and I cannot persuade myself, in the face of its plain terms, that the minds of these parties ever met on a contract to so effectually abrogate it.
If this is the correct view of the meaning of this contract, it is immaterial whether its breach was caused by mistake, carelessness, from culpable negligence, or by an honest purpose to violate the agreement. By the terms of the agreement the insured.voluntarily took upon themselves the chances of the effects of their own imprudence, carelessness, purpose, and performance. The record conclusively shows that their failure to perform their contract was not caused by any act of G-od or the public enemy, or by the interposition of any force which made it impossible for them to fulfill it. The breach is therefore without legal excuse, and its inevitable consequence follows. The agreement was that no action should be maintained upon the policies if the book was not kept and produced. It is conceded on all hands that it was not kept, and that it was not produced; and, in my opinion, the insured were estopped by their agreement and by this fact from maintaining any action upon the policy. This view of the meaning and effect of the “iron-safe clause” of policies of insurance is sustained by the following authorities, which hold that it is “an express promissory warranty in the nature of a condition precedent,” and that a strict compliance with its terms is indispensable to a recovery upon a policy which contains it: Assurance Co. v. Altheimer, 58 Ark. 565, 575, 25 S. W. 1067; Insurance Co. v. Parker, 61 Ark. 207, 215, 32 S. W. 507; Kelley-Goodfellow Shoe Co. v. Liberty Ins. Co. (Tex. Civ. App.) 28 S. W. 1027, 1031; American Fire Ins. Co. v. First Nat. Bank (Tex. Civ. App.) 30 S. W. 384, 385; Ostr. Ins. § 238; and Landmann v. Insurance Co., 18 Ins. Law J. (La.) 813, 815, in which the court pertinently said:
“In this case there is no room for interpretation or construction. The language used in expressing the clause is free from ambiguity. It is printed in large type, annexed to the face of, and is clearly a part of, the policy. Its purpose was to enable the company, in ease of loss, to procure satisfactory evidence of the extent of the loss, to protect it against unfounded augmentation of the value of the property destroyed, and to enable it to obtain other evidence than that of the assured and his employes, however honest and correct they may be, of the damage sustained. Its purpose was, also, to enable the assured to make his loss mathematically certain, and protect him against unfounded deductions. It was the plain intention of the parties that in the case of loss the books were to be the basis of the adjustment, and to enable them to be produced it was made a part of the policy that they should be kept in an iron safe. This the assured promised to do. The iron-safe clause in the policy is a promissory warranty. Being a warranty, — a part of the contract,— it is in the nature of a condition precedent to a right of recovery, and the parties whose rights are dependent upon such a condition must show they have performed it. ‘Agreements legally entered into have the effect of laws on those who have formed them.’ Ilev. Civ. Code, art. 1901. The court cannot add to or detract from the laws they have made for themselves, or say that the promissory warranty shall not be enforced because it is not material. It is enough that the parties agreed to it, however foolish, improvident, or immaterial it may be.”