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real and $300 on the personal estate. No special agreement with reference to the conditions to which the insurance was made subject was indorsed on said policy, nor any notice given by the plaintiff to the defendant of executions and the proceedings thereon, or of the fact that the property had ceased to be operated as a manufacturing establishment. The defendant denies the right of the plaintiff to recover any part of the amount claimed, upon the ground that the conditions, in regard to encumbering and levying upon the property covered by the policy of insurance and the operation of the establishment were violated. The policy and the conditions therein define or fix the relations between the parties thereto and furnish the measure of their respective rights and liabilities. Courts cannot go outside of the agreements of parties to determine their mutual or reciprocal obligations. To do so would have the effect of imposing terms to which they had not assented, or absolving them from duties which they had voluntarily assumed. It is the province of courts to interpret, and not to make, 45 contracts to ascertain the legal import of the language employed by the parties themselves to express their agreements and not to add to or take from in order to make ideal contracts. Courts are sometimes helpless to prevent the consummation of that which is manifestly unjust, because the party seeking protection incautiously stepped into the snare prepared by the cunning hand of his adversary. The only aid that they can render in dealing with a one-sided and oppressive contract is to resolve every doubt that may arise during the course of the trial in favor of the party upon whom it may bear the hardest. Hard cases are quicksands of the law, of the dangers of which courts have been admonished by oft-repeated experiences. To set about to relieve against the consequences of what may be considered sharp and improvident bargains would inevitably lead to great uncertainty and confusion in the administration of justice. It is needless to describe the effect of such a condition of things in order to appreciate the necessity of avoiding it.

With these elementary principles in view, let us proceed now to examine the contract which is the cause of action in this case, and the relation of the parties as determined by their conduct in regard to the subject-matter thereof. An insurance in relation to property is a contract whereby the insurer becomes bound, for a definite consideration, to indemnify the insured against loss or damage to certain property named in the policy, by reason of certain perils to which it may be exposed. It is com

petent for the insurer to prescribe the terms and conditions upon which it will take the proposed risk, provided they are not illegal nor contrary to public policy. The acceptance of these conditions consequently imposes upon the insured the duty of a substantial compliance therewith, and any neglect thereof in any material respect, unless waived or condoned, will relieve the insurer from liability in case of loss, whether it can be traced to such neglect or not. One reason for this is, that he has, by agreeing to the terms upon which the insurance was made, shut the door against any inquiry as to the cause of the loss. Another and a more general reason is, that 46 when a right and a duty springing from a contract are united in one of the parties thereto, he must show a performance of the one before he can assert the other. Are the conditions referred to illegal or contrary to public policy? They are neither. They are not forbidden by any legal precept, either written or unwritten. Certainly, clauses or conditions inserted in a contract, which induce caution as to conduct of either party in respect to the subject matter thereof, cannot be held as being repugnant to any of the rules and maxims relating to the broad subject of public policy, be cause anything that stimulates diligence and good faith between contracting parties is highly promotive of the general, as well as the individual, good. The tendency of such limitations upon the liabilities of insurance companies is to diminish the needless destruction of property, and obviate the necessity of increasing the rates of insurance to a point where they are intolerable, in order to cover the disbursements made to unworthy and dishonest persons. The increased cost of insurance, it must be admitted, is due in part to the increased risk occasioned by the fraud or neglect of a certain class of people owning insured property. The good have to suffer for the conduct of the bad. The honest and careful portion of every community have to pay for the carelessness and malafides of their imprudent and evil-minded neighbors. Those who insure, as the plaintiff in this case did, for protection against unavoidable loss and accident, can well afford to submit to the requirements of the most rigid conditions for the sake of curtailing losses which are the result either of gross neglect or the torch of the incendiary. The condition prohibiting encumbrances and levies without the consent of the defendant, declaring the policy to be void in case of a breach thereof, is not only legal and conformable to public policy, but reasonable and proper. When we consider the circumstances and business methods of not a few men, and the motives that influ

ence them in regard to their financial affairs, the object of such conditions becomes quite manifest. So long as the insured property remains in a condition in which its preservation is of more interest to the owner than its destruction, there is no inducement to court or 47 invite the peril against which it is protected by the insurance. The substantial interest which the insured has in the property is on the side of care and diligence, and operates as a guaranty of good faith in his conduct. But when it becomes encumbered to such an extent that the encumbrances are equal to or in excess of its value, the motive to caution and vigilance ceases. To protect against just such a contingency as this, such conditions are incorporated in nearly if not all policies of modern date. The condition forbidding the cessation of the operation of the establishment without the consent of the company is also reasonable and proper. The company had a right to stipulate for the care and supervision of skilled workmen necessarily employed in running the concern during the customary working season, and to make their liability dependent upon the fulfillment thereof. The conditions and circumstances that existed at the time the insurance was effected may have been one of the considerations that influenced the company in determining to take the risk. To provide, therefore, for their continuance or preservation was entirely consistent with the conduet of a prudent and reasonable man. Now, as forfeitures are not favored, these and similar conditions are always construed strictly, so that the party claiming a forfeiture by reason of a violation thereof will not be permitted to deprive the other party of the benefits of the right to indemnity for which he contracted, if there is any doubt or uncertainty as to the terms of such conditions, the extent of their application, or the acts which constitute the alleged breach. Freedom from ambiguity in both these respects is absolutely essential to the maintenance of a plea in bar in an action to recover a loss covered by the policy in which such causes are contained.

As the rights of the insurer, then, under the conditions in regard to liens, are strictissimi juris, they cannot be held to apply to involuntary encumbrances, such as tax liens and judgments. procured in invitum, because the insured cannot control the action of the government or his creditors, either as to time or place, within the limits of the law. To sanction the forfeiture of a right upon 48 failure to communicate notice of an event of which the insured could have no knowledge would shock the dullest sense of justice. They must, therefore, be restricted to volun

tary encumbrances in this and similar cases. According to the same rule of construction, neither does the violation of the conditions which we are now considering render the policy absolutely void, but voidable only at the election of the insurer. That being so, the right of avoidance may be waived either by express agreement or necessary implication arising from the acts of the parties after notice of the breach. The clauses in the policy which I have said operate as a restriction upon the liability of the defendant are conditions precedent and subject to the principles limiting their force and application, and, when unperformed, stand as an effectual barrier against the plaintiff's right to re

cover.

Let us now consider the facts in relation to these conditions. That the plaintiff gave mortgages and confessed judgments that bound all its real estate without first having obtained consent of the defendant thereto, and that no express agreement was ever made waiving the effect thereof upon the policy as a subsisting contract, are not disputed; neither is it denied that the contract against encumbrances is valid or that the creation of such liens constitutes a breach of the same. The counsel for the plaintiff insists only upon a strict adherence to the rule which requires a resolution of all doubts, whenever they arise, in favor of the plaintiff, and that the acts of the defendant should be construed into a waiver of the forfeiture and a recognition of the plaintiff's right to recover. As to the first proposition, the court assents. As to the other, it cannot to the extent claimed. Suppose we concede that the defendant, by its act, did waive any cause of forfeiture on account of any encumbrance created prior to July 7, 1888, the date of the last renewal of the policy; yet it nowhere appears in the statement of facts that the defendant had any notice of the judgment in favor of Hazel & Penne will for $1,718.67, nor of the one in favor of Caleb S. Pennewill et al. for $5,000, obtained by confession against the plaintiff September 7th and 8th respectively, nor of the mortgages collateral 49 to the last-named judgment, recorded contemporaneously therewith; and, if it had, it does not appear that it did any act which, by necessary implication, estops it from setting up the violation of such condition in the manner stated as a defense in this suit. It follows, then, that no loss occasioned by the destruction of the real property can be recovered under this policy.

The reason assigned for avoiding the insurance on the realty might be adopted as a sufficient reason for avoiding the insurance on the personalty; but as the plaintiff's counsel insisted with so

much earnestness and ability that the levies made on the personal property did not amount to a breach of the prohibition in regard to the same, as they did not involve the removal of it from the possession of the plaintiff, it is proper that serious thought should be given to their contention. The clause under which it is made is as follows: "If the property hereby covered shall be levied upon or taken into possession or custody under any proceeding in law or equity . . . . all insurance upon this policy shall thereupon cease." The supreme court of the state of Pennsylvania, in the case of Commonwealth Ins. Co. v. Berger, 42 Pa. St. 285, 82 Am. Dec. 504, decided that a levy made without the removal of the property from the possession of the owner, under a condition in the policy expressed in language precisely like the one herein referred to, would not avoid the insurance. This case is cited as conclusive. The opinion of the court proceeds upon the idea that the phrases "levied upon" and "taken into possession or custody" are exact equivalents, the latter being used to explain and limit the former; that is, the phrase "taken into possession or custody" is employed to restrict the phrase "levied upon" to an actual seizure of the property and dispossession of the owners, according to the common-law method of making a levy. A levy evidenced by a mere memorandum or inventory and ap praisement of the property intended to be levied upon, or a eonstructive seizure thereof only, was not, therefore, a violation of the condition. The reasoning of the learned judge who delivered the opinion in this case would be very sound and unassailable if there were not other words connected with the 50 latter alternative to give it a broader and a different significance. In the formation of his premises they seem to escape his attention. When we take into consideration the entire phrase "taken into possession or custody by any proceeding in law or equity," the equivalence between it and the phrase "levied upon" disappears. It means more than a levy. The idea of the term "levy" includes a constructive, as well as an actual, taking into possesion of property under execution process. Now, as the alternative expression refers to some other mode of taking property into custody than by levy, namely, by any legal or equitable proceeding, it follows that the phrase "levied upon" cannot mean the same as the phrase "taken into possession or custody by any proceeding in law or equity." No doubt the latter was intended to cover a seizure of property by attachment process, sequestration, or other modes not present in the mind of the draughtsman. It certainly never was intended as a means of interpreting, explain

AM. ST. REP., VOL. LXV.-13

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