Rizzuto v. National Reserve Insurance

GOODELL, J. Appellants sued to recover a fire loss of $1,839.48, on an insurance policy written by respondent. Judgment, entered on the findings, was in favor of the insurer for its costs, and this appeal was taken.

Appellants own a frame store building in San Jose. On July 4, 1945, respondent issued the policy in suit covering the property for $2,600 “while occupied only for barber shop purposes.” Appellant Louis Rizzuto is a barber and his shop is in the southerly half of the store. Appellants rented the northerly half to one Herman Yeager, who occupied it as a pick-up cleaning shop. At the time of the fire, May 6, 1946, the premises were occupied by both shops.

The court found that the building was damaged to the extent claimed, $1,839.48, and that proofs of loss were furnished.

In Yeager’s half of the store no cleaning was done. It was simply an agency or depot to which patrons brought their [145]clothes, whence they were sent out to be cleaned or dyed, and when returned “rumpled,” they were pressed and hung up, to be called for on a “cash and carry” basis. The equipment therein was a gas heater (with a pilot light), a boiler, and steam pressing apparatus. It was this half of the store that was damaged by fire. The barber shop was damaged slightly by water.

Appellants’ allegation of performance of all the conditions of the policy on their part to be performed was denied, and the court found in the negative on that issue.

The court found that at the time of the fire the place “was not occupied only for barber shop purposes and that approximately one-half of said building was then occupied for other purposes as a pressing and altering establishment and agency for garment cleaners.”

Appellants contend that there is no substantial evidence to support the finding of their nonperformance. They argue that they paid the premium, that the policy was in effect at the time of the fire and had never been cancelled nor any part of the premium returned, and that they made due and timely proof of loss. All this is true, but the condition precedent to their recovery which they did not and could not prove was that the building was damaged “while occupied only for barber shop purposes.”

In Mawhinney v. Southern Ins. Co., 98 Cal. 184 [32 P. 945, 20 L.R.A. 87], the coverage was for loss or damage by fire to a harvesting outfit “. . . all while owned by assured . . . and operating in the grain fields and in transit from place to place in connection with harvesting in Fresno County ...” When destroyed by fire it was in the yard of a blacksmith shop in Fresno, awaiting repairs. In deciding in favor of the insurer the court said: “An insurer is not liable, except upon proof that the loss has occurred within the terms of the policy, and when making the policy he is at liberty to select the character of the risk he will assume. If the terms of this risk are distinct and without ambiguity, the assured cannot complain if the risk assumed does not cover the loss. The locality of the property, as well as its custody, and the incidental care that by reason of such locality and custody the property will naturally receive, are elements which enter into a consideration of the risk to be assumed, and if they are made a part of the conditions of the policy they must be observed by the assured as fully as any other conditions before the insurer can be made liable for a loss. In the present case the insurer would reasonably assume that the harvester would be under