Liverpool & London & Globe Ins. Co. v. NEBRASKA S. WHSES.

• Decision Date: 27 April 1938
• Docket Number: No. 11003-11009.,11003-11009.
• Citation: 96 F.2d 30
• Parties: LIVERPOOL & LONDON & GLOBE INS. CO. OF LIVERPOOL, ENGLAND, v. NEBRASKA STORAGE WAREHOUSES, Inc., et al., and six other cases.
• Court: U.S. Court of Appeals — Eighth Circuit

96 F.2d 30 (1938)

LIVERPOOL & LONDON & GLOBE INS. CO. OF LIVERPOOL, ENGLAND,

v.

NEBRASKA STORAGE WAREHOUSES, Inc., et al., and six other cases.

Nos. 11003-11009.

Circuit Court of Appeals, Eighth Circuit.

April 27, 1938.

Herbert W. Hirsh, of Chicago, Ill., and Winthrop B. Lane, of Omaha, Neb. (George Wharton Pepper, of Philadelphia, Pa., and Arthur R. Wells, of Omaha, Neb., on the brief), for appellants.

F. S. Gaines, of Omaha, Neb. (Sidney W. Smith, C. F. McLaughlin, Gerald M. Vasak, and James C. Kinsler, all of Omaha, Neb., on the brief), for appellees.

Before GARDNER, SANBORN, and THOMAS, Circuit Judges.

THOMAS, Circuit Judge.

The appellee owned a warehouse building in Omaha, Neb., in which a fire occurred about 5:30 o'clock on the afternoon of February 3, 1932. Eight separate actions at law were brought in the state court against eight different companies carrying fire insurance upon the building. In these cases it was alleged that the building was burned and partially destroyed. One of the cases was tried in the state court and a jury found that the damage to the building amounted to $14,500, and the defendant in that case paid and discharged its share of the judgment. In the seven remaining cases the appellee on October 24, 1934, filed amended petitions claiming a total loss under all the policies and praying for damages in excess of $3,000 in each case. The appellants, defendants in the seven cases, then removed them to the District Court. A second amended petition was then filed in No. 11003 against the appellant Liverpool & London & Globe Insurance Company, but not in the other cases. In this pleading a total loss was claimed, and it was alleged that the building had been condemned by the city of Omaha. Issue was joined in this case and liability denied on the grounds that the appellee had violated the provisions of the policy concerning the maintenance of a sprinkler system and that the loss was only partial and not total.

When the case was reached for trial the court on his own motion and over the protests of appellants consolidated the seven cases for trial. At the close of the evidence the court instructed the jury that the appellants had failed to prove negligence of the appellee for failure to maintain the sprinkler system and that the companies had waived this defense. The cases were submitted to the jury only upon the questions of whether the loss was partial or total and the amount of the damages. A verdict finding total loss was returned for appellee upon which judgments were entered for the full amount of the policies, with interest and attorneys' fees.

The appellants seek reversal of the judgments on the grounds: (1) That the court erred in consolidating the seven cases for trial over appellants' protests; (2) that the court erred in taking from the jury the question of whether or not appellee had violated the requirements of the sprinkler clauses attached to the policies; (3) that the evidence is not sufficient to sustain a verdict of total loss; and (4) that it was error to admit in evidence over objections the proceedings taken by the city council of Omaha in condemnation of the insured building long subsequent to the fire.

Appellants' first contention can not be sustained. Section 734 of 28 U.S.C.A. provides that "When causes of a like nature or relative to the same question are pending before a court of the United States * * * the court * * * may consolidate said causes when it appears reasonable to do so." Under this section the consolidation of actions is within the sound discretion of the court. Mutual Life Ins. Co. v. Hillmon, 145 U.S. 285, 12 S.Ct. 909, 36 L.Ed. 706.

It is claimed the order of consolidation constituted abuse of discretion because in six of the cases the issues were not made up until after the trial commenced and they had not been noticed for trial at that term. Rule 2 of the District Court provided: "Assignment of Cases for Trial. — On or before ten days prior to the first day of every term, notice in writing shall be filed with the clerk by either party or their attorneys, in causes then pending on the law side of the court, of any and every case which they may desire to have tried during the term; and no other case on the law docket will be called for trial or tried at that term except by consent of counsel, or for cause shown. And no case should be noticed for trial unless the issues could have been joined under the State statute, prior to the first day of the term."

Assuming, without deciding, that under the circumstances the order was a technical violation of the rule, it cannot be said that such error was prejudicial. The cases were all pending before the court. They all involved the same issues and the same facts. The testimony was the same in all, and they are brought here on the same bill of exceptions. Had all the cases been noticed for trial no valid exception could have been taken to the order of consolidation. If the cases are remanded for a new trial there can be no objection to trying them together. The same attorneys appear in all the cases; and no prejudice appears to have resulted to them. Conceding arguendo that the order of consolidation was improvident in the absence of a continuance until the issues could be made up in all the cases, the record discloses that no request was made for a continuance on that ground; and, since some inconvenience only resulted from the order, appellants are not entitled to a reversal for this alleged error.

The refusal of the court to submit to the jury the issue in respect of the sprinkler system is complained of most emphatically. Each of the policies contains the following clause, or one substantially like it: "This policy being written at a reduced rate, based on protection of the premises by automatic sprinklers, it is a condition of this policy that insofar as the sprinkler equipment and the water supplies therefor, are under the control of the insured, due diligence shall be used by the insured to maintain them in complete working order, and that no change shall be made in said water supplies without the consent of this Company in writing."

Appellee admits that on the day the fire occurred the sprinkler system was out of repair, but contends that due diligence was used to maintain the system in complete working order as the policies require. It therefore becomes necessary for us to review the evidence upon this matter. Since the question was taken from the jury we must take that view of the evidence, with such reasonable inferences as may be drawn therefrom, in a light most favorable to the appellants. Bradford-Kennedy Co. v. Fred G. Clark Co., 8 Cir., 43 F.2d 675.

The testimony shows that the insured building was a six-story warehouse building constructed in 1892. The walls were made of brick and lime mortar, and the floors, beams, and joists of wood. It was protected by two sprinkler systems, one installed in the basement and first three floors and the other in the upper three floors. The system was a dry-pipe valve type intended for use in buildings which are not heated and where water might freeze if permitted to stand in the pipes in cold weather. The pipes, with sprinkler heads distributed throughout the building, are filled with air maintained at a given pressure. A fire acting on the sprinkler head releases the air, thus moving a value and connecting the pipes with the city water system. The water will then pass through the sprinkler head in that part of the building where the fire occurs.

W. A. Larson, a witness called by appellants, testified that he was foreman in the warehouse, that he had general supervision of the sprinkler system, and that he had been employed in that capacity for 18 years. On the day before the fire occurred he discovered that the air valve was leaking. If the leak was sufficient it would trip the valve and permit the water to pass into the pipes. He turned off the system by closing the gate valve to the city main and took out the leaking valve to reseat it. During the period of his employment he had repaired the valve several times. On this occasion he found the valve somewhat corroded and he proceeded to smooth it down by rubbing it with a soft brick to make it air tight. Not having completed the job that night he left the valve out and the water cut off, and it was still out when he left the building the next evening just before the fire occurred. On the afternoon of the fire he left the work on the valve and unloaded a car of merchandise.

W. H. Sadler, a fire prevention engineer, was called as a witness by appellants. He was a representative of the manufacturers of the sprinkler system. He testified that he had examined the system several times before the fire; that he examined it the morning following the fire; that if a leak occurred in an air valve it was necessary to regrind and reseat it; that he could regrind and reseat a valve in from 2 to 8 hours, depending upon the condition of the valve; and that he would not say that a valve could not be ground by rubbing it with a soft brick, but that he would hate to do so. He explained what he regarded as the proper method.

Lucius Dunaway, employed by the Nebraska Inspection Bureau as a fire protection engineer, testified that he had inspected the sprinkler system in question several times and was familiar with it. He stated that the valves would corrode over a sustained period and might cause a leak, in which case it would have to be smoothed down. He made his last inspection on January 20, 1932, 13 days prior to the fire. At that time he found the system turned off and a sprinkler head in the south portion of the first story of the building broken as a result of freezing. He called the situation to the attention of Gilbert Magaret, manager of the building. He made an examination on the morning following the fire and found the same sprinkler head still out. He also testified that he talked with...