Hardin Bag & Burlap Co. v. Fidelity & Guar. Fire Corp. of Baltimore

• Decision Date: 17 May 1943
• Docket Number: 36579.
• Citation: 203 La. 778,14 So.2d 634
• Court: Louisiana Supreme Court
• Parties: HARDIN BAG & BURLAP CO., Inc., v. FIDELITY & GUARANTY FIRE CORPORATION OF BALTIMORE.

14 So.2d 634

203 La. 778

HARDIN BAG & BURLAP CO., Inc., v. FIDELITY & GUARANTY FIRE CORPORATION OF BALTIMORE.

No. 36579.

Supreme Court of Louisiana

May 17, 1943

Lemle, Moreno & Lemle, of New Orleans, for applicant.

Lazarus Weil & Lazarus, of New Orleans, for respondents.

PONDER Justice.

The plaintiff, The Hardin Bag & Burlap Company, Inc., brought suit against the defendant, Fidelity & Guaranty Fire Corporation, seeking to recover $665.85 on three insurance policies covering loss and damage caused by sprinkler leakage.The defendant denied liability on the ground that the damage suffered was not within the coverage of the policies.On trial, the lower court gave judgment in favor of the plaintiff.On appeal to the Court of Appeal for the Parish of Orleans, the judgment was affirmed.1 So.2d 830.On rehearing, the judgment was reinstated.5 So.2d 390.The matter comes to us by way of review.

The plaintiff was a tenant in the Maginnis Terminal in the City of New Orleans, occupying the lower floor.On February 26, 1939, a part of the roof of the building, occupied by the plaintiff was blown off by a windstorm; which ruptured the sprinkler system feed pipe; caused a large volume of water to escape to the lower floor of the building; and damaged the plaintiff's goods in the amount of $665.85.

The three insurance policies are similar.Each calls for a coverage of $2,500 at a premium of $16.62 for the term of three years.Each of the policies contains the following provisions '* * * against all direct loss and damage by 'sprinkler leakage,'except as herein provided, * * *'(Italice ours)

'Sprinkler leakage.Wherever in this policy the term 'Sprinkler Leakage' occurs, it shall be held to mean leakage or discharge of water or other substance from within the 'Automatic Sprinkler System' resulting in loss or damage to property described herein.'

'Hazards not covered.This Company shall not be liable for loss or damage caused directly or indirectly by seepage or leakage of water thru building walls, foundations, sidewalks, or sidewalk lights (unless caused by 'Sprinkler Leakage'), or by condensation or deposits on the 'Authomatic Sprinkler System,' or by floods inundation, or backing up of sewers or drains, or by the influx of tide water or water from any source other than the 'Automatic Sprinkler System,' or by fire, lightning, cyclone, tornado, windstorm, earthquake, explosion, including explosion and/or ruptures of steam boilers and fly-wheels, blasting, invasion, insurrection, riot, civil war or commotion, or by military or usurped power, or by order of any civil authority, or by theft, or by neglect of the insured to use all reasonable means to save and preserve the property at and after a 'Sprinkler Leakage'; nor, unless otherwise provided by agreement in writing added hereto, for loss or damage caused directly or indirectly by aircraft and/or aircraft equipment (whether on or off the ground--and not contained in the building(s) described herein) and/or objects falling or descending therefrom.'

At the time that the defendant made application for review, January 31, 1942, there was pending in this Court another suit, American Manufacturing Corporation, Inc., v. National Union Fire Insurance Company of Pittsburg, Pennsylvania, involving identical issues.We withheld action on the application for review pending the determination of the American Manufacturing Corporation, Inc., case, which was handed down on June 29, 1942.14 So.2d 430.On that date, we granted review in this case.We have withheld the application for rehearing in the American Manufacturing Corporation, Inc., case pending our determination of the present case.

After a careful consideration of the application for rehearing in the American Manufacturing Corporation, Inc., case and the review in the present case, we have arrived at the conclusion that our findings in the American Manufacturing Corporation, Inc., case are correct.Consequently, we are reversing the judgments of the lower court and the Court of Appeal for the Parish of Orleans in the present case, for the reason that the holdings are contrary to our determination in the American Mannufacturing Corporation, Inc., case.

In our opinion handed down in the American Manufacturing Corporation, Inc., case, we discussed at length the various authorities cited by the contestants and arrived at the conclusion that the damage suffered by the plaintiff was not covered by the terms of the insurance policy.The terms of the policies involved in this case are identical.No purpose could be gained by restating our views for the reason we are firmly convinced that they are correct.

Since we handed down our original opinion in the American Manufacturing Corporation, Inc., case on June 29, 1942, the Supreme Judicial Court of Massachusetts handed down on December 1, 1942, an opinion in ...