American Steam Boiler Ins. Co. v. Chicago Sugar Refining Co.

• Decision Date: 13 October 1892
• Docket Number: 34.
• Parties: AMERICAN STEAM BOILER INS. CO. v. CHICAGO SUGAR REFINING CO.
• Court: U.S. Court of Appeals — Seventh Circuit

57 F. 294

AMERICAN STEAM BOILER INS. CO. v. CHICAGO SUGAR REFINING CO.

No. 34.

United States Court of Appeals, Seventh Circuit.

October 13, 1892

Statement by BUNN, District Judge.

This action is brought upon a policy of insurance issued by the plaintiff in error to the defendant in error on October 18 1889. The loss for which indemnity was claimed under the policy involved a substantial destruction of the buildings and machinery constituting the sugar refinery of the defendant company in Chicago. On the day the policy in suit was issued the sugar refining company held two other policies in the American Steam Boiler Company, which were surrendered upon the issuing of the one in suit. The facts in the case appear mainly from a stipulation of the parties. Other evidence was taken, but the facts depend principally upon the stipulation, and are undisputed. A jury was waived, and the case tried by the court, which handed down its findings in favor of the defendant in error on November 23, 1891 assessing its damages at the sum of $44,241.09, for which sum judgment was entered.

Only the conclusions of law are reviewable in this court. The essential facts as they appear from the stipulation and from the findings of the court are as follows: The American Steam Boiler Insurance Company was incorporated November 5, 1883 under an act of the state of New York passed January 24, 1853, and certain other acts amendatory thereof. On the 18th day of October, 1889, it issued to the defendant in error, the Chicago Sugar Refining Company, a policy as follows:

'PERFECTED BLANKET CONTRACT POLICY.

'Policy No. A15,504.

'Expires October 17, 1890.

'Location, Chicago, Ill.

'American Steam Boiler Insurance Company, of New York.

'Servimus Sevare.

'Principal Offices:

'Equitable Building, 120 Broadway, New York.

'Cash Capital, $500,000.00.

'Name of Assured, Chicago Sugar Refining Co.

'Amount Insured, $250,000.

'Premium, $1,250 payable upon delivery of policy, by check to order of the Company.

'Form 301.

'Agents.

'Thatcher & Voight,

'Mgrs. Western Dep't,

'Phoenix Building,

'Chicago.

'Cash Capital $500,000.00.

'No. A15,504.

$250,000.

'American Steam Boiler Insurance Company, of New York.

'In consideration of the application herefor, and the sum of surrender of Pols. 65,326 and 65,327 and four hundred and fifty dollars, The American Steam Boiler Insurance Company do insure Chicago Sugar Refining Co. and their legal representatives to the amount of Two Hundred and Fifth Thousand Dollars, as follows, viz:

'Perfected Blanket Contract No. 300.

'Approved by the Insurance Department of the State of New York, Sept. 16, 1889. Copyrighted, 1889, by The American Steam Boiler Insurance Company.

'Upon the 21 steam boilers and 34 filters, tanks, converters, etc., on the premises occupied by the assured as Sugar Refinery, situate in the City of Chicago, State of Illinois, and upon the steam pipes, the 9 engines, the shafting, belting, hangers, pulleys and the two elevators connected therewith and operated thereby, against explosion and accident, and against loss or damage resulting therefrom, to the property, real and personal, of the assured, and to all property of other persons for which the assured may be liable.

'And against accidental personal injury and loss of human life, for which injury or loss of life the assured may be liable, to his employes or to any other persons whomsoever, and which shall be caused by said boilers or any machinery of whatever kind, connected therewith or operated thereby.

'But it is understood:

'That this company shall not be liable for any loss unless amounting to One Hundred Dollars or more, except for a loss resulting from injury to person; and

'That this company's entire liability for the injury or loss of life of any one person shall in no event exceed $5,000; and

'That this is a policy of Indemnity only.

'And this policy shall only cover losses sustained by the assured as above specified, between the seventeenth day of October, eighteen hundred and eighty-nine, to the seventeenth day of October, eighteen hundred and ninety, at 12 o'clock, noon, to be paid at their offices in the City of New York, within ten days after the receipt of proof of loss has been duly verified by the assured and accepted by the company, such indemnity payment being subject to the covenants and agreements herein; and this policy is issued and accepted upon the condition that all the provisions printed upon the back of this policy are accepted by the assured as part of this contract, as fully as if they were recited at length over the signatures hereto affixed.

'In Witness Whereof, The American Steam Boiler Insurance Company, of New York, have caused these presents to be signed by their President and attested by their Secretary, in the City of New York, but shall not be valid nor will any indorsement or agreement be binding unless countersigned by the duly authorized and regularly commissioned managers for Western Department.

[Seal]

'Wm. K. Lothrop, President.

'V. R. Schenck, Secretary.

'Countersigned at Chicago, Illinois, this eighteenth day of October, 1889.

'Thatcher & Voight, Managers.'

On the back of the policy, among other covenants and conditions, all made a part of the policy, were the following, which are the only ones material to this case:

'(2) That at all reasonable times the inspectors of this company shall have access to said boiler or boilers, and the said engines, elevators, and machinery connected therewith, on which safety depends; and ample facilities shall be afforded, whenever requested, to said inspectors, for a thorough examination of said boilers, and for the indicating of the said engines, and for the inspection of the said elevators and machinery.'

'(3) That by the term 'explosion,' as used in this policy, is to be understood a sudden and substantial rupture of the shell or flues of the boiler or boilers, caused by the action of steam, and no claim shall be made under this policy for any explosion or loss caused by the burning of the building or steamer containing the boiler or boilers, engines, elevators, or machinery, or for any loss or damage by fire resulting from any cause whatever; nor for any loss or damage which may occur during any invasion, insurrection, riot, or civil or military commotion, or by theft or robbery, or by neglect of assured to use all possible means to save and preserve the property for further loss or damage after the explosion or accident has occurred.'

The following facts were found by the court in regard to the origin of the disaster:

'That on the 27th day of March, 1890, an explosion, accident, or disaster, or whatever name may properly be applied, occurred upon the premises referred to in the policy, the result of which was a substantial destruction of a portion of the machinery, boilers, engines, filters, tanks, converters, etc., described in the policy, and of the buildings in which they were contained, and in loss of life and injury to various persons working in and about the premises, who were employes of the plaintiff.'

That the facts as to the origin of the disaster and its cause are as follows:

'The premises involved were used by the plaintiff in the manufacture of starch and dextrine, and consisted of two buildings, viz. the mill house, a one-story brick building, in dimensions about twenty-five feet wide by forty feet long, and the drying house, a two-story brick building, about two hundred feet long and fifty feet wide, the latter containing two dextrine kilns, in which prepared starch was exposed to steam heat in oven-like rooms about eight feet high, eight feet in depth, and eighteen feet wide, bricked in on the sides and top and closed in front by an iron door. In these rooms or kilns were steam pipes connecting with steam boilers, by means of which the steam heat was made available in the kilns or rooms in the process of manufacturing dextrine. High temperature is necessary to the success of the process.'

'That on the 25th of March, 1890, a fire was observed by the employes of the plaintiff, confined to one of the kilns above mentioned. The fire was extinguished by the workmen, by directing upon it a stream of water through a two and one-half inch hose. The next day, March 26th, a small fire was again observed and extinguished. Afterwards, on this day an endeavor was made to clean the kiln of the charred and wet mass or crust formed by the charred starch and the water which had been thrown into the kiln on the 25th, but it was not thoroughly removed, some of the crust having been left in the kiln under the steam pipes, and especially in the back part of the kiln, where, on account of its construction, it could not be reached by the boy who was sent in to clean it out. On the 27th it was again charged with fresh starch. Late in the afternoon of this day the foreman of the dextrine works reported to Dr. Behr, the superintendent of the plaintiff, that a blaze was observed in the same kiln where the flames had appeared on the 25th and 26th. Dr. Behr provided himself with a Babcock extinguisher, and, the door of the kiln being open, endeavored to put out the flames by directing upon it the contents of the extinguisher. He at first succeeded, but the flames immediately developed further back in the kiln, and in his endeavors to extinguish that the stream from the extinguisher came in contact with the starch, thereby producing a cloud of starch dust, similar to what is known as mill dust, which coming in contact with the flames, ignited, and produced an explosion. Through the open door of the kiln, in front of which Dr. Behr was standing, the blaze was...