Employers Liability Assur. Corp. v. Morse, 38313

• Decision Date: 10 November 1961
• Docket Number: No. 38313,38313
• Citation: 111 N.W.2d 620,261 Minn. 259
• Parties: EMPLOYERS LIABILITY ASSURANCE CORPORATION et al., Appellants, v. William A. MORSE, Respondent, William Oswald, Defendant.
• Court: Minnesota Supreme Court

Page 620

111 N.W.2d 620

261 Minn. 259

EMPLOYERS LIABILITY ASSURANCE CORPORATION et al., Appellants, v. William A. MORSE, Respondent William Oswald, Defendant.

No. 38313.

Supreme Court of Minnesota.

Nov. 10, 1961.

Syllabus by the Court

1. A subrogee is entitled to no greater rights than the one to whom he is subrogated. He merely steps into the shoes of his subrogor.

2. Whether a contract is ambiguous and therefore open to construction, in the first instance, presents a question for legal determination by the trial court. On appeal, it is for us to determine whether the trial court was correct in holding that there was no ambiguity and also whether the proper interpretation was given to the language used by the parties.

3. A contract is ambiguous if it is reasonably susceptible to more than one construction.

4. The cardinal purpose of construing a contract is to ascertain the intention of the parties from the language used by them and by a construction of the entire instrument.

5. Under the rule of ejusdem generis, all words in a writing should be given effect if possible. Where specific words enumerating members of a class are followed by general words capable of including the class and others, the former would be rendered meaningless if the latter were given their full and natural meaning, since the latter include the former, and the incompatibility should be reconciled by construing the general words as referring to the same kind as those enumerated by the specific words, and thus giving meaning to both.

6. Where contract contained exemption from liability for specific enumerated types of damage from water and exemption was followed by a general statement exempting liability for damage or loss which may be directly or indirectly sustained by water, sewer, or gas, such general statement must be construed to refer to the specific types of water damage enumerated in the contract. The trial court incorrectly held otherwise.

7. Water used in extinguishing a fire is only incidental to the fire itself. The real or proximate cause of the damage is the fire. Inasmuch as the damages involved in this action are due to the fire, liability has been established under our decision in Fox v. Morse, 255 Minn. 318, 96 N.W.2d 637.

8. Where the amount of liability has not been ascertained and it is necessary that the jury determine the amount of liability, interest is not recoverable on the verdict prior to the rendition thereof.

Thomas, King, Daubney, Swenson & Collatz, St. Paul, for appellants.

Arthur G. Hallgrain, Minneapolis, for respondent.

KNUTSON, Justice.

This is an appeal from a judgment entered pursuant to an order of the trial court granting judgment notwithstanding the verdict after a verdict by the jury in favor of plaintiff.

This case arises out of a fire which occurred in the Willard Hotel in St. Paul on December 13, 1955. As a result of the fire, tenants in the building sustained extensive property damage. Numerous actions were commenced against the owner of the building on the theory that the fire was negligently caused by his employee and servant. The actions were consolidated in one trial for the purpose of litigating the question of liability. The trial resulted in a determination of liability. On appeal, we affirmed. Fox v. Morse, 255 Minn. 318, 96 N.W.2d 637. The details of the fire and the basis for liability as there determined are fully set forth in our former opinion and need not be repeated here.

Arthur Langevin occupied the first floor and basement of the building as a tenant. In these premises he conducted a paint supply business under the name of Langevin Paint Supply Company. The fire itself was confined to the two top floors of a six-story building, but in the process of extinguishing the fire great quantities of water were dumped on the building. The water found its way through the building and caused extensive damage to the stock of merchandise and fixtures of Langevin. Plaintiffs in this action were insurers of Langevin's stock and fixtures. They made a settlement with Langevin and thereafter, as subrogees, brought this action against the owner of the building to recover the amount they had paid. The trial resulted in a verdict for plaintiffs. Thereafter the trial court granted defendant's motion for judgment notwithstanding the verdict except as to five percent of the recovery, which it was conceded was due to soot and smoke. The trial court concluded that the owner was not liable for damages caused by water under an exculpatory clause in the lease between the owner of the building and Langevin.

The lease is a standard printed form in common use. It places responsibility on the lessee for maintaining the premises. Among other things, it provides:

'The said Lessee agrees to put and keep all skylights, fire-escapes, plumbing, toilets, sinks, pipes, drains, watermeters, steam pipes and radiators in and for said premises in good order and repair at said Lessee's own cost and expense during said term.'

Thereafter the lease includes the following paragraph excluding liability on the part of the lessor for certain damages:

'The said Lessee agrees that the said Lessor shall not be holden or liable for any loss or damage which may be sustained by the said Lessee or others by the reason of the freezing, bursting, overflowing or defect of any water, sewer, gas or steam pipes, closets or sinks, in or about said premises or from premises overhead, Nor for any loss or damage which directly or indirectly may be sustained by water, sewer or gas, nor for loss or damage caused by water, ice or snow from roof, skylights, trap doors or otherwise, nor for loss or damage by the reason of the present or future condition of repair of said premises or for loss or damage arising from acts or omissions of said Lessee or others as tenants or occupiers.' (Italics supplied.)

The trial court proceeded to divide this exculpatory paragraph into three separate and unrelated provisions. In its memorandum the court said:

'* * * With respect to exclusion from liability involving damage by water, the paragraph in that respect appears to be divided into the following three parts:

'1. Damage sustained by Bursting, overflowing, or Defects of

'A. pipes--water, sewer, gas or steam, and

'B. closets or sinks--sewer, gas, water, or steam in and about premises or from premises overhead.

'2. Damage sustained directly or indirectly from

'A. water

'B. sewer

'C. gas

'3. Damage caused by water, ice or snow from

'A. roof

'B. skylights

'C. trapdoors

'D. otherwise' Having divided the lease into these three separate and unrelated provisions, the trial court proceeded to hold that the lease was free from mabiguity and that, by the second subdivision of the court's dissection of the paragraph, there was no liability for damage caused by water, no matter how it came on the premises; that the damage here was 95 percent caused by water; hence that there could be no recovery for such damages.

The only questions for determination on this appeal are: (1) Did the trial court correctly hold that the lessor, by the terms of his lease, was exempt from liability for damages caused by water poured on the building in extinguishing a fire? (2) If plaintiffs are entitled to recover, are they entitled to interest on the damages suffered from the date of their loss?

1. It is elementary that a subrogee is entitled to no greater rights than the one to whom he is subrogated. He merely steps into the shoes of his subrogor. It follows that, if liability to Langevin was excluded by the lease, plaintiffs have no greater rights to recover than he had. ¹

2. Whether a contract is ambiguous or not and therefore open to construction presents, in the first instance, a question for legal determination by the trial court. The trial court in this case determined that the contract was not ambiguous and proceeded to give to the words used in the exculpatory clause their literal meaning. On appeal, it is for us to determine whether the trial court was correct in holding that there was no ambiguity and also whether the proper interpretation was given to the language used by the parties.

3. A contract is ambiguous if it is reasonably susceptible to more than one construction. ²

4. The cardinal purpose of construing a contract is to ascertain the intention of the parties from the language used by them and by a construction of the entire instrument. ³

In Despatch Oven Co. v. Rauenhorst, 229 Minn. 436, 442, 40 N.W.2d 73, 78, we pointed out:

'We have said many times that a contract should be so construed as to give effect to the intention of the parties as expressed in the language used, and that the words used are not only to be construed with reference to the subject matter of the contract and the circumstances of their use, but that they derive meaning from such factors.'

In Cement, Sand & Gravel Co. v. Agricultural Ins. Co., 225 Minn. 211, 216, 30 N.W.2d 341, 345, we said:

'* * * The intent of the contracting parties is to be ascertained, Not by a process of dissection in which words or phrases are isolated from their context, but rather from a process of synthesis in which the words and phrases are given a meaning in accordance with the obvious purpose of...