Hall & Hawkins v. National Fire Ins. Co.

• Decision Date: 20 January 1906
• Citation: 92 S.W. 402
• Court: Tennessee Supreme Court
• Parties: HALL & HAWKINS v. NATIONAL FIRE INS. CO.

Page 402

92 S.W. 402

HALL & HAWKINS v. NATIONAL FIRE INS. CO.

Supreme Court of Tennessee.

January 20, 1906.

Appeal from Chancery Court, Knox County; Jos. W. Sneed, Chancellor.

Action by Hall & Hawkins against the National Fire Insurance Company. From a judgment in favor of plaintiffs, defendant appeals. Reversed.

Webb, McClung & Baker and Cornick, Wright & Frantz, for appellant. John W. Green, for appellees.

NEIL, J.

Complainants' bill states the following case:

On the 6th day of September, 1904, the defendant company issued to the complainants a policy containing, among other things, the following provisions:

"The National Fire Insurance Company of Hartford, Conn., in consideration of the stipulations herein named, and of $19.38 premium, does insure Hall & Hawkins, for the term of one year from the 6th day of September, 1904, at noon, to the 6th day of September, 1905, at noon, against all direct loss or damage by fire, except as herein provided, to an amount not exceeding $1,000, to the following described property, located and contained as described herein [describing property]. This company shall not be liable for loss occasioned directly or indirectly by invasion, insurrection, riot, civil war or commotion, or 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 fire, or when the property is endangered by fire in neighboring premises, or (unless fire ensues, and in that event for the damage by fire only) by explosion of any kind or lightning; but liability for direct damage by lightning may be assumed by specific agreement hereon."

The property insured consisted of a stock of furniture, house furnishing goods, rugs, carpets, linoleum, oilcloth, curtains, and other merchandise which the complainants kept for sale in their place of business at Nos. 418-420 Gay street, Knoxville, Tenn.

On November 12, 1904, between 2 and 3 o'clock in the morning, a fire, originating from an unknown cause, broke out in the second building south of complainants' storehouse on the same side of the street, and between 30 and 40 feet distant, occupied by the Woodruff Hardware Company. After this fire had been in progress for the space of one hour, and while it was raging fiercely and beyond control, a terrific explosion, following as an incident of the fire, and shaking the whole city and the country for miles around, occurred in said storehouse of the Woodruff Hardware Company; this explosion having been caused by the fire igniting powder and dynamite stored in the building of the Woodruff Hardware Company. The fire itself did not reach the store occupied by complainants, but it produced the explosion, which resulted in breaking, injuring, and damaging complainants' stock to the extent of more than $5,000. The explosion referred to was wholly due to the preceding fire.

The other allegations of this bill need not be noticed, as they are not drawn in question.

The demurrer, so far as it is necessary to notice the defenses made therein, makes two points: Firstly, that the facts stated in the bill fail to show any direct loss by fire; secondly, that it is shown in the bill that an explosion occurring in a building 40 feet distant caused the injury to complainants' goods, and that no fire ensued upon the explosion, and that such loss was not within the terms of the policy.

The chancellor overruled the demurrer, whereupon the defendant, by leave of the court, prosecuted an appeal to this court, and has here assigned errors.

We shall not dispose of the two grounds of demurrer in the exact form in which they are stated, but shall consider, so far as may be necessary, the substance of each of them.

1. There is some controversy in the authorities upon the question whether, under a policy framed like the one in suit here, an explosion occurring during the progress of a fire should be treated as a mere incident of the fire, the latter being regarded as the efficient cause of the injury, or whether it should be excepted out of the operation of the policy.

The weight of the authority is to the effect that where the fire occurs in the property insured, and an explosion takes place therein during the progress of the fire, the effects of which are covered by the policy, and such explosion is a mere incident of the preceding fire, the latter is treated as the efficient cause, and the whole loss is within the risk insured, although the policy in terms excludes liability for loss by explosion. Mitchell v. Potomac Ins. Co., 183 U. S. 51, 52, 53, 22 Sup. Ct. 22, 46 L. Ed. 74; Waters v. Ins. Co., 11 Pet. (U. S.) 213, 218, 9 L. Ed. 69; Amer Steam Boiler Ins. Co. v. Chicago Sugar Refining Co., 57 Fed. 294, 6 C. C. A. 336, 21 L. R. A. 572; Washburn v. Farmers' Ins. Co. (C. C.) 2 Fed. 304; Washburn v. Miami Valley Ins. Co. (C. C.) 2 Fed. 633; Washburn v. Insurance Co., Fed. Cas. No. 17,216; Washburn v. Insurance Co., Fed. Cas. No. 17,212; Renshaw v. Insurance Co., 33 Mo. App. 394; Renshaw v. Insurance Co. (Mo. Sup.) 15 S. W. 945, 23 Am. St. Rep. 910; Insurance Co. v. Dorsey, 56 Md. 70, 40 Am. Rep. 403; Insurance Co. v. Foote, 22 Ohio St. 340, 348, 10 Am. Rep. 735; Scripture v. Lowell Mut. Fire Ins. Co., 10 Cush. (Mass.) 357, 57 Am. Dec. 111; La Force v. Williams City F. Ins. Co., 43 Mo. App. 518. And see Lynn Gas & Elec. Co. v. Meriden Fire Ins. Co. (Mass.) 33 N. E. 690, 20 L. R. A. 297, 35 Am. St. Rep. 540.

In May on Insurance it is said: "Where the policy excluded liability `for loss by lightning or explosion of any kind, unless fire ensues, and then for damages by fire only,' it was held, in a case where it appeared that vapor evolved from material in process of manufacture, coming in contact with a burning lamp, exploded, tearing off the roof, shattering the walls, and damaging the machinery, upon which a fire supervened, that the insurers were liable for the damage done by fire, but not for that done by the explosion. If, under such a policy, fire precedes the explosion, the entire loss is to be attributed to the fire, though the explosion is destructive." Volume 2 (4th Ed.) p. 956. In a note upon the same page it is said: "If a fire occurs by a cause within the policy, and an explosion takes place as an incident to the fire, so as to increase the loss, the whole damage is within the policy, although it contains an exemption from liability for the explosion" — citing Insurance Co. v. Dorsey, supra.

In Clement on Insurance it is said: "When explosions or explosive effects occur after the commencement of a fire, or during its progress, and as an incident of a fire or a result of it, the whole loss is a loss by fire within the meaning and protection of the policy, notwithstanding the destructive effect of the explosion. It is ordinarily a question of fact. If the explosion precedes the fire, the company is liable for the damage by fire only and not for that caused by the explosion." Page 123.

In Elliott on Insurance it is said: "The standard form provides for liability for damage occasioned by fire which results from an explosion, and exempts the insurer from liability for damages caused by the explosion itself. The loss by explosion must be distinguished from that caused by the subsequent fire. Under this provision the insurer is liable for the loss when the explosion is the result of an antecedent fire." Page 212.

In Joyce on Insurance it is said: "Insurers are liable upon a policy which contains a condition of this nature [i. e., excepting...