Home Ins. Co. of New York v. Davila

Decision Date12 May 1954
Docket NumberNo. 4724.,4724.
Citation212 F.2d 731
PartiesHOME INS. CO. OF NEW YORK et al. v. DAVILA.
CourtU.S. Court of Appeals — First Circuit

James R. Beverley and Carmen B. Hernandez, San Juan, P. R. (R. Castro Fernandez, San Juan, P. R., on brief), for appellant.

Marcelino Romany, San Juan, P. R. (Romany & Romany, San Juan, P. R., on brief), for appellee.

Before MAGRUDER, Chief Judge, and MARIS and WOODBURY, Circuit Judges.

MAGRUDER, Chief Judge.

Vicente Davila held fire insurance policies issued by The Home Insurance Company of New York and by Sun Insurance Office, Limited, covering three buildings (with contents) owned by him in Jayuya, Puerto, Rico, viz., a theater building, a bakery, and a two-story concrete dwelling house. These three buildings were burned on October 30, 1950, as an incident of the uprising staged on that day by a little band of extremists calling themselves the Nationalist Party of Puerto Rico.

Each of the policies in question contained the following provision:

"Perils not included.

"This Company shall not be liable for loss by fire or other perils insured against in this policy caused, directly or indirectly, by: (a) enemy attack by armed forces, including action taken by military, naval or air forces in resisting an actual or an immediately impending enemy attack; (b) invasion; (c) insurrection; (d) rebellion; (e) revolution; (f) civil war; (g) usurped power; * * *."

On the other hand, fire losses resulting from a "riot" were intended to be covered; for the policies provided that there should be no liability for losses occurring "as a result of explosion or riot, unless fire ensue, and in that event for loss by fire only."

Plaintiff filed a single complaint in the insular district court, joining three separate causes of action based upon his fire losses aforesaid. On the ground of diversity of citizenship the case was removed to the United States District Court for the District of Puerto Rico.

By way of anticipating a defense of settlement and release, the complaint alleged:

"That plaintiff, Vicente Davila, filed his claims with the defendant corporations and the latter sent their representative, who examined the premises destroyed; that the said representative, availing himself of his vast knowledge of the Insurance Law and of the ignorance of plaintiff, made the latter believe that he did not have any right whatsoever to make any claim under the above mentioned policies, and availing himself of the aforesaid false and deceitful statements made plaintiff accept gratefully and as a gift a grossly inadequate amount which did not cover even remotely the total loss suffered and which plaintiff would have never accepted had it not been for the false and deceitful pretenses of defendants agent to plaintiff."

The answer of the defendants set up two special defenses: (1) That the insurers were not liable under the policies, because the fire losses in question had been caused by one of the excepted perils, and (2) that in any event, defendants had made payments "ex gratia" to the plaintiff totaling $12,000, in consideration of which the plaintiff had voluntarily and in writing waived further claims on the policies, the receipt by plaintiff of such payments having constituted, in each instance, an accord and satisfaction.

At the close of the plaintiff's evidence, the defendants moved for a directed verdict, on the ground that the plaintiff had produced no evidence of such fraud and deceit on the part of the representative of the insurers as would invalidate the settlements and releases. This motion the district court denied; whereupon the defendants proceeded at some length to put in evidence bearing on the issues raised by both the special defenses contained in the answer. It is well-settled that if a motion under Rule 50(a) of the Federal Rules of Civil Procedure, 28 U.S.C.A., asking for a directed verdict at the close of the plaintiff's case is denied, and the defendant thereupon presents his own evidence, this constitutes a waiver of the motion; unless a renewed motion for a directed verdict is made at the close of all the evidence, the defendant is precluded from questioning on appeal the sufficiency of the evidence to take the case to the jury. Minnehaha County v. Kelley, 8 Cir., 1945, 150 F.2d 356, 359; Ruud v. American Packing & Provision Co., 9 Cir., 1949, 177 F.2d 538, 542. In the instant case, defendants made no motion for a directed verdict at the close of all the evidence, under Rule 50(b); nor did they, after the jury had returned its verdict for the plaintiff, move for judgment notwithstanding the verdict. In the present posture of the case, even though we thought that the evidence was not sufficient to sustain the jury's verdict, we could not upon remand direct the district court to vacate the judgment for the plaintiff and enter judgment for the defendants notwithstanding the verdict. See Cone v. West Virginia Pulp & Paper Co., 1947, 330 U.S. 212, 67 S.Ct. 752, 91 L.Ed. 849; Globe Liquor Co., Inc. v. San Roman, 1948, 332 U.S. 571, 68 S.Ct. 246, 92 L.Ed. 177; Johnson v. New York, N. H. & H. R. Co., 1952, 344 U.S. 48, 73 S.Ct. 125, 97 L.Ed. 77. We could, of course, reverse for errors in admission or exclusion of evidence, or errors in instructions to the jury; but in that event the case would have to be remanded for a new trial or other proceedings not inconsistent with our opinion.

In an earlier case, this court was made aware of the revolutionary objective of the Nationalist Party of Puerto Rico. See Albizu v. United States, 1 Cir., 1937, 88 F.2d 138, certiorari denied, 1937, 301 U.S. 707, 57 S.Ct. 940, 81 L.Ed. 1361, in which we sustained convictions of Pedro Albizu Campos, the leader of the party, and others of his associates, for conspiracy to accomplish the political independence of Puerto Rico by force and violence and by armed revolution against the United States.

The present record contains uncontradicted evidence that when Albizu Campos returned to Puerto Rico in 1947 after having served his sentence in a federal penitentiary, he and his associates promptly resumed their incendiary program. In various public speeches, he urged revolution as a patriotic duty and the necessity of achieving independence for Puerto Rico by force and violence. The party set up a rudimentary military organization, in numbers not very formidable, styled the Liberating Army of the Nationalist Party, in command of designated officers, and with a cadet corps which engaged in some military training and exercises. They assembled an assortment of small firearms and weapons, and manufactured a quantity of dynamite bombs and "Molotov cocktails".

At the appointed hour of noon on October 30, 1950, the Nationalist conspiracy erupted into violent action at various places on the Island. Though the outbreaks did not result in the imposition of martial law, they were regarded as a sufficiently serious challenge to the established order to call for the mobilization of the National Guard of Puerto Rico, detachments of which were despatched to the disturbed areas to restore order.

In the town of Jayuya, four carloads of young Nationalists arrived at the police station, opened fire and killed or wounded three of the four policemen on duty, and then burned the police station. Also, members of the attacking group set fire to the mayor's house, the post office building, and numerous other buildings, including the theater, the bakery, and the dwelling house owned by the present plaintiff-appellee. Firemen were prevented from fighting the flames. The Nationalist flag was raised atop the roof of the River Palace Hotel. It does not appear, however, that the Nationalists actually undertook to install in the town any provisional local officials. Rather, the regularly constituted authority was paralyzed, most of the citizens fled, and the life of the community came to a standstill. Police re-enforcements which were sent from San Juan camped for the night on the outskirts of the town. The next morning, units of the National Guard entered the town unopposed, removed the Nationalist flag from the hotel, arrested many Nationalists and sent them to San Juan for further investigation, and re-established the civil authority.

Similar outbreaks occurred in Peñuelas, Arecibo, Utuado, and other places. A projected attack on Ponce was squelched before it got started, due to action of the authorities on the basis of advance information. In the capital city of San Juan five Nationalists, one of them said to be a colonel of the "Liberating Army", got out of a car and proceeded to open fire on La Fortaleza, the official residence of the governor. Four of the five were promptly shot dead by the police on duty, and the fifth wounded. Units of the police laid siege to the headquarters of Albizu Campos at the Nationalist Club in San Juan. Shots were exchanged, and finally capitulation of the occupants of the club was achieved by the use of tear bombs. With a towel tied to a broomstick as a symbol of surrender, Albizu Campos and some of his followers came out and were arrested.

The Nationalists implicated in the uprising were subsequently prosecuted and convicted in the regular courts of the Island for various criminal offenses.

Of course the facts of this Nationalist outbreak speedily became a matter of common notoriety throughout Puerto Rico. In the case of Guadalupe v. Bravo, Warden, 71 P.R.R. 913, decided December 18, 1950, the Supreme Court of Puerto Rico took judicial notice of the events of the week of October 30, 1950, which the court characterized as "a revolt in Puerto Rico" staged by the Nationalist Party. Though the word "revolt" is a common synonym of "insurrection", obviously this case was not a determination that the fire losses now in question were caused by one of the excepted perils within the meaning of the particular insurance policies. On December 6, 1950, the legislature of Puerto Rico passed Act ...

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