Lawrence Warehouse Co. v. Defense Supplies Corp.

• Decision Date: 02 January 1948
• Docket Number: No. 11418.,11418.
• Citation: 164 F.2d 773
• Parties: LAWRENCE WAREHOUSE CO. v. DEFENSE SUPPLIES CORPORATION. CAPITOL CHEVROLET CO. v. SAME. McGREW v. SAME. DEFENSE SUPPLIES CORPORATION v. HENRY.
• Court: U.S. Court of Appeals — Ninth Circuit

164 F.2d 773 (1947)

LAWRENCE WAREHOUSE CO. v.DEFENSE SUPPLIES CORPORATION.

CAPITOL CHEVROLET CO. v.SAME.

McGREW v.SAME.

DEFENSE SUPPLIES CORPORATION v.HENRY.

No. 11418.

Circuit Court of Appeals, Ninth Circuit.

December 5, 1947.

Rehearing Denied January 2, 1948.

W. R. Wallace, Jr., W. R. Ray, and Williamson & Wallace, all of San Francisco, Cal., for appellantLawrence Warehouse Co.

Morris Lavine, of Los Angeles, Cal., for appellantCapitol Chevrolet Co.

Albert H. Gommo, Jr., of San Francisco, Cal., for appellant McGrew.

Theodore R. Meyer, Brobeck, Phleger & Harrison, and David E. Lombardi, all of San Francisco, Cal., for appellantDefense Supplies Corporation.

Louis J. Glicksberg, of San Francisco, Cal., for appelleeClyde W. Henry.

Before DENMAN, HEALY, and BONE, Circuit Judges.

HEALY, Circuit Judge.

Defense Supplies Corporation, an agency of the United States, recovered a judgment in damages against Lawrence Warehouse Company, Capitol Chevrolet Company, and B. J. McGrew, for the negligent destruction by fire of a quantity of automobile tires and tubes stored in a warehouse.With the exception of McGrew, the named defendants have appealed from the judgment.The defendantClyde W. Henry, owner of the building in which the property was stored, was exonerated from liability, and from this phase of the judgment Defense Supplies Corporation appeals.In the interest of brevity Defense Supplies will be referred to as the Corporation, the Lawrence Warehouse Company as Lawrence, and the Capitol Chevrolet Company as Capitol.

The purpose of the Corporation was to create a stockpile of used and spare automobile tires and tubes in aid of the national defense.A quantity of these commodities having early in 1943 been accumulated at Sacramento, the Corporation contracted with Lawrence for their safekeeping and storage.Lawrence had earlier entered into an agency agreement with Capitol for the storage of tires and tubes to be delivered by Lawrence as custodian for the Corporation.In pursuance of this agreement Capitol, on March 1, 1943, leased from Henry a building known as the Ice Palace, formerly a skating rink, located outside the city of Sacramento.This was a wooden structure having connected with it an engine room, also of wood save that the partition between it and the main body of the Ice Palace was of concrete.The Corporation approved the lease of the Ice Palace as a place of storage, and gave its approval also to the agency contract between Capitol and Lawrence.Upon the lease of the building the accumulated tires were stored there.On April 9, 1943 the structure, together with its contents, was destroyed by a fire originating in the engine room.

By the terms of the contract between the Corporation and Lawrence the responsibility of the latter for the care and protection of the tires was confined to such care as is required by laws governing warehouses in California seeWarehouse Receipts Act § 21, 3 Deering's Cal.Gen.Laws, Act 9059 and to the exercise of ordinary care on the part of the warehouseman.The agency agreement between Lawrence and Capitol obliged the latter "to store and safeguard the storage" of such tires and tubes as were received by it from Lawrence as custodian for the Corporation.In the trial court's opinion(D.C., 67 F.Supp. 16) the question posed for determination was whether, from a preponderance of the evidence, it had been made to appear that the bailees failed to take reasonable precautions for the prevention of fire and for its extinguishment after it occurred, thereby causing or contributing to the loss.The evidence was thought to justify an affirmative answer to this inquiry.The findings were that Lawrence and Capitol failed to exercise reasonable care for the safeguarding from fire of the goods stored with them, and that by reason of such want of care the goods were destroyed.The negligence of these parties was found to be concurrent with that of the defendant McGrew.

1.Lawrence and Capitol insist that the evidence is insufficient, as a matter of law, to support the findings.We are unable to agree.To begin with, we are obliged to accept as true the finding that the fire originated from the use by McGrew of an acetylene torch in the cutting up of a steel tank in the engine room.The sufficiency of the showing to this effect is hardly open to debate.McGrew was a driller of wells.He needed steel casing for the lining of a well which he had undertaken to drill for Henry, and he obtained Henry's permission to use the steel to be had from the tank.Four days preceding the fire McGrew went to the Ice Palace with Henry's employee who bore a card from Henry, addressed to the watchman, asking that the men be allowed to enter "to remove pipe & equipment."The guard on duty declined to give the permission in the absence of directions from Capitol.The authority requested was then obtained by McGrew from the assistant manager of Capitol who instructed the guard accordingly.

On the day previous to the fire McGrew came to the Ice Palace with his equipment, including the acetylene torch, and proceeded by means of the torch to cut up the steel tank in the engine room.The windows of this room and the door from the outside appear to have been open at least a portion of the time while the work was in progress.Next morning the cutting task was resumed, and shortly after twelve noon the fire broke out at or near the spot where the torch was in operation.There was evidence of the presence of some dark substance on the floor at the corner of the tank.While several hydrants were outside, there was no fire fighting equipment in the engine room other than a five-gallon bucket of water McGrew had placed there.McGrew threw this water and several additional bucketsful on the fire but his efforts to halt the flames were ineffectual, and the conflagration spread rapidly to the main part of the building where the tires were stored.

When Capitol was approached by McGrew for leave "to remove pipe & equipment" it did not inquire as to the mode of procedure to be followed in the performance of the work, nor did it take any steps to ascertain what McGrew was actually doing after his entry.No precautions were taken in the way of providing fire fighting equipment with which such a fire as the torch started could have been put out.This, too, in a structure in which valuable and highly inflammable material was stored for safekeeping.

In the face of this showing neither Lawrence nor Capitol came forward with evidence tending to establish due care on its part.Both contend that the Corporation's burden of proving negligence was not discharged by the showing, but the local authorities indicate a contrary view.In line with general authority on the subject, it is held not necessary that there be direct evidence of negligence as a fact; proof of circumstances from which it may rationally be inferred is enough.Wilson v. Southern Pacific R. R. Co., 62 Cal. 164, 172.And when such circumstances have been disclosed it devolves upon the warehouseman to show, as a matter of defense, what would constitute ordinary care on his part in the operation and management of his warehouse.Runkle v. Southern Pacific Milling Co., 184 Cal. 714, 195 P. 398, 16 A.L.R. 275.¹

Now if Capitol was negligent in safeguarding the goods it follows as a matter of course that its dereliction is imputable to its principal, Lawrence.The latter argues that Capitol's negligence, if any, was not shown to be within the scope of its authority as an agent, and that there was no finding that it was.While the findings are not specific in this respect, the trial court's opinion shows that the decision as against Lawrence was grounded on imputed negligence.The facts of the case and the terms of the agency agreement fully support that conclusion.²

Capitol or Lawrence, in certain instances both, attempt to disclaim responsibility on the basis of circumstances said to be peculiar to ...