PACIFIC NATIONAL FIRE INSURANCE COMPANY v. Mickelson

• Decision Date: 10 August 1956
• Docket Number: No. 15523.,15523.
• Citation: 235 F.2d 425
• Parties: PACIFIC NATIONAL FIRE INSURANCE COMPANY, a corporation, Appellant, v. J. J. MICKELSON, Trustee in Bankruptcy of the Estate of Wirt Cook, an individual doing business as St. Paul Sporting Goods Company, and United States of America, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

235 F.2d 425 (1956)

PACIFIC NATIONAL FIRE INSURANCE COMPANY, a corporation, Appellant, v. J. J. MICKELSON, Trustee in Bankruptcy of the Estate of Wirt Cook, an individual doing business as St. Paul Sporting Goods Company, and United States of America, Appellees.

No. 15523.

United States Court of Appeals Eighth Circuit.

July 10, 1956.

Rehearing Denied August 10, 1956.

Samuel Levin, St. Louis, Mo. (LeRoy Bowen, Minneapolis, Minn., was with him on the brief), for appellant.

W. M. Kronebusch, Minneapolis, Minn., for appellee J. J. Mickelson, trustee.

Before GARDNER, Chief Judge, and VOGEL and VAN OOSTERHOUT, Circuit Judges.

VOGEL, Circuit Judge.

J. J. Mickelson (plaintiff-appellee), Trustee in Bankruptcy of the Estate of Wirt Cook, an individual doing business as St. Paul Sporting Goods Company, brought this suit against Pacific National Fire Insurance Company, a corporation, (defendant-appellant) to recover on a policy of fire insurance issued by the appellant to the St. Paul Sporting Goods Company. A second suit against the Homeland Insurance Company on its policy of insurance awaits, by stipulation, the outcome of this appeal. The United States intervened in the suits to protect its lien for unpaid income taxes and penalties due from Wirt Cook. This suit was tried to the court without a jury and resulted in judgment against the appellant. The principal question at the time of trial in District Court was whether Wirt Cook was responsible for causing the fires which resulted in the damage to the insured property. The sole issue then was one of fact. There was no dispute as to the liability of the appellant pursuant to the coverage contracted for, provided the fire was not intentionally set by, for or on behalf of the insured, Wirt Cook.

The fire out of which this litigation arose occurred around midnight on Wednesday, October 8, 1952. The insured, Wirt Cook, left the premises where he conducted his business at about 4:00 p. m. and proceeded to his home on Mississippi River Road, where he had dinner with his family. He then drove to the Dyckman Hotel in Minneapolis for a 7:00 p. m. appointment with a sporting goods salesman. Following this meeting, he left alone about 9:30 p. m. by automobile for an appointment with a school official at White Bear, Minnesota, in connection with a possible sale of his merchandise. He arrived at White Bear about 10:00 p. m. He stayed until about 10:30 or 10:45. He then left for his home, arriving there about 11:30 p. m. He was there informed by his wife that she had just had a telephone call advising that the store was on fire. While waiting for his wife to dress for the purpose of accompanying him, Cook received a confirming telephone call from the St. Paul Police Department, that call being between 11:30 p. m. and midnight.

Investigations by the St. Paul Fire and Police Departments were made. The investigators concluded that two separate fires had been set in the store shortly before midnight on October 8, 1952. They also observed evidence of a third fire in the basement which had occurred at some prior date. The evidence indicated that the store had only one door and there were only two keys to the door. A store clerk, Hansen, had one key and Wirt Cook had the other. Hansen and his wife both testified that about 6:00 o'clock in the evening of October 8, 1952, he locked the door. His wife was present. She left some parcels in the store. They went to a nearby restaurant and had dinner, coming back about 7:00 o'clock p. m. They unlocked the door, got the parcels and then relocked the door, after which Hansen tried it to be certain that it was locked. Hansen and his wife both accounted for their whereabouts after they left the store until they were apprised of the fire. No motive for the burning of the store can be attributed to Hansen.

When the St. Paul Fire Department responded to the fire call, they found the door to the store unlocked. There was no evidence of anyone having broken into the store. The evidence indicated that Wirt Cook was in financial difficulty at the time of the fire. His business showed a heavy loss during the year 1952 up to the time of the fire. He was being pressed for payment by the government, by the people from whom he originally purchased the business, and by merchandise creditors. Judgments had been obtained against him. Life insurance on himself and his wife was cancelled for non-payment of premiums, notices of which Cook had received shortly before the fire. Other judgments were threatened. His bank accounts were practically depleted. A large number of his checks had come back for insufficient funds. Threat had been made to cut off his telephone service.

Cook's financial history sometime prior to buying the St. Paul Sporting Goods Company was gone into at some length. It appeared that prior to December, 1949, Cook had been employed as a branch sales manager of the Ford Motor Company in St. Paul. At that time automobiles were hard to obtain. He distributed Ford cars to dealers and others and illegally received from the dealers $100.00 per car in what he termed "under-the-counter payments". As a result of these operations, Cook accumulated approximately $40,000.00 Sometime later "the Government finally caught up * * *" to Cook and at the time of the fire he was still owing substantial amounts on income tax liability.

The trial court found specifically that the fire "* * * was of undetermined origin and not intentionally set by, for or on behalf of the insured named in said policy" and entered judgment for the appellee.

Appellant complains in this court that "the clear and uncontroverted evidence shows incendiary fires, pressing debts, judgments and motive to collect insurance", that "the trial court's opinion, findings and judgment are against the manifest weight of the evidence and erroneous", and that this court has authority to reverse the judgment. In other words, the appellant is asking this court to set aside the trial court's findings of fact and hold that on the evidence the fire was incendiary in nature and was set by the insured, Wirt Cook, and to order judgment for the appellant.

Appellant argues that in Minnesota, the law of which state is controlling herein, in an action on a policy of insurance to recover for fire loss it is only necessary to prove a defense by a preponderance of the evidence, citing Thoreson v. Northwestern Nat. Ins. Co., 29 Minn. 107, 12 N.W. 154. Appellant cites State v. Lytle, 214 Minn. 171, 7 N.W.2d 305, as being directly in point and decisive of this case. That case merely held that the circumstantial evidence introduced by the state was sufficient to justify the jury in finding that the fire which the defendant was accused of setting was an incendiary fire and that defendant set it. In that case, the Supreme Court of Minnesota was passing upon the sufficiency of the evidence to justify a verdict of guilty by the jury. That is not our situation in the instant case and that case is not authority for appellant's contention.

The Lytle case and the other Minnesota cases relied upon by the...