State ex rel. Continental Insurance Co. v. Reynolds

• Decision Date: 30 November 1921
• Citation: 235 S.W. 88,290 Mo. 362
• Parties: THE STATE ex rel. CONTINENTAL INSURANCE COMPANY v. GEORGE D. REYNOLDS et al., Judges of St. Louis Court of Appeals
• Court: Missouri Supreme Court

235 S.W. 88

290 Mo. 362

THE STATE ex rel. CONTINENTAL INSURANCE COMPANY v. GEORGE D. REYNOLDS et al., Judges of St. Louis Court of Appeals

Supreme Court of Missouri

November 30, 1921

Writ quashed.

Leahy & Saunders for relator.

(1) The Court of Appeals correctly decided that the hot-well connected with the boiler exploded, and, therefore, the sprinkler leakage system was broken by an explosion. Webster's Dictionary, defining "explosion;" The Century Dictionary, defining "explosion." The term explosion in a policy is to be contrued in its ordinary and popular sense, and the word explosion in such policy should be construed to mean what an ordinary man would understand by such word. (2) The court in this case incorrectly contrued the term "cause," as applied to the exception in the sprinkler leakage policy, exempting the company from liability for "loss caused by an explosion," and erred in holding that, while the explosion broke the sprinkler leakage system and caused the water to flow therefrom and damage plaintiff's goods, the explosion was not the proximate cause of the loss. Dixon v. Omaha & St. Louis Railroad Co., 124 Mo. 140, 149; Kane v Pacific Railway Co., 251 Mo. 13, 27; Bellows v Travelers Ins. Co., 203 S.W. 978; Fetter v. Fidelity & Casualty Co., 174 Mo. 256; Frisbie v. Fidelity & Casualty Co., 133 Mo. 32, 35; Insurance Co. v Boon, 95 U.S. 117; Driskell v. U.S. H. & A. Ins Co., 117 Mo.App. 362; Baehr v. Union Casualty Co., 133 Mo.App. 541; Hooper v. Standard Life & Accident Ins. Co., 166 Mo.App. 209; Goodes v. Order United Commercial Trav., 174 Mo.App. 330; Greenlee v. Kansas City Casualty Co., 182 S. W., 138, 192 Mo.App. 303. (3) The great weight of authority on the question of proximate cause in policies containing exceptions identical with this one is to the effect that the doctrine of proximate cause applies and cannot be frittered away by refinements of language and mysterious intervening causes which cannot be defined or even described. Insurance Co. v. Tweed, 7 Wall. 44; Approved in Atchison v. Calhoun, 213 U.S. 7; Frisbie v. Fidelity & Casualty Co., 133 Mo.App. 30; Cohn v. National Insurance Co., 96 Mo.App. 315; German-American Insurance Co. v. Hyman, 94 P. 27; Mitchell v. Potomac Insurance Co., 183 U.S. 42; German Fire Insurance Co. v. Roost, 45 N.E. 1097; Story v. The Sun Mutual Insurance Co., 91 N.Y. 103; St. John v. American Mutual Fire & Marine Insurance Co., 11 N.Y. 516; Evans v. The Columbian Insurance Co., 44 N.Y. 146; Hustice v. Phoenix Insurance Co. of Brooklyn, 175 N.Y. 292; Insurance Co. v. Boon, 95 U.S. 117; Hayward v. Insurance Co., 3 Keyes (N.Y.) 456; Hayward v. Insurance Co., 2 Abbot Decisions (N.Y.) 349; Heuer v. Insurance Co., 144 Ill. 393; Hallander v. Jefferson Mutual Fire Insurance Co., 218 S.W. 419. (4) The plaintiff in this case was permitted to shift its position in the appellate court from the position taken by its pleadings and evidence in the trial court to the effect that there was no explosion, contrary to the following controlling decisions of this court. Dougherty v. Gangloff, 239 Mo. 660; Henry Co. v. Citizens Bank, 208 Mo. 226. In the trial court it contended there was no explosion; in the appellate court it contended there was an explosion. Renshaw v. Insurance Co., 103 Mo. 595; Maupin v. Southern Insurance Co., 220 S.W. 20. (5) The effect of the decision of the Court of Appeals is to deprive relator of its property without due process of law, and to deny it the equal protection of the law, contrary to Section 30 of Article 2 of the Constitution of Missouri, and to the Fourteenth Amendment to the Constitution of the United States, and to impair the obligation of the contract, contrary to Section 10, Article 1 of the Federal Constitution. Allgeyer v. La., 165 U.S. 578; Lochner v. New York, 198 U.S. 45. (6) Insurance policies are to be construed as ordinary contracts, though ambiguities therein are to be resolved against the insurance company, and exceptions are to be strictly construed against the insurance company. Renshaw v. Insurance Co., 103 Mo. 595, 604; Maupin v. Southern Ins. Co., 220 S.W. 20. (7) Insurance policies must be construed with reference to their subject-matter and a sprinkler leakage policy cannot by the legerdemain of construction be converted into a boiler insurance policy, a cyclone policy and an earthquake policy. No premium is paid the insurance company for assuming such risks, and the policy should not receive such a construction.

Leonard, Sibley & McRoberts and Shepard Barclay for respondents.

(1) The policy makes clear and plain distinction between direct and indirect consequences of facts mentioned as exceptions to the risk assumed of damage by leakage of water. When such distinction is expressed, the courts will give effect thereto. Ins. Co. v. Robinson, 64 Ill. 285 (explosion of lamp), cited and followed as authority in Missouri in. Renshaw v. Ins. Co., 103 Mo. 611; Straus v. Ins. Co., 94 Mo. 182. See aso Pac. Heating Co. v. Ins. Co., 9 Cal.App. Dec. 157, 158 Cal. 367; Winspear v. Ins. Co., 6 Q. B. Div. 42; Lawrence v. Ins. Co., 7 Q. B. Div. 216; Montgomery v. Ins. Co., 242 Pa. 86. (2) On the undisputed facts, the so-called "explosion" was not a direct cause of any damage by water; but only a secondary or indirect cause, and not within the exception. Renshaw v. Ins. Co, 103 Mo. 595; Ins. Co. v. Robinson, 64 Ill. 265; Heffron v. Ins. Co., 132 Pa. 580; Ins. Co. v. Willard, 164 F. 404, 212 U.S. 581; Ins. Co. v. Stanton, 191 F. 813; Joyce, Insurance (2 Ed.) sec. 2590; Ins. Co. v. Parker, 23 Ohio St. 85; Mfrs. Ind. Co. v. Dorgan, 58 F. 945; Ins. Co. v. Corlies, 21 Wend, 367; Briggs v. Ins. Co., 66 Barb. 325, 53 N.Y. 447; Vorse v. Ins. Co., 119 Iowa 555; Montgomery v. Ins. Co., 242 Pa. 86. (3) The facts, which relator claims constitute an "explosion," were submitted to the jury in the trial court. Plaintiff contended in the Court of Appeals that the word "explosion" imports combustion in some form, which was absent here; citing on that point: Joyce, Insurance (2 Ed.) sec. 2768; Century Dictionary, "explode," p. 2083; Ins. Co. v. Rupard, 220 S.W. 538; Mill Co. v. North British Co., 139 F. 637; Fitzgerald v. Ins. Co., 62 N.Y.S. 824; Stanley v. West Ins., L. R. 3 Ex. 71; Babcock v. Ins. Co., 4 N.Y. 326; Bird v. Ins. Co., 224 N.Y. 47. But the learned opinion in the Court of Appeals held that the facts disclosed an "explosion" as matter of law. So respondents submit that relator has no ground to complain of that ruling. (4) The defendant had the burden of proof to maintain its plea that the loss was directly caused by facts within the exception of the policy. Ins. Co. v. Rupard, 220 S.W. 538. But defendant did not discharge the burden. The jury found against its plea; so that, even if its plea had any support in the evidence, the adverse finding by the jury on its own instruction as to the "direct cause" of the damage would bar a reversal of that result. Gannon v. Gas Co., 145 Mo. 502; Johnson v. Grayson, 230 Mo. 394; Siedenkranz v. Lodge, 199 S.W. 451. (5) Ambiguity in a policy (as to liability of the insurer) should be construed favorably to the insured. Renshaw v. Ins. Co., 103 Mo. 611; Sutton v. Ins. Co., 208 S.W. 499; Ethington v. Ins. Co., 55 Mo.App. 129; Malin v. Ins. Co., 219 S.W. 143; Union v. Colehouse, 227 Ill. 565; Rieger v. London Co., 215 S.W. 920.

OPINION

In Banc.

Certiorari.

ELDER J.

-- This is a proceeding in which relator seeks by writ of certiorari to review the decision of the St. Louis Court of Appeals and quash the judgment entered by that court in the case of American Paper Products Company, respondent, v. Continental Insurance Company, appellant, (relator herein).

The action brought was upon an insurance policy issued by relator to the aforesaid respondent, American Paper Products Company, insuring its stock in trade against all direct loss or damage by sprinkler leakage, except as provided in the policy, such proviso being as follows, to-wit:

"This company shall not be liable for loss by fire, however caused; nor for loss resulting from the leakage of water, if such leakage is caused directly or indirectly by fire; nor for such loss due to stoppage or interruption of any work in plant unless liability for such loss is specifically assumed herein; nor for loss caused by lightning (whether fire ensues or not), cyclone, tornado, windstorm, earthquake, explosion or blasting . . . nor for loss caused directly or indirectly by the fall or collapse of any building or any part thereof, unless such fall or collapse is caused by the accidental leakage of water from automatic sprinkler system, or the tanks supplying it." (Italics ours).

The case was tried before a jury, in the Circuit Court for Lincoln County, and a verdict was returned in favor of the Paper Products Company for the amount of damage claimed, to-wit, $ 1,754.71, and for attorney's fees and damages for vexatious delay. After a remittitur of the items for attorney's fees and damages for delay, judgment was entered for $ 1,754.71. Upon appeal to the St. Louis Court of Appeals, this judgment was affirmed.

The facts in the case are thus stated in the opinion of the Court of Appeals:

"Plaintiff maintained at its plant an engine and boiler room in a one-story frame building, in the basement of which was stored the paper stock that was damaged by water. The building was equipped with an automatic sprinkler system, the sprinkler pipes being about one foot below the ceiling, which was twelve feet from the floor. At a certain degree of heat the sprinkler heads open, and under pressure water flows from the pipes and floods the building, thereby extinguishing the fire. About three feet from the steam boiler which was situated in this boiler room, and under the floor of the...