Trav. Ind. Co. v. B. & B. Ice & Coal Co.

• Decision Date: 24 March 1933
• Parties: Travellers Indemnitv Co. v. B & B Ice & Coal Co.
• Court: United States State Supreme Court — District of Kentucky

248 Ky. 443

Travellers Indemnitv Co. v. B & B Ice & Coal Co.

Court of Appeals of Kentucky. Common Pleas Branch, Fourth Division.

Decided March 24, 1933.

1. Insurance. — To constitute "explosion" defined by policy as sudden "rupture" of boiler, extremely loud noise is not essential.

"Explosion" is defined as sudden release of pressure such as disruption of steam boiler, and "rupture" is defined as a breaking down or bursting asunder; a splitting apart of a steam boiler, as distinguished from a bursting or explosion.

2. Insurance. — Testimony that pressure in boiler blew hole therein held sufficient for jury on question whether it constituted "explosion" within policy.

Evidence tended to show that cause of damage to boiler was accumulation of sediment at point where aperture subsequently appeared, thereby preventing equal distribution of heat, and that result of such a deposit is that metal opens after stretching down to such a thinness that it can no longer hold pressure.

3. Insurance. — In finding for insured suing on explosion policy, jury should award difference between "cash value" of boiler immediately before and after explosion, but if believing that boiler was adequately repaired jury should award cost of repairs plus difference, if any, between such cash values not exceeding amount claimed.

The term "cash value" as so used means price which boiler would bring when offered for sale by one who desired to sell but was not compelled to do so, and when bought by one who desired to purchase, but was not compelled to do so.

Appeal from Jefferson Circuit Court

TRABUE, DOOLAN, HELM & HELM for appellant.

WOODWARD, HAMILTON & HOBSON for appellee.

OPINION OF THE COURT BY JUDGE RICHARDSON.

Reversing.

The B & B Ice & Coal Company was the owner of a horizontal, tubular, 150 horse power boiler, encased with brick, and used by it in the manufacture of ice in its plant at Louisville, Ky. Its original cost was $1,500. It had been in use seven or eight years prior to its bursting which is the cause of this litigation. The cost of setting and encasing it was about $1,500, making the cost of the boiler in place at the time it was damaged, $3,000. The Travelers Indemnity Company, Hartford, Conn., for a premium of $218.40, issued its policy to the B & B Ice & Coal Company, insuring the boiler against explosion for a period of three years, beginning January 10, 1928, to January 12, 1931, 12 o'clock noon, standard time.

The policy defines the word "explosion" thus:

"`Explosion' shall mean only the sudden rupture or sudden collapse of a boiler or of its furnace, flues, or other parts, caused by pressure of steam therein, or if used for the storage of compressed air, caused by pressure of air therein."

The insurance company limited its liability by this clause:

"In no case shall the company be liable for more than the actual and immediate damage to property, estimated according to the true cash value of the property at the time of the explosion, proper deductions for previous depreciation having been made, nor in excess of the limits of indemnity."

The policy stipulates that the company's total liability on account of any one explosion shall not exceed $10,000.

It is claimed by the B & B Ice & Coal Company that on the 21st day of May, 1930, the boiler sustained a sudden rupture of its furnace caused by the operation of the steam therein, and it was thereby damaged $1,800. It gave immediate notice thereof to the Travellers Indemnity Company, but it failed and refused to pay the damage, hence this action.

The insurance company as a defense presents a traverse. A trial before a jury resulted in a verdict in favor of the B & B Ice & Coal Company for $1,800. The insurance company is here seeking a reversal, claiming that the evidence does not show that the explosion was one within the terms of the policy, or if it was, then "the damages awarded by the jury were excessive, and not assessed according to the correct rule."

It concedes that a rupture occurred, but insists that it "was not sudden within the meaning of this word, as it is used in the policy."

On this theory, at the conclusion of the evidence of the plaintiff, and also at the conclusion of all the evidence, it offered a peremptory instruction which was refused by the court. The court gave instructions 1, 2, 3, and 4. Instruction No. 1 directed the jury if they believed from the evidence the boiler exploded, to find for the B & B Ice & Coal Company. Instruction No. 2 is a converse of No. 1; No. 3 defined the word "exploded" or "explosion" in the language of the policy, and No. 4 fixed the criterion of damages. The insurance company offered an instruction directing that unless the jury believed from the evidence the rupture of the boiler occurred suddenly, then there was no explosion. Instruction No. 2 offered by it merely directed the jury that the defendant had the right to repair the boiler, and that it was not liable for the cost of repairs if the explosion occurred as defined in instruction No. 1, offered by it. The determinant question is, "Was there a sudden rupture of the boiler as this term is used in the policy?"

The evidence for the insurance company shows that the cause of the damage to the boiler was a deposit of sediment, either of scale, oil, or other substance. The time ordinarily required for the assembling of such a deposit is from 10...