Western Assur. Co. v. J.H. Mohlman Co.

• Decision Date: 11 October 1897
• Docket Number: 142.
• Citation: 83 F. 811
• Parties: WESTERN ASSUR. CO. OF TORONTO v. J. H. MOHLMAN CO.
• Court: U.S. Court of Appeals — Second Circuit

83 F. 811

WESTERN ASSUR. CO. OF TORONTO v. J. H. MOHLMAN CO.

No. 142.

United States Court of Appeals, Second Circuit.

October 11, 1897

This case comes here on a writ of error to review a judgment of the circuit court, Southern district of New York, in favor of defendant in error, who was plaintiff below. The action was brought to recover loss under a policy of fire insurance issued by the plaintiff in error, who was defendant below. The relevant parts of the policy are as follows:

'The Western Assurance Company, in consideration of $65 premium does insure for the term of one year from November 12 1894, at noon, to November 12, 1895, at noon, against all direct loss or damage by fire except as hereinafter provided, to an amount not exceeding $10,000 on stock (here follows the usual percentage co-insurance clause), J. H Mohlman & Co., as now or hereafter constituted, $10,000 on stock of groceries and other merchandise, not hazardous, hazardous, and extrahazardous, including all material and supplies, the property of the assured, or held in trust or on commission, etc., in the event of loss or damage by fire, all while contained in the brick building situate Nos. 359 Greenwich and 19 Jay St., N.Y. City, occupied solely by the assured. Privileged to use kerosene oil or electricity, etc. This company shall not be liable beyond the actual cash value of the property. (Here follows the usual clause as to appraisement and abandonment.) This entire policy shall be void if the insured has concealed or misrepresented, in writing or otherwise, any material fact or circumstance concerning this insurance, or the subject thereof, or if the interest of the insured in the property be not truly stated herein or in case of fraud or any false swearing, etc. This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if the insured now has or shall hereafter make or procure any contract of insurance, whether valid or not, on property covered in whole or in part by this policy; or if the subject of insurance be a manufacturing establishment, and it be operated in whole or in part at night later than ten o'clock; or if it cease to be operated for more than ten consecutive days; or if the hazard be increased by any means within the control or knowledge of the insured; or if mechanics be employed in building, altering, or repairing the within-described premises for more than fifteen days at any one time; or if the interest of the insured be other than unconditional and sole ownership; or if the subject of insurance be a building on ground not owned by the insured in fee simple; or if the subject of insurance be personal property, and be or become incumbered by a chattel mortgage; or if, with the knowledge of insured, foreclosure proceedings be commenced, or notice given of sale of any property covered by this policy by virtue of any mortgage or trust deed; or if any change, other than by the death of an insured, taken place in the interest, title, or possession of the subject of insurance (except change of occupants without increase of hazard), whether by legal process, or judgment, or by voluntary act of the insured, or otherwise; or if this policy be assigned before a loss; or if illuminating gas or vapor be generated in the described building (or adjacent thereto) for use therein; or if (any usage or custom of trade or manufacture to the contrary notwithstanding) there be kept, used, or allowed on the above-described premises, benzine, benzole, dynamite, ether, fireworks, gasoline, greek fire, gunpowder exceeding twenty-five pounds in quantity, naphtha, nitroglycerin or other explosives, phosphorus, or petroleum or any of its products of greater inflammability than kerosene oil of the United States standard (which last may be used for lights, and kept for sale according to law, but in quantities not exceeding five barrels, provided it be drawn and lamps filled by daylight, or at a distance not less than ten feet from artificial light); or if a building herein described, whether intended for occupancy by owner or tenant, be or become vacant or unoccupied, and so remain for ten days. This company shall not be liable for loss caused directly or indirectly by invasion, insurrection, riot, civil war or commotion, or military or usurped power, or by order of any civil authority, or by theft, or by neglect of the insured to use all reasonable means to save and preserve the property at and after a fire, or when the property is endangered by fire in neighboring premises, or (unless fire ensues, and, in that event, for the damage by fire only) by explosion of any kind, or lightning; but liability for direct damage by lightning may be assumed by specific agreement hereon. If a building, or any part thereof, fall, except as the result of fire, all insurance by this policy on such building or its contents shall immediately cease. This company shall not be liable for loss to accounts, bills, currency,' etc.

By a rider attached to the policy on or about April 22, 1895, the insurance was transferred to cover similar described property while contained in brick buildings Nos. 38-40 North Moore street and 156 Franklin street. On April 30, 1895, the property insured was destroyed by fire. At or about the time of the fire the building fell, and the issue of fact in the case was whether the fall preceded the fire, or was itself the result of the fire. Upon this issue the testimony was conflicting, and the verdict of the injury was adverse to the insurance company. The questions presented by the writ of error are solely legal ones, consisting of alleged errors in the charge of the court as given to the jury, in the court's refusals to charge as requested, and in its admission of and refusal to admit evidence.

Michael H. Cardozo and Edgar J. Nathan, for plaintiff in error.

Treadwell Cleveland, for defendant in error.

Before PECKHAM, Circuit Judge, and LACOMBE and SHIPMAN, Circuit Judges.

LACOMBE Circuit Judge (after stating the facts).

The trial judge charged the jury that the burden of proof rested upon the defendant (the insurance company) to show by a preponderance of evidence that 'the fall preceded the fire'; that 'this building did not fall as the result of fire.' Exceptions to the charge and to refusals to charge the converse of this proposition sufficiently present the question of correctness of this ruling. It will not be necessary to repeat the text either of the charge or of the requests. The trial judge construed the clause referring to a fall of the building as a proviso or condition subsequent defeating any claim of the insured. If it be such, no one here disputes the proposition that the burden of proving the happening of the subsequent condition would rest upon the insurer. The defendant, however, contends that the clause is an exception to the general liability assumed by the insurance company, and that, therefore, it was for the insured to show that the loss did not come within the terms of the exception. The general rule is well expressed by Earl, J., in Slocovich v. Insurance Co., 108 N.Y. 56, 14 N.E. 802:

'Where there is an insurance against a loss by fire, and it is proved or admitted that the property insured has been destroyed by fire, the loss is brought literally and exactly within the terms of the policy. If, in such a case, the insurance company claims to be exempt from paying the sum insured because there has been a breach of some condition contained in the policy, or the violation of some obligation or duty imposed upon the insured by the law or contract, the burden rests upon it to establish the facts which it thus relies upon as a defense to the claim under the policy.'

The diligence of counsel has presented a long array of authorities bearing upon this assignment of error. The question has been expressly decided in accordance with defendant's contention in Pelican Ins. Co. v. Troy Co-op. Ass'n, 77 Tex. 225, 13 S.W. 980, and Insurance Co. v. Boren, 83 Tex. 97, 18 S.W. 484, and in accordance with plaintiff's contention in Insurance Co. v. Bamberger (Ky.) 11 S.W. 595, in Blasingame v. Insurance Co., 75 Cal. 633, 17 P. 925, and in Insurance Co. v. Crunk, 91 Tenn. 376, 23 S.W. 140.

In the Texas case the policy contained the following provisions:

'(1) This company shall not be liable for any loss or damage by fire caused by means of hurricane. (2) If the building shall fall, except as the result of fire, all insurance of this company on it or its contents shall immediately cease and determine.'

The fire occurred during or immediately following a severe hurricane, which at least partially blew the house down, and there was evidence tending strongly to show that the fire had its origin in the breaking of a lamp by falling timbers. The court held:

'The provisions of the policy above noticed are exceptions to the general liability assumed by appellant, and the petition should have averred that the fire did not occur from one of the excepted causes. This was necessary to show a cause of action, for the company did not insure against loss resulting from a fire caused by a hurricane, nor were its policies binding at all for a loss caused by fire occurring after the fall of the house, unless the fall was caused by fire.'

In the Kentucky case the policy contained this clause:

'This company shall not be liable under this policy for loss and damage if the building herein described, or any part thereof, fall, except as the result of fire.'

The jury were instructed that defendant was not liable for any loss or damage, if the building fell, unless the fall was the result of fire, and that:

'The burden is upon the defendant to show by the evidence that the building, or

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