Western & Atl. Pipe-Lines v. Home Ins. Co.

• Citation: 145 Pa. 346,22 A. 665
• Decision Date: 05 October 1891
• Docket Number: 124
• Parties: WESTERN & A. PIPE LINES v. HOME INS. CO
• Court: United States State Supreme Court of Pennsylvania

22 A. 665

145 Pa. 346

WESTERN & A. PIPE LINES v. HOME INS. CO

No. 124

Supreme Court of Pennsylvania

October 5, 1891

Argued October 21, 1890

APPEAL BY DEFENDANT FROM THE COURT OF COMMON PLEAS OF WASHINGTON COUNTY.

No. 124 October Term 1890, Sup. Ct.; court below, No. 116 February Term 1891, C.P.

Returnable to the first Monday of January, 1891, the Western & Atlantic Pipe Lines, a company incorporated under the act of April 29 1874, P.L. 73, and its supplement, act of June 2, 1883, P.L 61, for the storage and transportation of oil, brought assumpsit against the Home Insurance Company of the city of New York, claiming to recover upon a policy of insurance against loss or damage on oil by fire.

On April 17, 1889, the defendant company filed an affidavit of defence made by its secretary, W. L. Bigelow, averring as follows:

"The insurance, to recover which this action is brought, was upon 'oil while contained in tank No. 1, on plan situate detached 273 feet, on the Johnson farm,' valley of Chartiers creek. The said tank No. 1 was lifted from its place, and floated down the stream and against one of the bridges of the Chartiers rail way spanning said creek; and while in that position, part of the oil contained in the tank overflowed and was set on fire by some person.

"By its contract, the defendant company only agreed to insure against loss by fire while the oil was in the tank at the spot where it stood when the insurance was effected; and the defendant is advised and believes that said tank and oil have been, by a visitation of Providence, moved therefrom; and the loss having occurred while the oil was in a place of danger not contemplated by the parties, the plaintiff is not entitled to recover.

"The affiant further avers that it is impossible to determine, under the circumstances of the case, what proportion of the oil was destroyed by fire and what was carried away by flood."

On October 1, 1889, the defendant pleaded non-assumpsit.

At the trial, on May 28, 1890, the plaintiff company read in evidence a policy of insurance issued in consideration of the receipt of $62.50, insuring "the Western & Atlantic Pipe Lines against loss or damage by fire, to the amount of twenty-five hundred dollars.

"On oil while contained in the iron crude-oil tank, known as No. 1, on plan situate, detached 273 feet, on the Johnson farm at Johnson's station, on the line of the Washington branch of the Pittsburgh, Cincinnati & St. Louis railroad, on leased ground, Washington county, Pa."

The paragraph last quoted was in writing. By the terms of the policy, the insurance was to be in force from June 28, 1888, to June 28, 1889, "the amount of loss or damage to be estimated according to the actual cash value of the property at the time of the loss, and to be paid sixty days after due notice and proofs of the same shall have been made and received," etc. The policy contained, also, the following provisions:

"1. If an application, survey, plan or description of the property herein insured is referred to in this policy, such application, survey, plan or description shall be considered a part of this contract, and a warranty by the assured;" . . . .

"4. If the interest of the assured in the property be any other than the entire, unconditional and sole ownership of the property, for the use and benefit of the assured, or, if the building insured stands on leased ground, it must be so represented to the company and so expressed in the written part of this policy, otherwise the policy shall be void. When property has been sold and delivered, or otherwise disposed of, so that all interest or liability on the part of the assured herein named has ceased, this insurance on such property shall immediately terminate. Goods held on storage must be separately and specifically insured."

"9. Persons sustaining loss or damage by fire shall forth with give notice of said loss in writing, to the company, and, as soon thereafter as possible, render a particular account of such loss, signed and sworn to by them, stating whether any and what other insurance has been made on the same property, giving copies of the written portion of all policies thereon, also the actual cash value of the property and their interests therein; for what purpose and by whom the building insured or containing the property insured, and the several parts thereof, were used at the time of the loss; when and how the fire originated." . . . .

"In case of loss on property held in trust, or on commission, or if the interest of the assured be other than the entire and sole ownership, the names of the respective owners shall be set forth, together with their respective interests therein."

It was then shown, in substance, that the plaintiff company, at its pumping station on leased land at Johnson's station on the Chartiers Valley railroad, had a number of storage tanks, each having a capacity of about thirty-five thousand barrels of oil. Into these tanks was pumped the crude oil from the tanks at the wells of the producers, and out of them was pumped the oil intended for transportation. On August 21, 1888, by reason of a flood in Chartiers creek, the ground upon which tank No. 1 was situated became overflowed, and the tank was lifted from its foundation and carried into the creek, and thence down the creek until it was caught by the abutments of the railroad-bridge crossing, where it was stopped within the bounds of the leased premises, at a distance of between four hundred and five hundred feet from its original position. The tank, though somewhat battered about the top, remained in that place from about nine o'clock on the evening of the 21st, until about nine o'clock in the forenoon of the next day, when by some means oil in the creek, accumulated above the bridge and about the tank, took fire. The fire reached the oil in the tank and burned it. There was evidence tending to show that the oil burned in the tank was 3,616.55. barrels. There being other insurance, it was claimed that the defendant company was liable for one fourth of the loss.

The plaintiff company's agent having given notice of the loss, with the proofs thereof, the following letter dated October 11, 1888, was transmitted to the agent by W. L. Bigelow, the defendant company's secretary:

"DEAR SIR: We have your favor of the 2d inst., and in reply beg to say we regret exceedingly the loss sustained by your company, and would be pleased to reimburse you if we could see wherein you had any claim upon us either in law or equity. We insured oil in an iron tank located in a safe position, upon a good foundation, and charged you a premium which we considered adequate in view of its position; but an unforeseen disaster, in the shape of a flood, carried the tank from its position to a more dangerous one, whereby it was destroyed. In denying liability in this case we fail to see wherein we hazard our 'reputation for fair dealing,' or do you any injustice."

J. W. Craig, testifying for the plaintiff company of which he was the president, was asked on cross-examination: "Q. Who owned the oil in tank No. 1, at the time of the fire? A. The various customers of the Western & Atlantic Pipe Lines." On re-direct examination, the witness was asked:

"Q. I wish to know if you, or the Western & Atlantic Pipe Lines had entered into a contract with the customers of the line, by which you were bound to insure the oil in the tank?"

Objected to, as incompetent and irrelevant.

By the court: Objection overruled; exception.

"Q. I wish to know if you did replace the oil that was burned in this tank to your customers? -- This to show that in carrying out this contract we have proved he entered into with his customers, when this oil was lost to the customers he replaced it barrel for barrel to the customers."

Objected to as incompetent and irrelevant.

"Q. On whom did the loss of this oil fall, on the customers, or the pipe lines?"

Objected to as incompetent and irrelevant, and a matter with which the insurance company had no concern.

By the court: Objection overruled; exception.

"Q. At the time of the organization of the Western & Atlantic Pipe Lines, what action was taken by the stockholders in regard to the insurance of oil? -- The object is simply to show they said to every person who ran oil into that line that the Western & Atlantic Pipe Lines would be responsible and bound by the action of the company."

Objected to, as incompetent and irrelevant.

By the court: Objection overruled; exception.

In reply to the plaintiff's offers, admitted as above, the witness testified that the oil in the company's tanks was owned by the company's customers, and was held on storage, the company being entitled to a pipeage charge upon the sale of the oil to the consumer or refiner, and to a storage charge for such oil as remained in the line over thirty days; that the company had bound itself to its customers to keep the oil protected by insurance, and that when oil was lost the company purchased oil to replace it, barrel for barrel.

At the close of the testimony for the plaintiff, the defendant offering none, the court, McILVAINE, P.J., charged the jury in part as follows:

Now, gentlemen, a contract of insurance is an agreement for a consideration, to indemnify against loss. The extent and conditions of the indemnity are always to be found in the policy.

In this case, the contract, as we have already said, was to indemnify the plaintiff from loss by reason of fire, and the property covered by the agreement was "oil, while contained in the iron crude-oil tank known as No. 1" on this plan situated at Johnson's station. It is incumbent on the plaintiff to show that the oil for which they seek to recover the insurance money,...