Wilson & Toomer Fertilizer Co. v. Automobile Ins. Co.

• Decision Date: 30 August 1922
• Citation: 283 F. 501
• Parties: WILSON & TOOMER FERTILIZER CO. v. AUTOMOBILE INS. CO., and ten other cases.
• Court: U.S. District Court — Southern District of Florida

283 F. 501

WILSON & TOOMER FERTILIZER CO. v. AUTOMOBILE INS. CO., and ten other cases.

United States District Court, S.D. Florida.

August 30, 1922

Milam &amp Milam, of Jacksonville, Fla., for plaintiff.

Spalding MacDougald & Sibley and E. Marvin Underwood, all of Atlanta Ga., and Kay, Adams & Ragland, of Jacksonville, Fla., for defendants.

CLAYTON District Judge.

The above 11 suits have, for present purposes, been consolidated as the issues raised by the pleadings are the same in each case. Each action is upon a fire insurance policy, where the subject-matter of the insurance is the use and occupancy of a fertilizer plant. All of the policies are on standard form for fire insurance, and upon each there is pasted the commonly called 'use and occupancy' form or agreement. Each policy covers the same property, and all combined are for the sum of $74,000. On October 4, 1920, the plaintiff's fertilizer plant was destroyed by fire. The insurance companies having declined to settle for the loss, these suits are brought.

The thing insured in each case is the continued right and privilege of using the factory in producing new goods for sale, and covered indemnity for fixed charges and expenses and accruing profits in case of loss or damage by fire. Thus the purpose of the contract was to keep the property of the insured in a condition of continued availability to the owner, as far as could be afforded by the pledge of indemnity-- the uninterrupted use of the factory for the production and sale of goods, whereby fixed charges and expenses were carried and the creation of a profit to the industry was insured; and in case of loss or destruction of the property, profits and legitimate continuing charges or expenses would be paid by the insurer.

The method of determining the value of the use and occupancy of the factory is fixed by this policy. As indicated, actual loss of net profits, fixed charges, and expenses necessarily continued were covered as the matter of indemnity. The policy makes the value of the use and occupancy dependent upon the profits, fixed charges, and expenses. It therefore appears that this use and occupancy insured covers a tangible, incorporeal right, irrespective of whether the subject of insurance is corporeal or incorporeal property. The language of the declaration is in consonance with the wording of the policy.

The first count of the declaration is in the exact wording prescribed by the statutes of Florida for suit upon a fire insurance policy. The same is true of the second count, which contains, however, an averment that notice was waived by the insurer, and that the assured requested an appraisal and arbitration, which was refused by the insurer. The third count employs substantially the same language as the first count, but alleges more in detail the elements that constitute the use and occupancy loss; that is to say, it not only recites that the insurance covers the use and occupancy of the plant as described in the policy attached to the declaration, but also avers the elements that enter into the valuation of the use and occupancy, and particularizes the loss in a detailed way. The third count also alleges a partial arbitration. The fourth count is very much the same as the third. However, it alleges a use and occupancy loss, not only on the building, but on the machinery and equipment and stock contained therein, while the first three counts seek recovery for the loss of the use and occupancy of the factory. The fourth count also sets out the matter of arbitration and the refusal of the insurance company to pay according to the arbitration.

Attached to the declaration is a copy of the policy sued upon, and also a bill of particulars which shows as to each count the number of days of suspension of business resulting from the fire, the average daily production of the plant at the time of the fire, the net profit per ton of the manufactured goods at the time of the destruction, etc.

There are 25 assigned grounds of demurrer to the declaration. Some of them are general, some may be plausible, and others, in my opinion, are rather meticulous. The demurrer, it seems to me, can be reduced to an objection against the brevity of the prescribed statutory form of declaration, or to an objection that the brief form of declaration, which alleges only ultimate facts, should also allege the various detailed items that are properly set out in the bill of particulars attached to the declaration and made a part thereof.

Section 2648, Rev. Gen. Stats. of Florida, provides that--

'Forms of Declaration.-- The following forms shall be sufficient in the statement of the declaration of the respective causes of action therein set forth. They and like forms may be used with such modifications as may be necessary to meet the facts of the case; but nothing herein contained shall render it erroneous or irregular to depart from the letter of such forms, so long as the substance is expressed without prolixity.'

Then follow 22 prescribed forms of declarations; the last being a fire insurance policy, which is the one adopted by the plaintiff. This act was passed in 1901 (chapter 4935). The original act is entitled 'An act to prescribe a form of declaration in a suit on a fire insurance policy. ' It will be observed that by this act this form is not limited to fire insurance policies on buildings alone, but such form may cover a vessel, an automobile, or any kind of personal property, or rents, or royalties, or any subject-matter of indemnity. The statute expressly declares that this form shall be sufficient. Practically all of the grounds of demurrer urge insufficiency of the statutory form. For instance, grounds 2 and 3 of the demurrer object to the plaintiff's having failed to aver an insurable interest in the property in the matter desired by the defendant; 4, that no breach by the defendant is shown; 6, that the breach is alleged in the form of a mere conclusion; 8, that there is no averment of an ownership at the time of the loss; 9, that there is no allegation as to the property being used at the time of the fire; 10, 11, and 12, and others, urge fault against the allegations of the value of the property destroyed at the time of the fire, etc. All grounds attack the declaration because of its failure to allege certain matters not required by the statute.

Of course, the federal courts in an action at law must conform as near as may be to the practice, pleadings, and forms and modes of proceeding existing at the time in like causes in courts of record in the state within which such courts are held, any rule of court to the contrary notwithstanding. Rev. Stats. Sec. 914 (Comp. St. Sec. 1537). Therefore I am constrained to approve the procedure and practice which would be pursued in the state court of record in a cause like this. Of course it is familiar that there are numerous adjudged cases where the federal court could not for manifest good reason follow the state practice and procedure, and therefore declined to do so, but the conformity statute must be followed wherever practicable and proper in the administration of justice. The leading cases on the Conformity Act (Rev. Stat. Sec. 914 (Comp. St. Sec. 1537)), are collated in Spokane, etc., R. Co. v. Campbell, 241 U.S. 497, 502, 503, 36 Sup.Ct. 683, 60 L.Ed. 1125.

In Sears v. Eastburn, 10 How. (51 U.S.) 187, 13 L.Ed. 381, it was held that where the state of Alabama passed an act abolishing fictitious proceedings in ejectments, and to substitute in their place the action of trespass for the purpose of trying the title to lands and recovering their possession, the federal court should have conformed to the mode of proceeding prescribed by the state law. In Lowndes v. Huntington, 153 U.S. 1, 14 Sup.Ct. 758, 38 L.Ed. 615, it was held that the settled rule of decision in the courts of the state is controlling as to the form of the action, the title of the plaintiff to submerged lands, and the special defenses of the defendant. In Glenn v. Sumner, 132 U.S. 153, 10 Sup.Ct. 41, 33 L.Ed. 301, a suit for the recovery of a money judgment, it was said that the sufficiency and scope of pleadings, and the form and effect of verdicts, in actions at law, are matters in which the Circuit Courts (since the act of 1911 (Judicial Code, Act March 3, 1911, c. 231, 36 Stat. 1167, Sec. 291, in effect January 1, 1912, being Comp. St. Sec. 1268), and now, the District Courts) of the United States, are governed by the practice of the courts of the state in which they are held.

Other authorities are not necessary to support the proposition that this court ought to follow the state practice and procedure in this case, unless some good reason is shown to the contrary. I think an examination of the Florida statute and the practice thereunder discloses no reason to preclude this court from following the state procedure and practice.

It is true generally that, when the state statute prescribes a form of declaration, it is sufficient, and it is not subject to demurrer. Stansell v. Corley, 81 Ga. 453, 8 S.E. 868; Brewing Co. v. McKittrick, 86 Mich. 191, 48 N.W. 1086; Pollock v. Stanton County, 57 Neb. 399, 77 N.W. 1081. In Shinloub v. Ammerman, 7 Ind. 348, it is said:

'The spirit of the Code of 1852 is that the party shall place upon the record, in the form of averments, the real facts of the case, eschewing all fictions and repetitions. Where a form given by the statute dispenses with an averment which would otherwise be material, the statute by declaring the form sufficient, stands in the place of the averment.'

Moreover the Supreme Court of Florida, in St. Petersburg, etc., v. Battle, 66 Fla. 303, 63 So. 445, held that the statutory form for declaration on promissory note...