Transatlantic Fire Insurance v. Dorsey

Alvey, J.,

delivered the opinion of the Court.

This was an action on a policy of insurance against loss by fire, issued by the appellants to the appellee, and which policy covered the appellee’s stock in trade, consisting of sulphuric acid, and sulphur in bulk and in ‘process *77 of manufacture, contained in a certain "building described in the policy. The policy contains a clause of exemption, declaring that the appellants shall not he liable for any loss that might he sustained from certain specified causes, among which is that “for any loss caused by the explosion of gunpowder or any explosive substance; nor by lightning, (unless specially mentioned;) or explosions of any land, unless fire ensues,-and then for the loss or damage by fire only, which loss shall be determined by the value of the damaged property after the casualty by explosion or lightning.”

The claim for loss states, “that the fire originated in consequence of a violent tornado, blowing the fire through the steam drum, and so bringing it in contact with escaping gases and air, causing, by the fire, an explosion."

The proof shows that there was a severe storm raging at the time, and that the building was prostrated suddenly, and the fall was immediately preceded by a considerable report; hut the witnesses were not agreed as to whether any portion of the building had been subject to the action of, fire, except a few boards that fell against an adjoining lime kiln, from which, some of the witnesses supposed, they took fire. The loss for which claim is made is for sulphuric acid wasted from the pan or acid chamber, which was broken, as it is supposed, in the fall of the building. The loss therefore, for which claim is made, is not for what was actually burned, hut for loss occasioned as the consequence of a fire, alleged to have been insured against by the appellants.

There was considerable diversity of opinion among the witnesses as to the true cause of the loss; whether it was to he attributed to actual combustion of material outside of the furnace or burners; to explosion of some explosive substance; or to the prostration of the building by the storm, without the agency' of fire.

*78 If the loss was occasioned by fire, as contended by the appellee, there is no pretence that the fire originated anywhere beyond the establishment containing the articles covered by the insurance. The theory of the appellee is, as maintained by a scientific expert examined upon the subject, that the damage to the property insured was the immediate result of the violent and instantaneous conflagration of sublimed sulphur diffused through the atmosphere immediately surrounding the boiler and sulphur burners; and that such conflagration was caused by flames blown out from the fire in the furnace or burners, by the storm then raging, and brought in contact with the diffused particles of sulphur: That while this rapid combustion could not be accurately termed an explosion, sublimed sulphur not being an explosive substance, it would have some of the incidents of an explosion; among, these, a report and concussion in the air, as described by some of the appellee’s witnesses: That this sudden combustion produced a vacuum, which was followed by a collapse,, and the fall of the building, breaking the acid chamber, and causing the waste of the contents.

On the other hand, the appellants gave proof tending to show that the building was suddenly prostrated by the violence of the storm, without the agency of fire, and that all the loss sustained was attributable to the fall of the building. And further, that, from the appearance and condition of the ruins, if combustion was in fact the moving cause of the fall of the building, it must have been by explosion, and not by producing a collapse, as maintained on the part of the appellee.

The Court below instructed the jury, that if they found that the loss sustained was of the subject-matter insured, and “ that such destruction or injury was directly caused by, or the result pf, fire,” then the appellee, was entitled to recover. The jury found for the appellee, and therefore, as we must assume, they found that the loss was *79 directly caused by, or was the result of, fire. And the question is, whether this instruction was correct, in view of all the evidence in the case.

It is certainly true as a rule of construction, that where an insurance company attempts to limit' or restrict the general operation of its contract of insurance, by special exceptions or exemptions, it is bound to do so by clear and explicit terms; and if it fail in this, it cannot complain that the party insured is given the benefit of any doubt that may be reasonably raised as to the nature or extent of the exception from the general risk assumed. Where, however, the terms of the contract are clear and explicit, they must be allowed their full force and effect; there being no distinction in this respect between the contract of insurance arid any other contract.

In this case, the exception of liability for explosions of any kind, is certainly very broad and comprehensive; but that exception must not be so construed as to defeat the main and principal object of the insurance.

If the prostration of the building and the consequent breaking of the acid chamber were produced by an explosion of any kind, without being caused by a precedent conflagration within the meaning of the policy, then there is clearly no liability on the part of the appellants. In other words, the loss occasioned by explosion alone would not be covered by the risk assumed by the insurers. It is not pretended that any part of the loss sustained was occasioned by fire that ensued the fall of the building. If such had been the case, the loss thus produced would have been covered by the policy, even though the fire had Originated in an explosion, and this by the terms of the exception. But where a fire has occurred, and is in progress, the effects of which are covered by the policy, and an explosion takes place as an incident or result thereof,— so as to increase the loss, — whether the whole of the damage or loss thus produced can be regarded as within the *80 protection of the insurance, in a case where the policy contains the exemption from liability for explosions, has been the subject of some diversity of judicial opinion. We think, however, both upon reason and the established rules of construction, that such loss should he regarded as within the risk assumed by the insurers. In such case, the fire is the direct and efficient cause of the loss, and the explosion hut the incident, and if the insurers intend to exclude such liability, they must do so by plain and unambiguous terms. Indeed, the difficulty, in such case, of ascertaining and distinguishing the loss to he attributed to the fire from that caused by the explosion,— separating the actual or probable effects of the explosion from those produced, or that would have been' produced, hut for the explosion, by fire alone, — at once furnishes strong reason for including the effects of explosion in the loss occasioned by the precedent fire, producing the explosion. The contrary Construction would do much to impair the security that should he afforded by policies containing the clause in question ; and especially would this he so, if what was said in the case of Stanley vs. The West. Ins. Co., L. R.,3 Exch., 71, were adopted; that is to say, that the onus in such case would he upon the insured to show the exact extent of the loss by fire as distinguished from that produced by the explosion; and his failure to do that would result in his misfortune rather than that of the insurers.

The case of Briggs vs. The Ins. Co., 53 N. Y., 446 , presents some features analogous to those of the present case. There the policy was upon certain machinery used for rectifying spirits. It contained a clause exempting the company from liability for losses “ caused by lightning, or explosions of any kind, unless fire ensued, and then for the loss or damage by fire only.” Vapors escaped from the works and came in contact with the flame of a lighted lamp in the room, and an explosion ensued which nearly *81 destroyed the entire building and machinery. A fire resulted which occasioned some damage, but small in comparison with that caused by the explosion. The Court of Appeals of Eew York, held, that the contact of the vapor in the room with the burning lamp was not a fire within the meaning of the risk assumed, and while it was held that the company was liable for the damage done by the fire which followed the explosion, it was held not to be liable for the loss occasioned by the explosion itself. It was suggested, however, that if the building had been on fire, and in the course of the conflagration an explosion had occurred, the company might have been liable.

So, in the case of the Ins. Co. vs. Foote, 22 Ohio St., 340 , the policy contained an exception of liability for “ any loss or damage occasioned by or resulting from any explosion whatever.” The insurance was upon a stock of liquors in a liquor store, with privilege of rectifying and manufacturing fine spirits by steam not generated in the building. The fire, by which the building and stock of merchandise were consumed, was occasioned by, and resulted from, an explosion of vapor, arising from the process of rectifying whiskey, mixed with the atmosphere of the still room, and which explosion was caused by this mixture coming in contact with a burning gas-jet in the room. It was there held that the fire thus, originating was within the exception, and the company, consequently, was not liable ; it not being provided, as in the present case, that the insurer should be liable for all loss by fire ensuing the explosion.

• There is often difficulty experienced, in these cases, in accurately defining the term explosion. As was-said in the case of Ins. Co. vs. Foote, just referred to, we all understand that the term is not used as a synonym of combustion. It bas at least some distinctive characteristics. An explosion, produced by ignition, according to common understanding, may be accurately enough de *82 scribed, for practical purposes, as a sudden and rapid combustion, causing a. violent expansion of the air, and producing a report more or less loud, according to the resistance offered. That it greatly varies in its degrees of violence, and the effects produced, are facts fully within the experience of every one. We must suppose that the term was employed in the policy in its ordinary and popular meaning; and it is a question for the jury to determine, in all such cases, whether there has been an explosion, how and by what means produced, and whether the loss sustained was directly caused by the explosion, or by an antecedent or subsequent fire, within the risk assumed by the insurers.

Here, the question of explosion as the direct cause of the loss, was entirely ignored by the first of the appellee’s prayers, which was granted by the Court. The jury were instructed, that if they found that the commodities of the appellee were destroyed or injured in the manner testified to by the witnesses ; and “ that such destruction or injury was directly caused by, or the result of fire, the plaintiff was entitled to recover.” By the terms of this instruction, if the fire had originated simultaneously with an explosion and terminated therewith, or had been communicated to some explosive substance coming in contact with the fire, in the furnace or the sulphur burners, without producing any other effect than that produced by the explosion itself, the injury would have been caused, if not directly by, certainly as the result of fire; and the jury likely so understood the instruction. A lighted match coming in contact with a keg of powder would' certainly produce an explosion, and as the explosion would be produced by fire, all the injury caused thereby might well be said to be directly caused by fire, or be the result thereof; and yet the burning match could no more be said to be the fire insured against, than the burning lamp or gas-jet in the cases to which we have referred.

*83 (Decided 17th March, 1881.)

We think, therefore, that the first prayer of the appellee should not have heen granted in the form in which it was presented. The question whether the loss was caused hy an explosion, and not hy fire, according to the distinction we have stated, should have heen submitted to the jury in more explicit terms than was done hy the instruction as given. The second instruction given at the instance of the appellee is free from objeetion ; and the first instruction, modified as we have indicated, together with the second prayer of the appellee, and the first prayer on the part of the appellants, which was granted, will place the case fully and fairly before the jury.

The appellants offered a number of prayers which were rejected by the Court below, and, upon careful examination of them, we think there was no error committed in their refusal. By the fifth of these prayers, the Court was requested to instruct the jury that the appellee could not recover, if there was no actual ignition of, or action of fire upon, the sulphuric acid, for the loss of which the suit was brought. There was clearly no error in rejecting this proposition. If there was a fire within the meaning •of the risk, and the loss was occasioned thereby, it is quite immaterial that the articles covered by the policy were not actually consumed or injured by contact with the flames. Loss by fire, within the meaning of the policy, will embrace all loss or damage of the subject of the insurance, which resulted directly from the occurrence of the fire. Therefore, though the acid was wasted by the crushing of the chamber, if the building fell as the result of a fire within the meaning of the policy, the loss would he fairly covered by the insurance.

Without referring more particularly to the rejected prayers, we shall reverse the judgment, and direct a new trial.

Judgment reversed, and new trial ordered.