Automobile Insurance v. Thomas

Bond, C. J., delivered the opinion of the Court. These are suits upon policies of fire insurance in the New York standard form, with riders to cover loss by lightning, for loss and damage to an insured building from the fall upon it of a wall of a neighboring building, during a storm, thirty-eight days after fire had destroyed that neighboring building and left the wall standing. At the trial there was a dispute of fact on the question whether lightning had struck and thrown down the wall; and the questions of law presented were whether the loss from the falling over of the wall would be a “direct loss or damage,” either by fire or by lightning, within the meaning the policy, and whether the claimants had given the requisite notice and proofs to support claims for loss by lightning, if lightning should be found to have caused the fall of the wall. There was a further question of the form of verdict.

The insured building is in Erostburg, and the fire occurred, on March 12th, 1925, in a building beside it, but separated from it by an alley ten or twelve feet wide. Crossing the alley, the flames caused a loss or damage in the insured building of $841, and liability of the insurers for that loss is not disputed. The fire left standing portions of walls of the neighboring building on the front and on ²⁵⁶ the alley side of the lot, one story higher than the insured building, and bare and unsupported except to the extent that a chimney in the side wall may have reinforced it. There was testimony offered for the defendant that, after the fire, the wall had been inspected by an architect, with a view to its use in a new building if its condition permitted, and that he concluded that there was no danger of a fall of the front wall, and thought the side wall stronger still.

On April 19th, 1925, however, the side wall fell over during a storm, and caused the additional and larger loss to the insured property which is disputed. Notices were given to the insurers, and proof furnished them in due time of the combined losses, and suit was entered on each policy for its share of the combined losses, all alleging that the whole was “a direct result of a fire which occurred on March 12th, 1925.” And ten months later, before these first suits were reached for trial, an additional suit was entered on each policy, alleging that the property insured was damaged and destroyed as a result of lightning striking the wall of the neighboring building which had been left standing after the fire. No notice was given, or proofs of loss furnished, specifying lightning as the cause of the loss, and one of the defenses to the suits is based on that fact. All four cases were consolidated for trial by stipulation of the parties, and a single verdict and judgment were entered for the combined losses, for that from the flames and that from the subsequent fall of the wall.

The witnesses agreed that the wall fell during a heavy thunder storm, with much rain and lightning, but there was some difference on the severity of the storm, and a sharp difference on the occurrence of any lightning just before the fall of -the wall. There was evidence, however, of actual striking of the wall by lightning and its fall as a consequence of the stroke. The rulings complained of were all in granting or rejecting prayers for instructions to the jury, according as the trial court decided the questions of law presented. Taking up, first, the question of the applicability to this ²⁵⁷ subsequent loss of the insurance against lire only, that is, putting aside for the present the possibility of a lightning stroke as the cause of the fall of the wall, as if the jury had found against that possibility, it is to be borne in mind that we have a written contract to apply, and that it is by the intention of the parties that the applicability of the insurance is to be tested.

There is a distinction to' be observed between causes of loss for which liability is imposed by law, in tort, and causes of loss for which a party may have contracted to be liable. The tests are not the same for both obligations, although in particular instances the causes for which liability attaches might be included under each test. We are aware that some courts have declined to accept this view, but we have not been able to agree with them. In the course of the discussion in Leyland Shipping Co. v. Norwich Union Fire Co. (1918), A. C. 350, 369, on the cause of loss to an insured vessel, Lord Shaw said: “The true and the overruling principle is to look at a contract as a whole and to ascertain what the parties to it really meant.

What was it which brought about the loss, the event, the calamity, the accident. And this not in an artificial sense, but in that real sense which the parties to a contract must have had in their minds when they spoke of cause at all.” And in Bird v. St. Paul Fire and Marine Ins. Co., 224 N. Y. 47 , the court, Cardozo, J., said: “General definitions of a proximate cause give little aid. Our guide is the reasonable expectation and purpose of the ordinary business man when making an ordinary business contract.” And this we take to be the one guide consistent with the function of deducing the obligation from the agreement of the parties, rather than imposing an obligation on them.

Transatlantic Fire Ins. Co. v. Dorsey, 56 Md. 70 ; Bower & Kaufman v. Bolhwell, 152 Md. 392 . While there may have been some difference of opinion on the question whether the phrase “direct loss or damage by fire” is meant to restrict the insurance to fire on ¡he prem ²⁵⁸ ises (See Everett v. London Assurance, 19 C. B. N. S. 126, and California Co. v. Union Compress Co., 133 U. S. 387 , 415 to 416), we take it to be settled now by the great weight of authority, and the general understanding and intention, that the insurance is not so restricted. New York etc. Express Co. v. Traders Co., 132 Mass. 337 , 381; Ermentrout v. Cirard Co., 63 Minn. 305 ; Russell v. German Co., 100 Minn. 528 ; Western Assurance Co. v. Hann, 201 Ala. 376 ; Bird v. St. Paul Fire and Marine Ins.

Co., supra; Johnson v. West of Scotland Co., 7 Court of Sess. Cas. (Scotch, 1828), 52. It seems to us clear, as has been pointed out in some of these cases, that practical men selling or obtaining insurance would not have in their minds any distinction between such common incidents of a fire as the damage from the breakdown of the structure and the damage from burning.

Both alike would be considered losses or damages by the fire. And we are equally satisfied that practical men would not intend any distinction to he drawn between flame extending from a fire in a next-door building and the structural breakdown from the fire extending its effects over upon the building insured, but would consider losses from one and the other source as alike covered by their fire insurance. But it seems to us a different question is presented by the fall of a next-door wall left standing for a considerable, time after the fire, for lapse of time brings with it weakening influences; wind and weather, and perhaps other forces, such as repeated vibrations, work upon the wall; and it seems unlikely that insurance against these forces would be intended except within some limits. This is more clearly apparent if we suppose a case of a wall left standing a year or more after a fire, and maintained for future use.

If the insurance covers loss from a fall after such a period as that, it must cover the risk of the year’s cumulative effects of such force as wind and weather vibrations, and might be said to insure the judgment and care of the owner who maintains it. There seems to us to be an analogy in those cases of marine insurance in which the maintenance of a bad condition, ²⁵⁹ rather than the accident which caused the condition, has been treated as the cause of a loss. In Hazard v. New Eng. Marine Co., 1 Sumner, 218, a coppered ship had her false keel broken off by striking on a rock, in worm-infested waters; no repairs were made, the worms reached the bottom, and in the course of many months rendered the ship wholly innavigable.

Justice Story held that in no just sense could the loss by the worms be deemed a loss immediate upon the accident, which was covered by insurance. The neglect to repair was the immediate or proximate cause of the loss, and the accident only the occasion or remote cause. That case was appealed, but the Supreme Court held merely that damage by worms was not a peril insured against in any event. 8 Peters, 557, 583 ; Copeland v. New England Marine Co., 2 Metc. (Mass.), 432, 437; Gen.

Mut. Ins. Co., v. Sherwood, 14 How. 357 , 365; Bradhurst v. Colonial Ins. Co., 9 Johns, 17; Schieffelin v. N. Y. Ins.

Co., 9 Johns, 21; Amer. Ins. Co. v. Center, 4 Wend. 45 ; Currie v. Bombay Ins. Co., L. R. 3 P. C. 82; 2 Arnold, Marine Insurance and Average (11th Ed.), sec. 785.

There must, of course, be a lapse of time between a fire and the clearing of dangerous condition left by it, and during such time as is reasonably necessary for that purpose it may be said that the immediate or proximate effects of