Mode, Ltd. v. F. F. Ins. Co.

This appeal is from a judgment rendered after respondent's general demurrer to appellant's complaint was sustained and appellant refused to plead further.

Appellant sought recovery upon policies of fire insurance issued by respondents, in the proportion that the face of the policy of each respondent bore to an entire loss sustained by appellant by reason of the destruction by burning of a quantity of antique jewelry in an incinerator.

The facts relative to the destruction of the jewelry and essential in the determination of the questions involved are set forth in appellant's complaint as follows:

"That the said antique jewelry was contained in a package which, . . . was inadvertently placed on a floor of the plaintiff's place of business, . . . shortly before the close of business . . . on the 28th day of November, 1939; that it was the regular and usual duty of an employee of the plaintiff, after the close of business, to sweep and clean the floors and premises of the plaintiff and to remove all debris, sweepings and trash to an incinerator in the basement of the plaintiff's place of business and there burn and destroy it; that in the regular performance of his duties the said employee did, during the night of November 28, and the early morning of November 29, 1939, sweep the floors, and without any knowledge whatever that the package containing the said jewelry was anything other than the usual waste accumulating on said floor in said department, did sweep the same with the refuse and debris on said floors and deposited the same in the said incinerator; that he thereupon following his usual duties, did build a fire in said incinerator and burned the trash; that the said employee and none of the plaintiff's employees, nor the plaintiff, had any knowledge whatsoever that the said jewelry had been so placed in the incinerator, and it was totally and completely destroyed by fire therein; that the fire was confined to the incinerator and that the purpose of the incinerator was to cheaply and for purposes of sanitation destroy the debris, dust, sweepings and trash daily accumulated in the plaintiff's place of business; that neither the plaintiff nor none of its employees intended to destroy the said jewelry, and its destruction was effected totally in ignorance of the fact that it was in said incinerator or destroyed therein until the 29th day of November, when the Gift Department Manager of the plaintiff discovered that the package was missing, and upon tracing its whereabouts the remains of the jewelry were discovered in the incinerator;

"XXXI "That the said jewelry was totally and wholly destroyed by fire in the said incinerator; . . . that the said jewelry was part of the property covered by and included in each of the policies and contracts of insurance hereinbefore referred to . . ."

The policies of the insurance sued upon contain the following provision relative to the coverage:

"In consideration of the stipulation herein named and of ____________________ Dollars premium does insure ________________________ for the term of ____________________________ from the ____________ day of ______________________________, 19 ________ at noon, against ALL DIRECT LOSS OR DAMAGE BY FIRE . . ."

The only question presented is whether the words "ALL DIRECT LOSS OR DAMAGE BY FIRE" protect appellant under the facts alleged in its complaint and admitted by the general demurrer. In other words, what did the parties intend by the word "fire" as used in the policies in question?

Appellant relies in the main upon Salmon v. Concordia FireIns. Co. of Milwaukee, (La.) 161 So. 340, and the reasoning therein, coupled with the doctrine of construction that a clause in an insurance policy is to be construed most strongly against the insurer, or liberally in favor of the insured.¹ Conceding such rule of construction prevails, nevertheless courts in states recognizing such rule (26 C. J. 72, sec. 70, note 19 and cases there cited), have uniformly distingished between "friendly" and "hostile fires" as bearing on the meaning of the words "loss by fire."

The word "fire" as used in fire insurance policies in common parlance has a well understood meaning of a "hostile fire." InWatson v. American Col. Ins. Co., (S.C.) 183 S.E. 692, the court emphasises such fact in the following language:

"In common parlance one has not had 'a fire' so long as it has only burned in the place where it was intended to burn, and the sense in which that word is used in common parlance accurately indicates the sense in which it is employed in a fire insurance policy."

In Reliance Insurance Co., v. Naman (Tex.) 6 S.W.2d 743, a situation almost identical in point of fact with that herein, it was held:

"Where a servant of the assured under a policy of insurance inadvertently placed jewelry in a furnace fire for heating the residence of the assured, and said jewelry was destroyed or damaged by fire wholly confined to such furnace, such damage was due to a friendly fire, for which the insurance company is not liable. . . . Where the fire which occasioned the damage is confined to the usual and ordinary place, such as . . . furnace, it is usually denominated a friendly fire, and as such not a fugitive one within the contemplation of the contract of insurance. . . . In the sense in which the word 'fire' is used in the policy, there has been no fire so long as it is kept within the proper and accustomed place. In common parlance one has not had 'a fire' so long as it has only burned in the place where it was intended to burn, and the sense in which that word is used in common parlance accurately indicates the sense in which it is employed in a fire insurance policy."

In Harter v. Phoenix Insurance Company (Mich.) 241 N.W. 196, the court held:

"A loss of articles placed, either inadvertently or purposely, in a friendly fire, is not compensable under a policy against loss by fire, and it was unnecessary to word the policy so as to cover such contingency."

The principles are announced in 26 C. J. 340, et seq as follows:

"It must be a hostile fire, that is one which becomes uncontrollable or breaks out from where it was intended to be and becomes a hostile element. . . . Where the fire is a friendly one, that is one which is employed for the ordinary purpose of lighting, heating, or manufacturing and is confined within its usual limits, as in the case of a blaze produced by lighting a match or gas jet or lamp, it is not a fire within the usual terms of the policy and recovery cannot be had for loss or damage caused thereby."

14 R.C.L. page 1216, sec. 396, announces the following:

"The word 'fire' as used in a fire insurance policy, has its common or usual meaning and usually the question whether there has been a fire is easy of solution. A distinction is usually drawn by the courts between a friendly and a hostile fire, and it is held that if fire is employed as an agent, either for the ordinary purposes of heating the insured building, for the purpose of manufacture, or as an instrument of art, the insurer is not liable for the consequences thereof, so long as the fire itself is confined within the limits of the agencies employed."

For further cases distinguishing between "friendly" and "hostile fires" as bearing on the meaning of the words "loss by fire" see the following: Weiner v. St. Paul F. M. Ins. Co.,207 N.Y.S. 279, affirmed in 210 N.Y.S. 935, 29 Am. Jur. 767, sec. 1016; Progress Laundry C. Co., v. Reciprocal Exchange, (Tex.) 109 S.W.2d 227; Cannon v. Phoenix Ins. Co. (Ga.)35 S.E. 775; Fire Ass'n of Philadelphia v. Nelson, (Colo.)10 P.2d 943; Fogarty v. Fidelity Gas Co. (Conn.) 188 A. 481; City of N.Y. Ins. Co.v. Gugenheim, (Tex.) 7 S.W.2d 588; Swerling v. Conn. FireIns. Co. (R.I.) 180 A. 343; O'Connor v. Queen Ins. Co., (Wis.)122 N.W. 1038, 133 A.S.R. 1081, 17 Am. Cas. 1118; Bilsky v.Sun Ins. Office etc. (Mo.) 84 S.W.2d 171; Hartford Fire Ins.Go. v. Armstrong, (Ala.) 122 So. 23; German American Ins.Co. v. Hyman (Colo.) 96 P. 27; Metropolitan Cas. Co. v.Bergheim, (Colo.) 122 P. 812; Lavitt v. Hartford Co. M. F. Ins.Co., (Conn.) 136 A. 572; Hansen v. Le Mars M. Ins. Asso., (Ia.) 186 N.W. 468, 20 A.L.R. 964; Sigourney Produce Co. v.Milwaukee M. Ins. Co., (Ia.) 235 N.W. 284; McGraw v. Home Ins.Co., (Kan.) 144 P. 821; Ann. Cas. 1916D 227; New Hampshire FireIns. Co. v. Ruppard, (Ky.) 220 N.E. 535; American TowingCo. v. German Fire Ins. Co., (Md.) 21 A. 533; Scripture v.Lowell M. F. Ins. Co., (Mass.) 10 Cush. 356, 57 Am. Dec. 111;Cole v. N. S. F. Ins. Co., (Mich.) 251 N.W. 400; Way v.Abington Mutual F. Ins. Co. (Mass.) 166 Miss. 67, 32 L. R. 608;Cabell v. Milwaukee M. Ins. Co. (Mo.) 260 S.W. 490; McDonald v.Royal Ins. Co. (Mont.) 40 P.2d 1005; Coryell v. Old ColonyIns. Co. (Neb.) 229 N.W. 326, 68 A.L.R. 222, 224 N.W. 684, 68 A.L.R. 227; Davis v. Law Union Rock Ins. Co., 1 N.Y. S. (2d) 344; Washington T. P. M. F. L. Ins. Asso. v. Sherrer, (Ohio) 168 N.E. 234; United L. F. M. Ins. Co. v. Foote, (Ohio) 22 Ohio St. 340, 10 Am. Rep. 735; Tannebaum v. Conn FireIns. Co. (Pa.) 193 A. 305; Solomon v. U.S. F. Ins. Co. (R.I.)165 A. 214, 166 A. 254; Mitchell v. Potomac Ins. Co.183 U.S. 42, 46 L. Ed. 74, 22 Sup. Ct. Rep. 22; Pappadakis v.Netherlands F. L. Ins. Co. 137 Wash. 430, 49 A.L.R. 402; 92 P. 641; Couch Cyc of Ins. Law, Vol. 5, sec. 1201, p. 43.

The meaning of the term "loss by fire" as being a "hostile" and not a "friendly fire" has been so extensively and long recognized that reasonably we must consider, even under liberal interpretation that both insured and insurer contracted with such definition in mind, determinative of what losses were covered.

From the allegations of the complaint it appears the fire in the incinerator in which the antique jewelry was accidentally placed was intentionally set, at no time escaped from its usual or intended limits, was at all times under control and was such a fire as was customarily used for the purpose of burning waste and debris gathered up and deposited in the incinerator by employees of appellant. It was a friendly fire as defined by the courts generally, and the loss or damage sustained by appellant was not "direct loss or damage by fire" as the ordinary usage and intended meaning of the words denote when placed within the terms of an insurance policy. The court was correct in holding, by sustaining respondent's demurrer, that the loss in question was not by fire within the contemplation of the policies.

The judgment is affirmed. Costs awarded to respondents.

GIVENS and AILSHIE, J.J. concur.

¹ Maryland Cas. Co. v. Boise Street Car Co., 52 Idaho 133,11 P.2d 1090; Sweany Smith Co. v. St. Paul Ins. Co., 35 Idaho 903,206 P. 178; Sant v. Continental Life Ins. Co., 49 Idaho 691,291 P. 1072.