Richmond Coal Co. v. Commercial Union Assur. Co., Ltd., of London, England

ROSS, Circuit Judge. This action was brought by the plaintiff in error against the defendant in error upon a policy of fire insurance issued by the defendant insuring the plaintiff against all direct loss or damage by fire on certain coal stored on the premises situated at the northwest corner of Howard and Spear streets, in the city of San Francisco, the policy, however, containing the provision that the insurance company— “shall not be liable for loss caused directly or indirectly by invasion, earthquake, insurrection, riot, civil war or commotion, or military or usurped power, or by order of any civil authority; or by theft; or by neglect of the insured to use all reasonable means to save and preserve the property at and after a fire, or when the property is endangered by fire in neighboring prem — 747 — ises; or (unless fire ensues, and, in that event, for the damage by fire only,) by explosion of any kind, or lightning, but liability for direct damage by lightning may be assumed by specific agreement hereon.” The trial resulted in a verdict for the insurance company. No question is made upon the evidence, the case being brought here upon objections of the plaintiff to the instructions given the jury, which are, in part, as follows; “The defendant has admitted that the plaintiff’s loss resulted directly or immediately from fire, the peril insured against; but it contends that the proximate or efficient cause of the loss was earthquake, notwithstanding the insured property was burned. Upon this issue I instruct you that if you find from the evidence that the loss was proximately, either directly or indirectly, caused by earthquake, your verdict, notwithstanding the insured property was destroyed by fire, should be in favor of the defendant; but if, upon the other hand, you find from the evidence that fire and not earthquake was the proximate or efficient, as well as the direct, cause of the loss, your verdict should be for the plaintiff. By proximate cause is meant a cause which naturally, by continuous sequence, unbroken by a new cause, produces a result; the proximate cause of an effect is not necessarily the cause which is nearest to— that is, immediately or directly produces—the effect; but it is the efficient dominant factor in the production or bringing about of the effect. The nearest or immediate cause of an effect may be merely an instrument of the dominant or efficient cause. * * * The law does not inquire into the cause of a proximate cause. When the proximate cause of an effect has been ascertained, the law ceases to make further inquiry, and ascribes the result exclusively to such cause. While the proximate cause of an effect frequently is, and generally may be, the nearest cause, yet mere distance in time or space is not the exclusive factor in the determination of the question whether or not a given cause is proximate or remote. Other elements are involved, any one of which may be of such a character as to subordinate the element of distance. The proximate cause of an effect is the cause to which the effect is attributed by the rational judgment of mankind. Your inquiry, therefore, in this case should be whether or not the earthquake of April 18, 1906, was the predominating and operating cause of the fire which burned the property of the Richmond Coal Company. The question is, not what cause was nearest in time or place, but what was the cause which set the other causes, if any there be, in operation? The causes, if any there be, which were merely incidents or instruments of a superior or controlling agency, are not the responsible ones, though they may be nearer in time and place, and, if you believe from all the evidence in this case that the earthquake caused the fire which spread to and burned the property of the plaintiff, it will be your duty to render a verdict in favor of the defendant insurance company and against the plaintiff coal company, no matter how many buildings or blocks such fire may have burned through or consumed before it reached the plaintiff’s property. * * * If you find and believe from the evidence in this case tha't the earthquake of April 18, 1906, caused, directly or indirectly, in the city and county of San Francisco, a fire in the vicinity of Fourth and Natoma streets; or a fire in the vicinity of Third and Minna streets; or a fire in the vicinity of Third and Howard streets; or a fire in the vicinity of First and Mission streets; or a fire in the vicinity of Market and Fremont streets, in what has been testified to as Mack & Company’s drug store; or a fire on Fremont street, between Howard and Mission streets, in what was known as the Martel Power Company’s plant; or a fire at No. 117 Steuart street, in the place known as ‘Alice’s’; or a fire at No. 48 Steuart street, between Market and Mission streets, in what was known as ‘Brown’s Store’; and that those fires, or any one or more of them so caused, spread by flame, spark, or heat, and burned uninterruptedly from building to building, or block to block, until they, or any one or more of them, reached and destroyed plaintiff’s property located and situated on the northwest corner of Howard and Spear streets—then I charge you that it is your duty, and you must be governed by what the evidence shows, to return a verdict in favor of the — 748 — defendant insurance company and against the plaintiff coal company. * * * The single thing for your determination in this ease, without regard to either of the parties, is the origin of the fires by which plaintiff’s property was destroyed. If the evidence has established that the fires by which plaintiff’s property was destroyed, no matter at what point, or from where they started, were caused by the earthquake of April 18, 1906, you must, without hesitation, render your verdict in favor of the defendant insurance company.” The question in the case being whether the earthquake was the proximate cause of the loss sued for, is it true, as matter of law, that, if the 'earthquake started the great fire which followed it, it necessarily constituted the proximate cause of the loss in the burning of every building or other thing to which such fires spread, without regard to the time elapsing between such starting of the original fires and the time of the burning of the particular building or thing in question, or its distance from the places where such starting of the fires occurred? It is a matter of common knowledge that the major portion of a great city cannot be destroyed, even by fire, in a single day, and that, in the nature of things, in an effort to stop such a great conflagration as that which destroyed almost all of the business section and much of the residence portion of San Francisco, there will be intervening events, such as explosions, back-firing, and dynamiting, and that the course of the flames may be changed by windstorms and other natural causes. The instructions complained of take no note of any of those things. The case of Insurance Company v. Tweed, 7 Wall. 44, 19 L. Ed. 65, was based upon a policy of insurance by which certain cotton in a warehouse was insured against fire, the policy containing an exception against fire which might happen “by means of any invasion, insurrection, riot or civil commotion, or any military or usurped power, explosion, earthquake, or hurricane.” In that case the Supreme Court said: “The only question to be decided in the case is, whether the fire which destroyed plaintiff’s cotton happened or took place by means of the explosion; for, if it did, the defendant is not liable by the express terms of the contract. That the explosion was in some sense the cause of the fire is not denied, but it is claimed that its relation was too remote to bring the case within the exception of the policy. And we have had cited to us a general review of the doctrine of proximate and remote causes as it has arisen and been decided in the courts in a great variety of cases. It would be an unprofitable labor to enter into an examination of these cases. If we could deduce from them the best possible expression of the rule, it would remain after all to decide each case largely upon the special facts belonging to it, and often upon the very nicest discriminations. One of the most valuable of the criteria furnished us by these authorities is to ascertain whether any new cause has intervened between the fact accomplished and the alleged cause. If a new force or power has intervened of itself sufficient to stand as the cause of the misfortune, the other must be considered as too remote. In the present case we think there is no such new cause. The explosion undoubtedly produced or set in operation the fire which burned the plaintiff’s cotton. The fact that it was carried to the cotton by first burning another building supplies no new force or power which caused the burning. Nor can the accidental circumstance that the wind was blowing in a direction to favor the progress of the fire towards the warehouse be considered a new cause. That may have been the usual course of the breeze in that neighborhood. Its force may have been trifling. Its influence in producing the fire in the Alabama warehouse was too slight to be substituted for the explosion as the cause of the fire.” The explosion in that case, as stated by the same court in the subsequent case of Scheffer v. Railroad Company, 105 U. S. 249, 251, 26 — 749 — L. Ed. 1070, “took place in the Marshall warehouse, which threw down the walls of the Alabama warehouse—the one insured, situated across the street from the Marshall warehouse—and by this means, and by the sparks from the Eagle Mill, also fired by the explosion, facilitated by the direction of the wind, the Alabama warehouse was burned.” Yet the Supreme Court held, in Scheffer v. Railroad Company, that the Tweed Case “went to the verge of the sound doctrine in holding the explosion to be the proximate cause of the loss of the Alabama warehouse.” And it did so, the court said, because the fire extended at once from the Marshall warehouse, where the explosion occurred, and because no new or intervening cause appeared. In the case of Milwaukee & St. Paul Railway Company v. Kellogg, 94 U. S. 469, 24 L. Ed. 256, the sparks from a steam ferryboat had, through the negligence of its owner, the defendant, set fire to an elevator, and the sparks from the elevator had set fire to plaintiff’s sawmill and lumber yard, which were from three to four hundred feet from the elevator. The court was requested to charge the jury that the injury sustained by the plaintiff was too remote from the negligence to afford a ground for a recovery. Instead of this, the court submitted to the jury to find— “whether the burning of the mill and lumber was the result naturally and reasonably to be expected from the burning of the elevator; whether it was a result which, under the circumstances, would naturally follow from the burning of the elevator; and whether it was. the result of the continued effect of the sparks from the steamboat, without the aid of other causes not reasonably to be expected.” The Supreme Court affirmed that ruling, and, in commenting on the difficulty of ascertaining in each case the line between the proximate and the remote causes of a wrong for which a remedy is sought, said: “It is admitted that the rule is difficult of application. ■ But it is generally held that, in order to warrant a finding that negligence, or an act not amounting to wanton wrong, is the proximate cause of an injury, it must appear that the injury was the natural and probable consequence of the negligence or wrongful act, and that it ought to have been foreseen in the light of the attending circumstances.” In the case of Insurance Co. v. Boon, 95 U. S. 117, 24 L. Ed. 395, the action was to recover upon an insurance policy upon goods, wares, and merchandise destroyed by fire in October, 1864, in a store at the city of Glasgow, Mo. The policy contained the following exceptions: “It is hereby declared that the company shall not be liable to make good any loss or damage by fire which may happen or take place by means of any invasion, insurrection, riot or civil commotion, or of any military or usurped power.” The policy had reference to conditions prevailing in Missouri during the Civil War. The city of Glasgow was attacked on the 15th of October, 1864, by an armed force of Confederates, under military organization, who surrounded and attacked the city. It was defended by the Union forces, but when it became apparent that the city could not be successfully defended, in order to prevent the military stores deposited in the city hall from falling into the possession of the Confederate forces, the city hall was set on fire, and it, with its contents, — 750 — was destroyed. Without other interference, agency, or instrumentality, the fire spread to the building next adjacent to the city hall, and from building to building through two other intermediate buildings to the store containing the goods insured, and destroyed them. During the time and until the fire had consumed such goods, the battle between the contending forces continued, and no surrender had taken place, nor had any of the Confederate forces entered the city. The court, referring to the law applicable to such a case, said: “The conclusion is inevitable that the fire which caused the destruction of plaintiff’s property happened or took place, not merely in consequence of, but by means of, the rebel invasion and military or usurped power. The fire occurred while the attack was in progress, and when it was about being successful. The attack, as a cause, never ceased to operate until the loss was complete. It was the causa causans which set in operation every agency that contributed to the destruction.” And, in referring to the case of Milwaukee Railway Co. v. Kellogg, supra, the court said: “The inquiry must always be whether there was any intermediate cause disconnected from the primary fault, and self-operating, which produced the injury.” The court held that, by reason of the events being so linked together as to form one continuous whole, the fire was excepted from the risks undertaken by the insurers. In the case of The G. R. Booth, 171 U. S. 450, 19 Sup. Ct. 9, 43 L. Ed. 234, these facts appeared: The steamship G. R. Booth was discharging her cargo at a dock in New York; part of it consisted of a number of cases of detonators. While she was being unladen, one of the cases exploded, making a large hole in the side of the ship, in the No. 4 hold, in consequence of which sea water rapidly entered the No. 4 hold and passed through into No. 3 hold, where there was a cargo of sugar belonging to the libelant, damaging the sugar. The bill of lading contained a proviso that: “The ship or carrier shall not be liable for loss or damage occasioned by the perils of the sea or other waters * * * by collision, stranding or other accidents of navigation, of whatsoever kind.” In the District Court the libel of the owner of the sugar was dismissed. The Circuit Court of Appeals certified the facts to the Supreme Court, and asked for instructions upon the following question: “Whether the damage to libelant’s sugar caused by the sea water which entered the ship through the hole made in her side by the explosion, without her fault, is a ‘loss or damage occasioned by the perils of the sea or other waters,’ or by an ‘accident of navigation of whatsoever kind,’ within the above-mentioned exceptions in the bill of lading.” The Supreme Court answered the question in the negative, saying in the course of its opinion: “In the case at bar, the explosion of the case of detonators, besides doing other damage, burst open the side of the ship below the water line, and the sea water rapidly flowed in through the opening made by the explosion, and injured the plaintiff’s sugar. The explosion, in consequence of which, and through the hole made by which, the water immediately entered the ship, must be considered as the predominant, the efficient, the proximate, the responsible cause of the damage to the sugar, according to each of the tests — 751 — laid down in the judgments of this court, above referred to. The damage to the sugar was an effect which proceeded inevitably, and of absolute necessity, from the explosion, and must therefore be ascribed to that cause. The explosion concurred, as the efficient agent, with the water, at the instant when the water entered the ship. The inflow of the water, seeking a level by the mere force of gravitation, was not a new and independent cause, but was a necessary and instantaneous result and' effect of the bursting open of the ship’s side by the explosion. There being two concurrent causes of the damage —the explosion of the detonators, and the inflow of the water—without any appreciable interval of time, or any possibility of distinguishing the amount of damage done by each, the explosion, as the cause which set the water in motion, and gave it its efficiency for harm at the time of the disaster, must be regarded as the predominant cause. It was the primary and efficient cause, the one that necessarily set the force of the water in operation; it was the superior or controlling agency, of which the water was the incident or instrument. The inflow of the sea water was not an intermediate cause, disconnected from the primary cause, and self-operating; it was not a new and independent cause of damage; but, on the contrary, it was an incident, a necessary incident and consequence, of the explosion; and it was one of a continuous chain of events brought into being by the explosion—events so linked together as to form one continuous whole.” In the light of these decisions of the Supreme Court, we think the court below went much too far in instructing the jury, as it specifically did, that if they should find and believe from the evidence— “that the earthquake of April 18, 1906, caused, directly or indirectly, in the city and county of San Francisco, a fire in the vicinity of Fourth and Natoma streets; or a fire in the vicinity of Third and Minna streets; or a fire in the vicinity of Third and Howard streets; or a fire in the vicinity of First and Mission streets; or a fire in the vicinity of Market and Fremont streets, in what has been testified to as Mack & Company’s drug store; or a fire on Fremont street, between Howard and Mission streets, in what was known as the Martel Power Company’s plant; or a fire at No. 117 Steuart street, in the place known as ‘Alice’s’; or a fire at No. 48 Steuart street, between Market and Mission streets, in what was known as ‘Browffis Store’; and that those fires, or any one or more of them so caused, spread by flame, spark, or heat, and burned uninterruptedly from building to building, or block to block, until they, or any one or more of them, reached and destroyed plaintiff’s property located and situated on the northwest corner of Howard and Spear streets—then I charge you that it is your duty, and you must be governed by what the evidence shows, to return a verdict in favor of the defendant insurance company and against the plaintiff coal company. * * * The single thing for your determination in this case, without regard to either of the parties, is the origin of the fires by which plaintiff’s property was destroyed. _ If the evidence has established that the fires by which plaintiff’s property was ' destroyed, no matter at what point, or from where they started, were caused by the earthquake of April 18, 1906, you must, without hesitation, render your verdict in favor of the defendant insurance company.” The contract of insurance here involved has a further important provision. In enumerating excepted losses, it is provided that the insurance company shall not be liable for losses caused by explosion of any kind, unless fire ensue, and, in that event, for the damage by fire only. Fire was the peril insured against, but when there was an explosion, the company, wishing to limit its liability to the damage by fire and exclude damage by the explosion, provided for a loss by explosion of any kind, providing a fire ensued, and then for the damage by the fire only. Where it has been ascertained that the proximate cause of a fire has been an explosion, the inquiry must stop there; it cannot go further and inquire as to the proximate cause of the proxi — 752 — mate cause, for, as said by the Supreme Court in Scheffer v. Railroad Co., supra, “such a course of possible or even logical argument would lead back to that ‘great first cause least understood’ in which the train of all causation ends.” Notwithstanding this clear limitation of the inquiry, the court be-. low instructed the jury as follows: “On this subject I instruct you that if you find that the fire originating on those premises ensued upon an explosion or explosions of any kind, and you also find that the fire was the one that destroyed the plaintiff's insured property, then your verdict should be for the plaintiff, unless you find that the destruction of such property was directly or indirectly caused by earthquake. If, as I have already explained to you, the earthquake was the proximate, efficient cause of the fire, the defendant will not be liable, even though the means by which the earthquake caused such fire was an explosion.” As a matter of course, the earthquake did not, and could not have, directly set the coal on fire. At most it created conditions from which fires were or may have started, possibly by the crossing of wires, or the upsetting of lamps or stoves, in various places in the city more or less remote from the insured coal. Under the specific instructions referred to, the jury, in determining whether the earthquake was the proximate or remote cause of the fire that injured the subject of the action, could not be controlled by, nor, indeed, give any consideration to, the circumstances whether or not any of the fires that were started, or may have been started, by the earthquake, extended “at once” to the insured property, as in the Tweed Case, or within any period of time which would serve as a reasonable connection between them, nor as to whether there were any new or intervening causes between the fires that were started or may have been started by the earthquake, and that which caused the loss sued for, such as explosion, back-firing, dynamiting, the course or force of the winds, if any such occurred, nor, in short, any of the “attending circumstances” referred to by the Supreme Court in the cases hereinbefore mentioned—all of which, in our opinion, were proper matters for the consideration of the jury in determining whether fire or fires started by the earthquake were the proximate cause of the damage to the insured coal. For the reasons stated, the judgment is reversed, and the cause remanded to the court below for a new trial.