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may operate through successive instruments, as an article at the end of a chain may be moved by the force applied at the other end, that force being the proximate cause of the movement. The question always is, was there an
unbroken connection between the wrongful act and the injury, a continuous operation? Did the effects constitute a continuous succession of events so linked as to make a natural whole, or was there some new and independent cause intervening between the wrong and the 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." Again, as summarized by Ostrander, "the proximate cause is not the one which is nearest in time to the result, unless such cause be independent. That must be regarded as proximate which is primary, efficient, the one which is the cause of causes. That which is only incidental and contributing is in no sense responsible for the disaster.''1 If, in such cases, the insurance company pays the claim, it becomes subrogated to the rights of the original insured, to .reimburse himself through the collection of damages from the party whose negligence caused the loss. The company, however, must prove that the proximate or real cause of the loss was the negligence of the party from whom they wish to collect damages.
Numerous cases arise, however, where the doctrine of proximate oause is not connected with the subject of subrogation, but must be used to determine the liability of the insurance company itself. This is well illustrated in the case of The Lynn Gas and Electric Co. vs. The Meriden Fire Insurance Company (158 Mass., 570). Here the plaintiff was insured for a large amount under the Massachusetts standard fire-insurance policy, against direct loss or damage
1 D. Ostrander, "Law of Fire Insurance," p. 365.
c by fire, and the policies of the several companies covered all the machinery and other property of the plant. It so happened that all the wires transmitting power from the building to other parts of the city emanated from a single wire tower, near which stood a waste-paper basket. In some way this basket caught fire, which fire was immediately extinguished, but not until the flames had come in contact with the mass of wires, thus producing a short circuit, which in turn affected certain pulleys and belts, until all the machinery in the building was severely strained or wrecked. The fire had done little or no damage directly, although the indirect damage reached large proportions. The companies, in a test case, denied liability, but the court held that the policies insured everything in the building. '' The defendants when they made their contract understood that the building contained a large quantity of electrical machinery, and that electricity would be transmitted from the dynamos, and would be a powerful force in and about the building. They must be presumed to have contemplated such effects as fire might naturally produce in connection with machinery used in generating and transmitting strong currents of electricity. ''
The Meaning of "Loss or Damage by Fire."—Loss or damage by fire has reference only to losses which are the result of the actual ignition of the insured premises or of property near by. It is not necessary, however, that fire should actually have come in contact with any part of the insured property. Thus where the insured property is damaged by water used in extinguishing a fire in an adjacent building, or where, because of fire in a neighboring building, the damage is caused by the falling of a wall, insurance companies have again and again been held liable, even though no part of the insured property was ever reached by the fire. On the other hand, fire does not include "heat of a degree too low to cause ignition,'' and insurance companies are not liable for loss or damage occasioned by overheating, as long as the fire which caused the excessive heat has not left its proper receptacle. "Loss or damage by fire" also includes damage caused by water used in preventing the destruction of the building and its contents; and, unless stipulated to the contrary in the policy, comprises loss by theft or damage by breakage resulting from the process of removing goods in order to save them from destruction.
Excluded Risks.—Unless the policy contains provisions to the contrary, fire-insurance companies are held liable for loss or damage by fire occasioned by any cause not expressly excepted in the policy. In view of this general rule, and for the purpose of protecting the company against certain undesirable risks, the standard fire policy contains the following provisions (lines 31 to 37, inclusive):
"This company shall not be liable for loss caused directly or indirectly by invasion, 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 premises; 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.
"If a building or any part thereof fall, except as the result of fire, all insurance by this policy on such building or its contents shall immediately cease."
A few words of explanation are necessary to show why the standard policy expressly excludes some of the foregoing risks. The reasons, briefly stated, are as follows:
1. Loss resulting from invasion, riot, order of any civil authority, etc., are not covered by the standard policy, partly because they are usually extraordinary losses occurring under conditions which make the extinguishment of the fire difficult, and partly because in most cases they may be recovered from the municipality or state.
2. Loss through theft in the process of removing goods is expressly eliminated, because it is especially hazardous from the standpoint of the moral hazard.
3. Loss by explosion must be distinguished from that caused by the subsequent fire, and the courts have repeatedly held that a fire and an explosion risk are inherently different. Therefore the standard fire policy provides that the company shall not be liable for loss by explosion of any kind, unless fire ensues, and in that event for the damage by fire only. This rule at times presents difficult cases for adjustment, because where a fire immediately follows an explosion it is frequently impossible to determine the amount of loss occasioned by the explosion, as separate from the loss caused by fire.
4. Loss through lightning is not covered by the policy unless the risk has been specifically assumed by an agreement indorsed on the policy, except where fire results from the lightning, and then, as in the case of explosion, the company's liability is limited to the damage occasioned by the fire. The agreement indorsed on the policy, which is called the lightning clause, usually reads as follows:
"This policy shall cover any direct loss or damage caused by lightning; (meaning thereby the commonly accepted use of the term lightning, and in no case to include loss or damage by cyclone, tornado, or windstorm) not exceeding the sum insured nor the interest of the insured in the property, and subject in all other respects to the terms and conditions of this policy."
5. Loss in case the building has fallen "in whole or in part'' is not covered by the polioy, on the theory that when the insured building has fallen in part or in whole, it is no longer the original building which burns, but simply the debris.
Excluded Articles.—Line 38 of the standard policy provides against the insuring of a list of enumerated articles, which, in most cases, are simply evidences of ownership, and therefore not inherently valuable. The policy reads: "This company shall not be liable for loss to accounts, bills, currency, deeds, evidences of debt, money, notes, or securities." These articles are not insured, partly because they afford opportunity for fraud, being subject to easy concealment; and partly because the determination of the value of these articles is difficult, the company being obliged in most cases to depend upon the statements of the insured.
Another group of articles mentioned in line 39 and following are of such a nature that the companies insure them only if liability is specifically assumed by indorsement on the policy. With reference to these articles the policy reads: "This company shall not be liable . . . unless liability is specifically assumed hereon, for loss to awnings, bullion, casts, curiosities, drawings, dies, implements, jewels, manuscripts, medals, models, patterns, pictures, scientific apparatus, signs, store or office furniture or fixtures, sculpture, tools, or property held on storage or for repairs.'' These articles, unlike the first group, possess value, but it is apparent that their value is not easily determined, and may be the subject of much dispute. In many instances the value may be largely a sentimental one, concerning which opinions greatly differ. Companies, therefore, before assuming liability for the loss of the same, desire to prescribe special conditions. The policy further provides that the company shall not be liable (lines 41 to 44, inclusive)
"Beyond the actual value destroyed by fire, for loss occasioned by ordinance or law regulating construction or repair of buildings, or by interruption of business, manufacturing processes or otherwise; nor for any greater proportion of the value of plate glass, frescoes, and decorations, than that which this policy shall bear to the whole insurance on the building described."