Case Name: Robert L. Tilton v. The Hamilton Fire Insurance Company
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1857-06-27
Citations: 1 Bosw. 367
Docket Number: 
Parties: Robert L. Tilton v. The Hamilton Fire Insurance Company.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 14
Pages: 367–402

Head Matter:
Robert L. Tilton v. The Hamilton Fire Insurance Company.
Although the maxim that “ causa próxima non remota spectalu/r,” is the role that governs the liability of Insurers, yet in its application, the words, “proximate f cause,” are not to be understood in their strict and limited sense, as meaning only j the cause that immediately precedes and directly occasions a loss.
The maxim, understood in this limited sense, would confine the liability of'insurers \ to losses produced solely by the direct agency of a peril, insured agamst, upon the property insured.
It is settled now, however, that insurers, both upon Marine and Eire Policies, are not only responsible for losses produced by the direct action of a peril insured agamst, but losses in their nature consequential.
The general rule may be stated in these words, that insurers are not hable for consequential losses, other than such as are physically or legally necessary, unless it appears that the property insured, was involved in a peril insured against, and must have perished from that cause, had the peril continued to operate.
Under this condition, there are two classes of consequential losses, for which insurers are held to be answerable; first, where the loss, although not a necessary, is a natural consequence of the peril insured against, by natural, meaning a usual and probable consequence, and such, therefore, as it is reasonable to believe, was in the contemplation of the parties, when the contract was made.
Second, where the property insured is extricated from the peril by which it must have been destroyed by means not anticipated by the parties, but by which it is taken from, and never again restored to the possession of the assured.
Meld, that a loss by the stealing of goods at a fire in a large and populous city, is a , consequential loss that may, properly, be referred to each of these two classes, and | is, therefore, recoverable, (although fire is the only risk mentioned in the policy,) as a loss occasioned by fire.
Judgment for plaintiff upon the verdict.
(Before Duer, Ch. J., and Bosworth, Hoffman, Slosson and Woodruff, J.J.)
Heard, June 6;
decided, June 27, 1857.
This action comes before the Court at General Term, on a verdict taken, subject to the opinion of the Court, for its decision of questions of law arising at the trial, and which were there ordered to be heard, in the first instance, at the General Term. The case made is as follows: viz.
“ This action was brought upon a policy of insurance made by the defendants, to recover from them their proportion of the loss and damage sustained by the plaintiff by the destruction or damage of the property insured, by a fire which occurred on the morning of the 5th of February, 1855.
“ By the pleadings in the action, the making of the policy and the occurrence of the fire were admitted, and also that the goods of the plaintiff saved from the fire were damaged to the extent of nine hundred dollars. In addition to this, the plaintiff claimed that there was a total loss of goods to the amount of $3,459 35, covered by the policy.
“The defendants denied the total loss of any goods, and claimed that the plaintiff, on presenting his claim to the defendants, had made false statements as to the amount of his loss, whereby, under the terms of the policy, he had forfeited his claim to the amount of damage admitted to have been suffered.
“ The action came on to be tried before Mr. Justice Duer, and a jury, on the 21st April, 1856.
“ Upon the trial the plaintiff read in evidence the policy of insurance, bearing date June 1st, 1854, whereby the defendants insured the plaintiff against loss or damage by fire, to the amount of $1,500, on his stock of ready-made clothing, contained in the building No. 140 Fulton street, New York; also, $400 additional on the store fixtures, furniture, &c„ for the term of one year thereafter.
“ The plaintiff then offered evidence tending to show that on Saturday, the third day of February, 1855, the store was closed at the usual hour "in the evening, and that neither the plaintiff' nor any of his clerks again entered it. That on Monday morning, the fifth of February, 1855, when the plaintiff and his clerks came to the store, they found the building entirely destroyed. That neither the plaintiff nor any- of his clerks were present at the fire. That in the morning after the fire, the plaintiff was notified by the agents of the defendants, that they had removed his goods from the store, and that they were stored in the basement of the Sun Building, and soon afterwards, the plaintiff having hired the store No. 194 Eulton street, the defendants delivered to him the goods saved, which were taken from the basement of the Sun Building to the store No. 194 Fulton street, where an inventory was taken of the same. That by this inventory it appeared that the value of the goods saved amounted to $9,488 66. Evidence was also offered by the plaintiff, tending to show that on the night previous to the fire, when the store was closed, there was a stock of goods on hand of the value of $12,948 01. That many goods which were in the store on the evening previous to the fire were not among the goods delivered to the plaintiff after the fire. That the fixtures, &c., covered by the policy to the value of $500, were, together with the building, totally destroyed by the fire in question.
“The defendants gave evidence tending to show that in making up the account of the goods saved from the fire, the plaintiff had fraudulently undervalued the goods, so as to increase the apparent amount of his total loss. The plaintiff offered counter evidence on this point, tending to show that the accounts were in all respects, just and true.
“ The defendants then offered evidence tending to show that the fire in question was discovered about midnight, in the third story of the building No. 140 Fulton street; that a few minutan thereafter the insurance watch arrived, broke open the doors, took possession of the store, and commenced moving the goods across the street; that the police formed lines across the street, about midway of the block above and below the fire, to prevent persons approaching the fire; that all the goods were removed from the store before the fire reached that portion of the building occupied by the plaintiff, and were taken across the street, and piled up on the side-walk, extending from the curb-stone back against the door of a hotel then open; that the goods were covered by oil-cloths, and policemen were stationed in charge to watch them; that after all the goods had been removed across the street, they were taken to the Sun Building, a hundred feet distant, and stored in the basement, which was locked up, and the key retained by one of the insurance agents until delivered to the plaintiff, the next morning; that all the goods stored in the Sun Building were delivered to the plaintiff the next morning.
“The plaintiff gave evidence tending to show, that a large number of persons were admitted inside the lines formed by the police; that persons passed them freely; that there were several hundred persons assisting in removing the goods, including policemen, insurance watch, and others; that there was a great deal of confusion; and that goods might have been stolen and carried away without being noticed.
“ The Court thereupon charged the jury, amongst other matters, as follows:
“ That if the witnesses on the part of the plaintiff are to be believed, the plaintiff had in his store on the night of the fire, goods to the value of $12,948 01, while the goods saved by the defendants and delivered to the plaintiff at the Sun Buildings, on the morning after the fire, only amounted to $9,488 66, leaving a deficiency of $3,459 35, which the plaintiff claims were lost or destroyed by the fire. In opposition to this we have the testimony on the part of the defendants, that all the plaintiff’s goods were removed by them from the store before the fire reached that portion of the building. Hone of the witnesses, however, can testify that all the goods removed from the store were taken to the Sun Building, and these statements can only be reconciled upon the supposition that a portion of the goods were abstracted during the fire. Although it is a serious question, and in my judgment a very doubtful one, whether the insurers insuring against fire alone, are bound to make good any loss resulting from stealing the goods by persons at the fire, yet for the purposes of this trial, I shall charge you that it is immaterial whether the goods were actually burned, or were abstracted or stolen by persons at the fire. If you are satisfied that the plaintiff was not guilty of any fraud in making the statement as to the amount of his loss, he is entitled to your verdict for the sum of $400 insured upon the fixtures, and also for three-twenty-eighths of that portion (if any) of the goods in the store on the night of the fire, which were either burned or abstracted by persons at the fire. If you find for the plaintiff for the full amount claimed, your verdict will be for $900.
“ The counsel for the defendants thereupon excepted to that portion of the charge in which his honor charged the jury that the defendants were liable for goods stolen at the fire.
“ The jury thereupon returned a verdict in favor of the plaintiff, for nine hundred dollars, which was directed by the Court to be entered, subject to the opinion of the Court upon the question as to the liability of the defendants for goods stolen; to be heard in the first instance at the General Term, on a case to be made, with leave to either party to turn the same into a bill of exceptions.”
It was first argued at the February General Term, 1857, before Bosworth & Hoffman, J.J. On the 11th of April, 1857, they severally delivered written opinions, and disagreeing in their conclusions, ordered a re-argument. On the re-argument, Judge Hoffman’s opinion, somewhat modified, was delivered as a dissenting opinion, and is published accordingly, as a part of the report of this case. Judge Bosworth’s opinion is as follows:
Boswobth, J.—Certain facts of much moment, and beyond dispute, which are established in this case, must be kept steadily in view, in applying to it the rules pf decision, by which the rights and liabilities of the parties are to be determined.
The store was burned down, and if the goods had not been removed, they would have been entirely consumed by fire.
A few moments after the fire was discovered the Insurance watch arrived, broke open the doors, took possession of the store, and commenced moving the goods across the street. The police formed lines across the street, about midway of the block, above and below the fire, to prevent persons approaching the fire. It may be assumed then, that the goods were removed from an honest motive to save them from a total destruction by fire, which was inevitable, if they had been left on the premises mentioned in the policy.
It may also be assumed that extremé vigilance and precaution were used, to prevent any of them from being lost by theft, or otherwise, during the process of removal. The defendants cannot object, that the persons who undertook, and superintended their removal, might not properly do so, for the purpose of avoiding a heavier loss than would have occurred directly from an actual burning of the goods, if such removal had not been attempted. " ' '
'By'this effort, the loss instead of being total, is partial only. But notwithstanding all the vigilance and precautions used, there was a loss. ■ That loss; as we must assume, was caused directly by a stealing of the goods. - '
Is that loss, under the peculiar facts of this case, a loss by fire, within the meaning of the policy ? ;
The fire created a necessity of immediately removing the goods, in order to save the whole or a part of them from being burned up.
In making such a removal, even if all be removed before the fire reaches that part of the building from which they' were taken, a loss, in. spite of all precautions, may be produced by at least two causes incident to such an act.
One is, a partial injury of some of the goods themselves, by their hurried removal, and the confused state in which they may necessarily for a time be thrown together.
Another is, from a theft, or abstraction of some part, of the goods. If these are not natural results, it is believed that common experience shows that both, in large cities, are almost invariably inevitable results.
Was not the fire the immediate cause of, though not the active agent in, the destruction of the goods ?
The distinction between the proximate and remote cause of a loss, becomes in some cases so faint, that it is difficult to discern it. I think it a sound rule, that when the damage in any particular case is a direct and unavoidable consequence of the occurrence of a peril insured against, the insurers are liable, though the immediate agent was not such peril. All the consequences inevitably flowing from the peril insured against, or incident thereto, are properly attributable to the peril itself. (Maguire v. New England Marine Insurance Company, 1 Story, C. C. R. 157. Kahn v. Corbett, 2 Bing. R. 205; 2 Arnould, 799.)
The fire in this case created a necessity of removing these goods, and left no other alternative possible, except their total consumption by fire. If they had not been removed, and if the fire had been extinguished before the building was consumed, and if by extinguishing it the goods had been partially damaged by water, I understand it to be conceded by all the cases that such a loss would be covered by the policy.
In that case there would have been no damage to the goods from their having come in contact with the fire, or from actual burning.
In the case supposed, the goods, owing to their peculiar position, were damaged by water employed to extinguish the fire. In other words, it resulted from an effort to preserve the goods from contact with the fire: an effort necessarily, as well as properly made, and one which the contract of insurance contemplated would be made in case of fire, to save the insured property from total destruction.
In the present case, the removal was an act necessarily and properly done, not to extinguish the fire, but to keep the goods from coming in contact with the fire, and made, when it was apparent, and the result demonstrates, that it was impossible to extinguish the fire, until the building and its contents were destroyed. This was an act which the contract contemplates would be done on such an emergency. It not only contemplates it, but if the plaintiffs had been apprised of the fire, in time to remove their goods before the fire could reach them, and they, as reasonable and prudent men, knew that they could make such removal, but instead of attempting it had supinely stood by, and had seen the goods consumed, no Court or Jury would charge the Company with the loss, unless coerced by some rule, which they were inexorably compelled to follow.
But an honest and faithful effort is made to prevent the fire from destroying the whole. In consequence of that effort, a large part of the insured property is- saved. In spite of it, a part of such property is lost, but not burned. Without such effort all would have been burned. Would not the part that was lost, be lost in consequence of the fire, and unavoidably so lost?
If the insurers are not liable for such a loss occurring under such circumstances, then the assured ought not to be required to make an effort to remove his goods in case of fire in order to save the insurer from greater loss; and the parties who undertake to remove the goods should be charged as wrong-doers, for the consequences of their interference, unless such interference could be shown to be necessary to prevent the spreading of the fire, to other buildings. (City Fire Insurance Co. v. Corlies, 21 Wend. R. 367; The Mayor, &c., of New York v. Lord, id. 17, 285.)
Suppose the fire had reached the goods in question, and some ’ of them had been damaged directly by the fire, and the others had been removed, and none of them had been lost or stolen, but some of those removed had been damaged by the act, notwithstanding the exercise of extreme precaution and care to avoid such a consequence, would not that damage be covered by the policy ?
I think it would. (The Montg. Ins. Co. v. Babcock, 6 Barbour R. 640; Case v. The Hartford Ins. Co., 13 Illinois R. 676; Wilbur v. the Protectors Ins. Co., 14 Misso. R. 3; Levy v. Baillie, 7 Bing. R. 349; Brondrett v. Hentigg, 1 Holt R. 149; Parsons’ Mercantile Law, 526.)
But even in that case, fire would not have been the immediate cause of the damage, Unless all such acts as are a cause of damage, and as the fire renders proper and necessary to avoid greater inevitable loss, are to be attributed to the fire itself. In any other view; the removal of the goods damaged by such removal, and not the fire, would be the proximate cause of the loss.
But I can see no distinction in principle, between a partial injury to some of the goods saved by the removal, and a loss of a part of those attempted to be removed, to save the whole from unavoidable destruction, when they are lost in spite of the extreme of human precaution to prevent loss or damage from the act of removal, whether such loss be caused by theft, or some unavoidable casualty during the removal Which renders the article valueless.
Condition Ho. 6, annexed to, and forming a part of this policy, expressly declares, “ that in case of fire,-or of loss or ^ damage thereby,- or of exposure to loss or damage thereby, it shall be the duty of the insured to use their best endeavors for saving and preserving the property; and if they should fail to do so, this Company will not be answerable for the loss or damage sustained in consequence of such neglect.”
Hence, the duty, by the terms of the policy, was imposed on the plaintiff, in such a state of things as is shown in this case to have existed, to use his best endeavors to save the goods by
removing them. Suppose the plaintiff had been present, and used such endeavors, and in spite of all the care and precaution that could be Used for their preservation and safety, some are lost, or stolen, but the residue are saved from a total destruction, which would otherwise have involved all of them. He would have done precisely what the policy required him to do as a condition of retaining the liability of the company for the value of such part, as the use of his best endeavors could not save from-injury. As to those which his great efforts, and vigilance have saved unharmed, he has no claim against the company, because as to them there is no loss. But on the defendants’ theory, the company is not liable for the loss of those which human effort and care could not save, because they were not consumed by fire. Yet it was his duty to remove all of them, because by the best endeavors that could be used all could be removed. All having been removed, there is no liability, because those which are saved are uninjured, and those which it was impossible to save, were not burned or damaged by fire. And yet the fire, by the express terms of the contract between the parties, made it the duty of the insured to remove the goods, in the condition of things existing at the time, if it was reasonably certain that such an act would save the company from a greater loss than would have fallen upon it if no removal had been made.
Parsons, in his treatise on Mercantile Law (p. 526) expresses the opinion, that such a clause in a policy strengthens the claim of the insured for injury caused by an endeavor to save the goods by removing them.
I cannot resist the conclusion, that such a loss was one which the parties to the contract contemplated might occur, and that it was the intent of the parties, that any loss which should unavoidably result from the fire should be covered by the policy, although not caused directly by actual burning.
Case v. The Hartford Fire Insurance Company, 13 Illinois Rep. 676, is a case in point. Although the court was divided in opinion, the argument in support of the judgment rendered appears to me to be sound and satisfactory.
I thiuh the question was properly submitted to the jury. There was no pretence of negligence or want’ of care on the part of the plaintiff. There was and could be no pretence that there was the omission of any proper precaution for the safety of the goods during their removal.
There was no suggestion, and probably there could have been none, that those who labored for the safety of the goods, were trespassers, and that their interference was unauthorized and tortious.
No such objection can come from the defendants, who assumed, that the removal was. by their agent, and whose acts they adopted, and treated as not only justifiable, but proper to save themselves from the greater peril of a total loss.
The plaintiff, inmy opinion, shouldhavejudgment on the verdict.
The cause was re-argued on the 6th of June, 1857, before Utter, C. J., and Bosworth, Hoffman, Slosson, and Woodruff, J.J.
D. D. Field, for plaintiff.
First.'—The only question presented by this caséis, the liability of the defendants for goods stolen at the fire.
Second.—The liability of insurers extends not only to the loss of goods by actual burning, but to the losses consequent upon the fire—as, for example, by the water used in putting out the fire, the trampling of the firemen and others engaged at the fire, the falling of the floors and walls, and the wilful destruction or abstraction, by the firemen and others, of the goods insured.—■ Levy v. Baillie and others, 7 Bing. 349; Angelí on Insurance, 112, 115, 260.
Third.—By the terms of the policy, the defendants insure the plaintiff against loss and damage by fire, to the amount of fifteen hundred dollars, upon the property insured. This language is broad enough to cover all the loss claimed. The cause of the loss was the fire, and the goods were as fully lost to the plaintiff, as if they had been actually burned.—Brondrett v. Hentigg, 1 Holt, 149.
Fourth.—If the indemnity did not extend to these consequent losses, it would be very inadequate; for the greater portion of the loss at any fire results from them, and not from actual burning.
Fifth.—The agents of the defendants having, for their own indemnity, broken open the doors in the absence of the plaintiff, taken possession of the goods, and undertaken to remove the same, are liable for any loss which resulted from the consequent exposure of the goods.
Sixth.—If the exception to the testimony respecting thefts at another fire where similar precautions were taken, is to be noticed on this argument, the exception must be overruled, for the evidence clearly tended to show that such precautions' and care taken at this fire were not a protection against theft. The precautions were proved for the purpose of showing that a theft was thereby rendered impossible, or extraordinarily improbable. After that, evidence showing that these precautions in practice proved unavailing, was entirely competent.—Howard v. The Oily Fire Ins. Co., 4 Denio, 502.
F. J. Phelps and F. W. Stoughton, for defendants.
I. The defendants are not liable for goods stolen. Their insurance was against fire. Theft is not fire.
Fire must be the proximate cause of the loss, in order to bring it within the policy. (Angelí on Ins., sec. 111-119; Ellis on Ins. (Shaw’s Ed.) p. 79 and notes; Austin v. Brewe, 6 Taunton; 436; Babcock v. Mont. Co. Mat. Ins. Co., 6 Barb. 637; Fenniston V. Mer. Co. Mat. Ins. Co. 14, H. Hamp. 341.) Here it is but the remote cause. It can only be regarded as the proximate cause of those consequences that necessarily result from it.
Thus it has been held that a loss necessarily sustained by the removal of goods from a building in imminent danger from an adjoining fire, was not within the policy. (Hillier v. Alleghany Co. Mat. Ins. Co., 3, Barr, Penn. R. 470.)
And where a part of a cargo insured against perils of the sea was lost by such perils, and in the confusion of the occasion, another part was stolen by the crew, that portion of the loss was held not to be covered by the policy. (Hicks v. Fitzsimmons, 1 Wash. 0. 0. Rep. 279.)
And so a loss incurred from the interruption of business, in consequence of a fire, is not within the insurance. Niblo v. North American Fire Ins. Co., 1 Sandford, 557.)
And the very point involved in the present case was decided adversely to the plaintiff, in the unreported case of Wood v. The Brooklyn Fire Ins. Co. and others, in the General Term of the Supreme Court for the Hew York district.
Ho decision has gone the length of sustaining the claim made in the present case. To construe a fire policy as covering the consequences of the unlawful acts of trespassers upon insured property, merely because the occasion of a fire facilitated the perpetration of the mischief, would be to introduce a novel feature in the law of insurance, and one of very questionable expediency.
The risk of theft is one that every owner of property must run at all times. The law of the land affords the only protection and redress.
H. Evidence that goods had been stolen by firemen at other fires, was not admissible to prove that the plaintiff’s goods were stolen on the occasion in question. For the admission of this evidence, a new trial should be granted.

Opinion:
By the Court. Duer, Ch. J.
The judge, upon the trial, charged the jury, that, if they were satisfied that the plaintiff had sustained the loss that was claimed, he was entitled to recover, as well for the goods abstracted or stolen, as for those, if any, destroyed by fire. To this part of the charge, the counsel for the defendant excepted; and whether this exception is well taken is the single question that we are now required to determine. In words less technical: Whether, as fire is the only risk mentioned in the policy, the defendants are answerable for the loss of goods that, during the course of, or subsequent to, their removal from the building on fire, and before any part of them had been restored to the possession of the assured, had been abstracted or stolen?
The determination of this question evidently depends upon the true interpretation and just application of the established maxim, that, in determining the character of a loss for which an indemnity is claimed under a contract of insurance, its proximate cause is alone to be regarded; so that, when it appears that this proximate cause was a peril not covered by the policy, the insurers are discharged from all liability. The well-known maxim of Lord Bacon, "In jure causa proxima, non remota, spectatur," it is admitted, furnishes, in all cases, the controlling rule. Strictly speaking, the proximate cause is that which immediately precedes and directly occasions a loss; and hence, if the maxim' is to be understood in this limited sense, it is plain that the defend ants are not answerable for the loss that is claimed, since its proximate cause, in this sense, was not fire, but theft—a risk which the language of the policy does not embrace, and against which no indemnity in terms is promised.
It is not pretended, however, that the maxim, in its application to the contract of insurance, has ever been understood, or, without an entire disregard of prior decisions, can now be understood, in this strict and limited sense—a sense that, if adopted, would confine the liability of insurers to losses produced solely by the direct agency of a peril insured against, upon the property insured. It is not denied that, in numerous cases, where the property has not been at all injured or affected by direct action of the peril, the insurers have been held responsible for a subsequent loss, even when its immediate cause has been an act or event not mentioned in the policy. Nor is it denied that, in all such cases, the law attributes the loss to the original peril, as its proximate cause. Thus, to select a frequent and familiar instance, where goods insured only against fire, and contained in a building actually on fire, are neither touched by the flames, nor affected by the heat, but are saturated by the water used to extinguish the fire, and are thereby damaged or rendered worthless, it has never been doubted that the insurers are bound by their contract to satisfy the loss; nor that it is recoverable as a loss occasioned by fire, although the voluntary application of water was, in reality, its sole immediate cause. And this single example is sufficient to prove that the maxim, " causa próxima • non remata spectatoris not to be strictly and literally construed, 1 but, by its received interpretation, embraces consequential orí incidental losses, as well as those which are direct and immediate. I To enable us, therefore, to answer the novel question now before us, it will be necessary to define the consequential losses that the maxim by which we must be governed has been held to embrace, and carefully to distinguish them from those, the recovery of which it has been held to preclude. We must ascertain, if possible, the principle or grounds upon which each class of cases may justly be said to rest, that we may determine to which class that which is before us, by a parity of reasoning, ought to be referred; and this we shall now endeavor to do, by referring to a few of the cases belonging to each class.
There are some losses, not produced by any direct action of a peril insured against upon the property insured, and therefore strictly consequential, which it is admitted by all that the insurers are bound to make good. They áre responsible for every loss which is,. physically, a necessary consequence of the peril; that is, for every loss that, from the nature of. the peril, and of the subject insured, when the peril occurs, must inevitably follow.
The modern case of Montoya v. The London Assurance Company, supplies an excellent illustration. (6 Exchq. Rep. 451, S. C. 4 E. Law and Eq. R. 500.)
The insurance was on tobacco, forming part of a cargo consisting of hides and tobacco. The vessel, in stress of weather, shipped a quantity of sea water,- by which the hides, upon the top of which the. packages of tobacco . were. -stowed, were thoroughly wetted; but the tobacco was never in contact with the water, and sustained no damage directly, from that cause. The hides, however, in consequence of the wet, became putrid, and emitted a fetid odor, which pervading , the tobacco and destroying its flavor, rendered it unmerchantable, and the Court of Exchequer held that the defendants were bound to . satisfy the loss, as a loss from- the; perils of the sea. Here the effluvium arising from the hides, a risk not mentioned in the policy, was the immediate cause of the damage to the tobacco, but as this was a necessary consequence of the damaged condition of the hides, and, therefore, of the perils of the sea, the entire loss yas justly attributed to those perils as its proximate cause.
But although insurers, by force of their contract,-are'liable, for every loss which is a necessary result of a specified peril, it is certain that they are not liable for every loss that may justly be deemed a consequence of such a peril; that is, for every loss that, but for the happening of the peril, would not have occurred. And on the other hand, it is equally certain that their liability is not confined to consequential losses, that may properly be deemed necessary and inevitable.
In the case that I shall first cite, the claim of the assured, for a consequential loss was rejected upon the ground that the loss, although consequential, could not justly.be attributed to the peril which preceded, as its proximate cause.
In the case of Livie v. Janson, in the King's Bench (12 East 'Rep. 648), the ship insured, which was "warranted free from American condemnation," was driven ashore by the perils of the sea, and while in that position was seized and condemned by our government; but the vessel, although stranded, might have been got off, so that but for the seizure that followed, a partial loss only would have been sustained. The loss claimed was a total loss from the perils of the sea. The Court, however, held, not only that the partial loss from sea damage was merged in the substantive total loss that followed, but that this total loss was imputable solely to the capture and condemnation, and not to the stranding as a peril of the sea, and consequently that the assured was not entitled to recover. Lord Ellenborough, in delivering his judgment, said, by way of illustration: "If a ship meet with sea-damage which checks her rate of sailing, so that she is taken by an enemy, from whom she would otherwise have escaped, though but for the sea-damage she would have arrived safe, the loss is to be ascribed to the capture, and not to the sea-damage, upon the principle that 1 causa próxima non remota spectatur.' "
In the case of Rice v. Homer (12 Massachusetts Rep. 230), this decision was followed by the Supreme Court of Massachusetts, and the loss of a vessel which was captured, after being damaged by the perils of the sea, was imputed to the capture as its proximate cause; and as, by the terms of the policy, the insurers were exempted from a loss by capture, it was held that the assured were not entitled to recover.
In an early case in our own Supreme Court (Patrick v. Com. Insurance Co., 11 Johnson Rep. 14), the insurance was on the cargo of the ship Thomas Jefferson, and the policy contained a clause, exempting the insurers from " any risk in port but sea-risk." The ship, with the cargo insured on board, was in the bay of Cadiz, which was then besieged by the French, and in a violent storm she broke from her moorings, and was driven on shore; and after remaining in that situation for some days, some French soldiers came on board and destroyed by fire, both vessel and cargo. The Judge, upon the trial, submitted to the jury the question whether the loss was occasioned by sea risk, and the jury found a verdict for the plaintiff for a total loss. The Court, however, set aside this verdict, as contrary to law and evidence, and in delivering their judgment, Kent, Chief-Justice, said that "as the cargo was not injured by the stranding, and no effort to remove it was made, and as the means of removing it from the vessel across the bay of Cadiz to the city might easily have been procured, it was evident that the loss of the cargo must be imputed wholly to the act of the French. The stranding, undoubtedly, led to this unhappy result, but that the Court must place the loss to this result, and not to the stranding, upon the maxim that causa próxima non remota spectatur.' "
The insurance in the case of Hillier v. The Alleghany County Mutual Insurance Company, in the Supreme Court of Pennsylvania (3 Barr. Rep. 470), was upon goods against fire, and the loss claimed was for the damage which the goods had suffered in the course of their removal from the building in which they were stored. This building was not on fire, but was very near to another which the flames had seized, and the removal of the goods was judged to be necessary to their preservation. The Court held that as the fire did not reach the building in which the goods were contained, and the goods, but for their unnecessary removal, would not have been injured, the insurers were not responsible for a loss which was occasioned merely by an apprehension of the peril insured against, and not by the peril itself.
My observation upon the cases that have been cited, is: that it cannot be denied that in each of them the loss for which an indemnity was claimed, was, in one sense, a consequence of the peril insured itgainst, since in each it was certain that but for the happening of the peril—the sea peril in the first case, the fire in the last—no loss, or a loss only partial, would have occurred; but as in each case the property insured would have been saved, in whole, or in part, but for the happening of a subsequent event of risk, this subsequent risk, as it was the only efficient, was properly held to be the proximate cause of the loss, and as it was not covered by the terms of the policy, the insurers were, necessarily, discharged from its payment. In each case, the peril insured against was merely the occasion, and not in any legal sense the cause of loss.
From these, therefore, and many other cases in which th,e insurers have been exonerated from consequential losses, it may be safely deduced, as a general rule, that insurers, whether on a marine or fire policy, are never liable for consequential losses, other than such as are physically or legally necessary, unless it appears not only that the property insured was involved in a peril insured against, but that it must have perished from that cause, had the peril continued to operate. In fewer words, unless it appears that the loss, had it not been consequential, would have been immediate and total.
When this necessary condition of the liability of the insurers is proved to have existed, the consequential losses for which they have been held to be answerable, may be divided into two classes; and if the loss now claimed can with propriety be referred to either of these classes, the plaintiff will be entitled to our judgment; otherwise, the verdict in his favor must be set aside and a new trial be granted.
First: The insurer must satisfy every loss which is shown to have been, although not a necessary, a natural consequence of the peril insured against; and by natural is evidently meant a usual and probable consequence, and such, therefore, as it is reasonable to believe was in the contemplation of the parties when the insurance was effected. Hence, the insurers are bound to indemnify the assured against every loss that may be expected to follow from the means usually employed to avert or diminish the peril, and save the property insured from the destruction, in which it would otherwise be involved; and it can hardly be said that their liability for consequential losses that may with certainty be referred to this class, has ever been doubted or denied.
The examples that most readily occur, are, under a marine policy, jettison of goods, or the cutting away of a mast during a storm; and, under a fire, the damage to the goods from water, and the injuries which they suffer from haste and negligence in the course of their removal from a building actually on fire.
The second class of consequential losses for which the insurers are undoubtedly liable, as referable to the peril insured against as their proximate cause, embraces the cases in which the property insured is extricated from the peril that otherwise would have led to its destruction, by means that could not have been anticipated by the parties, but by which it is taken from and never again restored to the possession of the assured, so that to him the loss is exactly the same that it would have been had the peril continued to operate.
The case of Brondrett v. Hentigg (1 Holt N. P. Rep. 149, 2 Arnould on Insu. 1005) was cited by the counsel for the plaintiff, as an example of this class of consequential losses. The vessel containing the goods was wrecked on the coast of the Isle of France, and the goods were plundered by the natives on shore, and Sir Vicary Gibbs held, that the loss was a consequence of the wreck, and, therefore, recoverable as a loss by the perils of the sea. He said that no abandonment was necessary, since the goods which were saved from the wreck, though got on shore,, never came again into the hands of the owners, As to them, therefore, the loss was total.
This, although a Nisi Prius decision, is cited with approbation by the text writers, but the cases to which I shall next refer were decided by the Court in term, and not only carry with them a greater weight of authority, but are more closely applicable to the question before us,
The first is Hahn v. Corbett, (2 Bingham Rep. 205.) The loss claimed was upon goods insured on a voyage from London to Maracaibo, which, by a clause in the policy, were warranted " free from capture and seizure." The ship containing the goods, when she had nearly reached her port of destination, was driven in a storm upon a sandbank, and totally disabled, and while thus situated, the goods that otherwise would have perished from the peril in which they were involved, were seized and carried on shore by Spanish Boyalists, who had shortly before recovered the possession of the town and port of Maracaibo. The assured, notwithstanding the warranty in the policy against seizure, claimed that they were entitled to recover a total loss, upon the ground that the seizure, although the immediate cause of the loss, was itself a consequence of the stranding and wreck of theyessel, and that the loss ought, therefore, to be attributed to the pefilg.of the sea as its proximate cause. The Court sustained the claim oí the assured, and held that the loss was properly described in the declaration as a loss by the perils of the sea, since it was certain that those perils were its main conducing cause. It was by their agency (it was said) that the ship was reduped to a wreck, and it was by the same agency that the goods, had they not been seized, would have been destroyed. And in reading the opinion of the Judges, it is manifest that the certain destruction of the goods by the perils insured against, had they not been seized, was the main ground of the decision. It was for this reason alone that those perils were held to be the proximate cause of the loss. Indeed, the only distinction that can be stated between this case and those of Livie v. Janson, and Patrick v. The Com. Ins. Co., before cited, consists in the fact, that in those the property insured, but for a subsequent event, might have been saved, while in this it must have been destroyed, had the peril continued to operate.
The most recent case that I have found was decided by the present Court of Queen's Bench, and in its material circumstances, it not only bears a close analogy to the, present, but furnishes a satisfactory answer to an argument that was much insisted on by one of the learned counsel for the defendants, namely, that the goods upon which the loss is claimed, Were not only saved from the peril insured against, but in judgment of law never ceased to be in the possession of the plaintiff.
Dean and another v. Hornby (23 L. Journ. R. N. S. 129; 24 Law and Eq. Rep. 85), is the case to which I refer. The insurance was a time policy upon a ship which, during the continuance of the risk, was seized by pirates in the straits of Magellan, but was recaptured by an English ship of war, and taken to Valparaiso. At Valparaiso, a prize master and crew were put on board, and the ship was sent to England for adjudication in the Court of Admiralty. It was while the ship was in the prosecution of this voyage that the plaintiffs abandoned to the underwriters, and it was agreed that their right to recover a total loss was to be determined by the facts that existed at the time of the abandonment. It is needless, therefore, to take any notice of those that subsequently occurred.
.It.was insisted, on the part of the defendants, that there was no total loss w^yu notice of abandonment was given. That 'although there wSt> constructive total loss when the ship was seized by the pirates, the property was not changed by the seizure, and, upon the recapture, remained in the owners, and that the recaptors, although they had a lien to the extent of the salvage to which they were entitled, yet, subject to that lien, held possession for the owners. Consequently, so far from there being a total loss, both the property and the possession of the ship were in the assured when they abandoned. Lord Campbell and his brethren were, however, of a different opinion. They held that the constructive total loss created by the piratical seizure, at the time of the abandonment, had not ceased to exist, since, although the ship before that time had been recaptured, yet, the possession had not been restored to the asshred, nor had they then the means of obtaining the possession. It was true, the property remained in them, but the recaptors had the sole possession and control. Judgment for a total loss was, therefore, given for the plaintiffs.
The principle of this decision evidently is, "that when circumstances, that by their continuance, would create a total loss, have once existed, the loss continues total, although those circumstances may have wholly changed, so long as the property is not beneficially restored to the possession of the assured.
I have already said, that although the loss now claimed is consequential, yet if it fall within either of the classes that have now been stated and explained, it is recoverable under the policy, as a loss by fire, and that it falls within both classes, is the conclusion to which we have all of 'us come, with the exception of my brother Hoffman. We think that this conclusion is fully justified by the decisions to which I have referred, and which we are not aware are contradicted or shaken by any other authorities.
It cannot be denied, that the facts which I have stated to be the necessary condition of the liability of insurers for consequential losses, other than such as are inevitable, were in this case proved to exist. The goods were removed from a building actually on fire, and which was destroyed by the fire; had they remained, their destruction was certain. Under these circumstances we think the loss as claimed was a natural consequence of the peril insured against. When the doors of a warehouse or store on fire, are broken or thrown open, in order that the goods within, by their removal, may be saved from the peril, a loss of a portion of them by plunder we cannot but think is just as cer? tainly a natural consequence of the attempt to preserve them, as the damage which they suffer from the negligence or recklessness of those engaged in their removal. It is a consequence that from the frequency of its occurrence may be expected to follow, and which, it is therefore reasonable to believe, was in the contemplation of the parties when they made their contract. It is a public and notorious fact, which as such we may judicially notice, that in this city, and, indeed, in all crowded cities, losses from this cause constantly happen, and that from the temptation and facilities that a fire creates, it would be difficult and almost impossible to prevent them. And when we call to mind the hurry, confusion, and disorder' that usually prevail, and the habits and character of those who form a large portion of the crowd that usually assemble at a fire, it would be a matter of great surprise if losses of this description were hot as frequent as an experience almost daily attests they are.
It was admitted by one of the learned counsel of the defendants, that as petty losses by theft not unfrequently happen, it might not be .unreasonable to hold that, for such the insurers are liable, as a natural consequence of the peril insured against; but he contended that, as a loss by theft of the magnitude of that which is now claimed, very rarely occurs, it would be unjust to hold that the defendants ever meant to assume the risk, since it cannot be thought that such a loss was in the contemplation of the parties when they made the contract.
The argument is plausible, but it implies a distinction for which there is no warrant or precedent, and to which we cannot assent. The only question is, whether a loss by theft is from its nature a consequential loss, for which the insurers are liable, and if this be admitted or proved, their obligation to satisfy the loss, when not exceeding the sum insured, cannot be varied by its amount.
If all the costly furniture of a dwelling-house were defaced and broken by a disorderly crowd volunteering their aid to rescue it from a fire, we cannot believe that the unusual amount of the loss would be held to exonerate the insurers from its payment. And we see no reason to doubt that a loss by theft, if covered by the policy at all, stands upon the same ground.
But were we prepared to say, that, if the loss now claimed cannot be regarded as a natural consequence of the peril, and is not recoverable upon that ground, it is still certain that the goods upon which- it is claimed,- before their removal, were involved in a peril that must have led to their destruction, and that, although saved from this peril, they were never restored to the possession of the plaintiff. Hence, unless the cases of Brondrett v. Hentigg, Hahn v. Corbett, and Dean v. Hornby are to be cast aside, or it can be shown that there is a valid distinction between those cases and the present, the plaintiff must be entitled to recover.
Wb think that ¡these cases were rightly decided, and, although varying in circumstances, in principle are not to be distinguished from the present.
It is true that a valid distinction has been supposed to exist. It has been said, that in each of those cases there was an actual total loss by the perils of the sea, that never ceased to exist, and that its continued existence was in each case the ground of the decision; while in the case before us. there was no such loss of the stolen goods before their removal.
But the supposition upon which this argument proceeds, it appears to us, involves- a mistake, both of the law and the facts. In neither of the cases referred to was the original loss that is spoken of actually total. It was so only by construction of law. The loss of goods on board a shipwrecked vessel, so long as they subsist in specie, is not actually total. The certainty of their destruction by the perils of the sea, if they remain in that situation, it is true, gives tQ the assured a right to abandon; but, ais Mr. Phillips has justly observed, (1 Phillips, 649), this is a right that the assured is not bound to exercise, and it is only by its exercise before the goods are rescued from the peril and restored to his possession that the loss is rendered total. - If the goods are landed, and come again into his possession, or that of his agents, and, at a reasonable expense, may be transported to their port of destination, the right to abandon and claim a total loss ,is wholly gone, and a partial loss only is recoverable. It seems to us manifest, therefore, that the true grounds of the decision in Hahn v. Corbett (the case that bears the nearest resemblance to the present) were exactly those that have been stated—the cer?' tainty that the cargo of the stranded vessel would have been destroyed by the perils of the sea-, had it not been seized by the Spanish Royalists, and the fact that after the seizure it never came again into the possession of the assured. So here, it is cer? tain that the goods upon which" the loss is claimed, had they remained in the store, must have been destroyed by the fire; and equally so, that, since their removal they have never been restored to the possession of the plaintiff,—the loss to him is exactly the same as if they had been consumed by the fire. So far as he is concerned, they were never rescued from the peril in which they were involved, and which may, therefore, be justly considered the proximate cause" of the loss.
There is no ground for the allegation that the goods lost were in the possession of the plaintiff when the loss happened. They were taken from his possession by the persons who removed them, and those persons were in no sense his agents, or subject in any respect to his direction or control. Neither he nor any person acting by his authority was present at the fire. The case, moreover, expressly states that the goods saved were taken possession of by an agent of the insurers, who stored them in a building of which he kept the key; and that this key was not delivered to the plaintiff until the next morning. Until then the goods saved were not restored to his possession. Those that were stolen were at no time after their removal in his possession. The property remained in him, but the possession was gone. (Dean v. Hornby, supra.)
The result of this discussion is, that, in our opinion, the jury were rightly instructed upon the trial, and that the plaintiff is entitled to judgment upon the verdict which they rendered, and such is our decision.
An important case was cited upon the argument, (Levy v. Baillie and others, 7 Bingham, Rep. 349) that hitherto I have omitted to notice; and I refer to it now, not as a positive decision, (which it is not), but as evidence satisfactory, if not conclusive, that in England consequential losses of the character of that which is now claimed, are deemed to be recoverable under a policy in which fire is the only risk insured against, and are treated as losses which in judgment of law are occasioned by fire. In this case, nearly the whole loss that was claimed was aheged to have resulted from the plunder of the goods insured, by the crowd assembled at the fire. It was denied by the defendants that any such loss had occurred, and the fact was very doubtful upon the evidence; but it was not denied that, if the loss were proved, the defendants, as insurers against fire, were liable for its payment; nor was any doubt as to their liability expressed or intimated, either by the counsel for the defendants or by any of the judges. It is true, the question was not raised; but as from its nature it could not have escaped the attention of the parties, we may be certain that it would have been raised, had not the defendants and their counsel been satisfied that it was fully settled by law and usage in favor of the plaintiff.
Finally. It is certainly not a matter of regret, that a careful examination of the authorities has led us to the conclusion that the defendants are responsible, as insurers against fire, for the loss that is claimed. It seems to me that a denial of their liability for such a loss is most unwise; and I am persuaded that it is for the interest alike of the public, of the assured, and of the insurance companies themselves, that the defence should be overruled.