198
FEDER,A.LREPORTlllR,vol.
48.
refertiflg to the case last.cited, and approving it. I:thirik's:(llear.and truestatementofithe law gdverningthis[caseis contained:in the following 6xtraetsfrom the editorial and 'decision last referred to: "The doctrine that. 'in 'an executory contract for the sale of, goods, an acceptance by tbevendee iS8 waiver of deficient perforooanceby the vendor, applills only where the pefi\liency of performance is f()rmal, ·rather than essential,lJuch,as.may r..t:1a.te to the time, place, and manner of delivery, or affect the taste and' fal\cyof ,the pur()haser merely, or consblt o'$ome omission that produces no essential loss or injury." 33 Cent. Law J. 282·. . "If tbe goods be accepted without objection at the titne, or within a reasonable time·afterwards;tb&evidenceof waiver, unless explainlid. might be conaideredconclusivA. ".Butif, on the other hand, objection is made at the time, and tbevendornotifle(H)fthe defects, and tne defects are material, the inferrepelled; but acceptapclt accompanied by ence of waiv,er would silence is notnecessadly a waiver. Thelaw permitse,xplaoation. add seel,s to know the which aceel?tance. ltmight be that the buyer was not compett'nt to act upon hIS own JUdgment, or had no opportunity to do so, or declined to so act asa matter of expediency; placing his dependence mainly, ashe has a right to.do, upon the warranty of the seller. UPOI) this question the'acts are generaUyfor the jury,.under the direction of the court." Opinion by PETERS, C. in Morss v.Moar-e. The instructions given certainly contained error prejudicial to the defendant. I see no way of escape from the conclusion that the verdict must be vacated, and the motion for a new trial granted, and it is so ordered.
J.,.
eRICAGO SUGAR REFINING
Co.
f1. AMERICAN STEAM-BOILER
(O£rcuU Court, N. D.lzu,n0'f.8. November 2S,1811L) L IN8t1UNOB-CONSTRUOT!ON 01' POLIOY-"EXPLOSION .lND AOO!DE'llT."
A polley of insurance upon a sugar refinery provided for indemnity against loss by ".explosion and aocident," and, by a condition on the back thereof, declared that the term "explosion" included only a. "rupture of the shell or flues of the boiler or boilers. caused by the actiOI1 of steam." HeW. that where, in an attempt to extinguish a blaze originating in a starch kiln heated by steam-pipes, a cloud of starch-dust was stirred up'; which came. in contact with. the flame and exploded, this was .an "accident, "W1thin the meaning of the POlicYl and the insurer was liable fordamage to the property caused direotly by the explOSIOn, and by a flre which resulted therefrom, notwithstanding a further that DO claim should be made for "any explosion or loss oaused by the burnlDg of the building," or "for any loss or damage by fire resulting from any cause whatever. " Under a clause insuring against "personal injury and loss of human life," for which the assured isUable in damages, and "which shall be caused by said boilers or any machinery of Whatever kind connected therewith and operated thereby, J the insured could recover the amount it has paid out for loss of life and injuries caused by the explosion,since the kilns were heated by steam-pipes connected with the boilers. . r,
9.
BUlB-INBURANCIll AGAINST LIABILITY FOR PERSONAL INJURIES.
At LaW. Action· by the Chicago Sugar Refining Company against the American Steam-Boiler Company,upon a policy of insurance. Jury waived, and trial by the court. Judgment for plaintiff.
CHICAGO SUGAR REFINING CO. V. AMERICAN STEAM-BOILER CO.
199
J. N. Jeweu- and Jewett Bros., for plaintiff. Gregury, Boo'tA &; Harlan, for defendant. GRESHAM, J. In consid6ration of the surrender of two unexpired policies and the payment of $450 in cash, the American Steam-Boiler Company, on October 18, 1889, insured the Chicago Sugar Refining Company,for 12 :months, in a sum not exceeding $250,000,"Upon the 21 steam-boilers, and the 34 filters, tanks, converters, etc., on the premises occupied by the aSlluted as a sugar refinery, situate in the city of Chicago, state of Illinois, and, upon the steam-pipes, and the 9 engines, the shafting, belting. hangers, pulleys" and the two elevators connected therewith and thereby, against explosion and accident. and IOS8 or damage resulting therefrom to the property, real and personal. of the assured, and to all property of otherpersons for which the assured may be liable; and against acefdimtal personal injllry and loss of human life, for which injl1ry or, loss of life the assured may be liable to his employes, or to any othet persons WhoJIlllOeVer, and which shall be caused by said boilers, or any machinery of whateVer kind therewith and operated thereby. to So much of the third condition, or covenant, indorsed on the back of the policy, 8S neel! here be noticed, reads: . "That by the term ·explosion,' as used in this policy, is to be understood a . sudden of the shell or flues of the boiler or boilers caused by the action of steam,and no claim shall be made, under this policy, for any explosion or los6 caused by the burning of the bnilding or steamer engines, elevators, or or for any containing tbeboiler or loss or fire resulting from any cause whatever." The assured was engaged in the manufacture of starch and dextrine in two buildings, one of which, the was 1 story high, 25 feet wide, and 40 feet long, and the other, the drying-house, was 2 stories high, 50 feet wide, and 200 feet long. The latter house contained two dextrine .kilns in which prepared starch was exposed to steam heat in oven-like rooms, 8 feet high"8 feet wide, and 18 feet long, bricked in on the sides and top, and closed in front by iron doors. A high degree of tempera.ture is necessary in the manufacture of dextrine, to 8ecure which steam-pipes connected with the boilers passed through the kilns. Afire, which was observed in one of the kilns while the factory by directing upon it a stream of was in opell\tion, was water. The day folloWing,thekiln was cleaned· of the charred and wet mass, and the next day it was recharged with fresh starch. Late in the afternoon of .the latter day, the foreman of the factory reported to the superintendent that a blaze was again observable in the same kiln, and the latter opened the door,and directed the contents of a Babcock fire extinguisher upon the fire.' His efforts were apparently successful. but the flames soon developed further back in the kiln, and, in his endeavors to extinguish them, a cloud of starch dust was raised, which came in contact with the flames and exploded. The explosion extended through the open door of the kiln to the outer part of ,the buildings, resulting in the SUbstantial destruction of a portion of the property insured. thebuildings,inwhioh it was; and the death of a number of employes»
200
FEDERAT, REPO;RTER,
vol. 48.
serious injury of many others. . Proofs of loss' and' damage were and seasonably made by the assured and tendered to the insurer, but it refused to recognize any liability under the policy. The assured thereupon assumed the responsibility of adjusting and paying the claims presented for death anll personal injuries, and, in partial satisfaction of them, expended $21,392.86. It is agreed that the assured is still liable for $6,500 on unsettled death a,na personal injury claims. The consumed. The buildings were wreck,0aughtfire, and, in part, erected at a cost of $13,537.2'8 j the;machinery in them covered by the policy cost $17,239.39 jand the slock in process of manufacture, at the time ofthe accident, was worth $2,737.78. There wassalvage 0[$3,000 on the buildings, $6,03,15.50 on the machinery, and $96L95 on the stock, and the assured collected, on a .fire policy covering the same propthe amount realized from salvage and fire insurance being $17;'174:22. The totltl loss,by reason of the accident, on the buildings, machinery, and ·stock, wlis$16,349.23, to recover which, and the $21,392.86; paid in settlement of'claims for death and personal injuries, and $6,5.00, theamount.of ;claims of the latter class, for which the assured is still liable, this suit ;was brought. legislature of New York in 1853, auA statute w.as enactea by thorizing the' formation 'or companies to issue policies "upon steam'" 1;>oilers, agaiuste;plosion, and against loss.or damage to life or property resulting therefrom. ':The defendant was organized under that statute, and, while, operating under it·; issued the two policies whiehwere surrendered. The statute was enlarged inlS89 by an amendment authorizing insuranoe'\upon eteam-boilers, and upon pipes and machinery connected therewith Or operatedtheteby, against explosion and accident, and agl1inst loss or damage to proper.ty resulting therefrom." The policy in suit was issued afteLthisenactment went into force. A demand doubtless existed.f0l'·insurance affording greater protection to manufacturers, andit was roeI).able companies operating under the stat, ute of 1853 tQissuepolicie$ like the one in suit. that the statute was amended. On its face it, is fOl'indemnity against explosion and acand ,loss or damage resulting therefrom to the property, real and personal, :of, theasst;ll'ed, ,and to all property of others for which the assured maybe liable, and against. accidental uersonal injury and loss of life for, which the assured may be liable to its employes or to any other person,' ca.use.d by the boilers, or any machinery of whatever kind connected with and operated by them. The word "explosion," as defined by the third condition, or covenant, on the back of the policy, means a sudden and. substantial rupture of the flues of the boilers, caused by the action of steam.. But neithel' that, not any other condition, defines or in any· wiae,re!:ltricts the ordinary meaning of the word "accident." That word, used as it is, in its usual sense, covers loss due to, the break, iog or-injury of the machin.ery, and injury to the boilers n{)t dueto explosion. The explosion of th\:l starch duet in the kiln, the· force of which tbrewdown the ,walls of the.:buildings and substantially destroyed was cas muchana:ccident to it,within,themeaning of
CHICAGO SUGAR REFINING CO. V. AMERICAN S'rEAM-llOILER CO.
201
the policy, as if the walls had been demolished by an earthquake, Or the force of the wind. If the defendant's construction of the policy is correct, it is not liable for any loss which is not due to an explosion of the flues of the boilers, caused by the action of steaIJl, or a break of the machinery owing solely to its weakness, and not from external force. In other words, no explosion is an accident, and only loss due to an explosion of the boilers and the breaking of the machinery from its own weakness, and not from external violence, can be recovered. If, owing to the action of steam, a pipe Qad exploded, resulting in 108s and liability to the assured,however great, the insurer would not have been liable; nor it have been if" an lilnemy had destroyed or injured the machinery and boilers by exploding dynamite or gunpowder under them. A fair reading of the policy does not this construco. tion. '. . c " · · , The illii'Cl'condition further provides that" no claim shall be made, under" this .,':policy, for any explosion Or lOBS cauBed<lby the burnirig1 0f. ih,a b;uildwg,or the steamer containing the boillilror boilers, engines, elevators,ol" machinery I odor any loss or damage by fire resulting}rom any Iti$,luged by the defendant that even if the explosionor- the starchduBt ," w,asan acqident, Within, the meaning of: the policy, the 10SB sustained by·the plaintiff was a fiieloss.", No was consumed'or damaged by Jfire until. after the explosion, and no rec6very in this ll.ctionfor damage by fire to the wreck. That loss was adjusted and paid under a fire policy. The property insured was intact when the explosion occurred. The star,chd,pstcame,in' contact with the fire in the kiln, as already stated, and exploded, wrecking the machinery and buildings. A lighted lamp at the door of the kiln might have produced results no less disastrous,!lnd it could have' urged, with equal propriety, that the loss was a fire loss. The policy, was and delivered pythe insurer to the assured, and it is a familial' rUle of construction that, when the meaning of such instruments is'uncerlain or doubtful,they should be construed most, strongly the insurer. The plaititiffis entitled to recover the amount it has paid in tion of claims for deaths arid personal injuries "caused by said boilers; or any machinery of whatever kind connected therewith and operated thereby." The kilns were heated by steam-pipes passing through them: These pipes were part ,,( the machinery, and by means of them the kilns were connected with the boilers, and operated by them. Without the kilns, or something like them, connected with the machinery and eo-operating with it, theplainiiff could not have operated its factory. It was while the machinery was in operation that the accident to it curred, which reBultedin the death of some of the employes, and th(l personal injury of others. The ascertained, but unsatisfied, death and personal injury cl air'll S; amounting to $6,500, which I understand are to be treated as paid, the amount actually paid in satisfaction of claims <if the same character; and the 10SEl on the machinery, and stock,on account of the
202
FEDERAL REPORTER,
vot48.
accidlmt.,tllake a total of $44,241.09. Interest on this amount would be equa! ,to. depreciation in the value.of the buildirigsand machinery, if there was" depreciation, andintere$t is not allowed. Finding and judgment fo.rtbeplaintiff for the amount above shown due.
{AB'DRESSER .,. OREGON (CCrcuu
R-r. &
NAV. Oo.d ale
Gown. D. WaaMngto'n, 8. D.NoveIl1ber 12,1891.)
I.
L CORPORATIONS-WURD ,BUdLB. A corporation created by an aet of congress may be sued in the federal courts in any di_trtct where it is doing bu,sinesll.,and has an agent upon whom service can be made', not.'withstanding,tha;t itS principal Glnee: Is In aI10ther 'sllate.
When:a, domestio corporation -owning a railrdad III the.tate leasel thluame to another" the or, cop.sent of state, but,oontinues its , corporate 4jxiliteilce, and reqeives under the lease, its lessee must be considered 8lI'!i1;s agent tocal'ry on the business; and tnan action for B'tort com mUted service ofsuwmonl uJilOJl, the agents of the lessee Is service upo!l'thil'lessdr cpIl1pany. " , ' , .. " 8.A.ME....:.sBBV'Wtl oN FOitEIGNCo:SPOIUTION,'" Whe!) a that service may be made: uwn a foreign corporation doing businen therein by servinlr the summons upon its agents. any foreign corporation dot,IIg business in the state Is deemed to consent to this dition, and by a in the'metlldd Prescribed . 0. B.urB-FoLLq}VI"G,SUTB ',' ".',.",'. ' The rules of procedure 'prescribed by a staw ror obtaining service upon a foreign corporal;iol1 dillng buSiDlfsstherein govern lib« federal courts, and service ill the manner prescrlbedconfere J1Pon them, 1l:\1'/.sdlcl;ionover
&. S.u.rIf"':'SltBVIOB'ON LESIIBB'.'
The l1lli()ll Pacitlc Company, acomj)lnatlon, under thl'l name ofthe'llUnibn Pae!lic system, h'Withvarious other companies, including the .- rauro, in Was4in,gt,on. and be,ln g engagedln maldngcontraeta therein for freight and under the name Of 'the syStem, mu'stibe Mbsldered as 'doing business In that state, and a servof "n,agenl; therein, whois'authorll6dto act for all the comp.... , .Dlelil of the sYlilr-em, is a se!-",iceupoI/' a d ',
;IN;
;ol:i' AGENT.
'
,
,',','
,."
At Law·· persopal by Ehner L. Van Dresser aga,lllsttpe the Oregon 'tJtah &' NQrtliern and the Union Short cilic Railway: COmpany. On jurisdictiot). Overruled. 'Thomas ft. ,B'rentz andM. M. <;rodman, for plaiIlijtr. Jv. W. Oottont for defendants. HANFORD, J. The Oregon RnUw'ay & Navigation, Company is a corunder the laws of the state of Oregon,and poration created and is the owner ora line of rallwlly:in tbis state, which is being operated pursuant to a lease thereof by the Oregon Short Line & Utah & Northern :Railway CompanYI, Ja:tcorporatjOilcreated by an act of congress, having its principal otaqeat Che)'entle,in the state of Wyoming. The Union Pacific Railw,ay, Company isaJso,llrcorporation created by an act of congress, havillgitlHpr.incipal otliee at Roston; in the state of Massa-