Gailbreath v. Homestead Fire Ins. (185 F.2d 361, 1950)

STEPHENS, Circuit Judge.

Appellees herein, The Homestead Fire Insurance Company, a Maryland corporation, and Sun Insurance Office, Limited, a corporation organized and existing under the laws of England, joined in an action in the United ' States District Court for the Northern District of California against the Signal Oil Company, a California corporation, and four fictitious party-defendants, citizens of California. Each appellee stated separately a claim arising out of the same occurrence and for an amount in excess of $3,000. Prior to trial the causes as against the Signal Oil Company were dismissed without prejudice. Sam Gailbreath answered the complaint and after trial to the court appeals from an adverse decision.

Sometime prior to October 31, 1946, the Herold Lumber Company, owner of a frame lumber storage and office building situated in California and of a stock of lumber on the premises, insured its properties through the above-mentioned insurance companies against loss and damage by fire. A fire occurred totally destroying the building and part of the lumber. The insurance companies paid in part for the loss and, under their rights of subrogation, sought in district court to recover from appellant the amounts so paid.

It was alleged that two of the fictitious defendants, as employees of the other defendants, in the course of their employment “so carelessly and negligently installed, controlled and tested a certain oil .burning stove then under their sole control in said building as to cause, and they did cause, a fire to start in said building” which destroyed the building and part of the lum- , ber. The district court found that at the time in question Cerino Lemos and Harry ■ Gregory were employees of the appellant and that in the course of such employment they were negligent at the time and place and in the manner alleged and thereby caused the fire and damage as alleged.

The evidence as to the cause of the fire was oral and conflicting. At the close of plaintiff-appellees’ case, counsel for defendant-appellant moved for a nonsuit.

Appellant is, and was at the time in question, engaged in the business of retailing and installing oil-consuming heating plants and employs, and has employed during eighteen years in such business, men to install oil stoves.

At the time of the fire construction of the building had been substantially completed by Lars Wold, an independent contractor, but his carpenters were still working on the premises. Prior to the installation of the oil stove Wold had constructed a patent flue of terra cotta lining and aluminum casing to which the stove was connected. Wold had a permit authorizing construction of the flue and completed construction had been approved by an inspector prior to the day of the fire.

The proof adduced by plaintiff-appellees in chief tended to prove the following facts: The lumber company purchased the oil stove 'from appellant who was to furnish the necessary fittings and install it. Immediately before the fire started, Gregory “mopped” under the stove, opened it and tossed a lighted match into it. A puff came from the stove and a square of fire appeared under it. Gregory attempted to beat it out but failing, picked up the stove and owing to the heat had to drop it. The fire quickly went up the full width of the wall nearest the stove, across the ceiling and down the other sides of the room.

Appellant, called under Rule 43(b) of the Federal Rules of Civil Procedure, testified that Lemos was sent by him to the lumber company premises on the day of the fire with tubing and an oil drum or tank and that Lemos was to see that a platform was erected on which to place the tank, was to pump oil into the tank after it was in position, and was to put a valve on the tank. Carpenters employed by the building contractor built a stand for the tank on the west side of the building near its center.

It was also disclosed that on the day preceding and on the day of the fire painters employed by the lumber company had painted the floor, walls and ceiling of the office with an inflammable floor hardener. Invoices and statements received in evidence showed that appellant did not charge Her-old Lumber Company for installation of the stove and that appellant did not hill the lumber company for the stovepipe to connect the stove with the flue.

Appellant testified that he was not instructed to and did not agree to and did not install the stove and did not secure a permit to do so; that the lumber company agreed to install it because “they wanted to dry the office out”; that he did not supply any stovepipe; that he arrived at the lumber company premises shortly after the fire started; that the oil tank had already been moved away from the burning building, and that it had not exploded nor been burned and about a gallon of oil had been consumed. Lemos testified that he took an oil tank, some oil, and some copper tubing to the premises; that he placed the tank on a platform erected for him by carpenters and laid