UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA
November 22, 1968
HEARST MAGAZINES, DIVISION OF the HEARST CORPORATION and Employers' Liability Assurance Corp.
The CUNEO EASTERN PRESS, INC. OF PENNSYLVANIA
The opinion of the court was delivered by: WOOD
FINDINGS OF FACT, DISCUSSION, CONCLUSIONS OF LAW, AND ORDER
Wood, District Judge.
FINDINGS OF FACT
1. Since 1919 Hearst and Cuneo have been parties to a contractual relationship whereby Hearst delivered its paper to Cuneo for printing.
2. Pursuant to said contractual relationship and since the acquisition of its present facility in North Philadelphia in 1932, Cuneo has stored in its warehouse for varying periods of time Hearst paper prior to printing.
3. Hearst and Cuneo entered into a formal contractual arrangement in an agreement dated May 21, 1935.
4. Thereafter the parties made a number of modifications and amendments of the original contract; among these modifications and amendments was one dated March 5, 1947, providing inter alia that:
"2. All the terms, conditions and practices of the aforesaid contract dated May 21, 1935 as thereafter modified and amended, shall remain in full force and effect, except as hereinafter modified." (Plaintiff's Exhibit 8)
5. The following letter was sent to Cuneo from Hearst dated November 5, 1954:
In accordance with our recent conversation and your letter of October 22nd, we wish to state that all property owned by us, which is in use or otherwise stored in your main plant at Erie Avenue, F and G Streets in Philadelphia, is separately insured by us against loss or damage from fire, sprinkler leakage and other commonly insured risks, with the exception or paper stored in your press rooms, which is covered only against fire and sprinkler leakage damage.
You may therefore exclude such coverage for all our property on your policy which covers your plant.
Very truly yours,
HEARST MAGAZINES DIVISION
The Hearst Corporation
Ass't Chief Accountant"
(Defendant's Exhibit 1)
6. Since December 1954, Cuneo has excluded the said Hearst paper from coverage under its policy of insurance (N.T. 5-6).
7. The paper in question in this action was stored in warehouses A and E of the Cuneo plant at Erie Avenue, F and G Streets, Philadelphia.
8. In August 1962, Cuneo stored Hearst's rolls of paper end-on-end on 1 1/2" dunnage under the bottom rolls. (N.T. 43) "Dunnage" consists of 2" X 8" planks of wood placed on the floor of the Cuneo plant prior to putting the paper on top.
9. Storage of the paper on dunnage at a height of greater than 1 1/2" would have been unsafe because of resulting instability and increased fire hazard. (N.T. 47)
10. Approximately once per year representatives of Hearst and Employers' Liability Assurance Corp. inspected the warehouses where the paper was stored. (N.T. 47)
11. Prior to August 1962, no moisture or flooding had occurred in the Cuneo warehouse above the level of such dunnage. (N.T. 45)
12. The following weather forecast was published in The Philadelphia Inquirer on Monday morning, August 27, 1962:
"Philadelphia and vicinity: Mostly fair Monday except for early-morning cloudiness and fog. High in low 80's. Cloudy Tuesday with little temperature change and chance of showers. Southeasterly winds six to twelve miles an hour Monday."
(N.T. 122); Exhibit D-20-23)
13. On August 27 and 28, 1962, the Water Department of the City of Philadelphia made the following rainfall measurements at its measuring stations in the vicinity of the Cuneo plant:
Began August 27 Ended August 28 Depth I10 *
PTC Dept. 11:00 P.M. 5:30 A.M. 3.80 in. 7.80 in./hr.
(No. 16) (EDT) (EDT)
Comly Road &
Heintz 10:50 P.M. 4:55 A.M. 4.25 in. 9.60 in./hr.
(No. 8) (EDT) (EDT)
& Olney Ave.
Naval Supply 10:55 P.M. 5:00 A.M. 3.10 in. 8.40 in./hr.
(No. 11) (EDT) (EDT)
Tabor Rd. &
Northeast High 10:40 P.M. 5:00 A.M. 3.90 in. 7.20 in./hr.
School (No. 13) (EDT) (EDT)
Algon Ave. &
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