Royal Insurance Company, Limited, a Foreign Corporation v. The Sisters of the Presentation, a California Corporation

This action arose in a California state court from which it was removed to the District Court under 28 U.S.C. § 1441 (a). The suit was based on a policy of fire insurance written by appellant Royal on a convent formerly occupied by the appellee Sisters. The building was destroyed by fire, the Sisters won a $174,-000 judgment, and Royal appeals. We reverse.

The building was constructed in 1877 and burned eighty-nine years later, on June 8, 1966. For several years before the fire, it had been used by the Sisters as a residence for their members who were teaching at a high school and an elementary school operated by the Sisters. The two schools and the convent were located on adjacent parcels of land, and the Bishop of Oakland, California, owned another adjoining, vacant parcel of property. The convent building, located in Berkeley, California, became so totally out of repair that Berkeley’s Building Inspector classified it as “unfit for human occupancy” in February 1961. The Sisters were finally able to escape their difficulties through negotiations with the Bishop, and in 1964 they signed a contract under which the Bishop agreed to convey his adjoining parcel of land to the…