71 N.Y.S. 918 | N.Y. App. Div. | 1901
The plaintiffs owned an elevator building situate on Blackwell canal and Hatch slip in the city of Buffalo, and known as the Dakota elevator. The defendant issued its policy on the “use and occupancy ” of this property. The premium paid was $2.6.25, and the insurance was- not to exceed $1,500. The contract of insurance contained the condition that if “the Property, Buildings or Machinery therein, or either of them, or any part, thereof, shall be destroyed, or.so damaged as to prevent the elevating and other handling of grain, this Company shall be liable at the rate of $4.77 per day for each working day of such prevention.” It was further provided that the loss was to be computed from the date of the fire “to the time when the buildings could, with ordinary diligence and despatch, be repaired or rebuilt and the machinery placed therein, and not to be limited by the day of expiration named in this policy.”
On the 13th of August, 1900, the elevator with its contents was destroyed or damaged by fire. Appraisers were appointed in compliance with the terms of the policy to ascertain the length of time which plaintiff would be prevented from carrying On its business, and awarded in their report 259 days. There were many poli-, cies of other companies of similar insurance, and the aggregate liability, as adjusted by these appraisers, was $60,328.87,- and the proportion thereof chargeable to the defendant is $1,235.41
At the time of the issuance of the policy and also at the time of the loss, the plaintiff with about twenty other elevator companies in Buffalo, and comprising a majority of them in that city, .had.formed a combination known as the Western Elevating Association. The business of this association was managed by an executive committee chosen, by the members composing it. All receipts of money for business carried on by the members of the organization were collected by its treasurer, and after paying the expenses of the combination and certain prescribed charges to the elevator company earning them, the earnings Were to be distributed among the various companies in certain percentages set forth in the combination agree-
The course of business required that whenever any grain arrived at the port of Buffalo, consigned to any of the elevator companies in the association, the consignee at once reported the fact to the secretary and treasurer of the association and its warehouse receipt was issued to the company receiving the grain and a like course was pursued when grain was shipped out of the said elevator.
The defendant presents several defenses to the collection of the amount fixed by the appraisers as its proportionate share of the loss to the plaintiff. By the terms of the policy it is rendered void if the insured “ has concealed or misrepresented * * * any material fact or circumstance concerning this insurance, or the subject thereof, or if the interest pf the insured in the property be not truly stated herein.” And it is further provided that the policy shall be void “ if the interest of the insured be other than unconditional and sole ownership; or if the subject of insurance be a building on ground not owned by the insured in fee simple.”
It will be noted that the policy does not insure the buildings of the plaintiff, but the “ use and occupancy ” of this property. The key note of- the argument of the learned counsel for the appellant is that “ use and occupancy ” signifies “ expected profits or estimated
The insured did carry on its business. It did retain unimpaired its title to the property. Whatever gives significance to the expression “ use and occupancy,” as intended in this policy, it continued to be burdened or benefited with. That expression did not con template invalidating the policy because the number of men employed in the business happened to be increased or diminished, or because the amount of the business may have been augmented, or because the elevator was run to full capacity, or only occasionally. The vitality of the policy in no way hinged upon the manner in which the property was managed, If the plaintiff parted with the user, if it transferred the occupancy to another, then the insurer might be heard to complain.
The authorities cited by the learned counsel for the appellant do not hold that the expression “ use and occupancy ”• in a policy implies profits or earnings. In Wright v. Pole (1 Ad. & El. 621) the insured, whose property, which was an inn, had been burned, sought to recover for loss sustained by him by persons refusing to patronize him while it was undergoing repairs. The court held that these damages were not covered by the policy; that while profits could be made the subject-matter of insurance “ he must insure them gua profits.” In Niblo v. North American Fire Ins. Co. (1 Sandf. 551) the court also held that profits represented an insurable interest, “ but they must be insured as such.” In Abbott v. Sebor (3 Johns. Cas. 39) the court decided that a person interested in the subject-matter from which the profits are derived may insure those profits. In these cases, it will be observed, the court simply holds that profits may be the subject-matter of insurance, but in order to be covered they must be included specifically in the policy. The cases proceed upon the assumption that the policy determines what is insured and nothing will be read into the policy to relieve the insurer from the strict performance of the agreement or to add to the burdens it has undertaken to meet.
It is undoubtedly true, as urged by the counsel for the appellant, that the essence of an ordinary fire insurance policy is indemnity against loss. There is this in the present policy, however, that distinguishes it from the ordinary open policy. The sum stipulated in
In construing a valued policy the court, in Voisin v. Providence Washington Ins. Co. (51 App. Div. 553), nse this language .(at p. 560): “ This was a valued policy, and undoubtedly the rule is well settled that the value of the goods stated in a valued -policy is, in the absence of fraud1, conclusive between the parties,; however largely in excess of the true value.”
Wood, in his work on Fire Insurance,'thus states; the principle-in section 43 : “ When a valuation is made by the insurer he is, in the absence of fraud, estopped from disputing it, and is liable for the value fixed, although the real value of the loss is less than the sum insured. In such cases the insured is required to make no proof as ■to value. His case is made when he establishes a total loss of the property, and a substantial interest in a subject corresponding to and satisfying the description'mentioned in the policy.”
The defendant’s argument rests upon the fallacious assumption that the plaintiff has parted with its earnings and profits. The twenty elevator companies forming the pool put their profits in the common fund and it is distributed according to a prescribed schedule of percentages. Presumptively each company received what it earned, less the small expenses incident to- the management of the business by the combination. Instead of retaining its profits pri
It is urged that inasmuch as the combination agreement provides that “ destruction by fire * * * shall not deprive such elevator representative of his participation in the division of earnings,” the" plaintiff, if permitted to recover on its policy and participate in the common profits as well, obtains double compensation for its loss. The inability to do business by reason of the loss by- fire lessens the profits of each elevator company in the association. In the present case it is stipulated that the gross earnings collected by the Western Eleváting Association during the time of the interruption of plaintiff’s business was $50,000 less by reason thereof, and ¡plaintiff’s percentage of that loss was about $3,000. This question, as well as the other upon which defendant hopes to escape payment, depends upon the vital one whether the earnings or their disposition are .of any concern'to the insurer.
By the stipulated facts it appears that since the fire the earnings paid over to the plaintiff by the Western Elevating Association amount to $30,000, and this will be augmented by the further sum of $2,698, and the defendant contends there should be credited on this policy its proportion of these earnings, and which, it is conceded, amount to $614.24. In Foley v. Manufacturers’ Fire Ins. Co. (152 N. Y. 131) the policy was upon three dwelling houses in process of con
If a portion of a tenement house is destroyed by fire and the owner is fortunate enough to lease the portion remaining uninjured for as much as he had been gaining from the whole building, the insurer under a policy of this kind is not entitled to a reduction by reason of the fact that the insured sustains no loss in earnings. The difficulty with counsel’s argument is that this policy is not unqualifiedly a contract of indemnity. As already stated, it partakes of the character of a valued policy, and in the absence of fraud no diminution of the stipulated sum when adjusted is permissible to the' defendant.
The defendant took part in the selection of the appraisers, and I seriously doubt its right to interpose the defense of breach of warranty (Smith v. Glens Falls Ins. Co., 62 N. Y. 85), but I prefer to uphold the- claim of the plaintiff on the ground already stated.
The policy was prepared by the insurer and evidently for the
The judgment and order should be affirmed, with costs to the respondent.
All concurred.
Judgment and order affirmed, with costs.