East & West Ins. Co. of New Haven, Conn. v. Fidel
| Decision Date | 06 April 1931 |
| Docket Number | No. 326.,326. |
| Parties | EAST & WEST INS. CO. OF NEW HAVEN, CONN., v. FIDEL. |
| Court | U.S. Court of Appeals — Tenth Circuit |
J. O. Seth, of Santa Fe, N. M., for appellant.
Carl H. Gilbert and M. W. Hamilton, both of Santa Fe, N. M., for appellee.
Before PHILLIPS and McDERMOTT, Circuit Judges, and KENNEDY, District Judge.
The plaintiff recovered in this action at law upon two fire insurance policies, and the company appeals. The case was tried without a jury, and most of the facts were stipulated. The sole question presented is whether the policies, or either of them, cover a three-story brick building adjacent to and communicating with the two-story brick building described in the policies. The trial court found that the description in both policies was ambiguous, and that the parties intended to cover both the two-story older part as well as the three-story newer part of a building known as the Fidel Building.
The $20,000 policy was issued on June 12, 1927, while the three-story addition was in course of construction; the $5,000 policy was issued on February 12, 1928, some five months after the addition was completed. The description of the property in both policies is identical, and is:
"* * * on the two story Composition roof brick building, * * * occupied as Feed and Variety Store and Warehouse on first floor and Hotel on the second floor, situated Southwest corner of Galisteo and Water Streets, Sanborn Map Page 5 Nos. 128-27-28 City of Santa Fe, State of New Mexico."
The policy provided that the company should not be liable for damage occurring "while mechanics are employed in building, altering or repairing the described premises beyond a period of 15 days," unless permission therefor was endorsed on the policy. Such an "Alterations and Repairs Permit" was endorsed on each policy, which reads:
"Permission granted for mechanics to be employed for more than fifteen (15) days in making alterations, improvements and repairs to any building herein described, and in constructing additions or sheds which attach to and communicate with such building, and the insurance, if any hereunder, on such building, is hereby made to cover such alterations, improvements, repairs, attached and communicating additions and sheds, also building materials and supplies therefor, while contained therein or on the premises immediately adjacent thereto; and the insurance, if any, hereunder, on contents of any building herein described is hereby made to cover in such attached and communicating additions and sheds to said building; but any change in a fire wall, the removing or replacing of the joists or supports of a floor, or the construction of additional stories of any building herein described, when mechanics are employed for such purposes for more than fifteen (15) days at any one time, shall not be permitted by this policy, unless specifically included by endorsement attached hereto."
The policy also contains the customary provision that no waiver shall be binding unless in writing and endorsed on the policy.
The facts stipulated, together with the most favorable version of plaintiff's testimony, disclose that on June 12, 1924, plaintiff owned a frontage of 120 feet on Galisteo Street, at its intersection with Water Street, in Santa Fe. On the corner, and extending south approximately 69 feet 1½ inches, there was a two-story brick building with a composition roof, erected in 1922. The second story was used as a hotel; there were three ground floor rooms, the corner room being occupied by a variety store, the next room as a lobby or entrance to the hotel, and the south room as an office connected with a feed store, and in which there was occasionally stored small quantities of grain. The "Sanborn Map" referred to in the policies, was prepared by and for the convenience of the insurance companies doing business in Santa Fe. "Page 5, Nos. 128-27-28" thereof described the land on which this building was located and approximately one foot more.
On the south 52 feet of such frontage, in 1924, there was a one-story brick and adobe building occupied by a feed store, warehouse and laundry. On June 12, 1924, two policies were issued on these properties, one for $22,000, which described the "two-story composition roof brick building" in the identical language as the policy in suit. The other was for $3,000 and its description reads:
"The one-story composition and earth roof adobe and brick buildings, including foundations, plumbing, electrical wiring and stationary heating, lighting and ventilating apparatus and fixtures therein; also all permanent fixtures, stationary scales and elevators, belonging to and constituting a part of said buildings; occupied as grocery, feed store and laundry, situated Galisteo Street — Sanborns Map page 5 — Nos. 120 and 30, City of Santa Fe, State of New Mexico."
"Sanborn's Map page 5 — Nos. 120 and 30" describes the property — except for about one foot — on which was located the one-story brick and adobe building. In the spring of 1927 the plaintiff tore down the one-story brick and adobe building and commenced the construction of the three-story brick building on the same ground; the south wall of the two-story building was built up another story, and used as the north wall of the new structure. On June 12, 1927, both of the policies expired; the policy of $3,000 on the one-story building was not renewed; the $22,000 policy was renewed, the description being identical with its predecessor, and is one of the policies now in suit. At that time the outer walls, roof, sub-floors, joists, supports and partitions of the three-story structure were completed. However, mechanics were employed in finishing the structure until September, 1927. When completed, the upper floors of the two buildings were so connected as to be used as one hotel, and the entire structure was known as the Fidel Building. It is stipulated that "said three-story building was so erected as to be a communicating addition to the two-story building hereinabove referred to." The occupancy of the ground floor of the three-story building is not shown. Since February, 1927, the south room of the two-story building has been occupied as an electric store.
In September, 1927, the plaintiff advised the agent of the defendant at Albuquerque, of the new addition, and asked to have the $3,000 policy (which had already expired) cancelled, to have an 80 per cent. co-insurance clause substituted for the 90 per cent. clause in the $22,000 policy, and to have it reduced to $20,000. The agent advised him that the $22,000 policy would cover the three-story addition. The policy was reduced as requested. In February, 1928, the $5,000 policy in suit was issued.
The $20,000 Policy.
The plaintiff claims that there are both patent and latent ambiguities in the $20,000 policy, the patent ambiguities arising from the description contained in several subsequent endorsements. These claims need not be explored, for we have no doubt that liability exists as to this policy by its terms. When it was issued, in June, 1927, a communicating addition to the two-story building was in course of...
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