Cement, Sand & Gravel Co. v. Agricultural Ins. Co.
| Decision Date | 26 December 1947 |
| Docket Number | No. 34492.,34492. |
| Citation | 30 N.W.2d 341,225 Minn. 211 |
| Court | Minnesota Supreme Court |
| Parties | CEMENT, SAND & GRAVEL CO. v. AGRICULTURAL INS. CO. OF WATERTOWN, N. Y., et al. |
Appeal from District Court, St. Louis County; Wm. J. Archer, Judge.
Action by the Cement, Sand and Gravel Company against the Agricultural Insurance Company of Watertown, New York, and others, to recover on fire policies. From an order denying the motion of all but one of the defendants for judgment notwithstanding verdict for plaintiff, or for a new trial, those defendants appeal.
Order affirmed in part and reversed in part, with directions.
Fryberger, Fulton & Boyle, of Duluth, for appellants.
Holmes, Mayall, Reavill & Neimeyer, of Duluth, for respondent.
Appeal from an order denying the motion of all the defendants except the Concordia Fire Insurance Company for judgment non obstante or a new trial.
The original action was brought against 11 defendants on 12 fire insurance policies to recover for the loss of personal property destroyed in a fire on February 15, 1946. The Concordia company, which had issued two policies, did not appeal, and the Alliance Insurance Company, which had issued one policy, dismissed its appeal. Therefore this appeal is limited to 9 policies and 9 defendants. The only question in issue is whether the personal property destroyed was covered by the policies.
Each of the policies in describing the property covered uses substantially the language contained in the policy of the Norwich Union Fire Insurance Society Ltd., which reads as follows:
Each of the policies permits other insurance. Two of the policies, however, namely, those issued by defendants Hardware Mutual Insurance Company and American Home Fire Assurance Company, in the "machinery and equipment" clause, limit the coverage to property within the 100-foot area and "not otherwise specifically insured." The policy of defendant Agricultural Insurance Company, as a matter of obvious typographical error, omits the words "one hundred (100) feet thereof" from the machinery and equipment clause.
Plaintiff's sand and gravel plant, consisting of several buildings and certain machinery and equipment, inclusive of the property covered by the foregoing policies, is located inside the Duluth city limits, but outside the built-up portion, on a tract of land containing gravel deposits. The main building, described in the policies as "comprising structure known as Gravel Screenings, Washing and Storage Plant," is located on the northwest corner of the plant area and consists of two structures 113 feet apart connected by a conveyor belt enclosed in a wooden housing extending in an east-west direction. The structure at the east end of the main building contains storage bins for finished gravel. In order to take care of any overflow of finished gravel, chutes run down from the storage bins to the hopper of a stock-pile conveyor, which extends outward in a southwesterly direction. The stock-pile conveyor is not connected with the main building except by electric wires which supply the electric power for its operation, but it is to be noted that the chutes, which are attached to the main building, extend into the interior of the hopper, which is an integral part of the stock-pile conveyor.
The destroyed personal property for which recovery is sought under the policies consisted of electric motors, belts, power and hand tools, oils, lubricants, miscellaneous repair parts and supplies, one P. & H. Shovel with repair parts therefor, two complete truck motors, and certain other truck supplies and repair parts. All this property was kept in a building (hereinafter called the storehouse) located about 120 feet south of the main building proper. One corner of this storehouse, however (covering an area of approximately 110 square feet), was within 100 feet of the end of the stock-pile conveyor. The storehouse, which had been located on the same spot for approximately four years, besides being used for storage purposes, also provided office and shop space and sleeping quarters for the watchman. Obviously, only a small portion of the destroyed property kept in the storehouse could have been stored in the small corner area which was within 100 feet of the stock-pile conveyor. Almost entirely within the 100-foot area, however, there was a warehouse in which certain motors were stored. Certain other buildings were wholly outside the area encompassed by a 100-foot radius, whether measured from the main building proper or the conveyor.
The question as to whether the property was covered by the respective policy contracts was submitted to the jury for determination. The jury brought in a verdict for plaintiff. Defendants urge a reversal of the trial court's order denying their motion for judgment non obstante or a new trial on the principal ground that the property destroyed was erroneously construed to be within 100 feet of the main building proper, and on the further ground that a construction of the policy terms was erroneously left to the jury.
1-2. Aside from the standard provisions required by statute, it is elementary that the language of an insurance policy, being that of the insurer, selected by it and intended for its own benefit in limiting the scope of its principal obligation, must be clear and unambiguous, and any reasonable doubt as to its meaning must be resolved in favor of the insured.1 This rule of liberal construction in favor of the insured is applicable to the provisions describing what property is insured against loss, and such descriptive provisions must be construed with reference to the nature of the property, the purpose for which it is ordinarily used, and the manner in which it is ordinarily kept.2
3. In determining the area of coverage under the clause "within one hundred (100) feet thereof," are the 100 feet to be measured from the main building proper or from the stock-pile conveyor as constituting part of such building? The intent of the contracting parties is to be ascertained, not by a process of dissection in which words or phrases are isolated from their context, but rather from a process of synthesis in which the words and phrases are given a meaning in accordance with the obvious purpose of the insurance contract as a whole. "* * * the day is past for adhering to technical or literal meanings of particular words in a deed or other contract against the plain intention of the parties as gathered from the entire instrument." Long v. Fewer, 53 Minn. 156, 159, 54 N.W. 1071. We cannot here say that the coverage clause is free from ambiguity in the light of the policy as a whole. The very wording of the beginning paragraph shows that the parties intended to insure the main building, not as an isolated structure with no relation to its surroundings and appurtenances, but as a gravel screenings, washing and storage plant. In defining the words "building or structure," it is expressly provided that it shall include all "attached and communicating additions, sheds, * * * conveyors, * * * forming one complete structure, * * * and all other exterior and interior permanent fixtures and equipment rightfully belonging to and forming part of the building." (Italics supplied). The definitive words quoted specifically include attached and communicating conveyors and all other exterior permanent fixtures and equipment rightfully belonging to and forming part of the building which is described as a gravel processing plant. Bearing in mind the nature of the property and its use, it would indeed be a narrow construction to hold that the stock-pile conveyor was not a part thereof. As an operative plant, the main building logically includes the conveyors as one of its essential functional parts. It could not operate in its customary manner without some device for removing the overflow of gravel. It is true that the conveyor has no actual physical attachment with the building other than the power transmission wires. It is, however, fed by communicating chutes which project from the building into the very opening of the conveyor's hopper. In a functional as well as in a practical sense, the stock-pile conveyor is an integral part of the main building as a gravel processing plant, and therefore the 100-foot clause is applicable to an area within a 100-foot radius of the conveyor. Significant, also, is the fact that the language used in describing the attached and communicating conveyors would have no purpose unless it is applied to the stock-pile conveyor. It is unreasonable to assume,...
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