Hartford Fire Ins. Co. v. Wilson & Toomer Fertilizer Co.

• Decision Date: 13 April 1925
• Docket Number: No. 4352.,4352.
• Citation: Hartford Fire Ins. Co. v. Wilson & Toomer Fertilizer Co., 4 F.2d 835 (5th Cir. 1925)
• Parties: HARTFORD FIRE INS. CO. v. WILSON & TOOMER FERTILIZER CO.
• Court: U.S. Court of Appeals — Fifth Circuit

4 F.2d 835 (1925)

HARTFORD FIRE INS. CO. v. WILSON & TOOMER FERTILIZER CO.^*

No. 4352.

Circuit Court of Appeals, Fifth Circuit.

March 21, 1925.

Rehearing Denied April 13, 1925.

Daniel MacDougald, of Atlanta, Ga., and Thos. B. Adams, W. E. Kay, and Reuben Ragland, all of Jacksonville, Fla. (Spalding, MacDougald & Sibley, of Atlanta, Ga., Kay, Adams & Ragland, of Jacksonville, Fla., and Underwood, Pomeroy & Haas, of Atlanta, Ga., on the brief), for plaintiff in error.

Robert R. Milam and George C. Bedell, both of Jacksonville, Fla. (Arthur Y. Milam, B. R. Milam, and G. W. Milam, all of Jacksonville, Fla., on the brief), for defendant in error.

Before WALKER and BRYAN, Circuit Judges, and DAWKINS, District Judge.

BRYAN, Circuit Judge.

This is a suit to recover the face value of a fire insurance policy. The policy is for $21,000, and insures the use and occupancy of plaintiff's fertilizer factory. It contains the following provisions:

"The word `business,' wherever used in this contract, shall be considered and held to have the following meaning according to the class of property insured: In a manufacturing property: `The production of goods,'" etc.

"If the said building or machinery or equipment or stock contained therein be destroyed or damaged by fire occurring during the life of this policy, so as to necessitate a total or partial suspension of business, this company shall be liable under this policy for the actual loss sustained of net profits on the business which is thereby prevented, and for such fixed charges and expenses as must necessarily continue during a total or partial suspension of business, for not exceeding such length of time as shall be required with the exercise of due diligence and dispatch to rebuild, repair, or replace such part of said building, and machinery and equipment and stock as may be destroyed or damaged, commencing with the date of the fire and not limited by the date of expiration of this policy, under the following terms and conditions, to wit:

"During the time of a total suspension of business, liability under this policy shall not exceed $70, for each business day of such suspension; during the time of a partial suspension of business, the per diem liability under this policy shall not exceed that proportion of the per diem liability which would have been incurred by a total suspension which the decrease in production (or business) bears to the full daily production (or business) at the time of the fire.

"It is a condition of this insurance that the daily production (or business) at the time of the fire shall be based upon the average daily production (or business) of all plants or properties herein described for the period in the preceding calendar year corresponding to the period of suspension due to the fire.

"Liability hereunder shall not exceed the amount of insurance by this policy, nor a greater proportion of any loss than the insurance hereunder shall bear to all insurance, whether valid or not, covering in any manner the loss insured against by this policy," etc.

"It is a condition of this insurance that as soon as practicable after any loss the assured shall resume complete or partial operation of the property herein described, and shall make use of other property, if obtainable, if by so doing the amount of loss hereunder will be reduced, and in the event of the assured continuing business (in whole or in part) at some other location or using other property during the time occupied in repairing or reconstructing the property named herein, the net profits so earned shall be applied to the reduction of the loss, and adjustment shall be made as provided herein for partial losses."

The policy also contains an arbitration clause. Its provisions other than those above stated are not material to this case.

At the time of the fire, plaintiff's plant consisted of a number of buildings. Only one of them was damaged by fire, but it was completely destroyed, and was by far the largest building in the plant, and it was the most important. It was used in the manufacture of acid phosphate, bone black, and bone meal, and in the curing and mixing of the ingredients of commercial fertilizers. In it phosphate rock was passed through grinding machines, crushed and pulverized, then washed down and acidulated with sulphuric acid, and pumped from another building, which contained acid chambers. By these operations was produced acid phosphate, which is a principal ingredient of commercial fertilizer. In this building was located machinery for acidulating and dissolving bone black and grinding bone meal. In it also the various ingredients there manufactured were mixed and put into sacks and made ready for shipment. These were the principal operations carried on at plaintiff's plant. Sulphuric acid was manufactured in a separate building. There were a number of other buildings used for storage...