Hudson Mfg. Co. v. NEW YORK UNDERWRITERS'INS. CO.

• Decision Date: 07 June 1929
• Docket Number: No. 4110.,4110.
• Citation: 33 F.2d 460
• Parties: HUDSON MFG. CO. v. NEW YORK UNDERWRITERS' INS. CO. et al.
• Court: U.S. Court of Appeals — Seventh Circuit

33 F.2d 460 (1929)

HUDSON MFG. CO. v. NEW YORK UNDERWRITERS' INS. CO. et al.

No. 4110.

Circuit Court of Appeals, Seventh Circuit.

June 7, 1929.

Harry A. Hageman, of St. Paul, Minn., for appellant.

James D. Shaw, of Milwaukee, Wis., for appellees.

Before ALSCHULER and PAGE, Circuit Judges, and LUSE, District Judge.

PAGE, Circuit Judge.

Appellant's sole contention is that the method of fixing the loss, as provided in clauses 2 and 3 of section III of the rider attached to the insurance policies sued on, is illegal, because of the provisions of the Wisconsin statutes.

Following the space at the top for the insertion of the name of the company issuing the policy, the face of the Wisconsin standard fire insurance policy reads (Wis. Stats. 1927, p. 1652):

"Amount $______ Rate ______ Premium $______

"In consideration of the Stipulations herein named and of ______ dollars Premium Does Insure __________ and legal representatives, to the extent of the actual cash value (ascertained with proper deductions for depreciation) of the property at the time of loss or damage, but not exceeding the amount which it would cost to repair or replace the same with material of like kind and quality within a reasonable time after such loss or damage, without allowance for any increased cost of repair or reconstruction by reason of any ordinance or law regulating construction or repair and without compensation for loss resulting from interruption of business or manufacture, for the term of * * * against all direct loss and damage by fire and by removal from premises endangered by fire, except as herein provided, to an amount not exceeding _____ Dollars, to the following described property while located and contained as described herein, or pro rata for five days at each proper place to which any of the property shall necessarily be removed for preservation from fire, but not elsewhere, to wit:

Space for description of property.

"This policy is made and accepted subject to the foregoing stipulations and conditions, and to the stipulations and conditions printed on the back hereof, which are hereby made a part of this policy, together with such other provisions, stipulations and conditions as may be endorsed hereon or added hereto as herein provided."

For the purpose of covering loss consequent upon the interruption of use and occupation, the five appellees (defendants) used the standard form, but, instead of describing the property in the "Space for description of property," attached a so-called rider, which, so far as material, reads as follows:

"The conditions of this contract are that if the building" (describing appellant's plaintiff's factory at Oshkosh, Wisconsin) "be destroyed or damaged by fire occurring during the term 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, consisting of:

"I. Net profits on the business which is thereby prevented;

"II. Such fixed charges and expenses as must necessarily continue during a total or partial suspension of business to the extent only that such fixed charges and expenses would have been earned had no fire occurred;

"III. Such expenses as are necessarily incurred for the purpose of reducing the loss under this policy; for not exceeding such length of time, commencing with the date of the fire and not limited by the date of expiration of this policy, as shall be required with the exercise of due diligence and dispatch to rebuild, repair or replace such part of said building(s) and machinery and equipment and raw stock (Insert here `and raw stock' if liability due to damage to or destruction of raw stock is included) as may be destroyed or damaged subject to the following conditions and limits, towit:

"(2). Total Suspension Clause: The per diem liability under this policy during the time of total suspension of business of all the properties described herein shall be limited to the `Actual Loss Sustained,' not exceeding 1/300 of the amount of this policy for each business day of such suspension, except that in the case of business being operated on Sunday and/or holidays, in which event the said per diem liability shall not exceed 1/365 of the amount of this policy for each business day of such suspension, due consideration in either case being given to the experience of the business before the fire and the probable experience thereafter.

"(3). Partial Suspension Clause: * * * (Is on same basis as `(2). Total Suspension Clause')."

Under the provisions on the back of the standard form and of paragraph 12 of the rider in question, appraisers were appointed, and they found the number of days of total suspension and of partial suspension, and found the total loss to be $32,959.94, figured on the basis of an actual daily loss of $278.86. The appraisers did not consider or find the amount of the loss figured on the basis of clauses 2 and 3 of the rider in question. Contending for the $32,959.94, found by the appraisers, plaintiff moved for a judgment therefor upon the pleadings. Contending for the amount shown to be due when figured in accordance with the terms of clauses 2 and 3 of the rider, defendants moved for a judgment on that theory, and judgment was rendered accordingly for a sum aggregating $17,730.

Section 203.06 of the Wisconsin Statutes of 1927 (page 1653) provides by subsection 1 thereof:

"Standard Policy Exclusive — Exceptions. (1) No fire insurance company, corporation or association, except township mutual insurance companies, their officers or agents, shall make, issue, use or deliver for use any fire insurance policy on property in this state, other than such as shall conform in all particulars as to blanks, size of type, context, provisions, agreements and conditions with the printed forms of contract or policy so filed in the office of the commissioner of insurance as provided for in Sections 203.01 and 203.02 to 203.08, all inclusive, and no other or different provision, agreement, condition or clause shall in any manner be made a part of said contract or policy, or be indorsed thereon or delivered therewith except as follows, to wit." (The exceptions are not here material.)

Subsection 2 provides:

"(2) Printed or written forms of description and specifications or schedules of the property covered by any particular policy, and any other matter necessary to clearly express all the facts and conditions of insurance on any particular risk (which facts or conditions shall in no case be inconsistent with or a waiver of any of the provisions or conditions of the standard policy herein provided for), may be written upon or attached or appended to any policy issued on property in this state. Nothing in this section shall be construed as prohibiting the attachment of said policy of a clause or clauses insuring against any other risk or risks authorized by subsection (3) of section 201.05 to be embraced in the same policy with fire, or against consequential loss or damage including loss of rents, leasehold interests, profits or commission or loss resulting from interruption of business or manufacture due to any or all of the risks insured against."

It is urged that, because of the provision in section 203.21 of the Wisconsin Statutes (page 1659), appellee had no right to limit its liability below the amount written in the policy. That section provides:

"Whenever any policy of insurance is written to insure real property and the property insured is wholly destroyed, * * * the amount of the insurance written in such policy shall be taken conclusively to be the true value of the property when insured and the true amount of loss and measure of damages when destroyed."

Concerning this, it seems enough to say: The policy did not insure real property; by the very nature of the policy, the real property therein described could not have been intended to and could not be the measure of appellee's liability.

It is likewise urged that, because of the undisputed averment in the complaint that plaintiff paid for the insurance the "full and regular bureau...