Keystone Paper Mills Co. v. Pennsylvania Fire Ins. Co.
| Decision Date | 25 June 1927 |
| Docket Number | 103-5 |
| Citation | 139 A. 627,291 Pa. 119 |
| Parties | Keystone Paper Mills Co. v. Pennsylvania Fire Ins. Co. et al |
| Court | Pennsylvania Supreme Court |
Argued May 12, 1927
Appeals, Nos. 103-5, Jan. T., 1927, by defendants, from judgments of C.P. Delaware Co., March T., 1925, Nos. 385, 391 and 392, on verdicts for plaintiff, in cases of Keystone Paper Mills Co. v. Pennsylvania Fire Insurance Co.; Keystone Paper Mills Co. v. Peoples National Fire Insurance Co. and Keystone Paper Mills Co. v. Fire Association of Philadelphia. Affirmed.
Assumpsit on policies of fire insurance. Before BIDDLE, P.J., specially presiding.
The opinion of the Supreme Court states the facts.
Verdicts and judgments for plaintiff against the Pennsylvania Fire Insurance Co. for $13,737.86, against the People's National Fire Insurance Co. for $4,607.74 and the Fire Association of Philadelphia for $6,911.57. Defendants appealed.
Errors assigned were various rulings and instructions, quoting record.
Judgments entered to Nos. 103, 104 and 105, are affirmed at the cost of appellants.
Horace Michener Schell, with him Albert L. Moise, Howard M. Lutz, of Lutz, Ervin, Reeser & Fronfield, for appellants. -- It was error on the part of the trial judge to leave to the jury the question as to whether plaintiff should have accepted one of the offers to repair. He should have charged that plaintiff should have accepted one of these offers, or explained its conduct in scrapping the machine without notice to defendants.
There was error in the trial judge's exclusion of the testimony that some months before the fire, plaintiff had a "for sale" sign painted, and that for some months before the fire this sign was maintained on the premises: Covanhovan v. Hart, 21 Pa. 495; Com. v. Yerkes, 29 Leg. Int. 60.
Frank M. Hunter, with him John B. Hannum, Jr. and James Gay Gordon for appellee.
Before MOSHZISKER, C.J., FRAZER, WALLING, SIMPSON, KEPHART, SADLER and SCHAFFER, JJ.
The action in the court below was based on five policies of insurance against separate companies to recover damages to machinery occasioned by a fire at the Keystone Paper Mills. The fire broke out at midnight and burned with terrific intensity throughout the night. It started in the waxing room where many tons of ordinary paper, large quantities of wax paper, and many thousand pounds of paraffin were located. The heat was so intense that glass windows were melted in adjoining rooms. The particular machine about which this action centered is described as a paper machine located in the room next to the waxing room. It was a large machine, made up of thousands of parts, consisting of many rolls of different designs and sizes, and would require the labor of eight or ten men about two months to assemble on its foundation plates. It was a hundred feet long and nine feet wide and weighed about a hundred tons. The paper stock in fluid form was carried into and through the first section by a wire mesh. This section is comprised of a series of rolls referred to as breast rolls, couch rolls and a number of table or tube rolls. From the first section the paper was carried on a belt through a series of press rolls, during which process some of the moisture was pressed out of it. From the last press roll the paper was passed to what is referred to as the "dry" part of the machine, making its way on canvas belts over eighteen "dryers," a series of steam filled rolls, one above the other; and thence to the finishing apparatus, which consisted of two series of "calendar" rolls and from them to the reel and slitter which slit the different sizes for the market; and from there to the winders. It was driven by gears with large wooden cogs, with the aid of pulleys. The machine had to be precisely level, the rolls in perfect alignment and absolutely round, and some of the parts true to the extent of from one to two one-thousandths of an inch. It made an exceptionally difficult and high grade of paper and had a daily average capacity of ten tons.
The flames from the waxing room, through openings in the wall, swept directly across the paper machine. It was subjected to a continuous hot fire for three hours, so hot it melted babbitt bearings. This could be done only when exposed to a temperature of about 600 degrees. An overhead sprinkling system and a fire hose pushed through a hole in the roof plied water on it in constant flow for hours.
The question before the jury was the value of the machine before and after it had been damaged by the fire. Plaintiff's evidence, if believed by the jury, showed that it was, for all practical purposes, useless. This was contested by defendants. We do not propose to review the evidence as it is a matter of importance to the parties only. The questions raised were solely for the jury, under proper instructions from the court.
The policy gave the insurance company an option to rebuild or repair the damaged property. Appellants now seek to limit plaintiff's recovery to the estimated cost of repairs; or, if that was not allowable, then they contend that, as the machine was sold for junk, the discrepancy between the estimated cost of repairing compared with the value given in evidence by plaintiff, cast on the paper company the burden of explaining its conduct in selling the machine for scrap; in other words, their act in selling was a breach of good faith and fair dealing. We might dispose of all the assignments relating to questions of repairs, by the observation that the affidavit did not set up any offer to repair or rebuild the machine, or any offer to place it in as good a condition as it was before the fire, both as to service and durability; the pleadings were wholly silent on the subject of repairs.
When an insurance company defends on the acceptance of the option to repair, or rebuild, or bases any defense on this repair provision as ground to reduce the policyholder's claim, it must give specific notice of its intent so to do through averments in the affidavit of defense: Farmers' Bank v. Manchester Assur. Co., 106 Mo.App. 114, 80 S.W. 299; Port Blakely Mill Co. v. Hartford Fire Ins. Co., 50 Wash. 657, 97 P. 781; Sutherland v. Standard Life & Acc. Ins. Co., 87 Iowa 505, 54 N.W. 453; Mechanics' Ins. Co. of Phila. v. C.A. Hoover Distilling Co., 182 F. 590, 596.
The provision in a policy that liability should not exceed the cost to the insured of replacing the property and all like subordinate provisions, limiting or abating the primary liability of the insurer, constitute no part of the insured's cause of action, if there is a breach of those stipulations. They are inserted in the policy for the benefit of the insurer and they must be pleaded by the latter if it seeks to diminish or limit the amount of its recovery by reason thereof. This is the rule deduced from the authorities: Ruth-Hastings Glass Tube Co. v. Slattery, 266 Pa. 288, 290, 291; Dietrich v. Davies, 274 Pa. 213, 215; Hoffman v. Mutual Fire Ins. Co. of Reading, 274 Pa. 292, 296; Farmers' Bank v. Manchester Assurance Co., supra; Port Blakely Mill Co. v. Hartford Fire Ins. Co., supra; Sutherland v. Standard Life & Acc. Ins. Co., supra. Even as affecting the credibility of the witnesses, it is in the nature of a substantive defense of which plaintiff should be advised.
It appears that two companies made offers to repair, but neither offer was...
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