Studley Box & Lumber Co. v. Nat'l Fire Ins. Co.

• Decision Date: 07 April 1931
• Citation: 154 A. 337
• Parties: STUDLEY BOX & LUMBER CO. v. NATIONAL FIRE INS. CO. SAME v. AMERICAN INS. CO. SAME v. ROYAL INS. CO.
• Court: New Hampshire Supreme Court

154 A. 337

STUDLEY BOX & LUMBER CO.

v. NATIONAL FIRE INS. CO.

SAME

v. AMERICAN INS. CO.

SAME

v. ROYAL INS. CO.

Supreme Court of New Hampshire. Strafford.

April 7, 1931.

Transferred from Superior Court, Strafford County; Young, Judge.

Actions by the Studley Box & Lumber Company against the National Fire Insurance Company, the American Insurance Company, and the Royal Insurance Company, respectively. Transferred on plaintiff's exception to a ruling against it.

Exception sustained.

Actions on policies giving the plaintiff business indemnity insurance. The policies, after describing the insurance as "Business Interruption Indemnity (Use and Occupancy Insurance)," contain these conditions:

"* * * If the buildings situate at the foot of Silver street, * * * Rochester, * * * and occupied as Box shook factory and dressing mill and/or machinery and/or equipment and/or stock contained therein be destroyed or damaged by fire * * * so as to necessitate a total or partial suspension of business, this Company shall be liable * * * for the actual loss sustained consisting of net profits on the business which is thereby prevented, such fixed charges and expenses * * * as must * * * continue during a total or partial suspension of business, and such expenses as are necessarily incurred for the purpose of reducing the loss * * * for * * * such * * * time as shall be required * * * to rebuild, repair or replace such part of said building and machinery and equipment * * * as may be destroyed or damaged, * * * subject to the following conditions: * * *

"Total Suspension: The per diem liability * * * during * * * total suspension of business of all the properties described herein shall be limited to the 'Actual Loss Sustained,' not exceeding 1/300th of the amount of this policy for each business day of such suspension, due consideration being given to the experience of the business before the fire and the probable experience thereafter.

"Partial Suspension: The per diem liability * * * during * * * a partial suspension of business shall be limited to the 'Actual Loss Sustained,' not exceeding that proportion of the per diem liability that would have been incurred by a total suspension of business which the actual per diem loss sustained, during * * * such partial suspension, bears to the per diem loss which would have been sustained by a total suspension of business, for the same time, of all properties described herein. * * *"

The policies also contained a condition that the sprinkler system installed should be maintained and not changed, as they were written at a rate "based on the protection of the premises" by the system.

Some notes were attached to each policy, prefaced with the statement that they were not a part of the policy and might be removed if desired. By one note "the description should clearly indicate the buildings, the use and occupancy of which it is intended to cover." By another note, if "the plant" operated daily, the per diem allowance in the total suspension clause was to be 1/365 instead of 1/300.

The plaintiff's premises lay between Western avenue and a railroad. Highway access was by Silver street, which ran from their northerly end, and which there connected with a roadway extending southerly through the premises and thence easterly to Western avenue. Between the southerly end of Silver street and the railroad were three buildings comprising the dressing mill, and southerly of this mill, and between the roadway and the railroad, was the shook factory. About 150 feet farther to the south and across a brook was a barn used for stabling horses and for storage. Other buildings, including a garage, shavings house, and office buildings, were in the part of the yard east of the roadway and north of the brook. A sawmill stood near the intersection of Western avenue and the roadway, and' there was a barn on the avenue.

In a fire the stable and some of the horses in it were burned. The horses were used in the operation of the plant, and were found to be an equipment of the stable. Incidental to the fire loss were certain expenses. They included a charge of the excess cost of hiring horses over owning some until a purchase could be made, labor in clearing the roadway and the barn on Western avenue in which horses might be stabled, and the expense of sawing lumber by other parties and made necessary because of shutting down the plaintiff's own sawmill so that the help might do the work of clearing the roadway and barn.

The court ruled that the policies did not cover the loss, but held the plaintiff entitled to recover for any of the items of incidental loss if they could be considered as a loss the policies covered. Transferred on the plaintiff's exception to the ruling against it.

Cooper & Hall and G. S. Hall, all of Rochester, for plaintiff.

Warner, Stackpole, Bradlee & Cabot, of Boston, Mass., and Conrad E. Snow, of Rochester (G. B. Rowell, of Boston, Mass., of counsel), for defendants.

ALLEN, J.

The cases present two points of construction of the policies. One relates to the coverage of the insurance and one to its amount.

As to the coverage, the insurance differs from ordinary fire insurance. Insurance against loss by fire of some part of the value of the property is not given. The policies insure against consequential loss to the insured's business carried on in the property destroyed or damaged by the fire. The insurance is indifferently designated as of business indemnity or of use and occupancy. But only actual loss is contemplated.'

In ordinary fire insurance policies the different items of the property insured are separately valued, although they may form a collective group of structures and contents devoted to a single enterprise. In business indemnity insurance its object may not be accomplished by such an apportionment of the entire insurance. The business as a whole...