Page v. Northern Insurance , 125 N.Y.S. 1066 ( 1910 )

Laughlin, J. :

This is an action on an insurance policy which the plaintiff was doubtless led to believe would, in the event of the "destruction of or damage to his goods by fire, indemnify him for the loss of profits that he would have derived on a sale of the goods but for the" fire. It is'first expressly provided in the policy that the company insures the plaintiff on his stock of goods against all direct loss or damage by fire except as thereinafter provided “to an amount"not exceeding Fifteen hundred dollars, * * * being this company’s pro rata share of the agreed commissions and' or [sic] profits off assured, of not exceeding 15 per cent on the sound value ” of the merchandise to which the: insurance relates. One would expect from this pro-, vision that it was the design of the company, either alone or with other companies, if any, which ■ had written or might write like insurance to insure the owner against loss of commissions or profits on the goods, and that ,the maximum liability should not exceed fifteen per cent of the value of the goods before the fire. The appellant insists that this was an absolute undertaking on the part of the company. If he had been' allowed to recover on this theory his damages would have been much greater.

The trial court was of opinion that this apparently absolute liability for insurance on profits was qualified and limited by a succeeding provision of the policy, which is as follows: “ If during the term of this policy, said merchandise-, or any portion thereof, shall be destroyed or damaged by fire, this Company shall be liable for a loss of commissions and or [sic] profits equal to not exceeding 15 per cent of the amount of damage which such goods shall be found to have sustained, which damage shall be the final cost to the companies covering the stock, irrespective entirely whether the stock is surrendered to the companies insuring the same or not.”

It would, seem from the provisions of this policy that it was understood, although it is not expressly stated, that the insured held insurance on the stock of goods as distinct from insurance on his profits; and it appears that such was the case. Pursuant to the provisions of the policies of insurance on the stock of goods, the damaged goods were surrendered to the insurance companies. The verdict was directed on the theory that the liability of the company was only with respect to a percentage of" profits on the difference between the total value of the goods and the amount received by the insured as salvage on the damaged goods taken over by the insurance companies under the policies, or in other words, the percentage of profits was limited to a percentage on the amount of the damages sustained by the insured. The sound value of the goods insured was found to be $42,785.40, and the loss or damage was found to be $17,521.70. The loss was adjusted.by the insurance companies on that basis If the ,fire had not occurred and the plaintiff had sold all of the goods insured in the due course of business, he would have received commissions or profits on the total sound value, but on account of the damaged goods being taken over by the insurance companies he is deprived of all opportunity of realizing any further profits thereon; and by the construction of the policy on which the verdict was directed, his insurance, instead of being based on a percentage of profits figured on the value of the property, turns out to be insurance based on a percentage of profits figured on only about two-fifths of such value.- If the companies had not taken oyer the stock, but had paid the damages and had left the damaged goods with the plaintiff, he might, have obtained on selling them the contemplated profit to the extent that they were ■ deemed to represent the sound.value of the stock insured; but he could not have recovered any loss of profits with respect to them under this policy and by the express terms of the provisions of the policy lastly quoted it appears that the same rule was to obtain irrespective of whether the owner was to be permitted to retain the damaged stock or the insurance companies took it over pursuant to. the policies.

The provisions of this policy are quite misleading; but we are of opinion that they cannot all be given force and effect unless the provisions firstly quoted are deemed to be modified by the succeeding y>ro visions, by which the assured has in effect stipulated that the profits shall be figured, not on the total value of the goods destroyed or damaged, but on the loss or damage thereto which the insurance ■companies insuring the stock of goods shall pay or be liable to pay. This falls far short of being an insurance on profits on the total value of the merchandise destroyed or damaged by fire, and is in effect merely an insurance 'on profits on a percentage of the total value equal to the amount of the damages which the insured is able to collect'or recover from the insurance companies liable for insurance oh the goods, and it becomes no insurance on the profits on the remainder thereof. Of course, any ambiguity in an insurance policy is to be resolved in favor of the insured; but the application of that rule does not aid the appellant, for, construing the policy in the light of all of its provisions, the agreement which the company has made is, we think, as herein stated.

The court, in directing the verdict, followed this construction, which gives the plaintiff all the relief which can be awarded to him under this policy. ' •

It follows, therefore, that the judgment should be affirmed, with costs.

' Ingraham, P. J., McLaughlin, Miller and Dowling, JJ., concurred. '

Judgment affirmed, with costs.