Bole v. New Hampshire Fire Ins.

Opinion by

Mb,. Justice Williams,

Hugh M. Bole, a manufacturer in the city of Pittsburgh, made a deed of assignment for the benefit of creditors in April, 1891. The plaintiffs are the assignees. At the time of the assignment H. M. Bole held a number of policies of insurance upon his building, machinery and materials, which did not expire until the 24th day of October following. On or about the day on which the policies expired the broker through whom they were obtained visited the premises to see about their renewal. The machinery was not then in operation and had not been for some days, but the premises were actually occupied by the foreman who was engaged in putting together, and making sale of, engines and other articles belonging to the assigned estate. He renewed the policies for an amount then agreed upon and the premiums were paid. In the policy sued on, and several others, the following provision appeared. “ This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto shall be void .... if the subject of insurance be a manufacturing establishment and it be operated in whole or in part later than ten o’clock at night, or if it cease to be operated for more than ten consecutive days.” The defence rested mainly on the facts that the subject of insurance was a manufacturing establishment and that it had not been operated for manufacturing purposes for more than ten days before the happening of the fire.

This appeal depends on the meaning of the words “ cease to be operated for more than ten days,” found in the provision we have quoted from the policy. In determining the meaning of these words we must remember that words having no fixed technical meaning should be taken in their natural and obvious sense; that a provision capable of two or more meanings should be construed most strongly against him whose undertaking it is; and that the circumstances surrounding the parties when the contract was made, and affecting the subject to which it relates, form a sort of context that may be resorted to in doubtful cases to aid in arriving at the meaning of the contract.

In Philadelphia Tool Company v. The Assurance Company, 182 Pa. 236, the policy contained a provision that it should be void unless “ the assured was the sole and unconditional owner of the property insured.” He was in fact a lessee. But it appeared that the policy was issued without a written application and on the knowledge of the agent. We construed this provision in the light of the circumstances surrounding the issuing of the policy and permitted the insured to recover for the leasehold interest which was actually held by him.

In Krug v. German Fire Insurance Co., 147 Pa. 272, a canning establishment at the close of the season was insured as a place of storage ; and the policy provided that it should be used for storage only. A fire was built under the boiler to blow the water out of the pipes and flues, and on the night of the same day the premises were destroyed by fire. The building of the fire to blow out the pipes was held not to be the use of the premises for any other purpose than storage. It was to complete the preparation necessary for devoting the establishment to that particular purpose, and was therefore not a violation of the condition in the policy.

In Doud v. Citizens Insurance Co., 141 Pa. 47, and in Roe v. Dwelling House- Ins. Co., 149 Pa. 94, the policies sued on contained a provision that they should be void if the premises should be vacated without the consent of the insurer. In both cases the fire occurred while the houses were unoccupied, between the outgoing of one tenant and the incoming of another. In Roe’s case the tenant went out on the twenty-fourth of March, although his lease did not expire till the first of April. Another tenant was to move in on the first of April. The fire occurred on the twenty-eighth of March. We held that, as to the owner, the premises had not been vacated within the meaning of the policy. The property was under lease, but some time might naturally elapse between the outgoing and incoming of tenants, which might vary with circumstances over which the insured had no control.

A similar disregard of the mere letter in aid of the real purpose of the contract was made in Dougherty v. The Pacific Mutual Life Insurance Company, 154 Pa. 385. The policy-provided that the company should not be liable if the insured was injured or killed while on a railroad bridge, trestle or roadbed. He was killed on the roadbed of a railroad at a public crossing while passing along a highway. We held the company to be liable.

Similar in principle are the cases of Pickett v. The Insurance Co., 144 Pa. 79, and Humphreys v. Benefit Association, 139 Pa. 264. In each case the letter was disregarded in order to reach a proper interpretation of a stipulation in the policy.

In the case before us when the policy was issued the proprietor of the manufactory had failed. His property was in the hands of his assignees, who wrere seeking insurance. The machineiy was not in operation at the time and had not been for days. Unsold manufactured goods and unused materials were scattered through the factory, which was realty in use as a store and salesroom in charge of the foreman. It was not vacant or unoccupied, but the fires were out and the wheels were still. Operations at a factory ordinarily include both the manufacture and sale of the articles produced. The manufacturing processes of the insolvent were discontinued, but the sale of goods on hand, by the assignees, was in progress and the factory was occupied regularly for this purpose. This branch of operations was necessarily conducted in the factory where the articles were. The apparent risk was not increased but diminished by the closing of the machine shop, so long as the occupancy of the premises as a salesroom continued. It continued down to the time of the fire. In the language of the special verdict rendered in this case, “ The foreman of the shops remained in charge, keeping the place cleaned up and selling stock and material on hand; .... he also attended to the delivery of the property sold, and when he needed help in this work or in delivery he was furnished with the necessary assistance.” He actually delivered a steam engine to a purchaser on the 31st of March, 1892, and the fire took place on the afternoon of the following day. We agree with the learned judge of the court below that upon these facts the factory had not ceased to be operated within the meaning of the policy, and that judgment on the reserved question was property entered in favor of the plaintiff.

The judgment is therefore affirmed.