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amount insured. In the case of partial suspension, it is the entire loss thus suffered up to the amount insured, but what that loss is must be ascertained through the medium of this proportional statement and calculation.
In case of a partial suspension of production, the insurance company is to be liable for such proportion of the net profits and fixed charges as the production so prevented bears to the average daily production, not exceeding the amount insured. The contract assumes that there is a just and equitable relation between the two, and this relation they attempt to utilize in determining and adjusting the loss of the assured. They undertake to indemnify a party from loss occasioned by a suspension of his business, which from the very nature of the undertaking, must be attended with and hampered by more or less uncertainty. However, this is the kind of contract which they wished to enter into and which they did in fact enter into. And apparently appreciating the difficulties and desiring to present an insurance proposition as free as possible from uncertainty and difficulty in adjustment of loss, they arrange that in case of a partial suspension of production the insurance company shall be liable for such proportion of the net profits and fixed charges, as the production so prevented bears to the average daily production, not exceeding, of course, $50,000. The difference between the entire and the partial suspension being only a difference in amount, but computed from and by the same standard. This is, we think, quite plainly provided for in the contract, and this we think is the interpretation which the trial judge placed upon the language of the contract.
The defendant's contention is that this part of the contract should be interpreted precisely as if it read "this company shall be liable for that proportion of the loss of net profits and fixed charges," etc. If it were interpreted in that way, the company would be liable for only a part of the entire loss caused by the partial suspension of production-something quite foreign both to the terms and good faith of the contract. The terms of this contract negative any claim of liability for the actual loss of net profits or any proportion of such actual loss in case of partial suspension of production; there were evidently insuperable objections to any such assumption of liability as that because of the character of controversy likely to arise in each case, whether the partial suspension of production related to the most profitable or to the least profitable part of the business of the insured. The mode of calculating the loss actually adopted in the contract in case of partial suspension of production avoids such controversy by assuming that the net profits are equally distributed over the entire production. And while this may be a fiction, it is a fiction which the insurance company evidently adopted, when it entered into this contract; and adopted it as an ingenious method of avoiding disputes as to the net profits of the particular portion of the business which was suspended.
It is provided in the contract that, if the assured in the judgment of two-thirds of the directors of the insurance company is needlessly prolonging a strike, the company may demand of the assured that it be settled within one month, and if this is not done the company may, at its discretion, cancel the policy on five days' notice. To shut down in whole or in part the works affected by the strike, and to disband the organization of the manufacturing and selling depart
ments proportionately to the loss of production caused by the strike, "would needlessly prolong" the strike period and delay the resumption of ordinary production. And the correctness of this view is emphasized by the fact that by the terms of the contract the loss shall be computed from the date of the strike to such time "as the assured is able to produce the former daily average and shall not be limited by the date of the expiration named in the policy." The trial judge held that by "fixed charges" were meant those expenses necessarily incurred in maintaining the organization in such a state of efficiency as would enable it to resume normal production without substantial delay after the strike was ended, or as the strike might be broken by a gradual return of employees. We see no error in this.
It is a novel contract; but its novelty and the difficulties which the defendants themselves have introduced into it can not fairly or justly be urged as reasons why the indemnity should not be paid by them, if calculated fairly and with approximate accuracy, which indeed is the only kind of accuracy apparently contemplated by all parties to the contract.
INDEX TO BULLETIN NO. 92. .
Accidents, industrial, and loss of earning power: German experience in 1897 and 1907.
Age and sex of injured persons...
Causes of accidents.
Duration of disability and loss of earning power..
Employment, length of, of injured persons in establishment and in occupation previous to
Establishments subject to accident insurance, number of.
Fault of the employer, of the employee, etc., per cent of accidents due to the.
Insurance associations for the compensation of accidents, administration of..
Nature of injuries sustained by persons injured..
Persons killed or injured, number of..
Rate of accidents.
Result of injuries sustained.
Employer and employee; injury to third person by employee; liability of employer; scope of
compensation law; liability without fault; due process of law; constitutionality of statute. 251-273
incompetent fellow servant; evidence..
injuries causing death; nature of liability; fellow-servant law; survival of right of action;
railroads; Federal statute; jurisdiction of State and Federal courts; interstate commerce.
successive verdicts; new trial; damages.
superintendence; construction of statute.
Hours of labor of employees on railroads; Federal statute; time on duty.
Workmen's compensation; liability without fault; constitutionality of statute.
Digest of recent foreign statistical publications:
Die Arbeitseinstellungen und Aussperrungen in Österreich während des Jahres 1908......
Statistique des Grèves et des Recours à la Conciliation et à l'Arbitrage Survenus Pendant
Streiks und Aussperrungen im Jahre 1908...
Reports on Strikes and Lockouts and on Conciliation and Arbitration Boards in the United
Werkstakingen en Uitsluitingen in Nederland gedurende 1907 and 1908..
Germany, industrial accidents and loss of earning power. (See Accidents, industrial, and loss of
Illinois commission on occupational diseases, report of.
Industrial accidents and loss of earning power. (See Accidents, industrial, and loss of earning
International Association for Labor Legislation, resolutions of the sixth delegates' meeting of the.. 182-193 Administration of labor laws..
183, 184 184 192, 193 187 187, 188 189-192
Great Britain, 1908 and 1909.
Workmen's compensation and insurance laws and bills: