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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
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 departments 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. .
compensation law; liability without fault; due process of law; constitutionality of statute. 251–273
Die Arbeitseinstellungen und Aussperrungen in Österreich während des Jahres 1908 ...... 203-209
Reports on Strikes and Lockouts and on Conciliation and Arbitration Boards in the United
earning power: German experience in 1897 and 1907.)
Page. International Association for Labor Legislation, resolutions of the sixth delegates' meeting of the.. 182–193 Administration of labor laws..
183, 184 Child labor.....
184 Compressed air, work in.
192, 193 Holidays for workmen
187 Home work...
187, 188 Industrial poisons..
189-192 International labor conventions.
182 Maximum working-day.
185-187 New sections and constitutions of sections.
182, 183 Night work of young persons
184, 185 Prevention of accidents.
193 Workmen's insurance..
193 Occupational diseases, report of Illinois commission on..
194-202 Strikes and lockouts: Austria, 1908..
203-209 France, 1908.
209-215 Germany, 1908.
215-220 Great Britain, 1908 and 1909.
221-231 Netherlands, 1906.
231-239 Spain, 1906.
239-242 Sweden, 1903-1907.
242-247 Workmen's compensation and insurance laws and bills: Alien beneficiaries, nonresident.
106 Burden of cost.
104 Compensation and insurance systems distinguished.
102 Compensation, forms of.
104, 105 Compulsory statute of New York, court decisions on.
109-111 Compulsory systems..
102 Constitutionality, questions as to.
106-111 Contracts, special..
103 Cooperative systems.
102 Damages, suits for..
103 Defenses, abrogation of, in suits for damages.
103 Disputes, settlement of..
105, 106 Election, methods of..
103 Elective systems...
102 Industries covered.
102, 103 Notice and claim, time for.
105 Period of disability before compensation accrues.
104 Scope of laws.
102, 103 Table of principal features.
165-170 Text of drafts of bills by associationsAmerican Federation of Labor.
171-175 National Civic Federation...
175-181 Text of lawsCalifornia.
124 New Hampshire.
125-127 New Jersey.
128-132 New York.
144-151 Workmen's compensation commissions, reports of: Illinois.
98, 99 New Jersey.
99, 100 Washington.