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so employed by the receivers, un

"Indemity. der the order of the court, to ex

"In consideration of the stateamine the books of the various com

ments set forth in the declarations panies and persons insured to obtain

hereto attached, and hereby made a the necessary information regard- part hereof, and of the premium ing fixed charges and net profits and other matters in connection with the deposit specified herein (which de

posit is subject to adjustment), and claims. In making these investigations, this policy, does also bind himself,

that the assured, by acceptance of and in the hearings had in connec

his executors or administrators, to tion therewith, a number of ques

pay all such further sums as may tions arose involving the construc

from time to time be assessed on tion of certain provisions of the pol

this policy by the directors of said icies, affecting alike the rights of all

company, in conformity with the the claimants thereunder, and it was

articles of incorporation and bythought best by the receivers that

laws of this company and the laws they should receive directions from

of the state of Maryland; provided the court as to such questions, that such further sums shall not in Therefore two claims were selected

any case be more in any one policy as test cases upon which appropri

year than an amount equal to the ate proceedings were instituted, in

premium deposit for such policy which the views and directions of

year, does hereby agree to indemni. the court in respect to such ques

fy the individual, firm, or corporations were sought to guide the re

tion named in statement 1 of the ceivers in their dealing with all the

declarations

for the period claimants.

of one year

against the di. The two claims selected were the

rect, actual loss of average daily Standard Printing & Publishing Company and the Fleet-McGinley hereinafter defined, caused by a

fixed charges and/or net profits, as Company. The case of the Standard Printing of the assured,

strike of all or part of the employees

and sus& Publishing Company, the one now

tained during the period of such before us, was submitted to the court

strike, said strike beginning while upon an agreed statement of facts,

this policy is in force (except during which contains the policy of insur

the first fifteen days as hereinafter ance under which it was insured; provided) and continuing for a pethe by-laws of that company; and

riod not exceeding the 300 next sucits profit and loss statements, first, for the year ending December ceeding working days, at a rate not

exceeding three hundred dollars 31, 1920; second, for the four

($300) per diem, and not exceeding months preceding the strike; third,

an aggregate total indemnity of for the period of the strike commencing with May and ending with during any policy year.”

ninety thousand dollars ($90,000) September, 1921. It also contains schedules of

"Company's Liability. "fixed charges” filed by the receiv- "B. If a strike occurs during the ers and claimant respectively, com- term of this policy so as to cause a mencing the 1st day of May, and partial or a total prevention of proending September 30, 1921, both in- duction, the company shall be liable clusive, and also statements show- for 80 per cent of the direct actual ing monthly sales made by the in- loss of fixed charges and/or net sured between May 1, 1920, and No- profits sustained not exceeding in vember 1, 1921.

either case the per diem indemnity The provisions of the policy which or the total indemnity herein statare important in passing upon the ed; but the company shall not be questions presented are the follow- liable for any consequential loss ing:

whatever; nor shall the company in

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(143 Md. 303, 122 Atl. 195.) any case be liable for further loss occurred is impossible of exact hereunder, when, after a strike at ascertainment; consequently the the plant of the assured covered by amount of loss caused by the strike this policy, causing a total preven- is more or less speculative. tion of production, the average daily The loss of net profits may be, and production at said plant becomes at times is, estimated by selecting equal to eighty (80%) per cent of some other period of time in which the average daily normal produc- the insured has been engaged in tion, nor shall the company be liable business, most nearly approaching for further loss hereunder when, the strike period in similarity of after a strike at said plant causing conditions, and by ascertaining the a partial prevention of production, average daily net profits of that pethe average daily production of that riod; and if it be found that the part which was interrupted by the average daily net profits of the sestrike equals eighty (80%) per cent lected period are greater than those of the proportion so interrupted." earned during the strike period, be"Payment of Indemnity.

cause of the strike, the difference

therein is the loss of average daily "I. This contract is one of indem

net profits during the period of the nity only, and there shall be no lia

strike, subject, of course, to any bility unless there has been actual

special facts affecting the business loss. If the industry in which the

of one and not the other of said peplant herein described is engaged riods, indicating with reasonable becomes materially and generally certainty that the average daily net affected by increase or decrease in profits of the period selected would business activity during the period

be increased or diminished during of a strike at said plant, it is the in- the period of the strike by those tent of this policy that, in the ab- facts. sence of direct proof of the actual,

No unvarying general rule can be direct laws caused by enduring the established as to the period of time period of such strike, ascertainment

to be selected as a basis upon which of the actual loss shall be arrived at

the loss of profits during the strike through due consideration of what period may be estimated, applicable such increase or decrease shows

to all cases, because of the varying might reasonably have been expect circumstances and conditions incied during the period of such strike; dent thereto. It is only in those but liability hereunder shall in no

cases of like character and condievent exceed the per diem indem- tions that any general rule can be nity, or the total indemnity herein

established applicable to all. stated.”

The claims filed against the reThere were four questions pre- ceivers in this case are very similar. sented to the court below, all of The policies under which the claims which are presented to this court on were filed are practically the same appeal.

in form, and 90 per cent of them The first question is, How is the were issued to those engaged in the actual loss of average daily fixed printing business, who were alike charges and/or net profits insured affected by the printers' strike of against to be ascertained?

1921. It was because of their great The consideration of this question similarity that the court below was may very properly be divided in two asked, in passing upon the excepsubdivisions: First, the period to be tions filed to the claim of the Standused in calculating "the average;" ard Printing & Publishing Company, and, second, the element which to lay down some general rules apmakes up "fixed charges."

plicable to all the cases, by which the What would have been the actual receivers may be guided and connet profits of the business during trolled in distributing the funds in the strike period had the strike not their hands.

The counsel for the receivers con- of the contentions made by the partend that the first four months of ties, and fixed the year commencing the year 1921 should be selected and May 1, 1920, and ending with the used in estimating what would have 30th day of April, 1921, as the pebeen the average daily net profits riod to be used as a basis in estiduring the strike period had there mating the loss of the average daily been no strike, the reason given "fixed charges" and/or average therefor being that this, the nearest daily net profits during the period period to the strike, showed a falling of the strike. off of business, the sales being The court, in selecting the period largest in January, and smallest in mentioned, largely avoided the apApril, the month immediately pre- prehended unfair result which the ceding the strike. That such falling parties said would follow if the peoff of business started in the latter riod suggested by the other were part of 1920, and continued through adopted. the first four months of 1921, which It refused to accept the fourthey claim indicated that the period month period immediately preceding suggested by them approached as the strike, because of the extremely near as any other time what would low average of daily profits that have been the business conditions would have resulted therefrom, and of the strike period immediately also declined to accept the sixteenfollowing, in the absence of a strike. month period, as it would have made There was nothing, at least, to in- the daily average profits too high dicate that it would be more.

because of the inclusion within that The claimant, however, meets this period of six or eight months of contention by saying that the four greatly abnormal profits. months named by the receivers were In the period selected by the court not only too short a period upon were included not only the months which to estimate the profits of the of low profits, but several months of strike period with fairness to it, but very large profits. This, we think, such period was at a time of great had the effect of increasing the fluctuation and depression in busi- average daily net profits of the peness, and when the sales of the riod selected, to an amount sufficient claimant were at their lowest ebb. to meet any well-founded, contem

The counsel of the claimant con- plated increased profits of the strike tends that, in addition to the first period that immediately followed. four months of 1921, the twelve The period selected by the court months of the year 1920 should be below meets with our approval, as it included in the period to be used, will, in our opinion, because, as stated by them, it would based upon the rec

against loss from include the fiscal year of the Stand- ord before us, best strike-period

serve as a basis for profits.

for determining ard Printing & Publishing Company, ending with the 31st day of Decem- estimating the loss ber, 1920, and the parties would of average daily profits and "fixed thereby have the benefit of the charges." known net profits of that year.

We will now consider the question In reply to claimant's contention

as to what are "fixed charges" withthat the sixteen-month period im- in the meaning of the policy. mediately preceding the strike The receivers and the claimant should be used, the receivers state each filed a a schedule of "fixed that the first and major part of the charges," which, it seems, they year 1920 was abnormally good, and, thought should be paid or allowed if that year was included within the under the policy. period, it would produce a result un- In each of the schedules are found fair to the insurance company. the following items: “Rent," $1,

The court refused to accept either 741; "office and officers' salaries,"

Insurance

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(143 Md. 303, 122 Atl. 195.) $7,941.35; "taxes," $3,804.94; "heat manufactured product or goods on and light,” $361.74; "insurance," hand was certainly

certainly not "fixed $1,500; "Bluefield office," $26.21. charges.” As the policy does not

In the receivers' schedule are define "fixed charges,' what is found the following items, which do meant thereby is left to us to decide. not appear in the claimant's sched- Bassett on Accountancy, on page ule: "Power," $528.58; “telephone 244, cited by the receivers in their and telegraph," $552.50; "salesmen's brief, defines "fixed charges” as salaries," $7,100; "depreciation," those "charges which spread over $3,954.50.

the entire establishment, such as And in the claimant's schedules rent, insurance, taxes, mortgage inare found these items, which do not terest, depreciation, and the like, appear in the receivers' schedule: according to whether the plant is “Interest,” $1,598.13; "miscella- leased or owned.

'Fixed neous expenses," $1,703.57; "post- charges' arise out of the very being age,” $422.91; "repairs," $660.28; of the plant, and continue whether "traveling expenses,” $8,545.54. or not the business is operated."

The difference in the aggregate of The only case to which our attenthe two schedules is $1,383.50, and tion has been called, and the only the difference in the daily average one that we have been able to find is $9.32.

after diligent research, in which No doubt the "miscellaneous ex- "fixed charges” have been defined in penses" found in the claimant's an action brought upon an indemschedule include some of the items nity policy insured against loss of found in the receivers' schedule; as "fixed charges" caused by the strike, there is no item of "salesmen's sal- is the case of Buffalo Forge Co. v. aries” found in the claimant's sched- Mutual Security Co. 83 Conn. 393, ule, it is most probable that such 76 Atl. 995. In that case the court item is included in the item "travel- approved of and adopted the trial ing expenses" found in the claim- court's definition that by "fixed ant's schedule.

charges” were meant "those expensReference has been made to these es necessarily incurred in maintainschedules to show that the parties, ing the organization in such a state the claimant and receivers, did not of efficiency as would enable it to at that time differ so widely in what resume normal production without they regarded as "fixed charges," substantial delay after the strike and also to show that in the receiv- was ended, or as the strike might ers' schedule is found the item “de- be broken by a gradual return of preciation," which under that name employees.is not found in the claimant's sched- It is a well-settled rule of law that ule, although now the claimant con- contracts of insurance, like all other tends that depreciation is a “fixed contracts, are to be

-construction charge,” while the receivers contend considered accord- -meaning of

words. that it is not.

ing to the sense and It is claimed by the claimant, and meaning of the terms which the it would so seem from the record parties have used, and if they are before us, that the item “deprecia clear and unambiguous, these terms tion," which was disallowed by the

are to be taken and understood in court below, was understood by it their plain, ordinary, and popular to mean depreciation in the value of sense. Mutual L. Ins. Co. v. Murray, manufactured articles, and not the

111 Md. 600, 75 Atl. 348: Palatine depreciation of the

Ins. Co. v. O'Brien, 107 Md. 354, 16 -depreciation of product as fixed plant. If this be so, L.R.A.(N.S.) 1055, 68 Atl. 484; charge. the court was ab

First Nat. Bank v. Maryland Casualsolutely right in so holding. The ty Co. 142 Md. 454, 30 A.L.R. 618, depreciation in the value of the 121 Atl. 379. But it is also “a principle of universal application that, day, or the week, or by piecework, in order to arrive at the intention of whose services went into the actual the parties, the contract itself must production of the article produced or be read in the light of the circum- manufactured, and whose services stances under which it was entered could have been dispensed with into. General or indefinite terms without impairing the efficiency of employed in the contract may be the organization by rendering it unthus explained or restricted in their able to resume normal production meaning and application; and the without substantial delay, or to concontract must be so construed as to tinue the business through the pegive it such effect, and none other, riod of partial production, should as the parties intended at the time not, we think, be included among the it was made.” First Nat. Bank v. "fixed charges." Gerke, 68 Md. 456, 6 Am. St. Rep. The salaries of those mentioned, 453, 13 Atl. 358.

with other necessary expenses, inThe term "fixed charges" has, it curred in maintaining the efficiency seems, no well-defined meaning. Its of the insured's organization to the meaning is more or less general and extent we have stated, including the indefinite, depending somewhat up- charges specially mentioned in Bason the connection in which it is used, sett's definition of and the object and intention of the "fixed charges,” are

-what are fired

charges. parties by whom it is employed. the "fixed charges"

When used in a contract like the that were intended by the parties to one before us, it may have a differ- be covered by the policy. ent meaning from what it would The next question is: When does have if used in a different connec- the liability for loss end? The poltion, or with an entirely different icy fixes the end of each of three object or purpose.

The term was periods as a time at which the liahere used by the parties in a con- bility of the insurer under it ceases. tract whereby it was their object, First. For all loss suffered by the purpose, and intention to give to the insured after the strike has lasted insured indemnity against the loss 300 working days, within the time therein mentioned, caused by strike. for which the policy was issued. The insured was not insured against Second. When the maximum loss of the average daily net profits amount named in the policy as payalone, but also against loss of aver- able thereunder has been paid to age daily “fixed charges.”

the insured. The insured, no doubt, had in its Third. When, in case of total preemployment, at the time of the vention of production, the average strike, officers and employees whose daily production thereafter becomes term of office or employment was of equal to 80 per cent of the average much longer duration than the usual daily normal production; or, in case period of the strike, and whose serv- of partial prevention of production, ices the insured could not have dis- when the average daily production pensed with without loss to it, and

of that part which was interrupted without rendering it unable to re- by the strike thereafter equals 80 sume promptly normal production per cent of the proportion so interat the end of the strike, or to con

rupted. In this case, we are continue the business during the period

cerned only in the third of these culof partial production.

minating periods. The salaries of such officials and The question is first presented, employees should, we think, be in- How is the average daily normal

cluded in the "fixed production during the strike period charges.

charges” provided to be ascertained ? The answer to

for in the policy. this question is that such average But the compensation paid to other daily production for that time may employees who were hired by the be ascertained by the method that

-Wages as fixed

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