Appeals, Nos. 113, 114, 115, 116, 117, 118, 119, and 120, March T., 1957, from judgments of Court of Common Pleas of Washington County, May T., 1955, Nos. 97-102, in case of Samuel Easton et ux., individually and trading as Easton Lumber and Builders Supply Company v. Washington County Insurance Company et al. Judgments reversed; reargument refused January 22, 1958.
George Y. Meyer, with him H. Gilmore Schmidt and William W. Matson, for appellants.
George I. Bloom, with him Walter W. Riehl, and Bloom, Bloom & Yard, for appellees.
Before Jones, C.j., Bell, Chidsey, Musmanno, Arnold, Jones and Cohen, JJ.
OPINION BY MR. JUSTICE COHEN
Plaintiffs were the owners of a certain property in Washington County. On October 1, 1951, there stood on this property a two-story concrete block and frame building with a basement and sub-basement. Because of
the grade of the land the basement and sub-basement at the back of the building were exposed above the ground. The sub-basement extended under the building to a depth of approximately 20 feet and was divided into four separate rooms. One side of each room was unenclosed, and the rooms could be entered only from the unenclosed sides. Finished lumber and building materials were stored in these rooms and in the rear of the basement which was partitioned from the rest of the basement. In front of the building, along a railroad siding, plaintiffs had stored some lumber. To the rear were open yards in which plaintiffs had stored their less valuable lumber.
In the open yards was a small building commonly called a shed, open on all sides and roofed with tar paper, used to store gutters and some lumber.
Prior to October 1, 1951, the property was protected under insurance policies "[on] the two story concrete block building ... occupied for living apartments, offices, and warehouse for lumber and builders' supplies. ...
"And on ... lumber in open yard adjacent to the above described warehouse.
"Privilege granted to finish and complete." (Emphasis supplied).
On October 1, 1951, the original policies to the value of $100,000 were cancelled at the request of the assured because the buildings carried an excessively high rate; and insurance in the amount of $60,000 (divided equally among six companies) was placed only "on stock of lumber and builders' supplies in open yards and sheds at the rear of assured's warehouse at Washington County, Pa." (emphasis supplied). After the new policies totaling $60,000 were issued, plaintiffs constructed additional sheds in the open yards and stored lumber
therein. These policies were renewed until October 1, 1954.
A fire completely destroyed plaintiffs' building, including the lumber and building supplies which were stored therein, on March 15, 1954. The lumber in the open yards and at the railroad siding, however, was not damaged by the fire.
Plaintiffs sought to recover on the insurance for their losses, maintaining that the partitioned basement and rooms in the sub-basement were "sheds" within the meaning of the policies and that the contents - lumber and builders' supplies - were thus insured. All the companies refused their claim. Plaintiffs on March 11, 1955, instituted separate suits, (consolidated for trial), against the several insurance companies in the Court of Common Pleas of Washington County. The cases were tried on the following theories: (1) that the word "sheds" is broad enough to encompass within its meaning the basement structures at the bottom of the concrete block and frame building; (2) that though the contracts of insurance are apparently clear, when an attempt is made to apply their terms to the existing situation an ambiguity arises in that the word "sheds" could apply equally to the basement structures or to the small building in the open yard or to both; that a latent ambiguity having thus developed, evidence is admissible to denote the exact reference intended by the parties to be attributed to the word "sheds"; (3) that through fraud, accident or mistake coverage of the materials in the basements was not included in the insurance contracts and that, therefore, the contracts should be reformed to include such coverage.
The trial judge rejected the plaintiffs' first theory - that the basement structures were sheds. However, he determined that the word "sheds" in the insurance policies was latently ambiguous. He therefore admitted
evidence to establish the exact reference intended by the parties when using the word "sheds" and submitted this question to the jury.
Additionally, the trial judge admitted evidence to determine whether the parties, pursuant to an oral agreement made with the defendants' agent, intended to insure the basement structures but failed to include their understanding in the policies because of fraud, accident or mistake. This issue was also submitted to the jury.
The jury returned a verdict in favor of the plaintiffs, and the defendants moved for judgment n.o.v. and for a new trial. From the refusal of their motions by the court en banc, (the trial judge dissenting), and the entry of judgment upon the verdict, the defendants have brought these appeals.
The plaintiffs' contention that the basement storage areas are "sheds" cannot be sustained. Simple words of common usage in a policy of insurance will be construed in their natural, plain and ordinary sense. Blue Anchor Overall Co. v. Pennsylvania Lumbermens Mutual Ins. Co., 385 Pa. 394, 397, 123 A.2d 413 (1956). It has not been suggested that the word "sheds" is a word of art or that it is not a simple word of common usage. We therefore construe it in its natural, plain and ordinary sense. The trial judge in his charge to the jury, quoting from numerous standard dictionaries,*fn1 stated: "the word 'shed', is defined as 'a slight structure built for shelter or storage; ... a lean-to, or separate building open in front, an outbuilding, a hut, as a wagon shed.' ... 'A small building slightly constructed and of simple form, usually one story high, and often
with front or front and sides open; also a lean-to, as a wagon shed.' ... 'A alight or temporary building; a large open structure for temporary storage of goods, as a shed on a wharf, a railway shed, a sheep shed, cattle shed.'" (Emphasis supplied). The dictionary's definition is consistent with the general usage of the word "sheds" and both are denotive of an unsubstantial structure created for a temporary purpose. Such a definition is wholly inapplicable to the basements of a permanent concrete block and frame two-story warehouse. Aside from the literal ...