Clapp, Goldmann and Francis. The opinion of the court was delivered by Goldmann, J.A.D.
Plaintiff recovered judgment in the Law Division against defendant in an action seeking reimbursement under a Travelers policy for liability incurred by plaintiff in the course of certain boiler repairs. Defendant appeals, claiming that the exclusion clause of its policy applied to the asserted claim.
The facts are not in dispute. Plaintiff is in the business of installing and repairing steam boilers. Defendant issued its "Manufacturers' and Contractors' Liability Policy" covering plaintiff, insofar as it is relative here, for injury to or destruction of property caused by accident and arising out of the hazards defined in the policy (Coverage B). The policy was in effect at the time of the accident about to be described.
In June 1953 plaintiff entered into a written agreement with W.R. Realty Corp. to replace all of the tubes in two heat exchange units located at the latter's office building in New York City. The units, each weighing ten tons, were connected to the boiler in the basement. Plaintiff undertook to clean and scale the inside of the unit shells and heads, to see that the pipelines to the units were "solid" and, after
the new tubes were installed and tested, to close the units and put them on the line ready for operation. The Realty Company had its maintenance engineer, Petroff, who was in charge of the boiler room and building, erect scaffolds around the units in order to check their condition and make recommendations as to what work had to be done. Petroff also had his men dismantle the units before plaintiff's crew came on the job. During the course of the work Petroff would come down to the basement at least twice a day to inspect and check whether tubes of the specified gauge were being used, and to see how the work was progressing generally. He did not, however, tell plaintiff's men when or how to do their work.
The retubing of the heat exchange units having been completed, plaintiff's employees on August 17, 1953 ran a hydrostatic test to determine if the job had been done in good, workmanlike manner. Instead of running the water through the tubes, the men by mistake ran it through the outer shell of the units. The shells could not withstand the water pressure and one of them cracked open from end to end. Plaintiff had to make good the damage, at a cost of $3,580. Defendant refused reimbursement under the policy because of the language of the exclusion clause.
It should be noted that at no time during the course of the work did plaintiff's men move the heat exchange unit or put it into operation.
We proceed to a consideration of the policy itself. The first page, devoted to "Declarations," has plaintiff's name and address typed in, but the space devoted to "Location of premises" was not filled in. The reason for this is fairly obvious; the parties undoubtedly understood that plaintiff would be doing boiler work at different locations during the life of the policy. Property damage liability was written for only one of the five listed hazards, "1. Premises -- Operations." Under the fifth item of the "Declarations," dealing with "Purposes of Use," appears "1. Premises -- Operations: Boiler Installation or Repair -- steam -- including construction or repair of foundations."
The "Definition of Hazards" appearing on the second page of the policy defines "Premises -- Operations" as "The ownership, maintenance or use of the premises, and all operations during the policy period which are necessary or incidental thereto" The "Exclusions" section provides that the policy was not to apply:
"(g) under Coverage B [Property Damage Liability], to injury to or destruction of property owned, rented, occupied or used by the insured, and with respect to divisions 1 [Premises -- Operations], * * * of property in the care, custody or control of the insured."
It is defendant's contention that the damage for which plaintiff seeks reimbursement occurred to property "used" by the insured, or ...