1 Hall 41 | The Superior Court of New York City | 1828
delivered the opinion of the court.
This was an action, upon a policy of insurance in the usual form, against loss and damage by fire.
The policy and preliminary proofs were admitted, audit was proved that the building covered by the policy was destroyed by fire, within the term for which the same was insured, and the question turned upon the amount which the assured was entitled to recover.
It appeared in evidence that the building stood upon a lot of ground in the City of New-York, which belonged to J. R. Livingston, who had leased the same to the "plaintiff fora term, which expired on the first day of September 1827, and that the lease contained a clause, entitling the lessee to a renewal upon the terms expressed therein.
The lessor, who was called as a witness, testified that the lease had not been renewed, and that the plaintiff had not given any notice of his desire to renew the same ; but he further stated, that the management of the property was under the charge of agents, and he could not say • what arrangements might have been made in relation to the renewal of the lease. The premises consisted of a cow-house or stable, which stood on the surface of the lot, without any foundation sunk or fixed in the ground, and in one end of which there was a grocery. The building was erected by the assured himself. It cost about $1100, and was at the time of its destruction by the fire worth more than the sum insured upon it. The testimony was, that as it stood upon its location at the time of the fire, the value of it was about $1009 ; but one witness for the defendants stated, that if it had been ne- ' cessary to remove it from the lot, he would not have given more than $200 for it.
Upon this testimony the question was, whether the assured was entitled to recover the whole amount of the sum insured, the
The claim is by the lessee, upon a contract for insurance against loss and damage by fire, to a building erected by him upon the leasehold premises; a total loss has happened by fire during the term for which the premises were leased ; the value of the building at the time of the loss exceeded the sum insured upon it, and the assured is therefore entitled to the full amount of the insurance towards his indemnity, unless the objection of the defendants is to prevail. The defendants object that the term was about to expire, and no notice had been given of an intention to renew the lease, that the building whs therefore to be removed, and that the value of it subject to removal is the measure of the loss, and the amount to be recovered as an indemnity.
It is certainly true, as a general rule, that the policy of insurance is a contract of indemnity, and that the actual loss upon an open policy is the measure of the indemnity to which the assured is entitled. But will that rule, if applied to this case, sustain the defence 1 The plaintiff insists that this is not an open policy ; and if he is correct in that opinion, and the contract is to be deemed a valued policy, there could be no longer any question of his right to recover to the full amount of his insurance. But I cannot accede to that opinion. The cases to which we are referred for the support of it, so far from sustaining the proposition, are decisive against it, and proceed upon the basis that insurances against loss by fire are open policies upon interest, and protect the assured to the extent only of his insurance on his interest in the premises.
In the two leading cases [Lynch and another v. Dayrell, and another, 3 Bro. Parl. Ca. 497. and the Sadlers’ Com. v. Badcock and others, 2 Atk. 554.] it is held, that policies against fire are not insurances of the specific things mentioned to be insured, and which attach to the realty or pass with the same as incident
The same principles apply to marine insurances. The policy is a personal contract, and when made on the assured’s own account, the terms of it are that the assured causes himself to be insured, and makes insurance in a given sum, for a specific voyage, or term of time upon the ship or the goods on board of her, against the perils of the sea, and other enumerated risks. And the policy in this form, thus clearly resembling that of the fire policy now before us, is always understood, and held to be an open policy, and to entitle the insured in case of loss, whether total or partial, to an indemnity and recompense to the amount of his actual loss by the perils from which the contract professes to protect him. There may be insurable interests, such as profits in the case of Mumford v. Hallet, [1 Johns. Rep. 433.] for example, which must of necessity be regarded as valued at the amount insured upon them.. And in such cases the policy must
This policy contains no such agreement or valuation, and has no feature of a valued policy. The assured cannot recover any greater satisfaction for his loss than the actual value of the building which was destroyed by the fire at the time of its destruction. But his contract would entitle him to recover the full value of that building at the time of the loss, if the full amount was covered by the policy. And if the actual value exceeds the sum insured, he will of course be entitled to the whole amount of the insurance towards his indemnity. This general proposition, as applicable to open policies, is admitted by bdth parties. They differ upon the rule, or principle of valuation; the insured insisting upon the full intrinsic value of the building as the standard, but the company contending for the relative value of it to the owner, subject to removal from its location at the time of the fire, as the just measure of the indemnity to which he is entitled.
The judge ruled that the intrinsic value of the building at the time was the true measure of the loss within the meaning of the contract of indemnity, and we concur with him in that opinion. The actual value of the premises insured is the standard which the policy obviously contemplated for settling the loss, and adjusting the indemnity. .The agreement is to make good the loss or damage to the property by the fire, and the estimate of that
But it is said that the policy is a contract of indemnity, and that the principle of indemnity which pervades the insurance must controul the construction of the policy; aúd upon that principle it is insisted, that the value of the property to the assured at the time of the loss, circumstanced as it may then be, in reference to his use and enjoyment of it, is the loss he sustains by the destruction of it, and must he the measure of his indemnity for the loss. It will at once be seen, that if this principle of indemnity is to be admitted, the extent and value of the recovery will in every case vary with the special and peculiar circumstances of the insured, and the local advantages or disadvantages of the building, and the uses to which it is applied; and the intrinsic value of the building, will form no criterion of the loss of the proprietor in case of its destruction. A building, for example, which the necessities of the owner compel him to offer at public sale, for ready money, will be worth to him no more than what it will produce at such a sale, and a building for which there happens to be great competition, will command a much larger price than its true value. Are these incidental and collateral circumstances to enter into the estimate of value under the contract of insurance, and give the rulé of indemnity to the proprietor for the loss of the building 1 Two houses, of equal value may, from their local situation, be very unequal in the revenues they produce to the proprietors; would the loss of them, if destroyed by fire, entitle the proprietors to different indemnities in proportion to the rents, or revenues of the tenants % Would the insurers be compelled to pay double the amount of the cost of the profitable stand, because the location of the tenement made it of that value to the owner, and yet be compellable to pay for the
The obligation of the contract, then, is to pay the insured the actual value of the tenement as a building, or a proportion of its value, equal to the sum insured upon it in case of the destruction of it by fire within the term for which the policy protects it, for his indemnity for his loss. The policy in terms, refers to the true and actual value of the property at the time of the loss, and makes that value the standard by which to estimate the loss or damage which the insurer is hound to satisfy, and the insured is entitled to claim. This agreement cannot be otherwise understood than as binding the parties to the intrinsic value of the property at the time of its destruction, as the rule by which the indemnity is to be measured, without reference or regard to any special and adventitious circumstances which may enhance or diminish the relative value or importance of it to the insured. It is the true and actual value of the tenement itself at the time, independently of its location, or the insecurity of the title, or ■ terms by which it is held that the insurers agree to make good to the present proprietor in case the loss or damage by fire happens during the continuance of his ownership, and within the term of the insurance. It is of no importance, whether the tenement stands upon freehold, or upon leasehold ground, or whether the lease is about expiring, or has the full time to run when the fire occurs, or whether it is renewable or not. The condition of the policy is satisfied if the title and ownership are in the insured at the time of the insurance, and at the time of the loss, and the measure of his indemnity is the atnount of his interest in the tenement when destroyed by the fire, notwithstanding that the whole interest would have expired the very next day, of soon after the
In another view of it, the rule contended for by the insurers would he unequal and' unjust in its operation. The insured pays the premium upon the whole sum, and he insures for the entire
These views of the practical results of a speculative calculation of damages on the principles for which the defendants contend, present to us powerful considerations for preferring the true and actual value of the building as the standard of indemnity.
The intrinsic value of the tenement, as a building at the time of the loss, is not a matter of mere Estimate, but is susceptible of proof. The 9th condition attached to the policy prescribes the form and substance of the proofs required of the claimant to entitle 'him to payment, and the true and actual value of the property at the time of the fire, is the rule by which the amount-of the loss or damage is to be estimated and settled. The rule is uniform and rational; it is in accordance with the letter and spirit of the contract, and administers equal justice to the parties. It was in my judgment rightly applied to this case, and accordingly the motion for a new trial must be denied.
[C. Graham, atty for plff. J. Anthon, atty for defts.]