282 P. 764 | Or. | 1929
IN BANK.
This is a suit to establish in favor of the plaintiffs, lessors, an interest in a sum of money, which the defendant National Fire Insurance company promised *303 to pay in the event of the destruction by fire of a building situated upon the land of the lessors; the policy of insurance was obtained by the other defendant, who is the respondent, and who is the assignee of the lessee; the building was built by the original lessee. The term of the lease extended from May 20, 1916, to April 1, 1931, and contains this provision:
"It is further understood and agreed that all buildings and other permanent improvements erected or placed upon the premises hereinbefore described shall remain thereon and shall not be removed therefrom and that at the expiration of this lease, any and all such buildings and improvements shall be and become the property of said lessors."
The land, which was vacant at the time of the renting, was upon the shores of the Rogue river, near Gold Beach. Immediately upon the execution of the lease the lessee constructed the building which became the subject-matter of the policy of fire insurance with which this suit is concerned. This structure as described by one of the plaintiff's witnesses, was "about 60 x 100 or thereabouts. It had an L on one end of it * * * I think about 30 or 40 feet"; it was one story high; its roof was covered with cedar shingles and its outer walls were made of rough boards placed vertically; the joints were covered with battens. The foundation was in part piling, the remainder was fir timbers, which rested directly upon the ground; the latter was always damp and sometimes was overflowed by the waters of the river. Prior to the fire, the roof had come into such a condition that the defendant had renailed the shingles; yet it leaked in at least two places; a part of the building had caved in, and some of the piling was swept away by the river when the aforementioned portion of the building collapsed. Due to the fact that the *304 foundation timbers rested upon the muddy river bank some of them had shifted their positions and thereby had caused the floor to get out of level as much as 18 inches. A witness testified that fir timbers, of the type used in this foundation, when resting upon damp ground, would not last more than six or seven years. The witnesses did not agree as to how long a building of this type in its location would endure; two of them testified that if necessary repairs were made from time to time it would last for 20 years longer; others estimated its life as less; but all assumed that the necessary repairs would be seasonably made. There was evidence that at the time of the trial the building was worth possibly $4,000 or $4,500. The respondent offered no evidence. It is agreed that the latter procured a policy of insurance in the aforementioned company in the sum of $6,000, which contained the following clause:
"If the above described buildings are located on ground not owned by the insured in fee simple, notice of same is hereby accepted."
The building was destroyed by fire February 20, 1927. When this event occurred the respondent declined to rebuild and denied that the plaintiffs, who are the appellants, had any interest in the insurance money. Thereupon the latter instituted this suit. The insurance company being willing to pay $4,250 to discharge its liability, but uncertain to whom the money belonged, paid that sum into the registry of the circuit court pursuant to a stipulation that its deposit should terminate its liability. While the complaint contains an allegation that the respondent is insolvent, the findings below recite that the plaintiff "has failed to establish" this allegation. The decree of the circuit court was in favor of the respondent. AFFIRMED. *305 The controlling issues are (1) whether the covenant of the lease quoted in the preceding statement required the tenant to rebuild the structure in event it was destroyed by fire; (2) whether a tenant, who procures a policy of insurance for the full value of the building and who, upon the latter's destruction, collects insurance money in an amount representing the value of the two estates in the building, may retain only such portion of it as represents the value of his estate and must account to the remainderman for the balance.
To support their argument that the clause of the lease previously mentioned required the tenant to repair and rebuild, the plaintiffs call to our attention the following authorities:Abbey v. Billups,
"In construing the covenants contained in a lease the cardinal rule is that the intention of the parties shall govern; and the courts will not extend or enlarge the obligation of the lessee beyond the plain meaning of the language used and the intention existing at the time it was made; and if there is not an express stipulation to the effect to restore buildings and other property leased, destroyed by casualties from fire or water, without fault or neglect on the part of the tenant, the loss must fall upon the landlord or reversioner."
In 36 C.J., Landlord Tenant, § 774, p. 134, the editor in reciting the rules governing the construction of the stipulations of a lease, which the landlord contends shifts upon the tenant the burden of making repairs, states: "The court should not extend or enlarge the obligation of the tenant beyond the plain meaning *307 and intention of the parties, and in order to shift on the tenant a burden which would naturally fall on the landlord, the warrant for the charge should be plainly discoverable in the lease." From 16 R.C.L., Landlord and Tenant, § 683, we quote: "* * * The tenant is not, merely by reason of the relationship, bound to make substantial and lasting repair * * * or to rebuild premises which may have become * * * accidentally dstroyed." It is generally held that a stipulation requiring the lessee to surrender the premises at the expiration of the term in as good order and condition as when received, reasonable wear and tear excepted, does not impose upon the lessee a duty to rebuild in the event of an accidental destruction, in the absence of an express covenant to repair: Tiffany Landlord and Tenant, § 118; 36 C.J., Landlord and Tenant, § 865.
To us it seems that the plaintiffs are inviting us to place a construction upon the aforementioned covenant of the lease which the latter is incapable of sustaining. We find nothing in this clause nor in the rest of the lease which requires the tenant to repair, to build, or to rebulid or to leave the premises in as good condition as when received. Our construction of this covenant is that the tenant shall not remove any buildings which it may construct and that at the termination of the lease these structures shall belong to the lessor.
In arguing that the procurement of fire insurance to the full value of the building and its collection upon the destruction of the latter is conclusive evidence that the tenant insured both estates, and that therefore he must account for the portion of the proceeds of the insurance which represents the value of the remainderman's *308
estate, the plaintiffs concede that their contention is opposed by the majority of the adjudications which have passed upon similar sets of facts. This admission upon their part is supported by the authorities: Cooley's Briefs on Insurance, 2d ed. p. 6262, and note in 35 A.L.R. 40. The various considerations, which have moved some courts to adopt the view advocated by the plaintiffs and others to favor that urged by the defendant, are ably reviewed in the majority and the dissenting opinions in the recent case of Clark v. Leverett (Ga),
The cases, which represent the minority view, do not adopt reasons which can be as clearly stated as the foregoing, and in some instances the reasons which have persuaded one court apparently do not appeal to all of the others. The following, we believe, is a fair statement of the reasons found in this group of cases: (1) public policy is violated by a policy of insurance which promises to pay to a tenant an amount equal to the value of the remainderman's estate in addition to the value of his own, and, therefore, since the law favors a construction upon contracts which will not impute to the parties bad faith, it will assume that the tenant, who obtained a policy stipulating for the payment of an amount equal to the full value of the building, secured protection not only for himself but also for the remainderman; (2) the tenant is a quasi trustee for *310 his remainderman, and, therefore, the insurance contract obtained by him is available to both; (3) the duty owed by a life tenant to exercise ordinary care in preserving the property may include a duty upon his part to insure the property; (4) the insurance money takes the place of the destroyed building, and should be used to restore it; (5) the policy of insurance runs with the land, and, therefore, protects all as their interests may appear; (6) if the amount obtained by the tenant is no more than the amount of his loss he may keep all of it, but if it is greater he must account to the remainderman for the surplus.
In this minority group is South Carolina; it has carried the idea that the life tenant is a quasi-trustee to such a length that it has impressed a trust, in favor of the remainderman, upon properties in which the tenant invested the proceeds of the insurance contract: Green v. Green,
Our prior decisions are not entirely silent upon this subject. In Strong v. Moore,
"The other fallacious contention is that they were the owners of the insurance money. They say in the complaint that the property was insured, but they do not say that it was insured for their benefit. They do not claim to have paid anything to secure the insurance and do not assert in any way that they were ever parties to any policy of insurance on the premises. As stated inNew England Loan Trust Co. v. Kenneally,
Where the relationship was that of vendor and vendee under an executory contract of sale, it has been *313
likewise held that the contract of insurance carried by the vendor is for his exclusive benefit and is not available to the vendee: Brownlee v. Board of Education,
It will be observed that we have previously committed ourselves to the proposition that insurance money, derived as a result of a contract of indemnity purchased by the optioner, is unavailable to the optionee, because "a policy of fire insurance is a personal contract with the party insured."
It seems clear to us that the contract was personal in the present suit; the tenant was not the plaintiffs' agent and was not their trustee. If the plaintiffs obtained more than fair compensation we know of no rule of law which authorizes us to give the surplus to the plaintiffs. The plaintiffs cannot find in this generous award a right whereby they may demand a part of it. They were strangers to the contract of insurance, and must now be content to remain strangers to its fruits.
The appellants also object to the cost bill filed by the defendant; we have given this matter careful consideration but find no merit in the appellants' contentions.
It follows that the conclusion below must be affirmed.
AFFIRMED.
BELT and BROWN, JJ., absent. *314