92 Mich. 594 | Mich. | 1892
The plaintiffs in 1891 were partners, engaged in the manufacture and sale of lumber at Crooked Lake, Mecosta county. On July 8 of that year they owned and had piled on their yards over 15,000,000 feet of lumber, pickets, lath, and shingles, of the value of $176,000 and upwards. They were insured in several insurance companies to the amount of $133,500. The policies were all concurrent. The policy in the defendant company was for the sum of $2,000. On the above date this entire lot of lumber, pickets, lath, and shingles was destroyed
Bach policy is what is known as a “Michigan Standard ” policy. The clauses of the policy necessary to a •consideration of the questions raised are as follows:
“Four-fifths clause. It is part of the consideration of this policy, and the basis upon which the rate of premium is fixed, that the assured shall maintain insurance on the property hereby insured by this policy, to the extent of four-fifths of the actual cash value thereof, and that, failing so to do, the assured shall be a co-insurer to the extent of such deficit, and in that event shall bear his, her, •or their proportion of any loss. It is, however, mutually understood and agreed that, in case the total insurance shall exceed four-fifths of the whole actual cash value of the property insured by this policy, the assured shall not recover from .this company more than his pro rata share of four-fifths of the whole actual cash value of such property.”
“This company shall not be liable' beyond the actual cash value of the property at the time any loss or damage occurs, and the loss or damage shall be ascertained or estimated according to such actual cash value, with proper deduction for depreciation, however caused, and*596 shall in no event exceed what it would then cost the insured to repair or replace the same with material of like kind and quality. Said ascertainment or estimate shall he made by the insured and this company, or, if they differ, then by appraisers, as hereinafter provided; and the amount of loss or damage having been thus determined, the sum for which this company is liable pursuant to this policy shall be payable sixty days after due notice, ascertainment, estimate, and satisfactory proof of the loss have been received by this company in accordance with the terms of this policy. It shall be optional, however, with this company to take all or any part of the articles at such ascertained or appraised value, and also to repair, rebuild, or replace the property lost or damaged with other of like kind and quality, within a reasonable time on giving notice, within thirty days after the receipt of the proof herein required, of its intention so to do, but there can be no abandonment to this company of the property described.”
It appeared upon the trial that the plaintiffs had manufactured the lumber destroyed at their own mill, which was situated at the yards where the lumber was piled, and that they continued to operate their mill after the fire occurred; also that they were the owners of a large quantity of pine timber standing and growing upon lands, from which could be taken a sufficient quantity of like kind and quality to replace that destroyed by the fire. It was also shown by the defendant upon the trial what the value of this pine timber standing and growing was at the time the fire occurred, and what it would cost to cut, haul, manufacture, and pile on the yards, lumber, etc., of like kind and quality, to the amount of that destroyed. The plaintiff’s testimony showed that the average value per M. feet of lumber destroyed, including lath, pickets, and shingles, was $10.64. Defendant’s counsel contended in the court below that, by the terms of the policy above set forth, the plaintiffs being the owners of this standing pine, and operating a mill at which the same could be manufactured into lumber by
Defendant’s counsel claim that the Michigan standard policies provide a particular mode of ascertaining the damages in each particular instance, and that in this case the company contracted to pro rata indemnify the plaintiffs in accordance with their own particular surroundings; that is, that the plaintiffs having the timber to cut from, and the mill to cut it with, the loss-damage would be only such as it would actually cost the, plaintiffs to replace the burned lumber by cutting from their own land by their own mill, and that these facts have a bearing upon the construction of the contract. It is conceded that if the plaintiffs had no timber to cut from, and no mill to cut it with, then the only way in which the loss-damage could be ascertained would be the market value at the time of the fire.
Counsel for defendant have in their brief entered into a very learned discussion of the terms of the policy to show that the word “then,” used in the clause, “and shall in no event exceed what it would then cost the insured to repair or replace the same with material of like kind and quality,” should not be read as calling for an immediate reproduction of the lumb.er burned, as it would not be possible, even by purchase in open market, in the State of Michigan, to replace it, and that such a contingency was not in the minds of the parties at the time
Counsel for defendant, referring to the case of Chippewa Lumber Co. v. Phenix Ins. Co., 80 Mich. 116, also contend that the opinion of the Court in that case seems to regard “replacing” and “ reproducing ” as synonymous words. In that ease the policy expressly provided that “the measure of damage shall in no case exceed the actual cost of producing the same.” It was held that the measure of damages fixed by the parties was not to exceed the actual cost of producing the lumber destroyed. It was said:
“ If plaintiff bought the logs, the measure of damages would be the price paid, with interest from date of purchase, and cost of manufacture and storing. If it purchased the stumpage, the measure would be the price of the stumpage, with interest and the other costs added. If it owned the lands from which the logs were cut, the measure would be the fair value of the stumpage, with the other costs added, and interest.”
The case was decided upon the language of that contract, and the cost of producing the lumber destroyed held to be the measure of damages. The contract of insurance in that case entirely excluded the idea of indemnity for profits in case of loss, and the true measure was fixed by the contract at the cost of producing.
That contract is not 'synonymous with the terms employed in the present policy; that is, “ what it would then cost the insured to replace it with like kind and quality.” We think the word “then” is significant, and
We are; 'un,abl’e to agree with the learned counsel for the defendant that the contract is to be construed any differently in this case than though the plaintiffs, had no stumpage, of their own, and no mill by which they could:,,-'tíiahufacture lumber. It means that the-plaintiffs had; the right, on the date of the fire, to recover fi-omothe defendant such an amount of money as. it would c.ost-them - to replace the lumber, or, in other-words, the market value of the lumber at the date of; the fire-... It’.cannot* be said that, because the lumber-was so great in arpount, it would have no market value, or that such a -large amount could not have been purchased i-n-open--rrtarket. It is like any other commodity of which constant- sales are being made. If it had been flour, it is not contended that, because the insured may
It cannot be said that it was in the contemplation of the parties, at the time the contract was entered into, ■that it was to have the construction now contended for by counsel for the defendant. Suppose plaintiffs had sold their timber and removed their mill before the fire, which they would have had the right to do. The contingenc}r would then have arisen where they could not have reproduced the lumber. It would then be conceded that the measure of loss-damage would be the cost of replacing it by purchase in the open market. If the contract bore the construction contended for at its execution, under the circumstances above supposed, it would be changed by the change in the situation and surroundings of the insured. It would be construed in one way at its inception, and by a change of circumstances be susce¡3tible of another construction at the time of the fire.
It certainly was not the intent of the Legislature, by Act No. 149, Laws of 1881, to provide the means by which such a policy as that contended for by defendant's counsel could be adopted into this State as a standard. The act itself provides that it shall be such a policy as shall
The court below was not in error in directing verdict and judgment for the plaintiffs for the full amount of the policy.
Judgment must be affirmed, with costs.