112 N.Y.S. 769 | N.Y. App. Div. | 1908
Lead Opinion
The plaintiff is a manufacturer of straw hats, and the defendant issued to him a policy of insurance insuring him against loss by fire to his manufactured and unmanufactured stock in the sum of $2,000.
On February 11, 1906, while such policy was in force, a fire occurred by which the "plaintiff’s factory and contents were destroyed. A portion of the property so destroyed consisted of a quantity of hats which had been finished, bargained for, cased for shipment and marked with the buyers’ names prior to the fire. The delivery and • shipment of these goods would have commenced the morning after the fire occurred and would have continued for four months following.
The stipulated facts concede that it would have required four months to reproduce the hats in the condition they were at the time of the fire, and that plaintiff’s factory could not be rebuilt in time to reproduce the goods for the coming season’s trade, and that after diligent effort the plaintiff was unable to procure any other mill to reproduce the goods and was unable to replace them by purchase in the market.
The policy was the standard form and contained the following provision with respect to ascertaining the loss: “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 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.”
It is stipulated that the actual cost of manufacture to the plaintiff of that portion of the hats for which defendant is liable was $1,841.95, and that the actual selling price at which plaintiff had made sales on which he was about to make delivery was $1,966.79.
There would be no difficulty in deciding the question and doubtless, no controversy, except for the clause of the contract providing that the loss or damage “ 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.” Without this clause the actual cash value
In Frick v. United Firemen!s Insurance Company (218 Penn. St. 409) a quantity of whisky of various age was destroyed by fire and the policy of insurance contained the same clause as that of- the policy under consideration. The question involved was whether the. measure of loss was the cost of manufacture or the cash value. Because of the fact that it was impossible to produce whisky of the precise quality and mellowness of that destroyed which condition added largely to its value, it was concluded that the only practical method of ascertaining the loss was to take the actual cash value. In its decision the court was careful to distinguish it from its former decision in Standard Sewing Machine Co. v. Royal Ins. Co. (201 Penn. St. 645), where it had limited the loss of sewing machines to the cost of manufacture, deeming the peculiar situation a controlling feature. A like peculiar situation exists under the stipulated facts
Judgment is ordered for the plaintiff in the sum of $1,966.79 with interest from the 28th day of March, 1906, with costs.
Laughlin and Scott, JJ., concurred; McLaughlin, J., dissented.
Dissenting Opinion
The contract in question was one 'of indemnity only. (13 Am. & Eng. Ency. of Law [2d ed.], 101.) Profits may be recovered only when insured' as such. (Id. 105; Niblo v. North Am. Fire Co., 3 N. Y. Super. Ct. 551; Buffalo Elevating Co. v. Prussian Nat. Ins. Co., 64 App. Div. 182, 187; affd., sub. nom. Michael v. Prussian Nat. Ins. Co., 171 N. Y. 25.) Upon the facts the plaintiff would be indemnified by the payment to him of $1,841.95 and any greater sum necessarily includes profits. He was a manufacturer and his actual loss was obviously what he had expended upon the goods destroyed and not what he would have realized had he, sold them, since his profits would be included in the selling price. (Standard Sewing Machine Co. v. Royal Ins. Co., 201 Penn. St. 645 ; Scottish Union Ins. Co. v. Keene, 85 Md. 263 ; Mumford v. Hallett, 1 Johns. 433; Harris v. Eagle Fire Co., 5 id. 368.)
It is doubtless true that “actual cash value” is frequently to be' construed as equivalent to market value, but that term is used in the policy to limit the liability of. the insurer and the provision that the loss “ 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 ” shows it was never intended by the use of such words to insure the manufacturer’s profits. The value of an article is ordinarily fixed by its market value, but in the case before us the amount which would indemnify the plaintiff is conceded and to allow him anything more is simply to allow him the profits which he would have realized had the fire not occurred.
I am, therefore, of the opinion that upon the agreed facts the plaintiff is entitled to judgment for the sum of $1,841.95, with interest from the 28th day of March, 1906.
Judgment ordered for plaintiff with costs. Settle order on notice.