Merrett v. Farmers' Insurance

42 Iowa 11

• Court: Supreme Court of Iowa
• Decided: December 13, 1875
• Status: Published

Opinion

Beck, J.

-f-The policy of insurance upon which suit is brought is against loss, by fire and covers a dwelling and barn, and certain enumerated articles of personal property. The dwelling and a part of the personal property were destroyed by fire, and, to recover the loss, this action is brought. The first qutestion presented in the case is this: Was plaintiff's interest in the house burned, insurable?

The house was occupied by plaintiff and his wife as a homestead. It was built by the wife upon land in which she held a life estate and was occupied by her as a dwelling. Subsequently she married plaintiff, and thereafter the house was occupied by them and their family. The title, then, of the real property is in the wife, her interest therein was a life estate, and it was occupied by plaintiff and wife as a homestead. It may be stated, besides these facts, that plaintiff made certain additions and improvements to the house. The policy was issued upon the application of plaintiff and in his name.

1.INSURANCE insurance: interest. I. What is an insurable interest? An interest, to be insurable, does not depend upon title or ownership of the property; it may be a special or limited interest, disconnected from title, lien or possession. If the holder of an interest in property will suffer loss by its destruction he may indemnify himself therefrom by a contract of insurance.

The-interest must be of such a character that the destruction of the property will have a direct effect upon it, not a remote or consequential effect. If, by the loss, the holder of the interest is deprived of the possession, enjoyment or profits of the property, or of a security or lien resting thereon, or other certain benefits growing out of, or depending upon it, he holds an insurable interest. 1 Phillips on Insurance, § § 175, 342, 346; Flanders on Insurance, p. 342; Warren et al. v. The Davenport Fire Ins. Co., 31 Iowa, 464.

2---• —r: wile. II. The plaintiff held a homestead interest in the property, and was entitled to occupy it independent of the will of his wife. This right could only be terminated by her death. Whatever benefits flowed from such occupation, he enjoyed on account of his interest in the property, and he could not be deprived of them except by his own act. Code §§ 1988, 2215. The destruction of the house deprived’ him of these benefits growing out of his interest in the property. His interest'then is clearly within the definition of an insurable interest above stated.

3.-: —: recovery. III. It is insisted that the amount of the judgment is excessive; it is the sum insured upon the property, not exceeding two-thi rds of its value. The judgment, it is. claimed, should have been for the value of plaintiff’s interest. It has been held in like cases that the right of recovery extends “to the'amount of damages to the property not exceeding the sum insured, without regard to the value of the assured’s interest in the property.” Franklin Ins. Co. v. Drake, 2 B. Mon., 47; Strong v. Manufacturers’ Ins. Co., 10 Pick., 40; Insurance Co. v. Chase, 5 Wal., 509.

IT. This question, it seems to us, is determined by the language of the policy which binds the defendant to pay “ the amount of the loss or' damage, to be estimated according to the actual cash value of the property at the time of the loss,” and to make good the loss or damage of assured, not exceeding in amount the sum insured. The loss or damage'is determined by the contract, which provides that it shall be estimated upon the value of the property, not upon the value of insured’s interest, to the extent of the sum insured.

4._._mortgage. The value of the property insured and the sum insured thereon mark out the limits of recovery in all actions upon policies. If the policy holder- has an insurable interest, no inquiry is made as to the value of that interest. All insurable interests, of those who may be called owners of property, are regarded alike by the law which will not permit an inquiry into values to limit the obligation of the underwriter. The rule may be different in the case of mortgagees or lien holders.

Y. It is difficult to see how a sum less than the value of the property would compensate plaintiff for the loss sustained. The house was occupied as a homestead. Its destruction deprived him of the benefits which were derived from the possession of a homestead of that value. lie ought to recover as compensation the sum that will enable him to regain the benefits he lost, to the extent they were covered by the insurance. Nothing less than an estimate based upon the value of the house will do this.

YI. The court, against defendant’s objection, permitted plaintiff to prove that the policy was issued at the request of his wife. It is now insisted that this was error. It is not necessary that we should pass upon the question. If the evidence had been excluded, the finding of the court could not have been different, and a judgment for defendant upon the other evidence would have been set aside as in conflict with the proof. No prejudice was, therefore, wrought defendant by the admission of the evidence, should it be held incompetent. The foregoing dsscussion disposes of all questions in the case.

Affirmed,