Trustees of St. Clara Female Academy of Sinsinawa Mound v. Northwestern National Insurance Co.

73 N.W. 767, 98 Wis. 257, 1898 Wisc. LEXIS 109

• Court: Wisconsin Supreme Court
• Decided: January 11, 1898
• Status: Published

Opinion

Maksiiall, J.

The questions presented on these appeals are: (1) Were the policies void because of a breach of the condition in respect to the title of the assured being sole and unconditional? (2) If the condition in that regard was waived, did the policies cover the entire building, or only the interest of the plaintiffs? (3) What is the amount for which the defendants were liable under the policies ? (4) Has such amount been diminished by the completion of the building by the contractor under his obligation so to do? (5) Hid the court err in not limiting the attorney’s fees taxed and included in each judgment to $20? These questions will be considered in their order,

1. RTo question is raised but that H. B. Hobbins, who took the application for the insurance, received the premiums, and delivered the policies, was the agent of defendants within the meaning of sec. 1977, R. S., and competent at the time the policies were delivered to waive the condition therein in respect to title, notwithstanding the clause prohibiting any waiver of the conditions or provisions of the policies except in writing thereon or attached thereto. The law in that regard is firmly established, and nowhere more so than by the decisions of this court. Renier v. Dwelling House Ins. Co. Wis. 89; Goss v. Agricultural Ins. Co. 92 Wis. 233; Carey v. German Am. Ins. Co. 84 Wis. 80; Dowling m. Lancashire Ins. Co. 92 Wis. 63. Such decisions, and numerous others, are to the effect that if the agent delivers a policy of insurance and receives the premium, with knowledge that the title to the property insured is other than sole and unconditional, it is in effect the act of the company and constitutes an effectual waiver of the conditions in that regard. Such cases rule this, as there is no reasonable controversy but that Hobbins knew substantially all the facts in regard to the interest of the contractor, McAlpine, in the building, which is the only interest claimed to have existed in breach of the condition under consideration. True, there is no direct evidence that Hobbins knew the exact terms of the building contract, but he knew that the construction of the building was going on under contract with McAlpine, and advised plaintiffs to insure it to the full amount of $15,000, because, as he said, he did not know McAlpine. There is no reasonable explanation of this other than that the agent assumed that the contract was entire, but that, in his judgment, plaintiffs should insure the building in their own names for all it would carry, for their protection, independent of the liability, of the contractor, “ because he (Hobbins) did not know him.” That shows, if it shows anything, that the agent knew that the contractor had a builder’s interest in the structure, and that his opinion in that regard would not have been more definite if he had seen and read the contract. The trial court was right in considering such facts established conclusively by the evidence, and holding the policies binding on defendants, freed from the condition in respect to the title.

2. The question of whether the whole building was insured, or only the interest of plaintiffs, is practically answered by what has preceded. The claim that the intention was to insure only that part of the building which had been accepted, that is, the foundation, is without any evidence or a single circumstance in the case to support it, except the testimony of the agent Hobbins that he was not requested, and did not intend, to insure the builder’s interest. ’That, was his conclusion, which counts for nothing in the case as against what was actually said and done.' He testified that the plaintiffs applied for $20,000 of insurance; that he influenced them to make it $25,000; that he inquired who the contractor was, and on being informed in that regard said he did not know him and would advise plaintiffs to insure the building then; that his language was: “ I told them I would bind that amount of insurance on the building in the condition it then was;” that thereupon the whole matter was.left to him, and he placed the $15,000 of insurance and agreed to place $10,000 additional when the building was nearer completion. In view of that evidence, the fact stands out prominently and beyond reasonable dispute that Hob-bins and plaintiffs intended to insure the entire building at a valuation of $15,000 as it stood when the policies were issued.

8. On the question of whether the building was wholly destroyed, the evidence appears to be quite as conclusive as on the other questions discussed. It was practically annihilated down to the foundation, and that was so injured that about half of the original cost was required to put it in shape for use again. A considerable portion of it had to be removed down to the footing stones, and the balance required extensive repairs. As a matter of law that was a total destruction of the building within the meaning of sec. 1943, R. S., which provides that when real property, covered by insurance, “ shall be wholly destroyed, . . . the amount of the insurance 'written in such policy shall be taken conclusively to be the true value of the property when insured, and the true amount of loss and measure of damages when destroyed.” That statute has been several times construed heretofore, and most recently in Lindner v. St. Paul F. & M. Ins. Co. 93 Wis. 526, where it was- hele], in effect, that total loss under the statute does-not mean that the material of which the building is composed shall be annihilated or reduced to a shapeless mass; .that when the identity of the structure as a building is destroyed, so that its specific character as such no ldnger remains and there is nothing left but-the cellar walls and a dilapidated foundation, the loss is total within the meaning of the statute. There are many authorities elsewhere to the same effect, and it is so laid down by ■standard text writers.

In May, Ins. § 421a, it is said that ‘ total loss exists when the building has lost its identity as such, so that it cannot be designated as a building, though some part of it may yet ■be standing.'" In Hamburg-Bremen F. Ins. Co. v. Garlington, 66 Tex. 103, it was said, in effect, that total loss does not mean an absolute extinction of the building; that the test is whether the building has lost its identity and specific character, so that it can be no longer called a building. To the same effect are Williams v. Hartford Ins. Oo. 54 Cal. 450, Beach, Ins. § 1291, and Wood, Fire Ins. § 107. In Oshkosh Packing & Provision Co. v. Mercantile Ins. Co. 31 Fed. Rep. 200, the term “ wholly destroyed,” as used in our statute, was considered and construed as not meaning more than such destruction of the building as that, though some part .still remains standing, it cannot be longer designated' as a building. Evidently, from the report of the case, some part ■of the building covered by the policy under consideration -was left standing after the fire; yet, as there was no controversy but that such part was not sufficient to constitute, in any sense, a building, the court held as a matter of law that such building was wholly destroyed and the loss total.

There are authorities to the effect that if there is any part of the building left, worth more in place than the cost of removing it, the destruction is not complete within the meaning of valued policy statutes. In Ostrander’s work on Eire Insurance [2d ed., § 310] and in an article on the subject found in 33 Cent. L. J. 319, written by a prominent member of the bar of this' court, it is contended that such is the correct construction of our statute, and that this court has impliedly, if not directly, so held, and referred the words “ totally destroyed ” to the value of the thing insured instead of the thing itself. It is not considered that there is any legitimate warrant for such view in anything said by the court in its published opinions. In Harriman v. Queen Ins. Co. 49 Wis. 71, where the building was destroyed down to the foundation, and that was injured so as not to be in a suitable condition for use in a new building, the court said, the destruction, within the meaning of the statute, was ■total, but declined to lay down any rule applicable to other cases, and did not place the decision on the theory that the destruction contemplated by the statute was solely that of value. In Seyk v. Hillers' Nat. Ins. Co. 74 Wis. 67, while it was stated that there was no part of the building left standing, of any value, the decision that the destruction was ;total was placed .on the ground that the identity of the thing insured was so far annihilated that it no longer existed as a building. The authority referred to and approved was Wood, Fire Ins., supra, to which one of the cases cited is Harriman w. Queen Ins. Co., supra. The text writer says: “ Loss is total within the meaning of the term when the identity and specific character of the thing insured is destroyed, although there is not an absolute extinction of the parts.” As best illustrating the rule, Judah v. Randal, 2 Caines, Cas. 324, is cited, where the property insured was a carriage. It was all destroyed but the wheels. The court held that the destruction was complete as applied to the specific thing insured,' the carriage. That, was followed in Lindner v. St. Paul F. & M. Ins. Co. 93 Wis. 526, as the settled doctrine of this court. Our statute deals with the specific thing,-insured, not solely the value. Its purpose was not only to prevent frauds by overinsurance, but to remove the temptation, on the part of insurance companies, to demand and secure settlements for losses for less than the amounts called for by the contracts of insurance, where the structures insured have been, as such, substantially destroyed. To hold that, notwithstanding the statute, salvage can be claimed for' any value left after a fire, even down to the footing stones of foundation walls, would be contrary to the uniform holding of this court on the subject, and of courts elsewhere under similar statutes, and would render the statute ineffectual to accomplish what it was designed to accomplish.

It follows from the foregoing that the evidence in this case establishes conclusively a case of total destruction of the building within the meaning of our statute; hence that the amount named in the policies of insurance correctly measured the plaintiffs’ damages at the time of the fire.

4. But it is said the policies of insurance 'were contracts of indemnity, and as the builder, McAlpine, -was bound to reconstruct the building after the fire, and did so, plaintiffs were fully indemnified except as to the ¡foundation, which was accepted before the policies were issued, and cannot recover in excess of the loss for which indemnity has not been received. The weakness of this contention is threefold:

(a) The mere fact that the building was restored by the contractor does not show that such restoration was pursuant to the obligation of the building contract, independent of any claim for indemnity by the contractor against the plaintiffs on acoount of the insurance clause in such contract, and the insurance of the building by them for an amount sufficient to cover the entire title thereto, including the interest of plaintiffs and such contractor. It was as competent for the builder to waive the provision that the insurance should be in his and the owners’ names, loss payable to the parties as their interests might appear, as it was for the defendants to waive the condition of the policies against sole ■and unconditional ownership. Again, it was competent for plaintiffs to insure the whole building in their Own names by the consent of the builder, notwithstanding the terms of the building contract provided otherwise, and such consent could have been given expressly or by implication. So the whole question between the plaintiffs and the builder, Mc-Alpine, so far as appears from any proof in the case, is open.

(b) If the plaintiffs were indemnified by their contractor under his obligation to complete the building, and the defendants desired to rely upon that fact to reduce the damages otherwise recoverable under the policies, they should have set up such facts in the answers as a defense, and established them by evidence on the trial. No such defense appears to have been so pleaded or established, so the policies must stand unaffected by any claim for a reduction of the recovery thereon by reason of any claim that the plaintiffs have been otherwise indemnified.

(c) It being conceded that the plaintiffs had an insurable interest, and it having been decided that the condition in the policies in respect to sole and unconditional ownership was waived, and that the undisputed evidence makes a case of 'total destruction of the property insured, calling for payment of the face value of the policies as liquidated damages, that amount cannot be diminished by the fact alone that some other person, whom the plaintiffs had a right to represent, also had an interest in the building, even though such person was required by contract to reconstruct such building. It is well settled that in the absence of fraud or mistake, unless otherwise provided by the contract of insurance, if the insured has some insurable interest in the propel^ covered by such contract, the whole amount of damages to the property, not exceeding that named in the policy, is recoverable by such person if the damages thereto reach that sum, or if, by the contract itself and the law governing the subject, the face value of the policy must be taken as liquidated damages. Andes Ins. Co. v. Fish, 71 Ill. 620; Trade Ins. Co. V. Barracliff, 45 N. J. Law, 543.

5. Plaintiffs claimed the right to recover $20 attorney’s fees, under oh. 235, Laws of 1893, and $25 under the general fee bill as well, against éach defendant, and prevailed on such claim. That is assigned as error. Such chapter pro, vides that several insurance companies, interested in the same loss, may be joined as defendants; that in case of a recover}' against them, separate verdicts and judgments shall be rendered; and that there shall be included in each such judgment an attorney’s fee of $20. In a proper case for such joinder of defendants, if separate actions are brought, they may be consolidated on motion, under sec. 2792, R. S. Gross v. Milwaukee Mechanics' Ins. Co. 92 Wis. 656. When so consolidated, the provisions of the act of 1893 as to costs apply, the same as if one action had been brought against all in the first instance, as permitted by law. It is considered that such provisions are exclusive and limit the attorney’s fee to $20 against each defendant, and that the ruling of the trial court to the contrary was error.

It follows from the foregoing that each of the insurance companies is liable to the plaintiffs for the full amount mentioned in its contract of insurance, and that the trial court should have directed verdicts accordingly, at the close of the evidence, on plaintiffs’ motion therefor. Rut, in accord-anee with the established practice of this court where there is no verdict left undisturbed by the result here upon which a judgment can be rendered when the case again 'reaches the trial court, the judgments appealed from must be reversed on plaintiffs’ appeals as to damages, and on defendants’ appeals as to costs, and the cause be remanded for a new trial.

By the Gouri.— On plaintiffs’ appeals the judgments are-reversed as to damages, and on defendants’ appeals such judgments are reversed as to costs. Full costs are allowed to plaintiffs in this court on their appeals, except that only one fourth of the costs for printing their case and brief shall be taxed on each appeal. Defendants are allowed clerk’s fees on their respective appeals, but no other costs.