Agoos Leather Companies v. American & Foreign Ins. Co.

• Decision Date: 09 May 1961
• Citation: 342 Mass. 603,174 N.E.2d 652
• Parties: AGOOS LEATHER COMPANIES, Inc. and Agoos Tanning Company v. AMERICAN AND FOREIGN INSURANCE COMPANY, Centennial Insurance Company, The Home Insurance Company, Maryland Casualty Company, Newfoundland-American Insurance Company, and St. Paul Mercury Insurance Company.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 652

174 N.E.2d 652

342 Mass. 603

AGOOS LEATHER COMPANIES, Inc. and Agoos Tanning Company v. AMERICAN AND FOREIGN INSURANCE COMPANY, Centennial Insurance Company, The Home Insurance Company, Maryland Casualty Company, Newfoundland-American Insurance Company, and St Paul Mercury Insurance Company.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Feb. 6, 1961.

Decided May 9, 1961.

George A. McLaughlin, Boston (A. Morris Kobrick and Francis X. Meaney, Boston, with him), for plaintiffs.

Zipporah B. Wiseman, Boston (Joseph Alter, Boston, with her), for defendants.

Before WILKINS, C. J., and SPALDING, WILLIAMS, WHITTEMORE, CUTTER and KIRK, JJ.

CUTTER, Justice.

The plaintiffs (referred to individually as Leather and Tanning) seek to recover upon six insurance policies for the loss by fire of their tanning factory buildings in Lynn. These policies insured 'Agoos Leather Companies, Inc. and/or Agoos Tanning Co.' for an aggregate face amount of $100,000 with respect to 'an idle * * * vacant and unsprinklered plant.' The plaintiffs 'decided to liquidate the business' and the plant ceased operations as a tannery about Labor Day, 1956. It burned on November 29, 1956.

The jury found for the plaintiffs in the sum of $81,410 which included interest from December 5, 1956, which the defendants contend amounted to $11,429.85, thus making the principal sum of recoverable insurance $69,980.15. The defendants present their exceptions to the trial judge's refusal to direct a verdict for them and to certain rulings upon evidence. The evidence, including the facts already set forth, is stated in its aspect most favorable to the plaintiffs.

1. The policies are standard Massachusetts fire insurance policies (see G.L. c. 175, § 99, as amended through St.1951, c. 478, § 1; see also G.L. c. 175, §§ 95, 96) and give coverage 'to the extent of the actual cash value of the property at the time of loss.' The defendants, in support of their exception to the denial of a directed verdict, argue only that the plaintiffs failed to sustain their burden of proving the amount of their loss, i. e. the value of their buildings on the day of the fire.

The evidence of value was meager and some questions were not very clearly directed to value as of the day of the fire, although they could be interpreted as referring to value on that day. The plant had an aggregate content of 1,586,103 cubic feet. The oldest building was about eighty years old and 'the most recent * * * was built in 1934.' They were 'frame and brick' or 'wooden structures with steel members, having party walls and passageways leading from one building to another. You could start at one end of the buildings and go through each one without going outside.' There were at least four buildings. Building A was a four story building and an adjacent building had at least three floors. There were also a brick boiler building and a two story building.

After operation of the plant as a tannery ceased in September, 1956, the machinery, equipment, and other personal property in the plant had been sold and was being removed. Pipe was being broken up, including the sprinkler pipe system. There had been a 'for sale' sign on the plant and '[p]eople came to see the plant from time to time.' It was last 'shown * * * to a prospective purchaser about three * * * weeks before the fire.'

One Sart testified on the issue of value. He was president of Tanning and vice-president and general superintendent of Leather, 'in charge of repairs, replacement and construction.' He 'had once owned his own tanning company and * * * [had been] involved in the purchase of a tannery by Mr. Agoos in Salem.' At or about the time of trial he was a consultant to three leather companies and a shoe company in work which 'involved the entire field of tanning, buildings, and productive equipment. He * * * [had] been engaged in the tanning business for forty * * * years. * * * From 1936 on he knew what was done to the buildings' and 'was * * * intimately familiar with' them. On Labor Day, 1956, he 'knew the condition of the plant.' It does not appear that any objection to Sart's testimony, mentioned below, was made specifically on the ground that Sart was not qualified to testify. In any event, the trial judge had ample ground for permitting Sart, a corporate officer who knew the plant and was also a tannery expert, to express an opinion as to value, even though he did not claim to be 'an expert on anything.' See Rubin v. Town of Arlington, 327 Mass. 382, 384, 99 N.E.2d 30; Winthrop Products Corporation v. Elroth Co., Inc., 331 Mass. 83, 85, 117 N.E.2d 157.

Subject to the defendants' exception, Sart testified that 'the fair cash value of these buildings on the day of the fire without equipment and without personal property' was in his opinion $250,000, including the land, but disclaimed knowing 'anything about the values of land as an expert.' He later testified that this opinion was on the basis that the plant would be 'conducted as a tanning place of business' or 'for the purpose of a tannery.' Thereafter he gave the opinion that 'the value of the buildings' was $200,000.

The defendants offered no expert testimony upon the issue of the value of the destroyed buildings. Their efforts to introduce evidence of a contract for demolition of the buildings (discussed infra) were unsuccessful.

'The words 'actual value' in the policies * * * are to be interpreted in the light of the nature of the insurance contract as a contract of indemnity. They import that recovery for loss cannot be based upon a value dependent upon fanciful considerations. * * * But the words 'actual value' do not import that recovry is limited to market value. * * * '[M]arket value does not in all cases afford a correct measure of indemnity. * * * In some cases there is no market value, propertly speaking, and in others, if there is, it plainly would not of itself afford full indemnity.' * * * [T]he so called market value of * * * buildings, based either on their market value for the purpose of removal or on the amount by which they increase the market value of the real estate as a whole, may not be a true measure of indemnity for direct loss by fire. * * * On the other hand, even where market value will not afford the indemnity for which the * * * insurance provides, the cost of replacement, less depreciation, is not conclusive as to the actual value. * * * But it is important evidence of such value to be considered with other evidence.' See Kingsley v. Spofford, 298 Mass. 469, 475-476, 11 N.E.2d 487; Gechijian v. Richmond Ins. Co., 305 Mass. 132, 141, 25 N.E.2d 191; New England Gas & Electric Ass'n v. Ocean Acc. & Guar. Corp. Ltd., 330 Mass. 640, 657-658, 116 N.E.2d 671; Pinet v. New Hampshire Fire Ins. Co., 100 N.H. 346, 348-349, 126 A.2d 262, 265, 61 A.L.R.2d 706, in which Kenison, C. J. said, 'Both fair market value and replacement cost are permissible standards for determining fire losses but they are standards and not shackles'; McAnarney v. Newark Fire Ins. Co., 247 N.Y. 176, 180-186, 159 N.E. 902, 56 A.L.R. 1149; Britven v. Occidental Ins. Co., 234 Iowa 682, 686-688, 13 N.W.2d 791; Bonbright & Katz, Valuation of Property to Measure Fire Insurance Losses, 29 Col.L.Rev. 857, 878-900; Valuation and Measure of Recovery under Fire Insurance Policies, 49 Col.L.Rev. 818-824; Couch, Insurance, § 2234; Sedgwick, Damages (9th ed.) §§ 721-722; Sutherland, Damages (4th ed.) §§ 821, 825; annotation, 61 A.L.R.2d 711, 725-733.

We do not agree with the defendants' contention that, even under the broad principles just discussed, the plaintiffs have not sustained their burden (see Heebner v. Eagle Ins. Co., 10 Gray, 131, 143; Cory v. Boylston Fire & Marine Ins. Co., 107 Mass. 140, 147; Appleman, Insurance Law & Practice, §§ 12,093, 12,233) of proving their loss with reasonable certainty. 'It is of course true that damages must be reasonably ascertainable from the evidence. * * * But the fact that there is an element of uncertainty in their assessment is not a bar to recovery. * * * 'The amount of damages seldom can be proved with the exactness of mathematical demonstration. Much must be left to estimate and judgment, sometimes upon meager evidence.'' See Dalton v. Demos Bros. Gen. Contractors, Inc., 334 Mass. 377, 378-379, 135 N.E.2d 646 (tort injury to property from a negligent blast). See also Bond Pharmacy, Inc. v. City of Cambridge, 338 Mass. 488, 491-492, 493, 156 N.E.2d 34. Unreasonable certainty and precision are not to be required in proving the amount of this fire loss for which compensated insurers (cf. Veneto v. McCloskey & Co., 333 Mass. 95, 104, 128 N.E.2d 337) were bound to provide indemnity. This is not a case in which it is doubtful whether any fire loss has occurred. Cf. Buffalo Ins. Co. v. Spach, 5 Cir., 277 F.2d 529, 530-531. The 'entire plant was demolished by fire.' Recovery 'will not be denied because * * * damages are difficult to ascertain. While the damages may not be determined by mere speculation or guess, it is enough if the evidence shows the extent of the damages as a matter of just and reasonable inference. A reasonable basis of computation and the best evidence * * * obtainable * * * which will enable the jury to arrive at an approximate estimate of the loss is sufficient.' See Vanguard Ins. Co. v. Connett, 10 Cir., 270 F.2d 868, 870-871. See also Pruitt v. Hardware Dealers Mut. Fire Ins. Co., 5 Cir., 112 F.2d 140, 142.

In Church of the Assumption of the Blessed Virgin v. Travelers Fire Ins. Co., 146 Conn. 223, 149 A.2d 906, 907, the proof went 'no further than to show that over two years before the fire the value of [a convent] building was $67,750 and that...