American Cent. Ins. Co. v. Antram

• Decision Date: 12 June 1905
• Citation: 38 So. 626,86 Miss. 224
• Court: Mississippi Supreme Court
• Parties: AMERICAN CENTRAL INSURANCE COMPANY v. LEVIN ANTRAM ET AL

38 So. 626

86 Miss. 224

AMERICAN CENTRAL INSURANCE COMPANY v. LEVIN ANTRAM ET AL

Supreme Court of Mississippi

June 12, 1905

FROM the circuit court of Yazoo county, HON. DAVID M. MILLER Judge.

Antram and others, appellees, were plaintiffs in the court below the insurance company, appellant, was defendant there. From a judgment in plaintiffs' favor the defendant appealed to the supreme court.

The school trustees of the town of Flora, Mississippi, owned a school building, and contracted with appellee, Antram, to make some alterations and repairs thereon, for which they agreed to pay him $ 1,232. On February 18, 1904, while Antram was engaged in doing this work, he took out a builder's risk insurance policy with the appellant company for $ 1,800 for which he agreed to pay a premium of $ 5.40. The contract was to continue in force for thirty days. On March 2, 1904 the school building was destroyed by fire, of which the insurance company was at once notified. On the 12th of April 1904, Antram assigned in writing, to the trustees of the school an undivided four-ninths interest in the insurance policy, and on the 14th day of April proof of loss was made, and soon thereafter appellant sent its adjuster to Flora, who offered to pay the full amount of the contract price to Antram--to wit, $ 1,232--which was refused. Antram and the school trustees jointly brought this suit on the policy to recover the full amount of the policy, $ 1,800. Defendant pleaded the general issue, and other pleas setting up false and fraudulent representations made by plaintiff, Antram, to procure the policy.

Reversed and remanded.

Williamson & Wells, for appellant.

Does the valued policy law of the state control a policy issued upon a builder's risk, so that an insurer shall not be permitted to deny that the property insured was worth, at the time of issuing the policy, the full value upon which the insurance was calculated? And in case of total loss, is the measure of damages to be the amount for which the property was insured, or is not a "builder's risk" strictly a contract of indemnity under which the assured can recover "only the actual value of the property at the time of the loss?" Would not a builder's risk, such as the policy involved in this case covers, fall, by analogy, in that class of personal property where there is constantly a change in specifics, quantity, and value in the usual course of the construction of a building, if not "in the usual course of trade?"

What is insured by a policy upon a builder's risk? It is not the finished building, as in an ordinary policy, where the value of the building can be known and fixed by the parties at the time of issuing the policy. A builder's risk in the majority of instances is taken out when there is a vacant lot with no building on it. at all. The policy covers the interest of the contractor in the building to be built, and insures against loss to the contractor, by fire, for the material furnished, the labor performed, and the profits in the contract.

Suppose the contract price for the building when complete is $ 5,000, and a policy is taken out by the builder to protect himself against loss by fire during the construction, the contract stipulating that the company "insures against direct loss or damage by fire, to an amount not to exceed $ 5,000, on a house, including building materials therein or on adjacent premises, now in course of construction," and the builder puts upon the premises $ 500 worth of material and begins work--a fire occurs and destroys totally all the material on the ground. Surely the measure of damages in that case would not be $ 5,000. Could the damage in that case be possibly more than the $ 500 of materials destroyed, the cost of the labor expended upon it increased, possibly, by the profits the contractor might have. realized on that amount of material and labor under his contract? Such a case does not fall within the purview or meaning of the statute; it does not come within the intent or purpose of the legislature when it declared in sec. 33, ch. 59, Acts 1902, "No insurance company shall knowingly issue any fire insurance policy upon property within this state for an amount which, together with any existing insurance thereon, exceeds. the fair value of the property; . . . but in suits brought upon policies of insurance against loss by fire the insurer shall not be permitted to deny that the property insured was worth at the time of issuing the policy the full value upon which the insurance was calculated." "In case of total loss of the property insured, the measure of damages shall be the amount for which the property was insured."

Here the legislature is dealing with property, real and personal in existence at the time the contract is made, with its full value fixed and that may be estimated and...