Calnon v. Fidelity-Phenix Fire Ins. Company

Decision Date30 December 1925
Docket Number23370
PartiesGEORGE E. CALNON, APPELLEE, v. FIDELITY-PHENIX FIRE INSURANCE COMPANY, APPELLANT
CourtNebraska Supreme Court

APPEAL from the district court for Hall county: BAYARD H. PAINE JUDGE. Affirmed in part, and reversed in part.

AFFIRMED IN PART, AND REVERSED IN PART.

Kennedy Holland, DeLacy & McLaughlin and J. L. Cleary, for appellant.

B. J Cunningham, Prince & Prince and A. S. Johnston, contra.

Heard before MORRISSEY, C. J., DEAN, DAY, GOOD, THOMPSON and EBERLY, JJ.

OPINION

EBERLY, J.

This is an action prosecuted by the plaintiff, Calnon, against the defendant Fidelity-Phenix Fire Insurance Company upon two policies of fire insurance aggregating $ 12,000 issued by defendant, covering an elevator building and fixtures therein owned by plaintiff. The amended petition upon which the action was tried is in usual form. The amended answer of the defendant thereto, so far as material to the consideration of this case, after admitting certain facts, alleges that the Union Pacific Railroad Company was the owner of the ground upon which said elevator building was situated, and that said elevator building was on the Union Pacific right of way, having been constructed there under provisions of a lease with said railroad company requiring the plaintiff to remove said elevator building from the premises upon the termination of the term. The defendant further contends that said elevator building, because of said facts, was personal property, and at date of its destruction was of less than $ 3,600 value; that it was alleged to be incumbered in the sum of $ 10,000 by a mortgage "without the consent of the defendant;" and that said fire which caused its destruction originated through the "act, design, procurement, and criminal fault" of the plaintiff. To this amended answer the plaintiff replied. These issues were submitted to the jury, and a verdict was returned for the plaintiff in the sum of $ 12,000. A motion was thereupon made by plaintiff that interest in the sum of $ 730.34, being interest at 7 per cent. on $ 12,000 for the period commencing 60 days after due proof of loss had been furnished by the plaintiff to the defendant, be included in said judgment, and also a motion that a reasonable attorney's fee be taxed in favor of the plaintiff. The court denied the motion for interest, and sustained the motion for the taxing of an attorney's fee which was fixed by order of the court in the sum of $ 1,200. The defendant appeals from the entry of the judgment and the allowance of the attorney's fee. The plaintiff prosecutes a cross-appeal from the denial of the claimed interest.

The verdict of the jury for the purpose of this case conclusively determined the fact that the building destroyed was not destroyed by fire which originated through the act, design, procurement, or criminal fault on the part of the plaintiff.

The fundamental question that is presented by this case is whether the subject-matter of the insurance was "real property" or "personal property." The court below tried the case on the theory that the property insured was real property. There is no dispute about the physical facts. The building was of the common, small town type of grain elevator, approximately 60 feet in height, 29 feet in width, and 33 4/10 feet in length, constructed of wood and metal, and resting upon a substantial "rock-concrete" foundation with a steel pit constructed thereunder. It was described in the insurance policies as the "electric power, shingle roof, cribbed frame elevator building, including foundations, * * * and all permanent fixtures belonging to and constituting a part of said building; * * * known as the Omaha elevator," and situated on the Union Pacific right of way 100 feet east of the Alda depot on the south side of the main-line tracks.

Section 7809, Comp. St. 1922, provides:

"Whenever any policy of insurance shall be written to insure any real property in this state against loss by fire, tornado or lightning, and the property insured shall be wholly destroyed, without criminal fault on the part of the insured or his assignee, the amount of the insurance written in such policy shall be taken conclusively to be the true value of the property insured and the true amount of loss and measure of damages."

This act is remedial in character. To ascertain and enforce the intent of the legislature is admittedly a cardinal rule in the construction of the statutes. In determining the question of legislative intent, reference may be had to the occasion and necessity of the law, and the words of the act may be interpreted in the light of the general object of the statute. In other words, in construing the provision before us, the court will give consideration to its policy, to the mischief to be remedied, and give it such an interpretation as appears best calculated to advance its objects by not effectuating the design of the legislature. Gran v. Houston, 45 Neb. 813, 64 N.W. 245; Buckmaster v. McElroy, 20 Neb. 557, 31 N.W. 76; McIntosh v. Johnson, 51 Neb. 33, 70 N.W. 522. Indeed, in the Buckmaster case, above cited, Judge Cobb cited approvingly the case of Dean and Chapter of St. Peter, York, v. Middleborough, 2 Y. & J. (Eng.) 196, to the effect that--"It is by no means unusual in construing a remedial statute to extend the enacting words beyond their natural import and effect, in order to include cases within the same mischief." Or, as stated in 36 Cyc. 1175: "Where necessary to effectuate the legislative intent, remedial statutes will be construed to include cases within the reason, although outside the letter." See, also, Traudt v. Hagerman, 27 Ind.App. 150, 60 N.E. 1011; Rural Independent School District v. New Independent School District, 120 Iowa 119, 94 N.W. 284; Gaster v. Estate of Gaster, 92 Neb. 6, 137 N.W. 900.

The statutory language which we are seeking to construe in the instant case is the term "any real property." Is its meaning (1) the thing corporeal, or (2) the estate or interest which one may have therein? The language employed in the policies in suit in express terms describe as the subject of insurance "the thing corporeal," the elevator. The defendant, however, cites 22 R.C.L. 65, sec. 40, which is as follows:

"Where a person erects buildings on leased premises under an agreement in the lease that he may remove them, or places machinery in buildings under a similar agreement, the buildings and machinery follow the term and partake of its character as a chattel real. A term for years while denominated a chattel real is not, when speaking with legal accuracy, considered real estate, but on the contrary it is personal property, whatever might be its duration in years, whether for one or twenty, or ninety-nine years."

A consideration of the above citations leads to the conclusion that the author had in mind rather the quantity and quality of the estate which is possessed in the land to the exclusion of the land itself. And it would seem that a house permanently fixed and immovable, though leased for 99 years, would be as much, if not more, within the policy of the Nebraska act than a freehold of which the same house formed a part, but which was limited for the life of the possessor, which in the natural order of things will terminate within a decade. It thus becomes necessary to determine the purpose of the words "any real property" used in the Nebraska statute in view of its remedial character and especially in view of the manifest policy therein indicated.

Were the legislators concerned only with the consideration of matters of title or of rights and interests attaching to or adhering to real estate which at common law amounted to at least an estate of freehold, or was it their intention by the term "real property" to designate something corporeal, tangible, and which might be inspected and which was the object of the senses? It is to be remembered in this connection that the act in question was called forth by methods followed by many of the insurance companies of Nebraska in carrying on their business. These methods were not apparently actuated by good faith, and practices were followed which were characterized by deception and deceit, and which resulted in the companies participating therein in securing premiums on the basis of a valuation fixed by the company itself, continued as long as possible, but which was promptly repudiated in the event of total loss. It seemed but equitable that where property was of a substantial nature, permanent, fixed, and immovable, which might be inspected and which was not subjected to sudden change in condition when insured for a consideration based upon a certain valuation, and after due inspection by the insurer, the amount which should be paid, in the event of total loss, is the amount stated in the policy. With respect to the reason for the passage of this law, Judge Sullivan of this court in the case of Lancashire Ins. Co. v. Bush, 60 Neb. 116, 82 N.W. 313, said:

"What reason existed at the time of the adoption of the valued policy law to induce the legislature to segregate insurers of real estate from other litigants and...

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