Daeris, Inc. v. Hartford Fire Ins. Co.
| Decision Date | 30 September 1963 |
| Citation | 97 A.L.R.2d 1238,193 A.2d 886,105 N.H. 117 |
| Parties | , 97 A.L.R.2d 1238 DAERIS, INC. v. HARTFORD FIRE INSURANCE COMPANY et al. |
| Court | New Hampshire Supreme Court |
Fisher, Parsons, Moran & Temple, Robert H. Temple, Dover, for plaintiff.
Sheehan, Phinney, Bass, Green & Bergevin, Gerard O. Bergevin, Manchester, for defendants.
The first issue transferred to this court is the following: 'Does the plaintiff have an insurable interest in the improvements and betterments to said premises destroyed or damaged by said fire on March 28, 1959?'
The plaintiff was occupying the premises at that time under a lease dated October 28, 1957 providing for a term of 5 years from November 1, 1957. It contained an option for a further term of 5 years commencing November 1, 1962. This lease provided that 'The said Lessee agrees that it will not make any alterations or additions to said demised premises * * * without the consent of the Lessor * * * that the premises are leased in their present condition and all approved alterations or additions to said premises are to be made at the sole expense of the Lessee * * * that all permanent additions and alterations to said demised premises made by said Lessee shall be considered a part of the building and the property of the Lessor, subject to the terms of the lease.'
Plaintiff occupied these premises for many years prior to the fire and particularly under a 10 year lease which terminated at the start of the lease in force at the time of the fire. It is agreed that the improvements in question were made by the plaintiff over the years of its occupancy and that they all antedated the start of the last lease on November 1, 1957.
The insurance policies in force on the date of the fire, March 28, 1959, were dated at various times in the period between August 12, 1958 and March 13, 1959. Among other provisions they insured plaintiff against loss or damage by fire, in the amount of $6,000, on improvements and betterments in the building which it occupied.
The defendants maintain that prior to the commencement of the present lease all the improvements and betterments hitherto made by the plaintiff had become the absolute property of the owner of the premises and an integral part thereof without any special right remaining in the plaintiff as lessee to use them at any future date. For this reason they maintain further that plaintiff had no insurable interest in these improvements either at the time of the issuance of these policies or at the time of the loss.
It is well established law that title to the property is not essential to create an insurable interest. Stone v. Granite State Fire Insurance Co., 69 N.H. 438, 442, 45 A. 235; Clark v. Aetna Insurance Co., 87 N.H. 353, 179 A. 352; Lampesis v. Travelers Ins. Co., 101 N.H. 323, 143 A.2d 104. 'Any interest of pecuniary benefit from the existence of the property insured or of pecuniary loss from its destruction is sufficient.' Clark v. Aetna Insurance Co., supra.
By their terms the coverage provided by these policies 'Applies Only When the Insured is Not the Building Owner.' They 'cover the Insured's use interest' in 'fixtures, alterations, installations, or additions comprising a part of the described building and made at the expense of the Insured, but which are not legally subject to removal by the Insured.' There is no provision in any of the policies limiting coverage to the insured's use interest in only those improvements which were made during the period of the lease in effect when the policy was issued or when the loss occurred.
By its continued and uninterrupted use of these premises as a tenant from the time it made these improvements to the date of the loss, the plaintiff had acquired a pecuniary interest in the continuance of the use of these improvements. Their damage or destruction by fire would inflict a pecuniary loss on the plaintiff. This gave it an insurable interest in the use of these improvements which was covered by these policies, indemnifying it against loss or destruction by fire of 'the Insured's use interest in Improvements and Betterments to the building' which it occupied. Providence Lunch Co. v. Pennsylvania Fire Ins. Co., 53 R.I. 301, 166 A. 352; Harrington v. Agricultural Ins. Co., of Watertown, N. Y., 179 Minn. 510, 229 N.W. 792, 68 A.L.R. 1340; 44 C.J.S. Insurance § 189, p. 890; 3 Couch, Insurance 2d s. 24:64; 1 Richards, Insurance, s. 164, p. 609.
The second question transferred is 'If the plaintiff is found to have an insurable interest in the improvements and betterments, what is the measure of damages?'
The lease in effect at the time of the fire, March 28, 1959, provided that in case the premises or any part thereof were destroyed or damaged in whole or in part by fire, the rent or a part thereof was to be abated until the premises were restored by the lessor. The lease further provided that in the event of such destruction or damage the lessor 'at his election may terminate this Lease.' The Lessor elected to terminate the lease as a result of this fire.
The fire policies issued by the defendants to the plaintiff covering its use interest in improvements and betterments provide as follows:
'2. The word 'Lease' wherever used in this policy shall mean the lease or rental agreement * * * in effect as of the time of loss.
'3. In the event Improvements and Betterments are damaged or destroyed during the term of this policy by the perils insured against, the liability of this Company shall be determined as follows: * * *
'b) If not repaired or replaced within a reasonable time after such loss, that portion of the original cost of the damaged or destroyed Improvements and Betterments which the unexpired term of the lease at the time of the loss bears to the period (s) from the date (s) such Improvements and Betterments were made to the expiration of the lease.'
It is agreed by the parties that the coverage for this type of loss is limited under the various policies to a maximum of $6,000. It is also agreed that 'the physical value' of the improvements and betterments destroyed in this fire exceeded that value. Consequently the plaintiff argues that because such improvements are part of the realty it is entitled under the provisions of RSA 407:8 to the face amount of these policies.
RSA 407:8 read at the time of the loss (see RSA 407:11 (supp)) in part as follows: ...
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