Foley v. Mfrs' & Builders' Fire Ins. Co. of New York

• Decision Date: 02 March 1897
• Citation: 46 N.E. 318,152 N.Y. 131
• Parties: FOLEY et al. v. MANUFACTURERS' & BUILDERS' FIRE INS. CO. OF NEW YORK.
• Court: New York Court of Appeals Court of Appeals

152 N.Y. 131

46 N.E. 318

FOLEY et al.

v.MANUFACTURERS' & BUILDERS' FIRE INS. CO. OF NEW YORK.

Court of Appeals of New York.

March 2, 1897.

Appeal from supreme court, general term, Fourth department.

Action by Edward H. Foley and others against the Manufacturers' & Builders' Fire Insurance Company of New York. Judgment for plaintiffs, and defendant appeals. Affirmed.

Frank Hiscock, for appellant.

W. P. Goodelle, for respondents.

ANDREWS, C. J.

The sole question in this case is whether the plaintiffs had an insurable interest equal to the full value of the incomplete buildings in course of construction on their lot when the fire occurred. It is the contention on the part of the defendant that as the houses were being constructed under a contract by which the contractors were to furnish the materials and build the houses (above the foundations), and to complete them by a time specified, which had not expired at the time of the fire, for a specified sum to be paid within 10 days after their completion, the plaintiffs had no interest to protect in the structures while in their incomplete state, since their destruction by fire would be the loss of the contractors, and not of the owners, whose obligation to build and complete the houses, as the condition of payment, would continue after as before the fire. It may be admitted that the contractors would remain bound by the contract, notwithstanding the destruction of the buildings by fire, and that the owners would not be bound to pay for the work done or materials supplied up to the time of the fire. Tompkins v. Dudley, 25 N. Y. 272. The contention of the defendant rests upon a misconception of the insurer's contract, and as to the insurable interest of the plaintiffs in the structures. The defendant, by its contract, undertook to insure the plaintiffs against loss by fire, not exceeding the sum specified, to the ‘described property,’ the loss or damage to be ascertained ‘according to the actual cash value’ of the property at the time of the fire. The parties by this contract made the value of the property insured, within the limit, the measure of the insurer's liability. It is an undoubted principle in fire insurance that there must be an insurable interest in the insured, or an insurable interest which he represents in the subject of insurance, existing at the time of the happening of the event insured against, to enable him to maintain an action on a fire policy. This flows from the nature of the contract of fire insurance, which is a contract of indemnity; and, where there is no interest, there is no room for indemnity. The plaintiffs had an interest in the subject of insurance, both at the inception of the contract and at the time of the fire. They owned the land upon which the structures were being erected. They themselves had constructed the foundations of the buildings, and, in describing the property...