Hewins v. London Assur. Corp.

• Decision Date: 16 September 1903
• Citation: 184 Mass. 177,68 N.E. 62
• Parties: HEWINS et al. v. LONDON ASSUR. CORP. et al. (twelve cases).
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

184 Mass. 177

68 N.E. 62

HEWINS et al. v. LONDON ASSUR. CORP. et al. (twelve cases).

Supreme Judicial Court of Massachusetts, Suffolk.

September 16, 1903

COUNSEL

Alfred Hemenway and Arthur M. Alger, for plaintiffs.

Saml. J. Elder, Robt. F. Herrick, and Alfred B. White, for defendants.

OPINION

HAMMOND, J.

In these 12 cases the question is whether the referees, in determining the amount of damages to which the plaintiffs were entitled, 'had the right to take into consideration the increased cost of repairing the building by reason of the building laws.' In each case the question calls for the construction of the contract of insurance. It is plain, to begin with, that the contract does not cover all the loss suffered by the insured by reason of the fire, such as interruption of business, loss of profits, or even loss of rents. Nor is the insurer bound to repair, although for obvious reasons it has the option to do so. The contract simply insures the plaintiffs 'against loss or damage by fire' to the building with its appurtenances and fixtures. It is a contract of indemnity. Ordinarily, the loss or damage by fire is the difference between the value of the building before the fire and the value of what remains after the fire, and that difference is to be regarded as the true loss covered by the policy, unless there be in the policy some language by which some element of that difference is excluded. Where the building is only partially destroyed, and the proper course is to repair, as in the cases before us, it is manifest that in estimating the value of the part remaining the cost of the necessary repairs is a very material matter; and, if the repairs must conform to certain legal requirements, the nature of those requirements is also to be considered. In considering the cost of repairs it would not be profitable to think of repairs which the law forbids, but only of those which the law does not forbid. This rule of estimating the damage to real estate by reason of some injurious change is of very general application. A familiar illustration of its application is to be found in suits for damages for land injured by the exercise of the right of eminent domain. It may happen that, after being repaired, a building is of greater value than before the fire, and in marine insurance there is a rule of quite general application by which an allowance is made to the insurer on that account; but in the present cases we have no occasion to inquire whether any such allowance should be made, because the only question raised upon the report and submitted to us is whether 'the referees had the right, in determining the amount of damages to which the plaintiffs were entitled, to take into consideration the increased cost of repairing by reason of the building laws.' If they had that right, the sum is agreed upon. It therefore becomes necessary to look into the policies, and see whether they contain anything which is inconsistent with this method of estimating the loss. With the exception of the policy issued by the Pawtucket Mutual Fire Insurance Company, which is reserved for separate consideration, they are all of the form known as the 'Massachusetts Standard,' and each contains the following provision: 'In case of any loss or damage, the company * * * shall either pay the amount for which it shall be liable, which amount, if not agreed upon, shall be ascertained by award of referees as hereinafter provided, or replace the property with other of the same kind and goodness, or it may * * * notify the insured of its intention to rebuild or repair the premises.' Three courses are open to the company. It may pay in cash, may replace the property with other of the same kind and goodness, or may make the repairs. Neither defendant has chosen to repair. It is to be noted that there has been no change in the building laws since these policies were issued, and that fact must be borne in mind in construing them. They cover not only the building, but also the 'additions, including plate glass fresco work, piping of all kinds, engines and boilers and all appurtenances to the same,' machinery, fixtures, and 'the sidewalks adjacent.' It is obvious that there were many ways in which the insured property might have been damaged by fire where there could have been lawful replacement or repair with property of the same kind and goodness. It is not to be presumed that the parties intended to contract for the doing of that which could not lawfully be done. Inasmuch as at the time the contracts were made two kinds of loss by fire might have been reasonably apprehended--one where the law would permit such repair or replacement, and the other where it would not--the clause must be regarded as intended to apply only to the first class of cases. It can have no application to the class where its application would be legally impossible. Hence it can have no bearing even as to the method in which the amount to be paid in cash should be ascertained so far as respects the second class. We find nothing else in the policies which needs to be considered on this point. The result is that there is...