Milwaukee Mechanics' Ins. Co. v. Russell

• Decision Date: 19 November 1901
• Citation: 65 Ohio St. 230,62 N.E. 338
• Parties: MILWAUKEE MECHANICS' INS. CO. v. RUSSELL.
• Court: Ohio Supreme Court

62 N.E. 338

65 Ohio St. 230

MILWAUKEE MECHANICS' INS. CO. v. RUSSELL.

Supreme Court of Ohio.

November 19, 1901

Error to superior court of Cincinnati.

Action by Julia A. Russell against the Milwaukee Mechanics' Insurance Company. Demurrer to answer was sustained, and defendant brings error. Affirmed.

The Milwaukee Mechanics' Insurance Company, through its agency in Cincinnati, issued to Julia A. Russell, on the 12th day of August, 1896, in consideration of a cash premium then paid by her, a policy of fire insurance on her dwelling house situated in Hamilton county, in the amount of $1,750, for the term of five years ensuing. The house was totally destroyed by fire on the 10th day of September, 1898, the policy then being in force, and in due time the insured made proper proofs of the loss, and demanded payment, which having been refused, the action below was brought to recover the amount named in the policy. The averments of the petition, which are the usual and necessary ones in actions of that character were, on the hearing of the cause, admitted to be true, and the only defense relied on was that the plaintiff refused to accept an offer made by the insurance company to perform a stipulation contained in the policy which purported to give it the option to rebuild the house, and declined to furnish plans and specifications, as required by that stipulation, to enable the defendant to rebuild; the offer having been made it was alleged, in the time and manner provided by the policy. A demurrer to that defense was sustained in special term, and judgment rendered for the plaintiff for the amount of the policy and interest, with costs; and from the affirmance of that judgment in general term, error is prosecuted in this court.

Under Rev.St. § 3643 (See Gen.Code, §§ 9583, 9584), providing that in case of total loss the whole amount mentioned in a policy or renewal on which the insurer receives a premium shall be paid, refusal of the insured to furnish plans and specifications for rebuilding and to permit the insurer to build constitutes no defense to an action for the recovery of a total loss.

Syllabus by the Court

1. A condition in a policy insuring a building against loss or damage by fire, which purports to give the insurer the option to rebuild in case of total loss, is repugnant to section 3643 of the Revised Statutes, and void.

2. Refusal of the insured to furnish plans and specifications for rebuilding, and to permit the insurer to rebuild constitutes no defense to an action for the recovery of such loss.

J. Hartwell Cabell, for plaintiff in error.

A. J. Cunningham, for defendant in error.

WILLIAMS, J. (after stating the facts).

The policy in suit insured a building situated in this state against loss or damage by fire, and was issued since the enactment of section 3643 of the Revised Statutes, which provides that: ‘ Any person, company or association hereafter insuring any building or structure against loss or damage by fire or lightning, by renewal of a policy heretofore issued, or otherwise shall cause such building or structure to be examined by an agent of the insurer, and a full description thereof to be made, and the insurable value thereof to be fixed by such agent; in the absence of any change increasing the risk without the consent of the insurers, and also of intentional fraud on the part of the insured, in case of total loss the whole amount mentioned in the policy or renewal upon which the insurers receive a premium shall be paid, and in case of a partial loss the full amount of the partial loss shall be paid; and in case there are two or more policies upon the property, each policy shall contribute to the payment of the whole of the partial loss in proportion to the amount of insurance mentioned in each policy; but in no case shall the insurer be required to pay more than the amount mentioned in its policy.’ This statute has been considered by this court on several occasions, and has invariably been held to enter into and become a part of every fire policy on a building or structure, issued since its passage, and to supersede and annul those conditions and stipulations in such policies that are at variance with its provisions. Insurance Co. v. Leslie, 47 Ohio St. 409, 24 N.E. 1072; Insurance Co. v. Hull, 51 Ohio St. 270, 278, 37 N.E. 1116,46 Am.St.Rep. 571; Moody v. Insurance Co., 52 Ohio St. 12, 23 38 N.E. 1011,26 L.R.A. 313, 49 Am.St.Rep. 699; Sun Fire Office v. Clark, 53 Ohio St. 414, 426, 429, 430, 42 N.E 248,38 L.R.A. 562; Insurance Co. v. Drackett, 63 Ohio St. 41, 54, 57 N.E. 962,81 Am.St.Rep. 608. In the case of Insurance Co. v. Leslie, it was held, among other things, that a condition contained in such a policy, that ‘ the amount of the loss or damage should be estimated according to the actual cash value of the property at the time of the fire, and not more than it would cost the insurer or insured to replace or restore the same,’ was repugnant to the statute, and void, and that, in case of a total loss, notwithstanding the condition the insured was entitled to recover the full amount named in the policy, although that amount exceeded the actual value of the property. In Moody v. Insurance Co., the court held that a condition in such a policy which declared there should be no liability ‘ for loss or damage in or on vacant or unoccupied property, unless consent be indorsed thereon,’ was subject to, and controlled by, the provision of this statute which makes the insurer liable ‘ in the absence of any change increasing the risk,’ and that a defense founded on a breach of that condition which did not aver the risk was thereby increased, was insufficient. That decision, and the Leslie Case, were approved and distinguished in the subsequent case of Sun Fire Office v. Clark, 53 Ohio St. 414, 429, 430, 42 N.E. 248,38 L.R.A. 562. The Moody Case was also approved and followed in Insurance Co. v. Moore, 52 Ohio St. 606, 607, 44 N.E. 1139, and also in Retterer v. Insurance Co., 55 Ohio St. 635, 48 N.E. 1117, and its doctrine was distinctly reaffirmed, both in the syllabus and opinion, in Insurance Co. v. Baldwin, 62 Ohio St. 368, 381, 382, 57 N.E. 57. And in the Leslie Case, and Insurance Co. v. Drackett, supra, it was held that the provisions of this statute are founded upon public policy, and the insured cannot be held to a waiver of them. Since these several decisions, which are in entire harmony with those of the courts of last resort of other states where similar statutes have been in force, all contracts of fire insurance have been entered into and policies issued in view of the law as established by them. Insurers have accordingly fixed the amount of the insurance written in their policies, and the premiums they have required to be paid, with respect to the law as so established, and all premiums have been paid by the insured on the faith of it. So that the law, as declared in the cases referred to, has, in its appropriate sense, become a rule of property in this state. There is no conflict of authority between the case of Insurance Co. v. Wells, 42 Ohio St. 519, and any of the decisions of this court heretofore cited in which the statute in question was considered and adjudicated upon. In that case (Insurance Co. v. Wells) no questions were raised relating either to the interpretation of section 3643, or its application to the policy there in suit. Assuming that they might have been made, it is perfectly clear that no question of the kind was either passed upon or considered by the court, or brought to its attention, or even alluded to by counsel. This plainly appears from the report of the case. It has long been the established rule of this court, as well as the settled law on the subject, that ‘ a reported decision, although in a case where the question might have been raised, is entitled to no consideration whatever as settling, by judical determination, a principle not passed upon nor raised at the time of the adjudication.’ questions were not raised nor considered, ‘ it questions were not raised nor considered, ‘ It is as if they were not in the case at all.’ State v. Pugh, 43 Ohio St. 121, 123,1 N.E. 439; Wamb. Study Cas. § 17. In Insurance Co. v. McLoon, 100 Mass. 475, 476, it is said by Gray, J., that: ‘ No rule of the law of insurance is better settled by authority than that by which, when the insured has some interest at risk, and there is no fraud, a valuation of the subject insured in the policy is held conclusive upon the parties, at law and in equity. Hodgson v. Insurance Co., 5 Cranch, 100, 3 L.Ed. 48; Insurance Co. v. Hodgson, 6 Cranch, 206, 3 L.Ed. 200, and Id., 7 Cranch, 332,3 L.Ed. 362; Alsop v. Insurance Co., 1 Sumn. 451, F. Cas. No. 262; Irving v. Manning, 6 C. B. 391; Id., 1 H. L. Cas. 287; Barker v. Janson, L. R. 3 C. P. 303; 3 Kent, Comm. (6th Ed.) 273; Coolidge v. Insurance Co., 15 Mass. 341; Robinson v. Insurance Co., 1 Metc. (Mass.) 147; Fuller v. Insurance Co., 4 Metc. (Mass.) 206. And none is better founded in reason. The very object...