North v. Northwestern Insurance Co.

• Decision Date: 30 May 1863
• Citation: 11 Mich. 425
• Court: Michigan Supreme Court
• Parties: Samuel P. Brady v. The Northwestern Insurance Company

11 Mich. 425

Samuel P. Brady v. The Northwestern Insurance Company

Supreme Court of Michigan

May 30, 1863

Heard April 23, 1863; April 24, 1863 [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material]

Error to Oakland Circuit.

The action was brought by Brady upon a policy of insurance for $ 2,000, issued January 1, 1856, for one year, and renewed annually thereafter, the last renewal being January 1, 1861. The policy covered a three-story wood warehouse owned by Brady, in the city of Detroit. Among the conditions of insurance inserted in the policy was the following:

"X. In case of any loss or damage to the property insured, it shall be optional with the company to replace the articles lost or damaged with others, of the same kind and equal goodness, and to rebuild or repair the building or buildings within a reasonable time, giving notice of their intention so to do within forty days after having received the preliminary proofs of loss required by the third and ninth articles of these conditions, and where no such offer to replace, rebuild or repair is made, the loss due and ascertained shall be payable in sixty days after receiving such proofs and papers as are required by said third and ninth articles."

On the trial it was proved on behalf of the plaintiff, that the warehouse took fire February 1, 1861, and the roof was entirely burned. The building, before the fire, was worth from $ 4,000 to $ 5,000, and the unconsumed portion was now worth less than $ 100.

The plaintiff then proposed to refer to the charter of the city of Detroit, for the years 1855 and 1857; and offered in evidence section one of chapter 130, of the ordinances of the common council of the city of Detroit, approved February 15th, 1849, as tending to show that the warehouse in question when insured was, and ever since has been within the fire limits of the city of Detroit, as established by said section one of said ordinances; and, as tending to show that at the time of the making and renewal of said policy of insurance, and ever since, the ordinances of the common council prohibited the rebuilding, without special leave of the common council, of any wooden building partially destroyed by fire within said fire limits, he offered in evidence the following parts of said ordinances of said city; section 1, in said chapter 130, of the ordinances above referred to, which is in the words following:

"No person shall hereafter erect or place any building or any part of a building within the following limits, unless such building or part of building shall be constructed of stone or brick, with party or fire walls of the same material rising at least ten inches above the roof, if the same be covered with metal or slate if with wood, then at least two feet, viz:"--here follows a description of fire limits, mentioning the ground covered by the insured premises: and also section 4, viz: "No person shall raise or elevate from the ground any wooden building now standing within said limits, by constructing thereunder or thereon another story, or in any other way increase the height of said building, and if any person shall violate the provisions of this section, then he shall forfeit a penalty of fifty dollars, and also a penalty of fifty dollars for each and every week said building shall remain so raised or erected." Also section one, of chapter 39; and section four, of chapter 39, of the ordinances of the common council, approved August 15th, 1855, which said section one established fire limits, embracing the warehouse in question, and which said section four was the same in every respect as section four of the ordinances of 1849, previously above quoted. Also sections one and four, of chapter 38, of the ordinances of the common council of said city, approved October 1st, 1859, which said section one established fire limits, embracing the warehouse in question, and which said section four was as follows: "No person shall repair any wooden building partially destroyed by fire, nor raise or elevate from the ground any wooden building now standing within said limits (fire limits as established by section 1), by constructing thereunder or thereon another story or part of a story, or in any way increase the height of said buildings, unless he shall have previously obtained permission from the common council to do so, and in no case where the proposed repairs or alterations will increase the fire risk shall such permission be granted, and if any person shall violate the provisions of this section, then he shall forfeit a penalty of fifty dollars for each and every week said building shall remain so raised or erected." To all which and each of which said city ordinances, so sought to be introduced in evidence, the defendants objected, that the ordinances of the common council, and their proceedings thereunder could have nothing to do with the measure or rule of damages applicable to the contract of the parties, and that the same were wholly irrelevant to the issue between them. The objection thus taken was sustained by the court, and the plaintiff excepted.

The plaintiff at the same time, and in connection with the offer to introduce said ordinances in evidence, likewise offered in evidence the duly authenticated proceedings of the said common council which were had on the 12th and 19th of February, 1861, tending to show that the plaintiff had applied to said common council for permission to repair said warehouse, and at the suggestion of J. L. Whiting, the agent of the said defendants residing in the city of Detroit, and that the said council had denied said plaintiff's request, which testimony was objected to by the defendants for the same reasons as were urged against the admission of the city ordinances, and the objections having been sustained by the court, the plaintiff excepted.

The plaintiff admitted in open court the payment to him of the sum of $ 866.50 by the defendants, to apply upon the amount of his damage or loss under the policy, and conceded that another insurance company was responsible for one-half of the entire amount of his damages and thereupon rested.

The defendants then called several witnesses, who were sworn, and testified what sum in their judgment was necessary to restore the building to the condition it was in immediately preceding the fire, and then rested.

The court charged the jury that the rule of damages in the cause was, that the plaintiff should recover such amount as was sufficient to repair the warehouse, and place it in as good condition as it was in at the time when the loss or damage by fire happened, and that a jury could find for the plaintiff only such damages as they were satisfied would be sufficient to have so repaired the premises. That as the plaintiff admitted he had received $ 866.50 from the defendants, and it was conceded that another insurance company was responsible for one-half of such damages, the jury could only find for the plaintiff for one-half of any additional amount they might from the testimony believe to have been necessary or sufficient for the repairing of the premises insured. The plaintiff excepted to that portion of the charge which instructed the jury that the proper measure of damages was such amount as would be sufficient to rebuild or repair said building.

The defendants having recovered judgment, plaintiff brought error.

Judgment reversed, and new trial ordered.

G. V. N. Lothrop and S.D. Miller, for plaintiff in error:

The contract of insurance is largely speculative. The grounds upon which the insurer enters into his agreement are necessarily uncertain. He weighs the facts before him in estimating the probabilities of profit or loss.

Not only the physical, but the moral and legal aspects of these facts, are essential to such an estimate; and must be assumed to have entered into his consideration. He regulates his contract by them. Not only does he have reference to the material, and the mode of construction, and the mere locality of the thing to be insured, and the uses to which it may be put; of vital consequence to his risk is the state of the community, its character, its police regulations (affording greater or less facilities for the control of the element insured against), and such other surroundings as of necessity have an influence quite as great as the merely physical condition of the property.

He limits the extent of his liability with an intelligent reference to the value of the property. He ascertains that value not merely from an estimate of the price of the material used in the construction of the thing which is the subject of the risk: he regards, also, its locality and the uses to which it may be put; and he considers, also, in this estimation, such moral and legal conditions as are intimately connected with the property and necessarily enhance, or subtract from, the intrinsic value.

The contract is one of indemnity. Its purpose is to secure the insured against such loss as may happen by fire to his property.

The contract "is to be construed largely for the benefit of trade and for the insured:" Pell v. Royal Exch. Ins. Co., 1 Burr. 341.

The parties must be assumed to have in view local laws particular usages, and exceptional courses of trade incident to the individual risk. Without discussing the question of proximate and remote causes, a review of the cases will show that the insurer has always been held liable for the full amount of the actual injury to the subject of the risk,...