Nw. Mut. Life Ins. Co. v. Rochester German Ins. Co. of Rochester, N.Y.

• Citation: 85 Minn. 48,88 N.W. 265
• Parties: NORTHWESTERN MUT. LIFE INS. CO. v. ROCHESTER GERMAN INS. CO. OF ROCHESTER, N. Y.
• Decision Date: 20 December 1901
• Court: Supreme Court of Minnesota (US)

85 Minn. 48

88 N.W. 265

NORTHWESTERN MUT. LIFE INS. CO.

v.ROCHESTER GERMAN INS. CO. OF ROCHESTER, N. Y.

Supreme Court of Minnesota.

Dec. 20, 1901.

Appeal from district court, Ramsey county; Edwin A. Jaggard, Judge.

Action by the Northwestern Mutual Life Insurance Company against the Rochester German Insurance Company of Rochester. Verdict for plaintiff. From an order denying a motion for judgment notwithstanding the verdict and for a new trial, defendant appeals. Order denying motion for judgment affirmed, and order denying new trial reversed.

Syllabus by the Court

1. Under the standard fire insurance policy, total loss is to be ascertained as of the date of the occurrence, and is determined by the following tests: A building is not a total loss unless it has been so far destroyed by the fire that no substantial part or portion of it above the foundation remains in place capable of being safely utilized in restoring the building to the condition in which it was before the fire. The words ‘total loss,’ when applied to a building, mean totally destroyed as a building; that is, that the walls, although some portion of them remain standing, are unsafe to use for the purpose of rebuilding, and would have to be torn down, and a new building erected throughout. There can be no total loss of a building so long as the remnant of the structure left standing above the foundation is reasonably and safely adapted for use (without being taken down) as a basis upon which to restore the building to the condition in which it was immediately before the fire; and whether it is so adapted depends upon the question whether a reasonably prudent owner of a building uninsured, desiring such a structure as the one in question was before the fire, would, in proceeding to restore the building, utilize such standing remnant as such basis. If he would, then the loss is not total. Rules applied, and held error to refuse instructions in substance embodying these principles.

2. A cold storage plant was insured under the following description: ‘Four-story and basement brick building, with composition roof, and a brick engine and boiler house attached, including steam heating and hoisting apparatus, steam, brine, water, and gas pipe fixtures, and all other permanent fixtures occupied for warehouse purposes.’ The engine house consisted of a small one-story brick structure attached to the main building, and the whole considered and operated as an entirety. Held, conceding the engine house was but slightly damaged by the fire, under the tests above given the question of total loss must be applied to the structure as a whole.

3. The wall at one end of the building had been bolted to a similar one of an adjoining brick building, thereby making a double wall. Held that, as bearing upon the question of total loss, it was proper to show that the double wall remaining was not suitable to be utilized, in place, in restoring both buildings. In such case the insured could not claim the entire benefit of the remaining double wall.

4. The evidence did not show conclusively that the loss was total. Countryman & Morrison, for appellant.

Durment & Moore, for respondent.

LEWIS, J.

The St. Paul Cold Storage Company insured a certain building in the appellant company, taking out two policies, one for $2,500 and another for $2,000. The property was described as follows: ‘The four-story and basement brick building, with composition roof, and a brick engine and boiler house attached, including steam heating and hoisting apparatus, steam, brine, water, and gas pipe fixtures, and all other permanent fixtures occupied for warehouse purposes, situate at Nos. 201, 203 and 205 Eagle street, St. Paul. The insurable value of the building and addition in the first item is hereby stated to be $2,500.’ The interest of the insured in these policies was assigned to respondent, and, a fire having occurred, it was claimed by respondent that within the terms of the policy there was a total loss. This appellant denied, claiming the damage did not exceed $1,400, and demanded a submission of the amount of loss to appraisers, according to the provisions of the policies. Respondent refused to comply with the demand for arbitration, and brought this action to recover the entire amount covered by the policies. Upon the trial the jury rendered a verdict for the full amount of the policies, and from an order denying a motion for judgment notwithstanding the verdict and for a new trial the insurance company appealed.

The principal question in the case is: What is the meaning of the term ‘total loss,’ as used in the standard policy? That part of the contract necessary for our consideration reads as follows: ‘In case of loss, except in case of total loss, on buildings under this policy, and a failure of the parties to agree as to the amount of loss, it is mutually agreed that the amount of such loss shall be referred to three disinterested men,’ etc. The evidence as to the condition of the building and the amount of the damage was conflicting. One witness produced by respondent testified that, in order to rebuild, the front wall would have to be taken down, three stories of the south wall, and the entire rear walls; that the three stories of the north wall could be left standing; also that the walls which would not have to be taken down were of the value of $2,235, in place, for the purpose of rebuilding. Another of respondent's witnesses testified that the north wall could be used in rebuilding, except 22 feet of the top, which would have to be removed; but that the other walls would have to come down in rebuilding, being so much damaged that the cost of repairing them would exceed the cost of new walls. And another witness stated that the north wall would have to come down entirely, and the northwest corner of the west wall would have to come down to the foundation, but that the southwest corner, for about the height of one story, would be all right. Witnesses called on behalf of appellant testified that, having made a careful examination of the building, the foundation walls, and at least the first and second stories of the brick walls on both sides and ends of the main building, were in good condition, and suitable for rebuilding, with some repairing; that the value of the brick and stone walls, in place, which were safe to be used in rebuilding was about $6,000, exclusive of the brick engine house addition. The city engineer of St. Paul testified that the two top stories of the brick walls ought to be taken down, but that the remaining portion of the walls were all right, in place, for rebuilding, after some inside repairs. Upon the question of total loss the court instructed the jury as follows: ‘The fact that the walls which remain standing have some value, and that portions of them may continue to stand, and be used in rebuilding upon these premises, will not prevent it being a total loss, nor be sufficient to defeat plaintiff's recovery in this action, if the identity and specific character of the building has been destroyed as stated.’ The court further charged that it was not necessary that all of the materials of the building should have been consumed by the fire, nor that the walls should have fallen as the result thereof; that it was the building, as such, which was insured, and not the materials; and if, as the result of the fire, the building no longer exists, there remaining only the ruins, so that the structure has lost its identity and specific character as such, then the loss is a total one. From the evidence it appeared that there was a one-story brick engine house, attached to the main building, which was not materially injured by the fire. In reference to it the court charged the jury as follows: ‘The building, together with the engine room attached, and the fixtures that were therein contained, are to be considered as an entirety. And the question is whether or not, considering the insured objects as a whole,-as an entirety,-whether or not the loss was partial or total?’ To these instructions exception was taken, and the following requests were submitted by appellant, but refused by the court: ‘A building is not a total loss, within the meaning of the policies in this case, unless it has been so far destroyed by the fire that no substantial part or portion of it above ground remains in place capable of being safely utilized in restoring the building to the condition in which it was before the fire.’ Also: ‘The words ‘total loss,’ when applied to a building, mean totally destroyed as a building; that is, that the walls, although some portion of them remain standing, are unsafe to use for the purpose of rebuilding, and would have to be torn down, and a new building erected throughout.' Appellant also requested the court to give the following instruction: ‘There can be no total loss of a building so long as the remnant of the structure left standing above ground is reasonably and safely adapted for use (without being taken down) as a basis upon which to restore the building to the condition in which it was immediately before the fire; and whether it is so adapted depends upon the question whether a reasonably prudent owner of the building, uninsured, desiring such a structure as the one in question was before the fire, would, in proceeding to restore the building, utilize such standing remnant as such basis. If he would, then the loss is not total.’ Also: ‘If you believe from the evidence that the brick engine and boiler house addition mentioned in these policies was substantially uninjured by the fire, and that it was not thereby rendered unfit to be occupied and used for the purposes of an engine and boiler house in connection with the warehouse mentioned in the policies, then I charge you that there has not been a total loss, and your verdict must be for the defendant.’

In the first place, it would be well to determined the nature and extent of...