Unton v. Liverpool, London & Globe Ins. Co.

• Decision Date: 26 February 1926
• Docket Number: No. 25141.,No. 25137.,No. 25139.,No. 25138.,No. 25140.,25137.,25138.,25139.,25140.,25141.
• Citation: 166 Minn. 273,207 N.W. 625
• Court: Minnesota Supreme Court
• Parties: UNTON et al. v. LIVERPOOL, LONDON & GLOBE INS. CO. et al.

207 N.W. 625

166 Minn. 273

UNTON et al. v.LIVERPOOL, LONDON & GLOBE INS. CO. et al.

No. 25137.

No. 25138.

No. 25139.

No. 25140.

No. 25141.

Supreme Court of Minnesota.

February 26, 1926.

Appeal from District Court, Ramsey County; Hugo O. Hanft, Judge.

Action by J. W. Unton and others against the Liverpool, London & Globe Insurance Company and others on insurance policies.Five cases tried together by stipulation.After denying defendants' motion for a directed verdict, and granting such motion on behalf of plaintiffs, defendants appeal from an order denying an alternative motion for judgment or a new trial.Affirmed.

Doherty, Rumble, Bunn & Butler, of St. Paul, for appellants.

William Bauer, of St. Paul (John J. Keefe, of St. Paul, of counsel), for respondents.

QUINN, J.

Plaintiffs held a leasehold upon the Keewaydin Hotel, located on the shore of Lake Minnetonka, which, according to the terms of the lease, would expire May 3, 1933.On May 5, 1924, each defendant issued its policy of fire insurance to plaintiffs, covering the leasehold, amounting in the aggregate to $10,000.The property was totally destroyed by fire on May 18, 1924, resulting in the cancellation of the lease.All policy forms were alike.By stipulation of the parties, all five cases were tried together.At the close of the trial, the court denied the motion of the defendants for a directed verdict, and granted a like motion on behalf of plaintiffs.The appeal is from an order denying the alternative motion of defendants for judgment or a new trial.

At the trial plaintiffs offered no evidence as to the value of the leasehold or as to the loss or damage, claiming that the policies were valued, not open.The court ruled in accordance with that theory, holding that the amount recoverable was fixed by the policies and should be determined therefrom, and accordingly directed a verdict against each defendant for the amount asked for in the complaint, which verdicts amounted in the aggregate to $8,462.80.

The Standard Fire Policy Statute(section 3512,G. S. 1923), among other things, provides that no fire insurance company shall issue, on property in this state, any policy other than the standard form herein set forth, the blanks for which may be filed by print or in writing and no condition, stipulation, or term, other than those therein provided for, shall be valid if inserted in any such policy, except as follows:

"It may print or use in its policy printed forms for insurance against loss of rents and rental values, leaseholds, values, use and occupancy."

It further provides:

"The period of indemnity under this contract shall be limited to such length of time (commencing with the date of the fire and not limited by the date of the expiration of the policy) as would be required with the exercise of due diligence and dispatch to rebuild, repair or replace such part of the property described in said policy as may be destroyed or damaged."

The statute makes no specific reference to how the indemnity under such a policy shall be determined in the event of cancellation of the lease by fire.However, that aspect of the situation was clarified by typewritten provisions in the form of riders placed upon the standard form of policies used, which fixes the value of the property insured in the event of the cancellation of the lease by fire.The value so fixed and agreed upon by the parties to the contract of insurance should be, and we hold is, conclusive in the absence of fraud.14 R. C. L. 1305;Millaudon v. Western Marine, etc., 9 La. 27, 29 Am. Dec. 433;Luce v. Dorchester Mut., etc., 105 Mass. 297, 7 Am. Rep. 522;Potapsco Ins. v. Biscoe, 7 Gill & J. (Md.) 293, 28 Am. Dec. 319, and note;Lewis v. Rulker, 2 Burr, 1167, 14 Eng. Rul. Cas. 215;14 R. C. L. 1295, par. 467.

The typewritten provisions on a $1,000 policy are as follows:

"In the event of loss or damage by fire during the term hereof, this company shall be liable for its proportion of the actual loss of such leasehold interest which interest at the date of this policy is estimated at ten thousand dollars.

"It is understood and agreed that the amount of this policy shall be automatically reduced in the sum of $9.26 at the end of each month after the date of this policy, and, in the event of cancellation of the lease by fire in accordance with the conditions of the fire clause hereinbefore quoted, this company shall be liable to the insured for actual loss sustained to not exceeding whatever amount of insurance remains in force at the date of the fire to be computed as follows:

"Loss for the first three months succeeding the fire to be paid cash without discount; loss for the remaining months of the unexpired lease to be paid cash less discount of that sum which will leave an amount payable for each separate month which at four per cent. (4%) interest compounded annually will amount to the increased rental value which would have been realized by the assured in the ordinary course of business had lease not been terminated."

The paragraph first above quoted provides that the company shall be liable for its proportion of the actual loss of the leasehold interest, which interest, at the date of the policy, is estimated at $10,000.The meaning of this provision is no different than it would be if the words "estimated at" had been omitted.The meaning is the same as though the word "fixed" had been used in lieu of the word "estimated."The entire phrase was for the purpose of naming the value of the interest to be covered by the policy as agreed upon by the...