Court Opinion

ID: 5180733
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:41:47.221251+00
Date Added: 2024-06-11T08:26:33.672659
License: Public Domain

Barrett, J. (dissenting):
The plaintiffs sue upon a policy of insurance issued by the company, of which the defendants are the attorneys, upon clothing and the materials for the same in the possession of third parties for the purpose of being made up. The total amount of insurance is $3,000, and there is a limit of $600 for liability upon goods in any one building. The policy contains the usual clause providing that the defendants shall not be liable for a greater proportion of any loss than the amount thereby insured shall bear to the whole amount of insurance. The plaintiffs also had a policy upon the same goods issued by the Hamburg-Bremen Fire Insurance Company similar in nearly every respect, except that the loss payable on goods in any one building was limited to $300. A loss occurred of $172.05 on goods in one building. The plaintiffs claimed that the defendants were liable for two-thirds of this amount, or $114.70, while the defendants contended that they were liable for only one-half, or $86.03. The trial judge took the latter view, and directed judgment accordingly, from which the plaintiffs appeal.
The crucial question of course, is, to what amount did the defendants insure the particular goods in this particular building ? If to the extent of $600, then parity of reasoning would show that the Hamburg-Bremen Company had insured the same goods to the amount of $300, and, upon well-settled principles, the two companies ought to divide any loss in the proportion of two to one. If, on the contrary, this particular parcel of goods was insured in an •equal amount by both companies, just as. the whole quantity of goods was insured, then it was proper to divide the loss equally between them.
Ogden v. East River Insurance Co. (50 N. Y. 388) settled the rule for determining in the case of a policy covering several parcels *54of property, the amount apportionable to each, parcel, when there is a total loss. In such a case each parcel is insured for that proportion of its full value which the whole amount of the insurance bears to-the whole value of the property insured. This is the sum deemed to be insured by the policy for the purpose of determining the-liability of another insurer of the specific parcel. Whether the samé rule' would apply if the loss were partial instead of total, the court did not decide. Bapallo, J., said: “It may be that the rule for ascertaining the amount of insurance upon any particular parcel. where insurances are commingled, as in this case, is dependent upon the extent of the loss, and that whatever could be recovered upon the more comprehensive policy without regard to the other is the amount to be deemed insured thereby on the part injured in case of a partial loss, * * * By insuring several parcels-. of property for .an entire sum the insured obtains the advantage, and the insurer subjects himself to the liability of having so much of the total sum insured, as may be necessary to compensate for damage to-. any part of the property, applied to that part, though the sum named in the policy would have been insufficient to cover the loss if the whole had been destroyed. Thus it is left to the result, in case of a, partial loss, to determine what sum .is insured upon any particular parcel, the only limit being its value. On the other hand, it would. be desirable to adopt a general rule applicable to all contingencies:” (50 N. Y. 391, 392.) The learned. judge evidently leaned to the first view, viz., that the amount insured upon any specific parcel is the amount which would actually :be recovered in. case of its destruction. We think this view is the correct-one. Ho-necessity appears for determining the . amount insured on the:. specific parcel in advance of a fire, and consequently no reason for deciding the question in the light of any other facts than those which, actually happened.- It certainly seems the sensible rule that the amount. of insurance is the sum which subsequent events actually enabled the insured to realize, out of the policy.- Applying this rule to the case at bar, there can be no'doubt that'the amount of insurance on the goods in the damaged building was the sum of $172.05,. for this is the sum which the plaintiffs would have -been entitled to receive but for the. apportionment clause. The same "reasoning-shows that the Hamburg-Bremen Company had the same amount of *55insurance on these goods. The insurances being equal, the two companies were rightly adjudged liable to contribute equally.
It is well to consider this $600 limitation in connection with its surroundings. The clause in which it is found reads as follows: “ It is undei’stood that the policy does not cover or include any property on which the assured has specific insurance, and that this company shall not be liable for a greater proportion of any loss than the amount of this policy bears to the total value of the property hereby insured, nor cover a greater amount than $600 in any one building.” The nature of the provision is plain. It is simply a restriction upon the liability of the defendants, and stands upon exactly the same footing as the other restrictions with which it is coupled. Just as the defendants were bound to pay only that proportion of the loss in this particular building which the whole a'mount of insurance bore to the whole insured value, so, in addition, this proportion might not exceed the sum of $600. ■ There is both a proportional and a money limitation. But, in subordination to these conditions, the insured is still entitled to full indemnity, and the amount of that indemnity in the particular case is the meas-sure of the insurance on the specific property in question. To attempt to make the $600 limitation the basis of a separate insurance is to entirely pervert its proper use. The whole office of this clause is to relieve the defendants from paying more than the sum of $600 for a loss upon, goods situate in any one building. It simply creates an exception to the general rule requiring full indemnity to be paid where the insurance is sufficient in amount. When the exception does not apply, the rule takes effect just as though the clause were not contained in the policy at all. The clause quite fulfills its office when it does what, on its face, it purports to do. To construe it as working a separate insurance of $600 gives us the strange result that the defendants’ liability is increased by a provision which was meant simply to limit it.
There are insuperable difficulties‘in the way of treating this $600 limitation clause as creating a separate insurance to that amount on the property in this particular building. The essence of insurance is a beneficial right to full indemnity as far as the insurance goes. There can, however, be no certainty here that the plaintiffs will be entitled to recover the sum of $600 on the property in any one *56building in case of loss to that amount. At any time when the number of buildings in which insured goods are placed exceeds five, and each building contains goods, having a value of $600 or over, the insured must accept for the property contained- in each building • a less sum than $600 if a total loss -of the goods contained in all of the buildings occurs. The argument of the plaintiffs seems to be' that they have' a contingent insurance on the property in each building to the amount of $600; that while the extent of the destruction by fire elsewhere may cut down this sum, still, where the fire is confined to the one building, they are entitled to the $600and that this must, in- such particular case, be deemed the amount of insurance. This, it will be-seen, is a method of ascertaining the sum insured on specific property covered by a policy comprehending other parcels, which is not contemplated by Ogden v. East River Insurance Co. (supra). Two ways are there referred to, viz., to take: 1. The sum which must fall to the specific property even in case of total loss; or, 2. The greater sum which an actually occurring partial loss may yield - to the property. The plaintiffs’ theory that $600 is the amount insured on the property in this building is an anomalous one. It does not take either the sum necessarily falling due to the property in the building in case of total loss, or the actual' amount of the partial loss as insured. There seems to be no basis in reason or authorr ity for this method of ascertaining the amount of insurance. As was said at the outset, I believe the true rule to be that where' a policy covers several specific parcels of. property, and one of these parcels would be entitled to receive different sums in different contingencies, the problem as to how much insurance it bears must be determined in the light of the circumstances attending the fire which actually occurred. If the fire in this case had been a $600 fire, then the insurance under the defendants’ policy would have been $600. It seems illogical, however, to say that the property bears a .$600 insurance when the loss is only $172.05.
I do not adopt the rule, against which, and rightly, the plaintiffs’ counsel protests, that every loss is to be divided equally between the two companies simply because $3,000 worth of insurance has been taken out in each. That would give no scope to the different limitation clauses in the- two policies; I simply hold that the two policies are concurrent, and travel together up to the $300 limit; *57and that, when this is reached, the defendants’ policy goes the rest of the distance alone. This construction gives effect to the actual intent of the insurers and the insured, while that contended for by the plaintiffs does not. The defendants put themselves under a greater liability than the Hamburg-Bremen Company only in that class of cases where the loss in single buildings exceeded $300. But here we have a case where the loss is under $300, and still, it is said, that the defendants must pay twice as much as the other company. To compel them to do so would clearly violate the contract which the parties made. The fair and sensible course is to ascertain what sum, but for the apportionment clause, each company would be bound to p&y to the insured under the particular circumstances attending the loss ; and then to require each insurer to contribute to the sum due in proportion to the amounts so insured by each.
The judgment and order should be affirmed, with costs.
Judgment modified as claimed by plaintiffs, with costs.