Court Opinion

ID: 6661785
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:02:42.47543+00
Date Added: 2024-06-11T16:00:12.153950
License: Public Domain

Faavcett, J.,
dissenting.
I have no quarrel with the rule announced in the first paragraph of the syllabus of the majority opinion, that, “when Avriting insurance on a building situated within the fire limits of a city, the insurance company is bound by the laws and ordinances of the city, and such laws and ordi*104nances should he considered as a part of the policy,” but I think the rule should work both ways, and hold that the owner of a building situated within such fire limits should also be bound by the ordinances of the city, and that such ordinances should be considered as a part of the policy he accepts from the insurance company. He knows, as well as the company, that, when a frame building situate within the fire limits is damaged 50 per cent, of its value, it cannot be repaired, but will be ordered torn down and removed. Both the insurance company and the assured, therefore, in entering into a contract of insurance, have the ordinance before them, and the simple question in this case is: May they enter into a contract, binding upon both, that the assured will assume the risk of having his building torn down after it has suffered a partial loss by fire, and that the insurance company will assume the risk of loss actually caused by the fire, but will not assume the risk of loss or damage to the building over and above that caused thereby, which may be occasioned by the action of the city authorities in ordering the building destroyed? Each of the contracting parties understands fully the part which fire may play in the destruction of such a building, and the part which the ordinance of the city may play in causing such destruction. The company assumes the risk of the former, and the assured of the latter. Is such a contract prohibited by the valued policy act? I think not. In such cases I think the rule is, and should be, that insurance against damage by fire protects the insured against loss resulting from the enforcement of an ordinance prohibiting the repair of his building after its partial destruction by fire, in the absence, and only in the absence,-of an agreement to the contrary. Hewins v. London Assurance Corporation, 184 Mass. 177, 182. The provision in controversy relates to the causes of loss and the_ character, as well as the extent, of the insurer’s risk or liability. On these matters parties may make their own agreements, unless they are hampered by valid legislation. A statute restricting the right of contract, as the valued policy law, should not be extended by implication or con*105«traction beyond its import and purposes as disclosed by tbe language of tbe lawmakers. Tbe purpose of tbe valued policy act is to prevent insurance at an overvaluation, and to deter insurers from taking reckless risks, by prohibiting them, after a total loss, from claiming that, at tbe time of issuing tbe policy, tbe value of tbe insured property was not equal to tbe amount of tbe insurance. Here tbe value of tbe property when tbe policy was issued and when tbe fire started is not questioned. The question here is tbe character of tbe risk assumed by tbe company. Tbe statute by its own terms applies to insurance on property wholly destroyed. Where there is only a partial loss by fire, and tbe damaged building is for that reason demolished under police ordinances, enacted to protect tbe public against future fires, tbe character of tbe risk to be assumed by an insurance company is a lawful subject of contract. If a property owner desires insurance, limited to fire alone, intending to carry bis own risk in so far as a city may prevent him from repairing a building partially destroyed by fire, bow can be procure such indemnity if be cannot make a lawful contract including those terms? They are not inconsistent with tbe valued policy act, and there is nothing in tbe policy indicating a purpose to violate the law or to mislead or defraud the insured. It is a plain, straightforward, honest contract, voluntarily entered into between tbe parties, and tbe district court was right in enforcing it as tbe parties bad made it.
Rose, J., joins in dissent.