Lite v. Firemen's Insurance

Scott, J.: The plaintiff sues, upon a policy of fire insurance purporting to insure him against the loss of profits upon property held by .him under lease. The plaintiff leased from Max Raymond and Aaron I. Raisman three adjoining apartment houses in the city of New York for a term of four years and seven months. The houses were so constructed that they comprised thirtyffour suites of apartments, besides several shops; On July 28, 1904, the defendant issued -to plaintiff its policy of insurance against fire* such policy being in what is known as the standard' form, with the particular subject of the insurance described in a typewritten slip attached to "the printed form. The policy undertook. to insure plaintiff “ against all direct loss or- damage by fire, except as hereinafter provided, to an' amount not exceeding” $15,000. - The typewritten slip describing the subject of the insurance read as follows: “ On the profits of his lease of the brick and stone buildings situate Nos. 100,102 and 104 West Sixty-first street, borough of Manhattan, New-York city, said lease having four years and seven months' to run from August 1st, 1904. It is understood and agreed that if [412] said buildings shall be totally destroyed by fire said company shall pay the whole amount hereby insured, less a deduction at the rate of $416.66 per month for the time that shall have elapsed between the commencement of this policy and the date of occurrence of said fire. And in case of such damage by' fire as shall, without total destruction, render said buildings untenantable, this company shall pay at the rate of $416.66 per month to be computed from the date of occurrence of said fire to the date which, by due diligence, the said buildings could be repaired and rendered' again fit for • occupancy and not to be limited by the. expiration of this policy; and in no case shall the company be liable for a greater amount than the sum insured, nor for any loss other than that which' may arise -under said leasehold interest.” . On December 'll, 1904, a fire occurred which rendered ten out of thirty-four apartments uninhabitable for a time, and for the loss , of profits resulting therefrom the plaintiff sues. At the close of the plaintiff’s case the defendant moved, for a dismissal upon the ground that the complaint did not state a causé of action, and upon the further ground that the plaintiff had not proved a cause of action. ' The court granted the motion generally without specifying upon which ground it acted. The defendant- strenuously argues that the policy is a valued one, and insures only against a total loss of profits, and that no liability attaches for a merely partial loss, such as the plaintiff suffered. With- this contention we are unable to agree.. The general rule to be observed in the construction of an insurance policy is that, if possible, effect should be given to. every word and expression contained therein, and if the policy be susceptible of two readings, or is so.ambiguously expressed that, reasonable and intelligent men on. reading it might honestly , differ as to its meaning, -that reading must be adopted which is most favorable to the insured. (Kratzenstein v. Western Assurance Co., 116 N. Y. 54.) The first clause in the typewritten description of the subject-matter of the insurance, if read by itself, -is certainly 'broad enough to cover any loss of profits, whether total or partial. It recites that -the insurance is “ on the profits of his lease ” which is very clearly sufficient to cover any loss of profits. The subse"quent clauses in the description apply only to cases of a total loss, and as to such total loss the policy is unquestionably a valued one. [413] The true construction of the policy as we read it is that it insured against any'loss of profits resulting from fire, the amount to be paid in case of a total loss being valued or limited, leaving the. amount to be paid in case of a partial loss to be determined by competent proof; that the policy was intended to cover a partial, .as well as a total loss seems to be further indicated by the so-called “ 80% average clause,” which is stamped upon the face of the- policy, and reads as follows: “ This Company shall not be liable for a greater proportion of any loss or damage to the property described herein than the sum hereby insured bears to eighty percentum (80%) of the actual cash value of said property at the time such loss shall happen.' In case of claim for loss on the property described herein not exceeding five per cent (5%) of the maximum amount named in the policies written thereon and in force at the time such loss shall happen no special inventory or appraisement of the undamaged property shall be required.” This clause is applicable only to a partial loss, and would be totally inapplicable if the policy were to be construed to be only" a valued policy covering a total loss, and since the clause is stamped upon the policy, and not embraced within the printed terms of the standard form of policy, it must be deemed to have been impressed upon this policy with special reference to the subject' insured. It is perfectly competent and not without precedent for a company to issue a mixed policy, open as to one class of loss, and valued as to another (Wood Fire Ins. [2d ed.J § 41), and such we consider the present policy, to be, open as to a partial loss and valued as to a total loss. The defendant argues that the policy must be construed as only a valued one because of the supposed difficulty of estimating the amount which should be paid for a partial loss, and this leads us to consider whether the plaintiff succeeded in proving his loss. It is manifest that some loss of profit must have accrued from the inability to use or rent the ten apartments, and where there is an evident loss,"the insured- should riot be deprived of indemnity merely because it may be difficult to fix the amount of the loss with absolute precision.' The profit to be derived from such a lease as plaintiff held is measured by the difference between the rentals which he is able to realize from the property, less the rent paid by him plus the expense of running and maintaining the building. The total loss of rentals during the time the ten apart414 ' men-ts were uninhabitable was claimed to be $969.98. This figure • was arrived at by .showing what the -apartments rented for immedi- , ately before the fire (Michael v. Prussian Nat. Ins. Co., 171 N. Y. 28), coupled with proof that the apartments were all rented and occupied at the time of the fire, and were readily rentéd when the necessary repairs had been made, and with proof that the neighbor- ■ hood had increased -rather than diminished in desirability., It was not shown that the cost of maintenance had been decreased by reason of the fire; but. it was- shown that, pursuant to one of the terms of the lease, the rent paid by plaintiff had been reduced by $390. As the evidence stood, therefore, there was enough to have-justified the jury in finding that the plaintiff had sustained á loss of profits to the extent of $579.98. .. Of course, upon a retrial, other evidence may be introduced reaching a different result. ■ We are,, therefore, of the opinion that the policy covered a partial loss of profits; as . . ■well as á total loss, and- that the evidence showed not only that there had been a loss,-but, with reasonable precision, what'that loss amounted to. ' It follows that the complaint should not have been dismissed, and .- the judgment, appealed from must be reversed and a new trial granted, with costs to- appellant to abide the event. . Patterson, P. J., Houghton and Lambert, JJ., concurred:; McLaughlin, J., dissented. ■