Teague v. Germania Fire Insurance

STONE, J. The single question presented in this record is as to the measure of the plaintiff’s right of recovery. The right to maintain the action is not denied. ■ The plaintiff had a stock of goods in store, partially covered by insurance. The value of the goods at the time of the loss was something over $9,000. They were covered by two policies of insurance — one issued by the .¿Etna Insurance Company, in the sum of $5,000, and the other by the appellee insurance company, in the sum of $2,000. Total of insurance $7,000— or, about 7-9ths of the value of the goods. The fire originated in a store near by, and thus imperiled the plaintiff’s goods, whose store it was approaching. The goods sustained damage to a sum exceeding $900, partly by being burned, but chiefly in the removal. The plaintiff below — appellant here — c. ntends that inasmuch as the loss falls below the gross amount' of insurance, he should recover the full measure of his loss. The policies issued by each of the companies in which plaintiff had obtained his insurance, contained clauses substantially as follows: “ XII, . . In case of any other insurance, whether made prior or subsequent to the date of this policy, the assured shall be entitled to recover of this company no greater proportion of the loss sustained, than the sum hereby insured bears to the whole amount insured thereon.” “ XYI. When property insured by this company is damaged by removal from a building in which it is exposed to loss by fire, the damage shall be borne by the insured and insurers, in such proportion as the whole sum insured bears to the whole value of the property insured.” The charge of 'the court was, that as to the damage done by the removal, the plaintiff could only recover in that proportion which the sum insured bore to the whole value of the stock of goods. In other words, that when partial insurance was taken, the insurance company assumed the risk, not on any defined Or definable portion of the stock, but on an undivided proportion of the whole stock — the proportion which the sum of the insurance bore to the value of the whole stock. The insured took the rest of the risk; that is, he took the risk of that proportion of the undivided stock which was in excess of the insurance. He stood in the relation of insurer, or risk-taker for that excess, to the same extent, as the insurance company stood to the proportion or percentage of the goods which were covered by the insurance. Such is the plain, unmistakable language of the policy, and such, as we understand it, is the universal rule of adjusting indemnity, in cases of partial damage to merchandise, paftially covered by insurance. To hold otherwise, would not only be to ignore clause [475] XYI of the policy, but would lead to tlie following result: One partially insured, paying a smaller premium, and suffering a partial damage, just equal to the sum*of his insurance, would recover the same amount of indemnity as another would, having the same amount of insurance, although the latter sustained a total loss. Thus: Two merchants, each carrying ten thousand dollars of stock, and each insured for five thousand dollars. One sustains a total loss, and the other a damage equal to fifty per cent. According to the contention, each should obtain the same amount of indemnity. This would he to hold that the goods lost or damaged were those covered by the insurance, while those saved were those on which the owner had no insurance, hut was carrying the risk himself. We can not assent to this, under the language of the policy we are construing. In Peoria M. & F. Ins. Co. v. Wilson, 5 Minn. 53, Qiíbpre-cise question was considered, and was decided as we have declared above. See, also, Barber’s Princ. of Ins. § 163. There is an admitted dearth of authorities on this question; possibly, because the interpretation of such policies has not often been disputed. The judgment of the Circuit Court is affirmed.