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City of New York Fire Ins. Co. v. Chapman

March 26, 1935

CITY OF NEW YORK FIRE INS. CO. ET AL.
v.
CHAPMAN ET AL.



Appeal from the District Court of the United States for the Western District of Wisconsin; Patrick T. Stone, Judge.

Author: Fitzhenry

Before EVANS, SPARKS, and FITZHENRY, Circuit Judges.

FITZHENRY, Circuit Judge.

This is an appeal from a judgment in favor of appellees upon their motin for judgment on the pleadings on the ground that appellants' answer did not constitute any defense to the complaint. Appellants assign as error the ruling of the court granting appellees judgment on the pleadings and refusing judgment in favor of appellants in accordance with the prayer contained in their answer.

Appellee, Frances B. Chapman, was the owner of a building in Madison, Wis., on which she carried insurance against loss by fire in the appellant companies. The insurance contract was the standard statutory form, provided by section 203.06 of the Wisconsin Statutes, in the amount of $18,500. Appellee Anchor Savings Building & Loan Association held a mortgage on the property, and each of the policies in question contained a mortgage clause making the loss payable to the mortgagee.

A fire occurred in the property on December 29, 1932, doing damage to the extent of 66,486 per cent. An ordinance of the city of Madison, in effect at the time of the issuance of the policies and thereafter, up to and including the time of the fire, provided that wooden buildings within the fire limits, which were damaged to the extent of 50 per cent. or more of their value, should not be repaired but demolished upon the order of the commissioner of buildings. In accordance with this ordinance, the commissioner ordered the building demolished.

The provisions of the Wisconsin statute pertinent to the question before us are as follows:

"Section 203.01. * * * In consideration of the stipulations herein named and of . . . dollars premium does insure . . . and legal representatives, to the extent of the actual cash value (ascertained with proper deductions for depreciation) of the property at the time of loss or damage, but not exceeding the amount which it would cost to repair or replace the same with material of like kind and quality within a reasonable time after such loss or damage, without allowance for any increased cost of repair or reconstruction by reason of any ordinance of law regulating construction or repair * * * against all direct loss and damage by fire. * * *

"Section 203.21. Whenever any policy insures real property and the property is wholly destroyed, without criminal fault on the part of the insured or his assigns, the amount of the policy shall be taken conclusively to be the value of the property when insured and the amount of loss when destroyed."

Appellants demanded an appraisal which was participated in by appellees under reservation of their right to assert that the appraisal was of no effect since the property was wholly destroyed within the meaning of 203.21, Wisconsin Statutes, so that the amount of insurance written in the policies was conclusive as to the true value. The appraisers found that the sound value of the property before the fire was $16,150, and the amount of the loss was $10,747.48. Appellants duly offered appellees their respective shares of the loss as fixed by the appraisers, which was refused. Appellees demanded from each of appellants the full face amount of their respective policies. Their demand was refused. All of these facts were set forth in the complaint. The answer of appellants contended that the extent of their liability was determined by the amount of the appraisers' award. Appellees moved for judgment on the pleadings, which was granted, and appellants brought this appeal.

The sole issue is whether the property insured was "wholly destroyed" within the meaning of the Wisconsin Valued Policy Law providing for the recovery of the total amount of insurance "whenever any policy insures real property and the property is wholly destroyed."

The facts of this case are, in all material respects, identical with those in Rutherford v. Royal Ins. Co. (C.C.A.) 12 F.2d 880, 881, 49 A.L.R. 814. In that case the court held that if the fire resulted in a condition which necessitated the destruction of the building, and, because of local ordinances, its repair was made impossible, the insured was entitled to recover as upon a total loss. The court said:

"The rule, as we understand it, is well stated in Corpus Juris as follows:

"If by reason of public regulations as to the rebuilding of buildings destroyed by fire, such rebuilding is prohibited, the loss is total, although some portion of the building remains which might otherwise have been available in rebuilding. So, also, if the insured building is so injured by the fire as to be unsafe and is condemned by the municipal authorities, the loss is total." 26 C.J. 351; Monteleone v. Royal Ins. Co., 47 La. Ann. 1563; 18 So. 472, 56 L.R.A. 784; Hamburg-Bremen Fire Ins. Co. v. Garlington, 66 Tex. 103, 18 S.W. 337, 59 Am. Rep. 613; Larkin v. Glens Falls Ins. Co., 80 Minn. 527, 83 ...


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