Plaintiff's action was one to recover damages for the destruction of two of its buildings by fire, which buildings the defendants had agreed to insure in a sum equal to 75 per cent. of their value. The recovery was had on that provision of the lease in which it is stipulated
"that buildings, equipment, tools, etc. . . . as shown on inventory attached . . . shall be left . . . in the same condition . . . and in case of loss or unreasonable damage lessees . . . agree to compensate lessor. . . ."
I think this provision of the lease and the one providing for insurance up to 75 per cent. of the value of the buildings should be construed together. One is an agreement to compensate the lessor in case of loss of buildings, and the other fixes and limits the amount of the loss the lessees should be liable for after deducting insurance. The obligation to secure insurance was on the lessees-defendants, but before they could secure it, it was necessary to identify the property to be insured and to fix its insurable value. These facts should first be ascertained before the insurance was procurable. Whose duty was it under the agreement *Page 466 to identify the property? I think but one answer can be made. The lessor, of course, should identify the property it is leasing in the lease. This the lessor failed to do. No inventory of buildings was attached and no insurable values shown, nor can I find in the record anywhere that it was understood that the furnishing of inventory should be done later or that it should be furnished by the lessees.
The lease does not provide how the insurable values of buildings should be determined but I think it implicit in the agreement that the parties should confer on that matter since, whatever values were placed on property, it would affect the lessor's damages and also the lessees' liability in the event of loss.
I think the loss sustained by reason of not having insurance should be borne by the one whose fault it was the buildings were not insured.
The evidence, without contradiction, shows the plaintiff did nothing toward furnishing inventory or in fixing values. It shows that on September 26th or 27th the defendant Charles W. DeMund went from Phoenix to plaintiff's mining property at Stanton, Arizona, and took along with him Russell Peabody, an insurance agent with offices in Phoenix; that he and Peabody picked up Eugene S. Upton, secretary of plaintiff, at Wickenburg, and that the three of them went upon the property and listed the buildings and placed thereon tentative values for insurance purposes; that on October 2d, at the suggestion of Eugene S. Upton, the inventory was mailed to his father, G.B. Upton, president of plaintiff, with a letter of explanation reading as follows:
"Dear Mr. Upton:
"Mr. Eugene Upton and the writer went to the mine a few days ago, with an insurance man whom I brought from Phoenix. We listed the property to be covered by fire insurance, and after returning to Phoenix we *Page 467 put tentative valuations on the various buildings and contents.
"The insurance man stressed the fact that it is useless to insure for any more than an adjuster or a board of arbitration would allow in case of a fire, as heavy depreciation is applied on buildings on mining property. He helped me in the valuations on the various items, and I will appreciate it is you will check over the values shown on the attached sheet, making any changes that you believe to be advisable and return it to me. . . ."
On October 13th the defendants, receiving no response, again wrote the plaintiff's president as follows:
". . . We have not heard from you as yet in reply to our letter regarding valuations of fire insurance. Possibly you did not receive the letter. Kindly let us hear from you in this regard."
On October 15th plaintiff's president wrote defendants about the values placed on the buildings in the inventory of October 2d, in which letter he said:
". . . Expected to see you regarding the insurance. It is all right on most of the buildings, but much too low on the boarding house and mill. . . ."
Upton, in his letter of October 15th, placed the value of the boarding house at $400 instead of $75, but made no complaint of the value of $50 for cook's dwelling. This letter was not received by defendants until October 18th and in the meantime, during the night of October 17th or early morning of the 18th, fire destroyed the two buildings that are the subject of this action.
Russell Peabody, the insurance agent, testified that at the time he went to the property he was to place insurance on it "as soon as we could determine the values as of this September date (26th or 27th). We couldn't get any values, so no insurance was placed. . . ."
From all the evidence it is apparent to me the defendants wanted fire protection; that they took the *Page 468 initial steps to get it in ample time before the fire if plaintiff had exercised any diligence at all; that the reason they did not have insurance was because plaintiff neglected an unreasonable time to answer defendant's letter of October 2d and failed to co-operate with defendants in fixing insurable values or in furnishing an inventory of buildings to be insured. If it should be asked, How can it be known that defendants would have secured insurance if plaintiff had acted promptly and had co-operated in fixing values? the answer is no one can know. However, if the plaintiff had acted with diligence and the defendants had failed to secure insurance, the loss would be due to their fault and they should stand it. Here, however, defendants acted in sufficient time to have secured insurance before the fire. The insurance agent was taken to the property and had examined and approved it as a risk and was ready and willing to issue a policy when the values were agreed upon. The reason they were not agreed upon before the fire was, as I see it, the fault of the plaintiff. The defendants promptly insured the rest of the buildings upon receipt of plaintiff's letter of October 15th.
Since, clearly, it was the fault of plaintiff that no insurance was obtained before the fire, I think plaintiff's judgment should have been for the value of the buildings as found by the court, to wit, $600, less 75 per cent. thereof, the agreed insurable value, or for $150 only. A modification of the judgment to this effect, in my opinion, would be not only just but legal. *Page 469