Akwai v. Royal Insurance

OPINION OF THE COURT BY

FREAR, C. J.

This is one of the many fire insurance cases that have arisen out of the burning of Chinatown, in Honolulu, on January 20, 1900, by the spread of a fire started under orders of the Board of Health for the suppression of bubonic plague. In this case the only question is that of the measure of the damages, the defendant’s contention being that the building was valueless because it had been condemned as insanitary by the Board of Health.

The fire was started by order of the Board for the purpose of destroying certain previously condemned buildings in one portion of the large block in another portion of which, some distance away, the building, in question was situated. About 10 o’clock in the morning, after the fire was started, the Board *534resolved that all the buildings in this block, including of course the building in question, “the same having been inspected by this Board are in the opinion of this Board infected with plague by reason of many cases of plague having been taking from said block, and in consequence of proximity to a place where a case of plague had occurred, and that it is necessary for the public health and safety that the buildings on said premises should be destroyed and -that it is impossible to render them safe for occupancy by fumigation or other means and that such destruction shall be carried out forthwith,” also that all such buildings, “same having been inspected by this Board, are in the opinion of the Board insanitary, a source of filth and a cause of sickness, and are incapable of being rendered sanitary by fumigation or any other means, and that it is necessary for the public health and safety that the buildings thereon should be destroyed by fire, and that such destruction shall be carried out forthwith.”

These resolutions were made without giving the plaintiff an opportunity to be heard and he was never notified by the Board of their action. No order was given for carrying out the resolution. Meanwhile the fire already in progress got beyond the control of the Eire Department which had it in charge and spread to plaintiff’s building, which was burnt at about 2 o’clock in the afternoon.

The Circuit Court after a trial, jury waived, rendered judg-1 ment for the plaintiff for the full amount of the policy, $1000, and the defendant now comes here on an exception to that judgment as being contrary to the law and the evidence.

It is admitted that the plaintiff ought to recover the full amount of the policy but for the resolutions of the Board of Health. But it is contended that the resolutions are conclusive evidence that their recitals are true and that as matter.of law it is absolutely impossible that a building that is infected with a dangerous disease from 'which the contagion cannot be removed and the prompt destruction of'which is required by the *535public safety can have any marketable, merchantable or other pecuniary value.

The question is so novel that naturally no- cases have been found by counsel on either side directly in point, and so- the arguments have been those of principle and analogy.

The defendant contends in the first place that the general rule, that the measure of damages is the actual value at the time of the fire, applies. But this does not help much. The question remains, what was such actual value in this case? If it was what the building could have been sold for, .it might well be contended that some price could have béen obtained for it, considering that, so far as appears, no one outside of the Board of Health and its agents knew of the resolution, and that intending purchasers, if they. did know of the resolution, might be willing to take.the chance of being able to prevent its execution through judicial proceedings or by persuading the’ Board to revoke or modify it, or might take the chance of being able to recover compensation in case the resolution were executed, especially considering that the building was new and that, so far as appears, no case of plague had occurred in it, and that the resolution was general covering a large area without reference to particular buildings, and that there was at least a question as to 'its validity in view of the facts that it was adopted without affording the plaintiff an opportunity to be heard, that he was never notified of it, that the statute was not complied with by first ordering the plaintiff to abate the nuisance and that the resolution required the abatement to be in a particular way, etc. If the rule of actual value at the time is applicable and the actual value is ascertained in the usual way, that is, as a question of fact, it would seem that the plaintiff would be entitled to recover something, and it is practically conceded that if he is entitled to recover at all he is entitled to recover the full amount of the policy. Burther, the method of ascertaining the value in insurance cases varies according to the circumstances. Bor instance, a removable building on land held under a lease that is about to- expire is valued in cases of this kind *536without reference to the fact that it is worth much less for the purposes of removal. Wash. Mills M’f'g. Co. v. Weymouth Ins. Co., 135 Mass. 503. See also Ostrander Ins., Sec. 182. May, Ins., Sec. 424. The defendant’s proposition seems to be that the building cannot have any value in the eye of the law under the circumstances. Reference to- the rule of actual value does not throw much light on that proposition.

It is further contended that the building could be regarded, after the passage of the resolution, only as a mere mass of infection and a public nuisance and as having ceased to be a building within the meaning of the policy — after the analogy of the case of Nave v. Home Mut. Ins. Co., 37 Mo. 430, in which it was held that there could be no recovery on a policy of fire insurance on a building when the burning did not take-place until after the building had fallen and become1 a mere “congeries of materials.” The cases are not analogous, for in the present case the building still remained a building, aside from the question as to h-ow far it had become infected or a public nuisance. If the building was without value, it was not because it was not a building. The Missouri case was based on the fact that the b-uilding was not destroyed by fire, not that a “congeries of materials” had no value.

The case is likened also to- that of a horse with the glanders, which, it is contended, can have no- value in the eye of the law. This comparison also does not hold. By hypothesis in the case of the horse, it had the glanders, while in the- present case, the question as to whether the building was infected, o-r how much it was infected, is one of the questions in issue. Again, if. the horse had the glanders it would surely die, but if the building was infected, might it not be disinfected? Need it be destroyed? It is also' assumed that a horse with the glanders can as matter of law have no value. On this point that case does not help us out, 'for it at best merely presents in the case of the horse the same question that we have before us in the case of the building. If the horse were insured against death or disease, its value for the purpose of recovery on the policy would of *537course be unaffected by the fact that it had the glanders. Smith v. People’s &c. Ins. Co., 173 Pa. St. 15; Tripp v. N. W. &c. Ins. Co., 91 Ia. 278. And even if the Board of Health had resolved after inspection that the horse had the glanders, that would not make it so and would be no defense for killing the horse, if it in fact was not so afflicted. Miller v. Horton, 152 Mass. 540. And this brings us to the point on which we base our opinion.

Assuming that the building would be valueless if it were infected by bubonic plague or at least if it were infected to such a degree as to require destruction by fire or other means, the resolution of the Board of Health that it was so infected did not bind the owner in the absence of an opportunity to be heard. The statute (P. L., Secs. 877-879) authorized the Board of Health to cause nuisances to be abated. It did not authorize it to destroy that which was not a nuisance or to make or declare that to be, which was not in fact, a nuisance. Its power to destroy depended on the fact of nuisance, and not on the fiat of the Board. The public safety might perhaps require it in the exercise of the police power to proceed without a hearing in a case of emergency. Its judgment, regarded as in the nature of a judgment in rein, might perhaps, unless reversed or modified, determine once for all and as against the whole world the status of the building, that is, that it should be destroyed. But it could not, at least in the absence of an opportunity to be heard, determine that the loss should fall on the owner or bind him as to the intermediate findings upon which the final judgment was based. One such intermediate finding was that the building was infected. See Miller v. Horton, supra; Cole v. Kegler, 64 Ia. 59; Hennesey v. City of St. Paul, 37 Ped. E. 565; Hutton v. City of Camden, 39 N. J. L. 122; City of Salem v. Eastern R. Co., 98 Mass. 431; People v. Board of Health, 140 N. Y. 1.

Of course the mere fact that the Board resolved that the building ought to be destroyed or ought to be destroyed by fire, apart from the question of infection, could not relieve the insurance company, if the building were destroyed by fire before *538the execution of the resolution. An incendiary or a mob might have resolved the same thing but, however probable it might be that the resolution would be carried out, it could not affect the right'to recover on the policy. Indeed, if such a resolution (for destruction, without reference to infection) should be literally carried out by means of fire before the destruction of the building by other fire, that itself would be a loss within the terms of the policy. As we understand it, the contention is, not that the Board resolved that the building ought to_ be or should be destroyed, but that the building was in fact such a nuisance or so thoroughly infected that it ought to be destroyed, that the resolution was the evidence of this fact, and that a thing that was such a nuisance was valueless or worse than valueless. But, as we have seen, the Board could not conclude the plaintiff on that point without notice and an opportunity to be heard, if it could at all.

It is, however, contended that the resolution on this point, if not conclusive, is at least prima fade evidence that the building was a nuisance, and that the presumption arising therefrom was not rebutted. If the resolution were prima fade evidence, it might be a question whether there was not enough to justify a finding that it was overcome, considering that the building was new, that the resolution itself seems to indicate that no case of plague had occurred in it and that the resolution was general covering a large number of buildings en masse. But, however, that may be, in our opinion tire resolution was not even prima fade evidence that the building was so infected as to require destruction. Some of the decisions go' to the extent of holding that the action of a Board of Health or other appropriate civil authority in a matter of this kind after it has been carried into execution is admissible as prima fade evidence for some purposes in an action between the owner and such authorities or their agents, but we do not see how a mere ex parte unexecuted resolution of a Board of Health on an intermediate point, which the Board had no authority to adjudicate as an ultimate, point, could properly be admitted as even prima fade evidence in an *539action in contract between others. See Mossman v. Gov’t., 10 Haw. 421.

W. A Whiting, F. E. Thompson and G. F. Glemons for plaintiff. W. R. Gastle and P. L. Weaver, counsel in another similar case, argued for the plaintiff, by permission. Rolertson & Wilder and L. A. Thurston for defendant.

The exception is overruled and the judgment below affirmed.