New Orleans Real Estate Mortgage & Securities Co. v. Teutonia Insurance

*61On Rehearing.

BREAUX, C. J.

Defendant, through learned counsel, presents a number of points. The argument embraces questions not argued before the application for a rehearing.

Defendant’s contention is that the court erred in holding that plaintiff was not bound by the issues alleged and the proof of loss.

Defendant pleads estoppel by record; further, that there was no good reason for holding that the loss was total, as it was partial.

The difference between the plaintiff and the defendant as to amount is about $7,000, which should, as contended by defendant, be deducted from the total amount heretofore allowed to plaintiff.

Defendant also urges that the city engineer’s decision to take down the walls of the building was arbitrary and unlawful.

Further, that it was not incumbent upon defendant to do further than to protest, as it did, against the acquiescence of plaintiff— against the decision of the city engineer.

The foregoing is a summary of the different grounds for the rehearing.

We insert an outline of the facts.

Plaintiff has prepared plans and specifications to reconstruct the destroyed building, and called for bids to rebuild the building.

To this point there was no serious disagreement between the parties.

The adjusting agent of the defendant insurance company offered to pay the amount admitted by it as due on the basis of estimates of contractors.

From the date of this offer, disagreement began.

It may be that these disagreements would have been adjusted satisfactorily had it not been that the city engineer arrived at the conclusion to have the walls remaining after the fire taken down.

According to defendant these walls had a value. The ornamental iron front wall partieularly. It is variously estimated from $6,-000 to $12,000.

Plaintiff, háving received notice of the decision of the city engineer through counsel, wrote to defendant’s adjuster, notifying him that it would have to claim for a total loss, as the company could not use the iron front wall in question; that the idea for a partial loss was abandoned because of the city engineer’s refusal to issue a permit, permitting the reconstruction of the building.

The defendant, through its agent, took issue with plaintiff about this wall, and said that it should not be taken down. The mild insistence ended with a protest on the part of defendant. There was nothing about it of an insistent character.

Plaintiff informed the defendant through counsel that the protest should be addressed to the city engineer; that the company was coerced. It was obliged to accept the situation.

Some of the witnesses testified • that the front was not seriously injured; others thought differently.

The city engineer’s decision remained as it had been given by him, and his orders were not very much opposed by any one. ,

The defendant, it strikes us, was somewhat mild upon the subject, while it does not appear that the plaintiff very actively opposed the order to take down the walls.

The defendant charges that plaintiff was not anxious to rebuild; that it had offered to sell the property, and that for that and other reasons the decision of the city engineer was cheerfully accepted.

It may have been the subject of the secret prayers of those interested in plaintiff, or their heart’s desire. There is no testimony, however, showing that there was the least influence brought to bear by plaintiff upon the city authorities to refuse the permit.

Plaintiff may have thought of selling the property, or it may have deemed it to its *63interest to construct a different building. The fact that it was its interest is not sufficient, with the testimony before us, to arrive at the most remote inference of an influence brought to bear by plaintiff in regard to the order not to rebuild.

Defendant remained content with its protest before mentioned.

The walls were taken down.

The iron front wall, the one that gives rise to the serious objection, was standing on the line of the sidewalk.

The city engineer refers to it as dangerous and threatening, and after the demolition of the side walls said that this front was left without support, and that it was a menace to the public, and for that and other reasons he ordered the front wall taken down.

The evidence is somewhat conflicting.

On rehearing we will not recall that' which has been decided upon this particular point, as we do not think that it is determinative of the issues.

The binding effect of plaintiff’s petition and its proof of loss, which presented an issue other than that the wall was taken down because it was a menace to the public, is referred to by learned counsel for defendant as a reason not to decide the issue alleged, and not another issue not alleged.

For reasons we will state later, when we will consider the city ordinances in regard to reconstructing buildings, we do not look upon this defense as controlling. But at this time we will remain content, in regard to this point, with the statement that the evidence introduced to prove the grounds upon which the city engineer based his refusal to permit the rebuilding of the building on the portion of the wall standing having been admitted without objection, under repeated decisions of this court, an issue is made by the testimony, which is now before us for decision.

Effect is given to evidence which is germane to the issue admitted without objection.

It does not appear that a change has been made in the issues particularly prejudicial to the defendant. At any rate, there is no good reason for a rehearing on that ground.

To quote an illustration in defendant’s brief:

A state of fact lettered A is admitted to prove an issue, which not only proves it, but overlaps another issue lettered B. The court cannot decide the case on the issue lettered B, by reason of. the fact that it is not germane, but entirely foreign, to the issues of the case.

We wish to answer that defendant, in not objecting to evidence introduced to prove issue lettered B, permitted evidence which goes to prove some demand which the evidence lettered A goes to prove.

The letter B represents an additional right to the same defense.

We would not thus particularize were it not that the premise predicated of the foregoing is made to do service in regard to another point. That point is that the lack of allegation was jurisdictional, that there was no due process of law, and that the plea of estoppel should be sustained.

After giving consideration to these different grounds, we have found ourselves unable to give them our sanction. We do not think that any of those pleas should be maintained.

To go further into the case, the policy of insurance sued on contained the following clause:

“This company shall not be liable for loss, caused directly or indirectly by order of any civil authority.”

The policy was borrowed from the New York standard fire policy. A statute of our Legislature (Act No. 105 of 1898) made the standard policy a part of the insurance plan here. This subject will be discussed later.

Now as to the proof of loss: There was no suggestion in the proof of loss that the authorities ordered the walls to be demolish*65ed because they were a menace to tbe public. Tbe order referred exclusively to ordinances requiring fireproof buildings to be put up. and substantially stated that the city authorities objected to a new building constructed of the same material and of the same fashion as the old building, and based their objection upon town ordinances to that effect.

Learned counsel for plaintiff, in drafting his petition, took for basis the requirements of the city ordinances in matter of reconstructing destroyed buildings, and substantially alleged that it, plaintiff, could not do otherwise, because of these ordinances, than accept the situation and 'insist upon a total loss.

The petition, as before stated, being limited to the point stated, defendant seeks to hold plaintiff to the allegation, and objects to the consideration of any issue arising from the testimony offered to prove that the city had ordered the walls to be taken down, because they were a menace to the public; dangerous to life; that this additional ground should not have been considered at all; that the plea of estoppel, and all the other pleas before stated, were a complete bar to the consideration of the last-mentioned point.

Plaintiff’s proof of loss contained a lengthy and detailed statement of the action of the city authorities in ordering it not to seek to use any part of the remaining walls. Plaintiff stated in this proof of loss, substantially, that, on account of the peremptory order of the city authorities not to seek to rebuild the building as it was before the fire, it had been compelled to abandon the thought of reconstructing the building as it was before.

There was no suggestion in the proof of loss that the authorities ordered the walls to be demolished, because they were a menace to the public.

Another contention of the defendant is that the condemnation of the walls was not legal by reason of the fact- that it- was not by the street commissioner, as it should have been, but by the city engineer.

The ordinances upon the subject are not very clear, it is true, but, taken as a whole, the city engineer seems to be vested with authority to condemn walls to be taken down, or, in case of violation of city ordinances, he can issue an order to prevent such violation in matter of reconstructing buildings.

We do not attach importance to the difference sought to be made between the action under the ordinance of the city and orders given by the fire department to take down a dangerous wall.

It is true that the policy contains a clause, before quoted, which seeks to limit the liability of the insurer; that is, that the insurer will not be held liable for the acts of the civil authorities, quoting from that portion of the policy quoted above.

But this law, in our view, has been repealed. It was adopted, we have seen, in 1898. In 1900 the Legislature of this state adopted the valued policy law (Act No. 135 of the session of the Legislature).

'There is a conflict between the New York standard policy and the valued policy of 1900, for a valued policy statute does not confer a personal privilege which may be renounced.

The statute is one adopted as a measure of policy.

Without this clause to limit defendant’s liability, the defendant has scant ground in its defense.

The city’s arbitrariness in the premises is not evident.

It must be remembered that the motive was protection, to the end of diminishing fires and reducing the rate of insurance.

A familiar adage comes in properly enough: Salus populi suprema lex est. Observed with intelligence and moderation, it should not be condemned.

*67In one of the cases that we have had occasion to consult, under the valued policy statute, the insured had agreed in their policy in case of loss to let the loss be adjusted by arbitration. The court held that the valued policy law must prevail.

The valued policy is controlling, as it is a measure in public interest and in order to secure greater certainty in the contract of insurance.

In one of the decisions cited, infra, it was held that the valued policy statute must be regarded as a part of the policy of insurance, and the amount written in the policy as liquidated damages agreed upon by the parties, and that this is so, notwithstanding the policies inconsistent therewith.

Again, in another policy, it was decided, where a subject of fire insurance was real property, that the agreement between the company and the assured that the property should be considered personal was invalid, as in violation of the valued policy.

These points are sustained by the following decisions: Western Assurance Co. v. Phelps, 77 Miss. 625, 27 South. 745, a decision directly in point; Queen Insurance Co. v. Leslie, 47 Ohio St. 409, 24 N. E. 1072, 9 L. R. A. 45; Word v. Southern Mutual Insurance Co., 112 Ga. 585, 37 S. E. 897; Havens v. Germania Fire Insurance Co., 123 Mo. 403, 27 S. W. 718, 26 L. R. A. 107, 45 Am. St. Rep. 570.

Not having succeeded in our researches in finding a single decision to the contrary than that before expressed, and these views being of a convincing character, we must hold that the standard policy statute is repealed by the valued policy statute.

An attempt to limit the insurer’s liability in conflict with the valued policy statute cannot be of any avail.

Something has been said about the mill type construction ; that under the ordinances such a construction was possible, and that the building might have been reinstated under these ordinances without tearing down the front wall.

In the name of the plaintiff company, it was represented to the city department in charge that the new building would be constructed of the same material and after the same fashion as the old.

To this application the officer in charge replied that he could not consent to such a construction, for the reason that it would be in contravention of the public building law.

This excludes the possibility of erecting a new building on the remnants of the old, which we must hold, under the valued policy law, was a total loss.

In concluding, if there was danger, or if the parties were exposed to damages if the wall had. fallen, the plaintiff would have-been liable in damages.

That was decided in the Werlein Case, 42 La. Ann. 1046, 8 South. 435, 11 L. R. A. 361.

The court said that it was the property of plaintiff that might have been held in damages in case of damage by its fall.

For similar reason, in case of a fall and damages in this suit, plaintiff would have been liable.

For that reason it was proper not to incur the risk, but reasonably comply with the requirements of those in charge of the fire-department of the city.

Plaintiff, in its petition on appeal, called attention to the fact that in the district court, although at first the Macheca Building Company was made one of the plaintiffs, that it was paid, and afterward, by order of the court, its case was discontinued..

The judgment will therefore be amended accordingly.

It is ordered, adjudged, and decreed that our judgment be reinstated; that it is amended by striking out the name of theMacheca Building Company; and that plain*69tiff, New Orleans Real Estate Mortgage & Securities Company remain as plaintiffs; and, as amended, the judgment is affirmed.