
    The Milwaukee Mechanics’ Insurance Company v. Russell.
    
      Fire insurance policy — Condition therein purporting to give insurer option to rebuild — In case of total loss — Is repugnant to Section S6If3, Rev. Stat. — Refusal of insured to furnish plans constitutes no defense to insurer, when — Construction « of statute.
    
    1. A condition in a policy insuring a building against loss or damage by fire, which purports to give the insurer the option to rebuild in case of total loss, is repugnant to Section 3643 of the Revised Statutes, and void.
    2. Refusal of the insured to furnish plans and specifications for rebuilding, and to permit the insurer to rebuild, constitutes no defense to an action for the- recovery of such loss.
    (Decided November 19, 1901.)
    Error to the Superior Court of Cincinnati.
    The Milwaukee Mechanics’ Insurance Company, through its agency in Cincinnati, issued to Julia A. Russell, on the 12th day of August, 1896, in consideration of a cash premium then paid by her, a policy of fire insurance on her dwelling house situated in Hamilton county, in the amount of seventeen hundred and fifty dollars, for the term of five years ensuing. The house was totally destroyed by fire on the 10th day of September, 1898, the policy then being in force, and in due time the insured made proper proofs of the loss, and demanded payment, which having been refused, the action below was brought to recover the amount named in the policy. The averments of the jetition, which are the usual and necessary ones in actions of that character, were, on the hearing of the cause, admitted to be true, and the only defense relied on was, that the plaintiff refused to accept an offer made by the insurance company to perform a stipulation contained in the policy which purported to give it the option to rebuild the house, and declined to furnish plans and specifications, as required by that stipulation, to enable the defendant to rebuild; the offer having been made, it was alleged, in the time and manner provided by the policy. A demurrer to that defense was sustained in special term, and judgment rendered for the plaintiff for the amount of the policy and interest, with costs; and from the affirmance of that judgment in general term, err*»r is prosecuted in this court.
    
      J. Hartwell Cabell, for plaintiff in error.
    The question presented in this cause arises out of the ruling upon the demurrer to the insurance company’s second defense. The correctness of this ruling depends upon the force and effect to be given section 3643, Revised Statutes, commonly known as the “Howland Law,” being the first section of the act of March 5, 1879. (Section given in the opinion.)
    If the law is to be construed as inconsistent with the clause of the policy allowing the insurer at his option to rebuild, repair or replace the lost or damaged property, the act of the legislature is superior to the act of the parties and the demurrer was properly sustained.
    If, on the other hand, the provision of the policy in controversy does not defeat the purpose of the law and does not conflict with the reasonable intendment of its language taken as a whole, then the contract between the parties defines their rights and the demurrer should have been overruled, for, as the Supreme Court of Maine, referring to a similar law, has said :
    “Said chapter simply annuls the provisions at variance with its requirements, leaving the policy in all other respects in full force. Emery v. Insurance Co., 52 Me., 322.
    The part of the statute which concerns our inquiry contains two provisions:
    (a) That the insurer shall cause the building or structure to be examined, and the insurable value i hereof to be fixed.
    (b) That in case of total loss in the absence of fraud or increase of risk, the whole amount mentioned in the policy upon which the insurers receive a premium shall be paid.
    Before taking up the statute by its four corners, let us consider its history.
    This law, technically known as the “Valued Policy Law,” was enacted March 5, 1879, and follows in its general scope a similar law enacted by Wisconsin in 1874. This latter was the pioneer in the movement and has been followed by some twenty other states.
    These statutes were all aimed at a then existing evil of an indiscriminate soliciting of insurance on farm property, by unsrupulous agents of unprincipled companies who furnished printed application blanks containing stipulations to catch the unwary, and issued policies of the same character.
    The agent induced by high commissions, of cour- je sought to contract for as large a risk as he could and his company actuated by the same motives were willing to aid him in his endeavor. The natural result was over-insurance, and numerous losses. In his endeavor to realize on his policy, the insured encountered those pitfalls prepared for him in his application and in the printed conditions of his policy. It was to avoid the insidious features of such a system, that this statute was passed.
    The “open” policy which this statute converts into a “valued” policy contained provisions that the sound or actual value of the property only is to he paid. After each fire there accordingly followed a controversy between the parties to the contract of insurance, as to what was the sound or actual value. The company would take advantage of various clauses providing for inspections, appraisements, arbitrations, etc., for the purpose of complicating the adjustment of the loss with a view to securing an abandonment of his claim by the assured or of baiting him into an advantageous compromise. These were the evils against which the statute was directed. How effective it has been can best be judged by the comment of the insurance commissioner of Ohio on his statistics showing the increase of losses by fire since tbe enactment of this law. It concludes as follows:
    “I have no hesitancy in believing that over-insurance, sanctioned and encouraged by the valued-policy Jaw, is the cause of the greater portion of this increased fire waste, and that this unnecessary waste will continue to grow worse so long as this statute remains a part of our insurance code.”
    The state insurance commissioner of Michigan is no less emphatic in his condemnation of this law.
    Now taking the statute as a whole, let us say that being remedial it should be liberally construed so as “to suppress the mischief and advance the remedy.” How we can do this, it must be confessed, is a matter of insurmountable difficulty. For by “advancing the remedy” as contended for by tbe plaintiff, we are only giving encouragement to the mischief.
    The crying mischief is over-insurance with its attendant evils of snares and pitfalls prepared for the unwary insured in the concealed technicalities of the printed conditions of the policy. The remedy proposed is to release the insured from every term of the policy which would tend to enable the insurer to secure the desired result by co-operation with the insured, and to put the insurer in an attitude of hostility which is conducive to anything but good faith on the part of the insured, by subjecting the latter to the temptation of collusion with the insurance solicitor to do the very thing which the statute is avowedly intended to prevent.
    The remedy proposed is to convert the old-time legitimate contract of indemnity in case of loss by fire into a pure wager contract, a form of agreement upon which the law has frowned from time immemorial. It becomes a wager with all the odds on the side of the insured with the additional evil that there is a temptation to realize on his wager by his own fraud.
    The inducements to prevent and avoid over-insurance are certainly sufficiently great on the side of the insurer who is in the market to sell indemnity and not to make wagers that the insured will not destroy his property. The value of an indemnity can be estimated but the chances involving a man’s moral conduct are beyond the range of mathematics.
    Taking these matters into consideration, what will be the most “liberal” construction we can give this statute? It is submitted that giving the defendant in error the benefit of all the liberality justifiable by the doctrine of advancing the remedy and suppressing the mischief, the limit should be confined to the lines laid down in Insurance Company v. Leslie, 47 Ohio St., 409.
    Every object of the statute is accomplished by confining its operation to rendering void the clauses and conditions adjudicated on in this case and kindred clauses and conditions, and fixing the measure of the company’s liability. There is no necessity for extending the statute to fixing the mode of discharging the liability. There is certainly nothing inconsistent with either the letter or spirit of the statute, in a clause by which the insured agrees to accept something else than money in discharge of this liability fixed by the agent and by operation of law. A contract of insurance being in its inception and object a contract of indemnity, how could it better accomplish its purpose than by restoring the insured to his condition before the loss? Reiley v. Insurance Co., 7 Ins. Law Journal, 391.
    While we are still on the subject of liberal construction of the statute, let us consider the clause relating to total loss in connection with the clause relating to partial loss.
    Counsel for the defendant in error will hardly contend that the term “shall be paid” has a different meaning in the one clause from its meaning in the other. The practical construction placed upon the clause giving the insurer an option to repair or pay a partial loss has invariably been in harmony with the view of its consistency with the statute. As to the words themselves, they can not mean one thing here and another thing there. If “shall be paid” in the one instance must mean “shall be paid in money,” it must also mean “shall be paid in money” in the other instance. If a liberal construction necessitates supplying the words “in money,” the result is that while, on the one hand the statute is effectual to obviate the evils of “arbitrations, valuations, appraisements, etc.,” it has, on the other hand, the paradoxical effect of forcing the insured into the very mischief from which it seeks to save him.
    Where, in accordance with common practice, common sense and a reasonable construction of the statute, a partial loss could be adjusted by a carpenter in a few hours, the liberal construction contended for would require the parties to be plunged into the technicalities of appraisements and valuations.
    Again, the assertion that the words “shall be paid,1’ as used in the statute, by the rules of hermeneutics necessarily means a money payment is refuted by the Supreme Court of Ohio. Good v. Insurance Co., 43 Ohio St., 394; May on Insurance (3 ed.), Sec. 426; Tolman v. Manufacturers Insurance Co., 1 Cush., 73.
    It is submitted that the terms of the statute do not exclude rebuilding as a method of payment of a total loss any more than they exclude repairing or replacing in case of a partial loss. The clause allowing the latter being admittedly consistent with the statute it follows that the part of the same clause allowing a rebuilding is no less consistent.
    Having considered the statute as remedial and having endeavored to interpret it by proceeding from that point of departure, let us consider it in another light-,. Ostrander, on Fire Insurance (3 ed), 53 0, says:
    “But it (the statute) also contemplates an abridgement of the natural rights of the parties concerned to make contracts, and with such effects these laws should be strictly construed.”
    So far as the purpose of the legislature is revealed as to limiting this right, that purpose is supreme, and as long as it does not conflict with constitutional rights no court has power to interfere. But you can refuse to extend the application of the law beyond its obviously necessary boundaries, and you can refuse to read into the act, purposes or intentions which might or might not have been in the minds of the legislators. Yea, you must refuse to extend it even to circumstances which you know to be within the intention of the prohibition, where the terms of the statute fail to include them.
    So far, no case has been before the Supreme Court of Ohio, which might lead it beyond the legitimate confines of the law. In Insurance Co. v. Leslie, supra, cited and relied upon by the defendant in error, the court has said that by law “persons whose buildings are insured receive protection against the injustice resulting from mere technical defenses, founded upon many conditions inserted in the policy formerly resorted to.” “Sound values,” “appraisements,” and “arbitrations” and their accompanying evils and delays are legislated and adjudicated out of the way. But while there are several dicta which would seem to make the valuation an absolute liquidated obligation that could be discharged only by a money payment, they are only dicta, and there is not a word in ihis decision that compels or justifies the inference that an agreement to permit the insurer to place the insured in statu quo ante, is inconsistent with a fixed valuation. This also applies to all other Ohio cases in which this statute has been passed upon.
    No valuation can be such as will meet the exigencies of fluctuation, deterioration and spoliation however permanent in its character the subject of the valuation may be. As well might it be contended that a replacement clause is inconsistent with the other terms of an “open policy. As long as fire insurance contemplates indemnity and not a wager, what more desirable term could be inserted in a policy than that which would enable the insurer to indemnify in the most perfect form of indemnity, to-wit, restoration.
    In support of his contention that the statute should be construed to exclude a rebuilding clause, counsel for the defendant in error cite a series of Wisconsin cases, all of which, it is submitted, if limited to the question before the court, reach the same result as the Ohio cases.
    The court was there called upon to deny arbitrations and valuations, but it was not called upon to pass upon the validity of the rebuilding clause. Like the Ohio cases, while they contain passages whieh seem to say that the only method of discharging the obligations arising out of a total loss is by a money payment of the amount which the statute declares shall be the “measure of damages,” they contain no suggestion that the rebuilding clause is inconsistent with either the purpose or letter of the statute. The cases referred to are: Reiley v. Insurance Co., 43 Wis., 449; Thompson v. Insurance Co., 43 Wis., 459; Thompson v. Insurance Co., 45 Wis., 388; Baumwessel v. Insurance Co., 43 Wis., 463; Oshkosh Gas Co. v. Insurance Co., 71 Wis., 454.
    The statute construed in these cases is our own almost verbatim, and, as pointed out above, none of these cases show that the words “shall be paid” are to be regarded as mandatory rather than directory or discretionary at all events. We submit that while the statute does make the amount of the policy a liquidated claim so as to compel the insurer to pay that amount and no other if he elects to discharge the claim by a money payment, it does not present any obstacle to an agreement that the insurer may-elect to indemnify by replacing the lost property.
    
      The only case directly in point upon which counsel for the defendant in error relies is Insurance Co. v. Levy, 33 S. W. Rep., 992.
    We submit that this is a non sequitur even in view of the Texas statute. There is nothing inconsistent with the statute in an agreement of the parties to make “chips and whetstones or another house” a good discharge of this “liquidated damage” if the parties so choose to make them.
    The practical construction, however, of the partial loss clause of the Ohio statute, as has been shown above negatives the idea that money alone can discharge the insurer’s obligation.
    As to what the statute prohibits the court is perfectly correct, but as to the other propositions there may well be some doubt.
    There is no endeavor to “scale a debt” in exercising an option to rebuild. It is pure and simple a payment according to the agreement of the parties, an agreement which we contend is perfectly consistent with the statute.
    Were the statement true in fact that “the insurer agreed to pay the amount of the policy whether the house was worth much or little” there would be an end to the controversy. As a matter of fact the insurer agrees to pay in money, only the actual loss. But the statute says if you pay in money you must pay the full amount of the policy and no other amount. This is the object of the statute and it seems difficult to conceive wherein the construction asked for paralyzes it in the attainment of this object.
    The learned judge has conceived the statute to convert every contract of insurance into a wager as to total losses and leave it as a contract of indemnity as to partial losses. The parties have, however, retained in it, terms which leave it in the class free from the odium attaching in law to every wager. We submit that they have done so consistently with the statute, and that as long as real indemnity is at-, tained, they should be encouraged in this direction.
    But the court of civil appeals of Texas has not been entirely consistent in its attitude on this “rebuilding” clause. In Insurance Company v. Woodward, 45 S. W. Rep., 185, there had been an offer by the insurance company to “repair” the damaged building, but it having been found by special verdict that the loss was total, it ivas held that the tender should have been to “replace,” not to “repair.” This necessarily implies that the parties could contract for such replacing consistently with the statute. But how the court can arrive at this conclusion consistently 'with their decision in Insurance Co. v. Levy, 33 S. W. Rep., 992 (which is not even mentioned), is hardly clear.
    One point which seems to have had great weight both with the legislature and with courts passing on this law, is that the insured having paid premium on the full amount of the policy is entitled to receive that amount.
    How very specious this argument is, becomes ridiculously apparent when Ave consider the contract of insurance, the terms of which provide that the limit of the liability of the insurer shall be the amount of the policy and that the losses shall be paid according to Avhat they actually are, up to this limit. That the insured has contracted for a greater amount of indemnity than he needs is no reason why any loss he has suffered should be magnified up to the limit of the insurer’s obligation to indemnify him. If I buy more of an article than I can use I am the loser of so much as goes to waste on my hands. It is plain, therefore, that the insured is paying for just what he gets, no more and no less. • This fact is still more apparent in the light of the authorities which hold that in case the company replaces the property, the policy remains in force as to so much as the replacing cost less than the amount of the policy. Trull v. Insurance Co., 3 Cush., 263; Haskins v. Insurance Co., 5 Gray, 432; Ryder v. Insurance Co., 52 Barb., 447; Berche v. Insurance Co., 31 Mo., 546; Aetna Ins. Co. v. Phelps, 27 Ill., 71.
    And if the rebuilding cost more than the amount of the policy, after having once elected, the company is nevertheless bound to abide by its election. Morrell v. Insurance Co., 33 N. Y., 429; Beals v. Insurance Co., 36 N. Y., 522.
    These cases show conclusively that, in its ordinary form and under a form of policy such as the one in this cause, fire insurance is a contract of indemnity, and not a wager. Reiger v. Insurance Co., 69 Mo. App., 674.
    In the last cited case while it is not clear from the report what the pleadings were, it is nevertheless clear that the court did not disapprove of the rebuilding clause of the policy. At the time this decision was announced there .was on the statute book of Missouri a section (Sec. 5897, Rev. Stat., 1889), headed, “Full amount of policy to be paid,” broader than the Ohio law because it extends as well to personal property as to real.
    In conclusion, the foundation of the law has been declared to be “public policy” (Insurance Co. v. Leslie, 47 Ohio St., 409), and rightly so declared. A construction that should be given. If the suppression of fraud and at the same time preservation of property is the aim of this “public policy,” we submit that a rejection of the construction we contend for invites its violation, encourages fraud and incendiarism and burdens the insuring public with the results. Where one would be financially benefited a thousand are injured.
    
      A. J. Cunningham, for defendant in error.
    The part of the statute to be considered in the consideration of the questions raised by the demurrer, contains four provisions:
    First. That the insurer shall cause the building or structure to be examined by an agent of the insurer.
    Second. And a full description thereof to be made (by such agent).
    Third. And the insurable value thereof to be fixed by such agent.
    Fourth. In the absence of any change increasing the risk without the consent of the insurers, and also of intentional fraud on the part of the insured, in case of total loss the whole amount mentioned in the policy or renewal upon which the insurers receive a premium, shall be paid.
    The terms of this statute “are plain and unambignous” and the evil it was intended to remedy is well described by the attorney for defendant in his brief herein. He says:
    “As an existing evil of an indiscriminate soliciting of insurance by unscrupulous agents of unprincipled companies who furnished printed application blanks containing stipulations to catch the unwary, and issued policies of the same character. The agent induced by high commissions of course sought to contract for as large a risk as he could, and his company-actuated by the same motives were willing to aid him in his endeavor. The natural result was over-insurance and numerous losses. In his endeavor to realize on his policy the insured encountered these pitfalls prepared for him in his application and in the printed conditions of his policy. It was to avoid the insiduous features of such a system that this statute was passed. Th'e policy contained provisions that the sound or actual value of the property only is to be paid for. After each fire there accordingly followed a controversy between the parties to the contract, of insurance as to what was the sound or actual value.
    “The company would take advantage of various clauses providing for inspections, appraisements, arbitrations, etc., for the purpose of complicating the adjustment of the loss with a view to securing an abandonment of his claim by the assured, or of baiting him into an advantageous compromise. These were the evils against which the statute was directed.”
    The language of the foregoing section is so plain and unambiguous that no two or uncertain meanings can be placed upon it, therefore no construction is required.
    We think that the Supreme Court of Ohio, in the ease of Insurance Co. v. Leslie, 47 Ohio St., 409, has clearly said that the language of said section 3643 “is plain and unambiguous;” that it is to be taken in the ordinary sense and meaning.
    The petition in the case at bar is in substance the same as in the Leslie case, and the court held said petition to be good, in sustaining the verdict and judgment in said case.
    The court say, that in the decision of the Leslie case it became necessary to determine the effect of the legislation (Sec. 3643) of this state, on the policy in question, and then proceeds to determine said effect and the following was so determined. On page 414, the court say, “that said statute entered into and became part of the contract of insurance, fixing the measure of the obligation created by it, and controlling its construction and operation. The purpose and scope of the statute are not doubtful. Its terms are plain and unambiguous, and the evil it was intended to remedy is apparent. The responsibility is thus cast upon the company of determining by such examination whether it will insure the building and for what sum. Hence the statute very wisely provides that i f the loss be total the “company shall be liable for the whole amount named in the policy.” Insurance Co. v. Leslie, 47 Ohio St., 409, et seq.
    
    We call the attention of the court to the cases cited in the opinion in Insurance Co. v. Leslie, supra; 55 N. H., 249; also on page 420 of the case of Reilly v. Insurance Co., 43 Wis., 449; also on page 422, Thompson v. Insurance Co., 43 Wis., 459; also 45 Wis., 388; also 43 Wis., 463: also in the case of Oshkosh Gaslight Company v. Insurance Co., 71 Wis., 454.
    For discussion of the statute in Wisconsin, see Insurance Co. v. Leslie, 47 Ohio St., 409.
    It was under the above law as cited in Insurance Co. v. Leslie, that the Wisconsin case held as above quoted“The amount written in the policy is liquidated damages, agreed upon by the parties.”
    See also as quoted in opinion in Leslie case, Emery v. Insurance Co., 52 Me., 322.
    The conclusion then is that the amount written in the policy is liquidated damages, and the statute, section 3643, says that in case of total loss “the whole amount mentioned in the policy shall be paid,” it is liquidated damages and shall be paid — does not paid mean an obligation to be discharged only by a payment in money?
    Can an obligation to pay money be discharged by the performance of labor or delivery of material and chattels of any kind or nature against the consent of the payee? If the insurer in this case is bound by the policy, and the statutes as written in the policy to pay the full amount written in the policy, to-wit. $1,750, how can it discharge that obligation by building a new house? It can not escape from its liability to pay the $1,750, that being the amount of indebtedness. It can not be wholly discharged without wholly paying the amount of its debt. If it transferred property or labor, it must be (to operate as a discharge) of the value of $1,750. To build a house, say for $1,500, would not discharge its obligation to pay $1,750, if it did that it would still owe $250. What could be the motive, object or advantage to the company to claim the right to build a new house unless it could do so for less than $1,750, the amount of its obligation? To fix its liability as in this case at $1,750, and then say that it can rebuild for a less sum, and be discharged would be absurd.
    The form of the policy provides that the company shall not be liable beyond the actual cash value at the time of the loss of the property, and the loss shall be estimated according to such actual cash value, and shall in no event exceed what it would cost the insured to repair and replace the same with material of like kind and qiiality; notwithstanding the above provisions in the policy, our Supreme Court in Insurance Co. v. Leslie, supra, held that under the provisions of said section 3643, in case of total loss, the company shall be liable for the whole amount of the policy. No agreement of the parties, no award of arbitrators could change the amount of the liability.
    The policy also provides “that it shall be optional with the company to take all or any part of the articles at such ascertained or appraised value, and also to repair, rebuild or replace the property lost or damaged with other of like kind and quality; but there can be no abandonment to the company of the property described.”
    
      Now in the above provision that tbe company at its option may take all or any part of the articles, at the appraised value, certainly “articles” does not mean a “building or structure, as mentioned in section 3643, and as articles are so mentioned all that follows in the sentence, logically and naturally refer to “articles” which certainly means chattels and cannot mean buildings, and certainly to replace the property with other of like kind or quality does not mean a building or structure. Such terms as “articles,” and “like kind and quality” do not apply to buildings or real estate, but do apply to chattels; therefore the option so given in the policy is inapplicable when you come to consider it with reference to replacing buildings totally destroyed, and the provision “there can be no abandonment to the company of the property described,” can not refer to a building totally destroyed, because there is nothing left to be abandoned, and the term as used in insurance parlance means and applies only to chattels. The provision in the policy, that the insured “shall furnish, if required, verified plans and specifications of any building, fixtures or machinery, destroyed or damaged;” and the statement or clause or part of the policy, which contains said provision, contains no statement or allusion, for what purpose said plans and specifications are required. It does not appear from the language or the context of that part of the policy in which it appears that it has any reference to rebuilding; the context wouhl lead more naturally to conclude that the plans and specifications are required for, and in the ascertainment of the value of the property destroyed, or damaged, so that the value of the loss can be ascertained, and have no reference to replacement or rebuilding.
    
      The part of the policy which has reference to replacement or rebuilding of property, makes no requirement of plans or specifications, but it is made in connection with the ascertainment and appraisement of value, and that fixes necessarily the value of a destroyed building, and must refer to its description, which includes plans and specifications; but inasmuch as section 3643 requires, the agent of the company, before it makes the insurance, to examine the building and to make a full description of it, it is conclusive against the company that it has a full description of the building, which of itself is necessarily a more complete statement of the kind and character of the building, than “plans and specifications” • thereof would give; hence we conclude that plans and specifications are not essential to the company to enable it to rebuild nor is such requirement in the policy made for that purpose, so that it is not a defense on the part of the company, that it cannot rebuild, because the plaintiff had not furnished it plans and specifications.
    The defendant says in its answer, that it elected to rebuild under the terms of its policy; we say that under the terms of the policy controlled by the law, as in every case, where the question has been raised, the court has held that the law controls and prevails over every provision of the policy that is inconsistent with, or in conflict with the law. The defendant has no right in this case to elect to rebuild, because its obligation is to pay the amount written in the policy; to rebuild is not to pay.
    The defendant in its answer says that the plaintiff refused to furnish plans and specifications, and thereby denied this defendant the right to enter and rebuild said premises — but defendant does not allege that it has ever tendered or offered to rebuild, and that said offer has been rejected by plaintiff.
    Defendant alleges that it has made arrangements with a competent builder to restore said building in like kind and quality as it existed before the fire. I suppose, that the arrangements so made if it means anything, means a proposition, bid, or contract, by the “competent builder” to restore in like kind and quality as it existed before the fire; if this be so, then the “plans and specifications” are not needed by the company, or builder, to enable them to contract for, or to restore said-building.
    If such an arrangement has been made, then the builder has knowledge of the “full description” of the building, and did not need that the plaintiff should furnish plans and specifications for that purpose. it is from the “full description” thereof which the law required the agent of the company to make, that the builder obtained his knowledge to enable him to bid on the building of said house, so that it is not true that because plaintiff did not furnish “plans and specifications,” she refused and still refuses to permit said rebuilding and restoration of said house; it is difficult to see after an arrangement with a builder has been made to rebuild, how the plaintiff can refuse, when there was no tender nor offer to rebuild. But we do not admit that the plaintiff is required to furnish any plans and specifications, nor that the defendant has any right to rebuild. Insurance Co. v. Hull, 51 Ohio St., 270; Revised Statutes, Section 3643, and Insurance Co. v. Leslie, 47 Ohio St., 409.
    As to all the essential facts the petition in case of Insurance Co. v. Hull, supra, is substantially like the petition at bar, and in passing upon the sufficiency of the petition in said Hull case, the court say on p. 278, “that the petition contains all the allegations 
      
      necessary to entitle the plaintiff to recover upon it.” Moody v. Insurance Co., 52 Ohio St., 12, Insurance Co. v. Webster, 4 Circ. Dec. 704; 7 C. C. R. , 511, the court fully indorses the case of Insurance Co. v. Leslie, 47 Ohio St., 409.
    In case of Insurance Co. v. Kukral, 4 Circ. Dec., 633; 7 C. C. R., 356, the court charged the jury which was sustained by the circuit court, that, “the contract was to be read as if Revised Statutes, section 3643, was a part of it.” The court said this charge was perfectly correct, and cited Insurance Co. v. Leslie, 47 Ohio St., 409. Affirmed by the Supreme Court, without report, Insurance Co. v. Kukral, 51 Ohio St., 609; Schild v. Phoenix Ins. Co., 8 Dec., 45; 6 N. P. 134.
    Under Sayles, Texas Civil Statutes, Sec. 2971, providing that a fire insurance policy, in case of total loss, shall be a liquidated demand against the company for the full amount thereof, except in cases of personal property, a clause in a policy on a house, allowing the company, if the house is burned, to rebuild, is void in case of total loss. Insurance Co. v. Levy, 33 S. W. Rep., 992 (12 Tex. Civ. App., 45); Dec. 4, 1895; Insurance Co. v. Myer, 29 S. W. Rep., 93 (9 Tex. Civ. App. 7); Insurance Co. v. Garlington, 66 Texas, 103; Queen Ins. Co. v. Jefferson Ice Co., 64 Texas, 582; Sullivan v. Insurance Co., 36 S. W. Rep., 73; Insurance Co. v. Eddy, 54 N. W. Rep., 856; Reilly v. Insurance Co., 43 Wisconsin, 449; Thompson v. Insurance Co., 43 Wis., 459; Thompson v. Insurance Co., 45 Wis., 388; Oskosh Gas Light Co. v. Insurance Co., 71 Wis., 454; Royal Ins. Co. v. McIntyre, 34 S. W. Rep., 669; Doxey v. Insurance Co., 36 S. W. Rep., 950; Insurance Co. v. Bean, 60 N. W. Rep., 907;
    A valued policy is conclusive. Wood on Insurance, p. 107; Farmer’s Mutual Ins. Co.; Tns. Law Journal, November, 1873; Fuller v. Insurance Co., 4 Met. (Mass.), 206; Borden v. Insurance Co., 18 Pick. (Mass.), 523; Phillips v. Insurance Co., 10 Cush. (Mass.), 350; Phoenix Ins. Co. v. McLean, 100 Mass., 476; Hodgson v. Insurance Co., 9 U. S. (5 Cranch), 100; 1 Sumner, U. S., 451; Coolidge v. Insurance Co., 15 Mass., 341; 1 Met. (Mass.), 147.
    Where there is a total loss, the agreement to arbitrate in policy does not apply. Lumber Co. v. Insurance Co., 8 Mich., 116.
    On the question, as to the effect of legislation making valued policies, see 16 Insurance Law Journal, p. 554; 17 Insurance Law Journal, p. 729; 7 Insurance Law Journal, 265; 6 Insurance Journal, p. 888.
    Arbitration clause void, see Insurance Law Journal, 481-2.
    Amount of policy fixes amount of loss, see 5 Insurance Law Journal, 705; 6 Insurance Journal, 67; 2 Insurance Journal, 468.
    Nothing to arbitrate — A valued policy does more than merely value the property insured, it values the loss. 2 Insurance Law Journal, 493.
    The only case defendant cites to sustain his position that it had a right to rebuild, is the case of Rieger v. Insurance Co., 69 Mo. App., 674. The property there destroyed were shelving and fixtures in a store, and there is nothing in the entire case that can in any way be construed to make the policy in such case a valued policy, and there is no question in the case calling for a decision on any point or question raised by the demurrer in this case.
    To overcome the evil of over-insurance, the statute requires, before a policy shall be issued, “that the insurer shall cause the building to be examined by its agent — and to make a full description of it, and to fix its insurable value. A compliance with these provisions places in the possession of the insurer a full, detailed and complete description of the building, and its insurable value.
    How, then, can over-insurance result from a compliance with the statute? And yet in his brief, the attorney for defendant quotes from the comment of the insurance commissioner of Ohio on his statistics, as follows:
    "I have no hesitancy in believing that over-insurance sanctioned and encouraged by the valued policy law (such statute being so-called by him), is the cause of the greater portion of this increased fire waste and that this unnecessary waste will continue to grow worse so long as this statute remains a part of our insurance code.”
    Defendant’s attorney has told us, as above referred to, that the result of the evils said statute was enacted to prevent, was over-insurance and numerous losses. Is the insurance commissioner correct in his statistics and comment? If the insurable value be fixed as required by the statute, how can there be over-insurance? And if the amount of insurance be limited to the insurable value, no inducement can result from such a policy, to an "increased fire waste” or more numerous losses.” May not the insurance commissioner be overzealous in thus arraigning the wisdom of the legislature for allowing "this statute to remain a part of our insurance code.”
    If there be over-insurance, it can not be the fault of the insured; for the law provides that the insurable value shall he fiwed by the agent of the insurer, and whether the agent be capable and honest, or otherwise, the law affords no opportunity for complaint on the part of the insurer; nor can an honest compliance with its provisions prejudice him. Under the law the insured has no voice in fixing the insurable value, this is required to be done by the insurer through its agent; in so enacting the legislature did not presume the insurer would use such power to its own prejudice; but defendant’s attorney admits that the evil is not in the law, but in “unscrupulous insurance solicitors and unprincipled companies.” In his brief he points out that the insured will be tempted to collude with the solicitor to evade the remedy provided by the statute; but the act of the agent is the act of the principal; and thus we ar,e shown that the insurer colludes with the insured to work prejudice and loss to the insurer. Does not the argument of the defendant prove too much.
    If the purpose of this statute, as stated by counsel, be to prevent controversy between the assured and tbe company, would not his construction substitute a more prolific cause of controversy?
    If this policy may be converted into a building contract at the option of the insurer, who is to determine whether the rebuilt structure is of like kind and material of the one destroyed?
    If the insured is to furnish plans and specifications, who is to decide that the new structure is built in accordance therewith?
    Can one conceive of a worse plight than that the poor policy holder would be in, if, after being turned out of doors by a fire, the insurer having exercised its option to rebuild, has built a structure in no way resembling the destroyed one in materials or workmanship? He dare not move in. He can not sue for specific performance of the contract. He is relegated to a suit for damages against the insurer for a failure to perform its so called contract, and must wait to the end of a long and tedious litigation before he could safely enter into possession of said house; for a moving in would be construed into an acceptance of said objectionable structure. Could the insured be made to “capitulate” sooner by this method than in a controversy over the amount to be paid him?
    Is it not the object of this law to prevent all controversy and fix an amount that must be.paid when the loss occurs?
    What object is to be attained by requiring the insurer, before accepting the risk, to have the structure examined and its insurable value fixed, if it be not to fix the amount to be paid, in case of a total loss?
    It is within common knowledge that in very many cases no “plans and specifications” are extant. The insured may have acquired the building long after it ■was built. In such a case, if the insured can not produce “plans and specifications,” is he to lose his insurance, or must he take a structure in payment, which the insurer says is the destroyed replaced?
    Does it help the defendant any by claiming that the words “shall be paid” apply with equal force to a partial loss, as of a total loss? Whether they do or not is to be determined by the “plain and unambiguous” terms of the statute.
    It is enough, that in case of a total loss, the statute requires that the full amount of insurance stated in the policy shall be paid.
    Counsel states that the plaintiff has refused indemnity. Can this be truly said until the new structure is completed, and not then unless the new building is a reproduction of the destroyed building. Must she wait until the structure is completed for indemnity?
    The statute says no. The whole amount mentioned - in the policy must be paid, and by the terms of the policy, within sixty days- of proof of loss.
    Defendant claims that “in case the company replaces the property the policy remains in force as to so much as the replacing cost less than the amount of the policy,” that is, if in this case the defendants were to replace the building at the expense of one-half of the face of the policy, the other half would be left in force.
    The first question that arises on this claim is what becomes of the holding in Insurance Co. v. Leslie, supra. “That the amount to be paid is the amount upon which premiums were received.”
    Would it be a compliance with this statute to pay the insured one-half the amount stated in the policy and return her one-half of the premiums paid?
    It is claimed by defendant in his brief, that rebuilding is a mode of payment, according to this last proposition of his brief, rebuilding would be a payment of one-half, and it would require another fire for the insured to obtain the other half.
    Can a method of payment more unfair be devised which still leaves after payment a sum still due.
    In conclusion, the general assembly in the enactment of this law has used words so plain that their meaning and intention can not be misunderstood. So plain, that for twenty years, since the enactment of the law, all, both insurers and insured, have accepted the statute according to its plain reading and meaning; and insurance companies that have done business in this state since its enactment have accepted its literal reading and in all cases of “total loss” have paid without question the “whole amount mentioned in the policy.” The insurance companies, the persons and parties most interested and affected, have thus given their construction of this law against the claim of the plaintiff in error.. Twenty years observance of the requirements of this law; twenty years practical construction of its plain term; twenty years recognition by the general assembly that this practical observance prevented and cured the evils it was enacted to prevent afford such a construction of permanency and satisfaction that argues most strongly for it to remain “a part of our insurance code.” And if any change be ever sought to be made, let the appeal for such change be made to the legislature.
   Williams, J.

The policy in suit insured a building situated in this state against loss or damage by fire, and was issued since the enactment of section 3643 of the Revised Statutes, which provides that:

“Any person, Company or association hereafter insuring any building or structure against loss or damage by fire or lightning, by renewal of a policy heretofore issued, or otherwise shall cause such building or structure to be examined by an agent of the insurer, and a full description thereof to be made, and the insurable value thereof to be fixed by such agent; in the absence of any change increasing the risk without the consent of the insurers, and also of intentional fraud on the part of the insured, in case of total loss the whole amount mentioned in the policy or renewal upon which the insurers receive a premium shall be paid, and in case of a partial loss the full amount of the partial loss shall be paid; and in case there are two or more policies upon the property, each policy shall contribute to the payment of the whole of the partial loss in proportion to the amount of insurance mentioned in each policy; but in no case shall the insurer be required to pay more than the amount mentioned in its policy.”

This statute has been considered by this court on several occasions,, and has invariably been held to enter into and become a part of every fire policy on a building or structure, issued since its passage, and to supersede and annul those conditions and stipulations in such policies that are at variance with its provisions. Insurance Co. v. Leslie, 47 Ohio St., 409; Insurance Co. v. Hull, 51 Ohio St., 270, 278; Moody v. Insurance Co., 52 Ohio St., 12, 23; The Sun Fire Office v. Clark, 53 Ohio St., 414, 426, 429, 430; Insurance Co. v. Drackett, 63 Ohio St., 41, 54. In the case of the Insurance Co. v. Leslie, it was held, among other things, that a condition contained in such a policy, that “the amount of the loss or damage should be estimated according to the actual cash value of the property at the time of the fire, and not more than it would cost the insurer or insured to replace or re store the same,” was repugnant to the statute, and void, and that, in case of a total loss, notwithstanding the condition, the insured was entitled to recover the full amount named in the policy, although that amount exceeded the actual value of the property. In Moody v. Insurance Co., the court held that a condition in such a policy which declared there should be no liability “for loss or damage in or on vacant or unoccupied property, unless consent be endorsed thereon,” was subject to, and controlled by, the provision of this statute which makes the insurer liable “in the absence of any change increasing the risk,” and that, a defense founded on a breach of that condition which did not aver the risk was thereby increased, was insufficient. That decision, and the Leslie case, were approved and distinguished in the subsequent case of The Sun Fire Office v. Clark, 53 Ohio St., 414, 429, 430. The Moody case was also approved and followed in Insurance Co. v. Moore, 52 Ohio St., 606-7, and also in Retterer v. Ohio Ins. Co., 55 Ohio St., 635;andits doctrinewasdistinctlyreaffirmed, both in the syllabus and opinion, in Insurance Co. v. Baldwin, 62 Ohio St., 368, 381-2. And, in the Leslie case, and Insurance Co. v. Draclcett, supra, it was held that the provisions of this statute are founded upon public policy, and the insured cannot be held to a waiver of them. Since these several decisions, which are in entire’ harmony with those of the courts of last resort of other states where similar statutes have been in force, all contracts of fire insurance have been entered into and policies issued in view of the law as established by them. Insurers have accordingly fixed the amount of the insurance written in their policies, and the premiums they have required to be paid, with respect to the law as so established, and all premiums have been paid by the insured on the faith of it. So that, the law as declared in the cases referred to has, in its appropriate sense, become a rule of property in this state.

There is no conflict of authority between the case of Insurance Co. v. Wells, 42 Ohio St., 519, and any of the decisions of this court heretofore cited in which the statute in question was considered and adjudicated upon. In that case (Insurance Co. v. Wells) no questions were raised relating either to the interpretation of section 3643, or its application to the policy there in suit. Assuming that they might have been made, it is perfectly clear that no question of the kind was either passed upon or considered by the court, or brought to its attention, or even alluded to by counsel. This plainly appears from the report of the case. It has long been the established rule of this court, as well as the settled law on the subject, that: “A reported decision, although in a case where the question might have been raised, is entitled to no consideration whatever as settling, by judicial determination, a principle not passed upon nor raised at the time of the adjudication.” Fouts v. State, 8 Ohio St., 98, 123. Where the questions were not raised nor considered, “it is as if they were not in the case at all.” State v. Pugh, 43 Ohio St., 121, 123. Wambaugh’s Study of cases, Sec. 17.

In Phoenix Insurance Co. v. McLoon, 100 Mass., 475, 476, it is said by Gray, J., that : “No rule of the, law of insurance is better settled by authority than that by which, when the insured has some interest at risk, and there is no fraud, a valuation of the subject insured in the policy is held conclusive upon the parties, at law and in equity. Hodgson v. Marine Insurance Co., (9 U. S.), 5 Cranch, 100; Insurance Co. v. Hodson, 10 U. S. (6 Cranch), 206, and 11 U. S. (7 Cranch) 332; Alsop v. Commercial Insurance Co.. 1 Sumner, 451; Irving v. Manning, 6 C. B., 391; s. c. 1 H. L. Cas., 287; Barker v. Janson, Law Rep., 3 C. P., 303; 3 Kent. Com. (6 ed.), 273; Coolidge v. Gloucester Insurance Co., 15 Mass., 341; Robinson v. Manufacturers’ Ins. Co., 1 Met., 147; Fuller v. Boston Insurance Co., 4 Met., 206. And none is better founded in reason. The verv object of putting the contract into the form of a valued, instead of an open policy, is to prevent disputes as to the amount to be recovered by the assured in case of a total loss by the perils insured against; and the premium paid to the insurers is regulated accordingly.”

Certainly the reason for holding the insurer to the amount of the valuation fixed in the policy cannot be less cogent where that measure of liability is prescribed by positive law, which is necessarily adopted by the parties and made a part of their contract, and by which they are mutually bound. Insurers have it completely in their hands, under this statute, to correct and prevent any mischief arising from over-valuation; for, the power is exclusively theirs to determine and fix the amount of the risk they will assume, in each instance, and the compensation that shall be paid them for assuming it. So that, if the amount of the insurance named in any policy proves to be larger than it should have been, the fault is not attributable to the statute, but must be found elsewhere.

Obviously the purpose of the rebuilding clause in the policy in question, and its only purpose was, that it might enable the defendant in case of total loss to discharge its liability on the policy by the expenditure of a less sum of money than would be required to pay the amount of the insurance named in the policy. In no other way could the company derive any benefit from that clause. If the expense of rebuilding would exceed, or even equal the amount of the insurance mentioned, there could be neither advantage nor object on the part of the company to undergo that trouble. And when the expense is less, the performance of that condition by rebuilding the destroyed property, would be but a mode of satisfying the obligation of the company by payment, to persons other than the insured, of a sum less than became payable on the policy accordingJo the provisions of the statute. It must be apparent that, if the insurer could be so relieved from the operation of the statute under a condition of this kind because it is made a part of the policy, there could be no reason why he should not also have like relief, on the same ground, under the stipulation inserted in all policies which undertakes to limit his liability to the actual value of the property, and be permitted in all cases to prove that value to be less than the amount of the insurance written in the policy, and, to discharge his indebtedness thereon by the payment of such lesser amount. Such a result, under any condition or agreement in the policy is in conflict with the requirements of the statute, and defeats its manifest purpose, which, evidently was to remove from the field of controversy the amount and mode of payment of total losses. The amount which the statute requires shall be paid, is fixed, as expressed in its language, at “the whole amount mentioned in the policy upon which the insurer received a premium,” not merely a part of that amount. The liability of the insurer for that amount is made a money demand to be “paid” to the insured or his representatives, and not to third persons under the employment and direction of the insurer. Whatever latitude of meaning the terms “payment” or “paid” may have, depending upon the connection in which they are used, the latter term, it seems clear, is employed in this statute in its appropriate legal sense of satisfaction in money of a debt due from one to another.

The gist of the argument for the plaintiff: in error is, that the object of the statute is fully accomplished when its operation is limited to the avoidance of those conditions and stipulations in policies which are designed to affect the measure of the insurer’s liability, such as those which relate to the actual value of the property, and its ascertainment by appraisement and arbitration; and that, the rebuilding clause does not interfere with the measure of the liability as fixed by the statute, but only provides a mode of payment Performance of that condition of the policy, when it is available, would, no doubt, be a satisfaction of: the insurer’s liability, and, in a sense, payment. But. it also changes entirely the measure of the liability from the amount named in the policy to the cost of the rebuilding, whether that be. greater or less than the amount of the insurance. In those states having no statutory regulation like ours, and where such conditions are operative, it is uniformly held that, the election of the insurer to rebuild, at once converts the policy from a contract of insurance into a building contract; and that, the amount named in the policy ceases to be any standard for the measure of recovery. The only action that could be maintained in such case is one for damages for breach of the contract to rebuild; and the measure of the damages, where there has been an entire failure to rebuild, is the cost of rebuilding, however much less that may be than the amount of the insurance; and where there has been but a partial failure, the amount it would cost to complete the building by making it substantially like the one destroyed, becomes the rule of damages. In either case, the amount of the insurance mentioned in the policy is wholly excluded from consideration. Morrell v. Insurance Co., 33 N. Y., 429; Beals v. Insurance Co., 36 N. Y., 522; Insurance Co. v. Hotel Co., 54 U. S. App., 215; vol. 13 Am. & Eng. Ency. Law (2 ed.), 380, where many cases are cited. It is said by Denio, C. J., in Morrell v. Insurance Co., supra, that “insurers having a proper regard for their own interests should not elect to rebuild unless they can, with the same or a less amount of money than the sum insured, procure as good an edifice to be erected, as the one which had been destroyed; but if they will, by availing themselves of the option, undertake to rebuild, they are bound to do so, at any expense which may be necessary, though it should exceed the amount insured. That amount has no longer any connection with the case, and cannot be made use of to test the quality or completeness of the new building, or to regulate the recovery in case of a failure to perform. Hence, where the amount of the pecuniary indemnity named in the policy is less than the value of the building insured and burned, it is just as unwise in the insurers to embrace the option to rebuild, as it would be to agree in the first instance for the same premium absolutely to rebuild. By electing to rebuild under a policy in the alternative, a new contract, in a certain sense, is made. What was before alternative and optional becomes fixed and certain. An agreement to make good the loss in money, not exceeding the amount insured, is changed into a positive contract to erect another similar building.” The adjudicated cases show that rebuilding clauses in policies have been the source of litigation as frequent and prolonged as that arising under the “actual value,” or “appraisement and arbitration” clauses, and the results were involved in as much uncertainty; and in all important respects, the former appears to be as radically at variance with the statute, as the latter. They, alike, if carried into effect, would practically supersede the statute, instead of the statute superseding them.

Judgment affirmed.

Minshall, Q. J., Burket and Spear, JJ., concur.

Shauok, J.

Since 1857 the reported decisions of this court have been properly regarded in the light of an announcement in the sixth volume of the Oh?o State Reports, as follows: “The judges desire it to be understood, that their concurrence in the opinion of the judge who announces the decision of the court, is limited to that part which was necessary for the determination of the case, upon the facts, and the points of law arising therefrom; and, in general, the judges have endeavored to state those points in the syllabus of each case.”

Confidence that knowledge of this practice is coextensive with opportunity to read the foregoing opinion might satisfy me that separate observations in the present case are comparatively unimportant. Mv concurrence in the present judgment is not influenced by any of the decisions of- this court which are cited in the foregoing opinion, most of them being irrelevant. It is true that in Moody v. Insurance Company, 52 Ohio St., 12, it was held, in substance, that when the insurer defends because of the exemption from liability under the terms of the policy resulting from the vacancy of the property at the time of loss, it must allege, and prove if the allegation is denied, that the vacancy increased the hazard. Not only was this conclusion violative of established rules of interpretation, but it was in direct conflict with the previous decision in Insurance Company v. Wells, 42 Ohio St., 519, where the same stipulation was held to be absolute.

Nor has the doctrine of Moody v. Insurance Company been approved in the later decisions cited. It is not even cited in the opinion in Insurance Company v. Drackett. It is mentioned and distinguished in The Sun Fire Office v. Clark, 53 Ohio St., 414. The kindred point there decided was that the insurer may successfully claim its immunity under the usual stipulation against additional insurance without its consent, and that it need not allege or prove that the hazard was increased by such additional insurance. The case is in accord with the views expressed by Mc-Ilvaine, J., in the Insurance Company v. Wells,. It was quite imperative that Moody v. The Insurance Company should be overruled or distinguished, ana the latter was thought practicable. In a case presenting no opportunity for distinguishing, and making overruling imperative, it will only be necessary to approve the doctrine of Insurance Company v. Wells.

Nor is my concurrence in the present judgment due to a conviction that the statute under consideration is founded upon sound policy. It is an exercise of legislative power not repugnant to any limitation placed upon the exercise of that power. It is, therefore, to be judicially enforced whether it is promotive or subversive of sound policy. Properly interpreted, it seems to annul the stipulation on which the insurer relies in the present case.

Davis, J., concurs in this opinion.

Burket, J., concurs in the judgment for the reason that said section 3643 controls, and must prevail over the contract in the policy as to rebuilding.  