
    Isaac Davis, Respondent, v. American Central Insurance Company, St. Louis, Appellant.
    
      Insurance — waiver by the company of the right to replace or repair damaged property within a fixed period— right of the insured to sell the remnants saved from the fire. '
    
    •In an action brought to recover upon a policy of insurance, in the standard form authorized by the laws of the State of New York, it appeared that the interest of the defendant insurance company in a loss which occurred was not more than one-tenth, the property being insured in twelve other companies. The policy provided, in substance, that the insurer might repair or replace property lost or destroyed with materials of like kind and quantity. It contemplated an appraisal of property lost or damaged, and the insurer was given thirty days after the receipt of the proofs of loss to repair or replace, if he chose to do so, lost or damaged property.
    The defendant, although notified of the loss within four or five days after the fire, never demanded either an appraisal or inventory of .the goods sold, as the other insurers had done; nor did it indicate a desire to replace or repair the same. The plaintiff, within a reasonable time, served due proofs of the loss upon the defendant and these were retained by it, so far as appeared, without objection.
    The property in question was substantially destroyed and, eighteen days after the loss, remnants of goods were sold by the assured at an auction sale which was duly advertised for below their cost, owing to their damaged Condition.
    
      Held, that the plaintiff, after these goods had been kept for fourteen days after the defendant had notice of the loss, in view of the conduct of the defendant, was justified in selling them;
    That the conduct of the defendant amounted to a waiver by it of the stipulations ' of the policy above referred to.
    Appeal by the defendant, the American Central Insurance Company, St. Louis, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Erie on the 24th day of June, 1895, upon the verdict of a jury rendered after a trial at the Erie Circuit, and also from an order entered in said clerk’s office on the 3d day of July, 1895, denying the defendant’s motion for a new trial made upon the minutes..
    The action was brought upon a policy of insurance made by the defendant insuring a stock of goods in a store in Buffalo, N. Y., and a judgment was rendered in favor of the plaintiff for $1,559.01 damages and costs.
    
      
      Porter Norton and C. M. Bushnell, for the appellant.
    
      Moses Shire, for the respondent.
   Ward, J.:

On the 30th of June, 1893, the defendant (the appellant here) insured a stock of goods of one Victor Davis, consisting of cloths, clothing and trimmings manufactured, and in process of manufacture, and all materials and supplies used in his business, his own, or held in trust or sold, but not removed, all contained in the brick and frame buildings situate Nos. 592, 594 East Genesee street in Buffalo, N. Y., and other insurance permitted, for the term of one year against all direct loss or damage by fire to an amount not exceeding $1,500. On the 23d of August, 1893, J. N. & F. I. Door, the general agents and managers of the defendant- at Buffalo, having full power to make the same, executed in writing upon the policy,. the statement that, as it was understood the title to the insured property was vested in Isaac Davis (the plaintiff herein), he was thereby recognized as the insured under that policy, but the policy provided that the defendant should not be liable under the policy for a greater proportion of any loss on the property insured than the amount insured should bear to the whole insurance whether valid or not.

On the 10th day of November, 1893, the insured property was substantially destroyed by fire. There was evidence given upon the trial which might authorize the jury to find that the total value of the goods insured was about $16,000; that $11,000 thereof was totally destroyed, and that there were remnants of goods left from the fire more or less burned, saturated with water and otherwise injured so as to be of little value, and many of which were almost beyond identification; that the original cost of those remnants was $5,459, but that in the condition in which they were after the fire, little else could be done by way of realizing upon the value thereof except to dispose of the same at auction, ór to some dealer engaged in the same line of business. These remnants remained for inspection inventory and examination from the time of the fire until the 28th day of November, 1893, when they -were sold: at public auction at the place of the fire in the afternoon' by Robert McCann, a public auctioneer in the city of Buffalo, and all together brought the sum of $250. The notice of the auction sale was duly published in two of the daily papers in the city of Buffalo. Notice of the loss by fire was served upon the Messrs. Door, the local agents of the defendant in Buffalo, who issued the policy and made the indorsement of transfer aforesaid. These local agents immediately transmitted the notice to Mr. Van Valkenburg, who testified that he was the general agent of the defendant in this department, which included the State of New York.

He received the notice within four or five days of the fire. No attention was paid to this fire or the remnant of goods left from the fire prior to the auction sale, by the defendant or any of its-agents, and the defendant never demanded an appraisal of such remnants or an inventory of the same, or indicated in any manner a desire to replace the goods lost or damaged, or to repair the same.

The policy in question is what was known as the standard policy authorized by, the laws of this State and applicable to all fire insurance corporations as prescribed in section 121 of chapter 690 of the Laws of 1892 and in section 25 of the same chapter.

With the consent. of the defendant the property insured and covered by its policy .was also insured in twelve other insurance companies; in the .¿Etna of Connecticut in the sum of $3,500 ; in six other companies in the amount of $1,000 each; in four companies in the sum of $1,125 each, and in one company besides the defendant in the sum of $1,600. The total amount of insurance in all the companies was' $17,000 and the amount claimed of the companies was $15,790.76.

It may be assumed that the policies in .each of these other companies were made according to the standard form; and the evidence indicates that immediately after the fire and before the sale of the remnants, the other companies, by their agents, appeared upon the ground and took measures to have an appraisal made of the remnants, at least such appraisal was made by two disinterested appraisers, the result of which does not appear in the evidence.

'The plaintiff, within reasonable time, made due proofs of the loss, which were served upon the defendant, and such proofs of loss seem to have been retained by it without objection ; and we must, therefore, regard them as sufficient, and- as fully complying with the conditions of the policy.

The only point pressed by the learned counsel for the appellant on the argument before us, was that, without notice to the defendant, the plaintiff sold and disposed of the goods not entirely com sumed by the fire in a short time after the fire, and before service of proofs of loss, in violation of the provisions of the policy, which,, in effect, gave the defendant the right to have an appraisal of such goods and to take such goods at the appraisal, or to repair or replace the property lost or damaged on giving notice within thirty days after the proofs of loss had been served; and that the proofs of" loss were not served until after the disposition of the remaining-goods by the plaintiff, and that the policy itself made it the duty of' the plaintiff to hold the goods subject to such right and subject to-the rights of the defendant to have an inventory of the goods; and that the performance of these conditions under the policy was a condition precedent .to the plaintiff’s right of recovery.

The provisions of the policy upon which the appellant relies to-sustain this contention are as follows : “ This company shall not be liable beyond the actual cash value of the property at the time any loss or damage occurs, and the loss or damage shall he ascertained or estimated according to such actual cash value with proper deduction for depreciation, however caused, and shall in no event exceed what it would then cost the insured to repair or replace the same-with materials of like kind and quality * * * the sum for which this company is liable, pursuant to this policy, shall be payable sixty days after due notice, ascertainment, estimate and satisfactory proof of the loss have been received by this company, in accordance with the terms of this policy. It shall be optional, however, with this 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 within a reasonable time on giving notice, within thirty days, after the receipt of the proof herein required, of its intention so to-do ; but there can be no abandonment to this company of the property described. * * * If fire occur the insured shall give immediate notice of any loss thereby, in writing, to this company, protect the property from further damage, forthwith separate the damaged and undamaged personal property, put it in the best possible order, make a complete inventory of the same, stating the. quantity and cost of each article and the amount claimed thereon; and within sixty days after the fire, unless such time is extended in writing by this company, shall render a statement to this company. * -x-. -x- The insured as often as required shall exhibit to any person designated by this company all that remains of any property herein described, and submit to examinations' under oath by any person named by this company, and subscribe the same; and as often as required shall ¡Droduce for examination all books of account, bills, invoices (etc.), * * * at such reasonable place as may be •designated by this company or its representative, and shall permit extracts and copies thereof to be made. *' * * This policy .is- made and accepted subject to the foregoing stipulations and •conditions.”

The appellant’s complaint is directed entirely to an assumed breach of the provisions of the ¡Dolicy by the plaintiff that occurred after the loss by fire. At that time the liability of the defendant was fixed Upon the insurance policy to respond to the loss to the extent of the defendant’s proportional part théreof,' provided the proceedings of the plaintiff to establish that loss was substantially as required by the policy. The rule of construction in such cases is well laid down by the Court of Appeals in McNally et al. v. P. Ins. Co. (137 N. Y. 398). “ In determining the liability of the defendant it is entitled to the benefit of its contract fairly construed and can stand upon' all its stipulations. But when its liability has become fixed by the capital fact of a loss, within the range of the responsibility assumed in the contract, courts are reluctant to deprive the insured of the benefit of that liability by any narrow or technical construction of the conditions and stipulations which prescribe the formal requisites by means of which this accrued right is to be made' available for his indemnification. If, in this case,, a right of -action accrued to the plaintiff by reason of the destruction of the property by fire, * * * a liberal and reasonable construction of the stipulations of the contract which prescribe the formal acts on the part of the insured, necessary to the recovery of the loss, is sanctioned and required by the rules of law.” (Citing; May on Ins. [3d ed.] § 217; Hinman v. Hartford Fire Ins. Co., 36 Wis. 159; McLaughlin v. Washington County Mutual Ins. Co., 23 Wend. 525; Griffey v. N. Y. C. Ins. Co., 100 N. Y. 417; Krat zenstein v. West Ass. Co., 116 id. 54; Hoffman v. Ætna Ins. Co., 32 id. 405.)

In considering this question we should consider the circumstances surrounding the property and the parties. As we have seen, the defendants responsibility for this loss was less than ten per cent. The other companies chargeable with the loss gave attention immediately to the condition of the property not destroyed by the fire, and each company had a right, assuming as we do that the policies were uniform in their provisions as required by statute, to avail itself of the same conditions as td appraisal,, talcing the property, replacing or repairing it as the defendant had. The right of each company pervaded the whole property remaining after the fire, so that each company, in a sense, was a tenant in common with every other company, or had a right in common with every other company, to the extent of its liabilities in proportion to the other companies, respectively, to have the property appraised and to take the same at such appraisal or to repair or replace the same.

In the case before us the inquiry arises how the defendant -could have exercised the right of which it claims to have been deprived by the premature disposition of the damaged property, in view of the fact that all the other companies failed to assert any such claim. Would the defendant be entitled to separate, say one-thirteenth of this damaged property and replace it or repair it, or take it at a valuation. The learned counsel for the appellant has failed to enlighten us in regard to these difficulties. We refer to them to show the situation in which the plaintiff was placed after the fire with these damaged goods upon his hands, with the other companies substantially consenting that a sale thereof be made, or' at least making no claim that would prevent it, and with the defendant, though notified of the loss, taking no part nor insisting in any manner upon the conditions insisted upon here, as it was bound to do within reasonable time, if it desired to avail itself of such provisions in the policy y or the right would be waived. It was well said by the learned trial judge in his charge to the jury that the damaged goods were sold for $250 ; that there is no proof in the case that the goods were not sold for what they were worth. The proof is that everything that was saved out of this stock was advertised in two newspapers at least twice; that an auctioneer was employed and the regular flag was put out;' that "bids Were invited, and .that all that was left of this property was sold for $250. The contention in this case that, under the circumstances, it was the duty of the plaintiff to beep these goods, in. the absence of all request or attention from the defendant or its agents, for a period of thirty days after the furnishing of the proofs of loss in order to' await any .possible request for an -appraisal of these goods that were of so little value, or to replace those goods that coiild hardly be identified, or to repair goods when repair was impossible (which the jury might well have found), when¿ after a period of at least fourteen days from the time of notice of loss, the goods had been kept and were necessarily getting of less value from their condition as time passed on, is unreasonable, and is not within the purposes or spirit of the contract between the parties. )

We have reached the conclusion that the judgment and order appealed from should be affirmed, With costs.

All concurred, except Hardin, P. J., not voting.

Judgment and order affirmed, with costs.  