
    No. 11,751.
    Antonio Monteleone vs. Royal Insurance Company of Liverpool and London.
    When proofs of loss are furnished and a negotiation follows between tbe.assured and insurer, ended by a disagreement as to the basis for the adjustment of the loss, it will be no defence to. asuit on the policy .that plans and specifications were not furnished by the insured, it being apparent that if furnished there would have been no solution of the difference and suit was inevitable. Wood on Dire Insurance, 414 et seq.
    
    The condemnation and prohibition of any attempt to repair a building made unsafe by injuries from Are, is within the police power of the city. City Charter 1882; Act No. 20, Secs. 7 and 8.
    When the building insured is so injured by Are as to be made insecure and a menace to life, is condemned by the proper authorities and an attempt to repair it is prohibited by them, the insured may claim a total loss, although the building when insured was not sound. Wood on Insurance, Secs. 445, 446; May on Insurance, Sec. 433; 127 Mass. 300; 19 Wall. 640; 11 Mich. 446; 54 Cal. 450; 18 S. W. Rep. 337; Am. Dig. for 1893, 2171, No. 816.
    In such case the indemnity of the insured is not useless repairs, but the value of the building.
    An insurance on front and rear building covers connecting walls. Wood on Insurance, See. 474; 2 La. 507.
    A PPEAL from the Civil District Court for the Parish of Orleans. Monroe, J.
    
    
      Horace E. Upton, Anatole A. Ker, and L. E. Bouchereau for Plaintiff and Appellee:
    Evidence that the company’s adjuster made an offer to compromise the claim for insurance is admissible to show waiver of proof of loss. (Sup. Ot. of Pennsylvania) Dwelling House Ins. vs. Gould, 19 Atlantic Reporter, Yol. 19, pp. 793 and 795; 16 Atlantic Reporter, 22.
    Ligón et at. vs. Equitable Fire Insurance Company, Southwestern Reporter, Yol. 10, pp. 768 and 769.
    If, after the insurer has commenced to rebuild, he is interfered with by the public authorities and prevented from completing his work, or the building is ordered to be taken down as dangerous, although its dangerous character was not attributable to the fire, the loss will be his; nor will he be excused from paying the insured the entire amount of his loss, according to the agreement-to rebuild or repay. May on Insurance, Sec. 433, p. 535, and authorities cited.
    The city government has the power to cause the danger which threatens the public from unsafe walls to cease. 97 U. S. 25; 98 U. S. 659; 10 An. 227; 4 An. 477; 34 An. 496; Dillon on Municipal Corporations (3d Ed.), Sec. 141, pp. 163 and 167.
    
      “ Whatever.may have been the defects in said building before the • fire, the owner still enjoyed the privilege of using it as a building, and was actually engaged at the time of the fire in making improvements upon the interior, under permission from the city authorities. It would seem, therefore, that, in the opinion of the city authorities, while it was sufficiently safe before the fire to be allowed to stand and to permit of interior embellishment, it was not sufficiently safe after the fire to permit of repairs involving the taking down and reconstruction of a party wall, disintegrated by said fire.
    “It is manifest, therefore, from any view of the case, that the owner might still be occupying his building if it had not been for the fire, and that it was the fire alone which deprived him of the use of said building, and that it was either the fire alone or the fire and pre-existing defects combined, which finally deprived him of his property, and in either case the defendant is liable.
    “ For, as it has been held, it was not alone the material of which the house was built that was insured, but it was that material existing in the shape of a house, habitable, susceptible of being used and occupied as a house.” Hamburg-Bremen Fire Ins. Oo. vs. Garlington, 18 S. W. Reporter, pp. 337-888, Supreme Court of Texas, 1886; Brown vs. Royal Insurance Oo., 1 Ellis & Ellis, p. 853, Queen’s Bench (1859) ; Brady vs. N. W. Insurance Oo., 11 Michigan, pp. 445, 446 (1863).
    
      Farrar, Jonas & Kruttsehnitt for Defendant, Appellant,
    cite: 38 An. 1; 42 An. 49; Tiedeman on Lim. Police Power, Sec. 1229, p. 440; Sedgwick on the Measure of Damages, Vol. 2, Sec. 722.
    Argued and submitted April 10, 1895.
    Opinion handed down April 22, 1895.
    Opinion on rehearing handed down November 18, 1895.
   The opinion of the court was delivered by

Miller, J.

The plaintiff claims payment of ten thousand dollars, the amount of the policy of insurance issued by defendants on the plaintiff’s property, destroyed by fire, the peril insured against. The defence is that plans and specifications required by defendant as part of the proof of loss were not furnished, that the risks were increased after the insurance without the consent of the insured, and a denial of the damage alleged to have heen caused by the fire.

It is in proof that proofs of loss were furnished, and there were negotiations between the parties in reference to the amount the defendants should pay. The real question was, whether the payment should be an amount sufficient, the defendant claimed, to repair the building insured, and put it in the condition it was before the fire, or whether the value, as in case of total loss, as demanded by the plaintiff, should be the indemnity under the policy. The discussion ended with the denial of liability, except for repairs. In view of this discussion and efforts to adjust the loss resulting in a difference which admittea of no settlement by any papers supplementing the proofs of loss, we think the defence fails that plans and specifications were not furnished. Wood on Fire Insurance, Sec. 414 et seq.

The building, three stories, adapted for stores as well as for dwelling purposes, was partly occupied at the time of the insurance. The uses of the building were indicated by the policy describing it as occupied by stores and dwellings. When the fire occurred there were in the building a barber shop, a shoe-fitting establishment not using machinery, and portions of the premises were devoted to other shop purposes not in our view differing materially from the uses specified in the policy. In our opnion, the risks of fire were not sensibly increased by the kinds of business carried on in the building when the fire occurred, and the circumstance that an additional or increased premium of insurance was demandable, by reason of the nature of the occupancy, not of a dangerous character as it seem3 to us, does not of itself sustain the defence of increased risk. Wood, Secs. 226, 243.

The serious question in this case is as to the amount of the loss. The building was old, and the copious testimony as to its walls, flooring, joists, openings and in other respects, produces the conviction that when insured the building was not sound. It was seriously affected by the fire, both by the flames and falling debris. The party wall was so injured as to be useless; that portion dividing the yards was inclined; the wall opposite the party wall, that is, in the Cusstomhouse side was strained; and there is testimony the cross walls leaned and the joists were charred. Of course, the injuries by the fire were the more serious because of the condition of the premises before requiring, it seems, girders and other appliances to hold it together, and it is in proof that at the time of the fire necessary repairs were being made. The current of the testimony is the building was old and frail before the fire, one of the witnesses testifying it was unsafe and that it was so injured by the fire as to make it insecure, even with the repairs possible to be made. In this condition the building was condemned by the Oity Engineer, and there was a refusal on the part of the city authorities to permit any repairs. The public safety, in their opinion, required the building should be rebuilt.

In this condition of the record, it is urged on us by the defendant that the building could have been repaired so as to make it as good as before the fire, and the cost of these repairs should be the measure of the recovery. There is a mass of testimony as to the practicability of such repairs, or their efficacy, if made or attempted. There is testimony to the effect the building was injured to such an extent as to be beyond repair. On the other hand, it is testified, on behalf of defendant, that the party wall taken down and rebuilt, anchors introduced connecting the walls, strips of new flooring supplied, with other work on ceilings, cross walls, would put the building in the same condition it was before the fire. The qualification of all this kind of reparation, not to be accomplished without large expense, is that after all, as we gather from the record, the result what would be what the witnesses term a “ fire job,” sufficiently expressive, but made clearer by the testimony of defendant’s witness: that the building, with all the proposed repairs, would still be unsafe.

The police power of municipal corporations, to guard against unsafe buildings by ordering their demolition, will not be questioned. Its exercise may be erroneous and the power may be abused, but still it exists subject to judicial control. But courts should not interfere with it unless on very clear grounds. In this case there is the condemnation of this building by the City Engineer; the action of the Mayor for the enforcement of that condemnation; the prosecution of the owner, the plaintiff, for non-compliance, and finally the refusal of the city authorities to permit attempted repairs of a building deemed a menace to life. The defendants claim all this action of the authorities was illegal, and not to be considered in determining the question of'liability under the policy. Conceding the action was not conclusive, we are remitted to the issue of fact as to the condition of the building, and our conclusion from the record is, that no repairs would have furnished a safe building.

There is thus presented the question whether the indemnity to the assured for a loss by fire is to be found in the estimated cost of repairs, which, if made, would not give him a secure building, and when, too, the authorities prohibit the repairs. Can the assured be required, under the repairing clause of the policy, or under any view, to accept that species of indemnity? Are not all insurance policies, and their reservations as to repairing buildings injured by fire, subordinated to the public safety, and the police power securing the public against insecure building and dangerous constructions? Irrespective of all considerations of the public safety, is not the assured entitled, under any interpretation of the policy, to some other and better indemnity for a loss by fire than the cost by repairs on the building that can i ot be made safe by any repairs? A total loss may be claimed though the walls of a building stand, and the elements that composed it be not entirely consumed. It is the same, we think, when the insured building can not be made secure by repairs. Nor will it make any difference in such cases of constructive total loss, that the condition after the fire is due, in part, to causes existing before. Such causes are deemed the remote, not the proximate causes of the loss. The insurer taking a risk on an old, and in this instance, an insecure building, incurs the obligation to pay for a total loss if the injuries by the fire, combined with antecedent defects, make repairs impracticable. The value of the old building at the time of the ñre is the measure of the indemnity promised by the ’policy. Recognizing this measure as applicable in this case, we understand it to be not disputed, the lower court has adopted the minimum valuation of the witnesses. Wood on Fire Insurance, Secs. 445, 446; May on Insurance, Sec. 433; 18 South Western Reporter, 337; 54 Cal. 450; 127 Mass. 309; 11 Mich. 446; 19 Wall. 640; Am. Dig. 193, p. 2671, No. 316.

The defendant contends against any liability for injury to the wall between the yard and the adjacent premises. The insurance was on the main and rear buildings. We are not furnished with any authority excluding under such a policy injury to the connecting or yard walls. It would seem that a policy on buildings front and rear should be deemed to include appurtenances as walls. Wood on Fire Insurance, Sec. 474; Workman vs. Insurance Company, 2 La. 507. There is no issue made in the discussion as to the value of the debris of the old building used, as we infer, by the insured, and though the insured is held for a total loss. We have been called on to deal only with two standards of liability, that of repairs, which we can not adopt, and that of valuation of the insured building, as to which there seems to be no dispute. The insured suggests that there should be, in any event, an allowance for one half of the value of the party wall, not insured. We understand his right against the adjacent proprietor for that half would pass by subrogation. 2 Wood, Sec. 500. Still there is no objection to make the reservation of the right.

It is therefore ordered, adjudged and decreed that, reserving the defendant’s right to claim of the owner of the property adjacent to the premises insured the amount he may owe for the party wall, the judgment of the lower court be affirmed.

On Rehearing.

Watkins, J.

The following are' the grounds of de'endant’s motion, viz.:

1. That there is error in the said opinion, in so far as it holds that there was a constructive total loss of the buildings described in plaintiff’s petition as the consequence of fire; that the fact and truth was and is, that any loss suffered by plaintiff in the premises, and due to fire, can easily be differentiated and separated from the loss due to the general bad condition of his buildings; to their age, consequent infirmities and defects, and to the consequent necessity, as found by the court, of tearing down the same after the fire alleged to have been the cause of all the loss suffered by plaintiff.

2. That there is error in the opinion of the court in that it finds that the lower court adopted the minimum valuation of witnesses as to the value of the premises described in plaintiff’s petition, whereas in truth and in fact both the lower court and this court adopt the maximum valuation, and that the finding of the court as to the measure of damages is erroneous, even if defendant and appellant is to be held liable for the value, at the time of the fire, of all the buildings and constructions described in plaintiff’s petition.

3. That there is error in said opinion in holding that the defendant and appellant should be mulcted in the value of one-half of the party wall, which did not belong to the plaintiff at all, and for which, as appears from the record, he has already instituted suit against third persons.

4. That there is error in the opinion of the court in so far as it holds the insurance company liable for the value of the yard wall, the value whereof is expressly excluded from consideraron under the terms of the policy sued on.

1. Was there “ a constructive total loss of the buildings described in plaintiff’s petition as the consequence of the fire?”

Is there error in our opinion in this respect?

Defendant’s counsel put their proposition thus:

“ Upon the first point then we respectfully submit that the court should, as the first element in deciding upon the amount of plaintiff’s recovery, fix upon the value of the property forming the subject-matter of the total loss which, if you assume the whole of the front building to be lost, wifi be somewhere between three thousand dollars and five thousand three hundred and thirty-three dollars and thirty-three and one-third cents. And taking those figures as a starting point, then deductions or additions should be made according to the views of the court upon the following propositions:

“ The burden of proof was upon plaintiff, and he has failed by a fair prepondi ranee of proof to show that the loss is as high as the second-named figures. To give him the average of the two, or four thousand one hundred and sixty-six dollars and two-third cents, is more than fair. To give him three thousand dollars seems to us the necessary result of the present state of the record.” Brief, p. 4.

Consulting plaintiff’s petition, we find the following allegations, viz.:

“That your petitioner is the bona fide and legal holder of fire policy No. 4,368,896, issued by the (defendant) company for ten thousand dollars, upon the buildings and improvements on the property situated at the corner of Royal and Customhouse streets.

í¡: ¡{t % * * * *

Said buildings and improvements being designated in said policy as consisting of a three-story brick slated building, and rear building attached.”

The petition further represents “ that, on the 28th of October, 1891, * * * a fire occurred in the premises immediately adjoining your petitioner’s above described property, and was communicated to the said buildings and improvements, covered by said policy, and that the effect of the said fire was such that the said buildings and improvements, covered by said policy, were greatly injured and damaged thereby; and the loss by said fire to your petitioner was practically a loss and entire destruction of the property insured aforesaid; and your petitioner is entitled to recover on the said policy for the total loss of the property insured."

Therefore, plaintiff’s claim is the total loss of all the buildings insured, and Ms averment is that the loss by said fire was practically a loss and entire destruction of the property insured; ” that is to say there was a constructive total loss of all the property insured.

In our opinion we say:

“ The serious question in this case is as to the amount of the loss. The building was old, and the copious testimony as to its walls, flooring, joists, openings, and in other respects, produces the conviction that the building when insured was not sound.

“ It was seriously affected by the fire, both by the flames and the falling walls.

The party wall was so injured as to be useless; that portion dividing the yards was inclined; the wall opposite the party wall— that is, on the Customhouse (street) side — was strained; and there is testimony (that) the cross wall leaned and (that) the joists were charred.

“ Of course, the injuries by the fire were the more serious because of the condition of the premises, requiring, it seems, girders and other appliances to hold it together; and it is in proof that, at the time of the fire, necessary repairs were being made. The current of the testimony is (that) the building was old and frail before the fire — one of the witnesses testifying that it was unsafe, and that it was so injured by the Are as to make it insecure, even with the repairs to be made.

In this condition the building was condemned by the City Engineer, and there was a refusal on the part of the city authorities to. permit any repairs. The public safety, in their opinion, required the building should be rebuilt.”

After thoroughly reviewing the evidence applicable to the situation just described, the opinion says:

“ Conceding the action was not conclusive, we are remitted' to the issue of fact as to the condition of the building, and our conclusion from the record is that no repairs would have furnished a safe building.”

Again, the opinion says:

“ A total loss may be claimed though the walls of a building stand, and the elements that composed it be not entirely consumed. It is the same, we think, when the insured building can not be made secure by repairs. Nor will it make any difference in such cases of constructively total loss that the condition after the fire is due, in part, to causes existing before. Such cases are deemed the remote and not the proximate causes of the loss.

“The insurer taking a risk on an old and, in this instance, an insecure building, incurs the obligation to pay for a total loss, if the injuries by the fire, combined with antecedent defects, make repairs impracticable.”

We have made these lengthy extracts from the opinion as the best means of showing there was a constructive total loss of all the buildings which were covered by the policy.

Neither the statement of the opinion nor the legal principles announced as controlling it, are called in question by counsel for the insurance company, nor is the summary of the proof afforded by the record disputed.

It is our conclusion that there was a constructive total loss of the-building described in plaintiff’s petition.

II.

Is there error in the opinion in stating that the court adopted the minimum valuation of witnesses as to the worth of the building insured?

On this question the opinion says:

“ The value of the old building at the time of the fire is the measure of indemnity promised by the policy. Recognizing this measure as applicable to this case, we understand it to be not disputed (that) the lower court has adopted the minimum valuation of the witnesses.”

The plaintiff sued for ten thousand dollars, the full amount of the policy, and the District Court gave him judgment for eight thousand dollars only; and our opinion and decree affirm that judgment.

At the date of the issuance of the policy — September 20, 1891— the- building insured was estimated to be worth ten thousand dollars, the amount of the defendant’s risk; and the loss by fire occurred on the 28th of October, 1891 — a few days over one month intervening between those dates.

Under this estimation of the value of the property the defendant accepted premiums from the plaintiff and undertook the risk; and under this claim of deficiency in value this court has diminished the plaintiff’s recovery by two thousand dollars.

There is in defendant’s answer no charge of either concealment or fraud on the part of plaintiff in procuring the insurance at ten thousand dollars of valuation.

On the question of .actual value of the property, one witness — a dealer in real estate, and well acquainted with the property — said that in 1890 it was worth twelve thousand dollars or fifteen thousand dollars.

The plaintiff, as witness, says it was worth twelve thousand dollars or fourteen thousand dollars.

A contractor states that a duplicate of the building destroyed would cost nineteen thousand nine hundred and fifty dollars.

Another builder and architect placed its value at twelve thousand dollars. He says he considers the value of the old building, at the time he examined it, something like eight thousand dollars.

Another witness, this last one for defendant, states that it would have cost ten thousand dollars to replace the burnt buildings.

In our opinion, we regard this testimony as perfectly conclusive to the effect that the District Judge adopted the lowest valuation and not the maximum valuation, as charged.

III.

With regard to the allowance for the party wall being reduced one-half, we think the defendant’s claim is groundless, because we have already held that defendant is liable to the plaintiff for a constructive total loss, and he can not be reimbursed for a total loss if one-half of the value of the party wall is deducted from his claim and he be relegated to an action against his co-proprietor for reparation of his loss on that behalf.

Our opinion says: “.The insurer suggests that there should be, in any event, an allowance for one-half of the value of the party wall not insured. We understand (that) its right against the adjacent proprietor for that half would pass by subrogation.” 2 Woods, ■Sec. 500.

“ Still, there is no objection to (making) the reservation of that right.”

We see nothing in defendant’s brief to shake our conclusions on this subject.

If the defendant be responsible under his contract to repair and make good to plaintiff a constructive total loss, it must pay for the party wall, otherwise the remuneration would prove inadequate for the purpose of rebuilding, and the complete measure of its engagement would be unfulfilled.

The remaining question is, whether there is error in our opinion in holding the defendant for the value of the yard wall; that is, the wall which separated the yard of the plaintiff from that of the adjoining yard.

In our opinion we say:

“The defendant contends against any liability for injury to the wall between the yard and the adjacent premises.

“The insurance was on the main and rear buildings. We are not furnished with any authority excluding under such a policy injury to the connecting yard walls.

“ It would seem that a policy on buildings, front and rear, should be deemed to include appurtenances as walls.” Wood on Fire Insurance, Sec. 474; Workman vs. Insurance Company, 2 La. 507.

Having gone over this case again very thoroughly, we are fully convinced that our opinion and decree are correct and must remain undisturbed.

It is therefore ordered and decreed that our original judgment and decree remain undisturbed.  