SECTION II, 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 be 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 material of like kind and quality; said ascertainment or estimate shall be made by the insured and this company, or, if they differ, then by appraisers, as hereinafter provided; and, the amount of loss or damage having been thus determined, 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. New York Standard Form. New in phraseology and arrangement. For cases other than in relation to the measure of damage see section seventeen, appraisal, and section eighteen, payment of loss. I. MEASURE OF DAMAGE. General rules. As applied to personal property. Profits. Open and valued policies. As affected by proofs of loss. Marchesseau v. Merchants' Ins. Co., 1 2.- In fire policies, the insurance covers 3.- Under an ordinary fire policy. Rules governing admission of evi- agreeing to make good all loss or damage dence and its effect. Cross references. to the property insured, not exceeding the sum insured, where the assured had at risk $18,000 at time of fire, his loss being but $6,000, and his insurance $5,000; 1. General rules. The contract of in- held, that he could recover the whole surance is essentially one of indemnity, amount of $5,000, and not the proportion and this indemnity must be adjusted on only of $5,000 to $18,000, as in marine inthe principle of replacing the insured, assurance. Mississippi Mut. Ins. Co. v. Innear as may be, in the situation he was gram, 34 Miss. 215. in at the commencement of the risk. The amount of the insurable interest is the market value of the articles at the time and place of the commencement of the risk, and when they have been purchased near that time and place, the cost to the assured is the most satisfactory, though not the only criterion of their value. 4.- Where a policy of insurance on a §. 3 a steamboat against fire provided that in the event of loss the damage should be estimated "according to the true and actual cash value of the said property at the time the same shall happen." Held, that in estimating loss the defendants were not entitled to have taken into ac General Rules. count a depression in the value of steam-equal goodness does not affect this rule. ers generally, caused by circumstances Burgess v. Alliance Ins. Co., 10 Allen, which might be temporary only. Mc- 221 (Mass.) Cuaig v. Quaker City Ins. Co., 18 Up. Can. Q. B. 130. 7.- An adjustment of the amount of the loss, while not conclusive, may be adopted by the jury as evidence of value. Thompson v. Liv., Lond. & Globe Ins. Co., 2 Hannay, 259 (N. B.) 8.- When policy limits loss to twothirds of the value it is error to allow interest upon any sum in excess. Rockford Ins. Co. v. Nelson, 65 Ill. 415. 9. Under the statute in Massachusetts a covenant in the application against holding the valuation conclusive, not being embodied in the policy, is not part of the contract. Luce v. Dorchester Mut. Fire Ins. Co., 105 Mass. 297. 5. In a policy of $3,000 on reaping machines it was stipulated that "the company would make good to assured all loss or damage to the property by fire, the said loss or damage to be estimated according to the true and actual cash value of the said property at the time the same shall happen." There was evidence offered to show that the machines, on account of defective principle, were only valuable as so much wood and iron; but the judge instructed the jury that the cost of construction, and before it was tried in the field, would be the measure 10.- The sum insured is the extent of of damages. Held, that such instruction liability, not the measure of assured's was erroneous, and the measure of dam-claim. Ill. Mut. Fire Ins. Co. v. Andes ages was that agreed upon in the policy, Ins. Co., 67 Ill. 362. to wit: "The actual cash value at the time of the loss and damage." Also, that the option to replace the machinery, if destroyed, was a reservation for the benefit of the company; they were not bound to adopt it. What it would cost, therefore, to replace the reaping machines did not furnish the rule for the damages which the company must pay to make good the loss. Nor was the fact that the machines insured were constructed under a patent of any importance. Patented or unpatented, what they were worth at the happening of the fire was, by agreeinent of the parties, to be the measure of their value; and this must be ascertained by testimony, as is done in every other case, where the value is not fixed. Commonwealth Ins. Co. v. Sennet, 37 Pa. 205. 6.- If a partial loss occurs upon a domestic policy, for a sum expressed in dollars, upon property situated in a foreign country, the rule for estimating damages is to determine the loss at the place where it occurred, in the currency of that country, and then to find the equivalent in the country where suit is brought, by determining the actual intrinsic value of the currency of that country, as compared with the currency of the other. And that the policy contains a provision that in case of loss the company shall have the right to replace the articles lost or damaged with others of the same kind and 11.- Assured is not bound by the valuation of another company, upon which a policy had been issued and accepted by him. Such evidence is not admissible. Bardwell v. Conway Ins. Co., 122 Mass. 90. 12.- Insurance is but a contract of indemnity; the indemnity can go no farther than the interest of the party who is indemnified, and if that interest is partial and not entire, the indemnity does not cover a value incident to ownership. Porter v. Etna Ins. Co., 6 Ins. L. J. 928; 2 Flippin, 100 (U. S. Cir.) 13. In an action on a policy the plaintiff must establish by a preponderance of evidence (1) the execution of the policy; (2) the total or partial destruction of the insured property; (3) the amount of the loss or value of such destroyed property; (4) and such notice and preliminary proof of loss as the policy requires. And in such a ease the terms "actual cash value" mean the sum of money the insured goods would have brought for cash at the market price at the time when and place where they were destroyed. Mack v. Lancashire Ins. Co., 2 McCrary, 211 (U. S. Cir.) 14.- Damages on property specifically insured cannot exceed amount named. Dacey v. Agricultural Ins. Co., 21 Hun, 83 (N. Y.) 15.- The obligation of an insurance General Rules. company to pay is not reduced by payments of insurance to other creditors on their interests holding security on the insured property, the moneys so received not having been used to reinstate the property. Westminster Fire Office v. Glasgow Provident Society, L. R. 13 App. Cas. 699 (Eng.) 16. The valuation in the policy is not the controlling proof of the actual value of the insured property, but the jury must find from the evidence what such value was, that is, not what it would cost to rebuild, but what is shown to be its money value under all the circumstances of its situation and surroundings at time of the fire. Waynesboro Mut. Ins. Co. v. Creaton, 98 Pa. 451. - v. Northern Ins. Co., 1 L. R. A. 704; 37 Fed. Rep. 524. 22. It is proper, in an action on a policy of fire insurance, to compute interest upon the amount of the loss from the date of the commencement of the suit, and to add such interest to the amount of such loss in making up the verdict. Marthinson v. North British & M. Insurance Co., 7 West. Rep. 637; 64 Mich. 372. 23. When the policy provides that the cash value of the property destroyed or damaged shall not exceed what would be the cost to the assured of replacing it, and, in case of depreciation from use or otherwise, a suitable deduction shall be made from the cost of repairing, the measure of damages would be the cost of repairs, if thereby the property is ren 17. In an action on a policy for a loss, the policy is no evidence of the amount or value of the goods destroyed. Stand-dered as valuable as it was before; if less ard F. Ins. Co. v. Wren, 11 Ill. App. 242. 18.- The insured cannot recover unless he show that the policy was in force at the time of the loss, and unless he show that he has lost something of value. Schroeder v. Trade Ins. Co., 12 Ill. App. 651. 19. If by repairs property can be rendered as valuable as it was before the fire then the cost of repairs is the measure of recovery. If property destroyed had from use or otherwise become less valuable than when new then cost of replacing it, less a percentage of depreciation of destroyed article by such use, determines the extent of the damages. If property after being repaired is not as valuable as it was before the fire, then the cost of repairs, supplemented with the amount of depreciation in value are the factors for fixing the damages. Commercial Fire Ins. Co. v. Allen, 16 Ins. L. J. 641; 80 Ala. 571. 20. There must be proof of the actual cash value before insured can recover. Hanover Fire Ins. Co. v. Lewis, 16 Ins. L. J. 956; and see No. 26. valuable than before, then the difference must be added to the cost, and if more valuable, it must be deducted. Commercial Fire Ins. Co. v. Allen, 80 Ala. 571. See No. 19. 24. Conditions of a policy in conflict with a statute making the insurer liable for an amount fixed in the policy upon which to receive a premium, as the insurable value of the property-such as stipulations that the amount of the damage shall be estimated according to the actual value of the property at the time of loss, and that an award of arbitrators shall be obtained before action can be brought,— are without binding force. *Queen Ins. Co. v. Leslie, 47 Ohio St., 409; 19 Ins. L. J. 673; 9 L. R. A. 45; 24 N. East. Rep. 1,072. 21.-Where the destruction of property 26. A policy of insurance against loss pledged to secure a debt would leave the by fire, which provides that such loss debt still unpaid, the debtor in possession shall be estimated according to the actual of the property pledged has an insurable cash value of the property at the time of interest therein; and the measure of his the loss, not exceeding the sum insured, loss would be the value of the property leaves the question of value open, and burned, which otherwise would have gone requires proof of the actual cash value of to reduce his indebtedness. Nussbaum the property before a recovery can be As Applied to Personal Property. had for other than nominal damages. *Hanover F. Ins. Co. v. Lewis, 23 Fla. 193: 1 So. Rep. 863. 27.- Note. When liability fixed; value of property in case of total destruction. See 3 L. R. A. 524. 28. As applied to personal property. Insurance was upon cotton-mill and machinery. Held, that insured was entitled to recover only the actual damage, which damage on the machinery might be ascertained by estimating the cost of fitting up "new machinery in the mill of a description similar to that which had been destroyed, and deducting from amount of such cost the difference in value between the machinery in the mill as it was immediately before it was destroyed, and the "new" machinery of a similar description when fitted up. Vance v. Forster, 2 Crawford & Dix's Rep., 118 Irish. Also noted, 3 Stephen's Nisi Prius, 2,084. 29. Where defendants, sued on a policy of fire insurance underwritten by them, are shown to have consented that the property damaged by the fire should be sold at auction, the price at which it was sold is a proper criterion by which to estimate the damage of the insured. Henderson v. Western Marine & Fire Ins Co., 10 Rob. 164 (La.) true and actual cash value of the said 31a.- Where a policy of insurance Su Co., 11 Low. Can. 128. 32. A company insuring goods is liable for their actual market value at the time of loss, not for the cost price, although profits had not been insured. Equitable Fire Ins. Co. v. Quinn, 11 Low. Can. 170. 30. When goods insured against fire are destroyed, the insurer is bound to pay their value at the time of the loss; if damaged only, he is bound for the difference between their value in their sound and damaged condition. When the goods are so much damaged as not to be salable in the ordinary mode, a fair sale at auction made by the assured, after reasonable notice to the insurers, or with their knowledge, may be considered by a jury in estimating the damage and in ascertaining the amount of the indemnity; but the price for which such damaged goods were sold at auction by the assured, without notice to or knowledge by the insurers of the sale, is not sufficient evidence of the value of the goods in their 34. There being no direct testimony da:naged condition. Hoffman v. Western | obtainable, to contradict the statements Marine & Fire Ins. Co., 1 La. Ann. of the assured as to the amount of his re 216. 33. If goods were those which insured dealt in at wholesale, or manufactured, the price for which similar goods were generally sold by wholesale dealers or manufacturers may be considered by the jury in estimating their value, in an action upon a policy to recover for their loss. Hoffman v. Etna Ins. Co., 1 Robert. 501; 19 Abb. Pr. 325; affi'd, 32 N. Y. 405. tail grocery goods destroyed, that their As Applied to Personal Property. Mack v. Lancashire Ins. Co., 2 McCrary, 211 (U. S. Cir.) whose annual sales were as large as his, that for the six years prior they had not on hand at any one time more than one- 41. The market value of property defifth of their annual sales. That by the stroyed controls in estimating the loss. general course of trade if the plaintiff's Fisher v. Crescent Ins. Co., 33 Fed. Rep. sales amounted to $120,000, his loss could | 544. not have exceeded $24,000. But each wit- 42. Evidence of what injured goods ness can only testify to his own experi- brought at auction is evidence of their ence, not to "the course of trade." In- value after the fire. Clement v. British surance Co. v. Weide, 11 Wallace, 438 (U. | American Assur. Co., 2 N. Eng. Rep. 57; S.) 141 Mass. 298. 35.- High wines insured were worth 43.— In an action on a policy taken out + forty-nine cents per gallon without pay- by the owner of a patent on the licensee's ment of government tax, and ninety-nine premises, to insure royalties agreed to be cents with the tax paid. When burned paid, the loss should not be confined to they were stored in a bonded warehouse. royalties upon the amount of the patThe tax had not been paid. Held, that as-ented article actually burned, but should sured's liability to the tax ceased with include loss from enforced idleness of the destruction of the property, and that company was only liable for the spirits at value of forty-nine cents per gallon. Security Ins. Co. v. Farrell, 2 Ins. L. J. 302 (Ill.) 36.- If assured is liable for the government tax on whisky insured, the amount of such tax may be included in the estimate of value in event of loss by fire. Hedger v. Union Ins. Co., 12 Ins. L. J. 926; 17 Fed. Rep. 498. Disapproving of decision in Security Ins. Co. v. Farrell, 2 Ins. L. J. 302 (Ill.) 37. The market value of goods insured at the time and place of the fire is that which assured loses by the fire and is the measure of damage. Fowler v. Old North State Ins. Co., 74 N. C. 89. works during the time they were being restored and for some time thereafter, against which, under the contract, the patentee had no remedy. National Filtering Oil Co. v. Citizens' Ins. Co., 9 Cent. Rep. 177; 106 N. Y. 535; 13 N. East. Rep. 337. 44.- The value of insured lumber destroyed by fire must be determined by its market value at the time and place destroyed. *Western Assurance Co. V. Studebaker, 124 Ind. 176. 45. The measure of damage for goods destroyed by fire in favor of an assured, is their fair cash or market value at the time and place of the fire. *Grubbs v. North Carolina Home Ins. Co., 108 N. C. 472; 20 Ins. L. J. 784; 13 S. E. Rep. 236. 38. Values of oil paintings assigned 46.- The amount stated in a policy of by insured and another person for pur- fire insurance of personal property is not poses of the insurance, can not be deemed made prima facie evidence of its value, evidence of cash value at time of the fire. by Iowa Acts 18 Gen. Assem. ch. 211, Linde v. Republic Fire Ins. Co., 18 Jones $3, providing, in case of the loss of any & Sp. 362 (N. Y.) building so insured, the amount stated in 39.- Expense of removing machinery the policy shall be received as prima preparatory to making repairs, is a proper element to consider in fixing damage; even if the machinery belongs to a third person who is under contract obligation to effect such removal does not diminish the liability of the company 47. The amount of recovery under a upon its policy. Clover v. Greenwich Ins. Co., 15 Ins. L. J. 214; 2 Cent. Rep. 873; 101 N. Y. 277. 40.- Actual cash value of goods in sured, means the sum of money they would have brought for cash at the market price at the time and place destroyed. facie evidence of the insurable value of the property at the date of the policy. *Joy v. Security F. Ins. Co., 48 N. W. Rep. 1,049; 20 Ins. L. J. 734; 46 Balt. Underwriter, 108 (Iowa). fire policy on a stock of material burned while in the hands of the manufacturer is the fair market value at the time and place of destruction. *Parrish v. Virginia F. & M. Ins. Co., 20 Ins. L. J. 95 (N. C.) 47a. The proper measure of damages |