Royal Insurance v. Caledonian Insurance

HALL, J.

This is an appeal from a judgment rendered for plaintiff against defendant upon a policy of reinsurance, against loss by fire.

The original policy of insurance and the policy of reinsurance are attached to the complaint and made a part thereof. The risk was upon machinery, fixtures, and goods contained in a designated building.

The original policy of insurance contains the following clause:

“If a building or any part thereof fall, except as the result of fire, all insurance by this policy on such building or its contents shall immediately cease.”

The reinsurance policy contains precisely the same clause and also the following:

“This policy is subject to the same risks, valuations, conditions and adjustments as are or may be taken by the reinsured, and the loss, if any thereunder is payable

pro rata

with the reinsured and at the same time and place.”

It is substantially alleged in the complaint, among other things, that after the fire plaintiff adjusted and ascertained the amount of the loss sustained by the original insured at a certain amount, and the portion thereof payable by the plaintiff to the original insured, and that it paid the same.

[506]

Plaintiff sought and obtained a judgment against the defendant for its

pro rata

amount based upon such adjustment.

Defendant, among other things, pleaded as and for a separate defense that before the occurrence of the fire a material and substantial portion of said building had fallen from a cause other than fire, and that said building had fallen within the meaning of the policies.

Plaintiff interposed a general demurrer to this defense, which the court sustained, and it is this ruling which presents the principal point to be determined upon this appeal.