Insurance – Recovery – Extent Under Interest Limitation Clause of the Standard Fire Insurance Policy
Plaintiff leased vacant land and erected a building thereon. At the election of the lessor the lease could be terminated upon thirty days’ notice, plaintiff having the right to remove the building. Defendant issued to plaintiff a policy insuring the building against loss by fire to the extent of the cash value of the property at the time of loss, but not exceeding the repair or replacement cost, “nor in any event for more than the interest of the insured.” The building was destroyed by fire and plaintiff sued to recover the full amount of the insurance. The trial court refused to admit defendant’s proffered evidence that three months prior to the fire plaintiff’s lessor served notice terminating the lease and had taken action to dispossess, and that plaintiff had made arrangements to have the building demolished. On appeal, held, reversed. As affecting the amount of the insured’s recovery under the interest limitation clause and as constituting a factor in the cost or value of the destroyed building the evidence was properly excluded. However, such evidence should have been admitted as bearing -on the question whether insured had any insurable interest in the building. Federowicz. v. Potomac Insurance Co., 7 App. Div. (2d) 330, 183 N.Y.S. (2d) 115 (1959).