While this point may be conceded, the argument ignores the words under which the amount is stated, and begs the question whether 'Insured Value' has any meaning. Moreover, it is questionable that the amount stated under the heading is meant merely as a statement of the amount of insurance; for the 'amount of insurance' is indicated in figures in the upper left corner of the policy, and the 'sum' of the insurance is written out in the contract provision reciting the consideration and the undertaking to insure.
Two meanings of 'Insured Value' suggest themselves. The natural and obvious sense of the words, it appears, is the value at which the article is insured. No effort at construction is required to understand this interpretation of the phrase, and it is harmonious with the plain meaning of the language. Cf., Lee v. Hamilton Fire Ins. Co., 251 N.Y. 230, 167 N.E. 426, where the phrase 'valued at' followed by an amount was held to create a 'valued' policy. In the absence of a technical distinction, this court sees no difference between 'value', 'valued at', 'valuation' or 'insured value' when used in the same context.
It might be contended that a second meaning of 'Insured Value' would be the value of the article up to which the company has agreed to provide indemnification; in other words, maximum value. The court, however, knows of no lexicon which defines 'insured' as 'maximum'. Furthermore, there is an assumption implicit in this construction:- that, namely, commonly, a policy of insurance is a contract of limited indemnification- which leads to backward reasoning that again begs the question. The question is whether the words 'Insured Value' alter the the validity of that assumption in this case. Therefore, the plain meaning of the words is the value at which the item has been insured, or the amount at which it has been valued for insurance purposes. If this interpretation is not clear, then the words are at best ambiguous, and the ambiguity will be resolved against the insurer.
A further examination of the policy, however, and of the circumstances surrounding the parties when the contract was made and affecting the subject matter, substantiates the conclusion that the policy is a 'valued contract' of insurance. There is nowhere in the policy a limitation on the amount of recovery to actual cash value for the loss of a single insured article, or any provision setting forth any standard by which the amount of the loss is to be ascertained, or any provision indicating that proof should be offered as to such value in case of loss. Cf., Universal Ins. Co v. Weiss, 106 Pa. 20; Waynesboro Mut. Fire. Co. v. Creaton, 98 Pa. 451; Ulmer v. Phoenix Fire Ins. Co., 61 S.C. 459, 39 S.E. 712; Luce v. Springfield Fire & Marine Ins. Co., 15 Fed.Cas.p. 1071, Case No. 8,589. In fact, there is no provision in the policy describing any method of adjusting the loss. If the parties had agreed on the value of the loss, there would be no necessity for such a provision. No place in the policy is there a clear indication that the liability of the insurer, for the loss of a single insured article, shall not be more but may be less than the amount stated, by the use of such a term as 'not exceeding'. Such a phrase, in a policy of insurance, 'denotes that uncertainty of amount which is the chief characteristic distinguishing an open from a valued policy." Stuyvesant Ins. Co. v. Jacksonville Oil Mill, 6 Cir., 10 F.2d 54, 55; National Union Fire Ins. Co. of Pittsburgh, Pa. v. California Cotton Credit Corp., 9 Cir., 76 F.2d 279, 287. There is nowhere in the policy a provision giving the insurance company an option to replace a single lost insured article or in any way limiting its liability to the cost of replacing. Indeed, where the insured property is a piece of jewelry of unique utility, it is unlikely that the parties would consider such an option practicable. With property of this nature involved, it is entirely reasonable to suppose that the parties intended to avoid disputes over the very difficult question of value, in the event of loss. Thus, viewing the matter as a whole, the court holds that the parties intended to place a value on the property and on the risk of actual total loss.
It must be stated that the reasoning employed to reach the result that the parties have agreed upon a valuation of the whole necklace in case of an actual total loss does not compel the conclusion that the valuation was meant to serve as the measure of liquidated damages in the event the necklace is not entirely lost and some value remains. In the first place, a policy so construed would be a gambling transaction rather than an insurance contract. In the second place, the terms of the policy specifically provide that all adjusted claims shall be 'paid or made good' to the assured within 30 days. It is also provided that when any insured item consists of articles in a pair or set, the policy is not to pay more than the value of any particular part which may be lost, without reference to any special value which such article may have as part of a pair or set. These provisions indicate that the parties contemplated a different measure of damages in the event of a partial loss. Finally, the problem of proof, where the loss is not entire, is not the same as it is when the loss is entire. Where there is an agreed valuation of the insured property, proof of any partial loss is a simple and obvious matter, by measuring the value of the remaining part against the property as wholly valued. The measure of the value of the remaining part, however, depends on whether or not the part that remains can be utilized to advantage in restoring the insured property to substantially its former appearance and value. See Patriotic Ins. Co. v. Franciscus, 8 Cir., 55 F.2d 844; Grandview Inland Fruit Co. v. Hartford Fire. Ins. Co., 189 Wash. 590, 66 P.2d 827, 109 A.L.R. 1472. If the remaining pearls cannot be so utilized, the measure of damages would be, since, concededly, some value remains in the loose pearls, the difference between the five thousand dollars valuation and the value of the remaining pearls as loose pearls. If the remaining pearls could be used in reconstruction, then the measure of damages would be the cost of effecting a restoration, or the difference between the five thousand dollars evaluation and the value of the remaining pearls as part of the necklace.
The testimony at the trial was that the necklace could be rebuilt if the size of the missing pearls were known. Given the value of a necklace consisting of a certain number of pearls on a certain date, and a number of pearls remaining from that necklace, an expert might testify to the size and value of the missing pearls and the cost necessary to restore the necklace substantially to its former appearance and value. From evidence of this nature, a jury could determine the nature of the loss and assess damages accordingly. The trial jury, however, determined that the necklace could not be rebuilt to its former appearance and value. That answer cannot be taken as valid if, as it is now held, the policy is a 'valued' one. For with the valuation established, the evidence on reconstruction would necessarily differ from such evidence where valuation has not been established. The answer to the interrogatory propounded merely reflected the absence of testimony as to such valuation from the case, with the plaintiff being unable to present evidence on the size and value of the missing pearls and the defendant being unable to persuade the jury that the necklace could be reconstructed to an original value of three thousand dollars. Upon a new trial, the parties will be able to try the issue of damages properly, and accordingly, a new trial will be ordered.
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