80 Mich. 116 | Mich. | 1890
The defendant issued its policy of insurance to the plaintiff, September 1, 1887, insuring, against loss by fire, its stock of lumber, sawed timber, lath, and shingles, for one year, in the amount of $2,500. A fire ■occurred on May 3, A. D. 1888, consuming the larger part of the stock. The parties failed to agree upon the amount of the loss, and August 24, A. D. 1888, plaintiff brought suit.
The policy contained the following provisions:
“ The amount of loss. or damage * * * to be*118 paid sixty days after the proofs of the same required by the company shall have been made by the assured, and received at the office in Chicago, and the loss shall have-been ascertained by the arbitrators appointed, and proved in accordance with the terms and provisions of thisPOllCy. íIíjIíiJí
“The amount of sound value and of damage to the-property, whether real or personal, covered by this policy, or any part thereof, may be determined by mutual agreement between the company and the assured, or, failing to agree, the same shall then be submitted to competent and impartial arbitrators,- — one to be selected by each party, — the two so chosen, in case of disagreement, to-select an umpire, to whom they shall refer each subject of difference, and the award of any two of them, in writing, under oath, shall be binding and conclusive as-to the amount of such loss or damage, but shall not determine * * * any other question, except only the amount of such loss or damage. * * * And until such proofs * * * are produced, * * * and arbitrations permitted and had, the loss shall not be payable. *********
“It is furthermore hereby expressly provided and mutually agreed that no suit or action against this company for the recovery of any claim by virtue of this policy shall be sustainable in any court of law or chancery until after an award shall have been obtained fixing the amount of such claim, in the manner above provided, which is agreed to be a condition precedent. . * * *'
. “It is hereby understood and agreed by and between this company and the assured that this policy is made-with reference to the foregoing terms and conditions.”
Upon receiving notice of the loss, the defendant sent an adjuster, who could not agree with plaintiff upon the-amount of the loss or damage sustained. Thereupon plaintiff made out proofs of loss, and on May 16, 1888, forwarded them by mail to the defendant. They were-received, and on May 22 defendant wrote plaintiff that it had examined the proofs and the information furnished by its adjuster; that its only concern was the amount of loss suffered for which it would be liable to contribute,
“We must insist, gentlemen, on estimating the loss under the contract.”
It is also stated that defendant understood plaintiff’s proofs to include manufacturing and trade profits, which were not covered by the policy.
The provisions of the policy here material to the issue on the question of damages read as follows:
“By this policy of insurance, the Phenix Insurance Company of Brooklyn, N. Y., * * * will indemnify the Chippewa Lumber Company against loss or damage by fire to the following specified and located property only, to an amount not exceeding the actual cash value of the property herein described at the time of .such loss, and in no event to exceed twenty-five hundred dol1 cll’S •'*' *!■ *1* ‡ *{•
“The cash value of property destroyed or damaged by fire shall in no case exceed what would be the cost to the assured, at the time of the fire, of replacing the same; and, in the event of any claim for loss being made under this policy on the stock of any manufacturing establishment, the measure of damage shall in no case exceed the actual cost of producing the same.”
It is conceded that the loss was on the stock of a manufacturing establishment.
After the letter of May 22, nothing appears to have been done by either party until the suit was brought. TJpon the trial, plaintiff confined its evidence of damage to the market or cash value of the lumber destroyed; the defendant introducing no evidence of value. The court was requested to instruct the jury to find a verdict for defendant because — ■
1. No cause of action existed at the time suit was begun.
2. There was no evidence of plaintiff’s damages according to the conditions of the policy.
The contention of plaintiff is that the arbitration clause is not a condition precedent to bringing suit; that it is revocable, and plaintiff revoked it by bringing suit; that defendant waived it; that it has no application to a total loss; and that the market value of the lumber is the measure of recovery.
It is conceded that an agreement to submit all matters in controversy between parties to arbitration, and thus oust courts of their jurisdiction, is void, and may be repudiated by either party at any time before award is made. Either party to an arbitration may revoke the authority of the arbitrator, and this he may do notwithstanding the agreement to arbitrate is valid. Any person may violate the most solemn contract he has made, but he thereby becomes responsible to the injured party for such violation. So, in the numerous cases cited by plaintiff's counsel, the courts held that those (who had violated their contract to arbitrate where liable on their arbitra
It is true that some courts have held that similar arbitration clauses, providing for the ascertainment of the amount of loss, were not binding; but we think it will be found that they so decided upon the ground that they were not made a condition precedent to bringing suit. Most of the cases cited by plaintiff's counsel are not in conflict with the rule above stated. In most all,, the attempt was made to oust the court entirely of its jurisdiction; and in the case of Stephenson v. Insurance Co., 54 Me. 70, the court very tersely states the rule as follows:
“While parties may impose, as a condition precedent*122 to application to the courts, that they shall first have settled the amount to be recovered by an agreed mode, they cannot entirely close the access to the courts of law.”
Plaintiff relies upon the case of Nurney v. Insurance Co., 63 Mich. 633 (30 N. W. Rep. 350). That case is very different from this in one important feature, which was evidently the basis of the decision. The contract provided for arbitration at the written request of either party. Their negotiations for settlement covered a period of five months, and neither party claimed the right of arbitration. It was held to have been waived. Justice Sherwood (p. 637) said: „v
“In this case the agreement to arbitrate never became operative; and the agreement not to sue, being dependent on the agreement to arbitrate, of course must have become inoperative.”
The policy in the present case provides that the amount of loss or damage shall be submitted to arbitration. The right to arbitrate is not made conditional upon a written request of either party. It expressly provides an unobjectionable and fair mode for ascertaining the amount if the parties are unable to agree, upon the ascertainment of which the plaintiff was entitled to bring suit. Interpreting the language in the Nurney Case in the light of the facts, we do not understand the Court-to hold that an agreement to submit the ascertainment of unliquidated damages to arbitration, as a condition precedent to bringing suit, is not valid, or that either party thereto can revoke it at his own will. A waiver of arbitration necessarily implies a waiver of all the conditions dependent upon it, and leaves the parties in tlm same situation as they would be in if they had made no agreement to arbitrate. Such we understand to be the doctrine of that case. If it was intended to establish a different rule, we hereby expressly overrule it.
The judgment must be reversed, and a new trial ordered.