129 Tenn. 691 | Tenn. | 1914
delivered the opinion of the Court.
The bill prayed for a decree for the full amount of an insurance policy covering the stock of goods in a tailor shop, also for interest and the statutory penalty of twenty-five per cent, of the face of the policy. The decree granted was for the full amount of the policy, $2,000, and interest, $155. Recovery of the penalty was denied. Both parties appealed, and each have assigned errors here.
“And now, having fully answered, it prays to be ■dismissed, with costs.”
The policy contains a clause as follows:
*694 “No suit or action on this policy for tlie recovery of any claim shall be sustainable in any court of law or equity, unless commenced within twelve months next after the fire.”
The fire occurred August 1, 1912, It is manifest that if the defense made by the answer should be successful, and this suit should be dismissed, and a new suit be instituted, the beginning of the new suit would be more than twelve months next after the fire, as the date of the fire was August 1, 1912; and therefore it is clear that the defense made by the answer amounts in substance to a denial of all liability by the company. In fact, the averment in the answer that the damage to the goods consisted solely of water damage to the woolens and other materials amounts in substance to a denial of all liability under the policy, since under its terms the company was only liable for loss and damage caused by fire.
It has been held by this court that:
“Upon the happening of a fire loss, the insured is required to give notice and furnish a detailed statement of his loss. When this is received by the company, it is incumbent on the company to examine the same, and, if not agreed to, specific obections must be pointed out by the company, and an honest effort must then be made to adjust the differences. A mere general objection to the proofs, without pointing out in detail the items excepted to, will not be sufficient; but the objection must be so specific, with detail of items, as to enable the assured to see upon what points dif*695 ferences exist, and a counter statement, if necessary, should he furnished, showing the contention of the companies in such way that the difference, if practicable, may be adjusted and settled. If this should fail after an honest effort is made, an appraisal may be demanded by either party, and only in such event.” Hickerson & Co. v. Insurance Companies, 96 Tenn., 198 13 S. W. 1042, 32. L. R. A. 172.
The conduct of the company in the present case does not measure up to the standard laid down for it in the quotation last above set out. What was done on each side in respect of the demand for an appraisal which was made is to he gathered from the testimony of two witnesses, one of whom testified on behalf of the insured, and one of whom testified on behalf of the insurer. The witness who testified on this subject for the insured was Mr. H. H. Litty, attorney for the insured. It appears from his evidence that he was employed by the insured about September 1, 1912, to act for assured in the adjustment of this loss, and that he immediately called upon the local agent for the insurer, and was by that agent referred to Mr. Hart, adjuster for the insurance company. Litty called on Hart, and was advised by the latter to make proof of loss and send it to the company. This Litty did, and mailed the proofs of loss to the home office of the company by registered letter on September 7,1912. No reply was made by the company to Litty acknowledging receipt of the proofs of loss, but in due season Litty received through the post office the registry, return receipt, showing
Mr. Hart, the witness for the insurer, in his evidence admits that he objected to Rapp as an appraiser for Harowitz, and gives as his reason that Rapp had been working with Harowitz, and had made an estimate ecc parte as to what he (Rapp) considered the damage to the goods was by fire, and that he (Hart) considered Rapp' was incompetent to act as an appraiser under the oath demanded. Hart further testifies that after the first interview between himself and Litty, where the difference between them developed as to the competency of Rapp as an appraiser, he had another interview with Litty, in which he suggested that Litty select some other man, but that Litty never agreed to suggest any person other than Rapp. Hart denies in his evidence the statement of Litty in respect of his (Hart’s) overbearing, dictatorial, and insulting conduct, and states in substance that he was not only willing, but ansious to have the matter submitted to appraisement, and that he so advised Mr. Litty, and requested Litty to get some one else to act in place of Rapp.
It was further held in Hickerson & Co. v. Insurance Companies, supra:
“That in the selection of appraisers it is not contemplated that either party shall select a person with a view to sustain his own views or further his own interest, but the appraisers are to act .in a quasi judicial capacity, and as a court selected by the parties, free*698 from all partiality and bias in favor of either party, and so as to do' eqnal justice between them. This tribunal, selected to act instead of a court and in place of a court, must be like a court, impartial and not partisan ; and if these provisions are not carried out in this spirit, and for this purpose, neither party is precluded from going into the courts to reach his just deserts, notwithstanding the provisions.”
The word “provisions” in the quotation last above refers to provisions for appraisement in policies of insurance. The provisions for appraisement in the policy in the present suit are substantially the same as were those quoted in the opinion in Hicherson & Co. v. Insurance Companies, 96 Tenn., 195, 196, 33 S. W. 1041, 32 L. R. A. 172. The provisions for appraisement in the present case contained in the policy in suit are as follows:
“. . . . The loss or damage shall be ascertained, . . . and said ascertainment or estimate shall be made by the insured and this company, or, if they differ, then by appraisers, as hereinafter provided.”
“The amount of loss or damage having been thus determined, the sum for which this company is liable 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. ’ ’
“In the event of disagreement as to the amount of loss, the same shall, as above provided, be ascertained*699 by two competent and disinterested appraisers, the assured and this company each selecting one, and the two so chosen shall select an umpire. . .- . The award in writing' of any two shall determine the amount of the loss.”
“And the loss shall not become payable until sixty days after the notice, ascertainment, estimate, and satisfactory proof of the-loss herein required have been received by this company, including an award by appraisers, when appraisal has been required.”
“No suit or action on this policy shall be sustainable for the recovery of any claim in any court of law or equity, until after full compliance by the assured with all of the foregoing requirements.”
There appears in the transcript on behalf of the assured the deposition of Ed. Rapp, who was suggested by Mr. Litty as one of the appraisers on behalf of the assured. His evidence is intelligent, and he is seemingly a fair and unbiased witness. It may be that he was unduly biased in favor of the insured; but, if so, the fact certainly does not appear upon an examination of his evidence.
Upon the facts, it is clear that the conduct of the insurer, from the time of the happening of the fire down to and including the recitals in its 'answer filed in this cause, amounts practically to a denial of all liability under the policy.
The fire occurred on August 1, 1912. A month from that date elapsed before the insured employed Mr. Litty to represent him in the adjustment of the loss.
This view of the matter is borne out by the fact that although the insurer, through its adjuster, Hart, demanded an appraisement of the goods, it made no specific objections to the proofs of loss, and pointed out no detail or item wherein the same was incorrect, and furnished to the insured no counter statement of the proofs of loss, showing the contention of the insurer in respect of any infirmity in the proofs of loss, or any overestimate thereby of the sound value and damage to the goods. Without doing this, we are of the. opinion that, under Hickerson & Co. v. Insurance Companies, supra, the insured was entirely beyond its rights when it demanded an appraisement under the terms of this policy. Provisions for appraisement in a policy of insurance providing a speedy and reasonable, method of estimating and ascertaining' the sound value and damage are valid, and such provisions may be made a
In Hickerson & Co. v. Insurance Companies, supra it is said that the insurer cannot demand an appraisal and arbitration of the amount of the loss, while at the same time it denies all liability under its policy, and a demand for appraisal by the insurer is a waiver of other defenses going to the question of liability. The evidence for the insured shows loss resulting from fire in this case to have been a considerable amount more than the face of the policy, and the evidence on its behalf in the above respect is practically undisputed by
From what has been said, it is apparent that the question of who was in.fault in respect of the failure of the parties to agree on the appraiser proposed by the insured is not reached. They did not agree, and this suit resulted, and we hold that the defense interposed is not good (1) on the ground that the insurer never entitled. itself to demand an appraisal by making an effort to agree with insured on the sound value of and damage to the goods; and (2) on the ground that the attitude of the insurer throughout its defense to this
Each of these grounds are announced in Hickerson & Go. v. Insuarnce Companies, supra. That case has been extensively cited and approved by courts of last resort in other states, as will appear by examination of Volume, 4, Extra Annotations, L. R. A. 820. This case is cited also in the footnotes to Grand Rapids Fire Ins. Co. v. Finn, 50 L. R. A. 555; Grady v. Home Fire & Marine Ins. Co., 4 L. R. A. (N. S.) 291; Graham v. German American Ins. Co., 15 L. R. A. (N. S.) 1056. Examination of the cases cited will show that the grounds on which we place our decisions are well sustained by authority.
"We think there is no merit in any assignment of error made by the insurer in this ease. Nor do we think there is any merit in the assignment of error made by the insured. The statute invoked by him is chapter 141 of the Acts of 1901. It authorizes the penalty referred to, provided that it shall be made to appear to the court or jury trying the case that the refusal to pay the loss was not in good faith, and provided further that the imposition of the liability shall be within the discretion of the court or jury trying, the case, and be measured by the additional expense, loss, and injury thus entailed.
We think the chancellor was well within his judicial discretion in refusing a decree for the penalty in this cause upon the ground that the evidence on behalf of
It results from the above views that the decree of the chancellor is affirmed, with costs.