115 Ky. 109 | Ky. Ct. App. | 1903
Opinion op the court by
Aeeirming.
The county courthouse of Bourbon county was insured against loss or damage by fire in the sum of $50,000. Appellant was one of the insurers, to the extent of $1,000. This suit was to recover of appellant $1,000 because it was alleged that the building, during the continuance of appellant’s policy, had been totally destroyed by fire. The .answer denied that the loss was total. -It further pleaded that the loss was partial only; that it did not exceed in value $33,918.27, and that for -$34,000 it could, by using the part not destroyed by fire, be replaced in as good or better condition than it was just immediately before the fire. It was also pleaded that in the policy of insurance sued upon that there was a provision that the sum insured should
The court instructed the jury as follows: “(1) The court instructs the jury that the law is for the defendant, and
A peremptory instruction was asked by appellant, and refused. The jury’s verdict was for the plaintiff (appellee).
The peremptory instruction was asked upon the assumption that the policy provided for an arbitration to fix upon the fact and extent of the loss, in case of disagreement, and that such award was a condition precedent under the contract to a right of action on the policy. The argument is that the parties have by contract stipulated that the company shall not be liable to any payment until the amount of loss had been fixed, either by the agreement of parties' or, if they disagreed, by an appraisal and award by arbitrators provided for in the contract; that a disagreement did arise as to both the amount and extent of the loss, the insured claiming it was total, the insurer that it was partial. Counsel for appellant say: “We submit that whether the loss was partial or total was the very question which, under the statute, as written into the body of the contract, had been agreed to be submitted to appraisal.”
The statute in question is section 700, Kentucky Statutes, a,s follows:
“That insurance companies that take fire or storm risks on real property in this Commonwealth shall, on all policies issued after this act takes effect (in case of total loss thereof by fire or storm), be liable for the full estimated value of the property insured, as the value thereof is fixed in the face of the policy; and in cases of partial loss of the property insured, the liability of the company shall not exceed the actual loss of the party insured; provided, that the estimated value of the property insured may be diminished to the extent of any depreciation in the value of the property occurring- between the dates of the policy and the loss; and*117 provided further that the insured shall be liable for any fraud he may practice in fixing the value of the property, if the company be misled thereby.”
The policy sued on was issued since the adoption of that statute. The provision of the policy for arbitration in event of disagreement is in direct conflict with the statute in several particulars. For example, the policy provides that “this company shall not be liable beyond the actual cash value of the property at the time of any loss.” The statute fixes the liability of the company in event of total loss at the value of the property fixed in the face of th>e policy. The policy provides that the appraisal shall fix the cash value of loss or damage, “with proper deduction for depreciation however caused.” The statute says that only that depreciation in the value of the property occurring between the dates of the policy and the loss shall be deducted. Again, the policy reads: “[The loss or damage] shall in no event exceed what it would then cost the insured to repair or replace the saíne with material of like kind and quality.” So far as this clause refers to a total loss it requires the arbitrators to proceed on a basis of estimate entirely different from that fixed by the statute.
It can not be claimed, of course, that there was any legal duty upopi appellee to submit its claim to arbitrators before suit, other than may be found in the clause of the contract quoted.
Broadiy speaking, one can not by-contract bargain away his right to try his case before the courts (Whitney v. National, etc., Assoc., 52 Minn., 378, 54 N. W., 184; Badenfeld v. Mass. Mut. Acc. Assoc., 154 Mass., 77, 27 N. E., 769, 13 L. R. A., 263; Gray v. Wilson, 4 Watts, 39), although it is generally held that an agreement in a contract of insurance that the amount of the loss or damage shall be first aseer
But this is where there is a dispute as to the amount— where.it is not fixed by the policy. If the amount is fixed, and the agreement is to submit the question of liability to arbitration, it is void. Tunnel Co. v. Segregated B. M. Co., 19 Nev., 121, 7 Pac., 271; Seward v. Rochester, 39 Hun, 44, affirmed 109 N. Y., 164, 16 N. E., 348; Corbin v. Adams, 76 Va., 58; Alexander v. Campbell, 41 L. J. Ch., 478; Whitney v. National Masonic Acc. Assoc., 52 Minn., 378, 54 N. W., 184.
While the law favors settlements, arbitrations as a means of peaceful and expeditious settlement are enforced only where they have been executed, or where the agreement to submit to arbitrators does not oust the courts of their jurisdiction. Hill v. More, 40 Me., 515; Contee v. Dawson, 2 Bland, 264; White v. Middlesex R. Co., 135 Mass., 216; Randall v. Am. Fire Ins. Co., 10 Mont., 340, 25 Pac. 953, 24 Am. St. Rep., 50.
Applying these principles to appellant’s contention, it follows that xif the contract provided, as seems to be contended, that the- question of appellant’s liability was to be submitted to arbitrators, the provision was void. The line of demarcation in the cases wherein such provisions have been either upheld or rejected is, if the thing to be submitted is the one of an undetermined and undisputed fact, as a condition precedent to an action upon a recognized legal liability, the agreement will be enforced. But if the fact is already fixed, e. g., the value of the prop
Counsel insist that until .the extent of the damage or loss was ascertained it could not be known whether the loss was total, or partial only; that if it was -but partial, then the arbitration feature of the contract clearly, and under all the authorities, applied. . That the parties might have submitted the question of extent of damage or loss to arbitrators in this case, we do not doubt. Their award, though, in our opinion, could have been used as a basis of the settlement only in event the loss was partial. If it was total, no matter what may have been the value of the building (in the absence of fraud mentioned in the statute), the liability of the insurer was fixed at the sum named in the face of the policy; and the agreement to submit that ques
Furthermore, a careful inspection of the clause of the policy providing for the arbitration shows that it required the arbitrators not to determine the amount of loss or damage in fact, and under the terms of the statute, but to find the extent of the loss, to be estimated upon an entirely different basis, the one pointed out above in this opinion. This' was the only arbitration asked for by appellant, or provided for in the contract of insurance.’ The policy of the State has been to close this very question of value of property totally destroyed. The reasons supporting this policy are well known, and are not of recent promulgation. Appellant’s effort seems to be to have the law so construed that the parties by their contract may bind themselves in advance to defeat this policy of the law, and return to the very conditions sought to be corrected by the legislative action.
The circuit court properly decided that appellee’s failure to submit its claim of total loss to arbitration was not available as a defense to that claim.
The instructions given are based upon former decisions of this court. Caledonian Ins. Co. v. Cooke, 101 Ky., 412; 19 R., 651, 41 S. W., 279; Palatine Ins. Co. v. Weiss, 109 Ky., 464, 22 R., 994, 59 S. W., 509; Aetna Ins. Co. v. Glasgow E. L. & P. Co., 107 Ky., 77, 21 R., 726, 52 S. W., 975;
One of the complaints on account of the trial court’s rejecting evidence offered for appellant is that a letter -written by appellant’s adjuster to one White, whom it had selected as its representative in an effort to settle the loss, was not admitted. Mr. White had a conversation with County Judge Smith, of Bourbon county, relative to the loss, and handed the letter to Judge Smith, who read it. Some parts of the conversation then ensuing between White and Smith were admitted. It is claimed that the letter formed a part of the colloquy. It does, not appear1 that anything was said about this particular letter in that conversation. The letter itself does not appear to be relevant as aid in any way in determining whether the loss was total or partial. At best it is a testimonial of appellant’s fair intentions in the matter — a fact not in issue. We are of opinion that the letter was immaterial.
Appellant introduced several architects and builders as expert witnesses, who testified that in their opinion the building was not totally destroyed; that, on the contrary, by far the most of it could be utilized with perfect safety in rebuilding or repairing. They went into detail in describing the parts fit for that purpose. They had made out estimates of the work and material necessary, according to tlreir opinion, to restore the building. The estimates noted the cost of the labor and material. Appellant offered these estimates in evidence, which were rejected — we think properly so. Then appellant asked the witness, and offered to prove, the cost. This was refused. Some courts' have admitted this class of evidence as bearing on the question
The verdict was not flagrantly against the evidence. Indeed, there was much evidence to sustain it. There was also evidence, respectable in character, and considerable in extent, to the contrary. Photographs of the building taken during and after the Are are before us. They would seem to bear out appellant’s theory that the building was not so injured as to be totally destroyed. However, this class of evidence must necessarily be inconclusive. To the eye it conveys an impression that the witnesses refute. Even some of appellant’s witnesses. admit that the condition of the walls was such that they must have been torn away down to the top of the Arst story, yet an examination of the photographs does not give the slightest intimation of that fact. The theory of appellee was, and that was the substance of its evidence, that the walls were sprung, cracked, and so impaired by water and heat that they were un
We'perceive no reversible error'in the record, and the judgmnt is affirmed, with damages.