96 Tenn. 193 | Tenn. | 1896
Plaintiffs, L. D. Hickerson & Co., were insured against loss by lire in the three companies above named, the property insured being-lumber, upon a yard owned by them at Tullakoma, Tenn. The property having been destroyed by fire, suit was brought upon the policies. The causes were consolidated and heard before the Court and a
It is insisted that the suits cannot be maintained under the provisions of Avhat is termed the arbitration or appraisement clauses in the several policies. These clauses are substantially the same in each of the policies, and are the usual clauses found in the great majority of fire policies. ,We quote from the policy of the Royal Insurance Company, the others being, in substance and effect, the same: “The amount of sound Avalué and of the damage shall be determined by mutual agreement between the company and the assured, or, failing thus to agree, the same shall then be immediately ascertained by a detailed appraisal by competent persons, etc., one to be appointed by the assured and one by the. company (Avhieh tAvo persons shall, in case of a disagreement, appoint a third), and their report, rendered in detail in writing and made under oath, shall be binding on the company and the assured as to the amount of such loss or . damage, but shall not decide the legal liability of the company under this
. Similar clauses and provisions in fire policies have been upheld in the Courts, the leading case being Hamilton v. The Liverpool Company, 136 U. S., 242, where other authorities are collated. In some Courts such provisions have been declared invalid, and in others they have been much limited and circumscribed. See Biddle on Insurance, Sec. 1153. In no tribunal have they been allowed to oust the Courts of their, jurisdiction (Biddle on Insurance, Sec. 1153), and they must be so construed. as, upon the one hand, to protect the companies from fraudulent claims, and, at the same time, to secure the insured in the collection of his honest dues. It is evident that the object of such provisions is to furnish an easy court of appraisal and arbitration to settle real differences of estimate and opinion without the delay’ and cost of a suit for that purpose. Until such real difference has arisen out of an honest effort between the insurer and insured, there is neither occasion nor authority for an appraisal and arbitration.
In Boyle v. The Hamburg Insurance Company, 169 Pa., 349, it is held, in substance, that there is no authority for the appointment of appraisers when the insurers and the insured have made no effort to agree and settle between themselves. See, also, Chapman v. Rockford Insurance Company, 28 L. R. A., 405; Farnum v. Phœnix Insurance Company, 83 Cal., 246; Biddle on Insurance, Sec. 1157.
It appears in this case that Curry, an adjuster, went to the complainants’ books and compared the original approximate statement of loss made by them with the books, and found what he claimed were discrepancies. To these he objected, and a revised statement was more carefully prepared from the books by the plaintiffs and submitted to the companies, but this does not appear to have been ex-
These provisions in insurance policies are not intended to introduce or establish any new system for the adjustment of losses by fire, that does not obtain in other business settlements and transactions. It was never intended that an appraisal should be demanded by either party before any occasion for it had arisen. Otherwise they would both prove instruments to delay the settlement of losses, instead of aiding in their settlement. 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 objections must be pointed out by the company, and an honest effort must then be made to adjust the difference. 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 differences exist, and a counter statement, if necessary, should be furnished, showing the contention of the companies in such way that the difference, if practicable, may be adjusted and settled. If this shall fail after an honest effort is made, an appraisal may be demanded by either party, and only in such -event. In the selection of
In many Courts it has been held that such demand for appraisal is a waiver of other defenses upon the part of the insurer, notwithstanding the policy may provide that the award shall be binding only as to the amount of loss, and shall not decide the liability of the company under the policy. Upon reason it would seem that this result should follow, as it would only be a farce to adjust the amount of loss, when the company denied liability for any amount. In such case the company has nothing to arbitrate, and the amount of damage is a matter to be determined only after the preliminary questions of liability have been conceded or adjudged.
We are of opinion, therefore, that the insurer cannot demand an appraisal and arbitration of the amount of loss, while, at the same time, it denies all liability under its policy, and a demand for appraisal by the
In Biddle on Insurance, Sec. 1175, it is said: ‘ ‘ When the insurer declines to recognize any liability to pay, this does not constitute a dispute, and the arbitration provisions are waived by such refusal.”
Beach says, Section 1244: “If the company denies its liability for the loss, there would be nothing, from its standpoint, to arbitrate. Hence, the rule that such a provision is a condition precedent to a right to bring action on the policy does not apply when the company denies its liability.”
In the case at bar an appraisement was demanded by the insurance company, and the selection of arbitrators required by them without any real occasion therefor, so far as we can see from this record, and without any proper effort to otherwise adjust the loss, such as the policy contemplates, and before any differences had arisen, and the insured need not have consented thereto. It was, however, submitted to by the insured, and submission papers were drawn up by the companies and handed to the in
This is a short statement of what is apparent from the record was a tedious and unjustifiable wrangle over the selection of an umpire before the necessity or occasion for one had arisen. It appears from the record that, while the insurance companies were thus insisting upon an appraisal, they were at the same time demanding further proofs of loss and a compliance with other provisions of the policy, and warning tíre insured that the adjudication of the amount of loss by appraisers would not be conclu
In the McCullough case, above cited, the Court say: “The appraisers could not agree as to the value of the property destroyed or the amount of damage sustained, nor could they agree on a third man. McGraw (the appraiser for the insured) then suggested the names of four or five persons, some of whom resided in the county, some at Boonville,
In Niagara Insurance Co. v. Bishop, 154 Ill., 9, it was held that, where the appraiser of the company refuses to agree upon an umpire living in the vicinity of the fire, and insists upon a person of whom the other appraiser knows nothing, the insured is relieved from the necessity of an award before bringing suit.
In Braddy v. New York Bowery Insurance Co., 115 N. Y., 354 (20 S. E., 477), it was held that it was not unreasonable on the part of the appraiser of the insured to object to an umpire suggested by the appraiser of the company, upon the ground that he was unknown to the former, and that he lived remote from the place of the fire.
In Chapman v. Rockford Insurance Co., 28 L.
See, also, Biddle on Insurance, Sec. 1162, Yol. II., where it is said: “When each side duly selects an arbitrator, but the umpire fails of selection, there need not be a new arbitration proceeding.” Citing the case in 101 N. Y., 362.
We are satisfied that the action of the appraiser for the companies in this case was arbitrary, and his demands unreasonable, and the appraiser of the insured was not bound to submit to them. Nor, under the facts disclosed in this record, was the insured bound to submit, in the first instance, to an arbitration, or proceed further in an attempt at appraisal after the effort made, and they were justified in bringing their suit when they did.
The only other question which we think it material to consider is, whether the verdict or judgment in this case is excessive, or not supported by the evidence. The matter was submitted to a jury, and they have passed upon this question as best they could, and there is certainly evidence to support their finding. It is said that there is a discrepancy between the amounts stated in the proof of loss and the evidence given by the s.ame parties. This is explained by the assured with a statement that the proofs of loss were intended to be only approximate,
The plaintiffs are, we think, entitled to the market value of their property destroyed, so far as covered by their policies. The three-fourths value clause in the policies sued on in this cause has been held to be inoperative under our statute. Dugger v. Insurance Co., 11 Pick., 245 (32 S. W. Rep., 5). And the plaintiff is not restricted to that amount of recovery.
We see no error in the judgment of the Court below, and it is affirmed with costs.