1. A stipulation in a policy of insurance providing that in case of difference of opinion as to the amount of loss or damage, there shall be a reference of the same to arbitration, does not bar the insured of his right of action without such reference, unless the stipulation amounts to a condition precedent to his right to resort to the courts, or makes such submission the only mode by which the amount of damage is to be ascertained, or by which the liability of the company can be fixed. Either of these two latter provisions would, at last, be equivalent to making the submission a condition to be performed before suit. In all the eases I have been able to find where the plaintiff was held bound by the stipulation, it was ruled that the terms of the policy were such as to make the reference a condition precedent to the right of the assured to maintain an action. In Scott vs. Avery, 5, House of Lord’s cases, 811, the stipulation was “the sum to be paid $ * * shall, in the first instance, be ascertained by the committee.” *111It was there held that the terms of the policy made the ascertainment of the loss by the committee or by arbitration, a condition precedent to the rig-lit of action: See Elliott vs. R. E. Assurance Company, 2 Law reports, 237. The case of Millandon vs. Atlantic Insurance Company, 8 Louisiana reports, 557, referred to by counsel for plaintiff in error, does not show, as reported, -what were the terms of the stipulation, whether or not they amounted to a condition precedent. The decision is generally, that “by the ninth condition of insurance, when the claim was made by the plaintiff for loss, if the defendant had offered to refer the question to arbitration, the plaintiff would have been - bound to accept.” No reason is given, no authority referred to, and no statement of what the ninth condition was. Flanders, on Fire Insurance, states the rule thus: “If the loss incurred by the assured is not paid, he may sue for the amount, notwithstanding a stipulation in the policy to refer all disputes to arbitration,” page 576. He adds, on the ensuing page, “ If the contract, however, is in such terms that a reference (o a third person or to a board of directors, is a condition precedent to the right of the party to maintain an action, then he is not entitled to maintain it until that condition is complied with. But if, on the other hand, the contract is to pay for the loss, with a subsequent contract to refer the question to arbitration, contained in a distinct clause collateral to the other, then -that contract for reference does not oust the jurisdiction of the courts, or deprive the party of his action:” See May on Insurance, 593, 598, 606, 167; Digest of Insurance Decisions, by Littleton & Blatchley, (2d edition, by S. G. Clark,) pages 97 and 99; Roper vs. Lendon, 1 E & E., Q. B., 825. Phillips, in his work on Insurance, says, in a note to page 37, “ the provisions for arbitration have little or no practical efficacy in marine insurance in Great Britain or the United States. The assured may bring a suit for a loss without offering a reference,” and cites, 2 Story’s Equity Jurisprudence, sections 1450, 1457; Kidd vs. Hollister, 1 Wil. 149; 8 T. R., 139; Robinson vs. Georges, 17 Maine, 131. I have examined several of these, and find *112they support the rule as laid down by Phillips. Baron Alderson said, in a case in 20 Law and Equity, 327, “ the contract might have been framed so as to confine the decision of tiie committee (the referee) solely to the amount of loss, and that at the trial of any action neither party shall inquire into the amount of loss, and that the only question shall be the right to recover.” Upon the whole view of (he question, both upon principle and authority, we think the nile, as stated from Flanders, is correct, and that such stipulation must clearly show that it is a condition precedent before it can bar the assured of his action. Even then the action of the insurer might be such as to amount to a waiver or estop him from setting it up as a defense.
2. An express condition in the policy, that “ the company shall not be answerable for loss or damage by theft at or after any fire,” is binding on the insured. This was not controverted in the argument. It was not claimed that the insured was not bound by such a stipulation, or that, under it, the company were liable for loss by theft, but that, in this case, the agent of the insurers took charge of the goods and the house in which they were kept, during the fire and removed the goods, and that they were consequently responsible for the theft of the goods. And the jury must have ’included in their verdict a large amount for what was stolen; for the highest proven amount claimed for damage to the goods, caused by their removal from the store, was $2,738.40. A much larger amount than that seems, under the evidence, to have been lost by theft. The verdict was for $5,000 00, which certainly was increased to that sum by' the testimony as to the stolen goods. '
3, 4. We do not think the evidence shows, that the store and goods were so taken into the possession and control of the company as to make it liable for the theft which is charged to have been committed. As the case may undergo a new trial, it is unnecessary, and might work prejudice to discuss the testimony on this’point. The court charged the jury, that “if they should find that the plaintiffs had sustained *113damage, they should not include in such dam'age any amount of loss by theft at or after any fire, such losses being excluded by the conditions and stipulations referred to in the policy.”. The verdict could not have been given for as much as it.was, without including at least a portion of the loss caused by theft. It is true that one of the plaintiffs states in his testimony that the damage to the goods saved was about fifty per cent. This would have made the verdict upwards of $5,000; but the witness immediately adds, “though we did not claim that amount.” The testimony of Daniels, the clerk and general manager of plaintiffs, and who aided in taking the inventory after the fire, puts the damage to the goods saved at twenty-five per cent. — $2,738 40. One of the parties, who acted with Daniels in making out the inventory, puts the damage still lower. We think the court should have granted a new trial, or required the plaintiffs to have remitted from the verdict a sum which would have reduced it to that amount, to-wit: to the amount of $2,738 40.
5. We accordingly direct that the judgment be reversed and a new trial granted, unless the plaintiffs below will write from the verdict and judgment the sum of $2,261 60; and upon the same being done, the judgment for the remainder shall stand affirmed.
AI-generated responses must be verified and are not legal advice.
