Hamilton v. Liverpool London Globe Ins Co

• Citation: 136 U.S. 242,10 S.Ct. 945,34 L.Ed. 419
• Parties: HAMILTON v. LIVERPOOL & LONDON & GLOBE INS. CO
• Decision Date: 19 May 1890
• Court: United States Supreme Court

136 U.S. 242

10 S.Ct. 945

34 L.Ed. 419

HAMILTON v. LIVERPOOL & LONDON & GLOBE INS. CO.

May 19, 1890.

This was an action upon a policy of insurance numbered 2,907,224, against fire, for a year from September 5, 1885, upon a stock of tobacco in the plaintiff's warehouse at 413 and 415 Madison street, in Covington, in the state of Kentucky. Among the printed 'conditions relating to the methods of adjustment of loss, and the payment thereof,' were the following: The tenth condition, after provisions relating to proofs of loss, certificate of a magistrate, submission to examination on oath, and production of books and vouchers, and certified copies of lost bills and invoices, further provided: 'When property is damaged, the assured shall forth with cause it to be put in order, assorting and arranging the various articles according to their kinds, separating the damaged from the undamaged, and shall cause an inventory to be made and furnished to the company of the whole, naming the quantity, quality, and cost of each article. The amount of sound value, and of the loss or damage, shall be determined by agreement between the company and the assured. But if, at any time, differences shall arise as to the amount of any loss or damage, or as to any question, matter, or thing concerning or arising out of this insurance, every such difference shall, at the written request of either party, be submitted, at equal expense of the parties, to competent and impartial persons, one to be chosen by each party, and the two so chosen shall select an umpire to act with them in case of their disagreement, and the award in writing of any two of them shall be binding and conclusive as to the amount of such loss or damage, or as to any question, matter, or thing so submitted, but shall not decide the liability of this company; and, until such proofs, declarations, and certificates are produced, and examinations and appraisals permitted, the loss shall not be payable. There can be no abandonment to the company of the property insured, but the company reserve the right to take the whole, or any part thereof, at its appraised value.' By the eleventh condition, '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 claimi n the manner above provided.' The answer put in issue the amount of loss, and set up that the plaintiff had not performed the conditions of the policy on his part, but had refused to submit a difference between the parties as to the amount of loss to appraisal and award as provided in the policy, and, against the defendant's protest, had sold the property insured, and deprived the defendant of its right under the policy to have an appraisal made, and to take the property, or any part thereof, at its appraised value, and had thereby waived the right to recover under the policy. At the trial the plaintiff offered evidence tending to prove the execution of the policy, a loss by fire on April 16, 1886, occasioned by the tobacco becoming saturated and impregnated with smoke, and thereby greatly damaged, and proofs of loss in accordance with the policy. The only other evidence introduced was a correspondence between the parties at Cincinnati, the material parts of which were as follows:

April 23, 1886. Defendant to plaintiff: 'If any claim for loss is to be made under policy No. 2,907,224 of this company, you will be expected to conform strictly to the conditions of said policy respecting the method of presenting claims for loss; and no conditions of the policy, or rights of the Liverpool and London and Globe Insurance Company thereunder, are in any manner waived or abandoned by that company. You will of course understand the necessity of not removing or disposing of any part of said stock, upon which loss is proposed to be claimed, pending the settlement of the claim, unless by agreement with the insurance companies.'

April 24, 1886. Plaintiff to defendant: 'It is necessary that I should have the room in which the property now is for the purpose of prosecuting my business. I propose to the company, furnishing it with the invoice of the cost or value of the property before the loss, to send the entire stock to be sold at auction.' 'If this is not assented to by the company, I shall be obliged to remove the property from my warehouse, and put it in storage; and, in my judgment, the expense attending it, and the disposition of it, will considerably increase the amount of the loss. The property is ready for examination by your company. I desire that such examination as you wish to make shall be made at once, and that you will advise me forthwith whether you assent to the sale of the property by public auction in the manner proposed, as the fairest and most satisfactory mode of ascertaining its present value.'

April 24, 1886. Defendant to plaintiff: 'This company will be pleased to have your claim presented in due course and form, giving' (among other things) 'the amount of loss or damage you claim on the whole, and also as against this company, as it may be necessary to have the stock appraised by disinterested appraisers after receipt of proofs. We cannot consent to its removal, unless it be at your own expense. It should, if possible, be left where it is, though there can be no objection to your removing it to some other warehouse at your own expense, where it can be readily inspected by appraisers. We cannot consent to your disposal of it by sale. The matter of determining the value or damage will be one for mutual conference and agreement.'

April 26, 1886. Plaintiff to defendant: 'I inclose proof of loss under policy of your company, with invoice attached, in compliance with the requirements of the policy.' 'The property described and damaged has been invoiced and arranged, and is ready for examination by your company. Such examination must be made at once, for the reason that I am obliged to occupy the premises in the prosecution of my business, and each day of delay involves considerable loss and expense to me. As before advised, I propose to send the entire stock to be sold at public auction in a few days, whereof I will give you notice. It can be readily inspected in a short time where it now lies.'

April 27, 1886. Defendant's agent to plaintiff: 'I beg to acknowledge receipt of papers purporting to be proofs of loss under our policies 2,907,224 and 2.823,517. The same will have prompt examination and attention. Noting your purpose soon to sell the stock, permit us to say that we protest against such disposition of it at this stage, and against this ex parte way of determining the loss sustained. Conditions of our policy provide the manner and mode of determining the loss or damage; and we hereby formally demand an appraisal of the stock as to value and damage under each policy, each party to name a competent and disinterested party.'

April 27, 1886. Plaintiff's counsel to defendant: 'Mr. Hamilton is obliged, for the prosecution of his business, to remove at once the property covered by the insurance from his factory in which the property was insured.' 'I do not find any provision in your policy restricting the assured, under such circumstances, from removing or selling the damaged property. If you claim that any such provision has that force, I should be glad if you should at once call my attention to it.' 'The property covered by the policy above referred to will require at least two weeks from this date to remove and bring to sale, and during that time it will be subject to whatever examination you may wish to make.' 'It does not occur to me that there can be any impediment in ascertaining the amount of the loss by an arbitration, in the manner provided by the policy, from the course which Mr. Hamilton indicates that he proposes to pursue.'

April 28, 1886. Defendant to plaintiff's counsel: 'It may be sufficient to point out that the appraisement provided by the terms of our policies, in the printed clause referred to, contemplates the possibility of the company exercising the right therein reserved to take the property, or any part thereof, 'at its appraised value.' A sale of the property prior to such appraisement would deprive the company of this right. We have refused, and still refuse, to consent to any disposition of the property prior to the appraisement, or to any ex parte method of fixing the amount of the loss, which our policies provide shall be determined 'by agreement between the company and the assured,' and by appraisement in case of difference. As to the removal of the property, your client has stated that the loss would thereby be materially increased. You will understand, therefore, that such additional loss would necessarily be borne by him, and not by the company, whose protest against such removal has been made. The proposed removal is expressly designed by Mr. Hamilton for his own advantage in the ordinary prosecution of his business, and the indemnity furnished by insurance does not extend to losses sustained in that direction. We protest against this removal, furthermore, because it takes away from the view of the appraisers the actual surroundings, location, and condition of the property at the time the difference of opinion arose, and would thus materially affect the judgment of the appraisers as to the loss sustained. We ask you for a direct answer to our request for an appraisement, and desire that any further communication be directed to that point only. You will please take notice that any disposition of the property by sale prior to the appraisement will be understood and accepted by us as a refusal upon the part of your client to permit such appraisement, and as a relinquishment of all claims under the policies of this company.'

April 28, 1886....