Chainless Cycle Mfg. Co. v. Sec. Ins. Co. of New Haven, Conn.

• Citation: 169 N.Y. 304,62 N.E. 392
• Parties: CHAINLESS CYCLE MFG. CO. v. SECURITY INS. CO. OF NEW HAVEN, CONN.
• Decision Date: 31 December 1901
• Court: New York Court of Appeals

169 N.Y. 304

62 N.E. 392

CHAINLESS CYCLE MFG. CO.

v.SECURITY INS. CO. OF NEW HAVEN, CONN.

Court of Appeals of New York.

Dec. 31, 1901.

Appeal from supreme court, appellate division, Fourth department.

Action by the Chainless Cycle Manufacturing Company against the Security Insurance Company of New Haven, Conn. From a judgment of the appellate division (64 N. Y. Supp. 1060) affirming a judgment for plaintiff, and from an order denying a new trial, defendant appeals. Affirmed.

This action was upon a policy of fire insurance for the sum of $2,500 issued by the defendant to the plaintiff upon its stock of bicycles, materials, supplies, and machinery used in manufacturing and finishing bicycles, including parts manufactured and in process of manufacture. The answer alleged that the plaintiff had refused to unite with the defendant in appraising the loss as provided by the policy, and that therefore the action was prematurely brought. No defense on the merits was set forth. The stipulation contained in the policy which, as it is claimed, was not complied with by the plaintiff, is as follows: ‘In the event of disagreement as to the amount of loss, the same shall, as above provided, be ascertained by two competent and disinterested appraisers,-the insured and this company each selecting one,-and the two so chosen shall first select a competent and disinterested umpire. The appraisers together shall then estimate and appraise the loss, stating separately sound value and damages, and, failing to agree, shall submit their differences to the umpire, and the award in writing of any two shall determine the amount of such loss. * * * The loss shall not become payable until 60 days after the notice, ascertainment, estimate, and satisfactory proof of the loss herein required shall have been received by this company, including the award of appraisers, when an appraisal has been required.’ At the close of the evidence the trial judge submitted the following questions to the jury: ‘First. Did the defendant waive an appraisal of the property? Second. What was the amount of damage to the stock, if any? Third. What was the amount of damage to the machinery and tools, if any?’ The jury answered the first question in the affirmative, and found that the total amount of the loss on stock was $7,500, and on other property $2,500. The court thereupon directed that a verdict be entered in favor of the plaintiff for $1,024.55, which was the defendant's proportion of the loss, according to the special verdict. Upon appeal to the appellate division the judgment entered accordingly was affirmed, two of the justices dissenting, and the defendant appealed to this court.

Parker, C. J., and O'Brien, J., dissenting.

Horace McGuire, for appellant.

Moses Shire, for respondent.

VANN, J. (after stating the facts).

The policy in question was issued and countersigned by the firm of M. Beir & Co., the dulyauthorized agents of the defendant in the city of Rochester. On the morning of August 16, 1899, the day of the fire, these agents notified the defendant by mail that a loss had occurred, that six other companies were interested therein, that the probable amount of the entire loss was $2,500, and that the proportion of the defendant was $25. They closed their letter with these words: ‘Shall we have Mr. Norden represent and adjust for you?’ The defendant answered by telegram, instructing said agents ‘to look after the loss in the usual way, or wait for the adjuster.’ M. Beir & Co. thereupon turned the matter over to Mr. Norden, an insurance adjuster of wide experience,who resided in Rochester, with instructions ‘to look after’ the loss and adjust it. On the 19th Mr. Norden, in company with a special agent of the defendant, looked over the property with the president of the plaintiff, and directed him to make an inventory, giving the valuation of the goods and the amount of the damage, and in the meantime to clean and oil the iron and nickel parts and appliances. They also informed him that as soon as this was done they would make an adjustment of the loss, and named the 24th for that purpose. On that day Norden went to the factory alone, and was presented with a statement of the loss, amounting to upwards of $21,000. He expressed some surprise because it was so large, and said he would like time to correspond with his companies. The plaintiff requested him to telegraph, ‘as it was not right to keep the insured tied up there indefinitely,’ and suggested that they should ‘enter into an appraisal then and there.’ Mr. Norden said that he was not prepared to go into an appraisal, but would like to consult his companies, and that he would ‘set a time for a meeting when we could either appraise or settle the loss.’ After notifying the plaintiff that he would call a meeting of the adjusters of the companies, to be held in a few days, he telegraphed the defendant that the claim of the plaintiff was exorbitant, and added: ‘Authorize appraisal or send special next Tuesday. Answer.’ It does not appear that the defendant answered the telegram, but on the following Tuesday, August 29th, the adjusters for all the companies, including the special agent of the defendant, met at the factory and looked over the property. A statement was presented to them embracing all the items of loss, as subsequently inserted in the proofs; but as the plaintiff had no copy, it was returned to its president, and he was notified to prepare and serve proofs of loss. The adjusters appointed a committee, consisting of Mr. Norden and two others, to take charge of the matter, but neither the adjusters nor the committee either met or appointed a meeting; and Norden, assuming to act as chairman, took charge of the loss. The plaintiff at once prepared its proofs of loss, and served them on the various companies interested. The proofs for the defendant were mailed to it on the 30th of August, with a letter from the plaintiff stating that ‘unless you adjust this loss or agree to an appraisal on or before Tuesday, September 5th, 1899, you will be deemed to have waived your rights to such appraisal, and we will proceed to dispose of the property to the best possible advantage.’ The defendant did not answer this letter, and, so far as the plaintiff knew, paid no attention to it. On the 31st of August, Mr. Norden, acting as chairman of the committee, wrote to the defendant, asking ‘that upon receipt of proofs of loss, which have been demanded by the committee, you will mail them to me at once. * * * All precautions have been taken to avoid litigation.’ The proofs of loss reached the defendant on the 1st of September, and on the 4th its secretary wrote Mr. Norden, as chairman, inclosing the proofs, stating that they were received on the 1st instant, and closing as follows: ‘We have taken no action on them, relying on you and your committee to do all that is needed.’ This letter, which contained no instructions with reference to the appraisal or to the sale proposed by the plaintiff, did not reach Mr. Norden until the 6th. In the meantime the president of the plaintiff met Norden on the 5th, and in its name demanded an appraisal. Mr. Norden asked for the name of the man selected as its appraiser, and, upon being told, said that he did not want an appraisal, but wanted to settle. Negotiations...