Am. Ins. Co. of Newark v. Rodenhouse

• Decision Date: 26 November 1912
• Docket Number: Case Number: 1809
• Citation: 1912 OK 747,128 P. 502,36 Okla. 211
• Parties: AMERICAN INS. CO. OF NEWARK, N. J., v. RODENHOUSE.
• Court: Oklahoma Supreme Court

1912 OK 747

128 P. 502

36 Okla. 211

AMERICAN INS. CO. OF NEWARK, N. J., v. RODENHOUSE.

Case Number: 1809

Supreme Court of Oklahoma

Decided: November 26, 1912

Syllabus

¶0 1. INSURANCE -- Actions on Policy -- Conditions Precedent. The provisions of an insurance policy that the ascertainment or estimate of loss shall be made by the insured and the company, or, if they differ, then by appraisers, "and the amount of loss or damage having been thus determined, the sum for which this company is liable pursuant to this policy shall be payable sixty days after due notice, ascertainment, estimate and satisfactory proof of the loss has been received by this company, in accordance with the terms of this policy. * * * 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 damage, 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 parties thereto shall pay the appraisers respectively selected by them, and shall bear equally the expenses of the appraisal and umpire. This company shall not be held to have waived any provision or condition of this policy, or any forfeiture thereof, by any requirement, act, or proceeding on its part relating to the appraisal or to any examination herein provided for; and the loss shall not become payable until sixty days after the notice, ascertainment, estimate and satisfactory proof of the loss herein required have been received by this company, including an award by appraisers when appraisal has been required"--do not make it a condition precedent to bringing suit on a policy that the insured shall procure an award, or make a demand upon the insurer to have the property appraised.

2. SAME--Amount of Liability--Appraisal. Under such a provision in the policy, it is the duty of the party desiring an appraisal to make a demand upon the other party to join in having the property appraised.

3. PLEADING--Waiver of Errors-- Pleading Over. The petition, in an action on an insurance policy, failed to show that the plaintiff had performed the conditions precedent to an action on the policy. The defendant filed a demurrer, which was overruled. The defendant then filed an answer, which alleged that the plaintiff had failed to comply with certain provisions of the policy, which were set out specifically in the answer. Held, that by pleading over and undertaking to point out the conditions with which the plaintiff had failed to comply, and the manner of their breach, the defendant waived the grounds of its demurrer.

4. SAME- -Reply--Departure. Where, in an action on an insurance policy, the answer alleged that the insured had fraudulently misrepresented, in her proof of loss, the value of the property destroyed, this allegation was sufficiently put in issue by a general denial; and a further allegation in the reply that after the loss defendant offered to pay the policy in full if plaintiff would surrender another policy which she held in a different company, and that it did not return to her the proof of loss she had made, or ask for any additional proof, or claim that the proof furnished was false and fraudulent, and that it had thereby waived all the conditions of the policy, and was estopped to rely upon them, or any part of them, was surplusage, and did not constitute a material departure from the issues as raised by the petition and answer.

Burwell, Crockett & Johnson, for plaintiff in error.

Cruce, Cruce & Blakemore, for defendant in error.

ROSSER, C.

¶1 This was an action on a policy of fire insurance. There was a judgment for plaintiff, and defendant has appealed. The first proposition argued by the defendant is that the plaintiff could not recover, because the evidence showed that there was a disagreement as to the amount of the loss, and that before the plaintiff could sue she must have demanded an appraisal of the property. He relies on the following provisions of the policy. "This company shall not be liable beyond the actual cash value of the property at the time any loss or damage occurs, and the loss or damage shall be ascertained or estimated according to such actual cash value, with proper deduction for depreciation however caused, and shall in no event exceed what it would then cost the insured to repair or replace the same with material of like kind and quality. Said ascertainment or estimate shall be made by the insured and this company, or, if they differ, then by appraisers, as hereinafter provided, and the amount of loss or damage having been thus determined, the sum for which this company is liable pursuant to this policy shall be payable sixty days after due notice, ascertainment, estimate and satisfactory proof of loss have been received by this company in accordance with the terms of this policy. It shall be optional, however, with this company to take all, or any part, of the articles at such ascertained or appraised value, and also to repair, rebuild, or replace the property lost or damaged with other of like kind and quality within a reasonable time on giving notice, within thirty days after the receipt of the proof herein required, of its intention so to do; but there can be no abandonment to this company of the property described. * * * "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 damage, 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 parties thereto shall pay the appraisers respectively selected by them, and shall bear equally the expenses of the appraisal and umpire. "This company shall not be held to have waived any provisions or condition of this policy, or any forfeiture thereof, by any requirement, act, or proceeding on its part relating to the appraisal or to any examination herein provided for; and the loss shall not become payable until sixty days after the notice, ascertainment, estimate and satisfactory proof of the loss herein required have been received by this company, including an award by appraisers when appraisal has been required. * * * "No suit or action on this policy, for the recovery of any claim, shall be sustainable in any court of law or equity until after full compliance by the insured with all the foregoing requirements, nor unless commenced within twelve months next after the fire." Provisions for appraisement have been uniformly upheld by the courts, where the agreement for appraisal only required that the amount or extent of the loss should be passed upon by the appraisers, though it is generally held that agreements to submit the question of liability to arbitration will not be sustained. The provision of the contract involved here only requires the extent of the loss to be submitted. The only question here, then, is whether the insured was required to demand an appraisal before bringing suit. In the case of McNally v. Phenix Ins. Co., 137 N.Y. 389, 33 N.E. 475, the court, speaking by O'Brien, J., said:

"Two other grounds specified in the motion for a nonsuit may be considered together. Both are based upon the proofs of loss and matters occurring after the fire, and here it may be proper to note a manifest distinction to be observed in giving construction to the two classes of conditions to be found in a policy of insurance. Those conditions which operate upon the parties and the contract prior to the loss, such as the condition and situation of the property and the relations of the insured to it, and all statements and representations preceding the contract, are matters of substance, upon which the liability of the insured depends. Such stipulations are important, as their general object is to define and determine the limit of the risk assumed and to point out the conditions and circumstances under which the insurer has agreed to become liable in case of loss. Those conditions are to receive a fair construction, according to the intention of the parties. These conditions which relate to matters after the loss have, for their general object, to define the mode in which an accrued loss is to be established, adjusted, and recovered after the reciprocal rights and liabilities of the parties have become fixed by the terms of the contract, and are to receive a more liberal construction in favor of the insured. In determining the liability of the defendant, it is entitled to the benefit of its contract fairly construed, and can stand upon all of its stipulations. But when its liability has become fixed by the capital fact of a loss, within the range of the responsibility assumed in the contract, courts are reluctant to deprive the insured of the benefit of that liability by any narrow or technical construction of the conditions and stipulations which prescribe the formal requisites by means of which this accrued right is to be made available for his indemnification."

¶2 The provision for appraisers is that the insured and the company shall each select an appraiser, and that they shall select an umpire. Now, what is there in the provisions of the policy which puts the burden of demanding the appraisement upon the insured? For whose benefit was the provision with reference to appraisement inserted in the policy? Undoubtedly it was written into the policy for the benefit of the company. In order to...