Canfield v. Watertown Fire Ins. Co.

• Decision Date: 09 September 1882
• Citation: 13 N.W. 252,55 Wis. 419
• Parties: CANFIELD v. WATERTOWN FIRE INS. CO.
• Court: Wisconsin Supreme Court

55 Wis. 419

13 N.W. 252

CANFIELD

v.WATERTOWN FIRE INS. CO.

Supreme Court of Wisconsin.

Filed September 9, 1882.

Appeal from circuit court, Milwaukee county.

Action to recover for a loss by fire of property covered by a policy of insurance thereon, issued by the defendant company. Such insured property consisted of the plaintiff's “room furniture, fixtures, show-case, piano, photographic apparatus, including cameras, pictures, mirrors and their frames, and negatives. The complaint contains a general statement of the policy and loss, and an allegation of due performance by the plaintiff of all conditions therein to be performed by him. The defendant in its answer set out the following condition in the policy: “If differences of opinion should arise between the parties hereto as to the amount of loss or damage, the subject shall be referred to two disinterested and competent men, each party to select one, (and in case of disagreement they to select a third,) who shall ascertain, estimate, and appraise the loss or damage, and their award in writing shall be binding on the parties hereto, each party paying one-half the expense of reference.”

The answer alleges as a defense to the action a submission in writing, pursuant to the above condition entered into by the parties, and award or appraisement of the plaintiff's loss by the arbitrators therein named, and payment of the amount thereof to the plaintiff. On the trial the defendant proved the submission, the award and payment of the amount thereof to the plaintiff, but the undisputed evidence shows that the plaintiff expressly refused to receive the money in full satisfaction of his claim, and only received it as a part payment of his loss. For the purpose of showing that such award was invalid the plaintiff offered testimony to prove, (among other things:) “That the appraisal and award were procured by misrepresentation and fraud on the part of the insurance companies, in that through their representatives they refused to permit the plaintiff to make any statement or offer any testimony to the arbitrators upon the subject, and insisted that he was not entitled to recover for unregistered negatives which were severed by the policy, and that the plaintiff was also informed that he must leave the room in which the arbitrators were at work, and was given no opportunity to go before them; that the appraisal and award was made by the arbitrators at the sum named through mistakes of facts and law upon their part as to whether the policy covered the unregistered negatives.” This testimony was excluded by the circuit judge, and a verdict was returned for the defendant pursuant to the direction of the judge. A motion for a new trial was denied, and judgment for the defendant entered pursuant to the verdict. The plaintiff appeals from the judgment.Davis, Riess & Shepard, for appellant.

Cottrill, Hanson & Brown, for respondent.

LYON, J.

1. The learned counsel for the defendant maintained in his argument that the stipulation to arbitrate contained in the policy operates to make an award under it a condition precedent to the right of the plaintiff to maintain an action for his loss in a case in which, as in this case, there is a dispute as to the amount of the loss, and the insurer has duly demanded a submission of the question of difference to arbitrators. If this is so, it would seem that the plaintiff must allege and prove a valid award in order to maintain his action; in which case, of course, the sum awarded would be the measure of his recovery. If the award actually made in this case is valid, the defendant has paid the plaintiff the sum awarded, which would be a full payment of his loss, and this action cannot be maintained. If the award is invalid, the plaintiff must (if the position of counsel is correct) procure a valid award, and thus determine the amount of his loss before he can maintain an action on his policy. Hence, whether the award already made is valid or invalid, the plaintiff was not entitled to recover, and the court properly directed a verdict for the defendant.

There is no stipulation in the policy that an award shall precede the right to sue upon the policy. In the absence of such stipulation the law is well settled that an agreement to ascertain the amount of a loss by arbitration is not a condition precedent, a waiver or performance of which, or any offer to perform, must be shown by the plaintiff. Wood, Ins. p. 151, § 431, and case cited in notes. Whether the rule would be different if the policy provided that the award should precede the right to sue upon the policy is not here determined. The cases seem to be in hopeless conflict on the question. There is some discussion of it and reference to some of the cases in the opinion of Mr. Justice Orton in Phœnix Ins. Co. v. Badger, 53 Wis. 283, [S. C. 10 N. W. REP. 504,] but the question is not there decided, the judgment going upon grounds which rendered the question immaterial. It must be held that, under the stipulation to arbitrate contained in the policy in suit, an award is not a condition precedent to the plaintiff's right to maintain an action on such policy.

2. The next question is, can the plaintiff show in this action that the award is invalid, or must he resort to an equitable action to set it aside? The general rule of the common law is that, in an action at law upon an award, it cannot be impeached by pleading as a defense matters not appearing upon the face of the award, although such matters may constitute a good cause for a bill in equity to set the award aside. Morse, Arb. & Award, 595; Ferson v. Drew, 19 Wis. 225.

It was settled in Ferson v. Drew that the Code had changed the rule by permitting a...