Chandos v. Am. Fire Ins. Co. of Phila.

• Citation: 84 Wis. 184,54 N.W. 390
• Parties: CHANDOS ET AL. v. AMERICAN FIRE INS. CO. OF PHILADELPHIA.
• Decision Date: 31 January 1893
• Court: United States State Supreme Court of Wisconsin

84 Wis. 184

54 N.W. 390

CHANDOS ET AL.

v.AMERICAN FIRE INS. CO. OF PHILADELPHIA.

Supreme Court of Wisconsin.

Jan. 31, 1893.

Appeal from circuit court, Winnebago county; George W. Burnell, Judge.

Action by B. G. Chandos, administrator, and others, against the American Fire Insurance Company of Philadelphia, on a fire insurance policy. From a judgment for plaintiffs, defendant appeals. Reversed.Mylrea, Marchetti & Bird, (Gabe Bouck, of counsel,) for appellant, cited in support of the principle that the award of the appraisers is not affected by an error of judgment; Railroad Co. v. Myers, 18 How. 246; Insurance Co. v. Goehring, 99 Pa. St. 13; Smith v. Kaolin & Paint Co., 52 Vt. 469;Morse v. Bishop, 55 Vt. 231;Adams v. Ringo, 79 Ky. 211;Hartwell v. Insurance Co., 60 N. H. 293;Truesdale v. Straw, 58 N. H. 216;Pierce v. Pierce, 60 N. H. 355;Shepardson v. Perkins, 58 N. H. 354;Screw Co. v. Sheldon, 12 R. I. 324;Sherfy v. Graham, 72 Ill. 158;Mitchell v. Curran, 1 Mo. App. 453;City of Portsmouth v. Norfolk Co., 31 Grat. 727;Forbes v. Turner, 54 Ga. 252;Beam v. Macomber, 33 Mich. 127;Halstead v. Seaman, 52 How. Pr. 425;Fudickar v. Insurance Co., 62 N. Y. 392;Masury v. Whiton, 111 N. Y. 679, 18 N. E. Rep. 638; Goddard v. King, 40 Minn. 164, 41 N. W. Rep. 659. To support the doctrine that, in case of a breach in condition by the assured, the mortgagee cannot recover: Loring v. Insurance Co., 8 Gray, 28;Franklin Sav. Inst. v. Central Mut. Fire Ins. Co., 119 Mass. 240;Smith v. Insurance Co., 120 Mass. 90;Fitchburg Sav. Bank v. Amazon Ins. Co., 125 Mass. 431;Brunswick Sav. Inst. v. Commercial Union Ins. Co., 68 Me. 313; Baldwin v. Insurance Co., 10 Ins. Law J. 32; Nevins v. Insurance Co., 25 N. H. 22;Blanchard v. Insurance Co., 33 N. H. 9.

Hooper & Hooper, for respondents, to support the doctrine that the words, “loss, if any, payable to the mortgagee as his interest may appear,” are equivalent to an assignment, cited: Wood, Fire Ins. § 83; Insurance Co. v. Roe, 71 Wis. 33, 36 N. W. Rep. 594;Barrows v. Sweet, 143 Mass. 316, 9 N. E. Rep. 665; Dist. Tp. of Algona v. Dist. Tp. of Potts Creek, 54 Iowa, 286, 6 N. W. Rep. 295;Canfield v. Insurance Co., 55 Wis. 419, 426, 13 N. W. Rep. 252;Hammel v. Insurance Co., 50 Wis. 240, 6 N. W. Rep. 805;Manson v. Insurance Co., 64 Wis. 26, 24 N. W. Rep. 407;Alkan v. Insurance Co., 53 Wis. 136, 10 N. W. Rep. 91;Harrington v. Insurance Co., 124 Mass. 126;Browning v. Insurance Co., 71 N. Y. 508.

ORTON, J.

The facts sufficient to raise the questions of law on this appeal are substantially as follows: The appellant company issued its policy of insurance on the property of Marian Bensley, deceased, hereinafter described, February 1, 1889, for one year, of $1,000. The property was burned October 18, 1889. It was provided in the policy that “loss, if any, is payable to one Louisa W. L. Goff, as her mortgage interest may appear.” The said Louisa held a mortgage on the property insured by assignment of $10,000 principal. Insurance in othercompanies of $40,000 permitted, and actual insurance in other companies taken, of $36,750, to contribute proportionately to the loss. The property insured, with amount of insurance on each class, are as follows: “$400 on the frame water power pulp mill, building and additions thereto, including flumes, situate, detached, in Centralia, Wisconsin;” “$600 on fixed and moveable machinery, millwright work, grindstones, shafting, gearing, belting, pulleys, force pumps, water pipes and connections, implements and tools therein.” The jury found the loss or damage sustained to the first class of property to be $13,500, and to the second class $16,166; and the mortgage interest of said Louisa W. L. Goff in the premises insured, to be then $14,720. It will be seen that said mortgage interest was considerably less than the entire insurance. Judgment was entered for the plaintiff in the sum of $868.19, and the defendant has appealed therefrom. The jury found, also, that the value of a bridge leading to the mill, which was destroyed, was $625, and of a tramway near by was $500, and of stoves and pipes in the mill was $100, and the expenses of clearing away the debris of the machinery were $800.

The policy of insurance contains the following provision: “The amount of sound value and of damage to the property may be determined by mutual agreement between the company and the assured; or, if they fail to agree, the same shall then, at the written request of either party, be ascertained by an appraisal of each article of personal property, or by an estimate in detail, if a building, by competent and impartial appraisers, one to be selected by each party, and the two so chosen shall first select an umpire to act with them in case of their disagreement, and, if the said appraisers fail to agree, they shall refer their differences to such umpire; and the award of any two in writing, under oath, shall be binding and conclusive as to the amount of such loss or damage.” The said Chandos, the administrator plaintiff in this action, was the general agent and attorney of the assured in obtaining the insurance and in attending to the matters of the loss. The assured and the company being unable to agree as to the damage and loss to the property by fire, the company, on the 30th day of October, 1889, demanded of the assured that such damage and loss be arbitrated and appraised according to the above provision of the policy, to which the assured then and there agreed; and thereupon they entered into a written agreement, signed by the assured by her attorney, the said Chandos, and by all the insurance companies which had insured said property, whereby they selected and appointed two appraisers to appraise the loss and damage to the property of the said first class, and two other appraisers to appraise the loss and damage to the property of the said second class. The said appraisers, after having made oath to appraise and estimate said loss and damage impartially, and to make a just and conscientious award, and that they were not related to either party, appraised the loss and damage to the property of the said first class at the sum of $7,250.43, and the loss and damage to the property of said second class at the sum of $10,092.50. The assured submitted to the appraisers a schedule of the property lost or damaged, and such schedule did not include the bridge or tramway, or the stoves and pipe, or the clearing away the debris of the machinery, and those items were not claimed before the appraisers to be included in the policy or loss, and the appraisers therefore did not consider them. The defendant company, before the time of answering, offered judgment to be taken against it for the sum of $503.70, the amount claimed to be according to the appraisement, with interest thereon, together with the costs and disbursements of the action.

The plaintiff offered evidence tending to prove that the amount of the loss on the property in the said first class, was from $10,000 to $22,000; and on the property on the said second class was from $12,000 to $34,000, and the defendant relied upon said award of the appraisers. The circuit court held the award of the appraisers void, and did not consider it for the reason, as it is said, that the mortgagee never consented to the appointment of the appraisers, and was not represented in the matter of the appraisement in any way, and never consented thereto. The objections to the appraisement by the learned counsel of the respondent, are: First, that the said items of the bridge, tramway, stoves and pipe, and debris, were not considered by the appraisers; second, that the mortgagee was not a party to the awards, and had no notice thereof; third, that the appraisement was not in compliance with the provisions of the policy in this: that the appraisers did not first appoint an umpire before acting; fourth, that the two appraisers selected by the company were not impartial. The learned counsel of the appellant contends that the appraisement was strictly according to the policy, and the awards are binding and conclusive as to the amount of such loss or damage, and that, therefore, the judgment should be reversed. The above objections will be considered in their order, as the only material questions in the case.

1. As to the omission from the award of the items named, it is not at all certain that they are embraced within the description of the property insured, and there is no evidence conclusive of the question. The schedule submitted by the assured to the appraisers did not contain these items, nor did the assured request the appraisers to appraise them, or call their attention to any such omission. If they ought to have been specially considered by the appraisers, and were not, it was the fault of the assured, of which she ought not to complain. There is nothing in the description of the property that would embrace or suggest these items. The appraisers are presumed to have used their best judgment in ascertaining what particular articles or items of property were embraced within the words of general description, and their decision of the question is final and conclusive. Mitchell v. Bush, 7 Cow. 185;Burchell v. Marsh, 17 How. 349; Morse, Arb. 296; Sharman v. Bell, 5 Maule & S. 504; Rundell v. La Fleur, 6 Allen, 480;Fudickar v. Insurance Co., 62 N. Y. 392. In the great case of Water Power Co. v. Gray, 6 Metc. (Mass.) 131, Chief Justice Shaw said: “In general, arbitrators have full power to decide upon questions of law and fact, which directly or incidentally arise in considering and deciding the questions embraced in the submission. When not limited by the terms of the submission, they have authority to decide questions of law necessary to the decision of the matter submitted, because they are judges of the parties' own choosing.” This objection is not sustained.

2. That the mortgagee was not a party to the appraisement, and had no notice of it,...