Crossley v. Connecticut Fire Ins. Co.

• Decision Date: 06 April 1886
• Citation: 27 F. 30
• Parties: CROSSLEY v. CONNECTICUT FIRE INS. CO.
• Court: U.S. District Court — District of Massachusetts

27 F. 30

CROSSLEY v. CONNECTICUT FIRE INS. CO.

United States Circuit Court, D. Massachusetts.

April 6, 1886

Gaston & Whitney, A. French, and G. F. Williams, for plaintiff.

J. D Bryant and W. G. Russell, for defendants.

CARPENTER J.

This is an action at law on a policy of fire insurance. In advance of the trial, and from considerations of convenience, counsel have been heard to argue certain questions which will arise on the trial, in order that they may be provisionally determined. The same questions will also arise in the case of Reed v. Fire Ins. Co. of Philadelphia, and counsel therein have also been heard to argue these questions. The policies in question contain the following provisions:

'In case of any loss or damage the company, within sixty days after the insured shall have submitted a statement as provided in the preceding clause, shall either pay the amount for which it shall be liable or replace the property,' etc. 'In case any difference of opinion shall arise as to the amount of loss under this policy, it is mutually agreed that the said loss shall be referred to three disinterested men, the company and the insured each choosing one out of three persons to be named by the other and the third being selected by the two so chosen provided, that neither party shall be required to choose or accept any person who has served as a referee in any like case within four months; and the decision of a majority of said referees in writing shall be final and binding on the parties.'

At the trial of these causes evidence will be offered tending to show the amount of loss under the policy, but such evidence so offered will not consist in any part of the award of referees appointed under the provisions of the clause last quoted. To the introduction of evidence so offered the defendants will object on the ground that the agreement for reference contained in the policy is to be construed to make the award of referees a condition precedent to any proof of amount of loss, or to make it the sole evidence as to such amount. When the testimony shall be closed, the defendants will pray a ruling that the verdict shall be for the defendants on the ground that the effect of the agreement for reference is to make such a reference a condition precedent to the right of the insured to recover.

Upon these two motions a vital question will be whether the agreement for reference is, on the one hand, a collateral contract, or, on the other hand, is expressly or by implication a condition precedent to recovery or to any proof of the amount of the loss. Upon examination of authorities, I am of opinion that the agreement is a collateral contract only. The questions which I have stated, as well as several other questions which in different views of the case might be material, have been argued very fully, and with great skill and learning, and abundant citation of authorities. The cases, however, upon which counsel on both sides mainly rely are but few in number.

The defendants refer to Scott v. Avery, 5 H.L.Cas. 811. The agreement in that case was 'that the sum to be paid by this association to any suffering member for any loss or damage shall, in the first instance, be ascertained and settled by the committee; and the suffering member, if he agrees to accept such sum in full satisfaction of his claim, shall be entitled to demand and sue for the same as soon as the amount to be paid has been so ascertained and settled, but not before; which can only be claimed according to the customary mode of payment in use by the society; and if a difference shall arise between the committee and any suffering member relative to settling any loss or damage, * * * in such case the member dissatisfied shall select one arbitrator, * * * which three arbitrators, or any two of them, shall decide upon the claims and matters in dispute according to the rules and customs of the club, to be proved upon oath by the secretary. ' The defendants also refer to Delaware & H. Canal Co. v. Pennsylvania Coal Co., 50 N.Y. 250. In that case the contract was that 'in case of an enlargement of the said canal the said president, managers, and company, and their successors and assigns, may also charge and collect an additional toll on coal transported in pursuance of this agreement, at a rate per ton of 2,240 pounds, to be established after the completion of such enlargement in the manner following, viz.,' etc. In these two cases, therefore, it appears that the contract expressly was to pay such a sum as should be fixed by arbitration according to a prescribed plan.

The defendants claim, however, that the agreement here is made a condition precedent by a necessary implication. Against this view the plaintiffs cite, among other cases, Dawson v Fitzgerald, L.R. 1 Exch.Div. 257; Schollenberger v. Phoenix Ins. Co., 7 Ins.Law J. 697; Reed v. Washington F. & M. Ins. Co., 138 Mass. 572; Clement v. British America Assur. Co., (Sup.Ct. Mass.) 5 N.E.Rep. 847. I therefore decide that should the questions to which reference has been made be raised before me in a trial of these cases with a jury, I should overrule the objection of the defendants, and permit the evidence of amount of loss to go to the jury; and I should overrule the request of the respondents for an instruction...