Dworkin v. Caledonian Insurance Co.

• Decision Date: 13 December 1920
• Parties: HARRY DWORKIN and S. GRENT v. CALEDONIAN INSURANCE COMPANY, Appellant
• Court: Missouri Supreme Court

226 S.W. 846

285 Mo. 342

HARRY DWORKIN and S. GRENT v. CALEDONIAN INSURANCE COMPANY, Appellant

Supreme Court of Missouri

December 13, 1920

Appeal from Jackson Circuit Court. -- Hon. Harris Robinson, Judge.

Reversed and remanded.

C. C Crow for appellant.

(1) Sec. 868, R. S. 1909, enacted in 1909, Laws 1909, p. 347, as construed in the Young case, is in direct conflict with Art II, Sec. 30, Constitution of Missouri, and XIV. Amendment of U. S. Constitution. If the statute is to be construed as stated in the case of Young v. Insurance Company, 269 Mo. 1, the plaintiffs and defendant are absolutely prohibited from entering into an agreement or a contract by which the amount of loss, if any, under the policy sued on could be ascertained by appraisement, and it is, and at all times has been, the law that parties have a constitutional right to enter into contracts of this character. Such a contract does not come within the police power of the State. Adinoln v. Hazlett, 242 Pa. 25; State v Missouri T. & T. Co., 181 Mo. 536; State v. Loomis, 115 Mo. 307; State v. Jule, 129 Mo. 337. To contract is a property right. Hickman v. Mitchell, 172 F. 963; Mathews v. Peo, 202 Ill. 389. (2) This court in the case of Young v. Insurance Company, 269 Mo. 1, has something to say about the construction of this statute, but every word with reference to the construction of the statute is obiter. The statute expressly provides in terms that cannot be mistaken, against arbitration, and reads: "providing for an adjustment by arbitration;" while the wording of the contract in this case is appraisement of the amount of the loss. Arbitration settles the case and adjudicates the law and the facts, but appraisement merely refers to the amount to be ascertained by appraisement of an unliquidated claim. Stevens v. Fire Insurance Company, 120 Mo.App. 103. On the question of obiter, see, State v. Railroad Co., 242 Mo. 359. "Adjustment by arbitration" cannot apply to a contract providing for ascertaining the amount of an unliquidated claim by appraisement, and we assume that no such ruling would have been made had the question been for decision. Zallee v. Ins. Co., 44 Mo. 530; 5 Corpus Juris, sec. 4, p. 17; Garret v. Macy, 10 Mo. 161. (3) The court erred in giving plaintiffs' instruction 5. Mr. A. B. Harris, agent for defendant, wrote a letter to plaintiffs, after many efforts had been made to settle with them, in which letter he stated that the amount demanded in proofs of loss was grossly excessive, and demanded an appraisement under the terms of the policy. This letter was introduced in evidence by the plaintiffs, making the records show a specific demand for an appraisal of the amount of loss, and this letter was introduced in evidence without any qualifications and without objection. Afterwards, defendant offered in evidence the answer of plaintiffs to the letter written by Mr. Harris, refusing to appraise and to which letter plaintiffs interposed vigorous objections and the court admitted the letter in evidence, but at the same time limited its effect to the question as to vexatious delay. This instruction was clearly erroneous, because the plaintiffs having introduced the first letter without qualifications, could not object to the second letter in response thereto and have the effect thereof qualified. (4) The court erred in refusing to give, at the request of defendant, Instruction 1. This instruction was requested in pursuance to our theory that as construed in the Young case, the statute is unconstitutional and void, and further that the Supreme Court had expressed an obiter opinion that the clause of our policy providing for appraisement was void, or at least voidable at the election of the plaintiffs, and on the further theory that the plaintiffs having introduced testimony showing a demand for an appraisal under the terms of the policy, and there being no showing that the demand was complied with, but distinct showing that plaintiffs refused to appraise, the issue was before the court whether the statute is constitutional or not, and even if the statute is constitutional, then even though the construction placed on the statute be adopted that was placed upon it in the Young case, the instruction was still proper because plaintiffs made the issue and waived any objection they might have thereto.

Xenophon P. Wilfley, William S. Hogsett and Murat Boyle, amici curiae.

Section 868. R. S. 1909, relating to agreements providing for an adjustment by arbitration, does not nullify the appraisal clause in the policy, providing for the ascertainment of the amount of loss by an appraisal, (1) The statute does not use the term "appraisal," but is limited expressly to "arbitration." The policy does not use the term "arbitration," but provides only for an "appraisal.". (2) There is a wide difference between "appraisal" and "arbitration." Zallee v. Laclede Ins. Co., 44 Mo. 530; Harmon v. Ins Co., 170 Mo.App. 309; Paint Co. v. Ins. Co., 165 Mo.App. 30; Pierce Loan Co. v. Ins. Co., 200 S.W. 120; Non-Royalty Shoe Co. v. Phoenix Assurance Co., 178 S.W. 246; Fleming v. Phoenix Assurance Co., 75 Hun, 530, 27 N.Y.S. 488; Ins. Co. v. Ries, 80 Ohio St. 272; Martin v. Ins. Co., 64 N.Y.S. 873; Brink & Mehlen v. Ins. Co., 5 Robertson (N. Y.) 104; American Steel Co. v. Ins. Co., 187 F. 730; Sholz v. Mills, 176 Mo.App. 352; Holmes v. Sheppard, 49 Mo. 600; Yeatman v. Clemens, 6 Mo.App. 210; Curry v. Lackey, 35 Mo. 389; Garred v. Macey, 10 Mo. 161; Leonard v. Cox, 64 Mo. 32; Toledo v. Zenith Trans, Co., 184 F. 391; The Glencairn, 78 F. 379; Railway v. Moore, 64 Pa. 91; Sebree v. Board of Education, 254 Ill. 438, 446; M. E. Church v. Seitz, 74 Cal. 287; Foster v. Carr, 135 Cal. 83; Willingham v. Veal, 74 Ga. 755; Giles v. Railway, 57 Kan. 70; Norton v. Gale, 95 Ill. 533; Palmer v. Clark, 106 Mass. 389; Rochester v. Whitehouse, 15 N.H. 468; Hale v. Handy, 26 N.H. 216; Atkinson v. Whitney, 67 Miss. 655; Noble v. Grandin, 125 Mich. 383; Birdsall v. Ayres, 21 N.Y.S. 896; Garr v. Gomez, 9 Wend. 649; Bierly v. Williams, 32 Va. (5 Leigh) 700; Turner v. Railway, 132 N.Y.S. 418; Kelly v. Crawford, 5 Wall, 786; Stose v. Heissler, 120 Ill. 433; Keiser v. Berks County, 253 Pa. 167; Wurster v. Armfield, 175 N.Y. 256; Thompson v. Newman, 171 P. 982; Omaha Water Co. v. Omaha, 162 F. 225; 5 Corpus Juris, 17. (3) If the words of a statute are plain and unambiguous it is not within the province of a court to resort to other means of interpretation than the words themselves. Railway v. Clark, 53 Mo. 216; State v. Mills, 161 Mo.App. 185; State v. Jaeger, 157 Mo.App. 340; Koch v. Bridges, 45 Miss. 247; U. S. v. Hartwell, 6 Wall. 396; Scott v. Reed, 10 Pet. 527; People v. Sands, 102 Cal. 16; McCay v. Railway, 75 Conn. 608; Gilbert v. Dutruit, 91 Wis. 665; Siegel v. Swartz, 117 F. 13; Lemonius v. Mayer, 71 Miss. 552; Rosen Plaenter v. Roessels, 54 N.Y. 262; Farrell Foundry v. Dart, 26 Conn. 382; Woodbury v. Berry, 18 Ohio St. 462; Douglas v. Freeholders, 38 N. J. L. 214. (4) Even if the court believes that the Legislature intended something not expressed by the act, it cannot depart from the language of the act if free from ambiguity. Henry County v. Evans, 97 Mo. 55; Gregory v. Kansas City, 244 Mo. 552; State ex rel. v. Board of Curators, 268 Mo. 608; Drainage District v. Winkelmeyer, 212 S.W. 895; Kehr v. Columbia, 136 Mo.App. 329; Smith v. State of Maryland, 66 Md. 215; Woodbury v. Berry, 18 Ohio St. 456; Johnson v. Railway, 49 N.Y. 462; Broadbury v. Wagenhorst, 54 Pa. St. 182; Alexander v. Worthington, 5 Md. 471; United States v. Ragsdale, Fed. Cas. No. 16113. (5) Technical words, and words which have acquired a peculiar and appropriate meaning in the law, must be interpreted in accordance with their technical import. Sec. 8057, R. S. 1909; Patchin v. Bousack, 52 Mo. 433; Ex parte Bethurum, 66 Mo. 548; Wilson v. County, 132 Mo. 387; State v. Clipper, 142 Mo. 474. (6) "Arbitration" and "appraisal" have been rigidly distinguished by the courts, and each term has been given a technical meaning, and a peculiar and appropriate meaning in the law; and it is therefore beyond the province of the court to construe the one term to include the other. Authorities, supra. (7) At the time Section 868 was enacted this court had clearly defined the difference between "arbitration" and "appraisal" in numerous decisions. The Legislature presumably knew the distinction between the terms as this court had defined them, and presumably used the term "arbitration" advisedly, and did not intend thereby to mean "appraisal." (8) Compliance by the assured with the company's demand for an appraisal is a condition precedent to the institution of suit upon the policy. Non-Royalty Shoe Co. v. Ins. Co., 178 S.W. 253; Stevens v. Ins. Co., 120 Mo.App. 104; Gragg v. Ins. Co., 140 Mo.App. 685; Gragg v. Ins. Co., 132 Mo.App. 405; James v. Ins. Co., 135 Mo.App. 247; Carr v. Ins. Co., 104 Mo.App. 502; Fowble v. Ins. Co., 106 Mo.App. 502; Murphy v. Ins. Co., 61 Mo.App. 323; McNees v. Ins. Co., 61 Mo.App. 335; McNees v. Ins. Co., 69 Mo.App. 132; Murphy v. Ins. Co., 70 Mo.App. 78; Hooker v. Ins. Co., 69 Mo.App. 141; Dantel v. Ins. Co., 65 Mo.App. 44; Vining v. Ins. Co., 89 Mo.App. 311. (9) The appraisal clause is a valid agreement which does not tend to oust the courts of jurisdiction, as it merely provides for an ascertainment of the amount of the loss, leaving all other questions to be judicially determined. Hamilton v. Ins. Co., 136 U.S. 242; Graham v. Silberman, 75 Ohio St. 374, 15 L. R. A. (N. S.) 1055; Western Assurance Co. v. Hall, 112 Ala. 318; Hall v. Ins. Co., 57 Conn. 105; Service Co. v. Ins. Co., 171 Mass. 433; Grady v. Ins. Co., 27 R. I. 435; Gasser v. Sun Fire Office, 42 Minn. 315; Chapman v. Ins. Co., 89 Wis. 572; Ins. Co. v. Connihan,...