Franklin v. N.H. Fire Ins. Co.

• Court: New Hampshire Supreme Court
• Writing for the Court: PEASLEE, J.
• Citation: Franklin v. N.H. Fire Ins. Co., 47 A. 91, 70 N.H. 251 (N.H. 1900)
• Decision Date: 16 March 1900
• Parties: FRANKLIN et al. v. NEW HAMPSHIRE FIRE INS. CO. SAME v. PALATINE INS. CO. NEW HAMPSHIRE FIRE INS. CO. v. FRANKLIN et al. PALATINE INS. CO. v. SAME.

47 A. 91

70 N.H. 251

FRANKLIN et al.

v. NEW HAMPSHIRE FIRE INS. CO.

SAME

v. PALATINE INS. CO.

NEW HAMPSHIRE FIRE INS. CO.

v. FRANKLIN et al. PALATINE INS. CO.

v. SAME.

Supreme Court of New Hampshire. Coos.

March 16, 1900.

Actions by Franklin & Salomon against the New Hampshire Fire Insurance Company and the Palatine Insurance Company, and petitions by the New Hampshire Fire Insurance Company and the Palatine Insurance Company for appointment of arbitrators. Case presented on an agreed statement of facts. Case discharged.

Assumpsit to recover on policies of insurance, and petitions by the insurers for the appointment of arbitrators. Facts agreed. The policies were in the standard form. The insurance was upon furnishing goods and clothing. The fire occurred February 4, 1899. On February 13th the parties agreed upon referees to adjust the loss, who proceeded in accordance with the submission until February 20th, when the referee chosen by the insured withdrew and refused to participate further in the appraisal. On February 23d, and before the appraisal was completed, the insured served upon the insurers' agents, and upon the two referees who had not withdrawn, a notice of refusal to proceed with the arbitration. The insured were notified of the appraisal by the Insurers prior to March 6, 1899, when proof of loss in the usual form was made against both companies, and March 27, 1899, suits were brought upon the policies. The insurers served their petitions on the insured April 17, 1899. The insurers do not deny their liability, and have always been willing to pay the award.

Daley & Goss, for Franklin &

Salomon. Drew, Jordan & Buckley, for the insurance companies.

PEASLEE, J. The agreement of the parties to submit their differences to arbitration was revoked by the refusal of one of the arbitrators to act, and the notice given the insurers by the insured. It is the well-settled law of this state that either the refusal of the arbitrator to perform the duties necessary to carry out the purpose of the agreement, or the withdrawal from the compact of either party before the award is published, renders the agreement of no effect. Wright v. Cobleigh, 21 N. H. 339, 342; Kimball v. Gilman, 60 N. H. 54. The contract of insurance contained the following provision: "In case difference of opinion shall arise as to the amount of any loss under this policy, other than on buildings totally destroyed, unless the company and the insured shall, within fifteen days after notice of the loss, mutually agree upon referees to adjust the same, either party may, upon giving written notice to the other, apply to a justice of the supreme court, who shall appoint three referees, one of whom shall be thoroughly acquainted with the kind of property to be considered, and their award in writing, after proper notice and hearing, shall be final, and binding on the parties." The policy being in the form approved by the legislature, it is argued that this provision is a condition precedent to the right to sue; that the parties must first arbitrate, and then, if the insured chooses, he may sue; but upon the question of damages the only evidence admissible will be the award of the arbitrators. Being the only admissible evidence, it would be conclusive on the question. Like a formal judgment, it would import absolute verity. He might sue for his loss, but he could not litigate one of the principal questions involved. The contract, it is said, is not to pay the loss, but only to pay what three men shall say that the loss is; that Is; since the adoption of this form of policy in 1885, every case in which the amount of loss has been litigated has been erroneously conducted; and in each case the only inquiry on this branch should have been, "What is the sum fixed by arbitrators?" The contention is that the referee clause is of the very essence of the contract; but beyond the policy is the statute which the policy is not allowed to contradict (Pub. St. c. 170, § 18), and which shows that the legislature did not understand that the question of the amount of loss had been taken from the court. Section 13, c. 170, Pub. St., provides that "If upon trial the insured recovers more than the amount determined by the insurers," etc. If the only, contract made by the insurer was to pay the amount determined by arbitrators, this provision of the statute is meaningless; but if the statute means, as it must, that the amount of loss may be litigated, the referee clause cannot mean that an award of arbitrators is the only foundation for the suit.

It is further argued that, after an adjustment by the company, it is the right of either party to compel a reference by a seasonable application therefor; that this is the contract which the legislature has provided for the parties; that by entering into it the insured waives any rights conflicting with its provisions; and that for various...