Gasser v. Sun Fire Office

• Decision Date: 10 January 1890
• Citation: 42 Minn. 315
• Parties: M. M. GASSER <I>vs.</I> SUN FIRE OFFICE.
• Court: Minnesota Supreme Court

Page 315

42 Minn. 315

M. M. GASSER vs. SUN FIRE OFFICE.

Supreme Court of Minnesota.

January 10, 1890.

Appeal by defendant from an order of the district court for St. Louis county, Ensign, J., presiding, sustaining a demurrer to the answer.

White, Shannon & Reynolds, for appellant.

White & Hewit, for respondent.

VANDERBURGH, J.

This action is to recover upon an insurance policy for loss or damage suffered by fire. The defendant does not deny its liability under the policy, but disputes the extent of the loss, in respect to which the parties are unable to agree. The principal controversy in the case is over the arbitration clause in the policy. Under the policy the defendant first undertakes, generally, to indemnify the plaintiff for loss by fire within the amount specified; but we are to look to other provisions in the policy bearing on the question, in order to determine when a cause of action arises, and upon what conditions the loss becomes payable. In this case the policy provides that "loss money will be payable at the expiration of 60 days from the date of the adjustment of a claim, unless the society shall have replaced the property damaged or destroyed," etc. This is the only provision on the subject. This clause, then, fixes the time for payment, and the date when a right of action accrues, under the policy, if there are suitable and adequate provisions for the adjustment of the loss or damage suffered, which the defendant is in good faith ready and willing to comply with. If the defendant should refuse to make or permit an adjustment in pursuance of the policy, this provision would, of course, be inoperative. In case of loss it is required that the assured shall make and submit proper proofs of loss, and thereupon the provisions for adjustment are as follows: "(4) The amount of sound value and of damage to the property may be determined by mutual agreement between the society and the insured, or, failing 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 of 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 the difference to such umpire; and the award in writing of any two shall be binding and conclusive as to the amount of such loss or damage, but shall not decide the validity of the contract, or any other question, except the amount of such loss or damage." The policy also contains the following provision: "(10) It is furthermore hereby expressly provided and mutually agreed that no suit or action against the society for the recovery of any claim by virtue of this policy shall be sustainable in any court of law or chancery, until after an award shall have been obtained fixing the amount of such claim in the manner above provided, nor unless such suit or action shall be commenced within twelve months next after the loss shall occur."

The answer of the defendant shows that the parties differ in respect to the damage to the property covered by the policy; that they attempted to agree and determine the amount of such damage, but were unable to agree in respect to the amount to be paid therefor, and thereupon, in pursuance of the provision of the policy referred to, the defendant duly and seasonably made a written request of said plaintiff that the amount of such damage be ascertained by an appraisal, according to the terms of the contract, and demanded that the plaintiff select and name an appraiser to act for him; and that the plaintiff has wholly neglected and refused to comply with such request, or to enter upon any appraisal. The defendant therefore claims that no right of action has yet accrued to the plaintiff under the policy. The contention of the plaintiff is that the arbitration clause is not an essential condition to his right to bring an action for the damages suffered; that it is a mere collateral executory agreement, revocable by either party, and was, in fact, revoked by the commencement of the action; and that it is invalid, as an attempt to oust the courts of their jurisdiction; also, that in any event the arbitration clause, by its terms, cannot apply to cases where personal property covered by the policy is wholly destroyed.

1. An agreement that a right of action should not be enforced through the ordinary tribunals cannot be sustained; and therefore a general covenant in a policy that...