Lancashire Ins. Co. of Manchester, Eng. v. Barnard
| Decision Date | 21 October 1901 |
| Docket Number | 1,546.,1,545 |
| Citation | 111 F. 702 |
| Parties | LANCASHIRE INS. CO. OF MANCHESTER, ENG., v. BARNARD. TRADERS' INS. CO. OF CHICAGO, ILL., v. SAME. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Charles J. Greene and Ralph W. Breckenridge, for plaintiffs in error.
Frank H. Gaines (James E. Kelby and John A. Storey, on the brief) for defendant in error.
Before SANBORN and THAYER, Circuit Judges, and ADAMS, District Judge.
These are actions against two insurance companies upon an award of appraisers under the provisions of their policies fixing the amount of the loss from the burning of a hotel at Peoria, in the state of Illinois, which was owned by Lura D. Barnard the plaintiff below, and was insured against fire by eight companies, two of which are the plaintiffs in error here, the Lancashire Insurance Company of Manchester, England, and the Traders' Insurance Company of Chicago, Ill. The defense of the Lancashire Company was that it demanded verified plans and specifications of the hotel injured, under the provisions of its policy, which requires the insured to furnish them if requested, and the plaintiff refused to provide them. The Traders' Company made the same defense, and also alleged that the suit against it was prematurely brought. To the defense that she failed to furnish plans and specifications when requested, the plaintiff replied that this request was not made until after the award of the appraisers, which was dated June 15, 1897; and that long before this award was made the companies had notified her that they would not rebuild or repair the burned building. The trial developed these facts The fire which injured the building occurred on November 26, 1896. On December 20, 1896, the plaintiff furnished to each of the companies proofs of loss. On January 5, 1897, the adjuster of the companies waited upon the husband and attorney in fact of the plaintiff, and negotiated for a settlement of the loss, which she had claimed in her proofs to be $19,876.65. During this negotiation the adjuster stated to Mr. Barnard that he would not pay the amount claimed by the plaintiff, and Mr. Barnard replied, 'Go ahead and rebuild.' The adjuster answered: ' Thereafter the parties entered into an agreement for an appraisement pursuant to the terms of the policies, and on June 15, 1897, the appraisers made an award, wherein they found the amount of the loss to be $19,681. On June 18, 1897, the companies requested the plaintiff to furnish plans and specifications of the building in order to enable them to determine whether they would pay the award or rebuild the hotel. The plaintiff refused to comply with this request. In this state of the case the court below instructed the jury that the declaration of the adjuster in January, 1897, that the companies would not rebuild or repair was an election on their part to pay the damages, and not to rebuild; that the plans and specifications at the time they were demanded, after the award had been made, could have been of no benefit to the defendants; and that they must find a verdict against each of them for one-eighth of the amount of the award, with interest on the amounts due from the defendants in these actions at the rate of 7 per cent. per annum from August 16, 1897. This charge of the court and many other rulings are assigned as error, but the conceded facts of the case are such that, if this instruction was right, the other rulings of which complaint is made are immaterial, and the judgment below must be affirmed. The only real controversy in this court arises over the correctness of this instruction.
It is contended that the declaration of the adjuster in January, 1897, that the companies would not rebuild or repair, did not constitute an exercise of their option to pay the damages or to rebuild, because the adjuster had no authority to make the election, and because the companies had no power to make it until after the award of the appraisers was published. The argument in support of this position is based upon the following provisions of the contracts: The policy of the Lancashire Company provides that where fire occurs the insured shall within 60 days after the fire furnish proofs thereof, 'and shall furnish, if required, verified plans and specifications of any building, fixtures, or machinery destroyed or damaged'; that, in the event of a disagreement as to the amount of loss, the same shall be ascertained by appraisal, and that 'the loss shall not become payable until 60 days after the notice, ascertainment, estimate, and satisfactory proof of the loss herein required have been received by this company, including an award by appraisers when appraisal has been required.' It also contains provisions to the effect that it shall be optional with the company to 'take all or any part of the articles at such ascertained or appraised value, and also to repair, rebuild, or replace the property lost or damaged with other of like kind and quality, within reasonable time, on giving notice within 30 days after the receipt of the proof herein required of its intention so to do'; that the company 'shall not be held to have waived any provision or condition of this policy, or any forfeiture thereof, by any requirement, act, or proceeding on its part relating to the appraisal, or to any examination herein provided for'; and that 'no officer, agent, or other representative of this company shall have power to waive any provision or condition of this policy, except such as by the terms of this policy may be the subject of agreement indorsed hereon or added hereto,' nor unless such waiver is written upon or attached to the policy. The stipulations of the policy of the Traders' Company reserve to it the option to reconstruct the building or to pay the damages, and provide for an appraisal of the amount of the loss in case of disagreement; but they are not quite as favorable to the defendants as the provisions of the Lancashire Company's contract, and for that reason will not be set forth at length.
Upon the provisions of the policy of the Lancashire Company, which have been recited, counsel for the plaintiffs in error base an argument to the effect that the attempted election in January, 1897, by the adjuster, to pay the damages, and not to reconstruct the hotel, was ineffectual, because he had no authority to waive any provision of the policy, or to make the election, and because the company had no right or power to exercise its option until after the award of the appraisers had been published. But an adjuster is empowered to settle the alleged loss. A settlement of the loss necessarily involves the exercise of the option to pay the damages sustained, or to rebuild or repair the building injured. The whole is always greater than and includes all its parts, and the authority to settle a loss includes the power to do any lawful act and to make any...
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