Powers Dry Goods Co. v. Imperial Fire Ins. Co. of London
| Decision Date | 08 February 1892 |
| Citation | 51 N.W. 123,48 Minn. 380 |
| Parties | Powers Dry Goods Co. v. Imperial Fire Ins. Co. of London |
| Court | Minnesota Supreme Court |
November 25, 1891, Argued
Appeal bye defendant Imperial Fire Insurance Company of London from an order of the district court of Ramsey county, Cornish, J made June 22, 1891, refusing a new trial.
Plaintiff Powers Dry Goods Company, was on November 27, 1890, at St Paul, Minn., a business corporation dealing in dry goods at wholesale, and had on that day in its building, on Fourth street, merchandise of the value of $ 345,275.45. It had insurance against fire on this stock to the amount of $ 387,000, distributed among a great number of insurance companies. The defendant was one of these, and had insured plaintiff $ 5,000 for one year by a policy corresponding in form to the Minnesota standard policy prepared by the insurance commissioner, under Laws 1889, ch. 217. By the terms of the policy, $ 500,000 concurrent insurance was permitted.
A fire occurred November 27, 1890, by which the insured property was damaged to the extent of $ 152,861. Notice was immediately given the defendant and the other companies. Their adjusters arrived on November 29th after the fire, but were unable to agree with plaintiff as to the amount of the loss. On December 5, 1890, plaintiff demanded in writing that the amount of loss be ascertained by appraisers in accordance with the provisions of the policy, and stated it was ready to proceed forthwith, and to name an appraiser, and it demanded that defendant should act promptly. On December 12, 1890 defendant consented to such appraisal. Each party named an arbitrator. Plaintiff named C. H. Kellogg, of St. Paul, and defendant named P. A. Larson, of Lake Crystal, but he did not arrive in St. Paul until December 16th, when the two met to select an umpire. Defendant did not leave the choice of an umpire to said appraisers, but gave its appraiser instructions to insist on either Reuben Warner or P. T. Kavanaugh, whose names it furnished him, and to refuse all others. Plaintiff's appraiser pro posed 11 different competent men, successively, but each was rejected by defendant's appraiser. Thereupon Mr. Kellogg accepted Mr. Warner, one of the two proposed by defendant's appraiser, and he was notified, but he promptly declined to serve. Defendant then gave positive instruction to Mr. Larson, its appraiser, to insist on Mr. Kavanaugh for umpire, and to agree to no one else. On the next day Mr. Larson resigned, and left the city. On December 18th defendant appointed Mr. Kavanaugh its appraiser in Larson's place, and notified plaintiff, but it refused to arbitrate, on the ground that it could no longer delay its business or suspend sales, as its expenses were about $ 5,000 per month, its business suspended, the stock depreciating, its customers going elsewhere, and it believed defendant to be acting in bad faith to compel it by delay to accept a compromise.
As soon as practicable after the fire, plaintiff made an inventory of its stock of goods, except those on the third floor of one of the stores. Those were in part consumed in the fire, and the residue were so badly injured and disfigured that no proper inventory of them could be made. This inventory consisted of about 400 pages of typewriting, and was at the disposal, and for the inspection, of all the insurance companies interested. On December 23d the defendant, and other companies acting in concert with it, demanded that plaintiff furnish them a complete inventory of the stock. Plaintiff thereupon made and furnished copies of this inventory, stating that the goods on said third floor were so completely destroyed that it was impossible to make an inventory of them, but that its books showed their aggregate cost to be $ 56,529.39, exclusive of freights; that this amount was arrived at by taking the inventory made in July previous, and adding the cost of goods put in, and deducting the amount sold out.
This action was commenced March 2, 1891, to recover of defendant its proportion of the loss. It was tried May 18, 1891, before Judge Cornish and a jury, who returned a verdict for plaintiff for $ 2,009.51, the full amount claimed, with interest. Defendant moved the court, on a settled case, for a new trial, but was refused, and it appealed.
Order affirmed.
Young & Lightner, for appellant.
This policy is not the work of the insurer. It is the Minnesota standard policy, a form prepared by the state insurance commissioner, and its use is imposed on all insurance companies by highly penal provisions of the statute. Laws 1889, ch. 217. The old rule by which in surance contracts are construed against the insurer, because prepared by it, is thus abrogated. The defendant resists a recovery on two grounds: (1) That no inventory was ever made as required by the policy; (2) that no appraisal was had as required by the policy, though an appraisal was requested by defendant. The plaintiff, to excuse its default, claims that defendant lost its right to insist on an appraisal because defendant fraudulently, and for the purpose of oppressing plaintiff and causing it additional loss, delayed proceedings for an appraisal between December 5 and 16, 1890. Defendant denies this, and claims the court erred in instructing the jury that there was evidence on which they could find bad faith and willful delay on defendant's part prior to December 16th and in instructing the jury that, if they should so find, defendant could not defend on the ground of want of an appraisal, even though on and after the 16th its conduct was wholly without fault.
That an appraisal, if requested, is a condition precedent to defendant's liability, is entirely clear. The policy in terms says so, and similar provisions in other policies are construed to be conditions precedent to liability or to suit, according to the language used. Gasser v. Sun Fire Office, 42 Minn. 315; Hamilton v. Liverpool, London & Globe Ins. Co., 136 U.S. 242; Altman v. Altman, 5 Daly, 438; Davenport v. Long Island Ins. Co., 10 Daly, 535; Uhrig v. Williamsburgh City Fire Ins. Co., 101 N.Y. 362.
The evidence is insufficient to justify a finding that the defendant improperly interfered with Larson's free choice of umpire, or was in any wise to blame for the failure of the appraisers to choose an umpire, or for Larson's resignation.
The making of an inventory was a condition precedent to defendant's liability and to the bringing of this action. It was not merely a condition precedent to bringing suit, but was a condition precedent to any liability on defendant's part. The requirement of an inventory was never waived, or attempted to be waived, by defendant.
It is a well-settled rule of law that, if a party by his contract charge himself with an obligation possible to be performed, he must make it good, unless its performance is rendered impossible by the act of God, the law, or the other party. Unforeseen difficulties, however great, will not excuse him. Dermott v. Jones, 2 Wall. 1.
Lusk, Bunn & Hadley, for respondent.
Counsel for the appellant, in their statement of facts and elsewhere, assume that the policy is to be construed more favorably than otherwise to the insurer, because it was prepared under the provisions of Laws 1889, ch. 217. This claim is without merit. Reed v. Washington Fire & Marine Ins. Co., 138 Mass. 572.
After the policy has taken effect, and a loss has arisen, provisions to forfeit the claim for loss are not favored, and are construed and applied strongly against the insurer, so as to save forfeiture. Chandler v. St. Paul Fire & Marine Ins. Co., 21 Minn. 88; Hinman v. Hartford Fire Ins. Co., 36 Wis. 164.
Under the contract, appraisal is not essential before action can be brought. But, if it is essential, plaintiff cannot be compelled to enter a second appraisal after one has proven abortive without its fault. If appraisal is essential, and if plaintiff can be compelled to enter a second one, the jury were warranted in finding on the evidence that defendant had lost the right to have a further appraisal by bad faith in the conduct of the adjustment, and in interfering with the appraisers and rendering the first arbitration abortive.
It is at least doubtful if the policy makes arbitration a vital part of the contract to pay the loss. This policy contains, first, an agreement to pay the actual loss by fire, (not exceeding the sum insured,) and then an agreement to refer. It is not a contract to pay such a sum as arbitrators may award, as in Scott v. Avery, 5 H. L. Cas. 811. Neither does the policy say that award is a condition precedent, as in Hamilton v. Liverpool, London & Globe Ins. Co., 136 U.S. 242. Nor does it say in terms that no action shall be sustainable until an award is had, as in Gasser v. Sun Fire Office, 42 Minn. 315, and Wolff v. Liverpool & London & Globe Ins. Co., 50 N. J. Law, 455. Elliott v. Royal Exch. Assur. Co., L. R. 2 Exch. 237; Dawson v. Fitzgerald, 1 Exch. Div. 257; Hamilton v. Home Ins. Co., 137 U.S. 385; Badenfeld v. Mass. Mut. Acc. Ass'n, 154 Mass. 77.
One who alleges that a collateral covenant ousts the jurisdiction of the courts to enforce the main covenant should be held to point out plain and clear language which compels this conclusion. Wallace v. German-American Ins. Co., 4 McCrary, 124; Phippen v. Stickney, 3 Met. (Mass.) 384.
If the contract is to receive a reasonable construction, it cannot be that the assured is bound to enter and re-enter into fruitless arbitrations, indefinitely. If bound to enter into the second, he is into the third, and so on. Where is a line to be drawn? No line can logically be drawn anywhere if the assured is bound to enter the second arbitration. The reasonable rule is that by one submission in good faith...
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