Smith v. Herd

• Decision Date: 20 February 1901
• Citation: 110 Ky. 56,60 S.W. 841
• Parties: SMITH v. HERD et al. [1]
• Court: Kentucky Court of Appeals

60 S.W. 841

110 Ky. 56

SMITH v. HERD et al. ^[1]

Court of Appeals of Kentucky.

February 20, 1901^[2]

Appeal from circuit court, Fayette county.

"To be officially reported."

Action by George W. Smith against A. T. Herd and others to enforce a judgment. Judgment for defendants, and plaintiff appeals. Affirmed.

Forman & Forman, and L. J. Moore, for appellant.

Thornton & Kerr, for appellees.

DU RELLE, J.

In May 1896, appellant sold a house and lot in Lexington to appellee Herd. At the time of the sale the property was mortgaged to a building and loan association, and an insurance policy upon the house for $2,300 in the Hamburg-Bremen Insurance Company had been made payable to the building and loan company as its interest might appear. After the sale Herd took out an additional policy for $700 in the British-American Assurance Company, appellee here. Within 10 days after the policy was taken out the house was burned. It was provided by the policy that "if fire occur the insured shall give immediate notice of any loss thereby in writing to this company, and within sixty days after the fire, unless such time is extended in writing by this company, shall render a statement to this company, signed and sworn to by said insured, stating the knowledge and belief of the insured as to the time and origin of the fire; the interest of the insured and of all others in the property; the cash value of each item thereof and the amount of loss thereon; all incumbrances thereon; all other insurance, whether valid or not, covering any of said property, and a copy of all the descriptions and schedules in all policies; any changes in the title, use, occupation location, possession, or exposures of said property since the issuing of this policy; by whom and for what purpose any building herein described, and the several parts thereof were occupied at the time of the fire," etc. The statement in this clause required to be given within 60 days after the fire seems to be the satisfactory proof of loss referred to in other stipulations hereinafter quoted. In the first clause of the stipulations of limitation upon the liability of the company it is provided that the "ascertainment or estimate [of loss or damage] shall be made by the insured and this company, or, if they differ then by appraisers, as hereinafter provided; and, the amount of loss or damage having been thus determined, the sum for which this company is liable pursuant to this policy shall be payable sixty days after due notice, ascertainment, estimate, and satisfactory proof of the loss have been received by this company in accordance with the terms of this policy." In a subsequent clause there is also a provision that, in the event of disagreement "as to the amount of loss, the same shall, as above provided, be ascertained by two competent and disinterested appraisers, the insured and this company each selecting one, and the two so chosen shall first select a competent and disinterested umpire, the appraisers together shall then estimate and appraise the loss, stating separately sound value and damage, and, failing to agree, shall submit their differences to the umpire, and the award in writing of any two shall determine the amount of such loss. *** This 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 examinations herein provided for, and the loss shall not become payable until sixty days after the notice, ascertainment, estimate, and satisfactory proof of the loss herein required having been received by this company, including an award by appraisers when appraisal has been required." The policy contains a further provision that "no suit or action on this policy, for the recovery of any claim, shall be sustainable, in any court of law or equity, until after full compliance by the insured with all the foregoing requirements, nor unless commenced within twelve months next after the fire." The policy contains the usual provision that officers shall not have power to waive any provision of the policy unless the power to so waive is given by the policy. These provisions are the ones necessary in considering the contentions upon this appeal. The immediate notice of loss was duly given to the company by J. M. Hocker & Sons, agents.

Pursuant to the provision for an appraisal, Herd and the company entered into an agreement for submission to appraisers, by which George Glass and George Clark were selected as appraisers, the agreement containing this provision: "It is expressly understood and agreed that this agreement and appraisement is for the purpose of ascertaining and fixing the amount of said sound value and loss and damage only, and shall not determine, waive, or invalidate any other right or rights of either party to this agreement. This agreement is made pursuant to the terms of the policies of insurance on said property." The appraisers by their award determined "the loss and damage to be the sum of twelve hundred and eighty-three dollars and seventy cents ($1,283.70), and the sound value thereof at the time of the fire to be the sum of eighteen hundred and ten dollars ($1,810)." As the total insurance in both companies upon the property was $3,000, of which $700 was in appellee company, appellee's share of the loss could not, in any event, exceed 7/30 of the total loss, or $299.53. The company's agent appears to have made out the proof of loss for Herd to sign upon that basis but Herd refused to sign it, or to be bound by the award, saying that it was inadequate, and that he would bring suit. This, however, he has never done. In October following, Smith, a creditor of Herd, appears to have brought a common-law suit against Herd, making the appellee company garnishee. The company seems not to have answered until about a year thereafter, when, in October, 1897, it answered alleging that it owed Herd nothing. Thereupon appellant dismissed that suit without prejudice, and on the same day instituted the present proceeding, which is an attachment suit upon return of nulla bona. In his petition in equity he set up two judgments; executions and returns of nulla bona; set up the policy of insurance by appellee company, and the provision for the selection of appraisers therein; and averred that the house had burned without Herd's fault; that he had made satisfactory proof of loss; that he and the company, by its agent, had selected appraisers to fix the amount of loss or damage which "Herd should be paid by defendant company," and that the appraisers had fixed the damage at $299. The petition prayed for a judgment against the company for that amount in favor of appellant, and that the payment thereof be adjudged to be in full satisfaction of the company's indebtedness to Herd. The company denied that satisfactory proof of loss had been made, or that the submission to appraisement was to determine any question except the amount of the loss, and averred that the submission to appraisal reserved all other rights of the company except as to the amount of loss. It pleaded, also, that no suit had been brought within 12 months after the loss for any recovery upon the policy, and that no proof of loss, as required by the provisions above quoted, had been made within 60 days after the fire. Issue was joined upon the affirmative averments upon both sides. By an amended petition, Smith sought a recovery of $808.92 against the company, upon what theory does not fully appear, but the amendment was not permitted to be filed. By an amended reply, appellant alleged the fact of the institution of his...