The Springfield Fire and Marine Insurance Company v. Payne

• Decision Date: 10 October 1896
• Docket Number: 8802
• Citation: 46 P. 315,57 Kan. 291
• Parties: THE SPRINGFIELD FIRE AND MARINE INSURANCE COMPANY v. THOMAS J. PAYNE et al
• Court: Kansas Supreme Court

46 P. 315

57 Kan. 291

THE SPRINGFIELD FIRE AND MARINE INSURANCE COMPANY v. THOMAS J. PAYNE et al

No. 8802

Supreme Court of Kansas

October 10, 1896

Decided July, 1896.

Error from Wyandotte District Court Hon. Henry L. Alden, Judge.

REVERSED AND REMANDED.

IN 1887, Thomas J. Payne commenced, and, in 1889, completed, the erection of a fine dwelling house at Argentine. On November 8, 1888, the plaintiff in error issued a policy of fire insurance thereon for the sum of $4,000, to run for three years. Policies were issued by three other companies aggregating $15,000. The house was destroyed by fire about 2 o'clock on Sunday morning, May 3, 1891. Within a few days after the fire, the adjusters of the several companies, or some of them, had a conference with Payne and his attorney at the Coates House in Kansas City, Missouri in relation to the loss; but the evidence is quite conflicting as to what occurred there. The policy of the plaintiff in error contained the following clauses:

"The amount of sound value and the loss or damage shall be determined by agreement between the Company and the assured. But if at any time, differences shall arise touching any loss or damage, every such difference shall, at the written request of either party, be submitted at equal expense of the parties to competent, expert and impartial persons (not interested in the loss as creditors or otherwise nor related to the assured or claimants), one to be chosen by each party and the two so chosen, in case of their disagreement, shall select a third to act with them; and the award in writing under oath, of any two of them, shall be binding on the parties as to the amount of such loss or damage, but shall not decide the legal liability of the Company under this policy, . . . and until the . . . award had, the loss shall not be payable."

"No suit or action against this Company 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."

Payne testified that the adjusters made no claim that his loss was not equal to the amount of the policies, but they represented that it could not be paid until after an appraisal thereof which was a requisite formality to payment without suit. The testimony of the adjusters was to the effect that they disputed the amount of the loss and claimed that it was much less than the sum of the policies; and that they proposed the selection of appraisers, as provided by the policies, to fix the amount of the loss. Nothing was then agreed upon, but the attorney for Payne said that he would make proofs of the loss. On or about June 17, 1891, however, Payne and the several agents and adjusters of the Insurance Companies signed a written agreement for the appointment of P. B. Messenger and S. G. Gribi to appraise the loss, and in case of disagreement the said appraisers to select a third to act with them in matters of difference only; the award of said appraisers, or of any two of them, made in writing in accordance with the agreement to be binding upon both parties; it being stated that the appraisement was for the purpose of ascertaining and fixing the amount of said loss and damage, and not to determine, waive or invalidate any other right or rights of either party; that in determining the loss and damage the appraisers were to make an estimate of the total cost of replacing or repairing the property, or the actual cash value thereof at or immediately preceding the time of the fire; and that in case of depreciation of the property from use, age, condition, location, or otherwise, a proper deduction should be made therefor. Messenger and Gribi were sworn as appraisers on the same day; and on June 20 1891, they selected J. F. Meyer to act as a third appraiser, to settle matters of difference, in compliance with the agreement. The evidence tends to show that the only matter of difference was as to a gas machine; and the principal question as to that was whether it was covered by the policies or not. It was conceded on the trial that this machine was not covered by the policies. Meyer was sworn as an appraiser on the day of his appointment, and on the same day he and Gribi signed a written appraisement of the loss, fixing it at $11,428.51; but Messenger did not sign it. On June 26, 1891, Payne made written proofs of his loss giving the items thereof aggregating $23,689.90. These proofs of loss were soon returned to Payne, who claims that no reasons were assigned for such return; while the companies claim that they did assign specific reasons therefor and requested their correction.

Payne was permitted to testify, over the objection of the Insurance Company, that the house cost him about $25,000; and other witnesses, not architects, builders, nor contractors, were allowed to state their opinions as to the value of the house from a general knowledge of it without estimating the value of any of the materials entering into its construction.

The essential parts of instructions four and five, given by the Court and excepted to by the Insurance Company, read as follows:

"If you find from the evidence that said plaintiff made and entered into such an agreement for the purpose of submitting questions of difference which had arisen between said plaintiff and defendant touching said loss or damages sustained by plaintiff to the persons therein mentioned, for determination, their award to be final and binding upon said plaintiff and defendant as to such loss and the amount of damages so ascertained, and that said agreement was so entered into by the plaintiff of his own accord, knowing the purpose and effect thereof and not by reason of false representations and fraud, as alleged by said plaintiff in his reply as hereinbefore set out, and that said appraisers in making such award thereunder, took into consideration all the items of the loss covered by said policy, and were in possession of the facts necessary for them to arrive at an intelligent conclusion concerning the matters referred to them for determination, then I instruct you that said agreement and the award made and signed by the said J. F. Meyer and S. G. Gribi, are binding upon said plaintiff and his recovery herein will be limited to the amount of such award."

"If, however, you find from the evidence that said agreement to submit the questions of such loss and the amount of damages sustained by the plaintiff to said persons for determination and arbitration, was not made and entered into by said plaintiff of his own accord, knowing the purpose and effect thereof, but that said plaintiff was induced to sign the same by reason of false representations and fraud made to, or practiced upon him, by said defendant, or its agents, or representatives, as alleged in said plaintiff's reply as hereinbefore set out, or that said appraisers making such award made and determined the same without being in possession of the facts necessary for them to arrive at an intelligent conclusion concerning the matters referred to them, for determination, and without giving an opportunity for such facts to be presented to them, and that said appraisers did not take into consideration all the items of the loss covered by said policy, as in said reply alleged, then I instruct you that said agreement and award are not binding upon said plaintiff; and you will then determine from the evidence, the amount of loss or damage to said dwelling house sustained by said plaintiff from said fire, said loss or damage to be estimated according to the actual cash value of the property at the time of said fire."

A verdict was returned in favor of Payne, April 15, 1892, for $4,158.66, and answers were made to...