In this case the Court of Civil Appeals for the Second Supreme Judicial District have certified for our decision the following question:
"Under a fire insurance policy which provided that the amount of the loss should be ascertained by appraisement (in accordance with the usual stipulations in such policies), the amount of the loss resulting to appellees in this case from the burning of their stock of goods covered by said policy *Page 382 was so ascertained, but appellant refused to pay same upon the ground that it was not liable for any amount, and in bringing the suit appellees sought to recover, and did recover, a greater amount than had been so ascertained, the appellant pleading the appraisement or award as conclusive upon the amount of the loss, but also denying any liability under the policy. No such denial, however, had been made before the appraisement. The policy contained a provision to the effect that any proceeding relating to the appraisement would not waive any of the conditions of the policy, the ground upon which liability was denied being a breach of one of these conditions.
"The material question which we deem it proper to certify to your Honors for decision is:
"Did the denial of liability on the part of appellant after the amount of the loss had been ascertained by appraisement, as provided in the policy, have the effect of waiving its right to insist upon the appraisement as conclusive of the amount of the loss, such appraisement being otherwise valid if not thus waived?"
It is settled law, at least in this jurisdiction, that a stipulation in an insurance policy, by which it is agreed that the amount of the loss shall be determined by an appraisement, is valid, and that if such appraisement be made a condition precedent to the bringing of a suit upon the policy it will be enforced. (Insurance Co. v. Clancy, 83 Tex. 113; s. c.71 Tex. 5). It was held in the case cited that the attempt to adjust the amount of the loss by agreement was not a waiver of the stipulation. A waiver may arise either by an agreement between the parties or by estoppel; but in the latter case, "the acts relied on as constituting a waiver should be such as are reasonably calculated to make the assured believe that a compliance on his part with the stipulations providing the mode of proof of loss and regulating the appraisement of the damage done is not desired, and that it would be of no effect if observed by him." Insurance Co. v. Clancy, supra.
A policy of insurance may provide that an appraisement shall be made, and that it shall only be conclusive in the event the liability of the insurer is not disputed; or it may be stipulated for such a determination of the amount of the loss without reference to the question whether the liability be contested or not. It seems to be generally held that a stipulation that the question of liability shall be determined by arbitration is contrary to public policy and void; but it is otherwise, as we have seen, as to the ascertainment of the amount of the loss. There is neither repugnancy nor inconsistency in leaving the former question to the courts when the liability is disputed, and at the same time in providing that the amount of the recovery shall be settled by arbitration.
The policy in question, as outlined in the statement of the Court of Civil Appeals does not expressly provide that in the event an appraisement is demanded it shall be equivalent to an admission of liability, or that if the liability be contested the appraisement shall go for naught. On the contrary, it provides first that "the loss shall be ascertained *Page 383 by appraisement" without expressing any exception whatever, and then especially stipulates, that "any proceeding relative to the appraisement should not waive any of the conditions of the policy." From the latter provision we think it is to be inferred, that the parties contemplated that there might be an appraisement binding upon the parties and at the same time a denial of liability on the ground of a breach of one or more of the conditions of the contract.
There being no stipulation to the effect that the appraisement should be of no force in the event the company should contest its liability in a suit for the loss, the provision as to the appraisement was not waived by the terms of the policy; and since the appraisement did not in any manner embarrass the insured in prosecuting their suit to recover upon the policy, and since whatever labor and expense attended the appraisement would have been incurred if there was no contest of the right to recover, we think there was no waiver of the condition as to appraisement. The amount of the loss being determined, there was one issue less to be tried, and to that extent the prosecution of the suit was less burdensome upon the plaintiffs by reason of the appraisement.
We answer the question in the negative.