Chainless Cycle Manufacturing Co. v. Security Insurance

Laughlin, J.:

It is alleged in the complaint that plaintiff was engaged in manufacturing and selling bicycles at Nos. 12 and 14 Cortland street, Rochester, N.-Y., and that on the 16th day of August, 1899, a fire occurred at its place of business destroying or damaging and injuring its stock in trade, fixtures and machinery to the extent of $19,091.22; that the same were insured against fire by defendant in the sum of $2,500 by a policy issued on the fifth of that month which contained the privilege of additional insurance on account of which defendant’s proportion of the loss is $1,913.78; that plaintiff has performed all the conditions of the contract of insurance, and that more than sixty days prior to the commencement of this action plaintiff gave defendant due notice and proof of the fire, as required by the policy, and demanded payment of the loss, with which demand defendant refused to comply. The answer admits the receipt of due proof of loss as alleged, and that defendant has not paid its proportion of the loss; it avers that the proofs of loss were received on September first, and that on September twelfth it notified plaintiff that it disagreed with plaintiff as to the amount of damages, and demanded an appraisal pursuant to the terms of the-policy; that it designated an appraiser and requested plaintiff to unite with it in an appraisal agreement; that such demand and request were refused by plaintiff, and that such appraisal is a condition precedent to the right to prosecute this action. The only provision of the policy ■with reference to an appraisal is the following: “ In the event of disagreement as to the amount of loss, the same shall, as above provided, be ascertained by two competent and disinterested appraiser's, 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; the parties thereto shall pay the appraiser respectively selected by them, and shall bear *106equally the expense of the appraisal and umpire. The loss shall not become payable until, sixty 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 an appraisal has been required.”

The case does not contain the evidence relating- to the. damages, and it has been made and settled with a view to presenting the question as to whether, on account of plaintiff’s refusing defendant’s demand for' an appraisal on the .twelfth of September, this action was prematurely brought, and also the exceptions bearing on that question.

The trial- court ruled that an-appraisal was, not a condition precedent to be alleged and proved by plaintiff; but that plaintiff’s refusal to enter into an appraisal was matter of defense, and that if such an appraisal was demanded by defendant and not waived by it, the action could not be maintained. Plaintiff contended that defendant waived its right to an .appraisal before making the formal demand therefor, on September twelfth, as alleged in -its answer. The court, specially submitted to the jury .the question as to whether defendant waived its right to an appraisal, and instructed the jury that the burden of proof on this issue rested with the plaintiff. To such rulings and submission defendant excepted. The-jury answered the.question in-the affirmative. ,

Mr. Searle, plaintiff’s president and general manager, gave immediate notice of the lire' by telephone to defendant’s agents in Rochester from whom plaintiff had received the policy, saying that plaintiff had a- small loss or small fire, but that he did not know the amount of the damages. The agents hastily looked Over the loss, and by letter the sanie day notified defendant thereof, stating that the probable amount of the loss was $2,50.0, of which, on account, of -other insurance, defendants proportion would be $250,. and asking if they would have Norden, an experienced insurance adjuster residing in Rochester, represent and adjust the loss for the defendant. ■ - Defendant wired its agents in reply to look after the loss in the usual way or wait for the adjuster. The agents thereupon referred the loss to Norden for adjustment.- Norden had interviews with Searle oil August eighteenth and nineteenth, concerning the loss, and on the twenty-fourth -of August they and Sherwood, *107an adjuster employed by plaintiff, met and a schedule of the loss, the same as subsequently contained in the proofs of loss, excepting some clerical errors in footing the figures, was presented to Nor-den who seemed surprised at the amount of loss shown thereby, which was $21,494.20. Sherwood urged an early settlement or submission to an appraisal, and offered in behalf of plaintiff to consent to an appraisal then and there Norden wished time to communir cote with the interested companies, but recognizing the propriety of a prompt adjustment, agreed to set a time when the companies would settle or submit to an appraisal. Norden at this time, pursuant to like authority, was representing all of the insurance- companies. Sherwood suggested that Norden communicate with his principals by wire and the latter thereupon telegraphed the companies as follows:

“ Chainless Bicycle claim exorbitant 90 %. Authorize appraisal or send special next Tuesday. Answer.”

On Tuesday, the twenty-ninth of August, the special agents of all the companies were in Rochester and with Norden they looked over the loss. At that time Searle gave Norden a schedule of the items of loss, with valuations the same as before. The special agents on the same day appointed Norden and two other adjusters, Reed of Buffalo and Wood of Geneva, a committee to take charge of and adjust this loss for all the companies. Searle was informed of the appointment of -the committee and requested to present proofs of loss in the usual way. Proofs of loss were prepared and verified on that day and duly mailed to each of the companies on the following day, and plaintiff inclosed therewith a letter saying: “We herewith send you proofs of. loss covering our loss by fire of August 16th, 1899, under your policy No. 3136. Unless you adjust this loss or agree to an appraisal on or before Tuesday, September 5th, 1899, you will be deemed to have waived your rights to such an appraisal and we will proceed' to dispose of the property to the best possible advantage.”

The evidence is conflicting as to whether any chairman of the committee was designated. Norden, however, assumed to. act as chairman, and on the thirty-first of August wrote each company in that capacity, requesting that proofs of loss be forwarded to him when received, and adding: “ All precautions have been taken to-avoid *108litigation.” The letter and proofs of loss addressed to defendant were received at its office in New Haven, Conn., on Friday, the first of September. Oh the sixth of September, Norden, as chairman, received a letter from the secretary of defendant inclosing such proofs of loss, saying:

“We have taken no action on.them (referring to the proofs of loss), relying on you and your committee to do all that is needed.”

■ No meeting of the committee was' called or held. Norden received a letter from Reed dated September first, protesting against his assuming to act as chairman. On the fifth day of September, the time specified in plaintiff’s letter to the insurance companies, Searle and Sherwood called on Norden and demanded an appraisal. Down to this time Norden had received no word from the defendant in answer to his message or letter hereinbefore quoted except the appearance of the .special agent as stated, and had not received the proofs of loss or letter inclosed therewith, also herein quoted.. Norden, in answer to plaintiff’s demand for an appraisal, said that he did not wish to have an appraisal; that he wanted to settle. After-some negotiation, they agreed on $11,000 as the total loss and Nor-den signed a settlement agreement to that effect in behalf of- four-other insurance companies, from whom he had received proofs of loss- and authority. He stated, however, that lie did not wish to sign for defendant and the remaining companies until he received' the proofs of loss and that he -wished to advise with the other members of the committee, but he appeared sanguine that the settlement would be acquiesced in by all. - N orden at this, time endeavored to reach Reed on the telephone, but he was away from home, as was Wood also. -Wood and Reed did not consent-to the settlement made by Norden, ' but some of the companies acquiesced in it. Neither Wood nor Reed ever returned to Rochester on this matter. There was a conflict of evidence as to.whether there was any agreement or understanding concerning a meeting of the committee prior. to their leaving Rochester on August twenty-ninth, it being claimed by Norden that there was not and by them that the committee was to meet as soon as the proofs of loss were received.

On the sixth' day of September, plaintiff, evidently relying on Norden’s refusal of an appraisal, sold the damaged property and heard, nothing further from defendant until the 12th day of Septena*109her, when it received a letter from defendant’s attorneys purporting to be written in behalf of four other companies as well, repudiating as unauthorized the adjustment made by Norden and giving notice that it disagreed "with plaintiff in regard to the amount of the loss, demanding an appraisal' and designating its appraiser substantially as alleged in the answer.

These facts and circumstances fairly presented a question for the jury as to whether the defendant did not waive its right to an appraisal. There is evidence to support" the .finding of the jury. The defendant had ample time to determine whether it wished to settle the loss without an appraisal. If it deemed an appraisal necessary, it could have notified the plaintiff to that effect on- or before September fifth,which is all that it was called upon to do in response to plaintiff’s letter of August thirtieth — at least it should have notified plaintiff to refrain from, selling the property.

We find no error in the rulings of the trial court which requires that a new trial be granted. It follows that the judgment and order appealed from should be affirmed, with costs.

Adams, P. J., and Spring, J., concurred; McLennan and Williams, JJ., dissented.

Judgment and order affirmed, with costs.