When Inoperative 8.- A submission to arbitration to ascertain the amount of loss does not amount to an election by the company to pay the loss and a waiver of the right to rebuild or repair. *Etna Ins. Co. v. Platt, 40 Ill. App. 191. Condition Precedent. dent to right to recover. Viney v. Bignold, L. R., 20 Q. B. Div. 172 (Eng.) 13. The award is an essential element of insured's cause of action and should be averred in the complaint, otherwise it is demurrable. Carroll v. Girard Fire Ins. Co., 16 Ins. L. J. 764; 72 Cal. 297; 13 Pac. Rep. 863. 8a. An appraisal to be binding in result must be in strict compliance with the condition. Hence when a submis- 14. Where a policy provides for a sion did not provide for selection of an submission to arbitrators of any differumpire before proceeding with the ap- ences touching any loss or damage, whose praisement, and provided for such select-award should determine the amount of ion in the event of its becoming neces- such loss, but not decide the question of sary, and limited the appraisal to insured the liability of the insurer, and that no property saved in a damaged condition, action could be maintained until an and excluded any estimate of amount of award fixing such claim-the submission loss on property totally destroyed, held, is a condition precedent to the right of that an award was no defense to an the assured to recover; and the action action. *Adams v. N. Y. Bowery Ins. should be for the amount as fixed by the Co., 51 N. W. Rep. 1,149 (Iowa). award. Id. 9. Note on provision for reference as to amount of loss. See 10 L. R. A. 558; 11 Id. 598. 15.- A condition of an insurance policy, relating to the ascertainment of the amount of loss or damage, unless waived, 10. When inoperative. When stat- is a condition precedent to the right of ute provides that the amount written in the insured to recover. *Eichner v. Liverthe policy is conclusive upon the ques- pool & L. & G. Ins. Co., 29 N. Y. S. Rep. tion of value and the only measure of | 411; 9 N. Y. Supp. 954. damages, stipulation in, policy as to arbitration is inoperative. Thompson v. St. Louis Ins. Co., 43 Wis. 459; Thompson v. Citizens' Ins. Co., 45 Wis. 388. 16.- An agreement, in an insurance policy, for an appraisal on demand of either party, as a condition precedent to a right of action, is binding. Scottish Union & Nat. Ins. Co. v. Clancy, 71 Tex. 5; 8 S. W. Rep. 630; Old Sancelito Land Co. v. Commercial Union Ins. Co., 14 Ins. L. J. 135; 66 Cal. 253; Gauche v. London and Lancashire Ins. Co., 11 Ins. L. J. 361; 10 Fed. Rep. 347; *Wolfe v. Liverpool, etc., Ins. Co., 50 N. J. L. 453; 17 Ins. L. J. 714; 14 Atl. Rep. 561; 12 Cent. Rep. 811. 11. Condition precedent. If policy merely contains an agreement to refer a matter upon which liability arises to arbitration, it does not take away right of action. But if the agreement be not simply to pay a sum of money, or to do an act, but to pay such sum of money, or do such an act, as a third person shall ascertain or direct, or to pay a sum of 17. A condition in a policy that any money or do an act in a certain event, difference arising as to the loss of propsuch, for instance, as an arbitrator ar- erty insured shall be submitted, at the riving at a certain conclusion, in any of written request of either party, to apthese cases no cause of action arises, un-praisers, whose award shall be conclusive less, in the one case, the third person as to the damage only, and that the comhas so ascertained or directed, or, in the other, the stipulated event has happened. Gorman V. Hand-in-Hand Ins. Co., Irish Rep. 11 C. L. 224; Elliott v. Royal Exchange Assur. Co., L. R. 2 Ex. 237 (Eng.) pany may take any part of the property at its appraised value, and that no loss shall be payable or actionable until such award, is valid. *Hamilton v. Liverpool, etc., Ins. Co., 136 U. S. 242; Id. v. Home Ins. Co., 137 U. S. 370; 34 Law. ed. 708; 20 Ins. L. J. 97. 12. When the parties to an insur ance contract have covenanted that lia-¦ 18.- Where there is no condition in a bility is only to arise after the amount policy of insurance that no action shall has been adjusted by arbitration, then be maintained upon it until an award such an adjustment is a condition prece-'made by arbitrators of the amount due When Not a Condition Precedent. thereon, an agreement therein to submit arise after proofs were received, that at the amount to arbitration is collateral written request of either party matter and independent; and a breach of such should be submitted to arbitrators whose agreement, while it will support a sepa-award should be binding as to amount, rate action, cannot be pleaded in bar to but not as to liability, and also that no an action on the policy. Id. 19. An agreement in an insurance policy to submit the amount of loss or damage to arbitration, that it shall be payable only after it has been so ascertained, and that such arbitration shall be a condition precedent to a suit, is reasonable and legal. *Chippewa Lumber Co. v. Phanix Ins. Co., 19 Ins. L. J. 535; 44 N. W. Rep. 1,055; 80 Mich. 116; *Pioneer Mfg. Co. v. Phænix Assur. Co., 106 N. C. 28; 19 Ins. L. J. 408; 10 S. E. Rep. 1,057; *Gasser v. Sun Fire Office, 42 Minn. 315; 19 Ins. L. J. 243; 44 N. W. Rep. 252. 20. An agreement in an insurance policy to submit any dispute as to the amount of loss to appraisers, and their award, are competent to support a plea of arbitrament and award, and is a binding agreement on the parties thereto. *Hern-1 don v. Imperial F. Ins. Co., 107 N. C. 183; 20 Ins. L. J. 186; 12 S. E. Rep. 126. action should be sustainable until after such award should be obtained. Held, that the condition did not suspend assured's right of action. That it was merely collateral and not a condition precedent. Schollenberger v. Phœnix Ins. Co., 7 Ins. L. J. 697; 6 Repr. 43 (U. S. Cir.) 23. Earlier cases where an arbitration clause held inoperative as a condition precedent. Kill v. Hollister, 1 Wilson, 129 (Eng.); Scott v. Phonix Assur. Co., 1 Stuart, L. C. 152 (Can.); Scott v. Avery, 20 Law and Eq. 327 (Eng.); Goldstone v. Osborn, 2 Carr. & P. 550 (Eng.) In this case the company denied all liability; and it was claimed that the arbitration clause had no application when it was to determine amount only, and right to recover was denied altogether. Roper v. Leudon, Ell and Ell. 825 (Eng.) 24.- Policy provided that in case differences shall arise touching any loss or dam21.- A provision in a fire policy for the age after proof has been received in due arbitration of all differences as to any loss form, the matter shall, at written request or damage after the receipt of proof of either party, be submitted to impartial thereof, and that the award shall be final arbitrators whose award in writing shall and conclusive on the parties as to the be binding as to the amount of such loss amount of loss or damage, but not as to or damage, but shall not decide the the company's liability under the policy liability of the company under this policy. -is a valid and binding covenant. *Han-It is furthermore expressly agreed that no over F. Ins. Co. v. Lewis, 10 So. Rep. suit shall be sustainable in any court of 297; 21 Ins. L. J. 316; 28 Fla. 209. 21a. The provision in regard to an appraisal is a condition precedent, and if it appears on face of a complaint that there was a disagreement as to the amount of the loss, such complaint fails to state a cause of action if it omits to allege an award or any facts which would make the condition inoperative. Exclusion of pertinent testimony on a hearing before appraisers is usually fatal to an award, and the fact of such exclusion is established by a mere preponderance of evidence, whereas an allegation of partiality, conspiracy, or fraud, requires clear and strong proof to set same aside. *Mosness v. German American Ins. Co., 52 N. W. Rep. 932 (Minn.) law or equity until after award shall have been obtained fixing the amount of such claim in the manner above provided. Held, that the condition as to arbitration was not a condition precedent but collateral to the agreement to pay. Mark v. National Fire Ins. Co., 24 Hun, 565; aff'd, on opinion below, 91 N. Y. 663. 25.- A provision for arbitration requiring the ascertaining of sound value and damage, is inoperative in case of a total loss or destruction. Adams v. National Ins. Co., 4 Pugsley and B. 569 (N. B.); and see Bowes v. National Ins. Co., Id. 437. 26. Condition for arbitration or appraisal, held, not a condition precedent, and evidence of amount of loss admissible, though not complied with. Crossley v. 22. When not a condition precedent. Connecticut Fire Ins. Co., 15 Ins. L. J. Policy provided that if differences should │619; 27 Fed. Rep. 30; and see McIntyre v. National Ins. Co., 5 Tupper, 580 (Can.) 27.— A condition in an insurance policy providing that the whole matter in controversy, including the right to recover at all, shall be submitted to arbitration, is void, as an attempt to oust the courts of their legitimate jurisdiction. German American Ins. Co. v. Etherton, 25 Neb. 505; 41 N. W. Rep. 406. 28. The usual clause for reference to three disinterested men, in case of difference of opinion as to amount of loss, is no bar to an action on the policy. Clement v. British America Assur. Co., 2 N. Eng. Rep. 57; 141 Mass. 298. 29. An insurance company derives no right to arbitrate a question of loss, from a provision in the policy that "in case of differences touching any loss or damage, after proof thereof has been received in due form, the matter shall, at the written request of either party, be submitted to impartial appraisers, whose award in writing shall be binding on the parties," as such provision, without providing for the number of appraisers or the mode of selecting them, is too vague; and therefore the insured's refusal of a demand by the company for arbitration will not bar his right to sue on the policy. Case v. Manufacturers' F. and M. Ins. Co., 82 Cal. 263; 21 Pac. Rep. 843. 30. To be effective, such a condition must definitely fix the number of arbitrators and provide a mode of selection. Id. 31.- A clause in a policy which simply provides that any difference of opinion between the company and the insured as to the amount of loss may be arbitrated does not constitute such arbitration a condition precedent to bringing suit thereon, but leaves arbitration optional with the parties. *Continental Ins. Co. v. Wilson, 20 Ins. L. J. 269; 25 Pac. Rep. 629; 45 Kans. 250. 32. A submission of differences to arbitrators is not a condition precedent to an action on a policy containing a condition or provision therefor, where the company denies any liability under the policy. *Bailey v. Etna Ins. Co., 77 Wis. 336; 44 Balt. Underwriter, 230; 46 N. W. Rep. 440. 33.- Failure of an insured to comply with a clause of the policy of insurance requiring submission of the amount of the Loss Partial or Total. loss to appraisers does not release the company from liability, where it has continuously denied that it was liable upon the policy. *Insurance Co. of N. A. v. Forwood, 13 Ky. L. Rep. 261. 34. Notice to insured. An umpire and arbitrators can not proceed to make a valid award without notice to the insured that will enable him to have opportunity to appear and make representation or explanation. Linde v. Republic Fire Ins. Co., 18 Jones and Sp. 362 (N. Y.) 35.- Under a policy providing that, in adjusting the loss, if the insured and the agent of the insurer are unable to agree, the insured shall deposit with the agent a stated sum to pay expenses of an appraisement, the agent thereupon to appoint appraisers, an appraisement without notice to the insured of the appointment of appraisers, and of the time when they are to make examination, is void. *Schreiber v. German-American Hail Ins. Co., 45 N. W. Rep. 708; 19 Ins. L. J. 730; 43 Minn. 367. 36. Must be disagreement as to amount. A provision in an insurance policy that the amount of damage to the property may be determined by mutual agreement, or, in case of a failure to agree, shall be submitted to arbitrators, does not require a submission to arbitration except in case of a failure of the parties to agree upon the amount of the loss. *Farnum v. Phænix Ins. Co., 83 Cal. 246; 23 Pac. Rep. 869; *Rosenwald v. Phœnix Ins. Co., 50 Hun, 172; 19 N. Y. S. Rep. 732. 37. Where an insurance policy provides that every difference shall be submitted to umpires, one to be chosen by each party, whose award shall be binding as to the amount of the loss, but shall not decide the liability of the company, where the assured refuses to accept an offer of a certain sun in settlement of his. damages, there is a "difference," within the meaning of the policy. *Pioneer Manufacturing Co. v. Phoenix Assurance Co., 106 N. C. 28; 10 S. E. Rep. 1,057; 19 Ins. L. J. 408. 38. Loss partial or total. Policy provided that in case of damage the goods should be forthwith put in as good condition as the case would allow, the assured assorting and arranging the various Demand or Request. 42. Demand or request. Where policy provides for furnishing of inventory and an appraisal of the damages, the articles, separating the damaged from held to cover all loss or damage to propthe undamaged goods, then list or inven- erty insured, whether total or partial. tory of the whole to be made, naming *Adams v. N. Y. Bowery Ins. Co., 51 N. qualities, quantities, etc., after which W. Rep. 1,149 (Iowa). the amount of damage should be ascertained by examination and appraisal, the report of the appraisement to be in writing. Held, that these provisions furnishing of the former by the assured applied only where claim is made for goods partially damaged or destroyed, and that they did not apply where a total loss only was claimed. Williamson v. Hand-in-Hand Mut. Ins. Co., 26 Up. Can. C. P. 266. 39.- Policy provided that “damage to property not totally destroyed, unless agreed upon, shall be appraised by disinterested and competent persons mutually agreed upon by the parties; when personal property is damaged, assured shall make an inventory thereof, and upen each article the damages shall be separately appraised, and the report of the appraisers shall form part of the proofs, and until such proof and certificates are produced loss shall not be payable." The insurance was upon a building, which the jury found was totally destroyed. Company insisted that an appraisal was a condition precedent to amount being due. Held, doubtful whether condition was not void for uncertainty, but that if it was valid, it did not apply to a case where the dispute was as to whether loss was partial or total, and that so far as an appraisal was made a condition precedent by the condition it had reference only to personal property. Williams v. Hartford Ins. Co., 54 Cal. 442. 40. A clause in an insurance policy agreeing to submit the amount of loss or damage to arbitration, that it shall be payable only after it has been so ascertained, and that such arbitration shall be a condition precedent to a suit, is applicable to a total loss. *Chippewa Lumber Co. v. Phænix Ins. Co., 19 Ins. L. J. 535; 44 N. W. Rep. 1,055; 80 Mich. 116. 41.- An arbitration clause in a fire insurance policy, which provides for the determination of the amount of sound value and damage to the property, does not apply to property wholly destroyed. *Rosenwald v. Phonix Ins. Co., 50 Hun, 172; 19 N. Y. S. Rep. 732. is all that he is required to do, unless the company offers to have appraisers appointed. Commercial Ins. Co. v. Robinson, 64 Ill. 265. 43. The arbitration clause held a barrier to recovery at law unless there is proved a demand for an arbitration by the assured, and a refusal or neglect or an express waiver by the company. Flaherty v. Germania Ins. Co., 7 Ins. L. J. 226; 1 W. N. C. 352 (Pa.) 44.- Company waives right to arbitration by omitting to make request as provided in the policy during the sixty days preceding time when loss becomes due and payable. Gibbs v. Continental Ins. Co., 13 Hun, 611 (N. Y.) 45. And same when company insists it is not liable for any loss. Id. 45a.- A condition in a policy that in case difference should arise touching any loss or damage the matter should, at the request of either party, be submitted to arbitration and that no suit or action against the company should be sustainable until after an award had been obtained fixing the amount of the claim in the manner therein provided, held, arbitration not to be a prerequisite to plaintiff's recovery unless one of the parties requested it. Ulrich v. National Ins. Co., 4 Tupper, 84 (Can.) 46. A stipulation in a policy to arbitrate a claim for insurance does not prevent the assured from maintaining an action on the policy where the insurer might have demanded an arbitration, but failed to do so. Phoenix Ins. Co. v. Badger, 53 Wis. 283. 47.- A company cannot wait until loss becomes due and payable and suit commenced, and then make an effective written request for arbitration. Gere v. Council Bluffs Ins. Co., 67 Iowa, 272; *Tilley v. Connecticut Ins. Co., 11 S. E. Rep. 120; 86 Va. 811. 48. If policy requires a request for 41a. The condition as to appraisal an appraisal the provision is not opera Demand or Request. tive in the absence of such request. Wright v. Susquehanna Ins. Co., 14 Ins. L. J. 713; 110 Pa. 29; Wallace v. German Amer. Ins. Co., 1 McCrary, 335 (U. S. Cir.); German American Ins. Co. v. Steiger, 13 Ins. L. J. 546; 109 Ill. 254. Note. Under the New York Standard Form there is no provision in terms for request (see Section Seventeen supra,); but the next section (eighteen), prescribing time when loss shall become payable, seems to refer to a previous request. See Section Eighteen infra, page 565. 54. The mere failure of the insured to choose a competent and unprejudiced appraiser, under a clause requiring appraisal, would not of itself work a forfeiture of his demand, or excuse the insurer from taking steps to secure another set of appraisers. Id. - 55. A clause in an insurance policy providing that differences shall be submitted to arbitrators "at the written request of either party,” and another clause providing that no suit shall be sustainable "until an award shall be obtained," must be construed together, and will not make such an award a condition precedent to an action on the policy, unless a written request therefor is made. *Wallace v. German-American Ins. Co., 41 Fed. Rep. 742; 19 Ins. L. J. 623. 49.- Where the policy provides that, in case difference arises concerning the amount of any loss or damage by fire, the matter shall be submitted to arbitration, and that no action shall be sustainable until after the award shall be obtained upon a written request of either 56. A letter to the assured from the party for submission to arbitration-ar-adjuster referring to a paper indicating bitration becomes imperative only after an agreement for arbitration executed by written request for one has been made. the company, and requesting the assured Where the request is optional with either party, and neither of them has availed himself of the right, it must be deemed waived by both; and the insured is left to the mode of redress provided by law. Nurney v. Fireman's Fund Ins. Co., 6 West. Rep. 639; 63 Mich. 633; 16 Ins. L. J. 223. 51.- Where a policy requires and prescribes a mode of arbitration before bringing an action to recover the loss, unless insured has demanded such arbitration, or made an effort to obtain it, he cannot maintain the action. Adams v. South British & Nat. F. & M. Ins. Cos., 70 Cal. 198. 52.— Where a provision in an insurance policy for arbitration is useless under the circumstances of the case, it will be waived if the company fails to demand it until the time for bringing suit for the insurance has nearly expired. *Tilley v. Connecticut F. Ins. Co., 14 Va. L. J. 205; 11 S. E. Rep. 120; 86 Va. 811. 53.— Arbitration and appraisal clauses in a policy of fire insurance should be construed in connection with each other, and the party desiring an appraisement should take the initiative. *Germania F. Ins. Co. v. Frazier, 22 Ill. App. 327. to sign it, and a proposition drawn in strict conformity to the provision of the policy-constitute a written request for arbitration within the meaning of the policy. *Pioneer Mfg. Co. v. Phoenix Assur. Co., 106 N. C. 28; 10 S. E. Rep. 1,057; 19 Ins. L. J. 408. 57.- On an insurance policy providing for a submission to arbitrators in case of loss, "at the written request of either party," and that no suit or action shall be maintainable until after an award, no right of action exists prior to an arbitration or its waiver; and the policy cannot be construed as making a written request for arbitration necessary, in case of difference as to the amount of loss, in order to prevent the immediate institution of an action. *Hutchinson v. Liverpool & L. & G. Ins. Co., 153 Mass. 143; 10 L. R. A. 558; 26 N. East. Rep. 439; 20 Ins. L. J. 273; compare Wright v. Susquehanna Mutual Fire Ins. Co., 110 Pa. 29; 20 Atl. Rep. 716. 58. The presentation of a builder's affidavit as to the amount of loss, and the waiver by the insurer of formal proofs of loss, do not, either separately or together, constitute a demand, or give a right of action on an insurance policy which provides for an award of arbitrators at written request of either party before action shall be brought thereon. |