Townsend v. Greenwhich Insurance

Woodward, J. : The plaintiffs in this action were the owners of. a certain hotel property, known as the Seawanhaká Hotel, in the town of Oyster Bay. This property was insured by the defendant, which wrote a standard policy, with a mortgagee clause, payment to be made to the defendant Louise C. Blyth in case of loss. The’, latter, at the time of the fire in which the loss in controversy was incurred, held a mortgage for the sum of $20,000 upon the premises, arid two other insurance companies stand in the same position as the defendant insurance company in this action. The defendant Louise C. Blyth declined to join as. a plaintiff in this action, and was made a defendant. The building upon which the policy was written was consumed by fire on the 4th day of March, 1901. Subsequently a controversy arose over the valuation put upon the property by the plaintiffs, and the defendant insurance company, acting under the provisions of the policy, entered into a written agreement with the plaintiffs for the appointment of appraisers to determine the amount of the loss. These appraisers appear to have been chosen in the [325] manner pointed out by the policy; the plaintiffs selected one, the defendant insurance company one,, and the two so chosen elected an umpire; and the three appraisers.joined in an appraisal, finding the loss to have been $4,156.58. This finding was made in writing, sighed by all three of the appraisers, and the proportion of this amount which was due from the defendant insurance company was fixed at $1,484.50. This latter sum the defendant insurance company paid over to the mortgagee, taking her receipt in full for all demands against the company. The plaintiffs bring this action to recover the full amount of the policy, without returning or offering to return the amount which has concededly been paid to the mortgagee for their benefit, and claim that they have a right to recover because the agreement for the appointment of appraisers was brought about by the understanding between the plaintiffs and defendants’ agent that the only question to be submitted to the appraisers was whether the loss should be fixed at $6,000 or $7,000. The plaintiffs insist that two of the insurance companies interested in. the loss were willing to fix the sum at $7,000, but that the defendants claimed that the loss was only $6,000, and that it was this difference which was to be adjusted by the appraisers. The defendants, however, show that the written agreement called for the appraisal provided for by the policy, and,, while the learned court at Trial Term permitted the plaintiffs, over the objection and exception of the defendants, to introduce evidence tending to establish- tlieir contention, there can be no doubt that this was error, and that the court, upon a motion to direct a verdict, had a right to disregard this testimony. (Wilson v. Deen, 74 N. Y. 531 ; Bohleber v. Waelden, 150 id. 405, 410.) An oral contemporaneous stipulation, not embraced in the writing, is ineffectual to control its effect. (Bohleber v. Waelden, supra, 410, and authorities there cited.) The learned court submitted the questions to the. jury, reserving all questions of law, whether the appraisal Was to be limited to the question of the value of the property above $6,000, and as to the actual value of the property destroyed, and both of these findings were favorable to the "contentions of the plaintiffs; but in disposing of the defendants’ motion to direct a verdict, the learned court held that the evidence offered to change the terms of the agreement to fix the damages by a commission of appraisal was improperly in the case, and directed that [326] judgment be entered in favor of the defendant insurance company upon the merits, with an extra allowance of five per cent upon the ■amount claimed in the complaint. The plaintiffs appeal from this • judgment. :: In the absence of proof of fraud, or mistake, there can be no -doubt of the correctness of the disposition which the learned court has'made of -this case (Wilson v. Deen, supra), and we are clearly -of opinion that the plaintiffs failed to show that the agreement was "entered into by reason of ahy legal fraud practiced upon them by the defendant insurance company. • It is quite probable that the defendants’ agent in the course-of the negotiations assumed that the •amount of the loss was $6,000, and that there was some talk that :'the question was practically to determine whether the loss should- be ■fixed at $6,000 or $/7,000j- but there is no suggestion in the evidence "that any- one was deceived as to the terms of the written agreement which was signed by-the. parties, and this gives nó intimation' that there is any reservation- of any question affecting the amount of the doss, and the evidence does not show that-either-the plaintiffs or the defendants made such a suggestion to their representatives -On the commission of appraisal; All- that may be gathered from this "agreement, which is to- be read in the light of the policy of instir•atice, is that the. parties have disagreed' as to -the amount of the dani- , ages, and that they have acted upon the provisions of the policy and •selected their appraisers, who are to determine this fact. If this agreement, the terms of which were ■ fully known to .all of the par-dies, did not express the understanding of the plaintiffs and defendant insurance company, they have- only themselves to blame, and the • courts cannot be expected to overturn well-established rules of law do enforce conditions which the parties have not thought it neces-Sary to include in their writings. - ■ -The plaintiffs insist upon referring to the appraisers as arbitrators, ■ and urge various matters which might be of importance if they were, 'in--fact,, arbitrators, among them that' the-plaintiffs never had any notice of the meetings -of the appraisers,- etc. The provision ■- of a -standard insurance policy that in the event- of a disagreement the -amount of the loss-shall be determined 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- disin [327] terested umpire,” contemplates that each party shall have a representative, each having an equal voice in the selection of the umpire, .and that the determination shall fix, not the liabilities of the parties under the law, but the amount of the value of the property destroyed. This does not oust the court of any part of its jurisdiction, and, in the absence of bad faith, the mere fact that the parties are not given notice of the meetings of the appraisers does not affect the validity of their proceedings. The appraiser selected by the plaintiff is his representative ; he is chosen for the purpose of guarding the rights of the man who selects him, and it must be assumed, in the absence of evidence to the contrary, that, he has discharged this duty, and that the plaintiff has had an opportunity of being heard if such a hearing- was necessary to the preservation of his. rights. In the case at bar, if the plaintiffs had been notified of the meetings and had attempted to govern the action of the appraisers by insisting upon their present contention, that the powers of the latter were limited to the question of the difference between $6,000 and $1,000, it would have been the duty of the appraisers to have refused to read this condition into the contract, and it does not appear that there was any lack of information on the part of the plaintiffs’ representative as to the value of the property, or that he was in any way guilty of any misconduct. He joined in the award, and as no erroneous rule of action was shown, there is no reason why the plaintiffs should not be bound by the result of this appraisal, which they had contracted to abide by in procuring their insurance. (Silver v. Western Assurance Co., 164 N. Y. 381, 383, 384.) The. defendant insurance company has accepted the result, has paid over the money to the defendant Louise O. Blytli, and the latter has refused to become •a plaintiff in this action, although it appears that she had a very substantial mortgage upon the premises, and was entitled to all. of the moneys which might become due upon this and other policies. 'It is not necessary to determine whether the contract of insurance, with its mortgagee clause, was such that the plaintiffs could have no cause of action, but it seems to be well settled that under the circumstances of this case it was necessary, before the action could be maintained by any one, that the amount which had been paid for the benefit of the plaintiffs, under the forms sanctioned by the terms of the policy, should have been offered to the defendants in the plead [328] ings and tendered upon the trial. (Remington Co. v. London Assurance Corporation, 12 App. Div. 218, 226, and authorities there cited.) This has not been done. The plaintiffs, having the benefit-of the amount paid, bring this action to collect the full amount of the policy, and a careful examination of all of the matters-urged -upon our attention by the appellants fails to disclose a single-reason' why ' this judgment should be reversed. The defendant insurance company appears to have done everything required by the letter and spirit of its contract, and the only reason which the-plaintiffs have for complaint is that they elected to abide by the action of the appraisers instead of agreeing upon the sum of $6,000, which it is claimed the defendants were willing to concede. The judgment appealed from should be affirmed, with costs. Goodrich, P. J., Bartlett, Hirschberg- and Jerks, JJ.,. concurred. Judgment affirmed, with costs.