Boyle v. Hamburg-Bremen Fire Insurance

Opinion by Mr. Justice Williams, The two principal questions in this case are, first, were the proofs of loss furnished by the insured a substantial compliance with the contract? and second, was the action prematurely brought in view of what is called the arbitration clause in the policy? Both questions depend upon the proper construction of the contract of insurance. The contract contains the undertaking of the company to insure the general stock of merchandise of John D. Boyle’s Sons “ against all direct loss or damage by fire,” to the extent of twenty-five hundred dollars, in consideration of the payment of a cash premium of twenty-five dollars. Arranged around this contract is a line of defensive “stipulations, exceptions, conditions and provisions.” Some of these are not numbered, but with others numbered from 1 to 112 inclusive, they stand bristling like armed sentinels around the contract and the liability of the company thereunder, ready to impale even an honest claimant on a bare technicality. While this policy was in force a fire broke out across the street from the store of the insured. Before it was extinguished, the windows, including the show window, in the Boyle’s Sons’ store, were broken, and as they allege a large amount of [356] water and smoke found their way into the store, the effect of which was a general deterioration in value of the stock. No article was consumed, but the loss claimed for was a percentage of depreciation on all the goods by reason of the effect’of the water and smoke upon their quality and salability. This is the character of the loss for which a recovery was had in the court below. Were the proofs of loss sufficient? No 67 of the stipulations surrounding the policy requires, “ If fire occur the insured shall give immediate notice of any loss thereby, in writing to the company.” No complaint is made of want of promptness in giving notice. No. 68 makes it the duty of the insured to “forthwith separate the damaged and undamaged personal property and put it in the best possible order.” No. 69 then requires that the insured shall proceed “ to make a complete inventory of the same stating the quantity and cost of each article and the amount claimed thereon.” The plaintiff undertook after the fire to prepare proofs of loss. These are printed in the paper-books of the appellant and cover about ten printed pages. They purport to contain an inventory of all the goods in the store at the time of the fire, and their value. At the end of the inventory the plaintiffs state their claim to be for depreciation as follows: “ 33£ pc. on dry goods & underwear &e. (Invent. 6,061.60) $2,020.53 25 pc. on furniture & fixtures ( “ 650.00) $ 162.50 15 pc. on boots, shoes & rubbers ( “ 1,050.00) $ 157.50 15 pc. on groceries, spices, &c ( “ 2,860.00) $ 427.50 Total loss $2,768.03 ” In this inventory are found some items of a collective character, such as “ a lot of goods in the show window,” contents of a small show case,” “ lot of shirt bosoms, h’dfs, fly netting &c.” The point taken is that No. 69 requires each article to be given “its quantity and cost, and the amount claimed thereon” separately. This stipulation is not to be construed most strictly against the insured. Its object is to secure a full statement of the loss he claims so that the company may have notice, and the necessary opportunity to test its correctness. We quite agree with the learned trial judge that the proofs of loss afforded a sufficient notice of the character and amount of the plaintiff’s claim. If it had seemed as to any particular [357] lot or class of goods to be wanting in clearness or precision the attention of the insured should have been drawn to it and such further information asked for as was fairly necessary to an ascertainment of the loss. The law does not require the performance of useless things, or favor the arbitrary imposition of useless burdens. Substantial performance is enough. We come now to the second question. Stipulations 86 to 91 inclusive provide that if the parties to the contract cannot agree upon the amount of the loss, it shall be ascertained by two competent and disinterested appraisers. To make it certain that they shall be disinterested each party shall choose one, and the two so selected shall proceed to choose a “ competent and disinterested umpire.” The two appraisers are then to appraise the loss, and if they do not agree their difference is to be submitted to the umpire who determines in the end the amount of the damages to which the insured is entitled. Now it is alleged by way of defense to this action that it was brought without such preliminary adjustment of the loss by appraisers and that there should be no recovery for that reason. It will be noticed that the contract provides for an adjustment by the parties to it in the first instance. Stipulation No. 2 provides, speaking of the ascertainment of the amount of a loss, “said ascertainment or estimate shall be made by the insured and this company.” No. 3 then follows with the declaration that if the parties “ differ ” so that an agreement upon the loss is not reached, the subject shall then go to the “ appraisers as hereinafter provided,” referring undoubtedly to the provisions quoted above as Nos. 86 to 91 inclusive. In No. 86 it is provided that “ in the event of disagreement as to the amount of the loss the same shall, as above provided, be ascertained by two competent and disinterested appraisers.” This contemplates an actual effort to agree. When this effort fails, and not until then, either party possesses the right to say “ we differ, and our points of difference must be referred to arbitrament under the terms of the policy.” The insurer has no more right to disregard the first method in the contract than the insured has to disregard the second. Neither can insist on the second who has not shown himself ready and willing to enter upon the first, because these remedies are not optional to either. They are successive, unless both agree to the contrary. This proposition fairly follows from Snodgrass v. Gavitt, 28 Pa. 221. [358] If the fact was, as the plaintiffs alleged, that the company after receiving the proofs of loss made no effort to agree with the plaintiffs upon the amount of their loss but gave notice that a difference had arisen and demanded the appointment of appraisers in the first instance, its position was unwarranted, and it has no right to complain that its demand was disregarded and that the plaintiffs resorted at once to an action. This view of the question renders a discussion of the revocability of the arbitration clause unnecessary, as the question plays no part in the determination of this case. The assignments of error Nos. 1, 2, 5, 6, 7 and 9 are overruled. The plaintiffs did not allege the consumption by fire either in whole or in part of any article of merchandise, but a percentage of depreciation on the entire stock resulting from its exposure to water and smoke. The questions to be settled were, therefore, What was the entire stock worth ? and What was the percentage of depreciation suffered? The 3d and 4th assignments are overruled. The points referred to in these assignments should have been affirmed on a different state of the evidence, but on the proofs in this case we cannot say it was error to refuse them. The reasons for this conclusion have been already given. The cases of German American Insurance Company v. Hocking, 115 Pa. 398, and Commercial Union Assurance Company v. Hocking, 115 Pa. 407, are not in point. In each of those cases the same question was met. The policy sued on gave the company sixty days after receiving proofs of loss to determine whether to rebuild or to pay the loss. The suits were brought before the expiration of the time limited. For this reason the actions were prematurely brought. The 8th assignment is also overruled. The proofs of loss had been put in evidence generally before this offer was made, and the learned judge rightly held that they could be used for any legitimate purpose by either party without putting them in evidence again. Whether the offer had been admitted or refused no error requiring the reversal of this judgment would have been committed thereby. The judgment is affirmed.