Rutter v. Hanover Fire Insurance

DOWDELL, J. This is an action on two policies of insurance, the complaint being in Code form. The defendant company filed pleas of tender, and special picas setting up an award had on a submission to arbitrario!) under and pursuant to the stipulations contained in the policies. Issue was joined on the pleas.of tender, numbered two and three, and replications were filed to the special pleas. Demurrers were interposed and sustained a§ to replications numbered from one to eight inclusive, and overruled as to the 9th, 10th, and 11th. Replications 9th and 11th set up a modification of the agreement of submission for award, and the 10th sets up misrepresentation by defendant’s agent whereby plaintiffs were induced to sign the agreement of submission. Plea No. 1 after having been filed was amended, and a motion Avas made to strike the amendment, which was OAmrruled. A demurrer Avas then interposed to this plea as amended, Avhicli Avas likeAvise overruled. The correctness of these rulings is questioned by the first [214] and second assignments of error. We tliink there can be no' doubt that plea 1 as amended was a good plea, and the motion to strike and the demurrer were properly overruled. — Ga. Home Ins. Co. v. Kline, 114 Ala. 366; Western Assurance Co. v. Hall, 112 Ala. 318; Hamilton v. Liverpool, L. & G. Ins. Co., 136 U. S. 242; Hamilton v. Home Ins. Co., 137 U. S. 370. As stated by counsel for appellants in argument, the main and important question in the case, is the one presented by the replications setting up a modification of the agreement of submission for appraisal and award. That there was such an agreement entered into by the parties in writing, pursuant to the stipulations in the policies, is not denied. Nor is it denied that an appraisal was had and an award made. It is not pretended that the modification of the agreement was in writing, but a verbal modification is sought to be shown, and this by statements made by appellant Hendrix, and the defendant’s agent, McCarroll, at the time of, and subsequent to the execution of the written agreement of submission to appraisal, and before the appraisers entered upon the appraisement. That the written agreement of submission was subject to change and modification by subsequent verbal agreement, as any other written contract, as a question of law, is hardly to be doubted. That the terms and conditions of a written contract may not be varied by verbal agreements made before or contemporaneous with the writing, is an elementary proposition of law, and too well established to call for citation of authority. The action of the court in excluding testimony as to the statements of parties made prior to and at the time of entering into the written agreement of submission for appraisal, which sought to vary the terms of the writing, was free from error. In tbe case of the Georgia Home Ins. Co. v. Warten, 113 Ala. 479, it was said by this court: “It is not every representation, untrue in itself, made in the course of negotiations leading to a contract, which will justify or authorize a rescission of the contract. As a general rule, it has long been the doctrine prevailing in this court, that the misrepresentation of material "facts, on which the party actin'" relies, and has the right to rely, [215] whether made willfully and intentionally, or innocently, from ignorance, inadvertence, or mistake, will avoid a contract it may have induced [citing Juzan v. Toulmin, 9 Ala. 662; Munroe v. Pritchett, 16 Ala. 785; s. c. 22 Ala. 501; Davis v. Betz, 66 Ala. 210; Rivers v. DuBose, 10 Ala. 475; Townsend v. Cowles, 31 Ala. 428]. But these, and all our decisions hold, that in the absence of a relation of trust and confidence, or of some other peculiar fact or circumstance, a misrepresentation of matter of law, or of matter of judgment equally open to the observation or inquiries of both parties, or of mere opinion, will not vitiate a contract.'’ After citing and quoting from other authorities, it was further said in that case: “In Townsend v. Cowles, supra, after a careful examination of authority, and deliberate consideration of the subject, it was ruled, that a misrepresentation of the legal effect of a written instrument was, from its very nature, but the expression of an opinion upon a question of law, equally open to the observation and inquiries of both parties, and as to which, the law presumes that the party to whom it was made had knowledge.” The agreement for submission to appraisers set forth as exhibit “A” to the defendant’s plea contained the following stipulation: “It is expressly understood that this agreement and appraisement is for the purpose of ascertaining and fixing the amount of sound value and loss and damage only, to the property hereinafter described, and shall not determine, waive or invalidate any other right or rights of either party to this agreement.” “The property on which the sound value and the loss or damage is to be determined is as follows, to-wit: On stock of merchandise, consisting principally of dry goods, groceries, notions, drugs, cigars, tobacco, and such other mdse, usually' kept for sale in a general mdse, store. On store furniture and fixtures, including iron safe, while contained in the one story" brick, metal roof building situated on the N S of Bell St. on land on the Peoples Cotton Factory", Montgomery, Ala.” “It is further expressly understood and agreed that in determining the sound value and the loss or damage upon the property, herein-before mentioned, the said appraisers are to make an estimate of the actual cash cost of replacing or repair [216] ing the same, or the actual cash value thereof at and immediately prececding the -time of the fire; and in case of depreciation of the property from use, age, condition, location or otherwise, a proper deduction shall be made therefor.” We think it quite clear that the terms of the agreement called for an appraisal of the property totally destroyed as well as for that partially injured, and we do not understand that counsel for, the appellee insist to the contrary. It was the duty of the arbitrators under this agreement to appraise the property totally destroyed, as Avell as that Avhich was partially destroyed, unless there had been a modification of the agreement of appraisal by the parties that dispensed Avith such duty on the part of the arbitrators. The aAvard Avliich Avas made only appraised the goods which Avere partially destroyed, and in this respect there Avas a failure on the part of the arbitrators to carry out the agreement of appraisal. An award which does not conform to the arbitration agreement is not binding on the parties to such agreement. Plaintiffs’ replication No. A, to AAdiich a demurrer Avas sustained, set up in ansAver to the defendant’s plea of arbitration and award, the failure of the arbitrators to appraise the property Avhich Avas totally destroyed. The court erred in sustaining the demurrer to this replication. Plaintiffs’ replications nine and eleven to the defendant’s plea set up a subsequent modification of the agreement of appraisal entered into by the parties, by which it Avas understood and agreed that only the goods partially injured Avere to be appraised and valued by the arbitrators, and an aAvard to be made accordingly, and that the goods totally destroyed Avere not to be included in this appraisement. In support of the replications the plaintiffs offered evidence tending to show, that subsequent to the execution of the appraisal agreement set up in defendant’s plea, it Avas agreed and so understood between the parties to the agreement, that the appraisers Avere to appraise only the goods partially injured and not the goods totally destroyed, and that the appraisers were so informed before entering upon their duties as-such. If the parties subsequent to the execution of the appraisal contract, by mutual agreement and under [217] standing, put a construction upon their contract different from what the contract furnished on its face, this would be equivalent to a modification of the contract to that extent. This, the evidence of the witness Hendrix tended to show, and it was error to exclude it. If the award was not binding on the plaintiffs under the facts set up in replication seven, or if the appraisal agreement was modified as set up in replications nine and eleven, then in either case, it would be competent to show the property totally destroyed and its value. For the errors indicated, the judgment of the court must be reversed and the cause remanded. Other rulings of the court on the demurrers to the replications than the ones passed on in the foregoing opinion seem to be free from error. Reversed and remanded.