James v. Insurance Co. of the State

GOODE, J. While plaintiff held a policy of insurance in the defendant company, a fire consumed part of the insured property; a stock of drugs and other merchandise insured for one thousand dollars and some pool tables for two hundred dollars. This action was instituted to recover the damages. Several defenses were interposed; bnt we are concerned with only one of them, i. e., that plaintiff did not, before suing, take steps to have the amount of the loss ascertained by an appraisal. The policy contained, among other clauses, one in the nsual form regarding an appraisement, and providing that, in the event of disagreement in regard to the amount of loss, the same should be as — 250 — certained by two competent and disinterested appraisers, the plaintiff and the company each selecting one, and those two choosing an umpire; further, that the appraisers should estimate the loss, stating separately sound value and damage, and failing to agree, should submit their disagreement to the umpire and the award of any two in writing should determine the amount of the loss. An adjuster of the company visited the scene shortly after the fire, but did not adjust the loss or, indeed, do much about it. The business books of the insured having been burnt, it was necessary for him to procure 'duplicate invoices of merchandise he had purchased in order that a computation might be made from them of the probable amount of the damage. He was examined in writing by the adjuster, and either said or was supposed to say, his current sales would average ten dollars a day. Three weeks later the adjuster returned, and plaintiff had then procured sufficient duplicate bills of his purchases to enable an estimate to be made of the loss. One pool table had been consumed and it was conceded plaintiff was entitled to two hundred dollars for its loss. The parties also agreed the value of the portion of the stock not burnt was $214. On the basis of plaintiff’s purchases as shown by the invoices he submitted, and the amount of his sales at the supposed average of ten dollars a day, the adjuster computed plaintiff had had no goods burnt at all, as it appeared the total sales greatly exceeded the total purchases. It turned out there had been a misunderstanding regarding the amount of the daily sales, which averaged only two dollars or-less, instead of ten dollars. During the parley betvreen plaintiff and the adjuster, the latter said substantially this: the loss on the pool table was $200 and the salvage $214; that plaintiff might keep the salvage and the company, would pay him $400 for his loss; $200 for the pool table and $200 for merchandise destroyed. The adjuster said he would do this, not in acknowledgment of any liability, — 251 — but to avoid trouble. Plaintiff! refused to accept the offer and declared he would not take less than eight hundred dollars. Plaintiff’s testimony conduces to prove he offered to have the loss appraised; indeed, that he offered to let the adjuster select a competent pharmacist to say what the loss was and plaintiff would abide by his decision. This offer was in addition to another made by plaintiff to let the company select one appraiser and plaintiff' one, to determine the loss, which was a formal offer by plaintiff to submit to an ap-praisement according to the terms of the policy. The testimony of the adjuster went to prove there was no demand or offer by plaintiff for an appraisal and that the only conversation regarding the selection of some one to assist in the adjustment, related to the procurement of one or two competent pharmacists, to estimate the value of the portion of the stock which was not burnt. On this issue the court instructed that if the adjuster did not try in good faith to agree with plaintiff as to what the loss was, but instead took the position that it was not in excess of $400 and refused to pay more, and thereupon, when the adjuster said he would pay no more than $400, plaintiff offered to allow the adjuster to select a disinterested person to appraise the loss and the adjuster refused to appoint an appraiser, in such event there was no' disagreement between the company and plaintiff as to the amount of the loss within the meaning of the policy, and the company waived its right to have its demand submitted to the appraisers. We consider that instruction erroneous for two reasons: first it includes an improper comment in emphasis of one bit of evidence, to-wit, the offer of the adjuster to pay four hundred dollars (Dermott v. Barnum, 19 Mo. 204; Spohn v. Railroad, 87 Mo. 74; Noyes v. Cunningham, 51 Mo. App. 199); and, second, it drew attention to an offer of settlement as a circumstance from which the jury might find defendant did not try to agree with plaintiff as to the amount of damage — 252 — ■done. The instruction is suggestive of .the notion that if the adjuster offered to pay four hundred dollars and said he would pay no more, this fact proved he did not attempt, in good faith, to agree with plaintiff regarding the amount of the loss. The instruction reads, in substance, that if the jury believed the adjuster did not, in good faith, try to agree with plaintiff regarding the amount of the loss, but took the position that the loss was four hundred dollars and said he would pay no more, etc. Two hypotheses of fact were coupled together in that language as though one was consequent upon the other, when, in truth, they had no logical or necessary connection. It does not follow that the adjuster failed to attempt in good faith to agree with plaintiff as to the.amount of the loss, because he declared he would pay no more than four hundred dollars. Neither did this declaration tend, under the circumstances in proof, to prove an arbitrary refusal to try to agree. According to the testimony for defendant, and there is none the other way, the proposal to pay four hundred dollars was in the nature of a compromise offer, made to avoid litigation over a disputed demand, just as plaintiff’s offer to take eight hundred dollars was, and such an offer impairs no legal right. [Cook v. Insurance Co., 70 Mo. 610.] Two or more arguments are advanced in favor of the soundness of the instruction, or if unsound, against, a reversal of the judgment. One is the asserted failure, as shown by the entire evidence, of the adjuster to endeavor to agree with plaintiff regarding the amount of the loss, and no doubt there must be an attempt to agree or the company will not be allowed to avail itself of an omission by the insured to demand an appraisal before suing on the policy, though it may avail itself of this defense if it had, in good faith, tried to agree with him. [Murphy v. Insurance Co., 61 Mo. App. 323; Cullen v. Insurance Co., 126 Mo. App. loc. cit. 421.] Suffice to say on this point, the usual efforts to ascertain the loss and come to a set — 253 — tlement were made by the adjuster, and there is no indication that his effort was a sham. He conferred with plaintiff, took his examination in writing, did not deny liability, but went oyer the invoices of goods purchased and had competent persons estimate the value of the salvage. After this had been done he and the plaintiff made counter-propositions looking to a settlement. Such conduct constituted an attempt to settle within the meaning of the law (see cases infra), and distinguishes this case from Cullen v. Insurance Co., supra, wherein an arbitrary stand was taken by the insurance company that .it would pay so much and no more, Avithout an effort to ascertain what the actual loss was, and accompanied by much personal abuse of the insured and an absolute refusal to attempt an adjustment unless he would admit the total value of the goods destroyed Avas only five dollars. Another contention is that as plaintiff and the adjuster agreed regarding the value of the portion of the stock not burned, and as the remainder of the stock was destroyed, there Avas no need for an appraisal because appraisers could not state separately the sound value5 and the damage in conformity to the clause of the policy providing for an appraisal. This is a strained view of the meaning of the policy. The main purpose of the appraisal clause is to have the amount of loss ascertained by disinterested persons in the event of disagreement between the parties, so as to keep down litigation. In connection with an estimate of the loss, the appraisers are expected to state separately the value of the undamaged property and the amount of damage done to what is injured. In the present instance the appraisers could state the value of the sound property as agreed upon by the parties, and it would be their duty, also, to estimate the value of what was burnt. We Avould go far toward annulling the clause in question, were we to hold an appraisement was dispensed Avith in the event of a partial destruction of personal — 254 — property by the facts that part of the insured property was entirely destroyed and that plaintiff and the company agreed to the -value of the salvage. The essential fact which would call into play the appraisement clause of the policy was a disagreement regarding the amount of the loss. These parties undoubtedly disagreed about that, as their counter-offers of settlement show. [Murphy v. Insurance Co., supra; Dautel v. Insurance Co., 65 Mo. App. 44.] Moreover, the value of the insured property was uncertain, it was not all consumed, and the quantity which was consumed was fairly in dispute. These facts called for an appraisal. There was ample evidence to prove plaintiff offered to have the loss appraised and a charge to that effect, such as the one contained in the latter part of the condemned instruction, omitting the ürst part, would have been good; though, as given, the instruction was quite misleading. The judgment is reversed and the cause remanded. All concur.