Hughes v. Vinland Fire Insurance

The error complained of in this case is the ruling of the circuit court that the complaint did not state facts sufficient to constitute a cause of action. The facts stated in the complaint show, we think, a liability on the part of the defendant to pay for the loss.

By the sixth section of the act under which the defendant company was organized (ch. 103 of 1872), it is provided that every member who may sustain a loss shall immediately notify the president of the company, who shall forthwith convene its directors, whose duty it shall be, when so convened, to appoint a committee of not less than three nor more than five members of the company, to ascertain the amount of such loss; and, in case of the inability of the parties to agree upon the amount of such damages, the claimant may appeal to the judge of the county court of the county, whose duty it shall be to appoint three disinterested persons as a committee of reference, who shall have full authority to examine witnesses and to determine all matters in dispute, and who shall make their award in writing to the president, which award shall be final. Now it is objected that the complaint is defective because it does not show that proceedings were had under this section, which, it is said, is a condition precedent to the right of recovery. We are unable to concur in this view of the matter. On the argument, grave objections were urged by plaintiff’s counsel against the validity of this provision, and it was insisted that it could not be sustained for any purpose or to any extent. We are not clear that it can be; but that proposition we are not now called upon to decide. Eor it will be observed that the first committee appointed only have power “ to ascertain the amount of such loss.” It acts merely as an adjusting body, but does not settle any matter in dispute, or really touch the question of liability. Tbe *328“ committee of reference,”- so called, have full authority to examine witnesses, to determine all matters in dispute between the parties, and to make an “ award ” as in case of ordinary arbitration. Possibly, when that proceeding is bad, tlie remedy is on 'the award; but upon that point we express no opinion. But certainly the first committee does not act in the character of an umpire, or perform-the duty of an arbitrator. Now the complaint shows that the plaintiff gave to the defendant due notice of the destruction of his property. He rendered to the board of directors a written statement, verified by affidavit, on all points desired by them relating to the fire. The officers of the company had an opportunity to adjust the loss, if they have not done so. And we can really see no more reason for saying that the decision of the adjusting committee must be had or shown, before an action can be sustained on the policy, than there would be for holding in any case that the adjustment of the loss by any insurance company was a prerequisite to the right to bring an action. The counsel for the defendant likens the effect of the provision to a stipulation in a building contract where the parties agree to make the decision of an architect final as to the character and value of the work. But it is obvious that the cases are not parallel, and the rules applicable to the one cannot be applied to the other. In the case of the building contract, the architect does act as umpire; but in the case before us the committee first appointed does not act in that character. The officers of the company might themselves ascertain the amount of the loss, without the intervention of any committee. There is nothing to prevent them from doing so.

There is nothing in the complaint which would warrant the assumption that a committee was appointed by the county judge under the second clause of the provision. So that, in any view, we think the complaint sufficient.

By the Court. — The judgment of the circuit court is reversed, and the cause remanded for further proceedings.