Vernon Ins. Co. v. Maitlen. arbitrators failed to agree, and that defendant [insurance company] was in no manner responsible for their disagreement. What, then, is the law applicable to such a state of facts? * * * There is no evidence from which a jury would be warranted in finding that the arbitration failed because of the perverse conduct or want of good faith of the defendant or its adjuster. Plaintiffs and their appraiser were as much at fault as, if not more than, the defendant; * * * Ascertainment of the amount of loss by appraisement was a condition precedent to a right of action, and, if the appraisers selected failed to agree on a third, this does not in itself justify a suit for the amount of the loss. In the absence of bad faith or acts intended to defeat arbitration on the part of the insurer, the plaintiff must propose the selection of other arbitrators, to the end that an award may be agreed upon, and the basis for action determined. Davenport v. Long Island Ins. Co., 10 Daly 535; Altman v. Altman, 5 Daly 436; Caledonian Ins. Co. v. Traub, 83 Md. 524, 35 Atl. 13; Carroll v. Girard Ins. Co., 72 Cal. 297, 13 Pac. 863; Levine v. Lancashire Ins. Co., 66 Minn. 138, 68 N. W. 855. Following this rule, it was plaintiffs' duty, when the appraisers first selected failed to agree, through no fault of either of the parties, to select a new appraiser, in order that the amount of their recovery should be fixed. They could not arbitrarily proceed to set aside the agreement for arbitration and sue for the amount of loss; for the defendant agreed to pay the amount found due by the appraisers, and, in the absence of fraud, bad faith, or culpable neglect, or other conduct amounting to a refusal to proceed with arbitration, the defendant had the right to stand on its contract rights." In Silver v. Western Assurance Co., 164 N. Y. 381, 58 N. E. 284, the court of appeals of New York said: "The contention of the plaintiff in this case is that the evidence is of such a character as to support a finding by the jury that the defendant was acting in bad faith, with the purpose of Vernon Ins. Co. v. Maitlen. defeating the real object of the clause; that, therefore, the plaintiff is absolved from compliance with it, and hence that the refusal to dismiss the complaint was not error. The arbitration agreement was signed by both parties, and by it Jacob Jacobson was appointed appraiser on the nomination of the plaintiff, and Adolph Friedman, on behalf of the defendant, the agreement bearing date December 14, 1895. From that date until the 28th day of January following, at which time this action was commenced, it does not appear that the plaintiff, his appraiser or his attorney, took any action whatever looking to the making of the appraisement for which the agreement undertook to provide. The defendant's appraiser and attorney seemed to have taken all the steps that were taken towards bringing about an appraisement. On January 6th, Adolph Friedman, defendant's appraiser, addressed to the plaintiff at the place where the fire occurred a registered letter, but it was returned, having stamped across the face of it in red ink, 'Returned to sender. Cannot be found by N. Y. P. O. Jan. 9, 1896.' It also bore in writing the words, 'Removed. No address. W. R. 164.' * * No evidence has been given tend * ing to show that the defendant was not acting in good faith when it executed the agreement for appraisement. There was a delay of some days, covering in part the Christmas holidays, after the agreement was executed, before defendant's appraiser undertook to get in communication with the plaintiff's appraiser, but it does not appear that this delay was prompted by, or known to the defendant. On the other hand, there was still greater delay on the part of the plaintiff's appraiser, upon whom rested precisely the same measure of obligation to proceed promptly with the appraisement as devolved upon the defendant's appraiser. Not only did the plaintiff's appraiser omit, then or later, to perform the duties of an appraiser, but the plaintiff also seems to have omitted suggesting to his appraiser, to the defendant, or its appraiser, that expedition was desired for any reason. It Vernon Ins. Co. v. Maitlen. * * * is the 'duty of each party to act in good faith to accomplish the appraisement', it is just as much the duty of one party as of the other, and, hence, it is difficult to discover the logic of the contention that the assured and his appraiser could sit still from the time of making of the agreement until the commencement of the action, and then deprive the other party, whose appraiser and attorney did take some action towards carrying out the agreement, of the benefit of the agreement on the ground that its object had not been made effective by an appraisement. We think there was no evidence upon which the jury could base a finding that the plaintiff should be absolved from compliance with the agreement to appraise because the defendant in bad faith sought to defeat the real object of the provision in the policy providing for an appraisement of damages." In Phenix Ins. Co. v. Carnahan, 63 Ohio St. 258 (six cases), 58 N. E. 805, the supreme court of Ohio held that the right to demand an appraisal was a distinct contractual right, and that the motive which prompted either party to the policy to assert that right was not a matter of inquiry for the court or jury. Again it is said, in Uhrig v. Williamsburg City Fire Ins. Co., 101 N. Y. 362, 365, 4 N. E. 745: "Under the arbitration clause, it was the duty of each party to act in good faith to accomplish the appraisement in the way provided in the policy, and if either party acted in bad faith so as to defeat the real object of the clause, it absolved the other party from compliance therewith; and if either party refused to go on with the arbitration, or to complete it, or to procure the appointment of an umpire so that there could be an agreement upon an appraisal, the other party was absolved. A claimant under such a policy cannot be tied up forever without his fault and against his will by an ineffectual arbitration." The cases of Rademacher v. Greenwich Ins. Co., 75 Hun VOL. 158-26 Vernon Ins. Co. v. Maitlen. 83, 27 N. Y. Supp. 155; Brock v. Dwelling-House Ins. Co., 102 Mich. 583, 61 N. W. 67, 26 L. R. A. 623, 47 Am. St. 562; Hickerson v. German-American Ins. Co., 96 Tenn. 193, 33 S. W. 1041, 32 L. R. A. 172; McCullough v. Phenix Ins. Co., 113 Mo. 606, 21 S. W. 207, are not inconsistent with the views we have expressed, nor with the principles stated in the cases from which we have quoted. The general averment of the complaint that the appellee had performed all the conditions of the policy and contract on his part to be performed was not sufficient to cure the infirmities of that pleading in regard to the failure to procure an appraisement of the property as provided for in the policy sued upon. The complaint disclosed that no such appraisement had been made. It did not sufficiently aver that it had been waived either directly or by any misconduct on the part of the appellant. It is clear, upon reason and authority, that the complaint failed to show a compliance by the appellee with a valid condition of the policy of insurance, which, by the express terms of that contract, was made a condition precedent to any right to maintain an action upon the policy, or a legal excuse for his failure to comply with such condition. The court erred in overruling the demurrer to the complaint. None of the questions in regard to the errors of the court in admitting evidence is likely to arise upon another trial, and we need express no opinion upon them. What has been said in this opinion sufficiently indicates our views upon the several instructions given and refused and made grounds for the motion for a new trial. For the error of the court in overruling the demurrer to the complaint, the judgment is reversed, with instructions to sustain the demurrer, and for further proceedings in accordance with this opinion. Brown v. Clow. 158 403 e164 284 164 285 BROWN ET AL. v. CLOW ET AL. [No. 19,317. Filed February 19, 1902. Rehearing denied April 25, CORPORATIONS.-Payment of Capital Stock.-Liability of Directors.-In SAME.-Failure of Directors to Make Annual Report.-Limitation of Ac- SAME.-Action Against Directors.-Former Adjudication.-An answer, in an action by creditors against the directors of an insolvent corporation under the statute making directors liable for failing to make annual reports and to require the capital stock to be paid into the treasury within eighteen months, alleging that the receiver of the company, under the direction of the stockholders, brought suit against one of the defendants as such director for money alleged to have been wrongfully received by him while he was director of said company, and the court found that he was not a director at the date in question, does not constitute an adjudication of such question and estop plaintiffs from asserting and proving that defendant was a director at such time. pp. 412, 413. SAME.-Failure of Directors to Require Capital Stock to be Paid.-Answer. -An answer, in an action against the directors of a water 164 286 |
