Whitney v. National Masonic Accident Ass'n

54 N.W. 184, 52 Minn. 378, 1893 Minn. LEXIS 431

• Court: Supreme Court of Minnesota
• Decided: January 28, 1893
• Status: Published

Opinion

Dickinson, J.

This is an appeal from a judgment dismissing the action. This disposition of the cause was directed by the court on the pleadings, when the case came on for trial, upon the ground that the action whs prematurely instituted. It appears that the defendant is a corporation or association organized under the laws of the state of Iowa, and engaged in insuring its members against accidents, the indemnity payable being realized by the association by assessment on its members. The plaintiff became a member of the association, and, having suffered an injury which would entitle him to indemnity, under the terms of his contract of membership, this action is prosecuted to recover the same. The certificate upon which the action is founded declares that, upon the consideration therein expressed, the plaintiff is accepted as a member of the association, “subject to all the conditions hereinafter contained, and entitled to the following benefits, viz. twenty-five dollars per week, * * * as indemnity for loss of time resulting from bodily injury,” etc. There follows a statement of the “agreement and conditions under which this certificate is issued and accepted,” among which is the following:

“Disputed claims shall be adjusted as follows: Should such a claim arise, it shall be referred to a committee of three, all of whom shall be Master Masons,— one to be chosen by the assured or his representative, one by the association, and the two so chosen shall select the third, none of whom shall be relatives of the assured, or have any pecuniary interest in the claim. No suit shall be brought upon any disputed claim before the same shall have been arbitrated by such committee, and the award of such committee shall be final and conclusive upon both the"claimant and the association.” The same provision is embodied in the articles of incorporation.

The defendant having disputed the plaintiff’s claim for indemnity, two arbitrators were chosen, — one by each of the respective parties; but, as is alleged in the complaint, the arbitrators so chosen were unable to agree upon a third, and have utterly .failed to arbitrate upon the claim. It further appears from the reply that the reason of the inability of the two arbitrators to select a third was that one of them* insisted that the third arbitrator should be a lawyer, to which the other arbitrator would not consent.

The agreement with respect to arbitration is in such general terms that it must be regarded as intended to comprehend the whole matter of any claim which may be disputed, including the law as well as all the facts of the case. There is nothing indicating an intention to confine the arbitration here provided for to the determination of any particular fact or facts. By the terms of the contract, the subject to which this provision is applicable is not only so broad as to cover any controversy that may be involved in “disputed claims,” but there is no such mention-or designation of any particular fact or matter as the subject of arbitration that this provision can be regarded as having only a limited application.

It will be observed that the contract fixes a certain definite sum as the amount to be paid weekly in case of disability, and only as' it further provides for the arbitration of disputed claims does it qualify that express obligation to pay the sum stated, or make the amount payable dependent upon the determination of arbitrators. It is also apparent that this clause was framed for the purpose of making an arbitration of any disputed claim a condition precedent to the right to maintain an action to recover the indemnity contracted to be paid.

The case before us is distinguishable from those where the agreement provides only for the determination by arbitration of some particular fact or facts, as well as -from eases where the contract-expresses no obligation to pay any definite sum <5r to do any particular thing, but only to pay such sum or to do such thing as shall be determined by arbitrators. In such cases, and perhaps some .others, the principle of law which is decisive in the present case is not controlling, as the authorities to be hereafter cited will show.

It has long been the settled rule of law that if, in a contract creating a definite legal obligation, (e. g. to pay a certain sum of money on a specified contingency,) there is embodied an agreement that the rights or obligations of the parties shall be determined by arbitration, and that no action shall be maintained on the contract, such an agreement is not legally effectual to bar such an action. Gasser v. Sun Fire Office, 42 Minn. 315, 317, (44 N. W. Rep. 252;) Edwards v. Aberayron Mut. S. Ins. Soc., 1 Q. B. Div. 563, 578, et seq., and cases cited; Stephenson v. Piscataqua F. & M. Ins. Co., 54 Me. 55; Delaware & H. Canal Co. v. Pennsylvania Coal Co., 50 N. Y. 250; Seward v. City of Rochester, 109 N. Y. 164, 169, (16 N.E. Rep. 348;) Mentz v. Armenia Fire Ins. Co., 79 Pa. St. 478, and cases cited; Holmes v. Rechet, 56 Cal. 307; Cobb v. New England Mut. M. Ins. Co., 6 Gray, 192; Reeds. Washington F. & M. Ins. Co., 138 Mass. 572, 575; Allegre v. Maryland Ins. Co., 6 Har. & J. 408; Trott v. City Ins. Co., 1 Cliff. 439; 2 May, Ins. (3d Ed.) 492; 2 Chit. Cont. (11th Am. Ed.) 1183; 2 Story, Eq. Jur. 1457; 61 Law T. 171. In Scott v. Avery, 5 H. L. Cas. 811, and particularly in the opinion of Lord Campbell, is language which seems to be opposed to the rule as it had theretofore been established. But it is apparent from the later case of Edwards s. Aberayron Mut. S. Ins. Soc., supra, that the majority of the court in the exchequer chamber did not regard that case as overruling former decisions. The rule is so well settled, and so generally recognized, that it is needless to consider the various, reasons which have been assigned for it.

The principle of law above stated controls the decision of this case. The general agreement to arbitrate, and that no action should be prosecuted, did not preclude the plaintiff from maintaining an action on the contract. Hence the order dismissing the action, and the judgment thereon, were erroneous.

Judgment reversed.

(Opinion piiblisliea 54 N. W. Rep. 184.)