Wilson v. Central Insurance

135 A.D. 649, 119 N.Y.S. 955, 1909 N.Y. App. Div. LEXIS 4032

Opinions

Ingraham, J.:

The plaintiff was a subject of Great Britain and the defendant a - corporation organized and existing under the laws of Great Britain. The plaintiff had been in the employ of the defendant as its agent. The defendant issued to the plaintiff a policy of insurance covering accidents happening in Europe which- was extended by an indorsement on policy so as -to cover risks attendant on journeys by the assured to the United States of America and the south of Canada. -This policy insured the plaintiff against accidents within twelve months beginning at noon on May 9, 1903. One of the conditions to which this policy was subject was that the right to recover payment of any capital sum insured under this policy should be forfeited and extinguished on the expiry of six months from the date of the accident and the right to recover payment of the weekly compensations should be forfeited -and extinguished on the expiry, of fifteen months from the date of the accident or sickness, on the completion of .which periods respectively the liability of the company in respect to such accident or sickness should cease and determine, unless within these periods respectively a settlement with the insured or his representatives has .been agreed upon or referred to arbitration in terms of condition 8. Condition 8 is as follows: “ If any difference or dispute shall arise respecting the liability of the . company or the amount payable to the insured, the matter in difference shall-be referred to the arbitration and decision of a neutral person as single arbitrator, and the decision of the arbitrator shall be final and binding on all parties and this condition shall be deemed and taken to be an agreement to refer as aforesaid within the meaning of the ' Arbitration Act, 1889, the Arbitration (Scotland) Act, 1894,* or any for the time being subsisting statutory modification thereof and it is hereby expressly stipulated and declared that the obtaining of an award by such arbitrator shall be a condition precedent to enforcing the liability of the company in respect of any claim under this policy regarding which any such difference may have' arisen; and further, that each party shall pay his or their own costs of the reference, arid shall also pay one-half of the costs of the arbitrator, and of the award, and of any application to the court which may be necessary for the appointment of a single arbitrator, should such application be required.” 'After this policy was issued and in June, 1903, the plaintiff came to this country and engaged in. soliciting insurance and traveled about' the country for that purpose. He took a temporary appointment from a German insurance company as managing agent, which required him to be constantly traveling. On February 26; 1904, while underneath a railroad bridge in Allegany City, Penn., his right eye was injured; it became much inflamed and swollen and subsequently plaintiff claims to have lost the sight of the eye. On-February 29, 1904, the plaintiff wrote a letter to the defendant informing it of the accident to his eye on the twenty-sixth inst. This letter was answered March 12, 1904, with the request that the plaintiff fill up and return a printed form which appears to have been inclosed in the letter and this request the plaintiff complied with on the 22d day of April, 1904. There was considerable correspondence between the parties until the twenty-seventh of June, when the defendant wrote to the plaintiff that it had instructed its adjuster in Pittsburg to deal with the matter. The plaintiff thereafter had interviews and correspondence with this adjuster and finally on the 19tli day of December, 1904, the plaintiff wrote to the defendant stating that he had endeavored to adjust his claim with the adjuster, but without success. Sometime in February the adjuster told the plaintiff that the defendant would not entertain any claim'for the loss of the sight of his eye, whereupon the plaintiff wrote to the defendant stating that he would not entertain any other proposition from them except for the loss of his eye. The plaintiff then offered to submit to a single neutral arbitrator in this country, but that offer was declined. Subsequently, and on the 9th day of March, 1905, the plaintiff proposed several persons as arbitrators and stated that if the defendant did not accept his offer he would instruct his attorney in London to take necessary steps to enforce-'his claim. - ■ Finally, on the 9th. day' of June, 1905, .plaintiff’s solicitor in London wrote to the defendant-' stating that the claim had been placed1 in his hands and unless .payment was made without delay proceedings would be taken to ■ recover' £550 without further' notice, Subsequently the plaiih . . tiff submitted to the.defendant tlie names of - several Irish members of Parliament and' others ..as. arbitrators-,■ to which the defendant .refused to agree. Hot having arrived at any-settlement with the defendant, the plaintiff commenced this action to recover under the-policy. " ,

By the English Arbitration-Act of-1889, referred to in the policy, it is provided that the court or a judge may, on application by the party who. gave the notice,, appoint an arbitrator, umpire or third arbitrator, who shall have the like powers to-act in the reference and / . make an award as if he-had been appointed by consent of all. parties. • As both parties to this transaction are citizens of Great. Britain and there domiciled, it is clear that the contract-must be ' construed according to the laws of Great- Britain. Both parties ' called witnesses to testify as -to the law.. An English barrister testified for;.the plaintiff and was asked a hypothetical question setting out the provisions of the. policy-and-in response to which the witness answered that “ under the laws of -Great Britain and' oii the facts stated, condition 8 above quoted, as to-arbitration is a good and valid condition precedent; ” and that on the facts stated the ' plaintiff would be precluded ,from recovering from the insurance company,, unless the insurance company by some overt, act had expressly notified the plaintiff that.it would not proceed to arbitration at all and excused the. plaintiff from making an application :to any court-or judge to appoint an arbitrator. -

The plaintiff' testified ■ to many, interviews "with the defendant’s-adjuster in April oí'May, 1904; that in one of these conversations , he says they conversed about the 7th.clause of the policy and that the defendant’s-adjuster said that it would be absurd to apply that clause; that it would not apply in the plaintiff’s case because, he. believed that the plaintiff would get the sight of his eye again. He further testified that the adjuster, told him that if the defendant agreed to arbitrate it must be done in England arid that subse- ' quently this adjuster told him that the company would not arbitrate at all. It was after this conversation that the plaintiff’s solicitor proposed arbitration and the plaintiff had an interview with the defendant’s representatives in this country in respect to the arbitration.

On behalf of the defendant this adjuster denied ever having stated to the plaintiff that the defendant would not arbitrate or that the defendant waived any condition of the policy. .There is not the slightest evidence to show that this adjuster had any authority to waive any of the conditions of this policy and the matter had only been referred to him to determine whether or not a settlement could be arrived at. The parts of the deposition of the English barrister who had been called on behalf of the plaintiff which had not been read by the plaintiff w'ere read by the defendant. He there testified that upon the facts stated in the hypothetical question the defendant was not liable to the plaintiff because the insurance company having rejected the plaintiff’s claim a difference or dispute did arise respecting the liability of the company and the amount payable to'the insured, which matter in difference ought, in the first instance, to have- been referred to arbitration and an award obtained. The obtaining Of an award was a condition precedent tó a right on the ..part of the plaintiff to maintain an action on the policy for the insurance moneys and that no right of action vested in the plaintiff until after arbitration held and award obtained. And also because the right to recover the capital sum was forfeited and extinguished before action brought, six months having expired since the date of the accident without, within that period, a settlement being arrived at or a reference made to arbitration in terms of condition 8; that plaintiff is precluded from recovering by condition 7, unless he was excused by the act of the insurance company from taking the proper steps to have the dispute referred to arbitration ; that under the laws of Great Britain, the conditions 7 and 8 are valid and enforcible in accordance with their terms; that under the Arbitration Act of 1889 an insured has, under a policy of accident insurance containing ,.a condition as to arbitration in the language of condition 8, the right, and power to cause a matter in difference as between himself and the insurance company to be referred to the arbitration and decision of a neutral person as single arbitrator and to secure an award by such arbitrator of the amount, if any, due from the insurance company, by an application usually made to a judge sitting in chambers tinder, section 5 of the Arbitration Act of 1889, and sections 2 and 3 of the Arbitration (Scotland) Act of 1894, without the co-operatiún or assistance of the insurance company.

An English barrister was called by the defendant as a witness. He testified that the defendant was not liable to the plaintiff in any sum whatever upon the facts stated in the hypothetical question ; that the right to recover the capital sum insured by the policy has been forfeited and extinguished, and the liability of the company has ceased and determined by the expiry of six months from the daté of the accident without a settlement having been agreed on or referred to arbitration in terms of condition 8 that a difference has arisen respecting the liability of the company within the meaning of condition 8, and no award of such arbitrator as mentioned in that condition has been obtained, and the obtaining of such .award is by that provision made a condition precedent to enforcing the liability of the company in respect of a claim made under the policy; that this is a valid condition precedent, and ,on the facts stated it precludes the plaintiff from recovering from the company unless waived by the company. .

I do not think that there is any dispute as to the law's of Great ' Britain applicable to this claim as between these parties. It seems to me clear by the law of England these provisions contained in sections Y and 8 and made a part of the policy are conditions precedent" to the maintaining of any action at law based upon the policy. That condition is. that within six months from the time of the accident there shall be a settlement between the insured and the company as to all claims covered by the policy or a reference of the question to an arbitrator, either by agreement of the parties or by obtaining the appointment of an arbitrator under the Arbitration Act of 1889. It is not such a short statute of limitations as has X been before the courts of this State in many reported cases, but a condition precedent upon which the right to mainiain an action depends. A refusal to arbitrate is not a waiver of this condition of the policy. There was, by the "refusal to agree" upon an arbitrator, presented a situation contemplated by the condition which would justify either party in making an application to the English courts for the appointment of an arbitrator. The distinction between the waiver of the right to appoint an arbitrator and the waiving of the condition' imposed upon the plaintiff by sections 7 and 8 of this policy is quite clear, and certainly these provisions, called by the English barristers conditions precedent, can only be waived by a distinct act on the part" of the defendant, which recognized the existence of the liability irrespective of the performance of the condition ■ precedent. I do not think there is any evidence in this-case which justifies a jury in finding such a waiver. Assuming that the time in which an action,could be brought was waived, there was never at any time a waiver of the right of the defendant to insist that an arbitrator should be appointed and the arbitration had before an action could be maintained, and there is certainly no evidence to justify a finding that the defendant ever waived that condition. I think that there is no evidence to show that this adjuster in this country with whom the plaintiff claims to have had these conversations upon which this waiver is sought to be sustained, had any authority to make such a waiver or that he actually did make such a waiver. It seems to me that the plaintiff failed to establish any cause of action and the complaint should have been dismissed.

I, therefore, think that the judgment should be reversed and a new trial ordered, with costs to the appellant to abide the event.

Laughlin and Scott, JJ., concurred; .Clarke and Houghton, JJ., dissented.

Footnotes

*

See respectively 52 & 53 Viet. chap. 49; 57 & 58 Viet. .chap. 13.— [Rep.