Doe v. State.

RATHMELL, J.

The case is here on error from the police court of this county. The affidavit charged the plaintiff in error with falsely pretending that a certain ring which he was then endeavoring to sell to one E. E. Bulen was worth $27 when in fact it was worth $2.50 and no more.

The affidavit was demurred to in the court below on the ground that it did not charge an offense under the laws of the state, and same was overruled. The demurrer should have been sustained.

"A representation as to value is to be deemed a matter of opinion and therefore though false not a false pretense." McClain, Criminal Law Sec. 670; State v. Paul, 69 Me. 215; State v. Estes, 46 Me. 150.

A representation which amounts merely to an expression of opinion however false and fraudulent is not an indictable false pretense, for it is not a statement of a fact, the essential requisite of a false pretense, but a state of mind.

False representations as to costs or value of property have been held to be mere expressions of opinion. 12 Am. & Eng. Enc. of Law (2 ed.) 812 (n); 7 Am. & Eng. Enc. of Law (1 ed.) 717.

This principle is supported by Commonwealth v. Wood, 142 Mass. 459 [8 N. E. Rep. 432]; People v. Jacobs, 35 Mich. 36, involving the subject-matter of lots and stocks. And is not different as to goods and merchandise. If matter of opinion of value or what articles are worth were indictable, it would subject most any merchant in town to a criminal action. But such is not the law.

The judgment of the court below is reversed and the accused discharged.

INSURANCE.

[Superior Court of Cincinnati, General Term, January, 1906.]

Hosea, Hoffheimer and Littleford, JJ.

(Judge Littleford of Hamilton common pleas sitting in place of Judge Ferris.) FIRE ASSOCIATION OF PHILADELPHIA V. HARRY APPEL, ADMR.

1. STIPULATION IN INSURANCE POLICY BECOMING IMPOSSIBLE FROM UNFORESEEN REASONS, NOT BINDING ON INSURED.

If a stipulation in an insurance policy relating to incidental matters and not connected with the fundamental right of action becomes impossible as a result of causes not anticipated by the parties, the condition is discharged, and performance in that regard cannot be required of the insured.

2. REFUSAL OF INSURER TO APPOINT NEW REFEREE TO TAKE THE PLACE OF ONE REFUSING TO APPRAISE PROPERTY OPERATES AS ABANDONMENT OF STIPULATION FOR ARBITRATION.

Where under a fire insurance policy containing a stipulation for an arbitration in case of a disagreement as to a loss, referees and an umpire 34 Dec. Vol. 16

Superior Court of Cincinnati.

were appointed, and after the appraisal was partially made, the referee of the insurer declined to act further, and the insurer refused to appoint another referee in his place, but insisted upon a new appraisal, such facts will operate as an abandonment on the part of the company of their right to an appraisal under the policy, and no objection, therefore, to the proof of loss as being unaccompanied by an award can be heard. [Syllabus approved by the court.]

ERROR to special term.

J. H. Cabell and J. L. Kohl, for plaintiff in error:

Effect of provision as to arbitration. Phoenix Ins. Co. v. Carnahan, 63 Ohio St. 255 [58 N. E. Rep. 805]; Globe Mut. L. Ins. Co. v. Wolff, 95 U. S. 326 [24 L. Ed. 387]; Bradshaw v. Insurance Co. 137 N. Y. 137 [32 N. E. Rep. 1055]; Westenhaver v. Insurance Co. 113 Iowa 726 [84 N. W. Rep. 717]; Caledonia Ins. Co. v. Traub, 83 Md. 524 [35 Atl. Rep. 13]; Carroll v. Insurance Co. 72 Cal. 297 [13 Pac. Rep. 863]; Vernon Ins. & Tr. Co. v. Maitlen, 158 Ind. 393 [63 N. E. Rep. 755]; Pretzfelder v. Insurance Co. 116 N. C. 491 [21 S. E. Rep. 302]; Morse, Arb. & Award 151; Insurance Co. v. Morton-Scott-Robertson Co. 106 Tenn. 558 [61 S. W. Rep. 787]; Joyce, Insurance Sec. 3240; Broadway Ins. Co. v. Doying, 55 N. J. Law 569 [27 Atl. Rep. 927]; New York (Mayor) v. Butler, 1 Barb. 325; New York Mut. Sav. & L. Assn. v. Assurance Co. 94 App. Div. 104 [87 N. Y. Supp. 1075]; Davenport v. Insurance Co. 10 Daly (N. Y.) 535; Fisher v. Insurance Co. 95 Me. 486 [50 Atl. Rep. 282; 85 Am. St. Rep. 428]; Levine v. Insurance Co. 66 Minn. 138 [68 N. W. Rep. 855].

John R. Sayler, for defendant in error.

HOSEA, J.

This is one of a series of cases upon similar policies brought in the court below against various insurance companies, and by consent tried

as one.

The Fire Association of Philadelphia, plaintiff in error herein, and defendant below, together with the other insurance companies similarly situated, issued their respective policies of insurance to defendant-inerror's decedent, insuring her against loss and damage to her stock of millinery, etc., located in a building occupied by her in Cincinnati, Ohio. All the policies were of the New York standard form.

A fire occurred in said building on September 9, 1901, and the assured and the companies entered into an adjustment of the loss. A difference arose and an appraisement was demanded by the companies under the terms of their policies and an agreement of submission duly entered into, and appraisers were duly selected by insurer and insured.

The appraisers selected an umpire and duly proceeded upon the determination of the sound value and loss under said submission, as provided in the policy; but after determining regularly as to about

Fire Association v. Appel.

half of the stock (in value), the appraiser selected by the companies abandoned his duties and refused to resume, although requested to do so both by the plaintiff's decedent and the companies. There is no direct evidence of bad faith on the part of either appraisers or on the part of either of the companies or the assured, otherwise.

Upon the refusal of the appraiser selected by the insurers to continue to act, notice was given the companies and a request made of the companies to appoint another appraiser in his stead; but they insisted that they were entitled to an award under the original submission with both appraisers named in the same acting, or else to an entirely new appraisement with other appraisers to be selected by the parties. The assured declined to enter into a second submission.

Thereupon the appraiser for the assured and the umpire completed the estimate of the sound value and loss and returned same as an award, finding a sound value of $11,491.97 and a loss of $9,725.08.

Thereupon also the assured served "proofs of loss" on the companies, which were refused as not including a legal "award" by appraisers.

The insured having died, plaintiff, as her duly qualified administrator, brought suit upon the policies. His petition alleged performance of all the conditions of the policy "except such as were waived by this defendant as hereinafter stated," followed by an allegation of the facts above stated, and claiming that the action of the appraiser selected by the companies in refusing to complete the appraisement was by instruction of the companies.

The defendants filed answer admitting the submission, the terms of the policy bearing on the same, the refusal of one of the appraisers to complete the appraisement, and denying generally the other allegations of the petition, and alleging breach of the appraisement clause.

The cases were tried under stipulation on these issues before Hon. Rufus B. Smith (a jury having been waived). Before a decision was rendered, Judge Smith retired from the bench and the cause was submitted to him as referee on the testimony taken before him while on the bench.

The referee reported findings of fact and law, to the latter of which the companies duly excepted, as also to his overruling the motions for a new trial. The report was duly confirmed at special term and judgments entered thereon against the defendants. The defendants filed motions to set aside these judgments and for a new trial, which were overruled and exceptions duly taken.

No exceptions being taken to the findings of fact, the errors alleged as the grounds of these proceedings are in the conclusions of law found by the referee and sustained by the court, as follows:

Superior Court of Cincinnati.

(a) That upon the refusal of the appraiser selected by the companies to complete the appraisal and the refusal of the companies to appoint another in his place to complete it, the companies abandoned their right to an appraisement under the policy.

(b) That the appraisers selected by the assured and the umpire were justified in completing the appraisement without the assistance of the appraiser selected by the companies as was done.

(c) That the companies were not entitled to a "new appraisement" and therefore their objections to the proofs of loss were not well taken.

The legal difficulties created by the failure of the appraiser selected by the insurance companies to complete the work of appraisement are resolvable upon elemental principles, as we think, by bringing into clear view at the outset the fact that the stipulation of the insurance contract herein question is one relating to a mere detail of proof as to the amount to be recovered and does not touch the fundamental right of recovery. Our highest judicial tribunal has declared that the constitutional right to appeal to the courts for a redress of wrongs is "inalienable and cannot be thrown off or bargained away." Balt. & O. Ry. v. Stankard, 56 Ohio St. 224 [46 N. E. Rep. 577; 49 L. R. A. 381; 60 Am. St. Rep. 745]; Myers v. Jenkins, 63 Ohio St. 101, 119 [57 N. E. Rep. 1089; 81 Am. St. Rep. 613].

This principle applies to stipulations of this nature in insurance contracts, which are upheld solely upon the ground that they prescribe only a mode of determining the loss and do not go to the right of action generally. The Excelsior, 123 U. S. 40, 49 [8 Sup. Ct. Rep. 33; 31 L. Ed. 75]; Hamilton v. Insurance Co. 6 O. F. D. 587 [136 U. S. 242, 255; 10 Sup. Ct. Rep. 945; 34 L. Ed. 419]; Phoenix Ins. Co. v. Carnahan, 63 Ohio St. 258, 268 [58 N. E. Rep. 805].

In contracts involving stipulations of performance, it is important, in determining the facts under the rule of substantial performance, to consider whether those things in which the plaintiff may fall short of strict and literal performance are vital and affect fundamental rights, or are incidental matters as to which legal excuse for nonperformance will suffice. If the failure is in respect of mere incidental things, the modern rule of laxity is applicable. Kane v. Stone Co. 39 Ohio St. 1, 11.

Illustrations of this are not wanting in insurance cases. Thus it has been held that where the surrender of a policy is made a condition precedent of obtaining a paid-up policy, the fact that the original policy has been stolen or lost and cannot be surrendered, will not defeat the right of the assured upon compliance with all the other conditions. Wilcox v. Assurance Soc. 173 N. Y. 50 [65 N. E. Rep. 857; 90 Am. St. Rep. 579].

Fire Association v. Appel.

A similar holding as to the right to change a beneficiary, where the former beneficiary refused to deliver up the policy, will be found in Lahey v. Lahey, 174 N. Y. 146 [66 N. E. Rep. 670; 61 L. R. A. 791; 95 Am. St. Rep. 554].

The cases just cited apply to specified conditions of a contract the principle of discharge, by matter in pais, of a contract as an entirety, namely: That where performance is rendered impossible by events not fairly within the purview of the contract and that cannot be assumed to have been within the contemplation of the parties, such event operates as a discharge. Paige, Contracts Sec. 1363; Stewart v. Stone, 127 N. Y. 500 [28 N. E. Rep. 595; 14 L. R. A. 215].

In Wilcox v. Assurance Soc. supra, the contention of the insurance company was: That the insured, though unable to produce the original policy, could have delivered a receipt or release which would "constitute a sufficient surrender of the policy." But the court said:

"The condition does not, in terms, require anything of that kind. What it does require is the surrender of the identical policy, with a proper receipt indorsed thereon. All agree that compliance with this condition became impossible," and the judgment of the lower court was therefore reversed and the cause retained.

This, as will be seen, is tantamount to saying that where a contract stipulation touching incidental matters and not connected with the fundamental right of action, becomes impossible by causes not anticipated by the parties, the condition is discharged, and becomes non est, and the insured is legally excused from performance in that regard.

The facts of the present case, under the contention of the companies that they acted in entire good faith in the selection of their appraiser and should not be bound by his default, seems to make the application of the principle above stated peculiarly appropriate and fitting. The provision for arbitration is one for the benefit of the companies, and was sought to be enforced by them. Appraisers were properly selected; these chose their umpire; and the appraising board duly organized proceeded in due form half way through their work. The stipulation of the policy made no provision for any other appraisement; and, having selected the appraisers in good faith and these having duly organized, the power of the contracting parties in this regard was gone, they were functus officio. The arbitrary withdrawal of an appraiser rendered that appraisement impossible, except by appointment of a new appraiser to act as a substitute. But this, although requested by the insured, was refused by the insurer.

Under some authorities a court would be justified in holding that a submission having been once entered into, it is not in the power of one of the arbitrators to annul or avoid the agreement by deserting his