SOUTHERN HOME INSURANCE COMPANY v. FAULKNER.

[57 Fla. 194, 49 South. 542.]

INSURANCE, LOSS, Necessary for Fixing Amount of by Arbitration.-Covenants in fire insurance policies for appraisal by arbitrators of the amount of the loss are valid and binding upon the parties; and when such policies further provide that the sum for which the insurer is liable shall not become payable until sixty days after an award by such arbitrators has been received by the insurer, when an appraisal has been required, or that no suit upon the policy shall be sustainable until after full compliance by the insured with all of such requirements, then such arbitration and award are conditions precedent to the right of the insured to an action upon such policy, where the insurer has demanded such arbitration and award. (pp. 1099, 1100.)

(Syllabus by the court.)

Cockrell & Cockrell and L. W. Blanton, for the plaintiff in error.

H. J. McCall, for the defendant in error.

195 TAYLOR, J. The defendants in error, as plaintiffs below, sued the plaintiff in error, as defendant below, in the circuit court for Taylor county upon a fire insurance policy, which policy was attached to and made a part of the declaration by apt words.

The defendant company filed two pleas, the first of which was as follows:

"The defendant by its attorney for plea to the declaration styled 'Action on contract, Damages $1000,' says that prior to the institution of said action and after said fire there was a disagreement as to the amount of the loss, the same being a partial loss, the plaintiff was duly informed thereof by the defendant, and the defendant demanded in writing of the plaintiff an appraisal, but the plaintiff did not consent to any appraisal."

Issue was joined on this as well as the other plea filed by the defendant and the trial was had thereon, resulting in a verdict and judgment for the plaintiffs below, to review which judgment the defendant below brings the case here by writ of

error.

At the close of all the evidence at the trial the defendant requested the court to instruct the jury affirmatively 196 to find for the defendant, but this the court refused to do and such ruling is assigned as error.

This ruling was error. The policy sued upon contains the following provisions among others:

"This company shall not be liable beyond the actual cash value of the property at the time any loss or damage occurs, and the loss or damage shall be ascertained or estimated according to such actual cash value with proper deduction for depreciation however caused . . . . said ascertainment or estimate shall be made by the insured and this company, or, if they differ, then by appraisers, as hereinafter provided; and the amount of loss or damage having been thus determined, the sum for which this company is liable pursuant to this policy shall be payable sixty days after due notice, ascertainment, estimate and satisfactory proof of the loss has been received by this company. . . . . In the event of disagreement as to the amount of loss the same shall, as above provided, be ascertained by two competent and disinterested appraisers, the assured and this company each selecting one, and the two so chosen shall first select a competent and disinterested umpire; the appraisers together shall then estimate and appraise the loss, stating separately sound value and damage, and failing to agree, shall submit their differences to the umpire; and the award in writing of any two shall determine the amount of such loss; . . . . the loss shall not become payable until sixty days after the notice, ascertainment, estimate, and satisfactory proof of the loss herein required have been received by this company, including an award by appraisers when appraisal has been required. . . . No suit or action on this policy, for the recovery of any claim, shall be sustainable in any court of law or equity until after full compliance by the insured with all the foregoing requirements."

197 In the case of Hanover Fire Ins. Co. v. Lewis, 28 Fla. 209, 10 South. 297, it was held that these covenants for arbitration or appraisal of the extent of the loss in fire insurance policies were valid and binding on the parties to such contracts.

In Chapman v. Rockford Ins. Co., 89 Wis. 572, 62 N. W. 422, 28 L. R. A. 405, it is held that an appraisal or award on the question of the amount of loss or damage is made a condition precedent to suit upon a policy which provides that the loss shall not become due and payable until sixty days after an award by appraisers, when an appraisal is required. In Elliott v. Royal Exchange Assur. Co., L. R. 2 Ex. 237, it was held that such covenants in policies were covenants to

pay the loss as adjusted in the agreed way, and that in the absence of such adjustment the plaintiff had no cause of action. In Hamilton v. Home Ins. Co. of N. Y., 137 U. S. 370, 11 Sup. Ct. Rep. 133, 34 L. ed. 708, it was held that, if a contract of insurance provides that no action upon it shall be maintained until after an award by arbitrators is made as to the amount due upon it, the award is a condition precedent to a right of action on the contract.

To the same effect are the cases of Tredwen v. Holman, 1 Hurl. & C. (Ex.) 72; Carroll v. Girard Fire Ins. Co., 72 Cal. 297, 13 Pac. 863; Old Saucelito Land & Drydock Co. v. Commercial Union Assur. Co., 66 Cal. 253, 5 Pac. 232; Holmes v. Richet, 56 Cal. 307, 38 Am. Rep. 54; Gauche v. London & Lancashire Ins. Co., 4 Woods, 102, 10 Fed. 347.

Under these and the great weight of authority, both in this country and in England, such arbitration covenants in policies of fire insurance are valid and binding upon the parties; and where such policies, as does the one here, provide that the sum for which the insurer is 198 liable shall not become payable until sixty days after an award by such arbitrators has been received by the insurer, when an appraisal has been required, or that no suit upon the policy shall be sustainable until after full compliance by the insured with all of such requirements, then such arbitration and award are conditions precedent to the right of the insured to an action upon such policy, where the insurer requires such arbitration and award.

It was proven at the trial, without contradiction, that the defendant company made prompt demand upon the plaintiffs that the amount of the loss should be submitted to appraisers in compliance with the terms of the policy, but the plaintiffs declined without any valid reason to submit to such arbitration as demanded. Under these circumstances such arbitration and award as to the amount of the loss was a condition precedent to the right of the plaintiffs to maintain any action upon such policy, and under the circumstances they had no right to any recovery in this suit. The court should have given the instruction as required, peremptorily requiring the jury to find for the defendant.

The judgment of the circuit court in said cause is hereby reversed at the cost of the defendants in error.

Hocker and Parkhill, JJ., concur.

Whitfield, C. J., and Shackleford and Cockrell, JJ., concur in the opinion.

Arbitration may, Perhaps, be Made a Condition Precedent to a right of action on a policy of insurance, although stipulations to that effect have been declared unenforceable as tending to oust the courts of jurisdiction: Hartford Fire Ins. Co. v. Hon, 66 Neb. 555, 103 Am. St. Rep. 725; Fisher v. Merchants' Ins. Co., 95 Me. 486, 85 Am. St. Rep. 428. But if a stipulation for arbitration is regarded as valid, still the insurance company may, by bad faith, lose its right to rely on it: Western Assur. Co. v. Hall, 120 Ala. 547, 74 Am. St. Rep. 48; Stephens v. Union Assur. Soc., 16 Utah, 22, 67 Am. St. Rep. 595; Brock v. Dwelling-house Ins. Co., 102 Mich. 583, 47 Am. St. Rep. 562; Christianson v. Norwich Union Fire Ins. Co., 84 Minn. 526, 87 Am. St. Rep. 379. And the insurer, once having waived the right to demand arbitration, cannot thereafter insist on an arbitration: Continental Ins. Co. v. Vallandingham, 116 Ky. 287, 105 Am. St. Rep. 218; Providence-Washington Ins. Co. v. Wolf, 168 Ind. 690, 120 Am. St. Rep. 395.

J. I. KELLEY COMPANY v. POLLOCK & BERNHEIMER. [57 Fla. 459, 49 South. 934.]

FRAUDULENT CONVEYANCES-Intent, When Presumed.— When the legal effect of a conveyance is to hinder or delay creditors, the intent will be presumed regardless of the actual motives of the parties. (p. 1104.)

CORPORATIONS, Transfer from Old to New, When Fraudulent. When a new corporation is organized which takes a conveyance from an existing corporation of all its corporate property, and the only consideration paid therefor was the issuance of shares of capital stock in such new corporation to the individual stockholders and directors of such old corporation, and an agreement to assume certain mortgage indebtedness of such old corporation, a bill filed by creditors of such old corporation against the new corporation, containing such allegations, coupled with the further allegation that the value of the property of such old corporation so conveyed "amounted to considerably more than the mortgage indebtedness so assumed," which seeks to subject such property so conveyed to sale for the payment of the judgment indebtedness of such old corporation, is not demurrable for lack of equity. (pp. 1104, 1105.)

APPEAL AND ERROR-Conflicting Evidence.-Where a final decree has been rendered in a cause, the correctness of which is questioned by an assignment of error on the ground that it is not supported by the evidence, an appellate court will refuse to disturb it simply because the evidence is conflicting. (p. 1105.)

(Syllabi by the court.)

W. W. Flournoy, for the appellant.

Daniel Campbell & Son, for the appellees.

460 SHACKLEFORD, J. This is a suit in chancery instituted by the appellees against the appellant, which resulted in a final decree in favor of the appellees, from which the appellant has entered its appeal to the present term of this

court. Very briefly stated, the appellees in their amended bill allege that each one of the complainants is a judgment creditor of the Jernigan Lumber Company, a corporation, the respective amounts and dates of 461 such judgments being set forth; that executions had issued thereon and been returned nulla bona, and that such judgments still remain unsatisfied; that on the day of July, 1905, the Jernigan Lumber Company, being the debtor of complainants, proceeded by certain written conveyances to transfer and convey to the appellant, which purported to be a corporation but which had no corporate existence at that time, all of the property owned by such Jernigan Lumber Company, a detailed description of which is set forth; that the complainants are advised and believe, and so charge, that the appellant was not incorporated until the twelfth day of August, 1905, on which day letters patent issued to it; that the majority of the shares of stock in such appellant corporation was subscribed for by individual stockholders and directors of the Jernigan Lumber Company, who are named, such shares having been paid for by the conveyance of property of such corporation to the appellant; that the only consideration paid by the appellant for the transfer and conveyance to it of all of the property of the Jernigan Lumber Company was the issuance of shares of stock in such appellant corporation to the individual stockholders and, directors of the Jernigan Lumber Company; that at the time of the conveyance to the appellant of the property of the Jernigan Lumber Company it was the understanding that the appellant would pay certain mortgage indebtedness of such Jernigan Lumber Company, but that no provision was made for the payment of the indebtedness due to the complainants, although the complainants are advised and believe, and so charge, that it was the understanding of the remaining stockholders of the Jernigan Lumber Company, "and not only was it the understanding, but that it was the agreement, that all the indebtedness of the Jernigan Lumber Company, including the indebtedness of your complainants, would be paid by" 462 the appellant; that the indebtedness due to each of the complainants was then in existence, and some of the complainants had reduced their claims to judg ment; that the value of the property owned by the Jernigan Lumber Company and so conveyed by it to the appellant amounted to considerably more than the mortgaged indebtedness assumed by the appellant; that the appellant "was not an innocent purchaser without notice of the indebtedness of