The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1899-07-31
Judge Hazen EnjOins the Super
intendent of Insurance.
Follows Decision Of the United
States Federal Judges.
jill. RICHARDS CLAIM.
Question of Total Loss One For
the Courts.
Arbitration Clause Furnishes
Basis For Decision.

Judge Hazen today granted tempor-
airy injunctions restraining Superin-
tendent of Insurance Church from re-
VOking the Kansas licenses of the in
surance companies in which Colonel J.
H. Richards of Fort Scott had his house
insured at the time it was burned last
winter. The companies making appl-
cations for the injunctions were the
British North American Assurances
company of Toronto, the Manchester
Fire of Manchester, England, and the
Western Assurance company.
The controversy in the case was over
an arbitration clause in the policies held
by Colonel Richards, which stated that
any differences in adjusting losses un-
der the policies should be left to arbi-
traitors. Colonel Richards claimed that
he had suffered a total loss and claimed
the full amount of his policies under the
valued policy law of Kansas. The COM
panies claimed differently and said they
would not pay the fact value of the pol
icieS unless the differences should first
be submitted to arbitrators or a judg--
ment should be rendered against them
in court.
Colonel Richards submitted the con-
troversy to Superintendent of Insurance
Church, stating that he was afraid to
bring suit against the companies be-
cause they would take the action to the
federal courts and he would lose bene-
III OI the AdluEQ pOlACy law he aA5O
stated that the Kansas courts had held
the arbitration clause in insurance poll
cies void.
Superintendent Church insisted on a
settlement being made, and intimated
that he would take action against the
companies if they attempted to eVade
the valued policy law, as he claimed
they would be doing by taking the
cases before the federal court. To keep
him from revoking their licenses to do
business in Kansas the companies made
junction to keep him from taking such
action.
In granting the temporary injunction
today Judge Hazen said:
Under the law of 1889 it is plainly the
intention OF the legislature to place the
superintendent of insurance under the
control of the courts. Judge Williams
has heId Ihat the per1ntendent IS sub
ject to the federal court and Judge Eos
ter held the same way. In the case Of
ClarksOn against MCNau, in which eX-
tensive arguments were made on this
subject before this court. the same de-
cisiOn was made, and there has been
nothing presented in this case to change
the courts mind.
There is some question as to whether
the superintendent intended to revoke
the licenses of the companies. When
he was asked on the witness stand his
answer was doubtful. But he is bound
by the claims of his attorneys and they
contend that he has a right to act
finally on questions involving the insur-
anCG laws ana LnaL ne laQ a right 10
revoke the licenses in this instance.
Judging from his letters concerning this
loss it would seem that he. also. claims
the right to allow companies to enter
the state, and to exclude them again
when he thinks they are not complying
with the law.
In this case the question involves
the arbitration clause in these policies
The companies claim that there was no
total loss; the insured claims that there
was. This is a question for the courts
and not for the superintendent of in
Surance to pass on The courts would
protect the interests of the insured. 1t
is claimed that the arbitration clause
would destroy the benefit of the valued
policy law to the insured. The courts
allow men to make their own contracts.
and if the contracts are not contrary
to public policy. or fraudulent in their
nature, it is the duty Of the courts to
enforce them.
1T is claimed that the arbitration
clause would be enforced in the federal
courts, but not in the state courtsl and
that the insured therefore ought to be
allowed to remain in the state courts
Anyone has right to remove his con-
trOversy to the federal courts if IL
comes within the rules laid down by
those courts, and any attempt of the
superintendent to revoke the license OF
these companies for taking advantage
of that right would not be warranted.
THE superintendent denies that he is
attempting to assist the insured in col
lecting this claim, but he is denying the
right of the companies to utigate the
claims. and the result is the same. He
could revoke their licenses and fnitIre
their business before they could get
back into the state by mandamus or
otherwise. According to his ruling the
companies would either have to agree
not to exercise their right to litigate
their case in the federal courts, or else
leave the state"
In granting the injunction Judge Ha-
zen required the plaintiffs to furnish a
bond of $500 in each of the three cases.
Want the Scholarship.