The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1926-07-17
0LSNESS GETS
AN OPINION ON
POLICY CLAUSE
Boards Of Arbitration do Not
Supcrscdc Courts, Says
Attorney General

Boards Of arbitration appointed to
adjust disputed claims against fire
insurance companies do not supcrsede
tho courts in jurisdiction and awards
made BIZ such boards are binding on
the parties to the amount OF the
loss only, according to an opinion by
the attorney generals office to Com
miss ioncr Of Insurance 5, A. Olsncss.
Olsncss asked legal advice TO guide
him in case now pending IN his
office and added that, since the
question was one likely to rccur
often, il would he valuable anyhow.
Replying to Olsncss' letter asking
for an opinion. the attorney generals
office said:
"With your letter Of July 18th you
submit fire insurance policy issued
by foreign insurance company
licensed TO do business in this state.
A loss has occurred and. owing to n
disagreement between the company
and tho insured, an appraisal ap
pears TO have been made. You call
our attention to the following pro-
visions Of the policy with respect
to the asccrtalnment or estimate Of
the loss or damage sustained by the
insured:
The Provision Questioned
"'Said ascertainmcnt 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 pur
snant TO this policy shall be payable
90 days after due notice, ascertain
mcnt, estimate, and satisfactory proof
Of the loss have been received by
this company in accordance with the
terms Of this policy. Policy. lines
z, ) and Az
'Thc policy further provides that:
"'ln the event Of disagreement as
to tho amount Of loss the same shall,
as above provided. be ascertaincd by
two competent and disintercsted APP
praisers, the insured and this COM
pany each selecting one, and the two
30 chosen shall first select a com
pctcnt and disintcrested umpire; the
appraisers together shall then csti-
mate and appraisc 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 parties thereto shall pay
the appraiser respectively selected by
them and shall bear equally the ex-
penscs Of appraisal and umpire
Olsncss' Question
"YOur specific question is whether
or not in view Of the foregoing pro-
visions "A request for appraisal and
the appraisal are binding upon the
parties rs to the amount Of the loss
I'm considering this question We
wish to call attention to the fol
lowing provision found in the policy
mo suit or action on this policy
for the recovery Of any claim, shall
be sustainablc in any court Of law
Or equity until after full complianc.
BY the insured with all the foregoing
requirements.
"Thc provisions Of the policy with
reference to the appraisal and award
must therefore be complied with, as
condition precedent to the institu-
ton Of an action on the policy.
THE award is limited in its effect
Z to the determination Of the amount
of the loss, but does not fix the
liability Of the company. The award
~ DinulnK on the parties when made
in accordance with the agreement OF
submission. However, the award il
open to attack by appropriate lega
proceedings upon the ground Of fraud
or misconduct Of the appraisers, fol
the fact that an award has been made
does not GUST the courts Of their
jurisdiction. Answering your specific
question, We would therefore say
that the appraisal and award, if made
IN accordance with the provisions OF
the policy. is binding upon the partie.
to the amount Of the loss only
whether or not tho award has beer
SO made in conformity with tho pro
visions Of the policy Is a matter that
the aggrievcd party has right Il
have adjudicatcd in the courts. Ts
that extent the award made by IN,
appraisers is not conclusive