Statement of the Case.

and avers that neither at the time of issuing said policy or since, up to the commencing of this action, did it have, nor has it had any notice or knowledge of any of the terms, conditions, covenants or agreements contained in the mortgage set out and referred to," etc.

It is further averred that it was provided by the terms of said policy of insurance, "that in event of disagreement as to the amount of loss, the same shall as therein provided, be ascertained by two competent and disinterested appraisers, the insured and this company each selecting one, and the two so chosen shall first select a competent and disinterested umpire; and the appraisers together shall then estimate and appraise the loss stating separately sound value and damage, and failing to agree shall submit their difference to the umpire, and the award in writing of any two shall determine the amount of such loss." It is next averred, "that said Bridget Cullen named in said policy of insurance and this defendant company differed as to the amount of loss and damage on the building therein and thereby insured, and that pursuant to the terms of said policy of insurance, on the 3d day of May, 1904, said Bridget Cullen and this defendant, together with The Columbia Insurance Company of Dayton, a concurrent insurer of said property, entered into an agreement in writing for submission to appraisers to determine the loss and damage to said building, and selected as such appraisers A. E. Woodbury and Joseph Skeel, who, on the 11th day of May, 1904, were duly sworn so to act with strict impartiality in making an appraisement and estimate of the

Statement of the Case.

sound value and the loss and damage to said property, and to make a just and conscientious award of the same according to the best of their skill and judgment, and said appraisers thereupon first selected and appointed one John Hazleton to act as umpire to settle matters of dispute that might exist between them, and thereafter on the same day having carefully examined the premises and remains of said property in accordance with the terms and conditions of said policy of insurance determined the sound value thereof to be four thousand dollars and the loss and damage thereon to be $1,202.05, and reduced their said. determination and award to writing and duly signed and executed the same."

It is next averred, in substance, that this company should not be liable for a greater per cent. of any loss or damage than the amount insured in said policy should bear to the whole insurance whether valid or not, and that at the time of the loss the whole insurance covering said property amounted to $3,500, and that the amount of insurance in said policy issued by defendant is one-half of total amount of insurance, and this defendant is liable under said award for the sum of $601.03 and no more on said policy.

Afterwards, on October 28, 1905, The Erie Brewing Company demurred to the second defense above set out on the ground that it does not state facts sufficient to constitute a defense to the answer and cross-petition of The Erie Brewing Company.

The court of common pleas sustained the demurrer and no further amendment was made or

Statement of the Case.

requested. On the issues thus left, the cause came on for trial to a jury.

It was agreed to by the parties in open court in the presence of the jury that The Erie Brewing Company was the owner of the mortgage set up in its answer and cross-petition, and that "the agreement for submission to appraisers dated May 3, 1904, between Bridget Cullen and The Columbia Insurance Company, and The Ohio Farmers Insurance Company shall be conceded to have been executed by the parties to said agreement, and that the award on said agreement made on the 11th of May, 1904, was signed by the appraisers and sworn to by them at the time indicated in said award."

The case proceeded on hearing of evidence to prove the loss for the one-half of which The Ohio Farmers Insurance Company would be liable. The jury found a verdict for The Erie Brewing Company against the said insurance company in the sum of $1,049.41. Motion for new trial overruled and judgment rendered on the verdict.

The said insurance company prosecuted error in the circuit court to obtain a reversal of the judgment, and the record shows the judgment of the circuit court to be that "the court of common pleas erred in sustaining the demurrer of the said defendant The Erie Brewing Company to the second defense of the amended answer of the said Ohio Farmers Insurance Company to the answer and cross-petition of the said The Erie Brewing Company, the said cross-petition not being sufficient in law, and not stating a cause of action in that it contains no averment that any demand or request

Argument for Plaintiffs in Error.

had been made by The Erie Brewing Company for an appraisal of the loss. And no averment of any excuse for not making such demand or request." The circuit court reversed the judgment of the court of common pleas, and the case is here on petition in error filed by The Erie Brewing Company.

Mr. Allen M. Cox, for plaintiffs in error.

We have this anomalous condition; an appraisement had been made between the insurance company and Bridget Cullen; the brewing company was not a party to it, yet the circuit court says, that although there was an appraisement between the insured and the insurance company, The Erie Brewing Company was also bound to demand and ask for an appraisal before suit could be maintained.

Unless there was a provision for more than one appraisal, the company was entitled to but one appraisal and award. Fire Association v. Appel, Admr., 76 Ohio St., 1.

Because the insurance company did not make the brewing company a party, it was not bound by the appraisal. Bergman et al. v. Assurance Co., 15 L. R. A., 270.

This case is not exactly similar to the one at bar. It seems that the simple endorsement upon the policy was, "Loss, if any, payable to the mortgagee," and the policies were delivered to the mortgagees, and the court holds that an arbitration and award was not binding without the notice and consent of the mortgagee.

Argument for Plaintiffs in Error.

In the case at bar, the policy provided, "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 insured and this company each selecting one."

So that, under the terms of our policy, there was but one way to proceed, that is, the insured, Bridget Cullen, to select one appraiser, and the insurance company the other, then if they sought to have the mortgagee bound by the appraisal, it should have been made a party by notice of the time and place, and attendance requested. This was not done. Hardy et al. v. Insurance Co. (Mass.), 33 L. R. A. 241.

Where insurance is obtained by the owner and a mortgagor, and in addition to making the loss payable to mortgagee, there is inserted or added what is called the mortgagee clause, it operates as a distinct, separate and independent insurance contract, as between the mortgagee and the company, in protection of the mortgagee's interest. Not necessarily and wholly independent insurance of that interest, yet separate and distinct in protection of it. Fire Insurance as a Valid Contract, Clement, rule 2, page 32.

An owner of the property and the company cannot, without the concurrence of the mortgagee to whom the loss was made payable as interest may appear, effect a settlement or accord and satisfaction without the assent of the latter. Clement's Fire Insurance as a Valid Contract, rule 11, page 38; Hathaway v. Insurance Co., 134 N. Y., 409, 32 N. E. Rep., 40, 22 Ins. L. J., 358; Harrington v. Insurance Co., 124 Mass., 126; Hall v.