Hardware Dealers Mut. Fire Ins. Co. v. Glidden Co., 284 U.S. 151 (1931)
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Hardware Dealers Mutual Fire Insurance Co. v. Glidden Co.
No. 4
Argued October 16, 1931
Decided November 23, 1931
284 U.S. 151
APPEAL FROM THE SUPREME COURT OF MINNESOTA
Syllabus
Minnesota, by statute, requires all fire insurance companies licensed for business in the State to use a prescribed form of standard policy in which are provisions for determining by arbitration the amount of any loss (except total loss on buildings) when the parties fail to agree upon it. Where one party declines to select an appraiser, the other party may secure, upon due notice, a judicial appointment of an "umpire" to act with the appraiser selected by himself. The decision of this board, if not grossly excessive or inadequate, or procured by fraud, is conclusive as to the amount of the loss in an action on the award, but does not determine the judicial question of liability under the policy.
Held:
1. That the enforcement of such an award against an insurance company, which had declined to join in the arbitration, does not violate its rights under the due process and equal protection clauses of the Fourteenth Amendment, although it be assumed that the company’s action in issuing the statutory policy, with the arbitration provisions, was not voluntary, and that it was not estopped by long acquiescence in the statute. P. 157.
2. Legislation otherwise within the scope of acknowledged state power, not unreasonably or arbitrarily exercised, cannot be condemned because it curtails the power of the individual to contract. P. 157.
3. The procedure by which rights may be enforced and wrongs remedied is peculiarly a subject of state regulation and control. In the exercise of that power and to satisfy a public need, a state may choose the remedy best adapted, in the legislative judgment, to protect the interests concerned, provided its choice be not unreasonable or arbitrary and the procedure it adopts satisfy the constitutional requirements of reasonable notice and opportunity to be heard. P. 158.
4. A statute dealing with a subject within the scope of legislative power is presumed to be constitutional. Id.
5. The Court notices judicially that an arbitration clause has long been voluntarily inserted by insurers in fire policies; that the amount of loss is a fruitful, and often the only, subject of controversy between insured and insurer; that speedy determination of the policy liability such as may be secured by arbitration of this issue is a matter of wide concern; that, in the appraisal of the loss by arbitration, expert knowledge and prompt inspection of the damaged property may be availed of to an extent not ordinarily possible in the course of the more deliberate processes of a judicial proceeding. P. 159.
181 Minn. 518, 233 N.W. 310, affirmed.
Appeal from a judgment sustaining a recovery from an insurance company in an action on an award fixing the amount of a loss by fire.