St. Paul Fire & Marine Ins. Co. v. Tire Clearing House

• Decision Date: 22 April 1932
• Docket Number: 9312,No. 9313,9311.,9313
• Citation: 58 F.2d 610
• Parties: ST. PAUL FIRE & MARINE INS. CO. OF ST. PAUL, MINN., v. TIRE CLEARING HOUSE, Inc. LONDON & LANCASHIRE INS. CO., LIMITED, OF LONDON, v. SAME. NATIONAL RESERVE INS. CO. OF ILLINOIS v. SAME.
• Court: U.S. Court of Appeals — Eighth Circuit

58 F.2d 610 (1932)

ST. PAUL FIRE & MARINE INS. CO. OF ST. PAUL, MINN., v. TIRE CLEARING HOUSE, Inc.

LONDON & LANCASHIRE INS. CO., LIMITED, OF LONDON, v. SAME.

NATIONAL RESERVE INS. CO. OF ILLINOIS v. SAME.

Nos. 9313, 9312, 9311.

Circuit Court of Appeals, Eighth Circuit.

April 22, 1932.

William R. Gilbert, of St. Louis, Mo., (Anderson, Gilbert & Wolfort, of St. Louis, Mo., on the brief), for appellant St. Paul Fire & Marine Ins. Co., of St. Paul, Minn.

J. H. Cunningham, of St. Louis, Mo. (George C. Willson and Taylor, Chasnoff & Willson, all of St. Louis, Mo., on the brief), for appellants London & Lancashire Ins. Co., Limited, of London and National Reserve Ins. Co., of Illinois.

P. H. Cullen, of St. Louis, Mo. (Abbott, Fauntleroy, Cullen & Edwards, of St. Louis, Mo., on the brief), for appellee.

Before STONE and BOOTH, Circuit Judges, and WYMAN, District Judge.

BOOTH, Circuit Judge.

There are here three appeals. The printed record in one (No. 9313) is presented; and by stipulation it is agreed that the other two appeals shall be argued upon the same record, and that the decision in No. 9313 shall be binding in all the appeals.

Appellee, plaintiff below, brought separate suits in the Hannibal court of common pleas, Marion county, Mo., against each of the appellants on fire insurance policies issued by them respectively, covering property of plaintiff; under which policies plaintiff claimed liability of defendants had arisen by reason of a fire which had destroyed or damaged part of the insured property. The cases were duly removed to the United States District Court for the Northern Division of the Eastern District of Missouri; and were subsequently removed to the Eastern Division of the Eastern District.

In the case against the St. Paul Fire & Marine Insurance Company, which we shall now follow, the amount demanded was $4,500 on stock of merchandise, and $250 on fixtures; those being the coverage amounts of the policy.

The answer admitted the issuance of the policy; admitted the occurrence of the fire; admitted that the loss on store and office furniture and fixtures was $250; and alleged that as to the loss on the stock of merchandise, an appraisal had been had and that the loss and damage to the stock of merchandise had been found to be $6,724.02, and that the pro rata share of the appellant under its policy was $1,359.93 on account of loss to stock, making a total of $1,609.93, for which appellant was liable; and alleged that the amount had been tendered to the appellee, but had been declined, and alleged that that amount was due and appellant was willing to pay said amount.

Plaintiff, in its reply, attacked the validity of the appraisal and award on various grounds.

Defendant in response to the attack made upon the award, denied generally the allegations set forth by plaintiff, and alleged certain affirmative matter. The issue thus raised was transferred to the equity side of the court for hearing preliminary to a trial on the merits before the jury.

On this equitable issue the court made findings of fact and conclusions of law, which are set out in the margin;¹ and by its decree declared the award a nullity and set the same aside.

Thereafter the right of the plaintiff to recover on the cause of action set out in its complaint was tried to a jury. Verdict and judgment followed for plaintiff.

The appeal was taken both from the judgment and from the decree setting aside the appraisal award.

The assignments of error and the argument in this court relate only to the decree setting aside the appraisal award. By one or more of the assignments of error relied upon, appellants challenge the findings of fact and conclusions of law made by the court as not being in conformity with Rule 70½ of the New Equity Rules promulgated by the Supreme Court of the United States (28 USCA § 723).

We have examined the findings and conclusions in the light of the challenge, and are of the opinion that they are in substantial conformity with the rule mentioned, and are sufficient to enable this court to properly exercise its appellate jurisdiction. This, we think, is all that the rule requires. Parker v. St. Sure (C. C. A.) 53 F.(2d) 706; see Panama Mail S. S. Co. v. Vargas, 281 U. S. 670, 50 S. Ct. 448, 74 L. Ed. 1105.

It may be noted in passing that no request was made by defendants in the court below for specific findings or for modification of the findings made.

The record discloses that the parties having failed to agree upon the amount of the loss and damage, entered into an agreement for an appraisal award.

The appraisers and an umpire were accordingly chosen, and entered upon their duties. The damaged property, consisting mainly of automobile tires, tubes, and accessories, was divided into twenty-five lots.

The agreement for appraisers, contained provisions relating to the making of the appraisement substantially as follows:

"* * * shall appraise and estimate, by items and in detail, the sound value of, and the loss and damage to the property destroyed or damaged by the fire of February 23rd, 1929, as specified below. * * *

"It is further expressly understood and agreed that in determining the sound value and the loss and damage upon the property, hereinbefore mentioned, the said appraisers are to make an estimate of the actual cash cost of replacing or repairing the same, or the actual cash value thereof, at and immediately preceding the time of the loss; and in case of depreciation of the property from use, age, condition, location or otherwise, a proper deduction shall be made therefor and shown in the award."

The policy provisions relating to appraisal contained the following: "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."

It is apparent that the provisions of the appraisal agreement and of the policy are not in all respects harmonious. The two appraisers disagreed, almost from the start, both as to method and as to figures. After reaching conclusions, tentative at least, with the aid of the umpire, as to three or four of the parcels, Flynn, one of the appraisers, refused to proceed further, and left the place. Strubel, the other appraiser, and the umpire, Bowcott, completed the appraisal and signed an award. The award was as follows: "To the Parties in Interests

"We have carefully examined the premises and remains of the property hereinbefore specified, in accordance with the foregoing appointment, and have determined the sound value and loss and damage to be as follows:

Sound Value Loss and 1st Item Stock Tires Damage Tubes &amp Accessories 21731.60 6724.12 2nd Item 3rd Item 4th Item 5th Item 6th Item Total Sound Value and Total Loss and Damage "Witness our hands this ---- day of ----. "A. W. Strubel,| Appraisers &gt "W. L. Bowcott,| Umpire"

It is clear that the award does not comply with the agreement for appraisal. This, of itself, may constitute ground for setting aside the award. Thatcher Implement, etc., Co. v. Brubaker, 193 Mo. App. 627, 187 S. W. 117; Security Printing Co. v. Westchester Fire Ins. Co., 204 Mo. App. 390, 221 S. W. 430; Security Printing Co. v. Conn. Fire Ins. Co., 209 Mo. App. 422, 240 S. W. 263; Mound City, etc., Co. v. Springfield, etc., Co., 218 Mo. App. 395, 277 S. W. 349; Security Printing Co. v. Hartford Fire Ins. Co. (Mo. App.) 245 S. W. 1089; St. P. Fire & Marine Ins. Co. v. Eldracher, 33 F.(2d) 675 (C. C. A. 8); Continental Ins. Co. v. Garrett (C. C. A.) 125 F. 589.

The findings of fact disclose various grounds as a basis for setting aside the appraisal award. We do not find it necessary to discuss them in detail. Fraud, misconduct, carelessness, or partiality on the part of one or more of the appraisers, which results in and is evidenced by an award grossly below the actual loss sustained, will generally justify the setting aside of the award. 5 C. J. 191, § 485; 4 Cooley's Briefs on Insurance, p. 3642; Burchell v. Marsh, 17 How. 344, 351, 15 L. Ed. 96; Levin v. N. W. Nat. Ins. Co. (C. C.) 185 F. 981; Non-Royalty Shoe Co. v. Phoenix Assurance Co., 277 Mo. 399, 210 S. W. 37; Harrington v. Agricultural Ins. Co., 179 Minn. 510, 229 N. W. 792, 68 A. L. R. 1340; Robertson v. Boston Ins. Co. (Minn.) 239 N. W. 147; Baldinger v. Camden Fire Ins. Assn., 121 Minn. 160, 141 N. W. 104; Huested v. Patrons' etc., Co., 223 Mich. 213, 193 N. W. 815; Bradshaw v. Agricultural Ins. Co., 137 N. Y. 137, 32 N. W. 1055; Doherty v. Phoenix Ins. Co., 224 Mass. 310, 318, 112 N. E. 940; Royal Ins. Co. v. Parlin, etc., Co., 12 Tex. Civ. App. 572, 34 S. W. 401, 403; Pennsylvania, etc., Co. v. W. T. Waggoner Estate (Tex. Com. App.) 39 S.W.(2d) 593, 595.

In Corpus Juris, supra, the rule is thus stated: "The mere fact that an award is different in amount from what the court would have given will not of itself necessitate setting it aside. But, where the amount is so palpably excessive or inadequate as to produce a conviction that the arbitrators must have been biased or corrupt, the award will be set aside. And it has been held that where the damages awarded are not so excessive as of themselves to show fraud or error, but are extraordinary in amount, this may, in connection with other circumstances tending to show improper conduct on the part of the arbitrators, be sufficient to set aside the award."

In the case of Non-Royalty Shoe Co. v. Phoenix Assurance Co., supra, the court said (page 415 of 277 Mo., 210 S. W. 37): "A difference of a few thousand dollars in a total of an alleged loss of approximately thirty-five thousand dollars might be expected, but a difference of more than twenty-five thousand dollars in the respective figures is seemingly incompatible with impartiality and argues inferentially in favor of carelessness, circumvention or ignorance. We do...