Am. Cent. Ins. Co. v. Landau

• Decision Date: 01 July 1901
• Citation: 62 N.J.E. 73,49 A. 738
• Parties: AMERICAN CENT. INS. CO. et al. v. LANDAU.
• Court: New Jersey Court of Chancery

49 A. 738

62 N.J.E. 73

AMERICAN CENT. INS. CO. et al.

v. LANDAU.

Court of Chancery of New Jersey.

July 1, 1901.

Action by the American Central Insurance Company and others against Gerjardt W. I. Landau to enforce an award of appraisers and enjoin several actions at law to recover notwithstanding the award. Decree for complainants.

The object of this suit, on complainants' part, is to enforce a finding in the nature of an award by appraisers ascertaining the damage by fire to certain machinery, the property of the defendant. A statement of the bill, so far as it is necessary at present to be set forth, will be found in 56 N. J. Eq. 513, 39 Atl. 400, where it was brought before the court on a demurrer by the defendant. The original bill was filed April 22, 1896, and an order to show cause was made why an injunction should not issue, with interim restraint. No proceedings seem to have been had under that order, and it appears to have been acquiesced in by the defendant. Subsequently, on July 31, 1896, the complainants filed an amended bill, to which the defendant filed a demurrer on December 24, 1896, which was overruled by an order made in April, 1899. The defendant, on April 12, 1899, filed a combined answer and cross bill, and the complainants filed an answer and replication thereto. The defendant Joined issue on these, and the cause was brought to hearing on proofs which occupied 14 days in their production. The answer admits all the material allegations of the bill, with a few exceptions, which may be stated as follows: It denies that part of the allegations and conclusions of the bill which sets forth what has been called an "overlapping among the policies," and which was so treated in the previous opinion. It denies that there is any difficulty in adjusting the proportion of loss of each of the complainants in an action at law against each of them separately. It also denies the other complications and difficulties set forth in the bill as a reason why the cause should not be submitted to a jury. With regard to the ascertainment of damages by the appraisers, the answer admits that Frank Atherton, one of the appraisers, was nominated by the defendant, and that Edward S. Winchester, the other appraiser, was nominated by the complainants; but it denies that Winchester was a competent or disinterested appraiser, and alleges that the defendant was induced to sign the appraisal agreement through false representations as to the competency and disinterested character of Winchester. It admits the selection by the appraisers of Manning as the umpire, but denies that Manning was a competent and disinterested umpire, and avers that Atherton, the defendant's appraiser, was induced to acquiesce in the selection of Manning by false representations made to him by Winchester as to the competency and disinterestedness of Manning; and it denies that the appraisers ever entered upon their duties, or that in the course of such appraisement they subsequently agreed or disagreed as to the sound value and damage of each and every item of the property insured, or as to any item of such property. It denies that their differences were submitted to Manning, the umpire, and that Manning determined the differences; and denies that the loss under the policies was ever estimated or appraised, and, while admitting that Winchester and Manning signed the award, it avers that the award was invalid, and of no effect; alleges the fact to be that the agreement of appraisal was never more than an executory contract; that Atherton, the defendant's appraiser, became satisfied, when he commenced his work with Winchester, that Winchester was not a trustworthy or competent man; that Atherton was a trustworthy and competent man, and that he satisfied himself, before the work of appraisal had made any substantial progress, that Winchester did not know anything with regard to the class of property destroyed by the fire, and was entirely incompetent to appraise the loss, and was prejudiced in favor of the insurance companies, and that Manning was equally incompetent and prejudiced; "that Atherton then declared to this defendant that he would not go on with the appraisement in company with the said Winchester; that immediately thereafter the said Frank Atherton wrote a letter to this defendant, withdrawing from his position as such appraiser; that thereupon this defendant was entirely unrepresented in the appraisement; that this defendant thereupon endeavored to get the said Atherton to continue his work as such appraiser, but he refused to do so; that this defendant thereupon objected to the appraiser appointed by the insurance companies and the umpire continuing the work of appraisement, and withdrew from the agreement to submit to appraisement," and informed Winchester and Manning that he had so withdrawn, and that he would not be bound by anything further done by the said Winchester and Manning, and that he wished the proceedings to cease till such time as he could be represented in the appraisement; and that all this was done before any substantial progress was made with the appraisement, and defendant thereby withdrew his consent to have the appraisement continued, and by the voluntary withdrawal of Atherton from the position of appraiser the defendant was deprived of the weight of Atherton's influence on Winchester and also upon Manning; and alleges that the supposed appraisement was an arbitrary act on the part of Winchester and Manning, and beyond the scope of the submission or agreement to appraise; and he sets up that he has always been willing to have a proper appraisement made of the loss under the provisions of the respective policies of insurance, and has at various times offered to the complainants to proceed under the appraisal clause contained in the policies, but the complainants refused to undertake said appraisement as provided for by the terms of the policies; and he submits that any action taken by one appraiser and the umpire after defendant's appraiser had refused longer to act, while the defendant was unrepresented in such appraisement, and after the defendant had given notice of the existing state of affairs to the complainants, should not bind the defendant or prejudice his rights; and alleges as a matter of fact that neither Winchester nor Manning was a competent or trustworthy man, and offers to prove it. The cross bill prays that for the reasons set forth in the answer just recited, and also for the further reason charged in the cross bill that the appraisal made by Winchester and Manning was grossly inadequate, and, in connection with their incompetency and lack of impartiality, showed fraud on their part in making the appraisal, the agreement for appraisal may be rescinded, and declared null and void, both at law and in equity, and of no binding force whatever, and that the same be delivered up to be canceled, and the complainants enjoined from using it in defense to the action. The cross bill further prays that, in case the court, notwithstanding the answer of the defendant, shall grant the prayer of the complainants, and enjoin and restrain the defendant from prosecuting his actions at law, then in such case, by way of alternative relief against the complainants, and each of them, the court will take cognizance in this suit of his various claims referred to in the bill of complaint against the complainants, and each of them, and adjust in this suit the various rights of action of this defendant against the complainants in granting him relief by way of a decree directing payment by the complainants, and each of them, of the damages, etc. The answer sets forth the amount received by the defendant in settlement with two of the insurance companies who underwrote upon the same property and suffered a loss by the same fire. The award was as follows: Sound value, $14,205.01; damage, $5,030.90.

Edward M. Colle, for complainants.

Eugene Stevenson and John B. Humphreys, for defendant.

PITNEY, V. C. (after stating the facts). The pleadings and proofs raise two questions: First. Was the ascertainment of damages (called the "award") valid and binding on the defendant? And, second, whether found to be valid and binding or not, has the case made by the bill as to the difficulties of proceeding at law been so far supported by the proofs that the defendant ought not to proceed with his actions at law? If the court is against the defendant on both points, then a permanent injunction against the suits at law must issue, upon condition that the complainants pay the award. If the court is against the complainants on the first question, but with the complainants on the second question, then it will be the duty of the court to proceed to ascertain the damages.

Now, first, as to the validity of the award. That is attacked on several grounds: First, that Winchester, the appraiser nominated by the insurance companies, was an incompetent person, and unduly prejudiced in favor of the insurers; second, that Atherton, the appraiser nominated by the defendant, was induced by Winchester to agree to the appointment of Manning upon false representations made to him by Winchester, and that Manning was an incompetent and partial umpire; third, that the defendant revoked the agreement to submit to those parties before the award was made, and gave them notice that he would not be bound by it; fourth, that Atherton refused, against the wishes of the defendant, to proceed with the appraisement, and wrote a letter to the defendant, resigning, and himself notified the other appraiser that he would not proceed; and that there never was any real attempt at an agreement between Atherton and Winchester, the two appraisers, and hence the umpire had no jurisdiction to intervene, and the whole proceeding of appraisal between Winchester and Manning was without jurisdiction. As to some of the allegations upon which these points were based no attempt was made...