American Guaranty Co. v. Caldwell

• Decision Date: 11 July 1934
• Docket Number: No. 7356.,7356.
• Parties: AMERICAN GUARANTY CO. v. CALDWELL.
• Court: U.S. Court of Appeals — Ninth Circuit

72 F.2d 209 (1934)

AMERICAN GUARANTY CO. v. CALDWELL.

No. 7356.

Circuit Court of Appeals, Ninth Circuit.

July 11, 1934.

Harry D. Parker, of Los Angeles, Cal., for appellant.

Clyde Doyle, John G. Clark, Edison Thomas, and W. Ward Johnson, all of Long Beach, Cal., for appellee.

Before WILBUR, SAWTELLE, and GARRECHT, Circuit Judges.

GARRECHT, Circuit Judge.

The American Guaranty Company, a corporation organized under the laws of the state of Ohio, appellant herein, employed Hartley Caldwell, appellee herein, and a resident of Long Beach, Cal., to act as its general agent in certain counties in Southern California under a contract dated March 5, 1928. Said contract, among other things, provided: "Should any misunderstanding arise as to the interpretation of any part of this contract or any dispute ensue as to its application in the settlement to be made hereunder, it is agreed that at the request of either party hereto the matter shall be submitted to arbitration. Each party shall name one arbitrator and the two so named shall select a third arbitrator who shall be umpire and who shall be versed in the nature of the business covered by this contract. In the event either party after notice of desire to arbitrate fails or refuses to appoint an arbitrator within thirty days then the party so desiring arbitration may appoint both arbitrators. In the event the two arbitrators first appointed are unable within two weeks to agree upon an umpire then an umpire appointed by the President or Secretary of the National Bureau of Casualty and Surety Underwriters shall be the umpire. A majority decision of said arbitrators, rendered in writing shall be final and equally binding upon both parties to this agreement."

A dispute having arisen, thereafter and on or about the 14th day of November, 1929, Hartley Caldwell demanded arbitration of his claim against said company, and on or about the 14th day of December, 1929, appointed John Joseph Mullin as an arbitrator, and notified said American Guaranty Company thereof in writing on or about said 14th day of December, 1929. That said American Guaranty Company failed and refused to appoint an arbitrator prior to the 25th day of January, 1930, and at said time, said Hartley Caldwell, by reason of the failure of said American Guaranty Company to appoint an arbitrator, appointed John S. Talbott as a second arbitrator. That said two arbitrators selected one M. B. Yates as a third arbitrator. That said M. B. Yates was, by reason of illness, unable to act as such arbitrator, whereupon said two arbitrators selected one J. H. Buckle as a third arbitrator in place of said M. B. Yates.

That on the 5th day of March, 1930, a hearing was held by said arbitrators and that said arbitrators awarded to Hartley Caldwell the sum of $32,500 against said American Guaranty Company. That said Hartley Caldwell sought to obtain a confirmation of said award in the superior court of the state of California in and for the county of Los Angeles, but that said cause was removed to the District Court of the United States, Southern District of California, Central Division, on motion of said American Guaranty Company, which therein moved to vacate and set aside said award upon the ground, among others, that said arbitrator, John S. Talbott, was not appointed in the manner provided by said agreement and by law, and said award was on that ground vacated and set aside on the 12th day of February, 1931, and the court directed that said matter be reheard by arbitration pursuant to law. Thereafter, and pursuant to said order of court and said provisions of said contract, said Hartley Caldwell appointed said John J. Mullin as his arbitrator, and the American Guaranty Company appointed Harold B. Thomas as its arbitrator. The two arbitrators being unable to agree within two weeks, an umpire, one R. E. Laley, was appointed by Mr. E. E. Robinson, purporting to act as acting secretary of the National Bureau of Casualty and Surety Underwriters. A hearing was held by said arbitrators and umpire on December 18 and December 19, 1931, wherein evidence was introduced by both parties to the controversy and arguments made by the attorneys representing Hartley Caldwell and by the attorneys representing the said American Guaranty Company.

At the close of all the evidence the majority of the arbitrators signed and acknowledged in due legal form under date of December 19, 1931, a decision and award that said appellee and said appellant each take nothing as the result of this action; a copy of which was duly served upon each of the parties by delivering a copy to the attorneys representing said respective parties on December 22, 1931.

A dissenting decision under date of January 11, 1932, was rendered by John J. Mullin, arbitrator appointed by appellee. No motion to confirm said majority award was filed by either of said parties. On December 6, 1932, the appellee filed the decision and award with the clerk of said court in said action, and, on December 7, 1932, appellee filed a notice of motion to vacate the award, supported by his affidavit. The District Court denied said motion. Later the court on its own motion vacated said prior order, and directed a rehearing of said matter due to the fact that several affidavits in behalf of said appellee had been misplaced and had not been considered by the court. After rehearing, the court on March 13, 1933, again made and entered an order denying the motion to vacate said majority award. On June 12, 1933, appellee filed another motion to vacate the order of March 13, 1933, supported by a number of affidavits in which it is set forth that R. E. Laley, one of the arbitrators, was...