Caledonian Ins. Co. of Scotland v. Traub

• Decision Date: 18 June 1896
• Citation: 35 A. 13,83 Md. 524
• Parties: CALEDONIAN INS. CO. OF SCOTLAND v. TRAUB ET AL.
• Court: Maryland Court of Appeals

35 A. 13

83 Md. 524

CALEDONIAN INS. CO. OF SCOTLAND v. TRAUB ET AL.

Court of Appeals of Maryland

June 18, 1896

Appeal from circuit court, Carroll county.

Action by Julius Traub & Bro. against the Caledonian Insurance Company of Scotland on a fire insurance policy. From a judgment for plaintiffs, defendant appeals. Reversed.

For prior report, see 30 A. 904.

Argued before McSHERRY, C.J., and BRYAN, FOWLER, BOYD, and RUSSUM JJ.

James Hewes, C. T. Reifsneider, and C. T. Reifsneider, Jr., for appellant.

B Rosenheim and Clabaugh & Roberts, for appellees.

BRYAN J.

A former appeal in this case is reported in 80 Md. 214, 30 A 904. The suit was brought by the appellees on a policy of insurance to recover a loss by fire to the goods insured. The policy provides for determining the amount of loss as follows: "Said ascertainment or estimate shall be made by the insured and this company, and, if they differ, then by appraisers, as hereinafter provided; and, the amount of loss or damage having been thus determined, the sum for which this company is liable pursuant to this policy shall be payable sixty days after due notice, ascertainment, estimate, and satisfactory proof of the loss have been received by this company. * * * In the event of disagreement as to 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, and the two so chosen shall first select a competent and disinterested umpire. 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." One of the cardinal questions in the case depends on the effect and legal consequences of these clauses. The fire occurred July 23, 1893. An agreement for the appraisement of the loss was signed by Traub & Bro. on one hand and the insurance company on the other on the 4th day of August of the same year, and Rosenfeld and Biernbacher were appointed appraisers. They proceeded to appraise the loss, and appointed Baetjer umpire. There is testimony that the appraisement was begun before the umpire was appointed, and there is testimony on the other hand that the umpire was appointed before any entry had been made in a book by the appraisers. There is evidence that Rosenfeld withdrew after some progress had been made in the appraisement, and refused to have anything more to do with it, and that the work was then completed and an award made by the other appraiser and the umpire without his concurrence. This award is not in accordance with the stipulations of the policy. It was required that the appraisers, acting together, should estimate the loss, and, when they failed to agree, their differences were to be submitted to the umpire. It was necessary that there should be joint action by both of the appraisers, conference together, and a result reached, if possible, by their combined action. The umpire had no authority to act, except when they differed in their estimates. As it occurred, Rosenfeld's judgment was not exercised on a good many questions involved in the appraisement; and the other appraiser and the umpire assumed that they had the authority to make the decision without him, and they together made up the award. Independently of the distinct requirement of the policy, the law would require combined action by the appraisers who were selected by the parties. They occupied the position of arbitrators, and with respect to the duties of arbitrators the law is fully settled. In the first volume of American and English Encyclopædia of Law (page 683) a great number of authorities are collected, and the accepted doctrine is stated as follows: "All must be present throughout each and every meeting, equally whether the meeting be for hearing the evidence or arguments of the parties or for consultation or determination upon the award. The disputants are entitled to the exercise of the judgment and discretion, and to the benefits of the views, arguments, and influence, of each one of the persons whom they have chosen to judge between them; and they are entitled to these not only in the award, but at every stage of the arbitration, even where a majority are empowered to decide." The fact that the umpire was not chosen until after the appraisement had been begun would not have invalidated the award. The substantial requirement was that he should decide the differences of judgment between the appraisers. The time at which he was appointed could not injure any one's rights, provided he was on hand to decide the differences between the other two. Although the direction as to his appointment was not strictly followed in this particular, the variation did not interfere with any of the duties which he was appointed to perform, and was not of essential importance. There is something unexplained about Rosenfeld's desertion of the arbitration after he had commenced it. Evidence was given by Reinhardt as follows: "The witness testified on cross-examination that he told Traub that he would have to go into arbitration. He was acting for the plaintiffs. It was after the offer of $816 had been made and refused that arbitration was spoken of. I understood from...