Dennis v. Standard Fire Ins. Co.

• Decision Date: 07 May 1919
• Docket Number: No. 45/538.,45/538.
• Parties: DENNIS et al. v. STANDARD FIRE INS. CO.
• Court: New Jersey Court of Chancery

107 A. 161

DENNIS et al.

v. STANDARD FIRE INS. CO.

No. 45/538.

Court of Chancery of New Jersey.

May 7, 1919.

Schuyler M. Cady, of Elizabeth, for complainants.

Raymond, Mountain & Marsh, of Newark, for defendant.

BACKES, V. C. This suit is to set aside an appraisement made under the provision of a fire insurance policy. The complainants operated a small printing plant in Newark, which was damaged by fire. They were insured for $3,000, and, being unable to agree with the insurance company upon the amount of loss, the dispute was submitted to appraisers, who appointed an umpire "to decide upon matters of difference only, as provided for in the within agreement." The articles of submission provided that the appraisers "shall together appraise and estimate the sound value of the below described property, and the amount of loss and damage thereon caused by the fire, which occurred on the 5th of November, 1917, provided that the said appraisers shall first select a competent and disinterested umpire, who shall act with them in matters of difference only. The award of said appraisers and umpire (if the umpire be called upon to act) or any two of them, made in writing, in accordance with this agreement, shall determine the amount of said sound value, and of said loss and damage, as provided by the policy or policies of said company or companies." The complainants submitted to the appraisers a list of 147 articles claimed to have been damaged or destroyed. The appraisers agreed upon the sound value, except as to one item, at $3,075.05. Upon the loss they agreed as to 42, and disagreed as to the remaining 105 items; and then they called in the umpire, to whom they submitted their differences. The three worked together in an effort to reach an agreement, but without success. The umpire and the appraiser selected by the company appraised the loss at $931.38, and signed the award. The complainants' appraiser declined to sign it. The complainants claim to have suffered a loss of $1,709.17, and seek to set aside the award on the ground of alleged misconduct on the part of the umpire, in that he estimated the loss upon 17 articles at figures lower than those reached by either of the appraisers, and that he disregarded the sound value of one item agreed upon by the appraisers. The bill alleges more than technical misconduct. It charges that the company's appraiser was not impartial, that he and the umpire, debauched by bribery, conspired to defraud the complainants, and that, moved by illicit considerations, the umpire violated his duty in the two instances just adverted to. The alleged corrupt practices of the insurance company, its appraiser and the umpire, are ambiguously and insidiously averred, and are calculated to give the impression that the award as a whole is tainted with, and the product of, fraud; but upon a careful reading it will be seen that the intemperate and extravagant language charges no more than that the umpire was fraudulently and corruptly induced to misconduct himself in respect to the two things complained of. If the pleader intended that the charges should have a broader reach he has failed. However, upon this aspect of the case, and in justice to the gentlemen whose characters have been so unjustifiably assailed, it ought to be stated that the allegations find no support whatever in the testimony, and that they were abandoned, as unfounded, by the complainants' counsel at the conclusion of the hearing. There is not a jot of evidence of unbecoming conduct upon the part of either the appraisers or the umpire to excite the slightest suspicion that any of them approached their task with ulterior motives, and the impression made on the mind by the testimony is that the three gave careful consideration to the conflicting claims of the parties, and conscientiously reached their verdicts.

It was hardly to be expected that the appraisers would agree in all matters. They were partisans, within bounds, but were nevertheless unbiased and unprejudiced and disinterested within the meaning of the contract of insurance. Their attitude was that approved of by Vice Chancellor Pitney in American Central Insurance Co. v. Landau, 62 N. J. Eq. 93, 49 Atl. 745, where he said that—

"The appraiser chosen by each party is supposed and expected, in a restricted sense, to represent the party appointing him, and within reasonable limits to see to it that no legitimate consideration favorable to the party so appointing him is overlooked by the other appraiser."

The umpire, like the appraisers, is a business man of excellent character and standing, and was peculiarly qualified, by long experience in the printing trade, to pass judgment upon the value of the articles submitted. The elimination of the charges of fraud does not, however, end the complainants' case. The question still is, Was the umpire guilty of misconduct in appraising the loss on the 17 items at figures beyond the limits fixed by the appraisers, and in discarding the estimates of the appraisers as to the sound value of one of the articles? To this proposition counsel addressed themselves in their arguments and briefs. "In the legal idea of misconduct, an evil intention is not a necessary ingredient." Sullivan v. Frink & Co., 3 Iowa, 66. Where an umpire or arbitrator exceeds his authority, the effect of his act is the same whether it was done consciously or by mistake, as in either case his award is void. Royse's Adm'r v. McCall, 5 Bush (Ky.) 695.

The position taken by the complainants is, and they contend, that, as the umpire was to act "in matters of...