84 Minn. 526 | Minn. | 1901
This action is brought by plaintiff to set aside the award of referees, appointed to determine tbe amount of loss under a fire insurance policy in tbe defendant company, upon the grounds of fraud and misconduct in their methods of procedure and of the inadequacy of tbe award.
Tbe trial court returned findings to tbe effect that tbe reasonable and fair cash value of tbe stock of goods and merchandise in plaintiff’s possession at the time of the fire was $29,348.71; that tbe material entirely destroyed amounted to $13,777.08, and that tbe direct loss and damage to tbe residue of her goods was $13,021.40, causing plaintiff a total loss and damage of $26,798.48; that immediately after tbe fire plaintiff served defendant with due notice thereof, in accordance with tbe required terms of tbe policy, and upon failure of agreement by the parties as to the amount of tbe loss tbe matter was referred to three appraisers, appointed in tbe manner provided in the policy by each party submitting to the other a list of three names, from which plaintiff selected W. W. Thomas and defendant Harry A. Titcomb, and the
The court found that Referees Thomas and Alden were not fair, disinterested, and impartial persons, but, on the contrary, were so strongly biased and prejudiced against plaintiff as materially to affect their actions in making up and signing the award; that on different occasions during the progress of their proceedings Referee Thomas had openly declared himself the representative of the insurance company’s interests; that Thomas and Alden had privately consulted witnesses concerning the quality and value of plaintiff’s stock of goods, thereby materially influencing their action and decision; that they agreed to hear further evidence on plaintiff’s behalf, and to notify her of a time and place for that purpose, but found their award without so doing. The court further found that within four months prior to the selection of Referee' Thomas he had served in like capacity
As a conclusion of law, judgment'was ordered that the award submitted by Referees Thomas and Alden be declared void and vacated; that defendant, by reason of its action and conduct since the making and rendition of the award, had waived its right to a resubmission of the matter to other referees; and that plaintiff recover from defendant the full amount of the stated'loss, with interest. The assignments of error present two questions: First. Does the evidence justify the finding of the court as to the amount of goods on hand at the time of the fire, the amount of plaintiff’s-, loss, and the misconduct and prejudice of the referees? Second.. As a matter of law, had the defendant waived its rights to a resubmission of the question of loss and damage to other referees?
After an examination of the voluminous record; we are satisfied that the findings of fact are supported by the evidence, and will not enter into a lengthy discussion of that question. As to the cash valuation of the goods on hand at the time of the fire, it is sufficient to say that the court was not limited to any particular method of estimating that value. It was not compelled to take the' invoice or cost price alone for a basis, nor the statement made up by any particular expert. Neither was it necessary that the court should find against respondent bécause her books were incomplete. The court’s finding is based upon evidence from all
The board of referees provided for under the standard policy is a quasi court, subject to the principles governing common-law arbitration. Such board should sit in a body, and receive evidence offered by the respective parties, submitting the same to the usual tests of cross-examination. While its individual members are prohibited from privately collecting evidence from different sources, a reasonable latitude is allowed them in the examination of the premises, remnants of goods, and causes of the fire, for the purpose of better understanding and weighing the evidence on the principal question before them, viz., what is the just damage to the property involved? But, while a certain liberality is permissible in acquainting themselves with the circumstances surrounding the fire without the medium of witnesses, such board is not selected' for the purpose of seeking evidence secretly, and determining the amount of the loss by reason of such personal knowledge. See authorities cited in 2 Am. & Eng. Enc. 641-655. This court has practically stated the rule in Mosness v. German-American Ins. Co., 50 Minn. 341, 52 N. W. 932. The referees must constitute a body of disinterested men, whose business it is to proceed in a judicial and impartial manner to ascertain the facts in controversy.
By referring to the findings in this case, it will be seen that the referees did not follow the proper method of discovering facts. They should have accorded respondent every reasonable means of presenting her evidence and appearing in person or by counsel, and, if any referee had privately ascertained the existence of
It is asserted on behalf of appellant that the referees were selected with full knowledge by each party that both Thomas and Titcomb had similarly served before, and in fact were chosen for the value their experience might afford the respective interests in this case, and that, whatever the misconduct or illegality resorted to by them, it was nothing more than might have been contemplated. While true that these men were experienced in work of this particular kind, it cannot be said that they were chosen with the expectation by the parties of their becoming their respective advocates. There is nothing in either the evidence or findings of the court to indicate that either appellant or respondent desired the referees to go beyond the legitimate limits of the inquiry. Consequently, there is no application here of. the rule sometimes applied that parties are bound by the result when it appears they voluntarily selected referees with the expectation of their accomplishing certain results by unjust means.
The principal question in this case is one of law. Conceding that appellant was in no way connected with the referees’ misconduct for which the award was declared invalid, is appellant entitled to a resubmission? Appellant takes the position that it was in no manner responsible for the referees’ misconduct, and, the award having been declared invalid, the parties are in the same position they were in before commencement of suit, and that the judgment setting aside the award has the effect of annulling it. We are referred to a certain line of cases in support of this proposition, — cases which have held that, where an attempt has been made, but for some reason arbitration has' not taken place, a new arbitration is necessary, — but they are not applicable here.
Respondent refers to the case of Levine v. Lancashire Ins. Co., 66 Minn. 138, 149, 68 N. W. 855, as an authority for the insured to com
In our opinion, the Levine case lays down a sound principle, and one which is controlling in this case, which is to the effect that, if an award is attacked upon the ground of fraud or misconduct of the referees, and one party to the controversy notifies the other of that fact, demanding a reappraisement on account of such misconduct, it then becomes the duty of the other party to investigate the validity of the charges, and determine whether or not it will abide by the award or submit to a reappraisement; and, if it shall determine to abide by the award and refuse to submit to a reappraisement, such party is thereby estopped from thereafter demanding another appraisement, in case the charges shall prove to be sustained. The purpose of the provisions in the standard policy with reference to arbitration is to secure a speedy determination of the controversy, and to hold that the party insisting upon the validity of an award might litigate that question, and not be bound by the result of the action, would be to create an interminable method by which the controversy could be submitted again and again. When a party to a controversy
The conclusion we have arrived at does not result in a discrimination against the insurance companies, for the same principle would apply to the actions of the insured in case the insurer should attack the award for the same reason.
Order affirmed.