Kaplan v. Niagara Fire Insurance

| N.J. | Nov 19, 1906

The opinion of the court was delivered by

Vredenbukgh, J.

The counsel of the plaintiff in error, having before them the light of the above-quoted opinion at the Circuit, fortified by its references to authority, urge in argument and in brief here two subjects deserving our consideration. Their first contention is directed against the validity of the appointment of an umpire. Upon the face of the award in evidence there appears in writing to have been made by the two chosen arbitrators a selection and appointment of a designated person as umpire, precedently to the signing by them of their award. It was made a condition in the submission that the umpire should first be appointed by the two appraisers before they entered upon their own duties, and this the evidence shows they did. Says Kyd on Awards (at p. 87), this “is the fairest way of choosing an umpire.” Nothing has appeared in the case to weaken the legal presumption of validity which the court is bound, to. ascribe to the proceedings, in the absence of evidence to the contrary. The authorities all hold that “every intendment to substantiate the award will be made.” But, assuming, for argument’s sake, the correctness of the suggestion in plaintiff’s brief to the effect that there is nothing in the case to show that the person named by the arbitrators as the umpire possessed the necessary qualifications for the office, or ever accepted it, it seems too manifest to justify discussion that, since the case shows he never in fact acted, nor assumed or had jurisdiction to act as such umpire (no subject of difference ever having arisen between the two arbitrators), it can be of no legal consequence whether or not he ever accepted the office, or had any, the slightest, qualification for it. As he never decided any question in the proceedings, and took no part in the making of the award, the plaintiff’s rights have not been effected.

The subject presented by the plaintiff’s specific assignment of error raises the important question in controversy. It is that the trial justice.“refused to permit the plaintiff to prove that there was a total loss under said policy of some $300 in the destruction of window glass, which was entirely omitted in the appraisement, and overruled the testimony offered on the part of said plaintiff for that purpose.” The precise point presented here is, admitting the omission from the award of one of the items in dispute between the parties, which was within tire terms of the submission, can such omission be proved at law by parol-extrinsic evidence ?

It should be observed that the plaintiff’s offer does not fall within the exception to the general rule pointed out by Chief Justice Beasley in Ruckman v. Ransom, 6 Vroom 565, 570. -He there adds the great weight of his opinion in expressing both the well-settled general rule and also its one exception, deduced by him from the authorities, as follows: “The general rule, on all sides admitted, is that neither the fraud, misconduct or mistake of the arbitrator can be set up at law in an action on the award, or on the bond of submission, unless such vice or defect appear upon the face of the award or submission. I think, also, it must be considered settled that the generality of this rule is subject to one exception, which is that the award may be contradicted by parol, in order to show that the arbitrators neglected or refused to^ take into consideration a matter submitted to them.” The principal case in this state, out of which this exception took form in the mind of the. Chief Justice, evidently was Harker v. Hough, 2 Halst. 428. In that case it was the refusal of the arbitrators to hear or investigate a certain claim set forth, in the plea of the defendant (which he averred was within the submission) that led the Supreme Court to hold the plea good at law. In the case at bar there was no offer to prove the refusal of the arbitrators to appraise the omitted item. For all that appears by the offer the alleged omission may have been the result of a pure accident or clerical mistake in the making up of the award. The offer was not to prove a defect or mistake apparent on the face of the award, but, in effect, was to contradict its very terms by the insertion of an additional item in order to increase the amount of damages therein in favor of the plaintiff — in other words, to show an erroneous finding of fact made by the arbitrators.

But the rule quoted is opposed to the admissibility of such offer. The judgment of the arbitrators as to- conclusions of fact is final, except as above stated. Their award cannot be impeached at law for erroneous judgment upon facts, nor can it be for the omission of items of account which are within the terms of the submission. Even in equity, except in cases of accident or mistake, such decision is final unless corruption or misconduct be imputed -to them.

In Price v. Williams, 1 Ves. Jr. 365, the report of the old case shows that “Mr. Graham — against the award” — ineffectually applied-to Lord Chancellor Hardwicke “for time to consider whether affidavits should be produced which could be made by respectable persons, who were ready to swear that the arbitrators did not look into the evidence of more than five items out of a great member.” The application so refused was entirely analogous to- the plaintiff’s offer in the case at bar. In Dick v. Milligan, 2 Id. 23, 24, it was held that the decision of the arbitrators is final upon matters of fact (no corruption or misconduct being imputed to them). These views bearing upon the omission in question are supported by the clear weight of authority.

Other decisions pertinent will be found in 2 Am. & Eng. Encycl. L. (2d ed.) 776, and it is unnecessary to add them here. The plaintiff also insists that the award did not include the goods destroyed, but we think that, upon its face when read with the submission upon which it is based, it purports to embrace all the goods specified in the submission, whether destroyed or damaged. It excepts no goods destroyed from the operation-of its broad terms, and for reasons already expressed parol evidence cannot be resorted to at law to correct alleged omissions. The plaintiff’s exceptions at the trial pointed only to the item of glass, no other “goods” being there specified as claimed to have been destroyed.

The judgment below should be affirmed.

For affirmance — Trie Chancellor, Criiee Justice, Garrison, Garretson, Hendrickson, Pitney, Swayze, Bogert, Yredenburgi-i, Yroom, Green, Gray, Dill. 13. For reversal — None.