Robertson v. Lion Ins.

73 F. 928, 1896 U.S. App. LEXIS 2671

• Court: U.S. Circuit Court for the District of Western Virginia
• Decided: April 24, 1896
• Status: Published

Opinion

SIMOKTQbT, Circuit Judge.

This is a bill to set aside an award made after a loss by fire, pursuant to the terms of a policy of insurance. The complainant is a merchant of Lynchburg, Va., engaged in the ready-made clothing business. He sustained the loss, and is dissatisfted with the award.

The law on the subject is not disputed. It is clearly stated in 4 Minor, Inst. 152. Awards can be set aside only for:

“(1) Improper conduct of the arbitrators; (2) improper conduct of the parties, or one of them; (3) illegality or injustice apparent on the face of the award itself.”

It is stated clearly and fully by Mr. Justice Grier in Burchell v. Marsh, 17 How. 350:

"Arbitrators are judges chosen by the parties to decide the matters submitted to them, finally and without appeal. As a mode of settling dispntes, it should receive every encouragement from courts of equity. If the award is within the submission, and contains the honest decision of the arbitrators, after a full and fair hearing of the parties, a court of equity will not set it aside for error, either in law or fact. A contrary course would be a substitution of Uie judgment of the chancellor in place of the judges chosen by the parties, and would make an award the commencement, not the end. of litiga tion. ‘In order,’ says Lord Thurlow (Knox v. Symmonds, 1 Ves. Jr. 369), ‘to induce the court to interfere, there must bo something inore Ilian an error of judgment, such as corruption in the arbitrator, or gross mistake, either apparent on the face of the award or to be made out by evidence; but, in case of mistake, it must be made out to the satisfaction of the arbitrator, and that, if it had not happened, he should have made a different award. Courts should he careful to avoid a wrong use of the word ‘mistake,’ and, by making it synonymous with mere error of judgment, assume to themselves an arbitrary power, over awards. The same result would follow' if the court should treat the arbitrators as guilty of corrupt partiality, merely because their award is not such a one as the chancellor would have given. We are all too prone, perhaps, to impute either weakness of intellect or corrupt motives to those wlio differ with us in opinion,”

The question, then, resolves itself into a question of fact. The insured and the insurer not being able to agree upon the amount of the loss, a resort was had to the arbitration clause in the policy. The insured proposed as his arbitrator R. B. Schenck, of Lynchburg. The insurer proposed a name of its arbitrator. The person named was promptly objected to by the assured. The name was withdrawn, and A. C. Westbrook, of Atlanta, was named and was accepted in Ms stead. The bill is tilled with grave charges against the character and judgment of this arbitrator. But the record fails to disclose any evidence whatever reflecting upon his character, either as an experienced or as an honest man. The two arbitrators, having been sworn according to law, proceeded to select an umpire, to decide between them in case they should differ. This umpire was selected, before they had begun possibly, certainly before they had compiled their own appraisement; and very properly. Then, before the possibility of a heated discussion over differences of opinion, they could more easily agree upon an umpire. A gentleman from Richmond was selected. His business engagements compelled him to decline. Thereupon two names were submitted, of persons resident in Baltimore. Robertson, the insured, then communicated with Oppenheimer & Co., his friends and creditors in that city, giving them the names and addresses of these two persons, stating his purpose in asking about them-, and requesting advice with regard to them. In reply, he was advised to select I. George Baetjer, one of the persons named. He was then selected as umpire. After his selection, Westbrook, who, according to the evidence, had no personal acquaintance With him, wrote to know if he would serve. He replied assenting to act; and, having business, attending court as a witness in a county of Virginia, and other business at Roanoke, he called at Lynchburg on his way home, and found the arbitrators .about concluding their work. He thereupon took his oath as umpire, and, the arbitrators having differed, he concluded the award. The bill contains grave charges against him also. But the, great preponderance of the evidence, including the concurrent opinion of witnesses of the highest respectability and business character in Baltimore, who -knew him, and had full opportunity of knowing him for years, establishes his character as a man of high integrity, great business capacity, and large experience. In the estimate of losses by ñre, he had been frequently employed both by insurers and insured, and his opinions were valued and respected. In his pleadings and in the argument, the complainant charged that these two men, Westbrook and Baetjer, were professional arbitrators, hirelings of insurance companies, and obedient to their behests, who had been foisted upon the complainant fraudulently, to his wrong.

The record shows no justification for charges of this kind. The arbitrators were sworn in on 14th April, 1894. They made their finding on the 21st. The umpire made his award on 24th of that month. Every fact concerning the residence, business character, employment, and relation of Westbrook and of Baetjer were either known to, or were within easy reach of, the complainant. But he, havihg made no objection to Westbrook, and having intervened actively to secure Baetjer, made no sign of disapproval during the period of the arbitration and award. Clearly, he waited on the event. The true test of the award is this: Is this of so extravagant a character as to warrant the conclusion that it was found and concluded from a partisan bias towards one of the parties? If so, under the law, it cannot stand. We have gone over the testimony with great care, and cannot see anything which can lead to such a conclusion. As has been seen, the umpire is a man of character, experience, and ability. He went carefully over the stock, which had been arranged in parcels, examining specially each parcel, and putting his valuation upon it. He differed, it is true, with some merchants in that line of business in Lynchburg. But they observed and estimated the stock as a whole, lying as it was left after the fire. He went into it in detail. He differed also with the arbitrator of the complainant. But the estimate of this arbitrator is clearly extravagant, not justified by the experience of persons who purchased the damaged stock. But, above all, he was chosen to make the award by both parties under the terms of their contract,— the judge of their own selection in this domestic tribunal. His errors, if errors there were, were errors of judgment, over which we have no control. They do not hecray fraud, fraudulent dealing, gross irregularity, gross partiality, or partisanship. The award cannot he disturbed. Let the hill be dismissed.

PAUL, District Judge, concurred.