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2. FIRE INSURANCE POLICY-APPRAISAL AND

AWARD-VACATION-GROUNDS FOR PRESUMPTIONS.

Every reasonable intendment and presumption is in favor of an award made by appraisers pursuant to the terms of a fire policy, and it should not be vacated unless it clearly appears that it was made without authority, or was the result of fraud or mistake, or of the misfeasance or malfeasance of the appraisers. 3. SAME_WITHDRAWAL OF APPRAISER DURING INVESTIGATION-EFFECT.

An arbitration cannot, after it is properly submitted, be defeated by the withdrawal of one of the appraisers during the investigation. 4. SAME INACCURATE VALUATION IM PEACHMENT OF AWARD.

Where there is sufficient evidence to sustain an award as to value, it is not open to attack, though the valuation be inaccurate, unless so grossly erroneous as to indicate bad faith or other grounds to set the award aside.

Appeal from Circuit Court, Lee County; S. H. Mann, Special Judge.

Action by R. M. Boon and another against the Niagara Fire Insurance Company. Judgment for plaintiffs, and defendant appeals. Affirmed.

Terry & Terry, for appellant. P. D. McCullock, for appellees.

briefly outlined above, and which version comes accredited by the chancellor.

1. Objections are made to such testimony; some because elicited by leading questions, others because opinion evidence from wit. nesses not properly qualified as experts, and for other reasons. The case was heard before the chancellor, and he is presumed to have disregarded all incompetent testimony, and on trial de novo the case is weighed solely on the competent testimony; hence there is no profit in discussing these objections.

2. It is insisted that the appraisers selected by the insured did not estimate on the basis required by the policy, and thereby departed from the terms of the submission. The point turned on whether the old wall was to be treated as worthless or an estimate made on its damaged condition. There is much evidence to sustain the appraiser in his opinion that it would have to be taken down, and the value of it would not compensate the expense of tearing it down. Even if wrong in his opinion on that subject, there is not sufficient evidence against it to set aside the award as founded in mistake. Judge Sanborn thus stated the rule : “AD agreement of appraisal is a contract.

Appraisers who make an award under such an agreement are presumed to have acted in accordance with the law and the terms of the contract, and the burden of proof is on those who attack their award to establish the contrary by convincing evidence. Every reasonable intendment and presumption is in favor of the award, and it should not be vacated unless it clearly appears that it was made without authority, or was the result of fraud or mistake, or of th misfeasance or malfeasance of the appraisers.” Barnard v. Lancashire Ins. Co., 41 C. C. A. 170, 101 Fed. 36. The evidence satisfies the court, as it did the chancellor, that the award was fairly made. Certainly it cannot be said that it clearly appears that it was the result of fraud, mistake, misfeasance, or malfeasance of the appraiser or the umpire. The evidence against it on material questions is that of the appraiser selected by the company and adjuster, and they are contradicted by the other appraiser and umpire and the other testimony strongly sustaining the latter.

3. There is much said about the bias and partisanship of the appraisers, but no evidence is apparent to sustain a disqualification of them on this account within the rule on that subject recently announced by this court in National Fire Ins. Co. v. O'Bryan, 87 S. W. 129.

4. It is contended that the arbitration was dissolved by the appraisers, and the award made by the umpire and one appraiser acting

appraisers after the appraisers had agreed to dissolve, and that this was contrary to the terms of submission, which provided for the umpire to only act when the appraisers submit their differences to him.

HILL, C. J. Boon had a policy of insurance in appellant company on his store building and the adjoining building burned, injuring the intervening brick wall, the roof and front of his building. The adjuster of the insurance company and Boon failed to agree on the amount of damage, and the company invoked the arbitration clause of the policy. The clause was in the usual form of such clauses in standard fire insurance policies, providing that each party select a competent and disinterested appraiser, and the appraisers to select a competent and disinterested umpire. praisers were required to estimate the loss, stating separately the sound value and damage, and, failing to agree, to submit their differences to the umpire, and the award of any two in writing should be binding. The appraisers were selected, and they selected an umpire. The preponderance of the evidence establishes the facts to be that the appraisers radically disagreed, one demanding an estimate based on a new wall and the other based on a slight damage to the wall. The appraiser selected by the insurance company then called in the umpire, and it seems that he and the appraiser for the company differed more radically than he and the other appraiser. Then the appraiser for the insurance company withdrew, and the umpire and other appraiser made the award in conformity to the policy. This suit was brought on the award, and the company had it transferred to chancery on allegations impeaching the award and seeking to set it aside. The case was tried by the chancellor, and there is much conflict in the evidence, but, as stated, a preponderance sustains the facts

The ap

as

The evidence satisfies the court that the ap- ident of insured before the fire occurred. Held, praiser selected by the insurance company

that the agent, though the agent of the insurcalled upon the umpire to settle the differ

ance companies, was made the agent of the in

sured for the purposes of procuring and canences, and, finding him more difficult to celing policies, and defendant's policy was in agree with them, the appraiser then with- force. drew. There is some evidence that the

Appeal from Cleveland Chancery Court; withdrawal was under the direction of the

John M. Elliott, Chancellor. adjuster, who learned of the situation of

Suit by the state, to the use of the Saline affairs. That is not important here, for it is

River Shingle & Lumber Company, against thoroughly settled that an arbitration cannot

the Phønix Insurance Company of Brooklyn. be defeated, after it is properly submitted,

From a decree in favor of plaintiff, defendby the withdrawal of one of the appraisers

ant appeals. Affirmed. during the investigation. Ostrander on Fire Ins. & 291 ; Bradshaw v. Ins. Co., 137 N. Y. This is a suit brought in the chancery court 137, 32 N. E. 1055.

by the state of Arkansas, for the use of the Other questions are discussed as to the Saline River Shingle & Lumber Company, a revocation of the arbitration by the with- domestic corporation, against the Phønix drawal of the appraiser on account of the Insurance Company of Brooklyn, a foreign arbitrary action of the other appraiser, and

insurance corporation doing business in the other questions based on the theory of ap

state, and the sureties on its bond, to repellant that the appraiser acted without form a policy and to recover the amount the scope of the submission and improperly. thereof $2,000 and interest on account of loss But the court is satisfied from the evidence by fire. Reformation of the policy is sought that the appraiser's conduct was not within in two respects, viz.: First, that it was by any of the grounds for impeaching the

mistake written to and in the name of W. S. award; hence it is unnecessary to pursue

Amis, the president of the Saline River Shin. the subject further. There was sufficient | gle & Lumber Company, and manager of its evidence to sustain the award as to the business, when it should have been written value, even if was not an accurate valua- to and in the name of said corporation; section, it would not be open to attack unless

ond, that it was by mistake written "on a so grossly erroneous as to indicate bad faith stock of lumber on his premises," when it or other grounds to set aside the award. should have been written "on a stock of The judgment is affirmed.

lumber situated at and in plaintiff's loading shed.” The undisputed facts of the case are as follows: The Saline River Shingle

& Lumber Company was the owner of a mill PHENIX INS. 00. v. STATE, to Use of SA- and lot of lumber at a switch sometimes LINE RIVER SHINGLE & LUM

called "Poole," on the St. Louis SouthwestBER CO.

ern Railroad. W. S. Amis was the president (Supreme Court of Arkansas. June 24, 1905.) of the company, and the manager of its busi1. INSURANCE-POLICY-REFORMATION.

A. B. Banks, an insurance agent at An insurance policy, which, because of mis- Fordyce, Ark., and agent of appellant and take in its execution, does not conform to the other insurance companies, had previously inreal agreement of the parties, may be reformed

sured the property of the lumber company in a court of equity. (Ed. Note. For cases in point, see vol. 28,

at the instance of Mr. Amis, the manager. Cent. Dig. Insurance, 88_266-270; vol. 42,

On or about April 10, 1902, Amis applied to Cent. Dig. Reformation of Instruments, $ 69.) Banks for insurance on the property of the 2. SAME-EVIDENCE-SUFFICIENCY.

lumber company-$2,500 on the mill and In a suit to reform a policy of fire in- $2,000 on lumber in the shed—which Banks surance, evidence held to warrant a reforma

agreed to do, and in a day or two wrote the tion thereof as to the name of the insured and the location of the subject-matter of the risk

policies by mistake in the name of Amis, and, on the ground of mistake.

instead of writing the lumber policy on lum3. SAME-CANCELLATION-NOTICE.

ber in loading shed, wrote it “on a stock of The stipulation in a policy of fire insurance for cancellation on five days' notice to the

lumber on the premises.” This policy was assured is for the benefit of, and may be waiv

written in the Greenwich Insurance Comed by, the assured.

pany, and both policies were mailed to Amis 4. SAME-AGENT-DUAL CAPACITY.

at Rison, Ark., where he resided. On April In a suit on a policy of fire insurance the 21, 1902, Banks received instructions from proof showed that a previous agreement existed between the president of the insured cor

the Greenwich Insurance Company to cancel poration and an insurance agent that the cor- the policy or increase the rate of premium poration's property should be kept insured. No to 10 per cent., and on that date he wrote particular insurance company companies were mentioned, and the corporation's presi

and mailed a letter to Amis, informing him dent gave no concern to that matter. He made

of the requirement of the Greenwich Comthe insurance agent his agent for the purpose pany, and saying: "I am canceling the lumber of selecting the company or companies, and, policy and rewriting same in the Phoenix of pursuant to the arrangement, the agent, without notice to the president, canceled a policy

Brooklyn, and shall send you policy at once." in one company and substituted therefor a poli- He wrote the policy on April 23, 1902, which cy in the defendant, and mailed it to the pres- is the one in controversy, carrying into it

ness.

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the same mistakes hereinbefore set forth as policy requiring five days to the assured beto name of assured and description of prop- fore cancellation, that policy was not legalerty, and mailed it to Amis at Rison on that ly canceled, and that the substitution by the day. The lumber in the loading shed, shown agent of the Phønix policy was unauthorto be of the value of $2,047, was destroyed ized. We cannot sanction this view. The by fire on the evening of April 23, 1902, at stipulation for five days' notice of cancella7:30 or 8 o'clock. Mr. Amis testified that tion was made for the benefit of the assured, he received the policies of April 10th by and could be waived by the assured. Southmail, but did not discover the mistake there- ern Ins. Co. v. Williams, 62 Ark. 382, 35 S. in until he received on April 22d, Mr. Banks' W. 1101; Kirby v. Ins. Co., 13 Lea, 340; Buick letter concerning cancellation of the Green- v. Mechanic's Ins. Co., 103 Mich. 75, 61 N. wich policy, and that he intended to go to W. 337. The policy was in fact canceled by Fordyce the next day (April 23d) to have the the agent, and his act in so doing was ratipolicies rewritten so as to correct the mis- fied as soon as brought to the attention of takes, but was unavoidably detained by oth- the assured. The stipulation was a part of er engagements; and that he received the the Greenwich policy, and appellant had no Phenix policy by mail on April 24th, the interest therein or concern therewith. Apsame having arrived at the postoffice at Rison pellant's agent issued a policy on the property the afternoon preceding. The defendant an- in question, which was in force at the time of swered, denying all the allegations of the the fire. The agent wrote the assured: “I complaint, and pleading that the policy sued am canceling the lumber policy and rewriton was issued by the agent, Banks, without ing same in the Phænix of Brooklyn, and authority from the insured, and was not ac- shall send you policy at once. cepted by the insured until after the fire. Please return the lumber policy in GreenThe chancellor decreed a reformation of the wich at once." He mailed the policy to the policy and recovery of the amount thereof assured before the fire, and same reached the with interest, and the defendant appealed. post office at Rison, the home of Mr. Amis, Alexander & Thompson, for appellant. W.

before the fire, but was not taken from the S. Amis, Crawford & Gantt, and Taylor &

office until the next day. Meanwhile the fire Jones, for appellee.

occurred. The proof shows that a previous agreement existed between Amis and Banks,

the agent, that the property of the lumber McCULLOCH, J. (after stating the facts).

company should be kept insured.

No parAn insurance policy, like any other contract, ticular insurance company or companies which by reason of mistake in its execution

were mentioned, and Amis gave no concern does not conform to the real agreement of to that matter, He constituted Banks his the parties, may be reformed in a court of

agent for the purpose of selecting the comequity. Thompson v. Insurance Co., 136 U. pany or companies, and, pursuant to this arS. 287, 10 Sup. Ct. 1019, 34 L. Ed. 408; Snell rangement Banks, without notice to Amis, v. Insurance Co., 98 U. S. 85, 25 L. Ed. 52; canceled the Greenwich policy and substiJamison v. State Insurance Co., 85 Iowa, 229, tuted therefor the Phænix policy, and mailed 52 N. W. 185. The proof fully warranted the it to Amis before the fire occurred. Banks, decree of the court reforming the policy in though the agent of the insurance companies, the particulars specified. The testimony is could be and was made the agent of the inundisputed that a mistake was made in writ- sured for those purposes. Ostrander on Ining the policy to and in the name of Amis surance (2d Ed.) 88 41, 42; Schauer y. Queen instead of the lumber company, and in writ- Ins. Co., 88 Wis. 561, 60 N. W. 994; Mich. ing it on all the lumber instead of on the Pipe Co. v. Mich., etc., Ins. Co., 92 Mich. 482, lumber in the loading shed. This disposes 52 V. W. 1070, 20 L. R. A. 277; Dibble v. of the contention of appellant as to the co- Northern Ins. Co., 70 Mich. 1, 37 N. W. 704, insurance clause in the policy. Treating it 14 Am. St. Rep. 470; Arnfeld v. Guardian as reformed so as to insure only the lumber Ins. Co., 172 Pa. 605, 34 Atl. 580; Huggins, in the shed, the insurance thereon was more Croker & Cowdy Co. v. People's Ins. Co., 41 than the percentage of value required in the Mo. App. 530. We see no escape from the policy, and the terms of this clause were com- conclusion that the Phenix policy was in plied with.

force when the fire occurred, and that that It is contended on behalf of appellant that company is liable for the loss. because of the stipulation in the Greenwich Decree affirmed.

without reference to the former decree, in BANK UF FAYETTEVILLE v. LORWEIN favor of Lorwein for the two notes and inet al.

terest, and appellant for $326.25, the amount (Supreme Court of Arkansas. July 1, 1905.)

of the first three notes and interest, which SUBBOGATION-RIGHTS OF INDORSEE

PAB.

had been embraced in the satisfied decree of TIAL PAYMENT OF DEBT.

1898, and the commissioner was ordered to An indorser of five vendor's lien notes paid sell the land to pay both debts; no preferthree of them, on which judgment had been ren

ence being provided for in the decree. The dered against him and another indorser, and then pledged the notes to intervener as securi

land was in 1901 duly advertised and sold ty for a loan, Held, that the intervener was by the commissioner under the decree of not subrogated to the right to participate in May 25, 1900, rendered in favor of Lorwein the proceeds of the sale of the land for the pay

alone, and was purchased by Lorwein for ment of the other two notes, the indorser not having paid the whole debt.

$250, who gave his note for the amount, in [Ed. Note.—For cases in point, see vol. 44,

accordance with the terms of sale, with one Cent. Dig. Subrogation, 88 52, 54.)

Brown as surety. At a subsequent term the

sale was by the commissioner reported to Appeal from Washington Chancery Court;

the court and confirmed, and a deed to LorT. H. Humphreys, Chancellor. Action by George Lorwein against one

wein duly executed and delivered, and the Jones and others, in which the Bank of Fay

note surrendered to Brown, the surety. Loretteville intervened. From a judgment de

wein subsequently sold and conveyed the land

to appellee Hall. nying intervener the relief demanded it ap

Appellant commenced the

present suit against Lorwein, Brown, and peals. Affirmed.

Hall, asserting a right, under the decree of On January 19, 1895, Nugent sold and con- July 31, 1900, to participate pro rata in the veyed to Jones a tract of land in Washing

distribution of the proceeds of sale of the ton county for $500, payable in five equal land, and asking a decree in its favor to that annual installments, evidenced by

five

effect, and a lien on the land. It is shown promissory notes, bearing interest. The by testimony that appellant's attorney had vendor's lien was expressly reserved in the no information of the decree of May 25, 1900, face of the deed. Nugent sold, indorsed, and and the sale thereunder, until after the condelivered the notes before maturity to Haup

firmation of the sale to Lorwein, and that man, who in turn sold, indorsed, and de neither Lorwein nor his attorney had any livered them before maturity to appellee information of the decree of July 31, 1900, Lorwein. Lorwein brought suit in the Wash- until after the confirmation. This peculiar ington circuit court in chancery, at the fall situation was brought about in the following term, 1898, against Jones, Nugent, and

manner, as explained in the testimony: LorHaupman, to recover on the notes and sub- wein was originally represented in the suit ject the land to sale under the lien; and at commenced in 1898 by Messrs. J. V. & J. W. that term, having failed to get service on Walker, a firm of attorneys. The partnerJones, be (Lorwein) recovered a personal ship existing between these gentlemen was decree against Nugent and Haupman, as in- dissolved while the Lorwein suit was penddorsers, for the amount of the first three ing, and in the division of the firm's busiof the notes, which were then due, and in- ness this case fell to Mr. J. W. Walker, and terest, and the cause was continued, as to the other member thereafter bad no connecthe other two notes, not then due. Nugent tion with it. The decree of May 25, 1900, and Haupman stayed the decree, and the was procured by J. W. Walker, who was same was subsequently paid, and the record absent from the county during the remainsatisfied. The payment was made for Haup- der of the term of the court. Mr. Gregg, man by the surety on the stay bond, and the the attorney for appellant, had no informathree notes were surrendered to Haupman, tion of the decree of May 25, 1900, and, who delivered them to appellant Bank of believing that Mr. J. V. Walker was still Fayetteville as collateral security for a debt acting for Lorwein, submitted the draft of owing by him to the bank. After the ma- the decree of July 31, 1900, to him for apturity of the two last notes, Lorwein caused proval; and Mr. Walker, as an act of coursunimons to be served on Jones, Nugent, and tesy to Mr. Gregg and his former partner, Haupman (whether in the suit which had

assumed the authority of approving a decree been continued, or a new suit brought in the about which, so far as the record shows, same court, the record does not clearly dis- he had no information as to any controclose); and at the April term, 1900, of that

versy. The chancellor dismissed the comcourt, on May 25, 1900, a decree was ren

plaint in this suit for want of equity, and dered in favor of Lorwein against Jones, the plaintiff appealed. Nugent, and Haupman for $246.90, the amount of the two last notes and interest,

L. W. Gregg, for appellant. J. Wythe a lien was declared on the land and the

Walker, for appellees. commissioner of the court ordered to sell the land to satisfy the decree. On July 31, McCULLOCH, J. (after stating the facts). 1960, during the same term, a decree, upon There is no equity in the complaint, and the the intervention of appellant, was entered, same was properly dismissed. Appellant's

The New Jersey court in the case last cited said: “The right of subrogation cannot be enforced until the whole debt is paid, and until the creditor be wholly satisfied there ought and can be no interference with his rights or his securities, which might, even by bare possibility, prejudice or embarrass him in any way in the collection of the residue of his claim." Appellant received the notes from Haupman after maturity, and charged with notice of the decree rendered upon them. It succeeded only to the rights of Haupman, and can assert no greater rights. It appears that the land was fairly sold by the coinmissioner, and the sale was confirmed by the court, and it brought no more than enough to satisfy Lorwein's decree for the amount of the two notes held by him, interest, and costs of suit. Therefore appellant shows no right to any of the fund.

Decree affirmed.

contention is that the decree of July 31, 1900, during the same term of court, operated as a vacation of the former decree, and that, as no preference was given in that decree, the bank must be permitted to share in the proceeds of sale. Conceding that such was the effect of the last decree, it does not follow that appellant is entitled to the relief asked. It has come into a court of equity, asking the exercise of the peculiar powers of that court to grant affirmative relief, and it must do equity. In other words, it must stand, not upon the letter of the decree in its favor which was entered through a mistake, but upon the merit or lack of merit in the cause of action upon which the decree was entered. Was appellant entitled, upon its intervention in the original suit, to a decree declaring a lien in its favor, sharing equally with Lorwein in the sale of the land? That is the question presented. Learned counsel for appellant contends that the bank was entitled to so share under the ruling of this court in Penzel y. Brookmire, 51 Ark. 105, 10 S. W. 15, 14 Am. St. Rep. 23, where, in a controversy between the several holders of separate notes secured by the same mortgage, whether the notes be transferred before or after maturity, and regardless of the order of maturity, they “stand æquali jure, and consequently are entitled to participate ratably in the fund derived from the security, if there be not enough to pay all.” The facts are essentially different here, however, and a different rule must prevail. The three notes now held by appellant were merged in the decree of 1898 in favor of Lorwein against Nugent and Haupman, and the latter, though by payment of the decree he became subrogated, as against the maker and prior indorsers of the notes, to the rights of Lorwein, cannot assert those rights against Lorwein's lien for the other two notes, because he is liable to Lorwein, as indorser, for payment of all the notes. So long as the other two notes and the lien on the land for payment thereof remain unsatisfied, and his liability to Lorwein continues, he is postponed in the assertion of a lien on the land, and cannot claim the right to participate in the proceeds of sale. А surety or indorser on a note, who has paid only a part of the debt for which he is liable, leaving the balance unpaid, cannot claim by subrogation the right to participate in the securities held for the payment of the debt. He must first pay the whole debt. McConnell v. Beattie, 34 Ark. 113; Schoonover v. Allen, 40 Ark. 132; Sheldon on Subrogation, $ 127; Columbia Finance Co. v. Kentucky Union Ry. Co., 60 Fed. 794, 9 C. C. A. 264; Magee v. Leggett, 48 Miss. 139; Gannett v. Blodgett, 39 N. H. 150; Child v. New York, etc., Ry Co., 129 Mass. 170; Bartholomew v. Salina First Nat. Bank, 57 Kan. 594, 47 Pac. 519; New Jersey Midland Ry. Co. v. Wortendyke, 27 N. J. Eq. 658.

DAVIS et al. v. TRIMBLE et al.* (Supreme Court of Arkansas. June 17, 1903.) ATTORNEYS-IMPLIED AGREEMENT TO PAY FOR SERVICES.

Where attorneys were employed by W., the principal stockholder and manager of a railroad, to defend a suit brought against it and him, contract for payment of their services by directors of the road and trustees of an estate holding a large amount of the bonds of the road cannot be implied from their taking an interest in the suit attending the trial, claim. ing exemption as parties in interest from the rule excluding witnesses from the courtroom, paying the fees of the stenographer for services, and assuring the attorneys after the trial that they would be paid.

(Ed. Note.–For cases in point, see vol. 5, Cent. Dig. Attorney and Client, &$ 323, 324.]

Hill, C. J., and Wood, J., dissenting.

Appeal from Circuit Court, Faulkner County; Sam Frauenthal, Special Judge.

Action by Thomas C. Trimble and others against R. W. Worthen and others. Judg. ment for plaintiffs, and certain defendants. appeal. Reversed.

Ratcliffe & Fletcher, for appellants. Trimble & Robinson, for appellees.

McOULLOCH, J. Appellees, Thos. C. Trimble, J. M. McClintock, and Eugene Lankford, brought this suit against R. W. Worthen, Oscar Davis, Zeb Ward, Jr., Geo. R. Brown, and W. B. Worthen to recover $2,500 alleged to be owing them by the defendants for services as attorneys at law rendered for the defendants in an action in the Prairie circuit court wherein S. L. Harr was plaintiff and said R. W. Worthen and the Mississippi & Little Rock Railroad Company were defendants. R. W. Worthen failed to answer, and judgment was rendered by de

*Rehearing denied July 15, 1905.

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