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.

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. The appraisers 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

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 witnesses 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 the 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 as 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.

The evidence satisfies the court that the appraiser selected by the insurance company called upon the umpire to settle the differences, and, finding him more difficult to agree with them, the appraiser then withdrew. There is some evidence that the withdrawal was under the direction of the adjuster, who learned of the situation of affairs. That is not important here, for it is thoroughly settled that an arbitration cannot be defeated, after it is properly submitted, by the withdrawal of one of the appraisers during the investigation. Ostrander on Fire Ins. § 291; Bradshaw v. Ins. Co., 137 N. Y. 137, 32 N. E. 1055.

Other questions are discussed as to the revocation of the arbitration by the withdrawal of the appraiser on account of the arbitrary action of the other appraiser, and other questions based on the theory of appellant that the appraiser acted without the scope of the submission and improperly. But the court is satisfied from the evidence that the appraiser's conduct was not within any of the grounds for impeaching the award; hence it is unnecessary to pursue the subject further. There was sufficient evidence to sustain the award as to the value, even if it was not an accurate valuation, it would not be open to attack unless so grossly erroneous as to indicate bad faith or other grounds to set aside the award. The judgment is affirmed.

PHOENIX INS. CO. v. STATE, to Use of SA-
LINE RIVER SHINGLE & LUM-
BER CO.

(Supreme Court of Arkansas. June 24, 1905.) 1. INSURANCE-POLICY-REFORMATION.

An insurance policy, which, because of mistake in its execution, does not conform to the real agreement of the parties, may be reformed in a court of equity.

[Ed. Note. For cases in point, see vol. 28, Cent. Dig. Insurance, §§ 266-270; vol. 42, Cent. Dig. Reformation of Instruments, § 69.] 2. SAME-EVIDENCE-SUFFICIENCY.

In a suit to reform a policy of fire insurance, evidence held to warrant a reformation thereof as to the name of the insured and the location of the subject-matter of the risk on the ground of mistake.

3. SAME-CANCELLATION-NOTICE.

The stipulation in a policy of fire insurance for cancellation on five days' notice to the assured is for the benefit of, and may be waived by, the assured.

4. SAME-AGENT-DUAL CAPACITY.

In a suit on a policy of fire insurance the proof showed that a previous agreement existed between the president of the insured corporation and an insurance agent that the corporation's property should be kept insured. No particular insurance company or companies were mentioned, and the corporation's president gave no concern to that matter. He made the insurance agent his agent for the purpose of selecting the company or companies, and, pursuant to the arrangement, the agent, without notice to the president, canceled a policy in one company and substituted therefor a policy in the defendant, and mailed it to the pres

ident of insured before the fire occurred. Held, that the agent, though the agent of the insurance companies, was made the agent of the insured for the purposes of procuring and canceling policies, and defendant's policy was in force.

Appeal from Cleveland Chancery Court; John M. Elliott, Chancellor.

Suit by the state, to the use of the Saline River Shingle & Lumber Company, against the Phoenix Insurance Company of Brooklyn. From a decree in favor of plaintiff, defendant appeals. Affirmed.

This is a suit brought in the chancery court by the state of Arkansas, for the use of the Saline River Shingle & Lumber Company, a domestic corporation, against the Phoenix Insurance Company of Brooklyn, a foreign insurance corporation doing business in the state, and the sureties on its bond, to reform a policy and to recover the amount thereof $2,000 and interest on account of loss by fire. Reformation of the policy is sought in two respects, viz.: First, that it was by mistake written to and in the name of W. S. Amis, the president of the Saline River Shingle & Lumber Company, and manager of its business, when it should have been written to and in the name of said corporation; second, that it was by mistake written "on a stock of lumber on his premises," when it should have been written "on a stock of 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 and lot of lumber at a switch sometimes called "Poole," on the St. Louis Southwestern Railroad. W. S. Amis was the president of the company, and the manager of its busiA. B. Banks, an insurance agent at Fordyce, Ark., and agent of appellant and other insurance companies, had previously insured the property of the lumber company at the instance of Mr. Amis, the manager. On or about April 10, 1902, Amis applied to Banks for insurance on the property of the lumber company-$2,500 on the mill and $2,000 on lumber in the shed-which Banks agreed to do, and in a day or two wrote the policies by mistake in the name of Amis, and, instead of writing the lumber policy on lumber in loading shed, wrote it "on a stock of lumber on the premises." This policy was written in the Greenwich Insurance Company, and both policies were mailed to Amis at Rison, Ark., where he resided. On April 21, 1902, Banks received instructions from the Greenwich Insurance Company to cancel the policy or increase the rate of premium to 10 per cent., and on that date he wrote and mailed a letter to Amis, informing him of the requirement of the Greenwich Company, and saying: "I am canceling the lumber policy and rewriting same in the Phoenix of Brooklyn, and shall send you policy at once." He wrote the policy on April 23, 1902, which is the one in controversy, carrying into it

ness.

the same mistakes hereinbefore set forth as to name of assured and description of property, and mailed it to Amis at Rison on that day. The lumber in the loading shed, shown to be of the value of $2,047, was destroyed by fire on the evening of April 23, 1902, at 7:30 or 8 o'clock. Mr. Amis testified that he received the policies of April 10th by mail, but did not discover the mistake therein until he received on April 22d, Mr. Banks' letter concerning cancellation of the Greenwich policy, and that he intended to go to Fordyce the next day (April 23d) to have the policies rewritten so as to correct the mistakes, but was unavoidably detained by other engagements; and that he received the Phoenix policy by mail on April 24th, the same having arrived at the postoffice at Rison the afternoon preceding. The defendant answered, denying all the allegations of the complaint, and pleading that the policy sued on was issued by the agent, Banks, without authority from the insured, and was not accepted by the insured until after the fire. The chancellor decreed a reformation of the policy and recovery of the amount thereof with interest, and the defendant appealed.

Alexander & Thompson, for appellant. W. S. Amis, Crawford & Gantt, and Taylor & Jones, for appellee.

McCULLOCH, J. (after stating the facts). An insurance policy, like any other contract, which by reason of mistake in its execution does not conform to the real agreement of the parties, may be reformed in a court of equity. Thompson v. Insurance Co., 136 U. S. 287, 10 Sup. Ct. 1019, 34 L. Ed. 408; Snell v. Insurance Co., 98 U. S. 85, 25 L. Ed. 52; Jamison v. State Insurance Co., 85 Iowa, 229, 52 N. W. 185. The proof fully warranted the decree of the court reforming the policy in the particulars specified. The testimony is undisputed that a mistake was made in writing the policy to and in the name of Amis instead of the lumber company, and in writing it on all the lumber instead of on the lumber in the loading shed. This disposes of the contention of appellant as to the coinsurance clause in the policy. Treating it as reformed so as to insure only the lumber in the shed, the insurance thereon was more than the percentage of value required in the policy, and the terms of this clause were complied with.

It is contended on behalf of appellant that because of the stipulation in the Greenwich

policy requiring five days to the assured before cancellation, that policy was not legally canceled, and that the substitution by the agent of the Phoenix policy was unauthorized. We cannot sanction this view. The stipulation for five days' notice of cancellation was made for the benefit of the assured, and could be waived by the assured. Southern Ins. Co. v. Williams, 62 Ark. 382, 35 S. W. 1101; Kirby v. Ins. Co., 13 Lea, 340; Buick v. Mechanic's Ins. Co., 103 Mich. 75, 61 N. W. 337. The policy was in fact canceled by the agent, and his act in so doing was ratified as soon as brought to the attention of the assured. The stipulation was a part of the Greenwich policy, and appellant had no interest therein or concern therewith. Appellant's agent issued a policy on the property in question, which was in force at the time of the fire. The agent wrote the assured: "I am canceling the lumber policy and rewriting same in the Phoenix of Brooklyn, and shall send you policy at once. * Please return the lumber policy in Greenwich at once." He mailed the policy to the assured before the fire, and same reached the post office at Rison, the home of Mr. Amis, before the fire, but was not taken from the office until the next day. Meanwhile the fire occurred. The proof shows that a previous agreement existed between Amis and Banks, the agent, that the property of the lumber company should be kept insured. No particular insurance company or companies were mentioned, and Amis gave no concern to that matter, He constituted Banks his agent for the purpose of selecting the company or companies, and, pursuant to this arrangement Banks, without notice to Amis, canceled the Greenwich policy and substituted therefor the Phoenix policy, and mailed it to Amis before the fire occurred. Banks, though the agent of the insurance companies, could be and was made the agent of the insured for those purposes. Ostrander on Insurance (2d Ed.) §§ 41, 42; Schauer v. Queen Ins. Co., 88 Wis. 561, 60 N. W. 994; Mich. Pipe Co. v. Mich., etc., Ins. Co., 92 Mich. 482, 52 N. W. 1070, 20 L. R. A. 277; Dibble v. Northern Ins. Co., 70 Mich. 1, 37 N. W. 704, 14 Am. St. Rep. 470; Arnfeld v. Guardian Ins. Co., 172 Pa. 605, 34 Atl. 580; Huggins, Croker & Cowdy Co. v. People's Ins. Co., 41 Mo. App. 530. We see no escape from the conclusion that the Phoenix policy was in force when the fire occurred, and that that company is liable for the loss. Decree affirmed.

BANK OF FAYETTEVILLE v. LORWEIN et al. (Supreme Court of Arkansas. July 1, 1905.) SUBROGATION-RIGHTS OF INDORSEE PARTIAL PAYMENT OF DEBT.

An indorser of five vendor's lien notes paid three of them, on which judgment had been rendered against him and another indorser, and then pledged the notes to intervener as security for a loan. Held, that the intervener was not subrogated to the right to participate in the proceeds of the sale of the land for the payment of the other two notes, the indorser not having paid the whole debt.

[Ed. Note. For cases in point, see vol. 44, Cent. Dig. Subrogation, §§ 52, 54.1

Appeal from Washington Chancery Court; T. H. Humphreys, Chancellor.

Action by George Lorwein against one Jones and others, in which the Bank of Fayetteville intervened. From a judgment denying intervener the relief demanded it appeals. Affirmed.

On January 19, 1895, Nugent sold and conveyed to Jones a tract of land in Washington county for $500, payable in five equal annual installments, evidenced by five promissory notes, bearing interest. The vendor's lien was expressly reserved in the face of the deed. Nugent sold, indorsed, and delivered the notes before maturity to Haupman, who in turn sold, indorsed, and delivered them before maturity to appellee Lorwein. Lorwein brought suit in the Washington circuit court in chancery, at the fall term, 1898, against Jones, Nugent, and Haupman, to recover on the notes and subject the land to sale under the lien; and at that term, having failed to get service on Jones, he (Lorwein) recovered a personal decree against Nugent and Haupman, as indorsers, for the amount of the first three of the notes, which were then due, and interest, and the cause was continued, as to the other two notes, not then due. Nugent and Haupman stayed the decree, and the same was subsequently paid, and the record satisfied. The payment was made for Haupman by the surety on the stay bond, and the three notes were surrendered to Haupman, who delivered them to appellant Bank of Fayetteville as collateral security for a debt owing by him to the bank. After the maturity of the two last notes, Lorwein caused summons to be served on Jones, Nugent, and Haupman (whether in the suit which had been continued, or a new suit brought in the same court, the record does not clearly disclose); and at the April term, 1900, of that court, on May 25, 1900, a decree was rendered in favor of Lorwein against Jones, Nugent, and Haupman for $246.90, the amount of the two last notes and interest, a lien was declared on the land and the commissioner of the court ordered to sell the land to satisfy the decree. On July 31, 1900, during the same term, a decree, upon the intervention of appellant, was entered,

without reference to the former decree, in favor of Lorwein for the two notes and interest, and appellant for $326.25, the amount of the first three notes and interest, which had been embraced in the satisfied decree of 1898, and the commissioner was ordered to sell the land to pay both debts; no preference being provided for in the decree. The land was in 1901 duly advertised and sold by the commissioner under the decree of May 25, 1900, rendered in favor of Lorwein alone, and was purchased by Lorwein for $250, who gave his note for the amount, in accordance with the terms of sale, with one Brown as surety. At a subsequent term the sale was by the commissioner reported to the court and confirmed, and a deed to Lorwein duly executed and delivered, and the note surrendered to Brown, the surety. Lorwein subsequently sold and conveyed the land to appellee Hall. Appellant commenced the present suit against Lorwein, Brown, and Hall, asserting a right, under the decree of July 31, 1900, to participate pro rata in the distribution of the proceeds of sale of the land, and asking a decree in its favor to that effect, and a lien on the land. It is shown by testimony that appellant's attorney had no information of the decree of May 25, 1900, and the sale thereunder, until after the confirmation of the sale to Lorwein, and that neither Lorwein nor his attorney had any information of the decree of July 31, 1900, until after the confirmation. This peculiar situation was brought about in the following manner, as explained in the testimony: Lorwein was originally represented in the suit commenced in 1898 by Messrs. J. V. & J. W. Walker, a firm of attorneys. The partnership existing between these gentlemen was dissolved while the Lorwein suit was pending, and in the division of the firm's business this case fell to Mr. J. W. Walker, and the other member thereafter had no connection with it. The decree of May 25, 1900, was procured by J. W. Walker, who was absent from the county during the remainder of the term of the court. Mr. Gregg, the attorney for appellant, had no information of the decree of May 25, 1900, and, believing that Mr. J. V. Walker was still acting for Lorwein, submitted the draft of the decree of July 31, 1900, to him for approval; and Mr. Walker, as an act of courtesy to Mr. Gregg and his former partner, assumed the authority of approving a decree about which, so far as the record shows, he had no information as to any controversy. The chancellor dismissed the complaint in this suit for want of equity, and the plaintiff appealed.

L. W. Gregg, for appellant. J. Wythe Walker, for appellees.

MCCULLOCH, J. (after stating the facts). There is no equity in the complaint, and the same was properly dismissed. Appellant's

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 v. 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. Α 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.

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 commissioner, 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.

DAVIS et al. v. TRIMBLE et al.* (Supreme Court of Arkansas. June 17, 1905.) 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, claiming 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. Judgment for plaintiffs, and certain defendants appeal. Reversed.

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

MCCULLOCH, 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.