Fowble v. Phoenix Insurance

ELLISON, J. This is an action on a fire insurance policy. The policy contained the following arbitration clause: “In the event of disagreement as to the amount of loss the same shall, as above provided, be ascertained by two competent and disinterested appraisers; the insured and this company each selecting one, and the two so chosen shall first select a competent and disinterested umpire; the appraisers together shall then estimate and appraise the loss, stating separately sound value and damage, and, failing to agree, shall submit their differences to the umpire; and the award in writing of any two shall determine the amount of such loss; the parties thereto shall pay the appraisers respectively selected by them and shall bear equally the expense of the appraisal and umpire.” At the close of the evidence the trial court concluding that plaintiff had not complied with that provision, determined that the suit had been prematurely brought and gave a peremptory instruction to the jury to find for the defendant. Plaintiff’s first point is that the parties had not disagreed as to the amount of the loss and hence there was [530] no necessity for arbitration. We think the point not well made. Tbe parties' are concluded on that score by tbeir action, in writing, whereby they stated their disagreement and each selected one arbitrator. This was fully as much evidence of disagreement as should be asked. It was much more than appeared in Dautel v. Ins. Co., 65 Mo. App. 50; Murphy v. Ins. Co., 61 Mo. App. 329; Brock v. Ins. Co., 102 Mich. 583. The difficulty between the parties arises over their attempted agreement over an umpire as provided by the policy; Their endeavor covered quite a period of time and involved much correspondence, taken part in by plaintiff’s husband, her attorney and the arbitrator selected by her upon one side, and defendant’s adjuster and the arbitrator which he selected, upon the other side. There was evidence tending to show that the mistake made by the arbitrators selected in their attempt to select a third was that, each showed himself too much a partisan and too little an arbitrator. In other words, each showed himself, in some degree, too loyal to the cause of the side which selected him, in apparently wanting an advantage. Their duty was to find the true aStoount of the loss, without reference to exaggerated appreciation upon one side, or depreciation upon the other. The mistake made by the court, in the condition of the evidence, was in declaring, as a matter of law, that the failure to arbitrate was the fault of the plaintiff. As the case stood when the demurrer was given, to hold that the plaintiff was at fault in the failure of arbitration was tantamount to holding as a matter of law that she was to blame for the failure to agree upon an umpire; for it was the failure of that effort which prevented an arbitration. The law is well-settled that if the failure to arbitrate arises from the fault of the insurer, arbitration is not a necessary prerequisite of a right to sue. McCullough v. Ins. Co., 113 Mo. 606; Niagara Ins. Co. v. Bishop, 154 Ill. 9. "We have gone over the evidence and find that it is [531] not conclusive of the claim of either disputant. So it became an issue for the jury and as such it should have been submitted along with whatever other issues there may be in the case. Uhrig v. Ins. Co., 101 N. Y. 362; Bishop v. Ins. Co., 130 N. Y. 488; Caledonian Ins. Co. v. Traub, 83 Md. 524. The nature of the evidence, which in essential particulars may be the same on retrial, makes it appropriate to state our view of the law governing the selection of arbitrators. It is true that the parties having disagreed as to the amount of the loss, it became incumbent upon plaintiff to secure, or to make an effort to secure, an arbitration. McNees v. Ins. Co., 69 Mo. App. 232; s. c., 61 Mo. App. 335; Murphy v. Ins. Co., 61 Mo. App. 323. But if an insured makes an effort and fails through the fault of the insurer, we have already seen he may bring his suit without having had an arbitration. What is proper conduct by the arbitrators in selecting an umpire? Neither should endeavor to have a prejudiced, dishonest or incompetent person selected. Neither should insist on selecting parties living at an unreasonable distance from the scene of the loss when competent parties can be found near by. McCullough v. Ins. Co., 113 Mo. 606; Brock v. Ins. Co., 102 Mich. 583; Chapman v. Ins. Co., 89 Wis. 572; Hickerson v. Ins. Co., 96 Tenn. 193; Western Assurance Co. v. Hall, 120 Ala. 547. The trend of these authorities is to establish the proposition that if. the arbitrator selected by the assured suggests the names of worthy, competent and unprejudiced persons residing near the scene of the loss for umpire, and the other arbitrator capriciously refuses to accept any of them, refusing to name any one on his part in the vicinity of the loss, and insists on some one at a distance, the assured may begin his action without arbitration. There may be instances in small communities where proper arbitrators could not be found, in which case it would, of course, be necessary to seek them elsewhere. [532] It will be noticed from what we have just written, that we make the party responsible for the arbitrator selected by him for the action he takes in selecting an umpire. "While the arbitrator is not an agent for the party selecting him, yet when it is the improper act or conduct of such arbitrator which prevents the selection of an umpire, the consequence of the failure should be visited upon him who selected such arbitrator. Niagara Ins. Co. v. Bishop, 154 Ill. 9; Braddy v. Ins. Co., 115 N. C. 354. The judgment is reversed and the cause remanded. All concur.