Travelers Insurance v. Pierce Engine Co.

Wisconsin Supreme Court
Travelers Insurance v. Pierce Engine Co., 141 Wis. 103 (Wis. 1909)
123 N.W. 643; 1909 Wisc. LEXIS 212
Dodge

Travelers Insurance v. Pierce Engine Co.

Opinion of the Court

Dodge, T.

There is but one substantially disputed material question on this appeal, and that is whether the agreement was a submission of the question of the amount due, involving law and fact, or a mere submission to the auditor to mathematically compute the amount of the wages shown by tire books to have been paid to the employees upon whose pay roll the contract of insurance required the premium to be based. The agreement may perhaps he ambiguous. The word “audit” is 90mctim.es restricted to a mere mathematical process, hut generally is extended to include the investigation, *107weighing of evidence, and deciding whether items should or should not he included. People ex rel. Ramsdale v. Orleans Co. 16 Misc. 213, 38 N. Y. Supp. 890; People ex rel. Hamilton v. Jefferson, 35 App. Div. 239, 54 N. Y. Supp. 782; People ex rel. Brown v. Board, 52 N. Y. 224; People ex rel. Myers v. Barnes, 114 N. Y. 317, 20 N. E. 609, 21 N. E. 739; Territory ex rel. Donzelmann v. Grant, 3 Wyo. 241, 21 Pac. 693; In re Clark, 5 Fed. Cas. 853. Here it is obviously used in a sense to enable the auditor to ascertain the final amount which the defendant owed, which indicates the broader meaning. However, this agreement was made in the light of various surrounding circumstances, such as the suit already commenced, negotiations between the parties wherein the plaintiff’s contention as to the proper construction of the application and policy had been advanced, and many other facts proper to be considered in ascertaining the meaning of the parties. Erom these as well the trial court reached a conclusion in favor of such broader construction. As that conclusion, in some measure at least, depends upon somewhat confused facts and upon the inferences of intention to be drawn therefrom, it is entitled to the weight of the ordinary finding of fact. Vilas v. Bundy, 106 Wis. 168, 81 N. W. 812; Chicago, St. P., M. & O. R. Co. v. C., M. & St. P. R. Co. 113 Wis. 161, 170, 87 N. W. 1085, 89 N. W. 180. We do not think that conclusion is antagonized by any necessary construction of the-words of the agreement, and we do not find any such clear preponderance of evidence as would justify us in disturbing a finding of fact. It must therefore stand as the basis upon which the rights of the parties must he determined.

The scope of the submission to arbitration being as we have stated, the province and jurisdiction of the arbitrator was as broad as that of a. court and his conclusion within that jurisdiction as final upon the parties. His duty was, as counsel for defendant contends, to malee a proper audit; but such proper audit was merely to ascertain the facts and decide on *108the rights of the parties honestly and by application of his best judgment. It was not necessarily to make a correct audit or to decide unerringly, according to the view of. the court in which his determination is sought to he enforced. Chandos v. Am. F. Ins. Co. 84 Wis. 184, 54 N. W. 390; McAlpine v. Trustees, 101 Wis. 468, 78 N. W. 173; John Pritzlaff H. Co. v. Berghoefer, 103 Wis. 359, 364, 79 N. W. 564; Coorsen v. Ziehl, 103 Wis. 381, 384, 79 N. W. 562; Consolidated W. P. Co. v. Nash, 109 Wis. 490, 85 N. W. 485; Eau Claire v. Eau Claire W. Co. 137 Wis. 517, 119 N. W. 555. There is no allegation in the answer and no proof offered that the arbitrator was guilty of any fraudulent or arbitrary action or fell into mistake in any other sense than that it is claimed he decided erroneously as to certain contentions urged by defendant. But such a submission to arbitration as we have determined this to be confers just that jurisdiction to decide erroneously, if honestly, and to bind the parties to such determination by force of their agreement to be so bound. There is therefore nothing shown to warrant excusing defendant from performing its plain agreement to pay the amount found due by the auditor.

Various somewhat technical contentions are presented by the appellant, most of which disappear in the light of our conclusion as to the scope of the submission. Some of them are perhaps independent of it. One of these is that the dismissal -of the first action was a condition precedent to the efficacy of the arbitration agreement, and that no proof of such dismissal has been offered. This contention is somewhat inconsistent with what is said elsewhere in appellant’s brief, to the effect that an agreement to submit to arbitration the matters involved in a pending action ipso facto■ dismisses that action. This rule seems to be well' established and of itself defeats the -contention. Muckey v. Pierce, 3 Wis. 307; Jones v. Thomas, 120 Wis. 274, 278, 97 N. W. 950. But it must also be noted that the contract itself, on its face at least, amounts to an ad*109mission of the dismissal of the action. It recites that the agreement is made in consideration of such dismissal, not of an agreement to dismiss.

Eurther it is argued that the arbitration agreement is unilateral and without consideration. Apart from the executed consideration of the dismissal of the pending suit, we have no douht that the plaintiff, after having availed itself of the agreement by sending its auditor to examine defendant’s-books, had accepted the same and became bound to such acts on its part as would give it full effect, and that if the auditor’s-report had been a less sum, or even no sum at all, it would have been final upon the plaintiff. Excelsior W. Co. v. Messinger, 116 Wis. 549, 93 N. W. 459; W. G. Taylor Co. v. Bannerman, 120 Wis. 189, 192, 97 N. W. 918.

A complaint that no notice was required by the agreement or was in fact given of any hearing by the arbitrator is met' by the fact that -the defendant was given full opportunity to-be present at all material times and availed itself of such opportunity. It cannot complain that the other party failed of notice.

The fact that the arbitrator was an employee of plaintiff, is not a legitimate objection, since both parties knew the fact and had a right to waive objection thereto and accept such-person as arbitrator. Fox v. Hazelton, 10 Pick. 275; Strong v. Strong, 9 Cush. 560, 573.

We find no other error assigned which seems worthy of mention or discussion, or which would justify reversal.

By the Court. — Judgment affirmed.

Reference

Full Case Name
Travelers Insurance Company v. Pierce Engine Company
Cited By
23 cases
Status
Published
Syllabus
Contracts: Construction: “Audit:” Appeal: Findings of fact: Arbitrar tion and award: Scope: Conclusiveness: Effect on pending action: Evidence: Admissions: Arbitration agreement, when binding: Acceptance: Notice of hearings: Waiver of objection to arbitrator. .1. The., word “audit,” though sometimes restricted to a mere mathematical process, generally includes investigation, weighing o£ evidence, and deciding whether items should or should not be> included. 2. In ascertaining the scope of a submission to arbitration under unambiguous agreement therefor, the negotiations betw¿en the.' parties and circumstances under which the agreement was-made may he considered. 3. Where the proper construction of an ambiguous contract depends in a measure upon somewhat confused facts and upon the inferences of intention to he drawn therefrom, the conclusion of the trial court as to such construction is entitled to the weight, of the ordinary finding of fact'. 4. Where by an arbitration agreement the parties submit to an auditor the question of the amount due to one of them, involving matters of fact and of law, the jurisdiction of such arbitrator is-as broad as that of a court, and his honest conclusion, even, though erroneous, within that jurisdiction is as binding upon, the parties. 5. An agreement to submit to arbitration matters involved in a-pending action ipso facto dismisses that action. 6. 'A recital in an arbitration agreement that it is made in consideration of the dismissal of an action amounts to an admission of such dismissal. 7. Where by an arbitration agreement the amount due plaintiff is to be determined by plaintiff’s auditor after inspecting and auditing defendant’s books, the plaintiff by sending its auditor to examine the books accepts the agreement and becomes bound to do such acts as will give it full effect; and defendant cannot thereafter object that the agreement is unilateral and without consideration. 8. Where a party to an arbitration agreement was given full opportunity to be present before the arbitrator at all material times and availed himself of such opportunity, he cannot thereafter complain that the agreement failed to provide for notice of ' hearings and that no notice was in fact given to him or to the other party. 9. That the arbitrator was an employee of one of the parties is not a legitimate objection to the award, where both parties knew that fact when they agreed upon him as arbitrator.