Hyperlawhypertext legal database Brink v. New Amsterdam Fire Insurance 28 N.Y. Super. Ct. 104

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Brink v. New Amsterdam Fire Insurance

28 N.Y. Super. Ct. 104 5 Rob. 104 Court N.Y. Super. Ct. Decision date 1867-05-14 English

Contents

Majority

p. 104
Charles Brink & Otto Mehlen, plaintiffs and respondents, vs. The New Amsterdam Fire Insurance Company, defendants and appellants.

Headnote

1. A partnership between the survivor of a prior firm and a third person cannot be established by mere proof of the death of the other member of such firm, and an agreement between him and his partner therein, that, upon his death, such third person should become a partner in such concern, where no new partnership agreement was entered into with such third person, and the capital and every thing belonging to the old firm remained the same. Neither of the supposed members of such new partnership could be made liable, as partners, to each other, or to third persons, on such evidence alone.
2. In case of a residence abroad of one member of a firm, he is bound, by a submission by the resident partner thereof, to appraisers, of the question of damages to property of such firm by fire, under a condition contained in a policy of insurance, providing for such submission, and also by the appraisement. Such a submission and appraisement are not an arbitration and award, as no action can be maintained upon them alone. The action must be brought on the policy of insurance, and such appraisement is only the determination of an incidental fact.
3. Even if such appraisement were not binding on the absent partner, it is admissible against the resident partner as to his share of the damage
(Before Robertson, Ch. J. and Garvin, J.)
Heard November 12, 1866;
decided May 14, 1867.
p. 105
This was an action to recover the amount of damage by fire to merchandise in a warehouse in New York, either the property of the plaintiffs, or held by them in trust or on commission, or not delivered by them, although sold. It was brought on a policy of insurance executed by the defendants, whereby they agreed to insure “Brink & Mehlen” against loss of such merchandise by fire for three months, (from April 15, 1865, to July 15, following,) and to make good such loss, not exceeding $12,000, to be estimated on the cash value of such goods, and pay the same within sixty days after notice of such fire and proof of such loss, according to certain conditions' annexed to such policy. The whole of such policy was declared therein to be made and accepted in reference to the terms and conditions therein contained and thereto annexed, which were declared to be part of such contract.
One of the conditions annexed to such policy (11th) declared that, “ in case any difference should arise concerning the amount of any loss or damage, the matter, at the written request of either party,” should “be submitted to the judgment of disinterested arbitrators, mutually chosen, whose award ” should “ be binding on the parties as to such amount, but’’should not decide the liability of the company under such policy. A prior condition, (9th,) also annexed, contained a similar provision as to partial damage to goods, wherein the persons to whom the valuation of the goods and their damage is submitted, are termed “ appraisers,” and their decision an “ appraisal.” The loss is declared therein, among other things, not to be payable, unless the claimant permitted such appraisal. But no mode of submitting such questions, or appointing such arbitrators or appraisers, or in which they may arrive at a decision, is prescribed in such policy.
Some cigars and chamomile flowers, part of the merchandise insured, were injured in consequence of a fire during the running of such policy.
The complaint, after sétting out the making of the
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policy, the copartnership of the plaintiffs, under -the name of Brink & Mehlen, the destruction by the peril insured against of the merchandise in question, the amount of the loss of the plaintiffs thereby, the performance by them of all the conditions of such policy, (including their notice of loss and proof thereof properly certified,) and a demand of payment, asked, as part of the relief sought, payment of a certain sum, which was equal to the amount of damages alleged.
The answer, put in issue every statement in the complaint not admitted therein, alleging that the merchandise mentioned in the complaint was not destroyed, but only par- . tially injured by the fire in question. It further alleged that a dispute having arisen between the parties as to the amount of loss to the plaintiffs by damage to the cigars in question, they entered into and signed a written agreement, in June, 1865, wherein, such policy of insurance, fire, damage thereby to such cigars, inability to agree upon the amount of such damages, and an agreement to submit such • matter to arbitration, were recited, and whereby, for a sufficient consideration, they agreed that the damages to such cigars, estimated upon their cash value, should be ascertained and appraised by two specified persoihs (Messrs. Deen and Kappes) and by a third person to decide between them in case of their disagreement, to be appointed by them, in writing. “ The decision, appraisement and valuation, in writing, of any two of whom was to be “ final, conclusive and binding ” upon .the parties. It averred that such agreement fully and fairly embodied and contained a previous understanding between the parties, and that the plaintiffs fully knew and understood the contents and effect thereof before signing, and were not induced to sign it by means of any statements or representations made by the defendants, or any deceitful means, practices or representations whatever.
The answer further alleged, that the persons so named
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in such agreement (Been and Kappes) differed after notifying the parties of the time and place of their proceeding, and attempting to proceed in the matter submitted, and thereupon, in June, 1865, appointed, in writing, a third person (Mr. Chichester) to decide any differences of opinion between them as to the damages sustained by the plaintiffs on such cigars. Such three persons forthwith notified the parties of a time and place for proceeding upon the matter so submitted, and were attended at that time by the plaintiffs, and proceeded on such matters; and two of them (Been and Chichester) made .a decision, appraisement and valuation in writing, signed by them, of the matters so submitted to them, a copy whereof was annexed to the answer. By which they decided “ that the damages to the said cigars, by reason of said fire, estimated upon the cash value thereof at the time of such fire, was ” a certain sum, ($5679.40,) and they appraised and valued such damages to such cigars, by reason of such fire, at that sum. _
Such answer further alleged, that the parties agreed upon the amount of damage to the other merchandise injured by fire (chamomile flowers,) as being a certain sum, ($665.30;) and that the proportion of the defendants of the loss on all the merchandise, did not exceed a certain other sum, ($3806.82,) which they have been, and are always, ready and willing to pay. Such answer also set up objections to the proofs of loss furnished; claimed the action to be prematurely brought, and denied that any thing was due at the beginning of the action. The matters contained in such answer were set forth in numbered paragraphs, but it did not claim them as constituting either a defense or a counterclaim, and no demurrer or reply to it.was ever put in.
The complaint contained many allegations respecting some paper or agreement, which, it averred, one of the plaintiffs (Brink) signed, the date, contents, or purport whereof, were not set forth. It alleged that the defendants, for the purpose and with the intent of deceiving and defrauding
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the plaintiffs, represented, that such paper was ah agreement to submit to arbitration the question as to the value of each of the different brands of said cigars only; and that the quantities of each of such brands, contained in a previous statement thereof made by the plaintiffs, were to be deemed and taken as correct, and should form the basis for the calculation of the amount of damages, in such a manner that when the price of each of such brands was ascertained by such arbitrators, the amount of damages was to be ascertained by multiplying such quantity by such respective prices; that such representations were the only inducement, and formed the only consideration of the plaintiffs entering into such agreement; that the plaintiff Brink relied upon such representations, and was deceived and defrauded thereby; that he did not understand the English language, and believed that such agreement only submitted the question of the value of “each brand” of cigars, and no copy of such paper was furnished to the plaintiffs; that they were not correctly informed of, and did not know, the contents thereof, until an alleged copy of-the decision of the arbitrators was served upon them, a copy whereof is annexed to the complaint, which is also a copy of the award set out in the answer.
The complaint further alleged that the plaintiff Brink, relying upon such representations, did, for the purpose of determining the value of each brand of cigars appoint an arbitrator, and that such arbitrator believing himself only appointed to ascertain the value of the-different brands of cigars, consented to the appointment of a third arbitrator, on that understanding only, and therefore, refused to concur in the award.
The complaint alleged that such award was wrong, because no proof of the amount of cigars was given, the arbitrators had no means of ascertaining the amount, the plaintiffs had notice of the arbitration, and-one of them (Mehlen) did not consent thereto.- It, therefore, prayed that such agreement
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and award might he set aside as fraudulent and void, and surrendered and canceled.
The answer denied that either the defendants, or any of their officers made the' representations set forth in the complaint.
Upon the trial, evidence was introduced on the part of the plaintiffs, without objection, of representations by officers of the defendants, as to the submission set out in the answer, before it was signed, the ignorance of the plaintiff Brink of the English language, and of the contents of such submission, the appointment of an umpire and the proceedings of such arbitrators and umpire. The execution of such submission, appointment, and the award mentioned in the answer, was also proved. But the same being offered in evidence by the counsel for thé defendants, was excluded on the objection of the counsel for the plaintiffs, and such exclusion was excepted to by the former. Evidence was also given.of the loss of the plaintiffs.
The defendants’ counsel requested the court to submit the question o£ the partnership of the plaintiffs to the jury, which was denied, and an exception taken to such denial; also to instruct them that there was no partnership between the plaintiffs, which was also refused, and an exception taken; also, that the submission of the plaintiff Brink was valid, as against him, which was also refused, and an exception taken.
The evidence in regard to the partnership and other matters, appears in the opinion of the court.
The jury found a verdict for the plaintiffs for nearly $9000,- ($8866.25,) on which a judgment was entered, from which the defendants appealed. A motion for a new trial having been made and denied, an appeal was taken from the order denying it, and both appeals were heard together.
L. B. Marsh, for the appellants, defendants.
I. The action is one to set aside the submission and award
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as fraudulent, and to have the same delivered up to be canceled, and thereupon to recover on the policy (not the amount awarded but) the amount of the actual loss, as .claimed by the plaintiffs. The action was, therefore, an equitable action, and should have been tried by a judge sitting in equity, and there was no jurisdiction to try the same before a jury. The trial was, therefore, a mistrial.
H. The judge erred, in excluding evidence, on the trial, of the submission to arbitration and the appointment of an ■umpire, and of the two awards made thereupon.
I. A copy of one of these awards was annexed to the complaint, which set forth the submission and award, charging fraud therein. Such submission and award were also set up in the answer.
2. On the trial the plaintiff (Brink) himself, testified, that he signed the submission without authority from his partner; and also that the submission, which he called an agreement, had been changed since he signed it, pointing out the alleged alterations from the paper itself, put into his hands for that purpose by the plaintiffs’ counsel.
3. The plaintiff also stated the negotiation between himself and the defendants as to the arbitration, and as to the reason why he did not understand it, to wit, that the witness did not understand English well, and that (Mr. Manners) the defendants’ president, represented it to be an agreement to appoint arbitrators to fix the price of the cigars merely, and not the extent of the loss. The witness then states that the plaintiffs did appoint an arbitrator, but never received any money under the arbitration.
4. Yet, when we offered the submission and awards in evidence, one of which was the very paper annexed to the plaintiffs' complaint, the court excluded the same, and would not allow them to be read to the jury.
IH. The judge erred in refusing to submit to the .jury the only question presented by the pleadings, and in issue between the parties.
1. The question being whether the submission and award
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were obtained by -fraud on the defendants’ part, or under any misapprehension on the plaintiffs’, evidence on this question, on both sides, was introduced, (a.) The plaintiff, himself, testified that Mr. Manners represented the arbitration was to be only as to price, and that he, the plaintiff Brink, did not understand the English language well. .(5.) The defendants proved, by the cross-examination of'Mr. Brink, as we claim, that he understood the English language well. • At all events, we proved enough to go to the jury on that question, and we also proved by Mr. Manners, thát there was no misrepresentation or misapprehension in relation to the submission, nor any alteration in it after it was signed by Mr. Brink.
2. But when we asked the court to submit to the jury the question whether this submission to arbitration was obtained in the manner claimed in the complaint, the court declined, although that was- the real question presented as an issue by the pleadings.
IV. No action could be maintained on this policy in favor of the plaintiffs. They were not the parties entitled to sue thereon. They were bound to make out a joint cause of action, which they did not do.
1. Brink and Peter Mehlen were in partnership, in this same business, and at this same place, and Peter Mehlen died on the 27th February, 1865. This, of course, dissolved the partnership of Brink Mehlen. Peter left a father, a sister and two brothers, one of whom was the plaintiff, Otto. Of course, then, the father of Peter inherited his interest in the firm, and thereupon he and Brink became, and were the owners of the property, though Brink, as survivor, had a right to close up the affairs of the firm.
2. There is no proof that the plaintiff, Otto Mehlen, had any interest in this property. Otto Mehlen was never in this country until the 1st of October, 1865, which was after the fire and after the policy, in question would have expired by its own limitation; and the only evidence to show that he had any interest in these goods was the statement of
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Brink that it was understood between him and Peter, that in case of the death of a partner, his brother should succeed. There, is no evidence that this was carried out by an overt act until Otto Mehlen came here in October, 1865, after the fire; nor, indeed, then. The court should either have dis- ' missed the complaint for that reason, or, at all events, have submitted the question of the plaintiffs’ partnership in these goods to the jury, as we requested.
3. There was evidence on the part of the defense show- ■ ing, or, at all events, tending to show, that Otto Mehlen was not the partner of Brink, nor interested in these goods. ■
V. If the court properly excluded the submission and award, and the proceedings thereon, on the ground that the submission was invalid, because signed only by one partner, and that one partnerhas no authority to sign a submission to arbitration, we have several answers.
1. This is not a ground of objection to the submission and award set up in the complaint; the only ground of objection there taken being, that the submission was procured from the plaintiff Brink by fraud, and was not fully understood by him. The courts will not allow a party to plead one thing and prove another, or avail themselves of another, if incidentally proved. The plaintiff must recover as well on what he alleges as on what he proves. (Brazill v. Isham, 12 N. Y. Rep. 9 . McKyring v. Bull, 16 id. 297. Saltus v. Genin, 3 Bosw. 250 . Field v. The Mayor, &c. of New York, 6 N. Y. Rep. 179 . Bailey v. Ryder, 10 id. 363, 370.)
2. It is not true, in point of fact, that the plaintiff, Otto Mehlen, had any interest in these goods. We show, in a subsequent point, that Otto Mehlen never came to this country till October, 1865, after the fire occurred, and after the time expired for which the policy was- to run, and that there is no proof whatever that he became the owner of the interest in the assets of the firm which had belonged to his brother, and which descended by inheritance to his father, (a.) The only evidence that Otto Mehlen had any interest in the goods, is the statement of Brink, that there was an
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understanding between Peter Mehlen and him, that if either died his brother should succeed; but such an understanding was a mere nullity, and did not vest Otto,,on the death of his brother, with the title to his interest. (5.) All the decisions, in which the validity of an agreement for the continuance of the rights of partnership in the representatives of the deceased partner has been sustained, have been where there was an express provision in the original articles of partnership to that effect, which could be ascertained with ordinary diligence by parties contracting with the-surviving partner; not where there was a secret parol agreement, especially a mere understanding, without consideration, between the individuals themselves, which could in no manner be ascertained by third parties, and was used for the express purpose of perpetrating a fraud upon them. (Citing 3 Kent’s Com. 56, 57.)
3. If, therefore, Brink, as survivor of himself and Peter Mehlen, had a right to insure the goods of the late firm, then, as such survivor, he had a right to compound the loss, or to submit the adjustment of it to arbitration.
4. But if, on the death of Peter, his brother Otto, became instantly vested with his interest, and thereupon Brink and Otto became owners of the property, of the late firm, still, under the circumstances, the plaintiff Brink had authority to adjust the loss by submission to arbitration.
(a.) As resident partner (his alleged co-partner being a wow-resident, not being, and never having been in this country,) he had power to sign the submission, although in England, (Coll. on Part. 470,) and also in New York, (Harrington v. Higham, 13 Barb. 660 ; S. C. 15 id. 525,) it is held that one partner has not power to submit to arbitration, (that is, that though he has power to release a debt under seal, yet he has not to submit to arbitration whether he shall recover the debt or - not,) in other states of the Union it is held that one partner may submit to arbitration by simple agreement. In Pennsylvania, ( 12 Serg. & R. 243 ;) Kentucky, (3 Monroe, 436;) and Ohio, ( Wright, 420.) But, where the absence and non-
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residence of a partner vests in the resident partner the whole management and power of the firm, he should also have power to submit. The doctrine that he cannot submit, is wholly founded on the principle, that there is no implied authority, except so far as is necessary to carry on the business of the firm. (13 Barb. ,662.) The power to submit, existing in the partners residing in the country and carrying on the business, would seem to be an important and necessary one. (See Mabbett v. White, 12 N. Y. Rep. 442 , 454, 455, opinion of Denio, J.; Harrison v. Sterry, 5 Cranch, 289 , 300; Anderson v. Tompkins, 1 Brook. 456, per Chief Justice Marshall; Deckard v. Case, 5 Watts, 22 ; Hennessy v. The Western Bank, 6 Watts Serg. 300.)
The proof and notice of loss having been made out and signed in the name of Brink & Mehlen by Charles Brink, June 19, 1865, three or four months before Otto Mehlen ever saw America, the latter, by bringing this action, founded on such proof, recognized the right of Brink to use the firm name in his absence from the country, and is now estopped from denying the same right to use the firm name in further carrying out the proceedings to obtain the amount of the policy.
(6.) But, at all events, it is clear that the submission was binding on the plaintiff Brink, who did sign it, and therefore entitled to be read in evidence. (Coll, on Part, § 471. Harrington v. Higham, above cited, 13 Barb. 660 . 15 id. 524.) In an action upon the award, the defendants could not set up a want of mutuality or consideration in the agreement of submission, because the binding obligation of it upon the partner signing it is such consideration and mutuality as to make it binding on the defendants. {Id.)
(c.) But here it was matter of contract that the question should be submitted to arbitration. This was the original agreement between the parties. The. 11th condition annexed to the policy (which is the same thing as if it had been inserted in it) provides that in case differences shall arise concerning the amount of any loss or damage, it shall
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be submitted to arbitrators whose award shall be binding as to the amount; the question of amount being the only question submitted to them here. The submission, therefore, was by virtue of, and in pursuance' of the policy itself. If Brink had the, power to accept said policy, and thereby make such agreement, then' he must have had the power to carry it out and make the submission; if not, the policy is, of course, not binding on the defendant.
0. Wehle, for the respondents, plaintiffs.
1. There is in the case but one exception as to evidence not covered by the request to charge, and that is the refusal of the court to admit Exhibit E, showing the calculations of a witness of the loss of cigars, in evidence, and the ruling of the court in this respect was entirely correct for the following reasons:
1st. It was wholly in the discretion of the court as to the extent to which to allow a re-examination of a witness as to a point on which he had already testified.
2d. The evidence, however, was not competent. The preceding examination of the witness showed that no person could form an estimate with any accuracy as to the amount of cigars destroyed by the fire; or estimate with any certainty the amount of cigars then lying either partially or wholly destroyed on the premises. His testimony, therefore, was a mere guess, and as such incompetent. All the facts in regard to the condition of the cigars, were shown by the witness, and the jury were quite as competent to make the calculation as the witness.
3d. Even if the testimony had been admitted, the court can perceive that it had no effect upon the verdict—the witness had already been allowed to testify to all he knew relative to the -condition of the cigars, and this paper, if admitted, could not have aided the jury in their deliberation ; it was most cumulative. This is apparent from a mere examination of the paper which is in the record. (2 Phillips on Evidence, p. 778. 4 Starkie on Evidence, 1750-1756, 1 id.
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148-150, notes by Sharswood, 8th Am. ed. 231, and eases there cited.)
H. The court was right in refusing the first request, and excluding the submission and award; since one partner has no power or authority to submit Or refer to ,arbitration any matters whatever, concerning or arising out of the partnership business. (Story on Part. p. 191. Harrington v. Higham, 13 Barb. 660 . 15 id. 524. 3 Kent's Com. § 43, p. 49, 4th ed.)
I. Because it is not within the scope of the ordinary ousiness or the powers or authorities necessary or proper to carry on the business of the partnership, and the award may call upon the partners to do acts which they might not otherwise be compellable to perform. (Gow on Part. ch. 2, § 2, p. 66. Adams v. Bankhart, 1 Crom, Moore & Rose, 681.)
2. The soundest reason seems to be, that it takes away the subject matter from the ordinary cognizance of the established'courts of justice, which have the best means to investigate the merits of the case by proper legal proofs and testimony, and the means of arbitrators to accomplish the same purposes are very narrow, and often wholly inadequate. It ought not, therefore, to be presumed that the partners mean to waive their ordinary legal rights and remedies, unless there be some special delegation of authority to that effect, either formal or informal, which is not shown to have been the case in this instance. (Bruen v. Marquand, 17 John. 58 . 3 Kent's Com. § 43, p. 44, 4th ed.)
III. The court was right in refusing to charge the other requests, for the following reasons:
1. The evidence shows conclusively that there was a partnership between the plaintiffs, and that the policy of insurance was issued to them as such partners. Peter Mehlen having died on the 27th day of February, 1865, prior to the issuing the policy on which this action is founded.
2. The award would be void, whether there was a partnership between the plaintiffs or not. It would be void as
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to Brink alone, the arbitrators not having proceeded according to law, none of the provisions of the Revised Statutes relating to arbitrators, (3 R. S. 856, 5th ed. §§ 3, 4, 5, 6, 7,) all of which refer to arbitrations upon written submissions, having been complied with. (Bulson v. Lohnes, 29 N. Y. Rep. 291 .)
IV. The defendant did not suffer any injury from the exclusion of the award, inasmuch as the estimate of the arbitrators was permitted to be given in evidence.
V. The verdict was not against the weight of evidence. The partnership between the plaintiffs is shown to have subsisted at the time the policy was issued; the amount of loss is accurately testified to by the plaintiff, from Ms own knowledge; and his books are in evidence as corroborating Ms statement, which he offered to exhibit to the defendants immediately after the fire. All that the defendants estimated was, the amount of damage to goods not entirely consurned by fire; they did not show the quantity or value of goods wholly destroyed. Hence the plaintiffs’ testimony is really not contradicted, and the court would have been justified in charging the jury to that effect.
VI. An issue of fact can only arise on a material allegation in the complaint controverted by the answer, (Code, § 250;) if, therefore, the court were right in excluding the award and submission, on the ground of its invalidity or illegality, the other allegations of the complaint averring it to be void, as fraudulent, ■ being immaterial, and no issue arises on them.
VH. Upon appeal to the general term .the court may treat the pleadings as having been amended, so as to conform to the material facts proven.
1.’ After judgment such amendments are allowed for the purpose of sustaining it. (Code, § 173. Bowdoin v. Coleman, 3 Abb. 431 . Harrower v. Heath, 19 Barb. 331 . Englis v. Furniss, 3 Abb. 82 . Cayuga Co. Bank v. Warden, 6 N. Y. Rep. 19 . Bate v. Graham, 11 id. 237. Hall v. Gould, 13 id. 127.)
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2. In the last mentioned case the Court of Appeals upheld an amendment,' whereby an entirely new cause of action was substituted in place of the one alleged; while in the case at bar nothing was to be done except to strike out a cause of action which had become immaterial and irrelevant; for if the court rightly treated the submission and award as invalid, it would have been a work of supererogation to decide whether they were obtained by fraud or not.
VIII. There is no allegation in the pleadings, nor any proofs that the submission was had in pursuance of the condition of the policy.
1. The policy, as averred in the complaint and as admitted by the answer, does not make it incumbent upon the plaintiffs to submit any matter to arbitration,, and the court will not allow a party to allege one thing and prove another, or avail himself of another, if incidentally proved. (See authorities cited in the 5th point.)
2. Even if section 11 of the policy could be considered as properly proven, it is certainly not shown that the arbitration was had under that section.
3. It appears affirmatively that no “written request ” was made by either party. The defendant’s president is asked, distinctly, what took place between him and the plaintiffs on that subject, and it appears from his answers that no written request was made, and that nothing was said to indicate that the proposed arbitration should be had in pursuance of section 11 of the policy.
4. The submission which was made was entirely different from that provided for in section 11 of the policy.- The submission actually signed was one between Brink and three insurance companies, while the policy only mentioned a submission between the plaintiffs and the defendants alone; the actual submission states that the decision of two of the arbitrators shall be binding, while section 11 of the policy would require the concurrence of all the arbitrators to the award.
5. The fact that a submission was had in writing, ought-
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to be taken as conclusive proof that it was not a submission under section 11 of the policy; for if the appellants’ view of that section be correct, no written agreement about the arbitration was required.
IX. The arbitration in this case comes clearly within the provisions of the Revised Statutes, as it relates to a controversy between the parties as to the amount of loss by fire. The liability to pay the loss not being disputed by the defendants at the time of the submission, there was but one point of controversy between them, and that was submitted. (3 Black. Com. 16. 3 Steph. Com. 374. Billing on Awards, 3.)
There is no authority for holding that an award must be of such a nature, that, in an action to enforce it, no allegation or proof of any extrinsic fact is admissible; hence' the court was right in excluding the submission and award. ( 29 N. Y. Rep. 291 .)
X. The demand for relief in this case is entirely immaterial. Even if no answer had been interposed, the plaintiffs might have obtained a judgment for the money demand, and an answer having been.put in, the whole matter was in the discretion of the court. (Code, § 275. Marquat v. Marquat, 2 Kern. 336.)
XI. The appellants having assented to a trial by jury, they have waived the equitable issue, if any there was. (Greason v. Keteltas, 17 N. Y. Rep. 491 . See Phillips v. Gorham, id. 270.)
XII. The court was right in refusing to charge the last request to submit to the jury the question whether the charges of fraud have been made out by the evidence’’. The allegation of fraud was immaterial under the ruling of the court, in excluding the award on the ground of invalidity, and hence there really was no issue on this point for the jury to determine.
XIII. The court was right in its refusal to submit the question of partnership to the jury. The plaintiffs and- defendants both showed the existence of the partnership, and there was no evidence in the case to contradict it. A parol
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understanding between the parties would have been sufficient to make them partners; but they became actual partners, by dividing the profits between themselves, under their partnership agreement, and the policy of insurance was issued to them as such partners.

The sole, question which I deem necessary to consider in this case is, the propriety of the exclusion of the appointment of two appraisers of the extent of the loss of the plaintiffs, by the damage to their cigars by the fire mentioned in the pleadings, their appointment of a third, and the appraisal by the three. This was undoubtedly based entirely upon the failure of one of the plaintiffs to sign such appointment, and the idea that so unsigned it was void because they were partners.

I cannot perceive that the fact of such partnership was so clearly made out as to have entitled the court to withdraw from the jury all consideration of the evidence, and pronounce as matter of law that it was. The only witness on the subject was the plaintiff Brink. He testified that the firm of “Brink & Mehlen’’had formerly been composed of himself and Peter Mehlen, who died in February, 1865. That at the time of his death there was a subsisting agreement between them, that upon such death, the plaintiff, Otto Mehlen, who was a brother of Peter Mehlen, together with a brother of the other plaintiff, who was not a party to this action, should become partners in such concern, under which each should divide the profits.. But that no partnership articles were ever executed by the plaintiffs. The capital remained as it was before the dissolution of the firm by the death of Peter Mehlen. Besides the plaintiff Mehlen, the deceased had, as surviving relatives, a father, sister and brother. Ho administrator was appointed of his estate. The parties were changed in no respect. Every thing continued just the same, since before the first firm was formed, in June, 1863, the plaintiffs never met until October, after the fire. This is all the

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evidence on the subject, except as to a division of profits, which I do not regard as speaking of a fact, but of the agreement with Peter Mehlen. There was none, that the plaintiff Mehlen ever became a party to his-brother’s agreement, or made a new one; or that he ever agreed to become liable for the losses, or became entitled to a share of the profits. ISTo action could have been maintained by third persons upon such evidence against both the plaintiffs, or by either against the other. There was certainly, therefore, no conclusive evidence of .partnership between the plaintiffs.

The answer admits that a policy was issued to the plaintiffs, but this would only give them a right of action in their joint names, and could not affect the power of the parties really interested in the loss, to submit the question of the amount to arbitration.

' But it will not be necessary to controvert any principle established in regard to the power of partners to bind each other by submissions to arbitration, in order to establish-the admissibility of the appointments of appraisers in this case as well as their award as evidence, even if the plaintiffs were partners. Such appointments and award are not pleaded in bar or as a defense to the action of the plaintiffs; if they had been, they might have been conclusive, because no reply was put in to them: if or are they the subject of an action to make the absent partner liable for any thing. They simply operate to render the contract of the defendants to pay uncertain damages certain, by liquidating them, and thereby reduce the amount claimed by. the plaintiffs. They were made pursuant to the very contract on which the plaintiffs bring their action, and upon which, and not on the award, even if they had adopted it, they would still have been obliged to bring such action.

The reasons adduced, in all elementary works, and sanctioned' by courts, against the power of one partner to bind another by submission to arbitration are said to be

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two fold; first, because such power does not come within the scope of the. ordinary business of a partnership, or the authority necessary to be vested in each partner to carry it on, and in the next place, because the award might compel a partner to do what otherwise he would not be bound to perform. (Story on Part. 191. Gow on Part. ch. 2, § 2, p. 66. Coll. on Part. 470. 3 Kent’s Com. 4th ed. 44. Adams v. Bankhart, 1 Cr. Mo. & Rosc. 68. Harrington v. Higham, 13 Barb. 660 . S. C. 15 id. 426.) To these has been added a third, by way of suggestion, by Justice Story, in his work on partnership, (191,) in which he is followed in Kent’s Commentaries, (ubi supra,) to wit, that the means whereby established courts of justice investigate the merits of a case, by proper legal proofs and testimony, being much better • than those of arbitrators, which he assumes to be very narrow, and often wholly inadequate, it is not to be presumed that partners mean to waive their right to ordinary legal remedies, unless by some special delegation of authority to that effect, however informal. Neither of the first two reasons, even if they are distinct ones, would be applicable to the submission to arbitration of an amount due to partners. For the compromise of debts' is within partnership authority, and must include the'lesser power of submitting them to the decision of others. By such arbitration no liability could be imposed on the party not signing; all the decided cases upon this point relate only to actions against partners, on an award, for positive relief. As to the third reason, if it be consistent with the favor shown to arbitrations and awards, (Munro v. Alaire 2 Cai. 320 ,) it would not apply where by the very instrument out of which the partnership claim arises, it is provided that such claim shall not be payable until a dispute respecting it has been submitted to arbitrators. That is surely as good as a ratification would be. (Mackay v. Bloodgood, 9 John. 285 .) But there is a saving clause even in the statement of such reason, to wit, that even an informal delegation of special
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authority is sufficient, and surely the terms of the instrument must he considered as such. If insuring be part of the partnership business, the power of insuring in the city of New York, so as to subject claims under a policy to appraisers, must be part of it also, as no policy is issued without such a provision, and I apprehend but few insurances would be affected, if by reason of one partner residing abroad, such submissions could not be made.

But beyond all this, the submission and appraisement in this case was not a determination of the final rights of the parties; an arbitration and award, upon which alone an action could be brought. It was a mere reference of a collateral fact, to wit, the extent of the damage, a distinction fully recognized in Elmendorf v. Harris, ( 5 Wend. 521 , per Savage, ch. J. and note at end of case, p. 522;) Garr v. Gomez, (9 id. 649, 661 ;) and Harris v. Bradshaw, ( 18 John. 26 .) The mode of submitting the liability of the defendants to ordinary courts was not changed. There is scarcely a day in which, in commercial transactions, the valuation of property of estimate of damages is not entrusted to third parties, and no one has yet dreamed of looking upon them as arbitrations, and subjected to all the formalities imposed on them by the Revised Statutes, (2 R. S. 541, §§ 1-25; Bulson v. Lohnes, 29 N. Y. Rep. 291 ;) with the paraphernalia of oaths, witnesses and notices of trial. It is most. frequently confided to the personal skill, knowledge or experience, or even acquired information of appraisers, and even in case of a statutory delegation of authority as between the public and individuals, (Matter of John and Cherry streets, 19 Wend. 659 ,) they may rely on their personal inspection and appraisal.

But even if such appraisal was not binding on the plaintiff Mehlen, it was admissible as against his co-plaintiff, as to his share of the damages. That limitation and effect is conceded in all the cases. The plaintiff Brink had power to bind that share, and did it. (Harrington v. Higham,

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15 Barb. 426 .) As there is no evidence as to his share of the profits of the firm, the verdict cannot be modified, and there must be a new trial.

Judgment and order reversed, and a new trial granted, with costs to abide the event.

Cases cited