Cecil v. Bank of America National Trust & Savings Ass'n

BARNARD, P. J.

This is an appeal from an order refusing to disqualify an arbitrator.

On January 10, 1947, the appellant transferred certain farms to the Western Frozen Foods Company, Inc. with a

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written agreement and guaranty that Western would realize a certain amount from the operation of the farms by December 31, 1948. This agreement was secured by a pledge of 49,076 shares of stock in the Kingsburg Cotton Oil Company which were owned by Cecil. The agreement provided that any disputes would be submitted to arbitration, each party to appoint an arbitrator and these two selecting a third. This agreement and the pledged stock were assigned by Western to the Bank of America as security for a loan.

The farms failed to produce the guaranteed profits and a demand was made upon Cecil to make good on his guaranty. Claiming that the farms had not been properly operated Cecil, on March 2, 1949, demanded an arbitration as to his liability, and appointed Milo Erwin as his arbitrator. Cecil was then in control of the Kingsburg Cotton Oil Company, and its chief officer. Erwin was employed by that company, and was Cecil’s chief assistant and his personal friend. On March 23, 1949, Western, with the approval of the bank, appointed C. Ray Robinson as its arbitrator. Robinson was recommended to Western because of his experience in farming. On May 5, 1949, Cecil, in writing, protested this appointment on the ground, among other things, that Robinson “is, and has been, an attorney for the bank” and that he “has been appointed for the purpose of, and intends to act as, an advocate and attorney in said arbitration rather than an arbitrator. ’ ’

On October 7,1949, Cecil filed a petition in which he prayed that the court should appoint “a third arbitrator to act in said arbitration with the respondents, Milo Erwin and C. Ray Robinson.” On April 14, 1950, Cecil and Western signed a written stipulation reciting that Erwin and Robinson had been appointed as arbitrators and providing, among other things, that “the two arbitrators heretofore appointed” should within 30 days appoint a third arbitrator; that in the event “said two arbitrators” could not agree upon a third, such appointment should be made by the court; that “said three arbitrators” should commence hearings within 30 days; and that certain issues should be submitted to “the two arbitrators already appointed and the third to be selected as hereinbefore provided.” To this stipulation was attached an agreement signed by the bank, by Western and by Cecil that the bank should be bound by any award made and finally confirmed by the court. This stipulation was filed in court on August 24, 1950.