Jackson v. . McLean

Merrimon, J., (after stating the facts). It seems that the Court below treated the agreement of the parties to this action to arbitrate the matters in litigation, as being an order of reference, made by the Court by consent of the parties in writing, to try the issues of fact and law arising in the action,, as allowed by the statute, (The Code, §420). We think it very clear that agreement cannot be so treated. It was not made in Court, but out .of Court, not in pursuance or by authority of .any order of reference, nor is there any order or entry recognizing it as having been made’with the sanction of the Court. Indeed, there is a total absence of any order or entry in respect to it. The entry made subsequent to the agreement, “under arbitration and award,” and similar entries, on the record in other actions referred to, seem to have been intended as mere suggestions on the record of a cause sufficient for the continuance, that the parties were settling the matters in litigation “ out of Court.” Moreover, the terms of the agreement to arbitrate, do not embrace simply the-matters in litigation — the issues of fact and law — in this, action. They embrace “ all manner of actions, suits, con *478 troversies, claims and demands whatsoever now pending, •existing or held by and between the parties to it,” embracing numerous actions in different Courts. The agreement of the parties out of Court, to allow new parties to be made, and additional pleadings before the arbitrators, could not affect the action, because it did not have the sanction of the Court at the time it was made, or afterwards, so far as appears. The agreement to arbitrate, and the award in pursuance of it, made out of Court and with which the Court had no connection or relation, could not be enforced in this action, unless by consent, although the failure to observe and keep the terms of the agreement might be a cause of action in a new and independent action. The Court could not in this action obtain jurisdiction of the new cause of action, unless by consent of all the parties. No doubt it might in that case. It is the order of reference that extends the jurisdiction and controls the relation of the Court to the trial by referees of the issues of fact and law-one or both — or to an arbitration and award, as to the matter in dispute, by consent of parties, under the order of the Court, and extends its authority to compel the parties to the action, by proper judgments and orders in the regular course of procedure, to do and submit to what ought to be done as the just result of the reference. Hence, when there is an order of reference in an action, by consent of the parties in writing, to try the issues of fact or law. or both, as allowed by the statute, (The Code. §420,) and the referees make their report, it stands “ as the decision of the Court, and judgment may be entered thereon upon application to the Judge.” In such case, if either or any party shall object to the action of the referees, he must do so in the course of the trial before them, as directed by the statute, (The Code, §422,) else he will be concluded, if the objection be one that ought to be then made. In such case, the Court can, and will compel the parties to a *479 due observance of the terms and effect of the reference, and all proper proceedings, reports, orders and j udgments consequent thereupon. Such a reference is of and part of the action. And so in this case, if there had been a proper order of reference, the plaintiff might have been entitled to judgment, but as we have seen, there was none. It is clear there was no such reference in this case as that above mentioned. • The Court might, in the exercise of its general power, by consent of parties, have referred the matters in litigation to arbitrators, providing that their award should be a rule of the Court. In that case the Court might —would—in a proper case, compel the parties to submit to the award. Lusk v. Clayton 70 N. C,, 184; Simpson v. McBee, 3 Dev., 532; Gudger v. Baird, 66 N. C., 438. It is otherwise, however, and for the reasons already stated, when there is no such order of reference, and the parties agree out of Court, and without its sanction, to arbitrate. Simpson v. McBee, supra; Moore v. Austin, 85 N. C., 179; Metcalf v. Guthrie, 94 N. C., 447. In the latter case, the party complaining can only find a remedy in another action. He cannot successfully obtain leave to file an amended complaint, and allege the new cause of action created by the award, because it arose after the pending action began. And if the award settled and concluded the cause of action, and the plaintiff should prosecute the same further, the defendant might, by amended answer, plead that the cause of action had been settled and merged in the award, and thus defeat the plaintiff’s recovery. It is recited in the judgment appealed from, that “ it appearing to the Court that the award made by the arbitrators heretofore appointed in the above cause by this Court was by the consent and agreement of the parties,” &c. This recital cannot be regarded as conclusive or sufficient, because it relates to an essential order, which, to have force and effect, must appear in the record. If the Court in fact appointed *480 the arbitrators by the consent of the parties, and a. proper-order of reference was really made in that respect, then the Court ought to have directed the entry of it nunc pro tunc. But it seems that this recital was based upon the fact that the agreement to arbitrate, was referred to once or twice in the record, as a reason for the continuance of the action. As we have seen, such casual, indefinite entiy, without connection other than such as appears, could not be treated as even a memorandum of a proper order of reference, especially, as the written agreement to arbitrate makes no mention of or reference to any order of reference or appointment of arbitrators by the Court. Besides, it is stated in the case settled on appeal, “that the agreement to refer the matters in litigation between the parties to the various suits, was made by them out of Court,” and it appears, that it was made many months before the Court took notice of it in the record. . Therefore we think the Court erred in giving judgment for the plaintiff upon the report and award mentioned in the record. The judgment must be set aside, and further proceedings had in the action according to law. To that end, let this opinion be certified to the Superior Court according to law. It is so ordered. Error. Reversed.