Culver v. Ashley

Morton J. When this case was before the Court at a former term, the award was determined to be invalid, because the arbitrators had exceeded their authority. 17 Pick. 98. That was the only question then submitted to our decision. But the case has again been tried, and the plaintiff’s claim placed on different grounds. It is now contended, that although the arbitrators exceeded their authority and the award in itself had no binding force, yet that the parties, by their subsequent conduct, adopted and ratified it. There can be no doubt that arbitrators mutually agreed upon are so far the agents of the parties, that their acts are the proper subjects of ratification. Perkins v. Wing, 10 Johns. R. 143. Indeed no such relation is necessary. If a perfect stranger assumes to act for a party, the latter may adopt his agency, and has an election either to ratify or to reject the acts thus done by him. A subsequent ratification is equivalent to a previous authority. Paley on Agency, 143; Ward v. Evans, 6 Mod. 37; S. C. 2 Ld. Raym. 930; Thorold v. Smith, 11 Mod. 88; Wilson v. Poulter, 2 Str. 859; Clarke v. Ryall, 1 W. Bl. 642; Herring v. Polley, 8 Mass. R. 120; Lent v. Padelford, 10 Mass. R. 236; Clement v. Jones, 12 Mass. R. 60; Erick v. Johnson, 6 Mass. R. 193; Barnaby v. Barnaby, l Pick. 221; Copeland v. Mercantile Ins. Co. 6 Pick. 198. Has the defendant adopted and ratified the unauthorized acts of the arbitrators ? They awarded several things to be done by each of the parties. The plaintiff, whose lease of the farm had not expired, was required to leave it, in the condition prescribed, within one [302] week, and to transfer to the defendant the personal property on the farm. All this was punctually and faithfully performed by the plaintiff. • The defendant, on his part, in consideration of these things to be done by the plaintiff, was to pay him $ 34-72 and the expense of the reference, taxed at $ 19-57 ; in the whole, $ 54-29. He accepted the personal property awarded to him, received possession of the real estate, and paid a part of the sum awarded to the plaintiff. We can entertain no doubt that the person who took charge of the property on the farm was the defendant’s agent, and that the note which he gave up was intended to be in part satisfaction of the award. Now the defendant, having received all the benefits of the award, cannot avoid the charges and duties imposed upon him by it. Indeed it cannot for a moment be doubted, that these acts are amply sufficient to show a ratification. But it is contended that these acts were done by the defendant in ignorance or misapprehension of his rights. It is undoubtedly true, that a ratification, to be valid, must be made understandingly. Acts done in pursuance of the decision of the arbitrators, and in a belief of its validity, are evidence of submission to a binding judgment, rather than of the adoption of an unauthorized award. If the defendant assented to the award and recognized its validity, in ignorance of the circumstances, he was bound, as soon as he discovered the facts, to notify the other party of his determination to rescind his ratification. And the omission to give notice of rejection has been deemed sufficient evidence of ratification. Frothingham v. Haley, 3 Mass. R. 70; Cairnes v. Bleeker, 12 Johns. R. 300. But the defendant could not repudiate his ratification without restoring the plaintiff to as good a situation as he was in when the award was made. It would be most unjust for him to refuse to perform his part of the award, while he retains the fruits of it. And if the plaintiff cannot be placed in statu quo, it would be more reasonable and equitable to hold the defendant to an agreement which he may have incautiously or ignorantly made, than that the plaintiff, who has been guilty of no negligence or mistake, should be subjected to loss or injury. Let him who has committed the error bear the conse [303] quence of his own rashness or ignorance. But we have no need to rely on this reasoning, for we are well satisfied that the defendant acted under a full knowledge of all the circumstances. He knew the terms of the arbitration agreement which he had executed; he was conusant of all the proceedings of the arbitrators ; he knew that in exceeding their authority they acted by the request of both parties ; he knew the terms of the award, that they required a transfer to him of more property than was needed to pay the balance due him, and that he was required to pay for the excess and to pay the cost of the arbitration. With this knowledge, he accepted from the plaintiff, possession of the farm, all the personal property, and whatever else he was required to do, and on his own part paid a part of the debt and a part of the cost awarded against him. A stronger case of a free, full and understanding ratification, cannot well be imagined. If the defendant acted under any mistake of his legal rights, it must have arisen from his own misapprehension of the law. If he supposed that the award was obligatory upon him, he mistook his legal duties and liabilities. Every one is presumed to know the law. And whether this presumption be well founded or not, it is the only one upon which legal justice can be administered. All the facts now known to us, were then known to him ; and if he drew illegal inferences from them, the injury, if any has been sustained, should rest upon him and not on a party who has made no mistake and been guilty of no neglect. The award, having no validity in itself, derives all its force from the acceptance of the parties. It presented to them proposals for their adoption or rejection. It proposed to the one party, to transfer certain property and perform certain other things ; and to the .other party, to pay certain sums of money and do certain other things. These terms were mutual and dependent, each forming the consideration of the other. The parties manifested their acceptance of the proposals by the part-performance of them. The award thus adopted possesses all the ingredients of a contract. It was fairly made, under circumstances which preclude a rescission of it by either party without the consent of the other. It must be enforced. [304] The view which we have taken supersedes the necessity of examining the other questions which were discussed. The award was clearly unauthorized, without referring to the vexed question of awarding costs. The evidence of the mistake of the atrbitrators, which doubtless should be excluded, (Perkins v. Wing, 10 Johns. R. 143,) could not, if received, impair an award which before had no validity. The paroi evidence of the extension of the power of the arbitrators is immaterial, because the award is expressly and wholly founded upon the written agreement. And the compatibility of the different counts and the right to recover upon the latter ones, are rendered mere moot subjects ; inasmuch as we have founded our judgment on the count upon the award. Defendant defaulted, and judgment according to the auditor’s report.