Hartshorne v. Cuttrell

The Chancellor. This is a bill to set aside an award of arbitrators made between the parties, to which the defendant has demurred for want of equity. This presents the question, whether the case stated by the complainant, if true, is one proper for the interference of the court. The grounds for interference with awards in this court has been a subject often discussed, and may now be considered as — 301 — well settled. To impeach an award, there must be corruption, partiality, or gross misbehaviour in the arbitrators, or some palpable mistake made by them in the law or fact. Tittenson v. Peat, 3 Atkyns, 529; 3 Atkyns, 644; Herrick v. Blair and Blair, 1 Johns. Ch. 101; Underhill v. Van Cortlandt, 2 Johns. Ch. 361; Campbell v. Western, 3 Paige, 138. All the cases agree that corruption or gross misbehaviour in the arbitrators, will be fatal to an award, and the later cases recognize the principle that a plain mistake, either in law or fact, will also be sufficient to destroy it. This being a tribunal of the parties’ own choosing, of a domestic character, and in many cases a very convenient and cheap mode of settling controversies, their doings are construed liberally. A mistake in the law, therefore, must be a plain one, and upon some material point affecting the case, and the mistake in fact must in general be such as the arbitrator himself would admit, such as a miscalculation in an account, and the like. As to error in judgment on the merits, it is no ground whatever for the interposition of a court of equity. This would put an, end to all arbitrations, for it would at once declare that the arbitrators must give the same decision that this court would have given under the like circumstances. This is not necessary. So too, a mistake in the admission, or rejection of evidence not materially affecting the decision, although not strictly according to law, is no ground for interference. The language of chancellor Walworth in the case last cited, in speaking of the impropriety of interfering in such case, is very correct. He says, “if every party who arbitrates in relation to a contested claim to save trouble and expense, is to be subjected to a chancery suit and to several, hundred dollars costs, if the arbitrators happen to err upon a doubtful question as to the admissibility of a witness, the sooner these domestic tribunals of the parties’ own selection are abolished the better. Such a principle is wholly inconsistent with common sense, and cannot be the law of a court of equity.” If, therefore, upon examining this bill, taking the case as there stated, there shall be made out against the arbitrators, corruption, — 302 — partiality, or gross misbehaviour, or a palpable mistake in law or fact on a material point, the suit must be sustained, otherwise not. I will not look at all at the question, whether the ultimate judgment .which the arbitrators came to was right or wrong: that, the parties themselves agreed, should be settled by other men. To have enabled me the better to come at the case, the complainant should have set out the arbitration bond and the award. By that it would have appeared what was submitted. I take it for granted, however, that it embraced in form, the controversy between the parties touching the nine hundred and sixty dollars which the complainant claimed to have refunded by the defendant, as monies paid him by the intestate on a contract for building a vessel; and on the other- hand, the deduction from that sum by way of damages, which the defendant claimed on his part, for. his loss by the complainant’s not fulfilling the contract. It was, doubtless, to put an end to this difficulty, that the arbitration was entered into. The charges in the bill, and on which the complainant relies, must be examined separately. The first charge is, that the complainant was deceived before •entering into the bonds, by a conversation he had with the defendant, in which he stated his loss on the vessel to have been about two hundred and eighty dollars, which was all that he claimed, when the award has made him a much larger allowance. The matters submitted were defined and fixed by the bond, and there is no pretence that any limit to the defendant’s claim was there made. It would indeed seem strange that a party should recover more than he stated his claim to be, and yet he might well be mistaken in a matter of this kind. Be that, however, as it may, the mere conversation of the parties prior to the hearing can be no ground for disturbing an award made in so solemn form. The second charge is, that the arbitrators admitted illegal evidence. They admitted Francis Cuttrell to prove that Schenck, the intestate, agreed by parol with the witness and the defendant, while they were partners, to build him a vessel at forty dollars a ton without finishing the cabin, and that the witness and the de — 303 — fendanf, afterwards dissolved partnership. This is objected to, because it would contradict a written agreement made between Schenck and the defendant, for building the vessel referred to in this cause. This agreement is not set out in the bill, and it is therefore impossible for me to say what foundation there is for this charge. But the complainant is bound to state in his bill a palpable mistake in the decision of the arbitrators. It is very easy to conceive how this evidence might have been proper. If no price was fixed in the agreement, this would be a very proper mode to come at a fair valuation. I can hardly suppose it was ever intended that evidence like this should control a written agreement between the parties. If such was the fact', the agreement should have been set out, and the manner in which the proof contradicted the agreement specified. The bill does not even affirm that this evidence did in fact contradict the writing, but merely that counsel took that ground before the arbitrators. The third charge is, that the statement, of the defendant was received as to material facts, without proof, and when objected to by the complainant. If this was so, there can be no doubt it would be so gross an impropriety as would call for the aid of the court. But when I look at the facts which the defendant established in this way, they appear to be no way material to the decision of the cause. What was the question before the arbitrators? Mr. Schenck, the complainant’s intestate, a short time before his death, entered into an agreement with the defendant to build him a vessel, and paid him on account nine hundred and sixty dollars. After his death, the complainant’s co-administrator, with his approbation, informed the defendant that the said administrators could not complete the contract for building the said vessel, and that they should claim of him the nine hundred and sixty dollars which Mr. Schenck had paid. The charge in the bill is, “ that the defendant did not offer or produce any evidence whatever before the said arbitrators, that he had given any notice to the said administrators, or either of them, that he’ should hold them to the said contract, or that he finished the said: vessel for the said administrators, 01 for your orator as survivor, at — 304 — the time mentioned in the said contract, or at any other time, or that he finished the said vessel with a cabin, or that he sustained any loss whatever on said vessel; nor did he offer or attempt to prove, that he had sold the said vessel at any price, or what it would cost to finish the cabin, but received the statement of the defendant alone on these facts.” After the administrators had notified him that they would not fulfil the contract on their part, • the defendant was not bound to go further. He might stop there; and whether he ever finished the vessel or not, or gave them any notice or not, he might fairly, as it appears to me, remunerate himself out of the money already paid, for his trouble and expenses as far as he had gone. The question of damages is, and must be, a matter resting in discretion, to be judged of, not from any positive proof of the amount of the loss, but from the general circumstances attending the case. This charge is entirely too general and uncertain in its character to justify the interference of the court. What the evidence was upon which the arbitrators acted, does not appear. There may have been' such a state of facts proved as to enable the arbitrators to form a fair judgment as to the amount of remuneration the party was entitled to. The last charge is, that the arbitrators, after hearing the evidence, and while considering of their award, called the parties before them, and asked the defendant questions concerning the case, without the permission or consent of the complainant. It would seem that they called both the parties in, and that too, without any objection being made by the complainant. In these investigations before arbitrators, often conducted by men unskilled in the forms of judicial proceeding, to set aside an award because the arbitrators asked the parties questions, without objection being made at the time, and when both were present, and that too, without stating what those questions were, would be holding too strict a rule, and be foreign to that liberal construction which should ever be placed on the conduct of a tribunal chosen by the parties themselves. This award may be wrong in amount, and it may, for aught that appears to me, be all right. At all events the bill doe3 not, — 305 — in my view, present a case proper to call on the defendant to answer. There is no such feature presented as will justify me in sustaining the bill. The bill must, therefore, be dismissed, with costs. Decree accordingly.