Wear v. Ragan

Fisher, J., delivered the opinion of the court. The object of this bill in the court below, was to settle a disputed copartnership account between the parties. After the cause stood at issue upon the pleadings of the parties, they entered into an agreement to submit the several matters in controversy to arbitration, with the further agreement, that the — 87 — award should be returned into court, and a decree made thereon, according to the terms of the award. The award having been made and returned into court, certain exceptions were interposed thereto, one of which is as follows: “ Because said award was not made under, 'and by virtue of a rule of this or any other court;” which exception, together with the others, was overruled by the court, and a decree pronounced according to the award. From this'it will be seen, that the only question is, whether it was necessary for the submission to arbitration to be made. under the sanction of the court, in order to give the court jurisdiction over the award. We deem it unnecessary to determine whether this case falls strictly within the letter of the statute or not. Hutch. Code, p. 800. Unquestionably, where the court has not already acquired jurisdiction by regular suit over the subject-matter and parties to the controversy, parties who submit their controversies to arbitration, must, in order to give to the award the force and effect of judgment, bring themselves within the provisions of the statute. But that is not the true question in this case; the jurisdiction of the court, both over the subject-matter and the parties, is complete. One party is before the court by his bill, and the other by his answer. Certain facts have to be ascertained before the decree can be made, and the parties themselves agree to ascertain these facts, by means of arbitrators, whose award shall be the foundation for the decree. The question is, whether the parties could in this way terminate their litigation. They could certainly agree out of court, what decree the court might pronounce upon the matters put in issue, within the jurisdiction of the court. And if they could do this, why could they not say, that others might prescribe such terms in this particular, as would be binding upon them. There is no controversy as to the main fact. It is admitted''that the submission was made; and the only objection is, that it was not made under a rule of court. This, under the state of the case, we do not consider necessary. It is sufficient, under the case presented, that the award was such as could be made the foundation of the decree which was rendered. Decree affirmed. — 88 — Smith, C. J., delivered tbe following dissenting opinion. This was a bill filed by the appellee, in the Vice Chancery Court, at Fulton, praying an account to be taken of a partnership, which had previously existed between himself and the appellant. An answer was filed at the November Term of the court, in which the appellant denied the material allegations of the bill. No order appears to have been made in the case at that, or the following term, in May, 1854. During the recess of the court; that is, on the 7th of October, 1854, the complainant and respondent entered-into a bond, by which they agreed to submit the matters in controversy in the said suit, to the arbitrament and award of certain persons selected as arbitrators; and that their award when made, should 'be returned to and made the decree of the court, in said cause. The parties were bound by a penalty, stated in the bond, to abide by and perform the agreement. The arbitrators, pursuant to the agreement, made an award, which was presented to the court, by the appellee, at the November Term, 1854; who entered his motion for a rule, that the appellant submit to, and be concluded by tlie said award, and that “ the submission and award be placed on file, and a decree be entered accordingly, as directed by the statute.” The rule was granted, the agreement and award were ordered to be filed, and the latter established, as the decree of the court in the cause. This appeal is prosecuted, to reverse that order and decree. The question in regard to the propriety of this proceeding, must depend exclusively upon the statute concerning “ Arbitrations and Awards.” Hutch. Dig. 800. A suit was pending in a court of competent jurisdiction, involving the very matters embraced by the express terms of the agreement and submission entered into and had between the parties. As there was no rule of court made, referring the matters in controversy between them to arbitrators, the case is manifestly not within the provisions of the first section of the said act. The second section applies to controversies in which no suit is pending, “but for which there is no other remedy but by personal action or suit in equity.” It makes it lawful in such cases for the parties “ by arbitration, to agree that their submission of the — 89 — matter in controversy to the award or umpirage of any person or persons, should be made a rule of any court of record which the parties may choose, and to insert such their agreement, in their submission,” or in the condition of their arbitration bond; and provides, that where such an agreement, so made and inserted in the submission, or in the condition of the bond, when properly authenticated, shall be entered in the proceedings of the court of which the same is agreed to be made a rule; “ and that a rule shall be made thereupon by the said court, that the parties shall submit to, and finally be concluded by the arbitration or umpirage which shall be made concerning them by the arbitrators or umpire, pursuant to such submission.” It is difficult to conceive how this statute could be so construed, as to authorize the persons, to whose umpirage the matters in controversy between the parties were submitted, to make an award, before a rule of the court for that purpose had been entered. The language is too unambiguous to admit of such an interpretation. It is express and positive, that when parties, desirous of terminating their controversy by arbitration, shall enter into an agreement for that purpose, in the mode prescribed, it maybe presented to the court chosen by them, and if proven by the affidavit of a witness thereto, shall be entered in the proceedings of such court; “ and a rule shall be made thereupon by the said court, that the parties shall submit to, and finally be concluded by the arbitration or umpirage which shall be made concerning them, by the arbitrators or umpire, pursuant to such submission.” Beyond all doubt, the plain and literal interpretation of the language used in this section, shows that the award of the arbitrators or umpire, which was designed to be adopted by the court as its judgment or decree, should not precede, but follow, the rule of court, and be made in pursuance of its terms. But were it conceded to be doubtful, or even probable, that an award in such cases might be made, returned into court, and, without a rule previously entered on the minutes of the court, authorizing the submission and award, be adopted as the judgment or decree in the cause, there is another consideration, which, as I — 90 — think, shows conclusively, that such an interpretation ought not to be adopted. In the case supposed, as in the case at bar, the agreement to submit the matters in controversy between the parties, and the submission comprised in the arbitration bond, and the award of the arbitrators, would be mere matters in pais. The bond, or instrument entered into by the parties, like any other bond or obligation entered into, upon sufficient consideration, undoubtedly would be obligatory. It would be good at common law; and like all other contracts of the same character, could only be enforced in the mode prescribed by the law. It seems, hence, to be clear, that the court, in the method supposed to have been designated in the statute, could not acquire jurisdiction of the parties intended to be concluded by the decree: there being but two ways, in which jurisdiction of the person can be acquired by a court; the first, by some process or proceeding, which amounts to a legal notification to the party sought to be charged, of the pendency of the suit; the second, by his voluntary appearance and consent. It cannot be pretended, that the transaction in reference to the submission, was in the nature of process, emanating from the court chosen by the parties; much less can it be maintained, that the appellant, who appeared and contested the jurisdiction of the court, was made a party by consent. If correct in this view, the construction applied by the vice chancellor, would render the provisions of that section inoperative and void. We are consequently bound to adopt a different one, unless the language employed by the legislature is so plain as to admit of no doubt, in regard to its intention. On the other hand, the interpretation which appears to me to be the legitimate one, avoids that objection. The second section was evidently designed to prevent litigation, and to supply a means of adjusting controversies; avoiding, at the same time, the delay and expense usually attendant upon a regularly conducted litigation in the courts. In the pursuit of this object, we are bound to presume that the legislature were careful not to violate any principle regarded as fundamental, in the administration of justice, or to invade any right granted to the citi — 91 — zen by the constitution. It could not have intended, in any case, to authorize a judgment or decree against a person not legally made a party to the proceeding, nor in any way to abridge the right of trial by jury. In proceedings under this section, the agreement to submit to arbitration being duly authenticated, must be filed and entered on the minutes of the court, chosen by the' parties themselves. They have their day in court, and hence, have an opportunity of objecting to its action, before any order can be made by which their rights may be affected. The whole procedure is based upon the idea of mutual consent. It is this consent,' which confers jurisdiction as to the person of the parties; and for that reason they will be concluded by the subsequent action of the court in 4he premises. Entertaining this opinion, I dissent from the decision of the majority of the court.