Brewer v. Bain

¶1The bill was filed by the appellee, for a settlement of the accounts of a partnership in planting, averred to have existed with the appellant in 1870, and to compel the appellant to account for property of the partnership, which, it is averred, he had converted to his own use. The answer denies the material allegations of the bill, and pleads, in bar of the relief sought, that the matters in controversy had been submitted to the arbitrament and award of Hugh G. Windham, and I). C. Taylor, who had rendered their award, ascertaining and declaring that the appellee was indebted to the appellant, on account of such matters, in the sum of twelve hundred and eighty-five 61-100 dollars. The final hearing was on the bill and answer, and proof addressed to the allegations of the bill, the matters of account, and to the fact of the submission and award. The chancellor declared that the award was not a bar, because it was uncertain; because, in arriving at their conclusions, the arbitrators must have considered matters not submitted to them; and lastly, because he regarded it as hard, unconscionable, and oppressive on the appellee. A decree was rendered, ordering an account in conformity to the prayer of the bill, and giving special instructions to the register, as to the mode of taking the account. A final decree was rendered, adjudging a large amount to be due the appellee from the appellant; from which decree this appeal is taken, and numerous erors are assigned.

¶21. It is obvious that the question meeting us at the thresh-hold of our consideration of the case, is the fact of submission and award ; for, if that fact is proved affirmatively, in the present state of the pleadings, the award is a positive bar to the relief sought by the bill. Parties have an unqualified right to submit all controversies, involving pecuniary demands, or property, and rights of property, to the arbitrament of those in whom they confide, and whom they deem competent to determine them, rather than to enter on litiga*159tion, by pursuit of remedies in courts established by law. This mode of adjusting controversies, the statute declares, it is the duty of all courts to encourage ; and, in this respect, the statute is simply declaratory of the principles which courts of law and equity had observed for a long period prior to its enactment. — Young v. Leaird, 30 Ala. 371. The common law recognized the right; and, though statutes may prescribe the mode of submission, and the requisites of an award, they are not, unless so expressly declared, in abrogation of the common law. — Byrd v. Odem, 9 Ala. 755.

¶32-3. The object of the parties, in the submission of a controversy to arbitrament,is the ascertainment and determination of their respective rights, and the silencing of litigation; and this object would fail, if the award, when rendered, had. not the finality and conclusiveness of a judgment or decree of a court of competent jurisdiction. Such is the effect and operation the law accords to it, when it is within the submission, and determines and disposes of the matters in dispute. — Morse on Arbitration, 487. As the claim or demand, which is the subject of suit, is merged in the judgment rendered, the claims or demands submitted to arbitration are merged in the award rendered; and like a judgment or decree, the award may be pleaded in bar of any subsequent suit, founded on such claim or demand. — Morse on Arbitration, 490.

¶4The submission before us is very general in its terms. There is no other description of the subject of submission,1 on which the arbitrators must award, than the matters in controversy. To this general term the parties gave a definite application, when they appeared before the arbitrators, submitted their partnership transactions, and litigated their respective demands as partners. The subject-matter of submission was thereby rendered certain ; and to that the award must be referred. — Price v. White, 27 Mo. 275; Woodward v. Atwater, 3 Iowa, 61.

¶5An award can not be assailed collaterally.—Woodrow v. O’Conner, 28 Vt. 776. When pleaded in bar to a bill in equity, seeking relief as to matters it embraces, if on its face it is valid, the force and effect of a judgment must be allowed to it. If the complainant assails its validity, for extinsic facts, the bill must be amended, and these facts must be stated specifically. The principle is the same, as when a release is pleaded; or when, to a bill for general account, a stated, or a settled account is pleaded. Decrees must be founded on, and supported by pleading. Proof, without corresponding pleading, will no more authorize a decree, than pleading without corresponding proof. *160Caton v. Willis, 5 Ired. Eq. 335; McKinley v. Irvine, 13 Ala. 593; Paulling v. Lee, 20 Ala. 753; Crabb v. Thomas, 25 Ala. 212. A larger latitude, and less certainty of averment, may have been indulged by a court of equity, than was originally tolerated in courts of law. But, as is said in Duckworth v. Duckworth, 35 Ala. 70, “ It is a cardinal rule, founded in good sense, that a bill must show the complainant’s claim or title to relief, with such accuracy and clearness, and with such certainty, that the defendant may be distinctly informed of the nature of the case which he is called on to meet: matters essential to the complainant’s right to relief must appear, not by inference, but by direct and unambiguous averment.” The award, if valid on its face, is prima facie a bar to this suit, when connected with the evidence that the parties appeared before the arbitrators, and submitted for their determination their partnership transactions, and their liability to each other growing out of their relations as partners — the matters which form the gravamen of the bill, and in respect to which relief is sought. Until the bar of the award is removed, of these matters there can be no examination. If the bill assailed the award only, without allegation of the original transactions, and the injury he had suffered from it, the insufficiency of it would be admitted. Claiming relief on the original transaction only, without impeaching the award, which forecloses all inquiry into them, it is equally insufficient. In either instance, but a part of the case is disclosed, and but a part of the facts on which the right of relief depends are put in issue. Hence, the general rule we have stated, that an award can not be collaterally impeached by evidence. The grounds of objection to'it must be stated with precision.— Willingham v. Harrell, 36 Ala. 583; Routh v. Peach, 2 Anst. 519; Todd v. Barlow, 2 Johns. Ch. 551; Evert v. Evert, 5 Md. 353; 1 Dan. Ch. Pr. 371.

¶6We concede the proposition, urged by the counsel for the appellee, that the defendant, relying on an award as a bar, must show its existence, and its prima facie validity; and when offered in evidence, objections addressed to the fact of its existence, or to its invalidity, will be entertained. But, when its existence is shown, objections to its validity must be supported by matter apparent on its face, and not by matter extrinsic, which is not in issue.

¶74. The only objection, addressed to the existence of the award, is, that it is not shown the appellee entered into the submission. The answer could well be, that the fact is not disputed, either by pleading or evidence. But it clearly appears that he did enter into it. True, the submission appears to have been signed by H. Bain, in the joint names of H. & *161J. N. Bain. The appellee recognized the signature, appeared before the arbitrators in person, and without objection entered into the arbitration. If the signing was without previous authority, he thereby ratified it, and the ratification renders it obligatory.

¶85. Another objection urged, which does not depend upon extrinsic facts, is that the submission required the arbitrators to select a third person, to act with them in the determination of the controversy, and that failing to make such selection, or, rather, the award not disclosing that such selection was made, and is the award of the arbitrators named and such third person, it is void. This objection would be well taken, and would be fatal to the validity of the award, if it was not shown that the appellee consented to dispense with the selection of such person, and that the arbitrators named should proceed to hear and determine the matters submitted. The matters in dispute were mere pecuniary demands, and claims to personal property, which may be created, extinguished, or released, without writing. The original submission would have been valid, if merely verbal; and subsequent modifications of it by parol were operative. Valentine v. Valentine, 2 Barb. Ch. 437.

¶96. The remaining objection to the award is, that it is wanting in certainty, and does not finally determine the matters in controversy. The want of certainty and finality is supposed to rest in the failure of the arbitrators to declare and decide how the outstanding debts of the partnership were to be paid, or what disposition was to be made of the excess of partnership property Brewer had received. Certainty is essential to the validity of an award; and if, when compared with the submission, the courts cannot ascertain what it decides, it is void. — Reynolds v. Reynolds, 15 Ala. 403. Uncertainty, and the want of finality in an award, appear on its face, generally, when the submission, in terms, requires that the arbitrators shall decide several distinct matters, and as to one or more of these the award is silent, or states that no decision is made in reference to them; or, when a submission is general in its terms, and the award recites in detail the matters which are decided, and it is apparent these are but a part of the matters submitted. Under a general submission, like that in the present case, of all demands and controversies, or of “the matters in controversy,” arbitrators are not bound to enter into particulars, and express in their award each matter they have considered. Their duty, it is said, is best discharged, by the simple announcement of the result of their investigation. — Patton v. Baird, 7 Ired. Eq. 260. Under such a submission as the present, an award of a cer*162tain sum of money, as due from the one party to the other, is taken as a full execution of the submission. —Shirley v. Shattuck, 4 Cush. 472; Strong v. Strong, 9 Cush. 560; Karthaus v. Ferrer, 1 Peters, 222. That result cannot be reached properly, unless all the claims and demands the parties may have against each other are considered.

¶10Again, this objection involves extrinsic facts not put in issue. Neither by the submission, nor by the award, does it appear that there were outstanding debts against the partnership, or that Brewer had received of the partnership property more than Bain had received. These facts are disclosed only by the evidence. The award, on its face, is valid, and is a bar, not being impeached by appropriate allegations in the bill. No case could, more fully than this case, illustrate the importance and necessity of the rule which requires a plaintiff, impeaching an award, to state specifically the grounds of impeachment. The defendant had the right to be informed what were the objections relied on to defeat the award, and to reopen the controversy it was intended to close. Without informing him, the plaintiff introduces evidence of the partnership transactions, of debts created in tbe course of the partnership business, and of the shares of the partnership property each partner had received; and relies on the inferences which may be drawn from this evidence, and the results to which it leads, as indicating clearly that the arbitrators must have been guilty of partiality, or have fallen into gross error. But he neither avers nor proves that the arbitrators had before them the evidence now introduced. If he failed to introduce this evidence before the arbitrators, it was his own laches, and he forfeited all claim to rely on it subsequently, without excusing his neglect. —Stiff v. Washington, 5 Blackf. 473. If the award had been directly assailed, because the arbitrators, disregarding this evidence, had fallen into a gross error which vitiates it, the defendant would have been informed of the necessity of showing by proof that such evidence was not before them. The conjectures which have been indulged, as to what were the grounds on which tbe arbitrators proceeded, it may be, could have been dispelled; conjectures indulged, we may remark, in violation of the old and and established principle, that presumptions are made to support, not to defeat an award. We hold the award prima facie valid, and a bar to the case as it stands on the present pleadings.

¶11The validity of the award, however, seems to have been a principal point of litigation in the court below; and it is certain the appellee has given all the evidence he can introduce, to avoid it. It would not be decisive of the litigation, *163to reverse the decree, merely because of the insufficiency of the pleading. If, on appropriate pleading, the facts would not warrant setting the award aside, and entering into an account of the partnership transactions, it is better that we should pronounce the decree the chancellor ought to have rendered, and not by a remandment of the cause protract litigation.

¶127. The decree of the chancellor proceeds, mainly, on the ground that the award is unconscionable, and oppressive to the appellee. This may be good cause for setting aside an award] but it can be only when it clearly appears that the party complaining is free from fault or neglect; that having fairly and fully submitted the merits of his controversy, tbe arbitrators have wrought him injustice, either from partiality to his adversary, or from fraud and corruption; or that they have fallen into gross error, indicative of partiality, or of misconduct. It may be apparent that error has been committed — that the judgment of a court of competent jurisdiction would have been different, and that the losing party suffers injury. If the matter has been fairly tried by the arbitrators whom the parties have selected, it must be supposed that the possibility of falling into error was fully considered, and the risk of it consented to, when they were selected. The oppressiveness of the award is deduced from the fact, that the result reached by tbe arbitrators is so variant from that which is shown by the evidence to be the result on a fair and full statement of the partnership accounts. It cannot be said the arbitrators were guilty of error, or that partiality, or fraud, or corruption, can be imputed to them, however variant may be the award from this result, unless it had been shown they had such evidence before them. As well could the verdict of a jury be impeached, because of facts not in evidence, which would have compelled a different verdict. What evidence was before the arbitrators, is not shown, beyond their testimony, confirmatory of the recitals of the award, that the parties appeared, presented their accounts, and made their statements. _ No witnesses were examined, because none were offered, nor was it claimed by either party that any were desired. To impute to arbitrators gross error, nearly allied to, and indicative of corruption, because, in active litigation, by evidence not brought before them, it may be shown that the/award they have rendered works a wrong to the losing pairty, would be sheer injustice. Indeed, who can say they liafve erred? Who can say the evidence they had did not justify their conclusions ? A party entering into an arbitration must exercise the same diligence in presenting his *164claims, or defense, that he is required to exercise in suits at law or in equity. Laches is as fatal to relief against an award, as it is to relief against a judgment. All the evidence found in this record could, have been brought under the consideration of the arbitrators ; and if the appellee neglected its introduction, he must bear the consequences. Whatever of injustice it may disclose the award works, is not attributable to the arbitrators, nor to his adversary. —Stiff v. Washington, supra.

¶138. It is also urged by the chancellor, that the arbitrators must have taken into consideration the unfounded claim of the appellant, for waste to his plantation, committed or suffered by the appellee. If the claim was submitted to them— if it was a matter in controversy between the parties — its allowance, or disallowance, rested in their decision. It may be, if allowed to the appellant, an error of law was committed. But errors of law, committed by arbitrators, will not vitiate an award, unless it appears they intended to be governed by the law, and have mistaken well established principles applicable to the facts before them . —Pierce v. Perkins, 2 Dev. Eq. 250; Johnson v. Noble, 13 N. H. 286. While the error, which it is supposed the arbitrators committed in this respect, would not avoid the award, the supposition that it has been committed is mere speculation.

¶14The uncertainty of the award, and its want of finality, when construed in the light of the evidence, were also supposed to be fatal to it. This objection we have considered. The existence of partnership debt.s, or, if any existed, the liability of Brewer for them, was one of the matters in controversy, embraced in the submission. It had been the subject of unpleasant disputation for several months before the submission, and before the termination of the partnership. It is not possible to avoid the conclusion, that they were considered by the arbitrators, and, so fa? as they are now shown, disallowed, or materially reduced. \ They were, doubtless, of the accounts the appellee submitted,vand which he claimed should be allowed to him. This is afeo true of the claim that Brewer bad received a larger shaue of the partnership corn and cotton than he was entitled to receive. These matters must have been considered, before thfe arbitrators could have reached the conclusion, that there was a debt due from the appellee to the appellant. Such .debt could not exist, until there had been an examination of\ the partnership accounts, the liability of each partner was ascertained, and the claims against the partnership to which each was entitled, and then it was ascertained what was due from the one partner to the other. All this the award imports \as *165having been done, and it is a final, conclusive settlement of the partnership transactions of these parties, certain and definite in its terms.

¶15Every consideration of policy, which attaches conclusiveness to judgments, applies with equal force to awards. It is as essential to the peace of society, and to the security of individuals, that, when free from fraud, corruption, or partiality- — -when fairly made, and when they are definite and certain in their results — that their conclusiveness and inviolability should be maintained, as that judgments should not be disturbed, or the litigation they involved be reopened. The award not being subject to any of the objections made to it, if these objections were well pleaded, it must prevail, as a bar to the suit.

¶16The result is, the decree must be reversed, and a decree here rendered dismissing the bill, at the costs- of the appellee.