There is a class of cases upon awards to be found in the books
in which arbitrators have been held to more than ordinary
strictness in pursuing the terms of the submission and in awarding
upon the several distinct matters submitted upon the ground of this
submission's being conditional,
ita quod. But the rule is
to be understood with this qualification -- that in order to
impeach an award made in pursuance of a conditional submission on
the ground of part only of the matters in controversy having been
decided, the party must distinctly show that there were other
points in difference of which express notice was given to the
arbitrators and that they neglected to determine them.
One partner, during the continuance of the partnership, cannot
bind the other partner to a submission of the interests of both, to
arbitration, but he might bind himself so as to submit his own
interests to such decision.
It is a settled rule in the construction of awards that no
intendment shall be indulged to overturn an award, but every
intendment shall be allowed to uphold it.
If a submission be of all actions, real and personal, and the
award be only of actions personal, the award is good, for it shall
be presumed no actions real were depending between the parties.
When, upon a submission by one partner of all matters in
controversy between the partnership and the person entering into
the agreement of reference, an award was made directing the payment
of money in an action on the bond to abide by the award, the breach
assigned was that the partner who agreed to the reference did not
pay, &c., this is a sufficient assignment of a breach, as he
only who agreed to the reference was bound to pay.
On 16 January, 1823, the plaintiff in error gave an arbitration
bond in the usual form, with sureties, to the defendants in error,
in which it was set forth that
"Whereas certain disputes, differences, and controversies, have
arisen and are still depending between the above bounden Charles W.
Karthaus, acting for the late house of Charles W. Karthaus &
Co. and himself, and the above named Francisco Yllas y Ferrer and
Josef Antonio Yllas, for the ending and determining the disputes,
differences, and controversies aforesaid and all actions, suits,
claims, and demands whatsoever concerning the same, the said
parties have agreed to refer the same to the award, judgment, and
determination of Lewis Brantz and Henry Child, both of Baltimore,
merchants, arbitrators indifferently chosen, and named by and on
behalf of the said parties, to award, order, arbitrate, judge, and
determine concerning the same. And if the said arbitrators cannot
determine the same, that then the same shall be fully ended and
determined by a third person to be by them chosen as an umpire in
such
Page 26 U. S. 223
manner as hereinafter is in that behalf mentioned and
expressed."
"Now the condition of this obligation is such that if the above
bound Charles W. Karthaus, his heirs, executors, administrators,
and every of them shall and do for and on his and their parts in
and by all things stand to, obey, abide, perform, fulfill, and keep
the award arbitrament, order, determination, final end, and
judgment which shall be by them, the aforesaid arbitrators, made,
of and concerning the premises, and of all disputes, differences,
actions, suits, claims, and demands whatsoever touching and
concerning the same, so as such award, arbitrament, determination,
final end, and judgment of the said arbitrators, of and in the
premises, be by them made and given up in writing under both their
hands and seals, ready to be delivered to each of the said parties
in controversy in fifty days from the day of the date hereof."
"And if they the said arbitrators of and in the said premises
cannot agree, end, and determine the same in fifty days from the
day of the date hereof, that then if the said Charles W. Karthaus,
his heirs, executors, administrators, and every of them shall and
do, for and on his and their parts, in and by all things, stand to,
obey, abide, perform, fulfill, and keep the award, arbitrament, and
umpirage, of the above named arbitrators, and such third person and
umpire, as they the said arbitrators, shall indifferently name,
elect, and choose for the ending and determining the same premises
or a majority of them, so as such award, umpirage, and judgment of
the said arbitrators and umpire or a majority of them of and
concerning the same be by them so made and given up in writing
under their hands and seals, ready to be delivered to each of the
said parties in controversy, in sixty days from the day of the date
hereof, this obligation to be void and of no effect, otherwise the
same shall remain in full force and virtue."
Upon this reference, the following award was made under the
hands and seals of the arbitrators and the umpire:
"We, the undersigned, Henry Child, and Lewis Brantz, as
arbitrators, and Michael McBlair, as umpire, acting in virtue of
the annexed bond or instrument of writing, do hereby award and
adjudge that the late firm of Charles W. Karthaus & Co. pay or
cause to be paid unto Francisco Yllas y Ferrer and Josef Antonio
Yllas, or their representatives, the sum of $1,475 for a balance of
the general account current between the parties, and also the sum
of $1,398 for a balance arising out of the moneys recovered for the
brig
Arogante Barcelonese and cargo, in which award a
parcel of cutlasses or their
Page 26 U. S. 224
proceeds are considered as becoming the property of said Yllas y
Ferrer."
"Given under our hands and seals, in Baltimore, this 8 March,
1828."
To an action on the bond against the plaintiff in error he
pleaded the condition and that no award had been made. The
defendants in error replied and answered and set it out as stated,
and there was a demurrer to the replication, which the court
overruled, and a judgment was entered for the plaintiff below. In
this judgment error was alleged, and before this Court the
plaintiff in error sought to maintain:
1. That the award is not agreeable to the submission.
2. It is not certain, final, and mutual.
3. It directs an act to be done by strangers.
4. It is defective in other respects.
Page 26 U. S. 225
MR. JUSTICE TRIMBLE delivered the opinion of the Court.
This was an action of debt brought by Francisco Yllas and Josef
Antonio Yllas against Charles W. Karthaus on an arbitration bond in
the Circuit Court of the District of Maryland.
The defendant, after oyer of the condition of the bond, pleaded,
no award made, &c. The plaintiff replied, setting
Page 26 U. S. 226
forth the award in
haec verba and assigning a breach;
the defendants demurred generally and the plaintiff joined in
demurrer. The circuit court having given judgment upon the demurrer
in favor of the plaintiffs, the defendant has brought the case up
by writ of error for the consideration of this Court.
The first and principal ground relied on by the plaintiff in
error for the reversal of the judgment is that the award is not
agreeable to the submission in this, that two several distinct
controversies, the first between the plaintiffs and the late house
of Charles W. Karthaus & Co., and the second between the
plaintiffs and Charles W. Karthaus individually, were submitted to
the referees, and that they left the latter undetermined. The
condition of the bond, after reciting, that certain disputes,
differences, and controversies have arisen, and are still depending
between the above bound Charles W. Karthaus, acting for his late
house of Charles W. Karthaus & Co., and for himself and the
above named Francisco Yllas y Ferrer and Josef Antonio Yllas,
&c., "refers the same to the referees named, and their umpire,
and binds the said Charles W. Karthaus, &c., to abide by and
perform their award," so as such award, &c.,
"of the arbitrators of and in the premises be by them made and
given up in writing under their hands and seals, ready to be
delivered to each of the said parties in controversy in fifty
days."
The arbitrators, and their umpire, within the time limited by
the submission, made and delivered their award in writing, under
their hands and seals, in the following words, to-wit:
"We, the undersigned, Henry Child and Lewis Brantz, as
arbitrators, and Michael McBlair, as umpire, acting in virtue of
the annexed bond, or instrument of writing, do hereby award and
adjudge, that the late firm of C. W. Karthaus & Co. pay to
Francisco Yllas y Ferrer, and Josef Antonio Yllas, or their
representatives, the sum of $1,475, for the balance of the general
account current between the parties, and also the sum of $1,398,
for a balance arising out of moneys received for the brig Arogante
Barcelonese, and cargo, in which award, a parcel of cutlasses or
their proceeds are considered as becoming the property of the said
Yllas y Ferrer."
It is plainly seen from the face of the award that the
arbitrators have not contradistinguished between Charles W.
Karthaus as a member of the late house of Charles W. Karthaus &
Co., and Charles W. Karthaus as an individual, unconnected with his
late house. The argument is that this omission of the referees
vitiates the award. It is said that this, being a conditional
submission,
ita quod, the arbitrators were bound to pursue
the submission strictly, and to award, of and
Page 26 U. S. 227
concerning every matter referred to them. In support of this
argument, the counsel referred to
Randall v. Randall, 7
East 80, and several other cases less apposite.
That there is a class of cases in the books in which arbitrators
have been held to a more than ordinary strictness in pursuing the
terms of the submission, and in awarding upon the several distinct
matters submitted, upon the ground of the submission being
conditional,
ita quod, is conceded. The case of
Randall v. Randall is a leading case of that class. Lord
Ellenborough, C.J. in delivering the opinion of the court,
says:
"The arbitrators had three things submitted to them; one was to
determine all actions, &c., between the parties; another was to
settle what was to be paid by the defendant for hops, poles, and
potatoes, in certain lands; the third was to ascertain what rent
was paid by the plaintiff, to the defendant, for certain other
lands. The authority given to the arbitrators, was conditional,
ita quod, they should arbitrate upon these matters, by a
certain day. The arbitrators have stopped short, and have omitted
to settle one of the subjects of difference stipulated for."
This case was adjudged according to the rule laid down in the
books; that if the submission be conditional, so as the arbitrator
decide of and concerning the premises, he must adjudicate upon each
distinct matter in dispute, which he has noticed. Kyd, 177.
But the rule is to be understood with this qualification, that
in order to impeach an award, made in pursuance of a conditional
submission, on the ground only of part of the matters in
controversy having been decided, the party must
distinctly
show that there were other points in difference, of which express
notice was given to the arbitrator, and that he neglected to
determine them.
Caldwell 105' Kyd, 177; Cro.Car. 216;
Baspole's Case, 8 Co. 98;
Ingraham v. Milnes, 8
East 445.
That Lord Ellenborough understood and intended to apply the
rule, as thus qualified, in
Randall v. Randall, is
manifest. For Mr. Espinasse, in commenting upon
Baspole's
Case, having observed that it is said in that case, that
though there be many matters in controversy, yet if only one be
signified to the arbitrators, he may make an award for that, for he
is to determine according to the
allegata et probata --
and it is in every day's practice that an award may be good in
part, and bad in part. Lord Ellenborough, in answer to that
argument, replies
"That is, where it does not appear there is any notice to the
arbitrator, on the face of the submission, that there is any other
matter referred to him, than those which are mentioned to him at
the time of the reference. But here it does expressly appear, that
there was another matter referred, on which there is no
arbitrament. "
Page 26 U. S. 228
In this case, it is not pretended that any notice was given to
the arbitrators of any other matter unless that notice was given on
the face of the submission.
The question then is does it distinctly appear from the face of
the submission that any other point of difference between parties
was submitted, and of which the submission itself gave the
arbitrators notice, but which they have neglected to determine.
If, as the argument supposes, there was any point in difference,
which concerned Charles W. Karthaus individually, as
contradistinguished from the points in difference which concerned
him as Charles W. Karthaus, of the late firm of Charles W. Karthaus
& Co., what was that point of difference?
No satisfactory answer has been given, and it is believed none
can be given, to this inquiry. How then can it be maintained that a
distinct point in difference between the parties was referred, and
by the reference itself notified to the referees, which they have
neglected to determine? The case of
Ingraham v. Milnes is
a strong authority to show that although the submission be
conditional,
ita quod, there must be a distinct
specification, as in
Randall v. Randall, to sustain the
objection that part has been omitted by the arbitrators. Here the
submission is in very general and we think in very vague and
ambiguous terms. It speaks of disputes, differences, and
controversies between Charles W. Karthaus, acting for the late
house of Charles W. Karthaus & Co. and for himself, and the
plaintiffs. But how or in what he acted for the one or the other is
not specified. The terms "late house" imply the former existence
but present nonexistence of the late house of Charles W. Karthaus
& Co. He may be the only surviving partner, the firm having
ceased by the death of the other members. But if the firm was
continuing, Charles W. Karthaus, while he must be admitted to be
perfectly competent to submit to reference his own interests in the
firm, could not, by his submission, bind his partners. He might
bind himself to perform whatever the award directed the firm of
which he was a member to do, so that either way it was a submission
of his own interest only. In order to overturn the award, it is not
enough that he may have had different and distinct interests in his
individual and in his partnership character. It is a settled rule
in the construction of awards that no intendment shall be indulged
to overturn an award, but every reasonable intendment shall be
allowed to uphold it. Thus, if a submission be of all actions, real
and personal, and the award be only of actions personal, the award
is good -- for it shall be presumed no actions real were depending
between the parties. Kyd, 72, and
Baspole's Case, before
cited.
Page 26 U. S. 229
So in this case, although the submission speaks in general terms
of disputes, differences, and controversies with Charles W.
Karthaus, acting for his late house of C. W. Karthaus & Co. and
for himself, it shall not be intended there were any controversies
with C. W. Karthaus individually other than those decided by the
arbitrators. If any such did exist, inasmuch as they are not
specifically and distinctly set forth in the submission, so as to
give notice to the arbitrators, it was the duty of the party to
show by averment and proof
aliunde they were brought
before the referees.
There is no analogy between this case and
Lyle v.
Rogers, 5 Wheat. 394, cited at the argument. In
that case, it was decided that where claims against a party, both
in her own right and in her character of administratrix, were
submitted to arbitrators, it was a valid objection to the award
that it awarded a gross sum to be paid by her, without
distinguishing between what was to be paid by her in her own right
and what in her representative character. THE CHIEF JUSTICE, in
delivering the opinion of the Court, explains the reason and ground
of the decision by observing
"if this award was made against Mrs. Dennison as administratrix,
she would not only be deprived by its form of the right to plead a
full administration (a defense which might have been made before
the arbitrators, and on which their award does not show, certainly,
that they have decided), but also of the right to use it in the
settlement of her accounts as conclusive evidence that the money
was paid in her representative character. If this objection to the
award is to be overruled, it must be on the supposition that it is
made against her personally; yet the statement of facts shows the
claim against her to be in her representative character."
This reasoning cannot apply to the case before the Court. It is
of no sort of consequence to C. W. Karthaus whether he is directed
to pay as Charles W. Karthaus individually or as Charles W.
Karthaus of his late house of C. W. Karthaus & Co. In each
case, he is bound personally to pay, having bound himself so to do
by the submission, and the award, if in any case it would be
evidence for him against the firm, would not be conclusive, as he
had no power to bind his partners, if any existed, by his
submission. It is objected that the award is not certain, final,
and mutual. It was said in argument that as the first sum awarded
is expressed to be for a
"balance of the general account current between the parties; the
general account current must be understood to include all accounts
between them, and hence that the second sum awarded for a balance
arising out of moneys received for the brig
Arogante
Barcelonese is included in the first, and the party thus twice
charged, or at least that it does not certainly appear otherwise.
"
Page 26 U. S. 230
We think there is no foundation for this argument. To indulge
such a supposition would impute either manifest injustice or gross
negligence to the referees. Great stress was laid in the argument
on the uncertainty of the closing clause of the award, in these
words, "in which award a parcel of cutlasses are considered as
becoming the property of said Yllas y Ferrer." There is
considerable doubt and uncertainty as to the meaning of the
arbitrators in the use of these terms. And had this uncertainty
appeared in any part of the award, intended for the benefit of the
defendant, it would perhaps be fatal to the whole award. Had that
been the case, it would be hard and unjust to compel him to perform
that part of the award which is onerous to him when he could not
have, on account of its uncertainty, that which would be beneficial
to him. But however doubtful the precise intent and meaning of this
part of the award may be, it is certain it was intended as a
benefit in some way to Yllas y Ferrer over and above the two sums
of money directed to be paid to the plaintiffs. The defendant can
have no reason to complain that the plaintiffs or either of them
may not, on account of this uncertainty, be able to obtain all the
benefits intended by the award, nor can it furnish any reason for
withholding from them that to which they are certainly
entitled.
It is deemed a sufficient answer to the objection of want of
mutuality in the award to remark that great stress was laid in the
early cases upon the mutuality of an award, but at present it is by
no means considered necessary that each party should be directed to
do or not to do any particular thing, Cald. 113. Two had submitted
to an award; nothing was awarded as to one party but that all
actions should cease. The court held it a good award,
Harris v.
Knight, 1 Levz. 58.
In
Palmer's Case, 12 Mod. 234, one party was directed
to pay money to the other without any directions' being given to
the latter in any way, and again it was awarded that A should pay B
40 shillings for a trespass; Freeman 204. The respective awards
were considered unimpeachable. These cases fully establish the
principle above laid down. An award is regarded as final when it is
an absolute conclusive adjudication of the matters in dispute, and
there is no reason to doubt the conclusiveness of the adjudication
in this case as to the two sums of money directed to be paid, and
that the award will operate as a bar to any future litigation upon
the accounts for which they are given. Again, it is objected that
the award directs an act to be done by strangers. This objection
grows out of the direction in the award that "the late firm of C.
W. Karthaus & Co. pay, &c." Whatever might be the force of
this objection if it were true in point of fact, we cannot so
regard it. So far as
Page 26 U. S. 231
appears upon the record, the late firm or house of C. W.
Karthaus & Co. and C. W. Karthaus are one and the same person
-- or, more properly speaking, it does not appear that there is any
other person
in esse belonging to that firm than C. W.
Karthaus himself. If there be any other person
in esse of
the late house of C. W. Karthaus & Co., it cannot be truly
affirmed that he and the house of which he was a partner are
strangers to each other. But we cannot, consistently with the rules
of law, presume or intend there is any other; indeed, in support of
the award, it may reasonably be intended there is not, as the party
objecting was cognizant of the fact, and might have shown it if
true, but has not. The direction that the late firm of C. W.
Karthaus & Co. shall pay unquestionably includes C. W.
Karthaus, and no other person appearing to exist, it is equivalent
to a direction that he shall pay. This reason is applicable to the
last ground assumed by the counsel for the plaintiff in error, for
a reversal of judgment -- namely that the replication is
insufficient because, in assigning a breach, it only alleges C. W.
Karthaus had not paid. As no other was or could be bound by the
submission and award to pay, and he was bound, it was a sufficient
assignment of a breach of the condition of his bond to allege that
he had not paid the money awarded in favor of the plaintiffs.
Upon the whole, it is the opinion of this Court that there is no
error in the judgment of the circuit court, and the same is
Affirmed with costs and damages.
