Boretts v. Patterson, Tay. 37, 1 N.C. 126 (N.C.Super.L. & Eq.), 1799 WL 125 (N.C.Super.L. & Eq.))

Superior Courts of Law and Equity of North Carolina.



Tayl. 37

1 1. Awards are to be construed liberally; and in mercantile transactions, not admitting of certainty, nice objections ought not to defeat an award, if that to which the objection of uncertainty is made, can be ascertained by the context, the objection shall not prevail.

2. The meaning of the rule that an award must be mutual, is that the thing awarded to be done shall be a final discharge of all future claims by the party in whose favor the award is made against the other for the cause submitted.

After argument in this case by Williams for the plaintiff and Duffy for the defendant, and time taken for consideration, the case was stated and the opinion of the Court delivered by TAYLOR, J., as follows: This is an action of debt upon an arbitration bond; oyer of the condition is craved, which is set out on the record, and is in these words: “The condition of the obligation is such, that, whereas, in the years one thousand seven hundred and eighty-three and eighty-four, they, the above Bell Smith & Co. and William Borretts, did, in consequence of some previous consultations and conclusions, send by sundry conveyances as well by sea as land, goods, wares and merchandise, to the care, management and disposal of the said James Patterson, to a considerable amount, and whereas, there is a controversy in regard to the statement and settlement of those affairs; and, whereas, all parties mutually agree that the said dispute shall be wholly put to arbitration, and have accordingly chosen John London and Amasiah Jocelyn, with an umpire to be chosen by them, if necessary, arbitrators finally to enquire and decide for each and every of the parties, relative to the matters before recited; now, therefore, if the said James Patterson shall and do ultimately, decidedly and finally, abide by and conform to the sentence, judgment and decision of the aforementioned arbitrators, and confirm their award with regard to the premises, and shall in future at all times acquiesce in the same, and shall accordingly either make payment or receive payment, as the case may be, then the aforesaid obligation to be void,” etc. To this the defendant has pleaded that no award was made; the replication sets out an award in the following words: “We have examined the matters in dispute between Bell Smith & Co. and William Borretts, and James Patterson, of Fayetteville, merchant, and do find that, after fully adjusting the advance on goods, and the respective charges and commissions on the sales and remittances, there remains due on these transactions at their close (sixteenth July, 1784), to Bell Smith & Co. and William Borretts the sum of £>>>>>>401, 8, 3, from the said James Patterson. If any outstanding debts are made to appear due on the said concern, they are to be allowed against the said balance; provided Mr. Patterson shall make it appear that he hath taken proper means for the recovery in due time, agreeably to law” Upon these pleadings the jury have found a verdict for the plaintiff, and the Court have now to decide upon the sufficiency of the award. The objections made against it are, that it is not certain, for it directs nothing to be paid; that it is not final, since it opens a new source of litigation; or, at best, leaves the parties as they were before the reference; and because it does not appear whether the outstanding debts were due before the reference, whereas they may possibly have accrued since; that it does not appear who is to ascertain whether the defendant has used due diligence, and is in consequence entitled to the deduction; and, lastly, because it is not mutual, inasmuch as it directs nothing to be done by the plaintiff.

2 There is no subject in the laws upon which ancient cases are more obscure, or convey less exclusive information than awards. To adopt them in the rigorous application of the rules of construction, or to pursue them through their endless subtlety of refinement, would be, in truth, to render awards of no use, in the main purpose of their introduction--re-adjusting the controversies of men, before a domestic tribunal, unattended with expense, trouble or delay. Of this nicety many instances may be adduced; but one will be sufficient to attest it. A submission was to the award of four men by name, so as the same award be made and delivered up in writing by them or any three of them; it required several solemn arguments to convince the Court that these words gave authority to any three of the arbitrators to make the award, they supposing that it could not be the same award unless made by the four. If courts of justice had continued in the practice of scanning awards with such rigid scrutiny, the effect would have been that a mode of trial highly beneficial to mankind must long since have disappeared.

But sound and rational interpretations have at length prevailed; and we are furnished with two rules; one respecting awards in general, in 1 Burr., 277, which is to adopt a liberal construction, in order that awards may answer the purpose for which they were intended; the other is in 2 Atkyns, 501, that in mercantile transactions, which do not admit of certainty, nice objections ought not to defeat awards. Nevertheless awards must have, to a common intent, all those qualities, the want of which is objected to the present one; but whether that possesses them or not, should be examined in the true spirit of these rules, and of some others established by law, to advance the utility of this mode of proceeding.

As to the objection of uncertainty, it should be noted that the parties to this transaction, submittants and arbitrators, are merchants; amongst whom, to say a sum of money is due, is equivalent to a promise of payment, and so understood by debtor and creditor; and amongst all persons such an acknowledgment will revive a debt, barred by the statute of limitations, even if the condition of a bond is that a person shall render a fair, just and perfect account in writing of all sums received, yet, if the obligor neglect to pay over such sums, he is guilty of a breach of the condition. Douglas, 382; Bache v. Proctor. But if terms of this bond are, that the defendant shall acquiesce in and confirm the award, and make payment if the case may be so; now it is difficult to conceive how he can comply with this condition, and yet refuse to make payment on the award. An award that the one should keep the goods in dispute, paying so much to the other, has been construed imperatively that he should pay; L. Raymond, 612; for if the words of an award have any ambiguity in them, they shall be so construed as to give effect to it. The principle of this submission was, that whoever appeared to be the debtor, should pay; the arbitrators have found who was the debtor, and the consequence must follow.

3 In the settlement of transactions of this kind, the chief difficulty usually is to fix and ascertain the rule by which the account shall be adjusted; a merchant and factor are more apt to disagree respecting the commissions, extra charges, and price of the produce remitted, than concerning the amount or price of the goods originally consigned. So many unforeseen events arise out of the mode of doing business, and the circumstances of the country, that although they understand each other in the beginning, the application of some rule is necessary to the intervening circumstances. When, therefore, by the interposition of friends, they have ascertained the rule by which their accounts shall be settled, the rest is a mere operation of arithmetic which they themselves can as well perform. So that, although the amount of the outstanding debts is uncertain, yet it may be rendered certain by the defendant; to whom alone it was known, and who might consequently have availed himself of this clause, inserted exclusively for his benefit. It does not appear on the face of the award that the arbitrators knew there were any outstanding debts due on the concern; and if there were any, it must now be intended, after verdict, that the defendant would have claimed the benefit of this provision.

On the other hand, if the outstanding debts had amounted to a larger sum than is found due from the defendant, a total silence in the arbitrators respecting them might have worked injustice. The other parts of the clause, such as that the defendant shall make it appear that he hath taken proper means for the recovery in due time, signify no more than the law would have implied without them; that the company should not sustain the losses occasioned by his negligence. But there are authorities which apply with some force against this objection; as in Rolle, 250, an award that one shall pay his proportion which shall appear due upon an account; so in Strange, 903, it is held that if an award is as final as the nature of the thing will admit of, it is sufficient; as where Marshall, at the instigation of Knightly, brought a qui tam action against Phillips, in behalf of himself and the poor of the parish; Phillips for himself, and Knightly in behalf of Marshall, submitted by bond all matters in difference between the parties to arbitration. It was awarded that Knightly should execute a covenant to indemnify Phillips against all costs, damages and expenses which happen by means of any further proceedings in the qui tam action; the objection taken to this award was, that it was not final, not putting an end to the suit, but only giving a new action of covenant. But it was held that the award was sufficienty final, and that at any rate it was not competent to the defendant to make this objection, and that the arbitrators had done everything they could do to make their award final. To this may be added the case of Beale v. Beale, 3 Vent., 65, where it was awarded that one party should pay his part of the expenses of the voyage, and allow on account his proportion of the loss which should happen to the ship during the voyage; this was held good because the expenses and the loss might be ascertained by calculation.

4 It is another rule in the construction of awards, that if that to which the objection of uncertainty is made, can be ascertained either by the context of the award, or from the nature of the thing awarded, or by a manifest reference to something connected with it, the objection shall not prevail. This rule furnishes an answer to the objection, which states that it does not appear when the debts accrued. Undoubtedly the arbitrators would have exceeded their powers if the debts had accrued after the submission; but that is impossible, from the nature of the transaction, because it appears on the face of the award that the connection closed the 16th July, 1784; consequently all the debts must have accrued before that time.

The meaning of the rule as to the want of mutuality is, that the thing awarded to be done shall be a final discharge of all future claims by the party in whose favor the award is made, against the other for the cause submitted. The recovery in this action is an effectual bar against any future claims the plaintiff can set up on account of this award, the judgment here being for the penalty of the arbitration bond.

For these reasons we think there must be judgment for the plaintiff.

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