Case ID: nc_12/html/0082-01.html
Source: Caselaw Access Project
Author: {"author": "Tayior, Chief-Justice. Ham, Judge.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Henry Williams v. Daniel Wood.
    From Rowan.
    A reference as to a disputed fact, is not analagous to d submission to arbitration ; the latter implies an exercise of judgment, and gives an authority to decide ; the former requires only the recollection of a fact, and the statement of it as a witness. Hence the statements of such a referee are not conclusive.
    Covenant upon the following instrument:
    “ The condition on which Henry Williams and Daniel Wood settled is this : — The said Wood is to pay to the said Williams three hundred and sixty dollars ; one hundred dollars of which sum, was paid at or before the signing of this ; and the balance to be paid as soon as they can conveniently get James Brooks to testify, what money was returned by him, to the said Wood, for George Williams, out of the two hundred and seven dollars, which sum Williams says he received, and sent it back, by said Jirooks, to said flood. Now if the said Brooks shall say that he r-lumed the whole of the two hundred and seven dollars, then the said Wood is to pay said Williams two hundred and sixty dollars, and whatever he sa.tshe returned less than two hundred and seven dollars, to be deducted out of the two hundred and sixty dollars. I). W. [i. s.]
    H. W. [n. s.]”
    
      Brooks, on being asked, said lie bad returned but 100 dollars ; the Plaintiff contended that Brooks had returned to Wood 200 dollars, whereupon this action was brought. On the trial, Jirooks swore that he returned but 100 dollars. The Plaintiff proved that the Defendant and Brooks both, had acknowledged, that 200 dollars had been returned by the latter ; this evidence w;as objected to by the Defendant, but was admitted by the Court; the Plaintiff also proved by several witnesses, that Wood had received 200 dollars by the hands of Brooks.
    
    His honor, Judge Dakxei, charged the jury, that if they believed from the evidence, that Brooks swore falsely, or was mistaken, they ought to find for the Plaintiff.
    A verdict being returned for the Plaintiff, a rule for a new trial discharged and judgment entered up upon the verdict, the Defendant appealed.
    
      Nash, for appellant.
    The parties have referred the matter to the decision of Brooks, as an arbitrator. • In actions on arbitration bonds, the breach assigned must be either a refusal to submit, or non performance of the award. The Court cannot look beyond the written contract of the parties, even to alter the time. {Kyd, 293, Telver. 153, 4 Burr 2229, 3 D. & E. 590.) Here the parties are in a Court of law, and the Plaintiff must recover according to the rules of law. The Defendant has covenanted to pay, whatever Brooks said was due. The Plaintiff seeks to recover a sum which Brooks says is not due.
    The Judge erred in admitting the declarations of Brooks, and of the Plaintiff, to be given in evidence; because the law of the case to the parties, and to the Court was the award of Brooks. (Kyd, 311, 3 D. & E. 592, note 8 Rep. 82.)
    Neither a Court of Law nor of Equity, can hear anything in opposition to the covenant, substitute themselves in the place of the umpire, or vary the terms of the contract. (6 Ves. J. 34, 9 ditto 608, 13 ditto 73, 81, 14 ditto 401.)
    
      Badger, for the appellee.
    The only question is upon the construction of tiiis instrument. It is not like an agreement to submit to arbitration, or a reference to ascertain value, which is the fact in all the cases cited.
    
      Brooks was referred to, not as an umpire, to settle a controversy, or as a person of skill, to ascertain value, upon a contract then originated, but simply as a witness, to testify to a disputed fact. A reference creates a forum to decide between parties, and implies a power not only to decide as to facts, but to pronounce a definitive sentence, requiring an exercise of judgment, and if this forum does not act in the prescribed manner, the parties are remitted to their original rights.
    Upon the principles contended for on the other side, if Brooks had died, or refused to say any thing, the Plaintiff could have no remedy. The original liability is extinguished by the deed, and having no right of action on this, he could not recover the sum which upon its face is due, clear of all controversy.
    The Judge was right in receiving the testimony j Brooks came into Court as an ordinary witness, subject to all those tests by which the credibility of witnesses is ascertained.
   Tayior, Chief-Justice.

It appears to me that the intention of the parties to this covenant, does not admit of any reasonable doubt.

The Defendant undertakes to pay the Plaintiff the balance due to him, upon the settlement of their accounts. The precise sum due, depended upon the amount paid the Defendant tlirough the bands of Brooks, and on account of Geora'e Williams, who had borrowed two hundred dollars from the Defendant. If this whole sum liad been repaid to the Defendant, he then owed the Plaintiff two hundred and sixty dollars ; and that tiie fact was so, was allcdged by the Plaintiff; if, a less sum than the two hundred dollars had been repaid, then the balance due the Plaintiff, would be lessened in proportion ¿ and this was contended for on behalf of the Defendant.

But as Brooks was known by both parties, to have been the instrument of payment, it was natural to refer to him, in the first place to ascertain the amount, ami it could not have entered into the contemplation of either party, that his assertion as to the amount, should be conclusive upon them, if they could show, that either his memory, or his integrity, had abandoned him. This is evident from the words themselves, which are as soon as they can conveniently get James Brooks to testify what money was returned,” which is equivalent to saying, as soon as they can get him to give evidence of the sum returned. As a witness, his evidence would be open to examination, and might be opposed by other testimony ; nor would Wood have been bound by his assertion, if it had charged him with the receipt of the whole sum, any more than Williams is, when it charges him with less.

, Taking this to be the clear intent of the parties, apparent 'upon the instrument, is right, according to the established rules of law, which are in this case, the dictates of natural justice, to be so construed as to correspond with that intention. A performance according to the letter, which contravenes the spirit of a covenant, is not a legal performance; as where the condition of a bond was, that the Defendant should, before a certain day, deliver to the Plaintiff a bond, wherein the Plaintiff was bound to the Defendant. If before that day, the Defendant sues the Plaintiff on the bond, and recovers, though on the day he delivers it up, yet it is no perfor-.manee, for it coubl not be the intention of the parties, that it should be pot in suit. [Teats case, Cro. Eliz. 7.)

And if the construction were even doubtful, the rule of law is, that it is to be taken in that sense, which is most strong against the covenantor, and beneficial to the other party ; as a covenant to pay a certain sum per an-num■, without saying for how long, it was held it should be for the life of the Plaintiff. (1 Lev. 102.)

I think it follows irresistibly from these premises, that if the Defendant had been allowed to prevail on the plea of “covenants performed,” by proving that Brooks had said he had returned only glOO; and all enquiry had been shut out, as to the fact from other sources, it would not have been a real and faithful performance of the covenant, but evasive and illusory.

The law will not permit men thus to escape from their deliberate engagements, but uniformly exacts from them such a performance as will satisfy the true spirit and intention of the contract. Of this, the case of Griffith v. Goodhand, (Tho. Raym, 464) furnishes a strong illustration. There, the covenant was to deliver to the Plaintiff seven parts of all the grains made in the Defendant’s brew house; and one breach assigned was, that the Defendant did put divers quantities of hops into the malt, of which the grains were made, by reason whereof, they were spoiled, and became unprofitable to the Plaintiff. After a verdict for Plaintiff, there was a motion in arrest of judgment, that this breach is out of the articles which contain no covenant not to put hops in the grains. But the Court held clearly, that as it was the intention of the parties, that the Plaintiff should have the grain for the use of his' cattle, whatever rendered them unfit for that use, was a violation of the spirit of the contract, though within the. letter. So if I covenant that I will leave all the timber, which is growing on the land 1 hire, upon the land at the end of the time, if I cut it down, though I leave it on the laud, it is a breach of my covenant. So if I covenant to deliver so many yards of cloth, and I cut it in pieces, and then deliver it, it is a breach of my covenant, for the law reprobates all such evasions in fraud of-that good faith, so essential to the welfare, of society. So, as the design of this covenant was, to enforce the payment of the sum due from Wood, the finding of a less sum in obedience to the testimony of Brooks, opposed by the witnesses, and the Defendant’s own acknowledgment, would be a departure from common honesty.

The recovery in this case has been resisted, on the ground that Brooks was agreed upon by the parties, as an arbitrator to decide upon the sum paid by him to Wood, and that his decision was to be conclusive upon the parties.

But the analogy strikes tne as wholly imperfect; for arbitrators are called upon to exercise their judgment on the subject in dispute, to enable them to do which, they hear testimony, and decide upon the impression this made upon their minds, by the communication of knowledge from others. But here no judgment, was necessary to be exercised $ either one sum or the other had “been paid to Wood, and it required only a simple effort of memory by Brooks, to ascertain which sum. If the name of the person returning the money had not been recol.lected, then the covenant would have bound Wood.to pay the two hundred and sixty dollars or not, according as evidence should be given of his receiving the two hundred dollars.

Then the insertion of the name of Brooks, evidently made in the very reasonable expectation that he would remember correctly, and state truly, the real sum, cannot possibly change the nature of the contract. In principle, it resembles the case where a man says, “ prove the debt, and I will pay you ; or prove the debt by the person paying the money, and I will pay it.” In either case, it would be competent for the Plaintiff to prove it 0n the trial of the. action, and consequently, for the Defendant to introduce counter evidence. (1 Comyn’s. Dig. 140.)

The cases in the Court of Equity, cited by the Defendant’s counsel, proceed upon the principle, that, there is to be an exercise of judgment by the person chosen by the parties to a contract. Thus if an agreement be made for a sale according to the valuation of two persons, one chosen by each party, the Court will not entertain a bill for specific performance, praying that the valuation should be otherwise ascertained. Why ? Because the parties have confided to specific individuals, a confidence upon a subject interesting to them, respecting which those individuals are to exercise their judgment.

The Court will not therefore, transfer to a stranger that confidence which was reposed in others, under a belief of their peculiar fitness to discharge the duty. This would be making another agreement for the parties, and not executing that which they had made. Upon the w'hole case, my opinion is, that the law has been rightly administered, and that there ought not to be a new trial.

Ham, Judge.

It has been argued, in this case, that the matter in dispute was agreed by the parties, to be referred to James Brooks, as an arbitrator. The parties considered Brooks a disinterested witness, as to a fact which was not known to the Plaintiff^ but which was presumed to be known to the Defendant, and to Brooks, who had acted a part in it: he had paid the money to the Defendant, and for this reason he was referred to, as most likely to remember the amount paid. The party, however, had it in his power to prove the same fact by other witnesses. It appears that the amount due the Plaintiff', depended altogether upon the sum which had been returned to Wood, and that was within his knowledge ; that balance was due immediately, and no credit was intended to be given for it. If Brooks had died, the

j£ appearg fi»om an act passed in the year 1788, (oil. 30) that certain land was set apart, on which the Town of 1 Statesville was to be erected. The Defendant, with 0jjjep Commissioners, were directed to divide it into lots, and make sale of them; out of the proceeds of such sale, a certain part was directed to be paid to the person from whom the land had been purchased, and the residue, if any, to be applied towards defraying the expense of laying off said town.

It seems that after defraying that expense, there is still a balance in the hands of the Defendant, respecting which the act is altogether silent.

It is necessary next to ascertain, whether the Plaintiff is entitled to recover it.

By an act passed in the year 1795, (Rev. ch. 433) Court-houses and gaols were directed to be built, or repaired in all the Counties; the County Courts were invested with power to lay and collect taxes for that purpose, and a treasurer of public buildings was directed to be appointed, whose duty it should be, to call to account and settle with all former Commissioners, who might have received county or district monies/or swchpurposes»

In an act passed in the year 1797, (Rev. ch. 488) doubt is expressed, whether under the act last noticed, treasurers of public buildings were authorised to bring suits against former Commissioners, who might have county or district money in their hands, for the purpose of repairing or erecting the public buildings, and power is thereby given them to commence suits against any commissioners who may have such monies in their hands.

It is under these acts, that the Plaintiff claims to recover the money in dispute.

It is observable, that the Legislature pointed out the manner in which funds were to be raised for public buildings, the officers in whose hands they were to he deposited, and the duty of those officers. Amongst other things, it was made their duty to sue former Commissioners who bad in fbeir hands county or district money, and who had received it. for the purpose of repairing or erecting pub-lie buildings. '

There were no class of Commissioners, however, who held public money under the same circumstances with the Defendant; the acts do not speak of any such, — he was neither a commissioner nor treasurer of public buildings, nor w as the money in his hands, by any act, ap-priated to that purpose. In truth, it appears to be unappropriated, and, however little his claim to it may be,

I think the Plaintiff has no authority to sue for and recover it: he might as well sue for public money unappropriated, in the hands of any body else. I therefore think the rule for a new trial should be made absolute.

Judgment reversed.