Case ID: daly-ny_2/html/0428-01.html
Source: Caselaw Access Project
Author: {"author": "\n      By the Court.—Barrett, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Alexander Turnbull et al. vs. John T. Martin.
    The “misconduct” and "misbehavior” which, under the statute (2 Rev. Stat. 642, § 10), are grounds for vacating an award of arbitrators, must be acts which evince unfairness, or a violation of all the principles of a just proceeding, and not merely error of judgment, however great.
    The mere admission in evidence, by arbitrators, of ex parte affidavits in behalf of one party, and their refusal to permit one party to inspect the hooks of the other party, in respect to which testimony was being given, are not grounds for vacating their award, in the absence of evidence of fraud, corruption, partiality, or unfairness.
    Arbitrators are bound by no technical legal rules. They have a right to proceed informally, and in such a manner as, without violating those self-evident and fundamental principles upon which every fair investigation must be conducted, best tends to enlighten their judgment, and enables them in their own way to arrive at the truth and merits of the controversy.
    Appeal by the defendant from a judgment rendered at special term on an award of arbitrators.
    The action was brought to recover the price of a quantity of blue blouse flannel, amounting to $97,684.97, sold and delivered to the defendant by the plaintiff on a credit of four months. The defendant in his answer admitted the contract, but claimed that some of the goods were “ imperfect and inferior,” and alleged that he had been damaged thereby to the amount of $26,000, and that he had offered to return the imperfect goods as soon as the defects were discovered, and that he had paid freights and advanced to plaintiffs over $200,000, and insisted on a balance in his favor.
    After the cause was at issue, the parties agreed to arbitrate, and the matters in controversy were submitted to two merchants. The arbitrators made their award, giving a gross amount against the defendant. At the same time that a motion to confirm the report came on to be heard, a motion was made by the defendant to set aside the award, or to modify it, on the following grounds:
    1st. That the arbitrators received incompetent evidence, and erred, in fact and in law, on the subjects submitted to them.
    2d. That certain moneys paid for Government tax were included in the award.
    3d. That the arbitrators refused to allow the defendant to introduce the contents of the books of the plaintiffs, but as to some matters, and in some instances required the books to be produced before them; allowed the witness to testify as to matters contained in the books, but refused to allow the defendant to examine the portion of the books upon which testimony was given.
    The court, at special term (Cardozo, J.), having reduced the award by the amount of the Government tax, confirmed it as to the residue.
    From this decision the defendant appealed to the general term.
    
      Aaron J. Vanderpoel, for appellant,
    cited Clussman v. Merkel, 3 Bosw. 402; Wood v. Auburn and Rochester R. R. Co. 8 N. Y. 160; Ott v. Schroeppel, 5 Id. 482; Viele v. Troy & Boston R. R. Co. 21 Barb. 381; Winship v. Jewett, 1 Barb. Ch. 173.
    
      Foster & Thomson and Edwards Pierrepont, for respondent,
    cited Ketchum v. Woodruff, 24 Barb. 147 ; Smith v. Cutler, 10 Wend. 589 ; Emmet v. Hoyt, 17 Wend. 410; Viele v. Troy & Boston R. R. 21 Barb. 381 ; 20 N. Y. 184; Owen v. Boerum, 23 Barb. 187; Emery v. Hitchcock, 12 Wend. 156; Perkins v. King, 10 Johns. 143; Cranston v. Kenny, 9 Id. 212; Sharp v. Dusenbury, Col. & C. Cas. 134.
   By the Court.—Barrett, J.

This case comes before us upon an appeal from a judgment entered on the award of arbitrators. The arbitration bonds were executed after the joining of issue between the parties in an action brought in this court. The dispute was in respect to a quantity of flannels, and the bonds provided for the submission of all the matters arising under the pleadings to two dry-goods merchants, one chosen by each of the parties, with the additional proviso, that the umpire, in case of disagreement, should also be chosen from among the dry-goods commission merchants. The arbitrators were attended by the respective parties in person, and without counsel, and thus the whole matter was completely withdrawn from the court, and placed exclusively in the hands of laymen, specially chosen by the parties from the class most conversant with the subject-matter of the controversy. The award was in favor of the plaintiffs, and was made without disagreement, and consequently without the necessity of calling in an umpire.

An award, under such circumstances, should not be lightly disturbed; certainly not without some evidence of fraud, corruption, partiality, or unfairness. Nothing of the kind is suggested here, and the only grounds upon which a reversal is claimed are, first, that the arbitrators received as testimony, on the plaintiff’s behalf, some m parte affidavits; and, second, that they refused to permit the defendant to inspect those parts of the plaintiff’s books, in respect to which testimony was being given. These objections are not well founded in fact, as will presently be shown ; but were they clearly established, the acts complained of do not amount to such misconduct or misbehavior as would justify us in setting aside the award. The statute, by these terms “ misconduct ” and misbehavior ” (2 R. S. 542, § 10), contemplates acts evincing unfairness, or contrary to all the principles of a just proceeding, such as those discountenanced in Walker v. Frobisher (6 Ves. 70), and in Knowlton v. Mickles (29 Barb. 465), and not mere errors of judgment, however great (Smith v. Cutler, 10 Wend. 589 ; Ketchum v. Woodruff, 24 Barb. 147; Cranston v. The Executors of Kenny, 9 Johns. 212; Herrick v. Blair, 1 Johns. Ch. R. 101). Arbitrators are bound by no technical legal rules. They have a right to proceed informally, and in such a manner as, without violating those self-evident and fundamental principles upon which every fair investigation must be conducted, best tend to enlighten their judgment, and .enable them, in their way, to arrive at the truth and merits of the controversy. The rule which would vitiate an award whenever affidavits are, although openly and without any unfair or dishonest purpose, received by the arbitrators, and estimated according to the value which their judgment may place upon them, would produce the same result were the decision partially based upon a personal inspection by the arbitrators themselves in the presence of both parties, of the goods or articles claimed to be inferior. The short answer to all the arguments adduced in support of such a rule is, that the parties have agreed to remove their controversy from the regular tribunals, where justice is administered in an orderly manner, and in accordance with precise and well-settled rules, and have submitted to such judgment as their chosen merchant-peers may pronounce after a simple and informal investigation, conducted according to the layman’s ideas of common sense, and at which honesty and impartiality are alone contracted for or desired. These views are based upon the’ assumed correctness of the facts stated in the defendant’s affidavit. His statements, however, are explicitly denied by the plaintiff Turnbull, who explains that the affidavits were merely marked by the arbitrators for identification, and that the question whether they were to be entirely disregarded or received for what they were worth, was reserved. There is no evidence as to the final disposition of this question, and thus it does not appear that the affidavits were ever in reality considered. The point in respect to the book is met by the same plaintiff, who states, in answer to the averment upon that head in the defendant’s affidavit, that the arbitrators did “ allow him ” (the defendant) if he wished, to inspect all the entries as to which evidence was given.”

The remaining objection, that the arbitrators refused to receive evidence on behalf of the defendant, as to the contents of the books, is not substantiated even by the defendant; for he merely says that he desired to introduce such evidence, without intimating, however, that he expressed his desire, or that it was refused. The judgment and order, denying the motion to vacate the award, should be affirmed with costs.