#### Benjamin Mitchell *vs.*William F. De Schamps.

*Award*— Mistake *of Law.*

Where there was no dispute about the facts, but only as to the legal consequences of those facts, and the parties, by a general submission *“*of all matters in dispute in relation,” *&c.,*referred the matter to arbitration :— *Seld,*that the losing party was bound by the award, even though the arbitrators had plainly mistaken the law of the case.

BEFORE CARROLL, OH., AT SUMTER, JUNE, 1866.

The decree of his Honor, the Circuit Chancellor, is as follows:

Carroll, Ch. Near the close of December, 1864, the plaintiff, Mitchell, sold to defendant, De Schamps, a negro wench, Amelia, and her two children, at the price of $11,000, “to be paid in cotton at one dollar and thirty-five *10cents per pound.” At the same time Mitchell executed to the defendant a bill of sale in the usual compendious form, whereby he warranted said negroes *“*sound in body, mind and title,” and on the same day De Schamps subscribed and delivered to Mitchell a written paper, acknowledging to have received from him the sum of $11,000, to be paid in cotton at the price stipulated, and the cotton to be delivered when *“*called for.”

During the month of January, 1865, other transactions occurred between the parties. De Schamps was owner of twenty-nine bales of cotton, weighing in the whole 14,390 lbs., .and worth, at $1.35 cents per pound, $19,426.50. After some negotiation between the parties, the defendant, on the 1st February, 1865, sold the twenty-nine bales of cotton to the plaintiff at that price. Payment was made to the extent of $11,000, in the three negroes previously sold to De Schamps, as has been stated. $8,000 more* were paid by Mitchell’s executing to De Schamps a bill of sale, with like warranty, for another negro, a girl named Mary, and the remainder of the purchase-money of the cotton, $426.50, was paid in the treasury notes of the Confederate States of America. On the day last mentioned, 1st February, 1865, De Schamps also subscribed and delivered to Mitchell a paper of that date, in which he acknowledges the receipt of $19,426.50, in payment of twenty-nine bales of cotton, weighing 14,390 lbs., the said cotton to be “ delivered when called for at Mayesville Depot.” The four negroes purchased by De Schamps were delivered, and passed respectively into his possession at the dates of the bills of sale referred to.

The cotton remained in the'custody and charge of the defendant until after the 27th September, 1865, when he refused to deliver it to the plaintiff, contending that he was discharged from all obligation to do so by the abolition of slavery in this State. On the 4th January, 1866, the *11parties covenanted and agreed in writing, under their hands and seals, to refer all matters in dispute between them in relation to the purchase and sale of the negroes and the bales of cotton before mentioned “to the arbitrament and award of four arbitrators, two to be chosen by each party, and an umpire, to be selected jointly.” Accordingly, the persons to act as arbitrators and umpire were duly appointed. The parties, represented by legal counsel, appeared before the four arbitrators thus chosen. Their proofs were adduced, and an argument on each side was submitted. The arbitrators disagreeing, the umpire was called in to decide, and the result was an award without more, *“*that William E. De Sehamps do keep the cotton in dispute between himself and Benjamin Mitchell.”

The purposes of the bill are the impeachment of the award and the specific delivery of the cotton, or else an account for its value.

At the hearing the award was assailed chiefly upon the ground that it was founded upon a plain and palpable mistake of law, and no objection was taken by the defence to such course on the part of the plaintiff; as involving a variance from the case presented by the bill.

The general rule, as announced by Lord Eldon, is, that if questions of right and fact are referred to arbitration, the arbitrator is bound to decide according to law. But if a dry and naked question of law be submitted, then, however erroneous may be the decision of the arbitrator, the Court will not interfere. *Young*vs. *Walter,*9 Yes. 367. “I am of opinion,” says Wilson, one of the Lord Commissioners, “that when any thing is submitted to arbitration, the arbitrators cannot award contrary to law, as that is beyond their power; for the parties intend to submit to them only the legal consequences of their transactions and engagements.” *Morgan*vs. *Mather,*2 Yes. Jr. 18. Perhaps the doctrine of the Court UDon this subject will be found stated *12with more precision in 2 Story Eq. §1455. It is there said that if arbitrators mean to decide strictly according to law, and they mistake it, although the mistake is made out by extrinsic evidence, *that*will be sufficient to set it aside. But their decision upon a doubtful point of law, or in case where the question of law itself is *designedly*left to their judgment and decision, will generally be held conclusive. The decisions in our own Courts are not in conflict with the cases cited by the learned commentator, and seem to recognize the general rule as laid down by Lord Cowper, and approved by Lord Hardwicke, that if arbitrators go upon a plain mistake either in law or fact, equity will relieve against the award. *Aylwin*vs. *Perldns,*3 Des. 305; *The Uxors, of Radcliff*vs. *Wightman,*1 McO. Ch. 408; *Shinnie*vs. *Coil,*1 McO. Ch. 483.

At the hearing before the arbitrators it was argued for the defendant, that the slaves in South Carolina were *de jure*emancipated from and after President Lincoln’s proclamation of January, 1863 ; that the conquest and occupation of this State by the military authorities of the United States, and their subsequent liberation of the slaves, in fact were but the enforcement and execution of that proclamation, and that the 11th section of the 9th Article of the State Constitution, by recognizing the slaves in South Carolina as having been emancipated by the action of the United States authorities, recognized also, in effect, the legal force and obligation of the proclamation referred to. The question presented is of great practical consequence, and it is to be regretted that, at the hearing, but slight argument was made, and no authority cited to aid the Court in its solution. The want of access to books has, however, been largely compensated by two decisions recently made: the one by Judge Clayton, of Mississippi) in the case of *Dulce & Cord*vs. *Perldns;*the other by Judge Sheffey, of Virginia, *13in the case of *Walker*vs. *Loring,*copies of which I have had the good fortune to obtain.

It is said that a new State springing into existence does not require the recognition of other States to confirm its *internal*sovereignty.. “ The existence of the State *de facto*is sufficient in-this respect to establish its sovereignty *dejure.”*Wheat. 29. In the *Prize*cases, 2 Black E. 666, it was adjudged by the Supreme Court of the United States, that the recent war between that power and the Confederate States of America was, in the full sense of the term, as employed by writers upon international law, *a civil war.*

*“*It is not necessary, to constitute war,” says Mr. Justice Grier, as the organ of the Court, “that both parties should be recognized as independent nations', or sovereign States.” . “A civil war,” he proceeds, quoting from Vatel, “ produces in the nation two independent parties, who consider each other as enemies, and acknowledge no common judge. Having no common superior-to judge between them, they stand precisely in the same, predicament as two nations who engage in a contest, and have recourse to arms.” In conformity to the principles .announced, it was adjudged, that the contending parties in the recent war, with their respective citizens, or subjects, while the contest continued, were' entitled to all the rights, and subject to all the liabilities, which belong to belligerent and independent sovereignties, under the law of nations.

To the same effect is the case of *Mrs. Alexander's cotton,*

2 Wal. E. 419. She attempted to show that she was a loyal citizen of the United States, and claimed protection to her right of property' “ under the constitution and laws thereof.” Her claim to such protection was rejected, and it was adjudged that her cotton was subject to seizure and capture as enemies’ property. “We must be governed,” says the Chief Justice, “ by the principles of public law, so often announced, as applicable to civil and international wars, that *14all the people of each State or district, in insurrection against the United States, must be regarded as enemies, until by the action of the Legislature and the executive, or otherwise, that relation is thoroughly and permanently changed.” “ Mrs. Alexander, being now a resident in enemy territory, and in law an enemy, can have no standing in any Court of the United States, so long as that relation shall exist.” There could be no stronger recognition of the fact, that the Constitution of the United States was, for the time, wholly banished and excluded from the territory under the rule and sway of the government of the Confederate States. The mere residence of the claimant within the hostile territory, it is held, placed her without the pale of the Constitution and laws of the United States, and denied to her even a standing in their Courts. The principles and rules of international law are altogether in the interest of humanity, and are designed to mitigate the evils incident to a state of war. No rule or principle of that code promulgates or countenances the barbarous doctrine, that during a civil war the citizens or subjects of the party opposed to the established government shall be condemned to the evils and horrors involved in a state of anarchy. While the contest continues, the laws of the former government are suspended, and their place is taken by the government *de facto*set up by the opposing party, and by the laws which such government may choose to recognize or enact. *“We*cannot hold,” says Judge Clayton, “that the suspension of the Federal Constitution and laws left the Confederate States in perfect anarchy, with no law controlling contracts, or rights of property. The common and municipal laws of the State, regulating transactions and contracts between citizens, were not affected by the war, but remained intact within the jurisdiction of the Confederate States.”

According to the principles and authorities recognized by the Federal Courts, the Confederate States, during the *15existence of tbeir *de facto*government, must be regarded (in respect of the Constitution and laws of the United States) as being in the same condition as if they had been conquered, and their people, and territory held in subjection for the same period of time, by an independent foreign power at war with the United States. In Phillimore on International Law, page 502, .reference is made approvingly to the judgment of Mr. Justice Story, in the *United States*vs. *Heyward,*2. Gallison’s Rep. 500-2. The purpose of that suit seems to have been the recovery of the tax or penalty denounced against the introduction of British goods into the United States by their non-importation Acts, then of force. The port of Castine is the port of entry for the District of Penobscot, and is within the acknowledged territory of the United States. But at the time referred to in the bill of exceptions it had been captured, and was in the open and exclusive possession of the British forces. One of the objections taken to the charge of the Judge was, that the bringing of the goods from Halifax to Castine was sufficient to all purposés to entitle the United States to a verdict, whereas the Court had directed the juryto the contrary. “ The objection,” says Judge Story, “ rests altogether upon the assumption that Castine was to be deemed a port of the United States, in which the laws had their full operation, notwithstanding it was, at the time of the supposed importation, in the actual possession of Great Britain. This position, however, is utterly inadmissible upon every principle of the law of nations. By the conquest and occupation, the laws of the United States were necessarily suspended in Castine, and by their surrender the inhabitants became subject to such laws, and to such laws only, as the conquerors chose to impose. No other laws could, in the nature of things, be obligatory upon them, for, where there is no protection or sovereignty, there can be no claims to obedience.”

*16This doctrine appears to be fully recognized by the law of England, which declares that when an usurper is in possession, the subject is excused and justified in obeying and giving him assistance. It is held that a *“*king *de facto,*and not *de jure,*or in other words a usurper that hath got possession of the throne, is a king within the meaning of the statute, (of treasons,) as there is a temporary allegiance due to him for his administration of the government, and temporary protection of the public, and, therefore, treasons committed against Henry YI. were punished under Edward IY., though all the line of Lancaster had been previously declared usurpers by Act of Parliament.” 4 Black. Com. 77. But if neither the Constitution nor the laws of the United' States were operative or obligatory within the territory of the Confederate-States during the existence of their *de facto*government, it is preposterous to attribute such effect to the mere proclamation of President Lincoln. The consequences of such a doctrine would be fraught with ruin and disaster to the southern people. Proceedings in the Courts would at once spring up, and in fearful profusion, at the suit of the freedman against the white, to recover wages for labor since 1st January, 1863, and damages for "false imprisonments, assaults, and batteries, trespasses and other injuries to the person and property of the freedman. The result would be, that all. transactions affecting slaves,, since 1st January, 1863, all contracts for their hire, purchase or sale, and all partitions and divisions of estates, wherein slaves were given or received in lieu of money or other property, would be at once annulled, and, in the language of Judge Sheffey, “ be swept pell-mell into chaos.”.

It results from the principles and . adjudications referred to, that the slaves within the State cannot be considered as having been emancipated *de jure*until after the surrender of the Confederate armies, under Generals Lee and Johnston, in the month of April, 1865. Thenceforth, all hopes of *17achieving their independence seems to have been abandoned by the people of the Confederate States. No further resistance was offered to tbe invading Federal forces. The government of tbe Confederate States was dissolved.' Tbe territory of this State was occupied by tbe forces of the United States, and, by tbe direclfinterference and action of tbeir military.authorities, slavery in South Carolina was *defacto*abolished. This, it is conceived, is tbe emancipation of slaves recognized by tbe Constitution of this State, and no other, or earlier, emancipation. Tbe case referred to — ■ *Wallcev*vs. *Loving*— considers and adjudges tbe very point that is here presented, and determines it adversely to tbe defendant.

One of tbe arbitrators, an intelligent gentleman, who was examined before tbe Commissioner as a witness in tbe cause, testified as follows: *“ The*award or decision of arbitrators in tbe case was made for tbe reasons or upon tbe considerations following: that in consequence of the previous proclamation of tbe President of the United States, tbe negroes referred to in tbe bill were' free; that, therefore, the plaintiff bad no title to convey — tbe consideration of defendant’s agreement thus failing. Tbe arbitrators differed in tbeir opinions — two being in favor of tbe plaintiff’s claim and two for tbe defendant. Tbe umpire decided in favor of tbe defendant.” After what has been said, it is manifést that, in tbe judgment of tbe Court, tbe ground upon which the arbitrators have rested their award is a plain, palpable, and mischievous mistake of tbe law. There is nothing. in tbe Constitution or municipal law of tbe State to sustain tbeir assumption that the proclamation of President Lincoln, of 1st January, 1863, carried with it tbe force and effect of law, from and after its date ; and, in tbe language of Judge Story, tbe “position i's utterly inadmissible upon every principle of tbe law of nations.” Tbe proof as to tbe ground upon which tbe arbitrators pro*18ceeded appears to be full and satisfactory. It comes from two of the arbitrators themselves, and has not been controverted, or impugned by any opposing evidence. Nor is it necessary that proof of the mistake imputed should appear upon the face of. the award. *Knox*vs. *Symonds,*Yes. J. 270, (Sumn. Edit.;| 2 Story Eq. J. § 1445; *Kent*vs. Klstob, 3 East. 18; *Chase*vs. *Westmore,*13 East, 158. In note 5 to case cited of *Knox*vs. *Symonds,*it is said by the learned annotator “ that Courts both of law and equity will interpose where an award has been made under a mistake, provided there be clear and distinct evidence of mistake, and of the precise nature of such mistake, as to which, however, Lord Thurlow insisted upon having the affidavits of the arbitrators themselves; *Anderson*vs. *Dancy,*18 Yes. 449; but this should seem to be hardly necessary when the mistake can, by other means, be unequivocally established. 3 East, 18.” The requisition of the rule seems to be fully satisfied by the proof. Not only is mistake shown, but also the precise nature of the mistake — a mistake not resulting from a mere erroneous judgment in the application of an admitted rule of law to the facts inyolved, but mistake in rejecting the recognized and subsisting law, and substituting what was at the most but the mere military order of the commander-in-chief of the Federal armies, which, at the time, he was wholly without the power to enforce.

That the arbitrators meant to decide strictly according to law cannot be doubted. It is shown not only by the testimony referred to, but by the very nature of their award. There is nothing in it which resembles compromise, or the recognition of a hard claim with an abatement, or an adjustment of conflicting demands upon equitable principles, on the basis of mutual concession. But the award is, without qualification or reserve, for the defendant and against the plaintiff, thoroughly and inflexibly throughout. The *19twenty-nine bales of cotton fairly bought and paid for by the plaintiff!, and belonging to him as his specific property in law, the award takes from him 'and assigns to the defendant; and for the four negro slaves, the lawful property of the plaintiff, sold and delivered to the defendant, not one dollar of compensation is allowed. It is due to the arbitrators themselves, to declare, that they intended to decide strictly according to law, but misconceived it; for otherwise the shocking injustice of the award would admit of no apology. As the award was intended to be strictly according to law, but has wholly failed in being so, the result is that it is not what the arbitrators intended it to be; 'and must, therefore, be set aside.

Upon their own grounds, it is difficult to perceive why the arbitrators made no compensation to the plaintiff for the $426.50 paid to the defendant. The only explanation given is to be found in the testimony: “that the arbitrators admitted that the plaintiff was entitled to something upon that account, but that, when they came to make their award, it was either forgotten, or informally passed over, being regarded as a small matter as to the amount of money involved.” The money was paid in part purchase of the cotton, valued at $1.35 cents per pound. The plaintiff Was in any event entitled to three hundred and fifteen pounds of cotton, worth, in our markets, at one period since the sale, more than one hundred and forty dollars ; and this claim cannot be said to be so petty as to be unworthy of consideration. If the arbitrators failed to consider and determine this claim, their award is defective, because not final. If they did decide upon it, but through forgetfulness omitted to dispose of it by their award, it but furnishes another proof that their award does not, in fact, express what was intended to be adjudged, and only suggests another and additional reason why it should be set aside.

In the judgment of the Court, the plaintiff is not entitled *20in this proceeding to more than the vacating of the award. He has plain and adequate remedy at law. The strict enforcement of his rights will be attended, in some sense, with a certain degree of hardship towards the defendant ; and the parties have agreed to submit their differences to arbitrators. In the first effort so to adjust their disputes they have miscarried, but a second attempt may be attended ■ with more fortunate results.

I am fully aware of the extreme reluctance with which the Court interferes with the decisions of arbitrators, but if the jurisdiction to relieve against their mistakes is not to be exercised in a case like the present, it may well be said that it exists in theory only.

It is ordered and adjudged that the award herein above referred to be set aside and avoided, and that the parties respectively pay their own costs.

The defendant appealed, and now moved this Court to reverse the decree, on the following grounds:

1. That in consequence of the proclamation of President Lincoln, and the Constitution of this State accepting “the action of the United States authorities” on the subject of slavery, there was, in December, 1864, and January, 1865, no legal title as slaves to the negroes sold by complainant to defendant.

2. That if there was any such title, it was in theory only, and not such an actual and tenable title as could be enforced in law, or such as to support a contract of warranty of title, or be a sufficient consideration for the transfer of valuable property.

3. Because the matters in dispute between the parties, including this question of title, were referred by the parties to a tribunal of their own selection; they are bound by the award, made by judges of their own choice, and clothed by *21them with the power to decide, and their decision is binding, and should not be set aside by the Court.

4. That the failure of the arbitrators to award Mitchell the amount of the cotton paid for in Confederate money is not a sufficient ground to set aside the award, because this was not one of the matters of dispute, and in so far as the award exceeds the terms of submission and to that extent can this Court set it aside, and no further.

5. Because, under the circumstances of this case, this award is just and fair, and will “ effect substantial justice” between the parties, and should not be set aside by the Court.

Fraser, for appellant.

*J. 8. G. Richardson, Binhins,*contra.

The opinion of the Court was delivered by

Dunkin, C. J.

In the view which the Court takes of this case, it is not necessary to consider or determine some of the important principles so ably discussed in the decree of the Chancellor.

The parties occupied the relation of father-in-law and son-in-law. The matter in difference between them was solely the right of property in twenty-nine bales of cotton, at that time in possession of the defendant. Nor about the facts, can it be said, there was any dispute whatever. They were few and simple, and all reduced to writing. The only subject of disagreement was the consequence resulting from admitted facts. The Courts were open to them, and they had legal advisers at their elbow. But closely connected as they were, they did ■ not choose to appeal to the public tribunals of the country. They preferred rather to incur the hazard of “ suffering wrong than to go to law.”

*22Accordingly, on 4th January, 1866, under their hands and seals, and in the presence of a subscribing witness, they entered into a written agreement to "refer all matters in dispute in relation to certain paper writings (describing them) to the arbitrament and award of four arbitrators, two to be chosen by each party, and an umpire selected by us jointly, the said papers about cotton signed by W. F. De Schamps,” (the defendant.) The arbitrators and the umpire were thereupon selected, and, on the same day, made their award under their hands and seals, as follows: “ We, the undersigned, arbitrators and umpire in this case, on consideration of the matters referred to us, do award that William F. De Schamps do keep the cotton in dispute between himself and Benjamin Mitchell.”

The principal ground alleged by the plaintiff for impeaching the award was, that the arbitrators, intending to decide according to law, had plainly and palpably mistaken the law. This allegation depended on the testimony of one of the arbitrators. The consideration for the cotton was the. sale and delivery of certain slaves by the plaintiff to the defendant, in December, 1864, and February, 1865. The witness testified that "'the award or decision of the arbitrators was made for the reasons, or upon the consideration, that in consequence of the previous proclamation of the President of the United States, the negroes referred to were free; that therefore the seller had no title to convey — the consideration of the contract or agreement thus failing.” The inquiry is, whether, assuming that the arbitrators had misapprehended the law, this be a sufficient ground for setting aside their award. Upon this subject Mr. Justice Story says: The difficulty is two-fold; *“*whether the mistake of fact or of law is to be made out by extrinsic evidence ; and whether a mistake of law, upon a general submission, involving the decision both of law and of fact, constitutes a valid objection.” 2 Story Eq. J. § 1453. *23"Arbitrators,” says be, "being tbe chosen judges of the parties, are, in general, to be deemed judges of the law, as well as of the facts, applicable to the case upon them. If no reservation is made in the submission, the parties are presumed to agree that every question, both as to law and fact, necessary for the decision, is to be included in the arbitration. Under a general submission, therefore, the arbitrators have rightfully a power to decide on the law and the fact. And, under such a submission, they are not bound to award on mere dry principles of law; but may make their award according to the principles of equity and good conscience.” § 1454. And in a note is cited the authority of Lord Thurlow, in *Knox*vs. *Symonds,*(1 Ves. J. 369,) who says: "Upon a general reference to arbitration of all matters in dispute between the parties, the arbitrator has a greater latitude than the Court, in order to do complete justice between the parties; for instance, he may relieve against a right which bears hard upon one party, but which, having been acquired legally, and without fraud, could not be resisted in a Court of justice.” It is finally said by Judge Story : “ But- the decision of the arbitrators upon a doubtful point of law, or in a case where the question of law itself is designedly left to their j udgment and decision, will generally be held conclusive.”

There was no doubt about the sale and delivery of the slaves. The legal consequence'of extraneous events was the only matter of disagreement. This they referred to judges of their own choice, instead of the judges appointed by law, and they have decided in favor of the defendant. Ve see nothing in the testimony of the witness which would justify the Court in impeaching that judgment. As between these parties, the award of the arbitrators is the law of the case, and must be regarded as final and conclusive.

In the adjustment of the transaction between the parties *24in January, 1865, the plaintiff, in addition to the price of the slaves, had paid the defendant in cash, or in the then currency of the country, Confederate money, four hundred and twenty-six dollars and fifty cents. This, as the witnesses say, was inadvertently overlooked by the arbitrators in rendering their award.

It is ordered and decreed, that the decree of the Chancellor, setting aside the award, be reversed. It is further ordered that it be referred to the Commissioner, to ascertain and report to the Circuit Court, the value of the four hundred and twenty-six dollars and fifty cents on the 4th January, 1865. It is finally ordered, that the decree of the Chancellor, on the subject of the costs, be affirmed.

Wabdlaw and Inglis, J. J., concurred.

*Deoree modified.*