Case Name: ROBERT McKEEN v. EAYRE OLIPHANT
Court: New Jersey Supreme Court
Jurisdiction: New Jersey
Decision Date: 1842-02
Citations: 18 N.J.L. 442
Docket Number: 
Parties: ROBERT McKEEN v. EAYRE OLIPHANT.
Judges: 
Reporter: New Jersey Law Reports
Volume: 18
Pages: 442–449

Head Matter:
ROBERT McKEEN v. EAYRE OLIPHANT.
In Covenant. Demurrer to Pleas.
1. It is a general principle, that an award to be binding and obligatory between the parties, should be certain, mutual and final upon all the matters submitted.
2. The strict and technical rule, that a submission by an administrator, to arbitration, is not only a reference of the matter in dispute, hut also an admission by the administrator that he has assets, cannot prevail over the clear .intention of the parties, as found upon the face of their submission.
Moffett and Oreen for plaintiff.
Kinsey for defendant.
STATE OF THE CASE.
The declaration is founded upon an award of arbitrators, and contains three counts. The first sets forth in substance, that on the 11th day of August, 1835, by certain articles of agreement made between the said plaintiff of the one part and the defendant administrator of Samuel Taggart dec. of the other part, reciting that the said S. T. in his lifetime, and at the time of his death, and the said plaintiff, were engaged as partners in merchandise, and that divers disputes had arisen and then subsisted between them, respecting the accounts and business of said firm; and in order that the same be speedily settled, the parties had agreed to submit all the said matters in dispute, to the award of Jesse Richards, Jesse C. Evans and Richard Campion, arbitrators chosen to award and determine all matters in dispute be-, tween the parties in any wise concerning the said partnership. It was agreed that their award in writing should be conclusive, and that each party would abide and keep said award; and for the faithful performance of said award, each bound himself and his heirs in the penal sum of ten thousand dollars; as by said articles will appear. And that the said arbitrators having taken upon themselves the said arbitration, and having been duly sworn, met and investigated and examined the matters submitted, did in due manner, on the 21st of December, 1835, at &c. make and publish their award in writing under their hands and seals, and did thereby adjudge, “ that there was due from the estate of the said Samuel Taggart dec. to the said plaintiff three thousand three hundred and fifty-four dollars and ten and a half cents, and that the same should be paid by the said defendant, administrator as aforesaid, out of the estate of said deceased, in nine months from the date of said award, with interest, as by said award will appear,” of which said award, the defendant had notice; and although the said plaintiff hath performed as well the said agreement as the said award on his part, yet the defendant has not performed his part of said agreement, nor did he pay in nine months nor at any time, the said sum of three thousand three hundred and fifty-four dollars and ten and a half cents, out of the estate of said deceased, with interest, but refused, contrary to the effect and meaning of said agreement and covenant by him made &o.
The second count is like the first, except that it states, that the agreement was made between the plaintiff of the one part and the defendant of the other part.
The third count differs only from the first, in that it alleges the agreement to be made by the defendant as administrator of Samuel Taggart dec.
The defendant after craving oyer of the agreement and award which are in substance as set forth in the declaration, with this addition to the award, to wit: “ Third, and whereas it has been made manifest to the arbitrators, as well by the evidence as by the admission of all the parties, that the late firm of McK. & T. are still indebted unto divers persons, in divers sums of money, and that they have due unto said firm, divers outstanding debts which have not been taken into the account, and that after the said debts so due and owing by the said firm shall be paid, we do award and order, that the surplus moneys that shall remain due unto the late firm of McK. & T. after the said debts due and owing by said firm, if any there be, shall be equally divided between the said McKeen and the said Oliphant, administrator as aforesaid.
“ Fourth, And we do also further award, that the expenses of this arbitration be equally borne and paid by the parties, &c.”
Pleaded:
1st. Non est faotum.
2d and 3d. Ko award.
4th. That the said award is uncertain
First, Because the names'of the persons to whom the said firm were indebted, are not stated in the award.
Second, Because the amount of the sums in which said firm is indebted, is not stated.
Third, The amount of debts due said firm, is not stated, so that it does not appear, by said award, whether any surplus will remain after payment of the debts due from said firm.
Fourth, Because the award does not order in what manner the debts due from said firm are to be paid, or by whom and in what manner the deficiency, if any, is to be paid. '
Fifth, Plea that the said award is not mutual, in that it makes no provision for the payment of any deficiency, in case the debts due to said firm are insufficient to pay the debts due from said firm, but leaves the estate of said deceased liable for the payment of the same; and without any remedy for the equal proportion thereof, against the said McKeen, as all causes of action between the said parties are awarded to cease and be no further prosecuted; that the said award is not equal or mutually satisfactory, and therefore void.
Sixth, That the award is not final, in that it makes no provision for the payment of any deficiency in case the debts due to said firm are insufficient to pay the debts due from them, nor to compel the said plaintiff to contribute to the payment of such deficiency. And as it is the duty of said plaintiff to collect the debts due to said firm, and apply the moneys to the payment of the debts due from said firm, if he fail to perform that duty, no remedy for such breach of duty is provided, by said award, for the estate of said deceased.
Seventh, Performance, that is to say, that the said defendant was ready and willing, and offered to perform his part of said award, if the said plaintiff would perform his part, by collecting the debts due to said firm, and paying the debts due from said firm ; and dividing the surplus, which he was requested to do, but wholly refused, and also refused to account to the defendant therefor.
Eighth, Plene administravit.
Ninthly, That by an order of the Orphans’ Court, of the county of Burlington, the creditors of said Samuel Taggert were required to exhibit to said defendant, their respective claims, under oath, within a certain time, limited in said order, pursuant to an act of the legislature relative to insolvent estates, [which. act, or such parts thereof as are applicable, are recited in said plea,) and that the said plaintiff did not exhibit any such claim, under oath, within the time so limited.
Tenth, The proceedings had in the Orphans’ Court of Burlington, by said defendant, as administrator as aforesaid, as in case of an insolvent estate, wherefore, he prays judgment if the said plaintiff ought to have execution for his said damages, and whether he ought to receive from the estate of the said deceased, for his said damages, more than a ratable proportion with other creditors, to be adjusted by the orphans’ court, &c.
To which several pleas, substantially, but not formally and technically set forth, as pleaded, the plaintiff has filed a general demurrer, to which the defendant has filed'his joinder.

Opinion:
Uhyixjs, J.
The questions presented by these pleas, and the demurrer thereto, may be resolved into two :
First, Whether the award, upon which the action is brought, is inconsistent with the law applicable to this subject, and
Second, Whether, if good, it is binding upon the defendant in his individual and private capacity, or whether it affects him only in his representative capacity as administrator of Samuel Taggart ; and in considering these questions, I shall confine myself to what I understand to be well settled general principles, without adverting to or citing particular cases and decisions.
It is a general principle, that an award, to be binding and obligatory between the parties, should be certain, mutual, and final upon all the matters submitted.
The fourth, fifth and sixth pleas raise the exceptiohs that it is uncertain, not mutually satisfactory, and not final.
We will examine these exceptions in the order in which they are presented. And first, as to its uncertainty.
The plea alleges that it is uncertain, because it does not order in what manner the debts due from the firm are to be paid, or by v'hom and in what manner the deficiency is to be paid. To settle this, and some other questions connected with it, we are to refer to the submission, and ascertain what the parties submitted to the decision of the arbitrators. By this, it appears that all disputes and controversies respecting the adjustment of the accounts and business of said firm, are submitted to their arbitrament. These are the disputes between the plaintiff, as surviving partner, and the defendant as the representative of the deceased partner of that firm, and not disputes between the said late firm and its debtors or creditors. The duty of the arbitrators, therefore, under this submission, was to ascertain and determine how these partners stood in relation to each other, in their copartnership accounts, how much each had advanced and each withdrawn from the firm, and to award the balance against him against whom it was found. They have, accordingly, done so, and awarded that the defendant should pay out of the estate of Taggart $3,354 10-J, with interest, in nine months from the date of the award. This was to adjust and settle the disputes between the parties to place them upon an equality. They declared this sum to be due from the deceased to the surviving partner, either on account of the over drafts upon the firm, made by the former, or of the over advancements made to the firm by the latter.— Although they do not award that upon the payment of this sum, the plaintiff shall execute any receipts and acquittances for the same, yet such payments would amount to an acquittance and discharge. This is certain, and all the certainty the law requires upon the matter in dispute. What they have further awarded in relation to the debts due to and from the firm, is not. within the terms of their submission, nor does it in any wise affect the previous part of their award. In relation to the dealings and debts between the firm and third persons, they have only declared the law as far as they went. That is to say, they have declared that the debts due to the firm should be applied to the payment of the debts due from the firm, and the surplus should be equally divided between the plaintiff and the defendant, as the administrator of the deceased partner. This the law had before settled, and they could not change. It was the duty of the surviving partner to make these collections ánd pay the debts, and to account for the surplus, if any, and to claim half of the deficiency if any. This was not, nor could it have been, a matter in dispute between these parties. It was not within the submission; but for that cause, the award is not void. It is certain as to the matter submitted. An award may be good, though part of it be made of a thing not within the submission, such part being void. Bao. Abridg., tit. Arbitrament and Award, Letter E.
For like reasons, the objections taken to the award, in the fifth and sixth pleas, to wit, that it is not mutual or final, cannot prevail ; for, as regards the matters submitted, it is both mutual and final. In respect to the debts due to and from the partnership, it leaves the parties where it found them, and where the law has placed them. If the surviving partner neglects to collect the debts due the firm, or, having collected them, neglects to pay the debts due from the firm, the defendant would be entitled to his action against him, and the award could not be set up as a bar. It would be a matter in dispute, arising after the submission and award, and not affected by that part of the award which adjudges that all actions between the parties shall cease.
The demurrer to these pleas is well taken, and should be sustained.
The seventh plea is performance, or a readiness and willingness to perform, and an offer to perform his part of the award, if the plaintiff would perform his part, by collecting the debts due to, and paying the debts owing by said firm, and dividing the surplus, as he was requested to do, but wholly refused. This plea is no defence to the action. It is not a good plea of performance. If, by the award, the plaintiff was bound to do this, it was not a condition precedent. The payment of the $3,354 1(% did in no wise depend upon the plaintiff's making these collections. It was to be made in nine months from the date of the award, and independently of any act to be performed by the plaintiff. But, as before remarked, these collections and divisions of the surplus, after payment of the debts, were no part of the submission; the award, therefore, in this respect, is void, and the plea bad in substance.
The three remaining pleas, raise a more important and difficult question, to wit, whether the plea of plene administravit, and the proceedings in the orphans' court, set forth in the ninth and tenth pleas, are a good answer to the plaintiff's claim, or, in other words, whether the defendant is not personally liable for the amount awarded.
The plaintiff has declared against him in his individual capacity, upon a covenant made by himself and not by his intestate. In the articles of submission, the parties were the plaintiff and the defendant described as the administrator of Samuel Taggart, deceased. The matters submitted, were the disputes or controversies respecting the accounts of the firm of McKeen and Taggart. The agreement was that the award should be final and conclusive between the parties, and that each would abide and perform the same; and each bound himself and his heirs in a penal sum, for the faithful performance of said agreement.
The award is that all controversies and actions between the parties shall cease; that there is due from the estate of Samuel Taggart deceased, to the plaintiff, $3,854 10J. The order or judgment of the arbitrators, is that this sum shall be paid by the defendant, administrator as aforesaid, " out of the estate of said deceased, in nine months."
It has been adjudged that a mere submission to an arbitration by an executor, is not in itself an admission of assets 5 T. P. 6; Bac. Abridg., for in many cases it is the best mode of ascertaining whether there be any foundation for the demand, and is often advantageous to both parties. But if an executor, in his submission, bind himself and his heirs &c. to perform the award, he will be bound, whether he has assets or not. 1 T. R. 691; Watson on Part. 4; Tol. on Ex. 465. We are here to enquire, whether these principles can be properly applied to the case before us. Here the defendant, as administrator of Taggart, entered into á submission to an arbitration, and bound himself and his heirs to perform the award, The action had been brought upon the bond or article of submission ; the defendant cannot, therefore, avail himself of these pleas, for it was his own personal covenant, which, in a suit at law, he cannot gainsay or deny, unless we can find some paramount rule of construction applicable to the case,-by which he can evade the former. Covenants are to be construed according to their spirit and intent, which is to be gathered from the whole context, 6 Johns. R. 50; 7 East, 240; Bac. Abridg. tit. Covenant. What, then, is the true intent of the defendant's covenant here. The object of the submission was to ascertain, by the judgment of third persons, whether anything was due from the estate of the defendant's intestate to the plaintiff, upon a fair adjustment of the accounts and business of said firm, as between themselves. The arbitrators were to determine the balance that should be due; and the defendant bound himself personally to abide such decision. That is, that ho would submit that such an amount was due, as the arbitrators, upon investigation, should find, and that be, as administrator, would no longer controvert it, but would perform the award, as far as the estate of his intestate and his duties as administrator, under the laws of Yew Jersey, required. This is the rational and fair construction of the articles of submission. The arbitrators so understood it, for they found the balance due, not from the defendant, but from the estate of Taggart, and directed it to be paid out of that estate. If the whole estate of Taggart had been insufficient to pay the amount of this award, the arbitrators did not direct the defendant to pay it out of any other fund. In that case, the award would be impossible to be performed ; yet the defendant would be bound, notwithstanding, to pay as far as the fund would admit; so he is now bound to pay out of that fund, as much as he can pay, consistently with the law and the rights of other creditors. This is his covenant, and for this he is personally bound, and it extends no farther. He did not covenant that the estate was able, or would pay more than this. The strict and technical rule, that a submission by an administrator to arbitration, is not only a reference of the matter in dispute, but also an admission by the administrator,, that he has assets, cannot prevail over the clear intention of thcr parties, as found upon the face of their submission. I am of opinion, upon the whole case, that the eighth, ninth and tenth, pleas, are good in substance, and that the demurrer, as to them,, should be overruled; and as to the other pleas, should be sustained.
Hornblower, C. J. and White, J. concurred.
Ether, J. absent.
Whitehead, J. did not hear the argument.
Demurrer sustained, as to all the pleas except the eighth, ninth and tenth, and overruled as to them.