Court Opinion

ID: 7190663
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:56:28.626379+00
Date Added: 2024-06-11T16:16:10.697726
License: Public Domain

Ox THE MERITS.
Moruax, J.
The relation of counsel and client existed between the plaintiff and defendant. When this relation ceased, a disagreement arose between them as to the compensation which the one was to receive and. the other was to pay. They could come to no satisfactory arrangement, and a lawsuit was threatened. They agreed to submit their differences to arbitrators, who were to bo amicable compounders, and they reciprocally bound themselves to abide by the award which the arbitrators might make. In ease of disagreement between the arbitrators an umpire was to be chosen. The decision of the umpire was to be final.
The power to make such a covenant is expressly recognized by the Code, articles 3099, 3102.
The covenant was as follows:
“ It is agreed by and between Eandell Hunt and James E. Zuntz that this claim (for professional services and advice in the cases of James E. *504Zuntz vs. W. H. Stackhouse, and of W. H. Stackhouse vs. J. E. Zuntz,) be submitted to Judge J. H. ilsley and Hon. Thomas J. Semmes, as arbitrators and as amicable compounders, with power to them, in case of disagreement, to select a now person as umpire, whoso decision shall bo final.
“ The parties hereto bind themselves to abide by such judgment, and to pay the amount of the same within five,days after judgment is rendered or decision made.
“ And' they mutually bind themselves to each other in the sum of ten thousand dollars liquidated damages, to bo paid in case of non-compliance within tho time named.
“ It is agreed and understood that the matters are submitted to thó above-named arbitrators upon the records and proceedings in tho cases, and such other testimony as tho parties may offer within-days from this date, tho arbitrators and amicable compounders to have full authority to reject any improper testimony, and their decision upon the admission or rejection of the same to be final.
“In case tho parties above named (the arbitrators) can not agree, Henry 0. Miller is selected as umpire, and his decision shall be final under tho terms of this agreement and submission and subject to all the conditions therein. He is made umpire and amicable compounder.”
Messrs. Ilsley and Semmes could not agree, and the matter was referred to Mr. Miller. His award was that Zuntz should pay five thousand seven hundred dollars.
This award tho defendant refused to comply with. Plaintiff seeks to compel him to do so, and he asks also for the penalty which, by the contract, the defendant agreed to pay in case of failure to comply with tho award.
One defense is that the law makes the courts of the State alone judges in such matters^
There is nothing which we can discover in the constitution or laws which prohibits parties from submitting their differences to arbitrators, nor is there airy authority for saying that parties can not bind themselves in any penalty to abide by tho decision of arbitrators selected by themselves. A second objection is that the defendant was not given a proper opportunity to be heard before the umpire. But this is not substantiated by the record. On the contrary, it is shown that he was notified when and where the umpire was to commence his investigations, and that he did not appear before him at the time and place designated, either in person or by counsel.
A third objection is that plaintiff can not exact the award and the penalty attached to the non-compliance therewith. Article 3106 says that “it is usual to undergo á penalty of a certain sum of money in the sub*505mission, which the person who shall contravene the award, or bring appeal therefrom, shall be bound to pay to the other who is willing to abide by it.” • • ■
This article, therefore, recognizes the right of parties to contract that they will be held in a penalty in case they do not abide by the award of parties of their own selection, or selected under their authority, to whom they have agreed to submit their differences. If they could not affix a penalty as the result of their non-compliance, the article of the Code just quoted would be meaningless. If, having affixed a penalty, it should be held that the penalty alone can be exacted, the result might lead to an absurdity. For instance, if the penalty was fixed at one hundred dollars and the award was five thousand dollars, if the party decided against refused to pay the award, the penalty only could be exacted. The penalty, therefore, would be an inducement as well as a reward, instead of a punishment, for violating an agreement legally entered into. This would be reversing the order of things. The first object of the penalty was to insure the faithful abiding by the award, and the large amount stipulated was only to make compliance more certain. ■
But the defendant relies upon article 2125 of the Code, which says: “ The penal clause is the compensation for the damages which the creditor sustains by the non-execution of the principal obligation. He can not demand the principal and the penalty together, unless the latter be stipulated for the mere delay.”
If we admit that the case before us is to be governed by the chapter of the Code which treats of obligations with penal clauses, instead of the subsequent title, which-treats of arbitration, which it is not necessary for us to decide, still the article relied on would be conclusive against the defendant, for here it was- expressly agreed that the penalty stipulated should be due unless the award was paid within five days from its rendition. Plaintiff submitted his claim to arbitration. He bound himself to abide by the award which might be made. The defendant bound himself in the same manner. When the award was made plaintiff submitted to it. The defendant refused compliance. The penalty which ho imposed upon himself then became due. He is bound for the amount of the award by reason of the decision of the umpire. He is bound for the penalty because he agreed to pay it unless he did comply. When we affirm the judgment against him we only compel him to do what he voluntarily agreed to do.
Judgment affirmed.