Court Opinion

ID: 6972494
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:05:04.911627+00
Date Added: 2024-06-11T16:08:51.144475
License: Public Domain

Hand, J., and Cartwright, C. J., dissenting: It appears from the pleadings and proofs found in the record filed in this case, that the Swedish Evangelical Mission Covenant of America, (called herein the covenant,) a corporation not for pecuniary profit, was organized under the laws of the State of Illinois in the year 1885; that in 1887 it established a mission for the education and Christianization of the Eskimos at Unalaklik, Alaska; that in 1893 it established a second mission at Chinik, in said territory; that Alex Edward Carlson was placed by it in charge of the mission at Unalaklik and Neis O. Hultberg in charge of the mission at Chinik; that in the year 1897 Peter H. Anderson was sent to Chinik by the covenant as a teacher and assistant to Neis O. Hultberg; that in the summer of 1898 gold was discovered on Anvil creek, a tributary of Snake river, situated about eighty miles from Chinik; that on the 15th day of October, 1898, the Cape Nome Mining District was organized, which district included within its limits Anvil creek; that on October 18, 1898, claim “No. 9 Above,” on Anvil creek, was located by G. W. Price by power of attorney, in the name of his brother, R. L. Price; that on November 17, 1898, G. W. Price, as attorney in fact of R. L. Price, sold and conveyed said claim No. 9 Above to Peter H. Anderson; that Peter H. Anderson and his successors in title did all the necessary assessment work required by the mining laws of the United States upon said claim No. 9 Above from the time- of its location by G. W. Price to and including the year 1903; that on May 28, 1902, Peter H. Anderson conveyed claim No. 9 Above to the White Star Mining Company, a corporation organized under the laws of the State of California and capitalized for the sum of $500,000, the capital stock of which was owned by Peter H. Anderson, with the exception of three shares; that on May 19, 1903, the White Star Mining Company of California conveyed said claim No. 9 Above to the White Star Mining Company of Illinois, a corporation organized under the laws of the State of Illinois and capitalized for the sum of $25,000, the capital stock of which was all owned by Claes W. Johnson, with the exception of twenty shares; that subsequent to the purchase of said claim No. 9 Above by Peter H. Anderson the covenant claimed to be the owner of said claim No. 9 Above, and that Peter H. Anderson held said mine, and the gold taken therefrom, in trust for it; that on August 16, 1901, Peter H. Anderson made a donation to the covenant of $54,000 in cash, in consideration of a release to him by it of all its interest, if any, in said claim No. -9 Above and the gold taken therefrom, and the president and secretary of the covenant on that day executed to him a formal release thereof under the seal of the covenant, and that their action was taken with the knowledge and consent of its board of trustees, and was approved afterwards by its general conference, from which date it has had and still retains said $54,000; that on June 17, 1903, the covenant conveyed its interest, if any, in claim No. 9 Above to Neis O. Hultberg, and on September 8, 1903, assigned to Neis O. Hultberg its claim for all gold taken out of said claim No. 9 Above since its location, against Peter H. Anderson, Claes W. Johnson, the White Star Mining Company of California and the White Star Mining Company of Illinois; that on August 4, 1903, Neis O. Hultberg, at Nome, Alaska, where Neis O. Hultberg and Claes W. Johnson were, served a demand upon Claes W. Johnson, who was operating said mine for the White Star Mining Company of Illinois, for the possession of said claim No. 9 Above, and called upon him to account for the gold that had been taken from said claim No. 9 Above subsequent to June 30, 1903; that claim No. 9 Above., during the time Peter H. Anderson, Claes W. Johnson and the White Star Mining Companies had been in possession thereof, had yielded more than $400,000 in gold, which gold had been retained by them, with the exception of $95,000, which had been paid by Peter H. Anderson, in the form of donations or otherwise, to the covenant. Neis O. Hultberg, on his own behalf, and Claes W. Johnson, on behalf of himself and the White Star Mining Company of Illinois, of which he was president, on the 12th day of August, 1903, executed an agreement to submit the matters in difference between them to arbitration, which submission was signed by Peter H. Anderson at a later date in Chicago. The-substance of the submission agreement executed by said parties is set out in the majority opinion. David F. Lane, a mining operator of Berkeley, in the State of California, and A. M. Pence, an attorney at law of the city of Chicago, were chosen as two of the arbitrators, and they chose Hiram T. Gilbert, an attorney at law of the city of Chicago, as the third, and on the 13th day of April, 1904, Lane and Gilbert made and signed an award in writing. Pence refused to join therein. The award, in part, is as follows: “First—With respect to the claims and demands of said Neis O. Hultberg, so far as the White Star Mining Company of Illinois and Claes W. Johnson are concerned, we decide that said Neis O. Hultberg is the owner of that certain placer mine and mining claim mentioned in said agreement, known as and called ‘No. 9 Above, on Anvil creek/ situate in the Cape Nome mining and recording district, in the District of Alaska, and we award to him, said Neis O. Hultberg, the said placer mine and mining claim, and direct the said White Star Mining Company of Illinois to forthwith convey and deliver possession thereof to said Neis O. Hultberg; and we further decide that the output of said placer mine and mining claim, and the gold extracted therefrom during the mining season of 1903, after deducting therefrom a sufficient amount of gold or moneys to pay and defray all the expenses of said White Star Mining- Company of Illinois and said Claes W. Johnson in operating said mine and mining claim, including labor and material purchased therefor during said time, and also after deducting therefrom the further sum of $9000, which said last mentioned sum is to be had and received by said Johnson out of said output for his personal services, which said output, after making the deductions aforesaid, is the sum of $26,000, belongs to said Neis O. Hultberg, and we award said sum to him, the same to be accounted for by said White Star Mining Company of Illinois and by said Claes W. Johnson and turned over by them to said Neis O. Hultberg immediately. “Second—With respect to the claims of said Neis O. Hultberg against said Peter H. Anderson, we decide that said Neis O. Hultberg is entitled to recover from said Peter H. Anderson the sum of $232,200, and we award said sum to said Neis O. Hultberg, to be paid to him immediately by said Peter H. Anderson. “Third—We award to the said Neis O. Hultberg the sum of $250 to be paid by said White Star Mining Company of Illinois and Claes W. Johnson jointly, and the further sum of $250 to be paid by said Peter H. Anderson, as his statutory costs and expenditures incurred by him in and about said arbitration, the said sums, amounting in all to $500, being agreed upon as correct and just by the said parties, and all other costs and expenses of said arbitration having by the agreement of the parties been paid out of moneys furnished said arbitrators for that purpose by said White Star Mining Company of Illinois, Claes W. Johnson and Peter H. Anderson, the amount so paid and furnished by said White Star Mining Company of Illinois and said Johnson being $1436.25 and the amount so paid by said Peter H. Anderson being $3750.” On April 15, 1904, Neis O. Hultberg filed a copy of said award in the circuit court of Cook county, and asked that judgment be entered thereon. On the next day the White Star Mining Company of Illinois, Claes W. Johnson and Peter H. Anderson entered their appearance in said proceeding and moved the court to vacate, set aside and annul the award, and the White Star Mining Company of Illinois on the same day filed its bill in chancery in the superior court of Cook county against Neis O. Hultberg, Claes W. Johnson, Peter H. Anderson, the covenant, and the Merchants’ Loan and Trust Company of Chicago, praying that the award made by Lane and Gilbert be set aside, invalidated and held for naught, and that the title of complainant be established against the claim of Neis O. Hultberg and the covenant in and to said claim No. 9 Above, and the gold taken therefrom since its location; also asked for an injunction restraining the Merchants’ Loan and Trust Company from paying out a balance of $6813.75 in its hands, which had been deposited with it by Neis O. Hultberg, Peter H. Anderson and Claes W. Johnson as a fund with which to meet the expenses incidental to such arbitration. The bill was amended, and by agreement the cause was transferred to the circuit court of Cook county to be heard in connection with the proceeding commenced in that court by Neis O. Hultberg to have judgment entered upon said award. Claes W. Johnson, Peter H. Anderson, Neis O. Hultberg and the covenant each filed an answer and cross-bill. Claes W. Johnson and Peter H. Anderson attacked the award upon the same grounds as the original bill and prayed for the same relief as prayed for in the original bill, and Neis O. Hultberg and the covenant by their cross-bills sought to have the award enforced and carried into effect. The issues being joined on the bill, cross-bills, answers and replications of the parties, respectively, the court entered a decree dismissing the original bill and amended bill of the White Star Mining Company of Illinois, the cross-bills of Claes W. Johnson and Peter H. Anderson, and granted the relief prayed for in the cross-bills of Neis O. Hultberg and the covenant. The decree directs that Peter H. Anderson pay to Neis O. Hultberg the sum of $232,200, with interest at five per cent from April 13, 1904; that the White Star Mining Company of Illinois pay Neis O. Hultberg the sum of $23,686.25, with interest at five per cent from April 13, 1904, and that the Merchants’ Loan and Trust Company pay Neis O. Hultberg $6813.75, and directs the White Star Mining Company of Illinois to transfer to Neis O. Hultberg said claim No. 9 Above, and the court retained jurisdiction of the case for the purpose of appointing a receiver, if necessary, and making such further orders as might be necessary to carry the decree into effect. The White Star Mining Company of Illinois has prosecuted an appeal direct to this court to reverse said decree, and Peter H. Anderson and Claes W. Johnson have assigned cross-errors. The first question that is presented for consideration in the determination of this appeal upon its merits is, did the trial court err in holding it did not have the power to go behind the award, as there was no proof of actual fraud upon the part of the arbitrators, and nothing appeared upon the face of the award to impeach the action of the arbitrators in making the award ? In this State three classes of arbitration are provided for. Two are regulated by statute and one exists according to the course of the common law. The submission in question was a common law submission, and it is governed by the common law. The article of submission is the warrant of authority of the arbitrators, and they can proceed legally only in accordance with the submission. They must decide all the questions submitted to them, and can decide only those questions which are submitted, and when the submission contains directions as to the manner in which the submission is to be executed and contains rules for the governing of the arbitrators in its execution, the arbitrators must proceed in the manner and under the rules laid down in the submission for their government, otherwise they will have exceeded their authority and their award will be void. In Bartlett v. Bartlett & Son Co. 116 Wis. 450, (93 N. W. Rep. 473,) the court said: “The jurisdiction of arbitrators is absolutely and strictly limited by the contract of submission, whether such contract be one formally entered into between the parties or be implied from- their being members of a voluntary organization which, by its rules, requires them to submit their differences to the particular tribunal. The jurisdiction of the arbitrators cannot be extended beyond the contract of submission by their decision upon any jurisdictional question. When the submission requires the matters to be determined to be tested by a particular rule, whether it be a rule of law or a rule of the corporation or association, the adoption by the arbitrators of a different rule, or a disregard of the rule and decision of the matter according to the notions of the arbitrators of what is just in the premises, is a departure from the submission, just the same as the inclusion in the submission of matters of difference not involved at all in the particular controversy to be settled.” There are two classes of submissions at common law,—general and special. By a general submission all questions of law and fact connected with the subject matter of the submission are submitted to the arbitrators, without limitation, for decision; by a special submission the subject matter of the submission is submitted to the arbitrators for decision, subject to the limitations found in the submission as to the method of procedure or the rules which are to govern the arbitrators’ action in making the award. The power conferred upon the arbitrators is a delegated power, and the persons delegating the power may incorporate in the submission such limitations as they may deem proper which will govern the arbitrators, and that makes the arbitration special. In the submission of matters to arbitrators for decision it is common for the parties making the submission to provide in the submission that the arbitrators shall act upon competent evidence only, and that they shall proceed according to law in making their award, and'it is held that such a limitation is binding upon the arbitrators, and if they disregard such limitation their action is void. If the submission is general, the arbitrators may decide both questions of law and fact. If it is special and provides the arbitrators shall determine the rights of the parties according to law, a plain mistake in the consideration of the law by the arbitrators is in violation of the terms of the submission and furnishes ample grounds upon which to avoid the award. The law governing the matter now under consideration is thus laid down in the Cyclopedia of Law and Procedure (vol. 3, p. 740) : “Whenever the arbitrators are required, by the terms of the submission or by a statute or rule of court under which the arbitration proceeds, to determine the rights of the parties according to law, a plain mistake in their construction of the law is sufficient ground upon which to avoid the award.” And in the American and English Encyclopedia of Law (vol. 2,—2d ed.—p. 783) : “Where the parties, by the express terms of the submission, stipulate and require that the hearing shall be conducted and the award made in conformity with the rules and principles of law, and the arbitrators are mistaken in their finding on the law, the award will be set aside for such mistake.” And Mr. Adams, in his work on Equity, (p. *192,) speaking of the cases in which the enforcement of the award may be successfully resisted, includes the following: “If they [the arbitrators] have acted on a mistake of law, when the law itself is not referred but the reference was to decide on facts according to law.” And Morse, in his work on Arbitration and Award, (p. 300,) uses the following language: “The cases in which a mistake in law by the arbitrator will render his award void may be divided into two classes: (1) Where the parties themselves, in their submission, stipulate and require that the hearing shall be conducted or that the decision shall be made in conformity with the rules and principles of law; (2) where the arbitrators themselves, either by the shape in which they make their award or by embodying in it a statement of the grounds of their decision or of their intention to be governed by legal principles, have conferred upon the court a power of inquiry and revision which it would not otherwise have had. With regard to the first of these classes, it is admitted in all cases that it is perfectly competent for the parties to embody in their submission a valid limitation or restriction requiring the arbitrators to proceed and decide according to law.” In Greenough v. Rolfe, 4 N. H. 357, the submission provided that the referees “should decide the cause upon just and legal grounds.” The award was set aside, and in deciding the case the court said: “In this case the referees were, by the agreement of the parties, as we understand it, restricted to decide according to law. We must therefore presume that they intended to make the law their guide, and as they have mistaken the law, this would be a good reason why the report should not be accepted.” In White Mountain Railroad Co. v. Beane, 39 N. H. 107, the court said: “A reference may be limited, and in such case any disregard of the limitations which the parties have prescribed will be fatal to the award, as, if the parties agree that the arbitrators shall make their award agreeably to legal principles, and if they mistake the law the award will be set aside.” In Sanborn v. Murphy, 50 N. H. 65, the court said: “We have seen that the rule was in the common form, containing no restriction as to evidence or grounds of decision. * * * Parties may, and often do, limit a reference by providing that the award shall be made in accordance with legal principles, in which case the referees will be bound by the limitation; and if in such case they disregard or mistake the law, their award will be set aside.” In Kleine v. Catara, 2 Gall. 61, Mr. Justice Story said: “If the parties wish to reserve the law for the decision of the court they may stipulate to that effect in the submission. They may retain or enlarge its operation, as they please. If no such reservation is made in the submission, the parties are presumed to agree that everything, both as to law and fact, which is necessary to the ultimate decision, is included in the authority of the referees.” In Boston Water Power Co. v. Gray, 6 Metc. 131, which is a leading case upon the subject of arbitration, Mr. Chief Justice Shaw, in discussing the effect of a submission wherein the arbitrators are required to decide conformably to law, on page 166 says: “If the submission be of a certain controversy, expressing that it is to be decided conformably to the principles of law, then both parties proceed upon the assumption that their case is to be decided by the true rules of law, which are presumed to be known to the arbitrators, who are then only to inquire into the facts and apply the rules of law to them, and decide accordingly. Then, if it appears by the award, to a court of competent jurisdiction, that the arbitrators have decided contrary to law,—of which the judgment of such a court, when the parties have not submitted to another tribunal, is the standard,—the necessary conclusion is that the arbitrators have mistaken the law which they were presumed to understand. The decision is not within the scope of their authority, as determined by the submission, and is for that reason void.” And again, in the same case, in discussing the effect of the submission, wherein matters of law and fact are submitted to the arbitrators, on page 168 he says: “But where the whole matter of law and fact is submitted, it may be open for the court to inquire into a mistake of law arising from matter apparent on the award itself, as, where the arbitrator has, in his award, raised the question of law and made his award in the alternative, without expressing his own opinion; or, what is perhaps more common, where the arbitrator expresses his opinion, and, conformably to that opinion, finds in favor of one of the parties, but if the law is otherwise in the case stated, then his award is to be for the other party. In such case there is no doubt the court will consider the award conclusive as to the fact and decide the question of law thus presented. Another case, somewhat analogous, is where it is manifest, upon the award itself, that the arbitrator intended to decide according to law but has mistaken the law. Then it is set aside because it is manifest that the result does not conform to the real judgment of the arbitrator, for then, whatever his authority was to decide the questions of law, if controverted, according to his own judgment, the case supposes that he intended to decide as a court of law would decide, and, therefore, if such decision would be otherwise, it follows that he intended to decide the other way.” While the question here under discussion has not been passed upon by this court in the precise manner in which it is here presented, we -think this court is committed to the doctrine announced by the text writers and adjudicated cases hereinbefore referred to. In Ryan v. Cudahy, 157 Ill. 108, the question to whom certain margins which had been deposited to secure a trade upon the board of trade of the city of Chicago should be paid, arose between members of the board. The matter was submitted, under the rules of the board, to a committee, who acted as arbitrators, for settlement and determination. The committee, on the hearing, refused to hear, as they were bound to do by the rules of the board, evidence that the price for which the margined product sold on the day the contracts were closed was a fictitious price, caused by that product being cornered upon the niarket. This court, in its decision, assumed the rule requiring the parties to arbitrate to be valid, and that the parties, being members of the board, were bound by that rule, but held, the committee having refused to give the parties a hearing according to the rules of, the board by refusing to permit them to make the proof offered, that a court of equity might rightfully assume jurisdiction over the subject matter of the litigation and cause an account to be stated between the parties and determine to whom the margin should be paid. On page 119 of the opinion it was said: “The committee appointed under section 6 of rule 20 to determine to whom the margin deposit belonged or should be paid may be regarded as a tribunal of limited jurisdiction, and they are bound to proceed in conformity to the rules under which they were selected, and if they failed to conduct the investigation in accordance with the charter and by-laws of the board of trade, under which they were appointed, the complainant ought not to be bound by their judgment. It seems plain that where property rights are involved, as is the case here, the courts have the power to so far supervise the action of a tribunal like the one in question as to determine whether they have proceeded according to the rules and regulations provided for their action, and, if they have failed in a substantial manner, correct abuses which may result from their unwarranted procedure.” The same question came before this court in Pacaud v. Waite, 218 Ill. 138, and it was there held the rule requiring the parties to arbitrate the question to whom margins should be paid upon deals upon the board of trade between its members was a valid regulation, and that a court of equity would not take jurisdiction to determine the question to whom such margins belonged, unless the committee provided by • the rules of the board of trade refused to proceed in accordance with the rules of the board. In these cases the parties litigant were members of the board of trade. The committee occupied the position of arbitrators, and the rules of the board stood in the place of an article of submission. These rules pointed out the method in which the committee should proceed, and this court held if the committee failed and refused to proceed in accordance with the limitations placed upon it by the rules of the board, a court of equity might review its action. As showing the similarity of the proceedings before said committee and that before arbitrators, we quote the following from Bartlett v. Bartlett & Son Co. supra: “A trial by a tribunal of a board of trade, provided for by its rules, or that of any other voluntary organization, is like one before a board of arbitrators agreed upon by parties to the controversy submitted to them. Its scope is limited by the rules of the organization. A violation thereof is jurisdictional error which will vitiate the result, and if private rights of a contestant are injuriously affected thereby a court of equity can afford relief.” In view of the foregoing authorities, and on principle, we think it clear that when the submission provides the arbitrators shall determine the rights of the parties according to law such limitation is valid and binding upon the arbitrators, and if the arbitrators, in determining the rights of the parties, clearly mistake the law, a court -of equity may set aside the award on the ground that in making the award the arbitrators have violated the terms of the submission. If such be the law, does the submission executed by the parties in this case require the arbitrators to decide the matters submitted to them according to law? That question must be determined from a consideration of the entire agreement of submission. The submission recites that it is an “agreement of special submission to arbitration.” This provision would indicate that the parties understood the difference between a general submission and a special submission, and that they intended by the submission to limit the powers of the arbitrators, to some extent, at least. In other words, that they did not intend to submit the matters in controversy between them by a general submission to said arbitrators, otherwise they would, not have designated the submission as a special submission. It is also provided in the submission that said arbitrators shall be the judges of the admissibility of evidence, and shall be liberal, and not technical, in the admission of evidence, but their conclusions shall be based upon legal and competent evidence only. From the foregoing provisions it would seem clear that the parties intended the arbitrators should pass upon the admissibility of evidence as it was submitted, and that they should be liberal in their rulings upon the admissibility of evidence, but that they should nevertheless base their award upon legal and competent evidence, as contradistinguished from illegal and incompetent evidence. To illustrate: While the arbitrators should not require the same order of proof, the same exactness in the form of questions, and impose upon parties the same restraint in the examination and cross-examination of witnesses in the introduction of their evidence before the arbitrators which a court would require in a trial before the court or a jury, still the arbitrators should not permit an express trust to be established by parol testimony, nor hold that the burden of proof was upon a party who was sought to be charged as trustee to show he was not a trustee, or permit a party to recover upon a claim which he had released in consideration of the payment to him of a large sum of money, without at least a return of the money to the party who had paid it to him and whom he had sued. The next provision found in the submission which limits the general powers of the arbitrators is, in substance: Said arbitrators, or any two of them, shall to the best of their ability hear, determine and adjudicate upon all such matters in controversy upon broad principles of equity and justice, having due regard as well for the moral as the legal rights of said parties and the law of the land. Said arbitrators shall give to all parties hereto the full benefit and advantage of all rights, under the laws of any State or the District of Alaska, which might have been availed of in any prosecution or defense in any court, and particularly shall full benefit and advantage be given to any defense which might have been made in any suit or legal proceeding which might or could have been instituted by said Hultberg or said covenant, whether consisting of .matters of law or fact, and any such last mentioned defense which shall be sustained by evidence or authority of statutory or common law shall be deemed a sufficient defense by the arbitrators, the same as it would have been if presented in any regularly constituted court of justice, and in case they shall find in favor of Hultberg, they shall, as the evidence and the facts and the law may warrant, award damages. They shall be the exclusive judges of the procedure, except as herein stated. The object of this submission is that there shall be a full, complete and just determination of all matters in controversy embraced herein, regardless of all technicalities, and that said adjudication shall be had upon the true merits of said controversy and according to law. The foregoing provisions are broad and comprehensive, and provide in express terms that the matters in controversy between the parties submitted to the arbitrators for decision shall be by them decided upon “legal and competent evidence only” and “according to law.” The only question, therefore, open to discussion on this branch of the case is, are these provisions mandatory or only directory?. If directory, the arbitrators could follow them or not, as they saw fit; if mandatory, they were bound to follow them, or their award would be void. The evidence shows that the submission was prepared by able and competent lawyers, and it was designated by them as a special submission, and it was expressly provided therein that the conclusions of the arbitrators should be based upon legal and competent evidence only, and the controversy decided according to law. Why designate the submission a special submission, if, as a matter of law, it was a general submission? Why provide that the arbitrators should base their conclusions upon legal’ and competent evidence onfy, and that the controversy should be decided according to law, if it was the intention of the parties that the arbitrators should comply with or. disregard those provisions if they saw ñt, and'in case they did disregard them, the parties would be remediless? From a careful consideration of all the provisions found between the “four corners” of the submission we are impressed that the parties to said submission placed the provisions heretofore referred to therein for a purpose, and that those provisions cannot be disregarded as surplus-age in determining the meaning of said submission, and that the provision that the controversy should be decided upon legal and competent evidence only, and according to law, must be held to be a limitation upon the powers of the arbitrators and mandatory and binding upon them, and such limitation as could not be disregarded by the arbitrators. It is said, however, that this submission provides that the award of the arbitrators shall be final. True; but every submission, either in terms or impliedly, provides the award based thereon shall be a final settlement of the matters submitted to the arbitrators for their determination, and this award would have been final if the arbitrators had proceeded in accordance with the terms of the submission, and the reason it is not final is because the arbitrators did not proceed in accordance with the terms of the submission, but exceeded their authority, as defined in the submission. Professor Morse, in his work on Arbitration and Award, on page 87, in considering this question, says: “An agreement simply that the award shall be ‘final and conclusive’ is powerless to taire away the fight to assail its validity in the ordinary way and upon the ordinary grounds. * * * Such a stipulation is subject to the implied condition that the award be made according to the submission.” And in Mussina v. Hertzog, 5 Binn. 387, it was said: “Neither party is barred by the terms ‘final and conclusive.’ They are common to every rule of reference.” And in McCracken v. Clark, 31 Pa. St. 498: “The language ‘final and conclusive,’ used in a submission, * * * is subject to the implied condition that the award be made according to it.” Our conclusion therefore is, the trial court erred in holding it did not have the power to go behind the award made by Lane and Gilbert, and to investigate the case upon its merits, with a view of determining whether the matters in controversy between the parties submitted to the arbitrators for decision were determined by them upon legal and competent evidence only, and according to settled principles of law. It was claiméd before the arbitrators that while the legal title to claim No. 9 Above was in Peter H. Anderson he held it in trust for the benefit of the covenant, and that it was his duty to convey the claim to the covenant and turn over to it the gold taken therefrom, on request, and that the appellant and Claes W. Johnson had acquired their interest in the claim with notice of the covenant’s rights therein, and that they took the claim, and its proceeds, impressed with said trust, and that their rights therein were the same as, and no greater than, those of Peter H. Anderson. On the trial in the court below there was introduced in evidence a certified copy of the proceedings before the arbitrators, which included a transcript of the evidence heard before them, from which it appears that on July 31, 1898, a party consisting of John Brynteson, H. L. Blake, Neis O. Hultberg, Christ. Kimber, J. A. Hagelin and a Mr. Porter went from Chinilc up the coast on a prospecting trip; that, the weather being stormy, they entered Snake river and prospected in the vicinity of the mouth of that river for a day or two, and discovered gold in small quantities upon Anvil cfeek, but made no locations and staked nó claims, but soon returned 'to Chinik, and Blake, Kimber, Hagelin and Porter, so far as the record shows, never returned to Anvil creek. Neis O. Hultberg, on the 31st day of August, 1898, returned to the States, afterwards went to Sweden, and was not on Anvil creek until in the summer of 1899. On September 11, 1898, John Brynteson, Japhet Hinder-berg and Eric O. Lindblom started on a second trip to Snake river and arrived at Anvil creek September 15, where they remained several days prospecting and locating and staking claims. That region at that time was a wild and unexplored country, and the party were unfamiliar "with mining and the law governing the locating and staking of placer mining claims, except in a general way. They found gold in paying quantities on Anvil creek and staked a number of claims. They located, staked and named the claim where they first found gold on Anvil creek, as “Discovery,” and then staked claims above and below that claim, the claims below Discovery on the creek being designated as claim “No. 1 Below,” claim “No. 2 Below,” etc., and those above Discovery on the creek as claim “No. 1 Above,” claim “No. 2 Above,” etc. The law governing the location of placer claims upon property belonging to the government provides that claims shall be 1320 by 660 feet. The parties had no method of making accurate measurements, but stepped the claims and located and staked them 1500 feet in length up and down the creek. There is no direct evidence in the record showing that on that trip claims were located or staked higher up on Anvil creek, above Discovery, than claim No. 6 Above. The party returned to Chinik about the first of October, and on October 12 another party, consisting of Brynteson, Hinderberg and Lindblom, who made the second trip, and G. W. Price, A. N. Kittelson and John Tornensis, started from Chinik to Snake river. Price was an expert miner who had arrived at Chinik about the first of October. Kittelson was in the employ of the government as superintendent of reindeer, and Tornensis was a Laplander, also in the employ of the government. On the arrival of the party at Anvil creek they organized a mining district, and the claims which had been located and staked when the party was there in September were re-located and re-staked under the direction of Price. They started, as before, with Discovery, which was reduced in length from 1500 to 1320 feet, and located and staked a number of claims below Discovery and twelve claims above Discovery. The claims, as re-located and re-staked, were reduced in length and were measured and staked 1320 feet up and down Anvil creek and 660 feet in width. The claims, up to and including No. 6 Above, were re-located and re-staked in the names of the parties who had located and staked them at the time the second party visited Anvil creek, and No. 7 Above was located and staked in the name of Kittelson, No. 8 Above in the name of G. W. Price, and No. 9 Above in the name of R. L. Price by G. W. Price, as attorney in fact of R. L. Price. The only evidence before the arbitrators as to what was done on the second trip to Anvil creek in the way of locating and staking claims was the testimony of Price and Kittelson, who were examined as witnesses before the arbitrators, and the.deposition of John Brynteson, which had been taken in another case, which, by agreement, was read in evidence before the arbitrators. The witness John Brynteson, in his deposition, referred to the location of no claim when the second party was at Anvil creek, above claim No. 6 Above, although he testified fully as to what was done by the party at that time, and Price and Kittelson both testified that when they went upon the ground in October they found the stakes standing showing the location and staking of claims No. 1, No. 2, No. 3, No. 4, No. 5 and No. 6 Above, but they found no stakes or other evidence of the location or staking of claims on Anvil creek above No. 6 Above, and that they had never heard, until after their return to Chinik, that any claims had been staked upon Anvil creek above No. 6 Above by the second party which went from Chinik to Anvil creek. The' records of the mining district were offered in evidence, and they showed that claims Nos. i, 2, 3, 4, 5 and 6 Above on Anvil creek were located at the time the second party was on Anvil creek, and that claims Nos. 7, 8 and 9 Above were located at the time the third party was on Anvil creek, and at that time there was and could have been no reason for falsifying the records as to the date of the location and staking of said claims. The only evidence before the arbitrators to impress a trust upon No. 9 Above were certain alleged admissions of Peter H. Anderson, testified to have been made by him many months after the purchase of claim No. 9 Above from Price. These admissions were claimed to have been made by Peter H. Anderson in casual conversations, at different times and places, with persons in no way interested in claim No. 9 Above, except those testified to by Neis O. Hultberg, who claimed to have some interest therein as the agent of the covenant, some of the parties testifying Peter H. Anderson said to them he held claim No. 9 Above in trust for Gabriel and Constantine, two Eskimo boys who were inmates of the mission at Chinik, others that he said he held claim No. 9 Above in trust for the covenant, and others that he said he held claim No. 9 Above in trust for the Eskimo boys and_the covenant. Peter H. Anderson denied that he had ever stated to anyone that he held said claim No. 9 Above for the benefit of Gabriel and Constantine, or for the covenant, or for the Eskimo boys and the covenant. .It appears that the Statute of Frauds is in force in the territory of Alaska. It is therefore clear that an express trust was not established in said claim No. 9 Above as against Peter H. Anderson and in favor of the covenant. An express trust in land cannot be established by proof of the oral admissions of the party sought to be charged as trustee. An express trust, as against the Statute of Frauds, cannot be established by parol proof. Dick v. Dick, 172 Ill. 578; Godschalk v. Fulmer, 176 id. 64.- It is, however, argued, that if the evidence does not establish an express trust it shows a resulting trust. The evidence introduced before the arbitrators showed that Neis O. Hultberg and Peter H. Anderson were not paid a salary for their services as missionaries at Chinik, but that Neis O. Hultberg and wife received $1000 per year and Peter H. Anderson $700 per year, in merchandise, for their salaries from the covenant. Hultberg and Anderson both agree that this amount of merchandise, when delivered to them, respectively, became their individual property. When the party which located claim No. 9 Above left Chinik for the Snake river they went in a boat which belonged to the mission, and which was in charge of the Eskimo boy, Constantine. Price, Kittelson and Anderson all agree in testifying that the use of the boat was paid for by the party who went on the third trip constructing for the mission a school house, and they all agree that the provisions which the party took with them belonged to the individual members of the party, and that nothing used by the party on the trip was furnished by the covenant or Hultberg. Kittelson testified he furnished one-half of the provisions used, from a stock of provisions which he had purchased otherwise than at the mission, and that Brynteson, Linderberg and Lindblom furnished provisions which they purchased from Dexter, a trader located near the mission, and Peter H. Anderson and Price and Kittelson testified Price paid his share of the expenses of the trip to Kittelson in cash, who adjusted the matter with the other parties, as Price had no provisions. As the covenant furnished no part of the consideration used in the location and staking of claim No. 9 Above, a resulting trust was not impressed upon the mine or the gold taken therefrom by Peter H. Anderson. To create a resulting trust the money or property going into the land must have been paid before or at the time the title vested,—not afterwards. The trust must be created, if at all, at the very time the title to the property is acquired. Such trust cannot be created by or arise out of a contract or agreement, and the use of funds or property in the payment for improvements or in developing the property after title has been acquired will not be considered as creating a resulting trust; (Holmes v. Holmes, 44 Ill. 168; Sheldon v. Harding, id. 68; Donlin v. Bradley, 119 id. 412; Pain v. Farson, 179 id. 185; Moore v. Hanserley, 109 Cal. 122;) and the law is well settled that there can be no resulting trust between two or more persons unless the exact amount contributed by each is clearly shown,—that is, that each party contributed an aliquot part,—and the burden of proving the same iá upon the beneficiary, and not upon the person sought to be charged as trustee; (Perry v. McHenry, 13 Ill. 227; Heneke v. Floring, 114 id. 554; Stephenson v. McClintock, 141 id. 604; Strong v. Messinger, 148 id. 431; VanBuskirk v. VanBuskirk, id. 9;) and the evidence to establish a resulting trust must be clear and satisfactory. In Towle v. Wads-worth, 147 Ill. 80, it was held that to establish a resulting trust the proof must be full, clear and satisfactory. And in Devine v. Devine, 180 Ill. 447, the evidence to establish a resulting trust must be certain, clear arid cogeht, and is always received with caution. And in St. Patrick’s Catholic Church of Sterling v. Daly, 116 Ill. 76, that before a resulting trust can be established in land purchased by a priest, on the ground that it was purchased for the church and with funds that equitably belonged to the church, the application of such funds must be satisfactorily shown. The proof submitted to the arbitrators failed to establish that any of the funds, or any portion of the supplies used at the time of the discovery, location or staking, of said claim No. 9 Above, were furnished by the covenant or by Neis O. Hultberg. It is, however, urged, that if an express trust or a resulting trust was not established, a constructive trust was established by reason of the fact that Peter H. Anderson was a missionary and in the employ of the covenant at the time the mine was discovered, located and staked and conveyed to him, and that by reason of the fiduciary relation which existed between Peter H. Anderson and the covenant the mine became the property of the covenant. The evidence wholly failed to establish a constructive trust. Peter H. Anderson was not sent to Alaska by the covenant for the purpose of discovering, locating, staking or operating gold mines, but to teach and christianize the Eskimos, and the covenant was organized, not for the purpose of engaging in the mining of gold, but to carry on Christian mission work in' the United States and foreign countries, spread the gospel and promote a Christian association and religious life between the church organizations and members thereof, and to do general Christian, charitable and educational work. It was therefore powerless to engage in the business of mining gold. A contract outside of the object of the creation of a corporation, as defined by the law of its creation, is wholly void and of no effect, (Central Transportation Co. v. Pullman’s Palace Car Co. 139 U. S. 24; People v. Pullman’s Palace Car Co. 175 Ill. 125;) and the sending of Peter H. Anderson to Alaska as a missionary did not create a fiduciary relation between Anderson and the covenant with reference to the subject of mining gold, as that business was entirely outside of his missionary work and outside of the object for which the covenant was organized. It is only where an employee acquires an interest in the subject matter of his employment that his principal can treat him "as a trustee. (Davis v. Hamlin, 108 Ill. 39.) The mining of gold and the teaching of the gospel to the Eskimos were wholly foreign to each other. Furthermore, if the trust attached at all, either as an express trust, a resulting trust or a constructive trust, it attached to the soil and to the gold therein, and not to the person of Peter H. Anderson; and even though the proof showed that the-second party which went to Anvil creek located a claim for the benefit of the covenant, when the district was organized by the third party that went to Anvil creek the boundaries of the claims were so far changed, they being reduced from 1500 feet to 1320 feet in length, that the claim known as “No. 9 Above,” staked on October 18, 1898, was not and could not have been the same land that was covered by the original claim No. 9 Above, if such a claim was staked by the second party in September, 1898, for the covenant, in the names of Gabriel and Constantine, or otherwise. For the reasons hereinbefore stated, we think it too clear for argument that the arbitrators erred in holding that Peter H. Anderson and his assigns held claim No. 9 Above, and the gold taken therefrom, in trust for the covenant. The evidence introduced before the arbitrators shows that in 1899 it was demonstrated that claim No. 9 Above was a very rich placer mine, and soon thereafter the Eskimo boys, Gabriel and Constantine, as well as the covenant, claimed it had been staked out by Peter H. Anderson for their benefit, and Gabriel and Constantine commenced a suit against Peter H. Anderson to recover the mine and its proceeds, in a court of record in Alaska. The claim of Gabriel and Constantine was settled, and Peter H. Anderson paid to them or their representatives the sum of about $15,000 in cash, and obligated himself to pay them $25,000 in installments in addition thereto, and a decree was entered establishing the title to said claim No. 9 Above, as against them, in Peter H. Anderson. From the time Peter H. Anderson acquired said claim No. 9 Above, to the year 1901, he donated to the covenant something like $41,000 in cash. In the year 1901 Peter H. Anderson heard that members of the covenant were circulating reports to the effect that the covenant owned said claim No. 9 Above, and that Peter H. Anderson held said claim No. 9 Above, and its proceeds, in trust for the benefit of the covenant, and were threatening to bring suit against him to recover said claim and its proceeds. Peter H. Anderson repudiated said claim, but proposed to the covenant that he would donate $54,000 in- cash, to be used by it in erecting a hospital and in furtherance of the other objects of its organization, if it would release all claim to said claim No. 9 Above and its output, and after much correspondence with the officers of the covenant, and after full consideration, the covenant accepted said proposition, and Peter H. Anderson paid to the covenant $54,000 in cash, which it accepted and now retains, and its president and secretary executed and delivered to Peter H. Anderson a release of all claims which they had against him. This action was taken and the release was executed with the knowledge of the board of trustees of the covenant and approval of its general conference. Corporations organized not for pecuniary profit, as well as corporations organized for pecuniary profit, and all individuals, are bound by all contracts which they are authorized to make, which are supported by a good consideration and which are knowingly entered into, and a court of equity, which is a court of conscience, will not sanction the enforcement of a claim which has once been released upon a fair and full settlement, and if a release of a cause of action has been procured by fraud, the party releasing the same must, within a reasonable time after the discovery of the fraud, return the consideration received in settlement of the claim and repudiate the settlement, or he will be deemed to have ratified the settlement. It is, however, said, that Peter H. Anderson only paid to the covenant its own money, and if he was credited by the arbitrators with the amount of said payment in the adjustment of his account with the covenant he has no reason to complain. The rule thus contended for might have some application here if Peter H. Anderson admitted he was a trustee, and held said claim No. 9 Above, and its proceeds, as trustee for the covenant. This, however, he does not admit and never has admitted, as he testified, and the doctrine contended for has no application to the facts disclosed by this record. ■ It also appears that Claes W. Johnson was fully informed as to the controversy between the covenant and Peter H. Anderson with reference to the ownership of claim No. 9 Above, and was also informed that the claim of the covenant against Anderson had been settled prior to the purchase of claim No. 9 Above by the White Star Mining Company of Illinois, of which he was president and in which he had invested his money. If the White Star Mining Company of Illinois and Johnson relied upon that settlement, as they had a right to do, in dealing with claim No. 9 Above, we think the covenant estopped, after said settlement, as against the White Star Mining Company of Illinois and Johnson, to claim ownership of said claim No. 9 Above, and as Neis O. Hultberg admits he paid the covenant nothing for the transfer of said claim No. 9 Above, arid its proceeds, to him, and will hold for the benéfit of the covenant whatever he gets out of claim No. 9 Above, and the gold taken therefrom, after he is re-paid for financing this litigation, he stands in no better situation than the covenant. In the hearing before the arbitrators, the attorney for Peter H. Anderson, Claes W. Johnson and the White Star Mining Company of Illinois asked the arbitrators to first ascertain and pass upon the question whether Neis O. Hultberg had any claim to claim No. 9 Above, and if it was held he had a claim to the mine, to then proceed to state the account between the parties. The arbitrators did not rule upon the question fully, but stated to the attorney for Anderson, Johnson ánd the White Star Mining Company that he should not be cut off from a full and fair accounting, but held that Peter H. Anderson and Claes W. Johnson should state at that time, in round numbers, the net receipts of the mine for the several years in which they had, respectively, been in possession thereof. This they proceeded to do, whereupon the arbitrators found claim No. 9 Above to be the property of Neis O. Hultberg, and then, upon the evidence before them, fixed the amounts Peter H. Anderson and the White Star Mining Company, as his assignee, should pay Neis O. Hultberg without any further information upon which to base an account than the statements of Peter H. Anderson and Claes W. Johnson of the net receipts of the mine for the years in which it had been in the possession of Anderson and the White Star Mining Company of Illinois. Three reasons are given in defense of this action of the arbitrators by the attorneys for Hultberg and the covenant: First, that the arbitrators took Anderson and Johnson at their word; second, that the time in which the arbitrators were to make their award was limited and that they did not have time to go into a full accounting; and third, if they had announced their holding that the claim belonged to Neis O. Hultberg, Anderson and Johnson and appellant would then have withdrawn from the submission, and they would have been powerless to make an award. We are not impressed with the soundness of these reasons. This mine had been operated by said parties for a number of years, and the covenant had received from the proceeds thereof, in donations or otherwise, $95,-000, which was a large return, according to its own view, on the few hundred dollars’ worth of provisions that it furnished Peter H. Anderson as a missionary while he was engaged with it in Alaska, and to hold that the mining property and its proceeds should be taken from Anderson and his assignees without allowing him or them something for their services in developing and operating the mine during those years, at least seems harsh and inequitable, and we are impressed with the conviction that from the manner in which the account was stated, Anderson and Johnson and the appellant were greatly surprised, and that the result, even though it were conceded the mine and its proceeds belonged to Neis O. Hultberg, reached by the arbitrators worked a great injustice to the appellant and Anderson and Johnson, and in law amounted to a fraud upon them.