Baltimore & Ohio R. R. v. Canton Co.

1 Balt. C. Rep. 1
CourtBaltimore City Circuit Court
DecidedAugust 25, 1888
StatusPublished

This text of 1 Balt. C. Rep. 1 (Baltimore & Ohio R. R. v. Canton Co.) is published on Counsel Stack Legal Research, covering Baltimore City Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Baltimore & Ohio R. R. v. Canton Co., 1 Balt. C. Rep. 1 (Md. Super. Ct. 1888).

Opinion

PHELPS, J.

The bill was filed 28th October, 1886, praying the cancellation of an award for $140,000 made 7th June, 1886, and an injunction restraining suit thereon. The grounds upon which the award is impeached are: 1st, that one of the arbitrators was at the time a large stockholder in the Canton Company without the knowledge of the plaintiff; and 2nd, that the amount awarded is excessive, and so far beyond the real damage by the taking of the land by the railroad company, as to indicate partiality or bad faith. The defenses are that the plaintiff, through its managing agent, had knowledge of the interest of the arbitrator, that the plaintiff further knew or ought to have known that the same arbitrator was also a large stockholder in its own company, that the award, instead of being excessive, is too small, and that the bill was not filed in time.

1. As to the amount. — At the request of counsel, I traversed the entire length of the strip of land, escorted by the engineers of the two companies, who vigorously contested with each other almost every step of the way If all I had to do was to adjudge upon a walking debate between these two professional gentlemen 1 should decide that the Canton engineer was overmatched in argument. The impression made while upon the ground, recalling the testimony of the witnesses to value upon either side, and in view of the comments of the experts, was that while the award was a very liberal one it was not so grossly inflated as to justify suspicion or bad faith on the part of the arbitrators. The problem appeared somewhat difficult and complex, as to the solution of which men of equal intelligence and information might honestly differ, and not professing to be an expert, either in land valuations or in questions of engineering, I simply give the opinion indicated for what it may be worth, deeming it due to counsel who naturally expect some result from the effort made at their instance. Upon this branch of the case I And no difficulty in holding that by their contract the parties expressly agreed to submit the entire question of valuation to the judgment of two men, and their judgment, no matter how mistaken or unreasonable it may appear to others, is conclusive between the parties, unless tainted by bad faith. “To substitute for it the opinion of other persons, whether judge, jury or witnesses, would be to annul the contract and make another in its place.” (Lynn’s case, 60 Md. 415; 8 Md. 221, 222).

2. As to the interest of the arbitrator. — It cannot be doubted that if the [2]*2corporation plaintiff, through its managing agent, was ignorant of the interest of one of the arbitrators, the award, however just it might appear to be, would upon reasonable application have to be set aside. Upon the other hand, it is quite as clear that acquiescence with knowledge is a waiver of the objection. Upon the proof, the ease is found practically to turn upon the issue of fact, whether the then Vice-President of the railroad company, who was its managing agent in the transaction, had or had not knowledge before the award was made of the fact in question. Before coming to the testimony some reference must be made to the principles applicable to cases of this class.

The relief prayed is that of cancellation and injunction, both classified as extraordinary remedies. Nothing need be said of the latter, since injunction here is but ancillary to the principle relief. The cancellation of the award necessarily involves the annulment of the agreement of submission, and throws both parties back on their reserved rights outside of it, whether legal or equitable. What we are dealing with, therefore, is nothing less than the attempted cancellation of an executed .contract. “Cancelling an executed contract is an exertion of the most extraordinary power of a Court of equity. The power ought not to be exercised except in a clear case.” (Atlantic Co. vs. James, 94 U. S. 214).

The burden rests upon the plaintiff to make out its case, and its whole case. The distinction is apparent between a case like this and a proceeding against a fiduciary to impeach a voidable transaction of such nature as to devolve the onus upon the latter. In such cases, if acquiescence on the part of the plaintiff be relied on, the burden of proof is on the fiduciary to show knowledge. Here the onus is upon the plaintiff to show ignorance, and the bill is correctly framed on that theory, upon the principle that such proof is peculiarly in the plaintiffs’ possession, and that the parties are dealing at arm’s length.

The proof is to be clear, that is, consistent, satisfactory and convincing. It is unnecessary to comment upon the plaintiffs’ testimony further than to say that’it is impossible to peruse the whole of this testimony and put it together without feeling that upon the vital question at issue it comes in a peculiar and questionable shape. Instead of having that unmistakable ring of certainty required in such cases, it is, as a whole, clouded with doubt. As an aggressive weapon in a highly stringent ease it is not a success.

3. As to laches. — What is a reasonable time for filing a bill to cancel an award? When a reference is made a rule of Court, four days is the limit of a motion to set aside the award. (Code of 1888, Art. 75, Sec. 46). An appeal from a judgment or decree must be taken within two months. (Code of 1888, Art. 5, Secs. 6, 30). Whichever one of these analogies be followed, the commencement of this proceeding was unreasonably delayed. Even giving the plaintiff the benefit of the doubt, upon its own admission it had knowledge of the essential fact as early as the 26th of June, and running the longest period of limitation indicated above from that date, the lapse of time is twice too much.

The only ease that has been found bearing directly on the point is Smith vs. Whitmore, 1 H. & M. 576, where a bill to set aside an award for miscarriage of arbitrators was dismissed by the Vice-Chancellor of England (Wood), holding that although there had been a clear miscarriage, the Court of Chancery, in the absence of fraud or gross injustice, should exercise its jurisdiction only when the matter was fresh and brought before the Court within the time which the Courts of law had adopted for such motions, by analogy to the provisions of the Statute 9 and 10 W. III. This decision was affirmed on appeal by a divided Court in 2 DeG. J. & S. 297.

This precedent, if followed strictly, would point to so short a period as four days as the limitation by analogy. While the principle upon which this decision is based commands my assent, the drift of Maryland adjudication seems to call for a somewhat more liberal application of the principle in this State. Here, “it has been repeatedly held, that upon the principle of analogy, the Court will apply express statutory restrictions in regard to time to cases of similar character, where no such express legislative provision [3]*3exists.” (Redman vs. Chance, 32 Md. 52; Edwards vs. Bruce, 8 Md. 395; Stocksdale vs. Conoway, 14 Md. 107)

Although in Maryland the occasion seems never to have before arisen for the application of the principle to a proceeding of this nature, the reason may possibly be found in the fact that until a very modern date the limitation of three years was allowed for taking an appeal from a judgment, and nine months from a decree, and no bill to vacate an award could have been longer delayed without encountering the defense of laches upon grounds quite irrespective of any statutory limitation by analogy.

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Bluebook (online)
1 Balt. C. Rep. 1, Counsel Stack Legal Research, https://law.counselstack.com/opinion/baltimore-ohio-r-r-v-canton-co-mdcirctctbalt-1888.