STORY, Circuit Justice.
In this case, a submission having been made “of this action and. all demands, which the defendant has against the plaintiff,” the referees have made a special award, stating the grounds and principles of their award. A motion has been made to set aside this award on the ground, that the referees have committed mistakes in point of law, and have not awarded upon all the matters submitted to them. In support of these.objections, it has been argued, that if the referees mistake in a plain point of law or fact, either apparent upon the award itself, or made out in proof, the court ought to set aside the award. To the generality of this position we by no means accede. The clear result of the authorities is that the judgment of the referees is conclusive upon all matters of fact. Price v. Williams, 1 Ves. Jr. 365; 3 Browne, Ch. 163; 1 Browne, Ch. 117, 536; Morgan v. Mather, 2 Ves. Jr. 15; Dick v. Milligan, Id. 23. And upon principle, it seems difficult to hold another doctrine, without destroying the whole object, as well as the authority, of the arbitration. If, however, there be an error of [735]*735fact, as a mistake in calculation, apparent upon the face of an. award, or if referees are satisfied, that such a mistake has intervened, and wish to correct the error, although the court will not set aside the award, yet it will recommit it, to rectify the mistake. As little • do we incline to accede to the generality of the doctrine, as to mistakes in matters of law. It is certainly competent for the parties to submit the law, as well as the facts, to the judgment of referees, and to agree to abide by their judgment. There is neither inconvenience nor impolicy in supporting such an agreement. It is only substituting judges of the parties’ own choosing for those, who regularly administer the law of the land. 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 restrain or enlarge its operation, as they please. If no such reservation is made in the submission, the parties are presumed to agree, that every thing, both as to law and fact, which is necessary to the ultimate decision, is included in the authority of the referees.
Under a general submission, therefore, the arbitrators have rightfully a power to decide on the law and the fact; and an error in either respect ought not to be the subject of complaint by either party, for it is their own choice to be concluded by the judgment of the arbitrators. 2 Besides, under such a general submission, the reasonable rule seems to be, that the referees are not bound to award upon the mere dry principles of law applicable to the case before them. They may decide upon principles of equity and good conscience, and may make their award ex aequo et bono. S. P., Wood v. Griffith, 1 Swanst. 43, 55; S. P., Steff v. Andrews, 2 Madd. 6. We hold, in this respect, the doctrine of Lord Talbot in South Sea Co. v. Bumstead (2 Eq. Cas. Abr. 80, pl. 8); of Lord Thurlow in Knox v. Symmonds (1 Ves. Jr. 309; S. P., In re Badger, 2 Barn. & Ald. 691; 2 Story, Eq. Jur. § 1450-1458, and cases cited); of the king's bench in Ainslie v. Goff (Kyd, Awards, 331); and of the common pleas in Delver v. Barnes (1 Taunt. 48). If, therefore, under an unqualified submission, the referees meaning to take upon themselves the whole responsibility, and not to refer it to the court, to decide differently from what the court would on a point of law, the award ought not to be set aside. If, however, the referees mean to decide according to law, and mistake, and refer it to the court to review their decision, (as in all cases, where they specially state the principles, on which they have acted, they are presumed to do,) in such cases, the court will*set aside the award, for it is not the award, which the referees meant to make, and they acted under a mistake. On the other hand, if knowing what the law is, they mean not to be bound by it, but to decide, what in equity and good conscience ought to be done between the parties, their award ought to be supported, although the whole proceedings should be apparent on the face of the award. And this, in our opinion, notwithstanding some contrariety, is the good sense to be extracted from the authorities. Morgan v. Mather, 2 Ves. Jr. 15; Ching v. Ching, 6 Ves. 282; Young v. Walter, 9 Ves. 364; Kent v. Elstob, 3 East, 18; Delver v. Barnes, 1 Taunt. 48; Chace v. Westmore, 13 East, 357; Ainslie v. Goff, Kyd, Awards, 351. In Morgan v. Mather, Lord Loughborough lays it down as clear, that corruption, misbehavior, or excess of power, are the only grounds for setting aside awards; and although in the game case Mr. Commissioner Wilson says, that arbitrators cannot award contrary to law, because that is beyond their power, for the parties intend to submit to them only the legal consequences of their transactions and agreements; yet this reasoning is wholly unsatisfactory, not only from its begging the question, but from its being in direct opposition to very high authority. See Underhill v. Van Cortlandt, 2 Johns. Ch. 339; Todd v. Barlow, Id. 551.
If. in the case before the court, the referees had made a general award, without any specification of the reasons of their decision, it would have deserved very grave consideration, whether we could, by collateral evidence, have examined into the existence of any errors of law. We are not prepared to say, that such a course would be proper, unless the submission were restrained to that effect, or misbehavior were justly imputed to the referees. But here the referees have expressly laid the grounds of their decision before us, and have thereby submitted it for our consideration. This course is not much to be commended. Arbitrators may act with perfect equity between- the parties, and yet may not always give good reasons for their decisions; and a disclosure of their reasons may often enable a party to take advantage of a slight mistake of law, which may have very little bearing on the merits. A special award, therefore, is very perilous; but when [736]*736it is once before the court, it must stand or fall by its intrinsic correctness, tested by legal principles.
We will now consider, how far the present award can be sustained upon these principles; and in order to apply them, it will be necessary to consider, what are the material facts, upon which the award is founded.
(Here the Hon. Judge recapitulated the facts above stated.)
Upon these facts, which, so far as the present questions are concerned, are to be deemed to have been fully proved, the arbitrators decided, that Mr. Drake, the agent for the plaintiff at the Havana, having neglected and refused to execute the charter party, agreeably to the letter and spirit thereof, the defendant was of right discharged from any further observance of its conditions; that the plaintiff had no just or legal claim to any of the freight or earnings of the vessel, on her voyage from Havana to Boston; and that he, in equity, was entitled to a reimbursement of his advances, with interest and customary commissions, and upon these principles they found a balance in his favor of S3175.65. It is argued, that the arbitrators have erred in both these particulars; that the omission to comply with the stipulations on the part of the plaintiff .did. not discharge the defendant from his obligation to perform those on his part, but only rendered the plaintiff liable to pay damages to the defendant; and that, under the charter party, the plaintiff must be deemed to have been owner of the ship for that voyage, and as such was entitled to all her freight and earnings.
Free access — add to your briefcase to read the full text and ask questions with AI
STORY, Circuit Justice.
In this case, a submission having been made “of this action and. all demands, which the defendant has against the plaintiff,” the referees have made a special award, stating the grounds and principles of their award. A motion has been made to set aside this award on the ground, that the referees have committed mistakes in point of law, and have not awarded upon all the matters submitted to them. In support of these.objections, it has been argued, that if the referees mistake in a plain point of law or fact, either apparent upon the award itself, or made out in proof, the court ought to set aside the award. To the generality of this position we by no means accede. The clear result of the authorities is that the judgment of the referees is conclusive upon all matters of fact. Price v. Williams, 1 Ves. Jr. 365; 3 Browne, Ch. 163; 1 Browne, Ch. 117, 536; Morgan v. Mather, 2 Ves. Jr. 15; Dick v. Milligan, Id. 23. And upon principle, it seems difficult to hold another doctrine, without destroying the whole object, as well as the authority, of the arbitration. If, however, there be an error of [735]*735fact, as a mistake in calculation, apparent upon the face of an. award, or if referees are satisfied, that such a mistake has intervened, and wish to correct the error, although the court will not set aside the award, yet it will recommit it, to rectify the mistake. As little • do we incline to accede to the generality of the doctrine, as to mistakes in matters of law. It is certainly competent for the parties to submit the law, as well as the facts, to the judgment of referees, and to agree to abide by their judgment. There is neither inconvenience nor impolicy in supporting such an agreement. It is only substituting judges of the parties’ own choosing for those, who regularly administer the law of the land. 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 restrain or enlarge its operation, as they please. If no such reservation is made in the submission, the parties are presumed to agree, that every thing, both as to law and fact, which is necessary to the ultimate decision, is included in the authority of the referees.
Under a general submission, therefore, the arbitrators have rightfully a power to decide on the law and the fact; and an error in either respect ought not to be the subject of complaint by either party, for it is their own choice to be concluded by the judgment of the arbitrators. 2 Besides, under such a general submission, the reasonable rule seems to be, that the referees are not bound to award upon the mere dry principles of law applicable to the case before them. They may decide upon principles of equity and good conscience, and may make their award ex aequo et bono. S. P., Wood v. Griffith, 1 Swanst. 43, 55; S. P., Steff v. Andrews, 2 Madd. 6. We hold, in this respect, the doctrine of Lord Talbot in South Sea Co. v. Bumstead (2 Eq. Cas. Abr. 80, pl. 8); of Lord Thurlow in Knox v. Symmonds (1 Ves. Jr. 309; S. P., In re Badger, 2 Barn. & Ald. 691; 2 Story, Eq. Jur. § 1450-1458, and cases cited); of the king's bench in Ainslie v. Goff (Kyd, Awards, 331); and of the common pleas in Delver v. Barnes (1 Taunt. 48). If, therefore, under an unqualified submission, the referees meaning to take upon themselves the whole responsibility, and not to refer it to the court, to decide differently from what the court would on a point of law, the award ought not to be set aside. If, however, the referees mean to decide according to law, and mistake, and refer it to the court to review their decision, (as in all cases, where they specially state the principles, on which they have acted, they are presumed to do,) in such cases, the court will*set aside the award, for it is not the award, which the referees meant to make, and they acted under a mistake. On the other hand, if knowing what the law is, they mean not to be bound by it, but to decide, what in equity and good conscience ought to be done between the parties, their award ought to be supported, although the whole proceedings should be apparent on the face of the award. And this, in our opinion, notwithstanding some contrariety, is the good sense to be extracted from the authorities. Morgan v. Mather, 2 Ves. Jr. 15; Ching v. Ching, 6 Ves. 282; Young v. Walter, 9 Ves. 364; Kent v. Elstob, 3 East, 18; Delver v. Barnes, 1 Taunt. 48; Chace v. Westmore, 13 East, 357; Ainslie v. Goff, Kyd, Awards, 351. In Morgan v. Mather, Lord Loughborough lays it down as clear, that corruption, misbehavior, or excess of power, are the only grounds for setting aside awards; and although in the game case Mr. Commissioner Wilson says, that arbitrators cannot award contrary to law, because that is beyond their power, for the parties intend to submit to them only the legal consequences of their transactions and agreements; yet this reasoning is wholly unsatisfactory, not only from its begging the question, but from its being in direct opposition to very high authority. See Underhill v. Van Cortlandt, 2 Johns. Ch. 339; Todd v. Barlow, Id. 551.
If. in the case before the court, the referees had made a general award, without any specification of the reasons of their decision, it would have deserved very grave consideration, whether we could, by collateral evidence, have examined into the existence of any errors of law. We are not prepared to say, that such a course would be proper, unless the submission were restrained to that effect, or misbehavior were justly imputed to the referees. But here the referees have expressly laid the grounds of their decision before us, and have thereby submitted it for our consideration. This course is not much to be commended. Arbitrators may act with perfect equity between- the parties, and yet may not always give good reasons for their decisions; and a disclosure of their reasons may often enable a party to take advantage of a slight mistake of law, which may have very little bearing on the merits. A special award, therefore, is very perilous; but when [736]*736it is once before the court, it must stand or fall by its intrinsic correctness, tested by legal principles.
We will now consider, how far the present award can be sustained upon these principles; and in order to apply them, it will be necessary to consider, what are the material facts, upon which the award is founded.
(Here the Hon. Judge recapitulated the facts above stated.)
Upon these facts, which, so far as the present questions are concerned, are to be deemed to have been fully proved, the arbitrators decided, that Mr. Drake, the agent for the plaintiff at the Havana, having neglected and refused to execute the charter party, agreeably to the letter and spirit thereof, the defendant was of right discharged from any further observance of its conditions; that the plaintiff had no just or legal claim to any of the freight or earnings of the vessel, on her voyage from Havana to Boston; and that he, in equity, was entitled to a reimbursement of his advances, with interest and customary commissions, and upon these principles they found a balance in his favor of S3175.65. It is argued, that the arbitrators have erred in both these particulars; that the omission to comply with the stipulations on the part of the plaintiff .did. not discharge the defendant from his obligation to perform those on his part, but only rendered the plaintiff liable to pay damages to the defendant; and that, under the charter party, the plaintiff must be deemed to have been owner of the ship for that voyage, and as such was entitled to all her freight and earnings. Upon the true construction of the charter party, there was a covenant on the part of the plaintiff, not only to advance the defendant two thirds of the estimated value of the wine, but also entirely to load that part of the ship, which was chartered by him, at the stipulated price per quin-tal. He wholly failed so to do, and thereby became liable, in case the ship returned empty, to pay the whole freight, which would have been earned, if he had complied with his covenant. This seems to be the doctrine of the maritime law. Roccus de Nav. note 85; 1 Valin, Comm. 642; Beawes, tit. “Freight,” 110. (129). And it does not in effect differ from the common law. Abb. Shipp, p. 3. c. 7, § 2; Edwin v. East India Co., 2 Vern. 210. But the question here is, whether the ship is, under such circumstances, bound to return empty. and the owner obliged to pursue the voyage, although its whole objects are defeated, and look for recompense to the event of a suit for damages. It is said, that such is the .conclusion of law. unless the court shall construe the covenants in the charter party, as dependent covenants. 1Ye do not yield, however, to this argument, and no authority has been cited in support of it. Admitting the covenants to be independent and reciprocal, it does not follow that either party is bound to go on. when the whole objects of the agreement are defeated by the voluntary act of the other. In short, the principle would come to this, that on a covenant to carry a full cargo to a port at a stipulated hire, the owner of the ship would be obliged to perform the voyage, although the merchant utterly refused to furnish any cargo, or became incapable of so doing. On the one hand, if such a covenant were to be deemed a case of dependent covenants, the owner of the ship would not be compellable to proceed on the voyage, if any thing, however small, short of a full cargo, were furnished. On the other hand, upon the same reasoning, if the contract were to carry a full cargo, and less were earned, by the neglect of the owner of the ship, no freight would be due for the cargo actually transported. Vet such a construction would be in utter hostility to decided cases. Ritchie v. Atkinson, 10 East, 295. From the reason of the thing, therefore, covenants of this kind have been, in general, deemed independent; but even then a total failure by one party, going to the whole consideration of the contract, would be sustained as a bar to an action for non-performance by the other. Havelock v. Geddes, Id. 555. The correct principle, in contracts of this nature, would seem to be, that where the whole consideration for any stipulation fails, or where any stipulation becomes incapable of being performed substantially in the manner which the parties intended, by the voluntary act of either of them, the other party is not bound to proceed, but is at liberty to decline a performance thereof on his part. Equity would certainly persuade us to such a conclusion, and it will be found on examination, that it comports with law. Molloy (book 2, c. 4, § 3) holds, that if a time be appointed by the charter party, and the merchant is not ready to load the cargo, the other party is at liberty to seek another cargo, and hath his remedy for damages: and this doctrine is cited and approved by Abbott on Shipping (part 3. p. 225, c. 1, § 8). and seems confirmed by Roceus (De Nav. note 85). It seems also to have been conceded byall si des to be correct in Laurie v. Jamieson, Abb. Shipp. pt. 3, p.230, c. 1, § 10. and stands supported by the decision in Bell v. Puller, 2 Taunt. 285. See, also. Puller v. Halliday, 12 East, 494. Indeed Abbott insists, that in such a case it would be the duty of the master, on his arrival at the port of lading, to obtain another cargo, if possible, from other persons, and not sullenly to hoist sail and depart, in order to charge the merchant with the whole freight. Abb. Shipp. pt. 3, p. 457, c. 11, § 3. And the supreme court of New York, in Robertson v. Bethune. 3 Johns. 342, have decided, that when the return cargo was not ready to be put on board at the appointed time, from that moment the contract terminated to all intents and purposes, and both parties were absolved from all future liability under it. This is indeed pressing the doctrine to a greater extent. than we deem necessary for the present decision.
Upon the footing then of authority, as well [737]*737as of principle, we think that the neglect of the plaintiff to furnish a cargo pursuant to the charter party, absolved the defendant from a further prosecution of the voyage, if he should so elect; and enabled him rightfully to engage another cargo for another voyage. We think that sound policy and mercantile convenience, equally with the interests of all parties, and the principles of distributive justice, fully support us in this conclusion. In this respect, there is no error of law in the award of the referees, for they have not in effect held a more extensive doctrine.
[NOTE. The vessel was subsequently libeled in an action upon a bottomry bond. Case No. 7.293. It was sold upon the same, and certain payments made out of the proceeds. Case No. 7.294.]
This view of the subject might well dispose of the'second objection; but we think it admits of a satisfactory answer upon other grounds. The argument, that the plaintiff was owner of the ship for the voyage, and therefore the freight earned was for his account, is utterly untenable. So far was he from being owner for the voyage, that the whole ship was not even chartered to him. He had a right only to the use of the hold, and also of the part between decks of -the ship. The ship was also navigated at the expense of the original owner, and the master was appointed by him. There was therefore no general hiring in the charter party; but a mere special hiring of the ship to bring a cargo to the United States. The authorities, both in England and the United States, are decisive against the plaintiff as to this point. Vallejo v. Wheeler, Cowp. 143; Hooe v. Groverman, 1 Cranch [5 U. S.] 215; McIntyre v. Bowne, 1 Johns. 229; Fletcher v. Braddick, 5 Bos. & P. [2 Bos. & P. (N. R.)] 182; Cheriot v. Barker, 2 Johns. 346; Puller v. Halliday, 12 East, 494. And particularly Marcardier v. Chesapeake Ins. Co., 8 Cranch [12 U. S.] 39. Vide, also, Hutton v. Bragg, and the cases there cited; 2 Marsh. C. P. 339; Frazer v. Marsh, 13 East, 238. There is no ground therefore to consider the master as the agent of the plaintiff and contracting for his benefit under the new affreigfitment entered into at the Havana, for, whether the new voyage were tortious or rightful, the earnings of the ship belonged to the original owner. If rightful, then he would take them without account to the charterer; if wrongful, then he would only be responsible for the tort in damages. Being of opinion, that the conduct of the master was in this case rightful, we over-rule the objection to the award of the referees, on the question of the freight earned on the return voyage.
The only objection remaining is, that the award is not as extensive as the submission. The award is only as to the demand of the plaintiff submitted in this action, whereas the submission was also of all demands, which the defendant had against the plaintiff. Where the submission is of general matters, without any clause that the award shall be made of the premises submitted (which is technically called an “ita quod,” &c.) it seems to have been holden, that an award of a part only of the premises submitted is good, at least if the matters omitted were not necessarily dependent upon and connected with the other points. Baspole's Case, 8 Coke, 98; Cro. Jac. 200, 355; Simmonds v. Swaine, 1 Taunt 549. Perhaps the more reasonable rule, countenanced by respectable authority, is, that the arbitrators are bound to award upon all matters within the submission, which are actually controverted before them, whether there be such a special clause of “ita quod,”&c. or not.2 Be this as it may, it is very well established, that although the submission be general with or without a clause of “ita quod,” &c. an award is good of a single matter, if none other were laid before the arbitrators,3 and that will be presumed until the contrary is shown. Baspole’s Case, 8 Coke, 98; Cro. Jac. 200, 355; Hawkins v. Colclough, 1 Burrows, 274; Ingram v. Milnes, 8 East, 445; Hodges v. Hodges, 9 Mass. 320. But if it be shown, that other matters were before the referees, on which they have not awarded, although they intended so to do, there can be no doubt, that the award ought not to be accepted. In the present case, it is admitted that such was' the intention of the arbitrators, and as they have omitted to express their award with technical propriety, so as to reach every thing in controversy before them, we shall order it to be recommitted to them for this purpose. Award recommitted.4