Leach v. . Harris

69 N.C. 532

• Court: Supreme Court of North Carolina
• Decided: June 5, 1873
• Status: Published

Opinion

Reade, J.

The objections insisted upon in'thisCourt by the plaintiff, arise out of the award, and we therefore confine our review to them.

The defendant gave his notes to Normal College for $50, under a promise on the part of the College, that it would put up a College building near the lands of the defendant, which it was supposed would benefit the defendant, by reason of the enhanced value of his adjacent lands. The College did not put up the house, but sold the notes to plaintiff, before due, and transferred them by delivery wdthout indorsement. The plaintiff demanded payment of the notes, and the defendant insisted that he ought not to pay them, because the College had not built the house according to promise, and because the notes had not been indorsed to plaintiff. And the matter in dispute was referred to arbitration. The arbitrators decided that the defendant “does not owe the said notes or any part of them to the said Leach, or Trustees of Normal College, by reason of failure of consideration promised when said notes were obtained of said Harris; nor to said Leach, because it does not appear that said notes, or any one of them had been legally transferred to said Leach.”

The plaintiff insists that it appears from the award that the arbitrators undertook to decide two questions of law; and decided them wrong, and that, therefore, the award is void.

Although arbitrations are favored in law, as being a Court selected by the parties, and a cheap and speedy method of settling controversies, and although they are to be liberally construed so as to effect the intentions of the arbitrators, without regard to technicalities or refinements, yet it is well settled that where the arbitrators undertake to make the case turn upon matters of law, and mistake the law, the award is void. The reason is, that while it can be seen what their conclusion is, the law being as they suppose it to be, yet it is not seen what their conclusion would have been if-they had known the law to be otherwise. Indeed, as they profess to have been guided by the law, and were misled in one direction, it may be assumed that they would have gone in the other direction, if they had known that the law was there. Kent v. Estop, 3 East, 18; Young v. Waller, 9 Vesey, Jun. 365; Ryan v. Blount, 1 Dev. Eq., 386, and other cases cited by plaintiff’s counsel are satisfactory authorities upon that point.

It is equally well settled that arbitrators are not b rand to decide a case “ according to law.” For they are a law unto themselves, and may decide according to their notions of justice, and without giving any reasons.

The first question for our consideration is, did the arbitrators intend to be guided by, and decide the case according to law ?

The defendant said he did not think that he ought to be compelled to perform his promise to pay the notes, because the college had not performed its promise to build the 'house; and the arbitrators say they think so too. But whether they think so as a matter of law, morals or religion, they do not say; and'therefore we cannot say that they undertook to decide a question of law, and missed it.

Again, the defendant insisted that there had been no legal transfer of the notes to the plaintiff. And the arbitrators determine that there had been no “ legal transfer.” Now if the arbitrators found that there was no transfer at all, of course that was decisive against the plaintiff. But we supposed that the proper construction of what they say is, that they find that the mere delivery without an endorsement, was not a legal transfer. Now if they had gone further and said that because there was no legal transfer, they determined, as a matter of law, that the plaintiff could not recover of the defendant, either in law or equity, and that they must be governed by the law; then the question would arise whether they decided the laiv right. But they say no such thing. On the contrary, they say that there is no legal transfer of the notes to the plaintiff, and therefore the law does not compel us to allow him the fiotes, but leaves us free to decide according to our notions of right and justice. And so, according to our notions, it being unjust to make the defendant comply with his promise when the College has not complied with its promise, we decide that the defendant does not owe the College or the plaintiff anything.

The plaintiff objects that his Honor erred in charging the jury, that “ although the arbitrators attempted to decide according to law, and mistook the law, yet as there was an issue of fact submitted to them, to wit: as to the consideration of the note, as well as qestions of Jaw, their award was good.” The authorities already cited do show that his Honor was mistaken in the reason which he gave in holding the award good. But still he was right in the main point, to wit: that the award was good. No error.

IAM. Judgment affirmed.