Stout v. W. M. Garrard & Co.

91 So. 33, 128 Miss. 418

• Court: Mississippi Supreme Court
• Decided: March 15, 1922
• Docket: No. 23395
• Status: Published

Opinion

Ethridge, J.,

delivered the opinion of the court.

The appellant filed suit in the circuit court upon an award made in an arbitration proceeding concerning the contract for the erection of 'an office building for the ap-pellees. The declaration set forth the entering into a contract to erect the office building, making the contract, plans, and specifications, exhibits thereto. It then alleged that differences arose between the parties, and that certain correspondence passed with reference thereto, and that an agreement was entered into by the parties to arbitrate all differences between the parties concerning the said building, and makes the agreement to arbitrate and the award signed by the arbitrators exhibits to the declaration. The agreement to submit provides as follows:

“It is hereby agreed by and between W. M. Garrard & Co., a partnership composed of W. M. Garrard, P. M. Malone and S. R. Keesler, parties of the first part, and W. C. Stout, party of the second part, that all the matters now in controversy between the said parties relative to an office building just completed by the party of the second part for the parties of the first part, situated in the town of Indianola, Mississippi, shall be submitted to the decision of the three arbitrators, who shall 'be reputable and competent men, and shall be chosen as follows:

“The parties of the first part shall select one arbitrator and the party of the second part shall select one arbitrator, and the two arbitrators so chosen shall select the third arbitrator, said arbitration to be made on a date to be fixed by arbitrators not later than January 15, 1920, and the decision rendered by said arbitrators shall be final as to all such matters of controversy, and the parties of the first part will settle with the party of the second part according to such decision and all the parties to this contract hereby agree to be bound by the award so made.

“Witness our signatures this the 18th day of December, 1919. [Signed] W. M. Garrard & Co., by W. M. Garrard, Parties of the First Part. W. C. Stout, Party of the Second Part.”

The award, made on this agreement recites:

“In the arbitration between W. C. Stout v. W. M. Garrard & Co., relative to the construction of an office building at Indianola, Mississippi, W. M. Garrard & Co. selected Mr. S. L. McGinnis of Greenwood, Mississippi, as their representative, and W. C. Stout IV. G. Whetmore of Meridian, Mississippi, as his representatives, who both arrived at the office of W. M. Garrard & Co. on January 15, 1920. These two chose Mr. H. D. Bird of Greenville, Mississippi, as the third arbitrator, all of whom were duly sworn by the chancery clerk of Su'nflower county, at In-dianola, Mississippi. These arbitrators now respectfully submit the following report.”

The report then set forth the amount of the contract, with the extras allowed without question by the parties, and certain other items amounting to ten thousand, one hundred and forty-eight dollars and forty cents, and allowed the payments, which had been without dispute to Stout, amounting to seven thousand, four hundred and three dollars, showing a balance of two thousand, seven hundred and forty-five dollars and forty cents, and sets forth claims of Stout not allowed by TV. M. Garrard & Co., constituting a number of items, among which are delays caused by Garrard & Co., serious labor and material conditions, a heavily rising market, failure to keep verbal contract made with W. C. Stout to obtain for him additional good paying work, and recited that Stout had constructed an office building whose value closely approximates seventeen thousand dollar's, being about seven thousand dollars more than the amount of his contract, and allows Stout one thousand dollars, less four months’ office rent for this item; McGinnis voting, “Nay” on this last item, and the other two voting, “Yea.” A number of items are set forth which are allowed against Stout’s claims and numbers of claims of appellees, allowing one item of one hundred dollars for repairing plaster; this item being voted for by two of the arbitrators, and the third voting for three hundred dollars as to this item. Two of the arbitrators disallowed certain of the claims for which one of them voted for a given amount. The balance due after summing up the several items referred to awarded to Stout being three thousand, seven hundred and fifty-eight dollars and twenty cents. The award is closed as follows:

“Respectfully signed and sealed this the 16th day of January, 1920, with exceptions as noted.”

■ — and signed by the three arbitrators.

A demurrer was interposed to the original declaration and sustained, and the plaintiff filed an amended declaration containing four counts; three of the counts declaring on the award, and one of them declaring on the contract, and alleging the performance thereof. The declaration in the counts on arbitration were, one count on the statutes on arbitration, and the other two declared on a common-law arbitration and award. The count on the statutory arbitration alleged that the arbitration was full, complete, and final, and was and is the unanimous adjudication of the arbitrators, and Avas and is the aAvard on the part of said arbitrators as to the balance due plaintiff by defendants, and that at the hearing on said arbitration agreement the arbitrators heard all of the parties, and heard and considered all of the points in controversy between them, and passed upon and finally disposed of each and every question submitted to them fully and completely, and disposed of all controversies between the parties, and covered by the articles of submission, and unanimously agreed to award, and actually did award, in the said instrument, which is made an- exhibit to the declaration, as the full balance due him in and abont all of the matters submitted on said arbitration the sum of three thousand, seven hundred and fifty-eight dollars and twenty cents; that said award was not only signed by all three of the arbitrators, but was published by all three of them, and was delivered to each of the parties to said arbitration; that the defendants took full charge and possession of the building constructed by the plaintiff, and are' now in possession thereof, and have continued to hold and use and occupy said building since the malting of the award, and have kept and retained the signed and published award the arbitrators delivered to them, and that the amount had been demanded of the defendants by the plaintiff and payment refused by the defendants.

A demurrer was interposed to each of the counts declaring on the arbitration and was sustained by the court, and the cause proceeded to trial on the count declaring on the original contract, to Avhich the defendants pleaded the general issue, and gave notice under the general issue of certain defects in the building, and failure on the part of the plaintiff to perform his contract by way of recoupment. The counter notice was that the plaintiff would prove that about the time the building was constructed it was inspected by the architect, and had been approved and accepted with certain specific named exceptions, and that the defendants had given notice that they would accept the building and claim no damages other than the said specific items.

The trial resulted in a- verdict- for the defendants. The proof on the trial showed that certain defects developed in the building after the arbitration proceeding; and the proof for the defendant tended to show that the defects which aftenvards developed resulted from the fault of the plaintiff, and' that the building was greatly damaged thereby. During the progress of the trial the jury inspected the building at the instance of the parties, and during the inspection of the building a portion of the jury went on top of the building and inspected a skylight involved in the controversy; and a portion of the jury did not go on the building, nor did the judge and attorneys for the plaintiff go on the building, nor the stenographer and clerk of the court. After the rendition of the verdict the plaintiff made a motion for a new trial, setting up among other things as a reason therefor the facts that the jury separated and a part of them saw the alleged defect from above, while the others did not see it.

The plaintiff has assigned a number of errors for which he contends the judgment should be reversed. We will deal only with the ones dealing with the arbitration. In our opinion the arbitration was a good arbitration under the statute if the allegations of the declaration are true. Section 96, Code of 1906 (section 83, Hemingway’s Code), provides that all persons except infants and persons of unsound mind may by writing submit to the decision of one or more arbitrators any controversy which may be existing between them which might be the subject of an action, and may in such submission agree that the court having jurisdiction of the subject-matter shall render judgment on the award made pursuant to such submission, and provides that if parties agree on a court Avithout jurisdiction that the judgment shall be rendered by the court having jurisdiction in the county of the residence of the party or of one of them against whom the award shall be made. Section 97, Code of 1906 (section 84, Hemingway’s Code, provides for the qualifications of arbitrators. Section 98, Code of 1906 (section' 85, Hemingway’s Code), provides a time for meeting and notice to the parties. Section 99, Code of 1906 (section 86, HemingAvay’s Code), provides the form of notice and the method of serving the same. Section 100, Code of 1906 (section 87, Hemingway’s Code), provides that the arbitrators shall be .sAVorn. Section 101, Code of 1906 (section 88, Hemingway’s Code), provides that a majority of the arbitrators may malee an award unless the articles of submission provide to the contrary. Section 102, Code of 1906 (section 89, Hemingway’s Code), provides for tbe witnesses to be sworn. Section 105, Code of 1906 (section 92, Hemingway’s Code), provides for the signing of the award. Section 106, Code of 1906 (section 93, Hemingway’s Code), provides for the confirmation by the court. Section 107, Code of 1906 (section 94, Hemingway’s Code), provides how it may be vacated. Section 108, Code of 1906 (section 95, Hemingway’s Code), provides how it may be modified. Section 114, Code of 1906 (section 101, Hemingway’s Code), provides for the construction of the chapter, and reads in full as follows:

“This chapter shall not be construed to take away from the courts of equity their power over awards, nor to make invalid any award good at common law; and it shall be liberally construed for the encouragement of the settlement of disputes and the prevention of litigation.”

It will be seen from section 114 above set out that the chapter on Arbitration is to be liberally construed for the encouragement of the settlement of disputes and the prevention of litigation. It is also provided that any award that would be good at common law shall not be made invalid by the statute.

We think the articles of submission covered all of the matters in controversy which were known at the time of the submission, and that the effect of the submission and arbitration is to merge the cause of action then existing into the award. Yarbro v. Purser, 114 Miss. 75, 74 So. 425 ; Jenkins v. Meagher, 46 Miss. 84 ; Jones v. Harris, 58 Miss. 293. It is the policy of the state to permit parties to arbitrate their differences and to give effect to a valid submission and ward. Scottish Union & National Ins. Co. v. Skaggs, 114 Miss. 618, 75 So. 437. In Upshaw v. Hargrove, 6 Smedes & M. 286, and Hill v. Hill, 11 Smedes & M. 616, this court held that an award is prima facie good. In Jenkins v. Meagher, supra, this court held that an award will not be set aside because the witnesses were not examined under oath. It will be presumed, in the absence of a showing to the contrary, that the witnesses were brought before the arbitrators and examined nnder oath. We think the fact that the arbitrators met in the office of the defendants on the 15th of January, 1920, and that they were sworn by the chancery clerk and proceeded to hear the matters at issue, and the fact that they did not sign the award on that day, does not avoid the legality of the award. The declaration certainly alleges enough to show that they proceeded legally, and that the arbitration was participated in by the defendants until the award was made, signed, and delivered. It is not material, in our view, that the plaintiff did not proceed by motion. The form of the action would be immaterial. The statute prescribing the proceeding by motion was intended to give an expeditious and summary proceeding for it to be enforced in the court. In such case it can be declared on and enforced as a cause of action. At common law the suit would lie on an oral submission and an oral award. Tucker v. Gordon, 7 How. 306.

The common law required the award to be unanimous, unless the parties provided to the contrary. The present statute section 101, Code of 1906), above set out, provides the contrary- — that the majority may make the award unless the articles of submission provide the contrary. The fact that the articles of submission provide that one party may select one of the arbitrators and another may be selected by the other party, and the two selected shall select a third, carries with it the idea that the parties understood that they were proceeding under the statutory scheme, and that two out of the three so selected would be enabled to settle the controversy. If the parties had agreed on all three of the arbitrators, there would be more reason for believing that they contemplated a unanimous decision. It is evident, however, that they proceeded under the statute, and the statute was designed' expressly to dispense with, the common-law rule of unanimity. It would be a difficult matter to settle by arbitration any dispute if one party could select one of the arbitrators without the consent of the other, and this arbitrator could refuse to acquiesce in the finding- unless it was favorable to his friend. The statute is to be construed liberally. It is express in its terms to that effect. It was so provided no doubt with the knowledge that ordinarily articles of arbitration are prepared by parties not having knowledge of technical rules, and refinements ought not to be ingrafted by the courts upon such proceedings.

Viewing the articles of submission and the award in the light of all of the facts in the record, we think that the court was in error in sustaining the demurrers to the counts declaring on the award. In view of this decision, it is not necessary to decide the other points presented in the record. We desire to say, however, that when the jury views a scene or building for the purpose of enabling them to reach a correct conclusion they should be kept together and each of the jurors should see what the other sees. It is unnecessary to ' say whether the party complaining would be estopped by the facts like those relied upon here for estoppel.

The judgment will be reversed, and the case remanded.

Reversed and remanded.