Judge Robinson
did not sit, having been of counsel below.
This was a bill to set aside an award on the ground of fraud practised on the arbitrators. The chancellor
(Johns, jr.)
decreed, on the 18th of March, 1833, “that the award made in this case and the judgment rendered thereon were procured by the fraud of the said Woolsey Waples, the defendant,” and that “the aforesaid award and judgment so fraudulently obtained be and the same hereby are declared to be null and void.” And he also decreed an account. From this interlocutory decree the defts. appealed.
The case was this: The deft., Woolsey Waples, having purchased of a certain Samuel White a farm in which he, together with his brothers, Philip and James White, were equally interested, executed to the said Samuel White three several bonds with warrant of attorney to confess judgment thereon, upon which judgments were severally confessed on the 22d September, 1812, each for the real debt of $901 53, with interest from the 21st July, 1811. These judgments all stood in the name of Samuel White, but one of them was indorsed for the use of
Philip
White, and another for the use of
James
White, both of whom were infants under the age of twenty-one years, and for whom Samuel White acted, though he never was appointed, as guardian. Woolsey Waples made several payments to Samuel White on account of these judgments, and took receipts therefor, without designating to which judgment they were to be applied; one of $162 27, dated first July, 1813; one of $50, 11th July 1815; one of $126 22, 23d August, 1815, and one of $196 85, dated 30th August, 1815. On the 30th October, 1815, Samuel White, for a full and valuable consideration, assigned his judgment against Woolsey Waples to William D. Waples, one of the complainants, representing at the time that nothing had been paid upon it by the said Woolsey.
Between that time and the 21st of August, 1819, Woolsey Waples made six payments on account of said judgment to William D. Waples, the assignee, amounting in the whole to $1019 10, and leaving a balance unpaid of about $292: on the last mentioned day William D. Waples, assigned the balance of said judgment for a valuable consideration, to Hickman and West. Philip White having come of age, to wit: on the 15th September, 1816, called on Woolsey Waples, for a settlement of his judgment; and on this settlement Waples produced all the receipts aforesaid, for payments made to Samuel White, which Philip, ratifying the acts of his acting guardian, allowed as against his own judgment. Waples made a further payment on that day to Philip White and took a general receipt for $851 85,
including all these previous
receipts; but
he did not give up those receipts.
The balance still due on Philip White’s judgment was ascertained on that day to be $324 85. Both Philip and Samuel White shortly after left the state and have never returned. Hickman and West sued out a scire facias on the judgment assigned to them as aforesaid, returnable to the November term, 1820, which was afterwards referred by the consent of parties to the prothonotary and two other persons named by them “to ascertain whether any, and if any, what sum is due plaintiff, and judgment to be entered according to said report.” On this reference the deft. Woolsey Waples produced and claimed as credits to
this
judgment the receipts afsd. of Samuel White for $162 27, $50 00, $126 22, and $196 85, which were
allowed
by the referees; and they reported that there was nothing due on said judgment. Judgment nisi was rendered on this report at the May term, 1823. Whereupon, Hickman and West re-assigned their judgment to William D. Waples. Proceedings were afterwards instituted on the
third
judgment of Samuel White, being the one marked for the use of
James
White against Woolsey Waples; and, he having died, his administratrix took steps to ascertain what had been paid on account of that judgment. The matter was referred to arbitrators and at the hearing
all
the receipts were produced; when the
settlement
receipt of 15th September, 1816, for $851 85 being recognized as in the hand writing of Jacob Prettyman, who was present at the settlement and made the calculations it led to an explanation of the whole transaction. It then appeared that the receipts afsd. allowed by the referees in the case of Hickman and West, were applicable to Philip White’s judgment and that Woolsey Waples had previously obtained credit for them
on
that judgment. Neither William D. Waples nor Hickman and West knew of these circumstances until after the last reference in the year 1829.
Layton
for the appellant contended that the court of chancery had not jurisdiction to inquire into this award. Another court having full jurisdiction was in possession of the cause; it had been submitted by a rule of reference under the sanction of that court to referees chosen by the parties, and a report had been made and judgment ■rendered on their award. The court of chancery has no power to review this decision. He cited in support, of this position, 1
Mad. Ch’y
295, 298; 2
do.
713, 14. Also the case of
Pratt
and
Kinsey.
vs.
Bradun
and
Rice
decided in the late High Conrt of Errors and Appeals of this state in 1811; and the case of
Beeson’s adm’rs
vs.
Beeson’s ex’r.
in the same court, at the June term, 1831.
Courts favor awards. They tend to the speedy and amicable set
tlement of disputes. The causes for setting them aside must be for matter apparent on the face of the award, or improper conduct on the part of the arbitrators. The court will not strain an inference of
fraud; it must be apparent and flagrant. The complainants have succeeded in mystifying this case and throwing a suspicion over it by a confused introduction of the three judgments and the numerous re
ceipts applying to them; yet it is by no means certain that there has been either fraud or mistake in the case. At this distance of time; after the matter has long since been settled by the final action of a
court of justice, and after the only party having a perfect knowledge of the whole case is dead, it cannot be expected that we can give a perfect explanation of all the circumstances connected with it.
Doubts may arise on the whole case of the fairness of the transaction, but the court will not, on a mere doubt, disturb matters so long settled; much less will they presume a transaction fraudulent because it
is not now susceptible of the clearest explanation. Second. The decree in this case is erroneous because there are not proper parties to the cause. The decree is in favour of George Hickman and Lewis West, who, with William D.
Free access — add to your briefcase to read the full text and ask questions with AI
Judge Robinson
did not sit, having been of counsel below.
This was a bill to set aside an award on the ground of fraud practised on the arbitrators. The chancellor
(Johns, jr.)
decreed, on the 18th of March, 1833, “that the award made in this case and the judgment rendered thereon were procured by the fraud of the said Woolsey Waples, the defendant,” and that “the aforesaid award and judgment so fraudulently obtained be and the same hereby are declared to be null and void.” And he also decreed an account. From this interlocutory decree the defts. appealed.
The case was this: The deft., Woolsey Waples, having purchased of a certain Samuel White a farm in which he, together with his brothers, Philip and James White, were equally interested, executed to the said Samuel White three several bonds with warrant of attorney to confess judgment thereon, upon which judgments were severally confessed on the 22d September, 1812, each for the real debt of $901 53, with interest from the 21st July, 1811. These judgments all stood in the name of Samuel White, but one of them was indorsed for the use of
Philip
White, and another for the use of
James
White, both of whom were infants under the age of twenty-one years, and for whom Samuel White acted, though he never was appointed, as guardian. Woolsey Waples made several payments to Samuel White on account of these judgments, and took receipts therefor, without designating to which judgment they were to be applied; one of $162 27, dated first July, 1813; one of $50, 11th July 1815; one of $126 22, 23d August, 1815, and one of $196 85, dated 30th August, 1815. On the 30th October, 1815, Samuel White, for a full and valuable consideration, assigned his judgment against Woolsey Waples to William D. Waples, one of the complainants, representing at the time that nothing had been paid upon it by the said Woolsey.
Between that time and the 21st of August, 1819, Woolsey Waples made six payments on account of said judgment to William D. Waples, the assignee, amounting in the whole to $1019 10, and leaving a balance unpaid of about $292: on the last mentioned day William D. Waples, assigned the balance of said judgment for a valuable consideration, to Hickman and West. Philip White having come of age, to wit: on the 15th September, 1816, called on Woolsey Waples, for a settlement of his judgment; and on this settlement Waples produced all the receipts aforesaid, for payments made to Samuel White, which Philip, ratifying the acts of his acting guardian, allowed as against his own judgment. Waples made a further payment on that day to Philip White and took a general receipt for $851 85,
including all these previous
receipts; but
he did not give up those receipts.
The balance still due on Philip White’s judgment was ascertained on that day to be $324 85. Both Philip and Samuel White shortly after left the state and have never returned. Hickman and West sued out a scire facias on the judgment assigned to them as aforesaid, returnable to the November term, 1820, which was afterwards referred by the consent of parties to the prothonotary and two other persons named by them “to ascertain whether any, and if any, what sum is due plaintiff, and judgment to be entered according to said report.” On this reference the deft. Woolsey Waples produced and claimed as credits to
this
judgment the receipts afsd. of Samuel White for $162 27, $50 00, $126 22, and $196 85, which were
allowed
by the referees; and they reported that there was nothing due on said judgment. Judgment nisi was rendered on this report at the May term, 1823. Whereupon, Hickman and West re-assigned their judgment to William D. Waples. Proceedings were afterwards instituted on the
third
judgment of Samuel White, being the one marked for the use of
James
White against Woolsey Waples; and, he having died, his administratrix took steps to ascertain what had been paid on account of that judgment. The matter was referred to arbitrators and at the hearing
all
the receipts were produced; when the
settlement
receipt of 15th September, 1816, for $851 85 being recognized as in the hand writing of Jacob Prettyman, who was present at the settlement and made the calculations it led to an explanation of the whole transaction. It then appeared that the receipts afsd. allowed by the referees in the case of Hickman and West, were applicable to Philip White’s judgment and that Woolsey Waples had previously obtained credit for them
on
that judgment. Neither William D. Waples nor Hickman and West knew of these circumstances until after the last reference in the year 1829.
Layton
for the appellant contended that the court of chancery had not jurisdiction to inquire into this award. Another court having full jurisdiction was in possession of the cause; it had been submitted by a rule of reference under the sanction of that court to referees chosen by the parties, and a report had been made and judgment ■rendered on their award. The court of chancery has no power to review this decision. He cited in support, of this position, 1
Mad. Ch’y
295, 298; 2
do.
713, 14. Also the case of
Pratt
and
Kinsey.
vs.
Bradun
and
Rice
decided in the late High Conrt of Errors and Appeals of this state in 1811; and the case of
Beeson’s adm’rs
vs.
Beeson’s ex’r.
in the same court, at the June term, 1831.
Courts favor awards. They tend to the speedy and amicable set
tlement of disputes. The causes for setting them aside must be for matter apparent on the face of the award, or improper conduct on the part of the arbitrators. The court will not strain an inference of
fraud; it must be apparent and flagrant. The complainants have succeeded in mystifying this case and throwing a suspicion over it by a confused introduction of the three judgments and the numerous re
ceipts applying to them; yet it is by no means certain that there has been either fraud or mistake in the case. At this distance of time; after the matter has long since been settled by the final action of a
court of justice, and after the only party having a perfect knowledge of the whole case is dead, it cannot be expected that we can give a perfect explanation of all the circumstances connected with it.
Doubts may arise on the whole case of the fairness of the transaction, but the court will not, on a mere doubt, disturb matters so long settled; much less will they presume a transaction fraudulent because it
is not now susceptible of the clearest explanation. Second. The decree in this case is erroneous because there are not proper parties to the cause. The decree is in favour of George Hickman and Lewis West, who, with William D. Waples, are the parties complainant, but who have not a particle of interest in the suit. Hickman and West had given up their interest in the judgment, and re-assigned it . to William D. Waples before the bill was filed.
Frame,
Jlltorney-general,
for appellee. The taint of fraud always abides and will vitiate a transaction wherever and whenever it is discovered. I am aware that when parties submit their cause to arbitrators; judges of their own choosing, their decision should not be slightly interrupted. If such a judge, so chosen, should commit an error either in law or fact, even a plain mistake; if it be free from fraud or collusion the court of chancery would not relieve against it. I agree also that our courts have gone great length in sustaining awards; and though the jurisdiction of chancery over them has been conceded, it has been confined within narrow limits
(Bee-son’s adm’rs. vs. Beeson’s ex’r.)
but these limits are wide enough to
embrace a
case of glaring fraud—fraud not only on the party but on the referees—fraud now seen and admitted by the referees themselves. And such a case is this. Can it be that for such a case equity has no relief? The rules on the subject of inquiring into and setting aside awards in England are somewhat confused on account of the different kinds of awards in use there. There are three kinds—first, general, where the parties submit to- arbitrators without calling in the aid of a court; second, where during the pendency of a suit in court the parties refer it to arbitration, and this also is a reference at common law; and third, awards under the statute ninth and tenth William, which enabled parties where no suit previously existed to refer their controversies and make that reference a rule of court. That statute expressly makes the award conclusive except in certain specified cases and within a narrow limitation of time. That statute has never been adopted in this state; we have an act of our own of an old date, and all that is necessary for our purposes. These several kinds of awards in England introduce some confusion in the books, as in the passage cited from
Maddock,
295, 8. In such cases awards under the statute are always meant, and that statute is very
different from our act of Assembly. As to that act placing awards on the footing of verdicts, it can’t effect the question because fraud equally vitiates a verdict and can be relieved against. 1
Dall.
314;
Kid.
34,
n. a.; Caldwell on
Arbitration, 16, 17,
b.; Stat. Wm. Id.
184;
Kid.
327 to 330, 354, 358; 2
Hovenden on Frauds,
240; 1
Mad. Ch.
296; 2
Johns. Rep.
361, 364;
Dig.
112. Second. Don’t think it necessary to examine at length the position that a court of law has the exclusive jurisdiction of this question. Fraud is the peculiar subject of chancery jurisdiction. I agree that where a court of law does inquire into fraud it goes on equitable principles; but the forms of proceeding in those courts do not enable them to pursue fraud to any extent. This was the origin of chancery jurisdiction. The application at law in this case was refused in limine on the ground that it was too late there and expressly because the party had a resort to equity. The general rule at law is that the court will not inquire into awards after the term at which the report is made. The proceedings are too summary there to admit of an unlimited inquiry into awards. Several years had elapsed in this case before the fraud was discovered. Third. I come to the principal question: Has the fraud been made manifest here on the proof? I do not contend that fraud shall be presumed, but this does not mean that a court in investigating fraud shall not draw conclusions from facts: this is not presuming fraud but ascertaining it. 1
Hovenden,
21, 18. Fourth. Were Hickman and West improperly made parties. They stood for a long time parties on the record, entitled to the judgment and might have received the money. But additionally this is only an interlocutory decree; the chancellor has full power to make further decree; and, if it be so that Hickman and West have no longer any interest in this question, he may dismiss the bill as to them.
Layton,
for appellant.
Frame,
for appellee.
The court
affirmed
the decree of the chancellor.