Summary
This was an appeal from the decision of the late vice chancellor of the first circuit, dismissing the complainants’ bill against the defendants, respectively, with costs. The facts appearing upon the pleadings and proofs, so far as they are material to the decision of the questions arising on this appeal, were as follows: The defendant Depew had recovered a judgment against Emerald Wheeler, in the marine court of New-York; upon which an execution was delivered to the marshal, who levied the same upon a quantity of apples lying upon the side walk, in front of the complainants’ store. 'The apples were claimed by the complainants, as their property, but the marshal refused to give them up ; whereupon they brought an action of replevin. They neglected to proceed in that suit, and were either nonsuited or nonprossed therein. An action was thereupon brought in the superior court, on the replevin bond, in the name of Lowndes, the sheriff, to whom it was given, but for the benefit of Depew, who was a defendant in the replevin suit. The complainants then brought an action of trespass against Depew in the supreme court. In this state of the business, the complainants in the present suit proposed to Depew to submit the question to referees. The parties thereupon entered into a written agreement in the suit pending on the replevin bond, to submit the question to S. T. Williams, A. M. Valentine and G. Ostrander, whether the apples belonged to the complainants or to Wheeler, at the time the execution was levied on them. And it was agreed that if the referees decided that the apples belonged to the complainants, then both suits were to be discontinued, without costs on either side, and the parties were to execute mutual releases. But if the referees found the title to have been in Wheeler, then they were to make a report, for the sum of $119,07, in the suit on the replevin bond; for which sum a judgment was to be entered in that suit, against the complainants and their bail, together with the costs of the suit, and the costs of the reference. The complainants and their bail also signed a relicta and cognovit for that sum, and released all errors in the proceedings and in the judgment which was to be entered thereon, and placed it in the hands of the attorney for the plaintiff in that suit, to be used if the decision of the referees should be against the title of the complainants. The attornies for the parties, by direction of their clients, signed a stipulation that the agreement or submission should be made a rule of court. This stipulation was thereupon filed, and a rule was entered in the superior court as a common rule, in the usual form of rules on reference by consent. The matter was thereupon heard before the referees, who made a report in writing, signed by them all, by which they found and decided that the title of the apples at the time of the levy was in E. Wheeler ; and they reported the amount due in the replevin suit according to the agreement. Whereupon the plaintiffs’ attorney filed the report and cognovit, and entered up judgment thereon according to the stipulation. The complainants applied to set aside the report, on the ground that the referees had improperly excluded the testimony of Wheeler as an interested witness. But the superior court decided that the reference was in the nature of an arbitration, and denied the application. The bill in this cause was thereupon filed to restrain the proceedings under the decision of the referees, and under the judgment.
for complainants. There has been no reference in this cause pursuant to the statute, and therefore no valid report under the statute. Where a cause is referred by consent, without a rule of court, or where the parties, by rule entered by consent, refer a cause not within the statute, the court will not interfere in setting aside the proceedings. But the parties are left to the same remedy as in the case of a mere submission to arbitrators, (1 Dunlap’s Pr. 540 ; 1 John. Rep. 315, 492 ; 17 John. Rep. 129 :) that is, in a court of equity. Neither of the causes between the parties were referrible under the statute. The case in the supreme court was an action of trespass, and the one in the superior court was an action of debt upon a replevin bond. The reference by the mere act of the parties, and without the intervention of the court, was a discontinuance of the suits, and the judgment entered on the report of the referees in the superior court, was therefore erroneous and void. (18 John. R. 22.) The cases referred not being within the statute, the consent of parties would not confer jurisdiction. (18 John. R. 22.) The superior court having no power to review the proceedings, or grant any relief in the premises, fully justified the interference of this court by injunction, staying all proceedings on the judgment in that court. (7 Cranch, 332, 336.) Courts of equity will always restrain the enforcement of judgments at law, obtained against conscience. (7 Crunch, 332, 336.) There has been no arbitration, and therefore no valid award ; but the whole proceedings are founded in mistake, and are void.
Chancery always looks to the intention of the parties. If) then, they intended a reference under the statute, and under the power and control of the court, they did not intend an arbitration. The term arbitrator, or arbitration, is no where used. It is called a reference in every paper, and the persons appointed, referees. The intention of the parties is important in tins respect; if a reference under the statute was intended, the parties and referees no doubt supposed the court could, and would rectify any error they might commit; whereas if a mere arbitration was intended, or understood, they could have had no such supposition, but considered the arbitrators the judges of the law and the fact, and their decision binding and conclusive in the premises, whether right or wrong. No court has ever yet said that the reference of a cause, intended to be pursuant to the statute, failing to be so, becomes an arbitration. All they have ever said is, that the parties are left to the same remedy as in the case of a mere submission to arbitrators. (1 Dunlap’s Practice, and cases there cited.) If it was a mere arbitration, the defendants had no right to enter judgment and take out execution in the superior court; their only course was by action upon the report, treating it as an award. “ An award of arbitrators, appointed under a mutual mistake of both parties, in supposing themselves bound by law to submit the matter in dispute to arbitration, is not obligatory.” (Peisch v. Ware, 4 Crunch, 347, 366.) Equity relieves against mistakes, either of fact or of law merely. (Hunt v. Rousmanure’s Admr. 8 Wheat. 211.)
The parties have been mistaken in regard to the tribunal ; they having agreed to the ordinary reference under the statute, and tried their cause before persons whom the defendants now, for the first time, call arbitrators. It is presumed this court will go as far in this case as a court of law would in respect to an award of arbitrators, where the submission is made a rule of court. There are numerous authorities in Peake’s Evidence, by Norris, 118, note, speaking as strong language as this. The same cause which will induce a court to set aside a verdict will govern in the case of awards ; and therefore, if it appear that there has been manifest injustice, or a plain and clear mistake, either in law or in fact, the report will be set aside.
The referees have been-mistaken in regard to the effect of their report, for it was intended that the question as to the admissibility of Wheeler should be submitted to the court. This is fully proved by the testimony. Williams swears he dissented from the other referees in rejecting Wheeler, and did not yield or change his opinion. Could a less number than the whole make a decision 1 There was no provision that the decision of a less number than the whole should be binding in any respect. The rule of reference was mistaken; it was not warranted by the consent. There was no agreement that the decision of a less number than the whole should be binding ; whereas Mr. Western entered the ordinary rule of reference under the statute, “ that they, or any two of them,” &c. This tended to mislead the referees, and induced them to believe the decision of a less number than the whole was binding, in the rejection of Wheeler, and in signing the report. The referees decided against the weight of evidence before them, which proved the property to be in the complainants, and contrary to law, in excluding the testimony of Wheeler, and in admitting mcompetent witnesses. And they have misbehaved in regard to the matters referred, and their report is therefore void.
Wheeler was not a party to the suit, nor in any way interested in the event. He was the complainants’ agent, and was competent to testify. An agent may even prove his own agency, and any facts within the scope of his agency. (1 Phil .Ev. 79.) Every agent is a competent witness, ex necessitate. (1 John. Cas. 270, 408. 2 id. 60. 3 id. 39. 5 John. Rep. 256.) A factor who was to. have poundage, according to the amount of the sale, was held a good witness to prove the contract, in an action by his principal. (Dixon v. Cooper, 3 Wilson, 40.) And in like manner, a factor who was to have all above a certain sum, was admitted to prove a contract above that sum. (2 H. Black. 590.) The refusal of the referees to hear the testimony of Wheeler, was such misconduct as vitiated their report, and for which it ought to be set aside in equity. (Van Cortlandt and others v. A. J. & J. Underhill, 17 John. Rep. 405, in error, id. 419, per Spencer, J.) If the arbitrators refuse to hear evidence pertinent and material to the matter in controversy, it is unquestionably such misconduct as will vitiate an award in a court of equity. (Idem. 411.) Arbitrators proceeding contrary to the principles of natural justice, though there be no corruption, as if without reason they will not hear a witness, are good causes for setting aside an award. Partiality is also a ground for setting aside an award. (17 John. R. 405. 2 John. Ch. Rep. 339.)
It has been said on the part of the defendants, that Williams being one of the referees, was an incompetent witness in this suit. This is not so; for the case of Van Cortlandt v. Underhill, (17 John. 405, ) turned wholly upon the testimony of Anderson, one of the arbitrators. In the first instance he was made a party to the suit, but afterwards struck out, for the purpose of being made a witness. Allen, senator, says, in that case, (17 John. 421,) “ The competency of this witness has been admitted; but his credibility is sought to be impeached, principally on the ground of his having signed the award, and declared it be according to his best judgment and belief.” The complainants have suffered by the rejection of Wheeler as a witness, on whose testimony the whole merits of the cause rested. Wheeler being the agent, was doubtless cognizant of the whole transaction, and able to give the most positive and conclusive testimony upon the subject. And if the referees had any doubt, he probably would have removed it. His total rejection is a strong circumstance to prove bias upon their minds. The testimony adduced before he was offered did not establish his interest. The verdict could not be evidence in any suit against him, not being a party to the record; nor could it fix any liability upon him. We offered him to prove that the property was not his ; which would leave him still exposed to the execution. A witness is always competent to swear against his own interest; or when his interest is neutralized. It is absurd to say a release from us would have bettered his situation; for he either stood neutralized as to interest, or he was offered to prove facts against his own interest. A release from us could not have prevented Depew’s execution still existing against him. If we had released him, the opposing counsel would doubtless have taken that ground.
The defendant Western professes to have acted as attorney merely; but he used the report and relicta deposited with him, improperly. As to the latter, he was manifestly a trustee in some manner for the complainants, and without their further authority could not rightfully use it. There was much move reason for making Western a party than the arbitrators in the case of Underhill v. Van Cortlandt, (17 John. Rep. 405.) Western was the prime mover of all, from the beginning to the end. His client Depew was a nonresident. He drew all the papers. The relicta was left in his hands. The report of the referees was handed to him. He filed it, entered judgment upon it, issued execution thereon, and levied upon the complainant’s property. He also deluded the referees, and objected to the superior court’s passing ■upon the question as to the admissibility of Wheeler. And he was proceeding to dispossess the complainants of more property, when he was arrested by the injunction of this honorable court. His interest, as to costs, far exceeded the interest- of bis client from the amount in controversy. In a word, he is an accessory to all the errors and mistakes in the whole proceedings. He was the active instrument or agent of a person who, in all probability, was ignorant of the course, nature and effect of all the proceedings. He had the management and control of the whole matter. Western should not, if improperly made a party, be allowed costs of his answer, because he ought to have demurred. (See Executors of Gallager v. Roberts, 1 Wash. C. C. Rep. 380.)
Lowndes was properly made a party. He was the plaintiff in the suit on the replevin bond in the superior court, and his name was used in all the proceedings on the reference. The judgment on the report of the referees was entered in his name, by Western. Hoyt ought not to have been permitted to testify before the referees; because, by securing a verdict against the complainants he would screen himself from being prosecuted for the trespass. It was improper for Ostrander to hold ex parte communications with Depew on the subject and nature of the controversy. This is decided in the case of Underhill v. Van Cortlandt, (17 John. Rep. 405.)
for the defendant." The reference or submission to the referees having been made by the written consent of both parties, which authorized judgment to be entered against either party according to the determination of the referees, accompanied with a formal relicta and cognovit, signed by all the defendants, and also by their attorney in the action of replevin, was binding and conclusive upon them ; and no court will interfere therewith, unless mal or corrupt conduct, in the referees, is shewn. There is no pretence or foundation for any charge of' this kind against the referees. The authorities upon the subject are conclusive to show their decision is final. The cases cited by the opposite party go fully to support this point. The case of Miller v. Vaughan, (1 John. R. 314,) had been referred by consent of parties without any rule of court. The court there say that they will interpose only where the cause has' been referred by a rule of court pursuant to the statute. That, in other cases of reference of causes by consent, the parties must be left to their remedy as in case of an arbitration. This decision is not against us, for here the reference was not only made by consent of parties, but by a rule of court founded on an agreement in writing, by which judgment was to be entered according to the report of the referees. And a relicta, for that purpose, containing a release of errors, was also given. In Stevenson v Becker, cited also on the other side, a motion was made for judgment as in case of nonsuit on a report of referees. That was not a case within the act. And the parties submitted the cause, by consent, to referees and agreed that their report should be con-elusive; and that if the referees decided in favor of the defendant, he should be entitled to a judgment of nonsuit. The court there held that the case came within the reason of the decision of Miller v. Vaughan, and that the parties having agreed that the report should be conclusive, they must abide by it, and the court therefore granted a judgment of nonsuit. This case is decisive of the present. We ask no more than that the parties shall abide by their agreement, and the confession of judgment they have given. The next case cited by the complainants is that of Johnson v. Parmely, (17 John. R. 129.) That was a case not referable under the statute; but by consent a rule of reference had been entered, in the clerk’s office, referring the cause to referees. A motion was made to set aside the report of the referees. The court refused to exercise any control over the proceedings, regarding the submission as a mere arbitration ; and they denied the motion with costs. There was in that case no consent or agreement that judgment should be entered according to the report, nor any relicta given as in the present case; and therefore it has no application. The next case cited by the complainants is that of Camp v. Root, (18 John. R. 22.) That was an action of replevin, referred by consent generally. The court say it is plainly a case of submission to arbitration, and in no respect within the statute, &c. But they refer to the case of Yates v. Russel, in the court of errors, (17 John. R. 461,) in which it was stipulated by the defendant’s attorney that if the referees reported against him, judgment should be entered according to the report, and that was considered equivalent to a plea of confession for the amount reported due. But the court said that in the case before them there was no such stipulation, and therefore the}? considered it as the case of an arbitration and award merely. In the case now to be decided there was not only an agreement that judgment should be entered, but also a plea of confession with a release of errors was given, signed by all the defendants, and also by their attorney, making a case much stronger than the one in the court of errors. In the case of Dodge v. Waterbury, (8 Cowen, 136,) the reference was to two referees, with power to choose an umpire, The court considered it not within the statute, and an arbitration only.
The plain distinction established by these cases is, that when the parties agree, in a case not referable under the statute, to refer the same to referees generally, without providing that judgment shall be entered according to the report, it will be regarded as a mere arbitration ; but if there be a stipulation that judgment be entered up according to the report, the court will allow it to be done. The cases on this subject, (to show the conclusive effect of such award,) both ancient and modern, at law and in equity, in England as well as in this country, are collected by Chancellor Kent in the case of Underhill v. Van Cortlandt, (2 John. Ch. R. 361 to 369.) Although the decision of Chancellor Kent in that case was afterwards reversed by the court of errors, it was so reversed on a ground inapplicable to the present case. For nothing short of corruption or partiality on the part of arbitrators or referees, or some fraud practiced by a party, can the report or award be set aside. No such thing was pretended in the court below to have existed, although it is now insisted upon. To show with what caution the court will receive imputations of this kind against referees, or arbitrators, the case of Davy’s Executors v. Earn, in the supreme court of the United States, all the judges being present, is referred to. (7 Cranchis R. 174.) It belonged to the superior court in New-York to set aside the report if it ought to have been done, it being a suit in that court and properly under its cognizance. An application to set aside the report having in fact been made to the superior court and refused by them, it is res adjudicate; and no application can therefore be received here unless new matter is shown. No such new matter" has been shown to warrant the interference of this court.
Wheeler, the witness offered by the complainants before the referees, was properly rejected, he being a party in interest, and combined in the fraud attempted to be practiced on the defendants ; of which interest the referees were the sole judges. If it were true that Wheeler was improperly rejected, still it being a question of evidence only, and decided in good faith by the arbitrators, it cannot be a sufficient ground for setting aside their report or award. It being a matter of opinion only, it cannot be any evidence of misconduct on the part of the arbitrators. The case of Van Cortlandt v. Underhill, (17 John. R. 405,) in error, is not like the present. There the arbitrators refused to hear any evidence on the subject. It was not a question as to the competency of a witness or as to any particular piece of testimony, but a rejection of all evidence on the subject. This, by a majority of the court of errors, was considered to be misconduct on the part of the arbitrators. But there was a difference of opinion in the court even in that case. The expression of Spencer, justice, “ If the arbitrators refuse to hear evidence, pertinent and material to the matter in controvsy, it is unquestionably such misconduct as will vitiate an award in a court of equity,” does not apply to the present case. There was no refusal to hear evidence on the subject, it being a question as to the competency of a witness only. The farther expression of “ arbitrators proceeding contrary to the principles of natural justice, though there be no corruption, as if without reason they will not hear a witness, are good causes for setting aside an award,” is equally inapplicable. These arbitrators did not without reason refuse to hear any witness, and they fairly exercised then-judgment with regard to the competency of Wheeler.
But Wheeler was in fact, according to the evidence in the cause, an incompetent witness. A case similar in principle to the present occurred in the superior court of New-York, in which a witness was produced and examined in the character of an agent, though objected to. He was an agent for his mother, and was authorized to sign her name to promissory notes and other papers. It appeared from his testimony that he had signed his mother’s name as such agent to a promissory note for money, which was the subject of controversy in that cause. The note was made for the purpose of raising money; and a part of the money so raised was for the use of the witness, and the remainder was applied to the use of the mother. The question as to the competency of the witness was reserved at the trial; and after-wards the superior court decided that he was an incompetent witness, he having an interest in the subject matter in controversy.
It was improper to make Western a party, he being merely attorney and counsel in the matter in controversy. As to him the bill ought to be dismissed with costs on the complainants’ own shewing. It is idle to pretend that he used the report and relicta improperly. They were used for the very purpose intended, and in no other way.
Simon T. Williams, one of the referees, was an incompetent witness to impeach his own report, on the same ground that jurors are not allowed to impeach their verdict. But referees, like jurors, may give evidence to support their report. This is laid down in the case of Van Cortlandt v. Underhill, (2 John. Ch. R. 349,) in which case Chancellor Kent says, “ that it falls within the reason and policy of the rule of law that the affidavit of a juror is not to be received to impeach his verdict, because it would expose jurors to dangerous practices, and to be tampered with by the losing party.” The reason of the rule in both cases is equally strong. The bill ought to be dismissed with costs, and the decision of the vice chancellor affirmed.
Syllabus and headnotes are prepared by the reporter or publisher, not the court, and are not part of the opinion.
