Peopel ex rel. Union Ins. Co. v. Nash

• Decision Date: 27 November 1888
• Citation: 111 N.Y. 310,18 N.E. 630
• Parties: PEOPEL ex rel. UNION INS. CO. et al. v. NASH et al.
• Court: New York Court of Appeals Court of Appeals

111 N.Y. 310

18 N.E. 630

PEOPEL ex rel. UNION INS. CO. et al.

v.NASH et al.¹

Court of Appeals of New York.

November 27, 1888.

Appeal from supreme court, general term, First department.

Motion by the people of the state of New York, on the relation of the Union Insurance Company of Philadelphia, and the Insurance Company of the State of Pennsylvania, for a peremptory mandamus to compel Stephen P. Nash, John R. Read, and James E. Carpenter, as arbitrators under a certain arbitration agreement, dated October 10, 1885, to proceed thereunder. Motion denied, and petitioners appealed to the supreme court, where the order was affirmed, and they appeal. Code Civil Proc. N. Y. § 2383, referred to in the opinion, reads as follows: ‘A submission to arbitration, made either as prescribed in this title or otherwise, cannot be revoked by either party after the allegations and proofs of the parties have been closed, and the matter finally submitted to the arbitrators for their decision.’

Treadwell Cleveland and Norris Morey, for appellants.

Wm. Allen Butler, for respondents.

GRAY, J.

The position taken by the appellants with respect to the agreement of arbitration in question here is that the character of revocability, inherent in such submissions, is affected by that article of the agreement which provides against any revocation, and expressly waives and abandons the right to revoke. They do not dispute the common-law rule that submissions to arbitration are revocable in their nature; and, indeed, that such was the rule is too well established and recognized by early and late English cases and by the New York statutes and decisions to admit of dispute. Allen v. Watson, 16 Johns. 205;Bank v. Widner, 11 Paige, 529; 2 Rev. St. N. Y. p. 544, § 23; Tobey v. County of Bristol, 3 Story, 800;Vynior's Case, 8 Coke, 81 a; Marsh v. Bultell, 5 Barn. & Ald. 508; In re Rouse, L. R. 6 C. P. 212; Fraser v. Ehrensperger, 12 Q. B. Div. 310. Whatever may have been decided elsewhere in this country, we are satisfied that that is the better rule of law which has been recognized in England and in this state, and which considers a submission revocable until its nature is changed by legal enactment, as was done by English statutes. As it was said in Vynior's Case, 8 Coke, 81 a, ‘man cannot by his act make such authority, power, or warrant not countermandable which is by the law or its own nature countermandable;’ he cannot ‘make that irrevocable which is of its own nature revocable.’ But, the learned counsel for the appellants say, the facts underlying this submission, in the discontinuance of suits, the abandonment of advantages, and the peculiar and unusual agreements contained in this submission, by which the right to revoke is waived and abandoned, take it out of the common-law statute rule. They say that here was an express waiver of the right to revoke, based on a valuable and executed consideration; and they argue that, failing the reason of the rule, the rule itself fails. No unusual character is imparted to the agreement by its being based on such a consideration. All such agreements must be based on a good consideration; and if the discontinuance of the pending suits and the loss of advantages thereby occasioned are the features which constitute the executed consideration, they are but the incidents of the agreement of submission. That was the decision of this court in McNulty v. Solley, 95 N. Y. 242, where DANFORTH, J., collects authorities to sustain the proposition that by submission to arbitration eo acto the discontinuance of the pending litigation is effected. The flaw in the argument of appellant's counsel is in its assumption that the character of the mandate to the individuals selected to determine the controversy between parties can be changed by their private agreements, or affected by the circumstances which were its producing cause, or which the execution of the agreement induced. The source of the mandate or power by virtue of which the arbitrators act is in the private agreement which the parties have entered into, for reasons satisfactory to themselves, in order to have an end to dispute and to legal strife, and the force of the mandate to them is in the consent of the parties that they shall act. But in the execution of the power, or in the thing they are to...