Gramling v. Food Machinery and Chemical Corp.
Decision Date | 19 June 1957 |
Docket Number | Civ. A. No. 1997. |
Citation | 151 F. Supp. 853 |
Parties | Henry GRAMLING, Plaintiff, v. FOOD MACHINERY AND CHEMICAL CORPORATION, Defendant. |
Court | U.S. District Court — District of South Carolina |
Holcombe & Bomar, Sam R. Watt, Spartanburg, S. C., for plaintiff.
Butler & Chapman, Spartanburg, S. C., Thomas H. Pope, Newberry, S. C., for defendant.
This action was commenced in July, 1956 for the recovery of $187,500 for damage to several peach orchards, alleged to have been caused by the application of spray materials purchased from defendant.
The case was set for trial at the October, 1956, term of court in Spartanburg, but was continued, upon defendant's motion, in order to allow it more time for discovery procedure.
The case was thereafter set for trial at the succeeding April, 1957, term. After it had been called for trial and the jury selected and sworn, the parties entered into a compromise agreement which provided in substance as follows: (1) The amount of plaintiff's actual damage would be determined by six arbitrators, two to be appointed by each party and an additional one selected by each party from a list submitted by the other; (2) The arbitrators would make their determination under stipulated instructions of law, but without resort to evidence; (3) Defendant would pay plaintiff in full settlement of the claim, one-half of the amount of damage determined by the arbitrators; (4) After the arbitrators had made their award, either party might "enter up judgment on the award forthwith"; (5) An award should be made within forty-five days, or the cause discharged from arbitration; and the award, if signed by at least four of the arbitrators should "be binding upon the parties hereto, without any right of appeal from the award".
In accordance with the compromise agreement, the question of the amount of plaintiff's damage was submitted to a Board of Arbitrators, which consisted of the following: Roy J. Ferree, Leader of Extension Horticulture of the South Carolina Extension Service, with headquarters at Clemson College (who was selected by the other Arbitrators to serve as Chairman); D. H. Peterson, Pathologist of the United States Department of Agriculture, assigned to the South Carolina Experiment Station at Clemson College; E. F. Savage, Head of the Department of Horticulture of the State of Georgia; W. J. Sprinkle and Homer L. Johnson, large peach growers; and John M. Rigby, real estate broker.
No instructions were given to the Arbitrators by me without the express consent of counsel for both sides, and counsel for both sides stated in open court that they agreed with the instructions given.
On May 16, 1957, an award, signed by Arbitrators Ferree, Peterson, Sprinkle and Johnson (but not by Arbitrators Savage and Rigby) was filed with the Clerk of Court. It fixed the damage to each of the orchards separately, the total being $130,015.
Over the objection of counsel for the defendant, I directed the Clerk of Court to enter judgment for the plaintiff on the award made by the Arbitrators "without prejudice to the rights of the defendant to make any motion the defendant may deem advisable to vacate the judgment".
The case is now before me on defendant's motion to set aside the award on the following grounds: (1) that the award was so grossly excessive as to amount to legal fraud; (2) that the Arbitrators violated the provisions of the arbitration agreement and the Court's instructions relative to the measure of damages; and (3) that the award was invalid under the Federal Arbitration Act, 9 U.S.C.A. § 10(c, d).
Defendant further moved for an order requiring the Arbitrators to appear and testify regarding the basis of their award and tendered the affidavits of Arbitrators Savage and Rigby regarding the deliberations of the Board of Arbitrators.
Defendant also moves to vacate the judgment heretofore entered for the plaintiff.
Both parties agreed not to appeal from the award. Paragraph III of the Compromise Agreement specifically provides that "Any award * * * shall be binding upon the parties hereto, without any right of appeal from the award; * *." (Emphasis added.)
A motion to set aside or modify an award is the only way to appeal from it to this court.
Defendant does not impugn the agreement to arbitrate. There is no charge of mistake, misrepresentation, lack of consideration or other infirmity in the agreement. Defendant relies upon the agreement in an attempt to prove that the Arbitrators violated its terms. If the Arbitrators were bound by the agreement it is valid. If it is valid, defendant likewise is bound by it.
Both parties were entitled to have their differences resolved by jury trial. Instead, they agreed to arbitration. Both agreed that the amount of plaintiff's damages, and only that issue, would be submitted and that defendant would pay, and plaintiff would accept in settlement, one-half of the damage so found. This was a valid and binding contract, amply supported by consideration.
A contract not to appeal, if supported by consideration, is binding upon the parties to it. Bollmann v. Bollmann, 1874, 6 S.C. 29. In that case the parties agreed to submit all issues of law and fact to three persons, their decision to be certified to the court and to "be final and stand as the judgment of the court, not subject to appeal". The South Carolina Supreme Court held that:
In that case, appellant's original counsel felt himself obligated not to appeal from the award (except on the question of costs), because he had agreed not to. The Supreme Court of South Carolina, affirming the Circuit Court Order, which confirmed the Arbitrators' Award, said:
It is stated in 2 Amer.Jur., Appeal and Error, § 204: "Though there are a few cases to the contrary, the rule prevailing in the great majority of the jurisdictions is that an agreement, based on a sufficient consideration, not to appeal or take a writ of error, or a release of errors, is valid and binding, and, when properly pleaded, will constitute a bar to proceedings taken in violation of the agreement."
The same rule has been recognized and applied in the Federal Courts, with respect to an agreement not to appeal from a judgment of the trial court. In United States Consolidated Seeded Raisin Co. v. Chaddock & Co., 9 Cir., 173 F. 577, 579, certiorari denied Ex parte United States Consolidated Seeded Raisin Co., 215 U.S. 591, 30 S.Ct. 407, 54 L.Ed. 340, where both parties had agreed not to appeal, the Circuit Court of Appeals, in dismissing the appeal from the District Court said: "* * * it seems to be universally held that, where such an agreement is made upon a valid and legal consideration, either before or after trial, it will be enforced in an appellate court, and the appeal, if taken, will be dismissed citing authorities."
In Bower v. Eastern Airlines, 3 Cir., 1954, 214 F.2d 623, certiorari denied 348 U.S. 871, 75 S.Ct. 107, 99 L.Ed. 685, the Court said that the general rule was that a court will not review the merits of a common-law arbitration award which the parties agreed to accept as final.
Defendant is bound by its contract to accept the award as final, and not to appeal from it. If either party could now attack the award, that contract would be meaningless.
But, independently of the agreement not to appeal, defendant, in my opinion, has shown no valid ground for setting aside the award.
An award should, in the absence of the most compelling reasons, be sustained. In Bollmann v. Bollmann, supra, 6 S.C. 29, the Supreme Court of South Carolina, stated:
Judge Augustus N. Hand, speaking for the Second Circuit Court of Appeals in Karppinen v. Karl Kiefer Machine Co., 1950, 187 F.2d 32, 34, said:
In 3 Amer.Jur., Arbitration and Award, § 172, this statement is made: "It is the settled rule that the courts will not review the findings of law and fact contained in an award, and will never undertake to substitute their judgment for that of the arbitrators." Any other rule would make an award the commencement, not the end, of litigation. Patriotic Order, Sons of America Hall Ass'n v. Hartford Fire Ins. Co., 1931, 305 Pa. 107, 157 A. 259, 78 A.L.R. 899.
Everything is to be presumed, and every reasonable intendment made, in favor of an award. Karthaus v. Ferrer, 1 Pet. 222, 26 U.S. 222, 7 L.Ed. 121; Wabash Ry. Co. v. American Refrigerator Transit Co., 8 Cir., 1925, 7 F.2d 335, certiorari denied 270 U.S. 643, 46 S.Ct. 208, 70 L.Ed. 776.
Again, in 3 Amer.Jur., Arbitration and Award, § 176, it is said: ...
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