151 F.Supp. 853 (D.S.C. 1957), Civ. A. 1997, Gramling v. Food Machinery & Chemical Corp.

Docket NºCiv. A. 1997
Citation151 F.Supp. 853
Party NameGramling v. Food Machinery & Chemical Corp.
Case DateJune 19, 1957
CourtUnited States District Courts, 4th Circuit, District of South Carolina

Page 853

151 F.Supp. 853 (D.S.C. 1957)

Henry GRAMLING, Plaintiff,

v.

FOOD MACHINERY AND CHEMICAL CORPORATION, Defendant.

Civ. A. No. 1997.

United States District Court, D. South Carolina

June 19, 1957

Page 854

Holcombe & Bomar, Sam R. Watt, Spartanburg, S.C., for plaintiff.

Butler & Chapman, Spartanburg, S.C., Thomas H. Pope, Newberry, S.C., for defendant.

WYCHE, Chief Judge.

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

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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

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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: 'An arbitration proceeds from the consent of the parties. The Court is but the instrument through which in a pending case effect can be given to their will. It contemplates an adjustment of their controversy by a forum not bound by the strict rules of law, but permitted within certain limits to substitute their own mode of investigation in the place of that through which alone Courts of justice are allowed to exercise their functions. A ready ear is not given to objections raised by the disappointed party, who, being dissatisfied with the result by the tribunal of his own selection, applies for the interposition of that which he had before renounced.'

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: 'Besides this, he admitted in the Court below 'that he felt bound not to appeal except upon the question of costs raised in his exceptions.' This was but a compliance with the...

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