Carpenter v. Bloomer, A--632

• Decision Date: 19 February 1959
• Docket Number: No. A--632,A--632
• Citation: 148 A.2d 497,54 N.J.Super. 157
• Parties: Edwin L. CARPENTER, Plaintiff-Respondent, v. Robert G. BLOOMER and Edith S. Bloomer, individually and as partners trading as Robert G. Bloomer Co., Defendants-Appellants.
• Court: New Jersey Superior Court — Appellate Division

Page 157

54 N.J.Super. 157

148 A.2d 497

Edwin L. CARPENTER, Plaintiff-Respondent, v. Robert G. BLOOMER and Edith S. Bloomer, individually and as partners trading as Robert G. Bloomer Co. Defendants-Appellants.

No. A--632.

Superior Court of New Jersey Appellate Division.

Argued Nov. 24, 1958.

Decided Feb. 19, 1959.

Frank I. Casey, Trenton, and Henry G. P. coates, Highstown, for appellants (Turp & Coates, Allentown, attorneys; Frank I. Casey, Trenton, of counsel).

William H. Wells, Bordentown, for respondent (Wells & Wells, Bordentown, attorneys).

Before Judges SCHETTINO, HALL and GAULKIN.

The opinion of the court was delivered by

HALL, J.A.D.

This is an appeal by defendant from a judgment of the Law Division in favor of plaintiff entered on the report of an arbitrator. An order of the trial court, consented to by the parties, directed 'that this matter be referred to the Honorable Howard Eastwood (a retired judge of this Court), as an arbitrator to determine the issues, both factual and legal, involved between the plaintiff and defendant, and to report his findings as soon as practical to this Court so that a judgment may be entered thereon.'

Plaintiff, a real estate salesman, instituted the action against his employer, a broker, for commissions allegedly due him under a written employment contract, following termination of the relationship. Defendants' answer admitted all of the allegations of the plaintiff's complaint except the allegation that 'Defendants still owe plaintiff for commissions the balance of $19,037.61', which was denied. No affirmative defenses were asserted.

We note that the complaint was filed September 20, 1956, and the answer October 22, 1956. The case was not pretried prior to the entry of the order referred to on November 12, 1957. The arbitrator filed his report April 23, 1958 after taking testimony which consumed one day. The report fully dealt with and determined the factual questions and legal issues agreed upon before him by the parties as all those involved.

On June 17, 1958 the trial judge directed the entry of the judgment under appeal by an order reading as follows:

'This action came on for trial before the Court sitting without a jury, and the Court did refer the matter to the Honorable Howard Eastwood, as an arbitrator, to determine the issues, both factual and legal, and to report his findings to the Court so that a judgment might be entered thereon, and the said Honorable Howard Eastwood did make his report to this Court, and the Court did receive and adopt the said report as and for its findings in this matter on issues, both factual and legal, upon which judgment should be entered in favor of the Plaintiff, Edwin L. Carpenter:

'It is on this 17th day of June, 1958, ordered that judgment be entered in favor of the Plaintiff and against the Defendants in the sum of $15,775.00, of which sum the Defendant shall pay the Plaintiff, $5,342.50 forthwith, representing commissions already received, and the balance of $10,432.50 as and when Defendants receive payment of the commissions as set forth in said report; together with costs to be taxed against the Defendants and in favor of the Plaintiff; that the execution under this judgment shall remain within the jurisdiction of this Court and no execution hereunder shall be issued without the consent of this Court; that an allowance of $109.00 for Joseph J. DePuglio for services as reporter, and a fee of $180.00 for the Honorable Howard Eastwood, for services as arbitrator be granted, the cost of which allowance and fee should be shared equally between the Plaintiff and Defendants.'

The record does not show what steps, if any, the defendants took to attack the report below, either before the arbitrator or before the trial jduge, although there is a reference in the appellant's reply brief that briefs were filed with the trial judge before the judgment appealed from was entered. We were advised at the argument that appellants urged at that time the same points made in their briefs here. All relate to the merits and are put to us as if this were an appeal from a judgment following a non-jury trial. Respondent's brief treats the questions in the same fashion.

Prior to oral argument, this court directed the attention of counsel to two questions not raised in the appeal--first, the authority of the trial judge to enter the order of November 12 and the resulting judgment and second, the extent of the permissible review of the award of the arbitrator and the judgment. We must first consider these two questions.

We are satisfied that what the parties did here, in legal effect, was to submit the controversy between them to a common law arbitration, under an oral agreement expressed and confirmed by a consent order of the court in their pending cause setting forth their stipulation of the scope of the submission and the effect of the arbitrator's determination and for the entry of judgment thereon.

It is apparent from the language of the order that the parties intended that their differences should be finally determined by arbitration, as distinct from a reference or any other type of non-judge trial. The ancient practice of arbitration '(i)n its broad sense, * * * is a substitution, by consent of the parties, of another tribunal for the tribunal provided by the ordinary processes of law. The object of arbitration is the final disposition, in a speedy, inexpensive, expeditious, and perhaps less formal manner, of the controversial differences between the parties.' Eastern Engineering Co. v. City of Ocean City, 11 N.J.Misc. 508, 510--511, 167 A. 522, 523 (Sup.Ct.1933); 3 Am.Jur., Arbitration and Award, sec. 2, p. 830; 6 C.J.S. Arbitration and Award § 1 p. 152. 'The submission (here the consent order, supplemented by the issues agreed upon by the parties before the arbitrator) is the commission of the arbitrator. By force of it he becomes a judge, with absolute power over the things submitted to his judgment.' Leslie v. Leslie, 50 N.J.Eq. 103, 107, 24 A. 319, 320 (Ch.1892).

The practice existed at common law long before the enactment of any statutes on the subject and, unless the common law has been abrogated by legislative act, parties are still at liberty to enter into a submission as at common law. Hoboken Manufacturers' R. Co. v. Hoboken Railroad Warehouse & Steamship Connecting Company, 132 N.J.Eq. 111, 116, 27 A.2d 150 (Ch.1942), affirmed 133 N.J.Eq. 270, 31 A.2d 801 (E. & A. 1943); Eastern Engineering Co. v. City of Ocean City, supra. In line with the Hoboken case, we hold that New Jersey statutes have not abrogated the common law.

At this point it should be noted that the parties concede they were not proceeding under our present arbitration statute, N.J.S. 2A:24--1 et seq., N.J.S.A., since no attempt was made to follow the procedure there specified. While that act is broad enough (N.J.S. 2A:24--2, N.J.S.A.) to cover arbitration of a controversy involved in a pending suit, resort to the statute must be bottomed on the written submission agreement of the parties (N.J.S. 2A:24--2, N.J.S.A.), and all judicial proceedings with reference thereto, including confirmation of and any attack on the award and the entry of judgment thereon, must be had in a separate summary action in a specified manner. N.J.S. 2A:24--3, 5, 7 and 10, N.J.S.A. When parties agree to arbitrate the issues of a pending cause under the statute, the cause is stayed until the arbitration has been had (N.J.S. 2A:24--4, N.J.S.A.) in accordance with the statutory procedure.

It may be further observed that what the parties did here did not constitute a reference in the true sense of that term. Under our new practice, references may be made only under extraordinary circumstances and our policy is definitely against their use. Our rule on the subject (R.R. 4:54--1) is obviously not designed or intended to apply to what was done here. Moreover, no approval of the Chief Justice was sought or obtained, as required by the strict language of R.R. 4:54--1. Such has indeed been suggested as jurisdictional by Mr. Justice Brennan in his dissenting opinion in La Buy v. Howes Leather Co., 352 U.S. 249, 77 S.Ct. 309, 1 L.Ed.2d 290, 300, note 3 (1957).

There is a definite distinction between arbitration and a true reference, well summarized in 3 Am.Jur., Arbitration and Award, sec. 3, p. 832:

'An arbitration rests upon mutual agreement of the parties to submit their matters of difference to selected persons whose determination is to be accepted as a substitute for the judgment of a court; a reference is always in a pending cause and rests upon the constitutional and statutory powers of the court which appoints the referee as its officer and upon which his entire authority depends. Without confirmation and adoption by the court, the acts of the referee have no force or validity whatever. Nothing can originate before him and nothing can terminate with or by his decision, the entire proceeding being an exercise of judicial power by the court.'

The distinction has not always been clearly recognized and considerable confusion will be found in the cases, including those in our State, between submission of a pending cause to arbitration under a rule (i.e., an order) of the court and the reference of a cause to a referee or master by consent. 3 Am.Jur., Arbitration and Award, sec. 3, p. 832; 6 C.J.S. Arbitration and Award § 1 p. 154. There cannot be the slightest doubt, however, as to the effect of the order in the instant case. The reference is to 'an arbitrator to determine the issues,' both factual and legal, with direction 'to report his findings * * * so that a judgment may be entered thereon.' Conclusiveness of the determination, as distinct from the effect given to the findings of a master on a reference (R.R. 4:54--5), is implicit in the language used.

There also can be no question but that the submission of the pending cause to the arbitrator by the consent...