Carter, Moore & Co. v. Donahue

• Decision Date: 02 April 1963
• Citation: Carter, Moore & Co. v. Donahue, 189 N.E.2d 217, 345 Mass. 672 (Mass. 1963)
• Court: Supreme Judicial Court of Massachusetts
• Parties: CARTER, MOORE & CO., Inc. v. Douglas A. DONAHUE.

Page 217

189 N.E.2d 217

345 Mass. 672

CARTER, MOORE & CO., Inc. v. Douglas A. DONAHUE.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Jan. 10, 1963.

Decided April 2, 1963.

Lawrence T. Perera, Boston (Norman P. Cohen and Paul J. Dolan, Boston, with him), for defendant.

Francis X. Meaney, Boston (Richard G. Mintz, Boston, with him), for plaintiff.

Before SPALDING, WHITTEMORE, CUTTER, SPIEGEL and REARDON, JJ.

SPIEGEL, Justice.

This is an action of contract heard by a judge in the Superior Court without a jury to enforce an arbitration award made by the American Arbitration Association. The judge made a finding for the plaintiff and assessed damages in the amount of $10,156.80. The case is here on exceptions to the denial of the defendant's two requests for rulings and to the denial of his motion for a new trial.

There was evidence that the plaintiff, on January 15, 1960, sold to the defendant '20 bales of wool noils.' When the shipment arrived in Boston, the defendant refused to take delivery of the merchandise claiming that 'the noils were different from the selling sample.' The contract of sale contained an arbitration clause which read: 'In the event of differences between the parties hereto, they shall be settled amicably. Failing this, the parties shall select a third party as Arbitrator, and his decision shall be final and binding. In the event the parties are unable to agree on an Arbitrator, then their dispute shall be submitted for arbitration to the American Arbitration Association of New York, N. Y., pursuant to the rule of that Association.' Under date of May 23, 1960, the plaintiff made a 'Demand for Arbitration' upon the defendant. The 'Demand,' a copy of which was sent to the Association, stated the following claim for relief sought: 'We delivered to you on February 25, 1960 ex SS RAVENSBURG at Boston, Mass., 20 bales of wool noils. You refused to take delivery claiming that the noils were different from the selling sample. Our examination of samples drawn from each bale showed that 13 bales were like sample, and 7 bales varied slightly. The broker in this transaction, namely Mr. Fred O' Donoghue of Daniel E. O'Donoghue & Sons, Boston, examined the shipment and agrees substantially with our finding. We suggested that you take up 13 bales at the contract price, and the balance of 7 bales with an equitable allowance. You have refused this suggestion. We have also suggested that the dispute be submitted to friendly arbitration or to the Arbitration Committee of the Boston Wool Trade Association, of which we are both members. You refused this suggestion. We ask that you take delivery as we have suggested above. We also claim interest on the basis of 6% per annum against the amount of our invoice for the time it remains unpaid. We also claim refund to us of trucking and warehousing costs.'

The clerk of the Association, by letters dated May 26, 1960, notified the parties of the demand for arbitration, enclosed a copy of the rules of the Association regarding the arbitration proceedings, and directed the defendant's attention to the provisions for an answering statement and counterclaim, if any. Subsequently, the defendant received a list of arbitrators from which he was to select preferences and was formally notified that the hearing was scheduled for August 19, 1960. On August 8, 1960, an attorney representing the defendant informed the association that the defendant 'at all times was willing to stand on whether or not the noils were a good delivery.' ¹ By letters dated August 25, 1960, the parties were notified by the clerk of the Association that the hearing had taken place as scheduled and that, for purposes of their award, the arbitrators would not consider the quality of the noils in question because '[i]n the opinion of the Arbitrators, it was untimely and improper, according to the terms of the contract before them, to raise the issue of the quality of the shipment of noils before it had been accepted and fully paid for by the buyer.' ² Shortly thereafter the arbitrators awarded the plaintiff the full price of the goods, and ordered the defendant to accept delivery of the goods and that the administrative fees and expenses 'be borne entirely' by him. The defendant has refused to pay the award and the plaintiff seeks enforcement of it pursuant to G.L. c. 251, §§ 14-22.

The judge denied the defendant's request for a ruling '[t]hat on all the evidence the plaintiff is not entitled to recover.' ³ In support of his position the defendant argues that 'The award of the arbitrators is invalid and cannot be enforced, because the arbitrators did not resolve the dispute submitted to them for arbitration.' He urges that the only issue before the arbitrators was the quality of the 'wool noils,' and that in construing the sales contract the arbitrators went beyond the range of the dispute submitted to them. We do not agree.

The arbitration clause was broad in its scope. It asserted that '[i]n the event of differences between the parties * * * they shall be settled amicably' and failing this the dispute was to be submitted to arbitration. The clause should be construed as broadly as it was intended. Maxwell Shapiro Woolen Co., Inc. v. Amerotron Corp., 339 Mass. 252, 260, 158 N.E.2d 875, and cases cited therein. Electronics Corp. of America v. Canter Construction Co., 343 Mass. 210, 215, 178 N.E.2d 1. The plaintiff in its 'Demand for Arbitration' referred to the 'suggestion[s]' it had made for an amicable settlement of the dispute. Although these suggestions were prefaced by statements concerning the quality of the merchandise, it does not necessarily follow that in the arbitration proceedings the plaintiff intended to submit anything less than the broad rights of the parties under the contract.

'[T]he arbitrator was guided, as he should have been, by the term of the contract as he understood them. * * * Even if he was mistaken in his interpretation of the legal effect of the contract, the award does not thereby become invalid. The parties received what they agreed to take, the honest judgment of the arbitrator as to a matter referred to him.' Phaneuf v. Corey, 190 Mass. 237, 246-247, 76 N.E. 718, 719. 'In the absence of fraud an arbitration decision is binding though there may have been committed an error of law or fact in reaching that decision.' Hannan v. Enterprise Publishing Co., 341 Mass. 363, 365, 169 N.E.2d 894, 895. See Kesslen Bros., Inc. v. Board of Conciliation & Arbitration, 339 Mass. 301, 302-303, 158 N.E.2d 871; Wellesley Housing Authority v. S. & A....