Appeal
from Superior Court of Baltimore City; James M. Ambler
Judge.
"To
be officially reported."
Action
by the Dominion Marble Company, Limited, to the use of Gordon
W. Scott, liquidator, against William H. Morrow and another
partners as Morrow Bros. From a judgment for plaintiff, on an
award of arbitrators for less than claimed, plaintiff
appeals. Affirmed.
BURKE
J.
Caldwell & Drake, a building firm, entered into a contract with the
Youngstown Hotel Company to erect and complete an eight-story
and basement hotel building in the city of Youngstown, Ohio.
The contractors entered into an agreement with the Dominion
Marble Company to furnish and complete the marble work for
the hotel in accordance with the plans and specifications of
the architects, Clinton & Russell, for the sum of $20,000.
The eleventh clause of this subcontract is here transcribed:
"In view of the fact that the contractors are under
obligation to perform their work with promptness and
dispatch, and to that end have organized and are maintaining
a large staff of salaried employés, valuable machinery and
equipment, at a large daily expense, and are devoting their
own time, which is of great value, to the enterprise of which
this contract forms a part, and delay in completing the work
herein undertaken will entail large financial loss, it is
recognized and fully understood that delay on the part of the
subcontractor will be expensive and burdensome, and in order
to protect the contractors from such known burden and expense
it is agreed that, if the work herein undertaken shall not be
completed on or before December 1, 1912, the subcontractor
will, as part compensation for such loss, pay to the
contractors the sum of $50 per day as liquidated damages
only, and not as a penalty, for each and every day thereafter
that said work shall remain in an incompleted condition, and
such amount as shall accrue hereunder shall at once become
due and payable. It is further recognized that an early
completion of the work of the contractors will save them
valuable time, and the daily expense of the force organized
to carry forward the common enterprise and the completion of
the work undertaken by the subcontractor herein will inure to
his financial benefit in consequence. It is therefore agreed
that the contractor will pay the subcontractor, should he
complete his part of the work before the 1st day of December
1912, and the subcontractor shall receive from the
contractors the sum of $50 per day for every day intervening
between such date of actual completion of his part of the
work, as certified to by the architects, and the date
provided for completion as heretofore stated."
The
general contractors, Caldwell & Drake, assigned all their
interest in the contract to Morrow Bros., the appellees, with
the assent and approbation of the subcontractor, the Dominion
Marble Company.
A suit
was instituted on July 15, 1915, in the superior court of
Baltimore city against Morrow Bros. to recover for the marble
work done in the construction of the hotel under the
subcontract and for certain other charges. The amount claimed
to be due, as shown by the account filed with the
declaration, was $15,638.28. The general issue and special
pleas were filed, and by appropriate pleadings the case was
brought to issue. An agreement was entered into to submit the
matters in dispute to arbitration. This agreement recited
that:
"The parties to the above suit, being desirous to end
the same by arbitration, do hereby agree and oblige
themselves to submit the same, and all matters in controversy
therein, to the award of Clyde N. Friz and Josias Pennington,
together with a third arbitrator, to be first selected by the
two arbitrators herein named, who shall decide matters of
difference only, and the award and decision of the said
arbitrators, or a majority of them, shall be final and
binding; and the parties further agree that this submission
shall be made a rule of said court agreeably to the
provisions of article 75 of the Annotated Code of Maryland,
relating to arbitration and award; so that the said award
shall be made and set down in writing under the hands and
seals of the said arbitrators or of any two of them, and
shall be returned to the clerk of this court on or before
March 7, 1916, to the end that the court may give judgment on
the award in accordance with the provisions of said article.
Upon any question of law as to which the arbitrators may
desire to be informed or advised, the said arbitrators are to
be permitted to receive the instructions of the presiding
judge of this court. The arbitrators shall administer the
usual oath to all witnesses, and a stenographer shall take
down the testimony."
Provision
was made for the conduct of the arbitration, the place of
holding the sessions of the arbitrators, and for the payment
of the costs of the proceeding of the arbitration. On
February 5, 1916, the court ordered:
"That the matters in controversy in the above-entitled
cause be, and they are hereby, referred under the rule of the
court and by agreement to Clyde N. Friz and Josias
Pennington, as arbitrators, under the terms of the above
agreement."
The
arbitrators, for the reasons presently to be stated, selected
J. Henry Miller as third
arbitrator to act in accordance with the terms of the
agreement. On the 27th of March, 1916, Messrs. Pennington and
Miller filed in court the following award:
"In pursuance of the submission herein mentioned, we,
the arbitrators, having taken upon ourselves the burden of
said arbitration, and after due notice to the parties, having
met on the 8th day of February, the 2d day of March, and
other dates, and having heard and duly considered the
allegations and proofs of the parties submitted to us by
them, respectively, do award that there is due from the
defendants to the plaintiff the sum of $148.12.
Witness our hands and seals the 22d day of March, 1916.
Josias Pennington. [Seal.]
J. Henry Miller. [Seal.]
................ [Seal.]"
Mr.
Friz disagreed with the finding of the other arbitrators, and
did not sign the award, but under the terms of the submission
his signature was not essential to its validity. The
plaintiff filed exceptions to the award and moved the court
to set it aside. Nine reasons were assigned for setting aside
the award. The court overruled the exceptions and entered
judgment upon the award in favor of the plaintiff, and from
this action of the court the plaintiff has brought this
appeal. Some of the grounds of the exceptions have been
abandoned, and the whole case of the appellant may be
considered under the second ground of exception, viz.:
"Because the said Josias Pennington undertook to act for
and represent the defendants, and altogether failed to
exercise judicial and impartial consideration of the issues
raised in this case."
There
is no dispute as to the law applicable to the case. It is
said in 2 Am. & Eng. Ency. of Law, 638:
"If there be sufficient reason for imputing fraud,
corruption, or misconduct to the arbitrator, his award will
be set aside. An arbitrator's first duty is to act
uprightly and impartially between the parties. But mere
suspicion of misconduct will not justify the court in
interfering to set aside the award. An arbitrator is the
agent of both parties, and when there are more arbitrators
than one, each is the agent of both parties, and not the
special advocate of the party appointing him. Where they act
as the agent of one side only, it is corrupt misconduct on
their part."
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