Ferguson v. Rogers

• Citation: 195 S.W. 22,129 Ark. 197
• Decision Date: 14 May 1917
• Docket Number: 383
• Parties: FERGUSON v. ROGERS
• Court: Supreme Court of Arkansas

195 S.W. 22

129 Ark. 197

FERGUSON v. ROGERS

No. 383

Supreme Court of Arkansas

May 14, 1917

Appeal from Pulaski Chancery Court; John E. Martineau, Chancellor modified and affirmed.

Decree affirmed.

Coleman & Lewis, for appellant.

1. On the facts the judgment should be reversed.

2. The demurrer should have been sustained. A revocation of an agreement of submission to arbitration may be revoked at any time before the award. 166 F. 398; 82 Am. St. 943; 4 Elliott on Contracts, § 2947; 2 R. C. L., § 15, p. 366; 138 Am. St. 637, and note, pp. 640-649; 3 Cyc. 610; 11 Am. Dig 64-72; 4 Cent. Dig., § 130; 184 F. 404.

The effect of the revocation is to restore the parties to their rights as they existed before the agreement. 2 R. C. L § 18, pp. 370-1; 4 Elliott on Cont., § 2947; 7 Am St. Rep. 747; 15 L. R. A. 142; 102 F. 926.

3. The chancery court had no jurisdiction. The remedy was a suit at law for damages.

Morris M. & Louis M. Cohn, for appellee.

1. This was a suit to recover trust funds improperly misappropriated and an account had to be stated. Where a party refuses to submit to arbitration, none is necessary. 94 Ark. 609; 112 F. 743; 159 Id. 303. It was not necessary to first resort to an arbitrator. 94 Ark. 609, 610. No arbitration was necessary, as the agreement to arbitrate was revoked by the death of John Fletcher. 37 A. 574; 181 Pa. 576; 2 Pa. S.Ct. 103; 121 Ga. 98, 48 S.E. 696; 24 Pa. St. (12 Harris) 411. The agreement did not provide for the contingency of death of an arbitrator pending submission and for the appointment of a second arbitrator. 108 P. 114; 28 L. R. A. (N. S.) 104; 124 Ill.App. 491; 98 F. 381; 32 L. R. A. 172; 33 S.W. 1041; 29 N.E. 844; 62 N.W. 422; 101 N.Y. 362; 113 Mo. 606; 97 Md. 294; 102 Mich. 583; 61 N.W. 67.

The suit lay because based on recovery of a trust fund. 70 Ark. 189. Then there was a long and complicated account which gave a court of equity jurisdiction. 82 Ark. 547-550. As arbitration was not possible and complainant was entitled to specific performance, a court of equity was the proper tribunal. 47 L. R. A. (N. S.) 337 to 448, 369, 370, etc. A court of equity has jurisdiction where recourse to arbitration has failed, even though no accounting is asked for. 37 A. 304, 20 R. I. 21; 3 Mo.App. 429; 1 Paige 412; 49 Mo. 600; 146 F. 8, 76 C. C. A. 516.

2. Review the evidence and contend that the decree should be for the largest amount found by the master $ 2,305.48. The burden was upon appellant to show that the findings of the chancellor were wrong. 24 Ark. 431; 44 Id. 216; 89 Id. 309; 91 Id. 149; 101 Id. 368; 103 Id. 473. Where there is a conflict of evidence the findings of the chancellor will not be disturbed. 87 Ark. 593; 98 Id. 328; 102 Id. 51. The master's findings are in excess of the findings of the court. These usually have the force and effect of the verdict of a jury. 85 Ark. 414; 91 Id. 292. The burden of explanation was on defendants. 119 N.C. 13, 25 S.E. 715; 28 So. 349; 97 P. 995; 100 Id. 977; 85 S.E. 306; 39 Ark. 209; 57 Id. 1; 54 Id. 227; 45 Id. 295. W. B. and C. E. Ferguson are required to make a strict accounting of all the assets. 97 Ark. 588, 609; 96 Id. 281, 299.

OPINION

HUMPHREYS, J.

Appellee filed a bill against W. B. Ferguson and appellant, C. E. Ferguson, in the Pulaski Chancery Court for a settlement and accounting growing cut of the shipment of twenty-eight car loads of lumber, between the 14th day of July, 1909, and the 21st day of February, 1910, from appellee's sawmill at Reader, Arkansas, which shipments were the subject of an arbitration agreement signed by C. E. Ferguson, on the one part, and Geo. W. Rogers, individually, and for the Reader Mill Company and Bank of Commerce, on the other part.

Separate demurrers and answers were filed to the bill by W. B. and C. E. Ferguson. Both denied all the material allegations in the bill, and C. E. Ferguson pleaded as a separate defense that his responsibility, if any, was founded on the arbitration agreement, which was withdrawn and revoked in advance of the arbitration and award; and that there was no sufficient consideration for the agreement.

By agreement of all parties, the cause was referred to J. S. Maloney as master, to state an account between the parties upon the depositions and exhibits filed in the case. The master found that appellant was indebted to appellee in the sum of $ 1,045.70. He arrived at the result by finding that W. B. Ferguson shipped 87,142 feet of lumber, valued at $ 12 per thousand, from the Reader mill, belonging to appellee, for which Ferguson had not accounted and settled. The master made an alternative finding that if the court should hold appellant and his brother, W. B. Ferguson, to the strict letter of the arbitration agreement and place the burden upon W. B. Ferguson to accurately account for all lumber shipped from said mill, appellant would be indebted to appellee in the sum of $ 2,305.48. The master arrived at this result on the theory that the evidence was not certain and absolute as to what disposition had been made of 192,123 feet of lumber, valued at $ 12 per thousand.

The court heard the master's report upon exceptions filed by each party, and upon the whole case decreed in accordance with the first finding of the chancellor, except as to the value per thousand placed upon the lumber by him. The chancellor found that the lumber was of the value of $ 10 per thousand, instead of $ 12 per thousand.

An appeal and cross-appeal have been prosecuted from the findings and decree of the chancellor, and the case is before this court for trial de novo.

Appellant insists that there was no consideration for the arbitration agreement, and had there been a consideration, it was his privilege to withdraw from the contract at any time before the award. The undisputed facts are to the effect that W. B. Ferguson was employed by appellee to operate a lumber business which he was conducting in the name of the Reader Mill Company at Reader, Arkansas; that he was employed shortly after the purchase of this business in November, 1908, and remained until the latter part of February, 1910, at which time he was discharged. It was a part of his duty to sell the output of the mill and to render an accounting of the cut and sales to appellee at stated intervals. Prior to his discharge, and thereafter, a controversy arose between W. B. Ferguson and appellee concerning the disposition made by him of lumber during his term of employment. Appellee had instituted attachment and garnishment proceedings, and other suits and prosecutions had been threatened. The Fergusons and their families were much disturbed, and at this juncture C. E. Ferguson stepped into the breach on account of his brotherly affection, and reached an amicable adjustment of the differences existing between W. B. Ferguson and appellee.

As a method of settlement, C. E. Ferguson purchased all claims by appellee against W. B. Ferguson for $ 2,416.86, except twenty-eight cars of lumber valued at $ 3,278.44, and as to that claim, entered into a written contract with appellee to ascertain by arbitration and award the liability of W. B. Ferguson to the Reader Mill Company on account of said shipments, and to pay the award as soon as rendered. It was admitted in said contract that twenty-one cars of the lumber had been shipped by W. B. Ferguson from the Reader mill and that said cars contained 246,458 feet of lumber. It was also admitted that appellee claimed the value of seven additional cars but that W. B. Ferguson claimed that these seven additional cars were included in the twenty-one cars he had shipped. It was also admitted that W. B. Ferguson purchased some lumber from the German National Bank for $ 500, stacked on the yards of Reader Mill Company, after he took charge of the plant under employment from appellee. It was also provided in the arbitration agreement that the burden of proof should rest upon W. B. Ferguson, or the companies claiming by, through or under him or them. It was provided that John Fletcher should act as arbitrator, and in case he should decline or fail to act, that M. J. Ringlehaupt should act and that his award should be final. While the arbitration was pending before John Fletcher, he died, and appellant and his brother declined to submit the matter to M. J. Ringlehaupt. This suit was then instituted.

The change in the status between appellee and W. B. Ferguson, brought about by C. E. Ferguson, and the transfer of all claims against W. B. Ferguson by appellee to C. E. Ferguson for a sum certain, was ample consideration to support the contract for arbitration and award. While it is within the power of parties to withdraw from an arbitration agreement at any time before the award, the party withdrawing can not, by such act, escape liability fixed by the terms of the contract. Our construction of this contract is that C. E. Ferguson for a valuable consideration, assumed the obligations of his brother, W. B. Ferguson, and became jointly liable with him for all lumber shipped in the twenty-eight cars in question, and not theretofore accounted for by W. B. Ferguson to appellee, as trustee for Reader Mill Company.

Appellant contends that if liable, he can only be held to account in a court of law for breach of contract. Pretermitting a discussion of whether equity has jurisdiction to specifically enforce a contract of this character, a court of equity will assume jurisdiction in actions, such as this, involving long and complicated accounts. The remedy in transactions of this character is more complete and adequate in courts of...