Franklin Needle Co. v. American Federation of Hosiery Workers A. F. L. Local No. 173-A

• Decision Date: 27 May 1954
• Parties: FRANKLIN NEEDLE CO. v. AMERICAN FEDERATION OF HOSIERY WORKERS A.F.L. LOCAL NO. 173-A et al. 173-A.
• Court: New Hampshire Supreme Court

Page 382

105 A.2d 382

99 N.H. 101

FRANKLIN NEEDLE CO. v. AMERICAN FEDERATION OF HOSIERY WORKERS A.F.L. LOCAL NO. 173-A et al.

173-A.

Supreme Court of New Hampshire.

Argued March 4, 1954.

Decided May 27, 1954.

Nighswander, Lord & Bownes, Laconia, for plaintiff.

Sulloway, Jones, Hollis & Godfrey and Joseph S. Ransmeier, Concord, for defendants.

LAMPRON, Justice.

Plaintiff contends that the award of the Board should have been set aside because the arbitrators exceeded the scope of their authority and fell into a plain mistake.

It maintains that the arbitrators exceeded their authority because (1) they 'not only filled in the contract on points that they felt it was silent or deficient on but went outside the scope of the contract to make their decision'; (2) they based their decision on what they considered to be the general accepted practice in industry; (3) they considered the terms of the whole contract instead of limiting themselves to Article XI thereof.

Arbitration is the submission of matters in controversy to the decision of disinterested persons selected by the parties as a substitute for the remedy by judicial proceedings. Industrial Electric Co. v. Meyers, Ohio App., 85 N.E.2d 415. The jurisdiction of the arbitrators over the parties and the subject matter depends entirely upon the voluntary agreement of the parties. Truesdale v. Straw, 58 N.H. 207, 216; Baldwin v. Moses, 319 Mass. 401, 66 N.E.2d 24. Since their whole authority springs from the acts of the parties in making the submission their award must necessarily conform to it. Johnson v. Noble, 13 N.H. 286, 299; Truesdale v. Straw, supra; Chase Brass & Copper Co. v. Chase Brass & Copper Workers Union, 139 Conn. 591, 96 A.2d 209; Simons v. Publishers' Ass'n of New York City, Sup., 94 N.Y.S.2d 362, 368. It is therefore essential to determine whether the parties made a general unrestricted submission of the controversy existing between them or whether it was limited and restricted.

It is well settled that a submission to arbitration is a contract subject to the laws governing contracts in general and that the interpretation and construction of a written submission is a question of law for the court. Burleigh v. Ford, 59 N.H. 536, 539; Lehigh Coal & Navigation Co. v. Central R. of New Jersey, D.C., 33 F.Supp. 362, 367; Simons v. Publishers' Ass'n of New York City, supra, 94 N.Y.S.2d 369.

Article XII under the provisions of which the submission was made is general in its terms: 'Upon written notice by either party to the other, the matter shall be submitted to an Arbitrator * * * The parties hereby agree to accept the award of such Arbitrator to be final and conclusively binding upon both parties to this Agreement.' The written notice given thereunder by the defendant was of the same nature. 'The Union claims the improper withholding of vacation pay from employees duly eligible under the terms of the contract and requests a correction of this condition.' Neither contains a limiting provision that the award shall be made in accordance with legal principles (Sanborn v. Murphy, 50 N.H. 65, 67) or upon just and legal grounds (Prescott v. Fellows, 41 N.H. 9, 10) or that the parties will accept the award as final and binding provided it is not contrary to law (Chase Brass & Copper Co. v. Chase Brass & Copper Workers Union, supra) or that the arbitrators cannot alter, amend or modify the contract in their award. Westinghouse Air Brake Co. Appeal, 166 Pa.Super. 91, 70 A.2d 681.

We are of the opinion that the writings under and by virtue of which the submission was made clearly constituted a general unrestricted submission of the matter in dispute and that parol evidence tending to enlarge or vary its nature was inadmissible. Furber v. Chamberlain, 29 N.H. 405, 408, 418; Burleigh v. Ford, supra. The action of the Trial Court striking out the testimony of Arthur H. Nighswander, Esq., was proper.

'Under a general submission * * * both the law and fact are submitted to the judgment of the arbitrators * * * for their consideration and decision. And it is very well settled, that in such cases arbitrators are not restricted by the submission to decide upon strict principles of law, but their decision will be in conformity with the submission, although it be made in disregard of the law and contrary thereto * * * but may decide upon principles of equity and good conscience * * *.' Johnson v. Noble, 13 N.H. 286, 289; White Mountain R. v. Beane, 39 N.H. 107, 108; Sanborn v. Murphy, supra; Chase Brass & Copper Co. v. Chase Brass & Copper Workers Union, supra; Active Fabrics Corp. v. Rosedale Fabrics, Inc., 275 App.Div. 654, 86 N.Y.S.2d 153; McKay v. Coca-Cola Bottling Co., 110 Cal.App.2d 672, 677, 243 P.2d 35.

It is admitted by the plaintiff that defendant took the position before the Board that 'there was nothing in the contract that covered this case but that many of the people had worked for the Company a long time and morally were entitled to vacation pay.' Equitable grounds for decision were therefore discussed before the Board (Cushman v. Wooster, 45 N.H. 410, 411) and it was proper for the arbitrators to base their decision on simple justice even if it meant going outside the scope of the bargaining contract, considering the general accepted practice in industry and the whole agreement between the parties. Piersons v. Hobbes, 33 N.H. 27, 31; Prescott v. Fellows, 41 N.H. 9; Sanborn v. Murphy, supra. See Brampton Woolen Co. v. Local Union 112, 95 N.H. 255, 257, 61 A.2d 796.

The Court therefore properly denied plaintiff's requests Nos. 1, 3, 6, 7, 8 raising the issues heretofore considered.

We turn now to plaintiff's contention that the award should be set aside because the arbitrators made an obvious mistake. The Board in its decision stated the following as one of the several reasons...