In re Ames-Farmer Canning Co.

• Decision Date: 02 October 1920
• Docket Number: No. 33400.,33400.
• Citation: 179 N.W. 105,190 Iowa 1259
• Parties: IN RE AMES-FARMER CANNING CO., ET AL. APPEAL OF FARMER ET AL.
• Court: Iowa Supreme Court

190 Iowa 1259

179 N.W. 105

IN RE AMES-FARMER CANNING CO., ET AL. APPEAL OF FARMER ET AL.

No. 33400.

Supreme Court of Iowa.

Oct. 2, 1920.

Appeal from District Court, Polk County; Thos. J. Guthrie, Judge.

Appeal from a judgment based upon the report and award of arbitrators in an alleged statutory arbitration proceeding. Reversed.C. H. Pasley and John Y. Luke, both of Ames, for appellants.

Miller, Kelly, Shuttleworth & Seeburger, of Des Moines, for appellee.

STEVENS, J.

The submission involved somewhat numerous and more or less complicated matters of controversy between the Ames-Farmer Canning Company, a corporation, the Dexter Seed Company, a copartnership, J. Le Roy Farmer, and S. T. Farmer. The arbitrators selected and agreed upon by the parties were Fred German, Geo. R. Kelly, and S. T. Farmer. The agreement submitting the controversy was duly signed by all of the parties. Before the final award had been agreed upon, Farmer notified the remaining arbitrators, and parties to the agreement, that he refused to proceed further, and sought to withdraw as an arbitrator. The agreement provided that an award signed by two of the arbitrators should be final, conclusive, and binding upon the parties, who also specifically therein waived the right of appeal from a judgment upon the award to the Supreme Court.

After the attempted withdrawal of S. T. Farmer and his refusal to further participate in the proceedings, Kelly and German prepared,signed, and swore to an award, largely favorable to the Ames-Farmer Canning Company, and caused same to be filed in the office of the clerk of the district court of Polk county, where the agreement provided judgment might be entered. Thereupon counsel for the canning company filed a motion for judgment. The Farmers and the Dexter Seed Company appeared and filed sundry and numerous objections to the adoption of the award and the entry of judgment thereon, among which was that the agreement was materially changed and altered after the signatures were attached thereto, without being again signed and acknowledged, and that the original acknowledgment was void, and therefore the court, in causing judgment to be entered, acted without jurisdiction. The original agreement signed by all of the parties bears date February 10, 1919, and purports to have been acknowledged by S. T. and J. Le Roy Farmer, on behalf of themselves and the Dexter Seed Company on the same day, before I. O. Hasbrouck, a notary public at Ames, Iowa, and also on February 12th, on which date same was also acknowledged by the proper officers of the Ames-Farmer Canning Company before a stockholder and officer of the corporation, who was a notary public and also attorney for the company. On the last-named date, but before the certificate of the notary was attached, the articles of submission were changed by inserting the name of George Kelly as the third arbitrator and erasing a provision for the appointment thereof; German and Farmer having been so designated by the original agreement. On March 19th following, at which time the hearing before the arbitrators had terminated and Farmer had given written notice to all of the parties of his withdrawal, but before the award was signed by Kelly and German, the officers of the canning company again acknowledged the articles before a notary public, who had appeared as a member of a law firm as attorney for the corporation in a suit previously brought in the Polk County district court against J. Le Roy Farmer, in which the subject-matter of the arbitration was involved. It is not claimed that any of the acknowledgments attached to the articles of submission are defective in form, but that the first acknowledgment of the officers of the canning company and the second acknowledgment by all of the parties on February 12th is void, for the reason that the notary certifying thereto, was, at the time, a stockholder and officer of the company. This relationship of the notary to the corporation is conceded, but it is argued that the Farmers cannot complain thereof, and that they are bound by the acknowledgment of February 10th before Hasbrouck; that the position of the canning company is analogous to that of a grantor, and that the notary was not disqualified on account of his interest and relation to the corporation, and, further, that the officer certifying to the acknowledgment of March 19th was not disqualified.

Section 4386 of the Code of 1897, providing for the submission of controversies that may be the subject of a civil action to arbitration, is as follows:

“The parties themselves, or those persons who might lawfully have controlled a civil action in their behalf for the same subject-matter, must sign and acknowledge a written agreement, specifying particularly what demands are to be submitted, the names of the arbitrators, and court by which the judgment on their award is to be rendered.”

Section 4396, providing for the filing of the award of the arbitrators in a matter thus submitted to them and for judgment thereon, is as follows:

“The award shall be entered on the docket of the court at the term to which it is returned, as an action is entered, and shall be called up and acted upon in its order, but the court may require actual notice to be given to either party, when it appears necessary and proper, before proceeding to act on the award.”

Section 4397, providing for the rejection or resubmission of the controversy to the arbitrators by the court, is as follows:

“The award may be rejected by the court for any legal and sufficient reasons, or it may be recommitted for a rehearing to the same arbitrators, or any others agreed upon by the parties, or appointed by the court if they cannot agree.”

The sections following provide that, when the award has been filed and adopted, it shall have the same force and effect as the verdict of a jury, and that an appeal from a judgment thereon may be taken to the Supreme Court.

[1] Acknowledgment of the written agreement by the parties is imperative, and therefore necessary to confer jurisdiction upon the court designated for that purpose, to cause judgment to be entered upon the award when filed and adopted as required by the statute. Fink v. Fink, 8 Iowa, 313;City of Marion v. Ganby et al., 68 Iowa, 142, 26 N. W. 40;Wilkinson v. Prichard, 145 Iowa, 65, 123 N. W. 964, Ann. Cas. 1912A, 1259;Barney v. Flower, 27 Minn. 403, 7 N. W. 823;Burkland v. Johnson, 50 Neb. 858, 70 N. W. 388; Gessner v. Mnpls. R. R. Co., 15 N. D. 560, 108 N. W. 786.

[2] A notary public, who is a stockholder therein, is disqualified to take, or certify to, an acknowledgment to any instrument in which a corporation is beneficially interested. Smith v. Clark, 100 Iowa, 605, 69 N. W. 1011;Bank v. Stockdale, 121 Iowa, 749, 96 N. W. 32;Wilson v. Traer & Co., 20 Iowa, 231;Empire Mortgage Co. v. Beechley, 137 Iowa, 7, 114 N. W. 556, 126 Am. St. Rep. 248;Greve v. Echo Oil Co., 8 Cal. App. 275, 96 Pac. 904;Boswell v. First Natl. Bank of Laramie, 16 Wyo. 161, 92 Pac. 624, 93 Pac. 661. None of the above cases, or similar cases brought to our attention, involve the validity of a certificate of acknowledgment attached to articles submitting a controversy to arbitration.

It is true that an instrument acknowledged before a notary, disqualified because of interest, is valid between the parties, but the most that could be claimed for this rule, as applied to the case at bar, is that a defective acknowledgment would not prevent the award from being enforced under section 4395 of the Code. The objection that the notary was disqualified applies to the acknowledgment of the officers of the canning company on February 12th and to the separate acknowledgment by all of the parties on the same day.

[3] We cannot agree with the contention of counsel for appellee that these acknowledgments are valid because the position of the canning company and its relation to the subject-matter of the arbitration was simply that of grantor. Even if that fact were conceded, the acknowledgment would be valid. The interest of the corporation in the several items involved in the submission was direct and positive. The judgment entered in its favor, which involved an item of $5,000 for liquidated damages, is in excess of $20,000. As a stockholder in the corporation, the notary was directly and beneficially interested; the position of the corporation was that of a claimant against the Farmers and the Dexter Seed Company, and not of a grantor. Courts have, with great uniformity, held that acknowledgments taken and certified by an interested notary are invalid, and the record thereof does not impart notice to third parties. This court, in Empire Mortgage Co. v. Beechley, supra, held that proof of publication of an original notice, sworn to before the plaintiff, a notary public, was a nullity, and that the court, in that case, did not acquire jurisdiction to render a decree quieting title to real estate.

[4] It is contended by counsel for appellant that the recital in the certificate of I. O. Hasbrouck, to the effect that S. T. Farmer appeared before him at Ames on March 10th and acknowledged the articles of submission on behalf of himself and the Dexter Seed Company, is false, and that, in fact, Farmer did not acknowledge the instrument before him. An affidavit of the notary attached to the formal objections to the award recites that the certificate signed by him was prepared and attached to the instrument when received by him, and that S. T. Farmer did not acknowledge the same. He was not called as a witness, nor was the affidavit offered in evidence. Farmer...