Johnson v. Wells

• Citation: 72 Fla. 290,73 So. 188
• Court: United States State Supreme Court of Florida
• Decision Date: 21 November 1916
• Parties: JOHNSON v. WELLS.

73 So. 188

72 Fla. 290

JOHNSON v. WELLS.

Florida Supreme Court

November 21, 1916

Rehearing Denied Dec. 12, 1916.

Appeal from Circuit Court, Hillsborough County; F. M. Robles, Judge.

Suit in equity by D. S. Wells against W. E. Johnson. From a decree for complainant, defendant appeals. Reversed, and bill of complaint dismissed.

Syllabus by the Court

SYLLABUS

Sections 1651-1658, General Statutes of Florida 1906, make provision for the submission of any controversies by the parties interested to arbitration, either before or after suit, and when the submission has been made in substantial compliance with the statute, the award of the arbitrators has the force and effect of a judgment, and may not be impeached, except in an appropriate proceeding upon sufficient grounds.

A bill in chancery to set aside an award is not demurrable for want of equity, which alleges that the award was obtained by the fraud of one of the parties to the arbitration, who was complainant's copartner in business, and the fraud was committed by the defendant, complainant's copartner, by making false entries in the books of the copartnership, to which complainant did not have access, and was ignorant of the existence of the fraud, and that the books containing the fraudulent entries were submitted to the arbitrators by the defendant, and the award was based largely upon such false entries, which were against complainant's interests.

Mistakes of arbitrators, consisting in their opinion of erroneous conclusions of the facts, are not such mistakes as will vitiate an award under the statute.

COUNSEL Lunsford & De Vane, of Tampa, for appellant.

J. T Watson, Jr., of Tampa, for appellee.

OPINION

ELLIS J.

D. S Wells exhibited his bill of complaint in the circuit court for Hillsborough county against W. E. Johnson, alleging in substance that complainant and defendant formed a copartnership in January, 1911, for the 'purpose of doing a general real estate business to buy, sell, and trade in real and other property, and to sell for others on commission, said parties to share equally in all expenses and profits of said business.' It was also alleged that the parties agreed that the copartnership 'would engage especially in the effort to sell certain real estate belonging to the complainant.' The bill alleges that the copartnership was dissolved in May, 1913, and that, differences having arisen between the parties in the 'matter of the respective amounts due and owing as between the partners to themselves and to the partnership,' it was agreed to submit such difference to arbitration, which was done under the provision of the statute in such case provided. The copy of the agreement to arbitrate is attached to the bill as Exhibit A, but not asked to be made a part of the bill.

The bill proceeds to allege that the agreement to arbitrate was carried into effect, evidence was submitted to the arbitrators, who upon considering the same made their award, and the same was entered of record. The award, which was in writing, is attached to the bill as Exhibit B. There were two other persons to the agreement to arbitrate, who were named L. F. Strouse and W. S. Rouse. Complainant further alleges that the arbitrators awarded judgment against him in favor of the defendant in the sum of $328.22 and against complainant in favor of L. F. Strouse and W. R. Rouse in sums named in the award; that complainant had paid the cost bills, including stenographer fees, which are attached to the bill as Exhibits C and D. The bill of complaint then attacks the award, in so far as it was in favor of defendant, upon the ground that the evidence submitted to the arbitrators by the defendant was 'false, incorrect, and fraudulent,' and particularizes in what respect the evidence submitted was of that character. From these allegations it appears that the defendant kept the book of accounts for the partnership exclusively during the time they were in business together; that this book of accounts was submitted to the arbitrators as evidence of the transactions of the partnership, and as containing the record of the accounts and moneys due and owing as between the complainant and the said W. E. Johnson under the said copartnership relation; that the book of account contained many entries that were 'fraudulent, incorrect, and untrue,' which were set forth in the bill; that at the time the award was made complainant was sick, and had no opportunity to make the investigations, which were subsequently made, that resulted in disclosing the 'fraudulent and false testimony as rendered by the said W. E. Johnson upon the hearing before the said arbitrators'; that the complainant did not have access to the books of account from which he had obtained the knowledge of such 'false and fraudulent' testimony on the part of Johnson until about June 2, 1914. It was also alleged that the said book of account failed to show certain transactions in which complainant paid out certain moneys for the copartnership for which he was entitled to credit, and did not contain a true record of certain moneys, properties, and effects received by the copartnership; that the arbitrators did not consider the many errors, discrepancies, and mistakes contained in said account book, which were in fact overlooked by them in rendering their award, and they had in writing, signed by two of them, admitted that they made a mistake in rendering the award. The bill alleges that upon a just and true settlement of the accounts of the copartnership business, including all matters which were considered, or should have been considered, by the arbitrators, as well as such matters as have arisen since pertaining to the copartnership, it will appear that there is a large balance due from the defendant to the complainant. The bill prays that an accounting be had between the parties of all the copartnership dealings and transactions, that the same be fully adjusted, and the respective rights of the complainant and defendant ascertained, that the award be set aside in so far as the same adjudges or awards any sum of money in favor of the defendant against the complainant, for an injunction against the issuing of any process upon the judgment of the arbitrators, and for general relief and subpoena.

The chancellor granted a temporary injunction restraining the defendant from enforcing the award pending the further order of the court.

The defendant demurred to the bill of complaint upon the grounds that the bill was without equity; that the matters set out in the bill had been adjudicated; that the bill merely sought to have a judgment set aside upon newly discovered evidence, and complainant had an adequate remedy at law, which he had lost by laches. The demurrer was overruled. The defendant then moved to dissolve the temporary injunction upon the same grounds as contained in the demurrer, and upon the further ground that there was no affidavit or other sworn evidence from the complainant or any other person that the allegations of the bill were true. This motion was also overruled. These orders constitute the basis for the first, second, and third assignments of error.

The defendant answered the bill of complaint, admitting the copartnership, dissolution, and arbitration, but denied all allegations of fraud on his part, or mistakes on the part of the arbitrators, and averred the correctness of the account book and that the complainant had sufficient opportunity to examine it. There was a replication to this answer, and upon motion of complainant a special master in chancery was appointed to take the testimony of the parties and report the same to the court, together with his findings thereon. The testimony was taken and reported by the master, upon consideration of which and the pleadings the chancellor rendered a final decree setting aside the award, making the temporary injunction permanent, and decreeing that the defendant, W. E. Johnson, pay to the complainant, D. S. Wells, $2,479.59, 'representing the sum of money found by the court to be due and owing to the said D. S. Wells from the said W. E. Johnson upon the accounting as had and taken between the parties in the course of this proceeding.' From this decree the defendant appealed. The remaining seven assignments of error rest upon this decree.

The statutes of this state make ample provision for the submission of any controversy by the parties interested to arbitration, either before or after suit, and provide for the same being made a rule of court, and the awards to have the force and effect of judgments. These statutes also make provision for a method of setting aside such awards by motion on the ground of fraud, corruption, gross negligence, or misbehavior of one or more arbitrators or umpire, who may have signed the award, or of evident mistake acknowledged by the arbitrators or umpire. Sections 1651-1658, Gen. Stats. of 1906 (Compiled Laws of 1914).

The pleadings in this case show that the controversy was submitted to arbitration by the parties, that the arbitration was made a rule of court, and all the requirements of the statute observed to give to the award the force and effect of a judgment. At least, the record does not show to the contrary, and counsel have treated the arbitration in their briefs as if the statute had been in all respects complied with.

Treating the arbitration, therefore, as having been submitted in substantial compliance with the statutes, we will consider the question presented by the demurrer and motion to dissolve the temporary injunction, viz.: May a statutory award be set aside and annulled by a court of chancery upon the grounds First, that one of the parties to an arbitration had sworn falsely before the arbitrators in his own...