Mathew Hobson v. Duncan McArthur

• Decision Date: 01 January 1842
• Citation: 41 U.S. 182,16 Pet. 182,10 L.Ed. 930
• Parties: MATHEW HOBSON, Appellant, v. The Heirs of DUNCAN MCARTHUR, deceased, Appellee
• Court: U.S. Supreme Court

41 U.S. 182

16 Pet. 182

10 L.Ed. 930

MATHEW HOBSON, Appellant, v. The Heirs of DUNCAN MCARTHUR, deceased, Appellee.

January Term, 1842

APPEAL from the Circuit Court of Ohio. In the circuit court of Ohio, a bill was filed by Duncan McArthur, asking for a specific performance of a contract, dated the 10th of November 1810. The complainant and the defendant, with John Hobson, entered into certain articles of agreement, relative to the withdrawal of the entries of land, in the state of Ohio, and the re-entry thereof on other lands, out of which, by the contract between the parties, compensation was to be made in the lands included in the relocation of the lands, of which the entries had been withdrawn. The value of the lands, the entries of which were, by the agreement, to be withdrawn, and of the land on which the entries were to be relocated, were to be determined by persons mutually chosen and agreed upon; who, if they could not agree, were to nominate a third person.

Out of this agreement, and proceedings under it, the questions in this case arose, and were argned by Stanbery, for the appellant, and by Mason, for the appellees, the heirs of Duncan McArthur, who became parties to the proceedings, on the decease of Duncan McArthur. In the circuit court, a decree was given in favor of the complainant, Duncan McArthur; and the defendant, Matthew Hobson, prosecuted this appeal. The case is fully stated in the opinion of the court.

The question decided by the court was, as to the construction of the agreement of the parties, to submit the value of the land to the determination of persons mutually chosen and agreed upon, and if they could not agree that they should appoint a third person.

Stanbery, for the appellant, contended, that the decree of the circuit court was erroneous, in setting aside the appraisement of McArthur's surveys. The contract of November 10th, 1810, provides for an appraisal of the lands entered by Langham, and the lands entered by McArthur, 'by two disinterested men, one to be chosen by each of the contracting parties; and if the said two men cannot agree on the price of the said lands, or any part thereof, the said two men are to choose a third man, who, together with the other two, shall agree on the price of said land.' It appears, that the two appraisers first viewed the Langham entries, and disagreeing as to their value, called in Lyne Starling as a third man; and the three concurred in an appraisement of these lands; but differing in the value of the McArthur entries, an award as to their value was made by Starling and one of the appraisers, without the concurrence of the other appraiser.

Mr. Stanbery argued, that the intention of the parties to the contract was, that the third man was to act as an umpire, not as a third arbitrator. He admitted, that the rule is well settled, that all the arbitrators must concur, unless the submission provides for an award by a majority. But this was not a submission to three arbitrators. The submission is to two, and it is only in the event of their inability to agree, that the third, man is to intervene. For what purpose? Not, certainly, to add to the difficulty by a new and discordant opinion, but to settle it by his decision. It was not necessary to the validity of the award, that the two arbitrators should concur with the umpire, or that either of them should concur with him; and the circumstance that the award is signed by one of the arbitrators as well as by the umpire, does not vitiate. Watson on Arb. 64.

2. But if the appraisement of the McArthur surveys cannot be sustained, the whole award is void; and the decree of the circuit court is erroneous, in sustaining the appraisement of the Langham entries. The express language of the contract is, that 'the land from which the 10,000 acres is to be withdrawn, as located by Elias Langham, and also the land to be reentered by McArthur, is to be valued by two disinterested men.' &c. Besides this specific enumeration of the matters submitted, it is obvious, that nothing short of an appraisement of both sets of entries would avail; for the object was to fix the relative values, and that could only be accomplished by a valuation of both. The arbitrators must respond to all matters specifically submitted; especially, where there is a dependency and necessary connection in the matters submitted.

Mason, for the appellees.—1. The mode of ascertaining the value of the lands is provided for in the contract. Each party is to choose one man; and if the men thus chosen cannot agree, they 'are to choose a third man, who, together with the other two, shall agree on the price of the land.' It was, doubtless, competent for the parties to agree, that the concurrence of the whole number of appraisers should be requisite to constitute a valid appraisement of the land. There is no ambiguity in the terms of the contract. They do expressly require that the three men should 'agree on the price.' And they all did agree as to the price of the lands located by Langham.

But only two agreed in appraising the lands entered by McArthur. The question is, whether the appraisement made by two is valid in law.

There is a difference in this respect between a private authority, and a public trust and duty; in the former case, all must join; in the latter, the power to several is well executed by the majority: 'unless it be expressly provided in the submission, that a less number than all the arbitrators named may make the award, the concurrence of tall is necessary.' Kyd on Awards 106; Watson on Arb. 85 (edit. 1836); Grindley v. Parker, 1 Bos. & Pul. 229; Cortes v. Kent Waterworks Company, 7 Barn. & Cres. 314; Rex v. Whitaker, 9 Ibid. 648; Dalling v. Matchett, Barnes 57; s. c. Willes 215; Green v. Miller, 6 Johns. 40; Perry v. Penring, Cro. Jac. 399; Sallows v. Girling, Ibid. 277; 5 Dane's Abr. 562.

2. The appraisement was also invalid, because the agent transcended his authority in two particulars, viz: 1st, In having more land appraised than was required to pay the debt; and 2d, In having other lands appraised than those described in the power of attorney, under which he derived his authority. The power of attorney was in conformity with the terms of the contract.

3. It was void for uncertainty in this, to wit: That the contract required the appraisement to be made in such a manner that Hobson could have released his title to the residue of the land not appraised; whereas, the appraisers proceeded to value more than $36,000 worth of land to pay a debt of $9250. The appraisement, therefore, was made in such a manner as to render it impossible for Hobson to comply with that essential part of the contract, which required him to convey to McArthur all the land that would remain, after deducting the quantity required to pay the debt due to himself. But Hobson was not content to have as much land, and no more, set off and appraised, as was necessary to pay the debt; nor did he have all the lands entered by McArthur appraised. Without having all appraised, he would have nearly four times as much appraised as was required to discharge him claim. Certainly, the court cannot find in such acts of capriciousness, a compliance with the letter or spirit of the contract.

A question naturally arises on this branch of the case—who had the right to select the land for appraisement? Was the right vested in the appraisers? or in the parties jointly? or in one of them, and which? It is answered, in the debtor. McArthur claimed this right, and asserted it in the letter of attorney to his son. The privilege of choice is not in the creditor, in such cases. The contract provided, in case of a deficiency of land to pay the debt, that McArthur should give other lands, &c. These other lands he, undoubtedly, had a right to select.

But supposing the appraisement of the McArthur entries to be void, what effect will that have on the appraisement of the Langham entries? 'If a thing be awarded to be done, which is bad for uncertainty, or as being beyond the submission, or for any other objection; and this part of the award does not form a consideration for the performance of the matter awarded on the other part, and is distinct and independent thereof; then the award is only void for so much.' Though formerly otherwise, 'nothing now is more clear, than that an award may be bad in one part, and yet good and binding in another part.' Watson on Arb. 190-91.

Assuming, therefore, that the appraisement, so far as it respected the McArthur entries, was void, for any one or all the reasons assigned, and valid as to the residue; I proceed to inquire, what decree the complainants are entitled to ask for? McArthur had a right, by the contract, to pay in land or money, at his option; and on payment being made or tendered, in either mode, he had a right to require Hobson to release. Every stipulation to pay a debt in specific property is presumed to be made in favor of the debtor; and therefore, he may, in all cases, pay the debt in money, in lieu of the property which, for the ease of the debtor, the creditor had agreed to receive. Chipman on Cont. 31, 32, 34, 44; 2 Kent's Com. 400. The contract, in its legal effect, was the purchase of the warrants for a sum of money thereafter to be ascertained in the mode prescribed by the contract, and to be paid in land or money, at the option of McArthur. It was the same, in substance, as a contract to pay so much money; for instance, $100 in wheat or cattle. This argument is not weakened by the fact, that the warrants were to be re-entered in the name of Hobson; because the only object the parties could have had in the provision, requiring the entries to be made in the name of Hobson, was to afford him security for the performance of the contract on the part of McArthur.

But if McArthur had not the right of election, which is contended for, but on the contrary could have been compelled in a court of equity to pay in...