McKenna v. Lyle

• Decision Date: 31 May 1893
• Docket Number: 170
• Parties: McKenna, Appellant, v. Lyle
• Court: Pennsylvania Supreme Court

26 A. 777

155 Pa. 599

McKenna, Appellant, v. Lyle

No. 170

Supreme Court of Pennsylvania

May 31, 1893

Argued March 27, 1893

Appeal, No. 170, July T., 1892, by plaintiff, Francis McKenna, from decree of C.P. No. 48 Phila. Co., Dec. T 1889, No. 627, dismissing bill in equity against James Lyle.

Bill and cross-bill for account between partners.

It appeared from the record that after the bill and cross-bill had been filed the parties entered into an agreement of arbitration which was as follows:

"It is hereby agreed between the undersigned co-partners of the firm or Lyle & McKenna, wholesale liquor dealers, as follows viz.:

"Whereas a difficulty exists between the said parties in reference to their partnership matters, and a bill and cross-bill in equity has been filed by them in C.P. No. 4, Dec. T., 1889, No. 627, and to avoid the expenses and delay incident thereto, these presents are executed. The agreement being as follows, viz.:

"Each partner hereby names a party as arbitrator or referee to examine the books of account of the firm, to hear both parties as to their claims against each other and the partnership matter, (under oath, if desired,) with their counsel present, if desired, and to ascertain and find a final award between the said parties; which award or finding shall be, as to the said parties, a finality. Neither party filing exceptions, nor appealing therefrom. The amount or amounts, thus ascertained, to be paid by the party to the other forthwith, and in default thereof suit may be immediately brought therefor. Mr. Lyle names Charles Castle and Mr. McKenna names Nicholas J. Griffin as the arbitrators.

"In case they cannot agree between themselves they shall call in a third party as umpire, whose decision shall be then final. That is, the two forming a majority, with the like effect as if the arbitrators themselves had so agreed.

"All the accounts and books to be freely open to the partners and to the arbitrators, and full aid and service to be rendered by the parties to the arbitrators and to each other. Each partner is fully empowered hereby to collect all the unpaid debts, and to be paid 4 per ct. on the amount so collected from the moneys when received without any interference by the other. The moneys collected to be deposited within twenty-four hours thereafter in the Philadelphia Trust and Safe Deposit Company in the names of Henry B. Freeman and Aaron Thompson, attorneys for the firm. From the moneys so collected the rents and merchandise debts to be first paid by them, the said attorneys, on the joint orders of the firm, to them, or, in case of a refusal, upon the orders of the arbitrators; afterwards the amount found due the partners by the arbitrators. Then the balance one third to McKenna, and two thirds to Lyle. All suits brought against or by the firm to be conducted by the said attorneys, as well as all other matters in connection therewith, whose fees for advice and service, as well as costs and expenses to be paid out of the firm's moneys equally. The expenses of the reference to be paid equally by the firm. Each partner to sign a paper to debtors of the firm to pay either one the indebtedness. Notice to the contrary, heretofore given, to be withdrawn.

"The bills already filed to be withdrawn upon payment of costs. The arbitrators to meet forthwith and proceed without delay until final settlement.

"The above fees, costs and expenses referred to are first to be divided equally and paid out of the moneys collected. Then to be apportioned, viz.: One third to McKenna and two thirds to Lyle by the arbitrators after the payments as above, upon their final finding, and upon this principle are thus to be deducted on ascertaining the amounts due either partner.

"The partnership is hereby agreed to be dissolved on the first day of May, A.D. 1890, and in case all the moneys should not be collected and the matters closed before this dissolution, then either of the partners shall have the same right to collect and deposit as hereinafter set forth under above terms."

Other facts appear by the opinion of the Supreme Court. The court dismissed exceptions to report of master, John M. Campbell, Esq., and confirmed the report, recommending dismissal of bill.

Errors assigned were (1) confirmance of master's report; (2) dismissal of exceptions, quoting them.

The decree of the court below is reversed at the cost of the appellee, and the record is remitted to the court below with instructions to recommit the case to the master for further proceedings in accordance with this opinion.

Aaron Thompson, for appellant. -- A submission whether by deed or otherwise may be revoked before execution though declared to be irrevocable: Power v. Power, 7 Watts, 205. A submission may be revoked at any time before the award is signed: Johnson v. Andress, 5 Phila. 8; Wood v. Finn, 1 Clark, 396; Robinson v. Bickley, 30 Pa. 390. The general rule is that until actual notice of an award made (not intended), the party may revoke: Watson on Arb. 131 Hungate's Case, 5 Rep. 103; Block v. Palgrave, Cro. Eliz. 797; Green v. Pole, 6 Bing. 443; Skee v. Coxon, 10 B. & C. 483.

The case of Shisler v. Keavy, 75 Pa. 79, cited by the master was where a revocation was on the same day of the award, and notice only given to one of the referees, and therefore is not in point. Neither is the other case he cites of McCahan v. Reamey, 33 Pa. 536, as that turned on the exceptions to the award in an action of assumpsit thereon. And yet in a later case, Speer v. Bidwell, 44 Pa. 23, upon this very point the court cite McCahan v. Reamey, on page 26, and holds that for misbehaviour of arbitrators an award would be set aside.

There is no case reported where a revocation was not sustained except where master or examiner was appointed by the court before the reference and not subsequently thereto, as in our case, and also where answer and replication had been previously filed.

In Ratapier v. Ratapier, 2 Wash. C.C.R. 180, the court held that if a cause be even discontinued and afterwards the defendant appears and makes defence, he cannot at the trial take advantage of the discontinuance.

By pleading to the merits and going to trial the defendant waives a rule of reference: Creps v. Durham, 69 Pa. 456; Christman v. Moran, 9 Pa. 487; St. Bartholomew's Church v. Wood, 80 Pa. 219; Wallace's Ap., 5 Pa. 103.

The court of common pleas has no power to set aside an award under the act of 1705, and refer back to a referee, but if they do refer back and the parties appear and try the matter in controversy, the error is cured: Brooke v. Bannon, 3 W. & S. 382.

For corruption or misbehavior of the arbitrators any award either at common law or statute may be assailed, notwithstanding a stipulation that there shall be no exception or appeal: Speer v. Bidwell, 44 Pa. 23; 1 Stephens' Nisi Prius, Arbitration Award, p. 91; Phipps v. Ingram, 3 Dowl. 669.

The rule that a master's finding of fact is entitled to the same consideration as the verdict of a jury, and will not be set aside unless clearly and palpably against the weight of evidence, does not apply where the finding is a deduction from undisputed facts, or from uncontradicted and credible evidence: McConomy v. Reed, 152 Pa. 42.

Henry B. Freeman, for appellee. -- It is most respectfully submitted that this appeal should be quashed, because the appellant has expressly waived his right thereto, which waiver is binding and conclusive: Cuncle v. Dripps, 3 P. & W. 291; McCahan v. Reamey, 33 Pa. 536; Williams v. Danziger, 91 Pa. 233; Ranck v. Becker, 12 S. & R. 416; Bingham v. Guthrie, 19 Pa. 422.

In the case of Ankermiller v. O'Byrne, 2 Mona. 766; and Groll v. Gegenheimer, 147 Pa. 162, in which the right of objection or exception was waived in writing, the appeals were quashed and the penalty allowed.

If parties stipulate that disputes shall be submitted to the arbitrament of a particular individual or tribunal they are bound by their contract and cannot seek redress elsewhere: Leebrick v. Lyter, 3 W. & S. 365; Navigation Co. v. Fenlon, 4 W. & S. 205; McGheehen v. Duffield, 5 Pa. 499; Snodgrass v. Gavit, 28 Pa. 221; Lauman v. Young, 31 Pa. 306; McCahan v. Reamey, 33 Pa. 536; Herdic v. Bilger, 47 Pa. 60; Reynolds v. Caldwell, 51 Pa. 298; Irwin v. Shultz, 46 Pa. 74; McManus v. McColloch, 6 Watts 357.

If the submission provide that the award shall be final and conclusive, and that neither party shall have a right to appeal or file exceptions, the parties are concluded by their agreement: McCahan v. Reamey, 33 Pa. 535.

The arbitrators have the right to decide on the evidence and its credibility: Com. v. LaFittry, 2 S. & R. 106.

An award though erroneous in point of law, cannot be impeached collaterally: Zeigler v. Zeigler, 2 S. & R. 286.

The agreement could not be revoked if executed; if executed in part, the parties must be restored to their original position. The cases cited by appellants do not apply to an agreement executed in part or in whole. It could only be set aside or assailed on the ground of corruption or misbehavior of the arbitrators: Speer v. Bidwell, 44 Pa. 23.

Before STERRETT, C.J., GREEN, WILLIAMS, McCOLLUM, MITCHELL and DEAN, JJ.

OPINION

MR. GREEN, JUSTICE

This proceeding was a bill in equity for the dissolution of a partnership subsisting between the plaintiff and defendant and for a settlement of the accounts of the firm. The bill was filed on February 15, 1890. On the 11th of March, 1890, the parties, by an agreement in writing, referred all matters in dispute to two arbitrators with a provision that their award should be final, neither party to file exceptions or to appeal from the same. It was also agreed that the partnership should be dissolved as of May 1,...