Moore v. Luckess

• Decision Date: 05 February 1873
• Citation: 64 Va. 160
• Parties: MOORE v. LUCKESS' next of Kin.
• Court: Virginia Supreme Court

64 Va. 160

MOORE v. LUCKESS' next of Kin.

Supreme Court of Appeals of Virginia.

February 5, 1873

1. Where an order is made in a pending cause, submitting the matters in dispute therein to arbitration, and the arbitrators have before them the pleadings and exhibits, duly consider them, and return them to court with their award, if it appears from an inspection of the whole, that the arbitrators have made a plain and palpable mistake of law there can be no valid ground for refusing relief in such cases.

2 L.'s executor sues M. upon his bonds executed to L., and M. pleads payment, and files an account of set-off consisting of charges for services rendered to L., running through fourteen years. Pending the suits, the ex'or and M. agree to refer the matters in dispute to arbitration, the submission to be entered of record in said causes. The arbitrators return their award, by which they, 1st, ascertain that M. is indebted to the ex'or in the amount of the bonds; and 2d, that M. is entitled to the credits he claims for the five years before suit brought, specifying the amount in each year. The ex'or declining to oppose the confirmation of the award, the next of kin of the residuary legatee of L., file their bill to set it aside, on the ground that the arbitrators intended to decide the case according to law, and had mistaken it. The arbitrators say in their testimony that they intended to decide the case according to law, and apply the statute of limitations to the account of M.; and they had before them the papers in the causes, the account of M. and the depositions filed, and returned them with their award to the court. HELD:

1. Though the award does not refer to the papers, yet they are so identified that the court will consider them in connection with the award; and it being apparent that the arbitrators took the institution of the actions, instead of the filing of tho plea, as the date from which the statute would cease to run, the court will correct the error.

2. A court of equity, alone, has jurisdiction to correct the error; and the ex'or declining to oppose the confirmation of the report, the next of kin may maintain the suit.

3. Under the statutes, an award cannot be set aside in a common law court, except for error apparent on the face of the award, or unless it has been procured by corruption or other undue means, or misbehavior in the arbitrators.

4. The error of the arbitrators may be corrected, without setting aside the award, by striking out from it the credits allowed him, to which the statute applies, dating from the filing of the plea.

This case was argued in Staunton at the August term 1872, of the court, and was decided at the present term of the court in Richmond.

It was a suit in equity in the Circuit court of Rockbridge county brought by the next of kin of Wm. Luckess, jr., who were infants, to set aside an award made in three actions of debt pending in said court, brought by the executors of Wm. Luckess, sr., against N G. Moore. Wm. Luckess, jr., was the residuary legatee of Wm. Luckess, sr.; and it appeared in proof as well as by the answer of one of the executors, that the estate of Wm. Luckess, sr., would pay all his debts and special legacies and leave the amount involved in said suits to pass to the residuary legatee, and that the condition of the estate of Wm. Luckess, jr., was such as that his next of kin would be entitled to the fund. The bill alleged that the executors of Wm. Luckess, sr., declined to oppose the confirmation of the award. The bill admitting the integrity of the arbitrators, stated several objections to the award, among which, one was that the arbitrators intending to decide the case according to law, had mistaken it, and so had erred.

Wm. Luckess, sr., was a wealthy old bachelor, without any known kin. He lived for fourteen years in the house of N. G. Moore, who kept a house of private entertainment in the county of Rockbridge, and he died there in September 1859. He had a special written contract with Moore, which was renewed every year, specifying how much he was to pay and for whet; and receipts for the amount were regularly given by Moore.

Whilst so living in Moore's house Wm. Luckess, sr., lent to Moore money at several times, for which he took his bonds and became the assignee of another; the whole amount being $5,740 28; and on these bonds the interest had been settled up to a short time before his death. In June 1857 he made his will, by which he gave many legacies; to each of Moore's seven children a legacy amounting together to $14,000.

In 1860 the executors of Wm. Luckess, sr., brought three actions of debt upon the bonds aforesaid, against Moore; and he pleaded payment, and filed an account by way of set-off; the charges, with two exceptions of small amount, being for extra services rendered to Luckess and his slaves, from 1845 to 1859, and amounting altogether, with interest to 1859, to $10,818 60.

There seems to have been a trial of the causes in 1861, when the jury failed to agree, and were discharged and nothing further was done until August 1866, when the executors of Luckess and Moore entered into an agreement under seal, to refer them to the arbitrament of John Letcher and R. C. McCluer, Esqrs., with power in them to choose an umpire; and it was agreed that the submission should be entered of record in said actions at law.

Before proceeding to hear the case the abitrators selected Daniel Brown as the umpire, and they all sat together; and in May 1867 they made their award. In this award they commence by saying, 1st: We have ascertained that Moore is indebted to the executors in the sum of $5,740 28, with interest thereon from May 21st 1859; 2d, we have ascertained that the said Moore is entitled to the following credits, viz: a credit of $1,225, with interest thereon from the first of January 1855; and they thus set out the different credits allowed him, extending from January 1855 down to the death of Luckess in 1859; allowing him all his charges between these dates except one which is reduced. They do not, however, make any calculation of interest, or statement showing how much the credits amount to; but they in fact amounted to upwards of $500 more than the amount of the bonds. The arbitrators were examined as witnesses; and upon their testimony, it appeared that they had before them the papers in the common law causes, including the pleadings, the bonds, the account of Moore, and several depositions filed in said causes; all of which were returned to the court with their award, though not referred to in it. And they say that they intended to exclude all the items of Moore's account barred by the statute of limitations.

The cause came on to be heard on the 17th of June 1870, when the court held that no sufficient cause had been shown for setting aside the award; but being satisfied there was such error in the application of the statute of limitations, by the arbitrators and umpire, to the account of set-off filed by the defendant Moore, in the suits at law, as required correction, decreed that the award be amended, so as to exclude the credits allowed to Moore anterior to five years from his entering his plea in the cases at law. And a statement having been made by a commissioner, showing that the credits, principal and interest, on the 1st of May 1859, amounted to $4,016 89, leaving a balance of $1,723 39 due to the Luckess estate, upon the bonds sued on, it was ordered that a judgment be entered in the cases at law upon said award for the said sum of $1,723 39, with interest from the 1st of May 1859, and their costs. And thereupon Moore applied to a Judge of this court for an appeal; which was allowed.

Brockenbrough and H. W. Sheffey, for the appellant.

Baldwin & Cochran and Anderson & Walker, for the appellees.

STAPLES J.

It may be considered as well settled, that arbitrators, being judges of the parties' own selection, have rightfully the power to decide and finally adjudicate the law and the facts of the case submitted to them.

They may disregard the law entirely, and decide upon principles of equity and good conscience exclusively. If, however, they mean to conform to the law, and they plainly mistake it, such mistake is sufficient to invalidate the award.

There is no controversy in regard to these principles. The real difficulty lies in determining the effect of a mistake of law made by the arbitrators, not apparent on the face of the award or some paper incorporated with and constituting a part of it.

The question is, may such mistake be established by extrinsic evidence?

It is said by Judge Story, in 2 Eq. Jur., 1455, " If the arbitrators mean to decide strictly according to law, and they mistake it, although the mistake is made out by extrinsic evidence, that will be sufficient to set aside the award."

In support of this proposition he cites a number of cases; which, however, do not sustain the proposition in the unqualified terms thus asserted. See also 9 John. R. 263; Kyd. on Awards, 350; 3 Atk. R. 462, 492.

On the other hand there is a great weight of authority in favor of the doctrine that there must be something on the face of the award, or some paper connected with it, to show that the arbitrators have proceeded on grounds not sustainable in point of law.

The courts, however, while professing to maintain this latter rule, have in many cases of real or supposed hardships allowed exceptions and modifications, which make it very difficult to deduce any established principles from these decisions. Thus, relief has been given where the mistake was clearly established by reference to some...