Russell-Coleman Cotton Oil Co. v. C. R. Garner & Co.

• Decision Date: 29 April 1922
• Docket Number: (No. 8668.)
• Citation: 242 S.W. 1067
• Parties: RUSSELL-COLEMAN COTTON OIL CO. v. C. R. GARNER & CO.
• Court: Texas Court of Appeals

Page 1067

242 S.W. 1067

RUSSELL-COLEMAN COTTON OIL CO. v. C. R. GARNER & CO.

(No. 8668.)

Court of Civil Appeals of Texas. Dallas.

April 29, 1922.

Rehearing Denied June 17, 1922.

Appeal from District Court, Dallas County; W. F. Whitehurst, Judge.

Action by C. R. Garner & Co. against the Russell-Coleman Oil Mills, formerly the Russell-Coleman Cotton Oil Company. From judgment for plaintiffs, defendant appeals. Affirmed.

Clamp, Searcy & Clamp, of San Antonio, and McCartney, Foster & McGhee, of Brownwood, for appellant.

Crane & Crane, of Dallas, for appellees.

VAUGHAN, J.

The following abridged statement from the pleadings of the parties will suffice to reflect the issues necessary to be considered in disposing of this appeal.

Appellees, as plaintiffs, alleged that they and the appellant were members of the Texas Cotton Seed Crushers' Association, which association had promulgated a system of rules for the guidance of its members in their business transactions with each other. That said association in its constitution and bylaws provided the following committees to adjust and settle differences between members thereof that could not be amicably adjusted promptly: (1) Committee on arbitration; and (2) committee on appeals. That for a valuable consideration appellees and appellant entered into a contract by which appellant agreed to sell to appellees 1,000 tons of cotton seed cake at prices in the contract stated; that the appellant thereafter refused to deliver to appellees the 1,000 tons of cake, or any part thereof, and that appellees were obliged to go into the market and purchase through a broker the 1,000 tons of cotton seed, cake, for which they were compelled to pay $12,710 more than the contract price at which appellant had agreed to deliver same, together with $200 broker's fees. That the Texas Cotton Seed Crushers' Association was a voluntary organization, composed of classes as therein named, appellees and appellant being embraced therein. That appellees and appellant, by written agreement entered into by them, submitted their controversy growing out of the above contract and the breach thereof claimed by appellees to the arbitration committee under the rules and by-laws of said association. That their written agreement to arbitrate provided, among other things, as follows:

"Now, therefore, we, the undersigned, do hereby mutually agree to submit the said differences and controversies to the arbitration and decision of the arbitration committee on cotton seed products of the Texas Cotton Seed Crushers' Association, or a quorum of them, with the right of appeal on the part of either of the above-named parties to the executive committee, according to the rules and regulations of said Texas Cotton Seed Crushers' Association, and we do further authorize and empower the said arbitration committee, or a quorum of them, or, in case of appeal, said executive committee, or a quorum of them, to arbitrate, award, adjust, and determine the differences now existing between us in the aforesaid matter.

"And we do further covenant and agree that the award to be made as aforesaid by the said committee of arbitration, or, in case of appeal, by said executive committee, shall in all things by us, and each of us, respectively, be well and faithfully performed; that we will stand to, abide by and fulfill the same, and that we will pay whatever sum of money may be awarded as aforesaid.

"And, further, that we will abide by all the rules and regulations of said Texas Cotton Seed Crushers' Association, in relation to arbitration, and herewith deposit with the secretary of the association, as required, the sum of fifty dollars, to cover the cost of this arbitration.

"And we do further agree that the awards of the arbitrators, as aforesaid, whether made by the committee of arbitration or the executive committee, if made in writing and signed by the arbitrators, and attested by the secretary of the Texas Cotton Seed Crushers' Association, may be entered on the records of the court of jurisdiction in the state and county in which we reside, and that judgment may be had thereon in accordance with the terms thereof."

That the differences between appellees and appellant were submitted to the arbitration committee of said association, resulting in an award in favor of appellees in the sum of $1,000. That appellees made motion for rehearing before said arbitration committee, which was refused. Thereupon, appellees appealed to the committee on appeals as provided for by the rules of said association, and that said committee on appeals refused to approve said award, and ordered the arbitration committee to reopen and rehear the case, which was done, said committee again awarding only the sum of $1,000 to appellees. From the second award the appellees again appealed to the committee on appeals, which appeal resulted in said committee reversing the arbitration committee and rendering its award in favor of appellees against appellant in the sum of $12,710 and all costs of arbitration. Cost of arbitration was specially pleaded as an item of liability against appellant. Appellees prayed for judgment against appellant for the amount of said award rendered by the committee on appeals and all costs, and, in the alternative, if the arbitration was for any reason found void, that appellees have judgment against appellant for the damages caused appellees by the breach of said contract.

Appellant answered appellees' petition by general and special exception, and denied the making of the contract therein alleged. It further pleaded that a dispute arose between appellees and appellant with reference to said alleged contract of sale; that both parties were members of said association; that said dispute was submitted to the arbitration committee, and said arbitration proceedings were taken and had in the order set out in appellees' petition. It further alleged that it acquiesced in the award of the arbitration committee, and offered to pay the sum of $1,000 so awarded. It further alleged that the action of the committee on appeals in ordering the arbitration committee to reopen and rehear the case was illegal and void, because, under the constitution and by-laws of said association, the committee on appeals was required to pass on the case as sent up to said committee on appeals by the arbitration committee without hearing any further evidence, and that it had no power or authority to order the arbitration committee to reopen the case and hear other evidence, which could then, in turn, be heard by the committee on appeals, and that the effect of their illegal action was to leave the original award for the sum of $1,000 in full force and effect.

Appellant further alleged that the action on the part of the arbitration committee, after the committee on appeals had illegally undertaken to refer said cause back, and also the findings and award of the committee on appeals, were wholly illegal and void, and that the arbitration committee exhausted its power and authority when it overruled the original application of appellees for a rehearing, and that it had no further power or authority to take and hear evidence for the consideration of the committee on appeals, and that the committee on appeals exhausted its power over the controversy when it made its first decision.

Appellant set up in detail in its answer the provisions of the constitution, by-laws, and rules of the association upon which it relied, all of which are set out in the court's findings to be hereafter adverted to.

Appellees replied by supplemental petition: denied that the committee on appeals exceeded the powers conferred upon it by the constitution and by-laws of the Texas Cotton Seed Crushers' Association in reversing the decision first rendered by the arbitration committee, and requiring said committee to rehear said cause, and denied that the subsequent proceedings leading up to and including the final award in favor of appellees in the sum of $14,557 were not authorized by and in accordance with the constitution and by-laws of said association; and, further, that, if they are mistaken in this, they aver that appellant made no objection to the second consideration by the arbitration committee of the matters and things submitted to them by the agreements to arbitrate made by the appellees and the appellant, and waived all objection to the second hearing; that the appellant, having participated in the second hearing by the arbitration committee, thereby waived any objection it might have had to the jurisdiction of said arbitration committee, and waived any irregularities, if any, in such proceedings, or as to the right of said arbitrators to rehear said cause, and thereby impliedly, if not expressly, waived all objections to appellees' right to appeal from the last award.

Trial resulted in verdict and judgment for appellees against appellant, Russell-Coleman Oil Mills, formerly the Russell-Coleman Cotton Oil Company, for the sum of $14,557, from which this appeal is prosecuted.

The trial court, at the request of appellant, filed its conclusions of law and fact, finding as conclusions of fact, among other things, substantially,

"First. That the plaintiffs were partners and that the defendant was a corporation, of which C. H. Bencini was the general manager during all the period that these transactions were had.

"Second. That the plaintiffs and defendants were members of the Texas Cotton Seed Crushers' Association, as pleaded by the plaintiffs, and that the Texas Cotton Seed Crushers' Association had a constitution and by-laws which had created a board of arbitration to pass upon all controversies between its members, and an appellate board to which appeals might be taken from the arbitration board, viz. rule 41, being as follows:

"`Section 1. In case of differences between members of this association that cannot be amicably adjusted promptly, same shall be settled by...