Shipman v. Fletcher

• Decision Date: 02 December 1886
• Citation: 82 Va. 601
• Parties: SHIPMAN v. FLETCHER.
• Court: Virginia Supreme Court

82 Va. 601

SHIPMAN v. FLETCHER.

Supreme Court of Appeals of Virginia.

December 2, 1886

Appeal from decree of circuit court of Alexandria city, rendered 22d September, 1884, in the cause of John J. Shipman against William Fletcher.

The object of the suit was to annul an award for misconduct of arbitrators, going beyond the submission, and committing gross errors to the detriment of the complainant. The decree being adverse, he appealed to this court.

Opinion states the case.

W Willoughby and John W. Daniel, for the appellant.

Robert Christy and Charles E. Stuart, for the appellee.

OPINION

LACY J.

The bill was filed to set aside an award upon the ground of mistakes and errors contained therein; that the award was in excess of the jurisdiction of the arbitrators and beyond the submission and for misbehavior on the part of the arbitrators, in excluding the parties in interest from the presence of the arbitrators during their sittings and hearing testimony in their absence, admitting the representative of one side and excluding the other side, altogether at times and in leaving the examination of the principal matters to the determination of experts employed to assist them, and not themselves determining the questions involved. The circuit court held in the decree complained of: First. That there was no misbehavior on the part of the arbitrators; second. That the award was not in excess of their jurisdiction; third. That there is no such want of equity in the award as would justify the interposition of the court. The said circuit court holding the said award to be final and binding as between the parties thereto, and a final settlement of the matters in controversy in contract 561 (this being a contract on the public works in the District of Columbia) between the plaintiff and defendant, and of all matters in controversy between the plaintiff and defendant, except those arising under the James Creek Canal contract, No. --, (this was another contract concerning the public works in the District of Columbia), and the matters concerning this were referred to a commissioner for account and report, and is not involved in this appeal, but is the subject of a distinct controversy. From this decree this appeal was taken.

The first question is as to the conduct of the arbitrators sitting to decide the questions at issue. The parties plaintiff and defendent, in the circuit court, being engaged as partners or joint contractors in the work embraced by contract 561, and its extensions, amounting in the aggregate cost to the District of Columbia to the sum of $237,069.82, entered into the following agreement:

" WASHINGTON, D. C.,

February 7, 1887.

We, the subscribers hereto, each for himself, hereby agree to abide the award and decision made by F. L. Moore and John A. Baker in the matters submitted to them this day by us.

W. FLETCHER,

JOHN J. SHIPMAN."

The award was as follows:

" In the matter referred to us for arbitration on February 7, 1877, by John Shipman and William Fletcher, we, the subscribers hereto, certify our award. We find that the said John Shipman is indebted unto the said William Fletcher in the amount of twelve hundred and ninety-one dollars (1,291.96), and that the amount covers and includes all matters of indebtedness of every kind whatsoever due by each to the other at the date aforesaid, except any matters or accounts that may exist between them on account of work done on what is termed James Creek canal, which were not considered by us. And we further find and decide all moneys or bonds or other payments for work done on contract number five hundred and sixty-ene (561) and its extensions, except amount for extra hauling of earth claimed by said Shipman, which said hauling was done prior to October 1, 1874, shall be equally divided between the said John Shipman and William Fletcher.

JOHN A. BAKER.

F. L. MOORE.

Washington, D. C., March 15, 1887."

A large amount of testimony was taken in the form of depositions, which were submitted and considered. It is proved by these that the submission was on the 7th of February, and the award on the 15th of March, 1887; that the sessions were at night. When finding the books and accounts voluminous and complicated, two experts, J. W. Daniels and John Morris, were selected to assist the arbitrators.

These expert accountants found the total sale of bonds made to cover expenses, $142,367 42

Balance of bonds remaining as net proceeds, 94,702 40

Total, $237,069 82

Cash realized on these bonds sold and on the road being: From bonds, $100,114 22

On the road, 10,980 05

$111,094 27

Outstanding liabilities:

Fletcher's account, $2,727 08

Shipman's account, 1,288 69

$4,015 77

To meet which, bonds at ninety cents had to be sold to the amount of $5,736.81, which, deducted from the remaining unsold bonds of $94,702.40, left a surplus of $88,965.59 in 3-65 bonds as the net proceeds to be divided between the parties. This result was stated by the said experts in a paper marked F. L. M. and filed with the deposition of Moore. The paper began with a statement showing a balance due Shipman on various accounts, beginning with one-half of profit on contract No. 561 and extension, $44,471 23

Cash items, 1,840 98

Interest, 1,144 86

1/2 of $2,963.03, work prior to contract, $1,481.51. Due Shipman, $48,938 58

Received in bonds, 46,038 25

$2,900 33

This account is made up of these general statements, and was handed to the arbitrators. Mr. Moore being asked how he arrived at the first item in that memorandum said: " Only from the fact that these books were made up by Mr. Daniels and another clerk (John Morris), and their statement of what these books showed was taken as a fact when neither party objected to it. We had not time to go over the books ourselves and these men were employed to make out this exhibit of what the books showed. I think one man employed one man, and the other, the other man. They were employed by somebody, I suppose by Mr. Fletcher and Mr. Shipman, when we said that we had not time to go over all this business of such an immense amount as it was. " It thus appears that the arbitrators did not themselves inspect the books, nor examine the vouchers, but that when the expert accountants employed to make a statement from the books, made up this result in a condensed and general form, consolidating items and striking balances, they accepted this result without examination or inspection of books or vouchers, and rendered their award, examining only what came in after $2,900, as it appears in the account. And this, as we understand it, is not denied, but is established on every side.

It is also proved in the cause that Shipman was excluded against his protest from the presence of these judges, and also Fletcher, and the case proceeded in their absence. But it further appears that a certain person, who was supposed by Shipman, and doubtless by the arbitrators, to be an employee of the joint contractors, named Birch, was retained in the room where the arbitrators sat all the time explaining everything. This Birch has been proved in this case to be a partner and sharer of the profits with Fletcher. And he appears to have been much relied on by these arbitrators; so that in effect, while Shipman was excluded, Fletcher was doubly present--present in disguise and in the person of a man of far more intelligence and force than himself. The excuse for excluding both Shipman and Fletcher is that they were quarrelsome and noisy. Fletcher was in a position where he could afford to quarrel and be excluded, Shipman was not.

When the result was announced both parties were surprised, and nobody satisfied apparently, and Birch promised Shipman that Fletcher would set it aside, and they would settle it themselves.

The certificates for payment stood in the name of Shipman, the original contractor, and the money could not be drawn except by Shipman or his attorney; in fact, Birch induced Shipman to give him the requisite power of attorney, upon the promise that Fletcher would set...