CHAPTER XVIII. OF ARBITRATION. SECTION 1. General Principles. THERE are many cases in which it is expedient to submit a matter in controversy to arbitrators selected by the parties, rather than to litigate in the courts. Especially is this true in controversies between friends, family disputes, cases of long and involved transaction, which can not be conveniently investigated in court, and wherever a judicious referee may act the part of a pacificator. In all ordinary cases a single referee, of such character and capacity as to control the confidence of both parties, familiar with the law and the rules of evidence, is in many respects the most convenient, efficient and satisfactory tribunal for arbitration. And wherever, for reasons growing out of the peculiar nature or circumstances of the case, it seems desirable to the parties to have as referees one or more practical men, conversant with matters of the same nature with that which is to be passed upon, it is still desirable that a chairman should be selected having the qualification above referred to. One of the most serious objections to a reference is, the difficulty of bringing the parties, counsel, and referees, together; and this difficulty is manifestly increased by enlarging the number of the referees. There are several modes of procuring arbitration, the least desirable of which is by parol submission and award. This is, where the agreement to refer proceedings to the referees, and their final finding and award, are all by words exchanged between the parties, without writing. It will be readily seen, that the whole matter is thus left subject to all the uncertainties which attend parol evidence, and, unless the award is so fortunate as to satisfy all parties, it usually, instead of putting an end to strife, is the beginning of real litigation. Such an award concerning real estate is void. Another mode of reference is by agreement in writing, which may be in the form of mutual bonds, to abide such award as shall be made by the referees, (naming them,) or by a simple written agreement without bonds. The award in either case should be in writing, and may be specifically enforced by a court of equity in its discretion, if it requires the doing of some specific thing rather than the payment of money, as the conveyance or release of land. Such a submission may be made of conflicting claims to real estate, and the award may be specifically enforced by decrees in equity. A third mode of arbitration is, by submission in conformity with statute regulation existing in most of the States. Most of these statutes provide, substantially, that all controversies, which might be the subject of an action at law or of a suit in equity, may be referred to one or more arbitrators. Some of the statutes confine this form of remedy to personal actions, (as in Massachusetts.) Where this is the case, disputes concerning titles to real estate cannot be submitted in this form, but must be referred by written agreement or mutual bonds. These local statutes may be easily referred to by parties desiring to avail themselves of their provisions; and as they vary in the different states, any recital of them here would be only likely to mislead. Another mode of submission is, by rule of court. This takes place upon the order of the court, whenever the parties agree that an action pending upon the docket shall be so referred. Names of the arbitrators are usually entered upon the records by the clerk, and the action is continued to await the award. On the application of either party, (though it is properly the duty of the plaintiff,) the clerk issues a rule of reference, which should at once he handed to the arbitrator, or, if more than one, the chairman, whose duty it is to fix the time and place of hearing, and give reasonable notice thereof to the parties or their counsel. Where there is more than one arbitrator, they must all meet and hear the parties and unite in the award, unless it is otherwise provided in the agreement of arbitration. It is. of course, competent for the parties, to provide that the award of the majority shall be binding. Arbitrators are not bound by legal rules in the admission or exclusion of evidence, unless it is so stipulated in the agreement of submission but they may hear such evidence as in their judgment will tend to aid them in arriving at a correct result. Defects in the pleadings and any irregularities in the action are waived by a submission to arbitrators in either of the modes named. Where there is a general reference of the whole matter in dispute, including law and fact, an award will not be set aside for an erroneous decision of law, unless the error appears upon its face; and wherever it appears that the law was intended to be submitted, parties are left to the decision of the arbitrators; as, where the referee is allowed a claim, barred by the statute of limitation, though it was pleaded, and their award was accepted. (Portland Manufg. Co., vs. Fox, 18 Me., 117.) Where a case is submitted to arbitrators, "to be decided according to the principles of law," the law and the fact are both submitted, and the referees are the final judges of both, and are not required to report the facts or their conclusions. All awards are either made returnable to some court, or, if either party refuses to perform, must be enforced by an action at law or a bill in equity. It is therefore manifest that the courts have certain powers over them, to confirm or destroy them; and the extent of those powers, and the grounds upon which the courts ought to interfere to exercise them, have been made the subject of litigation and judicial discussion. The whole subject was elaborately reviewed by the late Chief Justice Shaw, in the case, Boston Water Power Co., vs. Gray, 6 Met., 131. It was also considered in Ward vs. The American Bank, 7 Metc., 486. The general results arrived at by the court, may be stated substantially as follows:-Usually, by a submission parties confer upon an arbitrator the power of deciding questions of law as well as of fact, and, therefore, the award must be conclusive, with very limited excep tions. These exceptions are stated by the court as follows: First, When the arbitrators in their award refer questions of law to the decision of the court, either declining to decide them or deciding them subject to such revision. Second, When it appears, by the award itself, that the arbitrators intended to decide according to law, but decided erroneously therein. Third, Where the arbitrators, through the fraud or mismanagement of one of the parties, or through mistake or inadvertence, acted upon the belief of the truth of some fact which was not true, and thus came to a result which, but for that mistake or inadvertence, they would not have arrived at. As to all matters of fact, which were controverted before the arbitrators and made the subject of discussion and settlement by them, their decision is conclusive, and the evidence will not be examined by the court. It will be seen, that the effect of the finding of arbitrators is in most respects final and conclusive upon the parties, or may be made so by judgment or decree of the proper court. In this respect it differs greatly from the effect which is given to the finding of persons appointed by the court, who are sometimes called "referees," sometimes a "committee," and sometimes a "master," whose duty it is to aid the court in finding facts, and whose finding may be supplemented by the court, if they see fit, upon the hearing of additional evidence, or may be set aside for error of fact, upon a proper case made. Arbitrators constitute an independent tribunal, exercising final jurisdiction between the parties, while these latter officers merely assist the court in arriving at a judicial decision. SECTION 2. Of the Award. An award, to be good, must be final and conclusive between the parties. It must be certain, or capable of being reduced to a certainty, in its settlement of the rights of the parties. It is the duty of arbitrators to pass upon all matter submitted; and they must not embrace in their award any matter not included in the submission. The statutes and agreements of submission usually authorize the arbitrators, to find and award, not only upon the principal subject-matter submitted, but also as to costs, to be recovered by one party of the other, or to be divided between them. It is believed to be the general rule, that arbitrators have this power upon agreements of submission, which are silent upon the subject of costs. SECTION 3. Of the Power to Revoke the Submission. Submission to arbitration, voluntarily entered into by the parties, without the aid of statute regulation or rule of court, may be revoked by either of the parties, at any time before the final publication of the award; for, as we have seen in the Chapter on Insurance, an agreement of arbitration in whatever form it may be put, cannot take away the jurisdiction of the ordinary courts of law in the matter. Statutes usually provide against such revocation, and our courts have generally held that a submission under a rule of court is irrevocable, except in cases where the court permits it to be set aside for cause shown. The death of either party would amount to a revocation of a submission made out of court, unless special provision for that event is made in the agreement. While submissions under agreement of parties, without statute regulation or order of court, are thus revocable at the pleasure of either party before final award, it should be understood that this amounts to a breach of the agreement to submit, and will render the revoking party liable in damages, which should include all the expenses incurred by the other party about the submission, and all that he can prove he has lost in any way by the revocation. of 1. FORM OF SUBMISSION TO ARBITRATION. Whereas a controversy is now existing between and Now, therefore, we, the said of concerning an do alleged indebtedness of the latter to the former: and hereby submit the said controversy to the decision and arbi |