
    Albert A. Cobb et al., Resp’ts, v. The Dolphin Manufacturing Company, App’lt.
    
      (Court of Appeals,
    
    
      Filed February 28, 1888.)
    
    1. Arbitration—Submission—Award—When justified by terms oe submission—Contract.
    The parties to this action entered into a contract in relation to certain bales of jute butts, by which the i laintiffs agreed to sell and the defendants agreed to purchase “ One thousand bales, g arantecd bagging quality, per Knight Commander, at three and seven-sixteenths cents per pound, actual gross weight, duty paid cash.” Of the 1,000 bales, 4U0 were delivered to and received by defendants, as a fulfillment, pro tanto, of the contract. The balance of 6 0 was offered by plaintiffs and refused by defendants on the ground that they did not com. ly with the terms of the contract. 1 he parties entered into an agreement to submit their differences to arbitration, and the terms of the submiss'on were substantially, as follows: “Whereas the undersigned entertain difference of opinion as to the right of sellers to deliver, and the obligation of buyers to receive the six hundred bales. * * * Now for the purpose of arriving ata just and equitable settlement as to the rights and obligations of said parties, under said contract, * * * the undersigned mutually agree to choose and appoint, each one referee, they to choose a third, who shall render a decision as to the rights and obligations of the parties under the-contract. * * * The undersigned mutually agree to promptly accept and execute the terms and conditions of the division, that said arbitrators shall make.” Upon such submission the arbitrators made an award substantially, as follows: “ In accordance with instructions of the parties, we, the undersigned, have examined the 600 bales, and decide that an equitable settlement, under the contract, would be an allowance of one-sixteenth of a cent, per pound, to the buyer. We do not consider them. Of bagging quality, but a high grade of paper quality.” Held, that the submission was to he regarded as one relating to the rights and obligations of the parties under the contract, but the decision regarding such rigid 8 and obligations, was to be a just and equitable one under all the circumstances of the case, and the strict, technical and legal rights and obligations of the parties, under the contract, were to be varied in accordance with the expressed purpose of the submission in obedience to just and equitable principles. That the submission fully justified the av ard.
    3. Same—Not ambiguous—Extrinsic evidence not admissible.
    
      Held, that the submission was not ambiguous and therefore, extrinsic evidence to enable the court to put itself in the place of the arbitrators, was not admissible.
    Appeal from a judgment of the general term of the court of common pleas, in and for the city and county of New York, directing a verdict for plaintiff on exceptions directed to be heard in the first instance at general term.
    
      Wm. Henry Arnoux, for app’lt; Austen Q. Fox, for resp’ts.
   Peckilam, J.

On the 13th of April, 1880, the parties to this action entered into a contract in relation to certain bales of jute butts, by which the plaintiffs agreed to sell and the defendant agreed to purchase “1,000 bales guaranteed bagging quality per Knight Commander, at (3 and 7-16) three and seven-sixteenths cents per pound, actual gross weight, duty paid, cash.” Also “1,000 bales merchantable quality per Knight Commander.” In the same contract were agreements to sell and purchase various other bales of jute from other ships and at other prices. The only question in this case, however, arises in regard to the 1,000 bales of guaranteed bagging quality per “Knight Commander.”

When the vessel arrived the 1,000 bales of .merchantable quality it would seem were received and delivered and were satisfactory. At any rate no question arises as to them. Of the contract for the sale and purchase of the 1,000 bales, of guaranteed bagging quality 400 bales were delivered to and received by the defendants as a fulfillment pro tanto of the contract in question. The balance of 600 bales was offered by plaintiffs and refused on the ground that the same did not comply with the terms of the contract. The plaintiffs claimed that they did, and that the defendant was bound to receive and pay for them at the contract price.

In this condition of things the parties entered into an agreement to submit their differences to arbitration, and the terms of the submission were as follows: “Whereas, the undersigned, Dolphin Manufacturing Co., of Patterson, N. J., and Albert A. Cobb & Co., of Boston, Mass., entertain difference of opinion as to the right of sellers to deliver, and the obligation of buyers to receive, 600 bales of jute butts, marked J. C., under sale contract made by G-. Tuckerman, broker, dated April 13, 1880. Now for the . purpose of arriving at a just and equitable settlement as to the rights and obligations of said parties under said contract, the said Dolphin Manufacturing Co. and the said A. A. Cobb & Co. hereby mutually agree, within three days from this date, each to choose and appoint one disinterested party who shall act together as referees. Should the two referees so chosen fail to agree, the said two referees shall choose a third party to act with them and render a decision as to the right and obligations of the undersigned under the before named contract. Said decision to be made and communicated to the undersigned within ten days from this date.

“The undersigned hereby agree to promptly accept and execute the terms and conditions of the decision that said referees, or either of them, shall make. Should said Dolphin Manufacturing Company fail to choose a referee as above, within said three days, said company agrees to receive and pay for the said six hundred bales jute butts at the price named in the contract. Should Cobb & Co. fail to choose a referee as above, within said three days, said Cobb & Co. agree to abandon all right to make delivery to said Dolphin Manufacturing Company of said six hundred bales of jute butts.”

Upon that submission the arbitrators made an award, which is as follows: “In acordance with instructions from Messrs. A. A. Cobb & Co., of Boston, and the Dolphin Manufacturing Company, of New York, we, the undersigned, have examined six hundred (600) bales jute butts, marked red J. C., at Wall street stores, Brooklyn, ex ship Knight Commander, and decide that an equitable settlement under the contract would be an allowance of one-sixteenth (116) of a cent per pound to the buyer. We do not consider them of bagging quality, but a high grade of paper quality.”

When that award was made the defendants refused to .abide by it on the ground, as they alleged,. that no such power was contained in the submission to the arbitrators; that the sole question submitted tc them was whether the defendant was bound to receive the six hundred líales of jute in question as compliance with the contract, and that question depended upon the fact as to whether the six hundred bales did or did not comply with the guaranteed quality; that as the arbitrators found that the jute did not comply with the terms of the contract as to quality, that was an end of the question so far as they were concerned, and they had no right to go further and order the defendant to pay for the jute which was not up to the quality contracted for.

An examination of the whole case shows, as we think, that the contention of the defendant as to what was submitted to the arbitrators is not well founded.

The defendant, I think loses sight of the language of the submission, that it is made for the purpose of arriving ata just and equitable settlement as to the rights and obligations of the parties under the contract. It is too narrow a view of the purpose to say that it is strictly confined to the question whether there was a right of the sellers to deliver and an obligation of the buyers to receive these goods. This construction gives no weight whatever to the words “just and equitable settlement.” The submission is, I think, to be regarded as one relating to the rights and obligations of the parties under the contract, but the decision regarding such rights and obligations is to be a just and equitable one under all the circumstances of the case. This provision must be held as of some force, and in order to give to it the proper force, it must be held to qualify those rights and obligations so that a decision as to them shall be subject to the qualification that it shall be just and equitable.

Thus construed, the decision is under all the circumstances to be a just and equitable one, and the strict, technical and legal rights and obligations of the parties under the contract are to be varied in accordance with the expressed purpose of the submission and in obedience to just and equitable principles. Construing the submission in this way we think it fully justsfies the award.

We have looked at the various cases cited by the learned counsel for the defendant and we find none which runs counter to this view of the extent of the submission.

Considerable stress was laid on the argument upon the fact that there was no evidence given before the arbitrators in regard to the value of this jute, which it is claimed would naturally have been given in case it was supposed that the arbitrators were to have power to make a reduction in the price of the jute, while decreeing an acceptance of it on the part of the defendant. But it would appear from the case and from the award of the arbitrators that they were men who were judges of the article in question and who were to see the jute in dispute for the purpose of determining the question whether or not it came up to the standard of quality called for in the contract. This naturally explains why no evidence was given before the arbitrators as to the value of the jute in question. Upon the trial, Mr. Ray, one of the arbitrators, was called as a witness for the defendant and testified that the other arbitrator was dead. This question was then put to Mr. Ray: “Did you make the award of a deduction before receiving the letter from Cobb & Co.?” Which he answered by saying that he did not. He was then asked: Q. “Would you have made tie award in so far as you- made the deduction of this award if you had not received the letter from Cobb & Co.?” Under plaintiffs’ objection that the question was irrelevant it was excluded and defendant excepted.

It is now claimed that the learned trial justice_ erred in excluding this evidence, on the ground that extrinsic evidence is admissible to enable the court to put itself in the place of the arbitrators, whereby it can fully comprehend . the intention and situation of the parties. Various cases are cited by the learned counsel for the purpose of showing that where writings, are not entirely intelligible and unambiguous, párol evidence may be given of the situation of the parties at the time the contract was entered into, so that the court by being placed in their situation may from knowledge thus acquired derive ability the more properly to construe the writings.

There is no doubt about such a principle, but we do not see that it has the least application to this case. If the writing were ambiguous all the facts that surrounded the parties at the time when this submission was entered into, and which would properly give color or construction to the submission itself, would have been admissible in evidence for the purpose mentioned. Here the writing is not, as we think, at all ambiguous, and if it were, the evidence offered was simply a proposition to call for what would have been the act of a party if something had not occurred that as matter of fact did occur. In other words, a mere hypothesis is presented and the opinion of the witness is asked as to what his action would have been in such a case. This was clearly inadmissible.

Under all the circumstances, we think the judgment was right and should be affirmed, with costs.

All concur, except Andrews, J., not voting.  