6 Ohio C.C. 247 | Oh. Circ. Ct. | 1892
Lead Opinion
The petition in this case was filed by the plaintiff through its solicitor, Mr. Horstman, under the provisions of section 1777, Rev. Stat., and by the authority of the common council, setting out certain facts claimed to exist, and on which he prays the court to enjoin the Cincinnati, New Orleans and Texas Pacific Railway Company and the Trustees of the Cincinnati Southern Railway from appointing arbitrators, and from all proceedings looking to an arbitration of certain questions on which an arbitration has been demanded by said railway company under the provisions of clause 14 of the lease made to it of the Cincinnati Southern Railway by the trustees thereof, which lease was dated October 18, 1881. On the filing of this petition in the court of common pleas of this county, a temporary injunction was allowed, but this injunction was afterward dissolved, and from the interlocutory order dissolving the same, the plaintiff appealed to the circuit court. In this court a further temporary restraining order was allowed, and the question whether the court of common pleas properly dissolved the injunction, or whether it should now be continued, has been submitted to us on the allegations of the original petition, and of an amendment thereto filed before the ease came into the circuit court.
There is no controversy as to the facts, no answer having been filed, and the question submitted to us is, whether, on the allegations of the petition, the plaintiff is entitled to the relief sought. We state the conclusions at which we have
'
.This claim so made, we think, is not well founded. There-is no express statement in any of the different statutes passed by the legislature of this state, upon this subject-matter, that the trust conferred upon this board by such laws should cease and terminate upon the sale or lease of the road, or at any other fixed or uncertain time. Counsel for the plaintiff have argued to us that, in respect to the continuance of such trust, the Trustees of the Cincinnati Southern Railway stand in the same position as did the Commis—
But we are not left to mere inference as to the intent of our General Assembly as to this matter. Since the-lease of this railroad in 1881, several statutes have been enacted, which in our judgment clearly recognize the fact that these Trustees are not fundi officio. On the 22d of April, 1885 (sec. 8336,-10, Rev. Stat.), they were expressly authorized to expend certain money in filling up and improving for the use of the railway so leaded, lands in the city of Cincinnati purchased by them for terminal facilities for such road. And on March 12, 1887 (sec. 8336,-11), the mayor of the city and the president of said Board of Trustees were authorized in a certain event to execute, on behalf of the city, a-deed for such railway, to be attested also by the signature of the Board and the seal thereof. ' And still later, on March 8,. 1889, (sec. 8336,-14), such Board of Trustees, with the approval of the Trustees of the Sinking Fund, was authorized' on certain terms to extend the lease of the road, for any length of time, and power was granted to do this within three years from the passage of the law.
It seems manifest to us from these enactments, that the legislature, which has the right to continue the powers of these-
Clause 14 of the lease of the road, so far as it is necessary to ■quote it, reads as follows : “ Clause 14. It is further mutually covenanted and agreed by the parties hereto, that all -questions of difference arising between the parties hereto in relation to the construction of this agreement, or otherwise in reference to the rights of the parties under this lease, shall upon the written demand of either party, stating in such demand the question or questions claimed to be in •dispute, be submitted to the arbitration of five disinterested .arbitrators,” etc. And the demand for arbitration made-
“ First — Compensation to said railway'for damages suffered', losses incurred and expenditures made by it by reason of the failure of the Trustees of the Cincinnati Southern Railway Company, and the City of Cincinnati, to provide terminal facilities at Cincinnati, necessary and proper for the transaction of the business of said railway company, as lessees of the said Cincinnati Southern Railway.
u Second. — Damages sustained, losses incurred, and. expenditures made by said railway company by reason of misrepresentations claimed by it to be false and fraudulent, made by your. Board and said City, at and before the making of the-lease aforesaid, touching the kind, quality, and condition of ‘the roadbed, tracks, bridges, trestles and other structures-of and belonging to said Cincinnnati Southern. Railway, claimed by this company to have been made for the purpose of inducing it to enter into said lease, and in reliance-upon the truth whereof said lease was executed by said' company.”
On the points thus raised we may say, 1st: We are of the opinion that the claim of the lessees thus asserted, arising out of the alleged breach by the Trustees and the City of the provisions of the lease for the expenditure of certain money, in the purchase of terminal facilities for the railway so leased, is fairly covered by the arbitration clause. By the lease the Trustees stipulated that to the extent of the trust funds provided by law for that purpose, being the residue of the sum of a certain fund of $300,000, they would provide lands in the-city of Cincinnati for such terminal facilities. It is concededi by the petition of the plaintiff, as we understand it, that $10,-000 of this residue has not been so expended by the Trustees, and no claim was made in the argument of the counsel for the City, or by any one, that under this clause 11 of the- lease, such Trustees were not bound to expend the whole of such residue, whatever it might- be, for the purpose specifically stated there
But coupled with this, is a demand for such arbitration on another claim which they assert, that is, for damages sustained, losses incurred, and expenditures made by them, by reason of false and fraudulent representations made as is claimed, by the Trustees and the City before the lease was executed, as to the condition of said railway. ¥e are unable to see that this raises a question, in relation “ to the construction of this agreement, or otherwise in reference to the rights of the parties under this lease,” which questions only, the parties have agreed to arbitrate. It does not call for the judgment or decision of the arbitrators to be chosen, as to the meaning of the lease or of any part of it. Nor does it call for such judgment in reference to the rights of either party under the lease. It may be true that if such right had been promptly asserted in a court of equity and full proof made of such false and fraudulent assertions which the other party had a right to, and did rely upon, such lease so procured, might have been avoided by the court, and the lessees, so far as it could be done, be restored to their original position. Or if they chose for any reason to retain the property leased, it is possible that on proper proof
If these conclusions be correct, what is the result ? Does the fact that one of the subjects as to which arbitration is demanded, can not under clause 14 be properly submitted to the arbitrators, afford a good, ground to a court of equity in an action brought for that purpose, to enjoin any arbitration under the present demand therefor? We think not. One of the questions to be submitted being proper, the fact that it also-seeks arbitration, as to one which does not eome within the contract of submission, ought not to prevent the arbitration from proceeding as to the other.
The nest question which ^arises is whether the court should enjoin the defendants from proceeding to arbitrate this second question. On this point we have heard able arguments, and many cases have been cited to us from courts of the highest authority. We do not deem it necessary to quote from or discuss them at length, but simply say, that in the opinion of the-majority of the court, the great weight of reason and of authority is, that such relief should not be granted — that an appeal to a court of equity to prevent an arbitration, which the parties in certain cases have stipulated for, on such grounds as are assigned here, is premature, and should be denied. Why should the court presume that the arbitrators, when chosen, will undertake to hear evidence and make an award on the merits of a claim, when the terms of the submission under which they proceed defines and points out the character of the questions which are to be adjudicated by them, and an inspection and construction of which contract would show that their award was asked as to a matter which the parties have not
Dissenting Opinion
(dissenting).
I agree with the majority of the court on two propositions : First, that the office of the Trustees is still in existence, and held by the present Trustees. Second, that the claim to arbitrate for damages arising from fraud in the original contract upon which the lease was based, does not come within the meaning of the clause for arbitration in the lease. But I dis- . sent from it on two other particulars :
First — I am of the opinion that the claim of the lessees for compensation to said railway for damages suffered by losses incurred and expenditures made by it by reason of the failure of the Trustees of the Cincinnati Southern Railway and the City of Cincinnati to provide terminal facilities at Cincinnati necessary and proper for the transaction of the business of said railway company as lessee of said Cincinnati Southern Railway, is not a proper subject for arbitration upder the terms of the •lease.
By clause 11 of the lease it was covenanted between the parties hereto “ that the Trustees would to the extent of their trust fund, provided by law for that purpose, being the residue of the sum of three hundred thousand dollars as provided in the act of the General Assembly of the State of Ohio, passed April 9, 1880, provide lands in the city of Cincinnati for workshops, depots, and other terminal facilities and rights of way thereto. Provided, that said Trustees of the Cincinnati Southern Railway shall, as between the parties hereto, be sole judges
The lease does not provide, as is claimed in the notice of arbitration that these terminal facilities to be furnished by the-Trustees shall “ be necessary and proper for the transaction of the business of said railway company as lessee of said Cincinnati Southern Railroad.” It only provides that to the extent of their trust fund, to-wit, the residue of three hundred thous-* and dollars, they shall provide “ lands and other terminal facilities thereto.” The location, extent, and amount to be expended therefor by the trustees, is not made by the terms of the lease a subject of arbitration, but it is expressly provided that the trustees shall be the sole judges of the location, extent of such lands and rights, and of the amount to be expended there- - for.
Now, it is claimed by the Trustees, and is not disputed, as I. understand, that they have expended $290,000 in such terminal facilities at Cincinnati, leaving the sum of only $10,000-unexpended. They do not deny that they are to use that amount for that purpose. There is nothing, therefore, in regard to this to be arbitrated. And even if they disputed it,, or the amount expended, or the propriety or place of expendi- - ture or extent of it, arbitration is not the plan which the parties themselves have fixed to decide it. Of these the Trustees • are made the sole judges. And if by fraud or collusion, or by violation of their trust, this money-is not properly appropriated and used, the lessees are remitted to such other remedy at law or in equity as may be appropriate.
Being then, in my opinion, nothing whatever to arbitrate,, it would seem to me to be trifling with a great institution like the Southern Railroad to bring the force which is proposed to arbitrate this question. By the terms.of the arbitration,, neither of the five arbitrators shall be tax-payers nor residents-of the city of Cincinnati. The lessees have selected two, and called upon the Trustees to select two others. The two which the lessees have selected are men of distinguished char—
Second — Any claim barred by the statute of limitation can not be regarded if opposition be made by the party sought to be charged. See Russell on Arbitration, 207 ; 1 McLel. & Y. 160; Morse on Arbitration, 137; 2 California, 195.
If, as I contend, neither of these matters are subjects for arbitration, I think the Trustees should not be put to the great expense and trouble of going through a protracted hearing upon subjects which might probably be brought before the court afterward on exception to the award of the arbitrators, and be held as without any jurisdiction for them to determine. I am aware that there are many authorities of high character holding that arbitrators should not be enjoined from proceeding in an arbitration, but in my opinion this case is . analogous to those where parties are enjoined from vexatious suits and the multiplicity of suits, and an injunction should . issue.