Jones v. Bishop
1920 Ill. App. LEXIS 287
Ill. App. Ct.
1920
Check Treatment
Mr. Justice Gridley

delivered the opinion of the court.

It is contended, in substance, by counsel for defendant that the judgment should be reversed (a) because an adjournment of the meeting of all three arbitrators was talcen on December 6 or 7, 1916, to meet again within one week for further proceedings, and during the interval two of the arbitrators reached a decision and signed an award without consulting the third arbitrator or giving him any opportunity of participating in the proceedings which resulted in such action, and (b) because the award does not conform to the submission.

In Morse on Arbitration and Award (Ed. 1872) the author says on pages 151-152:

“It is an imperative rule that where the submission is to several arbitrators jointly, all must act together during the proceedings. * * * All must be present throughout each and every meeting, equally whether the meeting be for hearing the evidence or arguments of the parties or for consultation or determination of the award. The disputants are entitled to the exercise of the judgment and discretion, and to the benefit Of the views, arguments, and influence, of each one of the persons whom they have chosen to judge between them; and they are entitled to these, not only in the award, but at every state of the arbitration.” (Citing Smith v. Smith, 28 Ill. 56, 60.) “No exception to the general rule obtains even where a statutory provision, or a stipulation in thé submission, declares that the award of the majority shall be binding. All must nevertheless meet both for hearing and consultation; and the fact that the hearing or consultation has been conducted in whole or in part by a majority only will suffice to avoid the award. * * * The opinions and arguments of one may have such an effect upon the rest that he will turn them to his view of the case.”

In 2 Ruling Case Law, p. 384, sec. 29, it is said:

“Even when it is stated in the agreement of submission that a. majority award shall be valid, it is none the less necessary that the arbitrators shall act jointly; that all shall be present, or shall have been given an opportunity to be present, when the award is considered. A party to arbitration proceedings has the right to expect that all the arbitrators will participate in the proceedings. If they are not at least given an opportunity to do so, the award will be invalid in spite of the fact that it is signed by a number of arbitrators sufficient under the terms of submission.’’ (Citing Blin v. Hay, 2 Tyler [Vt.] 304.)

In Blin v. Hay, supra, (decided in 1803), a controversy arose between Blin and one Trimble, and by an arbitration agreement it was submitted for decision to five arbitrators with the provision that a finding of a majority of the arbitrators would be binding. Three of the arbitrators signed an award in which it was de-. cided that Trimble should pay Blin a certain1 sum of money. Blin brought an action in debt on the award against Trimble, who afterwards died and his administrator was substituted as defendant. It was contended that the declaration was faulty because it did not allege that the two arbitrators who did not sign the award were present at the meeting, or notified thereof, when the award was made and signed. The court held that the declaration was insufficient in this regard, saying (p. 309):

“When a person submits a controversy to five arbitrators, he has reason to expect all will be present at the hearing of his cause, or at least that all will be notified of the time and place of meeting; for the absence of one might materially affect the award. His superior judgment in the matter in controversy may have been relied upon by the party in preference to that of all the others, and might have altered the opinion of the others; and although a majority, after a candid discussion, may make the award, yet all the arbitrators * * * . ought to be present at the hearing, or at least it should appear that they were notified of the time and place of meeting. ” .

In Doherty v. Doherty, 148 Mass. 367, where the submission provided that the award made by a majority of the arbitrators should be final, it appears that the award was signed by only two of the three arbitrators, and that the third arbitrator, being absent from home, did not receive notice of the meeting of the arbitrators until after the same was returned into court and was not present at said meeting. The court refused to confirm the award and that action was affirmed, the Supreme Court saying (p. 368) that the award “was not the result of deliberation by all the arbitrators, and that one of the arbitrators had no opportunity to consider it. Although the submission provides that the award of the majority shall be final, yet all must meet in consultation upon the decision, unless, indeed, one •refuses after notice to attend, because if the absent arbitrator had been present ‘he might have drawn his brethren to a different opinion. ’ ”

In Novak v. Rochester German Ins. Co., 156 Ill. App. 352, it appears that an action in assumpsit was originally brought in the circuit court of Cook county on an award made pursuant to an arbitration agreement contained in a fire insurance policy; that the parties had been unable to agree upon the amount of a loss occasioned by a fire; that the policy provided in case of such a disagreement the loss should be determined by appraisers, one selected by the insured and the other by the insurer, who should select a disinterested umpire, and the award in writing of any two should determine the amount of the loss; that the insured chose one Miller and the insurer one Isaacs to act as appraisers, and they selected one Filbert as umpire; that the three examined the property in the premises where the fire had occurred; that 4 days later Miller and Filbert signed an award in favor of the insured, but Isaacs did not sign the same; and that the insurer excepted to the sufficiency of the award and refused to pay it. At the trial in the circuit court without a jury there was a finding and judgment for plaintiff. The couid refused to hold as law four propositions which were submitted by the defendant, one of which was that “if the two appraisers who signed the award made and executed the same without notice to the third appraiser, or giving the third appraiser an opportunity to be present at the time of the execution of the award, said award is void.” On appeal this Appellate Court 'held that the trial court erred in refusing to hold each of said four propositions and on that account the judgment of the circuit court was reversed and the cause remanded. After redocketing, the cause was transferred to the municipal court of Chicago, and it was stipulated on the trial in that court that the bill of exceptions taken on the former trial might be read as depositions. On this second trial, without a jury, only the evidence given on the former trial was introduced, and there was a finding and judgment for the defendant. On the second appeal this Appellate Court affirmed this judgment, holding that the decision on the former appeal, as to said four propositions of law, was the law of the case on said second appeal. (See also Bannister v. Read, 6 Ill. [1 Gilm.] 92, 102; Smith v. Smith, 28 Ill. 56, 60; Vessel Owners’ Towing Co. v. Taylor, 126 Ill. 250, 259.)

And it appears to be the law of this State that the defense of fraud or misconduct on the part of the arbitrators may be made by plea in bar in an action a.t law brought to enforce the award, and that it is unnecessary to resort to a court of chancery. (Wiley v. Platter, 17 Ill. 538, 540; Newlan v. Dunham, 60 Ill. 233, 235; Alexander v. Cunningham, 111 Ill. 511, 517.) In the Alexander case, it is said: “We do not deem it necessary to enter upon an examination of cases cited by counsel for appellants holding a rule different from that laid down in Elmendorf v. Harris, supra.”" (23 Wend. [N. Y.] 628.) “Very many and respectable courts have held that the objection of a want of notice in such cases cannot be raised by plea in bar, but that it can only be urged by bill in equity or motion to set aside the award. * •* * But, as has been seen, this court in Ingraham v. Whitmore, supra” (75 Ill. 24), “is committed to the doctrine of Elmendorf v. Harris, which holds the award absolutely void where there is want of notice of hearing.” (See also Graham v. Woodhall, 86 Ala. 313, 314.) In the case of Elmendorf v. Harris, referred to, it is said (p. 633): “Why should the party against whom the award is made be compelled to go into a court of chancery for relief* instead of defending himself against the void award in the action brought thereon in a court of law? The validity of the award in such a case is purely a legal question, proceeding upon the ground that it was not within the power of the arbitrator to make the award without hearing of the parties, and I am of the opinion that the defendant had a right to set up this objection to the award in the court of law; although perhaps the court of chancery, upon the authority of some of the cases cited on the argument, might have had concurrent jurisdiction.”

Under the facts of this case, as to the manner in which the award of the two arbitrators was made and the time when made, without consultation with, or notice to, the third arbitrator, as disclosed by the testimony of the various witnesses (outlined in the above statement of the case), and under the law, we are of the opinion that the award is void and that any judgment based thereon cannot stand.

As to counsel’s point, secondly above mentioned, that the award does not conform to the submission, it is said in Taylor v. Scott, Foresman & Co., 178 Ill. App. 487, 498: “As a general rule, an award of arbitrators, in order to be binding, must follow the contract of submission as made by the parties. It is not for a board of arbitrators to change the terms of the submission or to determine any matter not therein contained. Their sole authority is the contract of submission. If the award is broader or narrower than the submission, the whole award is void.” This seems to be the settled law of this State. (McDonald v. Bacon, 3 Scam. 428; Buntain v. Curtis, 27 Ill. 374, 377; Alfred v. Kankakee & S. W. R. Co., 92 Ill. 609, 611; Snead & Co. Iron Works v. Merchants’ Loan & Trust Co., 225 Ill. 442, 454; Clark v. Courter, 280 Ill. 590, 604.) Under section 6 of the arbitration agreement in the present case the arbitrators were asked to first determine, in substance, whether'any false representations had been made by Ahlgren or his agents as to rent payments by Duffy and Patterson, and, if they so found, to secondly determine to what extent Mrs. Jones had been damaged thereby, and to render an award for the amount so found. As we construe this submission it means that the arbitrators were to determine what damages, if any, Mrs. Jones had sustained up to the time of the submission, July 14, 1916. But in the award as rendered, Ahlgren was charged, as damages, for the entire rent of the premises at $225 per month, as stipulated in the Duffy and Patterson lease, from March 1, 1916, up to and including September 30, 1919, or $9,675, less $100 received' by Mrs. Jones for rent of the premises for the month of December, 1916, or the net sum of $9,575. And it is stated in the award, made in December, 1916, that this $100 was received upon a month to month tenancy beginning December 1, 1916, “for an indefinite period.” It thus appears that the two arbitrators, in fixing the amount of the award, made no allowance for any future receipts for rent, and that they speculated as to what Mrs. Jones’ damage might be in the future from possible loss of rent, and on the assumption that she would receive no rent for said premises. In our opinion such an award is not justified by the terms of the submission.

In' view of our holdings it is unnecessary for us to consider the other points raised by counsel for defendant as grounds for reversal.

For the reasons indicated the judgment of the superior court is reversed.

Reversed without remanding with finding of facts.

Mr. Presiding Justice Matchett and Mr. Justice Barnes concur.

Finding of facts. We find as ultimate facts in this case that after the three arbitrators had adjourned their meeting on December 6 or 7, 1916, to meet at a future date, two of said arbitrators reached a decision and signed the award in question, without consulting with the third arbitrator, or giving him any notice or opportunity of participating in the proceedings which resulted in the signing and delivering of said award, and that said award is void and of no effect.