24 N.J. Eq. 567 | N.J. | 1874
The opinion of the court was delivered by
By an agreement of October 8th, 1863, the Millville and Glassboro railroad was leased for twenty years to G. W. Thomas, A. S. Porter and E. F. Chew. The right was reserved to the lessors to terminate the contract and retake possession, by giving three months notice, at any time, of their purpose to do so; and provision Avas made, in that case, for determining, by arbitration, the value to the lessees of the contract of lease, and the damages incurred by, and justly and equitably due them, from its being thus brought to an end.
On the 1st of April, 1868, this terminating notice Avas given. On the 21st of December, 1868, an agreement was made submitting all matters in difference to tAvo arbitrators selected by the parties, and providing that if unable to agree the tAvo should choose an umpire, Avho, as
In respect to the first ground, the rule expressed in the Chancellor’s opinion is, that an award cannot be reviewed,
Applying either measure or criterion of excess to this award, there is nothing shown in the case, so far as I am able to discover, that would make it the duty of the court to set it aside. For the complainants it was insisted that the lessees were entitled to no allowance whatever; that their unexpired term was absolutely worthless. The defendants, on the other hand, insisted, and not without plausible reasons, that the sum awarded was too small. The problem submitted to the arbitrators was capable of none but an approximate solution. It was foreseen by the parties to be one specially fit for the tribunal they provided for. The elements it involved were contingent, and in view of their nature and number, it is plain that conclusions reached by one set of impartial and capable men might well differ much from those readied by another. 'Without asserting that the amount here might not fairly have been greater or less, I see no evidence to impeach the good motives or judgment of those by whom it was adopted. It is said by the complainants to appear from mathematical principles, on the evidence produced by the defendants themselves, that the sum awarded is excessive. But this is far from being clear. The average net profits for the expired part of the term — four years and eight months — were $26,000 per year, and about $29,000 for the last year, of which part had expired. These yearly profits might steadily advance. The increase actually experienced up to the point of termination might continue to go on. Of this, the arbitrators, under all the facts and conditions of the case, were to judge. But assuming that no steady increase would occur, and that the average or uniform profits would not exceed, say, $30,000 per annum for
If, however, the value of this annuity, certain of $17,000 for the unexpired term, should be thought to require determination by the probabilities of death, deducible from tables or mortality, the inquiry would relate in that ease to the sum requisite to purchase an annuity for the above amount and unexpired term, on the joint lives of the three. This annuity the lessors might be asked to secure from responsible parties, or to pay the lessees its equivalent value. The ages of the latter do not appear in the case, nor the customary principles and usages on which annuities of this description can be purchased. Taking the ages, for illustration, to be-
It is unnecessary to refer to the remaining elements to which the attention of the arbitrators must be presumed to have been turned. By what has already been said it is not meant to declare the amount of the award to be correct, but to indicate why, in view of the debatable materials to be dealt with, and the peculiar and discretionary powers of the tribunal to which they were submitted, the result arrived at is not perceived to be necessarily such as to call for disapproval.
The second ground on which the award is resisted, is the course pursued by the arbitrators in- withholding notice of the appointment of the third, and going on without further hearing or proofs. Their action in this respect was held by the Chancellor to be in no wise derogatory to the character or integrity of either of the arbitrators, but nevertheless to be misconduct in the sense of the law and fatal to the validity of the award. The doctrine laid down in the two opinions delivered at different stages of this suit and reported in 6 C. E. Green 205, and 8 C. E. Green 431, is substantially this, that when the new arbitrator was chosen the complainants had the right to adduce additional testimony and additional arguments, and that unless the right was clearly waived by their agreement or conduct, notice of the appointment of a third arbitrator, and opportunity to be heard, were essential preliminaries to a valid award. This doctrine is founded in natural justice, and is not denied to be law. It is sanctioned by the authorities referred to in the opinion in 6 C. E. Green 205, and is not impaired by the seeming exception there cited, of Hall v. Lawrence, 4 T. R. 589. It is so expressed in the text books. Russell on Arb. 231 ;
In Graham v. Graham, 9 Barr 255, it is said by Gibson, C. J., “ that arbitrators are not fundi ojjieio by the appointment of an umpire; for they may still go on and award ; but though it was their province to give notice to the parties of their own meetings, in the first instance, and of the appointment of the umpire in the second, it became his province to appoint the time and place of his sitting, and to warn the persons concerned.”
Whether, therefore, the umpire be distinguished. from a third arbitrator, or be, as in this ease, the same, notice of his appointment and of his sitting are legally requisite. Such notice may be waived. But the waiver must be shown by the party asserting it. Every reasonable presumption will always be entertained in favor of the validity of the award, as in case of a judgment, and the party seeking to impeach it will, therefore, have upon himself the burden of proof to destroy the presumption. In the .present case, the presumption is destroyed by the admitted absence of notice, which, absence is fatal, unless cured by new matter affirmatively shown. /The burden is obviously shifted from the party impeaching to the party supporting the award, and the controlling question here is, was the alleged agreement by the complainants to dispense with such notice and hearing, in fact, made by them, as it was supposed and understood to be by the defendants? Does the evidence clearly establish it? This question was decided by the Chancellor in the negative, and to the correctness of that decision, I entirely assent. The gentlemen whose testimony relates to this agreement, are of distinguished ability and character. Their testimony cannot be doubted or questioned on the score of any want of intentional fidelity to truth. It is unnecessary to review or
Nor can a waiver be maintained by the failure of the complainants to demand a new hearing. If notice of the appointment of the third arbitrator, and of the time and place of their subsequent meetings had been given, and the complainants had remained silent or inactive, the case would be different. A waiver might, in that case, be inferred.
Upon the ground that there was legal misconduct, in this respect, on the part of the arbitrators, the decree of the Chancellor should be affirmed, with costs.
For affirmance — The Chancellor, Beasley, C. J., Bedle, Clement, Depue, Dodd, Green, Lilly, Scudder, Van Syckel, Woodhull. 11.
For reversal — None.