1851 MCCORMICK V. GRAY ET AL. ing appeared before me as such arbitrator on Real estate constituting assets of said Machinery amounting to Bills receivable, etc., for reapers. Iron on hand 238 sickles, $3.50 18 reapers, $120 Liabilities. Debt to Fitch, Barry & Co.. $623.14 833.00 1,560.00 3,021.14 $52,917.52 and to the said Cyrus H. McCormick, the amount due by said late firm to each of said copartners as stated above, and in the annexed account marked A. viz.: to the said Charles M. Gray, the sum of four thousand and fifty-one dollars and eighty-eight cents ($4, 051.88), and to the said Cyrus H. McCormick, the sum of twelve thousand and fifty dollars and sixty-seven cents ($12,050.67), the said two last-mentioned sums to be paid to each of said copartners in the manner specified hereinafter fifthly; and the balance coming to said McCormick over and above his half of his real estate and machinery mentioned hereinafter to be paid to him in money. money and assets of said firm, as profits, after 4th. I award that out of the balance of the paying the items above mentioned, there be paid to the firm of Ogden and Jones, of Chicago, on account of the sale made to them by the said Charles M. Gray, by deed dated the fifteenth day of January, one thousand eight hundred and forty-eight, one fourth part to Cyrus H. McCormick, one of the said copartners, one fourth part, and to Charles M. Gray, the other of the said copartners, the remaining $9,406.06 two fourths parts; the said parts to be paid to 3,637.17 each of the said parties, pro rata, as the 30,853.15 moneys and assets are received and collected. 5th. I do award that the real estate and machinery and their appurtenances, and the tools of the said late firm of McCormick & Gray, amounting together, according to the above statement, to thirteen thousand and forty-three dollars and twenty-three *cents[*30 ($13,043.23), that is to say, the real estate to $1.802.82 nine thousand four hundred and six dollars 1,750.60 1,635.29 and six cents (9,406.06), and the machinery, 30.00 etc., to three thousand six hundred and thirty105.00 seven dollars and seventeen cents ($3,637.17), 73.75 be taken, one half part thereof by each of the 4,051.88 said copartners, viz.: the said McCormick and 12,050.67 the said Gray, at the above-mentioned rate, $21,710.09 that is to say, six thousand five hundred and 31,207.43 twenty-one dollars and sixty-one and a half cents ($6,521.614) each, and that such appro$52,917.52 29*] And I do therefore award as follows: of the said real estate and machinery at the priation by each of said copartners of one half 1st. I award out of the money and assets of said firm, whether in the hands of either of one dollars and sixty- one and a half cents ($6,sum of six thousand five hundred and twentysaid copartners or of their agents, there in the 521.61) each, be applied towards the payment first place be paid the following of said debts of the respective balance due to each of them and liabilities of said firm, pro rata, until the by the said firm, that is to say, of the balance same shall be fully paid, viz.: the above-men- of twelve thousand and fifty dollars and sixtytioned debts and liabilities, principal and inter- seven cents due to the said McCormick, and est, to the time of payment due to Fitch, Barry the balance of four thousand and fifty-one dol& Co., Seymour & Morgan (both claims), O. lars and eighty-eight cents ($4,051.88), due the Orcutt, M. & M. Stone, H. Rowell, and said Charles M. Gray, and that the balance of George M. Gray, and all other outstanding the said Charles M. Gray's half of said real debts, if there should be any found to be estate and machinery, over and above the payomitted in the above account due or coming ment of the said sum of $4,051.88, be applied due by said firm to third persons. profits of said firm, coming to him as awarded in part payment of the two fourth parts of the fourthly above. Debt to Charles M. Gray. Profit and loss.... 204.08 2d. I award that in the next place there be paid to Cyrus H. McCormick, one of said copartners, out of money and assets, the sum of fourteen thousand six hundred and ten dollars ($14,610), for his patent fees, as stipulated by the articles of copartnership, for reapers sold by said firm. 3d. I award that in the third place there be paid out of the assets of the said firm, and in the manner hereinafter stated to each of said opartners, viz.: to the said Charles M. Grav. longing to said firm, on hand and unsold, be 6th. I do award that the thirteen reapers besold with all convenient despatch, and at the best price that can be had for the same, and to Cyrus H. McCormick the sum of thirty dolthat out of the proceeds thereof, there be paid lars for each of said reapers so to be sold, as a patent fee; but if the said reapers shall sell for less amount 30 SUPREME COURT OF THE UNITED STATES. dollars a piece, then the patent fee aforesaid shall be apportioned to the amount of the sale of each reaper in the same proportion as thirty dollars is to one hundred and twenty dollars, and the said patent fee to be paid as aforesaid upon the sale of the said thirteen reapers shall be deducted from the profits to be divided as above fourthly stated. 7th. I do award that the bills receivable, accounts, and debts due the said firm, not already collected, whether in the hands of either of said copartners or their agent or agents, be collected and caused to be collected in money by the said copartners, and each of them, with all reasonable diligence and despatch; and that the iron and sickles on hand mentioned in said account, and all other assets of the said firm (excepting the real estate and machinery and tools above stated), not already sold, be sold and converted into money with all convenient and reasonable diligence, and at the best price that can be procured for the same, and the proceeds of all of the above applied in pursuance of the direction and provisions of this award. 31*] 8th. I do award that all moneys, notes, and other property and assets of said late firm, in the hands or possession of or under the control of either of said copartners, shall be forthwith applied by them, and each of them, ac cording to the terms and provisions of this award. 9th. In case any part of the debts mentioned in the first above-mentioned item, or of the patent fees mentioned in the second abovementioned item, shall have been paid since the hearing of the arbitration aforesaid, the amount of such payment shall be deducted from the amounts directed thereby to be paid. 10th. I do award that all necessary costs and expenses which may be expended or incurred in the sale of any of the copartnership prop erty, and in the collection of the bills receiv: able and debts due the said firm, shall be paid out of the balance of the partnership moneys and assets fourthly above mentioned, before the whole of such balance shall be finally divided as mentioned in said above-mentioned fourth item. 11th. This award shall be a final settlement of the accounts of the late partnership firm of McCormick & Gray, and of the manner in which the assets of said firm are to be paid, appropriated, and applied, and embracing as well, the settlement of the accounts of the respective partners, as an adjustment of their respective claims one against the other, growing out of their said partnership dealings, and of all differences and matters of difference between the said Cyrus H. McCormick and Charles M. Gray, which have been submitted by the arbi said arbitrator exceeded the p diction conferred upon him by in this, to wit: 1st. That in and by the from the said McCormick and trustee, William B. Ogden, it clared in the first section the Ogden shall proceed to collect speedily as may be, and after expenses, costs, and commission collection and disbursement of pay over to said McCormick th 610, on account of patent fees for the manufacture of said W as aforesaid; whereas the said a ly disregarding the said assig said proviso of said arbitration fore mentioned and set forth, said award, awarded and direct enth section thereof (amongst that the bills receivable, accou due the said firm, not (then) al whether in the hands of either ners, or of their agent or agents, caused to be collected in money partners, and each of them; and said first section of said award trator awarded (amongst other out of the money and assets whether in the hands of eithe copartners or of their agents, first place be paid certain debts of said firmn, mentioned and sp section, pro rata; and the said said award directed and awarded that in the next place there be orator out of the funds of said the sum of $14,610 for his sai Thus attempting to subvert a said assignment so made to said recting the said parties to col debts and assets so assigned to h said Ogden, and in utter disregar and duties as trustee, and to dis tribute the funds of said part different manner from that pre by the trusts of said assignme poning the payment of the $14,610 so due to your orator fo until after the payment of said de in said first section of said award the tenor and effect, true intent, of the said assignment, and of the tion bond. 2d. The said assignment pro second section thereof, that said pay all legal liabilities and debts of Cormick and Gray as they shall whereas the said award in the thereof awards and directs, in su certain debts in said last-ment specified, shall be paid pro rata u shall be paid. 3d. The said assignment in the thereof (amongst other things) substance, that the balance of sa fast as collected, shall be paid in as follows; to said McCormick of moneys collected, to Ogden and fourth, and the remaining fourth provided, however, and it is in s tion agreed and understood, that! sums therein provided to be paid Cormick and Gray, respectively, shall be retained by said Ogden to await the award of said Dickey, and shall in no case be paid over to either of said parties, until said award shall be made; and when said award shall be made, 33] in case it should be made against either party, the amount of such award shall be taken out of the moneys going to the party against whom the said award shall be made, and paid over to the party in whose favor the said award shall be made; and when said award shall have been paid, the balance of said moneys going to said McCormick and Gray, if any there shall be, shall be paid over to them, respectively, in the proportion in said assignment provided; whereas, in and by the fourth section of the said award, it is awarded and directed, that of the balance of the money and assets of said firm, as profits, after paying the items therein mentioned, there be paid to said Ogden and Jones one fourth part, to said McCormick one fourth, and to said Gray the remaining two fourths; and no sum certain is awarded to either party within the intent and meaning of the said assignment and submission, but the assets of the said firm are directed to be distributed and divided as last aforesaid. 4th. That the said arbitrator has exceeded his powers in other respects, and the said award is uncertain, unjust, illegal, and tends to the manifest injury, wrong, and oppression of your orator; and your orator humbly insists and submits that the said award ought to be annulled and wholly set aside, and the said Gray ought to be enjoined and restrained from commencing any suit or other proceeding to enforce the collection thereof, or from interfering with said assignment aforesaid, or intermeddling with the property and assets in said assignment mentioned; and that the said Gray ought to come and account with your orator, of and concerning the said partnership dealings and transactions from the commencement thereof; and that the said pretended award, so made as aforesaid, is no bar to such account." The defendants appeared, and demurred to the bill; and the Circuit Court, then holden by the district judge, sustained the demurrer and dismissed the bill. The complainant appealed to this court. It was argued by Mr. Johnson for the appellant, and submitted, on a printed argument, by Mr. Butterfield for the appellee. Mr. Johnson, for the appellant, made the following points: 1. That the averments in the bill gave the court jurisdiction over the parties and the subject. 2. That the award, being beyond and against the terms of the submission, was void. Archer v. Williamson, 2 Harris & Gill, 68; Adams v. 32 Mr. Butterfield, for the appellee, made the following points: 1. The first point made by the respondent upon this appeal is, that there is nothing in the case to show that the matter in controversy, or the difference between what the appellant is entitled to under the award and what he would be entitled to if the award should be set aside and a new account should be taken, is sufficient in amount to sustain the jurisdiction of the court. 2. The complainant, by applying to the court below, and obtaining leave to amend his bill after the allowance of the demurrer, waived the right to appeal from the decision of the court, allowing the demurrer; and no appeal lies to this court from a decision of the court below, refusing to amend. The dismissal of the suit was a necessary consequence of the neglect of the complainant to amend within the sixty days allowed to him by the court, and no appeal lies from that decision. Wright et al. v. Lessee of Hollingsworth, 1 Pet. 165; Matheson's Administrator v. Grant's Administrator, 2 How. 263; Read v. Hodgens, 2 Mol. Rep. 381. 3. The award of the arbitrator was not an excess of power in any respect, and was not in consistent with the spirit of the assignment of the debts of the firm to William B. Ogden, as trustee. 4. The courts, in support of the validity of an award, will make every reasonable presumption in favor of its being certain and final, as a determination of all the matters in dispute; especially when, as in this case, the award states that the arbitrator has examined and considered all the matters in difference between the parties, and that the award is intended to be a final settlement of all such matters as were submitted to the arbitrator. Wood v. Griffith, 1 Swanst. Rep. 43; Doe, ex dem. Madkins, v. Horner, 8 Adol. & Ellis, 235; Smith v. Demarest, 3 Halst. Rep. 195; 9 Adol. & Ellis, 522; 3 Greenl. Rep. 421; 6 N. H. Rep. 264; 1 Leigh, 491; 9 Wend. 649; 2 Johns. Ch. Rep. 551; 2 Bay, Rep. 370; 2 N. H. Rep. 179; 1 Dall. 174, 188. 5. An award cannot be set aside, either at law or in equity, except for errors apparent on its face, misconduct in the arbitration, or for some palpable mistake, or on account of the fraud of one of the parties. And nothing dehors the award can be pleaded or given in evidence to show that it is unreasonable or unjust. Hunch v. Blair, 1 Johns. Ch. Rep. 101; Shepherd v. Merrill, 2 Id. 276; Todd v. [*35 Barlow, Id. 551; Heard v. Muir, 3 Rand. Rep. 121, 128; Shermer v. Beale, 1 Wash. Rep. 11; of Schenck v. Cuttrell, 1 Green's Ch. Rep. 297; Pleasants v. Ross, 1 Id. 157; Administrator Strodes v. Patton, 1 Brock. Rep. 228. The bill in this case, which seeks to raise a Adams, 8 N. H. 82; Carnochan v. Christie, question as to the decision of the arbitrator, 150 679 683. Scott ▾ Pinkerton & Edw Ch 35 SUPREME COURT OF THE UNITED STATES. Mr. Justice Curtis delivered the opinion of the court: 6. If a part of the award is invalid, as being | respectively, shall be retaine contrary to the provisions of the assignment, den, to await the award of Ju that does not render the whole award void, but submission above referred to only so much thereof as is inconsistent with the case be paid over by him to provisions of the assignment, will be rejected, ties until said award shall be leaving the residue of the award in full force. said award shall be made, i Taylor's Administrator v. Nicolson, 1 Hen. & made against either party, th Mun. 67; McBride v. Hagan, 1 Wend. Rep. award shall be taken out of 326; Bacon v. Wilber, 1 Cow. 117; Martin v. to the party against whom sa Williams, 13 Johns. 264; Cox v. Jagger, 2 Cow. made, and paid over to the a 649; Gordon v. Tucker, 6 Green. 247; Lyle v. the party in whose favor sai Rodgers, 5 Wheat. 394. made; and when said award paid, the balance of said mon McCormick and Gray, if any shall be paid over to them, re This is a bill for an account of certain part- proportion hereinbefore pro nership transactions between McCormick and vided, further, that, if said G Gray, and to set aside an award by which that to said McCormick, within t account has been stated. The bill was demurred the date hereof, the sum of $2 to, and, by a decree of the Circuit Court of of the indebtedness of Gray the United States for the District of Illinois, it said McCormick, then the said was dismissed, and the complainant appealed. tain and pay over to said M The demurrer raises the question, whether the rest of the moneys to be pa the award is valid. The objection to the award as aforesaid, after first paying is, that it is not pursuant to the submission. said judge may make in the s To decide this question, it is necessary to ex- mentioned, against said Gray amine the terms of the submission and the sum of $2,500, on account of award. The submission is contained in arbi-edness of said Gray and Warn tration bonds, mutually executed by the par- gether with ten per cent. dama ties, bearing date on the 20th day of December, penalty for any delinquency on 1848, submitting, generally, all their partner- Gray, to pay said sum of $2 ship and other differences with this limitation: time above limited, everythi "Provided, that the award so to be made by contained to the contrary notwi said arbitrator shall not in any way alter or af- the said Gray agrees to furnis fect the demands of property and assets in the McCormick, within the thirty hands of William B. Ogden, as the trustee of a full, true, and correct accou said parties, or the agreements between said of the indebtedness of said Gr parties, relative to the collection and disposi- to said McCormick; and any tion of said demands, assets, and property; but above the said sum of $2,500, the same shall remain under the provisions of count or statement shall show t said contract." McCormick, shall also be paid Gray, within the thirty days al in default thereof, the said Ogd same out of the same funds, in ner and with the like penalty th of $2,500 is hereinbefore provid This clause in the submission refers to an assignment of the principal part of the choses 36*] in action of the partnership, in trust to collect them, made by the partners before the execution of the submission bonds, which assignment recites the fact of the submission, and contains agreements as to marshaling this part of the partnership assets. Amongst other trusts declared in this assignment are the following: "1st. Said Ogden shall proceed to collect said assets as speedily as may be, and, after first paying all expenses, costs, and commis sions attending the collection and disbursement of the same, he shall pay over to said McCormick the sum of $14,610, on account of patent fees due him for the manufacture of said Virginia Reapers, as aforesaid. "2d. To pay all legal liabilities and debts of said McCormick and Gray as they shall become due. "3d. The balance of said assets, as fast as collected, shall be paid in pro rata sums, as follows: To said McCormick, one half of all moneys collected; to Ogden and Jones, one fourth part of said moneys, being the amount heretofore sold and assigned by said Gray to them; and the remaining one fourth part to said Charles M. Gray. Provided, however, and it is hereby expressly understood and agreed between the said McCormick and Gray, that the respective sums herein provided by this elause, to be paid to said McCormick and Gray, These stipulations, by which partnership assets is disposed effect, incorporated into the limit the authority of the arbit do nothing to alter or affect 1 stead of observing this limitat treats the entire property of t and the respective rights of the no such agreements had been n He postpones the payment thousand six hundred and ten Cormick, for his patent fees to the debts of the firm, though th the parties was, that it should of the choses in action assigned that this was justified by the creditors. But, as between the had a perfect right to control tl the partnership funds, and dete whole, or any part, should go i sion of either partner. Both ar able for the debts, and whethe member of the firm shall have p funds, either under a claim as a firm, or otherwise, while they faith, is a matter wholly subjec trol. Indeed, it is only througl said Og. t of such over and t of the in legal But, in- means of their equity to have the partnership | the particular trusts created by the assignment property applied to the payment of the part nership debts, that creditors have any lien on, or specific rights to, the property of the firm, as distinguished from the property of its members. Ex-parte Ruffin, 6 Ves. 119; Ex-parte Fell, 10 Ves. 347; Ex-parte Williams, 11 Ves. 5. This partnership was solvent, and the object of the submission was to adjust the relative rights of the partners. The payment of the debts, and a provision for them out of the partnership funds, was probably necessary, in order to make a final settlement, without recourse over, in consequence of payments compulsorily made by one partner, which might disturb the balance between himself and his copartner. But it certainly was not within the authority of the referee to make this provision out of a fund which the partners had otherwise disposed of by an express agreement, which they made part 38*] of the submission, and which constituted a limitation on his authority. It is said that, by the terms of the agreement between the parties contained in the assignment, these debts were to be paid as they should become due, and that to support the award the court will intend, they were all payable at the time it was made. But if this were intended, the agreement would nevertheless remain, by force of which McCormick's patent fees were to be first paid, out of the proceeds of that particular part of the property assigned. The partners agreed in the assignment, that, after paying McCormick the sum of $14,610, and discharging the legal liabilities of the firm, the balance of the assets assigned, as fast as collected, should be paid, one half to McCormick, one fourth to Gray, and the remaining fourth to certain assignees of Gray, but that each partner should have a lien on the share of the other, for any balance found due to him by the arbitrator: and that McCormick should have a lien on Gray's share, in the hands of the assignee, for a specific claim of twenty-five hundred dollars, together with any further amount which might prove to be due to him according to an account therein agreed to be rendered. Upon the face of the award we are unable, by any fair intendment, to reconcile it with these stipulations. The radical error of the arbitrator seems to have been, that he disregarded these arrangements of the parties, by which they had finally bound so much of their assets as were in the hands of the assignee. It was his duty to assume that their contract, in respect to this part of the partnership property, was to be specifically executed, and then proceed to consider the equities of the parties in consequence of such an appropriation of those funds, as well as in consequence of the other facts. But each partner had a right to the specific performance of the trusts declared in the assignment, and the submission gave no power to the arbitrator to make an award inconsistent with their execution. But this award is so. In one aspect of this bill, it is a bill for the execution of those trusts, and no reason appears why they should not be executed, except the award. If the award is valid, the court below rightly decided that the bill must be dis in favor of each partner, in respect to the proceeds of the choses in action assigned. Yet it was expressly agreed that the arbitrator should do nothing which could have that effect, and so far as the award is relied on as a defense to the bill against Gray and Ogden, the trustee, to have these trusts *performed, it is in di- [*39 rect conflict with the express words of the submission. It is suggested that the award may be held valid in part, and so far as it does pursue the submission. There are cases in which, after rejecting part of an award, the residue is suffi ciently final, certain, and in conformity with the submission, to stand; but it is indispensable that the part thus allowed to stand should appear to be in no way affected by the departure from the submission. In the present case this does not appear. On the contrary, the basis of this whole award is erroneous, resting on the assumption that the disposal of the entire assets of the partnership was the subject of the award, and it is certain the arbitrator could properly have made no part of this award, as it stands, if he had assumed that the trusts declared in the assignment were to be executed. It is objected that the amount in controversy is not sufficient to justify an appeal to this court; but this is a suit for an account involv. ing very large sums of money, the complainant claiming sums greatly exceeding two thousand dollars, by force of the assignment and otherwise, and the defendant Gray insisting on the award, as a bar to the whole claim. It is no answer to say that, if this suit should be defeated, the complainant may have some other title, which will not be worth two thousand dollars less than the value of what he now claims. The question is, whether the matter in dispute in this suit is of the value of two thousand dollars. Besides, this matter is a claim for an account far exceeding that amount, and it does not appear that the defendant concedes to the complainant his whole claim, except some sum less than two thousand dollars. There remains, therefore, a dispute concerning this large claim, not narrowed by any concession of the defendant, so as to be reduced below the sum which is required by law for an appeal. It is urged, also, that the appeal is not well taken, because the complainant obtained leave to amend, after the decree dismissing the bill was entered. But it appears from the record that this decree to dismiss the bill was regularly stricken out before the leave to amend was granted, and afterwards, when the complainant elected not to amend, the bill was ordered to be dismissed by reason of the demurrer. From this last mentioned decree the appeal was tak en, and it was regularly and properly allowed. The decree of the Circuit Court must be re versed, and the case remanded with directions to that court to overrule the demurrer, and order the defendants to answer the bill. |