Majority
p. 445The Niagara Falls and Lewiston Railroad Company, Respondent, v. James T. Brundage, Appellant, Impleaded with The De Veaux College for Orphan and Destitute Children.
Headnote
Agreement for arbitration — it effects a discontinuance of a pending action or pro ceeding— after haring entered into an arbitration a corporation cannot obtain an order under the Condemnation Act, autlwrizing it to take possession of the property upon making a deposit.An agreement submitting a controversy, involved in an action or special proceeding then pending, to the determination of arbitrators, pursuant to the rules of the common law, effects a discontinuance of the action or proceeding.
The fact that a formal order is not entered, discontinuing a proceeding, does hot deprive the defendant of the right to set up the arbitration agreement as a defense to its further continuance.
Upon an appeal by James T. Brundage from an order made under section 3380 of the Code of Civil Procedure, permitting the plaintiff, a railroad corporation, to enter immediately upon certain real property, and to construct a railroad thereon, upon its depositing §20,000 with the court, it appeared that Brundage was the lessee of the premises, and that he and the railroad .corporation being
p. 446
unable .to agree as to the valué of a right of way over them, proceedings to condemn such right .were duly instituted. Subsequently, and pending such proceedings, the parties entered into a written agreement to submit the question of damages to three arbitrators named therein.
About ten days after the arbitration agreement had been executed, the railroad corporation moved for and obtained the order appealed from: ■
.Held, that the order in effect would nullify the arbitration agreement, and should not have been granted.
Appeal by the defendant, James T. Brundage, from an order of the Supreme Court, made at the Erie Special Term and entered' in the office of the clerk of the county of Niagara on the 17th day ■of July, 1895, permitting the plaintiff to enter immediately upon the real property described in its petition and devote the same temporarily to the construction of its' railroad, pursuant to section 3380 •of the Code of Civil Procedure, upon its depositing with the treasurer ■of Niagara county $20,000, to he applied as far as necessary for the purpose of paying the award of damages that might be made in the ■proceeding. ■
October 8, 1890, the Niagara ■ Falls and Lewiston Railroad Company was incorporated, pursuant to chapter 140, Laws of 1850, as ■•amended by subsequent statutes, for the purpose of constructing a, ¡railroad from the village of Lewiston, in the county of Niagara, to the city of Niagara Falls, in said county. In March, 1892,. it filed a map and profile of its route in the office of the clerk of the •comity of Niagara, pursuant to section 22, chapter 140, Laws of .1850, as amended by subsequent statutes..
By chapter 243, Laws of 1853, The De Veaux College was incorpo¡rated and given power to take and hold real estate,, pursuant to which it became the owner in fee of a tract of land now within the city of Niagara Falls, a portion of which, known as the “ Whirlpool Grounds,” it leased June 1, 1893, for an annual rent of $1,000, to ■James T. Brundage for five years, which term will end. June 1, ,1898. The plaintiff being unable to. acquire, by agreement, a right •of way across the leased lands, began, May -3, -1895, proceedings ■against De Veaux College and James T. Brundage to acquire a right of way by 'condemnation. James ,T. Brundage appeared in the proceedings, and,' May 15, 1894, answered, denying the right of plaintiff to acquire-lands by condemnation, and' alleged that, by the taking of the right of way sought to be acquired, he would be
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damaged in the sum of $20,000. After. these proceedings were begun (the date not appearing) the plaintiff acquired the title of De Yeaux College to said lands for a right of way, subject to the leasehold interest of Brundage.
June 29, 1895, the president of the plaintiff wrote the defendant offering $4,000, payable in installments, for his leasehold interest, “or will leave it to Chas. Miller, Major Weeks and John .Level, or, to a commission that the court may select.” The defendant declined the offer of $4,000, and July 3, 1895, the parties executed the following agreement to arbitrate:
“This agreement, made and entered into this 3rd day of July, 1895, by and between James T. Brundage, of the city of Niagara Falls, N. Y., of the first part, and The Niagara Falls & Lewiston Railroad Company of the second part.
• “ Whereas, the said party of the first part being the owner of and in possession under a certain lease in writing of the lands and premises known as the 1 Whirlpool Grounds,’ located in the city of Niagara Falls, N. Y., which lease was made and entered into by and between ‘ The De Yeaux College for Orphan and Destitute Children ’ and the said James T. Brundage, and which lease bears date June 1st, 1893, for the term of five (5) years from the date thereof; and the said The Niagara Falls & Lewiston Railroad Company being desirous of constructing its roadbed, running its cars, and ■operating its road through, upon, over and across a portion of said lands which are covered by and included in the said lease ; and the ;said parties hereto having failed to agree upon the amount of damages to be paid to the said Brundage, by reason of the constructing and oj>erating of said railroad through, upon, over and across said lands, and the cancellation and surrender of said lease by the said Brundage ; and the said parties hereto having agreed to submit the question of damages, to be paid to the said Brundage, to three arbitrators who have been selected and agreed upon by the parties hereto, namely, John C. Level, Edson J. Weeks and Charles W. .Miller, all of the city of Buffalo, N. Y.
“ Now, this agreement witnesseth: That in consideration of the ;submission of the question of damages to be paid to the said Brundage as aforesaid, to the three arbitrators above named, and ■other good and valuable ^considerations, the parties hereto hereby
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covenant and agree as follows: That they will abide by and accept as final the decision of the three arbitrators 'above named, or the decision of a majority of the same, and that the sum agreed upon by said three arbitrators, or a majority of the same, will be accepted by the parties hereto as final. •
“ It is also agreed to by and between the parties hereto that no-appeal shall be taken from the decision of said three arbitrators, or a majority of them; and said party of the second part will pay to the said party of the first part, and the said party of the first part will accept from said party of the second part, the sum agreed upon by the said three arbitrators, or a majority of them, as- damages to be paid to the said Brundage, by reason of the constructing and operating of the said railroad, across, upon, over and through the lands covered by and included in the lease from The De Veaux College, etc., to the said James T. Brundage, and the cancellation and surrender of the said lease by the said Brundage.
“ In Witness Whereof, the party of the first part has hereunto set his hand and seal; and the .party of the second part has caused this instrument to be subscribed by its President and its corporate seal affixed, the day and year-first- above written.
“ J. T. BRUNDAGE, [l. s.]
“ NIAGARA FALLS & LEWISTON R R 00., [l. s.]
J. M. Beinkeb, Prest.
“ Witness:
“ David N. Evans.” •
July 13, 1895, the plaintiff moved upon the petition and answer in the condemnation proceedings and upon the affidavits of Herbert P. Bissell and John M. Brinker, verified July 12, 1895, for an order pursuant to section 3380 of the Code of Civil Procedure, directing that the plaintiff be permitted to enter upon the property and construct its railroad, upon depositing with the court $20,000. In the affidavits of Bissell and Brinker it is stated that the plaintiff, with the consent of Brundage, entered upon his leasehold interest and constructed its road. The defendant in his affidavit, verified July 15, 1895, states that the plaintiff entered on his lands without his knowledge or consent; that upon learning the fact he notified the plaintiff to discontinue work, and that afterwards, pending negotiations for- a settlement of-the damages, he consented that the plaintiff .might continue the construction of its road across his land.
p. 449
Ellsworth, Potter & Storrs, for the appellant.
Herbert P. Bissell, for the respondent.
An agreement submitting a controversy involved in’an action, or in a special proceeding then pending, to arbitrators to hear and determine, pursuant to the rules of the common law, effects a discontinuance of the action or proceeding. (McNulty v. Solley, 95 N. Y. 242 ; Keep v. Keep, 17 Hun, 152 ; Jordan v. Hyatt, 3 Barb. 275 ; 2 Rumsey’s Pr. 159; 1 Am. & Eng. Ency. of Law, 661.)
The fact that a formal order was not entered discontinuing the proceeding did not deprive the defendant of the right to set up the agreement, as a defense to the motion. An agreement between parties settling an action pending is a perfect defense to it, though no order has been entered formally discontinuing it, and it has been held that a parol submission to arbitrators of a cause pending is a good defense to the action, notwithstanding the existence of a general rule of court that no agreement between litigants shall be binding unless in writing or evidenced by an order of the court. (Wells v. Lain, 15 Wend. 99 ; 1 Crary’s Spl. Proc. 30.)
The agreement provides that the sum awarded shall be binding and final on the parties, and both waived their right to appeal given by section 3375 of the Code of Civil Procedure, and the defendant waived the defenses to the proceeding set up in his answer, and the contract is wholly inconsistent with the theory advanced to sustain the order that the agreement amounted only to a selection of commissioners in the proceeding.
The plaintiff made a written offer to arbitrate and selected the arbitrators, which the defendant accepted, and within ten days after the execution of the agreement the plaintiff made this motion.' It is not asserted that the defendant had interfered, with the plaintiff’s possession or had refused to. go on under the agreement, and we find no justification in the record for the plaintiff’s attempt to. nullify the arbitration proposed by it and consented to by both parties under their hands and seals.
The order should be reversed, with costs.
All concurred, except Green, J., not sitting.
Order reversed, with costs.
Cases cited
- McNulty v. Solley 95 N. Y. 242 p. 449
- Jordan v. Hyatt 3 Barb. 275 p. 449
- Wells v. Lain 15 Wend. 99 p. 449