Gihon v. Levy — 9 N.Y. Super. Ct. 176

Majority

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John Gihon, and others, v. J. P. Levy.

(Before Duer & Campbell, J.J.)

April 26 and 30, 1853.

Headnote

Facts, relied on as constituting a defence, must be set forth at least with so much certainty as to enable the court to say that, if true, the action is barred.

The Code has abolished technical rules of pleading, but has not abolished those ■which good sense prescribes, and are necessary to carry into effect its own provisions.

Hence, when an award is pleaded, that the court may judge of its validity as a bar, its substance, if not its terms, must be set forth.

Whether the section in the E. S., which relates to a revocation of the powers oí arbitrators, is not confined to those arbitrations which the statute regulates ? (2 R. S. p 544, § 23.)

When neither a ■ warranty nor a fraud in a sale is alleged, it is no defence that the goods were unsound and unmerchantable at the time of the sale.

Order allowing demurrer to answer, affirmed with costs.

Appeal from an order, made by Mr. J. Boswobth, at special term, allowing a demurrer to the answer.

The action was brought by the plaintiffs as payees against

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the defendant as the maker of a promissory note for $2,782.88. The complaint was in the usual form, and demanded judgment for the amount of the note with interest.

The answer was in the following words:—

“ City and Comity of Nevo York /—Jonas S. Levy for answer says, that it was agreed between the plaintiffs and defendant, by their mutual bonds, made and delivered on the twenty-fifth of July, eighteen hundred and fifty-one, to submit all matters in controversy, relative to said note, to E. H. Gillilan and A. Wellington Hart, as arbitrators : that said matters were fully and finally submitted to said arbitrators (upon a hearing of both said parties) for their decision, and an award was made and published, and the same was given to this defendant on or about the — day of January, eighteen hundred and fifty-two, signed by each of said arbitrators, and by Joseph Stuart, as umpire, on the twenty-eighth day of August, eighteen hundred and fifty-one.

“ And defendant further says: that the power of said arbitrators was not revoked prior to said final submission to them on the hearing.

“And for further answer said defendant says: That said note was given by the defendant for five hundred and thirty-six pieces of. imitation sheetings, purchased by said defendant of said plaintiffs, at a full price, as sound and undamaged sheetings, and that said sheetings were sold to this defendant per sample, and for the purpose of being shipped to Mexico. And this defendant avers, that said goods went from the store and premises of the plaintiffs, and were shipped by them in Mew York, and the bills of lading therefor taken in their own names, and endorsed over to this defendant, said goods never having been, in the possession of, or received or examined by said defendant previous to said shipment.

“And defendant avers, that upon the arriving of said goods in Vera Cruz, in said Mexico, said goods were found to be damaged and unsalable, and were not in the state represented by said plaintiffs.

“ And this defendant avers, according to his information and belief, that said goods were unsound and unmerchantable at the time of sale, and while in the possession and ownership of

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said plaintiffs, and were not injured by damage of the sea, or in any way or manner, after they were sold to said defendant by said plaintiffs.

“And this defendant avers, that immediately upon ascertaining the state in which said goods were in Vera Cruz, this defendant gave immediate notice thereof to said plaintiffs; to which notice no answer was received from said plaintiffs; whoreson said defendant, for the benefit of all parties, had said goods valued by the proper officers in Mexico, and thereupon, for the benefit of all concerned, sold.

“ And defendant says, that said goods brought the net price of 'fourteen hundred and six 31-100 dollars.

“ And defendant thereupon avers, that he is not liable to pay said note, and that he is entitled to receive from said plaintiffs his costs and charges (for attending to and selling said goods), amounting to three hundred dollars.”

A. S. Levy, for the defendant, the appellant.

I. It is only necessary that our answer should be in accordance with the intention and spirit of the Code, and its sufficiency is to be determined only by that Code. (Voorhies’ Ed., Code, p. 135, sec. 140; Demurrer, Code, p. 152.) And we must forget all old rules with regard to demurrer. (3 Howard’s Spe. Tr. Rep. p. 410; 3 Howard’s Spe. Tr. Rep. p. 280.)

H. Our answer sets up not only as a fact, the agreement to submit all matters in controversy to Gillilan and Hart, but also the final submission, and an award under it, signed by both said arbitrators, and also by one Joseph Stuart. 1. It was too late to revoke and sue after final submission by statute. (2 R. S. p. 631, sec. 23; 5 Paige, 575; 11 Paige, 529.) 2. It is no -objection to the award, that it was signed by Joseph Stuart, as well as by the two arbitrators. (1 Hill, p. 489 ; 1 Barbour, 325.)

III. It is not necessary to set out the terms of the award. (Watson on Arbt., Law Library, vol. 43, p. 89, fol. 134; 6 John 14 ; 1 Hill, 32 ; 3 Barbour, 565; 7 Barbour, 431.) 1. Or that plaintiff had any knowledge or notice of award. 2. Or that the award was in pursuance of the terms of submission. (1

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Cowen, ,117.) 3. Or that defendant have complied with said award. (Law Lib., vol. 43, p. 152, fol. 259.) 4. Or that the arbitration was conducted according to the terms of the bonds, &c. 5. Or was setting out the bonds necessary in our answer.

IV. Because, on demurrer, all intendments are in favor of the awards being in pursuance of the submission. (1 Cowen, 117; 11 Illinois Rep. p. 565.)

V. And even if the arbitration had proved ineffectual, it would seem that suit could not be brought on the original cause of action until and unless defendant refused to join the plaintiffs in submitting the case under the agreement. (Mayor of New York v. Butler, 1 Barbour, p. 325; 1 Hill, 409 .)

VI. Our amended answer avers fully sufficient to meet the whole of the second ground of plaintiffs’ demurrer.

Can demur to answer only for insufficiency of a counter claim. (See Code, Reply, p. 169; Smith v. Greening, 2 Sand. S. C., p. 702; 3 Code Rep. 206 .)

M. S. Burlock, for plaintiffs, the respondents.

I. As to the first branch of the answer: 1. The terms of the bonds should be set out so that the court can see whether their terms have been complied with. (Russell on Arbitrators (Law Library, vol. 47), 492, and cases cited.) 2. It does not in any way appear, that the parties agreed to submit the matters in controversy to Joseph Stuart, as umpire. 3. The answer should set out the terms of the award, so that the court can judge whether it is made in accordance with the submission, and whether it is such an award as would be a bar to the action, and whether the parties are equally bound by it; as an award is not a good plea unless it appear that the parties are equally bound by it. (Kyd on Awards, 389. Russell on Arbitrators (Law Library, vol. 47), 492, and cases cited.) All the forms of pleas of award to be found in the books, set put the award in full: (Kyd on Awards, 465; Chitty’s Pleadings, vol. 3, p. 927; Tillinghast’s Forms, 474; Chitty’s Precedents, vol. 1, p. 220; Burrill’s Appendix, 3533; Sandford’s S. C. Rep., 405.) 4. The answer should allege that the award was delivered to the parties. It is not sufficient to allege that it was delivered to

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the defendant. Each party is entitled to the award. (Pratt v. Hackett, 6 John. 14 ; Buck v. Wadsworth, 1 Hill, 321 .) 5. It should appear that the award was made within the time required by the bonds. (Russell on Arbitrators (Law Library, vol. 47), 493, and the cases there cited.) 6. It should appear that the arbitration was conducted and submission had pursuant to the terms of the bond. It is not sufficient to aver that it was duly made. (Russell on Arbitrators, 492, and cases cited.) 7. It should appear that the award extends to the whole cause of action, otherwise it is not a good plea to the action. (Kyd on Awards, 384; Clapcott v. Davy, 1 Ld. Raym. 612; Jackson v. Ambler, 14 John. 96 ; Russell on Arbitrators, 503.) 8. It should appear that the defendant has performed the award. (Russell on Arbitrators, 503; Allen v. Milner, 2 Tyrwhitt, 113; Brazil v. Isham, N. Y. Common Pleas, Nov., 1852.)

H. As to the second branch of the answer: 1. It should appear to what amount the goods mentioned in the answer were damaged, and what amount the defendant seeks to have deducted on account of such damage. 2. It should appear by what officers the goods were valued in Mexico, and by whose direction they were so valued, and whether the plaintiffs consented to, or had any notice of such valuation. 3. It should appear in what manner the goods were sold, and that the sum the goods brought at the alleged sale was their full value at the time of their purchase from the plaintiffs, and that the plaintiffs consented to, and had due notice of the time and place of sale.

The answer is manifestly bad in,, both its branches. The Code has, indeed, abolished all technical rules of pleading, but it has not abolished those which are dictated by good sense, and are necessary to be observed in order to carry into effect its own provisions. It requires that the answer shall set forth “the facts constituting a defence.” The facts, therefore, which are relied on must be set forth at least with so much certainty as to enable the court to say, that admitting them to be true, they constitute a bar to the plaintiffs’ recovery. All the facts set forth in this answer may be true

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The first branch of the answer avers that the parties submitted all matters in controversy relative to the note in suit to certain persons as arbitrators, that after the final submission of these matters upon a hearing of the parties, the arbitrators made and published an award, and that their power as arbitrators was not revoked prior to such final submission, all which may be true, and yet the award be on its face a nullity, or if valid on its face, the power of the arbitrators before it was made, may have ceased to exist.

It may not be necessary to set forth the terms of an award which is relied on as a defence, but it is necessary to set forth its substance, so that the court may be able to say that, if such an award was made, the action is barred. Here nothing is stated but the fact of an award which may not have followed the submission, or not have been made within the time limited by the submission, or may by its terms have directed or permitted the plaintiffs to prosecute this very action.

The averment that the power of the arbitrators was not revoked prior to the final submission admits by implicatioh that it was revoked before the award was made, and we incline to think is founded upon an erroneous interpretation of the Statute. The provision in the Revised Statutes, which declares that “ neither party shall have power to revoke the powers of the arbitrators after the cause shall have been finally submitted to them upon a hearing of the parties for their decision” (2 R. S., p. 544, § 23), has been held by Chancellor Walworth to be general, but we think it may be reasonably doubted whether it ought not to be construed as referring exclusively to those arbitrations, which the statute professes to regulate, leaving, in respect to other arbitrations, the rule of the common law unchanged, namely, that the powers of the arbitrators may be revoked at any time before they have made their award. It is not necessary, however, to decide this question, nor are we to be understood as deciding it. It is enough that the complaint does not show affirmatively that an award has been made which is a bar to the action.

It is not to be inferred from what we have said that either

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in a complaint, where the action is brought upon an award, or in an answer where an award; is set up as a defence, it is necessary to negative a revocation of the powers of the arbitrators. As the proof of such a revocation plainly rests upon the opposite party, so must also its averment.

Next, as to the second defence. The goods sold by the plaintiffs to the defendant and which it is alleged were the consideration for the note in suit, may have been unsound and unmerchantable at the time of the sale, but unless there was a warranty, or fraud in the sale, the' defendant is not, for that reason, entitled to any deduction from the price; and as we read the answer, neither a warranty, nor fraud is alleged. It is indeed averred that the goods were sold by sample, but according to the recent decisions in the Court of Appeals, a sale by sample is not a sale by warranty, unless there was a positive agreement that the bulk of the goods should correspond with the sample. As such an agreement is necessary to be proved, it is also necessary to be averred.

So the answer also alleges that the goods were not in the state represented by the plaintiffs, but it does not state what the representations made by the plaintiffs were, or that they knew them to he false; there is therefore no allegation of fraud.

There are other objections to the answer which were urged by the counsel for the plaintiffs, but, without expressing any opinion as to their sufficiency, we prefer to place our judgment upon those which we have stated.

The order allowing the demurrer is affirmed with costs, with the usual liberty to the defendant to amend.