F. EGERTON WEBB ET AL.
SUSAN DAY PARKER ET AL.
[114 N.Y.S. 490] W. W. Mumford, for appellants.
Henry L. Sprague, for respondents.
Argued before PATTERSON, P. J., and INGRAHAM, LAUGHLIN, CLARKE, and SCOTT, JJ.
This is an action in equity to set off awards in separate statutory arbitrations. The plaintiff has been successful below, and the appeal comes to us upon the judgment roll alone; none of the evidence taken before the court being returned.
There is no dispute as to the facts. In the year 1904, Susan Day Parker and her husband, Dr. Chas. T. Parker, entered into three arbitration agreements with the plaintiffs, a firm of stock brokers, as follows:
[114 N.Y.S. 491] First. Between Mrs. Parker and the plaintiffs respecting $50,000 of Union Pacific bonds which plaintiffs had at one time held for Mrs. Parker, but which they had sold and had credited the proceeds to their general account with Dr. Parker. This transfer had been made by direction of Dr. Parker, and Mrs. Parker claimed that she was not bound thereby. Plaintiffs claimed that she was bound. This account was known as " Susan Day Parker Trust Account."
Second. Between Mrs. Parker and plaintiffs respecting an account known as the " Dr. C. T. Parker special account," concerning which it was contended by Mrs. Parker that she was the real party in interest, and that certain transactions appearing therein had not been authorized by her or Dr. Parker. The balance standing to the credit of this account had been transferred to the general account of Dr. Parker, and it was contended by Mrs. Parker that this transfer had been made without her knowledge or consent, and contrary to the direction given by Dr. C. T. Parker, whereby she claimed that she had been wrongfully deprived of such balance, and was entitled to be repaid the same. The plaintiffs controverted these claims.
Third. Between Dr. Chas. T. Parker and the plaintiffs respecting an account carried by the latter, known as the " C. T. Parker general account," as to which Dr. Parker disputed his liability for certain transactions set out in the account. It was to this account that certain credit balances had been transferred, claimed to belong to Mrs. Parker, and which constituted the subjects of the two arbitrations to which she was a party. The only questions submitted to the arbitrator respecting this account were: (a) Which, if any, of the disputed transactions, were binding upon Dr. Parker; and (b) whether the plaintiffs had negligently and improperly failed to carry out any orders given to them by Dr. Parker.
An examination and comparison of the several submissions shows that there appeared to the credit of Dr. Parker, in his so-called general account, certain sums which were claimed by Mrs. Parker, and which she contended should not have been placed to Dr. Parker's credit, and should be repaid to her, while, on the other hand, the general account of Dr. Parker, including these transfers to the credit side, was accepted as accurate, excepting as to certain charges therein against Dr. Parker which were disputed. It was therefore perfectly possible that the first two submissions might result, as they did, in substantial awards in favor of Mrs. Parker for moneys improperly transferred to Dr. Parker's credit in his general account, while, owing to the restricted nature of the submission respecting that general account, the arbitrator would be unable to strike from its credit side the amounts improperly placed there because they belonged to Mrs. Parker. Thus, plaintiffs might be mulcted in a large sum in favor of Mrs. Parker, without being entitled to charge it back to Dr. Parker, to whose credit it had been placed. To meet this state of affairs, the parties, on June 19, 1905, nearly two years before the arbitrator made his two awards, entered into a supplementary agreement, reciting the foregoing submissions and modifying them in some particulars. The [114 N.Y.S. 492] important clauses, so far as concerns this controversy, were the following:
" (c) Should the arbitrator in any particular determine in favor of Mrs. Parker against Webb & Prall in the special account or in the trust account, then the arbitrator shall treat the sum or sums so determined as an offset or deduction against Dr. Parker in his said account (the general account) and in favor of Webb & Prall, but only in case the arbitrator shall determine that a sum corresponding to the sum or sums so determined in favor of Mrs. Parker, shall have been entered in said Dr. Parker's account (that is the so-called general account) without fraud or wrongdoing on the part of Webb & Prall or Mr. Speir or either of them, to the credit of Dr. Parker and less such claims or damages which Dr. Parker may be able to establish in such account, by reason of fraud or wrongdoing on the part of Webb & Prall or of Mr. Speir or of either of them.
" (d) Any final determination by the arbitrator in favor of Webb & Prall against Dr. Parker, shall constitute an offset, pro tanto, in their favor against any determination in favor of Mrs. Parker against Webb & Prall; and on the assignment by Webb & Prall of any sum finally determined in their favor against Dr. Parker to Mrs. Parker, or to such person as Mrs. Parker may name, she will satisfy, pro tanto, any sum determined in her favor against Webb & Prall. The intention of this clause being that Mrs. Parker shall have the right to enforce against Webb & Prall the amount of any sum determined by the arbitrator in her favor, which shall be in excess of the offsets or deductions, if any, determined by the arbitrator in favor of Webb & Prall and against Dr. Parker, as above provided in clause (c)."
It will be perceived that, of the two clauses above quoted, that one designated as " c" was intended to control the action of the arbitrator, and to add to his power by permitting him to determine whether the credits transferred to Dr. Parker's general account, from the accounts belonging to Mrs. Parker, had been so transferred without fraud or wrongdoing on the part of plaintiffs or Mr. Speir, and, if so, to deduct such credits from Dr. Parker's general account. The clause designated as " d" had no bearing upon the acts of the arbitrator, but was an independent agreement, outside of the arbitration, as to what should be done between the parties after arbitrator had made his award. In other words, the arbitrator had nothing to do with any offset. He was to determine what was due as between plaintiffs and Mrs. Parker, and plaintiffs and Dr. Parker. When that had been determined, the parties to the arbitration agreed between themselves how and under what conditions the awards should be offset. The arbitrator fulfilled with exactness the duties devolved upon him, as well by the original submissions, as by the supplementary agreement from which we have quoted. He made three awards, one upon each submission. They were all made upon the same day and should be read together and in the light of the above quoted clause " c" of the supplementary agreement. He found in Mrs. Parker's favor upon the submission respecting the so-called " trust account," and the " Dr. C. T. Parker special account," awarding her, as against the plaintiffs, the sum of $55,750 with interest, with regard to the trust account, and $170,914.96 with interest, with regard to the " Dr. C. T. Parker special account," and as to each of these sums he finds that they had been transferred to the credit of Dr. C. T. Parker in his so-called general account, and that such transfers were made " without fraud or [114 N.Y.S. 493] wrongdoing on the part of Webb & Prall, or of Mr. Speir, or of either of them."
With respect to the submission concerning the " Dr. C. T. Parker general account," he found that there had been erroneously credited to that account by Webb & Prall, " but without fraud or wrongdoing on their part, or on the part of Mr. Speir, or either of them," the sum of $226,664.96 from the " C. T. Parker special account" (which included the proceeds of the $50,000 of bonds embraced in the trust account), which sum belonged to Susan Day Parker, and not to Dr. Parker, and was not transferred by her authority or with her consent. He decided therefore that the general account should be corrected by eliminating from the credit side thereof the said item of $226,664.96, and thereupon decided and awarded that that sum was due to plaintiffs from Dr. C. T. Parker upon said general account. With the making of these awards there was presented the precise situation for which the parties had provided in their supplementary agreement of June 19, 1905. The arbitrator had decided in favor of Mrs. Parker as against Webb & Prall in the aggregate to the amount of $226,664.96, with interest, and in favor of Webb & Prall as against Dr. Parker in a like sum, also with interest. He had found that the sum had been erroneously transferred from Mrs. Parker's accounts to the credit of Dr. C. T. Parker's special account " without fraud or wrongdoing on the part of Webb & Prall, or of Mr. Speir, or of either of them," and he had treated that amount as an offset or deduction against Dr. Parker in his general account.
Under these circumstances, Mrs. Parker had agreed by clause " d" of the supplemental agreement of June 19, 1905, that the determination in favor of Webb & Prall against Dr. Parker should constitute an offset pro tanto in their favor against any determination in favor of Mrs. Parker against Webb & Prall, and that on the assignment by Webb & Prall to Mrs. Parker of any sum finally determined in their favor against Dr. Parker, or to such person as Mrs. Parker may name, she would satisfy pro tanto any sum determined in her favor against Webb & Prall. It is this agreement which the plaintiffs seek to compel Mrs. Parker to specifically perform. They have tendered to her an assignment ...