Bishop v. Manufacturing Co. , 78 S.C. 312 ( 1907 )

October 5, 1907. The opinion of the Court was delivered by This is an appeal from a decree of Judge Memminger awarding a writ of mandamus to compel the clerk of the Court of Common Pleas to enter judgments in favor if each of the plaintiffs on awards of arbitrators. The important question is whether the agreement contemplated an arbitration under the statute, or at common law. For, if there was valid award under a statutory arbitration, then, under the statute, it was the clear ministerial duty of the clerk to enter the judgment in accordance with the award.

The plaintiffs, George C. Bishop and Mrs. C.B. Nolan, had instituted separate actions against Valley Falls Manufacturing Company for damage to their lands alleged to be flooded by the defendant's dam. While the actions were pending, parties to the suits made the separate arbitration agreement now under consideration. The agreements were identical, and we first consider whether, on their face, without respect to the affidavits before the Circuit Judge, they show an intention of the parties to have an arbitration under the statute.

In the absence of express stipulations on the subject, we think the presumption is in favor of a statutory arbitration. In early times the disposition of the courts was to look with jealousy on arbitrations, and give them as little force as possible, but later and more intelligent judicial sentiment is strongly in their favor. As said in Greenville v. Spartanburg,62 S.C. 105, 125, 40 S.E., 147: "Courts favor awards and will indulge every reasonable presumption to uphold them, and whoever assails them has the burden of clearly establishing their invalidity." An award under an arbitration at common law was not the end of the matter, for unless the losing party chose to comply with it, the successful party was obliged to incur the delay and expense of bringing his action to enforce compliance. To remedy this defect many States have passed statutes providing for and regulating arbitration, and authorizing the entry of judgment on the award itself. The statutes are remedial and should be liberally construed so as to advance the legislative purpose of putting an end to litigation.

When parties enter into an agreement designed to end litigation, their contract, as far as its language will allow, should be construed to be effectual and complete to that end. Hence, when on its face the contract may be regarded as providing for either a statutory arbitration or an arbitration at common law, it should be referred to the statute.

The defendant insists, however, the agreement cannot be referred to the statute, because the arbitrators were agreed on, and not selected by the parties as required by the statute. The views of other courts give us little aid on this point, because, for the most part, they relate to statutes quite different from ours. Our statute is somewhat peculiar in language, but very simple. The agreement for arbitration is complete when one party to a dispute proposes arbitration and the other assents to it, and each party enters into bond, in double the amount involved, to faithfully abide the result. The selection of arbitrators is no part of the agreement required by the statute. After the agreement has been made, the statute provides a method of selection so that there may be no reason for difference between the parties on the point. But this is nothing more than conferring on each party the right to demand that the arbitrators be selected in the manner indicated by the statute. This right, like all others, may be waived by agreement of the parties to select the arbitrators in some other way. Hence, it is illogical to say an arbitration cannot be referred to the statute merely because the parties agree on the arbitrators instead of exercising the right to require them to be selected in the manner indicated in the statute.

For these reasons alone, we think the arbitration should be regarded statutory. But the written agreement indicates on its face an intention to proceed under the statute. In it the parties followed the statute by binding themselves in double the amount indicated by the complaint to be involved, to faithfully abide the result of the arbitration. In addition to this, the Valley Falls Manufacturing Company agreed "to pay the costs of the arbitrators, of the witnesses, and of any court officers connected with said arbitration." Unless the arbitration was to result in a judgment as provided by the statute, court officers would have had no costs in connection with it, and in using this language the parties must have had in contemplation the costs of entering the judgment.

The defendant further contends, even if the agreement to arbitrate should be referred to the statute, it was revoked before action under it, and, therefore, no judgment could be entered on the award. This claim of revocation rests on the service of a written notice on the plaintiffs before the arbitrators had acted. But this notice was nothing more than a statement of defendant's position that the agreement contemplated a common law, and not a statutory arbitration. So far from repudiating the agreement, the defendant appeared and participated in the arbitration. The defendant's expression of opinion as to the effect of its written agreement, obviously, was not a revocation.

The judgment of this Court is, that the judgment of the Circuit Court be affirmed.