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Smith-Schultz-Hodo Realty Co. v. Henley-Spurgeon R

Supreme Court of Alabama
Mar 10, 1932
140 So. 443 (Ala. 1932)


6 Div. 882.

March 10, 1932.

Appeal from Circuit Court, Jefferson County; Joe C. Hail, Judge.

Harsh Harsh and Francis Hare, all of Birmingham, for appellant.

The award of arbitrators was sufficient to support an action thereon. Reynolds v. Reynolds, 15 Ala. 398; Tuskaloosa Bridge Co. v. Jemison, 33 Ala. 476; 1 Encyc. Dig. Ala. Ry. 699, § 66, p. 702; Odum v. Rutledge, 94 Ala. 488, 10 So. 222; Brewer v. Bain, 60 Ala. 153; Payne v. Crawford, 97 Ala. 604, 11 So. 725; Brown v. Mize, 119 Ala. 10, 24 So. 453; T. C., I. R. Co. v. Roussell, 155 Ala. 435, 46 So. 866, 130 Am. St. Rep. 56. If an award is capable of two interpretations, that one will be adopted which will give effect to the award. Hiscock v. Harris, 74 N.Y. 108; Cullifer v. Gilliam, 31 N.C. 126; Buckley v. Ellmaker, 13 Serg. R. (Pa.) 71. Parol evidence is admissible to explain ambiguity in an award. 3 Cyc. 804. An agreement to submit to arbitrators may be oral and its terms may be general. Gardner v. Newman, 135 Ala. 522, 33 So. 179. By going into an arbitration without objection, a party waives any objection as to matters of ministerial detail. Chapman v. Ewing, 78 Ala. 403; Badders v. Davis, 88 Ala. 367, 6 So. 834. Evidence of notice to parties of the arbitration proceedings is admissible. Crook v. Chambers, 40 Ala. 239. Evidence of what took place in arbitration proceedings is admissible and an arbitrator is a competent witness to these facts. Evans v. Clapp, 123 Mass. 165, 25 Am. Rep. 52; Cady v. Walker, 62 Mich. 157, 28 N.W. 805, 4 Am. St. Rep. 834. In absence of a special contract between the parties, evidence of known custom and usage in respect to the course of dealing in which they are engaged is admissible evidence of their intention to be bound according to the tenor of such known custom or usage. Kinney v. S. N. A. R. Co., 82 Ala. 368, 3 So. 113; E. T. V. G. R. Co. v. Johnston, 75 Ala. 596, 51 Am. Rep. 489. One engaged in a given trade or business is presumed to know its customs and usages. Jones on Evi. (3d Ed.) § 57, p. 62, § 464, p. 714, n. 71; Olesen v. Beckanstin, 93 Conn. 614, 107 A. 514; Raymond v. Tyson, 17 How. 53, 15 L.Ed. 47; Campfield v. Sauer (C.C.A.) 189 F. 576, 38 L.R.A. (N.S.) 837. A uniform custom is provable by hearsay. Lutz v. Van H. Brokerage Co., 199 Ala. 621, 75 So. 284.

Benners, Burr, McKamy Forman, of Birmingham, for appellee.

Custom, even if general and clearly established, cannot create a liability of one person to another. 17 C. J. 501; Am. Lead Pencil Co. v. N.C. St. L. R. Co., 124 Tenn. 57, 134 S.W. 613, 32 L.R.A. (N.S.) 324; Great Lakes C. D. Co. v. Seither Tr. Co. (C.C.A.) 220 F. 28, 35; State v. Atchison, etc., R. Co., 176 Mo. 687, 75 S.W. 776, 63 L.R.A. 761; Leach v. Perkins, 17 Me. 462, 35 Am. Dec. 269. If the so-called award was made pursuant to an actual arbitration to which appellee was a party, it is unenforceable because it is a mere recommendation and is too uncertain to support an action. Roundtree v. Turner, 36 Ala. 555; 2 R. C. L. 384, § 30.

The counts claiming upon an award of arbitrators (Nos. 5 and 7) aver the existence of a controversy between plaintiff and defendant as to whether or not defendant was due plaintiff anything on account of a commission received by defendant in the sale of some property in Birmingham. There is nothing in them which could reflect upon the bona fides of such controversy, though appellee thus argues. The counts allege a submission to certain named arbitrators.

A submission to arbitration of a controversy, when followed by an award, has a distinct legal import and contains the essential features of a binding contract. It need not ordinarily be in writing, and it is not then necessary to allege that it was in writing. After an award the proceedings import a legal obligation to abide by it as in the nature of a judgment, if such award is in proper form, and conforms to the submission, and in the absence of some matter impeaching its effect, pursuant to well known principles. Gardner v. Newman, 135 Ala. 522, 33 So. 179; Roundtree v. Turner, 36 Ala. 555; Payne v. Crawford, 97 Ala. 604, 11 So. 725; Callier v. Watley, 120 Ala. 38, 23 So. 796; 5 Corpus Juris, 43, 139, § 333, 163, § 397; Reynolds v. Reynolds, 15 Ala. 398; Tuskaloosa B. Co. v. Jemison, 33 Ala. 476; Brewer v. Bain, 60 Ala. 153; Fuerst v. Eichberger, ante, p. 31, 138 So. 409.

The chief claim of defendant relates to the alleged uncertainty in the award. It was that defendant "is to see to it" that plaintiff receives one-half of the regular real estate commission in the sale of the property. It is averred in the complaint what in dollars was such regular real estate commission. The argument is chiefly that the words "is to see to it" that plaintiff receives such commission has no legal fixed effect, and does not create a definite duty.

The meaning of the words must be interpreted in the light of the surroundings and context in which they are used. The words above quoted from the award are not uncommon in ordinary parlance as expressive of an obligation to a definite extent, and have been discussed in some of the American reports. In the case of Greene v. Burton, 59 Vt. 423, 10 A. 575, 576, it is said: "The expression, 'would see that they had their pay,' implies a collateral promise; but if this form of expression was intended and understood as a promise to pay directly, and not conditionally, it would be so treated. The substance, and not the form, should control." Under the circumstances there shown it was held to import an unconditional promise. In Brannin v. Henderson, 12 B. Mon. (Ky.) 61, an acceptance by one of an order drawn on him, in which he uses this language, "I will see the within paid, eventually," it was held to import an unconditional promise presently to pay the amount. In Desmond v. Schenck, 36 App. Div. 317, 55 N.Y. S. 251, the words used were "would see" that a plumber was paid. It was held to be a direct and not a conditional undertaking, owing to the circumstances of the parties. Likewise is the case of Maddox v. Pierce, 74 Ga. 838.

A collateral undertaking means a contract of ordinary guaranty or suretyship. The former is conditioned upon the inability to collect from a third person; the latter is a promise to pay if the other does not (this also sometimes called an absolute guaranty). Watkins v. Lovelady, 186 Ala. 414, 65 So. 52; Ehl v. Watkins, 216 Ala. 69, 112 So. 426; Leftkovitz v. First National Bank, 152 Ala. 521, 44 So. 613; Craft v. Standard Acc. Ins. Co., 220 Ala. 8, 123 So. 271.

While the quoted words seem prima facie to indicate a collateral obligation, they do not, without more, show that it was not an absolute duty; that is, that it was conditional upon any other event. Such an undertaking not so conditioned is sometimes called an absolute guaranty and effective as a suretyship. Ehl v. Watkins, supra; Leftkovitz v. Bank, supra.

If the defendant had expressed an obligation to plaintiff in the language of the award, it would have been an unqualified agreement or an unconditional promise, presently to pay an ascertainable sum. And if such an agreement resulted from a dispute or controversy between them as to a liability from the promisor to the promisee for commissions earned in the sale of property, there would not be lacking any element of a binding contract. While the amount is not specified, it is ascertainable from what is specified. While the due date is not mentioned, the law supplies that as being instanter. Ehrman v. Stanfield, 80 Ala. 118. If the award furnishes the rule by which its amount may be ascertained, it is sufficient in that respect also. Roundtree v. Turner, 36 Ala. 555; Payne v. Crawford, 97 Ala. 604, 607, 11 So. 725; Odum v. R. J. R. R. Co., 94 Ala. 488, 10 So. 222.

We think that count 5 as originally filed was sufficient to meet the requirements which we have indicated. While the several amendments added some features which were not necessary, they may have added some to its clarity. We also think count 7 contained the essentials of a complaint in so far as pertains at least to the objections urged to it. Ehrman v. Stanfield, supra.

But the plaintiff also had the common counts. The rule of general use, adopted in this state, is that with respect to an award as with an express contract which provides only that one shall pay money, the common counts are sufficient, and it is not necessary to declare specially on the award or the contract. McCargo v. Crutcher, 23 Ala. 575; 5 Corpus Juris 217; Morrison v. Morrison, 3 Stew. 444; Merrill v. Worthington, 155 Ala. 281, 46 So. 477; Joseph v. Hoffman, 173 Ala. 568, 56 So. 216, 38 L.R.A. (N.S.) 924, Ann. Cas. 1914A, 718; Williams v. Shows, 187 Ala. 132, 65 So. 839; Gillis v. White, 214 Ala. 22, 106 So. 166.

So that as a matter of pleading plaintiff should have been allowed to prove the arbitration and award on the common counts, and having the right to do so, there was no injury in sustaining demurrers to counts 5 and 7. But the court sustained objections to plaintiff's evidence which tended to prove the facts of the arbitration and award, such as are alleged in counts 5 and 7. We assume the ruling of the court in thus excluding the evidence was upon the theory that the award did not sufficiently prescribe a duty by defendant to pay a definite sum of money to plaintiff. In the discussion of the complaint, we have expressed views different from such rulings of the court.

There were many exceptions in this connection, but we do not think it necessary to refer to each such ruling. There is no difficulty we think in shaping them on another trial to conform with our interpretation of the relation of the parties, in respect to the arbitration and award.

The other questions presented do not therefore appear to be important for our consideration, as they probably will not again arise.

Reversed and remanded.

ANDERSON, C. J., and GARDNER and BOULDIN, JJ., concur.

Summaries of

Smith-Schultz-Hodo Realty Co. v. Henley-Spurgeon R

Supreme Court of Alabama
Mar 10, 1932
140 So. 443 (Ala. 1932)
Case details for

Smith-Schultz-Hodo Realty Co. v. Henley-Spurgeon R

Case Details


Court:Supreme Court of Alabama

Date published: Mar 10, 1932


140 So. 443 (Ala. 1932)
140 So. 443

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