Backus v. Coyne , 1876 Mich. LEXIS 219 ( 1876 )

Marston, J.:

Defendant in error brought an action of assumpsit against plaintiffs in error, copartners, who were doing business under the firm name of Backus Bros., upon a general average claim, which had been assigned to him by John Stewart.

It is first objected that the doctrine of general average cannot be enforced in a court of common law, and Rossiter v. Chester, 1 Doug., 154, is relied upon. It was held in that ease that the great lakes of this country were not subject to admiralty jurisdiction. This was really the principal question in that case, and the court held,' as a necessary consequence of the views taken in the discussion of the main question, that the doctrine of general average was known only to the maritime law, and could not be enforced in a court of common-law jurisdiction. The supreme court of the United States since then has held that admiralty jurisdiction did extend over the lakes, and this is now the universally recognized doctrine. We do not therefore consider ourselves bound by what was said in Rossiter v. Chester, touching the questions raised in this case.

The general average that is to be made, towards a loss sustained by some for the benefit of all, is founded upon sound equitable principles. And where a loss occurs which gives rise to the principles of general average, and the goods which have been saved by the sacrifice of other property have been delivered over to the owner, we see no good reason why a promise should not be implied, upon the ground that in equity and good conscience he should contribute to the loss which others sustained for his benefit, nor why such promise might not be enforced in a common-law court. There may be cases where, on account of the number of parties interested, difficulty might arise, which might not in a court of equity, but none such arises in this ease.

In Scaife v. Tobin, 8 B. & Ad., 523, where it was sought to hold a consignee, not the owner of the goods, liable to *pay general average, Lord Teñterden, C. J., said: “A consignee, who is the absolute owner of the goods, is liable to pay general average, because the law throws upon him that liability. There is no other person to pay it.” And Littledale, J., said: “There is no doubt that an absolute owner of goods is liable to pay general average.” In Dike et al. v. Propeller St. Joseph, 6 McLean, 573, speaking of general average, it was said that this contribution might be recovered in law or equity. “If the demand be a lien upon any property within reach of the court, the proceedings may be in rem; and if any individual within the process of the court is liable, the proceedings may be against him in personam.”

To the same effect is 1 Parsons on Maritime Law, 334; Abbott on Shipping, 508, citing Marsham v. Dutrey, Select Cases of Ev., 58; Birkley v. Presgrave, 1 East, 220; Dobson v. Wilson, 3 Campb., 480. We have not been referred to any cases, nor have we been able to find any, except Mossiter v. Chester, holding that the common-law courts have no jurisdiction in this class of cases.

The only other objection we consider it necessary to notice, grows out of that portion of the court’s charge to the jury, that the submission made by Absalom Backus to Mr. Clark was not a submission to arbitration, but was a mere submission to him to adjust or make the proper apportionment between the parties from items already agreed upon; and therefore that Absalom Backus had authority as a member of the firm of Backus Bros, to bind his copartner by such submission.

It was conceded by both court and counsel that a partner could not submit partnership matters to arbitration without a special authority for that purpose from his copartners.

From an examination of the record in this case, I am not at all satisfied that the parties (Stewart and Absalom Backus) had agreed as to the items, and merely required a proper apportionment. Even conceding the distinction drawn by the court to have been oorreot, it was not claimed that *the adjustment was made in the usual manner, or according to custom, but in accordance with a special agreement entered into between Stewart and Absalom Backus. Witnesses were introduced and examined. Absalom Backus and Stewart each made a statement, bills and other papers were submitted to Mr. Clark, and from all these he was to and did make the adjustment, according to the agreement, so far as the agreement governed, and in other respects according to the usual custom and law of general average.

I think, therefore, it cannot be said that here was a case of apportionment only, from items agreed upon, according to the usual custom and law of general average. The adjustment was not in accordance with custom, but in accordance with the agreement of the parties. It was not such an adjustment as the law, if loft to itself, would have made. Whether it was in fact more or less favorable to the firm is immaterial, as that is not the correct test of a partner’s power. Certain questions, both of fact and law, were submitted to Mr. Clark. His decision was sought to be made conclusive between the parties in this case. His duties were not merely clerical, but required the exercise of judgment.

An agreement to abide by the statement of a third person, as to a disputed fact, or a reference to a third person to make a mere clerical computation from an agreed state of facts, as the computation of interest upon a note, might not be considered as analogous to a submission to arbitration.— Grimes v. Blake, 16 Ind., 162. But where witnesses are examined, and the person to whom the submission is made is called upon to exercise his best judgment upon the matter in. controversy, and to decide conclusively between the parties according to the law and the facts, upon a consideration of all the testimony and arguments submitted to him, we think this must be considered a case of arbitration, and beyond the power of one partner to make on behalf of the firm, without a special authority for that purpose from his copartners. — Buchoz v Grandjean, 1 Mich., *367; Smith v. B., C. & M. R. R. Co., 36 N. H., 458; Savercool v. Farwell, 17 Mich., 321; Ortman v. Green, 26 Mich., 212.

Where parties submit their disputes to the judgment and decision of a third party, whose decision is to be final and binding, it would be very difficult, even should the attempt be made, to draw a line by which it might be determined whether a given case should be considered as a submission to arbitration or otherwise. The only safe rule would be to consider all cases of dispute, when thus referred, to be a Submission to arbitration.

Upon this point I think the judgment should be reversed, with costs, and a new trial ordered.

The other justices concurred.