Altman v. Benjamin ( 1874 )

Daly, Chief Justice.

The agreement was one coming under that class of cases pointed out and distinguished by Judge Allen in The President &c. of the Delaware &c. v. The Pennsylvania Coal Co. (50 N. Y. 266), as cases in which the agreement which creates the liability and gives the right, qualifies it' by providing that before a right of action shall accrue, certain facts shall be determined, or amounts and values ascertained, which is made a condition precedent, by express terms, or by implication. When that is the case, the courts give full effect to the condition, and the party who would enforce the agreement must show that he has done all, upon his part, that could be done to carry it into effect (The United States v. Robeson,. 9 Peters, 319).

In Scott v. Avery (5 H. of Lords’ Cases, 811; 8 Exch. 417), the judges who delivered opinions went farther than this, or at least some of them, by holding that no action lies at all until the award is made; that that is part of the cause of action ; that the promise is to pay only what may be awarded ;■ that it is competent to agree that a sum of money shall be paid upon such a contingency or in such an event, and that there-can be no right of action until an award is made. This appears to have been followed in the subsequent cases of Brauenstein v. The Accidental Death Ins. Co. (1 Best & Smith, 782),. and Tredman v. Holman (1 Hurls. & Colt. 72). But it was-not necessary, in either of these cases, to go this length. In Scott v. Avery, the plaintiff declined to accept the sum ascertained by the committee. In Brauenstein v. The Accidental Death Ins. Co., the defendants averred that they had always been ready to arbitrate; but that there had been no arbitration ; and in Tredman v. Holman, the plaintiff refused to arbitrate. Nor was it necessary to go so far in the case in the Court of Appeals, for though in that case arbitrators were appointed, they never had a meeting ; the matter in dispute had. never been submitted to them. Nor is it necessary in the case now before us. All that was shown in this case was that each party had appointed an arbitrator; that they had met and could not agree upon a third one; the contract making provision for an arbitration by three arbitrators, each party selecting one, and the two so selected appointing the third. To the three so-selected the matter was to be referred, and the decision of any two of them was to be final.

It does not follow that because the two arbitrators selected could not agree upon a third that an arbitration was impossible. If they could not agree, it was for the plaintiff, before resorting to this action, to propose to the defendant the selection of two others in place of those who could not agree upon a third. If the defendant had then refused to do so, or if the plaintiff could show that the disagreement was brought about by the defendant’s instrumentality for the purpose of preventing an award, or anything from which it appeared that he was acting in bad faith, or interposing obstacles so that no award might be had, then the position of the plaintiff would be very different. As the defendant is the one who is to pay such further sum as the good will of the business is decided by the arbitrators to be reasonably worth, the law would not allow him to evade it .by preventing the making of any award. If, through his acts and bad faith, or from any other cause, an arbitration has become impossible, I am not prepared to say that the plaintiff would not have a right of action. But that is not this case. The arbitration and award is a condition precedent to the plaintiff’s right of action, and he cannot maintain it unless he shows that he has done all in his power, and that it is on his part impossible to carry the arbitration into effect. The judgment therefore of the referee should be affirmed.

Loew and J. F. Daly, JJ., concurred.

Judgment affirmed.