Pumphrey v. Pumphrey

URNER, J.,, delivered the opinion of the Court. The plaintiffs and the defendant are brothers who own in equal proportions the capital stock of the Riviera Beach Development Company. On July 12th, 1934, they entered into a written agreement relating to their exercise of an option for the purchase of the interest in the stock of that corporation, and of the Sunset Beach Development Company, which had been held by their brother-in-law, and providing for the arbitration of any dispute which might arise as to their respective rights and interests under the agreement or in the two companies. In March and May, 1935, the parties submitted for arbitration certain questions of indebtedness and compensation which arose from their relations to the companies and were involved in conflicting claims.

As a result of the second of those arbitrations, the defendant’s employment by the companies was terminated. In December, 1935, the plaintiffs, without the assent of the defendant, submitted for arbitration the following questions : “1. Whether the defendant should use his residence or any other building at Riviera Beach (or at Sunset Beach) to transact his general real estate brokerage business. “2. Whether the defendant, except with the consent of the two Development Companies, should act as real estate broker or agent for the sale or rental of property at Riviera Beach and Sunset B.each not owned by either of those corporations. “3.

Whether the defendant should be permitted to acquire property at Riviera Beach or Sunset Beach, not owned by either of the two Development Companies, to be used for any purpose other than as a residence for the defendant and his family.” ³²⁵ After a ¡hearing, in which the defendant did not participate, the arbitrators answered in the negative each of the questions just stated. This suit for an injunction to effectuate the decision thus rendered by the arbitrators, in so far as it related to Riviera Beach, is contested upon the theory that the questions involved in their determination were not within the purview of the arbitration agreement. That defense was sustained by the chancellor, and the appeal is from a decree dismissing the bill of complaint. It was1 stipulated at the trial below that the only question in the case is whether the subject of the arbitration of December, 1935, was within the scope of the agreement of July 12th, 19,34, and that the relief prayed for should be granted in the event of a decision favorable to the plaintiffs upon the issue thus defined.

This court has repeatedly said that, “as arbitrations are intended to compose disputes in a simple and inexpensive manner, whenever the parties to one have had a full and fair hearing, the award of the arbitrators will be expounded favorably and every reasonable intendment made in its support.” McDonald v. Real Estate Board, 155 Md. 377, 382 , 142 A. 261, 263 ; Dominion Marble Co. v. Morrow v. 130 Md. 255, 260 , 100 A. 292 ; Roberts Bros. v. Consumers’ Can Co., 102 Md. 362, 368 , 62 A. 585 ; Witz v. Tregallas, 82 Md. 351 , 33 A. 718 ; Garitee v. Carter, 16 Md. 309, 312 . But in Bullock v. Bergman, 46 Md. 270, 278 , it was said in the opinion: “While Courts regard awards with favor, and every intendment is made for their support, as was said in Canton v. MacTavish, 10 G. & J. 193 ; Ebert v. Ebert, 5 Md. 353 and Roloson v. Carson, 8 Md. 208 , yet it is well settled that they cannot be supported, if the matters awarded are not within the terms of the submission; the parties are not bound except by their agreement, and a decision by the arbitrators of any matter not referred to them is beyond their authority.” In 3 American Jurisprudence, Arbitration and Award, sec. 41, it is said: “There is nothing peculiar in the rules ³²⁶ of interpretation applied to. arbitration agreements. As in the case of all agreements, the courts seek to give effect to the intent of the parties, as evidenced by the agreement' itself, which will be liberally construed to that end. ¡Where the meaning of words used is in controversy, the language will be taken in its natural sense, without straining it in either direction, and it is the rule that the agreement will be construed as a whole. While the courts seek to uphold arbitration agreements even where they are somewhat uncertain and indefinite, provided the deficiency may easily and certainly be supplied, and while it has been held that subjects not within the strict letter of the agreement, but plainly and necessarily within the spirit are included, the terms of the agreement are, nevertheless, exclusive.

Under the general rule, no matter not plainly included, may validly be determined by the arbitrators, but the parties are left to the ordinary course of litigation for their remedy.” To the same| general effect is the ¡statement in 5 C. J. 407.‘- As we construe the agreement now before us, it committed the parties to arbitrate only disputes relating to their respective interests in the designated corporations and in the options and property to which the agreement referred. That purpose is reflected (in the recital of a desire by the parties “to agree upon a method of arbitration should any dispute arise