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Matter of the New York, Lackawanna and Western Railway Co.

considered themselves bound and sworn to ascertain and determine the compensation which ought justly to be made by the company to the party or parties owning or interested in the property, and to do justice between the parties, and as much justice to the railroad company as to Mr. Bennett, as far as they knew." The hearing has proceeded so far that the owner has introduced her evidence. The petitioner has not introduced its evidence and now moves to vacate the order appointing the commissioners. The questions for consideration are:

First. Have Messrs. Dunbar and Clark been guilty of misconduct such as is cause for their removal?

Second. Has the court on this motion the power to remove them?

Third. If it has, is this a proper case to exercise such power, in view of the contract existing between the parties! In disposing of these questions I shall confine myself to the conduct of the commissioners in receiving the evidence held by the general term to be illegal and incompetent, and their avowal that they do not consider themselves bound by the decision of the general term. Taking this statement in connection with their acts in receiving the evidence, it amounts to a declaration on their part that they understand the full import of the decision of the general term, and have made up their minds not to conform their conduct on the trial to it; they have intentionally and deliberately admitted evidence that the superior tribunal held to be incompetent and illegal. Is it their duty to follow the decision of the general term? It is the universal practice of the judge at special term and circuit, where the general term has decided the case, to follow the law as laid down by that court. Should he fail so to do it would lead to confusion, and the case could not be brought to a conclusion, as it would continue to vibrate between the two courts. It is clearly the duty of the justice at special term or circuit, when the general term has made a decision of the case, to accept its decision as the true exposition of the

Matter of the New York, Lackawanna and Western Railway Co.

law of that case, and follow it, whatever may be his individual opinion as to its correctness; and should he persistently refuse so to do, he would be guilty of misconduct in office. He may be able to find conflicting decisions upon the question, but it is sufficient for him that the law has been laid down by the appellate court (Adams agt. Bush, 2 Abb. [N. S.], 112; Greenbaum agt. Stein, 2 Daly, 223; Rochester and G. V. R. Co., agt. Clarke Nat. Bank, 60 Barb., 234; Jones agt. N. Y. and Erie R. Co., 29 Barb., 633, 636; Head agt. Smith, 44 How., 476; Cooper agt. Smith, 43 Supr. Ct., 9).

If the law laid down by the general term and followed by the judge at special term and circuit is not sound, the remedy of the aggrieved party is either an appeal to the court of appeals or a motion for reargument.

Does this same rule apply to these commissioners? While they are the persons agreed upon as commissioners, by the parties, they were appointed by the court; the contract provides that they shall be governed, in estimating the valuation and compensation (and that is substantially all the duty they have to perform) by the rules of law applicable to proceedings under the statutes, referring to the laws for the condemnation of lands for railroad purposes, "except as they may be modified by the agreement." The general term has held that notwithstanding the clause in the contract last mentioned, the commissioners erred in admitting evidence.

The agreement provides that "all the rights of appeal given by law shall be preserved to the parties." One of the rights of appeal in such proceedings is to seek a reversal of the report on account of the admission of improper evidence. If the commissioners can upon a retrial admit the same illegal evidence, the provision giving the right of an appeal to the parties, instead of being a right reserved, becomes an injury to the party aggrieved, for an appeal adds to his expense and avails him nothing. This right of appeal must have been inserted in the contract for some effectual purpose, and one object was that the errors of the commissioners might be cor

Matter of the New York, Lackawanna and Western Railway Co.

rected. The court has put its construction upon the contract, decided that the commissioners had taken an erroneous view of its meaning, and had erred in the admission of evidence; that decision becomes, by virtue of the agreement itself, a part thereof and is binding upon the parties. When parties enter into a contract they practically agree that they will, in carrying out its provisions, conform to the decision of the courts. In case controversies arise, they are at liberty to invoke the judgment of the highest tribunal the law has provided for the decision of their disputes; but when that tribunal has spoken, they must obey. The highest tribunal the law has provided to decide questions involved in this proceding, touching the admission of evidence, has interpeted the contract and decided upon the course the inferior tribunal shall pursue in the discharge of its duties. Having so spoken, they must observe the decision as a part of the contract. Had the agreement provided that no appeal should be taken from the award of the commissioners, they would not be bound by the strict rules of evidence, but could decide according to their sense of equity (62 N. Y., 392).

In such a submission the parties submit their controversies, saying to the arbitrators, "you shall not be amenable to a higher tribunal; we submit all our differences to you; do what you think is just in the premises; we will not appeal." But this agreement provides very differently, it says that each party may have the advantage of an adjudication of the appellate court. While this is conceded by claimants' counsel, they insist that as there is no appeal from the second award, the commissioners are not now amenable to any appellate tribunal, and therefore can do as they please as to following the decision of the general term. I am not satisfied that this position is correct, and cannot bring my mind to the conclusion that such is the import and meaning of the contract.

Is the refusal of the commissioners to follow the general term, misconduct, or mere error of judgment? The general term say in their opinion, referring to the class of evidence

Matter of the New York, Lackawanna and Western Railway Co.

admitted by the commissioners upon the first hearing, "the reference made to the earnings of other elevators with a view of proving the income of the property in question after its capacity is increased by the expenditure of the necessary amount for that purpose, is not a reliable or approved basis for estimate of value, but it becomes a matter of speculation depending upon too many circumstances to be entitled to consideration as evidence of value; and the same may be said of the contemplated relation to and operation of other property, and projects in view for connecting facilities for channels of transportation not in the control of the owner of the property in question. * * * And when an attempt is made to found an estimate of value based upon income upon those conditions, too many contingencies intervene to make such opinions evidence, or to furnish any legitimate aid to the tribunal required to determine the value of property. It cannot be seen that this character of testimony did not have its influence on the commissioners, if it did not control their action in reaching a result. In view of all the testimony it is difficult to escape the conclusion that the commission reached their result by the application of erroneous principles to the appraisal of value of the property in question, and that the amount of compensation awarded by their report was by that means increased considerably in excess of the fair market value of the property." The court held, that the admission of such evidence was error and set aside the award for that reason; and yet upon the second hearing the commissioners ignore this decision, expose their minds to the influence of this illegal evidence, and avow that it is done intentionally, and that they are not bound to follow the general term decisions. If this is simply an error of judgment, it is an error so palpable and material as to amount in law to misconduct. It is saying, in unmistakable language, "we will not investigate questions submitted to us in conformity to legal proceedings. We will not, in administering the law, conform to the law." If this be simply error of judgment, the

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Matter of the New York, Lackawanna and Western Railway Co.

probable consequences are so serious and disastrous that they should be averted if possible.

Has the court power on this motion to vacate the order made appointing these commissioners and thereby in effect remove them? While these commissioners are not arbitrators, the decisions of the courts in matters of arbitration may aid us in determinining the questions involved in this motion.

Where an arbitrator has proceeded upon a gross and palpable mistake of law affecting the merits the court will grant relief (45 How. Pr., 462). "If an arbitrator unreasonably refuses to hear a competent witness it is gross misconduct, for such refusal is against natural justice. If the whole cause be referred back to him by the court, his refusal to admit additional evidence is fatal. If an arbitrator, contrary to express directions, receives affidavits instead of oral testimony, it is misconduct which will invalidate his decision" (Morse on Arbitration and Award, 536, and cases there referred to). If arbitrators are guilty of misconduct in refusing to receive proper evidence or other misbehavior affecting the rights of a party, the court may set aside their award upon motion (Smith agt. Cutler, 10 Wend., 589; Walker agt. Frobister, 6 Vesey, 70; Matter of Application of Mayor of New York, 49 N. Y., 150; Matter of Prospect Park and C. 1. R. R. Co., 85 N. Y., 489). If the court can set aside an award on motion, why not remove an arbitrator for good cause before he makes his award? The opinion of the general term in this case says: "The court in the first instance might have refused to appoint these persons as commissioners, and may yet revoke the order of their appointment." Judge EARL, in the opinion in the court of appeals in this case, says: It is undoubtedly true that the court at special term was not bound to appoint the three commissioners named by the parties. It could have refused to appoint them and have left the parties either to abandon their agreement or to carry it out in some other way." If the court at special term could refuse to appoint the persons commissioners named in the contract,

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