Morville v. American Tract Society.

failure of one of the conditions named, but the society refused to pay the money back to the plaintiff.

The right of the plaintiff to recover the money so given was submitted by the parties to three arbitrators, by a submission entered into before a justice of the peace under the Gen. Stats., ch. 147. An award in favor of the plaintiff was duly returned to the Superior Court, and many objections were there made by the defendant to its acceptance. It is necessary to consider only those which were relied on at the argument.

1. The defendant insisted that the contract made with the plaintiff and the submission to arbitration of the claims arising under it, were not within the chartered powers of the society. The act of incorporation provides that the persons therein named shall be a body politic, "for the purpose of publishing pious and useful books and tracts for distribution among the ignorant and destitute; " with power to "sue and be sued, plead and be impleaded, appear in court, defend and prosecute to final judgment and execution;" and "take, possess and apply, to the purposes of said corporation, any moneys which may be given for immediate use; and may hold, as a permanent fund, any estate, whether real or personal, the yearly income of which shall not exceed fifteen hundred dollars, and the same shall be faithfully appropriated to the object aforesaid, and not otherwise." Stat. 1816, ch. 72, § 1. Under these provisions, it is contended that the society had no power to take money which was not given for immediate use, and to agree to repay the same if certain conditions were not complied

with.

The power to make all such contracts as are necessary and usual in the course of business, or are reasonably incident to the objects for which a private corporation is created, is always implied, where there is no positive restriction in the charter. Thus it is not necessary that there should be express authority to borrow money, or to make negotiable paper, if such is the usual and proper means of accomplishing that object. It is the purpose of the charter of the defendant to create a corporation with power to receive and expend for the purposes named all money given for immediate use. If this was all, there would be strength in the position that the power to receive and hold money to any considerable amount, or for any great length of time, on deposit, or in trust for any purpose, was not conferred by the charter. But there is

Morville v. American Tract Society.

another clause which gives the right to hold real and personal estate for the purpose of securing a limited annual income to be appropriated to the objects of the society. Under this provision we think this contract can be supported. It must be treated as valid, unless it appears affirmatively to be a contract to do something which is beyond the reasonable exercise of the power grauted. We cannot say as matter of law that the right given to a corporation to take and hold property for the purpose of securing a speci- . fied yearly income does not imply the right to receive money within the limits named, upon giving an agreement to return it upon conditions which are not illegal and do not violate its charter, and under which the income of the money is secured to the corporation, so long as the right to hold the fund so obtained continues. To hold otherwise would be to declare void many conditional gifts to charitable and educational institutions. It is enough that an award by arbitrators, having full power to settle the facts as well as the law between the parties, cannot be set aside because the defendant is held responsible on such a contract.

There is another answer to this objection which is equally satisfactory. The question is upon the acceptance of the award; no question of pleading is involved. The award is binding, if in any form of action the plaintiff is entitled to recover. If the defendant were to be allowed the full benefit of the point made, the plaintiff could only be prevented from enforcing his express contract. The money of the plaintiff was taken and is still held by the defendant under an agreement which it is contended it had no power to make, and which, if it had power to make, it has wholly failed on its part to perform. It was money of the plaintiff, now in the possession of the defendant, which in equity and good conscience it ought now to pay over, and which may be recovered in an action for money had and received. The illegality is not that which arises when the contract is in violation of public policy or of sound morals, and under which the law will give no aid to either party. The plaintiff himself is chargeable with no illegal act, and the corporation is the only one at fault in exceeding its corporate powers by making the express contract. The plaintiff is not seeking to enforce that contract, but only to recover his own money and prevent the defendant from unjustly retaining the benefit of its own illegal act. He is doing nothing which must be regarded as a necessary affirmance of an illegal act.

Morville v. American Tract Society.

The right to recover the money upon the implied promise, under like circumstances, has been heretofore recognized by this court.

In White v. Franklin Bank, 22 Pick. 181, where an express contract was made by a bank for the payment of a deposit at a future day certain, against the prohibition of the Rev. Stats., ch. 33, § 57, it was held that, while no action could be maintained by the depositor upon the express contract, yet he might recover back the money, without a previous demand, in an action commenced before the expiration of the time, the parties not being in pari delicto, and the action being in disaffirmance of the illegal contract. The general proposition, that where money is paid on a contract which is merely prohibited by statute, and the receiver is the principal offender, it may be recovered back, was laid down in that case by WILDE, J., who declared it to be, not only consonant with principles of sound policy and justice, but to have been now settled by authority, whatever doubt may have been formerly entertained. "To decide," he adds, "that this action cannot be maintained, would be to secure to the defendants the fruits of an illegal transaction, and would operate as a temptation to all banks to violate the statute, by taking advantage of the unwary, and to those who may have no actual knowledge of the existence of the prohibition." Again, in Dill v. Wareham, 7 Metc. 438, where a town made a contract with reference to certain fisheries within its limits which it had no authority to make, and which it refused to perform, it was decided that the plaintiff might recover back money paid in advance on the contract, as money had and received by the town to his use.

The same principle is recognized in New York. Utica Ins. Co. v. Scott, 19 Johns. 1; Utica Ins. Co. v. Cadwell, 3 Wend. 296; Utica Ins. Co. v. Bloodgood, 4 id. 652.

[The court here passed upon several objections of no general interest.]

5. The more important objection remains to be considered. It is alleged that the plaintiff, without the knowledge of the defendant, consulted and advised with one Snow, who was afterward selected as one of the arbitrators, while the case was under consideration between the parties, in relation to facts material to the decision, and that Snow formed and expressed an opinion in favor of the plaintiff before he was appointed arbitrator.

At the hearing, upon the motion to accept the award, in the

Morville v. American Tract Society.

Superior Court, Snow and the plaintiff were both witnesses; the judge found upon the evidence certain facts reported in the bill of exceptions, and ordered judgment for the plaintiff. The question, therefore, is whether, upon these findings, that judgment is erroneous in law. We are of opinion that it is not. The question is mostly one of fact. The judgment must stand, unless, upon the facts found, the award was legally invalid.

It does not appear that after the submission, or after Snow had notice that he was wanted as an arbitrator, any ex parte communication was made by the plaintiff to him for the purpose of influencing him in the plaintiff's favor, or prejudicing him against the other party. The facts found by the court, namely, that Snow and the plaintiff were familiarly acquainted and frequently visited each other's houses; that before the submission was entered into the plaintiff had honestly stated the principal facts in the case to him; and that, upon these facts, Snow had expressed the opinion that no commercial house could stand upon such a transaction, do not compel us to the conclusion that he was, from undue bias and partiality, an unfit arbitrator upon the matter involved in the controversy. The proposition stated by him is one with reference to which few men, upon the facts in this case, would differ. The main question was as to the liability under this contract of a corporation possessed only of limited powers. The opinion that an individual or a mercantile firm with different or unlimited powers could not escape liability does not prove that Snow had so far prejudged the defendant's case as to disqualify him as an arbitrator. There is nothing to show that he acted as, or understood that he was, the agent of the plaintiff after or before he became arbitrator. His fitness is not impaired by the fact that the plaintiff admitted that he relied on him to look out for his interest. There does not appear on the part of either any fraud, collusion, false statement or perversion of the facts in the case.

It is to be considered that this was a submission under the statute by which the award of a majority is made binding; that it is not uncommon in such cases for each party to choose a neighbor and friend who is understood to have some previous knowledge of the matter in dispute, while the third man is chosen by the other two, or mutually agreed upon by the parties. There is nothing to show that these were not so chosen. Arbitrators, not avowedly selected as partisans, are indeed bound, as in the execution of a

Morville v. American Tract Society.

joint trust, to look impartially at the true merits of the matter submitted to their judgment; but under the circumstances here indicated the mere previous intimacy of the parties is of little weight without some proof of misbehavior while the cause is actually pending. But, above all, it is to be considered that the judge saw as witnesses the parties charged with improper conduct that they were the only witnesses in support of the charge; and that he had full opportunity to judge of the honesty and fairness, the age and intellectual ability of each, and the probability that one was improperly swayed in the discharge of his duty by the other.

We cannot decide, as matter of law, that he was not justified in finding as a fact that the plaintiff was not chargeable with improper conduct such as would avoid the award, and that the arbitrator was not unfitted to serve by previous prejudice and bias. Strong v. Strong, 9 Cush. 560, and 12 id. 135; Fox v. Hazelton, 10 Pick. 275; Conrad v. Massasoit Ins. Co., 4 Allen, 20; Johnson v. Holyoke Water Power Co., 107 Mass. 472.

Exceptions overruled.

NOTE BY THE Reporter.— An extraordinarily large award to one who was insolvent and indebted to the arbitrators or their relatives, and which was immediately assigned for their benefit, was set aside. Rand v. Redington, 13 N. H. 72.

But mere indebtedness of an arbitrator to a party is not ground for re-considering an award. Morgan v. Morgan, 1 D. P. C. 611.

An award will not be set aside because one of the arbitrators is a creditor or the landlord of the successful party, unless evidence of partiality is given. Fisher v. Towner, 14 Conn. 26; Wallis v. Curpenter, 13 Allen, 19.

Mere intercourse of arbitrators with the parties or others on the subject of the arbitration is not ground for setting aside an award. Flatter v. McDermitt, 25 Ind. 326.

Intoxication of an arbitrator on the hearing is ground for setting aside an award. Smith v. Smith, 28 Ill 56. But it must have existed at the time of making the award, or have been so gross as to reduce the arbitrator to “ a state of fatuity." Devereux v. Burguin, 11 Ired. 490. And where the successful party had "treated" a referee, the other party knowing and not objecting to it, held no ground for setting aside the award. Noyes v. Gould, 57 N. H. 20. Partiality, known beforehand and not objected to, does not invalidate an award. Fox v. Hazelton, 10 Pick. 275. But an avowed adverse opinion, after appointment and before hearing, is fatal. Bowen v. Steere, 6 R. I. 251. So of an examination of property, at request of party, and an opinion before appointment and in view of it. Smith v. .Cooley, 5 Daly (N.Y.), 401. Not so of a mere previously formed opinion. Graves v. Fisher, 5 Me. 69.

Partisanship of an arbitrator is ground for setting aside an award in favor of the party selecting him, but not so when both parties selected partisans. Wheeling Gas Co. v. City of Wheeling, 5 W. Va. 448.