Hurst v. . Litchfield , 7 Trans. App. 179 ( 1868 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] The referee having found that no question ever arose under this contract between the parties in relation to the value of the work, and there being evidence in the case to sustain such finding, we must receive the finding of the referee as conclusive upon this court as to this fact. The objection, therefore, that this action cannot be maintained because this matter had not been submitted to the architect, and his adjustment procured, is not well taken. There is, however, another answer to this objection. This agreement to submit this matter to the decision and adjustment of Mr. White constitutes no bar or defense to this action. In the first place, the agreement itself does not make this a condition precedent. Such stipulations are regarded as against the policy of the common law, as having a tendency to exclude the jurisdiction of the courts, provided by the government with ample means to entertain and decide all legal controversies. (Scott v. Avery, 4 House of Lords Cases, 811;Horton v. Sayer, 4 Hurlst. Norm. 642; Thompson v.Charnock, 8 Tenn. 139; Graham v. Keteltas, 17 N.Y. 491,496.) These stipulations are often in articles of copartnership, and the law is well settled that they do not deprive the party of his action, either at law or in equity, to enforce his rights. It is well settled that courts of equity will never entertain a suit to compel parties specifically to perform such agreements. (Gourley v. Duke of Somerset, 19 Ves. 431; Agar v.Macklew, 2 Sim. Stu. 418; Greason v. Keteltas, 17 N.Y. 496. ) Gow says that one partner may maintain an action at law against his copartner, notwithstanding it has been agreed between them that the matter in dispute shall be determined by an arbitration, because a mere agreement to submit cannot oust the Superior Courts of their jurisdiction. (Gow on Partnerships, 103, citing Kill v. Hollister, 1 Wils. 129; Thompson v.Charnock, 8 Term, 139.) These cases fully sustain the text, and, in the latter case, Lord KENYON, Ch. J., said: "It is not necessary, now, to say how this point ought to be determined if it were res integra, it having been decided again and again that an agreement to refer matters in difference to arbitration, is not sufficient to oust courts of law and equity of their jurisdiction." In the case ofKill v. Hollester, there was a stipulation on an insurance policy to submit all difference, etc., to arbitrators, and the court held it no bar to an action at law upon the policy brought to settle the differences. The rule is reiterated very much in the same terms by Collyer. (See §§ 250, 251, 252, 253, pp. 230, 231, 4th Am. ed. from the 2d Eng. ed.) He concludes the discussion of the subject in sec. 253, in saying that such a covenant to refer disputes to arbitration is but an unprofitable covenant, affording only the shadow of relief at law, and neither substance nor shadow in equity. (Collyer on Part. 231, § 253.)

The same is affirmed in the strongest terms by Story in his Treatise on Partnerships (§ 215, pp. 324 to 330), and also in his Equity Jurisdiction (vol. 1, p. 744, § 670). The case ofHaygart v. Morgan (1 Seld. 427) holds the same, and so doesSinclair v. Tallmadge (35 Barb. 607). The rule is the same whether the arbitrator be named and agreed upon or not, as is held in several adjudged cases. Where an agreement makes the procurement of the architect's certificate a condition precedent to any right of action, then the rule is as claimed by the defendant in this case, but such is not the agreement between these parties.

There is nothing in the objection that plaintiffs are not entitled to recover under their complaint as framed. The contract being fully performed and completed, and the money due, the plaintiffs, under the old rule of pleading, were entitled to recover upon the counts for work and labor, and are so under the present system. (Allen v. Patterson, 3 Seld. 476.) But the second count or cause of action stated in the complaint is quite a sufficient statement of the plaintiffs' cause of action. It is a concise statement of the facts constituting the plaintiffs' cause of action.

The judgment must be affirmed.

Judgment affirmed.