Acme Cut Stone Co. v. New Ctr. Dev. Corp.

• Decision Date: 01 September 1937
• Docket Number: No. 129,April Term.,129
• Citation: 274 N.W. 700,281 Mich. 32
• Parties: ACME CUT STONE CO. v. NEW CENTER DEVELOPMENT CORPORATION.
• Court: Michigan Supreme Court

281 Mich. 32

274 N.W. 700

ACME CUT STONE CO.

v.NEW CENTER DEVELOPMENT CORPORATION.

No. 129, April Term.

Supreme Court of Michigan.

Sept. 1, 1937.

Suit by the Acme Cut Stone Company and another against the New Center Development Corporation. Decree dismissing the bill of complaint and complainants appeal.

Affirmed.

Appeal from Circuit Court, Wayne County, in Chancery; Guy A. Miller, judge.

Argued before the Entire Bench, except BUTZEL, J.

Wm. Henry Gallagher, of Detroit, for appellants.

Monaghan, Crowley, Clark & Kellogg, of Detroit, for appellee.

CHANDLER, Justice.

It was agreed between the parties to this cause that their respective claims and counterclaims should be submitted to arbitration, which was accordingly done. For an understanding of the matters in controversy and of the method of submission, it is deemed essential to quote in full the agreement of submission entered into between the parties and which was duly executed and acknowledged by them. It is in words and figures as follows:

‘Agreement, of submission to statutory arbitration, made and entered into this 22nd day of January, 1934, by and between Batchelder-Wasmund Company, a Michigan Corporation, of Detroit, Michigan, and Acme Cut Stone Company, a Michigan Corporation, of the same place, as parties of the first part, and New Center Development Corporation, a Michigan Corporation of Detroit, Michigan, as party of the second part.

‘Whereas, second party did in 1927 undertake the erection of a building now known as the Fisher Building at the Northwest corner of Second Boulevard and Grand Boulevard, Detroit, Michigan; and

‘Whereas, the parties of the first part did then orally contract to furnish all labor and material for the setting of the exterior marble, granite and stone work for said Fisher Building, (including the garage building annexed to same), and did in 1928 orally contract to furnish all labor and material for the setting of granite and marble work on the Fisher Theatre, erected in conjunction with said Fisher Building; and

‘Whereas after the completion of said contract by first parties, certain writings that had been theretofore prepared and submitted to the respective parties, which contracts purported to set forth the terms of the respective agreements, one of which writings bears date February 21, 1928, of which Exhibit ‘A’ attached hereto is a copy, and another of said writings bearing date June 26, 1928, of which Exhibit ‘B’ attached hereto is a copy, were executed, and

‘Whereas, it was agreed in said contracts that the maximum amount to be received by first parties for the furnishing of the labor and material required therein was the sum of Three Hundred Six Thousand Four Dollars ($306,004); and

‘Whereas, first parties performed certain additional work upon request, and have received upon account of said contract and said additional work cash and credits in the sum of Four Hundred Five Thousand Nine Hundred Seventy-two and 22/100ths Dollars ($405,972.22); and

‘Whereas, first parties claim that additional costs were incurred and damages sustained by them in the performance of said contract as the result of the request, direction, negligence and fault of second party (an itemized statement of the claim of first parties, marked ‘Exhibit C’, being hereto attached); and

‘Whereas, the second party denies each and every of the claims and contentions of first parties and claims fulfillment of its entire contractual obligation to first parties, and upon its part claims damages against first parties in the sum of Two Thousand Nine Hundred Ninety-Nine Dollars Eighty-two cents ($2,999.82), with interest from October 10, 1928 to date for stone broken and damaged by first parties; and

‘Whereas, the parties hereto have agreed that the controversy between them, as herein stated, shall be submitted to the Honorable Arthur Webster, Judge of the Circuit Court of the County of Wayne, as arbitrator, for the purpose of determining the relative rights and liabilities of the parties by virtue of the contractual relationship existing between them by virtue of the above-mentioned undertakings;

‘Therefore, it is agreed that under the provisions of chapter 45 of the Judicature Act, the same being sections 15394 to 15416, inclusive, of the Compiled Laws of the State of Michigan, for the year 1929, the above mentioned controversy and issues shall be submitted to the said Honorable Arthur Webster, Judge of the Wayne County Circuit Court, as arbitrator, and that he shall hear and determine the said controversy in the manner and method provided by said chapter 45 of the Judicature Act, and that when he shall have made a finding and determination with respect to the rights and obligations of the parties hereto and shall have determined the amount, if any, that shall be due to first parties, or shall determine that no amount is due them, or upon his determination that the counterclaim of New Center Development Corporation, as aforesaid, in the amount of $2,999.82, plus interest, or any amount for said item shall be owing by the subcontractor, parties of the first part, to New Center Development Corporation, party of the second part, then his determination in any of these respects shall, except as otherwise provided by the provisions of said chapter 45 of the Judicature Act, be final and binding upon the parties hereto, and his award, when made, may be filed with the Clerk of the Wayne County Circuit Court for confirmation, and upon confirmation judgment shall be rendered in favor of the party to whom the sum of money shall have been awarded by said court, together with costs thereon as provided in said chapter 45 of the Judicature Act.

‘It is further agreed that the expenses incident to the arbitration, namely, arbitration fees, if any, stenographic services for taking and transcribing the evidence etc., shall, in the first instance, be paid equally by the parties hereto, with a subsequent reimbursement in favor of the prevailing party.’

At the very outset of the proceedings the question of scope of the proceedings or province of the arbitrator came up, and the following colloquy between Judge Webster, the arbitrator, and counsel for the respective parties occurred:

‘Judge Webster: Well now, again, I will confess to you right now that I have not read the statute about arbitration; I do not recall it; this arbitration is an arbitration of the issues and controversies here based upon legal principles, is it not?

‘Mr. Gallagher: Yes.

‘Judge Webster: Mr. Crowley raised the question, he says, ‘We do not waive our legal rights,’ and this arbitration, I am sitting here, I have to daily pass upon matters based upon the law and legal obligations and not moral or so-called equitable considerations. Now, is this proceeding in the same way, an ordinary proceeding such as you would proceed in court?

‘Mr. Gallagher: Well, I do not apprehend that any arbitration proceeding is one in which anything but the rights of the parties are involved, whether statutory or otherwise.

‘Judge Webster: That would by my understanding of it.

‘Mr. Crowley: That is mine.

‘Mr. Gallagher: Certainly.

‘Judge Webster: I just wanted to get that straight, we are not considering moral rights, but legal rights.

‘Mr. Gallagher: That is right.’

Again later in the proceedings, the following occurred:

‘Judge Webster: Now, coming back here to this proposition, I would like to get the picture of it clearly in my mind, because with all of us-the three of us, at least, here are lawyers, and we are thinking about legal propositions and eqitable propositions and such things as that.

‘Mr. Crowley: I think this record back of that somewhere answers that question. We discussed this very problem once before.

‘Judge Webster: I know we did.

‘Mr. Gallagher: There is not any question in my mind. As I have said, we are not standing on any moral ground at all. If we have not any legal rights against them,--

‘Judge Webster: Legal rights based upon what?

‘Mr. Gallagher: I am prepared to show you a mass of testimony.

‘Judge Webster: But generally speaking, based upon the oral contract?

‘Mr. Gallagher: Based upon the oral contract; and if you are to hold that the written contract is a valid contract, based upon the written contract and based upon the oral contracts made from time to time by Blake; and it might be well to put in your honor's mind that these oral directions by Blake to us to do things, he will see that we are paid, are contracts, each of them are so many contracts.’

A large amount of testimony was taken before the arbitrator, the taking of such testimony continuing from January until May, 1934, the testimony so taken being contained in a transcript of over 2,600 pages.

Some time after the conclusion of the taking of testimony, January 14, 1935, the arbitrator filed with the clerk of the Wayne county circuit court his findings and conclusions by which he awarded to the claimants the sum of $10,500.

That the testimony taken upon said arbitration and the questions involved therein had most thorough and able consideration by the arbitrator was shown by his opinion filed with said award and consuming over forty pages of the record in this case. On February 12, 1935, the attorneys for the defendant filed with the clerk of the Wayne county circuit court a motion for the confirmation of said award so submitted and filed as aforesaid. A short time thereafter, the attorney for claimants filed with the clerk of said court a motion to vacate said award. Later, on July 12, 1935, a stipulation for the confirmation of the award was filed by the attorneys for the respective parties.

On the same day an order denying the motion to vacate and to confirm the award made in said proceedings was entered in the Wayne circuit court.

On October 4, 1935, the plaintiffs herein, being the claimants in the arbitration proceeding, filed their bill of complaint, praying for the following relief:

‘That the award of the...