Abbott v. Bob's U-Drive

• Decision Date: 25 May 1960
• Docket Number: U-DRIVE
• Parties: , 81 A.L.R.2d 793 Gerald V. ABBOTT, Respondent, v. BOB'S, an Oregon corporation and Continental Leasing Co., an Oregon corporation, Successors in interest to Robert E. Thompson, Appellants.
• Court: Oregon Supreme Court

Page 598

352 P.2d 598

222 Or. 147, 81 A.L.R.2d 793

Gerald V. ABBOTT, Respondent, v. BOB'S U-DRIVE, an Oregon corporation and Continental Leasing Co., an Oregon corporation, Successors in interest to Robert E. Thompson, Appellants.

Supreme Court of Oregon, Department 2.

Argued April 14, 1960.

Decided May 25, 1960.

Thomas J. Moore, Portland, argued the cause for appellants. On the briefs were Schedler & Moore and F. Darold Windsor, Portland.

Dean M. Alexander, Portland, argued the cause for respondent. On the brief were Alexander, Buehner & Tilbury.

Before McALLISTER, C. J., and SLOAN, O'CONNELL and DUNCAN, JJ.

O'CONNELL, Justice.

This is an appeal from a judgment based upon an arbitration award in favor of the plaintiff and against the defendants, jointly and severally.

The facts are as follows. In April, 1952, plaintiff leased certain premises to Robert E. Thompson under the terms of which the lessee agreed to operate an automobile 'U-Drive' business and an automobile leasing business. The lease contained a provision requiring the parties to submit to arbitration any controversy arising out of the lease. In February, 1953, Thompson caused to be incorporated the defendant Bob's U-Drive, and in October, 1953, he caused to be incorporated the defendant Continental Leasing Company. Bob's U-Drive engaged in the business of making short-term rentals of automobiles, and Continental Leasing Company leased automobiles for twelve months or longer. Thompson was president and manager of both corporations and owned fifty percent of the stock of each corporation. The automobile rental and leasing business which Thompson conducted on the leasehold premises as an individual was continued by the defendant corporations after their formation.

In August, 1954, Thompson assigned all of his interest in the lease to the defendant Bob's U-Drive. The assignment was in writing. No assignment was made to defendant Continental Leasing Company, although it continued to carry on its business from the leasehold premises as before.

The operations of the two corporations were not strictly segregated. All the business was conducted from one office. There was some evidence that in the operation of the business the records did not always clearly reflect which corporation was acting in the particular instance. However, each corporation kept separate business records, separate bank accounts, separate telephones and separate stationery.

A controversy arose between the parties as to the performance of the terms of the lease by the defendants and on April 22, 1957, plaintiff, purporting to act pursuant to ORS 33.210 et seq., filed a petition for the purpose of securing an order directing the defendants to proceed to arbitration. An amended petition was filed in July, 1957. The defendant Continental Leasing Company filed its answer. The defendant Bob's U-Drive prepared an answer which was never filed. At the hearing in the circuit court for Multnomah county on the petition to order arbitration the attorney for defendant Bob's U-Drive, who was also the attorney for Continental Leasing Company, indicated that Bob's U-Drive was willing to arbitrate, whereupon Bob's U-Drive ceased to participate in the proceedings and the hearing continued as to defendant Continental Leasing Company alone.

The defendant Continental Leasing Company prayed for a dismissal of the petition on the ground that there was no assignment of the lease to it and no written arbitration agreement as required by ORS 33.230. An order was entered by the circuit court for Multnomah county requiring the defendant Continental Leasing Company to proceed forthwith to arbitrate the controversy. No order was entered directing the defendant Bob's U-Drive to arbitrate. A hearing was then held before a board of arbitrators, which culminated in an award of $2,938.88 for the plaintiff. Both defendants filed objections to the judgment setting forth various grounds. An order was entered overruling the objections and finally on July 8, 1958, a joint and several judgment was entered against the defendants in accordance with the award.

The judgment against the defendant Bob's U-Drive is attacked on the ground that the petition as to it was dismissed upon motion of the plaintiff and, therefore, the circuit court lost jurisdiction over it.

At the outset of the hearing on plaintiff's petition the attorney for plaintiff, in colloquy between court and counsel, made the following statement: 'I think probably at this time it would be well to ask to dismiss this matter with respect to Bob's U-Drive which in its answer has agreed to arbitrate under the terms of the lease.' Defendants' counsel then pointed out that the answer, althouth tendered, had not been filed. He said 'He agreed to dismiss, so it has never been filed.' Later on in the preliminary stage of these same proceedings defendants' counsel stated: 'Now, the request as to ordinary arbitration of the items of contract that may become a controversy with this lease--our position is that certainly Bob's U-Drive is ready and willing and able to controvert or arbitrate any controversy that may have arisen as a result of being an assignee.'

After the hearing on the petition an order prepared by plaintiff's counsel was entered directing the defendant Continental Leasing Company to proceed to arbitrate the controversy. In the preamble to this order it was recited that 'upon due showing made by respondent Bob's U-Drive that it had not refused to arbitrate pursuant to the terms of the said lease contract, the Petition was thereupon dismissed as to said respondent Bob's U-Drive.'

It is to be noted that the order itself did not dismiss the petition as to defendant Bob's U-Drive; the preamble merely recited that the petition had been dismissed by some preceding action. The entries in the judgment roll up to the entry of the foregoing order contain no order dismissing the petition as to the defendant Bob's U-Drive. There is nothing in the record except the statements of counsel recited above indicating an understanding that there was no necessity to force Bob's U-Drive to arbitrate inasmuch as it was willing to do so.

It appears then that, strictly speaking, the petition was not dismissed as to Bob's U-Drive and that it would be more accurate to say that counsel for both plaintiff and defendants, realizing that there was no necessity to force Bob's U-Drive into arbitration, simply directed their attention to the question of the applicability of the arbitration statutes to defendant Continental Leasing Company and that the so-called motion and order were designed only as a discontinuance of the proceedings as to Bob's U-Drive and not to oust the court of jurisdiction over it.

Even though the order is interpreted as an order of dismissal, we are of the opinion that Bob's U-Drive, by its participation in the subsequent proceedings, submitted itself to the jurisdiction of the board of arbitrators and to the circuit court. Bob's U-Drive expressed its willingness to arbitrate and it took part in the proceedings before the board of arbitrators. An order directing a party to arbitrate is not essential to give the board of arbitrators jurisdiction where the parties submit their controversy to the board pursuant to their written agreement to arbitrate. An order to arbitrate may, under certain circumstances, be essential to the boards' jurisdiction where a party refuses to arbitrate. Sturges, Commercial Arbitration and Awards, pp. 446 et seq. (1930). But we are not here presented with a case in which a recalcitrant party questions the jurisdiction of the board or the court; here Bob's U-Drive made a general appearance before the board and thereafter made a general appearance before the circuit court by filing objections to the entry of the judgment and otherwise participating in the proceedings subsequent to the judgment.

The defendant also asserts that jurisdiction was lacking because plaintiff failed to follow the statutory procedure in other particulars. It is contended that the written agreement to submit to arbitration was not delivered to the county clerk as required by ORS 33.310. The lease which contained the arbitration agreement was made a part of the petition which was before the court. Therefore, if delivery to the county clerk of the written contract to settle future controversies by arbitration is essential to give the court jurisdiction, there was proof in the record that parties had so contracted. The failure to deliver another such writing to the county clerk was not fatal.

It is contended that there was no proof of service of a signed copy of the award upon the parties. The record discloses proof of service on counsel for defendants. This is sufficient. Multnomah Lumber & Box Co. v. Western Basket Co., 1909, 54 Or. 22, 99 P. 1046, 102 P. 1. Cf., Bartley v. Doherty, Or., 351 P.2d 71.

It is also contended that the record fails to disclose the oath of the arbitrators as required by ORS 33.260. The award of the arbitrators recites that the oath required by statute was taken. There being no evidence showing that the oath was not taken the recital will be presumed to be true. Cf., In re Hart's Estate, 1938, 11 Cal.2d 89, 70 P.2d 539, 77 P.2d 1082; Withington v. Warren, 1845, 10 Metc. 431, 51 Mass. 431; Burton v. Atkins, 1946, 199 Miss. 275, 24 So.2d 355; Wolfrom v. Anderson, 1947, 249 Wis. 433, 24 N.W.2d 881, 25 N.W.2d 880.

A more serious question is presented by the second assignment of error. It is urged that the defendant Continental Leasing Company could not be required to submit to arbitration under ORS 33.210 et seq. because it had not been a party to a written contract containing an agreement to submit to arbitration which is required by ORS 33.220.

It is conceded that no written assignment of the lease was ever made to Continental Leasing Company. The assignment ran to Bob's U-Drive only. There is no satisfactory...