Batter Bldg. Materials Co. v. Kirschner

• Decision Date: 21 December 1954
• Citation: 142 Conn. 1,110 A.2d 464
• Parties: THE BATTER BUILDING MATERIALS COMPANY et al. v. Nathan N. KIRSCHNER et al. Supreme Court of Errors of Connecticut
• Court: Connecticut Supreme Court

Page 464

110 A.2d 464

142 Conn. 1

THE BATTER BUILDING MATERIALS COMPANY et al. v. Nathan N. KIRSCHNER et al.

Supreme Court of Errors of Connecticut.

Dec. 21, 1954.

Joseph I. Sachs, New Haven, with whom, on the brief, were Harry L. Edlin and Arthur S. Sachs, New Haven, for appellants (plaintiffs).

Jacob Belford, New Haven, with whom was Richard Belford, New Haven, for appellees (defendants).

Before INGLIS, C. J., and BALDWIN, O'SULLIVAN, WYNNE and DALY, JJ.

O'SULLIVAN, Associate Justice.

The named plaintiff is assignee of Alexander and Peter Mislow, partners engaged in the building business. The latter have joined in bringing the action and will be referred to as the plaintiffs. They have sued the defendants to recover the reasonable value of labor and materials furnished in the construction of a house and garage. Subsequent to the return of the writ to court, the defendants applied for a stay of the action until the subject matter of the suit was submitted to and determined by arbitration. The court granted the stay and the plaintiffs have appealed.

The finding, which is not subject to material correction, may be summarized as follows: Sometime before September, 1952, Samuel Gitlitz, at the request of the defendant husband and wife, prepared plans and specifications for a one-family house and garage to be erected on their lot in Hamden. Gitlitz has never been licensed as an architect by the state under the provisions of chapter 224 of the General Statutes, § 4615 et seq. He has been practicing for sixteen years as a designer, so-called, drawing plans and specifications and supervising construction work. It was in this capacity that he was engaged by and worked for the defendants.

On September 6, 1952, the plaintiffs entered into a written contract to erect the buildings for the defendants. Before executing the contract, the plaintiffs had received, and their estimate was based upon, a set of the plans and specifications prepared by Gitlitz. During the course of the construction, disputes arose between the parties, as a result of which the case at bar was instituted. Prior to the bringing of the action, neither party requested the submission of these disputes to arbitration.

The contract into which the plaintiffs entered on September 6, 1952, was drafted by the defendants' attorney. Although erroneously described in the contract as an architect, the Samuel Gitlitz referred to was the Samuel Gitlitz who had drawn the plans and specifications. The defendants have at all times denied any present liability to the plaintiffs under the contract. The defendants are ready and willing to proceed to arbitrate whatever disputes exist between the parties. Other facts dealing with the contractual provisions will be subsequently stated.

The complaint alleges that the plaintiffs had proceeded with the work covered by the contract and that they have already received $6,800 from the defendants. It further alleges that the brown plaster was finished on April 16, 1953, and that, although an additional $5,000 then became due under the terms of the contract, the defendants not only refused to pay it but, without justifiable cause, ordered the plaintiffs off the job.

On the basis of the foregoing, the court concluded that the complaint presented an arbitrable matter and that, since the contract provides for arbitration and makes it a condition precedent to litigation, the present action should be stayed.

Save as noted hereafter, the plaintiffs do not question the legality, irrevocability and enforceability of their agreement to arbitrate or the power of the court to stay an action based on a dispute otherwise arbitrable. See General Statutes §§ 8151, 8152. It is their claim, however, that the only disputes which they agreed to arbitrate were those covered by paragraph 4 of the written contract of September 6, 1952. That paragraph reads: 'Should any dispute arise respecting the true value of the extra work or works added, deviated, altered, or omitted, the same shall be valued by two competent persons--one employed by the Owner and the other by the Contractors--and those two shall have the power to name an umpire, whose decision shall be binding on all parties.' If this were the sole pertinent provision of the contract, the court's order in staying the litigation instituted by the plaintiffs might be difficult to justify, since paragraph 4 refers only to disputes arising out of extra work or changes ordered by the defendants, and since the subject matter of the complaint does not embrace such work or changes. A party to a contract is under no obligation to arbitrate a dispute outside the scope of those which he has agreed to arbitrate. Marchant v. Mead-Morrison Mfg. Co., 252 N.Y. 284, 299, 169 N.E. 386; see Pratt, Read & Co. v. United Furniture Workers, 136 Conn. 205, 208, 70 A.2d 120.

The court, however, relied upon a provision appearing in a pamphlet which the parties did not prepare and upon which they did not place their signatures. The situation was this: A copy of the specifications prepared by Gitlitz had been given to the plaintiffs to aid them in estimating the cost of the job. The written contract executed by the plaintiffs on September 6, 1952, recites that '[a]ll of the work contemplated within the terms of the agreement is more fully set forth and described in certain plans and specifications drawn by one, Samuel Gitlitz, and architect.' The specifications which thus became a part of the contract provide that '[t]he General Conditions as contained in pages 1-10 inclusive, Form A2, as issued by the American Institute of Architects, shall govern in all cases, except where they conflict with the Special Conditions.' The court was warranted in finding that articles 39 and 40 of the American Institute of Architects Form A2 (Sept. 1, 1951), printed on pages 9 and 10 thereof, were included within the agreement of the parties. ¹

Although the plaintiffs argue to the contrary, it is of no avail to them that the provisions for the arbitration contemplated by articles 39 and 40 are found in a writing referred to in the specifications, which in turn are incorporated by reference into the written contract of September 6. Where, as here, the signatories execute a contract which refers to another instrument in such a manner as to establish that they intended to make the terms and conditions of that other instrument a part of their understanding, the two may be interpreted together as the agreement of the parties. See Boston Lumber Co. v. Pendleton Bros., Inc., 102 Conn. 626, 631, 129 A. 781, § 1 Corbin, Contracts, p. 97; 12 Am.Jur. 781, § 245. The incorporation by reference of the provisions in Form A2 distinguishes the present case from the facts in Samson v. Bergin, 138 Conn. 306, 310, 84 A.2d 273. Nor is a party allowed, in the absence of accident, fraud, mistake or unfair dealing, to escape his contractual obligations by saying, as each of the plaintiffs does here, that he did not read what was expressly incorporated as specific provisions of the contract into which he entered. See Dinini v. Mechanics' Savings Bank, 85 Conn. 225, 228, 82 A. 580; West v. Suda, 69 Conn. 60, 62, 36 A. 1015.

The plaintiffs, however, maintain that, even though articles 39 and 40 of Form A2 are within the agreement, the defendants are precluded from demanding arbitration because of their failure to provide an architect on the job. The statutes of this state did not prohibit Gitlitz from engaging in architectural work. General Statutes, c. 224. They merely forebade his practicing that work under the title of 'architect.' He referred to himself on the plans and specifications not as an architect but as a designer. The fact that the parties to this litigation used the word 'architect' rather than 'designer' is of no moment in the absence of any claim of fraud, accident, mistake or unfair dealing advanced by the plaintiffs. It clearly was the intention of the parties that the word 'architect' should refer to Gitlitz, the person who had drafted the plans and prepared the specifications and who was to make the decisions under the contract. Under the circumstances, we deem the use of the word 'architect' as of no consequence. See Bacigalupi v. Phoenix Building & Construction Co., 14 Cal.App. 632, 640, 112 P. 892.

Still another claim of the plaintiffs is that the court erred in ordering a stay because, they maintain, the defendants have repudiated their contract (1) by refusing to make payments in conformity with the terms, (2) by ordering the plaintiffs off the job, and (3) by denying that the defendants are under any liability to the plaintiffs.

A question which has frequently been before the courts is whether an arbitration clause relating to future disputes between the parties to the contract containing the clause remains effective for the purpose either of compelling arbitration or, as here, of serving as the basis for a stay of pending litigation in those instances where the contract has been repudiated or breached or where liability has been denied. In 1915 the question was discussed in a case reaching the House of Lords. Jureidini v. National British & Irish Millers Ins. Co., [1915] A.C. 499, 505 (see 6 Williston, Contracts (Rev.Ed.) p. 5372). In expressing himself on the matter, Lord Haldane indulged in the provocative statement that 'when there is a repudiation which goes to the substance of the whole contract I do not see how the person setting up that repudiation can be entitled to insist on a subordinate term of the contract still being enforced.' This dictrine, that repudiation prevented the repudiating party from relying on an arbitration clause in the contract, had been approved by certain American courts even before the Haldane pronouncement. Crilly v. Philip Rinn Company, 135 Ill.App. 198, 207; Berry v. Carter, 19 Kan. 135, 139; Willett v. Smith, 214 Mass. 494, 498, 101 N.E. 1058; Mapes v. Metcalf, 10 N.D. 601,...