Britex Waste Company, Ltd. v. Nathan Schwab & Sons, Inc.

• Decision Date: 10 April 1940
• Docket Number: 371-1939
• Citation: 139 Pa.Super. 474,12 A.2d 473
• Parties: Britex Waste Company, Ltd., Appellant, v. Nathan Schwab & Sons, Inc
• Court: Pennsylvania Superior Court

12 A.2d 473

139 Pa.Super. 474

Britex Waste Company, Ltd., Appellant, v. Nathan Schwab & Sons, Inc

No. 371-1939

Superior Court of Pennsylvania

April 10, 1940

Argued December 19, 1939.

Appeal from order of M. C., Phila. Co., Nov. T., 1938, No. 253.

Assumpsit.

The facts are stated in the opinion of the Superior Court. Rule for judgment for want of a sufficient affidavit of defense discharged, opinion by GLASS, J. Plaintiff appealed. Error assigned was discharge of rule.

Reversed.

SYLLABUS

Arbitration--Award--Conclusiveness--Contract containing provision for submission--Condition precedent--Revocation of submission.

1. Questions which were the subject of dispute in the arbitration proceedings may not be re-tried in an action brought upon the award.

2. An arbitrator, in the absence of any agreement limiting his authority, is the final judge of both law and fact, and his award will not be reviewed or set aside for mistake in either.

3. Where a contract provided that "Any disputes which might arise during the execution of this contract will be settled amicably, or if this should not be possible by arbitration" according to the rules of a particular association, an attempt at settlement was not a condition precedent to the arbitration or a limitation upon the arbitrator's authority to act.

4. A contract providing for the arbitration of disputes must be construed in the light of existing arbitration law, and the general objects sought to be obtained by the parties thereto.

5. Contracts containing clauses providing for the settlement of disputes by arbitration are valid, enforceable and irrevocable except upon such grounds as exist at law or in equity for the revocation of any contract.

6. An arbitration agreement should be liberally construed, so as to give effect to the primary intention of the parties, and every reasonable intendment should be made in favor of its validity.

7. A party does not now have the right to revoke his agreement contained in a contract, to submit a dispute to arbitration even where the arbitrators have not been named in advance.

Contracts--Construction--Intention of parties--Surrounding circumstances--Conditions precedent--Restatement, Contracts.

8. In construing a contract, the primary rule is to ascertain the intention of the parties as shown by the surrounding circumstances.

9. Whether a promise is expressly conditional, and if so what is the nature of the condition, depend upon interpretation.

10. Restatement, Contracts, section 258, cited.

11. Where an act or event mentioned in a contract is not expressly made a condition precedent, it will not be so construed unless such clearly appears to be the intention of the parties.

12. In case of doubt as to whether words create a promise or an express condition, they are to be interpreted as creating a promise.

13. Restatement, Contracts, section 261, cited.

Practice--Summary judgments--Issues of fact--Action upon award--Questions presented to arbitrators.

14. The rule that summary judgment cannot be entered where the averments of the affidavit of defense show that issues of fact are presented is not applicable where, in an action on an award, the questions of fact raised pertain only to matters already heard and decided by the arbitrators.

Joseph A. Keough, with him Levi, Mandel & Miller, for appellant.

Philip C. Pendleton, with him C. Brewster Rhoads, of Montgomery & McCracken, for appellee.

Before KELLER, P. J., CUNNINGHAM, BALDRIDGE, STADTFELD, PARKER, RHODES and HIRT, JJ. OPINION BY CUNNINGHAM, J.

OPINION

CUNNINGHAM, J.

Plaintiff, an English corporation, brought the present suit in assumpsit against defendant in the Municipal Court of Philadelphia County. The action was based upon an award of arbitrators in London purporting to have been made pursuant to a provision in written contracts for the sale by plaintiff and purchase by defendant of certain bales of cotton waste. Defendant filed an affidavit of defense. Plaintiff now appeals from an order of the court below discharging its rule for judgment for want of a sufficient affidavit of defense.

Plaintiff's statement set forth two contracts of sale and purchase of cotton waste, dated January 25, and April 19, 1937, respectively, the former for thirty-four and the latter for twenty bales. Each contract contained the following provision relative to arbitration: "Any disputes which might arise during the execution of this contract will be settled amicably, or if this should not be possible by arbitration according to the rules of the Liverpool Cotton Association Ltd. The decision of Liverpool will be final and the contracting parties herewith agree not to take any other legal steps." (Italics supplied.)

Defendant refused to accept the cotton waste upon tender of delivery, because "plaintiff did not ship cotton waste of the quality which it had agreed to deliver" and because the second shipment was delayed thirteen days.

The terms of payment under each contract read, "Payment sight draft against documents." Defendant admitted in its affidavit it had refused to accept delivery and had "refused to pay the sight draft covering the agreed prices ...... as provided in said contracts," for the reasons above stated.

Under date of January 17, 1938, the secretary of the Liverpool Cotton Association Ltd., addressed a registered letter to defendant advising that plaintiff had brought to the attention of the president of the association the failure of defendant to pay for the waste. After referring to the contracts and shipments thereunder, the letter continued:

"It is stated that continual efforts were made to get you to take up the documents and accept the goods in the ordinary way, but you have not complied with this request. Presumably, therefore, there must be some dispute in regard to these contracts, which are made subject to the rules of this association.

"Under these rules, if any dispute arises it must be submitted to arbitration, and the president of the association will therefore be glad if you will communicate with him by return mail, but not later than Thursday, 17th February, 1938, giving him the name of the member of this association who will act as your arbitrator or your good reasons for being unwilling to do so.

"I also have to point out to you that, should you fail to comply with this request the president has powers under the association rules to nominate a member to act as arbitrator on your behalf."

To this letter defendant replied under date of February 2, stating at length its reasons for refusing to accept the waste and pay the contract price, but ignoring the specific request that it select its arbitrator. The only reference in defendant's letter indicative of its attitude toward the arbitration provision of its contracts reads: "So far as we are concerned, we have no further interest in their (plaintiff's) shipments and we have absolutely refused to accept them."

On February 16, the secretary of the association replied that the president "appreciates all you say but considers that your letter is really more in the nature of a statement of case to be submitted to the arbitrators when they consider the matter, than good reasons why an arbitration should not be held."

By this letter defendant was again invited to name its arbitrator and the time was extended to March 23rd. The communication concluded: "Failing appointment by that date, the president feels he will have no option except to exercise his powers under the rules of the association and appoint a member to act on your behalf. Of course you will be given every opportunity of writing a full statement of case to the arbitrators, and your letter of February 2d can also be placed before them."

Defendant replied on March 15th that it had "nothing further to add" to its letter of February 2d. Thereupon, the president of the association, in accordance with its rules, appointed an arbitrator for defendant and on March 24th advised it of the name and address of the arbitrator selected by plaintiff and of the one appointed for defendant. The letter concluded with the suggestion that defendant, "write forthwith to either or both these members of the association, giving any statement of case which you desire to submit to them when the arbitration is being held."

The two arbitrators, being unable to agree, appointed an umpire. On May 2, 1938, the umpire rendered an award directing the defendant to pay for the cotton waste in dispute, and stored in New York, at invoice prices, plus storage charges and interest--less an allowance for late shipment of one of the lots, and also less an amount due by plaintiff to defendant under a former arbitration award covering a dispute as to the quality of other goods previously shipped. The net amount of the award in favor of plaintiff was $ 1,361.19. This action was brought November 14, 1938, upon the award.

The court below based its decision discharging plaintiff's rule for judgment for want of a sufficient affidavit of defense upon the ground that the averments of the affidavit "clearly show that issues of fact are presented." The familiar rule, that a summary judgment should not be entered when the averments of the affidavit show disputed issues of fact are outstanding, is invoked. If this were an ordinary suit to compel payment of the contract prices at which the waste was sold, we would unhesitatingly affirm the order discharging the rule, because the quality of the waste and the failure to deliver part of it in accordance with the contracts were issues of fact in dispute between the parties.

This however, is not an ordinary suit for the price of the goods; it is an action upon an award of arbitrators. All of the issues of fact...