Cocalis v. Nazlides

• Decision Date: 18 April 1923
• Docket Number: No. 15015.,15015.
• Citation: 139 N.E. 95,308 Ill. 152
• Parties: COCALIS v. NAZLIDES.
• Court: Illinois Supreme Court

308 Ill. 152

139 N.E. 95

COCALIS

v.NAZLIDES.

No. 15015.

Supreme Court of Illinois.

April 18, 1923.

Action by Louis Cocalis against Eugene Nazlides for damages for defendant's refusal to submit controversies to arbitration. Judgment for plaintiff, and defendant allowed an appeal; constitutional questions being involved.

Reversed.

Farmer, J., dissenting.Appeal from Municipal Court of Chicago; Harry Olson, Judge.

Harry S. Mecartney, of Chicago, for appellant.

Tolman, Sexton & Chandler and Howard B. Bryant, all of Chicago, for appellee.

CARTWRIGHT, J.

Upon a trial by the court without a jury the municipal court of Chicago rendered judgment in favor of Louis Cocalis, appellee, against Eugene Nazlides, appellant, for $25 liquidated damages for refusal by the appellant to submit to arbitration two controversies between the parties, under an agreement that each would submit to arbitration any controversy that might arise between them or pay $25 damages. Questions of constitutional right being involved, an appeal to this court was allowed and perfected.

In 1922 the Chicago Association of Commerce distributed printed forms of an agreement to submit to arbitration future disputes or controversies which might arise between persons who should sign such papers. The form for such agreement was prefaced with a statement of the object of the agreement, signed by S. J. Whitlock, chairman, and J. Kent Greene, manager, showing such purpose to provide beforehand for the settlement of controversies which might arise in the future, and advising that the best time would be before discord was even threatened. It was not required that parties should sign the same agreement, nor that they should know what other persons might sign it, but the plan was that any signer could compel any other signer to submit to arbitration any controversy that might arise between them. It was intended that the Association of Commerce should keep an index list of all who should sign agreements and deposit them with the association. The contract was in the following form:

‘The undersigned, contracting with each other and with all others, jointly and severally, that have heretofore contracted, do now or may hereafter contract by executing any other or different instrument containing the same language and bearing the same date (no matter when actually executed) as this instrument, each in consideration of one dollar and other good and valuable considerations to him, her, it, or them, paid, the receipt of which is hereby acknowledged, and in consideration of the mutual and several promises of each and all of the parties, not only to this contract but to all said other contracts containing the same language and bearing the same date, hereby agree with each other, and with all the other parties to all said contracts, that if any one of more controversies growing out of contract shall arise at one or successive times between them or any of them, or any parties to any of said contracts, during the year 1922 or 1923, growing out of any other contract, whether written, verbal, express or implied, now existing or that may be entered into between them or any of said parties, or growing out of the dealings between any of said parties, the same shall be submitted to arbitration from time to time on demand of any such party under the arbitrations and award statute of Illinois and the rules of arbitration of the Chicago Association of Commerce.

‘Any party to any such controversy or controversies refusing for the space of ten days after such demand so to submit any such controversy or controversies to arbitration shall be held to have broken this contract, and for so doing shall pay to the other the sum of twenty-five dollars ($25) for each and every controversy so offered to be submitted, as liquidated damages justly incurred through such refusal: Provided, such breach of this contract shall not in any way affect the rights of the parties other than to make the one guilty of such breach liable for the payment of said liquidated damages.

‘It is understood that from time to time otherparties will execute this and other instruments containing the same language. All such instruments shall together be construed as one continuing contract executed for the benefit of all. The names and addresses of all parties signed to any of said instruments may be published for the benefit of all whom it may concern.

‘Witness the hands and seals of the parties hereto this fourteenth day of July, 1922.’

The appellee signed one of these agreements and the appellant signed another. In August and September, 1922, controversies arose between the appellant and appellee, and appellee demanded that appellant should submit the controversies to arbitration in accordance with the agreement, which appellant refused to do. Appellee brought this action for the $25 named in the contract, and in his statement of claim set forth a copy of the agreement and the fact that controversies arose and the refusal of the appellant to comply with his contract.

The municipal court refused to hold propositions of law submitted by the appellant that the agreement to submit to arbitration future controversies not existing at the time of its execution was void, and that the promise of the appellant to pay $25 damages for a breach of the void contract was therefore void.

Arbitration by agreement of parties as a method of settling disputes and controversies by substituting an arbitrator or arbitrators for a court proceeding according to the course of the common law was recognized at the common law, and an award might be enforced by an action at law, or in a proper case a party could call upon a court of equity to compel a specific performance of the award. Ballance v. Underhill, 3 Scam. 453. Specific performance of an agreement to arbitrate a present existing controversy would not be decreed by a court of equity, and until an award was made the authority of the arbitrators was subject to revocation by either party to the submission, except when the reference to arbitrators was by a rule of court. Paulsen v. Manske, 126 Ill. 72, 18 N. E. 275,9 Am. St. Rep. 532; Morse on Arbitration, 230; People v. Nash, 111 N. Y. 310, 18 N. E. 630, 2 L. R. A. 180, 7 Am. St. Rep. 747. Section 3 of the statute revising the law in relation to arbitration and awards (Hurd's Rev. St. 1921, c. 10) now provides that a submission to arbitration shall, unless a contrary intention is expressed therein, be irrevocable. That provision does not violate any constitutional right, and the common-law rule that either party might revoke a submission at any time before an award was made and take from the arbitrator all power to make a binding award has been modified in that particular. White Eagle Laundry Co. v. Slawek, 296 Ill. 240, 129 N. E. 753.

Inasmuch as the arbitration of controversies avoids the formalities, delay and expense of litigation in court, the courts, speaking from an economic standpoing, have approved and recommended that method of settlement. Gerrish v. Ayers, 3 Scam. 245;Merritt v. Merritt, 11 Ill. 565;Haywood v. Harmoon, 17 Ill. 477;Podolsky v. Raskin, 294 Ill. 443, 128 N. E. 534; Ballance v. Underhill, supra. The question, however, to be decided, is not whether the courts would advise the appellant to submitt his controversies with the appellee to arbitration, but whether he shall be compelled to do it because he signed an agreement that he would. The Constitution has created courts for the adjustment of rights, the settlement of controversies, and the redress of grievances, with all the necessary powers to enforce their judgments and decrees, and has preserved the right of citizens to invoke their jurisdiction. Parties generally, in dealing with each other, adjust their differences without the intervention of any authority; but, if they do not, they may refer any such matter to arbitration, or may call upon a court to enforce alleged rights or redress alleged grievances. If there is a submission to arbitration the law has always been that there must be an existing controversy between the parties.

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