First Ecclesiastical Soc. of New Britain v. Besse

• Decision Date: 08 March 1923
• Citation: First Ecclesiastical Soc. of New Britain v. Besse, 98 Conn. 616, 119 A. 903 (Conn. 1923)
• Court: Connecticut Supreme Court
• Parties: FIRST ECCLESIASTICAL SOCIETY OF NEW BRITAIN v. BESSE.

119 A. 903

98 Conn. 616

FIRST ECCLESIASTICAL SOCIETY OF NEW BRITAIN v. BESSE.

Supreme Court of Errors of Connecticut.

March 8, 1923

Appeal from Superior Court, Hartford County; George E. Hinman Judge.

Suit by the First Ecclesiastical Society of New Britain against Lyman W. Besse.Judgment for defendant on demurrer, and plaintiff appeals.Reversed and remanded.

Suit to recover the value of lands and rights conveyed by the plaintiff to the defendant in excess of the value of land and rights conveyed by the defendant to the plaintiff, brought to the superior court in Hartford county, wherein a demurrer to the complaint was sustained by the court; Hinman, J.The plaintiff refused to amend the complaint, and judgment was thereupon entered for the defendant, from which the plaintiff appeals.Error and cause remanded.

The complaint sets forth that in February, 1920, the plaintiff and defendant entered into a contract for the exchange of certain land and rights by conveyance from each to the other as fully appears in the contract, of which a copy is made part of the complaint as Exhibit A; and that on April 29 1920, for the purpose of carrying out this contract, the plaintiff and defendant entered into a certain indenture conveying from each to the other the lands and rights referred to in this contract; and a copy of this indenture is made a part of the complaint as Exhibit B.The complaint continues:

" (4) In and by the terms of said contract Exhibit A, it was provided that for the exchange of said property and rights the plaintiff should pay no money, but that the amount of money to be paid to the plaintiff by the defendant for said exchange of land and rights, if any, should be the subject of future agreement, and said contract further provided: ‘ If the parties thereto cannot agree within ninety days from the date of said conveyance upon the price if any, to be so paid by said Besse to said First Ecclesiastical Society, then the same shall be left forthwith to arbitration, and if the parties thereto cannot agree upon one arbitrator, then each party shall select an arbitrator, and the two arbitrators so chosen shall select the third arbitrator, and the one arbitrator or the three arbitrators so chosen shall hear and determine the question of the amount, if any, by which said property of said Besse is benefited by said transaction over and above the amount of damage or detriment to said property of said Besse, and make an award thereon, and that the parties agree to be bound by whatever award said arbitrator or arbitrators make and that from said award there shall be no appeal."

" (5)The plaintiff and the defendant were unable to agree within 90 days from the date of said conveyances upon the price, if any, to be paid by the defendant to the plaintiff and although the parties hereto have repeatedly attempted to agree upon said price, they have utterly failed to agree upon the same.

" (6) Pursuant to the terms of said contract Exhibit A, on or about the _____ day of _____, the parties being unable to agree upon one arbitrator, the plaintiff selected and appointed E. Allen Moore an arbitrator, and the defendant selected and appointed D. E. Burbank an arbitrator, and thereafter said Moore and said Burbank attempted to select a third arbitrator, but although said Moore and Burbank have repeatedly endeavored to agree upon the selection of such third arbitrator, they have at all times failed to agree upon any person as such third arbitrator and have failed to select such third arbitrator.Said Moore and Burbank having failed to agree upon the selection of such third arbitrator, said Moore on or about the _____ day of December, 1921, resigned as such arbitrator, and the plaintiff and defendant are in hopeless disagreement as to the price to be paid by the defendant to the plaintiff for said exchange of land and rights.

" (7) The reasonable value of the land and rights so conveyed to the defendant by the plaintiff in excess of the reasonable value of the land and rights so conveyed by the defendant to the plaintiff is $15,000, and the amount by which said property of the defendant is benefited by said transaction over and above the amount of damage or detriment to said property of the defendant is $15,000."

The complaint is dated August 2, 1922.The demurrer, filed October 31, 1922, sets up that it appears by the complaint that this action was prematurely brought because (1) the agreement for arbitration was an integral and essential part of the contract for exchange of properties, and is still unperformed by the plaintiff; (2) until so performed there was no controversy between the parties justifying a resort to a court of justice; (3) that the failure of the arbitrators to agree upon an umpire did not break or terminate the agreement for fixing by arbitration the amount due or to become due to the plaintiff; (4) that upon the resignation of the plaintiff's arbitrator, it was its duty, under the contract, to name another, which it has not done.This demurrer was sustained, and from this action and the consequent judgment for the defendantthe plaintiff appealed.

Where a contract for the exchange of lands provided that defendant was to pay to plaintiff the excess in value over that received by plaintiff and that such value was to be determined by arbitration, each party selecting one arbitrator and the two selecting the third, where the two arbitrators failed to agree upon the selection of a third and plaintiff's arbitrator resigned, it was not incumbent upon plaintiff to make a second selection.

John T. Robinson, of Hartford, for appellant.

Arthur L. Shipman, of Hartford, for appellee.

BURPEE, J.

It was plainly the intention of the parties to the contract set up in the complaint that the exchange of lands and rights by conveyance from one to the other should be made under specified conditions.One of these conditions was that the defendant would pay to the plaintiff for the exchange of property the amount of money, if any, which should be agreed upon by them within 90 days after the conveyance had been made, and if they could not agree upon this price within that time, they should select arbitrators to determine the question of the amount, if any, of benefits above damages accruing to the defendant's property by the transaction, and to make a binding award thereon.

This court said in Hall v. Norwalk Fire Ins. Co.,57 Conn. 105, 114, 17 A. 356, 359, that-

" It has always been held, both by the courts of England and of the United States, that arbitrations to settle particular questions which are auxiliary to the jurisdiction of courts, such as the amount of damages, or the amount of the loss by fire under policies of insurance, are binding in law, and indeed highly favored by courts."

In many cases it appears that the agreements were designed to leave to the decisions of persons to be selected questions of amount, quality, value, or price which might come up during or after the performance of the contract.Of these it has been said that a reference agreed on for such a purpose is not an arbitration in the accepted legal sense of the word, because an arbitration is a method adopted to settle already existing controversies, and a reference of this kind is intended to affect only possible future controversies; and that the latter, accurately speaking, is an appraisement or estimate.Fisher v. Merchants' Ins. Co.,95 Me. 486, 50 A. 282, 85 Am.St.Rep. 428;Noble v. Grandin,125 Mich. 383, 84 N.W. 465;Toledo S. S. Co. v. Zenith Transportation Co.,106 C.C.A. 501, 184 F. 391;Collins v. Collins,26 Beav. 306, 28 L. J. Ch. N. S. 184;Parsons v. Ambos,121 Ga. 98, 48 S.E. 696;Palmer v. Clark,106 Mass. 373;Stout v. Phoenix Assur. Co.,65 N.J. Eq. 566, 56 A. 691.But it is undisputed, as these cases demonstrate, that a stipulation to submit such matters of future disagreement in a manner specified, by whatever name it may be called, is not of the substance of the contract, but is merely an incident included in the contract to determine auxiliary, collateral, incidental, or ministerial questions which are considered as possible or likely to arise.Moreover, it has been generally held that while such an agreement is valid, it is not binding and irrevocable as long as it remains executory and has not been carried through to an award or decision.Reed v. Washington F. & M. Co.,138 Mass. 572;Hartford Fire Ins. Co. v. Bourbon County Court,115 Ky. 109, 72 S.W. 739;Welch v. Miller,70 Vt. 108, 39 A. 749;Hobart v. Drogan,10 Pet. 108, 9 L.Ed. 363;The Excelsior, 123 U.S. 40, 8 Sup.Ct. 33, 31 L.Ed. 75;Hamilton v. Home Ins. Co.,137 U.S. 370, 385, 11 Sup.Ct. 133, 34 L.Ed. 708.

It seems also to be settled by the courts of the United States and Great Britain that an agreement to refer to third persons, to be chosen in the future, the decision of an anticipated disagreement relating to such questions is not a defense to legal proceedings instituted by a party to the agreement who has ignored or revoked it or failed to carry it out, unless the contract provides that it shall have such effect; but the courts will take jurisdiction and adjudicate the controversy just as if no such agreement had been made.As instances of such decisions, see cases cited; also, Perry v. Cobb,88 Me. 435, 34 A. 278, 49 L.R.A. 389;Holmes v. Richet,56 Cal. 307, 38 Am.Rep. 54;Frink v. Ryan, 3 Scam.(Ill.) 322;Gasser v. Sun Fire Office,42 Minn. 315, 44 N.W. 252; and others collected in note in 47 L.R.A. (N. S.) 358.

In the present suit, the complaint sets up a contract for the exchange of property.That was the subject and object of the contract, and it has been performed.For this exchange, the defendant agreed to pay to the plaintiff an amount...