Lower Baraboo River Drainage Dist. v. Schirmer (In re Lower Baraboo River Drainage Dist.)

• Decision Date: 30 April 1929
• Citation: 225 N.W. 331,199 Wis. 230
• Parties: IN RE LOWER BARABOO RIVER DRAINAGE DIST. LOWER BARABOO RIVER DRAINAGE DIST. ET AL. v. SCHIRMER ET AL.
• Court: Wisconsin Supreme Court

199 Wis. 230

225 N.W. 331

IN RE LOWER BARABOO RIVER DRAINAGE DIST.

LOWER BARABOO RIVER DRAINAGE DIST. ET AL.

v.SCHIRMER ET AL.

Supreme Court of Wisconsin.

April 30, 1929.

Action by the Lower Baraboo River Drainage District and others against Ed Schirmer and another. From an order requiring additional assessment on lands in drainage district, plaintiffs appeal. Affirmed.--[By Editorial Staff.]

Action begun September 14, 1927. Order entered July 12, 1928.

Appeal from an order of the Circuit Court for Columbia County; Hon. Oscar M. Fritz, Judge presiding, ordering an additional assessment on the lands in a drainage district.

The necessary facts involved in the issues will appear in the opinion.Wm. R. McCaul, of Tomah, and W. H. Farnsworth, H. E. Andrews, and Daniel H. Grady, all of Portage, for appellants.

Hill, Thomann & Beckwith and John T. Harrington, all of Madison, and James H. Hill, of Baraboo, for respondent.

DOERFLER, J.

The contract for the construction of the drainage ditch, entered into between the commissioners and the contractor, among other things, contained the following provision: “All work under this contract shall be done to the satisfaction of the engineer employed by the party of the first part, who shall in all cases determine the amount, quality, acceptability and fitness of the several amounts of work which are to be paid for hereunder, and shall decide all questions which may arise as to the measurements of quantities and the fulfillment of the contract on the part of the party of the second part, and shall determine all questions respecting the true construction or meaning of the plans and specifications. In case of dispute between the district engineer and the contractor the decision of the state engineer shall be taken, and decision thereon shall be final and conclusive.”

It is strenuously argued by counsel for the contestants that this provision of the contract is invalid; that section 1379--10c of the Statutes 1919 contemplates that the court shall at all times have supervisory power over all acts of the commissioners and of all proceedings in the creation, establishment, and construction of the drainage district; that such a contract provision deprives the court of its supervisory power, and attempts to vest in the arbitrator a power which under the district drainage law must reside in the commissioners and the court; that the authority thus created by the arbitration provision amounts to an invalid delegation of power, in that it substitutes the award of the arbitrator in place of the board and of the judicial decision of the court.

The important fundamental issue which is raised in connection with the alleged deprivation of the court of its jurisdiction, under circumstances like those involved in the instant case, is not a new one. It was raised in the case of Fox v. Masons' F. A. Ass'n of America, 96 Wis. 390, 71 N. W. 363, in connection with the submission to arbitration of questions arising under an accident insurance policy: It was there held: “On grounds of public policy, all agreements between parties to submit the whole subject matter of their differences to arbitration, wholly stipulating away the rights of each or either party to resort to the tribunals created by the law of the land for a determination of such differences, are void, and have been uniformly so held. Hamilton v. Liverpool & L. & G. Ins. Co., 136 U. S. 242 [10 S. Ct. 945, 34 L. Ed. 419]; May, Ins. § 492; Leach v. Republic F. Ins. Co., 58 N. H. [245]. Agreements to arbitrate special matters, such as, under an insurance policy, the amount of the loss, something that does not go to the whole groundwork of the controversy, have been as universally sustained. Viney v. Bignold, 20 Q. B. Div. 172; Scott v. Avery, 5 H. L. Cas. 811; Delaware & H. Canal Co. v. Penn. Coal Co., 50 N. Y. 250;Reed v. Washington F. & M. Ins. Co., 138 Mass. 572; [[[Wolff] v. Liverpool & L. & G. Ins. Co., 50 N. J. [Law], 453 ;Hall v. Norwalk F. Ins. Co., 57 Conn. 105 .”

[1][2] The arbitration clause in the instant case does not submit all matters in controversy to the arbitrators, with the effect of ousting the court of jurisdiction. The quoted contract provision belongs to the second class of cases above referred to, and not to the first. This provision of the contract in form is like innumerable contracts which have come before the court, where a third person, like an architect or an engineer, is appointed, who possesses expert knowledge upon the subject, and who is ordinarily better able to solve the issues involved than the parties directly concerned. The findings of such arbitrators are not absolutely conclusive, but may be impeached for fraud, actual or constructive, by the courts. Keachie v. Starkweather Drainage District, 168 Wis. 298, 170 N. W. 236;Montgomery v. American Central Ins. Co., 108 Wis. 146, 84 N. W. 175;Borgnis v. Falk Co., 147 Wis. 327, 133 N. W. 209, 37 L. R. A. (N. S.) 489. In the Keachie Case, supra, it was held by this court: “The effect of a provision of this kind is not doubtful. It is well settled in the law. It is not void because it ousts the court of jurisdiction, as earnestly contended by respondents.”

Counsel for the contestants rely largely upon the following Wisconsin cases: Shipman v. State, 43 Wis. 381, and Lauenstein v. Fond du Lac, 28 Wis. 336. In the Shipman Case, supra, a board of building commissioners was authorized by chapter 39 of the Laws of 1870 to accept plans and specifications for the construction of a part of the Northern Hospital, and to supervise such construction. The law also provided for the appointment of a building superintendent to act in an advisory capacity as an architect. It was held in that case that the commissioners were charged with the duty not only to procure a proper plan and to enter into a proper building contract, but to see that the building was completed according to such contract, and this duty they could not wholly devolve upon the superintendent. The court held: “They [the commissioners] might have rejected the plans submitted, and called for others. They were made the judges of his [the superintendent's] plans and of their sufficiency. The commissioners,not the architect, had to determine the plan. * * * They were the judges of the efficiency” of the superintendent, “and could have dismissed him at pleasure. * * * But so far as the plans were equally intelligible to the commissioners and the plaintiff, * * * the commissioners assumed responsibility for the plans when they adopted them. And so far as defects of construction in the building were equally open to detection by the commissioners and the plaintiff, on the completion of the building, in so far as these pleadings disclose, the commissioners assumed responsibility for them when they accepted the building.”

It will thus appear that under the express wording of the statute, the sole duty of accepting plans and of supervising the construction vested in the commissioners. This duty could not be delegated on defects which were as equally detectable by the commissioners as by the superintendent. In other words, the opinion holds expressly that, where the matter involved one of expert knowledge which was possessed by the superintendent, but was not within the knowledge of the commissioners, the commissioners could have relied entirely upon the expert. Furthermore, in that case there was an express delegation of power and authority in the commissioners by virtue of the statute, which does not exist in the instant case.

In the Lauenstein Case, supra, the express power to purchase a schoolhouse site was by law vested in the common council and in a board of school commissioners, and it was there held that these two bodies alone could exercise such powers, and that they could not be delegated to a board of public works without an express grant of legislative power so to do.

Section 1379--10c (1) of the Statutes of 1919 provides as follows: “All proceedings under the drainage district law are equitable in their nature. The court shall at all times have supervision over the commissioners and may require them to report on any matter connected with their duties and after hearing may remove any commissioner from office for neglect of duty, malfeasance in office or other good cause. The court may in any proceeding bring in new parties upon such terms as shall be just with like force and effect as if they were original parties to said proceeding.”

[3] It is argued by the contestants that all acts and proceedings under the drainage act are subject to the equitable jurisdiction of the court, and that therefore a submission to arbitration in the form provided for by the contract deprives the court of an essential part of its equitable jurisdiction. When drainage proceedings are begun, the landowners are all made parties, and this was done in the instant case. There is no express mandatory provision of the statute which requires notice to be served upon all the landowners in all cases thereafter, with respect to the various acts and proceedings involved in the construction of a drainage ditch. The owners, being vitally interested in the construction of the ditch, may at all times appear in the proceeding, and are entitled to be heard. The court, in the exercise of its equitable powers, may direct that special notice be given to them, in order to permit them to be heard, and they may be specially impleaded, upon the application of the commissioners, or upon their own application, or by the court upon its own initiative; but otherwise the commissioners represent them.

[4][5] Independent of the statute, the court in the exercise of its equitable jurisdiction has broad discretionary powers to prevent inequitable results and to promote equity, and it may extend the proceedings to all such matters as it may deem necessary in order that the conscience of the chancellor may be fully advised before approving or...