Shepard & Morse Lumber Co. v. Collins

• Decision Date: 29 April 1953
• Citation: 256 P.2d 500,198 Or. 290
• Parties: SHEPARD & MORSE LUMBER CO. v. COLLINS.
• Court: Oregon Supreme Court

Page 500

256 P.2d 500

198 Or. 290

SHEPARD & MORSE LUMBER CO. v. COLLINS.

Supreme Court of Oregon.

Argued Feb. 4, 1953.

Decided April 29, 1953.

Clarence R. Wicks, of Portland, argued the cause for appellant. With him on the brief were Hugh L. Biggs, George H. Fraser and Hart, Spencer, McCulloch, Rockwood & Davies, of Portland.

Richard R. Carney, of Portland, argued the cause for respondent. With him on the brief was Kneland C. Tanner, or Portland.

Before LATOURETTE, C. J., and WARNER, ROSSMAN, LUSK and PERRY, JJ.

LUSK, Justice.

The petitioner, Shepard & Morse Lumber Company, a corporation, commenced this proceeding in Columbia County against the defendant (designated respondent in the petition), Charles A. Collins, to obtain specific performance of an agreement claimed to be an arbitration agreement under §§ 11-601 to 11-613, both inclusive, O.C.L.A., and an order abating an action brought by the defendant against petitioner. The court sustained a demurrer to the amended petition, and, the petitioner having refused to plead further, decree for the defendant was entered from which this appeal is prosecuted. The contract which gives rise to the controversy reads as follows:

'The employee, Charles A. Collins, was injured on the 14th day of February, 1949, while in the employ of the employer, Shepard & Morse Lumber Company, and in consideration of the mutual promises and agreements herein, it is hereby agreed as follows:

'(1) The employer agrees to pay the employee the sum of $45.63 for the period from February 14, 1949 to February 28, 1949 (12 1/2) Inc., the receipt whereof by the employee is hereby acknowledged, and the sum of $21.90 per week thereafter during the time that the employee is temporarily totally disabled on account of said injuries.

'(2) The employer further agrees to pay the employee for any permanent disability that may result from said accident at the rates provided in the Workmen's Compensation Law of the State of Oregon, as at present in force [O.C.L.A. § 102-1701 et seq.], which the parties agree to adopt for such rating purposes only; the employer also agrees to furnish all necessary medical and surgical attendance and hospital accommodations as provided by said Workmen's Compensation Law.

'(3) The employer further agrees that upon application made within two years from the last payment of compensation hereunder, the employer will continue the payment of compensation in accordance with the terms of this agreement in the event there shall be a recurrence or aggravation of the disability resulting from said injury.

'(4) The termination of temporary total disability, the extent of permanent disability, if any, and the recurrence or aggravation of any disability and the recovery therefrom, shall be determined in the first instance by the attending physician.

'(5) If the decision of the attending physician is not available for any reason, or if either party is dissatisfied with the decision of the attending physician, then the employer and the employee shall each select one duly licensed physician and surgeon to serve as arbitrators, and if these two are unable to agree, then said arbitrators shall select a third duly licensed physician and surgeon and the decision of two or more of the arbitrators shall be final and binding upon both the employer and employee.

'(6) Except for the payments to be made by the employer under this agreement, the employee hereby releases and discharges the employer from all other claims and demands whatsoever on account of said injuries.

'Dated at Westport, Oregon, this 14 day of March, 1949.

'Shepard & Morse

Lumber Company

'Employer

'by A. W. Laurence

'John E. Swint

'Witness

'Charles A. Collins (Seal)

'Charles A. Collins Employee

'Richard C. Collins

'Witness.'

The amended petition alleges that on February 14, 1949, the defendant was an employee of the petitioner and was injured while engaged in the performance of his duties, and that on the 14th of March petitioner and the defendant entered into the agreement above set out. It is further alleged that on or about August 23, 1949, defendant's attending physician determined the extent and degree of respondent's disability resulting from his injuries, whereupon petitioner advised defendant of his final rating and tendered payment in accordance with the terms and provisions of the contract, but defendant indicated to petitioner that he was dissatisfied with the findings of his attending physician. Petitioner thereupon requested that the dispute be submitted to arbitration in accordance with the agreement, but the defendant refused. It is further alleged that on September 22, 1949, defendant commenced an action against petitioner in the Circuit Court of the State of Oregon for the County of Multnomah to recover $100,000 general damages and additional special damages which defendant alleges he suffered as the result of the injury in question. The petitioner prayed that this action be abated and that the parties be ordered to proceed with arbitration of defendant's claim in the manner provided in the contract.

The principal question for decision is whether the agreement in the contract to submit the questions of the termination of defendant's temporary total disability and the extent of his permanent disability, if any, to the decision of three licensed physicians and surgeons is an arbitration agreement within the meaning of our statute. The relevant provisions of O.C.L.A. are as follows:

' § 11-601. All persons desiring to settle by arbitration any controversy, suit or quarrel, except such as respect the title to real estate or the terms or conditions of employment under collective contracts between employers and employes or between employers and associations of employes, may submit their differences to the award or umpirage of any person or persons mutually selected.'

' § 11-602. A provision in any written contract to settle by arbitration a controversy thereafter arising out of such contract, or out of the refusal to perform the whole or any part thereof, or an agreement in writing between two or more persons to submit to arbitration any controversy existing between them at the time of the agreement to submit, shall provided the arbitration be held within the state of Oregon, be valid, irrevocable and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.'

' § 11-603. A party aggrieved by the failure, neglect or refusal of another to perform under a contract or submission providing for arbitration, described in section 11-602, shall petition the circuit court, or a judge thereof, for an order directing that such arbitration proceed in the manner provided for in such contract or submission. Ten days' notice in writing of such application shall be served upon the party in default. Service thereof shall be made in the manner provided by law for personal service of a summons. The court, or a judge thereof, shall hear the parties, and upon being satisfied that the making of the contract or submission or the failure to comply therewith is not an issue, the court, or the judge thereof, hearing such application, shall make an order directing the parties to proceed to arbitration in accordance with the terms of the contract or submission. [Here follow procedural provisions for determining issues of the making of the contract or submission or failure to comply therewith.]'

' § 11-604. If any suit or proceeding be brought upon any issue arising out of an agreement which contains a provision for arbitration of the same matter in controversy in such suit or proceeding, then, upon application, any judge of a circuit court, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration, shall abate the action so that arbitration may be had in accordance with the terms of the agreement; said application to be heard similarly to hearings on motions.'

It cannot be disputed that if the agreement is one for an appraisal rather than arbitration, as those terms have been heretofore understood, the statute does not apply and the petitioner is not entitled to the relief which it seeks. 'The distinction between appraisal and arbitration', says Professor Williston, 'is of great importance, as appraisals are subject at common law to rules different in many respects from those applied to arbitrations, and the modern arbitration statutes are held not to apply to appraisals.' 6 Williston on Contracts (Rev.Ed.) 5375, § 1921A. The following cases, among many others, support the statement that modern arbitration statutes do not apply to appraisals. In re Fletcher, 237 N. Y. 440, 143 N.E. 248; Petition of American Insurance Co., 208 App.Div. 168, 203 N.Y.S. 206; Citizens Building v. Western Union Telegraph Co., 5 Cir., 120 F.2d 982; Bewick v. Mecham, 26 Cal.2d 92, 156 P.2d 757, 157 A.L.R. 1277; Poland Coal Co. v. Hillman Coal & Coke Co., 357 Pa. 535, 55 A.2d 414; Franks v. Franks, 294 Mass. 262, 1 N.E.2d 14.

Upon this subject Professor Williston says in the section of his work from which we have just quoted '* * * It is frequently difficult to determine whether the agreement is one of arbitration or appraisal; but the final test should be whether or not the parties intended the 'arbitrators' to determine ultimate liability or merely facts incidental thereto. Other tests are often laid down by the courts; but these seem question-begging and unhelpful. The leading examples of appraisal are provisions for determination by third parties of the amount of loss in insurance policies. In general, provisions in contracts for price or value fixing, appraisal of loss or damage to property, partition of property, fixing of boundary lines, ascertainment of quality or quantity of commodities, or verification of the performance of a contract, by third parties, are likely to be held to partake of the character of appraisals.

'If, however, no agreement for appraisal...