Opinion
No. 41291.
November 23, 1959.
1. Arbitration and award — either party may revoke submission before award is made.
The statute governing arbitration and award does not abrogate the common-law rule that either party may revoke agreement to submit to arbitration at any time before award has been made. Sec. 279, Code 1942.
2. Pleading — motion to strike plea of waiver properly declined.
Trial Court properly declined to strike from contractor's answer alleged defenses to alleged delays in prosecution of work, which were in nature of plea of waiver by complainants of contractor's failure to give notice of expected delay.
3. Appeals — interlocutory — should not have been granted.
Interlocutory appeals from interlocutory decrees overruling defendant's plea and declining to strike defenses from answer should not have been granted where controlling principles of law were already settled by previous decisions, but court would not dismiss the direct or cross appeal of its own motion.
Headnotes as approved by McGehee, C.J.
APPEAL from the Chancery Court of Harrison County; WILLIAM G. HEWES, Special Chancellor.
Estes Alexander, Mize, Thompson Mize, Gulfport, for appellant.
I. Parties to a contract may voluntarily in advance of any dispute agree to submit any dispute to arbitration as a condition precedent to filing suit with reference to the dispute. Aetna Ins. Co. v. Cowan County, Treasurer, 11 Miss. 453, 71 So. 746; Franklin Fire Ins. Co. v. Brewer, 173 Miss. 317, 159 So. 545; Horne v. State Building Comm., 122 Miss. 520, 76 So.2d 356; Jones v. Harris, 59 Miss. 214; Standard Millwork Supply Co. v. Mississippi Steel Iron Co., 205 Miss. 96, 38 So.2d 448; Sykes v. Royal Casualty Co., 111 Miss. 746, 72 So. 147, L.R.A. 1916F 1043; Secs. 279-297, Code 1942; 3 Am. Jur., Secs. 31, 33 pp. 856, 859; 6 C.J.S., Sec. 29 p. 169.
White White, Gulfport, for appellees.
I. An agreement to arbitrate is not binding and may be revoked by either party prior to submission. Home Ins. Co. v. Watts, 229 Miss. 735, 91 So.2d 722; Horne v. State Building Comm., 222 Miss. 520, 76 So.2d 356; Hutto v. Jordan, 204 Miss. 30, 36 So.2d 809; Jones v. Harris, 59 Miss. 214; Standard Mill Work Supply Co. v. Mississippi Steel Iron Co., 205 Miss. 96, 38 So.2d 448; Sec. 279, et seq., Code 1942; 3 Am. Jur., Secs. 31, 33 pp. 856, 859.
II. Cross-appeal.
III. The Chancery Court of Harrison County, Mississippi erred in overruling the motion of cross-appellants to the cross-bill. Zouboukos v. Costas, 232 Miss. 860, 100 So.2d 781; 12 Am. Jur., Secs. 229, 331 pp. 751, 887.
APPELLANT IN REPLY.
I. Reply to appellees Point One. Jones v. Harris, 59 Miss. 214; Zouboukos v. Costas, 232 Miss. 860, 100 So.2d 781.
II. Reply to appellee's Point One on cross-appeal. Coombs v. Beede, 89 Maine 187, 36 A. 104, 56 Am. St. Rep. 406; Edward Barron Estate Co. v. Woodruff Co., 163 Cal. 561, 126 P. 351, 42 L.R.A. 125; 3 Am. Jur., Sec. 5 p. 1000.
The appellant is a building contractor who agreed for a stipulated price to construct a 24-unit motel for the appellees on a tract of land owned by them in Harrison County, Mississippi.
The appellees brought this suit against the appellant J.C. McClendon, Jr., the contractor, and alleged that they owed the said contractor the sum of $6,000.30, but that after deducting their claims for damages in the aggregate sum of $5,758.96 on account of the delay in the construction, they alleged that they owed the contractor only a balance of $241.34, which amount was tendered into the registry of the Chancery Court of Harrison County upon the filing of this suit by the owners against the said contractor.
The contractor filed an answer to the bill of complaint, as amended, and alleged among other things, that "The bill of complaint fails to allege the submission of the dispute to a board of arbitration in accordance with Article 40 of the general conditions of the contract" between the parties. The chancellor found that such arbitration agreements may be revoked or cancelled at will by either party prior to actual award. In his opinion of the trial of the case he recognized that New York and California, in particular, had, by statute, abrogated this common-law rule and had provided for the enforcement of arbitration agreements. He cited 3 Am. Jur. 856, Section 31, to the effect that "So long as agreements to arbitrate, made in advance of the controversy, remain executory, different rules prevail than in the case of executed agreements. It is settled at common law that a general agreement, in or collateral to a contract, to submit to final determination by arbitrators the rights and liabilities of the parties with respect to any and all disputes that may thereafter arise under the contract is voidable at will by either party at any time before a valid award is made, and will not be enforced by the courts, because of the rule that private persons cannot, by a contract to arbitrate oust the jurisdiction of the legally constituted courts." See also 6 C.J.S. 169, Section 29.
(Hn 1) In the case of Jones v. Harris, 59 Miss. 214, this Court said: "The right of either party to revoke a submission before award made, where the submission is not a rule of court, or regulated by statute changing the common law, is well settled and universally recognized," citing authorities. Cf. Standard Mill Work and Supply Company v. Mississippi Steel Iron Company, 205 Miss. 96, 38 So.2d 448, wherein this Court stated: "Again, either party to a written agreement for submission to arbitration has the right to revoke the submission before award is made," citing Jones v. Harris, supra, and 3 Am. Jur. 856, Sections 30 and 31. See also the case of Machine Products Co., Inc., et al. v. Prairie Local Lodge No. 1538 of International Association of Machinists, AFL-CIO, et al., 230 Miss. 809, 94 So.2d 344. Our statute on Arbitration and Award, Section 279, Code of 1942, recognizes the right of parties to submit their disputes to arbitration, but in our opinion this statutes does not attempt to abrogate the common-law rule to the effect that either party may revoke an agreement to submit to arbitration at any time before an award has been made.
We are therefore of the opinion that the trial court was correct in overruling the plea of the appellant hereinbefore mentioned.
(Hn 2) We are of the opinion that the trial court was also correct in declining to strike from the defendant's answer its alleged defenses to the alleged delays in the prosecution of the work under the contract, since such allegations of the defendant's answer were in the nature of a plea of waiver on the part of the complainants as to the failure of the defendant to give notice to the complainants that the completion of the building would be delayed and of the reasons therefor.
(Hn 3) The Court is of the opinion that these interlocutory appeals should not have been granted, since, in our opinion, the controlling principles of law are already settled by our previous decisions on the questions involved, but since no motion was made to dismiss either the direct or cross-appeal, we have not seen fit to do so of our own motion.
For the reasons hereinbefore stated, the case must be affirmed on both direct and cross-appeals from the interlocutory decrees and the cause remanded.
Affirmed on direct and cross-appeals and remanded.
Hall, Holmes, Ethridge and Gillespie, JJ., concur.