Oakwood Retreat Ass'n v. Rathborne

LyoN, J. The complaint does not state that the architect, Edbrooke, has ever adjusted any claim made in this action on account of the alleged breaches by Horacek of his agreement with the plaintiff. The position of counsel for the appellant is that such adjustment is a condition precedent to the right of the plaintiff to recover on the bond in suit, and hence that, in the absence of an averment of such adjustment, the complaint fails to state facts sufficient to constitute a cause of action. If the premise be true, the conclusion would seem logically to follow. The question to be determined is, therefore, Can the plaintiff, under the terms of its agreement with Horacek as stated in the complaint, maintain an action for breaches of such agreement by Horacek without first procuring an adjustment of its [181] claims by Edbrooke, the architect named in the agreement ? If the question be answered in the negative, it would follow that this action brought upon a bond conditioned for the performance of such agreement cannot be maintained. The clauses in the agreement binding Horacek to furnish the material and erect the building to the full and complete satisfaction of Edbrooke, and making the contract price therefor payable only upon his estimates and certificates and when, the contract should be performed to his satisfac-tionpwere inserted for the benefit and protection of the plaintiff. They bind the plaintiff to nothing. But were Horacek suing for his compensation under the contract, those clauses, would raise a condition precedent against him, and he could only maintain his- action by averring and proving performance of his agreement to the satisfaction of the architect named therein, or, at least, that a certificate of such satisfaction was wrongfully or fraudulently withheld. Such wras the ruling of this court in Hudson v. McCartney, 33 Wis. 331, upon an agreement containing the same stipulations. Very clearly the above stipulations in the agreement do not require the plaintiff to allege and prove that the materials and work were not to the satisfaction of the architect. The only other clause in the agreement relating to the question before us is that which conferred upon the architect the power to adjust all claims of either party against the other, and to decide upon the fitness of material used in the building, and which provided that “ in all cases of difference of opinion between this plaintiff and the said Horacek, in any other matter connected with the construction of said building, the decision of said Edbrooke should be final and binding.” In Hudson v. McCartney, it was strongly intimated, if not so held, that á similar clause in the building contract then under consideration was not a prospective submission to arbitration, but only an express [182] delegation of a power which was necessarily conferred by implication in preceding clauses, common to that contract and the one involved in this action. In that view of the clause, it certainly imposes no condition precedent upon the plaintiff, for it contains no stipulation by the plaintiff to submit anything to arbitration. It merely confers on the architect power to make an award in certain matters,— a power which it does not appear either party has invoked. See note to this case in 26 N. W. Rep. 144.— Rep. But, regarding the clause as a prospective submission to arbitration, we still fail to find in it a condition precedent upon the plaintiff’s right of action. The agreement contains no stipulation not to sue for breaches until an award is made. In the absence of such a stipulation, the great weight of authority is that a stipulation to refer controversies arising out of a contract, to arbitration, is no bar to an action by either party to recover damages for alleged breaches of the contract. Many of the cases are cited in the brief of counsel for the plaintiff. Such is the rule in this state. Canfield v. Watertown Fire Ins. Co. 55 Wis. 419. See, also, Phoenix Ins. Co. v. Badger, 53 Wis. 283. No case in this court holds to the contrary, so far as we know. ' Certainly those cited to sustain the opposite doctrine fail to do so. We reach the conclusion that there is no stipulation in the contract which interferes with the right of the plaintiff to maintain this action for the cause stated in the complaint. Also, that in bringing the action the plaintiff has not violated any agreement with IToracek, the principal in the bond in suit. Because he has not done so, there can be no doubt of his right to maintain this action against the sureties as well as the principal. The complaint states a cause of action against all the defendants, and the demurrer of the defendant Bathlorne thereto was properly overruled. By the Court.— Order affirmed.