Paulsen v. Manske

Bailey, J. It is urged that the decree in this case, establishing mechanics’ Hens upon the premises in question, should be reversed on the ground that the contracts under which the petitioners furnished labor and materials were not made with the owners of the land. At the time said contracts were entered into, the legal title to the lot on which the buildings in question were to be erected stood in Lewis A. Brown, said title being held by him in trust for Flora A. Brown. They, being the owners of the premises, entered into a contract with Paulsen, which provided for the erection on said lot of a block of buildings. In erecting said buildings the Browns were to provide the necessary money by mortgaging the Jot, and were to keep said money in their own hands, and to pay it out for labor and materials on architects’ certificates indorsed by Paulsen. Paulsen was to take possession of the lot, make the contracts, see that the labor and materials were provided, have the oversight of the work, and, in general, attend to all business matters incident to the erection of the buildings. When the buildings were completed, the Browns were to deed to Paulsen the west ninety-five feet of the lot for §5,846, and the same with the buildings thereon were to belong to him, subject to the mortgage given to raise the money necessary to defray the cost of the buildings, said purchase money to be paid by erecting and turning over to the Browns a building on the east thirty-five feet of the lot, costing that sum, the Browns to assume only so much of said mortgage as the cost of the building on the east thirty-five feet should exceed said sum of §5,846. Under this arrangement Paulsen let the contracts for the erection of the buildings in his own name; and the decree can not be sustained only on the theory that he was acting, and was authorized to act, not only for himself, but also on behalf of and as the agent of the Browns. The scheme upon which the buildings were erected was somewhat peculiar, and it is not easy to define the exact legal relations established between the Browns and Paulsen by their contract. But we are unable to see anything in those relations which necessarily excludes the theory that, in entering into the various contracts for labor and materials, though acting in his own name, he was authorized to act, and was in fact acting, not only for himself, but as the agent of the Browns, or, at least, as the agent of Mrs. Brown, the beneficial owner of the lot. In the agreement executed by Mrs. Brown, Paulsen and the petitioners, submitting the matters in dispute between them to arbitration, admissions are made by Mrs. Brown in a very full and ample manner, that in making all of said contracts, Paulsen acted on her behalf as well as for himself. These admissions are competent evidence tending to establish Paul-sen’s agency, and are, in our opinion, so far as this point is concerned, sufficient to sustain the decree. Again, it is urged that the petitioners have waived their liens, and that the decree for that reason can not he sustained. The instrument relied upon as a waiver or release names no releasee and expresses no consideration, and we have therefore to look to extrinsic evidence to ascertain both the consideration and the party in whose favor the waiver or release was intended.to be executed. The reason for giving the release was that the agent of the mortgage company declined to pay over §7,000 of the money loaned on said mortgage unless the liens claimed by the mechanics and material men should be so arranged as to leave the mortgage the first lien on the premises. The consideration of the instrument was the consent of the mortgage company to pay over said money so as to make it available for the satisfaction, jpro tanto, of the claims of the mechanics and material men. Hot only did the consideration emanate from the mortgage, company, but the instrument, on being executed, was delivered to said company. The legal conclusion from these circumstances is that the mortgage company and that company alone was the party in whose favor the release was intended to be executed. That seems to us to be as clearly shown as though the name of the mortgage company had been inserted in the instrument as releasee. The release, being given to the mortgage company, is available for that company alone. It was not executed to Mrs. Brown or to Paulsen, or upon any consideration moving from them. So far as appears they are mere strangers to the instrument, and we know of no pu'inciple upon which they can be permitted to avail themselves of its benefits. We are of the opinion that the petitioners5 liens were in no way affected by the agreement to submit the differences between the parties to arbitration. Had the submission been followed by an award, the rights of the parties would undoubtedly have been conclusively determined. It is a general rule, however, that any person who is a party to a submission may, at any time before an award made, revoke the authority of the arbitrators; and for this purpose it makes no difference whether the submission is by deed or by parol. Morse on Arbitration, 230, and authorities cited. Such revocation may be express or it may be implied; and the institution of a suit by one party against another, after the submission has been entered into and before the award has been made, the cause of action being the subject-matter of the arbitration, will operate to revoke, by implication, the agreement to arbitrate. Peter’s Administrator v. Craig, 6 Dana, 307; Morse on Arbitration, 236. The institution by the petitioners of the present suit was, in law, a revocation of the agreement to arbitrate, and after such revocation, the rights of the parties were no longer subject to or affected by the agreement. We are of the opinion that none of the errors assigned by the appellants should be sustained, and the decree will therefore be affirmed. Decree affirmed.