Hood v. Hartshorn

The lease bears date February 20, 1862, and is for the term of five years from the first day of August then next. It contains the following clause, on which the rights of the parties in this action depend: “And it is agreed by and between the parties, that at the expiration of this lease the buildings which have been heretofore erected by the lessee on the premises shall be appraised by three disinterested men, one to be chosen by the lessor, one by the lessee, and the third by the two appraisers thus chosen ; and said Paine agrees to purchase said buildings of said Hood at the price so set by said appraisers.” This clause is to be construed with reference to its subject matter. By its terms, the appraisement was not to be made till the expiration of the lease. This would give no time for the removal of the buildings in case the appraisers should fail to agree ; and by operation of law they would become the property of the lessor without any conveyance or transfer. It would be unreasonable to construe the agreement so as to ren ier the obligation of the lessee to pay for them entirely depend» ent upon the making of an appraisement. The appraisement is to be regarded as a mere method of ascertaining the price to be *121paid for them. Yet the stipulation concerning the appraisement is not void. It gives the lessor certain rights which are preliminary to the rights of the lessee to maintain an action for the price. It binds the lessee to do all that was reasonably in his power to procure the stipulated appraisement. It is unlike the agreement in Phippen v. Stickney, 3 Met. 384, in which the referees were named, and when those individuals failed to make an appraisement the stipulated method of ascertaining the value wholly failed, there being no obligation resting on either party to appoint other appraisers. It then became proper to refer the matter to a jury. This agreement is also unlike the agreement in McCarren v. McNulty, 7 Gray, 139, in which the question whether the bookcase should be accepted was referred to the president of the association, whose decision was final without regard to the validity of the reasons he might give for it. In the present case, no appraisers are named, but each party is to act in their selection. If then one set of appraisers fail to agree, or if they act in such a manner as to render them obviously unfit to decide the matter, another appointment should be made; and a fair interpretation of the contract requires the lessee to use all reasonable efforts in his power in order to obtain suitable appraisers who will agree. He must continue to act till he puts the lessor in the wrong, or else makes it manifest that no suitable persons can be obtained to do the service within a reasonable time, which can hardly be supposed.

Whether the plaintiff has thus fulfilled the contract on his part is a question of fact for the jury; and the court are of opinion that the evidence offered by the defendant is material on this point. „ If he has fulfilled the contract, he is entitled to eeover the value of the buildings, to be assessed by the jury, or by an assessor if the parties so agree. If he has failed to ‘ulfil it, he is not entitled to maintain this action, but must proceed according to his contract, and make all reasonable efforts o procure an appraisement, which is all that a reasonable construction of his contract requires of him as preliminary to bringing an action for the price.

The question whether an arbitration clause in a contract is *122valid has often arisen, and in some of its aspects presents great difficulties. But the present case comes within the principle stated by Coleridge, J,, in Avery v. Scott, 8 Exch. 500, that it is not unlawful for parties to agree to impose a condition precedent with respect to the mode of settling the amount of damage, or the time of paying it, or any matters of that kind that do not go to the root of the action. See also Elliott v. Royal Exchange Assurance Co. Law Rep. 2 Exch. 243. There is no policy of the law in this Commonwealth adverse to the settlement of controversies or questions between parties by arbitration ; and contracts to that effect are enforced so far as they can be consistently with the principles of law. Judicial tribunals are provided by the government to enable parties to enforce their rights when other means fail, but not to hinder them from adjusting their differences themselves, or by agents of their own selection. In cases like that of Rowe v. Williams, 97 Mass. 163, there being no condition precedent to the right to recover, a mere agreement to refer, which either party may revoke before the arbitrators execute the power, is not a bar to an action, and does not oust the court of its jurisdiction.

New trial ordered.