SJOBERG v. HASTORF (1948)

This is an appeal from ‘Amended Finding and Order on Petition for Order Staying the Above-Entitled Action and Directing that Arbitration Proceed.’

Several distinct contentions are urged on appeal. The first point is the appealability of the order. If the ‘Amended Finding and Order’ is not appealable, the other points need not be considered.

Plaintiffs' contractors filed an action against defendants for breach of a contract. Defendants did not demur or answer but filed the above entitled petition to stay the trial and refer the matter to arbitration.

Reviewing courts have determined that certain orders found in Code of Civil Procedure, Pt. 3, Tit. 10, sections 1280 to and including 1293, are appealable under the designated code sections and certain provisions that have been assumed to be appealable. In Trubowitch v. Riverbank Canning Co., 30 Cal.2d 335, 182 P.2d 182, 190, it was stated the ‘proceeding [arbitration] under section 1282 * * *, although in form a special proceeding, is in substance a suit in equity for specific performance of a contract to arbitrate.’ The arbitration proceeding in that case was under the provisions of section 1282. No mention was made because the question was not raised of the appealability of the order contained in that section or in section 1284.

In this case plaintiffs agreed to construct a building as a home. Defendants, according to the complaint, which should be considered on this purported appeal to state the truth unless it is inconsistent or invalid on its face, agreed to pay the cost of the building in four installments. Two have not been paid. By consent of the parties, the cost of the building was changed by addenda to their agreement. Approximately fifty per cent of the agreed cost is still due plaintiffs. The defendants took possession of the premises July 20, 1946. The action for breach of contract was filed June 17, 1947. The notice of the hearing of the petition from which the appeal was taken was filed August 1, 1947. It lists a certain statement which ‘illustrates the kind of matters which are in dispute.’ It does not purport to be definite in listing alleged defects; this after eleven months occupancy of the building. The trial court was presented by the contractor with a verified complaint for breach of contract involving appraisement of the amount due and an unverified petition to stay proceedings and refer to arbitration the question whether certain work had been properly performed. See 3 Am.Jur., p. 830, sec. 2; Glesby v. Balfour, Guthrie & Co., Ltd., 63 Cal.App.2d 414, 147 P.2d 60; Jordan v. Friedman, 72 Cal.App.2d 726, 165 P.2d 728; Pneucrete Corporation v. United States Fidelity & Guaranty Co., 7 Cal.App.2d 733, 46 P.2d 1000.

The particular section involved herein, sec. 1284, provides: ‘If any suit or proceeding be brought upon any issue arising out of an agreement providing for the arbitration thereof, the court in which such suit or proceeding is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration, shall stay the action until an arbitration has been had in accordance with the terms of the agreement; provided, that the applicant for the stay is not in default in proceeding with such arbitration.’

Section 1282 sets forth the procedure for arbitration to settle disputed provisions of a written contract. Section 1284 permits the trial court, in a proper case, to stay the proceedings pending the termination of arbitration. Section 1293 provides: ‘An appeal may be taken from an order confirming, modifying, correcting or vacating an award, or from a judgment entered upon an award, as from an order or judgment in an action.’

Justice Knight, formerly a member of this court, considered Pt. 3, Tit. 10, secs. 1280–1293, inclusive, in Jardine Matheson & Co., Ltd. v. Pacific Orient Co., 100 Cal.App. 572, 575–577, 280 P. 697, 698, and wrote his views on each section in a thorough analysis thereof. The following portions of the opinion answer the question of the appealability of the ‘Amended Finding and Order’ in this case: ‘In the present case the record discloses that appellant entered into a written contract with respondent to sell and deliver to the latter a certain quantity of wood oil, which contract provided, among other things, that any dispute arising thereunder should be submitted to arbitration immediately in the manner therein set forth. Thereafter and under the authority of section 1282 of said Code respondent petitioned the superior court in and for the city and county of San Francisco for an order for the enforcement of the arbitration agreement, alleging that appellant had breached the contract to deliver said oil. Appellant demurred to the petition and moved for its dismissal, and the demurrer being overruled and the motion being denied, appellant answered, and afterwards amended its answer; and later certain portions of the answer were stricken out on motion of the respondent. A hearing was then had before the court sitting without a jury, and as a result thereof the court entered written findings, and in conformity with the findings granted an order directing the parties ‘to proceed with the arbitration of the controversy or dispute set out in said application, in accordance with the terms of said agreement. * * *’ Thereupon appellant appealed from said order.

‘Respondent contends that section 1293 was intended by the Legislature to be allembracing and restrictive in its effect, and that consequently, since the order from which the appeal herein was taken is not one of those enumerated in said section, the appeal based thereon should be dismissed. We are of the opinion that this contention must be sustained.

‘Upon reading the text of the foregoing sections it becomes evident that the purpose of adding them to the Code was to adopt for this state a complete scheme for the expeditious and summary enforcement of agreements to arbitrate, and to provide a judicial review of the proceedings taken pursuant thereto, after the matter of arbitration has been completed and the award has been made, and the fact that the Legislature saw fit to specify in one code section the different orders and judgment from which appeals may be taken clearly indicates, in our opinion, an intention to restrict the appeals in such proceeding to the orders and judgment therein specified, and the obvious reason for not including among such appealable orders the one which directs the parties to proceed with the arbitration was that if at the very threshold of the proceeding the defaulting party could appeal and thereby indefinitely delay the matter of arbitration, the object of the law and the purpose of the written agreement of the parties would be entirely defeated.

‘Appellant contends that regardless of the right of appeal given by section 1293, the legal proceeding authorized by said Code sections constitutes a special proceeding of a civil nature, and that therefore under section 963 of the Code of Civil Procedure an appeal may be taken from any final order made therein, and in this connection it is claimed that the order complained of, directing the parties to proceed with the arbitration, is in its nature final. * * * In the present situation, however, adequate remedy by appeal is afforded; two appeals being allowed from orders in their nature interlocutory, namely, the order confirming the award and the order modifying or correcting the award, and two from orders in their nature final, namely, the order vacating the award, and the judgment. Therefore it is not unreasonable to believe that the Legislature intended to restrict the right of appeal to such orders and judgment.’

If the order referred to in the last cited case is not appealable, then a ‘Finding and Order’ to stay the trial and direct arbitration is not appealable. It is not an appeal ‘from an order confirming, modifying, correcting or vacating an award * * *.’ Sec. 1293.

If defendants or plaintiffs present admissible evidence to the trial court an appeal is available from the judgment therein entered and all rulings and orders heretofore made by the court as to whether this controversy is subject to arbitration are reviewable on the same appeal. ‘We believe the application for the writ of prohibition should be denied for the further reason that the respondent court has jurisdiction of the subject-matter of the action, and the jurisdiction to determine the question whether the issue involved in the pending suit is referable to arbitration is vested in the trial court by the provisions of sections 1283 and 1284 of the Code of Civil Procedure. The trial court had the right and power to decide this question, and, if it was not satisfied that the issue was referable, to so decide and to proceed thereupon to try the action. If the trial court decided erroneously, it was error committed in the exercise of its jurisdiction, to be reviewed upon appeal from the judgment.’ Fischer v. Superior Court, 105 Cal.App. 466, 470, 287 P. 556, 557.

The proceeding herein is not appealable and is therefore ordered dismissed.

WARD, Justice.

PETERS, P. J., and BRAY, J., concur.