Appeal from Sixth Judicial District Court, Humboldt County; Edward A. Ducker, Judge.
Callahan & Brandon, for Appellant.
L. G. Campbell and Salter & Robins, for Respondent.
By the Court, McCarran, C. J. (after stating the facts):
1. As to the contention of appellant that by entering into the agreement to submit the controversy to arbitration the case was thereby discontinued and dismissed, such is untenable in our judgment. It is not to say that the contention of appellant in this respect is without support in the way of authority, but it would appear to us that the better rule is that the intention of the parties as made manifest by their acts and conduct, together with their intention as set forth in their agreement, must govern in determining the question as to whether or not the case was to be discontinued or dismissed. Where, as here, the submission provides that judgment may be entered on the report or award, such has been regarded as keeping the suit alive for such purpose. (Ryan v. Dougherty, 30 Cal. 218.) Where, from the agreement for submission or from the acts or conduct of the parties, it appears that they did not intend that the cause should be discontinued, no discontinuance or dismissal will be presumed. (Jacoby v. Johnston, 1 Hun, 242.) See, also, Lawson's Rights and Remedies, sec. 3322.
In the case of Wilkinson v. Prichard, 145 Iowa, 65, 123
N. W. 964, Ann. Cas. 1912a, 1259, this very question was considered. There, as here, the court had before it a stipulation providing for the submission of the cause to arbitration while the case was pending at issue in the trial court.
The Supreme Court of Iowa said:
Where such an agreement has been entered into, and also that judgment shall be entered by the court in which the action is pending, the only fair inference is that the parties intended that the action be continued for the filing of the award and the entry of judgment thereon. True, there was no order or reference, nor was there any entry of dismissal. For all that appeared of record in the case, it was pending up to the entry of the judgment on the award, and both parties so treated it until the final hearing.
Holding to the effect that where an agreement is entered by the parties to a pending suit directing that judgment may be entered pursuant to arbitration and award, neither the submission nor the award operates as a discontinuance of the suit. (Callanan v. Port Huron Ry. Co., 61 Mich. 15, 27 N. W. 718; Wilson v. Williams, 66 Barb. 209.)
In the case of Hearne v. Brown, 67 Me. 156, it was held that submission to arbitration would not be treated as a discontinuance of a pending suit where by necessary implication the case is to be retained on the docket until the arbitration is perfected by the award.
The courts generally have held that where a stipulation contains a provision by way of agreement that judgment may be entered on the award, it will be inferred that the parties to the agreement intended thereby to prevent a discontinuance. (Hearne v. Brown, supra; Wilkinson v. Prichard, supra; Monroe Bank v. Widner, 11 Paige, 529, 43 Am. Dec. 768; Wilson v. Williams, supra; Rogers v. Nall, 6 Humph. 29; McCarthy v. Swan, 145 Mass. 471, 14 N. E. 635.)
A mere unexecuted agreement to submit to arbitration, made during the pendency of a suit, has been held as in no wise operating against the further progress of
the pending litigation. (Wright v. Evans, 53 Ala. 108.) In a jurisdiction having a statute relating to arbitration, and in an instance where the parties entered into an agreement to arbitrate, which agreement did not conform to the statute, it was held that the agreement to arbitrate did not operate as a discontinuance, nor did it divest the court of jurisdiction. (Cox v. Giddings, 9 Tex. 44.)
To the same effect will be found the cases of Nettleton v. Gridley, 21 Conn. 531, 56 Am. Dec. 378, and Dinsmore v. Hanson, 48 N. H. 413. The reasoning in the case of Dinsmore v. Hanson, supra, is especially applicable to the question here presented under the circumstances of the case.
Commentators in viewing the question here dwelt upon have declared that the majority rule, that is, the rule supported by the majority of the decisions, is to the effect that a ground for the discontinuance of a pending suit is furnished by an agreement whereby the subject-matter of the action is submitted to arbitration. The rule in English courts, whatever it may have been under the very early practice, was reframed at a later date, and we find it expressed by a text-writer on the subject as follows:
It was formerly holden that a reference to arbitration was an implied stay of proceedings. But, in the beginning of Queen Anne's time, a rule was made that no reference whatsoever, of any cause depending in the King's Bench, should stay the proceedings, unless it was expressed in the rule of reference, to be agreed, and all proceedings in this court should be stayed; and it has been frequently decided that the agreement to refer all matters in difference to arbitration is not sufficient to oust the courts of law or equity of their jurisdiction. When a reference is pending, and it has been agreed that it shall operate as a stay of proceedings, it may be made the subject of an application to the court for staying the proceedings until an award be made. (Tidd on Practice of the Courts of King's Bench and Common Pleas, 821.)
As will be seen by reference to the ...