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Gates v. Arizona Brewing Company

Supreme Court of Arizona

October 30, 1939

JACK GATES, Appellant,
ARIZONA BREWING COMPANY, a Corporation, Appellee

APPEAL from a judgment of the Superior Court of the County of Maricopa. Howard C. Speakman, Judge. Judgment reversed and cause remanded with instructions.

Mr. Austin O'Brien, for Appellant.

Mr. I. A. Jennings and Mr. Henry S. Stevens, for Appellee.


Page 50

[54 Ariz. 267] LOCKWOOD, J.

Jack Gates, hereinafter called plaintiff, brought suit against Arizona Brewing Company, a corporation, hereinafter called defendant, to recover wages which he alleged were due for work [54 Ariz. 268] performed by him for defendant under a certain contract. The case was tried to a jury, which failed to agree on a verdict, and was finally retried to the court sitting without a jury.

Upon plaintiff offering to introduce evidence in support of his complaint, defendant objected on the ground that the complaint did not state a cause of action, the contention being that the contract sued on provided that before an action could be brought for breach thereof, the matter must be first arbitrated, and since the complaint did not allege that any arbitration or attempt at arbitration had been made, it failed to state a cause of action. The court stated it would sustain defendant's objection and grant the plaintiff leave to amend his complaint, whereupon, plaintiff electing to stand upon his pleadings, judgment was entered dismissing the complaint, and the matter was, after various procedural formalities to which we need not refer, brought before us on this appeal.

The contract, which is the basis of the action, was entered into between the defendant and Local No. 338 of the International Union of United Brewery, Flour, Cereal and Soft Drink Workers of America, hereinafter called the union, of which plaintiff was a member. The contract contained fourteen sections and regulated very minutely who should be employed by the defendant in its business, the conditions of employment and discharge, and the wages to be paid. Section 13 read as follows:

"An attempt shall be made between the employer and local union to first settle all differences or misunderstandings which may arise. If any adjustment satisfactory to both parties cannot be reached in this way, then the matter shall be settled by a Board of Arbitration, constituted in the following manner: Two shall be selected by the employer and two by the local union; in case they cannot agree, these four members of the board shall select a fifth member, and a [54 Ariz. 269] majority decision shall then be binding upon both parties. Men shall not leave work before or pending the decision of the Board of Arbitrations."

According to the allegations of the complaint, plaintiff performed service for defendant under such contract for which there was due and unpaid him, in accordance with the wages fixed thereby, the sum of $353.49. There is no allegation in the complaint that there was ever any attempt made by plaintiff to submit the difference between him and defendant to arbitration, as provided by section 13, supra.

It was the position of defendant, which was sustained by the trial court, that section 13, supra, was a legitimate and valid part of the contract, and that arbitration, or an attempt at arbitration, was a condition precedent to plaintiff's attempt to recover in court on his claim of wages, and that even if section 13 was invalid as contrary to public policy, the remaining part of the contract contained no obligations whatever on the part of the union, and was therefore void for lack of mutuality.

It is the contention of plaintiff that section 13, supra, is void as contrary to public policy under the common law, and is in violation of the Arizona arbitration statutes, and that the remaining clauses of the contract are valid because there are ample mutual covenants entered into by both parties to the contract. We consider first the validity of section 13, supra.

Broadly speaking, arbitration is a contractual proceeding, whereby the parties to any controversy or dispute, in order to obtain an inexpensive and speedy final disposition of the matter involved, select judges of their own choice and by consent submit their controversy to such judges for determination, in the place of the tribunals provided by the ordinary processes of law. 6 C.J.S., Arbitration and Award, page 152, section 1. There are two kinds of arbitration, one [54 Ariz. 270] under the common law and the other by virtue of express statutes. Under the common law, the overwhelming weight of authority holds that an agreement that all disputes and contentions which may arise between the parties under a ...

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