Appeal from order of Court of Common Pleas of Lehigh County, April T., 1962, No. 17, in case of Emmaus Municipal Authority v. Walter M. Eltz and Massachusetts Bonding and Insurance Company, now by merger The Hanover Insurance Company.
Harry A. Dower, with him Eugene J. Gorman, Edward N. Cahn, and Dower, Kanehann, Huston, McDonald & Cahn, and Morgan, Lewis & Bockius, for appellants.
Theodore R. Gardner, with him Edward H. McGee, for municipal authority, appellee.
Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice O'Brien. Mr. Chief Justice Bell concurs in the result.
The plaintiff-appellee filed a complaint in assumpsit in which it alleged that the defendant had breached the terms of two contracts. The defendants then filed, on the plaintiff, a rule to show cause why the complaint should not be dismissed.*fn1 The petition for the rule alleged that the contracts signed by the parties provided for arbitration; hence the action in assumpsit was premature and not in keeping with the Arbitration Act of
. The court below, after a hearing, discharged the rule and this appeal followed.
The key question to be determined by this appeal is whether or not the contracts provided for arbitration in a case such as this.
The facts as set forth in the complaint allege a breach of the contracts in that the defendant, Eltz, had failed to perform under the terms of the contract and that, pursuant to the contract, the authority notified the contractor, Eltz, that the Authority would complete the construction.
We have examined the record in full and nowhere in the contracts is it clearly stated what is to be arbitrated. The contract provided for the arbitration procedure and the methods to be used in selecting the arbitrators; however, the contract is silent on what types of claims are subject to this procedure. The appellants state that all claims are to be arbitrated, while the appellee claims that only technical matters which arise during the life of the contract are subject to arbitration.
Our determination in this matter is governed by two basic propositions: (1) that arbitration agreements are to be strictly construed and that such agreements should not be extended by implication: Jacob v. Weisser, 207 Pa. 484, 56 A. 1065 (1904); Scholler Bros., Inc. v. Hagen Corp., 158 Pa. Superior Ct. 170, 44 A.2d 321 (1945); McDevitt v. McDevitt, 365 Pa. 18, 73 A.2d 394 (1950), and (2) that when the parties agree to arbitration in a clear and unmistakable manner, then every reasonable effort will be made to favor such agreements. Capecci v. Capecci, Inc., 11 Pa. D. & C. 2d 459 (1957), affirmed per curiam 392 Pa. 32, 139 A.2d 563 (1958).
On March 13, 1961, pursuant to Section B3:09 of the construction contracts, the Authority, by resolution, terminated the ...