Appeal from order of Court of Common Pleas, Trial Division, of Philadelphia, Sept. T., 1969, No. 468, in case of P. Agnes, Inc., a Pennsylvania Corporation v. Philadelphia Police Home Association, a Pennsylvania Nonprofit Corporation.
Samuel J. Marks, with him Marks & Marks, for appellant.
H. P. Abramson, with him Herbert Fineman, Irvin B. Fineman, and Fineman & Fineman, for appellee.
Bell, C. J., Cohen, Eagen, O'Brien, Roberts and Pomeroy, JJ. Opinion by Mr. Justice Eagen. Mr. Justice Cohen dissents. Mr. Justice Jones took no part in the consideration or decision of this case.
P. Agnes, Inc. (Agnes) entered into a written contract to construct a building for the Philadelphia Police Home Association (Association). Therein the
parties agreed that all disputes and claims arising out of the contract would be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association and that the award would be final.
After the building was completed, a dispute arose between the parties as to whether or not certain defects existed. Association withheld final payment, and Agnes instituted this action in assumpsit to recover the balance due.
On the day following the institution of the action, counsel for Association wrote the American Arbitration Association a letter calling its attention to the contract, the existing dispute, and the commencement of the assumpsit action for damages. While the letter included a demand for arbitration, it concluded with the following paragraph: "I have just learned that yesterday, September 3, 1969, P. Agnes, Inc., the contractor filed a suit in the Common Pleas Court, September Term, 1969, No. 468 on a claim for payment under the contract which claim is disputed by my client. In view of the above suit, I assume that the whole matter including my client's claim set forth above will be adjudicated in that suit. Therefore, consider this arbitration notice as filed only for the purpose of preserving the rights and remedies of my client."
Subsequently, Association filed an answer and counterclaim to the complaint in the assumpsit action, and Agnes filed a reply. No mention of arbitration was made in the pleadings.
Subsequently, the American Arbitration Association notified the parties that it would proceed with arbitration. Association then filed a petition with the court to stay arbitration and compel determination of the dispute in the pending assumpsit action. This petition was granted, and an order ...