Gear v. Webster

258 Cal. App. 2d 57, 65 Cal. Rptr. 255, 1968 Cal. App. LEXIS 2388
CourtCalifornia Court of Appeal
DecidedJanuary 18, 1968
DocketCiv. 828
StatusPublished
Cited by18 cases

This text of 258 Cal. App. 2d 57 (Gear v. Webster) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gear v. Webster, 258 Cal. App. 2d 57, 65 Cal. Rptr. 255, 1968 Cal. App. LEXIS 2388 (Cal. Ct. App. 1968).

Opinion

STONE, J.

Appellant, a real estate salesman, and respondent broker, her employer, were members of the Bakersfield Board of Realtors, a voluntary association. Salesmen held associate, nonvoting memberships, while brokers were classified as active, voting members. Appellant agreed to abide by the “Realtor’s Code of Ethics” and the bylaws of the association, which at that time recommended that controversies between members be submitted for arbitration. Two years later the bylaws were amended to require members to “submit to arbitration by the Board’s facilities all disputes with any other member, if either party to the dispute should so request. ’ ’

Subsequently a dispute arose between appellant and respondent over a real estate commission. Appellant filed an action in the Kern County Superior Court to recover the share of commission she alleged to be due her out of a sale which was then in escrow. Respondent’s demurrer was sustained. Appellant amended her complaint and, again, respondent demurred. In his points and authorities in support of the demurrer, respondent for the first time asserted the requirement in the bylaws that disputes be arbitrated, alleging that on March 29 he requested that appellant submit the dispute to arbitration. The demurrer was quite properly overruled, as a request to arbitrate may not be raised in that manner. On April 21 respondent formally petitioned the court for an order to submit the dispute to arbitration.

Appellant filed objections to the petition, alleging that she had not entered into an arbitration agreement, that respondent had waived arbitration by appearing in the action by demurrer before he petitioned for arbitration, and that any board of arbitrators convened in accordance with the bylaws of the Bakersfield Board of Realtors, providing for two brokers and one salesman, would be prejudiced in favor of respondent, a past president of the board.

*60 . After a full hearing, the trial court ordered the dispute arbitrated in accordance with the rules of the Bakersfield Board of Realtors, and stayed further proceedings in the court action. Arbitration proceedings followed, resulting in an award that appellant take nothing. The superior court approved the award, and this appeal followed.

Both sides argue the merits of arbitration in general and those aspects peculiar to this case, but these questions are peripheral. The basic questions are contractual, first, whether a contract emanating from membership in a voluntary association can, in addition to its primary function of governing relations between the member and the association, also constitute a contract between the members; second, whether a member of such an association who has agreed to be bound by its bylaws is bound by amendments made thereafter.

Associations similar to the Bakersfield Board of Realtors, here involved, are not uncommon. In Lawson v. Hewell, 118 Cal. 613, 618-619 [50 P. 763, 49 L.R.A. 400], it is said: “Individuals who associate themselves in a voluntary fraternal organization may prescribe conditions upon which membership in the association may be acquired or upon which it may continue, and may also prescribe rules of conduct for themselves during their membership, with penalties for their violation, and the tribunal and mode in which the offenses shall be determined and the penalty enforced. These rules constitute their agreement, and unless they contravene some law of the land are regarded in the same light as the terms of any other contract.” (See also DeMille v. American Federation of Radio Artists, 31 Cal.2d 139, 146 [187 P.2d 769, 175 A.L.R. 382] ; American Society of Composers, Authors & Publishers v. Superior Court, 207 Cal.App.2d 676, 689 [24 Cal. Rptr. 772].)

In accepting membership, appellant as well as the other members signed the following declaration: “This is to advise that I have read the Realtors’ Code of Ethics and the By-Laws of the above named Board and if elected to membership I agree to adhere thereto. ’ ’

Clearly, then, appellant entered into a contract when she signed the bylaws, but there remains the question whether that pledge limited her obligations and duties to the association as such, or whether the contract also governed the relations between the members. The answer depends upon the intent of the members as expressed in the agreement embodied in the constitution and bylaws to which each member commit *61 ted himself. In discussing intent, Williston on Contracts, Third Edition, section 21, page 39, points out that: “It maybe guessed that where it is stated that an intent to create a legal relation is the test of a contract, the intent is frequently fictitiously assumed; and that a deliberate promise seriously made is enforced irrespective of the promisor’s views regarding his legal liability. The only intent of the parties to a contract Avhich is essential is an intent to say the words and do the acts which constitute their manifestations of assent.”

In Robinson v. Templar Lodge, I.O.O.F., 117 Cal. 370 [49 P. 170, 59 Am.St.Rep. 193], the court said, in construing bylaws of an association requiring arbitration, at page 375: “In an ordinary ease I should be loth to hold that one can effectually waive his right to sue in a court of law before his right of action has arisen, or that he can in advance agree to an arbitration, but it has been so held with reference to these mutual benefit societies, and, with reference to them, I think the regulation reasonable. ’ ’

It is interesting, and we think significant, that the reluctance of the court in Robinson to approve arbitration has given way to a presumption in favor of arbitration. In O’Malley v. Wilshire Oil Co., 59 Cal.2d 482, 490-491 [30 Cal.Rptr. 452, 381 P.2d 188], the court said: “Arbitration is, of course, a matter of contract, and the parties may freely delineate the area of its application. The court’s role, according to the Supreme Court, howeArer, must be strictly limited to a determination of whether the party resisting arbitration agreed to arbitrate. A heavy presumption weighs the scales in favor of arbitrability; an order directing arbitration should be granted ‘unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage. ’ ’ ’

We conclude that by agreeing to abide by the bylaAvs, appellant was bound to arbitrate her dispute with another member, here, respondent.

This leads us to appellant’s contention that she Avas bound by the bylaws as they existed when she signed them, not as they were later amended. However, at the time she signed them, the bylaws provided for amendment. At page 621 of Lawson v. Hewell, supra, 118 Cal. 613, the court said : “The contractual relation between the association and one of its members is that which exists by virtue of the rules of the association, and so long as the association acts toward him' in *62

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Bluebook (online)
258 Cal. App. 2d 57, 65 Cal. Rptr. 255, 1968 Cal. App. LEXIS 2388, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gear-v-webster-calctapp-1968.