Goldmann Trust v. Goldmann

131 N.W.2d 902, 26 Wis. 2d 141, 1965 Wisc. LEXIS 965
CourtWisconsin Supreme Court
DecidedJanuary 5, 1965
StatusPublished
Cited by22 cases

This text of 131 N.W.2d 902 (Goldmann Trust v. Goldmann) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Goldmann Trust v. Goldmann, 131 N.W.2d 902, 26 Wis. 2d 141, 1965 Wisc. LEXIS 965 (Wis. 1965).

Opinions

Wilkie, J.

The only issue involved on this appeal is whether the disagreement concerning termination of employment of a permanent employee is a question or dispute between the parties which is subject to arbitration under paragraph 15 of the partnership agreement.

Appellant contends that since withholding written consent to a permanent employee’s discharge is an absolute right or privilege of each party, there is no dispute calling for arbitration. Respondents on the other hand urge that once [146]*146mutuál written consent cannot be obtained, a dispute arises that is subject to the arbitration procedure contained in the agreement. In essence respondents contend that every disagreement arising out of any phase of the operation of the business constitutes a dispute which at the request of either is to be arbitrated; appellant, on the other hand, maintains that this is one of the few specific decisions that requires written mutual consent of both parties and that, in such a situation, there is no machinery for resolving a disagreement where either party refuses to give that consent.

The entire controversy presents a question of law involving the proper construction of the very comprehensive and carefully drafted partnership agreement.

A mere disagreement in interpreting the partnership agreement itself is not tantamount to saying that an arbitra-ble dispute is present. A controversy must arise over matters within the scope of the arbitration clause, or no reason exists for arbitration.1 In ascertaining whether or not a dispute exists, the agreement must be considered as a whole and all parts harmonized as far as possible.2 Effort must be made to carry out the intent of the parties.3

The general mandate of the agreement under paragraph 8 states that the partnership “shall be mutually controlled . . . and all matters involving action of any kind, or inaction of any kind, and all policies or decisions of the firm shall be decided only by mutual consent in fact of the parties hereto or their . . . designated representatives, . . .” The very same paragraph provides that this mutual consent must be in writing as to several designated areas of action or inaction. Thus, the agreement provides: “Neither party hereto', nor their designated representatives, shall have power or [147]*147authority to bind the firm in any contract, lease, insurance policy, promissory note, or to incur any expense, or hire or fire permanent employees, or those under contract under valid agreement for a definite period, without mutual consent in fact in writing . . .

Paragraph 5 requires written consent of the other partner before any advance is made by a partner to the partnership and before any interest is paid thereon; paragraph 9 requires written consent on every purchase order. Paragraph 20 requires mutual written consent in seven other specific areas of decision and, as pertinent here, repeats the requirement of paragraph 8 that neither partner shall dismiss a permanent employee without the written consent of the other.-

In construing this partnership agreement it must be assumed that these requirements of mutual written consent for the firing of a permanent employee were inserted for a purpose.4 A construction of the agreement which gives reasonable meaning to all provisions is preferable to one which leaves part of the language useless or inexplicable or creates surplusage.5

If every dispute concerning any partnership matter is already subject to arbitration, there would have been no reason for including the written-consent language. That the partners actually intended that certain types of decisions could be made only by written mutual consent, while anticipating arbitration where there was disagreement about other decisions affecting the partnership business, gives effect to both the mutual written-consent and arbitration provisions of the contract. In addition to intending that cer[148]*148tain decisions could only be made by the mutual written consent of the partners, the only other reason for the written-consent provision would be to assure that a permanent record is kept of important decisions. This would be unnecessary inasmuch as paragraph 8 already requires that the “decisions mutually arrived at ... by the partners . . . shall be written in the form of minutes. . . .”

Another important rule employed in construing agreements is that where there is an apparent conflict between a general and a specific provision, the latter controls.6 Specifically requiring written mutual consent in the matters of hiring and firing permanent employees when such situations would seemingly be adequately covered by an all-inclusive mutual-consent provision (not in writing) evinces an intent to deal with these matters differently. This is especially true where identical requirements are inserted in two different spots in the agreement. The particular provisions insisting upon written mutual consent should control over the general requirement of mutual consent.

Although paragraph 15 commences with sweeping language calling for arbitration of “all disputes and questions whatsoever,” several particular situations follow before the scope again broadens to include “any other matter in any way relating to . . . the rights, duties and liabilities of any person hereunder, . . .” The elaboration of specifics tends to dilute the effect of the all-encompassing language. Had the partners intended to arbitrate every conceivable dispute, the sweeping language would have been sufficient. Particularizing casts doubt as to what situations are to be covered. It is significant that although some instances are specially singled out to be arbitrated, no specific reference [149]*149is made to the hiring or firing of permanent employees as is done in paragraphs 8 and 20. This could reasonably be construed to mean that hirings and firings are not be to arbitrated. The trial court relied on the “rights ... of any person hereunder” language in finding that there was an arbitrable dispute. A close examination of the partnership agreement discloses, however, that allusions to parties or persons were made only in reference to the partners and not in connection with others. Thus this language does not dictate, as the trial court felt, that the rights of a nonpartner-permanent employee be submitted to arbitration.

Paragraph 10 defines what is meant by a family member and further provides:

“. . . in event the compensation from the firm for family employees cannot be agreed upon it shall be determined by arbitration as hereinafter provided for in reference to any disputes and differences arising in the conduct of the business of the firm.”

This language, limiting the arbitration provision solely to the issue of compensation, implies that arbitration is not available in other employment situations. At least the language demonstrates that the drafters of the partnership agreement did not consider the general arbitration provision (paragraph 15) as all-inclusive as the respondents maintain.

Paragraphs 8 and 20 clearly call for written consent in order to discharge a permanent employee.

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Goldmann Trust v. Goldmann
131 N.W.2d 902 (Wisconsin Supreme Court, 1965)

Cite This Page — Counsel Stack

Bluebook (online)
131 N.W.2d 902, 26 Wis. 2d 141, 1965 Wisc. LEXIS 965, Counsel Stack Legal Research, https://law.counselstack.com/opinion/goldmann-trust-v-goldmann-wis-1965.