Case ID: ad_123/html/0398-01.html
Source: Caselaw Access Project
Author: {"author": "Ingraham, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Frank Koewing, Appellant, v. Ernst Thalmann and Richard Limburger, Doing Business under the Firm Name and Style of Ladenburg, Thalmann & Co., Respondents.
    First Department,
    January 10, 1908.
    Pleading—when separate defense alleging prior arbitration insufficient.
    It is no defense to an taction brought to recover damages sustained by the negligence of the defendants in relation to an exchange of stock to allege that the plaintiff requested the defendants to submit to an arbitration as to the defendants’ liability on the claim set out in the complaint, which proposal the defendants accepted in writing, and the question was submitted to an arbitrator and decided by him in favor of the defendants. Such defense is defective in failing to allege a formal agreement to arbitrate, and the appointment'of an arbitrator either under the statute or as upon a common-law submission, and in failing to allege any formal decision binding upon the plaintiff.
    Appeal by the plaintiff, Frank Shewing, from an interlocutory judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of New York on the 1st day of November, 1907, upon the decision of the court,, rendered after a trial at the New York Special Term, overruling the plaintiff’s demurrer to the separate.defense set up in the answer.
    
      E. C. Crowley, for the appellant.
    
      J. Markham Marshall, for the respondents.
   Ingraham, J.:

The action is brought to recover the damages sustained by the plaintiff caused by the negligence of defendants'in relation to the exchange of stock of the National Salt Company, owned' by the plaintiff, for stock and bonds of the International. Salt Company. The answer, after denying certain allegations of the complaint, for a separate defense to the cause of action alleges that in the month of February, 1903, the plaintiff requested' the defendants to submit to arbitration the question as to defendants’ liability on account of the cause of action set out in the complaint; that the defendants accepted in writing the plaintiff’s suggestion, and in pursuance of said suggestion the question was submitted to Mr. Rudolph Keppler, president of the New York Stock Exchange, and decided by the arbitrator in favor of the defendants. To this separate defense the plaintiff demurred, which demurrer was overruled.

It seems to me that this defense is insufficient. There is no allegation of a formal agreement to Arbitrate or of the appointment of the arbitrator and his award. The allegation is that there was a request by the plaintiff to. submit to arbitration the question As to-the defendants’ liability on account of the cause of action set up in the complaint; that defendants accepted in writing the plaintiff’s suggestion ; that in pursuance of said suggestion the question was in fact submitted to Mr. Rudolph Keppler, president of the New York Stock Exchange, and decided by said arbitrator in favor of the defendants. There was here no allegation of an actual agreement to arbitrate; no allegation that Mr. Rudolph Keppler was appointed by the parties either under the statute or as upon a common-law submission as their arbitrator, or that the plaintiff appeared before Mr. Keppler or took part in the determination of the question, no allegation of anything having been submitted bpt “ the cause of action set out in the complaint,” and no allegation of any formal decision that would bind the plaintiff by the arbitration. It seems to me that this is entirely insufficient. (Gihon v. Levy, 2 Duer, 180, 181.)

The judgment must be reversed, with costs, and the demurrer sustained, with costs, with leave to the defendants to amend the separate defense in their answer within twenty days on payment of costs in this court and in the court below.

Pattekson, P. J., Lattohlin, Clabke and Scott, JJ., concurred.

Judgment reversed, with costs, and demurrer sustained, with costs, with leave to defendants to amend on payment of costs. 
      
      See Code Civ. Proc. § 2365 et seq — [Rep.