Court Opinion

ID: 5702376
Source: CourtListenerOpinion
Date Created: 2022-01-12 15:42:25.253333+00
Date Added: 2024-06-11T08:40:21.718085
License: Public Domain

Valente, J. (dissenting).
The majority of the court today upholds an arbitration award which directs specific performance of a contract for personal services by requiring the reinstatement of petitioner-respondent for seven years in a key executive position in a publicly held New Jersey corporation. In so doing, the court departs from well-established limits on equity decrees. We dissent because neither controlling authority nor the dictates of public policy support the ruling made. The decision represents a capitulation of the powers of a court of equity to the unregulated discretion of a board of arbitration.
The matter before us poses an important question of policy which transcends the rights of the particular litigants. While it has been said that “ Provisions of law applicable to judicial actions and proceedings do not necessarily apply to arbitrators ” (Matter of Penco Fabrics [Louis Bogopulsky, Inc.], 1 A D 2d 659); that when parties submit their controversies to arbitration, the determination of the arbitrators is final and conclusive (Matter of Wilkins, 169 N. Y. 494, 496); and that *572awards may not be modified on grounds other than those enumerated in section 1462-a of the Civil Practice Act (Matter of Congregation Talmud Torah of Flatbush [Feinstem], 283 App. Div. 892), we believe that the Supreme Court, with its general equitable jurisdiction does not act as a mere ministerial adjunct to the arbitration tribunal, stripped of all discretion. Thus, in Matter of Publishers’ Assn. (Newspaper Union) (280 App. Div. 500) we refused to enforce an award of punitive damages though the parties had expressly authorized it.
Specifically, the problem here is whether a court must, on an application to confirm an arbitration award, enter a decree of specific performance of a contract for personal services where the court could not do so were an action brought on the contract. In our opinion, the statutory machinery for the enforcement of arbitration awards contemplates the exercise of a judicial function and not a ministerial one. No judgment should issue from the court which contravenes deeply ingrained principles and rules of equity jurisprudence regarding the specific performance of contracts for personal service.
It has long been settled that a court of equity will not decree specific enforcement of contracts for personal services. (5 Corbin, Contracts, § 1204, p. 849; 28 Am. Jur., Injunctions, § 93, p. 285; Miller v. Warner, 42 App. Div. 208, 210.) That power, which courts have eschewed for two centuries, cannot be lightly given to arbitrators. The same conditions which have circumscribed the discretion of the Chancery to award specific performance in such instances must be applied to arbitration awards.
The established rule as to denial of specific performance of personal services contracts rested upon the difficulty of enforcing such decrees, the fact that the relationship in such contracts was a close personal one involving confidence and loyalty, and the refusal to decree any sort of involuntary servitude. The court in Boyer v. Western Union Tel. Co. (124 F. 246, 249) summed it up appropriately when it said: “ It would be intolerable if a man could be compelled by a court of equity to serve another against his will, or if a man could be compelled to retain in his employ one he does not want; courts of equity exercise no such power and grant no such relief. ’’
Specific performance to enforce arbitration awards is granted on the same principles that apply to enforcement of contracts. (Pomeroy, Specific Performance of Contracts [3d ed.], § 21; 4 Pomeroy, Equity Jurisprudence [5th ed.], § 1402, p. 1037 ; 81 C. J. S., Specific Performance, § 73; Sturges, Commercial Arbitrations and Awards [1930], § 303; Russell, Arbitration & *573Award [13th ed.], p. 253, 461.) In Matter of Publishers’ Assn. (Newspaper Union) (280 App. Div. 500, 507, supra) this court said: ‘‘The court will not lend its power to the enforcement of the kind of a decision in arbitration which it would neither allow nor enforce as the subject of an action maintained before it directly.”
And in Finsilver, Still & Moss v. Goldberg, Maas & Co. (253 N. Y. 382, 392) Cardozo, Ch. J., said: “ The motion to confirm is equivalent to a suit in equity to carry into effect the terms of the agreement and the arbitration had thereunder.”
Proceedings involving arbitrations have always been considered as equitable in character “ and the practice of equity as to relief should be followed.” (Matter of Feuer Transp. [Local No. 445], 295 N. Y. 87, 92.)
See, also, Matter of Lipschutz (Gutwirth) (304 N. Y. 58, 63); Reconstruction Finance Corp. v. Harrisons & Crosfield (204 F. 2d 366, 369-370 [2d Cir.], cert, denied 346 U. S. 854); Matter of Pocketbook Workers Union (14 Misc 2d 268, 270) where the court Said: “it is the court that fashions the decree based on the determination of the arbitrator. (Matter of Albert, 160 Misc. 237.) And equity will not ‘render a decree which shocks good conscience or is otherwise offensive to equity.’ (Matter of Young [Deschler], 202 Misc. 811, 813.) ”
While there is no express command in the statutes (Civ. Prac. Act, art. 84) that “ the granting of the remedy of specific performance rests in the broad discretion of the court ” (Matter of Lipschutz [Gutwirth], p. 63, supra), this limiting principle inheres in the judicial function exercised in the enforcement or vacatur of arbitration awards. It is for the courts to determine whether a judgment of confirmation, adding the force and prestige of the State behind the arbitral decision, will contravene well-established equitable principles and public policy. (See discussion in Statutory Arbitration Post-Award Motions — F. E. Jones, Jr., 46 Cal. L. Rev. 411-437 [1958].) The abdication of the court’s equitable powers was neither necessary nor proper in the instant ease, since—as Special Term recognized—if this were a suit rather than an arbitration proceeding, a court would not grant specific performance.
However, the court in this case — where damages would be a sufficient and proper remedy — approves a decree directing that a corporation continue to employ in a key management position, for an additional seven years, a man found unsuitable by the board of directors, and whose judgment and policies must either harmonize with the board or ruin the corporation.
*574In sustaining the instant award, the majority relies on certain decisions in which it is claimed this court upheld awards directing the reinstatement or retention of employees.
Matter of Freydberg Bros. v. Corey (177 Misc. 560, affd. 263 App. Div. 805, reargument denied 263 App. Div. 858) is not apposite or controlling. Primarily, the case involved an application to stay an arbitration and not a motion to confirm an award. The language regarding an equitable decree appeared in the opinion of the Special Term Justice. Our affirmance, without opinion, was solely a holding that the arbitration should proceed.* We did not, and could not, then pass upon the prospective award. The question of possible relief was therefore essentially academic and premature; there was no occasion to consider fully the problems of policy and judicial administration presented by an award which granted specific performance.
The other cases relied on — Flatter of Ruppert (Egelhofer) (3 N Y 2d 576); Flatter of Devery (Daniels & Kennedy) (266 App. Div. 213, affd. 292 N. Y. 596); Goldman v. Cohen (222 App. Div. 631) and Matter of United Culinary Bar & Grill Employees (299 N. Y. 577)—have one distinctive feature, which not only explains the granting of equitable relief in those instances, but marks the significant difference in the instant case. Those cases all involved collective bargaining agreements.
Voluntary collective bargaining agreements, including awards made pursuant to their arbitration provisions, have been held to be specifically enforcible by a court of equity. (Schlesinger v. Quinto, 201 App. Div. 487; Goldman v. Cohen, supra; Ribner v. Rasco Butter & Egg Co., 135 Misc. 616; Farulla v. Ralph A. Freundlich, Inc., 152 Misc. 761.) That is the rule in New York and other jurisdictions. (See Ann. 156 A. L. R., Collective Bargaining-Remedies 652, 662-678.) In fact, section 1448 of the Civil Practice Act was amended in 1940 to make it clear that labor organizations and employers could by collective agreements make contracts to arbitrate, which would be “ valid, enforcible and irrevocable ’’.
Since a court of equity will specifically enforce a collective bargaining agreement, consistently it will similarly enforce an award made in an arbitration conducted under such an agreement. But the reasons which impelled the courts to grant the *575remedies of specific performance and injunction in collective bargaining agreements (discussed fully in Schlesinger v. Quinto, supra, and Goldman v. Cohen, supra) do not apply to an individual employment contract like the one here in question. An order for the reinstatement of a manager is subject to all the obstacles and objections equity has always recognized, and is not justified by the special considerations which make such a decree suitable and enforcible in the area to which collective bargaining applies.
In this case petitioner was employed as manager in charge of production and engineering. It is undisputed that this was a top managerial position at the highest level of policy and operations. The board of directors of the corporation found that petitioner was permanently disabled and that for a period of one year had been unable to attend substantially to his duties. The arbitrators; by a divided vote, found petitioner was able to attend to his duties and the affairs of the company, rejected the contrary determination of the directors as an abuse of discretion, and ordered petitioner’s reinstatement. There can be no question that a court of equity would not compel specific enforcement of the contract. We should not do so by confirmation of an arbitration award.
We would therefore vacate the award and remit the matter to the arbitrators to assess any damages that have been sustained by virtue of the alleged breach of the contract.
Breitel, J. P., and Rabin, J., concur with Stevens, J.; Valente, J., dissents in opinion in which M. M. Frank, J., concurs.
Judgment and order affirmed, with costs to the respondent.

 When a case is affirmed without opinion it does not mean that the Appellate Division approved the opinion of Special Term. (Soderman v. Stone Bar Associates, 208 Misc. 864, 867, affd. 3 A D 2d 680, motion for leave to appeal denied 3 A D 2d 755; Commissioner of Welfare of City of N. Y. v. Jackson, 265 N. Y. 440, 441; E. T. C. Corp. v. Title Guar. & Trust Co., 246 App. Div. 226, 228, revd. 271 N. Y. 124, reargument denied 271 N. Y. 659.)