Court Opinion

ID: 5713740
Source: CourtListenerOpinion
Date Created: 2022-01-12 15:57:44.928235+00
Date Added: 2024-06-11T08:40:34.808790
License: Public Domain

M. M. Frank, J.
(dissenting). I must dissent and vote to affirm upon the carefully reasoned opinions of Mr. Justice Matthew M. Levy at Special Term. (21 Mise 2d 438.) It is evident from the record that Lillian Wasserman, petitioner-respondent-plaintiff:, does not claim fraud or fraud in the inducement. Nor does' she seek rescission of the contract under which she purchased stock and made payment. I am reluctant to believe that parties to a contract that contains an arbitration clause may not subsequently compose their differences with finality, but must always thereafter be subject to a demand for arbitration. Moreover, nothing in the record indicates that the parties intended that the arbitration clause was to survive the closing.
This is not a case of a stranger seeking to purchase the stock of a corporation. For a long period prior to the closing of the transaction, Miss Wasserman had been an officer and director of the company, and, according to her sworn statement, had been running the business since 1951. There is no dispute that for at least a year preceding the death of the majority stockholder and up to the time she purchased his stock, she was in sole charge and in complete control of all company operations. No one was in a better position to know whether a substantial account receivable was uncollectible. There is no merit to her claim that the audit of the certified accountants, to which she made no objection and which she accepted as binding and conclusive, was incorrect.
Under the circumstances, there is no bona fide dispute which survived the closing.
McNally, Stevens and Bastow, JJ., concur with Rabin, J. P.; M. M. Frank, J.,- dissents and votes to affirm in opinion.
Order reversed and the motion to stay arbitration denied and the cross motion to direct arbitration granted on the law and on the facts and the cross motion to dismiss the complaint denied on the law and the motion for a temporary injunction granted on the law and on the facts and in the exercise of discretion, with costs to the appellant. Settle order with suggestions as to what restraints or conditions, if any, should be imposed in connection with the temporary injunction.