Court Opinion

ID: 5384656
Source: CourtListenerOpinion
Date Created: 2022-01-08 09:19:01.803419+00
Date Added: 2024-06-11T08:30:12.539406
License: Public Domain

Cohn, J.
(dissenting). The trial court was correct in directing a verdict for respondent. There was no issue for submission to the jury. The only question was whether the sales note prepared by Scheuer & Company purporting to act as broker for the parties constituted a contract between petitioner and respondent. As the trial judge pointed out, the proof is uncontradicted that respondent did not authorize in advance of his relations with the sales broker the inclusion of the clause which was rubber-stamped on the sales note calling for a submission to arbitration of any controversy thereafter arising. Hoffman, the representative of the sales broker who conducted the negotiations with respondent, testified without qualification that nothing was said to him about any arbitration clause and that he had no conversation with respondent on the subject of arbitration.
The court will not direct a party to proceed to arbitration unless he has explicitly agreed to do so in writing. While it is settled that bought and sold notes issued by a sales broker containing a clause for arbitration of future disputes when acted upon by both parties constitute a binding contract of arbitration of subsequent controversies (Matter of Huxley, 294 N. Y. 146; Matter of Catz American Sales Corp. [Holleb & Co.], 272 App. Div. 689, 692), here there is no proof of an acceptance by respondent. The proof is to the direct contrary. Moreover, this was the first transaction that respondent had with petitioner and the first transaction that respondent ever had with the sales broker.
The court was entirely right in ordering stricken from the record any testimony relating to an alleged custom in the textile industry which would authorize a sales agent without authority of his principal to insert in a sales note a clause calling for arbitration. Mere proof of a custom or practice to include a provision for arbitration in sales notes will not deprive a party of his constitutional right to seek redress in the courts unless he has explicitly agreed to bargain away this right. (Matter of General Silk Importing Co., Inc., 200 App. Div. 786, affd. 234 N. Y. 513; see, also, Grombach Productions, Inc., v. Waring, 293 N. Y. 609, 615-616.)
*595Apparently appellant seeks to have the order appealed from reversed on the theory that respondent ratified and approved the arbitration clause contained in the sales note. Upon the evidence it is clearly established that there was no ratification or approval. The record shows that the sales note had attached to it a slip which contained space for the signature of respondent and the following notation: ‘ ‘ Please sign and return immediately to Scheuer & Company. ’ ’ This informed respondent that his signature was necessary for the consummation of the sale. Concededly respondent never signed or returned the slip to Scheuer & Company. The wording of the slip was specific notice that mere inaction on respondent’s part could not result in approval. This conclusion is fortified by the testimony of Hoffman that six days after the sales note had been mailed out he telephoned respondent and inquired as to why the pink slip had not been signed and sent back. Respondent replied that it did not contain a conditional delivery clause. The law is clear that there must be actual acceptance of such a contract as here involved or there is no contract. (Matter of Tanenbaum Textile Co. v. Schlanger, 287 N. Y. 400.)
As there was no issue of fact for the jury to pass upon, the court properly directed it to answer the question submitted in the negative. Accordingly, I dissent and vote to affirm.
Dore, J. P., Callahan and Shientag, JJ., concur with Van Voorhis, J.; Cohn, J., dissents with opinion.
Order reversed and a new trial granted, with costs to the appellant to abide the event. Settle order on notice.