Court Opinion

ID: 9663569
Source: CourtListenerOpinion
Date Created: 2023-08-23 23:43:01.86559+00
Date Added: 2024-06-11T18:14:52.044908
License: Public Domain

Smith, J.
{dissenting). The issue before us involves the full faith and credit clause of the United States Constitution. Appellant had judgment, confirming an arbitrator’s award, in the supreme court of the State of New York. Coming to Michigan to enforce his New York judgment the plaintiff filed an exemplified copy of the records and files of the New York court,1 and, after issue joined, moved for sum*185mary judgment. In reply defendant2 submitted an affidavit of merits stating merely that he had a meritorious defense to the action and that he “was never served with any legal notice of any suit pending in the supreme court of the State of New York, nor was he within the jurisdiction of the State of New York.” In common pleas court (where the action was commenced) the motion for summary judgment was denied and, upon appeal taken, such denial was confirmed, the opinion filed in the circuit stating these grounds for so ruling:
“The court has checked all the cases which counsel has given the court. The files definitely show that all of the letters which were sent certified mail to these 2 defendants in Detroit, were returned to the sender, the plaintiff in these cases, marked ‘Return to Writer —Unclaimed’.
“Obviously, these defendants had no notice whatsoever of any action pending in the court in New York.
“The court might go along with the law as presented by plaintiff in the fact that it might obtain a judgment on a consent contract such as was entered into in this case. However, the court definitely believes that the defendants must have some knowledge of any lawsuit which is pending. If plaintiff did not have the correct addresses of defendants it should have ascertained them. Prom the files, apparently the defendants never had any personal knowledge of any action pending in New York and to sue on a judgment here which would be binding is not giving the defendants a fair hearing.”
A general appeal to this court was taken, “pursuant to PA 1953, No 4, as amended (CLS 1956, § 650.1 [Stat Ann 1959 Cum Supp § 27.2591]), and other applicable laws and statutes of the State of Michi*186gan in such cases made and provided.” The claim of appeal continues “that the effect of the order appealed from is to deny full faith and credit to a judgment of the supreme court of the State of New York upon which plaintiff’s cause of action is based.”
The question presented is one of first impression in this jurisdiction. We need not, at this stage in the development of the arbitration process, elaborate upon its importance, or upon its beneficial aspects. There is no doubt that the early arbitration cases were heard by the courts in an alien and hostile atmosphere. Much of the criticism was grounded upon the feeling that arbitration was an attempt to “oust” the courts of their jurisdiction,8 although less worthy motives have been both ascribed and denied.3
4 The early attitude, however, has been altered. The courts less commonly face, nowadays, a policy argument against arbitration or its enforcement. Moreover, the cases are now heard in a more benign atmosphere, reflected in the rulings of the court. As phrased by Mr. Justice Cardozo with his usual felicity, “One who has become a party to a contract for the arbitration of future differences must live up to his engagement according to its spirit. He will not be permitted to wrest it from its purpose and turn it into a shallow form by taking refuge in a disingenuous silence or in subtle and adroit evasions.”5 Partly accountable for such change of attitude is the pressure of the modern docket. Legislation, also, has had its influence,6 particularly that of the State *187of New York, with, which we are here concerned. Its statute, enacted in 1920, was the first of the American statutes7 seeking to make arbitration really effective. With only a portion of its liberalizing aspects are we here concerned. It is provided by New York law (by which the parties agreed to be governed) that the making of a contract “providing for arbitration in this State, shall be deemed a consent of the parties thereto to the jurisdiction of the supreme court of this State to enforce such contract or submission and to enter judgment on an award thereon.”8 Also, it is provided that service “shall be made in the manner specified in the contract,”9 which, in this case, is, among other ways, “by mail addressed to such party * * * at his last known address.” Finally, it is provided that judgment entered upon an award shall have the same force and effect as any other judgment rendered .in the supreme court of the State of New York.10
We have set all of this forth in some detail because the objection of the defendant to jurisdiction goes to *188jurisdiction over the person. The complaint made is not that defendant got no notice of what was going on, but that he got no “legal” notice.
Upon the matter of notice the record discloses as follows: First, as to defendant Trecot, New York counsel mailed notices (demands for arbitration) to Frank P. Trecot at his last known address, 1453 Iroquois avenue, Detroit 14, Michigan, on October 14,1958, and November 6,1958. Such envelopes are on exhibit before us. They were sent by certified mail, return receipt requested, but were returned to the sender marked “unclaimed.” A similar demand was sent to this defendant in care of the Weld wire Company at 3341 Puritan, Detroit, Michigan, also returned to the sender “unclaimed.” However, a notice sent to this same defendant by ordinary first class mail, the envelope containing counsel’s return address, was never returned to the sender.
As to defendant Hilton M. Grier, Jr., a demand for arbitration was sent by certified mail, return receipt requested, to his last known address at 15094 Piedmont, Detroit 23, Michigan. The return receipt in this case was signed by Norma L. Grier, indicating that she received the letter on October 16,1958.
After the arbitration hearing the defendants were notified by the American Arbitration Association of their opportunity to submit additional evidence to the arbitrator, following which Mr. Grier did request that another hearing be scheduled. This, however, he did not attend. Defendant Trecot neither requested another hearing nor did he submit written evidence, but the letter addressed to him and sent by regular mail, was not returned to the sender.
Following the taking of testimony and arguments the arbitrator granted plaintiff an award against Trecot in the amount of $908.20 and against Grier in the amount of $749.60. Following the receipt of these awards plaintiff moved to confirm in each case *189and notified the defendants by mail, which mail was not returned, nor was the notice of settlement of the supreme court of New York, which was filed in each case and was similarly served by mail.
It is upon these facts that the defendants assert that they were “never served with any legal notice of any suit pending in the supreme court of the State of New York.” And it is upon these facts that the circuit court found that “these defendants had no notice whatsoever of any action pending in the court in New York.” The court continues, “the court definitely believes that the defendants must have some knowledge of any lawsuit which is pending. If plaintiff did not have the correct addresses of defendants it should have ascertained them. From the files, apparently the defendants never had any personal knowledge of any action pending in New York and to sue on a judgment here which would be binding is not giving the defendants a fair hearing.”
There is no doubt that it is within the competence of business men to contract as they may see fit respecting the service of notices upon them. The matter was well put in a leading New York case involving consent to personal jurisdiction in arbitration proceedings:11
“Contracts made by mature men who are not wards of the court should, in the absence of potent objection, be enforced. Pretexts to evade them should not be sought. Few arguments can exist based on reason or justice or common morality which can be invoked for the interference with the compulsory performance of agreements which have been freely made. Courts should endeavor to keep the law at a grade at least as high as the standards of ordinary ethics. Unless individuals run foul of constitutions, statutes, decisions, or the rules of public morality, why should *190they not be allowed to contract as they please ¶ Our government is not so paternalistic as to prevent them.”
' The case, then, comes to this: The parties before us agreed, under statutory sanction, that notices might be served upon them in the same manner as most people employ in conducting their daily affairs, namely, by regular mail. In so doing the parties took upon themselves, as they were free to do, the remote chance of a letter’s misdelivery and nonreturn, the threat of which might, of course, be lessened by their own care in maintaining a reasonably close liaison with their correspondents and with the postal authorities. No reason suggests itself why, in the words of the New York court of appeals, supra, mature men who are not wards of the court should not be allowed to contract in these particulars as they please.
The same observations apply to consent to personal jurisdiction. It is, of course, axiomatic that without jurisdiction over the person a judgment against him is void. However, one of the well-recognized methods of conferring jurisdiction over the person is by consent, which may be given prior to the arising of any cause of action as well as later.12
Here the parties agreed to be governed by the laws of New York and consented to the arbitration of controversies in New York according to the rules of the American Arbitration Association. It follows that they are bound by the Association’s rules of procedure, one of which provides for service by the mailing of notice to the defendant’s last-known address, a procedure which this record does not substantially controvert. The circuit judge apparently felt that the form of notification consented to by the parties did not result in actual notice to them nor did it have *191the character of “legal” notice, which ordinarily means personal service, and thus that the judgment was not entitled to full faith and credit. The issue was misconceived. The parties bargained for a certain type of notice and this they got. The issue is one of law only, as to which the positions of the parties, as well as the law with respect thereto, are clear. There was an abuse of discretion in denying the motion for summary judgment, and, under these circumstances, the order denying full faith and credit was final.
Under the view we have taken of the case it is pointless to discuss the difference, if any there be in reality, at this stage in the judicial process, between (1) an appeal as of right, and (2) an application for leave to appeal involving “a construction of the Constitution or of any statute of this State, or any matters of great public importance,”13 which application we are required to grant.
The judgment should be reversed and the cause remanded to the circuit court for proceedings not. inconsistent herewith. Costs to appellant.
Edwards and Souris, JJ., concurred with Smith, J„

 “There has been filed herein an exemplified copy of the records and files of the supreme court for the State of New York, county of New York, showing that said court duly confirmed the American Arbitration Association arbitrator’s award upon proper notice and according to the laws of the State of New York. Said exemplified copy includes notice of motion to confirm the award, affidavit in support thereof, a copy of the contract upon which the award was based, the award, affidavit of service of said documents, order confirming award and for judgment, notice of settlement thereof and proof of service thereof.”
Affidavit in support of motion for summary judgment.

 There are actually 2 eases and 2 defendants on appeal here, hut the cases are essentially similar and, to simplify matters, we shall speak of Hilton M. Grier, Jr., as the defendant, save where variances are to be observed.

 The origin of the expression seems to have been Kill v. Hollister (1746), 1 Wils KB 129 (95 Eng Rep 532).

 See Sayre, Development of Commercial Arbitration Law, 37 Yale LJ 595.

 Newburger v. Lubell, 257 NY 383, 387 (178 NE 669).

 House of Representatives Report No 96, 68th Congress, 1st Sess, upon the United States arbitration act of 1925 (9 USC [1958 ed], § 1 et seq.), states in part as follows:
“The need for the law arises from an anachronism of our American law. Some centuries ago, because of the jealousy of the English courts for their own jurisdiction, they refused to enforce specific agreements *187to arbitrate upon the ground, that the courts were thereby ousted from their jurisdiction. This jealousy survived for so long a period that the principle became firmly embedded in the English common law and was adopted with it by the American courts. The courts have felt that the precedent was too strongly fixed to be overturned without legislative enactment, although they have frequently criticized the rule and recognized its illogical nature and the injustice which results from it. The bill declares simply that such agreements for arbitration shall be enforced, and provides a procedure in the Federal courts for their enforcement. * * * It is particularly appropriate that the action should be taken at this time when there is so much agitation against the costliness and delays of litigation. These matters can be largely eliminated by agreements for arbitration, if arbitration agreements are made valid and enforceable.” See Kulukundis Shipping Co. v. Amtorg Trading Corp. (CCA 2), 126 F2d 978.

 The earlier statutory development in England is discussed in Sayre, Development of Commercial Arbitration Law, 37 Yale LJ 595, 605-608.

 New York civil practice act (Clevenger’s Practice Manual, 1960), § 1450.

 Ibid.

 New York civil practice act (Clevenger’s Practice Manual, 1960), § 1466.

 Gilbert v. Burnstine, 255 NY 348, 354, 355 (174 NE 706, 73 ALR 1453).

 Restatement, Conflict of Laws, §77(1) (d).

 CLS 1956, § 650.1 (Stat Ann 1959 Cum Supp § 27.2591).