Court Opinion

ID: 5861396
Source: CourtListenerOpinion
Date Created: 2022-01-13 01:19:55.295306+00
Date Added: 2024-06-11T08:44:26.637217
License: Public Domain

Ross, J. (dissenting).
The majority overlooks a number of critical facts, and makes certain assumptions with which we cannot agree.
Concededly, Associated Textile Brokers Co. (Associated) issued a sale note, and corrected sale note, to the parties, each of which contained an arbitration clause. It is undisputed that plaintiff did not sign either note, and that plaintiff did not discuss arbitration with Associated.
The cornerstone of the majority’s opinion is the conclusion that Associated acted as broker for both parties. We cannot agree. This conclusion is unsupported by the evidence, which shows that Associated only represented defendant.
Examination of the record reveals that:
1. both notes state that Associated “Sold for account of” defendant;
2. the president of plaintiff denied, in an affidavit, that Associated was plaintiff’s broker, and this sworn statement, even though denied by defendant, was not rebutted by an affidavit of Associated (who would purport to be its agent), as one would expect it to be if it was not the fact;
3. there is no “pattern of past conduct * * * [that establishes a custom, that the broker represented both parties, that indicates] an implied agreement to arbitrate” (Raam Fabrics v Scott Corp., 88 AD2d 853). It is undisputed that this is the first time that the parties did business together and they conducted their businesses in different areas of the textile trade.
It is hornbook law that “[t]he power of the agent results from the manifestation of the principal’s consent, and extends no further than such manifestation” (Wen Kroy Realty Co. v Public Nat. Bank & Trust Co. of N. Y., 260 NY 84, 89). Herein, we find that plaintiff never manifested an intent to have Associated act as its agent or broker. Absent such a finding, Associated’s acts cannot bind plaintiff to arbitrate.
The cases cited by the majority that deal with the effect of the retention for a reasonable time, without objection, of a broker’s sale note which contains an arbitration clause, *111are not applicable. The sale note and corrected sale note were almost immediately superseded by the defendant’s own contract, which bears the same date as the two notes. Once the defendant issued its contract, these notes were eliminated from this matter. The face of each one of the notes had stamped upon it this legend: “this is a memorandum SALE NOTE, AND WILL BE SUPERSEDED BY SELLER’S own contract”. When the majority concludes “so binding was the broker’s note that it was unaffected by the later unsigned contract”, they disregard the plain meaning of the word “superseded”, that appeared on the sale notes.
As mentioned by the majority, the plaintiff never signed the contract. The defendant’s contract contained an arbitration clause. However, the majority do not contend that the retention by plaintiff of this unsigned contract alone makes out an agreement to arbitrate. There is no evidence that the parties ever discussed the subject of arbitration with each other. “[T]he mere retention by the buyer of the form containing the arbitration clause failed to create such an agreement” (Schubtex, Inc. v Allen Snyder, Inc., 49 NY2d 1, 6).
Soon after defendant began to ship goods, plaintiff complained by letter, dated September 16, 1981, about late delivery. The majority identified this letter, and we agree, as an acknowledgment by plaintiff that a contract existed between the parties. Plaintiff has never denied that. Nevertheless, acknowledging the existence of a contract does not concede an agreement to arbitrate disputes. This letter makes no mention of arbitration.
The Court of Appeals stated in Matter of Marlene Inds. Corp. (Carnac Textiles) (45 NY2d 327, 333): “It has long been the rule in this State that the parties to a commercial transaction ‘will not be held to have chosen arbitration as the forum for the resolution of their disputes in the absence of an express, unequivocal agreement to that effect; absent such an explicit commitment neither party may be compelled to arbitrate’ ”.
Our review of the facts compels us to find that plaintiff did not expressly and unequivocally agree to arbitrate its dispute with defendant.
*112Accordingly, we would affirm Special Term.
Sullivan, J. P., and Carro, J., concur with Fein, J.; Ross and Lynch, JJ., dissent in an opinion by Ross, J.
Order, Supreme Court, New York County, entered on June 9, 1982, reversed, on the law, defendant’s motion granted and plaintiff’s cross motion denied. Appellant shall recover of respondent $50 costs and disbursements of this appeal.