Court Opinion

ID: 5401486
Source: CourtListenerOpinion
Date Created: 2022-01-08 10:43:52.723658+00
Date Added: 2024-06-11T08:30:27.245060
License: Public Domain

Rabin, J.
(dissenting). I dissent and vote to affirm the order of Special Term in all respects.
In 1946, contracts for the purchase and sale of a quantity of lumber were entered into between respondent, a Nicaragua firm and the Southland Supply Co., of High Point, North Carolina, under which name the appellant’s decedent was doing business. These contracts provided that any dispute thereunder would be arbitrated in New York. A dispute having arisen respondent asserted its right to arbitration here, but decedent, appearing and invoking the jurisdiction of our courts, asked that the arbitration be stayed and that he be granted a trial by jury on the issue as to the making and validity of the alleged contracts. That *218application was granted and decedent was allowed a jury trial on condition that he pay the required fees. Instead of doing so he moved for a permanent restraining order contending, by reason of the law of North Carolina, where the contracts were made, that arbitration could not be enforced in any State court of the United States. That motion was denied and appeals by the decedent to this court, the Court of Appeals and the Supreme Court of the United States were unsuccessful. Decedent died in 1952 and appellant was appointed executrix. No further steps having been taken by the decedent or the executrix with respect to their right to a jury trial, respondent moved to substitute the executrix in place of decedent, to vacate the stay of arbitration and to direct that the arbitration proceed. Service of the order to show cause was made upon the attorney for decedent and also by mail upon the executrix in North Carolina. The executrix has appeared specially, claiming that the New York courts have no jurisdiction over her. This appeal is from the order of Special Term which substituted the executrix as petitioner, dismissed the proceeding to stay arbitration, vacated the stay and directed the parties to proceed to arbitration.
We all agree that the foreign executrix can be substituted as a party for the purpose of vacating the outstanding stay and dismissing the proceeding instituted by her decedent for a stay of arbitration, but a majority of this court believes that we are without power to direct the executrix to proceed with the arbitration.
The position of the appellant executrix is that, lacking her voluntary appearance and without a res on which to base jurisdiction in rem, we may not direct arbitration. While there is no res here in the sense of there being physical or tangible property within the jurisdiction, nevertheless there may be said to be a res in the sense of a situs of the controversy, arising out of the contract of the parties when they agreed that any controversy would be determined by arbitration in the State of New York. Res has been aptly defined as “ everything that may form an object of rights ”. (See Cyclopedic Law Dictionary [3d ed.].) Thus it would seem that when the parties by their contracts selected New York as the place for arbitration they created here something that most certainly was “ an object of rights ”, and to that extent it may fairly be said a res was established.
There is support too, in the cases, for this theory. In Prosperity Co. v. American Laundry Mach. Co. (271 App. Div. 622, affd. 297 N. Y. 486) a New York and an Ohio Corporation agreed to arbitrate any controversy, either under the laws of New York *219or the laws of Ohio. It was held that an arbitration award obtained in Ohio against the New York corporation was valid and enforcible in this jurisdiction even though the New York corporation did not appear in Ohio, was not served there and received notice of the proceeding only by mail sent to New York. While the case was decided on the theory that defendant was bound by its prior consent to arbitrate either in New York or Ohio, and also on the basis of public policy, inherent in the decision is the conclusion that there existed something in the nature of a res, else the Ohio court could not have proceeded without personal service on the defendant within that jurisdiction. To the same effect is Gilbert v. Burnstine (255 N. Y. 348).
In the light of these cases we would have no problem at all if the decedent were alive and respondent were seeking to enforce arbitration against him in this jurisdiction, even if he chose not to come here. We see no reason why a different rule should be applied to his executrix insofar as jurisdiction is concerned. She should not be permitted to do what the decedent himself could not do, namely, repudiate the contract to arbitrate in New York. If, as we think, the agreement of decedent to submit the controversy to arbitrate here, created something sufficient to permit the court to act without personal jurisdiction (Prosperity Co. v. American Laundry Mach. Co., supra; Gilbert v. Burnstme, supra), decedent’s death could not destroy that something, res or situs or whatever name it be given. Consequently, the presence here of the executrix would seem to be no more necessary than it would have been in the case of decedent.
It must also be remembered that the decedent, who chose this jurisdiction as the form for arbitration, was the same person who chose appellant as his executrix. She is not a stranger and cannot divorce herself from the decedent’s commitment to arbitrate in New York. The controversy having been brought here by decedent it is for his designated representative to dispose of it here.
It seems hardly correct to say that by directing arbitration we are attempting to bring a foreign executrix into this jurisdiction. We are not bringing the executrix here, but in effect we are refusing to let her forsake and repudiate this jurisdiction which decedent by his contract provided for and by his subsequent appearance here actually invoked.
The present case differs from those which express the general rule that a foreign executor may not sue or be sued in an official capacity in this State. The distinguishing factor here, and one which does not appear to be present in any of the cases cited, *220is that the decedent by his own act conferred jurisdiction on the courts of this State and gave them the power to act despite the absence of personal jurisdiction.
If we are correct in our view that the executrix stands in the place of the decedent for jurisdictional purposes then even if we do not expressly direct her to proceed with arbitration, any subsequent award made in the proceeding would nevertheless be binding on her if she failed to appear after due notice of the proceeding and sufficient opportunity to appear (Prosperity Co. v. American Laundry Mach. Co., supra; Gilbert v. Burnstine, supra).
The order should be affirmed in all respects, with costs.
Cohn and Bastow, JJ., concur with Breitel, J.; Babin, J., dissents and votes to affirm, in opinion in which Peck, P. J., concurs.
Order modified to strike the provision that the parties are directed to proceed to arbitration and, as so modified, affirmed, with $20 costs and disbursements to the appellant. Settle order on notice.