Court Opinion

ID: 5482866
Source: CourtListenerOpinion
Date Created: 2022-01-10 02:00:06.052346+00
Date Added: 2024-06-11T08:33:38.548156
License: Public Domain

Desmond, J.
(dissenting). My dissent is not prompted by any dissatisfaction with the result arrived at here — I unsuccessfully urged a similar result, from construction of similar language, in my dissent, a year ago, in the Matter of Level Export Corp. (Wolz, Aiken & Co.) case (305 N. Y. 82). What troubles me about this present decision is that this court, without any reargument or overruling of that very recent Level case ruling, now puts the opposite construction on language, in the contract between these parties, which has the same meaning as the language in the salesnote in the Level case. What is now the law as to whether a businessman can make his agreement subject to arbitration by general references therein to trade association rules which, in fact, make all disputes arbitrable?
We now have three decisions of this court on the subject: Matter of General Silk Importing Co. (Gerseta Corp.) (234 N. Y. 513), Matter of Level Export Corp. (Wolz, Aiken & Co.) (305 N. Y. 82, supra), and this case. The Gerseta contract said: “ Sales are governed by Raw Silk Rules adopted by the Silk *293Association of America ’ ’ and these 1 ‘ Raw Silk Rules ’ ’ made arbitration compulsory, but the courts said that this reference to the rules did not bind to arbitration. In the Level case, more words were used, but to the very same effect: ‘ ‘ This Salesnote is subject to the provisions of Standard Cotton Textile Sales-note which, by this reference, is incorporated as a part of this agreement and together herewith constitutes the entire contract between buyer and seller.” The “ Standard Cotton Textile Salesnote ” provided, in one of its terms, for arbitration of disputes. Although that Level salesnote did not mention arbitration, any more than did the contract in Gerseta, this court held that the parties had agreed to arbitration, and must arbitrate. Now, in the present case, we have this form of reference to outside rules which require arbitration: “ This contract is also subject to the Cotton Tarn Rules of 1938 as amended ”.
In none of the three contracts (Gerseta, Level and the one here) was there any actual mention of arbitration, but each contract was in terms made subject to an outside, unattached document which, on inspection, would have been found to contain a conventional arbitration clause. In each instance, by variant phraseology, the contracting party was warned that the transaction expressed in the contract was subject to certain identified but not otherwise described rules.
The Level case salesnote failed, just as did the contract here, to include “ clear language ” (Matter of Lehman v. Ostrovsky, 264 N. Y. 130) binding the parties to arbitrate. The words used in one instance were no more or less subtle, artful or devious than in the other. If one set of words was a trap for the unwary or if, on the contrary, it was a fair warning to look at the rules, then, whichever of those two views we take, we should take the same as to the same-meaning words in the other instance. In short, we should either overrule the Level case, or follow it.
The order should be affirmed, with costs.