Court Opinion

ID: 6888248
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:34:57.05027+00
Date Added: 2024-06-11T16:05:46.654832
License: Public Domain

WILBUR, Circuit Judge
(dissenting).
I dissent. As stated in the main opinion the contract between the Western Vegetable Oils Company and the Southern Cotton Oil Company made the rules of the National Institute of Oilseed Products a part of the contract of sale. The rules provided for an arbitration of disputes arising under the contract. The contract of sale required the seller to furnish a railroad tank car for the transportation of the oil. The damages claimed are for furnishing a defective car. This claim clearly arises out of the contract and, consequently, is subject to the agreement to arbitrate. I cannot see that the incorporation of the rules of the Institute concerning arbitration is modified or affected by the fact that the parties did not use a form of contract containing a similar clause, as stated in the main opinion. If this were an action to reform the contract by excluding the arbitration provision such evidence would be significant, but not in this case which is based upon the contract as written.
The arbitration clause of the contract is enforcible under the laws of California which are referred to and made a part of the contract and also by the federal statute covering arbitration. Both statutes provide for a stay of proceedings in an action brought upon an obligation which is subject to arbitration.
*238The defendant invoked this rule by a motion to stay proceedings against it pending arbitration. It did not request that the suit as against its codefendant be stayed. The fact that the action as against the Southern Pacific Company is not stayed and might proceed pending arbitration is, I think, without significance.
It is also urged that the defendant, the appellant herein, waived the provisions of the arbitration agreement by failing to proceed “immediately” as required by the rules. The arbitration clause is by its terms only applicable to disputes “which cannot be settled amicably between the interested parties”. The word “immediately” refers not to the date of the obligation but to the date when it is ascertained that the “dispute” cannot be settled amicably. Until it was determined that the controversy could not be settled amicably the obligation to go forward with the arbitration did.not arise. The failure of the seller to proceed is not a waiver of its right , to stay an action brought by the other party. Kulukundis Shipping Co. v. Amtorg Trading Corp., 2 Cir., 126 F.2d 978.
The order denying a stay as to appellant pending arbitration should be reversed.