Court Opinion

ID: 5307807
Source: CourtListenerOpinion
Date Created: 2022-01-08 03:36:40.42523+00
Date Added: 2024-06-11T08:29:09.713301
License: Public Domain

Merrell, J.
(dissenting). The position of the appellant does not appeal to one’s sense of honesty and fair dealing. Having fairly entered into a contract with the plaintiff, plain and unambiguous in its provisions, and having once submitted its claims to arbitration in accordance with the provisions of the contract, and an award adverse to the appellant’s contentions having been made, but confirmation of which award was denied because of the failure of plaintiff to properly acknowledge on its part the submission of the controversy between the parties to arbitration, the appellant now seeks to avoid its just obligations and to temporarily delay its day of reckoning by claiming that the procedure had in strict conformity to its written agreement and resulting in the judgment appealed from, invaded a fancied constitutional right of the defendant. I think there is neither honesty nor merit in the appellant’s claim.
The following pertinent facts are undisputed by the appellant: On October 2, 1928, the appellant ordered of the respondent a quantity of merchnadise at a stated price per yard. The order was in writing and included therein under a heading “ Arbitration Clause ” in large capital letters was the following provision:
“ All claims, demands, disputes, differences, controversies and misunderstandings arising under, out of, or in connection with, or in relation to this contract, shall be submitted to and be determined by Arbitration, pursuant to the Arbitration Law of the State of New York, in The Tribunal of Justice known as the Court of Arbitration established and conducted by the American Arbitration Association and in accordance with its Rules.”
It was stated in said order that “ This order is not binding unless accepted by Finsilver, Still & Moss, Inc.” (the respondent). On the day following the said order was accepted by the respondent, the written acceptance thereof containing the same arbitration clause as in the order contained. A portion of the merchandise ordered was delivered by the respondent and accepted and paid for by the appellant. The appellant thereafter refused to accept the balance of the goods for which it had contracted. A dispute having arisen, both the appellant and the respondent submitted the same to arbitration and voluntarily signed a submission agreement pursuant to the plain terms of the contract. Up to this point no claim was made by the appellant that it had not made *95the contract in suit. Having so received, accepted and paid for a part of the merchandise covered by the contract, it was hardly in a position to deny the making of the contract. Upon the signing of the arbitration agreement by both respondent and appellant the arbitration proceeded and resulted in an award in favor of the respondent. Confirmation of such award was denied by the court upon the sole ground that the respondent had failed to properly acknowledge the submission agreement. Having received an adverse award in the arbitration proceeding the appellant sought to nullify such award upon the very technical ground that the respondent’s acknowledgment of the submission agreement was faulty. In such effort the appellant was successful. Following the denial of its motion to confirm the award of the arbitrator, to whom both parties had fairly submitted their dispute, the respondent then demanded that the appellant arbitrate the controversy pursuant to the contract and in accordance with the rales of the American Arbitration Association. The appellant was presumably familiar with the rules of the American Arbitration Association by which it had agreed to be bound. Under such rules and following such demand of the respondent the American Arbitration Association notified the appellant thereof in writing, submitting to both the appellant and respondent a fist of eight chosen from its panel of arbitrators, and calling upon the parties to sélect an arbitrator from the eight names suggested. The appellant saw fit to ignore such notice. Thereupon a selection of an arbitrator was made by said arbitration association in accordance with its rules and formal notice thereof given to the appellant and its attorney by registered mail. Thereafter a formal written notice was sent by the arbitration commission to both the respondent and appellant that a hearing in the arbitration proceeding would be held before the arbitrator at a time and place specified in said notice. The appellant failing to appear, a hearing was duly had resulting in an award in respondent's favor. The foregoing facts being undisputed, it comes with poor grace for the appellant to now urge that its constitutional rights have been invaded by the procedure taken. Notwithstanding it has once submitted its rights in the premises to an arbitrator, with an adverse result, it now attempts by indirection to deny the making of the contract and to insist that such issue be tried by jury. If the appellant did execute the contract, as it has once admitted, then any dispute arising thereon was properly determinable by arbitration pursuant to the rules of the American Arbitration Association, and the appellant, if it had any merits, should have presented the same to the arbitrator for determination.
*96Upon this appeal the appellant does not question the validity of the Arbitration Law of the State. It merely rests its case upon the claimed unconstitutionality of section 4-a of said law in that said section deprives the appellant of the constitutional right of trial by jury (State Const, art. 1, § 2) as to the making of the contract, and the appellant’s default. Prior to the enactment of section 4-a, the statute, by section 3, provided that a party to an arbitration agreement, aggrieved by the failure or refusal of the other party to perform, might apply to the Supreme Court for an order requiring the arbitration to proceed in accordance with the contract, and thereupon the court, upon being satisfied that the making of the contract or failure to comply therewith was not at issue, might order the parties to proceed to arbitration. If there was an issue as to the making of the contract or default by a party, then the court was to summarily determine the same and either party might demand a jury trial of such issues. By the enactment of section 4-a it was provided that where pursuant to a provision in a written contract to settle by arbitration a controversy thereafter arising between the parties, an award has been made without previous application to the Supreme Court as required by section 3, such award shall be valid and enforcible notwithstanding anything contained in section 3, except that at any time before a final judgment shall have been given in proceedings to enforce any such award, any party to the arbitration who has not participated therein, may apply to the Supreme Court to have determined whether or not a written contract providing for arbitration was made or that such party was not in default by failing to comply with the terms thereof or that the arbitrator was not appointed or did not act pursuant to the written contract. Where such application is made, a jury trial may be demanded and the court shall make an order referring the issue or issues to a jury for determination. It wih thus be noted that the only issues to be referred to a jury are, first, whether or not a contract containing a clause for arbitration was made; and, second, whether or not the party was in default. In other words, if neither of these matters is at issue it is unnecessary to proceed to a trial by jury. The contract between the parties was entered into after the enactment of section 4-a and when the same was in full force and the parties must be presumed to have known of its provisions and to have contracted with such knowledge. The parties provided by their contract that “ All claims, demands, disputes, differences, controversies and misunderstandings arising under, out of, or in connection with, or in relation to this contract, shall be submitted to and be determined by Arbitration, pursuant to the Arbitration *97Law of the State of New York, in The Tribunal of Justice known as the Court of Arbitration established and conducted by the American Arbitration Association, and in accordance with its rules.”
The language used was all-embracing and covered any possible dispute. It does not seem to me that by the procedure followed appellant’s rights have been invaded. The appellant was obviously in no position to deny making the contract or its default, having once submitted its differences with the respondent under" the contract to arbitration. The appellant had due notice of every step taken in the arbitration proceeding under the rules of the association. It had full opportunity to appear at the hearing and to present its claims. Undoubtedly realizing that its claims were unmeritorious and that a like award to that upon the prior hearing would probably result, it ignored the proceeding and chose to escape liability by attacking the constitutionality of the procedure taken. Whatever may be said as to the unconstitutionality of section 4-a under some circumstances, I do not think the present appellant is in a position to raise such question.
The validity of the Arbitration Law was questioned in Matter of Berkovitz v. Arbib & Houlberg (230 N. Y. 261). Chief Judge Cardozo, writing for the Court of Appeals in that case, said (at p. 273): “ The statute is assailed as inconsistent with article I, section 2, of the Constitution of the State, which secures the right of trial by jury. The right is one that may be waived (People v. Quigg, 59 N. Y. 83; People ex rel. McLaughlin v. Bd. Police Commissioners, 174 N. Y. 450, 456; Boyden v. Lamb, 152 Mass. 416, 419; Constitution, art. I, sec. 2). It was waived by the consent to arbitrate.”
So here the appellant, when it signed the contract in suit, waived the right of trial by jury of the issue as to the making of the contract and as to its defau't. Indeed, the appellant has raised no question of fact which would authorize the court to submit to a jury. The law afforded the appellant the right to attack the award at any time before final judgment and have it determined in court, and by jury if it desired, whether it in fact made the contract providing for arbitration, or whether it was in default by failing to comply with its terms, or that the arbitrator was not appointed or did not act pursuant to the written contract. Having failed to avail itself of such opportunity the appellant should not now be heard to complain. A party to a contract very well knows whether or not it has made a contract containing an arbitration clause and as to whether it has defaulted. If it has made no such contract or if it has not made default, then it may safely ignore an attempted arbitration of differences, and if an award is made against it it *98may then attack the proceeding and have a court or jury determination of the issues as to the making of the contract, its default, and the regularity of the appointment of the arbitrator or that he did not act pursuant to the written contract. If it has made the contract and is in default, then manifestly it should submit to arbitration in accordance with its contract. In my opinion, the Arbitration Law, as now in force, secures to a contracting party every right to which it is entitled. Surely, under the circumstances of the case here presented, there is no merit in the appellant’s contention.
The judgment and order appealed from should be affirmed, with costs to the respondent.
Judgment and order reversed, with costs, and award vacated, with costs.