In Re the Arbitration Between Level Export Corp. & Wolz, Aiken & Co.

111 N.E.2d 218, 305 N.Y. 82, 1953 N.Y. LEXIS 839
CourtNew York Court of Appeals
DecidedFebruary 26, 1953
StatusPublished
Cited by71 cases

This text of 111 N.E.2d 218 (In Re the Arbitration Between Level Export Corp. & Wolz, Aiken & Co.) is published on Counsel Stack Legal Research, covering New York Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re the Arbitration Between Level Export Corp. & Wolz, Aiken & Co., 111 N.E.2d 218, 305 N.Y. 82, 1953 N.Y. LEXIS 839 (N.Y. 1953).

Opinions

Lewis, J.

Incidental to a commercial transaction between the parties to this proceeding, there has emerged the question, now decisive in this litigation, whether each of the two contracts, which fixed the obligations of the parties, validly incorporated an agreement that Any controversy arising under, or in relation to, this contract, shall be settled by arbitration.”

[84]*84As to facts: The petitioner-respondent, Level Export Corporation, to which reference will be made as the buyer, is engaged in the purchase and export of a variety of commodities including textiles. On January 22 and February 14, 1951, the buyer executed two written contracts, practically identical in text, by which it agreed to purchase from the respondent-appellant, Wolz, Aiken & Co., hereinafter referred to as the seller, a total quantity of 135,000 yards of leño — a light-weight cotton fabric used in making summer garments. Each of the two agreements contained the names of the parties, the quantity of fabric sold, the delivery dates and the terms of payment. The balance of each contract — covering a substantial portion of the single page upon which the agreement was printed — consists of the following two paragraphs:

“ This Salesnote is subject to the provisions of Standard Cotton Textile Salesnote which, by this reference, is incorporated as a part of this agreement and together herewith constitutes the entire contract between buyer and seller. No variation therefrom shall be valid unless accepted in writing.
Prices on any undelivered portion of this contract are subject to any further increase or decrease due to Governmental action and any present or future Federal or State legislation affecting the seller’s costs, and deliveries may be modified to the extent necessitated by any such Governmental action or legislation affecting production.” (Emphasis supplied.)

The standard cotton textile salesnote which — by the words italicized above- — -is incorporated by reference in each of the two agreements here involved, contains ten subdivisions which, by their titles, relate to — I. Construction ”, “ II. Passing of Title “ III. Storage and Insurance ”, “ IV. Terms of Collection and Credit ”, V. Cancellations, Rejections and Claims ”, VI. Defaults in Payment ”, “ VII. Furnishing Specifications ”, “ VIII. Casualty ”, IX. Other Contingencies ”, and “ X. Arbitration ”. The tenth subdivision, relating to Arbitration ”, provides as follows: “ Any controversy arising under, or in relation to, this contract, shall be settled by arbitration. If the parties are unable to agree respecting time, place, method, or rules of the arbitration, then such arbitration shall be held in the City of New York in [85]*85accordance with the laws of the State of New York and the rules then obtaining of the General Arbitration Council of the Textile Industry and the parties consent to the jurisdiction of the Supreme Court of said State and further consent that any process or notice of motion or other application to the Court or a Judge thereof may be served outside the State of New York by registered mail or by personal service, provided a reasonable time for appearance is allowed.”

When a dispute subsequently arose between the parties with regard to performance under the two purchase agreements, the seller instituted arbitration proceedings in accord with the rules of the General Arbitration Council of the Textile Industry. Thereupon the buyer, when requested to do so, refused to appoint an arbitrator and has thus far successfully opposed arbitration by motion for a stay made at Special Term upon the ground that no agreement to arbitrate exists between the parties (Civ. Prac. Act, § 1458, subd. 2).

The buyer admits that it executed the contracts of purchase mentioned above, each of which by its terms incorporates the standard cotton textile salesnote containing the provision upon which is based the seller’s demand for arbitration. The ground upon which the buyer resists arbitration, viz., that no arbitration agreement exists between the parties, is stated in the affidavit by the buyer’s secretary and treasurer, read in support of its motion in this proceeding, as follows:

“At no time was the petitioner informed in any way that the provisions of the Standard Cotton Textile Salesnote contained any provision requiring arbitration of any controversy between the parties.
“ Neither the petitioner nor any of its officers or directors is a member of any association or any textile group; none of us has ever seen the Worth Street Rules; we have never been provided with a copy thereof. Arbitration was mentioned for the first time by the attorneys for the respondent on September 14, 1951, which was several months after the controversy arose. At the time that the petitioner signed the contracts * * * neither the petitioner nor any of its officers or directors was aware of any provision requiring arbitration under the contracts. * * *
[86]*86‘ ‘ The petitioner [buyer] did not know, if it is the fact, that by signing the agreements annexed hereto that it had agreed to arbitrate any disputes with respondent. No arbitration clause was ever called to the attention of the petitioner.”

The question thus presented is whether the factual allegations contained in the buyer’s affidavit, quoted in part above, serve to raise “ * * * a substantial issue as to the making of the contract ”, thereby entitling the buyer to a stay of arbitration. (Civ. Prac. Act, § 1458, subd. 2.) That question is one of law. (Matter of General Elec. Co. [United Elec. Radio & Mach. Workers of America], 300 N. Y. 262, 264; Alpert v. Admiration Knitwear Co., 304 N. Y. 1, 3.)

Mindful that “ No one is under a duty to resort to arbitration unless by clear language he has so agreed ” (Matter of Lehman v. Ostrovsky, 264 N. Y. 130,132), we are unable to find in the record legal justification for the buyer’s present claim that it is not obligated, by each of the purchase agreements to which it was a party, to arbitrate the disputes which have arisen in the course of performance of those agreements. Each of those contracts contains the statement that it is made “ subject to the provisions of Standard Cotton Textile Salesnote ” which, as we have seen, was expressly “ * * * incorporated as a part of this agreement and together herewith constitutes the entire contract between buyer and seller.” Difficult it would be to find words more clearly to express the contractual intent of the parties. There is no evidence that an attempt was made to limit the application of the standard cotton textile salesnote; nor was there indication that any one of the ten subdivisions of the salesnote was not intended to apply. Indeed, a contrary intention is indicated by the sentence which immediately follows the contract provision last quoted above “ No variation therefrom shall be valid unless accepted in writing.”

The effect of the foregoing contract provisions was to adopt, and to integrate into each purchase agreement, the terms of the standard cotton textile salesnote. Among those provisions is the tenth subdivision, bearing the caption “ Arbitration ”, beneath which is the printed statement ‘ ‘ Any controversy arising under, or in relation to, this contract, shall be settled by arbitration”, followed by procedural provisions in the event arbitration should become necessary.

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Bluebook (online)
111 N.E.2d 218, 305 N.Y. 82, 1953 N.Y. LEXIS 839, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-arbitration-between-level-export-corp-wolz-aiken-co-ny-1953.