In re the Arbitration between Miller Art Co. & Firestone

Appellate Division of the Supreme Court of New York

In re the Arbitration between Miller Art Co. & Firestone

4 A.D.2d 1032, 168 N.Y.S.2d 732, 1957 N.Y. App. Div. LEXIS 3593

Appellate Division of the Supreme Court of the State of New York·Decided December 17, 1957·Published·Cited by 1 cases

Opinion

Order denying motion to stay arbitration reversed, the motion granted and the arbitration stayed, with costs to appellants. While the stockholders’ agreement in question contained a broad arbitration clause relating to any dispute which might arise out of the agreement, the issue is whether the subject of the disputes is covered in any manner in the agreement. The disputes tendered for arbitration are the discharge of two stockholder-employees, and their removal as directors and officers. The stockholders’ agreement, however, was not a general one, covering all their relationship. Instead, it was an agreement, with but minor exceptions, covering the devolution of the stock held by several stockholders in this close corporation. The exceptions related to the continuance of stockholder-employee compensation following death or during disability. These exceptions are not sufficient to embrace the subject matter of the disputes involved here. It has been repeatedly held that no one is under duty to resort to arbitration unless by clear language he has so agreed (Matter of Lehman v. Ostrovsky, 264 N. Y. 130; Matter of Kelley, 240 N. Y. 74, 78). Such a question, when raised of course, is one for the court to determine, and not the arbitrators. (Matter of International Assn, of Machinists [Cutler-Hammer}, 271 App. Div. 917, affd. 297 N. Y. 519.) Settle order. Concur — Breitel, J. P., Botein, Valente, Bergan and Bastow, JJ.

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Order denying motion to stay arbitration reversed, the motion granted and the arbitration stayed, with costs to appellants. While the stockholders’ agreement in question contained a broad arbitration clause relating to any dispute which might arise out of the agreement, the issue is whether the subject of the disputes is covered in any manner in the agreement. The disputes tendered for arbitration are the discharge of two stockholder-employees, and their removal as directors and officers. The stockholders’ agreement, however, was not a general one, covering all their relationship. Instead, it was an agreement, with but minor exceptions, covering the devolution of the stock held by several stockholders in this close corporation. The exceptions related to the continuance of stockholder-employee compensation following death or during disability. These exceptions are not sufficient to embrace the subject matter of the disputes involved here. It has been repeatedly held that no one is under duty to resort to arbitration unless by clear language he has so agreed (Matter of Lehman v. Ostrovsky, 264 N. Y. 130; Matter of Kelley, 240 N. Y. 74, 78). Such a question, when raised of course, is one for the court to determine, and not the arbitrators. (Matter of International Assn, of Machinists [Cutler-Hammer}, 271 App. Div. 917, affd. 297 N. Y. 519.) Settle order. Concur — Breitel, J. P., Botein, Valente, Bergan and Bastow, JJ.

In re the Arbitration between Miller Art Co. & Firestone, 4 A.D.2d 1032, 168 N.Y.S.2d 732, 1957 N.Y. App. Div. LEXIS 3593 (N.Y. Ct. App. 1957).

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