In re the Arbitration between Wheat Export Co. & Wheat Export Co.

185 A.D. 723, 173 N.Y.S. 679, 1919 N.Y. App. Div. LEXIS 5562
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJanuary 10, 1919
StatusPublished
Cited by6 cases

This text of 185 A.D. 723 (In re the Arbitration between Wheat Export Co. & Wheat Export Co.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York 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 Wheat Export Co. & Wheat Export Co., 185 A.D. 723, 173 N.Y.S. 679, 1919 N.Y. App. Div. LEXIS 5562 (N.Y. Ct. App. 1919).

Opinion

Laughlin, J.:

The appellant is a domestic corporation, and it appears by affidavit that it was organized to administer a branch of public service carried on by the government of Great Britain in providing food for its own people and for its allies during the present war, and that in performing such service it has no competitor and makes no profit, and that one of its functions was to purchase and ship flour abroad.

It entered into six contracts with the respondent by which the latter agreed to sell and deliver to it two brands of flour, viz., “ Bakerite ” and “ Newco,” with the millers’ names on the packages. By the terms of each contract the flour was to be of fair average quality of the season’s shipment of the same brand and deliveries were to be made free along side ocean steamer or steamers,” and four of the contracts provided that the deliveries were to be made at the port of New York and delivery under one was to be made at the port of New Orleans and under the other one-half was to be delivered at the port of New York and the other half at the port of New Orleans. Each contract contained a provision by which the buyer was authorized to require delivery at another port, and in that event there was a provision for an adjustment [725]*725of the difference between the freight to the specified port of delivery and to the other port at which delivery might be required. The contracts together embraced the sale and delivery of one thousand carloads of flour. There was no controversy with respect to the deliveries made at the port of New York, but a controversy arose with respect to the quality of some sixty or sixty-five carloads of flour delivered at other ports. Negotiations for the arbitration of this controversy were opened between the parties and the appellant evidently submitted to the respondent a proposed agreement fur the arbitration thereof by three designated persons, who were members of the flour committee of the New York Produce Exchange, but that was not stated in the proposed agreement. The respondent wrote the appellant referring to the proposed agreement, suggesting that there be inserted therein after the names of the arbitrators the words “ members of the Flour Committee of the New York Produce Exchange.” The proposed arbitration agreement submitted the controversy between the parties relating to the fulfillment of the six contracts without reference to any rules for the guidance of the arbitrators. The respondent in the same letter suggested that there be inserted after the word “ arbitration ” in the proposed agreement the following, “ subject to and under the rules of said Exchange,” and stated as a reason "therefor that the arbitration as proposed did not show that it was to be held before the committee of said exchange and, therefore, could be considered as a request for arbitration by the gentlemen named individually and not in their official capacity. The suggested changes were made and the arbitration agreement was signed and "executed by the parties.

The minutes of the arbitrators show that they met on the 21st of February, 1918, and that Mr. Piper, who it appears by affidavit was familiar with the facts, appeared for the appellant, and that Mi*. Spaulding, the president of the respondent, appeared for it, and the minutes contain a memorandum signed by the parties as follows: “We agree to waive our oaths.” Unsworn statements were then made before the arbitrators by Mr. Piper and Mr. Spaulding, at the conclusion of which the chairman of the arbitrators asked if there were any further questions, and there being none, the [726]*726parties were requested to retire, and one week later the arbitrators signed a formal award in writing and in due form by which it appears they made specified allowances per barrel to the appellant with respect to the flour delivered from thirty-seven of the cars aggregating $5,853.04.

On the hearing before the arbitrators the contracts were produced and it appeared that all of the flour had been delivered and the purchase price had been paid at the time of delivery as provided in the contracts. The contracts contained no reference to samples. Mr. Piper for the appellant stated to the arbitrators that the controversy was with respect to the quality of the flour delivered and that a claim for an allowance therefor had been made and refused; that all of the purchases were made on samples submitted by the respondent and retained by the appellant, which were used for the purpose of comparison and that when a sample was nearly exhausted it was renewed; that he produced samples of the two grades of flour which had been furnished by the respondent and retained by the appellant with the dates on which they were received by the appellant, and that with respect to the samples of “ Newco ” he produced part of the original sample, but that the original sample of Bakerite ” was exhausted and the sample he produced was part of one received from respondent on September twenty-sixth; that these samples were used in making comparisons with samples from the cars received at the seaboard and forwarded to the appellant; that he produced a trunk-full of samples so received from the cars to which the appellant had taken exception, with a list of the cars by numbers from which they were taken, and he stated to the arbitrators the nature of the business conducted by the appellant; that owing to conditions incident to the war there was necessity for prompt delivery and the port at which delivery was required could not be determined in advance, and that appellant had endeavored to keep a check on the quality of the flour delivered by securing samples through authorized sampling agencies at the ports of delivery and by obtaining official inspection where there appeared to be necessity therefor whenever this could be done during the hurried delivery of the flour and sailing of the vessels from the ports of delivery, and that in consequence the [727]*727appellant was only able to obtain samples of a small percentage of the deliveries made and that in the circumstances it was impossible for the appellant to present any definite claim for a specified amount and that the measure of damages was necessarily to be left to the arbitrators by comparison of the samples from deliveries with the standard samples. Mr. Spaulding for the respondent thereupon stated that the arbitration agreement had been drawn by the appellant, and he drew attention to a provision in each contract to the effect that it was made in view of and in all respects subject to the by-laws and rules established by said exchange, rule 13 of which provided that on all sales of flour the buyer shall have twenty-four'hours from the day of sale or notice of arrival to examine as to quality; provided, however, the flour is available for examination,” and according to the minutes he stated that there was no chance on any of these deliveries until 60 days — or an average of 60 days after the flour was received,” but it appears by his affidavit that by this he meant that there was no claim made by the appellant until the lapse of the period he specified. Mr. Piper, however, in an affidavit insists that Mr. Spaulding’s statement was as recorded in the minutes, and that it constituted a concession that the flour could not be inspected as contemplated by said rule 13. Respondent in its points concedes that the flour could not have been inspected as contemplated by rule 13, and it makes no claim under said rule, but relies on rule 18. Mr.

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Bluebook (online)
185 A.D. 723, 173 N.Y.S. 679, 1919 N.Y. App. Div. LEXIS 5562, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-arbitration-between-wheat-export-co-wheat-export-co-nyappdiv-1919.