185 F.2d 316 (6th Cir. 1950), 11137, American Locomotive Co. v. Gyro Process Co.

Docket Nº:11137.
Citation:185 F.2d 316
Party Name:AMERICAN LOCOMOTIVE CO. v. GYRO PROCESS CO. et al.
Case Date:November 24, 1950
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
FREE EXCERPT

Page 316

185 F.2d 316 (6th Cir. 1950)

AMERICAN LOCOMOTIVE CO.

v.

GYRO PROCESS CO. et al.

No. 11137.

United States Court of Appeals, Sixth Circuit.

Nov. 24, 1950

Page 317

         Frank D. Eaman and Walter Meek, Detroit, Mich. (Charles H. Tuttle, Tyler M. Bartow, New York City, and Walter M. Meek, Detroit, Mich., on the brief; Dyer, Angell, Meek & Batten, Detroit, Mich., of counsel), for appellant.

         Howell Van Auken, Detroit, Mich. (Howell Van Auken and Lawrence Rothenberg, Detroit, Mich., on the brief), for appellees.

         Before HICKS, Chief Judge, and McALLISTER and MILLER, Circuit Judges.

         MILLER, Circuit Judge.

         The appellant filed this action in the District Court to require the appellees, Gyro Process Company and Chemical Research Corporation, to proceed with arbitration of claims made by them against the appellant by reason of an alleged breach of contract in accordance with the provisions of Section 4 of the United States Arbitration Act. 9 U.S.C.A. § 4. Appellant has appealed from an order denying arbitration.

         This Court has heretofore considered another phase of the same controversy between the parties. The underlying facts are given in detail in the opinion of the Court in American Locomotive Company v. Chemical Research Corp., 6 Cir., 171 F.2d 115. A brief summary is sufficient for this appeal.

         On June 19, 1940, Chemical Research Corporation (hereinafter called Chemical) filed suit in the State Court of Michigan against the appellant American Locomotive Company (hereinafter called Locomotive). On August 30, 1940, Gyro Process Company (hereinafter called Gyro), filed suit in the State Court of Michigan against the appellant Locomotive and others. The actions were removed to the U. S. District Court and later consolidated for trial. Both suits involve the same question, and as we did in our former opinion, we will refer to the proceedings in the Gyro suit. The actions arose out of contracts of June 16, 1932, between the parties. Paragraphs 4 and 9 of the contract provided for arbitration of certain disputes arising under the contract. On February 8, 1941, Locomotive filed an answer and counter-claim which denied the material allegations of the complaint and set up six special defenses. The fourth of these special defenses referred to the arbitration provisions of the contract, pleaded that no such arbitration had been had or demanded by Gyro and that accordingly it was not entitled to bring the action. Locomotive did not at that time move for a stay of proceedings pending arbitration. After numerous motions and proceedings, set out in detail in our former opinion, Locomotive, on March 22, 1948, moved for an order staying further proceedings pending arbitration, in accordance with the provisions of Section 3 of the Arbitration Act, 9 U.S.C.A. § 3. The stay was denied by the District Court, and that ruling was affirmed by this Court on appeal on December 8, 1948. American Locomotive Co. v. Chemical Research Corp., 6 Cir., 171 F.2d 115. Section 3 of the Arbitration Act provided for a stay only in case the applicant was not in default in proceeding with the arbitration. In our opinion, the delay of over seven years on the part of Locomotive in moving for a stay was unreasonable and constituted 'default' on its part in proceeding with the arbitration. Certiorari was denied February 7, 1949, 336 U.S. 909, 69 S.Ct. 515, 93 L.Ed. 1074.

         Thereafter on February 10, 1949, Locomotive filed the present action in the District Court against Gyro and Chemical, proceeding in this action under Section 4 of the Arbitration Act, 9 U.S.C.A. § 4. The complaint set out the contracts of June 16, 1932, the arbitration provisions contained in Paragraphs 4 and 9 thereof, alleged willingness and desire to have the claims heard and determined by arbitration, and stated that both Gyro and Chemical instituted and were proceeding with their

Page 318

suits without resorting or offering to resort to arbitration. The complaint prayed that as provided by Section 4 of the Arbitration Act, the Court order Gyro and Chemical to proceed with arbitration of the claims made by them against Locomotive in the consolidated suit and join with Locomotive in the appointment of the board of arbitrators as provided in Paragraph 9 of the contract. Gyro and Chemical pleaded among other defenses that Locomotive had never prior to March 22, 1948 shown any desire for arbitration, but had set forth the matter of arbitration solely as a bar to the maintenance of the two suits in the District Court, and by its conduct had waived any right to seek arbitration. The District Judge, in an opinion which carefully reviewed and analyzed the foregoing proceedings, was of the opinion that Locomotive had waived its contract right of arbitration and entered an order denying the prayers of the petition. This appeal followed.

         Section...

To continue reading

FREE SIGN UP