211 N.Y. 346, Meacham v. Jamestown, Franklin and Clearfield Railroad Co.

Citation:211 N.Y. 346
Party Name:HARRY W. MEACHAM, Appellant, v. JAMESTOWN, FRANKLIN AND CLEARFIELD RAILROAD COMPANY, Respondent.
Case Date:June 02, 1914
Court:New York Court of Appeals

Page 346

211 N.Y. 346

HARRY W. MEACHAM, Appellant,

v.

JAMESTOWN, FRANKLIN AND CLEARFIELD RAILROAD COMPANY, Respondent.

New York Court of Appeal

June 2, 1914

Argued February 9, 1914.

Page 347

[Copyrighted Material Omitted]

Page 348

COUNSEL

Arnold L. Davis and Oscar B. Frazer for appellant. A submission to the arbitrator named in the contract annexed to the complaint and award by him was not a condition precedent to the commencement of this action because this arbitration clause is void. (Anson on Cont. [ 4th ed.] 243; Edwards v. A. Ins. Society, L. R. [ 1 Q. B. D.] 596; Clarke on Cont. 432; Myers v. Jenkins, 63 Ohio St. 101; B. & O. R. R. Co. v. Stankard, 56 Ohio St. 224; Tilden v. Bernard, 12 C. C. N. S. [ Ohio] 193;

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D. & H. C. Co. v. Penn. Coal Co., 50 N.Y. 250; Holmes v. Richet, 56 Cal. 307; Nat. Cont. Co. v. H. R. W. P. Co., 34 Misc. 652; 67 A.D. 620; Sanford v. Accident Assn., 147 N.Y. 326; Mitchell v. Dougherty, 90 F. 639; Mentz v. A. F. Ins. Co., 79 Penn. St. 480.) The construction of the arbitration clause in question is to be governed by the law as interpreted by the courts in the state of New York. (Rousillon v. Rousillon, L. R. [ 14 Ch. Div.] 351; Dickenson v. Edwards, 77 N.Y. 573; Frazier v. Fredericks, 24 N. J. L. 162; Kanagar v. Taylor, 7 Ohio St. 134; Mumford v. Canty, 50 Ill. 370; Milliken v. Pratt, 125 Mass. 374.)

Edward A. Foote, F. J. Jerome and Alexander S. Lyman for respondent. The law of the place of performance governs in the determination of all questions relating to matters connected with the performance of the contract and the right to insist upon performance of the stipulation requiring arbitration in this case will be determined by the law of the state of Pennsylvania, the place of performance. (Jewel v. Wright, 30 N.Y. 259; Wilson v. L. M. Co., 150 N.Y. 314; U. Nat. Bank v. Chapman, 169 N.Y. 538; Stumf v. Hallahan, 111 A.D. 383.) The right to stipulate for an award by an arbitrator as to such matters as are involved in this controversy is upheld by the laws of the states of New York, Pennsylvania and Ohio, and a submission of such matters to the arbitrator named in the contract and an award by him is a condition precedent to the commencement of this action. (D. & H. C. Co. v. Penn, Coal Co., 50 N.Y. 250; Seward v. City of Rochester, 109 N.Y. 168; Sweet v. Morrison, 116 N.Y. 19; Nat. Cont. Co. v. H. R. W. P. Co., 170 N.Y. 439; 192 N.Y. 209; Wykoff v. Woarms, 118 A.D. 699; Logan Council v. Boneberger, 66 Ohio St. 644; M. N. Co. v. Fenlon, 4 Y. W. & S. [ Penn.] 205; Lanman v. Young, 31 Penn. St. 306; N. L. R. R. Co. v. McGrann, 33 Penn. St. 530; O'Reilly v. Kerns,

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52 Penn. St. 214.) If the arbitration clause be enforced the arbitrator to whom submission should be made is the individual who held the office of chief engineer at the time the disputes between the parties arose. (N. L. R. R. Co. v. McGrann, 33 Penn. St. 530; Nuneberg v. Pittsburg, 210 Penn. St. 267.)

HOGAN, J.

The trial justice held that the contract in question was to be wholly performed in the state of Pennsylvania, and the law of that state holding the contract valid and enforceable governed its operation and effect, consequently the plaintiff could not succeed in this action for the reason that submission to arbitration was a valid condition precedent which had not been complied with.

The clause of the contract, quoted in the statement of facts, confers upon the engineer, the arbitrator, power to determine the effect of any stipulation of the contract and whether or not there has been a performance of the same by either party, and to decide 'all matters in dispute arising or growing out of the contract. 'It further provides not only that the decision of the engineer as arbitrator shall be final and conclusive between the parties, but each party 'waives all right of action, suit or suits or other remedy in law or otherwise under this contract or arising out of the same to enforce any claim except as the same shall have been determined by said arbitrator.'

Numerous cases involving contracts containing clauses relating to arbitration have been before this court for consideration. In Prest., etc., Delaware & Hudson Canal Co. v. Pennsylvania Coal Company (50 N.Y. 250) the question was fully considered, and a distinction made between the provisions of a contract providing that before a right of action shall accrue certain facts shall be determined, or amounts or values ascertained, and an independent covenant or agreement to provide for the adjustment and settlement of all disputes and differences by arbitration to the

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exclusion of the courts. In subsequent decisions the distinction thus pointed out had been recognized and approved. (Seward v. City of Rochester, 109 N.Y. 164; Sweet v. Morrison, 116 N.Y. 19; National Contracting Co. v. H. R. W. P. Co., 170 N.Y. 439; id. 192 N.Y. 209.)

In Guaranty Trust & S.D. Co. v. Green Cove S. & M. R. R. Co. (139 U.S. 137-142), an action brought to foreclose a mortgage which provided therein that the mode of sale set forth 'shall be exclusive of all others, ' the court held that such clause was invalid, as tending to oust the jurisdiction of the courts. In Sanford v. Accident Association (147 N.Y. 326) the action was brought to recover on a certificate of insurance which...

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