S.A. Wenger & Co. v. Propper Silk Hosiery Mills, Inc.

• Decision Date: 16 December 1924
• Citation: 239 N.Y. 199,146 N.E. 203
• Parties: S.A. WENGER & CO., INC., v. PROPPER SILK HOSIERY MILLS, INC.
• Court: New York Court of Appeals Court of Appeals

239 N.Y. 199

146 N.E. 203

S.A. WENGER & CO., INC.,

v.PROPPER SILK HOSIERY MILLS, INC.

Court of Appeals of New York.

Dec. 16, 1924.

Appeal from the Supreme Court, Appellate Division, First Department.

In the matter of the application of S.A. Wenger & Co., Inc., for an order directing that an arbitration proceed between petitioner and the Proper Silk Hosiery Mills, Inc. From an order of the Appellate Division (209 App.Div. 784, 205 N.Y.S. 566) reversing an order of the Special Term granting said application, the Propper Silk Hosiery Company appeals. Reversed, and order of Special Term affirmed.

Max D. Steuer, and Samuel Gottlieb, both of New York City, for appellant.

Harry M. Marks, of New York City, for respondent.

POUND, J.

The petitioner herein sets forth a written contract for the purchase and sale of silk entered into by it with the Proper Silk Hosiery Mills, Inc., which contains the following arbitration clause:

“ Arbitration. In the event of any dispute arising relative to the fulfillment of any of the above terms, and failing an amicable adjustment, it shall be settled by arbitration under the rules of the Silk Association of America, the decision of the arbitrators to be final and binding on both parties.”

It further alleges that a dispute has arisen between the parties under the contract with respect to certain bales of raw silk. Petitioner asserts that the silk was purchased by it for the account of the Propper Company and marked and appropriated to the contract, stored in petitioner's go-downs at Yokohama at the risk of the Propper Company, and destroyed by earthquake and fire; that petitioner demanded payment of the purchase price, which was refused; that an amicable adjustment has failed; and that the court should order arbitration of the dispute according to the terms of the contract.

The Propper Company contends that under the terms of the contract title did not pass to it until the silk was shipped, and that there is not dispute arising relative to the fulfillment of any of the terms of the contract because as matter of law the terms of the contract have not been fulfilled by petitioner. The Appellate Division has accepted this view of the transaction and denied the motion. It says:

“It is apparent upon the face of the contract that it was a C.I.F. contract. It provides:

“ ‘Price per pound cost, freight and insurance, New York. Import duties or taxes, if levied to be for buyer's account. * * * Shipment from Yokohama end of July/Aug./Sept. Marine insurance to be covered by shippers. Reimbursement by four months sight draft on New York for which a banker's letter of credit to be furnished by buyer within ten days prior to time of shipment.’ ”

[1] But the operation of the rules as to passage of title is subordinate to intention. Standard Casing Co., Inc., v. California Casing Co., 233 N.Y. 413, 416, 135 N.E. 834. The contract refers to “reimbursement” being made by the purchaser prior to the time of shipment, and these words seem to indicate that the petitioner was to purchase the goods for the buyer so that title passed before the duty of shipment arose. Personal Prop. Law (Cons.Laws, ch. 41) §§ 99,100.

[2][3] The contract provides: “Sales governed by Raw Silk Rules and Regulations of the Silk Association of America.” The record does not set forth the rules. They are, however, a part of the contract. They confer rights upon both parties. The parties have agreed...