255 N.Y. 348, Gilbert v. Burnstine

Citation:255 N.Y. 348
Party Name:JACQUES GILBERT, Appellant, v. HENRY C. BURNSTINE et al., Individually and as Copartners under the Firm Name of BURNSTINE & GEIST, Respondents.
Case Date:January 13, 1931
Court:New York Court of Appeals

Page 348

255 N.Y. 348

JACQUES GILBERT, Appellant,

v.

HENRY C. BURNSTINE et al., Individually and as Copartners under the Firm Name of BURNSTINE & GEIST, Respondents.

New York Court of Appeal

January 13, 1931

Argued October 21, 1930.

Page 349

COUNSEL

Eugene Untermyer, Laurence A. Steinhardt and Herbert B. Claster for appellant. The defendants have voluntarily agreed to be governed by the British law and to submit the differences in controversy to the British arbitration tribunal. The defendants are, therefore, bound by the award rendered thereon as in any other instance of a judgment or award rendered by default. (Norske Atlas Ins. Co. v. London General Ins. Co., 43 Times Law Rep. 541; Oppenheim & Co. v. Haneef Sahib, [1922] 1 App. Cas. 482; Matter of Berkowitz v. Arbib, 230 N.Y. 261; Mitsubishi Goshi Kaishi v. Carstens Packing Co., 200 P. 327; Matter of Bullard v. Grace Co., 240 N.Y. 388; Finsilver v. Goldberg, 253 N.Y. 382; Miller v. Smith, L. R. [1916] K. B. Div. 419; Hamlyn v. Bettely, 6 Q. B. 63.) Ample personal jurisdiction was secured over the defendants by service in the State of New York because the defendants agreed in advance to that method of service. (Finsilver v. Goldberg, 253 N.Y. 387; Elmendorf v. Harris, 23 Wend. 628; Wilson v. Seligman, 144 U.S. 41; Pennoyer v. Neff, 95 U.S. 714; Kerr v. Tagliavia, 101 Misc. 614; 186 A.D. 893; 229 N.Y. 542; 254 U.S. 645; Feyerick v. Hubbard, 71 L. J. [N. S.] K. B. Div. 509; Copin v. Adamson, L. R. 9 Exch. 345; Roussillon v. Roussillon, 14 Ch. Div. 351; Teel v. Yost, 128 N.Y. 387; Tatum v. Maloney, 226 A.D. 62; Guggenheim v. Wahl, 203 N.Y. 390; Vose v. Cockcroft, 44 N.Y. 415; Conde v. Schenectady, 164 N.Y. 258; Murdock v. Cincinnati, 44 F. 726; Matter of Teannakopoulos, 195 A.D. 261.)

Julius Henry Cohen, Kenneth Dayton, Burton A. Zorn and George H. Kenny for Corporation of the Chamber of

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Commerce of the State of New York et al., amici curiae. Although the notices from the plaintiff and arbitrator, and a summons from an English court relating to the appointment of an arbitrator were served upon defendants only in New York, but in full compliance with the provisions of English law, they are binding on defendants. (Matter of Berkovitz v. Arbib, 230 N.Y. 261; Schibsby v. Westenholz, L. R. 6 Q. B. 155; Rousillon v. Rousillon, 49 L. J. R. [N. S.] Eq. 338; Feyerick v. Hubbard, 71 L. J. R. [N. S.] K. B. 509; Vallee v. Dumergue, 4 Exch. 290; Teel v. Yost, 128 N.Y. 387; Mayer v. Raudenbush, 217 N.Y. 633; Albert Building & Loan Assn. v. Newman, 130 Misc. 624; Grover & Baker Sewing Machine Co. v. Radcliffe, 137 U.S. 287; Finsilver v. Goldberg, 253 N.Y. 382; Liverpool M. & G. Ins. Co. v. Bankers & Shippers Ins. Co., 24 Ll. L. Rep. 85; Copin v. Adamson, L. R. 9 Exch. 345; 45 L. J. R. [N. S.] Exch. 15; Merrifield, Ziegler & Co. v. Liverpool Cotton Assn., 105 T. L. R. 97; Norske Atlas Ins. Co. v. London General Ins. Co., 43 T. L. R. 541; Hamlyn & Co. v. Talisker Distillery, L. R. [1894] A. C. 202; Law v. Garrett, L. R. [1878] 8 Ch. Div. 26; Kirchner & Co. v. Gruban, L. R. [1909] 1 Ch. Div. 413; Austrian Lloyd S. S. Co. v. Gresham Life Assur. Soc., L. R. [1903] 1 K. B. 249; The Cap Blanco, L. R. [1913] Prob. Div. 130; Penn Copper Mines v. Rio Tinto Co., 105 T. L. R. 846; The Dawlish, [1910] Prob. Div. 339.) The defendants agreed that the process of the English court necessary to the effectuation of the arbitration agreement might be served upon them in New York and that they would thereby come within the jurisdiction of the English court. (Grover & Baker Sewing Machine Co. v. Radcliffe, 137 U.S. 287; Willesford v. Watson, L. R. 8 Ch. 473; Matter of Wenger & Co. v. Propper Silk Hosiery Mills, 239 N.Y. 199; Matter of American Eagle Fire Ins. Co. v. N. J. Ins. Co., 240 N.Y. 398; Matter of Interocean Mercantile Corp., 204 A.D. 284.) The public policy of the State should support the effectuation of this agreement.

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(Atlantic Fruit Co. v. Red Cross Line, 5 F. [2d] 218.)

Henry C. Burnstine for respondents. A party is bound by the result of an arbitration not because he agrees to arbitrate but because he does arbitrate, either actually, whether voluntarily or involuntarily, or in legal effect, because ordered so to do by a power to which he is amenable. His refusal to arbitrate is final, unless changed by the compelling force of such power as alone can compel him because of his amenability to it, and its proper exercise to that end. (Matter of Bullard v. Grace Co., 240 N.Y. 388; Wilson v. Winchester & P. R. Co., 82 F. 15; Ackerman v. Berriman, 61 Misc. 165; Matter of Berkovitz v. Arbib, 230 N.Y. 261; Mitsubishi Goshi Kaishi v. Carstens Packing Co., 200 P. 327; Norske Atlas Ins. Co. v. London General Ins. Co., 43 Times Law Rep. 541; Oppenheim & Co. v. Haneef Sahib, 1 App. Cas. 482; Matter of Eyre & Leicester Corp., [1892] 1 Q. B. 136; Hamlyn v. Betterly, 6 Q. B. 63; Matter of Smith & Service & Nelson & Sons, [1890] 25 Q. B. D. 545; Doleman v. Ossett Corp., 3 K. B. 257; People ex rel. Union Ins. Co. v. Nash, 111 N.Y. 310; Finucane Co. v. Board of Education, 190 N.Y. 76; Matter of Zimmerman v. Cohen, 236 N.Y. 19.) No jurisdiction of defendants was secured by delivery to them in New York of what within British territory was British process, nor did defendants agree in advance that such method should constitute service upon them, and it could not have given jurisdiction had they so agreed. (British Wagon Co. v. Gray, [1896] 1 Q. B. 35; Queen v. Justice of Essex, [1895] 1 Q. B. 38; Jones v. Owen, 5 Dowl. & Lowndes, 669; Foster v. Usherwood, 37 L. T. 389; Pennoyer v. Neff, 95 U.S. 714; D'Arcy v. Ketchum, 11 How. 165; Wilson v. Seligman, 144 U.S. 41; Teel v. Yost, 128 N.Y. 387; Schibsby v. Westenholz, L. R. [6 Q. B.] 155; Sudbury v. Ambi, 213 A.D. 98; Kerr v. Tagliavia, 101 Misc.

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Rep. 614; 186 A.D. 893; 229 N.Y. 542; 254 U.S. 645.) Agreements of our citizens to submit future disputes to foreign tribunals of all kinds are still against our public policy and void. (Hilton v. Guyot, 159 U.S. 113; Johnston v. Compagnie Generale Trans-Atlantique, 242 N.Y. 387; Ritchie v. McMullen, 159 U.S. 235; Dunston v. Higgins, 138 N.Y. 70; Cowens v. Ticonderoga Pulp & Paper Co., 219 A.D. 120; 246 N.Y. 603; Loucks v. Standard Oil Co., 224 N.Y. 199; Meacham v. Jamestown, F. & C. R. R. Co., 211 N.Y. 346; Matter of Berkovitz v. Arbib, 230 N.Y. 261; Matter of Inter-Ocean Food Products, 206 A.D. 426; Kelvin Engineering Co. v. Blanco, 125 Misc. 728.)

O'BRIEN, J.

The complaint was dismissed on the merits and the judgment has been affirmed.

The following facts are alleged in the complaint and admitted in the reply: In the year 1925, at New York, defendants, who are citizens and residents of this State, contracted in writing for the sale and delivery to plaintiff within the United States of a quantity of zinc concentrates. By a clause in the contract the parties agreed that all differences arising thereunder should be 'arbitrated at London pursuant to the Arbitration Law of Great Britain.' Differences arose concerning an alleged failure to deliver in accordance with the terms of the contract and plaintiff served notice upon defendants at New York requesting them to concur in the nomination of a certain named individual or of some other resident of London as sole arbitrator. The notice also stated that in the event of defendants' failure to concur in the nomination of an arbitrator, plaintiff would apply to the High Court of Justice of England for such an appointment pursuant to the provisions of the Arbitration Act of 1889 (52 and 53 Vict., ch. 49). On defendants' failure to comply with this notice, plaintiff obtained from the King's Bench Division an order permitting him to issue a form of process which is described in the complaint as an originating

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summons. This process was served upon defendants at New York and it directed them to appear at a certain time and place in London before a master in chambers so that an arbitrator might be...

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