Wilson & Co. v. Fremont Cake & Meal Co., Civil Action No. 73 — 47.

CourtUnited States District Courts. 8th Circuit. United States District Court of Nebraska
Citation77 F. Supp. 364
Docket NumberCivil Action No. 73 — 47.
PartiesWILSON & CO., Inc. v. FREMONT CAKE & MEAL CO.
Decision Date23 March 1948

Yale C. Holland and Kennedy, Holland, DeLacy & Svoboda, all of Omaha, Neb., for plaintiff.

Maxwell V. Beghtol, J. Lee Rankin, John C. Mason, Kenneth E. Anderson, and Beghtol & Rankin, all of Lincoln, Neb., for defendant.

DELEHANT, District Judge.

In its complaint, the plaintiff, a Deleware corporation, demands judgment against the defendant, a Nebraska corporation, for more than three thousand dollars because of the defendant's alleged breach of a contract for its sale and delivery to the plaintiff of thirty-six tank cars of crude soybean oil, of which thirty cars were admittedly delivered and six cars were allegedly not delivered. The defendant has not yet answered; but before answer day has moved the court for an order under Title 9 U.S.C.A. § 3, to suspend further proceedings in this action pending arbitration in accordance with a provision of the contract which, it contends, requires the parties to submit their controversy to arbitration. It is that motion which, after submission upon the pleadings and certain affidavits, a stipulation, and documentary showings and exhaustive written argument of counsel, now has the court's consideration. It presents several interesting questions.

While the plaintiff challenges the applicability, it does not question the constitutional validity, of The United States Arbitration Act, Title 9 U.S.C.A., or of § 3 thereof relating to the staying of certain proceedings in the courts of the United States, pending arbitration. The denial of the constitutionality of the Act could not at this late date be seriously urged. Marine Transit Co. v. Dreyfus, 284 U.S. 263, 52 S.Ct. 166, 76 L.Ed. 282; Shanferoke Coal & Supply Corporation v. Westchester Service Corporation, 293 U.S. 449, 55 S.Ct. 313, 79 L.Ed. 583; The Anaconda v. American Sugar Refinery Co., 322 U.S. 42, 64 S.Ct. 863, 88 L.Ed. 1117. See also, without present repetition thereof or needless quotation therefrom, Kulukundis Shipping Co. v. Amtorg Trading Corporation, 2 Cir., 126 F.2d 978 for its analysis of the historical development of the attitude towards the arbitration function in English and American jurisprudence.

With the exception of some oblique aspersions in the briefs, the utility and the validity, apart from the congressional mandate, of the arbitration process in general has not undergone discussion. And that is appropriate, for no issue on either of those points is involved in this case. Nor does any appraisal of the virtues or vices of arbitration as such enter into the court's ruling.

The first dispute between the parties is whether there is in their contract any actual agreement to arbitrate. That is one of two primary and equally vital questions presented upon the record. The plaintiff denies that such an agreement was ever made. The contract must, therefore, be examined. It is set out in a footnote.1

Without resting any argument upon this factor, the plaintiff directs the court's attention to the verbal parsimony which the contract betrays, and to its execution for both parties to it by a single broker. Upon the latter point it need be said only that both parties to this action adopted the memorandum as their contract, the defendant delivered and the plaintiff accepted thirty car loads of oil under it, and the plaintiff's entire complaint rests upon its validity. And, so far as brevity is concerned, it is neither a virtue nor a vice, except as it may disclose or obscure the intent of the makers of an agreement.

The presently significant language of the contract is: "Rules National Soybean Processors Association." Those rules are shown in an exhibit attached to a stipulation in the files, generally entitled: "Year Book and Trading Rules, 1945-1946, National Soybean Processors Association." The trading rules governing the purchase and sale of soybean oil are seventeen in number, identified as Rules 101 to 117, both inclusive.2 Their text covers some fourteen pages of a printed booklet. Rule 115, dealing with arbitration, is in the following language:

"All controversies arising out of contracts made under these Trading Rules or the breach thereof, unless amicably adjusted otherwise, shall be settled by arbitration in accordance with the Rules, then obtaining, of the American Arbitration Association, and judgment upon the award rendered may be entered in the highest court of the forum, state or federal, having jurisdiction."

Another booklet presented in evidence by the stipulation includes the rules for arbitration of the American Arbitration Association, which are comprehensive and voluminous and provide a detailed program or procedure for arbitration. By the stipulation of the parties upon the submission of this motion, they agree that "they are the rules which would govern the arbitration requested by the defendant herein." Of that procedure, this court now says only that it is obviously operable. Whether resort to it is prudent, or desirable is beyond the proper scope of the present study.

That material includes all of the contractual provisions having any reference to arbitration. From a list of members of the Processors' Association it is shown that the defendant is, and the plaintiff is not, a member of the Association. Not as a part of the contract, but as an item of evidence, the defendant presents two letters to it, one written on December 5, 1946, by the plaintiff through the manager of its refinery department, the other on February 13, 1947, by an attorney in behalf of the plaintiff, whose authority is unquestioned. Both letters demanded delivery by the defendant of the then undelivered six tank cars of oil. The earlier of them, after recalling in detail the contractual basis of the defendant's obligation, contained this paragraph:

"The National Soybean Processors Association Rules, under which this contract was made and under which rules all settlements have been made for the oil you have shipped us, provide for arbitration, but in view of our past satisfactory relations with your company and your principals we certainly do not like to take any steps along this direction until all other means of arriving at an equitable settlement have been exhausted."

The later letter, written by the lawyer opens and closes with the following two paragraphs:

"Wilson & Co., Inc., whom I represent, has referred to me for attention its claim against you for failure to ship six tanks of Crude Soybean Oil as required by and due in accordance with the terms and provisions of the Marwood Contract No. 3437-W, dated August 10, 1945. You are, undoubtedly, familiar with the fact that this contract was made subject to the rules of the National Soybean Processors Association. * * *

"Upon your failure to take such action it is my intention to cause this matter to be submitted and settled by arbitration in the manner provided by Rule 115 of the rules of said National Soybean Processors Association, and thereafter, if necessary, to enforce such an award as contemplated by said rule."

Upon the history which at this point the action lays before the court, the conclusion that an agreement for arbitration was a part of the contract appears to be imperative. In saying which, the court frankly recognizes that in substantially comparable, though not identical, contexts, other courts have answered negatively the question of the existence of such an agreement.

The negation of the agreement rests heavily upon the history of a single controversy arising under the State Arbitration Law of New York which appeared on several occasions, and in different aspects, in the courts of that state. (1) In the Matter of the Application of General Silk Importing Co., 198 App.Div. 16, 189 N.Y.S. 391; (2) In re General Silk Importing Co., 200 App.Div. 786, 194 N.Y.S. 15, Order affirmed per curiam without opinion, 234 N. Y. 513, 138 N.E. 427; (3) In re Gerseta Corporation, 204 App.Div. 861, 197 N.Y.S. 378 (see also 200 App.Div. 890, 192 N.Y.S. 370). In the interest of brevity the cited opinions will now be referred to by the identifying numbers just assigned to them. In (1) the Importing Company sought an order under the New York Arbitration law, requiring Gerseta Corporation to proceed to arbitration of controversies that had arisen in connection with a contract whereby the Importing Company agreed to sell, and the Gerseta Corporation to buy one hundred bales of raw silk on designated terms. The contract contained the provision that "sales are governed by raw silk rules adopted by the Silk Association of America." One provision of such rules was: "All differences arising between the buyer and seller must be submitted to the arbitration committee of the Silk Association of America." Those rules further contained provisions erecting within the Raw Silk Division of the Association such a committee and sufficiently defining the scope and methods of its operations. The court affirmed an order denying the requested relief but with the reservation of leave to renew the request and held that the contract did not adequately provide for arbitration. In that connection it said:

"The only point here is whether this contract shows with sufficient definiteness that the minds of the parties met on this point, and that they intended to adopt the rules of the Silk Association of America, not merely to insure performance of the contract in accordance with those rules, but that, in the event of a controversy, it should be arbitrated in accordance therewith. The parties could have provided for such arbitration, without setting forth all or any of the rules of the Silk Association of America, if they had merely added, to the provision incorporated in the contract to the effect that the sales are to be governed by those rules, a provision that, in the event of a controversy between the parties, it should be...

To continue reading

Request your trial
13 cases
  • Robert Lawrence Company v. Devonshire Fabrics, Inc.
    • United States
    • U.S. Court of Appeals — Second Circuit
    • October 28, 1959
    ...346 U.S. 887, 74 S.Ct. 144, 98 L.Ed. 392; Petition of Prouvost Lefebvre, D.C. S.D.N.Y.1952, 105 F.Supp. 757; Wilson & Co. v. Fremont Cake & Meal Co., D.C. D.Neb.1948, 77 F.Supp. 364, affirmed 8 Cir., 1950, 183 F.2d 57. We, therefore, find federal law as derived from the Arbitration Act to b......
  • Necchi Sewing Machine Sales Corp. v. Carl
    • United States
    • U.S. District Court — Southern District of New York
    • November 17, 1966
    ...referable to arbitration, and then only by application to "the court in which such suit is pending."3 See Wilson & Co. v. Fremont Cake & Meal Co., 77 F.Supp. 364, 369 (D.Neb. 1948). Section 3 is therefore inapplicable in this Thus we must look to the general powers of the court sitting in e......
  • Warren Brothers Company v. Cardi Corporation
    • United States
    • U.S. Court of Appeals — First Circuit
    • January 11, 1973
    ...determined. Dolben is of doubtful relevance in this latter context. 6 We find the following language from Wilson & Co. v. Fremont Cake & Meal Co., 77 F.Supp. 364, 379 (D.Nebraska 1948), to be "Then, it is contended that there is nothing in the case upon which arbitration may be had, that th......
  • Wilson & Co. v. Fremont Cake & Meal Co.
    • United States
    • Nebraska Supreme Court
    • July 24, 1950
    ...no order upon the ruling of the court was signed by the parties or presented to the court for approval. See Wilson & Co., Inc. v. Fremont Cake & Meal Co., D.C., 77 F.Supp. 364. On July 19, 1948, Wilson & Company filed a motion to dismiss its action in the United States District Court. This ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT