Albrecht Chem. Co. v. Anderson Trading Corp.

• Decision Date: 03 March 1949
• Citation: 84 N.E.2d 625,298 N.Y. 437
• Parties: ALBRECHT CHEMICAL CO., Inc. v. ANDERSON TRADING CORPORATION.
• Court: New York Court of Appeals Court of Appeals

298 N.Y. 437

84 N.E.2d 625

ALBRECHT CHEMICAL CO., Inc.

v.ANDERSON TRADING CORPORATION.

Court of Appeals of New York.

March 3, 1949.

Appeal from Supreme Court, Appellate Division, First Department.

Proceeding in the matter of the arbitration between Albrecht Chemical Company, Inc., and Anderson Trading Corporation. From an order of the Appellate Division of the Supreme Court in the First Judicial Department, entered November 15, 1948, 274 App.Div. 923, 84 N.Y.S.2d 901, which unanimously affirmed an order of the Supreme Court at Special Term, Aurelio, J., entered in New York County, granting a motion by Albrecht Chemical Company, Inc., for an order directing that arbitration proceed under an asserted agreement between the parties, Misc. , 86 N.Y.S.2d 686, Anderson Trading Corporation appeals by permission of the Appellate Division.

Orders reversed and petition dismissed.

Burton S. Cooper, of Brooklyn, for appellant.

George M. Szabad, Joseph G. Blum and Herbert Goldenberg, all of New York City, for respondent.

FULD, Judge.

In May of 1948, Anderson Trading Corporation, as seller, and Albrecht Chemical Company, Inc., as buyer, arranged over the telephone for the sale and purchase of 10,000 pounds of a certain dye. Thereafter, Albrecht sent the seller two ‘purchase orders', each for 5,000 pounds of dye. In addition to describing the merchandise and specifying their quantity and price, each order bore on its face the notation ‘KINDLY SIGN AND RETURN ONE COPY FOR OUR RECORDS', and, on its reverse side, eleven separately numbered terms and conditions. One of these conditions provided for the arbitration of any controvesy or claim that might arise between the parties ( 11), and another recited that the ‘order and the terms and conditions thereof shall be deemed accepted’ by the seller if he should fail to advise the buyer to the contrary within ten days ( 9).

The seller neither signed nor returned the purchase orders. Instead, it sent its own memoranda of sale to the buyer, and in them made no reference to the buyer's purchase order or to any provision of it. About ten days later, on May 21st, Albrecht purchased a further quantity of the dye; on this occasion, the only document issued was the seller's memorandum of sale. During the course of the following month, Albrecht, complaining that the goods were defective, demanded that the matter be arbitrated as provided in its purchase order. Anderson refused to accede to the request, maintaining that it had never agreed to arbitrate.

The purchaser thereupon initiated the present proceeding. The court at Special Term, Misc. , 86 N.Y.S.2d 686, holding that the seller's explicit consent to arbitrate was unnecessary in view of its failure to indicate disagreement, directed arbitration, and the Appellate Division affirmed. 274 App.Div. 923, 84 N.Y.S.2d 901. We see no alternative but to reverse, for the seller never agreed or bound itself to arbitration.

In the first place, considering the affidavits which are before us, it may be that a contract was consummated by telephone, and, if that is so, nothing more need be said. Clearly, such an oral contract could not have created a binding agreement to arbitrate future differences, even if the parties had so intended. ‘A contract to arbitrate a controversy thereafter arising between the parties must’, the Civil Practice Act is explicit, ‘be in writing.’ Civil Practice Act, s 1449.

We go further, however, and hold that, even if the terms of the agreement were not finally fixed by the oral communications over the telephone and remained open to further negotiation, the subsequent written exchanges did not commit the seller to arbitrate. The buyer's purchase order was at best merely an offer or a counteroffer, and its retention by the seller without objection may not be deemed ratification of, or acquiescence to, the terms which it contained.

This follows from the settled rule that, where the recipient of an offer is under no duty to speak, silence, when not misleading, may not be translated into acceptance merely because the offer purports to attach that effect to it. See Matter of Tanenbaum Textile Co. v. Schlanger, 287 N.Y. 400, 404, 40 N.E.2d 225, 226;Poel v. Brunswick-Balke-Collender Co. of New York, 216 N.Y. 310, 318 et seq., 110 N.E. 619, 621;More v. New York Bowery Fire Ins. Co., 130 N.Y....