Bunge Corp. v. Perryville Feed & Produce, Inc., 66308
| Decision Date | 26 February 1985 |
| Docket Number | No. 66308,66308 |
| Court | Missouri Supreme Court |
| Parties | BUNGE CORPORATION, Appellant, v. PERRYVILLE FEED & PRODUCE, INC., Respondent. |
Stephen C. Wilson, Jackson, for appellant.
Dennis C. Brewer, Perryville, for respondent.
This case involves the constitutional validity of § 435.460, RSMo 1983 Supp., in a matter which is within the coverage of the Federal Arbitration Act, 9 U.S.C. § 1, et seq.
The plaintiff-appellant is a New York corporation. On July 15, 1983, the plaintiff entered into a contract to purchase from the defendant-respondent 500 bushel of # 1 yellow soybeans for a price of $6.48 per bushel. The soybeans were to be delivered to the plaintiff at Cairo, Illinois. The contract contained the following provision:
The terms of this confirmation are subject in all respects to the rules and regulations of the exchange, board, or association designated above. If the seller is not a member of the said exchange, board or association, then the rules and regulations of the National Grain and Feed Association shall govern. Buyer and Seller agree that all disputes and controversies between them with respect to this confirmation shall be arbitrated according to said rules and regulations, and that judgment may be entered on the arbitration award in any court of competent jurisdiction.
The plaintiff, on June 13, 1984 filed in the court below a pleading entitled "Application to Confirm Arbitration Award." It was alleged that the defendant failed to deliver the soybeans as required, that the plaintiff then sought arbitration in accordance with the rules of the National Grain and Feed Association, that the defendant refused to participate in the arbitration, and that a default award was rendered in favor of the plaintiff in the amount of $5,876.86. Judgment for that amount and costs was prayed for.
The defendant filed a Motion to Dismiss, alleging three grounds. The trial court overruled ground one, which asserted that the plaintiff should have brought an action to compel arbitration rather than proceeding to default, and ground three, claiming that the defendant was disadvantaged because the arbitration hearing was to be held in Washington, D.C., but sustained the motion on ground two, reading as follows:
2. The Plaintiff failed to give to the Defendant proper notice of arbitration, since the contract of the Plaintiff as shown on the Exhibit on the Plaintiff's application to confirm arbitration award did not contain the following language: "THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES." Contrary to Section 435.460 RSMo.1980. The defendant complained of a lack of notice but the Plaintiff proceeded to arbitration and claims to have obtained a default against the Defendant.
The plaintiff appealed directly to this Court inasmuch as the validity of a Missouri statute under the Supremacy Clause of the Constitution of the United States (Art. VI, Clause 2) is involved.
The contract between the plaintiff and the defendant, calling for the delivery by the Missouri defendant of soybeans to the plaintiff in Cairo, Illinois, is manifestly "a contract evidencing a transaction involving commerce" within the meaning of the Federal Arbitration Act, 9 U.S.C. § 1-14. 9 U.S.C. § 2 reads as follows:
A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.
The Federal Arbitration Act was adopted in 1925. As to transactions within its compass, it does away with the common law proposition that an executory agreement to arbitrate, as distinguished from an agreement to submit a particular dispute to arbitration, is unenforceable. With or without the Missouri statute, the defendant could be compelled to arbitrate a dispute under the soybean contract in accordance with the federal act. Cf. State ex rel. St. Joseph Light & Power Co. v. Donelson, 631 S.W.2d 887 (Mo.App.1982).
Missouri's arbitration act was adopted in 1980. (RSMo § 435.350-435.470). Prior to that time Missouri adhered to the common law rule of unenforceability of executory agreements to arbitrate. Jenks v. Jenks, 385 S.W.2d 370 (Mo.App.1964). The Missouri statute is based on the Uniform Arbitration Act as adopted by the Commissioners on Uniform State Laws, but it contains a provision not found in the Uniform Act, as follows:
Each contract subject to the provisions of sections 435.350 to 435.470 shall include adjacent to, or above, the space provided for signatures a statement, in ten point capital letters, which read substantially as...
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