First Nat. Oil Corp. v. Arrieta
| Decision Date | 03 December 1956 |
| Parties | In the Matter of the Arbitration of Controversies between FIRST NATIONAL OIL CORPORATION, appellant, v. Rafael ARRIETA, Carmen Arrieta, Robert Arrieta, Margartia Arrieta, Joseph A. Lopez, Jr., and Holles A. Lopez, copartners doing business as Florida Molasses Company, respondents. |
| Court | New York Supreme Court — Appellate Division |
Monroe Collenburg, New York City, of counsel (Timothy P. Walsh, New York City, with him on the brief), for appellant.
Charles W. Hagen, New York City, of counsel (Richard A. Hagen, New York City, with him on the brief), for respondents.
Before NOLAN, P. J., and WENZEL, UGHETTA, HALLINAN and KLEINFELD, JJ.
In February of 1948 appellant entered into a written contract with respondents, a copartnership, which required appellant to transport in its named vessel a cargo of 9,500 tons of blackstrap molasses (10% more or less) in bulk, from a port or ports in Puerto Rico to Jacksonville, Florida. The contract is captioned 'Tanker Voyage Charter Party'. By agreement subsequently made, the stated vessel was replaced by another, the S. S. George Ogden.
After a voyage of four days out of Puerto Rico, the S. S. George Ogden arrived at Jacksonville on May 7, 1948 with the stated cargo, and the unloading operation began within the hour, by means of pumping the molasses through respondents' pipeline into their shore tank, using the ship's pump. The process continued until the night of May 10th, when respondents' representatives ordered it stopped because their tank had developed vibration due to pressure caused by air and foam in the tank. By that time, the entire tank was full, there being 25 feet of molasses and 5 feet of foam above that. During the pumping a considerable amount of molasses had been drawn from the tank into two smaller tanks and several tank cars. Considerable cargo loss ensued, consisting principally of molasses which remained in the ship and which was later dumped at sea because of lack of further storage facilities and inability to accomplish an immediate sale.
Thereafter, in pursuance of a provision in the charter party to arbitrate all differences and disputes arising therefrom, respondents' claim for this loss and for other incidental damages proceeded to arbitration before three arbitrators, each party appointing one, and the two thus chosen designating the third.
The arbitrators received the evidence which the parties presented and rendered an award in favor of respondents in the amount of $82,752.79.
Appellant then brought this proceeding to vacate the award on the grounds that the arbitrators had made obvious mistakes in determining the quantity of the molasses loss and in including a certain additional item of claimed damage, that the arbitrators were guilty of partiality toward respondents, and that the arbitrators had exceeded their powers and the award was invalid because one of the respondents, Joseph A. Lopez, Jr., had died after the submission of the matter to the arbitrators but prior to the making of the award, and nothing had been done pursuant to article 84 of the Civil Practice Act to substitute a representative of the deceased partner's estate as a party to the arbitration.
The Special Term rejected the claim of partiality and the contentions based on the omission to make a substitution in lieu of Lopez, but upheld the claim of obvious mistake in determining the quantity of the molasses loss, and on that ground vacated the award and remitted the matter to the same arbitrators for rehearing and reconsideration on the evidence which had been submitted to them and on such other relevant and material proof as might property be received on the rehearing.
Appellant, contending that the death of Lopez constituted a revocation and termination of the arbitration, and pursuing its position that the arbitration should proceed de novo before new arbitrators because of the claimed partiality, took this appeal.
By the express provision of section 1459 of the Civil Practice Act, arbitration of a controversy under a contract described in section 1448 of said Act 'shall be deemed a special proceeding'. Section 1448 describes the contract in question as one 'to settle by arbitration a controversy thereafter arising between' the parties to the contract. Accordingly, the arbitration here in question was a special proceeding, and the...
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