Kulukundis Shipping Co. v. Amtorg Trading Corp.
Decision Date | 02 March 1942 |
Docket Number | No. 170.,170. |
Citation | 126 F.2d 978 |
Parties | KULUKUNDIS SHIPPING CO., S/A, v. AMTORG TRADING CORPORATION. |
Court | U.S. Court of Appeals — Second Circuit |
Edward Ash, of New York City (Charles Recht and David Drucker, both of New York City, on the brief), for respondent-appellant.
Charles R. Hickox, of New York City, for libellant-appellee.
Before L. HAND, CHASE, and FRANK, Circuit Judges.
Pursuant to the foregoing, the court entered an order that appellee recover from appellant the damages sustained, and referred to a named commissioner the ascertainment of the damages, to be reported to the court.
1. The errors assigned on this appeal by appellant (with an exception we shall discuss later) relate to the admissibility of certain letters, the weight and sufficiency of the evidence, and the credibility of witnesses. The letters, for reasons adequately stated in the district court's opinion, were properly admitted in evidence. There is no need in this opinion to discuss the other errors. We do not sit as triers of the facts. In the light of Admiralty Rule 46½, 28 U.S.C.A. following section 723, it is for the trial judge, not for us, after hearing the witnesses, to pass on the weight of the evidence, consider questions of credibility and make findings.2 In this case, as the findings are not clearly erroneous, we cannot disturb them. The Aakre, 2 Cir., 1941, 122 F.2d 469, 474 certiorari denied, Waterman v. The Aakre, December 8, 1941, 62 S.Ct. 360, 86 L.Ed. ___; Johnson v. Andrus, 2 Cir., 1941, 119 F.2d 287.
2. But there is an error assigned which is of a different character. The appellant, in its answer originally filed, pleaded that no contract had been made. No steps of any importance having meanwhile occurred in the suit, some nine months later and two months before the trial, it sought to amend its answer by including, as a separate defense, the fact that the alleged charter party upon which appellee was suing contained an arbitration clause, that appellee had not at any time asked appellant to proceed to arbitration, and that therefore the suit had been prematurely brought. This motion to amend was denied. If the amendment should have been allowed, the additional defense can now be urged.
The arbitration clause reads as follows:
In 1925 Congress enacted the Arbitration Act, U.S.C.A., Title 9. Pertinent sections of that statute read as follows:
Appellant admits — as it must — that the district court had jurisdiction to determine whether the parties had made an agreement to arbitrate.3 Appellant contends, however, that, once the court determined in this suit that there was such an arbitration agreement, the court lost all power over the suit beyond that of staying further proceedings until there had been an arbitration as agreed to;4 in that arbitration, argues appellant, the arbitrators will have jurisdiction to determine all issues except the existence of the arbitration clause. This jurisdiction, it is urged, is broad enough to permit an independent determination, by the arbitrator, that the contract itself is not valid or binding. Appellee asserts that the defendant had repudiated the charter-party, and that, therefore, the arbitration clause must be wholly disregarded.
In considering these contentions in the light of the precedents, it is necessary to take into account the history of the judicial attitude towards arbitration: The English courts, while giving full effect to agreements to submit controversies to arbitration after they had ripened into arbitrators' awards, would — over a long period beginning at the end of the 17th century — do little or nothing to prevent or make irksome the breach of such agreements when they were still executory.5 Prior to 1687, such a breach could be made costly: a penal bond given to abide the result of an arbitration had a real bite, since a breach of the bond's condition led to a judgment for the amount of the penalty. It was so held in 1609 in Vynior's Case, 8 Coke Rep. 81b. To be sure, Coke there, in a dictum, citing precedents, dilated on the inherent revocability of the authority given to an arbitrator;6 such a revocation was not too important, however, if it resulted in a stiff judgment on a penal bond. But the Statute of Fines and Penalties (8 & 9 Wm. III c. 11,...
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