MATTER OF LIPSCHUTZ (GUTWIRTH)

CourtNew York Court of Appeals
Citation304 N.Y. 58
Decision Date17 April 1952
PartiesIn the Matter of the Arbitration between Isidore Lipschutz et al., Appellants, and Albert Gutwirth, Respondent.

304 N.Y. 58

In the Matter of the Arbitration between Isidore Lipschutz et al., Appellants, and Albert Gutwirth, Respondent.

Argued January 25, 1952.Decided April 17, 1952


Leon Finley and David S. Meyer for appellants.

Max A. Gulack for respondent.

LOUGHRAN, Ch. J., LEWIS, DYE, FULD and FROESSEL, JJ., concur with CONWAY, J.; DESMOND, J., dissents for the reasons stated by the Appellate Division in its Per Curiam opinion.

[304 N.Y. 60]

CONWAY, J.

This is an appeal, as of right, from an order of the Appellate Division, First Department, unanimously modifying on the law and the facts an order of Special Term of Supreme Court, New York County, directing that the parties proceed to arbitration and appointing an arbitrator.

Appellants, Isidore Lipschutz and Charles Gutwirth, and respondent, Albert Gutwirth, nephew of Isidore and son of Charles, are parties to a partnership agreement. An arbitration clause in that agreement provides for the arbitration of disputes by three arbitrators — "the First Party [Isidore Lipschutz] shall select his arbitrator, and the Second and Third Parties [Charles and Albert Gutwirth, father and son] jointly shall select their arbitrator; and the two arbitrators shall thereupon select a third arbitrator. * * *"

Controversies arose between appellants and respondent due to the latter's alleged lack of concern for the welfare of the partnership. Pursuant to the arbitration clause Isidore demanded that the controversy be submitted to arbitration and designated his arbitrator. Albert and Charles could not, however, agree upon a joint arbitrator — due, among other things, to Albert's insistence that he be permitted to select an arbitrator independently since the interests of Charles and Isidore in the controversy

[304 N.Y. 61]

were identical and adverse to his. Upon motion made by appellants and pursuant to sections 1450 and 1452 of the Civil Practice Act, Special Term appointed a joint arbitrator for Charles and Albert and directed that arbitration proceed. That joint arbitrator together with the arbitrator selected by Isidore chose a third person as provided by the agreement of the parties. Respondent thereupon appealed to the Appellate Division which was of the opinion that because of the change in alignment of the partners, not contemplated when the agreement was entered into, the contract providing for arbitration "should be construed as though no method [for appointing arbitrators] were provided therein." (278 App. Div. 132, 133.) That court then entered an order appointing a single arbitrator and directing that arbitration proceed before such person.

The sole question presented on this appeal is whether, under the circumstances presented, it was error for the Appellate Division to disregard the provisions of the contract of the parties which provided for the settlement of disputes by a panel of three arbitrators, one of whom was to be selected by appellant Isidore.

Appellants contend that the Appellate Division, in appointing a single arbitrator, has rewritten the contract of the parties. Respondent, on the other hand, argues that the designation of a single arbitrator was a proper exercise of discretion, especially since appellants allegedly seek to deprive respondent of his interest in the firm.

The present statutory provisions regarding arbitration are to be found in article 84 of the Civil Practice Act (L. 1937, ch. 341, as amd.). The purpose of that article is to give effect to contracts providing for the settlement of disputes before tribunals of the parties' own choosing by rendering such agreements irrevocable and, in effect, subject to specific enforcement. The provisions of article 84 are intended to strengthen — not change — the rights and obligations of parties to arbitration agreements. The law "does not bring the contract into being, but adds a new implement, the remedy of specific performance, for its more effectual enforcement." (Matter of Marchant v. Mead-Morrison Mfg. Co., 252 N.Y. 284, 293.)

The spirit of the arbitration law being the fuller effectuation of contractual rights, the method for selecting arbitrators and

[304 N.Y. 62]

the composition of the arbitral tribunal have been left to the contract of the parties. Sections 1450, 1453, and 1462 of article 84 bear witness to the fact that the Legislature in enacting that article intended that the Supreme Court give due regard to the method and procedure prescribed by the contract of...

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55 practice notes
  • Graham v. Scissor-Tail, Inc., SCISSOR-TAI
    • United States
    • United States State Supreme Court (California)
    • February 5, 1981
    ...to the parties to the agreement when the arbitrator is chosen, will not disqualify the arbitrator from acting. In Lipschutz v. Gutwirth, 304 N.Y. 58, 61-62, 106 N.E.2d 8, 10, the Court said: 'The spirit of the arbitration law being the fuller effectuation of contractual rights, the method f......
  • Baby Boy C., Matter of
    • United States
    • United States Court of Appeals (New York)
    • June 14, 1994
    ...case and the complex relation of all the parties' " (Pomeroy's Equity Jurisprudence § 109; see also, Matter of Lipschutz (Gutwirth), 304 N.Y. 58, 63, 106 N.E.2d 8). Individualized judicial discretion and prudence are the proper limits and checks against overgeneralized remedies that wo......
  • Astoria Medical Group v. Health Ins. Plan of Greater New York
    • United States
    • United States Court of Appeals (New York)
    • March 29, 1962
    ...granting leave to appeal to us on certified questions. Since the order here involved is a final order (cf. Matter of Lipschutz (Gutwirth), 304 N.Y. 58, 106 N.E.2d 8; Matter of Delma Eng. Corp. (K & L Constr. Co.), 5 N.Y.2d 852, 181 N.Y.S.2d 794, 155 N.E.2d 675), 'there was neither need ......
  • Meehan v. Nassau Community College, No. 1
    • United States
    • New York Supreme Court Appellate Division
    • June 8, 1998
    ...Med. Group [Health Ins. Plan of Greater N.Y.], supra, at 137, 227 N.Y.S.2d 401, 182 N.E.2d 85; see also, Matter of Lipschutz [Gutwirth], 304 N.Y. 58, 106 N.E.2d 8; Matter of American Eagle Fire Ins. Co. v. New Jersey Ins. Co., 240 N.Y. 398, 148 N.E. 562). The law recognizes the practical re......
  • Request a trial to view additional results
55 cases
  • Graham v. Scissor-Tail, Inc., SCISSOR-TAI
    • United States
    • United States State Supreme Court (California)
    • February 5, 1981
    ...to the parties to the agreement when the arbitrator is chosen, will not disqualify the arbitrator from acting. In Lipschutz v. Gutwirth, 304 N.Y. 58, 61-62, 106 N.E.2d 8, 10, the Court said: 'The spirit of the arbitration law being the fuller effectuation of contractual rights, the method f......
  • Baby Boy C., Matter of
    • United States
    • United States Court of Appeals (New York)
    • June 14, 1994
    ...case and the complex relation of all the parties' " (Pomeroy's Equity Jurisprudence § 109; see also, Matter of Lipschutz (Gutwirth), 304 N.Y. 58, 63, 106 N.E.2d 8). Individualized judicial discretion and prudence are the proper limits and checks against overgeneralized remedies that wo......
  • Astoria Medical Group v. Health Ins. Plan of Greater New York
    • United States
    • United States Court of Appeals (New York)
    • March 29, 1962
    ...granting leave to appeal to us on certified questions. Since the order here involved is a final order (cf. Matter of Lipschutz (Gutwirth), 304 N.Y. 58, 106 N.E.2d 8; Matter of Delma Eng. Corp. (K & L Constr. Co.), 5 N.Y.2d 852, 181 N.Y.S.2d 794, 155 N.E.2d 675), 'there was neither need ......
  • Meehan v. Nassau Community College, No. 1
    • United States
    • New York Supreme Court Appellate Division
    • June 8, 1998
    ...Med. Group [Health Ins. Plan of Greater N.Y.], supra, at 137, 227 N.Y.S.2d 401, 182 N.E.2d 85; see also, Matter of Lipschutz [Gutwirth], 304 N.Y. 58, 106 N.E.2d 8; Matter of American Eagle Fire Ins. Co. v. New Jersey Ins. Co., 240 N.Y. 398, 148 N.E. 562). The law recognizes the practical re......
  • Request a trial to view additional results
1 books & journal articles
  • 28 USC s. 1782 IN AID OF FOREIGN ARBITRATION: 'A TRIBUNAL BY ANY OTHER NAME'.
    • United States
    • St. Thomas Law Review Vol. 34 Nbr. 1, September 2021
    • September 22, 2021
    ...N.Y.2d 275, 281, 157 N.E.2d 495 (1959); Potoker v. Brooklyn Eagle, Inc., 2 N.Y.2d 553, 558, 141 N.E.2d 841 (1957); Lipschutz v. Gutwirth, 304 N.Y. 58, 62, 106 N.E.2d 8 (59) See Am. Eutectic Welding Alloys Sales Co. v. Flynn, 399 Pa. 617, 620, 161 A.2d 364, 366 (1960) (referencing an arbitra......

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