New York Central R. Co. v. Erie R. Co.

• Decision Date: 18 January 1961
• Citation: 30 Misc.2d 362,213 N.Y.S.2d 15
• Parties: In the Matter of the Arbitration of Controversies between NEW YORK CENTRAL RAILROAD COMPANY, Petitioner, and ERIE RAILROAD COMPANY, Respondent.
• Court: New York Supreme Court

Page 15

213 N.Y.S.2d 15

30 Misc.2d 362

In the Matter of the Arbitration of Controversies between NEW YORK CENTRAL RAILROAD COMPANY, Petitioner, and ERIE RAILROAD COMPANY, Respondent.

Supreme Court, Special Term, New York County, Part I.

Jan. 18, 1961.

Gerald E. Dwyer, New York City (Jerome H. Shapiro and William R. Johnston, New York City, of counsel), for petitioner.

Davis, Polk, Wardwell, Sunderland & Kiendl, New York City (J. Roger Carroll and Peter Fleming, Jr., New York City, of counsel), for respondent.

MATTHEW M. LEVY, Justice.

The New York Central Railroad Company seeks an order, pursuant to section 1450 of the Civil Practice Act, to compel The Erie Railroad Company to proceed to arbitration of a certain controversy in accordance with a clause allegedly providing therefor, contained in a trackage agreement made in 1897 between the petitioner's predecessor company (hereinafter called Central) and the respondent (hereinafter called Erie).

Under that contract, Erie was granted certain trackage rights and facilities in the operation of its trains upon Central's tracks between Corning, New York, and Newberry Junction, Pennsylvania, in consideration for which Erie agreed to pay Central a specified percentage of Erie's earnings resulting from the run in question. Erie agreed, too, that it would supply its own crew of classified employees in the operation involved. Somewhat more than a decade later--best fixed on this submission as 1909--these jobs were, and have continued to be, filled by Central's crewmen, with Erie paying the wages. There was no written agreement as to such new arrangement, and very little seems to be known in respect of it, except that it was a condition accepted by the parties in pursuance of a ruling of the engineers' labor organization to the effect that this workright belonged to the employees of Central.

In 1948, some of the conductors and brakemen employed by Central (117 in number) filed wage claims before the National Railroad Adjustment Board for time 'held-away-from-home terminal' while engaged in operating Erie's trains on the Corning-Newberry Junction run. The claims were directed against Central and Erie was not permitted by the Board to appear in opposition. On June 30, 1948, the Board made an award in favor of the claimants, which Central paid. Subsequent thereto, additional claims (9,181 in number) were filed by Central employees for somewhat similar relief. Payment thereof was discussed between Erie and Central. Central took the position that the previous award required payment of the later claims, even though they had not been before the Board at the time it rendered the award. Erie objected to such payment and requested further action on the part of Central. Central rejected such procedure and voluntarily paid the claims, the sum eventually totaling $51,569.09. A bill for that amount was sent to Erie by Central in August 1950. Payment thereof was refused by Erie. There was some effort at adjustment thereafter, particularly in the year 1952. The matter then became quiescent. However, some years later--February 25, 1957--Central, in writing, made what it contends was a demand for arbitration. This demand was rejected by Erie in writing on May 3, 1957. On September 1, 1959, Central served the present petition to compel arbitration. Central claims the right to be reimbursed and urges that Erie's disagreement as to that right comes within the purview of the 1897 agreement, which provides for arbitration in paragraph 'Ninth' thereof as follows:

'In case of any disagreement betweent he parties hereto as to the true construction or meaning of any of the provisions of this contract, or as to the rights of either party hereunder, or any claim by either party arising hereunder * * *, such * * * matters of disagreement shall be submitted for arbitration to a tribunal consisting of three disinterested persons, constituted as hereinafter provided.'

The term of the 1897 contract was to expire June 30, 1903, but apparently it has been continued in force and effect without written stipulations therefor until the present time. The continued existence of the agreement is conceded by Erie. Erie's opposition to arbitration is principally upon two grounds--that the matter in dispute does not come within the scope of the arbitration clause contained in the contract, and that, even if it did, Central's demand for arbitration is not timely.

In support of its first contention, Erie points out that the operation of Erie's trains by Central's crewmen on the particular trackage involved and the payment of the crewmen's wages were not provided by the specific terms of the contract in question, but by an 'unwritten agreement' separate from and long subsequent to the original contract, and that no provision for arbitration was provided therefor--and hence the dispute is not governed by the arbitration clause. In support of its argument on this point, Erie presents a number of general legal precepts: The party petitioning the court for an order to compel arbitration has the burden of proving that a contract exists clearly calling for arbitration of the particular disagreement submitted (Matter of Layton-Blumenthal, Inc. [Jack Wasserman Co., Inc.] 280 App.Div. 135, 111 N.Y.S.2d 919). No one is under a duty to arbitrate unless by clear language he has agreed to do so. It is not enough to establish the existence of any agreement to arbitrate; the contract must be to arbitrate the precise matters as to which the arbitration is sought (Lehman v. Ostrovsky, 264 N.Y. 130, 132, 190 N.E. 208, 209; Matter of Eagar Construction Corp. [Ward Foundation Corp.], 255 App.Div. 291, 7 N.Y.S.2d 450). One cannot be directed to arbitrate unless it is found that the parties have agreed to arbitrate (Matter of Spectrum Fabrics Corp. [Main Street Fashions, Inc.] 285 App.Div. 710, 139 N.Y.S.2d 612, affirmed 309 N.Y . 709, 128 N.E.2d 416). The court cannot impose such an agreement upon the parties (Kallus v. Ideal Novelty & Toy Co., 292 N.Y. 459, 55 N.E.2d 737).

I go along with the propositions of law as thus generally stated by Erie. It is when they are sought to be applied to the facts in the instant case that difficulties are encountered. Some of these I shall now consider.

The modification with respect to the use of Central's instead of Erie's employees is referred to by Erie as an 'unwritten agreement'. There is no basis for this appellation. In the first place, there is no proof before me sufficient even to warrant a hearing on the claimed issue as to whether there was an oral contract in 1909, as asserted by Erie. Of course, if in fact there were such a later separate and distinct agreement between the parties, entirely unrelated to the contract of 1897, the arbitration clause contained in the first contract would not, without adequate reference or incorporation, be held to apply to controversies arising under the second contract (see Kramer v. Dreyfus & Co., 25 Misc.2d 594, 207 N.Y.S.2d 29). But that is not this case. Who should do the work on the Corning-Newberry Junction run was expressly provided for in the Trackage Agreement. It was there provided that the work was to be done by the Erie employees. Since, for whatever reason, the work was undertaken thereafter by the Central employees, the only question here involved is which contracting party was to pay for the services of such employees. For the answer to that question we must look to the basic agreement. That agreement--although of comparatively ancient vintage--is concededly in full force and effect. Therefore, any accepted performance thereof which deviates from its written provisions is, nevertheless, a performance under that agreement. The jurisdictional issue as to which personnel should thereafter perform the services on this run--and as to who should pay therefor--was not unrelated to the written provisions in the 1897 Trackage Agreement. I cannot, upon this submission, agree to the thesis, that the fact that there was a switch of crewmen constitutes a different agreement, rather than only a modification as to performance by action and acceptance. I hold, therefore, that the basic 1897 agreement still pertains and that it embraces the matters here involved. The only sense in which what was done in 1909 was a contract is that it involved an agreement to accept performance under the contract in a mode other than as written in the contract. Viewed in that light, it is clear that the resolution of the controversy is one for the arbitral tribunal as set up in the agreement (Matter of Lipman [Haeuser Shellac Company, Inc.], 289 N.Y. 76, 43 N.E.2d 817, motion for reargument denied 289 N.Y. 647, 44 N.E.2d 620; see Matter of Minkin [Halperin], 279 App.Div. 226, 108 N.Y.S.2d 945, affirmed 304 N.Y. 617, 107 N.E.2d 94; Matter of John E. Potter Co., Ltd. [Miles Metal Corp.], 2 Misc.2d 515, 517, 149 N.Y.S.2d 641, 643, affirmed 2 A.D.2d 816, 155 N.Y.S.2d 775).

So, also, the impact of the award of the National Railroad Adjustment Board--whatever it may be--would involve only its interpretation and applicability against the backdrop of the 1897 agreement as construed. The Board's decision created no new relationship. That only Central and not Erie was permitted to oppose the initial claims before the Board, is irrelevant to a disposition of the issue before me. And the Board's holding that the 1897 Trackage Agreement 'has no bearing on the employees of the New York Central Railroad Company', is not binding upon me in any way in determining the question as to whether an arbitrable dispute here exists.

The arbitration clause is expressed in sweeping terms, covering 'any disagreement between the parties hereto as to the true construction or meaning of any of the provisions of this contract, or as to the rights of either party hereunder, or any claim by either party arising hereunder.' While there is no question in my mind that this clause,...