Pasch v. Chemoleum Corp.

• Citation: 26 Misc.2d 918,209 N.Y.S.2d 191
• Parties: In the Matter of the Arbitration of Certain Differences Between A. J. PASCH, as Chairman of the East Coast Colombia Conference, and CHEMOLEUM CORPORATION.
• Decision Date: 11 October 1960
• Court: New York Supreme Court

Page 191

209 N.Y.S.2d 191

26 Misc.2d 918

In the Matter of the Arbitration of Certain Differences

Between A. J. PASCH, as Chairman of the East Coast

Colombia Conference,

and

CHEMOLEUM CORPORATION.

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

Oct. 11, 1960.

Casey, Lane & Mittendorf, New York City (John R. Mahoney, David Orlin, Roger H. Lloyd, New York City, of counsel), for petitioner.

Lyman Stansky, New York City, for respondents.

JOHN L. FLYNN, Justice.

Application is here made in separate proceedings commenced by petitioner against each respondent for orders directing that arbitration proceed pursuant to contract entered into by the parties. The issues in each case are identical and accordingly the two applications will be considered together.

A single answer on behalf of both respondents was heretofore filed, and, following oral argument, date was fixed for the exchange and filing of memoranda of law. Respondents thereafter moved for leave to amend their answer and for an extension of the time limited for the filing of memoranda. Such motion is now disposed of as follows: The motion in branch to amend is granted and the proffered answer annexed to the moving papers will be deemed the amended answer of respondents. The motion in branch for an extension of time within which to submit memoranda is denied. In point of fact, extensive memoranda have been exchanged and submitted and no useful purpose will be served by delaying a disposition of the principal applications consequent upon a further exchange of memoranda.

Petitioner is chairman of an unincorporated association known as East Coast Colombia Conference, a voluntary association of steamship lines operating between Atlantic and Gulf ports of the United States and ports on the east coast of Colombia. Since 1944 the Conference has offered to shippers what has been called a 'dual rate contract arrangement' or 'exclusive patronage contract' whereby a shipper who elects to become a signer undertakes to ship exclusively by vessels of the Conference members and in return receives a lower freight rate than is afforded to non-signers. Such contract was executed by respondent Chemoleum Corporation in 1952 and by respondent Axon Corporation in 1958. The contracts provide for automatic renewal from year to year unless terminated by prior written notice of cancellation effective on expiration of the yearly term, and each contains an arbitration provision reading as follows:

'Any and every dispute arising out of, or relating to, this agreement or the breach hereof shall be settled by arbitration in New York, N. Y. under the laws of the State of New York and the Arbitration Rules of the Chamber of Commerce of the State of New York.'

Petitioner charges each respondent with breach of the contract in having shipped over lines not members of the Conference, and claiming damage, demands that arbitration proceed in accordance with the provisions of the agreement. This is resisted by respondents upon various grounds hereafter considered.

Preliminarily, respondents allege as a first defense that 'Petitioner lacks legal capacity to institute this proceeding as he is neither president nor treasurer of the East Coast Colombia Conference.' The defense is without merit. It appears that East Coast Colombia Conference does not have any officer denominated 'president' or 'treasurer'. However it does have a presiding officer denominated 'Chairman', who exercises all the functions usually exercised by a president and who in fact is the chief executive officer of the association. The term 'chairman', in this instance, is equivalent to the term 'president', and I hold there is a sufficient compliance with section 12 of the General Associations Law (Hatheway v. American Mining Stock Exchange, 31 Hun 575; New York Board of Fire Underwriters v. Whipple, 36 App.Div. 49, 55 N.Y.S. 188; Application of Burns, 200 Misc. 355, 108 N.Y.S.2d 62).

Respondents contend 'the alleged agreement is illegal, void and unenforceable by reason of duress'. There is no showing of evidentiary facts and the bald assertion of duress standing alone is insufficient to raise an issue as to the existence of a valid contract (Civil Practice Act, § 1450; Application of Minkin, 279 App.Div. 226, 108 N.Y.S.2d 945, affirmed, Minkin v. Halperin, 304 N.Y. 617, 107 N.E.2d 94; McNamara v. Doubleday, 270 App.Div. 645, 62 N.Y.S.2d 369; Manno v. Mutual Health & Accident Ass'n, 18 Misc.2d 80, 187 N.Y.S.2d 709).

Respondents also contend that the agreement lacks 'mutuality' and 'consideration', that the Conference members were not obligated by the contract to accept any shipment whatever. I find no merit in this contention. There is clear expression in the agreement of the promise of the shipper to ship during the term of the contract exclusively by vessels of the Conference members, and an equally clear expression of the reciprocal promise of the Conference to afford the shipper the benefit of a lower freight rate than would be afforded to non-signers.

Plainly implied and inherent in the contract is a promise to provide carriage for such shipments as may be tendered if space be available. 'Every detail of a contract need not be specifically expressed. The law takes a brokader view of what must be contained in a contract. All the circumstances which go to make up this contract are instinct with an obligation to purchase, even though it may be imperfectly expressed.' Ehrenworth v. George F. Stuhmer & Co., 229 N.Y. 210, 219, 128 N.E. 108, 110. I conclude, therefore, the agreements lack neither mutuality nor consideration (Ehrenworth v. George F. Stuhmer & Co., supra; Edison Electric Illumination Co. v. Thacher, 229 N.Y. 172, 128 N.E. 124; Wood v. Lucy, Lady Duff-Gordon, 222 N.Y. 88, 118 N.E. 214).

It is further claimed 'the Federal courts are clothed with exclusive jurisdiction pursuant to the Constitution of the United States' and that the remedy of arbitration 'is not applicable to disputes within the admiralty and maritime jurisdiction of the United States courts.' In urging this contention respondents rest upon the holding of the Court of Appeals of this state in Red Cross Line v. Atlantic Fruit Co., 233 N.Y. 373, 135 N.E. 821. However, on appeal to the Supreme Court of the United States that holding was reversed (Red Cross Line v. Atlantic Fruit Co., 264 U.S. 109, 44 S.Ct. 274, 68 L.Ed. 582). There Mr. Justice Brandeis, speaking for the court, said (264 U.S. at page 124, 44 S.Ct. at page 277):

'A state may not provide a remedy in rem for any cause of action within the admiralty jurisdiction. The Hine v. Trevor, 4 Wall. 555, 18 L.Ed. 451; The Glide, 167 U.S. 606, 17 S.Ct. 930, 42 L.Ed. 296. But otherwise, the state, having concurrent jurisdiction, is free to adopt such remedies; and to attach to them such incidents, as it sees fit. New York, therefore, had the power to confer upon its courts the authority to compel parties within its jurisdiction to specifically perform an agreement for arbitration, which is valid by the general maritime law, as well as by the law of the state, which is contained in a contract made in New York and which, by its terms, is to be performed there.'

A similar contention was advanced in Matter of First National Oil Corp. (Arrieta), 2 Misc.2d 225, at page 228, 151 N.Y.S.2d 309, at page 311, affirmed 2 A.D.2d 590, 157 N.Y.S.2d 313, appeal dismissed 2 N.Y.2d 992, 163 N.Y.S.2d 604, wherein it was said:

'* * * the respondents contend that only the District Court of the United States for the District wherein the arbitration was held has jurisdiction. It is clear, however, that by virtue of the Saving to Suitors Clause contained in Section 1333 of Title 28 of the United States Code, that this court has concurrent jurisdiction with the United States Courts in arbitration proceedings, notwithstanding that they arise out of so-called maritime contracts'.

See also Cocotos Steamship of Panama, S. A. v. Hugo Neu Corporation, D.C., 178 F.Supp. 491, to the same effect.

The contracts at bar were made in New York and the arbitration provision therein contained provides for arbitration 'in New York, N. Y., under the laws of the State of New York, and the Arbitration Rules of the Chamber of Commerce of the State of New York'. The making of a contract for arbitration which provides for arbitration in this state is deemed a consent of the parties to...