Plastic Molded Arts Corp., Application of

• Decision Date: 30 March 1960
• Citation: 200 N.Y.S.2d 858,23 Misc.2d 839
• Court: New York Supreme Court
• Parties: Application of PLASTIC MOLDED ARTS CORP., Petitioner, for an Order Restraining Certain Arbitration Attempted to be had by A & H Doll Mfg. Corp., Respondent, Before the Commercial Arbitration Tribunal of the American Arbitration Association.

Page 858

200 N.Y.S.2d 858

23 Misc.2d 839

Application of PLASTIC MOLDED ARTS CORP., Petitioner, for an

Order Restraining Certain Arbitration Attempted to be had by

A & H Doll Mfg. Corp., Respondent, Before the Commercial

Arbitration Tribunal of the American Arbitration Association.

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

March 30, 1960.

Order Affirmed June 21, 1960.

Stroock, Stroock & Lavan, New York City, for petitioner.

Zelman & Zelman, New York City, Irving P. Zelman, New York City, of counsel, for respondent.

ARON STEUER, Justice.

Petitioner, hereinafter called Plastic, is a manufacturer of dolls. Respondent, hereinafter called A & H, both makes and sells dolls. On October 30, 1950 these parties entered into a contract. The contract contained many provisions among them one whereby petitioner could sell dolls of the same type as that it was making for respondent and that respondent would be paid a commission on those sales. The contract expired by its terms on April 30, 1953. Thereafter the parties had several transactions. On these subsequent transactions Plastic in 1956 brought an action against respondent for goods sold and delivered. A & H pleaded several counterclaims based on the 1950 contract. Plastic moved to sever the counterclaims until arbitration was had in accordance with the terms of the contract. The motion was granted but in lieu of an order the parties entered into a stipulation. The stipulation had the following provisions: The action was discontinued. A & H paid Plastic the sum sued for less a small item that was withdrawn. The counterclaims were discontinued with prejudice but A & H reserved its rights to institute arbitration proceedings pursuant to the contract. Each party was given the right to a discovery and inspection of the other's books in regard to any claim asserted or to be asserted in the arbitration. The stipulation was dated July 13, 1956. On December 30, 1959 A & H served a demand to arbitrate. The subjects to be arbitrated are therein stated to be 1. commissions arising under the contract and 2. damages for the use and retention of certain molds from May 1, 1953 to April 19, 1956. Plastic has moved to stay the arbitration pursuant to Section 1458-a, Civil Practice Act.

This section provides that arbitration shall be stayed if at the time of giving notice of intention to arbitrate or making a demand to arbitrate the claim would be barred by an existing statute of limitations if such claim were asserted in court.

A & H advances several contentions to show that this statute is not effective to bar the operation. These may be listed as follows:

1. The statute having been enacted subsequent to the contract it can not affect an arbitration pursuant to the contract.

2. The claims to be arbitrated are not barred by the applicable statutes of limitations.

3. The stipulation constituted a new contract to arbitrate, and the period of limitations should be calculated from its date.

Taking these in order. It is true that a statute of limitations enacted after the accrual of a vested right can not operate to divest that right. But that is not the situation here. Here the statute merely codified and clarified the existing common law. It was the law that arbitrators could not consider issues barred by limitations (...