Radiator Specialty Co. v. Cannon Mills

• Decision Date: 06 June 1938
• Docket Number: No. 4299.,4299.
• Citation: 97 F.2d 318,117 ALR 299
• Parties: RADIATOR SPECIALTY CO. v. CANNON MILLS, Inc., et al.
• Court: U.S. Court of Appeals — Fourth Circuit

117 ALR 299, 97 F.2d 318 (1938)

RADIATOR SPECIALTY CO. v. CANNON MILLS, Inc., et al.

No. 4299.

Circuit Court of Appeals, Fourth Circuit.

June 6, 1938.

Brock Barkley, of Charlotte, N. C. (I. T. Cohen, of Charlotte, N. C., on the brief), for appellant.

John M. Robinson, of Charlotte, N. C. (Hunter M. Jones, of Charlotte, N. C., on the brief), for appellees.

Before NORTHCOTT and SOPER, Circuit Judges, and HAYES, District Judge.

NORTHCOTT, Circuit Judge.

This is an action at law instituted in October, 1936, in the District Court of the United States for the Western District of North Carolina, at Charlotte, by Cannon Mills, Inc., a New York Corporation, and Manetta Mills, a South Carolina Corporation, here referred to as the plaintiffs, against Radiator Specialty Company, a North Carolina Corporation, here referred to as the defendant.

The object of the action was to recover the sum of $4,340.00, with interest, a balance alleged to be due from the defendant as purchaser of twenty thousand blankets, sold it, under a written contract, by the Cannon Mills as agents for Manetta Mills, the manufacturers of the blankets. The defendant filed an answer and also set up a counterclaim for $58,812.60 for alleged defects in the blankets. After the pleadings were made up the cause was set down for trial on April 13, 1937. On March 27, 1937, defendant filed a written motion for a continuance, which motion was granted by the court below on condition that the cause would be set down for trial as the first case to be tried at the next ensuing term of court at Charlotte, in October, 1937.

Upon call of the case in October, 1937, both sides having prepared for trial, without any previous notice to the plaintiffs the defendant moved for a stay of the trial in accordance with Section 3 of "The United States Arbitration Act," 9 U.S.C.A. § 3, 43 Stat. 883, alleging that the written contract under which the blankets were sold contained a provision that in the event any differences should arise the matters would be settled by arbitration. This motion was denied by the court and a trial was had before a jury which returned a verdict in favor of the plaintiffs. On this verdict a judgment was entered for the full amount claimed, and the defendant brought this appeal.

The sole question involved is whether the trial court erred in refusing to grant a stay of the trial as moved for by the defendant.

The arbitration statute in question reads as follows:

"Stay of proceedings where issue therein referable to arbitration. If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration."

Arbitration laws are passed to expedite and facilitate the settlement of disputes and avoid the delay caused by litigation. It was never intended that these laws should be used as a means of furthering and extending delays. Under the statute above quoted, it is clearly the intention of Congress to provide that the party seeking to enforce arbitration can do so only when not guilty of dilatoriness or delay. One having the...