Samincorp South Am. Minerals & Merchandise Corp. v. Lewis

• fullCitation: Samincorp South Am. Minerals & Merchandise Corp. v. Lewis, 149 N.E.2d 385, 337 Mass. 298 (Mass. 1958)
• Decision Date: 08 April 1958
• Citation: 149 N.E.2d 385,337 Mass. 298
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: SAMINCORP SOUTH AMERICAN MINERALS & MERCHANDISE CORP. v. Reubin LEWIS et al.

Page 385

149 N.E.2d 385

337 Mass. 298

SAMINCORP SOUTH AMERICAN MINERALS & MERCHANDISE CORP. v. Reubin LEWIS et al.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Feb. 5, 1958.

Decided April 8, 1958.

Harold Rosenwald, Boston, for plaintiff.

Sheldon Newman, Boston, for defendants.

Before WILKINS, C. J., and SPALDING, WILLIAMS, COUNIHAN and CUTTER, JJ.

WILKINS, Chief Justice.

In this action of contract upon a foreign judgment, the plaintiff filed a motion for judgment on undisputed facts, supported by an affidavit. G.L.(Ter.Ed.) c. 231, § 59, as appearing in St.1955, c. 674, § 1. The defendants also filed an affidavit. From an order allowing the motion and ordering the entry of judgment for the plaintiff, the defendants appealed. G.L.(Ter.Ed.) c. 231, § 96.

The judgment was in the Supreme Court of the State of New York in and for the County of New York, and was based upon an arbitration award for breach of two written contracts whereby the defendant partners of Chelsea were to deliver automobile radiator scrap to the plaintiff, a New York corporation doing business in New York city. The controversy was whether the contracts had expired because of the plaintiff's failure to give shipping directions by February 28, 1955, there having been a change in export license requirements for metal scrap, and whether the defendants' refusal to deliver thereafter was a breach. Each contract contained the following: 'Arbitration: Any difference under this contract is to be settled by arbitration under the rules of the American Arbitration Association of New York. For the purposes of this arbitration, the laws of the State of New York shall apply.'

On April 6, 1955, the plaintiff mailed to the defendants a written demand for arbitration, dated April 5, setting forth the nature of the dispute, the amount involved, and the remedy sought, and specifying New York city as the place for arbitration. This demand the defendants received. Also on April 5, the plaintiff filed with the American Arbitration Association (hereinafter called the Association) copies of the demand and the contracts, and paid a fee, all as required by the Association's rules. The defendants stated in their affidavit that no notice of filing was received from the Association. Nevertheless, on May 14 and 20 the defendants filed answering statements denying the Association's jurisdiction. On May 12 the Association notified the parties that since the defendants had not indicated their choice for the place of arbitration within the time allowed, the arbitration would be held in New York city, as designated by the Association's arbitration committee. On May 14 the defendants' counsel by letter addressed to the Association requested that the arbitration be held in Boston. On July 20 the plaintiff mailed to, and on July 26 served on, the defendants a notice of intention to conduct arbitration pursuant to art. 84, § 1458, of the N. Y. Civil Practice Act. The defendants at no time served notice of a motion to stay the arbitration.

The Association appointed a member of the New York bar as arbitrator in accordance with its rules. On October 26, after due notice, a hearing was held in New York city, at which were present one of the defendants and the defendants' counsel. The arbitrator took the oath of office and proceeded to hear the proofs and contentions of both parties. The defendants' counsel stated that he appeared specially, and raised four objections to jurisdiction, which were taken under advisement. The arbitrator then proceeded to take evidence. When the defendants' counsel attempted to enter into the active hearing of the case, the arbitrator, over objection, ruled that active participation in the trial on the merits would constitute a waiver of their rights on the jurisdictional question. The defendants' counsel thereafter participated to some extent in the hearing on the merits.

On November 23, 1955, the arbitrator made an award, which, in accordance with the Association's rules, was delivered by mail under date of November 29 by the Association to counsel for the parties. The award was in the sum of $1,764.19.

On March 9, 1956, counsel for the plaintiff caused to be served by mail on counsel for the defendants a notice of a motion, returnable on March 23 before the Supreme Court of the State of New York in and for the County of New York, for an order confirming the award and directing the entry of judgment. This procedure was in conformity with N.Y.Civil Practice Act, art. 84, § 1461. On the return day the motion was taken under advisement, the defendants not appearing, and on April 6 the motion was granted. On April 9 judgment was entered against the defendants. No appeal was taken. See N.Y.Civil Practice Act, art. 84, § 1467.

The arbitration clause in the contracts in the clearest terms is both an agreement to arbitrate under the rules of the Association and a consent to the exercise of jurisdiction by the courts of the State of New York. There is no inconsistency between agreeing to arbitrate under the rules of the Association and agreeing to consent to the enforcement of an award by 'the laws of the State of New York.' The phrase last quoted is not to be given the narrow construction urged by the defendants. The phrase, 'laws of the State of New York,' is unqualified, and is obviously broad enough to embrace art. 84 of the Civil Practice Act. The contrary construction would place the parties in the position of entering into an agreement to make an unenforceable award, and would exclude from the operation of their agreement the law which is specifically applicable to arbitrations.

The defendants do not controvert the well established principle that jurisdiction may be conferred by consent. Harvey v. Fiduciary Trust Co., 299 Mass. 457, 467, 13 N.E.2d 299; Gilbert v. Burnstine, 255 N.Y. 348, 355-357, 174 N.E. 706, 73 A.L.R. 1453; Matter of Gantt (Hurtado & Cia.), 297 N.Y. 433, 79 N.E.2d 815. Restatement: Conflict of Laws, §§ 77(1)(d), 81. See Mittenthal v. Mascagni, 183 Mass. 19, 66 N.E. 425, 60 L.R.A. 812. But they raise a number of points in an effort to show that they have not in fact consented to the jurisdiction of the State of New York. Some of these points doubtless should have been raised in the arbitration proceedings or in the New York courts. We do not pause to cull them out, as all may be as briefly disposed of on the merits.

(a) The contention is made that the contracts do not provide for arbitration in New York and hence the defendants have not submitted to the jurisdiction of the New York courts in accordance with art. 84, § 1450, of the Civil Practice Act. By its rules, which are by reference made part of the contracts, the Association had power to fix the place of arbitration. The...