# Marchant v. Mead-Morrison Manufacturing Co.

> New York Court of Appeals · December 3, 1929 · 252 N.Y. 284

URL: https://www.frixlaw.com/law-library/cases/3627754

## Case

- **Full name:** In the Matter of Russell B. Marchant, as Trustee in Bankruptcy of Bear Tractors, Inc., Appellant and Respondent, Against Mead-Morrison Manufacturing Company, Respondent and Appellant
- **Court:** New York Court of Appeals
- **Decided:** December 3, 1929
- **Citations:** 252 N.Y. 284; 169 N.E. 386; 1929 N.Y. LEXIS 559
- **Precedential status:** Published
- **Opinion:** Dissent by Crane
- **Judges:** Crane, Cardozo
- **Cited by:** 212 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/3627754

## Opinion text

Crane, J.
(dissenting in part). With part of the opinion in this case I am in accord. Arbitration being the remedy in case of a breach of a contract, that remedy could be enforced in accordance with the Arbitration Law of the State of New York in the same way as other legal remedies would follow the procedure peculiar to this State. Thus a question triable before a jury in Massachusetts might be triable before a court without a jury in New York or
vice versa.
The parties having contracted to submit their differences to arbitration, each to appoint an arbitrator, and these two an umpire, the courts of New York, having jurisdiction of the parties, could appoint the third arbitrator, in accordance with the Arbitration Law, when the two selected had failed to do so. This was but a piece of machinery, a part of procedure .to arrive at a result contracted for by the parties. I, therefore, concur in so much of the opinion of the chief judge as deals with this point.
The arbitration clause reads as follows: “If for any reason any controversy or difference of opinion shall arise as to the construction of the terms and conditions of this contract, or as to its performance, it is mutually agreed that the matter in dispute shall be settled by
*306
arbitration, each party to select an arbitrator, and the two so selected to select a third, and the decision of the majority of such arbitrators given after a full hearing and consideration of the matter in controversy shall be final and binding upon the parties,” etc. These business contracts are not drawn with the precision of deeds or judgments. We must read them with that liberality of meaning which attaches to the laconism of business men. Controversies and differences arising out of the terms and conditions of the contract have reference to the meaning of the contract. This covers everything within its four corners. The performance of the contract does not arise out of its construction or meaning but out of its execution. The difference between the parties to this litigation arose out of the latter, that is, out of the failure to perform. Default was conceded. The dispute was over the damage. The question of loss arising from non-performance, in my judgment, was within the arbitration clause as above quoted, and became one of the matters for arbitration. To this extent I cannot follow the opinion. •
This, however, does not lead me to a reversal of the Appellate Division and an affirmance of the award. Although the evidence is not before us in the record, we have the report of the arbitrators, or the majority of them, from which it appears that they exceeded their authority in disposing of the defendant’s money. The contract called for the manufacture of five hundred tractors according to design represented by drawings and specifications to be furnished. The profits which might have been made in the sale of these tractors would be the ordinary measure of damages. Conceding that the arbitrators were not confined to the rigid rules of law and that they might consider losses consequent upon the expenditure made in preparation for the sale of the tractors, the housing of them or other like liabilities incurred — yet it is beyond all reason to charge up to
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the failure to get five hundred tractors the loss of the capital of the business. This is entirely too speculative as the capital might have been lost or impaired as well through the delivery of the tractors and the expense of disposing of them, as through failure to get them. For this reason I think the court was justified in setting aside the award.
Entertaining, as I do, however, this view of the case, my conclusion would be that the matter should be sent back for a new hearing before the arbitrators. To submit the question of breach of contract to arbitration, leaving the question of damages to be recovered in an action at law, is to multiply litigation not to lessen it; to complicate our procedure not to simplify it; to burden the business man not to relieve him. Arbitration has been heralded as a ready and speedy relief from the intricacies and delays of the law. We should, if possible, avoid making it another barrier to the settlement of disputes. The answer I know is that the parties have so contracted, to which I reply that to give the word
“
performance ” a narrow interpretation leading to these results is to construe the contract contrary to and not in accordance with the intention of the parties.
With this brief statement of my views I favor modifying the order of the Appellate Division by sending this controversy back for the ascertainment of damages.
Lehman, Kellogg and O’Brien, JJ., concur with Cardozo, Ch. J.; Crane, J., votes in memorandum to remit the controversy for the assessment of damages; Pound and Hubbs, JJ., vote to reverse the judgment so far as appealed from by the plaintiff and to reinstate the award.
Order affirmed and judgment accordingly.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/3627754. Public record. Not legal advice.