suggesting that cancellation agreement may be set aside for coercion or duress only in an “action in equity brought for that purpose”
How later courts described this case
- suggesting that cancellation agreement may be set aside for coercion or duress only in an “action in equity brought for that purpose”
Written by the judges who cited it.
The opinion
Nolan, P. J.
(concurring). In a proceeding1 such as this the only issues which may be decided by the court are those which arise as to the making of the contract to arbitrate, and the failure to comply therewith. (Civ. Prac. Act, §§ 1450-1458.) Every other issue, whether of fact or law, if it is comprised within the agreement to arbitrate, is within the exclusive jurisdiction of the arbitrators. (Matter of Lipman [Haeuser Shellac Co.], 263 App. Div. 880, affd. 289 N. Y. 76 .) If any other issue exists, which is not comprised within the agreement to arbitrate, it may not be decided over objection, either by arbitrators (Matter of Lipman [Haeuser Shellac Co.], supra, Matter of Bullard v. Grace Co., 240 N. Y. 388 ) or by the court in an arbitration proceeding. (Cf. Matter of Worcester Silk Mills Corp., 50 F. 2d 966 .) If one of the issues to be determined is whether or not an agreement containing an arbitration clause has been cancelled, it must be determined by arbitrators if the language of the arbitration clause is sufficiently broad to express such an intention. (Matter of Lipman [Haeuser Shellac Co.], supra.) On the other hand, if, as in the instant case, a claim is made under such an agreement, and there is no dispute as to the fact that it has been cancelled and that all the parties have been released from their obligations thereunder, there are no issues relating to the agreement which remain to be decided, by arbitration or otherwise. (Cf. Matter of Kramer $ Uchitelle, Inc., 288 N. Y. 467 .) Arbitration may be resorted to only to settle controversies. If no issue of fact or law exists in relation to a matter sought to be submitted to arbitration, there is, obviously, no controversy to be settled, and the matter is not one which may be comprised within an agreement to arbitrate. (Civ. Prac. Act, § 1448.)
Respondent contends that a controversy has arisen as to whether or not the contract of June 16th was cancelled. This controversy, he asserts, should be settled by arbitration, since it is one which relates to that contract and the parties agreed to arbitrate any controversy or claim arising out of or relating to it. If that were the controversy to be settled, it could be settled only by arbitrators. The issue is not one which may be decided by the court in this proceeding, and it does fall within the broad provisions of the arbitration agreement. (Cf. Matter of Lipman [.Haeuser Shellac Co.], supra.)
It is apparent, however, that respondent has not correctly stated the issue to be determined. There is no dispute between *233 the parties as to the effect of the agreement of October 24th, if that is a valid agreement, and there can be no dispute that, unless that agreement is void or may be avoided, the contract of June 16th has ceased to exist and has no force or effect whatever. Respondent asserts that the agreement is void because it was induced by coercion and duress. As Mr. Justice Johnston has pointed out, that assertion creates no controversy which relates to the contract of June 16th. If any controversy exists by reason of that assertion it is one which relates solely to the agreement of October 24-th. Moreover, if the agreement of October 24th was induced by duress, it is not necessarily void. A contract obtained by duress is not ordinarily void but is merely voidable, and a party seeking to avoid such a contract must act promptly to repudiate it, and must return, or offer to restore, what he has received under it. (Oregon Pacific R. R. Co. v. Forrest, 128 N. Y. 83 .) Respondent must establish, therefore, before he may assert any claim under the contract of June 16th, not only that his later agreement was induced by duress, but also that he is entitled, under existing circumstances, to avoid it. Since these issues were not comprised within the agreement to arbitrate, they may not be decided by arbitrators, nor may they be decided by the court, in this proceeding. (Civ. Prac. Act, §§ 1450, 1458; Matter of Worcester Silk Mills Corp., 50 F. 2d 966 , supra.)
Sneed and MacCrate, JJ., concur with Johnston, J.; Nolan, P. J., concurs in separate opinion in which Sneed and Mao-Crate, JJ., concur; Adel, J., concurs with the following memorandum : Perforce the terms of the release agreement there is no existing agreement to arbitrate. The affidavit submitted on behalf of respondent is insufficient to tender to the court any issue as to the validity of the release.
Order denying petitioners’ motion to stay an arbitration proceeding reversed, with $10 costs and disbursements, and motion granted, with $10 costs.