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Hetherington & Berner Inc. v. Pine

decided.: May 20, 1958.

HETHERINGTON & BERNER, INC., PLAINTIFF-APPELLEE,
v.
MELVIN PINE & CO., INC., DEFENDANT-APPELLANT. HETHERINGTON & BERNER, INC., PLAINTIFF-APPELLEE, V. MELVIN PINE, MELVIN PINE & CO., INC., AND DISTRIBUTORS FORWARDING SERVICE CORP., DEFENDANTS-APPELLANTS.



Author: Lumbard

Before LUMBARD, WATERMAN and MOORE, Circuit Judges.

LUMBARD, Circuit Judge.

The two principal questions are, first, whether the District Court had jurisdiction to confirm an award of arbitration in favor of plaintiff where parties of diverse citizenship agreed to arbitration to be governed by the laws of New York and later agreed to arbitrate in New York after plaintiff had brought suit in the federal court; and second, whether the award, in referring to commissions on sales not yet made and an obligation to relieve defendant of any liability to a third party, was so indefinite and uncertain that it should be set aside.

We find that the District Court did have jurisdiction to confirm the award and that the award was sufficiently definite. Accordingly, it follows that all the orders of the District Court, including its order denying remand to the state court and its discharge of the bond given by plaintiff, were proper and they are affirmed.

The dispute arose when Melvin Pine & Co., Inc. (Pine & Co.) retained $176,912.32 received by it on January 11, 1957 as agent of Hetherington & Berner, Inc. (Hetherington) for the sale of road building machinery to Brazil. Just a few days before, on December 31, 1956, the contract between the parties under which Pine & Co. had acted as the exclusive export agency for Hetherington for over seven years and terminated by reason of notice given by Hetherington pursuant to the contract. Not until January 22 did Pine & Co. disclose to Hetherington that it had the money and it refused then to turn it over, as meanwhile it had asserted certain claims against Hetherington for the first time.

Hetherington, an Indiana corporation, thereupon commenced suit on January 24, in the Southern District of New York against Pine & Co. of New York, its president, Melvin Pine, a Florida resident, and Distributors Forwarding Service Corp. of New York,*fn1 alleging that Pine & Co. had $176,153.40 belonging to Hetherington which it refused to pay. On that same day Judge Weinfeld signed an order temporarily restraining the defendants from disposing of any of the funds pending a hearing. On January 28, the day before the date set for the hearing, Pine & Co. filed with the American Arbitration Association a demand for arbitration of its claims against Hetherington and mailed a copy to Hetherington.

The contract under which the parties had been acting until December 31, 1956 provided:

"Any controversy or claim arising out of, or relating to this contract or the breach thereof, shall be settled by arbitration in accordance with the Rules, then obtaining, of the American Arbitration Association, and judgment upon the award rendered may be entered in any Court having jurisdiction thereof."

"This agreement shall be deemed to be made under, and shall be governed by, the laws of the State of New York in all respects."

At the January 29 hearing on Hetherington's motion for a preliminary injunction, Pine & Co. served on Hetherington a motion to compel arbitration. Judge Weinfeld continued the restraining order and adjourned the hearing to February 1. At a conference in his chambers on the adjourned date the parties reached an agreement which was signed on February 6, and filed in the District Court.

The stipulation may be summarized thus:

1. That Pine & Co. was to pay Hetherington $113,000 before 5 P.M. the next day.*fn2

2. Pine & Co. agreed to post a bond for $35,000 in favor of Hetherington to secure repayment of any additional moneys which the arbitration might award Hetherington. Hetherington agreed to state in a letter that it would promptly pay whatever might be awarded Pine & Co.

3 and 4. Both parties agreed promptly to submit all disputes to arbitration under American Arbitration Association rules, all hearings to be held at ...


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