*1 misrеpre- oil which elements in which themselves not a case are This is as one transported used sented. interstate was product ingredients many finished in a Congress surely intended way food no resembled which in Food, Drug, and Cos may Oil lines. state which had crossed apply processed metic Act to to foods un- many varieties, but to come state, shipment within a inter after sophisticated oil blend consumer commerce, here. as was the case under- much like another. We applied The statute must be read mining legislative purpose the remedial broadly in order to effectuate its remedial deny protection we of consumer purpose. States, Cf. Kordel United v. articles power misbranded to seize 1948, 345, 349, U.S. 69 S.Ct. oil, ground as corn foods that such power L.Ed. 52. We have no doubt of the oil, soya oil peanut and olive oil bean protect public so to prod- “different constitute a when mixed respect been which have foodstuffs than all of less uct” from a blend shipped foreign in interstate and com any pure one of them. from a measure merce, Egg Hipolite see Co. v. United Urbuteit, Cf. United States v. States, 45, 57-58, 31 S.Ct. L.Ed. U.S. 55 L.Ed. cf. United States v. 61. Kahriger, 1953, 29-30 n. 97 L.Ed. reverse heavily, appellee did relies dismissing the order of the district court dismissing libel, Judge Foley the libel. Device An Article or United States v. Consisting (Gonsertron), of 31 Units D.C.E.D.Mich;1959, F.Supp. 52. considerably That has been limited ease the same dis- a more recent decision Ar- judge. An v. trict See United States Drug Consisting of 39 Cases
ticle of D.C.E.D.Mich.1961, 192 F.
(Korleen), any event, Supp. Gonsertron 51. distinguishable mislead- since the case EL HOSS ENGINEERING TRANS- ing aspect pamphlets which ac- CO., Ltd., PORT Petitioner-Appellee, companied related condemned device purportedly qualities remedial there to possessed AMERICAN INDEPENDENT OIL COM- apparatus, which one entire PANY, Respondent-Appellant. wholly assembled within had been No. Docket 26384. Michigan. separate None State United States Court of transported components which had been Second Circuit. commerce was in interstate misbranded? Argued assembling compo- Dec. labor of it was the nents, purportedly which when assembled April Decided electrotherapy device, constituted misrepresented. Here, how- misbranding ever, directly related percentage content the olive oil
shipped in interstate commerce. Con- may
gress’ assuring policy not extend to representations all re- consumer
garding up device food transported
components in interstate true, goes but it at least
commerce so him
far as to assure that the interstate *2 Taylor, Simon, City Scoll & New York (David Scoll, Simon, E. New Kenneth City, York counsel), petitioner- for
appellee. Lundgren, McDaniel, Lincoln & New City, York respоndent-appellant. CLARK, Before and WATERMAN Judges. FRIENDLY, Circuit WATERMAN, Judge. Circuit Engineering Transport Hoss & (El Hoss) petitioned Ltd. the United Clark, Judge, Circuit dissented. States District Court Southern York, pursuant District of New to Sec- Act, tion 4 of the Federal Arbitration 9 U.S.C. for an order Independent American Company Oil (Aminoil) disputes to submit certain allegedly provided arbitration as in the two Judge Bryan compelling issued an order (183 Aminoil to submit to arbitration F.Supр. 394) (1960) ap- and Aminoil peals. corpora
El Hoss is a Lebanese principal place tion with its of business Beirut, Lebanon. Aminoil Dela is a corporation principal ware place with its City. business New York alleged agreement which we con must strue involves and the commerce amount controversy $10,000. far exceeds juris the court below had petition. to entertain diction Bern Polygraphic America, hardt v. Co. 350 U.S. 76 S.Ct. L. Ed. 199.
Robert Lawrence Co. v. Devonshire Fabrics, Cir., Inc., 271 F.2d granted 362 U.S. 80 S.Ct. pursuant 4 L.Ed.2d dismissed 60, 1960, to Rule validity 5 L.Ed.2d holds that the interpretation of an must be determined substantive law of federal arbitration as expressed in the Arbitration Act.1 therefore, powers “We, hold the Arbitra commerce making rights tion Act to arbi that the thus created are to be ad- ‘valid, irrevocable, judicated by trate enforcеable’ the federal courts whenever jurisdic- created national such matter including diversity tion, cases, just constitutional under maritime price, performance Accord, Co. chase of Kinoshita & bonds and Petition coverage, etc., (American Corp.), insurance later Oceanic not from the days (14) Nave- Amicizia Societa fourteen comp gazione acceptance Iodine date Chilean Nitrate *3 Cir., any.”* Corp., 274 cer- 2 F.2d Sales 80 S. 363 tiorari denied expressly ap- acceptance This conditional Contra, Lum- Ct. L.Ed.2d plied agreement consisting “this Refining mus Commonwealth Oil Co. v. through sections one thirteen inclusive Cir., de- through in- attachments one seven 274, 5 nied totaling e., fifty-four pages”- clusive —i. 225. The for decision L.Ed.2d applied In- to the entire instrument. binding here is: Did the make part cluded wаs of the instrument disagreements as arbitrate contract to one, clause eleven the clause of section to which certain conditions whether provided arbitration: “subject” contract was any “11. the event of dis- complied with? between the here- In 1959 Aminoil distributed to as to the effectuation of this page upon prospective instrument which agreement, or there- pur bidders could bids fоr the tender of, agreement, or of Aminoil’s and con chase automotive party each undertakes to its use job equipment, and struction for the disagree- best efforts to said resolve providing transportation Am service ment without submission to arbi- require. proposed inoil to sell It However, tration. should such so- transportation equipment at valued impossible, lution nearly million dollars and further mutually hereto will select a ac- proposed equipment to lease this ceptable arbitrator whose decision at the successful bidder a substantial presented as to the matters himto signa by affixing Aminoil, rental. its shall be final. If the can- ture that of the successful bidder below arbitrator, on such an each provided purpose space on this shall nominate an arbitrator of its instrument, aсcept page 54 of the could select, choice and these shall turn signa However, below bid. this third, and the decision aof conditioning a clause ture line there was majority panel of this of three shall acceptance upon the bidder’s Aminoil’s be final as to all matters submitted. compliance with the conditions paragraph This shall not affect the agreement by providing guarantеes rights company to terminate covering purchase price, performance this protection: bonds and insurance paragraphs (3) three and four “subject compliance (4) (1).” of section one this conditions of as to guarantees court, relying The lower third endorsements Robert company Fabrics, Lawrence Co. in favor of the v. Devonshire cov Inc., supra, ering unpaid рur declared that installments on clause legal questions adjudicate types these two in- controver- the federal courts extricably affecting rights intertwined.” Law- other substantive sies Company Fabrics, jurisdiction rence v. Devonshire matter over the when Inc., body litigation F.2d at We hold exists. court determined lower created of procedural thus applicable. law of the forum was F. in charaсter it en- Supp. 394, pages questions interpretation at 399-400. compasses Under circumstances outlined therein that deci questions of as well as and construction proper. sion was revocability enforceability validity, * affecting original up- inter- of arbitration The entire instrument was in per affairs, throughout. maritime since case state commerce in- separable rest of the so con- from the clause was binding poses quite contract to ditioned. This different was a strument problem problem posed had arisen differences arbitrate cry Hoss, the successful fraud Here inducement. as bidder, litigation performed the acts there is no likelihood had of sham submitting Aminoil was bound. avoid El Hoss issues to arbitra- complete reading tion. A of the con- opinion that this are of the sought tract disсloses that Aminoil clusion that the arbitration protect being itself from bound separate from the rest of the agreement until the met bidder the con- Lawrence was was erroneous. Robert *4 initially ditions incumbent giant development step fed- in of a the meet. There is no reason in fact or in eral law of arbitration law for a frustration of this dem- pol- implementation federal in the propos- onstrated Aminoil intent. was encourages icy private resolu- the ing to sell a million dollars worth of disputes. Kulukundis tion of commercial transportation equipment and was fur- Amtorg Trading Shipping S/A proposing pur- ther to lease from its Cir., 1942, Corp., 2 985. equipment chaser the it had sold The aim of Robert Lawrence was purchaser agreeing pay and was a destroy frustration of the Arbitration substantial rental therеfor. Consider- litigant’s by cry Act inducement, of fraud in the a ing the size of the transaction it require a claim patently understandable that Aminoil adjudication every preliminary a obligations would choose to condition its cry the raised. ease where See contract, including obliga- its F.2d at con- we arbitrate, upon prior perform- tion to the cluded that it was consistent for by ance the bidder of basic financial among to arbitrate the issues guarantees. arising under their contract the issue fraud existed in the induce- here, We concern ourselves as the present Under the ment. circumstances courts concerned themselves situation, in the Robert Lawrence a con- Kinoshita, Lawrence and with ascertain- goods, tract the sale of the ing the intent of the from an agreed. werе found to have so There examination of the entire instrument allegation was no of fraud the in- by bound themselves and from the ducement of the arbitration clause of meaning language they used in cry the only but that was raised their proach ap- traditional —the as to the matter of the judges of common law when tract, goods, the sale of the and there- involving questions validity the or inter- agree- fore we found the arbitration pretation presented of contracts are separable ment was from the rest of judicial resolution. The agreement. the the cases differ three from each other. In Robert Lawrence there was no lan- This is not the situation before us guage considering obstacle to the arbi- present case. Aminoil made it separable tration reading clausе clause and to enjoyment by clear that the a bidder for encompass it so that it would the contractual fruits dispute entry as to whether into that and duties was conditioned on the bid contract was induced fraud. In Kin- prior performance prior der’s oshita & the Co. words of the arbitra- acts of that successful bidder. tion clause were readable so as not to Engineering Contracting See United & encompass an to arbitrate an Broadnax, Co. v. 136 F. cer issue of fraud in the inducement. In tiorari denied present the case the document 49 L.Ed. F. Berk W. integrated us is document Derecktor, where Co. v. 301 N.Y. including including Every every clause, pro- N.E.2d 914. the clause agree- “agrees” security deposit arbitration, both viding binds bank, specified ment drawn on carefully on conditioned hand, buyer, specified con- on the other prior performance of the payment. specified find “shall” make a down one of these ditions unambiguous construing Appel- clear and to be a Supreme Court arbi- late Division of separability of the to a obstacle court, of New York had held a divided remainder tration clause obligated buyer agreement, entire read the demonstrating (cid:127)perform intent the conditions clear when contract as signed that, there to arbi- ment was part on of both binding obligations mutually dispute reference trate contract, parties, includ- full both whether there was ing clause, im- became the arbitration conditions. these threshold mediately operative, Dep’t 1st Although Act Arbitration the U.S. In a A.D.2d 179 N.Y.S.2d favorably upon it does looks decision, memorandum N. Y. Court disregard par- not dictatе that we single judge dissenting, Appeals, agreements that contain ties’ contractual *5 Appellate without affirmed the Division outlining language the bound- specific Uraga certain parties comment. there were ar- intended to be of the areas aries performed by to be both acts bitrable areas. bargain. Appellate to the Division The intention, of is one “The interpreted have ob- to by tests the same ascertained to be ligated performance both gen- applied to contracts that are of these no indication acts. There is liberty erally. not at Courts construing we are that process construction to shirk Hoss, though bidder, the successful empire that of a belief by any was bound to Aminoil commit- beneficent, any more is arbitration perform ment on its to the сondi- they may if be- shirk it their Uraga Co., tions. Petition of Dock su- contrary. happens No to be the lief pra, by has never been followed duty to resort under a (cid:127)one is or, Appeals N. Y. Court of from our tribunals, how- conventional these by search, any of lower New York’s except processes, helpful their ever courts; etc., and Board of Education signified that he has to the extent Co., 1960, 476, v. Heckler Elec. N.Y.2d 7 willingness.” Mead- Marchant v. his 649, 666, 199 N.Y.S.2d 166 N.E.2d fol- Mfg. 1929, Co., 252 N.Y. Morrison 284, lowed in Board of Education etc. v. 386, (Car- 299, 391 169 N.E. 3, Inc., Dep’t Associates No. Bernard 2d C.J.). dozo, 1960, 1038, 140, 11 A.D.2d 206 N.Y.S.2d of the court the decision reverse We long range casts some doubt on its effect. below. In Heckler Elec. Co. the N. Y. Court of Although required apply are not Appeals decided that a failure to com- amiss for us to not be it will ply provision with the notice New argument it. After consider Law, precluded York Education 3813 § N. Court Lawrence the Y. in Robert us declaring arbitration, applica- Uraga Petition decided bility preliminary 3813 awas mat- 773, 1959, Co., 6 186 N.Y. N.Y.2d Dock ter for the court for it involved “a 669, 212 in which that 159 N.E.2d S.2d very condition Heckler’s faced situation where with a right to arbitration and the arbitrator’s contained the arbitra- contract that jurisdiction.” very 476, page 7 N.Y.2d at specified tion 649, 481, page 652, N.Y.S.2d at only fulfill- effective “shall become 666, majority at 668. The N.E.2d condi- realization” of certain ment and disapprove Uraga did Among conditions was one these tions. although dissenting opin- Co., hand, Dock builder, ggj Judge Froessel, compel proceed ion of 7 N.Y.2d Aminoil to to an arbi- 654, 166 relied tration. N.Y.S.2d N.E.2d it. We see no distinction would Reversed and remanded for further justify reaching results betweеn different proceedings not inconsistent with this arbitration opinion. case, statutory, whether or con- as in tractual, as here. CLARK, Judge (dissenting). Circuit majority my The decision is view decided did departure any disagreements undesirable from the lib to arbitrate policy eral arbitration performance enunciated El Hoss court in per- Lawrence Co. v. Devon- threshold acts it was Fabrics, Inc., Cir., shire adjudicаtion form. We hold that granted disagreements responsibility those is the court; L.Ed.2d inquiry dismissed 364 next di- and our discovering 5 L.Ed.2d rected whether El Hoss the New York courts in perform which, did in Petition of the acts if Uraga Dock performed, give right 6 A.D.2d 179 N.Y. it the to ob- S.2d affirmed 6 N.Y.2d tain a court order ques N.Y.S.2d N.E.2d arising disputes disagree- of all tion before us is not * * arbitra ments “as to the effectuation of good lawyer tion or bad or whether a * ** advising initially is wisе in his client ment.” sign agreement containing an' to prehensive com *6 arbitration clause. The findings No on this issue were question parties, is whether the device theory below, of made for the the lower agreement an of cepted have ac court them decision rendered unneces disputes, may to arbitrate future sary. Therefore, opportunity no has speedy a obtain and efficient substitute been accorded for trial the litigation in our crowded courts. present with reference thereto. The recognized As this court in Robert only of the sworn record consists affi Fabrics, Inc., Lawrence Co.v. Devonshire attorneys and the davits of the officers supra, clearly intended that respective parties, of the with the cor such substitute should be available. respondencе of the annexed as exhibits. Aminoil’s affidavits state that Under Section 4 of the Federal Arbi- performed. Act, party the conditions never tration U.S.C. to an § agreement spe- El Hoss’s affidavits sub can it arbitration obtain stantially through complied conditions, performance expedited with the cific practice, provided and that Aminoil’s actions it im motion there is no fully comply. possible substantial issue аs to whether the other appear party be issues would entered there into an to ar- per dispute question. to whether the conditions were “[U]pon as the bitrate being formed, making waived or excused. These is satisfied that the sues should davits, be determined on affi arbitration or the failure comply trial issue, but rather a full is not in therewith the directing had. See Alvado v. General Motors court shall make an order the Corp., proceed F.2d cer to arbitration in ac- denied with tiorari S. the terms of the cordance My Ct. L.Ed. 1497. We remand ment.” 9 U.S.C. 4. brothers and I trial court, cause for a full the issue as to how far differ in de- performed termining “making to whether El Hoss necessary arbitration,” conditions of it in of might consequences order consider the become should of de- and El could effective Hoss therefore fective the contract it- contract, but arbi- arable” from the rest upon effectiveness self strong separability rather make provision. conditions tration When construction, principle to be over- specifically attached language. giving only by express come provision, of certain such as grievance prior use of or the notice machinery, stated, I believе For the reasons above no is doubt there Uraga Co., supra, Dock Petition of these con- determine whether court must represents and should a sound view complied precedent have been ditions agree have I cannot been followed. pro- with before suggestion it is distin- with problem which arbitration. ceed to guishable, me on all for it seems to difficulty court is whether the has caused fours perceive Nor I with case here. can our compliance those with must also evaluate York have the New which constitute slight way some retreated gen- precedent to the contract ditions position departure taken. The there erally, expressly made but which are position York the New thus creates If conditions arbitration. gap federal and state law between into such matters intrudes regard I must direction where greatly performance, multiplies the ex- the immediate federal as erroneous. trend pense delay attendant arbitra- Judge Bryan’s I therefore determining Furthermore, tion. opinion persuasive below, reasoned and performance, adequacy the court D.C.S.D.N.Y., F.Supp. 394, dis- controversy ruling merits of the sent. thought field which businessmen, experts, is better left persons other class some judges juries. And the dis- since between tinction subsequent is seldom
and conditions drawn, party resisting arbitra- sorely tempted to tion invoke court
proceedings to determine whether cer- not in terms of contract are tain America, UNITED STATES precedent and whether a conditions Plaintiff-Appellee, complicated full trial is performance. issue GRAHAM,Defendant- Hazzell Appellant. in order to minimize the No. 13049. expensive proceed- likelihood arbitrability, ings determine Court of United States deciding questions should refrain Seventh Circuit. performance of substantive terms April except where re-
quired Those do so contract which have
terms conditions function precedent only to conditions be deemed obligation perform the substantive unless terms expressly duty in all cases Thus to arbitrate. involving adequacy dimly expressed not look to parties to determine “intent” “sep- clause is