12 N.Y.2d 409 | NY | 1963
The question on this appeal raises two issues: Does the Supreme Court have the power to consolidate two
On April 19, 1961 Symphony and Barbara entered into a contract whereby Symphony agreed to deliver 7,500 yards of fabric to Barbara, with delivery “ To start last week in May, 1961 Through July, 1961.” The fabric, described as “Silktura”, was to have a fiber content 83% acetate and 17% silk, and its width was to be “ 48"/50" off loom ”. On April 21, 1961 Symphony and Bernson entered into a contract whereby Bernson agreed to deliver “ about 25,000 yards ” of fabric to Symphony, with delivery to “ Start week May 22, 1961 thru July 1961 ”. The fabric was to meet the same specifications as the fabric in the Symphony-Barbara contract. The only two differences between the contracts were the price and the amount of fabric ordered. Both contracts contained broad arbitration clauses.
Upon manufacturing the fabric into dresses, Barbara allegedly discovered latent defects in the material which made it unsuitable for such use, and informed Symphony that it would be held responsible for any damage suffered by Barbara. Thereupon Symphony informed Bernson of the complaint concerning the fabric and stated ‘ ‘ we expect to hold you liable for any damages which we may be caused as a result thereof ”. Bernson rejected all liability and demanded prompt payment of the invoices. On November 27, 1961 Bernson instituted arbitration proceedings before the American Arbitration Association for the unpaid balance of the purchase price of the fabric. The answer of Symphony set up as a defense the unsuitability of the goods for the purpose for which they were sold, and counterclaimed for an award “ against Bernson Silk Mills, Inc. in the amount which our client is presently unable to calculate, representing the damages my client will be compelled to sustain because of the claims of its customers against it.”
On December 8, 1961 the Association forwarded to Bernson and Symphony a list of arbitrators, from which list they designated approved arbitrators in their order of preference and returned the list to the Association. Subsequently, in early January, 1962, Barbara instituted arbitration proceedings before the American Arbitration Association to settle its controversy with Symphony. By letter dated January 11, 1962,
There is no uncertainty in the courts below as to their power to direct a consolidation of arbitration proceedings, but merely divergences of opinion, depending on the facts before them, as to whether a substantial right of one of the parties would be thereby prejudiced. (See Matter of Adam Cons. Ind. [Miller Bros. Hat Co.], 6 A D 2d 515; Matter of Stewart Tenants Corp. [Diesel Constr. Co.], 16 A D 2d 895; Matter of Franc, Strohmenger & Cowan Co. [Designs by Stanley, Inc.], 14 Misc 2d 370.) The applicable statutes leave little room for argument. Arbitration is deemed a special proceeding (Civ. Prac. Act, § 1459) and special proceedings may be consolidated “ whenever it can be done without prejudice to a substantial right” (Civ. Prac. Act, § 96). The phrase, “ whenever it can be done without prejudice to a substantial right ’ ’, should not be read as qualifying the existence of the power, but rather as defining the limits of the court’s discretion in the exercise of the power. To state, as a matter of law, that the courts cannot direct a consolidation of arbitration proceedings where there is not an identity of parties would be a contradiction of this court’s construction that “ The purpose of section 96 is to eliminate technicalities, multiplicities of actions and delays and to protect substantial rights ” (Datz v. Economy Cotton Goods Stores, 263 N. Y. 252, 254).
The remaining question concerning the abuse of discretion turns upon whether the consolidation prejudices a “ substantial right ”.
It is the general rule that ‘ ‘ The burden of showing that some substantial right is in jeopardy rests upon the party objecting to the consolidation” (2 Carmody-Wait, New York Practice, p. 478). Obviously, the desire to have one’s action or special proceeding heard separately does not, by itself, constitute a “ substantial right ”. Why should it become a substantial right
Bernson having failed to meet the burden of showing prejudice, the court below properly exercised the discretion vested in it by statute.
The order appealed from should be affirmed, and the certified question is not answered.
Chief Judge Desmond and Judges Dye, Fuld, Van Voobhts, Foster and Scileppi concur.
Order affirmed, etc.