Opinion
April 19, 1950.
Appeal from Supreme Court, New York County.
The mandatory arbitration clause in the contract between the parties is broad and unlimited covering any controversy or claim arising out of or in relation to the contract or the breach thereof.
Basically, the petitioner-appellant intends to raise the issue of respondent's good faith claiming that respondent acted on a premeditated purpose improperly to gain control of the business, its secret processes and key personnel so as to force appellant out and control the business for his own personal gain and that the demand for the purchase of the stock and steps toward ultimate dissolution were made in bad faith and were merely the climax of a whole series of improper acts to achieve respondent's ends. Each side denounces the other for gross misstatement of facts but the existence of disputes requiring a tribunal to determine them is obvious. The tribunal the parties voluntarily selected was the American Arbitration Association. With regard to the issue of dissolution, we should look to substance rather than to form. Whether the demand for the sale and the steps tending to dissolution were made in bad faith and as part of a plan to oust appellant from the business improperly, under the facts herein disclosed, should be issues for the arbitrators.
Many of the items as framed are improper; and items 1, 2, 3, 4, 8 and 9 should be struck from the notice. Items 5, 6 and 7, raising issues that in fact relate to respondent's lack of good faith, are issues for the arbitration board.
The order denying appellant a stay of the dissolution proceedings and the order granting respondent a stay of arbitration should be reversed, with $20 costs and disbursements to appellant, and stay of the dissolution proceedings should be granted, and the stay of the arbitration, as herein limited and defined, should be denied. Settle order.
Peck, P.J., Glennon, Dore, Cohn and Van Voorhis, JJ., concur.
Order denying appellant a stay of the dissolution proceedings and the order granting respondent a stay of arbitration unanimously reversed, with $20 costs and disbursements to the appellant, a stay of the dissolution proceedings granted, and a stay of the arbitration, as limited and defined in the opinion herein, denied. Settle order on notice.