In re Exeter Manufacturing Co.

O’Malley, J. The question to be decided is whether, under the circumstances presented, a party may defeat a motion to compel arbitration by setting up the provisions of section 85 of the Personal Property Law (Statute of Frauds). The petitioner, by nine transactions, sold to the respondent certain textiles of the value in each sale of more than fifty dollars. The sales were made by petitioner’s salesmen personally or by tele [497] phone and were confirmed by written standard forms of sales notes of the petitioner, mailed to the respondent. These sales notes were retained by the respondent without objection. Thereafter, the petitioner charged respondent’s account with the merchandise and mailed invoices therefor, informing the respondent that the goods were being held for shipping instructions. These invoices also were retained by respondent without objection. The respondent, however, did not sign or return copies to the petitioner. On six of the transactions the respondent accepted delivery and / paid the price. With respect to three other transactions, however, Í which are here directly concerned, the respondent failed and j neglected to give shipping instructions or to pay the invoices on the / due date. The petitioner asserts that respondent failed so to do( because of a falling market. The sales notes signed by petitioner, but not by respondent, contained a provision that any controversy arising under, or in relation to, the particular contract should be settled by arbitration. When the respondent refused to submit to arbitration, the present proceeding to compel him so to do was instituted. Special Term denied the motion upon the ground that the agreements violated the Statute of Frauds and that arbitration would be academic, assuming that a contract to arbitrate existed. In this jurisdiction arbitration is now governed by article 84 of the Civil Practice Act. By section 1448 thereof it is provided that parties may contract to settle by arbitration a future controversy and that this contract “ shall be valid, enforceable and irrevocable, save upon such grounds as exist at law or in equity for revocation of any contract.” (Italics ours.) Other exceptions are not here material.' The Statute of Frauds here involved is not a ground at law or in equity for the “ revocation ” of a contract; nor does it make a contract within its purview void, but merely unenforcible. It is a rule of evidence. This was true under the old statute which made such a contract void. (Crane v. Powell, 139 N. Y. 379.) Moreover, the statute merely provides that under certain circumstances a contract to sell or a sale of any goods shall not be enforcible by action. On a motion to compel arbitration the only contract with which the court is directly concerned is, therefore, the “ contract to settle by arbitration.” It is as to that specific agreement that a preliminary issue as to its existence may be raised under section 1450 of the Civil Practice Act. [498] The provisions of section 1449 of the Civil Practice Act with respect to arbitration concerning future controversies merely require that the contract between the parties 11 be in writing.” It is significant that in this same section there is a requirement with respect to a submission concerning existing controversies that the same shall be void unless “ some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith, or by his lawful agent.” In view, therefore, of the provisions of sections 1448 and 1449 of the Civil Practice Act, it would seem that the Statute of Frauds (Pers. Prop. Law, § 85) may not be pleaded in bar of the motion to compel arbitration if there is a contract in writing between the parties, though not signed by the party against whom arbitration is sought. Article 84 has its own peculiar and sole Statute of Frauds in section 1449 of the Civil Practice Act. All other questions are not the concern of the court but are for the arbitrators. (Matter of Kelley, 240 N. Y. 74, 78, 79.) A party by receiving and retaining without objection under certain circumstances a written contract signed by the other party may be held bound by the terms of such writing, though he himself has not signed. (Murray v. Cunard Steamship Co., 235 N. Y. 162, 167; Matter of Japan Cotton Trading Co., Ltd., v. Farber, 233 App. Div. 354.) Under this rule the respondent here may be found to be bound on the contracts. It follows, therefore, that the order appealed from should be reversed, with twenty dollars costs and disbursements, and a trial of preliminary issues fixed in the order to be entered hereon, the determination of the motion to compel arbitration to be held in abeyance until the coming in of the verdict on such issues, to be decided by the justice then presiding at the Special Term. Martin, P. J., Townley and Cohn, JJ., concur; Callahan, J., dissents and votes to reverse and to remit the issue raised for a trial by jury.