In re the Arbitration between Wetzler & Equi-Flow, Inc.

Order modified, on the law, by deleting the final decretal provision thereof and providing for the trial of the issues respecting the alleged waiver by petitioners of respondent’s performance of the provisions of the agreement of October 29, 1953, and for disposition of the motion for a stay of the arbitration after said trial, with costs. On September 21, 1953 petitioners and respondent entered into a writing for the services of the respondent, the use of the latter’s patents and payment to respondent of certain percentages of net sales of the petitioners. The writing provided for the arrangement 612 between the parties to continue for a period of seven years from January 1, 1954, and provided for arbitration of any dispute in any way relating to the agreement or the subject matter thereof. Apparently there was no exchange of the signed writings by the parties. Subsequently, on October 29, 1953, the parties entered into an agreement which expressly provided that the agreement of September 21, 1953 was not to be deemed effective until the respondent had complied with the conditions contained in the later agreement. The agreement of October 29, 1953 did not provide for arbitration except to a limited extent, not material at this time. Petitioners contend that the respondent failed to comply with the conditions of the second agreement and therefore that the first agreement containing the arbitration provision never became effective. If the respondent has failed to comply with the agreement of October 29, 1953, then the first agreement is ineffective. (Matter of Japan Cotton Trading Co. v. Farber, 233 App. Div. 354.) Whether, as contended by the respondent, there has been a waiver of performance of the second agreement presents preliminary issues which should be tried before the disposition of the petitioners’ motion for a stay. Settle order. Concur — Rabin, J. P., M. M. Frank, Valente, McNally and Stevens, JJ. [16 Mise 2d 524.]