FARR & CO., A PARTNERSHIP OF WHICH F. S. FARR, JOHN FARR, W. F. PRESCOTT, E. M. JONKLAAS, EMMET WHITLOCK, L. H. DIXON AND JOHN C. BUYS ARE PARTNERS, PETITIONER-APPELLEE,
v.
CIA. INTERCONTINENTAL DE NAVEGACION DE CUBA, S. A., RESPONDENT-APPELLANT

2d Cir. | 1957-02-04
Nos. 127, Docket 24212
243 F.2d 342 United States Court of Appeals for the Second Circuit (1957) Caution
Cited by 74 cases

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Holding

An order directing arbitration under section 4 of the U.S. Arbitration Act, when issued in an independent proceeding, is a final and appealable order. Service by mail is permissible under the Act as amended, incorporating state service rules, and constitutes valid personal jurisdiction by consent.


Facts & Procedural History

Farr & Co. petitioned to compel arbitration under a subcharter with Cia. Cia. moved to vacate service of process, arguing lack of jurisdiction. The di…

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Opinion of the Court
SWAN, Circuit Judge. PER CURIAM.

The final question is whether the appellee waived its right to arbitration when it filed its libel without requesting arbitration. In Richard Nathan Corp. v. Diacon-Zadeh, D.C.S.D.N.Y., 101 F.Supp. 428, 430, Judge Dimock held that the mere commencement of an action does not constitute a waiver of the right to compel arbitration. Judge Patterson in The Belize, D.C.S.D.N.Y., 25 F.Supp. 663, 664, held that after issue had been joined on the merits in the admiralty court it was too late for the libellant to draw back and compel arbitration. In the case at bar the libel never got beyond the initial stage of filing; no party was served or entered appearance; no property was attached, no answer filed. These facts distinguish the present case from the authorities cited by the appellant. Furthermore, it may be doubted whether the appellant can raise the waiver issue, because it has made only a special appearance, and also because the point was first brought to the attention of Judge Noonan on motion for reargument and, so far as appears, was not considered by him.

Order affirmed.

On Petition for Rehearing.

PER CURIAM.

The appellant’s petition for rehearing has raised a point not previously presented to us based on Rule 4(c) of the Federal Rules of Civil Procedure.1 The argument is that Rule 4(c) must be read as a limitation upon Rule 4(d) (7) and, as Rule 4(c) was not complied with, our decision is erroneous in holding that service by mail of the petition to compel specific performance of the arbitration agreement was valid.

We cannot accept this contention. It was clearly not intended that Rule 4(c) limit the broad language of Rule 4(d) (7) permitting service “in the manner prescribed by the law of the state in which the service is made for the service of summons or other like process * * * ” Hence personal service may be replaced by service by mail when that method is specifically authorized under the relevant state statute. Any other construction of Rule 4(d) (7) would preclude resort by litigants in the federal courts to those provisions of nonresident motorist statutes that permit service by mail. See, e. g., N. Y. Vehicle and Traffic Law, McKinney’s Consol. Laws, c. 71, § 52. Since many states had statutes of this type at the time of the promulgation of the Federal Rules, see Giffin v. Ensign, 3 Cir., 1956, 234 F. 2d 307, 312, no such restriction upon federal courts sitting in those states could have been intended.

The appellant further contends that the territorial limitation on service of process embodied in Rule 4(f) invalidates the service here employed, and argues that our contrary holding cannot be sustained on the authority of Giffin v. Ensign because in that case, which involved a non-resident motorist statute, service was actually effected within the limits of the state in which the United States District Court sat by serving a state official who was designated by law as the non-resident motorist’s agent for service of process. However, the court in that case did not base its holding on this legal fiction, but said without qualification that [234 F. 2d 311] “Rule 4(f) does not address itself to or cover nonresident procedures authorized by State law, which are the subject of Rule 4(d) (7).” We agree with that conclusion and find it applicable to the situation at bar. None of the other points presented by the petition for rehearing requires discussion. We adhere to our decision and deny the petition.

. Both the charter and the subcharter contained the following clause:

“Any dispute that may arise under this Charter to be settled by arbitration, each party appointing an Arbitrator, and should they be unable to agree, the de-cisión of any Umpire selected by them to be final. The Arbitrators and Umpires are all to be commercial men and resident in New York and the arbitration to take place there. This submission may be made a rule of Court by either party.”

. The first sentence of section 4 provides:

“A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction under Title 28, in a civil action or in admiralty of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement.”

. Goodall-Sanford, Inc., v. United Textile Workers, 1 Cir., 233 F. 2d 104, certiorari granted 352 U.S. 822, 71 S.Ct. 61, 1 L.Ed.2d 46; American Locomotive Co. v. Gyro Process Co., 6 Cir., 185 F. 2d 316; Continental Grain Co. v. Dant & Russell, 9 Cir., 118 F. 2d 967. An excellent discussion of the subject appears in 66 Yale L.J. 293.

. See International Refugee Organization v. Republic S.S. Corp., 4 Cir., 189 F. 2d 858, 861; Stathatos v. Arnold Bernstein S.S. Corp., 2 Cir., 202 F. 2d 525, 529 (dissenting opinion).

. The agreement to arbitrate is set forth in note 1, supra. The extraterritorial service was made, as already stated, by registered letter sent to appellant’s office in Tampa, Florida.

. His opinion, 144 F.Supp. at page 840 states:

“The parties herein having previously agreed to arbitrate disputes arising under the Charter, and having agreed therein that the arbitrators and umpire shall be New York residents and that the arbitration shall take place in New York, a party to that charter cannot now say that, being a foreign corporation, it is not in New York for jurisdictional purposes when an attempt is made to enforce that arbitration agreement.

“Title 9 U.S.C. § 4 provides for the jurisdiction of a federal district court and the parties themselves provided for venue in New York under these circumstances; the parties herein thus having consented to the jurisdiction of a New York arbitration proceeding, the consent would be meaningless unless the consenting party thereby also consented to the jurisdiction and venue of the court that could compel the proceeding in New York.”

. See The Anaconda v. American Sugar Refining Co., 322 U.S. 42, 45, 64 S.Ct. 863, 865, 88 L.Ed. 1117: “Finally we turn to Section 4. * * *. From this provision it is clear that the parties may proceed in an admiralty case without the customary libel and seizure. And it has been so held.”

. Prior to the amendment § 4 read in part:

. 4(d) (7), Fed.R.Civ.P.:
“Upon a defendant of any class referred to in paragraph (1) or (3) of this subdivision of this rule, it is also sufficient if the summons and complaint are served in the manner prescribed by any statute of the United States or in the manner prescribed by the law of the state in which the service is made for the service of summons or other like process upon any such defendant in an action brought in the courts of general jurisdiction of that state.”

. See Stathatos v. Arnold Bernstein S.S. Corp., 2 Cir., 202 F. 2d 525, 527, footnote 1.

. “(f). Territorial Limits of Effective Service. AH process other than a subpoena may be served anywhere within the territorial limits of the state in which the district court is held and, when a statute of the United States so provides, beyond the territorial limits of that state. A subpoena may be served within the territorial limits provided in Rule 45.”

. See also Judge Chestnut’s scholarly discussion in Holbrook v. Cafiero, D.C.D.Md., 18 F.R.D. 218.

. Gilbert v. Burnstine, 255 N.Y. 348, 174 N.E. 706, 73 A.L.R. 1453; Prosperity Co. v. American Laundry Machinery Co., 271 App.Div. 622, 67 N.Y.S.2d 669, affirmed 297 N.Y. 486, 74 N.E. 2d 188; Bradford Woolen Corp. v. Freedman, 189 Misc. 242, 71 N.Y.S.2d 257. See also, Restatement, Conflicts, § 81.

. See International Shoe Co. v. State of Washington, 326 U.S. 310, 320, 66 S.Ct. 154. 160. 90 L.Ed. 95:

“It is enough that appellant has established such contacts with the state that the particular form of substituted service adopted there gives reasonable assurance that the notice will be actual. * * * Nor can we say that the mailing of the notice of suit to appellant by registered mail at its home office was not reasonably calculated to apprise appellant of the suit.”

. “Rule 4. Process

*

“(c) By 'Whom, Served.

“Service of all process shall be made by a United States marshal, by his deputy, or by some person specially appointed by the court for that purpose, except that a subpoena may be served as provided in Rule 45. Special appointments to serve process shall be made freely when substantial savings in travel fees will result.”


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