Matter of Wachusett Spinning Mills (Blue Bird Silk Mfg. Co.)

In Matter of Wachusett Spinning Mills (Blue Bird Silk Mfg. Co.) (12 Misc 2d 822 [1958], mod on other grounds 7 AD2d 382 [1959]) the operators of yarn spinning mills sought to stay an arbitration commenced by a textile manufacturer under several alleged contracts. Among other grounds for the stay, petitioners argued that the arbitration contracts had been signed ostensibly on their behalf by a sales agent and factor and that such an agent did not have the authority to bind them to an arbitration agreement. The Wachusett court disagreed, noting that: "as sales agent for Wachusett, Fitchburg Sales, regardless of its actual authority, possessed apparent . . . authority sufficient to bind Wachusett . . . . The fact that the accepted orders contained an arbitration clause does not alter this conclusion, for, as the Court of Appeals observed in Matter of Helen Whiting, Inc. . . . (307 N.Y. 360) at page 367: 'From our own experience, we can almost take judicial notice that arbitration clauses are commonly used in the textile industry'. A customer dealing with a general sales agent has the right to assume that the latter has authority to enter into a contract, on behalf of its principal, containing an arbitration clause, particularly a textile contract which commonly contains such a provision." (Id., at 829.)