General Commodities Corp. v. Hyman-Michaels Co.

Heen, Akana and Kai appeal from an order of the district court in a diversity suit, requiring them to submit to arbitration, under 9 U.S.C. § 4 , claims against them arising from a contract with Hyman-Michaels, which the latter contends imposed on them a personal liability for the debts of General Commodities Corp.

The appellants had refused to arbitrate and contend, inter alia, that the contract shows on its face that it created no personal liability in them for General Commodities’ debts and hence, there being nothing to arbitrate, Hyman-Michaels is not a “party aggrieved” under 9 U.S.C. § 4 1 by their refusal to become parties to the arbitration.

General Commodities Corporation entered into a contract to sell heavy construction equipment then located in the South Pacific to the 'Hyman-Michaels Company, the appellee. This contract contained an arbitration clause. Several agreements were later entered into transforming the arrangement into a joint venture to sell or lease the equipment in the United States. These were' modifications of the original contract and the arbitration clause continued in force. Hyman-Michaels Company was to manage the operation and make advance…