Safeway Stores, Inc. v. Vagim Packing Co.

DOOLING, J. Vagim Packing Company, a corporation, has appealed from a judgment confirming an arbitration award against it.

[797]Safeway Stores, Inc., entered into a number of contracts to purchase raisins from Vagim Packing Company. Prior to April 10, 1946, Vagim Packing Company was a partnership composed of Edward J. Vagim and James G. Vagim. On April 10, 1946, the corporation of the same name was organized by filing articles of incorporation with the secretary of state. The deposition of Edward J. Vagim, in evidence before the court on the hearing of the petition to confirm the award, contains the following concerning the relationship between the corporation and the partnership:

“Q. Did the Vagim Packing Co., a corporation, take over all the assets of the partnership ? A. Well, I think the arrangement was—all of the stock in the corporation is held by the partnership at the present time.

“Q. The partnership is still in existence then? A. Yes. I will stipulate they took practically all of the assets and I think are responsible if any liability exists by reason of this controversy—Vagim Packing Co., a corporation are responsible for it I think.

“Q. But the partnership is still in existence. A. Well, it is not operative. It is just a holding company for the stock; that is all.

“Q. And the stipulation then is that the corporation has assumed all liability with respect to the cause of action set forth in the complaint in this matter, is that right? A. Yes, I think so.”

The contracts were repudiated by the seller while 313,600 pounds of raisins (as found by the arbitrators) were still undelivered. Safeway Stores, Inc., commenced an action for this breach joining as defendants the partnership, the corporation and the two individual partners. While this action was pending a written stipulation was signed by all the parties to the action and their attorneys agreeing to submit the dispute to arbitration and for the dismissal of the action with prejudice upon the ‘ ‘ completion of the submission to arbitration. ’ ’ The stipulation further provided:

“It is the intent hereof . . . that all of the disputes between the parties are to be determined by such arbitration and not otherwise.”

The stipulation was signed by Vagim Packing Company, a corporation, Vagim Packing Company, a partnership, and the two individual partners. It recited in two “whereas” clauses that “on or about March 30, 1946, the parties entered into