I dissent and would affirm the order of Special Term.
Not only is the dispute not within section 232 of the New York Commodity Exchange by-laws, the appellant himself has ceased to be a member of this Exchange and thus he no longer has the status (as a member) entitling him to urge that the disputed transaction on the London Metal Exchange is arbitrable.
Section 232 of the by-laws of the New York Exchange is clear when it dictates that any “ claims, disputes, differences or controversies ” between a member and a member firm “ arising out of any transaction in commodities made on the Exchange ” shall be subject to arbitration. (Emphasis supplied.)
The Commodity Account Agreement between the plaintiff and the defendant reads: “ Any and all transactions shall be subject to the constitution, rules, regulations, customs and usages of the exchange or market (and its clearing house, if any) where executed.” (Emphasis supplied.)
And subdivision (a) of'section 208 of the by-laws of the New York Exchange states: “After the expiration of the ten days posting of notice of intention to transfer, all of the rights and privileges of the member shall cease,”
*105It would seem to be the position of the majority that these regulations do not mean what they say when they say it.
It is urged that a literal construction should not be given section 232 because the losses incident to the short sale on the London Metal Exchange were the result of calculations relating to transactions on the New York Commodity Exchange. Ergo, it is argued, they “ arose ” and were a “ proximate outgrowth ’ ’ of the latter. We know the purpose of the short sale on the London Exchange was to hedge and limit the losses already suffered on the New York Exchange. But this is motivation only. It explains what took place. The place where the sale was executed, however, was the London Metal Exchange. It was there that the plans went awry, in a foreign market on a foreign Exchange subject to its own separate and unique rules, regulations, customs and usages.
The defendant, a professional trader, would now arbitrate this London transaction, which he now repudiates, before an Exchange (New York) of which he is no longer a member. Counsel to the Arbitration Committee of the Exchange also was of the opinion the dispute could not properly come before it. In his letter of June 2, 1966, addressed to appellant, he wrote: “Your letter would appear to indicate that the controversy which you have with Merrill Lynch involves only their right to put out a hedge on the London Metal Exchange. If I am correct in this understanding of the nature of your dispute, the matter would not be subject to the jurisdiction of the Arbitration Committee of the Exchange.”
In this same letter, the counsel opined: ‘ ‘ The By-laws of the Exchange provide for the submission to arbitration under the Rules of the Exchange any controversy between a member and non-member ‘ arising out of a transaction on the Exchange ’. This Rule does not enable a non-member to compel a member to submit to arbitration. It is permissible, however, for a member and a non-member, by mutual agreement, to submit a controversy to arbitration if it involves a transaction on the Exchange. ’ ’
In my view, the transaction in dispute was neither one which the respondent agreed to arbitrate nor was it one involving a transaction on the New York Exchange. And herein, there is no other basis for compelling arbitration. (See Sinva, Inc. v. Merrill, Lynch, Pierce, Fenner & Smith, 253 F. Supp. 359, 364-365 [U. S. Dist. Ct., S.D.N.Y., 1966].)
At the time appellant sought to submit his controversy to the New York Exchange he had ceased to be a member for a period of nine months. Indeed, he relinquished his membership on *106December 2, 1965, one day after the disputed transaction in London. The effort of the majority to analogize this situation with one involving an insolvent or a deceased member is based on a gratuitous assumption. The by-laws of the Exchange (supra) expressly declare that all his (the defendant’s) privileges and rights cease 10 days after he posted his intention to transfer his membership. And there is nothing further in the by-laws that would resuscitate his privileges or bring back to life his .right to compel the respondents to submit to arbitration a question they have steadfastly resisted. Having resigned as a member of the New York Exchange, appellant lost every right and privilege he might otherwise have had to compel the respondent to arbitrate the London transaction (Matter of Langer [Speyer], 19 A D 2d 602, affd. 14 N Y 2d 642).2
The order of Special Term should be affirmed.
Stevens, Tilzer and McNally, JJ., concur with Botein, P. J.; MoGtvern, J., dissents in opinion.
Order entered February 15,1967, modified, on the law and the facts, to direct that the parties proceed to arbitration, and otherwise affirmed, with $50 costs and disbursements to defendant.
Settle order on notice.
Nor do I accept as valid the endeavor of the majority to integrate the second portion of section 232 which makes arbitrable “ controversies relating to contracts for the physical commodity in an E.F.P. transaction as same is defined in Rule 504” into the much narrower scope of permissible arbitrations under the first portion of section 232. And only the first portion of this section can support jurisdiction to arbitrate. The words following “ or ” are plainly disjunctive and unrelated to the nature of the instant dispute. It is of vaster significance that the first portion of section 232, which alone can sustain the plaintiff's position, does not contain the words “or relating thereto”. And this phrase, here missing, is found in the standard arbitration clause recommended by the American Arbitration Association. It is not here present.