author: Fuld, J. Froessel, J.

text:
    Herman Wagman, Respondent, v. American Fidelity & Casualty Co., Inc., et al., Appellants, and Bond Stores, Incorporated, et al., Respondents.
    Argued October 9, 1952;
    decided December 4, 1952.

      David Tepp for appellants.
    I. The loading operation by Gilbert did not commence until its driver and helper on the truck lifted the garments from the racks at the curb. II. There was no loading of the automobile by Bond or its employees. (B & D Motor Lines v. Citizens Cas. Co. of N. Y., 181 Misc. 985, 267 App. Div. 955; Zurich Gen. Accident & Liability Ins. Co. v. Eagle Ind. Co., 279 App. Div. 574; Krasilovsky Bros. Trucking Corp. v. Maryland Cas. Co., 54 N. Y. S. 2d 60; Paterson Trucking Co. v. Liberty Mut. Ins. Co., N. Y. L. J., June 22, 1945, p. 2398.) III. The contract between the parties should be the controlling factor. IV. There was no permissive or contemplated use of the truck either directly or indirectly by respondent Wagman. V. Wagman was the employee of Bond and engaged in its business and not in the use of the vehicle.

      Harold M. Harkavy and Frederick M. Garfield for Herman Wagman, respondent.
    At the time of the accident Wagman was engaged in “ loading ” the truck within the meaning of American’s policy and hence was an insured entitled to protection under the policy. (Pacific Automobile Ins. Co. v. Commercial Cas. Ins. Co., 108 Utah 500; State v. District Ct. of Second Judicial Dist., 110 Mont. 250; Zurich Gen. Accident & Liability Ins. Co. v. Eagle Ind. Co., 279 App. Div. 574.)
   Fuld, J.

The issue here presented is whether a policy of automobile liability insurance issued by defendant-appellant American Fidelity & Casualty Co., Inc., to defendant-appellant Gilbert Carrier Corp., a motor carrier, áffords coverage to plaintiff Wagman, an employee of one of Gilbert’s customers, in connection with an accident which purportedly occurred during the loading of Gilbert’s truck.

At the time of the accident, Gilbert’s truck, parked at the curb in front of one of the stores of Bond Stores, Incorporated, on 42nd Street in New York City, was being loaded with garments on hangers from that store for transportation to Bond’s warehouse in Bochester, New York. Two Bond employees, other than plaintiff Wagman, the trial court found, rolled the garments out on moveable racks from the store to the curb line, and the driver of the truck reached down and lifted the garments into the truck, handing them to his helper, who arranged them with garments from other Bond stores inside the vehicle. Gilbert’s men did not leave the truck during the loading, and none of Bond’s employees entered the truck or brought the garments further than the curb line. Plaintiff Wagman, employed as a department manager in Bond’s store, was engaged in counting and checking the clothes for inventory purposes and in supervising the pickup at the curb, but he did not participate in the actual pushing or carrying of the garments. On his way back to the store from the truck in order to check on some of the other goods to be shipped, Wagman bumped into a pedestrian, Mrs. Friederike Sladek, causing her to fall to the sidewalk and sustain serious injuries.

Mrs. Sladek brought suit against Wagman and Bond, and the latter, in its answer, asserted a cross claim against Wagman for judgment over against him as the party primarily liable. Wagman thereupon made demand on Gilbert’s insurer, American Fidelity, to defend him against the Sladek complaint and the Bond cross complaint. Upon American’s refusal, Wagman brought the present action for a declaratory judgment that he is entitled to protection from liability in connection with the Sladek action as an “insured ” under the policy of insurance issued by American to Gilbert.

By that policy, American agreed to defend and indemnify “ the insured ” against claims for damages for accidental injury or death arising out of the ownership, maintenance or use of Gilbert’s truck. An omnibus provision defined the term “ insured ” as including, not only the named insured, but also “ any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is with the permission of the named insured.” The policy further provided that “ use of the automobile for the purposes stated includes the loading and unloading thereof.”

In concluding that there should be a judgment for plaintiff, the courts below found that he was engaged, at the time of the accident, in an operation directly related to the process of loading the vehicle, that the loading constituted a use ” of the vehicle within the sense of the policy and that such use was with the permission of the named insured.

The interpretation of clauses such as those in Gilbert’s policy, defining “ use ” of the insured automobile as including “ loading and unloading ”, has occasioned doctrinal division among the authorities. The narrower construction, adopted in some states, insists upon a close connection between the vehicle and the acts for which coverage is claimed. ‘1 Loading ’ ’ is interpreted by the courts of those jurisdictions as including only the immediate act .of placing the goods upon the vehicle — excluding the preliminary acts of bringing the goods to the vehicle; and “ unloading ” is taken to embrace only the operation of removing the goods from the vehicle to a place of rest. (See, e.g., St. Paul Mercury Ind. Co. v. Standard Accident Ins. Co., 216 Minn. 103; Stammer v. Kitzmiller, 226 Wis. 348.) The broader construction, adopted in a majority of the jurisdictions which have passed upon the question, is that loading and unloading ” embrace, not only the immediate transference of the goods to or from the vehicle, but the 1 ‘ complete operation ’ ’ of transporting the goods between the vehicle and the place from or to which they are being delivered. (See, e.g., State ex rel. Butte Brewing Co. v. District Ct., 110 Mont. 250; Bobier v. National Cas. Co., 143 Ohio St. 215; Conrad v. Duffin, 158 Pa. Superior Ct. 305; Pacific Automobile Ins. Co. v. Commercial Cas. Ins. Co., 108 Utah 500; London Guar. & Accident Co. v. White & Bros., 188 Va. 195.) The latter view impresses us as sounder, as more fully carrying out the aim of the policy — to cover the entire operation of making commercial pickups and deliveries in the business of the insured carrier — and, indeed, the courts in this state have already signified their approval of it. (See Zurich Gen. Accident & Liability Ins. Co. v. Eagle Ind. Co., 279 App. Div. 574, motion for leave to appeal denied 303 N. Y. 1016; B & D Motor Lines v. Citizens Cas. Co. of N. Y., 181 Misc. 985, affd. 267 App. Div. 955; Krasilovsky Bros. Trucking Corp. v. Maryland Cas. Co., 54 N. Y. S. 2d 60.)

Since, then, the policy is to be interpreted as covering the complete operation of making a pickup, the process — performed by Gilbert’s employees — of placing the goods on the vehicle cannot be dissociated from the process — performed by Bond’s employees — of taking the goods from the store to the curb line. Both operations together constituted the act of loading ” the vehicle.

If the entire operation had been performed by Gilbert’s employees, and plaintiff had been employed by Gilbert instead of Bond, the evidence would unquestionably have warranted the trier of the facts in finding that his activities in supervising and checking the pickup of the garments had been part of the over-all process of loading the vehicle, even though he was not actually engaged in the physical effort of carrying the goods across the sidewalk to the curb line. That he was on his way back to the store at the time of the accident to supervise the bringing out of additional garments, would not suspend the coverage of the policy. (Cf. Maryland Cas. Co. v. Tighe, 29 F. Supp. 69, affd. 115 F. 2d 297.)

Nor may the insurer avoid liability under its policy because plaintiff was an employee of Bond rather than of Gilbert, in the light of the policy’s omnibus provision defining the term “ insured ” as embracing any person using the vehicle with the permission of the named insured. The effect of that provision was to extend the coverage of the policy beyond the activities of the named insured and its employees. The only problem is whether plaintiff may be regarded as having been using ” the vehicle within the meaning of the policy. And the answer to that is clear. In Zurich Gen. Accident & Liability Ins. Co. v. Eagle Ind. Co. (supra, 279 App. Div. 574, motion for leave to appeal denied 303 N. Y. 1016), a policy similar to that in this case was held to afford coverage to a company other than the named insured which had hired the latter’s truck and driver for the purpose of transporting a heavy vault door being dismantled by its employees. The policy was interpreted as protecting that company from liability in connection with an accident which occurred during the course of preliminary operations on the sidewalk prior to loading the vault door onto the named insured’s truck. The fact that no employee of the named insured was in any way involved in the accident, was held to have no effect on the question of coverage, since under the policy the term “ insured ” embraced persons other than the named insured who were using the vehicle with the latter’s permission.

Likewise without consequence is the circumstance that the truck may not have been hired by Bond. Permissive use of a vehicle sufficient to qualify the user as an additional ‘ insured ’ ’ is not necessarily limited to actual operation of the vehicle. Such a restrictive interpretation would fail to give effect to the policy provision which defines “use” as including “loading and unloading ”. Effectuation of the broad purpose of the policy to cover the entire process of making a commercial pickup or delivery, would seem to demand that the coverage of the policy be held to embrace loading and unloading operations performed by third persons with the permission of the named insured, although there is otherwise no actual or contemplated “ use ” of the vehicle by such third persons. Such third persons come squarely within the letter and the purpose of the omnibus definition of the term “insured”. (See, e.g., Conrad v. Duffin, supra, 158 Pa. Superior Ct. 305.)

Appellants, however, seek to base operative significance upon the provisions of a tariff schedule filed by Gilbert with the Interstate Commerce Commission in connection with its operations as an interstate motor carrier. That schedule fixed Gilbert’s rates for deliveries of “ garments and wearing apparel on hangers * * * between New York, N. Y., Jersey City and Newark, N. J. on the one hand, and Rochester and Buffalo, N. Y. on the other.” It also provided that the rates therein fixed included “ one pick-up from consignor’s place of business,” except that “ No pick-up service will be provided in New York, New York, but carrier will accept shipments to any destination herein named, at its terminal.” Pointing to the latter specification — permitting the carrier to accept shipments only at its terminal — appellants claim that the acts performed by Bond’s employees can in no event be considered a “ loading ” operation under the policy; that those acts must be regarded as akin to a consignor’s transportation of goods by its own facilities to the carrier’s terminal for loading by the carrier at that point, and, for that reason, outside of the policy’s coverage. If there were a duly promulgated regulation of the Interstate Commerce Commission clearly applicable here, forbidding pickups at the consignor’s place of business, a contention could perhaps be made that the policy was written in contemplation of the carrier’s compliance with that regulation and that the insurer could not be taken to have intended to assume liability for loading operations in violation of the regulation. We do not, however, reach that question in this case. For all that appears in the record before us, the shipment that Bond was making from its store in New York City to Bochester, New York, being made from one point within the state to another, may have been purely intrastate. And, if that was so, if the shipment was of an intrastate rather than an interstate character, it would appear to be subject, not to control by the Interstate Commerce Commission, but to regulation by the Public Service Commission of this state. (Cf. B. & O. S. W. R. R. Co. v. Settle, 260 U. S. 166; Groendyke Transp. Extension-Etter, 9 Fed. Carr. Cas., pars. 32, 424; Earle v. Brink’s Inc., 54 F. Supp. 676; Tucker v. Casualty Reciprocal Exch., 40 F. Supp. 383.)

As a matter of fact, appellants do not actually contend that the shipment in this case was of an interstate nature; they point merely to the circumstance that the rate which Gilbert charged Bond for the shipment was the same as that fixed in the tariff schedule for interstate shipments. The record does not, however, show that equivalent rates would not be available for an intrastate shipment or that pickups at the consignor’s place of business would be prohibited for such intrastate shipment under pertinent regulations of the Public Service Commission. Moreover, if, as appellants seem to assume, the regulations of the Interstate Commerce Commission do not bar the carrier from receiving the consigned goods in its vehicle at the curb in front of the consignor’s place of business, it is questionable whether the consignor’s acts in carrying the goods from the store to the vehicle must as a matter of law be denied effect as part of the over-all operation of loading the vehicle. In any event, the burden rests upon appellants to establish, not only the applicability of the regulations on which they rely, but their violation as well, and, since the record falls short of establishing either the one or the other, we need not determine what effect the regulations would have if they were shown to be here controlling.

The judgment should be affirmed, with costs to plaintiff-respondent against defendants-appellants.

Froessel, J.

(dissenting). The issue before us is aptly stated in the prevailing opinion. Assuming that we are inclined in this State toward the ‘ ‘ complete operation ’ ’ theory in determining what constitutes the loading of a vehicle, these words are not a formula that embraces everything that may have been done prior to the immediate effort of loading. The line of demarcation must be reasonably drawn. As the trial court said in Zurich Gen. Accident & Liability Ins. Co. v. Eagle Ind. Co. (unreported, affd. 279 App. Div. 574, motion for leave to appeal denied 303 N. Y. 1016), it is a “ question of degree.” There, a safe door was but thirty-six inches away from the truck and the insured truck had actually been hired by the shipper.

The immediate effort ” of loading may encompass the movement of goods from the premises of the shipper, where they have been made ready for shipment, to or upon the carrier’s vehicle. In the case at bar, however, for reasons considered by them to be good and sufficient, and obviously dictated by the tariff schedule filed by the motor carrier with the Interstate Commerce Commission, the parties agreed to and carried out a different arrangement. The carrier did not pick up goods from the premises, but, instead, its employees deliberately refrained from leaving the truck, and picked up the merchandise from the curb in front of the premises, pursuant to the aforementioned agreement. Plaintiff took no part in the loading of the truck, but merely counted and checked the garments for inventory purposes as they were brought out from the store to the curb, at which latter point they were made ready for pickup and shipment. This too was in pursuance of his employer’s agreement with the carrier. Plaintiff was thus carrying out a duty to Ms employer wMch would ordinarily be performed inside the store and might well have been done hours, or an entire day, before; the risk to pedestrians thus created — and here resulting in injury — was not one which accompanied this loading, and was therefore not one which would be within the contemplation of the insurer and the carrier in entering into the insuring agreement.

In the light of these considerations, it is my conclusion that plaintiff was not engaged in loading the vehicle when the accident occurred. In the circumstances disclosed by this record, the loading was limited by the prior agreement of the carrier and shipper to the operation of removing the goods from the sidewalk at the curb to the truck, and this was concededly accomplished by the employees of the carrier. Plaintiff’s activities on the public sidewalk on behalf of Ms employer therefore cannot reasonably be said to have been part of the loading operation. It follows that he was not using ” the truck ££ with the permission of the named insured ’ ’ or otherwise.

The judgment appealed from should be reversed, and the complaint dismissed, with costs against plaintiff-respondent.

Loughran, Ch. J., Lewis, Conway, Desmond and Dye, JJ., concur with Fuld, J.; Froessel, J., dissents in opinion.

Judgment affirmed.


source: Caselaw Access Project

author: Fuld, J.

license: Public Domain

text:
    City of Yonkers, Respondent, v. Rentways, Inc., Defendant, and Devonshire Lane Service, Inc., et al., Appellants.
    Argued October 20, 1952;
    decided December 5, 1952.

      Eugene L. Bondy and Bertram Braufman for appellants.
    I. The construction placed upon the building zone ordinance by the judgment appealed from renders that ordinance pro tanto unconstitutional. (Matter of Barker v. Switzer, 209 App. Div. 151, 238 N. Y. 624; Matter of Monument Garage Corp. v. Levy, 266 N. Y. 339; Matter of 440 E. 102nd St. Corp. v. Murdock, 285 N. Y. 298; Village of Stamford v. Fisher, 140 N. Y. 187; Dunkirk Aerie, Order of Eagles v. City of Dunkirk, 274 App. Div. 685; Matter of Kensington-Davis Corp. v. Schwab, 239 N. Y. 54; Welch v. City of Niagara Falls, 210 App. Div. 170; City of Albany v. Anthony, 262 App. Div. 401; Baddour v. City of Long Beach, 279 N. Y. 167, 308 U. S. 503.) II. For the purpose of considering its constitutionality, the zoning ordinance must be deemed to have the meaning which the courts below attributed to it. (Fidelity Trust Co. v. Field, 311 U. S. 169; Matter of Bommer, 159 Misc. 511.) III. The building ordinance, as construed by the court below, is unconstitutional since it confiscates valuable property rights without warrant. (Nectow v. Cambridge, 277 U. S. 183; Matter of Monument Garage Corp. v. Levy, 266 N. Y. 339; Matter of 440 E. 102nd St. Corp. v. Murdock, 285 N. Y. 298; Koch v. City of Toledo, 37 F. 2d 336; Seattle Trust Co. v. Roberge, 278 U. S. 116; People v. Miller, 304 N. Y. 105; Matter of Eaton v. Sweeny, 257 N. Y. 176; People v. Gillson, 109 N. Y. 389; Penna. Coal Co. v. Mahon, 260 U. S. 393.)

      J. Raymond Hannon, Corporation Counsel (John Preston Phillips of counsel), for respondent.
    I. The construction placed by the courts below upon the building zone ordinance is correct and is not unconstitutional. (Matter of Monument Garage Corp. v. Levy, 266 N. Y. 339; City of New York v. Off-Streets Parking, 153 Misc. 150, 242 App. Div. 767; Village of Great Neck Estates v. Bemak & Lehman, 128 Misc. 441, 223 App. Div. 853, 248 N. Y. 651.) II. The building zone ordinance as construed by the courts below does not confiscate property rights and is not unconstitutional. (Matter of Clark v. Board of Zoning Appeals of Town of Hempstead, 301 N. Y. 86; Nectow
      v. Cambridge, 277 U. S. 183; People v. Miller, 304 N. Y. 105; Shepard v. Village of Skaneateles, 300 N. Y. 115; Matter of Fox Meadow Estates v. Culley, 233 App. Div. 250, 261 N. Y. 506; Matter of Wulfsohn v. Burden, 241 N. Y. 288.)
   Fuld, J.

The present action was brought by the City of Yonkers to restrain and enjoin defendants, owners and lessees of a garage, from using residential land in asserted violation of a Building Zone Ordinance enacted by the city in 1928 (General Ordinance No. 11 —1928). The garage is located in a business district, on Lot 46 which faces Riverdale Avenue. Immediately to the rear of Lot 46 is a vacant and unimproved parcel of land which extends to Livingston Avenue, a street that parallels Riverdale Avenue. This latter parcel, Lot 20, is in a residential zone, and, indeed, has been in such a zone since 1920, when the city’s first General Zoning Ordinance became effective (General Ordinance No. 4 —1920). Both lots, which have continuously been under the same ownership, were purchased in 1941 by defendants Edward and Henry Lampl. In 1946, the entire premises were leased, and the lease was subsequently assigned to defendant Devonshire Lane Service, Inc., which in turn subleased a portion of the premises to defendant Rentways, Inc.

The violations enjoined concern the use of Lot 20, the plot in the residential zone. In 1928, an additional structure of two stories, extending almost to the boundary of Lot 20, was added, on Lot 46, to the rear of the garage. As that parcel is on an incline — Livingston Avenue being higher than Riverdale Avenue — the second floor of the new structure is on a level with Lot 20, and doors were constructed at the rear of that second floor to admit vehicles from Livingston Ave. In other words, defendants have used the unimproved residential lot, facing Livingston Avenue, as a means of access to the garage, and trucks have gone in and out of the second floor of the garage over that lot. In addition, defendants have utilized it for the parking of vehicles and for the installation of underground gasoline tanks. f¡

Upon the trial, defendants contended that they were entitled to a nonconforming use; they claimed that there had not been a violation, since they had used Lot 20 as a means of ingress and egress for some time prior to 1928, the effective date of an ordinance which approved pre-existing nonconforming uses (General Ordinance No. 11, § 11). The referee, who tried the case, found, however, that such use did not commence until 1929. In view of that finding — • affirmed by the Appellate Division —- defendants upon their appeal have added, as objections, (1) that the city is not empowered by any statute to prohibit an owner from using a vacant lot, owned by him in a residential district, as a means of access to a business structure constructed on his adjoining lot, and (2), if the city were so empowered, application of its ordinance to the present case would constitute a confiscation of defendants’ property and a deprivation of due process.

The enabling statute, section 20, subdivision 25, of the General City Law, authorizes a city ‘1 To regulate and restrict the location of trades and industries and the location of buildings, designed for specified uses, and for said purposes to divide the city into districts and to prescribe for each such district the trades and industries that shall be excluded ”. Manifestly, that statute authorizes the City of Yonkers to prohibit the location of a garage or any part of one on the vacant residential land, and defendants concede that the judgment, insofar as it orders the removal of underground gasoline tanks from Lot 20 and prohibits the parking of vehicles thereon is fully justified. They argue, however, that the use of their land in a residential district as a mere means of ingress to, and egress from, business property may not be deemed the conduct of a “ trade ” or 11 industry ” and, for that reason, is beyond the regulation of the city.

The power to regulate trades and industries ” obviously includes the power to regulate any part or portion of a trade or industry. And it can hardly be denied that the day in, day out moving of vehicles across private land from a public street to the shelter of a garage building is part of the business of garaging vehicles. Of necessity, then, the use of Lot 20 as an integral and essential part of the business conducted on Lot 46 may be enjoined as nonresidential. Such would be our conclusion even apart from authority — though, we note, support is found in cases that have considered the application of zoning ordinances to vacant residential land used as an adjunct to business property. (See Village of Great Neck Estates v. Bemak & Lehman, 248 N. Y. 651, affg. 223 App. Div. 853; Town of Brookline v. Co-Ray Realty Co., 326 Mass. 206, 212.) In the Bemak case (supra, 248 N. Y. 651), the owner of a garage located outside of a village permitted his customers to drive into and out of his garage over a driveway located in a residential area within the village. The Appellate Division’s grant of an injunction prohibiting the use of the driveway for this purpose was upheld by this court, upon the ground that the use of land, within a residence zone, as an approach to a garage constituted a business use. And in the Massachusetts case, Town of Brookline v. Co-Ray Realty Co. (supra, 326 Mass. 206), the question was whether the use of vacant land, situated in a so-called single residence district,” as a rear entrance to an apartment house, located on an adjacent lot in an unrestricted zone, violated an ordinance prohibiting apartment buildings in the more highly restricted residence zone. The court held that the use of such land as a rear yard and service entrance for the apartment house or as a locus for carrying on the numerous inevitable service activities ” of such apartment house, was conduct forbidden within the single residence zone (pp. 211, 212).

Nor does the ordinance under consideration confiscate defendants’ property or otherwise offend against constitutional guarantees. The second floor of the garage was constructed in 1928, eight years after the enactment of the zoning ordinance that placed Lot 20 in a residence zone. If that second floor could not be profitably used, or used at all, for garaging purposes, because of the then existing prohibition upon the use of the adjoining plot, the owner knew or should have known it. The fact that he nevertheless built that floor as an addition to his garage and thereafter utilized Lot 20 in violation of the ordinance does not entitle him to assert a vested right and complain — when the municipality proceeds against him — that enforcement of the ordinance, relating to Lot 20, renders his improvement useless. (Cf. Matter of 440 E. 102nd St. Corp. v. Murdock, 285 N. Y. 298, 305; Matter of Rosenbush v. Keller, 271 N. Y. 282, affg. 247 App. Div. 748.) And the situation is not affected, defendants’ case is not aided, by the fact that a city employee had issued a building permit for the new structure with rear doors opening on Lot 20 or by the further fact that the city had failed to object for many years to the use to which that lot had been put. A municipality, it is settled, is not estopped from enforcing its zoning laws either by the issuance of a building permit or by loches. (See Rollins v. Armstrong, 251 N. Y. 349, affg. 226 App. Div. 687; Village of North Pelham v. Ohliger, 245 N. Y. 593, affg. 216 App. Div. 728.) Indeed, quite apart from that, defendants, though they have attacked the ordinance as confiscatory, have completely failed to establish or present proof that there has been any, confiscation in fact. (See Arverne Bay Constr. Co. v. Thatcher, 278 N. Y. 222, 232.) Completely absent is any showing that the second floor’s present use could not be continued by building a passageway or ramp within or alongside of the structure so as to permit access to that floor from Riverdale Avenue or, if such construction were impossible, that such floor could not be converted to some other profitable use.

The judgment should be affirmed, with costs.

Loughban, Ch. J., Lewis, Conway, Desmond, Dye and Pkoessel, JJ., concur.

Judgment affirmed.


text:
    Michele Di Leo, Respondent, v. Pecksto Holding Corp. et al., Appellants, et al., Defendants.
    Argued October 7, 1952;
    decided December 5, 1952.

      Charles A. Voss for Pecksto Holding Corp. and another, appellants.
    I. Plaintiff, having by agreement divested himself of the alleged easement, may not claim a prescriptive right after the execution of said agreement. II. The evidence in support of plaintiff’s alleged prescriptive right falls far short of the statutory requirements. (Pirman v. Confer, 273 N. Y. 357; Van Roo v. Van Roo, 268 App. Div. 170, 294 N. Y. 731.)

      Reuben Chase for White Plains Terminal Corp. and others, appellants.
    I. There is no evidence to sustain the judgment against defendants White Plains Terminal Corp., Ida C. Butter-worth, Arthur F. Riegel, Edward R. Riegel, Walter J. Riegel and Frank E. Donahue. II. Plaintiff had by deed divested himself of the alleged easement. III. Plaintiff may not claim a prescriptive right after the execution of said agreement. TV". The evidence in support of plaintiff’s alleged prescriptive right falls far short of the statutory requirements. (Van Valkenburgh v. Lutz, 304 N. Y. 95; Pirman v. Confer, 273 N. Y. 357.)

      Wm. Burdéll Banister for respondent.
    I. The actual physical occupation and improvement of the property furnished sufficient evidence of intent to hold adversely. (Belotti v. Bickhardt, 228 N. Y. 296; Monnot v. Murphy, 207 N. Y. 240; Ramapo Mfg. Co. v. Mapes, 216 N. Y. 362; Koch v. Ellwood, 138 App. Div. 584; Shinnecock Hills & Peconic Bay Realty Co. v. Aldrich, 132 App. Div. 118, 200 N. Y. 533; Trustees of Town of East Hampton v. Kirk, 84 N. Y. 215; Klin Co. v. New York R. T. Corp., 271 N. Y. 376; Bushey v. Santiff, 86 Hun 384; Parker v. Foote, 19 Wend. 309; Nicholls v. Wentworth, 100 N. Y. 455; Hammond v. Zehner, 21 N. Y. 118; Colburn v. Marsh, 68 Hun 269; Ward v. Warren, 82 N. Y. 265.) II. The claim of adverse possession may continue unbroken by a succession of tenants. (Belotti v. Bickhardt, 228 N. Y. 296; Timmerman v. Cohn, 204 N. Y. 614; Barnes v. Light, 116 N. Y. 34.) III. The boundary line agreement did not cut off or extinguish plaintiff’s title in the right of way. (First Nat. Trust & Sav. Bank v. Smith, 284 Mich. 579; Ogden v. Straus Bldg. Corp., 187 Wis. 232.) IV. Defendants-appellants have utterly failed to show any basis whatsoever for reversal of the judgment. (Ramapo Mfg. Co. v. Mapes, 216 N. Y. 362; Arnold v. New York, W. & B. Ry. Co., 173 App. Div. 764; Koch v. Ellwood, 138 App. Div. 584; Barnes v. Light, 116 N. Y. 34; La Frombois v. Jackson, 8 Cow. 589; Belotti v. Bickhardt, 228 N. Y. 296; Monnot v. Murphy, 207 N. Y. 240; Abeel v. Van Gelder, 36 N. Y. 513; Smith v. Egan, 225 App. Div. 586.)
   Fuld, J.

To expand his coal and masonry trade, Michele Di Leo in 1921 bought land in the Village of Port Chester from William Ryan Company. To get to and from his property, Di Leo and his predecessor before him, from the year 1909 at least, traveled a path, stretching north 250 feet to Westchester Avenue, over lands now owned by Pecksto Holding Corp., Waef Realty Corp. and Port Chester Lumber Company. For upwards of thirty-five years, until 1946, they so traveled without objection from anyone. While some of the owners, across whose lands the path ran, also used it “ once in a while ”, Di Leo traversed it continuously, sometimes making 25 trips a day, at first with teams of horses, later with automobile trucks, to carry his goods. Such frequent traffic transformed the way into a definite road, 18 to 20 feet wide.

Di Leo alone maintained the right of way; it was he who straightened and rolled the path, kept it free of rock and other debris, laid stone over the driveway and filled in ruts and holes. No owner of any other land contributed in any way, physically or financially, to its maintenance or repair.

In 1946, Pecksto, White Plains — Waef’s predecessor in title — and Port Chester Lumber, the then owners of the parcels between Di Leo’s property and Westchester Avenue, agreed among themselves to establish a new right of way. The new way, intended for the contracting parties’ use, was to extend across the property of White Plains and, if constructed, would have bisected and interfered with Di Leo’s accustomed route. Shortly after this agreement was made, a considerable quantity of stone and gravel was placed on Pecksto’s land just north of Di Leo’s property, and an iron bar erected, which blocked the path and effectively barred his use of it.

Di Leo thereupon brought this action to establish his easement and to require removal of the obstructions. Joined as defendants were, not only the three parties to the 1946 right of way agreement, Pecksto, Port Chester Lumber and White Plains, but also Waef — the latter’s purchaser — 'Cold-Mix — Pecksto’s partial lessee — and holders of a first mortgage placed in 1947 on Waef’s land.

After a trial, the court ruled in plaintiff’s favor. Finding that the use of the right of way was “ hostile under a claim of right, open, notorious, 'exclusive and continuous ” and that it was along a well-defined route, the court concluded that a prescriptive right ripened before 1931 ”. From the resulting judgment — which (1) adjudged that plaintiff had a perpetual easement permitting his free and unobstructed use of a right of way extending from the northerly side of his property to Westchester Avenue and (2) ordered defendants, other than Port Chester Lumber, to remove from their respective properties all obstructions * * * which encroach upon ” that right of way and to refrain from interfering with plaintiff’s “ free ingress and egress over ” it — all of the defendants, except Port Chester Lumber, appealed. The case is here, by our leave, following a unanimous affirmance by the Appellate Division.

In seeking a reversal, defendants advance a number of arguments : first, all of them urge that an easement by prescription may not-be acquired unless the easement area has been “ protected by a substantial inclosure ” or has been usually cultivated or improved ’ ’, as allegedly prescribed by section 40 of the Civil Practice Act; second, that plaintiff’s use was not adverse; third, that, in any event, plaintiff had, by an agreement made in 1932, divested himself of any easement that he may have acquired; and, fourth, defendánt White Plains and those defendants who are mortgagees of the parcel owned by defendant Waef assert that the judgment is improperly directed against them. We consider those several contentions.

Section 40 of the Civil Practice Act recites:

“ For the purposes of constituting an adverse possession by a person claiming title not founded upon a written instrument or a judgment or decree, land is deemed to have been possessed and occupied in either of the following cases, and no others:

1. Where it has been protected by a substantial inclosure.

2. Where it has been usually cultivated or improved.” (Emphasis supplied.)

While this court has declared that it is ‘ ‘ committed to the view that the doctrine of prescription is to be treated as the application to incorporeal rights of the Statutes of Limitations within the limits of the strong analogy between the two rules ’ ’ (Klin Co. v. New York R. T. Corp., 271 N. Y. 376, 380), it explicitly recognized in that same case that the differences between corporeal hereditaments and easements prevent full application of the same rule in both cases ” (271 N. Y., p. 379). Thus, where both doctrines are susceptible of similar treatment — such as the designation of the period of time within which the right to land by adverse possession and the right to an easement by prescription ripens (see Klin Co. v. New York R. T. Corp., supra, 271 N. Y. 376) — an analogy exists and the statutory rules are to be applied to easements. (See, also, Van Roo v. Van Roo, 294 N. Y. 731, affg. 268 App. Div. 170, 175.) Where, however, as here, we are concerned with the kind of physical conduct prerequisite to gaining an easement by prescription, the conduct specified in the statute as essential for acquiring land by adverse possession affords no analogy. The statute — section 40 — deals with the acquisition of ££ title ” to land its key words are possession ” and possessed and occupied ”, concepts necessarily related to ownership of an estate in land. (See 2 Powell on Real Property [1950], § 172, p. 7.) One does not, however, possess or occupy an easement or any other incorporeal right. An easement derives from use, and its owner gains merely “ a limited use or enjoyment of the servient land.” (3 Powell, op. cit., § 405, pp. 386-387; see, also, 5 Restatement, Property, § 457, comment o; 1 Thompson on Real Property [Perm, ed., 1939], § 315.) And, by the same token, when section 40 requires that, for the purpose of constituting an adverse possession ”, the “ land ” must be £ £ protected by a substantial inclosure ” or 1 ‘ usually cultivated or improved ”, the statute must be deemed to refer only to estates in land and, of necessity, calls for proof of one or another of the specified incidents in order to prove possession and occupancy, not a privilege or right of user. In other words, as ££ the enjoyment of easements lies in use rather than in possession ”, the only physical conduct necessary for their acquisition by prescription is ££ making use ” of a portion of another’s land (5 Restatement, id.), and one claiming a right of way by prescription is not required to prove that the way was enclosed, cultivated or improved. In short, the prescribed statutory manifestations of adverse possession — as one court wrote about section 372 of the Code of Civil Procedure, the predecessor of section 40 — can have £ 1 no application to the case of an easement as of passage.” ' (Colburn v. Marsh, 68 Hun 269, 272.)

Any possible doubt as to the correctness of this construction is dissipated by a consideration of the statute’s history. Its earliest forerunner, word for word identical with section 40, is contained in the Laws of 1849 (ch. 438, § 85). Before that time, under the common law, acquisition of title to land by adverse possession required enclosure, cultivation or improvement, but not so the acquisition of an easement by prescription. (See 2 Hilliard, Real Property [1839], pp. 53-55.) The 1849 enactment simply represented a codification of the rules prevailing at common law (see 1 Hilliard, op. cit., p. 27, and cases there collected); no change of settled principles was then intended, and nothing that has been done since suggests a design on the part of the legislature to modify those principles. In 1849, as today, neither enclosure, cultivation nor improvement was essential to spell out an easement by prescription.

However, not every use of another’s land gives rise to an easement. It is also requisite that the use be adverse, open and notorious, continuous and uninterrupted for the prescriptive period. (See Wiseman v. Lucksinger, 84 N. Y. 31; Hammond v. Zehner, 21 N. Y. 118; see, also, 5 Restatement, id.) In the case before us, there is no question as to the sufficiency of the evidence to support the affirmed findings that plaintiff and his predecessor openly and notoriously, continuously and uninterruptedly used the right of way, even up to the year 1931, for far more than twenty years, the period necessary — under the law as it then stood (Civ. Prac. Act, § 34, prior to amendment by L. 1932, ch. 264, reducing the period to fifteen years) — to spell out a prescriptive right. The proof is also more than sufficient, not only from the circumstances surrounding the inception and continuance of the use of the right of way, but also from the fact that plaintiff alone maintained it and kept it in repair, to support the further finding that the use was adverse under a claim of right. Beyond that, this court has consistently held, Under ordinary circumstances, an open, notorious, uninterrupted and undisputed use of a right of way is presumed to be adverse under claim of right and casts the burden upon the owner of the servient tenement to show that the user was by license ” (Pirman v. Confer, 273 N. Y. 357, 363; see, also, Nicholls v. Wentworth, 100 N. Y. 455; Ward v. Warren, 82 N. Y. 265; Hammond v. Zehner, supra, 21 N. Y. 118). That presumption was, of course, available to plaintiff Di Leo, and it was not rebutted by the showing of an occasional use by some of the defendants or their predecessors' (cf. Anthony v. Kennard Bldg. Co., 188 Mo. 704; Note, 170 A. L. R. 776, 825) — particularly where it was plaintiff who alone conceived the right of way, established it, maintained it and repaired it. (Cf. Pirman v. Confer, supra, 273 N. Y. 357, 363; 4 Tiffany, Real Property [3d ed., 1939], p. 565, fn. 7.)

Plaintiff’s easement having been established by prescription — the phrase is the trial court’s — before 1931”, we come to the question whether plaintiff had divested himself of his right to that easement by an agreement made in 1932. The courts below found that he had not, and in that conclusion we concur. The only subject treated in that agreement was the fixation of boundary lines, and the method chosen by the draftsmen to achieve that goal is manifest. After describing the then existing boundaries, the parties denoted the lines that they desired to establish. Then, to effectuate their purpose, each party, it was recited, “ remises, releases and quitclaims ” to his neighbor all his right, title and interest in and to the land lying ” — as the case might be — to the north or south of said Boundary Line so established ”.

It is almost self-evident that the parties had but one object in mind, the establishment of boundary lines between their respective parcels. There was neither mention of the right of way nor manifestation of an intent that plaintiff release or divest himself of his easement or any other interest. Indeed, the parties themselves noted in the instrument that 11 a question has arisen as to the location of the true Boundary Line ”, and then went on to recite that they “ desire to fix and definitely establish the Boundary Line ”. Where it appears that the purpose of the parties was solely directed towards the particular matter * * * general words will be

restrained.” (3 Williston on Contracts [Bey. ed., 1936], p. 1784.) Consequently, the words quoted above from the agreement, general though they may be, must be limited to their intended scope, taken to refer only to the boundary lines of the parties and to have no effect on plaintiff’s right of way. As the' Supreme Court of Wisconsin declared in a case not unlike the present, ‘ These quitclaim deeds constituted mere disavowals by the parties that they made any claim to real estate on the other side of the dividing [boundary] line, for the sole and only purpose of finally and permanently fixing the dividing line. The quitclaims were incidental to the establishment of the line, and when they accomplished this purpose they had no other or further object to serve.” (Ogden v. Straus Bldg. Corp., 187 Wis. 232, 255.)

As a matter of fact, plaintiff continued to use the right of way until at least 1946, fourteen years after the making of the agreement, without objection or interference from the parties to it, and such conduct, constituting as it does a practical construction of sorts (see, e.g., Brooklyn Public Lib. v. City of New York, 250 N. Y. 495, 501), goes far toward establishing that neither plaintiff nor anyone else regarded the agreement as a release or a divestiture of his easement. Moreover, in 1946, when Port Chester Lumber, a party to the 1932 agreement, conveyed its land to Pecksto, it made that conveyance “ SUBJECT TO * * * Possible rights of others to pass and re-pass over the said premises from land adjoining the above described premises to the South ”, that is, from plaintiff’s property. Here, too, is recognition that plaintiff had not divested himself of his easement by the 1932 agreement or anything contained in it.

Although defendant White Plains had previously owned the property now held by Waef, it concededly has no interest in that property at the present time; indeed — we were told upon argument of the appeal — White Plains had gone out of existence even before this action was commenced. Since it also appears that it had not in any way interfered with plaintiff’s use of his easement, the judgment against it may not stand.

That leaves for consideration the judgment rendered against those defendants who are the mortgagees of the parcel belonging to Waef. As owners of an interest in the alleged servient estate, they were properly made parties to the action; the value of their security would necessarily be affected by the outcome of the litigation. (See, e.g., Carter v. Sullivan, 281 Mass. 217, 227-228.) Whether there is basis for the judgment against them in its present form, however, poses another question. It not only restrains them from interfering in the future with plaintiff’s ingress and egress over the right of way, but it directs them to remove any obstruction now encroaching upon it. Since there is no proof that any one of the mortgagees took part in setting up or maintaining the obstruction complained of, the judgment, insofar as it orders them to remove it, is unwarranted. (Cf. Gulick v. Hamilton, 287 Ill. 367; McNeil v. Kennedy, 88 W. Va. 524.)

The judgment should be modified (1) hy reversing so much thereof as grants relief against defendant White Plains Terminal Corp. and directing that the complaint against it he dismissed, without costs to said defendant, and (2) by striking therefrom so much as directs defendants-mortgagees, Ida C. Butterworth, Arthur F. Riegel, Edward R. Riegel, Walter J. Riegel and Frank E. Donahue, to remove obstructions, without costs to said defendants; and, except as so modified, the judgment should be affirmed, with costs to plaintiff in this court against all defendants except White Plains Terminal Corp., Butterworth, Donahue and the defendants Riegel.

Loughran, Ch. J., Lewis, Conway, Desmond, Dye and Froessel, JJ., concur.

Judgment accordingly.

      . As is perhaps manifest, use of an easement such as a right of way, if open and continuous, provides the same assurance of notoriety and utilization as would enclosure, cultivation or improvement in the case of land itself.


author: Froessel, J.

text:
    E. Susan Curren et al., Appellants, v. Howard O’Connor et al., Respondents.
    Argued November 18, 1952;
    decided December 5, 1952.

      Joseph F. Curren, in person, and John McKim Minton for appellants.
    I. Whether the status of the injured plaintiff was that of a licensee or that of an invitee, the complaint alleges actionable negligence. (Kane v. Walsh, 295 N. Y. 198; Dyer v. Broadway Central Bank, 252 N. Y. 430; Condon v. Associated Hosp. Service, 287 N. Y. 411; Pomerance v. Pomerance, 301 N. Y. 254; Ferro v. Sinsheimer Estate, 256 N. Y. 398; Bernal v. Baptist Fresh Air Home Soc., 275 App. Div. 88; Mulligan v. New York Athletic Club, 302 N. Y. 705; Hayton v. McLaughlin,
      289 N. Y. 66; Carbone v. Mackchil Realty Corp., 296 N. Y. 154; Roth v. Prudential Life Ins. Co., 266 App. Div. 872; Sheingold v. Behrens, 275 App. Div. 686.) II. Dismissal of the complaint before trial unfairly deprived plaintiffs of their day in court and determined as a matter of law questions of fact which should be reserved for a trial. (Hayton v. McLaughlin, 289 N. Y. 66; Greenfield v. Hospital Assn. of City of Schenectady, 258 App. Div. 352; Bowers v. City Bank Farmers Trust Co., 282 N. Y. 442; Silverberg v. Schweig, 288 N. Y. 217.) III. There is a need for clarification as to the duty of an owner to an invited guest. (Schwartz v. Slatkin, 278 App. Div. 947; Bogateroff v. Caplan, 108 N. Y. S. 2d 205; Vaughan v. Transit Development Co., 222 N. Y. 79; Mendelowitz v. Neisner, 258 N. Y. 181; Walsh v. Fitchburg R. R. Co., 145 N. Y. 301; Fox v. Warner-Quinlan Asphalt Co., 204 N. Y. 240; Carbone v. Mackchil Realty Corp., 296 N. Y. 154; Patnode v. Foote, 153 App. Div. 494; Higgins v. Mason, 255 N. Y. 104; Millspaugh v. Northern Indiana Public Service Co., 104 Ind. App. 540; Rozell v. Rozell, 281 N. Y. 106.)

      Samuel E. Swiggett for respondents.
    The judgment entered on the order of the Appellate Division is not erroneous. (Haefeli v. Woodrich Engineering Co., 255 N. Y. 442; Barrett v. Brooklyn Heights R. R. Co., 188 App. Div. 109, 231 N. Y. 605; Roche v. American Ice Co., 140 App. Div. 341; Downes v. Elmira Bridge Co., 179 N. Y. 136; Roth v. Prudential Life Ins. Co., 266 App. Div. 872; Sheingold v. Behrens, 275 App. Div. 686, 301 N. Y. 816; Klein v. Ramapo Park, 253 App. Div. 824.)
   Froessel, J.

Plaintiff wife brought this action to recover damages for personal injuries; her husband, in a companion cause of action, sues for medical expenses and loss of services incidental thereto; both charge defendants with negligence. By two separate motions, each defendant challenges the legal sufficiency of the complaint under rule 106 of the Rules of Civil Practice. Special Term denied their motions; the Appellate Division reversed and granted the motions to dismiss. If, of course, in any aspect of the facts stated, plaintiffs are entitled to recovery, the complaint should not have been dismissed (Pomerance v. Pomerance, 301 N. Y. 254).

We agree with the Appellate Division that, under the allegations of the challenged pleading, plaintiffs were social guests of defendants (Sheingold v. Behrens, 275 App. Div. 686, 276 App. Div. 973, motion for leave to appeal denied 301 N. Y. 816; Roth v. Prudential Life Ins. Co., 266 App. Div. 872; Vaughan v. Transit Development Co., 222 N. Y. 79; 4 Shearman and Redfield on Negligence, § 781; Prosser, Torts, p. 627). However, according the allegations of the complaint a liberal construction, as required by section 275 of the Civil Practice Act, we cannot say as a matter of law that upon no theory of proof could a recovery be predicated. Plaintiffs’ evidence may not be pleaded (Civ. Prac. Act, § 241). Our courts have been liberal with respect to- the sufficiency of complaints in negligence actions, and particularly so in the absence of a bill of particulars.

While it is well settled that the mere polishing of a floor, thereby creating a slippery condition, is not negligence, even as to an invitee (Nelson v. Salem Danish Lutheran Church, 296 N. Y. 870; Batten v. Tobey, 318 Mass. 64; Cutro v. Scranton Medical Arts Bldg., 329 Pa. 382; Brown v. Davenport Holding Co., 134 Neb. 455; Nelson v. Smeltzer, 221 Iowa 972), it is nevertheless possible that plaintiffs may be able, upon a trial, under the allegations of paragraphs second and sixth of the complaint, to submit evidence entitling them to recover (Higgins v. Mason, 255 N. Y. 104, 108-109; Faber v. Meiler, 278 App. Div. 849). In the cases relied on by the Appellate Division (Sheingold v. Behrens, supra; Roth v. Prudential Life Ins. Co., supra, as well as Faber v. Meiler, supra), the parties at least were permitted to go to trial.

The judgment should be reversed and the orders of Special Term affirmed, with costs in this court and in the Appellate Division.

Loughran, Ch. J., Lewis, Conway, Desmond, Dye and Fuld, JJ., concur.

Judgment accordingly.


author: Per Curiam.

text:
    In the Matter of the Arbitration between Amtorg Trading Corporation, Respondent, and Camden Fibre Mills, Inc., Appellant.
    Submitted October 24, 1952;
    decided December 5, 1952.

      Alexis G. Coudert and A. Michael Frothingham for appellant.
    I. Amtorg waived the right to demand arbitration. (Matter of Zimmerman v. Cohen, 236 N. Y. 15; Nagy v. Arcas Brass & Iron Co., 242 N. Y. 97; Matter of Feuer Transp. [Local No. 445], 295 N. Y. 87; Uhrig v. Williamsburgh City Fire Ins. Co., 101 N. Y. 362; Boyle v. Hamburg-Bremen Fire Ins. Co., 169 Pa. 349; Moyer v. Sun Ins., 176 Pa. 579; Rice v. Insurance Co., 17 Pa. Superior Ct. 261; London & Lancashire Fire Ins. Co. v. Storrs, 71 F. 120.) II. The U. S. S. B. Chamber of Commerce Foreign Trade Arbitration Commission is disqualified as a matter of law to act as arbitrator between these parties. (Matter of Friedman [Friedman], 215 App. Div. 130; Matter of Knickerbocker Textile Corp. [Sheila-Lynn, Inc.], 172 Misc. 1015; Matter of United Elec., Radio & Mach. Workers [General Elec. Co.], 193 Misc. 146; Matter of Miller [Weiner], 260 App. Div. 444; Matter of Dodge & Stevenson Mfg. Co., 77 N. Y. 101; Leonard v. Mulry, 93 N. Y. 392; Matter of Ryers, 72 N. Y. 1.) III. Camden is not chargeable with notice in 1947 of the facts establishing disqualification. IV. The order of Special Term was proper. (Matter of Lipschutz [Gutwirth], 304 N. Y. 58; Ballas v. Mann, 82 N. Y. S. 2d 426; 6 Williston on Contracts [Rev. ed.], § 1923-A; Matter of Avalon Fabrics [Raymill Fabrics Corp.], 195 Misc. 267; Matter of Albert [Spiegelberg], 146 Misc. 811; Palmer Plastics v. Rubin, 108 N. Y. S. 2d 514.)

      Charles Recht, Osmond K. Fraenkel and Jacob Lefkowits for respondent.
    I. Camden is bound by its contract to arbitrate. (Matter of Lipschutz [Gutwirth], 304 N. Y. 58; Matter of Avalon Fabrics [Raymill Fabric Corp.], 195 Misc. 267.) II. The arbitrator named in the contract is competent to act. TTT- Amtorg never waived arbitration.
   Per Curiam.

Appellant, Camden Fibre Mills, Inc. (hereinafter called Camden), as purchaser, entered into a contract with Amtorg Trading Corporation (hereinafter called Amtorg), as seller, on September 17, 1947. Amtorg is a domestic corporation, organized in 1924, but is in effect an agency of the Soviet Government in carrying on trade and commerce in this country. Camden is a Pennsylvania corporation. The contract provides for arbitration of disputes — not settled by agreement of the parties’ representatives in New York — before the IT. S. S. R. Chamber of Commerce Foreign Trade Arbitration Commission in Moscow, TJ. S. S. R. Such commission is a public organization, subject to the general supervision of the People’s Commissariat for Foreign Trade. It is however a juridical person, having power to own property, make contracts, sue and be sued; it has its own income, funds and budget, and conducts its own elections.

The Appellate Division has certified to us two questions:

‘ ‘ 1. Did the Court at Special Term commit error in appointing a substitute arbitrator in New York in lieu of the arbitrator in Moscow designated in the contract dated September 17, 1947, between the parties?

‘ ‘ 2. On the record in this case should prosecution of the action herein commenced by Camden Fibre Mills, Inc. against Amtorg Trading Corporation for the latter’s breach of the contract dated September 17, 1947, between said parties, be stayed until arbitration be had before the arbitrator and at the place designated in said contract, namely, before the U. S. S. R. Chamber of Commerce Foreign Trade Arbitration Commission in Moscow, U. S. S. R., subject to the conditions stated in said order? ”

Camden bases its appeal from the order of the Appellate Division upon three grounds: (1) that Amtorg had, by its conduct, waived arbitration; (2) that the commission is disqualified from acting as arbitrator as a matter of law; (3) that Camden is not chargeable with notice as of 1947 that the commission was so disqualified.

The question of waiver was a question of fact, necessarily passed on and properly disposed of below. We also agree with the Appellate Division’s disposition of the remaining issues. Camden chose to do business with Amtorg and to accept, as one of the conditions imposed, arbitration in Russia; it may not now ask the courts to relieve it of the contractual obligation it assumed.

It may be noted that the order of the Appellate. Division does not preclude Camden from taking appropriate action should the arbitration in fact deprive it of its fundamental right to a fair and impartial determination. If, as conceded by Amtorg, the arbitration is to be conducted pursuant to the provisions of article 84 of the Civil Practice Act and enforced thereunder, Camden may move to vacate an award in favor of Amtorg for evident partiality of the arbitrators (Civ. Prac. Act, § 1462) or may object to confirmation of such award on that ground (Civ. Prac. Act, §§ 1458, 1461). If such award were to be enforced by action, it would be a valid defense that the proceedings were not conducted in such manner as to result in a fair and impartial determination (Gilbert v. Burnstine, 255 N. Y. 348, 357-358).

Accordingly, the order appealed from should be affirmed, with costs, and the questions certified answered in the affirmative.

Loughran, Ch. J., Lewis, Conway, Desmond, Dye, Fuld and Froessel, JJ., concur.

Order affirmed, etc.


author: Desmond, J. Conway, J.

text:
    In the Matter of the Public Service Commission of the State of New York, Appellant, against Alfred V. Norton, a Justice of the Supreme Court of the State of New York, et al., Respondents.
    Argued December 2, 1952;
    decided December 5, 1952.

      Lawrence E. Walsh, Counsel (George H. Kenny, Arthur Brooks, Edward D. Cohen, Sol Neil Corbin and Joanne MacFarlane of counsel), for appellant.
    I. Denial of prohibition under the circumstances of this case is reviewable on appeal. (Matter of Baltimore Mail S. S. Co. v. Fawcett, 269 N. Y. 379.) II. The Supreme Court has no power to grant the injunctive relief sought in the action brought by the city. The commission has been given exclusive regulatory jurisdiction of the railway company and its passenger service. (Maltbie v. Long Beach Bus Co., 272 App. Div. 1069, 297 N. Y. 723; Spring Brook Water Co. v. Village of Hudson Falls, 269 App. Div. 515.) III. The Supreme Court has no power to withdraw the passenger service of the railway company from commission regulation. (Albright v. Fisher, 164 Mo. 56; State ex rel. Abel v. Gates, 190 Mo. 540; Slade v. City of Lexington, 121 S. W. 621 [Ky.]; Majestic Theatre Co. v. Cedar Rapids, 153 Iowa 219; Durritt Hardware v. Monroe, 199 La. 329; People v. Mayor of City of N. Y., 32 Barb. 35; Greenberg v. O’Brien, 149 Misc. 866, 240 App. Div. 970; Mezey Motors v. O’Dwyer, 195 Misc. 160; McChord v. Louisville & Nashville R. R. Co., 183 U. S. 483; Haywood v. State Corp. Comm., 151 Kan. 1009; New York State Elec. & Gas Corp. v. Maltbie, 169 Misc. 144.) IV. The Supreme Court has no power to abridge the right of any person to petition the commission. (Near v. Minnesota, 283 U. S. 697; Thomas v. Collins, 323 U. S. 516; People v. Canal Bd. of State of N. Y., 55 N. Y. 390; Story v. Jersey City & Bergen Point Plank Road Co., 16 N. J. Eq. 1.) V. The Supreme Court has no power itself to determine the extent of passenger service to be furnished by the railway company. (People ex rel. Linton v. Brooklyn Heights R. R. Co., 172 N. Y. 90; Honolulu R. T. Co. v. Hawaii, 211 U. S. 282; Morrell v. Brooklyn Borough Gas Co. No. 1, 231 N. Y. 398; Bronx Gas & Elec. Co. v. Public Service Comm., 190 App. Div. 13.) VI. The action by the city supplies no basis for action by the Supreme Court. (Matter of State Ind. Comm. [Self-Insurer’s Assn.], 224 N. Y. 13; Manhattan Stor. & Warehouse Co. v. Movers & Warehousemen’s Assn., 289 N. Y. 82; Long Island Lighting Co. v. Maltbie, 176 Misc. 1, 262 App. Div. 376, 287 N. Y. 691; Kane v. Walsh, 295 N. Y. 198; New York Post Corp. v. Kelley, 296 N. Y. 178.) VH. Prohibition is the only adequate remedy available to the commission. (Quimbo Appo v. People, 20 N. Y. 531; Matter of Culver Contr. Corp. v. Humphrey, 268 N. Y. 26; Public Service Comm. v. Eighth Judicial Dist. Ct., 61 Nev. 245; State v. Flynn, 236 Mo. App. 577; Hislop v. Rodgers, 54 Ariz. 101.) VIII. Relief is sought not by a private litigant but by the public agency whose jurisdiction has been invaded. (Abelleira v. District Ct., 17 Cal. 2d 295; State ex rel. Bettman v. Court of Common Pleas, 124 Ohio St. 269.)

      Bruce Bromley for Staten Island Rapid Transit Railway Company, respondent, in support of appellant’s position.

      John C. Crary, Jr., for Alfred V. Norton, respondent.

      Denis M. Hurley, Corporation Counsel (James J. Thornton, John F. Kelly, Francis I. Howley and John A. Radlien of counsel), for City of New York, respondent.
    I. Defendant, in order to continue to enjoy, its franchises, is required to carry persons and property on its railroad. (Bloodgood v. Mohawk & Hudson R. R. Co., 18 Wend. 2; People ex rel. Wheeler v. Long Island R. R. Co., 31 Hun 125; People v. New York, L., E. & W. R. R. Co., 104 N. Y. 58; Matter of Quinby v. Public Service Comm., 223 N. Y. 244.) II. Petitioner has no judicial power and it therefore cannot pass on questions of law. (Kovarsky v. Brooklyn Union Gas Co., 253 App. Div. 635, 279 N. Y. 304; People ex rel. Village of South Glens Falls v. Public Service Comm., 225 N. Y. 216; City of New York v. Interborough R. T. Co., 257 N. Y. 20; Matter of Quinby v. Public Service Comm., 223 N. Y. 244; Siler v. Louisville & Nashville R. R. Co., 213 U. S. 175.) III. Plaintiff is properly before the court in seeking a declaration of the rights of the parties under the franchise agreement by way of declaratory judgment. (Post v. Metropolitan Cas. Ins. Co., 227 App. Div. 156, 254 N. Y. 541; Loesch v. Manhattan Life Ins. Co., 128 Misc. 232; Manhattan Bridge Three-Cent Line v. City of New York, 204 App. Div. 89, 236 N. Y. 559; Massachusetts v. Mellon, 262 U. S. 447; James v. Alderton Dock Yards, 256 N. Y. 298; People v. Canal Bd. of State of N. Y., 55 N. Y. 390; Mayor of City of N. Y. v. Board of Health, 31 How. Prac. 385; Craig v. Commissioners of Sinking Fund of City of N. Y., 208 App. Div. 412.) IV. The action for a declaratory judgment was properly instituted in the Supreme Court. The court having jurisdiction of the subject matter, prohibition will not lie. (People ex rel. Ballin v. Smith, 184 N. Y. 96; People ex rel. Livingston v. Wyatt, 186 N. Y. 383; People ex rel. Hummel v. Trial Term, 184 N. Y. 30; People ex rel. Woodbury v. Hendrick, 215 N. Y. 339; Matter of Harris Motors v. Klapp, 296 N. Y. 242.)
   Desmond, J.

In this article 78 (Civil Practice Act) proceeding we granted, to appellant Public Service Commission, leave to appeal to this court, so that we might review this question: is the commission entitled to an order, in the nature of prohibition, restraining (or restricting) the continuance of an action, now pending in Supreme Court, Richmond County, and hereafter more fully described, in which the City of New York, respondent herein, is plaintiff, and the Staten Island Rapid Transit Railway Company, another respondent in this prohibition proceeding, is defendant.

Respondent Staten Island Railway Company (hereafter called “Railway”), which carries interstate freight and local intrastate passengers over its lines on Staten Island, Richmond County, New York, petitioned respondent commission, in June, 1952, for authority to discontinue all passenger service, asserting that its passenger business (3,500,000 persons annually) results in heavy and increasing losses. The commission, on receipt of that petition, commenced a proceeding before itself thereon, reviving, also, an old proceeding in the nature of an investigation into the adequacy of Railway’s passenger service. Hearings, in both those proceedings tried together, were had before the commission on various days in July, September and October, 1952, until they were summarily halted by a stay or temporary restraining order, granted, ex parte, on October 30, 1952, by a Supreme Court Justice, in the Supreme Court action, above referred to, which had been begun on that same day. By the terms of that stay, Railway was restrained, pending the hearing and determination of a motion by plaintiff city for a temporary injunction, “ from taking any acts or actions, participating in or conducting any proceedings that could or may result in the abandonment, discontinuance or curtailment of existing passenger rapid transit service presently operated and maintained ” by Railway, on Staten Island. Thus, a Publio Service Commission proceeding to pass on matters as to which the commission unquestionably had jurisdiction (see Maltbie v. Long Beach Bus Co., 272 App. Div. 1069, affd. 297 N. Y. 723; Public Service Law, § 49, subd. 2; §§ 51, 51-b), was forced to an abrupt stop, after long hearings and after much testimony had been offered by all parties thereto except the city, which had participated in the hearings but had not yet put in its case. The critical nature of the situation brought about by the issuance of this stay, becomes more apparent when we look at section 51-b of the Public Service Law (supra), enacted at the 1952 session of the Legislature (L. 1952, ch. 431). We need not now adventure on a precise construction of that new statute, but it does say that a railway company, petitioning the commission for authority to “ discontinue any train engaged in the transportation of passengers ’ ’, may not be required by the commission to continue existing service for more than ninety days after the making by the commission of an order for such continuance, pending the commission’s investigation. The commission had made such an order here, and we are told that it will (as extended by consent) expire on December 19, 1952.

The Supreme Court stay, made as it was in an action in which the city and Railway were the only parties, did not in terms run against the commission, but it stopped the commission in its tracks, nonetheless. On the return day of the city’s motion for a temporary injunction in the cause, counsel for the commission came into court and asked the Justice presiding to vacate the stay insofar as it enjoined the continuance of the proceedings before the commission. The city objected to such a disposition. The court refused to entertain the commission’s motion unless the commission would first move to intervene in the Supreme Court action. The commission, for reasons easily understandable, declined so to enter the suit as a party. Railway, likewise, moved to vacate the stay, but decision on its motion for vacatur was reserved. Next day, the commission commenced this prohibition proceeding. The Supreme Court, presumably because prohibition had so been demanded, withheld decision as to ending the stay and as to granting or denying a temporary injunction. The stay is still in effect.

The Appellate Division, without opinion and without stating whether its determination was made in the exercise of its discretion, or on the law, or both (it was not obligated to make any such announcement), denied the commission’s application.

Herein we discuss, first, a question as to- our own jurisdiction, that is, whether we can review this denial of prohibition by the Appellate Division, since prohibition is, generally speaking, a discretionary remedy (People ex rel. Cuvillier v. Hagarty, 238 N. Y. 621). But prohibition becomes a matter of right, and the question one of law, when, first, the action sought to be prohibited is beyond the jurisdiction of the body sought to be restrained, and when, second, no remedy other than prohibition is available (Matter of Baltimore Mail S. S. Co. v. Fawcett, 269 N. Y. 379, 382, 383, 384; and see Matter of Murtagh v. Leibowitz, 303 N. Y. 311, 319). This opinion will be concerned, prin-' cipally, with the first of those two requirements. As to the second (no other remedy available) it seems to us that the commission took every step reasonably available by moving to vacate the stay, and by asking the Appellate Division, in the petition for prohibition, to vacate or modify the stay (see Civ. Prac. Act, § 897). Perhaps it can be theorized that the commission could have, and should have, appealed from the order refusing vacatur (see discussion in Cohen and Karger, Powers of the New York Court of Appeals, § 92), but the prayer to the Appellate Division for that same relief was equivalent to an appeal (see Marty v. Marty, 66 App. Div. 527). Practically speaking, prohibition was the commission’s only recourse.

We now consider the first requirement of Matter of Baltimore Mail S. S. Co. v. Fawcett (supra): that is, as to whether there was, in the Supreme Court suit, action so clearly beyond that court’s broad jurisdiction as to justify prohibition. That suit is for a declaratory judgment, and for an injunction appropriate to the declaration of rights requested. The complaint describes the pending Public Service Commission’s proceedings, and does not, in terms, at least, question the jurisdiction of that body to act on the questions before it. The complaint then alleges that Railway’s operations on Staten Island are carried on pursuant to certain consents and franchises granted by the city or its predecessors to Railway and its predecessors, that Railway, under those consents and franchises, and under the laws of this State, “ is required to carry both passengers and property during the period it operates its aforesaid lines of railroad ”, that although Railway cannot legally abandon passenger service and continue to operate a freight railroad only, it threatens to do just that, that its passenger service is vitally necessary to New York City commuters and others, that irreparable damage will be suffered by the city and its inhabitants if Railway’s passenger operations come to an end, that plaintiff has no adequate remedy at law, and that an actual controversy exists between the city and Railway in respect to Railway’s alleged obligation to continue to carry both persons and property, on its Staten Island lines. The prayer of the complaint, besides asking an injunction, is for a declaration that Railway may not separately discontinue its carriage of passengers, despite any order of the commission to the contrary, and whether or not the commission shall have decided, before that date, the cases there pending.

We thus have this situation: the commission is performing its lawful and customary function of investigating and regulating the passenger service of an intrastate carrier, the Supreme Court is entertaining a declaratory judgment suit as to the right of Railway to end its passenger service, and the Supreme Court, purportedly in aid of its own jurisdiction, has stayed the commission from exercising its jurisdiction. On the one hand, the Supreme Court has broad powers as to declaratory judgment suits (Civ. Prac. Act, § 473), and, on the other hand, the commission has from the Legislature an inclusive grant of power to deal with intrastate railway passenger service (Maltbie v. Long Beach Bus Co., supra; Public Service Law, § 49, subd. 2; §§ 51, 51-b, supra). Both parties to this prohibition proceeding seem at times to argue that those grants of power are, as to this situation, overlapping or conflicting and that one or the other branch of government must surrender the field to the other. We do not think that is the position. A declaratory judgment suit is, ordinarily, an appropriate method of settling disputes as to contract rights and obligations like these, and a stay or injunction is a conventional method of maintaining the status quo during such a suit. But regulation of public utility services is a legislative function delegated to the commission (Public Service Law, §§ 5, 45, 49; Matter of Trustees of Vil. of Saratoga Springs v. Saratoga Gas, Elec. Light & Power Co., 191 N. Y. 123; Atlantic Coast Line v. N. Car. Corp. Comm., 206 U. S. 1), and an injunction against the performance thereof by the Legislature’s agent is a restraint, offensive to constitutional government and the orderly conduct of public affairs, against the State Government’s legislative processes.

The commission asks us to prohibit all further steps in the Supreme Court suit and to vacate the pending stay. In frankness, it concedes that the latter relief is all that it needs. Thus, a way appears, to let court and commission each carry on its appointed function, without trespass on the separate premises of the other. The Supreme Court may continue to exercise jurisdiction of its suit, but it must strike down forthwith the offending stay, and it must make no other order or judgment which halts, interferes with or prevents the continuance before the commission, of the proceedings there now pending. We need not, and do not, make any premature ruling as to how far the court may go in any declarations of rights it may hereafter include in any judgment entered in the suit. Obviously, we can express no opinion at all to the merits of the underlying contest between the city and Railway. We hold only that the court must not stay the commission' from performing its statutory duties. This does not take from the Supreme Court its power and right to pass on questions of law, since any determination by the commission can be reviewed in that court by appropriate procedures under article 78 of the Civil Practice Act, and if circumstances make it appropriate, a stay may be granted pending such court review (Civ. Prac. Act, § 1299).

It is no argument against granting a prohibition order here, that it will restrain interlocutory, intermediate or incidental proceedings in a suit of which the tribunal to be restrained has general jurisdiction (see Quimbo Appo v. People, 20 N. Y. 531, 541, 542; Matter of Culver Contr. Corp. v. Humphrey, 268 N. Y. 26, 39, 40; Matter of United States of Mexico v. Schmuck, 293 N. Y. 264, 294 N. Y. 265; Matter of Hogan v. Court of General Sessions, 296 N. Y. 1, 8, 9).

The order of the Appellate Division should be modified, without costs, to the extent that this proceeding be remitted to that court to issue an order, in the nature of prohibition, directed to respondent Hon. Alfred V. Norton, Justice of the Supreme Court of the State of New York, and any other Justice or Justices of said court, prohibiting them, and each of them, from continuing in effect so much of the stay contained in the order of October 30, 1952, in an action in that court entitled “ The City of New York, Plaintiff, against The Staten Island Rapid Transit Railway Company, Defendant ”, or. from making or continuing any other order or determination, as in any manner prevents the continuance before appellant Public Service Commission of any proceedings having to do with the passenger service of said Staten Island Rapid Transit Railway Company, or the performance of any of the said commission’s statutory duties in relation thereto, nothing in this our determination to have any effect on the maintenance and determination of the action, above described, brought by said City of New York, except that in said action there may not be any stay, injunction or other order or judgment which has the effect of preventing, or interfering with, the performance by the said commission of any of its said statutory duties.

Conway, J.

(concurring). I concur in view of the fact that it is permitted that the Supreme Court action continue to judgment. In that plenary action the Supreme Court will construe the franchise granted to the Staten Island Rail Road Co. and the Staten Island Railway Co. (incorporated under the Railroad Law of 1850 [L. 1850, ch. 140]), the predecessors of the Staten Island Rapid Transit Railway Company (hereinafter called Railway). Railway under its franchise has the right to transport (a) passengers and (b) freight. Its passenger service is intrastate. Its freight service is interstate. The commission has jurisdiction only over the former. The Interstate Commerce Commission has jurisdiction over the latter. Railway, rendering service both for passengers and freight, is the usual integrated railroad. The Supreme Court has jurisdiction over Railway and may enforce its orders and judgments against Railway affecting both passenger and freight service. The commission may make orders only as to passenger service. The Interstate Commerce Commission may make orders as to freight. It was for that reason that the City of New York brought its plenary action against Railway seeking to so construe its franchise that its passenger and freight service might be held to be interdependent and nondivisible. Thus, Staten Island would be certain to have an integrated railroad and not a railroad carrying only freight after having abandoned its passenger -service in its entirety. That might well result in irreparable damage, so it is claimed by the city, in that, under such conditions, no other railroad would enter Staten Island to render passenger service alone. That also, so the city argues, is the reason why Railway has made its application solely to the commission to discontinue and abandon the running of passenger trains on Staten Island since the commission has no jurisdiction over Railway’s freight service and thus when the ninety-day order for which provision is made in section 51-b of the Public Service Law expires on December 19th next, Railway will have divided its obligations under its franchise and charter into two parts and will have succeeded in abandoning one of those parts. Thus, says the city, Railway will have a profitable franchise to transport freight alone and Staten Island will never again have a railroad for the transport of passengers. Thus it may very well be that the Supreme Court is the only tribunal in this State which has plenary power to act with reference to Railway and its services as an entirety and that the Public Service Commission of the State of New York may eventually have to seek the aid of the Supreme Court because of its complete control of Railway while the commission has but partial control.

Loughran, Ch. J., Lewis, Dye, Fuld and Froessel, JJ., concur with Desmond, J.; Conway, J., concurs in separate opinion.

Ordered accordingly.


author: Loughban, Ch. J.

text:
    Mary Perutz, as Administratrix of the Estate of Arthur Perutz, Deceased, Respondent, v. Bohemian Discount Bank in Liquidation, Appellant.
    Argued October 6, 1952;
    decided January 9, 1953.

      Philip F. Farley for appellant.
    I. The obligation of defendant under the contract and its liability for breach thereof must be determined under the laws of Czechoslovakia. (Holzer v. Deutsche Reichsbahn-Gesellschaft, 277 N. Y. 474; Zimmermann v. Sutherland, 274 U. S. 253; Deutsche Bank v. Humphrey, 272 U. S. 517; Wulfsohn v. Russian Socialist Federated Soviet Republic, 234 N. Y. 372; Salimoff & Co. v. Standard Oil Co. of N. Y., 262 N. Y. 220; Dougherty v. Equitable Life Assur. Soc. of U. S., 266 N. Y. 71; Oetjen v. Central Leather Co., 246 U. S. 297; United States v. Pink, 315 U. S. 203; Anderson v. N. V. Transandine Handel-Maatschappij, 289 N. Y. 9.) II. Under the laws of Czechoslovakia defendant has committed no breach of contract and is not liable to plaintiff for damages. (Kraus v. Zivnostenska Banka, 187 Misc. 681; Spitz v. Schlesische Kredit-Anstalt A. G., N. Y. L. J., Jan. 21, 1948, p. 267, col. 6; Werfel v. Zivnostenska Banka, 260 App. Div. 747; Jacobson v. Warzycki, 275 App. Div. 795; Canada Southern Ry. Co. v. Gebhard, 109 U. S. 527; Zivnostenska Banka Nat. Corp. v. Frankman, [1950] A. C. 57; Kahler v. Midland Bank, [1950] A. C. 24.) III. The fact that the laws of Czechoslovakia do not prohibit her courts from adjudicating liability or entering a judgment does not create a cause of action in favor of plaintiff or permit plaintiff to enforce payment in dollars contrary to the contract.

      Lincoln Orens for respondent.
    I. The currency regulations of Czechoslovakia in no way prevent the court from adjudicating liability and entering judgment. (Van der Veen v. Amsterdamsche Bank, 178 Misc. 668; Singer v. Yokohama Specie Bank, 293 N. Y. 542; Banque Mellie Iran v. Yokohama Specie Bank,
      299 N. Y. 139; Leeds v. Guaranty Trust Co. of N. Y., 65 N. Y. S. 2d 431, 272 App. Div. 909, 297 N. Y. 1019.) II. A judgment by a court of this State, in an action for money damages, can only be rendered in American dollars. (Deutsche Bank v. Humphrey, 272 U. S. 517; Petkus v. Lietuvos Ukio Bankas, 123 Misc. 193; Matter of United Shellac Corp. [Jordan Ltd.], 277 App. Div. 147; Metcalf Co. v. Mayer, 213 App. Div. 607; Sirie v. Godfrey, 196 App. Div. 529.) III. Execution upon a judgment is procedural and matters of procedure are determined by the law of the forum. (Murray v. New York, O. & W. R. R. Co., 242 App. Div. 374; Ackermann v. Berriman, 61 Misc. 165; Myers v. Moran, 113 App. Div. 427; Laird v. Carton, 196 N. Y. 169; Franklin Sugar Refining Co. v. Lipowicz, 247 N. Y. 465; Pritchard v. Norton, 106 U. S. 124; Meacham v. Jamestown, F. & C. R. R. Co., 211 N. Y. 346; Matter of Gantt [Hurtado & Cia], 297 N. Y. 433.) IV. The currency regulations of Czechoslovakia under the communist regime are confiscatory in nature and should not be enforced by our courts. V. The courts of New York State will not execute the penal laws of another State, nor will they execute or enforce the revenue laws of another State or country. (Loucks v. Standard Oil Co. of N. Y., 224 N. Y. 99; State of Colorado v. Harbeck, 232 N. Y. 71; Beadall v. Moore, 199 App. Div. 531.) VI. Appellant did not perform the contract in conformity with Czechoslovak law.
   Loughban, Ch. J.

At the times and on the occasions to which we shall refer, the defendant was a banking corporation organized and existing under the laws of Czechoslovakia with a place of business at Prague. In 1940, it acquired all the assets and assumed all the liabilities of the Bank of Commerce and Industry, another Czechoslovakian banking corporation.

Arthur Perutz was an employee of the Bank of Commerce and Industry from July 1, 1905 to January 31, 1940; he was then a citizen of Czechoslovakia and so remained until March 4, 1946, when he became a naturalized citizen of the United States; on November 6, 1940, he had become a resident of the county of New York where he lived thereafter until his death.

Among the liabilities of the Bank of Commerce and Industry assumed by the defendant bank were agreements which entitled Arthur Perutz to be paid a pension of 6,000 Czechoslovakian crowns per month commencing I'ebruary 1, 1940. These agreements contained the following provisions:

1 ‘ The pension provided for in these regulations will be paid in advance in monthly instalments at the cashier’s office of the bank. The monthly instalments will always be rounded up to full crowns; if the right to the pension terminates during the course of the month a refund of the amount paid will not be demanded.

“ The persons entitled to the pensions must upon request submit before every payment a certificate that they are still alive or that they are still widows.

‘1 Place of performance is always the place of business of the bank, even if the instalments should be sent by postal order or in any different manner — which the bank has the right to do.”

On June 12, 1949, Arthur Perutz died and his wife was duly appointed his administratrix by the Surrogate’s Court of New York County. In that capacity, she was substituted as party plaintiff in this action which had been commenced by Arthur Perutz to recover the sum of 396,857 Czechoslovakian crowns that had become due to him in his lifetime and had not been paid to him or to the plaintiff as his administratrix — except by entry of a credit of the amount thereof to a foreign blocked account standing in the name of Arthur Perutz in the defendant bank at Prague.

The above-recited facts were stipulated by the parties to this action as were also translations of the relevant statutes, laws, and decrees that were in effect in Czechoslovakia from 1924 to the time of the commencement of this action. These statutes,' laws and decrees forbade a resident of Czechoslovakia to make any payment in currency or in foreign exchange to a nonresident of that country, unless such payment was licensed by the Czechoslovakian currency control authority. Under the same provisions of law, a nonresident judgment creditor was not entitled to enforce a judgment in Czechoslovakia unless payment of the amount thereof was licensed by the same authority.

The trial court dismissed the complaint. But the Appellate Division reversed the judgment of dismissal and granted judgment to the plaintiff for $7,937.14 (the dollar equivalent of 396,857 Czechoslovakian crowns). The Appellate Division also refused to grant a stay of execution to the defendant bank. In respect of its denial of that relief the court said: “We see no reason why such stay should be granted. To do so would be impractical as well as unjust and would give unwarranted Extraterritorial effect to foreign law and enforce it beyond its terms, and subject the parties to hazards for currency fluctuations in the indefinite future. Here, money of the debtor has been attached, the situs of which is in this jurisdiction. Czechoslovakian currency regulations can have no control over a levy on such funds, nor can Czechoslovakian laws have any control over the issuance or enforcement of process by the courts of this State. Such matters are remedial or procedural and are controlled by the law of the forum.” (279 App. Div. 386, 392.)

We find ourselves unable to assent to the judgment of the Appellate Division.

A contract made in a foreign country by citizens thereof and intended by them to be there performed is governed by the law of that country (Holzer v. Deutsche Reichsbahn-Gesellschaft, 277 N. Y. 474, 478-479. Cf. Meyers v. Credit Lyonnais, 259 N. Y. 399; Salimoff & Co. v. Standard Oil Co. of N. Y., 262 N. Y. 220, 227). Our courts may, however, refuse to give effect to a foreign law that is contrary to our public policy. (Dougherty v. Equitable Life Assur. Soc. of U. S., 266 N. Y. 71, 90.) But the Czechoslovakian currency control laws in question cannot here be deemed to be offensive on that score, since our Federal Government and the Czechoslovakian Government are members of the International Monetary Fund established by the Bretton Woods Agreements Act. (See U. S. Code, tit. 22, § 286; United States v. Pink, 315 U. S. 203, 231.)

In short the defendant bank has been performing its pension obligation to Arthur Perutz and to the plaintiff as his administratrix in accordance with Czechoslovakian law and, since that law controlled the transaction in issue, our courts ought not to apply any different rule in this case. (Cf. Kahler v. Midland Bank, [1950] A. C. 24; Zivnostenska Banka Nat. Corp. v. Frankman, [1950] A. C. 57.)

The judgment of the Appellate Division should he reversed and that of the trial court affirmed, with costs in this court and in the Appellate Division.

Lewis, Conway, Desmond, Dye, Fuld and Froessel, JJ., concur.

Judgment accordingly.