author: Conway, J.

text:
    Davis Yarn Co., Inc., et al., Respondents, v. Brooklyn Yarn Dye Co., Inc., Defendant; Commercial Union Assurance Company, Ltd., Appellant, and Sentinel Fire Insurance Company et al., Impleaded Defendants-Respondents.
    Argued April 13, 1944;
    decided July 19, 1944.

      Bert Cotton and Norman 8. Rein for appellant.
    I. Com-' mercial Union is not liable to plaintiffs by reason of the existence of the policies of insurance issued to plaintiffs by their own insurers. There is no principle of insurance law which requires that where there is more than one policy the one that is more specific shall bear the loss. II. The policy issued by Commercial Union to Brooklyn is not specific insurance. (Fairchild et at. v. L’pool & L’don F. & L. Ins. Co., 51 N. Y. 65; Home Ins. Co. v. Balt. Warehouse Co., 93 U. S. 527.) III. The language and form of the respective policies reveals the.actual intention of the parties to place primary liability on plaintiffs insurers whereas Commercial Union agreed to accept only excess liability. (Fairchild et al. v. Li’pool & L’don F. & L. Ins. Co., 51 N. Y. 65; Suetterlein v. Northern Ins. Co., 251 N. Y. 72; Zurich General Accident & Liability Ins. Co. v. Clamor, 124 F. 2d 717.) IV. If the policy of Commercial Union covers the merchandise of any of the plaintiffs, the latter’s insurers likewise cover, and Commercial Union is entitled to contribution from the respective other insurers. (New Amsterdam Casualty Co. v. Hartford Accident and Indemnity Co.,
      18 F. Supp. 707; Home Ins. Co. v. Balt. Warehouse Co., 93 U. S. 527; Zurich General Accident & Liability Ins. Co. v. Clamor, 124 F. 2d 717; Morrell v. Irving Fire Insurance Co., 33 N. Y. 429; Lucas v. Jefferson Insurance Co., 6 Cow. 635; Automobile Ins. Co. v. Springfield Dyeing Co., 109 F. 2d 533; Rankin Funeral Home, Inc., v. Rhode Island Ins. Co., 247 App. Div. 670, 273 N. Y. 545.) Y. The judgment in favor of Brooklyn is final and the Court of Appeals will neither consider plaintiffs’ rights against Brooklyn nor will it reverse the judgment in favor of the latter. (St. John v. Andrews Institute, 192 N. Y. 382; Wilson v. Mechanical Orguinette Co., 170 N. Y. 542; Robertson v. Bullions; 11 N. Y. 243; Kelsey v. Western, 2 N. Y. 500; General Fireproofing Co. v. Keepsdry Const. Co., 173 App. Div. 528; Nau v. Vulcan Rail & Construction Co., 286 N. Y. 188; Martin v. Winiarski, 259 App. Div. 499; Stanton v. Gohler, 16 Misc. 383.)

      John L. Fletcher, George I. Janow and John M. Aherne for respondents.
    I. Plaintiffs’ merchandise was specifically insured at the premises of Brooklyn against loss by the casualty in question — the policies of insurance which plaintiffs had with the impleaded defendants were excess insurance contracts and did not cover plaintiffs’ loss. (Exton & Co. v. Home Fire & Marine Ins. Co., 249 N. Y. 258; Waring v. The Indemnity Fire Ins. Co., 45 N. Y. 606; Wilson & Co., Inc., v. Hartford Fire Ins. Co., 190 App. Div. 506, 229 N. Y. 612; Fairchild et al. v. L’pool & L’don F. & L. Ins. Co., 51 N. Y. 65; Southern Cotton Oil Co. v. Merchants’ & M. T. Co., 179 F. 133; Mill Factors Corporation v. Ming Toy Dyeing Co., 41 F. Supp. 467; Wilson v. Hartford Fire Insurance Co., 300 Mo. 1; Klotz Tailoring Co. v. Eastern Fire Insurance Co., 116 App. Div. 723; Lowell Manuf. Co. v. Safeguard F. Ins. Co., 88 N. Y. 591; Gordon v. Franklin Fire Insurance Co., 262 App. Div. 328; United Underwriters Ins. Co. v. Powell & Co., 94 Ga. 359; Merrill v. Agricultural Ins. Co., 73 N. Y. 452; Kalle & Co. v. Morton, 156 App. Div. 522, 216 N. Y. 655.) II. The ease of North British & Mercantile Insurance Co. v. London, Liverpool & Globe Insurance Co., 5 Chancery Div. 569 (1877) is precisely in point with the case at bar. III. Commercial Union is not in a position to claim that its policy constitutes other insurance because its poEcy first attached, and if there is a conflict in coverage between the poEcy of Commercial Union and the policies of the impleaded defendants the Commercial Union policy is the valid insurance. (Automobile Ins. Co. v. Springfield Dyeing Co., 109 F. 2d 533; Lackey v. Georgia Home Ins. Co., 42 Ga. 456; Thomas v. Builders Mutual Fire Ins. Co., 119 Mass. 121; Sweeting v. Mutual Fire Ins. Co., 83 Md. 63.) IV. Plaintiffs are entitled to enforce all the rights of the bailee Brooklyn against the Commercial Uniojn. (Waring v. The Indemnity Fire Ins. Co., 45 N. Y. 606; Hagan v. Scottish Ins. Co., 186 U. S. 423; Home Ins. Co. v. Balt. Warehouse Co., 93 U. S. 527; Symmers v. Carroll, 207 N. Y. 632; Lewis v. Home Insurance Co., 199 App. Div. 556; Munich Assur. Co. v. Dodwell & Co., 128 F. 410.) V. Contribution is never enforced between specific insurance and floating insurance for the reason that such policies cover different interests. (Indemnity Insurance Co. v. American Surety Co., 239 App. Div. 522; Matter of General Indemnity Corp. of America, 159 Misc. 892; Exchange M. 1. Ins. Co. v. Zurich, 122 Misc. 386, 214 App. Div. 713; Fairchild et al. v. L’pool & L’don F. & L. Ins. Co., 51 N. Y. 65; Wilson & Co. v. Hartford Fire Ins. Co., 190 App. Div. 506, 229 N. Y. 612; Lowell Manuf. Co. v. Safeguard F. Ins. Co., 88 N. Y. 591; Automobile Ins. Co. v. Springfield Dyeing Co., 109 F. 2d 533; Gordon v. Franklin Fire Insurance Co., 262 App. Div. 328; United Underwriters v. Powell, 94 Ga. 359.) VI. In the event that the Court of Appeals reverses the judgment' below, then the plaintiffs are entitled to have their rights against Brooklyn adjudicated on the merits, and if necessary the whole case should be remanded to the Appellate Division for such adjudication. (Dudley v. Perkins, 235 N. Y. 448; Sun Printing & Publishing Assn. v. Moore, 183 U. S. 642; Fairmont Coal Co. v. Jones & Adams Co., 134 F. 711; Siegel v. Spear & Co., 234 N. Y. 479; Barile v. Wright, 256 N. Y. 1; Altman v. Hofeller, 152 N. Y. 498.)
   Conway, J.

The question presented here arises by reason of the fact thát a number of inland marine “floater ” policies covered the same goods and insured against the peril which occurred, and we must determine whether one of the policies must bear the entire burden, whether there shall be contribution between it and another or others or whether all of the policies, being of the same category, must contribute to the payment for the loss incurred.

The defendant, Brooklyn Yarn Dye Co., Inc. (hereinafter referred to as Brooklyn), was engaged in the business of dyeing yarns. The fifteen plaintiffs, who were engaged in the knitwear business, forwarded, from time to time, yarns owned by them to Brooklyn Yarn Dye Co., Inc. so that they might be dyed. On June 21, 1937, Brooklyn had, on its premises yarns of the plaintiffs. On that day the yarns were damaged by water as a result of a wind and lightning storm, which tore off part of the roof of the plant and disrupted piping connected therewith. The water which caused the damage was water from the sprinkler system and rain.

On June 1,1936, Brooklyn had obtained from the Commercial Union Assurance Company, Ltd. (hereinafter called Commercial), a bailee customer’s policy of insurance on customers’ goods. Brooklyn advised each of the plaintiffs of the receipt of that policy prior to the delivery to Brooklyn of the merchandise involved herein. Further, Brooklyn inserted an advertisement in a trade publication that: “ When you send your yarn to Brooklyn, it is fully protected against all possible mishaps * * * and completely insured * *

The policy written by Commercial was an inland marine policy covering yarns accepted for dyeing, while contained in the premises of the assured situated at 2201 Neptune Avenue, Brooklyn, while being transported to and from its customers or warehouses or agencies, while temporarily held in storage during transportation and while on trucks hired or leased by the assured. The policy provided “ It is understood and agreed that whenever the Assured and/or Assured’s customers has other insurance in force covering any of the property described herein, this policy of insurance is to be considered excess insurance and shall indemnify the Assured and/or Assured’s customers in excess of the liability of the other insurance, and for any loss which the Assured and/or Assured’s customers may suffer by the operation of any contribution, coinsurance, average, or distribution clauses contained in the policies of other insurance, and further that this contract shall not contribute to the payment of any loss or damage until the liability of said other ipsuranee shall have been exhausted subject to the limits of liability as provided elsewhere herein.”

The policy also provided: “ Other insurance. (10) This Company shall not be liable hereunder for loss or damage to any of the property described herein which at the time of such loss is the subject of any fire, marine, inland or any other insurance whatsoever which would cover such property insured hereunder were this policy not in existence, whether such insurance be prior, concurrent or subsequent hereto in date, or be issued to or held by any party or parties having an insurable interest therein until the amount of such other insurance is exhausted, and then only to the extent that such loss or damage may exceed the amount of such other insurance, whether valid or invalid or by solvent or insolvent Insurers; if at the time of such loss the Assured shall have any other insurance identical with or similar to the terms of this policy, whether prior, concurrent or subsequent hereto in date, then this Company shall not be liable hereunder for a greater proportion of any loss or damage to the property insured hereunder than the amount hereby insured bears to the whole insurance effected, whether valid or not or by solvent or insolvent Insurers.” (Italics supplied.)

Immediately after the loss, notice of the occurrence was given by Brooklyn to Commercial. Commercial sent its adjuster to the premises in Brooklyn to examine the yarns which were thereafter removed to Underwriters Salvage Company. They were there salvaged and sold pursuant to an agreement entered into by Commercial, the plaintiffs, and the impleaded defendants. Brooklyn retained a firm of independent adjusters which thereafter filed proof of loss on behalf of all plaintiffs, except three. Prior to the filing of those proofs of loss, Commercial had denied liability to Brooklyn and to each of the plaintiffs on the ground that the damage to plaintiffs’ yarns was not covered by the terms of the Commercial policy because of the existence of the policies of the impleaded defendants. By the submission Commercial admitted “ that due demand for payment was made by plaintiffs and refused by defendant Commercial ” and that the defendant Commercial did not “ contend that there was no adoption of its policy by plaintiffs subsequent to the occurrence of the loss to plaintiffs’ merchandise.”

Each of the plaintiffs, excepting three, filed claims with its respective insuring company and all but one received from such companies a sum of money equal to the amount each sued for herein and delivered a loan receipt therefor. The present action is being prosecuted by counsel designated and selected by the impleaded defendants and another. Paragraph 38 of the Submission is as follows: * ‘ It is conceded by defendant Commercial Union that it would pay the plaintiffs for the losses sustained by plaintiffs by said casualty were it not for the existence of Exhibits 21 to 33 inclusive, [policies issued by the impleaded defendants] and it is conceded by the impleaded defendants that they would pay the respective plaintiffs to whom their respective policies were issued for the losses sustained by plaintiffs by said casualty were it not for the existence of Exhibit 3 [the policy issued by Commercial].”

On those facts we have this submission, the litigation really being among insurance companies. The issue presented, therefore, is whether the defendant Commercial or the impleaded defendants should bear the loss or whether there should be contribution among them.

Now to go back for a moment. Each of the plaintiffs had a policy in one of the impleaded defendants ’ companies. For the sake of brevity we shall use but a word or two of the full names of the plaintiffs and the impleaded defendant companies. The policy of Sentinel issued to Bellmore Neckwear covered yarns of the assured while in transit to the premises of Brooklyn, “ 2201 Neptune Avenue, Brooklyn, New York, while there and thence return to assureds’ premises. While at premises of the Brooklyn Yarn Dye Co., Inc., 2201 Neptune Avenue, Brooklyn, New York, this policy covers against direct loss or damage caused by Fire * * * Windstorm, Water Damage

* * The policy provided:

“If at the happening of any casualty the Assured has any other insurance identical with or similar to the terms of this Policy, whether prior or subsequent in date, or simultaneous with this insurance, then this Company shall not be liable under this Policy for a greater proportion of any loss on the property insured hereunder than the amount hereby insured shall bear to the whole insurance effected, whether valid or not.

1 ‘ And it is agreed that if, at the happening of any casualty, the Assured have any other insurance by Policy, contract or otherwise, covering within the limits of this Policy, then such other insurance shall contribute with this insurance pro rata as to their respective amounts.”

As we shall see, since that policy mentioned and described the premises of Brooklyn, it was just as “ specific ” as the Commercial policy.

The Insurance Company of the State of Pennsylvania issued a policy to Grand Knitting covering property in premises other than that occupied by the assured and while in transit within the United States or Canada. That policy provided: “ This insurance to be considered contributing or excess insurance at assured’s option. This company to pay any loss due to hazards insured herein not collectible under other insurance carried by the assured.” Since assured filed proofs of loss against Commercial and the Insurance Company of the State of Pennsylvania, it elected to have the insurance contributing.

The Insurance Company of North America issued a policy to Mayfair on goods while located on the premises of dyers and while in transit. It contained the following clause, the last sentence in which is quite relevant,

2-3. Other insurance permitted without notice until required and it is hereby declared and agreed that whenever any of the foregoing described property at the time of any loss, is covered by specific insurance, this policy shall not extend to cover the same, excepting only as far as relates to any excess of value beyond the amount collectible from such specific insurance, and shall not be liable for any loss unless the amount of such loss shall exceed the amount collectible from such specific insurance, which said excess only is declared to be under the protection of this policy. Where there is other floating insurance, valid or not valid, on the same, property, this policy shall be liable for no greater proportion than the sum hereby insured in one casualty bears to the total floating insurance.” (Emphasis supplied.)

That paragraph differentiates quite properly between “ specific insurance ” and “floating insurance ” and since, as we shall see, all of the policies involved herein are floating insurance, the policy of Insurance Company of North America must contribute to the loss, under the rule to be pointed out later. The American Insurance Company issued a policy to Regal covering merchandise while being shipped in the United States and Canada and while in the custody or on the premises of dyers. It contained the following clause:

“ Conditions
‘ Other Insurance
“ (1) Other insurance permitted without notice until required but it is expressly understood and agreed that this insurance shall not cover to the extent of any other insurance, by whomsoever effected, directly or indirectly covering the goods and merchandise in respect of which this insurance covers, whether such other insurance be prior, concurrent or subsequent hereto in date; and this Company shall be liable, in respect of such goods and merchandise, only for its proportion of any direct loss and damage, by the risks and perils hereby insured against, in excess of the amount payable by or recoverable from such other insurers, whether such other insurers be solvent or otherwise.”
It also provided under “ Conditions ”: “ This insurance shall not inure to the benefit of any Carrier or Bailee whatsoever. ’ ’
There was a further provision in the policy under paragraph 11 reading as follows: “ It is understood and agreed that nonpayment by the dyer or non-payment under insurance policies provided by dyers within sixty (60) days after the occurrence of any loss covered by this endorsement shall constitute a claim hereunder.”
Continental issued a policy to Knickerbocker covering merchandise anywhere within .the United States, Canada or Newfoundland, in transit and while on the premises of any dyeing plant in the United States or Canada. That policy contained these clauses:
“ 9. Other insurance permitted without notice.
“10. It is understood and agreed that it is the intention of this policy to indemnify the assured, subject to the terms and conditions of this policy, for all losses covered hereunder, irrespective of any other insurance on the same property. In the event of the existence of such other insurance, the assured agrees to remit to this company all sums recovered by the assured from such other insurance to the extent of the loss paid by this Company.
##***#*
“It is understood and agreed that if there be any other insurance on property covered above, whether issued in the name of the assured or of others, then such other insurance shall first apply and this insurance shall not be considered as contributing with such other insurance * * V’
That policy contained also the following conditions: “ (1) Other insurance permitted without notice until required but it is expressly understood and agreed that this insurance shall not cover to the extent of any other insurance, by whomsoever effected, directly or indirectly covering the goods and merchandise in respect of which this insurance covers, whether such other insurance be prior, concurrent or subsequent hereto in date; and this Company shall be liable, on such goods and merchandise, only if its proportion of any direct loss and damage, by the risks and perils hereby insured against, in excess of the amount payable by or recoverable from such other insurers, whether such other insurers be solvent or otherwise.”
The Insurance Company of the State of Pennsylvania also issued a policy to Knittown Togs covering merchandise while in transit in the United States and Canada and while on the premises of dyers in the United States and Canada. The policy contained the following clause: “ It is understood and agreed that this insurance shall be considered as excess insurance where any other insurance exists in the name of the assured or others on any property hereby insured, and this insurance shall not apply or contribute to the payment of any loss until the amount due from all such other insurance shall have been exhausted * * #.”

Another policy was issued by the same insurance company to Fleetwood Sportwear containing a clause similar to that in the last mentioned policy.

Still another policy was issued by the same company to Interstate Knitting covering merchandise while in transit and while on the premises of contractors for processing. That policy contained the following clauses:

“ This policy does not cover any loss or damage that would have been covered under any other form of insurance had this policy not been issued. .
“ It is understood and agreed that this insurance shall be considered as excess insurance where any other insurance exists in the name of the assured or others on any property hereby insured, and this insurance shall not apply or contribute to the payment of any loss until the amount due from all such other insurance shall have been exhausted. * *
The American Union issued a policy to Sussman Yarn covering goods while in the custody of others for renovating, bleaching and dyeing and while in transit. The policy contained the following clauses:
“ Where the insured may have benefit of other insurance, either direct or otherwise it is agreed that this policy shall be considered as excess insurance. * * *
#*#**##
“ It is expressly agreed that this insurance shall not cover to the extent of any other insurance whether prior or subsequent hereto in date, and by whomsoever effected, directly or indirectly covering the same property, and this Company shall be liable for loss or damage only for the excess value beyond the amount of such" other insurance.”
Springfield Fire issued a policy to Davis Yarn covering all kinds of goods, consisting principally of yarns, the property of assured or held in trust or on commission while in the custody or premises of dyers or while being transported on vehicles. It provided:
“If at the happening of any casualty the Assured has any other insurance identical with or similar to the terms of this Policy, whether prior or subsequent in date, or simultaneous with this insurance, then this Company shall not be liable under this Policy for a greater proportion of any loss on the property insured hereunder than the amount hereby insured shall bear to the whole insurance effected, whether valid or not.
“ And it is agreed that if, at the happening of any casualty, the Assured have any other insurance by Policy, contract or otherwise, covering within the limits of this Policy, then such other insurance shall contribute with this insurance pro rata as to their respective amounts.
• ••••••
Carriers
“ This insurance warranted to be in all cases null and void to the extent of any insurance by any carrier or bailee which would attach and cover said property if this Policy had not been issued, * * * and it is also understood and agreed, that in case any agreement be made or accepted by the Assured with any carrier or bailee by which it is stipulated that such or any carrier or bailee shall have, in case of any loss for which he may be liable, the benefit of this insurance, or exemption in any manner from responsibility grounded in the fact of this insurance, then and in that event this Company shall be discharged of any liability for such loss thereunder, but this Policy in these and all cases of loss or damage by perils insured against shall be liable and owe actual payment for (only) what cannot be collected from carrier and/or bailees and/or insurers of property lost or damaged, * ■ * * but in case of final failure to collect from the carrier and/or bailees and/or insurers, a portion of the sum advanced by this Company equal to the sum short collected from the carrier, and/or bailees and/or insurers, may be retained and applied in settlement of the actual liability of this insurance * *

Northern Assurance issued a policy to Greenwelk Knitwear covering merchandise while detained during processing on premises of contractors in the United States and while in transit. It also contained clauses similar to those already quoted.

So also the Switzerland General, which issued a policy to May Knitting covering merchandise while temporarily detained during processing on premises of contractors, while in the United States and while in transit within the United States and Canada and covering certain named premises not including those of Brooklyn.

In order to understand the situation presented it is necessary to recall some fundamentals. We are concerned here with marine insurance. All insurance in this State whether fire, marine or of any other form is that which the authoritative cases in this State and our Legislature define it to be. Sometimes that which is included by the Legislature within the writing powers of a marine company is purely arbitrary and has nothing to do with what would popularly be thought to be either ocean marine or inland marine risks. When it became necessary to cover risks to property while in transit on land those risks were confided to marine companies because it was marine companies as distinguished from fire or life or casualty or surety companies which had theretofore had to do with the carrying of goods and it was natural to enable and permit them to insure goods in transit on land. Hence we have the extensive inland marine business which in large part has nothing to do with carrying by water. It might better be called, as in some phases it now is called, transportation insurance. Marine insurance in this State under former Insurance Law, section 150, subdivision 1, paragraph (a) now Insurance Law, section 46, subdivision 20, paragraph (a) includes, by legislative provision, all personal property floater risks ”. All of the policies involved herein were written under Insurance Law, section 150, prior to its amendment. They were written under authority granted to Commercial and to the impleaded companies as companies with fire and marine powers and had to be written by the companies which are parties herein, under that authority. On June 2,1933, the National Convention (now Association) of Insurance Commissioners adopted a “ nation-wide Definition and Interpretation of the Insuring Powers of Marine and Transportation Underwriters.” That definition was accepted by the Superintendent of Insurance of the State of New York by a ruling which officially declared the nation-wide definition to constitute a proper interpretation of the provisions of former section 150 of the Insurance Law which have been carried word for word into the new statute (§ 46, subd. 20, a), insofar as applicable here. That definition includes under personal property floater risks ” the following:

“ (p) Property in transit to and/or from and while waiting for or undergoing processing in bleacheries or fumigatories or on premises of dyesters, throwsters and other similar processors until delivered to storage warehouses or final place of delivery contemplated at the time the shipment was made. Provided, however, that such policies shall not cover bailee’s property at his premises.
(r) Bailee’s Customers Policies covering personal property of customers. Such policies shall cover in transit and during process at e. g. laundrymen’s, dyers’ and cleaners’ premises, provided, however, that such policies shall not coyer bailee’s property at his premises.”

The policies of the impleaded defendants are of the type defined in subdivision (p) and the policy of Commercial is of the type defined in subdivision (r). None of the policies is specific insurance (as opposed to floating insurance). (See Fairchild case, infra.) Each of them could have had an address of a building or premises in it or for that matter, several of them. The Commercial policy, the indorsement on it covering the property of bailor National Spinning Co., and contingently covering other bailors, and the policy of one of the' impleaded defendants Sentinel Fire Insurance Co., did contain an address. The use of an address did not affect the“ floater ” status of any of the policies.

An examination of the Commercial policy indicates that it was to cover the risk but was to be regarded as excess insurance if the assured and/or its customers had other insurance in force. The Springfield policy also covered the risk but was to share pro rata if the assured had any other insurance, as it did by acceptance. Other policies of impleaded defendants from which clauses have been quoted Avere to be regarded as excess insurance if there was other insurance in force. Policies of other impleaded defendants had still other varying proAdsions. Taking the Commercial policy and those of. the impleaded defendants by and large, a literal reading would mean that neither the Commercial policy nor those of the impleaded defendants would apply at all since the assured and/or its customers had other insurance in force sufficient to cover the risk. The Appellate Division correctly rejected a conclusion that because each loss involved herein was covered by two policies, the respective insureds could recover upon neither, pointing out that such a result “ would be untenable in principle since the moment that either policy is (was) held to be unenforcible the reason for invalidating the other policy ceases to exist (Richards on Insurance, 3rd ed. § 253).” (265 App. Div. 180, 183.) The Appellate Division, however, was of the opinion that there was a difference in character between the Commercial policy and those of the impleaded defendants and that, therefore, the cases of Fairchild et al. v. L’pool & L’don F. & L. Ins. Co. (1872) (51 N. Y. 65) and Gordon v. Franklin Fire Insurance Co. (262 App. Div. 328), could he used analogously and thus reached the conclusion that the Commercial policy was “ more specific ” and therefore must sustain the entire burden of the losses of the plaintiffs. We have already pointed out that there is no difference in character among the policies here considered. All are in the same category. They are inland marine floater policies.

The Fairchild case was decided before we had a New York standard form of fire policy and while the policies issued to plaintiffs in that case are not contained in the record they were forty-six in number and were policies upon merchandise and in one instance furniture in the store at 146 Duane Street, New York City. A list of the insuring companies will be found in the record and the plaintiffs’ policies were evidently straight fire insurance policies upon the contents of a specified and described building. The defendant’s policy in the Fairchild case (p. 69) was concededly a floater inland marine one. This court distinguished between specific insurance and floating insurance in the following language: “ This is what is called a floating policy, intended to cover property or value which cannot well be covered by specific insurance from the circumstance that it is changing in quantity, or location. The ordinary purpose of such a policy is to supplement specific insurances and to cover values not covered by them. Here the plaintiffs’ property would sometimes be in one warehouse and sometimes in another, and sometimes on wharves or in transitu over the streets, and sometimes above the specific insurances and sometimes under them in value. Hence, the necessity for this floating policy to attach to the property wherever it might be, and in all cases when it happened to exceed the specific insurances.”

We held that there was thus a specific insurance policy and a floater policy; that defendant’s policy was not to apply if there was any insurance on goods in a specified building (which there was) except for the excess; that there was no excess since the specific insurances far exceeded in amount the value of the goods destroyed; that therefore defendant was not liable.

Ip the light of the fact that all the policies here are floater policies, the case of Fairchild v. L’pool & L’don F. & L. Ins. Co. (51 N. Y. 65) is important since it stated the law of this State. Judge Earl pointed out that floater policies were created or came into being to cover property which could not well be covered under specific insurance because it was changing in quantity or location. Floater policies were defined as supplements to specific insurances — to cover values not covered by them. Specific insurance and floater insurance were thus defined as mutually exclusive. Since none of the policies here is specific insurance (as opposed to floater insurance), the rule of the Appellate Division fastens the liability on the company whose policy is more specific ” in the sense that it is more precisely formulated or restricted. That leads to a question of fact as to which policy is “ more specific ” and thus leads to further litigation which may well turn on the words used by an insurance underwriter or agent or even a clerk or typist in preparing a floater policy of insurance.

In Klotz Tailoring Co. v. Eastern Fire Insurance Co. (116 App. Div. 723) there were two policies, one a fire insurance policy in the New York standard form and another a floating policy providing that it did not cover merchandise on which there might be at any time specific insurance except on the excess value over and above the specific insurance. Following the Fairchild case, it was there properly held that the specific policy, the standard fire policy, was the one to respond.

In the Gordon case (supra, p. 329) plaintiffs were the owners of materials which were sent to a firm of contractors to be made into finished garments. The contractors had a New York standard form of fire insurance policy providing that it did not ‘ cover property which is otherwise specifically insured. ’ ’ Plaintiffs had an inland marine floater policy on their property while in possession of contractors. • That policy provided that it should be considered as excess insurance when any other insurance existed in the name of the assured or others on the property. The standard fire insurance policy obtained by the contractors was required to bear the loss since it insured the goods at the address of the contractor and the plaintiffs’ policy did not insure any particular items nor specify any particular place where the merchandise was to be located. Thus the plaintiffs’ goods were not “ otherwise specifically insured ” under the floater policy.

There are no specific insurance policies here, within the meaning of the Fairchild case, but only floater policies. The policies are all of the same class. Each of them could have had an address of a building or premises in it. At least one policy of an impleaded defendant did, e. g. Sentinel Fire Insurance Co. The policy of the Commercial had an address in it when it was insuring the bailee, Brooklyn, and also when it was insuring the bailor, National Spinning Company. All of the floater policies could have had addresses without affecting their floater status. The better rule it seems to us, would be to have all the companies writing floater policies which are all attempted excess policies without a primary one, covering a peril which occurs, compelled to contribute. That will lead to prompt payment for the loss and the elimination of litigation. Under the rule formulated by the learned Appellate Division, if a definite address, at which the peril insured against occurred, was written into three or four floater policies (and in this case there is such definite address in two policies) there would be contribution among those who wrote in that definite address. That instances a further hazard, as far as the insured is concerned, as to which company or companies he shall look to for payment — and a hazard, as we have pointed out supra, which is controlled in large part by the unpredictable acts of insurance underwriters, agents, clerks or typists. In addition there is no way for a dyer to learn what insurance there is upon goods sent to it for dyeing except by inquiry made personally or through a broker to those sending goods to be dyed. The head of a business concern soliciting goods for dyeing might well hesitate to make such inquiry into his customers’ business. An attempt was made in the instant case by some of the plaintiff s-owners to obtain a “ Memorandum of Insurance ” from Commercial and they did obtain it but it recited that it was given as a matter of information and conferred no right on the holders and that the policy was subject to alteration without notice. The rule would lead to other curious results. If no one of the writing companies had put in an address at which the peril insured against occurred, all would have been compelled to contribute. If each and every one of the companies had put in such an address, all would have had to contribute. If, as in this instance, two put such address in, then the other companies would be carried upon the insurance liability of those two companies and such other companies would be collecting premiums for insurance on which they had nothing at risk, assuming, of course, that the two companies which had put the addresses in their policies were solvent and that their policies were adequate to cover the entire loss.

The question of what is specific insurance ” is one upon which there has been much difference of opinion among the courts. Insurance may be specific because it insures against a specific peril. It may insure in a specific amount as distinguished from monthly reporting insurance. Thus in Federal I. Credit Bank v. Globe & Rutgers F. Ins. Co. (7 F. Supp. 56, 58) it was said: ‘ ‘ The expression ‘ specific insurance ’ as here used, means insurance in a specified amount in the policy as contrasted with monthly reporting insurance which connotes, as to the amount of insurance, a fluctuating amount dependent upon the value from time to time of the tobacco insured at the particular location. The term specific ’ as applied in insurance phraseology is frequently used in contrast with blanket insurance, the former denoting coverage of a particular piece of property or property at a specific location, as contrasted with the latter which covers the same and other property in several different locations.” It may insure property at a specific location as distinguished from property insured wherever it may be. Whatever may be the rule in some other jurisdictions, in this State we have taken the position in the Fairchild and succeeding cases that specific insurance and floating insurance are mutually exclusive. We have pointed out the position taken here in the quotation from the Fairchild case (supra). To the same effect is the following language from Wilson Company v. Hartford Fire Insurance Co. (300 Mo. 1, 50-52): Not only therefore by the express agreement of the parties but in contemplation of law the Globe & Rutgers may be designated as a floating policy. The texts and cases tell us that a floating policy is one intended to supplement specific insurance on property, and attaches only when the latter ceases to cover the risk. Cutting v. Atlas Mut. Ins. Co., 199 Mass. 380; Peabody v. Liverpool Ins. Co., 171 Mass. 114; Bloch v. Am. Ins. Co., 132 Wis. 150. The reason for the creation and the purpose of this character of policy is to provide indemnity for property which cannot because of its frequent change in location and quantity be covered by specific insurance. Gross v. New York Co., 107 Fed. 516; Grossbaum Syndicate v. German Ins. Co., 213 Pa. 506; Fairchild v. Liverpool Ins. Co., 51 N. Y. 65; Klotz Tailor Co. v. Eastern Ins. Co. [116 App. Div. 723], 102 N. Y. Supp. 82.” (Emphasis supplied.)

There remains to be considered a claim of plaintiffs that they are entitled to have their rights against Brooklyn adjudicated herein. They Contend that Brooklyn represented to the trade that the property of its customers would be completely insured; that Brooklyn did not secure complete insurance and is therefore liable to plaintiffs. That point, however, is not before this court. The judgment in the instant case was in favor of Brooklyn and against plaintiffs. Plaintiffs served a notice of appeal from that portion of the judgment. That appeal was dismissed, however, on motion of Brooklyn on the ground that plaintiffs had failed to obtain leave to appeal from the Appellate Division or from this court and on the ground that the notice of appeal was not timely. (Davis Yarn Co. v. Brooklyn Yarn Dye Co., 290 N. Y. 859.)

The judgment should be reversed, with costs, and the submission remitted to the Appellate Division for action thereon in accordance with this opinion.

Lehman, Ch. J., Loughran, Lewis, Desmond and Thaoher, JJ., concur; Bippet, J., taking no part.

Judgment accordingly.


source: Caselaw Access Project

license: Public Domain

text:
    In the Matter of James J. Hines, Appellant, against State Board of Parole, Respondent.
    Argued May 15, 1944;
    decided July 19, 1944.

      Jacob Shientag for appellant.
    I. The denial of an order of certiorari for judicial review of respondent’s determination is error in law and should be reversed. (Matter of Hines v. State Board of Parole, 267 App. Div. 99; People ex rel. Marshall v. Webster, 266 App. Div. 637; People ex rel. von Moser v. New York State Parole Board, 179 Misc. 397, 266 App. Div. 896; Matter of O’Connor v. State Board of Parole, 264 App. Div. 797; People ex rel. Anow v. Hunt, 259 App. Div. 1071; People ex rel. Mason v. Brophy, 235 App. Div. 432; People ex rel. Crane v. Hahlo, 228 N. Y. 309; Matter of Levitch v.
      Board of Education, 243 N. Y. 373; Matter of Small v. Moss, 277 N. Y. 501; People ex rel. Schau v. McWilliams, 185 N. Y. 92; Matter of Schwab v. McElligott, 282. N. Y. 182.) II. The denial of petitioner’s motion for an order permitting review of respondent’s determination was- predicated upon an erroneous interpretation of the applicable law. (People ex rel. Cecere v. Jennings, 250 N. Y. 239.)

      Nathaniel L. Goldstein, Attorney-General (William F. Mc-Nulty, Orrin G. Judd and Marry F. Karst of counsel), for respondent.
    The holding of Special Term was not only in accord with the legislative intent as manifested in the applicable provisions of the Correction Law'dealing with the subject of parole, but is supported by the weight of authority in this State. (People ex rel. Cecere v. Jennings, 250 N. Y. 239; Matter of Siraguso v. Moore, 273 N. Y. 59; People ex rel. von Moser v. New York State Parole Board, 179 Misc. 397, 266 App. Div. 896; Matter of Hogan v. Canavan, 245 App. Div. 391, 246 App. Div. 734; People ex rel. Rabiner v. Warden of City Prison, 209 App. Div. 795; People ex rel. Hannon v. Warden of Pen., N. Y. Co., 209 App. Div. 521; People ex rel. LaPlaca v. Heacox, 238 App. Div. 217; People ex rel. Kurzynski v. Hunt, 250 App. Div. 378; People ex rel. Threadcraft v. Brophy, 255 App. Div. 823; People ex rel. Gariti v. Brophy, 255 App. Div. 823, 279 N. Y. 778; People ex rel. Natoli v. Lewis, 287 N. Y. 478; Matter of Ditchik v. State Board of Parole, 181 Misc. 346; Matter of Lewis v. Carter, 220 N. Y. 8.)
   Conway, J.

This is a proceeding under article 78 of the Civil Practice Act for an order of certiorari to review the action of the State Board of Parole in denying parole to petitioner and for the issuance of an order commanding the Board of Parole to certify the petitioner for parole.

The theory upon which the petitioner has appealed to the courts is that the Board has made it a condition precedent to any consideration of his case, that he admit his guilt of the crimes charged against him regardless of whether in fact he was or was not guilty of the crime or crimes of which he stands convicted and thus violated the rule laid down in Sims v. Sims (75 N. Y. 466); People v. Rodawald (177 N. Y. 408, 425); Schindler v. Royal Insurance Co. (258 N. Y. 310, 312, 313). In the Schindler case we pointed out: “ In any civil proceeding to which the People are not parties, one may, after having been convicted of a crime, assert his innocence and put his opponent to his proof of guilt, or after having been acquitted on a criminal charge, may himself be subjected to a trial anew of the issue of fact.” We do not find, however, on this record that such improper condition was imposed upon petitioner.

A comprehensive system of parole has been established by the State and is found in the Correction Law. In section 210 thereof the Board of Parole is charged with the duty of determining what prisoners serving an indeterminate sentence in state prisons and the Elmira Reformatory, may be released on parole and when and under what conditions.” Under the same section the members of the Board are required personally to study the prisoners confined in the prisons of the State under indeterminate sentences, so as to determine their ultimate fitness to be paroled. Under section 212 it is provided that the time of the release of a prisoner shall be discretionary with the board of parole, but no such person shall be released until he has served such minimum sentence nor until he shall have served one year. The action of the board of parole in releasing prisoners shall be deemed a judicial function and shall not be reviewable if done according to law.” The statutes declare that the action of the Board in releasing or refusing to release prisoners shall not be reviewable if in accordance with law. Thus so long as the Board violates no positive statutory requirement, its discretion is absolute and beyond review in the courts. In this case there was no departure from any statutory requirement and we may not review its action or failure to act. Aside from our lack of power or authority to review the action of the Board in any particular case, the statutory scheme is such that no judicial review of the merits in any case is possible. The action of the Board depends upon information in regard to the personal traits and characteristics of the individual convicted and upon unanimous concurrence of the individual members of the Board acting upon such information and upon personal observations. The Board is to consider the prisoner’s attitude towards society, towards the judge who sentenced him, towards the district attorney who convicted him and towards the policeman who arrested him and how the prisoner regards the crime for which he is imprisoned and his previous criminal career. (Correction Law, § 214.) There are no statutory limitations upon the power of the Board upon due consideration of such matters, in its absolute discretion to refuse to release any prisoner upon parole. Furthermore, no action need, nor can it be taken except upon the initiative of the Board itself (Correction Law, § 214) and no prisoner may be released on parole as a reward for good conduct or efficient performance of duties assigned in prison, but only if the Board of Parole is of opinion that there is reasonable probability that if such prisoner be released he will live and remain at liberty without violating the law and that his release is not incompatible with the welfare of society. (Correction Law, § 213; see, also, Executive Law, §§ 115-119.)

The only question presented, therefore, is one of discretion since there has been no failure to comply with statutory requirements. Matters of discretion affecting parole from State^ prisons and Elmira Reformatory have not been confided to the courts.

It is urged that by moving to dismiss the petition on the ground of legal insufficiency all of the allegations of the petition must be deemed true. The allegations of fact are deemed to be true insofar as relevant or material upon any questions upon which a court may pass (Noyes v. Erie & Wyoming Farmers Co-Op. Corp., 281 N. Y. 187, 196; Nasaba Corp. v. Harfred Realty Corp., 287 N. Y. 290, 294; Zwirn v. Galento, 288 N. Y. 428, 430) but not conclusions of law. Matter of Schwab v. McElligott (282 N. Y. 182, 186), is not to the contrary. There we held that it was admitted “ that the report of the medical officers was not founded on fact, from which it follows that the order of the Fire Commissioner based thereon was necessarily arbitrary and capricious.”

The order should be affirmed, without costs.

Lehman, Ch. J., Loughran, Lewis, Desmond and Thacher, JJ., concur; Rippey, J., taking no part.

Order affirmed.


author: Desmond, J. Conway, J.

text:
    The People of the State of New York, Respondent, v. Blas Gonzalez, Appellant.
    Argued May 22, 1944;
    decided July 19, 1944.

      John McKim Minton, Jr., and Rudolph Stand for appellant.
    The trial court’s refusal to answer the jury’s question during its deliberation constituted serious, prejudicial error. (Code Crim. Pro., § 427; People v. Flynn, 290 N. Y. 220; People v. Cooke, 292 N. Y. 185; People v. Bonier, 179 N. Y. 315; Wharton on Homicide, 3rd ed., 225; 26 Am. Jur., Homicide, § 304; Dukes v. State, 14 Fla. 499; People v. Sanducci, 195 N. Y. 361; Stokes v. People of the State of N. Y., 53 N. Y. 164.)

      Frank 8. Hogan, District Attorney (Whitman Knapp, Richard G. Denser and Alan J. Elliot of counsel), for respondent.
    The trial judge’s answer to the jury’s question was proper. (People v. Cooke, 292 N. Y. 185.)
   Desmond, J.

On the evening of March 13, 1943, a young man named Allen Parris was shot as he stood on the stoop or in the doorway of a house on 63rd Street in Manhattan. Later that evening he died from the bullet wound. On the evidence, including defendant’s own statements to a police officer and to an Assistant District Attorney, the jury was justified in finding that the shot was fired by defendant and that each of the elements of the crime of murder in the first degree was proven beyond a reasonable doubt. On the preceding evening there had been altercations in a candy store and later in the street nearby, between a group of young men which included Parris and another group which included Victor Gonzalez, the son of defendant. On those occasions the quarrelling, according to one version, arose from an insult offered by one of the Parris group to Victor’s sister. Other witnesses said that the feuding was touched off by some discussion about the jackets Victor Gonzalez and his friends were wearing, or by an effort by one of the Parris group to steal one of those jackets. At any rate, Victor went home and reported the occurrences to his father, the defendant here. When the trouble flared up again the next night, defendant was a participant. In his statements made after the shooting, he said that, after some skirmishing between the two bands of young men, he (defendant) heard one of the Parris group make a threat to get him and take care of him ” without specifying who it was who was to be taken care of. Defendant, according to his statements to the investigators, then went home and got his revolver, joined with his son’s friends in chasing the other youths and fired the shot that ended the life of Parris.

Defendant’s counsel, in his closing address to the jury, argued that it had not been clearly proven that defendant fired the shot, and that defendant, if he did shoot Parris, did so for the protection of his son and daughter. The prosecutor in his summation took up the several ingredients of the crime of murder in the first degree. At one point he said to the jury: “ There is your premeditation; that going to get the gun and coming back.” Those words are of special importance in the light of what occurred after the jury had retired to deliberate.

The Judge charged the jury on all the phases of the case and the jurors went out to consider their verdict. Three hours later they returned to the courtroom and the following colloquy was recorded: “ The Clerk: Mr. Foreman, please rise. Gentlemen of the Jury, have you agreed upon a verdict. The Foreman: Not yet. The Court: Mr. Foreman and gentlemen of the jury: a few minutes ago I received the following communication: ‘ Your Honor: If a man put a gun in his pocket for protective purposes originally, and subsequently used it in the commission of a crime, would that constitute premeditation! ’ Signed 1 Harold Derfner,’ Foreman. My answer: I am unable to answer your question in that form, except as already given in my original charge. If you care to have any portion of such charge read, indicate it and I will have it read. You may retire. Did you hear what I said! The Foreman: Yes, sir.”

Two and a half hours later the jury returned with its verdict of guilty of murder in the first degree.

We consider that the court’s response to the jurors,’ .question was no less than a refusal to reinstruct them as to an applicable proposition of law, a refusal to clarify their doubts. Their question, while not framed in language of the utmost possible clarity, was intelligible and, even if it were not, it was the court’s duty to ask the questioners to make their inquiry clearer. That there was a binding duty to answer the question cannot be doubted. Section 427 of the Code of Criminal Procedure says in part: “ After the jury have retired for deliberation, * * * if they desire to be informed of a point of law arising in the cause, they must require the officer to conduct ■them into court. Upon their being brought into court, the information required must be given * * * ”, Of .that section, which first appeared in the Criminal Code as adopted in 1881 (L. 1881, ch. 442), there has been little or no mention in the decisions until quite recently (such cases as People v. Parker, 137 N. Y. 535, and People v. Silver, 234 App. Div. 871, deal rather with another part of the" section, not above quoted, which requires that the added instructions be given in defendant’s presence and after notice to his attorney). [Recently, however, we have had to consider the statute in three cases, including this one. In People v. Flynn (290 N. Y. 220) we held it to be grave error for the court to refuse to answer categorically a question from the jury which had the effect of insinuating into the case a theory of felony murder, which was not properly before the jury. In People v. Cooke (292 N. Y. 185) we were confronted with a situation where the court did proffer an answer to the question. This court, in the Cooke case, divided on the point of whether or not the additional instructions so given were correct and'sufficient. None of us expressed any disagreement with so much of the Chief Judge’s dissenting opinion, in that case, as says that section 427 of the Code of Criminal Procedure leaves to the trial court no discretion whatever as to whether or not to answer a proper question from the jury, even though the original charge contains a correct answer to that same question. In People v. Cooke the whole court agreed, I think, on these propositions: first, that a trial judge simply cannot refuse to answer a pertinent question from the jury; second, that the answer need not necessarily be a categorical1 ‘ yes ’ ’ or “ no and third, that if to a proper question the court gives no answer at all or an answer that fails to answer, then the error is reversible.

The right of jurors to ‘ ‘ ask questions of the judges for their direction ” is no new thing. (Chitty, Practical Treatise on the Criminal Law, vol. 1 [1819], p. 517; see Maurer v. The People, 43 N. Y. 1.) The general rule in the United States is that <£ the court may and ordinarily should give the jurors additional instructions on their request ” (23 C. J. S. Criminal Law, § 1376, subd. c., p. 1046). In Pennsylvania, without the guidance of any statute, the Supreme Court said: ££ In fact, the practice of giving additional instructions to the jury upon their request is so well settled in this state that we know of no prior instance- in which the request has been refused ” (Commonwealth v. Smith, 221 Penn. St. 552, 555). Using language that we - adopt here, the Pennsylvania Court went on to say: ££ It is immaterial that the court has already charged the jury upon the law of the ease generally, or has given instructions which would answer the request of the jury. The very fact that the jury, after having been in consultation, have failed to comprehend the instructions given in the charge and request further instructions, is of itself sufficient to show the necessity of additional instructions. As we said above, if the jury do not understand the instructions, or are ignorant or uncertain as to the law applicable-to any part of the case, the charge is inadequate and fails of its purpose, which is to advise the jury fully and clearly upon the law applicable to each and every part of the case.” That clear statement disposes of the contention made in the present case that the court dealt adequately with the submitted question when he offered to read to the jury any desired part of his original charge.

The Legislature of this State has in section 427 made positive and absolute the requirement that “ the information required must be given ”. The answering of. such questions is no mere matter of conventional procedure. It is an integral part of the structure of an adequate trial. We differed as to other matters in People v. Cooke (supra, p. 193) but we find no reason for disagreeing with the Chief Judge’s statement in that case that the court must give the information requested, and where the court fails to give information requested upon a vital point no appellate court may disregard the error under section 542 of the Code of Criminal Procedure.”

It follows that the judgment of conviction should be reversed and a new trial ordered.

Conway, J.

(concurring in result). I concur in the result arrived at in the opinion of Desmond, J. After deliberating for some hours, the jurors returned to the court room and asked: 11 If a man put a gun in his pocket for protective purposes originally, and subsequently used it in the commission of a crime, would that constitute premeditation? ”. To that, the Trial Judge replied: I am unable to answer your question in that form, except as already given in my original charge. If you care to have any portion of such charge read, indicate it and I will have it read. You may retire.”

A reading of the charge of the court shows that it contained no. answer to the question posed.

Lehman, Ch. J., Lotjghban, Rippey, Lewis and Thacheb, JJ., concur with Desmond, J.; Conway, J., concurs in result in separate opinion.

Judgment of conviction reversed, etc.


author: Lehman, Ch. J.

text:
    In the Matter of the United States of Mexico et al., Respondents, against Peter Schmuck, a Justice of the Supreme Court of the State of New York, et al., Appellants.
    Argued. May 24, 1944;
    decided July 19, 1944.

      Joseph C. Slaughter, Arthur B. Hyman and Morris Katz for appellants.
    I. Prohibition should not have been granted. (People ex rel. Livingston v. Wyatt, 186 N. Y. 383; Ex Parte Peru, 318 U. S. 578.) II. The Supreme Court was not bound to treat the suggestion of immunity filed on behalf of Petróleos Mexicanos as conclusive and to relinquish its jurisdiction of the action and of the property attached. The government of Mexico and Petróleos Mexicanos have waived the right of immunity from suit. The State Department did not attempt to predetermine the question of the waiver of immunity. Indeed, it could not do so. (Hannes v. Kingdom of Roumania Monopolies Institute, 260 App. Div. 189; Bank of United States v. Planters’ Bank of Ga., 9 Wheat. 904; The Pesaro, 277 F. 473; The Swift, 1 Dods. 320; Salas v. United States, 234 F. 842.) III. The doctrine of immunity has not and should not be extended to claims made on behalf of an autonomous body corporate endowed with all the characteristics of an ordinary private corporation organized by the sovereign for the purpose of and which does engage in commercial enterprise; nor has it been extended to property not directly owned by the sovereign. (The Pesaro, 277 F. 473; Compania Espanola v. Navemar,
      303 U. S. 68; Royal Italian Government v. National B. & C. Tube Co., Inc., 294 F. 23, 264 U. S. 587; Sloan Shipyards v. U. S. Fleet Corp., 258 U. S. 549; Keifer & Keifer v. R. F. C., 306 U. S. 381; United States v. Deutsches Kalisyndikat Gesellschaft, 31 F. 2d 199; Coale et al. v. Société Cooperative Suisse Des Charbons, Basle, et al., 21 F. 2d 180; United States v. Strang, 254 U. S. 491; Ulen & Co. v. Bank Gospodarstwa Krajowego, 261 App. Div. 1; Banco de Espana v. Federal Reserve Bank, 114 F. 2d 438; Sullivan v. State of Sao Paulo, 122 F. 2d 355.) ,

      Jerome S. Hess, Irving I. Goldsmith and Frank M. Rashap for respondents appearing specially.
    I. The claim of Mexico to immunity having been “ recognized and allowed ” by the State Department, it was the duty of the court to dismiss the complaint and vacate and annul the warrant of attachment. (Compania Espanola v. Navemar, 303 U. S. 68; Ex Parte Republic of Peru, 318 U. S. 578; The Janko, 54 F. Supp. 240; Lamont v. Travelers Insurance Co., 281 N. Y. 362.) II. Mexico’s right to sovereign immunity extends to this action brought against it although the named defendant is Petróleos Mexicanos. (Oliver American T. Co. v. Government of the U. S. of Mexico, 5 F. 2d 659; Dexter & Carpenter v. Kunglig Jarnvagsstyrelsen, 43 F. 2d 705.) III. Neither the Government of the United States of Mexico nor its instrumentality, Petróleos Mexicanos, have by any act waived immunity from suit, or consented to the exercise of jurisdiction, or appeared generally herein, but, on the contrary, have at each stage of the proceedings protested to the jurisdiction of the court, and asserted their right to immunity as a sovereign and as an instrumentality of a sovereign. (Dexter & Carpenter v. Kunglig Jarnvagsstyrelsen, 43 F. 2d 705; Board of Directors of St. Francis Levee District v. Bodkin Bros., 108 Tenn. 700; Sloan Shipyards v. U. S. Fleet Corp., 258 U. S. 549; Compania Mercantil Argentina v. United States Shipping Board, 40 Times L. R. 601; Owners of S. S. Victoria v. Owners of S. S. Quilwark [1922], Scots Law Times 68; Bradford v. Director General of Railroads of Mexico, 278 S. W. 251.) IY. The Appellate Division had jurisdiction to issue the order of prohibition. (Ex Parte Republic of Peru, 318 U. S. 578; Matter of Baltimore Mail S. S. Co. v.
      Fawcett, 269 N. Y. 379; United States v. Caffey, 141 F. 2d 69; Mutual Life Ins. Co. v. Anthony, 105 N. Y. 57; Matter of Culver Contr. Corp. v. Humphrey, 268 N. Y. 26.)

      James B. M. McNally, United States Attorney for Southern District of New York (Marvin M. Notkins of counsel), for United States of America, amicus curiae.

    The suggestion of immunity left no question of fact for determination by the Special Term, and required that court to dismiss the complaint and vacate the warrant of attachment unless it found that the contract between the parties constituted a waiver of immunity. (Ex Parte Republic of Peru, 318 U. S. 578; Compania Espanola v. Navemar, 303 U. S. 68.)
   Lehman, Ch. J.

The complaint in an action brought against Petróleos Mexicanos by Associated Metals and Minerals Corporation, a corporation organized under the laws of the State of New York, describes the defendant as an entity created under and by virtue of the laws of the Republic of Mexico, with power to sue and authorized to be sued in the name of1 Petróleos Mexicanos ’.” Associated Metals and Minerals Corporation obtained an order of attachment against the defendant and the Sheriff of New York County made a levy thereunder on funds standing in the name of Petróleos Mexicanos at Pan American Trust Company, 70 Wall Street, New York City. The United States of Mexico, through the Charge d’Affaires of the Mexican Government, informed the Secretary of State that moneys standing in the name of Petróleos Mexicanos had been seized under a warrant of attachment in the action of Associated Metals and Minerals Corporation v. Petróleos Mexicanos, pending in the Supreme Court of the State of New York; that Petróleos Mexicanos is an agent and instrumentality of the Mexican Government created, organized and existing for the sovereign and governmental purposes ” of that Government; that all property and moneys held in the United States of America in the name of or pertaining to Petróleos Mexicanos ” are moneys belonging to the Mexican Government “ in its capacity as a sovereign ”, and that the Mexican Government cannot “ with due regard to its national dignity, submit itself directly or through Petróleos Mexicanos, its agent or instrumentality, or any of its national property, to the jurisdiction of a friendly sovereign sister State.”

In his note to the Secretary of State the Charge d’Affaires incorporated the decree of the Mexican Government creating Petróleos Mexicanos and called attention “ to the fact that Petróleos Mexicanos is not a corporate entity or an institution of civil or commercial law, but.was organized by my Government as a public institution wholly owned and controlled by it for the purpose of operating Mexican Government property.” Accordingly the Mexican Government requested the good offices of the Department of State to the effect that the Supreme Court of New York County, State of New York, be apprised of the immunity of Petróleos Mexicanos and of its funds from suit and attachment.”

Through their attorneys, the United States of Mexico and Petróleos Mexicanos appeared specially in the action pending in New York County and applied for an order of the court dismissing the action and vacating the warrant of attachment on the ground that the sovereign rights of the United States of Mexico are affected and that the property of the .United States of Mexico and its agent and instrumentality, the defendant in the action, is not subject to the jurisdiction or judgment of the court. The plaintiff in the action opposed the motion. It urged that the property which has been attached, in fact, belongs to the defendant Petróleos Mexicanos and it denied that Petróleos Mexicanos is an agent or instrumentality of the Mexican Government. It contended that Petróleos Mexicanos is an autonomous corporate body which under the law of its creation may sue and be sued and that the Mexican Government is not a party to the action and is not entitled to be heard upon the motion to dismiss or to claim immunity on' behalf of the defendant Petróleos Mexicanos. It contended, too, that:

“ Petróleos Mexicanos, as well as the Mexican Government have waived the right to claim immunity from suit in the Courts of this Land, or, rather, have agreed not to assert a claim of immunity. The contract for the purchase and sale of cutback asphalt, which is the subject matter of this action * * * specifically provides,
* It is understood and' agreed that any questions that may arise or any disputes that may occur in connection with any matter or thing relating to the subject of this contract, shall be determined by the laws of the State of New York and/or the laws of the United States of America ’.”

At the request of the Attorney-General of the United States, the United States Attorney for the Southern District of New York presented to the court a “ Suggestion of Immunity with respect to Petróleos Mexicanos and its property ” and attached to the Suggestion a letter from the State Department and a copy of the note of the Mexican Charge d’Affaires to which reference has been made earlier in this opinion. The Suggestion concludes:

“V. By reason of the premises it has been conclusively determined that said Petróleos Mexicanos is immune from suit and its property from attachment, and the claim of immunity having been recognized and allowed by the Executive Branch of the Government, and this suggestion of immunity having been filed pursuant to the directions of the Attorney General of the United States, it is the duty of this Court to dismiss the action against Petróleos Mexicanos for want of jurisdiction and to vacate any attachment or other process that may have heretofore been issued in this proceeding against any property of Petróleos Mexicanos. Companía -Espanola v. Navemar, 303 U. S. 68; Ex Parte Republic of Peru, United States Supreme Court, October term, 1942, Original No. 13, decided April 5, 1943.
“ Wherefore, the undersigned by direction of the Attorney General of the United States advises this Court of the foregoing communications and suggests and prays that the claim of immunity made on behalf of said Petróleos Mexicanos and recognized and allowed by the State Department be given full force and effect by this Court; that the said Petróleos Mexicanos and its property be declared immune from the jurisdiction and process of this Court; and for such other and further relief as to the Court may seem just.”

The letter from the State Department signed by the Secretary of State, states among other things: “ The Department accepts as true the statements made by the Charge d’Affaires ad interim to the effect that ‘ Petróleos Mexicanos ’ is a public Agency or Instrumentality of the Sovereign State of Mexico; and I may add that it has heretofore been recognized as such by this Government. Since it is well settled that a Sovereign Foreign State cannot be sued in the United States, without its consent, the Department, in the absence of evidence of such consent in the present instance, recognizes and allows the claim of the Government of Mexico that Petróleos Mexicanos ’ is immune from suit and its property from attachment.

It should be noted here that while the Secretary of State certifies that the Department accepts as true the statement that Petróleos Mexicanos is a “ public Agency of Instrumentality of the Sovereign State of Mexico and points out that it is well settled that a Sovereign Foreign State cannot be sued in the United States “ without its consent ” it is only “ in the absence of evidence of such consent in the present instance ” that the Department recognizes and allows the claim that Petróleos Mexicanos is immune from suit and its property from attachment. In the Suggestion filed by the United States Attorney the court is informed that it is its duty to dismiss the action against Petróleos Mexicanos for want of jurisdiction and to vacate the attachment issued in this proceeding, and there is no express reference to the fact that the Department of State has recognized the claim of immunity only in the absence" of evidence in this case of consent to be sued.

In spite of the Suggestion of the United States Attorney and the letter of the State Department, the court at Special Term felt constrained by its construction of earlier decisions of the Appellate Division to receive evidence on some of the matters urged by the plaintiff in the action in opposition to the motion to dismiss, and accordingly made an order that the questions of fact arising out of the papers submitted on this motion, to wit:

“ (1) Whether defendant, Petróleos Mexicanos, is an instrumentality of the United States of Mexico, solely for governmental purposes,
(2) Whether defendant, Petróleos Mexicanos, is a corporation or other legal entity engaged in business and in commercial activities,
(3) The nature and character of the business activities and enterprises of the defendant, Petróleos Mexicanos,
(4) Whether either the United States of Mexico or defendant, Petróleos Mexicanos, or both, have waived the right to claim immunity from suit on behalf of defendant, Petróleos Mexicanos,
be and the same hereby are referred to Jeremiah B. Lyons, Esq., of 70 Pine Street, as referee, to try such questions of fact and to report his findings to this court for its further action.”

The United States of Mexico then applied to the Appellate Division for an order prohibiting the judges and officers of the Supreme Court from taking any further steps and proceedings in the action brought by Associated Metals and Minerals Corporation against Petróleos Mexicanos and from enforcing any order or decision made herein. The Appellate Division granted the application, saying that “ without attempting to distinguish the cases heretofore considered in this State * * * we are impelled to grant the relief now sought because of the disposition of the United States Supreme Court in Ex Parte Peru (318 U. S. 578).” (267 App. Div. 167.)

The Supreme Court of the United States reiterated in the cited case the well established principle that courts may not so exercise their jurisdiction, by the seizure and detention of the property of a friendly sovereign, as to embarrass the executive arm of the government in conducting foreign relations.” (p. 588.) A friendly sovereign is immune from suit here and the property of the sovereign is immune from seizure and detention. A mere suggestion of immunity or assertion by a sovereign that a defendant sued here is its agent or that property seized under process of a court belongs to the sovereign does not, however, compel the court to decline jurisdiction or preclude judicial inquiry into the facts — even though the suggestion be presented to the court by the Attorney-General upon the request of the Department of State. A suggestion so presented is only the allegation of a claim and “ gives to the foreign government only the right to intervene and prove its allegation ” unless the Department of State does more than present the suggestion for “ such consideration as the Court may deem necessary and proper.” (Lamont v. Travelers Ins. Co., 281 N. Y. 362, 372, 374.) The situation is different when the claim has been examined by the “ political arm of the Government charged with the eon-duct of our foreign affairs ” and has been recognized and allowed by it. (Ex parte Peru, supra, 588.) The court there said that “ upon recognition and allowance of the claim by the State Department and certification of its action presented to the court ” by the Attorney-General, it is the duty of the court to decline jurisdicion, surrender the property held by virtue of its process and remit a plaintiff to the relief obtainable through diplomatic channels.

In this case the State Department has informed the Attorney-General that it “ recognizes and allows the claim of the Government of Mexico that4 Petróleos Mexicanos ’ is immune from u suit and its property from attachment and at the request of the Department of State the Attorney-General has presented to the court certification in due form of the action of the Department of State. Judicial inquiry into the validity of the claim that Petróleos Mexicanos is a 44 public Agency or Instrumentality of the Sovereign State of Mexico ” and is immune from suit ” was precluded after such certification was presented. It is immaterial whether upon a judicial inquiry a court might have found in the decree creating Petróleos Mexicanos an intention by the Mexican Government to create an autonomous corporation which should not share the immunity of the sovereign. That ceased to be a judicial question when the Department of State had authoritatively recognized the claim of immunity. The assertion by a foreign sovereign of immunity from suit here might in some cases cause hardship to domestic suitors, but we may not assume that the Government of Mexico would assert its sovereign immunity to evade a just claim, and our recognized public policy is that 44 our national interest will be better served in such cases if the wrongs to suitors, involving our relations with a friendly foreign power, are righted through diplomatic negotiations rather than by the compulsions of judicial proceedings.” (Ex Parte Peru, supra, 589.) It follows that the Appellate Division properly prohibited the court from proceeding with a judicial inquiry into the status of Petróleos Mexicanos and its immunity from suit. The Department of State having taken action upon the first three questions formulated in the order of reference and its action having been certified to the court4 4 the judicial department of this government follows the action of the political branch, and will not embarrass the latter by assuming an antagonistic jurisdiction.” (United States v. Lee, 106 U. S. 196, 209; Ex Parte Peru, supra.)

Apparently, however, upon the proceedings in the Appellate Division the court and the parties overlooked the fact that though the Department of State recognized and allowed the claim that Petróleos Mexicanos was immune from suit and its property from seizure, the State Department did not pass upon the question whether in its contract with Associated Metals and Minerals Corporation it had “ consented to be sued The Department of State pointed out that upon that question no evidence had been presented to it. Upon the appeal to this court that limitation in the Suggestion of Immunity was clearly pointed out to the court in a brief filed by the United States Attorney as amicus curiae with the permission of the court. Appended to the brief is a copy of a letter from the Secretary of State to the Attorney-General of the United States in which the Secretary of State said: “ Since the contract between the plaintiff and the defendant, upon which it was understood allegations of waiver of immunity would probably be predicated, was not in the possession of the Department when it requested your assistance on May 11, 1943, the Department did not, of course, pass upon the question whether the contract could properly be regarded as constituting consent to be sued in the United States, or whether, if it could properly be so regarded, such action on the part of the defendant operated to deprive the State of Mexico of its right of sovereign immunity. The Department did pass upon and determine all questions of immunity, waiver of immunity, and consent to be sued other than the effect, if any, of any provision in the contract between the plaintiff and the defendant which allegedly constituted consent 'to suit. Consequently, it would seem desirable that any misunderstanding which may have arisen in that relation be clarified in the proceedings now pending in the courts.”

We do not give effect to the letter as an official action of the Department of State supplementing its original action or even as an authoritative interpretation of that action — otherwise we might perhaps require that it be presented to the court more formally. It does no more than call attention to the significance of a phrase in the original letter which might otherwise be overlooked but which when noted requires no explanation. The political branch has at all times left to the judicial branch determination of whether the Mexican Government or its agent has by contract waived its sovereign immunity and has consented that Petróleos Mexicanos be sued here, though under the law of its creation it shares the sovereign immunity of the Government. The Supreme Court of this State still has jurisdiction of that question. We need not now consider whether the Department of State may if it chooses take official action which would require the court to relinquish its jurisdiction, nor do we now consider whether the question of law left open for judicial determination is substantial.

The order of the Appellate Division should be modified to the extent that the order of prohibition should be confined to the first three questions in the order of reference.

The order of the Appellate Division should be modified in accordance with this opinion, and, as so modified, affirmed, without costs. (See 293 N. Y. 768.)

Loughran, Rippey, Lewis, Conway, Desmond and Thacher,

JJ., concur.

Ordered accordingly.


text:
    Emil R. Pohlers, Respondent, v. Exeter Manufacturing Company, Appellant.
    Argued June 6, 1944;
    decided July 19, 1944.

      Walter H. Bond for appellant appearing specially.
    I. The amendment to section 217 of the General Corporation Law did not give jurisdiction to: the City Court of the City of New York to have its process personally served on the Secretary of State in the City of Albany because of section 18 of Article VI of the State Constitution. (Gruber v. Wilson, 276 N. Y. 135; Matter of Buoneto v. Buoneto, 278 N. Y. 284; Degnon v. Cook & Wilsons, 98 Misc. 251; Salzman v. Attrean, 142 Misc., 245; American Historical Society v. Glenn, 248 N. Y. 445; Glaser v. Northwestern Provision Packers Corp., 265 App. Div. 929; McCulloch v. American Carrier Corp., 172 Misc. 450; Matter of Schaefer Brewing Co. v. McCloskey, 266 App. Div. 790; Heihs v. Reinberg, 136 Misc. 815; Bischoff v. Schnepp, 139 Misc. 293; Marcus v. Day, 139 Misc. 283; Aiello v. Yale Transport Corp., 174 Misc. 867.) II. Section 18 of article VI of the State Constitution, as amended, in 1925, has new and decisive significance. Though it, now as before, expressly prohibits the conferring of jurisdiction of subject matter upon any inferior court, greater than that of the County Court, it now, as never before, expressly provides that an inferior court may have greater territorial jurisdiction than a county court, but not beyond the county or counties embraced within the city in which such inferior court may be located. (Landers et al. v. Staten Island R. R. Co., 53 N. Y. 450; Worthington v. London G. & A. Co., 164 N. Y. 81; Matter of Buoneto v. Buoneto, 278 N. Y. 284.)

      Reuben Golin for respondent.
    Service of process on the Secretary of State is authorized, under the special facts here present, by article VI, sections 11,15 and 18, of the State Constitution and section 217- of the General Corporation Law. (American Historical Society v. Glenn, 248 N. Y. 445; Matter of Buoneto v. Buoneto, 278 N. Y. 284; Worthington v. London G. and A. Co., 164 N. Y. 81; Johnson v. Manhattan & Queens Traction Corp., 162 App. Div. 753.)
   Lehman, Ch. J.

The defendant is a corporation organized in the State of New Hampshire, authorized by the Secretary of State to do business in the State of New York in accordance with section 210 of the General Corporation Law. The certificate of authority dated the 16th day of January, 1935, certifies that the appellant “ is authorized to do, in this state, the business set forth in the statement and designation, a copy of which is hereto annexed.” The “ statement and designation ” referred to in the certificate was filed by the defendant pursuant to the statute. In it the defendant states among other things: 2. The place where its office within the State of New York is to be located is No. 40 Worth Street, New York City. * * * 4. The said corporation hereby designates the Secretary of State of the State of New York as its agent upon whom all process in any action or proceedings against it may be served within the State of New York.” The summons and complaint in an action brought in the City Court of the City of New York in which the plaintiff seeks damages for his alleged wrongful discharge by the defendant from employment in the city of New York, was served at his Albany office upon the Secretary of State as designated agent of the defendant in April, 1943. The defendant appeared specially in the action and moved to set aside and vacate the service of the summons and complaint. The motion was denied and the order denying the ' motion was affirmed by the Appellate Term and the Appellate Division. The Appellate Division granted leave to appeal certifying the question: “ Should the service of the summons and complaint in this action on the Secretary of State have been vacated by the City Court of the City of New York ?”

The Judiciary Article (art. VI, § 15) of the New York State Constitution, as amended in 1925, provides that: “ The city court of the city of New York is continued, and * * * it shall have the same jurisdiction and power throughout the city of New York, under the name of the city court of the city of New York, as it now possesses within the county of New York and the county of Bronx, and original jurisdiction concurrent with the supreme court in actions for the recovery of money only in which the complaint demands judgment for a sum not exceeding three thousand dollars. * * * ” The territorial jurisdiction of the court was, from its inception, limited, and under the constitution remains limited. The process and mandates of the court may be executed in any part of the city of New York,” (New York City Court Act, § 27), and this court has held that the Legislature may not amend that section to provide that its mandates may be executed in any part of the State so as to extend its jurisdiction to defendants served with process outside the city of New York “ who did not reside in the city of New York and had no office for the transaction of business therein.” (American Historical Society v. Glenn, 248 N. Y. 445, 448.) Since service of process was effected in this case at the office of the Secretary of State in Albany, the defendant maintains that the City Court of the City of New York never acquired jurisdiction of its person.

The General Corporation Law requires a foreign corporation seeking authority to do business in this State to designate the Secretary of State as its agent upon whom all process in any action or proceeding may be served. The defendant complied with the statutory requirement. We need not now consider whether under the provision of the General Corporation Law then in force the Legislature intended that service of the process of a court of limited territorial jurisdiction might be made, pursuant to such designation upon a foreign corporation. The Legislature may amend the conditions it imposes, and the Legislature has now made clear its intention. Section 217 of the General Corporation Law, as amended by chapter 538 of the Laws of 1941, provides: Service of process against a corporation upon the secretary of state shall be made by personally delivering to and leaving with him or a deputy secretary of state duplicate copies of such process at the office of the department of state in the city of Albany. * * * If the action or proceeding is instituted in a court of limited jurisdiction, service of process may be made in the manner provided in this section if the cause of action arose within the territorial jurisdiction of the court and the office of the defendant corporation in the state, as set forth in its statement and designation, is within such territorial jurisdiction.” The question presented upon this appeal is whether the Legislature had power to enact the statute.

The statute applies to service of process in actions in all courts of limited jurisdiction. It does not extend the jurisdiction of any court to include the subject of any action not previously included in its jurisdiction. It does not extend the territorial jurisdiction of any court to permit service of process outside of its limited jurisdiction except where a corporation served has designated a person outside of the territorial limits of the court as its agent to accept such service. It does not make any court “ a great spider drawing into its web by its process the flies of small suits against defendants * * * who had never been within the limits ” of its territorial jurisdiction; nor does it give to plaintiffs within the local territorial limits ” of one court rights denied to plaintiffs elsewhere. It is not open to those objections which this court pointed out when it held unconstitutional the amendments to the New York City Court Act permitting service of process of the City Court of New York City throughout the State and upon defendants who “ did not reside in the city of New York and had no office for the transaction of business therein ” (American Historical Society v. Glenn, supra); nor is it open to the objections which the court pointed out might perhaps cast doubt upon the validity of section 52 of the Vehicle and Traffic Law, if construed in manner which would confer upon, the City Court of Yonkers jurisdiction of the person of a non-resident motorist of the State of New York by service of process upon the Secretary of State at his Albany office. (Gruber v. Wilson, 276 N. Y. 135.)

The question we must decide is narrow. It is not whether the Legislature may provide that the City Court of the City of New York can acquire jurisdiction of the. person of a defendant without consent of the defendant by service of process outside the territorial limits of the court; the question is whether the Legislature in section 217 of the General Corporation Law may require a foreign corporation as a condition of doing business here to consent in advance to service of process upon its agent in Albany in actions brought in a court of limited territorial jurisdiction if the cause of action arose within the territorial jurisdiction of the court and the office of the corporation is there. The answer to that question seems clear. Ordinarily a court can acquire jurisdiction of the person of a defendant only by service of process within the jurisdiction of the court; but that rule does not apply where the defendant “ has agreed in advance to accept, or does in fact accept, some other form of service as sufficient ” (Wilson v. Seligman, 144 U. S. 41, 44; cited in Gilbert v. Burnstine, 255 N. Y. 348). That is true, we there held, where a resident of New York has agreed in advance to accept service in New York of notice of an arbitratian in England pursuant to the provisions of the Arbitration Act of 1889 (52 and 53 Victoria, ch. 49). It is no less true where a resident of another State agrees in advance to accept service of process outside of the territorial limits of a New York court.

Here the consent ” has. been exacted by the State — not voluntarily offered by the, defendant. That does not detract from its validity. Except as limited by the Constitution of the United States each State may exclude foreign corporations from doing business (The Lafayette Ins. Co. v. French et al., 18 How. [U. S.] 404), or it may exact from a foreign corporation as a condition of doing business a consent to accept service of process in specified manner or upon a specified public officer in a specified place and with specified effect. (Penna. Fire Ins. Co. v. Gold Issue Mining Co., 243 U. S. 93; Washington v. Superior Court, 289 U. S. 361.) A designation of a public officer upon whom service may be made has the same effect as a voluntary consent. (Bagdon v. Philadelphia and Reading C. & I. Co., 217 N. Y. 432; Neirbo Co. v. Bethlehem Corp., 308 U. S. 165.) A foreign corporation filing such designation or consent cannot complain that the courts of the State have given a broader construction to such consent than the corporation intended, if its language “ rationally might be held to go to that length.” (Penna. Fire Ins. Co. v. Gold Issue Mining Co., supra, p. 95.) The condition imposed in this case is reasonable and in no wise discriminates in favor of domestic corporations against foreign corporations.

The order should be affirmed, with costs, and the certified question answered in the negative.

Loughran, Rippey, Lewis, Conway, Desmond and Thacher, ' JJ., concur.

Order affirmed, etc.