author: Jasen, J. Meyer, J.

text:
    Weston Banking Corporation, Respondent, v Turkiye Garanti Bankasi, A.S., Appellant.
    Argued October 6, 1982
    decided November 16, 1982

      POINTS OF COUNSEL

      Paul L. Kennedy and Harry G. Barlow for appellant.
    I. The court below erred in holding that the parties impliedly agreed that service of process could properly be made on Chemical Bank, a third party. (McDonald v Ames Supply Co., 22 NY2d 111; Commissioners of State Ins. Fund v Singer Sewing Mach. Co., 281 App Div 867; Beck v North Packing & Provision Co., 159 App Div 418; Eisenhofer v New Yorker Zeitung Pub. & Print. Co., 91 App Div 94; Fashion Page v Zurich Ins. Co., 69 AD2d 787; Feinstein v Bergner, 48 NY2d 234.) II. The court below erred in rejecting the substantive defenses based on documentary evidence. (Catanese v Lipschitz, 44 AD2d 579; Industrial Export & Import Corp. v Hongkong & Shanghai Banking Corp., 302 NY 342; Crashley v Press Pub. Co., 179 NY 27; Christie v Cerro De Pasco Copper Corp., 214 App Div 820, 243 NY 557; Perutz v Bohemian Discount Bank in Liquidation, 304 NY 533; Kraus v Zivnostenska Banka, 187 Misc 681; Johansen v Confederation Life Assn., 447 F2d 175; Oetjen v Central Leather Co., 246 US 297; French v Banco Nacional de Cuba, 23 NY2d 46; Dogan v Harbert Constr. Corp., 507 F Supp 254.) III. The court below incorrectly ruled that this action could be maintained under CPLR 3213 because it is brought upon “an instrument for the payment of money only”. (Kipp Bros. v Hartford Acc. & Ind. Co., 63 Misc 2d 788; Kemp v Hinkson, 73 Misc 2d 76; Goodman v Solow, 27 AD2d 920; Tonkonogy v Seidenberg, 63 AD2d 587; Hellenic Lines v Crown Cork & Seal Co., 70 AD2d 567; Century Constr. Corp. v Friedman, 40 AD2d 1033.) IV. If the court were to uphold the decision, it must nonetheless reverse the appellate court’s award to Weston of prejudgment interest. (Gold Medal Farms v Rutland County Co-op. Creamery, 9 AD2d 473, 10 AD2d 584; Marx & Co. v Diners’ Club, 405 F Supp 1, 550 F2d 505; Matter of Sabre Shipping Corp., 299 F Supp 97; Julien J. Studley, Inc. v Gulf Oil Corp., 425 F2d 947; Earnest v Deskey Assoc., 312 F Supp 1312.).

      Julian W. Friedman and Denise G. Shekerjian for respondent.
    I. Proper service was made. (Corhill Corp. v S. D. Plants, Inc., 9 NY2d 595; 67 Wall St. Co. v Franklin Nat. Bank, 37 NY2d 245; Laba v Carey, 29 NY2d 302; Muzak Corp. v Hotel Taft Corp., 1 NY2d 42; General Elec. Co. v Hatzel & Buehler, 19 AD2d 40, 14 NY2d 639; Inman v Binghamton Housing Auth., 3 NY2d 137; United States v Bosurgi, 343 F Supp 815; Fashion Page v Zurich Ins. Co., 50 NY2d 265; National Rental v Szukhent, 375 US 311; Matter of Bauer [MVAIC], 31 AD2d 239.) II. The promissory note sued on is “an instrument for the payment of money only” within the meaning of CPLR 3213. (Interman Ind. Prods. v R. S. M. Electron Power, 37 NY2d 151; Seaman-Andwall Corp. v Wright Mach. Corp., 31 AD2d 136, 29 NY2d 617; Jones v CHC Inds., 63 AD2d 1119; L & O Homes v Brown, 67 Misc 2d 594; National Conversion Corp. v Cedar Bldg. Corp., 23 NY2d 621; Corhill Corp. v S. D. Plants, Inc., 9 NY2d 595; Singer v Yokohama Specie Bank, 293 NY 542; Commission for Polish Relief v Banca Nationala a Rumaniei, 288 NY 332; Friedman v Airlift Int., 44 AD2d 459; Ehrlich v American Moninger Greenhouse Mfg. Corp., 26 NY2d 255.) III. The governing law requires that judgment for Weston be affirmed. (A. M. Knitwear Corp. v All Amer. Export-Import Corp., 41 NY2d 14; Laba v Carey, 29 NY2d 302; Teitelbaum Holdings v Gold, 48 NY2d 51; Rodolitz v Neptune Paper Prods., 22 NY2d 383; Reltron Corp. v Voxakis Enterprises, 57 AD2d 134; Diesel Constr. Co., Div. of Carl A. Morse, Inc. v Chase Manhattan Mtge. & Realty Trust, 58 AD2d 760, 44 NY2d 871; Tobin v Union News Co., 18 AD2d 243, 13 NY2d 1155; Matter of Crichton, 20 NY2d 124; Zeevi & Sons v Grindlays Bank [Uganda], 37 NY2d 220, 423 US 866; Intercontinental Planning v Daystrom, Inc., 24 NY2d 372.) IV. The Act of State doctrine is inapplicable to this action. (Underhill v Hernandez, 168 US 250; Matter of New York Times Co. v City of New York Comm. on Human Rights, 41 NY2d 345; Tabacalera Severiano Jorge S. A. v Standard Cigar Co., 392 F2d 706, 393 US 924; Zeevi & Sons v Grindlays Bank [Uganda], 37 NY2d 220, 423 US 866; Timberlane Lbr. Co. v Bank of Amer., N.T. & S.A., 549 F2d 597; Gonzalez v Industrial Bank [of Cuba], 12 NY2d 33; Menendez v Saks & Co., 485 F2d 1355, revd on other grounds sub nom. Dunhill of London v Cuba, 425 US 682; Republic of Iraq v First Nat. City Bank, Administrator, 353 F2d 47, 382 US 1027; United States v National City Bank of N. Y., 90 F Supp 448; Mirabella v Banco Ind. de la Republica Argentina, 101 Misc 2d 767.) V. The Bretton Woods Agreement is inapplicable to this action. (Banco Do Brasil, S. A. v A. C. Israel Commodity Co., 12 NY2d 371; Brill v Chase Manhattan Bank, 14 AD2d 852; Southwestern Shipping Corp. v National City Bank of N. Y., 11 Misc 2d 397, 6 AD2d 1036, 6 NY2d 454, cert den sub nom. First Nat. City Bank of N. Y. v Southwestern Shipping Corp., 361 US 895; Kolovrat v Oregon, 366 US 187.) VI. Weston is entitled to interest from the date of default at 9% per annum. (Corhill Corp. v S. D. Plants, Inc., 9 NY2d 595; General Elec. Co. v Hatzel & Buehler, 19 AD2d 40,14 NY2d 639; Astoria Fed. Sav. & Loan Assn. v Rambalakos, 49 AD2d 715; Costikyan v Keeffe, 54 AD2d 573; Stull v Joseph Feld, Inc., 34 AD2d 655.)
   OPINION OF THE COURT

Jasen, J.

On this appeal, we are asked to decide whether, in light of the Act of State doctrine and the Bretton Woods Agreement, a Panamanian bank can maintain an action in this State against a Turkish bank on the basis of a promissory note that designates New York as the proper jurisdiction for resolution of any disputes. A secondary issue presented by this appeal is whether there was proper service of process on the defendant.

The promissory note which plaintiff, Weston Banking Corporation, a Panamanian banking corporation, seeks to enforce was signed by representatives of the defendant on July 9, 1976 in Istanbul, Turkey. Pursuant to its terms, defendant bank undertook an obligation to repay plaintiff principal in the amount of 500,000 Swiss francs, plus interest calculated at 9% per annum. The interest was to be paid semiannually and the principal was due on July 9, 1979. The note also provided that: “Payment of principal and interest shall be made at the offices of the CHEMICAL BANK * * * New York City, New York, U.S.A., by means of a cable transfer to Switzerland in Lawful currency of the Swiss Federation.” Such payments were to be “made clear of all restrictions of whatsoever nature imposed thereon by, outside of bilateral or multilateral payment agreements or clearing agreements which may exist at the time of payment and free and clear of and without deductions for any taxes, levies, imposts, deductions * * * imposed * * * by the Republic of Turkey”.

Under the terms of the note, the defendant designated Chemical Bank, International Division, New York City, as its legal domicile and accepted the jurisdiction of New York courts “in the event of Judicial or extrajudial [sic] claim or summons of any nature”. The holder was also given the option to bring suit against the maker in the Turkish courts. The final paragraph of the note indicates that the note “is issued under communique number 164, published by the Ministry of Finance.”

Communique No. 164 amended Decree No. 17 of the Turkish Ministry of Finance. The .decrees allow banks in Turkey to open convertible Turkish lira deposit accounts (CTLDs) when the bank obtains foreign currency by borrowing or through deposits. The bank is required under Turkish law to transfer the foreign currency to the Central Bank of Turkey. The Central Bank credits the privately owned bank with the equivalent amount of Turkish lira. These amounts are then available for investment by the banks. This program was apparently designed to encourage Turkish banks to seek foreign investments and to help stabilize the Turkish balance of payments by making available to the Turkish government more foreign currency. The banks benefited because the Turkish government covered any costs incurred by a fluctuation in the exchange rates between the currencies.

In July, 1976, the defendant Turkish bank borrowed 500,000 Swiss francs from the plaintiff bank and used these funds to establish a CTLD. As the interest became due, payments were made in Swiss francs at Chemical Bank’s International Division in New York City. However, when the note was presented for payment in July, 1979, defendant refused to pay the principal on the ground that the then existing Turkish banking regulations barred it from paying back the loan in Swiss francs.

This action was then commenced in New York by serving a summons on a bank officer at Chemical Bank in New York City; no effort was made to serve the defendant directly. It is not disputed that the summons and accompanying papers were promptly forwarded by Chemical Bank to the defendant.

The plaintiff moved, in lieu of a complaint, for summary judgment on the basis of an instrument for the payment of money only. (CPLR 3213.) The defendant cross-moved for a dismissal of the action, or, in the alternative, for summary judgment on the grounds that: the service of process was improper; the Act of State doctrine barred such a claim; the Bretton Woods Agreement barred New York from entertaining this action involving Turkish monetary regulations; and the existence of another similar action pending in a different jurisdiction barred this action.

Special Term denied the motions, finding that factual questions existed regarding whether Chemical Bank had been designated an agent for service of process; whether the parties agreed to what law would control; and whether nonpayment was occasioned by Turkish banking regulations.

The Appellate Division modified, on the law, and granted plaintiff’s motion for summary judgment. Although Chemical Bank had not been specifically appointed as the defendant’s agent for service of process, the court held that such appointment was “implicit in its establishment of defendant’s legal domicile at Chemical Bank in New York.” That court further held that the Act of State doctrine could not be invoked by one who had entered an agreement which specified both the proper jurisdiction to resolve disputes and indicated that the intention of the parties was to avoid any restrictions which might be imposed by the defendant’s home government. Similarly, the court held that the Bretton Woods Agreement was not applicable because the repayment of the note did not involve any use of Turkish currency in violation of Turkish law. Finally, the court noted that the inability of the defendant to pay in Swiss francs went to the enforceability of the judgment and not to whether that judgment should be entered.

We affirm, but on a somewhat different rationale from that used by the Appellate Division.

It is not disputed that the defendant failed to pay the principal amount due plaintiff. Nor is the validity of the underlying note disputed. The heart of the defenses raised is that Turkish monetary regulations enacted subsequent to the date of the note make it legally impossible for the defendant bank to repay the loan in Swiss francs and that plaintiff’s only “recourse is to be repaid in Turkish lira.” Furthermore, the defendant contends that the promulgation of this regulation is an act of State and as such is beyond the review of New York courts. Similarly, defendant argues that the policy of the United States, as incorporated in the Bretton Woods Agreement (US Code, tit 22, § 286; 59 US Stat 512; 60 US Stat 1411), is to refrain from any interference with the monetary regulations of signatory countries.

The Act of State doctrine, simply stated, provides that “the courts in the United States will not inquire into the validity of the acts of a foreign government done within its own territory.” (French v Banco Nacional de Cuba, 23 NY2d 46, 52.) The underlying principle of this doctrine is that each sovereign State is “ ‘bound to respect the independence of every other sovereign State, and the courts of one country will not sit in judgment on the acts of the government of another done within its own territory.’” (French v Banco Nacional de Cuba, 23 NY2d 46, 52, supra, quoting Underhill v Hernandez, 168 US 250, 252.) This concept was reaffirmed by the Supreme Court in Banco Nacional de Cuba v Sabbatino (376 US 398, 416), where that court recognized that the Act of State doctrine has “ ‘constitutional’ underpinnings” arising “out of the basic relationships between branches of government in a system of separation of powers.” (Banco Nacional de Cuba v Sabbatino, 376 US 398, 423, supra.) Thus, the Supreme Court further noted that in order to assure that the individual States did not circumvent the dictates of international law, the Act of State doctrine and “our relationships with other members of the international community must be treated exclusively as an aspect of federal law.” (Banco Nacional de Cuba v Sabbatino, supra, at p 425.)

Both the Federal and State courts have been called upon to decide the applicability of the doctrine in various factual situations. In French v Banco Nacional de Cuba (23 NY2d 46, supra), this court held that the Act of State doctrine was applicable and, thus, a dismissal of the plaintiff’s cause of action against the Cuban National Bank was required. The bank, we held, was acting pursuant to Cuban currency regulations and the courts of this State were required, under the Act of State doctrine, to defer to those regulations even though we might have found them to be invalid if review were permissible. Thus, the court concluded that the plaintiff’s only recourse to obtain the tax exemption certificates he sought was through diplomatic channels. It should be noted that two preliminary factual conclusions were reached in deciding that the Act of State doctrine was applicable: first, that the new regulation controlled the question before the court; and, second, that plaintiff’s claims were based on a contract signed and executed in Cuba and governed by Cuban law.

We have, however, refused to apply the doctrine when the debt sought to be enforced was not located within the State whose acts are said to be dispositive. (Zeevi & Sons v Grindlays Bank [Uganda], 37 NY2d 220, 228, cert den 423 US 866.) Thus, a change in Ugandan law, which sought to prevent an Israeli company from collecting against letters of credit issued by an Ugandan bank, but payable out of funds held by the defendant bank in New York, was not found to be controlling under the Act of State doctrine. “The doctrine is not applicable here”, we held, “since a debt is not ‘located’ within a foreign State unless that State has the power to enforce or collect it.” (Zeevi & Sons v Grindlays Bank [Uganda], supra, at p 228.)

Similarly, the Federal courts have limited the applicability of the Act of State doctrine to governmental action affecting property within that government’s territory. (Republic of Iraq v First Nat. City Bank, 353 F2d 47, cert den 382 US 1027.)

Turning then to the facts of this case, we must determine whether the note and the regulation which defendant contends restricts the repayment of the promissory note require application of the Act of State doctrine. The note was executed in Istanbul, Turkey, and states that it is “issued under communique number 164” of the Turkish Ministry of Finance. Defendant contends that this makes the note subject to all Turkish monetary controls, even those enacted subsequent to the date of the note. Plaintiff, on the other hand, points out that Communique No. 164 merely authorizes Turkish banks to engage in this type of transaction and that the note specifies that repayment is not subject to regulation by the Turkish government. We wuuld add that the note requires payment to be made at Chemical Bank in New York City and designates New York law to be controlling.

We conclude that on these facts the Act of State doctrine does not constitute a defense to plaintiff’s action to recover on this note. A debt is not located within a foreign State unless it has the power at the instance of an interested party to enforce or collect it. (Zeevi & Sons v Grindlays Bank [Uganda], 37 NY2d 220, 228, supra; Republic of Iraq v First Nat. City Bank, 353 F2d 47, 51, supra.) Here, the debt is equally capable of being enforced against the defendant’s assets in New York as it is capable of being enforced against its assets in Turkey, and the State of Turkey has no power to enforce collection of this debt. The mere fact that this suit might have been commenced in Turkey, instead of New York, does not bar the action. Indeed, the note provides that New York shall be the proper jurisdiction for dispute resolution. Such a provision naturally contemplates enforcement of any judgment which would resolve the dispute. Thus, the Act of State doctrine does not bar this action.

Whether or not extraterritorial effect will be given to the Turkish regulation depends on whether it controls the issue presented to this court and whether it is consistent with the policies of this State. (Zeevi & Sons v Grindlays Bank [Uganda], supra, at pp 227-228; Republic of Iraq v First Nat. City Bank, supra, at p 51.) The initial inquiry must be to ask what the regulation provides.

Defendant has provided the court with translated and certified copies of all pertinent Turkish law and plaintiff has raised no claim concerning the propriety of these documents. Our reading of those regulations, whether individually or as representative of a continuous Turkish monetary policy, indicates that there is no per se ban imposed on all Turkish banks preventing them from paying this type of promissory note with foreign currency. The record indicates that the directive of the Ministry of Finance does not bar payment of the note, but, rather, establishes a program under which CTLDs could be restructured through the Turkish Central Bank. Defendant’s own counsel in responding to plaintiff’s inquiry about the effect of the restructuring program stated: “The Central Bank is obligated to pay interest only after CTLDs are included in the restructuring under the CTLD Credit Agreement. All CTLDs not included in the restructuring will remain obligations of the commercial banks in Turkey with which they are made.” Plaintiff denies ever agreeing to have this note included in the restructuring program. Defendant makes no claim and offers no proof to the contrary; in fact, the record is devoid of any indication that the regulations on which defendant relies are applicable to this note.

Thus, we need not reach the question of whether these regulations comport with this State’s policy so that they should be given extraterritorial application. It is sufficient to note that defendant has failed to introduce any documentation to support its contention that Turkish law forbids the payment of a promissory note designating that payment shall be made in Swiss francs at a bank incorporated in the United States.

This failure of proof also reaches to the validity of defendant’s claim that the Bretton Woods Agreement bars this action. The Bretton Woods Agreement (US Code, tit 22, § 286; 59 US Stat 512; 60 US Stat 1411) is an international treaty to which both the United States and Turkey are signatories. The purpose of the Agreement, as stated in article I (60 US Stat 1401), is to promote international monetary co-operation, exchange stability and “[t]o assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions which hamper the growth of world trade.” (Art I [iv].)

The defendant relies on article VIII (§2, subd [b]) of the Agreement as a defense to this action, which provides that “[ejxchange contracts which involve the currency of any member and which are contrary to the exchange control regulations of that member maintained or imposed consistently with this Agreement shall be unenforceable in the territories of any member.” This article renders unenforceable any agreement involving the currency of a member State which is contrary to “that member’s” currency control regulations. The promissory note involved here obligated the defendant to repay the plaintiff the principal sum loaned in Swiss francs and not Turkish lira.

Were the currency regulations to ban payment in foreign currencies when a CTLD was liquidated, a different case would have been presented. In this case, however, the regulation merely permits a Turkish bank to restructure the debt. As we previously stated, there is no proof, in this record, that if the debt were not restructured, the bank would be barred from repaying the plaintiff in Swiss francs as required by the terms of the note. Therefore, although we recognize the validity of the Bretton Woods Agreement and its potential controlling effect over international currency transactions, on the record before us, we do not find it to be applicable.

Defendants, having abandoned their claim that the action pending in Switzerland barred this action, raise only one additional defense — that is, that the service of process was defective because it was made on Chemical Bank in New York City, rather than on the defendant in Turkey. Although the note designates Chemical Bank as defendant’s domicile, defendant argues that the note did not designate Chemical Bank as its agent for service of process, nor was any other writing to that effect filed. (CPLR 318.)

The Appellate Division recognized that the note did not “explicitly appoint Chemical Bank defendant’s agent for service of process”, but held that “the appointment is implicit in its establishment of defendant’s legal domicile at Chemical Bank in New York” for the purposes of “judicial or extrajudicial claim[s] or summons of any nature.” We agree.

The language of the note is broad enough to be reasonably interpreted to indicate an intention on the part of the parties that Chemical Bank serve as the agent for all aspects of this transaction including for service of process. In the past, we have noted that an agent for the service of process can be appointed informally by a corporation and that having done so, the corporation “cannot escape the consequences of establishing alternative procedures which it may prefer.” (Fashion Page v Zurich Ins. Co., 50 NY2d 265, 272.) Since the service of process was made pursuant to the implicit direction of the promissory note itself, the defendant cannot now claim to have been improperly served.

Finally, since plaintiff did not cross-appeal from that part of the Appellate Division’s order which provided for the payment of interest at a rate of 6% per annum, rather than 9%, after the date the principal became payable, we do not now address that issue.

Accordingly, the order of the Appellate Division should be affirmed.

Meyer, J.

(dissenting). The International Monetary Fund (Bretton Woods) Agreement of 1945 (60 US Stat 1401, TIAS 1501) to which the United States and Turkey are signatories, the mandate of section 11 of the Bretton Woods Agreements Act (59 US Stat 516; US Code, tit 22, § 286b) that “the first sentence of article VIII, section 2(b), of the Articles of Agreement of the Fund * * * shall have full force and effect in the United States”, the legislative history of that Congressional enactment, the supremacy clause of the United States Constitution and the decision of the United States Supreme Court in Kolovrat v Oregon (366 US 187) establish beyond peradventure that the applicability of the first sentence of article VIII (§ 2, subd [b]) presents a question of Federal not State law. Moreover, although the procedure by which that issue is decided is a matter of State law, the substance of the question “is not to be determined exclusively by the state court”; that phase of the matter the Supreme Court “will review or independently determine” (United States v Pink, 315 US 203, 217).

Thus the correctness of the determination reached by this court on the record before it is subject to further review by the Supreme Court, although the procedural propriety of our review of the Appellate Division’s determination of Turkish law as a matter of law (CPLR 4511, subd [c]), of the use of the materials upon which that determination is based (CPLR 4511, subd [b]) and of the discretion involved in deciding the matter without receiving evidence in addition to the written submissions (CPLR 4511, subd [d]); see Rosman v Trans World Airlines, 34 NY2d 385) is not. Because on the record before the court the determination made is, in my view, incorrect and the courts of this State are bound as a matter of Federal law to apply article VIII (§ 2, subd [b]) of the Bretton Woods Agreement and refuse to enforce the note sued upon, I respectfully dissent.

If article VIII (§ 2, subd [b]) applies, neither the Act of State doctrine referred to by the majority and the Appellate Division nor the intention of the parties to free it from Turkish regulation, relied upon by the Appellate Division, are relevant. The starting point for analysis is rather the Appellate Division’s statement (86 AD2d 544, 545) that “Communique No. 164, under which the note was issued, imposes no conditions on repayment; it simply authorizes issuance of a note payable in foreign currency” and the statement of the majority in this court (pp 325-326) “that defendant has failed to introduce any documentation to support its contention that Turkish law forbids the payment of a promissory note designating that payment shall be made in Swiss francs at a bank incorporated in the United States.” Does the record bear out those conclusions?

Pertinent to that inquiry is CPLR 4511 (subd [b]), which provides that “Every court may take judicial notice without request of * * * the laws of foreign countries” and requires that “Judicial notice shall be taken of matters specified in this subdivision if a party requests it, furnishes the court sufficient information to enable it to comply with the request, and has given each adverse party notice of his intention to request it” (emphasis supplied). Defendant’s cross motion was supported by an affidavit to which was attached a number of Turkish orders and decrees. It asked for summary judgment on the basis of the documentary evidence thus submitted. The court is, under the above-quoted sentence, required therefore to take judicial notice of all of the orders and decrees so submitted. The question, then, is not whether Communique No. 164 in so many words imposed a condition upon payment, but whether the Turkish regulatory system, of which the communique (which is entitled “Communique on Decree No. 17 Regarding Protection of the Value of Turkish Currency”) is but a part, establishes an exchange control regulation within the meaning of article VIII (§ 2, subd [b]) of the agreement.

When the documents are examined together with the affidavit explaining the relationship between them there can be no question but that it does, the more particularly so because plaintiff has submitted no contrary documents or opinions concerning Turkish law. Thus, the Even affidavit annexes Law No. 1567 promulgated in 1930 “regarding protection of the value of Turkish currency,” Law No. 6258 of 1954, which continued and expanded the restrictions upon export of foreign exchange, and Decree No. 17 of 1962, which put all foreign exchange, by whomever owned, at the disposal of the Ministry of Finance and limited spending of exchange to that authorized by the Ministry. The affidavit attaches also copies of Communique Nos. 2, 145 and 164 promulgated pursuant to Decree No. 17 and recounts that through these communiques the CTLD system was established to attract foreign exchange into Turkey through deposits for three years or longer paying very high interest, which, however, were required under Communique No. 145 to be paid over to the Central Bank of Turkey in return for the equivalent in Turkish lira. It attaches as well a copy of plaintiff’s order to its Swiss bank by which it made the deposits that are the consideration for the notes sued upon, which acknowledged that the deposits were made subject to Turkish regulations requiring the Swiss francs to be paid over to the Central Bank of Turkey.

As defined by Decree No. 17 foreign exchange includes all foreign currencies “and instruments of any kind assuring payment in these currencies” and, as already noted, the decree puts all foreign exchange by whomever owned at the disposal of the Ministry of Finance and limits spending of foreign exchange to expenditures authorized by the general or special permission of the Ministry. By decision of the Ministry as relayed to defendant by letter of December 29, 1977, permission to repay principal of CTLDs in foreign exchange was canceled. Clearly, therefore, the documentation accompanying defendant’s cross motion, of which we are required to take judicial notice, establishes that Turkish law forbids the Swiss franc payment for which, by this action on the note, plaintiff sues.

That conclusion does not end the inquiry, however, for there remains the question whether the Bretton Woods Agreement makes the note unenforceable by our courts. The answer must be in the affirmative if (1) payment is contrary to Turkish regulation, (2) the regulation is maintained consistently with the agreement, (3) Turkish currency is involved and (4) the note is an “exchange contract” within the meaning of article VIII (§ 2, subd [b]).

The first three factors are not open to serious question. That the repayment of Swiss francs called for by the note (or the payment of a dollar-equivalent judgment on the note) is contrary to the Turkish regulation is demonstrated beyond question by attachments to the Even affidavit of defendant’s June 26, 1979 request for Ministry permission to pay the notes when due in Swiss francs, the Central Bank’s July 9, 1979 reply advising that the Ministry had denied the request and placed the notes “within the scope of rescheduling” for payment, and of defendant’s September 14, 1979 voucher remitting to Central Bank for remittance to plaintiff the then equivalent in Turkish lira of 500,000 Swiss francs.

Plaintiff suggests that the regulation is not maintained consistently with the agreement because the purpose of the agreement is to promote exchange stability, because article VIII (§ 2, subd [a]) provides that “no member shall, without approval of the Fund, impose restrictions on the making of payments and transfers for current international transactions”, and because paragraph a of section 1 of article IV requires members to avoid manipulating exchange rates in order to prevent effective balance of payment adjustments or to gain an unfair competitive advantage over other members. The argument overlooks the provisions of section 2 of article XIV which permits “restrictions on payments and transfers for current international transactions” during the “post-war transitional period” even though not approved by the fund, and the powers of the fund under section 4 of that article to make representations that such controls be withdrawn, and under section 2 of article XV to compel withdrawal of a member whose regulations offend against the agreement’s provision. Plaintiff presents nothing to suggest that Turkey has violated article IV, to indicate that the Turkish regulation first imposed in 1930 and amended postwar many times is not a permitted transitional period restriction, or indeed that if not such, the restriction has not been approved by the fund. Consistency of the regulation in question may be inferred from the failure of the fund to take any action against Turkey with respect to it, as it had done, for example, in 1954 with respect to Czechoslovakia (Gold, Interpretation By The Fund, p 11), the more so because, despite the offer of the fund {id., at p 7; reprinted at 14 Fed Reg 5208) to advise whether a particular control is consistent, as well as on any other aspect of article VIII (§ 2, subd [b]), plaintiff has presented nothing to establish inconsistency.

There is involvement of Turkish currency, moreover, even though the note in suit is payable in New York in Swiss francs. The note recited that it was issued under Communique No. 164, the title of which is “Communique on Decree No. 17 Regarding Protection of the Value of Turkish Currency” (emphasis supplied), and Weston’s deposit order to its Swiss bank noted the requirement that the Swiss francs be “brought into the republic of turkey according to regulations established by the ministry of finance in turkey whereby the swiss francs have to be paid to the central bank of the republic of turkey.” “Involve” carries such connotations as “entangle”, “implicate”, “embroil”, “connect” and “affect”. Because the purpose of the first sentence of article VIII (§ 2, subd [b]) is to protect the limited controls which the agreement permits by reversing the private law doctrines under which such controls had previously been largely circumvented by the courts, involvement of the currency should be read in terms of the interests of the country whose regulation is in issue rather than of the parties. Moreover, Weston, having paid over its Swiss francs with the understanding that they were destined for the Turkish Central Bank and that the note was governed by a decree protecting Turkish currency, should not be heard to argue that Turkish currency is not affected, implicated or embroiled in the transaction.

A more difficult problem is whether the note is an exchange contract within the meaning of the agreement. I do not blink the fact that Zeevi & Sons v Grindlays Bank

(Uganda) (37 NY2d 220, 229, cert den 423 US 866) held that a “letter of credit is not an exchange contract” and that Banco Do Brasil, S.A. v Israel Commodity Co. (12 NY2d 371, 375-376, cert den 376 US 906) inclined to the view that it would do violence to the text of the section to interpret it as including “all contracts affecting any members’ exchange resources.” The narrow interpretation thus arrived at is, however, inconsistent not only with the more expansive reading given the agreement in Banco Frances e Brasileiro v Doe (36 NY2d 592, cert den 423 US 867) and Perutz v Bohemian Discount Bank in Liquidation (304 NY 533) but also with the conclusion reached by the courts of at least one other State, of courts of other countries which are members of the fund and of commentators. Although there are contrary views the majority view reads “exchange contracts” as used in the agreement, in light of the legislative history of the provision, broadly enough to encompass a transaction based in contract which involves exchange or affects the balance of payments or exchange resources of a member nation.

Because, as the foregoing discussion shows, the note in suit is governed by Turkish regulations and the Bretton Woods Agreement and the Bretton Woods Agreements Act proscribe enforcement of the note by the courts of this State in contravention of those regulations, I would grant defendant’s cross motion for summary judgment dismissing the complaint.

Chief Judge Cooke and Judges Gabrielli, Jones, Wachtler and Fuchsberg concur with Judge Jasen; Judge Meyer dissents and votes to reverse in a separate opinion.

Order affirmed, with costs.

      . (Both HR Rep No. 629, 79th Cong, 1st Sess, p 70 [1945] and Sen Rep No. 452,79th Cong, 1st Sess, p 28 [1945] state that: “It also gives effect to that portion of the fund agreement which provides that when other member countries have exchange controls which are consistent with the articles of agreement, United States courts will not enforce exchange contracts that violate such controls.”)

      . Clause 2 of article VI: “This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding. ”

      . “Exchange contracts which involve the currency of any member and which are contrary to the exchange control regulations of that member maintained or imposed consistently with this Agreement shall be unenforceable in the territories of any member.”

      . (Confederation Life Assn. v Ugalde, 164 So 2d 1, 3 [Fla], cert den 379 US 915; Crown Life Ins. Co. v Calvo, 164 So 2d 813 [Fla], cert den 379 US 915; Sun Life Assur. Co. of Canada v Klawans, 165 So 2d 166 [Fla]; contra Theye y Ajuria v Pan-Amer. Life Ins. Co., 245 La 755, 766-767, cert den 377 US 997; see Pan-Amer. Lifelns. Co. v Raij, 164 So 2d 204 [Fla], cert den 379 US 920; Blanco v Pan-American Life Ins. Co., 221 F Supp 219, 228-229; see, also, Gold, The Cuban Insurance Cases and the Articles of the Fund and the Paradise article, infra, n 6, discussing the above cases.)

      . The other country cases are discussed in Gold, The Fund Agreement in the Courts ([1962], pp 1, 43, 64 and 72); Gold, The Fund Agreement in the Courts (Parts VIII-XI [1976] , pp 9, 28, 50, 73, 87,102,139); Gold, The Fund Agreement in the Courts (Part XII [1977] ); and Gold, The Fund Agreement in the Courts (Part XIV [1979]). From the report and discussion in those articles it appears that though the courts of England originally adopted a broad view of “exchange contract” (Gold [1976], pp 43-50), they now take the narrower view (Gold [Part XII], pp 205-220). However, the broader view is accepted by the highest courts of France (Gold [1962], pp 146,153; Gold [Part XII], p 221), Germany (Gold [1976], pp 78-79), the Netherlands (Gold [1962], p 116), Austria (id., p 90), Luxembourg (id., p 94) and Hong Kong (id., p 87).

      . (Baker, Enforcement of Contracts Violating Foreign Exchange Control Laws, 3 Int Trade LJ 247, 273 ff; Gold, op cit, passim; Gold, International Monetary Fund and Private Business Transactions, p 24; Mann, Legal Aspect of Money [4th ed], pp 389, 391; Meyer, Recognition of Exchange Controls After the International Monetary Fund Agreement, 62 Yale LJ 867, 885; Paradise, Cuban Refugee Insureds and the Articles of Agreement of the International Monetary Fund, 18 U of Fla L Rev 29, 55 ff; Pohn, International Law — Court Refuses to Put Export-Import Contract Within Bretton Woods Agreement, 15 Syracuse L Rev 100,102; Williams, Extraterritorial Enforcement of Exchange Control Regulations Under the International Monetary Fund Agreement, 15 Va J Int Law 319, 332 ff; Williams, Enforcement of Foreign Exchange Control Regulations in Domestic Courts, 70 Am J Int L 101, 106, n 31; Williams, Foreign Exchange Control Regulation and the New York Court of Appeals, 9 Cornell Int LJ 239, 243; Note, 63 Col L Rev 1334, 1336.)


source: Caselaw Access Project

author: Gabrielli, J. Fuchsberg, J.

license: Public Domain

text:
    The People of the State of New York, Respondent, v Jean S. Harris, Appellant.
    Argued October 14, 1982
    decided November 16, 1982

      POINTS OF COUNSEL

      Herald Price Fahringer and Paul J. Cambria for appellant.
    I. The prejudice caused by the violation of Jean Harris’s Sixth Amendment right to counsel occasioned by a policeman testifying about a conversation overheard between her and her attorney compels a reversal of her conviction. (People v Grimaldi, 52 NY2d 611; People v

      Rogers, 48 NY2d 167; People v Cunningham, 49 NY2d 203; People v Rainey, 34 AD2d 557; People v Crimmins, 36 NY2d 230; Chapman v California, 386 US 18; People v Baker, 23 NY2d 307; People v Green, 35 NY2d 437; People v Murtha, 63 AD2d 579; People v Buchanan, 57 AD2d 686.) II. Jean Harris was denied a fair trial, under the due process clause, when the prosecution was permitted to call a crucial rebuttal witness, Juanita Edwards, whose testimony was deliberately withheld from the State’s case-in-chief. (People v Lynes, 49 NY2d 286; People v Jung Hing, 212 NY 393; People v Harris, 209 NY 70; People v Caruso, 246 NY 437; People v Conklin, 175 NY 333¡People v Lauro, 91 Misc 2d 706; Shepard v United States, 290 US 96; United States v Kaplan, 510 F2d 606; United States v Brown, 490 F2d 758; Marshall v Davies, 78 NY 414.) III. The trial court’s failure to close the pretrial hearings, which generated massive publicity and were conducted simultaneously with jury selection, denied Jean Harris a fair trial under the Fifth and Sixth Amendments to the United States Constitution. (Matter of Gannett Co. v De Pasquale, 43 NY2d 370, 443 US 368; Matter of Hearst Corp. v Clyne, 50 NY2d 707; Matter of Westchester Rockland Newspapers v Leggett, 48 NY2d 430; Matter of Oneonta Star Div. of Ottaway Newspapers v Mogavero, 77 AD2d 376; Matter of Merola v Bell, 68 AD2d 24, 47 NY2d 985; People v Christopher, 109 Misc 2d 767; Matter of Gannett Co. v Weidman, 102 Misc 2d 888.) IV. Jean Harris was denied her rights under the Sixth Amendment to the United States Constitution because she was unable to exercise a challenge against a sworn juror whose daughter had received favorable treatment from the prosecutor. (Irvin v Dowd, 366 US 717; People v Provenzano, 50 NY2d 420; People v Culhane, 33 NY2d 90; People v Branch, 46 NY2d 645; People v Blyden, 55 NY2d 73; People v West, 38 AD2d 548; People v De Leon, 32 NY2d 944; People v Hughes, 137 NY 29; United States v Brown, 539 F2d 467; Rapp v Van Dusen, 350 F2d 806.) V. The pervasive prosecutorial misconduct violated Jean Harris’s right to a fair trial guaranteed by the Fifth Amendment to the United States Constitution. (Berger v United States, 295 US 78; Matter of Gannett Co. v De Pasquale, 43 NY2d 370; People v Perez, 69 AD2d 891; People v Crossman, 69 AD2d 887; People v Webb, 68 AD2d 331; People v Goggins, 64 AD2d 717; People v Mariable, 58 AD2d 877; Babb v United States, 351 F2d 863; Patriarca v United States, 402 F2d 314.) VI. The court’s arbitrary refusal to allow defense counsel access to Dr. Tarnower’s home to investigate the circumstances of the homicide deprived Jean Harris of the effective assistance of counsel and due process of law as guaranteed by the Fifth and Sixth Amendments to the United States Constitution. (1417 Bedford Realty Co. v Sun Oil Co., 21 AD2d 684; Williams v Florida, 399 US 78; United States v Bryant, 439 F2d 642; Alderman v United States, 394 US 165; Brady v Maryland, 373 US 83; United States v Heath, 147 F Supp 877; United States v Pollack, 417 F Supp 1332; People v Churba, 76 Misc 2d 1028; People v Emmons, 99 Misc 2d 941; United States v Picariello, 568 F2d 222.) VII. The court’s refusal to charge the jury that Jean Harris could have “two homes” in connection with the charge of weapon’s possession was reversible error. (People v Powell, 54 NY2d 524; People v Le Mieux, 51 NY2d 981.)

      Carl A. Vergari, District Attorney (.Anthony Joseph Servino, Gerald D. Reilly and Richard E. Weill of counsel), for respondent.
    I. Nisi prius properly admitted Officer Tamilio’s testimony relating appellant’s “conversation” with Mr. Jacobsen. Resort to the exclusionary rule is unavailing where, as here, there is an affirmed finding of absolutely no police misconduct. In any event, to the extent that error occurred, it was harmless. (People v Cooper, 307 NY 253; Matter of Fusco v Moses, 304 NY 424; Hoffa v United States, 385 US 293; People v Lanahan, 55 NY2d 111; People v White, 56 NY2d 110; People v Stoesser, 53 NY2d 648; People v McGrath, 46 NY2d 12; People v Sanders, 56 NY2d 51; People v Rivers, 56 NY2d 476; Harris v New York, 401 US 222.) II. The testimony of Juanita Edwards, otherwise inadmissible (as a matter of law) on the prosecutor’s casein-chief, constituted proper rebuttal evidence since certain facts adduced from defendant’s case and, more specifically, from defendant’s own testimony, removed all legal barriers which had initially precluded its admissibility. (People v Lynes, 49 NY2d 286; Marshall v Davies, 78 NY 414; People v Conde, 13 NY2d 939.) III. Defense counsel’s media blitz cannot now be viewed as prejudicial to his client’s cause. Nonetheless, appellant waived courtroom closure by failing to make a timely objection to the prosecutor’s filing of Huntley notices in this matter. Moreover, her motion for closure was predicated solely upon the possibility that certain of her statements to police might be suppressed; no such suppression occurred. (People v Spruill, 47 NY2d 869; Matter of Westchester Rockland Newspapers v Leggett, 48 NY2d 430.) IV. The trial court properly exercised its discretion when it denied the defense “application” to excuse the sworn juror Marian West. Mrs. West had no knowledge of Assistant District Attorney Lalla’s connection with her daughter’s case. Her status as a qualified and unbiased juror previously accepted by the defense had not changed simply because Assistant District Attorney Lalla subsequently revealed that he had knowledge of Mrs. West’s daughter’s case. (People v Carpenter, 102 NY 238; People v Mancuso, 26 AD2d 292; People v Provenzano, 50 NY2d 420.) V. Appellant received an eminently fair trial (responding in the main to appellant’s Point V). (People v Licitra, 47 NY2d 554; People v Arce, 42 NY2d 179; People v Ashwal, 39 NY2d 105; People v Shields, 58 AD2d 94.) VI. Appellant’s undue delay in making requests for discovery made her motion to inspect the “crime scene” wholly academic. In any event, such a request lay outside the scope of discovery under CPL article 240. (People v Selby, 53 AD2d 878, 43 NY2d 791; Brady v Maryland, 373 US 83.) VII. The court’s charge on criminal possession of a weapon in the third degree was in all respects proper. (People v Francis, 45 AD2d 431; People v Fearon, 58 AD2d 1041; People v Perez, 45 NY2d 204.)
   OPINION OF THE COURT

Gabrielli, J.

Defendant, Jean Harris, was convicted, following a jury trial, of murder in the second degree and criminal possession of a weapon in the second and third degrees. This appeal presents for our consideration several purported errors occurring during the course of that trial, which defendant urges mandate reversal of the judgment of conviction. Inasmuch as our resolution of these issues leads us to the conclusion that reversible error was not committed, there should be an affirmance.

Defendant’s trial for murder arose out of the shooting death of Dr. Herman Tarnower in his home on March 10, 1980. The People’s case proceeded on the theory that Mrs. Harris, who had been Dr. Tarnower’s paramour and companion for nearly 14 years, went to his home on the evening of the shooting and, acting out of jealous rage over the doctor’s relationship with a younger woman, deliberately shot and killed him. One of the prosecution’s witnesses, Dr. Tarnower’s house manager, testified to the difficulties that had resulted from the doctor’s relationships with the two women. Mrs. Harris’s oral statements, testified to by the police officers who were investigating the shooting, were also relied upon as evidence of her motivation in going to the Tarnower estate on the evening of the shooting. The prosecution also utilized the so-called “Scarsdale letter”, written by Mrs. Harris to the doctor over the weekend prior to his death, as strong evidence of Mrs. Harris’s state of mind. In this letter, which contained several unflattering references to the younger woman in Dr. Tarnower’s life, Mrs. Harris described her feelings of anguish and rejection over the doctor’s apparent preference for this younger woman.

The defense theory was that Mrs. Harris, physically agitated by the lack of medication she had been taking for some time and suffering from recent failures and disappointments in her professional life, had determined that she wanted to end her life. Intending to see Dr. Tarnower once more before she died, Mrs. Harris drove to his home on March 10, hoping only to speak with him for a few moments. She entered the doctor’s home and went into his bedroom, where she found him sleeping. Mrs. Harris was unable to rouse the doctor in order to have a conversation with him. Apparently upset by his lack of responsiveness and the presence of the belongings of the other woman in the bathroom, Mrs. Harris decided to kill herself there in the doctor’s bedroom. According to Mrs. Harris, as she attempted to carry out her desire, the doctor, who had by now awakened, tried to prevent her from shooting herself. Several struggles ensued, during which Mrs. Harris’s gun discharged, shooting Dr. Tarnower and inflicting four gunshot wounds from which he died. Evidence concerning Mrs. Harris’s version of these events and her state of mind on the night of the shooting and previously thereto was presented largely through the testimony of Mrs. Harris herself. The defense also relied upon a will and certain letters, written by Mrs. Harris just prior to her departure for the Tarnower - estate on March 10, to demonstrate her belief that she would never return to her home, because she intended to end her life. In addition, the defense offered a number of witnesses who testified that Mrs. Harris had indeed been distraught over recent events occurring in connection with her position as headmistress of the Madeira School.

Thus, the major and, indeed, critical issue at trial was whether, as the prosecution contended, defendant had deliberately shot Dr. Tarnower, intending to kill him, or, as the defense urged, the shooting had been accidental. This question was resolved by the jury in favor of the prosecution, and the legal sufficiency of the evidence upon which the verdict was based is not challenged on this appeal. Defendant claims, however, that numerous errors infected both pretrial proceedings and the trial itself, which operated to deprive her of a fair trial. We deal with these contentions separately below and engage in further discussion of the evidence in this case only insofar as it relates to the specific issues raised by defendant.

I

On the night of her arrest at the Tarnower residence, defendant made a statement over the telephone to her attorney. She contends that the introduction into evidence of that statement, testified to by a police officer who overheard it, violated her right to counsel under the Constitution of this State. It appears that Mrs. Harris, having been read her Miranda rights several times, having waived those rights and made statements to the police officers who were investigating the shooting, was thereafter asked if she would like to make a telephone call. Mrs. Harris responded that she would like to call a lawyer friend. After an attempt to make this call at a nearby telephone was unsuccessful, one of the officers, Lieutenant Flick, went into the house manager’s bedroom to place the call for Mrs. Harris. When the lieutenant reached Mrs. Harris’s party, he left the bedroom to so inform her. Officer Tamilio, at Lieutenant Flick’s request, assisted Mrs. Harris to the bedroom. When they entered the room, the house manager’s husband was already there, standing a few feet from the telephone. Immediately upon picking up the telephone, Mrs. Harris made the statement: “Oh, my God, I think I’ve killed Hy”. Its admission into evidence is now challenged.

It is clear that, at the time Mrs. Harris made this statement, her right to counsel had attached by virtue of her request to speak with an attorney (People v Cunningham, 49 NY2d 203). Once the right to counsel had been invoked, no further questioning of Mrs. Harris would have been permissible, unless she had affirmatively waived her rights in the presence of her attorney (People v Rogers, 48 NY2d 167; People v Hobson, 39 NY2d 479). Notwithstanding this rule, statements made by a defendant who has invoked the right to counsel may nevertheless be admissible at trial if they were made spontaneously. In order for such statements to be characterized as spontaneous, it must “be shown that they were in no way the product of an ‘interrogation environment’, the result of ‘express questioning or its functional equivalent’ ” (People v Stoesser, 53 NY2d 648, 650).

On the record before us, it is clear that no questioning of Mrs. Harris occurred after she invoked her right to counsel. The statement was neither induced, provoked nor encouraged by the actions of the police officers (see People v Rivers, 56 NY2d 476), who had been entirely solicitous of Mrs. Harris’s request to speak with a lawyer and had scrupulously honored her rights in this regard (cf. People v Grimaldi, 52 NY2d 611). There is nothing in the record to indicate that Officer Tamilio endeavored, by subtle maneuvering or otherwise, to overhear Mrs. Harris’s conversation with her attorney. Indeed, the record reflects that this officer, having assisted Mrs. Harris to the telephone, was backing out of the room when he inadvertently overheard the statement. It appears, therefore, that the officer had no opportunity to remove himself from earshot before Mrs. Harris made the damaging statement. Thus, we are not presented with a situation in which the police have failed to respect a defendant’s right to consult privately with an attorney. Under the circumstances of this case, we conclude that no violation of defendant’s right to counsel occurred.

Although we hold today that a statement properly characterized as spontaneous is no less so simply because it was made to an attorney, a further aspect of the admissibility of such statements should be considered. Given that the communication received in evidence was made to an attorney, the attorney-client privilege is implicated, in addition to the right to counsel. This privilege protects those communications made by a defendant to an attorney that are intended to be confidential (People v Buchanan, 145 NY 1; Baumann v Steingester, 213 NY 328). It cannot be said, on the facts of this case, that Mrs. Harris, in speaking over the telephone to a lawyer in the known presence of both a police officer and the house manager’s husband, intended this communication to be confidential. Generally, communications made in the presence of third parties, whose presence is known to the defendant, are not privileged from disclosure (see Richardson, Evidence [10th ed], § 413; 8 Wigmore, Evidence [McNaughton rev], § 2311). We see no reason to depart from this general rule simply because one of those parties present was a police officer, who, as has been noted, did nothing to purposely overhear the conversation or conceal his presence from defendant. Thus, we conclude that defendant’s attorney-client privilege was not violated by the officer’s testimony regarding this communication and that the testimony was properly admitted by the trial court.

II

The next issue to be considered is whether defendant was denied a fair trial by the prosecution’s use of certain evidence in rebuttal. On direct examination, Mrs. Harris testified that, on the morning of March 10, she called Dr. Tarnower at his office in the Scarsdale Medical Center from her private telephone. Mrs. Harris stated that she and the doctor spoke of a number of things, and the doctor invited her to spend an upcoming weekend with him. On cross-examination, Mrs. Harris strenuously denied that, during the conversation, the doctor told her that she had lied and cheated, that she was going to inherit $240,000 or that he wanted her to stop bothering him. The prosecution then offered in rebuttal the testimony of a patient of Dr. Tarnower’s who had been in an examining room with the doctor on the morning of March 10, when a telephone call was put through. The doctor answered the telephone in the examining room, but left the room to complete the conversation without severing the connection to the examining room. The patient overheard parts of the ensuing conversation, and although the voices were muffled and indistinct, she heard the doctor make the following statements: “God damn it, Jean, I want you to stop bothering me”; “You’ve lied and you’ve cheated”; “Well, you’re going to inherit $240,000”. We agree with the Appellate Division that this evidence was proper rebuttal.

The prosecution, of course, had the burden of establishing that Mrs. Harris intended to kill Dr. Tarnower. To this end, evidence was introduced in an attempt to establish that Mrs. Harris was in a jealous rage over the doctor’s relationship with another woman. Mrs. Harris sought to controvert this theory of her state of mind by offering evidence that she acted solely out of her desire to end her own life and not out of any intent to harm the doctor, whose need for other women she had come to understand and accept. Mrs. Harris’s direct testimony regarding the telephone conversation she had with the doctor on the morning of the shooting tended to confirm her view that all was well in their relationship.

It was proper, thereafter, for the prosecution to attempt to rebut Mrs. Harris’s version of the nature of that relationship by introducing evidence concerning statements made by the doctor during the telephone call, which had been denied by Mrs. Harris. The rules concerning the proper scope of rebuttal evidence are clear. The party holding the affirmative of an issue must present all evidence concerning it before he closes his case. Thereafter, that party may introduce evidence in rebuttal only. “Rebutting evidence in such cases means, not merely evidence which contradicts the witnesses on the opposite side and corroborates those of the party who began, but evidence in denial of some affirmative fact which the answering party has endeavored to prove” (Marshall v Davies, 78 NY 414, 420; see People v Bonier, 189 NY 108, 121). In the present case, the prosecution offered the testimony of Dr. Tarnower’s patient not to establish an element of its case-in-chief (i.e., intent to kill), but merely to contradict Mrs. Harris’s testimony and to disprove the alternate state of mind offered to explain her actions. That being the case, the evidence was properly received in rebuttal even if it could have been offered on direct (Ankersmit v Tuch, 114 NY 51; see 6 Wigmore, Evidence [Chadbourn rev], § 1873, pp 678-679). As we said in Ankersmit (114 NY, at p 55): “It is doubtless true that the evidence was competent and could have been introduced by the plaintiffs as a part of their affirmative case for the purpose of showing an intent to cheat and defraud, and that their neglect to introduce it at that time deprives them of the right to make use of it as affirmative evidence. But a party has the right to impeach or discredit the testimony of an opponent, and such evidence is always competent. He may contradict the testimony of a witness as to any matters upon which he has been called to give evidence in chief, provided it is not collateral to the issue”.

In any event, even if the evidence were not technically of a rebuttal nature, we believe that the trial court, in allowing its introduction, properly exercised the discretion afforded by CPL 260.30 (subd 7). This statute provides that the court may permit either party, in the interest of justice, to offer evidence which was more properly a part of the direct case. Defense counsel and the prosecutor engaged in extensive discussion with the Trial Judge concerning the admissibility of the patient’s testimony on the People’s direct case. Although the prosecution had some evidence in its possession indicating that the person making the telephone call overheard by the patient was Mrs. Harris, it nevertheless believed that it could not lay a proper foundation for the receipt of this testimony in evidence, particularly given the fact that the patient had never heard Mrs. Harris’s voice before and thus could not identify it (cf. People v Lynes, 49 NY2d 286). Once Mrs. Harris testified that she had indeed made this call, however, the previous authentication problem was obviated. Considering the difficulties faced by the offer of such proof on the People’s direct case and the subsequent testimony of Mrs. Harris which provided the appropriate foundation for the People’s proof, we believe that the trial court could properly exercise its discretion to allow the People to introduce such evidence as rebuttal.

Ill

On the eve of pretrial hearings, defendant requested, by oral motion, that the press be excluded from attendance at preliminary hearings. There is no doubt that substantial publicity surrounded the developments in this case concerning Dr. Tarnower’s death and defendant’s impending prosecution. Nevertheless, The trial court refused to close the pretrial proceedings, finding that the statements which were the subject matter of the suppression hearing had been known to the public for months and that defense counsel himself had been listed as the source of some of the commentary on the case. The court, considering both the defendant’s right to a fair trial and the right of the press and the public to attend criminal proceedings, concluded that it had not been shown that closure of the suppression hearings was necessary to ensure that an impartial jury would be impaneled.

Matter of Gannett Co. v De Pasquale (43 NY2d 370, affd 443 US 368) is the first in a recent line of cases dealing with the right of access by the press and public to criminal proceedings. In Gannett, this court held that where press commentary on pretrial suppression hearings would threaten the impaneling of an impartial jury, by making available to the public the details of evidence sought to be suppressed as tainted by illegality, such hearings are presumptively to be closed to the public (43 NY2d, at p 380). Although the United States Supreme Court’s affirmance in Gannett was based upon its view that the Sixth Amendment guarantee of a public trial is personal to the accused and does not afford the press and public a separate right of access to pretrial proceedings (443 US, at pp 387-391), this court subsequently indicated that the concept of a public trial is not so narrowly viewed in this State (Matter of Westchester Rockland Newspapers v Leggett, 48 NY2d 430, 437). In addition to discussing the factors which must be considered in determining whether the public right to attend pretrial proceedings outweighs the defendant’s right to a fair trial free of the potentially prejudicial impact of publicity concerning evidence subject to possible suppression, these cases laid down the procedural framework within which the possibility of closure of pretrial proceedings must be assessed.

It must be emphasized, however, that in these cases, we dealt with demands by the press to gain access to pretrial proceedings. The issue of whether such access could be denied was decided in the context of a closure order granted on the request of defendant, without opposition by the prosecution. In contrast, the present case involves the denial of a motion to close the pretrial proceedings, which had been opposed by the prosecutor as well as the press. Thus, the posture of this case differs in an important respect from that in Gannett and Westchester Rockland Newspapers, for here it is not the press asserting that a pretrial hearing should not have been closed; rather, it is the defendant who argues that the failure to close the pretrial hearing resulted in the denial of a fair trial.

Where this latter claim is asserted, it is not sufficient to demonstrate that a closure order may have been warranted and would have withstood an attack by the press. The grant of a closure order is premised upon the belief that defendant might be denied a fair trial by the impact on potential veniremen of widespread publicity concerning evidence whose legality and admissibility at trial have been challenged. In such a case, the right of the press and public to attend the proceeding is deemed outweighed by the defendant’s right to a fair trial. However, where the court has refused to close the pretrial hearings, even though closure may have been proper, and the substance of challenged evidence is publicized to defendant’s claimed prejudice, the focus of the inquiry changes. Under these circumstances, we are concerned, not with balancing the conflicting rights of the press and the defendant, but with the question of whether defendant has in fact been denied a fair trial. Accordingly, to make out such a fair trial claim, it is incumbent upon the defendant to demonstrate more than the potential for prejudice that is sufficient to justify closure; rather, it must appear that prejudice to the defendant actually resulted from the failure to close the proceeding.

In the present case, it is clear that no such prejudice has been demonstrated. As the hearing Judge noted, the details of the statements which were the subject of the suppression hearing were already known to the public. Closure of the hearing would have accomplished little in terms of attempting to shield potential veniremen from press commentary on this evidence. Moreover, it is certainly relevant at this juncture to note that the statements were not suppressed as a result of the hearing. The difficult problem that occurs when suppressed evidence is nevertheless made available to the public through the press was thus not presented in this case, because the challenged statements were deemed admissible at trial. Inasmuch as the record in this case contains no indication that defendant was in fact prejudiced by denial of her closure motion, there is no basis upon which to conclude that defendant was denied a fair trial with regard to this issue.

IV

Defendant argues that she was denied a fair trial before an impartial jury when the trial court refused to allow defense counsel to exercise a peremptory challenge to a sworn juror, or, in the alternative, to excuse that juror for cause, on the basis of information acquired after the juror was sworn. Upon the initial examination, this juror revealed that her daughter had been arrested about a year earlier in Westchester County, but that she did not know the eventual disposition of the case. The juror thought that the Grand Jury had not returned an indictment against her daughter because there was insufficient evidence. The juror was accepted by both sides and sworn. Several days later, an Assistant District Attorney who was involved in the prosecution discovered that he had handled the case referred to by the juror and that he had been instrumental in having the indictment against the juror’s daughter dismissed in the interest of justice. When the assistant prosecutor disclosed this information to the trial court, defense counsel asked that the juror be excused for cause, or that he be allowed to exercise a peremptory challenge. The trial court denied both requests.

The exercise of peremptory challenges is governed by CPL 270.15. Pursuant to this statute, after each side has been given an opportunity to challenge a juror for cause, the court must permit peremptory challenges, with the People being required to exercise such challenges before the defendant. Subdivision 4 of this statute specifically states the circumstances under which a juror, once sworn, may be challenged for cause. Where a challenge for cause is made upon a ground not known to the challenging party before the juror was sworn, the court may allow the challenge prior to the time that the first witness is sworn at the trial. This express provision for the exercise of a challenge for cause after a juror is sworn must be taken as a legislative direction that any other type of challenge to a sworn juror is impermissible (see People v Hughes, 137 NY 29; People v Carpenter, 102 NY 238; People v Chmarzewski, 51 AD2d 554; People v Mancuso, 26 AD2d 292, mod 22 NY2d 679). This interpretation of the statute is entirely consistent with the perceived need to place appropriate limitations on one of the most time-consuming aspects of criminal jury trials (Bellacosa, Supplementary Practice Commentary, McKinney’s Cons Laws of NY, Book 11 A, CPL 270.15,1972-1981 Supplementary Pamphlet, p 413), while still allowing challenges to sworn jurors where good cause to excuse the juror is demonstrated.

It was nevertheless within the trial court’s power, as noted, to entertain the request that the sworn juror be excused for cause. The defense relied upon CPL 270.20 (subd 1, par [c]) as the ground for its challenge. This objection to a juror is based upon, inter alia, the existence of such a relationship between the juror and counsel for the People as is likely to preclude the juror from rendering an impartial verdict. Here, defense counsel knew that the juror’s daughter had been arrested in Westchester County and that although she did not know the precise disposition of the case, she knew that the result was favorable to her daughter. With this knowledge, defense counsel accepted the juror. The information acquired after the juror was sworn, which is all that may be considered in determining defendant’s challenge for cause (see CPL 270.15, subd 4), was that an Assistant District Attorney involved in the present case had handled the case against the juror’s daughter and had himself sought dismissal of the indictment therein. There is no indication in the record that the juror knew this Assistant District Attorney or that he knew the juror. In addition, it does not appear that the juror knew that anyone associated with the District Attorney’s office, least of all this particular trial assistant, had been responsible for the dismissal of the indictment. Nor did defense counsel seek an opportunity to further explore these possibilities.

On this record, it was not error to deny the challenge for cause. Defendant has not demonstrated the existence of such a relationship between the juror and the Assistant District Attorney as rendered the juror unsuitable for service (see, e.g., People v Provenzano, 50 NY2d 420).

We have examined defendant’s remaining allegations of error concerning prosecutorial misconduct, error in the court’s charge and refusal of a discovery request. Those of defendant’s objections which are preserved for our review are lacking in merit. Accordingly, defendant’s conviction should be affirmed.

Fuchsberg, J.

(concurring). I am not prepared to agree that the trial of Jean Harris was error-free. But, as we and other courts have had occasion to realistically remark in the past, “in this imperfect world, the right of a defendant to a fair appeal, or for that matter a fair trial, does not necessarily guarantee him a perfect trial or a perfect appeal” (People v Rivera, 39 NY2d 519, 523). In deciding whether the trial in the present case was fair, one of the rulings the majority finds acceptable gives me more than pause.

The troublesome point is the admission into evidence of the statement overheard by the police officer, even if inadvertently, during the defendant’s telephone consultation with the lawyer with whom she originally spoke while she was in custody on the night of the shooting. The crucial words at issue, “Oh, my God, I think I’ve killed Hy”, were uttered after the opportunity for such communication had been arranged by the police when Mrs. Harris, in response to their query, indicated that she wished to speak to her attorney. Since, in making the arrangements, the police were charged with the obligation to take reasonable precautions to ensure privacy, I cannot agree with the majority that the attorney-client privilege had not attached or that the statement the police overheard was one properly characterized as spontaneous.

Consider the charged atmosphere which prevailed at the time. It takes no imagination to sense Mrs. Harris’s emotionally distraught state. After giving the police her version of how she had come to shoot Dr. Tarnower, she had fainted upon the sight of his body being removed to the hospital. The effort to reach the lawyer sequentially followed immediately upon this episode. One officer used the telephone in the housekeeper’s bedroom to do so, whereupon a second officer, having been instructed to assist Mrs. Harris into the room, noticed that she walked so unsteadily that, as he later was to testify, she “looked * * * like she couldn’t make it under her own power”. At the conclusion of the conversation, he found it necessary to lift her out of her chair and help her out of the room. At the suppression hearing, he candidly advised the court that, though aware that she was talking to a lawyer, he remained so closely within earshot of the conversation during its entire 3 to 5 minute duration that, at its termination, he was able to get to her side quickly enough to take the receiver from her.

It is our well-settled law that, for a statement to be dubbed “spontaneous” within the meaning of that narrow exception to the rules protective of the right to counsel, it must be one “ ‘made without apparent external cause, i.e., self-generating’” (People v Lanahan, 55 NY2d 711, 713; People v Stoesser, 53 NY2d 648, 650). Spelled out more sensitively, it may not have been “the result of inducement, provocation, encouragement or acquiescence” by the police (People v Rivers, 56 NY2d 476, 479; People v Lana han, supra; People v Stoesser, supra; People v Maerling, 46 NY2d 289, 302-303).

Applied aptly in a privilege case at nisi prius, the court there put it as follows: “When [a] defendant seeks to communicate with a person and that communication would ordinarily be deemed privileged, those who hold him in custody should either (1) afford him the right to make the communication in conditions of privacy or (2) warn him that if his utterances are overheard, they may be testified to by the person overhearing them, or (3) bar all hearers from testifying to confidential communications overheard by them when conditions of privacy are not accorded and appropriate additional warnings are not given” (People v Brown, 82 Misc 2d 115, 120-121 [Greenfield, J.]).

Measured either way, it seems impossible to escape the conclusion that Mrs. Harris’s admission was, at least in part, the product of “acquiescence” in, if not exploitation of, her obvious vulnerability. A lay person, presumably without sophistication in the subtleties surrounding constitutional safeguards of the right to counsel, she already had unburdened herself to the police, and hence was unlikely to be chary of doing so again (see People v Tanner, 30 NY2d 102, 106). On the other hand, the police, trained in such matters and cognizant of Mrs. Harris’s state of mind as well as her previous willingness to talk with them, should have been well aware of the likelihood that she would make further admissions to her lawyer. In any event, they were obliged to “scrupulously honor” her right to counsel by ensuring that she could talk to her lawyer in confidence (see People v Grant, 45 NY2d 366, 375-376). Yet, not even the simple expedient of telling Mrs. Harris not to begin her conversation until he and the house manager’s husband had left the room was essayed. I therefore cannot see how we can fail to agree with the Appellate Division that the admission of the “Oh, my God” statement violated the defendant’s right to counsel (see People v Grimaldi, 52 NY2d 611, 617).

This said, it also cannot be gainsaid that the admissibility of Mrs. Harris’s earlier statements to the police that she had “shot” Dr. Tarnower was not disputed. Nor can it be blinked that, on whatever weight they carried on the issue of intent, there was no meaningful difference between the earlier ones and the one now challenged. In the first statements, she acknowledged her act; in her last admission, she simply added her awareness of the victim’s condition at that time. The difference, substitution of the word “killed” for “shot”, viewed objectively, essentially reflected little more than the undisputed deterioration in Dr. Tarnower’s condition between the time when she believed he had only been wounded and the time when it appeared that the wounds might be fatal.

Furthermore, the flawed statement did not bear on the vital inculpatory or exculpatory nature of the circumstances in which the shooting took place, the matter on which the outcome of this long trial, which heard 92 witnesses over a 14-week period, finally would have to turn. Indeed, neither “shot” nor “killed”, in and by itself, describes a criminal act per se.

Nevertheless, defendant argues that the last statement, since it alone included the word “killed”, should be considered more prejudicial than the others. This, however, is far from persuasive. For defendant’s use of term “killed” was neutralized by her prefatory language, “Oh, my God, I think”, which surely could be seen as evoking connotations of dismay and surprise rather than criminal intent.

But, counters’the defense, the prosecutor’s stress on the word “killed” rather than “shot” added to the alleged prejudice when, in the course of his summation, he discussed the statements. To this the answer is simple. That the prosecutor chose to focus his perfectly proper adversarial rhetoric on the statement overheard by the police officer rather than on the ones Mrs. Harris had volunteered previously, was, in context, of limited moment. As any good trial lawyer, or any good public speaker, will understand, had the flawed statement featuring the word “killed” not been available, he could have resorted to the earlier ones which had employed the word “shot” to make the same arguments, with the same fervor and, no doubt, to like effect.

Regretfully, therefore — because the vitality of the Bill of Rights depends, above all, on the right to counsel — I am compelled, on the record of this case taken as a whole, to conclude that the error does not justify reversal. For, against the background of the prior untainted statements Mrs. Harris-already had made on her own, the erroneous admission of the one she made to the lawyer was harmless beyond a reasonable doubt (People v Schaeffer, 56 NY2d 448, 454). Moreover, to the extent that the violation of defendant’s right to counsel also trespassed upon her attorney-client privilege, the same conclusion is warranted (see People v Thomas, 50 NY2d 467, 475-477 [my concurrence]; cf. People v Glenn, 52 NY2d 880).

In Schaeffer, addressing the standard for harmlessness in cases where the defendant, as did Mrs. Harris, had made admissible as well as inadmissible statements, we held that, in accordance with elementary logic, “reviewing courts should take into account the degree to which tainted statements are duplicative of untainted ones and, to the extent they are not, the nature and the extent of the differences * * * [T]he more they differ the greater the possibility that the additional matter supplied by the tainted one was a sine qua non of the production of the verdict” (56 NY2d, at p 455; see, also, People v Sanders, 56 NY2d 51, 66-67). Here, on analysis, as I have indicated, the difference was one in form, not in fact.

I, too, therefore, must cast my vote to affirm.

Chief Judge Cooke and Judges Jasen, Jones, Wachtler and Meyer concur with Judge Gabrielli; Judge Fuchs-berg concurs in a separate opinion.

Order affirmed.

      . Thus, this case does not present a situation in which it is claimed that defendant, through actions occurring subsequent to the confidential communication, has waived the attorney-client privilege (People v Lynch, 23 NY2d 262, 271). Rather, in this case, defendant’s choice to speak to an attorney in the presence of third parties effectively prevented the privilege from attaching.

      . We recognize that the questions of whether defendant’s right to counsel or attorney-client privilege have been violated may involve very similar factual inquiries, because the actions and purpose of the police are relevant to both questions.

      . Under some circumstances, the trial court has discretion to allow subsequent evidence which is not strictly rebuttal evidence. This point is discussed infra.

      . The Supreme Court found it unnecessary to determine whether such a right of access to pretrial proceedings is guaranteed the press and public by virtue of the First Amendment. The court held that, assuming such a right to exist, it was given appropriate deference by the trial court in that case (Gannett Co. v De Pasquale, supra, at pp 392-393), inasmuch as the closure decision was based “ ‘on an assessment of the competing societal interests involved’ ” (id., at p 393). In other words, any right of access on the part of the press was outweighed by the defendants’ right to a fair trial.
      The Supreme Court has since determined that the right of the public to attend criminal trials is implicit in the guarantees of the First Amendment (Richmond Newspapers v Virginia, 448 US 555; see, also, Globe Newspaper Co. v Superior Ct. for County of Norfolk, 457 US_, 102 S Ct 2613), but it has not yet reached the question of whether that right extends also to pretrial proceedings (see Richmond Newspapers v Virginia, supra, at p 599 [Stewart, J., concurring]).

      . To the extent that People v West (38 AD2d 548, affd no opn 32 NY2d 944) might suggest a contrary result, it is overruled. Although the trial court in West appears to have allowed a peremptory challenge to a sworn juror, we note that it was argued on appeal that the juror should have been excused for cause. Our affirmance without opinion should not be interpreted as an adoption of the lower courts’ reasoning (see Rogers v Decker, 131 NY 490, 493; Matter of Sentry Ins. Co. [Amsel], 36 NY2d 291, 295).

      . For the reasons I discuss later, on the relevant facts, whether the overhearing was inadvertent is besides the point. In any event, close inspection of the record indicates that, though the officer, on direct, at first did testify, as the majority states, that he was backing out of the room at the time, he did not go so far as to say that he ever left the room during the conversation. Rather, on cross-examination, he admitted that he never made “any attempt of any kind to get out of earshot and give her privacy to speak with her attorney”.

        . The officer who sent the overhearing officer into the room unquestionably had direct knowledge of the fact that an attorney-client consultation was about to take place, since he had actually put through the telephone call. In any event, a defendant is not to be “penalized because of any inadequacy of internal communication within the law enforcement establishment” (People v McLaurin, 38 NY2d 123, 126 [Gabrielli, J.]; cf. Santobello v New York, 404 US 257, 259-260).