author: Kaye, J. Meyer, J.

text:
    In the Matter of Jonathan T. Gardiner, Deceased. Bank of New York et al., Respondents; Olney M. Gardiner et al., Respondents-Appellants; John P. Campbell, as Guardian ad Litem, Appellant-Respondent.
    Argued September 11, 1986;
    submitted upon reargument November 13,1986;
    decided December 19, 1986

      POINTS OF COUNSEL

      Howard M. Finkelstein and Frank A. Isler for Frances G. Collins, respondent-appellant.

      John P. Campbell, as guardian ad litem, pro se, and Miner D. Crary, Jr., Morgan A. Casey, Jr., Frances B. Carlisle and Antoinette N. Ceisler for John P. Campbell, appellant-respondent.

      Andrew J. Connick, Carolyn C. Clark and Teresa A. Blasberg
      for Olney M. Gardiner, respondent-appellant.

      John E. Bennett, Stephen P. Cerow and Christine A. Burke for Bank of New York, respondent.
   OPINION OF THE COURT

Kaye, J.

This appeal calls upon us to determine whether the statutory "precautionary addendum” contained in former section 114 of the Domestic Relations Law defeats the inheritance of an adopted child. We hold that it does not.

Jonathan T. Gardiner died on August 6, 1933, leaving a will executed January 25, 1932 that was admitted to probate in Suffolk County on September 30, 1933. Jonathan never married and had no children. The will included two testamentary trusts, one for each of his grandnieces, Isabel Gardiner (Mairs) and Frances Delaney Gardiner (Collins). Each grandniece was given the unrestricted right at death to appoint the corpus of the trust to whomever she might select. A third trust was set up in article fourth of Jonathan’s will, directing that the remainder of his estate was to be held in trust for Winthrop Gardiner, Jr. — Jonathan’s grandnephew — with the income payable to him when he reached 21 years of age. Upon Winthrop’s death, article fourth provided that the trust was to cease, with the principal going to Winthrop’s "oldest living son” or, if he left no son, then to his appointee from the class of "male relative[s] of mine bearing the name Gardiner.”

The pertinent language is as follows: "in the event that he [Winthrop Gardiner, Jr.] shall leave no son him surviving, I give, devise and bequeath the same to such male relative of mine bearing the name Gardiner as my said grandnephew, Winthrop Gardiner, Jr., shall appoint in and by his Last Will and Testament, and, in the event that my said grandnephew, Winthrop Gardiner, Jr., shall die without leaving a son him surviving, and shall fail to exercise such power of appointment, then, and in that case, I direct that my Executor and Trustee sell, as soon after the death of my said grandnephew, Winthrop Gardiner, Jr., as practicable, all of my real property as is included in my said residuary estate, or such portion or portions thereof as shall not theretofore have been sold, in such manner and for such prices as in the judgment of my said Executor and Trustee shall be to the best interests of my estate, provided, however, that such sale be made to, and only to, some male relative of mine bearing the surname 'Gardiner’, the proceeds of the sale of which, together with the remainder of my said residuary estate, I hereby give and bequeath to my aforesaid grandnieces, Isabel Gardiner and Frances Delaney Gardiner, share and share alike, or to their survivor, and in the event that neither of my said grandnieces should survive my said grandnephew, then I give and bequeath aforesaid proceeds, together with said remainder of my said residuary estate, to such persons who would at that time inherit the same under the Laws of the State of New York if my said grandnephew had died intestate the owner thereof.” The executor and trustee were, in article sixth of the will, given authority to sell any real estate owned by Jonathan "at such prices, at such times, and on such terms and conditions as my said Executor and Trustee may deem expedient and desirable, and to the best interests of my estate.”

Winthrop died October 16, 1980, leaving a will that had been executed on February 12, 1975 and was admitted to probate in Florida on January 13, 1981. Winthrop was survived by his adopted son, Olney Mairs Gardiner.

Olney actually had been born to Winthrop’s sister Isabel, and thus was Winthrop’s nephew and godson. He was born June 26, 1942, baptized "Olney Blanchard Gardiner Mairs” on September 25, 1949, and adopted on August 14, 1974 by Winthrop and his wife Beth, pursuant to an order of Family Court, Suffolk County, that also changed his name. From the date of the adoption Olney has been known as Olney Mairs Gardiner. Six months after the adoption, Winthrop executed his will, in which he declared that Olney was both his "oldest living son” and his appointee in accordance with the power of appointment contained in Jonathan’s will. The relevant paragraph reads: "Under the terms of Paragraph Fourth appearing on Page 2 of the Last Will and Testament of my Granduncle, Jonathan t. gardiner, which will was executed on January 25, 1932 * * * a trust was created for my benefit and the principal of which upon my death was to pass to my oldest living son. I hereby state that my only son is olney mairs gardiner, of 4935 MaConnel Avenue, Los Angeles, California 90066. To the extent that may be necessary for me to exercise the power of appointment in said Paragraph Fourth of said Will, then I do exercise the same and appoint the principal remaining to my said son.”

The Bank of New York, as trustee, instituted this proceeding in Surrogate’s Court, Suffolk County, seeking a construction of article fourth of Jonathan’s will and a settlement of its account. The Bank and Olney sought summary judgment awarding Olney the residuary estate. Frances Gardiner Collins and the guardian ad litem, representing the class of males with the surname Gardiner, cross-moved for summary judgment and alternatively for discovery on the motives behind Winthrop’s adoption of Olney. They asserted the following grounds for summary judgment: first, that Olney was precluded from inheritance as Winthrop’s adopted son by virtue of the precautionary addendum; second, that Olney was also precluded from inheritance as an appointee through his mother by virtue of his adoption by Winthrop; and third, that the adoption was a fraudulent scheme. Frances further challenged the constitutionality of the remainder clause insofar as it limited the power to sell the property to males.

The Surrogate granted summary judgment in favor of the trustee and Olney, finding the precautionary addendum inapplicable because the interest of the remaindermen could be defeated not only by adoption but also by appointment. The Appellate Division upheld the grant of summary judgment on a different rationale, concluding that the precautionary addendum applied so that Olney could not take as Winthrop’s son, but he could take as Winthrop’s appointee. The Appellate Division granted the guardian ad litem, Frances and Olney leave to appeal to this court on the certified question, "Was the order of this court dated December 30, 1985, properly made?”

We conclude that the precautionary addendum did not preclude Olney’s inheritance as the "oldest living son” of Winthrop.

The issue may be simply posed. On the date of Jonathan Gardiner’s death, the Domestic Relations Law provided that an adopted child and foster parent had the legal relation of parent and child, and all the rights and duties of the relationship, including inheritance but, "as respects the passing and limitation over of real or personal property dependent under the provisions of any instrument on the foster parent dying without heirs, the person adopted is not deemed the child of the foster parent so as to defeat the rights of remaindermen.” (Domestic. Relations Law former § 114, L 1931, ch 562.) If Olney’s taking by adoption alone defeats the rights of remaindermen, the precautionary addendum prohibits this inheritance; if it does not, he may inherit as Winthrop’s son. For the reasons that follow, we conclude that he may inherit as Winthrop’s son.

For nearly a century, an unbroken fundamental concept and policy of this State has been that adopted children stand equal with biological children within their adoptive families, with all incidental property rights (L 1887, ch 703; Matter of Snowden, 31 NY2d 322, 327; Matter of Upjohn, 304 NY 366, 373; see also, Matter of Best, 66 NY2d 151). Adopted children are in the line of descent "through the command of the statute, the same as if that line had been established by nature” (Matter of Cook, 187 NY 253, 261), and wills are to be construed in harmony with this policy (Matter of Upjohn, 304 NY 366, 374, supra). The precautionary addendum, specifying that an adopted person is not deemed the child of the foster parent, in principle offends this long-standing policy. While the Legislature promulgated both the statutory language favoring adopted children as full members of their adoptive families and the precautionary addendum, the motive for the latter is plain: the Legislature feared that where the passing of property was dependent on a parent dying without heirs or children, it would have been a simple matter to perpetrate a fraud on the rights of the remaindermen through the device of adoption (see, Matter of Upjohn, 304 NY 366, 378, supra). In 1963, the Legislature abandoned even this narrow exception to the strong policy favoring the full equality of adopted children (see, Matter of Snowden, 31 NY2d 322, 327, supra). Where applicability of the precautionary addendum must still be considered, however — specifically with respect to wills of persons dying before March 1, 1964 — courts have applied it narrowly, limiting its operation to facts falling strictly and necessarily within its terms. More particularly, the precautionary addendum has been applied only where the act of adoption cuts off a remainder interest that would have followed but for the adoption.

In Matter of Park (15 NY2d 413), for example, we concluded that the precautionary addendum did not prevent an adopted child, from sharing a trust remainder equally with a biological child because, even if there had been no adoption, the biological child still would have cut off the remainder; the precautionary addendum, we held there, should be limited to cases where "the act of adoption itself and alone cut off a remainder.” (Id., at p 418.) Similarly, the precautionary addendum has not precluded an adopted child’s inheritance in cases where the adoption simply has brought a child within an existing class (see, Matter of Silberman, 23 NY2d 98; Matter of Johnson, 17 NY2d 448). Further, where the remainder interest has been dependent not on the death of the donee without heirs but on the whim of the donee in exercising a power of appointment among a class not limited to his heirs, the precautionary addendum has been held not to preclude inheritance by an adopted child (see, Matter of Snowden, 31 NY2d 322, supra; Matter of Charles, 200 Misc 452, affd 279 App Div 741, affd 304 NY 776).

Here, the interest of the remaindermen was subject not only to the contingency of Winthrop’s death without a son, but also to the contingency of Winthrop’s failure to exercise his power of appointment on behalf of male relatives bearing the name Gardiner; the passing of Jonathan’s property outside the remaindermen was not solely dependent upon “the foster parent dying without heirs” (Domestic Relations Law former § 114). Thus, even without an adoption, under Jonathan’s will the interest of the remainderman could have been defeated by appointment to anyone within a class of persons that included Olney. It is clear that Winthrop’s adoption of Olney did not itself and alone operate to defeat the interest of the remaindermen, and the precautionary addendum cannot preclude Olney’s inheritance as Winthrop’s son.

We reject two further arguments tendered by appellants: that Jonathan’s will expressly excluded adopted children, and that he evinced the intent to restrict the passing of his property to his male bloodline. The will makes no particular reference to adopted children, and thus could hardly be said to have excluded them expressly. Moreover, at the time of Jonathan’s death the law provided that the rights of an adopted child included inheritance, and Jonathan’s will contemplated that his property could pass by intestacy.

Nor do we find within the four corners of the will (Matter of Fabbri, 2 NY2d 236, 239-240) an intent that the property should pass only to male relatives in Jonathan’s bloodline. The real property left to Winthrop in the will could have been sold by the executor or trustee, in its discretion, any time before Winthrop’s death. (Indeed, it appears that Gardiner’s Island was sold by the trustee to a female relative in 1937, shortly after Jonathan’s death.) If Winthrop was not survived by a son, if he failed to exercise the power, and if the grandnieces did not survive Winthrop, the will expressly contemplated that the property would pass by intestacy, article fourth, further, distinguishes between male relatives "bearing the name Gardiner” (who Winthrop could appoint, pursuant to his power) and male relatives "bearing the surname Gardiner” (to whom sales of the real property could be made) (emphasis added). Applying the ordinary meaning of the words used by the testator, it is plain that any male relative — whether descending through the male or female line —who carried forward the name Gardiner was within the class subject to appointment by Winthrop.

The dissent concludes that it was not within the intention of Jonathan Gardiner that a male relative not a Gardiner by birth could by mere change of name qualify himself to take the remainder to the exclusion of the remainderman (dissenting opn, at pp 84-85). But more was involved here than a mere change of name: by law Olney had become Winthrop’s son, and his issue Jonathan’s descendants. The intent expressed by the testator was to keep the property within the family (not excluding adopted children), to leave the remainder to a male relative and above all to perpetuate the family name Gardiner. Olney Mairs Gardiner, meeting these criteria, is thus entitled to the remainder of the trust as the son of Winthrop Gardiner, Jr.

Because we conclude that the precautionary addendum was not a bar to Olney’s inheritance as Winthrop’s son, we have no need to consider the alternative analysis of the Appellate Division — that Olney inherited as Winthrop’s appointee pursuant to the power of appointment — by which the same result was reached.

Finally, Frances Gardiner Collins and the guardian ad litem have raised no issue of fact with respect to the claim that further discovery is warranted. The matter said to warrant further discovery is that the adoption and exercise of the power were an exchange for a promise that Olney would care for Winthrop’s wife Beth. Even if relevant, this assertion presents no triable issue in that Beth died even before Winthrop executed his will. Moreover, in view of our disposition, we do not reach Frances’ challenge to the constitutionality of the gender limitation on sales of the property.

Accordingly, the order of the Appellate Division should be affirmed, with costs to all parties appearing separately and filing separate briefs payable out of the estate. The certified question is answered in the affirmative. The appeal by Olney Mairs Gardiner is dismissed, without costs, on the ground that he is not a party aggrieved by the order appealed from (CPLR 5511).

Meyer, J.

(dissenting). The majority construes the precautionary addendum in a manner inconsistent with its legislative history, its wording and the prior decisions of this court and so strictly as to read it out of Domestic Relations Law § 117 notwithstanding that as to the wills of persons who died prior to March 1, 1964 the Legislature has expressly directed otherwise. It does so by way of affirming the grant of summary judgment, notwithstanding an application by one of the remaindermen for discovery concerning the motivation behind the adoption and change of name of a 32-year-old lawyer by a life tenant who had no natural child, with the result that the adoptee takes the sizeable remainder to the exclusion of the named remaindermen, his mother and aunt. In doing so it countenances a fraud both on the remaindermen and on the power of appointment. Because I cannot accept either the majority’s rulings on the law or its failure to defer its ruling until discovery has taken place, I respectfully dissent.

I

The Domestic Relations Law section concerning the effect of adoption as it existed when Jonathan T. Gardiner died on August 6, 1933 provided that: "The foster parent or parents and the person adopted sustain toward each other the legal relation of parent and child, and have all the rights and are subject to all the duties of that relation, including the right of inheritance from each other * * * but as respects the passing and limitation over of real or personal property dependent under the provisions of any instrument on the foster parent dying without heirs, the person adopted is not deemed the child of the foster parent so as to defeat the rights of remaindermenThe italicized language (known as the "precautionary addendum”) was removed from the section by Laws of 1963 (ch 406), effective March 1, 1964, but section 2 of that chapter specifically provided that "the provisions of this section in force prior to the time this act takes effect shall apply to the wills of persons dying prior to the time this section takes effect * * * with the same force and effect as if they were not hereby amended.” The latter provision was carried forward as Domestic Relations Law § 117 (3), which, so far as here pertinent, reads: "The provisions of law affected by the provisions of this section in force prior to March first, nineteen hundred sixty-four shall apply to the estates or wills of persons dying prior thereto”.

Jonathan Gardiner’s will, executed January 25, 1932, set up separate trusts for his grandnieces, Isabel Gardiner Mairs and Frances Gardiner Collins, and for his grandnephew, Winthrop Gardiner. The trust for Winthrop gave him the income for life and disposed of the remainder upon his death in language quoted in the majority opinion and which need not be repeated here. Winthrop died October 16, 1980, survived by Isabel and Frances and by a nephew, born June 26, 1942 to Isabel and named on his birth certificate Olney Blanchard Mairs III. Olney was adopted by Winthrop and his wife Beth on August 14, 1974, when Olney was 32 years old and more than 40 years after Jonathan’s death, pursuant to an order of the Suffolk County Family Court which changed his name to Olney Mairs Gardiner. Winthrop was survived as well by Darcy, Beth’s daughter, but by no son other than Olney. Beth’s death certificate, which Olney asks that we judicially notice, shows that she died on January 27, 1975 of acute chronic ethanolism. Sixteen days later, on February 12, 1975, Winthrop executed his will, which in item iv referred to the trust created for him by Jonathan’s will "the principal of which upon my death was to pass to my oldest living son” and continued: "I hereby state that my only son is olney mairs gardiner, of 4935 MaConnel Avenue, Los Angeles, California 90066. To the extent that may be necessary for me to exercise the power of appointment in said Paragraph Fourth of said Will, then I do exercise the same and appoint the principal remaining to my said son.”

The issues which divide the court are whether the addendum proscribes Olney taking to the exclusion of the named remaindermen and whether it was within the intention of Jonathan Gardiner that a male relative not a Gardiner by birth could by the mere change of his name qualify himself to take the remainder to the exclusion of the remaindermen. The majority answers that the addendum must be strictly construed and that a male relative named Gardiner does not mean a male relation born with the name Gardiner. Those answers are, for the reasons hereafter set forth, inconsistent, as to the first, with prior decisions of this court, as to the second, with the common law as well as prior New York decisions.

II

Essentially the position of the majority is that the precautionary addendum is to be applied only if absolutely necessary because it is in derogation of public policy and that, in any event, Olney was a male relative bearing the name Gardiner to whom an appointment could be made. It is, however, somewhat difficult to understand how the legislatively declared policy to keep the addendum in force as to wills of persons dying prior to March 1, 1964 "with the same force and effect as if they [the prior provisions of the section] were not hereby amended” can be deemed in derogation of public policy, the Legislature being the primary progenitor of public policy. Nor can the effect of item: iv of Winthrop’s will be divorced from the addendum by reason of the power of appointment for, as the wording of the will makes clear, Winthrop himself regarded the remainder as passing to the adoptee, Olney, as "my only son,” and exercised the power only "[t]o the extent that may be necessary for me to” do so. But whether considered as a matter of the precautionary addendum or of power of appointment law (as to which see III below) the attempt to divert the remainder from Isabel and Frances, remaindermen named by the testator, should not be permitted to succeed.

The majority emphasizes the quotation in Matter of Snow-den (31 NY2d 322, 327) from Matter of Charles (200 Misc 452, 461, affd 279 App Div 741, affd 304 NY 776) that the addendum " 'must be strictly construed in order that the major policy underlying [the] legislation itself is not defeated’ ”, but fails to consider the statements in the same case that, "what is important and operative is the 'intent of the settlor’ ” (31 NY2d, at p 329, quoting from Matter of Rockefeller [Hubbard], 12 NY2d 124, 134). It makes the addendum depend upon whether Olney takes by "adoption alone” (majority opn, at p 73), ignoring the fact that the addendum contains no such limiting language, and that the context in which those words appear in Matter of Park (15 NY2d 413, 418) is readily distinguishable from the instant case. It ignores as well the legislative history of the 1963 amendment which included, in Appendix F to the Second Report of the Temporary State Commission on Modification, Revision and Simplification of the Law of Estates (1963 NY Legis Doc No. 19, at 173) the statement that: "Where, however, the contest is not between natural and adopted children but between adopted children and specified remaindermen the exception in the statute would appear to apply, subject to the holding of Upjohn and those cases which follow it, that the statute yields to the intent of the testator.” Here, as Justice O’Connor pointed out (113 AD2d 651, 661-662), Jonathan could have had no knowledge of the adoption which took place 40 years after his death, there is nothing in the will to suggest that he intended to include adopteds and the motion papers contain no extrinsic evidence so indicating, the property passed on Winthrop’s death to his "oldest living son,” not to a class including both natural and adopted children, and the power of appointment was also limited to Jonathan’s bloodline.

The decisions of this court do not sustain refusal to apply the addendum in such circumstances. Indeed, the addendum has been applied to exclude an adopted child from taking in the most recent case in which we considered the question, Matter of Brooks (32 NY2d 752, affg 39 AD2d 942), as well as in Matter of Carll (27 NY2d 917, affg on opn at 34 AD2d 793), Matter of Ricks (18 NY2d 640) and Matter of Washburn (17 NY2d 895, affg 24 AD2d 83).

Brooks involved a will which gave the life tenant a power of appointment limited to issue and thus, like the power of appointment in Jonathan Gardiner’s will, was limited to the bloodline of the testator. Carll adopted the opinion (sic) at the Appellate Division, which held that an adopted child was not the "issue” of the income beneficiary and, therefore, was not entitled to the remainder, no extraneous facts having been shown and there being nothing in the will to suggest an intention of the testator to include adopted children so as to prevent operation of the precautionary addendum which was in existence when, in 1902, the will was drawn. The opinion distinguished Matter of Silberman (23 NY2d 98) on the ground that there, by its own wording, the addendum was inapplicable, the foster parent having been survived by a natural child who would take to the exclusion of the remainderman even if there had been no adoption.

Ricks, as explained in Matter of Silberman (23 NY2d, at p 109, supra), affirmed exclusion of adopted children because of the ambiguity created by the testatrix having stricken from her will words relating to adopted children. Washburn held the residuary legatees under the will of a life tenant, who also had a remainder interest, subject to being divested, under the will of his father, to be remaindermen within the meaning of the addendum, and concluded that the right of such legatees to take the corpus of the trust under the father’s will was not defeated by the life tenant’s adoption of a daughter after the death of his father.

Matter of Park (15 NY2d 413, 417, supra) established a presumption that “[a] testator or settlor must know that in the light of New York policy a foster child has exactly the same 'legal relation’ to the parent as a natural child.” That statement was dictum, the holding of the case being that the foster parent there involved had left surviving both a natural child and an adopted child and thus was not a "foster parent dying without heirs” within the meaning of the addendum. It was in this context, there being a natural child who would in any event cut off the remainder, that the Park decision (at p 418) construed the addendum to speak to an "act of adoption [which] itself and alone cut off a remainder.” Viewed in the light of its facts, therefore, Park does not justify the majority’s conception that the addendum is inapplicable unless the passing of the testator’s property is Msolely dependent upon 'the foster parent dying without heirs.’ ” (Majority opn, at p 74 [emphasis supplied].) Moreover, review of the cases thereafter decided establishes that the Park presumption has never been applied to defeat the claim of a remainderman to which the addendum otherwise applied. Thus, Matter of Johnson (17 NY2d 448) and Matter of Silberman (23 NY2d 98, rearg denied 23 NY2d 921, supra) both involved situations in which the contest was between natural and adopted children, not between an adopted child and remaindermen entitled to inherit if the foster parent died without heirs.

The other cases which held the addendum inapplicable and an adopted child authorized to take, Matter of Snowden (supra), Matter of Rockefeller (Hubbard) (supra), and Matter of Charles (supra), all involved powers of appointment which would have permitted the trust principal to be divided among those not testator’s descendants or within his bloodline. In Snowden each life tenant "was empowered to appoint any one he chose” (31 NY2d, at p 329); in Rockefeller the power of appointment was to the life tenant’s "issue or to such charities as she might appoint by will” (12 NY2d, at p 130); and in Matter of Charles the power included not only the life tenant’s children or the issue or any deceased child, but also "her husband” and "in any manner, share or proportion” (200 Misc, at p 454). The holding of the three cases is embodied in Snowden’s statement that (31 NY2d, at p 329): "Having permitted the child in the circumstances posited to appoint any one he selected, and having contemplated that, in default of appointment or of natural issue, persons not related to him by blood might share in the trust, the settlor must be deemed, by his lack of concern for bloodlines, to have had in mind that adopted children might likewise take.”

That ruling does not, however, support the majority’s suggestion that the power of appointment of itself is sufficient to make the addendum inapplicable. To the contrary, here the limitation of the power of appointment to a "male relative * * * bearing the name Gardiner” and of the remainder after Winthrop’s life estate to his "oldest living son,” in default of which the remainder is given to Isabel and Frances, both within the bloodline, evidence quite clearly Jonathan’s concern for bloodlines. That concern being expressed and there being neither a natural child nor an unlimited power of appointment to provide a basis for not applying the addendum, it requires, as the Appellate Division held (113 AD2d, at pp 661-662), that Olney, as an adopted child, not be "deemed the child of the foster parent so as to defeat the rights of remaindermen.”

In a number of other respects the majority misconceives the effect of the addendum. The suggestion that it does not apply because "Jonathan’s will contemplated that his property could pass by intestacy” (majority opn, p 74; see also, p 75) is simply irrelevant, for the intestacy provision was operative only if Winthrop died without heirs and Isabel and Frances both predeceased him. The issue before us is whether the remainder to Isabel and Frances can be cut off by adoption, not whether under a later remainder provision there could be a distribution in intestacy if Isabel and Frances died before Winthrop. Matter of Brooks (supra) is authority to the contrary (see also, Matter of Notman, 56 Misc 2d 877). Indeed, were that event to come to pass, a distribution in intestacy would occur even if the will did not so provide, although to Jonathan’s rather than Winthrop’s distributees.

Likewise irrelevant is the fact that the "real property left to Winthrop in the will could have been sold by the executor or trustee, in its discretion, any time before Winthrop’s death.” The most that the sale provision indicates is that Jonathan wanted real estate he owned to remain in the hands of a male Gardiner. The trust consisted of both real and personal property, however, and the addendum expressly governs "the passing and limitation over of real or personal property” (emphasis supplied). It therefore governs disposition of the trust remainder even if, as would be the case had such a sale been made, the principal of the trust consisted solely of personal property.

Finally, the only relevance of change of name being the will provisions limiting exercise of the power to a "male relative of mine bearing the name Gardiner,” the majority’s discussion (at p 75) of change of name is inconsistent with its conclusion (at p 75) that it need not consider the effect of the power of appointment.

It follows that unless the addendum is to be read out of the statute notwithstanding the Legislature’s intention as to pre1964 wills to preserve it, Jonathan’s intention as evidenced by his will mandates its application and the exclusion of Olney because to deem him the child of Winthrop would defeat the rights of the remaindermen, Isabel and Frances.

At the very least, however, the unusual circumstances of this case require denial of the motions by the trustee and Olney and the grant of Frances’ application for discovery. It is difficult to conceive a purpose other than frustration of the remainder for the adoption of Olney, a 32-year-old lawyer practicing in California, by Winthrop, who had had a cancer operation four years before, and Beth, a chronic alcoholic who died of that disease within six months after the adoption. The more particularly is this so in light of the fact that Winthrop and Beth divided their time between New York and Florida (where Winthrop’s will was executed and where it was probated). If those circumstances do not conclusively establish, they certainly strongly suggest, that Olney’s adoption contravenes the purpose of the addendum, which, as we have several times declared, was designed to prevent " 'the perpetuation of fraud on the rights of the remaindermen "through an adoption for the very purpose of cutting out a remainder” ’ ” (Matter of Snowden, supra, at p 327, quoting from Matter of Upjohn, supra, at p 378, quoting from Matter of Walter, 270 NY 201, 206); "to prevent the device of an adoption from being used to cut off a remainder which would have followed had there been no child” (Matter of Park, supra, at p 416). Thus, if Frances is not awarded judgment declaring Olney not entitled to take, on the basis of the will alone, she should be granted discovery. There is a sufficient basis in the papers before the court for doing so, for although, as the majority notes, Beth died before Winthrop executed his will, she died, as noted above, but 16 days before that will was executed, leaving a daughter Darcy, and under circumstances suggesting that her acute alcoholism may have played a part in Olney’s adoption and change of name in order to qualify him to take either as Winthrop’s son or as his appointee.

Ill

Although the Appellate Division held that the addendum prevented Olney from taking as Winthrop’s "oldest living son,” it concluded that he could, nevertheless, take by reason of Winthrop’s exercise of the power to appoint to a male relative of Jonathan’s bearing the name Gardiner, Olney being a natural male relative of Jonathan’s, Domestic Relations Law § 117 (2) having preserved his right to take "under the will of * * * natural * * * kindred”, and the adoption decree having changed his name to Gardiner. For the reasons set forth in part II above, I agree with the Appellate Division that the presence of the power did not affect the applicability under Domestic Relations Law § 117 (3) of the precautionary addendum. In holding that Domestic Relations Law § 117 (2) permitted Olney to take under the power, however, the Appellate Division failed to consider that, as a matter of the law of powers of appointment and wholly apart from the adoption or the addendum, Jonathan’s clearly declared purpose in limiting the appointment to "a male relative [named] Gardiner” would be frustrated if any male relative could qualify for appointment by simply changing his name. Such a frustration of the testator’s purpose has long been deemed by the law a "fraud on the power.”

In Matter of Carroll (274 NY 288, 298-299, reh denied 275 NY 536), this court held with respect to fraud on a power of appointment:

"Upon the general question the law of England is correctly stated in Halsbury’s Laws of England (Vol. 23 [1st ed.], pp. 58-62):

" 'A person having a limited power must exercise it bona fide for the end designed; otherwise the execution is a fraud on the power and void. Fraud in this connection does not necessarily imply any moral turpitude, but is used to cover all cases where the purpose of the appointor is to effect some bye or sinister object, whether such purpose be selfish or, in the appointer’s belief, a more beneficial mode of disposition of the property and more consonant with that which he believes would be the real wish of the creator of the power under the circumstances existing at the date of the appointment.

" 'In all cases of fraudulent execution, the fraud consists in the exercise of the power for purposes foreign to those for which it was created and the exercise of the power may be held fraudulent on any of the three following grounds:

" '(1) If the execution was made for a corrupt purpose.
" '(2) If it was made in pursuance of an antecedent agreement by the appointee to benefit persons not objects of the power, even although the agreement in itself is unobjectionable. An appointment to a child an object of the power, and a contemporaneous settlement by him of the appointed fund, is, however, valid unless it can be shown that the appointment was made in pursuance of a contract inducing the appointment.
" '(3) If it was made for purposes foreign to the power, although such purposes are not communicated to the appointee before the appointment and although the appointor gets no personal benefit’ ”. (Emphasis supplied.)

A like statement is contained in the Introductory Note to chapter 20 of the Restatement (Second) of Property (Donative Transfers) (at 309): "These attempts to benefit non-objects through the appointment to an object are described as 'frauds on the power.’ This phrase is not accurately descriptive, for an appointment may be a 'fraud on the power’ and a 'fraudulent appointment’ even though the donee honestly and reasonably believes what has been done is authorized and even though the object to whom the appointment is made and the non-object sought to be benefited are quite unaware of the existence of the power, the making of the appointment, or the result which the donee desires to accomplish.” Matter of Carroll (supra) involved a power to dispose of property "to and among her children or any other kindred” which the donee exercised by appointing $250,000 to a cousin who, by letter, promised to pay the donee’s husband $100,000. In light of the written agreement the court held the entire appointment to the cousin invalid. The decision makes clear, however, that written evidence is not required for it analyzed an earlier English case (Pryor v Pryor, 2 DeG, J & S 205) and noted (at p 300) that "[t]here the bargain apparently was largely a matter of inference but it was found to exist from the acts of the parties” (see also, Restatement [Second] of Property [Donative Transfers] § 20.2 comments a, b, f).

Also instructive with respect to the present case is Morton v American Sec. & Trust Co. (276 NY 475, remittitur amended 276 NY 601, affg without opn 251 App Div 31). It involved the remainder of the life estate of Mary Morton under the will of her mother Anna. Under Anna’s will the remainder went to Mary’s issue, if any, and in default of issue to her heirs at law and next of kin, subject, however, to Mary’s power if she left no issue to appoint one half of her share, the remaining half to go to her heirs at law and next of kin. Mary Morton had no children of her own but had adopted three children. She exercised the power to set up a trust for one and left half the corpus for the benefit of the other two. The court held the precautionary addendum to prevent their taking as children and as to their claim that they were entitled as Mary’s "heirs at law” held (251 App Div, at p 36): "The declared limitation by the power of appointment over one-half of a daughter’s trust share should not be thwarted long after the death of the testatrix by the expedient of the daughter’s adopting children to take one-half by appointment and the other half as her heirs at law and next of kin.” Likewise in the present case the declared limitation of the power of appointment to male relatives named Gardiner should not be thwarted long after Jonathan’s death by the expedient of Olney having changed his name, wholly aside from any bargain with Winthrop, if bargain there was.

The extent to which this court has gone in protecting the testator’s limitations upon a power of appointment is indicated by Matter of Kennedy (279 NY 255) and Farmers’ Loan & Trust Co. v Mortimer (219 NY 290). Kennedy held that the power to appoint a fee did not permit appointment of a life estate and in so doing said (279 NY, at p 263): "We must look exclusively to the will of Mr. Kennedy to determine the terms, scope and limitations upon the power. It must be exercised strictly according to its terms (3 Bogert on the Law of Trusts & Trustees, p. 1692). The donee was unauthorized to go outside of or exceed the power given; she was required to exercise it, if she acted at all with reference to it, within its specific terms. In construing the power, we are required not only to consider its express terms but also, if necessary, the general plan, purpose and intent of the testator as found within the express provisions and within the will as a whole. 'The intention of the donor of the power is the great principle that governs in the construction of powers’ (4 Kent’s Commentaries, p. 345)”. In Mortimer, in upholding denial of specific performance of contracts to exercise a power of appointment, Judge Cardozo quoted (219 NY, at p 294) the holding of an English case, " 'that equity * * * will never uphold an act which will defeat what the person creating the power has declared, by expression or necessary implication, to be a material part of his intention.’ ”

The principle is not just decisional. It finds present expression in EPTL 10-6.2 (a) (which derives from Rev Stat of NY, part II, ch I, tit 2, § 121): "the directions of the donor as to the manner, time and conditions of the exercise of a power must be observed” (emphasis supplied). And as Dean Rohan notes (NY Civ Prac — EPTL, vol 9B, If 10-6.2 [2], at 10-201), "fraudulent intent is not necessary; it is the existence of a benefit to one not a permissible appointee which invalidates the appointment.” Thus, in Matter of Trowbridge (124 Misc 317), an appointment to a donee’s husband under a power to appoint to descendants was held invalid.

Had OIney simply exercised the right to change his name accorded him by the common law (Smith v United States Cas. Co., 197 NY 420), that self-serving act clearly would not have qualified him to take under the power. It was no less a fraud on the power because the name change was accomplished by an adoption decree, the more so because the adoption contravened the precautionary addendum.

IV

The order of the Appellate Division should be modified to deny the motions of OIney and the trustee for partial summary judgment and to grant the Frances motion, joined in by the guardian ad litem, to the extent that it seeks judgment declaring that OIney is not entitled to any part of the remainder under Jonathan T. Gardiner’s will. The certified question should be answered in the negative.

Chief Judge Wachtler and Judges Alexander and Mahoney concur with Judge Kaye; Judge Meyer dissents and votes to modify in a separate opinion in which Judges Simons and Hancock, Jr., concur.

Order affirmed, with costs to all parties appearing separately and filing separate briefs payable out of the estate. Question certified answered in the affirmative. Appeal by OIney Mairs Gardiner dismissed, without costs.

      .That section provides as follows: "The foster parent or parents and the person adopted sustain toward each other the legal relation of parent and child, and have all the rights and are subject to all the duties of that relation, including the right of inheritance from each other * * * but as respects the passing and limitation over of real or personal property dependent under the provisions of any instrument on the foster parent dying without heirs, the person adopted is not deemed the child of the foster parent so as to defeat the rights of remaindermen. ” (Domestic Relations Law former § 114, L 1931, ch 562; the italicized language is known as the precautionary addendum.)

      .While the precautionary addendum was repealed effective March 1, 1964 (L 1963, ch 406), it nonetheless applies to the wills of persons dying before the repeal became effective (Domestic Relations Law § 117 [3]).

      .Whether by a prior marriage or as a child of Winthrop’s marriage to Beth is unclear from the record, but, in view of the limitations of the remainder to Winthrop’s "oldest living son” and of the power of appointment to a male relative, is immaterial.

      .Both Carll and Washburn are distinguished in Matter of Snowden (31 NY2d 322, 329) as involving wills in which the trust remainder was explicitly limited to the grantor’s "bloodlines” and the life tenants had no power of appointment.

      .In doing so it reversed the presumption stated in Matter of Upjohn (304 NY 366, 375) that "in the absence of any indication of the testator’s intent, it will be assumed that the testator did not envisage adopted children taking under the limitation” (to lawful issue or descendants surviving).

      .The Snowden opinion emphasized that although the Charles power of appointment was limited it included the life tenant’s husband, italicizing the word "husband” (31 NY2d, at p 328). That fact was apparently overlooked in Matter of Park, however (see, 15 NY2d 413, 418).

      .Majority opn, at p 74. The suggestion is apparently predicated on the language in Park discussed above. But Park was not a power of appointment case and, as noted (n 4, supra), apparently misapprehended the power involved in Matter of Charles to which it referred. Clearly in light of those facts and of the three power of appointment cases discussed in the text above, the Park language on which the majority relies cannot be read as holding that the mere presence of a power of appointment, no matter how limited, is enough to make the addendum inapplicable. Indeed, in Matter of Brooks (32 NY2d 752, 753) the argument that the power of appointment was sufficient to make the addendum inapplicable was expressly rejected.

      .That Isabel has not appeared in this proceeding provides no contraindication for it is a reasonable inference that Olney, who will receive the entire $3,000,000 remainder to the exclusion of both Isabel and Frances, will take care of any needs of Isabel, his mother, that she cannot provide for herself.

      .I have not overlooked the Surrogate’s ruling, in reliance on Matter of Rockefeller (Hubbard) (12 NY2d 124) that motivation is irrelevant. In so holding, however, he overlooked the fact that Rockefeller was decided prior to Park’s construction of the Domestic Relations Law adoption provision as creating a presumption that adopteds were intended to be included, and is, therefore, distinguishable. That this is so is made evident by the following passage from Rockefeller (12 NY2d, at p 134 [emphasis supplied]): "It matters not whether the foster parent, in adopting a child, was motivated by good or bad intention for, in any event, the mere fact of adoption satisfies the condition of the statute and bars inheritance by the adopted child or children unless an intention to the contrary appear (Matter of Leask, supra). If, however, the settlor at the time he executed the deed of trust intended to include adopted children as issue entitled to take the remainder, it follows with equal cogency that the adoption motive is of no consequence; the intent of the settlor conditions the operation of section 117.”

      .Having concluded that the change of name effected by the adoption decree was sufficient, the Appellate Division did not consider whether the fact that when Olney was seven years old he was baptized as Olney Blanchard Gardiner Hairs was sufficient to qualify him for appointment. Clearly it was not, for middle names are of no legal significance (Grygorewicz v Domestic & Foreign Discount Corp., 179 Misc 1017, 1019; see also, Matter of Snook, 2 Hilt 566) and, in any event, Winthrop’s will was executed in 1975, after the adoption decree of August 14, 1974 had changed Olney’s name to Olney Hairs Gardiner and directed (as Domestic Relations Law § 114 provides) "that the said foster child hereafter be known by that name.” Validity of the exercise of the power, thus, stands or falls on the basis of the adoption decree change of name alone.

      .Olney’s memorandum in response to the motion for leave to appeal to this court states that fraud on the power was never raised in the courts below, but the trustee’s affidavit in opposition states as to "fraud on the power” and "bargain behind,” that "[t]hese issues were alleged in the lower court and found to be irrelevant,” and the trustee’s brief to us only suggests that the question "was not raised on appeal to the Appellate Division.” The guardian’s first and second supplemental reports did not use the words "fraud on the power,” but the first report argued that Olney was not within the testator’s intention, citing and analyzing the Morton case (infra), and the second report clearly stated that Olney was not brought within the power by the change of name. The issue is, therefore, properly before us (Telaro v Telaro, 25 NY2d 433, 438).

      Designated pursuant to NY Constitution, article VI, § 2.


source: Caselaw Access Project

author: Kaye, J. Alexander, J.

license: Public Domain

text:
    Nubar Sukljian, Individually and as Parent and Natural Guardian of Moses Sukljian, an Infant, Plaintiff, v Charles Ross & Son Company, Inc., Respondent-Appellant, and K.M. Equipment Corporation, Defendant and Third-Party Plaintiff-Respondent-Appellant. Alex Zeeve & Company, Inc., et al., Third-Party Defendants; Commercial Equipment and Machinery Company, Third-Party Defendant-Respondent; General Electric Company, Third-Party Defendant-Appellant-Respondent. (And Fourth- and Fifth-Party Actions.)
    Argued November 11,1986;
    decided December 19,1986

      POINTS OF COUNSEL

      Fred J. Hutchison for third-party defendant-appellant-respondent.

      H. Neal Conolly and Michael J. Hutter for defendant and third-party plaintiíf-respondent-appellant.

      Donald W. Boyajian for third-party defendant-respondent.
   OPINION OF THE COURT

Kaye, J.

A corporation that sold a machine previously used in its own production as surplus property was not liable to remote purchasers either in strict products liability or in negligence, for injuries allegedly resulting from a defect in the machine, and should have been awarded summary judgment dismissing the complaint.

On February 26, 1978, plaintiffs son, employed in his father’s business (Ardex Corporation), injured his hand while cleaning the rollers of a high-speed, three-roll grinding mill. The mill had been manufactured and sold by Charles Ross & Son Company, Inc. to the Missile and Space Department of General Electric Corporation in January 1962 for approximately $4,000. When General Electric purchased the mill, at its request the manufacturer added both a safety switch, which if tripped would bring the rollers to a stop, and a removable feed hopper, which permitted larger quantities of material to be fed into the mill and acted incidentally as a housing guard. Claimants’ theory is that both of these added features made the mill safer to use.

In June 1973, more than 11 years after its purchase of the mill, General Electric determined that the machine was no longer needed in its own production and included it as part of a sale of its surplus property, conducted with a sale of Government-owned surplus. There followed a series of transfers, ending some four years later with the mill back in production, in the hands of Ardex.

At the surplus sale in June 1973 — the second surplus sale of the year — several hundred lots were offered, some of them items of equipment, some of them hardware and metals sold by weight. General Electric held two or three sales of its surplus equipment a year; there is no evidence that General Electric derived any profit from such sales. The terms of the June 1973 sale were "As Is, Where Is”, and bidders were invited to inspect the property beforehand. The invitations to bid stated: "Seller makes no warranty, express or implied, as to quantity, quality, weight, size, character or description of any of the surplus property covered by this invitation.” The only indication that the June 1973 sale — or any surplus sale— received publicity is the following incomplete statement in a General Electric memorandum relating to "Government Owned Surplus”: "will be taken to advertise the sale through the various medias available, such as newspapers, trade magazines, trade papers, etc.”

The mill — apparently the only piece of equipment of its kind in the sale — was sold to Semco Equipment Company (not a party to this action) for $35. Whether or not the machine was sold as scrap metal is disputed by the parties, General Electric in its affidavits and testimony stating its understanding that the machine was to be scrapped and reduced to molten metal. There is no evidence as to whether the mill was in operable condition when it was sold by General Electric. At all events, several weeks after General Electric’s surplus sale, Semco resold the mill to Commercial, a dealer in new and used machinery, for $150. Commercial, in turn, sold the machine in February 1974 to K.M. Equipment Corporation, another dealer in new and used machinery, which purchased it together with two other mills for $850 under the name East Bay Industries, as a joint venture with Alex Zeeve and Company. Zeeve and East Bay owned the machine for approximately two years, during which time they reconditioned and rebuilt it to its original specifications by regrinding the rollers, recutting the gears, refitting the end plates, cleaning and painting. In April 1976, the machine was sold to Ardex, where it was installed by Charles W. Ashline Plumbing & Heating Inc. in 1977. At the time the mill was received by K.M., it had neither the safety switch nor the feed hopper.

Following his son’s accident, plaintiff asserted claims in strict products liability, negligence and breach of warranty against Ross, the manufacturer, and K.M., the seller. K.M. then commenced a third-party action against Zeeve, Commercial, Ardex and General Electric; Ardex and Zeeve asserted cross claims for contribution and indemnity against General Electric; Zeeve impleaded East Bay; East Bay and K.M. impleaded Ashline. Upon the completion of discovery, General Electric sought summary judgment claiming that it did not sell the machine in the ordinary course of business and therefore owed no duty to plaintiff. Both lower courts granted the motion on this basis as to the strict liability claims, but denied summary judgment as to the negligence claims, finding issues of fact as to foreseeability that the machine would again be used in production. Special Term granted General Electric summary judgment on the breach of warranty claim because there was no privity of contract between the parties and because the sale was on an "as is” basis (Martin v Dierck Equip. Co., 43 NY2d 583), and that ruling was not appealed. The Appellate Division granted General Electric, K.M. and East Bay leave to appeal to this court.

The issues before us are whether the Appellate Division correctly granted summary judgment dismissing the strict liability claims against General Electric, and whether it correctly denied summary judgment as to the negligence claims. We conclude that the claims against General Electric should have been dismissed in their entirety.

Turning first to the strict liability claims, a product may be defective by reason of a manufacturing flaw, improper design or failure to warn (see, Voss v Black & Decker Mfg. Co., 59 NY2d 102, 106-107; Robinson v Reed-Prentice, 49 NY2d 471, 478-479; see also, Lopez v Precision Papers, 67 NY2d 871).

Manufacturers of defective products may be held strictly liable for injury caused by their products, regardless of privity, foreseeability or due care (Voss v Black & Decker Mfg. Co., 59 NY2d 102, 106, supra; Codling v Paglia, 32 NY2d 330, 342; see also, PJI 2:141). Imposition of this onerous liability rests largely on considerations of public policy (Victorson v Bock Laundry Mach. Co., 37 NY2d 395, 401; see also, Restatement [Second] of Torts § 402 A comment c; Prosser and Keeton, Torts § 98 [5th ed]). Given the increased complexity of modern products and modern production methods, most often only the manufacturer "can fairly be said to know and to understand when an article is suitably designed and safely made for its intended purpose”; by the same token, the manufacturer most often "alone has the practical opportunity, as well as a considerable incentive, to turn out useful, attractive, but safe products.” (Codling v Paglia, 32 NY2d 330, 340, 341, supra; see also, Caprara v Chrysler Corp., 52 NY2d 114, 123; Micallef v Miehle Co., 39 NY2d 376, 383.)

Policy considerations have also been advanced for the imposition of strict liability on certain sellers, such as retailers and distributors of allegedly defective products. Where products are sold in the normal course of business, sellers, by reason of their continuing relationships with manufacturers, are most often in a position to exert pressure for the improved safety of products and can recover increased costs within their commercial dealings, or through contribution or indemnification in litigation; additionally, by marketing the products as a regular part of their business such sellers may be said to have assumed a special responsibility to the public, which has come to expect them to stand behind their goods (see, Mead v Warner Pruyn Div., 57 AD2d 340; Kirby v Rouselle Corp., 108 Misc 2d 291; Vandermark v Ford Motor Co., 61 Cal 2d 256, 391 P2d 168; see also, Restatement [Second] of Torts § 402 A comment c).

But not every seller is subject to strict liability. The policy considerations that have been advanced to justify the imposition of strict liability on manufacturers and sellers in the normal course of business obviously lack applicability in the case of a party who is not engaged in the sale of the product in issue as a regular part of its business. (See, Restatement [Second] of Torts § 402 A, comment f, concluding: "This Section is also not intended to apply to sales of the stock of merchants out of the usual course of business, such as execution sales, bankruptcy sales, bulk sales, and the like.”) The casual or occasional seller of a product does not undertake the special responsibility for public safety assumed by those in the business of regularly supplying those products, nor is there the corollary element of forced reliance on that undertaking by purchasers of such goods. As a practical matter, the occasional seller has neither the opportunity, nor the incentive, nor the protection of the manufacturer or seller who puts that product into the stream of commerce as a normal part of its business, and the public consumer does not have the same expectation when it buys from such a seller. We recognized, for example, in Gobhai v KLM Royal Dutch Airlines (57 NY2d 839, affg 85 AD2d 566), in affirming the grant of summary judgment to an airline defendant sued in strict liability for allegedly defective slippers given a passenger, that where distribution of an allegedly defective product is incidental to defendant’s regular business the principles of strict products liability have no relevance.

Both Special Term and the Appellate Division correctly concluded that strict liability was inapposite because there was no showing that General Electric was regularly engaged in the business of selling the equipment in issue. As in Gobhai (supra), the sale of the mill — indeed the surplus sale itself— was wholly incidental to the regular business of General Electric and, as such, not governed by the policy considerations underlying the imposition of strict liability. In reaching the conclusion as a matter of law that strict liability does not apply here, we cannot ignore the undisputed circumstances of the sale. The machine was being sold after more than 11 years in production. The sale was on an "As Is — Where Is” basis, purchasers were invited to inspect the property before buying and denied any warranties, and the price was $35, less than 1% of General ELectric’s own purchase price for the equipment more than a decade earlier.

Claimants assert that there is a question of fact whether General Electric was in reality in the regular business of a second-hand equipment dealer, relying on Galindo v Precision Am. Corp. (754 F2d 1212). In that case, however, there was evidence that the seller of the subject sawmill trimmer operated more than 240 sawmills and plants and regularly sold its used sawmill equipment to dealers (see also, Jordan v Sunnyslope Appliance Propane & Plumbing Supplies Co., 135 Ariz 309, 660 P2d 1236); there was no evidence of any special conditions of sale such as were present here.

Even if we were to recognize that liability might be imposed in a case such as hypothesized in Galindo (supra) — i.e., regular, periodic dispositions of sawmill equipment, a division devoted to selling that equipment, widespread advertising, and substantial revenues from that activity (id., at p 1219) — this record contains no such facts. There is no basis in the undisputed facts before us to support an inference that General Electric, in incidentally disposing of the mill at a surplus equipment sale in the manner it did, undertook any special responsibility to the public for product safety, or was perceived by the public as having done so, or was better able to spread any loss caused by such defective products, making it more equitable to impose such loss on the seller (see, Galindo v Precision Am. Corp., 754 F2d 1212, 1218, supra; see generally, When is Person "Engaged in the Business” for Purposes of Doctrine of Strict Liability, Ann., 99 ALR3d 671; Prosser and Keeton, Torts § 100 [5th ed]). While we recognize that more than the single or isolated sale of a jam jar, a pound of sugar or an automobile described in the Restatement (Restatement [Second] of Torts § 402 A comment f) is at issue here, still the principle is the same whether an individual, or an airline, or a huge corporation disposing of its surplus equipment in an occasional sale is involved: there is no basis in public policy for the imposition of strict liability, and summary judgment was correctly granted.

The same result should follow as to the negligence issue.

Claimants begin their analysis with a contention that, though it sold the mill in a surplus sale, General Electric should have foreseen that the machine might be returned to production. We have, however, several times made clear that a determination of negligence — i.e., breach of duty — must begin with consideration of the duty owed, which is a matter of policy, rather than with the issue of foreseeability (see, De Angelis v Lutheran Med. Center, 58 NY2d 1053; Pulka v Edelman, 40 NY2d 781). At most, the duty of a casual or occasional seller would be to warn the person to whom the product is supplied of known defects that are not obvious or readily discernible (see, Copp v Corning Glass Works, 114 AD2d 144; see also, Restatement [Second] of Torts § 388). This orbit of duty is consistent with the recognition that, unlike the manufacturer (see, Schumacher v Shear Co., 59 NY2d 239 [successor to manufacturer]; Micallef v Miehle Co., 39 NY2d 376, supra [manufacturer]) or the seller of a product in the normal course of business, the occasional seller is not part of the regular commercial network for that product. General Electric breached no duty to claimants by its alleged failure to warn of the absence of the safety switch and feed hopper.

Accordingly, the order should be modified, with costs to third-party defendant General Electric, by granting summary judgment to General Electric dismissing the negligence claims asserted against it and, as so modified, affirmed. The certified question should be answered in the affirmative.

Alexander, J.

(dissenting). On the record presented in this case, I cannot agree that General Electric has established as a matter of law that it is not engaged in the business of selling used industrial machinery so as to warrant summary judgment on the strict products liability claim. Nor can I agree that General Electric has established its entitlement to judgment as a matter of law on the negligence claim. Accordingly, I respectfully dissent.

Strict products liability applies to a seller of a product in a defective condition provided that the seller is engaged in the business of selling such product (see, Restatement [Second] of Torts § 402 A; see generally, Voss v Black & Decker Mfg. Co., 59 NY2d 102, 106-107; Robinson v Reed-Prentice, 49 NY2d 471, 478). Although it is not necessary "that the seller be engaged solely in the business of selling such products”, strict products liability does not apply to "the occasional seller * * * who is not engaged in that activity as a part of his business” (Restatement [Second] of Torts § 402 A comment f). In distinguishing between the occasional or casual seller, to which strict products liability does not apply, and the seller who is engaged in a business other than its primary business, to which strict products liability does apply, the Restatement provides two examples. In regard to the former, the illustrations given are that of a housewife who, on one occasion, sells to her neighbor a jar of jam or sugar and an owner of an automobile, who on one occasion, sells it to his neighbor. In contrast, the example provided to illustrate the latter principle is that of a motion picture theater that sells popcorn or ice cream either for consumption on the premises or in packages to be taken home. Even though the concession stand is incidental to the primary business of the movie theater, strict liability obtains. Although the distinction is one that is not easily applied, the crucial factor distinguishing the two categories would appear to be the number of items sold and the frequency of sales (see, Galindo v Precision Am. Corp., 754 F2d 1212, 1219).

Viewing the evidence in the light most favorable to the party opposing the motion for summary judgment, as we must (see, Robinson v Strong Mem. Hosp., 98 AD2d 976, quoting Goldstein v County of Monroe, 77 AD2d 232, 236), it is apparent that General Electric has not established that in respect to its sale of used industrial equipment it is a casual or occasional seller akin to an ordinary individual who makes an isolated sale. At the very least, this record demonstrates the existence of a genuine issue of fact as to whether General Electric is in fact engaged in the business of selling used industrial equipment.

General Electric, through its manager of policies and procedure in its reentry systems department, frequently conducts sales of used equipment where up to 300 "lots” of equipment are sold. Each "lot” may contain several pieces of equipment, most of which are identified by manufacturer and style number. The lots are specifically arranged to "stimulate competitive bidding”. Moreover, the sales are extensively advertised by the use of media sources such as newspapers, trade magazines and trade papers. Additionally, invitations are mailed to numerous prospective bidders and all the property that is offered for sale is available for inspection and examination prior to bidding. Moreover, the mill that is the subject of this litigation was identified by the name of its manufacturer, information that would be irrelevant, if as contended by General Electric, it was sold for scrap metal, a circumstance in which the weight rather than the manufacturer would be relevant. The record demonstrates that the mill was fully operable and functional when sold and that this sale was pursuant to a company policy to sell operable machines when they were no longer needed.

The conclusion is inescapable here that General Electric does not fall into the category of "occasional or casual seller” exempt from strict products liability. The evidence indicates that General Electric conducts a systematic profit-making scheme of selling hundreds if not thousands of pieces of used industrial machinery each year. The majority apparently relies on the fact that General Electric is a "huge corporation” (majority opn, at p 97) and concludes that their sales of used equipment therefore do not constitute a substantial portion of the corporation’s activities. This reliance is misplaced and the conclusion deriving therefrom, unwarranted. Surely, a dealer in used machinery that conducts frequent sales of hundreds of pieces of machinery is not excluded from the imposition of strict products liability. Similarly, the fact that General Electric engages in numerous commercial activities other than the sale of used machinery does not render those sales casual and occasional so as to shield General Electric from exposure to strict products liability. Indeed, comment f specifically indicates that it "is not necessary that the seller be engaged solely in the business of selling such products”. Thus, just as a movie house that sells food for consumption at home is not excluded from strict products liability, General Electric, which systematically sells large quantities of used industrial machinery, should not bé excluded.

The conclusion that General Electric is not a casual or occasional seller of used industrial machinery is fully supported by the policies underlying strict products liability. A basis for imposing strict liability on the seller of a defective product is that the seller has voluntarily assumed a special responsibility for product safety such that the public has the right to expect that the seller will stand behind the product (see, Restatement [Second] of Torts § 402 A comment c;. Mead v Warner Pruyn Div., 57 AD2d 340; Galindo v Precision Am. Corp., 754 F2d 1212, 1218, supra). Here, General Electric, by releasing a large quantity of used industrial equipment, including this operable machine, into the stream of commerce as part of a systematic profit-making scheme, may properly be held to have assumed the special responsibility for public safety such as that imposed upon all businesses, selling products. It cannot be concluded on this record that the consuming public does not rely on General Electric to stand behind the products it sells for a profit just as the public relies on any seller of large quantities of used equipment. The proposition that vendors of used products are not able to exert pressure for improved safety of products on manufacturers is arguable at best (see, Jordan v Sunnyslope Appliance Propane & Plumbing Supplies Co., 135 Ariz 309, 660 P2d 1236, 1240) and if accepted would preclude strict products liability claims against any dealer in used products. Finally, used product dealers, like any seller of defective products, can recover increased costs caused by their liability within their commercial dealings or through contribution or indemnification in litigation (Jordan v Sunnyslope Appliance Propane & Plumbing Supplies Co., supra, at p 1242). Thus, the policies underlying strict products liability do not support excluding General Electric, a dealer in used industrial machinery, from being subject to a strict products liability claim (see, Galindo v Precision Am. Corp., 754 F2d 1212, supra).

I conclude therefore, that under the facts and circumstances of this case and in light of the policies underlying strict products liability, General Electric was engaged in the business of selling the product that caused the harm and was not, in that respect, an "occasional or casual” seller.

Turning to the negligence claim, the majority opinion determines, for policy reasons, that "the duty of a casual or occasional seller [is at most] to warn the person to whom the product is supplied of known defects that are not obvious or readily discernible” (majority opn, at p 97) and summarily concludes that "General Electric breached no duty” (at p 97). Whether or not the limited duty posited by the majority is warranted, it is inapplicable here where the record does not support the conclusion that General Electric is a "casual or occasional seller”. Thus, I would affirm the determination of the Appellate Division that there is a factual issue concerning whether General Electric, the seller, breached its duty of reasonable care to the buyer and those within the foreseeable scope of risk (see, 116 AD2d 9, 12).

Judges Meyer, Simons, Titone and Hancock, Jr., concur with Judge Kaye; Judge Alexander dissents and votes to modify the order by denying summary judgment to General Electric as to the strict products liability claims asserted against it and, as so modified, to affirm in a separate opinion; Chief Judge Wachtler taking no part.

Order modified, with costs to third-party defendant General Electric, by granting summary judgment to General Electric dismissing the negligence claims asserted against it and, as so modified, affirmed. Question certified answered in the affirmative.

      The safety switch did not become a mandatory part of the machine until 1975, following promulgation of standards by the American National Standards Institute, Inc. There is no evidence that the removable feed hopper ever became mandatory.

      .There is scarce, if any, support in the record for the conclusion of the majority that the mill involved in this case is "the only piece of equipment of its kind in the sale” (majority opn, at p 93). A complete list of the items offered in this particular sale does not appear in the record before us although the partial list provided includes numerous pieces of industrial equipment such as a "flexowriter with tape punch”, a "hydraulic pump” and a "key punch machine”.

        .The majority’s reliance on Gobhai v KLM Royal Dutch Airlines (85 AD2d 566, affd 57 NY2d 839), is misplaced. In affirming the grant of summary judgment to an airline defendant sued in strict liability for allegedly defective slippers given a passenger, the court relied on the undisputed fact that the defendant "did not manufacture, design or sell the alleged defective footwear” (85 AD2d, at p 567; emphasis supplied). That the distribution of the slippers was incidental to the basic service provided by the airline demonstrated that there had been no sale of the slippers — i.e., that the purchase of the airline ticket did not include the purchase of the slippers (see, 57 NY2d, at p 841, Fuchsberg, J., dissenting [the majority opinion adopts an inadmissibly narrow definition of sale]). In this case, of course, there is no dispute that General Electric sold the allegedly defective product.