157 Misc. 667 | N.Y. App. Term. | 1935
Lead Opinion
Plaintiff, a resident of New York, is the assignee of two persons, copartners, residents of the State of Pennsylvania but having an office for the transaction of business in the State of New York. The action is against a Louisiana corporation, which also has an office for the transaction of business in New York. Defendant operates a large department store in a building occupied exclusively by it in New Orleans. The action is to recover for goods claimed to have been sold and delivered to defendant-appellant by plaintiff-respondent’s assignors. The goods were sold in New York city on written order, copy of which is annexed to the moving affidavit. The order provided it would be valid only if confirmed by defendant-appellant’s New York office, and “ is placed and accepted subject to conditions printed on reverse side.” The order was confirmed and accepted. On the reverse side of the order there was printed a clause as follows: “As a part of the consideration of the giving of this order by the purchaser, the seller agrees that no court other than the court of the purchaser’s domicile shall have jurisdiction to try any case against the purchaser arising out of this order. And the seller hereby specifically waives any provision of the law of any state giving said seller the right to sue the said purchaser before the coxirts of any state other than those of the purchaser’s domicile.”
Any stipulation between contracting parties by which it is i attempted to confer exclusive jurisdiction upon a particular court and to oust other courts of jurisdiction provided by law is contrary ! to public policy. This is the Federal rule. (Gough v. Hamburg Amerikanische Packetfahrt Aktiengesellschaft, 158 Fed. 174; Mutual Reserve Fund Life Assn. v. Cleveland Woolen Mills, 82 id. 508.) It is the rule in the State of New York. (Sudbury v. Ambi Verwaltung Kommanditgesselschaft, 213 App. Div. 98, and cases cited therein; Sliosberg v. New York Life Ins. Co., 217 id. 685, opinion by Martin, J., now P. J.)
It may be that the rule is traceable to the “ jealousy with which, at one time, courts regarded the withdrawal of controversies from their jurisdiction by the agreement of parties.” The rule, it would seem, also has basis in the proposition that the jurisdiction of the courts, being established by law, is a matter exclusively within the | province of the State, to be increased or diminished either by the people or by the State, through its representatives, solely as a matter of sound public policy. The inviolability of private contracts is always subject to the limitations of the reasonableness ¡ and legality of their provisions, which may not in any event con- ! travene public policy.
The statement of the rule and the reason for it, as given by Cardozo, J., in a concurring opinion in Meacham v. Jamestown, F. & C. R. R. Co. ([1914] 211 N. Y. 346, 354), apply with equal force and aptness today as when stated. He said: “ If jurisdiction ¡ is to be ousted by contract, we must submit to the failure of justice | that may result from these and like causes. It is true that some’ judges have expressed the belief that parties ought to be free to contract about such matters as they please. In this state the law has long been settled to the contrary. (Sanford v. Commercial Travelers’ Mut. Acc. Assn., 86 Hun, 380; 147 N. Y. 326; Nat. Contracting Co. v. Hudson R. W. P. Co. 192 N. Y. 209. See, also, Miles v. Schmidt, 168 Mass. 339; Fisher v. Merchants’ Ins. Co.,
The purported, waiver of any provision of the laws of any State giving one of the parties the right to sue before any court other than the courts of defendant-appellant’s domicile, which is part of the agreement and in substance seeks to effectuate the same result, is also against public policy and void. Whatever the form, the substance will be considered. That indicates the same illegal object to be accomplished, i. e., the ouster of all courts except those of defendant-appellant’s domicile of jurisdiction. The statement of Cardozo, J., in his concurring opinion in Meacham v. Jamestown, F. & C. R. R. Co. (supra), also has direct application here. He said: “ A rule would not long survive if it were subject jto be avoided by so facile a device. Such a contract, whatever ¡form it may assume, affects in its operation the remedy alone.”
We note the reliance placed by defendant-appellant upon statements of the Court of Appeals in Berkovitz v. Arbib & Houlberg ([1921] 230 N. Y. 261, at p. 276), and also in Gilbert v. Burnstine (255 id. 348, particularly at p. 354). In the latter case the court says, in part, “ Generally, extraterritorial jurisdiction of alien tribunals, however vigorously asserted, is denied by us. Of its own force, process issued from the court of a foreign state against our citizen and served upon him here is void. Without his consent he cannot be made subject to it, but whenever he agrees to be bound by its service, his conduct presents a problem. Contracts made by mature men who are not wards of the court should, in the absence of potent objection, be enforced. Pretexts to evade them should not be sought. Few arguments can exist based on reason or justice or common morality which can be invoked for the interference with the compulsory performance of agreements which have been freely made. Courts should endeavor to keep the law at a grade at least .'is high as the standards of ordinary ethics. Unless individuals run foul of constitutions, statutes, decisions, or the rules of public morality, why should they not be allowed to contract as they please? Our government is not so paternalistic as to prevent them. Unless their stipulations have a tendency to entangle national or state affairs, their contracts in advance to submit to the process of foreign tribunals partake of their strictly private business. Our courts are not interested except to the extent of preserving the right to prevent repudiation. In many instances problems not dissimilar from the one presented in this case have been solved. Vigor has been infused into process otherwise impotent. Consent is the factor which imparts power. Text
The language is strong and seemingly supports the proposition of a change adopted in our public policy for which appellant contends. That the Gilbert v. Burnstine case has not changed such public policy seems clear from consideration of a number of very important factors. That opinion was written in support of the court’s decision that after the enactment of the Arbitration Law in 1920 (Consol. Laws, chap. 72, § 2) rendering “ a provision in a written contract to settle by arbitration a controversy thereafter arising between the parties to the contract * * * valid, enforceable and irrevocable,” an agreement by which the parties contract to render themselves subject to foreign process was not contrary to public policy. Referring to an opinion by Cardozo, J., we find this apt statement in Berizzi Co. v. Krausz (239 N. Y. 315, at p. 318): “ But the only new public policy declared by the present act is the removal of the ban that had been laid by the decisions of the courts upon general and executory agreements for the arbitration of future differences.” (See, also, Matter of Bullard v. Grace Co., 240 N. Y. 388, 394.) There is no mention in the opinion in Gilbert v. Burnstine (supra) that the previous' cases and the rule of public policy enunciated was being modified otherwise than in arbitration as validated by the statute. On the contrary, the court premises its opinion on the following basic statement: “ Settlements of disputes by arbitration are no longer deemed contrary to our public policy. Indeed, our statute encourages them. Contracts directed to that end are now declared valid, enforceable and irrevocable save upon such grounds as exist at law or in equity for the revocation of any contract (Arbitration Law; Cons. Laws, ch. 72, § 2; Matter of Berkovitz v. Arbib & Houlberg, 230 N. Y. 261; Matter of Zimmerman v. Cohen, 236 N. Y. 15.) ”
The distinction and at the same time the similarity between Gilbert v. Burnstine and the case under consideration arises, we think, from the regard our courts have for the rules of inviolability of private contracts, of comity and also of public policy. When one of the parties seeks to evade the jurisdiction of a foreign court, or tribunal of arbitration duly invoked by the other party under a contract between them, our courts are reluctant to hold the agreement invalid, the foreign jurisdiction illegally invoked, or to withhold the enforcement in our courts and jurisdiction of a judg
In that case the plaintiff had invoked the jurisdiction of England under the agreement wherein the defendant had agreed without reservation to submit to arbitration in London according to the English statute. Then, to defeat the English judgment entered on default after service here of notice of the proceedings, the defendant sought to defeat an action here to enforce such judgment on the pretext that not only was the agreement contrary to public policy in that it attempted to exclude our courts, but the service of notice ! here also was illegal and void under our law and public policy. , Holding that by the contract to arbitrate the defendant agreed to submit to the foreign júrisdiction, and under the modification of ! our public policy such agreement was valid, the court also held 1 that by the agreement the parties intended to render themselves subject to foreign process. The opinion (at p. 357) states: “ Public policy, therefore, would not forbid defendants to appoint an agent
Shientag, J., concurs; Lydon, J., dissents, with opinion.
Dissenting Opinion
(dissenting). I dissent.
I think that a contract such as is now before us is no longer to be regarded as against the public policy of the State even though the objecting party to the contract be a resident of the State. I think we have adopted the more liberal and, it seems to me, the more sensible rule that parties are free to consult their own interests and convenience in respect to the forum in which enforcement of the contract is to be sought as well as in respect to most other matters. It seems to me anomalous in the extreme to hold that while an agreement to submit a possible controversy to the determination of a foreign arbitral tribunal is valid (Gilbert v. Burnstine, 255 N. Y. 348), an agreement to submit the same controversy to the adjudication of the courts of another State of the Union is invalid.
But it is unnecessary to go so far as I have suggested in order to decide the case before us. The plaintiff’s assignors were nonresidents of the State. As non-residents they would have had no
The order should be reversed and the motion granted.
Order affirmed, with ten dollars costs and disbursements.