Pensabene v. F. & J. Auditors Co.

The defendant argues that the New Jersey statute is contrary to the public policy of the state of New York, and asserts that our courts will not enforce a cause of action under a foreign statute when a similar New York statute has been held to be unconstitutional, as in Ives v. South Buffalo Ry. Co., 201 N. Y. 271 , 94 N. E. 431 , 34 L. R. A. (N. S.) 162 , Ann. Cas. 1912B, 156.

[1] The lex loci contractus, which may or may not be, in an accident case, the lex loci delicti, controls the rights of parties (Schweitzer v. H. A. P. A. Gesellschaft, 149 App. Div. 900 , 134 N. Y. Supp. 812 ), and where the right of action is transitory, as in the case at bar, it exists, not only where it arises, but in every place in which the proper parties for its. enforcement can be found (Leonard v. Columbia Steam Navigation Co., 84 N. Y. 48 , 38 Am. Rep. 491 ; Dennick v. Railroad Co., 103 U. S. 11 , 26 L. Ed. 439 ).

[2] The courts of this state have always enforced the rights of citizens acquired in another common-law state, because the necessary similarity of laws was conclusive evidence that the foreign law was not against the public policy of our state. So it has been generally held that where a statute, giving the cause of action in the state in which the accident happened, was similar to an existing statute in the state where the action was brought, that was evidence of the fact that the foreign statute did not conflict with the public policy of the latter state, and the action could be maintained. See Wooden v. Western New York & P. R. R. Co., 126 N. Y. 10 , 26 N. E. 1050 , 13 L. R. A. 458 , 22 Am. St. Rep. 803 ; Higgins v. Central New England, etc.,, R. R. Co., 155 Mass. 176 , 29 N. E. 534 , 31 Am. St. Rep. 544 ; Boston & Maine R. R. v. Hurd, 56 L. R. A. 193 , where many cases are collated and discussed in a discriminating note. See, also, Stewart v. Baltimore & Ohio R. R. Co., 168 U. S. 445 , 18 Sup. Ct. 105 , 42 L. Ed. 537 ; Northern Pacific R. R. v. Babcock, 154 U. S. 190 , 14 Sup. Ct. 978 , 38 L. Ed. 958 .

The rule governing the question of the enforcement, in the courts of New York, of a right of action arising under, or created by, a foreign statute, has been lately stated in these terms:

“In cases of other than penal actions, the foreign law, if not contrary to our public policy, or to abstract justice or pure morals, or calculated to injure the state or its citizens, shall be recognized and enforced here, if we

have j urisdietion of all necessary parties, and if we can see that, consistently with our own forms of procedure and law of trials, we can dd substantial justice between the parties." Zeikus v. Florida East Coast Railway Co., 138 N. Y. Supp. 478 (Appellate Division, Second Department, November, 1912, writing by Mr. Justice Carr).

How, within the liberal test above outlined, does the New Jersey statute offend our public policy? It is suggested that the decision in Ives v. South Buffalo Railway Co., supra, indicates or establishes a public policy in New York; against “workmen’s compensation acts.” The Court of Appeals, in the opinion in the Ives Case, certainly nowhere said, nor anywhere decided, that the general purpose and theory of the workingmen’s compensation movement, and the statutory recognition and advancement thereof, were against the public policy of the state of New York.

It is hardly fair to argue the existence of a general public policy, antagonistic to legislation, which aims to make the human wear and tear of production part of the producing cost, from a judicial determination that in one statute, relating to the subject, some unconstitutional feature was found. Error proverbially lurks in generalities, and I do not think there should, or can be, any such generalization from the specific decision in the Ives Case. That decision was that an employer cannot be subjected to liability, or in effect pénalized, unless he had violated some law or had been guilty of some fault, and that to impose a liability without regard to such basic principles was to take his property without due process of law. The evil which was pointed out in the statute considered in the Ives Case the New Jersey statute does not appear to present.

“The character of the duty owed by the master to the servant at common law is extended by the * * * act, but not so that the master is required in an action to respond in damages to liability without fault. Nothing can be recovered except damages for actual or lawfully imputed negligence.” Sexton v. Newark Dist. Telephone Co., 34 N. J. Law J. 368 , continued in 35 N. J. Law J. 8 .

In this case, which is said, in the publication above, to be a test case, the constitutionality of the law was upheld in an opinion which does not conflict with the reasoning in the Ives Case, and that construction should control in the courts of this state. Leonard v. Columbia Steam Nav. Co., 84 N. Y. 48 , 38 Am. Rep. 491 . Apparently it was—■

“to avoid the constitutional question * * * which is discussed in the Case of Ives * * * that the New Jersey Legislature adopted an elective principle, which has been largely followed in other states; that is, both employer and employe are presumed to have elected to have waived their common-law rights of actions and defenses, unless they have entered into a contract to the contrary, or unless either has given a notice in writing that he will not be bound by the provisions of the compensation act. New Jersey seems to have been the first state to have grasped and utilized this principle as a possible escape from the constitutional question raised in the Ives Case.” Bradbury’s Workingmen’s Compensation, pp. 156, 157.

The elective compensation provided by the New Jersey statute is based upon a contract implied from the neglect or failure of the parties to express a purpose at the time of their Contracting to rest upon

It has been doubted whether to consider the existence of a local statute, as the only evidence of a local public policy, does not unduly restrict the principle of comity, upon which principle the enforcement of the foreign law is based. 2 Wharton on Conflict of Laws (3d Ed.) 1118, and some-recognition of that view may perhaps be found in decisions wherein the absence of a local statute, prohibiting a matter, has been taken as evidence that the local public policy was not opposed thereto (Dammert v. Osborn, 140 N. Y. 30 , at page 43, 35 N. E. 407 ). In New York there is, however, more than the absence of local prohibition against contracting as to the quantum of compensation in cases of accident. What the New Jersey statute has provided may be done by implied contract, a New York statute has provided may bé done by express contract. Section 205, Labor Law (chapter 352, Laws 1910).

The present complaint alleges that the accident occurred solely by reason of the negligence of the defendant, consisting in the negligence of its employes. Since the action is based upon those provisions of ■the statute.by which the elective compensation is deemed agreed to, “without regard to the negligence of the employer,” the pertinence of this allegation is not apparent; but it serves to point out that under the New Jersey statute the fellow servant and contributory negligence defenses are abolished. This certainly is in accord with the public policy of New York. In the Ives Case the “fellow servant" rule and the “contributory negligence” rule were declared to be “nothing more” than common-law “doctrines” (201 N. Y. at page 289, 94 N. E. 431 , 34 L. R. A. [N. S.] 162, Ann. Cas. 1912B, 156), and the power and policy to limit-such were expressly affirmed and upheld. Chief Judge Cullen said: . •

“I concede that the Legislature may abolish the rule of fellow servant as a defense to an action by employé against employer. Indeed, we have decided that in upholding the so-called Barnes Act. Schradin v. N. Y. C. & H. R. R., 194 N. Y. 534 , 87 N. E. 1126 . I concede that the Legislature may also abolish as a defense the rule of assumption of risk and that of contributory negligence, unless the accident proceeds from the willful act of the employer.”

In addition there are existing statutes which further evidence this public policy of our state. For example, there is section 42a of the Railroad Law, which declares the acts of persons who were formerly regarded as fellow servants to be the acts of vice principals, and creative of liability for injury resulting. In Schweitzer v. Hamburg-American Line, 138 N. Y. Supp. 944 , the Sea Accident Insurance Law of the empire of Germany was upheld, in this forum, when presented defensively, as a bar to an action; Mr. Justice Kapper reaching that conclusion on the apparent authority of a prior phase of. the same case ( 149 App. Div. 900 , 134 N. Y. Supp. 812 ), and also by reasoning which

I conclude, therefore, that the complaint sets forth a good cause of action, of which the court has jurisdiction, and that the demurrer should be overruled with the usual leave, on payment of costs.