Gantt, Matter of

• Decision Date: 07 June 1955
• Citation: 141 N.Y.S.2d 738,286 A.D. 212
• Parties: APPEAL of Ella Harper GANTT, Executrix of the Estate of R. B. Gantt, appearing specially, Appellant, In the Matter of the Application of R. B. Gantt, doing business under the name of Southland Supply Company, for a stay of arbitration between Felipe y Carlos Hurtado & Cia, Ltda., Managua, Nicaragua, Respondent, and Southland Supply Company, High Point, North Carolina.
• Court: New York Supreme Court — Appellate Division

Page 738

141 N.Y.S.2d 738

286 A.D. 212

APPEAL of Ella Harper GANTT, Executrix of the Estate of R. B. Gantt, appearing specially, Appellant, In the Matter of the Application of R. B. Gantt, doing business under the name of Southland Supply Company, for a stay of arbitration between Felipe y Carlos Hurtado & Cia, Ltda., Managua Nicaragua, Respondent, and Southland Supply Company, High Point, North Carolina.

Supreme Court, Appellate Division, First Department.

June 7, 1955.

Paul Derins, New York City, of counsel (Dwight, Royall, Harris, Koegel & Caskey, New York City, attys.), for appellant.

Eben C. Gould, New York City, for respondent.

Before PECK, P. J., and COHN, BREITEL, BASTOW and RABIN, JJ.

BREITEL, Justice.

Involved in this case is the question whether a foreign executrix may, in her official capacity, be compelled to arbitrate a dispute to which her decedent was a party. It is this court's view that Special Term had no power to so direct the foreign executrix.

Petitioner, a buyer of lumber prior to his death, and respondent, the seller, entered into contracts in 1946, containing a provision for arbitration in this state of any controversies or claims arising out of the contracts. When a dispute arose, because of the buyer's failure to supply a letter of credit, the seller demanded arbitration. The buyer, as petitioner, then instituted this proceeding, applying for a stay of arbitration and a trial by jury of the issue of fact as to the making and validity of the alleged contracts. The application was granted on condition that petitioner 'shall duly pay the fees required by law'.

Rather than comply with the condition of the order, petitioner moved for a permanent restraining order on the ground that the law of North Carolina, where the alleged contracts were made, prevented arbitration. Following a denial of this motion, petitioner successively and unsuccessfully appealed. 272 App.Div. 801, 71 N.Y.S.2d 892, affirmed 297 N.Y. 433, 79 N.E.2d 815, certiorari denied 335 U.S. 843, 69 S.Ct. 65, 93 L.Ed. 394. Although certiorari was denied by the Supreme Court of the United States in October 1948, no steps were taken by petitioner or, after his death, his executrix, to comply with the court's order which conditionally stayed arbitration. In July, 1952, petitioner, a domiciliary of North Carolina, died in that state. His executrix, a resident of North Carolina, was appointed by a court of that state. No ancillary letters have been issued by any court in this state and no asset of petitioner's estate is in New York.

The issue involved in this case has arisen as a result of a motion made by the seller to (1) substitute the executrix as petitioner in this proceeding; (2) dismiss this proceeding to stay arbitration; (3) vacate the stay of arbitration heretofore issued; and (4) direct the executrix to proceed to arbitration. The executrix, appearing specially, cross-moved to set aside service. Special Term granted respondent's motion in full and denied the cross-motion.

It has long been the law in this State that a foreign personal representative may not, in his official capacity, be substituted for a nonresident party who dies during the pendency of an in personam proceeding in a court of this State. McMaster v. Gould, 240 N.Y. 379, 148 N.E. 556, 40 A.L.R. 792; Helme v. Buckelew, 229 N.Y. 363, 128 N.E. 216; Neuberger v. Hart, 266 App.Div. 612, 44 N.Y.S.2d 490; 17th Annual Report of N.Y. Judicial Council [1951], p. 153 et seq. The only exception to this rele exists where the proceeding involves determination as to a res within the jurisdiction of the court. Thus, in the McMaster case, supra, where the court held that due process precludes the legislature from providing generally for the continuance of actions in personam against foreign personal representatives of deceased defendants, the court observed:

'The executor as individual and as an official is in the theory of law two persons. Even as to foreign executors, there must be a domicile or possession which gives to the res to be administered a situs in New York.' 240 N.Y. 379, at page 386, 148 N.E. 556, at page 558.

Applying these principles to the instant case, we are of the view that the foreign executrix could be given notice, as if a party, for the limited purpose of vacating the outstanding stay and dismissing the proceeding instituted by her decedent for stay of arbitration. It is so held because no liability of the estate or of the personal representative is at stake. Also, a court has power to dispose of a proceeding pending before it, and, if such limited substitution is required to effectuate that power, the personal representative may be thus substituted.

But, the court does not have power to direct the executrix to proceed to arbitration. In support of the contrary view it is contended that the arbitration proceeding itself may be treated as in the nature of a res. It is manifest, however, from the decisions that the term is confined to property or extrinsic status cognizable in law. McMaster v. Gould, supra; Helme v. Buckelew, supra. Cf. Kirkbride v. Van Note, 275 N.Y. 244, 9 N.E.2d 852, 112 A.L.R. 243.

It is also argued that, if the decedent has consented to submit the controversy to arbitration, his executrix should be in no position to do that which the decedent himself cannot do, namely, repudiate the agreement to arbitrate in New York. There is no merit to this argument. In the first place, it is doubtful that even the executrix herself can consent to being sued in any jurisdiction other than the state of her appointment. Burrowes v. Goodman, 2 Cir., 50 F.2d 92, 77 A.L.R. 249, certiorari denied, 284 U.S. 650, 52 S.Ct. 30, 76 L.Ed. 551; see, generally, Goodrich, Conflict of Laws [3rd ed. 1949], pp. 562-566. Secondly, we are here dealing with the Constitutional power of the state to deal with a person who has no cognizable status in New York. The administration of the foreign estate is subject solely to the jurisdiction of the court which appoints the foreign representative and another state may not interfere with that administration. McMaster v. Gould, supra; Goodrich, Conflict of Laws, supra.

Finally, it is argued that this court, in order to prevent injustice, should direct the executrix to arbitrate. Cited for this proposition, however, is authority which allows suits by foreign personal representatives on the ground that principles of comity permit such suits. See, e. g., Helme v. Buckelew, supra, 229 N.Y. at pages 372-372, 128 N.E. at page 219. Where, to prevent failure of justice, suit against the foreign personal representative has been allowed, it has involved a res within the court's jurisdiction. See Kirkbride v. Van Note, supra; Neuberger v. Hart, supra. These cases are, however, inapplicable, for the reason that there no liability was sought to be imposed on the estate, or enforced against its assets generally, through the personal representative. Cf. Helme v. Buckelew, supra; see Neuberger v. Hart, supra.

Cases involving enforcement of agreements for arbitration in a foreign state without personal service on the nonresident are wholly irrelevant. They turn on consent by a nonresident or foreign corporation to jurisdiction in personam, always a basis for the exercise of judicial power ower the person. An executrix, and, in a parallel case, an administrator or the public administrator, is not an agent of a deceased person. Such consent would not bind the executrix. An executrix is merely the nominee, who, if qualified, is appointed by the court of probate jurisdiction to administer the decedent's assets on behalf of the court, in accordance with the wishes of the decedent, following the will, to the extent permitted by law. Her authority is derived from the court, and the representative capacity stops at the borders of the state of jurisdiction. Helme v. Buckelew, supra. So, even where there are assets in this state, ancillary letters must be obtained and the foreign representative or another appointed to administer those assets. Surrogate's Court Act, §§ 159-166.

To call an arbitration proceeding, or a proceeding to compel or stay arbitration, abated by death of one the parties, a res upon which due process may be depended to bring in the personal representative of the deceased, is the indulgence of the barest fiction. But, even if one were to view it as a res, it is not one to which the official capacity of the personal representative in probate proceedings may attach. That capacity attaches only to the assets. McMaster v. Gould, supra. Jurisdiction as to a res extends only to the res and, to that limited extent, may bind those who have a titular or possessory right to the res, but not one who is a stranger to it. Thus, the fundamental rule then becomes operative, namely, that the power of the court, when there is only in rem jurisdiction, is limited to execution against the res, although binding on all. Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565. If the arbitration proceeding is a 'res', all the court can do is to execute against it--there woul be no status and no property that would survive it. That would be of little avail to the respondent here when he seeks to collect on his claim in North Carolina out of the assets situated there. If a court should confirm the award and grant a judgment in personam, it would be void and not entitled to full faith and credit.

To say that to compel arbitration in this case is not to force the executrix to come into the jurisdiction but to prevent her from forsaking and repudiating a jurisdiction invoked by her accident, does not progress the analysis of the problem. The fact is that the executrix is not here. Were she to come physically as an individual, she still would be here without official capacity. McMaster v. Gould, supra. The courts of this state just do not have the power, certainly in the absence of consent, and maybe even with consent, to direct in...