Kaufman v. American Youth Hostels, Inc.

• Decision Date: 15 October 1957
• Citation: 13 Misc.2d 8,174 N.Y.S.2d 580
• Parties: Jerome KAUFMAN, individually and as Administrator of the Estate of Lynn Kaufmann, deceased, Plaintiff, v. AMERICAN YOUTH HOSTELS, Inc., Defendant.
• Court: New York Supreme Court

Page 580

174 N.Y.S.2d 580

13 Misc.2d 8

Jerome KAUFMAN, individually and as Administrator of the Estate of Lynn Kaufmann, deceased, Plaintiff, v. AMERICAN YOUTH HOSTELS, Inc., Defendant.

Supreme Court, Westchester County.

Oct. 15, 1957.

William A. Hyman, New York City, for plaintiff.

Garvey & Conway, New York City, for defendant.

GEORGE M. FANELLI, Justice.

This motion, brought by plaintiff pursuant to Subd. 6, Rule 109 of the Rules of Civil Practice, to strike out two separate and distinct defenses because of legal insufficiency, presents many interesting questions concerning conflict of laws, charitable corporate immunity and construction of agreements of exemption from liability for negligence.

The action is one to recover damages for the death of plaintiff's 15 year old daughter, which occurred on July 29, 1956, while said infant, together with a group of other children, was engaged in a venture of climbing Mt. Hood, in the State of Oregon.

Defendant is admittedly a New York corporation and is engaged in the business of conducting groups of youths on trips and tours to places of historical and cultural interest in America and abroad. It is further admitted that plaintiff's daughter was, at the time of her death, a member of said group, for a valuable consideration paid to defendant by her plaintiff-father.

The complaint consists of two causes of action and is based on negligence. The first cause of action is brought pursuant to an Oregon statute (Section 30.010 of the Oregon Revised Statutes) which specifically gives a right of action to plaintiff in his individual capacity for the death of his daughter, and the second cause of action is brought pursuant to another Oregon statute (Section 30.020 of the Oregon Revised Statutes) which gives plaintiff, as administrator of his daughter's estate, a representative cause of action on behalf of her estate for damages not exceeding $20,000 including a recovery for funeral, burial, doctors, hospitals or nursing services for the decedent.

The answer is so worded that it is not too clear whether the defenses, which are now the subject of attack, apply to both causes of action or only the second cause of action. However, for the purpose of this motion, and the decision to be made herein the Court will consider that said critical defenses were intended to apply to both causes of action.

The first defense alleges (and the court on a motion such as this must assume the allegations to be true) 'that defendant is an eleemosynary institution and immune from liability.' The question to be decided at the outset, is whether the law of Oregon or this State governs the substantive rights and obligations of the parties to this lawsuit. The answer to this preliminary question is no longer debatable. Since the accident and death occurred in Oregon, the law of the lex loci (Oregon) and not the law of the forum (New York) governs unless our public policy forbids (which it does not) (Poplar v. Bourjois, 298 N.Y. 62, 80 N.E.2d 334; Benton v. Safe Deposit Bank, 255 N.Y. 260, 174 N.E. 648; Mencher v. Goldstein, 240 App.Div. 290, 269 N.Y.S. 846; Coster v. Coster, 289 N.Y. 438, 46 N.E.2d 509, 146 A.L.R. 702; New Amsterdam Cas. Co. v. Stecker, 1 A.D.2d 629, 152 N.Y.S.2d 879, affirmed 3 N.Y.2d 1, 163 N.Y.S.2d 626; Metcalf v. Reynolds, 267 N.Y. 52, 195 N.E. 681; Smith v. Clute, 277 N.Y. 407, 14 N.E.2d 455).

Turning to the law of Oregon, we find that in that State charitable or eleemosynary corporations do have immunity from tort liability (Landgraver v. Emanuel Lutheran Charitable Board, 1955, 203 Or. 489, 280 P.2d 301, 303). In said case, the Oregon Supreme Court was asked to re-examine the question of tort liability insofar as it applied to charitable institutions in Oregon and to adopt a new rule holding them liable for their negligent acts. However, the majority of the court was reluctant to adopt a new rule and while it recognized the fact that many courts of high repute in sister states have in the light of changed conditions, overturned the rule of immunity, expressly overruling their prior decisions in which the doctrine was recognized, nevertheless, felt that it was not yet ready to make the change. However, the court majority had this to say:

'We are divided in this court as to the proper course to be taken. Whatever a divided court may decide today may be changed tomorrow, if there happens to be a change in the personnel of the court, or a change of opinion on the part of members of the court as now constituted. The matter is of the highest importance to every charitable institution in Oregon * * *. In such circumstances, it seems clear that any change in the public policy of this state should be a matter solely for legislative determination.'

Needless to say, the dissenting opinion (concurred in by the Chief Justice) after reviewing the numerous states which in recent years have overridden the doctrine of immunity, held that the time had come when justice could be done in no other way than by overruling their earlier cases and aligning themselves with the prevailing modern authority.

Apparently, the said dissenting opinion, in referring to the prevailing modern authority regarding said immunity doctrine, had in mind the State of New York. It is now and has been the settled law of New York for more than 20 years that charitable corporations organized in New York are not immune for the torts of their servants because of the theory that the public and private donations that supported charitable institutions constituted a trust fund which could not be diverted. Sheehan v. North County Community Hospital, 1937, 273 N.Y. 163, 7 N.E.2d 28, 109 A.L.R. 1197; Dillon v. Rockaway Beach Hospital & Dispensary, 284 N.Y. 176, 30 N.E.2d 373; Bing v. Thunig, 2 N.Y.2d 656, 163 N.Y.S.2d 3.

In the light of such ostensible conflict of laws between Oregon and New York, a careful reading and analysis of the cases leads inescapably to the conclusion that the decisional law of Oregon, wherein immunity is granted, must perforce be restricted to Oregon corporations and not to foreign corporations such as the defendant in this case. The leading cases in Oregon (Hill v. President and Trustees of Tualatin Academy & Pacific University, 1912, 61 Or. 190, 121 P. 901; O'Neill v. Odd Fellows Home of Oregon, 1918, 89 Or. 382, 174 P. 148; Hamilton v. Corvallis General Hospital, Ass'n, 1934, 146 Or. 168, 30 P.2d 9; Gregory v. Salem General Hospital, 1944, 175 Or. 464, 153 P.2d 837; Landgraver v. Emanuel Lutheran Charitable Board, 1955, 203 Or. 489, 280 P.2d 301; and Ackerman v. Physicians and Surgeons Hospital, 1955, 207 Or. 646, 288 P.2d 1064, reversed on rehearing, 1956, 298 P.2d 1026, all involved corporate defendants who were organized under and by virtue of the laws of the State of Oregon. There does not appear a single Oregon case which has held that a foreign charitable corporation is immune from liability for tort, where, under the law of the State of incorporation the corporation is not granted immunity.

As far as New York is concerned, there seems to be a dearth of authority on the subject. However, the case of Heinemann v. Jewish Agricultural Soc., 178 Misc. 897, 37 N.Y.S.2d 354, 361, affirmed 266 App.Div. 907, 43 N.Y.S.2d 746, appears to be highly pertinent. In that case, the defendant was a New York corporation which maintained a farm in New Jersey. The plaintiff was injured while riding in an automobile owned by the defendant and operated by one of its employees. The court held that the plaintiff was an invitee to whom the defendant owed the duty of reasonable care and that this duty was violated by the negligent operation of the automobile. The remaining question was whether the defendant was immune from liability because it was a charitable corporation. The defendant contended that under the law of New Jersey a charitable corporation was not liable to its beneficiaries for damage occasioned by the torts of its servants and that the defendant was a charitable corporation and the plaintiff a beneficiary of the charity. The plaintiff, on the other hand, contended the defendant's liability to respond in damages for torts of its servants was to be determined by the law of the state of its incorporation, to wit, the State of New York, and that if the liability of the defendant was to be determined by the law of New Jersey, that the law of New Jersey does not grant immunity to charitable corporations organized under the law of a state which does not grant such immunity. The court held, in favor of the plaintiff, that the defendant (a charitable corporation organized under the laws of New York) was not immune from liability for a tort committed in New Jersey and said:

'There remains the question as to whether the New Jersey law grants immunity to charitable corporations for the torts of their servants if the law of the state of incorporation does not grant such immunity. The Court has had the benefit of very complete argument and research (referring to the status of the applicable law) from which it appears quite conclusively that the immunity referred to is granted by the Law of New Jersey to charitable corporations organized under the laws of that state. It likewise appears that in Kansas and California the immunity was extended to foreign corporations (Webb v. Vought, 127 Kan. 799, 275 P. 170; Young v. Boy Scouts of America, 9 Cal.App.2d 760, 51 P.2d 191), but it seems that in the place of incorporation of the charitable organization in each of those cases similar immunity was granted at the time (Hogan v. Chicago Lying-In Hospital and Dispensary, 335 Ill. 42, 166 N.E. 461; Bodenheimer v. Confederate Memorial Ass'n, 4 Cir., 68 F.2d 507). (Emphasis supplied.) * * * 'The sole decision which has been presented on behalf of the plaintiffs on this question is [In re] Prime's Estate, 136 N.Y. 347, 32 N.E. 1091, 1095, 18 L.R.A. 713, in which the New York Court of Appeals held that...