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Report No. 65

II. American Cases on Public Policy in Conflict of Laws

17.9. Public policy in relation to extra-State causes of action.-

Public policy is not necessarily identical with the current laws of the particular country. Judge Cardozo, in the famous Loucks v. Standard Oil Co., 1918 NY 99 (111): 120 NE 198 (201) cited by Laflar American Conflict of Laws, (1968), p. 105 observed that "we are not so provincial as to say that every solution of a problem is wrong because we deal with it "otherwise at home". In the Mertz v. Mertz, (1936) 271 NY 466: 3 NE 2d 597: 108 AIR 1120 (tort action by wife against husband; New York refused to enforce, though Connecticut, where the facts occurred, would give a cause of action); cited by Leflar American Conflict of Laws, (1968), p. 105. the New York court reverted to the old rule, after Cardozo was gone.

But, again recently, the New York Court of Appeal (Cardozo's Court), has re-established his enlightened hospitality to extra-State causes of action-causes of action which New York's substantive law would not have allowed in the first place. That was the case of Intercontinental Hotels ntercontinental Hotels Corp. v. Golden, (1964) 15 NY 2d 9 (13): 203 NE 2d 210 (212): 254 NYS 2d 527 (529) (Majority view), cited by Leflar American Conflict of Laws, (1968), p. 105 the New York action was on a cheque and several "I.O.U.'s" which the defendant (New York resident) had given in Puerto Rico, in return for money subsequently lost at play in the plaintiff's gambling casino there.

These gambling debts were valid under the Puerto Rican law, but the contracts involved would not have been valid in New York. Recovery was, nevertheless, allowed. Local public policy, as a ground for denying access to local courts, was not abandoned, but was restricted to transactions "inherently vicious, wicked or immoral, and shocking to the prevailing moral sense". Emphasis was placed on the idea that public policy, for this purpose, is to be discovered by the courts not so much from statutes or constitutions (law in the books), as from currently prevailing community attitudes.

17.10. American cases.-

In the case of Liberman (in re:), (1939) 18 NE 2d 658, cited in Bodenheimer Jurisprudence, (1967), p. 314 the New York Court of Appeal held that a condition in a trust arrangement, to the effect that the beneficiary should lose the right to the trust fund if he should contract a marriage without the consent of the trustees, was contrary to public policy. In Big Cottonwood Tanner Ditch Co. v. Moyle, 1945 Utah 197 (203) cited in Modenheimer Jurisprudence, (1967), p. 314. the Supreme Court of Utah made the following statement:-

"In view of the fact that Utah is an and state and the conservation of water is of first importance, it is with great hesitancy that we subscribe to any contention which would make it appear to be more difficult to save water. It has always been the public policy of this state to prevent the waste of water."

17.11. These cases will show the scope of public policy, and the emphasis placed on various considerations in the U.S.A.



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