State: New York
Volume: 309
Term: 1955-1956
Jurisdiction(s): New York
Source: https://static.case.law/ny/309.pdf

Sua Mopzs, Iwc., et al., Respondents, v. Louis C. Conzy,
Appellant.

Argued March 10, 1955; decided June 9, 1955.

sw

Frank Kreitzberg for appellant. I. With respect to the unre-
ported sales, the monthly statements were not and could not
become final, conclusive and binding accounts stated. (Bailey
v. Robinson Mfg. Co., 270 App. Div. 986; Corr v. Hoffman, 256
N. Y. 254; Rodkinson v. Haecker, 248 N. Y. 480; Matter of
Bartlett, 272 App. Div. 1068; Dainirey v. Evans, 148 App. Div.
275.) II. The record presents an issue of fact with respect to
the action on the check (fifth cause of action), and summary
judgment was therefore wrongfully awarded.

Jacob B. Lindner and Henry B. Selkowe for respondents.
I, Appellant’s affidavit in opposition to the motion for sum-
mary judgment is devoid of evidentiary facts creating any issue
which would justify a trial. (Anderson v. City of New York,
258 App. Div. 588; Dodwell & Co. v. Silverman, 234 App. Div.
362.) II. The retention by appellant of the statements rendered
to him monthly by respondents, without any objection, is tanta-
mount to an account stated. (Bailey v. Robinson Mfg. Co., 270
App. Div. 986; Corr v. Hoffman, 256 N. Y. 254; Rodkinson v-
Haecker, 248 N. Y. 480; Matter of Bartlett, 272 App. Div. 1068;
Daintrey v. Evans, 148 App. Div. 275; McClain v. Schofield,
74 Hun 487, 148 N. Y. 733; Bradley v. McDonald, 157 App. Div.
572, 218 N. Y. 351.) III. The parties by their agreement estab-
lished ‘‘ the law of the case’’. (Matter of New York, Lacka-
wanna & Western R. R. Co., 98 N. Y. 447; Morse v. Morse Dry
Dock & Repair Co., 249 App. Div. 764; Faruolo v. Faruolo, 253
App. Div. 750; Matter of Malloy, 278 N. Y. 429; Buda v. State of
New York, 278 App. Div. 424; Mann v. Simpson & Co., 286 N. Y.
450; Matter of Whalen v. Corsi, 279 App. Div. 1118; Pines v.
Beck, 300 N. Y. 181; First Nat. Bank of East Islip v. National
Sur. Co., 228 N. Y. 469; Halsted v. Globe Ind. Co., 258 N. Y. 176;
Manson v. Curtis, 223 N. Y. 313; Central Union Trust Co. of
N. ¥. v. Trimble, 255 N. Y. 88.) IV. The Court of Appeals will
not pass on issues not raised in the court below. (Maloney v.
Hearst Hotels Corp., 274 N. Y. 106; Flagg v. Nichols, 307 N. Y.

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96; Matter of City of New York [Northern Blwd.], 270 N. Y. 652;
Matter of City of New York {Hast Riv. Drive], 264 App. Div.
555, 298 N. Y. 843.)

Dzsmonp, J. Defendant, from October, 1949, to December,
1951, was employed by plaintiffs as a salesman, his agreed com-
pensation being 5% of his ‘‘ net sales’. He was, by the terms
of the written employment agreement, to receive $200 per week
as ‘‘ an advance against earnings ’’, to be applied against com-
missions earned. Any excess of advances over actual commis-
sions earned was to be repaid by defendant to plaintiffs on
demand. During the period of defendant’s employment, the
total of those weekly advances to defendant, plus moneys bor-
rowed by defendant from plaintiffs and not repaid, exceeded
the amount, as computed by plaintiffs, of defendant’s commis-
sions. When defendant failed to pay that alleged excess, plain-
tiffs sued him therefor, the complaint demanding judgment, also,
for the amount of a dishonored check, and for damages for
alleged breaches of contract. Defendant retaliated with a suit
against plaintiffs for $10,000 for commissions allegedly due him
and unpaid. The two suits were then consolidated under the
above title.

Plaintiffs’ alleged causes of action for breach of contract have
been severed and are not involved in this appeal. The Appellate
Division has granted plaintiff's’ motion for summary judgment
in their favor on the other counts of their complaint (that is, for
the alleged overpayments and the dishonored check), and dis-
missing defendant’s complaint. We concur in that disposition.

As to plaintiffs’ fifth cause of action (dishonored check)
defendant exhibited no defense and summary judgment was
clearly indicated. As dispositive of the other (overpayment)
counts, plaintiffs and the Appellate Division relied on this pro-
vision of the agreement by which plaintiffs hired defendant:
‘¢ We [plaintiffs] will render to you statements monthly showing
business done and re-orders received from your accounts and
unless you submit objections or corrections to such statements
within 10 days from the date when they are rendered to you,
the same shall be deemed conclusive and binding upon both of
us and shall form the basis upon which computation of your
compensation shall be made.”’

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During his employment defendant received such statements
monthly (and a final statement when his employment ended),
and to none of those statements did he at any time submit any
objection or correction. Never did he assert that the statements
were in any manner incorrect, until plaintiffs sued him in March,
1952, three months after he had stopped working for plaintiffs.
All that defendant now avers is that he is entitled to an addi-
tional sum for commissions on sales made by him and not cred-
ited to him by plaintiffs. Plaintiffs swear that they paid him
in full (and overpaid him) and that, for various reasons, the
additional sales described by defendant in his countersuit were
not subject to commissions. Defendant disputes that latter
assertion but by so doing he, we hold, is raising a contention
which is not available to him under his stipulation, above quoted,
that the monthly statements were to be ‘‘ conclusive and binding
upon both parties’’. Defendant is attempting to do exactly
what that agreement says he may not do.

Under Rodkinson v. Haecker (248 N. Y. 480, 485) and cases
cited therein, and Corr v. Hoffman (256 N. Y. 254), these accounts
as so stated between these parties become binding contracts and
are absolutely enforcible as such unless fraud, mistake or other
equitable considerations be shown such as to make them
improper to be enforced (Rodkinson opinion, p. 285). There are
no such equitable considerations here. There was no fiduciary
relationship in this arms-length bargaining. There is nothing
in the record to show that defendant could not have investigated,
or was prevented from investigating, the facts as to sales made
by his employers. When he failed so to do, and received and
held the accounts without making objection during the time
specified or at any other time, he assented to the statements, and
foreclosed himself from later taking the position that the
accounts were not correct. Otherwise, the contract would be
without purpose or effect.

The judgment should be affirmed, with costs.

Bunks, J. (dissenting). The defendant, a salesman calling
on large national accounts as an employee of the plaintiffs, con-
tends that the plaintiffs are guilty of mistake, misunderstanding
or overreaching in failing to include in the monthly statements
rendered to the defendant pursuant to the agreement, the sales

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to, and reorders from, his accounts in an amount of about
$180,000. The plaintiffs concede that the sales and reorders
were not included in the monthly statements rendered to the
defendant, but allege that the defendant was not entitled to
commissions thereon in that (1) the orders were not obtained by
the defendant, (2) that the orders were obtained from depart-
ments which were parts of some of the defendant’s accounts
which the defendant never solicited but were solicited by other
salesmen in the employ of the plaintiffs, and (3) that buyers
employed by defendant’s accounts gave their orders to other
salesmen in the employ of the plaintiffs. The agreement does
not set forth any such exceptions or conditions. It states:
“We will render to you statements monthly, showing business
done and re-orders received from your accounts ’’.

There can be no doubt that the conflicting claims present
questions of fact which in the usual case would warrant the
denial of summary judgment. The question presented for deter-
mination is whether the court should apply the legal presump-
tion resulting from the rendition and retention of monthly
statements without objection.

It is well known that the general rule is that ‘‘ A party will
not be allowed to impeach an account stated, on the ground of
fraud or mistake, if he assented to it with full knowledge of
the facts and circumstances attending it, or if, with ample means
of knowledge at hand, he failed to ascertain the facts.’’
(1C. J.8., Account Stated, § 51, subd. d, p. 731.) In the cases
of Rodkinson v. Haecker (248 N. Y. 480, 489, 490), a suit between
attorney and client, and Corr v. Hoffman (256 N. Y. 254, 259),
a suit between partners, the person receiving the accounts had
equal power or control over the books of account or had personal
knowledge of the services rendered. Therefore, this court prop-
erly held that the accounts stated were conclusive and binding
contracts. In this case, however, the defendant was one member
of a sales force, not a person with power or control over the
books of account or one in a position to have personal knowledge
of all the transactions between his employer and the large
national accounts. He obviously could not verify the statements
from the books and accounts of the customers. Consequently,
he did not have the means at hand necessary to ascertain the
facts. With just such circumstances in mind, this court held

in Rodkinson v. Haecker (supra) that a party may plead and
prove equitable considerations that may show that an account
stated should not be enforced. The agreement is evidence that
the clear intention of the parties was that the plaintiffs would
render statements showing all sales to, and all reorders from,
the defendant’s accounts. Since the plaintiffs conceded that
certain sales of plaintiffs’ goods to the defendant’s accounts
were not included in the monthly statements for reasons now
disputed, the defendant is entitled to have the questions of fact
disposed of at a trial. ;
Therefore, the judgment to the extent that it dismisses the
defendant’s complaint and directs judgment in the plaintiffs’ —
favor on the first and second causes of action should be reversed,
and affirmed as to the fifth cause of action.

Dyz, Fut, Frosssen and Van Voorsis, JJ., concur with
Dzsmonn, J.; Burxs, J., dissents in an opinion in which Conway,
Ch. J., concurs.

Judgment affirmed.
: Es

Tux Pzorrm or tue Starz or New Yorn, Appellant, v. Joun
Dowanvun, Respondent.

Argued April 26, 1955; decided June 10, 1955.

Edward S. Siler, District Attorney (Frank Di Lalla of
counsel), for appellant. A prima facie case was presented to the
grand jury. (People v. Glen, 173 N. Y. 395; People v. Sexton,
187 N. Y. 495; People v. Bob, 233 App. Div. 94; People v. Masiano,
253 App. Div. 454; People v. Peary, 249 App. Div. 851; People
vy. Viola, 264 App. Div. 38; People v. Toland, 217 N. Y. 187;
People v. Friedman, 149 App. Div. 873; People v. Galbo, 218
N. Y. 283.)

No appearance for respondent.

Fup, J. The evidence contained in the grand jury minutes
would justify a finding by a trial jury that defendant knowingly
aided and abetted an accomplice in committing the burglary
and the stealing of certain merchandise from a factory, as
charged in the indictment. That defendant’s accomplice actually
effected an entry into the burglarized premises after all of its
doors and windows had been closed and locked and that he
handed stolen merchandise through the door to defendant, who
apparently stood outside, is sufficient to support the conclusion
that there was the requisite breaking and entry to spell out the
crime of burglary (Penal Law, § 404, subd. 1).

It may well be that defendant did not, as he claims, intend
to commit a theft and it is possible that he may successfully
urge some other defense. However, a court may not accept
defendant’s contention as fact; any defense that he may have
must be offered at the trial for the appraisal and decision of
the jury. A court has no alternative but to deny a motion to
set aside an indictment on the ground that there was insufficient
evidence before the grand jury, when that body has acted upon
evidence sufficient, ‘‘ if unexplained or uncontradicted ’? (Code
Crim. Pro., § 258), to warrant a conviction by the trial jury.

The order of the Appellate Division should be reversed and
the motion to dismiss the indictment denied.

The orders should be reversed and the indictment reinstated.

Conway, Ch. J., Desmonp, Dyn, Frozssen, Van Voornis and
Burxa, JJ., concur.

Orders reversed, ete.

PC
In the Matter of the Claim of Trmoray Duntzavy, Appellant,
against Wasp, Conneuiy, Szntor & Paumur et al., Respond-
ents. Worxmsn’s Compznsation Boarp, Respondent.

Argued April 25, 1955; decided June 10, 1955.

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Louis Mendelson and William Doblin for appellant. I. The
compensation referee’s decision and award to claimant was
correct in law and should not have been reversed by the board.
(Matter of Emslie v. Fuller Co., 277 App. Div. 815.) IL. Total
disability under the Workmen’s Compensation Law is not limited
in meaning to a medical disability. (Matter of McCann v. Walsh
Constr. Co., 282 App. Div. 444; Matter of Glavy v. Bethlehem
Steel Co., 271 App. Div. 906, 296 N. Y. 998, 271 App. Div. 1040,
298 N. Y. 594; Matter of Duebel v. Buffalo Pottery, 278 App.
Div. 1030, 283 App. Div. 542; Matter of Higgins v. August
Krageise, Inc., 281 App. Div. 907; Matter of Kopec v. Buffalo
Brake Beam-Acme Steel & Malleable Iron Works, 304 N. Y. 65.)

Albert P. Thill for Walsh, Connelly, Senior & Palmer and
another, respondents. I. Substantial evidence supports the
board’s decision herein appealed from. (Matter of Dennison
v. Peckham Road Corp., 295 N. Y. 457.) II. The state of total
disability under the Workmen’s Compensation Law is a factual
question to be determined by the board on all the facts. (Lee v.
Minneapolis Si. R. R., 230 Minn. 315; Elliott v. Gooch Feed,
147 Neb. 809; Berg v. Saddler, 235 Minn. 214; National Fuel v.
Arnold, 121 Col. 220; Kuhnle v. Department of Labor, 12 Wn. 2d
191; Cardiff v. Hall, 1 K. B. 1009; Cornett-Lewis v. Day, 312 Ky.
221; Matter of Slawinski v. Williams & Co., 298 N. Y. 546; Matter
of Cole v. Saranac Lake Gen. Hosp., 282 App. Div. 626.)

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Dusmonp, J. The question of law is this: may a workman’s
compensation claim for total disability from silicosis be denied
as against his latest employer in a dust-exposure employment,
because of expert testimony that he had become, medically,
totally disabled while working for a different employer, some
two years earlier? The evidentiary facts are not disputed.
Claimant’s work since about 1923, as a sandhog, had subjected
him to various exposures of silica dust. In March, 1950, while
so employed by an employer other than this respondent, he
entered a hospital for treatment for thrombophlebitis, but a
routine chest X ray revealed the presence, or probable presence,
of tuberculosis and silicosis. There is no proof that claimant
was then told that he was totally disabled or unable to work at
his regular trade. After his discharge from the hospital,
claimant worked as a lock tender and watchman until October,
1951. In December, 1951, he applied to respondent for work
as a sandhog and, after examination by respondent’s physician,
was so employed at the regular duties of a sandhog on 28 days
between December 10, 1951, and February 12, 1952, earning a
total of $721. On the latter date he had to give up work per-
manently, and it is not disputed that he has since been totally
and permanently disabled. His claim against respondent was,
however, dismissed on a finding by the board that he had become
totally disabled, from silico tuberculosis, before he had begun
to work for respondent. That finding was based on the testi-
mony of a ‘specialist called by the board as its impartial
examiner. That physician, after examining the X rays of
claimant’s chest taken at the hospital in March, 1950, gave it
as his opinion that claimant at that time was totally disabled,
“¢ medically ’? speaking.

The Appellate Division, treating as one of fact the board’s
finding that claimant was totally disabled in March, 1950,
affirmed the decision. Thus, we have this incongruous result:
a worker, when finally laid low by an occupational disease, is
denied compensation because he was really, although without
his own knowledge, totally disabled long before, even though
he continued working at the same hazardous job. We think a
proper application of the statutes, to the facts as found, dictates
a different result,

ae 1

The board’s fact findings, read against the background of
the proof, may be thus summarized: claimant, after being harm-
fully exposed to dust in the latest as well as in his earlier
employments, and having obtained this latest job without will-
fully or falsely misrepresenting his previous physical condition,
was forced, in February, 1952, to leave that employment because
of advanced silico tuberculosis, but he had in fact become totally
disabled (medically) before beginning to work for this employer
in December, 1951.

On its face, the first sentence of section 44-a of the Work-
men’s Compensation Law (one of a group of enactments in
1947 as to dust disease compensation) applies directly and
immediately to this case. The sentence reads: ‘‘ The employer
in whose employment an employee was last exposed to an
injurious dust hazard shall be liable for the payments required
by this chapter when disability or death of the employee shall
be due to silicosis or other dust disease ’’. Respondent counters
with a reference to sections 38 and 42, which say that disable-
ment from an occupational disease shall be treated as the hap-
pening of an accident and that ‘‘ the date of disablement shall
be such date as the board may determine on the hearing of
the claim.’’ The board, says respondent, has fixed the date of
total disablement here, and that is the end of it. We do not
think it is as simple as that. Recognizing the ‘‘ progressive
character ’’ and ‘‘ prevalence * * * in basic industries ’’
of silicosis (see Govenor Dewey’s message, N. Y. Legis. Ann.,
1947, p. 211), the Legislature has given unusual care and special
treatment to the question of workmen’s compensation for
sufferers from dust diseases. No compensation at all is pay-
able for partial disability from such ailments (Workmen’s Com-
pensation Law, § 39; Cifolo v. General Elec. Co., 305 N. Y.
209). When a worker becomes totally unable to work, the
compensation is paid in the first instance by his latest employer’s
insurance carrier but, after 260 weeks, that carrier is reim-
bursed from a ‘‘ Special Disability Fund’? (Workmen’s Com-
pensation Law, § 15, subd. 8, par. [ee]; § 44-a). Tying together
those associated enactments, we think that the Legislature
meant this: because of the slow and insidious progress of dust
diseases, it is impractical or impossible to pay compensation

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therefor until disability finally and actually becomes total, but
when that time comes, an award must go against the latest
employer (or his carrier) with reimbursement to the latter,
from a special fund, after five years. Such was the Legisla-
ture’s method of seeing to it that the worker, when at last he
must quit work forever, is not deprived of compensation which,
by a rough formula, is charged against the total of insurance
carried by all employers in such harmful employments.

In other situations, it may be proper to hold that actual
subsequent work does not forbid a finding of earlier total dis-
ability. But in silicosis cases, as it seems to us, the Legisla-
ture must have intended that no compensation be paid until
actual inability to work, and that it then be awarded against
the latest employer. Protection to employers against frauds
is furnished, to some extent, by section 48 of the act which denies
compensation to an employee who, at the time of his employ-
ment, ‘‘ wilfully and falsely represents in writing that he has
not previously suffered from the disease which is the cause of
disability or death’. But, as the board held, section 43 does
not apply here, since, although there is some testimony that
claimant signed a form in which his previous ailments were
omitted from the answers, the board apparently considered
that such omission was, if inaccurate, not willfully false. That
conclusion of the board was justified on this record since there
is nothing to show that claimant, at the end of his 1950 hospi-
talization, knew or learned any more than that he had “ a touch
of silicosis ’? and should be X-rayed regularly. Our conclusion
is that the board’s findings of fact should have led not to a
dismissal of the claim, but to an award against these respondents.

The order appealed from should be reversed, with costs in
this court and in the Appellate Division, and the matter remitted
to the Workmen’s Compensation Board with directions to make
an award against the respondent herein.

Conway, Ch. J., Dyz, Fun, Froussan, Vaw Voornis and Burks,
JJ., concur.

‘Order reversed, ete. RN

In the Matter of the Arbitration between Princnton
Rayon Corp., Appellant, and Gayvuny Mua Corporation,
Respondent.

Argued April 20, 1955; decided June 10, 1955.

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Martin N. Whyman, Frederick EH. M. Ballon and Henry
Wimestine for appellant. I. The court below erred in that it
misconceived the scope of the authority vested in it by section
1450 of the Civil Practice Act. II. The agreement to arbitrate
controversies, rather than to submit them to the courts for deter-
mination, should not be lightly construed. (Blossom v. Dodd,
43 N. Y. 264; Klar v. H. & M. Parcel Room, 270 App. Div. 538,
296 N. Y. 1044; Dery v. Blate, 209 App. Div. 467, 239 N. Y. 203;
Matter of Lehman v. Ostrovsky, 264 N. Y. 180; Matter of Hagar
Constr. Corp. v. Ward Foundation Corp., 255 App. Div. 291;
Matter of Tanenbaum Teatile Co. v. Schlanger, 287 N. Y. 400;
Matter of Albrecht Chem. Co. [Anderson Trading Corp.], 298
N. ¥. 437; Matter of Arthur Philip Export Corp. v. Leathertone,
Inc., 275 App. Div. 102; Matter of Pavia & Co. [Fulton Co. Silk
Mills], 284 App. Div. 391.)

Melwin Liebowitz, Aaron Rosen and Harold V. Kennedy for
respondent. I. A contract to arbitrate may be accepted in any
way provided by the parties. (Matter of Helen Whiting, Inc.
[Lrojan Textile Corp.], 807 N. Y. 360.) II. Princeton has not
set forth evidentiary facts to raise a substantial issue as to the
making of the contract. (Matter of Levy [Hirsch], 271 App. Div.
431, 296 N. Y. 837; Matter of Finsilver, Still & Moss v. Goldberg,
Maas & Co., 253 N. Y. 382; Matter of Kramer & Uchitelle
[Eddington Fabrics Corp.], 288 N. Y. 467; Matter of Local 853,
Retail Furniture € Floor Covering Employees Union, R. W. D.
8.U., C.I. O. [Zimmerman], 281 App. Div. 681; Matter of Level
Export Corp. [Wolz, Aiken & Co.], 305 N. Y. 82.)

Dyan, J. In this proceeding to stay arbitration, a substantial
issue of fact is presented as to the making of an agreement to
arbitrate, which should not be determined on affidavits but after
a trial in the usual manner (Civ. Prac. Act, § 1450; Matter of
Siracusa v, 421-425 W. 54th St. Corp., 237 N. Y. 572). The inten-

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tion to arbitrate must be clearly expressed (Matter of Riverdale
Fabrics Corp. [Tillinghast-Stiles Co.], 306 N. Y. 288).

The order of the Appellate Division and that of Special
Term should be reversed, with costs in this court and in the
Appellate Division, and motion to stay arbitration granted,
without prejudice to an appropriate trial of the issue of the
making of an agreement to arbitrate pursuant to section 1450
of the Civil Practice Act.

The order of the Appellate Division and that of Special Term
should be reversed, with costs in this court and in the Appel-
late Division, and the matter remitted to Special Term for
further proceedings in accordance with the opinion herein.

Conway, Ch. J., Fuip, Frozssen, Van Voorsts and Burs,
JJ., concur with Dvz, J.; Dusmonp, J., dissents and votes to
affirm.

Orders reversed, ete.
PC
In the Matter of Anam MoQuman et al., Respondents, against
Joszpx G. Scuzcuter et al., Constituting the Municipal Civil
Service Commission of the City of New York, Appellants,
and James Tusman et al., Intervenors-Appellants.

Argued April 18, 1955; decided June 10, 1955.

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Peter Campbell Brown, Corporation Counsel (Anthony Cur-
rert and Seymour B. Quel of counsel), for appellants. As
returning disabled veterans, intervenors were entitled to an
absolute constitutional preference over all veterans and non-
veterans on the original officer eligible list. The form this
preference took was properly the grant of retroactive seniority
eredit dating back to the date when a nonveteran was appointed
from that list after the intervenors were inducted into military
service. The commission’s determination to correct its original
error was not only proper, but required. (Matter of Farrell

v. Watson, 279 App. Div. 376, 304 N. Y. 630; Matter of Cotter
v. Watson, 282 App. Div. 292, 306 N. Y. 681.)

Leo Brown for intervenors-appellants. Inasmuch as nonvet-
erans had been appointed as correction officers from the original
eligible list while intervenors-appellants were in military service,
intervenors-appellants, as disabled veterans, are entitled to
retroactive seniority credit for promotion from the date when
the first nonveterans were appointed after their induction. The
determination of the municipal civil service commission grant-
ing them such seniority credit was, therefore, entirely proper.
(Matter of Cotter v. Watson, 282 App. Div. 292, 306 N. Y. 681;
Matter of Farrell vy. Watson, 279 App. Div. 376, 304 N. Y.
630; Matter of Carey v. Morton, 297 N. Y. 361; Matter of Bate-
mam v. Marsh, 188 Misc. 189, 271 App. Div. 813, 296 N. Y. 849;
People ex rel. Weinte v. Burch, 79 App. Div. 156; People ex rel.
Qua v. Gaffney, 142 App. Div. 122.)

Paul Windels and John K. Clark, Jr. for respondents.
I. Under the Military Law (§ 246 [now § 243], subd. 7), inter-

18 rere
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venors were not entitled to retroactive seniority credit as
“ officers’. IL. Matter of Farrell v. Watson (279 App. Div.
376, 704 N. ¥. 630) did not change the statutory rule. (Matter
of Kiapp v. Duffey, 169 App. Div. 794; People ex rel. Robesch v.
Presi tent of Borough of Queens, 190 N. Y. 497; Matter of Carey
v. Morton, 297 N. Y. 361; Matter of Goldberg v. Morton, 299 N. Y.
559; Watter of Cotter v. Watson, 282 App. Div. 292, 306 N. Y.
681.) III. Intervenors, because of lack of three years’ seniority
or exnerience, were not eligible for the 1947 promotion examina-
tion. IV. Intervenors were granted their constitutional rights
to priority in appointment as ‘‘ officers’. Under any cir-
cumstances, that question does not affect this issue.

Dusmonp, J. Respondents-appellants, being the New York

_ City municipal civil service commission, and intervenors-
respondents-appellants Tubman, Judge and La Courte, appeal
from a reversal, on the law, by the Appellate Division, First
Department, of an order made at Special Term dismissing the
proceeding. The Appellate Division’s order grants the applica-
tion of petitioners-respondents and, accordingly, directs the
municipal civil service commission to cancel a determination
made by that commission in February, 1954, which commission
determination, thus cancelled, had granted retroactive seniority
credit to appellants Tubman, Judge and La Courte on a June,
1953, civil service promotional eligible list for the position of
captain in the New York City departraent of correction. The
Appellate Division order further directed the commission to rein-
state an earlier determination by the commission which had
granted seniority credit to Tubman, Judge and La Courte, as of
the date of their actual first employment only, in the city correc-
tion department. All three of these intervenors, as well as the
three petitioners, were successful in 1948, before any of them
went into military service and before any of them were in
public employment, in passing an open competitive examina-
tion for the position of correction officer in the New York City
department of correction, a position of lower rank in that depart-
ment than the position of captain for which they are contending
here. All of the petitioners-respondents (McQuillan, Jones
and Lance) passed higher on that list than did any of the
intervenors (Tubman, Judge and La Courte). Before any

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of the intervenors could be reached for appointment as correction
officers from the list, all three intervenors went into military
service and, eventually, all three intervenors were honorably
discharged on various dates in 1944, 1945 and 1946. After their
discharges, each of the intervenors was duly certified as a dis-
abled veteran. In October, 1946, all three intervenors were
appointed from the list as officers. Those appointments were
made when, and only when, the respective names of intervenors
were reached in regular numerical order on the list. Previously,
and while intervenors had been in military service, a number
of nonveterans and one nondisabled veteran had been appointed
from the list in regular numerical order. In January, 1947,
after each of the intervenors had held the position of officer
for about three months, the municipal commission advertised a
promotional examination for captain in the same department
to be held in June, 1947, the eligibility requirements including
at least three years of service as officers, which requirement, of
course, none of the intervenors could actually meet. When these
intervenors filed applications to take the promotion examination
they were declared by the commission to be ineligible therefor,
since they had not served the required three years as officers.
However, intervenors had previously claimed, and continued
and still continue to claim, that they were, in fact, eligible to
take that promotion examination under the provisions of the then
section 246, now section 243, of the Military Law which, in
subdivision 7, says, in effect, among other things, that any person
whose name is on any eligible list shall, while on military duty,
retain his rights and status on such list. Subdivision 7 goes
further, too, and says that if any such person is reached for
certification while on military duty, his name shall be placed on
a special eligible list in the order of his original standing, and
that, on his request, his name shall remain on such special eligible
list for two years after termination of military duty, and that,
when and if appointed, he shall, as to seniority credit, ‘‘ be
deemed to have been appointed on the earliest date upon which
any eligible, who was the lower on such original eligible list,
was appointed ’’ (note the word ‘‘ lower ’’, the meaning of which,
on these particular facts, is really our problem here). Inter-
venors say (and Special Term and the dissenters in the Appel-
late Division agreed) that since, as disabled veterans, they were

20 eee
Lenses

entitled retroactively to an absolute preference at the head
of the original officer’s list, they therefore should have been
treated in all respects as if they were at the top of that earlier
eligible list, including treatment as if they had been appointed
from that list at the time of the first appointment of any non-
veteran therefrom.

After, as aforesaid, the municipal commission had refused to
permit intervenors to take the 1947 promotional examination
for captain on the ground that they did not have three years’
experience and were not entitled to credit for such, that promo-
tional examination was held without the participation of these
intervenors. However, five years later, in June, 1952, this
court handed down Matter of Farrell v. Watson (304 N. Y. 630,
affg. 279 App. Div. 376) to which reference will be made here-
after. Thereupon, the commission, considering that the Farrell
decision constrained it so to do, reconsidered and amended its
previous determination and granted to intervenors Tubman,
Judge and La Courte retroactive seniority back to certain dates
in April and May, 1944, on which dates the first nonveterans had
been appointed as correction officers from the aforesaid eligible
list after intervenors had gone into service.

After the commission had thus amended its earlier determi-
nation and had given intervenors the retroactive seniority
they demanded, the commission, since it had prevented inter-
venors from taking the promotional examination in 1947, con-
sidered that it was its duty under section 243 of the Military
Law (supra) to set up a special examination for these inter-
venors, and others in similar position, and the commission did
so. Actually, the commission did not set up a separate special
military examination for these intervenors but it directed that
the 1953 promotion examination, which these intervenors had
taken and passed, be treated and considered as a special military
examination as of 1947, on the ground that the commission should
have permitted intervenors to take the 1947 promotion examina-
tion. The list from the 1947 promotional examination, which
intervenors had not been permitted to take, had meanwhile
expired before 1953, and so, to enforce fully what the commis-
sion considered to be the rights of these intervenors, the com-
mission ordered, in effect, that these intervenors be treated as
being on a special 1947 promotion list with the marks they

Ce 2
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obtained in the actual 1953 promotion examination. The result
of this is that intervenors, being theoretically at the top of an
earlier list, are ahead of everybody on the 1953 promotional
examination list.

The present proceeding was then begun by these three peti-
tioners, two of whom are honorably discharged veterans and
the third of whom is an honorably discharged disabled veteran.
They took the 1953 promotional examination for captain and
all of them passed high on it. They object to the presence on
the list of any of the intervenors since, they say, the commission
erred in granting intervenors such retroactive seniority as to
entitle them to be put ahead of petitioners on the list. As of the
time this proceeding was brought in June, 1954, none of the
petitioners and none of the intervenors had been promoted.

Matter of Farrell v. Watson (supra) is not directly in point
here, but it did hold this: that when men already in the municipal
service went to war and a promotional examination was held, for
which they would have been eligible if present, and when they,
on their return, took and passed a comparable examination,
and when there was held, after their return, another promotional
examination to which they would have been eligible had they
been in service and promoted, they were entitled, after getting
the first promotion as the result of a special military examina-
tion, to a second special promotional examination. Another case
to which attention should be called is Matter of Cotter v. Watson
(306 N. Y. 681). In the Cotter case, we gave fullest force to
the statutory requirement (supra) that if an eligible is away
in service at a time when he would be reached on a list, he
is to be treated, for seniority purposes, as if then appointed.
We went so far in the Cotter case as to say that when, because
of war conditions and pursuant to statute, temporary appoint-
ments of city firemen were made, but not from any competitive
list, those latter were to be treated as if they had been appoint-
ments, from a competitive list, of persons lower than petitioner
on that list, and that such appointments of temporary firemen
(in the Cotter case) fixed the date for all purposes of Cotter’s
retroactive seniority. Both the Farrell and Cotter cases (supra)
have to do with the rights after return from military service
of persons who were in civil service before going to war, but
we do not think that difference is controlling. The statutes

22 eli
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are intended to give fullest protection, not only to those who
are in civil service when inducted but to those also who are
merely on competitive lists when taken into military service.

The choice here is between a broad and a narrow construction
of the preference statutes, particularly subdivision 7 (supra).
As of 1946 and 1947, section 6 of article V of the Constitution
(which section was repealed or extensively amended effective
1950) provided, among other things, that a disabled veteran;
as to civil service lists, ‘‘ shall’? be entitled to preference and
“shall be appointed or promoted before any other appoint-
ments or promotions are made, without regard to his or her
standing on any list from which such appointment or promo-
tion may be made.’’ These intervenors, all disabled veterans, |
were in military service from early in 1944 until various dates
in 1944, 1945 and 1946, but none of them were appointed to
the lower position of officer until 1946, although nonveterans
had previously been appointed from the list. If intervenors
had returned from military service early enough to have been
present, and so had been appointed instead of and at the time
the nonveterans were appointed, then, in 1947, when the first
promotional examination was held, these intervenors would have
had three years’ seniority, would have taken that examination,
and, as disabled veterans, would have gone to the top of the list.
We, accordingly, agree with the dissenting Justices at the
Appellate Division that the carrying out of the retroactive
seniority provisions of the statute, plus the letter and spirit
of the Constitution, plus the approach demonstrated in the
Farrell and Cotter cases (supra), point to a reversal here. It
seems to us that the commission has worked out, and applied,
a proper formula for giving these intervenors their full legal
rights. The argument against this, as found in the majority
opinion at the Appellate Division and in the brief of petitioners
here, seems, in part, to be based on an idea that subdivision 7
of section 243 of the Military Law (supra) confers no real bene-

’ fits on persons who go into service while on an eligible list
but before actually having been in public service. There is no
basis in the statute for any such distinction. The other argu-
ment for affirmance here goes something like this: that the statute
(supra), as to seniority credit for veterans, requires only that
they shall, on appointment, get seniority dated back to the date

Ce 23
eee
on which any person, actually lower by marking than they, on
the list, was appointed. The argument is that the persons who
were appointed as officers from the eligible list while intervenors
were away in service were not ‘‘lower’’ on the list since their
marks were better. The answer is that we must read that
statute with the constitutional provision which puts disabled
veterans to the top of any list. Thus, since, when intervenors
returned from service and were certified as disabled, they vaulted
to the very top of the officer list, their rights could be protected
only by considering that those persons with higher marks on
the list than intervenors who had been appointed when inter-
venors were away were actually ‘‘ lower ’’ than the positions on
the list to which intervenors were entitled as disabled veterans.

The order appealed from should be reversed and the petition
dismissed, with costs in this court and in the Appellate Division.

The order of the Appellate Division should be reversed and
that of Special Term reinstated, with costs in this court and in
the Appellate Division.

Conway, Ch. J., Dyz and Fronssun, JJ., concur with Dusmonp,
J.; Funp and Vaw Vooruis, JJ., dissent and vote to affirm upon
the opinion of the Appellate Division; Burxs, J., taking no part.

Order reversed, ete.

In the Matter of the Accounting of Bayxars Trust Company, as
Trustee under the Will of Issac B. Hosrorp, Deceased,
Respondent. James M. Ewerz et al., Appellants; Parser K.
Ewexz et al., Respondents.

Argued April 26, 1955; decided June 10, 1955.

Paul Bawman, Herman Goldman and Milton J. Levitt for
James M. Engle, appellant. James M. Engle, a grandson of
testator, having survived Bonita Shainwald, is one of testator’s
“remaining grandchildren ’? to whom the principal of the trust
created for her under subdivision (c) of paragraph Seventh of
the will is distributable. (Livingston v. Ward, 247 N. Y. 97;
Salter v. Drowne, 205 N. Y. 204; New York Life Ins. & Trust
Co. v. Winthrop, 237 N. Y. 93; Matter of Crane [Battelle], 164
N. Y. 71; Matter of Watson, 262 N. Y. 284; Brussel v. Deitsch,
190 App. Div. 368; Matter of Bierhoff, 271 App. Div. 743, 297
N. Y. 694; Matter of Hosford, 26 N. J. Super. 412; Matter of
Rooker, 248 N. Y. 361; Teed v. Morton, 60 N. Y. 502.)

Ruth Lewinson, special guardian, and Lowis C. Fieland for
Lani OC. Engle, infant, appellant. I. James M. Engle, a grand-
child born after testator’s death, is included in the class described
by the testator as his ‘‘ remaining grandchildren ’’ in subdi-
vision (c) of article Seventh of his will. (Seitz v. Faversham,
205 N. Y. 197; Matter of Trischett, 184 Misc. 599.) II. The
literal meaning of testator’s words ‘‘ remaining grandchildren ”’

| 25
ee

ineludes grandchildren born after his death. (Matter of Rumph,
205 Mise. 404; Matter of Pulis, 220 N. Y. 196; Matter of Coolidge
[Lee], 85 App. Div. 295, 177 N. Y. 541.) III. The words
“remaining grandchildren ”’ describe a class of remaindermen
which includes testator’s grandchildren born after his death.
(Herzog v. Title Guar. & Trust Co., 177 N. Y. 86; Teed v. Morton,
60 N. ¥. 502; Matter of Tousley, 205 Mise. 1053; Jenkins v.
Freyer, 4 Paige Ch. 47 ; Bisson v. West Shore R. R. Co., 143 N. Y.
125; Matter of Bierhof", 271 App. Div. 743; Matter of Doherty,
227 App. Div. 265; Brussel v. Deitsch, 190 App. Div. 368; Matter
of Ackerman, 187 Mise. 910; Matter of Sheffer, 139 Mise. 519.)
IV. The authority cited by the Surrogate is inapplicable.
(Matter of Watson, 262 N. Y. 284; Matter of Bierhoff, 271 App.
Div. 743.)

Copal Mintz, special guardian for June D. Brackett and others,
infants, respondents, and for Barry S. Brackett, respondent.
I. The courts below have correctly held that appellant James M.
Engle, who was not in being at the date of testator’s death, was
not one of testator’s ‘‘ remaining grandchildren ”’ in respect to
the provisions for the distribution of principal upon the death
of any of the grandchildren who were living at the date of his
death. (Connelly v. O’Brien, 166 N. Y. 406; Stokes v. Weston,
142 N. Y. 433; Nelson v. Russell, 135 N. Y. 187; Matter of Krooss,
302 N. Y. 424; Healy v. Empire Trust Co., 276 App. Div. 305,
301 N. Y. 620; Matter of Montgomery, 258 App. Div. 64, 282 N. Y.
718; Matter of Watson, 262 N. Y. 284; Matter of Brown [Wing],
154. N. Y. 313; Safford v. Kowalik, 278 App. Div. 604; Matter of
Watson, 201 Mise. 193, 279 App. Div. 840, 279 App. Div. 976,
304 N. Y. 990; Matter of Dillon, 200 Mise. 147; Allen v. White,
201 Mise. 1034; Matter of Steinhardt, 279 App. Div. 1055, 305
N. Y. 619.) IL. It is doubtful that the appealed from order is
appealable. (Brown v. Feek, 204 N. Y. 238; Webster v. Webster,
243 N. Y. 520; Maggi v. Sabatini, 250 N. Y. 296; City Bank
Farmers Trust Co. v. Ernst, 261 N. Y. 82; Matter of Van Vliet,
224 N.Y. 545; Probolsky v. Probolsky, 219 App. Div. 792.)

Hugh L. Thomson for Bankers Trust Company, trustee,
respondent. The order of the Appellate Division finally deter-
mines a special proceeding and is appealable to this court as of

26 a
ee

right. (Matter of Hallock, 308 N. Y. 299; Matter of Fields, 302
N. Y. 262.)

Van Vooruis, J. This appeal is from an order affirming the
Surrogate’s construction of a will. The problem arises due to
the death of one grandchild and the birth of another after the
death of testator. The residuary estate is given in trust for
his wife during her lifetime, to be divided into three equal parts
upon her death. One of these parts is to be subdivided ‘‘ into
as many shares or portions as I may have grandchildren sur-
viving me,’’ and the testamentary trustees are directed ‘to
pay the income from one such share unto each of such grand-
children for and during the term of its natural life and upon
its death to pay the principal sum from which it has been
receiving the income unto its issue, if any, and, if it leaves no
such issue, unto my remaining grandchildren in equal shares
or portions, the children of any such grandchildren who may
be then dead to take the share or portion which their parent
would have received had it lived.’’? (Italics supplied.) The
question is whether the unqualified language, ‘‘ my remaining
grandchildren ’’, encompasses afterborn grandchildren and
thus all grandchildren who are alive when the contingency
occurs, or whether it is limited by referring back to those grand-
children who were alive at the time of the death of testator
and who have been previously designated as ‘‘ grandchildren
surviving me ’’. Testator could not establish a trust for the life
of a grandchild-not in being at the time of his death, for that
would have violated the Rule against Perpetuities (Personal
Property Law, § 11; Real Property Law, § 42; Sette v. Faver-
sham, 205 N. Y. 197). But nothing stood in the way of his giving
a remainder to afterborn grandchildren upon the termination
of trusts for the benefit of those who had been born during
his lifetime. It is manifest from the next paragraph of the
will that testator wanted to provide for afterborn children of
his daughter Faith, whom he seems to have considered to have
been the child whose age rendered her the most likely to bear
children in the future. When it came to distribution on the
death of any of these secondary life beneficiaries, the Rule
against Perpetuities did not interfere, and we find no difficulty
in giving the language its full scope which directs distribution
to ‘‘ my remaining grandchildren ’’.

The order should be reversed, with costs to all parties appear-
ing separately and filing separate briefs payable out of the
estate, and the matter remitted to the Surrogate’s Court for
further proceedings in accordance with the opinion herein.

Conway, Ch. J., Dusmonp, Dyz, Fuup, Fronssen and Burxs.
. JJ., coneur.
Order reversed, etc.
—
Henry B. Wzsseiman et al., as Executors of Buancaz WaxssEL-
man, Deceased, Respondents, v. Tan Enent Company, Ino.,
et al., Appellants, et al., Defendants.

Argued February 23, 1955; decided June 10, 1955,

28 Le
Le

Zenaida Drabkin and Mortimer H. Koenig for appellants.
I. Plaintiffs’ flagrant laches, both in the institution and in the
prosecution of this action, should have barred their recovery.
(Mutual Life Ins. Co. v. United States Hotel Co., 82 Mise. 632;
Becker v. Faber, 280 N. Y. 146; Brooklyn Sav. Bank v. Joseph
Wechsler Estate, 259 N. Y.9; Peoples Trust Co. v. O’Neil, 273
N. Y. 312; MU. & C. Creditors Corp. v. Pratt, 172 Misc. 695;
Feldman v. Metropolitan Life Ins. Co., 259 App. Div. 123; Chat-
ham Nat. Bank v. Pratt, 185 N. Y. 423; Delaware Trust v. Calm,
195 N. Y¥. 231; Bloomquist v. Farson, 222 N. Y. 375; Lightfoot
vy. Davis, 198 N. Y. 261.) IL. The neglect of plaintiffs diligently
to foreclose the mortgage and collect the debt released the estate
of George C. Engel and The Engel Company, Inc., of any lia-
bility for a deficiency judgment since the whole debt could have
been collected from the land if plaintiffs had proceeded expe-
ditiously. (National Sav. Bank of City of Albany v. Fermac
Corp., 241 App. Div. 204, 266 N. Y. 443; Remsen v. Beekman,
25 N. ¥. 552; Home Owners’ Loan Corp. v. Wood, 164 Mise.
215; White v. Wielandt, 259 App. Div. 676.) III. The order on
the motion for a continuance and the affirmance of the order by
the Appellate Division were not res judicata and did not estab-
lish the law of the case on the question of laches. (Matter of
Lord, 78 N. Y. 109.) IV. On behalf of administrator appellant
only: The Referee erroneously construed the guarantee sued
on as a guarantee of payment instead of a guarantee of collec-
tion. (Bank of United States v. Andron, 155 Mise. 21; White
v. Wielandt, 259 App. Div. 676; McMurray v. Noyes, 72 N. Y.
523; Oraig v. Parkis, 40 N. Y. 181; Chatham Nat. Bank v. Pratt,
185 N. Y. 428; Northern Ins. Co. v. Wright, 76 N. Y. 445.) V. On
behalf of administrator appellant only: The agreement of
guarantee covers only principal and interest. (Equitable Life
Assur. Soc. v. Toplitz, 69 Mise. 457; Moyer v. Wilson, 248 App.
Div. 5; Coudert v. Huerstel, 60 App. Div. 83; Riverhead Sav.

ee 29

Bank v. Carr, 119 Mise. 347; McConihe Realty Co. v. Henry
Scharnberger, Inc., 240 App. Div. 861; White v. Wielandt, 259
App. Div. 676, 286 N. Y. 609; Central Hanover Bank & Trust
Co. v. Roslyn Estates, 266 App. Div. 244, 293 N. Y. 680.)

Francis S. Bensel and Douglas A. Witschieben for respond-
ents. I. The claim of laches in the prosecution of the action is
not subject to review on this appeal, since appellants have not
specified in their notice of appeal that they seek a review of the
intermediate order granting a continuance. (O’Connor Long
Is. Properties Corp. v. Bruckman, 288 N. Y. 23; Landmesser
v. Hayward, 157 App. Div. 74; Matter of Flanagan, 271 App.
Div. 1014; Cott v. Campbell, 82 N. Y. 509; Lyon v. Park, 111
N.Y. 350.) IL. Plaintiffs were not guilty of laches in instituting
or in, prosecuting the action. Until administration was taken
out on the estate of the guarantor, there was no one against
whom the action could be continued. (Lyon v. Park, 111 N. Y.
850; Coit v. Campbell, 82 N. ¥. 509; National Sav. Bank of City
of Albany v. Fermac Corp., 241 App. Div. 204, 266 N. Y. 443;
Remsen v. Beekman, 25 N. Y. 552; Newton v. Evers, 77 Mise.
619, 161 App. Div. 811, 215 N. Y. 198; Newcomb v. Hale, 90
N. Y. 326; Chatham Nat. Bank v. Pratt, 185 N. Y. 423; M. & C.
Creditors Corp. v. Pratt, 172 Mise. 695.) III. The guarantee is
one of payment, and not of collection. (Loos v, McCormack,
107 App. Div. 8; McMurray v. Noyes, 72 N. Y. 523.) IV. The
guarantee covers taxes, assessments and water rates. (White
v. Wielandt, 259 App. Div. 676, 286 N. Y. 609.)

Frozssez, J. Defendants-appellants challenge only the
deficiency provisions of the judgment entered against them in
this foreclosure action. The facts are sufficiently outlined in
the opinion of Judge Dyz, with which we agree excepting as to
the liability of the appellant estate for taxes and assessments
(and interest thereon) totaling $24,442.40, under George C.
Engel’s guarantee.

The brief, unacknowledged guarantee on which respondents
rely was typewritten on the back of the extension agreement
dated October 14, 1922. By its provisions, George C. Engel,
who died in 1936, guaranteed ‘‘ payment of [1] principal and
[2] interest of said mortgage, [3] together with any and all
expenses of foreclosure of said mortgage ’’. The entire princi-

30 ee
see

pal sum of the mortgage was $19,000. The Special Referee found
the total mortgage indebtedness, with interest, to be $67,251.69.

It is said that the afore-mentioned taxes and assessments are
“* expenses of foreclosure of said mortgage ’’ within the terms
of said guarantee, and reliance for this holding is placed on
section 1087 of the Civil Practice Act. But that statute says
nothing about ‘‘ expenses of foreclosure ’’. It merely provides
that taxes and assessments ‘‘ which are liens wpon the property
sold * * * are deemed expenses of the sale within the mean-
ing of that expression as used in any provision of this article.’
(Emphasis supplied.) The purpose of this section is to protect,
not the mortgagee, but the purchaser on a foreclosure sale, who
is entitled to a clear title (Moyer v. Wilson, 248 App. Div.
5, mod. 276 N. Y¥. 161; Equitable Life Assur. Soc. v. Toplitz,
69 Mise. 457, affd. 143 App. Div. 929; Coudert v. Huerstel, 60 App.
Div. 83). In short, it directs the referee to pay out of the
proceeds of the sale unpaid taxes and assessments so that he
can give title free of such then existing liens.

To put it otherwise, taxes and assessments which are no longer
liens cannot be deemed ‘‘ expenses of the sale ’’, and, in any
event, the definition ‘‘ of that expression ’’ is limited to that
statute. It cannot control the meaning of a different expression
as used in a private guarantee. George C. Engel did not guar-
antee taxes or assessments, or a total mortgage indebtedness,
which between the mortgagor and mortgagee may include any
number of items they may agree on. All that Engel guaranteed
was (1) ‘‘ principal ’’, (2) ‘‘ interest’? and (3) ‘‘ expenses of
foreclosure ’’ — not the ‘‘ expenses of sale ’’ as defined by and
limited in section 1087 of the Civil Practice Act. ‘‘ Expenses of
foreclosure ’’, in plain, everyday language, simply means, to
lawyer and layman alike, the customary foreclosure expenses,
namely, costs and lawful disbursements, extra allowances,
referee’s fees and publication charges, and that is all the parties
here could have intended. The guarantor should not be bound
beyond the express terms of his guarantee (see Flyer v. Elms
Realty Co., 241 App. Div. 828, affd. 267 N. Y. 618). It would be
wrong in any case; it would be shocking to do so on this thirty-
two-year-old guarantee.

White v. Wielandt (259 App. Div. 676, 260 App. Div. 871,
affd. 286 N. Y. 609) and Central Hanover Bank & Trust Co. v.

eee! 31
ee

Roslyn Estates (266 App. Div. 244, affd. 293 N. Y. 680) are not
controlling here. These cases merely hold that in a standard
form mortgage such items as taxes and assessments — and we
might add insurance premiums and repairs—are frequently
made a part of the entire ‘‘ mortgage debt ’’, for which the
obligor expressly agreed to be responsible, but these items do
not therefore become the principal of the mortgage. In this case,
the guarantor’s liability is limited by the scope of his agreement
only, not the obligor’s. The Special Referee recognized this by
including insurance premiums and repairs as part of the judg-
ment against the obligor only. He should have done likewise
with respect to the taxes and assessments. In that respect he
fell into error by incorrectly construing section 1087 of the Civil
Practice Act. Accordingly, there should be deducted from the
amount of $63,276.98 in the last ordered paragraph of the Special
Term judgment the sum of $24,442.40, representing the afore-
said taxes, assessments and interest.

The judgment of the Appellate Division should be modified,
and the matter remitted to Special Term for further proceedings
in accordance with this opinion, with costs in all courts to the
appellant estate against plaintiffs-respondents.

Dyz, J. (dissenting in part). In this action to foreclose a
mortgage and to enforce a guarantee of its payment, the defend-
ants-appellants in the Appellate Division appealed from so much
of the judgment of foreclosure and sale as directed (Civ. Prac.
Act, § 1083) a judgment for deficiency against The Engel Com-
pany, Inc, as obligor, and the estate of George C. Engel,
as guarantor. The Appellate Division affirmed by a divided
court. The appeal is here as of right.

While the appellants concede that plaintiffs had a right to
foreclose their mortgage, which was in default for nonpayment
of interest, they nonetheless contend that plaintiffs’ delay of
nearly seventeen years in prosecuting such action to judgment
relieves appellants of liability for any deficiency, failing which
the appellant guarantor makes the additional point that, in any
event, he is not liable for a deficiency insofar as it includes
amounts paid by the mortgagee for taxes with interest from
time of payment, on the ground that such items were not covered
by the guarantee.

32 Le
see

Both of these contentions were rejected in the court below
and we think properly so. Although an action to foreclose a
mortgage is equitable in nature and, like other actions, is subject
to limitations of time for commencement, the doctrine of laches
is not available as a defense so long as the statutory period
allowed for the commencement of foreclosure has not expired.
Here, concededly, the suit was commenced within about six
weeks of accrual which was within the twenty-year period
then allowed (Civ. Prac. Act, § 47, prior to 1938; cf. § 47-a).
While we have not heretofore considered this precise question,
we are satisfied that the subsequent delays in prosecution afford
no substantial ground for denying plaintiffs right to a deficiency.
This is in harmony with generally accepted doctrine that
a mortgagee’s alleged laches within an unexpired period of
limitation for commencement of suit is no defense to a fore-
closure action (2 Warren’s Weed on New York Real Property
[4th ed.], p. 511; Monroe Co. Sav. Bank v. Baker, 147 Mise. 522;
Cross v. Allen, 141 U.S. 528; Riordan v. Ferguson, 147 F. 2d
983; Niagara Fire Ins. Co. v. Fitzsimmons, 101 N. J. Hg. 437;
Wilson v. Stevens, 105 N. J. Hq. 377, 381).

We turn now to a consideration of the extent of appellant
guarantor’s liability for a deficiency. The Special Referee, in
addition to the usual and customary items going to make up the
expenses of sale, determined that the sums advanced by the
mortgagee for taxes and assessments with interest from time
of payment constituted proper ‘‘ expenses of sale’? for which
the guarantor ‘‘ by the express terms of the instrument of
guarantee and by virtue of this applicable provision of the Civil
Practice Act [§ 1087] is liable for the payment’’. The court
below was unanimous as to this aspect of the case, the dissenting
Judges having disagreed as to the availability of plaintiffs’
laches in prosecution as a defense.

The mortgage in suit was initially given in 1906 to the Union
Trust Company of New York to secure a loan of $19,000 with
interest at 444% on premises at 121 Barclay Street, New York
City. Subsequently the premises were conveyed to The Engel
Company, Inc., subject to the lien of the mortgage. Later and
in 1922, after the mortgage had been assigned to Blanche Wessel-
man, plaintiffs’ decedent, at the request of The Engel Company,
Inc., she extended the maturity of the mortgage for five years

Lr 33
ree

to October 2, 1927. Coincident with the making of such extension
agreement and forming a part thereof, George C. Engel, now
deceased, the treasurer and principal stockholder of The Engel
Company, Inc., for the purpose of inducing the extension,
executed a guarantee of payment which was indorsed on the
back of the extension agreement, viz.: ‘‘ For and in considera-
tion of the sum of one dollar and other valuable consideration
to me in hand paid by Blanche Wesselman, the receipt whereof
is hereby acknowledged, and in order to induce said Blanche
Wesselman to take an assignment of said mortgage herein men-
tioned and extend the same for a period of five years at five and
one half per cent. interest, I do hereby guarantee to said Blanche
Wesselman the prompt and punctual payment of principal and
interest of said mortgage together with any and all expenses
of foreclosure of said mortgage.’’

The appellant guarantor does not doubt that taxes and
assessments when paid by the mortgagee may be added to the
mortgage debt, but says that his guarantee did not extend to
the mortgage debt, but was restricted to the payment of principal
and interest.

There is no merit to this contention. Its mere assertion in
light of the documentary evidence refutes its substance. The
bond, mortgage and extension agreement are in standard form
containing the usual covenants on the part of the mortgagor
to pay the indebtedness and interest and also to pay taxes,
assessments, water rates, make repairs and carry insurance
(Real Property Law, § 254). The guarantee recited that it was
given to induce the extension of the mortgage which, by its
terms, was then due and which The Engel Company, Inc., of
which the guarantor was chief executive and principal stock-
holder, had not assumed or agreed to pay when it took title.
Under such circumstances we are obliged to read the word
“ principal’? as synonymous with the principal debt which
it was given to secure. In so ruling we follow well-established
doctrine that a guarantee must be viewed in light of the nature
of the transaction to which it relates and the purpose for which
it was made (Catskill Nat. Bank v. Dumary, 206 N. Y. 550;
Bennett v. Draper, 139 N. Y. 266; Powers v. Clarke, 127 N. Y.
417; Schwartz v. Hyman, 107 N. Y. 562; Schmitz v. Langhaar,
88 N. Y. 503; Herskovits Fur Co. v. Hollander, 138 Mise. 456, affd.

|

34 Le

232 App. Div. 802, affd. 257 N. Y. 606). This principle underlies
our holding in Flyer v. Elms Realty Co. (241 App. Div. 828, affd.
without opinion 267 N. Y. 618). There the guarantee was given
by the assignor of a mortgage in order to induce the assignment.
By its express terms, the assignor guarantor’s liability was
expressly limited to the amount of unpaid balance of principal
which, in effect, was to say ‘‘ without recourse ’’ beyond the
unpaid balance of principal and interest. Upon foreclosure we
deemed the assignor guarantor’s liability for a deficiency had
thereby been limited to the balance of unpaid principal.

Furthermore, any doubt of intent is removed by the guar-
antor’s further covenant expressly guaranteeing payment of
** all expenses of foreclosure ’’.

By statutory enactment all taxes and assessments which are
a lien on the property sold are payable out of the proceeds as
an expense of sale (Civ. Prac. Act, § 1087). The appellant
would have us construe this provision as limited to taxes and
assessments actually unpaid at the time of sale; that because
the mortgagee paid the taxes aceruing after default and before
sale rather than leaving them open and unpaid, with the conse-
quent liability for interest and excess penalties, and risk of
forfeiture under delinquent tax statutes, they are not ‘‘ unpaid ”’
within the meaning of section 1087 and, accordingly, may not be
considered as an expense of sale. Such contention is wholly
lacking in merit. It would operate to penalize the diligent
mortgagee, who acts promptly to preserve his security, and
to favor the improvident. Nor can we believe the appellant is
serious in advancing any such proposition for had such a course
been followed the expenses of sale might well have been far in
excess of what they now are and the guarantor’s liability
greatly increased. Accordingly, when the language of the
guarantee is read in light of the applicable statute, the sums
advanced by the mortgagee for taxes and assessments with
interest from the date of payment are properly charged as a
part of the judgment for a deficiency (Civ. Prac. Act, §§ 1083,
1087; White v. Wielandt, 259 App. Div. 676, 260 App. Div. 871,
affd. 286 N. Y. 609; Central Hanover Bank & Trust Co. v. Roslyn
Estates, 266 App. Div. 244, affd. 293 N. Y. 680).

The judgment should be affirmed, with costs.

|
a

Upon appeal of defendant The Engel Company, Inc.: Judg-
ment affirmed.

Corway, Ch. J., Desmonp, Dyz, Funp, Frozssex, Van Voornis
and Burgs, JJ., concur.

Upon appeal by defendant estate of George C. Engel, deceased :
Judgment modified, ete.

Conway, Ch. J., Furp, Van Vooruis and Burxz, JJ., concur
with Frozssez, J.; Dyn, J., dissents in an opinion in which
Dzsmonp, J., concurs.

Le
In the Matter of Hat C. Moons, Appellant, against Jamms R.

Maopurr, as Commissioner of Motor Vehicles of the State of
New York, Respondent.

Argued March 10, 1955; decided June 10, 1955.

George N. Meyl and Morris J. Zweig for appellant. I. The
action of the commissioner was without statutory authority and
therefore void. (Regina v. Marks, O. W. N. [1952], No. 31;
Matter of Goodwin v. Mealey, 173 Mise. 169; Matter of Cashion
v. Harnett, 234 App. Div. 332; People v. Pardee, 202 Mise. 238;
People v. Olah, 300 N. Y. 96; Logan v. United States, 144 U. 8.
263; People v. Gutterson, 244 N. Y. 243; People v. De Renna,
166 Mise. 582; Matter of Howard v. Fletcher, 199 Mise. 521, 278
App. Div. 799; Regina v. Jacquin, [1951] Que. S. C. 459; Marcotte
v. Fortin, [1952] Que. 8. C. 449.) IT. Section 71 (subd. 2, par.
(b]) applies only to convictions in other States of the United
States, and not to those in foreign countries. (Matter of Wignall
vy. Fletcher, 303 N. Y. 485; Regina v. McLean, 107 ©. C. ©. 32;
People ex rel. Beaman v. Feiiner, 168 N. Y. 360.)

Le 37
Le

Jacob J. Javits, Attorney-General (Philip J. Fitegerald and
Henry 8. Manley of counsel), for respondent. I. The action of
the commissioner was valid and in accordance with the statutory
mandate. (Matter of Cashion v. Harnett, 234 App. Div. 332;
Matter of Howard v. Fletcher, 199 Misc. 521, 278 App. Div.
799; Ballard v. State, 25 Ala. App. 457; People v. Dingle, 56 Cal.
App. 445; Hart v. State, 26 Ga. App. 64; Wallace v. State, 44 Ga.
App. 571; Klaser v. State, 89 Ind. App. 561; State v. Noble, 119
Ore. 674; Com. v. Buoy, 128 Pa. Super. Ct. 264; Com. v. Long,
181 Pa. Super. Ct. 28; State v. Hurd, 5 Wn. 2d 308; Danielson
v. State, 155 Neb. 890.) II. The statute applies to convictions
had outside the State. (Are Eng. Corp. v. State of New York,
293 N. Y. 819, 294 N. Y. 656; Lindlots Realty Corp. v. County
of Suffolk, 278 N. Y. 45; Colello v. Stevenson & Co., 284 App.
Div. 805; Maryland Cas. Co. v. Brown, 181 Tex. 404.)

Conway, Ch. J. We have presented to us a question relating
to a Canadian regulation of motor vehicles in a proceeding in
which petitioner asserts that while parked in the city of Toronto,
Canada, he was arrested and charged with operating a motor
vehicle while his ability to drive was impaired by alcohol.

The Ontario Highway Traffic Act, as amended in 1953, adopted
section 285 of the Criminal Code (Canada). Subdivision (4) of
section 285 of the Canadian Criminal Code reads as follows:
‘« Bvery one who, while intoxicated, or under the influence of
any narcotic, drives any motor vehicle or automobile, or has the
care or control of a motor vehicle or automobile, whether it is in
motion or not, shall be guilty of an offense’. (Emphasis
supplied.) 7

That section is followed by subdivision (4a), reading as fol-
lows: ‘‘ Hveryone who, while his ability to drive a motor vehicle
or automobile is impaired by alcohol or any drug, drives any
motor vehicle or automobile, or has the care or control of a
motor vehicle or automobile, whether it is in motion or not,
is guilty of an offense’. (Hmphasis supplied.)

Clearly there is a distinction and difference between the acts
proscribed by these two subdivisions of section 285. To deter-
mine to the contrary would be to ascribe to the legislature of
a province of a neighbor country, the doing of a vain and
useless act.

38 ee
re

Now we turn to our own Vehicle and Traffic Law (§ 71, subd.
2, par. [b]) which provides as follows:

gm. * * *

‘<2, Mandatory suspensions and revocations. Such licenses
maust be revoked and such certificates of registration may also
be revoked where the holder is convicted. * * *

“(b) of * * * anoffense consisting of operating a motor
vehicle or motor cycle while under the influence of intoxicating
liquor where the conviction was had outside this state ;’’ (empha-
sis supplied).

The sole competent evidence upon which the respondent Com-
missioner of Motor Vehicles of our State acted was the certificate
of conviction reproduced below:

Offence { Place Toronto
Ability Imp.
Act
Violated cc Sec. 285-4A.
Date of conviction Fine Costs Imprisoned
June 29/53 100. or 15 days

The petitioner pleaded guilty to a violation of subdivision
(4a) of section 285 on June 29, 1953, On August 19th he was
notified by the commissioner that pursuant to section 71 (subd.
2, par. [b]) of the Vehicle and Traffic Law his license to drive
was revoked. That was without a hearing and is deemed “‘ an
administrative act reviewable by the supreme court as such ’’
(Vehicle and Traffic Law, § 71, subd. 6).

The situation presented is important for a number of reasons:
(1) The possession of a license to drive is a vested property
right. As we said in Matter of Wignall v. Fletcher (303 N. Y.
435, 441, Froussex, J.): ‘‘ We are here dealing with the exer-
cise of power by the commissioner in the revocation of a driver’s
license, and our decision will apply not only to this petitioner,
but may affect any holder of a driver’s license in the State of
New York. A license to operate an automobile is of tremendous

eee 39
Dees

value to the individual and may not be taken away except by
due process.”” (2) The petitioner alleges that he is a salesman
and travels to outlying areas and towns, as well as large cities
in various States and Canada and must carry a large number
of samples; that train facilities are not available in some of
the places he must periodically visit; that he has become subject
to the loss of his employment of twenty-seven years with one
company which depends solely upon the transportation facilities
of an automobile. (3) Many of our residents motor into the
province of Ontario as well as Quebec and section 335-a of the
Code of Criminal Procedure does not apply to a situation such
as this (in spite of the express provision for such application
in the Vehicle and Traffic Law, § 71, subd. 6) since by its terms
section 335-a is limited to an ‘‘ arrest in this state of a resident
of this state’. (4) Action is taken by the commissioner without
opportunity to be heard.

Section 335-a of the Code of Criminal Procedure indicates the
extent to which our Legislature has gone to protect the right
to operate an automobile. It provides that prior to accepting
a plea of guilt the court must instruct the defendant at the time
of his arraignment in substance as follows: ‘ A plea of guilty
to this charge is equivalent to a conviction after trial. If you
are convicted, not only will you be liable to a penalty, but in
addition your license to drive a motor vehicle or motor cycle,
and your certificate of registration, if any, are subject to sus-
pension and revocation as preseribed by law.’

As one court pointed out in Matter of McCord v. Fletcher
(182 Misc. 447, 449): ‘* Prior to the enactment of section 335-a
of the Code of Criminal Procedure, frequent instances of mis-
takes and injustice occurred when violators of subdivision 5
of section 70 of the Vehicle and Traffic Law were lulled into
believing that upon pleading guilty to operating a motor vehicle
while under the influence of intoxicating beverage, the imposi-
tion of a small fine would be the sole penalty of such offense.
Many such violators were rudely awakened from such belief
when later informed that no longer might they operate upon
the public highways their motor vehicle within the State of New
York. To remedy such evil, section 335-a of the Code of Crimi-
nal Procedure was enacted and now a magistrate is compelled
to inform the accused definitely, before accepting a plea of

40 Leen!
ees Lee
guilty, of all the consequences which may or will follow convic-
tion, and, further, the magistrate must inform the accused that
a plea of guilty is equivalent to a conviction after trial.”’

The certificate of conviction, which we quoted above, when
considered in connection with the disjunctive wording used in
subdivision (4a) indicates clearly that petitioner could have been
convicted under the Ontario statute on grounds other than the
ones set forth in section 71 (subd. 2, par. [b]) of the Vehicle
and Traffic Law. Thus he might have been convicted of:

(1) *©* * * ability to drive * * * impaired by alco-
hol * * * [and] drives a motor vehicle * * *”

(2) “** * * ability to drive * * * impaired by alco-
hol * * * [and] has the care or control of a motor vehicle
inmotion * * *77

(8) * * * ability to drive * * * impaired by alco-
hol * * * [and] has the care or control of a motor vehicle
[not] in motion * * *”?

(4) “© * * * ability to drive * * * impaired by * * *
any drug * * * [and] drives a motor vehicle * * *”

(5) “** * * ability todrive * * * impaired by * * *
any drug * * * [and] has the care or control of a motor
vehicle in motion * * *”

(6) “«* * * ability todrive * * * impairedby * * *
any drug * * and] has the care and control of a motor

vehicle [not] inmotion * * *”

The portion of the Vehicle and Traffic Law (§ 71, subd. 2, par.
[b]) involved provides that a license must be suspended and
revoked when the holder has been convicted of ‘‘ operating a
motor vehicle * * * while under the influence of intoxicat-
ing liquor where the conviction was had outside this stat
Upon the competent evidence which was before the respondent,
it was impossible to determine whether the petitioner did or
did not come within the scope of the appropriate section of the
New York law, and therefore the respondent was incorrect in
revoking the license of the petitioner. It is true that one of
the respondent commissioner’s exhibits is a letter from the
Ontario Motor Vehicles Branch of the Department of Highways
which characterized the conviction of the petitioner as one of
“¢ operating a motor vehicle while ability impaired by alcohol.”
It is also true that the opening sentence of the dissenting opinion

De 41
ee

is as follows: ‘‘In June, 1953, appellant, a resident of New
York State, pleaded guilty, as he himself alleges in his petition
in this proceeding, in an Ontario Court, while represented by
counsel, to ‘the offense of operating a motor vehicle while
ability impaired by alcohol’ (Ontario Highway Traffic Act;
Canadian Criminal Code, § 285, subd. [4a]).’’? The same quota-
tion is referred to on page 45 of the dissenting opinion. We
do not read the quoted portion, which has been taken from para-
graph 11 of the petition herein, as do the dissenters and it is
better, we think, that the entire paragraph be quoted. It reads
as follows: ‘‘ 11. That one evening while petitioner was parked
in the City of Toronto, Canada, he was arrested and charged
and thereafter pleaded to a charge of the offense of operating
a motor vehicle while ability impaired by alcohol; that peti-
tioner was unfamiliar with the laws of Canada and was not
informed that his operator’s license would be revoked in the
State of New York. Were it not for the fact that petitioner
was a stranger in a foreign country, he would not have pleaded
to this charge or any charge.’’? (Emphasis supplied.)

The preceding paragraph 10 might also be quoted and is as
follows: ‘‘10. That petitioner was not convicted in Toronto,
Canada, or elsewhere for operating a motor vehicle while under
the influence of intoxicating liquor.’’

We think that the record does not disclose that the petitioner
was represented by counsel in Ontario, Canada. As we shall
point out later, the only evidence presented to the commissioner
upon which he could legally act was the certificate of conviction
reproduced in part (supra). That showed no representation
by counsel. Paragraph ‘‘ 11’ of the petition (quoted supra)
is sufficient in itself to show lack of representation of the peti-
tioner by counsel, if we were to consider evidence which was
not before the commissioner when he acted. The commissioner
in paragraph “‘ rent ’’ of his separate and distinct defense
to the petition certified and annexed thereto ‘a transcript of
record of proceedings herein.’’ The four papers so certified
and annexed do not show any representation by counsel for
petitioner, and since those were the only papers before the
commissioner, by his own verified answer, they are conclusive.
The claim by the commissioner which is adopted by the dissent-
ing opinion is that because the commissioner alleged on infor-

42 ee
ee

mation and belief that the ‘‘ petitioner was represented by
counsel] at said Magistrate’s Court’’ in paragraph “‘ rirra ”’
of his separate and distinct defense, and petitioner failed to deny
that allegation, it must be considered to be admitted. On this
record we do not think that the commissioner is justified in his
claim. Suffice it to say that no paper in this record indicates
that petitioner had legal counsel in Ontario, nor does any paper
disclose the name of any counsel.

To ascertain of what charge a person has been convicted we
do not have resort to extrinsic documents which would have no
force or effect upon the certificate of conviction itself. A volun-
tary characterization could have no more effect here than the
‘act that ‘‘ Olah pleaded guilty to an indictment which recited
-hat the items stolen were worth over $200’? (People v. Olah,
300 N. Y. 96, 98). We must refer to the indictment and the stat-
ate under which the indictment was drawn to determine what the
operative and material facts were (People v. Love, 305 N. Y. 722),
and then we must compare these operative and material facts to
our own statute to ascertain whether or not it has application.
Therefore the characterizations by the respondent and the peti-
tioner must be ignored in the present case, not only for the same
reason as in the Olah case, but also for the conclusive reason that
such characterizations by the petitioner and respondent were not
a basis upon which the respondent acted, and the courts may only
consider such evidence as was presented to the commissioner
(Matter of Newbrand v. City of Yonkers, 285 N. Y. 164, 177;
see, also, Matter of Ogden v. Du Mond, 273 App. Div. 582, 583-
584). We are limited in our present case to referring to the
Ontario statute alone (there was no indictment and the convic-
tion was for a violation of the section) and to ascertaining the

‘operative and material facts. Upon doing so we are faced with
the different possibilities set forth (supra). It can immediately
be ascertained that items 4, 5 and 6 cannot come within section
71 (subd. 2, par. [b]) of the Vehicle and Traffic Law, for those
items provide for a factual situation where the defendant is
under the influence of drugs. Our section makes no mention of
drugs, and refers only to intoxicating liquor. This alone is a
sufficient ground to find that the petitioner is entitled to retain
his license on this record (People v. Olah, 300 N. Y. 96, supra).
The case before us is analogous to that of People v. Love

ee 43
er}

(supra) in that the offense of which the petitioner was convicted
under the Ontario statute is uncertain, with the single exception
that in the Love case we were able to resolve the apparent
uncertainty of the precise criminal act by closely examining
the indictment in relation to the statute. There is no indictment
here upon which we can rely, and so the offense to which the
petitioner pleaded remains doubtful and undetermined. There-
fore it is clear that the respondent failed to meet the burden,
which was his, to present proof in some admissible form which
did not leave uncertain the precise offense of which the petitioner
was convicted in Ontario. In the circumstances before us where
the petitioner’s conviction was for a violation of subdivision
(4a), the certificate of conviction failed to specify which of the
different possible offenses was the one of which he was convicted
and only one of which might have come within the scope of
section 71 (subd. 2, par. [b]) of the Vehicle and Traffic Law.
In view of this uncertainty, which clearly exists, this case comes
within the rule which requires a court to give to the record
“«¢ that construction which operates in favor of life or liberty ’”’
(People ex rel. Carollo v. Brophy, 294 N. Y. 540, 545).

One word more need be said. As the Appellate Division
properly pointed out: ‘* The Canadian Criminal Code is nation-
wide in application but each province is free to adopt its own
motor vehicle regulations (Provincial Secretary of Prince.
Edward Island v. Fagan [1941] S. C. RB. 396, 76 C. C. O. 227
[1941] 3 D. L. R. 305).”? Not only is each province free to make
its own motor vehicle regulations, but the regulations are to
be construed by us as they are construed by the courts of the
particular province in which they are enacted. Thus the Attor-
ney-General cites a number of cases decided in Quebec affecting
a regulation similar to the one under consideration here. They
are not applicable here for the courts of the particular province
are the proper tribunals to decide the intent of their own legis-
lature (cf. Allard v. Charbonneau, 1953 O. W. N. 381). The
only case called to our attention in the courts in Ontario is a
County Court case in which there was a dismissal of the charge.
In that case (Regina v. Marks [1952] O. W. N. 608, 612, 15 C. R.
47, 103 O. C. C. 368, 375) in discussing subdivision (4a) the
court said: ‘‘ It fails to provide for definite tests or indications
of driving impairment as the direct result of aleohol or drugs.

44. ee
|
It means that any decent citizen partaking of a glass of beer
or wine with his luncheon, be he parliamentarian, professional
man, clergyman, labourer, business executive, Judge or other-
wise could, on stepping into his motor car, be apprehended by
a police officer and subjected to all the usual indignities of
examination, arrest and trial, all because there was a whiff of
alcohol on his breath, * * * Hiven if the word ‘ visibly’
were used immediately before the word ‘ impaired ’ the danger
would be minimized and positive proof of actual impairment
would be necessary. In my view there must be tangible physical
evidence of actual driving impairment in the form of one or
more of the usual obvious indications of such impairment from
alcoholic or drug influence.’

This construction of subdivision (4a) by the Ontario court
indicates quite clearly the contrast between subdivision (4a)
and our own Vehicle and Traffic Law (§ 71, subd. 2, par. [b]).

We do not think that in determining whether or not petitioner
should have his license revoked that there should be weighed in
the scales of justice the number of licensed motor vehicles, the
number of licensed drivers and the number of highway accidents
in this State. Those matters are neither germane nor relevant
under our system of administering justice under law. Petitioner
had no accident in Ontario and he alleged under oath that he
never had been convicted of driving a motor vehicle while intoxi-
cated in Ontario, Canada, or anywhere else. There was no
showing here that during his twenty-seven years as a salesman
that he had ever had an accident. Cases must be decided upon
the record presented.

The order of the Appellate Division should be reversed and
that of Special Term reinstated, with costs in this court and in
the Appellate Division.

Dzsmonp, J. (dissenting). In June, 1953, appellant, a resi-
dent of New York State, pleaded guilty, as he himself alleges
in his petition in this proceeding, in an Ontario court, while
represented by counsel, to ‘‘ the offense of operating a motor
vehicle while ability impaired by alcohol’’ (Ontario Highway
Traffic Act; Canadian Criminal Code, § 285, subd. [4a]).
A fine was imposed upon him by the Ontario court (with the
alternative of fifteen days’ imprisonment) and he paid the fine.

ee 45

The Motor Vehicle Branch of the Ontario Department of High-
ways sent to respondent, the New York State Commissioner of
Motor Vehicles, official notice of appellant’s conviction in
Ontario. Respondent thereupon revoked appellant’s New York
State automobile operator’s license. Such revocation was man-
dated, absolutely and beyond control of any public officer or
court in this State, by paragraph (b) of subdivision 2 of sec-
tion 71 of the New York State Vehicle and Traffic Law, as
amended in 1943, which reads:
‘2, Mandatory suspensions and revocations. Such licenses
must be revoked * * * where the holder is convicted. * * *
“(b) of * * * anoffense consisting of operating a motor
vehicle * * * while under the influence of intoxicating
liquor where the conviction was had outside this state ’’.
Appellant then brought this article 78 of the Civil Practice
Act proceeding to set aside the revocation. The sole ground
set forth in his petition for such relief (and in his brief to this
court on this appeal) is a supposed difference in meaning
between ‘‘ impaired by alcohol ’’ (Canadian statute, supra) and
‘« under the influence of intoxicating liquor ’’? (New York statute,
supra). There is no such difference. They mean exactly the
same thing.
This court, on quite a different ground, is nullifying the revo-
cation. Citing People v. Olah (300 N. Y. 96), this court theorizes
that appellant’s Ontario conviction might have been for one of
the causes mentioned in the Ontario statute (supra) other than
driving a motor vehicle while the driver’s ability to drive was
impaired by alcohol. But the problem is not one of statutory
exegesis. However many different offenses are proscribed by
the Ontario law, we know the exact offense to which appellant
pleaded guilty and of which he was convicted. He not only
admits, but alleges to the New York courts in this very proceed-
ing, that his guilty plea and conviction was for “‘ the offense of
operating a motor vehicle while ability impaired by alcohol ’’.
The Olah holding (supra) has nothing whatever to do with it,
since the Ontario charge and the Ontario operative fact were
the same, and single and undivided. Appellant just simply
confessed to, and was punished for, driving an automobile in
Ontario while his ability to drive was impaired by alcohol.

46 PC
Pe
New York State has 4,500,000 licensed motor vehicles, 6,000,-
000 licensed drivers, and has 350,000 highway accidents a year.
Public safety requires, at the least, that our mandatory statutes
(few and insufficient as they are) be enforced.
The order should be affirmed, with costs.

Froussur, Van Voornis and Burxs, JJ., concur with Conway,
Ch. J.; Desmonn, J., dissents in an opinion in which Dyn and
Funo, JJ., concur.

Order reversed, etc.
Es

In the Matter of the Application of Jamus Aurrep Harvey, Jr.,
for Admission to Practice as an Attorney. Jamas A. Harvey,
Jz., Appellant; Commirrer on Cuaracrur anD Frrnuss, Tents
Juvic1at Disreicr, Respondent.

Submitted May 25, 1955; decided July 8, 1955.

Samuel Lawrence Brennglass for appellant. Petitioner-
appellant comes within the letter and spirit of subdivision 1 of
rule II of the Rules of the Court of Appeals. (Matter of Lerch,
280 N. ¥. 74.)

No appearance for respondent.

Desmonp, J. We granted leave to appeal in this proceeding
so that we might again canvass the meaning and application
of former rule II of this court for the admission of attorneys,
and Matter of Lerch (280 N. Y. 74). Former rule II, in effect
until June 15, 1955, was, in applicable part, as follows:

“Rule II. Admission without examination. The following
classes of persons may, in the discretion of the Appellate Divi-
sion, be admitted and licensed without examination:

‘¢1, Any person who has been admitted to practice in the
highest law court in any other State or territory of the Ameri-
can Union or in the District of Columbia and who has actually
practiced at least five years in such court or in the highest court
of original jurisdiction.”’

On June 15, 1955, after this appeal had been argued, there
went into effect a revised set of rules but our new rule VII-1
(see, also, new rules VII-2, VII-3 and VII-4) is not intended to
have any meaning or effect different from former rule II, as
heretofore construed and applied.

Petitioner was admitted to the Georgia Bar in 1935 and has
resided in New York State since 1947. His application to the
Appellate Division, Second Department, for admission to the
New York Bar was denied by that court on recommendation of
its Committee on Character and Fitness. The adverse report
of the committee was based on the conceded fact that, during
the period claimed by petitioner as his ‘‘ at least five years ’’ of
practice in Georgia, he had spent at least half his time, in each
year, working and living in southern States other than Georgia.
Employed by a liability insurance company as a ‘‘ Claims Attor-

48 Le
ee

ney ’’, he, while retaining a domicile in Atlanta, Georgia, trav-
eled about in other States in his employer’s business. It is
unnecessary to decide whether his activities amounted to the
practice of law since, as we hold, the Appellate Division acted
within its discretionary powers in ruling that petitioner did
not show compliance with the residence requirements laid down
by this court in Matter of Lerch (280 N. Y. 74, supra), on which
decision the Appellate Division relied.

At the time Matter of Lerch (supra) was decided (and until
June 15, 1955) our rule IT contained uo requirement of residence
in the foreign State in which a petitioner claimed five years of
practice. But the Lerch decision wrote that condition into the
rule, and our new rule VII-1 includes it in terms.

In a sense, everything in the Lerch opinion (supra) was a
dictum except the holding, applicable to the Lerch facts, that
one cannot get credit for out-of-State practice while a resident
of New York State. But the Lerch dicta, if such they were,
have been followed ever since by the Appellate Division and by
this court. One who seeks admission to our Bar without exami-
nation because he has been a member of the Bar of another
State (or the District of Columbia) must have resided, con-
tinuously or substantially so, in that other jurisdiction for the
five years. As to the five years of ‘‘ practice ’’ in the foreign
jurisdiction, that means admission to the Bar with the right to
practice in that jurisdiction’s highest court. Just how much
or what kind of ‘‘ practice ’’ such an applicant must show is for
the broad, inclusive discretion of the Appellate Divisions, which
in the end must determine professional ‘‘ fitness ’’ as well as
good character (see old rule II, subd. 2, second par., and new
rule VII-3).

The order should be affirmed, without costs.

Conway, Ch. J., Dyz, Fup, Froussen, Van Vooruis and Burks,
JJ., concur.

Order affirmed.

Man Kurxy et al., Appellants, v. Watson Hiavaror Oo., Inc.,
Respondent.

Argued April 21, 1955; decided July 8, 1955.

Bernard Meyerson and Herman E. Hoberman for appellants.
I. The Official Referee found as a matter of fact that plaintiffs
were misled by a false assurance of safety and, in view of the

50 |
ee

affirmance of the findings of fact by the Appellate Division, the
reversal of the judgment and the dismissal of the complaint
was error. (Beinhocker v. Barnes Development Corp., 296
N. Y. 925; Kirshenbaum v. General Outdoor Adv. Co., 258 N. Y.
489.) II. Plaintiffs adequately proved that the accident was
caused by defendant’s negligence in the maintenance and repair
of the elevator. (Beinhocker v. Barnes Development Corp., 296
N.Y. 925; Ames v. Watson Elevator Co., 303 N. Y. 732.)

Samuel E. Swiggett for respondent. The judgment entered
on the order of the Appellate Division is correct because plain-
tiffs failed to prove any negligence on the part of defendant.
(Murray v. Usher, 117 N. Y. 542; Van Antwerp v. Linton, 89
Hun 417, 157 N. Y. 716; Greenauer v. Sheridan-Brennan Realty
Co., 224 App. Div. 199; Mollino v. Ogden & Clarkson Corp., 248
N. Y. 450; Zurich Gen. Acc. & Liability Ins. Co. v. Watson
Elevator Co., 253 N. Y. 404; Currie v. International Mag. Co.,
256 N. Y. 106; Beinhocker v. Barnes Development Corp., 296
N. ¥. 925; Ames v. Watson Elevator Co., 303 N. Y. 732.)

Dvu, J. This is a suit to recover damages for personal injuries
and incidental expenses allegedly caused by defendant’s negli-
gent failure to properly service, maintain and repair a self-
service elevator. Following a nonjury trial of the issues, the
plaintiffs had a judgment, which has been reversed and their
complaint dismissed in the court below, on the ground that, as
a matter of law, there was no proof of defendant’s negligence
and that its negligence caused the injuries complained of. All
findings of fact implicit in the Referee’s decision were affirmed.
The plaintiffs have appealed as of right.

There is evidence establishing that the plaintiff, as she was
entering the self-service elevator in question, tripped and fell
to her injury when her foot caught on the floor of the elevator
which, though she had not noticed it, was some three or more
inches above the level of the landing. Two days prior to the
accident the husband — who, with his wife’s part-time assistance,
performed the duties of superintendent of the apartment build-
ing in which the elevator was located — notified the defendant
that the elevator was not leveling properly. The defendant
thereupon sent a mechanic, who ostensibly corrected the defect,
and advised the husband in the presence of his wife that every-

Le 51

thing was ‘‘ 0. K.’’, an assurance on which she had the right to
rely (Kirshenbawm v. General Outdoor Adv. Co., 258 N. Y. 489).
Two days later she had the accident. Her testimony at the trial
that on the day before the accident — which was subsequent to
the repair work—the elevator was ‘‘ all right’? (what she
meant thereby does not appear), is not such an admission against
interest as to destroy the probative effect of other affirmative
testimony that the elevator was not leveling properly. Accord-
ing to her husband, the elevator stopped three or more inches
above the landing level and by the testimony of defendant’s
own mechanic, some one and one-half inches. The latter witness
could not remember whether he had corrected such condition,
even though he considered it advisable to make an adjustment
whenever the difference was an inch above or below the landing
level.

Upon such a state of the record, a question of fact was raised
as to whether such failure to level properly was due to negli-
gent maintenance and if so, whether such defect was the proxi-
mate cause of the plaintiff’s injuries. It is axiomatic that where
there is a conflict in the evidence as to the issues controverted,
matters of credibility and weight are for the jury to determine
or, if the trial be without a jury, for the trier of the facts. On
this record it cannot reasonably be said that the fact of negli-
gence and proximate cause as found by the Referee is, as a
matter of law, without support in the evidence.

We agree with the learned Referee that the facts of this case
bring it within the principle of Beinhocker v. Barnes Develop-
ment Corp. (296 N. ¥. 925) and Ames v. Watson Elevator Co.
(303 N. Y. 732).

The judgment appealed from should be reversed and that of
the Trial Term reinstated, with costs in this court and in the
Appellate Division. .

Conway, Ch. J., Frozssex and Burs, JJ., concur with Dyx, J.;
Desmonp, Fuxp and Van Vooruis, JJ., dissent and vote to affirm
upon the ground stated in the memorandum of the Appellate
Division.

Judgment reversed, ete.

ee
eee =

In the Matter of Haws Wass, Appellant, against Francuin
Square anp Munson Free Disreict or raz Town or Hump-
stzap, New Yor, Respondent.

Argued April 26, 1955; decided July 8, 1955.

Fred A. Williams and Jules Martin for appellant. I. A denial
of recovery under section 10 of the Workmen’s Compensation
Law is not res judicata in this proceeding under section 205 of
the General Municipal Law since section 10 is narrower in scope
then section 205. (Matter of Slattery v. Board of Estimate &
Apportionment, 271 N. Y. 346; Ogino v. Black, 304 N. Y: 872.)

es |:
|

IL. It is the law of the case as between the parties that the Work-
men’s Compensation Law is narrower than the General Munici-
pal Law.

Wiliam H. Stieglite, Bernard Katzen and Harry Schechter
for respondent. I. Where the volunteer fireman made applica-
tion for workmen’s compensation to the Workmen’s Compensa-
tion Board pursuant to section 10 of the Workmen’s Compensa-
tion Law resulting in a dismissal of the claim on the merits, the
board’s determination was res judicata in a proceeding brought
in the County Court to recover benefits pursuant to subdivision
3 of section 205 of the General Municipal Law based upon
the same provable facts between the same parties. (United
States v. Grunstein & Sons Co., 127 F. Supp. 907; Commis-
sioners of State Ins. Fund v. Low, 285 App. Div. 525; Matter of
Knapp v. Syracuse Univ., 308 N. Y. 274; Matter of Brown v.
Towns of Gates & Chili, 266 App. Div. 640, 292 N. Y. 663; Schuyl-
kill Fuel Corp. v. Nieberg Realty Corp., 250 N. Y. 304.) II. The
provisions of the Workmen’s Compensation Law being broader
and more comprehensive than the provisions of the General
Municipal Law, the determination of the facts in a compensation
claim by the Workmen’s Compensation Board that respondent
has no claim under the Workmen’s Compensation Law is res
judicata and binding upon the County Court upon an applica-
tion for benefits under section 205 of the General Municipal Law,
based on the same facts. (Matter of Slattery v. Board of Esti-
mate & Apportionment, 271 N. Y. 346; Matter of Connelly v.
Samaritan Hosp., 259 N. Y. 187; Fitegerald v. Clarke & Son,
[1908] 2K. B. 796; Matter of Young v. Town of Kortright, 148
Mise. 481, 241 App. Div. 188; Matter of Post v. Burger & Gohlke,
216 N. Y. 544; Matter of Bennett v. Marine Works, 273 N. Y.
429; Matter of Bowen v. Saratoga Springs Comm., 267 App. Div.
928; Matter of Fagan v. Albany Evening Union Co., 261 App.
Div. 861; Matter of Holst v. New York Stock Each., 252 App.
Div. 233; Matter of Kenny v. Lord & Taylor, 254 N. Y. 532;
Cardillo v. Liberty Mut. Co., 330 U. 8. 469; Cudahy Co. v. Parra-
more, 263 U. 8. 418; Matter of Heite v. Ruppert, 218 N. Y. 148;
Tedesco v. General Elec. Co., 305 N. Y. 544.) III. The provisions
of the Workmen’s Compensation Law and the General Munici-

I ee
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pal Law have been integrated so that the volunteer fireman may
invoke the jurisdiction under either law and the determination
thereunder will be binding in any proceeding under the other.
(Bauman v. Town of Irondequoit, 204 Mise. 494; Merkle v. 110
Glen St. Realty Corp., 282 App. Div. 617.)

Burxg, J. This appeal tenders only the issue as to whether
a proceeding under the Workmen’s Compensation Law by this
petitioner is res judicata in a subsequent proceeding brought
by him under section 205 of the General Municipal Law. The
facts which present the issue are not in dispute.

The petitioner, a volunteer fireman, suffered injuries while
attending a parade and competitive drill in which his fire depart-
ment was engaged. Thereafter he applied for compensation
pursuant to the provisions of the Workmen’s Compensation
Law. An award was made by the referee to the petitioner and,
upon review therefrom by the Workmen’s Compensation Board,
the determination of the referee was reversed and the claim
dismissed. No appeal was taken. The board held that the
petitioner’s participation in the tournament was voluntary and,
hence, did not arise out of and in the course of employment. The
petitioner thereafter brought a proceeding in the County Court
of Nassau County for the benefits and medical disbursements
provided for volunteer firemen injured while performing fire-
manic duties under section 205 of the General Municipal Law.
The respondent stipulated that if testimony were taken on the
petition, the petitioner could sustain the allegations set forth
in the petition and that the only issue before the County Court
for determination was the validity of the affirmative defense
contained in the answer to the petition, which defense alleged
that the determination of the Workmen’s Compensation Board
was res judicata in a proceeding to recover benefits pursuant
to section 205 of the General Municipal Law. The County Court
granted judgment in favor of the petitioner. The Appellate
Division reversed.

The rule in determining whether a judgment or determination
under one statute is a bar to another proceeding under a different
statute was reviewed in Matter of Slattery v. Board of Estimate
& Apportionment (271 N. Y. 346). This court held that unless

ee 3;
ee

cases may be postulated where injuries are not covered by the
compensation statute but are covered by the broader provisions
of another statute, the determination of the board is binding.

In this case, the rule of finality does not apply. There are
essential differences between the two statutes. Section 205 of
the General Municipal Law is a broader statute and not sub-
stantially identical with section 10 of the Workmen’s Compensa-
tion Law. The legislative intent that the statutes were to serve
different purposes insofar as they protect volunteer firemen is
evident from the enumeration in the General Municipal Law
(§ 205, subd. 3) of activities other than those which might be
designated solely as employment as a fireman. It specifically
provides for compensation to a volunteer fireman injured in the
performance of his duties ‘‘ while attending any drill or parade
or inspection in which his company or department is engaged ’’.
Such activities are not referred to in the Workmen’s Compensa-
tion Law.

Compulsion is not the test as a volunteer fireman is not subject
to the usual restraints imposed as conditions of employment.
We have decided that the Legislature intended that if a volun-
teer fireman was injured in performing a voluntary firemanic
act which was authorized, permitted or approved by a compe-
tent authority within his department, he should be compensated
within the limits prescribed by section 205 of the General
Municipal Law (L. 1951, ch. 836). (Matter of Brown v. Towns
of Gates & Chili, 266 App. Div. 640, affd. 292 N. Y. 663.) Thus
an adjudication against a volunteer fireman in a compensation
proceeding does not include an adjudication that all factors are
present which would constitute a valid claim for benefits under
the General Municipal Law.

Here we have an instance where the fireman is covered by the
provisions of section 205 of the General Municipal Law and not
by the provisions of the Workmen’s Compensation Law. The
determinations of the Workmen’s Compensation Board are final -
and conclusive upon the parties only as to issues within its
jurisdiction. (Ogino v. Black, 304 N. Y. 872.) The issue sub-
mitted for disposition now was not within the jurisdiction of the
poard. Therefore the determination of the board does not
constitute a bar to this proceeding.

The order of the Appellate Division should be reversed and
that of the County Judge reinstated, with costs.

Conway, Ch. J., Dusmonp, Dyz, Fup, Fromssm, and Van
Vooruis, JJ., concur.
Order reversed, ete.
— Ee
In the Matter of Mortimmr M. Ross, Respondent, against Jamzs
R. Macpurr, as Commissioner of Motor Vehicles of the State
of New York, Appellant.

Argued April 12, 1955; decided July 8, 1955.

a
a

Jacob K. Javits, Attorney-General (Abe Wagman and Henry
S. Manley of counsel), for appellant. I. The Appellate Division
erred in holding that the commissioner did not have the power
to consider the two New York City speeding offenses in the chain
of violations. (Matter of Johnston v. Fletcher, 300 N. Y. 470;
Matter of De Martino v. Mealey, 284 N. Y. 231; Matter of
De Lymm v. Macduff, 305 N. Y. 501; Matter of Long v. Macduff,
284 App. Div. 61.) Il. The commissioner was justified in
suspending respondent’s license.

Wilford E. Neier for respondent. I. The appeal should be
dismissed. II. Section 71 (subd. 3, par. [d]), is unconstitutional
and void. (Matter of Seignious v. Rice, 273 N. Y. 44; Noyes
y. Erie & Wyoming Farmers Co-op. Corp. 170 Misc. 42;
Matter of Small v. Moss, 279 N. Y. 288; Packer Collegiate Inst.
v. University of State of N. Y., 298 N. ¥. 184; Matter of Fink
v. Cole, 302 N. Y. 246.) III. The findings, determination and
order of appellant are devoid of any findings that the convictions
upon which he based his determination were obtained in con-
formity with the provisions of section 335-a of the Code of
Criminal Procedure. (Matter of De Lynn v. Macduff’, 305 N. Y.
501.) IV. The decision of appellant contains no findings sufficient
to afford the court an intelligent basis for judicial review. (Matter
of Page v. Fletcher, 279 App. Div. 847.) V. Respondent, as a
matter of law and fact, is not an habitual violator of the Vehicle
and Traffic Law. VI. The determination of appellant was arbi-
trary, capricious, and an abuse of discretion and wholly without
foundation in fact or in law.

58 |
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Dvn, J. We now review the propriety of a determination of
the Commissioner of Motor Vehicles, suspending for fifteen days
the petitioner’s license to operate a motor vehicle, pursuant to
statutory authority permitting such suspension ‘for habitual
or persistent violation’? of the traffic laws and ordinances
(Vehicle and Traffic Law, § 71, subd. 3, par. [d]). Such deter-
mination has been annulled in an article 78 proceeding on the
ground that the commissioner should not have counted two of
the speeding convictions on which he relied in making his
determination for the reason that the proof failed to show that
the petitioner, when he pleaded guilty to the two speeding
charges, had been warned of the consequences with respect to his
operator’s license in conformity with section 335-a of the Code
of Criminal Procedure, with the result that, under the point
system procedure adopted by the hearing commissioner, the
minimum points required to constitute an habitual and persistent
violator were not met.

Upon this record such ruling is erroneous. At the statutory
hearing, held after due notice, the petitioner appeared in person
and by attorney. When asked to explain why his license should
not be suspended for habitual and persistent violation of the
Traffic Law, he readily admitted six prior convictions for traffic
violations, viz. :

The first on April 22, 1947, for speeding in Manhattan, which
he could not explain; the second, third and fourth convictions on
October 4, 1950, for passing three red lights in Hempstead, Long
Island, which he explanied were ‘‘ Right together ’? —‘‘ I must
have missed one and gone through the three”’; the fifth on
November 19, 1950, for speeding in The Bronx and for which no
explanation was offered, and a sixth on July 11, 1952, for speeding
in Johnsburg, New York, which he explained by saying that he
had failed to see a reduced speed zone sign in time to reduce
his speed from fifty-five miles per hour at which he was then
traveling, to thirty-five miles per hour as required.

In reaching the determination, the hearing commissioner
applied the point system which, to explain briefly, allots two
points for a speeding violation and one point for passing a red
light. A person who has six points in two years or eight points
in any period of time is considered to evidence persistent or
habitual violation.

ee 59
beeen

The petitioner attacks the determination on various grounds,
principal of which is the alleged unconstitutionality of section 71
(subd. 3, par. [d]) of the Vehicle and Traffic Law, in that legis-
lative functions have been delegated to an administrative body
without providing any criteria or standards defining the words
‘habitual’? or “persistent ’’. This is wholly without sub-
stance and must be rejected, as such a requirement in respect to
the administration of the traffic rules should be left to the
reasonable discretion of the administrative official (see Matter
of Marburg v. Cole, 286 N. Y. 202; American Power Co. v.
8. E. C., 329 U. 8. 90).

The circumstances under which a licensee may be deemed
guilty of habitual or persistent violation’? vary with the
changes in highway conditions, amount of traffic, type of control,
power and speed of vehicles, changes in local traffic regulations
and ordinances and a myriad of other elements which necessitate
the delegation of the formulation of specific rules to adminis-
trative officials (cf. Matter of Mandel v. Board of Regents,
250 N. Y. 173).

Section 335-a of the Code of Criminal Procedure does not
require any warning where there is involved a first or second
charge of speeding or going through a red light in violation of
local ordinances. The warning required is upon the third viola-
tion under the Vehicle and Traffic Law (§ 71, subd. 2, par.
[ce]). (Matter of Johnston v. Fletcher, 300 N. Y. 470; Matter
of De Martino v. Mealey, 284 N. Y. 231; Matter of De Lynn v.
Macduff, 305 N. Y. 501). Accordingly, when respondent was
arraigned in 1947 for the first of six speeding convictions, the
Magistrate had no duty to comply with section 335-a. There-
after the three red light violations occurred on October 4, 1950,
which, to give the respondent the benefit of the doubt, might be
considered as one violation because of the proximity of the
lights and this required no warning. Then there was the speed-
ing violation of November 19, 1950, which, for all intents and
purposes, may be considered respondent’s third violation.
Thereupon, under the commissioner’s point system, there were
seven points against the petitioner and, accordingly, one point
short of finding him an habitual offender by the commissioner’s

_own definition. With the July 11, 1952, speeding violation,
respondent accrued enough points to fall within the commis-

|

sioner’s definition of ‘‘ habitual ’’ or ‘‘ persistent ’? and, accord-
ingly, the Magistrate had the discretion to suspend or revoke
the respondent’s license. At that point, it was necessary that
the convicting Magistrate apprise respondent of the provisions
of section 335-a which, according to the certificate of conviction,
was done. Upon such a record, the determination of the com-
missioner was neither arbitrary nor capricious. The suspension
was justified.

The order of the Appellate Division should be reversed and
the determination of the Commissioner of Motor Vehicles rein-
stated, without costs.

Conway, Ch. J., Dusmonp, Furp, Fronssen, Van Voornis and
Bourxs, JJ., concur.

* Order reversed, ete.

In the Matter of Duetmar Box Co., Inc., Appellant. Airwa
Insurance Company et al., Respondents; Naviowan CommeEr-
cru Bang anp Trust Company, Respondents, et al., Defend-
ants.

Argued June 7, 1955; decided July 8, 1955.

a
Be

Roland Ford for appellant. I. Under the arbitration law as
amended in 1952 an appraisal is now arbitrable. (Hurst v. Litch-
field, 39 N. Y. 377; Finucane Co. v. Board of Educ. of City of
Rochester, 190 N. Y. 76; Greason v. Keteltas, 17 N. Y. 491; People
ea. rel. Union Ins. Co. v. Nash, 111 N. Y. 310; Miller v. President
of June. Canal Co. 53 Barb. 590, 41 N. Y. 98; Silver v. Western
Assur. Co., 164 N. Y. 881; Bishop v. Agricultural Ins. Co., 180
N. Y. 488; Yendel v. Western Assur. Co., 21 Misc. 348; United
States v. Robeson, 9 Pet. [U.S.] 319; President of D.é H. Canal
Co. v. Pennsylvania Coal Co., 50 N. ¥. 250.) II. The arbitration
law can be adapted to appraisals. (Matter of American Ins. Co.
[Wasserman], 208 App. Div. 168.) III. Since the contract of
insurance was valid when made, subsequent events or defenses
are immaterial in respect to an appraisal arbitration. (Matter
of Kahn (National City Bank], 284 N. Y. 515; Wilcow v. Ameri-
can Tel. & Tel. Co., 176 N. Y. 115.)

F. Walter Bliss, Warner M. Bouck and Francis J. Holloway
for respondents. I. The statutory provisions for appraisal of
loss under a standard fire insurance policy may not be enforced
as a compulsory arbitration under the arbitration law. (Matter

CI
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of American Ins. Co. [Wasserman], 208 App. Div. 168; Matter |
of Fitegerald [Continental Ins. Co.], 275 App. Div. 453; Syra-
cuse Sav. Bank v. Yorkshire Ins. Co., 301 N. Y. 403; Matter of
Sigelman v. Travelers Fire Ins. Co., 279 App. Div. 771; Matter
of Keppler v. Nessler, 225 App. Div. 99.) II. Assuming, argu-
endo, but not admitting that compulsory arbitration is a proper
remedy in some circumstances, the order of the Special Term
was erroneously granted because the policies under their own
terms had been rendered entirely void and unenforcible by the
fraudulent acts of appellant. (Matter of Behrens [Feuerring],
296 N. Y. 172; Matter of Lipman [Haeuser Shellac Co.], 289 N. Y.
76; Matter of Kallus [Ideal Novelty & Toy Co.], 292 N. Y. 459;
Matter of Zimmerman v. Cohen, 236 N. Y. 15; Alpert v. Admira-
tion Knitwear Co., 304 N. Y.1; Matter of Kramer & Uchitelle,
Inc., 288 N. Y. 467; Matter of Kahn [National City Bank], 284
N.Y. 515; Wilcox v. American Tel. é Tel. Co., 176 N. Y. 115.)

Fuxp, J. Whether the insured under a standard New York
fire insurance policy may compel the insurer to comply with the
provision for appraisal contained in such a policy, is the ques-
tion for decision.

Delmar Box Company, doing business in a frame building
situated on land leased from the New York Central Railroad in
New Scotland, New York, carried insurance in the aggregate
amount of about $23,000, issued by a number of insurance com-
panies. On April 13, 1954, a fire occurred, the alleged loss
amounting to some $33,000. In each of the policies was a pro-
vision for appraisal in the event of loss —in the form required
by subdivision 6 of section 168 of the Insurance Law — which
reads in this way:

“ Appraisal. In case the insured and this Company shall fail
to agree as to the actual cash value or the amount of loss, then,
on the written demand of either, each shall select a competent
and disinterested appraiser and notify the other of the appraiser
selected within twenty days of such demand. The appraisers
shall first select a competent and disinterested umpire; and
failing for fifteen days to agree upon such umpire, then, on
request of the insured or this Company, such umpire shall be
selected by a judge of a court of record in the state in which
the property covered is located. The appraisers shall then

ee

appraise the loss, stating separately actual cash value and loss
to each item; and, failing to agree, shall submit their differences,
only, to the umpire. An award in writing, so itemized, of any
two when filed with this Company shall determine the amount
of actual cash value and loss. Each appraiser shall be paid by
the party selecting him and the expenses of appraisal and
umpire shall be paid by the parties equally.”’

After the insurance companies, respondents herein, had
refused to consent to an appraisal, Delmar initiated this pro-
ceeding, pursuant to section 1450 of the Civil Practice Act,
for an order compelling them to comply with the policies’
appraisal provisions. At the same time, it commenced a sepa-
rate action at law, upon the policies, to recover the amount of
the fire loss. In opposition to the petition, respondents, by
answer and affidavit, set forth their reasons for rejecting the
appraisal demand. They claimed that petitioner had misrepre-
sented and concealed material facts, had sworn falsely in rela-
tion to the subject matter of the loss and, in addition, had no
insurable interest in the building since it was situated on land
leased from the New York Central Railroad under a lease which
had expired.

The Appellate Division, reversing the court at Special Term,
dismissed the petition on the ground that the provisions for
appraisal ‘‘ do not constitute enforcible agreements to arbitrate
controversies arising thereunder,’’ and with that disposition
we agree.

A number of basic distinctions have long prevailed between
an appraisement under the standard fire policy and a statutory
arbitration. An agreement for arbitration ordinarily encom-
passes the disposition of the entire controversy between the
parties, upon which judgment may be entered after judicial
confirmation of the arbitration award (Civ. Prac. Act, § 1464),
while the agreement for appraisal extends merely to the reso-
lution of the specific issues of actual cash value and the amount
of loss, all other issues being reserved for determination in a
plenary action. (See Matter of American Ins. Co., 208 App.
Div. 168, 170-171.) Appraisal proceedings are, moreover,
attended by a larger measure of informality (see Strome v. Lon-
don Assur. Corp., 20 App. Div. 571, 573, affd. 162 N. Y. 627),

and appraisers are ‘‘ not bound to the strict judicial investiga-
tion of an arbitration.’? (See Matter of American Ins. Co.,
supra, 208 App. Div. 168, 171.) Arbitrators are required to
take a formal oath (Civ. Prac. Act, § 1455), and may act only
upon proof adduced at a hearing of which due notice has been
given to each of the parties (Civ. Prac. Act, § 1454). They may
not predicate their award upon evidence garnered through an
ex parte investigation of their own, at least unless so authorized
by the parties. (See Berizet Co. v. Krausz, 239 N. Y. 315.)
Appraisers, on the other hand, are not required to take an oath.
(See Syracuse Sav. Bank v. Yorkshire Ins. Co., 801 N. Y. 403,
411; Wurster v. Armfield, 175 N. Y. 256, 264; Williams v. Hamil-
ton Fire Ins. Co., 118 Mise. 799.) They are likewise ‘‘ not
obliged to give the claimant any formal notice or to hear evi-
dence ’’; and they may apparently proceed by ew parte investi-
gation, so long as the parties are given an opportunity to make
statements and explanations to the appraisers with regard to
the matters in issue. (See Kaiser v. Hamburg-Bremen Fire
Ins. Co., 59 App. Div. 525, 530, affd. 172 N. Y. 663; Townsend
v. Greenwich Ins. Co., 86 App. Div. 323, 326-327, affd. 178 N. Y.
634; Matter of American Ins. Co., supra, 208 App. Div. 168, 171.)
Furthermore, in an arbitration, all the arbitrators, if there
be more than one, ‘‘must meet together and hear all the allega-
tions and proofs of the parties ’”’ (Civ. Prac. Act, § 1456). The
standard appraisal clause, in contrast, specifically recites that
the umpire is not to participate in the appraisal in all cases,
but is only to pass on such differences as there may be between
the appraisers designated by the respective parties. In addi-
tion, the vacatur of an arbitration award invariably results in
a new arbitration (Civ. Prac. Act, § 1462; see Matter of
Fletcher, 237 N. Y. 440, 449), whereas after an appraisal award
has been set aside without any fault on the part of the insured,
he is not required to submit to any further appraisement but is
free to litigate the issues in an action at law on the policy. (See
Gervant v. New England Fire Ins. Co., 306 N. Y. 398, 400.)
And, at least until 1941, the decisions were uniformly to the
effect that the standard provision in a fire insurance policy for
appraisal did not constitute an agreement for arbitration and
was not specifically enforcible under the statutory procedure
applicable to contracts for arbitration. (See Matter of American

Pe 8 = «
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Ins. Co., supra, 208 App. Div. 168; see, also, Wurster v. Armfield,
supra, 175 N. Y. 256, 264; Strome v. London Assur. Corp., supra,
20 App. Div. 571, 572, affd. 162 N. Y. 627; Townsend v. Greenwich
Ins. Co., supra, 86 App. Div. 323, 326-327, affd. 178 N. Y. 634.)
The appraisal provisions were recognized and enforced by the
courts only to the extent that the insured was prevented from
maintaining an action on the policy in the event of his failure to
comply therewith. (See, eg. Silver v. Western Assur. Co.,
164 N. Y. 381.) If the defaulting party happened to be the
insurance company, the insured could disregard the appraisal
provisions and present all the issues for determination in an
action at law upon the policy. (See Uhrig v. Williamsburgh
City Fire Ins. Co., 101 N. Y. 362.) The insured, however, had
no remedy available to compel the insurance company specifically
to comply with the appraisal provisions. (Cf. Matter of Fletcher,
supra, 237 N. Y. 440.)

In 1941, section 1448 of the Civil Practice Act, the opening
section in the article governing arbitration proceedings, was
amended by adding thereto the following (L. 1941, ch. 288):
‘Such submission or contract [for settlement by arbitration
of a controversy between the parties] may include questions
arising out of valuations, appraisals or other controversies
which may be collateral, incidental, precedent or subsequent to
any issue between the parties.’’

The Appellate Division for the third department — the same
court which made the determination here —held in 1949 that
the amendment effected an extension of the provisions govern-
ing arbitration to an agreement for appraisal under a fire insur-
ance policy. (See Matter of Fitegerald [Continental Ins. Co.],
275 App. Div. 453.) However, that decision was short-lived,
for, in the very next year, this court expressed a contrary view
in the case of Syracuse Sav. Bank v. Yorkshire Ins. Co. (supra,
301 N. Y. 403). ‘‘ We see nothing in section 1448 of the Civil
Practice Act as amended in 1941,’ Judge Dvz there wrote (301
N. ¥., at pp. 410-411), ‘‘ requiring the appraisal authorized by
section 168 of the Insurance Law to be treated as an arbitration
proceeding. * * * There is nothing in the policy provision
relating to appraisal which gives an appraiser the status of an
arbitrator * * *. It is well established that the determina-
tion of a fire loss is not an arbitration proceeding ’’. (See, also,

Ge
ees

Matter of Sigelman (Travelers Fire Ins. Co.], 279 App. Div. 771.)

It is clear, therefore, that the 1941 amendment to section
1448, while authorizing the inclusion of questions arising out of
valuations or appraisals in a contract ‘‘ to settle by arbitra-
tion ’’ a controversy between the parties, did not have the effect
of converting the informal appraisal provided for by the
standard fire policy into an arbitration proceeding.

It is urged, however, that the extension of the arbitration
statute to fire insurance appraisals has been accomplished by
a further amendment to section 1448, enacted in 1952, which
inserted the words ‘‘ or independent of ’’ in the sentence added
in 1941, so that the latter now reads as follows (L. 1952,
ch. 757): ‘‘ Such submission or contract may include questions
arising out of valuations, appraisals or other controversies
which may be collateral, incidental, precedent, subsequent to,
or independent of any issue between the parties.’? But it is
manifest that the new words “independent of ’? add nothing,
as respects the problem here presented, to the words “‘ collat-
eral ’’ or “‘ incidental,’’ and that, consequently, no greater effect
ean be given to the 1952 change than has been accorded to the
1941 modification. Neither amendment discloses any legislative
design to alter the settled rule that ‘‘ the determination of a
fire loss [by appraisal] is not an arbitration proceeding ’’. (See
Syracuse Sav. Bank v. Yorkshire ins. Co., supra, 301 N. Y.
403, 411.)

It is a cardinal principle of statutory interpretation that the
intention to change a long-established rule or principle is not
to be imputed to the legislature in the absence of a clear
manifestation. (See Homnyack v. Prudential Ins. Co., 194
N. Y. 456, 460; Seligman v. Friedlander, 199 N. Y. 373, 376.)
The consequence of applying the statute governing arbitration
to fire insurance appraisals would entail, not only radical altera-
tion of the settled practice in appraisal proceedings, but actual
abrogation of the greater informality which has long prevailed
therein. There is no doubt that the legislature may make such
changes if it sees fit, but no such design may be ascribed to that
body in the absence of a clearer showing than is to be found in
this amendatory statute.

There is thus no indication whatever that the legislature
intended to make applicable to fire insurance appraisals the

| 67
se

more formal practice prevailing in arbitration with regard to
such matters as oaths, notice and hearing, the sittings of the
arbitrators, the entry of judgment upon confirmation of an
award or the consequences following upon the vacatur of an
award. (Cf. Matter of Fletcher, supra, 237 N. Y. 440, 449.)
Reliance is placed upon the views expressed by the assemblyman
who introduced the bill in 1952, but those views cannot serve
as a reliable index to the intention of the legislators who passed
the bill. It is sufficient to note that they were stated, not in the
course of debate on the floor of the legislature, but in a memoran-
dum submitted to the governor after the passage of the bill, and
there is no showing that the other legislators were aware of the
broad scope apparently intended for the bill by its sponsor.
(Cf. Matter of Morse [Bank of America], 247 N. Y. 290, 302-303;
Woollcott v. Shubert, 217 N. Y. 212, 221-222; 2 Sutherland on
Statutory Construction [3d ed., Horack, 1943], § 5011.)

It may, perhaps, be desirable to provide a procedure whereby
the insured may obtain specific enforcement, as against the
insurance company, of the agreement for appraisal. If such be
its aim, the legislature may accomplish it by a statute clearly
and specifically drawn for that purpose. A court cannot, how-
ever, read that design into the statute here involved, particularly
when the result would be, not merely to permit the enforcement
of such appraisal provisions, but to effect the wholesale importa-
tion, into appraisement practice, of the entirely different pro-
cedure governing arbitration.

The order should be affirmed, with costs.

Conway, Ch. J., Drsmonp, Dyn, Fronssen, Van Voornis and
Burks, JJ., concur.

Order affirmed.

Axper Brouss Company, Inc., Appellant, v. BH. E. Comnor & Co.,
Inc., Respondent.

Argued April 14, 1955; decided July 8, 1955.

Myron Kommel for appellant. I. Plaintiff was deprived of
its day in court. (People v. Faber, 199 N. Y. 256; Wilkins v.
Abbey, 168 Mise. 416; McCarthy v. Odell, 202 App. Div. 784;
Green v. Telfair, 11 How. Prac. 260.) II. Jurors’ affidavits may
properly be considered. (Schrader v. Joseph H. Gertner, Jr., |
Inc., 282 App. Div. 1064.) III. There is no competent evidence |
to sustain the verdict. IV. The court erroneously charged as to
what the issue was. V. The blouse was improperly admitted
into evidence. VI. There is more than sufficient doubt about this
verdict to warrant a new trial.

William H. West, Jr., for respondent. I. The remarks of the
trial judge, in his charge and instructions to the jury prior to
verdict, were not in any way coercive. (Green v. Telfair, 11
How. Prac. 260; Conners v. Walsh, 131 N. Y. 590; White v.
Calder, 35 N. Y. 183; People v. Faber, 199 N. Y. 256; McCarthy
vy. Odell, 202 App. Div. 784; People v. Sheldon, 156 N. Y. 268.)
IL. Affidavits and statements of jurors in this case may not be
used to impeach their verdict. (People v: Sweetland, 298 N. Y.
899; People v. Sprague, 217 N. Y. 373; Jackson v. S. é D. Motor

ee 69

Lines; 272 App. Div. 990; Davis v. Lorenzo’s, Inc., 258 App. Div.
933; Payne v. Burke, 236 App. Div. 527, 262 N. Y. 630; Wilkins
v. Abbey, 168 Misc. 416; Williams v. Montgomery, 60 N. Y. 648;
Schrader v. Joseph H. Gertner, Jr., Inc., 282 App. Div. 1064.)
III. The manner in which the jurors’ affidavits were obtained in
this case should preclude their use, regardless of any question
of competency. IV. Plaintiff-appellant’s failure to note an
exception to the portion of the charge now complained of pre-
cludes its review at this time. (Thomas v. First Nat. Bank of
Lisbon, 263 App. Div. 476.) V. The facts of this case have
been found by a jury, whose verdict was affirmed by the Appel-
late Division below, and they cannot be reviewed by this court.
(Fritz v. Tompkins, 168 N. Y. 524; Wellisch v. John Hancock
Mut. Life Ins. Co., 293 N. Y. 178; Frankenberger v. Schneller,
258 N. Y. 270; Meteroth v. City of New York, 241 N. Y. 470; City
of New York v. Wilson & Co., 278 N. Y. 86.) VI. The court
correctly charged the jury as to the issues. (Alper Blouse
Co. v. Connor & Co., 282 App. Div. 123; Owen v. Rochester-
Penfield Bus Co., 304 N. Y. 457.) VII. The blouse was properly
admitted into evidence. VIII. There is no doubt about the
verdict herein which warrants a new trial.

For, J. This action was brought by Alper Blouse Company
to recover the purchase price paid to E. E. Connor & Co. for
some nylon cloth, which plaintiff refused to accept because of
its allegedly defective quality. Although the case has been
twice tried, this is the first time it has been before this court.
The first trial ended at the conclusion of plaintiff’s case upon
defendant’s motion for a nonsuit; the Appellate Division, how-
ever, reversed and directed a new trial on the ground that
plaintiff had made out a prima facie case. The second trial
resulted in a verdict for defendant and the ensuing judgment
has been affirmed, by a three to two vote, in the Appellate
Division. It is our view that there must be a new trial for the
reason that there is a lack of evidence to support the verdict in
defendant’s favor.

In January of 1951, Alper ordered from Connor some 5,000
yards of certain goods, described as nylon tricot, for use in the
manufacture of blouses, paying, at the agreed price of $1.50 a
yard, a total of $7,654.50. The buyer received the goods and dis-

70 |

covered, when it started to cut them preparatory to manufacture, |
that they ‘‘ curled instead of lying flat.”’ This defect, it was estab-
lished, rendered the material unsuitable for use in the large-scale
manufacture of blouses, since it seriously increased the difficulty
and costliness of the cutting and sewing operations. The seller,
recognizing the defective condition of the material, advised
Alper to return the goods to the seller’s dyer and finisher and
agreed that it would send Alper a second sample subject to its
approval. The purchaser returned the goods and sometime
thereafter received the second sample. That sample was, con-
cededly, never approved; Alper found it unsatisfactory and so
advised Connor. Although Connor’s president counseled
patience and said that he would later contact Alper, he did
nothing, except that, some weeks later, he telephoned to insist
that the second sample was ‘‘ good,’’ that all of the merchandise
had been refinished in accordance with that sample and that it
was being shipped to Alper. The latter, however, refused to
accept the refinished material and commenced this suit to recover
its purchase price.

It is undisputed that the goods, when first delivered, were
unsatisfactory and quite unsuitable for the mass production of
blouses, the purpose for which, it was known, they were to be
used. The buyer was at that time privileged to return them and
receive back the purchase price which it had paid. However,
instead of insisting upon its full rights, Alper elected, so to
speak, to enter into a special kind of contract whereby the scller
agreed to take back the goods, refinish them, and then submit
a new sample for its purchaser’s approval.

That the second sample was sent ‘‘for approval’? was
admitted by defendant Connor, as was plaintiff Alper’s dis-
satisfaction with the sample and defendant’s subsequent delivery
of the remainder of the goods despite plaintiff’s failure to give
its approval. Where a sale is thus made subject to the buyer’s
satisfaction, his approval becomes a condition precedent to his
obligation to accept the merchandise. (See, e. g., Doll v. Noble,
116 N. Y. 230; Duplex Safety Boiler Co. v. Garden, 101 N. Y.
887; Atlas Shoe Co, v. Lewis, 202 App. Div. 244, 248; see, also,
1 Williston on Sales [1948], §§ 191, 191a, pp. 483-488). While
the power to withhold approval is an untrammelled one where
the object of the contract is ‘‘ to gratify taste, serve personal

| . 7
ee

convenience, or satisfy individual preference ’’ (Duplex Safety
Boiler Co. v. Garden, supra, 101 N. Y. 387, 390), a different rule
ordinarily prevails, in this state, for commercial contracts where
the suitability of the goods is a matter of ‘‘ mechanical fitness,
utility, or marketability ’? (3 Williston on Contracts [1936],
p. 1946) ; in such a case, the contract is ‘‘ construed as imposing
upon the seller the requirement only that a reasonable man
* * * be satisfied with the performance.’’? (1 Williston on
Sales, op. cit., § 191, p. 485; see, also, Duplex Safety Boiler Co. v.
Garden, supra, 101 N. Y. 387; Hummel v. Stern, 21 App. Div. 544,
affd. 164 N. Y. 603; 1 Restatement, Contracts, § 265, p. 380.)

The contract before us in no way involves personal taste or
preference, and, therefore, if the sample depicted goods suitable
for the purpose of large-scale blouse manufacture, plaintiff was
under the necessity of approving it. However, even if defendant
established that the sample was satisfactory (cf. Doll v. Noble,
supra, 116 N. Y. 230, 232-233; Bowery Nat. Bank v. Mayor,
63 N. Y. 336, 339) and, by that token, that plaintiff was not
privileged to refuse approval, that does not dispose of this
appeal. In a case of sale by sample, ‘‘ There is an implied
warranty that the bulk shall correspond with the sample in
quality ’’ (Personal Property Law, § 97), placing upon the seller
the burden of demonstrating that the goods subsequently shipped
actually matched the sample exhibited. (Cf. e. g., Frankel v.
Foreman & Clark, 33 F. 2d 83, 86 [applying the law of New
York]; also, 1 Williston, op. cit., § 255, p. 677.) Consequently,
if the seller failed to prove that fact, he could not insist upon
acceptance by the buyer. (See, e. g., Henry & Co. v. Talcott,
175 N. Y. 385, 390; see, also, 4 Williston on Contracts, op. cit.,
§ 1002, p. 2762.)

The record before us is searched in vain for any evidence that
the bulk of the goods was similar to the sample. Indeed, the
testimony of witnesses, including those called by defendant
itself, indicates that it was not similar —that the piece repre-
senting the bulk had a stiffer finish, was less soft than the
sample and more difficult to handle. At any rate, and quite
apart from such testimony, it is clear that in the absence of
proof that the goods shipped to plaintiff corresponded with the
sample in quality, plaintiff was not obligated to accept them.

a
|

Since we are reversing and directing a new trial for the reason
stated above, there is no need to discuss plaintiff’s further con-
tention that certain of the trial judge’s remarks to the jurors,
after they had announced their inability to agree, induced them
to return with a hasty and ill-considered verdict. It is enough
to say that, while the challenged statements were certainly not
so designed or intended, they may unfortunately have had a
coercive and propulsive effect.

The judgment of the Appellate Division and that of the Trial
Term should be reversed and a new trial granted, with costs to
abide the event. ,

Conway, Ch. J., Dusmonp, Du, Froussnn, Van Voornis and
Burxg, JJ., concur.

Judgments reversed, ete.

Tuomas J. Harris, Respondent, v. Auustats Insurance Co.,
Appellant, et al., Defendants.

Argued March 10, 1955; decided July 8, 1955.

Asher Marcus for appellant. I. ‘‘ Water ’’, in the sense used
in the policy, was not the ‘‘ originating cause ’”’ of the incident
in issue. (Matter of Stradar v. Stern Bros., 184 App. Div. 700;
onkin v. California Ins. Co. of San Francisco, 294 N. Y. 326.)
IT. The Appellate Division’s construction of defendant’s com-
rehensive policy was an unreasonable one which ought not be
pproved by this court. (Schoellkopf v. Coatsworth, 166 N. Y.
7; Moeller v. Associated Hosp. Service of Capital Dist., 304
. ¥. 73; Russell v. Allerton, 108 N. Y. 288.) III. Plaintiff’s
loss was not an “ accidental loss’? as defined in the policy.
(Borneman v. John Hancock Mut. Life Ins. Co., 289 N. Y. 295.)
VV. Assuming that the impact of the automobile with the water
aused sufficient damage to the automobile so as to result in
its eventual destruction, the impact itself constituted a colli-
ion, damages for which are expressly excluded by the policy.
Freiberger v. Globe Ind. Co., 205 App. Div. 116; Polstein v.
acific Fire Ins. Co., 122 Misc. 194; Harris v. American Cas. Co.,
3 N. J. L. 641; Southern Cas. Co. v. Johnson, 24 Ariz. 221;

4 es
ee

Haller & Co. v. International Ind. Co., 238 Ill. App. 361; Fire-
man’s Ins. Co. of Newark v. Savery, 88 Ind. App. 296; Power
Motor Co. v. United States Fire Ins. Co., 69 Mont. 563.) V. The |
water damages contemplated by the comprehensive coverage of
the policy sued upon were not the damages for which plaintiff
brought the action herein. (Tonkin v. California Ins. Co. of
San Francisco, 294 N. Y. 326.)

Sydney H. Harris for respondent. I. The court properly
refused to charge defendant’s request that if the jury finds
that the accident between the car and the water was a collision,
then they should find for defendant. II. Plaintiff’s loss was
within the scope of the policy issued to him. (Tonkin v. Cali-
fornia Ins. Co. of San Francisco, 294 N. Y. 326; Wheeler v.
Phemia Ins. Co., 203 N. Y. 283; Bird v. St. Paul Fire & Marine
Ins. Co., 224 N. Y. 47; Bolling v. Northern Ins. Co. of N. Y.,
280 N. Y. 510; Block v. Standard Ins. Co. of N. Y., 292 N. Y. 270.)
IIL. Wording in the policy must be construed most strongly
against the insurer. (Liverpool ete. Ins. Co. v. Kearney, 180 U. 8.
182; Hartol Products Corp. v. Prudential Ins. Co. of America,
290 N. Y. 44; Gillet v. Bank of America, 160 N. ¥. 549; Moran
v. Standard Oil Co., 211 N. Y. 187.)

Fut, J. Driving in a heavy rainstorm, in a section where
there were signs, ‘‘ Flood area, caution,’’ plaintiff ran into a
puddle of water some 50 feet long and 8 inches deep. The right
side of his car hit the water, traveling at a speed of about 45
miles an hour, and he felt the car pull to the right. He tried to
steer to the left in order to stay on the highway, but the car
kept pulling to the right, then mounted an embankment, turned,
ever, and was substantially demolished. ;

In this action, plaintiff seeks to recover for the damage under
an automobile insurance policy issued by defendant, which
embraced ‘‘losscausedby * * * water,’’ but excluded dam-
age caused by “‘ collision ” or ‘‘ upset ’’ of the vehicle. Morel
precisely, the policy proper provided —in ‘‘ Coverage H ’’? +
that defendant insurance company would ‘‘ pay for loss to the
owned automobile * * * caused by missiles, falling objects,
fire, theft, explosion, earthquake, windstorm, hail, water, flood
vandalism, riot or civil commotion ’’ explicitly excluding loss|
occasioned by collision between it and another object or by its|

Le 5

upset. <A rider to the policy —‘‘ Coverage R’’—similarly
recited that defendant would ‘‘ pay for all other loss to the owned
automobile, except loss caused by collision between it and
another object or by its upset, and except that $50 shall be
deducted from the amount of each loss. Loss caused by missiles,
falling objects, explosion, earthquake, windstorm, hail, water,
flood, vandalism, riot or civil commotion shall not be deemed
loss caused by collision or upset.’? The term “ loss ’’ was defined
as ‘‘each direct and accidental loss of or damage to the
automobile.”’

An automobile mechanic, who examined the car after the acci-
dent, found that the tie rod controlling the steering mechanism
had been bent, and he testified that such damage to the rod could
have been caused by the impact of plaintiff’s speeding car with
the puddle of water. The trial court denied defendant’s motion
to dismiss the complaint, and instructed the jury to find for
the plaintiff if it concluded that the tie rod was bent as a result
of its ‘‘ coming in contact ’’ with the water and that the accident
was occasioned by ‘‘ the damage to the tie rod.’’ Following a
verdict for plaintiff for the value of the car, and successive
affirmances by the Appellate Term and the Appellate Division,
defendant has appealed to this court by leave of the Appellate
Division.

There can be no doubt, under the evidence and the theory on
which the case was submitted to the jury, that any damage to
the tie rod of plaintiff’s car resulting from contact with the
puddle of water was caused, not by any destructive action of
the water as such, but solely by reason of the impact or collision
of the fast-moving car with the body of water. There was no
claim or suggestion that the water itself, as water, could have
hent the tie rod. Rather, it was the force of the collision with
the puddle of water, as just another tangible body or object,
that brought about the accident.

The question for decision is, of course, the meaning of the
policy terms embracing ‘‘loss caused by * * * water,’’ in
their interrelation with the provisions excluding damage result-
ing from “‘ collision ’’ or ‘‘ upset.’’ In approaching that inquiry,
account must be taken of ‘‘ the reasonahle expectation and pur-
pose of the ordinary business man ’’ in making the contract.
(Bird v. St. Paul Fire & Marine Ins, Co., 224 N. Y. 47, 51.) The

16 Le
epee}

words of the policy are to be read in context, the language con-
strued fairly and reasonably, with an eye to the object and pur-
pose sought to be accomplished by the writing. Wise is the
caution that courts are ‘‘ not to make a fortress out of the diction-
ary ’’ (Cabell v. Markham, 148 F. 2d 787, 739), for, to cull from an
opinion of Mr. Justice Houmas, ‘‘ A word is not a erystal, trans-
parent and unchanged, it is the skin of a living thought and may
vary greatly in color and content ’’ according to the cireum-
stances in whichitisused. (Towne v. Hisner, 245 U.S. 418, 425.)

To ascribe to the concept of ‘‘ water ’’ damage the broad con-
tent urged by plaintiff, embracing any accident in any way trace-
able to water, would not only extend the coverage far beyond
that contemplated by the policy, but would nullify the specific
exclusion of the hazards of ‘‘ collision ’’ and ‘‘ upset.’? In view
of the much lower premium payable because of such exclusion,
the insured could not reasonably have expected the coverage of
the policy to extend, nevertheless, to the peril of ‘ collision ”’
with a body of water or any other body or object. It might just
as well be contended that the policy protects against a collision
or upset occasioned by skidding on a wet or watery road. There
could, of course, be no possible basis for any such claim, and
the difference between a skid and what here occurred is one
simply of degree, not of kind. The only fair and reasonable
interpretation is that ‘‘loss caused by * * * water’?
within the sense of this policy covers only hazards naturally
associated with water’s distinctive and peculiar properties and
engendered by the destructive power of water as such, as in
eases of submersion, inundation or leakage.

Nor is plaintiff’s broad construction warranted by the lan-
guage of ‘‘ Coverage R,”’ reciting that loss caused by water or
any of the other specified risks ‘* shall not be deemed loss caused
by collision or upset.’”? Quite apart from the considerations
noted above, the word ‘‘ water ’’ in that clause must be read
and considered in relation to the other hazards with which it
is there grouped, under the familiar principle of noscitur a
soctis. (See, e. g., Atkin v. Wasson, 24 N. Y. 482, 484; Maryland
Cas. Co. v. Finch, 147 F. 388, 395.) All of the other risks
listed with ‘‘ water ’? — namely, ‘‘ missiles,’’ ‘‘ falling objects,’’
“« explosion,’ ‘‘ earthquake,”’ ‘* windstorm,”’ ‘‘ hail,’’ ‘‘ flood,”’
“vandalism,’? ‘riot? and ‘‘ civil commotion ’’— represent

eee | 77
re

forces that would produce damage by being propelled against,
or by actively operating upon, the insured automobile. The
vehicle encountering one of these hazards would thus be the
object of the destructive action insured against, rather than
itself an operative agency or instrumentality. In this context,
then, regardless of whether it might have a broader scope
in some other context, the term ‘‘loss caused by * * *
water ’’ must be taken to comprehend only the damaging effect
of ‘‘ water ’? when it operates, as an active agent, in moving
against or falling upon the automobile, and not, as in the present
case, when its role is merely that of an object which the vehicle
itself moves against or strikes. It is in the former situation
alone that the policy provision in question assumes meaning
and purpose.

Our decision in Tonkin v. California Ins. Co. (294 N. Y. 326)
does not call for any different result; its resemblance to the
present situation is purely superficial. In that case, as plaintiff
was driving along, a gust of smoke from a fire that had broken
out under the dashboard of his car obscured his vision and
caused him to lose control and to collide with another vehicle.
Plaintiff brought suit under a policy which covered loss by fire,
but excluded the hazard of collision. We held that the damage
resulting from both the collision and the fire was brought about
by the fire and, accordingly, came within the fire coverage of
the policy.

The collision in Tonkin, though not in itself an insured peril,
was, nevertheless, within the policy’s compass, since it was the
proximate consequence of the precise hazard, i.e., fire, desig-
nated in the policy. Here, on the other hand, the upset of plain-
tiff’s car and the ensuing demolition stemmed, not from an
eventuality covered by the policy, but, primarily and exclusively,
from the specifically excepted peril of impact with an object
which happened to be liquid. The loss is, therefore, not one
for which recovery may be had under this policy. As Presiding
Justice Prox, also eschewing an overly literal interpretation
of the terms of the policy, aptly wrote in his dissent below,
“There was no water damage in the sense that anyone would
think of water damage.’’

The judgments should be reversed and the complaint dis-
missed, with costs in all courts.

78 PCs
enema!

Frozsszx, J. (dissenting). Plaintiff secured from defendant-
appellant its insurance policy, which contained the following
paragraph: ‘‘ COVERAGE H— COMPREHENSIVE INSUR-
ANCE To pay for loss to the owned automobile [except
for collision with another object or upset] but including
* * * joss caused by * * * water, flood’? (emphasis
supplied). An indorsement was added to said policy, and in a
paragraph entitled ‘‘ COVERAGE R— $50 DEDUCTIBLE
COMPREHENSIVE ”’, the insurer in subdivision 3 thereof
expressly agreed to ‘‘ pay for all other loss to the owned auto-
mobile [except for collision with another object or upset, and
a $50 deduction] * * * Loss caused by * * * water,
flood * * * shall not be deemed loss caused by collision or
upset ’’. An additional premium was charged for this coverage,
the total premium paid having been $94.07.

There is no qualification in the policy that the water had to
be in the form of rain or in any other form; that it had to
operate ‘‘ as an active agent, in moving against or falling upon
the automobile ’’, that the coverage embraces ‘‘ only hazards
naturally associated with water’s distinctive and peculiar prop-
erties and engendered by the destructive power of water as such,
as in cases of submersion, inundation or leakage ’’ as stated in
the prevailing opinion; or that the damage had to be a ‘‘ water
damage ’’ as stated in the dissenting opinion of the Appellate
Division. There was no qualification whatever.

Courts have no right to make contracts for people, nor write
provisions into them. We concern ourselves ‘‘ with what the
parties intended, but only to the extent that they evidenced what
they intended by what they wrote’? (Raleigh Associates v.
Henry, 302 N. Y. 467, 473). Here the insurance company, in
the clearest language, wrote that it would ‘‘ pay for loss * * *
caused by * * * water, flood ’’, but, recognizing that col-
lision could occur between this insured automobile and water,
it additionally provided so as to remove all ambiguity, and with-
out any qualification, ‘‘ Loss caused by * * * water * * *
shall not be deemed loss caused by collision or upset’. How
much more plainly can language be written?

In the instant case, plaintiff, accompanied by his wife and
daughter, was driving his comparatively new car from Montauk,

a 719
Deane

Long Island, during a heavy rain. He was traveling on the right
or outside lane of Route 39, a three-lane highway, at between
40 and 45 miles per hour and approached Southampton at about
2:30 p.m. Since it had been raining heavily all day, there was
sufficient water to create a flooded condition. He saw a sign
reading ‘‘ Flood area, caution.”? As he turned a bend in the
road, in the right lane, the right side of his car came into con-
tact with a sheet of water 50 feet long and two thirds of a foot
deep. Plaintiff tried to turn to the left, away from the flood
waters, but his car pulled to the right, turned over and ended
up on an embankment. It was established below that the water
damaged the tie rod of plaintiff’s car, as a result of which he
lost control. Plaintiff was rightfully on the highway traveling
in the proper lane, well within the speed limit permitted by law,
and were it not for the water which flooded the highway, he
- would not have suffered the damage to his automobile. Thus,
since the policy expressly provides unequivocally that
“« Loss caused by * * * water, flood * * * shall not be
deemed loss caused by collision: or upset ’’, I agree with the
three courts below that plaintiff was entitled to recover.
Tonkin v. California Ins. Co. (294 N. Y. 326) is definitely
controlling here. There plaintiff had a comprehensive insurance
policy virtually identical with that in the case before us. A gust
of smoke from fire under the dashboard of plaintiff’s auto
caused him to lose control of the vehicle so that it collided with
another car. The defendant conceded the fire damage amounting
to $38, but disclaimed liability for the damage attributable to
the subsequent collision in the sum of $477.30, on the ground
that the latter was expressly excluded from the policy coverage.
We rejected that contention, saying (p. 329): ‘‘ The policy
language is definite enough to exclude loss when collision is the
primary and exclusive cause, and it would do so here except
for the fact that fire—the hazard insured against —was the
factor causing the driver to lose control of the vehicle and was
so closely associated with it in point of time and character as
to constitute the proximate producing cause of the collision.’’
(Emphasis supplied.) The proximate consequence of the pre-
cise hazard insured against was within the policy’s compass in
both cases, except that it was fire in the Tonkin case (supra) and

80 eee

water in this case; both hazards caused the drivers to lose control
of their cars after doing nominal damage initially —$38 in the
Tonkin case, a bent tie rod in this case.

Finally, even assuming that the language employed by defend-
ant in its insurance policy were doubtful or uncertain in its
meaning (which I do not concede), the law is firmly established
that all ambiguity must be resolved in favor of the policyholder
and against the insurer. (Tonkin v. California Ins. Co., supra,
294 N. Y., at pp. 328-329; Hartol Products Corp. v. Prudential
Ins. Co., 290 N. Y. 44, 49 [and cases therein cited]; Lachs v.
Fidelity € Cas. Co. of N. Y., 306 N. Y. 357, 365-366; Royal Ins.
Co. v. Martin, 192 U. 8. 149, 162; Liverpool etc. Ins. Co. v.
Kearney, 180 U. S. 182, 136.)

The judgment appealed from should be affirmed, with costs.

Conway, Ch. J., Dusmoxp, Van Voornis and Burgs, JJ., con-
cur with Futo, J.; Froussnt, J., dissents in an opinion in which -
Dyn, J., concurs.

Judgments reversed, etc.

Le
In the Matter of Marvin Surrunrn, Jr., an Infant, et al., Appel-
lants. Wimam E. Mosusr, as Deputy Commissioner of
Health for Erie County Health Department, Respondent.

Argued May 23, 1955; decided July 8, 1955.

William G. Conable and Whitney W. Gilbert for appellants.
I. New findings of fact by the Appellate Division are unsup-
ported by the evidence. (Matter of Vasko, 238 App. Div. 128;
Matter of Rotkowitz, 175 Mise. 948; Matter of Sisson, 152 Mise.
806; Pierce v. Society of Sisters, 268 U. 8. 510; Houghtaling v.
Stoothoff’, 259 App. Div. 854; Braisted v. Brooklyn & Rockaway
Beach R. R. Co., 46 App. Div. 204; Haber v. Paramount Ice
Corp., 264 N. Y. 98; Martin v. Martin, 308 N. Y. 136.) II. The
Appellate Division exceeded its constitutional authority in
ordering an operation over the protests of the parents. (Matter
of Vasko, 238 App. Div. 128; People v. Pierson, 176 N. Y. 201.)

82 |
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Elmer R. Weil, County Attorney (George M. Nelson of
counsel), for respondent. I. The new findings of fact by the
Appellate Division are fully supported by the evidence. (Matter
of Vasko, 238 App. Div. 128; Matter of Rotkowitz, 175 Mise.
948; Matter of Sisson, 152 Misc. 806; Pierce v. Society of Sisters,
268 U. 8. 510; Houghtaling v. Stoothoff, 259 App. Div. 854;
Braisted v. Brooklyn & Rockaway Beach R. R. Co., 46 App. Div.
204; Haber v. Paramount Ice Corp., 264 N. Y. 98; Martin v.
Martin, 308 N. Y. 136; Locklin v. Fisher, 264 App. Div. 452.)
II. The Appellate Division of the Supreme Court, in granting
petitioner’s order, exercised its constitutional powers despite the
protests of the parents of the infant. (Finlay v. Finlay, 240
N. Y. 429; People v. Pierson, 176 N. Y. 201; People ex rel. Herzog
v. Morgan, 287 N. Y. 317; Prince v. Massachusetts, 321 U. 8.
158; Jacobson v. Massachusetts, 197 U. 8. 11; Buck v. Bell, 274
U.S. 200.)

Van Vooruis, J. This is a case involving a fourteen-year-old
boy with cleft palate and harelip, whose father holds strong
convictions with which the boy has become imbued against medi-
cine and surgery. This proceeding has been instituted by the
deputy commissioner of the Erie County Health Department
on petition to the Children’s Court to have Martin declared a
neglected child, and to have his custody transferred from his
parents to the Commissioner of Social Welfare of Hrie County
for the purpose of consenting to such medical, surgical and
dental services as may be necessary to rectify his condition.
The medical testimony is to the effect that such cases are almost
always given surgical treatment at an earlier age, and the older
the patient is the less favorable are likely to be the results
according to experience. The surgery recommended by the
plastic surgeon called for petitioner consists of three opera-
tions: (1) repair of the harelip by bringing the split together;
(2) closing the cleft or split in the rear of the palate, the boy
being already too late in life to have the front part mended by
surgery; and (3) repairing the front part of the palate by dental
appliances. The only risk of mortality is the negligible one
due to the use of anesthesia. These operations would be spaced
a few months apart and six months would be expected to com-
plete the work, two years at the outside in case of difficulty.

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Petitioner’s plastic surgeon declined to be precise about how
detrimental it would be to the prognosis to defer this work for
several years. He said: ‘‘I do not think it is emergent, that
it has to be done this month or next month, but every year that
goes is important to this child, yes.” A year and a half has
already elapsed since this testimony was taken in December,
1953.

Even after the operation, Martin will not be able to talk nor-
mally, at least not without going to a school for an extended
period for concentrated speech therapy. There are certain
phases of a child’s life when the importance of these defects
becomes of greater significance. The first is past, when children
enter grade school, the next is the period of adolescence, par-
ticularly toward the close of adolescence when social interests
arise in secondary school. Concerning this last, petitioner’s
plastic surgeon stated: ‘‘ That is an extremely important period
of time. That child is approaching that age where it is very
important that correction, that it is very significant that correc-
tion made at this time could probably put him in a great deal
better position to enter that period of life than would otherwise.
Another thing which is difficult is that we have very excellent
speech facilities at the Buffalo Public Schools through grade
level. At secondary school level and in higher age groups speech
training facilities are less satisfactory, so that it is important
that it be done at this age. However, the most important thing
of allis this gradually progressive with time. The earlier done,
the better results. Normally the lip is repaired in early infancy,
one to three years of age. Speech training would begin at school
or earlier. Every year lost has been that much more lost to
the boy. Hach year lost continues to be lost. The time to repair
is not too early.’’? He testified that in twenty years of plastic
surgery he had never encountered a child with this boy’s
defects who had not been operated upon at his age. Never-
theless, he testified that such an operation can be performed
‘¢ from the time the child is born until he dies.’’ In this doctor’s
view, the consideration bulked larger than the quality of post-
operative results, that the boy’s increasing social contacts
required that he be made to look and to speak normally as he
approached adolescence.

84 a
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Everyone testified that the boy is likeable, he has a newspaper
route, and his marks in school were all over 90 during the last
year. However, his father did testify that recently the boy had
withdrawn a little more from his fellows, although he said that
‘* As soon as anyone contacts Martin, he is so likeable nobody
is tempted to ridicule him. * * * Through his pleasantness
he overcomes it.’?

The father testified that ‘‘ If the child decides on an opera-
tion, I shall not be opposed ’’, and that ‘‘ I want to say in a few
years the child should decide for himself * * * whether to
have the operation or not.’’ The father believes in mental
healing by letting ‘‘ the forces of the universe work on the
body ’’, although he denied that this is an established religion
of any kind stating that it is purely his own philosophy and
that ‘‘ it is not classified as religion.’? There is no doubt, how-
ever, that the father is strong minded about this, and has incul-
cated a distrust and dread of surgery in the boy since childhood.

The Erie County Children’s Court Judge caused the various
surgical procedures to be explained to Martin by competent and
qualified practitioners in the field of plastic surgery and ortho-
dontia. Photographs of other children who had undergone
similar remedial surgery were exhibited to him showing
their condition both before and after treatment. He was also
taken to the speech correction school where he heard the repro-
duction of his own voice and speech, as well as records depicting
various stages of progress of other children. He met other
children of his own age, talked to them and attended class in
speech correction. Both the boy and the father were given
opportunity to ask questions, which they did freely not only of
the professional staff but of the different children.

On February 11, 1954, Martin, his father and attorney met
after these demonstrations in Judge Wvyimeaa’s chambers.
Judge Wvyuneana wrote in his opinion that Martin ‘‘ was very
much pleased with what was shown him, but had come to the con-
clusion that he should try for some time longer to close the cleft
palate and the split lip himself through ‘ natural forces.’ ”’
After stating that an order for surgery would have been granted
without hesitation if this proceeding had been instituted before
this child acquired convictions of: his own, Judge Wyizcata
summed up his conclusions as follows: ‘‘ After duly deliberating

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upon the psychological effect of surgery upon this mature, intel-
ligent boy, schooled as he has been for all of his young years in
the existence of ‘ forces of nature’ and his fear of surgery upon
the human body, I have come to the conclusion that no order
should be made at this time compelling the child to submit to
surgery. His condition is not emergent and there is no serious
threat to his health or life. He has time until he becomes 21 years
of age to apply for financial assistance under County and State
aid to physically handicapped children to have the corrections
made. This has also been explained to him after he made known
his decision to me.’’ The petition accordingly was dismissed.

The Appellate Division, Fourth Department, reversed by a
divided court, and granted the petition requiring Martin Seiferth
to submit to surgery.

As everyone agrees, there are important considerations both
ways. The Children’s Court has power in drastic situations to
direct the operation over the objection of parents (Matter of
Vasko, 238 App. Div. 128, 129). Nevertheless, there is no present
emergency, time is less of the essence than it was a few years
ago insofar as concerns the physical prognosis, and we are
impressed by the circumstance that in order to benefit from
the operation upon the cleft palate, it will almost certainly be
necessary to enlist Martin’s co-operation in developing normal
speech patterns through a lengthy course in concentrated speech
therapy. It will be almost impossible to secure his co-operation
if he continues to believe, as he does now, that it will be neces-
sary ‘‘ to remedy the surgeon’s distortion first and then go back
to the primary task of healing the body.’’ This is an aspect of
the problem with which petitioner’s plastic surgeon did not
especially concern himself, for he did not attempt to view the
ease from the psychological viewpoint of this misguided youth.
Upon the other hand, the Children’s Court Judge, who saw and
heard the witnesses, and arranged the conferences for the boy
and his father which have been mentioned, appears to have been
keenly aware of this aspect of the situation, and to have con-
cluded that less would be lost by permitting the lapse of several
more years, when the boy may make his own decision to submit
to plastic surgery, than might be sacrificed if he were compelled
to undergo it now against his sincere and frightened antagonism.
One cannot be certain of being right under these circumstances,

86 Le

but this appears to be a situation where the discretion of the
trier of the facts should be preferred to that of the Appellate
Division (Harrington v. Harrington, 290 N. Y. 126). .

The order of the Appellate Division should be reversed and
that of the Children’s Court reinstated dismissing the petition,
without prejudice to renew the application if circumstances
warrant.

Fuup, J. (dissenting). Every child has a right, so far as is
possible, to lead a normal life and, if his parents, through
viciousness or ignorance, act in such a way as to endanger that
right, the courts should, as the legislature has provided, act on
his behalf. Such is the case before us.

The boy Martin, twelve years old when this proceeding was
begun, fourteen now, has been neglected in the most egregious
way. He is afflicted with a massive harelip and cleft palate
which not only grievously detract from his appearance hut
seriously impede his chances for a useful and productive life.
Although medical opinion is agreed that the condition can be
remedied by surgery, that it should be performed as soon as
possible and that the risk involved is negligible, the father has
refused to consent to the essential operation. His reason —
which is, as the Appellate Division found, entirely unsubstan-
tial—was that he relies on ‘‘ forces in the universe ’’ which
will enable the child to cure himself of his own accord. He might
consent to the operation, he said, if the boy ‘‘ in a few years’
should favor one.

It is quite true that the child’s physical life is not at peril — as
would be the situation if he had an infected appendix or a growth
on the brain — but it may not be questioned, to quote from the
opinion below, ‘‘ What is in danger is his chance for a normal,
useful life.’? Judge Van Vooruis does not, I am sure, take
issue with that, but he feels that the boy will benefit, to a greater
extent, from the operation if he enters the hospital with a mind
favorably disposed to surgery. Therefore he counsels delay,
on the chance —and that is all it is—on the chance that at
some future time the boy may make his own decision to submit
to plastic surgery.

It would, of course, be preferable if the boy were to accede
to the operation, and I am willing to assume that, if he aequi-

PF 87

esces, he will the more easily and quickly react to the postopera-
tive speech therapy. However, there is no assurance that he
will, either next year, in five years or six, give his consent. Quite
obviously, he is greatly influenced by his father, quite plainly
a victim of the latter’s unfortunate delusions. And, beyond that,
it must be borne in mind that there is little if any risk involved
in the surgery and that, as time goes on, the operation becomes
more difficult.

Be that as it may, though, it is the court which has a duty
to perform (Children’s Court Act, § 24), and it should not seek
to avoid that duty by foisting upon the boy the ultimate decision
to bemade. Neither by statute nor decision is the child’s consent
necessary or material, and we should not permit his refusal to
agree, his failure to co-operate, to ruin his life and any chance
for a normal, happy existence; normaley and happiness, diffi-
cult of attainment under the most propitious conditions,
will unquestionably be impossible if the disfigurement is not
corrected. :

Moreover, it is the fact, and a vital one, that this is a pro-
ceeding brought to determine whether the parents are neglecting
the child by refusing and failing to provide him with necessary
surgical, medical and dental service (Children’s Court Act, § 2,
subd. 4, cl. e).t Whether the child condones the neglect, whether
he is willing to let his parents do as they choose, surely cannot
be operative on the question as to whether or not they are guilty
of neglect. They are not interested or concerned with whether
he does or does not want the essential operation. They have
arbitrarily taken the position that there is to be no surgery.
What these parents are doing, by their failure to provide
for an operation, however well-intentioned, is far worse than
beating the child or denying him food or clothing. To the boy,
and his future, it makes no difference that it may be ignorance
rather than viciousness that will perpetuate his unfortunate
condition. If parents are actually mistreating or neglecting a
child, the circumstance that he may not mind it cannot alter

1, A “Neglected child”, the Children’s Court Act (§ 2, subd. 4) recites,
“means a child * * * (e) whose parent, guardian or custodian neglects or
refuses, when able to do so, to provide necessary medical, surgical, institutional
or hospital care for such child”.

88 |
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the fact that they are guilty of neglect and it cannot render
their conduct permissible.

The welfare and interests of a child are at stake. A court
should not place upon his shoulders one of the most momentous
and far-reaching decisions of his life. The court should make
the decision, as the statute contemplates, and leave to the good
sense and sound judgment of the public authorities the job of
preparing the boy for the operation and of getting him as
adjusted to it as possible. We should not put off decision in
the hope and on the chance that the child may change his mind
and submit at some future time to the operation.

The order of the Appellate Division should be affirmed.

Corway, Ch. J., Dyz and Froussen, JJ., concur with Van
Vooruis, J.; Fuup, J., dissents in an opinion in which Dzsmonp
and Borxs, JJ., concur.

Order reversed, ete.

Sanpza Levrvez, an Infant, by Morris Levine, Her Guardian
ad Litem, et al, Appellants, v. Orry or New Yorn,
Respondent.

Argued June 1, 1955; decided July 8, 1955.

Le 89
bes
ee! ;

Sol Pottish and Morris Pottish for appellants. I. The Appel-
late Division’s first reason for reversal (‘‘ Going needlessly on
a portion of the structure that was no part of the public thorough-
fare, where no one was invited or had a right to be ’’) is invalid.
(Boylhart v. Di Marco & Reimann, 270 N. Y. 217; New York
Central R. R. Co. v. County of Erie, 197 Mise. 801, 278 App. Div.

90 ee
____
521, 304 N. Y. 565; Palsgraf v. Long Is. R. R. Co., 248 N. Y. 339;
Parnell v. Holland Furnace Co., 234 App. Div. 567, 260 N. Y. 604;
Bowers v. City Bank Farmers Trust Co., 282 N. Y. 442; Reilly v.
Gristede Bros., 243 App. Div. 505, 268 N. Y. 564; Earl v. Crouch,
57 Hun 586, opinion in 10 N. Y. S. 882, 61 Hun 624, opinion in
16 N. Y. 8. 770, 181 N. Y. 613; Kune v. City of Troy, 104 N. Y.
344; Sarapin v. 8. & 8. Corrugated Paper Mach. Co., 209 App.
Div. 377; Lee v. Van Buren & N. Y. Bill Posting Co., 190 App.
Div. 742.) II. The Appellate Division’s second reason for
reversal (contributory negligence) is invalid. (Zwack v. New
York, L. E.& W. BR. BR. Co., 160 N. Y. 362; Tucker v. New York
Central é H. R. R. BR. Co., 124 N. Y. 308; Mangam v. Brooklyn
R.R. Co., 38 N. Y. 455; Byrne v. New York Central é H. R. RB. R.
Co., 83 N. ¥. 620; Collentine v. City of New York, 279 N. Y. 119;
Palmer v. Dearing, 93 N. Y. 7; Moshier v. City of New York,
190 App. Div. 111, 228 N. Y. 612; Williams v. City of New York,
214 N. Y. 259; Hogan v. New York Central & H. RB. R. R. Co.,
208 N. Y. 445; Kettle v. Turl, 162 N. Y. 255; Ramirez v. Perlman,
284 App. Div. 82.)

Peter Campbell Brown, Corporation Counsel (Fred Iscol and
Seymour B. Quel of counsel), for respondent. I. The city’s duty
to maintain the stairway and guardrails in good repair extended
only to persons using them for their normal and intended pur-
pose. (Halpin v. New York Rys. Corp., 250 App. Div. 613, 276
N. Y. 545; Levy v. City of New York, 255 App. Div. 857, 280 N. Y.
637 ; McCamn v. City of New York, 270 App. Div. 1040, 296 N. Y.
886; Collins v. Noss, 258 App. Div. 101, 283 N. Y. 595; Lefkowite
v. Greenwich Sav. Bank, 266 App. Div. 995, 293 N. Y. 711.)
II. Plaintiff was guilty of contributory negligence in attempting
to step down onto and to walk along the top of the tubular rail-
ing. (Johnson v. City of New York, 208 N. Y. 77; O’Callaghan
v. Commonwealth Engineering Corp., 247 N. Y. 127; Bergman v.
Feitelowitz, 2583 App. Div. 323, 278 N. Y. 620; Foley v. Equitable
Life Assur. Soc., 290 N. Y. 424; Harley v. New York Tel. Co.,
263 N. Y. 424, 264 N. Y. 528.) III. The failure of the Appellate
Division to refer to its opinion in the order of reversal cannot
alter the fact that the determination of the Appellate Division
was not a dismissal on the law alone but a direction, as well, of
judgment in favor of defendant based on findings of the Appel-
late Division with respect to the questions of fact.

| 91
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Conway, Ch. J. Across the street from the house in which
the infant plaintiff lived in a residential section of a crowded
city there was a stairway which formed a part of a connecting
public thoroughfare. Along at least one side of this stairway
there was a handrail composed of two tubular iron pipes set one
above the other about two feet apart and running parallel to
the ground. At the foot of this stairway there was a concrete
post or pillar to which this railing had originally been fastened;
but over the course of time the top bar of the railing apparently
had been broken off so that there was an open space between
the jagged end of the pipe railing and its fastening on the
concrete post. There was evidence that the railing had been in
this defective and dangerous condition for some six years prior
to this accident. In addition, an examination of the photographs
which were introduced into evidence at the trial clearly shows
that not only had the railing been broken off, but it had become
twisted out of its original line.

On the day of the accident, October 21, 1947, the plaintiff —
then about ten years of age—and several of her companions
were playing a game of ‘‘ follow-the-leader ’’ in the area of the
above-described stairway. When it came plaintiff’s turn to be
“« leader ’’, she ascended a few steps of the stairway and then,
using the railing as a ladder, she climbed up onto the concrete
post at the foot of the stairs. She then started to step down onto
the top bar or pipe of the railing, but she missed her footing
due to the broken and twisted condition of the end of that rail.
Her foot went into the open space between the jagged end of
the railing and the concrete post, and the plaintiff’s left thigh
was impaled upon the end of the pipe, seriously injuring her
and causing a large and permanent scar which troubles her
when there is a change in the weather.

The infant plaintiff sued for damages for the injuries she
sustained, and her father commenced a derivative action for
the loss of services, companionship and prospective earnings

. of his daughter as well as the expenses incurred for hospital,
surgical and medical charges. Although the defendant city
admits that it may be liable to pedestrians who may be injured
while using this railing, it contends that it was under no duty
to this plaintiff when she used the railing as she was doing. The
Appellate Division, agreeing with this contention, reversed a

92 Le
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judgment in favor of the plaintiffs and dismissed the complaint.
The order of reversal, however, failed to comply with the require-
ments of section 602 of the Civil Practice Act, and hence we
must deem it to have been a reversal upon the law alone (McLean
v. McKinley, 307 N. Y. 661). Furthermore, inasmuch as the
complaint has been dismissed, the plaintiffs must be given the
benefit of every reasonable inference which can be drawn from
the evidence.

Returning to that evidence, a further examination of the above-
mentioned photographs of the scene of the accident shows that
this railing enclosed a rectangular plot of ground, on at least
two sides of which there were benches set against the railing.
Whether or not there were also benches on the side where the
plaintiff was injured does not appear, but it is apparent that
people were expected to congregate around this small enclosed
piece of ground to rest and talk. Any child could clamber on
these benches, and climb over the railing into the enclosed piece
of ground. The railing itself could be expected to attract them,
under these circumstances, for use as a variety of ‘‘ monkey
pars.’? Evidence of children having played in this area was
given in a deposition before the trial by a witness who had seen
the accident. He stated that he had witnessed ‘‘ children in the
vicinity of the railing prior to the occurrence of the accident ’’,
and that they played on the railing itself. This whole area,
therefore, took on many of the characteristics of a public park
or playground to which entire families are invited to come and
enjoy themselves. Under such conditions, the city is under a
greater duty of care than would be the case if there were no
benches here, and if people were not expected and invited to
congregate in this area with their children (cf. Collentine v.
City of New York, 279 N. Y. 119, 124-125; Lessin v. Board of
Educ. of City of N. Y., 247 N. Y. 503, 511-512; Jewhurst v. City
of Syracuse, 108 N. Y. 303, 310- 312). For some sia years prior
to the plaintiff’s accident, however, the city had allowed this
dangerous.and defective condition to remain a hazard to those °
who came here to obtain respite from the heat and congestion
of the city.

Negligence is not a stereotyped thing, but, as courts have
wisely said, it is a matter of time, place and circumstance; and
the same act of a defendant may be a breach of duty toward one

P| 93
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person while not a breach of duty toward another. Thus in
Larmore v. Crown Point Iron Co. (101 N. Y. 391), this court
wrote, (per Awprews, J.), that ‘‘ there is no negligence in a legal
sense which can give a right of action, unless there is a violation
of a legal duty to exercise care. The duty may exist as to some
persons, and not as to others, depending upon peculiar relations
and circumstances’? (101 N. Y., p. 394; to the same effect,
see Bailey v. Central Vermont Ry., 319 U. S. 350, 353; Sadowski
v. Long Is. R. R. Co., 292 N. Y. 448, 454; Mink v. Keim, 291 N. Y.
300, 304; Connell v. New York Central é H. RB. R. BR. Co., 144
App. Div. 664, 667-668).

It may be that if there had been no benches here and if parents
and their children were not expected and invited to come here
to rest, talk and relax, there might be no duty to children who
played on the railing. That, however, is not this case. Any jury
of reasonable men and women, perceiving the nature of this
area, would immediately realize that youngsters whose propen-
sities to play are known to all could be expected to play and
climb around and over not only the benches and the stairs but
also the railing. It cannot be said as a matter of law, therefore,
that no jury could reasonably find that the city, under these
circumstances, could or should have known of the dangerous
condition of the railing and the hazard it posed, particularly to
young children, and that by neglecting for some six years to
repair this menace the city breached a duty to those children
and to this plaintiff. Accordingly, it was error to reverse and to
dismiss the complaint on the law alone, since a prima facie case
of negligence had been established.

The judgment of the Appellate Division should be reversed
and the case remitted to that court for determination of the
questions of fact, without costs to either party (Civ. Prac. Act,
§ 602).

Dezsmonp, Dyz, Futp, Frozsser and Van Vooruts, JJ., concur;
Burgs, J., taking no part.

Judgment reversed, ete.

Crry or New Yorx, Respondent, v. Guratp D. Netson et al., as
Successor Trustees under the Will of Wuaiam Nexson,
Deceased, et al., Appellants.

Argued March 3, 1955; decided July 8, 1955.

William P. Jones and Watson Washburn for appellants.

I. The eourt without limitation of time has inherent power to
relieve from default judgments in deserving cases. (Ladd v.
Stevenson, 112 N. Y. 325; White v. Sebring, 133 Misc. 784;
Knowles v. Lichtenstein, 33 App. Div. 605; Baldwin v. Yellow
Taxi Corp., 221 App. Div. 717.) II. A default judgment suffered

* in a foreclosure in rem action is no more conclusive than a

a 95

default taken in any other action. (City of Peekskill v. Perry,
272 App. Div. 940; People ex rel. Mutual Trust Co. v. Miller, 177
N. Y. 51; Matter of Harbeck, 161 N. Y. 211; American Locker
Co. v. City of New York, 283 App. Div. 924; Miller v. Nut
Margarine Co., 284 U. &. 498; Shell Development Co. v. Universal
Oil Products Co., 157 F. 2d 421; City of New York v. Lynch,
306 N. Y. 809.) III. Even if title D of chapter 17-6.0 of the
Administrative Code could properly be interpreted to contain a
statute of limitations, the city should be estopped to assert it or
to assert defendants’ default to which the city wrongfully con-
tributed. (City of New York v. Idlewild Beach Co., 182 Mise.
205.) IV. The city failed to comply with title D of chapter 17 of
the Administrative Code. V. The use of the in rem statute in
this particular case was unconstitutional. (City of New York v.
Feit, 200 Mise. 998; City of New Rochelle v. Echo Bay Water-
front Corp., 182 Mise. 176, 268 App. Div. 182, 294 N. Y. 678, 326
U.S. 720; Realty Revenue Corp. v. Wilson, 181 Misc. 802; Matter
of Bergerman v. Murphy, 199 Mise. 1008, 278 App. Div. 388,
303 N. Y. 762; Matter of Zorach v. Clauson, 303 N. Y. 161;
Snowden v. Hughes, 321 U. 8.1; Yick Wo v. Hopkins, 118 U. 8.
356.)

Peter Campbell Brown, Corporation Counsel (Meyer Scheps,
Harry E. O’Donnell, Benjamin Offner and Joseph Brandwen of
counsel), for respondent. I. Once there has been compliance by
the city with the jurisdictional requirements of title D of chapter
17 of the Administrative Code, the court is without authority
to permit defaults in redemption or pleading to be opened. (City
of Peekskill v. Perry, 272 App. Div. 940; City of New York v.
Jackson-140 Realty Corp., 279 App. Div. 668; Matter of City of
New York [Levy], 278 App. Div. 1008; Matter of City of New
York [Flushop Realty Corp.], 278 App. Div. 1008; Keely v.
Sanders, 99 U. S., 441; Levy v. Newman, 130 N. Y. 11; People
ex rel. Quaranto v. Moynahan, 148 App. Div. 744, 205 N. Y. 590;
McCoun v. Pierpont, 232 N. Y. 66; Cameron Estates v. Deering,
308 N. Y. 24.) II. The list of delinquent taxes was filed by the
treasurer in compliance with title D of chapter 17 of the Admin-
istrative Code. The statute does not contain any prohibition
against the filing of a composite list, nor is there any requirement
that the treasurer file a separate list and bring a separate action

96 ee

for each section. (City of New Rochelle v. Echo Bay Water-
front Corp., 268 App. Div. 182, 294 N. Y. 678, 326 U. S. 720;
Blum v. Nassau Purchasing & Bldg. Corp., 256 N. Y. 232;
McCoun v. Pierpont, 232 N. Y. 66; City of New York v. Appleby,
219 N. Y. 76; Downes v. Wenninger, 207 N. Y. 286; People ex rel.
Andrews v. McGuire, 126 N. Y. 419; People v. Dedrick, 184 App.
Div. 915, 227 N. Y. 608; People ew rel. National Park Bank v.
Metz, 141 App. Div. 600; Marsh v. Ne-ha-se-ne Park Assn., 25
App. Div. 34; County of Nassau v. Lincer, 254 App. Div. 760.)
III. When the treasurer selected section 12 in the borough of
Brooklyn and section 1 in the borough of Queens for foreclosure
by action in rem, it was mandatory under the statute that he
include in such foreclosure actions the properties here involved.
The in rem foreclosure statute does not give the treasurer power
to distinguish between improved and vacant properties. (Matter
of Hardecker v. Board of Educ. of City of N. Y., 180 Misc. 1008,
266 App. Div. 980, 292 N. Y. 584; Matter of Rutherford Estates
[Dorman Products], 277 App. Div. 1, 301 N. Y. 767.)

Per Curiam. The order appealed from should be affirmed,
without costs.

This is indeed a hard case. Defendants acquired title to the
Powell Street property in 1934 and to the 45th Avenue property
in 1938, and paid the real estate taxes due thereon. For the
nonpayment of water charges, the city acquired title to these
properties in an in rem tax foreclosure sale under title D of
chapter 17 of the Administrative Code of the City of New York,
as follows: .

Property Water Arrears Assessed Value
45th Avenue Assessed by the City at
4-story brick and stone $6,000 and resold by it
rooming house $72.50 for $7,000, retaining the

entire proceeds.
Powell Street Assessed by the City at
4-story apartment house $46,000; with a gross
with 28 apartments $814.50 annual rent income of

$9,275.

PC 97
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Thus, for total arrears of $887, the city acquired properties
assessed at $52,000, one of which parcels was resold in excess
of its assessed valuation.

The nonpayment of the water charges was due to the default
of a trusted bookkeeper, and was discovered when he attempted
suicide. The city continued to bill the estate of which plaintiffs
are trustees for the real estate taxes on the 45th Avenue prop-
erty for two years after it had acquired title.

Unfortunately, the power to afford relief here is not confided
to the courts. The result suggests the need of legislation liber-
alizing the right of redemption, or giving to city officials the
power to ameliorate such extreme hardships in appropriate
cases.

Conway, Ch. J., Desmoxp, Dyz, Fup, Frozssen and Van
Vooruis, JJ., concur; Burs, J., taking no part.
Order affirmed. .
[|
Tue Pzoris or tHe Starz or New Yorx, Respondent, v. Rooms
C. Dazzs, Appellant.

Argued May 25, 1955; decided July 8, 1955.

Joseph P. Leary and Francis H. Anderson for appellant.
I. Admission of other incompetent transactions was prejudicial
and constitutes reversible error. (People v. Molineux, 168 N. Y.
264; People v. Richardson, 222 N. Y. 103; People v. Horie, 258
App. Div. 246; People v. Weaver, 177 N. Y. 484; People v. Corbin,
56 N. Y. 363; People v. Aliman, 147 N. Y. 473; Coleman v. People,
55 N. Y. 81; People v. Zackowitz, 254 N. Y. 192; People v. Dolan,
186 N. Y. 4; People v. Rutman, 260 App. Div. 784; People v.
Gerks, 243 N. Y. 166; People v. Marrin, 205 N. Y. 275; People v.
Everhardt, 104 N. Y. 591.) IL. The court erroneously failed to
require the production of papers for inspection and use during
the trial. (People v. Pauley, 281 App. Div. 223; People ex rel.
Heller v. Heller, 184 Mise. 75; Thomas v. Morris, 286 N. Y. 266.)
III. Defendant was denied a fair trial. (People v. Weaver, 177

De 99
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N. Y. 484; People v. Robinson, 273 N. Y. 438; People v. Levan,
295 N. Y. 26; People v. Tassiello, 300 N. Y. 425; People v. Dixon,
118 App. Div. 593; People v. Becker, 210 N. Y. 274.)

Richard J. Bookhout, District Attorney, for respondent.
I. Evidence of other dealings between this defendant and the
bank involving financing of car sales was properly received on
the question of defendant’s intent. (People v. Gerks, 243 N. Y.
166; People v. Marrin, 205 N. Y. 275; People v. Dolan, 186 N. Y.
4; People v. Everhardt, 104 N. Y. 591; People v. Rutman, 260
App. Div. 784; People v. Hudson Valley Constr. Co., 217 N. Y.
172; People v. Katz, 209 N. Y. 311; People v. Goldstein, 295
N. Y. 61; People v. Molineux, 168 N. Y. 264; People v. Weaver,
177 N. Y. 434.) IT. There was no error in the court’s rulings on
production of various papers during the trial. (People v. Pauley,
281 App. Div. 223; People v. Miller, 257 N. Y. 54; People v.
Walsh, 262 N. ¥. 140.) III. If there be any error in the lengthy
trial, it was technical only and did not affect the substantial
rights of defendant. (People v. Gerks, 243 N. Y. 166; Davis v.
Bickle, 230 App. Div. 580; People v. Sheldon, 156 N. Y. 268;
People ex rel. Stabile v. Warden of City Prison, 202 N. Y. 188.)

Furp, J. On this appeal from a judgment convicting defend-
ant of the crime of uttering a forged instrument with intent to
defraud (Penal Law, § 887), the primary question posed con-
cerns the admissibility of evidence of similar crimes.

Defendant was in the business of buying and selling used cars
in Oneonta, New York, and, in connection with that business,
had almost daily dealings with the Citizens’ National Bank. The
transaction of which he stands convicted involved a promissory
note for $700; it purported to be signed by an employee, Utter,
as maker, and carried defendant’s own signature as indorser.
The note, delivered to the bank in renewal of a previous note of
Utter’s, recited that it was given as part of the purchase price
on a 1944 Chevrolet truck, and provided that the holder could
sell the truck in the event of a default. It appeared that defend-
ant had not sold the truck to Utter, that neither he nor Utter
had title to it, and that it was defendant who had signed Utter’s
name to the note. His claim that he was authorized to do so
was denied by Utter. :

During the course of the extensive trial, the defense elicited
considerable testimony concerning the course of dealings between
defendant and the bank, the purpose being, apparently, to show

‘ that the bank had not been defrauded and that defendant had
not intended it to be; that defendant was considered one of its
best accounts; and that the bank was trying to conceal in some
way its own laxness and negligence in the handling of the
account. The greater portion of the Appellate Division’s
opinion was devoted to the question whether defendant had
acted ‘‘ with intent to defraud ’’; thus, it considered whether the
bank was adversely affected by accepting the note and whether
it relied upon the forged signature and the recital of the fictitious
truck as security. The Appellate Division concluded that ‘‘ the
record sufficiently establishes * * * intent to defraud”,
and these matters are not now urged upon us.

The major ground advanced for reversal has to do with the
admission of evidence concerning three other documents, consist-
ing of conditional sales contracts, which defendant had negoti-
ated to the bank, each involving either a spurious signature or a
fictitious vehicle described as collateral. These transactions, all
having occurred shortly before the delivery of the Utter note,
were received in evidence on the question of defendant’s intent in
uttering the latter instrument.

The purported purchaser named in the first of these three con-
tracts, one Travis, denied that he had ever signed it or authorized
defendant to do so. The second transaction involved a condi-
tional sales contract purportedly conveying a 1950 Chevrolet
station wagon; the ‘‘ buyer ’’, Harkenreader, also in defendant’s
employ, testified that, although his signature was genuine, he had
never purchased any station wagon, but had simply signed the
paper for defendant at a time when he ‘‘ was quite busy ’’. The
ostensible purchaser involved in the third transaction, another |
of defendant’s employees, named Gilmore, refused on constitu-
tional grounds to answer whether the signature of his name was
genuine; there was proof, however, that Gilmore never owned
the car which was described as the collateral and that defendant —
had sold that car to another person many months earlier. |

Evidence of such transactions, even if they spell out inde- |
pendent crimes, is ordinarily admissible on the question of intent,
and defendant does not dispute this. He argues, however, that

a 101

such proof was incompetent in this case, because one of his
defenses was that he had acted with the authority of the person
whose name he was charged with forging.

It requires no more than a brief consideration of the rules
governing the admissibility of other crimes to demonstrate the
propriety of the trial court’s admission of the challenged evi-
dence. The principles that have been evolved represent a balance
between the probative value of such proof and the danger of
prejudice it presents to an accused. When evidence of other
crimes has no bearing other than to show that defendant is of
a criminal bent or character and thus likely to have committed
the crime charged, it is excluded. Where, however, it is relevant
to negative the existence of accident or mistake, or to show the
intent or motive with which the defendant acted, or a common
scheme or plan, its probative value is deemed to outweigh the
danger of prejudice, and the rules dictating exclusion will yield.
(See, e. g., People v. Molineuw, 168 N. Y. 264, 291-293; People v.
Gaffey, 182 N. Y. 257; see, also, McCormick on Evidence [1954],
§ 157, p. 327 et seg.; 2 Wigmore on Evidence [1940], §§ 300-307,
pp. 192-207.) Particularly in the instance of such crimes as
uttering forged or counterfeit papers — where, in contrast to
assault, robbery and the like, the act is equivocal, and the under-
lying intent not easily to be inferred —“‘ Such evidence has been
sanctioned for time out of mind’’. (People v. Marrin, 205 N. Y.
275, 283; see, also, People v. Gerks, 243 N. Y: 166; People v.
Dolan, 186 N. Y. 4; People v. Molineux, supra, 168 N. Y. 264,
297-298; People v. Everhardi, 104 N. Y. 591; Note, 62 L. R. A.
198, 249, 257; 2 Wigmore, op. cit., §§ 809-317, pp. 208-218.) In
truth, it is recognized that ‘‘ proof of intent is often unobtainable
except by evidence of successive repetitions of the act.’? (People
v. Molineux, supra, 168 N. Y. 264, 298.) Beyond that, to quote
from Wigmore, ‘‘ the oftener a like act has been done, the less
probable it is that it could have been done innocently ’’ (op. cit.,
p. 215).

There can be no doubt, then, that the evidence of the other
transactions admitted during the course of the trial below had
an important bearing on the vital issue whether the defendant
uttered the forged note with intent to defraud, separate and
apart from any question bearing upon his defense of authority.
As already observed, the major part of the Appellate Division’s

102 |
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opinion was devoted, not to defendant’s asserted authority, but
to the ‘‘ somewhat closer question * * * whether the utter-
ing of a forged note ‘ with intent to defraud ’ as pleaded in the
indictment has been established sufficiently to support the jury’s
finding in this respect.’? Furthermore, it was the defendant
himself who elicited considerable testimony concerning his past
dealings with the bank, as well as evidence of other notes and
contracts covering used car sales. Since that was so, since
defendant introduced evidence of these matters to negative
fraudulent intent, the prosecution was certainly privileged to
attempt to establish the existence of such intent by showing that,
in still other dealings with the bank, defendant had committed
other forgeries, of a pattern almost identical with that here
disclosed.

Nor is the competence of such evidence affected by the circum-
stance that defendant’s authority to sign may also happen to be
inissue. Were the rule otherwise, the accused could render evi-
dence of that sort inadmissible in every case —no matter how
vital it might be on the question of intent or motive or common
scheme and plan — by the simple expedient of advancing a claim
of authority. In such a situation as the present, the decision in
People v. Weaver (177 N. Y. 434)'— upon which defendant
strongly relies — requires no more than that the court limit the
evidence of other transactions to the question of intent to
defraud, directing the jury not to consider it insofar as the
defense of authority is concerned. And that is precisely what
the court did in the case before us, and in most plain and forceful
fashion.

Of defendant’s remaining points, the only ones that warrant
any discussion at all relate to the court’s failure to order the
production of (1) a written statement given by Utter to the
police sometime before the trial and (2) the minutes of the
testimony given by several witnesses before the grand jury
concerning the Gilmore transaction.

Since the district attorney made no use at the trial of the
grand jury minutes or Utter’s statement, the defendant was,

1. The Weaver case (supra, 177 N. Y. 434) was not intended to, and did not,
effect any change in rules long settled (see People v. Marrin, supra, 205 N. Y.
275, 287; People v. Dolan, supra, 186 N. Y. 4, 9); its holding must be limited
to its peculiar facts.

P| 103
ee

of course, not entitled to either of them under the rule announced
in People v. Miller (257 N. Y. 54, 57). However, if defense
counsel desired Utter’s statement or the grand jury testimony
of other witnesses for the purpose of cross-examining them,
then, defendant would have been entitled to examine the state-
ment or minutes if — to state the rule broadly — the court, upon
inspection, had found that they contained material at variance
with the testimony given by the particular witness on the stand.
(See, e. g., People v. Boniello, 303 N. Y. 619; People v. Schainuck,
286 N. ¥. 161, 165-166; People v. Walsh, 262 N. Y. 140, 149-150.)
The trial judge below, so far as appears, did not examine either
Utter’s statement or the grand jury minutes. They were, how-
ever, left with us, and examination of them reveals no contradic-
tions or inconsistencies with any testimony given at the trial.
Since that is so, the defense was not privileged to use or inspect
the items in question, and the trial court committed no error
in refusing the defense request. (See People v. Boniello, supra,
803 N. ¥. 619; People v. Walsh, supra, 262 N. Y. 140, 149; People
y. Miller, swpra, 257 N. ¥. 64, 57-58, 60.)
The judgment of the Appellate Division should be affirmed.

Conway, Ch. J., Desmonp, Dz, Frozssez, Van Voorzis and
Burgz, JJ., coneur.

Judgment affirmed.
Le

Newton D. Barriz, as Trustee in Bankruptcy of Westerlea
Builders, Inc., Appellant, v. Home Ownzrs Coorzrattve, Ive.,
Respondent.

Argued June 9, 1955; decided July 8, 1955.

104. |
__
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Vincent A. O’Neil and Paul J. Shea for appellant. I. The
bankrupt is the alter ego of defendant. (Long Park, Inc., v.
Trenton-New Brunswick Theatres Co., 297 N. Y. 174; Kingston
Dry Dock Co. v. Lake Champlain Transp. Co., 31 F. 2d 265;
Chelrob, Inc., v. Barrett, 293 N. Y. 442; Geddes v. Anaconda
Min. Co., 254 U. 8. 590; Albright v. Jefferson Co. Nat. Bank,
292 N. Y. 81; Berkey v. Third Ave. Ry. Co., 244 N. Y. 84; Con-
solidated Rock Co. v. Du Bois, 312 U. 8. 510; Lowendahl v. Balti-
more & Ohio RB. RB. Co., 247 App. Div. 144, 272 N. Y. 360; Rapid
Tr. Subway Constr. Co. v. City of New York, 259 N. Y. 472;
International Aircraft Trading Co. v. Manufacturers Trust Co.,
297 N. Y. 285.) IL. Defendant is liable on the ground that the
bankrupt operated solely for defendant’s members. (Matter
of Muncie Pulp Co., 139 F. 546; Mangan v. Terminal Transp.
System, 157 Mise. 627, 247 App. Div. 853; Steele v. Meaker Co.,
131 Mise. 675, 226 App. Div. 717; Rapid Tr. Subway Constr. Co.
v. City of New York, 259 N. ¥. 472; New York Trust Co. v.

De 105

Carpenter, 250 F. 668; Geiler v. Littlefield, 148 N. Y. 603;
Trustees of Freeholders & Commonalty of Town of Brookhaven
v. Smith, 118 N. Y. 634.) III. In equity the title of the real
property of defendant should be held by plaintiff as trustee in
bankruptey. (Matter of Heim, 166 Mise. 931, 255 App. Div. 1007;
Strong v. Dutcher, 186 App. Div. 307.) IV. The theory of unjust
enrichment applies. (Gordon v. Elliman, 280 App. Div. 655;
Pink v. Title Guar. & Trust Co., 274 N. Y. 167.) V. The trustee
in bankruptcy is the logical party to bring this action and the
State court is a proper forum for a plenary suit. The question
of priority of claims as between the creditors of defendant and
the creditors of the bankrupt is not before this court. (Manu-
facturers Trust Co. v. Becker, 338 U. 8. 304; Pepper v. Litton,
308 U. 8. 295; Matter of Burch, 89 F. Supp. 249.)

Richard T. Mosher for respondent. I. Appellant has not
proved the degree of control, the improper purpose and the
proximate causation necessary to pierce the corporate veil.
(Lowendahl v. Baltimore & Ohio R. RB. Co., 247 App. Div. 144,
272 N. Y. 360; Berkey v. Third Ave. Ry. Co., 242 N. Y. 84; Rapid
Tr. Subway Constr. Co. v. City of New York, 259 N. Y. 472; Erie
R. R. Co. v. Tompkins, 304 U. 8. 64; Pagel, Horton & Co. v.
Harmon Paper Co., 236 App. Div. 47; Jenkins v. Moyse, 254
N. Y. 319; Albright v. Jefferson Co. Nat. Bank, 292 N. Y. 31;
Quaid v. Ratkowsky, 183 App. Div. 428, 224 N. Y. 624.) II. The
extension agreement created no trust in favor of plaintiff.
III. There was no unjust enrichment. IV. On either theory,
plaintiff has established no cause of action or legal injury.
(Hirschfeld v. McKinley, 78 F. 2d 124; Quintal v. Kellner, 238
App. Div. 651, 264 N. Y. 32; Barnes v. Hirsch, 215 App. Div. 10,
242 N. Y. 555.) V. Plaintiff has not been waived into a cause
of action by defendant’s failure to move.

Frozsset, J. Plaintiff, as trustee in bankruptcy of Westerlea
Builders, Inc., has by means of this litigation attempted to hold
defendant liable for the contract debts of Westerlea, defendant’s
wholly owned subsidiary. Defendant, as a co-operative cor-
poration composed mostly of veterans, was organized in July,
1947, for the purpose of providing low-cost housing for its
members. Unable to secure a contractor to undertake con-
struction of the housing planned, Westerlea was organized for

that purpose on June 5, 1948. With building costs running
considerably higher than anticipated, Westerlea, as it proceeded
with construction on some 26 houses, found itself in a difficult
financial situation. On January 24, 1949, the creditors, pursuant
to an extension agreement, took over the construction responsi-
bilities. Nearly four years later, in October, 1952, Westerlea
was adjudicated a bankrupt. Meanwhile, defendant had con-
tributed to Westerlea not only its original capital of $25,000 but
additional sums amounting to $25,639.38. ,

Plaintiff’s principal contention on this appeal is that the
courts below erred in refusing to ‘‘ pierce the corporate veil ”’
of Westerlea’s corporate existence; as subordinate grounds for
recovery he urged that the defendant equitably pledged its
assets toward the satisfaction of the debts of the bankrupt’s
ereditors, and that the doctrine of unjust enrichment should
apply.

The trial court made detailed findings of fact which have been
unanimously affirmed by the Appellate Division, which are
clearly supported by the evidence, and by which we are bound.
It found that while the defendant, as owner of the stock of
Westerlea, controlled its affairs, the outward indicia of these
two separate corporations were at all times maintained during
the period in which the creditors extended credit; that the
creditors were in no wise misled; that there was no fraud; and
that the defendant performed no act causing injury to the
creditors of Westerlea by depletion of assets or otherwise.. The
trial court also held that the creditors were estopped by the
extension agreement from disputing the separate corporate
identities.

We agree with the courts below. The law permits the incor-
poration of a business for the very purpose of escaping personal
liability (Natelson v. A. B. L. Holding Co., 260 N. Y. 233, 238;
Rapid Tr. Subway Constr. Co. v. City of New York, 259 N. Y.
472, 488). Generally speaking, the doctrine of ‘‘ piercing
the corporate veil ’’ is invoked “‘ to prevent fraud or to achieve
equity ”? (International Aircraft Trading Co. v. Manufacturers
Trust Co., 297 N. Y. 285, 292; see Halsted v. Globe Ind. Co., 258
N. Y. 176, 179; Jenkins v. Moyse, 254 N. Y. 319, 324; Quaid v.
Ratkowsky, 183 App. Div. 428, affd. 224 N. Y. 624). But in the
instant case there has been neither fraud, misrepresentation nor

| 107
ees

illegality. Defendant’s purpose in placing its construction
operation into a separate corporation was clearly within the
limits of our public policy.

The judgment appealed from should be affirmed, without costs.

Van Vooruis, J. (dissenting). The judgment of the Appellate
Division should be reversed on the law, as it seems to me, and
plaintiff should have judgment declaring defendant to be liable
for the debts of the bankrupt, Westerlea Builders, Inc., and that
defendant holds its real property subject to the claims of cred-
itors of Westerlea. Not only is Westerlea a wholly owned
subsidiary of defendant Home Owners, having the same directors
and management, but also and of primary importance, business
was done on such a basis that Westerlea could not make a profit.
Home Owners owned a residential subdivision; Westerlea was
organized as a building corporation to erect homes for stock-
holders of Home Owners upon lots in this tract. Home Owners
arranged with Westerlea for the construction of houses and then
would sell the lots on which such houses had been erected to
Home Owners’ stockholders — at prices fixed by Home Owners’
price policy committee in such amounts as to make no allowance
for profit by Westerlea. The object was to benefit Home Owners’
stockholders by enabling them to obtain their houses at cost,
with no builder’s profit.

The consequence is that described by Latty, Subsidiaries and
Affiliated Corporations at pages 138-139: ‘‘ The subsidiaries
had, to begin with, nothing, made nothing, and could only end up
with nothing. It is not surprising that the parent was held
liable in each case.’? And again: ‘‘ This set-up is often, though
not necessarily, found in combination with a scheme whereby the
corporation cannot possibly make profits (or can at the most
make only nominal profits), and whereby all the net income in
the course of the corporation’s business is drained off as operat-
ing charges of one sort or another. The presence of this addi-
tional factor should remove any doubt that may remain as to the
right of the creditor of the corporation not to be limited to the
corporate assets for the satisfaction of his debt.”

In the present instance, Westerlea was organized with a small
capital supplied by Home Owners, which soon became exhausted.
Thereafter, it had no funds and could acquire none over and

108 Le
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beyond the actual cost of the houses which it was building for
stockholders of Home Owners. Those stockholders obtained the
entire benefit of Westerlea’s operations by obtaining these houses
at cost. Not only was Westerlea allowed no opportunity to make
money, but it was placed in a position such that if its business
were successful and times remained good, it would break even,
otherwise it would inevitably become insolvent. The stock-
holders of Home Owners became the beneficiaries of its insol-
vency. This benefit to the stockholders of Home Owners was
analogous to dividends, at least it was something of value which
was obtained by them from Home Owners by virtue of their stock
ownership. Under the circumstances, this benefit to its stock-
holders was a benefit to Home Owners as a corporation.

Tt follows that Westerlea was merely an agent of Home Owners
to construct houses at cost for Home Owners’ stockholders, and
therefore Home Owners is rendered liable for Westerlea’s
indebtedness.

Conway, Ch. J., Dusmonn, Drs, Fup and Burge, JJ., concur
with Frozssun, J.; Van Vooruts, J., dissents in an opinion.
Judgment affirmed.
Le

In the Matter of the Probate of the Will of Gasrren Pascat,
Deceased. Marianne Z. Spretman, Appellant; Vaterm Pascan
et al., Respondents.

Argued April 26, 1955; decided July 8, 1955.

Francis X. Stephens, Jr., and Wilt
appellant. I. The Appellate Division cere i in
jud, ment dismissing appellant’s petition for probate.
. Mackenzie, 239 N. Y. 267.) IL. The Appellate D:
erred in refusing to allow appellant to show by evidence that the

110 |
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language used by testator was an expression of motive and that
the testator did not intend such language to create a condition
precedent. (Matter of Kipp, 140 Misc. 195; Matter of Niles,
164 Mise. 328; Lamb v. Lamb, 131 N. Y. 227; Matter of Gallien,
247 N. Y. 195; Close v. Farmers’ Loan & Trust Co., 195 N. Y.
92; Matter of Dialogue, 159 Mise. 18.) III. The language of the
holograph presents an ambiguity and extraneous evidence other-
wise relevant is admissible on the issue of motive and intent.
(Matter of Corlies, 150 Misc. 596, 242 App. Div. 703; Matter of
Hardie, 176 Misc. 21; Matter of Webb, 122 Mise. 129; Ex Parte
Lindsay, 2 Bradf. 204.) IV. The Poonarian case, upon which
the Appellate Division relied in granting summary judgment,
was itself a case where a full hearing was allowed. Appellant
contends that the facts are distinguishable from the case at bar.
(Matter of Poonarian, 234 N. Y. 329; Matter of Lang, 156 Mise.
448.) V. Decedent did not cancel his proposed trip. His efforts
during the period from February 22, 1954, until the date of his
death were in furtherance thereof. His ticket money was left
on deposit with the airline and is now an asset of the estate.
Appellant contends, therefore, that it is reasonable to assume
that decedent died on his trip to India and that the condition, if
any, as expressed in his will was fulfilled.

Harry Merwin for Valerie Pascal, respondent. There are no
triable issues of fact. The holographic paper writing dated
February 22, 1954, offered for probate, was in simple, clear and
specific language to take effect as the last will and testament of
Gabriel Pascal only ‘‘ if ’’ he died ‘‘ on this my trip to india ”’,
scheduled to commence the next day——February 23d. As that
trip was never taken and decedent died in New York four and
one-half months later, the condition was never met or fulfilled
and the paper writing was not decedent’s will at the time of his
death. (Matter of Poonarian, 234 N. ¥. 329; Dwight v. Fancher,
245 N.Y. TL)

Harry F. Mela and Lionel 8. Popkin for Eugenio Lehel,
respondent. I. The instrument offered for probate was to take
effect only on the condition that decedent died on ‘“‘ this my trip
to india’. The condition never having occurred, the instru-
ment never became effective as a will. (Matter of Poonarian,
234 N. Y. 329; Matter of Bittner, 104 Misc. 112.) II. The

Le 11
Le

record shows no issue of fact. III. None of the generalities
and arguments in petitioner’s opposing affidavits or unsup-
ported statements in her brief show the existence of any evi-
dence which would be admissible if there were a trial. (Dwight
v. Fancher, 245 N. Y. 71; Matter of Kearney, 258 App. Div.
39; Matter of Watson, 262 N. Y. 284.)

Frozssex, J. Petitioner, Marianne Speelman, offered for pro-
bate in the Surrogates’ Court, New York County, as the last will
of decedent, Gabriel Pascal, a handwritten document which
reads as follows:

“To Zaya Kingman-Speelman
470 Park Avenue N. Y.
This is my will if I
should die on this
my trip to india
‘You are my sol heiress.
Signed the 22 february 1954

‘Witnesses

[signatures] {signature] Gabriel Pascal
Daisy Haang in New-York City

Y. T. KAN

[oriental calligraphy] ’’

The petition for probate alleged that Gabriel Pascal died on
July 6, 1954, less than four and one-half months after the date
of said alleged will, leaving personal property worth over
$20,000; that his only next of kin were a widow, and a brother
residing in Venezuela; there were no children. Letters of
administration c.t.a. to petitioner were prayed for.

Formal answers and objections to probate were filed by
decedent’s brother, Eugenio, and his widow, Valerie. The
latter, it appears, obtained an interlocutory judgment of divorce
against decedent in California on June 5, 1954, less than three
weeks before his death. Valerie Pascal also applied to the same
court for letters of administration in said estate. Both contest-
ants assert, among other things, that the paper offered for proof
by petitioner ‘‘ is not a will and never became effective as such ”’.

Following the service of the answers, the widow moved for
‘a decree as summary relief ’’ under rule 113 of the Rules of

112 Pe

Civil Practice, adjudging that the paper offered by petitioner
‘“was subject toa condition precedent which never occurred ”’
and therefore never became effective as the will of decedent;
she also asked for a dismissal of the petition. In an accompany-
ing affidavit, she states that Gabriel Pascal did not make the
trip to India, ‘‘ did not die on any such trip ’’, but died in Roose-
velt Hospital in New York City ‘‘ after a prolonged illness ’’.
A death certificate annexed to the affidavit showed the decedent
to have been a sixty-three-year-old film producer, of Hungarian
birth and British citizenship, and death was there certified as
due to ‘‘ natural causes ’’.

Petitioner’s first affidavit in opposition, sworn to September
28, 1954, asserted only that said motion was ‘‘ premature ’’, and
should await disposition of the pending probate proceeding.
However, an amended affidavit, sworn to October 5, 1954, further
stated that petitioner was prepared to establish, among other
things, the following facts: that decedent’s reference to the
“¢ trip ’? was included only because he was to fly to Bombay for
an extended business trip on February 23d, the day following the
execution of the document in question, and his thoughts were
then very much occupied with the prospect of the trip; that
decedent, though holding tickets for that flight, was advised by
cable on February 22d or 23d that the person he was to visit in
India would not be available until May, 1954; that the trip was
never cancelled by decedent, but merely postponed; that the
will offered by petitioner was never cancelled; that decedent
was not living with Valerie Pascal when he executed the will
nor for some time prior thereto, his said wife having obtained
an interlocutory decree of divorce in California on June 15, 1954,
based upon her sworn statement that she had been separated
from decedent since January 1,.1953; and, finally, that she can
demonstrate ‘‘ that the conditional language in the said instru-
ment was not in fact intended to be a condition precedent to
its probate but that it was only included in his Will as a state-
ment of inducement — the reasons why he was drawing that will
at that time ”’,

The Surrogate denied summary relief upon the ground that
rule 113 of the Rules of Civil Practice, ‘‘ is not applicable to this
proceeding ’’, and in any event ‘‘ the question of law presented
depends upon the resolution of triable issues of fact’, The

Le 113

Appellate Division reversed, granted summary judgment and
dismissed the petition for probate.

‘We agree with the Appellate Division that a contestant in a
surrogate’s proceeding may invoke the provisions of rule 113 of
the Rules of Civil Practice, wherever otherwise appropriate
(Surrogate’s Ct. Act, § 316; Rules Civ. Prac., rule 3; rule 113,
subd. 4; Lederer v. Wise Shoe Co., 276 N. Y. 459; Riley v.
Southern Transp. Co., 278 App. Div. 605; Matter of Fishkind,
271 App. Div. 1013; see, also, People ex rel. Lewis v. Fowler,
229 N. Y. 84), although occasion for granting such relief may be
rare in a probate proceeding.

However, we do not agree that summary judgment should have
been granted here. A willis properly admitted to probate when
the Surrogate is ‘‘ satisfied with the genuineness of the will, and
the validity of its execution ’’ (Surrogate’s Ct. Act, § 144, subds.
1, 2; emphasis supplied). Formerly, it was provided that the
surrogate be satisfied with the ‘‘ genuineness and validity ’’ of
the will, a change not without significance (L. 1837, ch. 460, § 17;
Matter of Davis, 182 N. Y. 468, 474-475). The provisions of
section 144 ‘‘look only to the formal validity of the will’s
execution and it is immaterial * * * that the will, if
probated, may be wholly inoperative by reason of the invalidity
of its provisions or of subsequent events making it ineffective ”’
(Matter of Higgins, 264 N. Y. 226, 229; Matter of Davis, swpra,
p. 475; Matter of Crownse, 168 Misc. 359, 361; see, also, Ew Parte
Lindsay, 2 Brad£. 204, 208-209).

The succeeding section 145 of the Surrogate’s Court Act
provides for the construction of a will, and, so far as pertinent,
reads as follows: ‘‘If a party expressly puts in issue in a
proceeding for the probate of a will the validity, construction or
effect of any disposition of property, contained in such will, the
surrogate may determine the question, upon rendering a decree,
after notice * * * or * * * may admit the will to
probate and reserve the questions so raised for future considera-
tion and decree.’? (Emphasis supplied.) The genuineness and
validity of execution of the will are not questioned in this
proceeding; the contestants here seek an adjudication that the
holographic instrument offered for probate ‘‘ is not a will and
never became effective as such ’’.

114 Le
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We think the Surrogate was correct in stating that the question
of the effect of the alleged condition upon the validity of the
will, as to which we express no opinion, should be determined on
the trial of the probate, or subsequently, in accordance with
section 145 of the Surrogate’s Court Act (see Matter of Smith,
254 N. Y. 283, 289-290). The alleged will is unartfully drawn,
and a literal interpretation of its language is not necessarily
determinative. (Ea Parte Lindsay, supra, p. 209.) In Matter
of Poonarian (234 N. Y. 329) we took into consideration
extrinsic facts developed at the probate hearing. Such hear-
ing may shed light upon the intended effect and meaning of the
instrument here offered for probate, and whether or not it was
conditional.

The order of the Appellate Division should be reversed, and
the order of the Surrogates’ Court, dated November 17, 1954,
reinstated, with costs to all parties appearing separately and
filing separate briefs payable out of the estate. The appeal from
the order of the Surrogates’ Court, dated March 16, 1955,
entered on the order of the Appellate Division, should be dis-
missed (Civ. Prac. Act, § 591, subd. 2).

Conway, Ch. J., Desmonp, Dyz, Funp and Burxs, JJ., concur
with Frozssey, J.; Van Voornis, J., concurs in the following
memorandum: In Matter of Poonarian (234 N. Y. 329), the
testator died sixteen years after completing the trip; this
testator died before the trip was scheduled to begin. The
hearing may develop that this instrument had not ceased to be
a will at the time of testator’s decease.

Order reversed, ete.

Le
Amanpa Fuamer, as Administratrix of the Estate of Tuomas F.
Wrsow, Deceased, Appellant, v. Ciry or Yonxers et al.,
Respondents.

Argued April 26, 1955; decided July 8, 1955.

|

116 De
ee

David Avstreth and Howard Rukeyser for appellant. I. Since
plaintiff’s evidence amounted to a prima facie case, it was error
for the trial court to dismiss the cause of action and refuse to
submit the question of negligence to the jury. (Cohen v. Con-
solidated Gas Co. of N. Y., 187 App. Div. 213, 202 N. Y. 578;
Rabinowitz v. Solomon, 221 App. Div. 366; Kraus v. Birnbawm,
200 N. Y. 1380; Kiernan v. Krauth, 242 App. Div. 772; Fearick v.
Lehigh Valley R. R. Co., 210 App. Div. 742; Bagley v. Bowe,
105 N. Y. 171; Kennedy v. McAllaster, 31 App. Div. 453; Keenan
v. Sheehan, 205 Misc. 183; Noseworthy v. City of New York, 298
N. Y. 76.) II. On motion to dismiss at the end of plaintiff’s case,
defendant must point out the particular material allegation not
proven by the evidence. (Ramsay v. Miller, 202 N. Y. 72; Binsse
v. Wood, 37 N. Y. 526; Gerding v. Haskin, 141 N. Y. 514; Pratt
vy. Dwelling House Mut. Fire Ins. Co., 180 N. Y. 206; Weber v.
Germania Fire Ins. Co., 16 App. Div. 596; Berkenstat v. Oliver,
275 App. Div. 679; Guenther v. Amsden, 16 App. Div. 607, 162
N. Y. 601; Mackey v. Empire Rollerdrome of Brooklyn, 267
App. Div. 995.) IIT. Defendant police officer’s killing of plain-
tiff’s intestate by means of unjustifiable violence constituted
gross negligence. (McCarthy v. City of New York, 273 App.
Div. 945, 273 App. Div. 1007; Goldman v. City of New York,
278 App. Div. 770; Wilkes v. City of New York, 283 App. Div.
724.) IV. It was error for the trial court to refuse to permit
the jury to consider the question of negligence while submitting
to it for determination the issue of assault based upon the same
evidence. (La Plante v. Johnson, 163 Mise. 96, 255 App. Div.
248; McGovern v. Weis, 265 App. Div. 367, 266 App. Div. 712.)

J. Raymond Hannon, Corporation Counsel, for respondents.
I. Defendants were not required to point out the material
allegations not proven by the evidence in moving to dismiss the
first cause of action. (Byrnes v. New York, Lake Erie é Western
R. RB. Co., 113 N. Y. 251; Collelli v. Turner, 154 App. Div. 218,
215 N. Y. 675; Fearick v. Lehigh Valley R. RB. Co., 210 App. Div.
742.) II. Plaintiff’s third cause of action was properly dis-
missed.

a 117

Dyz, J. This is an action for the wrongful death of plaintiff’s
intestate, Thomas Franklin Wilson, who was shot and killed
by a member of the Yonkers police force under circumstances
allegedly requiring the City of Yonkers and the two police
officers involved to respond in damages.

The complaint sets forth three causes of action, the first for
negligence, the second for assault and a third against the city
alone which was not prosecuted, for having knowingly and
negligently employed unreliable police officers.

The defendants joined issue by filing an answer denying
generally all three causes of action and interposed the defense
of decedent’s alleged contributory negligence to plaintiff’s cause
based on negligence.

Upon the trial and at the close of the plaintiff’s proof, the
trial judge granted defendants’ motion to dismiss the plain-
tiff’s alleged third cause of action and at the close of all the
proof granted defendants’ motion to dismiss the plaintiff’s
alleged first cause (negligence) for failure of proof, but denied
a similar motion addressed to the second cause, assault, and
submitted that to the jury which returned a verdict of no cause
in favor of defendants.

This appeal deals only with the dismissal of the first cause of
the complaint based on negligence. Briefly stated, the issue for
our consideration is whether plaintiff’s proof— which, for
purposes of the motion, we accept as true — when viewed in the
light of the most favorable inference rule— was prima facie
sufficient to support a finding of negligence (Cohen v. Consoli-
dated Gas Co., 187 App. Div. 218, affd. 202 N. Y. 578). Likewise,
when there is a conflict — and here there was — it is for the jury
to determine the issue of credibility and weight (Kraus v. Birn-
baum, 200 N. Y. 130, 133; Meiselman v. Crown Heights Hosp.,
285 N. Y. 389, 392; Sadowski v. Long Is. R. R. Co., 292 N. Y.
448, 455).

Evidence adduced by witnesses called by the plaintiff shows
that on the evening of August 26, 1949, the plaintiff’s intestate,
then twenty-eight years of age, and his nephew, Harold Flamer,
met at the latter’s home. At about 9:30 p.m. they went on a
round of social beer drinking in the course of which they visited
several friends and neighborhood taverns, finally winding up at
the Columbia Bar and Grill between 12:30 and one o’clock. There

118 De
ee

they engaged in some friendly horseplay with each other but
stopped when warned to do so by the ‘‘ bouncer’. Decedent
then went to the end of the bar and engaged in a friendly con-
versation with a former girl friend which, for ‘some reason not
disclosed, turned into an argument. The barkeeper put in a
call for the police. In the meantime the decedent broke off his
argument with the girl and rejoined Flamer for a glass of beer.

When the officers entered everything was quiet. Nonetheless,
they rushed to where decedent was sitting and grabbed him by
the arms and began beating him over the head and shoulders
with their night clubs and fists. Decedent struggled to his feet
and, in an effort to defend himself, grabbed Officer Porach’s
night stick. In the ensuing struggle, they both went against the
wall. Officer Hopper in the meantime backed away from the
tussle and reached for his gun. Flamer shouted ‘‘ Don’t shoot
him, he is drunk’’. Hopper nodded his head as if indicating
that he understood. By this time decedent and Porach had sep-
arated. Decedent was then standing in about the middle of the
room shaking his head in a dazed manner, his arms hanging by
his sides. Hopper, his gun drawn, backed up to the bar and
from a distance of about twelve to fifteen feet from the dece-
dent took aim and without any word of warning shot decedent
who at the moment was looking in the other direction.

This testimony was furnished by four eyewitnesses: Flamer,
the intestate’s companion, a brother of the intestate who
happened to enter the barroom just at the climactic moment, a
porter employed in the tavern and a patron — all of whom were
subjected to a severe and searching cross-examination which
failed to shake their stories as to any material aspect. The
police officers, contradicting the unfavorable aspects of the
plaintiff’s version of the affair, contended that the plaintiff’s
intestate was carrying on in such a threatening and belligerent
manner as to require prompt and drastic action to subdue him;
in other words, that in shooting the decedent they used no more
force than the circumstances warranted.

In such a state of the record it was for the jury and not the
court to determine which of the two versions was credible, which
preponderated and in whose favor. While the plaintiff did not
attempt to prove in so many words that the officers were engaged
in making an arrest, we believe such fact was implicit in the

ee 119
ee

circumstances of this case and that the plaintiff’s failure to
show such fact by separate proof was not fatal. In any event,
such omission is of no consequence on this appeal as whether
the officers were or were not making an arrest is a question of
fact for the jury.

We have also found it difficult to reconcile the action of the
trial court in granting defendants’ motion for dismissal of the
plaintiff’s first cause (negligence) and at the same time denying
their motion to dismiss the second cause (assault) and letting
that issue go to the jury.

In negligence actions, ordinarily the only proof required to
establish a prima facie case is lack of care commensurate with
the circumstances, while to support an action based on assault,
intent is an essential element (La Plante v. Johnson, 163 Misc.
96, affd. 255 App. Div. 248). We believe the court erred as a
matter of law when it dismissed the plaintiff’s first cause based
on negligence. Having reached this conclusion, other points
assigned as error need not detain us. We have purposely
omitted discussion of the defense based on intestate’s alleged
contributory negligence, as that too raised an issue of fact
which should have been left to the jury.

The judgment of the Appellate Division and that of the Trial
Term should be reversed and a new trial granted, with costs to
abide the event.

Conway, Ch. J., Desmonp, Fuxp, Frozssen, Van Voornis and
Burxs, JJ., concur.

Judgments reversed, ete.
|

In the Matter of Samus, Conen, Respondent, against Coconmne
Propvors, Ino., et al., Appellants.

Argued April 28, 1955; decided July 8, 1955.

Elliot A. Wysor and Leonard 8. Halpert for appellants.

- I. Respondent lost the right of a director to have an inspection
of its books and records when he ceased to be a director of Coco-
line. Thereafter, there was no longer any basis for the granting
of the order under appeal. (Matter of Overland v. Le Roy
Foods, 279 App. Div. 876, 304 N. Y. 573; Matter of Cravatts
v. Klozo Fastener Corp., 205 Mise. 781; Strassburger v. Phila-
delphia Record Co., 335 Pa. 485; Rohwer v. Gibson, 126 Cal.
App. 707; People ex rel. Security Trust Co. of Rochester v.
Treasurer of Co. of Monroe, 121 App. Div. 84; Traub v. Arrow

ee 121
Dr en

Mfg. Corp., 207 App. Div. 292; Northern Pacific R. R. v. Dustin,
142 U.S. 492; Weber v. Zimmerman, 23 Md. 45.) II. Respondent
disqualified himself from asserting rights of his fiduciary office
as director. He did not have the equitable power to make any
demand for an inspection effective as the basis for a writ of
mandamus. (Matter of Davis v. Keilsohn Offset Co., 273 App.
Div. 695 ; Matter of Latimer v. Herzog Teleseme Co., 75 App. Div.
522; Matter of Hitchcock, 149 App. Div. 824; People ex rel.
Wood v. Board of Assessors ¢ Collector of Taxes, 137 N. Y. 201;
People ex rel. Pierce v. Sohmer, 167 App. Div. 437; People
ex rel, Wilkins v. Ascher Silk Corp., 207 App. Div. 168, 237
N. Y. 574, 237 N. Y. 630; Matter of Bellman v. Standard Match
Co., 208 App. Div. 4; Matter of Posen v. United Aircraft Prod-
ucts, 201 Mise. 260; Melup v. Rubber Corp. of America, 181
Mise. 826.) III. Respondent’s demand for inspection was not
refused prior to the institution of this proceeding. A refusal
is a necessary jurisdictional fact which must be proved before
mandamus may issue. (Matter of Wong Wah Yew v. Mun Hey
Pub. Co., 275 N. Y, 615.) IV. The answer having raised factual
issues relating to the effectiveness of the demand, and the
absence of a refusal, at least required a trial thereof, and such
issues could not be summarily determined by Special Term.
(Matter of Durr v. Paragon Trading Corp., 270 N. Y. 464;
Matter of Schulman v. Dejonge & Co., 270 App. Div. 147; People
ex rel. Pumpyansky v. Keating, 168 N. Y. 390.)

Charles Gottlieb for respondent. I. The rulings below con-
formed to the principle of corporate practice enunciated by this
court. The relief was granted while the applicant was still a
director. (People ex rel. McInnes v. Columbia Paper Bag Co.,
103 App. Div. 208; People ex rel. Leach v. Central Fish Co.,
117 App. Div. 77; People ex rel. Wilkins v. Ascher Silk Corp.,
207 App. Div. 168, 237 N. Y. 574; Matter of Hafter v. Eagle
Fish Co., 296 N. Y. 808; Matter of Overland v. Le Roy Foods,
304 N. Y. 578.) II. The right to inspect was proper when it was
granted. Subsequent events did not foreclose respondent’s
right to proceed with inspection — especially since the inspec-
tion was limited to the period of his tenure as director.
(Abrams vy. Allen, 297 N. Y. 52; Hanover Nat. Bank v. Amer-
ican Dock & Trust Co., 148 N. Y. 612; Logan v. Fidelity-Phenia

Fire Ins. Co., 161 App. Div. 404.) III. The order below was
properly granted because of appellants’ failure to submit with
their answer an affidavit showing evidentiary facts. (Matter
of Gardiner v. Harnett, 168 Misc. 349, 255 App. Div. 106;
Matter of Clifford v. Seaman, 278 App. Div. 667.)

Fronssux, J. This is an article 78 proceeding, in the nature of
mandamus, for an order compelling respondent corporation to
permit petitioner Cohen to inspect its corporate books and
records. At the time this proceeding was instituted, Cohen was
a director of the corporation, and had been such continuously
since its organization in 1940. He transferred his previously
held stock in this corporation to his wife.

Cohen, who is an attorney, took an active part in organizing
the corporation, acting as its financial and legal adviser. It is
apparent from the papers presented on this appeal that the
underlying dispute here is over an alleged unauthorized $25,000
salary now being drawn by the president, plus the cost and
maintenance of an automobile for his use, on the one hand, and
the reduced retainer and legal fees Cohen claims are due to him
from the corporation, on the other. Moreover, Cohen makes
additional charges of mismanagement, defalcations and mis-
appropriation of corporate funds.

On November 29, 1954, Cohen sent a letter to Samuel Klein,
president of and dominant figure in the corporation, charging
him with misappropriating moneys of the corporation for auto-
mobiles and maintenance, and demanding that he restore sai:
moneys. Cohen also requested information regarding expendi-
tures for salaries, commissions and expenses over the past six
years. Klein did not answer the letter, but called a specia’
meeting of the board of directors for December 10, 1954.

At that meeting, Klein and one Collins voted, over Cohen’s
objection, to have a new board elected on December 20th. They
also voted to postpone consideration of Cohen’s charges until
the new board was installed. At this December 10th meeting,
Cohen demanded an inspection of the corporate books an
records, but was refused. Cohen thereupon brought the instant
proceeding to compel that inspection.

The case came on for hearing on December 20, 1954, the same
day for which the stockholders’ meeting was scheduled. At

| 123
bse

about 12:30 p.m., following the hearing, Special Term ruled
from the bench in petitioner’s favor, and indorsed the moving
papers as follows: ‘‘ Petitioner’s motion to examine books and
records of Cocoline Products, Inc., granted with accountant.’’
However, no order was signed at that time.

Later that same day, the stockholders’ meeting was held, and
Cohen was not re-elected to his position as director. On the
following day, by order to show cause, the corporation moved
for leave to file a supplemental answer and for a ‘‘ re-hearing ’’.
Special Term granted this motion for ‘‘ reargument’’, but, ‘‘ in
view of the allegations made by the petitioner and the refusal of
the officers of the corporation to allow him to inspect the
corporate books ’’, he adhered to his original determination,
notwithstanding that petitioner was ‘‘no longer a director’.
Then, on January 18, 1955, the order appealed from, reciting the
application for a ‘‘rehearing’’, and granting petitioner’s
motion to inspect the books and records, was made. The Appel-
late Division affirmed unanimously and without opinion, and our
court granted leave to appeal.

In order properly to perform his directing duties, a corporate
director must, of course, keep himself informed as to the policies,
business and affairs of the corporation, and as to the acts of
its officers. He owes a stewardship obligation to the corporation
and its stockholders, and he may be subjected to liability for
improper management during his term of office. Because of
these positive duties and potential liabilities, the courts of this
State have accorded to corporate directors an absolute, unquali-
fied right, having its roots in the common law, to inspect their
corporate books and records (Matter of Overland v. Le Roy
Foods, 279 App. Div. 876, affd. 304 N. Y.573; Matter of Hafter v.
Eagle Fish Co., 270 App. Div. 995, affd. 296 N. Y. 808; People ex
rel. Wilkins v. Ascher Silk Corp., 207 App. Div. 168, affd. 237
N. ¥. 574, motion for reargument denied 237 N. Y. 630; Matter of
Davis v. Keilsohn Offset Co., 273 App. Div. 695; People ex rel.
Leach v. Central Fish Co., 117 App. Div. 77; People ea rel.
McInnes v. Columbia Bag Co., 103 App. Div. 208; People ea rel.
Muir v. Throop, 12 Wend. 183; People ex rel. Onderdonk v. Mott,
1 How. Prac. 247).

But when a director is removed from office, even if thisis done
while his suit to compel inspection of the books and records is

pending before Special Term, his absolute right to such an
inspection terminates forthwith (Matter of Overland v. Le Roy
Foods, supra; Matter of Hafter v. Eagle Fish Co., supra). This
is so manifestly because he no longer has a voice in governing the
corporation, and consequently is under no further duty to keep
himself informed either as to corporate business and policies or
as to the acts of its officers. However, he still remains potentially
liable for wrongful acts of the directors committed during his
term of office.

Here Cohen claims (1) he may have ‘‘ exposed himself to
personal liability for what transpired during his term of office ”’
(see Abrams v. Allen, 297 N. Y.52, 55-56) ; (2) to that extent he is
entitled to inspection; and (3) he should not be obliged to ‘* sit
back and wait until someone sues him for dereliction of duty ”’.

Stockholders have long been granted a qualified right, resting
in the trial court’s discretion, to protect their financial interest
in a corporation by inspecting its books and records (see Matter
of Steinway, 159 N. Y. 250). Directors, while in office, must
protect not only their own interests, but also those of the
corporation and of the stockholders; consequently, as noted
above, their right to inspect has been made absolute. While his
duty to the corporation and to the stockholders ceases upon
termination of his office, he may still have a personal respon-
sibility interest to safeguard, the protection of which could very
well inure to the benefit of the stockholders by a disclosure to
them of any derelictions by other directors or officers. And this
is more likely in the case, as here, of a director of long service
who unexpectedly fails of re-election just at a time when he was
about to undertake an investigation in his capacity as director.

It would seem to follow, then, that, although he has no
absolute right, a discharged director may have a qualified right
to inspect the corporate books and records covering a period of
his directorship, whenever in the discretion of the trial court he
can make a proper showing by appropriate evidence that such
inspection is necessary to protect his personal responsibility
interest as well as the interest of the stockholders.

In the instant case, however, Cohen was granted an order to
inspect on the basis of the pleadings and affidavits only. The
court so decided from the bench, and, after granting ‘‘ reargu-
ment ’?— actually a rehearing since it considered the new

ee 125
esses

matter —it adhered to its former determination, embodying the
whole proceeding in a single order. If this was done on the
theory Cohen had an absolute right to inspect, it was clearly
error, for Cohen ceased to be a director while the proceeding
was still pending before the court (Matter of Hafter v. Eagle
Fish Co., supra; Matter of Overland v. Le Roy Foods, supra).
And if it was done in the exercise of discretion, it would also have
been error, for the answering papers supplemented by the
rehearing papers raise triable issues of fact as to the purpose
for which Cohen has sought this inspection, which issues should
have been resolved only after a hearing (Civ. Prac. Act, § 1295;
see Matter of Breswick & Co. v. Greater N.Y. Inds., 308 N. Y.
1041).

The order appealed from should be reversed, with costs in
all courts to abide the event, and the matter remitted to Special
Term for further proceedings in accordance with the opinion
herein.

Dzsmonp, J. (dissenting). I, too, am for reversal, but I oppose
remission of the proceeding to Special Term for the exercise of
discretion. Under settled rules and our own decisions, there is
no power in any court to grant, to one who, like petitioner, is
neither a director nor a stockholder of a corporation, an inspec-
tion of the corporate books. The applicable rule is so old,
simple, and well known that we have no choice but to follow it,
and to order this petition dismissed on the law.

Ever since People ex rel. Muir v. Throop (12 Wend. 183,
185, 187 [1834]) and People ew rel. Onderdonk v. Mott (1 How.
Prae. 247 [1845]), it has been settled in this State, as it is else-
where (see Machen v. Machen & Mayer Elec. Mfg. Co., 237 Pa.
212), that a director has an absolute and unqualified right to
inspect the corporation’s books and records. But it is settled,
too, that such right is an incident of the office of director to help
the incumbent carry out his duty of ‘‘ directing ’’ the corpora-
tion’s affairs (People ex rel. Leach v. Central Fish Co., 117 App.
Div. 77, 80; People ex rel. Wilkins v. Ascher Silk Corp., 207 App.
Div. 168, affd. 287 N. Y. 574, note 15 A. L. R. 2d 41). Since he
cannot perform those duties without knowledge of the company’s
affairs, he must have free access to the books (People ex rel.
Melnnes v. Columbia Bag Co., 103 App. Div. 208). Accordingly,

126 Pe
ge

so long as he is a director (see McInnes and Machen cases,
supra) his exercise of the right of inspection cannot be challenged.
Likewise, of course, the absolute right ceases absolutely when
his term of office ends, however abruptly and for whatever
reason (Matter of Hafter v. Eagle Fish Co., 296 N. Y. 808;
Matter of Overland v. Le Roy Foods, 304 N. Y. 573). One who is |
a director must be given his inspection, regardless of bad motives
(see Machen and McInnes cases, supra) and, by the same reason-
ing, one who has ceased to be a director cannot be granted such
relief, no matter how pure his motives. A director has an
absolute right so long as he holds office. A stockholder has a
qualified right so long as he holds stock (Matter of Steinway, 159
N. Y. 250). Since petitioner is neither a director nor a stock-
holder, he has no rights at all, as to inspection. A holding that
inspection of corporate books by a discharged director may be
ordered in the discretion of the courts, is without precedent,
unnecessary and in conflict with all the previous decisions,
especially Hafter and Overland (supra).

The order should be reversed and the proceeding dismissed,
with costs in all courts.

Conway, Ch. J., Vaw Vooruis and Burxn, JJ., concur with
Froussex, J.; Dusmonn, J., dissents in part in an opinion in which
Dvyz and Foto, JJ., concur.

Order reversed, etc.

In the Matter of the Estate of Jamms HE. Atsricut, Deceased.
Wriiam W. Ausricut, as Executor of Jams HE. Arsricrt,
Deceased, Respondent; Eprru EH. Fanvey [Aupricat], Appel-
lant.

Argued May 81, 1955; decided July 8, 1955.

George Kent Weldon for appellant. A separate trial of one
issue should be denied where, as here, it involves the merits
of the case and will result in trying the main issue twice.
(Fonville v. Irving Poultry Co., 243 App. Div. 528; House v.
Scheffler, 261 App. Div. 1088; McGurty v. Delaware, Lacka-
wanna and Western R. R. Co., 172 App. Div. 46; Smith v. Western

128 Le
ee

Pacific Ry. Co., 144 App. Div. 180, 203 N. Y. 499; Commercial
Trust Co. of N. Y. v. Columbia Trust Co., 183 App. Div. 106;
Matter of Cook, 244 N. Y. 63; Matter of Trowbridge, 266 N. Y.
283; Stevenson v. News Syndicate Co., 302 N. Y. 81.)

Edward W. Stitt, Jr., Charles F. Krause, Jr., and J. Paul
Gerardi for respondent. I. The Surrogate was correct in order-
ing a separate trial of the issue respecting the validity and
effect of the settlement agreement. (Matter of Cook, 244 N. Y.
63; Matter of Teller, 196 Misc. 933, 277 App. Div. 937; Matter
of Frame, 128 Mise. 788, 234 App. Div. 748; Matter of Trow-
bridge, 266 N. Y. 283; Warner v. Star Co., 162 App. Div. 458.)
II. Whether or not appellant was decedent’s common-law wife,
her rights are fully protected by the Surrogate’s order for a
separate trial of the issue respecting the validity of the settle-
ment agreement. (O’Brien v. Lodi, 246 N. Y. 46; Farrington
v. Harlem Sav. Bank, 280 N. Y. 1; Yehle v. New York Central
R. R. Co., 267 App. Div. 301, 295 N. Y. 874; Werden v. Werden,
255 App. Div. 795; Matter of White, 182 Misc. 223, 268 App.
Div. 759, 293 N. Y. 767; Yonkers Fur Dressing Co. v. Royal
Ins. Co., 247 N. Y. 435.) III. Since the Surrogate’s exercise
of discretion was not arbitrary or an abuse of discretion, the
certified question should be answered in the affirmative. His
order was proper. (Spencer v. Hunt, 247 App. Div. 503; Matter
of Lawer v. Board of Elections of City of N. Y., 262 N. Y. 416;
New York Post Corp. v. Kelley, 296 N. Y. 178.)

Van Vooruis, J. Appellant, claiming to be decedent’s com-
mon-law widow, filed a notice of election to take her intestate
share pursuant to section 18 of the Decedent Estate Law.
Subsequently she entered into a settlement agreement with the
executor whereby she was to receive approximately $15,000, in
consideration of which she promised to withdraw her notice of
election and to give quitclaim deeds to nine parcels of real estate
owned by decedent. After delivering one deed, she refused to
execute or to deliver the remaining eight. The executor then
moved for an order by the Surrogate compelling her to execute
and deliver these remaining deeds. In her opposing affidavit,
appellant asked to be relieved of the settlement agreement, upon
the ground that it was improvident and unconscionable -in that
she contends that the executor did not reveal the true value of

a 129
ee}

the estate which, she asserts, exceeds $200,000. The Surrogate
denied her cross application to be relieved of the settlement, and
granted the executor’s motion for an order to compel her to
execute the deeds. On appeal, the Appellate Division reversed
and remitted the matter to the Surrogate’s Court for a deter-
mination after a hearing concerning the validity and effect of
the settlement agreement. In a memorandum decision, the
Appellate Division said: ‘‘ The Surrogate’s Court has plenary
jurisdiction to make a full, equitable and complete disposition
of all the issues presented in that proceeding, including the
question of whether the settlement was binding and effective.’’

The executor moved in Surrogate’s Court under section 443
of the Civil Practice Act for a separate, preliminary trial of the
issue concerning whether the settlement agreement should be
vacated. In granting this motion, the Surrogate said: ‘‘ The
cross-relief asked for, viz., a trial of all the issues, is denied at
this time, in the exercise of discretion, since the trial of the
above-stated issue, if adverse to the respondent [appellant here]
will end the litigation and render a trial on the merits of the
other issue unnecessary.’’ That determination was affirmed by
the Appellate Division and the order of affirmance is the subject
of this appeal. Two of the Justices at the Appellate Division
dissented upon the ground that the validity of the agreement
should not be tried separately for the reason that, in their view,
whether she is the widow of decedent would be an important
factor in deciding whether the settlement agreement is uncon-
‘scionable,

No rule of law or vested right of appellant was violated by
the exercise of discretion which was made by the Surrogate’s
order, affirmed by the Appellate Division, directing that the
validity of the settlement agreement should be tried separately
in advance of a trial of whether she was decedent’s common-
law wife. In asking for the vacation of the settlement agreement,
she stated by affidavit that ‘‘I was unaware of the full extent
of my husband’s property, which I now believe to be in excess
of $216,586.71, the valuation given to the gross estate in the
New York State Transfer Tax proceeding as my present attorney
advises me * * * which will indicate to this court that the
consideration for my release was so inadequate as to be
unconscionable.’’

Nowhere in appellant’s affidavit is it stated that the amount
of the estate was misrepresented to her in the negotiations lead-
ing to the settlement agreement. Of course, an executor or
administrator stands in fiduciary relationship to the beneficiaries
of the estate of which he is the personal representative, and it!
is his duty to make full and accurate disclosure to his cestuis que}
trustent of relevant facts and figures concerning the administra-
tion of the trust. There may have been an obligation of respond
ent as executor of his deceased brother’s estate, and the main|
beneficiary, to disclose to appellant the material facts concerning,
the estate before this settlement agreement was entered int
unless she knew them already. At least, there was such an
obligation if she was in reality decedent’s widow. In eithe:
event, that is the most that the executor was required todo. Tha
obligation respondent contends was fulfilled. He avers tha
appellant’s then attorney knew the approximate amount of th
decedent’s estate. In fact, it is contended that the estate turne
out to be worth something less than the amount which hey
attorney was told.

Concerning the amount of the estate, it is true that responden{
executor stood in a dominant position regarding appellant. Hi.
facilities for understanding its value were presumably greate:
than hers, although she appears to have worked for decedent an:
may have been familiar with the eight parcels of real estate an
their value which she was to deed to respondent under the settle]
ment agreement. The executor was in an inferior position t
appellant in not having at his command sources of informatio:
available to her regarding whether or not she was the common}
law wife of decedent. She knew what the facts were on tha|
subject better than anyone else could have known them excep
the man whom she claims to have been her husband.

Although the validity of her legal status as widow necessaril
bulked large in offering or consenting to any settlement whic!
was or might have been made of her claim to take against the wil
under section 18 of the Decedent Estate Law, as the dissentin;
Justices at the Appellate Division said, nevertheless that does n
preclude a separate trial of the preliminary issue of whether th|
settlement agreement should be vacated. That issue depen
at the very most which she can claim, upon whether there was
full and fair disclosure to appellant of the facts concerning th

| 131
Pe
amount of the estate at the time when she signed the settlement
agreement. At that time it had not been established (and has
not yet) whether she was legally his widow. The negotiations
necessarily were affected by the probability or lack of it that she
would be held to have been decedent’s common-law wife by the
Surrogate after trial. That was a factor concerning which both
executor and appellant had to make up their own minds, with
independent legal advice, and about which they could deal and
must have dealt at arm’s length. The executor had no fiduciary
duty, as has been previously stated, to advise claimant concern-
ing whether she was legally the wife of his testator. She had
to make up her own mind upon that issue. It was enough for
him to keep track of the estate.

Therefore, whether or not the settlement agreement is to be
set aside will depend, at most, upon whether the executor faith-
fully informed appellant concerning the facts regarding the
estate at the time when the agreement was made. It will not
depend upon what ultimately proves to have been her status
as widow. Upon the trial of the preliminary issue, the Surro-
gate cannot make a settlement for the parties, nor determine
whether they should have made this settlement, depending upon
how he, the Surrogate, would have appraised the probability or
improbability that the common-law wife question would be
decided one way or the other. Whether the settlement agree-
ment was ‘‘ reasonable ’’, ‘‘ oppressive ’’, ‘‘ unconscionable ”’
depends not upon whether it was the amount which the Surrogate
might think that she ought to have been paid or to have accepted
in settlement gauged by that variable factor. It will he set aside
or not depending upon whether she was informed concerning
the estate.

For these reasons, we think that the Surrogate and the
majority at the Appellate Division did not exceed their powers
in holding that whether the settlement agreement should be set
aside is an issue that should be tried first. It does not involve
an adjudication of her status as widow. If appellant is defeated
upon that preliminary trial, the main trial will be unnecessary ;
she will be obliged (in the absence of some factual situation which
is not disclosed by this record) to execute and deliver the deeds
to the eight parcels of real property as she agreed to do in the
settlement agreement. If she succeeds upon the preliminary

132 |

trial, it will then be necessary to proceed to a trial at which her
status will be adjudicated as decedent’s lawful widow entitled
to her intestate share in the estate, or as a mere intruder entitled
to nothing.

There is ample precedent for conducting a preliminary. trial
upon the validity of a release or settlement agreement (Matter
of Cook, 244. N. Y. 63; Matter of Frame, 128 Misc. 788, Fouzy, 8. ;
see, also, Matter of Frame, 234 App. Div. 748, affg. the final
decree; Warner v. Star Co., 162 App. Div. 458, 461-462).

The order appealed from should be affirmed, without costs, and
the question certified answered in the affirmative.

Coxway, Ch. J., Desmonp, Dyz, Futp, Froussen and Burks, |
JJ., concur. .

Order affirmed, ete.
PC

Axrtuur Stonz, Respondent, v. Bretzy Bros., , Appellant.
Argued June 8, 1955; decided July 2, 1955.

Hyman BR. Friedman and Samuel J. Jackman for appellant.
I. Plaintiff conceded and admitted that the act of opening the
chain was an unloading act.. The jury is thus barred from finding
that same was not an unloading act. II. The jury cannot be
permitted to find, in the face of the written contract, that the
opening of the chain was not an unloading act. (Braxton v.

134 |

Mendelson, 233 N. Y. 122; Pedersen v. Stockard S. S. Corp.,
268 App. Div. 992; Singer Mfg. Co. v. Rahn, 182 U. S. 518;
Anderson v. Boyer, 156 N. Y. 93; Delisa v. Arthur F. Schmidt,
Inc., 285 N. ¥. 314; Hexamer v. Webb, 101 N. Y. 377; Wyllie v.
Palmer, 187 N. Y. 248; McNamara v. Leipzig, 227 N. Y. 291;
Morris v. Brown, 111 N. Y. 318; Lewis v. New York, 0. & W. Ry.
Co., 210 N. Y. 429.) ITI. Even if defendant’s ‘‘transportation ”’
obligation be extended to include an obligation to open the chain
in the course of the unloading, the jury could not find, on this
record, that defendant had supreme control over such act.
(Green v. Wachs, 254 N. Y. 437; Irwin v. Klein, 271 N. Y. 477;
Charles v. Barrett, 233 N. Y.127.) IV. Plaintiff failed to prove
negligence. V. Plaintiff was barred as a matter of law because
of contributory negligence — assumption of risk.

Benjamin H. Siff and Melvin Sacks for respondent. I. Henn
was presumptively under defendant’s control. (Bartolomeo v.
Bennett Contr. Co., 245 N. Y. 66; Wawrzonek v. Central Hudson
Gas & Elec. Corp., 276 N. Y. 412; Delisa v. Arthur F'. Schmidt,
Inc., 285 N. Y. 314.) II. Directions by Bethlehem as to when
and where Henn was to park the trailer or remove the chains,
do not, as a matter of law, rebut the presumption. (Murray v.
Dwight, 15 App. Div. 241, 161 N. Y. 301; Ramsey v. New
York Central R. R. Co., 269 N. Y. 219; Henry v. Stanley Hod
Elevator Co., 129 App. Div. 618; McNamara v. Leipzig, 227
N.Y. 291; McHugh v. McCormick, 228 App. Div. 659; John-
son v. Netherlands Amer. Steam Navigation Co., 182 N. ¥.
576; Walsh v. Riesenberg, 94 App. Div. 466; Cowell v. Saper-
ston, 149 App. Div. 378, 208 N. Y. 619.) IIL. Assuming that
Henn may have been assisting Bethlehem, that fact did not,
as a matter of law, make him Bethlehem’s servant. (Bar-
tolomeo v. Bennett Contr. Co., 245 N. Y. 66; Delisa v. Arthur
F. Schmidt, Inc., 285 N. Y. 314; Murray v. Dwight, 15 App.
Div. 241, 161 N. Y. 301; McNamara v. Leipeig, 227 N. Y.
291; Burton v. American Bridge Co., 297 N. Y. 993.) IV. It
was a question of fact whether Henn’s removal of the chain
was an act in the furtherance of defendant’s business so as
to make defendant, his employer, responsible under the doctrine
of respondeat superior. (Mott v. Consumers’ Ice Co., 73 N. Y.
543; Osipoff v. City of New York, 286 N. Y. 422; Muller v. Hillen-

| 135

brand, 227 N. Y. 448; Riley v. Standard Oil Co. of N. Y., 231 N.Y.
301; Quinn v. Power, 87 N. Y. 535.) V. Whether Henn’s
removal of the chain was a facet of transporting the steel or a
facet of unloading the steel was a question of fact for the jury.
(Dittiger v. Isal Realty Corp., 290 N. Y. 492; May v. Dermont,
114 Mise. 106; Horby Realty Corp. v. Yarmouth Land Corp.,
270 App. Div. 696.) VI. Negligence and freedom from contribu-
tory negligence were questions of fact.

Desmonv, J. The question before us may be stated thus:
when Bethlehem Steel Company, in connection with the erection
by it of a bridge in Long Island City and the moving of steel
from a waterfront dock to the bridge site, had made a contract
with this defendant, a trucking corporation, to transport the
steel from dock to bridge site, and when the contract specifically
provided that all loading and unloading at the bridge site was
to be done by Bethlehem and transportation was to be done by
this defendant, and this defendant carried the steel from dock
to bridge site in its own motor truck driven by its own employed
chauffeur and the steel was tied or fastened on to the truck with
chains which were part of the truck’s equipment, and the truck
and load arrived at the bridge site where a Bethlehem employee
took over the direction of unloading, but defendant’s truck
dviver opened up the chains above referred to without waiting
for the hoisting apparatus to put a strain on the steel with the
result that some of the steel fell off the truck and injured plain-
tiff, who was a Bethlehem employee at the job, was defendant’s
truck driver absolutely and as matter of law an employee, for the
time being, of Bethlehem, since the latter was in charge of the
unloading, so that the truck driver was not the agent of defend-
ant in unhooking the chains, and defendant therefore not liable
for the truck driver’s negligence?

The Trial Justice, granting defendant’s motion to dismiss at
the close of plaintiff’s case, delivered a short opinion, the sub-
stance of which is contained in this paragraph: ‘I hold here as
a matter of Jaw the act of removing these chains was not part of
the duty of Bigley under its contract; that Henn in undertaking
to remove them, especially in the light of the testimony of the
witness Turner, who said that he, for Bethlehem, was in complete
control of the unloading operation and that it was his duty to see

136 PC
ee
that unloading was performed both from the viewpoint of
efficiency and safety, was not’ engaged in the business of his
master; that the plaintiff has failed. to make out a case, and the
defendant’s motion to dismiss is granted with an exception to
the plaintiff.’ ,

On appeal to the Appellate Division, however, that court wrote
a brief opinion, in which it pointed out that continuance in the
service of the general employer (defendant) is presumed until
command is shown to have been surrendered, and that, in the
present case, it was a jury question as to whether the chauffeur
was acting in the interest of his employer, or of Bethlehem, and
as to whether his act of unloosening these chains on his truck
was a preparation of that vehicle for unloading, rather than part
of the unloading operation itself. The dissenting Justice wrote
that since, by the written contract, Bethlehem had the whole duty
of unloading, therefore the chauffeur was performing a duty that
was exclusively that of Bethlehem and that, for his negligently
performing that duty, Bethlehem alone would be responsible. It
seems to us that on the facts in this record it cannot be held as
matter of law that this truck driver had completely passed from
the control of his own employer end into the employment of
Bethlehem when, on his own employer’s truck, he was unfasten-
ing chains which were a part of that truck, so as to make it
possible for Bethlehem to unload the steel. Of course, in a sense
the truck driver was furthering, and co-operating in, Bethlehem’s
contractual duty of taking the steel off the truck, but it would
not be irrational to say that at the same time he was doing work
that could be said to be that of his own employer, since he was
handling chains that belonged to his employer and which he, as
a servant of his employer, had, earlier that day, locked around
the steel. It is true that a Bethlehem employee (foreman
Turner) was in charge of the unloading and had given directions
to the truck driver, and that the unloading was Bethlehem’s job
per contract, but there is nothing to show that this driver’s
employer ever turned the driver over to Bethlehem. It would
not be unreasonable for a jury to say that the unlocking of the
chains, while a necessary preliminary to unloading, and in that
sense part of the unloading, was a necessary incident, also, .of
the handling of the truck itself and of its equipment,

ee 137
ee
The accident, in which plaintiff was injured, occurred on
November 12, 1953. Bethlehem was then and for some time had
been, building a highway bridge over a creek in Long Island
City. Defendant was in the general trucking and hauling busi-
ness. In July, 1953, Bethlehem and defendant entered into a
contract, the pertinent provision of which is as follows:

“The Carrier will unload at dock and/or railroad yard
specified and transport to site above mentioned at a point within
reach of Bethlehem’s equipment. Bethlehem will unload
carrier’s trucks at the site. Carrier will have on hand a com-
petent foreman who can speak English to take charge of loading
Carrier’s trucks and to whom orders can be given. Carrier will
furnish all necessary labor, tools, equipment, fuel and lubricants
necessary for the above described unloading and transporting.
Carrier will deliver girders in upright position.

‘‘The Carrier will assume all obligations placed upon
‘Bethlehem pertaining to the transporting of structural steel for
this project.’’

There is no doubt or dispute that under this contract
defendant was to do transportation only and Bethlehem was
to retain the bridge site unloading functions. On the after-
moon of November 12, 1953, acting under this contract, defend-
lant, the trucking company, took on board one of its trucks,
ja load of steel consisting of two very large structural steel pieces
weighing about five tons each and together being about five feet
wide. Defendant, through the services of a ‘‘ loader ’? employed
by it and of its truck driver Henn, secured these steel pieces
lonto its trailer pulled by its tractor truck, by fastening around
the steel pieces long steel chains belonging to the trucking
company. Hach of these chains had some kind of hook arrange-
iment which could be, and was, tightened to secure the load for
‘‘ the safety of the load at all times ’’. The truck and trailer,
ith the steel on board, travelled to the job site. As was the
practice, a foreman employed by Bethlehem took over when the
load arrived at its destination, and this foreman told defendant’s
hauffeur where to put the truck and assigned a crew of men,
mployed by Bethlehem, to unload the steel. The unloading
itself was done by a Bethlehem crane, the hook of which was
ttached to steel cables (not, of course, the chains above referred
0) which steel cables belonged to Bethlehem and were tightened

138 be
re

around the steel pieces. ‘The whole scheme of the unloading
operation was that these new chains or cables would be fastened

by Bethlehem’s men around the steel, then the crane would be
hooked on to these new chains and the lines from the crane

would be tightened, and then, and only then, would there be
unfastened the originally placed chains which belonged to
defendant trucking company. It is undisputed that it was the
invariable practice for the truck driver to remove these chains.
Baker, a Bethlehem employee, testifying for plaintiff, when asked
whether it was the truck driver’s job to take the chains off, said:
“Tt was always his job. The Bethlehem Steel don’t own the
chains.’’ (See, also, testimony of Bethlehem’s foreman Turner.)

From Baker’s testimony, we get the impression (and so could
a jury) that while the Bethlehem foreman might give a signal’
to the driver to remove the chains, the matter of exactly when to
remove them was to some extent up to the driver, who was an
experienced man in this business. It is undisputed, too, that the
only safe practice is to hook the crane chains on to the load before
loosening the truck’s chains, so that the crane and the sling
would be holding the load before the chains released it.
Bethlehem’s foreman, testifying for plaintiff, said that the
truck driver took no part in the unloading and took no orders
from the foreman, except that when Bethlehem’s men were ready
to take the load off he (the foreman) told defendant’s driver to
take off truck chains.

On this occasion, when the truck arrived at the site, the
Bethlehem foreman told the truck driver where the former
wanted the steel unloaded. The foreman, as was his custom,
told the driver where to put the truck, and then the foreman
assigned plaintiff and another Bethlehem employee to unload
the steel. Then he directed that the crane be brought for
unloading to the place where the truck was. The foreman then
told the chauffeur that the steel was going to be unloaded, and
the foreman went away to other duties. As he left, he saw the
chauffeur begin to take the front chain off but the foreman did
not consider there was any danger at that point since the rear
truck chain was still on and the Bethlehem men were hooking
the cable on to the steel load. Stone, the plaintiff, who was one
of the Bethlehem men assigned by the foreman to the job,
testified that when he came to the job the front truck chain had

as 139
ee

been removed but the rear truck chain was still on the steel
and plaintiff, too, thought that the rear chain would hold it until
the crane hooked on. Plaintiff and Baker, the other Bethlehem
man, climbed up on to the steel on the truck, and plaintiff then
began to fasten on to the steel the cables or chokers furnished by
Bethlehem which were going to be put on to the hook of the crane.
Plaintiff had fastened one of these chokers and was working on
another when suddenly one of the pieces of steel moved, slid off
the trailer and rolled over with plaintiff underneath it, injuring
him. It is true, as defendant argues, that the whole proof read
together shows that the correct unloading practice was that the
shackles and cables should first be fastened around the steel,
then the crane hook affixed to the chokers, then the line from the
crane tightened, and that only then should the truck’s own chains
have been loosened. Defendant concludes from this that the
loosening of the truck’s own chains was one of a series of steps
in:the unloading process and, of course, in a sense this is true.
However, as it seems to us, a jury could conclude that even
though this loosening of the truck’s chains was part of the
unloading in the sense that it took place in the middle of the
unloading preparations, nevertheless, in another sense it was
part of the truck driver’s duty even though it coincided, or over-
lapped, or came between, unloading steps which were being
performed by Bethlehem alone. A short and simple answer to
defendant’s argument is, it seems to us, that it cannot be said as
matter of law that a truck driver removing his own truck’s chains
from his truck load had necessarily become, for the moment, a
servant of the owner of the steel just because the latter had the
contract obligation to do the unloading. The realities of the
situation were such that the truck driver, by custom and practice,
did this unloosening as part of what he at least thought to be
his job.

The Trial Term dismissal of the complaint was based largely
on the terms of the contract between defendant and Bethlehem,
whereby the former was to do transportation only and Bethlehem
was to do all the bridge site unloading. From this, Trial Term
concluded that the truck driver was necessarily acting for
Bethlehem. We think there is a missing term in that argument,
or an erroneous assumption that because what the truck driver
did in unloosening the chains took place between two of the

140 Ln
- -

unloading steps, the unloosening was necessarily part of tl
unloading. We know that there are many situations ‘where a ;
general employer transfers an employee to a special employer
(see Ohlenschlager v. South Buffalo Ry. Co., 309 N. Y. 741,°
decided today) and we will assume “(doubtfully) that" the ju
could conclude from all the facts here that something of ‘that
nature did occur here. However, we cannot convince ourselves
that, as matter of law, such a conclusion was bound to result’
from this undisputed testimony. _

The Appellate Division majority, in reversing, pointed to the
settled law of New York (citing Delisa v. Schmidt, Inc., 285 N. Y.
314; Wawrzonek v. Central Hudson Gas & Elec. Corp., 276 N. Y.
412, and Bartolomeo v. Bennett Contr. Co., 245 N. Y. 66) that,
absent conclusive proof of surrender of control by the general
employer, the presumption is that the general employment
continues. The Delisa opinion, after stating this presumption, °
says, in effect (supra, p. 819), that the surrender of control may,
be by an agreement binding on the general employer, but there
is no evidence in the present case of any specific agreement to
transfer the truck driver from one employment to the other.
Defendant cites the Delisa case as one of its prime authorities,
but what the Delisa opinion said (p. 319) is that when workers
in a general employment are doing work which primarily
benefits a special employer, but which work is substantially
though indirectly beneficial to the general employer, a jury may"
draw the inference that an employee who is furthering the
interests of his immediate employer is acting within his
authority as agent of the latter. Delisa, if it be authority here
at all, is an authority that the holding in the present case was
one of fact for the jury.

We will analyze, briefly, the other principal authorities cited,
by defendant. In Braxton v. Mendelson (233 N. Y. 122, 124), the”
opinion says that where there is a written contract, thé question
is for the court not the jury. But that case must be readin the
light of its facts. What the court actually held was that when a
trucking company agreed to do the delivery work for a milk
company at a fixed price pex day for truck and driver, the driver
remained the servant of the trucking compariy even tho igh he
was delivering the milk company’s milk and taking orders from”
the milk company’s officers. :

Pe 141
ee

Other cases are pointed to by defendant as holding that where
there is an unambiguous contract allocating or dividing work
between ‘a general ‘and special employer the court must deter-
mine which category includes the work which the servant is
doing at the time. Here, the written contract assigns the unload-
ing to Bethlehem and the transportation to defendant, but the
ambiguity or overlap is as to whether the particular thing that
the driver was doing, that is, unloosening the truck chains, was,
reasonably and realistically, to be considered transportation or
unloading. Lewis v. New York, Ontario é Western Ry. Co. (210
N. Y. 429) is, we think, not at all in point here because it deals
with a situation where a consignor loaded his goods onto a rail-
road car. The court held as matter of law that the railroad
company had nothing to do with the manner in which the loading
was “done. The fact, in Lewis (supra), was that the railroad
company simply had nothing whatever to do with any part of
the ‘loading or unloading but merely furnished the car and
pulled it on its rails.

In McNamara v. Leipeig (297 N. Y. 291), defendant rented a
passenger automobile and chauffeur from a garage company for
three months for a fixed sum with the garage company paying
all expenses; the court held that the defendant had no control
over the driver except merely to tell him between what places to
drive the car, and that the defendant, therefore, was not liable
for the driver’s negligence. Again, as applied to our case, the
result deduced from McNamara (supra) would be that defend-
ant alone and not Bethlehem would be liable, if we held it
was a question of law rather than of fact. Anderson v. Boyer
(156. N. ¥. 93) deals with a charter of a ship. Its master
and crew had been turned over absolutely to the charterer
or lessee and the court held that there was a complete sur-
render of control and possession to the lessee or charterer
since the owner of the lighter had nothing whatever to do
with it or its operation after the charter was made. Irwin
v. Klein (271 N. Y. 477), besides restating the rule of pre-
sumption of continuance of control in the general employer,
points out that the decisions in this field'can be reconciled only
by the analysis of the specific facts in each case, although the
tule itself is simple enough, that is, that the servant of one

142 ee
es
master becomes for the time being the servant of another when
he passes completely out of the direction and control of the
former into that of the latter. Irwin v. Klein (supra), citing
other authorities, says the question is as to who has the supreme
choice, control and direction of the servant, and whose will the
servant represents, not merely in the ultimate result of his
work but in all its details. To make Bethlehem in our case the
pro tem employer of the driver would require a finding that when
the driver was unloosening his own truck’s chains he was
operating under the supreme control and direction of Bethlehem
in all the details of what he was doing. We question whether
this record would justify such a finding of fact, much less require
such a conclusion of law.

Appellant’s counsel makes much of what appellant claims are
concessions and admissions by plaintiff that the loosening of the
truck chains was an unloading act, citing statements, at the trial,
of plaintiff’s attorney, and various parts of plaintiff’s bill of
particulars, at all of which points the plaintiff’s counsel said in
words or effect that the accident happened during the ‘‘ unload-
ing’? of the steel. Similarly, appellant cites testimony of
plaintiff’s witnesses that this accident happened while the steel
was being “‘ unloaded ’’. To all of this, plaintiff answers that
these are the statements of counsel and witnesses and are not
conclusive, but merely somewhat loose verbiage which cannot
fairly be considered as binding or conclusive on plaintiff. We
think that is so. We have the exact and undisputed facts as to
what happened and, while the remarks of counsel and witnesses
are illuminating, they cannot preclude the courts from ruling
that there is a question of fact not as to whether unloading was
going on at the time, or as to whether the truck driver’s activities
expedited unloading, but as to whether the truck driver thus was
transferred from one employment to another.

The latest decision in our court on this general subject is
Dicenzo v. New York Shovel & Crane Corp. (308 N. ¥. 871),
decided in March, 1955, a case where decedent was crushed to
death between a revolving cranehouse on a crane and the back
of the erane’s truck cab. The crane was being operated by a
man named Salvante who was being paid by the general con-
tractor, but Salvante himself was one of four owners of the

| 143
esses

corporation which owned the crane and he divided with his
co-owners anything he earned from the contractor over $100 a
week, The proof showed that the defendant corporation as
such did nothing beyond turning the crane over to the general
contractor, even though the operator was one of the stock-
holders and officers of defendant corporation. The Trial Term
gave plaintiff a verdict against the owner of the crane, but the
Appellate Division reversed, on the law, on the ground that
the crane driver was plainly an employee of the contractor
and not of the crane owner, and on the further ground that
there was no negligence on the crane operator’s part. We
affirmed without opinion. The Dicenzo case (supra) cannot
help defendant-appellant in the present case, since there is no
real contention in our case that defendant ‘‘ turned over”? to
Bethlehem either the trailer-truck or its driver or the chains.

The order appealed from should be affirmed, with costs, and
judgment absolute directed against the appellant on the
stipulation herein.

Vay Vooruis, J. (dissenting). The facts are thus stated
succinctly at the beginning of the Per Curiam opinion of the
Appellate Division:

“On October 12, 1953, plaintiff was injured when certain
fabricated steel fell upon him and caused the loss of a leg among
other injuries. Plaintiff was an employee of Bethlehem Steel
Company, which was erecting a bridge in Long Island City.
Bethlehem had a contract with defendant, a trucking company,
under which the latter was to pick up fabricated steel at docks
and railroad yards, and transport the same to the job site. The
contract provided that unloading of the steel from the trucks at
the job location was to be performed by Bethlehem.

“‘On the day in question, two exceptionally large pieces of
structural steel were loaded on a truck of defendant driven by
one Henn. It was impossible to use the ordinary side stakes or
stays. In order to secure the load, two encircling chains,
property of defendant, were wrapped around the load and
trailer platform at each end.

«« When the vehicle arrived at the job, plaintiff and a coworker
climbed on the load to fasten cables known as ‘chokers’ in

144 Ce
el
preparation for lifting the steel from the truck by means of a
hoisting crane. Henn, in accordance with what witnesses said
was the customary activity of a driver in such situations,, re-
moved the front encircling chain, and then attempted to remove
the rear one. He did so, however, before the chokers were made
taut. Thereupon, the large pieces of steel slid off the trailer, and
plaintiff rolled underneath them and was injured. ;

‘The complaint was dismissed upon the ground that,.as the
contract between defendant and Bethlehem required the latter
to unload the steel, the act of Henn in removing the chains was
part of the unloading process and thus the work of Bethlehem,
so that defendant was no longer liable for negligent acts of
Henn.”’

Under the authorities and upon the evidence in this case, it
seems to me that dismissal of the complaint upon the law was
correct. The contract between Bethlehem and defendant
(described therein as ‘¢ The Carrier 2), in evidence as plaintiff's %
Exhibit 1, provides that ‘‘ Bethlehem will unload carrier’s trucks
at the site ’’. It is not disputed that the latter clause applies to
this operation. The reason for this clause was to enable the
carrier to load the truck, and then transport it to the destination
without bringing the unloading crew to that point where Bethle-
hem already had its crew and the necessary unloading machinery.
The only employee whom the carrier needed to have accompany
the load was the driver of the truck.

These steel beams had been securely enclosed by encireling
chains by the carrier’s loading crew, when they. were placed
upon the truck. The driver’s function on behalf of the carrier
was to move the truck. It was apparent that he could not under-
take to unload the truck alone, or commence to unload. it, and
therefore the responsibility for unloading was placed. by ‘the
contract in unambiguous words upon Bethlehem.

- The evidence is undisputed that Bethlehem’s unloading crew
had taken over by commencing the operation of unloading before
this accident occurred. There is-no contradiction of the testi-
mony to this by Wilfred Turner, foreman of Bethlehem’s unload-
ing gang of five men whose function and duty it was to unload
this truck with the help of a crane. It was imposible for the
driver of the truck himself to unload these steel beams, and

a 145
ee

he could not undertake to loosen them and hold them upon the
truck with his hands before Bethlehem’s unloading crew had
made them secure. Bethlehem had to drive up its crane, and
fasten it. to these beams and take other precautions,.so that they
could be removed in safety and with efficiency before it was safe
to release, the, chains. The circumstance that the chains were
loosened by ‘the driver of the truck is irrelevant. In the nature
of things, there could not be two bosses of this unloading job.
Under the contract, when the driver brought the truck to its
destination the carrier’s.function ended. Necessarily Bethlehem
with its machinery and unloading gang had to assume responsi-
bility at that point. If each tried to superintend this delicate
and dangerous operation, the result would be chaotic. There-
fore, when the driver undertook to loosen the chains, which he
could only do subject to orders from Bethlehem, under clear
principles of general and special employment, he became the
special employee of Bethlehem. It makes no difference that
express instructions were not given. It was all part of a routine
operation. The point is that appellant’s driver was at all times
subject, to direction and control by Bethlehem concerning the
details of the unloading operation, which was Bethlehem’s sole
responsibility. It could not have been otherwise, if Bethlehem
had already commenced the unloading operation, which it had
done. In any other view there would have been a division of
authority, at variance with the terms of the contract and which
the, nature of the operation forbade. All of these men had to
work together under single supervision, or the work could not
be performed. Bethlehem’s foreman indicated to the chauffeur
where to put the truck. He testified: <Q. We now have that
truck. stopped. A. Right. Q. From the time that truck is
stopped until the steel is taken off that truck, whether you watch
every particular job or not, when you are around, you are in
complete charge of that unloading,.aren’t you? A. Tam.”

‘Again Turner testified, at all times as a witness for plaintiff:
*¢ You could stop that truck driver, couldn’t you, from removing
that chain at any time you wanted to? Couldn’t you? A. Yes,
Lcould. I could tell him not to take it off. Q. You have that
right, haven’t you? A. Yes, I would have.’

146 Le
ep

Plaintiff testified that there was an established sequence of
acts in the usual unloading operation, to wit: ‘‘Q. And the
usual method was that after you got onto this load with two
chains holding it, that the hooking on process would take place
with the chains still holding it, is that right, that is, the
truck chains, right? A. Yes, sir. Q. That after the hooking on
process had taken place, there would then be made a connection
between the crane slings to the iron pieces, right, on the truck?
A. Yes, sir. Q. Then the next thing, it would be made sure that
the crane and its sling were holding the load, right? A. Yes,
sir’?

‘© Q. The two chains then holding. the load would then be
removed after the crane held the load, is that right? A. Yes,
sir.’?

This accident resulted from loosening the chains during the
unloading operation before the crane was attached.

A coworker of plaintiff testified that ‘‘ There is one safe way
you can do it: leave the safety line on there. Hook it, and then
when you have got it with the crane, take your safety off, what-
ever it happens to be, chain, line, or whatever it is, leave it
alone. Like this, they never should have been taken off.”’

There is no doubt that the chauffeur took the chains off too
soon. Neither is there any dispute in the evidence that Beth-
lehem’s unloading gang had already taken over and commenced
the unloading operation. The foreman testified that the steel
beams which did this injury rolled off during the unloading
operation.

Thereafter the following occurred: ‘‘ The Court: Mr. Turner,
you as the foreman were responsible for efficiency, to see that the
job was done right for the boss? The Witness: Yes. The Court:
And for safety, too? The Witness: That is right.”

Plaintiff himself had confirmed that the unloading operation
had commenced by testifying that he and his coemployee Baker
had already been on the truck before these steel beams fell off.
Referring to a time before the accident, the court inquired:
“‘ Did any of your team go on the truck to do unloading, or did
others do unloading and did you pick up the steel as it was
unloaded? The Witness: Mr. Baker and myself.’’

P| 147
bp

It is undisputed that the unloading operation had begun,
that it went wrong due to the act of the driver who was in the
carrier’s general employ but subject to Bethlehem’s orders while
engaged in a single integrated operation, and that the decision
of the appeal turns upon whether the driver was acting in the
special employment of Bethlehem. The familiar rule is stated
in Charles v. Barrett (233 N. Y. 127) ; Irwin v. Klein (271 N. Y.
477), and Braxton v. Mendelson (283 N. Y. 122). It is unimpor-
tant whether the question may usually be one of fact or of law.
The undisputed evidence requires here that it should be decided
as a question of law. There is no doubt that this driver was
negligent in the part which he took in the unloading operation,
that the injury to plaintiff (Bethlehem’s employee) resulted
from that act of negligence, but neither is there any dispute in
the evidence that the driver was wholly subject to the direction
of Bethlehem’s foreman, or that Bethlehem’s unloading gang had
already entered upon the operation of unloading for which Beth-
lehem had assumed responsibility pursuant to the unambiguous
requirement of the written contract. It is true that where an
employee is acting in furtherance of the business of his general
employer, there is no inference of a new relation of employment
‘« unless command has been surrendered, and no inference of its
surrender from the mere fact of its division’? (Charles v.
Barrett, supra, p. 129), but where command has been sur-
rendered, as it without contradiction was and had to be in this
instance, the general employer is no longer liable notwithstand-
ing that the employee, in a general way, is still furthering its
business. The judgment of the Appellate Division should be
reversed, with costs, and that of the Trial Term should be
reinstated, dismissing the complaint.

Conway, Ch. J., Dys, Funp, Froussen and Burxs, JJ., concur
with Drsmonp, J.; Van Vooruis, J., dissents in an opinion.

Order affirmed, etc.

Mrton Jussetsoy, Individually and as Executor of Tussm
-JusseLson, ‘Deceased, et al., Respondents, v: Gronra “Moopy,

Argued June 8, 1955; decided’ July 8, 1955,

_ Appellant.

Wilbur M. Jones and John W. Trapp for appellant. I. The
New Jersey common law is applicable. (Doran v. Thomsen,
76N. J. L. 754; Dooley v. Saunders U-Drive Co., 109 N. J. L.
295.) II. Presumption of agency is rebutted by defendant’

De 149
se

uncontradicted testimony and corroborated by plaintiff Dutton’s
statement that, at the time of the accident, defendant’s vehicle
was being used in furtherance of Dutton’s business. Thus, on
plaintiff’s own testimony, the driver of defendant’s vehicle
was Dutton’s agent or servant at the time of the accident.
III. Defendant’s motion to dismiss at the end of plaintiff’s
case should have been granted for the reason that, under the
doctrine of respondeat: superior, plaintiffs had failed to make
out a prima facie case. (Doran v. Thomsen, 76 N. J. L. 754;
Wirth v. Gabry, 120 N. J. L. 432, 122 N. J. L. 95; Marsh v.
Sasanoff, 9 N. J. Mis. Rep. 545; Miranda v. Lo Curto, 249 N. Y.
191.) IV. Alexander Versakos was ‘‘ operating’’ or using
defendant’s car at the time of the accident as a bailee or inde-
pendent contractor. (Haton'v. Schild, 8 N. J. Mis. Rep. 245;
Gochee v. Wagner, 257 N. Y. 344; Maurer v. Brown, 106 N. J. L.
284; Dooley v. Saunders U-Drive Co., 109 N. J. L. 295; Gavin v.
Cohen, 5 N. J. Mis. Rep. 296; Paul v. Flannery, 128 N. J. L. 488;
Kirrer v. Bromberg, 113 N. J. L. 98.) V. The Dutton action
should have been dismissed on the additional ground that Dutton,
having failed to introduce proof qualifying himself for the legal
status of an invitee in defendant’s vehicle, was relegated to the
status of a licensee and, in such latter status, defendant owed
Dutton only the duty to refrain from willful injury, the record
being bare of any such evidence. (Cowan v. Kaminow, 128
N. J. L. 398; Doran v. Thomsen, 76 N. J. L. 754; Lutvin v.
Dopkus, 94 N. J. L. 64; Faggioni v. Weiss, 99 N. J. L. 157.)
VI. ‘The recovery of Milton Jesselson, as executor of Tessie
Jesselson, deceased, is excessive. (Capone v. Norton, 21.N. J.
Super. 6; Consolidated Traction Co. v. Home, 60 N. J. L. 444;
O’Brien v. New Jersey State Highway Dept., 11 N. J. Super.
548.)

Arnold B. Elkind, Harry Ostrov and Herbert Zelenko for
Milton Jesselson, respondent. J. The question of agency was
properly submitted to the jury because of: The New Jersey
presumption of agency ; the admissions of appellant; appellant’s
inconsistent and self-contradictory testimony, and the fact that
appéllant was the sole witness on the question of agency and
the: only other witness who could have contradicted her was
dead. (Mahan v. Walker, 97 N. J. L. 304; Efstathopoulos v.

150 Le
nn

Federal Tea Co., 119 N. J. L. 408; Conway v. Pickering, 111
N. J. L. 15; Crowell v. Padolsky, 98 N. J. L. 552; Tischler v.
Steinholiz, 99 N. J. L. 149; Spelde v. Galtiert, 102 N. J. L. 2038;
Schultz v. Hine, 20 N. J. Super. 346; Doran v. Thomsen, 76
N. J. L. 754.) IL. The law of New Jersey must be resorted to
to interpret the transaction between Versakos and appellant.
(Miranda v. Lo Curto, 249 N. Y. 191; Winkelstein v. Solitaire,
129 N. J. L. 38.) III. The damages awarded Milton Jesselson,
as executor of Tessie Jesselson, deceased, were not excessive.

Arnold B, Elkind and Herbert Zelenko for Robert M. Dutton,
respondent. I. The question of agency was properly submitted
to the jury. (Mahan v. Walker, 97 N. J. L. 304; Efstathopoulos
v. Federal Tea Co., 119 N. J. L. 408; Conway v. Pickering, 111
N. J. L. 15; Crowell v. Padolsky, 98 N. J. L. 552; Tischler v.
Steinholte, 99 N. J. L. 149; Schulte v. Hinz, 20 N. J. Super. 346;
Doran v. Thomsen, 76 N. J. L. 754; Dooley v. Saunders U-Drive
Co., 109 N. J. L. 295; Maurer v. Brown, 106 N. J. L. 284.) Il The
law of New Jersey must be resorted to to interpret the trans-
action between Versakos and appellant. (Miranda v. Lo Curto,
249 N. Y. 191; Winkelstein v. Solitaire, 129 N. J. L. 38.)
III. There was evidence from which the jury could have found
that respondent Dutton was an invitee of appellant. IV. The
appeal as against respondent Dutton may be dismissed since it
is not properly before the court as a matter of right.

Burks, J. The judgment in favor of plaintiff Jesselson,
individually and as executor of the estate of his deceased wife,
should be affirmed. However, defendant’s contention that. the
plaintiff Dutton failed to establish that he was an invitee of the
defendant is well taken and requires a reversal as to Dutton.
New Jersey is one of the few remaining jurisdictions which
adhere to the common-law distinction between invitees and
licensees in automobile passenger cases. As in several other
jurisdictions in which the liability of an automobile owner is
determined by nonstatutory rules, varying standards of care
are imposed in determining actionable negligence. Thus, as to
an invitee, the owner is bound to use reasonable and ordinary
care for the safety of the guest. However, as to a licensee, the
only legal obligation imposed is that of refraining from the
perpetration of acts wantonly or willfully injurious. (Luivin vy.

Pe 151

Dopkus, 94 N. J. L. 64; Faggioni v. Weiss, 99 N. J. L. 157;
Paiewonsky v. Joffe, 101 N. J. L. 521; Struble v. Bell, 126
N. J. L. 168; Zarasewice v. Bowker, 5 N. J. Super. 399.) The
evidence in the case at bar falls far short of proof that the acts
of the driver were ‘‘ wantonly and willfully injurious.’? It
therefore became incumbent upon Dutton, if he would recover,
to show affirmatively that he was an invitee of the owner.

At this point, it is necessary to observe that the presumption
of agency relied upon to establish defendant’s liability on the
theory of respondeat superior does not in any way affect the
status of a passenger as invitee or licensee. As stated in Cowan
v. Kaminow (128 N. J. L. 398, 403): ‘‘ However, this rule
[presumption of agency] cannot, and should not, be extended
to create a presumption that a passenger in a car, driven by one
other than the owner, is an invitee of the owner. The status of
a passenger as an invitee of the owner is a fact which must be
proven, and failure of such proof has been recognized by our
Supreme Court as sufficient to free the owner from liability as
a matter of law.’’ There is a complete absence from the record
below of any proof on the part of Dutton that he was anything
other than an invitee of Versakos, the driver. However, proof
that one is an invitee of the driver is not sufficient; he must
further prove that he was an invitee of the owner. The appli-
cable rule is set forth in Yanowitz v. Pinkham (111 N. J. L. 448,
450):

“But one who is riding as a guest in an automobile, though
the car is being driven by the owner’s agent duly authorized
thereto, may be the guest of the agent, and not of the owner.

‘Tf the driver of an automobile, though acting duly for his
absent master in the operation of the car, was not acting for
him or in the execution or furtherance of his master’s business
in accepting and transporting the guest, the master and owner
cannot be held liable by the guest for want of reasonable care
of the driver.’’

It is apparent in the case at bar that Versakos was not acting
in furtherance of his master’s business in accepting and trans-
porting the guest. Defendant denies, and there is no proof to
the contrary, that she had any knowledge that Versakos. had
invited Dutton as his guest. Dutton himself testified that he
had met Versakos for the first time through a mutual friend on

I ee |
De!

the evening before the accident, and that Versakos had invited
Dutton to accompany him to New York City after the latter had
mentioned that he intended to drive to La Guardia Airport for
a business trip to Syracuse. Dutton’s own testimony unques-
tionably establishes that Versakos’ invitation was purely an
accommodation to Dutton and solely in furtherance of Dutton’s
own business interests. It was therefore error to deny defend-
ant’s motion to dismiss the complaint, and to submit the case
to the jury on that evidence (Cowan v. K aminow, supra).

The judgment should be modified by reversing so much thereof
as affirmed the judgment in favor of Dutton, and the judgment,
as so modified, should be affirmed, with costs to appellant, against
respondent Dutton and to respondent . J esselson. ui
appellant.

Conway, Ch. J., Dusvionp, Dyz, Furp and Van Voonms,. JJ.,
concur with Borxs, J.; Fronsss, J., dissents and votes to affirm,

Judgment accordingly.
Dh

In the Matter of Ones County Fornst PRESERVE Couwern ‘et al.,
Respondents, against Lovrs Wrnuz, as New York State Con:
servation Commissioner, et al., Appellants.

Argued June 8, 1955; decided July 8, 1955.

Jacob K. Javits, Attorney-General (James O. Moore and
Henry 8. Manley of counsel), for appellants. I. The council
isa corporation. It is nota citizen and hence it is not authorized
to maintain this special form of suit. (Fire Dept. of City of
N.Y. v. Stanton, 28 App. Div. 334, 159 N. Y. 225; Anglo-Amer.
Provision Co. v. Davis Provision Co., 169 N. Y. 506; Ivory v.
Edwards, 278 App. Div. 359, 304 N. Y. 949; Matter of Civil
Service War Veterans Protective Assn. v. Finegan, 249 App.
Div. 822; Matter of J. D. L. Corp. v. Bruckman, 171 Mise. 3;
Matter of Personal Finance Co. v. Lyon, 203 Mise. 710.)
II. There is no application by Ralph Atwater individually.
III. The application should have been made in the third depart-
ment. (Bunyan v. Commissioners of Palisade Interstate Park,
167 App. Div. 457; Stoddard v. Manzella, 207 App. Div. 519;
Pyrkev, Standard Acc. Ins. Co., 234 App. Div. 133; Dairy Sealed,
Inc., v, Ten Eyck, 248 App. Div. 352; Bull v. Stichman, 189 Misc.
590, 273 App. Div. 311,298 N. Y. 516.) IV. The application
should have been denied because of laches, V. The statute is
constitutional,

5 ee
ee

Michael P. De Santis for respondents. I. The council is a
citizen as defined in section 4 of article XIV of the Constitution.
(Association for Protection of Adirondacks v. MacDonald, 253
N. Y. 234.) II. There is an application by Ralph Atwater indi-
vidually. III. The Supreme-Court in any Appellate Division
may give consent to institute suit. IV. There can be no laches
where the constitutionality of a law is involved. V. The statute
is unconstitutional.

Burxe, J. The Conservation Commissioner and the Director
of Lands and Forests appeal to this court from an order of the
Appellate Division, Fourth Department, granting its consent to
the respondents, Oneida County Forest Preserve Council and
Ralph Atwater, its president, to institute suit against the appel-
lants to restrain the violation by them of section 1 of article XIV
of the New York State Constitution.

Among other grounds which do not here merit extended treat-
ment, the appellants contend that the council, being a member-
ship corporation, is not a ‘‘ citizen’? within the meaning of
section 4 of article XIV, which provides that: ‘‘ A violation of
any of the provisions of this article may be restrained at the
suit of the people or, with the consent of the supreme court in
appellate division, on notice to the attorney-general at the suit
of any citizen.’ (Emphasis supplied.) In support of this con-
tention, appellants refer us to two cases (Fire Dept. of City of
N. ¥. v. Stanton, 28 App. Div. 334, and Anglo-American Provi-
sion Co. v. Davis Provision Co., 169 N. Y. 506) which, we are
told, hold that a corporation is not a ‘‘ citizen ’? as that word is
used in the Constitution. Those cases, however, are not decisive
of the point in issue, for they concern business corporations
rather than membership corporations, and, further, because they
involved a construction of the ‘‘ privileges and immunities ’’
clauses (art. IV, § 2; 14th Amendt., § 1) of the United States
Constitution. ‘Without delving into the complex sphere of
Federal-State and interstate relations, it is obvious that the
reason for such a construction when dealing with the relation-
ship between a corporation of one State and the sovereign
of another is neither decisive nor applicable to this situation
in which the relationship is merely one between a domestic
corporation and its sovereign. Moreover, even in the Fed-

ee 155
ee

eral courts, a corporation is deemed to be a citizen within the
meaning of the ‘‘ diversity of citizenship’? clause (art. III,
§ 2) of the Federal Constitution. (Salem Co. v. Manufactur-
ers’ Co., 264 U. 8. 182.) It is clear, therefore, that there is
no absolute and inflexible rule that a corporation, especially
a membership corporation, may not be deemed a citizen for
various purposes. (See Green, Corporations as Persons, Citi-
zens and Possessors of Liberty, 94 U. of Pa. L. Rev. 202
{1945].) It may be that for other purposes, a corporation
is not a citizen as that word is used in the Constitution or the
statutes, but for the purpose of bringing a suit to enjoin a
violation of section 1 of article XIV we hold that a corporation
such as the respondent herein is a citizen.

The appellants further contend that a corporation has no
justiciable interest that makes it an appropriate champion of
constitutional principles. An analysis of the cases cited in sup-
port of this contention reveals that in none of them was a
constitutional issue involved. The cases merely held that the
particular corporations therein involved had no justiciable
interest in the controversy, and the result would no doubt have
been the same had the petitioner or plaintiff been an individual
rather than.a corporation. That the issue is whether or not
the plaintiff has a justiciable interest in the controversy rather
than whether or not it is a corporation is apparent from the
many cases which have upheld the right of a membership cor-
poration to sue for the benefit of its members or for the people
of the State generally. (See, e.g., Associated Painting Employ-
ers of Brooklyn v. Kessler, 257 App. Div. 986; United Cloak &
Suit Designers Mut. Aid Assn. v. Sigman, 218 App. Div. 367;
Matter of New York State Licensed Bail Agent’s Assn. v.
Murtagh, 279 App. Div. 851, motion for leave to appeal denied
303 N. Y. 1009; Association for Protection of Adirondacks v.
MacDonald, 253 N. Y. 234.)

In Matter of United Press Assns. v. Valente (308 N. Y. 71) the
plaintiff, a corporation, sued to enforce what it believed to be
the right of its members under section 4 of the Judiciary Law
to attend court sessions. We there held that the Judiciary Law
conferred a right personal to the defendant and not to the mem-
pers of the public generally. However, while section 4 of the
Judiciary Law provides that ‘‘ every citizen ”’ may freely attend

6 ee

the sittings of every court,

none of the opinions. questioned

the right of the corporation qua corporation, to assert ‘rights

guaranteed to ‘‘ citizens ’’.

In Association for Protection of Adirondacks v. MacDonald
(supra), the association was a-membership corporation which
obtained consent to institute suit under article’ VII (§ 7) of
the Constitution as then constituted, which provision, contained

language virtually identical

to that of the provision presently

under consideration (227 App. Div. 640). After obtaining
such consent, the association and the Conservation Commis-
sioner submitted the controversy to the Appellate Division
“under an agreed statement of facts. Judgment was, ren-
dered in favor of the plaintiffs, the association and John
Agar, its president, declaring chapter 417 of. the Lays of
1929 unconstitutional. It apparently never oceurred’ ‘to’ either

party to question the corpo

rate plaintiff’s right to bring, the

. action, and our decision in no way intimates that the, ‘association

was not a citizen within the

contemplation of that provision of

the Constitution, nor that it was not a fit, party to champion
constitutional rights. Since the issue was not there raised,

, that case, of course, is not

determinative of the case at bar.

However, in the absence of compelling reasons why we should

not adhere to the practice foll
that.we should now hold tha

owed in that case, we do not believe
procedure to have been erroneous.

In view of these cases, and in view of the more liberal trend

exhibited elsewhere permitti

ng associations or corporations to

champion constitutional rights (see, e.g., Pierce v. Society of
- Sisters, 268 U. S. 510; Anti-Fascist Comm. v. ‘McGrath, 341

U.S. 128), we are not. of the opinion that the word oe
_as it is used in section 4 of article XIV should be ‘Ii

meaning to natural persons.
Nevertheless, the Constitu’

ion limits the type of action which

a citizen may bring to a suit to restrain violations of the article.

The order of the. Appellate
relief upon these applicants

tution. The latter does not authorize the Appellate D:

to consent that the applicant

remedy or remedies in the premises ” as it may be advised:

Division, however, confers greater
than is authorized by the i

may ‘‘ invoke such other *

view of the broad relief sought in the moving papers, the order
should recite that the motion is granted only insofar as it seeks

consent to institute suit to restrain a violation of section 1 of

article XIV of the Constitution.
The order of the Appellate Division should be modified in

accordance with this opinion, and, as so modified, affirmed.
Conway, Ch. J., Desmonn, Dyz, Funp, Frozssen and Van
Vooruis, JJ., concur.

Ordered accordingly.

Esyest Aron, Appellant, v. Fuormnce Gruman et al:, as Admin-
istratrices D. B. N. of the Hstate-of Dora Osrrorr, Deceased,

Respondents.
Argued April 11, 1955; decided July 8, 1955.

Orrin G. Judd, Frank Kretteberg and Irwin M. Rosenthal for
appellant. I. Disallowance of Federal and State taxes in com-
puting book value was inequitable, contrary to the terms of the
contract, and without warrant inlaw. (Atwater é Co. v. Panama
R. R. Co., 246 N. Y. 519; Benvenuto v. Rodriguez, 279 App. Div.
162; Sanitary Farm Dairies v. Gammel, 195 F. 2a 106; Fawcus
Mach. Co. v. United States, 282 U. 8. 375; Citizens Hotel Co. v.
Commissioner of Internal Revenue, 127 F. 2d 229; Commissioner
of Internal Revenue v. Schock, Gusmer & Co., 137 F. 2d 750;
Allen v. Atlanta Stove Works, 188 F. 2d 452; United States v.
Anderson, 269 U. S. 422; Carondelet Bldg. Co. v. Fontenot, 111
F. 2d 267; Hagan v. Dundore, 187 Md. 430; Hollister v. Fiedler,
22. N. J. Super. 489; Elhard v. Rott, 36 N. D. 221; Gurley v.
Woodbury, 177 N. C. 70.) IL. Book value of inventory was the
only proper measure of value.

Le 159

Jacob Krisel, Charles L. Kramer and Melvin §. Slade for
respondents. JI. The parties fixed the basis of purchase as
book value. (Farmers Loan & Trust Co. v. Winthrop, 238 N. Y.
477; Raleigh Associates v. Henry, 302 N. Y. 467; Friedman v.
Handelman, 300 N. Y. 188; Matter of Marcus [Macy & Co.], 273
App. Div. 725, 303 N. Y. 711; Continental Co. v. United States,
259 U. S. 156.) II. Book value is assets less liabilities. (People
ex rel. Knickerbocker Fire Ins. Co. v. Coleman, 107 N. Y. 541;
Lane v. Barnard, 185 App. Div. 754; Heiner v. Mellon, 304
U. S. 271; Burnet v. Sanford & Brooks Co., 282 U. 8. 359;
Nichols v, Nichols, 306 N. Y. 490; Brainard v. New York Cen-
tral R. R. Co., 242 N. Y. 125; Matter of People [Lexington
Sur. & Ind. Co.], 272 N. Y. 210; Bush v. Remington Rand,
213 F. 2d 456; Brown v. Helvering, 291 U. 8. 193; Security
Mills Co. v. Commissioner, 321 U. 8. 281; Wayne Tit. & Trust
Co. v. Commissioner of Internal Revenue, 195 F. 2d 401;
United States v. Anderson, 269 U. S. 422.) IL. This court
ordinarily will not review questions of fact. (Sadowski v. Long
Is, R. RB. Co., 292 N. Y¥. 448.)

Frosssex, J. This appeal turns upon our construction of an
agreement between plaintiff and defendants’ intestate, Dora
Ostroff, which provides that upon the death of one, his or her
shares of stock in their jointly owned corporation shall be sold
to the survivor ‘‘ at the book value thereof. The parties further
agree that the book value of said stock shall be determined by the
most recent audit of the books of the Corporation provided such
audit has been made not more than sixty days before the death
of such individual. * * * The payment therefor is to be
made in eighteen (18) equal monthly installments ’’. (Emphasis
supplied.)

Dora Ostroff died on September 21, 1953. The last previous
audit had taken place between August 19th and 21st, less than
sixty days prior to her death. It reflected the corporation’s
financial position as of July 31, 1953. Claiming to be no longer
bound thereby because plaintiff had breached its terms, Samuel
Ostroff, Dora’s administrator, refused to perform the stock pur-
chase agreement. He did, however, offer to buy plaintiff’s stock
(one third of the total) for $100,000, or to sell to plaintiff his
intestate’s share (two thirds of the total) for $200,000. Plaintiff
thereupon brought this action in equity for specific performance

160 a
ee

against said administrator and, upon the latter’s death, the
action was continued against his successors, ‘the present
administratrices.

“Special Term granted specific performance to plaintiff, hold-
ing that deferdants’ claim that plaintiff had breached” ‘the
agreement ‘‘ was a mere pretense designed to escape the obliga-
tion of a solemn agreement ’’, that the purchase price (according
to the agreement) of the intestate’s stock was $186,222.30, to be
paid in eighteen equal monthly installments. Cross appeals were
‘taken to the Appellate Division, Second Department, defendants
complaining of the granting of specific performance and of
the provisions for installment payments, and plaintiff contending
that the stock’s value had been incorrectly determined. The
Appellate Division affirmed, one Justice’ dissenting only as to
plaintiff’s appeal, agreeing with the latter’s contention that the
Referee’s value of the stock had been incorrect. Only plaintiff
has appealed to this court.

As the case now comes before us, only two items — inventory
and taxes — are in dispute. How are they to be evaluated ‘under
the agreement which describes this method for determining the
value of the stock: ‘‘ book value * * * determined by the
most recent audit ’’? Before discussing them in particular,
however, it may be helpful to look more closely at the term
“hook value’? without further definition.

There appears to be no agreement among the decisions or
textbook: writers on a complete and authoritative definition of
the term ‘‘ book value ’’. At least two principles seem to emerge
from the better reasoned authorities: (1) the book entries must
be correct and complete, and not made to defeat an outstanding
claim, and (2) accepted accounting principles should not. be
entirely disregarded (see Steinbugler v. Atwater & Co., 289 N. Y.
816). Thus, where interest, which had accrued on notes held by
a bank had not been posted on the books and was not yet payable,
it was held that the interest should nevertheless be included as
an asset in determining book value of the bank’s stock (Elhard
v. Rott, 36 N. D. 221). And where the parties were aware that
several assets which were listed at substantial sums on the books
of a bank had no actual value, it was held that they should be

él
bury, 177 N, CO: 70).

liminated from the computation of book value (Gurley v, Waod-

| 161
sss

Although when the peculiar asset ‘‘ good will’? has been in
issue it has quite consistently been excluded from book value
unless actually recorded at some value on the books (see Lane v.
‘Barnard, 185 App. Div. 754; Mills v. Rich, 249 Mich. 489;
Succession of Jurisich, 224 La. 325; Early v. Moor, 249 Mass.
223), not all unrecorded intangible assets have been so excluded.
In Hollister v. Fiedler (22 N. J. Super. 439), where the book value
of stock of an insurance business had been calculated without
considering the value of the corporation’s expiration and re-
newal books and records, the court held that such information, of
conceded value in the insurance business, should be included in
determining the stock’s book value; otherwise, according to the
court, the result would be inaccurate, inequitable and unintended
by the parties to the stock purchase agreement. .

So, if abnormal depreciation has been taken on the books for
income tax purposes, the court in finding book value may go
outside the books and determine a different rate of depreciation
(Hagan v. Dundore, 187 Md. 430). In the last-mentioned case,
the court also held that the labor cost invested in outstanding
contracts of the corporation should be included in a computation
of book value, even though no ledger entries indicated either the
amount or value of that labor (see, also, Rubel v. Rubel, 75 So. 24
59, 67-68 [Miss.]). And in Succession of Warren (162 La. 649),
the court held that disputed claims by the government for taxes
on the income of previous years should be included as liabilities
in determining book value even though the claims might never
have to be-paid.

In the instant case, the parties have not contented themselves
with the mere use of the term ‘‘ book value ”’, but have them-
selves defined it, namely, that it should be determined according
to the most recent audit of the corporation’s books. Webster
(New International Dictionary, 2d ed., Unabridged, 1950) defines
“ audit ”’ as a‘ formal or official examination and verification of
accounts, vouchers and other records ’’, and as ‘‘ an account as
adjusted by auditors ’’. Thus the very purpose of an audit is
to verify and reconcile the book entries of a business according
to proper accounting practice, and to see that they are accurate.

We -now turn to the two specific problems presented in the
instant case. First, as to the inventory: Among the current
assets listed in the balance sheet of July 31, 1953, is ‘‘ Merchan-

L |

162 PC
ee
dise Inventory — Estimated ........ 12,001.15”. It will be
noted the amount is ‘‘ estimated’. At the trial the accountant
testified that this figure was submitted to him by Dora Ostroff,
president. of the corporation ; he did not know the correct figure
and did not audit this item. It was conceded by plaintiff, how-
ever, that, on July 31, 1953, the actual inventory value amounted
to $51,058, nearly $40,000 more. Nevertheless, plaintiff contends
that we should take the inventory figure at $12,001.15 simply
because it is the figure appearing on the books, and despite the
fact that it is concededly erroneous. We are not obliged to
follow blindly entries in books that are indisputably untrue. The
courts below were therefore correct in holding that the con-
cededly accurate $51,058 inventory figure should be used for
determining book value in place of the arbitrary and erroneous
guess of $12,001.15 which was supplied to the accountant by the
corporation’s president. ,

Second, as to taxes: The audit in question speaks as of July
81, 1953. At the foot of the balance sheet appears the following:
“NOTH: Subject to Federal and State Income Taxes & year-
end adjustments.’? The same notation appears at the bottom
of the statement of income, profit and loss. And on the schedule
of surplus account, net profit for January 1, 1953, to July 31,
1953, is listed at $81,951.20, but this figure is stated to be
‘« Bxclusive of Provision for Federal.Income & Excess Profits
Tax & New York State Franchise Tax ’’.

Plaintiff contends that before book value was determined by
the courts below, the indicated provision for State and Federal
income taxes should have been deducted. Defendants, on the
other hand, insist that no such allowance should be made for
income taxes because no figures therefor appear on the books,
and because the corporation was not actually liable for taxes on
1953 income until the end of the taxable year —Decémber 31,
1953. The difference, in practical result, is substantial. If the
taxes are disregarded, the book value of intestate’s stock would
be, as the trial court found, $186,222.30 (assuming that the true
inventory figure rather than the inaccurate estimate is used),
whereas, if both State and Federal income taxes are first
deducted, the book value thereof would, we are told, be approxi-
mately $132,000 —a difference of over $53,000,

P| 163

Tei is s well settled that i in n construing the provisions of a contract

we should give due consideration to the circumstances surround-
ing its execution, to the purpose of the parties in making the con-
tract, and, if possible, we should give to the agreement a fair
and reasonable interpretation (3 Corbin on Contracts, pp. 78-79,
88-91, 115; 3 Williston on Contracts, pp. 1780-1788). In the
instant case the parties attempted to arrange a method whereby
the survivor should buy out the other’s interest in the corpora-
tion. At the execution of the agreement, no one knew which party
would be the survivor, or at what time he would be obliged to pur-
chase. The price was to be book value as determined by the
most recent audit; but obviously in such a serious agreement
involving the transfer of many thousands of dollars of stock,
the parties must have intended by this provision to establish a
fairly stable and predictable valuation basis.
The position maintained by defendants, however, namely, a
complete ignoring of the income taxes until actually payable,
would mean an arbitrary, capricious and widely fluctuating pur-
chase price, depending on the time of the last audit. For example,
if that audit took place one day before the taxes became payable,
by defendants’ theory no income taxes at all should appear in
the computation of book value. But if the audit should take
place a few days later, book value would have suddenly dropped
by an amount equal to the income taxes for the entire year. Such
a result is manifestly unreasonable from both a practical and
theoretical point of view.

Clearly it makes no sense to charge the entire year’s burden
of income taxes to the income of the last month preceding ter-
mination of the taxable year. On the contrary, sound accounting
practice requires that each dollar of income as it is earned
throughout the year should bear its proportionate share of the
costs of the enterprise, including the tax burden (see Carondelet
Bldg. Co. v. Fontenot, 111 F. 2d 267 ; Citizens Hotel Co. v. Com-
missioner, 127 F. 2d 229; Commissioner v. Schock, Gusmer &
Co., 187 F. 2d 750; Allen v. Atlanta Stove Works, 138 F. 2d 452).
For this reason interim audits made during the taxable year
should include an estimate of the income taxes applicable to the
period in question. The mere fact that an item is not yet legally
due and payable does not mean that it may be ignored as a lia-
bility (United States v. Anderson, 269 U. S. 422, 440-441 ; Faweus

164 a
ee

Mach. Co, v. United States, 282 U. 8. 375), nor does it mean that
the item may not be included in a computation of book value
(Hagan v. Dundore, 187 Md. 430, supra; Elhard v. Rott, 36 N. D.
221, supra).

Moreover, judicially, we must recognize that income taxes are
continuing and reasonably predictable charges against corporate
income. Their influence pervades modern business. Rare indeed
is the corporation or businessman who is not.acutely aware of
their incidence and effect upon its or his operations. Under
such circumstances, to accept defendants’ argument that these
taxes must be ignored because they were not yet ‘ liabilities ’’
would be to subject our reason to what Mr. Justice Carpozo
termed “‘ the tyranny of labels ’? (Snyder v. Massachusetts, 291
U.S. 97,114). Ifa corporation, such as here, has earned a given
net income over the first seven months of its tax year, it is only
reasonable that the tax which will be payable on that income
should be included in a determination of its financial position in
terms of book value. The success or failure of the business
thereafter is a risk the purchaser assumes.

In sum, then, the corrected inventory figure, conceded by
plaintiff to be accurate, was properly allowed by the courts
below. As for the estimated income taxes, they should have
been deducted before reaching the final book value figure. The
agreement called for book value as determined by audit; the
audit, in turn, was expressly made subject to Federal and State
income taxes, and prior to the contemplation of any contro-
versy. No question is raised as to the integrity of the accountant
who made the audit—indeed, he was selected by defendants’
intestate herself. Good accounting practice required an estima-
tion of those taxes for the seven-month period, and, although
the actual computations did not appear on the corporate books,
those computations should have been made by the trial court and
deducted from the corporate earnings prior to determining book
value. :

Any other result would be unreasonable. It would require
plaintiff to pay to defendants over $53,000 extra for the stock,
notwithstanding that at the end ef the year he would be obli-
gated either to pay out that same amount again in taxes on
income attributable to the first seven months of the year, or to
account for loss of that income in some other way. In other

a 165
Ls

words, he would have to pay out an extra $53,000 in order to
receive an income tax liability of equal amount. And, to make
matters worse, the seriousness of this anomaly would vary
tremendously depending upon when the applicable audit had
taken place.

Accordingly, the judgment appealed from should be modified
so as to take into account the estimated State and Federal income
taxes in the computation of book value. In all other respects the
judgment should be affirmed, with costs. Since no finding was
made below as to what the book value of the stock would be when
the inventory is valued at $51,058 and when the estimated taxes
applicable to the January 1-July 31 income are included, the case
should be remitted to the Supreme Court for computation of that
figure.

The judgment of the Appellate Division should be modified
in accordance with this opinion and, as so modified, affirmed,
with costs.

Desmonp, J. (dissenting). Plaintiff and defendants’ intestate,
each represented by counsel, and being the owners of all the
outstanding stock of a corporation, agreed by a formal written
contract: (1) that if either should wish to sell his or her stock
‘while both were alive, the price should be the ‘‘ actual valwe ’’ as
determined by arbitration; but (2) that when either should die,
the stockholdings of the deceased should be sold to, and pur-
chased by, the other stockholder at the ‘‘ book value of said
stock ’’ to “« be determined by the most recent audit of the books
of the Corporation provided such audit has been made not more
than siaty days before the death of such ”’ stockholder. (Italics
supplied.) Stockholder Ostroff, defendants’ intestate, died on
September 21, 1953, about a month after ‘‘ the most recent
audit ’? and less than sixty days after the date as of which the
audit spoke. In this lawsuit the disputes are: first, as to whether
the ‘‘ book value ’’ to be paid to defendants (Miss Ostroff’s
administrators) should be reduced by the estimated amount of
ithe corporation’s accrued Federal and State income taxes; and,
second, whether ‘‘ book value ’’ should include, for inventory, the
amount of $12,001.15 shown on the audit, or the amount of

51,058, shown not on the books but by a physical-count inventory
ade after Miss Ostroff’s death.

166 |

In every New York case we have found, the bare phrase ‘‘ boo
value ’’ has been taken and defined to mean what it is popularly
supposed to mean, that is, the assets shown on the books less th:
liabilities shown on the books (People ex rel. Knickerbocker Fir
Ins. Co. v. Coleman, 107 N. Y. 541, 543; Steinbugler v. Atwate
& Co., 289 N. Y. 816; Cabble v. Cabble, 111 App. Div. 426, 430
Lane v. Barnard, 185 App. Div. 754, 758). Book value “i
reached by estimating all the assets as they appear upon thi
corporate books, and deducting all the liabilities and other mat,
ters required to be deducted by law ’’ (Coleman opinion, supra!
pp. 543-544). As tersely put in White on New York Corporal
tions (Vol. 7, § 7.26): ‘‘ Book value means the value of th
stock as shown on the books of the corporation. * * * Bool
value is determined by deducting liabilities from assets.’’ Wit]
that settled, we turn to the two items here in dispute: that if
taxes and inventory.

The latest audit contained no liability figure for income taxe;
which could not, of course, be computed accurately until a

year ended. However, the report of audit contained a note tha
the figures were ‘‘ Subject to Federal and State Income Taxes

year-end adjustments ’’. While, by such an audit, those taxe
were not, in the fullest sense, ‘‘ determined ’’, nevertheless, th
note, apparently made as a routine accounting practice, showe
that the auditor (and the corporation) considered that its ne|
worth was lessened by accrued income taxes. Of course, th
final amount of those taxes, dependent on future mouths’ earr
ings and losses, could not be fixed until the end of the yeay]
However, they could be estimated. We, therefore, consider i
reasonable to say that the ‘‘ book value ’’ of this corporatio:

according to the ‘‘ most recent audit ’’, necessarily involved

deduction for the estimated amount of taxes to become due o:
business already done.

As to inventory, the audit stated the value thereof as ‘‘ His
mated .........5 $12,001.15 ”’, a figure submitted to the account
ant at the time of the audit, by Miss Ostroff, the president, whos}
estate is now insisting that the larger figure of $51,058 be use
because a post-death inventory produced that latter figure. W|
think that, in the absence of fraud or mathematical error, thj
book figure was the one to use. These parties, taking thei
chances as to which should die first, chose to make book valu

s shown on the latest audit, the measure of price. It is entirely
eside the point that the use of such figures turned out to be
‘unfair ’’ to one or the other. As our courts long ago noted,
sale at book value is always ‘‘ unfair ’’ in the sense that book
alue, as to a going concern, is always more or less than, never
qual to, actual or market value (People ea rel. Knickerbocker
“ire Ins. Co. v. Coleman, 107 N. Y. 541, 544, supra; Cabble v.
‘abble, 111 App. Div. 426, 430, supra). This corporation took
ventory at intervals but had no running or continuous inven-
ory. When the auditor came around, Miss Ostroff gave him an .
stimate of inventory and he put it on the books. At the trial,
laintiff’s counsel conceded that the actual figure, after Miss
stroff’s death, was much higher than the book figure, but such a
concession could not change the contract’s test of ‘‘ book value ”
s determined by latest audit. If, despite such a contract, there
as to be a new physical inventory, and, likewise, a new, true valu-
tion of every other asset and liability, then the phrase ‘‘ book
alue ’? has no meaning and the convenient arrangements care-
‘ully worked out by the parties and their counsel in the written
greement comes to naught.

Lhave found no case where the New York courts have failed to
arry out such an agreement according to its precise terms (see
rucklieb v. Sam H. Harris, Inc., 209 N. Y. 211, and Surro-
ate GrirrrrH’s opinion in Estate of Reben, 115 N. Y. 8. 2d 228,
37). In Steinbugler v. Atwater & Co. (289 N. Y. 816, supra),
hen the ‘‘ book value ’? was computed, it was found that stocks
in other corporations) owned by defendant Atwater were on the
twater books at cost, which was concededly much higher than
ctual value. Atwater’s accountant then attempted to write these
alues down, but the courts, including this court, refused to per-
it it. So the cost figures stood although, like the inventory
alue here, they were ‘‘ concededly erroneous ’’ in the sense that
ey did not represent actuality.

The judgment should be modified accordingly, without costs.

Corway, Ch. J., Dyz, Van Voornis and Burgs, JJ., concur with
‘ROESSEL, J.; Dusmonn, J., dissents in part in an opinion in which
‘uLD, J., concurs.

Judgment accordingly,

Wuitam Rosenrep, on Behalf of Himself and All Other Stock-
holders of Fatrcarp Eneme anp Airpiane Corporation,
Similarly Situated, Appellant, v. Farroamp Ewen anp Arr]
PLANE Corporation et al., Respondents, et al., Defendants.

Argued March 2, 1955; decided July 8, 1955.

Abraham Marcus, Alan J. Stein and William Rosenfeld, i
person, for William Rosenfeld, appellant. I. The expenditur
by the incumbent board of directors of corporate funds to obtai:
its own re-election in a proxy fight was improper. (Lawyers
Adv. Co. v. Consolidated Ry. Lighting & Refrig. Co., 187 N. Y!
395; Gherwien v. Geiter, 272 N. Y. 165; Matter of Marchant v!
Mead-Morrison Mfg. Co., 252 N. Y. 284; Weissman v. Banque D.
Bruaelles, 254 N. Y. 488; Savage v. O’Neil, 44 N. Y. 298; Hall v
Trans-Lux Daylight Picture Screen Corp., 20 Del. Ch. 78; Han
vy. Missouri-Kansas Pipe Line Co., 54 F. Supp. 649; Peel v,
London & North Western Ry. Co., [1907] 1 Ch. 5; Steinberg v
Adams, 90 F. Supp. 604.) II. The holdings below approvin;
reimbursement out of corporate funds for proxy expenses o:
successful insurgents are based on fundamental misconception:
of legal theory. ITI. The Appellate Division, in denying recove:
on procedural grounds for the ‘‘ substantial amount of needles

Ss = 169
nee

expense which was charged to the corporation ’’, ignored the
settled rule in equity actions that proof of wrongdoing requires
a judgment for an accounting; and ignored the rule placing the
burden of proof upon the directors who caused the improper
expenditures to be made. (Owen v. Blumenthal, 280 N. Y. 96;
Sheehan v. Moore & McCormack Co., 219 App. Div. 317; Sage
v. Culver, 147 N. ¥. 241; Fur & Wool Trading Co. v. Fou, 245
IN. ¥. 215; German-Amer. Coffee Co. v. O’Neil, 216 N. Y. 726;
Godley v. Crandall & Godley Co., 153 App. Div. 697, 212 N. Y.
121; Hine v. Lausterer, 135 Misc. 397, 232 App. Div. 719, 257
IN. ¥. 523; Kreitner v. Burgweger, 174 App. Div. 48; Hyams v.
Calumet & Hecla Min. Co., 221 ¥. 529.) IV. The new board of
directors should have been held liable for permitting payment
to be made by the corporation of improper expenditures incurred
lby the former board. (Matter of Horowitz, 272 App. Div. 942,
997 N. Y¥. 252; Carr v. Kimball, 153 App. Div. 825, 215 N. Y. 634.)
IV. Stockholders’ ratification of the improper expenditures of
corporate moneys to reimburse the successful insurgent group
was invalid and ineffective. As a gift and waste of corporate
funds, the reimbursement could not be ratified. (Matter of
Pennsylvania Whiskey Distr. Corp. v. Bruckman, 256 App. Div.
781; Continental Securities Co. v. Belmont, 206 N. Y. 7; Rogers
lv. Hill, 289 U. 8. 582; Pollitez v. Wabash R. R. Co., 207 N. Y. 118;
Schwab v. Potter Co., 194 N. Y. 409; Wheeler v. Home Sav. Bank,
1188 Ill. 34; Holland Baking Co. v. Continental Nat. Bank, 324
Mo. 1.) VI. Ratification, in any event, was ineffective because
obtained upon a false and misleading proxy statement. (General
nvestment Co. v. American Hide & Leather Co., 97 N. J. Bq.
214; Berendt v. Bethlehem Steel Corp., 108 N. J. Hq. 148; Cahall

. Lofland, 12 Del. Ch. 299, 13 Del. Ch. 884.) VII. Stockholders’
ratification of insurgents’ reimbursement cannot be held to
onstitute an implied ratification of incumbents’ improper
expenditures. (Pollitz v. Wabash R. R. Co., 207 N. Y..113.)
VIII. The release of Ward did not have the effect of releasing
the other old directors. The old directors other than Ward,
having given no consideration, cannot be deemed released.
(Rider v. Morrison, 54 Md. 429; McQuillen v. National Cash Reg-
ister Co., 27 F. Supp. 639, 112 F. 2d 877, 311 U. S. 695, 311 U. S.
729; Rogers v. Hill, 289 U. 8. 582; Gilbert v. Finch, 72 App. Div.
38, 173 N. Y. 455; Bessilieu v. Brown, 177 N. C. 65.)

Os

Harold R. Medina, Jr., for 0. Parker McComas and another,
respondents. I. The old board properly used corporate funds
to present their views to the stockholders and to solicit support of
those views. (Peel v. London é North Western Ry. Co., [1907]
1 Ch. 5; Hand v. Missouri-Kansas Pipe Line Co., 54 F. Supp. 649;
Steinberg v. Adams, 90 F. Supp. 604; Atwater v. Elkhorn Valley
Coal-Land Co., 184 App. Div. 253, 227 N. Y. 611; Godley v.
Crandall & Godley Co., 181 App. Div. 75, 227 N. Y. 656; Rascovor
v. American Linseed Co., 135 F. 341; Lawyers’ Adv. Co. v. Con-
solidated Ry. Lighting & Refrig. Co., 187 N. Y. 395.) II. Even
if the old board improperly expended corporate funds in the
proxy contest, the ward release was valid and therefore dis-
charged them from all claims.

Jacquelin A. Swords and William K. Zinke for Sherman M.
Fairchild, respondent. I. Management may expend corporate
funds to finance a proxy contest provided the contest revolves|
around matters of corporate policy and provided the expendi-
tures, under the circumstances, are reasonable. (Peel v. London)
& North Western Ry. Co., [1907] 1 Ch. 5; Hall v. Trans-Lua
Daylight Picture Screen Corp., 20 Del. Ch. 78; Hand v. Missouri-
Kansas Pipe Line Co., 54 F. Supp. 649; Steinberg v. Adams:
90 F. Supp. 604; Lawyers’ Adv. Co. v. Consolidated Ry|
Lighting & Refrig. Co., 187 N. Y. 395; Rascovor v. Ameri
can Linseed Co., 185 F. 341.) II. Respondent Fairchild can4
not be held liable for having permitted payment of expenses
incurred by the old board in connection with the proxy fight.
IIL. Members of a stockholder’s committee successful in a proxy|
contest in ridding their corporation of its old management may
be reimbursed by vote of majority stockholders for theiy
expenses. (Murray v. Requardt, 180 Md. 245; Pollite v. Wabas.
RB. RB. Co., 207 N. Y. 118; Trustees v. Greenough, 105 U. 8. 527
Sprague v. Ticonic Bank, 307 U. 8. 161.) IV. The proxy state.
ment accompanying the notice of the 1950 annual stockholders
meeting, at which the reimbursement was approved, was not fals:
or misleading. (Koplar v. Warner Bros. Pictures, 19 F. Supp
173; Doyle v. Milton, 73 F. Supp. 281.)

Samuel J. Silverman for James A. Allis, respondent
Respondent Allis acted both prudently and reasonably in a situa.
tion in which neither his good faith nor his disinterestedness i

DE
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questioned; he merely exercised his best judgment on a corpo-
rate problem, receiving no personal benefit from it. In these
circumstances, there can be no recovery as against Allis for any
part of the sums expended. (Blaustein v. Pan Amer. Petroleum
& Transport Co., 263 App. Div. 97, 293 N. Y. 281; Carr v. Kimball,
153 App. Div. 825, 215 N. Y. 634; Matter of Horowitz, 272 App.
Div. 942, 297 N. Y. 252; Simon v. Socony-Vacuum Oil Co., 179
Mise. 202, 267 App. Div. 890; Macdougall v. Gardiner, 1 Ch.
D. 13.)

Frozssex, J. In a stockholder’s derivative action brought by
plaintiff, an attorney, who owns 25 out of the company’s over
2,300,000 shares, he seeks to compel the return of $261,522, paid
out of the corporate treasury to reimburse both sides in a proxy
contest for their expenses. The Appellate Division has unani-
mously affirmed a judgment of an Official Referee dismissing
plaintiff’s complaint on the merits, and we agree. Hxhaustive
opinions were written by both courts below, and it will serve
no useful purpose to review the facts again.

Of the amount in controversy $106,000 were spent out of cor-
porate funds by the old board of directors while still in office in
defense of their position in said contest ; $28,000 were paid to the
old board by the new board after the change of management
following the proxy contest, to compensate the former directors
for such of the remaining expenses of their unsuccessful defense
as the new board found was fair and reasonable; payment of
$127,000, representing reimbursement of expenses to members
of the prevailing group, was expressly ratified by a 16 to 1
majority vote of the stockholders.

The essential facts are not in dispute, and, since the deter-
minations below are amply supported by the evidence, we are
bound by the findings affirmed by the Appellate Division. The
Appellate Division found that the difference between plaintiffs
group and the old board ‘‘ went deep into the policies of the
company ”’, and that among these Ward’s contract was one of
the ‘‘ main points of contention ’’. The Official Referee found
that the controversy ‘‘ was based on an understandable difference
in policy between the two groups, at the very bottom of which was
the Ward employment contract ’’,

ee
|

By way of contrast with the findings here, in Lawyers’ Adv.
Co. v. Consolidated Ry. Lighting & Refrig. Co. (187 N. Y. 395),
which was an action to recover for the cost of publishing news-
paper notices not authorized by the board of directors, it was
expressly found that the proxy contest there involved was ‘‘ by
one faction in its contest with another for the control of the
corporation * * * a contest for the perpetuation of their
offices and control ’’ (p. 399). We there said by way of dicta
that under such circumstances the publication of certain notices
on behalf of the management faction was not a corporate ex-
penditure which the directors had the power to authorize.

Other jurisdictions and our own lower courts have held that
management may look to the corporate treasury for the reason-
able expenses of soliciting proxies to defend its position in a
bona fide policy contest (Peel v. London & North Western Ry.
Co., [1907] 1 Ch. 5; Kadel v. Segal Lock & Hdwe. Co., N. Y.
L. J., Sept. 21, 1953, p. 488, col. 4 [Sup. Ct, N. Y. Co.];
McGoldrick v. Segal, N.Y. L. J., Sept. 14, 1950, p. 461, col. 2 [Sup.
Ot., N. Y. Co.]; Matter of Zickl, 73 N. Y. S. 2d 181, 185; Howard
v. Segal Lock & Hdwe. Co., N. Y. L. J., Feb. 13, 1953, p. 496,
col. 6 [City Ct. N. Y. Co.]; Appeal Print. Co. v. Segal Lock
& Hadwe. Co., N. Y. L. J., Dec. 22, 1952, p. 1563, col. 3 [City
Ct., N. ¥. Co.J; Steinberg v. Adams, 90 F. Supp. 604 [8. D. N. ¥.];
He and v. Missouri-Kansas Pipe Line Co., 54 F. Supp. 649
[D. Del.]; Empire So. Gas Co. v. Gray, 29 Del. Ch. 95; Hall v.
Trans-Luz Daylight Picture Screen Corp., 20 Del. Ch. 78).

It should be noted that plaintiff does not argue that the afore-
mentioned sums were fraudulently extracted from the corpora-
tion; indeed, his counsel conceded that ‘‘ the charges were fair
and reasonable ’’, but denied ‘‘ they were legal charges which
may be reimbursed for’. This is therefore not a case where a
stockholder challenges specific items, which, on examination,
the trial court may find unwarranted, excessive or otherwise
improper. Had plaintiff made such objections here, the trial
court would have been required to examine the items challenged.

If directors of a corporation may not in good faith incur rea-
sonable and proper expenses in soliciting proxies in these days
of giant corporations with vast numbers of stockholders, the
corporate business might be seriously interfered with because
of stockholder indifference and the difficulty of procuring a

Le ED
be

quorum, where there is no contest. In the event of a proxy con-
test, if the directors may not freely answer the challenges of
outside groups and in good faith defend their actions with re-
spect to corporate policy for the information of the stockholders,
they and the corporation may be at the mercy of persons seeking
to wrest control for their own purposes, so long as such persons
have ample funds to conduct a proxy contest. The test is clear.
When the directors act in good faith in a contest over policy,
they have the right to incur reasonable and proper expenses
for solicitation of proxies and in defense of their corporate
policies, and are not obliged to sit idly by. The courts are en-
tirely competent to pass upon their bona fides in any given case,
as well as the nature of their expenditures when duly challenged.
It is also our view that the members of the so-called new group
could be reimbursed by the corporation for their expenditures
in this contest by affirmative vote of the stockholders. With re-
gard to these ultimately successful contestants, as the Appellate
Division below has noted, there was, of course, ‘‘no duty
* * * to set forth the facts, with corresponding obligation of
the corporation to pay for such expense ’’. However, where a
majority of the stockholders chose —in this case by a vote of
16 to 1— to reimburse the successful contestants for achieving .
the very end sought and voted for by them as owners of the
corporation, we see no reason to deny the effect of their ratifica-
tion nor to hold the corporate body powerless to determine how
its own moneys shall be spent.
¢- ‘The rule then which we adopt is simply this: In a contest
over policy, as compared to a purely personal power contest,
corporate directors have the right to make reasonable and proper
expenditures; subject to the scrutiny of the courts when duly
challenged, from the corporate treasury for the purpose of per-
suading the stockholders of the correctness of their position and
soliciting their support for policies which the directors believe,
in all good faith, are in the best interests of the corporation.
The stockholders, moreover, have the right to reimburse success-
ful contestants for the reasonable and bona fide expenses in-
curred by them in any such policy contest, subject to like court
scrutiny. ‘That is not to say, however, that corporate directors
can, under any circumstances, disport themselves in a proxy
contest with the corporation’s moneys to an unlimited extent. |

a
nes}

Where it is established that such moneys have been spent for
personal power, individual gain or private advantage, and not
in the belief that such expenditures are in the best interests of
the stockholders and the corporation, or where the fairness and
reasonableness of the amounts allegedly expended are duly and
successfully challenged, the courts will not hesitate to disallow
them.

The judgment of the Appellate Division should be affirmed,
without costs.

Dezsmonp, J. (concurring). We granted leave to appeal in
an effort to pass, and in the expectation of passing, on this
question, highly important in modern-day corporation law: is
it lawful for a corporation, on consent of a majority of its stock-
holders, to pay, out of its funds, the expenses of a ‘‘ proxy
fight ’, incurred by competing candidates for election as direc-
tors? Now that the appeal has been argued, I doubt that the
question is presented by this record. The defendants served
were Allis who was on the old board but was re-elected to the
new board, McComas and Wilson, defeated members of the old
board, and Fairchild, leader of the victorious group and largest.
stockholder in the corporation. The expenses of the old board,
or management group, in the proxy fight, were about $134,000, .
and those of the victorious Fairchild group amounted to about
$127,500. In the end, the corporation paid both those sums, and
it is for the reimbursement thereof, to the corporation, that this
stockholder’s derivative action is brought. Of the proxy fight
expenses of the management slate, about $106,000 was paid out
on authorization of the old board while the old directors were
still in office. The balance of those charges, as well as the whole
of the expenses of the new, and successful, Fairchild group, was
paid by the corporation after the new directors had taken over
and after a majority of stockholders had approved such expendi-
tures. The election had been fought out on a number of issues,
chief of which concerned a contract which Ward (a defendant’
not served), who was a director and the principal executive
officer of the company, had obtained from the corporation, cov-
ering compensation for, and other conditions of, his own services. .
Bach side, in the campaign for proxies, charged the other with
seeking to perpetuate, or grasp, control of the corporation. The

Fairchild group won the election by a stock vote of about two-
to-one, and obtained, at the next annual stockholders’ meeting
and by a much larger vote, authorization to make the payments
above deseribed.

Plaintiff asserts that it was illegal for the directors (unless
by unanimous consent of stockholders) to expend corporate
moneys in the proxy contest beyond the amounts necessary to
give to stockholders bare notice of the meeting and of the matters
to be voted on thereat. Defendants say that the proxy contest
revolved around disputes over corporate policies and that it
was, accordingly, proper not only to assess against the corpora-
tion the expense of serving formal notices and of routine proxy
solicitation, but to go further and spend corporate moneys, on
behalf of each group, thoroughly to inform the stockholders.
The reason why that important question is, perhaps, not directly
before us in this lawsuit is because, as the Appellate Division
properly held, plaintiff failed ‘‘ to urge liability as to specific
expenditures ’’. The cost of giving routinely necessary notice
is, of course, chargeable to the corporation. It is just as clear,
we think, that payment by a corporation of the expense uf ‘‘ pro-
ceedings by one faction in its contest with another for the control
of the corporation ”’ is ultra vires, and unlawful (Lawyers’ Adv.
Co. v. Consolidated Ry. Lighting & Refrig. Co., 187 N. Y. 395,
899). Approval by directors or by a majority stock vote could
not validate such gratuitous expenditures (Continental Secur-
ities Co. v. Belmont, 206 N. Y. 7). Some of the payments at-
tacked in this suit were, on their face, for lawful purposes and
apparently reasonable in amount but, as to others, the record
simply does not contain evidentiary bases for a determination
as to either lawfulness or reasonableness. Surely, the burden
was on plaintiff to go forward to some extent with such particu-
larization and proof. It failed to do so, and so failed to make
out a prima facie case.

We are, therefore, reaching the same result as did the Appel-
late Division but on one only of the grounds listed by that court,
that is, failure of proof. We think it not inappropriate, however,
to state our general views on the question of law. principally
argued by the parties, that is, as to the validity of corporate
payments for proxy solicitations and similar activities in addi-
tion to giving notice of the meeting, and of the questions to

be voted on. For an answer to that problem we could not do
better than quote from this court’s opinion in the Lawyers’ Adv.
Co, case (187 N. Y. 395, 399, supra): ‘‘ The remaining notices’
were not legally authorized and were not legitimately incidental
to the meeting or necessary for the protection of the stock-
holders. They rather were proceedings by one faction in its
contest with another for the control of the corporation, and the’
expense thereof as such is not properly chargeable to the latter.
This is so apparent as to the last two notices that nothing need
be said in reference to them but a few words may. be said in
regard to the first one calling for proxies. It is to be noted that
this is not the case of an ordinary circular letter sent out with
and requesting the execution of proxies. The custom has become
common upon the part of corporations to mail proxies to their
respective stockholders often accompanied by a brief circular of
directions, and such custom when accompanied by no unreason-
able expenditure is not without merit in so far as it encourages
voting by stockholders through making it convenient and réady
at hand. The notice in question, however, was not published
until after proxies had been sent out. It simply amounted’to an
urgent solicitation that these proxies should be executed’ and
returned for use by one faction in its contest, and we think there
is no authority for imposing the expense of its publication upon
the company. * * * it would be altogether too dangerous a
rule to permit directors in control of a corporation and engaged
in a contest for the perpetuation of their offices and control, to
impose upon the corporation the unusual expense of publishing
advertisements or, by analogy, of dispatching special messengers
for the purpose of procuring proxies in their behalf.”

A final comment: ‘since expenditures which do not meet that
test of propriety are intrinsically unlawful, it could not be any
answer to such a claim as plaintiff makes here that the stock-
holder vote which purported to authorize them was heavy or
that the change in management turned out to be beneficial to the
corporation. 7

The judgment should be affirmed, without costs.

Vaw Voornis, J. (dissenting). The-decision of this appeal is
of far-reaching importance insofar as concerns payment by
corporations of campaign expenses by stockholders in proxy

ee = 177
—

contests for control. “This is isa a stockholder’ 's derivative action to
require directors to restore to a corporation moneys paid to
defray expenses of this nature, incurred both by an incumbent
faction and by an insurgent faction of stockholders. The insur-
gents prevailed at the annual meeting, and payments of their
own campaign expenses were attempted to be ratified by majority
vote. It was a large majority, but the stockholders were not
unanimous. Regardless of the merits of this contest, we are
called upon to decide whether it was a corporate purpose (1) to
make the expenditures which were disbursed by the incumbent
or management group in defense of their acts and to remain in
control of the corporation, and (2) to defray expenditures made
by the insurgent group, which succeeded in convincing a majority
of the stockholders. The Appellate Division held that stock-
holder authorization or ratification was not necessary to reason-
able expenditures by the management group, the purpose of
which was to inform the stockholders concerning the affairs of
the corporation, and that, although these incumbents spent or
incurred obligations of $133,966 (the previous expenses of annual
meetings of this corporation ranging between $7,000 and
$28,000), plaintiff must fail for having omitted to distinguish
item by item between which of these expenditures were war-
ranted and which ones were not; and the Appellate Division held
that the insurgents also should be reimbursed, but subject to the
qualification that ‘‘ The expenses of those who were seeking to
displace the management should not be reimibursed by the
corporation except upon approval by the stockholders.’’ It
was held that the stockholders had approved.

No resolution was passed by the stockholders approving pay-
ment to the management group. It has heen recognized that not
all of the $133,966 in obligations paid or incurred by the
management group was designed merely for information of
stockholders. This outlay included payment for all of the
activities of a strenuous campaign to persuade and cajole in a
hard-fought contest for control of this corporation. It included,
for example, expenses for entertainment, chartered airplanes and
limousines, public relations counsel and proxy solicitors. _How-
ever legitimate such measures may be on behalf of stockholders
themselves in such a controversy, most of them do not pertain
to a corporate function but are part of the familiar apparatus of

Se
err
aggressive factions in corporate contests. In Lawyers’ Adv. Co.
v. Consolidated Ry. Lighting & Refrig. Co. (187 N. Y. 395, 399),
this court said: ‘‘ The notice in question, however, was not
published until after proxies had been sent out. It simply
amounted to an urgent solicitation that these proxies should be
executed and returned for use by one faction in its contest, and
we think there is no authority for imposing the expense of its
publication upon the company. It may be conceded that the
directors who caused this publication acted in good faith and felt
that they were serving the best interests of the stockholders, but
it would be altogether too dangerous a rule to permit directors
in control of a corporation and engaged in a contest for the
perpetuation of their offices and control, to impose upon the
corporation the unusual expense of publishing advertisements or,
by analogy, of dispatching special messengers for the purpose of
procuring proxies in their behalf.””

The Appellate Division acknowledged in the instant case that
“‘Tt is obvious that the management group here incurred a
substantial amount of needless expense which was charged to the
corporation ’’, but this conclusion should have led to a direction
that those defendants who were incumbent directors should be
required to come forward with an explanation of their expendi-
tures under the familiar rule that, where it has been established
that directors have expended corporate money for their own
purposes, the burden of going forward with evidence of the
propriety and reasonableness of specific items rests upon the
directors (Godley v. Crandall & Godley Co., 153 App. Div. 697,
711, mod. 212 N. Y. 121; Hine v. Lausterer, 135 Mise. 397, 401—
402, mod. 232 App. Div. 719, affd. 257 N. ¥. 523). The complaint
should not have been dismissed as against incumbent directors
due to failure of plaintiff to segregate the specific expenditures
which are ulira vires, but, once plaintiff had proved facts from
which an inference of impropriety might be drawn, the duty of
making an explanation was laid upon the directors to explain
and justify their conduct.

The second ground assigned by the Appellate Division for
dismissing the complaint against incumbent directors is stock-
holder ratification of reimbursement to the insurgent group.
Whatever effect or lack of it this resolution had upon expendi-
tures by the insurgent group, clearly the stockholders who voted

ee 17!
ee

to pay the insurgents entertained no intention of reimbursing
the management group for their expenditures. The insurgent
group succeeded as a result of arousing the indignation of these
very stockholders against the management group; nothing in the
resolution to pay the expenses of the insurgent group purported
to authorize or ratify payment of the campaign expenses of
their adversaries, and certainly no inference should be drawn
that the stockholders who voted to pay the insurgents intended
that the incumbent group should also be paid. Upon the con-
trary, they were removing the incumbents from control mainly
for the reason that they were charged with having mulcted the
corporation by a long-term salary and pension contract to one of
their number, J. Carlton Ward, Jr. If these stockholders had
heen presented with a resolution to pay the expenses of that
group, it would almost certainly have been voted down. The
stockholders should not be deemed to have authorized or ratified
reimbursement of the incumbents.

There is no doubt that the management was entitled and under
a duty to take reasonable steps to acquaint the stockholders with
essential facts concerning the management of the corporation,
and it may well be that the existence of a contest warranted them
in cireularizing the stockholders with more than ordinarily
detailed information. As this court said in Lawyers’ Adv. Co.
v. Consolidated Ry. Lighting & Refrig. Co. (supra, p. 399):
“« Proper and honest corporate management was subserved by
widespread notice to stockholders of questions affecting the
welfare of the corporation, and there is no impropriety in
charging the latter with any expenses within reasonable limits
which were incurred in giving sufficient notice of the special
meeting at which the stockholders could be called upon to decide
these questions.’’

‘What expenses of the incumbent group should be allowed and
what should be disallowed should be remitted to the trial court to
ascertain, after taking evidence, in accordance with the rule
that the incumbent directors were required to assume the burden
of going forward in the first instance with evidence explaining
and justifying their expenditures. Only such as were reasonably
related to informing the stockholders fully and fairly concerning
the corporate affairs should he allowed. The concession by plain-
tiff that such expenditures as were made were reasonable in

amount does not decide this question. By way of illustration, the
costs of entertainment for stockholders may have been, and it
is stipulated that they were, at the going rates for ‘providing
similar entertainment. That does not signify that entertaining
stockholders is reasonably related to the purposes of the corpo-
ration. The Appellate Division, as above stated, found that the
management group incurred a substantial amount of needless
expense. That fact being established, it became the duty of ‘the
incumbent directors to unravel and‘explain these payments. ‘
Regarding the $127,556 paid by the new management to the
insurgent group for their campaign expenditures, the, question
immediately arises whether that was for a corporate purpose.
The Appellate Division has recognized that upon no theory
could such expenditures be reimbursed except by approval of the
stockholders and, as has been said, it is the insurgents’ expendi-
turés alone to which the stockholders’ resolution of ratification
was addressed. If unanimous stockholder approval had been
obtained and no rights of creditors or of the public intervened,
it would make no practical difference whether the purpose were
ultra vires —i.e., not a corporate purpose. (Kent v. Quick-
silver Min. Co., 78 N. Y. 159; Capitol Wine & Spirit Corp. v.
Pokrass, 277 App. Div. 184, 187, affd. 302 N. Y. 734.) Upon the
other hand, an act which is ultra vires cannot be ratified merely
by a majority of the stockholders of a corporation. (Continental
Securities Co. v. Belmont, 206 N. Y. 7; Pollite v. Wabash R: R.
Co., 207 N. Y. 118; Schwab v. Potter Co., 129 App. Div. 36; Davis
v. Congregation Beth Tephila Israel, 40 App. Div. 424; Fletcher’s
Cyclopedia Corporations, §§ 764, 767, 3432, 5795.) In Schwab v.
Potter Co. (supra, p. 41) it is said that ‘‘ it cannot be'contended
successfully that the minority stockholders may not maintain al
suit to enjoin the ultra vires acts of their corporation.’’ It was|
further held not to be a defense that a majority of the stock-
holders had adopted a resolution of ratification. In Davdis v.
Congregation Beth Tephila Israel (supra), it was held that a
single dissenting member of a corporation might maintain an|
action to vacate an ultra vires agreement. In Contintental
Securities Co. v. Belmont (supra, pp. 18-19), the court discussed
“<The distinction between acts that can and those that cannot be
confirmed and ratified’? by the ‘stockholders. Quoting from]
Bagshaw v. Eastern Union Ry. Co. (7 Hare 114), the court said;

ee = 12)
re

‘¢¢ No majority of the shareholders, however large, could sanc-
tion the misapplication of this portion of the capital. A single
dissenting voice would frustrate the wishes of the majority.’ ’’

The familiar rule, applied in those and other decisions, is that
merely voidable acts of the directors of a corporation can be
ratified by majority stockholder approval, such as contracts
between corporations having interlocking directorates (Conti-
nental Ins. Co. v. New York & Harlem R. R. Co., 187 N. Y. 225),
loans of surplus funds by a trading corporation (Murray v.
Smith, 166 App. Div. 528 — although not in the case of loans to
stockholders in violation of the Stock Corporation Law, § 59),
and other irregularities involving acts which are neither ultra
vires, fraudulent or illegal.

In considering this issue, as in the case of the expenses of
the incumbents, we begin with the proposition that this court
has already held that it is beyond the power of a corporation to
authorize the expenditure of mere campaign expenses in a proxy
contest (Lawyers’ Adv. Co. v. Consolidated Ry. Lighting &
Refrig. Co., supra). That decision is not distinguishable upon
the ground that those expenditures were made by the secretary
of that corporation without previous authorization by its
directors. That point was involved, but this court said: ‘‘ Thus
we have it that the publication of the last three notices was not
authorized by the board of. directors and that it could not have
been lawfully authorized even if the attempt were made. They
bore upon their face sufficient notice to the plaintiff [the printer
suing for printing fees] that they were of a character beyond the
limit of anything which could be published in behalf of or at the
expense of the corporation’? (p. 400; italics supplied). The
decision was placed upon both grounds. The statement in the
carefully considered opinion written by Judge Hiscock was not
dictum that ‘‘ it would be altogether too dangerous a rule to
permit directors in control of a corporation and engaged in a
contest for the perpetuation ot their offices and control, to impose
upon the corporation the unusual expense ’’. In that case, and
in all of the other decisions which have been cited with the single
exception of a Federal district court decision (Steinberg v.
Adams, 90 F. Supp. 604, 606), the question concerned reimburse-
ment of a management group. Moreover, with the exception of
an English decision (Peel v. London & North Western Ry. Co.,

12

[1907] 1 Ch. 5), all of the appellate court cases which have been
cited, and Steinberg v. Adams (supra), were decided under the
law of the State of Delaware. The Delaware law contains more
latitude than in New York State, as was recognized by Judge

~ Rirxrp in his opinion in Steinberg v. Adams, who said (p. 607):
“« The instant case is concerned with a Delaware corporation and
the law of that state determines the scope of the corporation’s
powers. Both parties, as I have indicated, agree that this case
is governed by a less stringent rule ’’ than the ruling by this
court in Lawyers’ Adv. Co. v. Consolidated Ry. Lighting &
Refrig. Co. (supra). We are called upon to decide whether to
abandon the rule as previously established in this State and
adopt the less strict doctrine of the State of Delaware.

The Delaware cases which are cited consist of Hall v. Trans-
Lua Daylight Picture Screen Corp. (20 Del. Ch. 78), Empire So.
Gas Co. v. Gray (29 Del. Ch. 95), and the Federal cases applying
Delaware law (Hand v. Missouri-Kansas Pipe Line Co., 54 F.
Supp. 649, and Steinberg v. Adams, supra). The Hand case
(supra) merely denied a preliminary injunction to restrain the
management from expending corporate funds to hire profes-
sional proxy solicitors. There is a difference between hiring
solicitors merely to follow up proxy notices so as to obtain a quo-
rum, and a high pressure campaign to secure votes by personal
contact. The district court in the Hand case did not attempt to
decide that aspect of the case, merely ruling that it should be
determined after trial, and that no irreparable injury had been
shown justifying the issuance of a temporary injunction even if
the practice were ultimately held to have been ultra vires. In
Empire So. Gas Co. v. Gray (supra), it was held that a corpora-
tion might sue to enjoin insurgents from soliciting proxies
fraudulently by means of a false statement that such solicitation
was being made by order of the board of directors. The case
most frequently cited and principally relied upon from among
these Delaware decisions is Hall v. Trans-Lua Daylight Picture
Screen Corp. (supra). There the English case was followed of
Peel v. London & North Western Ry. Co. (supra) which distin-
guished between expenses merely for the purpose of maintaining
control, and contests over policy questions of the corporation.
In the Hall case the issues concerned a proposed merger, and
a proposed sale of stock of a subsidiary corporation, These were

held to be policy questions, and payment of the management
campaign expenses was upheld.

In our view, the impracticability of such a distinction is illus-
trated by the statement in the Hall case (supra, p. 85) that ‘ It
is impossible in many cases of intracorporate contests over
directors, to sever questions of policy from those of persons ’’.
This circumstance is stressed in Judge Rurxryp’s opinion in the
Steinberg case (supra, p. 608): ‘‘ The simple fact, of course, is
that generally policy and personnel do not exist in separate
compartments. A change in personnel is sometimes indispen-
sable to a change of policy. A new board may be the symbol of
the shift in policy as well as the means of obtaining it.’’

That may be all very well, but the upshot of this reasoning is
that inasmuch as it is generally impossible to distinguish whether
“ policy ’? or ‘‘ personnel’? is the dominant factor, any aver-
ments must be accepted at their face value that questions of
policy are dominant. Nowhere do these opinions mention that
the converse is equally true and more pervasive, that neither the
‘*ins ’? nor the ‘ outs ’”? ever say that they have no program to
offer to the shareholders, but just want to acquire or to retain
control, as the case may be. In common experience, this distinc-
tion is unreal. It was not mentioned by this court in Lawyers’
Adv. Co. v. Consolidated Ry. Lighting & Refrig. Co. (supra).
As in political contests, aspirations for control are invariably
presented under the guise of policy or principle. A valiant
effort was made in the English case of Peel v. London & North
Western Ry. (supra, p. 21) to conserve the distinction in the
opinion by Bucxtey, L. J., who said: ‘‘ Those who are con-
versant with the affairs of joint stock companies are well aware
that cases often arise in which the board in power are anxious
to maintain themselves in power, to procure their own re-election,
or to drive a policy not really in the interests of the corporation,
but for some private purpose of their own, down the throats of
the corporators at a general meeting, and in which they issue at
the expense of the company circulars and proxy papers for the
purpose of attaining that object. When a case of that kind comes
before the Court, I sincerely trust that the decision of this Court
in this case will not be cited as any authority for justifying the
action of the directors.’’

ee
ensue)

The main question of ‘‘ policy’? in the instant corporate
election, as is stated in the opinions below and frankly admitted,
concerns the long-term contract with pension rights of a former
officer and director, Mr. J. Carlton Ward, Jr. The insurgents’
chief claim of benefit to the corporation from their victory
consists in the termination of that agreement, resulting in an
alleged actuarial saving of $350,000 to $825,000 to the corpora-
tion, and the reduction of other salaries and rent by more than
$300,000 per year. The insurgents had contended in the proxy
contest that these payments should be substantially reduced so
that members of the incumbent group would not continue to
profit personally at the expense of the corporation. If these
charges were true, which appear to have been believed by a
majority of the shareholders, then the disbursements by the
management group in the proxy contest fall under the condemna-
tion of the English and the Delaware rule.

These circumstances are mentioned primarily to illustrate how
impossible it is to distinguish between ‘‘ policy ’’ and ‘‘ person-
nel ’’, as Judge Rirxinp expressed it, but they also indicate that
personal factors are deeply rooted in this contest. That is
certainly true insofar as the former management group is
concerned. It would be hard to find a case to which the careful
reservation made by the English Judge in the Peel case (supra)
was more directly applicable.

Some expenditures may concededly be made by a corporation
represented by its management so as to inform the stockholders,
put there is a clear distinction between such expenditures by
management and by mere groups of stockholders. The latter
are under no legal obligation to assume duties of managing the
corporation. They may endeavor to supersede the management
for any reason, regardless of whether it be advantageous or
detrimental to the corporation but, if they succeed, that is not
a determination that the company was previously mismanaged
or that it may not be mismanaged in the future. A change in
control is in no sense analogous to an adjudication that the
former directors have been guilty of misconduct. The analogy
of allowing expenses of suit to minority stockholders who have
been successful in a derivative action based on misconduct of
officers or directors, is entirely without foundation.

ee =| 125
Le

Insofar as a management group is concerned, it may charge
the corporation with any. expenses within reasonable limits
incurred in giving widespread notice to stockholders of questions
affecting the welfare of the corporation (Lawyers’ Adv. Co. v.
Consolidated Ry. Lighting & Refrig. Co., supra). Expenditures
in excess of these limits are ultra vires. The corporation lacks
power to defray them. The corporation lacks power to defray
the expenses of the insurgents in their entirety. The insurgents
were not charged with responsibility for operating the company.
No appellate court case is- cited from any jurisdiction holding
otherwise. No contention is made that such disbursements could
be made, in any event, without stockholder ratification; they
could not be ratified except by unanimous vote if they were ultra
vires. The insurgents, in this instance, repeatedly announced to
the stockholders in their campaign literature that their proxy
contest was being waged at their own personal expense. If
reimbursement of such items were permitted upon majority
stockholder ratification, no court or other tribunal could pass
upon which types of expenditure were ‘‘ needless ”’, to employ
the characterization of the Appellate Division in this case.
Whether the insurgents should be paid would be made to depend
upon whether they win the stockholders election and obtain
control of the corporation. It would be entirely irrelevant
whether the corporation is ‘‘ benefited ’’ by their efforts or by
the outcome of such an election. The courts could not indulge in
a speculative inquiry into that issue. That would truly be a
matter of business judgment. In some instances corporations
are better governed by the existing management and in others
by some other group which supersedes the existing management.
Courts of law have no jurisdiction to decide such questions, and
successful insurgent stockholders may confidently be relied upon
to reimburse themselves whatever may be the real merits of the
controversy. The losers in a proxy fight may understand the
interests of the corporation more accurately than their successful
adversaries, and agitation of this character may ultimately
result in corporate advantage even if there-be no change in
management. Nevertheless, under the judgment which is
appealed from, success in a proxy contest is the indispensable
condition upon which reimbursement of the insurgents depends.
Adventurers are not infrequent who are ready to take advantage

of economic recessions, reduction of dividends or failure to
inerease them, or other sources of stockholder discontent to wage
contests in order to obtain control of well-managed corporations,
so as to divert their funds through legal channels into other
corporations in which they may be interested, or to discharge
former officers and employees to make room for favored new-
comers according to the fashion of political patronage, or for
other objectives that are unrelated to the sound prosperity of
the enterprise. The way is open and will be kept open for
stockholders and groups of stockholders to contest corporate
elections, but if the promoters of such movements choose to
employ the costly modern media of mass persuasion, they should
look for reimbursement to themselves and to the stockholders
who are aligned with them. If the law be that they can be
recompensed by the corporation in case of success, and only in
that event, it will operate as a powerful incentive to persons
accustomed to taking calculated risks to increase this form of
high-powered salesmanship to such a degree that, action provok-
ing reaction, stockholders’ meetings will be very costly. , To the
financial advantages promised by control of a prosperous corpo-
ration, would be added the knowledge that the winner takes all
insofar as the campaign expenses are concerned. To the victor,
indeed, would belong the spoils.

The questions involved in this case assume mounting impor-
tance as the capital stock of corporations becomes more widely
distributed. To an enlarged extent the campaign methods
consequently come more to resemble those of political campaigns,
but, as in the latter, campaign expenses should be borne by those
who are waging the campaign and their followers, instead of
being met out of the corporate or the public treasury. Especially
is this true when campaign promises have been made that the
expenses would not be charged to the corporation.

Nothing which is said in this opinion is intended as any
reflection upon the motives of the insurgent group in instigating
this corporate contest, nor upon the management group. Ques-
tions of law are involved which extend beyond the persons and
the corporation presently before the court. It is the established
law of this State that expenditures may be incurred by manage-
ment limited to informing the stockholders fully and fairly con-
cerning the affairs and policies of the corporation, which may

ee = 137

well include an explanation of the reasons on account of which
its policies have been undertaken, nor is there any reason on
account of which stockholders who have neglected to sign proxies
through apathy may not be solicited so as to insure a quorum,
which would ordinarily occur in instances where there is no
contest, but beyond measures of this character, the purely
campaign expenses of a management group do not serve a
corporate purpose, and paying them is wlira vires. The same is
true of all of the expenses of insurgent stockholders.

The release given to J. Carlton Ward, Jr., by the authority
of his codirectors, could not have the effect of discharging
liability to which they were otherwise subject upon the theory
that it operated to release them as joint tort-feasors.

The judgment appealed from should be reversed so as to
direct respondent Fairchild to pay to the corporation the sum
of $118,448.78, with appropriate interest, representing the
moneys reimbursed to him by the corporation and, upon his
default, the respondent, Allis should be required to pay said
sum; respondents Fairchild and Allis should be required to pay
to the corporation the sum of $9,107.10, with appropriate interest,
representing the amount reimbursed to L. M. Bolton by the
corporation; and an interlocutory judgment should be entered
for an accounting to determine what part of the $133,966,
representing expenses incurred by the old board, was improperly
charged to the corporation and requiring the respondents
Wilson and McComas to pay to the corporation the sum thereof,
and the respondents Allis and Fairchild such amounts thereof as
were paid out after July 15, 1949, with costs of the action to the
plaintiff in all courts. ,

Conway, Ch. J., and Burxs, J., concur with Frozssan, J.;
Dzsmonp, J., concurs in part in a separate opinion; Van Vooruis,
J., dissents in an opinion in which Dyz and Fut, JJ., concur.

Judgment affirmed.

Epwarp Gzracaty, Jz., an Infant, by Epwarp Guracury, Sr., His
Guardian ad Litem, Appellant, v. Starz or New Yors,
Respondent. (Claim No. 30713.)

Argued April 15, 1955; decided July 8, 1955.

M. Maurice Chacchia for appellant. I. The Superintendent of
Public Works had no authority to abandon this section of the
highway. (City of Mount Vernon v. New York, N. H. é H.R. R.
Co., 232 N. Y. 309; Hughes v. Bingham, 185 N. Y. 847.) IT.
Service of copy of the order upon the Ontario County Board of
Supervisors was ineffectual: (a) To impose responsibility upon
the County of Ontario, and (b) to impose responsibility upon the
Town of Geneva for future maintenance of this section of the
highway. III. The conduct of the State of New. York, its
engineers and employees is inconsistent with its claim that this
highway was abandoned.

Jacob K. Javits, Attorney-General (John R. Davison and
Henry S. Manley of counsel), for respondent. I. The finding of
‘the courts below that ‘‘ the State of New York was free from any
negligence which caused or contributed to the happening of this
accident ’’ is conclusive in this court. (Canepa v. State of New
York, 306 N. Y¥. 272; Driwas v. Lekas, 292 N. Y. 204; Harrington
v. Harrington, 290 N. Y. 126; Sturman v. State of New York, 244
App. Div. 865, 269 N. Y. 627; Shaw v. State of New York, 196
Mise. 792, 278 App. Div. 871, 303 N. Y. 644; Griffin v. State of New
York, 250 App. Div. 244; O’Brien v. State of New York, 270 App.
Div. 877; Lyons v. State of New York, 274 App. Div. 1086, 299
N. Y. 593.) II. The record does not disclose any conduct on the
part of the State of New York, through its officers and employees,

inconsistent with its claim that it had duly divested itself of
responsibility. III. The procedure required by section 181 of
the Highway Law, as it read in 1926, was followed. (Isaac v.
Town of Queensbury, 277 N. Y. 87.)

Van Vooruis, J. The injured claimant was a passenger in an
automobile which went out of control on an abandoned section
of State highway. The question concerns what is the duty of
the State with respect to portions of State highways that have
been discontinued. In this instance, as Route 245 formerly
approached from the south the single main highway known as
Routes 5 and 20, it ran northeastward into an historical
thoroughfare known as the Preemption Road, at a location sev-
eral hundred feet south of the junction of the latter with Routes
5and 20. In 1926 this portion of Route 245 was relocated, by the
construction of a curve to the left (north) off from the old course
of the route at a distance of less than one mile before the latter
joined the Preemption Road, and the relocated course then pro-
ceeded north directly into Routes 5 and 20 at a point several
hundred yards west of the intersection of those routes with the
Preemption Road. Preemption Road thus ceased to be a link in
Route 245. This was one of those changes that have become
necessary to lengthen curves and avoid abrupt intersections,
so as to adapt old roads to rapid modern motor traffic.

Upon the day of this accident (May 12, 1949), three high school
students from Montour Falls, sixteen and seventeen years in
age, were riding in an automobile driven by one of them named
Charles Marquardt. He was a licensed operator. The automo-
bile belonged to Marquardt’s father. One of the other occupants
of the auto was plaintiff, Edward Geraghty, Jr. They had
driven south on Route 245 along its new course for a distance of
about three miles southerly from Routes 5 and 20 to a milk and
ice cream bar which was their destination.

In returning they reached the point where the new and
improved Route 245 diverged from the course of the old road.
At this location, as has been stated, the new highway bears to
the left whereas the old road continues straight ahead. The
driver of this car evidently knew that he was leaving Route 245,
and taking the old road. The new highway was of concrete,
marked by a solid white line in the center turning to the left,

a 191

and by the usual ‘‘ curve ’’ sign five hundred feet in advance
lof the bend. The curve was also indicated by white posts guard-
ling the circumference around the outside of the shoulder. These
facts are not disputed. Upon the other hand, there was nothing
to indicate that the old road had been closed or that vehicles
lwere not permitted to enter it. There were no ‘‘ Road Closed ’”
signs or barriers, showing that maintenance of the abandoned
section had been discontinued, and the gap between the white
guard posts around the circumference of the newly constructed
curve and the straight line of posts leading to the entrance of
the old road bore witness to its being open. The driver of this
auto evidently turned off from Route 245 so as to vary the
scenery in going to and from the milk bar. He admitted that
lhe knew that if he had continued on the concrete pavement he
would have re-entered Routes 5 and 20 where he left them. It
lis of no consequence that he did not notice the white line bending
to the left in the center of the concrete road, nor the curve sign
before reaching the curve. He considered that he had the right
to depart from the new course of Route 245 along the old road
and return to Routes 5 and 20 via the Preemption Road. Know-
ing that Route 245 veered to the left, he chose to take the other
road and in doing so assumed that it was passable. All of that
is evident from the testimony and the circumstances of the acci-
dent. The basis for negligence is that there were no signs,
barriers or warnings to indicate that the old road had been
discontinued and that, by some mischance, it had not been
maintained by the State, by the county or by the town. For
twenty-two years it had simply been left, as the sequel proved,
to the care of the elements alone.

The Court of Claims found that it was negligent to have per-
mitted this discontinued section of highway to have deteriorated
into the condition in which it was—‘‘ rough, broken and
unkept ’? with ‘‘ numerous holes and depressions’. Claimant
was found to have been free from contributory negligence.
These findings were not disturbed by the Appellate Division, and
are supported by evidence. But the claim was dismissed upon
the ground that responsibility for maintenance of this part of
the road no longer rested upon the State. That is the question
in the case,

The discontinued portion of this road was concededly an
Ontario County highway prior to 1910 when it became a State
road. From 1910 until 1926 the State maintained and repaired it.
When the change occurred in 1926, the State took some steps
to divest itself of its duty to maintain the discontinued portion.
The applicable statute was section 181 (now § 62) of the High-
way Law. It provided, as amended to that date; that ‘‘ When-
ever in the maintenance and repair of state and county highways
under the provisions of this chapter, the commission [State
Commission of Highways] shall have determined upon the
necessity of a change in location for the improvement of align-
ment or of dangerous conditions on a limited section of such
highway * * * the commission may proceed with such
improvement. * * * The commission shall cease to main-
tain the section of highway discontinued upon the completion of
the substituted section.”

Those were the material portions of statute in force when the
State attempted to abandon this stretch of road in 1926. Nothing
was said about what became of the abandoned portion of such a
road. Section 181 was later amended and renumbered (L. 1937,
ch. 739; L. 1944, ch. 515), so as to provide specifically that if such
an abandoned portion of highway had been located within a
village before it went on State maintenance it should revert to
the village, and in similar fashion to the town or county if it
had been a town or county highway. These amendments further
provided: ‘‘ The transfer of maintenance of a section of high-
way and of any bridge and culvert thereon, to any county or
counties, town or towns, or village or villages as herein provided,
shall become effective upon the mailing of a certified copy of such
official order [of discontinuance by the State Superintendent of
Public Works] to the clerk or clerks of the board or boards of
supervisors of the county or counties, to the town clerk or clerks
or to the clerk or clerks of the village or villages, as the case
may be.’’

These amendments are held to be declaratory of the substance
of the earlier statute. The dispute in the instant case (which
presents a question of law) arises due to the circumstance that,
upon the discontinuance of this section of road by the State, the
Superintendent of Public Works made an order of discontinn-
ance pursuant to section 181 of the Highway Law which was sent

Le 198

to the Ontario County Board of Supervisors, but the last para-
graph of it stated: ‘¢ Onpsrep: That such section of highway
be and it is hereby turned over to the Town of Geneva, Ontario
County, for future maintenance and repair.’’ (Italies supplied.)

In Isaac v. Town of Queensbury (277 N. Y. 37, 48), section 63
of the Highway Law was before the court concerning grade
crossing eliminations. In that instance, the elimination had
resulted in the abandonment of a portion of State highway which
crossed the railroad tracks at grade, and the substitution of an
altered route beneath the tracks. A fence had been constructed
across the old road at the former grade crossing, into which
an automobile ran at night. This condition amounted to a
nuisance, but the question was presented who was liable for
the nuisance. The court said at page 48: ‘‘ Under section 63,
the portion of the highway eliminated reverted to the town upon
completion of the elimination work only where a determination
had been made to the effect that it no longer served a useful
purpose as a part of the State highway system. Notice of such
determination was required to be given to the town. Although
the section contained no provision for notice, inasmuch as the
determination affected the rights of persons and property,
reasonable notice was required.”’ (Italics supplied.)

It is the contention of the State that under former section 181
of the Highway Law the mere cessation of maintenance was
sufficient at the time when the substituted road was completed,
that the State did not need to abandon the highway to any other
governmental unit or authority. Claimant, upon the other hand,
contends that it was necessary to have given notice to the County
of Ontario that State maintenance had ceased and that county
maintenance was to begin.

Inasmuch as this was a county highway before its accession ‘to
the State system in 1910, in point of law it reverted to Ontario
County after being discontinued in 1926, notwithstanding the
absence of any specific clause to that effect in the statute then in
force. But, as was held in the Town of Queensbury case (supra),
more than this was necessary in order to absolve the State from
its duty to the traveling public. The State had to notify the gov-
ernmental unit to which the duty of maintenance was being
transferred before the State could be relieved of all responsi-
bility. The notiee which was given to the Board of Supervisors

L |

194 ee

of Ontario County by transmitting the order of the Superin-
tendent of Public Works, would have been adequate except for its
last paragraph, which stated that this portion of the road was to
be maintained by the Town of Geneva. In view of that express
admonition, it would not be expected that the Ontario County
Highway Department would assume maintenance contrary to
the direction of the State Superintendent.

The town clerk’s records were produced, which showed that
the Town of Geneva had received no notice from the State con-
cerning the abandonment of this section. The behavior of the
State at no time put the town on notice of the transfer to it of
a road which had never before been under its control or super-
vision as a town highway.

Respondent argues that everyone is presumed to know the
law, and that. the County of Ontario, at whose Board of Super-
visors’ meeting the State Superintendent of Public Works’
order was read, should have known that the final paragraph aban-
doning this section of road to the town was erroneous and carried
no foree or effect. Although it may well be that the State could
have divested itself of the duty of maintenance if the other parts
of the Superintendent’s order had been transmitted to the
Ontario Board of Supervisors, the common-sense interpretation
is that the last paragraph nullified the effect of notice. More was
necessary to relieve the State than mere transfer of the duty of
maintenance by operation of law. If notice was required, as was
held to be necessary in the Queensbury case (supra), then a
notification to the county that this section of highway had been
abandoned would be meaningless if coupled, as it was here, with a
direction to the county to do nothing about it for the reason that
the obligation of maintenance was imposed elsewhere. That is
particularly true since even the State Engineer’s office at that
time was unaware of where the duty of maintenance would vest.
The State Engineer, on whose recommendation the State Super-
intendent of Public Works acted in ordering the discontinuance,
testified that he did not know who was obligated to undertake
maintenance of the abandoned portion of this highway. The
final paragraph of the State Superintendent of Public Works’
order destroys its effect as notice to the county to undertake
maintenance, and the Town of Geneva was charged with no
obligation in regard to it whatever. Consequently, it is held, the

ee 195
ee

State did not divest itself of the legal duty of maintenance, and
must respond in damages for claimant’s injuries.

The judgment of the Appellate Division and that of the Court
of Claims should be reversed, with costs in all courts, and the
case remitted to the Court of Claims for an assessment of dam-
ages and for other proceedings not inconsistent with this
opinion.

Desmonp, J. (dissenting). The State took over in 1910 and
continued till 1925 the maintenance of a certain county highway
in Ontario County. In 1925, the State, to eliminate a dangerous
curve in that road, replaced about 1,100 feet of the old road with
a new, differently located piece of road. The State then discon-
tinued (as it had not only the right but the statutory duty to do,
as we shall see) maintenance of the old strip. Since that strip
was part of a county highway, the duty to keep it in repair
or close it, could not, when the State so abandoned it, go
anywhere except back to the County of Ontario. The State
Superintendent of Public Works, in December, 1926, after the
new section had been finished and opened, sent to the Clerk of
the Ontario County Board of Supervisors a copy of an official
order of the State Public Works Department, which order plainly
stated that ‘‘ the State shall cease to maintain said section upon
the completion of the substituted section ’’. That notice to the
Board of Supervisors specifically quoted and called attention to
the then section 181 of the Highway Law which mandated in such
situations that the State should ‘‘ cease to maintain * * *
[said] section * * * upon the completion of the substituted
section’’. Ontario County was thus officially put on notice
of a public statute and an official order which, by requiring
the State to cease maintaining the old section, necessarily
meant that all future public duties as to that section of road
would automatically pass to the County of Ontario. Since
Ontario County owned the highway, such duties could not there-
after be lodged elsewhere. The State had lawfully, finally and
forever (as both courts below held) divested itself of all responsi-
bility for repair and maintenance of the old or ‘‘ cut off ’’ road.
Never thereafter did the State have, in fact or law, anything to
do with that piece of highway.

Despite all that, the State is being held to damages because
the dangerous condition of the road caused an accident, twenty-

196 ee

two years later. The sole basis for that result is a typographical
error found in the notice (supra) which the State Superintendent
sent to the County of Ontario in 1926. The last paragraph
thereof said that the cut-off section of highway was being turned
over to ‘‘ Town of Geneva, Ontario County ”’ for future mainte-
nance and repair. That was a mistake, since any such turnover
or turnback of a county highway had to be to the County of
Ontario, not to any town. But the error could not have misled
anyone and there is no proof or finding that it did. Surely the
county knew of its ownership of its own roads. Actually, as
the majority opinion herein points out, the then statutes did not
provide for any notice at all to be given by the State. But the
courts (Isaac v. Town of Queensbury, 277 N. Y. 87, 48) held,
in 1988,'that ‘‘ inasmuch as the determination, affected the rights
of person and property, reasonable notice was required.’”’? In
other words, the State, having assumed the care of a road, could
not, secretly and without notice, stop such care, otherwise the
public might be left without protection. But, under Isaac v.
Town of Queensbury (supra), no particular kind of notice was
needful, so long as it was ‘‘ reasonable ’’. Certainly, the notice
given by the State to the Town of Queensbury in the Isaac case
and there held to be sufficient, was no fuller or more informative
than the notice here given to the County of Ontario. All the
notice the Town of Queensbury got was a copy of a Public Service
Commission order in a proceeding to which the town was a party,
which order, among many other things, provided that the street
in question should be discontinued. The State Department of
Public Works as such gave the Town of Queensbury no notice at
all until after the Isaac accident (see 277 N. Y., p. 49). Nor did
the notice given prior to the accident in the Isaac case in the
form of a Public Service Commission order, say that the reverter
would be to the town. From all that it necessarily follows that
the notice given in the present instance to the County of Ontario,
was-ample as to the only fact of which notice had to be given
(see the Isaac opinion, 277 N. Y., p. 50) — that is, notice that the
State was abandoning the old strip. And in the present case
we had another and much more informative kind of notice not
present in the Isaac case (supra). That better and fuller notice
in our case consisted of the known and obvious fact that after
giving the written notice in 1926 the State ignored the cut-off

| 197

strip entirely for more than twenty years prior to this accident
and instead took care of the new, substituted piece of highway.
The order appealed from should be affirmed, with costs.

Conway, Ch. J., Frozssen and Burks, JJ., concur with Van
Vooruis, J.; Desmown, J., dissents in an opinion in which Dyn
and Fuxp, JJ., concur.

Judgments reversed, ete.
Le |

Anna B. Karzman, Appellant, v. Alrwa Lave Insuranon Co.,
Defendant, and Miswm Karzman, Respondent.

Argued May 25, 1955; decided July 8, 1955.

198 ee
ee

ee

Murray I. Sommer for appellant. I. The Statute of Frauds is
inapplicable to constructive trusts. (Lightfoot v. Davis, 198
N. Y. 261; Falk v. Hof'man, 233 N. Y. 199;-Foreman v. Foreman,
251 N. Y. 287; Hquity Corp. v. Groves, 294 N. Y. 8; Latham v.
Father Divine, 299 N. Y. 22, 299 N. Y. 599; Pattison v. Pattison,
301 N. Y. 65; Beatty v. Guggenheim Exploration Co., 225 N. Y.
380; Cassidy v. Cassidy, 283 App. Div. 618; Blanco v. Velez, 295
N. ¥. 234; Fischer v. New York Sav. Bani, 281 App. Div. 747;
Mitchell v. Mitchell, 265 App. Div. 27, 290 N. Y. 779; Considine
v. Considine, 255 App. Div. 876; Bernstein v. Prudential Ins. Co.
of America, 204 Misc. 775.) IL. Delivery of the policy obviates
the objection of the Statute of Frauds. (Matter of Pastore, 155
Misc. 247; Matter of Van Alstyne, 207 N. Y. 298; Jackson v.
Twenty-Third St. Ry Co., 88 N. Y. 520; Marcus v. St. Lowis Mut.
Life Ins. Co., 68 N. ¥. 625; McGlynn v. Curry, 82 App. Div. 431;
Ridden v. Thrall, 125 N. Y. 572; Loucks v. Johnson, 70 Hun 565;
Jacobs v. Strumwasser, 84 Mise. 28; Opite v. Karel, 118 Wis. 527;

McEwen v. New York Life Ins. Co., 42 Cal. App. 183; Matter of
Chryssikos, 185 N. J. Eg. 451.) III. Special Term properly

| 199
pan

denied the motion for summary judgment. (Joehl v. Tricarico,
271 App. Div. 898; President & Director of Manhattan Co. v.
Monogram Associates, 276 App. Div. 766; American Agric.
Chem. Co. v. Gatewood, 260 App. Div. 861; Matter of Loftus, 193
Mise. 704; Jacobson v. Jacobson, 268 App. Div. 770; First Trust
& Deposit Co. v. Dent, 263 App. Div. 1058; Chelsea Hach. Bank
v. Munoz, 202 App. Div. 702.)

Sidney Orenstein, David Drechsler and Herbert Ferster for
respondent. I. The alleged agreement upon which plaintiff
relies is unenforcible under the provisions of subdivisions 1 and
9 of section 31 of the Personal Property Law. (Bayreuther v.
Reinisch, 264 App. Div. 138, 290 N. Y. 553; Meltzer v. Koenigs-
berg, 277 App. Div. 1050, 302 N. Y. 523; Matter of Ditson, 177
Misc. 648; Coler v. Coler, 271 App. Div. 877, 297 N. Y. 488;
Matter of Douglas v. Irving Trust Co., 169 Mise. 716, 256 App.
Div. 1070; Matter of Seiler, 258 App. Div. 303; Mitchell v.
Mitchell, 265 App. Div. 27, 290 N. Y. 779; Ward v. New York Life
Ins. Co., 225 N. Y. 314; Fischer v. New York Sav. Bank, 281 App.
Div. 747 ; Rubin v. Irving Trust Co., 305 N. Y. 288.) II. A policy
of life insurance cannot be assigned without a writing, and
delivery is immaterial in the absence of a writing. (Matter of
Adler v. Levene, 107 Mise. 574, 191 App. Div. 40; Bernstein v.
Prudential Ins. Co. of America, 204 Misc. 775.) II. The theory
of constructive trust is inapplicable. (Wooley v. Stewart, 222
N. Y. 347; Wojtkowiak v. Wojtkowiak, 273 App. Div. 1052;
Cassidy v. Cassidy, 283 App. Div. 618.) IV. The answering
affidavit establishes that there is no triable issue of fact.
(General Investment Co. v. Interborough R. T. Co., 235 N. Y.
133; Gnozzo v. Marine Trust Co. of Buffalo, 258 App. Div. 298,
284 N. Y. 617; Dodwell & Co. v. Silverman, 234 App. Div. 362;
Anderson v. City of New York, 258 App. Div. 588.)

Albert Hirst for New York State Association of Life Under-
writers, amicus curie, in support of respondent’s position. I.
Amicus curie sponsored subdivision 9 because of an impressive
line of court decisions. (Hamlin v. Stevens, 177 N. Y. 39; Matter
of Ditson, 177 Misc. 648; Matter of Block, 258 App. Div. 342;
Considine v. Considine, 255 App. Div. 876; Rosseau v. Rouss, 180
N. ¥. 116; Ward v. New York Life Ins. Co., 225 N. Y. 314;
Mitchell v. Mitchell, 177 Mise. 1050, 265 App. Div. 27, 290 N. Y,

200 ee
nena)
779.) I. Our courts always have been emphatic in condemning
claims asserted for the first time after death. (Hamlin v.
Stevens, 177 N. Y. 39; Matter of Ditson, 177 Misc. 648; Rosseau
vy. Rouss, 180 N. Y. 116; Considine v. Considine, 255 App. Div.
876.) IIL. Neither part performance nor full performance by
plaintiff is sufficient to take the alleged contract out of the
operation of the Statute of Frauds. Nothing short of full
performance by both parties will do that. (Burns v. McCormick,
233 N. Y. 230.) IV. Neither full nor part performance nor
the alleged delivery to her of the insurance policy can take
plaintiff’s case out of the statute, subdivision 9 of section 31 of
the Personal Property Law.

Dyz, J. The plaintiff’s complaint has been dismissed pursu-
ant to rule 118 of the Rules of Civil Practice, on the ground that
the cause of action is barred by the Statute of Frauds.

The plaintiff is the widow of David Katzman, deceased. The
defendant is the sister of the deceased. They each claim the
proceeds of a $5,000 policy on the life of the deceased, issued by
the defendant Aitna Life Insurance Company — the widow, on
the ground that as the original beneficiary named in the policy
pursuant to an oral agreement, she is the victim of fraud and
deceit — and the sister, on the ground that she is the presently
named beneficiary. Pursuant to court order the Insurance
Company has paid the net proceeds of the policy to the treasurer
of the City of New York and has no further interest in the suit.

The main question raised by the motion is whether the action
is barred by the Statute of Frauds which renders unenforcible
any ‘‘ contract to assign or an assignment * * * of a life
* * * insurance policy * * * orapromise * * * to
name a beneficiary of any such policy ’’ unless the agreement or
some note or memorandum thereof is in writing. (Personal
‘Property Law, § 31, subd. 9.)

The allegations of the complaint, which for the purposes, of
this motion we accept as true, may be briefly summarized, viz.:

That plaintiff and decedent were married June 28, 1927; that
they lived happily together until the marriage ended by the
husband’s death; that much of the time during their married life
the husband was unemployed and depended for his support
largely on the wife’s earnings; that because of this adverse

economic status, they were unable to put aside any savings for
sickness and death expenses, so the husband and wife agreed on
or about May 15, 1944 — after some seventeen years of married
life — that the husband would take out a policy on his life and
name the wife as beneficiary if she, the plaintiff, would pay the
premiums. The application was made on that date. The policy
was issued and plaintiff was named beneficiary and the policy
delivered to her. Thereafter she paid the whole or a substantial
part of the annual premiums from her earnings. When the
husband died accidentally on July 13, 1953, she made arrange-
ments for his funeral and burial in reliance on the avails of the
policy. After delivery of the policy to the plaintiff, as alleged
in the complaint: ‘‘ without the knowledge and consent of the
plaintiff herein, the said deceased, David Katzman, at the behest
of and in conspiracy with his said sister, Minnie Katzman,
surreptitiously withdrew and took from the possession of the
plaintiff the aforesaid policy of life insurance and allegedly
caused the beneficiary on or about the 21st day of December,
1950, to be changed from the plaintiff herein to the defendant,
Minnie Katzman, sister of the insured.’’

By way of relief, the plaintiff demands judgment that she be
declared the legal owner of the policy; that the proceeds be paid
to her and that the defendant sister-in-law be declared a trustee
for and on behalf of the plaintiff.

The defendant filed an answer denying all of the material
allegations of the complaint and set up the Statute of Frauds as
an affirmative defense, demanding that the proceeds be paid to
her as named beneficiary. Defendant then made a.motion for
summary judgment, in support of which she showed by affidavit,
that on or about December 21, 1950, the deceased executed a
request for a change of beneficiary in which he changed his
beneficiary to ‘‘ Minnie Katzman, sister of the insured, if she
survives the insured, otherwise to Rose Katzman, sister of the
insured, if she survives the insured, otherwise to the executors or
administrators of the insured.’’ This request was duly accepted
and countersigned by the Insurance Company on December 22,
1950, and indorsement of such change of beneficiary made on
the policy. The policy had reserved to the decedent the right
to change the beneficiary at any time. ,

Special Term denied defendant’s motion for summary judg-
ment on the ground that issues of fact were presented ‘‘ which
cannot be summarily disposed of by affidavits but rather should
await complete determination by trial.’? The Appellate Division
placed its decision on the ground that the action was barred by
the statute.

The power of the court to treat a wrongdoer as a trustee de
son tort or trustee ex maleficio is beyond question (Lightfoot v.
Davis, 198 N. Y. 261; Falk v. Hoffman, 233 N. Y. 199). A con-
structive trust is ‘‘ the formula through which the conscience of
equity finds expression ’’ (Beatty v. Guggenheim Exploration
Co., 225 N. Y. 380, 386; Meinhard v. Salmon, 249 N. Y. 458).
(For an interesting discussion see Warren in 41 Harv. L. Rev.
309.) Constructive trusts are created by equity ‘‘ whether the
evidence on which they are based is oral or written, and whether
the property involved is real or personal ’? (Bogart on Law of
Trusts [Hornbook Series, 3d ed., § 78, p. 332, 1952]), such, for
instance, as when the device of a constructive trust is needed to
protect the rightful party against the acts of a wrongdoer.
Violation of a confidential relation has produced injury to the
survivor of the relationship as to personalty, such as proceeds
of a war risk policy (Blanco v. Velez, 295 N. Y. 224) and realty
(Foreman v. Foreman, 251 N. Y. 237) or has been accomplished
by will (Latham v. Father Divine, 299 N. Y. 22) or by agreement
(Hartkopf v. Hesse, 49 N. Y. S. 2d 162) or superior knowledge
(Cassidy v. Cassidy, 283 App. Div. 618; Stephens v. Evans,
15 N. ¥. 8. 2d 909).

It is undeniable that subdivision 9 of section 31 of the Personal
Property Law, enacted by chapter 104 of the Laws of 1943,
effective March 11, 1943, under the sponsorship of the amicus
curie with the approval of the Insurance Department, was
designed as the insurance counterpart of section 347 of the Civil
Practice Act to prevent fraud against a deceased person and to
end litigation based upon unsupported oral agreements with
decedents ‘‘ to assign.’’ or to ‘‘ name beneficiaries ’’. However
pertinent such enactment may be to situations depending for
proof solely upon oral promise, it is not authority for dismissing
the within complaint for insufficiency. Here we are not dealing
with a cause of action based on an oral promise to give property
in the future as in Matter of Ditson (177 Misc. 648) ; Rosseau v.

Dn 203

Rouss (180 N. Y. 116), or to name a beneficiary (Ward v. New
York Life Ins. Co., 225 N. Y. 314), but rather to prevent consum-
mation of a scheme between the insured and his sister to undo
surreptitiously that which he, in fact, had done openly just as
he had agreed to do. In this instance the plaintiff’s case does
not depend solely on an executory oral promise ‘“‘ to assign ”’
the policy for, concededly, the policy when originally issued was
delivered to her under circumstances indicating an intent ‘‘ to
assign’? same to her. An insurance policy is but a chose in
action (Matter of Pastore, 155 Misc. 247) and delivery to the
assignee or donee with intent to vest title is essential to a valid
gift (Matter of Van Alstyne, 207 N. Y. 298; Jackson v. Twenty-
Third St. Ry. Co., 88 N. Y. 520; Marcus v. St. Louis Mut. Life
Ins. Co., 68 N. Y. 625; McGlynn v. Curry, 82 App. Div. 431) and
that delivery with such an intent also accomplishes a valid assign-
ment (Ridden v. Thrall, 125 N. Y.572; Loucks v. Johnson, 70 Hun
565). Delivery in this instance was not equivocal, but was a
deliberate and intentional act to carry out the terms of an
entirely natural and probable transaction, that is, an intent to
protect the wife, if she survived, from the burden of expense
incident to last illness and death of husband. The naming of a
wife as beneficiary of a policy arouses no suspicion. It is a
normal and natural thing to do. Here the complaint avers an
intent to make the wife beneficiary and when the husband did,
in fact, do just that, and delivered the policy to her, an effective
inter vivos gift, or—in this setting —assignment was made
(Jacobs v. Strumwasser, 84 Misc. 28; Young v. Prudential Ins.
Co., 181 N. Y. S. 968; Opite v. Karel, 118 Wis. 527; McHwen v.
New York Life Ins. Co., 42 Cal. App. 133; Matter of Chryssikos,
135 N. J. Hq. 451) and such a transaction is not impaired by the
Statute of Frauds (Bernstein v. Prudential Ins. Co., 204 Misc.
715; John Hancock Mut. Life Ins. Co. v. Sandrisser, 95 N. Y. S.
2a 899).

The respondent and the amicus curiae stress with great empha-
sis a statement made by our learned brother, Judge Frozssst,
when he sat as a Supreme Court Justice in Siegel v. Tankleff
(95 N. Y. 8. 2d 178, 182). There a widow claimed proceeds of a
policy against decedent defendant’s ‘‘ girl friend’, an after-
named beneficiary. The widow was allowed recovery on the
theory that what she claimed the insured did ‘‘ was quite

204 ee
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natural and probable under the circumstances. He had named
her as beneficiary. He gave her possession of the policy.’’
Because delivery had occurred prior to the effective date of the
statute, Judge Frousseu’s statement that ‘‘ an oral assignment
or gift of a life insurance policy prior to March 11, 1943, when
subdivision 9 was added to Section 31 of the Personal Property
Law, by manual delivery of the policy to the assignee or donee
with intent to make a gift thereof is valid ’’—has been seized
upon as indicating a contrary result had delivery occurred
subsequent to the statute. We do not believe the language, when
read in its setting, bears such a construction — and even when
read out of context—it cannot very well be reconciled with
long-established decisional law respecting inter vivos gifts when
delivery is accompanied by intent. The date of the delivery can
be of little importance so long as it appears that it in fact
occurred. Subsequent lower court cases have been decided with-
out reference to the effective date of the statute (cf. Bernstein v.
Prudential Ins. Co. and John Hancock Mut. Life Ins. Co. v.
Sandrisser, both cited above).

The case of. Fischer v. New York Sav. Bank (281 App.. Div.
747), relied on by the majority of the court below, is distinguish-
able on its facts. There the deceased, pursuant to an oral
agreement, named Fischer, a creditor, as beneficiary in a policy
onhis life. Subsequently the decedent named his wife beneficiary
and, as a widow, her claim to the proceeds was upheld. In that
case there was no delivery of the policy, no payment of premiums
and no confidential relation such as springs from the marriage
relation to support and give credence to the alleged oral
agreement.

All that has been said pertaining to the words ‘‘ to assign ”’
is equally applicable to the statutory phrase ‘‘to name a
beneficiary ’’.

This view does no violence to the general proposition that
nothing short of full performance by both parties will operate
to take the alleged contract out of the operation of the statute
(Burns v. McCormick, 233 N. Y. 230; Bayreuther v. Reinisch,
264 App. Div. 138, affd. 290 N. Y. 553; Meltzer v. Koenigsberg,
99 N. Y. 8. 2d 143, affd. 277 App. Div. 1050, affd. 302 N.Y. 523).
That rule must yield to the demands of justice, particularly,
when ostensibly such statute is being used to preserve the fruits

ee 205
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of apparent wrongdoing in the hands of the wrongdoer (ef.
Latham v. Father Divine, supra). :

Here the husband’s action under the circumstances was sus-
pect. What motivated the husband to eliminate the name of
his wife as beneficiary does not appear but, nonetheless, it had
the consequence of perpetrating a fraud upon his wife with
whom he had spent his entire married life in apparent harmony,
mutual respect and confidence. On the face of the complaint, the
husband committed an inexcusable wrong, which, if established
by the weight of the credible evidence, the court has the equitable
power — as well as the duty — to correct.

The widow should be allowed her day in court to show, if she
can, that she is the victim of fraud and wrongdoing. As in any
lawsuit, the burden of proof rests with the plaintiff widow to
establish the allegations of her complaint. If the statute is
to be used as a shield, it is only right that the court should know
whether it is protecting a wrongdoer. On this record a triable
issue of fact is presented which should not be summarily dis-
posed of by motion but only after a plenary trial. .

The judgment of the Appellate Division should be reversed,
the order of Special Term reinstated, and the matter remitted to
Special Term for further proceedings in accordance with the
opinion herein, with costs to abide the event.

‘Fur, J. (dissenting). The question presented by this appeal
is whether plaintiff may maintain an action on the oral agree-
ment, allegedly made by her late husband, in the face of subdi-
vision 9 of section 31 of the Personal Property Law. I do not
see how she may, for that subdivision, insofar as here relevant,
provides that

“‘a contract to assign or an assignment * * * ‘of a

life * * * insurance policy, ora promise * *'* to
name a beneficiary of any such policy ”’ oo

is ‘‘ void ’? unless in writing and subscribed by the party to be
charged. Concededly, there is in this case no writing or
memorandum of any sort whatsoever. .
The purpose of subdivision 9, as plain as its language, was to
par all claims based on oral evidence of an assignment, or of a
promise to name a beneficiary, of a life insurance policy. ‘To
allow such claims, it was recognized, would introduce great

206 ee
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uncertainty into the disposition of life insurance proceeds; and,
by opening the door to perjured testimony and fraudulent claims,
it might work to defeat the intent of the deceased more often
than to effectuate it. (See, e. g., Memorandum submitted to
Governor by Superintendent of Insurance, in connection with bill
adding subd. 9.) In requiring a writing, therefore, the legisla-
ture gave effect to the wise public policy favoring certainty in
the rights of a deceased’s named beneficiaries — the same policy
- which this court voiced some 50 years ago in Hamlin v. Stevens
(177 N. Y. 39, 47-50), when it wrote that oral agreements, such
as the one before us, ‘‘ are easily fabricated and hard to dis-
prove, because the sole contracting party on one side is always
dead when the question arises. They are the natural resort of
unscrupulous persons who wish to despoil the estates of deced-
ents [pp. 47-48]. * * * Such contracts are dangerous.
They threaten the security of estates and throw doubt upon the
power of a man to do what he wills with his own [p. 50].”’

Whether plaintiff’s arrangement with her husband be con-
sidered an assignment, a promise to assign or a promise to name
a beneficiary, it is precisely what, in express terms, the statute
renders void. And it matters not, in the words of subdivision 9,
whether it was ‘‘ with or without consideration ’’ to the promisor,
in this case, the husband. Plaintiff wife seeks to avoid the
inexorable force of the statutory language, first, by urging that
her husband made a valid gift of the policy through manual
delivery, and, second, by invoking the doctrine of constructive
trust. We find no aid for her position in either theory, for both
fly in the face of subdivision 9. To permit that provision to be
by-passed would, in effect, be to write it out of the statute of
frauds.

Delivery, without a writing or other signpost, is equivocal and
ambiguous, and the purpose of the legislation, the policy under-
lying it, would be entirely frustrated were we to say that the
requirements of the statute could be avoided by delivery. Upon
the death of the insured, the policy must, of necessity, come into
the hands of some other person. If that individual, though not
the beneficiary named in the policy, were permitted to bring an
action based on an oral assignment, by merely asserting delivery,
the doors would again be opened wide to perjury and fraud,
for the action would still be based on parol evidence, the very

P| 207
rns

thing that the statute, with its insistence on a writing, was
designed to prohibit. Indeed, plaintiff is not even in possession
of the policy at the present time, and there is nothing more than
her oral assertions to lend any color or support to her claim of
delivery; there is nothing more, in short, than just the parol
evidence of an assignment which the statute categorically pro-
scribes. The conclusion is inescapable that the statute means
what it says, that it makes no exception for delivery, but voids
any assignment or gift of a policy which is not evidenced by a
writing.

Nor is there any place here for the doctrine of constructive
trust. While plaintiff’s account of the transaction, if true, may
arouse our sympathy, that surely is not sufficient reason to
ignore the statute of frauds. We misconceive the constructive
trust doctrine if we were to apply it in this case to overcome
the statute. (Cf. Meltzer v. Koenigsberg, 302 N. Y. 523, affg.
277 App. Div. 1050.) In point of fact, it appears that the provi-
sion in question was passed to prevent the very type of claim now
being advanced by plaintiff. (See, e. g., Mitchell v. Mitchell,
290 N. Y. 779, affg. 265 App. Div. 27, which was followed by
L, 1948, ch. 104, adding subd. 9.)

Claims asserted in opposition to a statute of frauds are, in
the very nature of things, frequently of an appealing character,
and the present one is undoubtedly no more so than many that
will arise in the future. We may not, by judicial construction,
repeal a plainly worded provision because it may appear to
operate against a dutiful wife or because it may seem to work
ahardship. The simple fact is that the statute in terms voids
every oral assignment of a life insurance policy and every oral
promise to name the beneficiary of such a policy. There is
neither warrant nor justification for a court to dispense with the
legislative requirement of a writing. The alleged agreement
being oral is unenforcible. The Appellate Division was eminently
correct in granting defendant’s motion for summary judgment.

Corway, Ch. J., Frozssen and Burge, JJ., concur with Dvr, J.;
Fur, J., dissents in an opinion in which Desmonp and Van Voor-
us, JJ., concur.

_ Judgment reversed, etc.

Tue Proriz or tum Stare or New Yorn, Respondent, v.
Lzonarpo Sauemi, Appellant.

Argued June 9, 1955; decided July 8, 1955.

| 209
mm!

Jacob Shientag and Rudolph Stand for appellant. I. James
Forlenza was not at the hospital to receive any dying declara-
tion. II. The deceased could not and did not make any dying
declaration. III. The defendant was deprived of due process
of law under the Federal and State Constitutions in connection
with the exhumation proceedings.

Frank 8. Hogan, District Attorney (Charles W. Manning and
Richard G. Denzer of counsel), for respondent. I. The motion
for reargument of the appeal should be denied. (People v.
Patrick, 182 N. Y. 181; People v. Bonifacio, 119 App. Div. 719,
190 N. Y. 150.) IL. The failure to produce the evidence at the
trial—and before the day of judgment —was owing to want
of diligence. III. The alleged newly discovered evidence was
of a cumulative nature and, as such, could not be a proper basis
for a motion for a new trial. IV. The evidence adduced at the
hearing, far from probably changing the jury’s verdict, would
have made it easier for the jury to conclude that defendant was
guilty. V. As to the propriety of the exhumation proceedings,
defendant could not have been prejudiced by an examination
revealing the actual physical facts.

Dyn, J. On March 12, 1954, we affirmed by a divided court this
defendant’s appeal from a judgment of the Court of General
Sessions of the County of New York (Goxpsrun, J., and a special
jury) rendered June 24, 1953, upon a verdict convicting defend-
ant of the crime of murder in the first degree and from an order

210 Lee
re

of said court made June 17, 1953, following a hearing, denying
defendant’s motion for a new trial on newly discovered evidence
(People v. Salemi, 306 N. Y. 863). On June 1, 1955, we granted
defendant’s motion for a reargument of his appeal so that we
might review an order of the Court of General Sessions made by —
Honorable Jonan Goxpstsin, following a hearing denying
defendant’s motion for a new trial on newly discovered evidence
(People v. Regan, 292 N. Y. 109; People v. Dunn, 298 N. Y. 706;
People v. Stein, 303 N. Y. 627). By this means we are able to
test the new matter as if it had originally been a part of the main
record. We have done that in this instance.

Briefly, the record shows that at about 8:40 p.m., February
26, 1952, Walter Forlenza was shot and fatally wounded as he
sat alone at a table in the dining room of the Belvedere Bar and
Grill located at 2056 Second Avenue between 105th and 106th
Streets, Borough of Manhattan, New York City; two bullets
from a .32 calibre pistol were fired at close range. He died about
9:00 p.m. the following evening, February 27, 1952, while under-
going an emergency operation for the removal of one of the
bullets that had lodged near and partially severed the spinal
cord. In the confusion following the shooting, the assailant, with
a pistol in his right hand, ran out and disappeared. The defend-
ant was suspected and widely sought. Some ten weeks later and
on May 14th, accompanied by his counsel, he voluntarily
surrendered himself to the District Attorney. Thereafter and on
June 19, 1952, the Grand Jury of the County of New York
returned an indictment accusing the defendant of the crime of
common-law murder. The trial was held in the Court of General
Sessions before Honorable Jonan Goxpsrurn and a special jury
commencing November 12, 1952. At the trial the People did not
prove motivation but did show that the defendant and his
victim for a long period of time had been friends and acquaint-
ances and that there had been ‘‘ argument ’’ from which the
jury could properly infer that defendant had a grievance against
decedent. Identification was furnished by two witnesses present
at the time and both of whom knew the defendant, one Paul R.
(Whitey) Janson, a patron sitting at the bar, positively
identified the defendant as the man whom he had seen standing
over the deceased with a gun in his hand immediately after the
shooting — the other, Andrew Bertorelli, a part owner of the

| 211
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tavern, placed the defendant in the bar a few minutes earlier.
In addition, the People offered as a dying declaration, and it was
so received, a conversation had between James Forlenza and the
deceased a few hours before he died in which the deceased
mamed the defendant as his assailant. Other witnesses were
called to show flight or concealment to account for defendant’s
disappearance for upwards of ten weeks. The defendant did
mot take the stand in his own behalf. He relied on his plea of
mot guilty and his defense of an alibi furnished by witnesses
who placed him near a restaurant in Queens at about the time
lof the shooting. Defense counsel attempted to discredit, on
cross-examination, the reliability of the People’s witnesses. In
lan effort to contradict and impeach as a falsity the dying
declaration, the defense called Evelyn Forlenza to testify that he
ad told her he did not know who shot him. On November 20,
1952, the jury rendered a verdict of guilty as charged in
the indictment. Prior to sentence which had been set down
or December 12, 1952, counsel for the defendant was advised
yy the court, as had already appeared on the trial, that while
the witness Janson was being held in prison as a material
itness and two days before he testified at the trial he had
rammed his head into the bars of his cell inflicting a severe gash
in his sealp requiring eight stitches to close. Thereafter he was
lodged in a hotel under guard; that on the evening following the
coming in of the verdict Janson had been sent to Bellevue for
observation as to his mental condition which was then described
s ‘‘ psychotic ’’. On December 4, 1952, he was committed to
he Pilgrim State Hospital for treatment. The court postponed
sentence apparently for the purpose of allowing counsel for the
lefendant to look into the matter and at the same time advised
counsel that the hospital records would be made available to him
‘or use in preparing a formal motion. On March 12th, nearly
‘our months after the verdict, the defendant formally moved to
set aside the verdict and for a new trial based on two grounds,
‘st that Janson was mentally incompetent at the time he
estified and secondly that new evidence had been discovered
supporting defendant’s claim of innocence.
The court permitted the case to be reopened for the purpose of
receiving evidence bearing on the defendant’s contentions.
earings were held beginning May 19, 1952, at which time the

212 |
ee

defendant called a psychiatrist to testify that in his opinion
Janson was mentally incompetent at the time he testified. The
expert concededly had never personally examined the witness
Janson. He based his opinion upon Janson’s trial testimony,
statements made by him to examiners at the mental hospital as
contained in the hospital records, and Janson’s self-inflicted
injury. The People’s expert, Dr. Lichtenstein, who had examined
Janson prior to his being called to testify at the new trial, gave
as his opinion that Janson was sane at the time of testifying.

At the main trial Janson, who knew both defendant and the
deceased and had been present in the Belvedere on the night in
question at the time of the shooting, identified the defendant as
the assailant. The matter developed by the defense at the new
trial hearing to show that Janson at the time he testified was
moody and depressed both before and after the suicide attempt,
was not new matter at all, but had been before the court and
jury on the main trial, The suicide attempt was there brought
out and fully explored, at least to the extent that Janson had
blown ‘‘ his top ’’ and had deliberately butted his head against
the iron cell bars causing a deep scalp wound requiring several
stitches to close. During the course of his cross-examination the
suicide episode was adverted to several different times and he
was asked whether he had been in a mental hospital or had
psychiatric treatment. He even was asked to exhibit his scalp
to the jury. In summation, the defense counsel commented on
the espisode at length and called Janson ‘‘ the man that pur-
posely banged his head against the bars’. At the motion
hearing Janson was recalled. He had been released from the
hospital in custody of his wife sometime preciously. He testified
that on July 2, 1952, after a witness, the bartender at the
Belvedere had been found strangled to death in First Avenue —
he had been locked up as a material witness, for which he was
‘only too glad’’. As the trial date approached, owing to his
knowledge of the bartender’s fate — he became obsessed by fear
and terror as to what might happen if he testified; he said that
on November 11, 1952, he ‘‘ blew his top ’’ and tried to commit
suicide by deliberately running his head into the bars. He
repeated without material inconsistency, identification testimony
given on the main trial. His testimony at the hearing was not
shaken by cross-examination. We unanimously agreed that

Es 213
ase

Judge Gompsrery was right when he ruled that ‘‘on both
oceasions he [Janson] was competent to testify ”’”.

Judge Gotnsrurn denied the motion for a new trial. Upon the
main appeal we reviewed the judgment of conviction rendered
on the verdict of guilt and also the order denying defendant’s
motion for a new trial made at the reopened hearing. At that
time the defendant argued that his conviction was not supported
by the evidence — the trial issues had turned largely on identity,
lack of motive and an alibi— certain trial rulings were urged
as erroneous. The adequacy of the jury charge was also
questioned.

As to all these points we unanimously agreed that the judgment
of conviction was amply sustained beyond any reasonable
doubt; that on the record then before us, including both the
minutes of the trial and the minutes on the motion for a new
trial, the conduct of the trial was free from reversible error
in all respects excepting that the dissenting Judges were of the
view that ‘‘ the court’s charge did not marshal the evidence as
required by People v. O’Dell (230 N. Y. 481)’ (People v.
Salemi, 306 N. Y. 863, 865). On that issue, the court was under
no necessity of writing a formal statement of their view to the
contrary as the law on that subject is governed by section 420 of
the Code of Criminal Procedure which provides: ‘‘ In charging a
jury, the court must state to them, all matters of law which it
thinks necessary for their information in giving their verdict;
and must, if requested, in addition to what it may deem its duty
to say, inform the jury that they are the exclusive judges of all
questions of fact ’’.

While this statute emphasizes that the court shall charge the
jury on all matters of law, it does not follow that the charge on
the law shall be given with only slight reference to the facts.
The better practice for the court in a capital case, as we long
lago pointed out, even when uninvited by the defendant to do so,
lis to present to the jury the case on trial in all its phases in
which the jury ought to consider it (People v. Fanning, 131
IN. Y. 659). Here, as in the O’Dell case (230 N. Y. 481), we must
xamine the charge in the setting of the case to determine whether
ithe omission to detail all items of the evidence renders the charge
so incomplete as to require a reversal and a new trial. In this
se the court charged: ‘‘ It is the prosecution’s contention in

214 a
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this case that the defendant and the deceased Walter Forlenza
knew each other, and that on Tuesday evening, February 26th,
1952 at about 8:30 p.m. in the Belvedere Bar and Grill at 2056
2nd Avenue the deceased Walter Forlenza was sitting at a table
in the dining section, and the defendant was allegedly at the bar,
and it is claimed that the defendant walked to the table at which
the deceased was seated and fired two shots at the deceased at
close range. That the defendant immediately fled, and Walter
Forlenza was removed to Beth David Hospital where he died
the following day from the effects of the bullet wounds.’’

The court adverted to the defendant’s flight and his alibi by
saying:

“The prosecution claims that the defendant fled and was not
seen or heard from until May 14th, 1952 when in the custody of
his lawyer he surrendered himself at the District Attorney’s
office. It is the defendant’s contention that on the night of the
shooting he was not in the Belvedere Bar and Grill. It is
claimed that he was in a restaurant in Queens County.

“‘Tf you find as a fact that the defendant was not in the
Belvedere Bar and Grill when the shooting occurred, then you
should acquit him.

“< Tf you find as a fact that the defendant was in the Belvedere
Bar and Grill when the shooting occurred, but that he did not
shoot the deceased, then you should acquit him.’’

The defendant, we must remember, relied on his plea of ‘‘ not
guilty ’? and his alibi witnesses. Under the proof the court said
about all that could be said, for —as we know and as they had
been instructed — the statute says: ‘‘The jury * * * are
the exclusive judges of all questions of fact’’. The issue was
murder in the first degree. The shooting was quickly done. The
lone assailant had fled and disappeared and the victim died of
the wounds inflicted. What more was necessary to be said?
The jury had heard all of the witnesses. We may assume that
they had paid attention to the witnesses as they testified and were
intelligent enough to remember the various incidental and
collateral details without repetition by the court. On the main
appeal we regarded the charge in the setting of this case as full
and fair. Our view has not changed by our later reconsideration
and we adhere to our former decision that no error was
committed on this aspect of the case.

a 215
ss

On that motion the defense also stressed as error the admis-
sion of testimony of James Forlenza concerning a dying
declaration, for lack of proper foundation and veracity,
inadequacy of the charge, etc., all of which Judge Goxpsrst care-
fully reconsidered and adhered to his former rulings. On the
main appeal we considered all phases of the controversy con-
cerning the admissibility and credibility of the dying declaration.
We unanimously agreed that no error was assignable to that
aspect of the case.

‘We now turn to the within order denying defendant’s motion
for a new trial based on alleged newly discovered evidence
showing that the dying declaration naming the defendant-
appellant as the killer was not made at the time claimed and
could not have been made at any time because the victim’s
physical condition was such that he could not talk, a new claim
made for the first time on this motion.

The power to grant an order for a new trial on the ground of
newly discovered evidence is purely statutory. Such power may
be exercised only when the requirements of the statute have been
satisfied, the determination of which rests within the sound
discretion of the court. So far as pertinent the statute provides,
viz. (Code Orim. Pro., § 465) :

*€ 8465. In what cases granted. The court in which a trial has
been had upon an issue of fact has power to grant a new trial,
when a verdict has been rendered against the defendant, by
which his substantial rights have been prejudiced, upon his
application, in the following cases. * *

“<7, Where it is made to appear, by affidavit, that upon
another trial, the defendant can produce evidence such as, if
before received, would probably have changed the verdict; if
such evidence has been discovered since the trial, is not cumula-
tive; and the failure to produce it on the trial was not owing
to want of diligence. The court in such cases can, however,
compel the personal appearance of the affiants before it for
the purposes of their personal examination and cross-examina-
tion, under oath, upon the contents of the affidavits which they
subseribed.’?

The test thus enunciated was long ago approved in this
court, and since followed that ‘‘ Newly-discovered
evidence in order to be sufficient must fulfill all the following

216 : |

requirements: 1. It must be such as will probably change the
result if a new trial is granted; 2. It must have been, discovered
since the trial; 3. It must be such as could have not been dis-
covered before the trial by the exercise of due diligence; 4. It
must be material to the issue; 5. It must not be cumulative to the
former issue; and, 6. It must not be merely impeaching or con-
tradicting the former evidence.’? (People v. Priori, 164 N. Y.
459, 472; People v. Eng Hing, 212 N. Y. 378, 392.) On this
record these criteria are not satisfied.

At the trial James Forlenza, a brother of the victim was
ealled by the People to testify to a conversation had with the
victim shortly before his death, in which he named the defendant
as the person who had shot him. This conversation was admitted
over objection as a dying declaration. According to the witness’
best recollection at the trial, the conversation had taken place
between 5:00 and 5:30 p.m. February 27, 1952.7

Although it appeared and was readily admitted that, in a prior
written statement to the District Attorney, James had fixed the
time at 1:00 p.m. and that when he testified before the Grand
Jury he had fixed the time at between 4:00 and 4:30 p.m., the
defense made no effort to clear up this inconsistency. The
eross-examination of this witness was devoted almost entirely
to discrediting the statement as a dying declaration on the
ground that the declarant was not expecting to die. James was
cross-examined to the point of exhaustion on slight inconsist-

1, “Q. Will you keep your voice up now, Mr. Forlenza, and tell us exactly
what happened as you approached the bedside of your brother? A. When I
approached the bedside of my brother I lifted up the flap of the oxygen tent
and stuck my head in, bent over him and asked him: ‘How do you feel?’ He
said: ‘No good, very bad, he says: ‘I am not going to make it, I am going to
die?

“Q. Did you say anything to him at that time, or did he say anything to you?
A. He said to me: ‘That is why I sent for you’ So I asked him, he said:
‘That is why I sent for you tell you about what you asked me last night” And
I said: ‘Who shot you?’ He said: ‘Nardi’ I said: ‘Nardi who?’ He said:
‘Nardi Salemi, the fellow that I introduced you to.” [Objections by defense over-
ruled.]

“Q. And when your brother said that did you say anything to him? A. No,
he kept on talking.

“Q. What elsé did he say? A. He said: ‘I have five thousand dollars out in
the street, see that it is collected’” [Objections by defense that no proper
foundation for admission as dying declaration overruled!] .

| 217

encies in language used on the three different occasions. Hvery-
one, including the defense, proceeded on the theory that such a
conversation had, in fact, taken place, the attack being centered
at all times on its competency and materiality as a dying
declaration, as to which more will be said later.

Returning to the issue as to the time the declaration was made,
the defense called Detective Mengrone, who visited the hospital
four times between 1:00 a.m. and 4:30 p.m. on February 27th, to
testify that he saw other relatives of decedent but at no time did
he see James either at the hospital or at the bedside.

Notwithstanding the existence of a time discrepancy, defense
counsel harely mentioned it in his summation but devoted the
greater part of his comment to an attempt to persuade the jury
that the defendant was innocent and that the dying declaration
was a false, perjurious fabrication.

Counsel for the People, in the course of his summation, pointed
out that, in the testimony by James as to the time, the statement
was made according to his best recollection; that the inconsist-
ency was explainable by the attendant anxiety incident to the
stress and strain of the tragic news plus the utter lack of motive
to testify falsely. The question, then, was fully presented to
the jury and we must assume that they considered the inconsist-
eney as unsubstantial. Nothwithstanding this state of the record
on the main appeal, counsel for the defense now argues that
the inconsistency in time raises an issue of fact which should be
resubmitted to the jury. At the hearing so-called newly dis-
covered evidence calculated to throw new light on this point was
presented. After a careful study of this testimony, we are
constrained to conclude that it adds nothing to what was
previously before the trial jury. For example:

Nurse Cancro said she was there between 4:30 and 5:15 p.m.
when the patient was taken to the operating room and during
that time had not seen James. However, on her cross-examina-
tion she conceded that, when she returned from. her lunch hour
sometime between 12:30 and 1:00 p.m., she saw two men whom
she did not know at the patient’s bedside, one of whom had
his head inside the oxygen tent. Now it is true that this witness
did not testify at the trial. Her name was in the records of
the hospital. She married in December, 1952, long after her
attendance on the deceased. No one sought to locate her until

218 |
ee

1955 — nearly three years after the trial and her marriage —
when her married name was not easily discoverable. The point
is that the defense did not attempt to locate her at the time of the
trial and does not claim to have done so, since it was not then the
theory of the defense that the deceased could not talk.

Dr. Strully, who between 4:30 and 5:15 p.m. aided in preparing
the patient for the operation, testified that no outsiders were
present during that time. His name appeared on the hospital
chart and was available.

Patsy Yannotti was at the bedside for a short while when
preparations for the operation were commenced about 4:30 p.m.
He left the ward and joined Evelyn and a friend named Donato
in the adjacent hallway. During that time he did not see James
Forlenza whom he knew. .

The moving affidavit alleges that the identity of Yannotti
did not become known until sometime in July, 1954. To the
extent that the identity of Cancro and Yannotti were unknown
by defense counsel at the time of the trial, I suppose it can be
said with some plausibility that the testimony they gave at the
hearing was newly discovered in the sense that these witnesses
had not been interviewed by the defense counsel prior to the
trial. Even if we assume this is so, it does not follow that ‘‘ the
failure to produce [their testimony] on the trial was not owing to
want of diligence ’’ (§ 465) for, surely, the names of each one
of these witnesses were either mentioned in the hospital records
or could have been easily learned by the simplest sort of inquiry.
Furthermore, even though we assume that such testimony would
have been material to the issues upon which the trial was
conducted, it cannot reasonably be said that ‘‘if. before
received ’? such evidence ‘‘ would probably have changed the
verdict ’’ (§ 465). When these basic ingredients are lacking —
and by any standard they are lacking here — the so-called newly
discovered evidence does not qualify as the basis for granting
anew trial (§ 465).

In reaching thid conclusion, we have not limited our considera-
tion of the testimony in accordance with the bare language of
the statute but have examined it in the light of the evidence as
to this point contained in the record on the main appeal. The
issue as to the exact time of the making of the dying declaration
as testified to by James Forlenza, as we have seen, was fully

a 219
bees

explored at the trial, was adverted to by counsel in summation
and its credibility passed upon by the jury. When this alleged
newly discovered evidence is viewed against the main record in
light of the best inference rule, the most that can be said concern-
ing it is that —at best, it is cumulative or designed merely to
impeach or contradict the former evidence. It throws no new
light on the issue (People v. Priori, 164 N. Y. 459, supra). The
statute requires that to justify granting a new trial it must be
shown that the evidence ‘‘ is not cumulative ’’. This the appel-
lant is unable to do. It should be mentioned that at the hearing
the People met the so-called new evidence by calling several
persons who had not testified at the trial.

Patrolman Snyder, who testified that, while on duty between
4:00 p.m. and 9:00 p.m., the 27th, he saw two women at the bedside
but did not recall seeing any men.

Patrolman Perrino, on duty between 8:00 a.m. and 4:00 p.m.,
who testified that he saw two men at the bedside about 1:30 p.m.

Jeanne Forlenza, a sister, who saw James at the hospital at
about 4:30 p.m., the 27th.

Anne Forlenea, a sister, who saw James at the hospital at
about 4:00-4:15 p.m, the 27th.

Anthony Donato, a friend of the Forlenza family for many
years, that he reached the hospital with Yannotti about 3:00
p.M.; that they looked at Walter, said nothing and remained
outside in the corridor until about 3:30 P.m., when they left. They
returned about 4:00 p.m. During these times the witness did not
see James.

Maud Forlenza, wife of James, who testified at the trial, was
recalled to testify that her husband, James, was at the bedside
about 4:30 p.m., the 27th; that she left him and returned to her
place of business where she was joined by James not later than
5:15 p.m.

As to this aspect of the attack on the dying declaration, Judge
Gotpstery determined that the time the declarant had made the
statement to James was fully explored at the trial and that its
eredibility was passed upon by the trial jury. He accordingly
rejected this aspect of the defendant’s motion as a ground for
granting a new trial. We cannot now say that, in so ruling,
Judge Gorsremn abused his discretion as a matter of law. It
seems clear that on this phase of the record nothing was shown

220 Lee

requiring the court to exercise his statutory power any
differently than he did.

The defendant’s contention that the dying declaration was
never made because the decedent could not talk was not raised
at the trial for the very good reason that the defense had
proceeded on the theory that the testimony of James Forlenza
was false and unworthy of belief because, in conversations had
with others, the decedent had refused to name his assailant, and
that the alleged statement did not qualify as a dying declaration
because the declarant had: not expected to die, the purpose
being — of course — to throw doubt on the credibility of James
and the declarant. For this purpose the defense had called
Evelyn to testify affirmatively that she talked with her husband
between 4:00 and 5:30 p.m. on the 27th.

It seems clear beyond dispute that at the trial the defense.

assumed throughout that Walter could and did talk. At-no time
was the dying declaration assailed because it was not made due
to declarant’s inability to talk, but solely on the ground that he
had said something else and this at a time when they had the
hospital records and autopsy report in court, when the names
of Nurses Blanchard and Cancro and Doctors Strully and
Breidenbach were known to the defense and whom the defense
did not call, although available.

At the motion hearing these persons who had not been trial

2. “Q. Did you talk to your husband? A, “Yes.

“Q. And between four and 5:30 did you talk to him? A. Well, he couldn’t —
Yes, I was talking to him but he was under oxygen and I couldn't talk to
him much.

“Q. You couldn’t talk too much? A. No, because I would take all the oxygen
out of the tent. .

“Q. Did you see James Forlenza there between the hours of 4 and 5:30?
A. No.

“Q. Did you ask Walter Forlenza who shot him? A. Yes.

“Q. What did he tell you? A. He says he didn’t know. He says ‘All I was
doing was sitting down eating.’

“Q. Did he at any time ever tell you that Salemi shot him? A. No.

“Q. Did you ask him that question constantly? A. I kept asking him to tell
me who done it.

“Q. And he always said to you what? A. ‘TI don’t know” Mr. Fruchtman;
That is all. Your witness.”

Leer 221
bss

witnesses all testified on the issue of decedent’s ability to talk:

Nurse Blanchard in charge of the floor and Nurse Cancro,
special nurse, both testified to the fact that they had no recollec-
tion of having heard the decedent say anything at all.

Dr. Strully was of the opinion that the patient could not have
carried on a conversation as testified to by James. He based
this opinion on the circumstance that the decedent had made no
reply to his routine inquiries; that based on the hospital report,
he believed some teeth were missing but had not verified this by
an independent examination as the patient’s face, mouth and
neck were swollen and that, in his opinion, the patient could not
have carried on a conversation as testified to by James.

Dr. Breidenbach, that when he saw the patient he found some
teeth missing; that the patient’s mouth, tongue and neck were
badly swollen due to injury from the bullets and that he sus-
pected the jaw had been fractured; that the patient was in a semi-
stupor and very weak and that, in his opinion, he was in no
condition to have talked, as claimed.

All of this testimony was completely opposed to the theory
adopted at the trial and, as such, served only to impeach and
contradict former evidence which we have said is not new
evidence of the sort warranting the granting of a new trial
(People v. Eng Hing, 212 N. Y. 378, supra).

Furthermore, such testimony was all available at the time of
the trial but, for reasons best known to the defense, the alleged
inability of the decedent to talk was never mentioned.

When the People offered the dying declaration, the defense
claimed no surprise which he might have done if he actually
believed that decedent could not talk, as now claimed, but he
could not do so at that time as the trial strategy was based on
the theory that the decedent could have and did talk. To now
claim surprise is proposing an afterthought based on a des-
perate effort to find new grounds for the granting of another
trial. Furthermore, defense counsel having failed to convince
the jury on the theory that decedent was lying when he named
defendant as his assailant, it seems rather late for a new counsel
to ask that the case be reopened in order to introduce an entirely
new and contradictory theory respecting the validity of the
dying declaration. The trial strategy, we must assume, was
carefully and deliberately planned. Having failed in its purpose,

222

we know of no reason for permitting the case to be reopened in
order to try out a different and opposing theory.

We must bear in mind that this case has been exhaustively
litigated. More than six months intervened between the verdict
of guilt and the sentence in order to permit defense to explore
the Janson episode and renew many of the contentions made at
trial and rejected by both court and jury. Following our affirm-
ance, many other motions were made®* including two to the

3.

Motions for reargument of appeal and
for an order of recall and amended
remittitur denied

Motion for stay of execution pending
determination of petition for writ of
certiorari in United States Supreme
Court denied

Execution stayed by Mr. Justice Sran-
uey Reep, Associate Justice of the
United States Supreme Court

Certiorari denied
Rehearing denied

Petition for writ of error coram nobis
dismissed

Certificate granted by Desmonn, J.,
permitting appeal from dismissal of
writ of error coram nobis

Order dismissing petition for writ of
error coram nobis affirmed, DEsmonpD
and Van Vooruis, JJ., dissenting

Motion granted pursuant to section 503
of the Code of Criminal Procedure, set-
ting week beginning April 18, 1955, for
date of the death sentence

Motions for vacating judgment of
death and for a new trial upon ground
of newly discovered evidence denied

Motion for reopening proceeding and
for reargument of motion for new trial
granted

Motion for reargument of application
for new trial denied

April 15, 1954 (306 N. Y, 946)

April 28, 1954 (306 N. Y. 978)

April 24, 1954 (not reported)
Oct. 14, 1954 (348 U. S. 845)
Nov. 22, 1954 (348 U. S. 890)

December, 1954 (not reported)

February 4, 1955 (not reported)

March 11, 1955 (308 N. Y. 863)

March 11, 1955 (308 N. Y. 883)

April 27, 1955
N.Y. L. J., April 28, 1955, p. 8, col. 4

May 5, 1955 (not reported)

May 10, 1955 (not reported)

a 223
ee

Supreme Court of the United States, none of which raised any
issue as to declarant’s ability to speak. There is overwhelming
evidence that decedent did speak— and to various persons at
various times — for instance:

Maud Forlenza, wife of James, and the two sisters, Anne and
Jeanne, testified that there was almost a continuous flow of
conversation.

Mary Karasik, director of nurses, to the effect that Nurse
Blanchard had overheard the patient asking his wife how their
child was.

Evelyn Forlenza, who testified at the main trial for the
defense and at the hearing for the People, in each instance to a
conversation had with decedent, but which was contradictory,
she having testified at the trial that decedent did not state who
shot him — while at the hearing she testified that she lied at the
trial and that, in fact, the decedent had told her about 11:00 a.m.
on February 27th that the defendant had shot him. She said
that the deceased had her swear that she would not disclose
the information except to his brother, James, and then only in
ease that he should die.

Evelyn explained her recantation on the ground that on the
main trial she was literally ‘‘ scared to death”. Well she might
have been. She had just borne a baby out of wedlock, fathered
by the victim, Walter. She was familiar with the fact that
‘Walter ‘‘ had money in the street ’? which, if collected, would go
towards the support of the infant; that decedent had made the
statement under a solemn promise that she tell no one but James
and then only if he should die; that to be careful of herself and
the baby ‘‘ as something might happen ’’ to them and not to move
back to Harlem; that the bartender, Pauitta, who had witnessed
the shooting from his unobstructed vantage point behind the
bar, met violent death by strangulation shortly after he had
testified before the Grand Jury. She knew that, following this
tragic coincidence, other witnesses, Bertorelli and Janson were
taken into custody as material witnesses and that James had
been given a police bodyguard. She knew the ramifications of
the narcotic trade and the peril attending a ‘‘ squealer’’. The
trial was sensational and it is little wonder that Evelyn chose
the easy way out. After all, she was a mother protecting her
own in face of stark realities of life as she knew and understood

224 Pe

them. Her recantation as to the contents of the conversation,
which at one time even the defense counsel conceded she had
with the decedent, was thus fully explained.

Nothing of significance flows from the failure of the People to
recall James Forlenza on the hearing. His testimony on the
trial had been subjected to a most thorough and exhaustive
cross-examination, Nothing remained for him to say.

Perhaps a word should be mentioned concerning another
witness named Anthony Donata (or Tony Iodine), a trafficker
in narcotics with a long criminal record. He knew both the
decedent and the defendant. On the 26th he visited the victim’s
bedside and, in Italian, asked decedent who had shot him; dece-
dent did not answer but ‘“‘ rolled his eyes toward the officer stand-
ing behind the bed ’’; the following day he returned at about
10:30 a.m.; when Evelyn and Lizzie (Louis Farlradi) stepped
out for a moment, he put his head under the tent and again
asked the victim who had shot him and was told in a painful
way ‘‘ Nardi’? and to tell Albert ‘‘ to watch out ’’; that he had
no feeling in his legs and that he believed he ‘‘ could not make
it’’. Donato left when ordered out by a nurse.

Judge Gotpsrury had presided at the trial. He was thoroughly
familiar with every aspect of this case. When Doctors Strully
and Breidenbach testified with respect to the decedent’s physical
condition contrary to the autopsy report, factual issues were
raised presenting a serious question of weight and credibility.
It could only be solved by a re-examination of the decedent’s
body. It is now contended that this re-examination prejudiced
defendant by depriving him of his right to due process, although
he consented to the exhumation. This contention is based on|
the circumstance that the examination was not for the purpose
of determining the cause of death, which was already known, but
to resolve a collateral matter, condition of the teeth, and whether
the wounds were such as to have prevented speech prior to death.

As we view this aspect of the proof, we see no new issue of,
fact requiring submission to a new jury on the ground of newly
discovered evidence. The opinion of Doctors Strully and Brei-
denbach that the victim was incapable of speech was based on a|
superficial examination of the outward effects of the injury —
since, concededly, they made no otherwise independent examina-
tion at the time —~ relying on statements contained in the hospital]

Le 225
bn

records, the generally weakened condition of the patient and
the fact that he said nothing to them. The autopsy report
subsequently made showed the true nature of the victim’s con-
dition. The missing teeth which had played so prominent a
part in their diagnosis were, in fact, not the result of wounds but
of a long prior extraction in normal course. While all can say
that these witnesses were eminent physicians and honorably
disposed, with no reason to testify falsely, they — nonetheless —
were mistaken as to the actual damage caused by the bullets and
had given their opinions in reliance on facts that were plainly
and definitely inaccurate. The re-examination of the body
demonstrated this inaccuracy and confirmed the original defense
theory that the victim had, in fact, talked to various persons, as
testified to on the trial. The medical examiners agreed that the
wounds were not of such a nature as to prevent talking prior
to death.

It is also contended that Judge Gotpsrery conducted the exami-
nation and interrogated witnesses not in the presence of counsel
for the defendant. To state these objections is to demonstrate
their absurdity. The record shows that the examination was
attended by a physician of defendant’s own choosing, Dr. Birn-
krant; that counsel for defendant —and People as well — pre-
ferred to stand in the hallway and look through the door rather
than be close spectators fo the re-examination. A careful
stenographic record was made of the proceedings and no one
contends that such record was incomplete or inaccurate. It
demonstrates that defendant’s rights were fully protected. It
cannot reasonably be said that Judge Goupsrsin in any way
prejudiced defendant’s rights by asking Dr. Birnkrant from time
to time if he saw, understood and agreed with what the operating
pathologist, Chief Medical Examiner, Milton Helpern, M. D.,
was doing and the results found. True, Judge Gonpsrsmw swore
the undertaker who had exhumed the body but only for the
purpose of identification of the body, a most necessary and
essential step in the proceeding, Had the Presiding Judge not
done these things—and he was not to be blamed if counsel
preferred to remain out of hearing—he would, no doubt, have
been charged with another kind of dereliction. In our view,
Judge Goupsran acted with judicial propriety,

226 Le
sane

‘When this record is measured with the requirenients of the
statute, it cannot reasonably be said that the evidence adduced
satisfies statute and case law as having been newly discovered,
for it is not such as could not have been discovered before the
trial by the exercise of due diligence and, even if we assume that
it is material to the issue, it nonetheless is cumulative and any
purpose it might serve is to impeach or contradict the former
evidence; in fact, it cannot reasonably be said that it is of such
a nature and quality as would probably change the result of a
new trial if granted. Asa matter of fact, the evidence adduced
at the hearing —far from ‘‘ probably changing the [jury’s]
verdict ’? would have made it easier for the jury to conclude
that the defendant was guilty.

Furthermore, the statute contemplates diligence. Here trial
counsel acknowledges that he made no investigation concerning
the dying declaration until after the Supreme Court denied
rehearing on November 22, 1954. The point now raised is
clearly an afterthought and is not supported by evidence
warranting the granting of a new trial as newly discovered
within the meaning of section 465. This is not the situation
where the court is depriving the jury of its right to determine
an issue of fact, but rather whether the facts are sufficient to
warrant setting aside the jury verdict and granting a new trial.
We agree with the Court of General Sessions that the alleged
newly discovered evidence is insufficient to warrant the granting
of a new trial. We are also satisfied that this defendant has
been accorded due process in accordance with applicable
State law.

The judgment of conviction should be affirmed.

Fox, J. (dissenting). I was one of the bare majority of four
who voted to affirm the judgment of conviction when this case
was first before us (306 N. Y. 863). Although the record evi-
dence was far from strong, I concluded that there was sufficient
to justify a verdict of guilt. The new matter which has been
developed and adduced upon the motions for a new trial, as
well as upon the application for an order in the nature of a
writ of error coram nobis, has radically changed the picture,
and I cannot now, consistent with the dictates of conscience or
the demands of due process, adhere to my original vote of
affirmance, A refusal to direct a new trial will not only work

. an injustice upon Salemi but, even more important, will do
a disservice to the administration of the criminal law.

The conviction against the defendant depended primarily upon
the testimony of two witnesses, Paul Janson, who identified
defendant as the killer, and James Forlenza, the deceased’s
brother, who testified that the victim had made a dying declara-
tion to him, naming defendant as his assailant.

As to Janson, proof not before the jury demonstrates that
he was probably insane at the time he testified against the
defendant, and, as to Forlenza, the newly discovered evidence
ereates a real doubt as to whether he ever received a dying
declaration from his brother. No more need be said about the
evidence relating to Janson, for it is indisputable that he was
committed as an insane person on the very day after the jury
returned its verdict of guilt against defendant.t And very little
more need be said about the testimony bearing upon the authen-
ticity and existence of the alleged dying declaration. It is
enough to observe that, had the new matter been before the
jurors at the trial, they would have heard —from witnesses of
the highest character, whose honesty and sincerity are beyond
all suspicion — not only that Forlenza was not at his brother’s
bedside in the hospital during the period he said he spoke to
the latter and received the declaration, but that, in point of fact,
the victim was in no condition, physically or mentally, to have
uttered any statement. There was, it is true, conflicting testi-
mony, but the vital thing is that the jury never heard the evidence
which, if credited, would have gone far toward destroying the
prosecution’s case.

In arriving at my decision that there should be a reversal
and a new trial, I would not be understood as saying that the
defendant is not guilty —I do not know whether he is or not —
or that the jury, with the new evidence before it, would have
returned a verdict of acquittal. My view is simply that the
original jury, or another, could reasonably and conscientiously
have reached a verdict contrary to the one that was reported,

1. This material was before the court, in connection with an appeal from an
order denying a motion for a new trial, when we originally affirmed the judgment
of conviction. However, it did not then have the same impact as it does today
when considered with the other evidence brought to our attention by the more
recent applications.

po

228 Le

on the basis of the matter recently uncovered and not adducible
by the defense at the time of the original trial.

The judgment of conviction should, upon this reargument, be
reversed and a new trial granted.

Dzsmonp, J. (dissenting). When defendant was tried, con-
victed and sentenced to death, all the important proof against
him consisted of eyewitness identification testimony by witness
Janson, and testimony by James Forlenza of an alleged dying
declaration in which the victim is supposed to have named
defendant as his slayer. On the trial record as it then stood, and
despite the mystery as to motive or background, we held that
the jury’s guilty verdict was not against the weight of evidence.
But, since our affirmance, quantities of new evidence have come
to light, the existence and weight of which we must recognize.
To my mind, the new proofs insistently demand a new trial for
this defendant. In voting for such a new trial this court would
not be passing on defendant’s guilt nor would we be reviewing
again the weight of evidence as to that question, We would be
seeing to it that this man does not go to the electric chair until
a jury has heard this strange new series of conflicting and con-
fusing narratives, many of them highly favorable to defendant.
We would be upholding defendant’s fundamental right to a full
trial by jury.

Let us assume that the new information, not known at the trial,
as to witness Janson’s mental condition, does not meet the
requirements that new evidence to call for a new trial must be
more than merely cumulative or contradicting or impeaching,
that it must be such as could not by due diligence have been dis-
covered before the trial and that it must be such as would, if
produced at a new trial, probably change the result (Code Crim.
Pro., § 465, subd. 7; People v. Priori, 164 N. Y. 459). Let us
go further and assume that the highest court of New York is so
tightly bound by that rule that we must close our eyes to every-
thing but the rule. On those two assumptions, even, I still think
that a new jury should decide whether or not it is safe to accept
the testimony of a witness who went straight from the court-
room to a mental institution, and the seriousness of whose mental
illness was certainly not disclosed during the trial to defense
counsel. It is unreasonable to charge defense counsel with lack
of diligence in discovering the facts as to Janson, facts which

229

were diligently kept from him

by those whose duty it was to

disclose all pertinent information about a witness, especially in
a first degree murder case. It cannot be stressed too much that
Janson was the only witness who identified defendant as

the killer.

If the jury had been permitted to learn that Janson was at
least temporarily insane during the trial, the jury might have

had to rely, for a finding of guilt

It, on Forlenza’s testimony as to

a dying declaration. That testimony obviously came as a com-

plete surprise to defense counse!

1 at the trial. To say now that

the latter should have stopped the trial and made a prompt and

thorough investigation, as to
that declaration ever having be

he probability or possibility of
en made at all, is to demand the

impossible. Even if a long delay in the trial, for such an investi-

gation, could have been had, hi
situation have guessed at the
has since taken months or years
counsel have imagined that ela

ow could any lawyer in such a
existence of testimony which it
to uncover? How could defense
orate investigations later made

would turn up two physicians, two nurses, two police officers and

several other persons, each prep:
or less definiteness, completene:
the dying declaration could not
heard by Forlenza? Such tes

ared to give testimony of greater
ss and weight, to the effect that
have been made by decedent or
imony is ‘‘ cumulative ’’ in the

broadest sense only of that term since there was no real oppor-
tunity or effort to try out the precise question at the trial. For
the same reason, it cannot be said to be merely ‘‘ contradictory ’’.

It is brand new evidence to show

testified to (not the fact of guilt

declaration) simply could not b
material (or any of it) could w'
duced at the trial by the defe

that an alleged fact surprisingly
but the alleged fact of a dying
e true. To say that all this new
ith due diligence have been pro-
mse is to ignore reality. How

could defense counsel, having no reason to expect dying declara-
tion testimony, have been expected to prepare himself with
Imedical proof that the victim was in fact unable to speak? There

simply was no such issue in the

case until James Forlenza took

the stand. The charge against defense counsel of lack of due

diligence is particularly unfow
nurse Cancro, now a most im
whose very name could not be le

mded as to the victim’s special
portant witness for defendant,
arned till long after the trial.

230 a

The important dispute of fact on a new trial would be as to
whether the victim could or did talk. Since at the last trial
defense counsel could not have anticipated that any such dispute
would arise, diligence in preparing for it is simply not in the
picture at all.

This court, since it cannot directly review an order not-in the
original judgment roll, denying a motion for a new trial on
newly discovered evidence, reaches the same result by ordering
a reargument (People v. Regan, 292 N. Y. 109) as we did here.
But such a reargument brings up not only the newly discovered
evidence, but the whole record, old and new. We cannot, or at
least should not, treat the alleged newly found evidence as some-
thing separate and off by itself. We should picture the trial

. record as it would look with the new testimony added. After
thus re-examining the total record, our duty is to say whether
or not a new jury, hearing all of it, might well come to a different
conclusion.

And our power to order a new trial is not limited by the rules
as to newly discovered evidence. Having heard a reargument
of the entire proceedings, we have now the same powers of
disposition and decision as in any other appeal in a capital case.

_ Among those is the power to order a new trial if justice so

. requires (Code Crim. Pro., § 528). I strongly feel that the
interests of justice demand a full trial of this cause hefore a
jury which can hear all the witnesses.

The judgment should be reversed and a new trial ordered.

Conway, Ch. J., Frozssen and Burges, JJ., concur with Dyn, J.;
Fon, J., dissents in an opinion in which Dusmonp and Vay
Vooruts, JJ., concur; Desmonn, J., dissents in a separate opinion
in which Futp and Van Vooruis, JJ., concur. :

Upon reargument: Judgment of conviction affirmed. And
upon such reargument there was presented and necessarily
passed upon a question under the Constitution of the United
States, viz.: The defendant argued that he was deprived of due|
process of law under the Fourteenth Amendment of the United|
States Constitution in respect to the exhumation proceedings by|
the trial court upon the hearing on the application for a new]
trial. ‘This court held that the defendant’s constitutional rights|
were not violated,

Tue Prorre or rae Stare or New York, Respondent, v. Epwarp
Nexson, Appellant.

Argued January 20, 1955; decided July 8, 1955.

Nancy Carley for appellant. I. The trial court erred in its
insistence and proclamations that notice and knowledge of
violations to defendant were of no consequence in the case
because, insofar as the second count of the indictment was
concerned, the jury may well have found as a matter of fact that
there could be no culpable negligence on defendant’s part without
such notice or knowledge. (People v. Angelo, 246 N. Y. 451.)
II. The court erred in its insistence that appellant could be
guilty without general notice since this court has held that when
notice is fraudulently withheld the withholder is the culprit, and
thus it was a question of fact for the jury whether there was
fraud in the withholding of notice herein and whether such fraud
brought appellant within the above-mentioned holdings. (Pharm
v. Lituchy, 283 N. Y. 130; Kilmer v. White, 254 N. Y. 64.) IIL
The trial court erred in failing to dismiss the first count of the
indictment at the end of the People’s case insofar as the People’
failed to prove that defendant was engaged in an independent
misdemeanor. (People v. Grieco, 266 N. Y. 48; People v.
Vollmer, 299 N. Y. 347; People v. Luscomb, 292 N. Y. 390.)
IV. The court erred in not dismissing the first count of the
indictment at the end of the People’s case insofar.as the mis-
demeanor charge was not a crime against the person or property
of another. (People v. Grieco, 266 N. Y. 48; Adler v, Deegan,
251. N. Y. 467.)

a 233

Edward 8. Siwer, District Attorney (William I. Siegel of
counsel), for respondent. I. Appellant’s guilt was established
heyond areasonable doubt. (People v. McCarthy, 250 N. Y. 358.)
II. No errors of law were committed by the trial court. (People
\v. Schwarte, 273 App. Div. 823, 298 N. Y. 551; People v. Harris,
74. Mise. 353; People v. Diamond, 95 Mise. 114; People v. Bud-
densieck, 103 N. Y. 487; People v. Sandgren, 302 N. Y. 331;
People v. Polstein, 184 App. Div. 260, 226 N. Y. 598; People v.
Vollmer, 299 N. Y. 347; People v. Luscomb, 292 N. Y. 390; People
lv. Giblin, 115 N. Y. 196; People v. Patini, 208 N. Y. 176; People
iv. Wagner, 245 N. Y. 143; People v. Clark, 7 N. Y. 385; Adler v.
Deegan, 251 N. Y. 46; People v. Angelo, 246 N. Y. 451.)

Dyz, J. The defendant-appellant appeals to this court by
ermission from a judgment of the Appellate Division, Second
udicial Department, modifying* and affirming as modified a
judgment of the County Court of Kings County rendered upon
la jury verdict convicting the defendant of the crimes of man-
laughter, first degree, and manslaughter, second degree (Penal
aw, § 1050, subd. 1; § 1052, subd. 3).

The indictment upon which the conviction was based contained
;wo counts: The first charged manslaughter in the first degree
msofar as the death of two persons was caused by a fire which
ccurred in defendant’s multiple dwelling. These persons were
mable to escape because of lack of adequate fire protection which
efendant had knowingly neglected to provide, as required by the
ultiple Dwelling Law, a misdemeanor, affecting ‘‘ the person
x property ’’ of the two persons killed (Penal Law, § 1050,
subd. 1; Multiple Dwelling Law, §§ 187, 188, 189, 304). The
econd count charged manslaughter in the second degree by
eason of the fact that under the same circumstances of owner-
hip he ‘‘ wilfully and wrongfully used said building ’’ in an
nlawful manner and ‘‘ with gross and culpable negligence ’’
wned, operated and neglected to render the ‘‘ building safe for
e tenants and occupants thereof’’ by failing to provide
dequate fire protection as required by law, and thereby caused
he death of two persons (Penal Law, § 1052, subd. 3; Multiple
welling Law, §§ 187, 188, 189, 304).

* The modification in the Appellate Division eliminated the sentence of seven

d one-half to eleven years imposed on the manslaughter second conviction
Penal Law, § 1938).

234 Dn}

The appellant concedes that his premises were existing in
violation of the safety provisions required by the Multiple
Dwelling Law, and that such violations were the proximate
cause of the death of two tenants. He, nonetheless, prays that
his conviction on both counts be set aside on the ground that the
trial court erred, as a matter of law, in ruling that lack of notice
of the aforesaid violations afforded no defense, thereby depriv-
ing the jury of its right to determine as a question of fact, on
the issue of culpable negligence, whether without such notice or
knowledge he was ‘‘ engaged in committing, or attempting to
commit, a misdemeanor, affecting the person or property, either
of the person killed ’’ or whether such homicide when committed
without a design to effect death, was the result of culpable
negligence.

It is true defendant was not personally notified of the viola-
tions in conformity with section 326 of the Multiple Dwelling
Law, but nothing turns on such omission for such notice is no
required in a criminal proceeding (People v. Schwartz, 298 N. Y.
551). However, the record is replete with proof establishing
that he had knowledge of the existence of the violations. There
is evidence showing that the plaintiff had been a tenant of the
subject premises for. over fifteen years; that he was wel
familiar with its physical aspects, including lack of sprinkler
system and secondary egress for use in case of fire. There came
a time in 1951 when-he negotiated with the then owner to pur-
chase the premises. At the closing of title on June 15, 1951, the
defendant was present and represented by attorneys. A repor’
furnished by the company issuing the title insurance noted
violations of the Multiple Dwelling Law and these were set forth
in a deed which was given subject to such violation. While’
defendant now says that this reference to the violation was not
brought to his attention, he nonetheless is bound thereby. In|
addition to such uncontroverted documentary proof, there is
oral testimony to the effect that he had told a tenant that
because boys were using the roof scuttle as a means of entrance,
he had nailed it shut; that the real estate agent had tol
defendant of the need for fire escapes and that defendant had|
made measurements for such installation but that he ‘‘ hadn’t|

gotten to-it yet’.

a 235
bn ___!

On November 17, 1952, the defendant undertook to repair a
leak in the roof. He heated a tar compound in a shallow pan
over an open gas burner located in the basement. The tar
caught fire and despite his best efforts spread to the building.
He ran to give the alarm to the tenants. It was too late. Two
tenants who were cut off jumped from the fourth-story window
and were badly injured. One died and a third tenant trapped in
her apartment was burned to death. An assistant fire marshal
testified that on-the day of the fire the defendant had told him that
“« he knew he was supposed to have fire escapes or a sprinkler ’’,

In such a setting the defendant is chargeable with knowledge
of the existence of the violation—a misdemeanor (Multiple
Dwelling Law, § 304) ‘‘ affecting the person and property
* * * of the person killed ’? (Penal Law, § 1050, subd. 1) and,
even though such violations were committed without design to
effect death, his act was culpable within the meaning of sub-
division 3 of section 1052 of the Penal Law. This is so whether
or not he knew the penal consequences of such culpability.

People v. Grieco (266 N. Y. 48), relied on by the appellant, is
not authority to the contrary. There the defendant was charged
with manslaughter while engaged in the commission of a mis-
demeanor, namely, reckless driving while intoxicated, in such
a manner as to cause the death of a human being. The trial
court charged the jury that at the time of the killing the
defendant was committing a misdemeanor affecting the person
killed or another, within the meaning of section 1050 of the
Penal Law. We ruled this was error and set aside the convic-
tion, inasmuch as the People had not contended or proven
that the defendant saw the deceased before his automobile
struck her or that he intentionally ran her down, thus holding
that prior knowledge was an essential ingredient of the crime
charged which, under the circumstances of that case, was justified.

The within case falls more properly within our rule in People
v. Alewander (293 N. Y. 870), wherein we unanimously affirmed
a judgment rendered on a jury verdict convicting the defendant-
appellant of the crime of manslaughter in the first degree under
section 1050 of the Penal Law and manslaughter in the second
degree under section 1052. The indictment had charged that
defendant and two others, as owners in possession and control of
a multiple-family dwelling, willfully and with gross negligence,

236 Le
Ls

had failed to comply with the Multiple Dwelling Law and other
laws, with the result that seven persons lost their lives in the fire
in a tenement building for lack of prescribed safety equipment.
The defendant admitted that the building was not equipped as
required for ‘‘ old law tenement houses ’’ but that the building
in question was not a tenement house as defined in subdivision
9 of section 4 of the Multiple Dwelling Law, but rather a Class
B multiple dwelling as defined in subdivision 5 thereof. The
case went to the jury under a charge to the effect that, as far as
the misdemeanor is concerned, ignorance of the law is no excuse.
The jury rendered a verdict finding the defendant guilty of
manslaughter in the first and second degrees as charged (Penal
Law, §§ 1050, 1052) and we affirmed unanimously.

In the case at bar the conviction must also be upheld. From
the time of the appellant’s acquisition of title to the date of
the fire, a period of about one and one-half years, the lack of
a secondary means of egress or a sprinkler system constituted
a continuing misdemeanor “‘ affecting the person * * *
killed’’. This continuing omission to provide proper fire
protection was not merged in the homicide of the two deceased
tenants as claimed by the appellant. The situation is not
analogous to the assault homicide where a continuing assault
against one resulting in death is merged in the homicide (People
vy. Vollmer, 299 N. Y. 347; People v. Luscomb, 292 N. Y. 390). It
is undeniable that a tremendous duty is placed upon the owners
and those in charge of property under the applicable section of
the Multiple Dwelling Law; however, it is quite apparent that
the Legislature intended the burden to be onerous so that owners
would be impressed with the consequences flowing from violation
of the statute, which violations could so readily endanger human
life in the congested conditions under which people must live
in the city of New York.

The judgment of conviction as modified should be affirmed.

Van Vooruts, J. (dissenting). Defendant appeals from a
criminal conviction of manslaughter in the first degree. The
indictment charged him in particular with violation of sub-
divisions b and ¢ of section 187 of the Multiple Dwelling Law,
in not having a means of egress extending through the roof of
a four-family multiple dwelling which he owned at 71 Lefferts

Le 237

ee
Place, Brooklyn, and in failing to have two independent means
of egress from the building or one means of egress equipped
with a sprinkler system. Violations are misdemeanors (§ 304).
On November 17, 1952, this building burned. There is evidence
in the record from which a jury could find that two persons lost
their lives as a result of the absence of these statutory require-
ments. Manslaughter in the first degree is defined by subdivision
1 of section 1050 of the Penal Law as including homicide com-
mitted without a design to effect death, ‘‘ By a person engaged
in committing, or attempting to commit, a misdemeanor affecting
the person or property, either of the person killed, or of
another ’’. That is the basis for defendant’s conviction.

-Appellant’s defense was chiefly based upon his lack of knowl-
edge or notice of the existence of these violations, but the trial
court excluded such testimony upon the ground that the
misdemeanors with which appellant was charged were mala
prohibita, that he could be guilty of these violations of the
Multiple Dwelling Law without having created or even knowing
the condition of the building, and that, if the deaths of the
persons named in the indictment resulted therefrom, he is
automatically guilty of manslaughter regardless of culpable
negligence and irrespective of any criminal intent. If the last
conclusion is correct, it seems to me that the law has retreated a
long distance into a stage of primitive formalism.

Appellant had himself been a tenant in these premises for a
number of years. He is a Negro seventy-one years old whose
education ended with the first grade in elementary school. His
defense was that he had recently bought this real property; that
he did so for a cash consideration of $1,000 and a purchase-money
mortgage of $7,500, under threat of eviction by the former owner
unless he became the owner; that these violations had been filed
against the former owner without having been caused to be
removed by the city department of housing and buildings, and
were deliberately concealed from him by his vendor in order to
induce him to purchase the property and to relieve the former
owner of responsibility ; that although there is a general recital in
the deed that the conveyance is subject to building violations, he
did not read it personally or know its full contents, and that the
deed was recorded by the vendor’s agent who procured it back
from the register’s office and kept it in his possession in order

Ce
lh
to prevent these matters from coming to appellant’s attention.
Appellant contends that he was in complete ignorance of these
circumstances until he found himself confronted with a charge
of manslaughter, but that the trial court withheld this defense
from the jury upon the ground that criminal intent is unrelated
to his guilt or innocence.

Testimony by witnesses for the prosecution is at variance with
defendant’s version, but removing the whole question of guilty
knowledge from the jury was a serious infraction of appellant’s
rights, unless the court was correct that notice and criminal
intent are not factors in this kind of manslaughter.

Manslaughter where death results from the commission of a
misdemeanor is analogous to felony murder (People v. Grieco,
266 N. Y. 48, 53). ‘‘Felonious intention, as an element of the -
homicide, is supplied by the intention to do the unlawful act of
which the homicide is a consequence. The intent is transferred
by implication of law.’? (26 Am. Jur., Homicide, § 188,-pp. 281,
282.) As in the case of felony murder, no design to effect death
is necessary, but just as there must have been an intention to
commit an independent felony in case of murder, so must there
have been an intent to commit an independent misdemeanor in ©
order to render a defendant guilty of manslaughter. Otherwise
the whole underlying theory of criminality is withdrawn from
the felony charge. At least, where the misdemeanor consists: in
a continuing offense which is malum prohibitum, a defendant
must have been aware of its existence before being convicted of
manslaughter. It is said (40 C. J. 8., Homicide, § 57, pp. 920-
921) that, in determining whether a homicide was committed by
a person while engaged in the commission of a misdemeanor, he
must have had an intent to commit the act which constitutes the
misdemeanor. Appellant’s position is similar to that of a mort-
gagee confronted by a charge of manslaughter in case of death
from fire immediately after taking title to mortgaged premises.
The mortgagee has not created the condition which constitutes
the misdemeanor and may be ignorant of it. Under those cir-
cumstances, he cannot be guilty of manslaughter on the ground
of culpable negligence. Can he be held to be guilty of the felony
charge solely upon the theory that he is constructively -guilty
of the misdemeanor? T think not. The mere circumstance that

Le 239

such a mortgagee would not have had to have harbored an intent
to violate the Multiple Dwelling Law in order to render him
guilty of the misdemeanor, would not suffice to convict him of
manslaughter unless he were aware of the existence of the
violation and had opportunity to correct it. That follows from
the language of section 1050 (subd. 1) of the Penal Law which
states: that homicide is manslaughter when committed by a
person “ engaged ’’ in committing or attempting to commit a
misdemeanor. The use of the words ‘‘ engaged in committing ”’
signify ‘conscious personal participation in the commission of
the misdemeanor. That much is fundamental to the criminal
law, which seizes upon the wrongful intent to accomplish the
lesser crime and utilizes it as a basis for visiting upon the wrong-
doer the consequences of the greater wrong which has unexpect-
edly and unintentionally followed in its train. If awareness of
the misdemeanor is held to be irrelevant, the basis for guilt
of manslaughter is eliminated. Wharton’s Criminal Law states
that ‘‘ When there is a general intent to do evil, in other words,
of which evil the wrong actually done may be looked upon as a
probable incident, then the party having such general intent is
to be regarded as having intended the particular wrong.”
(12th ed., Vol. 1, § 157, p. 213.) This court was acutely conscious
of the necessity for moral wrong in discussing the doctrine of
merger-in the felony murder case of People v. Huter (184 N. Y.
287, 243) when it said that ‘‘ A person who attempts or engages
in the commission of a felony, is not only chargeable with express
malice, but also with being perversely wicked, evincing a
depraved mind and a disregard of human life, and if, while so
engaged, he causes the death of a person, although unintentional,
the legislature has seen fit to enlarge the crime and make it
murder in the first degree’. If a criminal purpose is so large
and necessary an element to fulfill the doctrine of ‘‘ transferred
intent ”’ in case of felony murder, can it be true that one may
become guilty of manslaughter in complete moral innocence with-
out so much as knowing that a misdemeanor has occurred? If
the People’s witnesses testified truthfully, defendant is not
morally guiltless, but that does not concern the outcome of this
appeal inasmuch as the trial court did not give him his day in
court on this issue by refusing to allow him to testify to his

lack of knowledge of these building violations, and therefore his
conviction can stand only upon the basis that his moral innocence
is irrelevant.

Vendors who have concealed building violations from their
vendees have been held civilly liable for damages to’ injured
persons in place of the vendees (Pharm v. Lituchy, 283 N. Y.
180; White v. Kilmer, 254 N. Y. 64). In the latter case this court
approved the following section of the Restatement of Torts:
“Liability for Concealed Dangerous Conditions Known to
Vendor. <A vendor of land, who conceals or fails to disclose to
his vendee any condition whether natural or artificial involving
unreasonable risks to persons upon the land, is subject to liability
for bodily harm caused thereby to the vendee and others upon
the land in his right, after the vendee has taken possession if:
a. The vendee does not know of the condition or the risk involved
therein, and b. the vendor knows of the condition and the risk
involved therein and has reason to believe that the vendee will
not discover the condition or realize the risk.’’ (§ 353.) It
would appear that a fortiori a defendant in a criminal prosecu-
tion for manslaughter should be allowed to testify to his lack
of knowledge of such a risk, leaving it to the.jury to decide
whether he is telling the truth.

In Reg. v. Franklin (15 Cox ©. ©. 163, 165) Justice Frexp
said wisely ‘‘ I have a great abhorrence of constructive crime.’’
In that case the defendant unlawfully threw a crate into the sea
at the public bathing beach at Brighton, which accidentally killed
abather. The court refused to submit to the jury what it called
“‘the narrow ground ’’ that the act of throwing this box into
the sea at a public bathing resort was unlawful. The case was
submitted upon the broad ground of culpable negligence, which
is an entirely different matter. ;

Abhorrence of constructive felony has been shared by many
an American court. In Estell v. State (51 N. J. L. 182), the New
Jersey Court of Errors and Appeals reversed a manslaughter
conviction where a tollhouse keeper had been killed while the
defendant attempted to drive his horses through the gate without
payment of toll. That act was prohibited by law. The defendant
had been found guilty of manslaughter ‘‘ by reason of the single
fact of his having attempted to pass through the toll gate without
paying his toll’. The court said that apart from culpable negli-

[| 241

gence, ‘‘ This was a plain misstatement of the legal principle.
* * * The mere unlawfulness of the act does not, in this class
of cases, per se, render the doer of it liable, in criminal law, for
all the undesigned and improbable consequences of ‘it. The
doctrine is stated in the text books, and is exemplified in a long
train of decisions. 1 Bish. Crim. L. (2d ed.), § 258.”

The surest reply to the distorted view that criminal liability
depends upon chance is to insist wherever possible upon moral
guilt in felony convictions. Although the common-law crime of
involuntary manslaughter has been superseded by statute, the
Legislature should not readily be deemed to have required man-
slaughter convictions without criminal intent. Death caused hy
a person ‘‘ engaged in committing a misdemeanor ’’ was designed
to mean by a person consciously engaged in committing the mis-
demeanor. Criminal intent is not a necessary factor in some
misdemeanors, and may not be required in case of violations of
these sections of the Multiple Dwelling Law. But under the
doctrine of transferred intent, which is as applicable to man-
slaughter growing out of misdemeanor under section 1050
(subd. 1) of the Penal Law as it is in felony murder under section
1044 (subd. 2), it by no means follows that the Legislature
intended to create constructive criminal liability to the felony
charge. ‘‘ Outside of a narrow class of exceptions, punishment is
meted out by the law of crimes for a specific unlawful intent.’’
(People v. Katz, 290 N. Y. 361, 365.) Such crimes as are merely
mala prohibita are of lesser magnitude and, even in such
instances, are strictly construed (People v. Werner, 174 N. Y.
132, 134). The general minor character of such offenses is thus
described in People v. D’ Antonio (150 App. Div. 109, 113):
‘There is no doubt about the general rule that one cannot be
convicted of a crime without proving a criminal intent, but this
rule has its exceptions. Statutes which are in their nature police
regulations, as the one here under consideration is, impose
criminal penalties, irrespective of any intent and obviously for
the purpose of requiring a degree of diligence for the protection
of the public against violations.’? Manslaughter is not a police
regulation, and is not lightly to be regarded as having been
intended by the Legislature to be capable of being sustained
without evidence of criminal intent in the commission of the
underlying misdemeanor. This court considered at length a

242 a

question closely related to the present in an opinion by
Judge Lenman in People v. Clark (242 N. Y. 313), where a con-
vietion was reversed of a ‘public officer for having received
“ emolument, gratuity or reward * * * except such as may
be authorized by law’. That crime is made a felony by section
1826 of the Penal Law, and nowhere expressly includes guilty
knowledge on the part of the officer. Nevertheless, it was held
to have been error for the trial court to have refused to charge
that ‘‘ if the defendant received the sum of $1,000 from Mr. Cass
and the defendant believed that he had a right to receive. the
same and did receive it without wrongful and corrupt intent, the
defendant cannot be convicted.’’? The opinion states: ‘‘ It may
be said with equal right that no court should-impute to the
Legislature the intent, even if it has the power, to make such
innocent act a felony, and construction of a criminal statute to |
inelude such acts is unreasonable if other construction is pos-
sible’? (Pp. 325-326.) And this court there said further that
“« Penal statutes should be construed accordingly to give effect
to the legislative intent. The crime of receiving money ‘not
authorized by law ’ is not committed unless the money is received
with wrongful intent. That intent is shown when it appears that
the public officer has received something which he knows that
the law does not permit him to accept.’? (P. 329.) :

The Supreme Court of Nebraska in Thiede v. State (106 Neb.
48, 538-54; note 15 A. L. R. 244) applied this principle to the
question now at hand saying: ‘‘ We believe the rule to be that,
though the act, made unlawful by statute, is an act merely
malum prohibitum and is ordinarily insufficient, still, when such
an act is accompanied by negligence or further wrong, so as to
be, in its nature, dangerous, or so as to manifest a reckless
disregard for the safety of others, then it may be sufficient to
supply the wrongful intent essential to criminal homicide, and,
when such act results in the death of another, may constitute
involuntary manslaughter.

“* Such an unlawful act alone, unaccompanied by negligence, is
insufficient. Potter v. State, 162 Ind. 213, 64 L. R. A. 942; State
vy. Horton, 139 N. Oar. 588, 1 L. BR. A. n. s. 991; Estell v. State,
51 N. J. Law, 182; Commonwealth v.'Adams, 114 Mass. 323;
People v. Pearne, 118 Cal. 154; State v. + Erollingers 162 N. Car.
618.” (Italics supplied.)

Le 243
bse

The first paragraph quoted from the Thiede case (supra) was
quoted with approval in People v. Pavlic (227 Mich. 562), which
held that selling intoxicating liquor resulting in the death of the
buyer through acute alcoholism and exposure to cold, does not
render the seller guilty of involuntary manslaughter in the
absence of intent or recklessness manifesting a reckless disregard
of human life, although the selling of intoxicating liquor was
made a felony by statute. To similar effect is Copeland v. State
(154 Tenn. 7).

In People v. Grieco (266 N. Y. 48, 52, supra) where the People
based a charge of manslaughter upon the contention that driving
an automobile while intoxicated constitutes a misdemeanor, this
court said of the People’s assertion: ‘‘ The intent to commit
the minor offense would make the driver guilty of the more
serious offense of manslaughter ’’ (italics supplied). It is
relevant to the present point that Grieco’s alleged guilt of man-
slaughter was founded upon an ‘“‘ intent to commit the minor
offense ’’. In the case at bar, the trial court held that the exist-
ence of an intent to commit the minor offense was irrelevant.

Allied to the neéd of establishing a criminal intent in order to
sustain’a conviction of manslaughter, is the issue that has
frequently arisen concerning whether manslaughter can be based
on accidental homicides growing out of any and every kind of
misdemeanor. In the able and exhaustive 1937 Report of the
Law Revision Commission to the Legislature upon this subject,
it was said: ‘‘ Most other states include provisions in their
statutes to the effect that homicide committed in the course of
a misdemeanor or in the course of an ‘ unlawful act’ less than
a felony is manslaughter. Courts, called upon to construe these,
have evinced a uniform reluctance to interpret the provision
literally, and manage to read into it limitations which materially
modify its rigor. As in the case of the felony murder rule, limi-
tations have been effected in two ways — the imposition of the
requirement of some causal connection between the underlying
offense and the homicide, and a limitation of the kind of unlawful
act which will be sufficient to furnish a basis for the charge of
manslatighter. Both are encountered in various forms: it is
variously’ stated merely that some causal connection must exist,
or that the homicide must be the natural and probable conse-
quence or the proximate result of the unlawful act. Still greater

244, Le

diversity exists in the statement of the law concerning the nature
of the misdemeanor. Some authorities emphasize that the under-
lying offense must be intrinsically dangerous to human life;
others, that it must be in violation of a statute designed to protect
human life. By far the greatest number assert, however, that
it must be malwm in se, and that an act only malum prohibitum
resulting in homicide is insufficient to subject the wrongdoer to
liability for manslaughter. Among the misdemeanors which
have been held to be insufficient under one criterion or another in
eases where the defendant was charged with homicide, are hunt-
ing on another’s land, carrying a concealed pistol, selling liquor,
and driving past a tollgate to evade payment of toll. Infractions
of laws regulating the operation of motor vehicles have been the
subject of greater controversy, but such acts, though sometimes
characterized as mala prohibita, are generally held to fall within
the provisions of statutes on manslaughter committed in the
course of unlawful acts.’? (1937 Report of N. Y. Law Revision
Commission, pp. 663-664.) .

A fatal automobile accident case bearing out the last statement
is People v. Darragh (141 App. Div. 408, affd. 203 N. Y. 527).
But in People v. Grieco (266 N. Y. 48, supra), a conviction in such
an instance ‘‘ was reversed by the Court of Appeals ’’, quoting
again from the Law Revision Commission’s Report (p. 746), ‘‘ in
an opinion which seems to adopt as its basis the dissenting opin-
ion in the Darragh case ’’ of Justice McLaveuur at the Appel-
late Division. It was held in Grieco that although driving an
automobile while intoxicated was a misdemeanor, it was not one
“ affecting the person or property, either of the person killed,
or of another ’’. The indictment was dismissed upon the ground
of merger also, for the reason that there was no separate, inde-
pendent crime in which the defendant was collaterally engaged
at the time of the homicide. The misdemeanor would simply
have been punishable as a felony. There is no doubt that death
at the hands of intoxicated drivers upon the public highways
is a public nienace, and the distinction is narrow between declin-
ing to hold that such a misdemeanor is aggravated into man-
slaughter where homicide accidentally results, and an opposite
conclusion where death flows from a violation of the Multiple
Dwelling Law also without any independent crime.

Pe 245
- =

The Grieco decision sprang from a realization of the need to
limit the application of subdivision 1 of section 1050 to serve
the ends of justice. As was said by the Law Revision Commis-
sion (Report, p. 744): ‘‘the statutes are honeycombed with
misdemeanor provisions. The probability is that most death-
resulting acts would come within some misdemeanor section. It
would be a most exceptional case in which the underlying act
would not be brought within at least one of these specific pro-
visions. In the second place, the Penal Law contains several
misdemeanor sections of a general and catch-all nature, which
in themselves cover a wide sphere of acts and would fill most of
the interstices that might be found to exist in the network of
specific misdemeanors.’’

Without attempting to define exactly how or where the opera-
tion of subdivision 1 of section 1050 should be confined, these
trenchant comments by the Law Revision Commission accent the
importance of holding that an accused shall at least have been
aware of the facts constituting the underlying misdemeanor
before he can be convicted of misdemeanor manslaughter. Sir
Matthew Hale, in his Pleas of the Crown, declared that homicides
in the course of any act malum prohibitum are neither murder
nor manslaughter (1st Amer. ed., 1847, Vol. 1, p. 428). Decisions
in many States and countries have been patterned on that idea.
Even if we are to hold that a misdemeanor which is malum pro-
hibitum can form the basis for a manslaughter conviction, the
defendant should at least have been aware of the facts consti-
tuting the misdemeanor.

Knowingly to neglect to provide proper means of egress in
case of fire would constitute malum in se in the form of culpable
negligence. That charge is not before us. Elimination of
knowledge of the existence of a statutory violation as a factor in
misdemeanors consisting in violations of the Multiple Dwelling
Law, renders such misdemeanors mala prohibita. No one ques-
tions that an owner is guilty of misdemeanor even though he is
ignorant of the building violation. But to have been found
guilty of misdemeanor manslaughter, a defendant should have
known at least of the existence of the underlying offense, yet
the trial court ruled and instructed the jury on this count in the
indictment, that not only was this defendant held to strict com-

246 Pe

pliance with this statute (which was correct so far as being
guilty of the misdemeanor went), but that neither ignorance of
the condition of the building nor of the Multiple Dwelling Law
was a defense to first degree manslaughter. This was almost
equivalent to charging the jury that he was guilty under the first
count as matter of law. Defendant’s counsel duly excepted to
these portions of the charge and to the rulings excluding evidence
of that character.

Service of a notice of violation is not essential to guilt of the
misdemeanor (People v. Schwartz, 298 N. Y. 551). It may
not have been essential to manslaughter based on misde-
meanor, if defendant knew the facts constituting the mis-
demeanor, although it was unfair for the People to have intro-
duced extensive evidence that defendant’s predecessor in title
was given frequent notices by the department of housing and
buildings which were not enforced during a period of nine years,
and then to have restricted defendant in showing lack of notice
to himself coupled with an instruction that lack of knowledge or
notice in any form could not exonerate him. In effect, this
conveyed the idea to the jury that the city department of housing
and buildings had already determined the facts necessary to
establish defendant’s guilt, while his predecessor was the owner,
and that nothing which happened afterward except the fire was
of any consequence. If absence of notice of violations from the
city to defendant meant nothing, even-handed justice would seem.
to inquire why repeated notices to his predecessor meant so
much?

One may assume from his familiarity with the building that
defendant knew that there was no outside fire escape or other
secondary means of egress. He may also have known that there
was no sprinkler system, which section 187 of the Multiple
Dwelling Law provides would have rendered secondary means
of egress unnecessary. A question of fact was presented
(except that the Trial Judge removed it from the jury), whether
he knew that the means of egress through the roof (scuttle) was
fastened down so as to be unavailable. In her harrowing account
of this fire in which her husband died, Mrs. Blizabeth Green
emphasized on the witness stand that she and her husband could
have éscaped through this exit to the roof, but did not attempt to
do so for the reason that defendant had told her that its covering

be | 247
esse

had been nailed down to prevent entrance by mischievous boys.
Defendant denied this conversation. The jury may have found
that Mrs. Green’s husband, who jumped to the ground, and the
other person whose life was lost might have been saved if they
could have used the escape to the roof. If the jury found, as the
District Attorney presented to the jury, that the exit to the roof
was closed, then it became especially important for them to have
considered whether defendant knew that this means of egress
had been eliminated. One of the jurors interrupted during the
charge by asking ‘‘ When a person buys a home, is there a law
that requires him at that time, before buying the home, to see
if there are any violations against it in the Housing Depart-
ment?’? No categorical answer was given to this inquiry, but
the instruction which was delivered amounted to an affirmative
reply. The effect was to tell the jury that defendant was guilty
of manslaughter.

The Appellate Division eliminated the sentence imposed on
the second degree manslaughter conviction, founded upon the
charge of culpable negligence. As I interpret this modification,
elimination of this sentence amounted to dismissal of the second
count, in view of section 1938 of the Code of Criminal Procedure
which states that conviction under one count bars prosecution
under the other if both have been based upon the same set of
facts. That is what the Appellate Division stated is the situation
here. However that may be, defendant’s conviction under
the second count could hardly have been affirmed in view of
instructions, duly excepted to, that knowledge or notice of
pending violations was irrelevant. Defendant might well have
been tried under that count alone, and his felony guilt or
innocence have been made to depend upon the really substantial
issue of culpable negligence.

The conviction should be reversed and a new trial granted.

Conway, Ch. J., Dusmonp, Furp and Burgs, JJ., concur with
Dvyz, J.; Vaw Vooruis, J., dissents in an opinion in which
Frozssex, J., concurs.

Judgment affirmed.

Murua Lire Iysurance Company, or New Yorx, Appellant-
Respondent, v. Tattorrp Woman, Ino., Respondent-Appel-
lant.

Argued May 26, 1955; decided July 8, 1955.

§

George A. Spiegelberg and Robert H. Preiskel for appellant-
respondent. I. The opinion and order of the Appellate Division
insofar as they reverse the trial court were wholly incorrect.
Until the fall of 1946, plaintiff had no knowledge that the fifth
floor had been altered to permit the operation of the private
elevators to that floor. Plaintiff learned for the first time late
in 1946 of the purported removal of the fur department to the
fifth floor and of defendant’s refusal to pay percentage rent on
fur sales after such removal. II. The determination of the trial
court is entitled to great weight whenever an issue of credibility
isinvolved. (Roberts v. Fulmer, 301 N. Y. 277; Amend v. Hurley,
293 N. Y. 587; Mason v. Lory Dress Co., 277 App. Div. 660;
Brunstein v. Brunstein, 273 App. Div. 847; Wells v. St. Louis,
282 App. Div. 1105; Vatner v. Mackey, 250 App. Div. 383.)
III. The Appellate Division erred in reversing the trial court’s
conclusions of law. (Cissna Loan Co. v. Baron, 149 Wash. 386.)
IV. Because of the complete dependence of the fur department
upon the main premises, the fur sales were in fact made ‘‘ on,
in or from ’’ the main premises within the meaning of the main
lease. Defendant was therefore required to pay as rent a per-
centage of such sales. (Kirke La Shelle Co. v. Armstrong Co.,
263 N, Y. 79; Genet v. President of D, é H, Canal Co., 136 N, Y.

0 s
esses

593; Goldberg, 168-05 Corp. v. Levy, 170 Misc. 292, 256 App.
Div. 1086; Cissna Loan Co. v. Baron, 149 Wash. 386; Gamble-
Skogmo, Inc., v. McNair Realty Co., 98 F. Supp. 440, 193 F. 2d
876; Seggebruch v. Stosor, 309 Ill. App. 385; Dunham & Co. v.
26 East State St. Realty Co., 134 N. J. Eq. 237.) V. If defend-
ant had succeeded in completely severing the fur department
from the main premises, it would constitute a breach of the main
lease. VI. Even if there were no express prohibition against
diversion of sales, it is clear that under the law of this and other
jurisdictions a tenant under a percentage lease is under an
implied covenant not to divert sales from the demised premises.
(Selber Bros. v. Newstadt’s Shoe Stores, 194 La. 654, 203 La.
316; Mayfair Operating v. Bessemer, 150 Fla. 1382; Wood v. Duff-
Gordon, 222 N. Y. 88; Alexander v. Equitable Life Assur. Soc.,
233 N. Y. 300; Kirke La Shelle Co. v. Armstrong Co., 263 N. Y.
79.) VII. Assuming, arguendo, that a diversion per se is not
actionable, it is clear that a diversion is actionable when, as here,
it was effected by operation of elevators which was contrary to
the express terms of the leases and made possible through an
unauthorized alteration. VIII. The fifth floor lease did not affect
defendant’s obligations under the main lease. The circum- |
stances existing at the time the fifth floor lease was signed clearly
show that a physical separation of the fifth floor and the main
premises was intended and specifically provided for by the terms
of the leases.

M. James Spitzer, Philip Feldman and Irving Fliegler for
respondent-appellant. I. Plaintiff did not sustain or prove any
damage and is entitled to no recovery. (Woollard v. Schaffer
Stores Co., 272 N. Y. 804; C. L. Holding Corp. v. Schutt Court
Homes, 307 N. Y. 648.) IL. Obligations may not be imposed
upon a tenant beyond those specified in the lease of the demised
premises. Additional liability should not be imposed through
implication. (Black v. General Wiper Supply Co., 305 N. Y.
386; Fogelson v. Rackfay Constr. Co., 300 N. Y. 334; Simon v.
Bigen, 218 N. Y. 589; Price v. Spielman Motor Sales Co., 261
App. Div. 626; Genet v. President of D.é H. Canal Co., 136 N.Y.
593; Dickey v. Philadelphia Minit-Man Corp., 377 Pa. 549;
Berland Realty Co. v. Hahne & Co., 26 N. J. Super. 477; Stockton
Dry Goods Co. v. Girsh, 36 Oal. 24 677; Cousins Investment Co.

ee 25)
ee

y. Hastings Clothing Co., 45 Cal. App. 2d 141; Masciotra v.
Harlow, 105 Cal. App. 2d 376.) ITI. The leases are to be con-
strued against the landlord. (Gillet v. Bank of America, 160
N. Y. 549; Moran v. Standard Oil Co., 211 N. Y. 187; 455 Seventh
Ave. v. Hussey Realty Corp., 295 N. Y. 166.) IV. The language
should be interpreted as plaintiff had reason to believe it would
be understood by defendant. V. Leases are to be construed in
the light of the surrounding facts at the time of their execution,
the circumstances out of which they grew, and the object of the
parties. (Smith v. Kerr, 108 N. Y. 31; Halperin v. McCrory
Stores Corp., 207 App. Div. 448, 239 N. Y. 547; Columbus Spa v.
Star Co., 216 App. Div. 218.) VI. Defendant had the right to
operate its private elevators to the fifth floor. In any event,
there was a waiver by plaintiff. The so-called non-waiver clause
was also waived. (Bovin v. Galiteka, 250 N. Y¥. 228; Lyon v.
Bethlehem Engineering Corp., 253 N. Y. 111; 57th St. Luce Corp.
v. General Motors Corp., 182 Misc. 164, 267 App. Div. 978, 293
N. Y. 717; Sol Apfel, Inc., v. Kocher, 272 App. Div. 758; Beatty
vy. Guggenheim Exploration Co., 225 N. Y. 380.) VII. The fur
sales took place on the fifth floor. (Matter of Franks, 154 Mise.
472; Link v. Kallaos, 56 F. Supp. 304.) VIII. The defenses of
accord and satisfaction and account stated should have been
sustained. (Rodkinson v. Haecker, 248 N. Y. 480; Matter of
Bartlett, 272 App. Div. 1068, 298 N. Y¥. 747; Robinson v. Miller,
210 App. Div. 450; Hudson v. Yonkers Fruit Co., 258 N. Y. 168;
Schnell v. Perlmon, 238 N. Y. 362; Fuller v. Kemp, 138 N. Y.
231; Nassoiy v. Tomlinson, 148 N. Y. 326; Milford Spinning &
Weaving Corp. v. Manowitz, 203 App. Div. 415; Hettrick Mfg.
Co. v. Barish, 120 Mise. 673.) IX. Plaintiff relies on evidence
improperly admitted because withheld from its numerous bills
of particulars.

Dusmonp, J. The facts of this controversy, and the issues, are
set forth and discussed in the Appellate Division opinion. We
will limit ourselves to a statement of our views on the principal
questions of law.

Since plaintiff is suing for additional percentage rental under
the 1989 ten-year lease of the three lower floors of 742 Fifth
Avenue, New York City, it must base its claim on the covenants
of that lease. Two only of those covenants are pertinent. We

252

take them up in turn. The 4% percentage rental was to be paid
on all sales made ‘‘ on, in, and from the demised premises ’’.
After, by separate leases made in 1945, defendant had taken
over from plaintiff part of the fifth floor (and the eighth floor,
not involved here), defendant made it a practice to pay commis-
sions, on fur sales made on the fifth floor, to salespeople on the
lower floor who sent customers to the fifth-floor fur department.
We think it not unreasonable to hold, with the Appellate Division,
that such sales were, within the lease’s intent, made ‘‘ from ”’ the
main store and so subject to percentage rent. Such sales may
be considered ‘‘ main store ’’ sales, as if a clerk in response to a
telephone call took merchandise to a customer’s home, and there
effected a sale. It would be going too far, though, to hold that
all fur sales were made ‘‘ from ’’ the lower store simply because,
as hereinafter more fully explained, the fur department was
moved up to the fifth floor after that floor had been ‘‘ integrated ”’
with the main store.

By the other language (of the 1939 percentage lease) which we
find pertinent, the tenant promised that the store it would con-
duct in the lower three floors would ‘‘ at all times contain a stock
of first class merchandise ’’ and would ‘‘ be conducted and main-
tained in a manner substantially similar to the Tenant’s present
store at #729 Fifth Avenue ’’ (that is, the store across the street
from which defendant was moving). That verbiage is to be read
with the purpose clause (of that same 1939 lease) which pre-
scribed the sale of all kinds of women’s apparel and accessories.
Here, again, we agree with the Appellate Division that no more
was intended than an agreement that there should be conducted,
on the three lower floors of 742 Fifth Avenue, under the percent-
age lease, a woman’s clothing shop of the same general character
as defendant’s store across the street. If plaintiff had desired
further restrictions as to kinds of merchandise, etc., it should
have insisted on them. Absent fraud or trickery (and the find-
ings properly say there was none), defendant could carry on its
business in the way that suited it so long as it did not deviate
from those very broad and general lease specifications.

In 1945, defendant, needing more space, bought out a custom-
made dress business which had been conducted in part of the
fifth floor by another concern and made with plaintiff a new
lease of that space at a flat no-percentage rent. Again, the

lease terms went no further as to purpose than to state that
the added space was to be used for the sale of female wearing
apparel and accessories and for workrooms. The fifth-floor
custom-made dress department was not successful and was soon
discontinued. Defendant then made such physiéal changes in
the building that two elevators, which had theretofore served
the first three floors from inside the main store, now could be,
and were, used to carry passengers inside the store not only to
and from the first three floors but to and from the fifth floor, also
(and the eighth floor, although that is not important here). The
result was that the first, second, third and fifth floors were, as
the phrase goes, ‘‘ integrated ’’ into one store fronting on Fifth
Avenue and served by elevators reached through the main store
from the Fifth Avenue entrances. Formerly, the fifth floor
could be reached by the use of two other elevators only, to which
elevators entrance was from the side street lobby on the 57th
Street side of the building. Then defendant moved its fur
department to the fifth floor, and thereafter paid no percentage
rent on fur sales.

Trial Term held that plaintiff did not acquiesce in these
changes. The Appellate Division held that it did. The question
of fact is a close one but, acquiescence or not, we think the
undisputed facts forbade a recovery here by plaintiff of
more than the percentage on certain fur sales, hereinbefore
described as made on the fifth floor, but ‘‘ from ”’ the lower floors.
There is nothing in the main lease to forbid the moving of the
fur department and when plaintiff made the second, or fifth
floor, lease, it again failed to include any restrictions as to
particular kinds of merchandise to be sold in one or the other
part of the building. It is clear enough that plaintiff did not
contemplate, when it leased the fifth and eighth floors for a flat
rental, that the fifth floor would be ‘‘ integrated ”’ with the lower
floors into one store but such lack of foresight does not create
rights or obligations. True, the second lease said that it would
“* not have any effect ’? on the earlier lease but the effect of the
two leases, read together and enforcing both, was that defendant
had the right to sell all kinds of women’s apparel, etc., in any
part of the four floors, so long as no other use was made of the
premises, As we see it, defendant merely exercised that right

2 ee
ee
when it moved the fur department. As to changing the elevator
doors, if that were a violation of any implied covenants (certainly
not of an express covenant) redress could be had by injunction
or, perhaps, by the landlord putting the elevator doors back as
they had been and charging the expense to the tenant. But.such
violations (if they were violations) could not result in a liability
for additional rent not promised in the lease. Except as to the
fur sales to customers sent upstairs, there were -no additional
sales ‘‘ on, in or from ’’ the premises covered by the percentage
lease, even though certain activities with.respect to furs
continued to be carried on in the lower store.

In the view we take of the case, it is unnecessary to engage in
interesting but unproductive computations or speculations as

* to whether or not the new ‘‘ integrated ’’ store actually produced.
more percentage rent for plaintiff than if the fur department
and the elevators had not been changed. It is the fact, though,
that plaintiff proved no loss in that respect.

In deciding this case as we do, we are not moving away from
the good old rule that there is in every contract an implied
covenant of fair dealing (Kirke La Shelle Co. v. Armstrong Co.,
263 N. Y. 79). Defendant, as we see it, was merely exercising
its rights. Nor do we reject such authorities.as Cissna Loan Co.
v. Baron (149 Wash. 386) which penalize unconscionable diver-
sion of business from percentage-lease premises to others. The
present case does not fit into that pattern. :

The judgment should be affirmed, without costs.

Burszz, J. (dissenting). The defendant is liable for additional
percentage rental under the 1939 ten-year lease of the premises
742 Fifth Avenue, New York City, for sales of furs made on the
fifth floor, as they were sales made on, in and from the main
premises. ‘

This appeal involves conflicting constructions of two leases
entered into between the plaintiff and defendant.

The defendant was the lessee under a 1939 lease of three floors
with the exclusive use of a Fifth Avenue entrance, an entrance
on 57th Street and two passenger elevators. Those premises,
known as 742 Fifth Avenue, were leased at a fixed rental, plus
4% of the gross receipts in excess of $1,200,000. ‘‘ Gross
receipts ’’ is defined in the lease as including ‘‘ allsales * * *

| es 255
be

on, in or from the demised premises ’’. In the spring of 1945,
the proprietor of a retail custom dress business, the tenant of
half of the fifth floor at 1 West 57th Street, offered her business.
for sale. The defendant purchased the custom dress business
and thereafter, under a fixed rental lease commencing June 1,
1945, the defendant rented the same space on the fifth floor in
the premises known as 1 West 57th Street, New York City, ‘‘ for
the sale, display of all types of wearing apparel accessories,
worn or carried by women or misses, and as workrooms, and for
no other purpose ’’. Such lease provided (1) that the space on
the fifth floor in 1 West 57th Street was to be serviced by the
elevators in the 57th Street lobby at the landlord’s expense ‘‘ on
business days from 8 a.m. to 6 p.m. except on Saturdays when the
hours shall be from 8 a.m. to 1 p.m.’’; (2) that no alterations
could be made without the written consent of the landlord;
(8) that failure to’ require strict performance was not to be
deemed a waiver, and (4) that the receipt of the rent with the
knowledge of a breach was not to be deemed a waiver. The
defendant in: a short time altered the fifth floor of 1 West 57th
Street, so as to give access through the private elevators of
742 Fifth Avenue.

The plaintiff alleges two causes of action. The first cause of
action is based upon the theory that the fur sales were made
“¢ oxi, in or from ’’ the main premises. All of the activities of the
defendant from the initiation of the alterations to the actual
sales were designed to hold out to the public that the fur depart-
ment was part of the premises 742 Fifth Avenue. The physical
layout, the advertising, the window displays, the storage of the
furs, and the use of the main store personnel characterized the
fur department as an integral part of the main store operations.
The second cause of action seeks damages upon the theory that
if fur sales-were not made ‘‘ on, in or from ’’ the main premises,
nevertheless, the defendant, in removing the fur department
from the main premises, violated express and implied covenants
of the main lease against diversion of sales. It is implicit in
every percentage rental agreement that the tenant has an obliga-
tion to conduct its business with regard for the landlord’s
interest in the tenant’s gross receipts. ‘‘.A promise may be
lacking, and yet the whole writing may be ‘ instinct with an
obligation,’ imperfectly expressed ’’, (Wood v, Duff-Gordon,

256 ee

222 N. Y. 88, 91; Alexander v. Equitable Life Assur. Soc., 233
N. Y¥. 300, 306). Unless a percentage rental agreement is so
-interpreted, the percentage requirement would have no meaning.

The question to be resolved is whether under the terms of
the leases and the proof adduced at the trial, the plaintiff is
entitled to recover on one or both causes of action. Both causes
of action are well founded.

There is no doubt that the sales were made “‘ on, in or from ”’
the main premises. The evidence shows that the furs were
delivered to the basement of the main store, prepared for display
there, stored in the basement of the main store, packed and
shipped out from the main store premises. The entire fur
business was administered and conducted in the Fifth Avenue
premises, yet the defendant would have us construe the leases
so as to permit it to operate a fur department as part of a main
store in a space with an address different from the address set
forth in the lease of that space, doing a business with average
annual gross receipts of over $600,000, for a fixed rental of
$3,800 a year free from the percentage provisions of the main
store lease. The leases fail to disclose such an authorization.
The 742 Fifth Avenue lease limited the exclusive use: of the
entrances and elevators to three floors and basement. The
1 West 57th Street lease prohibited alterations without consent,
and also prohibited any interference with the premises 742 Fifth
Avenue.

We can perceive no distinction between the customer who was
sent to the fifth-floor fur department by salespeople on the lower
floors, and the customers who responded to the advertisements
or displays that proclaimed that the defendant’s fur department
was located at 742 Fifth Avenue. All of these customers were
patrons of the Fifth Avenue Tailored Woman store, and were
attracted to that store by the advertisements and window dis-
plays using the Fifth Avenue address. Therefore, it necessarily
follows that the terms of the lease of 742 Fifth Avenue must
apply to all transactions taking place at that address.

Moreover in every contract there is an implied covenant that
neither party shall do anything which shall have the effect of
injuring or destroying the right of the other party to receive
the fruits of the contract. (Kirke La Shelle Co. v. Armstrong
Co., 263 N, ¥, 79.) The defendant cannot make a virtue of a

Se 257
esses

violation of the lease. It made alterations without the written
consent of the landlord of 1 West 57th Street. It violated the
prohibition in paragraph 36 of the 1945 lease that the said lease
was not to have any effect on the lease dated June 29, 1939,
between the Mutual Life Insurance Co. of New York and the
Tailored Woman, Ine. (1) by moving its fur department to the
fifth-floor space from a lower floor, and (2) by advertising that
the fifth-floor space described in the lease as space in the building
known as 1 West 57th Street was located at 742 Fifth Avenue.
The consequence of these violations was to bring about the
condition wherein the defendant was using a Fifth Avenue
address and sales space for the sale of furs at a rental rate of
a side-street office salesroom.

Furthermore, under the terms of the 742 Fifth Avenue lease,
the defendant agreed to maintain a business substantially similar
to that which it had maintained at 729 Fifth Avenue, where the
defendant had a fur department. As a result of the removal
of the fur department to the fifth floor, the plaintiff was deprived
of a substantial portion of the fruits of the contract. By exclud-
ing the fur sales from the calculations required by the percentage
terms of the lease, the defendant excluded almost 20% of the
average gross receipts collected at the premises 742 Fifth
Avenue. Such an act constitutes an unreasonable diversion of
business from a percentage leased premises to a fixed rental
premises.

The intent of the parties as expressed in the two leases was
that the fifth-floor space at 1 West 57th Street would be operated
independently of the main premises. For example, the landlord
by lease restricted the use of the elevators in 1 West 57th Street
by providing that they would operate only until 1:00 p.m. on
Saturdays and 6:00 p.m. on business days, whereas the elevators
in 742 Fifth Avenue were within the absolute control of the
defendant and could operate until 6:00 p.m. or later on Satur-
days, business days and legal holidays only to the third floor.

The rent fixed for the fifth-floor space reflects the restrictions
imposed on doing business in an off-street office salesroom space
which is not serviced on Saturday afternoons or on legal holi-
days. Such restrictions are not incompatible with the use
permitted by the 1 West 57th Street lease, ie. the sale and
display of women’s wearing apparel. Such uses are commonly

so restricted. In this very case the former tenant on the fifth
floor was engaged in the women’s wearing apparel business.
The limitation of the use of the elevators to five and one-half
days as well as the necessity of sharing the use of the elevators
with the other tenants in 1 West 57th Street make it clear that
any permitted diversion of business from the main store was
intended to be confined to a five and one-half day operation with
all the inconvenience of sharing public elevators. Naturally,
these conditions in themselves forbid the transfer of a major
department from the main store to the off-street office salesroom.

Since the defendant, in order to avoid the restrictions of the
1 West 57th Street lease, elected, in violation of the provisions
of the leases, to operate part of the fifth floor as an integral
part of the main premises and to make fur sales on, in and from
the main premises, it has subjected the gross receipts collected
from these operations to the percentage rental terms of the
main store lease. Such a conclusion is supported by the evi-
dence, by a common-sense interpretation of the leases, and by
the prevailing law in other jurisdictions. (Cissna Loan Co. v.
Baron, 149 Wash. 386; Gamble-Skogmo, Inc., v. McNair Realty
Co., 98 F. Supp. 440, affd. 193 F. 2d 876; Dunham & Co. v. 26 East
State Realty Co., 134 N. J. Hq. 237.)

The judgment of the Appellate Division should be reversed
and the judgment of the Trial Term reinstated.

Dyz, Fuup, Frozssez and Van Vooruis, JJ., concur with
Desmonp, J.; Burge, J., dissents in an opinion in which Conway,
Ch. J., concurs.

Judgment affirmed.
De

Jacos Goopman & Co., Inc., Appellant, v. New Yorx Tutmpnona
Company et al., Respondents. (Action No. 1.)

Jacos Goopman & Co., Lvo., Appellant, v. New Yorx TunupHone
Company et al., Respondents. (Action No. 2.)

Argued April 22, 1955; decided July 8, 1955,

Harry J. Halperin, Bernard Buchwald and Edmund B. Henne-
feld for appellant. I. Both complaints are legally sufficient.
Il. The Court of Appeals will not now be bound along res judi-
cata lines by anything decided by the Appellate Division in
Action No. 1, since the decision of the Appellate Division in that
action is presently before the court. (Brick v. Cohn-Hall-Marx
Co., 283 N. Y. 99, 288 N. Y. 772; Cohen & Sons v. Lurie Woolen
Co., 232 N. Y. 112.) IIL. The acts of the telephone company in
charging and collecting at the 3% rate on subscriber calls to
Nassau County and lower Westchester County are clearly
illegal. (Matter of Gunther’s Sons v. McGoldrick, 279 N. Y.
148; Matter of United Artists Corp. v. Taylor, 273 N. Y. 334.)
IV. In this situation of a claimed illegal charge to consumers,
the courts have at least concurrent jurisdiction with the Public
Service Commission to determine the question of law as to the
legality of the charge being made, and the court below erred in
remitting plaintiff for relief first to the Public Service Commis-
sion. (Kovarsky v. Brooklyn Union Gas Co., 279 N. Y. 304;

ee 261

helrob, Inc., v. Barrett, 293 N. Y. 442; Lemoyne Arms v. Cen-
‘al N. Y. Power Corp., 191 Mise. 709; Great Northern Ry. v.
erchants Elevator Co., 259 U. &. 285; Pennsylvania R. R. v.
uritan Coal Co., 237 U. 8. 121; Pennsylvania R. R. Co. v. Inter-
ational Coal Co., 230 U. S. 184.) V. The authorities establish
e clear right of a consumer to bring a representative action
m behalf of himself and all other consumers similarly situated
declare the illegality of such a charge on consumers made by
utility. It was error in any case for the court below to dismiss
der rule 106 since a motion under rule 106 in an action for
eclaratory judgment has been always held not to raise the
uestion of the ultimate right of either party to prevail as upon
trial necessitated by the presence of disputed issues of fact
the case. (Kovarsky v. Brooklyn Union Gas Co., 279 N. Y.
04; Brenner v. Title Guar. & Trust Co., 276 N. Y. 230; Rockland
ower & Light Co. v. City of New York, 289 N. Y. 45.) VI. The
jourt below erred in dismissing the cause of action for an injune-
ion. The authorities establish the clear right of a consumer
lo bring a representative action on behalf of himself and all
ther consumers similarly situated to enjoin the threatened con-
nuance by a utility of illegal charges such as here complained
f. (Kovarsky v. Brooklyn Union Gas Co., 279 N. Y. 304; Sloane
states v. City of New York, 175 Mise. 674, 262 App. Div. 722,
87 N. Y. 818.) VII. In the case at bar, there exists a limited
tand presently in the possession of the telephone company, which
is held by that company in a trust or fiduciary capacity on behalf
f the body of consumers from whom the moneys were lawfully
laken as the proper cestuis. (Latham v. Father Divine, 299
. Y. 22; Equity Corp. v. Groves, 294 N. Y. 8; Beatty v. Guggen-
eim Exploration Co., 225 N. Y. 880; Acker v. Hanioti, 276 App.
‘iv. 78, 276 App. Div. 894; Stephens v. Evans, 190 Misc. 922.)
II. Plaintiff and the other consumers similarly situated from
hom the moneys were unlawfully taken are entitled in this
epresentative action to relief by way of enforcement of their
rust againstthe fund on a proper, equitable basis in accordance
ith, and apportioned to, the amounts taken from each. (Flana-
an v. City of Chicago, 311 Ill. App. 185; Brenner v. Title Guar.
Trust Co., 276 N. Y. 230; Commonwealth v. Scott, 112 Ky. 252;
‘cCann v. City of Louisville, 23 Ky. L. 558; Locke v. City of
etroit, 835 Mich. 29; Peterson v. Donnelley, 33 Cal. App. 2d

133; Washington Gas Light Co. v. Baker, 188 F. 2d 11; Natural
Gas Pipeline Co. v. Federal Power Comm., 128 F. 2d 481; Guf-
fanti v. National Sur. Co., 196 N. Y. 452; Pfohl v. Simpson, 74
N. Y. 187.) IX. The right of plaintiff and other consumers simi-
larly situated to share in the trust fund presently in the tele-
phone company’s possession, is in all respects prior and superior
to the claim of the City of New York to obtain possession of
this fund for itself. (Matter of Kesbec, Inc., v. McGoldrick,
278 N. Y. 293.)

Frank A. Fritz, Ralph W. Brown, Arthur P. West, Anthony
T. Antinozei, Frank A. Fritz, Jr., Eric B. Nelson and Philip
Wagner for New York Telephone Company, respondent. I. In
Action No. 1 the complaint fails to state an individual or a rep-
resentative cause of action either for an accounting, declaratory
judgment or injunction, and dismissal thereof was proper.
(Bouton v. Van Buren, 229 N. Y.17; Kovarsky v. Brooklyn Union
Gas Co., 279 N. Y. 304; Brenner v. Title Guar. & Trust Co., 276
N. Y. 230; Society Milion Athena v. National Bank of Greece,
281 N. Y. 282; Bickford’s v. Federal Reserve Bank of N. Y..
5 F. Supp. 875; Reinman v. Jaffe, 281 App. Div. 833; Adelson v.
Sacred Associates Realiy Corp., 192 App. Div. 601; Dinkes v.
Glen Oaks Vil., 206 Mise. 143; Kahn v. New York Life Ins. Co.
184 Mise. 417; Matter of American Cyanamid & Chem. Corp. v.
Joseph, 308 N. Y. 259; Matter of Fifth Ave. Bldg. Co. v. Joseph,
297 N. Y. 278; Matter of Merchants Refrig. Co. v. Taylor, 275
N. Y. 113.) IL. The decision and transcript of the hearing held
by the commission are proper subjects for judicial notice on a
motion such as this. (Pfleuger v. Pfleuger, 304 N. ¥. 148; Owen
vy. Rochester-Penfield Bus Co., 304 N. Y¥. 457; Sease v. Central
Greyhound Lines, 281 App. Div. 192, 306 N. Y. 284.) III. In
Action No. 2, since the complaint fails to state an individual or
a representative cause of action either for an accounting, declar-
atory judgment or injunction, the dismissal thereof by the Appel-
late Division was proper. (Kennerley v. New York Tel. Co.
273 App. Div. 964, 299 N. Y. 623; Lerner v. Glickstein & Terner,
Inc., 283 N. ¥. 299; Kovarsky v. Brooklyn Union Gas Co., 279
N. Y. 304; Cardone v. Consolidated Edison Co. of N. Y., 197
Misc. 188, 276 App. Div. 1068; Matter of Leitner v. New York
Tel. Co., 277 N. Y. 180; Murray v. New York Tel. Co., 170 App.
Div. 17, 226 N. Y. 590; People ex rel. Public Service Comm. v.

| 263

New York Tel. Co., 262 App. Div. 440, 287 N. Y. 803.) IV. The
Appellate Division did not remit Action No. 2 to the Public
Service Commission for a determination of the question of the
legality of the collection of sales tax. V. The directive by
Special Term that ‘‘ the status quo of the funds is to be main-
tained ’’ was properly reversed. VI. Under the notice of motion
herein, it is proper to dismiss the entire complaint, or such
causes of action, or parts thereof, as fail to state facts sufficient
to constitute a cause of action for an accounting or a declaratory
judgment or an injunction. (Andrews v. Lebis, 279 App. Div.
1013; Young v. Taber, 284 App. Div. 829; O’Conner Transp. Co.
v. Glens Falls Ins. Co., 204 App. Div. 56; Koppel Ind. Car &
Equipment Co. v. Portalis & Co., 205 App. Div. 144; MacArthur
Concrete Pile Corp. v. Kew Queens Corp., 276 App. Div. 1015;
Savage v. Mathieson Alkali Works, 174 Mise. 1022, 261 App. Div.
1053.)

Peter Campbell Brown, Corporation Counsel (Morris L.
Heath, Stanley Buchsbaum and Charles M. Fox of counsel), for
City of New York, respondent. I. Sales tax moneys collected
and held by a vendor for transmittal to the city are not subject
to an accounting action on behalf of the persons who paid the
tax, but must be paid over to the city without prejudice, however,
to such remedies at law as the persons paying the tax have
against the city. (Matter of American Cyanamid & Chem. Corp.
v. Joseph, 308 N. Y. 259; People ex rel. Martin v. Brown, 55
N. Y¥. 180; Village of Olean v. King, 116 N. Y. 355; Matter of
Kesbee, Inc., v. McGoldrick, 278 N. Y. 293; McGoldrick v. Ber-
wind-White Co., 309 U. 8. 33; Matter of Gunther’s Sons v.
McGoldrick, 279 N. Y. 148; Matter of Atlas Television Co., 273
N. Y. 51; City of New York v. Advance Trading Corp., 202 Misc.
208.) II. The vendor, the purchaser and the city are all fully
protected if the vendor is required to pay over to the city all
the tax moneys that it collects. (Matter of Kesbec, Inc., v.
McGoldrick, 278 N. Y. 293; Matter of Gulf Oil Corp. v. McGold-
rick, 282 N. Y. 622; Sloane Estates v. City of New York, 175
Misc. 674, 262 App. Div. 722, 287 N. Y. 818.) III. The funds in
the telephone company’s possession simply represent overpay-
ments of taxes by plaintiff and other subscribers. They do
not constitute a trust fund held for the benefit of subscribers.

264 ee
nnn

Nor is the telephone company a constructive trustee with respect
to such funds. (Lerner v. Glickstein & Terner, Inc., 283 N. Y.
299 ; Cohen v. City Co. of N. Y., 283 N. Y. 112; Potter v. Walker,
276 N. Y.15; Bouton v. Vam Buren, 229 N. Y.17; Empire Square
Realty Co. v. Chase Nat. Bank, 181 Misc. 752, 267 App. Div.
817; People ex rel. Martin v. Brown, 55 N. Y. 180; Kovarsky v.
Brooklyn Union Gas Co., 279 N. Y. 304.) IV. Equity will not
intervene in a case such as this where plaintiff by the slight
effort of tabulating its suburban calls can avoid tax on such
calls, since the right it seeks to protect is a technical and unsub
stantial one and it would produce great public hardship if the
relief plaintiff seeks were granted. (McCann v. Chasm Powe:
Co., 211 N. Y. 301; O'Reilly v. New York Elevated R. R. Co.
148 N. Y. 347; Gray v. Manhattan Ry. Co., 128 N. Y. 499; Mor.
gan v. City of Binghamton, 102 N. Y. 500; McHenry v. Jewett
90 N. ¥. 58; Michaels v. Macan Estates, 278 App. Div. 47; Knoth
y. Manhattan Ry. Co., 187 N. Y. 243.) V. Equity will not requir
an accounting if it is a useless gesture due to the great numbey
of persons involved, the prohibitive cost of determining eacl]
person’s share and the practical impossibility of returning mord
than a nominal amount to each person entitled to share in th
accounting. (Gueutal v. Gueutal, 113 App. Div. 310.)

Froussex, J. These two actions challenge the propriety of th

billing method in use by the New York Telephone Company
(hereinafter called the Company) since 1950. At that ir

following hearings before the Public Service Commission (here;
inafter called the Commission), the Company extended its Ne
York City dial system into Nassau and lower Westcheste:
counties, and thereafter, in pursuance of its duty to collect th
New York City sales tax, billed plaintiff, and other subscriber:
similarly situated, 3% on concededly nontaxable calls dialed t
points outside the city limits as well as on admittedly taxabl
local city calls, due to the inability of the Company’s equipmen’
to differentiate between such calls.

In the first action, the Company, under rule 106 of the Rules o:
Civil Practice, and the City of New York (hereinafter called th
Gity), under rule 212 of the Rules of Civil Practice, moved t
dismiss plaintiff’s complaint. Both motions were granted with]
out leave to amend, and the Appellate Division affirmed. We al]
agree that this complaint was properly dismissed.

ee 265

The second action was commenced on a new and broader
omplaint designed to remedy the deficiencies of the first com-
aint. In the present pleading, plaintiff sought by way of relief
(1) a judgment pursuant to section 473 of the Civil Practice Act,
leclaring ‘‘ the rights and other legal relations ’’ of the parties;
(2) to restrain the Company from charging 3% on suburban
alls, from paying any of the challenged charges to the City,
nd to restrain the City from requiring payment of said charges;
(3) to compel the Company to install new equipment, systems
nd procedure that will differentiate local from suburban calls;
(4) for an accounting from defendants; and (5) for temporary
injunctive relief and counsel fees.

Both defendants again moved, this time under rules 106 and
07 of the Rules of Civil Practice, to dismiss plaintiff’s com-
laint, which motions Special Term denied. The Appellate
ivision unanimously reversed and dismissed the complaint

der rule 106. It did so ‘‘ without prejudice to any action or
roceeding plaintiff may be advised to institute after the Public
ervice Commission (on its own motion or on complaint), in the
irst instance, has made a determination on the reasonableness,
ropriety, adequacy and sufficiency of the practices and services
erein involved ’’, The Appellate Division, moreover, modified
n. the law, a direction of Special Term that, while an injunction
endente lite would he ‘‘ denied ’’, the ‘* status quo of the funds
s to be maintained ’’ pending the determination of the issues
In a trial; plaintiff’s motion was thus denied ‘‘ unqualifiedly ”’,
stead of ‘‘ qualifiedly ’’.

We agree with the well-reasoned unanimous opinion of the
ppellate Division. The Company, in extending its dial system
ith the approval of the Commission, was nevertheless mandated
yy the sales tax law of the City to collect sales taxes. Recogniz-

ng that to a comparatively small extent it was collecting excess

arges in its compliance with the sales tax law, the Company

ranged to make appropriate refunds to subscribers upon
pplication. Plaintiff concedes that these moneys were not col-
lected ‘‘ as tax ’’ but only ‘‘ as an inevitable incident and concom-
tant of its actual tax collection ’’. There is thus in no event any
asis for an accounting decree here, since the Company, an
cknowledged debtor, has at all times been willing to refund to

266 |
ee

any subscriber-creditor upon simple application therefor the
amount he claims to be due.

Nor is there any justiciable controversy here. If, by plaintiff’s
demand for declaratory judgment, the court is being asked
merely to declare what both defendants admit, namely, that
suburban calls are not taxable and that the Company has no
right to keep any moneys not properly chargeable, the requisite
“ actual controversy ’’ is lacking and no declaratory judgment
may be had (New York Operators v. State Lig. Auth., 285 N. Y.
272, 276; James vy. Alderton Dock Yards, 256 N. Y. 298, 305;
5 Carmody on New York Practice, § 1960; Borchard on
Declaratory Judgments [2d ed.], pp. 33-48). The situation is
thus quite unlike Kovarsky v. Brooklyn Union Gas Co. (279 N. Y.
304) for there the company claimed it had the right to collect
and retain for itself service charges which were expressly pro-
hibited by law, and there were none of the drastic consequences
here involved. Furthermore, even if the declaration sought by
plaintiff is to the effect that the Company may not utilize the
particular system in question to collect 3% on all dialed calls
and provide for refunds to subscribers who are thus over-
charged, then the court below was entitled to refuse to entertain
the application in its discretion under section 473 of the Civil
Practice Act, and rule 212 of the Rules of Civil Practice —
whether or not motion was made therefor — until after plaintiff,
first sought relief provided for elsewhere, specifically, before the
Commission in a determination of ‘‘ the reasonableness, pro-
priety, adequacy and sufficiency of the practices and services
herein involved ’’. Where such an ‘‘ adequate remedy is already,
provided ’’, and there is thus no real need for resorting to a
declaratory judgment, the court, in its discretion, may decline
to accept jurisdiction and deny such relief (Bareham v. City of
Rochester, 246 N. Y. 140, 148; James v. Alderton Dock Yards,
supra, p. 305).

Plaintiff alleges that the Company could overcome its present
inability to differentiate between local and suburban calls by,
installing new equipment, systems and procedures — a not incon-
sequential undertaking, and a matter that is’ clearly within the|
jurisdiction of the Commission, The Appellate Division appro-
priately recognized that the latter body, created ‘by law even
as are the courts, is in a much better position, with its superior

ee 267

expert engineering staff and other facilities, to determine
‘whether or not at the present time the Company may introduce
a dial or other system which will differentiate local from sub-
urban calls, and to make appropriate orders with far greater
flexibility than the courts.

The injunctive relief sought here is sweeping; it might seri-
ously interfere with the Company’s duty to collect the sales tax
concededly due; and the direction that the Company install an
entirely new system, with all its consequences, is one that should
not be made — at least until the Commission has acted. As to
the restraint sought to be imposed upon the Company from
paying to the City the amounts collected, this is an issue not
presented by the pleadings and is not properly before us.

Under all the circumstances, we are of the opinion that the

ppellate Division not only exercised sound judgment, but it

ad the power to do what it did in the exercise of discretion, both
las to declaratory and injunctive relief, with which we have no
ight to interfere.

The judgments in both actions should be affirmed, without
costs.

Desmonp, J. (dissenting). I agree that, as these cases come
© us, We may ignore the first complaint, and examine, as to
sufficiency, the complaint in Action No. 2, only. I agree, too,
that, for several reasons, the cause of action for an accounting,
eing the sixth count in Complaint No, 2, is inadequate.
However, Complaint No. 2 does include a sufficient cause of
ction for a declaratory judgment and a sufficient cause of action
‘or an injunction. The basic ground asserted for relief is that
defendant telephone company, with the at least passive acquies-
cence of defendant city, has been carrying on for five years
ind intends to continue an illegal practice of collecting from the
elephone subscribers taxes concededly not owed by the latter.
at the company has no present method of distinguishing
etween taxable and nontaxable messages, explains but does not
justify the illegality. The telephone company acts as to these
axes as the city’s collecting agency only and holds as trustee for
he city the tax moneys when collected as such (Administrative
Code of City of New York, § N41-2.0; Matter of American
Cyanamid & Chem. Corp. v. Joseph, 308 N. Y. 259; New York

268 re
ee

City Comptroller’s Sales Tax Regulations, art. 2). Nevertheles
the company has matched and followed its unlawful acts
collecting taxes on nontaxable telephone calls by an unlawf
assumption of the role of a court or an administrative tribunal i
refunding some of those taxes, at the company’s own will an
through procedures formulated by it. The long and short
it is: when this company or anyone else collects money as an
for such local taxes, the collector’s only duty or power is to tur]
the money over to the city. If there are to be refunds, thl
statute itself provides the procedure (Administrative Cod
§ N41-8,0).

Declaratory judgment relief has been denied to plaintiff bj
the courts below, not in the exercise of discretion (see Rules Ci
Prac., rule 212) but on the ground that there is no justiciab!
dispute between plaintiff and either defendant. All parti
agree that the collection of these New York City local taxes
telephone calls to extra-city points is forbidden by the applicab!
statute (L. 1934, ch. 873, subd. 1, as last amd. by L. 1952, ch. 232
But from that it does not follow that there is no dispute for #
courts to settle. Defendant telephone company, while admitti
invalidity asserts necessity and tells us that there is no oth
way of charging for these calls, in the first instance, and that
intends, therefore, to continue its present practices. Thus,
justiciable controversy exists not as to whether Manhatta:
Westchester calls are taxable but as to whether defendant tel
phone company may continue to force its subscribers to pay tax
not due and require those subscribers to submit to the company,
private procedures as to refunds. Whether or not the cour
will in the end enter a declaratory judgment, and, if so, w!
will be its terms, is not now before us on this motion to dismi:
the complaint for insufficiency.

Similar reasons require the validation of the injunction co
in Complaint No. 2. We are told that resort should first be h
to the Public Service Commission on the theory that plaintiff
grievance is as to the adequacy of the company’s service, equi:
ment or practices (Public Service Law, § 97, subd. 2). Not |
The wrong plaintiff alleges is the illegal collection by the pub!
utility of taxes not statutorily authorized. Kovarsky v. Brookl
Union Gas Co. (279 N. Y. 304) established the rule in such situ:
tions that ‘‘ direct application for relief may be made to 4

Me 269
ee

court ’’. This is not a mere review of a Public Service Commis-
sion determination, since the commission has never authorized
this tax collection procedure. Whether an injunction is in the
end to be granted must await a trial, but it will not do to put
plaintiff out of court without a trial.

In the view I take, it is unnecessary to decide whether this is
an individually-brought or representative-type action.

In Action No. 1, the judgment appealed from should be
affirmed, without costs.

In Action No. 2, the judgment appealed from should be modi-
fied so as to provide for the dismissal of the sixth cause of action
only, without costs.

In Action No. 1: Conway, Ch. J., Dasmonp, Dyz, Funp and
Vaw Vooruis, JJ., concur with Froxssen, J.; Burks, J., taking
no part.

In Action No. 2: Conway, Ch. J., Dyz and Van Vooruis, JJ.,
concur with Froussex, J.; Dusmonp, J., dissents in an opinion in
which Fux, J., concurs; Burgu, J., taking no part.

In Actions Nos. 1 and 2: Judgment affirmed.
EE

In the Matter of the Arbitration between Rurustiqun Francaise,
Respondent, and Cetnosmx Manvracrurtve Company et al.,
Appellants.

Argued April 18, 1955; decided July 8, 1955,

John P. Gorman, Francis X. Nestor and Thomas P. Riordan
for appellants appearing specially. I. There was no jurisdiction
in the New York Supreme Court to entertain the present pro-
ceedings or to direct entry of judgment against Cellosilk.
(Oklahoma Gas Co. v. Oklahoma, 273 U. 8. 257; Title Co. v.
Wilcox Bldg. Corp., 302 U. 8. 120; Martyne v. American Union
Five Ins. Co., 216 N. Y¥. 183; Matter of National Sur. Co.
[Laughlin], 283 N. Y. 68; Farrington v. Commissioner of Internal
Revenue, 30 F. 2d 915; Transit Comm. v. Long Is. R. B. Co.,
253 N. Y. 345; Cocalis v. Nazlides, 308 Ill. 152.) II. New York
jurisdiction, based solely on New York statute and contract to
arbitrate in New York, did not survive dissolution. III. The
Supreme Court never acquired jurisdiction to affirm the award
and enter judgment, since proper notice of motion was not served.
IV. Respondent, in failing to inform the court of the dissolution
of Cellosilk, failed to plead a cause of action. (People ex rel.
Hearst v. Ramapo Water Co., 51 App. Div. 145.) V. No service
by mail at the last known address of Cellosilk, as required by

22
eS

rule 39 of the American Arbitration Association Rules, was made
by respondent. (McDonald v. Mabee, 243 U. S. 90; People v. One
Chrysler Sedan, 81 Cal. App. 2d 18; De Dood vy. Pullman Co.,
57 F. 24.171; Grover & Baker Mach. Co. v. Radcliffe, 137 U. 8.
287 ; State v. Belden, 193 Wis. 145; Hendershot v. Finkel, 74 Ohio
App. 106; Hartley v. Vitiello, 113 Conn. 74; Mouldings Div. of
Thompson Inds. v. Review Bd., 122 Ind. App. 497.)

Edward W. Schall for respondent. I. Respondent had the
right to institute an arbitration proceeding against Cellosilk in
New York in February, 1952. (Matter of Gantt [Hurtado &
Cia.], 297 N. ¥. 483; Sinnott v. Hanan, 214 N. Y. 454; Schreier v.
Kinderhook Knitted Cap Co., 251 App. Div. 16; O’Reilly, Skelly
& Fogarty Co. v. Greene, 18 Mise. 423; Trounstine v. Bauer,
Pogue & Co., 144 F. 2d 379, 323 U. 8. 777; Craftsman Finance &
Mige. Co. v. Brown, 64 F. Supp. 168; Chaplin v. Selenick, 293
N. Y. 529; Matter of Lehrich v. Sixth Ave. Bancorporation, 251
App. Div. 391; Matter of Evens, 183 Misc. 717; Atkins v. Harri-
man & Co., 69 F. 2d 66; Newmark v. Abeel, 102 F. Supp. 993.)
II. The notice of motion sent by respondent to Cellosilk in con-
nection with the confirmation of the arbitration award was
properly served. (Matter of Liberty Country Wear [Riordan
Fabrics Co.], 197 Mise. 581; Matter of Bradford Woolen Corp.
[Freedman], 189 Mise. 242; Tanbro Fabrics Corp. v. Hymen,
341 Tl. App. 396; Ripley Fabrics Corp. v. Hymen, 91 F. Supp.
1007.) ILL. The proposal made on behalf of Cellosilk and Brown
during the pendency of this appeal, that respondent abandon its
judgment in exchange for the privilege of instituting a new
arbitration proceeding, affords no basis for reversing the order
of the Appellate Division.

Conway, Ch. J. In October, 1945, the respondent, Republique
Francaise (hereinafter designated Republique), entered into a
contract with the Cellosilk Manufacturing Company (herein-
after called Cellosilk) for the purchase of $512,100 worth of a
glass substitute, to be delivered F.A.S. Port of New York, in
six installments, the last of which was due in March, 1946.
Among the ‘‘ General Terms and Conditions” of the contract
there was a provision that the warranty given by the seller
“¢ shall expire not sooner than at the end of one year from the
date of receipt by us [Republique] of the material ” and a pro-

SS 27:
ee

vision that the order “‘ shall be governed by and construed
according to the laws of the State of New York and all questions
and controversies arising in connection therewith shall be sub-
mitted to arbitration in accordance with the rules of the Amer-
ican Arbitration Association’.

In March, 1946, Republique entered into another contract with
Cellosilk for an additional $256,050 worth of the same glass
substitute, to be delivered F.A.S. New York City, in two install-
ments, one in March and the other in April, 1946. The ‘‘ Gen-
eral Terms and Conditions ”’ of this contract, similar to those
in the earlier contract, contained provisions that the warranty
given by the seller with respect to the goods or material ‘ shall
expire twelve months from the date of receipt by Buyer of such
goods and material * * *”’; that the ‘‘ agreement shall be
governed by and construed according to the laws of the State
of New York ’’ and that the seller and buyer “‘ agree to submit
to arbitration, to be held in the City of New York, all claims or
controversies ’’ arising out of the agreement.

On October 20, 1949, almost three and one-half years after
the last scheduled delivery to Republique, Cellosilk filed with
the Secretary of State of Illinois a statement of intent to dis-
solve, setting forth therein the names and addresses of its offi-
cers and directors as required by the laws of Illinois. (Laws
of Illinois, 1933, pp. 308, 347-348, § 77; Smith-Hurd Il. Anno.
Stat. [Perm. ed.], ch. 32, § 157.77, p. 386). Thereafter, on April
28, 1950, the Secretary of State of Illinois issued a certificate of
dissolution, whereupon Cellosilk was dissolved, ceased doing
business and closed its office at Barrington, Illinois—the
address given on the contracts with Republique.

Republique apparently received the goods contracted for and
made no attempt to commence arbitration proceedings until on
or about February 25, 1952, almost six years after the last
scheduled delivery to Republique and about two months before
the expiration of the two-year period following the date of
Cellosilk’s dissolution within which, according to Illinois law,
an action or proceeding might be brought against Cellosilk. (See
1 IL Rev. Stat., 1949, ch. 32, § 157.94; Smith-Hurd Il. Anno.
Stat. [Perm. ed.], p. 437; see, also, Title Co. v. Wilcox Bldg.
Corp., 302 U. S. 120, 124-125, involving an Illinois corporation.)
It then mailed a demand for arbitration to Cellosilk at its

2 ee
ee

address at Barrington, Illinois. At the same time it mailed a
copy of the demand to the American Arbitration Association
(hereinafter designated the Association), setting forth the
nature of the dispute and the amount of the award sought. No
demand for arbitration was sent to the Secretary of State of
Illinois. Similarly, no formal demand was ever sent to appel-
lant Brown, who had been an officer and director of Cellosilk as
well as its sole stockholder, or to Cellosilk in care of Brown. The
next day, February 26th, the Association mailed to Cellosilk a
letter addressed in the same manner as the demand sent by
Republique, stating that Republique had filed a demand for arbi-
tration, and enclosing the list of names from which the arbitra-
tors were to be appointed. On February 28, 1952, this letter was
returned to the Association bearing the notation ‘‘ out of busi-
ness ’’, In his affidavit in support of the motion to vacate the
order confirming the award and directing the entry of a money
judgment against Cellosilk, Brown states that all the proceedings,
except those taken in the District Court in Illinois, to be discussed
infra, ‘‘ were without proper or effectual notice to ’’ Cellosilk,
the Appellate Division found that ‘‘ The post office returned the
notices [sent] to the corporation ’’ by Republique and the Asso-
ciation, and Republique itself does not deny or contest the allega-
tions that no notice of any kind of the attempted arbitration was
actually delivered to or served upon Cellosilk.

After learning that Cellosilk was ‘‘ out of business ’’ and that
it had not received the notices sent to it, the Association wrote
an informal letter, dated March 10, 1952, to appellant Brown,
enclosing also a formal notice of hearing, but ~o demand for
arbitration, the process necessary to initiate arbitration. In
that letter the Association stated in part:

“On February 28, the post office returned our letter which
had been addressed to the Cellosilk Manufacturing Company,
with the notation that it was ‘ out of business.’ We so notified
the attorneys for Republique Francaise, who wrote us, in part,
as follows:

“¢ Regardless of this fact, our client, Republique Francaise,
wishes to proceed with the arbitration of the matter set forth
in its Demand for Arbitration.’

‘« We were further advised by * * * [the attorneys for
Republique] that you were connected with Cellosilk Manufac-

ee 275
ee

turing Company in some way. In view of such information, we
wish to point out to you Sections 39 and 29 of the enclosed
Rules.”” (Emphasis supplied.)

Rule 39 of the Rules of the Association, mentioned in the letter
to Brown provided: ‘‘ 39. Serving of Notices — Hach party to a
Submission or other agreement [Brown, of course, was not a
party] which provides for arbitration under these Rules shall be
deemed to have consented and shall consent that any papers,
notices or process necessary or proper for the initiation or con-
tinuation of an arbitration under these rules and for any court
action in connection therewith or for the entry of judgment on
any award made thereunder may be served upon such party
(a) by mail addressed to such party or his attorney at his last
known address or (b) by personal service, within or without the
state wherein the arbitration is to be held (whether such party be
within or without the United States of America) ; provided that
reasonable opportunity to be heard with regard thereto has been
granted such party.’’ (Emphasis supplied.)

Cellosilk did not appear at the above-mentioned hearing,
either by representative or by counsel. On the same day as
the hearing — March 24, 1952 —the arbitrators made an unani-
mous award in writing, which was duly acknowledged.

It is manifest from the foregoing that the entire arbitration
proceeding was a nullity. No service of process in that pro-
ceeding was ever effected on Cellosilk, the Secretary of State of
Illinois or Brown, the sole stockholder of Cellosilk. It is true
that rule 39 of the Rules of the American Arbitration Associa-
tion provided that all papers could be served upon any party
to an arbitration agreement governed by its rules ‘‘ by mail
addressed to such party * * * at his last known address ’’.
That rule also contained the proviso, however: ‘‘ provided that
reasonable opportunity to be heard with regard thereto has been
granted such party ’’. Knowing prior to the arbitration hear-
ing that the notices sent to Cellosilk by itself and Association
had been returned unopened, and having learned or been put
upon notice of the dissolution of Cellosilk, it cannot reasonably
be said that Republique afforded Cellosilk a ‘‘ reasonable oppor-
tunity to be heard’? when it promptly directed the arbitration
to proceed without further ado. Indeed, it must be held that
by so proceeding Republique denied Cellosilk a right to which

2 ee
sss

it was entitled by the terms of the same contract which gave
New York courts jurisdiction and gave consent to service
by mail. The arbitration award having been thus procured
in violation of the contract and of due process was null and
void. .

Thereafter, by a notice of motion dated March 26, 1952,
Republique sought an order of the Supreme Court of this
State confirming this null and void award and directing the
entry of a money judgment thereon. In neither the notice
of motion to confirm the award and direct entry of a money
judgment thereon nor in the affidavit in support thereof did
Republique make any mention to our Supreme Court of the fact
hat the notice of arbitration had been returned by the Post
Office marked ‘‘ out of business ’’. Neither did the notice of
motion to confirm the award and to direct the entry of a money
judgment make mention of the fact that the notice of motion had
been mailed to Cellosilk’s address in Barrington from which
the former notices had been returned marked ‘‘ out of busi-
ness ’’, or of the fact that no notices of any kind had been sent
0 the Secretary of State of Iinois. The Supreme Court of
this State, therefore, received no notice from Republique that
there had been no jurisdiction obtained over Cellosilk in the
arbitration proceedings or on the motion for confirmation of
the award and entry of judgment. Cellosilk neither appeared
nor submitted papers in opposition, and the motion to confirm
the award was granted on April 14, 1952. Thereafter, on
April 22, 1952, six days before the expiration of the Statute
of Limitations of Illinois, Republique commenced a civil action
in the United States District Court in Illinois (Northern Dis-
trict Eastern Division) against both appellants, Cellosilk and
Brown, to recover the amount of the money judgment which had
been entered upon the arbitration award.

On April 9, 1953, Cellosilk and Brown appeared specially,
before the Supreme Court of New York and moved for an order
vacating and setting aside the order which confirmed the arbitra-'
tion award and directed the entry of a money judgment ‘‘ upon
the grounds that the court had no jurisdiction to make such|
order or to direct entry of such judgment and that the notices
of motion to confirm award and enter judgment and to settle|
order were not properly served on * * * [Cellosilk] ””.

a 277
sss

Special Term granted the motion. The Appellate Division
unanimously reversed and the present appeal to this court is
taken, as of right, from that reversal.

It is settled that an Appellate Division order which reverses
an order vacating a final judgment and denies the motion to
vacate is not a final order and, so, an appeal therefrom to
this court does not lie as of right but only by permission of
the Appellate Division (see Cohen and Karger, Powers of
the New York Court of Appeals, p. 143 and cases there cited;
Civ. Prac. Act, § 589, subd. 1, par. [a]). There is, on the
other hand, an equally well-settled exception to this rule. Thus,
an order denying a motion to vacate a final judgment is itself
regarded as final where the motion to vacate has been made
by a person not previously a party to the action or proceed-
ing (see United States Trust Co. of N. Y. v. Bingham, 301
N. Y. 1; Matter of Burdak, 288 N. Y. 606). Where one has
been named a party to the action or proceeding but jurisdiction
over his person has not been obtained, he is to be regarded
as a ‘‘ third party ’’ for the purposes of the finality rule. Here
the judgment entered on the arbitration award runs against
Cellosilk alone, although Republique has instituted suit in a
Federal court in Illinois against Brown, the holder and sole

: distributee of the assets of Cellosilk, as well as against Cello-
silk, seeking to recover the amount of said judgment. Jf
Cellosilk is correct in its contention that the Supreme Court
had no jurisdiction over its person, Cellosilk will be regarded
as a ‘‘third party’? for the purpose of this appeal, taken as
of right, a reversal of the Appellate Division determination
must follow and the judgment must be vacated. Since we
agree that Cellosilk has established its contention we need
not further discuss the status of Brown on this appeal or in
the action now pending in Illinois in which he is a party.

Cellosilk was a foreign corporation—an artificial entity
whose existence and powers depended upon the laws of the
State of its incorporation. The general rule at common law
where a corporation has been dissolved—whether it be by
voluntary action, court decree, or expiration of its chartered
life —is that all of its obligations cease and all actions against
it abate. Thus, in Title Co. v. Wilcox Bldg. Corp. (302 U. S.
120, supra), a case involving a dissolved Ilinois corporation,

28
Po

the Supreme Court wrote at pages 124-125: ‘‘ The decisions
of this court are all to the effect that a private corporation
in this country can exist only under the express law of the
state or sovereignty by which it was created. Its dissolution
puts an end to its existence, the result of which may be likened
to the death of a natural person. There must be some statu-
tory authority for the prolongation of its life, even for litiga-
tion purposes. [Citing cases] ’’. Except as modified by
specific statutes, the Supreme Court went on to state (302 U. 8.
125), the law of Illinois follows the above-quoted general rule.
There is such a survival statute in Illinois (1 Ill. Rev. Stat.,
1949, ch. 32, § 157.94; Smith-Hurd Ill. Anno. Stat. [Perm. ed],
p. 437). Before seeking an order of the Supreme Court of this
State confirming the award and directing the entry of a money
judgment against Cellosilk, Republique was: under a duty to
determine the exact legal status of Cellosilk and what, if any,
actions or proceedings could be brought against it. It was incum-
bent upon Republique to make certain that the Supreme Court of
New York had jurisdiction to enter the order confirming the
award and directing the entry of the money judgment so that
Cellosilk be not deprived of due process. Therefore, when the
notices of demand for arbitration and the other correspondence
were returned, Republique was under an obligation to determine
the meaning of the notation ‘‘ out of business’. That inquiry
must have disclosed the prior dissolution of Cellosilk, and the
fact that it no longer was possible for Republique to send notices
to that corporation by mailing them to its former office at
Barrington. Despite this knowledge that no notice of any kind
was being effected, Republique chose that same method of
service for the notice of motion for an order confirming the
arbitration award and directing entry of a money judgment
thereon. The rule of the Arbitration Association which pre-
scribed the manner for the service of the demand for arbitra-
tion also, by its terms, regulated the service of notices ‘for
any court action in connection ’’ with the arbitration. That
rule, therefore, permitted the notice of motion to confirm the
award and to direct entry of a money judgment to be mailed
to the last known address of the party provided that a reasen-
able opportunity was given such party to be heard in opposi-
tion. If the notices of demand for arbitration and subsequent

a 27°
Dee

correspondence had not been‘returned unopened and marked
“« out of business ’’, then it would not have been unreasonable
for Republique to conclude that service of the notice to cor-
firm the award and to direct the entry of a money judgmert
had been effected on Cellosilk. That, however, was not the
case, for the notices, sent by mail to the last post-office address
of Cellosilk by Republique and the Association were, as the
Appellate Division found, returned unopened and marked ‘‘ out
of business ’’.

The method of service by which parties have agreed to be
bound must be complied with according to the exact terms
thereof in order that the requirements of due process be satis-
fied (De Dood v. Pullman Co., 57 F. 2d 171; Grover & Baker
Mach. Co. v. Radcliffe, 187 U. S. 287). It has been said that
where a plaintiff has been given alternative methods for the
service of process and notices upon his adversary, ‘‘ the com-
plainant is under a constitutional duty to select that alterna-
tive that is reasonably calculated to notify the adverse party.
Stated negatively, the complainant may not select an alterna-
tive that he knows (or should know) will not notify the other
party when he also knows (or should know) that one of the
other alternatives, if selected, would notify the adverse party.”’
(People v. One 1941 Chrysler 6 Touring Sedan, 81 Cal. App.
2d 18, 34; see, also, Mouldings Div. of Thompson Inds. v.
Review Bd., 122 Ind. App. 497). In the present case, Repub-
lique knew from its examination of the Illinois law that
the Secretary of State of Illinois was the irrevocable, statu-
ory agent for the service of process and notices in those
instances where the same could not be served upon this cor-
poration at Barrington. Service upon him would have been
service upon the corporation within the two-year period expiring
on April 28, 1952, within which an action or proceeding could
e brought against Cellosilk and Brown following the dis-
solution of Cellosilk on April 28, 1950, provided that a ‘‘ remedy
was] available to or against such corporation, its directors,
or shareholders, for any right or claim existing, or any liability
incurred, prior to such dissolution”. (That proviso we do
not reach here.) Although experience had shown Republique
hat it was impossible to serve Cellosilk in Barrington, never-
theless, the notice of motion to confirm the award and to enter

280
De

a money judgment thereon was sent to that address, and not
~ to the Secretary of State of Illinois. That was not a bona
fide compliance with the rule for service of process and notices
‘* for any court action’? by which the parties had agreed to
be bound (rule 39 of the Rules of the Association, supra).
It was, rather, a method of service which Republique knew
from the past would not give notice to tts adversary and would
not give its adversary a reasonable opportunity to be heard
in opposition. What the Supreme Court has said with regard
to constructive service statutes is applicable with equal force
here: ‘‘ No doubt there may be some extension of the means
of acquiring jurisdiction beyond service or appearance, but
* * * great caution should be used not to let fiction deny
the fair play that can be secured only by a pretty close adhesion
to fact’. (McDonald v. Mabee, 243 U.S. 90, 91.) It is only
by closing our eyes to the facts and background of this case
that we might possibly consider that mailing the notices of
motion to confirm the award and to enter judgment to Cello-
silk at Barrington, Illinois, would give the Supreme Court of
New York jurisdiction over Cellosilk. The realities of the
case dictate a contrary conclusion, and since the Supreme Court
did not acquire the necessary in personam jurisdiction over
Cellosilk, Cellosilk is to be regarded as a “third party” for
the purposes of the finality rule and, as a matter of law, the
order confirming the award and the judgment entered upon
that order must be vacated.
The order of the Appellate Division should be reversed, and
the order of Special Term reinstated, with costs in this court
and in the Appellate Division.

Drsmonn, J. (dissenting). Republique Francaise is entitled to
its award since it met every requirement of contract and law for
avalid arbitration. Particularly is this so since appellant Brown
who now asserts that he at the time of the arbitration was and
now is, the sole and actual owner of, and/or liquidator of,
Cellosilk Manufacturing Company then in dissolution received
put deliberately ignored full and timely notice of the arbitration
hearing.

The contracts between Republique and Cellosilk, described
in detail in Chief Judge Conwax’s opinion, called for deliveries

en
se

of the merchandise at the Port of New York. Both agree-
ments recited that they were to be ‘‘ governed by and con-
strued according to the laws of the State of New York’. In
each agreement the parties covenanted to submit to arbitra-
tion all claims or controversies in accordance with the proce-
dures of the American Arbitration Association. The later
contract specified that any arbitration should be held in New
York City and the courts below properly held that to cover both
agreements. By the rules of the American Arbitration Asso-
ciation, incorporated into both contracts by reference, each
party was deemed to have consented that all demands for,
and notices of, arbitration and of court action for judgment
or an award might be served by mail addressed to the other
party ‘‘ at his last known address’. The address of Cellosilk
in both agreements was given as ‘‘ Barrington, Illinois ’’; there
is no claim that Cellosilk ever had any other address, or that,
until the first arbitration notices were sent by, and returned
to, Republique, the latter knew that Cellosilk was out of busi-
ness and no longer to be found in Barrington, Illinois. Despite
its agreements that arbitration notices should be sent to its
last known address, neither Cellosilk, which had meanwhile
taken voluntary dissolution proceedings, nor anyone on its
behalf, ever notified Republique, or American Arbitration
Association, of any other or different address. Appellants’
position comes to this: that, having sold and been paid for
merchandise under such contracts, Cellosilk could unilaterally
destroy all Republique’s rights to arbitration simply by dis-
solving, discontinuing business and turning over its assets to
its sole stockholder.

The argument that there was jurisdictional insufficiency in
the service of notices by mail on Cellosilk is readily answered.
Service by Republique of its demand for arbitration was made
in exact conformity with the association’s rules. Appellants
concede, as they must, that Barrington, Dlinois, was Cello-
silk’s last address. That fact could not be altered by Cello-
silk’s act of self-immolation. Much is made of the return to
Republique of that notice, with the stamped legend ‘‘ out of busi-
ness’. But what was Republique then supposed to do? Aban-
don its claim? It did what the association’s rule 29 permitted
it to do. It proceeded to arbitration despite ‘‘ the absence

28 ee
ees}

of any party, who, after due notice, fails to be present ’’. But
Republique did see to it that the association sent to appellant
Brown, who says he is and then was the sole party in interest as
to the dissolved or dissolving Cellosilk, a letter giving Brown
fourteen days’ notice of the time and place of the arbitration
hearing. Brown ignored the letter, and the arbitration pro-
ceeded to an award. Wherein was there any lack of ‘‘ reason-
able opportunity to be heard ’??

As to the service of notice of motion to confirm the award
in Supreme Court, New York County, it does not seem to be
disputed that, this service, too (by mail to Cellosilk at Bar-
rington, Illinois), complied exactly with the requirements of
American Arbitration Association rule 29 (supra) as well as
with section 1461 of the New York Civil Practice Act. The
majority opinion in this court says that Republique had an
obligation to investigate Cellosilk’s status or location and to
notify the Supreme Court as to its discoveries. We do not
know of any such obligation.

The only obstacle found by Special Term (but denied by
the Appellate Division) to confirmation of the award was the
prior dissolution in Illinois of Cellosilk, an Illinois corpora-
tion. But Illinois, like New York, has a survival statute (IIL
Rev. Stat., 1953, ch. 32, § 157.94) by virtue of which corporate
dissolution in Illinois does ‘‘not take away or impair any
remedy available to or against such corporation ’’, ‘‘ if action
or proceeding is commenced within two years after the date
of such dissolution ’’. The confirmation of Republique’s award
was within two years after Cellosilk’s dissolution. The Illinois
statute does not require that such ‘‘ proceedings ”’ after dissolu-
tion be had in Illinois in order to be valid, and there was every
reason here why this arbitration (which the parties had agreed
should be held, and was held, in New York) should be the subject
of confirmation proceedings in New York (see Matter of Gantt
[Hurtado & Cia.], 297 N. ¥. 433). Thus, there was a continuing
“remedy available’? to Republique in New York, and that
remedy was in no way cut down or destroyed by the survival
statute of Illinois, the State of Cellosilk’s incorporation.

While we of the dissent are strongly of the opinion that the
Appellate Division was correct, we must point also to a jurisdic-
tional objection to entertaining this appeal. The arbitration

Le 283
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award was made against Cellosilk alone. The Appellate Division
order sought to be appealed from denied a motion to vacate the
previous confirmation of that award. Nothing is better settled
as to our jurisdiction than that such an order, being nonfinal,
is not appealable to this court without the Appellate Division’s
permission, which was not obtained here. That rule does not
apply where the vacatur is sought by one not a party to the
action or proceeding in which was made the determination
sought to be vacated. But Cellosilk was a party to the con-
firmation proceedings and its status as a party therein is not
altered or destroyed by its present contention that service on
it was invalid. So the appeal of Cellosilk should be dismissed
(Civ. Prac. Act, § 589, subd. 1, par. [a]).

Brown’s appeal, too, should be dismissed for lack of juris-
diction. In the eyes of the law he, individually, is not a party
aggrieved. The arbitration award did not run against Brown.
In moving to vacate it, he could be heard as a liquidator or
stockholder or representative, only, of Cellosilk. A stock-
holder has, as such, no standing to vacate a judgment against
his corporation. Thus, since Cellosilk has no right to appeal
here, neither has Brown.

The order should be affirmed, with costs, or the appeal dis-
missed, with costs.

Frozsset, Van Vooruis and Burzs, JJ., concur with Conway,
Ch. J.; Desmonp, J., dissents in an opinion in which Dyz and
Foro, JJ., concur.

Order reversed, ete.
EEE

Dezsst Wittiams, Appellant, v. Mervin K. Anexanpzr,
Respondent.

Argued June 7, 1955; decided October 13, 1955.

bo
R

Bernard Meyerson, Albert Martin Cohen and Louis I. Rothen-
berg for appellant. The trial court erred in allowing the history
of the accident that was in the hospital record to be marked
in evidence in spite of counsel’s objection that the history was
entirely hearsay. (People v. Kohlmeyer, 284 N. Y. 366; Meisel-
man v. Crown Heights Hosp., 285 N. Y. 389; Wolf v. Kaufmann,
227 App. Div. 281; Del Re v. City of New York, 180 Mise. 525;
Roberto v. Nielson, 262 App. Div. 1035, 288 N. Y. 581; Constan-
tinides v. Manhattan Tr. Co., 264 App. Div. 147; Matter of
Bourne, 181 Mise. 238, 267 App. Div. 876, 293 N. Y. 785; Johnson
y. Lute, 258 N. Y. 124; Matter of Fischer, 154 Mise. 74, 243 App.
Div. 685; Dougherty v. City of New York, 267 App. Div. 828,
295 N. Y. 786; Doyle v. City of New York, 281 App. Div. 821.)

John D. Kelly and Joseph F. O’Brien for respondent. The
hospital records were properly admitted. (People v. Kohl-
meyer, 284 N. Y. 366; Johnson v. Lutz, 253 N. Y. 124; Geroeami
v. Fancy Fruit & Produce Corp., 249 App. Div. 221; Dougherty
v. City of New York, 267 App. Div. 828, 295 N. Y. 786; Del Re v.

ae 285
Ls

City of New York, 180 Misc. 525; Matter of Bourne, 181 Misc.
238, 267 App. Div. 876; Roberto v. Nielson, 262 App. Div. 1035;
Erickson v. Commercial Cas. Ins. Co., 265 App. Div. 327;
Cerniglia v. City of New York, 182 Mise. 441.)

Fut, J. Dessi Williams was struck by defendant’s automo-
bile as he was crossing a street in Brooklyn, with the traffic
light in his favor. His right leg fractured, he was taken to
Kings County Hospital for treatment. At the trial, the testi-
mony of the parties as to the manner in which the accident
occurred was sharply discrepant. According to plaintiff, defend-
ant’s automobile approached the intersection, at which he was
crossing, without diminishing speed and ran into him. Defend-
ant, on the other hand, insisting that he had brought his car to a
complete stop at the light, maintained that another vehicle had
struck it from the rear and propelled it forward and upon
plaintiff.

In the early stages of the trial, plaintiff introduced so much
of the Kings County Hospital record as bore upon his injuries
and their treatment. Counsel for defendant thereupon offered
the balance of the record and it was received in evidence over
plaintiff’s objection. Specifically challenged by plaintiff as
inadmissible hearsay was an entry to the effect that he had
stated to a physician at the hospital that ‘‘ he was crossing the
street and an automobile ran into another automobile that was
at a standstill, causing this car (standstill) to run into him ’’.
Plaintiff denied making any such statement, and the doctor who
recorded it was not called as a witness.

Upon this appeal — following a verdict in defendant’s favor
and an affirmance by a divided Appellate Division—we are
called upon to decide whether the statement attributed to plain-
tiff, relating the manner in which the accident occurred, was
properly admitted in evidence as a memorandum or record
made ‘‘in the regular course of * * * business’. (Civ.
Prac. Act, § 874-a.)4 While there are many out-of-state deci-

1, Although the doctor who made the entry would have been competent to
testify to plaintiff’s alleged admission against interest, the entry itself was,
nevertheless, excludable as hearsay, unless within the compass of section 374-a
of the Civil Practice Act (see, eg., Green v. City of Cleveland, 150 Ohio St.
441, 444-445; Richardson on Byidence [8th ed., 1955], § 238, p. 211); and the
issue was sufficiently raised by the objection predicated on the hearsay rule.

286 |
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sions on the point, we have never had occasion to consider it;
neither in Roberto v. Nielson (288 N. Y. 581), nor in Dougherty
v. City of New York (295 N. Y. 786) —upon which reliance is
placed to sustain the trial judge’s ruling—nor in any other
case was it necessary for this court to pass upon the question
now posed.

Section 374-a of the Civil Practice Act permits the introduc-
tion in evidence of ‘‘ Any writing or record * * * made as
a memorandum or record of any act, transaction, occurrence
or event,’’ despite its hearsay character, ‘‘if the trial judge
shall find that it was made in the regular course of any business,
and that it was the regular course of such business to make
such memorandum or record at the time of such act, transaction,
occurrence or event, or within a reasonable time thereafter.”’
The term ‘‘ business ”’ is broadly defined as including ‘‘ busi-
ness, profession, occupation and calling of every kind ’’, and
among the records within the section’s ambit are those that a
hospital keeps in diagnosing and treating the ills of its patients.
(See Meiselman v. Crown Heights Hosp., 285 N. Y. 389; People
v. Kohlmeyer, 284 N. Y. 366.)

The statute, similar to those in effect in most jurisdictions,
is designed to harmonize the rules of evidence with modern busi-
ness practice and give ‘‘ evidential credit ’’ to the memoranda
or other writings upon which reliance is placed in the systematic
conduct of business undertakings. (See Johnson v. Lute, 253
N. Y. 124, 127.) It rests upon the probability of trustworthiness
which inheres in such records, by virtue of the fact, first, that
they are the ‘‘ routine reflections of the day to day operations
of a business”? (Palmer v. Hofman, 318 U. 8. 109, 114) and,
second, that it is the entrant’s own obligation, and to his interest,
to have them truthful and accurate, made and kept as they are
with the knowledge, indeed, for the purpose, that they will be
relied upon in the conduct of the enterprise. (See Johnson v.
Lutz, supra, 253 N. Y. 124, 128; Weis v. Weis, 147 Ohio St. 416,
425; see, also, 5 Wigmore on Evidence [3d ed., 1940], § 1522,
p. 369; McCormick on Evidence [1954], § 281, pp. 596-597.)
It is this element of trustworthiness, serving in place of
the safeguards ordinarily afforded by confrontation and cross-
examination, which justifies admission of the writing or record
without the necessity of calling all the persons who may have

| 287
ese

had a hand in preparing it. And it was to assure such accuracy
and reliability that the legislature made explicit the condition
that the memorandum may be received in evidence —and this
is the heart of the provision—only if it was ‘‘ made in the
regular course of [the] business, and * * * it was the regu-
lar course of such business to make such memorandum ’’.

As the statute makes plain, and we do no more than para-
phrase it, entries in a hospital record may not qualify for
admission in evidence unless made in the regular course of the
‘business ’? of the hospital, and for the purpose of assisting
it in carrying on that ‘ business.’’ The business of a hos-
pital, it is self-evident, is to diagnose and treat its patients’
ailments. Consequently, the only memoranda that may be
regarded as within the section’s compass are those reflecting
acts, occurrences or events that relate to diagnosis, prognosis
or treatment or are otherwise ‘‘ helpful to an understanding
of the medical or surgical aspects of * * * [the particular
patient’s] hospitalization.”’ (E.g., Green v. City of Cleveland,
150 Ohio St. 441, 443-444; Commonwealth v. Harris, 351 Pa.
325, 330-331; see, also, Borucki v. MacKengie Bros. Co., 125
Conn. 92, 102-103; McCormick, op. cit., § 290, p. 611.)

It follows from this that a memorandum made in a hospital
record of acts or occurrences leading to the patient’s hospi-
talization — such as a narration of the accident causing the
injury —not germane to diagnosis or treatment, is not admis-
sible under section 374-a, and so it has been almost universally
held under the identical or similar statutes of other jurisdic-
tions. (See, e.g., Scott v. Gibbons Co., 192 Md. 319, 330; Sadjak
v. Parker-Wolverine Co., 281 Mich. 84, 87-88; Valenti v. Mayer,
301 Mich. 551, 557; Green v. City of Cleveland, supra, 150 Ohio
St. 441, 443-444; Weis v. Weis, supra, 147 Ohio St. 416, 425;
Commonwealth v. Harris, supra, 351 Pa. 325, 330-331; see, also,
Borucki v. MacKeneie Bros. Co., supra, 125 Conn. 92, 102-103;
Watts v. Delaware Coach Co., 44 Del. 283; Brown v. St. Paul
City Ry. Co., 241 Minn. 15, 23-27; Richardson on Evidence
[8th ed. 1955], § 233, pp. 209-210, 211-212; McCormick,
op. cit., § 290, p. 611; Medina, Current Developments in
Pleading, Practice, and Procedure in the New York Courts,
80 Corn. L. Q. 449, 454-458.) In the words of the Ohio
court in Green v. City of Cleveland (supra, 150 Ohio St. 441,

288 a
ee

444), typical of those found in the other cases, ‘‘it was the
business of the hospital to diagnose plaintiff’s condition and to
treat her for her ailments, not to record a statement describing
the cause of the accident in which plaintiff’s injuries were
sustained.’’

In some instances, perhaps, the patient’s explanation as to
how he was hurt may be helpful to an understanding of the
medical aspects of his case; it might, for instance, assist
the doctors if they were to know that the injured man had
been struck by an automobile. (See Scott v. Gibbons Co.,
supra, 192 Md. 319, 330; cf. Roberto v. Nielson, supra, 288 N. Y.
581; Watts v. Delaware Coach Co., supra, 44 Del. 283.) . How-
ever, whether the patient was hit by car A or car B, by car A
under its own power or propelled forward by car B, or whether |
the injuries were caused by the negligence of the defendant or
of another, cannot possibly bear on diagnosis or aid in deter-
mining treatment. That being so, entries of this sort, purport-
ing to give particulars of the accident, which serve no medical
purpose, may not be regarded as having been made in the regular
course of the hospital’s business. (See Scott v. Gibbons Co.,
supra, 192 Md. 319, 330.) Indeed, in discussing the matter,
Wigmore observed that the essential ‘‘ Guarantee of Trust-
worthiness’? rests upon the fact that ‘‘ the physicians and
nurses * * * themselves rely upon the record’? and that
the record is designed to be “ relied upon in affairs of life and
death.”? (6 Wigmore, op. cit., § 1707, p. 36; see Loper v. Mor-
rison, 23 Cal. 2d 600, 608.) Such reasoning, however, will not
support the use,.or justify the receipt, of a statement detailing
the circumstances of the accident where they are immaterial
to, and were never intended to be relied upon in, the treatment
of the patient. There is no need in that case for the physician

. to exercise care in obtaining and recording the information or
to question the version, whatever it might be, that is given to
him. The particulars may be a natural subject of the doctor’s
curiosity, but neither the inquiry nor the response properly
belongs in a record designed to reflect the regular course of the
hospital’s business. (See, e.g., Commonwealth v. Harris, supra,
351 Pa. 325, 331.) .

In conclusion, then, that portion of the hospital record con-
taining the statement assertedly made by plaintiff as to the

eee! 289
ree

manner in which the accident happened was erroneously admit-
ted, and, since we cannot say that it did not influence the jury
in arriving at its verdict for defendant, there must be a new
trial.

The judgment of the Appellate Division and that of Trial
Term should be reversed and a new trial granted, with costs
to abide the event.

Dzsmonp, J. (dissenting). I see no error here, and no reason
for retrying this simple question of fact.

Plaintiff, for his own convenience, chose to prove his injuries
and the hospital treatment he received therefor, by putting a
hospital record in evidence and without calling as a witness the
physician who made the entries. In so doing, he of course
vouched for the accuracy and regularity of that record. Defend-
ant made no objection but in his turn offered in evidence so
much of the same hospital record as showed a statement to
the hospital physician by plaintiff that the accident had occurred
in a manner quite different from that testified to at the trial
by plaintiff. Plaintiff objected to any such “history ’’ going
into evidence. His alleged ground of objection was stated in
the one word: ‘‘ hearsay”. That of course was meaningless
in this context. An undoubted exception to the ‘‘ hearsay ’”
rule makes admissible extrajudicial declarations against interest
(Reed v. McCord, 160 N. Y. 330, 341). Plaintiff’s declaration
to the hospital physician as to the way the accident happened
was directly probative evidence of a main fact in issue (Gangi
v. Fradus, 227 N. Y. 452). It is, of course, conceivable (but
unlikely) that by plaintiff’s use of the word ‘‘ hearsay ’’ he
referred to the failure of defendant to call as a witness the
physician who had written up the notes. But plaintiff himself
had put into evidence the (helpful to him) parts of that identical
paper without calling the physician. Surely, plaintiff could not
then demand that the other party prove the authenticity of the
very record plaintiff had himself presented to the court. Since
plaintiff had been allowed to prove by the record alone the
diagnosis and treatment of his injuries, it would be absurd to
forbid defendant using the same record, written in the same
handwriting by the same physician at the same time, to prove
an equally relevant, competent and material fact, that is, that

a

290 Le

plaintiff had stated to the physician that his injuries were
caused in the manner asserted by defendant.

It follows from the above that section 374-a of the Civil
Practice Act, our statutory rule as to admissibility of records
made in the regular course of a business, has little or nothing
to do with this case. What we have here is an admission against
interest, proved not by the oral testimony of the person to whom
it was made but by an authentic document already vouched for
to the court by the opposing party himself.

But let us suppose that this is a section 374-a case. ‘‘ Hos-
pital records concededly are included within the records to
which section 374-a of the Civil Practice Act is applicable ’’
(People v. Kohlmeyer, 284 N. Y. 366, 369, 370). The physician
who made the entries need not be called as a witness (Meiselman
v. Crown Heights Hosp., 285 N. Y. 389, 396, 397). True, as
Judge Futp points out, this court has not yet directly decided

. whether the section 374-a makes admissible that part of a hos-
pital record which gives the history of the injury. But why
should this court not adopt a practical and useful construction,
rather than a narrow and unnecessarily restrictive one? And
the statute itself seems to furnish the answer: ‘‘ Any writing
or record, whether in the form of an entry in a book or other-
wise, made as a memorandum or record of any act, transaction,
occurrence or event, shall be admissible in evidence in proof
of said act, transaction, occurrence or event, if the trial court
shall find that it was made in the regular course of any business,
and that it was the regular course of such business to make
such memorandum or record at the time of such act, transaction,
occurrence or event, or within a reasonable time thereafter.’’
There is no reason why the ‘‘ history ’’ part of a hospital record,
obtained not from unidentified persons but from the patient
himself, should not be used in evidence against the patient.
Of course, the writing must have been made in the regular
course of the hospital’s business and it must have been the
regular course of the business of the hospital to make such
entries. But in this case plaintiff did not object because of
any failure to prove those requirements (see Meiselman v. Crown
Heights Hosp., 285 N. Y. 389, 397, supra). Indeed, he could
not, after himself bringing the record to court, reasonably urge
that it was not the regularly made record of this hospital. And

Le 291
re

he knew, as we all do, that an examining physician, especially
in a hospital receiving department, always inquires as to the
cause of a trauma. Certainly, in the absence of any suspicious
circumstance, it is not up to the courts to decide just how
thoroughly a qualified physician may delve into the cause or
occasion of the injuries he is diagnosing and treating. Anyhow,
all this is by the statute’s own words committed to the trial
judge’s discretion. It is he who is charged with passing on the
question of whether the entry was regularly made. Here, no
one suggested that it was not so made or called for proof that
it was. The trial justice, therefore, had no reason for excluding
it, particularly since there was no suggestion that the physician
or the hospital had any interest in the case or any possible
reason for falsifying these records.

This was a routine trial of a simple issue of fact. Plain-
tiff said the accident happened one way, defendant said that it
happened another way. A hospital book brought to court by
plaintiff showed that he himself had described the occurrence in
the way that defendant described it. Plaintiff denied that he
had made such a statement at the hospital. The jury settled
that dispute. It is most unfortunate, especially in these days
of congested calendars, that such a case must now be retried.

The judgment should be affirmed, with costs.

Conway, Ch. J., Frozssen and Van Vooruis, JJ., concur with
Futo, J.; Desmonp, J., dissents in an opinion in which Dyg and
Bursgz, JJ., concur.

Judgments reversed, ete.

Tus Pzoriz or roe Stats or New Yor, Respondent, v.
Auvin E, Lary, Appellant.

Argued October 6, 1955; decided November 17, 1955,

Vincent L. Rosato for appellant. I. The court below erred
in refusing to grant a hearing upon the allegations raised by
the petition and the records of the court. (Johnson v. Zerbst,
304 U. 8. 458; People v. McLaughlin, 291 N. Y. 480; Matter of
Bojinoff v. People, 299 N. Y. 145; Rice v. Olson, 324 U. 8. 786;
Hawk v. Olson, 826 U. 8. 271; Matter of Hogan v. Supreme Court
of State of N. Y., 295 N. Y. 92; People v. Richetti, 302 N. Y. 290;
Matter of Lyons v. Goldstein, 290 N. Y. 19; People v. Guarigha,
303 N. Y. 338; People v. Langan, 303 N. Y. 474.) II. Hven if the
court should find that appellant was represented by counsel at
the time of sentencing, the record nevertheless conclusively

a 293
ee

shows that he did not have the aid of counsel nor was he advised
of his rights at every stage of the proceedings. (Glasser v.
United States, 315 U. S. 60; People v. Steinmetz, 240 N. Y. 411.)

Frank 8. Hogan, District Attorney (Harold Roland Shapiro
of counsel), for respondent. The records of the Court of General
Sessions conclusively established defendant’s representation by
counsel and thus completely refuted his allegations that he was
not advised of or given counsel at any stage of the proceedings
and that the court records were barren of proof that at any
time was he represented by counsel. (Gayes v. New York, 332
U.S. 145; Canizio v. New York, 827 U.S. 82; Walker v. Johnston,
312 U. 8. 275; People v. Guariglia, 303 N. Y. 338; People v.
Richeitti, 302 N. Y. 290; People v. Langan, 303 N. Y. 474.)

Dusmonp, J. Defendant petitioned for coram nobis relief to
set aside his 1934 conviction for robbery on a guilty plea. His
allegation was that he had not been represented by counsel, or
advised of his right to counsel, at any stage of those 1934 criminal
proceedings. His petition included a request for a hearing
as to the truth of those allegations but such a hearing was
denied him. The Court of General Sessions instead examined
the original 1934 file, including the indictment and the indorse-
ments thereon and the stenographic minutes of sentence, and,
finding therein what the court thought to be a clear showing that
defendant was represented by counsel in 1934, held that no
hearing was necessary as to defendant’s contrary allegation.
The coram nobis motion was therefore denied.

It is settled that in coram nobis a petitioner swearing to
allegations such as those of this petition is entitled to a trial
thereof in open court unless his claims are ‘‘ conclusively refuted
by unquestionable documentary proof’’. (People v. Richetti,
302 N. Y. 290, 296; see People v. Guariglia, 303 N. Y. 338, 342;
People v. Langan, 303 N. Y. 474, 477; United States v. Hayman,
342 U.S. 205, 222.) There was in the present proceeding no such
conclusive refutation by unquestionable documents. The file
handed to the coram nobis court contained two documents of
importance. One was a photostatic copy of the 1934 indictment
and the indorsements thereon, that indictment running against
this defendant (Lain) and two other men, Soimes and Jasper.
It was returned on September 26, 1934, and on its back there

294. |
eens
is a notation that on September 27, 1934, Lain pleaded guilty to
robbery in the third degree while armed, and that his co-defend-
ant Soimes on that date pleaded guilty to robbery in the third
degree. There is nothing in the record to say that Lain was
represented by a lawyer or informed of his right to counsel at
the time his plea was entered. Under date of September 29,
1934, on the back of this same indictment is a statement that
a named attorney filed a notice of appearance for both Lain and
Soimes. The next writing on the back of the indictment says
that on October 9, 1934, Lain was sentenced to State prison for
ten years for robbery, plus an additional sentence, because of
his having been armed, of not less than five nor more than ten
years.

The other writing which was before General Sessions, when
it denied the coram nobis petition without trial, was the
stenographer’s minutes of the sentencing of Lain and Soimes.
Therein under the heading ‘‘ appearances ”’ is a statement that
an attorney (not the same one who filed the notice of appearance)
was present ‘‘for the defendants ’’. When, according to the
minutes, the sentencing judge asked Lain whether he had been
previously convicted of a felony, he answered ‘‘ Yes ’’ and this
attorney, too, made the same answer as to Lain. Later, this
attorney addressed the court in behalf of leniency for Soimes,
but said nothing for Lain. Thus, the only documents available
indicate that one lawyer, two days after the guilty plea, filed
a notice of appearance for Lain but was not heard of again in
the record. Another lawyer, in court on the day of sentence,
was thought, by the stenographer at least, to be representing
Lain but did no more for him than to repeat to the court an
answer Lain made as to his prior conviction. If there is an
adequate explanation for these discrepancies, it does not appear
on this record. People v. Guariglia (303 N. Y. 338, 342, supra)
is a directly applicable holding that such scant entries on the
official records do not conclusively disprove a sworn allegation
that defendant never was told of his right to counsel, never
consciously waived it, never authorized counsel to act for him
and never knew that the right existed.

Since we are holding that this defendant should have had
a trial of his allegations, the question is not before us as to
whether adequate representation by an attorney, if such there

Le 295
es

was, at the time of sentence would be held to have satisfied
defendant’s rights if it should turn out also that at the earlier
date of arraignment and plea he had no counsel and was not
told of his right to counsel (see Code Crim. Pro., §§ 188, 308;
Canizio v. New York, 327 U. S. 82, 85-87; Gayes v. New York,
332 U. S. 145, 148-149; ef. People v. Guariglia, supra).

Defendant’s right to a trial of his allegations was not
destroyed by the inept allegation in his home-drawn petition that
his claims could be conclusively established by the court records.
Of course, those records did not prove that he was denied
counsel, any more than they proved the opposite of that. But
defendant’s overstatements of what the documents proved did
not automatically deprive him of a trial of his principal
contention.

The orders should be reversed and the case remitted to the
Court of General Sessions of the County of New York for
hearing in accordance with the opinion herein.

Conway, Ch. J., Furp, Frozssen, Vaw Vooruis and Burks, JJ.,
concur; Dyz, J., taking no part.

Orders reversed, ete
Tae Porte or tan Srate or New Yor, Respondent, v.

Freprrick Spmiman, Alias Ropurr SunpsrLanp, FReprrick
Lazo Spetuman and Frep Wiii4Ms, Appellant.

Argued October 4, 1955; decided November 17, 1955,

297

John McKim Minton for appellant. I. Defendant’s posses-
sion of the pistol was not proved beyond a reasonable doubt.
(People v. Russo, 278 App. Div. 98, 303 N. Y. 673; People v.
Crenshaw, 202 Misc. 179; People v. Tropiano, 294 N. Y. 940;
People v. Brasch, 193 N. Y. 46; People v. Cuogzo, 292 N. Y. 85;
People v. Persce, 204 N. Y. 397; People v. Leavitt, 301 N. Y. 113;
People v. Wolosky, 296 N. Y. 236.) II. Defendant’s guilt of
burglary and larceny was not proved beyond a reasonable doubt.
(People v. Foley, 283 App. Div. 239, 307 N. Y. 490; People v.
Galbo, 218 N. Y. 283.) III. Proof is completely lacking that
defendant was in possession of burglar’s instruments as a
fourth felony offense. IV. The admission in evidence of the
newspaper clippings was reversible error. (People v. Molineum,
168 N. Y. 264; People v. Rosenthal, 289 N. Y. 482; People v.
Kress, 284 N. Y. 452.) V. It was error to admit proof of
defendant’s prior convictions as part of the People’s case.
People v. De Santis (305 N. Y. 44), relied upon by the People,
should be reversed because the rule there enunciated is archaic
and only productive of injustice and because it deprives defend-
ant of procedural due process required by the State and Federal
Constitutions. (People v. Sickles, 156 N. Y. 541; Johnson v.
People, 55 N. Y. 512; People v. Gowasky, 244 N. Y. 451; Matter
of Grifenhagen v. Ordway, 218 N. Y. 451; Woods v. Lancet, 303
N. Y¥. 349; People v. Morton, 284 App. Div. 413.)

298 [|
ese

T. Vincent Quinn, District Attorney (George J. Regan of
counsel), for respondent. I. Defendant’s possession of the
pistol was proved beyond a reasonable doubt. (People v.
Brasch, 193 N. Y. 46; People v. Panitz, 251 App. Div. 276.)
II. Appellant’s guilt of burglary and larceny was proved beyond
a reasonable doubt. (Knickerbocker v. People, 43 N. Y. 177;
People v. Spivak, 237 N. Y. 460; People v. Di Lorenzo, 301 N. Y.
874; People v. Galbo, 218 N. Y. 283; Stover v. People, 56 N. Y.
315; Goldstein v. People, 82 N. Y. 231; People v. Rogan, 223 App.
Div. 242, 249 N. Y. 544; People v. Silinsky, 235 App. Div. 289;
People v. Berger, 260 App. Div. 687; People v. Sobin, 179 Mise.
999; People v. Vaccarella, 257 App. Div. 461.) III. It was
proper to admit proof of defendant’s prior convictions as part
of the People’s case. (People v. De Santis, 305 N. Y. 44; People
v. Gowasky, 244 N. Y. 451.) IV. There was sufficient evidence
to convict defendant of the possession of burglar’s tools.
(People v. Morgan, 59 Hun 619.) V. The newspaper clippings
were properly received in evidence in the absence of a valid
objection; and though error was committed in refusing at the
end of the case to strike them from the evidence, it was not
prejudicial to defendant on the circumstances of this case.
(People v. Cummins, 209 N. Y. 283.) VI. The credibility of the
witnesses is a question primarily for the trial court. (People
v. Sanducci, 195 N. Y. 361; People v. Gaimari, 176 N. Y. 84.)

Van Voornis, J. Defendant has been convicted of: (1)
burglary, third degree; (2) petit larceny; (3) carrying a
dangerous weapon as a felony; (4) possession of burglar’s
instruments as a felony; (5) unlawful possession of a dangerous
weapon as a felony and (6) carrying a dangerous weapon as a
felony; all as fourth felony offenses, except that of petit larceny.

In September, 1948, the Fealy home in Springfield Gardens
was burglarized. This occurred while Mrs. Fealy was attending
the funeral of her husband. The property taken by the burglar
‘was a pistol which had been legally possessed by the late Mr.
Fealy, and which had been kept in a holster in one of the bureau
drawers. This pistol was found in the luggage compartment of
an automobile owned by defendant’s wife to which defendant had
a set of keys. There is testimony of an admission by defendant
that he had recently bought the pistol from one Moore.

Le 299
es

Defendant maintained that: (1) His possession of the pistol
was not proved beyond a reasonable doubt. He argues that the
presumption created by section 1898-a of the Penal Law that
‘The presence inan automobile * * * of * * *apistol
* * * shall be presumptive evidence of its illegal possession
by all the persons found in such automobile at the time such
weapon * * * is found’? is inapplicable here for the
reason that the car was the property of his wife, he was not
in the car when the police placed him under arrest, the pistol was
not found in the car until it was searched at the station house
after defendant had been arrested, and that he was in the car
then only because the police had ordered him to get into it and
to drive it to the station.

(2) His guilt of burglary and larceny was not proved beyond
a reasonable doubt. He argues that the testimony does not
point inevitably to the recent and exclusive possession by him
of the pistol which was stolen from the Fealy residence.

(3) Proof is lacking that he was in possession of burglar’s
instruments as a fourth felony offense. The articles in question
were two pairs of rubber gloves and a claw hammer.

(4) The admission in evidence of certain pages of newspapers
containing obituary columns found in a dresser in defendant’s
apartment, was reversible error. It is claimed that since the
clippings were dated November 4th and 5th, they could not have
related to the burglary of the Fealy residence, which occurred
not later than September 15th, and that the only purpose in their
introduction into evidence was to cause the jury to infer that
defendant made a practice of burglarizing dead people’s homes
during their funerals.

(5) It was error to admit proof of defendant’s prior convic-
tions as part of the People’s case. Defendant argues that
People v. De Santis (305 N. Y. 44) should be overruled.

With one exception, the charges against defendant all depend
upon the People’s establishing that defendant was found in
possession of a revolver which was discovered in the compart-
ment of his wife’s car. The one other count in the indictment,
charging possession of burglar’s instruments as a felony, must
be dismissed inasmuch as rubber gloves and a claw hammer, by
themselves, are not burglar’s tools. The contention cannot be
sustained that since these instruments could be used in commit-

300 Le

ting burglary, therefore they are tools of.this description. It is
admitted that they would not be subject to that characterization
if found in the possession of an honest man, but it is asserted
that they become contraband when possessed by one who would
be likely to use them to commit burglary, i. that they are
burglar’s tools only when in the possession of a burglar. The
law does not indulge in that assumption, at least in the absence
of evidence that they have been used by defendant in the
commission of burglary.

The other counts in the indictment depend, as has been stated,
upon possession by defendant of this revolver. He was not in
the automobile when the police arrived at his premises; con-
sequently section 1898-a of the Penal Law does not apply. It
renders the presence in the automobile of the pistol ‘‘ presump-
tive evidence of its illegal possession by all the persons found
in such automobile at the time when such weapon * * * is
found ’’. In this instance, defendant was not in the automobile.
The circumstance that he entered it at the police officer’s
command and drove it to the station house, does not spell out
guilty presence in the vehicle so as to give effect to section 1898-a
(People v. Russo, 303 N. Y. 673; People v. Tropiano, 294
N. Y. 940).

Nevertheless, the fact is established that this revolver was
discovered in the compartment of defendant’s wife’s automobile,
to which defendant had a key, and, although this in itself does
not demonstrate that defendant had possession, his admissions
to the police officers are in evidence that he had bought this
weapon a short time previously. Do these circumstances,
coupled with this admission, constitute evidence of possession
in defendant apart from section 1898-a of the Penal Law which
has been discussed?

Insofar as the charges of burglary, third degree, and of petit
larceny are concerned, recent and exclusive possession of this
pistol (which is the article claimed to have been stolen in
connection with the burglary) would be evidence that defend-
ant was the burglar and the thief (People v. Galbo, 218 N. Y.
283, 290; People v. Spivak, 237 N. Y. 460, 461; People v.
Di Lorenzo, 301 N. Y. 374, 375); whereas, on the charges of
possessing and carrying a dangerous weapon without a written

Le 301
es}

permit in violation of subdivisions 4 and 5 of section 1897 of the
Penal Law, possession is not merely evidence but is the essence
of the crime itself — the corpus delicti. We shall consider first
whether the evidence in the record is sufficient to sustain the
latter charges.

Section 395 of the Code of Criminal Procedure provides that
the confession of a defendant is not enough to warrant his
conviction without additional proof that the crime charged has
been committed. Insofar as defendant is charged with violation
of subdivisions 4 and 5 of section 1897 in possessing or carrying
this revolver without a written permit, it would not be sufficient
to sustain his conviction merely that the jury believed his admis-
sions that he had previously bought this weapon from Moore.
There has to be ‘‘ additional proof that the crime charged has
been committed.’? The immediate question is whether the
presence of this pistol in defendant’s wife’s automobile in a
compartment to which defendant had a duplicate key, supplies
this additional proof required by section 395 of the Code of Crim-
inal Procedure. In People v. Cuozgzo (292 N. Y. 85), this court
held that the remains of the body of a girl who had been run over
by a railroad train had no tendency to prove that she had met her
death by criminal means. Therefore, it was held that the
conviction of murder in the first degree depended entirely upon
the confession of the defendant that he had struck her on the
head and placed her body on the track. There was held to have
been no evidence in addition to the confession to prove the
corpus delicti, which meant, in that case, that the discovery
of the mangled body of the deceased after being run over by
the train supplied no circumstantial evidence that she had been
the victim of foul play. The conviction was reversed for the
reason that there was no proof independent of the confession
that the crime charged had been committed. If there had been
independent proof that the crime charged had been committed
by someone, the defendant’s confession would have been suffi-
cient to have connected him with its perpetration (People v.
Roach, 215 N. Y. 592; People v. Brasch, 193 N. Y. 46; People
v. Jaehne, 103 N. Y. 182, 199). The rule of these cases was
applied in People v. Lytton (257 N. Y. 310) to the situation where
a homicide was proved by independent evidence, but the

302 Pe
ee

defendant’s conviction of felony murder was otherwise upheld
on his confession that he had shot the deceased while engaged
in the commission of a burglary.

In the present instance, we are confronted with a situation
where a revolver licensed in the name of Fealy was found in the
locked compartment of an automobile belonging to defendant’s
wife. It thus appears that Fealy, but neither defendant nor his
wife, had a written permit to possess this weapon. It was not
in Fealy’s possession when it was discovered in defendant’s
wife’s automobile. Therefore, the crime of possessing a danger-
ous weapon in violation of subdivision 4 of section 1897 of the
Penal Law was established by independent evidence to have
been committed by someone. When coupled with the fact that
defendant had access to the compartment where this gun was
contained by the possession of a duplicate key, his statements
to the police officers that he had bought it a short time previously
are sufficient, in our view, to satisfy the requirements of section
395 of the Code of Criminal Procedure. It could be found by
the trial court that this weapon was within the immediate control
and reach of the accused, available for unlawful use if desired
(People v. Persce, 204 N. Y. 397). The statement by defendant
to the police officers that it was his gun connected him with the
erime of unlawful possession which independent evidence estab-
lished was being committed by someone. People v. Lo Turco
(256 App. Div. 1098, affd. 280 N. Y. 844) is to the same effect.
There two revolvers were found in a yard next door to a
defendant’s residence, where they had been concealed in a barrel
by the defendant’s wife just prior to the police officer’s visit.
This was held to have been sufficient corroboration of his
admission to the arresting officer that he had brought these
revolvers from Yonkers to his residence in Brooklyn and liked
“to play with them * * * and do some shooting ’’,

Recent and exclusive possession, made out by the admissions
coupled with these other circumstances, would be enough to
sustain defendant’s conviction of burglary, third degree, and
petit larceny (People v. Galbo, supra; People v. Spivak, supra;
People v. Di Lorenzo, supra).

Whether a new trial should be granted on account of errors
in the admission of evidence presents another question. The
introduction into evidence of the pages of newspaper obituary

PC 303
ee
columns found in the dresser of defendant’s bedroom constituted
error. These were dated November 4th and 5th, more than
six weeks subsequent to this burglary, and the only purpose
of their introduction into evidence was to convey to the jury
the idea that burglarizing Mr. Fealy’s apartment at the time
of his funeral conformed to a pattern of conduct which defendant
was pursuing in the case of other persons to burglarize their
houses while they were being buried. Such proof violates the
settled rule excluding evidence of similar, distinct crimes
(People v. Molineux, 168 N. Y¥. 264; People v. Rosenthal,
289 N. Y. 482, 488).

The count should be dismissed which charges possession of
burglar’s instruments as a felony. Defendant’s conviction
of possessing a dangerous weapon as a felony, burglary, third
degree, and petit larceny should be reversed and a new trial
granted due to error in the admission into evidence of the
obituary notices. There is no evidence that this weapon was
carried concealed on defendant’s person, consequently the
charges of ‘‘ carrying ’’ as distinct from possession in violation
of subdivision 4 of section 1897 of the Penal Law must be
dismissed.

The judgments, insofar as they convict defendant of the
crimes of carrying a dangerous weapon as a felony and posses-
sion of burglar’s instruments as a felony, should be reversed
and counts 38, 4 and 6 of the indictment dismissed and, insofar
as they convict defendant of the crimes of burglary, third degree
as a felony, petit larceny and unlawful possession of a dangerous
weapon as a felony, reversed and, as to counts 1, 2 and 5, a
new trial ordered.

Conway, Ch. J., Furp and Burge, JJ., concur with Vaw Voor-
ats, J.; Desmonp, J., dissents as to the count charging the
possession of a dangerous weapon, and votes to dismiss that
count upon the ground that there was no sufficient proof of
guilt thereof; Dys and Fronssen, JJ., taking no part.

Judgments reversed, etc.

In the Matter of Motim Rosmnsere, Appellant, against Crry or
Nuw Yorx, Respondent.

Argued June 8, 1955; decided November 22, 1955,

ee —305

ee

Stanley Tessel, Alvin H. Zipnick and Bernard Turkewitz for
appellant. I. The issues presented by this appeal are matters
of law and do not involve fact or discretion. (Wass v. Stephens,
128 N. Y. 123; Mawhinney v. Millbrook Woolen Mills, 231 N. Y.
290; Adler v. Zimmerman, 233 N. Y. 431.) IL. On the undis-
puted facts of this case, appellant was physically or mentally
incapacitated, within the meaning of subdivision 5 of section
50-e of the General Municipal Law, during the ninety-day
period. (Haines v. City of New York, 270 App. Div. 1003, 296
N. Y. 702; Bogle v. City of New York, 299 N. Y. 620; Matter of
Haas v. Incorporated Vil. of Cedarhurst, 272 App. Div. 1031,
298 N. Y. 757.) ILI. Appellant’s rights were not forfeited by
reason of the failure of her husband or some other person to
file a notice of claim on her behalf. (Murphy v. Village of Fort
Edward, 213 N. Y. 397; Biancoviso v. City of New York, 285
App. Div. 320.) IV. The nature and history of section 50-e of

the General Municipal Law call for liberal and not strict
construction. (Teresta v. City of New York, 304 N. Y. 440.)

Peter Campbell Brown, Corporation Counsel (Seymour B.
Quel and Ave Yeghenian of counsel), for respondent. The order
appealed from should be affirmed since the findings of Special
Term in favor of defendant on the factual issues have been
approved by the Appellate Division. In addition, the order is
of a discretionary nature and presents no question reviewable
by this court. (Matter of Sullivan v. Town of Babylon, 277 App.
Div. 791, 302 N. Y. 609; Matter of Donovan v. Board of Educ..of
Peekskill Union Free School Dist., 277 App. Div. 904, 301 N. Y.
739; Matter of Martin v. School Bd. of Union Free Dist. No. 28,
Long Beach, 301 N. Y. 233; Matter of Haas v. Village of Cedar-
hurst, 272 App. Div. 1031, 298 N. Y. 757; Matter of McEwan v.
City of New York, 279 App. Div. 802, 304 N. Y. 628; de Baillet-

Latour v. de Baillet-Latour, 301 N. Y. 428; Bata v. Bata, 306
N. Y. 96; Matter of McCarthy, 304 N. Y. 601; Hansen v. City
of New York, 299 N. Y. 136; Los Angeles Investment Securities
Corp. v. Joslyn, 282 N. Y. 488.)

Van Vooruis, J. This appeal involves section 50-e of the
General Municipal Law. On July 3, 1954, Mollie Rosenberg,
and her infant children, Gloria Rosenberg and Marvin Rosen-
berg, were injured in an automobile accident occasioned by a
collision with another vehicle upon the lower level of the
Manhattan Bridge. They were passengers in an automobile
driven by her husband, who was himself injured slightly in the
accident. The negligence charged against the City of New York
consists in permitting the traveled surface to become disinte-
grated so as to allow the smooth, slippery metal portions beneath
the covering of the roadway to be exposed, causing it to become
dangerous. Its condition is alleged to have become a public
nuisance during rainy weather.

This appeal does not concern whether this alleged negligence
on the part of the city would sustain a cause of action. The
present issue is whether the ninety-day period permitted by
section 50-e of the General Municipal Law should have been
extended for the filing of a claim by petitioner on account of
her incapacity resulting from the accident.

The accident happened, as above stated, on July 3, 1954. The
ninety-day period expired on October 1, 1954. The notices of
claim were filed on November 16, 1954.

Special Term denied all three applications to extend the time
for filing in a memorandum, stating that the husband of appel-
lant and the father of these infants, aged ten and sixteen
respectively, ‘‘ was quite capable of presenting such claims in
due time in behalf of the claimants (Matter of Adanuncio, 281
App. Div. 763). Neither were the infants so immature or so
severely injured as to excuse the delay (Matter of Adanuncio,
supra; Russo v. City of N. Y., 258 N. Y. 344).”? The Appel-
late Division reversed as regards the infant claimants, stating
that ‘‘ There are no circumstances which preclude, within the
exercise of discretion, the granting of the motion on behalf of
these infants. (Biancoviso v. City of New York, 285 N. Y. 320.)
It is apparent that the city has knowledge of the condition of

es 307
Dene

the roadway of the bridge.’? Concerning the mother, who is
the appellant here, the Appellate Division said: ‘‘ The appel-
lant as well as someone on her behalf was capable of executing
a notice within the statutory period. (Matter of Halloran v.
Board of Educ. of City of N. Y., 271 App. Div. 830; Matter of
Haas v. Incorporated Village of Cedarhurst, 272 App. Div. 1031;
Matter of Sullivan v. Town of Babylon, 277 App. Div. 791;
Matter of Donovan v. Board of Educ. of Peekskill Union Free
School Dist., 277 App. Div. 904; Matter of Johnson v. City of
New York, 278 N. Y. 945.) ”

Section 50-e of the General Municipal Law provides that the
ninety-day notice may be extended for not more than a year
‘¢ Where the claimant is an infant, or is mentally or physically
incapacitated, and by reason of such disability fails to serve
a notice of claim as provided in the foregoing subdivisions of
this section within the time limited therefor ’’. Application for
such leave must be made prior to the commencement of an action
to enforce the claim.

It thus appears that infancy or mental or physical incapacity
fulfils the condition precedent, whereby ‘‘ the court, in its
discretion, may grant leave to serve the notice of claim within
a reasonable time after the expiration of the * * * [ninety
days] specified in subdivision one.’? The failure to serve the -
notice of claim must be due to disability resulting from infancy
or incapacity. The Appellate Division held, in case of these
infants, that failure to file their claims was caused by their
being infants, and extended the time accordingly. No appeal
has been taken by the city from that determination, so that the
only issue before us is whether the time of appellant, the
mother, ought similarly to have been enlarged. Appellant’s
injuries were very severe, as will be pointed out in greater
detail. The papers before the court do not draw in issue that
she herself was incapacitated beyond the ninety-day period,
or that she proceeded to file her claim as soon as was reasonably
possible after her incapacity ceased. The effect of the decision
by the Appellate Division is that her husband should have done
it for her. There is nothing in the statute which states that a
husband, brother, cousin, friend or other person must attend
to the serving of a notice of claim if the injured person is
incapacitated from doing so. In appellant’s case, vicarious

90
ee

service of notice of claim within the year was at most permis-
sive but not mandatory. No claim can be filed, in any event,
after the lapse of one year, but in this instance the year did not
expire until July 4, 1955. The question is whether it is not
enough that the claimant herself is incapacitated, without the
necessity for the court to engage in a speculative inquiry con-
cerning whether she and her husband were living together as
husband and wife, who is a ‘‘ next friend ’’, or to investigate the
host of other considerations which would bear upon an assumed
obligation to file by another in her behalf. It is true that in
several of the Appellate Division decisions it has been stated
that such an application should be denied where it has not been
demonstrated that there was incapacity ‘‘ so as to prevent her
from serving a notice of claim sworn to by her or by someone in
her behalf.’ (Matter of Sullivan v. Town of Babylon, 277 App.
Div. 791, citing the other cases which are cited on the point in the
majority memorandum of the Appellate Division in this case.)
None of those decisions involved the present undisputed evidence
of incapacity on the part of the claimant due to injuries sustained.
in the accident. In each of them it would have been reasonably
possible for the claimant in person to have executed a claim
and to have attended to its service within the ninety-day period.
Whether the ninety-day period is to be extended does not, at
least in the case of an adult not adjudged to be mentally incom-
petent, depend upon whether there is someone other than the
claimant who can act in the matter prior to the expiration of
a year. Any idea of that sort probably originated from the
irrevocable limitation which comes with a lapse of a year from
the date of an accident. That requirement is absolute, and
neither infancy, insanity nor physical or mental injuries sus-
tained in the accident can eliminate that barrier. Therefore,
if such a claim is to be prosecuted, it is absolutely necessary
that before a year clapses someone other than the claimant
shall attend to the presentation of the claim, even though the
claimant may be totally incapacitated. Nothing in the statute,
however, requires that someone else shall act for such an injured
person as a condition precedent to the court’s extending the
ninety-day period for less than a year. To adopt such a rule
would, as previously stated, involve all sorts of complications,
and the statute does not enact it.

ee 309

The Appellate Division has held, in effect, that it lacked power
to extend the time in appellant’s case. Inasmuch as it appears
from the record as matter of law that she was incapacitated
until her claim was filed, the Appellate Division was empowered
to exercise its discretion concerning enlarging the time in appel-
lant’s case in its sound judicial discretion. The statement in
the Appellate Division’s memorandum that appellant was not
incapacitated is equivalent to a statement that they never
reached the exercise of discretion. Since the undisputed facts
contained in the affidavits indicate that she was incapacitated,
the Appellate Division erred upon a question of law, and should
have assumed jurisdiction to decide the question in the exercise
of its discretion. Ordinarily, under those circumstances, the
matter would be remitted to the Appellate Division to exercise
its discretion on the basis of her established incapacity concern-
ing whether under the circumstances of the case her time should
be extended.

It is apparent, however, that if appellant was incapacitated
by her injuries as matter of law, then her situation exactly
parallels that of her two children who are given the same status
by reason of their infancy. As was pointed out above, section
50-e is drafted in the alternative so that either infancy or
physical or mental incapacity provides a foundation on which
the court may act. Having decided, in its discretion, that the
time of the infants should be extended, the Appellate Division,
in the exercise of the power to extend the time in the case of
this appellant, could not, under the circumstances of this case,
have refused to extend appellant’s time likewise without its
decision being purely arbitrary. It thus indicated its exercise
of discretion.

Appellant’s incapacity is established by the record as matter
of law. Her injuries are thus stated in the affidavit of her
attending physician: ‘‘ (1) Lacerations of the face. (2) Fracture
of the right radius and right ulna. (3) Fracture of the nasal
pone. (4) Fractures of the left tibia, left fibula, and left femur.
(5) Fractures of the left ribs numbered 2, 3, 4, 5, 6, 7, and 10.
(6) Indentation of the sternum and probable fracture of the
sternum. (7) Brain concussion.’? This doctor further states
that ‘‘ As a result of the severe physical and emotional shock
that the patient sustained, she was in my opinion physically and

mentally incapacitated from exerting the required mental effort
to understand a notice of claim and the required physical effort
to file a claim for a period of 105 days from the date of the
accident.’’ He stated that for 77 days she remained in the
hospital, that during this time she was under the influence of
drugs much of the time, that she was removed to her home on
September 17, 1954, and was thereafter confined to her home
more than a month, during which period she exhibited symptoms
of extreme depression; that, while at home, she was staining
continually and was therefore confined to bed, that she is
unable to dress herself and requires assistance in perform-
ing such elementary tasks as going to the toilet, that during
the first month after her discharge from the hospital, she
was unable to concentrate for any length of time on any
subject, having periods of extreme depression, that she con-
stantly complained of dizzy spells, severe headaches, and nausea.
This affidavit is amplified by appellant’s own, in which, among
other matters, she mentions that 120 stitches were taken in
her face, that she was in great pain and spent much of the
time in a drugged condition, that she retained her attorneys
on November 11, 1954, and that they served her notice of
claim on November 16, 1954, the five days’ delay on their
part being due to an intervening weekend and the necessity for
making an investigaton. These affidavits are not contradicted
nor is their credibility attacked.

In view of all these injuries including about fifteen fractures,
and the constant application of powerful sedatives which
extended long after she had returned to her home, there could
have been no question about her personal disability arising from
physical and mental incapacity to file this claim. The only basis
on which the Appellate Division could have found that she
possessed such capacity is its expressed theory that her husband
could have filed for her. That theory is erroneous as matter of
law.

Service and filing of appellant’s notice of claim on November
16, 1954, is validated pursuant to section 50-e of the General
Municipal Law as if made within the ninety-day period following
the occurrence of the accident. For all purposes, including the
purpose of any action commenced by appellant against the City
of New York within the time limited by law, the claim shall

a 311
r=

be deemed to have been duly filed as provided by the order of
this court entered July 8, 1955. (309 N. Y. 754.) Costs are
awarded to appellant in all courts.

The order of the Appellate Division and that of Special Term
should be reversed. Service and filing of appellant’s notice of
claim on November 16, 1954, is validated pursuant to section 50-e
of the General Municipal Law as if made within the ninety-day
period following the occurrence of the accident. For all pur-
poses, including the purpose of any action commenced by
appellant against the City of New York within the time limited
by law, the claim shall be deemed to have been filed as provided
by the order of this court entered July 8, 1955, with costs to
appellant in all courts.

Conway, Ch. J., Fsonssen and Conn*, JJ., concur with
Van Voornis, J.; Dusmonn, Dyz and Fuup, JJ., dissent and
vote to affirm.

Orders reversed, ete.
be
Tue Proriz or raz Starz or Nuw Yor, Respondent, v. Dowanp
B. Winsar, Appellant.

Argued October 8, 1955; decided November 23, 1955.

"Designated pursuant to section 5 of article V1 of the State Constitution
in place of Burxe, J., disqualified.

John W. Condon, Jr., for appellant. I. The verdict of the
jury was contrary to law because the necessary element of fear
was not proved. II. The evidence of identification presented
against defendant was insufficient as a matter of law to overcome
the presumption of innocence. (People v. Meehan, 256 App.
Div. 268; People v. Cassidy, 160 App. Div. 651; People v. Seppi,
221 N. Y. 62; People v. Bearden, 290 N. Y. 478; People v. Gluck,
188 N. Y. 167; People v. Buchalter, 289 N. Y. 181.) ILI. The
court erred in failing to conduct a hearing of the factual back-
ground contained in the motion of defendant to set aside the
verdict and for a new trial. (People v. Cocco, 279 App. Div.
1129; People v. Durling, 303 N. Y. 382; People v. Leonti, 262
N. ¥. 256; People v. Arata, 254 N. Y. 565; People v. Shilitano,
215 N. Y. 715; People v. Pauley, 281 App. Div. 223.) IV. The
court erred in refusing defendant’s request to remain outside
of the courtroom while the People’s witnesses gave their identi-
fication and description of the individual who perpetrated the
crime for which defendant was indicted. (People v. Bragle, 88
N. Y. 585; People v. La Barbera, 274 N. Y. 339; People v. Sugar-

Le 313
ee

man, 248 N. Y. 255; Diae v. United States, 223 U. S. 442.)
VY. The court erred in quashing defendant’s subpena duces
tecum.

John F. Dwyer, District Attorney (Frederick M. Marshall of
counsel), for respondent. I. The evidence was sufficient, as a
matter of law, to warrant submission to the jury and supported
the jury’s finding of guilt. (Mahoney v. People, 3 Hun 202.)
IL. The motion by appellant to set aside the verdict and for a
new trial because of the alleged misconduct of a juror was
properly denied. (People v. Durling, 303 N. Y. 382; People v.
Sprague, 217 N. Y. 373; People v. Patrick, 182 N: Y. 131; People
v. Leonti, 262 N. Y. 256; People v. Bishop, 66 App. Div. 415;
People v. Mack, 35 App. Div. 114; People v. Gallagher, 75 App.
Div. 39, 174 N. Y. 505; People v. Rosen, 251 App. Div. 584, 275
N. Y. 627.) ID. The court’s denial of defendant’s motion to be
excluded from the view of the People’s witnesses was proper.
(People v. Strauss, 174 Mise. 881; People v. Defore, 242 N. Y.
18; People v. Gardner, 144 N. Y. 119; People v. Van Wormer,
175 N. ¥. 188.) IV. The quashing of defendant’s subpena duces
tecum was proper and did not prejudice the rights of defendant.
No exception was noted to the ruling of the court in quashing
said subpoena, and the claim of error by appellant in this regard
is not preserved for review. (People v. Pindar, 210 N. Y. 191;
People v. Cummins, 209 N. Y. 283.)

Per Curiam. The defendant-appellant was convicted of
second degree robbery and sentenced to seven and one-half to
thirty years as a second felony offender.

The appellant has raised numerous grounds of error, only
two of which merit discussion.

The appellant asserts that the trial court erred in refusing
the defendant’s request for permission to remain outside of the
courtroom while the People’s witnesses testified as to their
description of the person who perpetrated the crime for which
the defendant was indicted.

Section 356 of the Code of Criminal Procedure requires that
the defendant must be personally present at the trial. Although
he may waive this right to be present in court (People v. La Bar-
bera, 274. N. Y. 839), nevertheless the People have the right to
require his presence for the purpose of identification by its

314 |
ses

witnesses. A defendant must obtain the permission of the
Trial Judge to be absent from a trial. (Barnett v. Russell, 299
Ky. 242; State v. Johnson, 82 Kan. 450.) The orderly adminis-
tration of a trial requires this. The Trial Judge ‘‘ must have the
power at all times to keep the prisoner within sight of the court,
the jury, the counsel and the witnesses.’? (People v. Gardner,
144 N. Y. 119, 128.) Therefore, the refusal of the trial court
to grant the motion of the defendant to remain outside the
courtroom was not an abuse of discretion, or a denial of a
statutory or constitutional privilege.

Appellant’s second point has merit. In the course of moving
to dismiss the indictment on several grounds prior to sentencing,
the defense counsel submitted three affidavits to the trial court,
which stated, first, that every prospective juror was asked on
the voir dire whether he had any connection with or was a
member of a law enforcement agency; second, that one particu-
lar juror failed to reveal such a connection; third, that this juror
was actually ‘‘ a member of the Civil Defense Auxiliary Police,
attached. to the West Seneca Police’? and fourth, that the
defense would have excused this juror had this fact been known
to it. Defense counsel requested further time to explore the
matter, but this request was denied. The trial court thereupon
imposed sentence. No answering affidavits were submitted by
the prosecution until after the motion for a hearing was denied.

Counsel are entitled to truthful answers to the questions
which they propound on the voir dire. Although false answers
at such time about inconsequential matters do not necessarily
disqualify a juror (Sturrock v. State, 229 Ind. 161; Smith v.
State, 105 Tex. Cr. 104), it is a matter which must be closely
scrutinized to determine if any of defendant’s rights have been
impaired thereby. Defendants are entitled to a full and fair
disclosure of facts. It is only when they are armed with knowl-
edge of the facts that they can determine whether to accept or
reject a juror. If the prosecution had submitted answering
affidavits sufficient to challenge the movant’s statements at the
time the trial court disposed of the motion, the trial court might
have been justified in denying a hearing on the issues raised
thereby. (People v. Rosen, 251 App. Div. 584, affd. 275 N. Y.
627.) Since on the motion it was uncontroverted that the juror
did not reveal that he was a member of an auxiliary police force,

| 315
ee

we think further proof should be taken by affidavit or oral
testimony in order that the trial court, before passing on the
merits of the application for a new trial, and this court, shall
be fully informed as to all the circumstances relating to the
questioning on the voir dire as it pertained to the particular
juror.

The final determination of this appeal will be withheld so
that the defendant may promptly renew in the Supreme Court,
Erie County, the motion for a new trial, upon affidavits and
notice to the District Attorney, as limited by the Per Curiam
opinion herein. This is in accord with our practice. (People v.
Durling, 303 N. Y. 382.)

Corway, Ch. J., Desmonp, Furp, Frozssex, Van Voornis and
Burke, JJ., concur; Dyz, J., taking no part.

Final determination of appeal withheld, ete.

a .
Tue Peopie or tHE Srars or New Yorx, Respondent, v.
Davi Jacoss, Appellant.
Argued October 6, 1955; decided November 23, 1955.

David I. Shivite and Arnold M. Leibowitz for appellant.
I. Section 439 of the Penal Law was never intended to and does
not cover the instant case. (L'odd v. United States, 158 U. 8S.
278; People v. Phyfe, 136 N. Y. 554; People v. Shifrin, 301 N. Y.
445; People v. Shakun, 251 N. Y. 107; People v. Bence, 288
N. Y. 318; People v. Graf, 261 App. Div. 188; Chase v. New York
Central R. R. Co., 26 N. Y. 523; McCarthy v. International Ry.
Co., 126 App. Div. 182; People v. Hemleb, 127 App. Div. 356.)
II. The evidence adduced was insufficient to sustain a conviction.
(June Fabrics v. Teri Sue Fashions, 194 Misc. 267; Cragie v.
Hadley, 99 N. ¥. 131; Corrigan v. Bobbs-Merrill Co., 228 N. Y.
58; Gibney v. Marchay, 34 N. Y. 301; Orr & Co. v. Fireman’s
Fund Ins. Co., 235 App. Div. 1.)

Frank 8. Hogan, District Attorney (Harold Roland Shapiro
of counsel), for respondent. Defendant’s guilt was established
beyond a reasonable doubt. (McCroskey v. Hamilton, 108 Ga.
640; Marsh v. Beraldi, 260 Mass. 225; American Sav. Life Ins.
Co. v. Riplinger, 249 Ky. 8; Sawms v. Parfet, 270 Mich. 165;
People v. Levy, 283 App. Div. 383; State v. Landecker, 100
N. J. L. 195, 103 N. J. L. 716.)

Van Voorais, J. Defendant-appellant is a professional
photographer. He conceived it to be to his professional advan-
tage to learn the names and home addresses of passengers
debarking from ocean liners at New York City, in order that he
might take and more easily market their photographs in pursuit

Po 317
nama

of his profession. Lists of inbound passengers, known as
passenger manifests, are required by Federal statute and regu-
lation to be delivered by incoming vessels to the customs,
immigration and public health authorities. These lists contain
the street addresses of returning residents of this country
throughout the United States. Apparently defendant wanted to
be able to send proofs of photographs of passengers taken on
arrival to the subjects at their homes, or, perhaps, to send
glossy prints to their home newspapers. Whatever the object
may have been, defendant wanted to inspect the manifests. A
United States Lines purser testified that he accepted $10 apiece
from defendant for copies of these passenger manifests. In
consequence, defendant has been convicted of violating section
439 of the Penal Law, making it a misdemeanor corruptly to
influence agents, employees or servants of another. The
material portions of this section read as follows: ‘‘ A person
who gives, offers or promises to an agent, employee or servant
of another, any gift or gratuity whatever, without the knowledge
and consent of the principal, employer or master of such agent,
employee or servant, with intent to influence such agent’s,
employee’s or servant’s action in relation to his principal’s,
employer’s or master’s business; or an agent, employee or
servant who without the knowledge and consent of his principal,
employer or master, requests or accepts a gift or gratuity or a
promise to make a gift or to do an act beneficial to himself or
to another, under an agreement or with an understanding that
he shall act in any particular manner in relation to his prin-
cipal’s, employer’s or master’s business, or receives a reward
for having so acted; * * * is guilty of a misdemeanor ”’.

In People v. Graf (261 App. Div. 188, 191~192) it was said:
«« We think that ‘ particular manner,’ as used in the statute, was
intended to mean a particular manner which would serve the
purpose of the donor of the money rather than that of the
employer, and that the money was given and accepted with the
intention to affect some decision by the employee involving
exercise of discretion on his part with respect to his employer’s
interest.”? (Italics supplied.)

The latter statement appears to characterize the scope of the
entire:section. The question in this case does not concern the
ethics of paying gratuities, but relates to whether this defendant

is guilty of the specific crime defined by this statute. In order
to be guilty, these moneys must have been paid to the purser
to influence his action concerning a matter affecting his
employer’s interest. A common illustration of such a criminal
act would be payment of money to a purchasing agent, to cause
him to buy goods for his employer from one vendor rather than
from another. Here, the interest of the United States Lines
does not appear to have been involved. The testimony of the
purser, on which defendant’s conviction hinges, is that the
purser had notified his superior of the fact that this practice
was being carried on, but that the superior ‘‘ gave me no answer
and he didn’t say yes or no.’? The reason on account of which
no reply was given is evidently that the interest of the United
States Lines was not regarded as being involved.

The record further indicates that the United States Lines did
not confine the delivery of its passenger manifests to the Federal
customs, immigration and public health authorities, but also
caused them to be sent to certain newspapers. The manifests
were thus given publicity by the direct order of the company.
Although the record does not show that the purser was told to
make them available to all newspapers, the circumstance that
they were to be given publicity emphasizes that the purser’s act
in making them available to defendant involved no exercise of
discretion in the conduct of the business of this corporation.
Submitting these documents to the customs, immigration and
public health bureaus was part of the occupation of this steam-
ship company, but it was not in the publishing business. Since
money was not paid to influence the purser to perform an act
involving discretion in the conduct of his employer’s business,
defendant has not been proved to be guilty of the crime which
is defined by section 439 of the Penal Law.

The judgments should be reversed and the information
dismissed.

Conway, Ch. J., Froussen and Burks, JJ., concur with Van
Vooruis, J.; Desmonp and Funo, JJ., dissent and vote to affirm;
Dyes, J., taking no part.

Judgments reversed, etc.

In the Matter of Cartes W. Hucuss, Respondent, against Boarp
or Hicuer Epucation or tHe Crry or Nuw Yor, Appellant.

Argued October 18, 1955; decided November 23, 1955.

Peter Campbell Brown, Corporation Coumsel (Daniel T.
Scannell, Seymour B. Quel and Helen R. Cassidy of counsel), for
appellant. The Legislature, in enacting section 12-a of the Civil
Service Law, gave legislative recognition to the fact that certain
conduct constitutes disloyalty to the State, and guaranteed any-
one accused of such conduct a trial, either administrative or
judicial, but not both. (Matter of Fusco v. Moses, 304 N. Y. 424;
Thompson v. Wallin, 301 N. Y. 476; Adler v. Board of Educ.,
342 U. 8. 485; Matter of Rabouine v. McNamara, 301 N. Y. 785;
Matter of Board of Higher Educ. v. Cole, 236 App. Div. 777,
288 N. Y. 607 ; Matter of Levitch v. Board of Educ., 243 N.Y. 373;
Matter of McDowell v. Board of Educ., 104 Misc. 564; Matter of
Chapin v. Board of Educ., 291 N. Y. 241; Matter of Ross v.
Wilson, 308 N. Y. 605; Matter of Board of Educ. of Central
School Dist. No. 1 v. Allen, 283 App. Div. 376.)

Osmond K. Fraenkel for respondent. I. Petitioner was dis-
missed under section 12-a of the Civil Service Law. IL. Petitioner
hag an absolute right to a hearing in court. (Ng Fung Ho v.
White, 259 U. S. 276; United States v. Rumely, 345 U. 8. 41;
Peters v. Hobby, 349 U. 8. 331; Thompson v. Wallin, 301 N. Y.
476; Adler v. Board of Hduc., 842 U..S. 485; Matter of
L’Hommedieu v. Board of Regents, 276 App. Div. 494.)

ee 32)
eee

Dzsmonp, J. Petitioner, an associate professor at Hunter
College, which is maintained by the City of New York, was in
1954 (with other faculty members whose cases are not before
us on this appeal) brought to trial before a trial committee of
appellant Board of Higher Education of the City of New York.
The charges, omitting one on which he was not found guilty,
were two. The first charge was that petitioner, from 1938, had
been a member of the Communist party which in proceed-
ings taken pursuant to the ‘‘ Feinberg Law ’’ (Education Law,
§ 3022) and the Rules of the State Board of Regents had been
listed in 1953 by the Board of Regents as a subversive organi-
zation within the meaning of section 12-a of the State Civil
Service Law. The second charge against petitioner accused
him of failing, by refusal to answer questions, to co-operate in
an investigation by the Board of Higher ‘Education into past
or present membership of municipal college staff members in
the Communist party or other subversive organizations. The
board’s trial committee, after hearings at which testimony was
taken and at which petitioner was represented by counsel, recom-
mended that petitioner be found guilty on all three charges and.
dismissed. The board itself, after further hearings, found peti-
tioner guilty on the two charges above summarized, and ordered
his immediate dismissal from the college faculty.

To review his dismissal on the second, or non-co-operation
charge, petitioner appealed to the State Commissioner of Edu-
cation, pursvant to section 310 of the Education Law. As to
his dismissal on the first, or Communist party membership
charge, however, he brought the present proceeding to obtain
a de novo trial in open court before the Supreme Court of this
State. To such a trial, he asserts, he is entitled under subdi-
vision (d) of section 12-a of the Civil Service Law. The sole
question before us on this appeal is as to whether a public
school or college teacher of this State, dismissed because of
Communist party membership, has a right after dismissal to
a court trial of the same charges. Conformably to Thompson v.
Wallin (301 N. Y. 476) we answer that question in the affirmative.

The several statutes which must be read together to solve
this problem have been so carefully described and analyzed in
Thompson v. Wallin (supra) and in the United States Supreme

resem

Court’s affirmance thereof (Adler v. Board of Educ., 342 U. 8.
485) that a much briefer statement thereof will suffice here. In
1917, section 3021 of the Education Law was enacted (as § 568)
to authorize the removal of public school teachers for’ treason-
able or seditious acts or utterances. The 1939 legislative
session produced section 12-a of the Civil Service’ Law,
applicable to all public employees including teachers and
forbidding the appointment or continuance in service of any
treasonable or seditious employee. It is on subdivision (d)
of section 12-a that petitioner relies to support his demand
here for a trial de novo. That subdivision reads thus: ‘‘ (d) A
person dismissed or declared ineligible may within four months
of such dismissal or declaration of ineligibility be entitled to
petition for an order to show cause signed by a justice of the
supreme court, why a hearing on such charges should not be
had, Until the final judgment on said hearing is entered, the
order to show cause shall stay the effect of any order of dis-
missal or ineligibility based on the provisions of this section.
The hearing shall consist of the taking of testimony in open
eourt with opportunity for cross-examination. The burden of
sustaining the validity of the order of dismissal or ineligibility.
by a fair preponderance of the credible evidence shall be upon
the person making such dismissal or order of ineligibility.’’
1949 brought the ‘‘ Feinberg Law’? (Education Law, § 3022,
supra) which, obviously to implement the other two statutes
we have discussed, set up a system whereby the State Board of
Regents was required after hearings to list subversive organi-
zations. Another part of the Feinberg Law directed the Board
of Regents to adopt and ‘enforce rules for the disqualification
of teachers (and others) who violate section 3021 of the Educa-
tion Law (swpra) or who are ineligible under section 12-a of
the Civil Service Law (supra). Membership in any listed sub-
versive organization is made, by the Feinberg Law, prima facie
evidence of disqualification for employment in the public school
system. .
Thus, section 12-a as well as section 3021 dealt with the
removal of seditious teachers. Section 12-a forbade the employ-
ment or continuance in service of any public servant, including
a teacher, who advocated the overthrow of our National Govern-

ee 32:
ses!

ment by force. And section 12-a in the plain words above quoted
from its subdivision (d) set up an open court hearing for ‘¢ A
person dismissed or declared ineligible ’’ on such grounds.
There is no escape from the conclusion that such a trial is avail-
able to a teacher so dismissed, and we so held in Thompson
v. Wallin (301 N. Y. 476, supra). In our Thompson opinion
(p. 494, supra), after analyzing all the administrative proce-
dures provided by the several statutes to bring about a teacher’s
dismissal, we continued thus: ‘‘ Should an order of ineligibility
then issue, the party aggrieved thereby may avail himself of
the provisions for review prescribed by the section of the statute
last cited above ’’. The ‘‘ section of the statute last cited above ”
was 12-a (subd. [d]) of the Civil Service Law (supra) which
provides an open court de novo trial after dismissal.

When Thompson v. Wallin came to the United States Supreme
Court (sub nom. Adler v. Board of Educ., 342. U. 8. 485, supra),
the majority opinion in that court quoted verbatim (p. 495) our
Thompson opinion language above quoted. Thus, our construc-
tion of the de novo trial provision of section 12-a as applicable to
Feinberg Law removals was accepted by the Supreme Court as
being part of the protections provided by this State for teachers
accused of communism. Indeed, the State Board of Regents in
its brief filed with us had carefully pointed out that ‘‘ A teacher
found disqualified pursuant to the Feinberg Law” had ‘‘ an
election of remedies ”’, consisting of ‘‘ several methods of appeal
or review from which to choose ’’. Then the brief listed three
such remedies and one of them was that of a court trial under
subdivision (d) of section 12-a. When the case later went to
the Supreme Court, the State’s brief (as amicus curie) ana-
lyzing our opinion told the highest court that the construction
of the statute by our court was binding on the Supreme Court,
including our holding that the Feinberg Law afforded to any
dismissed teacher a section 12-a (subd. [d]), court review.
Indeed, the brief filed with us by the present respondent (Board
of Higher Education) in a case heard with Thompson v. Wallin
(supra) expresses no more than a doubt that the trial de novo
procedure of section 12-a is available after Feinberg Law dis-
missals. The Special. Term holding in that associated case
(Lederman v. Board of Educ., 196 Mise. 873; see pp. 882, 883)

32 ee
ee

similarly expressed uncertainty as to whether subdivision (d)

of section 12-a of the Civil Service Law could be used to review

a teacher’s Feinberg Law dismissal. We removed that uncer-
* tainty in our Thompson v. Wallin opinion (supra).

The board’s arguments on this appeal boil down to this: that
the Legislature, as to such a dismissal where other statutes
mandate a full administrative hearing and allow an article 78
of the Civil Practice Act court review or, in the alternative,
an appeal to the State Commissioner of Education, could not~
rationally have intended that, besides those choices, a dismissed
teacher could choose to have a trial de novo in court. (But
there are other situations where a trial de novo is a right; see
Staten Is. Edison Corp. v. Maltbie, 296 N. Y. 374; Justice Ct.
Act, § 442.) The only, but sufficient, answer is that subdivision
(d) of section 12-a (supra) provides such a choice. It is cum-
bersome and unusual to allow such a second trial but the Legis-
lature may have had its reasons for providing so extreme a
measure of protection. The majority opinion in the Appellate
Division suggests this as one such possible reason: that the
Legislature realized that a Feinberg Law dismissal would,
because of certain language in that statute, result in not only
a teacher’s dismissal but in his permanent ineligibility for any
public position in this State. We do not think it necessary or
appropriate at this time to decide whether or not such a result
follows such a dismissal. We do point out that, according to
the very language of these charges and the discussions of them
at the board’s hearings, the charge which petitioner wishes now
to try in the courts was based on both section 12-a and the
Feinberg Law. That necessarily brought into the picture sub-
division (d) of-section 12-a. It is no answer to this that the
detailed procedures followed by the board were those described
in subdivision. 10 of section 6206 of the Education Law and in
the board’s own by-laws. The board’s right to dismiss this
teacher, as distinguished from pure procedure, was necessarily
grounded on both the Feinberg Law and section 12-a of the
Civil Service Law.

In the board’s brief in this court it is suggested, rather than
argued, that the peculiar phraseology of subdivision (d) of
section 12-a—‘‘may * * * be entitled to petition-’’ the

a 325
De
Supreme Court, etc— means something less than an absolute
right to go into the Supreme Court. We do not accept such
a construction. It not only opposes the construction announced
by us in Thompson v. Wallin (supra) but would make the sub-
division useless if not meaningless.

The order appealed from should be affirmed, with costs, and
the question certified answered in the negative.

Conway, Ch. J., Fo, Froxssen and Van Vooruis, JJ., concur ;
Dvyz and Burs, JJ., taking no part.

Order affirmed, ete.

a
In the Matter of the Estate of Nazzms Kiamim, Deceased. Farmep
Kiamin, as Executor of Nasurs Kramrs, Deceased, Appellant;
Coton1a, Trust Company, Respondent.

Argued October 17, 1955; decided November 23, 1955.

326

Sidney A. Fine, Max Rosner and Arthur Karger for appel-
lant. I. The alleged public sale of the collateral was invalid as
a matter of law since the bank failed to comply with the common-
law and statutory requirements for a public sale. (Cole v.
Manufacturers Trust Co., 164 Mise. 741; Eppert v. Lowish, 91
Ind. App. 231; Laclede Nat. Bank v. Richardson, 156 Mo. 270;
Dykers v. Allen, 7 Hill 497; Gandy v. Collins, 160 App. Div. 525,
214 N. Y. 293; Jones v. National Chautauqua Co. Bank, 272 App.
Div. 521; Jacobs v. National Bank of Far Rockaway, 208 Mise.
923; Toplite v. Bauer, 161 N. Y. 325.) IL. The bank waived the
provisions of the note authorizing it to sell the collateral without
notice to the owner; and it was consequently powerless to sell
the stock here involved without first giving ten days’ notice of
the time and place of sale, as required by section 201 of the Lien
Law. The one day’s notice of sale, given by the bank only to
some of the parties entitled to notice, was inadequate as a matter
of law. (Loplite v. Bauer, 161 N. Y. 825; Gillet v. Bank of
America, 160 N. Y. 549; General Phoenia Corp. v. Cabot, 300
N. Y. 87.) IIL. The waiver of notice of sale died with decedent,
and any sale thereafter made without the notice required by

Pe 327

law was invalid. (Francis v. Ferguson, 246 N. Y.516.) IV. The
bank did not acquire valid title to the securities in question by
the sale purportedly held on November 15, 1933, in view of its
failure to comply with section 104 of the Banking Law. (Tooker
v. Inter-County Tit. Guar. & Mtge. Co., 295 N. Y. 386.) V. The
Surrogate erred in refusing to compel respondent to produce
the Leidesdorf report at the trial, as well as in rulings on the
inspection and admissibility of various other records and docu-
ments. (Smith v. Rentz, 131 N. Y. 169; Carradine v. Hotchkiss,
120 N. Y. 608; Saal v. Katz, 81 Mise. 239; Matter of Kevill, 166
Mise. 230.)

Harry Rodwin, Monroe Goldwater, Richard M. Goldwater and
Bernard Katz for respondent. I. The pledged collateral was
actually sold at public auction at the time and place specified in
the notice of sale. II. The public sale of the collateral in ques-
tion was valid and proper and in conformity with all necessary
legal requirements. (Mount Vernon Trust Co. v. Bergoff, 272
N. Y¥. 192; Bay Parkway Nat. Bank v. Shalom, 270 N. Y. 172;
President & Directors of Manhattan Co. v. Cocheo, 256 App.
Div. 560; Amend v. Hurley, 293 N. Y. 587; Purvin v. Grey, 271
App. Div. 954; Toplite v. Bawer, 161 N. Y. 325; Bailey v. Ameri-
can Deposit & Loan Co., 52 App. Div. 402, 165 N. ¥. 672; Smith
v. Craig, 211 N. Y. 456; Jacobs v. National Bank of Far. Rock-
away, 208 Mise. 923; Turner v. Metropolitan Trust Co., 207 F.
495; Bush v. Adams, 165 F. 802; Matter of Mertens, 144 F. 818.)
III. The bank fully complied with all statutory and common-law
requirements for a public sale. (Cole v. Manufacturers Trust
Co., 164 Mise. 741; General Phoenia Corp. v. Cabot, 800 N. Y.
87.) IV. The waiver of notice of sale was effective regardless
of the death of the maker. (Matter of Tabbagh, 167 Misc. 156.)
V. The court below properly denied the request of appellant-
petitioner for inspection of its exhibit K for identification.
(Jones v. Nichols, 42 App. Div. 515; Shelton v. Holewasser,
46 Misc. 76; Siegel v. Dubinsky, 56 Misc. 681; Mengis v. Fifth
Ave. Ry. Co., 81 Hun 480.)

Dusmonp, J. While this is in form a Surrogate’s Court dis-
covery proceeding, the dispute which it brings up for decision is
as to whether or not respondent trust company converted cor-
porate stock belonging to the estate of which appellant is execu-

328 |
ee

tor, and which stock had been held by the trust company as
collateral security for a promissory note made by appellant’s
testator. The underlying controversy is as to whether the
pledgee’s purported public auction sale of those shares was
valid.

The events took place many years ago but this proceeding
was brought in time and there is no question of time limitations.
Since the order below must be reversed on a single ground —
inadequacy of the notice of sale—it will not be necessary to
cnlarge on the background facts. On September 21, 1933, the
trust company took from Najeeb Kiamie a renewal note due
October 23, 1933, for $26,000, representing the unpaid balance
of much larger previous loans. At the time of that renewal
Kiamie was sojourning in his native Syria but he had left with
the trust company blank signed notes for purposes of renewing
his loans. As collateral security for this September renewal,
as for previous loans, there was lodged with the bank (besides
some other property not here involved) all the shares of the
capital stock of four corporations owned by decedent and his
family. Those corporations had title to nine parcels of mort-
gaged real property in New York City. Before decedent had
left for Syria in June, he had signed a previous $26,000 renewal
note due in three months and had promised to pay $1,000 in
reduction of principal at the maturity of that note. While
decedent was abroad, his children who held a power of attorney
from him had various conversations and negotiations with the
trust company concerning the financial difficulties of the Kiamie
corporations which included arrears in taxes and mortgage
interest, and resulting threats of mortgage foreclosures. With-
out going into details, it may be said that those difficulties were
serious and pressing. Early in September members of the
Kiamie family told the trust company officers that the $1,000
promised for September by their father could not be paid. The
trust company, on September 21, 1933, accepted a further thirty-
day renewal of the $26,000 note (using another blank, signed note
left with the trust company by decedent) with a new promise
by the Kiamies to pay $1,000 principal on maturity. Numerous
further conferences were then held but without tangible results.
On October 23, 1933, the September note (last in the series) |

De 329
sess

went into default and no payment was made thereon. The
affairs of the corporations went from bad to worse. Najeeb
Kiamie, the father, died in Syria on November 7, 1933. On
November 10th, after the Kiamie family had refused to give an
assignment of rents to a mortgagee and after a foreclosure
action had been commenced and receivers appointed as to some
of the properties, the trust company notified the Kiamie family
that the collateral would have to be sold. On November 13th, the
trust company sent to the widow and three of the Kiamie chil-
dren and to their attorney (two of these children and the attor-
ney were the executors named in the father’s will) written
notice that the stocks would be sold at public auction at an
auction house in New York City at 12:30 o’clock p.m. on Novem-
ber 15, 1933. Notice of the sale was published in two New York
City morning newspapers on November 14th and 15th and the
collateralled stocks were listed in the printed catalogue of the
auctioneer. No one representing the Kiamie family or their
corporations appeared at the sale. The stocks were struck down
(in one lot) to the trust company at its bid of $5,000, and it
took title thereto in the name of its nominee.

The defaulted promissory note contained this language:
‘Upon the non-payment of this note * * * the Trust Com-
pany shall have the right to sell, assign and deliver the whole
or any part of the property hereinabove specifically described

* * at any time or times either at the New York Stock
Exchange or at any other Exchange or at any broker’s board,
or at public or private sale, either for cash or on credit or for
future delivery, without demand, advertisement or notice, which
are hereby waived * * *. Upon any sale as aforesaid, the
Trust Company may purchase and hold the whole or any part
of the property sold, free from any claim or right of redemption
of the undersigned, which is hereby waived and released.’’

We hold, as did the courts below, that the trust company had
the right to sell the security and to bid at the sale. However,
the published notice of sale, we hold, was so defective in its
description of the property that the sale itself was entirely
void. The auctioneer’s advertisement as published in the two
newspapers announced the public auction sale at the auction
rooms of a number of items in addition to the Kiamie stocks.

330 Le
seas

As to the Kiamie stocks, the only references or descriptions
were these:

‘5 shs. Sherman Investing Corp. (N. Y.)
8 shs. Kiamie Holding Corp. (N. Y.)
83 shs. Haviland Holding Corp. (N. Y.)
100 shs. La Dana Holding Corp. (N. Y.) ’’

No information whatever was given to the reading public as
to what, if anything, those shares represented. There was no
disclosure as to what kind of business, if any, the corporations
conducted or as to what their assets or liabilities were, and no
statement that the shares offered for sale were the whole out-
standing capital stock of the corporations. If these had been
listed or otherwise well-known stocks, the description might

have furnished a sufficient clue (see Wheeler v. Newbould, 16

N. Y. 392, 397; Dykers v. Allen, 7 Hill 497). But all we had here
were the meaningless names of four of the innumerable business
corporations chartered in New York State (public records show
that in the early 1930’s more than 20,000 business corporations
were chartered annually in New York State, and at least 100,000
such domestic business corporations filed annual tax returns).

A pledgee’s duty adequately to advertise his sale is not
imposed by any statute but by ‘‘ the general maxims of equity ”’
which govern pledges (Toplite v. Bauer, 161 N. Y. 325, 332).
Equity assigns to pledgor and pledgee a trust relationship with
resulting obligations on the pledgee (Torrey v. Bank of Orleans,
9 Paige Ch. 649, 663; Toplitz v. Bauer, supra, p. 332; Jones v.
National Chautauqua Bank, 272 App. Div. 521, 527; Colebrooke
on Collateral Securities [2d ed.], § 87). One of those obligations
(on mortgagee and pledgee) is to ‘‘ use every effort to sell the
estate under every possible advantage of time, place, and pub-
licity ’’? (Perry on Trusts and Trustees [4th ed.], § 6020; see
Cole v. Manufacturers Trust Co., 164 Mise. 741, 747). The
pledgee must do nothing to impair the pledge’s value (Toplite
v. Bauer, supra; Gillet v. Bank of America, 160 N. Y. 549, 560,
and authorities cited). A notice of sale which does not identify
the property sold cannot be a sufficient one (Perry on Trusts
and Trustees [4th ed.], § 782; Newman v. Jackson, 25 U. 8. 570),
since the notice must be reasonable and customary (Gruman
v. Smith, 81 N. Y. 25, 28; Small v. Housman, 208 N. Y. 115, 121).

a 331

Obviously, the mere listing of a certain number of shares of
an unknown corporation falls far short of compliance with these
requirements. While we need not go so far as did the learned
author of ‘‘ Drastic Pledge Agreements’’ (Seasongood,
29 Harv. L. Rev. 277) who argued that such a notice of sale
should disclose the owner’s name, the name of the pledgee and
the amount due on the pledge, we find it impossible to announce
detailed rules applicable to every such notice of sale. But the
notice at the least must contain enough information to alert
investors and to invite competition (Dykers v. Allen, supra,
pp. 499-500; Eppert v. Lowish, 91 Ind. App. 281, 237, 238;
Laclede Nat. Bank v. Richardson, 156 Mo. 270, 280, 282-283).

The power conferred on the pledgee by this note to sell at
public or private sale and without advertisement or notice,
leaves intact the law’s own requirement that every such sale
be conducted in good faith (General Phoenia Corp. v. Cabot,
300 N. Y. 87, 94; Industrial & General Trust v. Tod, 180 N. Y.
215, 225, 226; Cole v. Manufacturers Trust Co., supra; Perry
on Trusts and Trustees [4th ed.], § 602q; Restatement, Security,
§ 49). While the pledgee under such an agreement as this may
become the purchaser (Bryan v. Baldwin, 52 N. Y. 232, 235;
General Phoenia Corp. v. Cabot, supra, p. 94), his exercise of
that right makes it all the more necessary that the law’s insist-
ence on ample notice be heeded. We need not add that our
references to ‘ good faith ’’ carry no implication that the lender
here was guilty of actual bad faith.

The Surrogate here held that the requirements of section 202
of the Lien Law (two successive weeks’ publication and sale not
less than fifteen days after first publication) were not appli-
eable to a sale of pledged property. He thought that under
section 2 of that law this respondent was not such a ‘‘ lienor ”’
as is bound by the Lien Law. There are decisions to the con-
trary (Gandy v. Collins, 160 App. Div. 525, revd. on another
ground 214 N. Y. 293; Jacobs v. National Bank of Far Rock-
away, 208 Mise. 923; Jones v. National Chautauqua Bank, 272
App. Div. 521, 527, supra). We do not think the question arises
on this record, since the borrower here plainly and effectively
waived (see Fullerton v. Northern Bank of N. Y., 184 App. Div.
37, 48) any particular kind of ‘‘ advertisement or notice’. The
result was, as explained above, that there remained only the

332 |
eee

equitable obligations of good faith, which includes as to an
auction sale appropriate notice by advertisement (see 72
C. J. 8., Pledges, § 59, subd. a, par. [2]).

The order appealed from should be reversed, with costs in
all courts, and the proceeding remitted to the Surrogate’s
Court for further proceedings not inconsistent with this opinion.

Corway, Ch. J., Froussex, Van Voornis and Burks, JJ., con-
cur; Dyz and Funo, JJ., taking no part.

Order reversed, ete.

Mary Cassipy, Respondent, v. Curia Casstvy, Appellant, et al.,
Defendant.

Argued November 18, 1955; decided November 30, 1955.

Lo

Charles G. Coster, John F. X. Finn and Carmelo J. Pernicone
for appellant. I. There is no evidence of any confidential rela-
tionship existing between appellant and decedent. (Ten Eyck
v. Whitbeck, 156 N. Y. 341.) II. Appellant fully complied with
the direction of the Appellate Division to explain her part in
the execution by decedent of his selection of beneficiaries.
III. Decedent had never previously designated his wife as the
beneficiary of his retirement benefits. IV. Fraud, undue influ-
ence and misrepresentation are not presumed — their existence,
when alleged, must be affirmatively proved. (Smith v. Keller,
205 N. Y. 39; Matter of O’Brien, 115 Misc. 728; Matter of Ruef,
180 App. Div. 203, 223 N. Y. 582; Matter of Dowdle, 224 App.
Div. 450, 256 N. Y. 629; Matter of Schillinger, 258 N. Y. 186;
Matter of Kindberg, 207 N. Y. 220; Lynch v. Gibson, 254 App.
Div. 47; Low v. State, 281 App. Div. 309; Shallow v. Carballal,
278 App. Div. 328, 303 N. Y. 623; Matter of Ford, 279 App. Div.
152, 304 N. Y. 598.)

334 PC
ees)

Myron Sulzberger, Jr., and Seymour S. Epstein for respond-
ent. I. The disposition or benefit made by decedent to his
sister of one half of all he owned when he was sick, weak and
dying and had a wife, children and grandchildren is presumed
void and fraudulent and it was incumbent on the sister to rebut
this presumption by showing affirmatively by clear and con-
vincing evidence that the disposition or benefit to her was free
from deception, fraud and undue influence and was made openly,
fairly and voluntarily. (Butler v. Prentiss, 158 N. Y. 49; Green
v. Roworth, 113 N. Y. 462; Matter of Smith, 95 N. Y. 516;
Kateman v. Aina Life Ins. Co., 309 N. Y. 197.) IL. The trial
court’s comments concerning burden of proof did not constitute
error. (Fisher v. Bishop, 108 N. Y. 25; Doheny v. Lacy, 168°
N. Y. 213.) IIL. The trial court properly complied with the
directions of the Appellate Division. (Katzman v. Avina Life
Ins. Co., 309 N. Y. 197.) IV. The findings of fact and the con-
clusions of the trial court are supported by sufficient evidence.
(Boyd v. Boyd, 252 N. Y. 422; Amend v. Hurley, 293 N. Y. 587;
Potts v. Pardee, 220 N. Y¥. 431; Rose v. Balfe, 223 N. Y. 481;
Plumb v. Richmond Light & R. R. Co., 233 N. Y. 285; Chaika
v. Vandenberg, 252 N. Y. 101; Banker v. Haynes Stellite Co.,
135 Mise. 452.) V. To rebut the presumption of fraud and
undue influence or unfairness in a situation involving a confiden-
tial or fiduciary relationship, it is the usual rule to require
proof that a third and disinterested and competent party
advised the donor of all his rights prior to making the distri-
bution, and the execution of the forms in-the decedent’s hand-
writing by itself will not overcome the presumption of fraud
and undue influence.

Per Curiam. In 1923 John A. Cassidy, an employee of the
City of New York, designated his wife as sole beneficiary of his
retirement fund benefits. On May 15, 1951, he executed Option
1, pursuant to the provisions of the retirement system and made
his wife and his sister cobeneficiaries. The defendant and a
commissioner of deeds were the only persons present when the
decedent executed his retirement papers. Decedent died on’
August 15, 1951. :

The wife of decedent then brought this suit in equity against
decedent’s sister seeking a judgment declaring defendant to

ae | 335
es

be a constructive trustee for the plaintiff of upwards of $18,000,
which represents one half of decedent’s retirement fund benefit.
The wife’s complaint alleges fraud and undue influence in the
execution of Option 1 in that it is claimed that the defendant
falsely represented to decedent that it was designed to provide
all the benefits for his wife; that decedent believed the repre-
sentations and that he was in such a weak mental and physical
state as to be unable to control his will and was prevailed upon
by defendant to execute the option.

Defendant rested at the close of plaintiff’s case and the trial
court dismissed on the merits. On appeal, the Appellate Divi-
sion reversed and granted a new trial upon the theory that the
sister ‘“‘ owed an explanation ’’ to the plaintiff and the court
(283 App. Div. 618, 620). On the second trial, Special Term
found for the plaintiff holding that the sister not only had to
explain the circumstances surrounding the transaction, but had
to carry the burden of proof; that the sister gave no explanation

_and ‘in the Court’s judgment, no persuasive explanation could
have been given.’’? The Appellate Division has affirmed.

The burden. of proving the allegations necessary to warrant
the imposition of a constructive trust was upon the plaintiff.
Had the plaintiff demonstrated fraud and undue influence, prima
facie, while the ultimate burden would not shift, the burden of
going forward with evidence would have passed to the defendant.
However, the plaintiff introduced no evidence to support her
allegations of fraud or undue influence. Nor did plaintiff demon-
strate, prima facie, that thé relationship between the defendant

“and her brother was of a confidential nature so as to cast upon
the defendant the burden of going forward with evidence to
show that there had been no abuse of such relationship. Not
only was the defendant required to show the facts and circum-
stances surrounding the execution of the option, as the Appel-
late Division had on the first appeal suggested, but Special Term

“incorrectly shifted the burden of proof from the plaintiff to
defendant so ‘as to, require the defendant to probe the mind of
the decedent and explore the mental processes which led to and
caused him t¢:-designate the cobeneficiaries whom he did. The
judgment in;favor of plaintiff must be reversed and the com-
plaint dismissed for the reason that plaintiff failed to make
out a prima facie case for the relief sought by her.

w
or)
|

The judgment of the Appellate Division and that of Special
Term should be reversed, and the complaint dismissed, with
costs in all courts.

Corway, Ch. J., Fuup, Frozsssr, Van Vooruis, Burke and
Scumwr*, JJ., concur.

Judgments reversed, ete.

De .
In the Matter of Cuaruus J. Gorpon, Appellant, against Gzorcr
P. Monacuan, as Commissioner of the Police Department of
the City of New York, Respondent.
Argued October 10, 1955; decided December 1, 1955.

* Designated pursuant to section 5 of article VI of the State Constitution in
the temporary absence of Desmonp and Dyx, JJ.

337

George W. Here for appellant. I. Appellant’s written appli-
cation for a leave of absence without pay, pending the effective
date of his retirement, was self-executing. Therefore, the com-
missioner had no discretion to deny the request. (Matter of —
Boulevard Theatre & Realty Co., 195 App. Div. 518, 231 N. Y.
615; Matter of Douglass, 46 N. Y. 42; Hardmann v. Bowen, 39
N. Y. 196; Escoe v. Zerbst, 295 U. 8. 490; People v. Sutcliffe,
255 App. Div. 299; Matter of Pierne v. Valentine, 291 N. Y. 333.)
II. If the request for a leavé of absence is not mandatory and
self-executing, then Local Law No. 44 of 1951 of the City of New
York violates section 10 of article I and the Fifth and Four-
teenth Amendments of the Constitution of the United States,
and section 7 of article V of the New York State Constitution.
(People ea rel. Fitepatrick v. Greene, 181 N. Y. 308; Gorman
v. City of New York, 280 App. Div. 39; Roddy v. Valentine,
268 N. Y. 228; Matter of O’Brien v. New York State Teachers’
Retirement Bd., 215 App. Div. 220, 244 N. Y. 530.) IDI. The
order of dismissal was arbitrary and capricious. The record

338 eee
ee

is barren of any evidence that appellant was guilty of conduct

- unbecoming an officer or of conduct prejudicial to good order
and efficiency of the department or of violation of rules and
regulations.

Peter Campbell Brown, Corporation Counsel (Henry J.
Shields and Seymour B. Quel of counsel), for respondent.
I. The provision of Local Law No. 44 of 1951 of the City of New
York (Administrative Code, § B18-4.0), providing for the allow-
ance of a thirty-day leave of absence at the “‘ request’ of a
member of the police department when he files an application
for retirement, does not in itself effect a leave of absence. When
granted the leave of absence does nothing more than relieve
the member from the performance of duty; it does not excuse
him from the application of other rules of the police department.
(Gorman v. City of New York, 280 App. Div. 39, 304 N. Y. 865;
Matter of Pierne v. Valentine, 291 N. Y. 333; People ex rel.
Davison v. Williams, 218 N. Y. 180; People ex rel. MacNish v.
Waldo, 212 N. Y. 348.) II. Petitioner’s retirement application
never became effective, since his term of employment had been
forfeited because of absence for five days without leave prior
to the date specified for his retirement in the application filed
by him for that purpose. (People ex rel. Clifford v. Scannell,
74 App. Div. 406, 173 N. ¥. 606; McAvoy v. Press Pub. Co., 114
App. Div. 540; Majewski v. Farley, 203 App. Div. 77; People
ex rel. Donovan v. Board of Fire Comrs. of City of N. Y., 77
N. Y. 153; People ew rel. Fahy v. York, 49 App. Div. 178; 163
N. Y. 551; People ex rel. Grogan v. York, 51 App. Div. 502;
Matter of Nelson v. Partridge, 78 App. Div. 645; Schieffelin
v. Enright, 200 App. Div. 312.) ITI. Petitioner’s ‘‘ request ’’ for
a leave of absence was not self-executing, since the provision
in Local Law No. 44 of 1951 of the City of New York that the
member “ shall be granted ’’ a leave of absence contemplated
action by the police commissioner before the leave of absence
could become effective. (Matter of Evans v. Monaghan, 306
N. Y. 312; People ex rel. MacNish v. Waldo, 212 N. Y. 348; Matter
of Breen v. New York Fire Dept. Pension Fund, .299 N. Y. 8;
Matter of Dr. Bloom Dentist, Inc., v. Cruise, 259 N. Y. 358.)
IV. There was substantial evidence in support of the charges
against petitioner of misconduct as a member of the police
department. -

ee 339

Fronssex, J. On April 22, 1952, petitioner, a police lieutenant
with nearly twenty-seven years of active service, filed a written
application for retirement from the New York City Police Force
effective May 22, 1952. Accompanying it was a written applica-
tion for thirty days’ leave of absence without pay, effective
12:01 a.m. the next day, April 23d, and terminating at the time
his retirement would take effect. At the same time, he sur-
rendered his badge and revolver. He had, during his period of
active service, contributed regularly to the Police Pension Fund,
and, as of the date of filing said applications, there were no
charges pending against him.

The following day, April 23d, petitioner departed from the
city. He left no forwarding address, there being no regulation
then in effect which would require him to do so, although such
a regulation was enacted ten days after he had left. Immedi-
ately prior to the filing of said applications, petitioner had been
on sick leave and did not ‘‘ report off sick report”? or communi-
cate with the police surgeon, although regulations provided that
members of the force on sick report ‘‘ shall not leave their
residence or place of confinement except by permission of the
district surgeon ’’.

Petitioner’s commanding officer and inspector both approved
his application for leave of absence without pay on April 23,
1952, as did the assistant chief inspector on April 24th. How-
ever, on April 25th, the acting chief inspector and the police
commissioner disapproved petitioner’s application. On May 12,
1952, charges were filed by the police surgeon with the
police commissioner, alleging the following violations against
petitioner:

1, Absence from his residence without permission of the
police surgeon from April 24 to May 3, 1952.

2. Failure to report to the grand jury ‘‘ as directed ’’ and as
“ ordered ’? on April 22, 24 and 29, 1952.

8. Failure to report before a special assistant attorney-
general as ‘‘ directed ’? on April 28 and through May 5, 1952.

4. Failure to appear at the office of the chief surgeon of the
police department as ‘‘ directed”? from April 28 through May
5, 1952.

5. Absence without official leave for more than five consecutive
days from April 22d to May 12th, the date charges were filed.

340 |
senses}

With the exception of those allegations concerning petitioner’s
alleged failure to report to the grand jury on April 22d
(paragraph 2 above), and his absence without official leave on
the same day (paragraph 5 above)—on the first of which
petitioner was ultimately found not guilty, and on the second
of which no proof was ever offered and of which no further
mention was made at the hearing—all the above purported
violations are alleged to have occurred after petitioner filed his
applications for retirement and leave, and after the effective
date of said leave of absence.

Petitioner, while absent from New York City, was served with
a notice of hearing with respect to these charges by the same
method which had been employed to ‘‘ direct ’’ and ‘‘ order ””
him to appear before the police surgeon, the assistant attorney-
general and the grand jury just prior to, and resulting in, the
filing of charges against him — by a form of substituted service
provided by police regulations, specifically by the posting of
such notices upon a bulletin board at the precinct to which he
was assigned and by leaving copies thereof at his residence.
Petitioner did not appear at the hearing held on May 16, 1952.

At that hearing, testimony was introduced to show that
petitioner had been absent from his residence since April 23,
1952, one day after filing his applications for retirement and for
leave. Although orders dated subsequent to April 22, 1952,
were shown to have been issued, as aforesaid, directing peti-
tioner to appear at the times and places mentioned in the
charges above, there was no showing that petitioner received
actual notice or personal service of any of the orders, directives
or subpenas. The sum of the evidence against petitioner was
his departure after filing written applications for retirement
and leave and his continued absence during the period of the
leave specified in his application therefor.

Petitioner was found guilty of the above infractions (with the
exception noted above), and upon the recommendation of the
hearing commissioner was dismissed from the force on May 19,
1952 — thereby losing his accrued rights to a life pension of one
half the annual salary he was receiving when retired, or about
$2,850 per year.

ee 341

The question presented on this appeal is simply whether
petitioner, under the laws, rules and regulations then in effect,
had any obligation to remain available to, and in contact with,
the police department after the time his filed application for
terminal leave of absence was to take effect by its own terms.
In short, was there any duty thereafter which he, on this record,
could be found to have breached?

Petitioner has contended that, having completed his more than
twenty-five years of service in the department, he had an abso-
lute right to file for retirement; that under Local Law No. 44 of
1951 of the City of New York (Administrative Code of City of -
New York, § B18~-4.0, as amd.), he was entitled to be retired
after the passage of thirty days from April 22, 1952, the time of
his application, there being no charges pending or filed against
him on that date, and no subsequent charges relating to his
conduct on or prior to that date, said law declaring, in relevant
parts:

‘‘ Any member who * * * 2, Shall have elected to con-
tribute on the basis of retirement after twenty-five years of
service and who has * * * performed service in the force
for at least twenty-five years, wpon his own application in
writing to and filed with the board setting forth at what time,
not less than thirty days subsequent to the execution and filing
thereof, he desires to be retired, shall be retired as of the date
specified in said application * * * and awarded * * *
anannual pension * * * provided further that at the time
so specified for his retirement his term or tenure of office or
employment shall not have terminated or have been forfeited
(emphasis supplied); that further, and of central importance
here, by the same statute—which continues: ‘‘ provided
further that upon his request in writing the member shall
be granted a leave of absence from the date of filing said
application until the date the retirement becomes effective
(emphasis supplied) — petitioner’s simultaneous application for
leave of absence mandated the commissioner to grant said leave
application; and that after the effective date in the leave
application, he was automatically and instantly relieved of
police duty and no longer subject to the ordinary commands of

342 ee

the department. He urges, therefore, that he could not be
legally guilty of breach of any duty by failing to comply with
subsequent orders relating to matters occurring after such
effective date to which orders he was no longer subject.

At the outset, this case should be distinguished from that of
a retiring police officer who, after filing his applications, refuses
to co-operate in the investigation of charges filed against him
or relating to his conduct prior to the date of his application.
It is not the case of one who refuses to respond to a properly
served subpena to appear before a grand jury; nor is this
a matter of petitioner’s claiming to be immediately excused
from duty to the police force as a result of the mere application
for retirement itself (once possible; see Matter of Pierne v. Val-
entine, 291 N. Y. 333, but now obviated by the thirty-day waiting
period enacted in the 1951 amendment to the aforesaid statute).
Rather we are here confronted with a police officer’s claim to
have been excused by reason of his application for thirty days’
leave without pay at a time when no charges were pending
against him and no police regulation required him to leave
a forwarding address.

By virtue of the holding below (1) petitioner’s application for
leave has been held to be not self-operating and its approval not
mandatory, and (2) his absence, in apparent reliance on the
automatic operation of that application, and his consequent
failure to respond to the substituted service of police orders,
hhave been made the basis for a finding of breach of duty which
has cost petitioner his pension benefits and has brought about
his dismissal from service on the threshold of his retirement.
Such a result is contrary to law and particularly to the clear
language of the pertinent statute itself.

Pension rights are ‘‘ in the nature of compensation for the
services previously rendered for which full and adequate com-
pensation was not received at the time of the rendition of such
services ’’? (Matter of Giannettino v. McGoldrick, 295 N. Y. 208,
212), and, as such, ought not to be witheld without legal cause
from those with deserving records of service. For this very
reason the immediate leave of absence provision was made part
of the foregoing 1951 Administrative Code provision. The
minutes of the public hearings held thereon make it abundantly

Le 343
bene

clear that it was enacted to protect retiring policemen from the
unwarranted filing of infractions at the last moment for the
purpose of cutting off their pension rights. It therefore follows
that, during such terminal leave time, retiring policemen may
ask for and be entitled to a suspension of police duties and
responsibilities, for if the duties of such retiring members
remain undiminished, such protection as was expressly written
into the law would, in practical operation, afford no protection
at all.

Here, then, there could be no survival or extension of such
requirements as that petitioner report off sick leave or remain
at home, or that he check with headquarters regularly during
his leave to see if he was being sought for any reason. Such
requirements are by their nature reasonably related only to
the performance of active duty. If petitioner’s service record
was clear when he filed his application, and called for no
hearings on any charges then pending or related to his conduct
prior thereto, and if he was on leave preparatory to retirement,
he was freed of obligation to report as aforesaid. Of course,
like any other private person, he was at all times subject to a
properly served subpena or summons by any duly constituted
tribunal, as a court, a grand jury or the like.

We hold that petitioner was on leave from the instant specified
in his application, irrespective of the fact that the commissioner,
after three of petitioner’s superiors had approved said applica-
tion, finally disapproved the same. The language ‘‘ shall be
granted ’”’ in the afore-mentioned statute is clearly mandatory,
and where, as here, petitioner’s record was as of that moment
bare of charges relating to misconduct prior to his application
for retirement and leave, there was no discretion to be exercised
in the granting of leave (see Matter of Pierne v. Valentine,
supra, pp. 343-344; Matter of Douglass, 46 N. Y. 42; Matter of
Boulevard Theatre & Realty Co., 231 N. Y. 615).

We recognize that the police department may not be deprived
of the benefits of the statutory thirty-day notice and waiting
period before retirements actually may take effect, ie., of the
opportunity to investigate applicants for retirement and to
determine whether up to the time when their terminal leaves
of absence take effect they had performed their services faith-

344 ee
ep

fully and in a manner entitling them to pension benefits. But, by
the express design of the Legislature, after considering the real
necessity for some form of protective legislation, those infrac-
tions into which said department may inquire have been
limited to those which are alleged or believed to have occurred
prior to the filing of applications for immediate terminal leaves
of absence,

Thus the granting of leave here was mandatory, and petitioner
was, in-effect and without further action on the part of the
commissioner, on a leave of absence as of midnight, April 22d,
and was thereafter no longer subject to general administrative
regulations or rules reasonably related only to the active
performance of duty. Moreover, while he was subject to the
service of subpenas for any grand jury or other lawful
investigations of misconduct alleged to have taken place prior
to or during the time of his leave, he was not, according to the
then existing rules, under any duty to leave word as to his
whereabouts—a shortcoming corrected by the forwarding
address regulation not adopted until ten days after petitioner
departed — and could not lose his pension for failing to leave
such word, nor for failing to respond to orders or directions
given during such leave by a form of substituted service which
the regulations provide in case of the service of charges and
specifications.

In sum, petitioner’s active service career terminated at mid-
night of April 22d, a time when his record was clear of charges
affecting his right to a retirement pension. All such subsequent
charges filed which allege infractions of duty during a period
when such active service had terminated erroneously presup-
posed the existence of active duties. Without duty there could

-be no breach of duty, and without breach of duty petitioner’s
dismissal may not stand.

The order should be reversed and the determination of the
police commissioner annulled, with costs in this court and in
the Appellate Division.

Conway, Ch. J., Desmowp, Futp and Van Vooruts, JJ., concur;
Dvz and Burks, JJ., taking no part.

Order reversed, ete.

Emin10 Ruro, Respondent, v. Antony J. Ontanpo, Doing Busi-
ness as A. J. Ontawpo Conrractine Co., Appellant and Third-
Party Plaintiff-Appellant. Norracrusr Garpens Corp., Third-
Party Defendant-Respondent.

Argued October 10, 1955; decided December 1, 1955.

lant by re
and paid

De 347
ee}

and the premises were at the time of the accident completely
under the ownership, management and control of third-party
defendant-respondent. (Bergen v. Morton Amusement Co., 95
Misc. 647, 178 App. Div. 400, 226 N. Y. 665; Swan v. Jackson,
55 Hun 194; Mayor of City of Albany v. Cumlif’, 2 N. Y. 165;
Miller v. Davis & Averill, 137 N. J. L. 671; Smith v. Claude
Neon Lights, Inc., 110 N. J. L. 826; Del Longo v. Bennett-Brew-
ster Co., 192 Misc. 426.) II. If, for any reason known to the
law, appellant has been validly held liable for the accident, the
judgment of the Appellate Division as to the third-party com-
plaint should be reversed and the judgment of the trial court,
based upon the jury’s verdict herein, should be reinstated.
(Howe v. Buffalo, New York é Erie R. R. Co., 37 N. Y. 297;
Zimmermann v. Weber, 135 App. Div. 428; Herman v. Leland,
80 Mise. 598; Admiral Oriental Line v. United States, 86 F. 2d
201; People ex rel. Van Keuren v. Board of Town Auditors of
Town of Esopus, 74 N. Y. 310; Tipaldi v. Riverside Memorial
Chapel, 273 App. Div. 414, 298 N. Y. 686; Rager v. McCloskey,
305 N. ¥. 75; Wheelock v. Noonan, 108 N. Y. 179; Capel v. Lyons,
8 Mise. 73; Wischnie v. Dorsch, 296 N. Y. 257; McFall v. Com-
pagme Maritime Belge, 304 N. Y. 314.) III. Prior to the trial,
the Appellate Division unanimously affirmed an adjudication
by Special Term that the third-party complaint herein stated
a valid cause of action for recovery against third-party defend-
ant-respondent (Rufo v. Orlando, 282 App. Div. 934). There-
fore, it would seem that if the substantial allegations of the
third-party complaint were established, the law of this case has
already been declared. IV. The cases relied upon in the majority
opinion of the Appellate Division, Walters v. Rao Elec. Equip-
ment Co. (289 N. Y. 57), and Semanchuck v. Fifth Ave. & 37th
St. Corp. (290 N. Y. 412), dealing with the positive provisions
of section 241 of the Labor Law, are inapplicable. (Schumer
v. Caplin, 241 N. Y. 346; Teller v. Prospect Heights Hosp., 280
N. Y. 456; Burris v. American Chicle Co., 120 F. 2d 218; Under-
hill v. Major, 220 App. Div. 173, 247 N. Y. 525; Lee v. Trefflich,
272 App. Div. 255, 297 N. Y. 772; Wischnie v. Dorsch, 296 N. Y.
257; Richardson v. Cannold Holding Corp., 283 App. Div. 789,
308 N. Y. 932; McFall v. Compagnie Maritime Belge, 304
N. ¥. 314.)

348 memes!
ee

Benjamin H. Siff and Martin I. Weiss for respondent.
Appellant having affirmatively created a dangerous excavation
which it knew was going to be utilized by other contractors in
subsequent work, is liable for injuries caused thereby to an
employee of such subsequent contractor. (Harriman v. New
York, Chicago & St. Louis R. RB. Co., 2538 N. Y. 398; McGlone v.
William Angus, Inc., 248 N. Y. 197; Quigley v. Thatcher, 207
N. Y. 66; Clemens v. Benzinger, 211 App. Div. 586; Bill v. New
York Expanded Metal Co., 60 App. Div. 470; Wittenberg v.
Seite, 8 App. Div. 439; Haverstick v. Hansen & Sons, 277 N. Y.
158; Brown v. Welsbach Corp., 301 N. Y. 202; Adams v. White
Constr. Co., 299 N. Y. 641; MacPherson v. Buick Motor Co.,
217 N. Y. 882; Devlin v. Smith, 89 N. Y. 470.)

I, Sidney Worthman and Harold M. Harkavy for third-party
defendant-respondent. I. The jury, by its verdict in favor of
plaintiff, established that appellant was guilty of affirmative
negligence. Hence, appellant, as an active primary wrongdoer, ©
was barred from any right of indemnification from third-party
defendant-respondent. (Dick v. Sunbright Steam Laundry
Corp., 307 N. Y. 422; McFall v. Compagnie Maritime Belge, 304
N. Y. 314; Middleton v. City of New York, 300 N. Y. 732; Seman-
chuck v. Fifth Ave. & 37th St. Corp., 290 N. Y. 412; Walters v.
Rao Elec. Equipment Co., 289 N. Y. 57.) IL. Appellant is not
entitled upon this appeal to invoke the doctrine of the law of
the case before this court with reference to the adjudication
concerning the validity of the third-party complaint. (Gracie
Square Realty Corp. v. Choice Realty Corp., 305 N. Y. 271;
Hornstein v. Podwitz, 254 N. Y. 443.)

Burxg, J. The plaintiff, a laborer employed by the third-
party defendant, Northcrest Gardens, Inc., was injured as the
result of the collapse of an embankment of an excavation dug
by the defendant Orlando, while the plaintiff was working in
the excavation.

Orlando had agreed orally with Northerest to excavate the
land for a foundation for stores. Orlando was required to
supply the power shovel, four trucks and a tractor, and the
workmen. The excavation, after the work had been completed
was approximately twelve feet in depth, and the top of the
embankment extended approximately four feet beyond the edge

a 349
ee

of excavation. The work was completed on November 30, 1948,
without the use of shoring or bracing materials. Two weeks
later, on December 15, 1948, the embankment collapsed.

The plaintiff maintained this action against Orlando, who in
turn issued a third-party complaint against Northerest, on the
theory that he was entitled to indemmification should he be held
liable in the original action. The trial court charged the jury
that former section 23-4.4 presently section 23-11.3 of the Rules
of the Board of Standards and Appeals issued in accordance
with the statute, required shoring of embankments in excavations
of five feet or more when the circumstances require.

Section 241 of the Labor Law states:

“ All contractors and owners, when constructing or demolish-
ing buildings or doing any excavating in connection therewith,
shall comply with the following requirements: * * *

“6, .The board of standards. and appeals may make rules to
provide for the protection of workmen in connection with the
excavation work for the construction of buildings, the work of
constructing or demolishing buildings and structures, and the
guarding of dangerous machinery used in connection therewith,
and the owners and contractors for such work shall comply
therewith.”’

The jury returned a verdict for plaintiff and the defendant
Orlando. The Appellate Division affirmed as to the plaintiff,
but reversed as to the defendant Orlando, on the law and the
facts, and dismissed the third-party complaint.

On this appeal Orlando seeks to avoid liability to the plaintiff
on the grounds that he had completed the job fifteen days before
the occurrence of the accident, and that the accident occurred
while the third-party defendant was in ownership, management
and control of the premises.

Orlando denies that he created a dangerous condition. The
circumstance that he was not in possession of the premises is
not determinative of his liability. (Haverstick v. Hansen &
Sons, 277 N. Y. 158.) He knew that the excavation was
to be used for the laying of a foundation for the building of
stores. As a contractor he was aware that an embankment over
a trench negligently excavated could collapse. The question of
his negligence was at best a question of fact for the jury. The

350 a
ee

jury resolved the question against him. The verdict of the
jury has been sustained by the Appellate Division. We cannot
say as a matter of law that the finding was incorrect.

We now turn to the question of whether Orlando, having been
found negligent, may recover from the third-party defendant
on the doctrine of a right to indemnification from the person
in possession and control of the premises.

If the work negligently performed by Orlando comes within
the purview of section 241 of the Labor Law, no indemnification
is permitted. This court has construed the section as rejecting
the common-law doctrine of active and passive negligence.
(Walters v. Rao Elec. Equip. Co., 289 N. Y. 57; Semanchuck .
v. Fifth Ave. & 37th St. Corp., 290 N. Y. 412.) In these cases the
court had enunciated the rule that the failure to comply with
the statute was a breach of a nondelegable duty, which renders
the defendant an active wrongdoer.

The record discloses a failure to install shoring as mandated
by the rules of the Board of Standards and Appeals promulgated
pursuant to the statute.

Orlando attempts to avoid the sanctions imposed by the
statute and enforced by the pertinent case law on two theories.
His first hypothesis is that he did not violate the statute but
rather, if there was any violation at all, it was a violation of the
regulations promulgated by the Board of Standards and
Appeals. The rules and regulations promulgated pursuant to
section 241 of the Labor Law are designed to supplement and
effectuate the legislative policy enunciated in that section. Since
it has been determined that the Legislature has abolished the
distinction between active and passive tort-feasors for the pur-
poses of the statute, it follows that the rules and regulations
implement the statute and do not alter the legislative intent.

As we have stated under the rulings in the Walters and
Semanchuck cases (supra), the Legislature had made inapplic-
able, for the purposes of the statute, the common-law rule of
indemnity between passive and active tort-feasors. Thus any
person violating the statute is per se an active tort-feasor, and
hence such a person cannot have a cause of action in negligence
against a joint tort-feasor. To hold otherwise would encourage
a disregard for the objectives of the statute. The objectives of

[| 351
esses

the statute are not alone to provide remedies for laborers but
more particularly to prevent accidents causing the injuries.
The sanctions imposed by the statute and the cases are
necessary to compel a high standard of care by forbidding any
delegation of responsibility and any right of recovery over
against even a joint tort-feasor. The exceptions to the rule do
not apply here, as this court specifically held in Wischnie v.
Dorsch (296 N. Y. 257, 261). We then stated (when referring to
Semanchuck v. Fifth Ave. & 37th St. Corp., swpra) ‘In that
case we concluded that, in construction and demolition projects,
the statute imposed a ‘ positive’ duty upon the owner and
contractor alike (Labor Law, § 241); that it was an active,
primary duty ; and that any agreement to provide indemnity for
concurrent failure to perform such duty must be ‘ unequivocally
expressed ’, under the general theory that contracts ‘ will not
be construed to indemnify a person against his own negligence
unless such intention is expressed in unequivocal terms’
(Thompson Starrett Co. v. Otis Elevator Co., 271 N. Y. 36, 41). ”’
Tf, as Orlando contends, it was not his duty to furnish any
shoring or bracing, then he ‘would not be liable to the plaintiff
and there would be no basis for indemnification. The verdict in
favor of the plaintiff necessarily implied a finding that the
trench was not reasonably safe for the purpose for which it was
to be used, and that Orlando was affirmatively negligent in fail-
ing to provide shoring and bracing, thereby creating a dangerous
condition at the site of the excavation. In such circumstances
there may not be a recovery over as any negligence of North-
crest would merely establish both as active joint tort-feasors.
Orlando’s second contention is that he was not a contractor
within the meaning of the statute. He seeks to establish the
agency or employee relationship by evidence that Northcrest
directed his activities; approved and accepted the job as
completed; paid compensation at a rate per cubic yard of earth
removed, and maintained the premises under its ownership,
management and control for two weeks after Orlando completed
the job. The only factor which lends support to Orlando’s
contention is the testimony showing that Northcrest issued oral
instructions instead of supplying plans or specifications. The
fact that he received oral instructions as to the manner and

352 Le
ee

extent of excavating the trench and was not supplied plans or
specifications, hardly proves that Orlando was an employee or
agent. The oral instructions were merely a practical substitute
for plans or specifications. Prior to the commencement of the
work, Orlando discussed the terms upon which the job was to
be accepted with an officer of Northcrest. Orlando was required
to supply and did supply the power shovel, the trucks for the
removal of the earth and the laborers. The laborers were
subject solely to the orders of Orlando. Orlando paid the
laborers, as well as all the other incidental expenses of the
operation. Giving full credence to Orlando’s testimony, and
drawing every favorable inference therefrom, it nevertheless is
apparent that Orlando was an independent contractor and not
an employee or agent of Northcrest.

There remains for consideration a determination of Special
Term made prior to the trial. Special Term held that the third-
party complaint stated a cause of action. The Appellate Divi-
sion affirmed (282 App. Div. 934). Orlando contends that this
ruling is the law of the case. This court is not bound by such
determination. In Gracie Square Realty Corp. v. Choice Realty
Corp. (305 N. Y. 271), this court said at page 278: ‘‘ The
plaintiffs rely largely upon the doctrine of the law of the case by
reason of the fact that in 1948 there was a denial at Special Term
of a motion under rule 106 to dismiss the complaint for insuffi-
ciency, and that no appeal was ever taken therefrom. The denial
of that motion merely signified that the court considered that the
complaint alleged a valid cause of action against defendants and,
in any event, would not justify the invocation of the doctrine
of the law of the case in this court ’’.

The judgment should be affirmed, with costs.

Conway, Ch. J., Desmonp and Fuxp, JJ., concur with Burxs,
J.; Frozssmn and Van Vooruis, JJ., dissent in part and vote to
modify the judgment appealed from by reinstating the judgment
rendered by the trial court in favor of the third-party plaintiff,
Anthony J. Orlando, against the third-party defendant, North-
crest Gardens Corp., for the reasons stated in the dissenting
opinion by Mr. Justice Conn in the Appellate Division; Dvs, J.,
taking no part. :

Judgment affirmed.

Tue Proriz or rae Starz or New Yorr, Respondent, v. Howarp
Prosszr, Appellant.

Argued October 17, 1955; decided December 1, 1955.

354 |
ee

John B. Corcoran for appellant. Defendant has been deprived
of his fundamental right to a speedy trial. (People ea rel.
Battista v. Christian, 249 N. Y. 314; People v. McLaughlin, 291
N. Y. 480; People v. Smith, 2.N. Y. Crim. Rep. 45; People v.
Beckwith, 2N. Y. Crim. Rep. 29; Arrowsmith v. State, 131 Tenn.
480; Thomas v. People, 67 N. Y. 218.)

Richard N. Donovan, District Attorney, for respondent. I. The
Oswego County Court properly denied appellant’s motion to
dismiss the indictment on the ground that appellant had been
denied a speedy trial. (People v. Hall, 51 App. Div. 57; Arrow-
smith v. State, 131 Tenn. 480; People v. Beckwith, 2 N. Y. Crim.
Rep. 29; People v. Smith, 2 N.Y. Crim. Rep. 45; State v. Arthur,
21 Iowa 322; People v. Perry, 196 Misc. 922; State v. Kopelow,
126 Me. 384; State v. Slorah, 118 Me. 203; Beavers v. Haubert
198 U.S. 77.) II. The lapse of time between the indictment in|
1946 and trial in 1955 did not prejudice appellant.

Foup, J. The defendant in this case was brought to trial,
and convicted, on an indictment six years after it had been)
returned by a grand jury. The Appellate Division condemned
the delay, but concluded that the conviction should be affirmed,
We take a different view. We condemn the delay and hold
that it compels reversal of the conviction and dismissal of
the indictment.

In January of 1946, the Grand Jury of Oswego County,
returned five indictments against the defendant and his
brother. One of these indictments, No. 6792, charged him, in|
one count, with burglary and, in the second count, with grand
larceny; another, No. 6793, charged him with carrying a loaded|
revolver concealed upon his person. On January 30, 1946, ‘he
was arraigned in Oswego County Court and pleaded not guilty,
to each of the five indictments. Soon after, however, when|

Le 355
sss

brought on for trial, the defendant appeared with assigned
counsel and, following an off-the-record conference at the bench,
pleaded guilty to all of indictment No. 6793 and to the larceny
count of indictment No. 6792. A week or two later, in February,
1946, he was sentenced, as a fourth felony offender, to imprison-
ment for an indeterminate term of from fifteen years to life.

The defendant was confined to Attica State Prison, and there
he remained until 1952. In March of that year, he instituted
a habeas corpus proceeding in the County Court of Wyoming
County, claiming that, since one of his previous convictions was
for a misdemeanor only, he had been improperly sentenced as a
fourth felony offender. The court agreed with his position and,
accordingly, on April 10, 1952, issued an order directing that he
be returned to the Oswego County Court for resentencing. The
Oswego County authorities, apparently doubting the power of
the Wyoming County Court to make such an order, refused to
recognize or obey it. The defendant then initiated a second
habeas corpus proceeding in Wyoming County, which resulted
in an order directing that he be released from prison on July
21, 1952, if the first order was not complied with by that date.
(People ex rel. Prosser v. Martin, 208 Misc. 875.) This order
was affirmed by the Appellate Division (281 App. Div. 1008)
and by us (306 N. Y. 710); it was expressly noted that, by
this time, ‘‘ the term of imprisonment that might have been
lawfully imposed [had] expired ’’ (p. 712).

Confronted with that determination, the district attorney had
the defendant returned to the Oswego County Court for
rearraignment on one of the three indictments to which six years
before he had pleaded not guilty. On that rearraignment, his
counsel moved to dismiss the indictment on the ground that the
defendant had been deprived of his right to a speedy trial. The
county court judge—who in 1946 had sentenced the defend-
ant as a fourth offender and who later had declined to
comply with the Wyoming County Court orders directing his
resentence — denied the motion. After some further delay, in
part attributable to the defendant, the case proceeded to trial; he
was convicted, upon two counts, of burglary and grand larceny
and sentenced, as a prior felony offender, to imprisonment for
consecutive indeterminate terms of from ten to twenty years
on one count and of from five to ten years on the other.

356 |
ee

As already indicated, the judgment was affirmed on appeal.
It was the Appellate Division’s opinion that the defendant had
waived his right to a speedy trial by failing to invoke the
remedy afforded by section 668 of the Code of Criminal
Procedure (285 App. Div. 997).

The guarantee of a speedy trial— embodied in the United
States Constitution and in the constitutions of many states —is
found in section 8 of the New York Code of Criminal Procedure.
In so many words, that section announces that ‘‘ In a criminal
action the defendant is entitled * * * To a speedy and public
trial.’’ Section 668 of the Code, providing the means by which
the defendant may enforce his right, declares: ‘‘ If a defendant,
indicted for a crime whose trial has not been postponed upon his
application, be not brought to trial at the next term of the court
in which the indictment is triable, after it is found the court may,
on application of the defendant, order the indictment to be
dismissed, unless good cause to the contrary be shown.’’

The speedy trial guarantee, preventing undue delay between
the time of indictment and trial, serves a threefold purpose.
It protects the accused, if held in jail to await trial, against
prolonged imprisonment; it relieves him of the anxiety and
public suspicion attendant upon an untried accusation of
crime; and, finally, like statutes of limitation, it prevents him
from being ‘‘ exposed to the hazard of a trial, after so great a
lapse of time ’’ that ‘‘ the means of proving his innocence may
not be within his reach ’’ — as, for instance, by the loss of wit-
nesses or the dulling of memory. (Report of Commissioners on
Practice and Pleading [1849], p. 342, quoted in McKinney’s
Cons. Laws of N. Y., Book 66, pt. 2, Code Crim. Pro. [1945 ed.],
p. 543; see, also, United States v. Provoo, 17 F. R. D. 183, 198, 203
{U. S. Dist. Ct., D. Md.], affd. 350 U. S. 857.) Its benefits may
be claimed, therefore, by any person under indictment, whether
he be imprisoned to await trial on the pending charge, whether
he be admitted to bail or whether he be a prisoner already
serving a sentence in the same jurisdiction for a different
erime. (See, e.g. People v. Corrado, 150 Mise. 787, 789-790;
Frankel v. Woodrough, 7 F. 2d 796, 798-799; Fulton v. State,
178 Ark. 841, 848-845; Harris v. State, 194 Md. 288, 296; State
v. Smith, 10 N. J. 84, 93; Arrowsmith v. State, 131 Tenn. 480;
Ex Parte Chalfant, 81 W. Va. 93; State v. Keefe, 17 Wyo. 227,

357
es

257-259; see, also, Note, 118 A. L. R. 1037.) While the first
-two considerations noted above may not loom large in the case
of a defendant in prison for another offense, there can be no
dispute that it is vital, even for him, that the trial be had while
witnesses are available and memories fresh.

It is clear, then, that Prosser was entitled to a speedy trial,
and it is equally clear that he did not receive one. Although
what amounts to an undue delay is ‘‘ not fixed by the statute in
days or months ’’, depending as it does ‘‘ upon the circumstances
of each particular case ’’ (People v. Hall, 51 App. Div. 57, 62;
see Beavers v. Haubert, 198 U. S. 77, 87), it may not seriously
be urged that the six-year lag in the present case was consistent
with the mandate for a speedy trial.

Section 668 enables the court, if the defendant is not brought
to trial ‘‘ at the next term of the court in which the indictment
is triable,’’ to order a dismissal of the indictment, unless the
defendant himself procured the postponement of the trial or
unless the prosecution shows ‘‘ good cause to the contrary ’’.
The district attorney contends that the defendant waived his
right to a speedy trial and may not call upon the provisions of
section 668, even though he sought no postponement and even
though the prosecution failed to show ‘‘ good cause ’’ for the
six-year inaction on its part. Underlying that position are
both the premise that it is the accused who has the obligation
of securing a speedy trial and the feeling that it would be unfair
to permit a defendant to sit back and do nothing until the
prosecutor notices the case for trial, and then claim that he
should be discharged because of undue delay.

Although a number of jurisdictions have implementing
provisions similar to section 668, the results reached by their
courts have not been uniform.

In some states, it has been said that, if the defendant does not
affirmatively and promptly make known his desire for a speedy
trial, he may not be heard to complain. (See, eg., Pietch v.
United States, 110 F. 2d 817, 819; McCandless v. District Court,
245 Iowa 599; State v. McTague, 173 Minn. 153; State ex rel.
Davis v. Bayless, 38 Okla. Cr. 129.) As the Minnesota court
expressed it, ‘‘ the accused must go on record in the attitude
of demanding a trial or resisting delay ’’ or be deemed ‘‘ to
have waived the privilege.’’ (State v. McTague, supra, 173

358 Dn
se

Minn. 153, 154-155.) Under such decisions, the burden of
obtaining a prompt trial is on the defendant; the state,
having procured an indictment, is not compelled to do any-
thing until the defendant demands a trial, and even then,
if the demand is not made promptly, it may claim that he has
waived his right to a speedy trial. Years may have elapsed,
so that the time between indictment and trial exceeds even that
permitted by the applicable statute of limitations between
commission of the crime and indictment, and yet, these cases
hold, the prosecution remains free to press the charge and
proceed to trial.

In other states, the courts have taken a different view;
the burden of proceeding promptly is on the state, not on
the defendant. (See, eg., State v. Carrillo, 41 Ariz. 170, 172;
State v. Chadwick, 150 Ore. 645, 650; Flanary v. Commonwealth,
184 Va. 204; Hx Parte Chalfant, supra, 81 W. Va. 93.) In the
words of the Oregon Supreme Court, ‘‘ When the state sees
fit to charge a defendant by indictment with the commission
of a crime, it is equally the duty of the prosecutor to see that
defendant is arraigned and enters a plea and speedily brought
to trial, as itis to charge him with the offense in the first place ”’.
(State v. Chadwick, supra, 150 Ore. 645, 650.)

The second view is the one that we find sounder and more
persuasive. It is the state which initiates the action and it is
the state which must see that the defendant is arraigned. It
is likewise the state which has the duty of seeing that the
defendant is speedily brought to trial.t. And from this it follows
that the mere failure of the defendant to take affirmative action
to prevent delay may not, without more, be construed or treated
as a waiver. The plain language of section 668 unerringly
points that conclusion. In effect, it calls for dismissal of an
indictment, if its trial is unduly put off, ‘“‘ unless good
cause to the contrary be shown.’’ As we read the statute,
it is incumbent upon the prosecution to establish ‘‘ good
cause ’”’ for its own delay, and not simply the fact that the
defendant has failed to demand a trial. When the legislature

1. In this connection, it is of more than passing significance that, although
section 668 of the Code permits the defendant to move to dismiss the indictment,
the legislature neither by that statute nor by any other provision empowers him
to bring the indictment on for trial. (Cf. Civ. Prae. Act, §§ 181, 433.)

a 359
epee

expressly excepted from section 668 a defendant ‘‘ whose
trial has * * * been postponed upon his application,” it
disclosed a design not to except a defendant who has neither
applied for nor agreed to a postponement. In Flanary v.
Commonwealth (supra, 184 Va. 204), dealing with a statute
similar to ours, the court said, in terms here most apt (p. 211):

‘“« Tf the legislature had intended the silence of the accused
* * * to be a waiver of his right, it could, and doubtless
would, have used appropriate language to convey that inten-
tion. If the language used is to be given its usual and ordinary
construction, it is impossible to hold that the words, ‘ continu-
ance granted on the motion of the accused,’ convey the same
meaning as ‘ silence,’ or ‘ the accused must demand a trial ’’’.

The Report of the Commissioners on Practice and Pleading,
who drafted section 668, further demonstrates that it was not
designed to shift the responsibility for a prompt trial to the
defendant, or to prevent him from taking advantage of slow
moving or dilatory prosecutors. The fact is that some such
remedy as a motion to dismiss was regarded as necessary
because, under the then ‘‘ existing practice,”’ it all too frequently
happened that an indictment was ‘‘ kept forever suspended over
the head of the defendant.’’ (Report of the Commissioners on
Practice and Pleading, op. cit., p. 841.) As the Commissioners
pointed out, although the statute of limitations protects defend-
ants from indictments returned too long after the commission
of the crime, ‘‘ yet, when an indictment is once found, there is
no limitation of time, within which it must be brought to trial.’
(Ibid, p. 842.)

The sole purpose of section 668 when enacted, therefore, was
to provide relief for persons denied a speedy trial (see People
v. Beckwith, 2 N. Y. Crim. Rep. 29), and it imposed no obligation
on the defendant affirmatively to seek such a trial or be deemed
to have waived it.

This is not to say that a defendant may not consent to delay
in bringing the indictment to trial and thereby waive his right.
(See, eg., People v. Perry, 196 Mise. 922; Pietch v. United
States, supra, 110 F. 2d 817, 819; State v. McTague, supra, 113
Minn. 153, 154-155 ; see, also, Notes, 129 A. L. R. 572; 44 L. R. A.
[N. 8.] 871.) Not only is such a waiver spelled out where both

360 De
ee

prosecution and defense agree upon or stipulate for a postpone-
ment, but it may be implied, for example, from the fact that
the defendant, although present in court, interposes no objec-
tion to a postponement sought by the district attorney. In that
situation, the defendant’s silence and failure to assert his right
to an immediate trial would be relevant. The inquiry in each
case is factual and, like the question whether there has been
undue delay, depends ‘‘ upon the circumstances of each partic-
ular case.’? (People v. Hall, supra, 51 App. Div. 57, 62.) In this
ease, not only was there never an application for a postponement
in court or upon notice to the defendant, but there was absent
even an awareness that the prosecution was being kept alive
or that a trial would eventually be had (cf. People v. Perry,
supra, 196 Misc. 922), without which there could be no factual
basis for inferring consent or waiver.

In the light of what occurred in 1946, the defendant had no
reason to believe that the remaining indictments would ever be
tried. At the time he pleaded guilty, there appears to have
been some sort of ‘‘ compromise ’’ whereby, in return for
such a plea, the remaining charges were not to be pressed.
(Cf. People v. Beckwith, supra, 2 N. Y. Crim. Rep. 29; People v.
Smith, 2 N. Y. Crim. Rep. 45.) While at first he pleaded not
guilty to all five indictments, he later changed his plea as to
one indictment (No. 6793) and as to a count of another
(No. 6792), after an off-the-record conference, suggested
by the court, between defendant’s assigned counsel, the
district attorney and the presiding judge. The fact that
defendant went to jail upon those indictments, did not pre-
vent the prosecution from proceeding with the others (sec
Thomas v. People, 67 N. Y. 218), but the sentence of imprison-
ment for the very long term of from fifteen years to life seem-
ingly sufficed as punishment for all the crimes charged. And,
in explaining the reason for the six-year delay, the dis-
trict attorney acknowledges that his predecessor in office
“thought there was nothing to be gained by further prose-
cution’’. Certainly, if the district attorney did not plan
any further action, the defendant could hardly have believed
or expected that he would be brought to trial on the remaining
indictments. The prosecutor did, it is true, change his mind
in 1952, but it is quite evident that he did so only because the

[| 361
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defendant’s 1946 sentence had been cut short by the court’s
determination that it was in excess of law. (See People ex rel.
Prosser v. Martin, supra, 306 N. Y. 710.)

In short, then, since there was an untoward delay of six years,
without a waiver by defendant of his section 8 right to a speedy
trial, and since the prosecution failed to show the slightest
“‘ good cause’’ for that delay, the trial judge should have
granted defendant’s motion and dismissed the indictment.

As for the asserted danger that a defendant may sit back
and, if the prosecution fails for one reason or another to move
the indictment for trial expeditiously, claim his right to a speedy
trial and go free, it is somewhat less than real. Overlooked is
the fact that the district attorney may at any time have the case
placed on the calendar for a particular day. The defendant
and his counsel will be in court and, if at that time the People
seek a postponement and the defense fails to oppose or object,
its failure will probably import consent to the ensuing delay
and bar any later claim that defendant’s right to a speedy trial
had thereby been denied. The actual result of the present
decision, therefore, is merely to impose upon the officers,
charged with enforcing the law and who secured the indictment,
the quite reasonable, far from burdensome, duty of noticing it
for trial.

It may well be that adherence to the rule here announced will
on occasion result in the discharge of one guilty of crime, but,
as to that, we need but say, as we did in People v. Jelke (308
N. Y. 56, 68), that our decision ‘‘ transcends the issue of
* * * [a particular defendant’s] guilt or the disposition of
[a] particular case.’’

The judgments should be reversed and the indictment
dismissed.

Conway, Ch. J., Desmonp, Fromsset, Van Voornis and Burxs,
JJ., concur; Dvs, J., taking no part.

Judgments reversed, etc.

Tue Propis or raz Stare or New Yorx, Respondent, v. Epwarp
A. Boru and Frairz Borxm, Appellants.

Argued October 3, 1955; decided December 1, 1955.

William H. McKeon for appellants. The court below erred
in saying that defendants failed to produce substantial and
credible evidence sufficient to overcome the presumption of regu-

364 |
ee

larity. (Matter of Bojinoff v. People, 299 N. Y. 145; Johnson
vy. Zerbst, 304 U. 8. 458; People v. Richetti, 302 N. Y. 290; Rice
y. Olson, 324 U. 8. 786; Von Moltke v. Gillies, 332 U. S. 708.)

John F. Dwyer, District Attorney (Robert A. Burrell of coun-
sel), for respondent. I. The People concede that there is noth-
ing in the records of the trial court to indicate whether or not
defendants were advised of their right to counsel. (People v.
Lake, 190 Misc. 794.) II. The presumption of regularity which
attends a court of record placed upon defendants upon the
hearing the burden of overcoming that presumption by a pre-
ponderance of the credible evidence. (Hawk v. Olson, 326 U. 8S.
271; Walker v. Johnston, 312 U. 8. 275; Johnson v. Zerbst,
304 U. S. 458; People v. Varelli, 277 App. Div. 887, 302 N. Y.
641; People v. Barber, 276 App. Div. 1040; People ex rel. Asaro
v. Morhous, 268 App. Div. 1016.) ILI. Upon the hearing, defend-
ants failed completely to sustain the truth of the allegations in
their petition by a preponderance of the credible proof.

Van Vooruis, J. The appellants, Edward A. Boehm and Fritz
Boehm, were jointly indicted on the 18th day of September,
1931. The indictment charged attempted robbery in the first
degree in three counts. Upon this indictment, Fritz Boehm
was arraigned on September 21, 1931, in the Supreme Court,
Erie County, and entered a plea of guilty to the indictment.
On October 2, 1931, he was sentenced to Auburn State Prison
for from twelve and one-half to twenty-five years, plus five years
for having a revolver in his possession. Edward A. Boehm was
arraigned in the same court on November 10, 1931, pleaded
guilty and was sentenced to Auburn State Prison for from
twelve and one-half to twenty-five years, plus five years for
having a revolver in his possession.

In the moving papers jointly verified by appellants on
January 12, 1954, they applied for a writ of error coram
nobis, seeking to vacate these convictions and sentences.
They alleged in their petition that at the times of their
arraignments they were not advised of their right to counsel,
that they were not in fact represented by counsel, and,
further, that they did not then read, write, or comprehend
English. The writ was returnable on January 25, 1954, and the
proceeding was adjourned until January 28, 1954, on which

Le 365
ee

date a hearing was had before Justice Fisazr, the appellants
being present in person and represented by Edward K. O’Shea,
Esq., their assigned counsel.

Upon the hearing, both appellants testified as witnesses in
their own behalfs. On the 18th day of March, 1954, Justice
Fisuer issued a memorandum decision, holding that the defend-
ants’ motion to have their convictions and sentences set aside
should be granted, and that they should be rearraigned on the
original indictment. An order was entered upon this decision,
from which the People appealed to the Appellate Division,
Fourth Department.

Pending that appeal and on April 30, 1954, the defend-
ants were brought before Justice Munson of the Supreme
Court,.to be rearraigned upon the indictment, in compliance
with Justice Fisuur’s order of April 26, 1954. Both defend-
ants were present in person and with their counsel,
Edward K. O’Shea, who waived the reading of the indictment,
whereupon Justice Munson advised the defendants of their
right to counsel, inquired of defendants if they understood the
English language, to which they both replied, ‘‘ Yes’. Where-
upon both defendants pleaded not guilty and were ordered by
Justice Munson to be returned to Auburn State Prison, pend-
ing the decision of the Appellate Division, Fourth Department,
on the People’s appeal herein.

Thereafter, and on November 9, 1954, the said appeal was
argued before the Supreme Court, Appellate Division, Fourth
Department, defendants-appellants being represented by their
assigned counsel. The Appellate Division unanimously reversed
the order appealed from on the law and the facts and dismissed
defendants’ writ of error coram nobis.

The defendants, upon application, were granted leave to
appeal to the Court of Appeals, and were subsequently granted
leave to have their appeal heard upon the original record and
typewritten briefs, and other counsel assigned. This appeal is
now before us.

The gist of the testimony by these brothers is that they were
born in Rosenberg, Germany, in 1905 and 1907; that they came
to the United States in 1922; that on September 21, 1931, and
on November 10, 1931, when Fritz and Edward Boehm respec-

366 Le
ese

tively pleaded guilty in Erie County, they understood English
imperfectly. Fritz Boehm testified that no attorney represented
him when he was arraigned; that he did not understand what
was going on; that no interpreter was present in the court
room; that he did not understand what the Judge said to him;
that the indictment was not read to him, and that he did not
know for what purpose he was in court and does not recall how
he pleaded to the indictment. He testified that he did not recall
being advised of his right to counsel or any of the proceedings
that occurred that day. Edward Boehm testified that he had
copies of the original arraignment and the original minutes
sent to him, but never was in the courtroom; that the Sheriff
brought him to the door and told him to wait there and then
asked if he wanted to go with his brother, which he said that he
did; that nobody read any indictment to him and, to the best
of his recollection, that he never went before the Justice, follow-
ing which he testified that no one acted as interpreter, and that
he spoke about as much English as his brother. He testified in
answer to questioning by the court in the coram nobis proceeding.

“« By the Court: Q. How about English could you understand
at that time? A. About the same as my brother; a few words,
just local words, every-day, just around. By Mr. O’Shea:
Q. Just words that would give you the necessities of life and
get you by; is that right? A. Yes.’’

In an affidavit, Edward Boehm said that he was brought into
the courtroom, arraigned and pleaded guilty.

The People called the deputy clerk, Erie County, who had
been assigned to the criminal part of the Supreme Court with
the late Justice Norton and Justice Lyris, before whom these
men had been arraigned and by whom they were sentenced. He
testified that he was well acquainted with both of these Justices,
that they both consistently advised defendants who appeared
before them that they had a right to counsel at all stages of
the proceedings in court, that it was the invariable custom in
holding court, whenever a person appeared who could not speak
or understand English, to produce an interpreter in the language
which the defendant spoke, and that this never failed to occur
in his recollection. Justice Norton is deceased and Justice Lyre
was unavailable, having retired and being in North Carolina.

P| 367

Justice Fisuer, in his memorandum of decision, noted the
lack of schooling and intelligence of these men, and commented
that from the time of their arrival in the country in 1922 until
September, 1931, they worked as hired hands at different
ranches in the west and southwest, tending sheep and cattle and
doing farm chores; that they acquired little knowledge of the
English language; that their mental ages were low; that they
were serving long sentences with maximum expiration dates
in 1968, and Justice Fisner concluded: ‘‘ It is inconceivable
that with that background and without counsel they had suf-
ficient comprehension of the situation to enable them, for
instance, to waive the statutory period before sentencing, to say
nothing about being able to comprehend the seriousness of a
charge they were pleading to or an understanding of their rights
to be represented by an attorney.”

The Appellate Division, Fourth Department, dismissed the
writ with these comments: ‘‘ We are unable to agree with the
Special Term that these defendants at the time of their convic-
tion did not comprehend what they were charged with and did
not understand their right to counsel. They had been in this
country for nine years. In 1931, Fritz Boehm was twenty-four
years old and his brother, Edward twenty-six. They had worked
in various parts of the country. It is beyond belief that they did
not understand what was said to them. It is significant that no
interpreter was employed by the court. The Special Term made
use of certain probation reports which were not received in evi-
dence. Such reports were somewhat irrelevant to the issue.
One of the reports was delivered to us and we have felt justified
in examining it, since it was considered by the Special Term. It
indicates that the attempted holdup by these two men was by use
of a stolen automobile and that they used their guns. One victim
was shot four times. The other was more fortunate, as the bullet
passed through his hat. It can hardly be said that they did not
know what they were in court for or that they did not com-
prehend the seriousness of the charges against them.’’

Although the records of 1931 do not show that these men
were informed of their right to counsel at each and every stage
of the proceedings, that was twenty-four years ago, at a time
when it. was apparently not customary to enter such recitals in

368 Le
pe

the Clerk’s records of the Supreme Court, Hrie County, and the
Appellate Division has held, in effect, that their testimony lacks
credibility to overcome the presumption of regularity. .

We are not prepared to say that this conclusion is wrong. The
mental ages of these men were not shown to be such as to pre-
elude their understanding that they were being charged with
robbery, first degree, and that they were entitled to counsel if
they so desired. The question treated in the dissenting opinion
is not presented by the record as we read it. A 1931 probation
report, found in the files, recites that a psychiatrist’s examina-
tion of Fritz Boehm indicated that he was a moron with the
mentality of a five-year-old child; the report contains no evalua-
tion of Edward Boehm’s mentality. A report of the Department
of Correction states that on October 22, 1953, when these men
were transferred from Napanoch to Auburn Prison, both were
rated as ‘‘ too high grade for mental defective institution ’’; that
Fritz Boehm had a mental age of ten years and eight months, and
Edward of eleven years, one month. The average adult is sup-
posed to have a mental age of about fourteen years. It is com-
mon knowledge that these ratings, if correctly taken, would vary
slightly if at all, after persons reach the age which these men had
attained when they were sentenced in 1931. If the records of the
Department of Correction are correct for 1953, the measurement
of Fritz Boehm’s intelligence appearing in the probation report
in 1931, would seem to have been wrong. In any event, their
sentences should not be vacated now upon an ex parte statement
reported to have been made by a psychiatrist in the probation
report of 1931. There is nothing to show that the mental condi-
tion of these men, whatever it was, was not before the court when.
they were arraigned and sentenced, and the presumption of
regularity which pertains to the record imports that they were
found by the Justices who accepted their pleas and sentenced
them to have been of sufficient mental capacity to understand
the proceedings and intelligently to waive their right to counsel.

If either of the defendants was a moron with a mental age so
low as to render him incapable of understanding the arraignment
proceedings or of intelligently waiving his right to counsel or of
representing himself adequately, he would be entitled to a writ
of error coram nobis vacating his 1931 judgment of conviction.
Neither defendant sought a vacatur of his conviction because of

| 369
esse

any alleged mental incapacity, however, and the court, in grant-
ing the coram nobis application, did not rely upon any such
weakness of intellect but upon other facts, such as the defend-
ants’ lack of schooling and their unfamiliarity with the English
language.

Our present disposition does not foreclose the making of
another coram nobis application. (See, e.g., Matter of Bojinoff
v. People, 299 N. Y. 145, 151; People v. Martine, 303 N. Y. 789).
If either defendant actually does claim that in 1931 he lacked
sufficient intelligence or mental capacity to understand the trial
court’s monition that he was entitled to an attorney, he is free
to file a further petition based upon such a claim. However,
as already indicated, on the present record, the Appellate
Division was fully warranted in reaching the conclusion it did
and in dismissing the petition of each defendant.

The order of the Appellate Division is affirmed.

Dzsmonp, J. (dissenting). Official documents, the accuracy
of which is not contested, show conclusively that in 1931 when
each of these brothers pleaded guilty without counsel and each
received a sentence of seventeen and a half to thirty years,
neither defendant was mentally capable of understanding legal
procedures or phraseology. As to Fritz Boehm, the probation
report which must have been in the hands of the sentencing Judge
at sentence time (see Code Crim. Pro., § 482) shows that he was
a moron with the mentality of a five-year-old child. Many years
later, when he was transferred to a prison from the State
institution for ‘‘ mental defective ’’ delinquents at Napanoch
(Correction Law, § 438) Fritz Boehm, who had meanwhile gone
to school at the latter institution, had reached a mental age of
ten years and eight months and had an I.Q. of 71. Edward
Boehm, without the aid or advice of a lawyer, pleaded guilty in
1931 on the very day on which he was arraigned. When he left
Napanoch twenty-two years later his mental age was eleven
years and one month and his I.Q. was 74. Napanoch records
show that neither brother could read or write when they came
there in 1932, although each was over twenty years old. ‘‘ There
are some individuals who, by reason of age, ignorance or mental
incapacity, are incapable of representing themselves adequately
in a prosecution of a relatively simple nature. This incapacity

370 |
ee

is purely personal and can be determined only by an examination
and observation of the individual’? (Wade v. Mayo,.334 U. S. -
672, 684; see Palmer v. Ashe, 342 U. S. 134, 136, 187; Massey v.
Moore, 348 U.S. 105, 108, 109). Since such incapacity appears of
record without dispute, the 1931 judgment of conviction as to
each defendart was as matter of law totally void (see People v.
Lewis, 418 Tl. 116, 122; Allen v. Commonwealth, 324 Mass. 558,
562; The Right to Counsel, Wis. L. Rev., March, 1955, pp. 301-
303). When there appears so total a deprivation of the most
fundamental of rights, no court has.a choice as to whether or
not to annul the conviction, and indications of probable guilt
have no bearing on the issue of whether their constitutional
rights were violated.

This is not the usual coram nobis proceeding where there
is presented a question of fact as to whether a defendant was
told of his right to have legal counsel and, if.so, whether he
consciously and knowingly waived that right. There is testi-
mony here that each of the sentencing Justices was accustomed
in 1931 to inform defendants, on arraignment, of their right to
counsel. But whether or not the Boehm brothers or either of
them was so notified is beside the point on this record. A five-
year-old child (or a ten-year-old child) in court without a
lawyer simply would not know what was going on. To tell him
in the formal language of sections 188 and 308 of the Code of
Criminal Procedure that he was entitled to be répresented by
counsel at every stage of proceedings, would be a simple waste
of words. Each of the several concepts involved in that verbal
formula would be to him, in the absence of a most detailed and
careful explanation appropriate to his years, outside of and
beyond his understanding. And it can make no difference
whether the Judge did or did not realize the mental immaturity
of the defendant (although in the case of Fritz Boehm he was
put on notice by the probation report).

The order of the Appellate Division should be reversed and
the order of Special Term reinstated.

Conway, Ch. J., Furp and Burxz, JJ., concur with Vay
Voornts, J. Dusmonp, J., dissents in an opinion in which
Frozsszt, J., concurs; Dvz, J., taking no part.

Order affirmed.

Sztma-Rosensaum, Respondent, v. Sao Rosenzaum, Appellant.

Argued June 8, 1955; decided December 1, 1955.

372 Le
ee

Benjamin Shedler and Bernard B. Rubin for appellant. I. A
decree issued by a Mexican court which purports to grant the
husband a divorce from his nonappearing spouse who was
served in the foreign action in New York, the domicile of both
parties, is invalid and does not warrant the intercession of a
court of equity to prevent the husband from obtaining such a
decree. (Goldstein v. Goldstein, 283 N. Y. 146; Bawmann v.
Baumann, 250 N. Y. 382; Garvin v. Garvin, 302 N. Y. 96;
Williams v. North Carolina, 317 U.S. 287, 325 U. S. 226; Martens
v. Martens, 284 N. Y. 363; Gaskell v. Gaskell, 189 Misc. 504;
Pereira v. Pereira, 272 App. Div. 281; Greenberg v. Greenberg,
218 App. Div. 104.) II. The facts in the instant case do not
warrant a change in the established law. (Goldstein v. Gold-
stein, 283 N. Y. 146; Witkowski v. Witkowski, 271 App. Div. 901,
297 N. Y. 626; Raynor v. Raynor, 279 App. Div. 670; Goldberg
v. Goldberg, 265 App. Div. 946; Levy v. Levy, 149 App. Div. 561;
Imbrioscia v. Quayle, 278 App. Div, 144, 303 N, Y. 841.)

ee 373

Marvin George Florman for respondent. I. A court of equity
has the power to restrain defendant from prosecuting an action
in a foreign country where it was fraudulently instituted, or
where its purpose is to evade the laws of this State or a decree
of our courts. (Greenberg v. Greenberg, 218 App. Div. 104;
Garvin v. Garvin, 302 N. Y. 96; Williams v. North Carolina, 317
U.S. 287, 325 U. S. 226; Hammer v. Hammer, 278 App. Div. 396,
303 N. Y. 481; Thompson v. Samson United Corp., 203 Mise. 48;
Richman v. Richman, 148 Mise. 387; Jeffe v. Jeffe, 168 Misc.
123; Dublin v. Dublin, 150 Mise. 694; Johnson v. Johnson, 146
Mise. 93; Forrest v. Forrest, 2 Edm. Sel. Cas. 180; Sullivan v.
Sullivan, 271 App. Div. 1016; Pereira v. Pereira, 272 App. Div.
281.) II. Defendant’s divorce and subsequent remarriage could
prejudice and impair plaintiff’s present rights, and will place
upon her a burden of proof in future litigation. There is a
presumption of validity of a second marriage, which will con-
flict with plaintiff’s status as defendant’s wife, and impose upon
her the burden of proving the invalidity of the second marriage.
(Matter of Dugro, 261 App. Div. 236, 287 N. Y. 595; Earle v.
Earle, 141 App. Div. 611; Garvin v. Garvin, 302 N. Y. 96;
Imbrioscia v. Quayle, 278 App. Div. 144, 303 N. Y. 841; Pereira
v. Pereira, 272 App. Div. 281; Hammer v. Hammer, 278 App.
Div. 396, 303 N. Y. 481.) ILI. Defendant’s remarriage would
create certain rights in the second ‘‘ wife ’’ to plaintiff’s damage.
(Krause v. Krause, 282 N. Y. 355; Williams v. North Carolina,
825 U.S. 226; Richman v. Richman, 148 Misc. 387; B. Gertz, Inc.,
v. Beyer, 206 Misc. 657.) IV. The majority opinion below is in
complete harmony with the public policy of this State. (Garvin
v. Garvin, 302 N. Y. 96; Hammer v. Hammer, 303 N. Y. 481;
Pereira v. Pereira, 272 App. Div. 281.) V. Injunctions are
granted where the foreign suit evades the law of the local State
or where equity and good conscience require it. (Cole v. Cun-
ningham, 133 U. S. 107; Pitcairn v. Drummond, 216 Ind. 54;
Knapp v. Knapp, 12 N. J. Mis. Rep. 599; Wells v. Wells, 230
Ala. 430; Ballard v. Ballard, 199 Miss. 316; Hartford Acc. &
Ind. Co. v. Bernblum, 112 Conn, 583; Kahn v. Kahn, 325 Ill. App.
137; Stultz v. Stultz, 24 N. J. Super. 354; Usen v. Usen, 186 Me.
48; Borda v. Borda, 44 R. I. 337.) VI. The doctrine of comity
in New York does not deny recognition of Mexican divorce

374 ee .

a
decrees, other than mail order, where on the face thereof it
appears jurisdiction was acquired by the Mexican court. (Cald-

well v. Caldwell, 298 N. Y. 146; Martens v. Martens, 284 N. Y.
363; Matter of Fleischer, 192 Mise. 777.)

Froxzssex, J. This is an action solely for an injunction. It
was brought by plaintiff to enjoin defendant, and all others
acting on his behalf, from proceeding with the prosecution of
an action for divorce commenced by him against ‘plaintiff herein
in the First Civil Court, Juarez, Mexico. The Supreme Court
at Special Term denied plaintiff’s motion for a temporary
injunction and, upon defendant’s motion under rule 106 of the
Rules of ‘Civil Practice, dismissed the complaint. The Appel-
late Division has reversed the orders of Special Term, and in
granting leave to appeal has certified the following question:
“Does the complaint herein state facts sufficient to constitute
a cause of action for injunctive relief? ”?

From the allegations of the complaint herein, which we must
assume are true, the parties are husband and wife, they have
resided continuously in New York, and were separated by a
decree of the Supreme Court, New York County, which awarded
plaintiff $9,000 a year for her support as well as for the support
of the two infant children of the marriage. We must further
treat as fact that defendant appeared in Mexico on November
5, 1954, solely for the purpose of signing divorce papers and
not for the purpose of residing there, remaining at all times a
resident and domiciliary of New York State, wherein he con-
tinues to reside and practice his profession, and that he has
been physically present here since November 7, 1954. In the
concluding paragraph plaintiff alleges that she ‘‘has no ade-
quate remedy at law’’.

The issue thus raised is, simply, whether the drastic remedy
of injunction may be employed to restrain the prosecution of
a concededly invalid divorce action in a foreign country, namely,

. Mexico. Insofar as sister State divorces are concerned, we have
held in Hammer v. Hammer (303 N. Y. 481 [Florida divorce])
and in Garvin v. Garvin (302 N. Y. 96 [Virgin Islands divorce] )
that upon the facts there presented an injunction may issue.

The rationale upon which such injunctions have been allowed

ee 375

is as follows: Since the Supreme Court of the United States,
in 1942, decided Williams v. North Carolina (317 U. 8. 287;
see, also, 325 U. S. 226), and there overruled Haddock v. Had-
dock (76 App. Div. 620, affd. 178 N. Y. 557, affd. 201 U. S. 562),
such sister State divorces granted to plaintiffs domiciled in
such States — provided ‘‘ the requirements of procedural due
process ’’ are met (317 U. S. 303) — are entitled to a presump-
tion of validity under the ‘‘ full faith and eredit ’’ provision of
the Federal Constitution (art. IV, § 1). Moreover, in the Ham-
mer case (supra), the husband submitted ‘‘ numerous facts tend-
ing to show that he has transferred his domicile to that [sister]
State”? (278 App. Div. 399), and in the Garvin case (supra),
which was an action for separation, there was an opposing affi-
davit by the husband’s attorney attempting to show that the
Virgin Islands residence was not sham — factors lending added
strength to the presumption of validity under the ‘“ full faith
and credit ’’ doctrine which would attach to resulting decrees.
Each such divorce, therefore, has the semblance of being some-
thing other than a complete nullity, such as we have here, where
defendant does not even deny plaintiff’s clear allegations.
Hence in the Garvin case we held that an injunction may issue
to save the rights of the nonappearing spouse and guard her
against ‘‘ the heavy burden of striking down the prima facie
effect of the foreign [sister State’s] court’s finding of resi-
dence ’’ (302 N. Y. 102).

However, we have never held that any such presumptive
legality and validity must be accorded Mexican divorces —
which are, of course, beyond the scope of ‘‘ full faith and credit ’’
(see Caldwell v. Caldwell, 298 N. Y. 146, 149; Gaskell v. Gaskell,
189 Mise. 504). Judgments of courts of foreign countries, we
said in Martens v. Martens (284 N. Y. 363, 365), ‘‘ differ from
judgments of courts of our sister States to which, by consti-
tutional mandate, full faith and credit must be given. They
must not contravene our public policy ’’. Thus, under comity —
as contrasted with full faith and credit — our courts have power
to deny even prima facie validity to the judgments of foreign
countries for policy reasons, despite whatever allegations of
jurisdiction may appear on the face of such foreign judgments.

Our Legislature has expressly declined, in section 397 of the

376 Le
ee

Civil Practice Act, to declare the ‘“ effect’? of a judgment of
a foreign country beyond authorizing our courts to receive such
judgment as ‘‘ evidence ’’ under section 395 of the Civil Practice
Act— obviously because it recognized that the full faith and
eredit clause of our Federal Constitution was inapplicable to
such judgments. It is therefore clear that the recognition of
a foreign country judgment is far less certain, the judgment
itself is far more assailable and vulnerable, than sister State
judgments, and is subject to a test of policy. There is thus no
significant basis for treating sister State and foreign country
divorce judgments as identical in legal effect within this State.

In our opinion, the question as to whether an injunction may
issue to restrain defendant from prosecuting this Mexican
divorce action —a clear legal nullity under the allegations of
plaintiff’s complaint, and of no more validity than a so-called

/ mail-order divorce, from which we said ‘‘ no rights of any kind
may spring’? (Caldwell v. Caldwell, supra, p. 151) —is con-
trolled by valid precedent in our court. Prior to the first
Williams case (supra) (1942), when Haddock v. Haddock
(supra) was still good law with respect to foreign decrees in
general, a Florida divorce suffered virtually the same fate in New
York State as does a Mexican decree of the type sought by
defendant here. In 1940, we denied an injunction to a wife who
sought to restrain her husband from proceeding with such a
Florida divorce and whose allegations of nonresidence, as here,
were not denied by the husband (Goldstein v. Goldstein, 283
N. Y. 146).

Virtually the same arguments which are presently raised by
plaintiff concerning the alleged practical effects or annoyance
which would be caused her by a legally invalid Mexican decree
had theretofore been argued successfully before the Appellate
Division, First Department, in Greenberg v. Greenberg (218
App. Div. 104 [1926]) and were submitted to this court by the
plaintiff in the Goldstein case (supra) fourteen years later (see
283 N. Y. 147). However, we there rejected the reasoning of the
Greenberg case (supra) and denied the injunction (283 N. Y.
148).

On the facts pleaded here, defendant is attempting to prose-
cute a divorce in a foreign country which would not be entitled
to ‘‘ full faith and credit ’’ in this State — precisely the situa-

ee 377
ee

tion we faced with respect to sister State divorces as they were
regarded prior to the Williams case (supra). What we decided
under those circumstances is controlling here.

Plaintiff need not go to any foreign jurisdiction. If, in fact,
defendant obtains a Mexican divorce and thereupon enters into

a subsequent marriage, plaintiff need have no fear for her »

property rights and marital status under New York law (Imbri-
oscia v. Quayle, 278 App. Div. 144, affd. 303 N. Y. 841; Goldstein

v. Goldstein, supra). A simple action for declaratory judgment,

when all the facts may be fully developed, is at all times avail-
able to her (see Baumann v. Baumann, 250 N. Y. 382; Lowe v.
Lowe, 265 N. Y. 197), the expenses of which may be assessed
against defendant (Civ. Prac. Act, § 1169-2). As we said in
the Baumann case (supra, p. 389), ‘‘ Under such circumstances
the acts enjoined do not constitute legal wrongs, which invade
substantial legal rights of the plaintiff that can be recognized
in law and protected by injunction.’’? Since plaintiff thus has
an adequate remedy under section 473 of the Civil Practice
Act, equity should refrain from granting the drastic relief of
injunction.

The orders of the Appellate Division should be reversed and
those of Special Term reinstated, without costs. The question
certified should be answered in the negative.

Conway, Ch. J. (dissenting). The question here presented is
whether the complaint states a cause of action for injunctive
relief.

The allegations of the complaint, pertinent to the issue, are set
forth in Judge Frozsseu’s opinion and need not be repeated here.

The relief prayed for is that defendant and his agents and
attorneys be permanently and perpetually enjoined from prose-
cuting the Mexican action for divorce and that he be similarly
enjoined pendente lite.

It is said that no injunction may issue, that plaintiff need have
no fear for her property rights and marital status under New
York law, that'a simple action for declaratory judgment is at
all times available to her and that, under the circumstances, it
is an adequate remedy. While we agree that plaintiff may
institute a suit for a declaratory judgment should defendant
obtain a Mexican divorce, we disagree with the conclusion that

378 Pe
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it is an adequate remedy or one which excludes the necessity
for injunctive relief.

In Garvin v. Garvin (302 N. Y. 96), this court-held that an
injunction may be obtained in this State to restrain the prose-
cution of a divorce action in a sister State, or in a United States
possession or territory. The theory of the case is that the
spouse who remains in New York should not be required to
wait until the foreign court has rendered a decree of divorce
and then have to bear the burden of overcoming, in a subsequent.
declaratory judgment action, the prima facie effect of the foreign -
court’s finding of residence by the spouse who appeared in such
jurisdiction. The plaintiff there claimed that her husband had
left for the Virgin Islands; that his stay in the Islands was
intended to be temporary only, for divorce purposes, and that
any alleged residence there was a sham. It is clear that if plain-
tiff were correct in those assertions any divorce decree which
the husband might have obtained in the Virgin Islands would
have been void under the second case of Williams v. North
Carolina (325 U. 8. 226). That is, assuming those allegations as
true, under the second Williams case (supra) the Virgin Islands

.decree would have been a legal nullity from which no rights of

any kind could spring. Nevertheless, we authorized the issuance
of an injunction in such a case. It cannot be said that in so
doing we were motivated by differences in the burden of proof
required in a declaratory judgment action for, in reality, none
exists. In an action for an injunction the nonappearing spouse
must prove that the other spouse is not a bona fide domiciliary
of the sister State where the action for the divorce is being
prosecuted. In an action for a declaratory judgment such
spouse must prove that the other spouse was not a bona fide
domiciliary of the sister State. In both actions the burden of
proof rests upon the plaintiff. In both actions plaintiff must
prove her case by a fair preponderance of the evidence. - Inso-
far as the burden of proof in the two kinds of action is concerned
the so-called prima facie effect of the sister State decree might
well be said to be of no moment for, in order to obtain relief
in the injunction action the plaintiff must prove, by a fair pre-
ponderance of the evidence, that defendant is not a bona fide
domiciliary of the sister State and in the declaratory judgment
action the plaintiff must prove, by a fair preponderance of the

De 379
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evidence, that defendant was not a bona fide domiciliary of the
sister State. The lack of bona fide domicil must be established
in each case since the United States Supreme Court has said
that the power to grant a valid divorce rests upon domicil
(Williams v. North Carolina, supra, pp. 227, 229).

What we intended to point out in the Garvin case (supra),
when we spoke of the prima facie validity of the sister State
decree, was the fact that a sister State divorce decree is entitled
to a presumption of validity and, once it is procured, the wife
“« to save her rights as wife, will have to bring a new suit to set
aside the foreign decree’’. (Garvin v. Garvin, supra, p. 102.)
Until such time as the wife successfully maintains a collateral
attack on the sister State decree by way of a declaratory judg-
ment action, such decree is, for all practical intents and
purposes, valid and the procuring spouse may use it to
jeopardize the rights of the other spouse.

By permitting the aggrieved spouse to apply for injunctive
relief in this State, we also spare her the physical and financial
hardship of making a journey to a foreign jurisdiction to
present her defense.

We fail to perceive why we should not with more justification
afford the same relief to a spouse who is aggrieved as a result
of her spouse’s going into a foreign country to seek a decree
of divorce in such country. That will affect her in a greater
degree both physically and financially.

In the present action, defendant’s Mexican petition alleges
that he is a resident of Mexico ‘‘ and in that virtue you are
thereby competent to hear and try my case’’. The Mexican
decree, therefore, will undoubtedly carry the recital of Mexican
residence. While it may be possible for plaintiff to have such
decree declared invalid in a declaratory judgment action
brought by her, the invalidity of the decree will not be plainly

* apparent on its face. In Williams v. North Carolina (325 U. 8S.
226, 229-230, supra) the United States Supreme Court declared:
“Under our system of law, judicial power to grant a divorcee —
jurisdiction, strictly speaking—is founded on domicil.
* * * Domicil implies a nexus between person and place
of such permanence as to control the creation of legal relations
and responsibilities of the utmost significance. The domicil of
one spouse within a State gives power to that State, we have

380 |
nn

held, to dissolve a marriage wheresoever contracted.”’ We
cannot say, therefore, that a Mexican decree of divorce founded
upon the domicil of one of the spouses is invalid for lack of
jurisdiction. Until a sister State divorce decree is proved to
have been rendered by a court lacking jurisdiction it can have
an injurious effect on the rights of the nonappearing spouse.
It is a voidable decree, ie., one which is valid until declared
invalid. The same must be said of a Mexican decree which
recites residence (cf. Caldwell v. Caldwell, 298 N. Y. 146, 148,
where there was no claim of residence).

It is true that our Federal Constitution does not require our
courts to accord presumptive legality and validity to Mexican
judgments or decrees. Nevertheless, as early as 1862 this court,
announcing the decisional law of this State, declared in Lazier v.
Westcott (26 N. Y. 146) that a judgment obtained in a foreign
country is conclusive, so far as to preclude a retrial upon the
merits and that the defendant can impeach it only by proof
that the court had not jurisdiction of the subject matter or
of his person, or that the judgment was fraudulently obtained.
And, in Gould v. Gould (235 N. Y. 14, 27) which concerned itself
with a foreign divorce decree, we quoted favorably from Hilton
v. Guyot (159 U. S. 118, 167-168) as follows: ‘‘ A judgment
affecting the status of persons, such as a decree confirming or
dissolving a marriage, is recognized as valid in every country,
unless contrary to the policy of its own law. Cottington’s Case,
2 Swanston, 326; Roach v. Garvan, 1 Ves. Sen. 157; Harvey v.
Farme, L. R. 8 App. Cas. 43; Cheely v. Clayton, 110 U. 8. 701.
It was of a foreign sentence of divorce, that Lord Chancellor
Norrinenam, in the House of Lords, in 1688, in Cottington’s
Case, above cited, said: ‘It is against the law of nations not
to give credit to the judgments and sentences of foreign coun-
tries, till they be reversed by the law, and according to the form,
of those countries wherein they were given. For what right
hath one kingdom to reverse the judgment of another? And
how can we refuse to let a sentence take place till it be reversed?
And what confusion would follow in Christendom, if they should
serve us so abroad, and give no credit to our sentences.’ ”’
(Emphasis supplied.)

The grounds, then, for overturning a foreign judgment are
the same as those for overturning the judgment of a sister State

ee 381
—_—_

with the additional qualification that a foreign judgment will
not be recognized if it contravenes our public policy. If there
is jurisdiction in the foreign court and the judgment does not
contravene our public policy such a judgment will be accorded
recognition. The burden of proving that such a judgment does
contravene our public policy, like the burden of proving lack
of jurisdiction, is on the plaintiff, of course (see Gould v. Gould,
supra).

The Mexican decree to be procured here will not be invalid
until it has been declared so. Like a sister State decree it is
voidable only. Until it is declared void it has effect and will
be as injurious and harmful to plaintiff’s rights as a decree
obtained in a sister State.

It is no answer to plaintiff's problem for us to declare on
this appeal that the Mexican decree defendant will procure will
be ‘‘a clear legal nullity ’’. That conclusion follows only
because we must take as true on this motion the allegation in
the complaint that defendant appeared in Mexico on Novem-
ber 5, 1954, solely for the purpose of signing divorce papers and
not for the purpose of residing there, remaining at all times a
resident and domiciliary of New York State. In the declaratory
judgment action plaintiff will have to prove that allegation. As
I have already shown, if plaintiff’s complaint alleged a sham
residence in a sister ‘State rather than in Mexico, we would
authorize injunctive relief despite the fact that a decree so
procured would likewise be ‘‘a clear legal nullity”. The
hazards of both decrees flow from their voidable nature. If
we deny plaintiff the right to injunctive relief we will be placing
her in a position where she cannot prevent a so-called ‘‘ legal
nullity ’’ from coming into existence, yet in order to have this
‘legal nullity ’’ so adjudged she will have to prove, in an action
for a declaratory judgment, the self-same allegations presently
before us. In the interim her rights may be seriously impaired
as a consequence of the existence of the Mexican decree which,
on its face, appears to be valid. As the Appellate Division has
said in this case: ‘‘ Time has shown us that there are many uses
to which such a judgment may be put to cause a wife expense and
litigation. It is of little help to tell the wife that the foreign
decree is invalid and she has nothing to fear; that she may sub-
sequently commence an action for a declaratory judgment. We

382 as
ee

have only to look at the present record to find the facts that
cause vexation and difficulty not only to the parties but to the
courts. Here, the husband in his answering affidavit complains
about the permanent alimony allowed in the separation .action
although he did not appeal from the decree providing for-such -
payments. He states that it amounts to 35% of his net income
before taxes for the year 1953 and 42% thereof for. the year
1954. Yet, he is willing and anxious to enter upon another
marital venture. It must be recognized from experience that
in such event the court will be met with the problem upon a
motion to reduce the amount of permanent alimony as to the
division of a stated amount of income between the former wife
on the one hand and the husband and present wife on the other.”’

It is traditional for equity to restrain persons from “doing
acts which will work an injury to others, and are for that.reason
contrary to equity.and good conscience. We should not.permit
defendant to injure plaintiff upon the theory that a cure in.the
form of a declaratory judgment is at all times available: to
plaintiff when experience demonstrates that it is, at best, an
inadequate and incomplete cure. -

The order of the Appellate Division should be affirmed. |

Dyz, Futp and Van Vooruis, J J., coricur with Froussex, J.;
Conway, Ch:-J., dissents in an opinion in which _Dasmoxn and
Burks, JJ., concur.

Orders reversed, ete.

as
Tre Propis or tom Stars or New Yor, Respondent, ». Pane
Travaro, Appellant. .

Argued December 1,.1955; decided. December 28, 1955. ©

384
ees
PO

Joseph Winston and Sidney R. Siben for appellant. I. At the
end of the trial, defendant’s motion to dismiss should have been
granted since the proof presented fell below the standard
required to rebut the presumption of defendant’s imnocence.
(People v. Ledwon, 153 N. Y. 10; People v. Lewis, 275 N. Y. 33;
People v. Bearden, 290 N. Y. 478; People v. Gluck, 188 N. Y. 167;
People v. Wrieden, 299 N. Y. 425.) II. There was no evidence
to warrant sending to the jury defendant’s alleged possession
of burglar’s tools in violation of section 408 of the Penal Law.
(People v. Kobryn, 290 N. Y. 897; People v. Birnbaum, 208 App.
Div. 476; People v. Jenman, 296 N. Y. 269.) ILI. Reversible
error was committed.when witnesses for the People persistently
made reference to the fact that defendant would not speak after
being arrested, and further error was committed when the Judge
adverted to this in his charge to the jury. (People v. Rutigliano,
261 N. Y. 103; People v. Allen, 300 N. Y. 222; People v. Infantino,
224 App. Div. 193; People v. Abel, 298 N. Y. 333; People v.
Mleceko, 298 N. Y. 153; People v.. Hyman, 284 App. Div. 347,
308 N. Y. 794.)

Harry C. Brenner, District Attorney (Henry Tasker of coun-
sel), for respondent. I. The guilt of defendant was established
beyond a reasonable doubt. (People v. Birnbaum, 208 App. Div.
476.) II. Defendant. received a fair trial. (People v. Slover,
232 N. Y. 264; People v. Mleczeko, 298 N. Y. 153; People v.
Buchalter, 289 Nv. Y. 181.)

Van Vooruis, J. Defendant has been ‘convicted after a trial
of burglary in the third degree, and of grand larceny in the
first degree, in connection with the theft of fifteen sewing

a 385
Leeper e}

machines taken from the Wonderknit Factory on South Four-
teenth Street, in the Village of Lindenhurst, Suffolk County,
Long Island. He has also been convicted of having burglar’s
tools in his possession. These exploits were conducted with an
accomplice, according to the indictment, named Henry Fanning,
who pleaded guilty and exonerated defendant if his testimony
is to be believed.

The evidence against defendant was mainly circumstantial.
Fanning’s version is that on the evening of September 1, 1952,
he asked defendant to keep him company on an automobile ride
from his home in Brooklyn to call upon his mother at Copiague,
near Lindenhurst, Long Island, and that when they came to
Lindenhurst, he dropped defendant off at a bar and grill, and
told him that he would call for him later after visiting his
mother. Fanning testified that when he discovered that his
mother had retired for the night, he burglarized the Wonderknit
Factory instead of visiting her. Almost immediately after the
burglary had been accomplished, Fanning and defendant were
discovered by the police in Fanning’s automobile, with the
fifteen sewing machines in the back seat which had been stolen
from Wonderknit. Defendant’s hands were oily and greasy at
the time of their arrest, and his shirt and the top of his trousers
were covered with fresh oil. In this oil and grease were little
red and white cuttings of textile material or lint, which were
also discovered in scrapings beneath defendant’s fingernails as
shown by microscopic examinations at the police laboratory.
Fanning testified that defendant’s clothes were clean when they
left Brooklyn. These cotton fibers were identified by the
laboratory technician as cotton lint similar to that which was
present upon the sewing machines. These circumstances, except
for error in the admission of evidence and in the charge, would
be sufficient to sustain defendant’s conviction of third degree
burglary and of grand larceny in the first degree, upon the basis
that he and Fanning were in recent and exclusive possession
of the fruits of these crimes (People v. Galbo, 218 N. Y. 283, 290).

Nevertheless, defendant’s conviction of these crimes must be
reversed and a new trial granted with respect to them by reason
of error in the reception of evidence, which was aggravated
rather than corrected in the charge. The presence of oil, grease
and lint upon defendant’s clothing was treated as an important

386 Le
ee

link in the chain of circumstantial evidence connecting him with
the commission of these crimes, and this was admissible evidence
of an important kind. It became of consequence to learn where
and how defendant got this oil, grease and lint upon his shirt
and trousers. It was so noticeable when he was arrested that
the police officers questioned him about it on the scene. All of
this tends to make one believe that defendant participated
actively in this affair. The difficulty in affirming defendant’s
conviction upon these charges consists, however, in the cireum-
stance that one of the arresting policemen, and also an investi-
gator attached to the District Attorney’s office, were permitted
to testify that repeatedly defendant refused to answer where
he got this oil and grease upon his hands and clothing. It is
“a principle now firmly established in the law of this State that
“a person in custody accused of a crime is under no duty to
speak and that his silence should not be counted as giving
assent.’’’? (Lewis, J., quoting from People v. Pignataro, 263
N. Y. 229, 236, in People v. Abel, 298 N. Y. 333, 335.) In People
v. Rutigliano (261 N. Y. 103, 107), it was said per Pounn, Ch. J.:
‘No cautious person, when in custody, accused of crime would
eare to enter into a discussion of his guilt or innocence with his
captors and co-defendants, when what he said might be used
against him. * * * He is then under no duty to speak and
his silence should not be counted as giving assent to what he
hears. If he had counsel, he would doubtless be advised not to
talk. If he had not, he should not be prejudiced thereby.’’

When it came to the charge, the court did not instruct the
jury that defendant had the right to remain silent, and that his
refusal to explain how his clothing and hands became soiled
signified nothing, but, instead, the language of the charge
appeared to imply that these refusals to talk might be regarded
as evidence of guilt. The jury were told, concerning Police
Officer Ford: ‘And you will recall, if it agrees with your
recollection, that he asked the defendant when he was question-
ing the defendant, how he got his clothes greasy and oily, and
the defendant refused to answer.”

Although defendant’s counsel took no exception to the charge,
the point is raised by defendant’s motion to strike out Officer
Ford’s testimony about defendant’s refusal to answer questions
of this nature. It was not possible for defendant’s trial counsel

a 387
bse

to know in advance what Officer Ford was about to say upon
the witness stand, and there would have been nothing objection-
able in his testifying to some admission against interest or
confession which defense counsel probably expected the witness
was about to state that the defendant had made to him. How-
ever, after it appeared that the witness was merely being inter-
rogated in order to develop that defendant refused to answer
damaging questions while he was in custody, then, for the first
time, was it appropriate for defendant’s counsel to intervene,
and he did so, in the customary manner, by moving to strike
out the testimony. The court refused to strike it out upon the
basis that defendant’s counsel had opened the door, saying:
“No; I think you brought that out yourself —you asked for
conversations of the Defendant, conversations the Defendant
had with the officers. I think he is permitted to bring it out
now.”’

This was incorrect. Defendant’s counsel had not asked for
any conversation with defendant while Officer Ford was on the
stand, inasmuch as his examination in chief had just begun as
a witness for the People, and there had been no cross-examina-~
tion. What the Trial Judge referred to was evidently a colloquy
during the direct examination of Police Officer Poldino, who had.
previously testified. The prosecuting attorney had addressed
a question to Poldino: ‘‘ What, if anything—did you say
anything to him about what occurred at the Wonderknit
Factory?’ (Italics supplied.)

To this defendant’s counsel said:

“‘T am going to object, your Honor. If they want conversa-
tion, fine, but not what the police officer said to the Defendant.

“The Court: I think he is just directing his attention to
some particular phase of the conversation. I think it is permis-
sible. Objection overruled.’’

The objection taken was proper. Its being overruled was not
reversible error, inasmuch as Poldino afterward testified to
nothing which was inadmissible. Nevertheless, it was erroneous
for the Trial Judge to construe that objection, when it came to
the examination of Ford, as having had the effect of a waiver by
.defendant’s counsel of the right to object to use by the prosecu-
tion of defendant’s silence or refusal to answer during his
inquisition. It happened that Poldino testified that defendant

388 |
esses

gave an explanation of how he got the grease and other material
upon his hands and clothing, viz., that he was a stevedore and
worked on the New York City docks. Poldino’s testimony
differed, in this respect, from that of the subsequent witnesses
Ford and Investigator Gardiner. The valid objection to the
question which has been mentioned which the prosecuting
attorney addressed to Poldino, could not be interpreted as
having surrendered defendant’s right to object to testimony
by Ford that the defendant refused to answer when he was
asked how his hands and clothing became soiled in this manner,
or to move to strike it out.

Defendant’s conviction of possessing burglar’s tools in viola-
tion of section 408 of the Penal Law must be reversed and that
charge dismissed. There is testimony that there were screw
drivers and gloves in the glove compariment of Fanning’s
automobile. Testimony was stricken from the record that a
hacksaw, hammer, chisels and crowbar were found locked in
the trunk compartment. The record contains insufficient basis
to sustain the conviction upon this count (People v. Spillman,
309 N. Y. 295).

The judgment of conviction of defendant is reversed, the
third count in the indictment is dismissed charging him with
possession of burglar’s instruments contrary to section 408 of
the Penal Law, and a new trial is ordered under the first and
second counts charging defendant with burglary, third degree,
and grand larceny in the first degree.

Conway, Ch. J., Fuup, Frozssen, Burxe and Ooun*, JJ.,
concur; Dssmonp and Dyn, JJ., taking no part.

Judgments, insofar as they convict defendant of the
crime of possession of burglar’s instruments, reversed and
count 3 of the indictment dismissed and, insofar as they convict
him of the crimes of burglary, third degree, and grand larceny,
first degree, reversed and, as to counts 1 and 2 of the indictment,
a new trial is ordered.

* Designated pursuant to section 5 of article VI of the State Constitution
in the temporary absence of Dusmonp and Dvs, JJ.

In the Matter of the Pusiic ApmuvisrraTor or THE CouNTY oF
New Yorx, as Administrator of the Estate of Jamzs Trevor,
Deceased, Respondent. Manvracrursrs Trust Company,
Appellant.

Submitted October 3, 1955; decided December 28, 1955.

William J. Granger and Donald F. Malin, Jr., for appellant.
The statutory jurisdiction requisite to support the decree made
by the Surrogate is lacking. (Matter of Hyams, 237 N. Y.
211; Matter of Walker, 186 N. Y. 20; Matter of Delaney, 256
N. Y. 315; Matter of Holden, 264 N. Y. 215; Fidelity & Cas.
Co. v. Farmers Nat. Bank, 275 N. Y. 194; Sundail Constr. Co.
y. Liberty Bank, 277 N. Y. 187; Solicitor for Affairs of His
Majesty’s Treasury v. Bankers Trust Co., 304 N. Y. 282; Bald-
win’s Bank of Penn Yan v. Smith, 215 N. Y. 76; Matter of
Rubinstein, 169 Mise. 273; Matter of White, 119 App. Div. 140;
Matter of Brazil, 219 App. Div. 594; Matter of Hammer, 237
App. Div. 497, 261 N. Y. 677; Matter of Arduini, 243 App. Div.
10; Matter of Forrest, 234 App. Div. 890, 259 N. Y. 553; Matter
of Hitchings, 281 App. Div. 202.)

Joseph T. Arenson for respondent. The Surrogate’s Court
had jurisdiction to determine the title to the bank account main-
tained by decedent with appellant in the name of Harl Clifford
and to direct payment of the proceeds thereof to respondent.
(Matter of Newsome, 179 Mise. 862; Matter of Hirsch, 202 Mise.
561; Matter of Goldstein, 299 N. Y. 43; Matter of Runk, 200 N. Y.
447; Matter of Lyon, 266 N. Y. 219; Matter of Raymond v.
Davis, 248 N. Y. 67; Matter of Drellich, 254 App. Div. 380;
Matter of O’Flyn, 174 Misc. 1025; Matter of Beall, 184 Misc.
881; Matter of Hyams, 237 N. Y. 211; Matter of Walker, 136
N. Y. 20; Matter of Wilson, 252 N. Y. 155.)

Conway, Ch. J. During his lifetime the decedent, James
Trevor, had been the recipient of city welfare benefits. After
his death three bank books in the names of James Trevor, Paul
Weber and Harl Clifford, respectively, were found in his room.
Thereafter, letters of administration were issued to the Public
Administrator of the County of New York who, as administrator

a 391
ee

of the estate of James Trevor, also known as Paul Weber and
Karl Clifford, instituted the present discovery proceeding in the
Surrogate’s Court.

In its answer the trust company admitted the existence of the
account which had been opened in the name of one ‘‘ Harl Clif-
ford ’’ but set up two affirmative defenses: (1) That the rela-
tionship between the trust company and its depositor was that of
debtor and creditor and, accordingly, that the Surrogate’s Court
had no jurisdiction to issue a decree directing the trust company
to pay over the balance standing to the credit of the account, and
(2) that it could not with impunity pay over the funds in ques-
tion to the petitioner in the absence of unequivocal proof that
James Trevor and its depositor, Harl Clifford, were one and the
same person.

The Surrogate found that the bank account in the trust com-
pany in the name of Earl Clifford was an asset and the property
of the estate of James Trevor and directed the trust company
to deliver the proceeds of the account to the Public Adminis-
istrator, as administrator of the estate of James Trevor. The
Appellate Division has affirmed by a divided court.

On this appeal the sole contention of the trust company is that
sections 205 and 206 of the Surrogate’s Court Act, under which
this proceeding was brought, do not confer upon the Surrogate’s
Court the power to direct the payment over of the balance stand-
ing to the credit of an ordinary bank deposit account to an
estate representative of a deceased depositor.

Section 205 of the Surrogate’s Court Act, entitled ‘‘ Proceed-
ings to discover property withheld ’’, authorizes the initiation of
a discovery proceeding upon a petition alleging: ‘‘ any facts
tending to show that money or other personal property, or the
proceeds or value thereof * * * is in the possession, under
the control or within the knowledge or information of a person
who withholds the same * * *.’? If satisfied that reason-
able grounds exist, the Surrogate must then order an inquiry
regarding the property and may determine adverse claims to
the property which become apparent during the proceedings.

Section 206 of the act then provides: ‘‘ If it appears that the
petitioner is entitled to the possession of the property, the
decree shall direct delivery thereof to him or, if the property
shall have been diverted or disposed of, the decree may direct

392 |
es

payment of the proceeds or value of such property or may
impress a trust upon such proceeds or make any determination
which a court of equity might decree in following trust property
or funds.’’

While the statute speaks in broad and unqualified terms of
‘“money or other personal property, or the proceeds or value
thereof ’’, the decisions interpreting that language disclose that
it was not the intention of the Legislature that all estate claims
were to be adjusted by way of a discovery proceeding. The
purpose of such a proceeding in the Surrogate’s Court is to
obtain the possession of specific personal property or money
which belongs to the estate, or the value of the proceeds thereof
in the event of the disposal of the specific property, and which
is in the possession, under the control or within the knowledge
or information of the person withholding it (see Matter of Ehr-
lich, 126 Mise. 673; Matter of Sichel, 162 Misc. 2; and Matter of
Wilson, 252 N. Y. 155, 157). As was pointed out by Surrogate
Wineare in Matter of Lusher (159 Mise. 387, 389) : ‘¢ The line of
demarkation between the instances in which the court has juris-
diction and those in which it has not, is wholly unmistakable. If
the genesis of the obligation of the respondent was predicated on

_ the possession of an asset, jurisdiction inheres. If it was based
merely on a general claim against him, purely in personam, it
does not.’? Thus property concerning which discovery has been
held a proper remedy for recovery includes, among others,
shares of stock,’ insurance policy proceeds,” papers relating to
financial affairs of deceased and other documents,’ death benefit
from a labor organization,‘ interest in a mortgage,® a deposit of
foreign money,® secret commissions,’ money of a client held in
trust by attorney,® proceeds of sale of personal property, and
securities or money commingled with trust funds.’”

1 Matter of Babcock, 85 Misc. 256, affd. 169 App. Div. 903, affd. 216 N. Y. 717.
2 Matter of Howley, 133 Mise. 34; Matter of Reilly, 111 Mise. 66.

8 Matter of Ryan, 115 Mise. 472.

4 Matter of Reilly, 111 Mise. 66, supra.

© Matter of Hauber, 136 Mise. 798.

6 Matter of Gruen, 1 Mise. 2d 41.

1 Matter of Browning, 177 Misc. 328.

8 Matter of Ostrow, 162 Misc. 783.

9 Matter of Fraley, 129 Misc. 803.

10 Matter of Rubin, 168 Mise. 81,

Le 393
eases

As it is pointed out in Jessup-Redfield : ‘‘ Disregarding assets
for which discovery lies but as to which the remedy fails as a
matter of proof, there are distinct types of assets that cannot be
sought by discovery. One of these is a common debt. Many
cases attempting such recovery which have failed on jurisdic-
tional grounds * * * [are to be found] [see, e.g., Matter of
Thomas, 235 App. Div. 450; Matter of Carey, 11 App. Div. 289;
Matter of Thoms, 165 Mise. 398; Matter of Faulkner, 184 Mise.
507; Matter of Bawer, 132 Mise. 568, affd. 226 App. Div. 866].
The wonder is that the effort is so persistently undertaken.”’
(4 Jessup-Redfield, Surrogates’ Law and Practice, § 3058.) The
underlying theory of those cases is that the Legislature has, by
means of a discovery proceeding, vested in the Surrogate’s
Court jurisdiction to aid a personal representative in his duty
to recover property of the decedent or of the estate or the pro-
ceeds of the sale of such property but has not vested in the Sur-
rogate’s Court jurisdiction over actions at law for the recovery
of common debts or to enforce ordinary contract obligations and
that an action to establish and enforce a debt must still be
brought in the common-law forums. The nature of such an
action isin personam and it does not come within the general
purview of the statute authorizing in rem discovery proceed-
ings. The relationship between a bank and its depositor is that
of debtor and creditor with the result that the obligation of the
bank to the depositor becomes merely a chose of action in the
possession of the depositor (see, e.g., Solicitor for Affairs of His
Majesty’s Treasury v. Bankers Trust Co., 304 N. Y. 282; Fidel-
ity & Cas. Co. v. Farmers Nat. Bank, 275 N. Y. 194; Matter of
Holden, 264 N. Y. 215; Matter of Delaney, 256 N. Y. 315; Bald-
win’s Bank of Penn Yan v. Smith, 215 N. Y. 76).

The debt from the trust company here to its depositor, ‘‘ Harl
Clifford ’”’, is not different in essence from any other debt aris-
ing on a contract. The chose in action -possessed by the estate
of decedent is not property withheld by the trust company. Nor
can it be said that the trust company holds proceeds or value
arising from diversion or other disposition of property which
belonged to the decedent. The trust company has never been in
possession, as such, of any property of decedent which it could
divert or dispose of, and no proceeds or value arising from

394 Le
Leen!

a disposition of any of decedent’s property by other persons
has ever come into the trust company’s hands. For the fore-
going reasons there is a line of authorities holding that the
Surrogate’s Court does not have jurisdiction to direct payment
of the balance in a decedent’s bank account to his estate repre-
sentative (see, e.g., Matter of Hitchings, 281 App. Div. 202;
Matter of Hammer, 237 App. Div. 497, affd. without opinion 261
N. Y. 677; Matter of Brazil, 219 App. Div. 594; Matter of White,
119 App. Div. 140).

Matter of Akin (248 N. Y. 202) and Matter of Wilson (252
N. Y. 155, supra) do not suggest a contrary result. They merely
indicate that the Surrogate’s Court now has jurisdiction to
dispose of every claim to property which should be delivered to
an executor, administrator or guardian. Money improperly
drawn from a bank is property which comes under the jurisdic-
tion of the Surrogate’s Court in discovery proceedings. It then
becomes a trust fund or ‘“ specific money ’’ in the hands of the
wrongful holder over which the Surrogate’s Court may exercise
control. Here, the trust company had no specific money of the
deceased in its hands. It merely owed the estate money.

The 1939 amendments to sections 205 and 206 did not add to
the power of the Surrogate with respect to directing payment of
a bank deposit. According to the Bill Notes to chapter 343 of
the Laws of 1939, the amendments had a twofold purpose:
(1) authorizing a testamentary trustee to bring discovery pro-
ceedings, and (2) permitting the bringing in of a third party
claiming the right to possession of the property.

Accordingly, we are presented with a situation where the Sur-
rogate was without jurisdiction to entertain a discovery proceed-
ing. It necessarily follows that the decree of the Surrogate is
void. (Matter of Walker, 136 N. Y. 20; Chemung Canal Bank v.
Judson, 8 N. ¥. 254.) The trust company may not be asked to
content itself with the Surrogate’s decree or be told that the
Surrogate’s decree will protect it against a possible later claim
as much as a judgment in an action, for the decree of a court
lacking jurisdiction of the subject matter is a nullity which
affords no protection since it can be overturned at any time
(see Matter of Hitchings, 281 App. Div. 202, supra).

The order of the Appellate Division and the decree of the Sur-
rogates’ Court should be reversed and the petition dismissed,
with costs in this court and in the Appellate Division.

Dzsmonp, Fup, Fronssez, Van Voornis and Burks, JJ.,
concur; Dys, J., taking no part.

Order reversed, ete.
a

Epwarp L. Travs, Appellant, v. Toomas Divzter, Respondent
and Third-Party Plaintiff-Appellant. Vuicroria Txteviston
Corp. et al., Third-Party Defendants-Respondents.

Argued October 11, 1955; decided December 28, 1955.

Arthur A. Kaye and Gerald Moss for appellant. I. There
was ample proof that the Dinzler car was driven into the rear of
the car ahead. This was established as a matter of fact and
was not left to inference. II. Where an operator drives his
automobile into the rear of another car going in the same direc-
tion, a question of fact is presented as to his negligence.
(Schuler v. Newhof, 276 App. Div. 887; Tosto v. Marra Bros.,
275 App. Div. 686, 299 N. Y. 700; Diem v. Adams, 266 App.
Div. 307; Lafforthun v. Strauss, 192 Mise. 88.) III. The verdict
for plaintiff should be reinstated and judgment directed to be
entered accordingly. (Cornbrooks v. Terminal Barber Shops,
282 N, Y. 217; Marcario v. City of New York, 278 App. Div. 712.)

a 397
es

William C. Mattison and Thomas P. Curtin for respondent-
appellant. I. On this record the trial court properly dismissed
the complaint of plaintiff Traub. (Cole v. Swagler, 308 N. Y.
325; O’Connor v. Complete Mach. & Equipment Co., 281 App.
Div. 1046, 307 N. Y. 623; Wank v. Ambrosino, 307 N. Y. 321;
Ruppert v. Brooklyn Heights R. R. Co., 154 N. Y. 90.) IL. The
trial court improperly dismissed Dinzler’s third-party com-
plaint. (Elfeld v. Burkham Auto Renting Co., 299 N. Y. 336;
Elliott v. Flushing Sand & Stone Co., 273 App. Div. 782; Dittman
v. Davis, 274 App. Div. 836, 299 N. Y¥. 601; Gorham v. Arons,
282 App. Div. 147, 306 N. Y. 782; Chirichella v. Shamrock Cab
Corp., 207 Misc. 871.) III. This court, on the procedural
aspects of this record, must grant a new trial on reversal and
may not reinstate the jury’s verdict for plaintiff. (Shaw v.
Roovers Bros., 289 N. Y. 348.)

William E. Lyons for Victoria Television Corp., third-party
defendant-respondent. Since plaintiff in the primary action
failed to establish a cause of action against Dinzler, the issues
raised by the third-party complaint between third-party plain-
tiff Dinzler and third-party defendant Victoria Television Corp.
became academic and dismissal of the third-party complaint was
proper. (Martin v. Herzog, 228 N. Y. 164; Digelormo v. Weil,
260 N. Y. 192; Brianzi v. Crane Co., 196 App. Div. 58; O’Connor
v. Complete Mach. & Equipment Co., 281 App. Div. 1046, 307
N. Y. 623; Church v. Staley, 281 App. Div. 928, 306 N. Y. 979;
Philpott v. Conrad, 282 App. Div. 1095; Cole v. Swagler, 308
N. Y. 325.)

James E. Boboras and Francis J. Parks for Hjalmar V.
Sorenson, third-party defendant-respondent. I. The trial court
properly dismissed the complaint of plaintiff Traub. (Wank
v. Ambrosino, 307 N. Y. 321.) II. The judgment dismissing the
third-party complaint should be affirmed or, in the event that
this court reinstates the verdict of the jury in favor of plaintiff,
the case should be remitted to trial term for such proceedings
with respect to the third-party complaint as this court deems
proper. (Elliott v. Flushing Sand & Stone Co., 273 App. Div.
782; Dittman v. Dawis, 299 N. Y. 601; Dolnick v. Donner Lbr.
Corp., 275 App. Div. 954, 300 N. Y. 660; Middleton v. City of
New York, 276 App. Div. 780, 300 N. Y. 782.)

398 a
ee

Bourgs, J. The plaintiff appeals from a judgment affirming
the dismissal of the complaint on the merits, and the defendant,
Dinzler, third-party plaintiff-appellant, appeals from the affirm-
ance of the dismissal of the third-party complaint against Vic-
toria Television Corp. and Sorenson.

The plaintiff Traub instituted this action against the defend-
ant Dinzler for personal injuries sustained by Traub in a col-
lision between a motor vehicle owned by Dinzler and operated by
third-party defendant Sorenson and another unidentified motor
vehicle. Dinzler impleaded Victoria Television Corp. and Sor-
enson, alleging that he loaned his motor vehicle to Victoria,
whose employee, Sorenson, was driving it in the course of his
employment by Victoria, at the time of the accident. Victoria
impleaded Sorenson.

The action was tried in the Supreme Court, Nassau County,
before the court and a jury. On the retirement of the jury for
its deliberation, the court dismissed Dinzler’s third-party com-
plaint against Victoria and Sorenson, as well as Victoria’s third-
party complaint against Sorenson.

Thereafter the jury returned a verdict in the main action in
favor of Traub against Dinzler in the amount of $5,000. The
court set aside the verdict, holding that Traub failed to prove a
collision and failed to prove any actionable negligence on the
part of the defendant Dinzler. In a supplemental memorandum
opinion the court granted the defendant Dinzler’s motion to dis-
miss the complaint at the end of the entire case.

On a rainy afternoon the plaintiff, Traub, was a front-seat
passenger in a motor vehicle owned by defendant Dinzler, and
driven in a westerly direction by third-party defendant Soren-
son on Grand Central Parkway, Queens, New York. Traub and
Sorenson were fellow-employees of Victoria. They were trans-
porting a television set in the vehicle. Victoria had borrowed
the vehicle from Dinzler for the purpose of delivering the tele-
vision set. Dinzler was not present in the car at the time.

The Dinzler vehicle, prior to the accident, was proceeding in
the right lane at a uniform rate of speed, estimated by plaintiff
to be between thirty and forty miles per hour. This rate of
speed, so the court charged, without exception, was a legal rate
of speed.

a 399
esas

As the Dinzler vehicle proceeded along the highway and
approached Hollis Court Boulevard, Queens, the vicinity of the
accident, the rainfall increased in intensity. Plaintiff thereupon
prepared to close the open car window on his side of the vehicle.
To accomplish this he turned his body in the direction of the
window and with his left hand on the window pane and his right
hand on the window crank, he closed the window. As plaintiff
then turned his body to the normal passenger position, he
noticed a car in front of the Dinzler vehicle on the highway and
in the same lane. This car, plaintiff testified, was either stopped
or going slowly and was some thirty-five feet in front of the
Dinzler vehicle when plaintiff first saw it. The driver of this
car gave no manual or mechanical warning signal of any kind.
Sorenson attempted to stop the Dinzler vehicle but it did not
seem to slacken its speed. Plaintiff testified on direct examina-
tion that he did not remember the ‘‘ crash ’’ as he lost conscious-
ness due to a head injury.

On cross-examination of the plaintiff, all three attorneys for
the defendants referred to the accident or collision. The defend-
ant Dinzler testifying in his own behalf confirmed the occurrence
of the collision and conceded that he had filed a report of the
collision with the Motor Vehicle Bureau. The defendants offered
no other proof. The uncontradicted testimony presented a ques-
tion of fact for the jury: Was Sorenson as a party to an auto-
mobile accident on a rainy day negligent in operating a car
which failed to slacken its speed when the brakes were applied
while driving the car at thirty-five to forty miles an hour, and
following within thirty-five to forty feet of a car engaged in
slowing down or stopping? The defendants were free to pro-
duce other evidence as to the cause of the accident. They failed
to do so.

Here the facts proved might warrant the inference that the
accident was attributable to the failure of the operator of the
defendant’s car to properly control the car. Therefore it was
for the jury to decide whether or not the operator of the defend-
ant’s car was negligent. In Chisholm v. State of New York
(141 N. Y. 246, 250) this court stated:

“« Great stress was laid upon the fact that the claimant testi-
fied that he did not know how he fell; he stated under cross-
examination: ‘I think I stepped down one of the steps; after

400 Le

that I did not know anything until I was picked up down on
the ground.’

“Tt was insisted that claimant’s lack of knowledge on this
point led to a failure of proof as to how he came to be lying
at the bottom of this excavation ten feet in depth.

‘* We do not so regard it, but, on the contrary, consider that
the claimant’s testimony, taken in connection with all the evi-
dence in the case, leads irresistibly to the conclusion that he,
without negligence on his part, on a dark night fell into an
excavation that the state, through its servants, had left directly
in his path, wholly unguarded, in a public highway over which
he was lawfully traveling.’

‘We conclude that the court in this case erred in setting aside
the verdict and dismissing the complaint of the plaintiff.

The court also improperly dismissed the defendant’s third-
party complaint. The plaintiff sued only Dinzler. The plain-
tiff’s complaint was founded exclusively on the negligence of
Sorenson in operating Dinzler’s vehicle. The pleadings contain
no allegation of affirmative or active negligence on Dinzler’s
part. The plaintiff sought recovery against Dinzler solely on
Dinzler’s ownership of the vehicle in which the collision
occurred. Therefore, Dinzler’s liability, if any, is vicarious as
the owner of the vehicle and purely statutory under section 59
of the Vehicle and Traffic Law. Dinzler impleaded Victoria,
alleging a bailment of his vehicle to Victoria, and also Sorenson,
alleging that Sorenson operated the vehicle in the course of his
employment at the time of the accident. In his third-party
complaint Dinzler stated that he was not in the vehicle at the
time of the accident and he pleaded that plaintiff’s recovery
against him would be predicated on the primary, active and
affirmative negligence of the third-party defendants, Victoria
and Sorenson. Victoria in its answer to Dinzler’s third-party
complaint did not deny the allegation that it borrowed Dinzler’s
vehicle. Victoria impleaded Sorenson, alleging its employment
of Sorenson and his operation of the vehicle at the time of
the accident.

The court’s dismissal of Dinzler’s third-party complaint was
founded on two separate grounds: first, that an indemnification
agreement is indispensable to impleader, second, that Victoria

| 401
ee

and Sorenson, vis-a-vis Dinzler, were joint tort-feasors against
whom decisional law denies impleader.

Section 193-a of the Civil Practice Act provides: ‘‘ Third-
party practice; courts to which applicable. 1. After the service
of his answer, a defendant may bring in a person not a party
to the action, who is or may be liable to him for all or part of
the plaintiff’s claim against him, by serving as a third-party
plaintiff upon such person a summons and copy of a verified
complaint. The claim against such person, hereinafter called
the third-party defendant, must be related to the main action
by a question of law or fact common to both controversies, but
need not rest upon the same cause of action or the same ground
as the claim asserted against the third-party plaintiff.’

This is a proper case for impleader. In Gorham v. Arons
(282 App. Div. 147, affd. 306 N. Y. 782), this court held that
where liability is statutory and predicated on the ownership of a
motor vehicle within the purview of section 59 of the Vehicle and
Traffic Law, if the negligence of the owner was passive, the
owner is entitled to recover over against the actively negligent
employee driver and his employer.

On the state of this record we cannot reinstate the jury’s
verdict for the plaintiff. (Shaw v. Roovers Bros., 289 N. Y. 348.)

The judgment should be reversed and a new trial granted,
with costs to abide the event.

Conway, Ch. J., Desmonp, Fur, Frozssen and Van Vooruis,
JJ., concur; Dvyz, J., taking no part.

Judgment reversed, ete.
— Es

Tue Prope or tHE Stars or New Yorx, Respondent, v. Jamus
Versi, Appellant.

Argued December 1, 1955; decided December 28, 1955.

Irving T. Wolfson and Abraham Shalo for appellant. I. The
purpose of the penal statute is to assure weekly payment of
cash wages and not incidental contractual benefits. (People v.
Grass, 257 App. Div. 1; New York Central é H. R. BR. R. Co.
v. Williams, 64 Misc. 15.) II. To hold vacation pay under the
contract to be wages would violate the labor statute. III. Courts

| 403
ss

may not by forced construction create a crime. (People v.
Rowan, 179 Mise. 225; People v. Werner, 174 N. Y. 182;
People v. Taylor, 192 N. Y. 398; People v. Phyfe, 186 N. Y.
554; People v. Stoll, 242 N. Y. 458; People v. Cohen, 94
Mise. 355; Matter of Stryker, 158 N. Y. 526; Austin v.
City of New York, 258 N. Y. 113; People v. Interborough
R, T. Co., 169 App. Div. 32.) IV. Criminal statutes must
be so explicit that all men subject to their penalties may
Imow what acts are prohibited. (People v. Grogan, 260 N. Y.
138; United States v. Brewer, 139 U. 8. 278.) V. To hold that
failure to provide certain ‘‘ fringe ’’ benefits is a crime would
have the effect of ousting the civil courts of their traditional
jurisdiction and substituting the criminal courts in their place.

Edward 8S. Silver, District Attorney (David Diamond of coun-
sel), for respondent. The ‘‘ vacation pay ’’ referred to in the
collective bargaining agreement herein constitutes ‘‘ wages
earned ’’ within the purview of subdivision 2 of section 196 of
the Labor Law. (Matter of Stryker, 158 N. Y. 526; Seiden-
berg v. Duboff & Davies, 148 Misc. 167; Matter of Wil-low
Cafeterias, 111 F. 2d 429; Matter of Public Ledger, 161 F. 2d
762; Matter of New York State Labor Relations Bd. v. Metro-
politan Life Ins. Co., 183 Misc. 1064, 269 App. Div. 934, 295
N. Y. 839.)

Sidney Elliott Cohn, Daniel W. Meyer and Jean Taylor for
Truck Drivers Local Union No. 807, International Brotherhood.
of Teamsters, Chauffeurs, Warehousemen and Helpers of Amer-
ica, A. F. of L., and others, amici curie, in support of respond-
ent’s position. I. Vacation pay is an additional wage and repre-
sents compensation for services rendered by the employees to the
employer. Hence vacation pay constitutes wages within the
meaning of section 1272 of the Penal Law and section 196 of
the Labor Law. (Matter of New England Thread Co., 158 F.
788; Matter of Wil-low Cafeterias, 111 F. 2d 429; Matter of
Public Ledger, 161 F. 2d 762; Matter of Ciarla v. Solvay Process
Co., 184 App. Div. 629, 226 N. Y. 566; Matter of Schenectady
Ry. Co., 93 F. Supp. 67.) II. The fact that vacation pay is not
payable weekly does not remove it from the category of
“« wages ’? within the meaning of section 1272 of the Penal Law
and section 196 of the Labor Law.

404 : |
re

Conn, J. Pursuant to leave granted by a Justice of the
Appellate Division, Second Department, the defendant appeals
from an order and judgment of that court affirming a judgment
of a Court of Special Sessions held by a City Magistrate,
Borough of Brooklyn, convicting him of a violation of section
1272 of the Penal Law in that he failed to pay the wages of his
employees in accordance with the provisions of subdivision 2
of section 196 of the Labor Law.

On September 24, 1952, defendant entered into a two-year
collective bargaining contract with Truck Drivers Local Union
No. 807, International Brotherhood of Teamsters, Chauffeurs,
‘Warehousemen and Helpers of America. Among other things
the contract provided for vacations, the length of which was
dependent upon the number of days worked during the 12-
month period ending on March 31st of each year. For the first
120 workdays, one day of vacation was allowed for each 30 days.
Thereafter vacation days accrued on the basis of 15 or 20 addi-
tional workdays until a maximum of a 14-day vacation period
was reached. The agreement required the employer to post
the vacation schedule not later than May 1st.

While the agreement was in effect, defendant discontinued
business. He made all payments required under the agreement
save for the accrued vacations of six of his employees ranging
from four to fourteen days. Upon complaint of these employees
who were members of the union, defendant was convicted on
an information charging him with a violation of subdivision 2
of section 196 of the Labor Law in that on March 31, 1954, he
failed to pay the wages due the complainants who were employed
by him ‘‘ for various periods during the past year ’’.

So far as here pertinent, subdivision 2 of section 196 of the
Labor Law provides: ‘‘ Every person carrying on a business
by lease or otherwise * * * shall pay weekly to each
employee the wages earned to a day not more than six days
prior to the date of such payment.’

The relevant portion of section 1272 of the Penal Law pro-
vides: ‘‘ Each person * * * who does not pay the wages
of all his * * * employees in accordance with the provi-
sions of the labor law is * * “ guilty of a misdemeanor,
and upon conviction therefor, shall be fined not less than one
hundred nor more than ten thousand dollars or imprisoned for

P| , 405
|

not more than one year, or punished by both such fine and
imprisonment for each such offense.’’

The sole question presented by the appeal is whether vacation
pay constitutes wages within the meaning of the above-quoted
sections of the Labor Law and the Penal Law. The trial court
held that since vacation pay represented part of the employee’s
compensation for services rendered, it fell within the purview
of the statutes under consideration.

The requirement that an employer pay his employees their
wages weekly was first imposed in 1890 (L. 1890, ch. 388, § 1).
After several amendments it was carried over as section 10 of
the Labor Law (L. 1897, ch. 415), from which the present sec-
tion 196 was derived. The purpose of the law was to assure
prompt payment of daily wages to those employed in a subordi-
nate capacity and who depended upon their earnings for support
on a per diem rather than on a salary basis. (Erie R. R. Co. v.
Williams, 233 U. S. 685, 704.) It was not intended to include
the so-called fringe benefits found in present-day collective
bargaining contracts, which were relatively foreign to per diem
hirings at the time of the original enactment of the statute.

In the present case the daily and hourly rates of pay are set
forth in section 1 of the collective bargaining contract which
deals exclusively with ‘‘ wages’’. Failure to pay the amounts
prescribed under that section within six days after they are
earned, and not a failure to pay vacation money, is what would
constitute a violation of the statute.

Section 196 of the Labor Law is a police power regulation
intended for the protection of those who are dependent upon
their wages for sustenance (New York Central & H. R. R. R.
Co. v. Williams, 64 Misc. 15, 27, 28, affd. 186 App. Div. 904,
affd. 199 N. Y. 108, affd. sub nom. Erie R. R. Co. v. Williams,
233 U. 8. 685, supra). A violation of its provisions is malum
prohibitum and not malum in se, and, as such, the statute should
be ‘‘ strictly construed’. (People v. Taylor, 192 N. Y. 398, 400;
People v. Werner, 174 N. Y. 182, 184.) ‘‘ Acts otherwise inno-
cent and lawful do not become criminal unless there is a clear
and positive expression of legislative intent to make them
criminal ’’. (People v. Adamkiewicz, 298 N. ¥. 176, 179.) See,
also, People v. Bene (288 N. Y. 318, 323) and People v. Grogan
(260 N. Y. 138, 145). In People v. Shakum (251 N. Y. 107, 113-

406 [|
ee

114) the doctrine is set forth as follows: ‘‘It is well settled
that a criminal statute should narrowly be construed; that acts
otherwise innocent and lawful, do not become crimes, unless
there is a clear and positive expression of the legislative intent
to make them criminal. (People v. Phyfe, 136 N. Y. 554; Burks
v. Bosso, 180 N. Y. 341.) In People v. Phyfe the court said:
‘ The citizen is entitled to an unequivocal warning before con-
duct on his part, which is not malum in se, can be made the
occasion of a deprivation of his liberty or property.’ ’’

Mere failure to pay wages within the time prescribed by the
statute automatically constitutes a violation of the law and
exposes the employer to criminal prosecution (People v. Werner,
supra; People v. Kibler, 106 N. Y. 321, 323) ; hence the language
of the statute is to be given the meaning it conveys to the ordi-
nary employer as to what must be done and what must be
avoided, to the end that he may know how to comply with its
requirements. (People v. O’Gorman, 274 N. Y. 284, 287.) As
pointed out in Umted States v. Brewer (189 U. S. 278, 288):
“Laws which create crime ought to be so explicit that all men
subject to their penalties may know what acts it is their duty
to avoid. * * * Before a man can be punished, his case
must be plainly and unmistakably within the statute.”’

Tf the term ‘‘ wages ’’? as used in the Labor Law is to be
construed according to its fair import, ‘‘ vacation pay ’’ cannot
be embraced in that term by implication. The courts may not
by forced construction create a crime. (People v. Stoll, 242
N. Y. 453, 463.)

In support of the People’s position, reliance is placed upon
section 21 of the Penal Law, which provides: ‘‘ The rule that
a penal statute is to be strictly construed does not apply to this
chapter [Penal Law] ’’. However, it is to be noted that the
section goes on to state that its provisions ‘‘ must be construed
according to the fair import of their terms, to promote justice
and effect the objects of the law.’’ A construction of the
language of subdivision 2 of section 196 of the Labor Law which
makes penal that which is not plainly written in the statute,
would hardly promote justice or effect the object of the law
which is to compel prompt payment of daily wages to the small
wage earner. (People v. Grass, 257 App. Div. 1; New York
Central & H. RB. R. R. Co. v. Williams, supra, p. 26.)

Le 407
es

That the Legislature intended ‘‘ wages ’’ as used in the Labor
Law to mean the daily rate of pay earned during the preceding
six days is forcefully demonstrated by recent amendments to
section 71 of the Stock Corporation Law and section 22 of the
Debtor and Oreditor Law. By one act (L. 1952, ch. 794) the
Legislature amended both those sections by defining ‘‘ wages ’’
as used therein to include all benefits payable by an employer for
personal services rendered by an employee, specifically includ-
ing vacation, holiday and séverance pay; payments into insur-
ance, welfare or pension funds; and any other amounts due
from or payable by the employer. However, the definition of
“wages ’’ effected by the amendment is expressly limited to
the purposes of those two sections. This limitation coupled with
the failure to include, in the amending statute, a similar
expanded definition for the word ‘‘ wages’’ as used in the
Labor Law is significant. It shows that ‘‘ wages ’’ as used in
the Labor Law was not intended to include vacation pay or
other fringe benefits but was to be restricted to the basic rate
of pay.

To be sure, the term ‘‘ wages ’’ broadly interpreted includes
all of the benefits, monetary or otherwise, which an employee
derives from a master and servant relationship. However,
the sense in which it is used in a given statute depends not only
upon the wording of the statute but upon the purpose of the
law as well. The liberal interpretation placed upon it in actions
involving civil remedies of employees does not apply to the
word as used in a criminal statute. The decisions in civil
actions are based upon different considerations and they may
not enlarge an employer’s criminal responsibility beyond that
indicated by the criminal statute itself.

It is true that for the purpose of giving priority to wage
earners over other creditors under the Bankruptcy Act (§ 64,
subd. [a], par. [2], U. S. Code, tit. 11, § 104, subd. [a], par.
[2]) the Federal courts have held that ‘‘ A vacation with pay is
in effect additional wages’? (Matter of Wil-low Cafeterias,
111 F. 2d 429, 432) ; so too with respect to severance pay (Matter
of Public Ledger, 161 F. 2d 762). See, also, Matter of Brooklyn
Citizen (1 Mise 2d 162, 168). In computing the amount to
be awarded an injured employee under the New York Work-
men’s Compensation Law, bonuses were held to be part of the

408 Le

employee’s wages. (Matter of Ciarla v. Solvay Process Co.,
184 App. Div. 629, affd. 226 N. Y. 566) and, similarly, with
respect to tips received by an employee from his employer’s
customers. (Matter of Sloat v. Rochester Taxicab Co., 177 App.
Div. 57, affd. 221 N. Y. 491; Matter of Bryant v. Pullman Co.,
188 App. Div. 311, affd. 228 N. Y. 579.) Though these cases
involving only civil remedies construe wages to include vaca-
tion pay, severance pay, voluntary bonuses and tips, the same
construction may not be extended to penal provisions where
there is no statutory obligation placed on the employer in the
Labor Law or in the Penal Law to make such payments.

Moreover, under the welfare provisions of the collective bar-
gaining contract here, the employer is required to provide and
maintain insurance and hospitalization for the benefit of his
employees and their families. These benefits accrue imme-
diately upon employment and before any work is performed.
While they too fall within the broad interpretation of ‘ wages ’’,
they nevertheless do not constitute wages earned six days prior
to the date of payment within the meaning of the Labor Law.
It would appear, therefore, that the word ‘‘ wages’? as used
in the Labor Law was not intended to include every type of
benefit derived by an employee from a master-servant relation-
ship and which might fall within the general category of wages.

The law affords wage earners ample civil remedies for the
purpose of assuring them full payment of all additional benefits
accruing to them under their contract of employment. If the
Legislature desires to provide that failure to pay vacation
moneys or other benefits due an employee be deemed criminal,
this purpose can readily be effected by appropriate amendment
to the Labor Law or to the Penal Law. Under the language of
these statutes as now written, defendant was guilty of no
criminal act.

Accordingly, the judgment appealed from should be reversed
and the information dismissed.

Burks, J. (dissenting). The defendant was convicted of a
violation of the provisions of subdivision 2 of section 196 of
the Labor Law of the State of New York in that, on March 31,
1954, he failed to pay the wages due six complainants who were
employed by him ‘‘ for various periods during the past year ’’.

| 409
ee

A collective bargaining agreement to govern hours, wages and
working conditions was entered into between the defendant and
Truck Drivers Local Union No. 807, International Brotherhood
of Teamsters, Chauffeurs, Warehousemen and Helpers of Amer-
ica, affiliated with the American Federation of Labor, Central
Trades and Labor Council, and Building Trades Council of
New York which provided among other things for vacation pay
at a rate of one day’s vacation pay for the first thirty days’
work during a calendar year ending March 31st, up to fourteen
days’ vacation with pay for 235 days or more of work during
the year. The complainants are members of the union and their
claims arise out of a failure of the defendant employer to pay
moneys due for vacations at the time he closed his business.

Courts have construed the term ‘‘ wages ”’ to include vacation
with pay. (Matter of Wil-low Cafeterias, 111 F. 2d 429, 432;
Matter of Public Ledger, 161 F. 2d 762; Matter of Brooklyn
Citizen, 1 Mise 2d 162.)

The Legislature of this State in 1952 (L. 1952, ch. 794)
amended both section 71 of the Stock Corporation Law and
section 22 of the Debtor and Creditor Law to include a definition
of wages, which specifically included vacation pay. The courts
and the Legislature have recognized that vacation pay is a
part of wages.

The question before us is whether ‘‘ vacation pay’’ is
“wages ’’ within the meaning of section 196 of the Labor Law
and section 1272 of the Penal Law. Section 1272 of the Penal
Law and section 196 of the Labor Law are correlative. They
were enacted to protect employees by insuring the prompt and
expeditious payment of their wages.

Subdivision 2 of section 196 of the Labor Law provides in its
pertinent parts: ‘‘ Every person carrying on a business by
lease or otherwise * * * shall pay weekly to each employee
the wages earned to a day not more than six days prior to the
date of such payment ’’.

Section 1272 of the Penal Law, in its pertinent parts, provides:
‘« Hach person, copartnership, corporation or joint-stock asso-
ciation carrying on a business by lease or otherwise, who does
not pay the wages of all his or its employees in accordance with
the provisions of the labor law is * * * guilty of a mis-
demeanor ”’,

410 [|
|

The defendant contends that the word ‘‘ weekly ’’ was inserted
in the Labor Law statute because the Legislature intended it
to apply only to wages earned to a day not more than six days
prior to the day of payment and not to any other form of wages,
particularly wages payable in advance. The word ‘‘ weekly ”’
applies to all wages earned. Hence we must determine what
wages include and when wages are deemed earned. We must look
to the terms ‘‘ wages ’’ and ‘‘ earned’’. The statute does not
forbid advance payment of wages. It simply provides that
wages are due and payable weekly as earned. In this case a
definite period was fixed by agreement when vacation pay would
be deemed earned and would be due. It is only at that time that
the word ‘‘ weekly ’’ becomes important. The agreement pro-
vided for the payment to be made in advance of the vacation
for days’ pay earned prior to the date of payment. Even though
the schedule provided for one day paid vacation for a fixed
number of days of work, where the employee agreed that his
vacation pay is to be paid at the commencement of the vacation
period, the employee cannot demand payment of the vacation
pay prior to the time stipulated in the contract. (except when
the employer goes out of business) and the employer has no
obligation to pay it prior to that time, as the wages are accruing
during the course of the year, but are not ‘‘ earned ’’ within the
meaning of section 196 of the Labor Law until the employee
under the terms of the agreement becomes entitled to receive
it. The employer cannot be prosecuted under the statute until
six days after the pay was earned and became due and payable.
The agreement is relied upon by the employer as a defense only
to determine when the wages are earned and due. It is not
relied upon to show good faith or negate any criminal intent.
It is conceded no intent is necessary.

The agreement for accumulation of vacation pay is not a
violation of subdivision 3 of section 196 of the Labor Law.
The employee in this case is not required as a condition of
employment to accept wages at periods other than weekly. Here
the employer, at the request of the employee, was required to
pay for vacations in advance of the vacation period but for days’
pay earned prior thereto. Since the employer went out of busi-
ness before the summer vacation and refused to pay on the

be 411

ground of lack of funds, the due date of the payment of the
vacation pay was accelerated.

Although vacation pay is paid as compensation for services
already rendered, its purpose is to provide for the support of
employees during their vacation. Granted that the statute
should be strictly construed, we cannot escape the fact that
the contemporary, natural and obvious meaning of the term
“‘ wages’? includes vacation pay. Certainly an employer of
average intelligence would not assume it to have any other mean-
ing. The purpose of the statute is to enable employees to
prosecute employers who fail to pay them their wages. There-
fore, we think the employer’s failure to pay the wages to cover
the vacations constitutes a violation of section 1272 of the Penal
Law to the same extent as the failure to pay the weekly wages.

It is conceded that the sanctions imposed by the statutes,
section 1272 of the Penal Law and section 196 of the Labor Law,
were designed to help earners of small wages who needed cash
for their day-to-day living expenses. Since there can be no
question that the wages due for the vacation period were earned,
there is no basis for adopting a construction of the statute
which would limit the sanctions in such a way as to relegate
the wage earner in the event of a failure of the employer to
pay part of the earnings (vacation pay), to a civil suit, while
permitting the use of sanctions of the penal statute for a failure
to pay the remainder of the earnings (weekly wages). When
a basic question of public policy is involved we cannot impute
such a mutually exclusive intent to the Legislature.

The circumstance in this case is a cogent example of the
precise problem the Legislature intended to prevent. The
defendant employer pleaded inability to pay. Inability to pay
the wages earned for vacation cannot be distinguished from an
inability to pay the wages earned day-by-day. The deprivation
of earnings in either case is real. To forestall such losses the
State by statute holds employers to a standard of social justice
in their dealing with workmen. The attainment of the aims
of the statute would be frustrated by other than a reasonable
interpretation.

The construction urged by the defendant is not only technical
put is in conflict with authority.

4l2 be
er}

In Hudson Riv. Tel. Co. v. Watervliet Turnpike G Ry. Co.
(185 N. Y. 393, 408-404) we said: ‘‘ The words of the statute are
to be interpreted according to their natural and obvious mean-
ing, and, as the terms employed are not ambiguous, extrinsic
facts are not available to restrict the authority which it plainly
confers. The language, literally construed, includes undiscov-
ered, as well as existing modes of operation * * *. It would -
be an unjust reflection upon the wisdom and intelligence of the
law-making body to assume that they intended to confine the
scope of the legislation to the present, and to exclude all con-
siderations for the developments of the future.”

In People v. Hines (284 N. Y. 92, 104) this court held that a
defendant may be prosecuted under a gambling statute which
was enacted before a gambling game came into being. It is
not necessary, we said, to ‘‘ re-enact over again the same com-
prehensive statute ’’. By giving words employed in the statute
their ordinary and usual current meaning, we do not make acts,
otherwise innocent and lawful, crimes.

And only recently in Matter of Di Brizzi (Proskauer) (303
N. Y. 206 [1951]), this court upheld the use of a statute (Hxecu-
tive Law, § 62, subd. 8, now § 63, subd. 8) which was originally
enacted a few weeks after our entry into World War I as a
‘* Peace and Safety Act’? (L. 1917, ch. 595), to permit the
creation of a ‘‘ New York State Crime Commission”. __

Finally in People v. Morton (308 N. Y. 96) we specifically
ruled that penal statutes, without necessity of amendment, may,
in view of changes in other statutory law, make criminal, con-
duct which prior to these changes was not proseribed. (Stock
Corporation Law, § 71; Debtor and Creditor Law, § 22.)

We should not apply one rule of construction when property
rights or civil order or public safety are involved and a different
rule of construction when the rights of workmen are involved.
The rule heretofore followed in the cases cited above is clearly
applicable here as section 21 of the Penal Law provides:
“© 8 21. General rules of construction of this chapter. The rule
that a penal statute is to be strictly construed does not apply
to this chapter or any of the provisions thereof, but all such
provisions must be construed according to the fair import of
their terms, to promote justice and effect the objects of the law.’’

The judgment of the Appellate Division should be affirmed.

eee 413

Funp, Froussen and Vaw Vooruis, JJ., concur with Conn, J.*;
Burks, J., dissents in an opinion in which Conway, Ch. J., con-
curs; Dusmonp and Dyz, JJ., taking no part.

Judgments reversed, ete.

In the Matter of the Cuamm or Ancrro Mazasprva, Appellant.
Epwarp Corsi, as Industrial Commissioner, Respondent.

Argued November 21, 1955; decided January 12, 1956.

* Designated pursuant to section 5 of article VI of the State Constitution
in the temporary absence of Desmonp and Dyz, JJ.

414 ee
Ls

William Eldred Jackson, Mary B. Tarcher and George H.
Bailey for appellant. I. The Appellate Division, in holding
that appellant had left his employment voluntarily, erroneously
treated a question of fact as a question of law and, in so doing,
erroneously overruled a contrary factual determination by the
appeal board which was based upon substantial evidence and
made new findings of its own not supported by evidence.
(Matter of Baida, 282 App. Div. 975.) II. The doctrine of
“constructive voluntary quit ’’ is not and should not become
the law of this state. (Copper Range Co. v. Michigan Unem-
ployment Compensation Comm., 320 Mich. 460; MacFarland v.
Unemployment Compensation Bd. of Review, 158 Pa. Superior
Ct. 418.) IIL. Hven if the doctrine of ‘‘ constructive voluntary
quit ’’ be accepted, the Appellate Division failed to consider
and in effect overruled the findings of fact by the appeal board,
supported by the evidence, which showed that the facts of the
ease did not come within the doctrine. (Matter of Fiol [Calmar
S. 8. Corp—Corsi], 305 N. Y. 264; Campbell Soup Co. v.
Board of Review, 13 N. J. 481; Matter of Rumsey Mfg. Corp.
[Corsi], 296 N. ¥. 118; Matter of Hirschberg, 273 App. Div.
936; Matter of Mutual Benevolent Soc. of 1865, 293 N. Y. 901;
Matter of Carroll [New York Military Academy], 288 N. Y.
447.) IV. The Appellate Division’s decision is also based on
findings not made by the appeal board and not substantiated by
the evidence. V. The Appellate Division erred in construing
the 60-day provision of the agreement and, since appellant was
discharged before expiration of the 60-day period, properly
construed, he did not fail to comply with a condition of employ-
ment. (Cole v. Rawlings Ice Co., 139 Neb. 439.)

ee! 45
ee

Jacob K. Javits, Attorney-General (Francis R. Curran and
James O. Moore, Jr., of counsel), for respondent. I. Claimant-
appellant voluntarily left his employment without good cause
under the statute. (Campbell Soup Co. v. Board of Review,
13 N. J. 481.) IL. The Appellate Division decided the case on
the basis of the facts found by the appeal board. It did not
make any new findings, and there is no reason for a remission
of the case to the board for further findings. III. The employ-
ment with Standard and with National constituted one employ-
ment under the labor-management agreement, as found by the
referee and appeal board. (Matter of Technicon Cardiograph
Corp. [Corsi], 285 App. Div. 193.)

Harold H. Levin, Howard Lichtenstein and Norman Gross for
Great Atlantic & Pacific Tea Company, amicus curia, in support
of respondent’s position. I. Section 593 of the Labor Law
should be construed as it was prior to Matter of Baida (282
App. Div. 975) for the reasons stated in a long series of appeal
board decisions and in numerous out-of-state decisions. Such
consistent construction was in effect for a sufficient period to
indicate legislative approval. (Matter of Foscarinis, 284 App.
Div. 476.) IT. If this were a case of first impression, a proper
construction of section 593 would require affirmance of the
decision below. Claimants, who bring about the termination
of their employment by refusing to abide by collective bargain-
ing agreements, should be considered as having voluntarily left
their employment without good cause. (Matter of Palmieri
[Corsi], 276 App. Div. 417; Matter of Hansen [Corsi], 283 App.
Div. 908.) ITI. The employer should not be penalized for com-
pliance with collective bargaining agreements. Union shop
agreements do not violate this state’s public policy. (Plumbers
Union v. Graham, 345 U. 8. 192.)

Fur, J. Angelo Malaspina, an assembly hand, was
employed from April 30 to June 13, 1953, and from Octo-
ber 7 to November 4 of the same year, by the Union
Standard Equipment Company, a partnership, and the National
Equipment Corporation, a corporation. The companies were
under common control and claimant worked throughout both
periods under the direction of the same foreman, doing the
same work, and at the same location. Both concerns were

416 eee
se

designated as ‘‘ the Employer’ in the collective bargaining
agreement made by them with the International Association of
Machinists. It was expressly provided in that agreement
between employer and union that employees were under the
necessity of joining the union within 60 days after they were
hired. In paragraph 4, the parties agreed that ‘‘ each employee
covered by the terms of this agreement, as a condition of employ-
ment, shall become a member of the Union * * * within
sixty days after the date of his employment, and shall remain
a member of the Union * * * in good standing during the
term of this agreement. If any employee covered by the terms
of this agreement fails to become a member of the Union as
above provided or, during the term of this agreement, fails to
pay his periodic dues or the initiation fees uniformly required
by the Union as a condition of acquiring or retaining member-
ship, the Union will give written notice thereof to the Employer;
and if within ten days after the receipt of such notice by the
Employer, such employee has not joined the Union or paid such
dues or initiation fees, he shall be summarily discharged by
the Employer.’’

When Malaspina was first hired, on April 30, 1953, he was
told that it was ‘‘ a union job,’’ that he had ‘‘ a 60-day period —
trial period. After 60 days he must join the union. If he don’t
join the union * * * [within a further period of] ten days,
he must be dismissed.’’ The question of his joining the union
did not arise at that time, since he quit his job after being on
it only 45 days. When rehired, on October 7 of the same year,
he was told that his earlier employment, for 45 days, would
count as part of the 60-day period within which he was required
to join the union. Although he assured the union shop steward
that he would, he paid neither the initiation fee nor the dues
and, at the end of the 60-day trial period and of an extra 10-day
notice period, he was discharged.

It had apparently been agreed between Malaspina and the
shop steward that he might pay the $25 initiation fee in three
installments, the first, of $10, on October 28, the first payday
after the termination of the 60-day period. The shop steward
was not at the factory on that day and Malaspina was absent
from October 29 until November 3. Upon Malaspina’s return
on that day, the steward reminded him that the time had come

—
= —

for him to pay $10, and Malaspina replied that he realized that,
but did not have the money. The employer, notified of Mala-
spina’s failure to join, discharged him, at the union’s request,
on November 4, 1953.

After a claim was filed for benefits to be effective Novem-
ber 4, the Industrial Commissioner made an initial deter-
mination that Malaspina had voluntarily left his employment
without good cause, within the sense of the Unemployment
Insurance Law, and was, accordingly, disqualified for benefits
for a 42-day period following his discharge. The referee,
before whom claimant requested a hearing, overruled that
determination, declaring that ‘‘ Claimant was separated from
his employment because he failed to join the union within the
required time. There was no voluntary leaving of employment
under these conditions.’? The Appeal Board affirmed, but the
Appellate Division reversed, holding that the claimant’s failure
to join the union within the time prescribed constituted a volun-
tary quit of his employment without good cause (285 App. Div.
564).

As is evident, the sole question presented is whether claimant,
within the meaning of section 593 of the Unemployment Insur-
ance Law (Labor Law, art. 18), left his employment ‘“ volun-
tarily’’ and ‘‘ without good cause.’? Insofar as relevant,
section 593 (subd. 1, par. [¢]) provides:

“1, Voluntary separation. In the case of any claimant who
leaves his employment voluntarily * * *

“(¢) if such separation was without good cause, no bene-
fits shall be payable to such claimant, nor shall he be credited
with serving any part of the waiting period until forty-two
consecutive calendar days have elapsed after his registration
for benefits subsequent to such voluntary leaving if there was
no withdrawal from the labor market or until such forty-two
days have elapsed after the certification of his bona-fide
return to the labor market and his availability for employment
if there had been a withdrawal from the labor market.’’

The applicable collective bargaining agreement required that,
within 60 days after being hired, an employee must join the
union, and that, if he fails to do so, the employer must discharge
him. Obviously, by refusing or failing to become a member,

418 ee
ee

the employee brings about his own discharge, and such action or
inaction may not logically or reasonably be regarded as anything
but voluntary on his part. In other words, joining the union
was a condition precedent to continued employment; if, for any
reason, he did not join and was discharged, he must be deemed
to have quit voluntarily. If the rule were otherwise, the collec-
tive bargaining provision insisting upon union membership as
prerequisite to employment would be considerably diluted, if
not destroyed.

Claimant contends that a distinction should be made between
an employee who “‘ wilfully refuses ’’ to join the union and one
who ‘‘ fails ’’ to join within the prescribed period simply because
of financial inability. In the latter case, he urges, the resulting
discharge should not be treated as ‘‘ voluntary.’? It may well
be that a discharge is not to be considered voluntary where the
employee fails to satisfy a condition of employment because of
circumstances beyond his control—for example, where he is
discharged pursuant to a provision in the union contract
requiring dismissal at age 65. (See Campbell Soup Co. v. Board
of Review, Div. of Employment Security, 138 N. J..431.)

In the case before us, however, we are not dealing with a
condition beyond the reasonable reach of the employee. All
that the claimant herein had to do was pay the initiation fee or,
by reason of the special arrangement, a portion of it, by Novem-
ber 4, and he knew that, if he did not become a member of the
union by that date, he would be discharged from his job. Noth-
ing turns upon the circumstance that his shop steward was
absent from work on the day that payment of the stipulated
installment became due or that claimant himself was away for
a few days thereafter. The fact was that three other shop
stewards were in the building on that day and, in any event,
claimant had two days after his return, before the 70 days
expired, in which he could have paid his own steward had he
so elected. His failure to do so, as the Appellate Division
wrote, was ‘‘ quite as ‘voluntary’ an act as most choices
between one course and another ’’, and amounted ‘‘ to an elec-
tion by the employee not to meet a condition of the work ”
(285 App. Div. 564, 565).

There is a final point made by claimant which warrants men-
tion. He argues that the decisions below were erroneous in

eee! 419
ee

treating his two periods of employment, in the spring and fall
of 1953, as one employment for the purpose of computing the
60 days within which he was required to join the union. That
period should have been computed, he contends, from October 7,
when he was rehired by the National Equipment Corporation,
without taking into account the 45 days that he had worked
for the Union Standard Company in May and June. As a
result, the argument goes, the 60 days had not run by the time
of his discharge, he had not failed to comply with a condition
of employment and his discharge, therefore, was not voluntary.

Claimant does not, indeed cannot, challenge the finding that
the corporation, National Equipment, and the partnership,
Union Standard, were under common control and, for present
purposes, constituted one employer. Instead, he suggests that, _
since he voluntarily left Union Standard in June, his subsequent
rehiring by National Equipment was a new and separate
employment. The record before us shows only that he left the
job in June, because of an injury to his back, and that he was
rehired in October. So far as appears, he had no other employ-
ment in the intervening time, and, on this record, there is no
basis for disturbing the finding made by the referee and the
Appeal Board and affirmed by the Appellate Division.

The reason for allowing the worker a waiting period before
he is required to join the union is to give him time to decide
whether he wants to join, for he may not know at the beginning
whether he will like the job or be suited for it. (Cf. 1 Legislative
History of the Labor Management Relations Act, 1947, pp. 300,
867.) When a worker quits before the trial period has run
and then returns after a short time to the same employment,
his knowledge of the job and ability to reach an informed
decision about joining the union is in no way diminished by
his temporary absence and there is no reason to allow him
another and further 60 days in addition to the period he pre-
viously served. Any other conclusion would seriously impair
the efficacy of contracts between employers and labor unions,
particularly in industries where employment is seasonal or job
mobility high, for workers could change jobs at frequent inter-
vals without being required to join the union in any of them.
The 45 days that claimant worked in May and June were,
therefore, correctly considered as part of his 60-day trial period

420 Le
ee

and, since he knowingly failed to join within the required time,
his separation from the job must be considered a voluntary quit.
He was properly disqualified, pursuant to the statute, from
receiving benefits for 42 days thereafter.

The order appealed from should be affirmed, without costs.

Conway, Ch. J., Desmonp, Frousset, Vaw Vooruis and Burxs,
JJ., concur; Dvx, J., taking no part.

Order affirmed.

es
Tue Propis or tHe Starz or New Yorn, Appellant, v. Haren
Lz Granpe, Respondent.
Tur Proris or tan Stars or New Yorx, Appellant, v. Saran
Matonny, Respondent.
Tre Pzopte or ton Stars or New Yorx, Appellant, v. ANNE
Sorisz, Respondent.
Tux Proris or tHe Starz or New Yorx, Appellant, v. Vasriver
Kine, Respondent.
Tae Pzorie or tan Seats or New Yorx, Appellant, v. Dotorzs
Bznper, True Name Dotorzs Brown, Respondent.
Tur Pzorre or tax Stare or New Yorx, Appellant, v. Lois
Brown, Respondent.

Argued October 19, 1955; decided January 12, 1956.

Edward 8. Silver, District Attorney (Aaron Nussbaum of
counsel), for appellant. I. The Appellate Division erred in
reversing the judgment and dismissing the indictment. (People
v. Bellows, 281 N. Y. 67; People v. Scheinman, 295 N. Y. 142;
People v. Potskowski, 298 N. Y. 299; People v. Rudolph, 303
N. ¥. 73; People v. Lee, 308 N. Y. 302.) II. Guilt was estab-
lished beyond a reasonable doubt. III. A fraudulent repre-
sentation may be effected in myriad ways: by acts as well as
by words, by half truths calculated to mislead, by reckless
statements made without knowledge, by silence when there is a
duty to speak, by false impressions as to charitable or benev-
olent purpose. (People v. Gellard, 296 N. Y. 516; People v.
Yarmish, 189 Mise. 1041: People v. Suffern, 242 App. Div.

422 a ;
ee
353; People v. Avery, 254 App. Div. 780, 279 N. Y¥. 601.)
IV. Respondents were properly convicted of the crime of
fraudulently obtaining property for charitable or benevolent
purposes. (People v. Powers, 147 N. Y. 104; Butterworth v.
Keeler, 219 N. ¥. 446; Matter of Roland, 225 App. Div. 118;
Matter of Frasch, 245 N.Y. 174.) V. The conviction of respond-
ents does not in any way offend against constitutional guaran-
tees of freedom of religion. (Davis v. Beason, 133 U. 8. 333;
Reynolds v. United States, 98 U.S. 145; Kedroff v. St. Nicholas
Cathedral, 344 U. S. 94.) VI. Respondents were properly con-
victed of the crime of conspiracy. (People v. Winter, 288 N. Y.
418; People v. Van Tassel, 156 N. Y. 561; People v. Friedlander,
280 N. Y. 487; People v. Miles, 192 N. Y. 541.) VII. The
acquittal of defendant Davis did not bar’a conviction of the
other defendants. (People v. Kuland, 266 N. Y. 1; People v.
Scheppa, 295 N. Y. 359.) VIII. The jurisdiction was properly
laid in Kings County as to each of the respondents. (People v.
Charleton, 157 Misc. 570.) IX. The trial court properly
admitted the statement of defendant Davis into evidence under
proper instructions.

Arnold W. Wallach, Harry Chiert and Bernard Chiert for
respondents. I. The alleged acts on the part of respondents
were not encompassed within the intendment of section 934 of
the Penal Law and said section 934 of the Penal Law should not
be construed to cover the alleged acts on the part of respondents.
(People v. Adamkiewicz, 298 N. Y. 176; Hornstein v. Paramount
Pictures, 292 N. Y. 468; People v. Levy, 283 App. Div. 383.)
II. Section 934 of the Penal Law, as applied to the evidence and
state of facts in this case, is unconstitutional in that it violates
the First Amendment to the United States Constitution, as the
same is incorporated into the Fourteenth Amendment of the
United States Constitution and, as such, deprives respondents
of due process, and that said section 934, as applied, is vague,
ambiguous, indefinite, uncertain and has given respondents no
notice of what acts they would commit, would constitute a viola-
tion of said section. (Cantwell v. Connecticut, 310 U. S. 296;
Everson v. Board of Educ., 330 U. S. 1; Kedroff v. St. Nicho-
las Cathedral, 344 U. S. 94.) IDL. There was no proof of
any conspiracy between respondents. (People v. Winters, 288

P| 423

N. Y. 418; People v. Harris, 294 N. Y. 424; People v. Fried-
lander, 280 N. Y. 487.) IV. Since defendant Davis was
acquitted, respondents should have been acquitted. (People v.
Kuland, 266 N. Y. 1; People v. Scheppa, 295 N. Y. 359.) V. The
court erred in admitting the alleged confessions and state-
ments —that such statements were binding only on the par-
ticular deponent.

Van Voonuts, J. This is an appeal by the People from orders
of the Appellate Division reversing judgments of the Kings
County Court on the law and the facts, which convicted defend-
ants of the crimes of fraudulently obtaining and conspiring to
obtain property for charitable or benevolent purposes in viola-
tion of section 934 of the Penal Law. The indictments were
dismissed by the Appellate Division upon the ground that there
is no evidence that appellants violated the provisions of this
criminal statute. The facts are stated in its opinion as follows:
“« Appellants solicited funds on the streets of New York City
for a period of more than a year, as set forth in the indictment.
The practice was to sit in front of department stores and other
public places and receive coins from the public in a metal cup or
plate held in the lap of each appellant. Each appellant was
dressed in the habit or garb common to nuns or sisters, although
the particular combination of elements of: the attire was not
significant of any particular order or organization. Hach appel-
lant was at all such times in possession of a written certificate
of authority to make collections on behalf of a religious corpora-
tion duly organized under the Religious Corporations Law.
There was evidence that, under an agreement with the corpora-
tion, each appellant delivered $2.50 a day to the pastor of the
eorporation’s church, and retained the remainders of the col-
lected funds as her personal compensation. There was also
evidence of another version of the agreement, which was testified
to at the trial, that each appellant delivered all collected funds
to the pastor and received from him about $10 a week as com-
pensation, the pastor retaining $2.50 a day for his personal
needs and applying remainders to other church purposes.’’

There was evidence authorizing the jury to find the first of
these versions, and by their verdicts of conviction, the jury
found that the agreement between defendants and this religious

424 Le

corporation, known as the New Day Holy Church of God, Inc.,
incorporated in 1945, was that each defendant delivered $2.50 a
day to the pastor (or ‘‘ bishop ’’, as he is termed), and retained
the rest of the collected funds as her personal property.

The question is whether these acts by these defendants, the
facts concerning which are thus established, violated section 934
of the Penal Law. This section reads as follows: ‘‘§ 934.
Fraudulently obtaining property for charitable purposes. A
person, who wilfully, by color or aid of any false token or
writing, or other false pretense, obtains the signature of any
person to any written instrument, or any money or property,
for any alleged or pretended charitable or benevolent purpose,
is punishable by imprisonment for not less than one nor more
than three years, or by a fine to an amount not exceeding the
value of the money or property obtained, or by both.’’

Laying aside whether there was anything fraudulent in these
women dressing themselves to simulate nuns, apart from the
rest of their conduct, it may well be that there would have been
no crime under this section if all of their collections had been
delivered to the pastor for the use of this church, after deducting
a reasonable amount commensurate with their services in
collecting this money.

This church is assumed to be a bona fide religious corporation,
and collections made for its purposes, including payment of
part of the salary of its pastor, would not be in violation of
section 934. We even assume that the $2.50 apiece which the
jury found was paid to the pastor went for religious purposes.
It does not follow from this circumstance, however, that the
conduct of these defendants did not violate section 934 of the
Penal Law. These women were not soliciting funds for any
charitable or benevolent purposes, insofar as their own profit
from the transactions was concerned. The laborer is worthy of
his hire, and if they had merely retained for themselves reason-
able compensation for their services in obtaining these funds,
giving the rest to the church, quite possibly no crime would be
involved. But the main object of this solicitation was defend-
ants’ own emolument; they were not working at a fixed stipend
for this church or even on a commission basis, but they were,
if one may use the phrase, the owners of the equity interest in
this enterprise. They were in business for themselves, collecting

Le} 425
frees

not primarily for the church or for any charitable or benevolent
purpose, but for their own financial gain. As the contributions
increased, these defendants kept the entire excess over $2.50
for their own. They would have been willing to join up with
any religious organization which would lend color to their efforts
to make money by pretending to the public that they were
dedicated to its work, and lived in a state of poverty, chastity
and obedience. All of this adds up to a fraud upon the public.

The question remains whether section 934 of the Penal Law
has been violated, in view of its limitation to the collection of
money for alleged or pretended ‘‘ charitable or benevolent ”
purposes. It is said that these collections, at worst, were for a
pretended religious purpose, and that therefore the acts of
defendants do not fall within the categories of ostensible
‘charitable ’’ or ‘‘ benevolent ’’ undertakings. We think that
these funds were ostensibly being solicited for ‘‘ benevolent ”’
purposes. In Matter of Rockefeller (177 App. Div. 786, 791),
the Appellate Division said: ‘In its popular acceptation a
charitable corporation is one that freely and voluntarily minis-
ters to the physical needs of those pecuniarily unable to secure
for themselves, while a benevolent corporation is one that
ministers to all, and the purpose may be anything that promotes
the mental, physical or spiritual welfare of man.’’

It would be superfiuous to cite the numerous decisions upon
the subject of charitable trusts. Without considering the situa-
tion respecting other religions, Christianity is founded upon the
concept of the fatherhood of a benevolent God and the brother-
hood of man under the golden rule. This church purports to
be a Christian church, and it can hardly be said that the objects
of such an organization are so limited or selfish in character as
to deny that its prime concern is for the spiritual health and
welfare of mankind. It would be a contradiction in terms to
hold that the object of the Christian religion, in its broadest
connotation, is not ‘‘ benevolent ’’.

The orders of the Appellate Division should be reversed, and
a new trial ordered.

Conway, Ch. J., Desmonp, Fuup, Fromssun and Burxz, JJ.,
concur; Dyx, J., taking no part.

Orders reversed, etc.

Tun Ports or tHE Starz or New Yorks, Appellant, v. Huwry
Horowrrz and Transsroox Tuzaraus, Inc., Respondents.

Argued November 17, 1955; decided January 12, 1956.

Edward 8S. Silver, District Attorney (David Diamond of
counsel), for appellant. I. The courts below erred in holding
that this contract is a license and not a lease. (Brookhaven
Rialto Theatre Corp. v. Feiger, 268 App. Div. 1042; Mehlman v.
Atlantic Amusement Co., 65 Misc. 25; Meers v. Munsch-Prote-

Le 427

mann Co., 217 App. Div. 541.) IL. Defendants’ acts constituted
larceny regardless of whether this contract was a lease or
license. (Mallory Associates v. Barving Realty Co., 300 N. Y.
297.) III. The mingling of the security funds with defendants’
own money, as well as its diversion from the agreed specific
purpose, constituted larceny as charged. (People ex rel. Bellect
v. Klinger, 164 Mise. 530; People v. Klinger, 165 Mise. 634;
2710 8th Ave. v. Forman Pharmacy, 180 Mise. 376.)

Harold Dublirer for respondents. I. The ‘‘ advance com-
missions ’’ created a debtor-creditor relation. The agreement
involved here does not come within section 233 of the Real Prop-
erty Law. No crime was committed. (People v. Northwest
Fifth Ave. & 27th St. Corp., 145 Mise. 778, 239 App. Div. 773;
Mallory Associates v. Barving Realty Co., 300 N. Y. 297.)
II. Section 233 of the Real Property Law is applicable only
to leases not to licenses. (Planetary Recreations v. Kerns, 184
Mise. 340; Halpern v. Silver, 187 Misc. 1023; Wash-O-Matic
Laundry Co. v. 621 Lefferts Ave. Corp., 191 Misc. 884; Muller
v. Concourse Investors, 201 Mise. 340; Greenbro Coin Meter
Corp. v. Basch, 205 Misc. 853; Reynolds v. Van Beuren, 155
N. Y. 120; Stockham v. Borough Bill Posting Co., 144 App. Div.
642; Reeve v. Duryee, 144 App. Div. 647; United Merchants’
Realty & Improvement Co. v. New York Hippodrome, 133 App.
Div. 582, 201 N. Y. 601.) III. A concessionaire does not have
the ‘use’? of ‘‘real property’. (Layton v. Namm & Sons,
275 App. Div. 246, 302 N. Y. 720; Kaypar Corp. v. Fosterport
Realty Corp., 1 Mise 2d 469, 272 App. Div. 878, 298 N. Y. 1036;
Isaacson v. Ken Drug Corp., 195 Misc. 246; Schusterman v.
C & F Caterers, 192 Mise. 564.) IV. The agreement involved
here is a license not a lease.

Van Vooruis, J. Defendants were indicted for grand larceny,
first degree, for misappropriating funds deposited by a conces-
sionaire ‘“‘as advance rental and security for the full and
faithful performance ’’ of a five-year agreement whereby the
concessionaire contracted to install and maintain stands and
vending machinery in two moving picture theatres for the sale
of cigarettes, nonalcoholic beverages, ice cream and other
confections. These theatres were operated by defendant
Transbrook Theatres, Inc., of which defendant Horowitz was

428 Le
ese

president. Both theatres closed their doors at the end of August,
1953, when the agreement was only three months old. These
defendants failed to repay to the concessionaire a balance of
$5,206.01 due on account of this deposit.

Prior to the adoption of section 233 of the Real Property
Law (L. 1935, ch. 581), if a landlord spent money deposited by
a tenant as security for the performance of covenants under a
lease, the relationship was held to be simply that of debtor and
creditor, and the ill-starred tenant could only insist upon a
personal obligation of the landlord which usually proved to be
of little value if the landlord became insolvent (Mallory Asso-
ciates v. Barving Realty Co., 300 N. Y. 297, 299-300; Mendelson-
Silverman v. Malco Trading Corp., 262 N. Y. 621; Malco
Trading Corp. v. Mendelson-Silverman, 240 App. Div. 322, affd.
264 N. Y. 651; Rambach v. Heights Theatres, 239 App. Div.
203; Jahmes Co. v. Propper, 238 App. Div. 326; Levinson v.
Shapiro, 238 App. Div. 158). This section of the Real Prop-
erty Law, unless otherwise provided in the lease, causes such a
deposit to become a trust fund, remaining the property of the
tenant although in the custody of the landlord, until applied
against defaulted covenants in the lease, which has the double
consequence of enabling the tenant to repossess himself of the
deposit in spite of the insolvency of the landlord, if the moneys
are on hand, and, likewise, of rendering the landlord subject
to criminal prosecution if meanwhile he has appropriated the
fund to his own use.

There may be no essential reason on account of which the
Legislature might not similarly have protected a deposit of
security by a licensee. Section 233 of the Real Property Law,
however, creates this fiduciary status only in the case of con-
tracts ‘‘ for the use or rental of real property ’’. That expres-
sion is well understood, and imports the ordinary landlord and
tenant relationship involving transfer of possession of desig-
nated space in real estate. In the present instance, exclusive
possession of no defined portions of these theatres is demised
to the concessionaire, nor does the contract so much as specify
where these stands and automatic dispensers are to be located
in the theatres, and the concessionaire is allowed to hawk and
peddle its wares anywhere in these motion picture houses. As
in the case of washing machines in an apartment house, the

PF 429
isd

concessionaire ‘‘ has no ownership of the space allotted to its
equipment in the sense that usually obtains in the relationship of
landlord and tenant.”? (Kaypar Corp. v. Fosterport Realty
Corp., 1 Mise 2d 469, 471, affd. without opinion 272 App. Div.
878, motion for leave to appeal denied 297 N. Y. 1036.) It was
said in Reynolds v. Van Beuren (155 N. Y. 120, 123): ‘‘ While
this paper is called a lease it is manifestly nothing more than a
mere license by the tenant in possession to the defendants to
go upon the roof of the building and place advertisements
upon the sign.’? The same principle applies to this vending
concession in these theatres.

This kind of concession, regardless of whether the contract
describes the parties as landlord and tenant, does not create
that relationship in law in the absence of a demise of space in
a building. It has been held not to be a license of a ‘‘ rent-
able area ”’ within the scope of the emergency rent laws (Layton
v. Namm & Sons, 275 App. Div. 246, affd. without opinion 302
N. Y. 720).

It has been held frequently at Special Term that concessions
such as this do not partake of the nature of the conventional
type of lease (Planetary Recreations v. Kerns, 184 Misc. 340;
Halpern v. Silver, 187 Misc. 1023; Wash-O-Matic Laundry Co.
v. 621 Lefferts Ave. Corp., 191 Misc. 884; Muller v. Concourse
Investors, 201 Mise. 340; Greenbro Coin Meter Corp. v. Basch,
205 Mise. 853).

The order appealed from should be affirmed.

Conway, Ch. J., Desmonp, Futp, Froussen and Burgs, JJ.,
concur; Dyz, J., taking no part.

Order affirmed.
be

Tu Puopis or run Stare or New Yors, Respondent, v.
Larry J. Moss, Appellant.

Argued November 16, 1955; decided January 12, 1956.

W. Bartlett Sumner and Thomas L. Newton for appellant.
I. It was reversible error for the court to deny with exception
defendant’s motion to dismiss the information made at the
close of all the evidence. (People v. Gould, 306 N. Y. 352.)
II. There is insufficient credible evidence to support the viola-
tion in that the sole witness for the prosecution, on her own
testimony, is unworthy of belief. III. The charges involved
here are quasi-criminal. (Commissioner of Public Welfare of
City of N. Y. v. Kotel, 256 App. Div. 352; Commissioner of
Public Welfare of City of N.Y. v. Ryan, 238 App. Div. 607;
People v. Johnaken, 196 Mise. 1059.)

Le 431
beeen

John F. Dwyer, District Attorney (Robert A. Burrell of
counsel), for respondent. I. The information before the trial
court was sufficient and the court properly denied a motion to
dismiss the information on the grounds that it was defective.
(People v. Gould, 306 N. Y. 352.) IL. The evidence given upon
the trial was sufficient to support a finding of guilty of a viola-
tion of section 887 (subd. 4, par. [d]) of the Code of Criminal
Procedure.

Frozssen, J. Defendant was convicted of ‘‘ vagrancy ’’ under
section 887 (subd. 4, par. [d]) of the Code of Criminal Pro-
cedure, and sentenced to six months in the county penitentiary.
The information charged that he induced, enticed or procured
the complainant to commit sexual intercourse and other lewd
and indecent acts with him in his home in Buffalo. The Supreme
Court, which heard the appeal, assuming that complainant was
‘apparently a willing participant in the immoral acts ’’ and
“an accomplice ’’, nevertheless affirmed the conviction.

The sole witness was the complainant, who was over twenty
years of age. She was defendant’s housekeeper for about a
month, and admitted that she was a willing participant in the
acts at least at the beginning of their occurrence. Later, she
said, she became “ afraid of him’’, but did not leave because
defendant had not told her she ‘‘ could quit the job any time ”’,
and while he was in the hospital she had to stay because ‘‘ he
told me to answer the ’phones ’’.

Accepting the factual findings below, as we must, we are of
the opinion that they do not support a conviction under the
statute. Section 887 of the Code of Criminal Procedure, in its
various subdivisions other than subdivision 4, deals generally
with unemployed persons without visible means of support;
habitual drunkards who, among other things, neglect their
families; beggars; tramps; persons disguised; truants; certain
loiterers who have criminal records; and defines them as
vagrants.

Subdivision 4 itself consists of seven subparagraphs. With
respect to six of them, it is only necessary to make the following
brief observations as to whom it defines as vagrants: a person
(a) “ who offers to commit prostitution ’’; (b) ‘‘ who offers or
offers to secure another ’’ for prostitution or other lewd or

432 a
Le

indecent acts; (c) who ‘ loiters ’’ for prostitution or pandering
purposes; (e) who receives or keeps any person in a place of
assignation; (f) who aids or abets ‘‘ in the doing of any of the
acts or things enumerated ’’ in subdivision 4; and (g) a ‘‘ com-
mon prostitute ’’ without lawful employment.

Paragraph (d) of subdivision 4 defines as a vagrant a person
“who in any manner induces, entices or procures a person who
is in any thoroughfare or public or private place, to commit any
such acts’, Thus this paragraph, upon which defendant’s con-
viction rests, is interjacent to (c) dealing with loitering pimps
and prostitutes and (e) aimed at the keepers of houses of prosti-
tution. As we read paragraph (d), it seeks to strike at still
another despicable participant in this ancient vice— the
organizer or instigator who remains behind and above the pimps
and prostitutes he enlists; it is he who is the ‘‘ person * *
who * * * induces, entices or procures ’’ (a) a person to
serve as a prostitute, (b) another to function as a pimp, and
(¢) a prostitute or pimp to loiter about as a solicitor for
lewdness or prostitution.

However reprehensible may be the acts here complained of,
they are not such as are sought to be reached by section 887
(subd. 4, par. [d]). This statute, as we said in People v. Gould
(306 N. Y. 352, 354), ‘‘ condemns various aspects and incidents
of pandering and prostitution’. Section 889-a of the Code of
Criminal Procedure would also indicate that the Legislature
regarded subdivision 4 as a general prostitution statute.

It is fundamental that the bare testimony of a complainant —
here a young woman intelligent enough to have been graduated
from high school at the age of seventeen, who participated in
sexual relations with defendant voluntarily at least for a time —
could not have supported, without corroboration, a conviction
of any crime derived from such relations as, e.g., adultery, a
misdemeanor (Penal Law, §§ 100, 103), rape, a felony (Penal
Law, §§ 2010, 2013), or even sodomy, also a felony (Penal Law,
§§ 690, 691; see Code Crim. Pro., § 399). It is therefore
unreasonable to assume that where the available proof is insuffi-
cient for a conviction of any of these crimes, the Legislature
intended that a defendant may nevertheless be punitively dealt
with under section 887 (subd. 4, par. [d]) to the extent of

Le 433

imprisonment as long as three years (Code Crim. Pro., § 891-a)
for the same act though under a different name.

While section 887 defines vagrants and makes vagrancy a
public offense rather than a crime within the definition of
section 2 of the Penal Law, it ‘‘ has all the characteristics of
criminal procedure and a conviction eventuates in a penal
judgment and execution * * * ‘ Proceedings against va-
grants * * * are as essentially punitive as any sentence
imposed for crime’’’ (People ex rel. Stolofsky v. Superin-
tendent, 259 N. Y. 115, 117-118). If the Legislature chooses to
make the misconduct complained of here-—where the sole evi-
dence of privately committed acts is the testimony of an accom-
plice —a public offense or a crime, under whatever name, it
should do so expressly. .

The judgment appealed from should be reversed and the
information dismissed.

Conway, Ch. J., Desmonp, Futp, Van Vooruis and Burks, JJ.,
concur ; Dys, J., taking no part.

Judgments reversed, ete.

Tux Ports or ran Stare or New Yorn, Appellant, v.
Maver Levensrern, Respondent.

Submitted November 17, 1955; decided January 12, 1956,

434 Le
be

Charles E. Bowers, District Attorney (R. W. Daniels of
counsel), for appellant. I. The order of the City Court sustain-
ing the demurrer and dismissing the indictment was appealable
by the People to the County Court. (People v. Hatzis, 297 N. Y.
163; People v. Hammerstein, 150 App. Div. 212, 155 App. Div.
204, 211 N. Y. 552; People v. Firth, 157 App. Div. 492; People v.
Pearl, 272 App. Div. 563; People v. Walsh, 172 App. Div. 266;
People v. Flaherty, 206 App. Div. 733; People v. Oliver, 214
App. Div. 804; People v. Young, 264 App. Div. 747; People v.
Siciliano, 185 Mise. 149.)

Sanders D. Heller for respondent. The order of the City
Court sustaining the demurrer and dismissing the information
is not appealable by the People to the County Court. (People
vy. Zerillo, 200 N. Y¥. 443; People v. Reed, 276 N. Y. 5; People v.
Gersewitz, 294 N. Y. 163.)

Frozsser, J. The City Court of the City of Ogdensburg,
St. Lawrence County, sustained a demurrer and dismissed an
information charging defendant with a violation of section 1272
of the Penal Law (failing to pay wages). On appeal to the
County Court the appeal was in effect dismissed on the ground
that there is no statutory right of appeal, under section 518 of
the Code of Criminal Procedure, from such an order. Leave
to appeal was granted by a Justice of the Appellate Division,
Third Department, who submitted the following question:
“1, Was the order of the City Court of the City of Ogdensburg
sustaining the defendant’s demurrer and dismissing the infor-
mation appealable by the People to the St. Lawrence County
Court???”

Le 435
re

The City Court here functioned as a court of special sessions,
as it was authorized to do by chapter 381 of the Laws of 1927
(§ 5, as amd. by L. 1953, ch. 583). Section 750 of the Code
of Criminal Procedure (as amd. by L. 1954, ch. 806) provides
that ‘‘ An appeal may be taken as provided by sections five
hundred seventeen through five hundred twenty?’ (emphasis
supplied). Prior to 1954, the italicized words read ‘ section
five hundred and twenty’’ only. Thus the 1954 amendment
specifically made the provisions of section 518 dealing with
appeals by the People and sections 517, 519 and 520 applicable
to appeals from courts of special sessions. Section 518 author-
izes an appeal from ‘‘a judgment for the defendant, on a
demurrer to the indictment’? (emphasis supplied). The prin-
cipal question presented on this appeal, therefore, is the nar-
row one of statutory construction: whether the word ‘ indict-
ment ’’ as used in section 518 also means information where
appeals from courts of special sessions are involved.

We think it does. By expressly incorporating section 518
into section 750 in 1954, the Legislature must have so intended;
otherwise this amendment would have been meaningless, par-
ticularly as to subdivisions 1 and 3, since cases in courts of
special sessions proceed by way of information rather than
by indictment (Code Crim. Pro., see § 4, subd. 4; §§ 222, 59,
742). Despite the fact that the Judicial Council had also recom-
mended that subdivisions 1 and 3 of section 518 be amended
to include the word ‘“ information ’’ because of ‘‘ some doubt ’’
as to the law (Nineteenth Annual Report of N. Y. Judicial
Council, 1953, pp. 226, 240), the Legislature apparently did not
think it necessary since, by its incorporation of section 518 into
section 750, it was granting the People the right to appeal from
orders sustaining demurrers in courts of special sessions. This
construction ‘‘ not only serves to harmonize the several provi-
sions of the section but also promotes the presumed purpose
of the Legislature to maintain uniformity of procedure in crimi-
nal cases.’? (People v. Hateis, 297 N. Y. 163, 164.)

In a somewhat analogous situation involving an information
in the Court of Special Sessions in the City of New York, the
Appellate Division held that an appeal under section 518 by
the People would lie by virtue of subdivision 4 of section 31
of the then Inferior Criminal Courts Act of that city, and we

436 be

affirmed (People v. Hammerstein, 150 App. Div. 212, 214; 155
App. Div. 204, 206, affd. 211 N. Y. 552; see, also, People v. Pearl,
272 App. Div. 563; People v. Firth, 157 App. Div. 492). In
People v. Nelson (298 N. Y. 272), even before the 1954 amend-
ment of section 750 of the Code of Criminal Procedure, this
court took jurisdiction of an appeal by the People from an
order which affirmed an order of the Rochester City Court,
Criminal Branch, dismissing an information.

It follows that the County Court and this court have power
to hear this appeal under sections 518 and 519 respectively of
the Code of Criminal Procedure by the express provisions of
section 750.

The order appealed from should be reversed, and the matter
remitted to the County Court for determination on the merits.

Conway, Ch. J., Drsmonn, Funp, Van Vooruis and Burxs,
JJ., concur ; Dys, J., taking no part.
Order reversed and matter remitted to the County Court for
further proceedings in accordance with the opinion herein.
es
Risa B. Guassman, Appellant, v. Jacos Guassman, Defend-
ant, and New York State Employees’ Retirement System,
Respondent.

Submitted October 10, 1955; decided January 12, 1956.

Po 437
na es FC

Joseph B. Franklin for appellant. I. The complaint states a
cause of action against both defendants. II. The judgment
of the Appellate Division and the order of Special Term
deprived plaintiff-appellant of any adequate remedy. (Staten
Is, Edison Corp. v. Maltbie, 296 N. Y. 874; New York Foreign
Trade Zone Operators v. State Auth., 285 N. Y. 272.)

Jacob K. Javits, Attorney-General (Abe Wagman, James O.
Moore, Jr., and William Alpert of counsel), for respondent.
I, The Retirement System is an agency through which the state

438° Le
ee

performs an integral government function. Fundamental prin-
ciples establish its immunity from this suit in the Supreme
Court for affirmative and coercive relief and the rendition of
a money judgment against it. (Samuel Adler, Inc., v. Noyes,
285 N. Y. 34; Breen v. Mortgage Comm., 285 N. Y. 425; Niagara
Falls Power Co. v. White, 292 N. Y. 472; Psaty v. Duryea, 306
N. Y. 413; Matter of Mahon v. Board of Educ., 171 N. Y. 263;
New York City Employees’ Retirement System v. Eliot, 267
N. Y. 193; General Mut. Ins. Co. v. Coyle, 207 Misc. 362; Matter
of Hicka, 180 Misc. 173; Arkansas v. Texas, 346 U. S. 368;
Kansas City Bridge Co. v. Alabama State Bridge Corp., 59 F.
2d 48, 287 U.S. 644; People ea rel. Buffalo & Fort Erie Public
Bridge Auth. v. Davis, 277 N. Y. 292; Sunlit Gardens v.
Moore, 183 Misc. 343.) II. The immunity of the state and its
agencies is not in any way affected by the question of whether
or not plaintiff has any other remedy. (Buckles v. State of
New York, 221 N. Y. 418; Staten Is. Edison Corp. v. Maltbie,
296 N. Y. 874; Reagan v. Farmers’ Loan & Trust Co., 154 U. 8.
362; Atlantic Coast Line R. Co. v. Public Service Comm., 77 F.
Supp. 675; New York Foreign Trade Zone Operators v. State
Lig. Auth., 285 N. Y. 272.)

Fut, J. The complaint before us, predicated on section 273
of the Debtor and Creditor Law, charges that defendant Jacob
Glassman transferred a sum of money to the New York
State Employees’ Retirement System, also named as a defend-
ant, with intent to defraud plaintiff, his wife, and to prevent
her from collecting certain amounts due her on judgments which
she had previously obtained against him. In this suit, brought
in the Supreme Court, she seeks a judgment setting aside that
transfer as fraudulent and void as to her so that she may receive
from the fund transferred the amount of her judgments. Upon
motion by the Retirement System, the court at Special Term
dismissed the complaint as to that defendant, on the ground
that the System, exercising a governmental function of the state,
is immune from suit in the Supreme Court, and the Appellate
Division unanimously affirmed.

The appeal is here by our leave to permit decision of a ques-
tion, a very narrow and limited one, never before considered
or passed upon by this court.

Le | 439
eee}

According to the complaint, plaintiff entered into a separation
agreement with her husband in May of 1953, whereby he agreed
to pay her $100 a month for her support and maintenance. He
made two payments and then failed to make any others. Plain-
tiff thereupon brought several actions to recover the install-
ments as they became due and recovered judgments against him
for such installments totaling a trifle over $1,000. In the course
of the supplementary proceedings that followed, it was discov-
ered that Glassman, an employee of the State of New York and
a member of the Retirement System, had recently received
$2,627.22 from the sale of securities and had deposited that sum
with the Retirement System ‘‘ to be credited to his account.’’

The complaint then goes on to allege, first, that the transfer
was fraudulent and void as to plaintiff, that it was made by
Glassman ‘‘ without any consideration and with the sole intent
to hinder the plaintiff in collecting the judgments heretofore
obtained against * * * Glassman ’’ and, second, that Glass-
man was insolvent or on the brink of insolvency and that ‘‘ the
transfer of the funds ’’, constituting his only tangible assets,
“was made with the intent and for the sole purpose of making
it impossible for this plaintiff to collect the amount due her
and to prevent and delay * * * [her] from collecting the
judgments ’’ previously obtained.

The relief prayed is that the transfer to the Retirement Sys-
tem be declared fraudulent and a nullity as to plaintiff; that |
the funds be declared the property of Glassman and that the
Retirement System act as trustee; and that Glassman and the
Retirement System ‘‘ be directed to turn over ”’ to plaintiff the
sum of $1,000.50, the amount of the aforesaid judgments in
favor of plaintiff against her husband.

Section 273 of the Debtor and Creditor Law provides that
«« Every conveyance made and every obligation incurred by a
person who is or will be thereby rendered insolvent is fraudu-
lent as to creditors without regard to his actual intent if the
conveyance is made or the obligation is incurred without a fair
eonsideration.’’ Apart from the problem as to the court’s
jurisdiction, there is no doubt that the complaint states a good
cause of action to set aside and annul the conveyance, at least
to the extent necessary to satisfy plaintiff’s claim. (Debtor and
Creditor Law, § 278; see Hearn 45 St. Corp. v. Jano, 283 N. Y.

440 ee
ee
139; Society Milion Athena v. National Bank of Greece, 281
N. Y. 282, 293.) The only question for decision, therefore, is
whether the Supreme Court lacked jurisdiction over the Retire-
ment System and the subject matter of the action, as the lower
courts have held, because this is, in effect, a suit against the
state.

The doctrine of sovereign immunity from suit, rooted in the
ancient common law, was originally based on the monarchical,
semireligious tenet that ‘‘ the King can do no wrong’’. (See
Borchard, Government Liability in Tort, 34 Yale L. J. 1, 2;
Borchard, Governmental Responsibility in Tort, 36 Yale L. J.
1,17-41.) In modern times, it is more often explained as a rule
of social policy, which protects the state against burdensome
interference with the performance of its governmental functions
and preserves its control over state funds, property and instru-
mentalities. (See United States v. Lee, 106 U. S. 196, 206; see,
also, Block, Suits against Public Officers and the Sovereign
Immunity Doctrine, 59 Harv. L. Rev. 1060, 1061.) The immunity
extends as well to officers and agencies of the state engaged in
carrying on its governmental functions, and a suit against
such an officer or agency is regarded as one against the state
itself. (See, eg., Psaty v. Duryea, 306 N. Y. 413; Breen v.
Mortgage Comm., 285 N. Y. 425, 429-430; Volk v. City of New
York, 284 N. Y. 279, 285-287.) Most states today provide some
remedy whereby individuals with claims against the govern-
ment may seek redress (see Claims against the State in Minne-
sota: Report of the Subcommittee on Immunity of the State
from Suit, 32 Minn. L. Rev. 539, 545-556) and, in New York,
the method has taken the form of a legislative waiver of the
state’s ‘‘ immunity from liability ’’ in section 8 of the Court
of Claims Act. The suits to which the state has thereby con-
sented, however, must be brought in the Court of Claims and
in accordance with the procedure outlined in the Act governing
that court. ,

Little argument is required to demonstrate that the Retire-
ment System is the kind of state instrumentality that is clothed
with the sovereign immunity of the state. It is engaged in an
important governmental function, and providing retirement
pensions, annuities and other employment benefits for its per-
sonnel, comparable to those received by the employees of private

Le 441
ee

industry, certainly assists and promotes the efficient operation
of the affairs of the state itself. The close relationship between
the Retirement System and the state government is apparent
throughout the Civil Service Law provisions which create and
govern the affairs of the System. Thus, the State Comptroller
is made its administrative head and trustee of its several funds
(§§ 52, 70, subd. b), the Attorney-General, its legal adviser
(§ 58), and custody of its funds is placed in the charge of the
Department of Taxation and Finance (§ 70, subd. d). The
state, as an employer of members of the Retirement System, is
obligated for the maintenance of various reserves and funds of
the System, as well as for its expenses and the payment of all
employee benefits (§ 67).

Indeed, plaintiff’s brief presents no direct challenge to the
System’s status as a state agency. Instead, she urges that
immunity should be denied the System because, first, she has
no other remedy, since the Court of Claims would have no juris-
diction over either an equitable action of this kind (cf. Psaty v.

. Duryea, supra, 306 N. Y. 418, 416-417) or the person of the

individual defendant and, second, the System enjoys the powers
and privileges of a corporation and, therefore, ‘‘ must also
accept the responsibilities of a corporation ’’ and be amenable
to the jurisdiction of a court of equity. In our view, neither of
these contentions can assist plaintiff; the immunity of a state
agency is in no way affected by the lack of any other remedy
(see Psaty v. Duryea, supra, 306 N. Y. 413, 419-420; Buckles v.
State of New York, 221 N. Y. 418, 423-424) or by the fact that
the agency is endowed with the powers and privileges of a
corporation. (See, e.g., Breen v. Mortgage Comm., supra, 285
N. Y. 425, 480; Matter of Hicka, 180 Mise. 173, 175-176;
Arkansas v. Texas, 346 U. S. 368, 370.)

Consequently, if the status of the Retirement System as an
agency of the state, clothed with its sovereign immunity, were
the only question in the case, an affirmance would necessarily
follow. The conclusion that it is such an agency, however, only
equates its position with that of the state, so that a suit against
it would be deemed one against the state. The question still
remains whether the present suit is one against the agency, and,
by that token, against the state. The answer must be in the
negative.

442 |
ee

This is not the ordinary case of an individual who seeks
recovery, out of the funds of the state or its agency, for a
wrong it has done him. Plaintiff is here suing to have set
aside a conveyance made by her husband to the Retirement
System which is condemned by a positive statute of this state
as fraudulent of her rights as a creditor (Debtor and Creditor
Law, §§ 273, 278). The real controversy is between plaintiff
and her husband. The transfer of his funds under the circum-
stances alleged is, the statute declares, of no effect insofar as
the creditor is concerned; the nature of the creditor’s recovery
in such an action, this court has said, is to levy upon property
‘‘ which he is entitled to treat as belonging to the debtor, albeit
the title is ostensibly lodged elsewhere.’’ (Hearn 45 St. Corp.
v. Jano, supra, 283 N. Y. 139, 142.) So, in this case, title to
the transferred funds is only ‘‘ ostensibly lodged’’ in the
System, and plaintiff is entitled to treat those funds as belonging
to her husband.

The Retirement System, then, is not in any sense the real or
primary defendant; it is in the case solely because the procedure
for setting aside the fraudulent transfer requires that it be
joined as a necessary party. The real defendant, the only one
against whom an obligation is asserted by reason of alleged
wrongful acts or conduct, is plaintiff’s husband.

Moreover, the only parties who stand to lose or gain anything
as a result of the litigation are plaintiff and defendant Glassman.
If she prevails, she will be able to satisfy her judgments out of
the assets of her husband; if not, they will remain secure in his
account with the Retirement System, to be returned to him
some day in the form of retirement benefits. In a sense, the
System is in a position not unlike that of an innocent stake-
holder, with nothing to lose or gain. Although the purpose of
the transfer does not appear from the complaint, such a Jump
sum deposit as the husband made may be used only to obtain
additional credit for prior service in certain specified employ-
ments (§ 60) or to secure additional benefits under the 55-year-
old retirement plan (§ 86). If the System retains the funds, it
is obligated for their eventual return to defendant, or the return
of an equivalent sum, in one or another of these forms; if it
‘loses’? those funds in this action, it is relieved of that
obligation.

De 443
=e

The situation is the same as if Glassman had fraudulently
deposited all his assets with a bank or insurance company. It
is precisely such ‘‘ efforts on the part of a debtor to elude pay-
ment ’’ of his creditors that the legislation condemns. (Hearn
45 St. Corp. v. Jano, supra, 283 N. Y. 139, 142.) It would be
egregiously unfair to allow him to succeed and circumvent the
statute merely because he chose the Retirement System as his
depository. Certainly, no sound or valid reason, no rule of
policy, requires such a result, and the principles of sovereign
immunity should not, and fortunately do not, necessitate it.

Whether a suit is against the state is not determined solely
by looking at the parties named, but depends also upon the
nature of the litigation, the relief sought and the way in which
it affects the state. ‘‘It is well settled’’, it has been said
(Ea Parte Fitepatrick, 171 Ind. 557, 560), ‘‘ that not every suit
against an officer of the State is a suit against the State. A suit
against an officer in which the State has no pecuniary interest,
or substantive right to protect, is not a suit against the State.’’
In order for the doctrine to apply and immunity to attach,
“«<the relief asked must involve some direct or substantial
interest of the state’’’. (Lefebvre v. Somersworth Shoe Co.,
93 N. H. 354, 357; see Morrill v. American Reserve Bond Co.,
151 F. 305, 308-310; Ha Parte State, 245 Ala. 193; Fidelity &
Deposit Co. v. Shaid, 103 W. Va. 482; cf. Commercial Union
Ins. Co. v. Connolly, 183 Minn. 1.) Thus, even though the doc-
trine of sovereign immunity bars suits against the state and
its agencies alike, that doctrine will not be applied where the
state or governmental unit, although named as a defendant, is
not an actual or interested adverse party.

In Fidelity & Deposit Co. v. Shaid (supra, 103 W. Va. 482), for
instance, one Shaid wrongfully converted certain construction
materials and equipment which the State Road Commission had
previously appropriated under the terms of a contractor’s boud.
According to those provisions, the appropriated property was
to be used by the Commission to reduce the liability of the surety
on the bond, the Fidelity & Deposit Co. The latter instituted
suit against both the State Commission and Shaid, requesting
that the suit threatened by the Commission be stayed until
plaintiff’s equities be ascertained, that Shaid be required to
account for the material taken by him and that the value thereof

444 |
se

be treated as a fund applicable to the claim of the Commission
against plaintiff. The court upheld the complaint, despite
explicit provision of the Constitution of West Virginia ‘‘ that
the State shall never be made defendant in any court of law
or equity ’’ (p. 438). In reaching its conclusion and in declining
to apply the doctrine of immunity, the Supreme Court of
Appeals declared that ‘‘ The real defendant is Shaid, for he will
be the only person who will be required to pay, if the averments
of fact be true. No money judgment is sought against the
Commission. Its relation to the property involved is in the
nature of that of a trustee, holding the property or its value
for the benefit of the surety ’’ (p. 439).

And in Morrill v. American Reserve Bond Co. (supra, 151 F.
305), the defendant corporation had deposited various bonds and
mortgages with the state treasurer of Missouri pursuant to a
statute requiring such a deposit as security for repayment of
the bondholders of the corporation. Upon the corporation’s
insolvency, some of its bondholders brought an action to have
these securities turned over to the receiver of the corporation,
to be applied to the satisfaction of their claims. The state treas-
urer, joined as a defendant, opposed the proceeding on the
ground that it was a suit against the state, prohibited by the
Eleventh Amendment to the Federal Constitution. The court
held that the suit was not against the state and directed that
the securities be delivered to the receiver. ‘‘ Neither the state
nor the State Treasurer ’’, wrote the court, ‘“‘ has any interest
in the trust property or in the event of this proceeding. No dis-
position of it can entail either loss or gain upon the state or
upon any of its officers. The only parties to it who have any
right to or interest in the suit itself, or in the trust property
which is its subject, are the defendant corporations and their
creditors. * * * Itis not, therefore, a suit against the state,
and it falls far without the ban of article 11 of the amendments
to the Constitution ’’ (p. 310).

So, in the case before us, ‘‘ no disposition of it can entail
either loss or gain upon ”’ the state agency, since the only parties
who have any interest in the suit, or in the property involved,
are plaintiff and defendant Glassman. The Retirement System
holds the funds in a quasi-trust capacity, for section 273 of the
Debtor and Creditor Law stamps them funds of the debtor

| 445
ee}

husband upon which plaintiff may levy in satisfaction of her
judgments. It is Glassman whose wrongful acts form the basis
of the action and who will be required to pay if plaintiff prevails.
The fact that a money judgment is sought against the state
agency is of no consequence; it is merely a shorthand way of
describing the total relief to which plaintiff is entitled. The
actual effect of this suit is to set aside the fraudulent convey-
ance, thereby returning the ownership of the funds to the indi-
vidual defendant, and plaintiff’s recovery will, for all intents
and purposes, be against him. The simple fact is that the state
has no real or direct interest in the outcome of this case, and
it is not, therefore, a ‘‘ suit against the state.’’

The judgment of the Appellate Division and the order of
Special Term dismissing the complaint should be reversed and
the motion to dismiss the complaint denied, with costs in all
courts.

Dzsmonp, J. (dissenting). This is a judgment creditor’s
action brought in Supreme Court, County of Kings, to set aside
as in fraud of plaintiff’s rights, a transfer of money by defend-
ant Glassman to defendant New York State Employees’ Retire-
ment System. The complaint demands that the nullity of that
transfer be adjudged and that the Retirement System be ordered
to pay plaintiff from the amount so transferred, the amount due
on her unsatisfied judgments against defendant Glassman. The
courts below have granted the Retirement System’s motion to
dismiss the complaint as to it for lack of jurisdiction. That
dismissal was correct, since the Retirement System is an agency
or instrumentality of the State of New York and the State has
not given its consent to be sued in the Supreme Court.

That the State of New York is not suable (except by another
State, U. S. Const., art. ITT, § 2, and 11th Amendt.) without its
own express consent is settled (Kursted v. People, 1 Abb. Prac.
385; Lewis v. State of New York, 96 N. Y. 71; Quayle v. State
of New York, 192 N. Y. 47; People ex rel. Swift v. Luce, 204
N. Y. 478; Chisholm v. Georgia, 2 Dallas [U. S.] 419). ‘It is
inherent in the nature of sovereignty, not to be amenable to the
suit of an individual without its consent’? (The Federalist,
No. 81; see Davison, Claims against the State of New York,
§ 1.06). Till the State so consents, no suit at all can be brought

446 |
es}

against it and questions as to liability, or as to the nature or
sufficiency of an alleged cause of action are not reached (Quayle
v. State of New York, 192 N. Y. 47, 50, 51, supra; Breen v.°
Mortgage Comm., 285 N. Y. 425, 432). Therefore, in this as
in every similar attempt to bring the State before the bar in its
own courts, ‘‘ The essential question is whether the State has
consented to a determination of its liability in the manner chosen
by plaintiffs ’? (Breen v. Mortgage Comm., supra, p. 432). Since
the attempt here was to bring suit in the Supreme Court and
since the State of New York has never authorized suits against
itself to be brought in any court except the Court of Claims
(Court of Claims Act, §§ 8, 9), the only conceivable question of
law arising on this dismissal is as to whether this is a suit
against the State. ‘‘ If the real defendant is the State, then,
of course, it may be sued only as it has consented to be sued, to
wit, in the Court of Claims ’’ (Breen v. Mortgage Comm., supra,
p. 429, citing Samuel Adler, Inc., v. Noyes, 285 N. Y. 34). That
the Retirement System is an arm or agency of the State per-
forming the public function of providing and regulating pensions
for public employees cannot be doubted (N. Y. Const., art. V,
§ 7; art. IX, § 12; art. XVI, § 5; Matter of Giannettino v.
McGoldrick, 295 N. Y. 208, 212; Sunkit Garden v. Moore, 183
Mise. 343; Civil Service Law, art. 4, ‘‘New York State
Employees’ Retirement System ’’). Suability was not provided
as to it by the language of section 51 of the Civil Service Law
which gave the Retirement System the ‘‘ powers and privileges
of a corporation’. In the Breen case (supra), the Mortgage
Commission was held to be exempt from suit in the Supreme
Court, although the statute made the commission a ‘‘ body cor-
porate’? and empowered it ‘‘ to sue and be sued’’ (L. 1935,
ch. 19, §§ 2, 4, subd. 1).

Nor can there arise in the present suit any problem as to
‘“‘ whether the action is against an agency of the State, or
whether it is against a public official in his personal capacity ”’
(Breen v. Mortgage Comm., 285 N. Y. 425, 429, supra; see Erie
R. R. Co. v. Sells, 298 N. Y. 58, 62, and cases cited). No persons
are here sued, individually or otherwise. The Retirement System
is not a board or commission or other body of people. And the
charge of this complaint is not of any trespass or usurpation or
other wrongdoing on the part of the system or its officials or

Le 447

employees (see Ha Parte La Prade, 289 U. 8. 444, 455). The
system, so far as appears, simply performed its statutory
duties in receiving the money from one of its ‘‘ members ’’
(presumably pursuant to Civil Service Law, § 63). By statute,
thdse moneys were commingled with others from various sources
into the ‘‘ funds of the retirement system ’’ in the custody and
under the management of the State Comptroller, to be held,
invested and paid out pursuant to statutory provisions only
(see Civil Service Law, §§ 70, 71, 72, 75, 76, 91). A lawsuit
which demands judgment that such a transfer to the Comptroller
is fraudulent and that part of the transferred moneys be paid
to the plaintiff could not possibly be anything but a suit against
the State itself (Samuel Adler, Inc., v. Noyes, 285 N. Y. 34, supra;
Niagara Falls Power Co. v. White, 292 N. Y. 472, 478). As such,
«it may be maintained only in accordance with the consent of
the State, i.e., in the Court of Claims ’’ (Breen v. Mortgage
Comm., 285 N. Y. 425, 429, supra). Even if this means that
plaintiff will in the end be without a remedy, the courts have
no power to legislate in her favor (Psaty v. Duryea, 306 N. Y.
413, 419).

It is suggested that there is or should be an exception to all
this settled law, in favor of a suit like the present one wherein,
it is said, the State is a ‘‘ mere stakeholder’ without any
“pecuniary interest ’’ of its own. It should be a sufficient
answer that nowhere in the statutory or case law of New York
is such an exception provided. Since the State’s nonsuability
is absolute until waived, and since such a waiver requires either
constitutional or statutory sanction (Davison, Claims against
the State, § 1.07) and since appellant can point to no such
constitutional or statutory provision in New York law, her claim
of exception cannot be accepted by our courts. We are referred
to decisions in other jurisdictions but those cannot be binding
or even applicable on the question of whether New York has
consented to defend such a suit as this in our Supreme Court.
And, indeed, those decisions from other jurisdictions, even if
controlling here, would not govern this present situation. The
rule they announce is this: ‘‘ A suit against an officer in which,
the State of New York does have ‘‘a substantive right to
protect, is not a suit against the State’? (Ha Parte Fitepatrick,
171 Ind. 557, 560, and cases cited thereat). Such a rule (and

448 Le
ane)

we do not intimate that it is part of the law of New York) would
not help this plaintiff, since, on the allegations of her complaint,
the State of New York does have ‘‘a substantive right to
protect ’’? here. The State is sued here because, as alleged, a
transfer was made as part of an attempt by the transferor to
defraud his creditor. The transferee is not a nominal, but a
necessary party defendant in any such suit (Hammond v.
Hudson Riv. Iron & Mach. Co., 20 Barb. 378; Sage v. Mosher,
28 Barb. 287; 13 Carmody-Wait on New York Practice,
pp. 726-727). And the reason for that necessity is because the
transferee ‘‘ has an interest in the subject matter of the suit”
(24 A. L. R. 2d 422, and cases cited). The title to and custody
of Retirement System moneys is in the State of New York.
* The State’s rights and obligations as to such funds are precisely
stated in the statutes. The State cannot possibly be considered
a ‘‘ stakeholder ’’ since a stakeholder is one who is a mere
depositary of property in which he has no interest and to which
he makes no claim, which he admits belongs to one or the other
of rival claimants, and as to which he has the naked authority
to deliver to one or the other on the happening or nonhappening
of a certain contingency (State v. Dudley, 127 N. J. L. 127;
Oriental Bank v. Tremont Ins. Co., 45 Mass. 1,10). The Retire-
ment Fund’s status bears no resemblance to that.
The judgment should be affirmed, with costs.

Conway, Ch. J., Frozssen and Vaw Vooruis, JJ., concur with
Ftp, J.; Desmonp, J., dissents in an opinion in which Burxz, J.,
concurs; Dyz, J., taking no part.

Judgment of Appellate Division and order of Special Term
reversed and matter remitted to Special Term for further pro-
ceedings in accordance with the opinion herein, with costs in
all courts.

In the Matter of Enrrn E. Owzns, Appellant, against J. Ray-
monp MoGovzry, as Comptroller of the State of New York,
Respondent.

Argued October 10, 1955; decided January 12, 1956.

450 ee

eens

John T. DeGraff and John J. Kelly, Jr., for appellant.
I. Decedent’s death resulted from an accident within the mean-
ing of section 81 of the Civil Service Law. (Matter of Odell v.
McGovern, 283 App. Div. 585, 308 N. Y. 678.) II. There is no
justification for holding that the social philosophy and eviden-
tiary requirements are different under the Retirement Law than
they are under the Workmen’s Compensation Law. (Matter
of Slattery v. Board of Estimate & Apportionment, 271 N. Y.
346; Rankin v. New York State Employees’ Retirement System,
274 App. Div. 160; Matter of Miller v. McGovern, 283 App. Div.
575.) III. The undisputed facts establish an accident within
the meaning of section 81 of the Civil Service Law as well as
under the Workmen’s Compensation Law. (Rankin v. New
York State Employees’ Retirement System, 274 App. Div. 160;
Matter of McCadden v. Moore, 276 App. Div. 490, 301 N. Y.
760; Matter of Becker v. McGovern, 281 App. Div. 1056; Matter
of Godsman v. Grumman Aircraft Engineering Corp., 268 App.
Div. 945, 295 N. Y. 708; Matter of Aldor v. Atlas Commissary
Co., 266 App. Div. 928; Matter of Masse v. Robinson Co., 301
N. ¥. 34; Matter of Ruby v. Lustig, 299 N. Y. 759; Matter of
Shaw v. Browers Garage, 295 N. Y. 709; Matter of Brooks v.
Elliott Bates, Inc., 295 N. Y. 710.) IV. The law relating to the
State Employees’ Retirement System should be ‘‘ liberally ’””
construed for the benefit of its members. (Matter of O’Brien
v. Tremaine, 285 N. Y. 233; Matter of Fischer v. Tremaine,
164 Mise. 576.)

Jacob K. Javits, Attorney-General (George H. Rothlauf and
James O. Moore, Jr., of counsel), for respondent. I. It cannot
be said as a matter of law that decedent’s death was the natural
and proximate result of an accident sustained in the perform-
ance of duty. (Matter of Masse v. Robinson Co., 301 N. Y. 34;
Matter of Odell v. McGovern, 308 N. ¥. 678; Matter of McCad-
den v. Moore, 301 N. Y. 760.) II. Whether or not the events of
March 12, 1951, constituted an accident was a question of fact
and, therefore, within the exclusive province of the Comptroller
for determination. It matters not that the Workmen’s Com-

ee 451
re

pensation Board determined such question otherwise. (Matter
of McCadden v. Moore, 301 N. Y. 760; Elder v. New York &
Pennsylvania Motor Express, 284 N. Y. 350; Neenan v, Wood-
side Astoria Transp. Co., 261 N. Y. 159; St. John v, Fowler,
229 N. Y. 270; Matter of Odell v. McGovern, 308 N. Y. 678;
Maiter of Trowbridge, 266 N. Y. 283.) IIL. No competent proof
was excluded by the hearing officer.

Dssmonp, J. The question of law is this: on the hearing of
an application for accidental death benefits from the State
Employees’ Retirement System under section 81 of the Civil
Service Law based on an allegation that death was caused by
a heart attack due to strain and exertion in State employment,
and where there is proof of such strain and exertion and of a
fatal heart attack, may the State Comptroller deny the appli-
cation without permitting the applicant to introduce medical
evidence of causation? Our answer is ‘‘no”’.

Summarized, petitioner’s proof before the hearing officer was
that her husband, forty-five years old, while working as a junior
civil engineer for the New York State Department of Public
Works, was required as a member of a survey party staking
out a proposed right of way to climb up and down a steep slope
at the time when the ground was icy and covered with snow,
that during that work decedent complained of a chest pain and
shortness of breath whereupon he was relieved of those par-
ticular duties, but that the next morning he suddenly died of
an acute coronary thrombosis. The Comptroller rejected the
widow’s claim, holding that her husband’s death was not caused
by an ‘‘ accident ’’ within the meaning of section 81 of the Civil
Service Law. The Appellate Division affirmed, stating that its
reasons therefor were the same as stated by that court in Matter
of Odell y. McGovern (283 App. Div. 585, affd. 308 N. Y. 678).
The Comptroller, so the Appellate Division wrote, ‘‘ acted within
the permissible range of his power in rejecting the claim ’’.
In the Odell case (supra), the widow of a State-employed
attorney who suffered a heart attack sought this same kind of
death benefit from the State Employees’ Retirement System on
the theory that the fatal attack was brought on by emotional
stress and anxiety caused by his courtroom work in the employ
of the State. In the Odell case, the applicant urged that the

452 |

Comptroller had erred in applying a stricter meaning to the
word ‘‘ accident ’’ in the State Retirement System Law than is
applied by the courts in this same word in the Workmen’s
Compensation Law. The Appellate Division in the Odell case,
however, pointed out that the Employees’ Retirement System
statute itself (Civil Service Law, § 85, subd. b) says that a
Workmen’s Compensation Board determination on the same
facts is not binding on the Comptroller in passing on a claim
such as this. In that Odell opinion the Appellate Division
referred to Matter of McCadden v. Moore (276 App. Div. 490,
affd. 301 N. Y. 760) as being a supposed authority for the appli-
cation by the Comptroller in these cases of a more restricted
meaning of the word ‘‘ accident ’’ than the meaning commonly
applied in workmen’s compensation cases. The substance of
the Appellate Division’s decision in the present case was, fol-
lowing the same court’s Odell decision (which we later affirmed
without passing on the particular point), that the Comptroller
was within his rights in holding as fact that the death of this
petitioner’s husband was not ‘‘ the natural and proximate result
of an accident sustained in the performance of duty ’’ in the
State service (Civil Service Law, § 81, subd. a). The Appellate
Division granted leave to appeal to this court, presumably to
tender us the question of law as to applicable standards of
proof in these Retirement System accidental death claims where
a heart failure is involved.

But it is impossible for us on this appeal to give a complete
answer to the question of law discussed in the briefs since, for
some reason not completely clear, there is no medical testimony
whatever in this record. In the workmen’s compensation heart
cases, of which we have had so many, there is usually no ques-
tion but that the deceased workman underwent strain and
exertion in the course of his duties. Ordinarily, too, in such
workmen’s compensation cases there is no dispute but that
claimant suffered a heart attack while at work or soon after-
wards. The question in those cases is usually as to whether
the exertion and strain of the work caused the heart attack so
as to permit a finding of industrial accident. It is obviously
impossible, given the other facts, to make such a causality find-
ing, or to refuse it, without medical opinion proof. As Larson
says in his ‘‘ Workmen’s Compensation Law’? the basic prob-

453

lem is medical causality (Vol. 1, § 38.83). The nexus between
the work strain and the heart failure cannot be assumed, any
more than the trier of the facts can assume that there was no
such connection. Consequently, in every workmen’s compensa-
tion heart case we have ever seen there was opinion testimony
of causation. Whether or not that opinion testimony was directly
controverted, it was for the trier of the facts to say whether
or not he adopted the conclusion of the expert who testified for
claimant. And there is, as we shall show, no essential difference
between the proof requirements of workmen’s compensation
fatal heart claims and similar claims against the Retirement
Fund. But this present record can be read—and in fairness
should be read—as containing a ruling by the deputy comp-
troller that he would not take and did not need medical testi-
mony but would decide the question of accident or no solely on
the description already in the record of what decedent had been
doing at the time he suffered the alleged strain. Colloquy at
the end of the hearing contains a statement by counsel for
claimant that he was resting on the testimony already taken,
but the rest of what he said at that point makes it plain that
he was putting before the deputy comptroller, perhaps not very
scientifically, his contention that he was entitled to offer, also,
medical testimony of causation. The Comptroller, nevertheless,
rejected the testimony and denied the claim.

While a claim of an “‘ accident’? consisting of heart injury
from work strain cannot be sustained without medical testimony
it is, of course, possible, theoretically at least, that a finding
of ‘‘no accident’? could be made without such testimony. If
the only testimony as to the work done showed that there was
no particular strain or exertion, then, regardless of medical
testimony and with or without it, the trier of the facts could, we
suppose, say that ordinary, uneventful, placid routine work
could not result in an ‘‘ accidental ’’ injury to a worker’s heart
within any of the statutes or cases (see 1 Larson on Workmen’s
Compensation, §§ 38.64, 38.83). But there had been put into
this record testimony of unusually strenuous working condi-
tions and so there should have been an opportunity for claimant
to demonstrate by opinion testimony, if she could, that this
strain and exertion caused the heart injury.

454 ee
ee

Clearly there was adequate proof here of strenuous outdoor
physical work by this forty-five-year-old engineer. In March,
1951, a contractor for a new road in the Bear Mountain area
notified the State Engineer that the contractor was moving into
a certain area where the State’s survey work had not yet been
done and where it was necessary that this survey be made before
the contractor’s work should disturb the terrain. Thus it
became important that the surveying be done immediately and
a survey team was assigned, made up of three junior civil
engineers, including this decedent, and three other persons. The
operation consisted of driving stakes by the use of sledge
hammers and then taking and recording measurements, ete.
Decedent was not taking notes but was, with the others, driving
the stakes. The ground was icy in places with snow and, in
other places, mud on top of ice, and the slope was ‘‘ very, very
steep ’’ in both directions from the road center so workers had
to climb steeply up and make their way steeply down. Those
slopes were at a forty-five-degree angle and were covered with
boulders, stumps and brush. The work had been postponed in
the hope of better weather conditions and had been put off as
long as possible but finally had to be done on that particular
day. One of the witnesses said that conditions were the most
rugged that he had ever seen for such work. Claimant offered
before the deputy comptroller to show that earlier staking work
done by these people had been on flat ground, but the hearing
officer refused to accept this testimony. At 11:00 a.m. decedent
came down the slope and complained to the person in charge of
the party that he (decedent) could not work any more on the
slope because he had pains in his chest, tightness and shortness
of breath, saying, probably facetiously, that he was getting too
fat for such work. The man in charge then changed places with
decedent, letting the latter take notes while the man in charge
did decedent’s work for the rest of the day. At 2:00 o’clock the
next morning decedent complained of pains in his chest and
shoulder and a doctor was summoned but when the doctor
arrived at 2:30 a.m. decedent had died from an acute coronary
thrombosis.

Petitioner tells us that this is a test case brought to examine
into the statement or remark of the Appellate Division in Matter
of Odell v. McGovern (283 App. Div. 585, 587, supra) that ‘a

ee 455
ee

different social philosophy ’’ from that of the Workmen’s Com-
pensation Law has been expressed by the Legislature in the
State Employees’ Retirement System statutes. In our Per
Curiam opinion in the Odell case (308 N. Y. 678, 680, supra), we
said that we found it unnecessary to decide whether there was
such a difference between the two statutory systems or to decide
whether the Comptroller may require more convincing evidence
of an accident than is required under the Workmen’s Compen-
sation Law. In Matter of Slattery v. Board of Estimate &
Apportionment (271 N. Y. 346) decided in 1936, and in Matier
of Nash v. Brooks (276 N. Y. 75) decided in 1937, this court had
held, at least in effect, that Workmen’s Compensation Board
determinations of accidental injury were binding on the medical
board of the State Retirement System. Soon thereafter, how-
ever, the Legislature amended what was then section 67 of the
Civil Service Law to provide that workmen’s compensation
decisions should not be binding on the Comptroller or the medical
board in proceedings concerning accidental benefits under the
Retirement System. A possibly stronger declaration to the
same effect is now found in subdivision b of section 85 of the
Civil Service Law. Thus, we see that while this court at one
time indicated that the Comptroller should follow the workmen’s
compensation finding of accidental injury, the Legislature there-
after made it plain that the Comptroller, in determining that
factual question, may do so independently of any prior decision
of the Workmen’s Compensation Board. Of course, it is unfor-
tunate and anomalous that on the same evidence two different
State administrative bodies should make contrary determina-
tions of fact, but the statutes, by denying conclusive effect in
Retirement System cases to Compensation Board findings of
accidental causation, permit such discordant results. The
Comptroller is free to make his own independent factual deter-
mination on the proof as he sees it. But no statute authorizes
him to reject competent proof or to make rules of law, as dis-
tinguished from case-by-case findings of fact. How much and
what kind of evidence is needed to support a fact finding that
a death is ‘‘ the natural and proximate result of an accident
sustained in the performance of duty ’”’ (Civil Service Law,
§ 81) is a question of law. When the proof has been taken,
the Comptroller, if questions of credibility appear or if conflict-

456 es
pe ge}

ing inferences are available, may perform the traditional duties
of a trier of fact. He cannot change the law as to the meaning
of the word “ accident ’’.

This court held in Matter of Slattery v. Board of Estimate &
Apportionment (271 N. Y. 346, 350, supra) that there is ‘‘ no
substantial difference ’’ between ‘‘ accidental injuries ’? (Work-
men’s Compensation Law, § 2) and injuries which are ‘the
natural and proximate result of an accident ’’ (Civil Service
Law, § 81). True, the Legislature afterwards decrecd that the
Compensation Board’s holding of accident causation should not
bind the Comptroller, but that statutory denial of res judicata
left intact the holding that there is ‘‘ substantial identity of
subject-matter ’? (Slattery opinion, swpra, p. 351) and that the
issue as to accidental causation is the same under both statutes.
Now, there can no longer be any doubt as to the applicable law
of accidental causation in héart cases under the Workmen’s
Compensation Law. Such fatal heart failures may be held
‘accidental, if the employee, by a miscalculation of his own
strength, inadvertently hastened his own death by exertion that
caused the final breakdown ’’ (1 Larson on Workmen’s Com-
pensation, § 38.83, p. 566). Whether exertion in employment
followed by heart failure adds up to an accident under these
rules is ordinarily a question of ultimate fact. To set up such
a question we need proof of the work done and of the physical
aftermath, but we then must look for another element: medical
causation. When we have direct testimony of the first two
observable facts, we seek causation in the opinion evidence of
medical witnesses. When all that proof has been assembled,
then ‘‘ Whether a particular event was an industrial accident is
to be determined, not by any legal definition, but by the common-
sense viewpoint of the average man’’ (Matter of Masse v.
Robinson Co., 301 N. Y. 34, 37). In applying those ideas to the
present case, we are not forcing this claim into a workmen’s
compensation mold, or stretching the coverage of a so-called
“Masse rule’. That the word ‘‘ accident ’’ is incapable of
complete definition but is to be tested as to meaning by common
speech and common understanding has been recognized in our
courts and other courts for a long time (Mutual Accident Assn.
v. Barry, 181 U. 8. 100, 121; Bird v. St. Paul Fire & Marine Ins,
Co., 224. N. Y. 47, 51; Lewis v. Ocean Accident & Guar. Corp., 224

ee 457

N.Y. 18, 21). The Masse decision (supra) restated and reapplied
that test as to accidental heart injuries in industry. Nor did the
Masse opinion say anything new when it stated (p. 37) that ‘‘ A
heart injury such as coronary occlusion or thrombosis when
brought on by overexertion or strain in the course of daily
work’? is an accidental injury. Similar holdings abound in
accident insurance cases (see Kleinman v. Metropolitan Life
Ins. Co., 298 N. Y. 759; Burr v. Commercial Travelers Mut.
Accident Assn., 295 N. Y. 294; see 166 A. L. R. 469 et seq.).

I should make it clear that I disagree with nothing in Judge
Fuxp’s concurring opinion.

The order appealed from should be reversed, with costs in
this court and in the Appellate Division, and the matter remitted
to the State Comptroller for further proceedings not inconsistent
with this opinion.

Fun, J. (concurring). In the disposition of the appeal, on
the exceedingly narrow ground that the assertedly proffered
medical evidence should have been received by the Comptroller
for its possible bearing on causality, I concur.

In so doing, however, I would not have my vote construed as
agreement with the contention advanced by petitioner that the
Workmen’s Compensation Board’s finding of accident is in
any way binding or conclusive on the Comptroller in determin-
ing whether accidental death benefits should be paid to petitioner
under the Civil Service Law. (See, e.g., Matter of McCadden
v. Moore, 301 N. Y. 760.) In other words, the court’s remission
of the present matter to the Comptroller does not mean that that
official must find that petitioner’s husband sustained an
“‘ accident ’? within the sense of section 81 of the Civil Service
Law or that his death was the natural or proximate result of
such an accident. If different inferences may reasonably be
drawn from the evidence adduced before him, the Comptroller
may find, for whatever bearing it may have on the ultimate
issue, that there was or was not unusual extra exertion and
strain sufficient to have caused the coronary thrombosis; that
there was or was not an accident; and, if there was an accident,
that it was or was not the cause of death.

The Comptroller may not, of course, make a finding or render
a determination completely unsupported by evidence, but, on

458 a
ee sesame

the other hand, if his findings and conclusions do find support
in the record, the courts have no alternative but to accept them,
and that is so even though such a course might, as in the case
now before us — just as in Matter of McCadden v. Moore (supra,
301 N. Y. 760) —lead to a result at odds with that reached by
the Workmen’s Compensation Board. While that may be
unfortunate, the fact is, as everyone recognizes, it was plainly
contemplated by, and is the necessary consequence of, the
amendment passed by the legislature to overcome the effect of
our decisions in Matter of Slattery v. Board of Estimate &
Apportionment (271 N. Y. 346) and Matter of Nash v. Brooks
(276 N. Y. 75).

Conway, Ch. J., concurs with Dusmonn, J.; Fun, J., concurs
for reversal in a separate opinion in which Fronssmn, Van
Voorzis and Burks, JJ., concur; Dyn, J., taking no part.

Order reversed, with costs in this court and in the Appellate
Division, and matter remitted to the State Comptroller for
further proceedings.

— EE

Tur Ports or tun Srats or New Yorx, Respondent, v. Isaac
Namer, Also Known as Davm Grossman, Appellant.

Argued November 16, 1955; decided January 12, 1956.

459

Solomon A. Klein for appellant. I. Appellant was swamped
by a mass of incompetent and highly prejudicial evidence show-
ing that he was an escaped parole violator who thwarted appre-
hension for four years by concealing his identity under assumed
names; who refused, when arrested, to reveal where he had
been, what he had been doing, and whether he had committed
any other crimes, and who owned a pile of tools and other
equipment physically exhibited to the jury. All this was
admitted, over repeated objection, as part of the People’s case.
(People v. Tumminaro, 242 App. Div. 501; People v. De Santis,
305 N. Y. 44; People v. Wolf, 183 N. Y. 464; People v. Sickles,
156 N. Y. 541; People v. Abel, 298 N. Y. 333; People v. Pignataro,

460 |
sees

263 N. Y. 229; People v. Rutigliano, 261 N. Y. 103; People v.
Zackowitz, 254 N. Y. 192.) II. The evidence was insufficient
as a matter of law to warrant submission of the case to the
jury. (People v. Persce, 204 N. Y. 397; People v. Leavitt, 301
N. Y. 118; Union Trust Co. v. Wilson, 198 U. 8. 530; People v.
Brenneauer, 101 Mise. 156; People v. Twmminaro, 242 App.
Div. 501.)

Frank A. Gulotta, District Attorney (Henry P. De Vine of
counsel), for respondent. I. The guilt of defendant was estab-
lished beyond a reasonable doubt. (People v. Persce, 204 N. ¥.
397; People v. Russo, 303 N. Y. 673; People v. Leavitt, 301
N. Y. 113; People v. Wolosky, 296 N. Y. 236; People v. Fite-
gerald, 156 N. Y. 258; People v. Ferraro, 161 N. Y. 365; People
v. Conroy, 97 N. Y. 62; People v. Daghita, 299 N. Y. 194.)
II. Evidence of defendant’s escape and concealment from a
parole officer was admissible as proof of defendant’s motive
for possessing the weapon. (People v. Molineux, 168 N. Y. 264;
People v. Zackowitz, 254 N. Y. 192; People v. Scott, 153 N. Y.
40; People v. Fitzgerald, 156 N. Y. 253.) III. Evidence of
ownership of the tools was relevant. (People v. Niteberg, 287
N. Y. 183; People v. Richardson, 222 N. Y. 103; People v. Wilson,
7 App. Div. 326, 151 N. Y. 403; People v. Leavitt, 301 N. Y. 113;
People v. Buchalter, 289 N. Y. 181.) IV. Evidence of defend-
ant’s conduct while in custody was not prejudicial. (People v.
Abel, 298 N. Y. 333; People v. Fernandez, 35 N. Y. 49; People
v. Becker, 215 N. Y. 126, 215 N. Y. 721; People v. Green, 201
N. Y. 172; People v. Monat, 200 N. Y. 308; People v. Morse,
196 N. ¥. 306.)

Vaw Vooruis, J. Defendant has been convicted of possessing
a pistol of a size which might be concealed on his person, with-
out a written license therefor, in violation of subdivision 4 of
section 1897 of the Penal Law. This crime is a felony in view
of the circumstance that the indictment charged, and the jury
found, that in 1940 defendant had been convicted of robbery in
the first degree and of criminally possessing a dangerous weapon
after a prior conviction.

A certificate of the 1940 conviction was received in evidence
in order to establish the felonious nature of the possession of
this weapon, in view of the language of the penal statute that

| 461
ee

“if he has been previously convicted of any crime he shall be
guilty of a felony.’’

This did not render admissible evidence that the defendant
had violated his parole under the previous sentences by going
for four years under an assumed name without reporting to
the parole officer. Such evidence was received over defendant’s
objection in this case, and emphasized by the prosecuting officer
in his opening and summation to the jury. The respondent
does not argue that introduction of evidence that defendant was
a parole violator would be harmless error if the ruling admitting
it were erroneous, but argues instead that it was admissible to
show that defendant had a motive for having a pistol in his
possession. Respondent’s brief states that ‘‘he possessed a
weapon ‘ in expectation ’ [People v. Zackowitz (1930), 254 N. Y.
192, 198] of the day when his true identity would be uncovered.”?
This simply means that a man who is liable to arrest on an
important criminal charge would be likely to possess a revolver
in order to try to shoot his way out if he were to be apprehended
by the police. The Zackowitz case (supra) tends to support the
position of defendant-appellant. There a judgment was reversed
convicting a defendant of murder in the first degree on account
of error in admitting evidence that three pistols and a tear gas
gun had been found in his apartment. ‘‘ The end’’ says the
opinion (pp. 196-197, per Carpozo, Ch. J.), ‘“‘ was to bring
persuasion that here was a man of vicious and dangerous
propensities, who because of these propensities was more
likely to kill with deliberate and premeditated design than
a man of irreproachable life and amiable manners. Indeed,
this is the very ground on which the introduction of the
evidence is néw explained and defended. * * * Inflexibly
the law has set its face against the endeavor to fasten guilt
upon him by proof of character or experience predisposing to
an act of crime (Wigmore, Evidence, vol. 1, §§ 57, 192; People
v. Molineum, 168 N. Y. 264). The endeavor has been often made,
but always it has failed.’? The caveat (p. 198) is not in point in
this case, that ‘‘ A different question would be here if the pistols
had been bought in expectation of this particular encounter.
They would then have been admissible as evidence of preparation
and design (Wigmore, Hvidence, vol. 1, § 238; People v. Scott,
153 N. Y. 40).’? In the Scott case (supra), the defendant had

462 PC

pawned his revolver and redeemed it just before the homicide.
This evidence was held to have been admitted properly, for the
reason that ‘‘ The purchase of a weapon with which a homicide is
committed shortly before the fact, is always received to show that
the accused had provided himself with the means of killing.’’
(P. 49.) That is different from the present situation where the
revolver that was discovered in the attic of defendant’s garage
was not used at all.

While there may be considerable doubt that motive is at all
relevant in proving the crime here under consideration, a viola-
tion of subdivision 4 of section 1897 of the Penal Law, there
can be no question that the proof here relied upon by the prose-
cution to supply evidence of motive bears no logical relationship
to commission of the criminal act with which defendant was
charged. ,

Whenever ‘‘ motive is to be established it must be the motive
which underlies the crime charged ’’ and not some other crime
(People v. Molineux, 168 N. Y. 264, 295). To be valid evidence
of the commission of a crime, the motive attributed to the
aceused must have had a logical connection with the crime
charged (People v. Fitegerald, 156 N. Y. 253). In the latter
case the theory was explained on which evidence of motive is
‘relevant, as follows (p. 258): ‘‘ It [motive] is resorted to as a
means of arriving at an ultimate fact, not for the purpose of
explaining the reason of a criminal act which has been clearly
proved, but for the important aid it may render in completing
the proof of the commission of the act when it might otherwise
remain in doubt. With motives, in any speculative sense, neither
the law nor the tribunal which administers it has any concern.
It is in cases of proof by circumstantial evidence that the motive
often becomes not only material but controlling, and in such
cases the facts from which it may be inferred must be proved.
It cannot be imagined any more than any other circumstance
in the case. (People v. Bennett, 49 N. Y. 187; People v. Owens,
148 N. Y. 648; 1 Greenl. Hv. § 13.) ”

In order to be admissible, evidence of motive must possess
a ‘relation to the criminal act according to known rules and
principles of human conduct ’’ (People v. Fitegerald, supra,
pp. 258-259). ‘‘If it has not such relation, or if it points in
one direction as well as in the other, it cannot be considered a

Leen! 463

legitimate part of the proof” (People v. Fitegerald, supra,
p. 259; People v. Weiss, 290 N. Y. 160, 164-165).

No cases have been cited, nor have any been discovered, hold-
ing that being a parole violator, or being otherwise subject to
arrest for a previous offense, by itself constitutes or could be
regarded by a jury as a motive to eke out circumstantial evi-
dence that a particular defendant was, in fact, in possession
of a revolver.

There was no dispute about defendant’s identity as the man
who was convicted under the 1940 indictment. Identity was not
only admitted to the police officers, but had been proved by a
pedigree statement, signed by appellant at the time of his arrest
under the parole warrant which the prosecutor read to the jury.
A criminal record was conceded in the opening by defendant’s
counsel,

The real purpose of the prosecution can hardly have been to
establish either identity or motive, but was to convince the jury
that defendant was a confirmed criminal living in opposition
to duly constituted authority, having escaped from the super-
vision and control of the State Parole Board, and evaded arrest
for a period of four years by eoncealing his identity under
assumed names, ‘The forbidden object of this proof was to
establish that he had a propensity to commit the crime with
which he was charged (People v. Zackowitz, supra).

Another error has been argued in the admission of evidence.
The prosecution was permitted to prove over objection by
defendant that he remained silent, when he was interrogated
at the police station concerning whether he had been involved
in other crimes in the area in which he had lived. Parole Officer
Skobell testified that at the station ‘‘ Parole Officer Davis as
well as Lieutenant Closs questioned him as to what he had been
doing during the past several years since he had absconded from
supervision ’’, the answer to which, it is true, was excluded upon
an objection after ‘‘ absconded ’’ had been interjected by the
witness in the presence of the jury, yet when Police Lieutenant
Closs was called to the stand, the court reversed itself and
allowed the following incompetent and prejudicial testimony to
be introduced over objection by defendant, which remained in
the record:

464 Dn
Ls

“©Q. What was your conversation with him at that time?
A. I asked him where he had been and what he had * * *
been doing, what he had been working at. I asked him was he
involved im any other crimes in the area in which he lived.

“<Q. What were his replies to those things? A. Very vague.
No answers at all. *

**Q. Did you question him with reference to the use of the
name David Grossman? A. I did not.

“©Q. What were the replies to the other questions that you
told us? * * * <A. No answers at all.’’ (Italics supplied.)

This has been held to constitute reversible error (People v.
Travato, 309 N. Y. 382; People v. Abel, 298 N. Y. 333; People
vy. Pignatoro, 263 N. Y. 229; People v. Rutigliano, 261 N. Y. 103).

We consider that the evidence was sufficient to warrant sub-
mission to the jury. The circumstance that this revolver was
wrapped in the folds of a tarpaulin belonging to defendant, on
which were piled numerous other articles also belonging to him,
was enough to establish a prima facie case against him, coupled
with his admission to Police Lieutenant Closs: ‘‘ Well, if the
detectives say they found the gun there, I must have put it
there.’’ It was material to receive evidence concerning where
this pistol was discovered, and evidence of the circumstances
became not less relevant for the reason that the jury may have
inferred that some of the articles with which the pistol was kept
were susceptible of use for criminal purposes. Their ownership
by defendant (whatever their nature may have been) was part
of the chain of circumstantial evidence tending to establish that
he likewise owned the revolver which the indictment charges
him with possessing.

Defendant’s conviction is reversed on account of errors in
the admission of evidence and a new trial is ordered.

Dusmonp, J. (concurring). I vote for reversal, but on a ground
which is broader than, but not necessarily inconsistent with, the
ground stated in this court’s majority opinion. To prove a
“‘ motive’? for defendant’s alleged violation of subdivision 4
of section 1897 of the Penal Law, the prosecutor was allowed
to show that defendant was a parole violator at the time. But
the statute makes it a crime merely to possess, without a license,
certain kinds of firearms. A violation thereof does not involve

Le 465

or include any specific intent. Mere possession, otherwise licit,
becomes a crime if the possessor does not have a license.
“« Motive ’? has no more to do with such a violation than with
the unlicensed driving of an automobile, or the unlicensed
possession of narcotics or explosives. True, there are New
York cases, such as People v. Connolly (253 N. Y. 330, 341),
which say that evidence tending to show the motive for a crime
is ‘always admissible’. But the crime itself must still be
one to which a specific motive is reasonably assignable. If it
be the law, as says the opinion in People v. Fitegerald (156
N. Y. 253, 259), that evidence of motive, to be admissible, must
have a ‘‘ relation to the criminal act according to known rules
and principles of human conduct ’’, then any alleged motives
are entirely outside the scope of investigation in cases like the
one here under review. The dispute on this trial was as to
the identity of the possessor of the unlicensed revolver. The
coincidental circumstance that defendant was delinquent in
reporting to his parole officer was twisted into proof that he,
and not someone else, was the possessor.

Conway, Ch. J., Fuup, Froussen and Burxs, JJ., concur with
Van Vooruis, J.; Desmonn, J., concurs in a separate opinion;
Dvn, J., taking no part. .

Judgments reversed and a new trial ordered.
PC
Exazasera O’Connor, Appellant, v. Ouzve Papsrrsian et al.,
Respondents.

Argued October 19, 1955; decided January 12, 1956.

466

Maurice J. McCarthy, Jr., for appellant. I. The action of
the Appellate Division was an unwarranted interference with
the trial court’s diseretion and in effect a reversal. (Clark v.
Delaware & Hudson R. R. Corp., 245 App. Div. 447; Byrd v.
Keith Corp., 186 Misc. 19; O’Keeffe v. O’Keef'e, 208 App. Div.
750; Zukas v. Lehigh Valley Coat Co., 187 App. Div. 315.)
II. Plaintiff is being denied a jury trial in violation of sec-
tion 2 of article I of the New York State Constitution. (McGurty
v. Delaware L. & W. R. R. Co., 172 App. Div. 46; Holl-
wedel v. Duffy-Mott Co., 263 N. Y. 95; Russell v. Rhinehart,
137 App. Div. 843; Burns v. New York & Long Is. Traction Co.,

| 467

139 App. Div. 145; York Mtge. Co. v. Clotar Constr. Corp., 254
N. Y. 128; Schenck v. Prudential Ins. Co. of America, 167 Mise.
282; Duke v. Fargo, 172 App. Div. 746; Howard v. Bank of
Metropolis, 115 App. Div. 326; Lawrence v. Wilson, 86 App. Div.
472.)

Bernard Meyerson and Richards W. Hannah for Olive Papert-
sian, respondent. I. The Appellate Division had the authority
to reinstate and increase the verdict set aside by the trial court.
(Schroeder v. Krohnberg, 244 App. Div. 826; Laidhold v. Sub-
urban Laundry Co., 239 App. Div. 847; Hartford v. Greenwich
Bank of City of N. Y., 157 App. Div. 448, 215 N. Y. 726; Helgers
y. Staten Is. Midland R. R. Co., 69 App. Div. 570; McGrath v.
Third Ave. R. R. Co., 9 App. Div. 141; De Camp v. Thomson,
159 N. Y. 444; Matter of Baldwin, 158 N. Y. 718; People ex rel.
Coler v. Lord, 157 N. Y. 408.) II. There are no constitutional
questions involved herein and this court does not have the
jurisdiction to review a discretionary order. (Miogei v. Arm-
strong Coal Co., 288 N. Y. 567; Merriam v. Wood & Parker
Lithographing Co., 155 N. Y. 136.)

Olin S. Nye and Matthew E. Lawless for Anthony De Vito,
respondent. I. The Appellate Division has power to modify
a trial court’s decision ordering a new trial. (Steinleger v.
Frankel, 117 Mise. 693.) II. The action of the Appellate Divi-
sion is constitutional. (Holmes v. Jones, 121 N. Y. 461; Torsiello
v. Drohan, 254 App. Div. 803; Hyman v. City of New York, 263
App. Div. 896; Iannotta v. Integrity Holding Corp., 269 App.
Div. 1044; Ullman v. Tubbs, 279 App. Div. 1120; Dugan v.
Murphy, 281 App. Div. 1044; Kligman v. City of New York,
281 App. Div. 93; Laidhold v. Suburban Laundry Co., 239 App.
Div. 847.)

Coxway, Ch. J. In the Supreme Court the jury brought in a
verdict in favor of the plaintiff in the amount of $1,000. A
motion made by the plaintiff to set aside the verdict on the
ground of inadequacy was granted and a new trial ordered.
Defendants appealed from that order to the Appellate Division,
which ‘‘ modified’? the order of the Trial Term by ordering
*¢a new trial on the ground of the inadequacy of the verdict

468 Pe
ee
unless defendants stipulate to increase the verdict to the sum
of $2,500, in which event the judgment is to be entered accord-
ingly, with costs to plaintiff-respondent.’? The defendants so
stipulated. The plaintiff, thereupon, took this appeal, as of
right.

Plaintiff, a passenger in one of defendants’ automobiles, was
injured when they collided. The principal claim of damages was
fora rash which plaintiff claimed resulted from the treatment
of the injuries sustained. The main issue at the trial was
whether there was a connection between the accident and the
rash. The jury’s verdict in plaintiff’s favor of $1,000 indicated
its finding that the rash was not attributable to the accident.
On the motion to set aside the verdict, plaintiff contended that
the verdict was inadequate even for the admitted injuries, with-
out consideration of the rash.

In its opinion the Appellate Division said:

‘We are satisfied that the verdict was inadequate for the
conceded injuries and are also satisfied that the jury was fully
justified in finding that the rash was unconnected with the acci-
dent or injuries resulting from the accident. The question
therefore is whether we must require a new trial, including the
issue which the jury has properly adjudicated against plaintiff,
merely because the jury made an inadequate award on the part
of the case which they found in plaintiff’s favor, or whether we
may not properly place a value on the connected injuries as
high as any jury would be warranted in going and give the
defendants the opportunity of stipulating to pay such an
increased verdict in lieu of suffering a new trial.

“<Tt would seem clear in reason and principle that the last
alternative should be available to the court in order that the
litigation may be brought to a just determination without
involving the time and expense of another trial.’’

In the words of the plaintiff herself: ‘‘ The sole question for
determination concerns the right of the Appellate Division to
affirm the trial court in setting aside a verdict of $1,000 as
inadequate and granting a new trial, yet denying the new trial
if the verdict is voluntarily increased to $2,500.’? That is, we
have before us solely a question of law as to the power of the
Appellate Division to modify the order of the trial court
granting a new trial as it did in this case.

P| 469

The plaintiff contends that: 1. ‘‘ The action of the Appellate
Division was an unwarranted interference with the trial court’s
discretion and in effect a reversal ’’, and 2. ‘‘ The plaintiff is
being denied a jury trial in violation of Article I, Section 2 of
the New York State Constitution.’’

The first point of the plaintiff inferentially concedes that the
Appellate Division has the power to act as it did, but that in
our present case such action was an ‘‘ unwarranted inter-
ference ’’. Since this appeal was heard, on plaintiff’s request,
on an abridged record, the trial minutes are not before us and
we are limited to considering the Appellate Division opinion,
a portion of which the plaintiff relies upon heavily. It appears
that the plaintiff’s contention is that since the granting of the
new trial, on the grounds of inadequacy, rests in the trial court’s
discretion, and since the Appellate Division agreed with the
trial court in stating that ‘‘ [w]e are satisfied that the verdict
was inadequate * * **, that therefore the Appellate Divi-
sion did not have the power to modify, or in effect reverse, the
determination with which it agreed, and that such action on its
part would be a clear case of an abuse of discretion as a matter
of law, with the conclusion being that the Appellate Division
neither had the right nor the power to so act.

Statutory authority for the action of the Appellate Division
is to be found in section 584 of the Civil Practice Act. That
section reads: ‘‘ Upon an appeal from a judgment or an order,
any appellate court to which the appeal is taken, which is author-
ized to review such judgment or order, may reverse or affirm,
wholly or in part, or may modify the judgment or order appealed
from, and each interlocutory judgment or intermediate or other
order which it is authorized to review, and as to any or all of
the parties. It shall thereupon render judgment of affirmance,
judgment of reversal and final judgment upon the right of any
or all of the parties, or judgment of modification thereon,
according to law, except where it may be necessary or proper
to grant a new trial or hearing, when it may grant a new trial
or hearing. * * *,7?

In construing the predecessor of section 584 (Code Civ. Pro.,
§ 1317), our court pointed out in Herrman v. United States
Trust Co. (221 N. ¥. 148, 145-147):

470 Le
bs

‘¢ The amendment to section 1317 provides that the Appellate
Division may affirm, reverse or modify the judgment or order
appealed from and render ‘ final judgment wpon the right of
any or all of the parties. ’ [Emphasis supplied.] * *

“‘The trial court, in the case before us for decision, had
power, instead of setting aside the verdict and ordering a new
trial, to reduce the verdict, with the consent of the plaintiff, and
direct judgment for the amount to which it was reduced [case
cited]. The power to thus reduce verdicts at Trial Term is too
well settled and has been followed too long to be questioned now.
It is said to be a power inherent in the court. * * * Such
judgment is just what the Appellate Division said the trial court
should have rendered in this case.’? (See, also, Lamport v.
Smedley, 213 N. Y. 82, 85; Middleton v. Whitridge, 218 N. Y.
499, 506-507.)

It is true that the Herrman case (supra) dealt with a contract
action rather than a tort action, but the difference which had
existed between the Appellate Division’s power in contract and
tort actions (see Whitehead v. Kennedy, 69 N. Y. 462) was elimi-
nated by the amendment of section 1317 of the Code of Civil
Procedure (Lamport v. Smedley, 213 N. Y. 82, supra; Middleton
v. Whitridge, 213 N. Y. 499, swpra), and in both types of case
the Appellate Division was given the power to render the final
judgment which the trial court could or should have rendered.

It is likewise true that the portion of section 584 which pro-
vided that: ‘‘ When a trial has been before a jury, the judgment
of the appellate court must be rendered either upon special find-
ings of the jury or the general verdict, or upon a motion to
dismiss the complaint or to direct a verdict’, was deleted by
the Legislature in 1926, and is presently absent from section
584 of the Civil Practice Act. However, the omission of that
sentence may not be considered as a limitation upon the power
of the appellate court for, if any construction be placed upon
it, it would be one of extension rather than restriction of the
powers of the Appellate Division. In any event, subsequent to
the 1926 amendment deleting that sentence from section 584,
United Paperboard Co. v. Iroquois Pulp & Paper Co. (217 App.
Div. 253, affd. without opinion 249 N. Y. 588) was decided. In
that case the Appellate Division said in its opinion: ‘‘ We con-
strue the words ‘ final judgment upon the right of any or all of

P| 471

the parties ’ in section 584 of the Civil Practice Act, broadly to
include all such final determinations of a party’s right as could
have been made by the trial court [eases cited].’”? (Hmphasis
supplied.) Our court, in affirming without opinion, adopted this
construction, insofar as holding that the Appellate Division
had the same power to act as did the trial court. It is clear,
therefore, that the rationale and principles enunciated in the
earlier cases mentioned above which predate section 584 of the
Civil Practice Act, still obtain today.

As a result, the Herrman case (supra) would be controlling
as to the situation now before us, for the facts are identical (the
distinction between contract and tort no longer prevailing)
except that, in the Herrman case, the Appellate Division reduced
the recovery and the plaintiff stipulated to take the reduced
sum, while in the case now before us the Appellate Division
increased the recovery and the defendant stipulated to pay the
inereased sum. Both actions were tried before a jury, and in
both the trial court set aside the verdict and granted a new trial.

The power of the trial court to grant a new trial on the ground
that the verdict is inadequate or excessive, is undisputed. Simi-
larly the trial court may deny a motion for a new trial on
condition that the party, other than the movant, stipulate to
pay a greater amount or accept a lower amount, as the case
may be (7 Carmody-Wait on New York Practice, §§ 21, 22,
pp. 120-122). As we have said earlier, the Appellate Division
is enabled to render the judgment which the trial court could
or should have rendered ‘‘ upon the right of any or all of the
parties * * *»? and therefore can act as it did in the present
case,

The Appellate Division believed the trial court should have
disposed of the action by allowing the defendant to stipulate
to.pay a larger sum and, upon that condition, denied the motion
for a new trial and therefore the Appellate Division acted in
the manner in which the trial court could or, in the opinion of
the Appellate Division, should have acted. It matters not that
the granting of such conditional order would lie within the
discretion of the trial court, for ‘‘ [m]Jatters of discretion are
reviewable by the Appellate Division. Since that court is a
branch of the Supreme Court, whenever discretion is vested in
‘the supreme court’ it may be exercised by the Appellate Divi-

472 Le
esse

sion by way of a review of the action of Trial or Special Term,
even though there has been no abuse of discretion by the lower
branch of the court.’? (9 Carmody-Wait on New York Practice,
§ 187, p. 573, cases footnoted; Hogan v. Franken, 221 App.
Div. 164.)

The plaintiff’s second contention, viz., that she is being denied
a jury trial in violation of section 2 of article I of the New York
State Constitution is likewise without merit. The same issue
was raised in Herrman v. United States Trust Co. (221 N. Y.
148, 147-148, supra) and there we stated: ‘‘ As was said in
Middleton v. Whitridge (supra) [213 N. Y. 499, 507], that prac-
tice does not lead to any encroachment upon the functions of
the jury. The defendants had their case tried by the jury once,
and they have no constitutional right to two jury trials. The
jury rendered its verdict, and the defendants, not satisfied
therewith, moved to set the verdict aside. The trial court granted
the motion but the Appellate Division reversed that decision.
As some measure of relief, however, the Appellate Division cut
down the recovery against the defendants, with the consent of
the plaintiff.’? (Emphasis supplied.) The same situation exists
in our present case except that the plaintiff here is in the posi-
tion that the defendant was in the Herrman case (supra). This
reversal of positions in no way adversely affects either the power
vested in the Appellate Division, or the rationale of the Herrman
case, indicating that the exercise of such power was constitu-
tional. The nature of the power which resides in the trial court
and the Appellate Division to raise an inadequate verdict, or to
reduce an excessive one, is exactly the same.

At the end of a jury trial, when the defendant moves to set
aside the verdict as excessive and requests a new trial, the court
may grant such a motion. Upon appeal the appellate court
may reverse the trial court upon condition that the plaintiff
agree to take a lesser sum. It could be maintained that the
defendant has been thereby deprived of a jury trial by the
stipulation of the plaintiff, but such contention was raised before
us in the Herrman case (supra), and we held that it did not
deprive the defendant of a trial by jury.

Exactly the same problem is presented when the plaintiff, at
the end of a jury trial, moves to set the verdict aside on the
ground of inadequacy and requests a new trial. The trial court

Le 473
eens

may grant such a motion. Upon appeal the appellate court
has it within its power, by analogy, to reverse the trial court’s
order granting a new trial, and it may do so on the condition
that the defendant stipulate to pay an increased amount to
the plaintiff.

This exercise of power by the appellate court is exactly the
same in both examples except that it applies to different parties.
In both cases it is the party who moves for the new trial who
invokes the constitutional argument of deprivation of trial by
jury, when the opponent stipulates either to increase or decrease
the amount involved. (It must be remembered that both plain-
tiff and defendant are entitled to demand a jury trial [Civ.
Prac. Act, § 426]). Conversely, it is the person who initially
opposes his opponent’s motion for a new trial, over whose
objection the motion is granted, who then stipulates to increase
or decrease the amount involved.

In essence what transpired in the present case is as follows:
The plaintiff received a verdict in the amount of $1,000 and the
trial court set it aside as inadequate. The Appellate Division
said it agreed with the trial court that it was inadequate and
that the plaintiff was entitled to a new trial. However, the
Appellate Division then offered the defendant the alternative
of paying the plaintiff the maximum amount which the jury
could have found as a matter of law. The Appellate Division
thus ‘‘ properly place[s] a value on the connected injuries as
high as any jury would be warranted in going and give[s] the
defendants the opportunity of stipulating to pay such an
increased verdict in lieu of suffering a new trial.”? The plaintiff
cannot claim that she is. being deprived of her trial by jury
because of the Appellate Division’s action in giving her the
maximum amount she would be allowed to recover by a jury
verdict as a matter of law. Had she received a verdict in excess
of that sum, the Appellate Division could have set it aside as
excessive,

In the present case the Appellate Division is not reversing
a factual finding by the jury ‘‘ upon the right of the parties ’’,
but is affirming their finding of liability; determining that the
damages awarded thereon were inadequate as a matter of law
and announcing the limit of the damages awardable as a matter
of law.

474 ere
ee

One of the defendants raises the issue that plaintiff does not
have an appeal as of right, citing Miogzi v. Armstrong Coal Co.
(283 N. Y. 567), where we dismissed an appeal from a judg-
ment of the Appellate Division unanimously reversing an
order of the Trial Judge for a new trial and reinstating the
verdict. By the settled practice of this court, such a judgment
was considered, prior to 1942, to be tantamount to an affirmance
(see, e.g., Markiewice v. Thompson, 246 N. Y. 235; Garrison v. |
Sun Print. & Pub. Assn., 222 N. Y. 691). That result was
reached because former section 588 of the Civil Practice Act
permitted an appeal as of right from a final judgment or order
“* of reversal or modification ’’ rendered by the Appellate Divi-
sion without specifying what was to be reversed or modified.
Thereafter, section 588 was amended so that subdivision 1 (par.
[b], cl. [ii]) now reads that an appeal as of right is available
when: ‘‘ the appellate division direct a reversal or modification
of the judgment or order appealed from ’’ (emphasis supplied).

As the Judicial Council Report reveals (Highth Annual
Report of N. Y. Judicial Council, 1942, pp. 422, 423), the italicized
words were added to make clear the legislative intent that a
determination of the Appellate Division reversing an order of
the Trial Judge for a new trial and reinstating the verdict, is
to be treated as a reversal for the purpose of an appeal to this
court. (See, also, Matter of Active Fabrics Corp [Rosedale
Fabrics], 299 N. Y. 678; Baillargeon v. Jacques, 299 N. Y. 792.)

The judgment should be affirmed, with costs.

Desmonp, Fup, Frozssen, Van Voornis and Burs, JJ., con-
eur; Dyn, J., taking no part.
Judgment affirmed.
Le
In the Matter of Azz Kusrn, Appellant. Samurn A. Larner,
Respondent.
Argued October 12, 1955; decided January 12, 1956.

6

41 Leer
ere}

Solomon Roshevsky for appellant. I. Absent strict statutory
compliance, Special Term lacked jurisdiction to issue the sub-
pena duces tecum and the order directing appellant to be
examined as a witness. (Matter of Bernhard v. Lefcourt, 233
App. Div. 609; Matter of Isaacs, 148 App. Div. 157; Matter of
Jacobs v. Steinbrink, 242 App. Div. 197; Matter of Mitchel v.
Cropsey, 177 App. Div. 663; Matter of Wellhofer, 18 N. J. Super.
197, 10 N. J. 321; Tiene v. Jersey City, 13 N. J. 478; Matter of
Richardson, 247 N. Y. 401; Massett Bldg. Co. v. Bennett, 4. N. J.
58; North Bergen v. Gough, 107 N. J. L. 424; Prentis v. Atlantic
Coast Line, 211 U. 8. 210; Matter of Hecht v. Monaghan, 307
N.Y. 461.) IL. A jurisdictional objection, as in the case at bar,
is never waived. (Kamp v. Kamp, 59 N. Y. 212; Cameron
Estates v. Deering, 308 N. Y. 24; Matter of Doca v. Federal
Stevedoring Co., 308 N. Y. 44.)

Bertram H. Siegeltuch and Walter M. Weisberg for respond-
ent. I. The issuance of the original subpena and of the order
directing the appearance of appellant was clearly within the
purview of article 30 of the Civil Practice Act. (Matter of
Davies, 168 N. Y. 89.) IL. The New Jersey proceedings in which
the examination is sought are special judicial proceedings within
the meaning and intent of section 310. (Massett Bldg. Co. v.
Bennett, 4 N. J. 58; Tiene v. Jersey City, 13 N. J. 478; Matter
of Wellhofer, 18 N. J. Super. 197, 10 N. J. 321; Matter of
Richardson, 247 N. Y. 401; Matter of Tiene, 33 N. J. Super. 429.)
III. Every interest of public policy and comity dictates an
affirmance of the order below.

Conway, Ch. J. The material facts are not in dispute. Appel-
lant, through his company the Hudson City Contracting Com-
pany, Ine., contracted to remove garbage from Jersey City, New
Jersey. Pursuant to that agreement the company removed
garbage from January 1, 1953, through February 15, 1953, when

Ler 407
ee

the contract was adjudged to be null and void by a judgment
of the Superior Court of New Jersey (see Scatuorchio v. Jersey
City Incinerator Auth., 14 N. J. 72 [1953]).

On January 28, 1953, a petition was filed by forty-nine free-
holders of the City of Jersey City requesting an investigation
into the financial affairs of that municipality, including alleged
corruption in the awarding of the garbage removal contract to
the appellant’s company. The Superior Court of New Jersey,
pursuant to the statute authorizing that petition (Rev. Stat. of
N. J., § 40: 6-1 e¢ seg.), appointed an attorney, the respondent
herein, as ‘‘ Expert’ to take the testimony concerning the
alleged municipal corruption. Since appellant is a resident of the
State of New York, respondent made application to and was
appointed by the Superior Court of New Jersey ““* * * to
appear before such court or courts of the State of New York and
there, in accordance with the rules of practice in the courts of
the State of New York, to apply for the issuance of subpene
commanding the appearance of Abe Klein * * * before him
and to take the testimony of Abe Klein * * * in matters
relevant to the subject inquiry or matters reasonably calculated
to lead to the discovery of relevant evidence’’. Accordingly
respondent Larner came into New York and in January, 1954,
applied to the Supreme Court for a subpoena duces tecum direct-
ing the appellant Klein to appear and to bring with him all his
books, records and other data ‘‘ pertaining to the submission of
bids to the City of Jersey City or to the Jersey City Incinerator
Authority for garbage contract removal by the Municipal Con-
tr acting Company and the Hudson City Contracting Co.

* * |” The subpoena was issued on January 29, 1954, and
was personally served upon the appellant. He failed to appear
on the date specified. Thereafter, on February 16, 1954, appel-
lant moved in the Supreme Court for an order striking out,
vacating and quashing the subpena. That motion was denied.
The Appellate Division affirmed unanimously and we dismissed
a motion for leave to appeal. We also dismissed an appeal
taken as of right, on the ground that the order did not finally
determine the special proceeding (Matter of Klein [Larner],
307 N. Y. 909 [1954]).

Following the denial of appellant’s motion to quash and vacate
the subpoena duces tecum, the respondent Larner sought and

478 Le
|

obtained an order requiring the appellant to show cause why he
should not appear to testify and be directed to bring his books
and records with him. Compliance with that order was stayed
pending an appeal to the Appellate Division from the order
denying the motion to quash the subpena. Thereafter an order
was made directing appellant to appear for examination and to
bring with him the above-mentioned books and records. From
that order Klein appealed to the Appellate Division, which
unanimously affirmed it.

From that affirmance the appellant Klein has appealed by
our permission and has brought up for review the prior affirm-
ance of the order denying the motion to vacate and quash the
subpoena duces tecum (Civ. Prac. Act, § 580).

The issue involves the interpretation and applicability of
section 310 of the Civil Practice Act, which reads as follows:
“ In what cases depositions may be taken. A party to an action,
suit or special proceeding, civil or criminal, pending in a court
without the state, either in the United States or in a foreign
country, may obtain, by the special proceeding prescribed in this
article, the testimony of a witness, and, in connection therewith,
the production of books and papers, within the state, to be used
in the action, suit or special proceeding.’’

However much we may desire to assist a sister State, our
courts may not go beyond the statutory powers granted by our
Legislature. Since this is a matter of procedural law, it is
necessary to examine the statutes and decisions of New York —
the forum—rather than those of New Jersey (see 3 Beale on
Conflict of Laws, p. 1600, § 584.1, pp. 1604-1605; §§ 589.1, 590.1).
The applicability of the quoted statute in matters arising before
the courts of New Jersey has already been considered in New
York. In Matter of Isaacs (148 App. Div. 157 [1911]), a New
Jersey master in chancery obtained a subpena duces tecum
requiring the examination in New York of a resident of our
State with regard to litigation then pending in New Jersey. It
did not appear in the papers on the motion for the subpena that
any issues had yet been raised in the New Jersey controversy.
Accordingly, the Appellate Division set aside the service of the
subpena duces tecum, writing that: ‘‘ The question we have to
deal with now relates to the law and practice of our own State
and not to those of New Jersey. Under our rules issue must

Le! 479
ee

be joined before a subpcena can be directed in a case like the
present, and the evidence sought must be relevant to such issue.
That condition was not shown to exist in the present case ’? (148
App. Div. 158-159).

Not only is the interpretation and applicability of section 310
governed and determined by examination of the statutes and
authorities in our State, but our courts have held that the party
seeking a subpcena pursuant to the statute must comply with and
fulfill strictly its requirements and conditions. That was suc-
einctly stated by the Appellate Division, together with the reason.
therefor, in Matter of Bernhard v. Lefcourt (233 App. Div. 609,
610 [1931]) as follows:

“« Tn order to protect the citizens of this State it has been held
that the moving papers must show that the application is made in
good faith and to promote the ends of justice. The making of the
application is not sufficient. It must appear that the purpose is
proper, that an action is pending and that issues are involved.

“The court had no power to issue a subpoena requiring the
attendance of a person before a commissioner or other official to
testify in an action pending in a foreign State unless there was a
compliance with the statutes permitting such examination.’’
(Cf. Matter of Interocean Mercantile Corp. [Hoops], 204 App.
Div. 284, affd. 236 N. Y. 587.)

Appellant argues that the subpena duces teeum should never
have been issued in the present case for the reason that the New
Jersey investigation for which his testimony is sought is not an
“action, suit or special proceeding ’’ within the meaning of
section 310 of the Civil Practice Act. Before examining the
statutes pursuant to which the investigation was commenced, it
will be helpful to note the meaning given to the terms used in
section 310 by our statutes and decisions.

In New York ‘‘ There is only one form of civil action. The
distinction between actions at law and suits in equity, and the
forms of those actions and suits, have been abolished ’’ (Civ.
Prac. Act, § 8). Our statutes further provide that ‘‘ The word
‘action,’ when applied to judicial proceedings, signifies an
ordinary prosecution in a court of justice by a party against
another party for the enforcement or protection of a right, the
redress or prevention of a wrong or the punishment of a public
offense ’’ (Civ. Prac. Act, § 4; emphasis supplied). We define

480 eee
se

the term ‘ special proceeding ’’ as ‘‘ Every other prosecution by
a party for either of the purposes specified in the last section
* * * (Civ. Prac. Act, § 5.)

Turning now to the present case, the New Jersey statutes (Rev.
Stat. of N. J., § 40:6-1 et seq.) provide that if twenty-five or
more qualified freeholders of the political subdivision involved
swear to and subscribe to a petition setting forth ‘‘ that they
have cause to believe that the moneys of such municipality or
county. are being, or have been, unlawfully or corruptly expended
* * °* 97 then ‘ [a] judge of the superior court may, in his
discretion, make a summary investigation into the affairs of”
such municipality (§ 40:6-1). During any such ‘ summary
investigation ’’, the Judge is given the authority to exercise the
subpeena powers of the Superior Court, and to take or order the
taking of testimony and evidence ‘‘ in similar manner as in civil
actions generally ”’ (§ 40:6-3).

It is noteworthy at the very outset to observe that the New
Jersey Legislature deemed it necessary to authorize, specifically
and expressly, the issuance of subpcene and the taking of testi-
mony ‘‘ in similar manner as in civil actions generally’, Such
a provision would be unnecessary if the New Jersey proceeding
were a normal and customary judicial proceeding. Indeed, it has
been said that the power to compel the attendance of witnesses
is an inherent power of a court of justice in adjudging the
matters before it (58 Am. Jur., Witnesses, § 9, p. 27, and cases
cited). It should be noted in this respect that section 4 of the
General Municipal Law of New York, to be discussed later, which
authorizes a procedure very similar to the one in New Jersey
herein, does not expressly authorize the issuance of such sub-
pone or the taking of testimony or impose a liability for perjury.
Those powers unquestionably exist and are presumed not to
require express authorization in the statute.

In Matter of Hecht v. Monaghan (307 N. Y. 461, 469 [1954]),
apropos of the activities of administrative bodies, we quoted with
approval the language of the Supreme Court of the United States
in Prentis v. Atlantic Coast Line Co. (211 U. 8. 210, 226 [1908])
on the method of ascertaining the nature of a proceeding not
strictly judicial. That quotation was that ‘‘ A judicial inquiry
investigates, declares and enforces liabilities as they stand on
present or past facts and under laws supposed already to exist.

Leeann 481
ee

That is its purpose and end ’’ (emphasis supplied). That is in
accord with the Civil Practice Act (§§ 4, 5). The important
criteria are (1) the presence of parties, (2) the trial and
determination of issues, and (3) a final order or judgment of
rights, duties or liabilities.

The New Jersey statute, however, does not provide for any
determination of issues, or for any final judgment or order —
despite the care with which the subpoena and hearing powers of
the New Jersey Judge are set forth. Rather the New Jersey
law states only that ‘‘ The judge may, in his discretion, appoint
experts to prosecute such investigations, and may cause the
results thereof to be published in such-manner as he may deem
proper ’’ (Rev. Stat. of N. J., § 40:6-2; emphasis supplied).
No mention is made of any adjudication of rights or liabilities.
+No mention is made of any course of judicial action which
is expected to follow such investigations, as, for example,
an indictment which is usually expected to ensue after
a Grand Jury investigation. It is not necessary that the
Judge conducting the investigation take any action of any
kind, for the statute merely says that he ‘‘ may cause the results
thereof to be published in such manner as he may deem proper ”’
(§ 40:6-2). In the counterpart New York statute (General
Municipal Law, § 4) not only does the above language appear,
as it does in the New Jersey law, but in the very next paragraph
of our statute it is provided that: ‘‘ The costs incurred in such
investigation shall be taxed by the justice, and paid, upon his
order, by the officers whose expenditures are investigated, if the
facts in such affidavit be substantially proved, and otherwise,
by the freeholders making such affidavit. If such justice shall
be satisfied that any of the moneys of such town or village are
being unlawfully or corruptly expended, or are being appropri-
ated for purposes to which they are not properly applicable, or
are improvidently squandered or wasted, he shall forthwith grant
an order restraining such unlawful or corrupt expenditure, or
such other improper use of such moneys.’’ (Emphasis supplied.)
The emphasized portions of that paragraph are not permissive,
but mandatory. Thus, in New York, the proceeding is not
merely ‘‘ to investigate as widely and as thoroughly as possible
into the transactions * * * concerned * * * with the
ultimate view of determining whether there was any wrongdoing

482 Lr!
ne

or illegality * * *.7 (See Matter of Tiene, 19 N. J. 149
[1955].) In New York both the imposition of costs as well as the
injunctive order are mandatory if the facts alleged in the petition
be established. In New Jersey, on the other hand, there is no
requirement that costs be paid by the petitioners in the event
they fail to establish their allegations, or by the officers investi-
gated if the charges be proved. Rather the New Jersey law
reads as follows (Rev. Stat. of N. J., § 40:6-2):

“ The judge may, if he deems it advisable, require the appli-
eants to furnish a bond to be filed with the county clerk in such
sum as he may deem necessary for the payment of the costs and
expenditures of the investigation.

‘« The cost incurred in the investigation shall be taxed by the
judge, and upon his order be paid by the disbursing officers of
the county or municipality whose expenditures may have been
investigated.’? (Emphasis supplied.)

On its face, the New Jersey proceeding fails to meet the
requirements of our concept of a judicial ‘‘ action ’’ or ‘‘ special
proceeding ”’, and as we have indicated previously herein (pp.
478-479, supra), it is our definition of terms which is determina-
tive. Under the New Jersey statute there are no parties as such,
there is no trial of any issue, there is no adjudication of rights or
liabilities, there is no power to issue an injunction.

This conclusion as to the nature of the New Jersey investiga-
tion is in harmony with the decisions of the highest court of that
State. In the first case of importance on this subject (Massett
Bldg. Co. v. Bennett, 4. N. J. 53 [1950]), the plaintiffs sought to
restrain the conduct of experts who were making an investigation
pursuant to the statutes involved in the instant case. Those
plaintiffs argued that these statutes impose upon a judge the
performance of nonjudicial duties in violation of article III of
the New Jersey Constitution of 1947, which provided for the
distribution of powers among the three branches of government.
The court, however, pointed out (p. 57) that the doctrine of
separation of powers ‘‘ has nowhere been construed as creating
three mutually exclusive water-tight compartments ’’, with the
implication that there may be an overlapping of powers and
functions among the three branches of government in some cases.
The court then proceeded to distinguish between the New Jersey
law (Rev. Stat. of N. J., § 40:6-1 e¢ seq.) and a similar statute

Leer 483
|

in New York which had been involved in Matter of Richardson
(247 N. Y. 401), (ie., Public Officers Law, § 34, as amd. by
L. 1998, ch. 15).

In the Richardson case (supra) we had said (Canpozo, Ch. J.) :
“* We think there has been an attempt by section 34 of the Publie
Officers Law, both in its original and in its amended form, to
charge a justice of the Supreme Court with the mandatory
performance of duties non-judicial. He is made the delegate of
the Governor in aid of an executive act, the removal of a public
officer (Matter of Guden, 171 N. Y. 529). At the word of
command he is to give over the work of judging, and set himself
to other work, the work of probing and advising. His findings
when made will have none of the authority of a judgment. To
borrow Bacon’s phrase, they will not ‘ give the rule or sentence.’
They will not be preliminary or ancillary to any rule or sentence
to be pronounced by the judiciary in any of its branches.
* * * From the beginnings of our history, the principle has
been enforced that there is no inherent power in the Executive
or Legislature to charge the judiciary with administrative
functions except when reasonably incidental to the fulfillment of
judicial duties (People v. Hall, 169 N. Y. 184; Matter of State
Indust. Comm., 224.N. Y.18,16).’? (247 N. Y. 410.)

In distinguishing the Richardson case (supra), the New Jersey
Supreme Court said (4 N. J. 58-59) :

“‘ There the statute cast a mandatory duty on the justice;
here the judge ‘ may’ act ‘ in his discretion.’ There the justice
acted under an order from the governor directing him to investi-
gate, and he was required to report to the governor; here, if
he does see fit to act, he does not report to anyone. He ‘ may
cause the results of such investigation to be published in such
manner as he may deem proper,’ R.S. 40:6-1. There the
proceedings were directed to the definite end of an executive
removal of a local officer; here the statute had no such definite
goal. The most that may happen at the end of the investigation,
as such, is publication of the results. There the judicial action
infringed on a specific constitutional prohibition; here it is still
to be demonstrated that an investigation into the affairs of local
government is not judicial.

«  # * * Tt cannot be said an investigation into the public
affairs of a municipality or a county is not judicial in nature when

484 ee
ee

it may lead to a civil suit for damages, or a proceeding in lieu
of a prerogative writ, or a grand jury indictment or any one of
a variety of statutory actions. That the statute stops short with
a publication of the results thereof does not prevent the action
being judicial in character, for it may lead to subsequent judicial
action ’? (emphasis supplied).

Further on in that opinion, the court took note of the fact that
under the Revised Statutes of New Jersey judges are called upon
to perform a number of nonjudicial functions, such as making
appointments of county park commissioners, morgue keepers,
water commissioners, ete., serving ‘‘ on boards or commissions
in a nonjudicial capacity ’’, granting licenses, and what the Chief
Justice denominated ‘a heterogeneous group of nonjudicial
responsibilities ’’. (P. 60.) Nowhere in that opinion, however,
does the court state that the investigation is judicial in nature;
rather the opinion is couched in negative terms. Thus it is said
that ‘‘ it is still to be demonstrated that an investigation into the
affairs of local government is not judicial.’’ ‘‘ It cannot be said
an investigation * * * is not judicial in nature”’, ‘ That
the statute stops short with a publication * * * does not
prevent the action being judicial in nature.’? That phraseology,
coupled with the lengthy discussion of the admittedly nonjudicial
duties and functions given to the New Jersey courts and the
tendency of the New Jersey Legislature to delegate some of its
investigative powers to the courts, seems to point clearly to the
nonjudicial nature of the subject investigation.

The next important case was Matter of Wellhofer (10 N. J. 321
[1952]). There the Supreme Court of New Jersey—by a
unanimous court — affirmed a decision of the Superior Court of
that State. In its Per Curiam opinion, the Supreme Court
expressly reserved decision on the question of the power of a
judge conducting an investigation under section 40:6-1 et seq.
of the Revised Statutes of New Jersey to do more than make
findings of fact and publish them. The Supreme Court did not,
however, reverse the negative conclusion reached by the Superior
Court ‘on that issue, and the Supreme Court agreed in all other
respects with the Superior Court. In its opinion that latter
court had written that ‘‘ The proceeding authorized by this
statute does not constitute an ‘ action ’ as that word is generally
defined ”? (18 N. J. Super. 197 [1952]). The definition alluded

ee! 485
bees

to is almost identical with that given in section 4 of our Civil
Practice Act (see p. 479, supra). The Superior Court then
wrote that a proceeding under section 40:6-1 et seg. of the
Revised Statutes of New Jersey, ““* * * results in no
decision as to guilt or innocence, or as to any right of person or
property. The statute merely provides a quasi-judicial [sic]
method of ascertaining and, if the judicial officer should so deter-
mine, of publishing the facts of a very particular and vital
phase of governmental activity’? (18 N. J. Super. 202).

In Tiene v. Jersey City (13 N. J. 478 [1953]), the Supreme
Court of New Jersey considered the very investigation for which
Klein’s testimony has been sought. In its opinion the Supreme
Court quoted approvingly from Massett Bldg. Co. v. Bennett
(4 N. J. 53, supra). The court also said (p. 489): ‘‘ The
purpose of the statute was discussed in North Bergen v.
Gough, 107 N. J. L. 424, 427 (Sup. Ct. 1931): ‘The Legislature
clearly meant this statute to be the channel whereby a minority,
having reason to suspect the unlawful or corrupt use of the
moneys of the municipality, may present their apprehensions to
a justice of the Supreme Court, whereupon that high judicial
officer shall make an investigation, and thereupon, if he be
satisfied of the propriety of so doing, may at his discretion
appoint others, experts, to prosecute the investigation. There
was thus set up a quasi judicial method, not of charging an
offense or causing trial thereof, but of ascertaining and, if so
the judicial officer should determine, of publishing the facts of

a very particular and vital phase of governmental activity
Bo BOD»

In the most recent opinion of the Supreme Court of New Jersey
as to the same investigation (Matter of Tiene, 19 N. J. 149
[1955], supra) it was said: ‘‘* * * in this statutory pro-
ceeding the expert is not restricted to any issues formulated by
a set of pleadings or set forth in a pretrial order. The very
purpose of his appointment is to investigate as widely and as
thoroughly as possible into the transactions in which the finan-
cial affairs of the City of Jersey City were concerned. It is his
duty to pursue his inquiry with the ultimate view of determining
whether there was any wrongdoing or illegality in this regard
limited only by the general scope of his appointment ’’.

486 Le
ee

The cases thus bear out the conclusion previously reached
(supra, p. 482) from an examination of the statutes: an investi-
gation pursuant to section 40 :6-1 et seq. of the Revised Statutes
of New Jersey does not contemplate or involve the formulation
and trial of issues, it does not constitute an adversary proceed-
ing, it does not result in'a final order or judgment adjudicating
the rights and liabilities of parties. It is not, therefore, a judicial
‘action, suit or special proceeding ’’ within the meaning and
intent of section 310 of our Civil Practice Act. Instead this
investigation is a proceeding whose very purpose is a broad and
all-inclusive inquiry into municipal government looking to the
publication of facts as such. Even that final result, however, is
not mandatory, but rests in the discretion of the court. Such
a proceeding does not fall within the definition of ‘‘ action, suit
or special proceeding ’’ as those terms are used in our statutes.
That being so, there was no authority for the issuance of the
subpoena duces tecum, or for the subsequent order directing the
examination of the appellant.

The order appealed from should be reversed, with costs in
all courts, the order directing appellant to appear for examina-
tion vacated, and the motion to vacate the subpena duces tecum
should be granted.

Dzsmonp, J. (dissenting). This simple procedural statute
should be ‘‘ liberally construed ”’ as the Civil Practice Act itself
commands (§§ 2,3). No public policy requires that this law be
so straitly limited in its coverage as to deprive it of its useful
function of facilitating the taking of testimony in this State for
use in judicial proceedings pending elsewhere (see Matter of
Roberts, 214 App. Div. 271, 275). It was our own Legislature,
not some foreign body, which, so long ago as 1867 (see L. 1867,
ch. 68, and, even earlier, Rev. Stat. of N. Y., pt. III, ch. VI,
tit. ID, art. IV, and Eldridge v. Chapman, 13 Abb. Prac. 68, n.),
provided, without qualification or exception, that a party to
an action, suit or special proceeding, civil or criminal, pending
in a court without the state, either in the United States or in a
foreign country might thus obtain testimony in this State. Such
inclusive and sweeping language as ‘‘ action, suit, or special
proceeding, civil or criminal ’’ must have been intended to cover
any and every kind of foreign judicial proceeding, whatever its
name or special features, Our sole inquiry is, therefore, as to

Le 487
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whether the proceedings pending in the Superior Court of New
Jersey under chapter 6 of title 40 of the Revised Statutes of New
Jersey are judicial. Surely, for that we can take New Jersey’s
answer, and that answer is in the affirmative (Massett Bldg. Co. v.
Bennett, 4 N. J. 53; Matter of Wellhofer, 10 N. J. 321; Tiene v.
Jersey City, 18 N. J. 478; Matter of Tiene, 19 N. J. 149). Con-
firmation thereof is available from the fact that our own State
has, under section 4 of the General Municipal Law, an investiga-
tive procedure, ‘‘ unmistakably judicial’? (see Matter of
Richardson, 247 N. Y. 401, 412, 413), which is generally similar
to the New Jersey procedures we are here examining.

The order should be affirmed, with costs.

Frozssex, Van Voornis and Burks, JJ., concur with Corway,
Ch. J.; Desmonp, J., dissents in an opinion in which Funo, J.,
concurs; Dvs, J., taking no part.

Order reversed, with costs in all courts, and matter remitted to
Special Term for further proceedings in accordance with the
opinion herein.

In the Matter of the Accounting of Guaranty Trust Company
or New Yorx, as Substituted Trustee of the Will of Eumur
E. Smaruzrs, Deceased, Respondent. Harrmr B. Myurs,
Appellant; J. Harvey Turnunz, as Special Guardian, et al.,
Respondents.

Argued November 15, 1955; decided January 12, 1956,

Richard H. Levet and William B. Levet for appellant. I. The
burden is upon the trustee to show that it is entitled to extra
commissions under the statute. (Mumford v. Murray, 6 Johns.
Ch. 1; Matter of Corning, 160 Misc. 434.) II. The plain unam-

PC 489
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biguous words of the statute and the basic canons of statutory
construction preclude the allowance of extra commissions to
the trustee. (People v. Ryan, 274 N. Y. 149; People v. Shahun,
251 N. Y. 107; Matter of O’Neil, 91 N. Y. 516; Matter of Chase
Nat. Bank v. Guardian Realties, 283 N. Y. 350; People v.
Dethloff, 283 N. Y. 309; Cooper-Snell Co. v. State of New York,
230 N. Y. 249; Matter of Manufacturers Trust Co. v. Ralph,
276 App. Div. 118, 300 N. Y. 411.) IIL. Under the terms of the
lease, the ultimate responsibility for management of the realty
rests upon the tenant, not the trustee; and the trustee has
neither managed nor become entitled to manage the real prop-
erty. IV. The case of Matter of Brennan (251 N. Y. 39) is
distinguishable from this case, is not applicable to it, nor deter-
minative of the issues of this case. There are substantial and
decisive differences between the facts involved in the Brennan
estate lease and the facts involved in the Smathers estate lease,
and the cases are distinguishable by reason of the different
wording of the statutes involved. V. Statements or comments
made in the Brennan opinion with respect to the merits of the
then effective 1923 statute did not take on the character of a
legally effective precedent, but rather were made as obiter dicta
and should now be treated as such. (Rolfe v. Hewitt, 227 N. Y.
486; Matter of Broderick v. City of New York, 295 N. Y. 363;
Sterling v. Constantin, 287 U. S. 378; O’Donoghue v. United
States, 289 U. 8. 516; Osaka Shosen Line v. United States, 300
U.S. 98; Crane v. Bennett, 177 N. Y. 106.)

Walter D. Fletcher, Edward I. Devlin, Andrew Y. Rogers,
Laurence A. Spelman and Gavin Miller for Guaranty Trust
Company of New York, respondent. I. Respondent trustee
had the right and duty to manage the real property in question
so that, as a matter of law, it is entitled to the additional com-
missions given by subdivision 7 of section 285-a of the Surro-
gate’s Court Act. (Matter of Brennan, 251 N. Y. 39.) II. The
lease in the present case, though not paralleling in all respects
the provisions of the lease in the Brennan case, nevertheless
gives the trustee rights and duties, which clearly bring the
present case within the principle enunciated in the Brennan
case because they are the rights and duties which, present in
the Brennan lease, dictated the result in that case. III. The

490 Le
es

alterations in the relevant portions of section 285-a of the Sur-
rogate’s Court Act are purely formal and do not render the
Brennam case distinguishable. IV. The decision in Matter of
Brennan was not dictum. The decision on the point at issue
in the Brennan case was one of two independent grounds on
which the decision of this court could have rested. In such a
situation neither of the two grounds considered in the decision
can be considered dictum. (O’Brien v. Union Central Life Ins.
Co., 207 N. Y. 180; Matter of Broderick v. City of New York,
295 N. Y. 363; Matter of Sidenberg, 147 Mise. 742; Matter of
Byrnes, 159 Misc. 302.) V. The decision is Matter of Brennan
should be upheld as a valid and correct enunciation of law.
(Matter of Cole, 235 N. Y. 48; Pouch v. Prudential Ins. Co. of
America, 204 N. Y. 281; Matter of Trosk v. Cohen, 262 N. Y.
430; Matter of Scheftel, 275 N. Y. 185; Matter of Popp, 123
App. Div. 2.) VI. There has been no practical construction
of subdivision 7 of section 285-a of the Surrogate’s Court Act
by the conduct of respondent trustee.

Burton C. Meighan, Jr., special guardian for Sidney 8S.
Bradfield and others, infants, respondents.

Froussex, J. On this appeal, we are asked to decide whether,
under subdivision 7 of section 285-a of the Surrogate’s Court
Act, a testamentary trustee is entitled to retain, in addition to
normal commissions under the preceding subdivisions of said
section, extra commissions of 6% on gross rents collected under
the 99-year net lease made by the testator, where there was no
evidence of any specific acts of management by the trustee.

Elmer Ellsworth Smathers died in 1928, leaving a last will
and testament dated December 11, 1926, which was duly admitted
to probate by the Surrogate’s Court of Westchester County.
Thereafter, on December 5, 1930, letters of trusteeship were
duly issued to Guaranty Trust Company of New York (herein-
after called Guaranty), as substituted trustee, in which capacity
it has continued to serve. Among the assets of the estate
were certain premises known as 18 Broadway, New York City,
which were then and are now occupied by Standard Oil Com-
pany of New York (hereinafter called Standard Oil) under a
lease, commencing on March 1, 1920, and continuing until the
last day of February, 2019. This lease was negotiated by the

Le 491

testator himself, and provided for a yearly rental of $250,000,
payable in quarterly installments of $62,500.

As substituted trustee, Guaranty filed four intermediate
accounts covering the period from December 5, 1930, to April 15,
1948, all of which were settled and allowed by the Surrogate’s
Court. The present dispute arose over items contained in the
fifth intermediate account which covers the period from April
15, 1948, to April 15, 1953. This account shows the regular
receipt of rents from 18 Broadway at the rate of $62,500
quarterly, making a total collection for this last accounting
period of $1,250,000. Pursuant to subdivision 2 of section 285-a
of the Surrogate’s Court Act, the trustee has. retained regular
commissions on these collections in the amount of approximately.
$25,000, to which no objection has been made.

For the period. from January 1, 1949, to. June 30, 1953,
Guaranty for the first time retained additional commissions in
the amount of $7,500 semiannually, making a total of $67,500
“‘ Total Extra Commissions’. It is the retention of these extra
commissions to which appellant, an income beneficiary, objects.
Guaranty claims that. it. is entitled to this extra compensation
under subdivision 7 of section 285-a of the Surrogate’s Court
Act, which provides: ‘‘ Where a trustee is for any reason or
cause whatsoever entitled or required to collect the rents of
and manage real property, the net amount of rents collected
and not the gross amount shall be used in making computation
of commissions allowed by subdivision two hereof, and im addi-
tion to the commissions hereinbefore provided he shall be
allowed and may retain for such services six per centum of the
gross rents collected, but there shall be only one such additional
commission regardless of the number of trustees. In the event
that there are two or more trustees the additional commission
herein provided for must be apportioned among them according
to the services rendered by them respectively.’? (Emphasis
supplied.) Appellant contends that under the terms of the
lease and will in this case the trustee is neither required, nor
entitled, to manage said property, and has not done so, and
therefore is not entitled to management commissions under the
provisions of subdivision 7.

The lease is a net lease. Standard Oil, the tenant, is by its
terms granted exceedingly substantial rights which make it the

492 —
ee

virtual owner of the property, subject only to certain contingent
rights in Guaranty, the successor to the original landlord’s
rights. Among the rights and obligations of the tenant are the
following: It assumed the performance of all covenants and
conditions required to be kept by the landlord, ‘‘ the intention
of the parties ’’ being that ‘‘ the Landlord shall be relieved of
all obligations respecting the premises, and shall relinquish all
control over the management of employees and the operation
of the premises, and that the Tenant shall, for all purposes,
assume the Landlord’s rights, privileges and obligations in
reference thereto’? (emphasis supplied) ; the tenant is to make
all repairs and furnish all new fixtures and equipment at its
own expense; in case of fire, the tenant waived all rights to an
abatement of rent; it agreed to indemnify the landlord against
liability for personal injury or property damage “‘ arising out
of the use, occupation, management or control of said prem-
ises ’’; there is no restriction against assignment or subleasing;
the tenant may make party wall agreements, and may demolish.
all existing structures and rebuild without abatement of rent,
without the landlord’s consent or approval, and may use the
premises for any lawful purpose; it is required to pay, in addi-
tion to rent, all taxes, assessments, water rents, utility and
other charges, and remove all liens against the premises.

In case of nonpayment of rents, taxes, assessments, liens, or
in the event of bankruptcy, insolvency, or abandonment of the
premises, the landlord may remove the tenant by summary pro-
ceedings, re-enter and re-let the premises. There has been no
default, actual or threatened.

The only evidence introduced at the hearing was the lease and
the will. Guaranty expressly declined to introduce evidence
showing any specific acts of management on its part. The
Surrogate, though recognizing that the lease in this case was
not the same as the lease in Matter of Brennan (251 N. Y. 39),
held that the ‘‘ assumption and exercise ’’ of the ‘ ultimate
responsibility ’’ for the administration of the demised premises
“ constitutes management within the meaning of the statute ”’
(emphasis supplied), and dismissed the objections. The Appel-
late Division, which affirmed the Surrogate but granted leave
to appeal to us, also recognized that the lease ‘‘ contained pro-
visions by which the landlord was relieved of all obligations

Le 493
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with respect to the management and control of the premises,
and by which those obligations were assumed by the tenant ’’
(emphasis supplied). It nevertheless likewise felt itself bound
by the Brennan case (supra). In our opinion, the lower courts
erred in assuming that Matter of Brennan was controlling, since
we are here concerned with a differently worded statute and a
different fact pattern, as we shall presently point out.

At common law, executors and trustees served without com-
pensation (Matter of Schinasi, 277 N. Y. 252, 258; McWhorter
v. Benson, 1 Hopk. Ch. 28, 32, 40 [1823]; Green v. Winter,
1 Johns. Ch. 26, 37 [1814]; Bogert on Trusts and Trustees,
Vol. 4, pt. 2, p. 354, § 974). In 1817 a statute was enacted
enabling the Court of Chancery to make a reasonable allowance
for the services of guardians, executors and administrators
(McWhorter v. Benson, supra), but it was not until 1866 that
an act was passed which expressly provided that trustees were
entitled to the same commissions (Matter of Roosevelt, 5 Redf.
601, 607-608 [1882]).

The more recent enactments may be briefly noted. By chapter
649 of the Laws of 1923, section 285 of the Surrogate’s Court
Act was amended to provide: ‘‘ Commissions of executor,
administrator, guardian or testamentary trustee. * * *
Where a trustee or executor is, by the terms of the instrument,
required to collect the rents and manage real property, he shall
be allowed and may retain, five per centum of the rents collected
therefrom, in addition to the commissions herein provided.”’
By chapter 892 of the Laws of 1934, the provision relating to
additional commissions was again amended, and it became sub-
division 9 of section 285 and provided: ‘‘ 9. Where an executor,
administrator, guardian or testamentary trustee is, for any
reason or cause whatsoever, entitled or required to collect the
rents of and manage the real property, he shall be allowed and
may retain five per centum of the rents collected therefrom in
addition to the commissions herein provided.’’ By chapter 694
of the Laws of 1943, the provisions relating to trustees were
placed in the new section 285-a, and subdivision 6 of that section
was in somewhat similar form (with some exceptions not here
material) to present subdivision 7 as enacted in 1948 (L. 1948,
ch. 582), quoted above and with which we are now concerned.

494 |
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This subdivision in its present form has not heretofore been
considered by us. In interpreting a statute, it is of course well
settled that we must be guided by the rule that where the
language is clear and unambiguous, the intent of the framers is
to be first sought in the words and language employed and, if |
the words plainly and clearly express the sense of the framers,
there is no reason to resort to other means of interpretation
(Matter of Daniman v. Board of Educ. of City of N. Y., 306
N. Y. 532, 543; Meltzer v. Koenigsberg, 302 N. Y. 528, 525;
Matter of Rathscheck, 300 N. Y. 346, 350).

Turning, then, to subdivision 7 of section 285-a, it clearly
appears that the 6% commission on gross rents collected and
here claimed is ‘‘ in addition to’’ the regular commissions on
net rents ‘‘ collected ’?, as allowed by subdivision 2 (see Matter
of Schinasi, supra, pp. 263-264; Matter of Sidenberg, 147 Mise.
742, 750). These additional commissions are obviously meant
to be compensation for additional services, to wit, for the
management of real property in addition to the collection of
rents. The statute plainly indicates that the additional com-
missions may be retained ‘‘ for such services ’’. Furthermore,
if there is more than one trustee, the additional commissions
must be apportioned ‘‘ according to the services rendered ’’ by
them. Thus, if one trustee performs all ‘‘ such services ’’, he
would be entitled to all the additional commissions, and his
cotrustees would receive nothing; and so, if no trustee performs
any ‘such services’’, no additional commissions may be
retained. The words ‘‘manage’’ and “services ’’ connote
activities, and indicate that the Legislature required some
definite action on the part of the trustee ‘‘ in addition to ” the
mere passive receipt or collection of rents. Subdivision 2 of
section 285-a does not use the word ‘‘ manage ”’ or ‘‘ services ”’,
but simply provides that ‘‘ A trustee shall * * * be entitled
to commissions from the income of the trust ’’ at designated
percentages on the ‘‘ income collected ’’.

Respondent urges that in the event Standard Oil defaults in
the payment of rent, liens or taxes, it may have to re-enter the
premises. We do not think that anticipatory action, however
remote, without more, can be equivalent to the management
required by subdivision 7. The mere collection of rents here
does not involve any more action than collection of interest on

a 495
ee

a bond or mortgage, or dividends on stock, and does not, there-
fore, constitute management. If the Legislature had intended
allowing trustees an additional 6% of the gross rents collected
merely for the receipt thereof, without the necessity of engaging
in some form of active management, it would have said so.
Respondent Guaranty relies heavily on Matter of Brennan
(251 N. Y. 39, supra). Aside from the fact that when we there
held that the Surrogate had no power to modify his own decree
that disposed of the appeal, our further discussion with respect
to the allowance of additional commissions does not sustain the
respondent’s position on this appeal for the following reasons :
(1) The language of the present section 285-a is different
from that of former section 285 as it read when the Brennan case
(supra) was decided in 1929. The phrases ‘‘ for such services ’’
and ‘‘ according to the services rendered by them ’’, heretofore
adverted to, were added by the 1943 and 1948 amendments.
Respondent glosses over this by merely stating that these
amendments are of a purely formal nature and have no bearing
on the question here before the court. To the contrary, we
think these additions are most significant. It is well settled that
in the interpretation of a statute we must assume that the
Legislature did not deliberately place a phrase in the statute
which was intended to serve no purpose (Matter of Zellner
[Brooklyn Trust Co.], 299 N. Y. 248, 247; People v. Dethloff,
283 N. Y. 309, 315), and each word must be read and given a
distinct and consistent meaning (New York State Bridge Auth.
vy. Moore, 299 N. Y. 410, 415-416; Palmer v. Van Santvoord, 153
N. Y. 612, 616). The only reasonable conclusion that can be
reached is that the Legislature clearly intended — and so indi-
cated — that the extra compensation for management can be
retained only “‘ for such services ’’, ie., for the active perform-
ance of the duties and obligations connected with the real
property, and not for just ‘‘ general responsibility ’’ remotely
dependent ‘‘ on future contingency ’’ as respondent contends.
(2) The fact pattern in the Brennan case (supra) is clearly
different from that in the case at bar, and what is said in a judi-
cial opinion must be confined by the facts of the case in which it
was uttered (Crane v. Bennett, 177 N. Y. 106, 112). It is true that
in both leases a number of the standard contingent clauses are
similar, as, for example, the tenant was required to pay all taxes

496 De
ee

and liens; and the landlord reserved the customary right to pay
these charges if the tenant defaulted and to treat them as addi-
tional rent, for the default of which the landlord reserved the
right of re-entry. Both leases also contain the usual provisions
for re-entry if the tenant becomes insolvent.

However, there are substantial differences in the remaining
essential clauses of the two leases which establish that the
Brennan trustee had many duties which it had necessarily to
fulfill, as, e.g., the Brennan lease was negotiated by the trustee,
a very active duty in itself, whereas the subject lease was nego-
tiated by the testator himself ten years before Guaranty had
any interest in this property; the use of the Brennan property
was severely restricted to the operation of a theatre and studio,
whereas Standard Oil may use the property for any lawful
purposes; the landlord could enter upon the Brennan premises
and make repairs; the Brennan tenant could not assign the
lease without the written consent of the trustee; if the building
be totally or partially destroyed, the Brennan tenant was to be
discharged, while Standard Oil will still remain liable for the
rent; the Brennan tenant had to prepare plans and submit them
to the landlord before he could make any alterations, and also
had to secure a bond to cover the cost; and, most significant,
there is no release clause in the Brennan lease comparable to
that in the subject lease, which provides, as hereinbefore more
fully noted, that the ‘‘ Landlord shall be relieved of all obliga-
tions respecting the premises, and shall relinquish all control
over the management of employees and the operation of the
premises.”? (Emphasis supplied.)

Thus, under the Brennan lease, the trustee had continuing
rights and duties of management which do not appear in the
present lease. Indeed, if ever there were a lease where the
landlord had virtually nothing to do but collect rent, this is such
acase. As we said in the Brennan case (supra), it is the ‘‘ ewer-
cise”? of responsibility for ‘‘ directing, supervising, overseeing,
administering and controlling the property ’’ that ‘‘ constitutes
management within the intent of the statute’’ (p. 44). The
evidence here is that Guaranty did nothing beyond receiving
the rent.

In this case, Guaranty has already retained for the accounting
period approximately $25,000 in regular commissions for the

ee 17
bees

collection of rent for these premises which, to all intents and
purposes, are owned by the tenant for a period of 99 years. It
now seeks an additional $67,500 for performing the same acts,
and justifies this by claiming that at some future time it may
have to render active service. If we adopt this view, all trustees
would automatically be entitled to charge, for the mere collec-
tion of rents, an additional 6% based on the gross rents collected,
and there would be no case in which a trustee could be denied
this additional compensation. That result in the instant case
would mean that the trustee would receive additional commis-
sions of close to a million dollars for the remainder of the lease;
and for its total commissions on this property it could retain
an entire year’s rent ($250,000) out of every 1214 years’ income.
Upon this record, it seems clear to us that respondent has no
proper claim to the additional commissions under the statute.

The order of the Appellate Division appealed from should be
reversed, the decree of the Surrogate modified by sustaining
the objections of the appellant, disallowing to respondent addi-
tional commissions under subdivision 7 of section 285-a of the
Surrogate’s Court Act, and the matter remitted to the Surro-
gate for further proceedings not inconsistent with this opinion,
with costs in all courts to the appellant payable out of the estate.

Conway, Ch. J., Dusmonp, Funp, Vaw Vooruis and Burxs, JJ.,
concur; Dvz, J., taking no part.

Order reversed, ete.
Le

Kerstix Swrensson, Appellant, v. New Yorr, Auzany Duspaton
Company, Inc., Defendant, and Warp La France Truck Corp.,
Respondent.

Yoranpa Trimpozs, as Administratrix of the Estate of ANrHony
J. Truaport, Deceased, Appellant, v. Warp La Francs Truck
Core., Respondent.

Argued October 11, 1955; decided January 12, 1956.

g
=

a 8 8 4199

ee

Isadore B. Hurwitz and Solomon Feldman for Kerstin
Swensson, appellant. I. A prima facie case of negligence and
causation was proved. (Didinger v. Pennsylvania R. RB. Co.,
39 F. 2d 798; Piwowarski v. Cornwell, 273 N. Y. 226; Palsgraf
v. Long Is. R. R. Co., 248 N. Y. 339; MacPherson v. Buick Motor
Co., 217 N. Y. 382; Van Dorn v. Jackson Auto Sales, 258 App.
Div. 745, 283 N. Y. 628; Jones v. Raney Chevrolet Co., 217 N. C.
639; Egan Chevrolet Co. v. Bruner, 102 F. 2d 373; Oliver v.
Bereano, 267 App. Div. 747, 293 N. Y. 931; Betzag v. Gulf Oil
Corp., 298 N. Y. 358; Noseworthy v. City of New York, 298 N. Y.
76.) II. The declarations of the deceased driver testified to
by Miss Swensson, to the effect that the brakes were not func-
tioning, were properly admitted as part of the res gestae.
III. The maxim res ipsa loquitur is applicable to this case.
Hence, a prima facie case for the jury to pass upon was made
out. (Galbraith v. Busch, 267 N. Y. 230.) IV. The trial court~
erroneously excluded appellant’s expert witness’ testimony
concerning an inspection of the mechanism made five days after
the happening of the accident. (McCulloch v. Dobson, 133 N. Y.
114; Mironchik v. Sagadahoc S. 8. Corp., 255 N. Y. 81; Peil v.
Reinhart, 127 N. Y. 381; Dydkiewicz v. Unterberg Realty Corp.,
222 App. Div. 485; Mansfield v. City of New York, 119 App.
Div. 199.)

Bernard Meyerson, Solomon Z. Fereiger and Irving D.
Josefsberg for Yolanda Trimboli, appellant. I. There is ample
testimony to support the verdict rendered in favor of plaintiff
administratrix at Trial Term. (Peters v. New York Bd. of Fire
Underwriters, 276 App. Div. 846; Garrow v. State of New York,
268 App. Div. 534, 294 N. Y. 741; Trimble v. City of New York,
275 App. Div. 169; Noseworthy v. City of New York, 298 N. Y.
76.) II. The duty of defendant to see that its tractor was
equipped with proper brakes was absolute. (Donovan v. Garvas,

121 Misc. 24; Oliver v. Bereano, 267 App. Div. 747, 293 N. Y.
931; Van Dorn v. Jackson Auto Sales, 283 N. Y. 628; Elfeld v.
Burkham Auto Renting Corp., 299 N. Y. 336.) III. Defendant’s
counsel took no exception to the charge so they must concede
that the charge is the law of the case. (Saulsbury v. Braun,
223 App. Div. 555, 249 N. Y. 618.) IV. The statements of
deceased were properly admitted in evidence as part of the
res gestae. (People v. Del Vermo, 192 N. Y. 470; Martin v.
New York, N. H. & H. R. R. Co., 103 N. Y. 626; People v.
Sprague, 217 N. Y. 373.) V. There was sufficient evidence to
support the verdict and the Appellate Division erred when it
dismissed the complaint. (Piwowarski v. Cornwell, 273 N. Y.
226; Ingersoll v. Liberty Bank of Buffalo, 278 N. Y. 1; White
v. Lehigh Valley R. R. Co., 220 N. Y. 181; Sagorsky v. Malyon,
307 N. Y. 584; Stein v. Palisi, 308 N. Y. 293.)

John V. Downey, Luke A. Burke, Thomas F. Cohalan, Eugene
J. Smith and John W. Collopy, Jr., for respondent. I. Both
plaintiffs failed to prove the allegations of their complaints that
the brakes of the tractor were defective. II. The evidence by
plaintiff Swensson was hearsay. It was not part of the res
gestae and was, therefore, inadmissible. (Ingersoll v. Liberty
Bank of Buffalo, 278 N. Y.1; Handel v. New York R. T. Corp.,
252 App. Div. 142, 277 N. Y. 548; Waldele v. New York Central
G@ H.R. R. RB. Co., 95 N. Y. 274; Greener v. General Elec. Co., 209
N. Y. 135.) IIL. The Appellate Division properly dismissed
both of plaintiffs’ complaints in the court below. (Higgins v.
Mason, 255 N. Y. 104; Meiteler v. Hill, 233 App. Div. 503; Lahr
vy. Tirrill, 274 N. Y. 112; Malament v. Lidsky, 283 App. Div.
185; Bottalico v. City of New York, 281 App. Div. 339.)

Frozsset, J. Plaintiffs in these consolidated actions have
recovered a judgment against defendant Ward La France Truck
Corp., hereinafter called Ward. The Appellate Division by a
divided court has reversed the judgment and dismissed the
complaints, two of the Justices voting for a new trial. The
majority noted that, if they were not dismissing the complaints,
they too would have granted a new trial upon the ground that
the verdict was contrary to the weight of the credible evidence.

On this appeal, then, we need only consider whether plaintiffs
have established a prima facie case under the law as stated

Leese 501
bree

by the Trial Judge. Since no exception was taken to the charge,
it became the law of the case (Leonard v. Home Owners’ Loan
Corp., 297 N. Y. 103, 104; Buckin v. Long Is. R. BR. Co., 286
N. Y. 146, 149; Saulsbury v. Braun, 223 App. Div. 555, affd.
249 N. Y. 618). Ifa prima facie case has been made out, the
Appellate Division was without power to dismiss the complaint
(Sagorsky v. Malyon, 307 N. Y. 584, 586; Scantlebury v. Lehman,
280 App. Div. 978, affd. 305 N. Y. 713).

Upon this record, the jury was entitled to find the following
facts: On the afternoon of October 23, 1952, a Diamond T
tractor, Model 660, was delivered by Ward to the defendant
New York, Albany Despatch Company, Inc., hereinafter called
Albany Despatch, which latter defendant the jury exonerated.
The tractor was not new, having been repossessed by Ward
earlier that month. At that time it had been driven approxi-
mately 18,000 miles. The tractor was lent by Ward to Albany
Despatch for demonstration purposes, to be taken on a trial
run to Plattsburgh, New York, and return, with a view to its
purchase by the latter if it proved satisfactory. Thus the very
purpose of this trip was to ascertain if the tractor was in good
condition after such a run. It had just been reconditioned by
Ward, and, according to its secretary, ‘‘ the truck was put in
perfect shape ’’.

On the same day, Albany Despatch instructed its employee
Anthony Trimboli to take the tractor with a loaded trailer
attached on an overnight trip to Plattsburgh. Trimboli called
plaintiff Kerstin Swensson and asked her if she would like to
ride upstate with him for a few hours. She agreed and rode
with him all night until the tractor and trailer approached
Plattsburgh early the next morning. Miss Swensson stopped
at a house where she engaged a room in her own name, and went
to sleep, while Trimboli proceeded a little further into Platts-
burgh, and someone else drove the tractor and trailer to Saranac
Lake and return. They again met and left Plattsburgh between
6:00 p.m. and 7:00 p.m. the same evening, riding in the same
tractor which was now attached to a different trailer.

Approximately three hours later, while traveling at about 45
miles per hour, the tractor and trailer proceeded down a slight
incline in the road. At this point the road curved slightly to
the right. Trimboli attempted to put on the brakes and told

Miss Swensson that ‘ the air was gone ’’, and that the regular
brakes did not work either. The tractor and trailer, which
according to a disinterested witness were ‘‘ going along in a
straight line ’’, then went off the road and overturned. As a
result, Trimboli died in the crash and Miss Swensson, who was
pinned in the tractor for four hours, suffered very serious
injuries.

The trial court, in a careful, detailed and comprehensive
charge, to which no exceptions were taken, submitted the case
to the jury on the theory of the driver’s negligence and on the
theory of defective brakes. Then with reference to respondent
Ward herein, the court, pursuant to said’respondent’s request,
charged the jury that “ to find the defendant Ward La France
liable they must find that it furnished or supplied to New York
and Albany Despatch an unsafe vehicle with knowledge that it
was unsafe or that by a reasonable inspection it should have
known that it was not fit and safe for the purposes for which
it was intended.’ The test for respondent’s liability, absent
plaintiff’s contributory negligence, was stated to be: whether
it acted as a person of ordinary prudence would have acted in
using due care in the handling of the tractor in question with
regard to the inspection made and with regard to its condition
when delivered to Albany Despatch. If there was no defect, or
if Ward acted prudently despite a defect in the brakes, the
jury was told that Ward would not be liable. The jury spe-
cifically found for the plaintiffs on the theory that the tractor
was defective and thus not properly inspected. In doing so
they exonerated the driver of negligence. The jury deliberated
almost eleven hours, meanwhile returning to the courtroom
twice to ask pertinent intelligent questions that reflected a high
sense of duty and understanding.

Thus we must determine whether plaintiffs’ evidence pre-
sented facts and circumstances from which respondent’s negli-
gence, and the cause of the accident by that negligence, may be
reasonably inferred (Beteag v. Gulf Oil Corp., 298 N. Y. 358,
365), but plaintiffs were not required to offer evidence which
positively excluded every other possible cause of the accident
(Rosenberg v. Schwartz, 260 N. Y. 162, 166).

Plaintiff Trimboli’s decedent died immediately in the acci-
dent, thus leaving Miss Swensson as the only person whe could

errr 503
ss

testify as to what occurred. As to the death action, the plaintiff
is not held to as high a degree of proof of the cause of action
ag where an injured plaintiff can himself describe the occurrence
(Noseworthy v. City of New York, 298 N. Y. 76). Miss Swensson
stated that as the tractor and trailer rounded the top of the
hill and proceeded around the slight curve to the right and
down the slight incline, it began to gather speed due to its
own weight; the load alone weighed 22,000 pounds. The driver,
Trimboli, as already noted, told her that ‘‘ the air was gone ’’,
and attempted to stop the tractor with a brake that he was
manipulating with his left hand and with the regular foot brakes.
He stated that the other brakes did not work either.

Respondent objected to the admission of Trimboli’s state-
ments about the brakes on the ground that they were hearsay
and not part of the res gestae. There is no doubt that the state-
ments were hearsay declarations, but they fall within a well-
recognized exception to the hearsay rule: that spontaneous
declarations which are part of the res gestae are admissible
(People v. Curtis, 225 N. Y. 519; People v. Del Vermo, 192
N. Y. 470; Scheir v. Quirin, 77 App. Div. 624, affd. 177 N. Y.
568; Richardson on Evidence [8th ed.], § 263, pp. 241-242;
6 Wigmore on Evidence [3d ed.], §§ 1745-1750).

In People v. Curtis (supra, p. 522), the rule was stated thus:
«The admission in evidence of the declarations of an injured
person constitutes an exception to the general rule that excludes
hearsay evidence, and is justified when the declarations are so
spontaneous or natural as to exclude the idea of fabrication.’
And in Scheir v. Quirin (supra), decedent fell into a vat of
boiling liquid, then ran in intense pain into a boiler house about
60 or 70 feet away, and spontaneously cried out: ‘‘ Oh, George,
I am scalded, the plank slipped off and throwed me in.’”? No
one saw the accident. It was held (pp. 628-629): ‘‘In order
to make a declaration of this kind competent it seems to be
settled that it must bear a close relation to the principal trans-
action and that it must be a spontaneous exclamation, an out-
burst of the feelings, and not a mere narration of a past event.”’

This case is almost a classic example of res gestae. Here the
decedent made the spontaneous statement in the course of, and
within ten seconds of the final happening of, the startling event
itself, it related to the circumstances of the event, and was made

504 eee
fn

before he had either time, opportunity or inclination to fabri-
cate. This distinguishes it from the cases cited by respondent,
each of which held the statement to be one of a past narrative,
and therefore inadmissible; in these same cases, the rule as
applied by the trial court here is definitely recognized. As, for
example, we said in Greener v. General Elec. Co. (209 N. Y. 135,
138): ‘‘ The distinction to be made is in the character of the
declaration; whether it be so spontaneous, or natural, an utter-
ance as to exclude the idea of fabrication; or whether it be in
the nature of a narrative of what had occurred.”

It thus appears that the statements made by Trimboli came
clearly within the rule, and were therefore properly admitted
as part of the res gestae. It may be noted in passing that plain-
iff Swensson reported these statements in the hospital emer-
gency room promptly upon her admission, and before having
any counsel. It will be recalled that she also testified Trimboli
had been lawfully driving 45 miles per hour, and that she
observed him trying to use the foot and hand brakes simulta-
neously with his declaration that they did not work, and that,
notwithstanding, the truck gained speed and went off the road.

In addition, plaintiffs introduced unrefuted expert testimony
o the effect that although brake linings can be seen through a
peephole, this is not good practice for inspecting them. The
expert also testified that a brake drum could not be inspected
chrough a peephole, but that it had to be removed, and that the
only proper way to inspect brakes is to pull off the wheels and
examine their parts. In answer to a hypothetical question, he
stated that, under the circumstances of this accident, the tractor
and trailer should have stopped within 15 to 20 feet if the brakes
were working properly. We should keep in mind here that
defendant Ward was a distributor of these tractors, and had
“* yeconditioned ”’ this tractor; it was not the ordinary second-
hand car dealer.

Moreover, Louis La Mothe, a mechanic employed by respond-
ent, testified that he inspected the truck involved in. October,
1952, and found the brakes working properly. But, while he
stated that he looked at the brake linings only through the
peepholes, he had previously testified on an examination before
trial as follows: ‘‘ What inspection did you make of the brake
lining? ”? Answer: ‘“ None.’? He also admitted that he did

505
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not examine the brake drums. Finally, there is the testimony
of the eyewitness to the accident, who stated that the truck
was going in a straight line after it reached the top of the hill
and was not going from one side of the road to the other, which
might be indicative of careless driving.

Of course there was evidence showing that the brakes were
operating efficiently prior to the accident, which the Appellate
Division outlined ‘‘ As against ’’ the plaintiffs’ evidence. Only
a jury is constitutionally endowed with the right to pass on
conflicting evidence, as well as the credibility of witnesses
(Piwowarski v. Cornwell, 273 N. Y. 226, 229).

Despite the evidence tending to show that the brakes were
operating properly before the accident, we certainly cannot say
that ‘‘‘ by no rational process’ could the jury have based a
finding in favor of plaintiffs on the evidence here presented
(Blum v. Fresh Grown Preserve Corp., 292 N. Y. 241, 245-246).””
(Stein v. Palisi, 308 N. Y. 293, 296.) Giving plaintiffs the benefit
of every favorable inference which can reasonably be drawn
from the facts (Sagorsky v. Malyon, 307 N. Y. 584, supra), the
jury could have found that the accident was caused by defective
brakes, and that respondent, a distributor of tractors, who had
allegedly ‘‘ reconditioned ”? this one and put it in ‘‘ perfect
shape ’’, did not use proper care in inspecting and recondi-
tioning it. There is, in support of these findings, the evidence
heretofore outlined.

The mere fact that a piece of machinery functioned properly
on prior occasions does not mean that it was in good condition
at the time of the accident. It had been on the road for over
18,000 miles. This and the trips to Paramus, New Jersey,
Plattsburgh and Saranac Lake could well have weakened an
otherwise readily observable defect in the brakes and finally
caused this accident. We are therefore of the opinion that
plaintiffs made out a prima facie case (Oliver v. Bereano, 267
App. Div. 747, affd. 293 N. Y. 931; see, also, Hlfeld v. Burkham
Auto Renting Co., 299 N. Y. 336; Van Dorn v. Jackson Auto
Sales, 288 N. Y. 628; Jones v. Raney Chevrolet Co., 217 N. C.
693; Egan Chevrolet Co. v. Bruner, 102 F. 2d 373). The
Appellate Division therefore had no power to dismiss the
complaint, but should have ordered a new trial (Sagorsky v.
Malyon, supra).

506 [|
nnn

The judgment appealed from should be modified by providing
for a new trial instead of the dismissal of plaintiffs’ complaints,
and, as so modified, affirmed, with costs to abide the event.

Corway, Ch. J., Desmowp, Futp and Burxs, JJ., concur with
Frosssex, J.; Van Vooruis, J., dissents and votes to affirm upon
the ground that there is no evidence that the accident was caused
by a defective brake drum; Dvs, J., taking no part.

Judgment accordingly.

Dovetas Riruzy et al., Respondents, v. Doveias F. Sronzr et al.,
Appellants, et al., Defendant.

Argued October 17, 1955; decided January 13, 1956.

508 a
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Lawrence E. Bobker and David M. Engelson for Douglas F.
Storer, appellant. I. The three prior adjudications are final
and dispositive of all of the issues in the present action and res
judicata of respondents’ claims herein. (Schuylkill Fuel Corp.
v. Nieberg Realty Corp., 250 N. Y. 304; Evergreens v. Nunan,
141 F. 2d 927, 323 U. S. 720; Johnson v. Muelberger, 340 U. 8.
581; Partmar Corp. v. Paramount Corp., 347 U. 8. 89.)
II. Reversible error was committed by the trial court when it
refused to admit into evidence the testimony and exhibits in
the former adjudications of Justice Haczr and Justice Srevunr.
(Barber v. Ellingwood, 137 App. Div. 704; Peoples Gas & Elec.
Co. v. City of Oswego, 207 App. Div. 134; Hmich Motors v.
General Motors, 340 U. 8. 558; Holland v. Spear & Co., 193 Mise.
524; New York Central R. RB. Co. v. Barnet, 192 App. Div. 784.)

J. Addison Young, I, for Harry HE. Colwell, Jr., appellant.
I. The judgment in the action before Justice Haczr was a bar
to the amendment of the certificate of incorporation sought in
this action. (Lorillard v. Clyde, 122 N. Y. 41; Reich v. Cochran,
151 N. Y. 122; Schuylkill Fuel Corp. v. Nieberg Realty Corp.,
250 N. ¥. 804; Christal v. Petry, 275 App. Div. 550, 301 N. Y. 562;
Wygod v. Makewell Hats, 265 App. Div. 286.) II. The trial
court was in error in not permitting proof at the trial of the
agreements between respondent Ripley and appellant Storer.
(Merrihew v. Kingsbury, 150 App. Div. 40; Milliken v. McGar-
rah, 164 App. Div. 110; Gedney v. Diorio, 190 App. Div. 85;
Goldstein v. Schleifer, 209 App. Div. 899; Road Garage Corp. v.
Marcus, 229 App. Div. 150; Markowitz v. Markowitz, 119 Mise.
609.) ILI. The trial court was in error in finding that the pro-
posed amendments to the by-laws do not violate section 27 of
the General Corporation Law. (Hoyt v. Thompson’s Executor,
19 N. Y. 207; People ea rel. Manice v. Powell, 201 N. Y. 194;
McQuade v. Stoneham, 263 N. Y. 323; Benintendi v. Kenton
Hotel, 294 N. Y. 112; Long Park, Inc., v. Trenton-New Brunswick
Theatres Co., 297 N. Y. 174.)

Walter H. Liebman, Charles Nager and Herbert Robinson for
respondents. I. The prior judgments did not provide that
Storer should ‘‘ control’? the corporation through a “‘ fixed ”’
poard. No such issue was ever pleaded, considered, decided or
adjudicated in the prior actions. There was no unanimous

a 509
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written agreement restricting the size of the board. (Smith v.
Kirkpatrick, 305 N. Y. 66; Karameros v. Luther, 279 N. Y. 87;
Schuylkill Fuel Corp. v. Nieberg Realty Corp., 250 N. Y. 304;
Rudd v. Cornell, 171 N. Y. 114; Fox v. Employers’ Liability
Assur. Corp., 239 App. Div. 671; Evergreens v. Nunan, 141 F.
2d 927.) II. The provisions of Justice Haczr’s judgment were
clear and explicit. There was no claim of ambiguity in the
judgment at the trial. (Barber v. Ellingwood, 187 App. Div.
704; People ea rel. McCanliss v. McCamliss, 255 N. Y. 456; Steel
Co. of Southern California v. Associated Metals & Minerals
Corp., 277 App. Div. 687; Pendleton v. Weed, 17 N. Y. 72.)
IIL. Section 27 of the General Corporation Law does not bar
the adoption of the by-law proposals.

Van Vooruis, J. This is a bitter controversy mainly between
* Douglas Ripley, the surviving brother of Robert L. Ripley who
originated the pictorial series entitled ‘‘ Believe It Or Not’’,
and Douglas F. Storer, who is the president of the corporation
and appears to have been the trusted associate and main assist-
ant of Robert L. Ripley in his lifetime. Storer apparently has
not succeeded in acquiring or maintaining stock control of the
corporation, and Douglas Ripley has—at least through liaison
with Herlart, Inc. Nevertheless, while Storer was in a position
to accomplish it, he succeeded in entering into a ten-year con-
tract with the corporation, dated June 10, 1949, whereby he was
exclusively to represent the corporation in radio, television,
motion pictures and theatres and retain for his services 40% of
all income received in connection therewith. By an extension
of this agreement, Storer’s representation was extended to
“« Believe It Or Not’’ postal cards, toys, puzzles, games and
similar items. By a directors’ resolution in 1951, it was pro-
vided that for the next year and every year thereafter until
terminated by the board of directors, the president (Douglas F.
Storer), and first vice-president (Douglas Ripley, brother of
Robert), shall each be paid 20% of the gross sums earned by the
corporation over and above $100,000 per annum in addition to
their regular salary and/or expenses.
This action for a declaratory judgment was precipitated by
demands by Douglas Ripley and Herlart, Inc., upon the board
of directors to call a special meeting of stockholders to amend

510 a
beers!

the certificate of incorporation to provide that the number of its
directors shall be five instead of three, to be elected by the stock-
holders, and further to amend the by-laws by adding a clause
that no contract between the corporation and any other person
for longer than one year shall be valid unless ratified by affirma-
tive vote of a majority of the stockholders, and that no director
shall be eligible to vote at a meeting of the board of directors
for the ratification of any contract from which he derives any
financial benefit; and further to amend the by-laws so as to pro-
vide that no resolution of the board of directors shall be valid
authorizing payment of a bonus to any officer in excess of 5%
of the corporation’s net annual income, unless approved by a
majority vote of the stockholders — and, further, to provide that
“‘ any such resolution heretofore adopted shall be invalid and
unenforceable unless so ratified and approved.’’

As it now exists, the certificate of incorporation contains a
clause that no such contract shall be affected or invalidated by
the fact that a director is a party to such agreement.

Douglas Ripley is endeavoring to impair or cancel Storer’s
ten-year agreement, and to terminate the resolution of the board
of directors awarding bonuses to Storer and to himself equally.
Inasmuch as the directors’ resolution instituting these bonuses
provides that they shall be continued to be paid until revoked by
another resolution, their payment will continue until a subse-
quent resolution of the board of directors is adopted. Although

. Douglas Ripley is able to control the voting of a majority of the
stock, Storer has working control of the corporation in view of
the circumstance that he aud his associate, Harry E. Colwell, Jr.,
are two of the three directors, the other director being Douglas
Ripley. In a previous action (Storer v. Ripley, 1 Mise 2d 235,
hereafter described as the Hacer action, decided by Mr. Justice
Eaczr, whose judgment was affirmed, 282 App. Div. 950, motion
for leave to appeal denied 282 App. Div. 1061, 306 N. Y. 985),
Storer obtained a declaratory judgment which upheld the valid-
ity of a partly written and partly oral agreement that he and
Harry E. Colwell, Jr. (also appellant here) shall be and con-
tinue to remain directors as long as Storer and one Millar owned
stock. Justice Hacur’s judgment also directed Douglas Ripley
to vote for the election of Storer and Colwell as such directors
in accordance with this agreement. Storer was prompted to

a 511

bring that action in view of steps taken by Ripley, through his
majority stock control, to oust Storer and Colwell as directors.

Thus, at the present time, Storer assumes to be protected by
his agency contract through June 10, 1959, and by his bonus
which he shares equally with Douglas Ripley which by its terms
cannot be cut off as long as he and Colwell elect to continue it
through their majority vote upon the board of directors.

A procedure has been devised in an attempt to nullify Storer’s
continued working control of the corporation, by increasing the
number of directors to five. In that event, although he cannot
remove Storer and Colwell as directors, in view of Justice
Bacrr’s judgment, Ripley can fill two new directorates with
nominees of his own choosing, and then be able to outvote Storer
on the board of directors. He could thus eliminate Storer as
president of the corporation, and cancel Storer’s bonus, pre-
sumably retaining his own. Storer’s ten-year agreement would
not be affected retroactively by the amendment to the by-laws
requiring agreements for more than one year to be ratified by
the stockholders.

There can be little doubt that the agreement whereby Justice
Eacer held that Storer and Colwell cannot be removed as
directors, contemplated that they were to retain working con-
trol. The history of the struggle for control and the inter-
minable litigation between these men since the death of Robert
L. Ripley could, in any event, leave little uncertainty that
the object of the agreement to keep Storer and Colwell on the
board was not ‘‘ mere representation ’’ of Storer’s and Millar’s
interest as stockholders, but was to maintain Storer in practical
control of the corporation which Justice Hacur found had sur-
vived the death of Robert L. Ripley mainly due to his personal
services.

Nevertheless, it has been held in this action that the Haczur
judgment merely continues Storer and Colwell in their positions
as directors, but does not preclude increasing the number of
directors by an amendment to the certificate of incorporation,
pursuant to section 35 of the Stock Corporation Law. Special
Term, affirmed by the Appellate Division, held in this action that
there was nothing in the agreement on which Justice Haczr’s
judgment was based preventing an increase in the number of
directors. In the course of the opinion at Special Term herein,

/

512 |
er

it was said (1 Mise 2d 281, 289): ‘‘If the existing certificate
of incorporation contained a provision against increasing the
number of directors, the right to increase would not exist (Ripin
v. United States Woven Label Co., 205 N. Y¥. 442); and if there
were a written agreement by all the stockholders that the num-
ber shall not be increased, the right to increase would not exist
(Christal v. Petry, 275 App. Div. 500, affd. 301 N. Y. 562). But
as there is no provision in the existing certificate limiting the
right to increase, and no unanimous written agreement of all
the stockholders limiting the right, it follows that the right to
increase is absolute (Christal v. Petry, 275 App. Div. 550, 557,
supra).’? It may well be in the absence in the. certificate of
incorporation of a limitation of the number of directors, that
an agreement limiting the number would need to be made by all
of the stockholders. However, the Hacer judgment stands as
res judicata of whatever issues it decides between these parties.
Therefore, if it determined that the contract in force between
the parties provided that no increase in the number of directors
can be made, it would be too late for Douglas Ripley to question
the agreement underlying that decision upon the ground that the
holders of a few of the shares did not subscribe to it. Having
been held to be a valid and enforcible contract, no party to the
former judgment can attack either the contract or the judgment
which upheld it, and this is true regardless of whether the former
judgment would have been affirmed or reversed if an appeal had
been taken from it to this court. Ripley could no more attack a
portion of the agreement limiting the number of directors, upon
the ground that the contract was not approved by all of the
stockholders, than he could, upon the same ground, renew his
attack upon the part of it which required Storer and Colwell to
be continued as directors.

The rule of res judicata, to be sure, does not apply to a deter-
mination of facts immaterial to the issue decided even though
such facts have been alleged and controverted in the pleadings
(Karameros v. Luther, 279 N. Y. 87). It is, of course, the judg-
ment which is the bar, as stated in Rudd v. Cornell (171 N. Y.
114, 129) and the rule does not prevent the relitigation of a fact
litigated and found in the earlier action if it was irrelevant to
the issues therein and was not necessary to the final judgment.
The classical statement is in Schuylkill Fuel Corp. v. Nieberg

a 513

Realty Corp. (250 N. Y. 304, 306-807) by Carpozo, Ch. J.: A
judgment in one action is conclusive in a later one not only as
to any matters actually litigated therein, but also as to any that
might have been so litigated, when the two causes of action have
such a measure of identity that a different judgment in the sec-
ond would destroy or impair rights or interests established by
the first’. In the case at bar, judgment in favor of plaintiffs-
respondents would impair rights that are protected by the earlier
judgment. It would invalidate the very contract on which
Storer’s and Colwell’s rights depend which are established by
the judgment in the former action. The immediate issue in the
Hacer action was whether Storer and Colwell could be ousted as
directors; it was held by the judgment that they could not be
ousted due to the existence of a binding agreement which pro-
vided, among other things, that they were to continue as directors
for so long as Storer or Millar held stock; the judgment in that
action depended upon the finding of such an agreement, which
formed the sole basis for the judgment; the finding of the
existence of that agreement and the determination by the judg-
ment of rights of the parties arising from it extended to hold-
ing that the entire agreement had been made and was in force
between the parties. Manifestly, in order to constitute a con-
tract, the minds of the parties were found to have met upon all
of the factors entering into the contract, and if this contract
enforced in the prior action provided that the number of
directors was not to be increased, even though no attempt to
increase the number was there involved, that portion cannot be
ignored and other parts of the agreement severed from it and
isolated as though instead of being one contract, it had been a
succession of different agreements.

If this agreement found by Justice Hacer, and enforced by his
judgment, which prevented the majority stockholders from vot-
ing Storer and Colwell out of office, provided not merely that
they should continue as directors, but that, together with Douglas
Ripley, they should be all of the directors of that corporation
for the duration of the contract, then this judicial determination
that such a contract existed between the parties and is enforcible
cannot be relitigated in this action. It was essential to the
decision in that action to find the existence of an agreement, for
the reason that the adjudication that Storer and Colwell con-

|

514 be
bs

tinue as directors was based upon it. Hven though preventing
an increase in the number of directors was not involved in that
action, if any part of the contract which Justice Hacur held to be
in existence were eliminated, that would invalidate the whole
contract (since the contract was entire, and to strike out part of
it would nullify the rest) and it would thus undermine the basis
on which the Hacer judgment was rendered. In the language
of Schuylkill Fuel Corp. v. Nieberg Realty Corp. (250 N. Y. 304,
307, supra) to do so would mean ‘“ that a different judgment in
the second would destroy or impair rights or interests estab-
lished by the first’. That the agreement as found by Justice
Hacer contains a limitation upon the number of directors will
be shown presently. What matters at the moment is that if it
did contain such an item, the Hacur judgment necessarily is
res judicata of this issue.

The continuance of Storer and Colwell as members of this
board as a matter of contractual right and obligation, as the
Haczr judgment held, is intimately connected with the limitation
of the number of directors to three. The evidence in the Hacmr
action, as is soon to be pointed out in more detail, indicates that
the agreement was that for so long as Storer or Millar held
stock, Storer, Ripley and Colwell would be all of the directors
of the corporation. The Hacur judgment found that it was in
the written part of the agreement that Storer and Ripley must
be present to form a quorum at the directors’ meetings. If two
formed a quorum, and a quorum had to be a majority, the con-
clusion would naturally follow that the contracting parties
intended that the board should be limited to three members.
But there are other and further indications that limitation of
the number of directors to three was a portion of the agreement
which Justice Hacur found to have existed between these parties.

Justice Hacer expressly found that the agreement between
the parties consisted of three writings set forth as Exhibits
“A”, “B” and ‘*C’? annexed to the complaint, and of
oral promises. These were not found to be separate agree-
ments, but to comprise one agreement. The judgment in
terms declared: ‘‘ That there is a valid agreement existing
between the plaintiff, Douglas F. Storer, and the defendant,
Douglas Ripley, whereby, among other things, they have
mutually agreed that the plaintiff, Douglas F. Storer, and Harry

a 515

E. Colwell, Jr. shall be and continue to be directors of Believe
It or Not, Inc., ag long as the plaintiff or Donald G@. Millar own
stock in Believe It or Not, Inc., and that such agreement is bind-
ing upon the defendant, Douglas Ripley.’’ (Italics supplied.)

The substance of this portion of the ‘‘ valid agreement ’’ was
found chiefly upon the basis of oral testimony. Concerning this,
the Eagur decision stated (1 Mise 2d 235, 241-242, supra):

‘« Finally, when Millar was induced to indorse the note for
the plaintiff and Ripley to finance the purchase of the 60 shares
of stock, the parties and Millar and Colwell met at plaintiff’s
home and the plaintiff claims that it was then orally agreed that
Colwell, nominated by Millar, should be a director, and that
plaintiff and Colwell should continue as directors as long as the
plaintiff or Millar owned stock in the corporation. The plaintiff,
Millar and Colwell gave testimony in support of such an agree-
ment. Reasonable inferences from all the evidence give support
to the finding of such an agreement. The court was impressed
with the testimony of plaintiff, Colwell and Millar and with their
appearance and demeanor upon the stand. The court believes
and finds that it was the understanding and agreement between
plaintiff and Ripley that the plaintiff and Colwell should continue
as directors as long as the plaintiff or Millar owned stock in the
corporation. The court rejects the testimony of Ripley and his
wife that there was no such agreement,

“‘ Notwithstanding the agreement found was by parol, it was
valid and enforcible. (See Wygod v. Makewell Hats, 265 App.
Div. 286, and Kronenberg v. Sullivan Co. Steam Laundry Co.,
9LN. Y. 8, 2d 144, affd. 277 App. Div. 916.) Such an agreement
is valid notwithstanding all of the stockholders are not parties
thereto. (Lockley v. Robie, 301 N. Y. 371.) ””

‘Whether such an agreement had to be made by all of the
stockholders is not in issue before us now. Under the doctrine
of res judicata, a former adjudication is binding upon the parties
concerning questions necessarily decided, whether of fact or of
law. Justice Hacur specifically mentioned the portions of the
agreement which he found, that ‘‘ among other things’? (to
quote his language) provided that Storer and Colwell were
to continue on the board. When the testimony is examined
upon this subject, it is discovered that the very sentences in
which it was stated that Storer and Colwell should be kept on as

516 Le
ee

directors are interwoven with their mutual promises that the
directorate should remain at three members for the same period
of time. In the conversations forming this part of the agree-
ment, they were talking about control of the company. Justice
Hacur recognizes this in the portion of his decision in which he
said (1 Misc 2d 235, 240, supra): ‘‘ The defendants Ripley and
Herlart, Inc., have been allied in the defense of the action at bar,
and their attorneys concede that they seek to wrest control of the
affairs of the corporation from plaintif’.’’ (Italics supplied.)
Maintenance of control in Storer presupposes no increase in the
number of board members.

What is the substance of this agreement, as found by Justice
Eaczr? The testimony of Storer, Millar and Colwell, which Jus-
tice Hacer credited in support of such an agreement, relates to an
occasion on February 11, 1951, at Storer’s home. Storer testified
that ‘¢ It had been previously decided between Mr. Ripley and
myself and confirmed by me and by Ripley, at that time, that we
would be directors, too, so there would be three directors; Col-
well, Storer, Ripley; and we would remain directors as long as
we held stock.’’ Millar testified concerning this conversation, at
which Ripley and Storer were present, that Storer said that he
and Ripley were buying sixty shares of stock as a joint venture;
that he, Millar, was to have six shares, and that ‘‘ as long as I
had an interest in them, the directors were going to be Ripley,
Storer and Colwell’? (emphasis supplied). Millar further
testified: ‘‘ Also, it was clearly understood that Storer was
going to operate Believe It Or Not because otherwise I
wouldn’t have given him anything.”” The interest in the cor-
poration to which this witness refers was his indorsement of
commercial paper and his status as stockholder. Colwell testi-
fied that the substance of this conversation was as follows:
“¢Q, Have you told us all that was said about who were to be the
directors? A. Yes, sir; simply that we three were to be the
directors, and that’s all there was to that, and everybody agreed
on that.’? (Italics supplied.) This is the testimony on which
Justice Hacer found that Storer and Colwell were to be con-
tinued as directors; and this very language which says that these
three men were to be directors says that they are to be all of
the directors. The agreement found by Justice Hacur neces-
sarily included the latter as well as the former, for it is included

| 517
Es

in the same conversation which his decision says that he credited
and which forms the basis for his judgment. He found this
agreement as a fact in the former action. He stated that he
rejected the conflicting testimony of Ripley and his wife. We
are not passing upon any question of fact; we are merely decid-
. ing a question of law arising from the existence of the agree-
ment which he found as a fact; the undisputed evidence before
us is that Justice Hacer rejected the testimony of Ripley and
his wife, and found that the testimony of plaintiff (Storer),
Millar and Colwell expressed the agreement on the basis of
which his judgment was rendered. The analysis which has been
made shows that the conversation which forms this part of the
contract immediately concerned both the continuance of these
three men as directors and the limitation of the number of
directors to three. The same sentences express both thoughts,
and the ideas coalesce. Storer and Colwell were to control the
operation of the company for the duration of the agreement.
The minds of the parties met upon both of these points, and if
they did not meet on both, they met on neither. If you remove
the part about the number of directors continuing to be three,
it would destroy the whole contract on which these parties agreed.
That would destroy the basis for Justice Hacur’s decision.

It is familiar law that where a contract has been adjudged to
be valid and enforcible, it is thereby rendered binding between
the same parties as res judicata, even though the subsequent
proceedings are on a different cause of action arising out of the
same agreement (50 O. J. S., Judgments, § 712, pp. 168-173).
At page 173, it is written: ‘‘ Another statement of the rule is
that any right, fact or matter in issue, and directly adjudicated
on, or necessarily involved in, the determination of an action
before a competent court in which a judgment or decree is ren-
dered on the merits is conclusively settled by the judgment
therein and cannot again be litigated between the parties and
privies whether or not the claim or demand, purpose, or subject

» matter of the two suits is the same.’’ This rule has been applied
to successive actions arising from different aspects of the same
contract in numerous cases (Larme Estates v. Omnichrome
Corp., 250 App. Div. 538, affd. 275 N. Y. 426; Becker v. New Penn
Development Corp., 271 App. Div. 280, affd. 297 N. Y. 497;
President & Directors of Manhattan Co. v. Parker, 258 App.

518 a

Div. 737; Goldberg v. Eastern Brewing Co., 1386 App. Div. 692).
In the latter case, quotation is made from Secor v. Sturgis (16
N. ¥. 548, 558) as follows: ‘‘ The true distinction between
demands or rights of action which are single and entire, and
those which are several] and distinct is, that the former immedi-
ately arise out of one and the same act or contract, and the latter ,
out of different acts or contracts. Perhaps as simple and safe
a test as the subject admits of, by which to determine whether a
case belongs to one class or the other, is by inquiring whether it
rests upon one or several acts or agreements.’’ This principle
was applied in the Goldberg case (supra) to the doctrine of
res judicata. Here both causes of action manifestly arise out
of the same contract, which is not severable insofar as this issue
is concerned.

The pleadings, decision and judgment in the Haczr trial
were admitted in the record on this appeal. The testimony
was offered in evidence but excluded and marked for identifica-
tion. The established rule is that record evidence which is
clearly identified may be considered on appeal under such cir-
cumstances. ‘‘ This has frequently been decided in respect to
records of judgments, exemplification of bankrupt discharge,
certificates of naturalization, ete. * * * Evidence of this
character is received by the appellate court for the reason that,
being’ in its nature incontrovertible, it would be idle to send the
case back for a new trial for the sole purpose of admitting it.’”’
(Dunham v. Townshend, 118 N. Y. 281, 286; People v. Flack, 216
N. Y. 123, 129; Matter of City of New York [Newport Ave.], 218
N. Y. 274, 279; Matter of Cooper, 93 N. Y¥. 507; Rossbach v.
Rosenblum, 260 App. Div. 206; Cohen and Karger, Powers of
the New York Court of Appeals, § 168.) We may therefore con-
sider the evidence in the Hacmr record, even though it was
excluded, if it be material to the issue as it.clearly is. In Black
on Judgments (Vol. 2, § 624, p. 950), the author states concerning
res judicata: ‘‘ It is now fully settled upon the authorities that
extrinsic evidence, when not inconsistent with the record and not -
impugning its verity, is admissible for the purpose of identify-
ing the points litigated and decided in a former action between
the same parties, when the judgment therein is set up as a bar or
estoppel in the case on trial.”? (Citing Carleton v. Lombard
Ayres & Co., 149 N. Y. 187.)

| 519
Leer

Evidence received upon a former trial is admissible where it
is necessary in order to clarify what was decided by the judg-
ment in cases where the rule res judicata is invoked (Barber v.
Ellingwood, 187 App. Div. 704, 708; 2 Freeman on Judgments
[5th ed.J, § 771; Peoples Gas & Elec. Co. v. City of Oswego, 207
App. Div. 134, 139; New York Central R. R. Co. v. Barnet, 192
App. Div. 784, 786-787). Under these authorities, the testimony
in the trial before Justice Hacer, which has just been analyzed,
should have been admitted. It demonstrates that the same con-
tract precludes increasing the number of directors which was
held to require the continuance of Storer and Colwell as directors
in the prior action.

For these reasons, the judgment in Storer v. Ripley (1 Mise
2d 235, affd. 282 App. Div. 950, motion for leave to appeal denied
306 N. Y. 985, supra) is conclusive and requires that the judg-
ment appealed from should be reversed and the amended com-
plaint dismissed insofar as it asks for an adjudication that
plaintiffs-respondents may insist upon calling a special meeting
of stockholders to increase the number of directors to five, and
amend the by-laws accordingly.

The judgment of Special Term as affirmed by the judgment
appealed from should be modified in the following respects:

Paragraph 1 (cl. [a]) is eliminated;

Paragraph 8 is eliminated insofar as it refers to clause (a) of
paragraph 1;

Paragraph 4 is unchanged except as otherwise provided in the
modifications of paragraph 7;

Paragraph 5 is unchanged except as otherwise provided in
the modifications of paragraph 7;

Paragraph 6 is unchanged except as otherwise provided in
the modifications of paragraph 7;

So much of paragraph 7 is eliminated as dismisses the defenses
of res judicata based upon the judgment rendered by Mr. Justice
Eager ; and it is further amended so as to provide that no amend-
ment to the by-laws permitted by the judgment to be entered
upon the remittitur herein shall impair any existing contractual
right under any contract heretofore made between Believe It Or
Not, Inc., and either appellant, nor shall it render him ineligible
to participate in making or voting for the ratification of any

520 ee

contract of a type described in paragraph 1 (cel. [b], subd. [2])
of this judgment between said corporation and parties other than
its directors from which either appellant may derive commis-
sions or other benefits under now existing contracts; nor shall
any such amendment to the by-laws operate retroactively so as
to impair any resolution of the board of directors heretofore
adopted;

Paragraph 8 is eliminated.

As so modified, the judgment should be affirmed, with costs of
this action in all courts to the appellants against the plaintiffs-
respondents.

Conway, Ch. J., Dusmonp, Fuxp, Frozssen and Burgz, JJ.,
concur ; Dys, J., taking no part.

Judgment modified and matter remitted to Special Term for
further proceedings in accordance with the opinion herein and,
as so modified, affirmed, with costs in all courts to appellants
against plaintiffs-respondents.

a
In the Matter of Brooxuyy Hosprtan et al., Appellants, against
Mary Downton, as Chairman of the Workmen’s Compensation
Board of the State of New York, Respondent.

Argued January 12, 1956; decided February 16, 1956,

521

Emanuel Hayt for appellants. I. The legislative background
of the 1935 amendments to the Workmen’s Compensation Law
irrefutably indicates that the statutory provisions were directed
at the control of medical abuses and fees of physicians. (People
v. Ryan, 274 N. Y. 149; Woollcott v. Shubert, 217 N. Y. 212.)
II. The Legislature in the 1935 amendments specifically
excluded ‘‘ hospital service ’’ from the provisions of section 13-a
authorizing the Chairman of the Workmen’s Compensation
Board to promulgate a fee schedule for ‘‘ medical treatment and
care’? by physicians. (Bogarte v. Astor, 182 Misc. 214, 268
App. Div. 795, 293 N. Y. 763, 293 N. Y. 563; Travelers Ins. Co. v.
Padula Co., 224 N. Y¥. 397; Palmer v. Van Santvoord, 153 N. Y.
612; Riggs v. Palmer, 115 N. Y. 506; Matter of Thomas, 216
N. Y. 426; Lester v. Otis Elevator Co., 90 Misc. 649, 169 App.
Div. 613; People ex rel. Scharff v. Frost, 198 N. Y. 110.) II.
The rule of ejusdem generis excludes ‘‘ hospital service ’? from
the phrase ‘‘ such medical treatment and care’. (People v.
Weinstein, 202 Mise. 171; St. Luke’s Hosp. v. Godet, 171 Mise.
7; Matter of Tonis v. Board of Regents, 295 N. Y. 286; Matter

522 Le

of Watson, 144 Mise. 213; Matter of Clonan, 176 Misc. 557; Mat-
ter of Stradar v. Stern Bros., 184 App. Div. 700; O’Brien v.
East Riv. Bridge Co., 161 N. Y. 539.) IV. The Attorney-General
of New York State has ruled that section 13-a of the Workmen’s
Compensation Law, as amended in 1935, does not authorize the
Chairman to establish a schedule of charges for hospital serv-
ices. V. No legislation enacted subsequent to the 1935 amend-
ments has given authority to the Chairman to promulgate a
hospital rate schedule. (Matter of Quinby v. Public Service
Comm., 223 N. Y. 244; Town of Mamaroneck v. New York Inter-
urban Water Co., 126 Misc. 382.) VI. The statute should be so
construed as not to cause ‘‘ objectionable results’. (People v.
Ryan, 274 N. Y. 149; Wilmerding v. Bonaschi, 166 Misc. 140;
Szold v. Outlet Embroidery Supply Co., 274 N. Y. 271; Matter
of Messenger v. Chemung Foundry Corp., 234 App. Div. 810.)
VII. Appellants are aggrieved persons within the purview of
article 78 of the Civil Practice Act, with concomitant right to
challenge the validity of the Chairman’s order. (Bullock v.
Cooley, 225 N. Y. 566; Kings Co. Lighting Co. v. City of New
York, 176 App. Div. 175; City of New York v. New York City
Ry. Co., 193 N. Y. 543; Federation of Labor v. McAdory, 325
U. S. 450; Perkins v. Lukens Steel Co., 310 U. 8. 118; Ivory v.
Edwards, 278 App. Div. 359, 304 N. Y. 949; Connelly v. Depart-
ment of Agric. € Markets, 162 Mise. 73; Anti-Fascist Comm.
v. McGrath, 341 U. 8. 123; Columbia System v. United States,
316 U. 8. 407; Matter of Kuhn v. Curran, 294 N. Y. 207;
Wardrop Co. v. Fairfield Gardens, 237 App. Div. 605; Mayflower
Farms v. Ten Eyck, 297 U. 8. 266.)

Jacob K. Javits, Attorney-General (Abe Wagman, James O.
Moore, Jr., and William Alpert of counsel), for respondent.
I. Respondent acted wholly within the scope of her statutory
authority. (Matter of Cook v. New York Central R. R. Co.,
296 N. Y. 576; Bethlehem Shipbuilding Corp. v. Monahan, 62 F.
2d 299; Matter of Rodriguez v. New York Dock Co., 288 N. Y.
710; Matter of Dorfman v. Levine, 260 N. Y. 665; Szold v. Outlet
Embroidery Supply Co., 274 N. Y. 271; Meltzer v. Koenigsberg,
302 N. Y. 523; Matter of Di Brizei [Proskauer], 303 N. Y. 206;
Matter of Daniman v. Board of Educ. of City of N. Y., 306 N. Y.
582; Puerto Rico v. Shell Co., 302 U. S. 253; Barr v. United

ee 523

States, 324 U. S. 83.) IL. There is no substance to appellants’
contention that the administrative order brings about ‘‘ objec-
tionable results ”’.

Dusmonp, J. In this article 78, Civil Practice Act, proceeding
the petitioners are Brooklyn Hospital, a nonprofit charitable
hospital in the Borough of Brooklyn, and Hospital Association
of New York State, a domestic membership corporation formed
by 277 member hospitals, some ‘‘ voluntary ’’ and some operated
by governmental agencies. The proceeding was brought to pre-
vent the enforcement of an order made by respondent Donlon,
as Chairman of the New York State Workmen’s Compensation
Board, which order, so far as pertinent, fixes in workmen’s
compensation cases a $14 per day fee for bed, board, routine
nursing, ordinary dressings and drugs in hospitals with 50 or
more beds and a fee of $11.25 per day for similar services and
accommodations in hospitals with 49 beds or less, The order
further directs that: ‘‘ The total charge for all services ren-
dered in any case shall not exceed the total charge for like
services which would be made to a self-paying patient in a
non-compensation case at the minimum established fees for the
particular hospital, in the event the hospital fees in such non-
compensation cases are lower than the fees provided by this
schedule.’? The parties agree that the effect of this order is
to fix a $14 daily fee per bed in a semiprivate room in a non-
public hospital ($11.25 per day in smaller hospitals) with the
proviso that the per diem charge per bed for any workmen’s
compensation case in any private hospital shall not be higher
than the hospital’s regularly established minimum fees for
such accommodations when furnished to a self-paying patient.
Fundamentally, the complaint of the private hospital against
this mandate is that it compels the hospitals to furnish hospital
accommodations in workmen’s compensation cases at prices no
higher than those that the hospitals themselves have established
for self-paying patients. This means, according to the private
hospitals, that insurance companies and self-insured employers
in workmen’s compensation cases not only get the benefit of
minimum fees which have been fixed below cost for needy people
but, so the private hospitals say, the order means also that the
deficit resulting from their charitable practices must be made

524 re
ee

up by public giving to the hospitals, all to the benefit of the
insurers and self-insured employers. The legal propositions
advanced by petitioners against the validity of this order are
two: first, that there is no statutory authority whatever for the
fixation by the Chairman of any fees for hospital services and,
second, that if the court should find such authority to exist,
the terms of this particular order are arbitrary. Actually, that
second point can hardly be said to be argued at all in appellants’
brief. The reason for that scanty treatment is, presumably,
that appellants have to admit that if power existed for the
making of any such hospital fee schedule, there would be a
presumption that the Chairman had not acted without any basis
whatever. Appellants would thus have the burden, which they
have not met, of proving affirmatively that the fees as fixed are
arbitrary. This appeal, therefore, really deals with one ques-
tion only, that is, as to whether any statute authorizes the
making by the Chairman of a schedule of charges for private
hospitals in workmen’s compensation cases. Both courts below
held that the power existed, but there was one dissent at the
Appellate Division, thus entitling petitioners to an appeal here
as of right. Special Term had held there was statutory author-
ity for an order like this in subdivision (a) of section 18 of the
Workmen’s Compensation Law.

When petitioners appealed to the Appellate Division, First
Department, the majority wrote no opinion but the brief dis-
senting memorandum said that subdivision (a) gave the Chair-
man no such rate-fixing authority and that if this statute’s
language left any doubt as to the authority given, that doubt
is removed by a study of the history of the law. It is undis-
puted, of course, that the Chairman has no such power unless
it be given her by an express statute. We are reversing the
orders below since we are in entire agreement with the dissent-
ing view in the Appellate Division that not only does subdivision
(a) of section 13 of the act not confer such a power in terms
but there is every reason to conclude that the Legislature never
intended to grant any such power.

If such a rate-scheduling power appears in any statute, it
must be found in the second paragraph of subdivision (a) of
section 13 which does not contain the word ‘‘ hospital ’’ or any
language suggesting to our minds that it is intended to refer to

re 525
ee

hospital services. Except for the last sentence, which has
nothing to do with our question, that second paragraph of sub-
division (a) of section 18 has remained unchanged since it was
first enacted by the Legislature by chapter 258 of the Laws of
1935. It directs the Chairman to prepare and establish a
schedule, either for the State or for limited parts of the State,
‘of minimum charges and fees for such medical treatment and
care’’. The second sentence of that second paragraph directs
the Chairman before preparing such a schedule or schedules
to ask the president of the Medical Society of the State
of New York for a report as to the charges deemed by that
society to be fair and adequate for the types of medical care
to be rendered in compensation cases, the Chairman being fur-
ther directed to give consideration to the views of other inter-
ested parties. The third sentence of that second paragraph
says that the amounts paid by an employer for such treatment
and services in compensation cases shall not be less than the
charges fixed in such a schedule. The fourth sentence permits
the payment of higher fees by agreement but says that ‘‘ no
physician rendering medical treatment or care may receive
payment in any higher amount unless such increased amount has
been authorized by the employer, or by decision as provided in
section thirteen-g ’’ of the act. Thus, the fees which the Chair-
man may fix by schedule are specified as those for ‘‘ such medi-
cal treatment and care’’. Hospitals and hospital services are
nowhere mentioned, it is the president of the State Medical
Society who is to be consulted, and the only prohibition against
charging higher fees is against the ‘‘ physician’’. All of this
on its face means to us that the schedule-fixing power was
intended to apply to the fees of physicians only. The first
paragraph of subdivision (a) of section 13, that is, the para-
graph just ahead of the schedule-fixing authorization paragraph,
requires the employer to provide necessary ‘‘ medical, surgical
or other attendance or treatment, nurse and hospital service,
medicine, crutches and apparatus ’’. The next sentence of that
first paragraph makes the employer liable for those same
expenses, again listing ‘‘ hospital service ’’, Thus, when the
statute wished to make clear that a statutory mandate included
hospital charges it said so. When it came to authorizing a
schedule of fees, the word ‘‘ hospital’? was omitted while the

526 |
pe

word ‘‘ medical ’’ was left in and there were references to the
president of the State Medical Society and to ‘‘ physicians ’’.
Undoubtedly, this was the basis for an opinion by the Attorney-
General given to the then Industrial Commissioner in December,
1936. That opinion of the Attorney-General points out that the
1935 legislation, referred to above and part of which is sub-
division (a) of section 18, was passed in response to a 1934
message of the Governor, that the message referred to abuses
by physicians with no mention of hospitals, and that, since the
1935 amendment itself did not mention hospitals, the statute
does not authorize the establishment of fees for hospitals as
distinguished from fees for physicians. From the date of that
opinion, so far as appears, down to the making of the order
here under review in October, 1954, a period of nearly eighteen
years, none of the successive officials heading the Workmen’s
Compensation Board ever attempted to establish any schedule
of fees for hospitals.

Our attention is called to two reports made in 1932 (N. Y.
Legis. Doc., 1932, No. 83) and 1934 (N. Y. Legis. Doc., 1934,
No. 75), respectively, the first to Governor Roosevelt by the
so-called Cullman Committee, and the second to Governor
Lehman by the so-called Pool Committee. We find nothing in
either report suggesting that there should be a grant of power
to make schedules for hospital fees, although the Pool Com-
mittee did discuss at some length overcharges by physicians
and the need for schedule-fixing powers to correct this. The
Cullman Committee discussed various problems of hospitals but
said nothing about scheduling hospital fees. The 1935 amend-
ments were undoubtedly the direct result of suggestions made
to the Legislature by Governor Lehman in 1934 and the second
paragraph of subdivision (a) of section 13 is almost identical
with the wording of a statute proposed by Governor Lehman,
the changes being such as not to affect our question.

The Chairman argues that the phrase at the beginning of the
second paragraph of subdivision (a), referring to a schedule
for fees for ‘‘ such medical treatment and care ’’, refers back
to similar language in the first paragraph. This is not persua-
sive since in the first paragraph, when the Legislature intended
to cover hospital matters as well as medical matters, it used
both the words ‘“‘ medical’? and “ hospital’’. The Chairman

| 527
bs

says, correctly, that liability (of carriers and employers) for
hospital as well as medical expenses was mandated by the ‘act
long before the 1935 amendment (supra), but that, we think,
misses the point. The point is that when in 1935, pursuant
to recommendation of the Governor and because of abuses
reported to it, the Legislature took up the question of fee
schedules, it referred to ‘‘ medical ’’ fees and, so it seems to us,
made it plain that the reference was to physicians’ charges.
This is confirmed by the fact that the two reports above
referred to, and the later message of Governor Lehman, dis-
cussed excessive fees by physicians but said nothing at all about
excessive fees by hospitals. The Chairman calls to our attention
that section 13-g of the act headed ‘‘ Payment of bills for medi-
eal care’’ deals with physicians’ bills and hospital bills and
provides for arbitration procedures in case of disagreements
as to any such bills. Those provisions were part of the same
1935 amendments accomplished by chapter 258 of that year but,
here again, when the Legislature wished to cover both medical
care charges and hospital charges, it said so in so many words.

The order appealed from should be reversed, and the prayer
of the petition should be granted, vacating and setting aside
the chairman’s order of October 1, 1954, with costs in all courts.

Conway, Ch. J., Fup, Fromssen, Van Voornis and Burxs,
JJ., concur; Dyn, J., taking no part. :

Order of Appellate Division reversed, with costs in all courts,
and matter remitted to Special Term for further proceedings
in accordance with the opinion herein.

Murow M. Fimenr et al., on Behalf of Themselves and All Other
Tenants of Glen Oaks Village, Inc., Similarly Situated, Appel-
lants, v. Guzw Oaxs Viixacs, Inc., et al., Respondents.

Argued January 10, 1956; decided February 16, 1956.

529

Max Goldweber and Paul H. Tannenbawm for appellants.
I. Plaintiffs have a cause of action against defendants in tort
and in contract under the National Housing Act. (Benner v.
Atlantic Dredging Co., 184 N. Y. 156; Case v. First Nat. Bank,
59 Mise. 269; Carlin v. New York, N. H. é H. R. R. Co., T1 Mise.
521; Brinkmann v. Urban Realty Co., 10 N. J. 118; Koenig v.
Patrick Constr. Corp., 298 N. Y. 313; Chotapeg, Inc., v. Bullowa,
291 N. Y. 70; Schmidt v. Merchants Desp. Transp. Co., 270 N. Y.
287; Lawrence v. Fou, 20 N. Y. 268; Strong v. American Fence
Constr. Co., 245 N. Y. 48; Seaver v. Ransom, 224 N. Y. 233;
Rigney v. New York Central & H. R. R. RB. Co., 217 N. Y. 31;
Farnsworth v. Boro Oil & Gas Co., 216 N. Y. 40; Parkin v.
Damen-Ridge Apits., 348 Ill. App. 428.) II. Plaintiffs have
stated three causes of action against defendants under general
principles of common law separate and apart from the National
Housing Act. (Wise v. Tube Bending Mach. Co., 194 N. Y. 272;
Clayton v. Farish, 191 Mise. 1386; House of Westmore v. Denney,
151 F. 2d 261; Sweet v. State of New York, 195 Misc. 494;
Abrams v. Allen, 297 N. Y.52; Advance Music Corp. v. American
Tobacco Co., 296 N. ¥. 79; Opera on Tour v. Weber, 285 N. Y.
348; Aikens v. Wisconsin, 195 U. 8. 194; Rager v. McCloskey,
305 N. Y. 75; Rochette & Pareini Corp. v. Campo, 301 N. Y. 228.)
III. The Supreme Court has jurisdiction of the subject matter
of all causes of action. (Condon v. Associated Hosp. Service,
287 N. Y. 411; Great Northern Ry. v. Merchants Elevator Co.,
259 U. S. 285; Jones Co. v. Burke, 306 N. Y. 172; Hewitt v. New
York, N. H. & H. R. RB. Co., 284 N. ¥. 117; Clayton v. Farish,

530 |

191 Misc. 186; Barile v. Fisher, 197 Misc. 493; Wasservogel v.
Meyerowitz, 300 N. Y. 125; Matter of Schmoll, Inc., v. Federal
Reserve Bank of N. Y., 286 N. Y. 503.) IV. A cause of action is
sufficient if plaintiffs are entitled to any portion of the relief
sought. (Steisel v. Gratzer, 272 App. Div. 673; Bloom v. Gelb,
227 App. Div. 619; Vella v. United States Fidelity & Guar. Co.,
245 App. Div. 339; 39th-4oth Corp. v. Port of N. Y. Auth., 188
Misc. 657.) V. Plaintiffs should be given the opportunity to
amend the complaint if insufficient facts are stated to constitute
a cause of action, (Morris v. Flint & Bradley, 277 App. Div.
1025; Douchkess v. Campbell, 272 App. Div. 795; Viola v.
De Stefano, 277 App. Div. 999.)

Leonard G. Bisco, Charles Goldman, Harold P. Goldman and
John E. Higgiston, Jr., for respondents. I. This State court
may not either reduce or question the amounts of the maximum
rents as fixed by the Federal Housing Commissioner or the
amounts of the F.H. A.-insured mortgages as approved by the
commissioner. (Wasservogel v. Meyerowitz, 300 N. Y. 125;
Parkin v. Damen-Ridge Apts., 348 Ill. App. 428; Brinkmann v.
Urban Realty Co., 10 N. J. 118; Montana-Dakota Co. v. Public
Service Co., 341 U. 8. 246; Kaskel v. Impellitteri, 306 N. Y. 73;
Schieffelin v. Komfort, 212 N. Y. 520; Burbrooke Mfg. Co. v.
St. George Teatile Corp., 283 App. Div. 640; Rosner v. Textile
Binding & Trimming Co., 300 N. Y. 319; Rosenbluth v. Sacka-
dorf, 190 Mise. 665; Uléramares Corp. v. Touche, 255 N. Y¥. 170.)
II. Tenants of F.H.A.-insured projects have no standing to
question or attack the maximum rentals fixed by the commis-
sioner, the amounts of insured mortgages, the ground rentals
payable by their landlord, the amounts of profits earned by the
owner or the distribution thereof to the owner’s stockholders.
(Stark v. Wickard, 321 U. S. 288; United States v. Emory, 314
U. S. 423; Perkins v. Lukens Steel Co., 310 U. 8. 118; Seiden v.
Larson, 188 F. 2d 661, 341 U. S. 950; Clement Martin, Inc., v.
Dick Corp., 97 F. Supp. 961.) III. The tenants can have no
possible rights where the owner has not exacted rents in excess
of the maximum rentals fixed by the commissioner. It is not
alleged and it is not the fact that the maximum rentals so fixed
have at any time been exceeded. (Rager v. McCloskey, 305
N. Y. 75; Globerman v. Grand Central Parkway Gardens, 281

App. Div. 820; Northridge Coop. Sec. No. 1 v. 32nd Ave. Constr.
Corp., 286 App. Div. 422; Choy v. Farragut Gardens, 131 F.
Supp. 609.) IV. Even if the tenants had the standing to main-
tain this action, they cannot question the amount of the mort-
gages because the ultimate costs proved to be less than the
commissioner’s estimates; the amounts of these mortgages are
not determined by any estimates submitted by the mortgagor
nor by the actual results of performance but only by the amount
“‘which the Commissioner estimates will be the necessary
current cost’? of the complete project. V. There is nothing
that an amendment could improve and the orders and judgment
appealed from should be affirmed in all respects.

Drsmonp, J. Plaintiffs sue on their own behalf and on behalf
of the other tenants in eleven apartment houses, all owned in
one form or another by the defendants considered as a group.
The substance of the complaint is this: that by committing
various kinds of wrongs defendants were able to procure the
Federal Housing Authority (F. H. A.) to insure mortgage loans
on these buildings in excessive amounts, with the alleged result
that the rent schedules approved by F. H. A. authorities for
these tenants were greatly in excess of reasonable rentals, on
account of all of which plaintiffs demand money damages. All
the defendants moved at Special Term, under subdivisions 1
and 4 of rule 106 of the Rules of Civil Practice, to dismiss the
complaint on the ground that the court did not have jurisdiction
of the subject of the action, and on the second alleged ground
that the complaint does not state facts sufficient to constitute
a cause of action. This motion, which was heard on the com-
plaint alone, was granted, with an opinion holding, in substance,
this: that this complaint cannot stand in any of its parts because
it is a collateral attack on a determination of the Federal Admin-
istrator, and that for reasons stated this cannot be considered a
Lawrence v. Fou (20 N. ¥. 268) type situation. Plaintiffs
appealed to the Appellate Division, Second Department, which
affirmed with a brief memorandum. There was in that court one
(lissent, principally on the ground that these tenants are beue-
ficiaries of the National Housing Act ‘‘ and have a direct right
of action against the owner if the latter violates the act or the
resolutions adopted thereunder ’’, citing a New Jersey case and

582 es
ee

an Illinois case to both of which decisions we will refer here-
after. The dissent suggests that plaintiffs might in this action
obtain a determination compelling defendants to file a new rent
schedule and that the fixation of plaintiffs’ damages might then
await the fixation by Federal authorities of new rents based on
the true facts.

This lengthy complaint sets up five causes of action. The
first three are almost identical and will be called herein the
“fraud ’’? counts. The fourth count alleges, in effect, that
defendants were guilty of ‘‘ gross negligence ’’ in overestimating
the cost of construction of these buildings as a basis for obtain-
ing $24,000,000 in mortgages. The fifth and last count says that
defendants constructed the development in an inferior manner
at a cost of several million dollars less than what the cost would
have been if defendants had complied with the drawings and
specifications. Section 608 of the National Housing Act (U.S.
Code, tit. 12, § 1743, passed in 1942, but as here applicable
amended in 1946) provided, at the time (1946-1949) when these
loans were made, for the insuring by the Federal Housing Admin-
istration of mortgages on properties where preference would be
given to tenancies by World War II veterans and their families,
no mortgage to be more than $5,000,000 in principal amount and
no mortgage to exceed in principal amount 90% of the Federal
Housing Administrator’s estimate of the necessary current cost
of the whoie property or project including land, architect’s fees,
taxes and interest accruing during construction, and similar
incidental charges.

The first three causes of action taken together allege that
defendants, during the years 1946 to 1949, submitted to F. H. A.
applications for insurance of mortgages on these eleven prop-
erties, which applications estimated total cost of construction,
according to the drawings and specifications accompanying
them, at about $26,700,000 for all the buildings, and that defend-
ants requested, and were granted by F. H. A., insurance for
mortgages aggregating $24,000,000, as requested, on the eleven
buildings. These causes of action go on to allege that, pursuant
to F. H. A. regulations, defendants were required to file and
did file with the administrator rental schedules approved by him
and that, under the policies of procedures of F. H. A., said rents

| 533
|

were fixed at an amount which would cover operating expenses,
mortgage payments, taxes and a reasonable return to the owners
with the result that the maximum rent so established for plain-
tiffs and similar tenants bore a direct relationship to the amounts
of the mortgages. It is then alleged in these parts of the com-
plaint that the defendants estimated the total cost of all the
properties at $26,700,000 and asked for and obtained insurance
of mortgages of $24,000,000; that F. H. A. approved maximum
rents based on those figures just given but that the total cost
of constructing all these buildings was not $26,700,000 but
$20,000,000 only; that the $24,000,000 in mortgages was about
$4,000,000 in excess of actual cost of the buildings and inci-
dentals; that this $4,000,000 was distributed to the individual
defendants as owners of the defendant corporations, and that by
reason of all this the annual rentals paid by all the tenants
in these properties were excessive to the tune of about $360,000
per year. The second cause of action charges all this as a
conspiracy to defraud. The differences between the first two
causes of action and the third are not sufficient to require any
analysis here. As stated above, the fourth cause of action
describes these same alleged wrongs in terms of negligence and
the fifth cause of action takes a somewhat different slant by
alleging that completion at the reduced cost of only $20,000,000
was the result of failure to comply with drawings and specifica-
tions as filed, and of the construction of the buildings in an
inferior manner.

There are two different but equally conclusive reasons why
this complaint cannot stand. The first of such reasons is that
these allegedly excessive rentals were fixed by the Federal
Housing Administrator or Commission (this, of course, has
nothing to do with the emergency rent control laws but is a
different statutory setup). Such a determination of the F. H. A.
authorities represents Federal governmental action by author-
ized Federal officers. As made clear by Wasservogel v. Meyero-
wite (300 N. Y. 125), Matter of Schmoll, Inc., v. Federal Reserve
Bank, (286 N. Y. 503) and older cases, the State courts have no
power whatever to revise such official acts performed by Federal
officials under authority of acts of Congress. In the Wasser-
vogel case (supra) this court said flatly that when Federal
authorities and Federal officers acting within their authority

534 |
be

have fixed rents, the State courts may not in any manner revise
or review those determinations, directly or indirectly, and that
all State court action is forbidden when it would amount to ‘‘ an
assertion of control of the manner in which the Federal rent office
performed the function assigned to it by Congress ’’. We see no
escape from that here. The Federal Housing Act, as above
stated, authorized the Administrator, ‘‘ in his discretion ’’ (see
§ 608, subd. [b], par. [1]), to regulate rents. So empowered,
he adopted rule or regulation section 280.30 under which he
established maximum rents for these and similar properties.
The maximum rents so established by him are still in effect
and there is no assertion that the rents charged by defendants
to these tenants were in excess of those maxima. We will assume
with plaintiffs that this maximum rent fixation was for the
benefit of tenants. There is nothing in that concept, however,
which changes the settled law that the State courts cannot
revise such an act of the Federal Government but must take
heed of it and abide by it until it is changed by procedures, if
any, established for such change. Such is the clear import of
Wasservogel and the cases it cites.

The other and separate reason why this complaint is insuffi-
cient is found in a line of cases of which Rosner v. Textile Bind-
ing & Trimming Co. (300 N. Y. 819) is typical (see, also,
Rosenbluth v. Sackadorf, 298 N. Y. 761; Valcich v. Depot
Warehouse Realty, 308 N. Y. 892). All those cases, and some
others in our court, hold that a tenant who claims to have been
deprived of rights under rent laws by fraudulent misrepresenta-
tions made either to government authorities or to the tenant has
no remedy by suit unless there be a specific statute giving him
such remedy. The same or a quite similar idea is expressed as
to commission-fixed electric utility rates in Montana-Dakota
Utilities Co. v. Northwestern Public Service Co. (341 U. S. 246)
and as to minimum wages fixed by the Secretary of. Labor in
Perkins v. Lukens Steel Co. (310 U. 8.113). As against this line
of authority, plaintiffs cite to us two cases in other States,
Brinkmamn v. Urban Realty Co. (10 N. J. 118) and Parkin v.
Damen-Ridge Apis. (348 Ill. App. 428). Both are readily dis-
tinguishable. Although each decision involves alleged over-
charges of tenants in apartment houses financed with F. H. A.

Leerssen! _ BBS
eer |

mortgages, neither of these cited cases includes any attempt,
by direction or indirection, to set aside the F. H. A. fixation of
reasonable rents. In the Brinkmann case (supra) the landlord
made what were in fact additional rental charges, clearly illegal,
by setting up a rental agency actually owned by the landlord as a
front for collecting additional moneys in the guise of commis-
sions. In the Parkin case (supra) the rentals charged were held
illegal because the landlord never secured F. H. A. approval of
the rents at all but went ahead and made leases fixing rents which
were held to be void because not approved by F. H. A.
Appellants argue that this complaint states a cause of action.
under the ‘‘ Third Party Beneficiary ’’ rule of Lawrence v. Fou
(20 N. Y. 268, supra). For purposes of argument we will read
the complaint here as attempting to set out such a claim. How-
ever, there are a number of reasons why the Lawrence v. Fox
doctrine does not help plaintiffs. That doctrine makes actionable
a promise made by a defendant upon valid consideration to a
third person for the benefit of the plaintiff although the plaintiff
was not privy to the consideration. Presumably, the contract
that appellants rely on here is the contract between defendants
and the F. H. A. Of course, that contract was in a sense made
for the benefit of a large class of American citizens, including
plaintiffs, who could not at the time find adequate housing. How-
ever, it is notable that even the Brinkmann case (supra), cited
by appellants, says (p. 118) that the primary design of the
National Housing Act as originally passed was ‘‘ to stimulate
building and increase employment ’’, citing United States v.
Emory (814 U. 8. 428, 430), although Brinkmann goes on to
say that one of the significant purposes of the act was to benefit
“< Jow-income tenants by affording them suitable housing accom-
modations at reasonable rentals ’’. But, for all that, the making
of this F. H. A. contract for the insurance by the United States
of these mortgages was an act of government intended, as all
such acts are supposed to be, to benefit some or all of the citizens.
To carry out a public policy of the United States Government,
the Administrator was authorized to facilitate the construction
of buildings by insuring the mortgages taken by lending insti-
tutions on those buildings. The Federal Administrator was
authorized by the same statute to approve a rent schedule, not

536 |

only to prevent the charging of unconscionable rents but also,
we take it, to see to it that the rents are adequate to cover the
expenses of operation, including the mortgage payments. Even
if we were to distort such an arrangement into a simple contract
for the benefit of these tenants; it would still be true that the
complaint itself shows that plaintiffs are not actually suing on
any such contract. Rather, they are attempting to set aside
or bypass that contract since the rents they are paying are the
rents fixed by the Administrator pursuant to that contract.
Actually, of course, the only contracts that plaintiffs are parties
to are their own leases with defendants, and the rents they are
paying are the rents fixed in those leases.

Appellants have still another string to their bow in that they
say this complaint can be held sufficient under Advance Music
Corp. v. American Tobacco Co. (296 N. Y. 79) as discussed in
Rager v. McCloskey (305 N. Y. 75) and Rochette & Pareini Corp.
v. Campo (301 N. Y. 228). Appellants say that the Advance
Music case (supra) makes actionable ‘‘ any intentional infliction
of temporal damage ’’ but, of course, if that were literally true
it would abolish all other forms and theories of action. The
Advance Music theory does not go far enough to give these
plaintiffs a cause of action on the facts they allege. What
plaintiffs are alleging is not that the defendants set out to harm
or wrong plaintiffs but that defendants defrauded the United
States Government into legislative action fixing rents which
action would not have been taken had not defendants so
defrauded the Government.

The substance of all this is, as we see it, that plaintiffs cannot
have any relief in the courts unless and until they are able in
some fashion to set aside the rent schedules or unless some legis-
lative body, such as the United States Congress, provides them
with a remedy by suit. In all of this we are assuming, as we
must on an appeal like this, the truth of all the allegations in
plaintiffs’ complaint.

In one of their points, plaintiffs say that if the dismissal of
their complaint be affirmed here they should, nonetheless, be
given by this court leave to plead over which was refused them
by the courts below. It is clear that permission to plead over
is discretionary but it is a particular form of discretion which

LE

can be exercised by the Court of Appeals (Fitegerald v. Title
Guar. & Trust Co., 290 N. Y. 376, 381; Cohen and Karger,
Powers of the New York Court of Appeals, p. 646). However,
as the Fitzgerald opinion itself says, it is only in ‘‘ rare cases ’’
that the Court of Appeals exercises such a power and I see no
reason for exercising it here. In the Fitegerald case plaintiffs,
mistaking their remedy, pleaded a cause of action barred by the
Statute of Limitations and our court wished to make it clear
that our affirmance of the dismissal of the complaint did not
prevent another suit arising out of the same facts but on a
different theory. That concept has nothing to do with the
present case.
The judgment should be affirmed, with costs.

Conway, Ch. J., Fup, Vaw Voornis and Burg, JJ., concur;
Dvs and Frozssex, JJ., taking no part.

Judgment affirmed.
De

Dertance Mrx Propvots Company, Respondent, v. C. CHEstTeR
Du Monn, as Commissioner of Agriculture and Markets of
the State of New York, Appellant.

Argued October 18, 1955; decided February 16, 1956.

538

Robert G. Blabey for appellant. I. The statute attacked does
not apply to plaintiff’s product. Under such circumstances
plaintiff may not maintain the action. (Carolene Products Co. v.
United States, 323 U. 8. 18; Schieffelin v. Komfort, 212 N. Y.
520; Central Westchester Humane Soc. v. Hilleboe, 202 Mise.
881.) II. The statute is saved by a presumption of constitu-
tionality which plaintiff did not overcome. (Johnson v. City of
New York, 274 N. Y. 411; Commonwealth v. Crowl, 245 Pa. 554,
242 U. S. 153; Williamson v. Lee Opt. Co., 348 U. 8. 483;
Security Administrator v. Quaker Oats Co., 318 U. 8. 218;

Hebe Co. v. Shaw, 248 U. 8. 297; Sage Stores Co. v. Kansas, °

323 U.S. 32.) ITI. On the whole record, the weight of the proof
favors the validity of the statute.

Jacob K. Javits, Attorney-General (James VU. Moore, Jr.,
and Ruth Kessler Toch of counsel), in his statutory capacity
under section 71 of the Executive Law. I. It was not so irra-
tional or unreasonable for the Legislature to decide that there

* was danger to the public of confusion and deception in the sale
of evaporated skimmed milk in cans smaller than bulk size,

539

that the courts should break from the restraint they exercise in
overturning the legislative judgment. (Matter of Ahern v.
South Buffalo Ry. Co., 303 N. Y. 545, 344 U. S. 367; Thompson v.
Wallin, 301 N. Y. 476, 342 U. 8. 485; Matter of Fay, 291 N. Y.
198; United States v. Carolene Products Co., 304 U. 8. 144;
Olsen v. Nebraska, 313 U. 8. 236; Day-Brite Lighting v.
Missouri, 342 U. S. 421; Daniel v. Family Ins. Co., 336 U. 8. 220;
Williamson v. Lee Opt. Co., 348 U. 8. 483; Carolene Products Co.
v. United States, 323 U. 8.18; Hebe Co. v. Shaw, 248 U. 8. 297;
Security Administrator v. Quaker Oats Co., 318 U. 8. 218.)
II. Skimmed milk and whole milk are not the same and are not
to be sold interchangeably. (Carolene Products Co. v. United
States, 323 U. 8.18; Hebe Co. v. Shaw, 248 U. 8. 297; Sage Stores
Co. v. Kansas, 323 U. 8. 82.) III. That the Legislature has not
prohibited the sale of fluid skimmed milk or of evaporated
skimmed milk in 10-pound cans does not make the prohibition
of the sale of retail size cans of evaporated skimmed milk
automatically unreasonable. (United States v. Carolene Prod-
ucts Co., 304 U. 8. 144; West Coast Hotel Co. v. Parrish, 300
U.S. 879; Szold v. Outlet Embroidery Supply Co., 274 N. Y. 271;
Railway Eapress v. New York, 336 U. 8. 106; Daniel v. Family
Ins. Co., 336 U. 8. 220.)

David §. Williams for respondent. I. A constitutional
question can be determined by means of an action for declaratory
judgment. (Wingate v. Flynn, 139 Mise, 779, 233 App. Div. 785,
256 N. Y. 690; Denkman v. Denkman, 255 App. Div. 496.) II. The
statute, insofar as it prohibits the sale of evaporated skimmed
milk in less than 10-pound containers, is unconstitutional.
(Central Sav. Bank v. City of New York, 280 N. Y. 9; New York
Central é H. R. R. R. Co. v. Williams, 199 N. Y. 108; Grosjean v.
American Press Co., 297 U. 8. 233; Liggett Co. v. Baldridge, 278
U.S. 105; People ex rel. Pimello v. Leadbitter, 194 Mise, 481, 275
App. Div. 864, 301 N. Y. 695; Borden’s Co. v. Baldwin, 293 U. 8.
194; Aerated Products Co. v. Godfrey, 290 N. Y. 92; Matter of
Jacobs, 98 N. Y. 98; Mugler v. Kansas, 123 U. 8. 623; Burns
Baking Co. v. Bryan, 264 U. 8. 504.) III. Defendant failed
to prove any defense to the action. (Flagg v. Nichols, 307 N. Y.
96; Borden’s Co. v. Baldwin, 293 U. 8. 194; McCoy Service v:
New York Tel. Co., 163 Misc. 206; Painton v. Northern Central

0
ee

Ry. Co., 83 N. Y. 7.) IV. The restriction is arbitrary and
unreasonable. (Carolene Products Co. v. United States, 323
U.S. 18; United States v. Carolene Products Co., 304 U. 8. 144;
Fisher Co. v. Woods, 187 N. Y. 90.)

Dzsmonp, J. Plaintiff manufactures and sells, in 1444-ounce
sealed and sterilized containers, evaporated skimmed milk,
that is, cow’s milk from which there has been removed all
the butterfat and so much of the other fluid content as to
reduce the final volume to about 45% of original volume.
Not only is it stipulated that this is a wholesome product with
extensive public acceptance (plaintiff alone sells 7,000,000 or
more cans a year), but we all know that it is recommended by
physicians and dietitians and chosen by many consumers,
because of its low calorie content. It is ‘‘ inferior ’’? to whole
milk or evaporated whole milk, only in the same sense that milk
is inferior to cream, or bread to cake, or hamburger to sirloin,
in that it has different properties, and in that it carries a lower
price tag because it can be more cheaply produced.

Nonetheless, plaintiff’s product cannot be sold to housewives
in New York State. That result is accomplished by subdivision
2 of section 64 of the Agriculture and Markets Law, reading
thus: ‘‘ No person shall sell or exchange, or offer or expose for
sale, or exchange, any condensed or evaporated skimmed milk,
except it be in containers or packages containing ten pounds
avoirdupois net weight or more, which containers or packages
shall be distinctly labeled, branded or marked in block letters
not less than one-half inch in height, with the words ‘ Condensed
Skimmed Milk’ or ‘ Evaporated Skimmed Milk’’’, The statute
takes the form of mandating containers of minimum capacity,
but the minimum quantity so specified is many times larger
than could or would be sold and purchased in a retail food shop.
Thus, the statute has the effect of prohibiting all sales at retail
for household use. Plaintiff sues for an adjudication that this
statute is unconstitutional. Both courts below have agreed with
plaintiff and so do we. We see no rational ground for so arbi-
trary and unnecessary a prevention of the sale of a wholesome
food product.

The applicable rules of law are well known. Every legislative
enactment carries a strong presumption of constitutionality

ee (511
een |

including a rebuttable presumption of the existence of necessary
factual support for its provisions (Borden’s Co. v. Baldwin,
293 U. 8. 194, 209, 210). If any state of facts, known or to be
assumed, justify the law, the court’s power of inquiry ends
(United States v. Carolene Products Co., 304 U. 8. 144, 154).
Questions as to wisdom, need or appropriateness are for the
Legislature (Olsen v. Nebraska, 313 U. S. 236, 246). Courts
strike down statutes only as a last resort (Matter of Ahern v.
South Buffalo Ry. Co., 303 N. Y. 545, 555, affd. 344 U. 8. 367)
and only when unconstitutionality is shown beyond a reasonable
doubt (Lindsley v. Natural Carbonic Gas Co., 220 U. 8. 61, 79;
Matter of Fay, 291 N. Y. 198, 206, 207). But, for all that, due
process demands that a law be not unreasonable or arbitrary
and that it be reasonably related and applied to some actual and
manifest evil (Matter of Jacobs, 98 N. Y. 98, 110; Fisher Co. v.
Woods, 187 N. Y. 90; Nebbia v. New York, 291 U. 8. 502). And
even though a police power enactment may have been or may
have seemed to be valid when made, later events or later-
discovered facts may show it to be arbitrary and confiscatory
(Abie State Bank v. Bryan, 282 U. 8. 765, 772).

All those rules, read together, mean that the property of a
citizen including his right to sell nondeleterious substances may
not be taken from him without rhyme or reason. This record
shows beyond dispute that a wholesome and useful food product
has by statute been excluded from sale in this State. The
ostensible legislative purpose was to see to it that customers
did not get evaporated skimmed milk when they were trying to
buy evaporated whole milk. But plaintiff’s labels plainly said:
“ Hvaporated Skimmed Milk’. If more distinctive marking
was thought necessary, the Legislature could have demanded
other kinds of labels or special sizes, shapes or colors of con-
tainers. Instead, it issued its fiat that these household-size
quantities could not be sold at all. Such a prohibition was, as
matter of law, not a reasonable way of dealing with such
confusion or possibility of confusion as the legislators might
have found to exist.

Appellant argues that plaintiff failed to carry the burden
of proof. We do not agree. All plaintiff had to show was that
no reasonable basis existed for an absolute ban against evap-

50
ee

orated skimmed milk. Since no one has been able to discover
any such basis, requisite proof of unconstitutionality was
present. Appellant makes much of the testimony he produced
showing that some New York State inspectors, shopping at
various places in several States including New York, were sold
evaporated skimmed milk instead of ‘‘ evaporated milk’? for
which each had asked. That showed that individual shopkeepers
were defrauding their own customers, but it had no tendency
to prove that plaintiff’s plainly labeled product was so essen-
tially confusing as to be punished by absolute exile. Both
courts below properly found as fact that there was no fraud
or deception by plaintiff.

Much of the argument on both sides here is based on conflict-
ing interpretations of the United States Supreme Court’s
opinions in the two Carolene Products cases (304 U. S. 144,
supra, and 323 U. 8.18). Superficially, the Carolene situation
is much like the present case, since in Carolene a statute was
upheld which barred Carolene’s ‘‘ filled milk’? from interstate
commerce. But the statute there involved was quite different
from subdivision 2 of section 64 of our State Agriculture and
Markets Law (supra). The Federal law (42 U. S. Stat. 1486,
1487; U. 8. Code, tit. 21, ch. 3) forbade the shipment of ‘‘ filled
milk?’ but the latter term was defined to mean any milk
‘‘whether or not condensed, evaporated, concentrated, pow-
dered, dried or desiccated, to which has been added, or which has
been blended or compounded with, any fat or oil other than milk
fat, so that the resulting product is in imitation or resemblance
of milk’’. (Italies supplied.) Congress, when passing that
Federal Filled Milk Act in 1923, had before it testimony that
“filled milk’? (that is, milk with artificially added fats) was
frequently or usually confused by customers with ordinary con-
densed milk, that shopkeepers increased this confusion by
representing the product to be condensed or evaporated milk,
and charged the same price for it as for condensed milk. There-
fore, the Federal statute was upheld by the courts on the ground
of widespread confusion and deception, lack of understanding
by the public of the difference between the products, and active,
systematic deception by vendors. No such proof is in this
record. On the contrary, it is incredible that as of this date

eee 543
TT

shoppers do not know what is meant by ‘‘ condensed skimmed
milk’, We must keep in mind that the Carolene statute was
passed in 1923 and that the two Carolene cases were decided
in 1938 and 1944, respectively. Congress had characterized
“filled milk’? as being ‘‘ injurious to health’? and ‘‘a fraud
upon the public ’”’ (first Carolene opinion, 304 U. 8. 152). Time
has certainly disproved completely the first of those indictments.
Ultimately, the court’s basis for the ban was ‘‘ deception ’’, and
** fraudulent substitution ’’ in that the Carolene product was,
in spite of proper labeling, regularly ‘‘ passed off as the whole
milk product ’’ (second Carolene case, 323 U. 8. 23, 31). There
is nothing like that in this case.

Appellant suggests that respondent’s sales may have been in
violation of a different statutory prohibition (Agriculture and
Markets Law, § 64, subd. 3) which, in language quite like that
of the statute passed on in the Carolene cases, forbids the sale
of skimmed milk to which fats have been added ‘‘ so that the
finished product shall be in imitation or semblance of condensed
* * * milk’, The testimony here shows that vegetable fats
are added to plaintiff’s product to replace the vitamins drawn
off in the removal of butterfat from the whole milk. But no
issue as to subdivision 3 (as distinguished from subd. 2) was
tendered to the court or tried. Plaintiff alleged (and no one
disputed it) that the prohibition against its sales was based on
subdivision 2, and the 10-pound container requirement of that
subdivision.

The judgment should be affirmed, with costs.

Conway, Ch. J. (dissenting). The prohlem presented to us
here has to da with milk, which is ever a concern of the Legis-
lature in its consideration of public policy and the exercise of
the police power of the State for the protection and preserva-
tion of the health and welfare of our people. Further, the
problem has to do not with whole milk but with skimmed milk —
that is milk from which the butterfat content has been skimmed.
Finally, the problem has to do with evaporated skimmed milk —
sold in small 14%-ounce cans.

The Defiance Milk Products Company of Ohio (hereinafter
called Defiance) commenced this action to obtain a judicial
declaration that subdivision 2 of section 64 of the Agriculture

5
se

and Markets Law of the State of New York is unconstitutional.
That statute reads as follows: ‘‘2. No person shall sell or
exchange * * * any condensed or evaporated skimmed
milk, except it be in containers or packages containing ten
pounds avoirdupois net weight or more, which containers or
packages shall be distinctly labeled, branded or marked in block
letters not less than one-half inch in height, with the words
“Condensed Skimmed Milk’ or ‘ Evaporated Skimmed Milk’

# ROD

That statute was enacted pursuant to the police power — the
power inherent in a government to enact laws, within constitu-
tional limits, to promote the order, safety, health, morals, and
general welfare of society. The police power ‘‘ corresponds to
the right of self-preservation in the individual, and is an essen-
tial element in all orderly governments, because necessary to
the proper maintenance of the government and the general wel-
fare of the community. * * * On it depends the security of
social order, the life and health of the citizen, the comfort of an
existence in a thickly populated community, the enjoyment of
private and social life, and the beneficial use of property, and
it has been said to be the very foundation on which our social
system rests. * * * It has been said that the scope of the
police power is as broad as the public welfare or necessity, and
must be exercised in the interest thereof, that it is the least
limitable of the powers of government, and that the police power
is the broadest in scope of any field of governmental activity ”’
(16 C. J. &., Constitutional Law, § 175). Thus, we have said
in People v. Nebbia (262 N. Y. 259, 270-271):

“« But we must not fail to consider that the police power is the
least limitable of the powers of government and that it extends
to all the great public needs; that constitutional law is a progres-
sive science; that statutes aiming to establish a standard of
social justice, to conform the law to the accepted standards of
the community, to stimulate the production of a vital food
product by fixing living standards of prices for the producer,
are to be interpreted with that degree of liberality which is
essential to the attainment of the end in view (Austin v. City of
New York, supra [258 N. Y. 113], p. 117) ; and that mere novelty
is no objection to legislation (People ex rel. Durham Realty
Corp. v. La Fetra, 230 N. Y. 429).

ee — 515

‘The State courts should uphold State regulation whenever
possible. They should be clearly convinced that a statute is
unconstitutional before they declare it invalid. (Cf. Ives v.
South Buffalo Ry. Co., 201 N. Y. 271, with Arizona Employers’
Inability Cases, supra [250 U. 8. 400]; also ef. People ex rel.
Rodgers v. Coler, 166 N. Y. 1, with Athin v. Kansas, supra
[191 U. S. 207].) ”

Public health and the prevention of fraud and deceit are
proper subjects for the exercise of the police power (see 16
C. J. 8., Constitutional Law, §§ 181-194). All matters relating
to the policy, wisdom or expediency of legislation affecting a
subject which lies within the police power of the State are
exclusively for legislative, rather than judicial, determination.
Thus, it was said in a case involving the exercise of police power,
although not with respect to its exercise to protect the public
health, that courts ‘‘ do not sit as a super-legislature to weigh
the wisdom of legislation nor to decide whether the policy which
it expresses offends the public welfare. * * * the state
legislatures have constitutional authority to experiment with
new techniques; they are entitled to their own standard of the
public welfare * * *.? (Day-Brite Lighting v. Missouri,
342 U.S. 421, 423 [1952].) And, as was said in Daniel v. Family
Ins. Co. (336 U. 8. 220, 224) :

“* Despite evidence to the contrary, respondents see no evil
to be corrected by this legislation. We are asked to agree with
respondents and call the statute arbitrary and unreasonable.

“‘ Looking through the form of this plea to its essential basis,
we cannot fail to recognize it as an argument for invalidity
because this Court disagrees with the desirability of the legis-
lation. We rehearse the obvious when we say that our function ~
is thus misconceived. We are not equipped to decide desir-
ability; and a court cannot eliminate measures which do not
happen to suit its tastes if it seeks to maintain a democratic
system. The forum for the correction of ill-considered legisla-
tion is a responsive legislature.’’? (To the same effect, see
Williamson v. Lee Opt. Co., 348 U. S. 483, 486-488 [1955].)
Moreover, ‘‘ the methods which it [the legislative body] employs
to carry out its purposes are beyond attack without a clear and
convincing showing that there is no rational basis for the

56
serene)

legislation; that it is an arbitrary fiat’? (Carolene Products Co.
v. United States, 323 U. 8. 18, 31-32). |

The plaintiff here specifically attacked the 10-pound limita-
tion imposed by the previously quoted portion of subdivision 2
of section 64 of the New York statute. That statute enjoys a
presumption of constitutionality, including a rebuttable pre-
sumption of the existence of necessary factual support for its
provisions (Borden’s Co. v. Baldwin, 293 U. S. 194, 209, 210).
The burden was upon Defiance, as the assailing party, to over-
come that presumption and to establish by a clear and convine-
ing showing that the legislative restriction did not rest upon any
reasonable basis, but is essentially an arbitrary one (Lindsley
y. Natural Carbonic Gas Co., 220 U. 8. 61, 79; Harman v. Board
of Educ. of City of N. Y., 300 N. Y. 21, 31).

What Defiance established at the trial may be summed up as
follows: It proved that it made a product called evaporated
skimmed milk, which it sold in 1444-ounce retail containers.
One such container was put in evidence, together with a label
such as is used on these containers showing the size and type
of lettering (it should be noted that the statute specifies no
labeling requirement for 1444-ounce containers). There was
evidence that plaintiff was prohibited from selling this product
in less than 10-pound containers or packages in New York
State by reason of subdivision 2 of section 64 of the Agriculture
and Markets Law, and there was evidence that this resulted
in a loss to Defiance. It was stipulated by the parties that the
healthfulness of the plaintiff’s product was not in issue. Plain-
tiff then rested.

The commissioner, contending that this subdivision of the
Agriculture and Markets Law was enacted to prevent deception
of and the perpetration of frauds upon the consuming public,
produced evidence that storekeepers and sales personnel both in
New York State and elsewhere had sold evaporated skimmed
milk to customers who requested evaporated milk, ie, evap-
orated whole milk. Similar evidence had been produced before
the legislative committee prior to the enactment of the statute
in question.

Since the protection of health and the prevention of fraud are
proper subjects for the exercise of the police power, the question

ee = — 7

to be decided is whether plaintiff has demonstrated by a clear
and convincing showing that there is no rational basis for the
10-pound limitation.

In Carolene Products Co. v. United States (323 U. 8. 18,
supra), the United States Supreme Court said in the course of
discussing the Filled Milk Act, which completely excludes from
interstate commerce the sale of filled milk compounds having the
semblance of milk (p. 24): ‘‘ Congress evidently determined that
exclusion from commerce of filled milk compounds in the sem-
blance of milk was an appropriate method to strike at evils which
it desired to suppress. Although it now is made to appear that
one evil, the nutritional deficiencies, has been overcome, the evil
of confusion remains and Congress has left the statute in effect.
It seems to us clear, therefore, that there is no justification for
judicial interference to withdraw these assumedly non-deleteri-
ous compounds from the prohibitions of the act.’? (Emphasis
supplied.)

In the present case, as indicated (supra), evidence was intro-
duced to the effect that storekeepers and sales personnel both
in New York State and elsewhere had sold evaporated skimmed
milk to customers who requested evaporated milk, i., evap-
orated whole milk. Similar evidence had been produced before
the legislative committee prior to the enactment of the statute
in question. This clearly showed that there was a real danger
of confusion and fraud, at least with respect to the ordinary
retail customer. That would be sufficient reason for the Legis-
lature to take some action since it was dealing with a ‘‘ para-
mount industry ’? (People v. Nebbia, 262 N. Y. 259, supra). The
Legislature of our State has not gone as far with respect to
controlling the sale of evaporated skimmed milk as Congress
has with respect to preventing the sale of filled milk. It has
not completely forbidden the sale of evaporated skimmed milk as
Congress has done with filled milk compounds in the semblance
of milk. Rather, it has merely prohibited the sale in retail size
containers allowing sales to be made in containers of 10 pounds
or more, presumably for the use of restaurants, bakeries and
other commercial purchasers, who, the Legislature has appar-
ently concluded, are familiar with the differences in the nature
of the products so that the danger of deception or confusion is

48

slight. As we have said it is conceded that the healthfulness of
Defiance’s product is not in issue, and while that may be so in
that it contains no affirmatively harmful ingredients (see 285
App. Div. 354), nevertheless, skimmed milk has not the butterfat
content present and required in whole milk. Skimmed milk and
skimmed milk products are in demand today, not as a general
foodstuff, but rather for a restricted group of persons whose
fat intake requires limitation. To give skimmed milk and
skimmed milk products to persons not in this limited category
will deprive them of nutrients vitally necessary to health.
‘« Evaporated milk ’”’ in ordinary parlance is not synonymous
with ‘‘ evaporated skimmed milk’’, and yet there is evidence
herein that purchasers requesting the former product were given
instead the skimmed milk product. In the Carolene case (supra)
at pages 27-28, the United States Supreme Court said the
following, which is appropriate here:

“« Tf the Filled Milk Act is applicable to the compounds whose
shipment was the basis of the indictment in this case, as we
have just concluded, petitioners assert that the act, as thus
applied, violates the due process clause of the Fifth Amend-
ment. Their argument runs in this manner. Since these
enriched compounds are admittedly wholesome and sold under
trade names with proper labels without the commission of any
fraud by petitioners on the public, Congress cannot prohibit
their interstate shipment without denying to petitioners a right
protected by the due process clause, the right to trade in inno-
cent articles. They rely upon Weaver v. Palmer Bros. Co.,
270 U. S. 402, and continue their protest against the refusal of
the trial court to receive the evidence as to the wholesomeness
of their product.

“« We do not need to consider the refusal of the trial court to
receive evidence of the purity and wholesomeness of petitioner’s
products. Such evidence could be material only if the sole
basis for Congressional action was impurity and unwholesome-
ness. Under the first point of this opinion, we have determined
that the avoidance of confusion furnished a reason for the enact-
ment of the Filled Milk Act. The trial court took judicial notice,
as did the District Court of the District of Columbia, United
States v. Carolene Products Co., 51 F. Supp. 675, 678-79, and

ee = 349
ee}

as we do, of the reports of the committees of the House of Repre-
sentatives and the Senate which show that other considerations -
than nutritional deficiencies influenced the prohibition of the
shipment of filled milk in interstate commerce. These unchal-
lenged reports, as we indicated in part ‘ First’ above, furnish
an adequate basis, other than unwholesomeness, for the action
of Congress. The reports show that it was disputable as to
whether wholesome filled milk should be excluded from com-
merce because of the danger of its confusion with the condensed
or evaporated natural product or whether regulation would be
sufficient. The power was in Congress to decide its own course.
We need look no further.”

Likewise, in Hebe Co. v. Shaw (248 U. 8. 297), the United
States Supreme Court upheld the validity of an Ohio statute
which prohibited the sale of condensed milk made otherwise
than from whole milk against an attack under the Fourteenth
Amendment. It was assumed that the compound was wholesome
and it was properly labeled. The act was sustained, however,
as a proper exercise of legislative power to protect the public
against fraudulent substitution.

So, here, the Legislature, recognizing the existence of a danger
of confusion to the ordinary purchaser, has acted, in the exercise
of its police power, to protect such purchasers in this State
against that danger. As we have already pointed out the
Supreme Court has declared in the Carolene case (supra) at
pages 31-32: ‘¢* * * the methods which it [the legislative
body] employs to carry out its purposes are beyond attack with-
out a clear and convincing showing that there is no rational basis
for the legislation; that it is an arbitrary fiat.’ It was there
reiterated that legislation by Congress completely preventing
the sale of a product which might be confused with another was
not an arbitrary fiat. If the danger of confusion authorizes
Congress to completely exclude the sale of a product from inter-
state commerce, how then can it be successfully urged that a
partial restriction upon the sale of a product imposed by a State
Legislature to eliminate the danger of confusion, known and
demonstrated to exist, is an arbitrary fiat, without rational
basis? The question posed answers itself —the plaintiff has
failed to carry the heavy burden of proving that there was no
rational basis for the legislation.

50
pee

At the time this restriction was enacted in 1922 there was
proof before the Legislature of deception or confusion. During
the 1952 session of the New York Legislature an amendment was
considered which would have eliminated the 10-pound limitation
from subdivision 2 of section 64. That amendment, however,
failed of passage, and the restriction was continued. The reason
for continuing it seems obvious — the Legislature has found that
the danger still exists. The Legislature with its committees and
its means for conducting hearings is equipped to ascertain the
existence of such a danger. We are not.

We think that what the Official Referee and the majority
writers in the Appellate Division did was to properly state the
rule that the burden of proof is on the plaintiff milk company,
but after conceding that the public had been deceived they then,
in applying the rule as to the burden of proof, reactied the con-
clusion that the deception was caused by someone other than
the milk company, and that the State had not carried the burden
of showing that its determination as to the manner and method
by which to protect the public was the right way to do it. That
was a shifting of the burden of proof. Once the Legislature
determined that the public was being ‘‘ defrauded ’’ however,
it was for the Legislature to decide how to prevent the defraud-
ing. It does not lie with the courts to say whether it was the
dealers who sold the evaporated skimmed milk who were to
blame rather than the milk company. That was clearly for the
Legislature. As it appears from the quotation (supra) from
Day-Brite Lighting v. Missouri (342 U. 8. 421, 423), the
Supreme Court has said that when it comes to protecting the
public the Legislature may even experiment as to the best
manner in which to do it, and no court may act as a super-
legislature. It is within the competency of the Legislature to
declare public policy in order to protect the public and the courts
may not intrude in order to disregard the legislative determina-
tion and substitute one of their own.

It should be noted, also, that one of the plaintiff’s products
is more than simply evaporated skimmed milk. The record dis-
closes that this product consists of evaporated skimmed milk
to which has been added a concentrated oil containing vitamin A.
Doubtless, this adds to the nutritive value of the milk product,
but it also would appear to remove that product from the

epee 581
ee

category encompassed by the second subdivision of section 64
of the Agriculture and Markets Law. By motion at the trial the
commissioner raised this point, and it appears to have consider-
able merit. We do not, however, deem it necessary to pass upon
this phase of the case in view of our decision regarding the
validity of the 10-pound restriction upon the size of retail
containers of evaporated skimmed milk.

The judgments should be reversed, and the complaint dis-
missed, with costs in all courts.

Fut, Van Vooruis and Burxn, JJ., concur with Desmonn, J.;
Conway, Ch. J., dissents in an opinion in which Fronssex. J.,
concurs; Dyn, J., taking no part.

Judgment affirmed.

In the Matter of the Arbitration between Ervay J. Baxer,
Appellant, and Boarp or Epucarion or Cuntrat Scxoon Dis-
vriotr No. 2 or tHe Towns or Bars, Camuron, WHEELER,
Urzana, Tuurston, Avoca anp Howarp, Stevsen County,
et al., Respondents.

In the Matter of the Arbitration between Ervay J. Baxzr et al.,
Appellants, and Boarp or Epucarion or Centra Scxoon Drs-
trict No. 2 or rae Towns or Bars, Cameron, WHEELER,
Ursana, THurston, Avoca anp Howarp, Srevsen Coun,
et al., Respondents.

Argued January 4, 1956; decided February 16, 1956.

Nicholas E. Brown and Elliott Horton, III, for Ervay J.
Baker, appellant. I. A bona fide dispute exists between the

554 ee
ess}

associated architects and the board of education. II. Baker is
entitled to arbitrate the disputes with the board of education
under the contract between the board and the associated archi-
tects. (Matter of Damsker [Carey], 283 App. Div. 719.)

George J. Skivington for Board of Education of Central
School District No. 2 and another, respondents. I. In neither
proceeding has arbitration been ‘‘ the choice of either party ’’.
(Matter of Damsker [Carey], 283 App. Div. 719.) IT. In the
first arbitration proceeding there was no compliance with sec-
tion 3813 of the Education Law. III. In the first arbitration
proceeding there was no showing of a ‘“‘ dispute ’’ between ‘‘ the
architect’? and the board of education within the meaning of
paragraph ‘'12”? of the contract. (Matter of Webster v. Van
Allen, 217 App. Div. 219; Matter of Hagar Constr. Corp. v.
Ward Foundation Corp., 255 App. Div. 291; Matter of Lipman
{Haeuser Shellac Co.], 289 N. Y. 76; Dwyer v. Biddle, 274 App.
Div. 903; Matter of Tanenbaum Teatile Co. v. Schlanger, 287
N. Y. 400.) IV. At the time when the motions in the second
arbitration proceeding by the board and by White and Helm
to permanently stay arbitration came on to be heard, it was
conclusively shown there was then no ‘‘ dispute ’’ of any kind
or nature between the board and “‘ the architect ’’.

Carrollton A. Roberts for Thomas L. White and another,
respondents in the first above-entitled proceeding and appellants
in the second above-entitled proceeding. I. White and Helm
constitute a majority of the party of the second part in the con-
tract between ‘‘ the architect’? and the board of education and
have the right of choice as to whether or not there shall be arbi-
tration. (Clarke v. State Valley R. Co., 186 Pa. 408.) II. The
matters as to which Baker seeks arbitration in his two notices
of intention to arbitrate are not matters in ‘‘ dispute ’’ between
‘the architect’? and the board but personal matters between
Baker and the board.

Burg, J. The board of education as ‘‘ Owner ”’ entered into
a contract with two architectural firms; Ervay J. Baker of
Hammondsport, New York, the appellant, and White and Helm
of Geneva, New York, as ‘‘ Architect’? in connection with the
construction of school buildings at Bath, New York. The con-

555
Le}

tract between the owner and the architect contained an arbitra-
tion clause which provided: ‘12. Arbitration. All questions
in dispute under this agreement shall be submitted to arbitra-
tion at the choice of either party ’’. On the same day a contract
was entered into between the two architectural firms which
incorporated by reference the provisions of the contract between
the owner and the architect. The terms and conditions of the
architects’ contract were known to the board of education.
Under the terms of the contract between the architects, Baker
was responsible for the supervision of construction and the issu-
ance to the contractor of certificates entitling the contractor to
interim payments. During the course of construction, Baker,
believing that the payment of a requisition of $81,000 would
amount to a total payment in excess of the contractor’s costs
up to that time and might enable the contractor to avoid the
completion of the unfinished work within the contract price,
notified the contractor that he required a justification of the
requisition before he would approve the payment. The con-
tractor notified the board and Baker of his intention to termi-
nate the contract, and ceased work. Then the board negotiated
a settlement with the contractor without consulting Baker or
considering the data Baker had assembled, justifying, in his
opinion, the refusal to certify the payment. On October 22,
1958, the board passed a resolution discharging Baker. Since
then Baker has received no compensation.

Baker filed two claims against the board of education, dated
November 30, 1953. The first claim sought the payment of fees
due to the associated architects. The second claim covered only
Baker’s share of the fees plus his disbursements and was
founded on the theory of board liability arising from the board’s
action in compelling White and Helm to sever their association
with Baker. Upon the rejection of the claims, Baker requested
White and Helm to join him in demanding arbitration. When
White and Helm failed to reply, Baker served, in his own name,
a demand for arbitration on the board and provided White and
Helm with copies of the demand. The board and White and
Helm moved separately to stay permanently the demand for
arbitration. The motions were granted and the orders entered
staying arbitration have been affirmed.

After the motions were granted in the first proceeding, Baker
filed a new claim in the joint names of Baker and ‘‘ White and
Helm’’. This claim was the subject of a second proceeding
to stay arbitration, in which orders were entered granting a
stay. The orders entered in the second proceeding were also
affirmed by the Appellate Division.

The board contends that none of the questions propounded
in the notice of intention to arbitrate concern a dispute with
the board.

The questions are based on the actions of the board in settling
with the contractor without a certificate approving payment
executed by Baker and in discharging Baker, coupled with a
refusal to compensate him or reimburse him for expenses
allegedly incurred, as provided for by the owner-architect
contract.

Tt is our view that a bona fide dispute exists which must be
arbitrated pursuant to clause 12 of the contract. Any differ-
ences between Baker and the contractor or Baker and his asso-
ciate architect, ‘‘ White and Helm ”’, arose out of the perform-
ance on his part of his duties under the contract. The dispute,
therefore, is between Baker and the board as to the propriety
of their respective acts. Since the disputes are within the scope
of the arbitration clause, they must be settled by arbitration, if
demanded by either party. (Matter of Wenger & Co. v. Propper
Sik Hosiery Mills, 239 N. Y. 199, 202; Matter of Lipman
[Haeuser Shellac Co.], 289 N. Y¥. 76; Matter of Bohlinger
[National Cash Register Co.], 305 N. Y. 539.)

As an arbitrable dispute exists between the owner and the
architect, we must now determine whether Baker is entitled to
demand arbitration without the acquiescence of ‘‘ White and
Helm ’’ or White or Helm. The contract gives ‘‘ either party ’’
the right to compel arbitration. The enforcement of the right to
arbitration of the architect party turns on the composition of
the association of the architects in this case. Were there three
equal partners, Baker, White, Helm, all individuals; or were
there two equal partners, Baker, an individual and ‘‘ White and
Helm ’’, a partnership? A partnership, as such, can be a mem-
ber of another partnership, if that be the intent of the parties.
(Uniform Partnership Act, Commissioners’ Note, § 6; 7 Uniform
Laws, p. 11; Houston v. McCrory, 140 Okla. 21; Replogle v. Nef’,

eer! 557
ee}

176 Okla. 333; Matter of Hamilton, 1 F. 800; 1 Rowley on
Modern Law of Partnership, § 192, p. 197; Shumaker on The
Law of Partnership, pp. 142-143; 68 C. J. S., Partnership, § 68,
p. 500.) This partnership was composed of two members,
Baker, an individual, and ‘‘ White and Helm” a partnership.
The commissions were to be paid one half to Baker and one half
to ‘* White and Helm ’’. The association contract was executed
by Thomas Lyon White and F. Kirk Helm not as individuals,
but as members of the partnership. Section 20 (subd. 3, par.
[e]) of the Partnership Law has no application to the situation
in this case as that section of the statute prohibits submission
of a dispute to arbitration by one partner only in the absence
of a contract containing an arbitration clause. The contract
containing the arbitration clause has been signed by all the
partners and the dispute is one within the coverage of the
arbitration clause. Under such conditions, one of two members
of a partnership may demand arbitration without the consent of
the other partner as such partner is an agent of the partnership
(Partnership Law, § 20, subd. 1; Matter of Damsker [Carey],
283 App. Div. 719). We do not decide whether one of three equal
partners may compel arbitration of a dispute arising out of a
contract to which the partnership is a party.

There is no merit to the objection that the notices of claim are
defective in that they failed to comply with section 3813 of the
Education Law, because they were filed in Baker’s name rather
than that of the architect’s. We find no rigid requirement
imposed by the statute in such specific terms. Hence, according
to the weight of authority, all that is required is a substantial
compliance with the statute. (6 McQuillin on Municipal Cor-
porations [2d ed.], § 2895; Schwarte v. City of New York, 250
N. Y. 332.) The original notices were more than sufficient to
fully apprise the board of the notice of the claim asserted
against it.

Our disposition of this appeal does not require us to discuss
the notice of claim filed subsequent to the granting of the
motions to stay the arbitration made in the first proceeding.

Inasmuch as we do not pass upon the merits of the decisions
made in connection with the subsequent claim, the proper prac-
tice here is to reverse the later order of the Appellate Division
in the second proceeding, and to remit the proceeding to Special

Term with directions to dismiss the motions directed to the sub-
sequent claim, not on the merits, but solely upon the ground
that the issues are moot. (Wilmerding v. O’Dwyer, 297 N. Y. 664,
Matter of Adirondack League Club v. Board of Black Riv. Regu-
lating Dist., 301 N. Y. 219.)

The orders of the Appellate Division entered January 5, 1955,
should be reversed, and the proceedings remitted to Special
Term with directions to deny the motions on the merits, with
costs, and the order of the Appellate Division dated March 28,
1955, should be reversed, and the proceedings remitted to
Special Term with directions to dismiss the motions, not on the
merits, but on the grounds that the issues are moot, with costs.

Conway, Ch. J., Dusmonp, Fup, Fronssen and Van Voornis,
JJ., concur; Dyn, J., taking no part.

In each proceeding: Order of Appellate Division reversed,
with costs in all courts, and matter remitted to Special Term for
further proceedings in accordance with the opinion herein. ©

—
In the Matter of the Claim of Louis C. Dutzysuck, Respondent,
against Guneran Morors Corporation, Appellant. Worx-
men’s Compensation Boarp, Respondent.

Argued October 18, 1955; decided February 16, 1956,

es =| 559

ee

Solon J. Stone, William M. Fay, William A. Bain, Jr., Robert
M. Spaulding and Frederick W. Danforth, Jr., for appellant.
The Appellate Division erred when it decided that claimant-
respondent’s back strain with nerve root irritation constituted an
occupational disease. (Matter of Goldberg v. 954 Marcy Corp.,
276 N. Y. 318; Matter of Harman v. Republic Aviation Corp.,
298 N. Y. 285; Matter of Champion v. Gurley, 299 N. Y. 406;
Matter of Buckley v. Gallagher Bros. Sand & Gravel Corp.,
300 N. ¥. 447; Matter of Guarnera v. Radio Picture Frame Co.,
267 App. Div. 848; Matter of Walker v. McCarthy, 276 App. Div.
801; Matter of Buchanan v. Bethlehem Steel Co., 278 App. Div.
594, 302 N. Y. 848; Matter of McLaughlin v. Alco Gravure Div.
of Pub. Corp., 268 App. Div. 839, 294 N. Y. 642; Matter of
Connell v. Walsh Constr. Co., 265 App. Div. 1024, 290 N. Y.
930; Matter of Griffin v. Grifin & Webster, 283 App. Div.
145, 306 N. ¥. 984.)

Jacob K. Javits, Attorney-General (Daniel Polansky, James
O. Moore, Jr., and Roy Wiederswm of counsel), for Workmen’s
Compensation Board, respondent. I. Ample evidence estab-
lished that claimant’s disability was causally related to and the
result of an occupational disease within the scope of section 3
(subd. 2, par. 29) of the Workmen’s Compensation Law. (Matter
of Goldberg v. 954 Marcy Corp., 276 N. Y. 313; Matter of Briggs
v. Hope’s Windows, 284 App. Div. 1077; Matter of De Bella v.
Hotel Windsor, 284 App. Div. 919; Matter of Paradiso v. Vuozzo,
277 App. Div. 802, 301 N. Y. 815; Matter of Zumbolo v. Bigelow-
Sanford Carpet Co., 279 App. Div. 680; Matter of Piparo v. Klar,
278 App. Div. 985; Matter of Buchanan v. Bethlehem Steel Co.,
278 App. Div. 594, 302 N. Y. 848; Matter of Smith v. Central
Foundry Div., Gen. Motors Corp., 274 App. Div. 860; Matter of
Foster v. Gillinder Bros., 252 App. Div. 903, 278 N. Y. 348;
Matter of Beticher v. du Pont de Nemours & Co., 255 App. Div.
784, 280 N. Y. 850; Matter of Townsend v. Union Bag & Paper
Corp., 807 N. Y. 710; Matter of Griffin v. Griffin & Webster,

50 ee
eee

283 App. Div. 145, 306 N. Y. 984; Matter of O’Neil v. American
Locomotive Co., 276 App. Div. 1043; Matter of Moore v. Colonial
Sand & Stone Co., 261 App. Div. 857, 285 N. Y. 860; Matter of
Peloso v. D’ Alessio Bros., 272 App. Div. 984, 298 N. Y. 582;
Matter of Pinto v. Competent Fur Dressers, 271 App. Div. 1036,
297 N. Y. 846; Matter of Condon v. National Aniline Div., Allied
Chem. & Dye Corp., 267 App. Div. 1020; Matter of Hessinger v.
City of New York, 264 App. Div. 802, 289 N. Y. 853; Matter of
Shepardson v. Roosevelt Hosp., 271 App. Div. 760.)

Van ‘Voornis, J. Claimant sustained a back injury while
employed in appellant’s industrial plant in Buffalo, New York.
The nature of the work in which he was engaged was not such
as to produce disabilities of this description among the rank
and file of men. This condition in claimant’s case was due to
a congenital defect of the spine. He has not been held to have
sustained an industrial accident; workmen’s compensation has
been awarded upon the theory that he is the victim of an oceu-
pational disease. In affirming, the Appellate Division thus
summarized the undisputed facts: ‘‘ While a normal person
would not have been affected it is rather clear that all employees
who had the same weakness would in all probability be similarly
affected ’’, but added: ‘‘ This is sufficient to bring the condition
within the classification of an occupational disease.’? We think
that the legal conclusion contained in the second sentence has
not been correctly drawn from the facts stated in the first
sentence. The rule regarding occupational diseases differs from
that concerning industrial accidents, in that an accident result-
ing in disability is compensable even though it would not have
occurred unless the employee had been predisposed to it through
some pre-existing physical defect. ‘‘ An ailment does not
become an occupational disease simply because it is contracted
on the employer’s premises. It must be one which is commonly
regarded as natural to, inhering in, an incident and concomitant
of, the work in question. There must be a recognizable link
between the disease and some distinctive feature of the claim-
ant’s job, common to all jobs of that sort. As this court observed
in Matter of Goldberg v. 954 Marcy Corp. (276 N. Y. 313, 318-
319), an occupational disease is one ‘ which results from the
nature of the employment, and by nature is meant * * *

Le
bee

conditions to which all employees of a class are subject, and
which produce the disease as a natural incident of a particular
occupation, and attach to that occupation a hazard which dis-
tinguishes it from the usual run of occupations and is in excess
of the hazard attending employment in general.’’? (Matter of
Harman v. Republic Aviation Corp., 298 N. Y. 285, 288; Matter
of Champion.v. Gurley, 299 N. Y. 406.)

Although this claimant incurred his disability while working
for appellant, the nature of his employment was not such as
to have a tendency to induce a similar malady in the average
workman. Insofar as it caused this result, the work in which
he was engaged simply amounted to the ordinary wear and
tear of life impinging on the infirmity with which this man
had been born and which he had carried with him during all
of his previous life. That is not what the Legislature intended
to cover by ‘‘ Any and all occupational diseases ’’ in paragraph
29 of subdivision 2 of section 3 of the Workmen’s Compensation
Law. As was said in Matter of Harman v. Republic Aviation
Corp. (supra, p. 287): ‘‘ A contrary decision, approval of the
award, would transform workmen’s compensation into life and
health insurance.’’ It would encroach upon the field of the
disability benefits law enacted by chapter 600 of the Laws of
1949, whereunder ‘‘ ‘ Disability ’ during employment means the
inability of an employee, as a result of injury or sickness not
arising out of and in the course of employment, to perform the
regular duties of his employment ’’ (§ 201, subd. 8).

Certain awards for occupational diseases have been affirmed,
to be sure, where the claimant suffered from pre-existing
physical defects (Matter of Pinto v. Competent Fur Dressers,
297 N. Y. 846; Matter of Peloso v. D’ Alessio Bros., 298 N. Y.
582), but it is important to note that in the subsequent case of
Matter of Champion v. Gurley (299 N. Y. 406) the rule was
reaffirmed that had been enunciated previously in the leading
eases of Matter of Goldberg v. 954 Marcy Corp. (276 N. Y. 318),
Matter of Harman v. Republic Aviation Corp. (298 N. Y. 285,
supra), and the cases cited therein. These decisions involving
pre-existing defects hold that predisposition of an employee
to an occupational disease does not prevent him from having
the benefit of workmen’s compensation, if he develops what
would ordinarily be an occupational disease; that, likewise,

appears to be the purport of the affirmance of the awards in
Matter of Buchanan v. Bethlehem Steel Co. (302 N. Y. 848) and
Matter of Townsend v. Union Bag & Paper Corp. (307 N. Y.
710). An employee who is physically handicapped may contract
an occupational disease more easily because of his weakened
condition, but the test of what is an occupational disease is the
same whether the employee is decrepit or in normal health.
There must be a recognizable link between the disease and some
distinctive feature of the claimant’s job. This test is not met
where disability is caused by an aggravation of a condition
which is not occupational in nature. If an employee contracts
an occupational disease, he is not to be prejudiced by reason of
a pre-existing illness or defect, but neither is he to be preferred
over other employees by creating a different class of com-
pensable disabilities for his benefit.

The order appealed from should be reversed and the claim
dismissed.

Froussen, J. (dissenting). In August, 1947, claimant com-
menced working for appellant, a manufacturer of motor cars,
as an inspector in the piston department. He had a congenitally
weak back, but it had never troubled him before. The duties
of this job required no lifting. In July, 1951, he was transferred
to the salvage department, where he was also called an inspector,
although he stated he did not know why. As such, he was
required as a relief man to check cylinder bores and fill in
reports, but, in addition thereto, he had to go around the plant
with a cart and pick up scrap, marking it for salvage.

One out of every two or three days it was his duty to pick
up between 30 and 40 engine cases, and sometimes as many as
60, each weighing about 176 pounds. He would be required,
without assistance, to place the first layer on the cart by tipping
the case upward and sliding it on; he would then secure someone
to help him with the next layer. About once a month he would
also have to remove pans of camshaft bearings, which were
likewise too heavy to be lifted and were slid onto a cart. Claim-
ant was additionally required to load on cars bushings from the
piston department, which were placed in barrels weighing over
100 pounds, and then remove them. He usually did this work
alone.

ee = 563

In September, 1951, claimant felt pains in the left side of his
spine. In November or December, 1951, he reported these pains
to the company doctor, who suggested heat treatment and the
use of a bed board. Claimant nevertheless continued work on
the same job until September, 1952, except for two periods of
six weeks each, during one of which he was disabled by an
unrelated illness, and during another he was laid off when the
plant was closed. In September he went to the hospital for
tests, after which he attempted to return to work, but was
compelled to discontinue because of his back.

The board found that ‘‘ the evidence supports the Referee
finding of a causally related occupational disease under Section
38, Subdivision 2, Paragraph 29 ’’ of the Workmen’s Compensa-
tion Law, and the Appellate Division unanimously affirmed.
Paragraph 29 was first added as paragraph 28 to said subdivi-
sion 2 by chapter 254 of the Laws of 1935. The previous para-
graphs describe specific diseases as well as the process in each
case in which it must be contracted in order to make it com-
pensable. Paragraph 28 (now 29) supplemented the scheduled
diseases by adding thereto the broad language ‘‘ Any and all
occupational diseases ’’, and described the process as ‘‘ Any and
all employments enumerated in subdivision one of section three
of this chapter’’. Among the employments described as
“« hazardous ’’ in said subdivision is claimant’s present employ-
ment:—‘‘ Manufacture of * * * Automobiles ’’ in group 6,
and ‘‘ Workin * * * Machine shops’’ in group 14. Thus
claimant’s occupation is clearly among the hazardous employ-
ments and comes within the description of the process associated
with paragraph 29.

In addition to the inherent general hazards of such employ-
ment, there is evidence in this case, as already noted, that claim-
ant was required to bend, and to lift, push and move heavy
engine cases weighing 176 pounds and barrels of defective motor
parts each weighing over 100 pounds, which may well be
described as ‘‘ a hazard which distinguishe[d] it from the usual
run of occupations and which [was] in excess of the hazard
attending employment in general’? (Matter of Goldberg v. 954
Marcy Corp., 276 N. Y. 318, 319).

Inasmuch as the Legislature has used the all-embracing
language ‘‘ Any and all occupational diseases ’’ without limita-

tion other than describing the process in which such disease
must be contracted, the courts have been required to decide in
specific cases since the enactment of the statute whether or not
they came within its provisions.

The majority rely on Matter of Goldberg v. 954 Marcy Corp.
(276 N. Y. 313, supra); Matter of Harman v. Republic Aviation
Corp. (298 N. Y. 285 [1948]), and Matter of Champion v. Gurley
(299 N. Y. 406 [1949]). Matter of Goldberg was decided in 1938,
shortly after the enactment of said paragraph 28. It was there
held that a cashier selling tickets in an outside ticket booth who
sustained skin blotches and numb and weak feet as a result of
turning a heater on and off was not suffering from an occupa-
tional disease, but we affirmed the award on the ground of
accidental injury. There the disease was not caused by the
nature of her employment, for her work of ‘‘ handling cash and
tickets ’’ in and of itself had nothing to do with the ensuing
disability.

In Matter of Harman v. Republic Aviation Corp. (supra)
claimant, a worker in a well-ventilated tool shop, contracted
tuberculosis from a fellow employee. We reversed the award,
holding that claimant’s ailment was not an occupational disease,
that the hazard was his fellow worker ‘‘ and not any condition
that inhered in the nature of the employment itself ’’, and dis-
tinguished that case from Matter of Hessinger v. City of New
York (264 App. Div. 802, motion for leave to appeal denied 289
N. Y. 853) ; Matter of Shepardson v. Roosevelt Hosp. (271 App.
Div. 760) ; Matter of Yearich v. Roosevelt Hosp. (264 App. Div.
961, motion for leave to appeal denied 289 N. Y. 854); Matter
of Vanore v. Mary Immaculate Hosp. (285 N. Y. 681); Matter
of Mason v. Y. W. C. A. of City of New York (271 App. Div.
1042, motion for leave to appeal denied 297 N. Y. 1037).

In Matter of Champion v. Gurley (supra) claimant was an
inspector of surveying instruments. The onset of thrombo-
phlebitis followed jumping down from a raised platform on
which claimant’s desk was ‘‘ temporarily located’? for a few
weeks. We again reversed the award, stating (p. 408) that the
exposure was like that ‘‘of the claimant to the tuberculosis
suffered by a fellow bench worker in the Harman case ’’ (supra),
and that the ‘‘ incident described as responsible for the onset

Ss | — 565
ee

of the disease was limited to the claimant’s personal, individual
situation due to the temporary location of his desk on a
platform ’’,

Thus in each of these cases the disability did not ensue because
of the nature of the particular employment, but because of the
failure of the employer to furnish a proper and safe place to
work—an improper heating arrangement, an infected fellow
employee, and a raised platform, all temporary conditions. It
is true that in those cases we added that the disease must be
one which resulted wholly from the nature of the employment,
and must be a condition to which all workers engaged in that
particular occupation would be subject, but the question of a
pre-existing dormant physical condition was neither involved
nor discussed, as it was in other and later cases which we shall
presently consider.

In any event, it is well settled that a judicial opinion, like
evidence, is only binding [unless we decide to overrule it] so far
as it is relevant, and when it leaves the point at issue it no
longer has binding force (Crane v. Bennett, 177 N. Y. 106, 112;
Colonial City Traction Co. v. Kingston City R. R. Co., 154 N. Y.
498, 495), and what is said in such opinion must be confined
by the facts of the case in which it is uttered (People ea rel.
Desiderio v. Conolly, 238 N. Y. 826, 382; People ex rel. City of
New York v. Niwon, 229 N. Y. 856, 361; Frechette v. Special
Magazines, 285 App. Div. 174, 177). Mindful of those rules,
what was actually and necessarily decided in the cases relied
on by the majority does not, in the light of the decisions about
to be discussed, support their holding here.

In cases where the disability resulted from the nature of the
employment, we allowed awards for occupational diseases to
stand: (Matter of Foster v. Gillinder Bros., 278 N. Y. 348
[1938] [constant twisting and straining of body in lifting glass
from furnace] ; Matter of Bettcher v. E. I. du Pont de Nemours
é Co., 255 App. Div. 734 [1938], motion for leave to appeal
denied 280 N. Y. 850 [continuous lifting of heavy objects weigh-
ing 150-156 pounds]; Matter of Vanore v. Mary Immaculate
Hosp., 285 N. Y. 631 [1941], supra, and Matter of Yearich v.
Roosevelt Hosp., 264 App. Div. 961 [1942], motion for leave to
appeal denied 289 N. Y. 854, supra [hospital attendants con-

5
ee

tracted tuberculosis from patients]; Matter of Mason v. Y. W.
C. A. of City of New York, 271 App. Div. 1042 [1947], motion
for leave to appeal denied 297 N. Y. 1037, supra [telephone
operator contracted tuberculosis from infected telephone
equipment] ).

We turn then to the cases involving a pre-existing dormant
condition which has been activated or aggravated by the nature
of the employment. In Matter of Moore v. Colonial Sand &
Stone Co. (261 App. Div. 857 [1941], motion for leave to appeal
denied 285 N. Y. 860) an award was allowed on the ground that
a pre-existing dormant condition of tuberculosis was aggravated
by claimant’s occupation as a truck washer and greaser.

In Matter of Pinto v. Competent Fur Dressers (271 App. Div.
1036, affd. 297 N. Y. 846 [1948]), involving a fur worker, and
Matter of Peloso v. D’Alessio Bros., 298 N. Y. 582 [1948])
involving a worker in wet and cold areas, we held there may be
a finding of an occupational disease when the conditions of the
employment merely aggravate a pre-existing dormant condition.

In Matter of O’Neil v. American Locomotive Co. (276 App.
Div. 1043 [1950], motion for leave to appeal denied 301 N. Y.
815), claimant, who operated a degreasing machine, suffered
from arrested pulmonary tuberculosis prior to his employment.
He became totally disabled due to the nature of his employment,
and reactivation of tuberculosis was held to be an occupational
disease.

In Matter of Buchanan v. Bethlehem Steel Co. (278 App. Div.
594, affd. 8302 N. Y. 848 [1951]) claimant had a job which also
involved considerable lifting and pulling of steel products. He
too had a congenitally weak back which contributed to the
disability for which an award was made, and affirmed by the
Appellate Division. In that court, the majority rejected the
argument made in the dissenting opinion that since there was
no proof that claimant’s condition was a natural incident of his
occupation to which all employees of the same class were subject,
and inasmuch as, on the contrary, the proof was that people
with normal backs would not be thus affected, the award should
be reversed. We too disapproved the reasoning of the dissenting
opinion by our unanimous affirmance. ,

In -Matter of Griffin v. Griffin & Webster (283 App. Div.
145, motion for leave to appeal denied 306 N. Y. 984 [1954]),

Se | 567
ee}

claimant in an ice plant became totally disabled as the result of
the aggravation of a pre-existing condition of arteriosclerosis
peripheral vascular disease of the feet and ankles, which aggra-
vation was due to the nature of his employment. There was
no proof that his pre-existing condition could have been caused
by the occupation — the proof was entirely the other way. The
board found that the work aggravated the underlying condition
and the aggravation was an occupational disease. The Appel-
late Division in affirming the award stated (p. 148): ‘‘ Notwith-
standing the implications of exclusive causation in the use of the
word ‘wholly’ under the Washington decision in the Seattle
Cam case *, the actual trend of New York decisional law both
in the Court of Appeals and in this court seems to be to examine
the end result of the exposure to determine if the occupation
itself caused the disablement and, if it did, to hold the disease
to be ‘ occupational’ even if the employee brought within him-
self a predisposition to the disablement shared by no other
employee of his class.’? As noted, we denied leave to appeal.

Most recently, in Matter of Townsend v. Union Bag & Paper
Corp. (282 App. Div. 968, affd. 307 N. Y. 710 [1954]), we affirmed
an award for an occupational disease which was based on a
finding that the nature of claimant’s employment — pushing a
hand truck carrying 50-gallon barrels of paste across a concrete
floor —had caused the aggravation of a pre-existing congenital
condition of flat feet. Once again we rejected appellant’s con-
tention that since the work alone did not produce the condition,
there was no occupational disease.

The present appeal does not present the case of an ailment
merely happening on the employer’s premises. There is no
issue of causal relationship between claimant’s condition and
his work. It is true that he had a congenital malformation in
his back, but that had never caused him trouble before his
present employment. The nature of his work caused the present
disablement. His occupation was defined by statute as ‘‘ hazard-
ous ’’, and the bending, lifting, pushing and moving of heavy
engine cases and barrels of metal clearly distinguishes it from

* Seattle Can Co. v. Department of Labor & Industries (147 Wash. 303) cited
in the Harman case (supra), but in effect overruled by Simpson Logging Co. v.
Department of Labor d: Industries (32 Wn. 24 472).

the so-called usual run of occupations. It was more than ‘‘ the
ordinary wear and tear of life impinging on the infirmity with
which this man had been born’? and which infirmity he carried
with him without any difficulty during all of his previous life.

Under the broad definition of paragraph 29, his disablement
constituted an occupational disease. We have so held within
the last five years in the cases hereinbefore cited, particularly
in the Townsend, Griffin, Buchanan and O’Neil cases (supra).
We should therefore not refuse to do so again here, mindful at
the same time of the rule long since laid down in workmen’s
compensation cases that the Workmen’s Compensation Law is a
remedial statute and as such entitled to a liberal construction
(Matter of Commissioner of Taxation & Finance v. Nu-Art
Adv. Co., 271 N. Y. 112). Such has been the trend not only of
our decisions, but, according to Larson (Larson on Workmen’s
Compensation Law, § 41.62), is the majority rule in the coun-
try (Le Lenko v. Lee Co., 128 Conn. 499; Giambattista v.
Thomas A. Edison, Inc., 32 N. J. Super. 103 [1954]; Simpson
Logging Co. v. Department of Labor & Industries, 32 Wn. 2d
472, overruling in effect Seattle Can Co. v. Department of Labor
& Industries, 147 Wash. 303; Samuels v. Goodyear Tire &
Rubber Co., 317 Mich. 149; Kroger Grocery & Baking Co. v.
Industrial Comm., 239 Wis. 455).

In our view, the court is now about to overrule a line of com-
paratively recent cases which squarely presented the issue of
work-induced aggravation of an employee’s pre-existing ail-
ment resulting in disability and in which we allowed awards for
an occupational disease under paragraph 29 to stand. We not
only prefer to follow them, but deem it our duty to do so.

The order of the Appellate Division should be affirmed, with
costs.

Drsmonp, Fup and Burks, JJ., concur with Vay Vooruis, J.;
Froussex, J., dissents in an opinion in which Conway, Ch. J.,
concurs; Dyz, J., taking no part.

Order of Appellate Division reversed, award of the Work-
men’s Compensation Board annulled and claim dismissed, with
costs in this court and in the Appellate Division against
respondent Workmen’s Compensation Board.

In the Matter of New Yorx Tzsnepnons Company, Respondent,
against Pusiic Survicn Commission or raz Starz or New
Yorr, Appellant, and Crry or New York et al., Intervenors-
Appellants.

Argued November 29, 1955; decided February 17, 1956.

0
senses

Kent H. Brown, George H. Kenny, Joseph J. Doran, Law-
rence M. De Vore, Charles R. Gibson and Martin L. Barr for
appellant. I. While the traditional formula—rate base x rate
of return = return — still has general acceptance as an approach
to the problem of arriving at just and reasonable rates, the
so-called ‘‘ fair value’? rate base has been thoroughly dis-
eredited and repudiated. (Smyth v. Ames, 169 U. 8S. 466;
Consolidated Gas Co. of N. Y. v. Newton, 267 F. 231; McCardle
v. Indianapolis Co., 272 U. 8. 400; Lindheimer v. Illinois Tel.
Co., 292 U. S. 151; Dayton P. & L. Co. v. Commission, 292 U. 8.
290; West v. Chesapeake & P. Tel. Co., 295 U. 8. 662; South-
western Tel. Co. v. Public Service Comm., 262 U. 8. 276; Power
Comm. v. Pipeline Co., 315 U. 8. 575; Power Comm. v. Hope
Gas Co., 320 U. 8. 591; Cities Service Gas Co. v. Federal Power
Comm., 155 F. 2d 694.) IL. The Public Service Law requires
the commission to establish and permit the imposition of ‘ just
and reasonable ’’ rates—-nothing more, nothing less. It does
not prescribe any exclusive method or process by which such
rates shall be determined. (Matter of Village of Saratoga
Springs v. Saratoga Gas, Elec. Light & Power Co., 191 N. Y.
123; Purcell v. New York Central R. R. Co., 268 N. Y. 164;
Matter of International Ry. Co. v. Public Service Comm., 264
App. Div. 506, 289 N. Y¥. 830; Power Comm. v. Hope Gas Co.,
320 U. 8. 591; Onondaga Co. Water Auth. v. New York Water
Service Corp., 285 App. Div. 655; Pittsburgh Glass Co. v. Board,
313 U. 8. 146; Panhandle Co. v. Power Comm., 143 F. 2d 448,
324 U. 8. 635; Cities Service Gas Co. v. Power Comm., 155 F.
2d 694, 329 U. 8. 773; Board v. Hearst Publications, 322 U. 8.
111; National Broadcasting Co. v. United States, 319 U. 8. 190.)
III. Nothing in the legislative, judicial or administrative his-
tory of utility regulation and rate making in this State supports
the holding below that the commission is required to adopt the
formula approach exclusively and in so doing must use a ‘‘ fair
value’? rate base. (Prendergast v. New York Tel. Co., 262
U.S. 43; Matter of Bronx Gas & Elec. Co. v. Maltbie, 271 N. Y.
364; Matter of Consolidated Edison Co. v. Maltbie, 300 N. Y.
196; Northwestern Co. v. Power Comm., 321 U. S. 119; Ameri-
can Tel. & Tel. Co. v. United States, 299 U.S. 232; United States
v. New York Tel. Co., 326 U. 8. 638; Matter of Rochester Gas

ee 57)

& Elec. Corp. v. Maltbie, 271 App. Div. 202; Matter of Staten
1s. Edison Corp., 60 P. U. R. [N. S.] 885; Matter of New York
Tel. Co., 84 P. U. B. [N. 8.] 267; Matter of New York Tel. Co.,
91 P. U. RB. [N. 8.] 231.) IV. The commission did not err in
excluding the reproduction cost estimates and other evidence
solely designed to compute the company’s ‘‘ fair value”? rate
base. The proffered evidence was of no other import.

Peter Campbell Brown, Corporation Counsel (Morris Handel,
Leo A. Larkin and Morris Einhorn of counsel), for City of New
York, intervenor-appellant. I. The Public Service Law direc-
tive to determine just and reasonable telephone rates, modified
by a procedural prescription for due regard to a return upon
the ‘‘value’’ of the utility’s property, evinces no legislative
intent to require rates to be determined, as a matter of substan-
tive law, on the basis of the procedural doctrine of ‘‘ fair value ”’
or any of its offshoot theories, or on the basis of market or
exchange value. (Power Comm. v. Pipeline Co., 315 U. 8. 575;
Smyth v. Ames, 169 U. 8. 466; West v. Chesapeake & P. Tel.
Co., 295 U. S. 662; Southwestern Tel. Co. v. Public Service
Comm., 262 U. 8. 276; Sword Line v. Industrial Comr. of State
of N. ¥., 212 F. 2d 865; Willcox v. Consolidated Gas Co., 212
U. 8.19; Matter of Bronx Gas & Elec. Co. v. Maltbie, 271 N. Y.
364; People ex rel. Consolidated Water Co. v. Maltbie, 275
N. Y. 857; Railroad Comm. v. Pacific Gas Co., 302 U. S. 388;
McCardle v. Indianapolis Co., 272 U. 8. 400.) IL. The clear
purpose and manifest policy of the Public Service Law, as
indicated by subsequent legislative enactments, refutes the
applicability of market or exchange value to rate making.
(Surace v. Danna, 248 N. Y.18; Group of Investors v. Milwaukee
R. BR. Co., 318 U. 8. 523; Southwestern Tel. Co. v. Public Service
Comm., 262 U. 8. 276; Matter of International Ry. Co. v. Public
Service Comm., 264 App. Div. 506; New England Tel. & Tel.
Co. v. State, 95 N. H. 353; Matter of Consolidated Edison Co.
vy. Maltbie, 300 N. Y. 196; Driscoll v. Edison Co., 307 U. 8. 104;
St. Joseph Stock Yards Co. v. United States, 298 U. S. 38;
Bronx Gas & Elec. Co. v. Malibie, 268 N. Y. 278; RKO-Keith-
Orphewm Theatres v. City of New York, 308 N. Y. 493; Matter
of Mounting & Finishing Co. v. McGoldrick, 294 N. Y. 104.)

57 ee

Ira M. Millstein, Frank L. Weil and Milton Haselkorn for
Abraham & Straus and others, intervenors-appellants. I. The
company did not offer any competent proof of facts necessary
to be proved in order to authorize a determination as to the
reasonableness of (a) the business-residence relationship in
charges as contained in its proposed rates, and (b) the charges
for its various types of service; and, accordingly, the proposed
rates were not justified by the company as required by law.
(City of Rochester v. Rochester Gas & Elec. Corp., 233 N. Y.
39; Northern Pac. Ry. v. North Dakota, 236 U. S. 585; Norfolk
& W. Ry. v. West Virginia, 236 U. 8. 605; Banton v. Belt Line
Ry., 268 U. S. 413.) II. Petitioner’s contentions are without
merit. (Securities Comm. v. Chenery Corp., 332 U. 8S. 194;
Durkin v. Wagner Co., 115 F. Supp. 118; Universal Camera
Corp. v. Labor Bd., 340 U. 8. 474; Webb Constr. Co. v. National
Labor Relations Bd., 196 F. 2d 841; Matter of Village of Tupper
Lake v. Maltbie, 257 App. Div. 753.)

Jacob K. Javits, Atiorney-General (James O. Moore, Jr.,
John R. Davison and Sidney Kelly, Jr., of counsel), amicus
curie, in support of appellant’s position. J. The petition is
framed under subdivision 6 of section 1296 of the Civil Practice
Act which presents for review the question ‘‘ whether there
was any competent proof of all the facts necessary to be proved
in order to authorize the determination.’’ Yet, the opinions
and briefs below disclose that the sole question there litigated
and determined was whether the commission, in excluding evi-
dence of the theoretical cost of reproducing the petitioner’s
property, violated an alleged rule of law claimed to arise out
of subdivision 1 of section 97 of the Public Service Law. It
would seem, therefore, that the petition should more properly
be cast under subdivision 5 of section 1296 of the Civil Practice
Act to present for review the question of ‘‘ whether, in making
the determination, any rule of law affecting the rights of the
parties thereto has been violated to the prejudice of the peti-
tioner.’’ II. The majority of the Appellate Division, in constru-
ing subdivision 1 of section 97 of the Public Service Law, failed
to apply the time-tested rules of construction applicable to such
legislation. (Power Comm. v. Hope Gas Co., 320 U. 8. 591;
Smyth v. Ames, 169 U. 8. 466; United States v. Moore, 95 U. 8.

Se 573

760; Board v. Hearst Publications, 322 U. 8. 111; Matter of
Mounting & Finishing Co. v. McGoldrick, 294 N. Y. 104.)
WI. The restricted and artificial interpretation adopted by the
majority of the Appellate Division raises grave constitutional
questions and introduces chaos into the field of public utility
regulation. (Merchants Refrig. Co. v. Taylor, 275 N. Y. 1138;
Aerated Products Co. v. Godfrey, 290 N. Y¥. 92; Feyler v.
Mortimer, 299 N. Y. 309; Borden’s Co. v. Baldwin, 293 U. 8.
194; Hartford Co. v. Harrison, 301 U. 8. 459; United States
y. Rumely, 345 U.S. 41.)

Henry J. Friendly, Ralph W. Brown, Eric B. Nelson, Robert

' W. Doyle, Edward L. Friedman, Jr., and Jack A. Hamner for
respondent. I. The mandate of section 97 that the commission
shall give due regard to a reasonable average return upon the
value of the telephone company’s property actually used in the
public service requires the commission to hear and consider
evidence showing that the value of the property differs from
its depreciated original cost. (People v. Broadway R. R. Co.,
126 N. Y. 29; United States v. Mine Workers, 330 U. S. 258;
Fogarty v. United States, 340 U. 8. 8; Cleveland, C.,, C. &
St. Louis Ry. Co. v. Backus, 154 U. 8. 439; Smyth v. Ames,
169 U. S. 466; San Diego Land & Town Co. v. National City,
74 F. 79, 174 U. S. 739; Cotting v. Kansas City Stock Yards
Co., 82 F. 850, 183 U. S. 79; San Diego Land & Town Co. v.
Jasper, 189 U. 8. 439; Stanislaus Co. v. San Joaquin C. & I. Co.,
192 U. 8. 201; Willcox v. Consolidated Gas Co., 212 U. 8. 19.)
II. The courts of every one of the nine sister States where the
problem has arisen have held that, despite the Supreme Court’s
decision in the Hope case, statutes which by their terms or
established construction direct a commission to consider the
value of a utility’s property in fixing rates require the admis-
sion of evidence of value such as that offered here. (Solar
Elec. Co. v. Public Utility Comm., 137 Pa. Super. Ct. 325;
Peoples Natural Gas Co. v. Public Utility Comm., 153 Pa. Super.
Ct. 475; Philadelphia Transp. Co. v. Public Utility Comm., 155
Pa. Super. Ct. 9; City of Pittsburgh v. Public Utility Comm.,
158 Pa. Super. Ct. 229, 171 Pa. Super. Ct. 187, 174 Pa. Super.
Ct. 4; Northern States Power Co. v. Board of R. R. Comrs.,
TIN. D.1; Public Service Comm. v. Indianapolis Rys., 225 Ind.

5 ee
ee

30; East Ohio Gas Co. v. Public Utilities Comm., 1383 Ohio St.
212; City of Marietta v. Public Utilities Comm., 148 Ohio St.
173.) III. Other New York statutes afford no basis for reading
the rate base provisions of section 97 of the Public Service
Law in a manner contrary to their natural sense. (Smith v.
Western Pacific Ry. Co., 203 N. Y. 499; Hamilton v. Rathbone,
175 U. S. 414; Helvering v. City Bank Co., 296 U. S. 85; People
ex rel. Westchester Fire Ins. Co. v. Davenport, 91 N. Y. 574;
People ex rel. Bockes v. Wemple, 115 N. Y. 302; Brewster v.
Gage, 280 U. 8. 327; Matter of Brooklyn, Queens & Suburban
R. RB. Co., 185 N. Y. 171; Matter of Tiffany, 179 N. Y. 455;
Naramore v. State of New York, 285 N. Y. 80; Cimo v. State .
of New York, 306 N. Y. 143.) IV. The issue sought to be raised
by the department store intervenors is not properly before this
court. (Securities Comm. v. Chenery Corp., 318 U. 8. 80, 332
U. 8. 194; Matter of Barry v. O’Connell, 303 N. Y. 46; Ten Ten
Lincoln Place v. Consolidated Edison Co., 190 Misc. 174, 273
App. Div. 903, 273 App. Div. 973; People ex rel. Public Service
Comm. v. New York Tel. Co., 262 App. Div. 440, 287 N. Y. 803.)

Edmund B. Naylon, George Foster, Jr., and Edward F. Huber,
for Long Island Water Corporation, amicus curie, in support
of respondent’s position. I. The Public Service Law entitles
all public utilities in this State to rates based on the fair value
of their property. (Cummings v. Board of Educ. of City of
N. Y., 275 App. Div. 577, 300 N. Y. 611; Matter of Village of
Saratoga Springs v. Saratoga Gas, Elec. Light & Power Co.,
191 N. Y. 123; Matter of Rates of Queens Borough & Elec. Co.,
2P.8. C. RB. [ist Dist, N. Y.] 544; Matter of Balize v. Brooklyn
Borough Gas Co.,2 P. 8. C. R. [1st Dist., N. ¥.] 620; National
Waterworks Co. v. Kansas City, 62 F. 853; Morite v. Edison
Elec. Illuminating Co. of Brooklyn, 7 P. 8. C. R. [1st Dist.,
N. ¥.] 175; People ex rel. Kings Co. Lighting Co. v. Willcom,
210 N. Y¥. 479; Smyth v. Ames, 169 U. S. 466; San Diego Land
Co. v. National City, 174 U. 8. 739; Knoxville v. Water Co.,
212 U. 8.1.) IL. The long and consistent administrative, legis-
lative and judicial constructions of the rate-fixing provisions of
the Public Service Law, as requiring utility rates to be based
on fair value, preclude a contrary construction. (Matter of
New York Tel. Co., 91 P. U. B. [N. 8.] 231; Power Comm. v.

ee 375

Hope Gas Co., 820 U. 8. 591; Matter of Kolb v. Holling, 285
N. Y. 104; Grimmer v. Tenement House Dept. of City of N. Y.,
205 N. Y. 549; Cummings v. Board of Educ. of City of N. Y.,
275 App. Div. 577, 300 N. Y. 611; People ex rel. Public Service
Comm. v. New York Tel. Co., 262 App. Div. 440, 287 N. Y. 803;
People v. Dilliard, 252 App. Div. 125; Kings Co. Lighting Co.
v. City of New York, 176 App. Div. 175, 221 N. Y. 500; Matter
of Otis v. Board of Higher Educ. of City of N. Y., 199 Mise.
157; Matter of Dobess Realty Corp. v. Magid, 186 Misc. 225.)
III. The Hope case does not support the commission’s attempted
rejection of the fair value rate base. Other States have struck
down similar administrative attempts to use the Hope case as
an excuse for changing their rate-making standards. (Power
Comm. v. Pipeline Co., 315 U. S. 575; Illinois Bell Tel. Co. v.
IWinois Commerce Comm., 414 Ill. 275; Northern States Power
Co. v. Public Service Comm., 73 N. D. 211; Equitable Gas Co.
v. Pennsylvania Public Utility Comm., 160 Pa. Super. Ct. 458;
Peoples Natural Gas Co. v. Pennsylvania Public Utility Comm.,
153 Pa. Super. Ct. 475; Utah Power & Light Co. v. Public
Service Comm., 107 Utah 155; Matter of Consumers Power Co.,
82 P. U. RB. [N.8.] 97; Public Utilities Comm. v. Michigan State
Tel. Co., 228 Mich. 658; Matter of Michigan Bell Tel. Co., 85
P. U. R. [N. 8.] 327.) IV. As interpreted, the several rate-
making sections of our Public Service Law must be construed
as prescribing that the same standards be applied for all utility
rate making. (Matier of Doyle, 257 N. Y. 244; Techt v. Hughes,
229 N. Y. 222; People ex rel. Chadbourne v. Voorhis, 236 N. Y.
437; Smith v. People, 47 N. Y. 330; Matter of O’Sullivan v.
Feinberg, 201 Misc. 658; Matthews v. Matthews, 240 N. Y. 28;
People ex rel. Standard Oil Co. v. Sane, 179 App. Div. 721,
222 N. Y. 545; People ex rel. Doscher v. Sisson, 222 N. Y. 387;
Matter of Chatlos v. McGoldrick, 302 N. Y. 380; Matter of
Meyer, 209 N. Y. 386.)

Frozssen, J. The single narrow issue presented on this appeal
is whether or not the Public Service Commission, in a telephone
rate proceeding under section 97 of the Public Service Law,
erred in refusing to receive evidence offered by petitioner of
the reproduction cost less depreciation of its physical plant.
The weight to be given such evidence, as we shall indicate later,
is quite another matter.

6

Until the 1944 decision of the Supreme Court of the United
States in Federal Power Comm. v. Hope Natural Gas Co. (320
U. 8. 591), the resolution of the issue before us would have
required consideration of constitutional principles as enunciated
in the frequently cited case of Smyth v. Ames (169 U. S. 466)
decided in 1898. There the Supreme Court held that in deter-
mining reasonable rates upon the fair value of a utility’s prop-
erty used in the public service, regulatory bodies must take into
consideration various factors, including both original costs and
reproduction value. However, in 1944, that court determined
that the Constitution did not mandate consideration of reproduc-
tion cost or any other specific factor in fixing rates, provided the
end result —the rate fixed —be just and reasonable (Federal
Power Comm. v. Hope Natural Gas Co., supra).

With the constitutional barrier thus removed, public utility
rate making in this State remained nonetheless subject to our
statutory mandate. Section 97 of the Public Service Commission
Law, which is the governing statute in telephone rate proceed-
ings, provides: ‘‘ the commission shall, with due regard, among
other things, to a reasonable average return upon the value of
the property actually used in the public service and to the
necessity of making reservation out of income for surplus and
contingencies, determine the just and reasonable rates ’’.
(Emphasis supplied.)

The telephone company contends that the above language
requires the commission to give due regard to a reasonable
return upon a rate base consisting of the present value of its
plant, and has offered evidence before the commission as to its
current reproduction cost. The commission, however, has
refused to receive the ‘‘ bulk’’ of such evidence, taking the
position that it would use a ‘‘so-called investment rate base:
one based on original cost less the actual depreciation reserve ’’,
and that the language of the statute is not mandatory, or that,
even if it were, it would not require the commission to accept
proof of reproduction cost. The majority of the Appellate
Division has rejected the position of the commission, and ruled
that the proffered evidence of reproduction cost was improperly
refused. In our view, this conclusion is inescapable in light
of the history and clear language of the Public Service Law.

ee 577
ees}

The legislative history of section 97 and related sections is set
forth adequately in the prevailing opinion below, and it will
serve no useful purpose to review it here. In sum, it clearly
obviates any mere accident of language in the various statutes
whence the commission derives its authority to fix rates for
specific utilities. There can be no doubt that the Legislature,
in enacting the Public Service Law, intended the difference
between those factors which the commission shall consider
‘among other things’? when determining (1) telephone and
railroad rates [a just and reasonable return ‘‘ upon the value of
the property actually used in the public service ’’ (telephone
corporations: § 97; railroad corporations: § 49, both of which
embrace large territories in the State)] and (2) those of other
utilities [a just and reasonable return upon ‘ capital actually
expended ’’ (omnibus corporations: § 63-b; gas and electric
corporations: § 72; steam corporations: § 85; waterworks cor-
porations: § 89-j, utilities more local in scope) ].

There is additional evidence that the language of section 97
was deliberately chosen. By chapter 134 of the Laws of 1921,
the Legislature amended sections 49 and 97 of the Public Service
Law which then provided that the commission ‘“ shall, with
due regard, among other things, to a reasonable average return
upon the value of the property actually used in the public
service * * * determine the just and reasonable ’’ rates, by
causing ‘‘ shall’’ to read ‘‘ may ’’ and by inserting the words
“in its diseretion ’’ before ‘‘ determine ’’. However, promptly
following requests made by Governor Miller (his Papers, 1921,
pp. 92-94), the Legislature, among other things, deleted the
amendments and restored sections 49 and 97 to their previous
mandatory form (L. 1921, ch. 335), which is also their present
form.

Indeed, for many years, the commission construed section 97
as requiring a finding of ‘‘value ’’, and recognized that, under
the statute, aside from constitutional considerations, ‘‘ value ’”’
was something very different from original cost, as, e.g., Matter
of Stone v. New York Tel. Co. (26 N. Y. St. Dept. Rep. 235
[1921]); Matter of Buck v. New York Tel. Co. (26 N. Y. St.
Dept. Rep. 455 [1921]) ; Matter of New York Tel. Co. (29 N. Y.
St. Dept. Rep. 1 [1923]) ; Matter of New York Tel. Co, (84.N. Y.
St. Dept. Rep. 621 [1926]).

a

58 ee
bee!

Moreover, in its rule IV governing rate proceedings, after
providing that ‘‘ the utility shall establish by competent evi-
dence the original cost of the property used and useful in the
service * * * and the accrued depreciation thereon”’
(subd. 8), the commission also provided: ‘‘ Evidence of repro-
duction cost need not be submitted but if presented it shall be
shownby * * * [a prescribed method] and the correspond-
ing original cost and book cost of the property ’’ is also required
to be shown if the book cost differs from the original cost (subd.
10). Subdivision 11 further provides: ‘‘ If evidence of repro-
duction cost is submitted, the accrued depreciation * * *
shall be shown * * *. Reproduction cost without accrued
depreciation is not an element in determining the value of the
property for the purpose of computing a return and will not be
accepted as such’? (Rules of Procedure of Public Service
Comm., eff. July 1, 1948, as amd. rule IV; 4 N. Y. Official
Compilation of Codes, Rules & Regulations, pp. 6-7; all emphasis
supplied). Thus, by its own rules, it clearly indicates that such
evidence may be submitted.

Despite its interpretation of section 97 over the years, and its
own rules which were in effect prior to the Hope case (supra),
and still are, the commission now takes the view that the same
statute and said rules authorize it to bar proof of reproduction
cost less depreciation as some evidence of the value of the
company’s property actually used in the public service. It took
this view, it says, for the first time in 1945, one year after the
Hope case, in Maiter of Staten Is. Edison Corp. (60 P. U. RB.
{N. 8.] 385, 421).

But the Hope case, of course, could not amend our statute.
Only the Legislature may do that. Since it has not chosen to do
so, although well over a decade has elapsed since the Supreme
Court removed the aforesaid constitutional barrier, section 97
continues to require that the commission shall ‘‘determine the
just and reasonable rates ’’ ‘‘ with due regard, among other
things ’’, to a reasonable average return upon the present value
of the company’s plant, ic., ‘‘ property actually used in the
public service ’”? (emphasis supplied).

The concept of value, of course, is quite different from that
of cost, and the expression “‘ actually used ’’ connotes a present

ee 37)
Leer

use. Thus the commission is required to receive proof of repro-
duction cost less depreciation as some evidence of present value
in the case of utility property which, due to the unique restric-
tions placed upon it by law, cannot readily be valued by other
usual methods, such as so-called ‘‘ market’’, ‘‘ sales’? or
“* exchange ’’ value.

This is not to say that the rates must be based upon repro-
duction cost less depreciation. As the commission itself states,
it is under no statutory or other obligation to confine itself to
consideration of any particular one of the various alternative
rate bases. All that the statute says is that the commission shall
“« determine the just and reasonable rates ’’ with ‘‘ due regard,
among other things, to a reasonable average return upon the
value of the property actually used in the public service ’’.
“Due regard ’’ to one factor ‘“‘ among other things ’’ requires
consideration of that factor. It is by no means controlling.
While price indices rise in some periods, in others the general
level of prices declines. What consideration is to be given to
‘value’? “among other things ’’ is for the commission to
decide, having in mind that the overriding principle governing
its primary duty is that it shall determine ‘‘ just and reasonable
rates ’’,

“Due regard ’’, as the Supreme Court of the United States
has said, ‘‘ calls for the exercise of discretion ’’ (Opp Cotton
Mills v. Administrator, 312 U. 8. 126, 151). ‘* To give due con-
sideration to a particular factor necessarily means to give such
weight or significance to it as under the circumstances it seems
to merit, and this, of course, involves discretion’? (United
States ex rel. Maine Potato Growers & Shippers Assn. v. Inter-
state Commerce Comm., 88 F. 2d 780, 783, certiorari denied
300 U. S. 684). In Railroad Comm. v. Pacific Gas Co. (302 U.S.
888), Chief Justice Hueuns said (p. 398): ‘‘ While the Court
has frequently declared that ‘in order to determine present
value, the cost of reproducing the property is a relevant fact
which should have appropriate consideration,’ we have been
careful to point out that ‘the Court has not decided that the
cost of reproduction furnishes an exclusive test’ and in that
relation we have ‘ emphasized the danger in resting conclusions
upon estimates of a conjectural character.’ ’? (See, also, People

0

ea rel. Consolidated Water Co. v. Maltbie, 275 N. Y. 357, appeal
dismissed on the ground that ‘‘ no substantial federal question
is presented ’’, 303 U. S. 158.)

If, then, as we believe, the statute has a clear and definite
meaning by its plain language and in the light of its legislative
history, neither the commission nor the courts may presume to
say that its meaning must now be changed because it reflects an
approach to rate making which may currently be unpopular with
some experts. Although it is urged that the language of the
statute represents the survival of a theory of rate making which
is unsound and outmoded, it may here be noted that the element
of reproduction cost, which was introduced for the protection
of the public as a means of avoiding rates based upon an exces-
sive and unreasonable capital structure, may also serve as a
potential safeguard for the public in times of recession. Nor
is it without some significance that, after much debate, the 1938
Constitutional Convention recommended, and the People of the
State subsequently approved — forty years after Smyth v. Ames
(supra) —a provision guaranteeing to municipally owned util-
ities a fair return on “‘ the value of the property used and useful
in such public utility service’? (N. Y. Const., art. III, § 18;
emphasis supplied).

In any event, if indeed the advocates for a prudent investment
or any other theory are correct and it is time for a change, that
decision is not ours to make. The function of the judiciary is
not to choose between different theories of rate making on the
sole basis of their alleged merits. All arguments concerning
such matters should properly be addressed to the Legislature
which, within constitutional limits, may adopt or favor one over
the other — as it did in 1934 (L. 1934, ch. 287) in section 114 of
the Public Service Law, relating to the fixing of temporary
rates —or may rely upon the expertise of the commission by
empowering them to employ methods and procedures reflecting
current trends in economic thought. Neither we, nor any other
court, have the power to amend the law as written (Meltzer v.
Koenigsberg, 302 N. Y. 523).

The department stores, intervenors- appellants, urge that we
uphold the commission on the basis of the alleged invalidity of
rates for business service, as proposed by the telephone com-

[| 581
ee

pany, in that the company failed to sustain its proposed rates as
to business service. Since the question of allocation of rates
was never reached below, this is a matter which must be reserved
for the commission upon rehearing.

* The order below should be affirmed.

Dyz, J. (dissenting). , I dissent and vote to reverse the order
of the court below and to confirm and reinstate the determina-
tion of the Public Service Commission, with costs in all courts,
on the ground that the cost of reproducing the petitioner’s
multimillion dollar plant is not material or relevant in the
computation of a value rate base. Subdivision 1 of section 97
of the Public Service Law, as I read it, does not mandate the
Public Service Commission to employ any exclusive method or
process for the determination of a just and reasonable value
rate basis, nor does it require such commission to deal differently
with separate types of utilities, but rather it requires it to use
any fair and reasonable method or process to ascertain a just
and reasonable value base, as long as it gives ‘‘ due regard
* * * to a reasonable average return upon the value of the
property actually used in the public service ’’ (§ 97, subd. 1).
Upon this record, I am satisfied it did so here, particularly as
the petitioner does not claim that the rates allowed are either

. unjust or unreasonable. (See Federal Power Comm. v. Hope

Natural Gas Co., 320 U. 8. 591.)

Conway, Ch. J., Dusmoxp and Van Vooruis, JJ., concur with
Frozssex, J.; Dyz, J., dissents in a memorandum; Furp and
Borxs, JJ., taking no part.

Order affirmed.

a
Davw J. Cownotuy et al., as Receivers to Collect a Judgment
in Favor of Burlington County Bridge Commission, et al.,

Respondents, v. Ropar K. Butt et al., Defendants, and Txx0-
pors R. Hanrr et al., Appellants.

Argued November 14, 1955; decided February 17, 1956.

583

Frederick W. R. Pride, Donald J. Nugent and Robert M.
Lane for appellants. I. Hither triable issues are presented as
to the scope and extent of appellants’ defenses or the allega-
tions concerning them must be accepted as true. (Di Menna
& Sons v. City of New York, 301 N. Y. 118; Werfel v. Zivno-
stenska Banka, 287 N. Y. 91; Curry v. Mackenzie, 239 N. Y.
267; Gravenhorst v. Zimmerman & Forshay, 236 N. Y. 22;
General Investment Co. v. Interborough R. T. Co., 235 N. Y.
133.) II. Appellants’ affirmative defenses are sufficient as a
matter of law. (Munday v. Vail, 34 N. J. L. 418; Reynolds v.
Stockton, 43 N. J. Hig. 211, 140 U. S. 254; Perkins v. Guaranty
Trust Co., 274 N. Y. 250, 276 N. Y. 553; Clapp v. McCabe, 155
N. Y¥. 525; Walrath v. Hanover Fire Ins. Co., 216 N. Y. 220;
Lamphere v. Lang, 213 N. Y. 585; Wright v. Delafield, 25 N. Y.
266; McNeil v. Cobb, 186 App. Div. 177, 230 N. Y. 536; Inter-
national Photo Recording Machines v. Microstat Corp., 269
App. Div. 485; McCarthy v. Troberg, 275 App. Div. 139.)
III. The judgment here sued upon, by its terms, does not pur-

584 |
ee

port to impose liability against the appellant partnership of
Ketcham & Nongard for the damages sought by respondents
in this action.

A. Donald MacKinnon, Rebecca M. Cutler and Michael F. Orr
for respondents. I. There is no triable issue of fact and sum-
mary judgment is proper. (Franklin v. Lee, 233 App. Div. 592,
259 N. Y. 532.) II. The New Jersey judgment was not lacking
in due process. (Valentine v. Richardt, 126 N. Y. 272; Inter-
national Photo Recording Machines v. Microstat Corp., 269
App. Div. 485; Post v. Browne, 279 App. Div. 922, 304 N. Y. 610;
Hall v. Ames, 190 F. 188; Standard Oil Co. v. Missouri, 224
U. S. 270; Milliken v. Meyer, 311 U. S. 457; Bell Tel. Co. v.
Utility Comm., 309 U. S. 30; Schenck v. State Line Tel. Co.,
238 N. Y. 308: Reynolds v. Stockton, 140 U. S. 254; Oliphant
v. Burns, 146 N. Y. 218.)

William J. McDonald, Jr., Charles S. Bannerman and Coving-
ton Hardee for B. J. Van Ingen & Co., Inc, amicus curie, in
support of respondents’ position. I. This suit is an action of
debt upon a judgment rendered in another State. Under the
United States Constitution that judgment is entitled to full
faith and credit. Collateral attack upon a foreign judgment on
grounds of lack of jurisdiction is precluded when the juris-
dictional issue was or could have been determined in the ren-
dering forum. (Treinies v. Sunshine Mining Co., 308 U. S. 66;
Thompson v. Whitman, 18 Wall. [U. 8.] 457; Christmas v.
Russell, 5 Wall. [U. 8.] 290; Milliken v. Meyer, 311 U. S. 457; .
Fauntleroy v. Lum, 210 U. 8. 230; Sherrer v. Sherrer, 334
U. 8. 348; Stoll v. Gottlieb, 305 U. 8. 165; Chicot Co. Dist. v.
Bank, 308 U. 8S. 371.) II. The New Jersey judgment herein
sued upon may not be collaterally attacked on jurisdictional
grounds. Full faith and credit precludes such an attack since
the jurisdictional issue was or could have been determined in
New Jersey. (Driscoll v. Burlington-Bristol Bridge Co., 8 N. J.
433; Davis v. Cohen & Co., 268 U.S. 638; Central New England
Ry. Co. v. Boston & A. R. RB. Co., 279 U.S. 415.)

Conway, Ch. J. This is an action upon a judgment of the
Supreme Court of New Jersey. The following is a summary
of the background of the litigation.

585

Sometime during 1946 a group of men —the defendants Bell,
Christensen, Hanff, Ketcham, Nongard, Parks and Clifford R.
Powell (but not the partnership of Ketcham & Nongard as
such, and not the individual defendant Murray) — organized
themselves as a syndicate to acquire two bridges across the
Delaware River: the Burlington-Bristol Bridge and the Tacony-
Palmyra Bridge, both of which were then owned by private
corporations. In December, 1946, arrangements were made
to purchase the stock of the Burlington-Bristol Bridge Company
(hereinafter called Bridge Company) for $1,350,000 — financed
by placing a $1,000,000 mortgage upon the bridge, and by
giving to the sellers notes for $350,000 secured by the Bridge
Company stock. In order to remove a potential obstacle to
the syndicate’s plans, a bill was introduced in the New Jersey
Legislature and passed with the aid of Powell—one of the
members of the syndicate— which provided, in effect, that if
a bridge became the property of a public body then the State
of New Jersey would lose a right which it previously had to
acquire that bridge by condemnation at a price regulated by
statute (see Rev. Stat. of N. J., § 48:5-22). Thereafter, on
October 29, 1947, the syndicate members and their nominees

‘ took over the Burlington-Bristol Bridge Company and became
its sole stockholders. Although the syndicate advanced no: cash
of its own at the time of this purchase, it was subsequently
necessary for the syndicate members to contribute some $50,000
to the Bridge Company for working capital and expenses. The
partnership firm of Ketcham & Nongard acquired a one-quarter
interest in the stock of the Bridge Company and contributed
ove quarter of this sum.

In the spring of 1948 Ketcham and Hanff began negotiating
for the acquisition of the stock of the Tacony-Palmyra Bridge
Company. With the aid of the Sarjem Corporation, an Illinois
corporation which dealt in the purchase and sale of bridges and
other public utilities, options were acquired for the purchase
of 80% of the stock of this bridge company at approximately
twice the price at which it was then being sold on the Philadel-
phia Exchange. The total offer by the Sarjem Corporation for
all the stock of the Tacony-Palmyra Bridge Company was
$6,487,500. On October 6, 1948, it was agreed that the Bridge

586 eee
eee

Company (now owned and controlled by the syndicate) would
purchase from the Sarjem Corporation all the stock of the
Tacony-Palmyra Bridge Company for $6,700,000, plus certain
expenses, provided that the entire transaction was completed
by October 22, 1948. Thus the total cost to the syndicate of
the two bridges was $8,050,000, plus the expenses referred to
in connection with the Tacony-Palmyra Bridge and the $50,000
contributed to the Burlington-Bristol Bridge Company by the
purchasers.

During this same time in the fall of 1948 certain members
of the syndicate made contact with Freeholder Snover, an
elected official of Burlington County, and told him that they
had a proposition which would benefit that county. He was
informed that if the freeholders should establish a bridge com-
mission, the syndicate would be able to sell to that commission
the two bridges here involved for $12,000,000, to be financed by
the issuance of $12,400,000 in bridge revenue bonds. No other
freeholders were informed of this transaction until the night
of October 20, 1948, when a meeting of the freeholders was
ealled at the home of Freeholder Snover. Snover explained
the syndicate’s proposition and submitted to his associates .
copies of various documents obtained by the syndicate. The
freeholders were told that the entire transaction had to be com-
pleted within forty-eight hours ‘‘as is’? or the proposition
would be withdrawn. Before that evening meeting was over,
the freeholders had agreed to adopt the syndicate’s plan and
offer in all particulars, even to the selection of bridge commis-
sioners. The following day the newly chosen bridge commis-
sioners-to-be met with members of the syndicate and accepted
the entire proposition. There was no independent inquiry or
investigation made by the commissioners, no outside advice was
sought by them, and no change in the syndicate’s proposition
was suggested. On the next day, October 22, 1948, the scheduled
public meeting of the Burlington County Freeholders was held,
and as the first order of business it unanimously adopted, with-
out discussion, a resolution establishing the Burlington County
Bridge Commission and appointing as its members the men
selected two days previously. Within a short time the plan for
the acquisition of the two bridges was effected. In the words

meee 587
re

of the New Jersey Supreme Court, ‘‘ By 11:30 a.m., less than
an hour from the time their meeting had commenced, the bridge
commissioners had organized and put through a $12,000,000
transaction of which they were totally ignorant only 18 hours
before and about which they had no information or advice other
than that furnished them by the sellers.” (Driscoll v. Burling-
ton-Bristol Bridge Co., 8 N. J. 483, 465). As a result of these
transactions, the syndicate realized a net profit of $1,894,637
after payment of $700,000 for promotion fees and expenses,
$355,710 for bond discount to the firm of Ketcham & Nongard
which was to dispose of the entire issue of bridge revenue bonds,
and $100,000 paid in escrow against possible tax liability. After
the closing was completed, the firm of B. J. Van Ingen &
Co., Inc., organized a syndicate to sell the bonds. A note dated
October 27, 1948, in the amount of $11,317,156.40 and signed
on behalf of the members of the bond syndicate by B. J. Van
Ingen & Co., Inc., and by Ketcham & Nongard as a partner-
ship obligation, was accepted by the Chemical Bank and Trust
Company of New York, which made a loan in that amount to
the bond syndicate, with the entire issue of bonds pledged with
that bank as security, and cancelled certain obligations of
Ketcham & Nongard and B. J. Van Ingen & Co., Inc., arising
out of loans previously made to facilitate the purchase of the
entire bond issue.

On December 3, 1948, the Governor and Attorney-General of
the State of New Jersey commenced an action in that State
which resulted in the judgment now sued upon in New York
and culminated in the present appeal. The original complaint
filed in New Jersey alleged the facts substantially set forth
above and sought relief in the form of (1) a declaration voiding
the resolutions creating the bridge commission, (2) a declara-
tion that all the acts and resolutions of the bridge commission
were null and void, (3) a declaration that the deeds transfer-
ring the two bridges were null and void, and (4) an order direct-
ing that the two bridges be returned to the two companies,
respectively, from which the syndicate had purchased them, and
“such other and further relief as this Court may deem just
and equitable in the premises.’

On February 6, 1950, the plaintiffs filed an amended com-
plaint which alleged, inter alia, that as a result of the trans-

588 |
ese

actions complained of the State of New Jersey had been
deprived of its right to acquire the two bridges for some
$5,000,000 via condemnation proceedings. Accordingly, the
plaintiffs prayed for the difference between that condemnation
price and the price paid for the two bridges — $7,400,000. That
eause of action was dismissed by the trial court, and no appeal
was taken from that dismissal.

The Superior Court of New Jersey determined that the bridge
commission should (1) reconvey title to the two bridges to
the Burlington-Bristol Bridge Company; (2) retransfer the
stock of that company to the respective sellers thereof; (3) repay
the bondholders $400,000 plus the net revenues from the bridges
from the date of their acquisition; and (4) return to the Bridge
Company, to be held subject to the order of the court, the
$550,000 which was in the Bridge Company’s treasury at the
time the bridge commission acquired it. The Bridge Company
and the members of the bridge-selling syndicate who received
the purchase money for the stock of the Burlington-Bristol
Bridge Company from the bridge commission were directed to
repay the bondholders all moneys received from them, and
‘each shall disgorge and be required to repay such part of
the purchase price as each received.’? The bondholders were
given (1) the right to be subrogated to the rights of mortgagees
and other lienors of the Bridge Company as of October 22,
1948, to the extent that such encumbrancers were paid off with

the bondholders’ moneys, and (2) a lien on the revenues of

the bridges until the bonds were paid off, subject to the State’s
right of condemnation. A judgment was entered on December
29, 1950, incorporating the terms of the decision, and requiring
each individually named defendant to pay a specific sum of
money. That judgment provided in part as follows:

‘3, The members of the bridge sellers’ syndicate (herein-
after referred to as the ‘judgment debtors’) shall repay the
sum of $3,050,347.00 which they received as the purchase price
for their stock in the Burlington-Bristol Bridge Company, and
judgments in favor of the Commission are directed as follows:

Against Richard C. Nongard $343,164.03
Against Tuthill Ketcham 343,164.03
Against Rowland H. Murray $ 76,258.68 * * *,7

Le 589

Five things should be noted about this judgment of the lower
court of New Jersey: (1) the total of the liabilities of the
individually named judgment debtors was $3,050,347; (2) the
firm of Ketcham & Nongard, as a partnership, was not named
as one of the judgment debtors; (3) the total liability of the
three partners of that firm mentioned by name (i.e., Ketcham,
Nongard and Murray) was only $762,586.74, and not $3,050,347 ;
(4) the specific liability of each of those partners named in the
judgment was not equal: Ketcham and Nongard individually,
were adjudged liable for $343,164.03 each, but Murray was
adjudged liable for only $76,258.68; and (5) there was no pro-
vision as to joint and several liability. That the omission of
the partnership of Ketcham & Nongard, as such, was not merely
oversight is indicated by the fact that in another part of that
same judgment the receivers were given a lien upon such of
the bridge revenue bonds as were owned by Ketcham, Nongard
and Murray “ individually and as partners trading as Ketcham
& Nongard.”’

An appeal was taken from that judgment by certain of the
defendants to the Supreme Court of New Jersey. A judgment
was entered upon the decision of that latter court on March 14,
1952. It differed from the judgment of the Superior Court in
this important respect: instead of directing the reconveyance
of the two bridges back to the Bridge Company, the return of
the stock of that company to its sellers and the repayment of
the bondholders by the Bridge Company, the judgment entered
upon the decision of the Supreme Court confirmed title to the
two bridges in the bridge commission. It then ordered the sell-
ers of the Bridge Company to pay to the bridge commission all
profits received from the transaction, and it decreed that all
participants in the bond syndicate with the exception of the
partnership firm of Ketcham & Nongard were holders in due
course of the bridge revenue bonds, and as such ‘‘ entitled to
enforce the Bonds held by them to the extent of their interest
therein and according to the terms thereof.’’

Respondents thereafter commenced this action in New York
upon the New Jersey Supreme Court judgment. The New York
Supreme Court denied respondents’ motion for summary judg-
ment but the Appellate Division reversed and granted that
motion. The judgment entered upon the order of the Appellate

590 a

Division herein included the partnership of Ketcham & Non-
gard, as such, among those liable for the gross profits of
$3,050,347 resulting from the sale to the bridge commission.
In justification for such inclusion, the Appellate Division said:
‘* Lastly, the defendants say that there was no basis for enter-
ing a judgment here against Ketcham and Nongard, a copart-
nership. The judgment in New Jersey defined the selling syndi-
cate to include such a partnership. The selling syndicate was
directed to repay the $3,050,347. This would appear to warrant
a judgment against the partnership. All partners were sued
and served individually as well.

‘There appears to be no valid reason why a judgment should
not be entered here as demanded in the complaint.”? (286 App.
Div. 220, 231.) That partnership was an active party in the
litigation in New Jersey and it may be that it could have been
adjudged jointly liable with the members of the selling syndicate
for $3,050,347. Neither court of that State, however, imposed
such liability. The judgments of both courts in that State
carefully specified not only who but for how much each named
judgment debtor was liable. In addition, the judgment entered
upon the decision of the Supreme Court of New Jersey specified
that certain of the individual defendants were jointly and sev-
erally liable for the full amount of gross profits, while the
remaining individual defendants were severally liable only for
specific sums. This language which emphasizes the absence of
any intention to adjudge the partnership firm of Ketcham &
Nongard liable for the total amount of profit, is as follows:
“The obligation to repay this sum [i.e., $3,050,347] is both
joint and several as to Robert K. Bell, Theodore R. Hanff,
Tuthill Ketcham, Richard C. Nongard and Clifford R. Powell,
but shall be several only as against the remaining sellers in the
amounts they each receive specifically: * * *.’? (Emphasis
supplied.) (See 8N.J.501.) Itis significant that in adjudging
the liabilities of the three partners of Ketcham & Nongard
mentioned in this part of the judgment two—Nongard and
Ketcham as individuals—were adjudged jointly and severally
liable for the entire $3,050,347, whereas the third partner —
Murray—was adjudged liable severally only and for but
$76,258.68. The partnership of Ketcham & Nongard, however,
was not included in the enumeration of parties defendant

a 591
ce sss

adjudged to be either jointly and severally liable or to be
severally liable only. Thus, whatever the New Jersey courts
may have been warranted in doing in this respect, as far as
the partnership was concerned, they did not do it, and we can-
not enlarge the New Jersey judgment, but must take it as we
find it. A reading of the opinion in Nongard v. Burlington Co.
Bridge Comm. (229 F. 2d 622) confirms this. (See pages 624,
626-627 of that opinion.)

The New Jersey judgment entered upon the Supreme Court
decision decreed that all but one of the participants in the bond
syndicate —including the Chemical Bank & Trust Company
as well as B. J. Van Ingen & Oo., Inc.— were holders in due
course of the bridge revenue bonds and were entitled to enforce
them as such. The sole exclusion was the partnership firm of
Ketcham & Nongard, as to which the New Jersey judgment
decreed that the bonds held by it were null and void ‘‘ except
to the extent that the Chemical Bank has an interest therein
as pledgee.’? If and in the event that the Chemical Bank &
Trust Company exercised its rights as the pledgee of the bridge
revenue bonds owned by the partnership firm of Ketcham &
Nongard, ‘‘so that the Bridge Commission either pays or
remains obligated to pay principal or interest thereon the
Bridge Commission shall be subrogated to all the rights of
the Chemical Bank against Ketcham and Nongard arising out
of the note dated October 27, 1948 of the bond syndicate whick
the Bonds were pledged to secure.’? The firm of Ketcham &
Nongard owned $1,240,000 of the bridge revenue bonds, and
was obligated to the extent of $1,131,715.66 on the note of
October 27, 1948. By its check dated December 1, 1948, .the
partnership firm of Ketcham & Nongard had paid the sum of
$350,000 in reduction of this liability. Between April 3, 1952,
and February 15, 1954, the Burlington County Bridge Commis-
sion paid off the entire balance of $781,715.66 remaining due
as Ketcham & Nongard’s liability on the note of October 27,
1948, together with interest in the sum of $104,676.87, a tota’
of $886,392.53.

In the second cause of action in the plaintiff’s amended com-
plaint in the Supreme Court of New York, the plaintiffs
demanded monetary damages against the partnership of Ket-
cham & Nongard based upon those payments made to the

592 Ln
ee

Chemical Bank & Trust Company by the Burlington County
Bridge Commission. From the language of the New Jersey
judgment which carefully specified the dollar liability of each
of the three partners mentioned, as well as from the language
of the New Jersey Supreme Court, however, it is obvious that
it was never intended to impose upon this partnership the
liability for $3,050,347 in addition to the liability for $886,392.53
claimed as recited above. Accordingly, it was error on the
part of the court below to have directed the inclusion of the
firm of Ketcham & Nongard among those liable for the gross
profits of $3,050,347. The only liability of that partnership,
under the New Jersey judgment, was to the bridge commission
for such sums as that commission might pay to the Chemical
Bank & Trust Company as pledgee of those bonds owned by
Ketcham & Nongard which had been pledged with the bank by
that partnership to secure its obligations under the note dated
October 27, 1948. Those sums were set forth in the plaintiffs’
amended complaint in the New York action, and are contained
in the judgment entered upon the order of the Appellate
Division.

It was suggested that certain liability imposed upon the
defendant partnership was beyond the jurisdiction of the New
Jersey court, and hence that the judgment of that court was
not entitled to be enforced in New York. In Reynolds v. Stock-
ton (140 U. S. 254), however, the Supreme Court stated that
“The requirements of that section [i.e., U. S. Const., art. IV,
§ 1] are fulfilled when a judgment rendered in a court of one
State, which has jurisdiction of the subject matter and of the
person, and which is substantially responsive to the issues pre-
sented by the pleadings, or is rendered under such circum-
stances that it is apparent that the defeated party was in fact
heard on the matter determined, is recognized and enforced in
the courts of another State.’’ (140 U. S. 264; emphasis sup-
plied.) In the present case no one argues that either the
defendants or the subject matter —i.e., the cause of action for
equitable relief based upon fraudulent conduct in the acquisition
and sale of the bridges — were not before the New Jersey courts.
The relief finally awarded was, in the judgment of the New
Jersey court, the only equitable relief possible in this case.
As the court said in Nongard v. Burlington Co. Bridge Comm.

= 593
pe}

(supra): ‘‘ The New Jersey Supreme Court fashioned a com-
prehensive remedy to correct the wrong inherent in the entire
scheme and did not undertake to deal with it piecemeal.’’? The
test established in the Stockton case (supra) was therefore met.
Furthermore, many years after the Stockton case, in Milliken v.
Meyer (311 U. 8. 457), the Supreme Court decreed that where
the court of a sister State had jurisdiction of the parties and
the subject matter as it did in the present case, ‘‘ the full faith
and credit clause of the Constitution precludes any inquiry
into the merits of the cause of action, the logic or consistency
of the decision, or the validity of the legal principles on which
the judgment is based.’’ (311 U. S. 462.)

It is not necessary to go into the reasoning of the New Jersey
court, the logic or consistency of its reasoning, or the legal
principles upon which its decision was based. Thus, even if
there were legal error committed when the partnership of
Ketcham & Nongard was required to pay to the bridge com-
mission any moneys which that commission might pay to the
bank with which the bonds owned by the partnership had been
pledged, that is not a matter subject to review in this State.
It was open to the New Jersey Court to decide as it did under
the equitable cause of action.

The original complaint in the New Jersey action recited the
facts substantially as found by the courts of that State. The
specific relief sought by that complaint was rescission of the
entire transaction and the dissolution of the bridge commission.
Of those transactions the New Jersey Supreme Court wrote
that ‘‘ One cannot read the record in the instant case fairly
without being forced to the conclusion that the members of the
selling syndicate through the medium of their political influence
or professional prestige knowingly and intentionally for their
private profit and without regard to their obligations as citizens
induced the chosen freeholders and the bridge commissioners
to violate their public trust by blindly agreeing to the syndi-
cate’s proposal.”” (8 N. J. 479.) Accordingly, the New Jersey
court concluded that the transactions initiated by the defend-
ants-appellants herein might not be permitted to stand. Appel-
lants do not question that conclusion. Their primary argument
is that in decreeing the specific relief to be afforded under the
circumstances of this case the New Jersey court exceeded its

epee}
jurisdiction by awarding a form of relief different from that
prayed for in the complaint.

It is important to note that the premise underlying this argu-
ment is the constitutional requirement of due process of law.
In Standard Oil Co. v. Missouri (224 U. S. 270) the United
States Supreme Court considered a similar argument and con-
cluded that it had no merit, writing that ‘‘In civil suits the
pleadings should no doubt contain a prayer for judgment so
as to show that the judicial power of the court is invoked. The
rules of practice also may well require that the plaintiff should
indicate what remedy he seeks. But the Prayer does not con-
stitute a part of the notice guaranteed by the Constitution. The
facts stated fix the limit of the relief that can be granted. While
the judgment must not go beyond that to which the plaintiff
was entitled on proof of the allegations made, yet the court may
grant other and different relief than that for which he prayed.”
(224 U. 8. 285.)

In Milliken v. Meyer (311 U. S. 457, supra), the Supreme
Court of the United States reversed a decision of the Supreme
Court of Colorado which had in turn reversed a judgment of
the court of Wyoming upon the ground that the Wyoming
judgment was void because of an inconsistency between the
findings and the decree. That was held to be a violation of
the full faith and credit clause of the Federal Constitution,
which ‘‘ precludes any inquiry into the merits of the cause of
action, the logic or consistency of the decision, or the validity
of the legal principles on which the judgment is based.’ (311
U.S. 462.)

The judgment here sued upon in New York is a judgment
entered upon the decision of the Supreme Court of New Jersey.
Appellants do not contest the general equitable jurisdiction of
that court, nor do they contest that it had in personam juris-
diction over themselves. We shall not repeat here the findings
of misconduct made by the New Jersey court, but those findings
were unquestionably adequate to warrant a rescission, and this
the appellants do not contest. The Supreme Court of New
Jersey could, if the factual allegations were established, decree
such relief as the case warranted. The factual allegations con-
stitute the notice required by the Federal Constitution, and the
appellants have not shown that any other type of notice is

a 595
ee}

required in New Jersey. Those factual allegations presented
and defined the issues which the New Jersey court had jurisdic-
tion to decide; and any inconsistency which might exist—and
we think that there was none—between the factual issues as
decided and the relief granted by the decree is not a matter for
review in the courts of a sister State.

Appellants have also argued that the plaintiffs were not
entitled to ‘‘ money damages ’’ because of an alleged ‘‘ waiver ’’
of any claim to such damages. It appears, however, that the
only ‘‘ waiver’? of damages took place when the plaintiffs’
counsel stated that they would not pursue the cause of action
for damages set forth in the amended complaint in the New
Jersey action. He was not referring to such incidental relief
which the court might award as might require the defendants
to repay to the bridge commission moneys to which the court
might find that the defendants were not entitled. But that is
exactly what the court did in fact do: it required the defendants
to give up the profits that they had realized by their illegal
conduct. The court was not required by the due process clause
of the Federal Constitution to allow to the Ketcham and Non-
gard syndicate moneys or expenses which they had invested in
the enterprise from which the bridge commission derived no
benefit. Referring to this matter, the Supreme Court of New
Jersey decided ‘‘ This waiver was relied upon by the defendants
in determining what witnesses to call in their defense and
accordingly is binding on us as well as on the court below and
prevents any assessment of damages based on the amended
complaint against the selling syndicate. This waiver does not
preclude us, however, from requiring the members of the selling
syndicate over whom the court acquired jurisdiction to disgorge
the profits which they received from this illegal transaction.
Where rescission is prayed for and is warranted by the facts,
but cannot be decreed because of the intervening equities of
innocent third parties such as the bondholders here, under gen-
eral principles of equity the court may require the wrongdoers
to account for their profits so that as nearly as may be the
parties will be protected and equity done * * *? (8N. J.
499.) It is clear, therefore, that not only were the factual issues
before the New Jersey courts upon which the award of money
“damages ’’ incidental to the general equitable relief afforded

might be granted, but it is just as clear that those ‘‘ damages ”’
were merely the monetary profits which the defendants had
reaped from their illicit manipulation and which, therefore, they
were not entitled to retain.

The judgment appealed from should be modified by revers-
ing so much thereof as adjudged the partnership of Ketcham
& Nongard as such liable for $3,050,347, less certain deductions
and payments and plus interest, totaling $3,283,024.46, and, as
modified, affirmed, with costs.

Dusmonp, Frozssex, Van Voornis and Burks, JJ., concur
with Conway, Ch. J.; Dyz, J., taking no part.

Fuxo, J., dissents, in part, and votes to affirm in the following
memorandum: Since it is my opinion, as it was that of the
unanimous Appellate Division (286 App. Div. 220, 231), that
the New Jersey judgment for some $3,000,000 runs against the
partnership of Ketcham & Nongard, I am for affirmance of the
judgment entered below.

Judgment of Appellate Division modified in accordance with
the opinion herein and, as so modified, affirmed, with costs.
Es
Joun H. Nicwots et al., Appellants, v. Irem Pustisuzrs, Ineo.
Respondent.

Argued November 14, 1955; decided February 17, 1956.

598 |
ee

Melvel W. Snitow and Sydney Snitow for appellants. I. The
allegations of the complaint, which also states the publication
complained of, must be treated as established facts and defend-
ant, by making its motion, authorizes the court to accept its
statements as true. (Schwartz v. Heffernan, 304 N. Y. 474;
Tracy v. Kline & Son, 274 App. Div. 149.) IL. If either cause
of action is good, the complaint should not be dismissed.
(Advance Music Corp. v. American Tobacco Co., 296 N. Y.
79.) III. The statement by defendant in its publication to the
effect that plaintiff John N. Nichols was not the pastor of plain-
tiff church, when, in fact, he was, is libelous per se. (Neaton
v. Lewis Apparel Stores, 267 App. Div. 728; Matarazzo v. Daily
Gazette Co., 276 App. Div. 249, 302 N. Y. 552; Balabanoff v.
Hearst Cons. Publications, 294 N. Y. 351; Nih v. Bolman, 3807
N. Y. 725.) IV. The statements in defendant’s publication
certainly injured both plaintiffs in their highly specialized pro-
fession. (Sanderson v. Caldwell, 45 N. Y. 398; Shakun v.
Sadinoff, 272 App. Div. 721; Rager v. McCloskey, 305 N. Y. 75;
Cassidy v. Gannett Co., 173 Misc. 634; Smith v. Buffalo Times,
124 Mise. 495, 214 App. Div. 759; Mencher v. Chesley, 297 N. Y.
94.) V. The publication of defendant being false for the pur-
poses of this motion and being directed to the highly specialized
profession of plaintiffs, the final determination of the effect of
that publication is up to a jury and not up to the court. (Cyran
v. Finlay Straus, Inc., 302 N. Y. 486; Katapodis v. Brooklyn
Spectator, 287 N. Y. 17.)

Joseph Reeback and Richard Brill for respondent. I. The
publication does not charge that plaintiff Nichols falsely held
himself out as the pastor of the church. II. The publication
is not defamatory of plaintiff Nichols. (Reporters’ Assn. v.
Sun Print. & Pub. Assn., 186 N. Y. 437; Al Raschid v. News
Syndicate Co., 265 N. Y. 1; Rossiter v. New York Press Co.,
141 App. Div. 339; O’Connell v. Press Pub. Co., 214 N. Y.
352; McNamara v. Goldan, 194 N. Y. 315; Crashley v. Press
Pub. Co., 179 N. Y. 27; Peeples v. State of New York,
179 Misc. 272; Potter v. New York Evening Journal Pub. Co.,
68 App. Div. 95; Remsen v. Bryant, 36 App. Div. 240; Quinn
v. Sun Print. @ Pub. Assn., 55 Mise. 572, 125 App. Div. 900;
Curtis v. Argus Co., 171 App. Div. 105.) III. There is no

ee 599

ambiguity or uncertainty in the meaning of the publication and
the question whether or not it is defamatory is, therefore, for
the court. (Sanderson v. Caldwell, 45 N. Y. 398; Morrison v.
Smith, 177 N. Y. 366; Mencher v. Chesley, 297 N. Y. 94; Bala-
banoff v. Hearst Cons. Publications, 294 N. Y. 351.) IV. The
extrinsic facts pleaded by plaintiff Nichols do not avail him,
for they do not establish any libel of him and are not accom-
panied by a plea of special damages. (O’Connell v. Press Pub.
Co., 214 N. Y. 352; McNamara v. Goldan, 194 N. Y. 315; Crashley
v. Press Pub. Co., 179 N. Y. 27; Brodek v. Jones, 212 App. Div.
247.) V. The publication is not libelous per se of plaintiff
church and the second cause of action is, therefore, insufficient
for failure to plead special damages. (Demuth v. Griffin, 253
App. Div. 399; Thibaudeau v. City of Niagara Falls, 287 App.
Div. 424; Walker Memorial Baptist Church v. Saunders, 285
N. Y. 462.) VI. Certain allegations of the complaint should
be stricken out in any event as irrelevant, unnecessary and
prejudicial. (Fiorello v. New York Prot. Episcopal City Mis-
sion Soc., 217 App. Div. 510.)

Four, J. This appeal is concerned with the sufficiency of the
complaint in a suit for libel. It alleges two causes of action,
one on behalf. of the Reverend John H. Nichols, assertedly
pastor of the Mt. Zion Baptist Church of Port Chester, and a
second on behalf of the church itself. Plaintiffs claim that both
were defamed by a news item which appeared in the Daily
Item, a Port Chester newspaper owned and operated by defend-
ant. The article purported to report the outcome of certain
court actions brought by Reverend Nichols, the church and
another person ‘‘ against 22 members of the congregation ’’.
It mentioned, among other things, the jury’s ‘‘ dismissal’? of
“an action for $50,000 brought by the church corporation
against the congregation, in which the church claimed it was
prevented from holding services ’’, and of one brought by Rev-
erend Nichols ‘‘ claiming conspiracy to force him out as pas-
tor’. The article, referring to him as the ‘‘ former pastor,’
states that, ‘‘In finding for the defendants, the jury also
declared the Rev. Mr. Nichols was not pastor of the church’?
and: that he ‘‘ was removed as pastor of the Church by the
congregation in 1947. On Jan. 25, 1949, after a 36-day trial,

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Judge George H. Taylor, Jr., found the removal proper, Mr.
Young explained. It was alleged that supporters of the Rev.
Mr. Nichols held a meeting in March, 1949, in which they recalled
him as pastor ‘ for life.’ But the jury decided there had been no
legal meeting, and that thus the pastor had not been recalled”?
(italics appear in complaint).

The complaint further recites that the article is false and
defamatory in that the individual plaintiff is, and has been at
all the times mentioned, the pastor of the church, and a copy of
the minutes of the jury’s verdict is annexed to demonstrate that
it made no finding that he was not pastor or that the 1949 meet-
ing which recalled him was not ‘‘ legal.’’? The statement that the
action was against ‘‘ 22 members of the congregation ”’ is also
labeled false and defamatory, since the 22 defendants ‘‘ were
not members of the congregation because they had failed to
regularly worship and regularly contribute to the said church ’’.

No special damages are alleged, it being claimed that the
publication injured Nichols in his capacity as pastor, causing
‘* great damage to his good name, reputation and professional
standing as a pastor and preacher in the community’. As to
the church, the complaint asserts that it was injured in its good
name and reputation because the article ‘‘ took sides ’’ with the
22 defendants and ‘‘ had an unwholesome effect on the minds of
its readers,’’ causing the church “ to lose face in the eyes of its
congregants with resulting loss in membership, worshippers and
income ’’. Each of the plaintiffs demands a judgment for $10,000
against defendant.

Defendant moved to dismiss the complaint for insufficiency.
The court at Special Term denied the motion, but the Appellate
Division reversed and granted dismissal upon the ground that
it ‘‘ fails to allege words that are actionable per se, and no
special damages are pleaded.’? Whether that decision was
correct is the only question before us. .

The general rule, we stated in Mencher v. Chesley (297 N. Y.
94, 100), is that ‘‘ A writing is defamatory — that is, actionable
without allegation or proof of special damage —if it tends to
expose a person to hatred, contempt or aversion, or to induce
an evil or unsavory opinion of him in the minds of a substantial
number of the community, even though it may impute no moral

ee 601

turpitude to him.’? And to that listing of the defamatory should
be added a writing which tends to disparage a person in the way
of his office, profession or trade. (See, e.g., Nih v. Bolman, 307
N. Y. 725; Rager v. McCloskey, 305 N. Y. 75, 79; Kleeberg v.
Sipser, 265 N. Y. 87; Sanderson v. Caldwell, 45 N. Y. 398, 405;
Potter v. New York Evening Journal Pub. Co., 68 App. Div. 95,
99.) The publisher of a libel may not, of course, escape liability
by veiling a calumny under artful or ambiguous phrases and, if
any common-sense construction of what was written justifies
or supports a defamatory meaning, it will be for the jury, not
the court on motion, to decide whether the writing was or was
not defamatory. (See Mencher v. Chesley, supra, 297 N. Y. 94,
102.) However, on the basis of any reasonable reading of the
publication before us, it is impossible to conclude that it says or
implies anything that could subject either of the plaintiffs to con-
tempt or aversion, induce any unsavory opinion of them or
reflect adversely upon plaintiff Nichols’ work or upon him as
pastor of the church or as cleric generally.

That the Reverend Nichols was, in fact, pastor, contrary to
the article’s report, only demonstrates its falsity, not its
defamatory character. Other than this, it declares only that
he was removed in 1947, and that a meeting in 1949 which
voted his recall was deemed illegal by a jury, so that, as a
result of a court decision, he is no longer pastor of the church.
Nothing in the article reflects in any way on his personal or
professional integrity or ability. It assigns no reason for his
removal or for the opposition to him by the 22 defendants, such
as incompetency, misconduct or any other behavior that could
be said to disparage him personally or in his profession as a
clergyman.

The mere fact of one’s removal from office carries no imputa-
tion of dishonesty or lack of professional capacity. (Cf.
Thompson v. Hamilton, 229 N. Y. 591; Rossiter v. New York
Press Co., 141 App. Div. 339, 344.) It is only when the
publication contains an insinuation that the dismissal was for
some misconduct that it becomes defamatory. (See Rossiter
v. New York Press Co., supra, 141 App. Div. 339, 344; Rams-
dell v. Pennsylvania R. R. Co., 79 N. J. L. 379.) The rule
is no different for a clergyman, exalted and sensitive though

602 De

his post may be. A charge against him, to be actionable, must
still ‘‘ be such as, if true, would tend to prove him unfit to
continue his calling’? (Potter v. New York Evening Journal
Pub. Co., supra, 68 App. Div. 95, 99), such as, for example,
that he used foul language in a courtroom (see Potter v. New
York Evening Journal Pub. Co., supra, 68 App. Div. 95) or
that he ‘‘ juggled ’”? moneys taken on the collection plate. (See
Curtis v. Argus Co., 171 App. Div. 105.) The suggestion that
the article may provoke ‘‘ Idle, unfounded and baseless rumors ”’
that plaintiff is ‘‘ anything from ‘ thief ’ to ‘ imposter ’’’ (opin-
ion of Conway, Ch. J., p. 603), resting as it does entirely on
sheer speculation, furnishes no basis for holding the writing
defamatory.

Nor does the church stand in any better position, with refer-
ence to the sufficiency of the complaint, than does the individual
plaintiff. The only mention of the church itself is the report
‘that its claim against the 22 defendants for preventing it from
holding services was dismissed. At its worst, the article con-
veys to the reader that there is a controversy over control of
the church, with 22 insurgent members—or ex-members —
challenging, particularly, Reverend Nichols’ claim to the
pastorate.

The language is unambiguous. Under no reasonable con-
struction may it be read or regarded as defamatory of either
of the plaintiffs. And, quite apart from other considerations,
since no ‘‘ actual temporal damage ”’ is alleged, the complaint
may not be upheld on any prima facie tort or intentional false-
hood theory. (Rager v. McCloskey, supra, 805 N. Y. 75, 80-81.)
Accordingly, the complaint was properly dismissed by the
Appellate Division.

The judgment appealed from should be affirmed, with costs.

Conway, Ch. J. (dissenting). We are in agreement with the
principles of law stated in the opinion of the majority of this
court. Our disagreement lies with the application of those
principles to the allegations of the complaint before us. The
majority is of the opinion that ‘“‘ it is impossible to conclude
that it [the publication here involved] says or implies anything
that could subject cither of the plaintiffs to contempt or aver-
sion, induce any unsavory opinion of them or reflect adversely

| 603
re

upon plaintiff Nichols’ work or upon him as pastor of the church
or as cleric generally.” We are of the opinion, on the other
hand, that, in view of the peculiarly sensitive position of a
clergyman, it may not be said, as a matter of law, that the pub-
lication was nondefamatory, that is, in our judgment it would
not be unreasonable for a jury to conclude that the publication,
which suggests that plaintiff minister was officiating as a clergy-
man without the right to do so, and had not been recalled under
the proper procedure of his denomination, tends to expose him
to contempt or aversion in the minds of a substantial number
of the community and tends to hold him up as one to be avoided
and looked upon askance. We recently had before us Katapodis
vy. Brooklyn Spectator (287 N. Y. 17) where no special damages
were alleged, but where an article was published by defendant’s
newspaper regarding the death of plaintiffs’ infant son which
said of the parents that they ‘‘ are in dire financial straits ”’
and they would have ‘‘ to let their son go to his final rest in
a pauper’s grave’’. We there said (p. 21): ‘‘ We think it is
not for us to say that the publication of such a piece of news
did not hurt the plaintiffs by tending to deprive them of friendly
association with a considerable number of respectable members
of their community. We believe it is the right of the plaintiffs
to have a jury say whether the false words did, in fact, so
defame them.’’ Similarly, we feel here that it should at least
be left to a jury to determine whether the written words alleged
in the complaint are, when viewed in their entirety, susceptible
of a defamatory or innocent meaning.

We do not agree with the majority that Reverend Nichols could
not be said to have been disparaged personally or in his pro-
fession as a clergyman merely because the article assigns no
reason for his removal or for the opposition to him, such as
incompetency or misconduct. An article may be all the more
vicious by what it fails to say rather than by what it does say.
The readers of the article are thus given freedom to speculate
and guess as to why the Reverend Nichols had the difficulties he
had as pastor. Idle, unfounded and baseless rumors and gossip
may flourish and may multiply to such enormous proportions
that the Reverend Nichols will be accused of anything from
“ thief ’’ to ‘‘ imposter ’’. We think that the Special Term Judge

604 Le
ce

put the question presented in proper focus when he said: ‘‘ To
say falsely and maliciously of a minister of a church, holding
himself out as such to the community that he was not in fact, the
minister and that a jury had so found and that his congrega-
tion had not ‘ recalled’ him cannot be held as matter of law,
in my opinion, not to diminish him and do him hurt in his pro-
fession. It would, at least, present a question of fact in such
respect for a jury. * * * There is also a moral stigma
attachable to a minister of religion who falsely holds himself
out as being something which he is not or at least a jury might
so find.’”? So in the present case, the article, among other
things, falsely stated that a jury found that he was not in fact
the pastor of the church and that his congregation had not
recalled him. To some readers, this may not necessarily be
suggestive of dishonesty, incompetency or other improper con-
duct on the part of Reverend Nichols. To others, however, espe-
cially in view of the fact that he does belong to an extremely
sensitive profession which is always subject to the public
scrutiny, many evil and unfounded thoughts may be harbored
and many rash conclusions will be drawn. Accordingly, we
say again that, in our opinion, the article cannot be deemed
nondefamatory as a matter of law, but that a jury should be
permitted ‘to decide whether the article can reasonably permit
of a defamatory or innocent inference to the readers in the
community.

‘We pass on now to consider the second cause of action.
Here, the Mt. Zion Baptist Church of Port Chester alleged that,
because of the article, it had suffered injury. To refer to the
‘« 22 members of the congregation ’’ against whom suit had been
brought by Reverend Nichols and by the church itself, could con-
ceivably be deemed defamatory in view of the fact that they
were not in fact members of such congregation, and it could
reasonably tend to hold up the church to obloquy, ridicule and
scorn. A jury could properly find that the import of the entire
article generally, with respect to the church, had an unwhole-
some effect on the minds of the readers in the community, a
great many of whom were congregants of the church. Further,
because the words set forth in the publication which referred
to the Reverend Nichols as the former pastor of the church were
so interwoven with the words which were referable to the

Le 605

church itself, we feel, for the same reasons set forth above,
that, with respect to the church’s cause of action, a jury should
be permitted to decide whether the publication can reasonably
permit of a defamatory or innocent meaning.

Accordingly, in our judgment, the complaint was improperly
dismissed by the Appellate Division and the judgment appealed
from should be reversed and the motion to dismiss the com-
plaint denied.

Desmonp, Van Vooruis and Burge, JJ., concur with Fux, J.;
Conway, Ch. J., dissents in an opinion in which Frozsszt, J.,
concurs; Dyz, J., taking no part.

Judgment affirmed.

In the Matter of the Accounting of Epwarp C. Rarrery et al.,
as Surviving Executors and Trustees under the Will of
Maurice A. Suma, Deceased, Respondents. Marcarer L.
Suna et al., Appellants; O’Brmn, Drisconn & Rarrury et al.,
Respondents.

Argued January 3, 1956; decided February 17, 1956.

In the Matter of the Arbitration between Epmunp C. Grarnerr,
Respondent, and Suza Ewrerprisss, Ivo., et al., Appellants.

Argued November 30, 1955; decided February 17, 1956.

608 Le
ees}

F. Walter Bliss and Lawrence R. Condon for appellants in
the above-entitled accounting proceeding. I. Summary dismissal
of objections to the trustees’ account for the period 1940-1949
was erroneous. (Green v. Doniger, 300 N. Y. 238; Hoffman
House v. Foote, 172 N. Y. 348; Rudd v. Cornell, 171 N. Y. 114;
Garrett v. First Nat. Bank & Trust Co. of Vicksburg, 153 F.
2d 289; Leonard v. Pierce, 182 N. Y. 431; Collins v. Hydorn,
185 N. ¥. 320; Matter of Hubbell, 302 N. Y. 246; Matter of
Seaman, 275 App. Div. 484, 300 N. Y. 756; Joseph v. Herzig,
198 N. Y¥. 456; Matter of Adler, 164 Misc. 544.) II. Certain of
appellants’ objections to the accounting, covering the period
after September 19, 1949, should have been sustained. (Matter
of Auditore, 249 N. Y. 335; Matter of Hoyt, 160 N. Y. 607;
Bowditch v. Ayrault, 188 N. Y. 222; Matter of People [Bond
& Mige. Guar. Co.], 303 N. Y. 423; City Bank Farmers Trust
Co. v. Cannon, 291 N. Y. 125; Opera on Tour v. Weber, 285 N. Y.
348; Murray v. Brancato, 290 N. Y. 52.) III. The award of
commissions was erroneous if appellants cannot question the
trustees’ account. (Matter of Schliemann, 259 N. Y. 497; Hall
y. Hall, 78 N. Y. 585; Matter of Piel, 259 App. Div. 1047, 284
N. Y. 669.) IV. Raftery and Grainger were paid in full all
executors’ commissions and no double commissions are pay-
able here. (Cook v. Stockwell, 206 N. Y. 481; Olcott v. Baldwin,
190 N. Y. 99; Matter of Hayden, 172 Misc. 669.) V. The value
of the Shea stock was not fixed in accordance with well-estab-
lished law. (Matter of Roney, 148 Misc. 70; Matter of Reck-
ford, 181 Misc. 211; Matter of Fulton, 257 N. Y. 487; People
ex rel. Knickerbocker Fire Ins. Co. v. Coleman, 107 N. Y. 541;
Matter of Silverman [Hoe & Co.}, 282 App. Div. 252; Matter
of Foster, 239 App. Div. 806, 263 N. Y. 639.) VI. The courts
below erred in awarding any counsel fees. (Matter of O’Brien,
146 Misc. 555; Matter of Eddy, 207 App. Div. 162; Matter of
Owen, 144 Misc. 688; Matter of De Beiwedon, 262 N. Y. 168;
Matter of Reibold, 278 App. Div. 1013; Matter of Weiler, 281
App. Div. 703; Dykman v. City of New York, 183 App. Div.
859.) VII. Appellants were deprived of their constitutional
right to trial by jury on the hearing of fee applications. (Matter
of Matheson, 265 N. Y. 81; Matter of Rosenberg, 157 Misc. 490;
Matter of Proctor, 267 N. Y. 109; Matter of McKevett, 253

Le 609

App. Div. 919; Matter of Anderson, 136 Misc. 110; Matter of
Pardee, 239 App. Div. 876.)

Arthur F. Driscoll and John Drew for Edward C. Raftery
and others, respondents in the above-entitled accounting pro-
ceeding. I. The Surrogate did not err in refusing to retry
objections involving happenings that antedated the terminal
date of the intermediate account. Identical proposed objections
had been heard in detail by the Referee, passed upon after
careful study by the Surrogate, included in the appeal to the
Appellate Division and urged on this court in support of a
motion for leave to appeal. (Tobias v. Ketchum, 32 N. Y. 319;
Ward v. Ward, 105 N. Y. 68; Matter of Hopson, 218 App. Div.
395; Matter of Kohler, 231 N. Y. 353; Mee v. Gordon, 187 N. Y.
400; Matter of Edwards, 279 App. Div. 841; Susquehanna Silk
Mills v. Rebora, 238 App. Div. 100, 263 N. Y. 539; People v.
Continental Cas. Co., 801 N. Y. 79; Kane v. Walsh, 295 N. Y.
198; Brooklyn Public Lib. v. City of New York, 222 App. Div.
422.) IL. All of the contentions under appellants’ point II have
to do with matters that were presented in detail before the
Surrogate. JIT. The Surrogate would have been in error if
he had refused to award commissions to the estate representa-
tives. (Matter of Kohler, 231 N. Y. 853; Orton v. Tannenbaum,
194 App. Div. 214; Matter of Mills, 172 App. Div. 530; Gilkinson
v. Third Ave. R. R. Co., 47 App. Div. 472; Mee v. Gordon, 187
N. Y¥. 400; Tobias v. Ketchum, 32 N. Y. 319; Ward v. Ward,
105 N. Y. 68; Matter of Hopson, 218 App. Div. 395; Matter of
Schliemann, 259 N. Y. 497.) IV. The Surrogate found as a fact
that the value of the stock constituting the corpus was $3,000,000.
There was ample evidence to support that finding. (Matter of
Fulton, 257 N. Y. 487; Matter of Silverman [Hoe & Co.], 282
App. Div. 252.) V. Counsel for the estate representatives were
entitled to compensation and the awards made by the Surrogate
were modest when compared to the great amount of time and
effort necessarily devoted to the matter. (Matter of Young,
156 Mise. 801; Jessup v. Smith, 223 N. Y. 203; Matter of Gilman,
251 N. Y. 265; Matter of Proctor, 267 N. Y. 109; Matter of
Bloomingdale, 172 Misc. 218; Matter of Mioducki, 257 App.
Div. 909; Matter of Rosenberg, 218 App. Div. 167; Dykman v.
New York, 183 App. Div. 859.) VI. Appellants were not entitled

a

610 [|
en

to a jury trial in the fixing of counsel fees. (Matter of Boyle,
242 N. Y. 342; Matter of Stark, 118 Misc. 240; Matter of Beare,
122 Mise. 519, 214 App. Div. 723; Matter of Leary, 175 Mise.
254; Matter of Britton, 187 Misc. 70; Matter of Pardee, 145
Mise. 634.)

Thomas K. O’Brien and Arthur E. Sullivan for Edmund C.
Grainger and others, respondents in the above-entitled account-
ing proceeding. I. The Surrogate properly dismissed the
objections to the trustees’ account covering the period from 1940
to 1949. (Matter of Shea, 282 App. Div. 1013; Schuylkill Fuel
Corp. v. Nieberg Realty Corp., 250 N. Y. 304; Smith v. Kirk-
patrick, 305 N. Y. 66; Karameros v. Luther, 279 N. Y. 87.)
II. The Surrogate properly dismissed appellants’ objections to
the fiduciaries’ final accounting for the period subsequent to
September 19, 1949, the terminal date of the intermediate
account. III. Accountants Raftery and Grainger are entitled
to fiduciary paying out commissions. IV. The value of 2,400
shares of Shea Enterprises, Inc., was properly fixed by the
Surrogate at $3,000,000. V. Counsel fees were properly awarded
to the counsel for respondents. (Matter of Britton, 187 Mise.
70; Corn Exch. Bank Trust Co. v. Bankers Trust Co., 268 N. Y.
224; Matter of Maxwell, 218 N. Y. 88; Ellis v. Kelsey, 241
N. Y. 374; Jessup v. Smith, 223 N. Y. 203; Schoenherr v. Van
Meter, 215 N. Y. 548; Woodruff v. New York, Lake Erie &
Western R. R. Co., 129 N. Y. 27; Downing v. Marshall, 37 N.Y.
380; Matter of Ungrich, 201 N. Y. 415; Matter of Van Volken-
burgh, 139 Mise. 437.)

F. Walter Bliss and Lawrence R. Condon for appellants in
the above-entitled arbitration proceeding. I. There is no valid
contract between these parties as the 1942 and 1946 alleged
agreements are unenforcible. (Matter of Level Export Corp.
[Wole, Aiken & Co.], 305 N. Y. 82; Matter of Kramer & Uchi-
telle, 288 N. Y. 467; Matter of Albrecht Chem. Co. [Anderson
Trading Corp.], 298 N. Y. 437; Matter of Lipman [Haeuser
Shellac Co.], 289 N. Y. 76; Matter of Hesslein & Co. v. Green-
field, 281 N. ¥. 26; Matter of Metro Plan v. Miscione, 257 App.
Div. 652; Matter of Manufacturers Chem Co. (Caswell, Strauss
& Co.], 259 App. Div. 321; Matter of Cheney Bros. [Joroco

a 611

Dresses], 218 App. Div. 652; Ross v. Ross, 233 App. Div. 626,
262 N. Y. 381; Presbyterian Church of Albany v. Cooper, 112
N. Y. 517.) IL. The determination of the Surrogate as to the
validity of the 1942.and 1946 contracts is not binding upon
appellants. (Clark v. Scoville, 198 N. Y. 279; Bell v. Merrifield,
109 N. Y. 202; Stowell v. Chamberlain, 60 N. Y. 272; Matter of
Green, 231 N. Y. 237; Elenkrieg v. Siebrecht, 288 N. Y. 254;
Louis J. Sigl, Inc., v. Bresnahan, 216 App. Div. 634; Green v.
Victor Talking Mach. Co., 24 ¥. 2d 378; Haverhill v. Inter-
national Ry. Co., 217 App. Div. 521, 244 N. Y. 582; St. John v.
Fowler, 229 N. Y. 270; Rudd v. Cornell, 171 N. Y. 114.)
III. Even though the 1946 contract is valid, respondent’s claims
are outside the scope of the arbitration provision therein.
(Matter of Riverdale Fabrics Corp. [Tillinghast-Stiles Co.],
306 N. Y. 288; Matter of Lehman v. Ostrovsky, 264 N. Y. 130;
Matter of Kelley, 240 N. Y. 74; Matter of Philip Export Corp.
[Leathertone, Inc.], 275 App. Div. 102; Doheny v. Lacy, 168
N. Y. 213; Cowee v. Cornell, 75 N. Y. 91.) IV. Assuming the
validity of the 1942 and 1946 agreements and the applicability
of the 1936 arbitration clause, respondent’s claims are not
arbitrable as they are not bona fide. (Matter of Essenson
[Upper Queens Med. Group], 307 N. Y. 68; Matter of Interna-
tional Assn. of Machinists [Cutler-Hammer], 271 App. Div. 917,
297 N. Y. 519; Matter of General Elec. Co. [United Elec. Radio
& Mach. Workers of America, C. I. 0.], 300 N. Y. 262; Matter
of Crosett [Mount Vernon Housing Auth.], 275 App. Div. 1051;
Matter of Graphite Metallizing Corp. [United Elec. Radio &
Mach. Workers of America, C. I. 0.], 271 App. Div. 839; Alpert
v. Admiration Knitwear Co., 304 N. Y. 1; Matter of Wenger v.
Propper Silk Hosiery Mills, 239 N. Y. 199; Gearns v. Com-
mercial Cable Co., 293 N. Y. 105; Hodkinson v. Haecher, 248
N. ¥. 480; Corr v. Hoffman, 256 N. Y. 254.) V. All appellants’
cross claims against respondent should be allowed to be proven.
VI. Appellants’ cross claims allowed by the Appellate Division
are not limited by the statute of limitations. (General Fire-
proofing Co. v. Keepsdry Constr. Co., 225 N. Y. 180; Wilson v.
Mechamical Orguinette Co., 170 N. Y. 542; Emmerich v. City
Bank Farmers Trust Co., 300 N. Y. 417; Nasaba Corp. v. Har-
fred Realty Corp., 287 N. Y. 290; Brundige v. Bradley, 294 N. Y.

612 a
rane)

845; Title Guar. & Trust Co. v. Hicks, 283 App. Div. 723; Kelly
Asphalt Block Co. v. Brooklyn Alcatraz Asphalt Co., 190 App.
Div. 750, 232 N. Y¥. 304; Deeves & Son v. Manhattan Life Ins.
Co., 195 N. Y¥. 824; National Cash Register Co. v. Joseph, 299
N. Y. 200.)

Thomas K. O’Brien and Arthur E. Sullivan for respondent
in the above-entitled arbitration proceeding. I. A valid con-
tract requiring arbitration exists between respondent and
appellant corporations. (Rudd v. Cornell, 171 N. Y. 114; Matter
of Compagnie Francaise des Petroles [Pantepec Oil Co., C. A.],
279 App. Div. 851, 305 N. Y. 588.) II. The decree of the Surro-
gate of Bronx County determining the validity of said contracts
of 1942 and 1946 is binding on appellants who requested such
determination and appellants are estopped from relitigating
said issues. (Rapid Tr. Subway Constr. Co. v. City of New
York, 259 N. Y. 472; Blaustein v. Pan Amer. Petroleum & Trans-
port Corp., 293 N. Y. 281; Isaac v. Marcus, 258 N. Y. 257;
McNamara v. Powell, 256 App. Div. 554.) III. Respondent’s
claims against appellant corporations are substantial and meri-
torious. IV. Appellants’ cross claims are subject to the six-
year statute of limitations and cross claim No. 6 is an invention
of appellants’ advocate. (Matter of Shea, 282 App. Div. 1013.)

Fuuo, J. Although these two appeals were argued at different
times, we believe that clarity is promoted by treating them both
in one opinion. They revolve about an extended controversy
between the heirs of the estate of Maurice A. Shea and the
executors and trustees of that estate, Edmund C. Grainger and
Edward C. Raftery. In Matter of Shea, the heirs appeal from
the Appellate Division’s affirmance of a decree of the Surrogate
of Bronx County judicially settling the final account of the
executors and trustees. Matter of Grainger (Shea Enterprises)
is an appeal by two corporations, wholly owned by the estate,
from an order granting an application brought by Grainger to
compel arbitration of certain disputes which have arisen between
him and the corporations; a cross claim asserted by the cor-
porations against Grainger is also involved.

M. A. Shea was the owner of a large chain of motion pic-
ture theatres in the eastern United States. He conducted the

Ln 613
bss

business through Shea Enterprises, Inc., a wholly owned cor-
poration, and various subsidiary corporations. In 1936, Shea
entered into a contract with Edmund ‘Grainger, a man of high
repute and considerable experience in the theatre management
field, employing him as general manager of all the theatres. The
agreement, calling for the payment to Grainger of a weekly
salary and a bonus, specifically recited that, ‘‘ if any dispute of
any kind or character arises between the parties as to any matter
contained in this agreement, then such dispute shall be referred
to arbitration ’’. Originally to terminate in 1946, the contract
was extended, by a 1939 agreement, to run until December 31,
1951.

In 1940, M. A. Shea died. The will named his widow, his chil-
dren and a son-in-law (coincidentally, also a Shea, named
Gerald) as sole beneficiaries of his estate. It provided for a ten-
year testamentary trust; during the existence of the trust, the
income from the business was to be paid to the beneficiaries, and,
on its termination, the ownership of the corporations was to be
turned over to them. Grainger, Edward C. Raftery and one
Dennis F, O’Brien (since deceased), all close friends of Shea,
were named as executors and trustees. Pursuant to the dece-
dent’s wishes as expressed in the will, they elected themselves
directors of the various corporations, and Grainger was made
president of Shea Enterprises. In addition, as indicated,
Grainger was employed as general manager of the business,
and his voice was the leading one in guiding its affairs.

In 1942, as the result of a corporate reorganization effected to
achieve certain tax benefits, control of the corporations was
shifted from Shea Enterprises to Jamestown Amusement Cor-
poration and, as part of the operation, Enterprises transferred
and assigned to Jamestown all its right, title and interest in the
1936 employment contract, as amended in 1939, between Grainger
and M. A. Shea. In June, 1946, a fourth contract was made,
between Grainger and both corporations, extending his employ-
ment as general manager from December 31, 1951, to December
31, 1956, and stipulating that ‘‘ Except as expressly provided
by this agreement the previous agreements shall remain in full
force and effect.’’? The 1946 contract was expressly approved
and ratified in writing by all the Shea heirs except William Shea,
an incompetent.

The business prospered. In the ten-year period covered by the
trust, from 1940 to 1950, its net worth rose from about $1,000,000
to over $3,000,000, and dividends of $1,200,000 were paid to the
Shea, beneficiaries.

In 1949, Grainger and Raftery, the surviving executor-
trustees, filed their intermediate account, covering the period
from decedent’s death to September, 1949. The beneficiaries
made no objections to the account, and it was judicially settled
by the Surrogate as filed.

As the term of the trust drew to a close, a difference of opinion
arose between Grainger and Gerald Shea, as spokesman for the
heirs, concerning the proper method of computing the former’s
bonus under his employment contracts. In December, 1951,
Grainger requested that the matter be submitted to arbitration.
The response of the heirs was immediate and dramatic. They
discharged him as general manager of the business and insti-
tuted a proceeding in the Surrogate’s Court in which they
charged him and his fellow executor and trustee with fraud and
misconduct and sought to have their previously approved inter-
mediate account vacated. They also requested the Surrogate to
declare fraudulent and void the 1942 and 1946 contracts adopt-
ing and extending Grainger’s employment as general manager
until 1956. Since Grainger’s right to arbitrate depended upon
the validity of these contracts, the corporations, opposing arbi-
tration, procured a stay of the Supreme Court proceeding to
compel arbitration, pending the Surrogate’s determination of
that issue.

The Surrogate referred the vacatur proceeding to a Referee
to hear and report. After 68 days of hearings, in which a
18-volume record was compiled, the Referee dismissed all of the
heirs’ objections and sustained the validity of the Grainger
employment contracts. He found the administration of the
estate and the business to be “‘ without a trace of fraud or con-
structive fraud by the executors. Rather it is one marked by
care and prudence and crowned with exceptional success.’? The
Surrogate confirmed the Referee’s report in all respects, the
Appellate Division unanimously affirmed (282 App. Div. 1013),
aud this court dismissed a motion for leave to appeal on the
ground that the order involved was nonfinal (307 N. Y. 676).

| 615
reese!

After the vacatur proceeding had thus come to an end,
Grainger reopened the Supreme Court proceeding against the
corporations to compel arbitration. He sought arbitration con-
cerning not only the computation of his bonus but also the
propriety of his discharge. The corporations, in continued oppo-
sition to the application, sought to relitigate the question of
validity of the employment contracts, contending that the decree
of the Surrogate against the heirs as individuals was not binding
on their wholly owned corporations. The court at Special Term
held that the doctrine of res judicata applied to estop them from
retrying that issue and ordered that arbitration proceed; as
indicated, the Appellate Division affirmed and the corporations’
appeal from that decision is one of the cases before us.

In the meantime, in January, 1952, Grainger and Raftery had
filed their final account. Appellants again objected, charging
numerous acts of misconduct and self-dealing, many identical
with those charged in the vacatur proceeding. The Surrogate
dismissed all the objections — finding it ‘‘ regrettable ”? that the
Shea heirs had ‘‘ been led to make such unwarranted and
unjustified accusations against these executors and trustees ’? —
and settled the final account as filed. The appeal of the heirs
from the Appellate Division’s affirmance of that decree is the
other case before us.

As to that appeal, little is to be gained by detailed treatment of
each of the accusations of fraud and misconduct leveled at
respondents Grainger and Raftery. It is enough to say that, as
to the objections relating to transactions occurring before
September, 1949, they were thoroughly litigated in the vacatur
proceeding and decided against the heirs and that, as to the other
objections, the record furnishes ample support for the findings
made by the Surrogate, and affirmed by the Appellate Division,
that the charges were unwarranted and unjustified. The addi-
tional contentions — among them, that the Surrogate erroneously
sanctioned ‘‘ paying out ’? commissions to Grainger and Raftery
and impermissibly awarded counsel fees to their attorneys —
have also been considered and found to be not tenable.

The appeal in the proceeding to compel arbitration requires
more extended discussion.

There can be no doubt that the employment contracts (the
issue of their validity aside) entitle respondent Grainger to

616 [|
ee}

arbitration of the disputes concerning the computation of his
bonus and his premature discharge. Paragraph 22 of the con-
tract of February, 1936, which remained ‘‘in full foree and
effect ’’ by reason of the June, 1946, agreement, requires arbi-
tration of ‘‘ any dispute of any kind or character ’’ that arises
between the parties ‘‘ as to any matter contained in ’’ the agree-
ment. The claims obviously come within these terms. The agree-
ments expressly describe the method for computing Grainger’s
bonus and provide that his term of employment shall run until
1956. The appellant corporations contend, however, that the
1942 and 1946 contracts, adopting and extending the previous
ones, are invalid, and that arbitration may not be directed until
the issue of their validity is tried and determined by the
Supreme Court. As to that, respondent maintains that a trial
of that issue has already been held and that appellants are
bound by the decree rendered against the Shea heirs in the
vacatur proceeding.

The general doctrine of res judicata gives binding effect to
the judgment of a court of competent jurisdiction and prevents
the parties to an action, and those in privity with them, from
subsequently relitigating any questions that were necessarily
decided therein. (See Matter of New York State Labor Rela-
tions Bd. v. Holland Laundry, 294 N. Y. 480, 493; Elder v. New
York & Pennsylvania Motor Express, 284 N. Y. 350; Good Health
Dairy Products Corp. v. Emery, 275 N. Y. 14, 17; Sears Roebuck
&Co.v. 9 Ave.-31 St. Corp., 274 N. Y. 388, 400.) ‘* ‘ Sound publie
policy’ ’’, this court has written, ‘‘‘ requires that different
judicial decisions shall not be made on the same state of facts,
and that a judgment rendered jurisdictionally and unimpeached
for fraud shall be conclusive, as to the questions litigated and
decided, upon the parties thereto and their privies, whom the
judgment, when used as evidence, relieves from the burden of
otherwise proving, and bars from disproving, the facts therein
determined.’ ’? (Matter of New York State Labor Relations Bd.
v. Holland Laundry, supra, 294 N. Y. 480, 493.)

In the case before us, it is indisputable that, if the appellant
corporations themselves, rather than the individuals who own
all of their stock, had been parties to the vacatur proceeding,
they would be bound by the Surrogate’s decree sustaining the

Le 617
a

validity of the employment contracts. The issue was fully and
completely litigated and was necessary to the decision; the
Surrogate actually denied the specific request of the heirs for
a declaration of invalidity. The only question presented, there-
fore, is whether appellant corporations are in privity with the
Shea heirs, who own all of their stock, so that the decision against
the heirs is binding upon the corporations. In our judgment,
the lower courts properly held that they are.

“« Privity ’’ is usually defined as ‘‘ mutual or successive rela-
tionships to the same rights of property.’? (Haverhill v. Inter-
national Ry. Co., 217 App. Div. 521, 522, affd. 244 N. Y. 582;
Titchfield v. Goodnow, 123 U. 8. 549, 551.) ‘The ground
* * * upon which persons standing in this relation to the
litigating party are bound by the proceedings to which he was
a party is, that they are identified with him in interest”.
(Litchfield v. Goodnow, supra, 123 U. 8. 549, 551.) A clearer
case for application of the doctrine could hardly be imagined
than one involving successive attempts to litigate the same
question by a corporation and by its owner or owners. Such
attempts have been barred on principles of res judicata or
collateral estoppel where all of the corporation’s stock was
owned by one person (see McNamara v. Powell, 256 App. Div. 554,
558; United States Envelope Co. v. Transo Paper Co., 221 F. 79,
80; ef. Warford Corp. v. Bryan Screw Mach. Products Co., 44 F.
2d 713); the owner, it has been said, ‘‘ will not be permitted to
use the corporate cloak as a means to avoid the finality of the
former adjudication to which he was a party.’? (McNamara v.
Powell, supra, 256 App. Div. 554, 558.) Manifestly, the situation
is no different where all of the stockholders of a family corpora-
tion, rather than an individual who owns the entire corporation,
have appeared and participated in the prior action which
resulted in an unfavorable adjudication.

The interests of the heirs in the Surrogate’s Court proceeding
and the appellant corporations in this case are identical. Both
have sought to invalidate the 1942 and 1946 contracts because of
alleged fraud and self-dealing by respondent and the other
executor-trustees with the properties of the Shea estate. It was
the heirs, the actual and benefical owners of appellants, who
alone stood to lose or gain by the outcome in each case; for all

618 [|
ees

practical purposes, the corporation was the heirs, the heirs, the
corporation. If there had been any doubt as to their being
represented, their position posited and their interests protected
in the Surrogate’s Court, the corporations would not have sought
to stay the Supreme Court proceeding in 1951 nor requested
that the issue of the contracts’ validity be determined in the
vacatur proceeding. By adopting that course of action, they
elected to have that question decided by the Surrogate rather
than the Supreme Court, and this circumstance alone is enough
to estop them from now attempting to avoid the binding force
of the Surrogate’s decree. There would have been no purpose in
deferring the Supreme Court hearing until the Surrogate had
decided the issue of validity, unless his finding was to be
decisive in both proceedings.

As earlier indicated, appellants made a cross motion, request-
ing the submission to the arbitrators of seven so-called cross
claims, in the event that arbitration was directed. The court
at Special Term ordered the submission of one of them, upon
respondent’s consent, and denied the other six; the Appellate
Division, however, modified, by directing the submission of five
of the six remaining cross claims. Appellants contend that the
Appellate Division should also have submitted the remaining
cross claim, that numbered (6) in their affidavit, which asserts
that ‘‘ Grainger is liable to Shea Enterprises, Inc. for a sum
approximating $100,000 in the matter of the caleulation of his
‘ponus,’’ because of corporate moneys ‘‘ which he expended, and
for which he allowed no return to the Shea companies.’’

There is no reason to treat this cross claim differently from
the others. Whether or no it has merit is not a matter for
the courts. Although the claim is described with less than
exemplary clarity or specificity, it directly relates to the com-
putation of respondent’s bonus and is, therefore, a dispute
arising under the employment contracts. Those contracts require
arbitration of ‘‘ any dispute of any kind or character * * *
as to any matter contained in’’ them. Under such a broad
clause, appellants are entitled to have any counterclaims or
setoffs that they may have against Grainger arising out of
the employment contracts submitted to the arbitrators. (Cf.
Matter of Stone [Freezer], 804. Y. 649, affg. 280 App. Div. 103;

a 619

Fudickar v. Guardian Mut. Life Ins. Co., 62 N. Y. 392, 403-404;
Matter of Priore [Schermerhorn], 204 App. Div. 332, affd. on
other grounds 237 N. Y. 16; see, also, Sturges on Commercial
Arbitrations and Awards [1930], § 75, p. 236.)

Appellants raise one further point. They contend that the
Appellate Division improperly directed the arbitrators to apply
the six-year statute of limitations to their cross claims, for the
reason that the application of the statute of limitations, like
other questions of law, is a matter that should be left exclusively
to the arbitrators. (Cf. Application of Reconstruction Finance
Corp., 106 F. Supp. 358 [S. D. N. Y.]; Sturges, op. cit., § 218,
p. 502.) It is not, however, necessary here to consider or pass
upon the question. The record reveals that appellants them-
selves insisted that the statute of limitations be applied to
measure and limit the claims asserted against them by respond-
ent Grainger, and the court at Special Term adopted their
position. In view of that, they may not be permitted to have
the arbitrators decide their own cross claims without regard
to that restriction. Whatever, therefore, may be the rule in
another case, even-handed justice and principles of common
fairness require that we uphold the Appellate Division in order-
ing that the cross claims also be measured by the statute of
limitations.

It follows that the Appellate Division order should be affirmed,
except insofar as it denied appellants’ request to submit the
sixth cross claim. However, in combining and rephrasing the
other two cross claims that concern the computation of bonus,
one of which covers a period solely from 1941 to 1945, the
Appellate Division submitted the latter claim and confined both
to that period (Third Deecretal Paragraph, item [c]).1 While
this may have been inadvertent, it does patently conflict with
that portion of the order limiting all of the cross claims to the
six-year statute of limitations, which would bar any claims
arising prior to 1948. Consequently, the Third Decretal Para-
graph must be modified to make it clear that the arbitrators may

1. This portion of the order reads as follows: “the arbitrators herein shall
consider and pass upon the matters and issues set forth below * * *:
(e) the computation of bonus paid to petitioner between the years 1941 and
1945, both inclusive, including but not limited to the participation by petitioner
in capital gains realized and his nonparticipation in capital losses sustained ”.

620 ee
msn)

consider all matters affecting the computation of the bonus,
including appellants’ sixth cross claim, subject only to the six-
year time limitation which, according to the Final Decretal
Paragraph, must govern all the cross claims.
In the proceeding in the Surrogate’s Court, the order of the
Appellate Division should be affirmed, with costs to all parties
appearing and filing briefs herein, payable out of the estate.
In the arbitration proceeding, the order of the Appellate
Division should be modified to substitute for item (c) in its Third
Decretal Paragraph the following:
“* (e) the computation of bonus paid to petitioner, including
but not limited to (1) the participation by petitioner in
capital gains realized and his nonparticipation in capital
losses sustained and (2) the expenditure by petitioner. of
corporate moneys without allowing any return to the
corporations,’

and, as so modified, affirmed, without costs.

In Matter of Shea: Conway, Ch. J., Dusmonp, FRozssen, Van
Vooruis and Burxs, JJ., concur ; Des, J., taking no part.

Order affirmed, with costs to all parties appearing separately
and filing separate briefs payable out of the estate.

In Matter of Grainger (Shea Enterprises): Conway, Ch. J.,
Dzsmonp, Frozsszt, Van Voornts and Burks, JJ., concur;
Dyz, J., taking no part.

Order of Appellate Division modified in accordance with the
opinion herein and, as so modified, affirmed, without costs.

Le
Marcarma Dz Cuara, as Administratrix of the Estate of

Frayoisco Dz Cuara, Deceased, Appellant, v. Barper Srzam-

sure Livzs, Inc., et al., Defendants, and New Yorx Doox

Company, Respondent, and Third-Party Plaintiff-Respondent.

Barser Sxzovritms Corporation, Third-Party Defendant-

Respondent.

Argued November 22, 1955; decided February 17, 1956.

622 ee
ag
ee

Thomas Grimes and Thomas C. Cusack for appellant.
I. Defendant was responsible for the dangerous condition of
Pier 38. (Murrain v. ‘on Line, 270 App. Div. 372, 296 N. Y.
845; Appel v. Muller, 262 N. Y. 278; Bernstein v. Olian, 77 F
Supp. 672; Abrams v. Manhattan Dial Mfg. Co., 190 Mise. 106;

ee 623

Noble v. Mara, 298 N. Y. 106; Dick v. Sunbright Steam Laundry
Corp., 807 N. Y. 422; Cullings v. Goete, 256 N. Y. 287; Lafredo
v. Bush Term. Co., 261 N. Y. 323; Potter v. New York, 0. 6 W.
Ry. Co., 261 N. Y. 489.) Il. There are no errors of law that
require a new trial. (Haefeli v. Woodrich Eng. Co., 255 N. Y.
442; Ford v. Grand Union Co., 268 N. Y. 243; Le Rous v. State
of New York, 307 N. Y. 397.) III. The only issue of fact undis-
posed of is the amount of the verdict. (Betzag v. Gulf Oi
Corp., 298 N. Y. 358, 301 N. Y. 576.)

John F. X. Finn, George A. Garvey, Lillian E. Cuff and
Constantine P. Lambos for respondent. I. The Appellate Divi-
sion properly dismissed the complaint. Plaintiff failed to prove
any actionable negligence on the part of defendant New York
Dock Company. II. Sole control of Pier 38 was in the tenant,
defendant sharing no part of such control with the tenant.
(Pratt, Hurst & Co. v. Tatler, 185 App. Div. 1; Eisen v.
Baudouine, 169 App. Div. 549, 184 App. Div. 883, 229 N. Y. 535;
Murrain v. Wilson Line, 270 App. Div. 372, 296 N. Y. 845;
Cullings v. Goetz, 256 N. Y. 287; Potter v. New York, 0. & W.
Ry. Co., 261 N. Y¥. 489; Lafredo v. Bush Term. Co., 261 N. Y.
323; Dick v. Sunbright Steam Laundry Co., 307 N. Y. 422;
Williams v. Saratoga Co. Agric. Soc., 277 App. Div. 742; Dickey
vy. Masonic Foundation Corp., 266 App. Div. 763.) II. Even
if defendant was under a duty to plaintiff’s intestate to repair
—which defendant asserts it was not—such duty was subject
to a condition precedent that defendant be given written notice
of the need for repairs, and no such notice was ever received
or sent. (Antonsen v. Bay Ridge Sav. Bank, 292 N. Y. 148;
Dick v. Sunbright Steam Laundry Corp., 307 N. Y. 422; McCar-
rick v. Liverpool Corp., [1947] A. C. 219; Fisher v. Walters,
[1926] 2 K. B. 315; Morgan v. Liverpool Corp., [1927] 2 K. B.
181; Torrens v. Walker, [1906] 2 Ch. 166; Griffin v. Pallet,
[1926] 1K. B. 17; Bottomley v. Bannister, [1932] 1 K. B. 458.)
IV. Since the widow and dependent son of plaintiff’s intestate
elected to take compensation and failed to commence a statutory
action against the third-party wrongdoer within the time limited
by section 29 of the Workmen’s Compensation Law, there
resulted an assignment of their cause of action, if any, for the
wrongful death of plaintiff’s intestate to the insurance carrier.

624, |

re
Hence they had no right to maintain this action and are not the
real parties in interest. (Olker v. Salomone, 283 App. Div. 948;
Skakandy v. State of New York, 274 App. Div. 153, 298 N. Y.
886; Hisenberg v. Adler Realty Co., 299 N. Y. 572; Z'aylor v.
New York Central R. R. Co., 294 N. Y. 397; United States
Fidelity & Guar. Co. v. Graham & Norton Co., 254 N. Y. 50;
Matter of Zirpola v. T. & E. Casselman, Inc., 237 N. Y. 367.)
V. Since the cause of action on the beneficial interest of the
widow and dependent son was assigned to the insurance carrier

’ which paid the compensation, and since there was no proof that
the adult children suffered any pecuniary loss or injury by
reason of the death of plaintiff’s intestate, the complaint should
have been dismissed. (Gross v. Abraham, 306 N. Y. 525; Holmes
v. City of New York, 269 App. Div. 95; Matter of Dennison,
203 Mise. 1004.) VI. The Appellate Division properly held that
it was error for the trial court to instruct the jury that con-
structive notice was sufficient against the owner and that the
owner might be held liable if it retained any measure of control
over the demised premises. VII. The Appellate Division prop-
erly held that the trial court erred in excluding defendant’s
evidence that it did not receive notice of the defect from the
lessee until after the accident, that it acted on the notice and
that the lessee paid for the expense of the repairs. The trial
court also erred in excluding other evidence on the question
of control. VIII. Hiven if the court should find that the com-
plaint should not have been dismissed, there are other issues
of fact which at the very least require a new trial.

Fup, J. Francisco De Clara, a stevedore, was killed on
Pier 38, Atlantic Basin, Brooklyn, New York, when a large metal
door fell upon him. The pier where the accident occurred was
owned by the New York Dock Company and leased to the
Barber Steamship Lines, Inc. De Clara was employed by the
Atlantic Stevedoring Company, an independent contractor
engaged by Barber to load and unload its vessels.

In addition to his wife, De Clara left eight children, one of
whom was a minor. The Workmen’s Compensation Board
made an award of death benefits to the widow and her infant
son. Ten months later, having in the meantime been appointed
administratrix of her husband’s estate, she brought this action

ee 625
ee

to recover damages for his wrongful death. Although plaintiff
joined as defendants both the owner of the pier and its tenant,
Barber, service of process was vacated and set aside as against
the latter, for reasons not here material (277 App. Div. 1118),
and that defendant is no longer in the case. The remaining
defendant, the dock company, disclaims liability on the ground
that it had parted with possession and control of the pier, and, in
addition, disputes plaintiff’s standing to maintain the action.

Pier 38, where the accident occurred, was about 950 feet long,
with large sliding doors — 85 of them— along each side. Each
door was 23 feet high and 10 feet wide, weighed 1,700 pounds,
and was suspended from an overhead track by 2 hangers.
Attached to each hanger were 4 wheels, 2 large ones running
along the top of the rail and 2 smaller ones underneath, linked by
a pin, being designed to guide the larger wheels and prevent them
from coming off the track. The bottom of each door fitted into a
metal groove in the floor of the pier. If in proper condition,
the doors could be moved easily by two employees, called
“« slingmen,’? who would slide them open to permit the steve-
dores to load or unload cargo on the vessels and close them
when the day’s work was done.

For some time before the accident, the estimates varying
from two months to two years, difficulty had been experienced
in opening and closing the door involved in the accident. Six
or eight men were needed to move it instead of the usual
two, and on a number of occasions crowbars were used. On the
night of the accident, when the dock boss ordered the door
closed, about eight men, including De Clara, pushed on it for
upwards of five minutes without being able to budge it; sud-
denly, it fell, crushing and fatally injuring De Clara. Hxami-
nation after the accident disclosed that the center pins linking
the two small guide wheels at each end of the door were bent,
creating an opening between the rail and guide wheels, which,
the evidence showed, could have caused the large wheels to come
off the rail and the door to fall.

By the lease between defendant dock company and its tenant,
the landlord agreed, upon receiving written notice from the
tenant, to ‘‘ make repairs to and maintain said premises in as
good condition as they were when accepted by the Tenant,

reasonable wear and tear excepted’’. The lease further pro-
vided, however, that, ‘‘ Without operating as a waiver of the
requirement of such notice, the Landlord shall have the right
at any time or times * * * to examine ’’ the premises and
‘‘make such repairs and alterations as it shall deem necessary
for [their] safety and preservation’’. Nothing was said in
the lease about repairs by the tenant, and the only evidence on
the subject indicated that Barber was not even permitted to
make any.

Pier 38 was one of 30 piers owned by defendant on the Brook-
lyn water front. To police those piers and observe all that went
on, defendant had watchmen, and to maintain them and keep
them in safe condition and proper repair it also had a superin-
tendent of maintenance and a crew of about 20 men stationed
on them “all the time.’’ It was the job of this latter group to
inspect the premises, and, if repairs were considered necessary,
to make such repairs immediately, without even notifying the
tenant. More particularly, defendant’s superintendent was on
Pier 38 every day during some weeks and never less than two
or three days a week at any time, attending not only to the
routine ‘‘ maintenance repairs’’—for which defendant Jand-
lord paid—but also to those repairs necessitated by damage
caused by the tenant—for which the tenant paid.

Barber gave no written notice, or, for that matter, any notice,
prior to the accident, that there was anything wrong with the
door or that it needed repairing. However, defendant’s super-
intendent acknowledged that he had heard, some time before
the accident, that difficulty was being encountered with one of
the doors and that crowbars were being used to open and close it.

Although he warned against the use of such crowbars, he made
no inspection or inquiry to locate or track down the defective
door. At the close of plaintiff’s case, and again at the close
of the entire case, defendant moved to dismiss the complaint
on the ground, among others, that the evidence failed to estab-
lish that it had such possession and control of the pier as to
subject it to liability in tort. The trial judge denied the motions
and submitted the issue of possession and control to the jury,
and it returned a verdict of $65,000 in plaintiff’s favor. The
Appellate Division, although affirming the ‘‘ implied findings,
except as to the amount of the verdict,’’ reversed on the law

and dismissed the complaint. It declared that defendant
“* owner was not liable in tort for a mere breach of the covenant
to repair, more particularly where the covenant was to repair
after notice and no notice was given, nor for a failure to
exercise its right to examine the demised premises ’’ (285 App.
Div. 1062, 1063).

We first address ourselves to the question of plaintiff’s stand-
ing to maintain this action. It is urged, in reliance upon the
Workmen’s Compensation Law (§ 29, subd. 2), that the passage
of more than six months between the time of the award of death
benefits and the commencement of the present suit effected
an assignment of the cause of action to the insurance carricr
and prevented anyone but the carrier, or the administratrix
in its name, from bringing the suit. Defendant’s position
would be sound if the deceased employee’s only next-of-kin were
dependents. (See, e.g., Matter of Zirpola v. T. é E. Casselman,
Inc., 237 N. Y. 367, 375; United States Fidelity @ Guar. Co. v.
Graham & Norton Co., 254 N. Y. 50, 55.) But where, as here,
the deceased also left adult children who are not dependents,
the statutory assignment is effective only to the extent of the
dependents’ beneficial interest, and the suit may be brought
solely ‘‘ through an administrator as the statutory trustee of
the entire group of beneficiaries?’ (United States Fidelity &
Guar. Co. v. Graham & Norton Co., supra, 254 N. Y. 50, 55), a
group embracing the carrier as well as the nondependents.
(See Matter of Zirpola v. T. & E. Casselman, Inc., supra, 237
N. Y. 367, 375; Gross v. Abraham, 306 N. Y. 525, 580.) Conse-
quently, plaintiff, as administratrix, not only had standing, but,
indeed, was the only person authorized, to institute the suit.
Of course, any recovery will be received by her as trustee for
distribution to those entitled to share, in proportions later to
be determined. (Decedent Estate Law, § 133; see, also, Matter
of Zirpola v. T. & E. Casselman, Inc., supra, 237 N. Y. 367,
372.) As to the other points directed to the subject of the
nondependent children’s ‘‘ pecuniary injury,” it is enough to
say that we have examined them and found them lacking in
merit. (See, e.g., Gross v. Abraham, supra, 806 N. Y. 525, 531;
Thomas v. Utica & Black Riv. R. R. Co., 6 N. Y. Civ. Pro. Rep.
353, 354, affd. 34 Hun 626, affd. 98 N. Y. 649.)

628 Le
ee

However, as already indicated, the primary question posed
by the appeal concerns the imposition of a tort liability upon
defendant. We put to one side the decisions dealing with the
duty of care owed by a landlord out of possession to the person
on property to which members of the public are admitted or
to the passerby on a city street or public way adjoining the
leased premises. (See, e.g., Appel v. Muller, 262 N. Y. 278, 282;
Lafredo v. Bush Term. Co., 261 N. Y. 323, 327; Cullings v. Goetz,
256 N. Y. 287, 293.) In a case such as the one before us, involv-
ing neither premises abutting upon a public street, a traveler
on a highway nor property open to the public, the sine qua non
of liability in tort is retention by the landlord of a measure
of occupation and control over the leased premises. The gov-
erning rule was given definitive statement in Cullings v. Goetz
(supra, 256 N. Y. 287); the court there held, and the holding
has been reiterated over the years, that the requisite reserva-
tion of control is not effected or accomplished by a mere promise
on the part of the landlord to make repairs at the tenant’s
request. (See, eg., Lafredo v. Bush Term. Co., supra, 261
N. Y. 323; Solomon v. Brooklyn Cornell Utilities, 291 N. Y.
593 ; Dick v. Sunbright Steam Laundry Corp., 307 N. Y. 422, 424.)

The rationale underlying the rule, and it was set forth by
Judge Carpozo in the course of his opinion in the Cullings
case, is that a covenant or agreement to repair ‘‘ at the request
of the lessee ’’, without more, constitutes, ‘“not a reservation
by an owner of one of the privileges of ownership ’’, but rather
“the assumption of a burden for the benefit of the occupant
with consequences the same as if there had been a promise to
repair by a plumber or a carpenter *’ (256 N. Y., at p. 291). The
court did, however, assume ‘‘ the possibility of so phrasing and
enlarging the rights of the lessor that occupation and control
will be shared with the lessee ’’, and specifically called attention
to decisions in Massachusetts ‘‘ that draw a distinction between
a covenant merely to repair and one to maintain in safe con-
dition with supervision adequate to the end to be achieved ’’
(256 N. Y., at pp. 290-291). And, the court continued (p. 291),
“Tn the case now at hand, the promise, if there was any, was to
act at the request of the lessee.”’

Here, then, in Cullings itself, is recognition that a landlord
may retain the essential control of leased property by reserving
to himself the right, to be exercised in his independent disere-

P| 629
ee

tion—as distinguished from ‘‘a promise * * * to act at
the [tenant’s] request ’’ (256 N. Y., at p. 291) —to enter the
premises at any and all times and make repairs upon his own
responsibility. Indeed, in recent years, this court has found
evidence of such control in an act of repair made by the landlord
after the accident, even though the primary duty of repair rested
upon the tenant. (See Noble v. Marx, 298 N. Y. 106, 108;
see, also, Antonsen v. Bay Ridge Sav. Bank, 292 N. Y. 148, 146;
Scudero v. Campbell, 288 N. Y. 328, 329.) While these cases
do not relax the requirement of requisite control in the land-
lord, they do indicate that ‘such control may be demonstrated
by a showing of something less than ‘‘‘ the power and the right
to admit people to the premises and to exclude people from
them’. (Cf. Cullings v. Goetz, supra, 256 N. Y. 287, 290;
Lafredo v. Bush Term. Co., supra, 261 N. Y. 323, 325.)

Be that as it may, the prerequisite power of control may not
be inferred from a mere covenant to repair; that is what the
court held in Cullings v. Goetze (supra, 256 N. Y. 287) and noth-
ing we now say is intended to curtail that ruling. In the case
before us, however, there is much more than such a covenant.
Not only by the lease which it made with the tenant, but by
the practice and procedure actually followed, defendant land-
lord kept and retained a general supervision over the premises.
Besides agreeing to repair upon notice, defendant reserved ‘‘ the
right at any time ’’ to go upon the demised property, inspect
it and ‘‘make such repairs and alterations as it shall deem
necessary for [its] safety and preservation ’’. The large degree
of control which this provision reflects is further accentuated
both by the fact that the tenant had neither the right nor the
duty to repair the premises and by the fact that the landlord
had its own watchmen to guard and police them, as well as its
own superintendent of maintenance and a crew of 20 men to
inspect them, spot the defects and make needed repairs.

An owner of a number of parcels of a specialized character
may, as here, develop an extensive system of machinery for
making inspections and repairs through trained personnel. Such
an owner does not expect the tenant to duplicate the necessary
machinery and paraphernalia or procure the manpower required
to search out and correct defects on the property. This is par-
ticularly so where the tenant is assured (as was Barber herein)

that the landlord will inspect and repair without waiting to be
asked; under such circumstances, he will not be inclined to make
repairs on his own, even if free to do so. A landlord who has
the right to come and go upon the leased premises as he pleases
for the purpose of inspection and repair and who is at liberty
to correct any defect as soon as it is found, must be regarded
as having thereby reserved a privilege of ownership, sufficient
to give rise to liability in tort.

In the light of the record before us, evidence designed to
demonstrate that the tenant exercised some control of the pier,
is totally indecisive, and completely beside the point, as to
whether the landlord shared such control with the tenant. For
that reason, the trial court was fully justified in excluding
testimony, offered by defendant, that Barber had, after the
accident, requested defendant to repair the door and that it
had done so.

Nor is plaintiff barred from recovery by reason of Barber’s
failure to give notice of the defect to defendant. If the suit
were one by the tenant against the landlord for breach of the
covenant to repair, the written notice required by the lease
might operate as a condition precedent to recovery. (See, e.g.,
Hirsch v. Radt, 228 N. Y. 100, 105.) Once it be decided, how-
ever, that the landlord shared control with the tenant, the lease
provision is irrelevant in a suit brought by a third party and,
in determining the landlord’s liability in tort, the usual rules
relating to notice in negligence actions apply. If the owner
acquires knowledge of a defective condition or is otherwise
chargeable with knowledge or notice thereof, he is subject to
liability for injuries sustained because of his failure to correct
that condition. (See Magid v. City of New York, 259 N. Y.
618, affg. 234 App. Div. 38; Murray v. Usher, 117 N. Y. 542;
see, also, Ford v. Grand Union Co., 268 N. Y. 248, 247; Glenn
v. Oakdale Contr. Co., 257 N. Y. 497; Haefeli v. Woodrich Eng.
Co., 255 N. Y. 442, 448-449; De Milt v. Hart, 235 N. Y. 464.) In
the present case, there was ample evidence to charge defendant
with constructive notice of the defective condition of the pier
door. There was testimony that for a long period of time eight
men were used to move the door, where only two should have
been required; that crowbars were being employed in the opera-
tion; and that defendant’s superintendent was not only aware

| 631
ee

that crowbars were being used but had ordered the practice
stopped. Under the circumstances, the jury could, as it did,
properly find that defendant had such constructive notice as
to impose upon it the duty of locating the faulty door and
repairing it.

We are left only with the precise disposition to be made of
the case. The dismissal of the complaint was unwarranted,
and the judgment of the Appellate Division must, therefore,
be reversed. Since that court, while otherwise affirming the
jury’s ‘‘ implied findings of fact,’’ registered disagreement with
the size of the verdict and characterized it as ‘‘ grossly exces-
sive ’’, we may not reinstate the judgment of the trial court.
(See Cohen and Karger, Powers of the New York Court of
Appeals, pp. 566-567.) Nevertheless, there remains open to the
Appeliate Division the alternative of either ordering a new
trial because of the excessiveness of the verdict or permitting
the verdict to stand in a reduced amount upon plaintiff’s con-
sent to such a reduction. The case should, accordingly, be
remitted to the Appellate Division for the limited purpose of
enabling it to deal with that matter. (See Beteag v. Gulf Oil
Corp., 298 N. ¥. 358, 301 N. Y. 576.)

The judgment of the Appellate Division should be reversed,
with costs in this court and in the Appellate Division, and the
case remitted to that court for further proceedings, not incon-
sistent with this opinion, in relation to the excessiveness of
the verdict.

Van Vooruis, J. (concurring). I agree with Judge Desmonp’s
statement of the law, but consider that the facts of this case
distinguish it from Cullings v. Goetz (256 N. Y. 287) in that
the pier where this accident occurred was one of 30 owned
and leased by respondent on the Brooklyn water front, that by
the leasing arrangements the tenant was forbidden to make
repairs, that respondent had watchmen and a crew of 20
men stationed constantly on these piers for the purpose of
discovering and repairing defects, and that this was done regu-
larly by respondent without notifying the tenant. Plaintiff’s
intestate was killed by the falling of a sliding door 23 feet
in height and weighing 1,700 pounds, which respondent and
not the tenant was equipped to repair, and would normally
have discovered and repaired in the usual course of business.

632 |

Respondent had retained control of these piers to perform this
kind of work which the tenant was prevented from doing. Under
these circumstances, it seems to me that respondent is not exon-
erated as matter of law, and that the dismissal of the complaint
should be reversed without curtailing the precedent of Cullings
v. Goetz (supra).

Dusmonp, J. (dissenting). I dissent and vote to affirm.

The heart of this decision is in that part of the majority
opinion which says that a landlord may be held liable solely
because of a covenant in the lease permitting him ‘‘to enter

- the premises at any and all times and make repairs upon his
own responsibility.’? None of the cited cases, nor any other
case I have seen, so holds. Indeed, Noble v. Marx (298 N. Y.
106, 110), one of the most recent decisions listed in the majority
opinion here, is exactly to the contrary, holding as it does that
an express reservation in the lease, to the landlord, of the right
to enter is not enough to prove control in the landlord. The
true and only rule in this State is that of Cullings v. Goete (256
N. Y¥. 287, 290) which says that the power of control which will
make a landlord liable is ‘‘‘ the power and the right to admit
people to the premises and to exclude people from them ’”’ (see
Warren on Negligence in the New York Courts, Vol. 2A, p. 374).
Not only has that Cullings rule never been revised by this court
but it was the sole and express basis for exculpation of the land-
lord in Lafredo v. Bush Term. Co. (261 N. Y. 323) where the
facts were identical with those in this case with the single
exception that the Lafredo lease did not confer on the landlord
an express permission to re-enter the premises for repair pur-
poses. The Lafredo lease, like the lease in the present case,
was of a pier and sheds thereon. In neither case was any
so-called ‘‘ right to inspect and repair ’’ of any practical impor-
tance since in each situation defendant landlord maintained a
large repair force and in fact did all the repairs.

The judgment should be affirmed, with costs.

Conway, Ch. J., Frozssen and Burs, JJ., concur with Fur,
J.; Vaw Vooruis, J., concurs in result in a separate opinion in
which Conway, Ch. J., also concurs; Dusmonn, J., dissents in
an opinion; Dvys, J., taking no part.

Judgment reversed, ete.

Mary A. Taynor, as Administratrix of the Estate of Franx E.
Taynor, Deceased, Appellant, v. Inrzrstars Motor Freicat
System, Respondent.

Argued November 16, 1955; decided February 17, 1956.

04

ee

John P. Cox, William J. Flynn, Joseph Swart and Edward
J. Murty, Jr., for appellant. I. Final determination of proper
exercise of discretion rests with this court. (Matter of Flagler,
248 N. Y. 415; Matter of Oystermen’s Dock Co. v. Downing, 258
N. Y. 156; Nelson v. Hersch, 264 N. Y. 316; Bata v. Bata, 304
N. Y. 51; Karlin v. Karlin, 280 N. Y. 32; People v. Parkin,
263 N. Y. 428.) II. The existence of special circumstances
justifies retention of tort actions by New York State courts.
(Murnan v. Wabash Ry. Co., 246 N. Y. 244; Yesuvida v. Penn-
sylvania R. RB. Co., 200 Misc. 815.) ITI. Special circumstances
have previously been held to justify retention of tort actions.
(Salomon v. Union Pacific R. R. Co., 197 Mise. 272; Williamson
v. Palmer, 181 Misc. 610; Randle v. Inecto, Inc., 131 Mise. 261.)

IV. The record reveals special circumstances which throw the
balance in favor of plaintiff.

John F. Canale and Mortimer Allen Sullivan for respondent.
I. Final determination of proper exercise of discretion rests
with this court. II. The unanimous opinion of the Appellate
Division is correct and should be affirmed. (de la Bouillerie
v. de Vienne, 300 N. ¥. 60; Wedeman v. United States Trust
Co. of N. Y., 258 N. Y. 315; Murnan v. Wabash Ry. Co., 246
N. Y. 244; Yesuvida v. Pennsylvania R. R. Co., 200 Mise. 815;
Gregonis v. Philadelphia & Reading Coal & Iron Co., 235 N. Y.
152; Brandao v. United Fruit Co., 183 Misc. 683; Collard v.
Beach, 81 App. Div. 582; Robinson v. Oceanic Steam Navigation
Co., 112 N. Y. 315.) III. There are no special circumstances
existing in the present case to warrant the trial of this action
in the courts of the State of New York.

Per Curiam. This action was brought by plaintiff to recover
for the wrongful death of her husband as a result of a collision

es — 635

which occurred in the State of Ohio. Decedent was the driver
of one of two tractor-trailer trucks involved in the accident.
He resided in Pennsylvania.

The tractor-trailer truck driven by the decedent was owned
by New York Car Carriers, Inc., a New York corporation having
its office in Buffalo, New York. He was an employee of New
York Car Carriers, Inc. He reported to and was paid by the
Buffalo, New York, office of the New York Car Carriers, Inc.
At the time of the accident, the decedent was engaged in the
course of his employment. The decedent’s widow and children
have been awarded benefits by the Workmen’s Compensation
Board of the Department of Labor of New York State.

The other tractor-trailer truck was owned by Interstate Motor
Freight System, a Michigan corporation, the defendant. A
certificate of authority to do business in New York State had
been issued to Interstate upon its statement and designation,
making the Secretary of State its agent for the purpose of
accepting service. Interstate had an office for the transaction of
business in the city of Buffalo, New York. It transacts its
trucking business throughout the State. Service of the summons
was made on the Secretary of State.

On February 9, 1954, under section 29 of the Workmen’s
Compensation Law, Michigan Mutual, the insurer, served a
notice upon the widow to commence a third-party action against
any other party responsible for her husband’s death. Her
failure to commence her action before March 11, 1954, would
operate to assign her cause of action to Michigan Mutual, the
insurer.

Mrs. Taylor commenced this action on March 9, 1954. By
respective statutes, the time within which to commence an action
in Pennsylvania expired on October 1, 1953, and in New York,
Ohio and Michigan, on September 30, 1954.

Special Term denied the motion of the defendant to vacate
service of the summons and complaint and to dismiss the action,
finding special circumstances warranting the exercise of dis-
cretion in favor of assuming jurisdiction of the suit. The
Appellate Division reversed the order of Special Term upon the
ground that ‘‘ Special Term exceeded its discretionary power in
this case ’’,

636 Le
se

The statement by the Appellate Division that this reversal was
‘* on the law ”’ (as well as in discretion) and other statements in
its opinion suggest to us that the Appellate Division believed
that there was a controlling and inescapable public policy man-
dating dismissal. There does exist a public policy against enter-
taining such suits between nonresidents but ‘‘ there is no abso-
lute prohibition against such suits ’? (Bata v. Bata, 304 N. Y. 51,
56). The power to dismiss is still a discretionary one (Bata v.
Bata, supra, p. 55). Where there are special and unusual cir-
cumstances such as are here shown without dispute and favoring
acceptance of the suit, those special and unusual circumstances
must be given adequate consideration.

The judgment of the Appellate Division should be reversed
and the case remitted to that court for further proceedings not
inconsistent with this opinion.

Conway, Ch. J., Dismonn, Frozssei, Van Voornis and Burks,
JJ., concur in Per Curiam opinion; Dyz, J., taking no part.

Fup, J., concurs in the following memorandum: I agree
with the court’s decision, understanding it, as I do, as a remis-
sion to permit the Appellate Division to exercise its discretion
fully and independently.

Judgment reversed, ete.
Es

Tue Propie or tHe Stars or New Yorx, Respondent, v. Roper
Warts, Appellant.

Argued October 18, 1955; decided February 17, 1956.

Milton Schilback and Robert White, in person, for appellant.
Appellant is entitled to a hearing on his allegation that his
plea of guilty was obtained by fraud. (Matter of Hogan v.
New York Supreme Court, 295 N. Y. 92; Matter of Morhous
v. New York Supreme Court, 293 N. Y. 181; Matter of Lyons
v. Goldstein, 290 N. Y. 19; People v. Richetti, 302 N. Y. 290;
Matter of Bojinoff v. People, 299 N. Y. 145; People v. Langan,
803 N. Y. 474; People v. Guariglia, 303 N. Y. 338.)

Frank S. Hogan, District Attorney (Leonard E. Reisman
and Charles W. Manning of counsel), for respondent. Grounds
for coram nobis having been conclusively refuted by the docu-
mentary proof, the motion was properly denied without a hear-
ing. (People v. Sadness, 300 N. Y. 69; People v. Daiboch, 265°
N. Y¥. 125; People v. Gowasky, 244 N. Y. 451; People v.
Chichester, 262 App. Div. 567; Matter of Lyons v. Goldstein,
290 N. Y. 19; People v. Guariglia, 303 N. Y. 338; People v.
Langan, 303 N. Y. 474; People v. Richetti, 302 N. Y. 290.)

638 |
ee

Borxn, J. The defendant by affidavit alleges that on February
11, 1980, he pleaded guilty to grand larceny in the second degree
in the Court of General Sessions, New York County, relying
upon the alleged fraudulent misrepresentation of an assistant
district attorney that upon a plea of guilty he would be sentenced
as a second felony offender. He further alleges in paragraphs
11 (clause [d]) and 13 of the affidavit that he abandoned attempts
to withdraw his guilty plea and did not appeal from his sentence,
relying upon the misrepresentation of the sentencing Judge that
he would receive a pardon after serving seven years’ imprison-
ment.

Court records disclose the following facts: On April 1, 1929,
after a notice of appearance was filed by Harrison & Collins as
counsel, the defendant entered a plea of not guilty. Leroy
Campbell, Esq., was substituted and assigned as counsel to the
defendant on January 27, 1930. On January 29, 1930, a trial
was commenced on the charge of grand larceny, first degree,
which resulted in a mistrial. Subsequent to the guilty plea on
February 11th, the defendant was arraigned for sentence on
February 28, 1930, in the presence of his counsel, at which time
the assistant district attorney requested an adjournment for the
purpose of filing an information. The court then stated that it
appeared from the report that the defendant was a fourth or
fifth offender. Later, on March 11, 1930, the defendant through
his attorney refused to answer when arraigned on an informa-
tion read to him, charging him with three prior felony convie-
tions, including a Federal judgment.

At the time he agreed to the plea, all the convictions were
well known to the defendant, as his admissions later prove. On
April 15, 1930, the information was once more read to him in the
presence of his attorney, and he again remained mute. The court
directed the impaneling of a jury to try the defendant on the
information. After the jury was impaneled, the counsel for
the defendant moved with the consent of the District Attorney
to have a juror withdrawn and a mistrial declared. The defend-
ant then admitted he was the same person mentioned in the
information, but reserved the right to challenge the legal effect
of the Federal conviction. The court, as required by the statute,
sentenced the defendant as a fourth offender for the term of
life. On the sentencing the following colloquy took place:

| 639

“The Court: I sentence the defendant to State Prison for
the natural term of his life. I make this recommendation that
after he has served a term of seven years in State Prison he be
a subject for pardon by the Governor of the State of New York,
and I add my recommendation that he receive favorable con-
sideration, by the Governor of the State of New York, for a
pardon, after he has served a term of seven years in State
Prison.

“Mr. Tighe [attorney for defendant]: You hold, if the
defendant were not subject to section 1942 of the Penal Law,
that you would sentence the defendant to seven years for the
crime he has committed.

“The Court: If the defendant were not subject to life
imprisonment under the Baumes Act, I would sentence the
defendant to seven years imprisonment in State Prison.”

It is conceded that the defendant’s commitment papers to
State prison contained the recommendation of the Judge of
General Sessions. On May 12, 1930, Leroy Campbell, Esq., as
attorney, filed a notice of appeal which was not prosecuted.
During the prison term the defendant by several applications
unsuccessfully sought to have the Federal conviction adjudged
amisdemeanor. Thereafter the defendant made several applica-
tions for executive clemency.

The defendant’s motion for a writ of error coram nobis to
vacate and set aside the judgment of General Sessions rendered
April 15, 1930, was denied without a hearing. The Appellate
Division unanimously affirmed the order denying the motion.

On this appeal the defendant contends that the Court of Gen-
eral Sessions erred in denying a hearing on the claim of fraud
as the defendant’s allegations are uncontradicted.

The mere averment of fraudulent misrepresentation is mean-
ingless unless the averment discloses acts evidencing reliance
upon the alleged misrepresentation. The record demonstrates
that the defendant knew he had been convicted of three separate
crimes prior to the plea. The defendant was represented by
counsel on February 28, 1930, on March 11, 1930, on April 15,
1930, and on May 12, 1930. During this period he knew of his
three prior convictions and was aware that the District Attorney
and the court were cognizant of the convictions. The absence

640 |
erase

of minutes showing that he was represented by counsel on
February 11, 1930, the day of pleading, is not evidence that he
relied upon a fraudulent misrepresentation. He knew his plea
of guilty would add to his criminal record a fourth conviction.
The notation on the indictment proves that the plea was taken
in open court. From February 28 until May 12, 1930, both the
defendant and his counsel were fully apprised by the District
Attorney and the court that he was to be sentenced as a fourth
offender. It is impossible to conjure even a feigned reliance in
the face of these plain warnings. Hence the failure of the
defendant or his counsel to allude to the alleged fraudulent mis-
representation from February 28, 1930, through May 12, 1930,
although the time and the occasion were repeatedly given to the
defendant to do so, is evidence rebutting even a suggestion of
reliance. In his affidavit the defendant concedes that prior to
sentence he abandoned reliance upon the so-called agreement.
The defendant’s application for a writ of coram nobis depends,
therefore, on the alleged promise of the Judge at General Ses-
sions that he would receive a pardon after serving seven years’
imprisonment.

The allegations of the defendant are contradicted by the
documentary proof and by the conduct of the defendant, his
attorney, the District Attorney and the court. The allegation
that all parties concerned agreed that he was a second offender
and not a fourth offender is directly disproved by the notations ©
on the indictment, and on the information and the minutes of
the hearings held in 1930. The defendant’s claim of judicial
misrepresentation in regard to a pardon is unsubstantiated.
The allegation that he attempted to withdraw his plea and that
the request was denied is refuted by the minutes of the hearings
which show no such request.

We said in People v. Richetti (302 N. Y. 290, 298): ‘‘ A pre-
sumption of regularity exists only until contrary substantial
evidence appears (People ex rel. Wallington Apts. v. Miller, 288
N. Y. 31, 33; Galpin v. Page, 18 Wall. [U. 8.] 350, 365; 9 Wig-
more on Evidence [3d ed.], § 2491).’? Charges made in coram
nobis are subject to the criteria relied upon in all causes to
determine where the truth lies. Bare allegations not con-
firmed by the recorded facts and contrary to the conduct of the
defendant and his attorney, are insufficient in law to warrant

| 641
eee}

the granting of a hearing. The defendant is not entitled to a
hearing on charges lacking factual support. Due process does
not require a court to accept every sworn allegation as true.
Many sworn allegations are palpably untrue, not improbable or
unbelievable, but untrue. (Taylor v. Alabama, 335 U. 8. 252;
Foster v. Illinois, 332 U. 8. 184.) The allegations in this case fit
this description.

The test is whether there is, as a matter of law, a dispute of
fact which entitles the defendant to a hearing. (People v.
Richetti, 302 N. Y..290, supra; Rice v. Olson, 324 U. 8.786.) We
have stated ‘‘ that Federal due process requires no trial if the
State courts be convinced, on the record, that there is no reasou-
able probability at all, that defendant’s averments are true.’’
(People v. Richetti, supra, pp. 295-296.) The record in this case
‘convincingly demonstrates *’ the falsity of the allegations.
(People v. Guariglia, 303 N. Y. 338, 342.)

The defendant’s version of the alleged misrepresentation of
the assistant district attorney is contradicted by the clear show-
ing of the lack of an opportunity for reliance, indeed the impossi-
bility of reliance, in view of the personal knowledge of the
defendant of his criminal career and of the warnings of the
court. Therefore, there is no dispute of fact as to reliance upon
the alleged misrepresentation of the assistant district attorney.
The interpretation of the statement of the Judge at General
Sessions as a ‘‘ guaranty’’ of executive clemency is a mere
conclusion, legally insufficient to warrant a hearing, as it raises
no issue of fact but only represents an opinion of the defendant.
A recommendation cannot be construed as a promise or guar-
antee or truly characterized as such. The language used by
the court does not permit even the inference of a promise.

There is no question of due process. The defendant was
assigned and was represented by counsel who had defended
him at the abortive trial prior to the plea. The documentary
proof shows he was informed in the presence of his counsel at
three separate hearings that he was to be sentenced as a fourth
offender. During 1931 and 1932 three separate habeas corpus
proceedings were brought by the defendant but the habeas
corpus writs were dismissed. Subsequently in 1932 and 1938
the defendant instituted proceedings in an attempt to establish
that the conviction in the Federal court was not a felony convic-

642 a

FT
tion, within the meaning of section 1942 of the Penal Law, but
did not in any way complain of the alleged acts of the District
Attorney or the court in reference to the charges now made.
There is no question of credibility for — assuming the allegation
as to the representation by the assistant district attorney to be
true — the basis for belief was dissipated by the proceedings
on the information. If the plea had been made in error or
accepted in error, the minutes of the proceedings on the infor-
mation would so state. The minutes, on the contrary, show that
the defendant was to be sentenced as a fourth offender and con-
tain neither a reference to a conditional plea as a second offender
nor an attempt by the defendant to withdraw the plea. Indeed
the minutes record the refusal of the defendant to take any
position as to his criminal status. Here we have not only the
failure to overcome the presumption of regularity but docu-
mentary proof evidencing regularity.

The Judge of General Sessions and the Justices of the
Appellate Division have unanimously found that the charges
have been conclusively refuted and that there is no genuine
triable issue. There is more than sufficient evidence to sustain
the determination. The order of the Appellate Division should
be affirmed.

Dzsmonp, J. (dissenting). Since I see no ground for refusing
this defendant a trial of his sworn allegations, I vote to remit
to General Sessions with directions to hold such a trial. Defend-
ant alleges that, when unrepresented by counsel, he pleaded
guilty in reliance on a fraudulently made promise by the prosecu-
tor that, if defendant would plead guilty, he would be sentenced
as a second offender, only. People v. Guariglia (303 N. Y. 338,
343) holds that these allegations require a trial, unless ‘‘ conclu-
sively ’? shown by documentary evidence to be false. Not only
are this defendant’s averments not conclusively disproven by
any record, they are not even met with a direct denial. What
the People did file as an answer was a collection of excerpts and
notations from the indictment and from the clerk’s records and
the minutes of proceedings, all as of dates after defendant
pleaded guilty. These later occurrences and circumstances,
while they might make it seem probable to a trier of the facts
that defendant is not telling the truth, certainly should not

[| 643

deprive him even of a trial of the issue. As recently as January
9th of this year, the United States Supreme Court (Herman
v. Claudy, 350 U. S. 116, following Palmer v. Ashe, 342 U. 8.
134, 137) held that a defendant’s constitutional right to such a
trial could not be denied on paper showings like those in this
record (see Chessman v. Teets, 350 U. S. 3 [1955]).

It is impossible for me to reconcile the decision now being
made in this case with the controlling precedents of Matter of
Lyons v. Goldstein (290 N. Y. 19) ; Matter of Hogan v. New York
Supreme Court (295 N. Y. 92) ; and People v. Richetti (302 N. Y.
290), restated a few months ago in People v. Lain (309 N. Y.
291, 294).

The order should be reversed and the matter remitted to the
Court of General Sessions for trial.

Cowway, Ch. J., Fromssez and Vaw Vooruis, JJ., concur with
Burgxz, J.; Desmonn, J., dissents in an opinion in which Futp, J.,
concurs ; Dyz, J., taking no part.

Order affirmed.

Le

Tur Prorie or tHE Sratz or New Yorx, Respondent, v. Samuen
Assison, James Lacata, Hyman Buoxer, Anruur J. Fromen,
Juues Kramer, Antony Pzrronz, JosepH Lars, Samupn
Simorz, Harry A. Rosen, Alias An Rosen, Appellants.

Argued November 28, 1955; decided February 17, 1956.

644 Le
epee =
a |
|
|

William B. Mahoney for Hyman Becker and others, appel-
lants. I. There was a complete failure by the People to make
out a prima facie case against any of the defendants on any
of the counts. There was no proof of the corpus delicti of the
erime and the indictment should have been dismissed at the
close of the People’s case. (People v. Erickson, 302 N. Y. 461;

[| 645

People v. Sacks, 276 N. Y. 321; Ruloff v. People, 18 N. Y. 179;
People v. Cuozzo, 292 N. Y. 85; People v. Taddio, 292 N. Y. 488;
People v. Weiss, 290 N. Y. 160; People v. Goldstein, 295 N. Y.
61; People v. Charney, 269 App. Div. 680; People v. Giro, 197
N. Y. 152; People v. Deacons, 109 N. Y. 374.) IL. The alleged
identity of the voices of defendants was not established in a
satisfactory way. The court failed to consider such question
as a matter of law. The identification of voices was without
foundation and the indictment should have been dismissed.
(Murphy v. Jack, 142 N. ¥. 215; People v. McKane, 148 N. Y.
455; People v. Strollo, 191 N. Y. 42; People v. Dunbar Contr.
Co., 215 N. Y. 416; People v. McDonald, 177 App. Div. 806;
People v. Sacks, 276 N. Y. 321; People v. Davino, 284 N. Y. 486,
288 N. Y. 423.) III. The People failed to establish the single
conspiracy charged in the first count of the indictment or any
other conspiracy. (People v. Friedlander, 280 N. Y. 436; People
v. Winter, 288 N. ¥. 418; Linde v. United States, 13 F. 2d 59;
United States v. Lekacos, 151 F. 2d 170; Kotteakos v. United
States, 328 U. 8. 750.) IV. Defendants’ motion to dismiss the
indictment on the ground that the evidence before the Grand
Jury was insufficient as a matter of law to justify its return
should have been granted. (People v. Niteberg, 289 N. Y. 523.)
V. The court’s failure in its charge to marshal the facts in the
complicated case was prejudicial error. Furthermore, the
court’s failure to assist the jury when informed that some of
the jurors did not understand the definition of conspiracy con-
stituted prejudicial error. (People v. Odell, 230 N. Y. 481;
People v. Buchalter, 289 N. Y. 181; People v. Fanning, 131 N. Y.
659; People v. Becker, 210 N. Y. 274; People v. Aszkler, 264 App.
Div. 938; People v. Birch, 283 App. Div. 844; People v. Flynn,
290 N. Y. 220; People v. Gonzalez, 293 N. Y. 259; People v. Lupo,
305 N. Y. 448.) VI. It was error for the court to allow the
jurors to speculate on the jargon contained in the testimony.
The court admitted it did not understand the same and would
require the District Attorney to produce explanatory proof.
There was a complete failure to produce the same. (People v.
Samuels, 302 N. Y. 163; People v. Strait, 148 N. Y. 566.)
VIL. The court’s abrupt interference with and eventual break-
ing off of the summation of defense counsel was prejudicial to
defendants and constituted error. (People v. Kelly, 94 N. Y.

646 a

526; People v. Mayer, 132 App. Div. 646; People v. Buchalter,
289 N. Y.181.) VIII. The court erroneously admitted conversa-
tions relating to instances outside the scope of the conspiracy.
Also, the court failed to exercise discretion to delete vulgar and
filthy language, and then informed the jurors that, in his mind,
it formed a pattern of conversation which was material to the
conspiracy. (People v. Vaccaro, 288 N. Y. 170; People v. Ryan,
263 N. Y. 298; People v. Feld, 305 N. Y. 322.)

John I. O’Day for James Lagala and another, appellants.
I. The testimony of the witness Robinson to the effect that,
after hearing hundreds of telephonic conversations on his
recording device, he was able, three months later, to identify
the voice of eighteen of the conversants, was incredible as matter
of law. (People v. Dunbar Contr. Co., 215 N. Y. 416; People v.
Strollo, 191 N. Y. 42.) II. Since the witness Robinson testified
that he had not identified either of these appellants or any other
defendant in his testimony before the Grand Jury, there was
not presented to that body evidence to make out a prima facie
case and the indictment should be dismissed. (People v. Nite-
berg, 289 N. Y. 523.) IIL. The People failed to establish a
prima facie case against these appellants since there was no
proof of a conspiracy, there was no proof that any ‘‘ trial or
coutest of skill, speed and power of endurance of horses or
men ’’ took place on any of the dates in question, and there was
no proof that the contents of the conversations recorded related
to wagers or bets upon any such contests. (People v. Winter,
288 N. Y. 418; People v. Friedlander, 280 N. Y. 487; People v.
Cuozeo, 292 N. Y. 85; People v. Taddio, 292 N. Y. 488.) IV. The
court was in error in allowing the jury to have access to type-
written transcripts of certain recordings as an aid to their
interpretation of them. (People v. Feld, 305 N. Y. 322; People
v. O’Keefe, 281 App. Div. 409, 306 N. ¥. 619.) V. The court
improperly allowed the District Attorney to examine appellant
Lagala’s trial counsel as to that appellant’s presence at the
scene of the incriminating phone calls. VI. The court com-
mitted error in charging the jury in that: (1) It took away from
the jury the question as to whether appellant Lagala was
“* Jimmy Dale ’’, and (2) it failed to marshal the evidence for
the benefit of the jury. (People v. Becker, 210 N. Y. 274; People
v. Fanning, 131 N. Y. 659; People v. Aszkler, 264 App. Div. 938.)

647

John 8. McGovern for Samuel Abelson and others, appellants.
I. The identification of appellant Lape as a perpetrator of these
misdemeanors, based solely on the hearing of a voice over a
telephone which voice was not known at the time of hearing it
and did not become known until nearly three months later, was
not sufficient to send the case to the jury and was not sufficient
to justify the jury in finding appellant guilty beyond a reason-
able doubt and to overcome the presumption of innocence with
which he was clothed. (Murphy v. Jack, 142 N. Y. 215; People
v. Crum, 272 N. Y. 348; People v. Strollo, 191 N. Y. 42; People v.
Dunbar Contr. Co., 215 N. Y. 416; Mankes v. Fishman, 163 App.
Div. 789; Woodruff v. Benesch, 112 Misc. 489; People v. McDon-
ald, 177 App. Div. 806; People v. Trybus, 219 N. Y.18.) IL. The
People failed to prove beyond a reasonable doubt the crime of
book-making as alleged in counts 20 and 22 of the indictment
and there was no adequate proof of all the elements of the
crime described in section 986 of the Penal Law. (People v.
Erickson, 302 N. Y. 461; Bamman v. Erickson, 288 N. Y. 133;
Watts v. Malatesta, 262 N. Y. 80; Ruloff v. People, 18 N. Y. 179;
People v. Cuozeo, 292 N. Y. 85; People v. Taddio, 292 N. Y. 488;
People v. Carroll, 54 Cal. App. 684; People v. Giro, 197 N. Y.
152; People v. Deacons, 109 N. Y. 374; People v. Popoff, 289
N.Y. 344.) IDI. There was no adequate proof of a conspiracy.
(People v. Friedlander, 280 N. Y. 487; People v. Winter, 288
N. Y. 418; Linde v. United States, 13 F. 2d 59; Kotteakos v.
United States, 328 U.S. 750.) IV. The trial court, in his charge
to the jury, failed to marshal the facts in this long and compli-
cated case and the jury was left to its own devices to sift out
and apply the evidence as best they could. This is error.
(People v. Odell, 230 N. Y. 481; People v. Buchalter, 289 N. Y.
181; People v. Fanning, 131 N. Y. 659; People v. Becker, 210
N. Y¥. 274; People v. Aszekler, 264 App. Div. 938; People v. Birch,
283 App. Div. 844; People v. Flynn, 290 N. Y. 220; People v.
Gonzales, 293 N. Y. 259; People v. Lupo, 305 N. ¥. 448.) V. The
motion of appellants to dismiss the indictment on the ground
that the evidence before the Grand Jury was insufficient as a
matter of law should have been granted.

John S. McGovern for Jules Kramer, appellant. I. The
appellant Kramer adopts the same argument as made in the

648 - |
ee

brief of appellants Joseph Lape and Samuel Abelson under
point one of the argument for appellant Lape. II. There was
no adequate proof of conspiracy. There was a complete failure
to establish the conspiracy as alleged in the indictment. No
single conspiracy was proven. And the court’s failure, in his
charge, to marshal the facts in this complicated case was preju-
dicial error. And the court’s failure to assist the jury when
informed that some of the jurors did not understand the defini-
tion of conspiracy constituted reversible error. III. There was
no adequate proof of all the essential elements of the crime
described in section 986 of the Penal Law. IV. Due process of
law was denied appellants and was not observed in the failure
to follow the provisions of section 813-a of the Code of Criminal
Procedure, and section 605 of the Federal Communications Act
was violated and the legislation designated as section 813-a of
the Code of Criminal Procedure is unconstitutional.

Abe Roth for Harry A. Rosen, appellant. It was error for
the court to receive evidence obtained by wire tapping (if the
rule of evidence of the Adams, Defore and Richter cases is
abandoned). (People v. Adams, 176 N. Y. 351; People v. Defore,
242 N. Y. 13; People v. Richter’s Jewelers, 291 N. Y. 161;
People v. Le Doux, 155 Cal. 5385; People v. Mayen, 188 Cal. 237;
People v. Bonzales, 20 Cal. 2d 165; People v. Kelley, 22 Cal.
2d 169; People ew rel. Kenny v. Adams, 292 N. Y. 65.)

John F. Dwyer, District Attorney (Merrill G. Windelberg
aud Leonard Finkelstein of counsel), for respondent. I. The
identification of defendants was sufficient beyond a reasonable
doubt. (Mack v. State, 54 Fla. 55; Commonwealth v. Hayes,
138 Mass. 185; Murphy v. Jack, 142 N. Y. 215; People v. Levis,
96 Mise. 513; People v. Strollo, 191 N. Y. 42; People v. Dunbar
Contr. Co., 215 N. Y. 416; Rimes v. Carpenter, 61 Mise. 614;
People v. McDonald, 177 App. Div. 806; Woodruff v. Benesch,
112 Misc. 489; Ogden v. People, 134 Ill. 599.) IL. The court
charged the jury fully, fairly and impartially in accordance
with all provisions of law. III. The evidence of the People
established the guilt of defendants beyond a reasonable doubt.
(People v. Suffolk Contr. Co., 171 App. Div. 645; People v.
Connolly, 253 N. Y. 330; People v. Peckens, 153 N. Y. 576.)
IV. The evidence before the Grand Jury was sufficient to return

Le 649

this indictment. (People v. Nitzberg, 287 N. Y. 183, 289 N. Y.
523.) V. The evidence established beyond a reasonable doubt
the usage and meaning of the language of defendants-appellants.
(People vs McDonald, 177 App. Div. 806.) VI. The court’s
discretion was properly exercised in fixing reasonable time
limitations for summations; no prejudice was sustained by the
termination of the summation of one defense counsel, who had
exceeded the time limitation and additional time granted.
(People v. Kelly, 94 N. Y. 526.) VII. The court admitted evi-
dence only within the scope of the indictment and the vulgarity
of defendants-appellants was their pattern of speech. VIII. The
transcripts were accurate and were properly given to the jury
during the playing of the recordings as an aid. IX. The cross-
examination of Lagala’s trial counsel, sworn as a witness by
the defense, was fair and proper and without prejudice.

Per Curiam. The judgments of conviction of the nine appel-
lants must be reversed and a new trial ordered for the following
reasons: (1) the proof of voice identification was inadequate
to send the question to the jury, (2) the People failed to prove,
prima facie, that appellants were engaged in a single conspiracy
to commit the crime of book-making, (3) the People failed to
prove, prima facie, that appellants, or any of them, committed
the crime of book-making, and (4) there was no explanation
given to the jury of the meaning of the jargon employed by
the telephone conversants.

As to (1): The People’s case against the appellants rests
upon the testimony of a special investigator for the District
Attorney who, pursuant to the authority of two Supreme Court
orders, listened in on over one hundred telephone conversations
during some two weeks’ time for six hours each day and then
identified the nine appellants and at least ten others, three
months later, as possessing voices he had previously heard in
such telephonic wire tapping. At the time he heard the voices
he did not know the persons to whom any of the voices belonged
except appellants Fromen and Becker. While the investigator
was listening in on the unfamiliar voices, he was busily making
pencilled notes and attempting to record the substance of the
conversations on the telephones.

650 a

There is, in this record, no individual identification of the
voices of the telephone conversants but, rather, a collective or
general description. Accordingly, on the state of this record
we hold, as a matter of law, that the investigator’s identifica-
tion of voices he heard on the telephones as belonging to
appellants falls below the standard necessary to rebut the pre-
sumption of innocence and to prove the guilt of the appellants
beyond a reasonable doubt.

As to (2): The indictment charges that appellants entered
into a single conspiracy to commit the crime of book-making.
However, the evidence against appellants does not spell out
the details of any specific or unified effort but rather a series
of disconnected transactions from which, at the most, inference
of several conspiracies may be drawn.

As to (3): The People failed to prove the corpus delicti of
the crime of book-making which is the acceptance of bets on a
professional basis ‘‘* * * upon the result of any trial or
contest of skill, speed or power of endurance of man or beast
* * *»? (Penal Law, § 986.) There is no proof in this record
that on the days set forth in the indictment (a) any horse races
were run, (b) the names mentioned in the conversations were
the names of horses, (¢) any such horses were entered or ran
in races on such dates, (d) any baseball games were played on
the dates designated, or (e) any boxing matches were staged
on such dates or that the names heard in the conversations were
the names of participants who engaged in such boxing matches.

As to (4): The tapped conversations were carried on in a
jargon, which the People claim is the jargon of book-makers.
At no time did the People qualify an expert to explain to the
court and jury the meaning of the expressions used. In the
course of the trial the Presiding Justice himself remarked that
the jargon ‘‘is unfamiliar to me, although the words are our
English language ’’. Despite this, the jury was given no expla-
nation of the meaning of the expressions in question but was
permitted to speculate as to their meaning.

The judgments should be reversed, the fines remitted and a
new trial ordered.

Corway, Ch. J., Dusmonp, Fup, Frozssen, Vaw Voorsis and
Burxr, JJ., concur; Dyz, J., taking no part.

Judgments reversed, etc.

pe

Josepx Giuckman, Appellant, v. Anrnony Fromuiion et al.,
Respondents.

Argued May 24, 1955; decided July 8, 1955.

651

Zz 653

a
De
Otho 8. Bowling and Marita A. Kelly for appellant.

Francis B. Froehlich and Henderson Morrison, Jr., for
respondents. .

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Dusmonp, Dyz, Fup, Frozssau,
Van Vooruts and Burxs, JJ.
De

Mazcus J. Youmans, as Administrator with the Will Annexed
of Conrap C. Mustox, Deceased, et al., Appellants, v. Stars or
New Yorx, Respondent. (Claim No. 30716.)

Mazcus J. Youmans, as Administrator with the Will Annexed
of Conrap C. Music, Deceased, et al., Appellants, v. Srars or
New Yors, Respondent. (Claim No. 30717.)

Argued April 14, 1955; decided July 8, 1955.

654 [| |
ere

Richmond D. Moot for appellants.

Jacob K. Javits, Attorney-General (Richard H. Shepp and
Henry 8. Manley of counsel), for respondent,

In each claim the appeal from the judgment— which consti-
tutes the appealable paper — dismissed, with costs, upon the
ground that no substantial constitutional question is presented.

Concur: Conway, Ch. J., Desmonn, Dyn, Fup, Fromssen and
Bourg, J ‘aw Vooruis, J., dissents in part in the following

opinion : .

a De 655

Van Voornis, J. (dissenting in part). There appears to
have been an issue of fact concerning whether the claimants
or the State owned the lands upon the southerly side of the Troy-.
Schenectady State Road, which are claimed to have been appro-
priated by the State in 1949 without payment of compensation
to the owners. Under such circumstances, I agree that no consti-
tutional question is presented and that those appeals should
be dismissed. It has been decided on conflicting evidence that
those claimants did not own the lands which they contend were
expropriated.

The situation is different, however, regarding the Conrad and
Frank Mesick parcels (claims Nos. 30716, 30717) abutting the
northerly side of this highway. The undisputed evidence shows,
as it seems to me, that they owned land which was taken from
them in 1949 without payment of compensation. Concededly,
nothing was paid for the reason that the State took the position
that it already had become the owner of the same land through
an earlier condemnation proceeding conducted in 1907. Inas-
much as it appears as matter of law that these claimants owned
these parcels, which were appropriated by the State in 1949
without payment of compensation, a substantial constitutional
question is presented. Section 7 of article I of the State Con-
stitution directs that ‘‘ Private property shall not be taken for
public use without just compensation.’? The evidence permits
no other conclusion than that this is what has been done in the
case of these two Mesick parcels. Consequently an appeal to
this court may be taken as of right under section 7 of article VI
of the Constitution and section 588 of the Civil Practice Act
upon the ground that a constitutional question is directly
involved. .

The fact that these two parcels were owned by claimants
and hence were expropriated by the State conclusively appears
from the condemnation map filed in the 1907 proceeding. If
these lands had been condemned in 1907 and were already owned
by the State, there was no reason on account of which the State
should again have taken proceedings to condemn ‘them in 1949.
The 1907 condemnation map (exhibit B in the present pro-
ceedings) contains a description by metes and bounds of the land
which was condemned at that time, the location of which is also
shown on that map. Some of the landmarks which are shown
on the 1907 condemnation map also appear upon the condemna-

656 Le |
eee

tion map of 1949. These established locations demonstrate that
more land is being appropriated in 1949 (for which nothing has
been paid) than was taken in 1907. Other evidence confirms this
fact.

For these reasons, the judgments in the case of claims Nos.
30716 and 30717 should be reversed, and those claims should be
remitted to the Court of Claims with directions to make suitable
awards.

Appeals dismissed, ete.
Ce

Jostrn A. Napoueran et al., Appellants, v. Stare or New Yore,
Respondent. (Claim No. 30732.)

Donatp J. Kuster et al., Appellants, v. Stars or Nuw Yorx,
Respondent. (Claim No. 30836.)

Mazous J. Youmans, as Administrator with the Will Annexed
of Conran C. Mzstox, Deceased, et al., Appellants, v. Srara
or New Yorr, Respondent. (Claim No. 30792.)

Marcus J. Youmans, as Administrator with the Will Annexed
of Conrap C. Musick, Deceased, et al, Appellants, v. Stara
or New Yor, Respondent. (Claim No. 30791.)

Marovs J. Youmans, as Administrator with the Will Annexed
of Conzap C. Musick, Deceased, et al., Appellants, v. Srarz
or New York, Respondent. (Claim No. 30837.)

Argued April 14, 1955; decided July 8, 1955.

657

Richmond D. Moot for appellants.
Jacob K. Javits, Attorney-General (Henry 8. Manley and
Richard H. Shepp of counsel), for respondent.

In each claim, the appeal from the judgment — which con-
stitutes the appealable paper— dismissed, with costs, upon the
ground that no substantial constitutional question is presented.
No opinion.

Concur: Conway, Ch. J., Desmonp, Dz, Fup, Froussen, Van
Vooruts and Burs, JJ.
ee
Tus Proriz or tHE Stats or New York, Respondent, v. Roperr
Youxon, Mu.ron Youxon, Nicpouss Youxon, Peter Youxon,
Dororuy Youxon, Buancuz Youxon and Heren Youron,
Appellants.

Argued June 9, 1955; decided July 8, 1955.

Jacob W. Friedman for appellants.
Joseph F. Gagliardi, District Attorney (M. Morton Edmis-
ton, Jr., and Douglas L. McGuire of counsel), for respondent.

Judgment affirmed; no opinion.

Concur: Conway, Ch. J., Dusmonp, Dyz, Funp, Frozssen, Van
Vooruis and Burks, JJ.

In the Matter of the Construction of the Will of Arruur C.
Jamus, Deceased. Amzrican Szamen’s Frrenp Socmry et al.,
Appellants; Jamas Founpation or New Yorx, Ine., et al.,
Respondents.

Argued May 24, 1955, decided July 8, 1955.

7 661

a
eer}

William C. Chanler, Knowlton Durham, Harold A. Schem-
inger and John B. Jessup for American Seamen’s Friend Society
and others, appellants.

Francis A. Brick, Jr., and Richard Y. Holcomb for Society
for Promoting the Gospel among Seamen of the Port of New
York, appellant.

A. Donald Mackinnon, respondent in person; Harrison Tweed,
William Eldred Jackson and Janet P. Kane for James Founda-
tion of New York, Inc., and others, respondents.

Order affirmed, with costs to all parties appearing separately
and filing separate briefs payable out of the estate. No opinion.

Concur: Conway, Ch. J., Desmonp, Dys, Fuup, FRozssen,
Van Voornis and Burxs, JJ.

In the Matter of the Claim of Franx Fron, Respondent. Carman
Sreamsure Corporation, Appellant; Epwarp Corsi, as Indus-
trial Commissioner, Respondent.

Argued April 21, 1955; decided July 8, 1955.

Edward C. Perkins, Ralph L. McAfee and Jack E. Brown
for appellant.

Jacob K. Javits, Attorney-General (Francis R. Curran and
Henry S. Manley of counsel), for Edward Corsi, as Industrial
Commissioner, respondent.

Seymour W. Miller, Israel G. Seeger and Irving A. Logue for
Seafarers International Union of North America, Atlantic and
Gulf District, A. F. of L., amicus curie, in support of respond-
ents’ position.

Order affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Dvyz, Funp, Frorssen,

Van Vooruis and Burxz, JJ.
|

Buarrice Spetuman, Appellant, v. Hunew Speruman,
Respondent.
Argued June 6, 1955; decided July 8, 1955.

|
ees
Philip L. Zenner for appellant.
Albert E. Bond and James M. Ryan for respondent.

Judgment affirmed, with costs. (See Le Fleur v. Vergilia, 280
App. Div. 1035.) No opinion.

Concur: Conway, Ch. J., Desmonp, Dyz, Fup, FRozssen,
Van Vooruis and Burks, JJ.

Tria Crrrms Construction Co., a Copartnership, Appellant,
v. Dan-Bar Conrractine Co., Inc., Defendant, and Mary-
tanp Casuauty Company, Respondent.

Argued May 25, 1955; decided July 8, 1955.

James B. Gitlite for appellant.

Wi . F. Conway for respondent.

Order affirmed, without costs. First question certified
answered in the negative. Second question certified answered
in the affirmative. No opinion.

Concur: Conway, Ch. J., Desmonn, Dys, Fup, Frousssn,
Vaw Voornis and Burs, JJ.

In the Matter of Lzon M. Freep, Appellant, against Sona Freep,
Respondent.

Argued June 7, 1955; decided July 8, 1955. -

Robert L. Callahan for appellant.

Samuel L. Greenberg and Emanuel Greenberg for respondent.

Order affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Dvz, Fup, Frozssey, Van
‘Vooruis and Burzs, JJ.

EE
Tue Prorie or tae Stare or New Yorx, Appellant, v. Max
Suarmo, Respondent.

Argued June 3, 1955; decided July 8, 1955,

be | a 671

eee!
Peter Campbell Brown, Corporation Counsel (Seymour B.

Quel and James J. Hurley of counsel), for appellant.
James Adikes and William E. Kennedy for respondent.

Order affirmed, no opinion. .

Concur: Conway, Ch. J., Desmonp, Dyn, Funp, Frozssen,
Vay Vooruis and Busxn, JJ.

Marxman Press, Inc., Appellant, v. Conumpra Prorurzs Corp.,
Respondent.

Argued June 1, 1955; decided July 8, 1955.

i PC : 673
Leer!
Henry Amster and Milton Lipson for appellant.
Ferdinand Pecora and Stuart G. Schwartz for respondent.

Judgment affirmed, with costs; no opinion.

Coneur: Conway, Ch. J., Desmonp, Dyz, Fuup, Fromssen.
Vaw Voornis and Burks, JJ.

Tus Propte or tan Stary or New Yors, Respondent, v.
Watiace H. Brown, Appellant.

Argued May 25, 1955; decided July 8, 1955.

Bernard Meyerson and Frank A. Jablonka for appellant.
Harry C. Brenner, District Attorney (Bernard C. Smith of
counsel), for respondent.

Per Curiam: The judgment of the County Court and the judg-
ment of the Court of Special Sessions, Town of Brookhaven,
Suffolk County, should be reversed and the information dis-
missed, upon the ground that the evidence is insufficient in
law to warrant a finding of guilt beyond a reasonable doubt.

Concur: Conway, Ch. J., Dusmonp, Dyn, Fun, Fronsszx,
Van Voornts and Burgn, JJ.

‘ Judgments reversed, ete.

Susan Gotpyer, Appellant, v. Hayus Gonpyer, Respondent.
Argued May 24, 1955, decided July 8, 1955.

676

Lowis B. Frutkin and Herbert Frutkin for appellant.
Sidney Roffman for respondent.

Order affirmed, without costs; no opinion.

Concur: Coxway, Ch. J., Dusmonn, Dyz, Fuup, Fronssex,
Van Voornis and Burks, JJ.

Tur Pzopis or raz Stats or New York ex rel. Frawx Laz, Alias
Aurrep Minvroto, Appellant, against J. Vernen Jackson, as
Warden of Clinton Prison, Defendant. Tum Propiz or THE
Stare or New Yorx, Respondent.

Argued April 13, 1955; decided July 8, 1955.

678

|
eee
Richard W. Coughlin for appellant.

Jacob K. Javits, Attorney-General (Manuel T. Murcia, Henry
S. Manley and Raymond B. Madden of counsel), for respondent.

Order affirmed; no opinion.

Coneur: Conway, Ch. J., Desmonp, Dz, Fup, Frozssen, Van
Vooruis and Burxs, JJ.

Tue Propis or ta Stare or New Yorx, Respondent, v. Joun
Francis Rocuz, Appellant.

Argued June 8, 1955; decided July 8, 1955.

679

Whitman Knapp, James D. C. Murray, Myron J. Greene,
Abraham J. Gellinoff, Carl J. Rubino and David Simon for
appellant.

Frank S. Hogan, District Attorney (Richard G. Denzer and
Leonard E. Reisman of counsel), for respondent.
Judgment of conviction affirmed; no opinion.
Concur: Conway, Ch. J., Desmonp, Ds, Funp, Frozssev,
Vaw Voornis and Burg, JJ.
Es

Tue Prorie or THE Stare or New Yorn, Respondent, v. Hunry
Hermowirz, Now Known as Huyry Hymns, Appellant.

Argued May 31, 1955; decided July 8, 1955.

680 P| | |

Edward T. Boyle for appellant.

Joseph F. Gagliardi, District Attorney (Warren J.
Schneider of counsel), for respondent.

Order affirmed; no opinion.
Concur: Conway, Ch. J., Dusmonp, Dyz, Fup, Fronsset,
Van Voornis and Burks, JJ.
be
Atprrt M. Crance et al., Appellants, v. Starz or New Yorx,
Respondent. (Claim No. 32176.)

Argued May 23, 1955; decided July 8, 1955.

Burns F, Barford for appellants.
_ Jacob K. Javits, Attorney-General (Richard H. Shepp and
Henry S. Manley of counsel), for respondent.

Judgment of the Appellate Division reversed and that of the
Court of Claims reinstated, with costs in this court and in the
Appellate Division, upon the ground that the weight of evidence
favors the findings and conclusions of the Court of Claims. No
opinion.

Concur: Conway, Ch. J., Dusmonp, Dyz, Fup, Froussen,
Van Voornis and Burks, JJ.

De
Apert Boris Lzastne Corporation, Respondent, v. Crry oF
New York, Appellant.

Argued June 2, 1955; decided July 8, 1955.

een! 685

Ce
rrr
Peter Campbell Brown, Corporation Counsel (Meyer Scheps,
Harry E. O’Donnell, Benjamin Offner and Frank W. Porcaro
of counsel), for appellant.
Lyle Evans Mahan and Louis Jay for respondent.

Judgment affirmed, with costs; no opinion.
Concur: Conway, Ch. J., Desmonn, Dyn, Fuup, Frozussen and
Van Voornis, JJ. Taking no part: Burgs, J.

a
In the Matter of 100 Parx Avenun, Appellant, against Wmiam
EB. Bovnanp et al., Constituting the Tax Commission of the
City of New York, Respondents. [100 Park Ave., Borough
of Manhattan.]

Argued May 26, 1955; decided July 8, 1955.

686 [| Le!

Oscar L. Tucker and Seymour M. Klein for appellant.
Peter Campbell Brown, Corporation Counsel (James J. Mc-
Gowan and Morris Handel of counsel), for respondents.

der of the Appellate Division reversed and that of Special

affirmed, with costs in this court and in the Appellate

Division, upon the ground that the weight of evidence supports
the determination of Special Term. No opinion.

Coneur: Conway, Ch. J., Desmonv, Dyz, Fuxp, Frorssen and
Van Vooruis, JJ. Taking no part: Burks, J.
a
Exse M. Axerrap, Appellant, v. Jonw Axznrap, Respondent.

Argued June 6, 1955; decided July 8, 1955.

688 Pe 7

Deere
Chester A. Lessler and Sol Kamenkowite for appellant.

Jack B. Weinstein, William Rosenfeld and J. E. Hollenberg
for respondent.

Judgment affirmed, without costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Dyn, Fuxp, Froussan, Van
Vooruis and Burzs, JJ.

Tux Propiz or roe Stats or New Yorn, Respondent, v. Seymour
Siszryp, Appellant.

Submitted May 31, 1955; decided July 8, 1955.

690 i

a
Deere
Selig Lenefsky for appellant.

Frank 8. Hogan, District Attorney (Harold Roland Shapiro
of counsel), for respondent.

Judgment affirmed; no opinion.

Coneur: Conway, Ch. J., Desmonn, Dyz, Fuup, Frorssen, Van
Vooruis and Burxz, JJ.

Lots G. MoCrennan, as Administratrix of the Estate of Frup
C. McCustuan, Sr., Deceased, Respondent, v. Crry or Burraio
et al., Appellants, et al., Defendants.

Argued April 11, 1955; decided July 8, 1955.

William B. Lawless, Jr., Corporation Counsel (Forbes F.
Dougherty of counsel), foe “appellants,
John B. Corcoran and William B. Mahoney for respondent.

692 | | |
ere

Appeal dismissed upon the ground that the question certified
is not decisive of the correctness of the decision of the Appellate
Division (Civ. Prac. Act, § 589, subd. 4, par. [b]). No opinion.

Concur: Conway, Ch. J., Desmonp, Dyz, Fux, Frozssen, Van
Vooruis and Burxs, JJ.

In the Matter of Dztma Srupros, Inc., et al., Appellants, against
Anvrew G. Cuausen, Jz., et al., Constituting the Board of
Education of the City of New York, et al., Respondents.

Argued May 24, 1955; decided July 8, 1955.

i

Arnold R. Streit, Aaron Benenson and Harold G. Israelson
for appellants.

Peter Campbell Brown, Corporation Counsel (Edward J.
McLaughlin and Seymour B. Quel of counsel), for respondents.

Order affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonpv, Dyz, Funp and Van
Vooruis, JJ.; Frozsset, J., dissents and votes to reverse upon
the reasoning of the dissenting opinion in the Appellate Division.
Taking no part: Burxs, J.

EEE
Wauuitam E. Annstet et al., Appellants, v. Lzonarp Price et al.,
Respondents, and Wit1am H. Anwsrer et al., as Executors
of Exsm N. Annstern, Deceased, Intervenors-Appellants.
Argued May 26, 1955; decided July 8, 1955.

696 eee!

Chester T. Lane and Walter E. Beer, Jr., for appellants and
intervenors-appellants.
Jack H. Hantman for respondents.

Judgment affirmed, with costs; no opinion.

Concur: Coxway, Ch. J., Dusmonp, Dyz, Fup, Frozssen,
Vaw Voornis and Burss, JJ.

Kansas Pacxrye Oo., Inc., Respondent, v. Crry or New York
et al., Appellants.

Argued May 25, 1955; decided July 8, 1955.

Campbell mn, r r C (Anthony
Curreri and Seymour B. Quel of counsel), for appellants.
N. H. Elman for respondent.

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Drsmonp, Ds, Furp, Frorssen and
Van Voorais, JJ. Taking no part: Burks, J.

Ce
Lee
Jutus Hurwrrz et al, Appellants, v. Wuasam Griricumr,
Respondent.

Argued May 23, 1955; decided July 8, 1955.

Herbert N. Bobrow for appellants.
Irvin Husin and I. Stanley Stein for respondent.

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Dusmonn, Drs, Funp, Frozssen,
Vaw Vooruts and Burxg, JJ.

Exsm §. Forrerron, Appellant, v. Crry or ScHmwzorapy,
Respondent.

Water A. Furzerron, Jz., Appellant, v. Crry or Scumnzcrapy,
Respondent.

ued June 7, 1955; decided July 8, 1955.

a Le 703

James A. Leary, Walter A, Fullerton, Charles W. Aussicker,
William L. Ford and Francis J. Keehan for appellants.

Charles Ward Brown for respondent.

Donald A. Walsh and Harold W. Weidner for New York State
Conference of Mayors and Other Municipal Officials, amici curiae,
in support of respondent’s position.

Judgment affirmed, with costs; no opinion.

Coneur: Conway, Ch. J., Desmonp, Dz, Fup, Frozssen and
Van Vooruis, JJ. Taking no part: Burxs, J.

In the Matter of the Construction of an Indenture of Trust
Made by McAnaxanper D. Ryan. Guaranty Trust Company
or New York et al., as Trustees, et al., Respondents; McAnex-
anper D, Ryan, Individually and as Trustee, Appellant.

Argued June 7, 1955; decided July 8, 1955.

105

James N. Vaughan, Francis J. Rogers and Paul Saurel for
appellant.

Walter D. Fletcher, Andrew Y. Rogers and Standish F.
Medina for trustees, respondents.

Edward V. Loughlin, as guardian ad litem for Virginia Ogilvy
and others, infants, and for unknown persons, respondents.

Order affirmed, with costs to all parties appearing separately
and filing separate briefs payable out of the trust estate; no
opinion.

Concur: Conway, Ch. J., Dusmonp, Dyn, Fuup, Frozssnn.
Van Vooruis and Bursz, JJ.

In the Matter of the Arbitration between Lovis Coorzr Hats,
Inc., Appellant, and Morny Kaprs et al., Respondents.

Argued May 31, 1955; decided July 8, 1955.

Benjamin Cooper for appellant.
Julius Haimowite for respondents.

Order affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Dyn, Fur, Fronssen, Van
Voornts and Burxg, JJ.

a 7
errr!
In the Matter of the Claim of Karuryn Sizaror, Respondent,

against Nartowan Crry Banx et al.; Appellants. Worxmen’s
Compensation Boarp, Respondent.

Argued May 26, 1955; decided July 8, 1955.

F. Walter Bliss for appellants.

Jacob K. Javits, Attorney-General (Harry Pastor, Henry 8S.
Manley and Roy Wiedersum of counsel), for Workmen’s Com-
pensation Board, respondent.

Order affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Dyn, Funp, Froussen and
Burks, JJ. Vaw Vooruis, J., dissents and votes to reverse and
to dismiss the claim on the ground that there is no substantial
evidence to support the award.

In the Matter of the Arbitration between Spectrum Fasrics
Corporation, Appellant, and Mat Srreear Fasnions, Ivo.,
Respondent.

Argued May 23, 1955; decided July 8, 1955.

711

Bernard A. Saslow and Harold A. Axel for appellant.
Robert W. Adler and Ruben Schwartz for respondent.
Order affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Dismonp, Dyn, Funp, Van Voornis
and Burgs, JJ. Frozsset, J., dissents and votes to reverse upon
the dissenting opinion of Cattanan, J., in the Appellate Division.

Le
Awntz P. Gurevircn, Individually and as Administratrix of the
Estates of Max Gurevirca and Another, Deceased, Respond-
ent, v. Stare or New Yorx, Appellant. (Claim No. 31495.)
Lxo Brum et al., Respondents, v. State or New Yors, Appellant.
(Claim No. 31784.)
Joun N. Foumar, Respondent, v. Starz or New Yorx, Appellant.
(Claim No. 31828.)
Wrirorp Cxavers, Respondent, v. Stars or New York, Appel-
lant. (Claim No. 31829.)

Argued June 1, 1955; decided July 8, 1955.

Jacob EK. Javits, Attorney-General (John R. Davison and
Henry S. Manley of counsel), for appellant.

Lewis C. Ryan and John F. Gates for Annie P. Gurevitch,
respondent.

Sigmund Schwarte and David Perman for John N. Folmar
and another, respondents.

Benjamin A, Quitt for Leo Blum and another, respondents.
Judgments affirmed, with costs; no opinion.

Coneur: Conway, Ch. J., Funp, Frousser, Van Voornis and
Burks, JJ. Dzsmonp and Dvs, JJ., dissent and vote to reverse
and to dismiss the claims.

—

Buay Ross, Appellant, v. Summa Ross et al., Respondents.
Buy Ross, Appellant, v. Sa=ma Rosz, Respondent.

Argued May 25, 1955; decided July 8, 1955.

Oswald Vischi for appellant.
Myron J. Greene and Martin Greene for respondents.

Per Curiam. Tn this consolidated action commenced by a
husband against his wife, plaintiff seeks to impress a trust as
to all property received and held by the wife during their mar-
ried life, to the extent of one half thereof, and for an accounting
and related relief; also, plaintiff seeks to impr a lien of
$6,000 upon certain premises in Queens County, in which they

| Le 715

resided, for expenses incurred by plaintiff for taxes paid and
for the maintenance and repair of the building thereat during
their married life. The complaint in said part of the consoli-
dated action alleges an agreement between the parties, made at
an unspecified time during their married life, “that * * *
plaintiff would have a lien on said premises equal to the sum
of money so expended’. The Supreme Court at Special Term
dismissed these complaints on the merits, holding that defend-
ant’s affirmative defense in the nature of a release was sustained
by the proof, and the Appellate Division has affirmed.

We think that the rather barren record before us, consisting
of the merely formal testimony of but one witness, several
exhibits and much colloquy, is inadequate to support a holding
that defendant has established a release of the aforesaid actions.

The judgment dismissing the complaint should be reversed
and a new trial granted, with costs to abide the event.

Conway, Ch. J., Desmonp, Dyz, Fuup, Frozssez, Van Voorais
and Burks, JJ., concur.

The judgment of the Appellate Division and that of the Special
Term should be reversed, with costs in all courts to abide the
event, and the matter remitted to Special Term for further pro-
ceedings in accordance with the opinion herein.

Tux Prorie or tHE State or New Yoru, Respondent, v. Mumunp
C. Buzutser, Appellant.

Argued June 9, 1955; decided July 8, 1955.

Leo E. Sherman for appellant.

Frank 8. Hogan, District Attorney (Paul A. Stone, Charles
W. Manning and Sidney M. Fruhling of counsel), for respondent.

Judgment affirmed; no opinion.
Concur: Conway, Ch. J., Desmonp, Dyn, Funp, Frozssen, Vaw
Vooruis and Burxn, JJ.
PC

Srrmar Garace Corr., Appellant-Respondent, v. Rink Reary
Corroration, Respondent-Appellant, et al., Defendants.

Argued May 31, 1955; decided July 8, 1955.

719

Otis Mark Waters for appellant.

Marcus Klein and Benjamin A, Haristein for respondent.

Judgment affirmed, without costs; no opinion.

Concur: Conway, Ch. J., Dusmonp, Dyz, Fup, Frozssen,
Van Vooruis and Burgas, JJ.

Motion to dismiss appeal of Rink Realty Corporation denied.

Motion by defendant Rink Realty Corporation to discontinue

appeal granted.
ee

In the Matter of the lection of Directors of R. Hor & Co., Ino.
New P. Curnom, Appellant; Howarp E. Rein et al.,
Respondents.

Argued June 3, 1955; decided July 8, 1955.

Neil P. Cullom, in person, and Robert D. Cole for Neil P.
Cullom, appellant.
AH ecker and William E. Willis for respondents.
Order affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Dyz, Funp, Frozsse1,
Van Vooruis and Burxz, JJ.

RNELL University, Appellant-Respondent, v. Mussina
Baxurms, Inc., Respondent-Appellant.

Argued June 3, 1955; decided July 8, 1955.

124, Le Le!
een

Robert E. Coulson, Forbes D. Shaw, Harry G. Henn, J. William
Robinson and John V. Thornton for appellant-respondent.

Herbert Plawt and Charles E. Scribner for respondent-
appellant.

Judgment affirmed, without costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Dyz, Forp and Burrs, JJ.
Frozsssu and Van Vooruis, JJ., dissent and vote to reverse and
to reinstate the judgment of Special Term,

a
In the Matter of Mapison, Incorrorarep, Appellant, against
Josepxh D. MoGouprick, as State Rent Administrator,
Respondent.
Argued May 31, 1955; decided July 8, 1955.

Leon Liner for appellant.
Harold Zucker and Hortense W. Gabel for respondent.

Order affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Dusmonp, Dyz, Funp, Fronssen,
Vay Voorzis and Burxs, JJ.

Errors Mancuso, Appellant, v. Boarp or Epucation or ScHENEC-
apy Orry Scxoon District, Respondent.

Argued April 27, 1955; decided July 8, 1955.

728 es

Ettore Mancuso, appellant in person.

Orrin G. Judd, Abraham 8. Clayman and Earle K. Moore for
respondent.

Daniel E. Kelly for Board of Education of the Rye City School
District, amicus curiae, in support of respondent’s position.

Jacob K. Javits, Attorney-General (Henry 8. Manley, Ruth
Kessler Toch and Milion Alpert of counsel), in his statutory
capacity under section 71 of the Executive Law.

Judgment affirmed, with costs; no opinion.
Concur: Conway, Ch. J., Desmonn, Dyz, Funp, Frozssen,
Van Vooruis and Burgz, JJ.

Masut L. Sraw et al., Doing Business as Suaw’s Genurat Stor,
Respondents, v. Home Murvuat Firs Insurance Company et al.,
Appellants.

Argued June 1, 1955; decided July 8, 1955.

Gustav P. Blaustein for appellants.
Lawson Barnes for respondents.

Judgment affirmed, with costs; no opinion.
Coneur: Conway, Ch. J., Dusmonp, Dys, Fup, Frorsset,
Van Vooruis and Burge, JJ.

|
In the Matter of B & G Construction Corp. et al., Respondents,
against Boarp or Appzazs or TH VitLacE or Amrryviiie et al.,
Appellants.

Argued June 6, 1955; decided July 8, 1955.

Edward R. Phillips for appellants.
Sydney Hoffman and Jacob Bendersky for respondents.

Order of the Appellate Division and that of Special Term
reversed, petition dismissed and determination of respondent
board reinstated, with costs in all courts. The board’s denial
of the certificate of occupancy cannot be overruled by the courts
since that denial was not arbitrary but based on sufficient proof
of violation of a valid local zoning ordinance (see Matter of
Larkin Co. v. Schwab, 242 N. Y. 330, 335; Matter of Kopec v.
Buffalo Brake Beam-Acme Steel & Malleable Iron Works, 304
N. Y. 65, 71; Matter of Green Point Sav. Bank v. Board of Zoning
Appeals, 281 N. Y. 534, 5389). The prior issue to petitioner of a
building permit could not ‘‘ confer rights in contravention of the
zoning laws ’’ (City of Buffalo v. Roadway Tr. Co., 303 N. Y.
458, 463). No opinion.

Concur: Conway, Ch. J., Desmonp, Dyn, Funp and Burxs, JJ.
Frozssex and Van Vooruis, JJ., dissent and vote to affirm.

Epwarp Smirsx et al., Respondents-Appellants, v. Communiry
Sywacocus et al, Respondents, and Harsor Acres Reauty
Corroration, Appellant.

Argued June 1, 1955; decided July 8, 1955.

Le a 735
rye

Clarence F. Corner and Frederick Weisbrod for Harbor Acres
Realty Corporation, appellant.

Clarence F. Corner and Frederick Weisbrod for Community
Synagogue, respondent.

Carlo F. Salvador for respondents-appellants.

Judgment affirmed, without costs; no opinion.

Concur: Conway, Ch..J., Desmonp, Dyn, Funp, Frozssen,
Vaw Vooruis and Burxs, JJ.

a
MicHazt Razasco, Respondent, v. Town or Greensurcx et al.,
Appellants.
Argued May 27, 1955; decided July 8, 1955.

738 i

Davis M. Zimmerman for Greenburgh Housing Authority,
appellant.

Alvin M. Suchin for Town of Greenburgh and others,
appellants.

Alfred D. Fredericks for respondent.

Judgment affirmed, without costs. We do not place our
affirmance upon the ground that reconsideration by the town
board could not be had without a new notice of hearing. No
opinion.

Concur: Conway, Ch. J., Dusmonp, Dyz, Fuio, Fronssen,
Vaw Vooruis and Burg, JJ.

|
In the Matter of Asco Equrries, Inc., Appellant, against Jossex
D. MoGotprrcr, as State Rent Administrator, Respondent.

Argued May 27, 1955; decided July 8, 1955.

Morris Wagman and Irving Sheinfeld for appellant.

Beatrice Shainswit and Hortense W. Gabel for respondent.

Order affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Dusmonn, Dyu, Fup, Frorssen and
Bourxz, JJ. Vaw Vooruis, 5, dissents and votes to reverse and
to reinstate the order of Special Term.

en! Le 41
Dr!

Cuarims OxnLENscuLacrr, Respondent-Appellant, v. Sours
Burrato Ramway Company, Appellant, and Raupz D. Youna
et al., Individually and as Copartners Doing Business as
Youne, Youne, Kocz, Raszman & Everrnenam, Respondents.

Francus M. Lxons, as Administratrix of the Hstate of Gmratp R.
Lzoyg, Deceased, Respondent-Appellant, v. Sours Burrano
Ramway Company, Appellant, and Harotp Koos et al., Indi-
vidually and as Copartners Doing Business as Youne, Youne,
Koon, Raszmay & Hvermvenam, Respondents.

Ermere Srivestari, as Administrator of the Estate of Grxo
Stuvesraii, Deceased, Respondent-Appellant, v. Sours Bur-
Fao Rampway Company, Appellant, and Haroxp Koon et al.,
Individually and as Copartners Doing Business as Youne,
Youne, Koou, Raszmay & Evertnenam, Respondents. .

Mariano Rurrivo, Respondent-Appellant, v. Sourz Burrato
Ramway Company, Appellant, and Hazotp Koon et al., Indi-
vidually and as Copartners Doing Business as Youne, Youne,
Koon, Raszman & Hvertnenam, Respondents.

Argued June 6, 1955; decided July 8, 1955,

144. P|
ees)

Albert R. Connelly, Francis T. Findlay, Paul H. Reid, Jr., and
Donald H. Rivkin for appellant.

Harry J. Kelly for respondents.

Sydney C. Schweitzer for Frances M. Leone, respondent-
appellant.

Sydney C. Schweitzer and Samuel C. Cellino for Exmete
Silvestrini and another, respondents-appellants.

William J. Flynn, Jr., and William J. Flynn for Charles
Ohlenschlager, respondent-appellant.

Judgments affirmed, with costs; no opinion.

Concur: Conway, Ch. J.. Dusmonp, Dyn, Fup, Fronssen,
Van Vooruis and Burg, JJ.
Es
In the Matter of Oxrorp Group-Morau Re-Armament, MRA,
Inc., Appellant, against Hocarra 8. Sweer et al., Constituting
the Board of Review of the Town of New Castle, Respondents.
In the Matter of Oxrorp Grovp-Morat Re-Armament, MRA,
Ino., Appellant, against Maynarp Auuen et al., Constituting
the Board of Assessors of the Town of North Castle, Respond-
ents.

Argued April 19, 1955; decided July 8, 1955.

Lester D. Stickles, Joseph Scott and J. Francis Hayden for
appellant.

Roderick B. Travis, Town Attorney, for Hogarth 8. Sweet and
others, respondents.

William Scott, II, for Maynard Allen and others, respondents.

Orders of the Appellate Division reversed and those of Special
Term reinstated, with costs in this court and in the Appellate
Division, upon the ground that the weight of the evidence sup-
ports the findings of the Official Referee that the premises of
the appellant in both towns are used exclusively for exempt
purposes, but that appellant is not a ‘‘ family ’’ or a “‘ church or
other place of worship ’’, so as to conform to the zoning ordi-
nance of the Town of New Castle. We have considered the other
points raised and conclude that the Official Referee reached the
correct result. No opinion.

Concur: Conway, Ch. J., Desmonp, Dyn, Funp, Froxssan,
Vaw Vooruis and Burxs, JJ.

a
Dre
Maz L. Lecuyer et al, Respondents-Appellants, v. Franc

Lucuner, Appellant-Respondent.
Argued June 3, 1955; decided July 8, 1955.

749

Kenneth J. Mullane for appellant-respondent.

Noel Rubinton and Edward Lazansky for respondents-
appellants.

Judgment affirmed, without costs; no opinion.

Concur: Conway, Ch. J., Dusmonp, Dyz, Fuup, Frogssen,
Vaw Vooruis and Burs, JJ.
De
Frepa K. Berczr, Appellant, v. Crry or New York et al.,
Respondents.
Submitted July 8, 1955; decided July 8, 1955.
Motion to resettle order of the Court of Appeals dated June
2, 1955, denied. [See 308 N. Y. 830; 308 N. Y. 1001.]
a

Cenrrat Pusiisaine Company, Inc., Appellant, v. GamnELiE
Wirrman et al., Doing Business as TV Sportrenr Pusrica-
tions, Respondents.

Submitted October 18, 1954; decided July 8, 1955.

David N. Fields for motion.
Francis Finkelhor opposed.

Motion to withdraw appeal granted.

750 Ye

a
eee
Erase. Fewman, Plaintiff, v. Berwarp Rice Sons, Ive., Defend-

ant and Third-Party Plaintiff, Josspa B. Ferman, Third-
Party Defendant and Fourth-Party Plaintiff-Appellant, v.

Lizrty Murvat Insurance Company, Fourth-Party Defend-
ant-Respondent.

Submitted July 8, 1955; decided July 8, 1955.

David G. Mendelsohn for motion.

Albert P. Thill opposed.

Motion dismissed, with $10 costs and necessary printing dis-
pursements, upon the ground that the order sought to be appealed
from does not finally determine the action within the meaning
of the Constitution.

Frep ©. Forpa, Appellant, v. Juntus A. Carrer, Respondent.
Submitted July 8, 1955; decided July 8, 1955.

| [| 751

Morris Simon for motion.
George F. Curley opposed.

Motion to dismiss appeal (1) insofar as it is based upon appel-
lant’s failure to file an undertaking, granted, with costs and $10
costs of motion, unless within fifteen days appellant serves and
files the required undertaking on appeal and pays $10 costs, in
which events motion denied; (2) insofar as it is based upon
appellant’s failure to serve and file the record on appeal, denied,
without costs, upon the ground that rules I and VI of the Rules
of the Court of Appeals prescribe the proper remedy.

Marto Houprne Corr., Appellant, v. 8. J. Buums, Ive.,
Respondent.
Submitted July 8, 1955; decided July 8, 1955.

Motion to amend remittitur granted and remittitur amended
to add that costs in the Court of Appeals and in the Appellate
Division abide the event. [See 308 N. Y. 570.]

Tomas P. Mason, Appellant, v. Unrrep Stars Livzs Company,
Defendant, and T. Hocan & Sons, Inc., Respondent.

Submitted July 8, 1955; decided July 8, 1955."

Donald S. Sherwood for motion and in opposition to cross
motion.

Frank A. Fritz for cross motion and in opposition to appel-
lant’s motion.

Motion to have appeal heard upon one copy of the record
before the Appellate Division granted.
Cross motion to dismiss appeal denied.

In the Matter of Hpwarp Doveusrry et al., Appellants, against
Scare Harness Racine Commission et al., Respondents.

Submitted July 8, 1955; decided July 8, 1955.

| 153

Sidney O. Raphael for motion.
Jacob K. Javits, Attorney-General (Samuel A, Hirshowitz of
counsel), opposed.

Motion on behalf of petitioner-appellant Dougherty for a
stay denied.
P|

In the Matter of the Accounting of Banyxzrs Trust Company,
as Trustee under the Will of Isaac B. Hosrorp, Deceased,
Respondent. Jamus M. Enexn et al., Appellants; Perur K.
Ewes et al., Respondents.

Submitted July 8, 1955; decided July 8, 1955.
Motion for reargument denied, with $10 costs and necessary
printing disbursements. [See 309 N. Y. 23.]
De

In the Matter of 116 Hasr 57rm Sreunt, Ino., Appellant.
Submitted July 8, 1955; decided July 8, 1955.

Motion for reargument denied, with $10 costs. [See 308
N. Y¥. 1046.]
De

In the Matter of the Estate of Guo Pzrwisi, Deceased. Romano
Pzrnist, as Administrator of the Estate of Gummo Prryist,
Deceased, Appellant; Frowra Maar, Respondent.

Submitted July 8, 1955; decided July 8, 1955.

754 Ye

Donald N. Salvetti for motion.
No one opposed.

Motion granted and Donald N. Salvetti, Esq., 2023 Milton
Avenue, Solvay, New York, assigned as counsel to appellant

Pernisi.

In the Matter of the Accounting of JosspH Porizzo, as Com-
mittee of the Estate of Musym Potazzo, an Incompetent.
Harrison B. Wrieut, Individually and as Executor of Josnpx
Poumzzo, Deceased, et al, Respondents; Acrms W. Tymann,
as Administratrix of the Estate of Murwim Porizzo, Deceased,
Appellant.

Submitted July 8, 1955; decided July 8, 1955.

Motion for reargument or, in the alternative, to amend the
remittitur denied. [See 308 N. Y. 517.]

In the Matter of Mortum. Rosensere, Appellant, against Crry or
New Yorx, Respondent.

Decided July 8, 1955.

Reargument directed at the October, 1955, session of the Court
of Appeals. If the order be reversed following reargument, and
the delayed filing of petitioner-appellant Mollie Rosenberg’s
controverted claim on November 16, 1954, be thereby sanctioned,
then for all purposes, including the purpose of any action com-
menced by said appellant against the City of New York within
the time limited by law, the claim shall be deemed to have been
duly filed on November 16, 1954. [See 308 N. Y. 965.]

Le 155
ee een)

Enizazrta O’Connor, Appellant, v. Onrve Parsrrsian et al.,
Respondents.

Submitted July 8, 1955; decided July 8, 1955.

Maurice J. McCarthy, Jr., for motion.
Bernard Meyerson and Olin §. Nye opposed.

Motion to have appeal heard upon an abridged record granted
on condition that the only issue to be presented to the Court of
Appeals on appeal is the power of the Appellate Division to
modify the order of the trial court granting a new trial, as it
did in this ease. The abridged record shall consist of the notice
of appeal to the Court of Appeals and the order, judgment and
opinion of the Appellate Division.

156

Tus Propis or tan Stare or New Yoru, Respondent, v. Danien
AszEarn, Appellant.

Submitted July 8, 1955; decided July 8, 1955.

Irving Novis for motions.
No one opposed.

Motion to have appeal heard upon the original record and
typewritten briefs granted.

Motion for enlargement of time granted and case set down for
argument during the October, 1955, session of the Court of
Appeals.

—

Tus Propis or tap Srarz or New Yorx, Respondent, v. Jamus
BraxusLes, Onartes Bropericx and Tuomas Soxoisx1, Appel-
lants.

Submitted July 8, 1955; decided July 8, 1955.

| | 157

Charles J. McDonough for motion.
No one opposed.

Motion granted and case set down for argument during the
October, 1955, session of the Court of Appeals.

Tru Proris or tos Stars or New Yorx, Respondent, v. Wmitam
D. Caraceiiz, Appellant.

Submitted July 8, 1955; decided July 8, 1955.

William D. Caracelli, in person, for motion.
No one opposed.

Motion granted and the case set down for argument during
the October, 1955, session of the Court of Appeals,

Tue Pzopie or tHE State or New York, Respondent, v. Jonn
D. Coors and Frevericx Scunupr, Appellants.

Submitted July 8, 1955; decided July 8, 1955.

John P. Sweeny for motions.

Frank S. Hogan, District Attorney, for the People of the State
of New York.

Motions granted and case set down for argument during the
November, 1955, session of the Court of Appeals.

Tux Psoris or tHe Stare or New Yorx, Respondent, v. Micwann
Dv Byrx, Appellant.

Submitted July 8, 1955; decided July 8, 1955.

159

Nancy Carley for motion.

Daniel V. Sullivan, District Attorney (John B. Lee of counsel),
for the People of the State of New York.

Motion granted and case set down for argument during the
October, 1955, session of the Court of Appeals.

Tue Pzopis or tHe Starz or New York, Respondent, v. Davw
Jacoss, Appellant.

Submitted July 8, 1955; decided July 8, 1955.

760 i

a
ee
Arnold M. Leibowitz for motion.
Frank 8. Hogan, District Attorney, for the People of the State
of New York.
Motion granted and case set down for argument during the
October, 1955, session of the Court of Appeals.

Tus Prope or ran Starz or New Yoru, Respondent, v. Turoporn
Jonzs, True Name Hucenn Lzvencsr, Alias Hueuns Lucas,
Appellant.

Submitted July 8, 1955; decided July 8, 1955.

Theodore Jones, in person, for motions.

Frank S. Hogan, District Attorney, for the People of the State

of New York.

Motion to have appeal heard upon the original record and for
assignment of counsel granted and Milton Schilback, Eisq., 70
Pine Street, New York City, assigned as counsel to defendant
on the appeal herein.

Motion for enlargement of time granted and case set down for
argument during the October, 1955, session of the Court of
Appeals.

ee 761

Tue Pzopie or tan State or Nuw Yorn, Respondent, v. Aiviy B.
Lary, Appellant.

Submitted July 8, 1955; decided July 8, 1955.

Alvin EH, Lain, in person, for motion.
No one opposed.

Motion granted and Vincent L. Rosato, Esq., 16 Court Street,
Brooklyn, New York, assigned as counsel to defendant on
the appeal herein.

|

Trp Pzopis or tan Stats or New Yorx, Respondent, :. Tuomas
R. Law, Appellant.

Submitted June 6, 1955; decided July 8, 1955.

Motion for reargument denied. [See 308 N. Y. 658; 308 N. Y.
913.)

762 [|
Les

Tue Pzoris or tas Starz or Nuw Yorx, Respondent, v. Czonrra
Leverzz, Appellant.
Tue Porte or raz Starm or New Yorx, Respondent, v. Daw
Castrito, Appellant.
Tue Peoria or tue Stats or New Yorn, Respondent, v. Oscar
Bicxex, Appellant.
(Consolidated Appeals.)

Submitted July 8, 1955; decided July 8, 1955.

Raymond Keran O’Brien for motion,
No one opposed.
Motion granted and case set down for argument during the
October, 1955, session of the Court of Appeals.
Le

Tur Prore or THE State or New Yorx, Respondent, v. Luster
Muynrs, Appellant.
Submitted July 8, 1955; decided July 8, 1955.

763

David Farber for motions.
TL. Vincent Quinn, District Attorney (George J. Regan of
counsel), for the People of the State of New York.

Motions granted and case set down for argument during the
October, 1955, session of the Court of Appeals.

Es
Tue Prope or tHE Starz or New Yors, Respondent, v. Louis
Otrver, Appellant.
Submitted July 8, 1955; decided July 8, 1955.

John J. Ryan for motion.

Daniel V. Sullivan, District Attorney (John B. Lee of counsel),
for the People of the State of New York.

Motion granted and case set down for argument during the
October, 1955, session of the Court of Appeals.

Tue Poruz or tHe Stats or New Yorx, Respondent, v. Vincrnr
Parsewoster, Appellant.

Submitted July 8, 1955; decided July 8, 1955.

Sidney G. Sparrow for motion.

No one opposed.

Motion granted and case set down for argument during the
October, 1955, session of the Court of Appeals.

a
Tum Psorzz or tHe Starz or New Yorn, Respondent, v. Howarp
Prosser, Appellant.

Submitted July 8, 1955; decided July 8, 1955.

P| 165

PC
Dee |
John B. Corcoram for motion.

No one opposed.

Motion granted and case set down for argument during the
October, 1955, session of the Court of Appeals.

EE
Tus Prope or tae Starz or New Yorx, Respondent, v.
CuristopHer Romano, Appellant.
Submitted July 8, 1955; decided July 8, 1955.

Motion for reargument of motion to dismiss appeal deniva.
[See 308 N. Y. 1008.]
Pe

Tue Porte or tar Srare or New Yorn, Respondent, v. Brrr
Scurezer, Appellant.

Submitted July 8, 1955; decided July 8, 1955.

Bruce H. Willner for motion.
Frank 8. Hogan, District Attorney (Paul A. Stone of coun-
sel), for the People of the State of New York.

Motion granted and case set down for argument during the
October, 1955, session of the Court of Appeals.

166 mz

| |

Tus Pzopis or tHe Stare or New Yor, Respondent, v. Frep-
zrick Spmiman, Alias Rosert SunpeRLanp, Freperick Leo
Spetiman and Frep Wui1aMs, Appellant.

Submitted July 8, 1955; decided July 8, 1955.

John McKim Minton for motion.
No one opposed.
Motion granted and case set down for argument during the

October, 1955, session of the Court of Appeals.
Ce

Tue Pzopiz or tos Sats or New Yorn, Respondent, v. Sprive-
FireLD DeveLopment Company, Ino., Appellant.
Tue Porte or tan Starz or New Yorx, Respondent, v. Hn
Dervetopment Company, Ino., Appellant.
Tu Psorts or tue Stare or New Yor, Respondent, v. Sprive-
FreLD Devstopment Company, Inc., Appellant.
Tue Pzoris or tas Stats or New York, Respondent, v. Hun
Drvetopment Company, Ino., Appellant.
Tue Propzz or tHe Stars or New Yorx, Respondent, v. CHarLEs
Rosen, Correct Name Cum Roszensiarr, Appellant.
Tur Pzopiz or Tau Stats or Naw Yorx, Respondent, v. Marcus
Rerrer, Appellant.
Submitted July 8, 1955; decided July 8, 1955.

167

Edward H. Freiberger for motion.
T. Vincent Quinn, District Attorney (George J. Regan of
counsel), for the People of the State of New York.

Motion granted and case set down for argument during the
October, 1955, session of the Court of Appeals.

a
Tun Prorzz or tap Starz or New Yorx, Respondent, v. Rosser
. Ware, Appellant.

Submitted July 8, 1955; decided July 8, 1955.

768

Robert White, in person, for motions.

Frank S. Hogan, District Attorney, for the People of the State
of New York,

Motion to have appeal heard upon the original record and for
assignment of counsel granted and Milton Schilback, Hsq.,
70 Pine Street, New York City, assigned as counsel to defendant
on the appeal herein.

Motion for enlargement of time granted and case set down for
argument during the October, 1955, session of the Court of

Appeals.
De

Tue Ports or tau Starn or New Yorx, Respondent, v. Dowanp
B. Winsurp, Appellant.

Submitted July 8, 1955; decided July 8, 1955.

John W. Condon, Jr., for motion.
No one opposed.

Motion granted and case set down for argument during the
October, 1955, session of the Court of Appeals,

769

Dovexas Rieter et al., Respondents, v. Doveras F. Srorzr et al.,
Appellants, et al, Defendant.

Submitted July 8, 1955; decided July 8, 1955.

Lawrence E. Bobker for motion.
Walter H. Liebman opposed.

Motion for a stay granted upon condition that appellants
neither cause nor permit ‘‘ Believe It or Not, Inc.”’ to make any
payments to appellants, or their attorneys or agents, pending
the hearing and determination of the appeal herein except that
the sum of $997 per month be paid to appellant Storer to defray
the actual expenses of operating the business of the aforesaid
corporation. Case set down for argument during the October,
1955, session of the Court of Appeals.

Axserr G. Surre, Appellant, v. Starz or New Yorx, Respondent.
Submitted July 8, 1955; decided July 8, 1955.

7710 De | Le

Jacob K. Javits, Attorney-General (Richard H. Shepp of
counsel), for motion.
No one opposed.

Motion granted and appeal dismissed, unless within ten days
appellant serves and files the required undertaking on appeal
and pays $10 costs, in which events motion denied. We consider
the appeal to be taken from the judgment entered in the office of
the Clerk of the Court of Claims and disregard as a misdeserip-
tion the recital contained in the notice of appeal.

Zz 771

Kerstin Swensson, Appellant, v. New Yorn, Ausany Duspatce
Company, Inc., Defendant, and Warp La Francs Truck Corp.,
Respondent. Yoranpa Trimeoni, as Administratrix of the
Estate of Awrnony J. Truport, Deceased, Appellant, v. Warp
La France Trucs Corp., Respondent.

Submitted July 8, 1955; decided July 8, 1955,

Isadore B. Hurwitz and Solomon Z. Ferziger for motions.
John V. Downey opposed.

Motion by appellant Swensson to have appeal heard upon the
record before the Appellate Division together with typewritten
copies of the additional papers granted.

Motion by appellant Trimboli for leave to prosecute appeal
as a poor person and for assignment of counsel granted and
Solomon Z. Ferziger, Esq., of 32 Court St., Brooklyn, N. Y.,
assigned as counsel to appellant Trimboli.

772 Le

Town or Sommurs, Appellant, v. Josspn M. Camarco et al.
Respondents.
Submitted July 8, 1955; decided July 8, 1955.

Motion for reargument or, in the alternative, to amend the
remittitur denied, with $10 costs and necessary printing disburse-
ments. [See 308 N. Y. 537.]

Ce
Jax Watt et al, Respondents-Appellants, v. Avnantic Bracn
Hotprye Corporation et al, Appellants-Respondents;
Mircuzty M. Ferveure et al., Appellants, et al., Defendants.
Submitted July 8, 1955; decided July 8, 1955.

Cari E. Peterson for motion by appellants-respondents.

Martin Koeppel for motion by appellants.

Charles E. Lapp, Jr., opposed.

Motions by appellants-respondents and appellants for a stay
granted upon the giving of a surety bond in the same amount
required for the stay in the Appellate Division. Case set down
for argument not later than the November, 1955, session of the
Court of Appeals.

Maz L. Lecuwzr et al., Respondents-Appellants, v. Frank
Lzcuner, Appellant-Respondent.

Submitted June 2, 1955; decided July 8, 1955.

a
|
7

Kenneth J. Mullane for motion.
Noel Rubinton opposed.
Motion denied, with $10 costs.
— Es
In the Matter of Laurence O’Conwor, ellant, against
Jamus M. Power et al., Constituting the Board of Elections of
the City of New York, et al., Respondents.

Argued September 9, 1955; decided September 9, 1955.

Joseph H. Broderick and Edward V. Broderick, for appellant.
Abraham J. Gellinof’, Robert B. Brady and Nelson Kantor
for respondents Cecil H. Carter and Elizabeth Morris.

Order affirmed; no opinion.

Concur: Conway, Ch. J., Desmonp, Dyz, Vay Voornts, Burke
and MacCrats,* JJ.

In the Matter of Timum Mixer, Appellant, against Jamus M.
Powsr et al., Constituting the Board of Elections of the City
of New York, et al., Respondents.

In the Matter of Epwarp N. Cosrxyan, Appellant, against
James M. Power et al., Constituting the Board of Hlections
of the City of New York, et al., Respondents.

In the Matter of Czcom EH. Carrer, Appellant, against Jamzs M.
Power et al., Constituting the Board of Elections of the City
of New York, et al., Respondents.

In the Matter of Exazanera Morris, Appellant, against James
M. Powszr et al., Constituting the Board of Elections of the
City of New York, et al., Respondents.

Argued September 9, 1955; decided September 9, 1955.

* Designated pursuant to section 5 of article VI of the Stal
the temporary absence of Futp and Frozssun, JJ.

718 be} 7

Abraham J. Gellinoff, Robert B. Brady, Richard T. Levy and
Blossom G. Same for Cecil E. Carter and others, appellants.

Samuel J. Silverman, William Barlow and Gabriel Perle for
Tillie Miller, Edward N. Costikyan and another, appellants.

Joseph Broderick, Joseph F. Clements and Jules E. Gilbert
for respondents.

Orders of the Appellate Division reversed and those of Special
Term reinstated upon the ground that the designating petitions
are invalid for failure to comply with the requirements of sub-
division 8 of section 15 of the Election Law, section 135 of the
Hlection Law and the Rules of the New York Democratic County
Committee. No opinion.

Concur: Conway, Ch. J., Dyz, Van Voornis, Burke and
MacCrarz,* JJ. Dusmonn, J., dissents and votes to affirm.

* Designated pursuant to section 5 of article VI of the State Constitution in
the temporary absence of Fup and Frorsssn, JJ.

In the Matter of Moxie Ganrivxen et al., Respondents, against
James M. Powsr et al., Constituting the Board of Elections of
the City of New York, et al. Smyzy Moszs et al., Appellants.

Argued September 9, 1955; decided September 9, 1955.

780

Saul Berger for appellants.
Abraham J. Gellinof’, Robert B. Brady, Richard T. Levy,
Morris Goldman and Blossom G. Saxe for respondents.

Order affirmed; no opinion.

Concur: Conway, Ch. J., Desmonp, Dyn, Van Voornis, Burke

and MacCrarn,* JJ.
a

Pavia R. Berar et al., Appellants, v. Jurrmrson Democratic
Cuus or rae Sixra Asspmpiy Disrrior, New Yorx County,
Inc., et al., Respondents.

Argued September 9, 1955; decided September 9, 1955.

® Designated pursuant to section 5 of article VI of the State Constituti
the temporary absence of Futp and Fromssen, JJ.

781

Saul Berger for motion.
Joseph Broderick opposed.

Application for leave to appeal dismissed upon the ground
that the order sought to be appealed from does not finally
determine the action within the meaning of the Constitution.

Psrer Campsett Brown, as Corporation Counsel of the City of
New York, Respondent, v. Kinestey Booxs, Inc., et al.,
Appellants.

Submitted October 3, 1955; decided October 5, 1955.

782

Emanuel Redfield and Sidney Glasser for motions.
Peter Campbell Brown, Corporation Counsel (Seymour B.
Quel of counsel), opposed.

Motion for stay granted upon the conditions set forth in the
temporary stay of September 20, 1955.

Motion for certificate that a constitutional question is involved
on the appeal herein granted.
a

Wnuium H. Jurrems, as Administrator of the Estate of
Hupzcarn H. Jurrrms, Deceased, Appellant, v. Jamus
Cuamezrs et al., Respondents.

Submitted October 3, 1955; decided October 5, 1955.

783

Lawrence J. McGinn and Patrick E. Gibbons for motion to
dismiss appeal and in opposition to motion to amend notice of
appeal.

Edwin H. Dembicer opposed to motion to dismiss appeal and
for motion to amend notice of appeal.

Motion to amend notice of appeal granted.

Motion to dismiss appeal granted upon the ground that the
appeal was not taken within the time limited by statute.

Epwarp T. Kure et al., Respondents, v. Sauvatorz A. Pann,
Appellant, et al., Defendants.

Submitted October 3, 1955; decided October 5, 1955.

R. Waldron Hereberg and R. Monell Hereberg for motion.
No one opposed.

Motion to vacate order of Court of Appeals dated June 15,
1955, dismissing the appeal herein denied. If and when there
be entered a new judgment which decrees foreclosure and dis-
misses the counterclaim, a new appeal may be taken therefrom.

M. Franots Matonn, Appellant, v. Srarz or New Yorr,
Respondent. (Claim No. 32327.)

Argued October 3, 1955; decided October 5, 1955.

Motion to dismiss appeal denied, with leave to renew upon
the argument.

ee 785

In the Matter of Wuimm J. Arnunas, Appellant, against
James R. Maopurr, as Commissioner of Motor Vehicles of
the State of New York, Respondent.

Submitted October 3, 1955; decided October 5, 1955.
ee
Motion for stay granted and case set down for argument
during the October, 1955, session of the Court of Appeals.
a

In the Matter of the Arbitration between Epmunp C. Gramenr,
Respondent, and Suza Ewrerpnisns, Iveo., et al., Appellants.

Submitted October 3, 1955; decided October 5, 1955.
PC

Motion for stay granted and case set down for argument
during the November, 1955, session of the Court of Appeals.

In the Matter of Assn Green, Appellant, against Joswen D.
McGoxpricx, as State Rent Administrator, et al., Respondents.

Submitted October 3, 1955; decided October 5, 1955.

786

Julian T. Abeles for motion.

No one opposed.

Motion for stay granted upon the three conditions set forth
in the temporary stay of July 6, 1955, and case set down for
argument during the October, 1955, session of the Court of
Appeals.

ee

Joun H. Nicnots et al., Appellants, v. Iram Pustisuurs, Ino., .
Respondent.
Submitted October 3, 1955; decided October 5, 1955.

Dn
Motion to dismiss appeal denied and case set down for
argument during the November, 1955, session of the Court of
Appeals.
a

Tun Propue or tan Stars or Nuw York, Respondent, v.
Samven Aserson et al., Appellants.

Submitted October 3, 1955; decided October 5, 1955.

ee

Motion by all appellants for enlargement of time granted
and case set down for argument during the November, 1955,
session of the Court of Appeals.

a 787

Tsz Pzorre or tan Srars or New Yorx, Respondent, v.
QGeratp J. Brivxman, Appellant.

Submitted October 3, 1955; decided October 5, 1955.

ee

Motion for enlargement of time granted and case set down
for argument during the first week of the November, 1955,
session of the Court of Appeals.

Tus Ports or raz Stare or Nuw Yoru, Respondent, v.
Armanp Ciorri, Appellant.

Submitted October 3, 1955; decided October 5, 1955.

Motion to have appeal heard upon the original record and
typewritten briefs granted.

Motion for enlargement of time granted and case set down
for argument during the November, 1955, session of the Court
of Appeals.

Ss

Tus Pzorne or tan Stats or New Yors, Respondent, v.
Erxyest Lez Epwarps, Appellant.
Submitted October 3, 1955; decided October 5, 1955.

Motion for enlargement of time granted and case set down
for argument during the November, 1955, session of the Court
of Appeals. [See 308 N. Y. 1020.]

es
Tur Pzorts or tue Srats or New Yorx, Appellant, v.
Cuanites Gursa, Respondent.
Tue Prorne or tHe State or New York, Appellant, v.
Norman Cuarx, Respondent.

Submitted October 3, 1955; decided October 5, 1955.

788 De | Le
ee

Motion for enlargement of time granted and case set down
for argument during the November, 1955, session of the Court
of Appeals.

Tue Psorte or tan Srare or New Yorx, Appellant, v.
Joun H. Greznwoop, Respondent.

Submitted October 3, 1955; decided October 5, 1955.

Motion for enlargement of time granted and case set down
for argument during the October, 1955, session of the Court
of Appeals. Records and brief of appellant to be filed and
served on or before October 10, 1955.

Tue Propie or tap State or New Yorx, Appellant, v. Henry
Horowirz and Transsroox Txaratrus, Inc., Respondents.

Argued October 8, 1955; decided October 5, 1955.

789

Harold Dublirer for motion.

Edward 8S. Silver, District Attorney (David Diamond of
counsel), opposed.

Motion to dismiss appeal denied.
a

Tax Pzorte or raz Srare or New Yorx, Appellant, v. Frank
Krayser, Respondent.
Submitted October 3, 1955; decided October 5, 1955.

ee

Motion for enlargement of time granted and case set down
for argument during the October, 1955, session of the Court
of Appeals.

Motion for assignment of counsel granted and Edward H.
Levine, Esq., 120 Broadway, New York, N. Y., assigned as
counsel to defendant on the appeal herein.

Tus Propis or ran Stars or Nuw Yorx, Respondent, v. Auvin B.
Law, Appellant.

Submitted October 3, 1955; decided October 5, 1955.

Motion for enlargement of time granted and case set down
for argument during the October, 1955, session of the Court
of Appeals.

Ee

Tue Pzorrze or tHe Stare or New Yorx, Appellant, v.
Lots Brown, Respondent.
Tue Psorte or tax Stare or New York, Appellant, v.
Anne Sorisz, Respondent.
Tse Prorpne or tHe Srare or New Yorx, Appellant, v.
Douorzs Benpzr, True Name, Dotorzrs Brown, Respondent.
Tse Prope or tas Stare or New Yors, Appellant, v.
Heian Le Granpz, Respondent.

Tus Pzorue or tus Srars or New Yorx, Appellant, v.
Saran Maoney, Respondent.

Tue Prorrz or tan Srarvze or New Yorx, Appellant, v.
Vastiner Kine, Respondent.

Submitted October 3, 1955; decided October 5, 1955.

Motion for enlargement of time granted and case set down
for argument on October 19, 1955.

Es
Tue Puopiz or THe Stare or New York, Respondent, v. Larry J.
Moss, Appellant.
Submitted October 3, 1955; decided October 5, 1955.
Motion to dismiss appeal denied.

Cross motion for enlargement of time granted and case set
down for argument during the November, 1955, session of the
Court of Appeals.

7 791

Tue Propiz or tHe Stare or New York, Respondent, v. Isaac
Namur, Also Known as Davip Grossman, Appellant.

Submitted October 3, 1955; decided October 5, 1955.

Motion to have appeal heard upon seven copies of the record
before the Appellate Division granted.

Motion for enlargement of time granted and case set down
for argument during the first week of the November, 1955,
session of the Court of Appeals.

Tus Proriz or rae Starz or New Yorx, Respondent, v. ALBERT
F. Suaw, Appellant.

Submitted October 3, 1955; decided October 5, 1955.

Motion for enlargement of time granted and case set down for
argument during the October, 1955, session of the Court of
Appeals.

Es

Tae Propiz or rar Starr or New Yorx, Respondent, v. Eizsano
Toni, Alias Liszyo Trorni, True Name, Exesano Jonn
Troznt, Appellant.

Submitted October 3, 1955; decided October 5, 1955.

Motion for enlargement of time granted and case set down
for argument during the November, 1955, session of the Court
of Appeals.

Motion to have appeal heard upon the original record and
typewritten briefs denied without prejudice to renewal upon a
proper showing and upon: due notice to the District Attorney.

Tur Pzorte or tran Strats or New Yorn, Respondent, v.
Puna Travaro, Appellant.

Submitted October 3, 1955; decided October 5, 1955,

|

Motion to have appeal heard upon six copies of the record
before the Appellate Division and nine typewritten copies of
additional papers granted.

Motion for enlargement of time granted and case set down for
argument during the November, 1955, session of the Court of

Appeals.
es

Tue Propim or tam Stars or New Yorn, Respondent, v.
Jamus Verri, Appellant.

Submitted October 3, 1955; decided October 5, 1955.

Motion for enlargement of time granted and case set down
for argument during the November, 1955, session of the Court
of Appeals.

|
American Surety Company or New Yorx, Respondent, v.

Fanym Diamonp et al., as Executors of Apotpa Dramonp,
Deceased, et al., Appellants.

Submitted October 3, 1955; decided October 6, 1955.

793

Herman E. Hoberman for Fannie Diamond and another for
motion.

Bernard Meyerson for David Diamond for motion.
Joseph Kame for Alfred E. Covelli for motion.

Frederick M. Garfield, Harold M. Harkavy and I. Sidney
Worthman opposed.

Motion by appellants David Diamond, Fannie Diamond and
Morris A. Weiss for leave to appeal granted.

Motion by appellant Alfred E. Covelli for leave to appeal
denied upon the ground that it was not made within the statutory
time.

Eeuanper Company, Lvo., a Delaware Corporation, Respondent,
v. Sou Tisnimr, Individually and as President of Bedding,
Curtain & Drapery Workers Union, Local 140, C. I. O., et al.,
Defendants, and Auex Srrora et al., Appellants.

Submitted October 3, 1955; decided October 6, 1955.

James P. Durante for motion. i

Victor Rabinowitz opposed. .

Motion to dismiss appeal granted and appeal dismissed, with
costs and $10 costs of motion, upon the ground that the order
does not finally determine a special proceeding within the
meaning of the Constitution.

as
Eweranper Company, Inc., a Delaware Corporation, Respondent,
v. Sou Tisuuer, Individually and as President of Bedding,
Curtain & Drapery Workers Union, Local 140, C. I. O., et al.,
Appellants.
Submitted October 3, 1955; decided October 6, 1955.

James P. Durante for motion.

Victor Rabinowitz opposed.

Motion to dismiss appeal granted and appeal dismissed, with
costs and $10 costs of motion, upon the ground that the order
does not finally determine the action within the meaning of the

Constitution.

| 795

Crry or New Rocuetis, Respondent, v. Morcaw H. Szacorp,
Appellant,
Submitted October 3, 1955; decided October 6, 1955.
PO —S—“(C;isSSCSCSCSCiés
Motion to dismiss appeal granted and appeal dismissed, with
costs and $10 costs of motion, upon the ground that no substan-
tial constitutional question is presented on this record.
a
In the Matter of Hucu A. Coutzourn, Appellant, against Mmron
L. Burns, as County Treasurer of Suffolk County, Respondent.
Capstone Corporation et al., Movant.

Submitted October 3, 1955; decided October 6, 1955.

Harry Hausknecht for motion.

Charles E. Lapp, Jr., opposed.

Motion dismissed upon the ground that the order sought to
be appealed from does not finally determine a special proceeding
within the meaning of the Constitution.

a
Tur Pzorte or tHe Stats or New Yorx, Respondent, v.
Lovis Oxrver, Appellant.
Submitted October 3, 1955; decided October 6, 1955.

Motion for enlargement of time granted and case set down for
argument during the November, 1955, session of the Court of
Appeals.

796 be} be
eres

Tue Pzortz or tae Stare or New Yorx, Respondent, v.
Sprincriecp Duvetopmenr Company, Inc., Appellant.
Tur Prorue or tHe Stare or New Yorx, Respondent, v.
Hu Deverorpment Company, Ino., Appellant.

Tum Prorne or tan Stars or New York, Respondent, v.
Srrinerretp DuveLopmant Company, Inc., Appellant.
Tue Puoptz ‘or tun Stare or New Yorx, Respondent, v.
Huw Dsveropmenr Company, Ino., Appellant.

Tue Pxzorte or tan Stare or New Yorx, Respondent, v.
Cuazius Rosen, Correct Name Cum Rossnstarz, Appellant.
Tse Pzopie or tHe Stare or New Yorx, Respondent, v.
Marcus Rerrer, Appellant.

Submitted October 3, 1955; decided October 6, 1955.

Menahem Stim for motion.
No one opposed.

| | 197

a

L ereererereeremeey pee em!

Motion, insofar as it seeks an enlargement of time and leave
to withdraw appellants’ briefs and to file new ones, granted and
case set down for argument during the November, 1955, session
of the Court of Appeals; otherwise, motion denied without
prejudice to submission of the proposed addition to the record
upon the argument of the appeal at which time appellants should
be prepared to show the propriety thereof.

a
In the Matter of Naw Yorx TatepHonn Company, Respondent,
against Pustic Service Commission or tHE Srarz or New
Yorx, Appellant, and Crry or New York et al., Intervenors-
Appellants.

Submitted October 3, 1955; decided October 11, 1955.

ee

Motion to have appeal heard upon the record used before
the Appellate Division together with eighteen printed copies of
volume 1 of the record granted.

a
Tap Proprs or tan Stare or New Yorx, Respondent, v.
Epwarp Nexson, Appellant.
Submitted October 3, 1955; decided October 11, 1955.
Motion to amend remittitur denied. [See 309 N. Y. 231.]

Atrrr Biousz Company, Ino., Appellant, v. H. HE. Connor & Co.,
Inc., Respondent.

Submitted October 3, 1955; decided October 18, 1955.
Motion for reargument denied, with $10 costs and necessary
printing disbursements. [See 309 N. Y. 67.]
es
Ernust Aron, Appellant, v. Frorsnoz Guuman et al., as Admin-
istratrices D. B. N. of the Estate of Dora Osrrorr, Deceased,
Respondents. ;
Submitted October 3, 1955; decided October 13, 1955.
Motion to amend remittitur denied. [See 309 N. Y. 157.]

798 Le | |
ree

Guorm La B. Becrey, Appellant, v. Prupewrran Insurance
Company or Amurica, Respondent.

Submitted October 3, 1955; decided October 13, 1955.

ee

Motion to dismiss appeal denied.

Cross motion for leave to prosecute appeal as poor person
and for assignment of counsel granted and Joseph M. Costello,
Esq., 100 William Street, New York, N. Y., assigned as counsel
to appellant on the appeal herein.

Anya Brurenmitier et al., Appellants, v. Wast Enp Tavern,
Inc., Respondent.

Submitted October 3, 1955; decided October 13, 1955,

Motion to have appeal heard upon one copy of the record
before the Appellate Division together with the required addi-
tional papers granted.

Boarp or tHE Brack River Recutatine District, Appellant, v.
, Avrmonpack Leacur Crus, Respondent.

Argued October 3, 1955; decided October 18, 1955.

Charles H. Tuttle for motion to dismiss appeal.
Daniel Scanlon and Russell Wright opposed.

Jacob K. Javits, Attorney-General (James O. Moore and
Richard H. Shepp of counsel), for motion.

Motion to dismiss appeal granted and appeal dismissed, with
costs and $10 costs of motion.
Motion for adjournment of argument dismissed.

Mary Cassrmpy, Respondent, v. Curia Casstpy, Appellant, et al.,
Defendant.

Submitted October 3, 1955; decided October 13, 1955.

Charles G. Coster and John F. X. Finn for motion.

Myron Sulzberger, Jr., opposed.

800 P| 7

Motion to vacate order of the Court of Appeals, dated Sep-
tember 19, 1955, dismissing the appeal herein granted and appeal
reinstated upon the conditions that appellant serve and file the
record on appeal and her brief within twenty days from the date
of this order and that she be prepared to argue the appeal during
the November, 1955, session of the Court of Appeals.

Cornett University, Appellant-Respondent, v. Mussive
Baxurms, Iveo., Respondent-Appellant.

Submitted October 3, 1955; decided October 13, 1955.

Motion for reargument denied, with $10 costs and necessary
printing disbursements. [See 309 N. Y. 722.]

Roman Gurrier, Appellant, v. Union Parts Manvuracruaine
Co., Iwo., Respondent. :

Submitted October 3, 1955; decided October 13, 1955.

Motion for leave to prosecute appeal as poor person and for
assignment of counsel granted and Robert Leon Horn, Esq., 1450
Broadway, New York, N. Y., assigned as counsel to appellant on
the appeal herein.

Miron Jzssezson, Individually and as Executor of Tussm
JzsseLson, Deceased, et al., Respondents, v. Guorta Moony,
Appellant.

Submitted October 3, 1955; decided October 18, 1955.

Motion by respondent Dutton for reargument denied, with
$10 costs and necessary printing disbursements. [See 309
N. Y¥. 148.]

| a 801

Orry or New Yors, Respondent, v. Gzratp D. Nutson et al., as
Successor Trustees under the Will of Wui1am Netson,
Deceased, et al., Appellants.

Submitted October 3, 1955; decided October 13, 1955.
Motion for reargument denied.

Motion to amend remittitur granted. Return of remittitur
requested and, when returned, it will be amended by adding
thereto the following: Upon the appeal herein there were pre-
sented and necessarily passed upon questions under the Con-
stitution of the United States, as follows: The appellants argued
that the taking by the City of New York of the property here
involved was, on this record, a taking of private property for
public use without just compensation under the Fifth Amend-
ment, and deprived them of due process and equal protection of
the laws under the Fourteenth Amendment to the Constitution
of the United States. The Court of Appeals held that the rights
of defendants under the Fifth and Fourteenth Amendments of
the Constitution of the United States had not been violated or
denied. (See City of New York v. Nelson, 309 N. Y. 94.)

Motion to stay the City of New York from proceeding with
the sale or disposition of the subject property granted to and
including November 12, 1955, to enable appellants to apply to
the Supreme Court of the United States or to a Justice thereof
for a stay in connection with an application for a writ of
certiorari.

In the Matter of the Construction of the Will of Asumr B.
Hatuocn, Deceased. Frep A. Gmorz, as Executor of Fuor-
znog Y. Gora, Deceased, Respondent; Franx D. Hatiocx,
Appellant.

Submitted October 8, 1955; decided October 13, 1955.

Motion to have appeal heard upon the printed record and
briefs heretofore filed herein together with a printed supple-
ment containing the additional papers granted upon condition
that an appropriate undertaking pursuant to section 593 of the

a

802 P| 7

Civil Practice Act, if not already filed, be filed within ten days,
in which event respondent’s cross-motion to dismiss appeal
denied; otherwise, appellant’s motion denied and respondent’s
cross-motion to dismiss granted, with costs and $10 costs of
motion. [See 308 N. Y. 299.]

In the Matter of the Election of Directors of R. Hoz & Co.,
Inc. Nem P. Cutnom, Appellant; Howarp E. Rem et al.,
Respondents.

Submitted October 3, 1955; decided October 13, 1955.

Motion for reargument or, in the alternative, to amend the
remittitur denied, with $10 costs and necessary printing dis-
pbursements. [See 309 N. Y. 719.]

In the Matter of Rosrrr McDonatp, Appellant, against J. Var-
nut Jaoxson, as Warden of Clinton Prison, Respondent.

Submitted October 3, 1955; decided October 13, 1955.

Robert McDonald, in person, for motion.
No one opposed.

Motion denied.

| 803

In the Matter of Cora M. McKrrrericx, an Incompetent Person.
Mary V. A, Laavirr, Appellant; Herman E. Roper, as
Committee of the Person of Cora M. McKuzrrericr, et al.,
Respondents.

Submitted October 3, 1955; decided October 13, 1955.

Motion for leave to appeal denied, with $10. costs and neces-
sary printing disbursements.

Motion to dismiss appeal taken as of right granted and appeal
dismissed, with costs and $10 costs of motion upon the ground
that no substantial constitutional question is presented.

In the Matter of the Arbitration between Repvsrieve Fran-
cats, Respondent, and Crniosmx Manuracrvrrsc Company
et al., Appellants.

Submitted October 3, 1955; decided October 13, 1955.

Motion for reargument denied, with $10 costs and necessary
printing disbursements. [See 309 N. Y. 269.]

In the Matter of Wirrnrop Taynor, Appellant, against Boarp
or Zoyine Appeats or THE Town or Smrrurown et al.,
Respondents. .

Submitted October 3, 1955; decided October 13, 1955.

g
|

Jackson A, Dykman and Harold A. Meriam for motion.
George L. Hubbell, Jr., and Edward J. Walsh, Jr., opposed.

Motion for leave to appeal denied upon the ground that it
was not made within the statutory time.

In the Matter of Wim D. Travs, Appellant, against Anum
J. Gooprice et al., Constituting the State Tax Commission,
Respondents.

Submitted October 3, 1955; decided October 13, 1955.

Motion to have appeal heard upon seven copies of the record
before the Appellate Division granted.

In the Matter of the Probate of the Will of Mosss Troprrr,
Deceased. Josupn Troppur et al., Respondents; Raa Troprer
et al., Appellants.

Submitted October 3, 1955; decided October 13, 1955.

805

Julius B. Sucher for motion.
No one opposed.

Motion to dismiss appeal granted and appeal dismissed, with
costs and $10 costs of motion, unless within ten days from the
date of this order appellant serves and files the stipulation for
order absolute required by subdivision 3 of section 588 of the
Civil Practice Act, and furnishes the undertaking required by
section 593 of the Civil Practice Act, and pays $10 costs to
movants, in which events motion denied.

Le
Pum Nappi, Appellant, v. Fancon Truck Renrive Corp.,
Respondent.
Submitted October 3, 1955; decided October 13, 1955.
ee

Motion for leave to prosecute appeal as poor person granted.

Tue Pzoris or tum Stars or New Yorx, Respondent, v. Caartes
Invrviewi0, Defendant, and Anrnony CO. Ricco, Appellant.

Submitted October 3, 1955; decided October 13, 1955.
Motion by defendant Ricco to amend remittitur granted.
Return of remittitur requested and, when returned, it will be

amended by adding thereto the following: A question under
the Federal Constitution was presented and necessarily passed.

806 P| L |

upon by the Court of Appeals, viz.: The defendant Ricco argued
that the denial of his application, made at the time his alleged
confession was offered in evidence, for a preliminary hearing on
the issue of whether such confession was induced by threats, con-
stituted a denial of due process and a violation of his rights
under the Fourteenth Amendment to the Federal Constitution.
This court held that the denial of the application for a pre-
liminary hearing was not a denial of due process or a violation
of said defendant’s rights under the Fourteenth Amendment to
the Federal Constitution. [See 308 N. Y. 1036.]

P|
Tux Pzoris or toe Stars or New Yorx, Respondent, v. Loven
Lanpmrs and Appi Exum, Appellants.
Submitted October 3, 1955; decided October 13, 1955.
Motion for reargument denied. [See 264 N. Y. 119.]

Tue Pzopiz or raz Stats or New Yorx, Respondent, v. Camrto
Wustron Luyra, Appellant.

Submitted October 3, 1955; decided October 18, 1955.

Motion for assignment of counsel granted and Osmond K.
Fraenkel, Esq., 120 Broadway, New York, N. Y., and Frederick
W. Scholem, Esq., 10 Hast 40th Street, New York, N, Y., assigned
as counsel to appellant on the appeal herein. [See 302 N. Y.
353; 304 N. Y. 844, certiorari denied 345 U. S. 918; Leyra v.
Denno, 113 F. Supp. 556, affd. 208 F. 2d 605, revd. 347 U. S. 556.]

Le
Tae Propiz or tam Stars or Nuw Yorn, Appellant, v. Pamir 8.
Savacz, Respondent.
Submitted October 10, 1955; decided October 18, 1955.

Motion for enlargement of time granted and case set down :
for argument during the last week of the November, 1955, ses-
sion of the Court of Appeals.

, 807

Tue Prope or tae Stare or New Yorx, Respondent, v. Roperr
Youxor, Muon Youxon, Niosonas Youxon, Perer Youxnon,
Dororay Youxon, Buancuz Youxon and Heren Youxon.
Appellants.

Submitted October 3, 1955; decided October 13, 1955.
Motion for reargument denied. [See 309 N. Y. 657.]

Wuisa Rosenrexp, on Behalf of Himself and All Other Stock-
holders of Fairchild Engine and Airplane Corporation, Simi-
larly Situated, Appellant, v. Famcuip Enews anp Amriann
Corvoration et al., Respondents, et al., Defendants.

Submitted October 3, 1955; decided October 13, 1955.

Motion for reargument and to amend the remittitur denied,
with $10 costs and necessary printing disbursements. [See 309
N. Y. 168.]

Pt

Mream B. Rosenrieip, Respondent, v. Hpwarp M. Rosewriexp,
Appellant. Miriam B. Rosenrmip, Respondent-Appellant, v.
Epwarp M. Rosenrieip, Appellant-Respondent; Cuarnzs R.
Barrett, Respondent.

Submitted October 3, 1955; decided October 13, 1955.

Motion to dismiss appeals of defendant and cross motion to
dismiss appeal of plaintiff denied (see Rules of Court of
Appeals, rule I).

Es

Sza Movzs, Ino., et al., Respondents, v. Louis C. Coen,
Appellant.
Submitted October 10, 1955; decided October 13, 1955.

Motion for reargument denied, with $10 costs and necessary
printing disbursements. [See 309 N. Y. 1.]

808 Ye

Town or GreensurcH, Respondent, v. Burr F. Busser et al.,
Appellants.

Submitted October 3, 1955; decided October 18, 1955.

Davis M. Zimmerman for motions.
No one opposed.

Motion to dismiss appeal granted and appeal dismissed, with
costs and $10 costs of motion, upon the ground that no constitu-
tional question was properly raised in the court below. (See
Rector, etc., of Church of Holy Trinity v. Melish, 301 N. Y. 679.)

a
In the Matter of the Accounting of Epwarp C. Rarrzry et al.,
as Surviving Executors and Trustees under the Will of ©

Mavrice A. Sua, Deceased, Respondents. Marcarsr L. Sas

et al., Appellants.

Submitted October 3, 1955; decided October 13, 1955.

| 809

 eepnese
Thomas K. O’Brien and Arthur E. Sullivan for motion to
dismiss appeal.
John L. Flynn, Referee, in person, for motion to dismiss

appeal.
Lawrence R. Condon opposed.

Motion for leave to appeal denied upon the ground that an
appeal lies as of right.
Motion to dismiss appeal denied.

In the Matter of the Estate of Franx A. Lupiam, Deceased.
(Two Proceedings.) Naraan Zausmer et al., Individually
and as Executors of Frawx A. Lupnam, Deceased, et al.
Respondents; Ex Rena L. Scrorrizs, Appellant. (Consoli-
dated Appeals.)

Submitted October 3, 1955; decided October 13, 1955,

cenbaum for motion.
Jack Korshin for Nathan Zausmer and another.
Motion to amend notices of appeal herein nunc pro tunc
granted.

Parse Rucanz, Respondent, v. K. L. M. Royan Durem Armutus,
Appellant.

Argued October 3, 1955; decided October 20, 1955.

Gregory S. Rivkins, Yorkston W. Grist and John G. Poles
for appellant.
Robert F, Doran for respondent.

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Fup, Frozssen, Van
Vooruis and Burrs, JJ. Taking no part: Dvn, J.
De
Hues Fox, an Infant, by Aerzs O’Rovunxsz, His Guardian ad
Litem, et al., Appellants, v. Mission or tae ImmacunaTs
Virnern ror THE Prorscrion or Homeness anp Desrrrurs
Cumpran, Respondent.

Argued October 6, 1955; decided October 20, 1955.

814 a | ee!

Julius A. Itzkowite, Samuel Kolatch and Anton R. Siegal
for appellants.
William L. Shumate for respondent.

Judgment affirmed, without costs; no opinion.

Concur: Dzsmonn, Fup, Van Voornis and Burn, JJ.
Conway, Ch. J., and Frozsszn, J. dissent and vote to reverse
upon the ground that the record presents questions of fact which
required the submission to a jury of the question of the
contributory negligence of the infant plaintiff. Taking no part:
Dvyz, J.

Le

Hetew Bercmans, as Administratrix of the Estate of Jossrx CO.
Brremans, Deceased, Appellant, v. Srarze or New York,
Respondent. (Claim No. 31038.)

Argued October 4, 1955; decided October 20, 1955.

86 Le 7

N. LeVan Haver, Philip Korn and John E. Egan for
appellant.

Jacob K. Javits, Attorney-General (Richard H. Shepp and
James O. Moore, Jr., of counsel), for respondent.

Judgment affirmed, with costs; no opinion.
Concur: Conway, Ch. J., Dusmonp, Funp, Fromssen, Van
Vooruis and Burxs, JJ. Taking no part: Dys, J.
be

In the Matter of Wmium J. Aranyas, Appellant, against
Jamus R. Macvurr, as Commissioner of Motor Vehicles of the
State of New York, Respondent.

Submitted October 10, 1955; decided October 20, 1955.

a 817
es

Daniel Weiss and Milton E. Jacobowitz for appellant.

Jacob K. Javits, Attorney-General (Daniel M. Cohen, James
O. Moore, Jr., and Jerome O. Glucksman of counsel), for
respondent. .

Order affirmed, without costs; no opinion.

Concur: Conway, Ch. J., Desmonn, Fup, Frozssen, Van
Voornis and Burxz, JJ. Taking no part: Dyn, J.

Tue Prorue or tHe Starz or New Yorx ex rel. Roperr K.
Eprme, Appellant, against Wester Dz Vox, as Acting
Sheriff of the County of Saratoga, Respondent.

Argued October 5, 1955; decided October 20, 1955.

| Le} 819

John J. O’Malley and Saul Balmuth for appellant.
Carleton J. King, District Attorney (James A. O’Connor of
counsel), for respondent.
Order affirmed, no opinion.
Concur: Conway, Ch. J., Desmonn, Fuup, Frozssen, Vaw
Vooruis and Burgs, JJ. Taking no part: Dyn, J.
De
Micnart J. Gannon et al. Appellants, v. Royan Properriss,
Inc., et al., Defendants, and R. & G. Survice Garacn, Ino.,
Respondent. °
Evcenz Ex, Appellant, v. Royvan Propszriues, Ine, et al.,
Defendants, and R. & G. Szrvicn Garacs, Inc., Respondent.
Argued October 4, 1955; decided October 20, 1955,

821

Paxton Blair, Edward M. Edenbaum and Harry H. Lipsig
for appellants.

James A. Doherty and James A. Doherty, Jr., for respondent.
Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Dusmonp, Funp, Frozssen, Van
Voornis and Burn, JJ. Taking no part: Dvs, J.
a
Sreramn Kacpura, Respondent, v. Rurn H. Hioxs, Appellant.

Argued October 4, 1955; decided October 20, 1955.

Jerome Otis Ellis and Donald L. Ochs for appellant.
Logan Cresap for respondent.

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Funp, Frousser, Van
Voornis and Burs, JJ. Taking no part: Dvys, J.

Tue Props or raz Stare or New Yorx, Respondent, v. Burr
Scurerer, Appellant.

Argued October 5, 1955; decided October 20, 1955.

ee 825

Bruce H. Willner for appellant.

Frank S. Hogan, District Attorney (Paul A. Stone and
Charles W. Manning of counsel), for respondent.

Judgments reversed, information dismissed and the fine
remitted. Whether or not a punch card or punchboard comes
within the scope of section 970-a of the Penal Law need not be
here decided since, in our view, there was no proof, beyond a
reasonable doubt, of the essential sale of such an article. No
opinion.

Coneur: Conway, Ch. J., Desmonp, Funp, Frozssen, Van
Vooruis and Burks, JJ. Taking no part: Dvs, J.

Tre Pzopie or tau Stare or New Yorx, Respondent, v. Jamzs
Buaxester, CHartes Broperick and TxHomas SoxonsK1,
Appellants.

Argued October 6, 1955; decided October 20, 1955.

8
a

Charles J. McDonough for appellants.
John F. Dwyer, District Attorney (Merrill G. Windelberg
of counsel), for respondent.

Judgment affirmed; no opinion.

Concur: Conway, Ch. J., Fuxp, Fromssen, Van Voornis and
Burg, JJ. Taking no part: Dzsmonp and Dyz, JJ.

Mary Puarrto et al., Appellants, v. Brrraa Stir, Respondent,
et al., Defendants.

Argued October 3, 1955; decided October 20, 1955.

829

Herbert L. Fine, Harry Zeitlan and Murray Eisenberg for
appellants.

Samuel E. Swiggett for Bertha Stier, respondent.
Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Duswonn, Futp, Frozssen, Van
Vooruis and Burks, JJ. Taking no part: Dvys, J.

In the Matter of T. Vincent Quinn, as District Attorney of
Queens County, Appellant, against J. Inwm Suapmo, as
Magistrate of the City of New York, Respondent.

Argued October 10, 1955; decided October 20, 1955,

| a 831

ee

T. Vincent Quinn, District Attorney (Benjamin J. Jacobson
of counsel), appellant in person.

David Diamond for Hdward 8. Silver, District Attorney of
Kings County, amicus curig, in support of appellant’s position.

Jacob K. Javits, Attorney-General (Daniel M. Cohen and
James O. Moore, Jr., of counsel), for respondent.

Henry W. Schober for Criminal Courts Bar Association of

Queens County, Inc., amicus curiz, in support of respondent’s
position.

Order affirmed ; no opinion.
Concur: Conway, Ch. J., Desmonp, Fuup, Froxssen, Van
Vooruis and Burxz, JJ. Taking no part: Dvs, J.

De
Horst Syracusz, Inc., Appellant, v. Mors, Syracuss, Inc.,
Respondent.

Argued October 3, 1955; decided October 20, 1955.

833

Jerome H. Searl for appellant.
Saul H. Alderman for respondent.

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Dusmonp, Funp, Frozssen, Van
Vooruis and Burge, JJ. Taking no part: Dyn, J.

Tur Proris or tHe Starz or Nuw Yorx, Respondent, v.
Micnazt Du Brx, Appellant.

Argued October 4, 1955; decided October 20, 1955.

es

835

Nancy Carley for appellant.
Daniel V. Sullivan, District Attorney (John B. Lee and
Walter E. Dillon of counsel), for respondent.
Judgment affirmed ; no opinion.
Concur: Conway, Ch. J., Dasmonp, Fun, Frozsset, Van
Voornis and Bure, JJ. Taking no part: Dvz, J.
Ee

Tu Proris or tan Srarz or New York, Respondent, v.
Danze Anuarn, Appellant.

Argued October 6, 1955; decided October 20, 1955.

Irving Novis for appellant.

Frank S. Hogan, District Attorney (Harold Roland Shapiro
of counsel), for respondent,

Order affirmed; no opinion.

Coneur: Conway, Ch. J., Desmonp, Funp, Frozssen, Van
Vooruis and Burks, JJ. Taking no part: Dvs, J.

Tue Prorie or raz Stars or New Yorx, Respondent, v. Lestzr
Meyers, Appellant.

Argued October 5, 1955; decided October 20, 1955.

David Farber for appellant.
T. Vincent Quinn, District Attorney (George J. Regan of
counsel), for respondent.

Ye 839

a
eee
Judgments reversed and information dismissed upon the
ground that there is not sufficient evidence to find the defendant
guilty beyond a reasonable doubt. No opinion.

Concur: Conway, Ch. J., Fux, Fronssex, Van Vooruis and
Burxs, JJ. Dzsmonp, J., dissents and votes to affirm. Taking
no part: Dys, J.

P|

James E, Mirime et al., Appellants, v. Hpmors Homus Corp.,
Respondent, et al., Defendant.

Argued October 7, 1955; decided October 20, 1955.

841

Edward G. Wolff and Furman Greene for appellants.
Michael Goldberg, Gerard S. Johnson and Abraham Apat for
respondent, .
Judgment affirmed, without costs; no opinion.
Coneur: Conway, Ch. J., Desmonp, Funp, Frozssen, Var
Voornis and Burxs, JJ. Taking no part: Dyz, J.
es
Renee Potiarp, by Wii1am C. Pontarp, Her Guardian ad Litem,
Appellant, v. Boarp or Epucarion, Barger Centra ScoHoon
Disraicr, Respondent.

Argued October 3, 1955; decided October 20, 1955.

en! a 843

rere
Robert L. Fraser and James P. Degnam for appellant.
Salem G. Mansour for respondent.

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Fup, Frozssen, Van
Vooruis and Burgz, JJ. Taking no part: Dys, J.

Mary J. Crarg, as Administratrix of the Estate of Aupmrr R.
Cuarx, Deceased, Respondent-Appellant, v. Joan H. Sranwarp,
Respondent, and Crry or Rome, Appellant.

Submitted October 3, 1955; decided October 20, 1955.

Motions by City of Rome and Mary J. Clark, as administratrix
of the estate of Albert R. Clark, deceased, for leave to appeal
denied upon condition that plaintiff, within twenty days, carry
out the stipulation offered in the papers herein to reduce the
amount of the judgment against the City of Rome by the sum
of $1,514.07 ; otherwise, motions granted.

In the Matter of Rusry Manorr, Appellant, against Boarp or Epu-
cation or THE Crry or New Yorx, Respondent, and I. Brrr
Levis et al., Intervenors-Respondents.

Submitted October 10, 1955; decided October 20, 1955.
ee

Motion for a certificate that a constitutional question is
involved on the appeal herein denied.

In the Matter of Oxrorp Grovp-Morat Rz-Armament, MRA, Inc.,
Appellant, against Hocarra §. Sweer et al., Constituting the
Board of Review of the Town of New Castle, Respondents.

In the Matter of Oxrorp Group-Morar Rz-Armamunt, MRA, Inc.,
Appellant, against Mayyarp Aten et al., Constituting the
Board of Assessors of the Town of North Castle, Respondents.

Submitted October 3, 1955; decided October 20, 1955.

Motion for reargument denied, with $10 costs.

Motion to amend remittitur granted. Return of the remittitur
requested and, when returned, it will be amended by adding
thereto the following: Upon the appeal herein there was
presented and necessarily passed upon a question under the
Constitution of the United States, viz: Whether the zoning
ordinance of the Town of New Castle violates the First and
Fourteenth Amendments to the Constitution of the United States
insofar as it relates to the portion of the real property described
in the complaint which is located in the town of New Castle.
The Court of Appeals held that there was no denial of any
constitutional right of petitioner. [See 309 N. Y. 744.]

a
In the Matter of Oxrorp Group-Mora Re-Armament, MRA, Inc.,

Appellant, against Hocarra 8. Swuzer et al., Constituting the

Board of Review of the Town of New Castle, Respondents.

In the Matter of Oxrorp Grovp-Morat Re-Armament, MRA, Iwo.,

Appellant, against Maywarp Auten et al., Constituting the

Board of Assessors of the Town of North Castle, Respondents.

Subnitted October 17, 1955; decided October 20, 1955.

Motion to amend remittitur granted to the extent that the
remittitur is recalled and amended to read as follows: Orders
of Appellate Division reversed and those of Special Term rein-
stated, with costs in this court and in the Appellate Division
against the Town of North Castle and without costs to either
party with respect to the Town of New Castle, upon the ground
that the weight of the evidence supports the findings of the
Official Referee that the premises of appellant in both towns
are used exclusively for exempt purposes, but that appellant is
not a ‘ family ”’ or a ‘‘ church’ or other place of worship, so

Lee 845

Ce
reel
as to conform to the zoning ordinance of the Town of New Castle.
We have considered the other points raised and conclude that
the Official Referee reached the correct result. [See 309
N.Y. 744.]

Frorence C. Parmer, as Administratrix of the Estate of Eayesr
F. Paumnr, Deceased, Appellant, v. Couwry or Nassau, Defend-
ant; Town or Norra Hempsrzap, Respondent, and Lone Istaxp
Licurmne Company, Respondent and Third-Party Plaintiff-
Appellant. Swirzer Conrracrine Co. Ino., Third-Party
Defendant-Respondent.

Submitted October 17, 1955; decided October 20, 1955.

Motion to have appeal of third-party plaintiff-appellant Long
Island Lighting Company heard upon the record on appeal
herein now on file in this office granted upon condition that it
serve a copy of the record on appeal as now filed and also
printed briefs, insofar as the appeal is between the third
parties, upon the defendant-respondent Town of North Hemp-
stead and the third-party defendant-respondent Switzer Con-
tracting Co., Inc,

Le
Tum Propis or tax Stare or New Yorx, Respondent, v. Jonn
Cannizzaro, Appellant.

Submitted October 17, 1955; decided October 20, 1955.
PC

Motion for enlargement of time granted and case set down
for argument during the November, 1955, session of the Court
of Appeals.

Dn
Tse Prope or tHe Stars or New Yorx, Appellant, v. Jonn
Formato, Jamus Morgnxo, Pasquats Lepore and Hueco Torrn,
Respondents.

Submitted October 17, 1955; decided October 20, 1955.
ee
Motion for enlargement of time granted and case set down for
argument during the last week of the November, 1955, session
of the Court of Appeals.

846

Tue Propis or top Strate or New Yors, Appellant, v. Meyzr
Lxvenstain, Respondent.
Submitted October 17, 1955; decided October 20, 1955.

Motion for enlargement of time granted and case set down
for argument during the November, 1955, session of the Court
of Appeals.

Dh

Tas Pzopis or toe Starz or New Yorx, Appellant, v. Jonn O.
Srrarron, Respondent.
Submitted October 17, 1955; decided October 20, 1955.
ee
Motion for enlargement of time granted and case set down for
argument during the last week of the November, 1955, session.
of the Court of Appeals.

Tue Pxoris or tae Stats or Nuw York, Respondent, v. Euasano
Troan, Alias Liseno Trorani, True Name, Exmsano Joun
Trorant, Appellant.

Submitted October 19, 1955; decided October 20, 1955.
Le
Motion to have appeal heard upon seven copies of the record
before the Appellate Division and seven typewritten briefs

granted.
Motion for a further enlargement of time denied.

Premier Kyrrmne Oo., Inc. Respondent, v. Gzorcz Rartis
Yarns, Inc., Appellant.
Submitted October 17, 1955; decided October 20, 1955.

PC

Motion to dismiss appeal for failure to file brief denied.
Appellant is directed to serve and file the brief, if any, within
two weeks from the date of service of the order hereon and the
ease is set down for argument during the November, 1955,
session of the Court of Appeals.

Le) 847

Tuim Prerzrenper, Appellant, v. Erwiy Kany, Respondent.
Submitted October 17, 1955; decided October 20, 1955.

ee

Motion to dismiss appeal granted and appeal dismissed, with
costs and $10 costs of motion, unless within ten days appellant
serves and files the required undertaking on appeal and within
twenty days serves and files the record on appeal and pays $10
costs, in which events motion denied.

|
In the Matter of THomas H. Brown, Respondent, against
Epwarp A. Frrzemratp et al., Appellants.
In the Matter of Epwarp A. Firzczratn, Appellant, against
Wirorp A. Lz Forusrrer et al., Constituting the Board of
Elections of Rensselaer County, et al., Respondents.

Argued November 2, 1955; decided November 2, 1955.

James E. Gavagan for appellants.
F. Richard Decatur, Jr., Robert E. Gray, Edward J. Malone
and Eugene P. Coffey for Thomas H. Brown, respondent.

Elmer A. Rasmussen, County Attorney, for Wilford A.
Le Forestier, and others, respondents.

850 a Le

Neil M. Lieblich for Division for ‘Servicemen’s Voting,
Department of State.

Order affirmed, without costs; no opinion.

Concur: Conway, Ch. J., Dusmonp, Fup, Frozssen, Van
Voornis and Burks, JJ. Taking no part: Dyz, J.

In the Matter of Burr Horwpscx, Appellant, against Jamus P.
Asxun et al., as Commissioners of Election of the County of
Sullivan, Respondents.

Argued November 2, 1955; decided November 2, 1955.

Ellsworth Baker for appellant.
Irving Bershader, County Attorney, for respondents.

Order affirmed, without costs; no opinion.

Coneur: Conway, Ch. J., Desmonp, Funp, Frozssen, Van
Voornis and Burks, JJ. Taking no part: Dyn, J.

In the Matter of Prupenrran Insurance Company or AMERICA,
Appellant, against Wmi1am E. Bornanp et al., Constituting
the Tax Commission of the City of New York, Respondents.
[60 Hast 42nd St., Borough of Manhattan.]

Argued October 5, 1955; decided November 17, 1955.

853

Arthur A. Segall, Murray L. Watt and Robert L. Pelz for
appellant.

Peter Campbell Brown, Corporation Counsel (Edith I.
Spivack and Morris Handel of counsel), for respondents.

Order affirmed, with costs; no opinion.

Coneur: Conway, Ch. J., Desmonn, Furp, Frozssen and
Van Vooruis, JJ. Taking no part: Dyn and Burg, JJ.

Tur Pzopie or rae Stare or New Yorn, Respondent, v.
Wuu41am D. Caracentt, Appellant.

Submitted October 5, 1955; decided November 17, 1955.

William D. Caracelli, appellant in person.
T. Vincent Quinn, District Attorney (Benj. J. Jacobson of
counsel), for respondent.

Orders reversed, with the direction that appellant be returned
to the County Court, Queens. County, to be resentenced as a
first offender, upon the ground that it does not sufficiently
appear that the crime to which appellant pleaded guilty in New
Jersey would have been a felony if committed in this State.
No opinion.

Concur: Conway, Ch. J., Desmonn, Dyn, Furp, Froussex,
Van Vooruts and Burks, JJ.

| Pe 855

eee
Exrsm §. Funrerron, Appellant, v. Crry or Scnsnnorapy,
Respondent.
Wanrer A. Furierton, Jz., Appellant, v. Crry or Scumnucrapy,
Respondent.

Submitted October 3, 1955; decided November 17, 1955.
Motion for reargument denied.

Motion to amend remittitur granted. Return of the remittitur
requested and, when returned, it will be amended to read as
follows: Judgment affirmed, without costs. Upon the appeal
herein there were presented and necessarily passed upon ques-
tions under the Constitution of the United States, viz.: Whether
plaintiffs have been deprived of property without due process
of law under the Fourteenth Amendment of the Constitution of
the United States; and whether Local Law No. 6 of the City of
Schenectady, effective April 16, 1935, is repugnant to the Con-
stitution of the United States. The Court of Appeals held that
there was no denial of any constitutional right of the plaintiffs.
[See 309 N. Y. 701.] .

Currrorp Hamp, Appellant, v. Crry or New Yorx et al.,
Respondents.

Submitted October 3, 1955; decided November 17, 1955.

856 a | |
Lee!

Irving A. Thau for motion.

Peter Campbell Brown, Corporation Counsel (Seymour B.
Quel and Fred Iscol of counsel), opposed. ,

Motion dismissed, with $10 costs and necessary printing dis-
bursements, upon the ground that the order sought to be
appealed from does not finally determine the action within the
meaning of the Constitution.

Syivia Harrman et al., Respondents, v. Anczto J. Paxiorro,
Appellant.

Submitted November 14, 1955; decided November 17, 1955.

Angelo J. Paliotto, in person, for motion.
Howard I. Brenner opposed.

Motion dismissed, with $10 costs, upon the ground that the
order sought to be appealed from does not finally determine a
special proceeding within the meaning of the Constitution.

i 857

Luorp J. Hosrorp, as Administrator of the Estate of Rzarna
M. Hosrorp, Deceased, Appellant, v. New Yorn Strats Enec-
tric & Gas Corporation, Respondent. Lxioyp J. Hosrorp, as
Administrator of the Estate of Luoyp A. Hosrorp, Deceased,
Appellant, v. New Yorx Srarz Exgcraic & Gas Corporation,
Respondent. Samuzt Pzrpicuo et al., as Administrators of
the Estate of Awrorverre Perpicuo, Deceased, Appellants, v.
New Yor Srate Execrric & Gas Corporation, Respondent.
Luoyp J. Hosrorp, as Administrator of the Estate of Luoyp
R. Dacxer, Deceased, Appellant, v. New Yorx Srare Exzc-
tric & Gas Corporation, Respondent. Luioyp J. Hosrorp, as
Administrator of the Estate of Recrya M. Hosrorp, Deceased,
Appellant, v. New Yorx Starz Execrric & Gas Corporation,
Respondent.

Submitted November 14, 1955; decided November 17, 1955.

Benjamin H. Siff for motion.
James M. Ryan opposed.

Motion dismissed, with $10 costs and necessary printing dis-
bursements, upon the ground that the order sought to be
appealed from does not finally determine the actions within the
meaning of the Constitution.

858 | a
se

J. Eewiy Hyyey, Appellant, v. Marre Nretssn et al., as Execu-
tors of Gzratp B. Nrexsen, Deceased, et al., Respondents.
Submitted November 14, 1955; decided November 17, 1955.

Motion for leave to prosecute appeal upon the original record
and typewritten additional papers and briefs denied.
— Ee
In the Matter of the Accounting of Ratrn Asxer, as Committee
of the Person and Estate of Laonarp Asxsr, an Incompetent
Person, Appellant. Drrarrmmnr or Manta Hyermye oF THE
Srars or New Yorr, Respondent.

Submitted November 14, 1955; decided November 17, 1955.

Walter H. Edson for motion.
Jacob K. Javits, Attorney-General (Margaret D. Hazel of
counsel), for Department of Mental Hygiene.

Motion for an order of substitution granted.

859

In the Matter of Epwarp Dovcusrry et al., Appellants, against
Srarzs Harnzss Racine Commission et al., Respondents.
Submitted October 17, 1955; decided November 17, 1955.

Jacob K. Javits, Attorney-General, for motion.
Sidney O. Raphael opposed.
Motion denied, with leave to renew upon the argument.

In the Matter of Davm M. Dunwine, Jz., Respondent, against
Aurrep EH. Turner, as City Manager of the City of Auburn,
Appellant.

Submitted November 14, 1955; decided November 17, 1955.

ee

Motion for an order vacating the order of the Court of
Appeals dated October 13, 1955, dismissing the appeal herein
and for extension of time to file the record on appeal, granted,
upon condition that appellant serve and file the record on appeal
and brief no later than November 21, 1955, in which event the
case is set down for the November, 1955, session of the Court
of Appeals; otherwise, motion denied.

In the Matter of Jacos Grumer, Fire Commissioner, as Trustee
of the Volunteer Firemen’s Benevolent Fund, Petitioner-
Respondent, against Rosurr W. Goovsovy et al., Respondents,
and James McNuury, as Trustee, and Micnamn Dung, as
Trustee and Treasurer of the Exempt Firemen’s Benevolent
Fund of the County of Kings, Respondent-Appellant.

Submitted October 17, 1955; decided November 17, 1955.

Peter Campbell Brown, Corporation Counsel, for motion.
Fred G. Moritt opposed.

Motion granted unless, on or before December 10, 1955, Henry
Butecke, one of the fund trustees, applies for an order substi-
tuting him as appellant in place of Michael Dulk, the only appel-
lant herein, who died since the appeal was taken to the Court
of Appeals (Civ. Prac. Act, § 557, subd. 2; § 579).

In the Matter of the Accounting of Arraur V. Junnunes, as
Coadministrator of the Estate of Waren F. Jennies,
Deceased, Respondent. Josupmine Jewwines et al., Appellants.

Submitted November 14, 1955; decided November 17, 1955.

861

Samuel A. Locker for motion.
Anthony B. Cataldo for respondent.

Application for leave to prosecute appeal as poor persons
and for assignment of counsel granted and Messrs. Vigdor and
Locker of 332 Hast 149th Street, New York City, assigned as
counsel to the appellants on the appeal herein. Case set down
for argument during the January, 1956, session of the Court
of Appeals.

Motion for stay granted.
De

In the Matter of Wiyturor Taytor, Respondent, against Louis
V. Vioy, as Assessor of the Town of Smithtown, et al,
Appellants.

Submitted October 17, 1955; decided November 17, 1955.

Guy O. Walser for motion.
Walter R. Kuhn opposed.

Motion dismissed upon the ground that the order sought to
be appealed from does not finally determine a special proceeding
within the meaning of the Constitution.

In the Matter of the Estate of Jonw» E. Wuson, Deceased.
Freperick H, Wison, as Executor of Jonn EH. Wuson,
Deceased, Respondent; Gzorcz S. Lupwice et al., Appellants.

Submitted November 14, 1955; decided November 17, 1955.

Motion for an extension of time to serve and file respondent’s
brief granted and respondent directed to serve and file the brief,
if any, within seven days from the date of this order.

Tam Propiz or ran Stats or Nuw Yorx, Respondent, v. Samusn
Aszgsxson et al., Appellants.

Submitted November 14, 1955; decided November 17, 1955,

Motion for further enlargement of time denied. [See 309
N. Y. 786.]

Ye 863

Tux Proriz or tHE State or New Yorx, Respondent, v. Cammo
Weston Lzyra, Appellant.

Submitted November 14, 1955; decided November 17, 1955.

Motion for enlargement of time granted and case set down
for argument during the January, 1956, session of the Court of
Appeals. [See 309 N. Y. 806.]

be
Tus Proriz or raz Stats or Nuw York, Appellant, v. Joun O.
Srrarron, Respondent.

Submitted November 14, 1955; decided November 17, 1955.

Motion for further enlargement of time granted, brief for
appellant, if any, to be served and filed no later than December
15, 1955, and case set down for argument during the January,
1956, session of the Court of Appeals. [See 309 N. Y. 846.]

De
Miu B. Rosenrimip, Respondent, v. Epwarp M. Rosenrrenp,
Appellant.
Miriam B. Rosenrmip, Respondent-Appellant, v. Epwarp M.
Rosenrietp, Appellant-Respondent. Cartes R. Barrerr,
Respondent.

Submitted November 14, 1955; decided November 17, 1955.

Motion by defendant, insofar as leave to have appeals heard
upon abridged records is sought, denied; motion insofar as an
extension of time to serve and file the records on appeal is
sought, granted and the records directed to be served and filed
no later than December 7, 1955.

Motion by plaintiff, insofar as an extension of time to serve
and file the record on appeal is sought, granted and the record
directed to be served and filed no later than December 7, 1955;
motion, insofar as leave to have the appeal heard upon copies
of the record before the Appellate Division is sought, denied.

Case set down for argument during the January, 1956, session
of the Court of Appeals. [See 309 N. Y. 807.]

Mary K. McNamun, Respondent, v. Rura A. Grirrin, Appellant.
Argued October 7, 1955; decided November 23, 1955.

865

Joseph Winston and Abraham M. Perkus for appellant.

Mortimer Goodman and John J. Grandefeld for respondent.

Albert Hirst for New York State Association of Life Under-
writers, amicus curia, in support of respondent’s position.

Judgment affirmed, with costs; no opinion.

Coneur: Conway, Ch. J., Dusmonp, Fup, Frozssrt., Vay
Vooruis and Burs, JJ. Taking no part: Dvs, J.

Tus Prorts or tan Starz or New Yorx, Respondent, v. Oscar
Bricks, Appellant.

Ta Propts or tag Stare or New Yorn, Respondent, v. Dan
JastRitLo, Appellant.

Tam Propiz or tae Stats or New Yoru, Respondent, v. Cucpnra
Levert, Appellant.

Argued October 6, 1955; decided November 23, 1955.

867

Howard A. Rochford and Raymond Keran O’Brien for
appellants.

Peter Campbell Brown, Corporation Counsel (Anthony
Curreri and Seymour B. Quel of counsel), for respondent.
Judgments affirmed ; no opinion.
Coneur: Conway, Ch. J., Desmonp, Fux, Frozssen, Van
Voorsis and Burks, JJ. Taking no part: Dvs, J.
a

Gzorce J. Guenpsywine, Individually and as Guardian ad Litem
of Gzores W. Gienpewnine, an Infant, Appellants, v. Waurer
Fexp, Defendant, and Exzanore Lunney et al., Respondents.

Argued October 11, 1955; decided November 23, 1955.

868 Ln} 7

Alfred M. Zisser for appellants.
Harold J. Tillou for respondents.

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Dusmonp, Fup, Frozssen, Vay
Vooruis and Burks, JJ. Taking no part: Dvyz, J.

Tue Props or raz Stars or New Yorn, Respondent, v. Vincant
Parzrwoster, Appellant.

Argued October 10, 1955; decided November 23, 1955.

Sidney G. Sparrow and Joseph Winston for appellant.

T. Vincent Quinn, District Attorney (George J. Regan of coun-
sel), for respondent.

Judgment affirmed; no opinion.

Coneur: Conway, Ch. J., Dusmonp, Funp, Frozsser, Van
Vooruis and Burs, JJ. Taking no part: Dyz, J.

Dorotuy Barrutz, Appellant, et al., Plaintiff, v. Lammerrs,
Iwo., et al., Respondents.

Argued October 12, 1955; decided November 23, 1955.

James A. Hughes and Joseph Speranza for appellant.
Wallace H. Miller and James R. Ulsh for respondents.

Judgment affirmed, with costs; no opinion.

Coneur: Conway, Ch. J., Desmonp, Fuxp, Frozssen, Var
Voornis and Burxs, JJ. Taking no part: Dvyz, J.
— Es
Franois W. Baxenpats et al., Respondents, v. Property OWNERS
Association or Norta Suorz Acres, Inc., et al., Appellants,
and Erwin J. Krizex, Respondent.

Argued October 11, 1955; decided November 23, 1955.

873

John Marshall Lockwood, 8S. M. Meeker, D. Edward Meeker
and John B. Doyle for appellants.

Thomas J. Irving for Francis W. Baxendale and another,
respondents.

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Fup, Frozssen, Van
Vooruis and Burxz, JJ. Taking no part: Dyn, J.

Ce
Leer
Josspaine Caruist et al., Appellants, v. Haron I. Coxe et al.,

"Respondents.

Argued October 11, 1955; decided November 23, 1955.

875

Joseph J. Lombardo and Francis M. Verrilli for appellants.
Joseph Fennelly, William 8. O’Conmmor and Gregory A. Lee
for Harold I. Cole and another, respondents.
Joseph Kane and Aleaander Orr for William Kuhnle, respond-
ent.
Judgment affirmed, with costs; no opinion. .
Concur: Conway, Ch. J., Dusmonp, Furp, Frozssen, Vay
Voornis and Burks, JJ. Taking no part: Dvn, J.
a
In the Matter of Wusstow F. C. Guzsr, Appellant. Bzssem=r
Trust Company, as Cotrustee under an Indenture of Trust

Made by Winston F. C. Guusr, Respondent; Jams J. McDon-
oven, as Special Guardian for Infants, Respondent.

Argued October 18, 1955; decided November 28, 1955.

Sol A. Rosenblatt and Charles Roden for appellant.
James J. McDonough, special guardian for infants whose
rights may be affected by this proceeding, respondent.

Order affirmed, with costs to the special guardian; no opinion.

Concur: Conway, Ch. J., Desmonp, Fup, Frozsser, Van
Vooruis and Burs, JJ. Taking no part: Dye, J.
Ee
Atine Mol. Josep, Individually and as Administratrix of the
Estate of Azarua Josepn, Deceased, Respondent, v. CHarLes
McVuicu et al., Individually and as Executors and Trustees
under the Will of Lewis S. Morris, Deceased, et al., Defend-
ants, and Crry or New Yorx, Appellant.

Argued October 17, 1955; decided November 23, 1955.

879

Peter Campbell Brown, Corporation Counsel (Fred Iscol and
Seymour B. Quel of counsel), for appellant.
Morris G. Zirin and Gerald H. Lessuk for respondent.
Order affirmed, with costs. Questions certified answered in
the affirmative. No opinion.
Concur: Conway, Ch. J., Desmonp, Funp, Frozssen and Van
Voornis, JJ. Taking no part: Dv and Burxs, JJ.
Es
Vivian J. Bupuson, as Administratrix of the Hstate of Louis H.
Bupvson, Deceased, Respondent, v. Waxn1am Curtis, Defend-
ant, and Crry or Warertown, Appellant.

Argued October 17, 1955; decided November 23, 1955,

Kenneth W. Brett, Corporation Counsel, for appellant.
Lawrence Conboy for respondent.

Order affirmed, with costs. Question certified answered in the
affirmative. No opinion.

Concur: Conway, Ch. J., Desmonp, Furp, Frozssen and Vay
Vooruis, JJ. Taking no part: Dyn and Burxz, JJ.

a a
eee!
Renzzs R. Moryxa, as Administratrix of the Hstate of

Micuart Morvxa, Deceased, Respondent, v. Crry or OswEco,
Appellant.

Argued October 17, 1955; decided November 23, 1955.

David J. Read, City Attorney, for appellant.
D. Charles O’Brien for respondent.
Order affirmed, with costs. Question certified answered in
the affirmative. No opinion.
Coneur: Conway, Ch. J., Desmonn, Fup, Frozssun and Vay
Vooruis, JJ. Taking no part: Dyz and Burks, JJ.
Ee

In the Matter of Atona J. Eoutz, Appellant, against Epwarp
Corst, as Industrial Commissioner of the State of New York,
et al., Respondents.

Argued October 11, 1955; decided November 23, 1955.

884 Pe =
ss

Charles J. McDonough for appellant.

Jacob K. Javits, Attorney-General (Michael P. Geraci, James
O. Moore, Jr., and Matthew A. Tiffany of counsel), for
respondents.

Order affirmed, without costs; no opinion.

Concur: Conway, Ch. J., Dusmonp, Funp, Frozssen, Van
Voornis and Burks, JJ. Taking no part: Dvn, J.

In the Matter of the Accounting of Frevericx H. Oszorn, as
Successor Trustee under the Will of Gracz Breztow, Deceased,
Respondent. Evsnyn C. Emuer et al., Respondents-Appel-
lants; Ruopz Istanp Hosprran Trust Company, as Executor
of Everyn B. Cuarr, Deceased, Appellant; Paut D. O’Brizn,
as Executor of Francis Povirysy Crarx, Deceased, et al.,
Respondents.

Argued October 12, 1955; decided November 23, 1955.

Leslie D. Dawson and Sidney W. Davidson for appellant.
Winthrop 8S. Emmet for Evelyn C. Emmet and another,
respondents-appellants.

John Drew for Paul D. O’Brien, respondent.

Order affirmed, with costs to all parties appearing separately
and filing separate briefs payable out of the estate; no opinion.

Coneur: Conway, Ch. J., Dusmonp, Futp, Frozsser, Vaw
Vooruis and Burxs, JJ. Taking no part: Dvn, J.

In the Matter of Anu, Green, Appellant, against Josepx
D. MoGonpricx, as State Rent Administrator, et al.
Respondents.

Argued October 11, 1955; decided November 23, 1955.

888

a
Lene
Julian T. Abeles for appellant.
Jacob B. Ward and Hortense W. Gabel for Joseph D. MeGold-
rick, State Rent Administrator, respondent.
Robert S. Fougner for Katherine Barakat, respondent.
Order affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Dusmonp, Fup, Frozssen, Van
Vooruis and Bure, JJ. Taking no part: Dvys, J.

In the Matter of Emray Reaury Corr., Appellant, against
Cuartes Aras, as State Rent Administrator, Respondent.

Argued October 14, 1955; decided November 23, 1955.

a [| 889

Arnold Schildhaus for appellant.
Edward V. Alfieri and Nathan Heller for respondent.

Per Curiam. The record before us is so confused and so
incomplete as to prevent a determination as to whether or not
the State Rent Administrator’s application of the provisions of
the rent laws here involved is confiscatory and thereby denied
petitioner due process of law. This is an unusual case and,
in the interest of justice, it seems to us that the matter should
he remitted to the Rent Administrator with directions to con-
duct a full hearing (and keep a complete record thereof), at
which petitioner may call witnesses and present evidence con-
cerning the subject premises, their cost and value, the income
derived and the rents due and/or collected therefrom, the
expenses of operation and maintenance, the building violations
or other violations filed or recorded against the premises, the
repairs made in or about them, the reasonable cost of rectifying
violations, and also these and any other specific evidence should
he admitted bearing upon the question whether petitioner should
be permitted to withdraw the premises from the rental market.

The order of the Appellate Division and that of Special Term
should be reversed and the matter remitted to the. State Rent
Administrator to proceed in accordance with the Per Curiam
opinion herein.

Conway, Ch. J., Desmonp, Fuup, Frousser, Van Vooruis and
Burexs, JJ., concur; Dys, J., taking no part.

Orders reversed, ete.

| |
me
Tux Propie or tHe Stars or New Yorx, Appellant-Respondent,
v. Micuann Cremente, Respondent-Appellant.

Argued October 20, 1955; decided November 23, 1955.

802 Le

Leese!
Frank S. Hogan, District Attorney (Richard G. Denzer and

Paul A. Stone of counsel), for appellant-respondent.
Harris B. Steinberg for respondent-appellant.

Order affirmed ; no opinion.

Concur: Conway, Ch. J., Desmonp, Funp, Fronmssmn, Van
Vooruis and Burxs, JJ. Taking no part: Dyn, J.

In the Matter of the Claim of Jamus E. Branwican, Respondent,
against Psrer Terzaxis, Doing Business as Mzrropronrran
Panvrine anv Decoratine Co., et al., Appellants. Worxmen’s
Comprnsation Boarp, Respondent.

Argued October 18, 1955; decided November 23, 1955.

Paul F. Donohue for appellants.

Jacob K. Javits, Attorney-General (Gilbert M. Landy, James
0. Moore, Jr., and Roy Wiederswm of counsel), for Workmen’s
Compensation Board, respondent.

Order affirmed, with costs; no opinion.

Concur: Coxway, Ch. J.. Desmonn, Funp, Frozsser, Vax
Vooruis and Burxa, JJ. Taking no part: Dvys, J.

Tue Props or tas Stats or New Yoru, Appellant, v. Frank
Knraysrr, Respondent.

Argued October 20, 1955; decided November 23, 1955.

Edward §. Silver, District Attorney (Aaron Nussbaum of
counsel), for appellant.
Edward H. Levine and Vernon C. Rossner for respondent. .

Judgment affirmed; no opinion.

Concur: Conway, Ch. J., Desmonp, Fuup, Frozssen, Van

Vooruis and Burks, JJ. Taking no part: Dye, J.

De

Henry L. Bresstscuam, Respondent, v. Crry or New Yorx et al.,
Defendants, and Marosy Prumsive & Huatine Co., Inc., et al.,
Appellants. Marosy Prumsrve & Hearine Co., Inc., Third-
Party Plaintiff-Appellant, v. Brinsmapn Homss, Inc., Third-
Party Defendant, and Nactmrio Conrractine Co., Inc., Third-
Party Defendant-Respondent.

Argued October 4, 1955; decided November 23, 1955.

Patrick E. Gibbons and James O. Denniston for Marosy
Plumbing & Heating Co., Inc, appellant and third-party
plaintiff-appellant.

Samuel Shapiro and William J. Kenney for Naclerio Con-
tracting Co., Ine, appellant and third-party defendant-
respondent.

B. Leo Schwarz, Frank J. Cafaro and Marc Bazim for
respondent.

898 Zz

Lee

rere

Judgment affirmed, with costs to the plaintiff against both ©
defendants and with costs to the defendant Naclerio Contracting
Co., Inc. against the defendant Marosy Plumbing & Heating
Co., Inc. No opinion.
. Concur: Coxway, Ch. J., Desmonp, Funp, Frozsset, Var
Voornis and Burxs, JJ. Taking no part: Dyn, J.

as
In the Matter of Emuray Rzaury Corp., Appellant, against
Cuantes Aprams, as State Rent Administrator, Respondent.

Submitted October 10, 1955; decided November 23, 1955.

Edward V. Alfiert and Nathan Heller for motion.

Arnold Schildhaus opposed.

Motion to dismiss appeal denied.

Tur Propie or tHe Stars or New Yors, Respondent, v.
Nicnoras Mawreeps, Appellant.
Submitted October 3, 1955; decided November 23, 1955.

ee

Motion for enlargement of time granted and case set down
for argument during the January, 1956, session of the Court
of Appeals.

een! 899

a
Leerssen!
Motion for leave to prosecute appeal upon the original record
and for assignment of counsel granted and Edward J. Filipo-
wicz, Hsq., 226 Union Street, Poughkeepsie, New York, assigned
as counsel to appellant on the appeal herein.

M. Francrs Manone, Appellant, v. Scars or New Yorx,
Respondent. (Claim No. 32327.)

Argued November 18, 1955; decided November 30, 1955.

Jacob K. Javits, Attorney-General (James O. Moore, Jr., and
John R. Davison of counsel), for motion.
M. Francis Malone, appellant in person, opposed.

Appeal dismissed upon the ground that no constitutional
question is directly involved (Civ. Prac. Act, § 588, subd. 1,

par. [a]).
Pe

In the Matter of the Claim of Duans I. Incranam, Respondent,
against Lanz Construction Corporation et al., Appellants.
Worxmen’s Compensation Boarp, Respondent.

Argued October 19, 1955; decided December 1, 1955.

901

John E. Knauf for appellants.
Vincent P. Pickett for Duane I. Ingraham, respondent.

Order affirmed and order absolute directed against appellants
on the stipulation herein, with costs. No opinion.

Coneur: Conway, Ch. J., Desmonp, Fup, Fromssmi, Vax
Voornis and Burwn, JJ. Taking no part: Dvys, J.

Dn
Mvyrarin L. Prenarenii, Respondent, v. Gumper Brorners, Inc.,
Appellant.

Argued October 18, 1955; decided December 1, 1955.

John Nielsen and John P. Smith for appellant.
Zenaida Drabkin and Grace H. Connell for respondent.

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Dusmonp, Fup, Frozssen, Van
Vooruis and Burke, JJ. Taking no part: Dyn, J.

; 903

Tue Proptz or tax Stars or New Yorn, Respondent, v.
Norman Roynz, Appellant.

Axgued October 20, 1955; decided December 1, 1955,

Harris B. Steinberg, Sylvester Cosentino, Irving Mendelson

and A. Cuyler Ten Eyck, Jr., for appellant.

Frank S. Hogan, District Attorney (Charles W. Manning of
counsel), for respondent.

Judgment of conviction affirmed; no opinion.

Concur: Conway, Ch. J.. Desmonp, Fun, Frozssen, Vaw
Voornts and Burs, JJ. Taking no part: Dvs, J.

Wepre Rzaury Corporation, Respondent, v. Micra, Karanas,
Appellant.

Argued October 14, 1955; decided December 1, 1955.

Charles O. Burney, Jr., John R. Pillion and Nicholas Konst
for appellant.
Robert S. Lesher and T. Kayler Jenkins for respondent.

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Dusmonp, Fuup, Fronssen, Vaw
Vooruis and Burks, JJ. Taking no part: Dvys, J.
as
Fuorence Smverman, as Administratrix of the state of
Irvine Suuvenman, Deceased, Respondent, v. Apranam Sriver-
man, Defendant, and Gasrren Fisuur et al., Appellants.

Argued October 14, 1955; decided December 1, 1955.

| 907
CO

Joseph J. Brophy, John W. Trapp and Desmond T. Barry for
appellants.

Bernard Meyerson and Herman E. Hoberman for respondent.

Judgment affirmed, with costs; no opinion.

Coneur: Conway, Ch. J., Desmonp, Fup, Frozssen, Van
Vooruis and Burks, JJ. Taking no part: Dvyz, J.

Tun Proprius or Taz Stars or Nrw Yorx, Respondent, v. Wiit1am
Byzrs, Also Known as Wiisam Syyper, Appellant.
Argued October 19, 1955; decided December 1, 1955.

Rudolph Stand, J. Michael Solomon, Ralph W. Kerbs and
Darwin W. Telesford for appellant.
Frank 8. Hogan, D: Attorney (Richard G. Denzer and
Leonard E. Reisman of counsel), for respondent.
Judgment of conviction affirmed; no opinion.

Concur: Conway, Ch. J., Desmonp, Funp, Frozsser, Van
Voornis and Burxn, JJ. Taking no part: Dys, J.

Cartes Ovussayo et al., Appellants, v. Awrmony Crvicozo,
Respondent.

Submitted November 21, 1955; decided December 1, 1955.

Lee!

Sol I. Kroll for motion.

J. David Jutkowite opposed.

Motion dismissed upon the ground that the Court of Appeals

lacks jurisdiction to entertain the motion (Civ. Prac. Act, § 589,
subd. 1, par. [b]).

a
Muuron M. Freezer et al., on Behalf of Themselves and All Other

Tenants of Glen Oaks Village, Inc., Similarly Situated, Appel-
lants, v. Guew Oaks Vizaen, Ivo., et al., Respondents.

Submitted November 28, 1955; decided December 1, 1955.

PCs
Motion to dismiss appeal denied.

Janxa Corporation, Respondent, v. Fmeman’s Funp Inpemwrry
Company et al., Appellants.

Submitted November 21, 1955; decided December 1, 1955.

Thomas P. Curtin and Jeremiah G. Mahony for motions.
Chester Bordeau and John M. Johnston opposed.

Motions dismissed, with $10 costs, upon the ground that the
Court of Appeals lacks jurisdiction to entertain the motions
(Civ. Prac. Act, § 589, subd. 1, par. [b]).

Rosa BE. Kuzrs, Respondent, v. Antaur J. Kiem, Appellant.
Submitted November 14, 1955; decided December 1, 1955.

911

Jacob W. Friedman for motion.
Stanley Rosenthal opposed.

Motion dismissed upon the ground that the order sought to
be appealed from does not finally determine the action within
the meaning of the Constitution.

Po
Reema Levy, Appellant, v. Fireman’s Funp Inpemyrry’
Company, Respondent.

Submitted November 28, 1955; decided December 1, 1955.

Lyman Stansky for motion.
Thomas P. Curtin opposed.

Motion dismissed, with $10 costs and necessary printing dis-
bursements, upon the ground that the Court of Appeals lacks
jurisdiction to entertain the motion (Civ. Prac. Act, $ 589,
subd. 1).

In the Matter of Gyrsum Bumpre Mareriars Corr., Appellant.
Crry or New Yorx, Respondent.

Submitted November 21, 1955; decided December 1, 1955.

Isidore Ginsberg for motion.

Peter Campbell Brown, Corporation Counsel (Harry LE.
O’Donnell, Benjamin Offner and Meyer Scheps of counsel),
opposed.

Motion dismissed, with $10 costs and necessary printing dis-
bursements, upon the ground that the order sought to be
appealed from does not finally determine the proceeding within
the meaning of the Constitution.

[|
In the Matter of Jacos Grumut, Fire Commissioner, as Trustee
of the Volunteer Firemen’s Benevolent Fund, Respondent,
against Roserr W. Goopzopy et al., Respondents, and James

McNovtry, as Trustee, and Micnazn Dux, as Trustee and

Treasurer of the Exempt Firemen’s Benevolent Fund of the

County of Kings, Appellant.

Submitted November 28, 1955; decided December 1, 1955.

Motion for an order of substitution granted and Henry
Butecke, one of the fund trustees, substituted as a party appel-
lant in place of Michael Dulk, deceased, to continue the prosecu-
tion of the appeal herein (Civ. Prac. Act, § 557, subd. 2; § 579).
[See 309 N. Y. 860.]

7 913

In the Matter of the Arbitration between Erne. Zrrvzr, as
Administratrix of the Estate of Max Zrrnzr, Deceased,
Respondent, and Wr111m Karpmay et al., Appellants.

Submitted November 28, 1955; decided December 1, 1955.

Seymour Cohen for motion for stay and in opposition to
motion to dismiss appeal.

Irving Lemov in opposition to motion for stay and for motion
to dismiss appeal.

Motion for stay granted and case set down for argument
during the first week of the January, 1956, session of the Court
of Appeals.

Cross motion to dismiss appeal denied.

Tux Pxzorie or tux Srare or New Yorx, Appellant, v. Aurrep
Souza Caverto, Respondent.

Submitted November 28, 1955; decided December 1, 1955.

914

James E. Gavagan for motion to dismiss appeal.
Russell G. Hunt, District Attorney, opposed.

Motion to dismiss appeal denied.

Motion to have appeal heard during the November, 1955,
session of the Court of Appeals denied and case set down for
argument during the first week of the January, 1956, session of
the Court of Appeals.

Tan Propie or tHe Stare or New York, Appellant, v. Jonn
Formato, James Moreuio, Pasquatz Lerorz and Huco Tors,
Respondents.

Submitted November 28, 1955; decided December 1, 1955.
Es
Motion for a further enlargement of time granted and case

set down for argument during the January, 1956, session of the
Court of Appeals.

| 915

Mirum B. Rosenrreip, Respondent, v. Epwanp M. RosenFie.p,
Appellant.

Miu B. Roszyriip, Respondent-Appellant, v. Hpwarp M.
Rosrnrieip, Appellant-Respondent. CHartes R. Barrerr,
Respondent.

Submitted November 28, 1955; decided December 1, 1955.

Motion by plaintiff for reargument of that portion of her
previous motion for leave to have her appeal in action No. 2
heard upon available copies of the record before the Appellate
Division granted, the same relief granted to defendant upon his
two appeals, the records in both appeals to be filed within two
weeks from the date of this order together with printed addi-
tional papers, and case set down for argument during the
January, 1956, session of the Court of Appeals. [See 309 N. Y.
807, 863.]

: as

Ricuarp Vaw Hovren, an Infant, by Hursmrr Van Hovren, His
Guardian ad Litem, et al., Appellants, v. Nsw York, New
Haven anp Harrrorp Ramroap Company, Respondent.

Submitted November 28, 1955; decided December 1, 1955.

ee
Motion for leave to prosecute appeal as poor persons and for
assignment of counsel granted and John M. Wilson, Esq., and
Harry A. Spiegelman, Hsq., of 215 Montague Street, Brooklyn,
New York, assigned as counsel to appellants on the appeal
herein.
bn

In the Matter of Hucn A. Covisourn, Appellant, against
Muon L. Burns, as County Treasurer of Suffolk County,
Respondent.

Argued October 13, 1955; decided December 28, 1955.

917

Charles E. Lapp, Jr., for appellant.

Lloyd P. Dodge, County Attorney (Pierson R. Hildreth of
counsel), for respondent.

Order affirmed; no opinion.

Concur: Conway, Ch. J., Desmonp, Furp, Frozsssz, Van
Vooruis and Burgz, JJ. Taking no part: Dvyz, J.

In the Matter of Coutzcrors Cius, Respondent, against Wmi1am
E. Boytanp et al., Constituting the Tax Commission of the
City of New York, Appellants. [22 EH. 35th St., Borough of
Manhattan.]

Argued November 16, 1955; decided December 28, 1955.

Peter Campbell Brown, Corporation Counsel (Edith I. Spi-
vack, Morris Handel and Daniel A. Muccia of counsel), for
appellants.

John A. Sullivan, Cornelius W. Wickersham and Carlton G.
Champe for respondent.

Order affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Furp, Frozssen and Vaw
Vooruis, JJ. Taking no part: Dyz and Burxz, JJ.

[|
Wurm J. Hawxrvs, Respondent, v. Gray Muran, Propvors,
Inc., et al., Appellants, et al., Defendants.
Argued October 12, 1955; decided December 28, 1955.

921

John W. Hollis for appellants.
Alton J. Wightman for respondent.

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Furp, Frozssen, Van
Voornis and Burns, JJ. Taking no part: Dvs, J.

In the Matter of Herszrt L. Brickman, Appellant, against
Rovert F. Wacwer, as Mayor of the City of New York,
Respondent.

Argued November 17, 1955; decided December 28, 1955.

923

Harold H. Corbin and Edward J. Bennett for appellant.
Peter Campbell Brown, Corporation Counsel (W. Bernard
Richland of counsel), for respondent.

Order affirmed; no opinion.

Concur: Coyway, Ch. J., Desmonp, Fuxp, Froussen and Van
Voornis, JJ. Taking no part: Dyz and Burgg, JJ.

Tur Propie or tHE Stars or New Yorx, Respondent, v. Micnarn
Conrorr1, Appellant.

Argued October 10, 1955; decided December 28, 1955.

924

William F. Horan for appellant.
Fred A. Dickinson, District Attorney (Frank C. Bowers, Jr.,
of counsel), for respondent.

Judgment affirmed; no opinion.

Concur: Conway, Ch. J., Dusmonp, Fup, Frozssan, Van
Voornis and Burgs, JJ. Taking no part: Dvn, J.
as

In the Matter of Harry Krauss, Appellant. Josmpa P. Vacca-
RELLA, a8 Mayor of the City of Mount Vernon, Respondent.

Argued November 14, 1955; decided December 28, 1955.

John W. Guazetta for appellant.

ek Zimmerman, Corporation Counsel (William Macy of
counsel), for respondent.

Order affirmed; no opinion.

Concur: Conway, Ch. J., Desmonp, Funp, Frozsser, Van
“is and Burns, JJ. Taking no part: Dvn, J.

Tur Propis or tHe Stare or New Yorx, Appellant, v. Jonw H.
Greznwoon, Respondent.

Argued October 18, 1955; decided December 28, 1955.

|

927

Angus G. Saunders, District Attorney (Robert M. Weldon of
counsel), for appellant.

Allan G. Patch and Russell Spencer for respondent.

Order affirmed; no opinion.

Coneur: Conway, Ch. J., Desmonp, Funp, Frozssnz, Van
Voornis and Burxs, JJ. Taking no part: Dvs, J.

In the Matter of Daynis F. Sunzivan et al., Appellants, against
Oscar M. Tavnor et al., Constituting the Civil Service Com-
mission of the State of New York, Respondents.

Submitted November 16, 1955; decided December 28, 1955.

Morris Shapiro, Edward M. Edenbawm and Murray Sendler
for appellants.

, 929

Pe
ee
Jacob K. Javits, Attorney-General (Daniel M. Cohen and
James O. Moore, Jr., of counsel), for respondents.

Order affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Dzsmonp, Funp, Frozssen, Vaw

Voornis and Burss, JJ. Taking no part: Dvys, J.

—

In the Matter of Waaomm T. Wuaten, Respondent, against
Gzorcr P. Mowacuan et al., Constituting the Board of
Trustees of the Police Pension Fund of the City of New York,
Appellants.

Argued November 17, 1955; decided December 28, 1955.

| 931

P|
Leer!
Peter Campbell Brown, Corporation Counsel (Henry J.
Shields and Seymour B. Quel of counsel), for appellants.
A, Bernard King and Edward H. Freiberger for respondent.

Order affirmed, with costs; no opinion.
Concur: Conway, Ch. J., Dusmonp, Funp, Fronssen and
Van Vooruts, JJ. Taking no part: Dyz and Burs, JJ.
a

In the Matter of Francis A. O’Hara, Respondent, against
Gzorce P. MonacHan et al., Constituting the Board of
Trustees of the Police Pension Fund, et al., Appellants.

Argued November 17, 1955; decided December 28, 1955.

933

Peter Campbell Brown, Corporation Counsel (Henry J.
Shields and Seymour B. Quel of counsel), for appellants.

Lester G. Knopping and George Moon for respondent.
Order affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Funv, Froxssen and
‘Van Vooruis, JJ. Taking no part: Dyz and Burs, JJ.

In the Matter of Davm M. Dunwine, Jz., Respondent, against
Aurrep EH, Turner, as City Manager of the City of Auburn,
Appellant.

Submitted November 22, 1955; decided December 28, 1955.

935

Anthony J. Contiguglia, Corporation Counsel, for appellant.
George B. Shamon for respondent.

Order affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Funp, Frozssen, Van
Voornis and Burks, JJ. Taking no part: Dyn, J.

Samue. Epeimay, on Behalf of Himself and All Other Stock-
holders of 123 Cedar Street Corporation Similarly Situated,
and on Behalf of Said Corporation, Appellant, v. Sam Frrvpex,
Jr., et al., as Executors of Eris A. Conny, Deceased, et al.,
Respondents.

Argued October 5, 1955; decided December 28, 1955.

Jay Leo Rothschild for appellant.
Samuel Gottlieb, Alvin T. Sapinsley, respondent in person,
and Harry Gicsow for Sam Frindel, Jr., and others, respondents.

| 937

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Funp and Frozssen, JJ.
Vay Vooruis and Burxz, JJ., dissent and vote to reverse upon
the ground that the personal representatives of Hlias A. Cohen
were under a fiduciary obligation to come forward with an
explanation of the purpose to which these funds of 123 Cedar
Street Corporation were applied, and that under the evidence
in this record these funds must be held to have been expended.
for the purchase of an equity interest as contended by plaintiff.
Taking no part: Dvys, J.

Herier Canpy Company, Ino., Appellant, v. 385 Grarp AvENUB
Reaury Corp., Respondent.

Argued November 14, 1955; decided December 28, 1955.

939

a
Deel
Martin L. Conrad, Harry Schneider and Irving J. Galpeer
for appellant.
Leon M. Labes for respondent.

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Fuxp, Frozssez, Vaw
Voornis and Burks, JJ. Taking no part: Dys, J.

In the Matter of Laan Oxuw et al., Respondents, against
Department or Stars or tHe Srarn or New York et al,
Appellants.

Argued November 23, 1955; decided December 28, 1955.

ee! 941

a
err
Jacob K. Javits, Attorney-General (Philip J. Fitegerald and
James O. Moore, Jr., of counsel), for appellants.
Charles B. Close for respondents.

Order affirmed, with costs; no opinion.
Coneur: Conway, Ch. J., Desmowp, Fup, Fronssen, Van
Voornis and Burxz, JJ. Taking no part: Dvs, J.
[|

Tur Pzoris or tas Stars or New Yorx, Appellant, v. Pam S.
Savacs, Respondent.

Argued December 1, 1955; decided December 28, 1955.

William B. Lawless, Jr., Corporation Counsel (Aaron Wein-
stein of counsel), for appellant.
Dana B. Hellings and Ralph Ulsh for respondent.

Order affirmed; no opinion.

Concur: Conway, Ch. J., Funp, Frozsszn, Van Voorxis,
Burs and Oouy,* JJ.

a
In the Matter of the Construction of the Will of Laura CO.
Marres, Deceased. Jamus C. Lampern et al., Appellants;
Bangers Trust Company, as Executor of Laura C. Marrns,
Deceased, et al., Respondents.

Argued October 12, 1955; decided December 28, 1955,

* Designated pursuant to section 5 of article VI of the State Constitution in
the temporary absence of DesMonp and Dyn, JJ.

944,

Charles H. Tuttle and Alfred D. Clark for Harvey E. Lam-
beth, appellant.

Edmund B. Bellinger for James C. Lambeth, appellant.

George L. Genung, special guardian for Harvey E. Lambeth.
Jr., and another, infants, appellants.

Laurence D. Kieran for Edward C. Mattes, respondent.

Irving L. Schanzer and Henry S. Hooker for Bankers Trust
Company, respondent.

Order affirmed, with costs to all parties appearing separately
and filing separate briefs payable out of the estate; no opinion.

Concur: Conway, Ch. J., Desmonp, Funp, Van Voornis and
Borxz, JJ. Fronsset, J., dissents and votes to reverse in the
following memorandum: I dissent and vote to reverse. When
the testatrix, in the same paragraph in which she directed pay-
ment of her debts and administration expenses, directed that
‘all? estate taxes ‘‘ shall be paid out of my residuary estate ”’
and further directed in paragraph seventh, which disposed of
her residuary estate, that her executors divide said residuary
“into twelve parts as nearly equal as possible ’’, she made it
unmistakably clear that she sought equality of beneficial inter-
ests as among the residuary beneficiaries and that all estate
taxes be paid out of said residuary estate before there was any
division. To hold otherwise, in my judgment, is tantamount
to rewriting her will in this respect. Taking no part: Dyz, J.

In the Matter of Dupizy T. Huw, Appellant, against Boarp or
Epucarion or Cunwrrat Scxoox, Disrricr No. 2 or Towns oF
Gurnvintz, Scuenzcrapy County, Amsrerpam, MowrcomEry
County, asp Cuaruron, Saratoca County, Respondent.

Argued November 14, 1955; decided December 28, 1955.

946

Richmond D. Moot for appellant.

Roy W. Peters for respondent.

Charles A. Brind, Jr., John P. Jehu, Elizabeth M. Eastman
and George B. Farrington for James HE. Allen, Jr., Commis-
sioner of Education of the State of New York, amicus curiae,
in support of respondent’s position.

Vandewater, Sykes, Heckler & Galloway, amicus curiae, in
support of respondent’s position.

* Order affirmed; no opinion.

Coneur: Conway, Ch. J., Dusmonp, Furp, Fromssen, Van
Vooruis and Burks, JJ. Taking no part: Dvz, J.

Tux Pzoriz or tau Stare or New Yorn, Appellant, v.
Cuarius Gzrsx, Respondent.

Tue Pzorie or tae Stare or New York, Appellant, v.
Norman Crark, Respondent.

Argued November 30, 1955; decided December 28, 1955.

948 | | |

; eee
Edward 8. Silver, District Attorney (Jerome C. Ditore and
Aaron E, Koota of counsel), for appellant.

Edward H. Levine, Harold S. Mokotoff and Vernon C. Rossner
for respondents.

Orders affirmed; no opinion.

Concur: Conway, Ch. J., Funp, Frozsser, Van Voorxis,
Burge and Coun *, JJ.
be
J. Leon Lazazowrrz et al., Appellants, v. DommicK Vrraus et al.,
Respondents.
Submitted November 28, 1955; decided December 28, 1955.

PC
Motion for leave to appeal dismissed unless within twenty
days after the mailing, by registered mail by the Clerk of the
Court of Appeals, of the order to be entered on this decision,
together with a copy of rule XXI of the Rules of the Court of
Appeals, movants comply with said rule.
es
Henry Orr, Appellant, v. Murropotrran Jockey Cvs,
Respondent.
Submitted November 14, 1955; decided December 28, 1955.
Motion for reargument denied, with $10 costs and necessary
printing disbursements. [See 307 N. Y. 696.]
De
Tue Puoriz or rae Starz or New York, Respondent, v. Euzsano
Trornt, Alias Liseno Trorani, True Name, Exzsano Jony
Troranz, Appellant.
Submitted November 21, 1955; decided December 28, 1955.

Motion to withdraw as counsel to defendant on appeal herein
granted.

“Designated pursuant to section 5 of article VI of the State Constitution
in the temporary absence of Drsmonp and Dys, JJ.

949

J. Hews Hynzy, Appellant, v. Marm Nizxsen et al., as Execu-
tors of Grratp B. Nrexsen, Deceased, et al., Respondents.

Submitted January 3, 1956; decided January 5, 1956.

Motion to dispense with the printing of defendants’ exhibit
‘i’ in the record on appeal herein and to submit to the Court
of Appeals, in lieu thereof, the original of said exhibit granted.

In the Matter of Anruur R. Hansow et al., Respondents, against
Epwarp Racer, Appellant.

Submitted January 3, 1956; decided January 5, 1956.

Louis Waldman and Edward Rager, in person, for motion.
Harry J. Halperin and Israel A. Stein opposed.

Motion dismissed, with $10 costs and necessary printing dis-
pursements, upon the ground that the orders sought to be
appealed from do not finally determine the proceeding within
the meaning of the Constitution.

950

Rosa Honer et al., Appellants, v. Niagara Fans Gazerre
Pusiisuine Company, Respondent.

Submitted January 3, 1956; decided January 5, 1956.

Motion for leave to prosecute appeal as poor persons and
for assignment of counsel granted and Findlay, Argy & Hackett,
Niagara Falls, New York, assigned as counsel to appellants on
the appeal herein.

a

In the Matter of the Accounting of Arraur V. Jenwwines, as
Coadministrator of the Estate of Watrer F. Junnivas,
Deceased, Respondent. Jospin Junwines et al., Appellants.

Submitted January 3, 1956; decided January 5, 1956.

Motion for an order extending time of appellants to serve
and file the record on appeal and their brief herein and adjourn-
ing the argument of appeal granted and case set down for argu-
ment during the February, 1956, session of the Court of Appeals;
the record on appeal to be served and filed by January 9, 1956,
and appellants’ brief, if any, to be served and filed by January
16, 1956.

Le

Tuer Propis or THe Stare or New Yorn, Respondent, v. Frank
Bowino, Appellant.

Submitted October 3, 1955; decided January 5, 1956.

Motion to amend remittitur, for reargument of appeal and
for reversal of the conviction granted to the extent that a rear-
gument of the appeal is ordered and case set down for argument
during the February, 1956, session of the Court of Appeals.
[See 291 N. Y. 541.]

ee! 951

Tur Proriz or raz Stare or New Yorx, Respondent, v. Vrro
Dr Srerano, Appellant.

Submitted January 3, 1956; decided January 5, 1956.

Motion for enlargement of time granted and case set down
for argument during the February, 1956, session of the Court
of Appeals.

De

Tur Pzopie or tax Stats or New Yorx, Respondent, v.
Nicuouas Manrrept, Appellant.

Submitted January 3, 1956; decided January 5, 1956.

Motion for further enlargement of time granted and case set
down for argument during the February, 1956, session of the
Court of Appeals.

EE

Tuer Prope or tae Stars or New Yorx, Respondent, v. Josspy
Narrurno, True Name Josspn Francis Norrugno, Appellant.

Submitted January 3, 1956; decided January 5, 1956.

ee

Motion to have appeal heard upon twelve copies of the
record before the Appellate Division and printed additional
papers granted.

Tus Psorre or tan Scare or New Yorx, Respondent, v.
Sesasrran Orcrnont, Otherwise Known as CHarzes Orro,
Appellant.

Submitted January 3, 1956; decided January 5, 1956,

Motion for leave to have appeal heard upon the original record
and typewritten briefs granted.

952 bn} 7
eee

Tur Prope or tan Stare or New York, Plaintiff-Appellant,
and Irvine Layemure et al., Plaintiffs-Intervenors-Appellants,
v. System Propertiss, Ino., et al. Trusrezs or Darrmoura
Cotnax et al., Defendants-Appellants, and Couwry or Warrun
et al., Defendants-Respondents.

Submitted January 3, 1956; decided January 5, 1956.

Motion by plaintiffs-intervenors-appellants to have appeal
heard upon one copy of the record before the Appellate Divi-

sion granted.

In the Matter of the Probate of the Will of Samunn Ricuarpson,
Deceased. Atma Grappen, Appellant; Marry Sosrn et al.,
as Executors of Samuzn Ricnarpson, Deceased, Respondents.

Submitted November 14, 1955; decided January 5, 1956.

Leon Savage and David C. Lewis for motion.
Margaret Karlin opposed.

az 953

a
ee!
Motion dismissed upon the ground that the order sought to

be appealed from does not finally determine the proceeding
within the meaning of the Constitution.

a
Waisam L. Wass, Appellant, v. Starn or New York, Respond-
ent. (Claim No. 31734.)
Submitted January 3, 1956; decided January 5, 1956.

PC

Motion for leave to prosecute appeal as poor person and for
assignment of counsel granted and David G. Fellows, Esq., and
James J. Barrett, Hsq., 500 University Building, Syracuse, New
York, assigned as counsel to appellant on the appeal herein.

|
Mrrum B. Rosenrmp, Respondent, v. Hpwarp M. Roszwrtexp,
Appellant.
Mimum B. Rossyrimip, Respondent-Appellant, v. Epwarp M.
Rosanrimip, Appellant-Respondent.

Submitted January 3, 1956; decided January 5, 1956.

Motion by plaintiff’s counsel for an order deferring the time
for the exchange of briefs between defendant and plaintiff in
the above-entitled appeals granted to the extent that the briefs
are directed to be served within two days from the date of
this order.

Motion by plaintiff for an adjournment of argument and for
an extension of time to serve and file briefs denied. [See 309
N. Y. 807; 309 N. ¥. 863; 309 N. Y. 915.]

a
Parriok EH. Srawron, an Infant, by Bzarrice Srawron, His
. Guardian ad Litem, et al., Respondents, v. Tamr Amt Reaury
Company, Iye., et al., Appellants.

Argued October 18, 1955; decided January 12, 1956,

a Pe 955

Frank J. Horan and Thomas H. Bivin for appellants.
Hyman R. Friedman, George W. Loomer and Samuel Justin
Jackman for respondents.

Per Curiam. On the record before us, there is no doubt that
plaintiff was a trespasser as matter of law, rather than a licensee,
insofar as the operation of the elevator was concerned. (See
Carbone v. Mackchil Realty Corp., 296 N. Y. 154; Sanders v.
Favorable Reality Corp., 290 N. Y. 591; Zaia v. Lalex Realty
Corp., 287 N. Y. 689; Mendelowitz v. Neisner, 258 N. Y. 181.)
And it is equally plain that the record is devoid of any proof
sufficient to warrant a finding that defendant breached a duty
owed a trespasser. (See, e.g., Carbone v. Mackchil Realty Corp.,
supra, 296 N. Y. 154, 158-159; Vaughan v. Transit Development
Co., 222 N. Y. 79; Barry v. New York Central é H. R. R. R. Co.,
92.N. Y. 289, 293.) If that were all there was to this case, then,
the judgment would have to be reversed and the complaint
dismissed. However, there is more.

Plaintiff endeavored, as we read the record, to introduce
testimony to demonstrate that there was a practice of permit-
ting third persons to operate and use the elevator by themselves,
in the absence of any employee of defendant. Exclusion of that
testimony constituted error, requiring a new trial, for, if evi-
dence had been adduced tending to show that there had been
extensive and notorious operation of the elevator by tenants
and others visiting the premises and that defendant owner had
acquiesced in and permitted such user without demur, a basis
would have existed for a finding by the jury that plaintiff was
a licensee rather than a trespasser. (Cf. Mayer v. Temple Prop-
erties, 307 N. Y¥. 559, 561 et seq.; Antonio v. Long Is. R. R. Co.,
290 N. Y. 718; Byrne v. New York Central é H. R. R. BR. Co.,
104 N. Y. 362, 366.)

The judgment of the Appellate Division should be reversed
and a new trial granted, with costs to abide the event.

Conway, Ch. J., Desmonp, Funp, Frozssen, Van Vooruis and
Burks, JJ., concur; Dvz, J., taking no part.

Judgment reversed, etc.

In the Matter of Jacos Grumer, Fire Commissioner, as Trustee
of the Volunteer Firemen’s Benevolent Fund, Respondent,
against Roszrr W. Goopzopy et al., Respondents, and Henry
Bourscxz, as Trustee of the Exempt Firemen’s Benevolent
Fund of the County of Kings, Appellant.

Argued October 19, 1955; decided January 12, 1956,

957

Edward D. Re and Fred G. Moritt for appellant.

Peter Campbell Brown, Corporation Counsel (Morgan N.
Lipton and Seymour B. Quel of counsel), for respondent.

Order affirmed, without costs; no opinion.

Concur: Conway, Ch. J., Dusmonn, Furp, Frozssen and
Van Vooruis, JJ. Taking no part: Dvyz and Burks, JJ.

In the Matter of the Claim of Morris L. Lzswrx, Appellant,
against Nationan Cartoapine Corporation et al., Respondents.
Worxmen’s Compznsation Boarp, Respondent.

Argued November 15, 1955; decided January 12, 1956.

959

Peter Keber for appellant.
Morgan F. Bisselle and Warren C. Tucker for National Car-
loading Corporation and another, respondents.

Order affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Dusmonp, Futp, Fromssen, Van
Voornis and Burgsz, JJ. Taking no part: Dvyz, J.

Premmr Kwyrrrixe Co., Inc., Respondent, v. Gzores Rapris
Yarns, Ino., Appellant.

Argued November 21, 1955; decided January 12, 1956.

Saul I. Radin for appellant.
Harold Korzenik for respondent.

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Fup, Frozssen, Vay
Vooruis and Burks, JJ. Taking no part: Dvs, J.
a

In the Matter of the Claim of Arranz C. Zanpren, Respondent,
against E. J. pv Powr pz Nemours & Company, Incorrorarsn,
Appellant, and Burrato Srainiuss Castine Corporation et al.,
Respondents. Worxmun’s Compmnsation Boarp, Respondent.

Argued October 13, 1955; decided January 12, 1956.

Edward L. Robinson, Jr., Abel Klaw, William M. Fay, Solon
J. Stone and William A. Bain, Jr., for appellant.

Jacob K. Javits, Attorney-General (Daniel Polansky, James
0. Moore, Jr., and Roy Wiedersum of counsel), for Workmen’s
Compensation Board, respondent.

964 Le | |

George J. Hayes, Bernard Katzen and Victor Fiddler for
Buffalo Stainless Casting Corporation and others, respondents.

Order affirmed, with costs; no opinion.

Coneur: Conway, Ch. J., Desmonp, Futp and Borxz, JJ.
Frozssez and Van Voornis, JJ., dissent and vote to reverse
upon the ground that there is no substantial evidence indicating
that’ the death of claimant’s husband was caused by his employ-
ment with EH. I. du Pont de Nemours & Company, Incorporated.
Taking no part: Dys, J.

Avira Currxss, an Infant, by Frances Cuzrxes, Her Guardian
ad Litem, et al, Appellants, v. Postan Lire Insurance Com-
pany, Respondent.

Argued November 21, 1955; decided January 12, 1956.

966 Le} 7
ee eee)

Leonard M. Mandel and Elliot B. Paley for appellants.
Orrin G. Judd and James F. Cahill for respondent.

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Dusmonp, Fup, Frozssez, Van
Voornis and Burks, JJ. Taking no part: Dyn, J.

EE
Mary Cassy, Respondent, v. Cznia Cassipy, Appellant, et al.,
Defendant.
Submitted January 3, 1956; decided January 12, 1956.

Motion for reargument and to amend the remittitur denied,
with $10 costs. [See 309 N. Y. 332.]

Louis Crescenzo et al., Appellants, v. Josep Rusrxow et al.,
Respondents.

Submitted January 3, 1956; decided January 12, 1956.

PCC
Motion to dismiss appeal denied upon the ground that rules I
and VI of the Rules of the Court of Appeals prescribe the
proper remedy.
Es

Gzorcz P. HExex, Plaintiff-Respondent, v. Harry M. Srevens,
Inc., Defendant-Respondent and New Yorx Yanxuus, Ino.,
et al., Defendants-Appellants, and Arirep Manvrenanos Corp.,
Defendant-Respondent.

Submitted January 9, 1956; decided January 12, 1956.

967

Irving Payson Zinbarg and Alan J. Berlan for motion.

William F. McNulty opposed.

Motion denied, with $10 costs of motion. (Nieman-Irving &
Co. v. Lazenby, 262 N. Y. 519; Ditiman v. Davis, 298 N. Y. 790,

791.)
ee

Exouanper Company, Lyc., a Delaware Corporation, Respondent,
v. Sou Tisaizr, Individually and as President of Bedding,
Curtain & Drapery Workers Union, Local 140, C.I.0., et al.,
Appellants.

Submitted January 9, 1956; decided January 12, 1956.

968

Victor Rabinowitz for motion.
James P. Durante opposed.

Motion for leave to appeal dismissed, with $10 costs, upon the
ground that the order sought to be appealed from does not
finally determine the matter within the meaning of the Constitu-
tion.

RicHarp Jewrraw, Respondent-Appellant, v. Harrrorp Acciunt
& Inpemyiry Company, Appellant-Respondent.

Submitted November 14, 1955; decided January 12, 1956.

Clifford W. McCormick for plaintiff.
Bruce R. Sullivan for defendant.

Motion to dismiss plaintiff’s cross appeal granted and cross
appeal dismissed.

Cross motion to dismiss a portion of defendant’s appeal
granted to the extent of striking from defendant’s notice of
appeal all reference to the order of reversal entered June 28,
1954, upon the ground that it does not necessarily affect the final
judgment appealed from within the meaning of section 580 of
the Civil Practice Act.

In the Matter of Sapm Guruanp, Appellant, against Narnan
Bsoxensrer, as Director of Brooklyn State Hospital,
Respondent.

Submitted January 3, 1956; decided January 12, 1956.

970 Le |

ee
Herbert L. Levy and Abraham Sher for appellant.

Jacob K. Javits, Attorney-General (Abe Wagman of counsel),
for respondent.

Motion for leave to have appeal heard upon the original
record and seven typewritten briefs denied.

Cross motion to dismiss appeal granted and appeal dismissed
upon the ground that an appeal does not lie as of right to the
Court of Appeals under subdivision 4 of section 588 of the Civil
Practice Act.

Ismors Muisr, Appellant, v. Discounr Facrors, Ino.,
Respondent; Davw Liprnn, Respondent, et al., Defendants.
(Consolidated Actions.)

Submitted January 3, 1956; decided January 12, 1956.

Motion to dismiss appeal denied and case set down for
argument during the first week of the February, 1956, session of
the Court of Appeals. .

a

Tun Pzorrz or tae Srarz-or New Yorx, Respondent, v.
Satvatorz D’Avza, Appellant.

Submitted January 3, 1956; decided January 12, 1956.

Motion to have appeal heard upon the original record and
typewritten briefs, for enlargement of time and for assignment
of counsel, granted and case set down for argument during the
March, 1956, session of the Court of Appeals, and C. Benn
Forsyth, Esq., 65 Broad Street, Rochester, New York, assigned
as counsel to defendant on the appeal herein.

i 971

Tux Propiz or tae Starz or New Yorn, Appellant, v. Coartas
Due, Respondent.

Submitted January 3, 1956; decided January 12, 1956,

Motion for assignment of counsel granted and John F. Burke,
Esq., 31 Exchange Street, Rochester, New York, assigned as
counsel to defendant on the appeal herein.

Parerora W. Vanpersitt, Respondent, v. Connenius VANDERBILT,
Jr., Appellant, et al., Respondent.

Submitted January 10, 1956; decided January 12, 1956.

Sol A. Rosenblatt for motion.

Motion granted, upon consent, and upon the conditions set
forth in the temporary stay granted January 7, 1956.

In the Matter of the Arbitration between Maurice Tzscunmr,
Appellant, and Davm Lavinesron, as President of District
65, Retail, Wholesale, Department Store Union, ©. I. O., et al.,
Respondents.

Argued November 21, 1955; decided January 13, 1956.

Murray I. Sommer for appellant.
Irving Rozen and Milton C. Weisman for respondents.
Order affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Fuip, Frozssen, Van
Vooruis and Burks, JJ. Taking no part: Dvs, J.

Dl
Tus Proris or toe Stars or New Yor, Respondent, v. Gzrarp
J. Brivzman, Appellant.

Argued November 17, 1955; decided January 13, 1956,

Henry W. Schober for appellant.

T. Vincent Quinn, District Attorney (Benj. J. Jacobson,
J. Wolfe Chassen and Frank J. Crisona of counsel), for
respondent.

Per Curiam. At least twelve of the Grand Jurors, who voted
to indict, heard all essential and critical evidence including the
testimony of the defendant. Based on such evidence the Grand
Jury was privileged to return an indictment, since it was suffi-
cient if unexplained or uncontradicted to warrant a conviction
by a trial jury (Code Crim. Pro., § 258). The only testimony
not heard by at least twelve of the jurors was of an incriminating

976 i

Ce
ree
nature but was not necessary to the finding of the indictment as

it was merely repetitious.
The order should be affirmed.

Conway, Ch. J., Desmonp, Fup, Frozsser, Vaw Voornis and
Burxz, JJ., concur; Dyz, J., taking no part.

Order affirmed.
De

Doveras Rreuey et al., Respondents, v. Dovenas F. Storer et al.,
Appellants, et al., Defendant.

Submitted October 17, 1955; decided January 13, 1956.
ee
The appeal having been decided, the motion to vacate a stay
heretofore issued by the Court of Appeals on July 8, 1955, or,
in the alternative, to modify certain conditions thereof is 8 denied.

[See 309 N. Y. 769.]
Es

Tus Prorie or tHe Stare or New Yorx, Respondent, v. Frank
J. Newman, Appellant.
Submitted January 9, 1956; decided January 13, 1956.

Application for assignment of counsel granted and John
McKim Minton, Esq., of New York, New York, and Joseph
Lonardo, Hsq., of Long Island City, New York, assigned as
counsel to defendant on the appeal herein.

Tar Pzorie or tHE Stare or New Yoru, Appellant, v. Leroy
Lovts and Hunry Tuomas, Respondents.
Submitted February 6, 1956; decided February 7, 1956.

Application by Joseph Cohen to withdraw as co-counsel to
defendant Leroy Louis on the appeal herein granted.

Pe 977

Tus Pzorze or raz Stats or New Yorn, Respondent, v. NicHoLas
Manrrept, Appellant.

Submitted February 6, 1956; decided February 7, 1956,

ee

Motion for further enlargement of time granted and case set
down for argument during the March, 1956, session of the
Court of Appeals. [See 309 N. Y. 951.]

Tun Proris or rau Stare or New Yorx, Respondent, v. Jossex
Narrurno, True Name JoserH Francis Norruryo, Appel-
lant.

Submitted February 6, 1956; decided February 7, 1956.

ee
Motion for enlargement of time granted and case set down
for argument during the April, 1956, session of the Court of
Appeals.
Le

Tue Propre or rae Stare or New Yorn, Respondent, v. 960 Park
Avenue Corporation, Appellant.

Submitted February 6, 1956; decided February 7, 1956.

CCCs

Motion for enlargement of time granted to the extent that the
case is set down for argument during the March, 1956, session
of the Court of Appeals.

Tus Pzopie or tae Stare or New Yorx, Appellant, v. Smyzy
Scuarren and Samurt Torwssn, Respondents.

Submitted February 6, 1956; decided February 7, 1956.

Motion for enlargement of time granted and case set down for
argument during the March, 1956, session of the Court of
Appeals.

Orazio G. Pawzica et al., Appellants, v. Aucust J. Gaxasso et al.,
Respondents.

Argued January 3, 1956; decided February 9, 1956,

John S. Ryan for appellants.
Clayton M. Smith and Jerome H. Raynor for respondents.

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Dusmonp, Fuup, Frozssez, Van
Voornis and Burxn, JJ. Taking no part: Dvz, J.

Tae Pzoriz or tae Srare or Nuw Yorr, Appellant, v. Jonn

Formato, Jamns Moreixo, Pasquare Leporz and Hueco Torrn,
Respondents.

Argued January 4, 1956; decided February 9, 1956.

7 981

PC
errr)
Harry Margolis, District Attorney (Louis M. Greenblott of
counsel), for appellant.
Remo A. Allio for John Formato and Hugo Torre, respond-
ents.

A. Jack Rappaport for James Morello and Pasquale Lepore,
respondents.

Order affirmed; no opinion.

Concur: Conway, Ch. J., Dusmonp, Furp, Froussen, Van
Voornis and Burks, JJ. Taking no part: Dys, J.

In the Matter of the Probate of the Will of Arruur J. Brarry,
Deceased. Gworcn A. Buarry, Respondent; Enezn B.
Wesrrieip, Appellant. .

Argued January 9, 1956; decided February 9, 1956.

983

Thomas H. McManus for appellant.
Thomas Grimes and Frederick A. Keck for respondent.
Order affirmed, with costs to respondent payable out of the
estate; no opinion.
Coneur: Conway, Ch. J., Desmonp, Furp, Frorssen, Van
Voornis and Burks, JJ. Taking no part: Dvn, J.
Ee

In the Matter of the Accounting of Ranpx Asxur, as Committee
of the Person and Estate of Lmonarp Asxzr, an Incompetent
Person, Appellant. Dsrarrment or Menta, Hyemnz of THE
Stare or New Yorx, Respondent. [Cuavraveua Narionan
Bayx or Jamestown, Substituted Appellant.]

Argued January 13, 1956; decided February 9, 1956.

985

Walter H. Edson for appellant and substituted appellant.

Jacob K. Javits, Attorney-General (Margaret D. Hazel,
James O. Moore, Jr., and E. David Wiley of counsel), for
respondent.

Order affirmed; no opinion.

Concur: Conway, Ch. J., Desmonp, Funp, Fronssen, Van
Voornis and Burges, JJ. Taking no part: Dvyz, J.

Mmum B. Rosexrisip, Respondent-Appellant, ». Epwarp M.
Rossenrieip, Appellant-Respondent. Cuarums R. Barrer,
Respondent.

Argued January 11, 1956; decided February 9, 1956.

Edward L. Blachman and Morton M. Bass for plaintiff.

Mitchell Salem Fisher, Mendel Zucker and Sot Deutsch for
defendant.

Charles R. Barrett respondent in person.

Judgments affirmed; no opinion.

Concur: Conway, Ch. J., Dusmonp, Funp, Frozssen and
Burxs, JJ. Taking no part: Dyz and Van Voorats, JJ.

Cuarues Soxcrtic, Appellant, v. Wanrer P. Amick et al., Indi-
vidualily and as Copartners Doing Business as Hasrern
Srmam Specrarry Company anp Avromatic Contron Company,
Respondents.

Argued January 3, 1956; decided February 9, 1956.

Hilton M. Soba and Herbert Edelhertz for appellant.
Cuthbert B. Caton for respondents.

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Dusmonp, Furp, Frozssen, Van
Voorsis and Burks, JJ. Taking no part: Dvz, J.

Frawx J. Butizr, Appellant, v. D. M. W. Cowrracrine Co., Ine.,
et al., Respondents.

Argued January 12, 1956; decided February 9, 1956.

| | Le} 991

Benjamin H. Siff and I. Philip Sipser for appellant.

John Nielsen and John P. Smith for D. M. W. Contracting
Co., Inc., respondent. .

Peter Campbell Brown, Corporation Counsel (John A. Mur-
ray and Seymour B. Quel of counsel), for Triborough Bridge
and Tunnel Authority, respondent.

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Futp, Frousseu and Van
Vooruis, JJ. Taking no part: Dye and Burxs, JJ.

In the Matter of Epwarp Dovensrry et al., Appellants, against
Starz Harwzss Ractye Commission et al., Respondents.

Argued November 30, 1955; decided February 9, 1956.

994

Sidney O. Raphael, Ralph F. Kane, William Levin and
Thomas J. Burns for appellants.

Jacob K. Javits, Attorney-General (Samuel A. Hirshowite
and James O. Moore, Jr., of counsel), for respondents.

Order affirmed, with costs; no opinion.
Coneur: Conway, Ch. J., Fuup, Frozssez, Van Vooruis and
Burks, JJ. Taking no part: Desmonp and Dyz, JJ.
as
In the Matter of the Construction of the Will of Asuzr B.
Hatxocg, Deceased. Frep A. Gmorn, as Executor of Fror-
zNog Y. Gmorn, Deceased, Respondent; Frank D. Hatxocx,
Appellant.
Argued January 3, 1956; decided February 9, 1956.

Pierre G. Lundberg, Syrena H. Stackpole and Reginald C.
Smith for appellant.

David H. Gilmartin and James R. Caruso for respondent.

Decree affirmed, with costs to both parties payable out of
the estate. No opinion.

Concur: Conway, Ch. J., Dusmonp, Fuip, Fromssen, Van
Voornis and Burks, JJ. Taking no part: Dys, J.

Hewry-Cuarx Hoxpine Corp., Appellant, v. Jacknuuve Reaury
Corp., Respondent.

Axgued January 5, 1956; decided February 9, 1956.

998 P|

Raphael H. Weissman and Charles H. Fier for appellant.

Percival E. Jackson, Theodore N. Tarlau and Milton Loewe
for respondent.

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Desmonp, Fup, Frozssen, Vaw
Vooruis and Burxs, JJ. Taking no part: Dv, J.

PC
Rostyw Mutstinsxy, as Administratrix of the Estate of Jack
Muistinsxy, Deceased, Respondent, v. Crry or New Yorx,
Appellant.

Argued January 4, 1956; decided February 9, 1956.

Peter Campbell Brown, Corporation Counsel (Fred Iscol and
Seymour B. Quel of counsel), for appellant.
Arthur N. Seiff and Benjamin H. Siff for respondent.

Order affirmed and judgment absolute ordered against appel-
lant upon the stipulation, with costs in all courts; no opinion.

Coneur: Conway, Ch. J., Dusmonp, Fuip, Fromssen and Vaw
Vooruts, JJ. Taking no part: Dysz and Burxn, JJ.

NoorotnaH Baxusnanpen, Appellant, v. Ammrrcan Cyanamip
Company, Respondent.

Submitted February 6, 1956; decided February 9, 1956,

Motion for extension of time granted and appellant directed
to serve and file his brief, if any, by February 25, 1956, and case
set down for argument during the March, 1956, session of the

Court of Appeals. qa
Joun D. Bricut, as Receiver of the Property of Frepmrtcx W.
Szewarp, Respondent, v. Gosnen Sanrrarrum Company,
Appellant.
Submitted February 6, 1956; decided February 9, 1956.

John D. Bright for motion.
No one opposed.

Motion granted and appeal dismissed, with costs and $10 costs
of motion, upon the ground that the judgment sought to be
appealed from does not finally determine the action within the
meaning of the Constitution.

De
Frances M. Butnocx, Appellant, v. Frances M. B. Harrsure,
Respondent.

Submitted February 6, 1956; decided February 9, 1956.

Motion to dismiss appeal granted and appeal dismissed, with
costs and $10 costs of motion, unless within ten days from the
date of this order, appellant serves and files the required under-
taking on appeal and pays $10 costs and, within twenty days,
files the return on appeal, in which events motion denied (Vojda
v. Prizep, 304 N. Y. 978).

|
Son Eximan et al., Respondents, v. A. Irvine Isaacson et al.,
Appellants,

Submitted February 6, 1956; decided February 9, 1956.

1002

Selig Kaplan for motion.

Jac M. Wolff opposed.

Motion dismissed upon the ground that the order sought to
be appealed from does not finally determine the action within
the meaning of the Constitution.

|
In the Matter of the Accounting of Epwazp Q. Cazp et al., as
Coexecutors of Joun T. Bisnor, Deceased, Respondents.
Pavu E. Lorp et al., Practicing’ under the Name of Lorp &
Huwrineron, Appellants.
Submitted February 6, 1956; decided February 9, 1956.

Motion for an extension of time to serve and file the record
on appeal herein and to have the appeal heard upon available
copies of the record before the Appellate Division, together with
the original exhibits and typewritten copies of additional papers
of the proceedings in the Appellate Division referred to in the
notice of appeal, granted upon the condition that these papers
and the brief for appellants be served and filed within fifteen
days from the date of this order.

es
In the Matter of the Crry or New Yor, Respondent, Relative to
Acquiring Title to Real Property, Bounded by West 100th
Street, and Other Streets, in the Borough of Manhattan,
Required for a Project known as Wuzsr Park (Mannarran
Town) Suum Crearance Proszor. Jars Reaury Corporation
et al., Claimants; A. & W. Ruaury Corp. et al., Appellants.

Submitted February 6, 1956; decided February 9, 1956.

, 1003

Ce

errr!

Motion for adjournment of the argument of the appeal until
the May session of the Court of Appeals granted to the extent
that the appeal is set down for argument during the March, 1956,
session, with leave to claimants-appellants to serve and file their
briefs, if any, by March 2, 1956, and to the City of New York
to serve and file its brief, if any, by March 9, 1956.
as

In the Matter of the Arbitration between Barwerr Hontanper,
Appellant, and Epean J. Berwuzmer et al., Respondents.

Submitted February 6, 1956; decided February 9, 1956.

Sidney J. Schwartz for motion.
Samuel Gottlieb and Harry Giesow opposed.

Motion dismissed, with $10 costs and necessary printing
disbursements, upon the ground that the order sought to be
appealed from does not finally determine a special proceeding
within the meaning of the Constitution.

In the Matter of Junius Marcus, Appellant, against Lazarus
Josepx, as Comptroller of the City of New York, Respond-
ent.

Submitted February 6, 1956; decided February 9, 1956,

Application to further amend the remittitur granted as fol-
lows: Order affirmed, without costs. We have no power to review
the allowance of costs in the Appellate Division, which is wholly

1004 7

discretionary with it (Civ. Prac. Act, § 1492). The matter is
accordingly remitted solely with respect to the allowance or
disallowance of costs in that court. [See 305 N. Y. 818, 923.]
De
Norn Hoxpive Corporation et al., Appellants, v. Carvan Dart-
Frunzs Srorus, Iyo., Respondent.

Submitted February 6, 1956; decided February 9, 1956.

Walter C. Lundgren for motion.
Milton Kunen and Robert K. Lifton opposed.

Motion dismissed upon the ground that the order sought to
be appealed from does not finally determine the action within
the meaning of the Constitution.

PC
Tu Prope or raz Srats or Nuw Yorx, Respondent, v. Am™po
Joun Marcurreni, Also Known as Joun Mazcx, Appellant.

Submitted February 6, 1956; decided February 9, 1956.

1005

Frank D. O’Connor, District Attorney (Stephen J. Masse of
counsel), for motion.

No one opposed.

Motion granted and appeal dismissed.

Tus Pzoriz or tae State or New Yor, Respondent, v. James
Mason, Jr., Appellant.

Motion for reargument denied. [See 245 N. Y. 617.]
Submitted January 3, 1956; decided February 9, 1956.

Arrnur Wnrxtne, Appellant, v. Amrry Hsrarus, Ive., et al.,
Respondents. Boarp or Supervisors or Greene County,

Respondent.
Submitted January 9, 1956; decided February 9, 1956,

PC
Motion for stay granted.
Dt

Franoisca G. Dasxovicu, Respondent, v. Hors, Watporr-
Asrorta Corporation, Appellant.

Argued January 5, 1956; decided February 16, 1956.

| Dn 1007

John F. X. Finn, William 8. O’Connor, John H. Sherry,
Archie B. Morrison and Robert A. Dwyer for appellant.

Charles W. Merritt and Gerard A. Navagh for New York
State Hotel Association, Inc., amicus curiae, in support of appel-
lant’s position.

Frederick P. Bryan, Nicholas R. Doman and Philip J. Wessel
for respondent.

Judgment affirmed, with costs; no opinion.

Coneur: Conway, Ch. J., Dusmonp, Futp, Frozssen, Van
Vooruis and Burss, JJ. Taking no part: Dvz, J.

Aenus T. Convoy, Respondent, v. Boarp or Hicuer Epucation
or tae Crry or New Yorx, Appellant.

Argued January 5, 1956; decided February 16, 1956.

1009

Peter Campbell Brown, Corporation Counsel (Edward J.
McLaughlin, Seymour B. Quel and Louis J. Montelione of
counsel), for appellant.

A. Mark Levien for respondent.

Judgment affirmed, with costs; no opinion.
Concur: Conway, Ch. J., Dusmonp, Furp, Frozssen, and Van
Vooruis, JJ. Taking no part: Dyz and Burxa, JJ.
Ee
In the Matter of the Srars Insurance Funp, Respondent,
against Wraiam E. Boynanp et al., Constituting the Tax Com-
mission of the City of New York, et al., Appellants. [195-199
Cxurcn Srresr, Borover or Mawnarran.]

Argued January 13, 1956; decided February 16, 1956.

Le 1011

FC
ee
Peter Campbell Brown, Corporation Counsel (James J.
McGowan and Morris Handel of counsel), for appellants.
Monroe Goldwater, Bernard Katzen, James L. Goldwater and
Amne Gross for respondent.

Order affirmed; no opinion.

Concur: Cowway, Ch. J., Desmonp, Fuxp, Froussen and Van
Vooruis, JJ. Taking no part: Dyz and Burs, JJ.
Es

In the Matter of the Estate of Jonw E. Wuson, Deceased.
Freperick EH. Wason, as Executor of Jonw EH. Wuson,
Deceased, Respondent; Gzorez 8. Lupwie et al., Appellants.

Argued January 4, 1956; decided February 16, 1956.

1012 a |

Thomas L. Kelly for appellants.
John F. Nugent and John W. Ellis for respondent.

Per Curiam. In this discovery proceeding brought pursuant
to sections 205 and 206 of the Surrogate’s Court Act, appellants
appeal, according to their notice of appeal, by leave of the
Appellate Division, Fourth Department, from a unanimous
order of that court which reversed an amended decree of the
Surrogate’s Court of Cattaraugus County ‘“‘ discharging ’’
appellants and dismissed the proceeding upon the ground that
the Surrogate’s Court lacked jurisdiction in a discovery pro-
ceeding to determine the issues submitted.

The appellants, although successful in the Appellate Division,
lost something of considerable value by that court’s reversal
and dismissal of the proceeding in that they are now deprived
of the lower court determination in their favor on the merits
and so we hold that they are parties ‘‘ aggrieved ’’ and have
standing to appeal, even without an order granting them leave
to appeal since the order appealed from is final and there was
a reversal in the Appellate Division (Civ. Prac. Act, § 588).

We agree with the Appellate Division that so much of the
petition herein as is represented by jury questions Nos. 3 and 8
seeks merely the collection of an alleged debt and so did not
raise issues within the Surrogate’s jurisdiction in discovery
proceedings (Matter of Trevor, 309 N. Y. 389). In our opinion,

| 1013

Pi
|
however, the issues represented by the jury questions other
than Nos. 3 and 8 were within the proper scope of discovery
proceedings in the Surrogate’s Court (Matter of Stern, 306
N. Y. 862). ;

While the Appellate Division order makes no mention of
the findings of fact below, but merely states that the reversal
here was on the law, we need not remit the matter pursuant to
the provisions of sections 602 and 606 of the Civil Practice
Act for a consideration of the facts, inasmuch as the order of
the Appellate Division incorporates by reference the Per Curiam
opinion wherein the Appellate Division declares its position as
to the facts as follows: ‘‘ We are of the opinion that the jury
by its verdict rendered proper answers to the questions sub-
mitted. We would accordingly affirm the decree appealed from
if convinced that the Surrogate’s Court in a discovery proceed-
ing possesses jurisdiction to determine the issues submitted.”’

The order of the Appellate Division should be reversed insofar
as it dismisses the proceeding with respect to the matters
covered by jury questions Nos. 1, 2, 4, 5, 6, 7 and 9, and the
amended decree of the Surrogate reinstated with respect thereto ;
as so modified, the order of the Appellate Division should be
affirmed, with costs.

Conway, Ch. J., Desmonp, Fup, Frozssen, Van Voornis and
Burxs, JJ., concur; Dyn, J., taking no part.

Order of Appellate Division modified and, as so modified,
affirmed, and matter remitted to the Surrogate’s Court for fur-
ther proceedings in accordance with the opinion herein, with
costs to appellants.

In the Matter of the Estate of Waa D. Hows, Deceased.
Exzzaseto 8. Rureerrurp et al., as Executors of WmiuM
D. Hows, Deceased, Appellants; Srars Tax Commission,
Respondent.

Argued January 9, 1956; decided February 16, 1956.

1015

Thomas P. Ford, Henry B. Guthrie and Robert L. Clare, Jr.,
for appellants.

Mortimer M. Kassell and Miriam Wernick for respondent:

Order affirmed, with costs payable out of the estate; no
opinion.

Concur: Conway, Ch. J.. Desmonp, Fup, Frozssen, Van
Voornis and Burrs, JJ. Taking no part: Dvz, J.
Es
Tun Propie or tHE Starz or New Yorx, Respondent, v. Sprrve-
rretD Deve.opment Company, Inc., Appellant.
Tue Propie or roe Stare or New Yorx, Respondent, v. Hira,
Devetopment Company, Inc., Appellant.
Tus Pzorie or tue State or New Yorx, Respondent, v. Sprrve-
yretp DeveLopment Company, Inc., Appellant.
Tue Pzopie or tae Srars-or New Yorx, Respondent, v. Huar
Deveropment Company, Inc., Appellant.
Tue Psopie or tae Srare or New Yorx, Respondent, v. CoarnEs
Rossy, Correct Name Cum: Rosuwsrarr, Appellant:
Te Prorie or raz Stare or New Yorx, Respondent, v. Marcus:
Raurrer, Appellant.
Axgued November 28, 1955; decided February 16, 1956.

1017

Menahem Stim and Allen §. Stim for appellants.

T. Vincent Quinn, District Attorney (George J. Regan of
counsel), for respondent.

In each case: Judgment affirmed; no opinion.

Coneur: Conway, Ch. J., Dusmonn, Fuxp, Frozssen, Van
Vooruis and Burks, JJ. Taking no part: Dvs, J.

American Lumprrmens Murvuan Casuatry Company or Inrvo1s,
Appellant, v. Inswn E. Cocuranz, Also Known as Inenz E.
Cocurann Sanperson, Respondent.

Argued January 6, 1956; decided February 16, 1956.

Joseph T. Keller for appellant.
‘Bernard 8. Meyer and Arthur C. Fink for respondent.

Judgment affirmed, with costs; no opinion.

Concur: Conway, Ch. J., Dusmonn, Furp, Fronssen, Vaw
‘Vooruis and Burks, JJ. Taking no part: Dvn, J.
Dr
Tum Propre or tan Srars or Nuw Yoru, Respondent, v. Jom
D. Cooxz and Frepericx Scuyupr, Appellants.

Argued November 17, 1955; decided February 16, 1956,

John P. Sweeny for appellants.
Frank §. Hogan, District Attorney (Harold Roland Shapiro
of counsel), for respondent.

Judgment affirmed; no opinion.

Concur: Conway, Ch. J., Dusmonn, Fup, Froussen, Van
Voornis and Burxs, JJ. Taking no part: Dyz, J.

Tue Propis or rae Stare or New Yorr, Respondent, v. Ernest
Lez Epwarps, Appellant.

Argued November 22, 1955; decided February 16, 1956.

1021

De
Harris B. Steinberg, Abraham H. Brodsky, Manuel J. Stein-
berg and Richard A. Green for appellant.

Edward 8. Siler, District Attorney (William I. Siegel of
counsel), for respondent.

Judgment of conviction affirmed; no opinion.

Concur: Conway, Ch. J., Desmonp, Futp, Frozssen, Van
Vooruis and Burgs, JJ. Taking no part: Dvs, J.

P|
Resecca Aminorr, Appellant, v. Ratex Amznorr, Respondent.

Submitted February 6, 1956; decided February 16, 1956.

Joseph J. Lombardo, Francis M. Verrilli and Samuel Saline
for motion.

David W. Kahn opposed.

1022

Pe

reese

Motion dismissed, with $10 costs and necessary printing dis-
bursements, upon the ground that the order sought to be
appealed. from does not finally determine the action within the
meaning of the Constitution.

|
Reszcca Aminorr, Appellant, v. Rates Amivorr et al.,
Respondents.

Submitted February 6, 1956; decided: February 16, 1956.

Joseph J. Lombardo, Francis M. Verrilli and Samuel Saline
for motion. :

David W. Kahn opposed.

Motion dismissed, with $10 costs and necessary printing dis-
bursements, upon the ground that the order sought to be
appealed from does not finally determine the action within the
meaning of the Constitution.

De
Juurus E. Fosrsr, Appellant, v. Louis W. Parker et al.,

Respondents: (Action No.1.) Junius HE. Fosrur, Appellant,
v. Louis W. Parxzr, Respondent. (Action No. 2.)

Submitted-February 6, 1956; decided February 16, 1956.

John F. X. Finn and Norman C. Mendes for motion.
Philip Handelman opposed.

Motion denied.

Murup A. Forox, Appellant, v. Avonenus Y. Zouninesr et al.,
Doing Business under the Name of Zorzuvenr Trammr Com-
pany, Respondents, et al., Defendant. Waxrer G. Forcn,
Appellant, v. Avotpzus Y. Zouumenr et al., Doing Business
under the Name of Zotnincer Tramzer Company, Respondents,
et al., Defendant.

Submitted February 6, 1956; decided February 16, 1956.

Burlew Hill and Arthur VD. Chamberlain for motion.

_Lamb, Webster & Jordan opposed.

Motion dismissed, with $10 costs and necessary printing dis-
bursements, upon the ground that the order sought to be
appealed from does not finally determine the actions within
the meaning of the Constitution.

a
In the Matter of Harotp HE. Ryan, Appellant, against Jamns

R. Macpurr, as Commissioner of Motor Vehicles of the State

of New York, Respondent.

Submitted January 3, 1956; decided February 16, 1956.

1025

reer
Jacob K. Javits, Attorney-General (Philip J. Fitegerald of

counsel), for motion to dismiss appeal.
Thomas A. Robinson for motion for leave to appeal.

Motion to dismiss appeal taken as of right granted and
appeal dismissed.

Motion for leave to appeal denied.

In the Matter of Jouy Suvonrszavx, Appellant, against Frank
T. Hannon, as Commissioner of Public Safety of the City
of White Plains, Respondent.

Submitted February 6, 1956; decided February 16, 1956.

Motion to resettle order of the Court of Appeals dated Janu-
ary 12, 1956, denied. [See 306 N. Y. 986; 809 N. Y. 1034.]
a

JoserH Nocn et al., as Copartners under the Firm Name of
Noce Bros., Appellants, v. Hparam J. Kavrman et al,
Respondents, et al., Defendant.

Submitted February 13, 1956; decided February 16, 1956.

1026

William MacFarlane and Nathan H. Richman for motion.
No one opposed.

Motion granted and appeal dismissed, with costs and $10
costs of motion unless, within ten days from the date of this
order, plaintiffs-appellants serve and file a sufficient under-
taking on appeal and pay $10 costs, in which events motion
denied. In all other respects, motion denied.

Tun, Proptz or Taz Starz or New York, Respondent, v.
Micuarn Conrorri, Appellant.

Submitted February 13, 1956; decided February 16, 1956.
Motion to amend remittitur denied. [See 309 N. Y. 923.]

Tam Prortz or tae Starz or Nuw Yorx, Respondent, v. Frank
J. Newman, Appellant.

Submitted February 13, 1956; decided February 16, 1956.

Motion for enlargement of time granted and case set down for
argument during the April, 1956, session of the Court of Appeals.

be) 1027

Tue Prorne or rae Stare or New York ex rel. Harorp R.
Muze, Appellant, against Waurer B. Marri, as Warden
of Attica Prison, Respondent.

Submitted February 6, 1956; decided February 16, 1956,

Motion to have appeal heard upon the original record and
for assignment of counsel granted and Hayden H. Dadd, Esq.,
Main Street, Attica, New York, assigned as counsel to relator
on the appeal herein.

be

Anna K. Toomey et al., Respondents, v. James J. Faruzy et al.,
Appellants, et al., Defendants.

Submitted February 6, 1956; decided February 16, 1956.

Motion to have appeal heard upon six copies of the record
before the Appellate Division and printed additional papers
granted.

Le

Rarxo Vutnovicu et al., Appellants, v. Srepuzen P. Baicz,
Respondent, et al., Defendant.

Argued February 6, 1956; decided February 16, 1956,

Motion to dismiss appeal granted and appeal dismissed, with
costs and $10 costs of motion unless, within fifteen days from
the date of this order, appellants serve and file the record on
appeal and pay $10 costs, in which events motion denied and
case set down for argument during the March, 1956, session of
the Court of Appeals.