Court Opinion

ID: 5483987
Source: CourtListenerOpinion
Date Created: 2022-01-10 02:03:57.297904+00
Date Added: 2024-06-11T08:33:23.016044
License: Public Domain

Desmond, 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 defendant Glassman to defendant New York State Employees’ Retirement 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. III, § 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 *446against 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 performing 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; Sunlit Garden v. Moore, 183 Misc. 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 corporate ’ ’ 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 *447employees (see Ex Parte La Prade, 289 U. S. 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, those 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: 11 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 ’ ’ (Ex Parte Fitzpatrick, 171 Ind. 557, 560, and cases cited thereat). Such a rule (and *448we 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 Retirement Fund’s status bears no resemblance to that.
The judgment should be affirmed, with costs.
Conway, Oh. J., Froessel and Van Voorhis, JJ., concur with Fuld, J.; Desmond, J., dissents in an opinion in which Burke, J., concurs; Dye, J., taking no part.
Judgment of Appellate Division and order of Special Term reversed and matter remitted to Special Term for further proceedings in accordance with the opinion herein, with costs in all courts.