Court Opinion

ID: 5374836
Source: CourtListenerOpinion
Date Created: 2022-01-08 08:30:32.615974+00
Date Added: 2024-06-11T08:30:03.384286
License: Public Domain

Callahan, J.
(dissenting). I disseht. The pension plan was part of a contract of employment granting rights to employees in the nature of insurance. In such a contract a provision for payment of pension out of 11 profits ” should be construed in the popular sense, i. e., that profits meant the difference between earnings and expenses, and not in the technical sense, wherein in ascertaining profits a reserve for depreciation might be taken into consideration in determining whether such profits existed. (Eyster v. Centennial Board of Finance, 94 U. S. 500; Mayer v. Nethersole, 71 App. Div. 383; Miller v. Car Trust Investment Co., 120 App. Div. 442, affd. 193 N. Y. 617.)
I find nothing in clause 17 of the pension plan which makes this rule of construction inapplicable. If the reserve set aside for depreciation is omitted, payment of pension in the present case would not constitute a payment out of capital assets.. While plaintiff did not request the trial court to define “ profits ” nor make any requests to charge with respect thereto, as the case is a test and the error in construction of the contract fundamental, a new trial should be ordered.
But the necessity for reversal of the judgment need not rest on the error above indicated.
The pension reserve set up by defendant was a fund which at least in part must be deemed available to pay plaintiff’s pension. Defendant may not be heard to say that there was no fund actually available for pension payment when it has taken moneys derived from fines imposed on its employees and from rebates received from insurance companies on premiums paid by the employees and defendant jointly, and set up these moneys on its books as a fund held for pénsion payments and a corporate liability. In Willoughby Camera Stores v. Commissioner of Internal Revenue (125 F. 2d 607) it was held that the setting up of a similar fund sufficiently implied a promise *319to pay employees the amount thereof so as to make the refund deductible for tax purposes.
When moneys of the nature indicated were commingled by defendant with its own funds, this constituted a wrong, and defendant may not assert its own wrongdoing as a defense when called on to pay a pension. Under the circumstances, defendant would be estopped from denying the existence of a trust fund available for pensions, at least to the extent of the moneys so received from its employees.
Cases dealing with situations where the employer itself had furnished the funds, or had merely set up a bookkeeping reserve without actually receiving any moneys from the employees are not apposite.
In the light of the facts concerning the source of the contributions, it was error for the trial court to submit to the jury as a question of fact, whether there was a pension reserve in existence, and to charge the jury as requested by the defendant, that the existence of a bookkeeping account entitled “ Pension Reserve ” did not justify any verdict for the plaintiff without evidence that there was money or assets actually set aside for the benefit of pensioners.
The determination of the Appellate Term and the judgment of the Municipal Court should be reversed and a new trial ordered, with costs to the appellant to abide the event.
Martin, P. J., and Cohn, J., concur with Townley, J.; Callahan, J., dissents in opinion, in which Dore, J., concurs.
Determination affirmed, with costs and disbursements.