author: Crane, Ch. J. Lehman, J.

text:
    Cauldwell-Wingate Company et al., Appellants, v. State of New York, Respondent.
    (Claim No. 21953.)

      Argued November 30, 1937;
    decided January 11, 1938.

      Charles B. Sullivan, Herbert S. Greenberg and Benjamin McClung for appellants.
    The contract provisions entitled “ Visit to Site,” properly construed in relation to the superstructure work under claimants’ contract, do not bar recovery. (Horgan v. Mayor, 160 N. Y. 516; Sundstrom v. State, 213 N. Y. 68; Faber v. City of New York, 222 N. Y. 255; Foundation Co. v. State, 233 N. Y. 177; Man-field v. N. Y. C. & H. R. R. R. Co., 102 N. Y. 205; McGovern v. City of New York, 202 App. Div. 317; 235 N. Y. 275; Leahy v. City of New York, 192 N. Y. 42; Wright & Kremers, Inc., v. State, 238 App. Div. 260; 263 N. Y. 615; Niewenhous Co. v. State, 248 App. Div. 658; 272 N. Y. 484; People ex rel. Wells & Newton Co. v. Craig, 232 N. Y. 125; Bird v. St. Paul F. & M. Ins. Co., 224 N. Y. 47.) The State misrepresented the nature and extent of the foundation project upon which the commencement of claimant’s work was stated to be contingent, and is liable to claimants for the delay in completing the foundations. (Wright & Kremers, Inc., v. State, 263 N. Y. 615 ; Atlanta Constr. Co. v. State, 103 Misc. Rep. 233; Langley v. Rouss, 185 N. Y. 201; MacKnight Flintic Stone Co. v. Mayor, 160 N. Y. 72; Horgan v. Mayor, 160 N. Y. 516; Faber v. City of New York, 222 N. Y. 255; United States v. Spearin, 248 U. S. 132.) The contract provisions entitled “ Damages for Delays ” have no application to such delays as were caused by the failure of the State to furnish the foundation site, due to its negligence in misdesigning and misrepresenting its own foundation project and in radically changing and increasing the foundation work. (Horgan v. Mayor, 160 N. Y. 516; Sundstrum v. State, 213 N. Y. 68; Mansfield v. N. Y. C. & H. R. R. R. Co., 102 N. Y. 205; Leahy v. City of New York, 192 N. Y. 42.) The liability to claimants under the provisions of the enabling act (L. 1931, ch. 701) was fairly established. (Seglin Construction Co. v. State, 249 App. Div. 476; 275 N. Y. 527.)

      John J. Bennett, Jr., Attorney-General (Leon M. Layden, Henry Epstein and Joseph I. Butler of counsel), for respondent.
    The State did not breach its contract and did not actively or in any other manner interfere with the progress of the work under the contract. The claimant superstructure contractor had full knowledge of the conditions present on the site of the contract at the time it signed the contract. (Waples Co. v. State, 178 App. Div. 357; Mack v. State, 122 Misc. Rep. 86; 211 App. Div. 825; Wright & Kremers, Inc., v. State, 238 App. Div. 260; 263 N. Y. 615; Barr & Co. v. State, 127 Misc. Rep. 75; Cascade Automatic Sprinkler Corp. v. State, 147 Misc. Rep. 420; 247 App. Div. 226; Weston v. State, 262 N. Y. 46.)
   Crane, Ch. J.

On or about March 1,1928, Cauldwell-Wingate Company entered into a contract with the State of New York, through the State Office Site and Building Commission, for the construction of a superstructure, State Office Building, New York city, specification No. 5014, project No. 1936, and addenda 1, 2 and 3, which contract was completed and the construction accepted by the State of New York, on or about January 20, 1930. The completion date provided for in said contract was March 31, 1929.

The State had advertised for, and awarded, two separate contracts; one, for the excavation and foundation work; and the other, for the erection of the superstructure. The contract of J. L. McDonald for the foundations was approved by the State on March 10, 1928. The Cauldwell-Wingate contract for the superstructure was approved March 2,1928.

The Cauldwell-Wingate Company could not begin the superstructure work until McDonald had finished the foundations; consequently, the contract contained the following provision:

“ (B) General Description, page 3, paragraph 3.
“Work not included: The work of this contract is contingent upon the execution of the foregoing work by the Foundation Contractor and shall follow said work in orderly sequence. * * * The time of completion specified for the foundation work is July 1, 1928.”

What was meant by the “ execution of the foregoing work by the Foundation Contractor? ” The plans and specifications for this work were submitted to these contractors before bidding, and for the purpose of procuring bids thereon. These were the representations made by the State as to the nature of the_foundation, and the work which the foundation company was expected to do, in accordance with its bid thereon. At the time of the advertising for, and of the letting of, each of these two contracts, the site consisted of a city block, the area of which was graded over and entirely covered with a cinder fill, except a small portion, which was occupied by two small brick buildings. The foundation plans and specifications which were furnished Cauldwell-Wingate Company and other bidders on the superstructure “ for information pertaining to work included in the foundation contract ” showed the elevation and the artificial structures to be removed and only represented thereon the aforesaid two small brick buildings. The superstructure was to be built on a finished foundation to be constructed by the State.

The judge, in his opinion in this case, has found: The plans furnished McDonald by the State included a cross section and showed ‘ the elevation and artificial structures to be removed and only represented thereon the aforesaid two buildings.’ ”

This provision (B), general description in the CauldweE-Wingate contract, stating, The work of this contract is contingent upon the execution of the foregoing work by the Foundation Contractor and shaE foEow said work in orderly sequence,” has reference to this foundation work shown in these plans and specifications submitted to aE of the contractors for the purpose of bidding. This point is to be noted as we go along, as it is decisive of the questions presented.

The contract read as a whole meant this: McDonald was to dig and construct the foundations according to the plans and specifications submitted. No superstructure work could be commenced untE the foundation was complete. CauldweE-Wingate Company made its contract to erect the superstructure upon the completion of the foundation, according to the plans and specifications submitted to it. These plans and specifications caEed for work which could be completed in about three weeks, and so it was stated in the specifications that the foundation work would be completed July 1, 1928. AE the bidding, both by the foundation contractor and the superstructure contractor, was based upon the plans and specifications submitted by the State’s engineers — the servants and employees of the State — and aE of the conditions in the contracts of these two parties must be read, bearing this fact in mind.

What was the superstructure contractor to do immediately upon signing this contract? It was expected to assemble aE of its material and working equipment, including the fabrication of the steel, so as to have everything in readiness to proceed on July 1, 1928. It was under severe penalties for delay. The contract aEowed nine months to erect the entire superstructure, after the dates specified for completion of the foundations, and obligated it to the payment of liquidated damages and severe penalties for delay, or failure to complete within the specified time. The Cauldwell Company, by the contract provision above quoted, accepted the contingency of delay in the execution of the foundation contract, but only such delay as was occasioned in the performance of that contract, according to plans and specifications. The plans and specifications were its only guide, and the measure alike of its duty and its obligations. If the foundation contractor were delayed in doing its work, the Cauldwell Company assumed such risk. It did not, however, by any provisions of its contract, assume the risk and loss occasioned by the act of the State, in furnishing to both these contractors misleading, imperfect and defective plans and specifications, wherein and whereby the whole scheme of foundation building had to be revised, new plans and specifications adopted, and the work which was to take three weeks necessarily extended for almost a year. Instead of a surface such as represented, there appeared upon further investigation an underground swamp or pond and other obstacles.

The Court of Claims was under the impression that the contractor for the superstructure was bound to make borings to discover the nature of the subsoil, and should have been aware of these conditions. We can find no such onerous duty placed upon this contractor. The information to bidders, entitled, “ Visit to Site,” leads to no such conclusion. This reads: “ Proposals will be held as having been made with full knowledge of conditions and requirements. The Contractor will be held to have visited the premises, prior to the time of submitting his proposal, and to have appraised the conditions under which the work of this contract is to be executed.” Very unreasonable indeed would it be to hold that a contractor, whose only work commenced when the foundations were finished, was obliged to make soundings and borings to discover whether the plans and specifications of the State regarding such foundations were true or false. Whether this were McDonald’s duty we need not now determine. Certainly it was no obligation resting upon the superstructure contractor. This apparently was the main argument for rejecting Cauldwell’s claim for damages in this case. The Court of Claims made these findings: “ That the subsurface of the contract site was found to consist of old foundations, piling and obstructions not shown upon the plans or specifications. That a portion of such old structures had been erected in former days over a pond which once had water to a depth of about fifty feet. That because of the subsurface conditions found on the site the foundation contractor worked nearly one year in excavating whereas had the site complied with surface conditions said excavation should have been performed in about three weeks’ time.” Consequently the work of the Cauldwell Company, which was to be completed March 31, 1929, was not finished until January 20,1930 — nine months later.

What effect did this have upon the Cauldwell Company? The Court of Claims has made these findings: “ That all construction work was completed December 20th, 1929. That the wages of artisans, mechanics, laborers and other employees in the trades engaged in the construction of the building generally increased May 1st, 1929. That the cost of workmen’s compensation insurance likewise increased. That the partial erection of the building in two sections ([as was required to be done]) increased the cost thereof. That some of the subcontractors had their products and materials ready for delivery before the site was ready to receive them and were obliged to store them. That the work of erecting steel, setting granite, constructing floor and roof arches, laying of concrete and setting of gypsum block is each more expensive to perform in winter than in warm weather.” And “ that the cost of bronze increased after January 1929.”

Now the point is, must the Cauldwell Company, superstructure contractor, suffer this loss when it was occasioned solely because the State submitted to these contractors, in order to induce them to make the contract, misleading and inaccurate plans and specifications? In other words, the State by its initial act misled the parties not only as to the foundation for the building, but the foundation for the contracts, and caused loss in consequence.

The Court of Claims in its opinion has told us: “ When McDonald began work with his steam shovel ‘ it was immediately disclosed upon excavation that beneath said two feet of cinders were foundation walls and masonry footings of about thirty houses, apartments and office buildings super-imposed on wooden piles from fifteen to twenty feet in length which structures had formerly occupied said entire block and a portion of which had been erected in former days over a pond which once had water to a depth of about fifty feet, and these old foundation walls had been covered with said cinder fill.’ McDonald was then directed by the State Department of Public Works to make thirty-seven composite borings over the entire site which borings were made to varying depths including one boring to the depth of one hundred twenty-seven feet.’ These borings ‘ disclosed the existence of said old foundation and the existence of said pond ’ and thereupon the specifications in McDonald’s contract ‘ were changed and altered to require the removal of the old foundations ’ which required blasting and other difficult and expensive work resulting in McDonald’s being required ‘ to work nearly one year in excavating * * * when said excavation should have been performed, had the site complied with the surface condition, in about three weeks’ time.’ ”

The State radically altered the plans and specifications for the foundation contract, increasing through orders to McDonald the actual foundation construction work and materials by sixty-eight per cent. It ' recognized its mistake and liability therefor by voluntarily paying to McDonald for this extra work $168,590.47, besides which McDonald recovered from the Court of Claims $29,622.86, additional cost of excavation. Now it has been held that the superstructure contractor, who had nothing to do with the foundations, must suffer its loss, occasioned in the same way, and for the same reason.

The clauses in the contract, relating to delay, “ in the completion of the work by any act or neglect of the State, or by changes ordered in the work,” and the damage clause, have no reference to delays and damages caused, as above stated, through the direct interference and misrepresentations of the State. The delay was caused before any work was commenced, not during its performance; and, as stated, it was due to acts not within the contemplation of the parties when they were induced to make their contracts by misleading and deceptive plans and specifications. This is not a case where plans, according to which a contractor has made his bid and entered into his contract, have been subsequently changed by the architect or the State to comply with different ideas or requirements, and for which changes the contractor is to be allowed, if they cost more money. These are changes and modifications which have been occasioned by acts or failure of the State, whereby the superstructure contractor, through no fault of its own, has suffered a loss. It will receive no compensation, except under the act of the Legislature, chapter 701 of the Laws of 1931, which has permitted the contractor to sue the State.

A similar situation arose with the excavations for the State Office Building in Albany. In digging the foundations, the contractors ran into quicksand, which required complete readjustment and modification of plans and specifications, as well as delay. For this the State was considered liable to the contractors; in fact the State admitted its moral obligation. After the enabling act, chapter 692 of the Laws of 1931, the Court of Claims made certain awards, which were reviewed by the Appellate Division and this court. We held the Court of Claims was justified in making the award. (Seglin Construction Co. v. State of New York, 275 N. Y. 527.) The contract provisions regarding delays were similar to those in this case.

Wright & Kremers, Inc., v. State of New York (263 N. Y. 615) and Weston v. State of New York (262 N. Y. 46) are not in conflict with this present ruling, as neither rested upon misrepresentations and direct interference by the State. Even in the Wright case the State was held liable for the delay caused in failing to turn over the site by the removal of a wall, so as to permit the work to proceed. What we are holding in this case is in harmony with such cases as Faber v. City of New York (222 N. Y. 255); Sundstrom v. State of New York (213 N. Y. 68); Horgan v. Mayor (160 N. Y. 516). The law is well stated in Foundation Co. v. State of New York (233 N. Y. 177): A contract and specifications may contain representations as to existing physical conditions. If so, a bidder may rely upon them, even though it be provided that he shall satisfy himself by personal inspection and investigation as to their truth, where because of time or situation such investigation would be unavailing (Faber v. City of New York, 222 N. Y. 255); or statements may be made on which the bidder, because of the language of the contract, cannot rely. He may have agreed that he will not. Then if they are made in good faith he takes the risk of their accuracy ” (p. 184).

The contract in the Foundation case required foundations to rest on bed rock. The contractor apparently relied upon boring sheets which the court said were not part of the plans and specifications or representations. Even then this court was divided. In the case now before us the plans and specifications were an integral part of the contract, furnished for information pertaining to work included in the foundation contract.”

Each case necessarily depends upon its own facts, and we find them here entirely different from those in Niewenhous Co. v. State of New York (272 N. Y. 484), where the moist and soft nature of the ground indicated to the contractor the nature of the soil he would encounter in digging foundations. (See statement of facts, 248 App. Div. 658.) Here the plaintiff had nothing to do with the foundations. It had the contract for the superstructure to be erected as soon as the foundations were completed. It was under no obligation to make borings to ascertain whether the foundations could be completed within the specified time. It entered into its contract, as above stated, upon the representations of the State regarding these foundations, and upon plans and specifications submitted by the State, indicating that the foundation work could be done within three weeks. The site for its work was to be ready in that time; the State did not furnish the site until nine months later.

The judgments should be reversed, and the claim remitted to the Court of Claims for a rehearing, with costs in all courts to abide the event.

Lehman, J.

(dissenting). The claimant’s contract was confined to the erection of the superstructure of the State Office Building in the city of New York. The superstructure could not be erected until the foundation work was completed. A separate contract for the excavation and foundation work was awarded to J. L. McDonald. The plaintiff’s contract, made on or about March 1,1928, provided: The work of this contract is contingent upon the execution of the foregoing work by the Foundation Contractor and shall follow said work in orderly sequence. * * * The time of completion specified for the foundation work is July 1, 1928.” (Italics throughout are mine.) The claimant expected to begin its work about the time so specified. Its expectations were disappointed. The foundation was not completed by J. L. McDonald and accepted by the State until about February 28, 1929. The unanticipated delay in the completion of the foundation work caused delay in the commencement and in the completion of the work specified in the claimant’s contract and additional expense to the claimant in the performance of the work. The plaintiff has been paid the contract price for the work performed under the contract. In this action it makes claim for the damages caused by the delay.

The claimant’s contract provided (Article 33):

“ Extension of time: If the Contractor be delayed in the completion of the work by any act or neglect of the State, or by changes ordered in the work, or by any cause which the Architect shall deem to justify the delay as being beyond the Contractor’s control, then the time of completion shall be extended for such reasonable time as the Architect may decide.”
Damages for delays: No charges or claim for damages shall be made by the Contractor, under the provisions of this Article, for any delays or hindrances, from any cause whatsoever, during the progress of any portion of the work embraced in this contract. Such delays or hindrances shall be compensated for under the provisions of Article 33.” (Article 36.)

The question presented upon this appeal is whether by these two provisions of the contract the claimants expressly assumed the risk and burden of the damages'caused by the delay in the completion of the foundation work.

As Chief Judge Crane points out in his opinion, the site of the proposed building was entirely covered by a cinder fill except a small portion which was occupied by two small buildings. The engineers of the State did not know or discover that there were old foundations, piling and other obstructions underneath the cinder fill and that an old pond upon the site had been filled in. Not knowing of the existence of these conditions, the State engineers failed to provide in the plans and specifications for their removal. J. L. McDonald’s contract for the excavation and foundation work, which the parties knew must be completed before work on the superstructure could begin, was based upon these plans and specifications. The plans and specifications were furnished to all bidders, including the claimant, “for information pertaining to work included in the foundation contract.” The excavation work called for by these original plans and specifications could have been completed within three weeks. The excavation which J. L. McDonald was required to perform under plans and specifications amended to take care of actual conditions as disclosed when the cinder fill was removed was not completed for almost a year. The State maintained the right to make such changes, for its contracts provided (Article 23): “ Changes and extension of time: The State without invalidating the contract, may make changes by altering, adding to or deducting from the work, the contract sum being adjusted accordingly.”

Perhaps the State was at fault in failing to discover the actual conditions, and in preparing its plans and specifications accordingly and, perhaps, the plaintiff, in calculating the probable time when it could begin work upon its contract, might reasonably place reliance upon the plans and specifications furnished by the State without independent investigation. I will assume that the delay was due solely to the fault of the State. Even that assumption does not form any basis for a valid claim for damages against the State, for the claimant has expressly agreed that no “ claim for damage shall be made * * * for any delays or hindrances, from any cause whatsoever, during the progress of any portion of the work embraced in this contract ” and has further expressly agreed that “ any delays ” shall include delays caused by “ any act or neglect of the State, or by changes ordered in the work.” It would be difficult to devise language more inclusive or plainer, and the claimant having voluntarily made the agreement must abide by the consequences.

The claimant, then, cannot recover unless the State has is some respect breached its contract, and because of that breach the claimant was delayed in beginning its work. The record fails to show such breach. The claimant’s contract provided expressly that the work “ is contingent upon the execution of the foregoing work by the Foundation Contractor ” and by no possible process of construction can the foregoing work ” be limited to the excavation work shown by the plans and specifications. Approval of claimant’s progress schedule was expressly conditioned upon “ the execution of the foregoing work.” The “ foregoing work ” certainly includes the foundation work, and fault in the preparation of specifications for the excavation, error in preliminary determination of the amount of the excavation work required, even negligent misrepresentation as to conditions, would not make inapplicable the provision of the contract that the delivery of the site to the claimant and the beginning of the work of erecting the superstructure was to be contingent upon the completion of the foundations for the superstructure, or the provision that there may be no claim for damages caused by delay due to the “ act or neglect of the State.” The parties chose to stipulate that the plaintiff assumes the risk of all delays unless the defendant is guilty of a breach of an affirmative covenant, and in the cases in this court cited by the appellant, recovery has been allowed only because of breach of such a covenant. Here there has been no such breach.

Judgment should be affirmed.

Hubbs, Loughran and Rippey, JJ., concur with Crane, Ch. J.; Lehman, J., dissents in opinion, in which O’Brien and Finch, JJ., concur.

Judgment accordingly.


source: Caselaw Access Project

author: O’Brien, J.

license: Public Domain

text:
    Andrew J. Kenny, Appellant, v. Lewis J. Valentine, as Police Commissioner of the City of New York, etc., Respondent.
    Argued December 6, 1937;
    decided January 11, 1938.

      W. H. K. Davey and Edward H. Burger for appellant.
    The official record of the police pension bureau shows that appellant’s pension was suspended on April 1, 1929, under section 1560 of the Charter of the City of New York (L/ 1901, ch. 466, as amd.), which could not apply to appellant. Such suspension was, therefore, without warrant of law. Since the official record is impervious to attack or impeachment by paroi evidence, it follows that, for the same reasons,- it cannot be nullified by mere presumption, the import of which is contrary to the record. (Power v. Village of Athens, 99 N. Y. 592; Hadley v. City of Albany, 33 N. Y. 603; People ex rel. Burr v. Zeyst, 23 N. Y. 140; People ex rel. Regan v. York, 80 N. Y. Supp. 300; Pooley v. City of Buffalo, 36 N. Y. Supp. 796; Howard v. Town of Brighton, 257 N. Y. Supp. 41; O’Leary v. Bd. of Education, 93 N. Y. 1; Curnen v.
      Mayor, 79 N. Y. 511; Campbell v. City of Hackensack, 98 A. L. R. 1225.) Section 1560 of the charter could not apply to plaintiff, and suspension of his pension under that section was, therefore, illegal and void. (Roddy v. Valentine, 268 N. Y. 228.)

      Paul Windels, Corporation Counsel (Paxton Blair, William S. Gaud, Jr., and Nicholas Bucci of counsel), for respondent.
    The Police Commissioner suspended the plaintiff’s pension in the proper exercise of the discretion vested in him by section 356 of the charter. (People ex rel. Bliel v. Martin, 131 N. Y. 196; People ex rel. Freligh v. Matsell, 94 N. Y. 179; Roddy v. Valentine, 268 N. Y. 228; Matter of Agoglia v. Mulrooney, 259 N. Y. 462; Matter of Larkin Co. v. Schwab, 242 N. Y. 330; Admiral Realty Co. v. City of New York, 206 N. Y. 110; People ex rel. Warschauer v. Dalton, 34 App. Div. 302; 159 N. Y. 235; People ex rel. April v. Butler, 122 App. Div. 790.)
   O’Brien, J.

Plaintiff was formerly a member of the police department of the city of New York and on May 11, 1911, was retired on a pension. On April 1, 1929, he was appointed Superintendent of Sewers of the borough of Queens and, later, a record was filed in the police department bearing the notation “ Pension suspended, Section 1560 ofjDharter. opp. Supt. of Sewers. Boro of Queens, April 1-1929.” Since that date no part of his pension was paid. At Trial Term he recovered judgment for the amount alleged to be due for the six years preceding the institution of this action but the Appellate Division reversed and dismissed the complaint.

At the date of the entry of this departmental record, the Police Commissioner then in office was empowered by section 356 of the Greater New York Charter (Laws 1901, ch. 466) to order, in his discretion, plaintiff’s pension to cease or to be diminished. The fact must appear that such act is the result of discretion exercised under authority conferred by section 356 and not the consequence of an erroneous conclusion of law in respect to an assumed mandatory duty under section 1560 to suspend the pension. This section became effective April 12, 1916 (Laws 1916, ch. 201), and applies only to the suspension of such pensions as were thereafter awarded. The plaintiff’s pension was granted five years prior to the enactment of this section. Since the only annotation on the records of the police department indicates an act proceeding from a mistaken view of the law rather than from the exercise of discretion, no presumption exists that discretion had been used.

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

Crane, Ch. J., Lehman, Hubbs, Loughran, Finch and Rippey, JJ., concur.

Judgment accordingly.


author: O’Brien, J. Crane, Ch. J.

text:
    The People of the State of New York, Respondent, v. Harry Weiss and Martin Schlossman, Appellants.

      Argued December 8, 1937;
    decided January 11, 1938.

      Irwin N. Wilpon and Burton B. Turkus for appellants.
    The trial court committed error in excluding over the objection and exception of the defendants evidence by the defendants tending to show the intent which animated them in their participation in the acts charged in the indictment. (Wallace v. United States, 162 U. S. 466; People v. Flack, 125 N. Y. 324; Hadden v. People, 25 N. Y. 373; People v. Baker, 96 N. Y. 340; Kerrains v. People, 60 N. Y. 221; People ex rel. Hegeman v. Corrigan, 195 N. Y. 1.) The trial court’s refusal to charge as requested on intent constitutes reversible error. (People v. Flack, 125 N. Y. 324; McKenna v. People, 81 N. Y. 360; People v. Powell, 63 N. Y. 88; Miller v. People, 5 Barb. 203; Bentall v. United States, 262 Fed. Rep. 744; People v. Camp, 66 Hun, 531; 139 N. Y. 87; Dehn v. Mandeville, 68 Hun, 335; Hadden v. People, 25 N. Y. 373; Johnsonv. Blaney, 198 N. Y. 312; Kupfer v. Brooklyn Daily Eagle, 250 App. Div. 19.) The trial court committed error in refusing to charge as requested by the defendants that the defendants might be found guilty of the crime of assault under the indictment and in refusing to submit the crime of assault to the jury. (People v. Hope, 257 N. Y. 147; People ex rel. Prince v. Brophy, 273 N. Y. 90.)

      William F. X. Geoghan, District Attorney (Henry J. Walsh of counsel), for respondent.
    The trial court committed no error in excluding the testimony preferred by the appellants as to their state of mind in committing the acts charged against them. (People v. Hadden, 25 N. Y. 373; People v. Flack, 125 N. Y. 324; Kerrains v. People, 60 N. Y. 221; People v. Baker, 96 N. Y. 340; People ex rel. Hegeman v. Corrigan, 195 N. Y. 1; People v. Schmidt, 216 N. Y. 324.) The charge of the trial court was a correct statement of the law. (People ex rel. Hegeman v. Corrigan, 195 N. Y. 1; People v. Schmidt, 216 N. Y. 324; People v. Odell, 230 N. Y. 481.)
   O’Brien, J.

These appellants, without authority of law, seized and confined Paul H. Wendel, who was suspected or whom some pretended to suspect of the commission of a murder in New Jersey which had attracted attention throughout the country. They have been convicted of the crime of kidnapping as defined by section 1250 of the Penal Law, which provides; “ A person who wilfully: 1. Seizes, confínes, inveigles, or kidnaps another, with intent to cause him, without authority of law, to be confined or imprisoned within this state, or to be sent out of the state, or to be sold as a slave, or in any way held to service or kept or detained, against his will * * * is guilty of kidnapping * *

The elements-, necessary to constitute the crime of kidnapping are different from those which are embraced within the torts of illegal arrest and false imprisonment. Where the detention is illegal, a civil action for damages will lie without regard to the innocence of the defendant in his intentions. (Snead v. Bonnoil, 166 N. Y. 325, 328.) In order to make out the crime of kidnapping, proof beyond a reasohable doubt must be produced that the defendant willfully intended, without authority of law, to : confine or imprison another. To illustrate the difference: J A reputable citizen is approached by a man, clothed in a police uniform and wearing a police shield, who requests him to assist in the arrest of one whom he describes as a murderer. The law-abiding citizen, in good faith and in the belief that he is performing his duty, assists the uniformed stranger and participates in the arrest of one who is entirely innocent. While the citizen may be answerable in damages in a civil action, he is not guilty j! of the crime of kidnapping, even though proof is later adduced that the uniformed stranger is an impostor and a kidnapper. In such a case, far from intending to seize or confine the prisoner without authority of law, he f believed that his act was with such authority. In * prosecutions for kidnapping, therefore, willful intent to seize a person without authority of law is the essential issue. Inferences of fact as to intent depend upon the degree of credibility accorded to witnesses by the jury and may be drawn from the defendant’s disbelief or belief in the legality of his act. For the purpose of enabling the jury to draw its inference of fact, a defendant is entitled to the right of informing the jury in respect to his belief. His testimony may be of such a character as to fail to convince a jury, yet, nevertheless, he is entitled as a legal right to produce it for what it may be worth and to have it considered by the jury.

Appellant Schlossman testified that, prior to the seizure of Wendel, he had a conversation with appellant Weiss and with Ellis Parker, Jr., at a hotel in New York. His counsel attempted to introduce testimony in relation to statements by Parker, for the purpose of showing Schlossman’s belief in his authority to act, but the offer was excluded and an exception taken. The following statement by Schlossman to Parker was, however, admitted:

“ I have got to have something to show that I am doing something within the law, helping you out this way, so he took out. a badge, Secret Service of the State of New Jersey, and gave it to me and said he is hereby appointing me a special deputy to help him in the Lindbergh case.” The questions, Did you desire to help a | detective solve any part of the Lindbergh mystery at | that time? ” and “ Did you think at that time that you were taking part in some noble work? ” were excluded | and exceptions taken. The court stated: That does not j affect the question of his innocence or guilt, what he thought about those matters.” Exception was taken to the exclusion of testimony by which appellant Weiss attempted to show that Parker had informed him of his ■ official position and also to the exclusion of testimony by Weiss that he believed that the arrest of Wendel was made with authority of law. The following testimony in relation to a conversation between Weiss and Parker was stricken out and an exception noted: I said, ‘ Now, listen. Suppose I arrest this man and we use these badges and he raises an outcry, and it proves to be an arrest illegally and there is police all over the street and the neighborhood and they should happen to come over. What happens then? ’ He [Parker] said: ' Well, that is what I am here for.’ He says, You have the proper authority and if they question you I am there to prove who I am and whatever you done is the proper thing. Q. Did you believe that — what he told you? A. Yes.” Exception was taken also to the ruling which sustained objection to this question directed to Weiss: “ Did you believe that you were doing your Police work? ”

Counsel for defendants requested: That if the defendants, or either of them, acted in the honest belief that his . act in seizing and confining Wendel was done with I authority of law, even if they were mistaken in such | belief, that they cannot be convicted of seizing, confining or kidnapping Wendel, with intent, to cause him without authority of law to be confined or imprisoned within the State, and the jury must acquit such defendants or defendant.” To this request the court replied: I not only decline to charge that but I repeat that the question | of good faith is no defense.” The jury was also instructed that Even if they [defendants] did believe it, it is no | defense in this case.” If such interpretation is to prevail, then it must follow that in every instance where a defendant admits the fact that he intended to make the arrest and the courts later declare the arrest to have been made: without authority of law, he must necessarily be convicted as a kidnapper, irrespective of his belief or his intentions to conform’ with the law. A peace officer, in the mistaken belief that he is acting with authority of law, makes an illegal arrest and later, in an effort to extort a confession, puts his prisoner through the third | degree. He is guilty of the crime of assault or of official oppression, but he is certainly not a kidnapper. The question of assault is not in this case. So the trial judge charged.

The intent of defendants to seize and confine Wendel! cannot be doubted, but their intent to perform these 1 acts without authority of law depends upon the state of mind of the actors. If in good faith they believed that they were acting within the law, there could have been no intent to act without authority of law.” Their belief or disbelief indicates intent or lack of it (Wallace v. United States, 162 U. S. 466, 477) and they were entitled to testify in respect to their intent based upon their belief. (People v. Flack, 125 N. Y. 324, 335; Dehn v. Mandeville, 68 Hun, 335, 337.)

No matter how doubtful the credibility of these defendants may be or how suspicious the circumstances may appear, we cannot say as matter of law, that, even in so strong a case as this for the prosecution, thé jury was not entitled to consider the question whether defendants in good faith believed that they were acting with authority of law. We are, therefore, constrained to reverse the judgment of conviction and order a new trial for the purpose of submitting that question of fact to the jury.

The judgments should be reversed and a new trial ordered.

Crane, Ch. J.

(dissenting). I must dissent from the conclusions of Judge O’Brien in this case, upon three grounds:

First. I believe that the charge and rulings of the court were correct, and that the law has been well stated by Judge Johnston, in the prevailing opinion. (252 App. Div. 463, 465.) /The fact that the defendants may have thought they had authority to confine Wendel is no excuse for the criminal act and no defense. /The crime of kidnapping is committed when a person seizes and-confines another with intent to cause him to be confined or imprisoned within the State, and the act is done without lawful authority. The fact that the person thought he had lawful authority has nothing to do with the matter. The intent applies to the seizing and to the confining. The defendants in this case intended to seize Wendel and to confine him within the State/ In fact they confined him, bound, in Schlossman’s home. Whether they thought they were acting according to law or not, or had legal authority, is no defense. They had no legal authority, and the judge so charged as matter of law. In this he was correct, for such is the law. In fact no one claims they had any legal authority. Where, therefore, one is seized, taken away and secretly confined, and it turns out that the person doing it had no legal authority to do it, the crime of kidnapping is committed. Of course if there be legal authority there is no crime, but the fact that the person mistakenly thought that they had authority does not lessen the crime. The charge of the court, in my judgment, was correct, in accordance with the authorities of this State. In People v. Camp (139 N. Y. 87, 91), Judge Earl, writing in reference to the crime of kidnapping, as defined in the Bevised Statutes (2 B. S. § 28), says: “ Every person who shall without lawful authority forcibly seize and confine any other, * * * with intent * * * to cause such other person to be secretly confined or imprisoned in this state against his will,” is guilty of kidnapping. This is the Bevised Statutes, and you see at once that the intent has reference to the confining and to the seizing, and does not apply to the intent to do it contrary to law. Persons are supposed to know the law; and believing that the law gives them right to do things does not rob acts of criminal consequences. Judge Earl says that these words have now been carried over into the Penal Code, and so we find them in our Penal Law, section 1250.

So in Mandeville v. Guernsey (51 Barb. 99,101,102; affd., 50 N. Y. 669), an arrest of a person within this State, by a private individual, without warrant, made for the purpose of forcibly abducting the arrested person from the State, and followed immediately by such abduction, cannot be justified. Such seizure and abduction, of themselves, constitute a criminal offense of high grade, both at common law, and by statute.” We have not weakened this law of kidnapping by any change in the statute. It would be a sorry day for us, in my judgment, when people can seize a man in the public streets, lock him up and torture him, and plead as defense that they believed the law permitted them to do it. The law permits no such defense, or the plea of such a defense.

Second. The exceptions to the rulings of the judge excluding the evidence as to whether these defendants believed that they had authority to seize and imprison Wendel are harmless anyway, as both defendants testified as to the authority which young Parker told them they had, and the reasons given for not calling upon the New York police.

Third. Even if the law were different than I have stated it, we should not reverse for any of these rulings upon the plea that these men believed the law permitted them to seize Wendel, when both admit in their testimony before the grand jury that Wendel was taken to Schlossman’s home, where Schlossman had prepared a stool or box posted in the cement upon which he and Weiss aided in fastening Wendel; that they saw him tied up with rope, and both participated in holding the straps while he was give the spread eagle, and kicked in the testicles; and both aided while he was pulled over backward by straps and tortured until he fainted. Such a case should not be reversed because these two men were not permitted to say that they believed they were aiding justice and obeying the law in committing such acts, all of which were part of the kidnapping.

For these reasons I am for affirmance of the conviction.

Lehman, Lotjghran and Rippey, JJ., concur with O’Brien, J.; Crane, Ch. J., dissents in opinion, in which Hubbs and Finch, JJ., concur.

Judgments reversed, etc.


text:
    Norton & Siegel, Inc., Appellant, v. Phyllis M. Nolan, as Executrix of James R. Nolan, Deceased, Respondent.
    Argued December 7, 1937;
    decided January 11, 1938.

      Philip E. Barnard for appellant.
    The court below erred in holding that the judgment was not appealable because it recites that it was entered on motion of appellant’s attorneys. (Fish v. Weatherwax, 2 Johns. Cas. 215; Smith v. Dittman, 16 Daly, 427; Fisher Co. v. Woods, 187 N. Y. 90; Robbins v. Railroad Co., 7 Bosw. 1; Purdy v. Peters, 15 Abb. Pr. 160; Raymond v. Tiffany, 115 App. Div. 350; Davis v. Fogarty, 134 App. Div. 500; Rector of St. Stephen’s Church v. Rector of Church of the Transfiguration, 134 App. Div. 452; Oppehheimer v. Carabaya Rubber & Nav. Co., 145 App. Div. 830; Bloch v. Bloch, 136 App. Div. 770.) The Appellate Division erred in dismissing the appeal. (Raymond v. Tiffany, 115 App. Div. 350; Davis v. Fogarty, 134 App. Div. 500; Rector of St. Stephen’s Church v. Rector of Church of the Transfiguration, 134 App. Div. 452; Hengel v. Banna, 221 App. Div. 831; S. J. E. Bldg. Corp. v. Matt O. M. Construction Co., 265 N. Y. 282.)

      James G. Purdy for respondent.
    The Appellate Division correctly held that the judgment was not appeal-able by the plaintiff, it clearly appearing that it had been entered on plaintiff’s own motion. (Fish v. Weatherwax, 2 Johns. Cas. 215; Genet v. Davenport, 59 N. Y. 648;
      Traffarn v. Getman, 49 Hun, 611; Hooper v. Beecher, 109 N. Y. 609; Munson Realty Co. v. Melrose Bond & Mortgage Corp., 232 App. Div. 832; Matter of Gier, 243 App. Div. 560;. Schrader v. Fraenckel, 113 App. Div. 395; Josias v. Nivois, 107 N. Y. Supp. 19; Oppenheimer v. Demuth Glass Mfg. Co., 56 Misc. Rep. 459; Diver v. American Ice Co., 129 N. Y. Supp. 65.)
   O’Brien, J.

This action was brought to recover a sum in excess of $4,600 but the judgment of the referee awarded a lesser amount. In plaintiff’s notice of appeal to the Appellate Division occurs this language: “plaintiff appeals from so much of said decision and judgment as decides and adjudges that the plaintiff have and recover from the defendant the sum of $1,574.25.” The notice of appeal also states that plaintiff will bring up for review its exceptions to the referee’s refusal of its requests to find facts and to make conclusions of law and also its exceptions to the findings and conclusions “in so far as said findings of fact and conclusions of law limit the recovery herein by this plaintiff to the sum of $1,574.25.” Its appeal was dismissed by the Appellate Division upon the sole ground that the judgment recites that it was entered upon the motion of plaintiff’s attorneys.

Obviously a judgment by default or one entered upon consent is not reviewable. Respondent strongly relies upon two decisions in this court, Genet v. Davenport, (59 N. Y. 648) and Hooper v. Beecher (109 N. Y. 609), but they do not appear to require a dismissal. In the Genet case the appeal was from the entire judgment; here plaintiff appealed only from “ so much ” of the judgment as was adverse and “ in so far ” as it limited the amount of the recovery. In the Hooper case (p. 610) the court emphasized the fact that upon appellants’ own motion, “ they obtained the precise relief they had made application for.” A party which has been completely successful is not aggrieved, but the appellant now before us is in no such position. By the judgment from which it appealed two-thirds of the sum which it asserts to be due was withheld. In Bloch v. Bloch (136 App. Div. 770) the Appellate Division reversed an order which recited entry upon appellant’s motion and held that, under the circumstances, substance should prevail over form. In Oppenheimer v. Carabaya R. & N. Co. (145 App. Div. 830, 833) the court reversed an order and stated in its opinion; “ Although this order recites that it was entered on motion of the defendant’s [appellant’s] attorneys, it is evident upon its face, when read in conjunction with the notice of motion, that such recital does not indicate that defendant was satisfied with the order, and it will not, therefore, be held to be precluded thereby.” When the recitals in the judgment before us are considered in relation to the allegations of the complaint the fact seems clear that plaintiff was not satisfied with the judgment. The language in the notice of appeal in this action makes certain the dissatisfaction of plaintiff.

The judgment of the Appellate Division should be reversed, with costs in this court, and the matter remitted to the Appellate Division for consideration on the merits.

Crane, Ch. J., Lehman, Hübbs, Lohghran, Finch and Rippey, JJ., concur.

Judgment accordingly.


author:
Rippey, J.
      Lehman, J.

text:
    United States of America, Appellant, v. President and Directors of the Manhattan Company, Respondent, Impleaded with Others.

      Argued November 19, 1937;
    decided January 11, 1938.

      Edward J. Ennis and Leon E. Spencer for appellant.
    The complaint states a cause of action against respondent and should not have been dismissed. (United States v. Belmont, 85 Fed. Rep. [2d] 542 ; 301 U. S. 324; Dougherty v. Equitable Life Assur. Society, 266 N. Y. 71; Kennison v. Stewart, 93 U. S. 155; Russell v. Lasher, 4 Barb. 232; Hooper v. Tuckerman, 3 Sandf. 311.) The assignment for benefit of creditors is invalid and should be vacated.
      (Matter of People [Northern Ins. Co.], 262 N. Y. 453; United States v. Belmont, 301 U. S. 324; Issaia v. Russo Asiatic Bank, 266 N. Y. 37; Dougherty v. Equitable Life Assur. Society, 266 N. Y. 71; United States v. Bank of New York & Trust Co., 77 Fed. Rep. [2d] 866; Rogers v. Pell, 154 N. Y. 518; Vanderpoel v. Gorman, 140 N. Y. 563; Erie R. R. Co. v. City of Buffalo, 180 N. Y. 192; Severnoe Securities Corp. v. London & Lancashire Ins. Co., 255 N. Y. 120.)

      Robert J. Sykes and William C. Morris for respondent.
    The executive agreement is subordinate to the Constitution. (Geofroy v. Riggs, 133 U. S. 258; The Cherokee Tobacco, 11 Wall. 616; Yick Wo v. Hopkins, 118 U. S. 356; Pearsall v. Great Northern Ry. Co., 161 U. S. 646; Merchants Bank v. Ballou, 98 Va. 112; Cetofonte v. Camden Coke Co., 78 N. J. L. 662; Pritchard v. Norton, 106 U. S. 124; Gilman v. Tucker, 128 N. Y. 190; McCullough v. Virginia, 172 U. S. 102; Vladikavkazsky Ry. Co. v. New York Trust Co., 263 N. Y. 369; James & Co. v. Second Russian Ins. Co., 239 N. Y. 248; Russian Volunteer Fleet v. United States, 282 U. S. 481.) The language of the assignment does not include a claim against the respondent. (Crapo v. Kelly, 16 Wall. 610; Rose v. Himely, 4 Cranch, 241; Gelston v. Hoyt, 3 Wheat. 246; United States v. Buford, 3 Pet. 12; Feeser v. Feeser, 15 Atl. Rep. 406; Rutez v. Sagamore Valley Mut. Fire Ins. Co., 94 N. W. Rep. 191; Yocum v. Allen, 5 N. E. Rep. 909; United States v. State Bank of North Carolina, 31 U. S. 29.) The assignment conveyed no title upon which this suit could be brought. (Spencer v. Standard Chemicals & Metals Corp., 237 N. Y. 479.)

      P. C. Whipp for Paul Lucke, as surviving director of Moscow Fire Insurance Company, etc., amicus curiæ.

   Rippey, J.

Upon motion of defendant, President and Directors of the Manhattan Company, successor to the Bank of the Manhattan Trust Company, as agent or depository of the Northern Insurance Company of Moscow and as assignee for the benefit of creditors of the Northern Insurance Company of Moscow, under the provisions of rule 106 of the Rules of Civil Practice, an order was made at Special Term dismissing the complaint on the ground that the complaint fails to state facts sufficient to constitute a cause of action. The Appellate Division has unanimously affirmed and has certified to us that in its opinion a question of law is involved which ought to be reviewed by this court.

For present ‘purposes, every fact set forth in the complaint must be deemed to be true. Referring to the facts alleged, in so far as it is deemed here necessary, the following appears:

Prior to 1918 the Northern Insurance Company of Moscow was an insurance company, organized and existing under the laws of the Empire of Russia, and in 1918 and thereafter had assets within the State of New York consisting, in part, of a deposit of cash, securities and other assets with the Superintendent of Insurance as a statutory requirement preliminary to and as a condition of its being permitted to transact business within this State. During the years 1918 and 1919, by decrees, laws, enactments and orders of the Russian State, the business of insurance in all its forms was proclaimed to be a monopoly of the Soviet government, all Russian insurance companies were dissolved, terminated and liquidated, their property and assets of every kind and wherever situate were nationalized, their debts, including the obligation to creditors who are named as defendants in this action, canceled, extinguished, annulled and discharged, the rights of all stockholders in and to such property and assets were extinguished and all obligations and liabilities of such companies to them were discharged. As a consequence, the property and assets of the insurance company within the State of New York became the property of the Russian State and so remained until November 16, 1933, when the Union of Soviet Socialist Republics released and assigned to plaintiff all amounts admitted to be due or found to be due to the assignor from American nationals. This assignment included surplus funds and assets of approximately $332,994.65 which were received by the defendant bank as depository and now remain in its possession, for the recovery of which this suit is brought.

It further appears from the complaint that on June 9, 1926, the Superintendent of Insurance of the State of New York was appointed liquidator of the United States branch of the Northern Insurance Company by an order of the Supreme Court of this State, took possession of its assets and thereafter proceeded to liquidate its business to the end that he satisfied the claims of domestic creditors, and the surplus consisting of cash, securities and other assets amounting approximately to $245,307.60 remained in his possession. Thereupon the Superintendent of Insurance brought his account into court and requested a direction concerning the disposition of the surplus. That question reached this court. By a decision February 14, 1931, the surplus was directed paid to Boris Schwetzoff and Nicholas Goutchkoff, as surviving directors of the insurance company, who constituted less thati. a quorum thereof, as conservators of its property, upon their filing with the court- a duly approved surety bond in a penalty equal to the sum to be delivered (Matter of People [Northern Ins. Co.], 255 N. Y. 433). Such conservators, being unwilling to act, before accepting any funds undertook, on May 6, 1932, to execute and deliver to the Bank of the Manhattan Trust Company, predecessor of defendant, a general assignment of all the property of the insurance company in trust for the benefit of its creditors. The assignment and trust were accepted by the trust company and recorded in the New York County Clerk’s office on June 26, 1932. The trust company also filed a bond which was approved by a justice of the Supreme Court on July 2, 1932. On March 7, 1933, this court granted a reargument of the former appeal, recalled the remittitur and modified its former decision by directing that the surplus assets might be turned over by the Superintendent of Insurance to the trust company as agent or depository but they were not to be withdrawn except upon the order of a court of competent jurisdiction (Matter of People [Northern Ins. Co.], 262 N. Y. 453).

The trust company received $245,307.60 from the Superintendent of Insurance on August 3, 1933, and on November 13, 1933, undertook, as such agent and depository, pursuant to an order of the Supreme Court, to deliver to itself as assignee for the benefit of creditors of the insurance company all of such assets and property. On March 13, 1934, defendant received other assets amounting to' $87,686.45. Thereafter, defendant, as assignee, filed its account and a referee was appointed by the Supreme Court to take and state the account and to hear objections to any claims and to report to the court. Pending final report of the referee"(not yet filed) the court made an ad interim, order directing payment of claims of certain foreign creditors of the insurance company and counsel fees.

Demand on defendant was made by plaintiff for the funds in question on August 24, 1934, and refused, and on the following day a suit in equity was commenced by plaintiff against defendant in the United States District Court for the Southern District of New York to recover the aforesaid funds. On December 20, 1934, the complaint was dismissed by the District Court (10 Fed. Supp. 269) on the ground of insufficiency. This order was affirmed by the Circuit Court of Appeals, Second Circuit, on May 27, 1935 (77 Fed. Rep. [2d] 880), and by the United States Supreme Court on January 6, 1936 (269 U. S. 463). Affirmance by the Supreme Court was placed on the ground that the District Court was without jurisdiction to entertain the suit inasmuch as the funds were in the custody of the Supreme Court of this State.

Plaintiff thereupon made an unsuccessful attempt to intervene and secure relief in the assignment proceedings instituted by defendant and then pending in the Supreme Court for distribution of the fund. It was held that relief was possible only by way of an independent action in equity and the order entered thereon was without prejudice to the institution of the time-honored form of action.” Pending hearing of such motion to intervene, a stay in the assignment proceedings had been granted, but that was vacated by the order denying plaintiff’s application to intervene and further hearings were undertaken before the referee to determine the claims of creditors of the insurance company.

Plaintiff thereupon commenced this action in equity, alleging that it “ possesses and asserts a' sovereign title, right and interest under the Constitution, laws, treaties, and authority of the United States in and to the funds which are the subject of this action,” to restrain further action in the assignment proceedings and for a determination herein of its title and rights to the fund. It seeks to bring in all adverse claimants to the fund, including friendly aliens, to the end that the rights and equities which any or all claimants may have to the surplus may be adjudicated in one action without clogging the courts with a multiplicity of suits, that plaintiff’s rights may be determined and that any moneys to which it is entitled may be held within the control of the court and not distributed and dissipated beyond hope of recovery if it should be adjudicated that it is entitled thereto. It seeks to have the assignment by the directors of the insurance company to defendant for the benefit of creditors set aside and declared void and to have it adjudged that defendant holds the surplus as agent and depository only as theretofore directed by this court and prays that defendant may be required to account and turn over such surplus to plaintiff. It is clear from the allegations of the complaint that great and irreparable damage may result if plaintiff is denied relief herein and that it has no adequate and no other remedy at law.

Certain decisions of this court made subsequent to 1918 involving the Northern Insurance Company and the liquidation of its assets, the situs of which was within the State of New York or relating to the affairs of other Russian corporations having property within this jurisdiction at the time of or subsequent to the Soviet decree of confiscation, were rendered prior to November 16, 1933, the date of recognition of the Soviet government by the government of the United States (Wulfsohn v. Russian S. F. S. Republic, 234 N. Y. 372; Russian S. F. S. Republic v. Cibrario, 235 N. Y. 255; Matter of People [City Equitable F. Ins. Co.], 238 N. Y. 147, 158; Sokoloff v. National City Bank, 239 N. Y. 158; James & Co. v. Second Russian Ins. Co., 239 N. Y. 248; 240 N. Y. 581; Russian Reinsurance Co. v. Stoddard, 240 N. Y. 149, 682; Joint Stock Co. v. National City Bank, 240 N. Y. 368; First Russian Ins. Co. v. Beha, 240 N. Y. 601; Matter of People [Norske Lloyd Ins. Co.], 242 N. Y. 148; Matter of People [Second Russian Ins. Co.], 243 N. Y. 524; 255 N. Y. 412, 436; James & Co. v. Rossia Ins. Co., 247 N. Y. 262; Petrogradsky M. K. Bank v. National City Bank, 253 N. Y. 23; Severnoe Securities Corp. v. London & Lancashire Ins. Co., 255 N. Y. 120; Matter of People [Russian Reinsurance Co.], 255 N. Y. 415; Matter of People [First Russian Ins. Co.], 255 N. Y. 428; Matter of People [Northern Ins. Co.], 255 N. Y. 433; 261 N. Y. 616, 624; 262 N. Y. 453; Salimoff & Co. v. Standard Oil Co., 262 N. Y. 220). Others have been rendered since recognition. (Vladikavkazsky Ry. Co. v. New York Trust Co., 263 N. Y. 369; Dougherty v. Equitable Life Assur. Soc., 266 N. Y. 71; Matter of People [First Russian Ins. Co.], 266 N. Y. 421.)

In all cases above referred to where the question was discussed we have said that, prior to recognition of the Soviet government, by the government of the United States, we would generally decline to recognize the extraterritorial effect of the Soviet decrees by which Russian corporations existing at the time of the Revolution were nationalized, their property confiscated and their debts repudiated, as affecting contracts not made and /or to be performed in Russia or property located within this State, on the ground that such acts were contrary to the public policy of the State of New York as well as to the public policy of the United States. We suggested in James & Co. v. Second Russian Ins. Co. (supra), and asserted in Vladikavkazsky Ry. Co. v. New York Trust Co. (supra), that our decision would be the same even after recognition. Nevertheless, we stated in Salimoff & Co. v. Standard Oil Co. (supra), and definitely decided in Dougherty v. Equitable Life Assur. Soc. (supra), where, in the latter case a contract made by a Russian national in Russia and to be performed there was involved, that recognition by the government of the United States of the Soviet government validates all decrees of that government from the time of its inception. But we have not held that the effect of such decrees either before or after recognition can compel our courts to refrain from proceeding according to the law and policies of our forum as to assets of the nationalized corporation within our jurisdiction.

In United States v. Belmont (85 Fed. Rep. [2d] 542) it was held that the situs of the bank deposits there in question was within the State of New York and the nationalization decree, if enforced, would put into effect an act of confiscation which would be contrary to the public policy of this State and likewise infringe the public policy of the United States (citing Vladikavkazsky Ry. Co. v. New York Trust Co., supra; Laws of 1936, ch. 917; Civ. Prac. Act, § 977-b), but, upon reversal on appeal, the Supreme Court stated: “ We take judicial notice of the fact that coincident with the assignment set forth in the complaint, the President recognized the Soviet Government, and normal diplomatic relations were established between that Government and the Government of the United States, followed by an exchange of ambassadors. The effect of this was to validate, so far as this country is concerned, all acts of the Soviet Government here involved from the commencement of its existence. The recognition, establishment of diplomatic relations, the assignment and agreements with respect thereto, were all parts of one transaction, resulting in an international compact between the two governments. * * * No state policy can prevail against the international compact here involved. * * * In respect of all international negotiations and compacts, and in respect of our foreign relations generally, state lines disappear. As to such purposes the State of New York does not exist. Within the field of its powers, whatever the United States rightfully undertakes, it necessarily has warrant to consummate. And when judicial authority is invoked in aid of such consummation, state constitutions, state laws, and state policies are irrelevant to the inquiry and decision. It is inconceivable that any of them can be interposed as an obstacle to the effective operation of a federal constitutional power. * * * The substantive right to the moneys, as now disclosed, became vested in the Soviet Government as the successor to the corporation; and this right' that government has passed to the United States. It does not appear that respondents have any interest in the matter beyond that of a custodian.” (301 U. S. 324, 327, 330, 331, 332).

Although the decree appropriating property and assets of the insurance company extended to such property and assets of every kind and wherever situated, we find that the decision in the Belmont case goes no further than to hold, in so far as it may be applicable here, that recognition must be given to the validity of the confiscation decree by which the assets of the insurance company located in this country became the property of the Soviet government and by it were passed on by assignment to the plaintiff in so far only as the act of confiscation did not interfere with the rights and equities of our nationals in such property and of adverse claimants thereto to the extent that our courts may be opened to them for the assertion of their claims. To the extent indicated the assignment of November 16, 1933, from the Soviet government to plaintiff has been held valid by the decision in the Belmont case. The assignment there held valid is the identical assignment here involved and its validity is beyond attack in this court.

It is clear that we would not in this forum recognize the confiscation decree of 1918 to the end that .the Soviet government or its assignee might assert title to the assets of the foreign corporation within our jurisdiction to the prejudice of our own nationals who are creditors. The claims of domestic creditors of the insurance company have been fully satisfied in the proceedings instituted and carried on by the Superintendent of Insurance. Had there been a receiver at the domicile of the corporations it would be our duty to turn over the surplus to such receiver. (Matter of People [City Equitable Fire Ins. Co.], 238 N. Y. 147, 156.) But there is no receiver of the Russian insurance company at its domicile. In Russian territory it ceased to exist as a corporation. The corporation has been nationalized and its assets confiscated. We have held, however, " that the surplus must be made available for the payment of creditors and policyholders with claims founded upon foreign business,” and that, upon appearance of solvency and lack of showing “ that waste or spoliation of the assets is threatened or intended,” the surplus should be turned over to the board of directors of said corporation, “ represented by a quorum, [who] were still competent to act.” (Matter of People [Russian Reinsurance Co.], 255 N. Y. 415, 422, 425.)

The plaintiff here as assignee of the Soviet government holds no greater title and stands in no better position than its assignor. Are we bound to turn over the entire surplus to plaintiff or may plaintiff be entitled in this forum only to such portion thereof, if any, as may not be equitably subject to the claims of foreign creditors? Those questions remain for determination on the trial of this action. So far as this appeal is concerned there are but two parties before this court, namely, the assignee of the Soviet government who acquired title to the surplus by virtue of the confiscation decree on the one hand, and the depository of the surplus on the other. True, the complaint gives notice that foreign creditors have attempted to file or have filed claims in an unauthorized proceeding on the theory that defendant was an assignee for the benefit of creditors. That does not change the situation so far as concerns the question before the court. The interest of plaintiff is sufficiently shown to give it standing in this court. On the face of the complaint it states facts sufficient to constitute a cause of action. (United States v. Belmont, 301 U. S. 324.) What outstanding equities there are or may be affecting the surplus will become our duty to determine only after those who may be adverse claimants are before the court. We have no information at hand to indicate that the debtor, the corporation whose assets were confiscated, did not at the time of confiscation and does not now have sufficient assets in the domiciles abroad of the several foreign creditors to satisfy their alleged claims in the jurisdictions of their domicile. Neither do we have any information to indicate what relation, if any, the claims of these foreign creditors had to the business of the insurance company transacted within the State of New York. Prima facie, at least, plaintiff may be entitled to the whole fund.

The board of directors of the insurance company consisted of five regular members and two alternate members, of whom two only survive. Whether regular or alternate, the two members who were named as conservators did not constitute a quorum. In directing that the surplus be paid over to the two surviving directors, we gave them no authority to make an assignment to any one for the benefit of the creditors of the Northern Insurance Company or for any other purpose. They were entirely unauthorized to act for the corporation under Russian law, for the corporation had long since been dissolved. We recognized in James & Co. v. Rossia Ins. Co. (247 N. Y. 262), again in Severnoe Securities Corp. v. London & Lancashire Ins. Co. (255 N. Y. 120), and again in Matter of People [Northern Ins. Co.] (255 N. Y. 433) that former directors, though less than a quorum, retained power in this country to conserve assets of the corporation whose situs was in the State of New York to the extent that our courts were able to protect those assets and that they might be named by the courts of our State as conservators thereof. Beyond that we did not go. When our attention was called on reargument of thé decision in which we authorized the directors to act as conservators of the surplus assets of the American branch of the insurance company still in the possession of the Superintendent of Insurance of this State, we pointed out in clear and explicit language incapable of misinterpretation or misunderstanding that the assignment from them to the Bank of the Manhattan Trust Company was not authorized by our previous decision and thereby gave definite warning of what the effect of the assignment might be and what weight might be accorded to it. No inference could be indulged that by either decision in which we authorized release of the funds to the directors or to defendant’s predecessor we recognized directly or indirectly the validity or propriety of the assignment by the directors. We merely authorized discharge of the Superintendent of Insurance from further obligation with respect to the surplus upon turning such surplus over (1) to the surviving directors as conservators, and (2) later to the Bank of the Manhattan Trust Company in a capacity of depository to hold until the further order of the court. Whether assuming to act on the strength of the alleged assignment from the former directors or otherwise, defendant was without authority voluntarily to assign to itself for the benefit of creditors or for any other purpose the funds which were committed to its care. It became merely an officer of the court to act, when legally authorized to act by the court of which it was an officer, with reference to the disposition of the funds.

Assuming, without deciding because the matter is not before us on this appeal, that the proceeding for the distribution of the surplus in the possession of defendant was authoritatively taken, plaintiff might have been permitted to intervene therein and assert its rights. The opportunity to there present its claims was not given. From the order denying it the right to intervene, the time to appeal has expired. No course was left open to it except the commencement of this action. It would be unjust and inequitable to deny it the right to institute this action and assert and have adjudicated its alleged title and right to the funds. The creditors of the insurance company who have asserted claims to the fund and have been named defendants in this action but have not been so far served with process presumably will be served. If not, they or others not named who may conceive that they have an interest in the surplus may undertake to intervene and have their rights adjudicated. Indeed, plaintiff recognizes the right of the named creditors to have their claims adjudicated in this action by making them parties and, additionally, the right of others to appear, in the prayer for relief. Nothing here said, however, may be construed as a determination of the right of foreign creditors to intervene. That question may be settled when all the facts are properly before the court.

The judgment of the Appellate Division and the order of the Special Term should be reversed, with costs in this court and in the Appellate Division, and the motion to dismiss the complaint denied, with ten dollars costs.

Lehman, J.

(dissenting). The moneys of the Northern Insurance Company, to which the United States of America asserts a claim, are in the custody of the Supreme Court of the State of New York, and are held by the defendant as “ agent or depository.” (United States v. President & Directors of Manhattan Co., 296 U. S. 463.)

The moneys of the insurance company were placed in the custody of the court before the Soviet government was recognized, and while this State refused to give effect to decrees of the Russian government confiscating the property of the insurance company. Since recognition of the Soviet government by the United States, the courts of this State are bound to give effect to those decrees, and the United States of America, as assignee of the Soviet government, now has succeeded to any rights which, but for such decree, the insurance company would have. (United States v. Belmont, 301 U. S. 324.)

Claiming ownership of the moneys now in the custody of the Supreme Court, the United States)of America began a proceeding in the Federal court to compel payment to it. The Supreme Court of the United States held that it could not maintain that action. For moneys in the custody of the Supreme Court of this State, the plaintiff must resort to that court. (United States v. President & Directors of Manhattan Co., supra.) Proceedings are pending in that court for the distribution of these moneys. Claims have been presented. The defendant trust company has filed an accounting, and a referee has been appointed to pass upon the accounts and to determine the validity of the claims. The United States of America made a motion to intervene in those proceedings. Its motion was denied, and it was relegated to this action in equity for the assertion of its claim to the moneys.

There can be no doubt that in some form the United States of America must be given opportunity to assert its claim, and that the only question that remains open after the decision in the Belmont case is whether its claim to the moneys of the insurance company is superior to the claims of others which have been filed in the accounting proceedings in the Supreme Court. The difficulty is that by denial of the motion to intervene, the United States of America cannot appear in those proceedings to contest the validity of the claims, and, on the other hand, the claimants cannot assert their claims in this action unless they are made or become parties to it. The purpose of the equity action is to obtain the moneys from the defendant bank. The defendant bank is an officer of the court. The bank must hold the moneys awaiting the further order of the court. That further order can be properly made only in accounting proceedings, or other proceedings in which both the defendant and all claimants can be heard. For that reason it seems clear to me that the motion of the United States to intervene should have been granted. I do not think that because the Supreme Court of the State of New York, at Special Term, erred in denying the motion for leave to intervene such error lays the basis for an action in equity against an officer of the court to compel him to deliver property in his custody. I suggest that for this reason the judgment of the courts below dismissing the equitable action should be affirmed, pointing out at the same time that the United States has an absolute right to intervene in the pending accounting proceeding of the custodian, and that a renewed motion for such relief should be granted.

Crane, Ch. J., O’Brien, Htjbbs, Loughran and Finch, JJ., concur with Rippey, J.; Lehman, J., dissents, in opinion.

Judgment accordingly.


author: Finch, J.

text:
    Magdalene Wawrzonek, as Administrator of the Estate of Louis Wawrzonek, Deceased, Appellant and Respondent, v. Central Hudson Gas and Electric Corporation, Respondent and Appellant.
    Argued December 10, 1937;
    decided January 11, 1938.

      William A. Mulvey for plaintiff, appellant and respondent.
    The Northeast Company bore the relation of independent contractor to the defendant. (Brown v. Munn Piano Co., 172 App. Div. 372; Petrie v. Small Realty Co., 141 App. Div. 681; McMullen v. City of New York, 104 App. Div. 337; Hexamer v. Webb, 101 N. Y. 377; Hawke v. Brown, 28 App. Div. 37; Linnehan v. Rollins, 137 Mass. 123; Tuttle v. Embury-Martin Co., 192 Mich. 385; Aisenberg v. Adams Co., 95 Conn. 419; Bristol & G. Co. v. Industrial Comm., 292 Ill. 16; Columbia School Supply Co. v. Lewis, 65 Ind. App. 339; Root v. Shadbolt, 195 Iowa, 1225; Moore v. Wills, Inc., 250 N. Y. 426; Losee v. Paramount Hotel Corp., 137 Misc. Rep. 530.) The deceased was neither the general nor special employee of the defendant. (Corning v. Walker, 100 N. Y. 547; Densby v. Bartlett, 318 Ill. 616; Butler v. Townsend, 126 N. Y. 105; Mackey v. City of New York, 193 App. Div. 535; Matter of Schweitzer v. Thompson & Norris Co., 229 N. Y. 97; Carlisle v. Norris, 215 N. Y. 400; Davis v. Martin, 111 App. Div. 411; Standard Oil Co. v. Anderson, 212 U. S. 215; Charles v. Barrett, 233 N. Y. 127; Murray v. Union Ry. Co., 229 N. Y. 110; Matter of Beach v. Velzy, 238 N. Y. 100; Latini v. Zavodnick, 254 N. Y. 346; Matter of Dutcher v. Victoria Paper Mills Co., 219 App. Div. 541.) If the evidence tending to show employment is conflicting, a question is presented for the jury, and the jury’s answer to that question should have been accepted by the Appellate Division.
      (Murray v. Union Ry. Co., 229 N. Y. 110; Stone v. Western Transp. Co., 38 N. Y. 240; Zorn v. Pendleton, 163 App. Div. 33; Diel v. Zeltner Brewing Co., 30 App. Div. 291; Spitser v. Nassau Newspaper Delivery Exp. Co., 20 Misc. Rep. 327.) The defendant is liable to the plaintiff for its negligence in causing the death of plaintiff’s intestate. (Burke v. Ireland, 26 App. Div. 487; Parsan v. Johnson, 208 N. Y. 337; Miller v. City of Rochester, 196 App. Div. 853; Schmidt v. Stern, 119 Misc. Rep. 529; Coughtry v. Globe Woolen Co., 56 N. Y. 124; Ramsey v. N. Y. C. R. R. Co., 269 N. Y. 219; Indemaur v. Dames, 1 C. P. 274; Matter of DeNoyer v. Cavanaugh, 221 N. Y. 273.)

      Desmond T. Barry and Dickinson S. Talley for defendant, respondent and appellant.
    The deceased was an employee of the defendant. (Standard Oil Co. v. Anderson, 212 U. S. 215; Lee v. Cranford Co., 230 N. Y. 618; Matter of Nolan v. Cranford Co., 4 State Dept. Rep. 337; 171 App. Div. 959; 219 N. Y. 581; Matter of Schweitzer v. Thompson & Norris Co., 229 N. Y. 97.) The evidence complies with the rules of special employment. (Charles v. Barrett, 233 N. Y. 127; Standard Oil Co. v. Anderson, 212 U. S. 215; Lee v. Cranford Co., 230 N. Y. 618.) The deceased considered himself an employee of the defendant. (Murray v. Union Ry. Co., 229 N. Y. 110.)
   Finch, J.

The deceased was killed by a conveyor which tipped over and crushed him while working as one of a gang engaged in placing oxide in a purifying box used by the defendant Central Hudson Gas and Electric Corporation in the manufacture of illuminating gas. The administratrix of the deceased sued defendant in negligence and recovered a verdict in the amount of $12,000.

Four questions were submitted to the jury and answered as follows: “ Q. 1. Did the Central Hudson Gas & Electric Corporation have the right to direct and control Louis Wawrzonek during the working hours of August 14, 1932? A. Yes. Q. 2. Did the Central Hudson Gas & Electric Corporation hire the said Louis Wawrzonek for the work that he was engaged in at the time of his death? A. Unable to agree. Q. 3. Did the Central Hudson Gas & Electric Corporationhave the right to discharge the said Louis Wawrzonek on August 14,1932? A. No. Q. 4. Was Louis Wawrzonek in the employ of the Central Hudson Gas &_Electric Corporation on. August 14, 1932? A. No.” The Appellate Division reversed on the law and the facts, and dismissed the complaint without prejudice, holding the answers to the third and fourth questions as given by the jury contrary to the weight of evidence. The Appellate Division said in its opinion that the record showed that the deceased was hired, controlled and directed by the defendant’s foreman, who also had the right to discharge him, that the deceased was engaged in defendant’s work under such employment at the time of the accident, and was not in the employ of the Northeast Company as alleged in the complaint.

. The respondent particularly relies upon the defense that the deceased was an employee of the defendant at the time of the accident, saying in its brief: The point on this appeal is whether the deceased was an employee of the defendant at the time he met his death so that the sole remedy of the appellant would be under the Workmen’s Compensation Law.” We do not elaborate, therefore, on the issue of negligence, saying ih brief that there was sufficient evidence to go to the jury to show that the defendant by its own acts created the necessity of moving an unstable machine over ground so uneven that the machine was more than likely to tip over. The jury could find that the level pathways were piled with oxide. A machine was furnished that was apt to tip over if moved over uneven ground. With full knowledge of these facts, a direction was given to move the machine without taking sufficient precautions. The question of negligence of the defendant as well as of contributory negligence and assumption of risk were properly left to the jury and its decision in favor of the plaintiff cannot be said to be against the weight of the evidence.

We pass then to whether the plaintiff was either a general or special employee of the defendant at the time of the accident. If at such time, employment, either general or special, existed, then the provisions of the Workmen's Compensation Law (Cons. Laws, ch. 67) were applicable, and the plaintiff is barred from bringing an action for negligence. (Matter of Schweitzer v. Thompson & Norris Co., 229 N. Y. 97.) The Appellate Division having reversed and dismissed the complaint, we reach the inquiry whether there were any facts sufficient to carry to the jury the question whether the deceased was not an employee of the defendant. (Maguire v. Barrett, 223 N. Y. 49.)

Prior to 1932 the defendant maintained its labor on its own payrolls, but then, in order to avoid increase in premium due to accidents, sought to carry its labor on the payroll of another company, so that such increase in compensation rate would not fall on the defendant. The Northeast Utilities Contractors, Inc., was a corporation engaged chiefly in construction work under contract with public utility companies. Defendant entered into a written contract with Northeast, which provided in substance that Northeast was to furnish labor and do everything necessary to prosecute the work in an expeditious and workmanlike manner. The defendant was to “ furnish material, transportation, supervision, plans, tools and equipment.” All work was to be performed iru accordance with the defendant’s construction standards, safe practices, drawings and specifications. For performance of this work, Northeast was to be paid the cost of such labor plus a fee of ten per cent, together with the cost of workmen’s compensation insurance and contractor’s public liability insurance, including property damage liability. The defendant was to be furnished before the commencement of the work with Northeast’s certificates of insurance. Northeast was to give personal attention to the faithful prosecution and completion of the work, and “ be present either in person or by a competent and duly authorized representative on the site of the work continually during its progress.” Also Northeast was to enforce strict discipline and good order among its employees, and not employ any unfit person or any one not skilled in the work assigned to him. Northeast also agreed to conduct operations so as to provide good relations with the public, and discharge any employee causing breaches of the peace or any other disturbance of said relationship. Northeast was to barricade all trenches and excavations both day and night, and adequately light each night said barricades and equipment and contractor’s equipment left in streets or highways. If Northeast did not prosecute the work properly, or failed to perform any provisions of the contract, defendant, after three days’ written notice, might do any work necessary to remedy such default and, should Northeast refuse to prosecute the work or default after three days’ written notice to Northeast, the defendant might terminate the contract. Northeast was also to obtain licenses and permits and to pay promptly for all materials and for all labor employed by it.

Although words providing that the contractor agrees to prosecute the work “ as an independent contractor ” were stricken from a clause which also provided that the work should be prosecuted in every respect at the risk of Northeast until completed and accepted by the owner, except as to damages or injuries caused directly by the owner’s agents or employees, there can be no doubt that the relationship which the contract purported to set up was that of independent contractor. Even if the right of general supervision can be said to be in defendant, this would not destroy the status of an independent contractor. (Moore v. Wills, Inc., 250 N. Y. 426.)

Following the execution of this contract the services of the deceased, as an employee of the defendant, were terminated, and the temporary labor, of which the defendant was a part, was transferred to a payroll known as the Northeast Payroll,” which was paid from the Northeast bank account.

There is evidence that Central Hudson had conferred upon its superintendent and foreman the right to hire and discharge laborers, although there is no direct evidence that the deceased was so engaged on the day of the accident. On the other hand, there are admissions by Draney, the foreman of the defendant, on cross-examination, that although he was acting foreman of the yard at that time, he had no control over the deceased, and had no power to direct him in his work, and never did hire or discharge the deceased. In any event, whatever power was conferred by the defendant could not affect the right of Northeast to hire, control or discharge its employees, and there is no evidence that Northeast ever relinquished this power. Immediately following the accident practically all the laborers signed statements that they were employees of Northeast. At the trial, however, they testified that they did not know that they were working for Northeast. Moreover, the defendant did not notify the Labor Department of the State of New York of the death of the deceased as one of its employees, until sixteen months after the death and after the answer of the defendant had been amended, whereas Northeast did file such a notice with the Department of Labor immediately following the death. Defendant also reported to the Public Service Commission the death of the deceased and certified that he was employed by Northeast under contract work for the defendant. The defendant did not pay premimns for workmen’s compensation insurance on these labormen, but Northeast did. In its original answer defendant admitted that the deceased was not in its employ, but in the employ of Northeast, but sixteen months later amended its answer claiming deceased was its employee.

A general employee of one employer does not become the special employee of another unless the former surrenders and the latter assumes the power to command the employee as to the details as well as the ultimate result of his work. (Ramsey v. N. Y. Central R. R. Co., 269 N. Y. 219.) “ ‘ The rule now is that as long as the employee is furthering the business of bis general employer by the service rendered to another, there will be no inference of a new relation unless command has been surrendered, and no inference of its surrender from the mere fact of its decision.’ (Charles v. Barrett, 233 N. Y. 127, 129.) In the absence of proof that the general employer has surrendered control completely, it must be presumed that his control continued. (Bartolomeo v. Bennett Contracting Co., 245 N. Y. 66.) ” (Irwin v. Klein, 271 N. Y. 477, 484.)

Upon the facts above related, it cannot be said that there is conclusive evidence that the general employer had surrendered control completely and that Central Hudson had assumed such control. Although the jury found that the defendant had the right to direct and control the deceased, the sense in which these words were used is shown as not amounting to a finding of special employment by defendant because of the simultaneous finding by the jury that defendant did not have a right to discharge the deceased, and that he was not in the employ of defendant, and also by the verdict rendered in behalf of the plaintiff. At the risk of repetition we note that the finding of the Appellate Division that the deceased was an employee of the defendant is diametrically opposed to the recorded intention of each and every party to the employment. Moreover, the defendant had the deceased formally resign from its service so that he could enter the service and employment of Northeast. Defendant thus went to formal lengths to show its purpose and intent not to have the deceased in its employ. This was sufficient to raise a question of fact for the jury to determine whether the deceased had become a special employee of the defendant at the time of the accident. When a party, with meticulous care, enters into a contract which purports to establish a relationship which enables it to escape the burden of paying increased workmen’s compensation premiums based upon its actual operations, it does not he in the mouth of that party to claim that what it did was not intended to and did not set up the relationship and thus escape the disadvantageous consequences of its actions. (Cf. Svenska T. F. Aktiebolaget v. Bankers Trust Co., 268 N. Y. 73, 81; Shuba v. Greendonner, 271 N. Y. 189.) Contracts must be some evidence of the intentions of the parties thereto, and a party, by claiming that the contract was sham or intended to work a fraud, cannot completely destroy its evidential value. In reaching this conclusion it is perhaps supererogatory to say that we do not hold that in actions involving third parties or public authorities the defendant could set up our holding as showing conclusively that Northeast was an independent contractor. (See Murray v. Union Ry. Co., 229 N. Y. 110, 113.) There, too, as in the case at bar, the question would be one of fact for the jury. Each case must be determined within the applicable rules of law upon the evidence adduced. In the case at bar there was a question of fact to be determined by the jury, and, therefore, the judgment dismissing the complaint must be reversed and a new trial granted. It thus becomes unnecessary to consider the cross-appeal.

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.

Crane, Ch. J., Lehman, O’Brien, Hubbs, Loughran and Rippey, JJ., concur.

Judgments reversed, etc.