author: Lehman, J.

text:
    In the Matter of the Application of The City of New York, Respondent, Relative to Acquiring Title to Lands for the Purpose of Establishing a Public Beach in the Borough of Queens. Neponsit Property Owners’ Association, Inc., Appellant.

      (Argued October 3, 1935;
    decided November 19, 1935.)

      Ralph S. Hein, Alex M. Burnham and Bertram Sommer for appellant.
    The damage parcel is not burdened by easements in favor of the city. (Nichols Copper Co. v.
      Connelly, 208 App. Div. 667; Matter of Starr Street, 73 Misc. Rep. 380; Matter of City of New York [East 177th St.], 239 N. Y. 119; Johnson v. City of Niagara Falls, 230 N. Y. 77; Matter of City of New York [Roosevelt Ave], 186 App. Div. 457; Smith v. Smythe, 197 N. Y. 457; People v. Underhill, 144 N. Y. 316; Matter of City of New York [Saratoga Ave], 226 N. Y. 128; White v. Moore, 161 App. Div. 400; Russell v. Church, 118 Misc. Rep. 473.) Ownership of the damage parcel and of the abutting and contiguous lots being in appellant and its members, the award to it must be substantial and not nominal. (Matter of City of New York [Northern Blvd], 258 N. Y. 136; Matter of Rapid Transit R. R. Commrs., 197 N. Y. 81; Matter of City of New York [Roosevelt Ave], 186 App. Div. 457; Matter of City of New York [Sedgwick Ave], 213 N. Y. 438; Mayne v. Nassau Electric R. Co., 151 App. Div. 75; 210 N. Y. 607.) Very substantial damage having been sustained by appellant and its members, an award adequate to compensate them therefor should have been made. (Matter of Simmons, 130 App. Div. 350; 195 N. Y. 573; Matter of Niagara, Lockport & Ontario Power Co., 133 Misc. Rep. 177; Matter of City of New York [Main St.], 216 N. Y. 67; Matter of Waterfront in Tompkinsville, 219 App. Div. 382; Matter of City of New York [West 10th St], 267 N. Y. 212; Matter of City of New York, 227 N. Y. 119; Flynn v. N. Y., W. & B. Ry. Co., 218 N. Y. 140; Matter of City of New York, 193 N. Y. 117.)

      Paul Windels, Corporation Counsel (Joseph F. Mulgueen, Jr., Anson Getman and Reuben Levy of counsel), for respondent.
    Appellant’s sole interest in the damage parcel was the naked, barren fee title. A nominal award therefor was wholly proper. (Phillips v. West Rockaway Land Co., 226 N. Y. 507; McKenna v. Brooklyn Union El. R.R. Co., 184 N. Y. 391; Drucker v. Manhattan Ry. Co., 213 N. Y. 543; Matter of City of New York [Northern Blvd], 258 N. Y. 136; Matter of City of New York [Carroll
      St.], 137 App. Div. 39; People ex rel. Poor v. Wells, 139 App. Div. 83; 200 N, Y. 518; Matter of City of New York [West 10th St.], 267 N. Y. 212; McGovern v. City of New York, 229 U. S. 363; United States v. Chandler-Dunbar Co., 229 U. S. 59; Boston Chamber of Commerce v. Boston, 217 U. S. 189; Matter of Adams, 141 N. Y. 207; Roberts v. City of New York, 295 U. S. 264.) The value of the fee title of the parcel is purely nominal whether it be affected by public easements or burdened as in this matter with private easements. The result can be a nominal award only. (Matter of City of New York [Harrison Ave.], 267 N. Y. 64; Matter of City of New York [Northern Blvd.], 258 N. Y. 136; Matter of City of New York [Decatur St.], 196 N. Y. 286; Matter of City of New York [Johnson Ave.], 135 App. Div. 630; 198 N. Y. 505.)
   Lehman, J.

The city of New York has brought condemnation proceedings to acquire land for the purpose of establishing a public beach or park in the borough of Queens. Damage Parcel No. 2, as shown on the condemnation map, is a strip of land along the water front. Until the city took that parcel, title was vested in Neponsit Property Owners’ Association, Inc. An award of six cents damages was awarded to “ unknown owners ” for the taking of this parcel. The appellant has appealed from that award. The problem presented upon this appeal is novel.

The appellant has established that it was the record owner of the fee of the property. It acquired title by deed from Neponsit Realty Company dated January 13, 1920, and recorded on May 10,1920. That deed conveys to the appellant “All that certain plot, piece or parcel of land, situate, lying and being at Neponsit Beach, West Rockaway in the Borough of Queens, City of New York, County of Queens and State of New York, and known and designated as ‘ Ocean Park ’ on a certain map entitled * Section 1, Map of Neponsit Beach, West Rockaway, property of Neponsit Realty Company in the 5th Ward, Borough of Queens, New York City, surveyed January, 1910, by John Middleton, filed the Twenty-third day of January, 1911, as Map 293/

Subject however to an easement or right of way in favor of all owners of all lots on said map to use and enjoy the said beach designated as 1 Ocean Park ’ on said map and to pass and re-pass thereon and thereover, and to make use of such beach for bathing and other recreations and sports but not for commercial uses and purposes.”

The land shown on the map, referred to in the deed, is subdivided into thirty-four blocks comprising over 1,600 lots intersected by streets. The portion of the map designated “ Ocean Park” and conveyed by the deed to this appellant, is Damage Parcel No. 2. The entire tract owned by Neponsit Realty Company and shown on the map was developed by it as a restricted residential area. It conveyed separate lots shown on the map and each deed contained covenants by the grantee and granted easements in favor of the grantee. The easements so granted are the right in common with all owners of all other lots on said map to use and enjoy the said beach designated as Ocean Park ’ on said map and to pass and re-pass thereon and thereover, and to make use of such beach for bathing and other recreations and sports but not for commercial uses and purposes.

Together with the right of access over the surface of the street, only the ownership of which is hereby not conveyed, and all franchise rights in the streets and avenues shown on said map are hereby reserved to the party of the first part.”

It is not disputed that the value of the damage parcel, if unincumbered by any easement, would be great. At the time of the taking it was incumbered by easements or servitudes attached to several hundred dominant tenements. To that extent, ownership of the fee and right of enjoyment are divided. The city takes the land free from any easements therein. It must pay compensation for what it takes. It must compensate each owner of a dominant tenement for the value of the easement extinguished. Ordinarily that value would be represented by the difference between the value of the dominant tenement before and after the taking. (Matter of City of New York [West 10th St.], 267 N. Y. 212.) It must also compensate the owner of the fee for the value of the fee burdened, as it then was, by servitudes or easements. The sum of those values may at times approximate the value of the unincumbered fee. It may be much less. Indeed, the sum of these values may be only nominal. That is true when the city condemns, for a public street, land which has been used as a private street in which the abutting owners have easements of light, air and access, and the owner of the fee is not, also, the owner of abutting property. In such case the ownership of the incumbered fee has no substantial value. It cannot be used for any purpose which will bring to the owner either profit or enjoyment. It is a burden rather than a benefit, and its taking relieves the owner of the burden. (Matter of City of New York [Northern Boulevard], 258 N. Y. 135, and cases there cited.) Nor are the owners of the abutting property substantially damaged, in such case, by the extinguishment of their private easement in the private street, for they acquire, at the same moment, a public easement in a public street that in every regard and to full degree replaced what the city had taken.” (Matter of City of New York [Decatur St.], 196 N. Y. 286, 290.) In any event, be the damages large or small, which are caused to owners of easements and to the owner of the fee by the taking of the land, the value which must be paid is the value of what is taken, in its condition at that time, not the value which it would have, if it were held as an unincumbered whole. (Matter of City of New York [West 10th St.], supra; Boston Chamber of Commerce v. City of Boston, 217 U. S. 189.)

The rule that land taken must be valued in the condition in which it is at the time of the taking must be applied here. The damage to the owner of the fee is the value of the land subject to existing incumbrances; the damage to owners of easements in the land is the value of what they lose by its taking. Only the owner of the fee has made any claim for damages here, and we consider, primarily, the damages which the owner of the fee has suffered. We disregard as immaterial the fact that the award of nominal damages was made to unknown owners ” though the appellant proved conclusively its title to the fee and its right to an award of some damages, even though such damages might only be nominal. The appellant makes no claim that it is substantially aggrieved by the form of the award, unless it is entitled to substantial damage.

If the incumbrances upon the fee do not exclude a beneficial use of the fee by its owner, then the owner of the fee is entitled to more than nominal damages. Even the ownership of the fee of land, dedicated as a public street, has beneficial value, where the fee owner also owns adjoining property; for ownership of the fee gives him the right to defend against and to enjoin a use of, or an encroachment upon the street, under legislative or municipal authority, for purposes inconsistent with those uses to which streets should be, or have been ordinarily subjected ” and which might damage the adjoining property. (City of Buffalo v. Pratt, 131 N. Y. 293, 299; Matter of City of New York [Decatur St.], supra.) The ultimate question in each case is not whether the land taken is burdened by servitude, but rather the value of the land for any use consistent with the burden upon it. Here the land was burdened by the right of each owner of a lot shown on the map in common with all owners of all other lots,” to use and enjoy the beach for passage, bathing and other recreation and sports, but not for commercial uses or purposes. If the owner of the fee could license or invite others to use it in the same way, then it is plain that the ownership of the fee would have a very substantial value. We construe the language of the easement differently. By the grant of a right “ in common with all other owners,” the intent to create a private beach for the enjoyment of the lot owners only, from which the rest of the world would be excluded, seems clear. (Cf. People ex rel. Poor v. Wells, 139 App. Div. 83; affd., 200 N. Y. 518.)

Under that construction, even if the value of the bare fee might be nominal, the value of the right of the lot owners would certainly be substantial. Easements of light, air and access in a public street may in every regard and to full degree ” replace a similar easement in a private street; but a right to use a beach or park in common with a limited group of neighbors is obviously not replaced in every regard and to full degree ” by a right in common with all other members of the public to enjoy a public beach or park. Argument then that the nominal damages awarded constitute sufficient compensation for the taking of the beach, is, on its face, unsound.

The city does not, on this appeal, rely on that argument. It urges that the question of whether the right granted to owners of lots to use the beach has value is academic, in this proceeding, since none of these owners have made any claim here, and that the only question before us is whether the appellant is entitled to substantial damage for the taking of land which is so incumbered by easements that it cannot be put to any beneficial use by the owner of the fee. The city assumes that the appellant in this case is only the owner of the bare fee and that ownership of the fee and right of beneficial use and enjoyment have been completely severed.

In truth that separation is in some aspects, at least, formal rather than actual. In the conveyance of each lot shown on its map, the Neponsit Realty Company provided that the property so conveyed shall be subject to an annual charge in such an amount as will be affixed by the party of the first part [the grantor], its successors or assigns, not, however, exceeding in any year the sum of $4.00 per lot, 20 x 100 feet. The assignee of the party of the first part may include a property owners7 association which may hereafter be organized for the purposes referred to in this paragraph and in case such an organization is organized, the sums in this paragraph provided for, shall be payable to such association.77 The appellant Neponsit Property Owners7 Association was organized for the purposes referred to in these deeds.

Its certificate of incorporation states that “ the objects for which said corporation is to be formed are as follows: to preserve the settlement known as Neponsit on Rockaway Beach, in the County of Queens, City and State of New York, as a highly restricted, well kept and properly maintained suburban home community; to take all reasonable and lawful means for the improvement and betterment of said Neponsit; to take all necessary and lawful means of maintaining and enforcing the restrictions upon said property; to acquire title to and hold such portions of said property, including the beach front, as may be granted to it by deed or otherwise, for the benefit of all property holders in said Neponsit, and to make such use of such property so acquired by it as shall be for the best interests of the property holders at said . Neponsit; to acquire such property, property rights and claims as may be transferred and assigned to it by the Neponsit Realty Company, Inc., or otherwise.77

Its by-laws provide that “ all record holders of lots at Neponsit, Rockaway Beach, City and State of New York, are by that fact, members of this association.77 Perhaps, as the city urges, no record holder of a lot would become a member without his consent. Whether he consented or not, each grantee of a lot was by covenant charged with the obligation to pay an annual sum for the upkeep of the beach, and it appears that there were no other membership charges; and each lot owner was entitled to all the benefits of membership. Indeed, it appears without dispute that in accordance with the by-laws each lot owner was considered as a member of the organization and accorded all the rights of a member. In effect, therefore, the appellant membership corporation is a device used by the owners of the dominant tenements to hold, and jointly manage and control, the fee in which they have a common right of enjoyment.

It may be difficult, or even impossible, to classify into recognized categories the nature of the interest of the membership corporation and its members in the land. The corporate entity cannot be disregarded, nor can the separate interests of the members of the corporation. The easements still remain appurtenant to the separate dominant tenements, though title to the fee is vested in a membership corporation controlled by the owners of the dominant tenements. The fee held by the corporation is still burdened by these easements, and cannot be transferred or used except subject to such easements. Even if the title of the land, in the corporation, be treated as held in trust for its members, the corporation cannot be regarded, in true sense, as a trustee of the easements which burden the land, for they are inseparable from the tenement to which they are appurtenant, and have never been conveyed to the appellant. None the less, the membership corporation does hold the land for the use of those who are accorded membership rights, under its by-laws. It was formed for their benefit, and when it uses the land for their benefit it carries out the purpose for which it was organized. Others may not share in its use. That is true of property held by other membership organizations, like clubs, which are formed for the benefit of a restricted group. So long as the title remains in the appellant, and the appellant continues to use the land in the manner it has heretofore used it, those who own the dominant tenements enjoy under the appellant’s by-laws the same rights which they might claim under their easements, and the easements have little or no value. They serve only to restrict the power of the membership corporation to alter its use of the land or to withdraw membership rights from any of those who now enjoy them. They do not interfere with the use to which the appellant has heretofore put the land.

Classification of property rights into definite categories do not affect the value of the rights. Practical considerations alone determine that. Can the property rights be sold or used by the owner either for profit or for the gratification of some need or desire, for which ordinarily men will expend money and which may be measured, even though inaccurately, in terms of money? Here the land taken could be used as a private beach by several hundred owners of land. The appellant used it for their benefit. The appellant could not make any profit by that use, but its purpose was not to make a profit but to benefit those persons who had the right to use the land as a bathing beach. If it had been free to exclude the property owners or include strangers in the benefit of such use, the land would unquestionably have had a real value to the appellant. It could not do so, because easements upon the land restricted its use to a definite group. The problem is whether a user, so restricted, has any value.

As we have said, no owner of a dominant tenement, enjoying rights to use the land, has made any claim here for compensation for destruction of an easement upon the land; and since all owners of dominant tenements enjoyed, irrevocably, membership rights, accorded by the appellant, coextensive with their easements upon the land taken, the easements, for practical purposes, had become merged in the membership rights. Indeed, the deeds which granted the easement rights contemplated that the fee of the servient land might be transferred thereafter to a property owners’ organization, and that, in that way, those owning a right in common to use the land for a beach might also control in common the title to the land, subject only to their common right of enjoyment. When such an organization was formed, the property owners were expected to, and have looked to that organization as the medium through which enjoyment of their common right might be preserved equally for all. In such circumstances, the ownership of the fee and the right of beneficial enjoyment are not completely severed. For all practical purposes, both have become vested in the membership corporation formed by owners of dominant tenements for the purposes of taking title for their benefit. The damage to the corporation by the taking of the land is the value of the use of that land by the corporation for the benefit of those accorded membership rights therein. When the corporation is paid compensation for the damage sustained, the damages must be divided among those accorded membership rights in proportion to the size of their property, and the annual charges imposed upon the property by the grants through which the property was transferred. Since the easement rights have become, for practical purposes, merged in the membership rights in the corporation the owners of the dominant tenements are damaged primarily through the destruction of their membership rights and are not entitled to substantial damages for the destruction of any unsubstantial residual rights which might remain to them under their easements. Their situation is the same as if they had jointly taken title to the fee of land in which they had a common right of enjoyment.

The problem would be, of course, different if the nature of the easement rights or of the membership rights were different. An easement appurtenant, such as an easement of light, air and access in a street, may be so closely connected with the dominant tenement that it cannot be separated from the use of the dominant tenement, or enjoyed except through such use. Then, perhaps, the right of enjoyment of such use cannot, because of its nature, become merged in membership rights in a corporation. The situation is different here where the easement in the beach, though made appurtenant to several hundred parcels of land, is appurtenant to the land only in the sense that right of enjoyment is an incident of ownership of an estate in the dominant tenement. Otherwise the enjoyment of the easement has no connection with the use of the dominant tenement. The easement does not add to the value of the dominant tenement except in the sense that a purchaser acquiring the tenement would at the same time acquire a right of personal enjoyment of a private bathing beach.

It may be difficult to fix the value of the appellant’s right to use the land for a private bathing beach for those accorded membership rights. Similar difficulty exists in other cases in fixing the value of land where use is restricted. Such land cannot be bought or sold in the open market. It could be purchased only by a restricted property owner’s group or association like the appellant. Nevertheless, it is plain that such a group would ordinarily be willing to pay a substantial sum for a beach for the enjoyment of its members even though it could not admit others to its use, and it is damaged in proportion when land which it holds is taken. Estimates may vary as to such damage. There may be a wide field for the exercise of judgment by the trier of the fact; but there can be no doubt that what is taken has substantial value and that for the taking substantial compensation must be made.

The orders should be reversed, with costs, and a new hearing granted.

Crane, Ch. J., O’Brien, Hubbs, Crouch, Loughran and Finch, JJ., concur.

Orders reversed, etc.


source: Caselaw Access Project

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

license: Public Domain

text:
    The People of the State of New York, Appellant, v. Tompkins-Kiel Marble Company, Respondent, Impleaded with Others.

      (Argued October 4, 1935;
    decided November 19, 1935.)

      John J. Bennett, Jr., Attorney-General (L. Hamilton Rainey, Henry Epstein, Hugh Reilly and Warren H. Gil-man of counsel), for appellant.

      Raymond T. Heilpern and Otto C. Sommerich for respondent.
    Since the issuance of the letters patent to the first patentee vested in him legal title to the lands under water affected thereby, subject only to the condition that a dock be erected thereon within five years the grant was not abandoned by reason of the alleged failure to comply with the condition. (Matter of City of New York [ Upper N. Y. Bay], 246 N. Y. 1; New York Foundation v. People, 259 N. Y. 54; Matter of Benedict v. Lunn, 244 N. Y. 373.) Since the sole condition contained in the grant to the first patentee was that he fill in the lands and erect a dock thereon within five years from the date of the grant, the breach, if any, occurred on October 18, 1859, and this suit having been started more than seventy years subsequent to the date of the alleged breach, is barred by section 31 of the Civil Practice Act. (Matter of City of New York [Upper N. Y. Bay], 246 N. Y. 1; Nicoll v, N. Y. & E. R. R. Co., 12 N. Y. 121; People v. Clarke, 9 N. Y. 349; People v. New York Transit & T. Co., 118 Misc, Rep. 686; 206 App. Div. 711.)
   Lehman, J.

The Commissioners of the Land Office, by letters patent dated October 18, 1854, granted to George Brooks for the purpose of promoting the Commerce of our State, and for no other object or purpose whatsoever, * * * the power and authority to erect any dock or docks * * * upon the land under water ” described in the deed. By the same deed they also granted to George Brooks, his heirs and assigns, the land under water, excepting and reserving to the People of the State “ the full and free right, liberty and privilege of entering upon and using all and every part of the above described premises, in as ample a manner as they might have done had this power and authority not been given, until the same shall have been actually appropriated and applied to the purposes of Commerce, by erecting a Dock, or Docks thereon.” The deed further provided that “ if the said George Brooks his assigns shall not within Five years from the date hereof actually appropriate and apply the above described premises to the purposes of Commerce, by erecting a Dock or Docks thereon and filling in the same, then these Presents and everything herein contained shall cease, determine and become void.”

George Brooks was the owner of the uplands adjacent to the land under water. Without exercising his power or authority to erect a dock or docks, he conveyed the uplands, and, through mesne conveyances, title to the uplands was transferred to John Good in 1886. No deed in Good’s chain of title specifically included the land under water appurtenant to the adjacent upland. John Good applied to the Commissioners of the Land Office for a new grant of the land under water adjacent to his uplands. The application was granted, and in February, 1887, he received a grant of the same land under water, which was described in the grant of 1854 to his predecessor in title, except that it extended for a lesser distance under the sea. That grant, too, was made subject to the same exceptions, reservations and conditions as the earlier grant.

In 1932 the State began this action, asking that the letters patent of 1854 and of 1887 be declared null and void, and that the defendants be barred and foreclosed of all right, title and interest in any part of the premises through or under the said letters patent. In the complaint the plaintiff, as a first cause of action, alleges that the grantee under the letters patent of 1854 failed to improve the lands under water, and abandoned his grant and all his right, title and interest in the land described in the grant. As a second cause of action, the plaintiffs allege that the grantee under the letters patent of 1887 failed and neglected to perform the conditions upon which that grant was made. Upon motion of the defendants the first cause of action has been dismissed.

When Good applied for, received and accepted, from the State, a grant of the land under water in front of his upland, he did not know that this court, in 1899, would decide that title to land under water is appurtenant to title in the adjacent uplands, and passes by a conveyance of the uplands without specific description (Archibald v. N. Y. C. & H. R. R. R. Co., 157 N. Y. 574); nor did he know that in 1927 this court would decide that a grant of land under water conveyed an unrestricted title in fee, subject only to a right in the State to vacate the grant by direct action or proceeding brought for that purpose. (Matter of City of New York [Upper N. Y. Bay], 246 N. Y. 1; New York Foundation v. People, 259 N. Y. 54.) Perhaps without such prescience, he may have believed that a deed to the uplands did not convey to him a fee title to the adjacent land under water which could be defeated only by direct action or proceeding brought by the State. Whether at that time he was mistaken as to his rights in the land under water is unimportant now; for this, at least, is clear, that Good asked for and received a grant from the State of an unquestioned right to the land under water, subject only to the condition that the grantee or his heirs or assigns build a dock or docks within five years from the date of the second grant. Except for that grant, any right or title he may then have held could have been terminated for condition broken in 1859, whenever the State might choose to bring appropriate proceedings for that purpose. Because more than seventy years have elapsed since the breach of the condition contained in the first grant, the courts below have held that any cause of action based upon that breach is barred, and that the defendants’ title derived from the grant of 1854 is now immune from attack. Even though we assume that the first grant conveyed an unrestricted fee subject only to defeasance for breach of condition, and that any action to defeat that title is barred by the Statute of Limitations, the question still remains whether the defendants, by accepting the second deed from the State, precluded themselves from asserting title under the first deed.

It is undoubtedly true that a deed by the State of land which it has previously granted to another is a nullity. It does not follow that a grant to one who already has a doubtful or defeasible title through an earlier grant is also a nullity. In such case both grantor and grantee assume that the title is in the grantor; and a grantee may be estopped from denying the grantor’s title so long as he retains any benefit from the new grant. (Cf. Greene v. Couse, 127 N. Y. 386.) Thus, where an owner of real estate, whose title is doubtful, obtains a confirmatory conveyance which is subject to conditions or limitations, he cannot reject the conditions and limitations after he has obtained the desired advantage which flows from the confirmatory conveyance. (People v. Foote, 242 App. Div. 162.) Again, where a grantee obtains a deed of correction, placing limits to the grant which had previously been omitted, the last description is conclusive. (Town of Babylon v. Darling, 207 N. Y. 651.) That is true, “ even if we suppose, in opposition to the usage under our government, that there are technical difficulties in the way of a legal surrender to government of an estate in fee.” (Nicoll v. Trustees of Huntington, 1 Johns. Ch. 166, 183, opinion by Chancellor Kent.) It is only by the interposition of such “ technical difficulties ” that the defendants have succeeded in the courts below.

Good’s title in 1887 was enshrouded in doubt and existed only by the sufferance of the State. Good applied for something he did not then own: an unquestioned right to the land under water, which could not be terminated unless the grantee again failed to comply with the condition of the new grant. Acceptance of a new grant is an admission that title to the property granted is in the grantor. It is inconsistent with an assertion that the grantor had no power to make the grant. Where the parties have acted under mistake, the admission may perhaps not be conclusive at all times, but that is not true where the grantee, who already has a defective, restricted or doubtful title, obtains a new grant which removes defects, restrictions or doubts. That is the reason why the terms of a correctional or confirmatory deed are dominant and conclusive, and the title of the grantee is determined solely by the new grant. That is true where-ever there was intention to fix the rights of the parties by the new grant rather than the old. If the grantee held rights under an old grant different from those included in the new grant, then he must be deemed to have voluntarily abandoned those rights.

There is no suggestion in this case that the parties here intended that after the new grant the grantee might still assert a superior title under the old grant. Both parties agreed, or at least assumed, that title was then in the grantor, and that the grantor had power to make the new grant. That is true in regard to the land under water described in the new grant; it is also true in regard to the strip of land under water not described in that grant, extending further into the sea; for title to land under water for promotion of commerce is inseparable from the shore uplands to which it is adjacent. Perhaps the grantee mistakenly believed that he had no rights under the old deed; perhaps he merely had doubts as to his title. In either event, the grantee desired a title invulnerable, at that time, to attack, and he obtained exactly what he asked for. If the grantee believed he had rights, though doubtful, under the old deed, his intention must have been to surrender or abandon them; if both parties believed that he had no rights, then there was no occasion for surrender or abandonment. It is unnecessary to decide whether technical difficulties stand in the way of a surrender to government of an estate in fee;” the rule is well established that, where a grantee requests and receives from the State a new deed which removes defects, restrictions or doubts as to his title, the rights of the parties are conclusively determined by the last deed. (Nicoli v. Trustees of Huntington, supra; People v. Foote, supra.) The grantee here, in any view of the case, obtained under the second grant immunity from attack by the State until the condition of that grant was broken. His successors in title may not now urge that the attack upon their rights under the first deed comes too late. Acceptance of benefit under the new deed, by operation of law, as well as by intent of the parties, terminated any fee title which the grantee may have had under the first deed.

The orders should be reversed, with costs in all courts, and the motion denied.

Crane, Ch. J.

(concurring). The People of the State of New York have brought this action to obtain a judgment declaring letters patent granted to George Brooks on October 18,1854, null and void; that the letters patent granted to John Good, dated February 9, 1887, be declared null and void; and that the defendants be barred from any title or interest in the lands under water granted by said patents. No answer has been served. On the affidavit of August Kiel, president of the defendant Tompkins-Kiel Marble Company, a motion was made to dismiss the amended complaint on the ground (a) that it does not state facts sufficient to constitute a cause of action; (b) that the alleged cause of action did not accrue within the time limited by law for the commencement of an action thereon. The State submitted the affidavit of the Deputy Assistant Attorney-General setting forth the recorded facts which in turn called for the reply affidavit from Raymond T. Heilpern, attorney for the moving party. The Special Term granted the motion and, from the unanimous affirmance of the dismissal by the Appellate Division, an appeal has been taken to this court by its leave. The amended complaint contained two causes of action, but it is the first cause of action which has thus been summarily disposed of and with which we are to deal. The major facts are not disputed.

The People of the State of New York, on October 18, 1854, granted to George Brooks power and authority to erect docks necessary to promote the commerce of the State upon the land under water adjacent to Long Island, in the town of Newtown, county of Queens, and did also give and grant unto the said George Brooks his heirs and assigns, the land under water, and between high and low water mark, described as follows: * * * And these presents are upon the express condition that if the said George Brooks his assigns shall not within five years from the date hereof actually appropriate and apply the above described premises to the purposes of Commerce, by erecting a Dock or Docks thereon and filling in the same, then these presents and everything herein contained shall cease, determine and become void.”

This grant to Brooks could not be attacked collaterally and no one could enforce the express condition subsequent except the State of New York. As against everybody except the State of New York George Brooks and his assigns held the land under water granted by this patent in fee. (Matter of City of New York [Upper N. Y. Bay], 246 N. Y. 1; New York Foundation v. People, 259 N. Y. 54.) This action against Brooks’ successor in title was not commenced until February 8th of 1932, over seventy-two years after the five-year period to erect docks had expired. This was too late. By section 31 of the Civil Practice Act, the People of the State will not sue a person with respect to real property by reason of the title of the People to the same unless the cause of action accrued within forty years before the action is commenced. The allegation of the amended complaint is that a dock was not built within five years, as stated in the express condition.

The facts, however, carry this case somewhat further. Among the mesne conveyances of the upland adjoining the grant of land under water is one to John Good, dated April 10, 1886. By this conveyance John Good took the upland owned by Brooks and, although the conveyance did not say so, it carried with it title to the land under water, pursuant to our decision in Archibald v. N. Y. C. & H. R. R. R. Co. (157 N. Y. 574). If Brooks had title to land under water by reason of his patent, Good also received it when he obtained ownership of the upland, as the upland and the land under water in front thereof cannot be in two distinct persons when the patent has been obtained for commercial purposes in conjunction with the upland. For some reason not explained this John Good on November 1, 1886, made application to the State of New York for a grant of land under water covering a portion of the land under water theretofore granted by the State to George Brooks. In his application John Good said: “ I will, on the eleventh day of September, 1886, apply to the Commissioners of the Land Office of the State of New York, at Albany, to grant to me, in perpetuity, so much of the lands under the water of the East river or Sound and land between high and low water mark, and extending to the permanent exterior water line established by law adjacent to the land hereinafter described, of which I am the proprietor and owner and actual occupant, as said Commissioners shall deem proper for the purpose of the beneficial enjoyment of same by me.”

The application was granted on February 9, 1887, and covered the entire width of the original Brooks grant, but extended out about half the distance of the Brooks grant from the shore — so it is stated in the affidavits without contradiction, and so it appears from the maps annexed as exhibits. In other words, the Good grant overlapped about half of the Brooks grant. What was the effect of this subsequent grant? As Good, being owner of the upland, was also the owner of any rights in the land under water which Brooks possessed, it was unnecessary for him to make this application for another grant if he knew the facts and understood the circumstances. Title was in him and he could only be divested of it by action of the State brought within forty years from 1859.

The State in its brief has reasoned, and perhaps with some force, that Brooks had abandoned his grant • — • whatever this may mean — or that possibly some question had arisen about Brooks’ title to land under water under his patent when he had not complied with the conditions. It may be that in 1886 the law of land patents was not as clearly miderstood as now. In Thousand Island Steamboat Co. v. Visger (179 N. Y. 206, at p. 213) we have a case where the grantee of a patent was seeking rights or privileges under a subsequent grant. This court said: “ Crossmon appears not to have made improvements, within the time specified in the grant of 1883, and, therefore, applied for the subsequent grant; but as the State authorities had not taken action to vacate the prior grant, it was binding upon the grantee. If the State had not resumed its title by annulment of its grant, the title remained in Crossmon, subject to the terms imposed.” (Citing the Archibald case, above referred to.)

The general rule appears to be stated in Townsend v. Trustees of Brookhaven (97 App. Div. 316, 330). The grant [subsequent grant], so far as it overlapped the Smith-town grant, if it did, was void, under the rule that the king cannot grant the same thing in possession to one which he or his progenitors have granted to another.” This rule of course would not apply to a subsequent grant which was in the nature of a deed of correction, placing limits to the grant which previously had been omitted. Such was Town of Babylon v. Darling (207 N. Y. 651). The Appellate Division of the Second Department, in People v. Foote (242 App. Div. 162, 168), have noted the Town of Babylon case as an authority for this statement of the law: “ When a patentee applies for a confirmatory patent, his title thereafter depends wholly upon the terms of the confirmatory patent, even though his confirmatory grant is less in extent than that which he formerly claimed to possess under a prior grant.” This statement may be accurate if it is confined to a confirmatory patent, one which makes certain that which before was uncertain, but if it goes further than this I do not find it supported by the authorities. There is nothing in this record to show that Good applied for a confirmatory patent. Just as likely as not there was a misunderstanding in 1886 regarding the law and Good applied for a grant of land under water, not realizing that he had it all the time.

As before stated, Brooks in 1854 acquired bis grant of land under water covering all and more than Good got in 1887. Although Brooks in his conveyance and the subsequent mesne conveyances into Good did not refer to this grant of land under water, it passed with the title to the upland. To again refer to the Archibald Case (157 N. Y. at p. 579), it is there stated: “ Moreover, when land under water has been conveyed by the state to the owner of the adjacent uplands, the lands under water so conveyed become appurtenant to the uplands, and will pass by a conveyance of the latter without specific description.” As the State took no action up to 1887, and the Brooks grant had passed to Good, there was no necessity or occasion for this new or additional grant, or his application therefor so far as appears of record.

The State goes much further, however, and asks that the grant to Good in 1887 be declared null and void for failure to comply with the conditions therein contained. Good was to build docks within five years, which would bring the period up to February 9, 1892. Forty years from that time would be February 9, 1932, and this action seems to have been brought on February 8, 1932, or one day before the expiration of the forty-year Statute of Limitations. As to Good, there may be a question of fact which should be tried out. The State says the grant and conditions have not been complied with. In a reply affidavit of Mr. Heilpern he denies this charge and says: “That the lands affected by the grant have been filled in; that a dock has been erected thereon, and that the lands are being used for the purpose of commerce, as such purpose has been defined by the Cotut of Appeals.”

I have reviewed the facts as they appear in affidavits on this motion for dismissal of the complaint on the allegations contained therein. One of the allegations is contained in paragraph 12 as follows: “ That the grantee named in said grant [meaning Brooks] completely abandoned said grant and all his right, title and interest in the lands under water described in said grant.”

In view of the fact that none of the deeds conveying the upland mentioned this Brooks grant of land under water or any rights therein; and the fact that some reason not stated moved Good to apply for another grant, we think that this allegation of the complaint should not be taken as a mere conclusion of law but rather as a statement of fact. A complaint is not to state evidence, and it may be that the State upon a trial will have additional facts or circumstances bearing upon the failure of Brooks to improve the land under water for commerce, and the reason why Good applied for a new grant.

In other words, these matters affecting State rights and the title of the People to the land under water should not be summarily disposed of upon motion. Rather, there should be an opportunity afforded for a full hearing. We have referred to the cases wherein the effect of a subsequent grant was in question, but we do not at this time intend to express our opinion upon the effect of this subsequent grant to Good. We prefer to have all the facts as they may appear after a trial. In view, therefore, of the allegations of this complaint, the statements made in the affidavits and the situation as presented in the record of the title, we are of the opinion that the motion should not have been granted dismissing the complaint, and that the defendants should be compelled to answer, presenting such issues as they have.

O’Brien, Crouch and Finch, JJ., concur with Lehman, J.; Crane, Ch. J., concurs in result only in opinion in which HuBbS and Loughran, JJ., concur. Orders reversed etc.


author: O’Brien, J.

text:
    Godfrey Abrams, Respondent, v. Great American Insurance Company, New York, Appellant.
    (Argued October 17, 1935;
    decided November 19, 1935.)

      Alonzo L. Tyler and Forrest E, Single for appellant.
    Plaintiff’s own evidence shows affirmatively, and without room for contrary inference, that he “ entrusted ” the jewels to another. (Rosenthal v. American Bonding Co., 207 N. Y. 162; Marcus v. U. S. Casualty Co., 249 N. Y. 21; Hewit Pharmacies, Inc., v. Ætna Life Ins. Co., 148 Misc. Rep. 663; 241 App. Div, 781; Imperial Fire Ins. Co. v. Coos County, 151 U. S. 452; Nelkin v. Provident Loan Society, 265 N, Y. 393; Lake v. Simmons, [1927] A. C. 487; Genesee Wesleyan Seminary v. United States F. & G. Co., 247 N. Y. 52; Zink v. People, 77 N. Y. 114; People v. Meadows, 199 N. Y. 1; Wilson v. People, 39 N. Y. 459; Weyman v. People, 4 Hun, 511; 62 N. Y. 623; People v. Ehrlich, 190 App. ‘ Div, 302; Van Vechten v. American Eagle Fire Ins. Co., 239 N. Y. 303; Siegel v. Union Assurance Society, 90 Misc. Rep. 550.)

      Charles H. Tuttle, Milton W. Levy, Henry Gerson and Edward J. Gould for respondent.
    The plaintiff’s loss is expressly covered by the terms of the policy and does not fall within the exceptions. (Schumacher v. Great Eastern, 197 N. Y. 58; Hennessey v. Knights of Columbus, 239 App, Div. 409; Lake v. Simmons, [1927] A. C. 487; People v. Miller, 169 N. Y, 339.)
   O’Brien, J.

Defendant issued to plaintiff a jewelers’ block policy which covers loss “ arising from any cause whatsoever except * * * (a) Loss or damage or expenses by or resulting from theft, conversion or other act or omission of a dishonest character * * * on the part of * * * any person to whom the property hereby insured may be entrusted by whomsoever for any purpose whatsoever * *

Through trick and device, by means of false representations and with intent to steal, Rose Friedman induced plaintiff to deliver to her two articles of jewelry valued at more than $15,000 for the purpose, intended by him and professed by her, of effecting a sale by her to one whom she pretended was a prospective customer. She had previously established her credit with plaintiff and, unsuspecting, he relied upon her supposed integrity. After securing possession of the jewelry, which plaintiff in a spirit of confidence delivered to her, she absconded with the proceeds of her crime to France whence she. was extradited and upon indictment pleaded guilty to grand larceny. This crime had its inception in the mind of the criminal prior to her receipt of the stolen goods but it was not consummated until she had secured possession through delivery by plaintiff to her. Intent alone is not sufficient, possession must also be obtained. (Penal Law, § 1290; People v. Miller, 169 N. Y. 339; People v. Fitz-Gerald, 195 N. Y. 153.)

If plaintiff entrusted the jewelry to Rose Friedman, the transaction falls within the exception, and the loss arising from the larceny or theft ” or “ act of a dishonest character ” by the person to whom the property was “ entrusted ” is not covered by the policy. The language employed in the contract of insurance must be given its ordinary meaning, such as the average policyholder of ordinary intelligence, as well as the insurer, would attach to it. Such common words in the policy as theft,” dishonest ” and entrusted ” cannot be deemed to have been used as words of art with legalistic implications. The exception in the policy does not include such phrases as “ common law or statutory larceny ” but the plain word theft.” When the word entrusted ” appears in the contract the parties must be deemed to have entertained the idea of a surrender or delivery or transfer of possession with confidence that the property would be used for the purpose intended by the owner and as stated by the recipient. The controlling element is the design of the owner rather than the motive of the one who obtained possession. Because plaintiff was deceived and his confidence was abused, he entrusted his property to a thief. The meaning of the word as used in this contract is such as common thought and common speech would now imagine and describe it.” (Van Vechten v. American E. F. Ins. Co., 239 N. Y. 303, 307.) Our view of the case places us in agreement with the decision in Lake v. Simmons, decided by the Court of Appeal ([1926] 2 K. B. 51), rather than the opposite decision by the House of Lords in the same case ([1927] A. C. 487).

The judgment of the Appellate Division and that of the Trial Term should be reversed and the complaint dismissed, with costs in all courts.

Crane, Ch. J., Lehman, Hubbs, Loughran and Finch, JJ., concur; Crouch, J., not sitting.

Judgments reversed, etc.


author: Hubbs, J. Crane, Ch. J.

text:
    In the Matter of the Claim of Edward Heaney, Respondent, against P. J. Carlin Construction Company et al., Appellants. State Industrial Board, Respondent.

      (Argued October 1, 1935;
    decided November 19, 1935.)

      William B. Davis and E. C. Sherwood for appellants.
    At the time claimant received his injuries he was a passenger on a steam vessel on navigable waters of the United States; his rights are governed solely by the maritime law; the Workmen’s Compensation Law (Cons. Laws, ch. 67) has no application, and the State Industrial Board has no jurisdiction. (The Moses Taylor v. Hammons, 71 U. S. 411; The Normannia, 62 Fed. Rep. 469; The Willamette Valley, 71 Fed. Bep. 712; The Western States, 151 Fed. Rep. 929; Sweeting v. Steamer Western

      States, 210 U. S. 433; The Minnetonka, 146 Fed. Rep. 509; Chicago Transit Co. v. Moore, 259 Fed. Rep. 490; The Arabic, 50 Fed. Rep. [2d] 96; Oceanic Steam Nav. Co. v. Corcoran, 9 Fed. Rep. [2d] 724; Crowell v. Benson, 285 U. S. 22; Southern Pacific Co. v. Jensen, 244 U. S. 205; Knickerbocker Ice Co. v. Stewart, 253 U. S. 149; The Lottawanna, 21 Wall. 558; Chelentis v. Luckenbach, 247 U. S. 372; Spencer Kellogg & Sons v. Hicks, 285 U. S. 502; Matter of Phœnix Co. v. Staten Island Ry. Co., 251 N. Y. 127; Matter of State Treasurer v. Wielandt, 254 N. Y. 609; Panama R. R. Co. v. Johnson, 264 U. S. 375; Leary v. United States, 81 U. S. 607; Reed v. United States, 78 U. S. 591; Great Lakes Dredge & Dock Co. v. Kierejewski, 261 U. S. 479; Robins Dry Dock & Repair Co. v. Dahl, 266 U. S. 449.)

      John J. Bennett, Jr., Attorney-General (Roy Wiedersum and Henry Epstein of counsel), for State Industrial Board, respondent.
    The rights of claimants under the Workmen’s Compensation Law derive, not from tort, but from contract. Unless the contract is maritime, and the Workmen’s Compensation Law, if applied, works material prejudice to the characteristic features of the general martime law, or interferes with the proper harmony and uniformity of that law in its international and interstate relations, there is no Federal, constitutional or statutory inhibition against it. (Matter of Doey v. Howland Co., 224 N. Y. 30; Matter of Zirpola v. Casselman, Inc., 237 N. Y. 367; Southern Pacific Co. v. Jensen, 244 U. S. 205; Grant Smith-Porter Ship Co. v. Rohde, 257 U. S. 469; State Ind. Comm. v. Nordenholt Co., 259 U. S. 263; Washington v. Dawson & Co., 264 U. S. 219; Miller’s Indemnity Underwriters v. Braud, 270 U. S. 59; Knickerbocker Ice Co. v. Stewart, 253 U. S. 149; Alaska Packers Assn. v. Ind. Acc. Commission, 276 U. S. 467; Sultan Railway & Timber Co. v. Dept. of Labor & Industries, 277 U. S. 135; Spencer Kellogg & Sons v. Hicks, 285 U. S. 502; State Industrial Bd. v. Terry & Co., 273 U. S. 639; Madderns v. Fox Film Corp., 205 App. Div. 791; 237 N. Y. 614.)
   Hubbs, J.

Claimant was injured by an explosion on a boat on which he was going to work. It is urged an award of compensation cannot be sustained because the maritime law applies.

In considering this case it is necessary to determine, first, whether it involves a contract matter or a tort matter and, secondly, if a contract matter, whether the contract was maritime in its nature. This is true because of the well-established rule enunciated by the Supreme Court of the United States.

“ The general doctrine that in contract matters admiralty jurisdiction depends upon the nature of the transaction and in tort matters upon the locality, has been so frequently asserted by this court that it must now be treated as settled.” (Grant Smith-Porter Ship Co. v. Rohde, 257 U. S. 469, 476.)

If a tort matter be involved in this proceeding then since the accident occurred upon navigable waters, it would seem that admiralty would have jurisdiction. If it were a proceeding instituted against the shipowner for damages resulting from the explosion of the ship, without doubt a tort matter would be involved. It is not, however, such a proceeding. It is against the employer and is not instituted on the theory that a tort has been committed. As was said in Matter of Doey v. Howland Co. (224 N. Y. 30, 36), an award under the Workmen’s Compensation Law is not made on the theory that a tort has been committed; on the contrary, it is upon the theory that the statute giving the commission power to make an award is read into and becomes a part of the contract. (Matter of Post v. Burger & Gohlke, 216 N. Y. 544.) The contract of employment, by virtue of the statute, contains an implied provision that the employer, if the employee be injured, will pay to him a certain sum to compensate for the injuries sustained, or if death results, a certain sum to dependents. These payments are made irrespective of whether or not the employer was guilty of wrong doing. It is a part of the compensation agreed to be paid for sendees rendered in the course of the employment.” (Cf. State Industrial Commission v. Nordenholt Corp., 259 U. S. 263, 271.)

No recovery is sought against the employer in this case because of any wrong alleged to have been done by the employer. A recovery is sought as the result of injuries for which the statute, read into the contract, gives a right to recovery.

If the question of tort be not involved, then we are confronted with the question as to whether the contract of employment is maritime in its nature. The contract of employment was for the services of the claimant in the erection of a building. It was not a contract to do work upon a vessel in navigable waters nor even to do work remotely connected with any undertaking having to do with navigation or commerce. The presence of the claimant upon the boat was a mere incident of the contract of employment, it having been found as a fact that he was on the boat as an employee of the contractor against whom the award has been made.

Even though the part of the contract of employment which brought about his presence on the boat be deemed to make the contract of employment maritime in its nature, the subject remains local in character and the applicability of the State compensation law quite possibly might be upheld in a Federal court under the exception to the general rule as to the applicability of maritime law which permits the application of a State statute where so doing will not work material prejudice to the characteristic features of the general maritime law, nor interfere with the proper harmony and uniformity of that law in its international and interstate .relations.” (259 U. S. 263, 274.)

The discussion of the general rules and exceptions thereto in State Industrial Commission v. Nordenholt Corp. (supra) is most illuminating and it seems to clearly point the way to the proper disposition of this case. The claimant was not a maritime worker. He was not engaged at the time he was injured directly or indirectly in any work having to do with commerce or navigation. While he was injured on a ship in navigable waters, he was not a passenger in the general sense of the word and this proceeding is not instituted on the theory of any contract for carriage between himself and the owner of the ship. Though he paid his fare it may be assumed that his compensation for the work in which he was engaged was so adjusted as indirectly to reimburse him for that expenditure. The contract of carriage was not made primarily for his benefit but under a requirement of the main contract of his employer for the transportation of his employees. By upholding the applicability of the Workmen’s Compensation Law (Cons. Laws, ch. 67) under the facts in this case, no material prejudice can result to the characteristic features of the general maritime law. No effect will be had upon the established rules as to the applicability of maritime jurisdiction to questions arising between passengers and shipowners or maritime workers and the owners of ships or other employers engaged in maritime work. The matter is as much one of local concern as if the employee had been injured while at work on the building on the island. To permit claimant to succeed, it is not necessary to find any wrongdoing on the part of his employer, so that the question of the proper or improper operation of the ship is not involved. It is not necessary to rely upon any provision of the contract of carriage.

In La Casse v. Great Lakes Engineering Works (242 Mich. 454) the court said:

3. If an injury occurs on navigable waters and in the performance of a maritime contract, it is certainly within the exclusive jurisdiction of admiralty unless — ■
(a) the contract is of merely local concern, and (b) its performance has no direct effect upon navigation or commerce, and
(c) the application of the State law would not necessarily work material prejudice to any characteristic feature of the general maritime law, or interfere with the proper harmony or uniformity of that law in its international or interstate relations.’
4. State workmen’s compensation laws, contractual in character, are applicable to maritime service on navigable waters when, and only when, the service is within exceptions (a), (b) and (c) above.
5. If, however, the injury occurs on navigable waters, but in the performance of a non-maritime contract, it is, at least prima facie, local and within the operation of State laws. If there are any exceptions to this rule, they are yet to be developed ” (p. 462).

This court, in Matter of Doey v. Howland Co. (supra, p. 35), a proceeding under the Workmen’s Compensation Law, where an employee of a company was tilled while making repairs to a ship of which it was not the owner, said: Was Doey, at the time of his death, engaged in the performance of a maritime contract * * *. In determining whether a contract be of a maritime nature, locality is not controlling, since the true test is the subject-matter of the contract — the nature and character of the work to be done.”

While the injury to the claimant Heaney occurred on navigable water, he was not at the time engaged in the performance of a maritime contract. He was engaged in the performance of a contract non-maritime in its nature and the recovery sought is u a part of the compensation agreed to be paid for the services rendered in the course of the employment.”

If the action were for wages due under the contract of employment, the Federal court would not have jurisdiction. Jurisdiction is not conferred upon that court because another part of the agreed compensation is sought to be recovered or because there chances to be an independent. contract for passage with a third party or a tort liability on the part of the third party.

With this view of the applicable rule we may consider the cases which might appear to establish a contrary rule.

The first of these is Spencer Kellogg & Sons, Inc., v. Hicks (285 U. S. 502, 512, 514). The workmen, employees of Kellogg & Sons, in the manufacture of linseed oil at Edgewater, New Jersey, lived in New York. In order to ferry them to and from the factory, the company owned and operated the Linseed King, a gasoline launch. Those killed and injured were of three classes, regular employees of Kellogg & Son in the Edgewater plant, men who had applied for work in discharging the cargo of a ship the preceding day but who had been advised to report again on the morning of the accident, and men seeking employment in answer to an advertisement. The court there held the compensation statute of the State of New Jersey inapplicable on the ground that it was incapable of enforcement by the ordinary process of any court and “ is not saved to suitors from the grant of exclusive jurisdiction to the Courts of the United States of all civil cases of admiralty and maritime jurisdiction.” The court said: Kellogg & Sons undertook the interstate carriage of passengers by water on a launch operated by its servants. This was a maritime matter. The ferriage was for the facilitation of the company’s business and for its convenience as well as that of the employees. The injury to the passengers resulted from negligence of the company’s agent in the navigation of the launch. It was a maritime tort. The rights and obligations of the parties depended on and arose out of the maritime law. A proceeding to impose liability for such a tort is a cause in admiralty * *

The court further said: Kellogg & Sons sustained toward employees injured or killed the dual relationship of a carrier by water and a general employer at its Edge-water plant.” •

In that case the employer was the owner of the boat, undertook the interstate carriage of passengers by water on a launch operated by its servants, sustained a dual relationship to its employees of a carrier by water and a general employer, and was guilty of a maritime tort. None of these things are present in the instant case. Here, since the employer was not a carrier of passengers by water, it was not guilty of a maritime tort and the proceeding is not one to impose liability for such a tort ” as the proceeding in the Kellogg case was held to be.

In Knickerbocker Ice Co. v. Stewart (253 U. S. 149) the employee for whose death compensation was asked was employed as a barge man and was doing work of a maritime nature. There the very fact that the employee was employed as a barge man and that it was found that he was doing work of a maritime nature distinguishes that case from the one at bar.

In Southern Pacific Co. v. Jensen (244 U. S. 205) the deceased employee was engaged in driving a small electric freight truck into the steamship El Oriente where it was loaded with cargo, then driving the truck out of the vessel upon a gangway, connecting the vessel with pier 49, North river, and thence upon the pier where the lumber was unloaded from the track. He jammed his head between the lumber and the ship, thereby breaking his neck. Compensation was awarded under the New York State statute. The court said that the work of a stevedore in which the deceased was engaged was maritime in its nature, his employment was a maritime contract and that the injuries which he received were likewise maritime. This statement of the holding of the court makes it evident that the employee there was engaged in maritime work and that the case is not authority for holding claimant in this case not entitled to compensation.

The fact that by section 29 of the Workmen’s Compensation Law the claim of an employee against a third party for tort is assigned to the carrier paying an award or the further fact that the same statute provides for assignment of a cause of action based upon a payment into the State fund in a case where a person is killed through negligence does not bar this proceeding. The right to compensation is not dependent upon the existence of a claim or cause of action against a third party. No liability on the part of the third party is created by the statute. The effect of the statute is not to guarantee collection of damages as a result of the assignment. The assigned cause may be valueless as a result of contributory negligence on the part of the injured employee (Liberty Mutual Ins. Co. v. Colon & Co., 260 N. Y. 305), inability of the assignee to establish negligence on the part of the third person (Liberty Mutual Ins. Co. v. Colon & Co., supra), financial irresponsibility of the third person, or that conduct tortious under the law of the forum where the compensation contract is enforceable is not tortious under the law of the forum where the accident occurred. (Travelers Ins. Co. v. Central R. R. Co., 143 Misc. Rep. 589.)

Why should it be held that the contract right is rendered unenforceable as between the parties thereto for the reason that there exists incapacity on the part of the assignee of the cause of action, based upon the possible tort liability of a third person to maintain an action thereon? To do so would defeat the main purpose of the compensation contract of which the provision for assignment is a mere incident. Regardless of the enforceability of the assigned cause, the employee parts with a valuable right. That it may prove of no value in the hands of the assignee is a matter over which the injured employee has no control.

The order should be affirmed, with costs.

A question under the Federal Constitution was presented and necessarily passed upon by this court. It relates to the exclusive jurisdiction of the Federal courts over admiralty cases. The claimant was injured by the explosion of a passenger steamer on the East river, New York. This court held that the Workmen’s Compensation Law of the State applied, and that the Federal courts had not exclusive jurisdiction to afford relief.

Crane, Ch. J.

(dissenting). In September of 1932 the P. J. Carlin Construction Company, of 405 Madison avenue, New York city, had a contract with the city of .New York for the construction work on Piker’s Island, •State of New York. The island is owned by the city of New York and used for a penal institution — a penitentiary — and the building operations consisted of the erecting and equipping another penitentiary building and a power house. The island was a mile or two from the shore, the municipality running a ferry which was used almost entirely for transporting prisoners. It was necessary for the Carlin Company to provide transportation facilities for its workmen, as its contract contained .this provision: “ Each Contractor shall investigate the existing means of transportation to and from Pikers Island. The City shall not be held responsible for providing regular ferry service. The Contractor must assume responsibility for the transportation from Mainland to island of men and materials for all work done under this contract.”

The Carlin Company made arrangements with one George I. Forsythe, the owner of a steamboat, for this transportation. The steamer was called the Observation and was capable of carrying two hundred and fifty passengers. It was not used exclusively for Carlin’s men. Carlin’s arrangement with Forsythe was embodied in a letter, June 26, 1931, and orally accepted by Captain Forsythe. In part it reads as follows: “You are to operate the Steamer ' Observation,’ which is warranted by you to be officially rated at 250 capacity by local steamboat inspectors, Custom House, N. Y., full crewed, full covered with adequate public liability and workmen’s compensation insurance, upon a schedule furnished to you by our Field Office, and calling for operation five days in the week only, from Monday to Friday inclusive.

“ You are to be compensated therefor by collecting fares from the men at the rate of 10c a round trip. In the event that your fares do not reach the sum of $60.00 upon any given day, we shall reimburse you for the difference. * * *

We understand that your boat is warranted to be in first class condition, with all necessary permits to operate in this service.”

The claimant Edward Heaney, who resided in the city of New York, was one of Carlin’s workmen, and on the 9th day of September, 1932, boarded the steamboat Observation at One Hundred and Thirty-sixth street for the purpose of going to work on Hiker’s Island. While the steamboat was in operation and en route to the island, there was a terrific explosion — it was blown to bits, many passengers losing their lives, and this claimant, with others, being injured.

An award has been made to Heaney under the Workmen’s Compensation Law of this State which has been unanimously affirmed by the Appellate Division, an appeal being allowed by this court. The Commission m.ade this finding: At the time Edward Heaney sustained the accidental injuries herein above referred to, the status of the claimant and the employer herein was a matter of local concern, was subject to the regulation of the State and in no way worked prejudice to any characteristic feature of the1 General Maritime Law.” Although this is stated as a finding of fact it is a conclusion of law drawn from the facts, with which we cannot agree.

That the explosion of a passenger steamer while in operation upon the seas, or, to be more exact, the East river as it opens into Long Island sound, was a maritime matter or maritime tort is self evident. That Heaney would have an action in admiralty against the steamer for any negligence causing the explosion or for any unseaworthiness must be admitted. Such action would also he in admiralty or at common law against the owner. Although most of the cases in the books deal with sailors or workmen on ships, maritime law applies as well to passengers. (1 Benedict on Admiralty [5th ed.], pp. 99, 100; The Moses Taylor, 71 U. S. [4 Wall.] 411; Chicago D. & G. B. Transit Co. v. Moore, 259 Fed. Rep. 490; certiorari denied, 251 U. S. 553.) To determine, therefore, whether the explosion of a passenger steamer at sea is a matter of local concern so that the application of our Workmen’s Compensation Law will not prejudice the characteristic features of the maritime law or its uniformity of application, we must start with this conceded fact: that Heaney was injured in a maritime tort and, if there be negligence, has a cause of action against the ship or the owner in admiralty. In other words, if there be any wrong or any cause of action, admiralty has jurisdiction of it, preserving to the States any common law remedy, which of course does not include the Workmen’s Compensation Law. (Southern Pacific Co. v. Jensen, 244 U. S. 205; Knickerbocker Ice Co. v. Stewart, 253 U. S. 149.)

What is the effect of our Workmen’s Compensation Law upon the remedy in admiralty? By section 29 of our Workmen’s Compensation Law when the employee accepts compensation his cause of action is assigned to the insurance carrier. This is a modification of all rights existing at common law. No tort action could be assigned. But we go further, for the cause of action which passes to the insurance company is prosecuted not on the basis of subrogation solely, but for the benefit of the insurance carrier. (Tracy v. American Mutual Liability Ins. Co., 266 N. Y. 536, decided January 24, 1935; cf. Zurich G. A. & L. Ins. Co. v. Childs Co., 253 N. Y. 324, 329; Travelers Ins. Co. v. Brass Goods Mfg. Co., 239 N. Y. 273.)

A new cause of action is also created by the New York statute which never before existed either at common law or in admiralty. By section 15 it is provided that the insurance carrier shall pay the sum of one thousand dollars into certain special funds in every case in which the person killed through negligence shall have left no person entitled to compensation. For this amount thus paid the insurance carrier is given a cause of action against the negligent third party. We held in Phœnix Ind. Co. v. Staten Island R. T. Ry. Co. (251 N. Y. 127) that the same result followed when the widow or next of kin settled with the third party for more than would have been paid under the Workmen’s Compensation Law. In such a case the insurance carrier may recover from the third party an additional one thousand dollars which he has been obliged to pay into the State treasury.

Admiralty recognizes no such causes of action. They are peculiar to New York State and may vary with the enactments of every State Legislature. True, these provisions are not applicable here for the reason that Heaney is alive, not dead, but we are dealing with the application or the possible application of the Workmen’s Compensation Law to an admiralty tort wherein a passenger on a steamer has been injured or killed. The very nature of the remedy provided by this State legislation shows on its face that it seeks to supplement or add to the admiralty law when a cause of action assigned to an insurance carrier is attempted to be prosecuted in admiralty. In Travelers’ Ins. Co. v. Prince Line, Ltd. (262 Fed. Rep. 841), a District Court decision, Mayer, J., held that admiralty would not recognize the assignability of a tort action, and that our Workmen’s Compensation Law did not apply to admiralty torts. In Knickerbocker Ice Co. v. Stewart (253 U. S. 149) it was held that the provisions of section 9 of the Judiciary Act of 1789 (1 U. S. Stat. 76, 77) granting to the United States District Courts exclusive original cognizance of all civil causes of admiralty and maritime jurisdiction, saving to suitors in all cases the right of a common law remedy, referred to remedies for the enforcement of the Federal maritime law. It conferred no substantive rights and did not authorize the States so to do. Our Workmen’s Compensation Law does confer substantive rights. It gives to the insurance carrier a right to recover full damages when it has only paid out part, and also to recover on an entirely new cause of action for moneys contributed to State funds.

Whether Heaney has a cause of action for negligence in admiralty is beside the point. This all depends upon evidence as to the nature of the explosion. The fact remains that the explosion on this ship at sea was a matter of maritime jurisdiction, the common law remedies being preserved. Heaney has no claim, therefore, under the Workmen’s Compensation Law of the State.

The United States Supreme Court, in Spencer Kellogg & Sons, Inc., v. Hicks (285 U. S. 502), had a case similar in facts and in my judgment exactly the same in principle. In that case the employer chartered the ship and it was held that his workmen, while being transported on navigable waters, should receive an award in admiralty but no award under the State compensation law. Like Heaney here, these employees were passengers. The fact that the employer in that case was the charterer or owner of the boat, became important and was emphasized by reason of an application made by it to limit liability to the value of the boat as permitted under Federal statute. It had nothing to do with shifting or changing the principle that passengers being transported at sea or on navigable waters by a steamer are subject to admiralty jurisdiction. The court said: Kellogg & Sons undertook the interstate carriage of passengers by water on a launch operated by its servants. This was a maritime matter. The ferriage was for the facilitation of the company’s business and for its convenience as well as that of the employees. The injury to the passengers resulted from negligence of the company’s agents in the navigation of the launch. It was a maritime tort. The rights and obligations of the parties depended on and arose out of the maritime law. A proceeding to impose liability for such a tort is a cause in admiralty within the meaning of Article III, Sec. 2 of the Constitution, triable in the United States courts sitting in admiralty” (p. 512).

If the rights and obligations of Heaney and Forsythe, the owner of the Observation which blew up, depend upon and arise out of the maritime law, what becomes of those provisions of our State law which assign Heaney’s cause of action to an insurance carrier and may in a proper case give the insurance carrier a claim against Forsythe for a thousand dollars contribution to a State fund? Heaney’s remedy is solely in admiralty or at common law as our Workmen’s Compensation Law does not apply to this unfortunate occurrence.

The authorities relied upon by the respondents, such as Miller s’ Ind. Underwriters v. Braud (270 U. S. 59); Sultan Ry. & T. Co. v. Dept. of Labor & Industries (277 U. S. 135), and State Industrial Board v. Terry & Tench Co., Inc. (273 U. S. 639 [240 N. Y. 292]), are not applicable as the work out of which the injury grew in those cases was so closely identified with the land that it had very little to do with transportation on navigable waters or with the safety or operation of ships. Admiralty, on the other hand, has always been solicitous of the seaworthiness and proper equipment of passenger craft both in behalf of passenger and seaman.

Since writing the above there has come to my attention the case of Kenward v. The “ Admiral Peoples ” (295 U. S. 649), decided June 3, 1935, by the United States Supreme Court, in which the Chief Justice wrote the opinion. A passenger on a steamboat while disembarking at Portland was injured by falling from a gangplank leading from the vessel to the dock. The vessel was liable, and the question of jurisdiction arose. The Chief Justice said: “ This is one of the border cases involving the close distinctions which from time to time are necessary in applying the principles governing the admiralty jurisdiction. That jurisdiction in cases of tort depends upon the locality of the injury. It does not extend to injuries caused by a vessel to persons or property on the land. Where the cause of action arises upon the land, the state law is applicable ” (citing cases).

“ The basic fact in the instant case is that the gangplank was a part of the vessel. It was a part of the vessel’s equipment which was placed in position to enable its passengers to reach the shore.”

The order of the Appellate Division and that of the Industrial Board should be reversed and the claim dismissed, with costs in all courts.

Crouch, Loughran and Finch, JJ., concur with Hubbs, J.; Crane, Ch. J., dissents in opinion in which O’Brien, J., concurs, and Lehman, J., dissents also. Order affirmed.


author: Loughran, J.

text:
    The Emigrant Industrial Savings Bank, Appellant, v. Virginia M. Van Bokkelen, Respondent, Impleaded with Another.

      (Argued October 2, 1935;
    decided November 19, 1935.)

      William J. Griffin for appellant.
    All the proceedings were had in pursuance of the rules and practice of the court in effect at the time the order confirming the sale was entered. (Bondy v. Aronson, 237 N. Y. Supp. 444; Feiber Realty Corp. v. Abel, 265 N. Y. 94.) Reargument should not be granted after the time to appeal has expired. (Matter of Silliman, 38 Misc. Rep. 226; Klipstein & Co. v. Marchmedt, 39 Misc. Rep. 794.) Reargument is granted only where there has been an oversight, misapprehension or mistake in the former ruling. (Matter of Crane, 81 Hun, 96.)

      John P. Walsh for respondent.
    In view of the inadequacy of the price for which appellant bid in the property, and, in view of the condition reserved in the judgment, the Special Term, as a court of equity, had the inherent power, independently of section 1083-a of the Civil Practice Act, to refuse to allow the entry of a deficiency judgment. (McCarthy v. Graham, 8 Paige, 480; Bank of Rochester v. Emerson, 10 Paige, 115; Dunkley v. Van Buren, 3 Johns. Ch. 330; Equitable Life Ins. Society v. Stevens, 63 N. Y. 341; Rutherfurd Realty Co. v. Cook, 198 N. Y. 29; Withers v. Morrell, 3 Edw. Ch. 560; N. A. Fire Ins. Co. v. Handy, 2 Sandf. Ch. 542; Scofield v. Doscher, 72 N. Y. 491; 2 R. S. p. 191, § 153; Darmstadt v. Mason, 144 App. Div. 249; Monaghan v. May, 242 App. Div. 64;Fagan v. Robbins, 96 Fla. 91; Jacobowits v. Herson, 243 App. Div. 274; Ladd v. Stevenson, 112 N. Y. 325; Hatch v. Central Nat. Bank, 78 N. Y. 487; M’Donald v. Neilson, 2 Cow. 139; Wakeman v. Price, 3 N. Y. 334; Buffalo Sav. Bank v. Newton, 23 N. Y. 160; Hale v. Clauson, 60 N. Y. 339; Misiaszek v. Roberts, 211 App. Div. 417; Ballentyne v. Smith, 205 U. S. 285; Crane v. Stiger, 58 N. Y. 625.) The Special Term properly exercised its power. (Bouregeois v. Risley Real Estate Co., 82 N. J. Eq. 211.) The granting of a reargument was within the discretion of the court, even had defendant’s time to appeal from the order of confirmation expired. It was especially proper in view of the fact that the time to appeal was still open due to the defective notice of entry. (Holmes v. Rogers, 50 Hun, 600; Matter of Crane, 81 Hun, 96; Sheran v. Felt, 2 N. Y. 186; Doyle v. Hamilton Fish, Corp., 207 N. Y. 751; Crane v. Stiger, 58 N. Y. 625; Young v. Weber, 117 N. J. Eq. 392; Yorks v. Peck, 17 How. Pr. 192; Matter of N. Y. C. & H. R. R. R. Co., 60 N. Y. 112; Kelly v. Sheehan, 76 N. Y. 325; Valton & Adams v. Nat. Loan Co., 19 How. Pr. 515; Livingston v. N. Y. El. R. R. Co., 60 Hun, 473; Gabay v. Doane, 38 Misc. Rep. 661; Weeks v. Coe, 36 App. Div. 339.)
   Loughran, J.

This action was brought for the foreclosure of a mortgage given by defendant, Virginia M. Van Bokkelen, to secure her debt to the plaintiff bank. Judgment of foreclosure and sale was regularly entered April 26,1933, on default of all the defendants. Payment of a probable residue of the debt was thereby awarded in this form: “ That the plaintiff, The Emigrant Industrial Savings Bank, upon confirmation of the referee’s report of sale, have judgment against the defendant, Virginia M. Van Bokkelen, for the amount of any deficiency remaining after the sale of the mortgaged premises and the application of the proceeds as hereinabove directed.” This provision was not touched by the limitation attached to deficiency judgments in foreclosure by section 1083-a of the Civil Practice Act. (Feiber Realty Corp. v. Abel, 265 N. Y. 94.)

It was determined by the judgment that principal and interest were due in the sum of $8,018.11. The referee’s report of sale showed a deficiency of $8,537.38 on a purchase by the plaintiff bank for $1,000.

Though the defendant, Virginia M. Van Bokkelen, had theretofore defaulted, she then appeared in the action as was her right. (Martine v. Lowenstein, 68 N. Y. 456.) Thereafter she was heard on the motion for confirmation of the report of sale, when, by affidavits designed to establish that the fair and reasonable value of the mortgaged premises was in excess of the amount shown to be due, she besought the Special Term to confirm the report only upon the condition that she be credited with the sum of the deficiency thereby stated. This plea the court found itself powerless to entertain. Its opinion was that, “ It is the legislative, not the judicial function to determine whether there exists an emergency justifying an award of the relief here sought by the defendant.” An order unconditionally confirming the report of sale was entered August 3, 1933, and judgment accordingly was docketed against the defendant, Virginia M. Van Bokkelen, for the reported deficiency.

On July 3, 1934, the Appellate Division decided Monaghan v. May (242 App. Div. 64, 733). When that case was cited, the Special Term granted an application by the defendant, Virginia M. Van Bokkelen, for reargument of the motion to confirm the report of sale, and, upon the record originally before it, thereupon made an order in substance as follows: “ That the fair and reasonable value of the mortgaged premises sold herein is found to be and is hereby fixed as in excess of $9,537.38, the amount reported by the referee herein to be due plaintiff; and * * * the price paid by plaintiff for the mortgaged premises on said sale being grossly inadequate, that the defendant, Virginia Van Bokkelen, be and she hereby is credited, upon said referee’s report, with said fair and reasonable value of the mortgaged premises to the extent of $8,537.38, the amount of the deficit after sale reported by the said referee, * * * That the deficiency judgment of the plaintiff herein against the defendant, Virginia Van Bokkelen, * * * be and the same hereby is vacated and annulled and a deficiency judgment herein or the entry thereof is refused, denied and forbidden; and * * * that in all other respects the said report of sale of the referee * * * be and the same hereby is confirmed.”

We think this order was unauthorized and without effect.

A decree of foreclosure and sale entered in the usual form prior to August 28, 1933 (See Civ. Prac. Act, § 1083-a), was a final determination of the liability for a resulting deficiency of any defendant over whom jurisdiction was obtained when that relief was asked and awarded against him in the action. (Civ. Prac. Act, §§ 1082, 1083; Feiber Realty Corp. v. Abel, supra, pp. 98, 99.) This judgment of foreclosure and sale was regularly entered April 26, 1933. True it provided, as we have noticed, that the plaintiff bank, “ upon confirmar lion of the referee’s report of sale, have judgment against the defendant, Virginia M. Van Bokkelen, for the amount of any deficiency,” and so perhaps no deficiency was to be payable or enforceable before the report of sale was confirmed. (Bank of Rochester v. Emerson, 10 Paige, 115. Cf. Moore v. Shaw, 15 Hun, 428; appeal dismissed, 77 N. Y. 512.) But from that circumstance it did not follow that the judgment was any the less a final award that payment should be made by the defendant, Virginia M. Van Bokkelen, of the residue of the debt remaining unsatisfied, after a sale of the mortgaged property, and the application of the proceeds, pursuant to the directions contained therein.” (Civ. Prac. Act, § 1083. See McCarthy v. Graham, 8 Paige, 480; Morris v. Morange, 38 N. Y. 172; Wager v. Link, 134 N. Y. 122, 127, 128; Feiber Realty Corp. v. Abel, supra.) This provisional personal liability was validly adjudicated when the judgment of foreclosure and sale was entered against the defendant, Virginia M. Van Bokkelen, on her default. From that judgment she had no right of appeal. (Civ. Prac. Act, § 557, subd. 1.) That judgment has not been vacated. The court had an undoubted discretion within limits to refuse confirmation of the report of sale, or to open the sale made to the plaintiff bank under the judgment, and in either case to order a resale. (Brown v. Frost, 10 Paige, 243; Crane v. Stiger, 58 N. Y. 625; Hale v. Clauson, 60 N. Y. 339; Fisher v. Hersey, 78 N. Y. 387.) No relief of that sort was allowed.

What ultimately happened at the Special Term was that the defendant, Virginia M. Van Bokkelen, was credited upon the confirmed report of sale with the amount of the deficit therein recorded; the docket of the deficiency judgment against her was expunged; and any recovery against her personally was interdicted. In the court of original jurisdiction the unchallenged final judgment of foreclosure and sale was in effect revised so as to delete the award of payment of a residue of the debt ascertained as that judgment directed; and the order unconditionally confirming the report of sale in effect was reversed for asserted judicial error. The Special Term was without power to dictate such a procedure. (Herpe v. Herpe, 225 N. Y. 323, 327. Cf. Livingston v. Mildrum, 19 N. Y. 440; S. J. E. Bldg. Corp. v. Matt O. M. Construction Co., 265 N. Y. 282.)

Much of the argument before us was addressed to the question whether in an action to foreclose a mortgage the final judgment may order a sale without the award of any personal liability, when in conscience that course is compelled by extraordinary hardship that otherwise must inevitably result in times of widespread economic prostration. As to this we express no opinion, since upon the foregoing statement it is plain that no such issue was here presented for determination by the courts below. Perhaps it should be said that we do not approve the decision in Monaghan v. May (supra).

The order of the Appellate Division and that of the Special Term should be reversed and the original order of confirmation reinstated, with costs to the appellant in all courts.

Crane, Ch. J., Lehman, O’Brien, Hubbs, Crouch and Finch, JJ., concur.

Orders reversed, etc.