author: Fuld, J.

text:
    Ehag Eisenbahnwerte Holding Aktiengesellschaft, Appellant, v. Banca Nationala a Romaniei (National Bank of Roumania), Respondent.
    Argued October 16, 1953;
    decided January 14, 1954.

      Henry I. Fillman and Otto C. Sommerich for appellant.
    I. By its agreement with the Roumanian Ministry of Finance, defendant expressly obligated itself to pay the bond interest and make the sinking fund payments. The agreement was made or intended for the benefit of the bondholders and, therefore, plaintiff has a cause of action against defendant upon defendant’s failure to pay the bond interest and make the sinking fund payments with the funds received by it for such purposes. (Lawrence v. Fox, 20 N. Y. 268; Vrooman v. Turner, 69 N. Y. 280; Seaver v. Ransom, 224 N. Y. 233; Filardo v. Foley Bros., 297 N. Y. 217.) II. Since the Boumanian Government deposited with defendant the funds required for the bond interest and sinking fund payments and parted with control over these funds, plaintiff has a cause of action against defendant upon the latter’s failure to pay the bond interest and make the sinking fund payments in accordance with the agreement made by it. (Rogers Locomotive & Mach. Works v. Kelley, 88 N. Y. 234; Sayer v. Wynkoop, 248 N. Y. 54; Staten Is. Cricket & Baseball Club v. Farmers’ Loan & Trust Co., 41 App. Div. 321.) III. Since the bonds provide for payment of principal and interest, at the option of the holder, in pounds sterling in London or in dollars in New York, the demand by plaintiff for payment in dollars in New York fixed New York as the place of performance, and upon defendant’s failure to pay dollars in New York, as demanded, a cause of action against defendant arose in New York in plaintiff’s favor. (Lann v. United Steel Works Corp., 166 Misc. 465; Pan-Amer. Securities Corp. v. Fried, Krupp AG., 169 Misc. 445, 256 App. Div. 955; South Amer. Petroleum Corp. v. Colombian Petroleum Co., 177 Misc. 756.) IV. Since plaintiff is entitled, in any event, to sue for and recover on the matured interest coupons for the years 1940 and 1941, the warrant of attachment was properly issued. (Cohen v. Walker, 38 Misc. 114; Sulzbacher v. Cawthra, 14 Misc. 545.) V. Upon a motion to vacate an attachment, based upon insufficiency, the merits of the action will not be determined, and the original papers upon which the warrant of attachment was issued do not clearly indicate that plaintiff must ultimately fail. (Wulfsohn v. Russion Federated Soviet Republic, 234 N. Y. 372; Jones v. Hygienic Soap Granulator Co., 110 App. Div. 331; Bard-Parker Co. v. Dictograph Products Co., 258 App. Div. 638; Auerbach v. Grand Nat. Pictures, 176 Misc. 1031, 263 App. Div. 712; Bernstein v. Van Heyghen Freres S. A., 163 F. 2d 246; Crook v. Lipton, 182 App. Div. 838.)

      Harold W. Bissell and Thomas L. McGannon for respondent appearing specially.
    I. The attachment papers show no obligation of defendant to or for the benefit of plaintiff with respect to the actual service of the consolidation bonds (by coupon payments and amortization). (Lawrence v. Fox, 20 N. Y. 268; Staten Is. Cricket Baseball Club v. Farmers’ Loan & Trust Co., 41 App. Div. 321; Erb v. Banco di Napoli, 243 N. Y. 45; Noyes v. First Nat. Bank of N. Y., 180 App. Div. 162; Nacional Financiera, S. A., v. Speyer, 261 App. Div. 599.) II. The attachment papers show no obligation and no breach of any obligation of defendant for the benefit of plaintiff with respect to any intermediate step in the over-all servicing procedure. (Hardie v. Bent Milk Food Corp., 207 App. Div. 513, 238 N. Y. 608; Hilton v. Guyot, 159 U. S. 113; McCarthy v. Reichsbank, 259 App. Div. 1016, 284 N. Y. 735.) III. The attachment papers fail to show any cause of action against defendant for the principal amount of the bonds (whether or not they show any cause of action for coupon interest). (Hall v. Nassau Consumers Ice Co., 260 N. Y. 417.) IV. The attachment papers not only fail to show any reason for a trial, but affirmatively show that plaintiff could not succeed. (Makepeace v. Dilltown Smokeless Coal Co., 179 App. Div. 60; Grassi v. La Sociedad Bancaria Del Chimborazo, 213 App. Div. 629; Miller Bros. Constr. Co. v. Thew Shovel Co., 248 App. Div. 150; Lamborn v. Lake Shore Banking & Trust Co., 231 N. Y. 616.)
   Fuld, J.

Plaintiff, a Swiss corporation, sues as the holder of a substantial number of negotiable coupon bonds issued by the Kingdom of Boumania. Begun by issuance of a warrant of attachment, the action seeks to recover from defendant bank, a Boumanian corporation, damages stemming from the asserted breach of an agreement between defendant and the Boumanian Government, in connection with the servicing of such bonds. Upon a motion by defendant, appearing specially, the court at Special Term vacated the warrant of attachment, holding that the papers upon which it had been granted did not establish a prima facie cause of action. The Appellate Division affirmed, and plaintiff’s appeal is here, by leave of that court, upon a certified question.

The bond issue, known as the “ Boumanian Four Percent Consolidation Loan of 1922,” was in the total authorized face amount of 35,000,000 pounds sterling, or 175,000,000 gold dollars, maturing in 1968. Each of the bonds made reference to a General Bond and to certain laws specially enacted by the Boumanian Government. Interest was payable semiannually at the rate of 4% a year, and provision was made for amortization of principal by means of a Cumulative Sinking Fund. The Boumanian Government undertook to service the bonds by specified semiannual payments, in pounds sterling or gold dollars, to named financial agents, and it was they who were to apply the same to the payment of interest and the maintenance of the sinking fund. The General Bond named the British Overseas Bank, Ltd., as “the financial agents of the Government for the service of the said Bonds,” and designated it as “ Trustees for the Bondholders ” for the purpose of receiving the payments for the servicing of the bonds. The funds accumulated in the sinking fund were to be used for retirement of the bonds, either by purchases made on the market at less than par or by redemption of bonds drawn by lot.

The law authorizing the issuance of the bonds announced that payments of interest and amortization of principal were to be ‘ ‘ effected ’ ’ from a special fund into which the government was to pay all export taxes as long as such taxes were in force. And the individual bonds, as well as the General Bond, recited that the government was charging the gross proceeds of present and future export taxes for the payment of such interest and amortization. The individual bonds further obligated the government to make up any deficiencies out of its general revenues and assets. And the government’s Ministry of Finance was also authorized to enter into a certain agreement, termed a “ Convention,” with the defendant Boumanian National Bank, whereby the ministry was to turn over to the bank the export taxes collected, as well as any additional amounts necessary to cover the interest and amortization of the bonds, plus 10%. Such funds, it was further specified, were to be kept in “ a special account.”

In addition, Article 4 of the agreement recited, generally, that the bank “ obligates itself to make all payments out of the above-mentioned transfers to it, and to procure the necessary foreign exchange”. The specific duties assumed by the bank were set out in Article 6. The bank, it was stipulated, would “ assume the task of converting the various remittances * * * into the currency required to cover the various loans ”, “ following the instructions given by ’ ’ the Ministry of Finance. The corresponding value in pounds sterling was then to “be deposited in full at the Bank of England, where-from, in accordance with the directives of the Ministry of Finance * * * the required remittances ” would be made to the British Overseas Bank and its subagents.

In the event that the Boumanian National Bank was itself unable to obtain funds to make payments abroad, the ministry was to procure such funds “ by organization of the export of payment media.” The bank was also privileged to make use of its available funds abroad for that purpose, in which event the government would be obligated to repay it, with interest. The bank was likewise required to account to the ministry for the maintenance of the fund, and any sums remaining after the payment of interest and amortization, plus 10%, were to be placed at the disposal of the ministry, which, however, was empowered to dispose of the fund only in accordance with the Convention.

Up to 1933, the Boumanian Government complied with its obligations by depositing the necessary funds with the bank, and the bonds were duly serviced. In August of 1933, the Boumanian Council of Ministers adopted a resolution authorizing the Minister of Finance to suspend the transfer abroad of any amounts due on the government’s foreign obligations and providing that the government “ shall deposit the amount due ” with the bank in lei and shall be considered by virtue of this deposit as released from their obligations until the creditor states make it possible, by facilitating business relations, to obtain the necessary foreign exchange for the carrying-out of the transfer.” The Minister of Finance thereupon instructed the bank “ to act accordingly.”

Plaintiff’s complaint and moving papers allege that the Roumanian Government thereafter continued, in accordance with that resolution, to make deposits of lei with the bank up to and including October 1, 1941, but that the bank failed to service the bonds. There does not, however, appear to be any showing — other than allegations on information and belief — of any such deposits after 1937. In May, 1941, the Ministry of Finance, through the Roumanian Legation in this country, announced the suspension abroad of the servicing of its foreign debt.

This suit, following a demand made upon defendant bank for the payment of the face amount of plaintiff’s bonds and of its 1940 and 1941 interest coupons, is predicated on defendant’s failure to procure and transmit the foreign exchange necessary for the servicing of the bonds for the years 1940 and 1941. It is plaintiff’s claim, first, that the bondholders are third-party beneficiaries of defendant’s agreement with the government and, second, that the government’s deposit of the funds with defendant constituted an absolute and irrevocable appropriation of such funds to the payment of interest and amortization on the bonds. As stated, the courts below vacated the warrant of attachment, upon the ground that no prima facie cause of action was shown.

Whether defendant is liable to the bondholders by reason of its contract with the government or its receipt of moneys thereunder, must be determined by reference to the law of Boumania, the place where the contract was made and where the moneys were received. (See Swift & Co. v. Bankers Trust Co., 280 N. Y. 135, 141, 145; see, also, Restatement, Conflict of Laws, § 332, subd [f]; § 346.) Neither party has briefed the Boumanian law, and, since the common law is not in effect in Boumania, we may not presume that its law is the same as ours. (See Sonnesen v. Panama Transport Co., 298 N. Y. 262, 267; Cuba R. R. Co. v. Crosby, 222 U. S. 473, 479; see, also, Restatement, Conflict of Laws, § 623.) Be that as it may, though, we need not consider or decide to what extent reference may, nevertheless, be made to the pertinent principles of our own internal law, in view of our conclusion that plaintiff’s proof would not, in any event, establish a cause of action under New York law.

The various bond documents and the agreement between the bank and the government clearly establish that no duty was imposed upon, or assumed by, the bank, to make any payments whatsoever to the bondholders. The specific provisions of the agreement fixing the bank’s duties (Art. 6) make it manifest that the bank assumed only the function, under the government’s direction, of securing the necessary foreign exchange and arranging for its transmission, first, to the Bank of England and, then, to the British Overseas Bank and its subagents. The duty of making payments to the bondholders was placed, not on defendant, but on British Overseas. Indeed, the primary obligation assumed by the government, as provided in the General Bond, was to pay each half year’s installment of the fund, necessary for interest and amortization, to British Overseas.

Although the agreement between the government and defendant bank denominated the amounts deposited as a special fund for a specific purpose,” there is no doubt that control of the various funds was at all times retained by the government — at least until their equivalent in pounds sterling reached British Overseas. Thus, all steps between the initial deposit in defendant bank and the ultimate remission to British Overseas were explicitly made subject to the “ instructions ” and ‘ directives ’ ’ of the Ministry of Finance. Moreover, there was no certainty that the funds deposited by the government with defendant would be used to obtain the necessary foreign exchange. Both the agreement — in Article 5 — and the individual bonds thus specifically prescribed that, in the event of defendant’s inability to procure funds to make payments abroad the Ministry of Finance shall procure such funds by organization of the export of payment media.” The agreement (Art. 5) further permitted defendant to make use of its available funds abroad to secure the necessary foreign exchange, subject to repayment, with interest, by the government. That the government did not part with its entire interest in the funds, was evidenced by a further provision of the agreement — in Article 9 — that any interest which defendant might receive from its correspondents on the amounts deposited by the Ministry of Finance, would be credited, not to defendant or to the special fund, but to the Ministry.

Clearly, then, up to the point that the sterling equivalent of the funds reached British Overseas, the government, through the agency of defendant bank, was fulfilling its primary obligation of making payment of the stipulated semiannual installments to the bondholders’ designated trustee. Defendant’s undertaking was simply to take one of the steps leading to performance by the government of its own separate obligation to the bondholders.

It is settled that a deposit of moneys in a bank by a corporate or governmental debtor, with instructions to pay maturing bond interest coupons of the depositor, does not ordinarily create a trust for the benefit of the bondholders or give rise to any cause of action in their favor against the bank. It merely creates a debtor-creditor relation between bank and depositor, coupled with an agency on the part of the bank to make the prescribed payments. (See Erb v. Banco di Napoli, 243 N. Y. 45, 48-49; Noyes v. First Nat. Bank of N. Y., 180 App. Div. 162, affd. 224 N. Y. 542; Carr v. Yokohama Specie Bank, 272 App. Div. 64, 66, affd. 297 N. Y. 674; Nacional Financiera, S. A., v. Speyer, 261 App. Div. 599; Staten Is. Cricket & Baseball Club v. Farmers’ Loan & Trust Co., 41 App. Div. 321; see, also, 2 Williston on Contracts [Rev. ed., 1936], § 351; 4 Corbin on Contracts [1951], § 779F.) The fact that the moneys are deposited in a special account for the specified purpose calls for no different conclusion. (See Noyes v. First Nat. Bank of N. Y., supra, 180 App. Div. 162, affd. 224 N. Y. 542; Staten Is. Cricket & Baseball Club v. Farmers’ Loan & Trust Co., supra, 41 App. Div. 321; see, also, Erb v. Banco di Napoli, supra, 243 N. Y. 45, 49.)

Plaintiff, however, contends that those decisions are here inapplicable, upon the ground that defendant Roumanian National Bank expressly promised to pay the deposited moneys to the bondholders." What the precise operative effect of such a promise by a bank might be (cf. Erb v. Banco di Napoli, supra, 243 N. Y. 45, 48-49), whether such an agreement would have significance only insofar as it might tend to indicate that the depositor intended to part with all control over the funds and to constitute the bank a trustee or agent for the designated payee (cf. Sayer v. Wynkoop, 248 N. Y. 54, 57-58), need not now concern us. In the present case, the facts are, first, there was no promise on the part of defendant to pay bondholders and, second, there was no breach by defendant of the agreement which it actually did make.

Defendant’s obligation to procure the necessary foreign exchange and to transmit it to the Bank of England was expressly made subject to the directions of the government. Defendant was neither required nor authorized to effect the requisite conversion in the absence of instructions from the government, and, surely, not in contravention of them. When, therefore, the government suspended the transfer of all foreign exchange and notified defendant “ to act accordingly,” defendant had no authority to proceed any further. Certainly, it may not be said to have breached its contract simply by following the government’s directions. (See Erb v. Banco di Napoli, supra, 243 N. Y. 45, 50.)

Moreover, all that defendant had arranged to do was to perform a sendee for the government which would enable it to fulfill its own separate obligation to the bondholders. Accordingly, it is highly questionable whether the bondholders may be regarded as more than incidental beneficiaries of the agreement between the bank and the government, and as such without standing to claim any rights thereunder. (See Hardie v. Bent Milk Food Corp., 207 App. Div. 513, affd. 238 N. Y. 608; Matter of Connecticut Co., 95 F. 2d 311, 314; see, also, 4 Corbin, op. cit., § 779D.)

The delivery of moneys by one person to another, with instructions that they be paid to a third person, may be effectual to create a trust for the latter’s benefit, but only where the depositor’s “ manifested intention read in connection with all the circumstances of the case indicates that the delivery was to be a finality, that the money * * * was to be from that moment dedicated to the use of the third person ”. (2 Williston, op. cit., p. 1035.) On the other hand, no trust results, if ‘ ‘ the use of the money or property was intended to be subject to the directions of the person delivering it ” or “ if the holding was for Ms benefit and under his orders (Ibid.; see, also, Sayer v. Wynkoop, supra, 248 N. Y. 54, 57, 59.) Thus, a trust may be created where moneys — held by a depositary as a sinking fund for the redemption of bonds — are irrevocably appropriated for that purpose and are not under the domimon of the depositor. (See Brown v. Morgan Co., 265 App. Div. 631, affd. 295 N. Y. 867.) And a trust may likewise arise upon the payment of moneys to a depositary charged with the function of paying interest on bonds, where the moneys are specifically received in trust for that purpose, free from further control by the depositor. (See Rogers Locomotive & Mach. Works v. Kelley, 88 N. Y. 234.)

In the present case, a trust might have come into existence, if and when the sterling equivalent of the funds in question had reached British Overseas, which was actually charged as trustee with the duty of applying the funds to the payment of interest and the maintenance of the sinking fund. But, up to that time, the government itself retained control over the funds furnished by it; there was no final appropriation of the funds merely upon the deposit with defendant, for it was not charged with the duty of paying interest or maintaining the sinking fund. Its function or duty was merely to act as agent for, and on behalf of, the government, and subject to its directions, in converting the Roumanian currency into foreign exchange and effecting its transmission to the bank which was to make payment to the bondholders. Indeed, the government had the privilege, as well as the duty, to obtain the requisite foreign exchange itself, in the event of defendant’s inability to do so. Certainly, there is no basis for the claim that defendant received the funds as trustee to pay to bondholders, in the absence of instructions from the government and in disregard of the provisions vesting in the government control and supervision of the entire process of transmitting the funds to British Overseas.

Plaintiff further contends that the government parted with all control over the funds, when it deposited the moneys in lei under the suspension resolution of 1933 (supra, pp. 247-248). Quite obviously, that resolution may not be read either as a blanket authorization to defendant to transfer the funds or as a surrender by the government of control over their disposition. Its clear import was only that the deposit of the moneys was to be considered a fulfillment of the government’s obligations until the necessary foreign exchange would be available. No inference may be drawn that the government intended to part with control or permit defendant to nullify the very purpose underlying the resolution.

In sum, then, since plaintiff’s complaint and moving papers fail to establish a prima facie cause of action, the attachment was properly vacated. (See American Reserve Ins. Co. v. China Ins. Co., 297 N. Y. 322, 325, and cases there cited.) The order appealed from should be affirmed, with costs, and the certified question answered in the affirmative.

Lewis, Ch. J., Desmond, Dye and Feoessel, JJ., concur with Fuld, J.; Conway and Van Voobhis, JJ., concur in result upon the ground that there is no substantiation of the cause of action for the principal nor of allegations in the complaint made upon information and belief, that any funds were received by defendant applicable to 1940 or 1941 interest coupons, by reason whereof the action is brought.

Order affirmed, etc.

      . There being, however, no substantiation of the allegations, on information and belief, that defendant received funds from the government for 1940 and 1941, it is questionable whether there is, in any event, sufficient proof of a cause of action necessary to sustain a warrant of attachment. (Civ. Prac. Act, § 903; see Zenith Bathing Pavilion v. Fair Oaks S. S. Corp., 240 N. Y. 307, 311; Murphy v. Jack, 142 N. Y. 215, 217-218; Hart v. Page Mfg. Co., 187 App. Div. 296, 297-298.)

      . Compare Crashley v. Press Pub. Co., 179 N. Y. 27, 32-33; Riley v. Pierce Oil Corp., 245 N. Y. 152, 154; Ozanic v. United States, 165 F. 2d 738, 744, with Savage v. O’Neil, 44 N. Y. 298, 301, and with Parrot v. Mexican Central Ry. Co., 207 Mass. 184; Whitford v. Panama R. R. Co., 23 N. Y. 465, 467 — 468; Gerli & Co. v. Cunard S. S. Co., 48 F. 2d 115, 117; 3 Beale on Conflict of Laws, § 622A. 2.


source: Caselaw Access Project

author: Froessel, J.

license: Public Domain

text:
    Aron Perlman et al., Respondents, v. M. Israel & Sons Co., Inc., Appellant.
    Argued December 3, 1953;
    decided January 15, 1954.

      Emanuel Harris, Paul J. Madden and Max E. Greenberg for appellant.
    I. The trial court erred in charging the jury that the burden of proving that plaintiff breached the contract rested upon defendant, and the affirmance of such ruling was erroneous. (Lau Co. v. Darr, 76 Misc. 512; Balmford v. Grand Lodge of A. O. U. W., 19 Misc. 1.) II. Plaintiffs were obliged to take the entire quantity of goods when defendant offered the same in December, 1950, and the charge of the trial court to the contrary and to the effect that plaintiffs had the right to wait until the end of February, 1951, to accept the goods was improper. (Morel v. Stearns, 43 Misc. 639; Bahnsen & Co. v. Leaf, 203 App. Div. 618; Jardine, Matheson & Co. v. Huguet Silk Co., 203 N. Y. 273.) III. The trial court erred in excluding the testimony of defendant’s witness as to market values. (Meiselman v. Crown Heights Hosp., 285 N. Y. 389; Glickstein & Terner v. Sheffield Glass Bottle Co., 214 App. Div. 626; Bearss v. Copley, 10 N. Y. 93; Kerr v. McGuire, 28 N. Y. 446.) IV. Plaintiffs having failed to prove an available market for the purchase of the goods, there was a failure to prove any damages and therefore there was no basis for any recovery by plaintiffs. (Buyer v. Mercury Tech. Cloth & Felt Corp., 301 N. Y. 74.) V. The letters between the parties did not constitute a valid contract. (Smiley Steel Co. v. Schmoll, 200 App. Div. 655; Poel v. Brunswick-Balke-Collender Co., 216 N. Y. 310; Brick v. Cohn-Hall-Marx Co., 283 N. Y. 99.) VI. The trial court erred in excluding testimony as to conversations between the parties prior to the letters alleged to constitute the contract and subsequent thereto modifying the same. (Whitmore, Rauber & Vicinus v. Blanchard, 272 App. Div. 860; Levy v. Forster, 224 App. Div. 463.)

      Paxton Blair, Charles Gold and Mortimer J. Metchik for respondents.
    I. The court properly instructed the jury that the burden was on defendant to establish an anticipatory breach. (Rubber Trading Co. v. Manhattan Rubber Mfg. Co., 221 N. Y. 120; Balmford v. Grand Lodge of A. O. U. W., 19 Misc. 1; Lau Co. v. Darr, 76 Misc. 512; Stokes v. Stokes, 155 N. Y. 581.) II. When a plaintiff relies on an available market to establish the damages recoverable, a failure to prove the availability of an amount as large as that contracted for does not defeat recovery but may diminish it pro tanto. (Saxe v. Penokee Lbr. Co., 159 N. Y. 371; Buyer v. Mercury Tech. Cloth & Felt Corp., 301 N. Y. 74.)
   Froessel, J.

In this action for damages arising out of the alleged breach of an agreement for the purchase and sale of a large quantity of “ sweater clips ”, defendant seller denies that there was a valid contract between the parties, and urges upon us a number of errors claimed to have been made by the trial court.

Upon this record, it appears that the parties actually entered into an oral contract on or prior to November 22, 1950, and that the confirmatory letters exchanged between them, dated on that day, and which apparently crossed in the mail, were evidence of such contract, despite their variance from each other in two respects. Although the trial court correctly charged that these letters evidence a contract ”, it should not have excluded testimony of Sidney Israel, offered to show the conversation at the time the agreement was consummated.

We are also of the opinion that the trial court’s instructions to the jury to the effect that plaintiffs were not bound to accept the goods allegedly tendered by defendant in December, 1950, so long as they were ready, willing and able to take and pay for them by the end of February, 1951, were confusing, to say the least. There was no evidence in the case — nor has any contention been made — that the goods were offered at an unreasonable hour of the day (Personal Property Law, § 124, subd. 4), or that defendant sought arbitrarily to put plaintiffs in technical default (Manners & Co. v. Hirshenhorn & Sons, 280 App. Div. 711) by demanding actual acceptance of the goods at the “ particular moment or at the instant defendant elected to offer them".

The tender was allegedly made long prior to the expiration of the contract. The seller was not restricted to any particular day, but had the right to offer to deliver the goods contracted for at any time during the contract period (Curtiss v. Howell, 39 N. Y. 211; Bahnsen & Co. v. Leaf, 203 App. Div. 618; Morel v. Stearns, 43 Misc. 639, 642 [App. Term]; Harman v. Washington Fuel Co., 228 Ill. 298, 301; see, also, Crown Embroidery Works v. Gordon, 190 App. Div. 472). If, therefore, the jury believes Israel’s testimony to the effect that defendant had tendered, and that the Perlmans had refused, delivery of the goods early in December, 1950, such a refusal would have been a breach of contract excusing defendant from further performance on its part (Jardine, Matheson & Co. v. Huguet Silh Co., 203 N. Y. 273, 280; Gourd v. Healy, 206 N. Y. 423; Dunham & Dimon v. Pettee & Mann, 8 N. Y. 508). The fact that the Perlmans may subsequently and before termination of the stipulated delivery period have been “ ready, able and willing to take and pay for ” the goods would not save their cause of action.

The trial court also erred in precluding the witness Israel, who was obviously qualified as an expert, from giving testimony as to market value generally, and limiting him to actual purchases and sales of his own.

There was no error in the court’s instructions with respect to the burden of proof. Plaintiffs, of course, had the burden of establishing that they were ready, able and willing to take and pay for the goods, as the court properly charged. Payment, however, was not required until the presentation of invoices by defendant. The latter, on the other hand, had the burden of establishing its affirmative defense that plaintiffs had rejected a valid tender of the goods, and, since it sought to be excused from its additional obligation under the contract of presenting invoices, it was necessarily incumbent upon it to establish plaintiffs’ anticipatory breach. As to the remaining points urged upon us in appellant’s brief, we find no prejudicial errors.

The judgments appealed from should be reversed and a new trial granted, with costs to abide the event.

Lewis, Oh. J., Conway, Desmond, Dye, Fuld and Van Voorhis, JJ., concur.

Judgments reversed, etc.


author: Van Voorhis, J.

text:
    The People of the State of New York, Respondent, v. William J. Grant, Appellant.
    Argued October 21,1953;
    decided January 15, 1954.

      Charles E. Powers and Joseph M. O’Loughlin for appellant.
    I. The town board of North Hempstead lacked authority to enact an ordinance closing public streets to through or transient traffic. (Sperling v. Valentine, 176 Misc. 826; Decker v. Goddard, 233 App. Div. 139; People v. City of Hornell, 256 App. Div. 113, 282 N. Y. 555; People v. City of Buffalo, 152 Misc. 375; Great Atlantic & Pacific Tea Co. v. City of New York, 173 Misc. 470; People v. City of New York, 245 App. Div. 77; People v. Corwin, 304 N. Y. 362; People v. County of Westchester, 257 App. Div. 769, 282 N. Y. 224; Jewish Consumptives’ Relief Soc. v. Town of Woodbury, 230 App. Div. 228, 256 N. Y. 619; Associated Transport, Inc., v. City of Syracuse, 196 Misc. 1031.) II. The ordinance, by favoring a select group to the detriment of remaining motorists, violates the New York Constitution and the Fourteenth Amendment to the United States Constitution. (Myer v. Myer, 271 App. Div. 465, 296 N. Y. 979; Mallary, Inc., v. City of New Rochelle, 184 Misc. 66, 268 App. Div. 878; Town of Galen v. Clyde & Rose Plank Road Co., 27 Barb. 543; People v. Kerr, 27 N. Y. 188; City of New York v. Rice, 198 N. Y. 124.)

      Frank A. Gulotta, District Attorney (Henry P. De Vine of counsel), for respondent.
    I. The guilt of defendant was established as a matter of law. II. The town board of North Hemp-stead has the power to enact an ordinance prohibiting ‘1 through or transient vehicular traffic ’ ’ on town streets wholly within the boundaries of the township under the Vehicle and Traffic Law. (People v. City of Hornell, 256 App. Div. 113, 282 N. Y. 555; People v. Bedell, 251 N. Y. 415; Manning, Bowman & Co. v. Keenan, 73 N. Y. 45; People v. Vanderbilt, 38 Barb. 282; Cady v. Conger, 19 N. Y. 256; Porter v. International Bridge Co., 200 N. Y. 234; People ex rel. Stranahan v. Thompson, 98 N. Y. 6.) III. The town board of North Hempstead has authority to enact an ordinance prohibiting through or transient traffic on town roads pursuant to the Town Law. (Sproles v. Binford, 286 U. S. 374; Bradley v. Public Utilities Comm., 289 U. S. 92; People v. Keane, 293 N. Y. 467.) IV. The town ordinance prohibiting through or transient vehicular traffic is not unlawful class legislation so it does not violate the Fourteenth Amendment of the United States Constitution or the New York Constitution. (People v. Beakes Dairy Co., 222 N. Y. 416.)
   Van Voorhis, J.

Appellant has been convicted by a Court of Special Sessions in Nassau County of having violated an ordinance of the Town of North Hempstead which prohibits “ through or transient vehicular traffic ” on streets within an area in or near the village of New Hyde Park. Appellant questions the validity of this ordinance, without contesting that he did "what the language purports to prohibit. The ordinance is challenged upon the ground that it is not a valid exercise of any power which has been delegated by the State to the town board of North Hempstead. In other words, appellant’s contention is that this ordinance involves an unauthorized or illegal attempt by a town board to regulate traffic.

The general principle applicable to the delegation of power to local governmental bodies to regulate traffic, is thus summarized in section 24.618 of McQuillin on Municipal Corporations (3d ed., Vol. 7): “The regulation of motor vehicles in their use of streets is an important function of modern municipal government, and is valid where it is reasonable, nondiscriminatory, and authorized by, and not in conflict with, state law * * *. However, municipal power to regulate automobiles and vehicular traffic is not power to prohibit them from using the streets.”

Streets pertain to the exercise of a governmental function (Markey v. County of Queens, 154 N. Y. 675; People ex rel. Van Keuren v. Board of Town Auditors, Esopus, 74 N. Y. 310, 315). Political subdivisions and municipal corporations hold the fee of streets for the benefit of the public. This refers not alone to adjacent property owners, nor to the inhabitants of the particular political subdivision or municipality, but to the whole people (People v. Kerr, 27 N. Y. 188, 198, 199; City of New York v. Rice, 198 N. Y. 124, 128; Town of Galen v. Clyde & Rose Plank Road Co., 27 Barb. 543). It signifies that streets are subject exclusively to regulation and control by the State as sovereign, except to the extent that the Legislature delegates power over them to political subdivisions and municipal corporations. In this context, local governing boards are vested only with such powers as are conferred upon them by statute (Wells v. Town of Salina, 119 N. Y. 280).

The area through which such traffic is prohibited in the instance of this violation, is shaped in the form of an isosceles triangle, with the apex toward the north, Hillside Avenue forming the base (south boundary) and having as its sides Lakeville Road (east) and the New York City line (west). It consists of about ten blocks and is defined in the ordinance as ‘ ‘ bounded on the north by Seventy-eighth Avenue, east by Lakeville Road, south by Hillside Avenue, west by New York City line.” This prohibition of through or transient vehicular traffic appears to have been adopted as a result of complaints from residents of this area, who objected to the volume of traffic at particular hours of the day, mainly on account of the large number of automobiles driven by employees of Sperry Gyroscope Company going to and from their work at its plant situated just north of the area. Appellant, a Sperry Gyroscope employee, was convicted of driving his automobile through this area on August 18, 1952, while taking a fellow employee home after work to a location one and one-half blocks west of the area and within the city of New York.

Section 90 of the Vehicle and Traffic Law, entitled “ Powers of local authorities ”, confers certain powers to regulate traffic on the legislative bodies of cities, villages and towns. Subdivision 1 thereof confers power on such bodies to adopt ordinances prescribing that vehicles shall proceed in one direction only upon certain streets, or that heavy trucks shall be excluded from certain streets. Subdivision 2 authorizes the designation of arterial highways with stop signs on intersecting streets, and subdivision 5 empowers such bodies to pass ordinances adopting the system of pavement markings duly adopted for State highways. Subdivisions 2-a, 2-b and 3 authorize ordinances regulating the crossing of streets by pedestrians, the removal and storage of vehicles parked or abandoned on public highways during snowstorms or other emergencies, and the closing of streets temporarily due to fires or other emergencies. Subdivision 4 contains the omnibus clause pursuant to which it is claimed that power to enact the present ordinance was delegated to the local body. It reads, insofar as material: “ In addition to other powers delegated by this article, and subject to the restrictions hereinafter provided, the legislative body * * * is hereby empowered to make, enforce and maintain such additional reasonable ordinances, rules and regulations with respect to traffic, respectively in such city, or village, or in such town outside of any villages therein and not including state highways maintained by the state therein, as special local conditions may require, and to provide penalties therefor ’ \

This section contains a paragraph stating that Local authorities shall have no power, however, to pass, enforce or maintain any ordinance, rule or regulation inconsistent with the provisions of ” any portion of the Vehicle and Traffic Law. Section 54 states that except as otherwise provided “ local authorities shall have no power to pass, enforce or maintain any ordinance, rule or regulation * * * excluding any such owner, operator or chauffeur from the free use of such public highways ” except speedways which have been set apart by law for that purpose.

Bearing in mind the principle above mentioned that political subdivisions and municipal corporations hold the fee of streets for the benefit of the whole people, it follows that residents of a particular area in a town or village do not possess and cannot be granted proprietary rights to the use of the highways therein in priority to or exclusive of use by the general public. The language just quoted from section 54 of the Vehicle and Traffic Law is merely an expression of this principle. In convicting appellant, the County Court of Nassau County held this ordinance to be invalid to the extent that it purports to prohibit transient ” vehicular traffic in this area, but held that through ” traffic was validly proscribed. We are called upon to determine whether a traffic ordinance is “ reasonable ” within the delegation of power contained in subdivision 4 of section 90, which attempts to prohibit all motor vehicles from entering and leaving in any direction, from any point of origin to any point of destination, an area whose boundaries have been fixed by the local authorities without respect to the size, shape or location of the area on any interurban routes, and without designating any thoroughfares through the area for the purpose of conducting such forbidden traffic. This is a broader power than any of those which are specifically delegated by any of the subdivisions of section 90 of the Vehicle and Traffic Law, and purports to prohibit operators of motor vehicles from the free use of the public highways in the area in contravention of section 54.

If the Legislature intended to confer such power on town or village boards, it did not include it among the enumerated powers in section 90. The draftsman of that section evidently strove to eliminate judicial determinations of invalidity due to failure to include any of the powers specifically delegated. The enumeration of those particular powers would render unnecessary any court actions to determine whether the power to enact ordinances respecting those specific subjects had been intended to be granted by the Legislature. The underlying thought of subdivision 4 appears to have been that by conferring these express powers, it was not meant to limit the generality of the grant of power to adopt such additional reasonable ordinances, rules and regulations as special local conditions might require. Nevertheless, the reasonableness of such additional local enactments or directives may be evaluated and measured by comparing them with the particular powers that were delegated expressly by the other subdivisions. Prohibiting all traffic from passing through any area which the local authorities might define, would involve more drastic restrictions of traffic than anything otherwise authorized by section 90. It would be a more extensive power than excluding heavy trucks from certain streets, leaving open to their use other streets suitable for that purpose, or the designation of one-way streets. The nearest resemblance to any of the enumerated powers is the designation of main arteries for travel, accompanied by the requirement that stop signs be placed upon cross streets. The prohibition of all through traffic from entering a designated area is, however, more severe. The difference is so great that it cannot be said that power to enact this ordinance parallels any of the other powers granted to local authorities by section 90.

The object sought by this ordinance might have been accomplished, to some degree, by establishing arterial highways through this portion of the town or village, and by encouraging through traffic to travel thereon if there were any streets adapted to that object. The only alternate routes suggested by respondent circumvent the area without entering it. One of these suggested routes is considerably longer, and the other, although only two or three blocks more in distance, traverses an inferior pavement full of holes and puddles. Moreover, this area does not appear to be on any particular interurban route to which it is proposed to confine through traffic, but the dominant purpose is to prevent Sperry Gyroscope employees from driving on streets within the area unless they live there. Although the word “ transient was nullified by the County Court, where it appears in the ordinance, that word gives the clue to the object of the whole enactment, which is to reserve the streets for the use of local residents. The elimination of the word * transient ’ ’ by the County Court does not alter the scope of the ordinance, which, as it has been construed and was manifestly intended, remains the same whether the word transient be regarded as in or out of the language employed.

The reason on account of which no arterial highways were created through the area was probably that the map indicates the existence of no thoroughfares adapted to that purpose in this part of the town or village, nor has it been presented that there is any “ through ” traffic of an interurban nature, nor that any problem exists concerning traffic intended to be forbidden except Sperry Gyroscope employees driving to and from their work. If such thoroughfares did exist and had been designated as arterial, and if there were real interurban traffic traversing this area, through traffic would use them, and there would be no problem. Without furnishing a substitute to the Sperry employees or to other members of the public, the local authorities have tried to satisfy complaints from the local residents by a blanket prohibition against all travel through the area, in whatever direction, and wherever destined.

In Associated Transport v. City of Syracuse (274 App. Div. 565, 568) the right of municipalities was recognized to exclude intrastate motor freight carriers from specified streets, but the court said: “ Nevertheless such exclusionary ordinances cannot be adopted arbitrarily or capriciously, but must have some basis of necessity, and usually requires the affording of another route reasonably adequate and useful.” The necessity to furnish a substitute route was recognized in Adley Express Co. v. Town of Darien (125 Conn. 501) where it was held that power had not been delegated by statute to close a street in Darien known as Norot on Avenue to trucks, inasmuch as there was no approach to the Boston Post Road available in Darien except over that thoroughfare. In Commonwealth v. Kennedy (129 Pa. Superior Ct. 149, 158-159) an ordinance was upheld restricting truck routes, the court pointing out that “ 1 There are at least three other routes available to the restricted class for entrance and exit to the City which reach the highway, the entrance of which is barred by the ordinance ’ ” which “ ‘ do not contain the same element of danger, particularly in winter, as the route affected by the ordinance in question.’ ” This differs from the present case, in which no reasonable basis of classification has been formulated in the ordinance in relation to the public safety, convenience or necessity.

A new subdivision was added to section 90 by chapter 746 of the Laws of 1952, as amended by chapter 616 of the Laws of 1953. That was after the ordinance had been adopted whose validity is questioned in this case. Nevertheless, this new subdivision, designated 1-a, is of some significance as indicating that when the Legislature purports to delegate a power to local legislative bodies more nearly resembling that which the Town of North Hempstead attempted to exercise in this case, the power is more carefully circumscribed and limited. The new subdivision 1-a provides that local legislative bodies may by ordinance or regulation establish a system of truck routes, and direct that all trucks in excess of a certain weight shall be excluded from all streets in such city, village or such town outside of any villages therein, except from those streets which form a part of the system of truck routes upon which trucks are permitted to travel and operate ”, unless deliveries are to be made on the prohibited streets. It is further commanded that ‘ ‘ Any system of truck routes established pursuant to the authority contained herein shall provide suitable connection with all state routes entering and leaving such city, village or town.” This subdivision takes account of the circumstance that when the Legislature grants the power to local boards or councils to exclude through traffic on certain streets, it must be incorporated in some plan which contemplates the existence of main thoroughfares, and is designed to enable vehicles passing through to proceed, with the least practical interference with local traffic, to and from their destinations. Without attempting to construe or adjudicate this amendment to section 90 adopted in 1952, which is now subdivision 1-a, it is sufficient to observe that for present purposes the ordinance of the Town of North Hempstead which is under review bears no indication of having been adopted for such a purpose, but rather to have been designed merely to reserve the streets in the area for the use of the local residents to the exclusion of the public at large. To do so would be an unreasonable exercise of power to regulate traffic.

Parenthetically, it may be remarked that the ordinance speaks of this area as being situated in New Hyde Park, which is a village within the town of North Hempstead. The regulation of the use of streets in a village, of course, could not be assumed by the town board of the town in which the village is situated. In villages, the power to regulate the use of streets is confided to the village board (Village Law, § 89, subd. 44). The powers delegated to local authorities by section 90 of the Vehicle and Traffic Law, with which we are immediately concerned, are delegated to “ The legislative body of a city, village, town of the first class or town of the second class ”, which means to such bodies respectively having jurisdiction over the area involved. Subdivision 4, which is the paragraph relied upon to enable this ordinance, speaks of empowering the several local authorities to regulate traffic “ respectively in such city, or village, or in such town outside of any villages therein ”. The last phrase renders explicit that whatever power is conferred upon town boards by this section is limited to local legislation respecting areas in towns outside of villages. The Town of North Hemp-stead could not legislate in this respect for territory situated within a village, if this area be situated in the village of New Hyde Park, but no point has been made of this in the record or in the briefs, and, for that reason our decision has not been placed upon that ground. By not raising the question, counsel appear to have assumed that the area in question is outside of the village.

The judgments should be reversed, and the information dismissed.

Lewis, Ch. J., Conway, Desmond, Dye, Fuld and Froessel, JJ., concur.

Judgments reversed, etc.


author: Conway, J. Lewis, Ch. J.

text:
    The People of the State of New York, Respondent, v. Eric C. Ressanen, Appellant.
    Argued October 21, 1953;
    decided January 21, 1954.

      Henry W. Schober for appellant.
    The proof negated any violation. (Meltzer v. Koenigsberg, 302 N. Y. 523; Gilsey Bldgs. v. Village of Great Neck Plaza, 170 Misc. 945; People v. Deth

      loff, 283 N. Y. 309; Mullins v. People, 24 N. Y. 399; Smith v. People, 47 N. Y. 330; People v. Ryan, 274 N. Y. 149; Matter of Terry, 218 N. Y. 218; Salsbury v. United Parcel Service, 203 Misc. 1008; Harnik v. Levine, 202 Misc. 648.)

      T. Vincent Quinn, District Attorney (Benj. J. Jacobson of counsel), for respondent.
    Defendant came within the statutory prohibition of double parking. (Harnik v. Levine, 202 Misc. 648.)
   Conway, J.

Defendant was charged with violating subdivision (o) of section 10 of article 2 of the Traffic Regulations of the City of New York in that “ on May 6th, 1952 between 12:35 P.M. and M., the defendant * * * did park a vehicle * * * On the roadway side of a vehicle stopped or parked at the edge or curb of a street. (Double parking) ”.

The facts are not in dispute. The police officer who issued the summons to defendant was the only one to testify. He stated that on May 6, 1952, at about 12:35 p.m. defendant “ drove up and double parked [his Mack truck] in front of 132-06 Crossbay Boulevard.” On the defendant’s offer of proof the court found that the space available for defendant’s truck alongside the curb, during the time defendant was engaged in unloading, was not sufficiently long for him to occupy, even though a space had been created by a vehicle which had been parked at the curb and had moved away while defendant was delivering his merchandise. It was conceded that the defendant had not received permission from the police officer to place his truck at an angle to the curb in the limited space available. The police officer testified, however, that defendant was, at the time he was given the summons, ‘ ‘ unloading his truck ’ ’ in the course of making a delivery and, further, that “ traffic continued to move along the boulevard ” while defendant’s truck was in the position described by him. There was no charge here of traffic obstruction (N. Y. City Traffic Regulations, art. 9, § 121) and consequently we are not concerned with and do not consider that problem. The sole issue presented is whether, on the undisputed facts herein, defendant was properly convicted of violating subdivision (o) of section 10 of article 2 of the regulations which provides:

“Article 2 Parking

Section 10. No person shall park a vehicle: * * * (o) On the roadway side of any vehicle stopped or parked at the edge or curb of a street. (Double parking.) ”

In order to determine whether that article has been transgressed it is necessary to ascertain what meaning has been ascribed to the word park ” as it appears therein. No definition is to be found in article 2 itself. However, paragraph (a) of subdivision 17 of section 1 of article 1 — which is entitled “ Definitions ”— declares:

“ The following terms when used in these regulations unless otherwise expressly stated, or unless the context or subject matter otherwise requires, shall be deemed to mean and include: * * *

“17. ‘ Park, parking, or parked ’ shall mean the stopping or standing of a vehicle, whether occupied or not, except as follows: (a) When actually and expeditiously engaged in loading or unloading merchandise ”.

It is not questioned that defendant was actually and expeditiously engaged in unloading merchandise. Therefore, he was without the operation of the regulation prohibiting double parking unless it can be said that there has been demonstrated an intent to confer upon the word “ park ” as used in subdivision (o) of section 10 of article 2 a different meaning than that given to it in paragraph (a) of subdivision 17 of section 1 of article 1 quoted above.

It has not been expressly declared that either the term “ park ” or “ parking ” as used in subdivision (o) of section 10 of article 2 is to include a vehicle which is stopped or standing even though actually and expeditiously engaged in loading or unloading merchandise. Does the context or subject matter of subdivision (o) of section 10 of article 2 require us to conclude that it was so intended? That is, does the word double ” change entirely the meaning of the word “ parking ” which it modifies? We find nothing in subdivision (o) of section 10 of article 2 to justify such a conclusion. Article 2 is entitled simply “ Parking ”. There is no reference to “ Double Parking ” in the heading. Section 10 thereof enumerates situations under which a person shall not “ park a vehicle.” Subdivision (o), with which we are concerned, provides that “No person shall park a vehicle * * * On the roadway side of any vehicle stopped or parked at the edge or curb of a street.” Following those words there appear in parentheses the words “ Double parking.” That is the only place in the article where that phrase is found. Certainly unless there is “ parking ” there cannot be “ double parking ”. It may well be that the single word “ park ” implies the setting at rest of a vehicle either parallel to or diagonally against the curb whereas “double park ” is generally understood to refer to a vehicle set at rest alongside another standing vehicle. But, that does not change the fact that the word “ parking ” is contained within the phrase “ double parking”. The regulation has been drawn to define in the clearest of terms the words “ park ”, “ parked ” and “ parking ” and excludes the vehicles of persons actually and expeditiously engaged in loading or unloading merchandise. It seems a matter of logic to say that if one’s vehicle is not “ parked ”, as that term has been defined in the regulation, one’s vehicle is not “ double parked ”. There is no question but that by the terms of article 1 of the Traffic Regulations defendant’s vehicle was not “ parked ” and thus it was not “ double parked ”.

The District Attorney’s fear that a holding that this defendant was not double parked will enable persons legally to triple park or even park in the center of the street and thereby effectively tie up all traffic is without substance since there is a Traffic Regulation prohibiting traffic obstruction (art. 9, § 121).

The judgments should be reversed, the information dismissed and the fine remitted.

Lewis, Ch. J.

(dissenting). The single question presented by this appeal is whether the provision contained in Article 1, § 1, subd. 17(a) of the Traffic Regulations of the City of New York — which section defines the words “ park, parking or parked ” and expressly excludes from such definition a vehicle 11 when actually and expeditiously engaged in loading or unloading merchandise” — also excludes vehicles, so engaged, from the prohibition of Article 2, § 10(o) against “ double parking.” As those two provisions of the regulations — quoted in full in the majority opinion — are inconsistent, our problem is one of interpretation.

I find it difficult to agree with the view of the majority that the regulatory authorization, mentioned above, which grants to persons loading or unloading merchandise expeditiously the right to park where others may not park — viz., where signs prohibit parking in front of driveways, or within fifteen feet of a crosswalk or safety zone (see art. 2, § 10, subds. [e], [f], [g] and [i]), or for more than the alloted time (id. subds. [a], [b] and [c]) — also serves to permit such person to “double park.” While it is obvious that the word “park ” is a component part of the phrase “ double park”, it is my view that the contextual use to which the word “ double ” is put in that phrase changes entirely the meaning of the word park ” which it modifies. Thus the clear implications attaching to the single word “ park” do not apply to the phrase “ double park.” In its normal connotation, the single word “parked,” as found in the context of each of the regulations with which we are here concerned, refers to a vehicle when at rest parallel to and close to the right curb (art. 2, § 10, subd. [d]). Different is the reference to a “ double parked ” car which is expressly stated to be a vehicle set at rest “ On the roadway side of any vehicle stopped or parked at the edge or curb of a street ” (art. 2, § 10, subd. [o]).

While Article 1, § 1, subd. 17(a) authorizes a vehicle, actually engaged in loading or unloading merchandise, to park (i.e. to be set at rest parallel or at an angle to the curb) in locations where, or at hours of the day when, other vehicles may not lawfully do so, it does not, in my opinion, authorize a vehicle to “ double park ” (i.e. to park, not next to the curb, but on the roadway side of another vehicle already parked).

It is suggested that if defendant’s vehicle was double parked in such a position as to block traffic, then the operator could have been convicted of a violation of section 121 of article 9 of the regulations, which prohibits a vehicle from obstructing traffic. However, the present case furnishes precisely the answer to that suggestion: Defendant concededly was not, at the time he was served with summons, obstructing traffic and therefore was not violating section 121 of article 9.

The ban against double parking was obviously interposed as a measure to prevent obstruction of traffic, violation of that provision (id. art. 9, § 121) being in itself an offense. In other words, when obstruction of traffic occurs, section 121 of article 9 is violated; likewise a car parked on the roadway side of any vehicle which is parked at the edge or curb of a street is in violation of the double parking ” ban (art. 2, § 10, subd. [o]). The two offenses are not necessarily merged, and defendant was properly convicted for violating the double parking ban.

Concluding, as I do, that the Traffic Regulations involved have received proper interpretation by the courts below, I dissent and would affirm the judgment under review.

Fuld, Froessel and Van Voorhis, JJ., concur with Conway, J.; Lewis, Ch. J., dissents in opinion in which Desmond and Dye, JJ., concur.

Judgments reversed, etc.


author: Lewis, Ch. J.

text:
    Angeline Canepa, as Guardian ad Litem for John Canepa, Jr., an Infant, Appellant, v. State of New York, Respondent. John Canepa, Sr., Appellant, v. State of New York, Respondent. Joseph I. Gorin, as Limited Administrator of the Estate of Nelson M. Gorin, Deceased, Appellant, v. State of New York, Respondent.
    (Claim No. 29875.)
    (Claim No. 29866.)
    (Claim No. 30116.)
    Argued November 17, 1953;
    decided January 22, 1954.

      Arthur VD. Chamberlain for Angeline Canepa and another, appellants.
    I. Findings of fact not specifically disapproved or reversed by the Appellate Division are presumed to have been affirmed and are conclusive in the Court of Appeals. (Matter of Edge Ho Holding Corp., 256 N. Y. 374.) II. The Appellate Division erred in reversing the findings of the trial court to the effect that Gerald Cramer, the driver, was not guilty of contributory negligence and in making a new finding to the effect that he was guilty of the only negligence which was the proximate cause of the accident. III. The finding made by the Appellate Division that the State of New York was not guilty of any negligence which caused or contributed to the accident finds no support in the record. (Quality Motors of Rochester v. [American] Lumbermen’s Mut. Cas. Co., 256 App. Div. 892, 280 N. Y. 771; Chamberlain v. Feldman, 300 N. Y. 135; Ziehm v. State of New York, 270 App. Div. 876; LeBoeuf v. State of New York, 169 Misc. 372, 256 App. Div. 798; Garrette v. State of New York, 197 Misc. 842; Juliano v. State of New York, 190 Misc. 180; Doulin v. State of New York, 277 N. Y. 558; Barna v. State of New York, 267 App. Div. 261, 293 N. Y. 877; Dawley v. State of New York, 186 Misc. 571; Trimble v. State of New York, 263 App. Div. 233; Laitenberger v. State of New York, 190 Misc. 633, 273 App. Div. 942; Neddo v. State of New York, 194 Misc. 379, 275 App. Div. 492; Van de Walker v. State of New York, 278 N. Y. 454; Torrey v. State of New York, 266 App. Div. 900; Foley v. State of New York, 177 Misc. 443, 265 App. Div. 682; Croniser v. State of New York, 195 Misc. 576; Stern v. International Ry. Co., 220 N. Y. 284; Thompson v. State of New York, 154 Misc. 707; Gastel v. City of New York, 194 N. Y. 15; Foley v. State of New York, 279 App. Div. 954.)

      Seymour Bernstein for Joseph
    I. Gorin, appellant. I. The Appellate Division erred in reversing the judgment in favor of claimant-appellant. (Ziehm v. State of New York, 270 App. Div. 876; LeBoeuf v. State of New York, 169 Misc. 372, 256 App. Div. 798; Garrette v. State of New York, 197 Misc. 842; Juliano v. State of Neto York, 190 Misc. 180; Doulin v. State of New York, 277 N. Y. 558.) II. The Appellate Division erred in making a new finding to the effect that the sole cause of this accident was the negligence of Gerald Cramer.

      Nathaniel L. Goldstein, Attorney-General (Henry S. Manley and Wendell P. Brown of counsel), for respondent.
    I. The curve was adequately signed and anyway the alleged inadequacy did not affect Cramer. (Piragnoli v. State of New York, 280 App. Div. 849, 305 N. Y. 586; Quality Motors of Rochester v. [American] Lumbermen’s Mut. Cas. Co., 280 N. Y. 771.) II. The automobile was driven negligently. III. Negligence, whether of Canepa, Jr., or Cramer, defeats both Canepa claims. (Mills v. Gabriel, 259 App. Div. 60, 284 N. Y. 755; Buckin v. Long Is. R. R. Co., 286 N. Y. 146; Good Health Dairy Products Corp. v. Emery, 275 N. Y. 14; Van Blaricom v. Dodgson, 220 N. Y. 111; McCrossen v. Moorhead, 205 App. Div. 497, 236 N. Y. 644; People v. Gillette, 172 Misc. 847; People v. Gray, 191 Misc. 541; Ferris v. Sterling, 214 N. Y. 249; Bennrona Corp. v. Mulroney, 254 App. Div. 630; Juliano v. State of New York, 190 Misc. 180, 273 App. Div. 936; Gochee v. Wagner, 257 N. Y. 344.) IV. If the decision of the Appellate Division is reversed the judgments of the Court of Claims should not be reinstated. Certain errors require new trial. (Flansburg v. Town of Elbridge, 205 N. Y. 423; Heimer v. Stento, 270 App. Div. 665; Wesley v. State of New York, 272 App. Div. 990; Psota v. Long Is. R. R. Co., 246 N. Y. 388.)
   Lewis, Ch. J.

These three claims against the State arise from an automobile accident which occurred on Route 96 at a point in Ontario County near Manchester, where that highway crossed the right of way of the Lehigh Valley Railroad by means of an overgrade bridge. It was stipulated that Route 96 is maintained by the State under its patrol system.

Claimants alleged, and the Court of Claims found, that the accident was not due to contributory negligence but was caused by the State’s negligence in failing to maintain Route 96 at the site of the accident in a condition reasonably safe for vehicular traffic.

At the Appellate Division the judgment entered on each claim was reversed on the law and facts and each claim was dismissed; findings by the Court of Claims that the driver of the car involved in the accident was not guilty of contributory negligence, and that the failure of the State to provide proper warning was the proximate cause of the accident, were disapproved and reversed, and the following new findings of fact were made: 1.— That the State was not guilty of negligence which caused or contributed to the accident. 2.— That the negligence of the driver was the sole proximate cause of the accident.

The order of the Appellate Division in each claim, aside from reversing the two Court of Claims findings mentioned above, made no reference to other findings by the Court of Claims. In the present case, although findings of fact by the Court of Claims, which stand unreversed by the Appellate Division and are supported by substantial evidence, are conclusive upon us, we have the right to review the new findings by the Appellate Division and reverse them, if, in our opinion, they are not supported by the weight of evidence. We have no power in any other respect to pass upon questions of fact. (Harrington v. Harrington, 290 N. Y. 126, 130, 131.)

The accident occurred at about one o’clock in the morning of April 22, 1949, when a Ford car owned by the claimant John Oanepa, Sr.,— then being driven by Gerald Cramer — in which the claimant John Canepa, Jr., the decedent Nelson Gorin and another were passengers, was proceeding easterly along Route 96 approaching the village of Manchester. As liability in this case depends upon whether the State’s maintenance of Route 96 at and near the site of the accident had made that highway reasonably safe for vehicular traffic (Doulin v. State of New York, 277 N. Y. 558), we may gain from the unreversed findings by the Court of Claims facts descriptive of the physical conditions— the alignment and grade of the highway and the traffic signs — existing at the place where and the time when the accident occurred. From those unreversed findings, supported by substantial evidence, it appears that Route 96 — a macadamized highway twenty feet in width — is straight and practically level for a distance of several miles west of the bridge whereby the highway is carried over the Lehigh Valley Railroad right of way which lies north of and parallel to the roadway. At a point two hundred feet west of the bridge structure the width of the highway is increased to about thirty feet for a distance of approximately one hundred and thirty-eight feet, beyond which — to the east — the roadway narrows gradually until it enters the bridge which affords a roadway width of only twenty feet. Within that same two hundred feet immediately west of the bridge, the highway ascends at a grade of 4% to reach the level of the bridge floor and within that saíne distance the highway curves first to the right or south through an angle of about six degrees and then to the left or north through a total angle of about eighty degrees which ends at the southerly entrance to the railroad overpass.

To warn drivers of east-bound vehicles approaching the upgrade curves mentioned above, the State had erected two ordinary reflectorized Slow ” signs, one about two hundred thirty feet west and one about one hundred fifty feet east of the beginning of the first curve. Although there was evidence that a third sign had been erected further west of the first curve, the Court of Claims regarded that evidence as “ inconclusive ” and stated “ * * * we are unconvinced as to the existence or location of such a sign.” (203 Misc. 694, 697.) There were no signs warning that a railroad bridge would be encountered at the far end of the second and more abrupt of those curves.

As the car involved in the accident approached that location where the conditions described above prevailed, the road surface was dry, visibility was good and the car was being operated with its headlights at high beam. Although there is no testimony that the speed of the car at that time and place was excessive, it failed to pass safely around the second or more easterly of the two curves and ran into the right guardrail at a point on the outside of that curve near the south entrance to the railroad overpass, causing the death, the bodily injuries and the property damage which befell the claimants.

We think the weight of evidence is opposed to the findings by the Appellate Division: (1) That the State was not guilty of negligence which caused or contributed to the accident, and (2) that the negligence of the driver of the car was the sole proximate cause of the accident. On the contrary we conclude, as did the Court of Claims, that the weight of evidence established negligence by the State in failing — by signs adequate in number and placement, and appropriate in design — to give a timely warning to the driver of the ill-fated car that he was approaching a segment of Route 96 where lurked uncommon danger. Such we believe was the State’s duty in the circumstances disclosed by this record. (Doulin v. State of New York, 277 N. Y. 558, supra; Van de Walker v. State of New York, 278 N. Y. 454; Barna v. State of New York, 267 App. Div. 261, affd. 293 N. Y. 877; Le Boeuf v. State of New York, 169 Misc. 372, affd. 256 App. Div. 798, affd. 281 N. Y. 737, and Ziehm v. State of New York, 270 App. Div. 876.) Such breach of duty is made actionable by the State’s waiver of immunity from liability by section 8 of the Court of Claims Act. (Jackson v. State of New York, 261 N. Y. 134, 137-138; Foley v. State of New York, 294 N. Y. 275, 279-280.)

Accordingly, the judgments entered upon the orders of the Appellate Division should be reversed, and the judgments of the Court of Claims affirmed, with costs in this court and in the Appellate Division.

Conway, Froessel and Van Voorhis, JJ., concur with Lewis, Ch. J.; Desmond, Dye and Fuld, JJ., dissent and vote to affirm on the ground that there is in this record no proof of any actionable negligence of the State of New York.

Judgment accordingly.


author: Conway, J.

text:
    In the Matter of the City of New York, Acting for and on Behalf of the New York City Housing Authority, Appellant, Relative to Acquiring Title to Real Property within the Area Bounded by East 112th Street and Other Streets, in the Borough of Manhattan, Selected as a Site for Jefferson Houses. Henry Lombardi, Respondent.
    Argued November 23, 1953;
    decided February 25, 1954.

      Denis M. Hurley, Corporation Counsel (Benjamin Offner, Harry E. O’Donnell and Reuben Levy of counsel), for appellant.
    I. The court at Special Term erred in refusing to take testimony with respect to the rights of the parties under the contract of sale. (Matter of City of New York, [Schurz Ave.], 278 App. Div. 309; Matter of Smith [Northern Blvd.], 244 App. Div. 733, 268 N. Y. 726; Matter of City of New York [Harlem Riv. Drive], 303 N. Y. 828; Matter of City of New York [Neptune Ave.], 271 N. Y. 331; Matter of City of New York [Houghton Ave.], 266 N. Y. 26; Matter of City of New York [Cropsey Ave.], 268 N. Y. 183; Matter of City of New York [West 205th St.], 245 N. Y. 497; Matter of City of New York [165th St.], 258 N. Y. 42.) II. The New York City Housing Authority, as vendee, was the equitable owner of the property by virtue of the contract of sale. (Clarke v. Long Is. Realty Co., 126 App. Div. 282; Matter of City of New York [Edgewater Road], 138 App. Div. 203, 199 N. Y. 560.)

      Merle I. St. John, Edwin C. Hamburg and Morris T. Hamburg for respondent.
    I. The condemnation court was correct in refusing to take jurisdiction to determine the validity of the alleged contract, because its jurisdiction is limited. (Matter of City of New York [East Riv. Drive], 159 Misc. 741, 259 App. Div. 1007, 284 N. Y. 818; Waldo v. Schmidt, 200 N. Y. 199; Matter of Culver Contr. Corp. v. Humphrey, 268 N. Y. 26; Matter of Poughkeepsie Bridge Co., 108 N. Y. 483; Matter of Willcox [Fourth Ave. Subway], 213 N. Y. 218.) II. The claim of the New York City Housing Authority to be the equitable owner of the award for Damage Parcel No. 67, by virtue of the alleged contract, falls because no valid contract has been proven, and the validity of the alleged contract has been disputed. (Williams v. Haddock, 145 N. Y. 144.) III. Respondent would have been deprived of a jury trial had the condemnation court taken jurisdiction of the issue of the validity of the alleged contract.
   Conway, J.

In March, 1951, the board of estimate of the City of New York (hereinafter referred to as City) adopted a resolution authorizing proceedings to acquire land necessary for a contemplated Federally aided low-rent public housing development. The resolution provided for the acquisition of title by the City in behalf of the New York City Housing Authority (hereinafter referred to as Authority) and for the determination of the compensation to be paid therefor by the Supreme Court without a jury.

It is undisputed that early in 1951 an agent of the Authority negotiated with the respondent owner for the purchase of the land here in question and that an agreement was signed by respondent in February and approved and signed by the Authority in March, 1951. Subsequently in April, 1951, title to the parcel vested in the City (Administrative Code of City of New York, § B15-36.0).

The closing date was May 3, 1951, and the agreement of purchase contained a provision that the acquisition of the premises by eminent domain by the Authority or the City on behalf of the Authority prior thereto would not affect the validity of the agreement but that, in such event, on the closing the seller would be obligated to execute and deliver to the Authority an assignment of any award therefor, in addition to any other instruments required to be executed by the seller under the agreement.

On the condemnation trial the City sought to prove the contract of sale and it was received in evidence. The City claimed that it was the equitable owner of the parcel and so entitled to the award subject to the performance of the contract of purchase. The owner on the other hand stated that he had no objection to the determination by the court “ as to who the owner of this parcel is ” but that the contract of sale never had valid existence because it was subject to a never fulfilled condition precedent and in addition was tainted with fraud.

The learned Trial Justice was of the opinion that the only questions upon which he might properly pass were as to the legal ownership of the property, and to whom an award might be made as such legal owner. He declined to pass upon the validity of the contract of sale or the claim of the City to be the equitable owner of the parcel on the theory that those matters were not before him in the condemnation proceeding. We think that this was too narrow a construction of the provisions of the Administrative Code and the order of condemnation.

Section 1445 of the Greater New York Charter (added by L. 1915, eh. 596) as incorporated by chapter 929 of the Laws of 1937 in the Administrative Code of the City of New York (§ B15-12.0, subd. b) as it existed at the time of the trial, reads as follows: * ‘ Where the title of the claimant is disputed it shall be the duty of the court to determine the ownership of such real property upon the proof submitted to the court during the trial of the proceeding. The court shall also have power to determine all questions of title incident to the trial of the proceeding.” (Emphasis supplied.)

The question, therefore, is whether the vendee under an executory contract to purchase land is an “ owner ” having some form of recognizable interest in the “ real property ” involved in the proceeding. Both the old Greater New York Charter (§ 1431) and the present Administrative Code (§ B151.0) contain definitions of the key words used in the foregoing quoted section. Thus the term “ owner ” is defined as “ [a] person having an estate, interest or easement in the real property being acquired or a lien, charge or encumbrance thereon.” (Administrative Code, § B15-1.0, subd. 5; emphasis supplied.) There is also the following definition (Administrative Code, § B15-1.0, subd. 6): “ ‘ Real property Includes all lands and improvements * * * all easements and hereditaments, corporeal or incorporeal, and every estate, interest and right, legal or equitable, in lands or water, and right, interest, privilege, easement and franchise relating to the same, including terms for years and liens by way of judgment, mortgage or otherwise. ’ ’ (Emphasis supplied.)

By its contract — if it was valid — the Authority here acquired the equitable title to the real property prior to the time title vested. It obtained an interest in the land of such a nature that the only estate remaining in the vendor was a lien for the purchase money, to secure the payment of which he retained the bare legal title. Although, if the contract be established, the Authority doubtless has a claim under it to the assignment of any award that may be made, its position does not rest upon such claim, but rather upon the equitable title which passed to it as vendee of the land. It is an interest in real property which is in issue, and not a personal right or claim to an award, after it is made, against the contract vendor.

With the passage of years, the statutes have been renumbered, revised and amended but it has not been made to appear that the interests cognizable by the Supreme Court sitting in condemnation proceedings have been limited thereby. Bather it would appear that, by the very language used in defining the interests which make one an owner ” of real property ”, the Legislature intended to include as many of those different interests in real property affected by the condemnation proceedings as possible. If such be not the case, then it was a useless effort to use the language previously quoted from the statute: “ every estate, interest and right, legal or equitable.” To take that view would tend to restrict the interests in real property which a condemnation court could pass upon, thereby leaving the parties to seek their remedies in other tribunals. That would result in delay of justice, multiplicity of actions, congestion of already crowded calendars, and insecurity for the parties. Far better is it — and, as we view the laws, consistent with the intent of the Legislature as expressed in the words of the statutes — to permit one court, having the parties then present before it and ready — as in the present case — to submit their controversy to that court, to settle all questions of “ ownership ” or “ real property ” as defined in the Administrative Code and finally determine to whom the award or awards should be mudOi

Cases such as Matter of City of New York (East Riv. Drive) (159 Misc. 741, 757, affd. 259 App. Div. 1007, motion for leave to appeal denied 284 N. Y. 818), where the question presented was one of damages arising out of a contract at the date of the termination of a lease and which existed irrespective of condemnation, and cases such as Matter of Culver Contr. Corp. v. Humphrey (268 N. Y. 26, 33-34), Matter of Poughkeepsie Bridge Co. (108 N. Y. 483), and Matter of Willcox (Fourth Ave. Subway) (213 N. Y. 218), where the condemnation proceedings were under statutes other than the Administrative Code of the City of New York and which statutes did not contain the definitions in the Administrative Code are, of course, inapplicable. The condemnation statute is the measure of the court’s jurisdiction. (Matter of Culver Contr. Corp. v. Humphrey, supra.) The order of condemnation here provided for the ascertainment of just compensation for ‘ ‘ the respective owners of the real property to be acquired ”. The statute (Administrative Code, § B15-12.0, subd. b) and the order thus reposed in the condemnation court the power and duty of determining the rights of the respondent property owner vis-a-vis the Authority and City.

Finally it is urged that, if the condemnation court attempted to determine those rights in this proceeding by determining the issues of fraud and conditional delivery, the respondent would be deprived of his right to a jury trial. (See Civ. Prac. Act, § 425.) It was emphasized upon the argument and in the briefs that the respondent offered in open court to litigate the validity of the contract and the claim thereunder. That was a waiver of his right to a jury trial. (Baird v. Mayor of City of N. Y., 74 N. Y. 382, 386; Matter of New York, L. & W. R. R. Co., 98 N. Y. 447, 453 ; 4 Carmody on New York Practice, p. 2665.)

The order of the Appellate Division and the decree of Special Term, insofar as they relate to the parcel of land in question (Damage Parcel 67), should be reversed, and the proceeding remitted to Special Term for further proceedings not inconsistent with the" opinion herein, with costs to abide the event.

Lewis, Ch. J., Desmond, Dye, Ftjld, Froessel and Van Voorhis, JJ., concur.

Order reversed, etc.


author: Van Voorhis, J. Dye, J.

text:
    Evangeline Sease, Respondent, v. Central Greyhound Lines, Inc., of New York, Appellant.
    Argued November 18, 1953;
    decided February 25, 1954.

      William E. Night for appellant.
    I. The Civil Practice Act and the Stock Corporation Law prescribe the manner in which an action may be instituted against a domestic corporation. (Merrick v. Van Santvoord, 34 N. Y. 208.) II. The court is •without jurisdiction unless service is made in accord with the methods prescribed by statute. (Fischer v. Langbein, 103 N. Y. 84; Eisenhofer v. New York Zeitung Pub. & Print. Co., 91 App. Div. 94; Baker v. New York Central R. R. Co., 258 App. Div. 854; Kuris v. Pepper Poultry Co., 174 Misc. 801.) III. Defendant-appellant is not subject to service under section 52 of the Vehicle and Traffic Law. (Douglass v. Phenix Ins. Co., 138 N. Y. 209; Schoen v. Board of Educ., Cambridge School Dist. No. 10, 274 App. Div. 682; Wachtel v. Diamond State Eng. Corp., 215 App. Div. 15; Morris Plan Co. of Buffalo v. Miller, 102 Misc. 470.) IV. There is no legal or factual basis to give the court jurisdiction of the action by estoppel. (Seafire, Inc., v. Ackerson, 193 Misc. 965, 275 App. Div. 717, 302 N. Y. 668; Lynn v. Lynn, 302 N. Y. 193; Seltzer v. Baker, 295 N. Y. 145; Metropolitan Life Ins. Co. v. Childs Co., 230 N. Y. 285; Thompson v. Simpson, 128 N. Y. 270; Klein v. Biben, 185 Misc. 835, 270 App. Div. 885, 296 N. Y. 638; Yancey v. Andrews, 195 Misc. 336.)

      Charles J. Bellew for respondent.
    I. For the purposes of section 52 of the Vehicle and Traffic Law, a corporation may be a resident of a State other than the State of its incorporation. (International Milling Co. v. Columbia Co., 292 U. S. 511; Uslan v. Woronoff, 173 Misc. 693, 259 App. Div. 1093.) II. The correct corporation was, in fact, served with due process. (Shushereba v. Ames, 255 N. Y. 490; Kimball v. Midwest Haulers, 195 Misc. 231.) III. Appellant’s affirmative act of misleading respondent should estop it from attacking the manner of service. (Shuba v. Greendonner, 271 N. Y. 189.)
   Van Voorhis, J.

This appeal involves a motion to vacate the service of a summons. Defendant is a domestic corporation, but has been served in the manner provided by section 52 of the Vehicle and Traffic Law for service upon a foreign corporation. The motion to vacate the service of the summons has been denied upon the ground that defendant is estopped to deny that it is an Ohio corporation.

The statement to plaintiff’s attorney by the assistant manager of defendant’s Binghamton office is insufficient on which to found an estoppel. He stated, according to plaintiff’s lawyer, that defendant’s name and address was Central Greyhound Lines, Inc., of New York, with offices at 2600 Hamilton Avenue, Cleveland, Ohio. That statement was entirely correct. It is incorporated in New York, and has offices in Cleveland, Ohio. Nothing contained in this statement tended to deceive plaintiff’s attorney in respect of the State of incorporation.

The natural source of information which would be sought in order to commence an action against such a defendant, was the application for omnibus registration which it was required by law to file with the New York State Bureau of Motor Vehicles. It is generally recognized that a corporation, like an individual, may have a place of residence other than its domicile. Corporations often have their principal places of business outside of the State of incorporation. The domicile of a corporation is the State in which it is incorporated. Possibly if defendant had merely listed Cleveland, Ohio, as its place of residence on its application for registration to the Commissioner of Motor Vehicles, this would have been equivalent to stating that it was an Ohio corporation. Although the application made by this defendant did state that the residence and business address of defendant was 2600 Hamilton Avenue, Cleveland, Ohio, it also set forth in the clearest possible terms that it was incorporated under the laws of New York. On the application the printed question is asked: “ If corporation, in what State incorporated? ” The words <l New York ” are typed on the line in answer to this question. It is difficult to understand how defendant could more clearly or accurately have stated the situation than this.

The report of the accident made by the Sheriff of Broome County and on file in his office is not binding on defendant, and does not furnish a basis on which to found an estoppel. The same is true of the message sent over the teletype by the State Police concerning the registration with the Motor Vehicle Bureau. Defendant has been shown to be guilty of no misrepresentation. The information which it supplied to the Bureau of Motor Vehicles in filling out its blanks was accurate and correct, as stated above. Facts have not been shown indicating any change of position on defendant’s part, nor is there anything in the record on which an estoppel could be based.

Being a New York corporation, it could not be served with process in the manner provided for service upon foreign corporations by section 52 of the Vehicle and Traffic Law.

The order of the Appellate Division and that of Special Term should be reversed, with costs in all courts, defendant’s motion to vacate the service of summons granted, and the question certified answered in the affirmative.

Dye, J.

(dissenting). I dissent and vote to affirm and to answer the question certified in the negative on the ground that the defendant is estopped to deny the sufficiency of the service of the summons as made herein. True it is that the defendant is a New York corporation yet, for purposes of bringing a suit against it, that circumstance must be considered in light of defendant’s conduct in the premises. It maintains its principal place of business in Ohio and for all intents and purposes, including the service of process, was a resident of Ohio (cf. International Milling Co. v. Columbia Transp. Co., 292 U. S. 511). Registration of motor vehicles in compliance with the statute is required for purposes of facilitating identification of the owner by the police and the public (Vehicle and Traffic Law, § 11, subd. 1). Here the information furnished identified the defendant’s residence and principal place of business in Ohio. To permit it to deny the consequence of such representation in order to avoid liability for a negligent act committed in this State would be contrary to public policy and should be disapproved (Reese v. Reamore, 292 N. Y. 292).

Lewis, Oh. J., Fuld and Froessel, JJ., concur with Van Voorhis, J.; Dye, J., dissents in opinion in which Conway and Desmond, JJ., concur.

Orders reversed, etc.