author: Fuld, J. Cowway, J.

text:
    In the Matter of the Application of Arthur B. Currier, Respondent. Woodlawn Cemetery, Appellant.
    Argued November 14, 1949;
    decided December 29, 1949.

      Edward I. Devlin, Jr., for appellant.
    The desire of decedent to be interred in the mausoleum which she erected should be respected. (Matter of Eichner, 173 Misc. 644; Matter of Scheck, 172 Misc. 236; Matter of Johnson, 169 Misc. 215; Matter of Smith v. Green-Wood Cemetery, 173 Misc. 215; Matter of Herskovits [Herman], 183 Misc. 411; Matter of Ackermann, 124 App. Div. 684; Matter of Donn, 14 N. Y. S. 189; Lowrie v. Plitt, 11 Phila. 303; Yome v. Gorman, 242 N. Y. 395; Matter of Schechter, 261 App. Div. 926; Matter of Bobrowsky, 266 App. Div. 849.)

      Max Epstein for respondent.
    The granting of the application rested in the sound discretion of Special Term and the exercise of said discretion, having been aErmed by the Appellate Division, will not be reviewed by the Court of Appeals. (Matter of Schechter, 261 App. Div. 926; Matter of Bobrowsky, 266 App. Div. 849; Raisler v. Krakauer Simon Schreiber Congregation, 47 N. Y. S. 2d 938; Matter of Bauer, 36 Misc. 33; Matter of Plancher, 37 N. Y. S. 2d 87; Matter of Katz, 167 Misc. 301; Yome v. Gorman, 242 N. Y. 395; Matter of Baltimore Mail S. S. Co. v. Fawcett, 269 N. Y. 379; Nann v. Raimist, 255 N. Y. 307; Harriss v. Tams, 258 N. Y. 229.)
   Fuld, J.

The courts below have granted petitioner permission to remove his mother’s body from a mausoleum in Woodlawn Cemetery to a grave in a lot nearby. Whether that determination exceeds the bounds of permissible discretion is the question for decision.

Mrs. Margaret Currier had purchased the burial lot a few months before acquiring the land on which she later erected the mausoleum, and it was in that structure that she was interred when she died some twenty years ago. It was her hope that in time her children, a son and two daughters, would be laid to rest beside her in the tomb. However, the daughters, married and living in Missouri, have made arrangements to be buried in that state, and her son has expressed the intention of being interred in a grave in the adjacent lot. Early in 1949, the children sought to have their mother’s body transferred to this plot from the mausoleum, but the corporation operating the cemetery refused its consent. Its refusal necessitated the son’s application to the courts under section 89 of the Membership Corporations Law. That section provides that, if either the owners of the plot, or the surviving wife, husband, children or parents, or the cemetery corporation withhold consent to the removal of the body, ‘ ‘ permission by the county court of the county, or by the supreme court in the district, where the cemetery is situated, shall be sufficient.”

The quiet of the grave, the repose of the dead, are not lightly to be disturbed. Good and substantial reasons must be shown before disinterment is to be sanctioned. (See Yome v. Gorman, 242 N. Y. 395,403; Matter of Achermann, 124 App. Div. 684, 685.) While the disposition of each case is dependent upon its own peculiar facts and circumstances and while no all-inclusive rule is possible, the courts, exercising a “ benevolent discretion ”, will be sensitive to all those promptings and emotions that men and women hold for sacred in the disposition of their dead ”. (Yome v. Gorman, supra, 242 N. Y., at p. 402.) And looming large among the factors to be weighed are the wishes of the decedent himself. If the deceased had been a member of a faith which forbade disinterment, if he had agreed with the cemetery corporation that there should be no exhumation whatsoever, if he had elected to be laid in hallowed earth and the request was for reburial in unconsecrated ground, then only compelling considerations would justify disinterment and removal. (See Yome v. Gorman, supra, 242 N. Y. 395; Cohen v. Congregation Shearith Israel, 114 App. Div. 117, affd. 189 N. Y. 528.)

But the case before us presents no such factors. Here, only the cemetery corporation, at best a formal party, opposes the removal. Those most closely bound to the deceased by ties of love and affection would have her body moved from the mausoleum to a grave close by. And we are persuaded that there was basis for concluding that not whim or caprice motivated their decision, but rather sound reason and laudable purpose. It may well have been Mrs. Currier’s intention that she be interred in the mausoleum and that it house her body and those of her children but, the courts could find, it was her desire, prime and paramount, that her children be with her after death. When, therefore, it appeared that that expectation was not to be realized — because the daughters will be buried in another state and the son prefers an earthy grave — the courts below were warranted in deciding that, if presented with the alternative of remaining alone in the sepulcher or of being with her son and his family in the earth, she would have chosen the latter. Surely, there is nothing unreasonable or arbitrary about a determination that permits removal <£ to satisfy a longing that those united during life shall not be divided after death ”. (Yome v. Gorman, 242 N. Y., at p. 403.)

The order of the Appellate Division should be affirmed, with costs.

Cowway, J.

(dissenting). We think that on this record there was no room at Special Term for the exercise of discretion in favor of petitioner and that its attempted exercise was error as matter of law. No case has been called to our attention in this or any other State which discloses the exercise of discretion on facts such as those here presented. The statute presented for our consideration is section 89 of the Membership Corporations Law. It reads as follows: “A body interred in a lot in a cemetery owned or operated by a corporation incorporated by or under a general or special law may be removed therefrom, with the consent of the corporation, and the written consent of the owners of the lot, and of the surviving wife, husband, children, if of full age, and parents of the deceased. If the consent of any such person or of the corporation can not be obtained permission by the county court of the county, or by the supreme court in the district, where the cemetery is situated, shall be sufficient.' Notice of application for such permission must be given, at least eight days prior thereto, personally, or, at least sixteen days prior thereto, by mail, to the corporation or to the persons not consenting, and to every other person or corporation on whom service of notice may be required by the court. ’ ’ As originally enacted (L. 1880, ch. 566) it was in the form of an enabling or immunizing statute — a pronouncement that removal of a body under the circumstances outlined was a lawful removal. In 1908 it was so explained in Matter of Ackermann (124 App. Div. 684, 685), as follows: “ The evident purpose of the legislation was to settle a question long mooted as to the right of cemetery corporations to allow disinterments and of the rights of relatives of deceased persons to cause such disinterments to be made, concerning which matters much doubt existed independently and irrespective of the question of unlawful disinterments which stands upon an entirely different basis. It will be seen by scrutinizing the language of this section that there is nothing contemplated except a general authority. Who may apply or for what reasons or what on application may be regarded as sufficient are matters not referred to or regulated. * * * The law throws around the bodies of deceased human beings a protection even in their graves. The right of Christian sepulture includes the right to have one’s remains respected in his or her last resting place. Many circumstances arise from time to time necessitating a disturbance of the repose of the dead, but it must be some controlling public reason or superior private right which should induce the court to permit that to be done which from time immemorial has been considered abstractly as a work of desecration.”

The cemetery organization is much more than a formal party. The Legislature has confided to it the absolute right to prevent removal subject only to the power of a court to overrule that action. In the original and present statutes, the Legislature has put the cemetery organization first. It is indeed the one which may protect the deceased by insuring scrutiny by a court of the purpose of, and then justification for, a disinterment. The rules and regulations of the Woodlawn Cemetery provide for the approval and consent of the corporation and application to the Supreme Court in event of refusal of such consent. For a court to grant permission for a disinterment under section 89, when consent has been refused by the corporation, there must be some impelling and controlling reason presented which is consonant with legal right and public policy before the court may overrule the refusal. We think it would be error to read section 89 of the Membership Corporations Law as indicating intent upon the part of onr Legislature to permit the disinterment of a body for good reason or poor reason merely because the consent of the cemetery corporation and the written consent of the owners of the lot and of the relatives enumerated in that section had been obtained. For instance, in properly construing section 89, we think we may say with certainty that it was not the legislative intent that if all those mentioned in this section consented, that thereupon children could disinter their parents’ remains and place them in a cheaper lot in the same or another cemetery so as to sell the more costly lot from which they were taken. That would be contrary to the statute as we read it. It would be contrary to the teachings of all churches (see, e.g., Matter of Weinstein, 243 App. Div. 738; Yome v. Gorman, 242 N. T. 395; Matter of Ackermann, supra) and the customs of civilized nations. Even more clearly is it evident that mere desire by children for their mother’s disinterment is not sufficient since she had the legal right while living to direct the manner in which her body should be disposed of after death (Penal Law, § 2210) and made such direction. To put it in different words, no court has the power to impair an acknowledged and statutorily established legal right by saying that it is done in the name ¿of discretion. In such a situation, as we said above, there is no room for the exercise of discretion.

These are the facts in the petition and affidavit in opposition: Petitioner’s mother, Margaret Currier, purchased in the Wood-lawn Cemetery in May, 1923, a plot of ground containing six graves (220 superficial feet) and shortly thereafter had interred therein a friend and also the father-in-law of petitioner. Two months later she purchased a much larger plot containing 1,500 superficial feet. Upon the latter plot she erected a mausoleum containing eight crypts. The petition recites and it is conceded that the decedent intended at the time the mausoleum was erected that she be interred in one of the crypts. Arrangements were made to that end. Upon her death in January, 1927, her wishes were carried out and she was interred in her mausoleum There she has remainéd for twenty-two years.

The petitioner has now come forward and, while asserting that his mother intended to be buried in the mausoleum, alleges that she also intended that he and his two sisters or their heirs should be interred there; that his sisters reside in Missouri where they wish to be buried; that “No one else can be buried in any of the catacombs of said mausoleum, as we, her only children have no desire that at the time of our decease to be buried there, but wish to be buried in the ground, of which there are six graves ”; that “ It was the wish of my Mother that the family be buried together, and the only way that we can be together is to remove the only body which is now in the Mausoleum to the grave which we own, and which is close by and near where the mausoleum is erected.” (Emphasis supplied.) The grave referred to is the original six-grave plot purchased by his mother.

It is not true that no one else can be buried in the mausoleum — his mother’s remains are the only ones there and there are eight crypts. The petitioner may be buried there as he asserts his mother wished. Neither is it true, for the same reason, that the only way petitioner and his mother may be together is to remove her from the mausoleum. There is ample room in the plot upon which the mausoleum stands for petitioner to there have his wish granted “ to be buried in the ground ”. Those latter are his words and rather indicate that the reason his mother bought the second plot and built the mausoleum was because she did not wish “to be buried in the ground ”. There are many who do not. To such persons, and to all others, our Legislature as a matter of public policy has granted by section 2210 of the Penal Law the absolute right to direct the manner in which their bodies shall be disposed of after death. That section, insofar as material here, reads as follows: “ A person has the right to direct the manner in which his body shall be disposed of after his death; * * When such direction has been established, whether by will or paroi, it is paramount to all other considerations and no court may override it. (Matter of Eichner, 173 Misc. 644; Matter of Scheck, 172 Misc. 236; Matter of Johnson, 169 Misc. 215 [containing a scholarly and exhaustive treatment of the subject by Surrogate Delehauty] ; Matter of Smith v. Green-Wood Cemetery, 173 Misc. 215; Matter of Herskovits [Herman], 183 Misc. 411.) That direction is, of course, subject to public right or necessity (see Widening of Beekman Street, 4 Bradf. 503) or superior private right (Matter of Ackermann, 124 App. Div. 684, supra) but no such right is claimed here.

There are cases in which the court has permitted the removal of a body from a plot belonging to an interment society or religious congregation and its reburial in a newly acquired family plot by a member of decedent’s family. There the permission is granted on the theory that if the deceased person had the opportunity to express his wish, it would be to be buried with his relatives in a family plot rather than in the omnibus plot. In Cohen v. Congregation Shearith Israel (114 App. Div. 117, affd. 189 N. Y. 528) the interment was a conditional one in a row of graves for which a nominal charge was made and the removal sought was by decedent’s eight children so that she, their father and they might be buried together. We note in passing that a referee was there appointed who heard testimony and made findings. With the exception of one case, Yome v. Gorman (242 N. Y. 395, supra), all of the cases cited by respondent are of that type. They merely support the general rule that it is the wish of the deceased as to the disposition of his body which is to be given paramount effect.

There are also cases involving applications for disinterment where there are difficulties due to differences in religious faith. (See for instance, Yome v. Gorman, supra.)

None of those situations is presented here. There is truly no reason for this application. In the smaller plot there are already two persons buried, neither of whom is related to the decedent. It is clear that decedent had no desire to have those persons buried with her or she would have arranged for it in her lifetime. In the mausoleum there is but one body — that of decedent. If her body be removed there will be a vacant mausoleum which, as an asset of her estate, must be disposed of within a reasonable time. There is no reported case which we have found where desire of the living for the sale of a mausoleum was reason for the disinterment of one who had built it to be her last resting place.

Those are the facts disclosed by the petition and answering affidavit. However, there are other facts, withheld from Special Term, of which we take judicial notice since they affect the decedent here and are from the records of the Surrogate’s Court in the same judicial district and department of the Supreme Court to which the petition was presented (Matter of Ordway, 196 N. Y. 95; Matter of Clarke, 145 Misc. 660, and cases there cited) and are essential to the preservation of the dignity of and of respect for the court. Those records disclose that the Surrogate of New York County admitted to probate the will of the decedent Margaret Currier, recorded in liber 1357, page 403, in 1927, in March of 1927, and that it contained, in addition to bequests of some thirty odd thousand dollars, the following provisions:

“ 9th I direct that my remains be interred in the plot owned by me in Woodlawn Cemetery, New York City, and that a suitable mausoleum be erected thereon by my Trustee, hereinafter named, at a cost not to exceed the estimate prepared by Farrington, Gould & Hoagland, Inc. of 258 Broadway, New York City, it being my desire that a mausoleum be constructed of the character and durability suggested by the last named Company in a sketch heretofore submitted to me.”

“ 11th All the rest, residue and remainder of my estate, of whatever character and wheresoever situated, together with any lapsed legacies, I give, devise and bequeath as follows:

“ One-third (%rd) thereof to my son, Arthur B. Currier, of New York City, if living; * * *

“ One-third (%rd) thereof to my daughter, Lorena M. Mac-Keen, of St. Louis, Missouri, if living; * * *

One-third (%rd) thereof to my daughter, Viola M. Lloyd, of St. Louis, Missouri, if living; * * *.”

Thus it appears (1) that decedent’s two daughters were living in St. Louis, Missouri, in July, 1926, when she made provision for hér burial in the mausoleum, (2) that her prime desire was to be buried in a mausoleum designed for and satisfactory to her and that no desire that her children be buried with her or she with them was expressed, and (3) that there is a direct pecuniary interest of the petitioner and his sisters in the mausoleum if their mother’s remains can be moved out of it. We further judicially notice that the sum of $10,623 was paid by her corporate bank trustee on account of or in full payment for the mausoleum and that on final accounting in 1931 the decedent’s estate was $375,153.97.

We need not pause now to determine whether Special Term should have taken proof of the facts and circumstances more particularly as to whether there was a will providing for the manner in which decedent wished her body disposed of after death. (Penal Law, § 2210.)

Even were we to hold that there was room for discretion here, the exercise of it on this record was an abuse of discretion as a matter of law. We had occasion to point out earlier this year in Bunim v. Bunim (298 N. Y. 391, 393, 394, Desmond, J.), that the exercise of judicial discretion must have sound and substantial basis in the facts presented and that where there is none, there is an abuse of discretion as matter of law and this court has jurisdiction to review and duty to reverse.

The order should be reversed and the application dismissed, with costs.

Lewis, Desmond and Dye, JJ., concur with Fulo, J.; Conway, J., dissents in opinion in which Loughran, Ch. J., and Bromley, J., concur.

Order affirmed.


source: Caselaw Access Project

author: Loughbah, Ch. J.

license: Public Domain

text:
    The People of the State of New York, Respondent, v. Paul L. Hayner, Appellant.
    Argued October 11, 1949;
    decided December 29, 1949.

      Harry S. Travis for appellant.
    I. The People failed to establish the crime of murder in the first degree. (People v. Crum, 272 N. Y. 348; People v. Cashin, 259 N. Y. 434; People v. Guadagnino, 233 N. Y. 344; People v. Becker, 210 N. Y. 274; People v. Fanning, 131 N. Y. 659.) II. The corpus delicti was not established in conformity with law.. (People v. Cuozso, 292 N. Y. 85; People v. Benham, 160 N. Y. 402; Ruloff v. People, 18 N. Y. 179; 7 Wigmore on Evidence [3d ed.], § 2071; People v. Fitzgerald, 288 N. Y. 58; People v. Popoff, 289 N. Y. 344.)

      Robert O. Brink, District Attorney (Samuel W. Bernstein of counsel), for respondent.
    Gruilt was established beyond a reasonable doubt. (People v. Place, 157 N. Y. 584; People v. Conroy, 153 N. Y. 174; People v. Del Vermo, 192 N. Y. 470; People v. Hawkins, 109 N. Y. 408; People v. Barnes, 202 N. Y. 77.)
   Loughbah, Ch. J.

At a Trial Term of the Supreme Court held in Broome County, the defendant on February 22, 1949, was convicted of the murder of a male child of which his fourteen-year-old daughter had been delivered by him early on the morning of May 17, 1948. Soon after that birth, the defendant summoned a doctor who took him and his daughter to a hospital where injuries done to her by the delivery were repaired. Meantime in the reception room of the hospital the defendant was questioned by the Sheriff of Broome County and by one of his deputies. The Sheriff says the defendant there “ stated that his daughter had given birth to a baby and he had pulled the top of the baby’s head off.” According to the deputy sheriff, the defendant on the same occasion said: “ I deliberately killed that baby. I didn’t want to bring any disgrace upon the family.” A little later, the Sheriff and three deputies accompanied the defendant to his home in the town of Chenango where he pointed out a grave from which one of the deputies removed a male baby with the umbilical cord still attached and wound around the neck loosely.

The defendant next (about 10 o’clock of the same morning) made at the Sheriff’s office a further statement which was read and sworn to by him after it had been written down by a deputy sheriff. In part that statement is as follows: “At about 11 P.M. yesterday my daughter Kaye started to have labor pains, same continuing on until about 5:15 A.M. on this date [May 17, 1948] at which time the baby started to be born. As the head came out my wife and I tried to help it along as it came very slowly and Kaye was in terrible pain screaming for help and bleeding badly. As I pulled on the head, the skin came off from a portion of the skull on top of the head and some of the brains came out running on the bed. The baby started to cry just after being born. I then cut the umbilical cord, from the mother using a pair of shears. I then took the umbilical cord which was still attached to the. baby, from the mother, and wound it tightly around the baby’s neck for purpose of strangulation (drew it tightly) and the baby stopped crying. The baby was being bom over a period of 45 minutes to one hour. Some time after I wrapped the baby in a turkish towel, carried it across the driveway a few rods from the house * * * and buried it in a shallow hole covering same with dirt and three large stones. * * * Just after the baby had emerged completely from its mother’s womb, I tied the cord about its neck probably within 10 or 12 seconds. Then within 20 or 30 seconds it stopped crying and I believe it was dead. There was not motion at that time. Then about 10 or 12 minutes I carried it away and buried it. * * * I’m admitting to having intercourse with my daughter. I’m admitting to that.”

The defendant’s wife and daughter were witnesses for the People. The wife said the defendant had been sleeping with the daughter for a time before the daughter became pregnant and the daughter said he had sexual intercourse with her during that period. Thus there was an adequate basis for a finding by the jury of an emotion in the defendant that might well have led him to the commission of the crime charged. Moreover, he had an opportunity to commit that crime and the dead body of the child was found where he said he had buried it. These items of evidence plus the defendant’s confessions were not, however, sufficient warrant for the verdict herein. For the People were bound to establish by proof outside the confessions (Code Crim. Pro., § 395) that the child was born alive in the legal sense, that is, had been wholly expelled from its mother’s body and possessed or was capable of an existence by means of a circulation independent of her own (see Evans v. People, 49 N. Y. 86, 90; 2 Bishop on Criminal Law [9th ed.], p. 478; Sir James Stephen’s Digest of the Criminal Law [7th ed.], p. 218; 9 Halsbury’s Laws of England [1st ed.], p. 571). “ The true test of separate existence in the theory of the law (whatever it may be in medical science) is the answer to the question ‘ whether the child is carrying on its being without the help of the mother’s circulation.’ ” (1 Russell on Crime [9th ed.], p. 349, note u. See the cases there cited.)

The defendant and his wife were the only persons who were with their daughter at the time her child was born. As witnesses for the People, the wife and daughter said they never saw the child and did not hear it cry. The defendant did not take the stand. Consequently, the People were constrained to attempt the necessary corroboration of his confessions solely through medical opinions that were based upon nothing more than a post-mortem examination.

’ Four physicians were witnesses for the People. One of them performed an autopsy upon the body of the child. In substance his findings were as follows: There was one faint bruise on the right side of the neck and two faint bruises on the left side thereof; these were the only marks on the body; there was no ring of discoloration around the neck; there was a scalp wound about an inch and a half in diameter which, however, was no part of the cause of death; there was no skull fracture; no hemorrhage in the skull; no evidence of injury to brain or skull; no hemorrhage in the brain; nothing abnormal in the conjunctiva of the eyes; no discharge of any kind from the nose or mouth; no foreign object in any part of the body; no evidence of any fracture of the neck; there was a slight blue cast under the nails, but no blueness of the face such as often results from suffocation; the color of the skin was normal except for the three faint bruises on the neck.

On the strength of the autopsy report alone, the medical expert witnesses called by the People took it upon themselves to declare their ability to express ‘ ‘ with reasonable certainty ’ ’ an opinion to this effect: (1) The child was born alive and had a living existence separate and independent from its mother; and (2) the cause of death was an external force which shut off the air supply to the lungs. The pathologist who made the autopsy report gave this testimony: “ Q. Will you tell us whether in your post-mortem examination findings * * * there is positive evidence that this baby suffered from traumatic asphyxia as the result of the air supply being shut off? * * * A. Yes, there is. Q. What is that evidence? A. The evidence is that the lungs were fully expanded, but even more than that, there was interstitial emphysema of the lungs. Q. By that you mean what? A. Tearing of the wall sacs and escape of air into the connective tissue of the framework of the lung.” But the People admitted the absence of hemorrhage in the wall sacs and connecting tissue of either lung — a strong circumstance on the side of the defendant since bleeding naturally follows rupture of a blood vessel of a living person. The expansion of the lungs was of no great moment because the legal test of live birth — possession by the child of a separate circulation — made irrelevant the question whether the child had breathed or not (see Winfield, “ The Unborn Child ”, 8 Cambridge L, J., 76, 79; Stephen’s Digest of the Criminal Law, supra; 21 Am. & Eng. Encyc. Law [2d ed.], p. 102).

The foregoing, we believe, is a sufficient analysis of the case for the People. The testimony of their medical experts was necessarily of slight or merely conjectural significance. For here no one claiming to be an eye or ear witness came forth and, where that is the case evidence of live birth precedent to speedy death is of a nature practically impossible to medical science (see Atkinson, “ Life, Birth and Live-Birth ”, 20 Law Quarterly Rev. 134, 146, 149). Hence we are ourselves wholly unconvinced that the jury were justified in finding the fact of live birth to have been established beyond a reasonable doubt, and, this being so, the conviction of the defendant cannot be allowed to stand (People v. Crum, 272 N. Y. 348, 350).

The judgment of conviction should be reversed and a new trial ordered.

Lewis, Conway, Desmond, Dye, Fuld and Bromley, JJ., concur.

Judgment of conviction reversed, etc.


author: Bromley, J.

text:
    Loab Estates, Inc., Landlord, Appellant, v. “ Mary ” Druhe et al., Tenants, Respondents. Loab Estates, Inc., Landlord, Appellant, v. “ John ” Payne et al., Tenants, Respondents. Loab Estates, Inc., Landlord, Appellant, v. “ Edgar ” Symington et al, Tenants, Respondents.
    Argued November 29, 1949;
    decided December 29, 1949.

      Jesse Hemley for appellant.
    I. The New York laws are unconstitutional as applied to appellant since they prevent appellant from withdrawing from the business of renting and deprive it of its property in violation of the Fourteenth Amendment. (People ex rel. Durham Realty Corp. v. La Fetra, 230 N. Y. 429; Martin v. District of Columbia, 205 U. S. 135; Wolff Packing Co. v. Court of Ind. Relations of Kansas, 262 U. S. 522; Central Sav. Bank v. City of New York, 279 N. Y. 266; Bowles v. Willingham, 321 U. S. 503; Yakus v. United States, 321 U. S. 414; Taylor v. Bowles, 145 F. 2d 833; Wilson v. Brown, 137 F. 2d 348; Matter of Wong v. Finkelstein, 299 N. Y. 205; Ullmann Realty Co. v. Tamur, 113 Misc. 538; Noble State Bank v.
      Haskell, 219 U. S. 104.) II. The New York laws' conflict with the policy and letter of Federal law in failing to permit withdrawal of property from the rental market and to that extent are invalid under section 2 of article VI of the Federal Constitution. (Matter of Tartaglia v. McLaughlin, 297 N. Y. 419.)

      Henry G. McDonough and Frank J. Durkin for respondents.
    I. Local Law No. 66 of 1947 of the City of New York does not violate the Fourteenth Amendment of the Constitution of the United States and is a valid exercise of the police power. (Home Bldg. & Loan Assn. v. Blaisdell, 290 U. S. 398; People v. Nebbia, 262 N. Y. 259, 291 U. S. 502; Block v. Hirsh, 256 U. S. 135; Marcus Brown Holding Co. v. Feldman, 256 U. S. 170; Levy Leasing Co. v. Siegel, 258 U. S. 242.) II. The local law does not conflict with the Federal law and does not violate section 2 of article VI of the Federal Constitution. (Matter of Wong v. Finkelstein, 299 N. Y. 205; Matter of Recknagel, 275 App. Div. 684.) III. The local law provides a remedy for appellant and he must apply for a certificate of eviction pursuant to said law. (Administrative Code, § U41-7.0, subd. d.)

      Nathan W. Math, Joseph Jay, Stanley Buchsbaum and Alfred Weinstein for temporary city housing rent commission, amicus curice, in support of respondents ’ position.
    I. There is no conflict between Federal law or regulation and the local law. (Matter of Tartaglia v. McLaughlin, 297 N. Y. 419; Matter of Molnar v. Curtin, 273 App. Div. 322, 297 N. Y. 967; Matter of Wallach v. Boss, 298 N. Y. 806; Matter of Recknagel, 275 App. Div. 684; Savage v. Jones, 225 U. S. 501; Algoma Plywood & Veneer Co. v. Wisconsin Employment Relations Bd., 336 U. S. 301.) II. The local law should be sustained as a valid exercise of the police power. (Block v. Hirsh, 256 U. S. 135; Marcus Brown Holding Co. v. Feldman, 256 U. S. 170; Taylor v. Bowles, 145 F. 2d 833; Wilson v. Brown, 137 F. 2d 348; Bowles v. Willingham, 321 U. S. 503; Home Bldg. & Loan Assn. v. Blaisdell, 290 U. S. 398; Lincoln Fed. Labor Union v. Northwestern Iron & Metal Co., 335 U. S. 525; Olsen v. Nebraska, 313 U. S. 236; Guttag v. Shatzkin, 113 Misc. 362.)
   Bromley, J.

Appellant landlord challenges the validity of those provisions of the Administrative Code of the City of New York which restrict the right of landlords to evict tenants from “ apartments in the city ” (Administrative Code of City of New York, § U41-7.0, subd. c, as validated by L. 1948, ohs. 4, 699). That challenge is levelled at the local law as it read before the amendment of October, 1949 (Local Laws, 1949, No. 73 of City of New York; see F. T. B. Realty Corp. v. Goodman, 300 N. Y. 140, decided today). By omitting to permit eviction for the purpose of withdrawing accommodations permanently from the rental market, or for the purpose of demolishing the accommodations and adapting the property to other commercial uses unless the landlord has made provision for relocating his tenants in comparable quarters at rents no greater than they have paid, the local law is said to be in fatal conflict with Federal legislation on the subject and to offend against the due process clause of the Fourteenth Amendment to the Federal Constitution.

Appellant desires to evict twenty-nine families from three apartment houses in order to demolish the buildings and construct a loading platform for its adjacent warehouse. The landlord has not made provision for relocation of its tenants, an essential condition under the local law upon its right to a certificate of eviction for that purpose (Administrative Code of City of New York, § U41-7.0, subd. g). Since the temporary city housing rent commission could not have granted an eviction certificate under those circumstances, appellant properly sought to challenge the local law by these dispossess proceedings in the Municipal Court (see Matter of Wong v. Finkelstein, 299 N. Y. 205, and Matter of Pardee v. Finkelstein, 193 Misc. 269, affd. 275 App. Div. 659), and the direct appeals from that court’s orders of dismissal are proper since they present only constitutional questions (Civ. Prac. Act, § 588, subd. 4).

The asserted conflict with Federal law is without substance. We consider that law as it stands today (see Quaker Oats Co. v. City of New Fork, 295 N. Y. 527, 536); and the only inhibition upon eviction from controlled accommodations is found in a regulation of the Federal Housing Expediter (Controlled Housing Bent Regulation for the New York City Defense-Rental Area, § 825.21 et seq., 14 Federal Register 1574 et seq.; see Housing and Rent Act of 1949, § 206; H. S. Code, tit. 50, Appendix, § 1899) together with a declaration 11 that no provisions of this section shall be construed to authorize the removal of a tenant unless such removal is authorized under local law. ’ ’ In the face of that language we could not hold that a restriction established by local law conflicts with the letter or policy of the Federal law (see Dickson v. Uhlmann Grain Co., 288 U. S. 188,198-200; Matter of Tartaglia v. McLaughlin, 297 N. Y. 419, 425-426). Section 301 of the Federal statute (Public Law 31, ch. 42, 81st Cong., 1st Sess.) merely declares the effect of that law — that it shall not be construed to require any person to offer any housing accommodations for rent ’ ’ — and it cannot be read as imposing a national policy upon the States.

Appellant’s chief contention is that the local law deprives a landlord of property without due process of law, because it denies to him the power to withdraw his property from the rental market. Conceding that the issue may be posed thus — for the condition upon appellant’s right to evict its tenants for the purpose alleged below should be regarded as prohibitive under the present emergency — the argument, nevertheless, must fail. Similar restrictions upon the power of a landlord, induced by an earlier and lesser emergency, were said to fall within the lawful scope of ‘ the police power in its proper sense, under which property rights may be cut down, and to that extent taken, without pay ” (Block v. Hirsh, 256 U. S. 135,155-158). Confronted with the threat of chaos and confusion ” (Administrative Code of City of New York, § U41-7.0, subd. a), and impelled to balance the conflicting interests of landlords and tenants in possession, the city council and Legislature have concluded that the former must suffer a temporary restraint upon the right to withdraw their property from the rental market. Appellant-does not contend that it has been deprived of a reasonable return upon its property (see Bowles v. Willingham, 321 U. S. 503, 517), nor has it challenged the existence of an emergency (see Chastleton Corp. v. Sinclair, 264 U. S. 543, 547). As legislation designed to meet an immediate and pressing exigency, the local law cannot be held to operate osa" taking ’ ’ of appellant’s property without due process of law.

The orders should be affirmed, with costs.

Lotjghran, Ch. J., Lewis, Conway, Desm'ond, Dye and Fuld. JJ., concur.

Orders affirmed.


author: Bbomley, J.

text:
    Sigmund Pines et al., Appellants, v. Lawrence J. Beck, Respondent, and Beck Chemical Equipment Corporation, Impleaded Defendant-Appellant.
    Argued October 13, 1949;
    decided December 29, 1949.

      Julius Henry Cohen, David Brady and Albert I. Da Silva for plaintiffs-appellants.
    I. Because plaintiffs’ allegations of their own full performance under the contract were admitted by defendant’s answer and stipulations, the trial court was precluded from raising the issue of performance ex mero motu and from finding that plaintiffs had not fully performed. (Thompson v. Postal Life Ins. Co., 226 N. Y. 363; Greene v. Smith, 160 N. Y. 533; listed v. Van Ness, 158 N. Y. 104; Truesdell v. Sarles, 104 N. Y. 164; International Photo Recording Mach. v. Microstat Corp., 269 App. Div. 485; Matter of Goebel, 263 App. Div. 516.) II. The trial court erred in interpreting the contract as requiring plaintiffs to pay for plant and capital. The issue not having been raised or litigated at the trial, plaintiffs have been denied fair judicial process. (Brooklyn Public Lib. v. City of New York, 250 N. Y. 495; Zimmerman v. Roessler & Hasslacher Chemical Co., 246 App. Div. 306, 272 N. Y. 566.)

      David Brady, Julius Henry Cohen and Albert I. Da Silva for impleaded defendant-appellant.

      Solomon Rothfeld and William St. John Toser for respondent.
    I. The trial court was not precluded in determining whether or not plaintiffs had fully performed their obligations under the contract. (Greene v. Smith, 160 N. Y. 533; Oakville Co. v. Double-Pointed Tack Co., 105 N. Y. 658.) II. Plaintiffs at all times were obligated to furnish capital and pay for plant and equipment; defendant never stipulated anything to the contrary and never waived his right to enforce such provision. The trial court’s interpretation was clearly in accordance with the agreement as written and the testimony given at the time of the trial by plaintiff Levine. III. The trial court was justified and under a duty to interpret the contract, pursuant to which an accounting was sought by plaintiffs, and to resolve all disputes between the parties in order that equity and justice might prevail and further litigation avoided. (Consolidated Fruit Jar Co. v. Wisner, 110 App. Div. 99, 188 N. Y. 624; Kervan v. Hellman, 110 App. Div. 655; Wright v. Delafield, 25 N. Y. 266; Becker v. Krank, 75 App. Div. 191; Smith v. First Nat. Bank of Albany, 151 App. Div. 317.) IV. Although the trial court found reformation unnecessary, it was under a duty to interpret the contract. (Oakville Co. v. Double-Pointed Tack Co., 105 N. Y. 658; Mott v. Oppenheimer, 135 N. Y. 312.)
   Bbomley, J.

Plaintiffs and the impleaded defendant appeal from an order of the Appellate Division, First Department, which modified and, as modified, affirmed (one Justice dissenting) an interlocutory judgment of the Supreme Court, New York County, granting plaintiffs an accounting under a contract for the joint exploitation of defendant’s invention, a military flame thrower. The appeal from the nonfinal order is by leave of the Appellate Division upon the following certified questions:

1. The affirmative defenses and counterclaims having been dismissed upon the merits, did the pleadings and the stipulation of the parties in this case preclude the Trial Court from determining whether or not the plaintiffs had fully performed their obligations under the contract?

‘ ‘ 2. Does the judgment of the Trial Court, as modified by the Appellate Division, properly and correctly determine the issues between the parties? ”

The essential facts are not in dispute. In 1941, defendant Beck, inventor of the weapon, was attempting to develop it commercially together with plaintiffs, Levine and Pines, a lawyer and an accountant respectively. On December 4th, the three executed an informal memorandum providing for joint effort to produce the weapon for military use, the profits therefrom to be divided one half to Beck and one half to plaintiffs, the share of the latter to be for their endeavors in the promotional end ” of the venture. Following the execution of the memorandum the three parties negotiated with the Beattie Manufacturing Corporation for the manufacture of the flame throwers. On December 12th, a letter was written to the Beattie company proposing that Beattie manufacture the device for one half of the net profits and that the other half be paid to Beck Chemical Equipment Corporation, a company which was formed a week later with Beck, Pines and Levine as the only stockholders. This written proposal was initialed by Beck.

Subsequently, and in order to provide a firm basis for the anticipated agreement with the Beattie company, Beck, Pines and Levine entered into a formal contract, which is the basis of the present suit. It is dated December 31,1941. The contract was to supersede the earlier memorandum and its declared purpose was to define the interests of the three in the Beck corporation and any proceeds of the invention. It recited that Beck had accepted a proposal by Levine and Pines to furnish plant and capital and to assist him in the development and sale of the weapon. It did not specifically obligate plaintiffs to furnish plant and capital at their own expense or out of their share of the profits. It provided for the formation of the Beck corporation with 45% of the stock going to Beck, 35% to Pines and 20% to Levine. It was agreed that all patents developed by Beck should be held by him as trustee for the benefit of himself, Pines and Levine and that all royalties and other proceeds derived therefrom should be distributed in the proportion of the ownership of stock as indicated above. This contract was executed by all three individuals and by the Beck corporation, although Beck did not sign it until January 13,1942. On that day the proposal made by the Beck corporation to the Beattie company for the manufacture of the weapon in return for one half of the profits was accepted by the latter.

Plaintiffs commenced this suit in 1944, setting forth the contract of December 31, 1941, and alleging that they had duly and fully performed every term thereof. The complaint alleged that Beck had breached his duties as trustee under the contract by his failure to prosecute patent applications and in other ways. It was alleged that plaintiffs had received nothing under the contract, although entitled to 35% and 20% respectively of all benefits. The complaint sought an accounting by defendant for all the assets of the trust, Beck’s removal as trustee, and other relief.

By his answer Beck denied all the allegations relating to the existence and effect of the contract, admitting by silence, however, plaintiffs’ assertion as to their own full performance. By two counterclaims, defendant also sought to obtain the cancellation or reformation of the contract for fraud. He alleged that plaintiffs had offered to supply capital and a plant, that it was informally agreed that in return for this and any personal service they might render plaintiffs were to receive one half of the profits, and that the omission of that condition in the informal memorandum was a breach of the confidential relationship between Beck and Levine, who had acted as Beck’s attorney. Defendant asserted that plaintiffs signed the subsequent formal contract, which recited their duty in this respect, without any intention to perform; that Beck had objected to the division of profits under that contract, and had been assured that the written agreement was merely needed to satisfy the Beattie company, and later would be redrafted to meet defendant’s objections — an assurance which was fraudulent and which plaintiffs had refused to carry out.

At the opening of the trial at Special Term it was stipulated at the suggestion of defendant’s counsel, and with the acquiescence of the court, that the counterclaims should be tried forthwith and that, if defendant was not successful on his counterclaims, plaintiffs would be entitled to judgment on the complaint. On the trial which followed it was established that Beck, when he signed the contract in suit, knew that the Beattie company was to manufacture the weapon in return for one half of the profits; that he had acted under the belief that a revised arrangement with plaintiffs would be made, and that he would have considered 15% of the total profits a fair share for plaintiffs.

Special Term dismissed defendant’s counterclaims, ordered that defendant account to plaintiffs under the trust and decided that defendant might charge against plaintiffs’ share of the proceeds the amounts payable to the Beattie company. The court found that plaintiffs had contracted to furnish the necessary capital, plant and equipment without intent to do so, but that Beck had participated with knowledge of the actual plan, and held that the contract was valid on the ground that Beck had not been misled as to the source of the plant and capital. Defendant has not appealed.

The court also found that the allegations of the complaint were admitted by defendant. However, it rejected a proposed finding that plaintiffs had fully performed, found that the plant and capital had been furnished by the Beattie company, and concluded that plaintiffs had breached the contract in that they failed to supply the plant, capital and equipment. The decision that there should be charged against the sums due plaintiffs under the contract the entire share of the profits owed to the Beattie company rested upon the latter holding.

The majority in the Appellate Division found no inconsistency between that result and defendant’s stipulation for judgment, stating that the stipulation did not conclude defendant as to plaintiffs’ “ measure of damage ” or foreclose the court “ from determining the proper measure of damage.” (275 App. Div. 749, 750.) The modification by that court merely clarified the judgment so as to make it plain that the entire net profit was to be employed in determining the respective shares, with the 50% share of the Beattie company to be deducted from the 55% share of plaintiffs. Thus Beck is to receive 90% of any sums received from the Beattie company and the plaintiffs are to receive 10%.

The dissenting Justice felt that the stipulation had concluded the trial court as to any issue save those raised by the counterclaims, and should have compelled the entry of judgment upon the allegations of the complaint.

Plaintiffs appeal on the ground that both courts below7 were in error and the impleaded defendant Beck corporation on the • ground that it should receive the profits of the enterprise and account to the other parties.

The issue in this case turns upon the proper construction of defendant’s concession made at the opening of trial that if he failed to establish his counterclaims plaintiffs would be entitled to judgment on the complaint. A decision inconsistent with that agreement must be reversed (Hine v. New York Elevated R. R. Co., 149 N. Y. 154; Hong Kong & Shanghai Banking Corp. v. Cooper, 114 N. Y. 388; Matter of New York, L. & W. R. R. Co., 98 N. Y. 447; and see Matter of Malloy, 278 N. Y. 429, 433). In the Hiñe case (supra), which was a controversy over the value of plaintiff’s easement of light and air which had been acquired by the railroad, the defendants had agreed, as a condition upon a temporary stay of injunction, that they would not question plaintiff’s right to maintain the action should he subsequently sell his property. At the trial defendants proved a sale by plaintiff and challenged the judgment in his favor on that ground. The court said (149 N. Y., at pp. 160-161): “It is in the power of the parties to shape the facts upon which the cause shall be determined by their stipulations, when made deliberately and in good faith, and then the court will be justified in framing its judgment accordingly.”

And in Matter of New York, L. & W. R. R. Co. (supra), in holding that the parties had effectively restricted the power of the Supreme Court to appoint commissioners for appraisal, the court said (98 N. Y., at pp. 452-453): “ the agreement of the parties bound them and concluded the court in that proceeding, and the court was bound as between the parties to observe, enforce and carry out the agreement. Parties by their stipulations may in many ways make the law for any legal proceeding to which they are parties, which not only hinds them, but which the courts are bound to enforce.”

It is clear that the defendant’s concession at the outset of the trial should have barred any judgment in conflict with the substantive allegations of the complaint, and that the judgment below is inconsistent with that stipulation. The inconsistency in the trial court’s decision is most apparent in the finding that the “ allegations of the complaint are admitted ” and in the holding that plaintiffs had breached their duty. The issues pertinent to the latter conclusion — chiefly the scope and nature of plaintiffs’ duties —were not, and could not have been, litigated. The decision below does not rest upon the appropriate “ measure of damage ” but upon plaintiffs’ breach of the contract. Under those circumstances we are compelled to reverse, and direct that judgment be entered upon the allegations of the complaint as admitted by defendant.

The subsidiary questions posed on the appeal concern matters within the discretion of the trial court. We cannot say that Beck must be removed as trustee, or that, under the terms of this contract, the proceeds must be paid to the Beck corporation. If the latter can show any need for the proceeds, it may do so upon application to the trial court.

The orders should be reversed, with costs to appellants in all courts, and the case remitted to Special Term with a direction to enter judgment for the plaintiffs upon findings which are consistent with the allegations of the complaint as admitted by the defendant. The first question certified is answered in the affirmative. The second question certified is not answered.

Lotjghban, Ch. J., Lewis, Conway, Desmond, Dye and Ftjld, JJ., concur.

Orders reversed, etc. [See 300 N. Y. 694.]


author: Lewis, J. Dye, J.

text:
    Jacob Friedman, Doing Business under the Name of J. Friedman Company, Appellant, v. Aaron L. Handelman et al., Respondents.
    Argued December 1, 1949;
    decided December 29, 1949.

      Leonard Weintraub and Howard Henig for appellant.
    I. The covenant of record rendered title to the lots unmarketable. (Isaacs v. Schmuck, 245 N. Y. 77; Bull v. Burton, 227 N. Y. 101; New York Investors v. Manhattan Beach Bathing Parks Corp., 256 N. Y. 162.) II. The Appellate Division erred in reversing the judgment for plaintiff entered at Trial Term; the contract was clear and unambiguous; it was prepared by the attorneys for the parties, as an executory agreement to assign on specific conditions, and should have been enforced according to its terms. (Gearns v. Commercial Cable Co., 293 N. Y. 105; Malbone Garage v. Minkin, 272 App. Div. 109, 297 N. Y. 677; Goldstein v. Frances Emblems, 269 App. Div. 345; Cream of Wheat Co. v. Crist Co., 222 N. Y. 487; Matter of Loew’s Buffalo Theatres [Golde Clothes Shop], 233 N. Y. 495; Schweinburg v. Altman,
      145 App. Div. 377, 207 N. Y. 681; Schoonmaker v. Hoyt, 148 N. Y. 425; Jermyn v. Searing, 225 N. Y. 525; Stebbins v. Frisbie & Stansfield Knitting Co., 201 App. Div. 477; Kent v. Universal Film Mfg. Co., 200 App. Div. 539; Norcross v. Wills, 198 N. Y. 336; Moore v. Williams, 115 N. Y. 586.)

      Jack L. Ratzkin and Milton Kunen for respondents.
    I. Under the original contract of January 19, 1948, the purchaser could not reject title, on the basis of which plaintiff herein refused to go on with the deal, and plaintiff was similarly bound. (Feist v. Block, 115 App. Div. 211; Baucher v. Stewart, 136 App. Div. 844; Stirn v. 293 Avenue B Corp., 224 App. Div. 458; McCarter v. Crawford, 245 N. Y. 43; Eastman v. Horne, 205 N. Y. 486; Haar v. Daly, 232 App. Div. 423, 258 N. Y. 623.) II. The agreement between these parties consists of the contract of February 5, 1948, and the original contract of January 19, 1948. The two must be read together and, when so read, it is obvious that plaintiff was required to take title subject to the existing covenants and restrictions. (Nau v. Vulcan Rail & Constr. Co., 286 N. Y. 188; Schulman v. Cornman, 221 App. Div. 170; Empire Properties Corp. v. Manufacturers Trust Co., 288 N. Y. 242; Atwater & Co. v. Panama R. R. Co., 246 N. Y. 519; Wolkind v. Berman, 232 App. Div. 47; Matter of Eagar Constr. Corp. [Ward Foundation Corp.], 255 App. Div. 291: Fleischman v. Furgueson, 223 N. Y. 235.)
   Lewis, J.

On January 19, 1948, the defendant Handelman, acting for himself and the defendant Welsher, signed a contract — to which it will be convenient to refer as the January contract — by which he agreed to purchase from one Harry Lefrak a parcel of land, comprising ninety lots in the city of Long Beach, Nassau County. Under that contract the defendant, Handelman, was to take title “ Subject to covenants, restrictions and easements of record.” (Emphasis supplied.)

Thereafter, on February 5, 1948, the defendant, Handelman, and the plaintiff, Friedman, entered into a written executory contract — hereinafter referred to as the February contract — by which the defendant agreed to assign to plaintiff the January contract for the sum of $7,000, of which $2,500 was deposited as a down payment.

Upon this appeal we are concerned with the following provisions of the February contract:

Whereas, the Assignor [the defendant herein] is the 4 purchaser ’ under an agreement and contract of sale dated January 19,1948 between Harry Lefrak and Aaron L. Handelman, which provides for the purchase of 90 lots, pieces or parcels of land in the City of Long Beach, County of Nassau, which contract has been initialed by the parties hereto and made part hereof; and

Whereas, the Assignee [the plaintiff herein] desires to purchase the right, title and interest of the Assignor in said contract, including the right to the deposit of $2,500. made upon execution of contract

“ Now, therefore, for and in consideration of the premises and the mutual covenants and conditions herein contained, it is agreed, as follows:

“ 1. The Assignor agrees to assign and the Assignee agrees to accept the assignment of the aforesaid contract of sale between Harry Lefrak and Aaron L. Handelman, and the Assignee has upon the execution of this agreement paid to the Assignor the sum of $2,500 by check subject to collection.”

There is also a provision requiring the defendant Handel-man, as assignor, to deliver to his attorney, as escrow agent, the January contract and an assignment thereof to the plaintiff, to be held by such agent in escrow under stated conditions of which our chief concern is with paragraph 2c: “ c. In the event the Home Title Insurance Company shall refuse to insure good and marketable title to at least 80 of the 90 lots described in the contract of sale hereinabove referred to, then this agreement, at the option of the Assignee, may be declared null and void and the Assignor shall thereupon return to the Assignee the sum of $2,500. this day deposited, and upon the return of said sum the escrow holder may thereupon return to the Assignor the contract of sale and assignment thereof held by him in escrow. In the event the Assignor fails to return the said sum of $2,500. to the Assignee on or before February 28, 1948 in accordance with the provisions of this paragraph, the escrow holder shall deliver to the Assignee the contract of sale and assignment held by him in escrow without any further payment therefor by the Assignee.”

In accord with procedure specified in the February contract the Home Title Insurance Company was commissioned to make a title search of the subject property and was requested to insure the title thereof. When that company delivered the title search it appeared therefrom that of the ninety lots for the conveyance of which the January contract made provision, at least eighty lots were subject to the following restrictions and covenants of record in the office of the Register of the County of Nassau:

“ And the party of the second part hereby covenants and agrees for itself, its successors and assigns forever that neither the party of the second part nor its successors and assigns will erect nor permit the erection on the aforesaid property of any structure except a dwelling on not less than 2 plots.

“It is understood and agreed however, that this covenant may be changed, modified or annulled by the City of Long Beach with the consent of the owners of adjacent property, but without the knowledge or consent of the surrounding property owners or the grantees of the party of the second part.”

The report of the title company showed the restrictions mentioned above, and stated its refusal to issue its policy insuring good and marketable title to at least eighty of the ninety lots described in the January contract, without excepting those restrictions from the coverage of its policy. Thereupon the plaintiff, as assignee under the February contract — asserting the right claimed by him to be reserved under paragraph 2c thereof (quoted supra) — declared the February contract null and void and demanded the return of his deposit of $2,500. The subsequent refusal by the defendant to comply with plaintiff’s demand gave rise to this action.

At Trial Term — where the right to a jury trial was waived and it was stipulated that no formal findings of fact and conclusions of law be made — the Trial Justice, after a trial of the issues tendered, directed judgment in favor of the plaintiff in the sum of $2,500 and interest.

The Justice at Trial Term held that, whatever the rights and liabilities of the defendant Handelman and the landowner Lefrak may have been under the January contract, the plaintiff Friedman, when he entered into the February contract with Handelman, caused to be inserted in unequivocal terms the conditions under which he would take over the January contract; that the February contract — not being a mere assignment of the January contract — contained new conditions which modified the terms of the January agreement; that plaintiff was not required to take an assignment of the January contract “as is ”, but exercised his right to attach new conditions by reserving the right to cancel the contract in the event Home Title Insurance Company would not insure good and marketable title to at least eighty lots; that in the circumstances disclosed by this record, the refusal by Home Title Insurance Company to insure the title without exception afforded the plaintiff — 'Under paragraph 2c of the February agreement — a legal basis for demanding the return of the down payment he had made.

At the Appellate Division the judgment entered at Trial Term was reversed and the complaint dismissed on the law and the facts (two Justices dissenting); certain findings of fact and a single conclusion of law contained in the opinion rendered by the Trial Justice were disapproved and disallowed and in lieu thereof the court, in an opinion Per Curiam, made new findings of fact and conclusions of law. As already indicated, the January contract — which was initialed by the parties and made a part of the February agreement — contained the clause “ Subject to covenants, restrictions and easements of record.” The Appellate Division found, in effect, that this clause constituted notice to plaintiff of covenants affecting the lots in question. Accordingly, it was held, the plaintiff could not have expected that title insurance could be procured which in scope was broader than was justified by the condition of the property as described in the January contract.

Clearly the recorded restriction reported by the Home Title Insurance Company, which restriction forbade “ * * * the erection on the aforesaid property of any structure except a dwelling on not less than 2 plots ”, is an incumbrance so substantial as to make unmarketable the title to at least eighty of the ninety lots to which the January contract referred. (Bull v. Burton, 227 N. Y. 101, 111.) When unqualified title insurance was refused on those eighty lots that circumstance, in our view, was enough, within the unequivocal language of paragraph 2c of the February contract, to entitle the plaintiff to the return of his down payment.

True it is there is evidence that the plaintiff and the defendant Handelman, as parties to the February agreement, initialed the January contract which, as we have seen, contained the general recital Subject to covenants, restrictions and easements of record.” It is also true that, by reference, the January contract was “ made a part of the February agreement ”. There is no evidence, however, that, when the plaintiff and the defendant Handelman agreed upon paragraph 2c of the February contract, there was either qualification or limitation of the plaintiff’s right — there clearly stated — to declare the agreement null and void “ In the event the Home Title Insurance Company shall refuse to insure good and marketable title to at least 80 of the 90 lots described in the contract of sale hereinabove referred to * * We may not by construction excise from the February agreement paragraph 2c, which the parties intended should define their rights and obligations ; nor may we insert in that paragraph following the phrase good and marketable title ” the words “ Subject to the covenants, easements and restrictions of record.” In other words We may not “ * * * make a new contract for the parties under the guise of interpreting the writing.” (Heller v. Pope, 250 N. Y. 132, 135; Cream of Wheat Co. v. Crist Co., 222 N. Y. 487, 493-494; Brown v. Manufacturers Trust Co., 278 N. Y. 317, 324; Brainard v. New York Central R. R. Co., 242 N. Y. 125, 133; Nor cross v. Wills, 198 N. Y. 336, 341.)

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

Dye, J.

(dissenting). I dissent and vote for affirmance. The February contract, as written, constitutes an assignment of the January contract and makes no exception to its provision that title was to be “ Subject to covenants, restrictions and easements of record.” If more were needed to show the intent of the parties another clause specifically recites that the January contract has been initialed by the parties hereto and made part hereof ’ ’. When such plain words are given their usual and ordinary meaning, it is quite apparent that the parties intended to incorporate the provisions of the January contract into the February contract. Surely had the intent been otherwise, specific language to the contrary could very well have been used. Experienced real estate operators, as these parties undoubtedly are, take into consideration that subdivision developments will have, almost without exception, certain restrictive covenants as to use, common to the tract. To now say that an agreement fails because a title insurance company merely lists as an exception these common restrictive covenants which are a matter of public record, is to provide an unwarranted escape mechanism which is in complete derogation of the operative provisions of this writing that title was to be subject to covenants and restrictions of record.

Admittedly, the presence of a restrictive covenant running with the land is sufficient ground for the rejection of title by a vendee if the contract is to sell free from all incumbrances. In this event only may a covenant be regarded as such an incumbrance as to render a title unmarketable. (See Kimball Co. v. Fox, 239 N. Y. 554.) Nor is Bull v. Burton (227 N. Y. 101) to the contrary. The dissenting opinion therein (p. 114) clearly shows that no mention of the covenants there at issue — which were, indeed, much more restrictive than that here — was included in the contract. In addition we place considerable reliance upon the second sentence of the covenant before us which ties it affirmatively to the local municipal zoning regulations. The restrictions therefore amount to no more than those which by 1cm an owner Avould be compelled to observe in any case.

The judgment should be affirmed, with costs.

Loxighean, Oh. J., Conway and Bromley, JJ., concur with Lewis, J.; Dye, J., dissents in opinion in which Desmond and Fttld, JJ., concur.

Judgment accordingly.


author: Ftjld, J.

text:
    In the Matter of Consolidated Edison Company of New York, Inc., Respondent, against Milo R. Maltbie et al., Constituting the Public Service Commission of the State of New York, et al., Appellants.
    Argued November 30, 1949;
    decided December 29, 1949.

      Sherman C. Ward, George H. Kenny and Joseph J. Doran for appellants.
    I. The amount of the company’s reserve 'for depreciation had been fixed by the company in the unregulated exercise of managerial discretion and had never been approved by the commission as showing the accrued depreciation existing in the properties. (People ex rel. New York Rys. Co. v. Public Service Comm., 223 N. Y. 373; Matter of New York Edison Co. v. Maltbie, 244 App. Div. 685, 271 N. Y. 103.) II. The commission was authorized by the statute to make its own estimate of the accrued, depreciation of the physical property, and was not required to accept the amount of the book reserve for depreciation as established by the company itself, in prescribing temporary rates. III. Section 114 is to be liberally construed in accord with its purpose of fostering the establishment of temporary rates in the public interest and as an aid in fixing proper final rates. (Smyth v. Ames, 169 U. S. 466; Prendergast v. New York Tel. Co., 262 U. S. 43; Matter of Bronx Gas & Elec. Co. v. Maltbie, 271 N. Y. 364; Matter of Yonkers Elec. Light & Power Co. v. Maltbie, 245 App. Div. 419.) IV. Under the statute the books of the company are to afford the primary source of information, but not the exclusive base, for fixing temporary rates. (Matter of Rochester Gas & Elec. Corp. v. Maltbie, .273 App. Div. 114, 274 App. Div. 856, 298 N. Y. 867.) V. The “ reserves accumulated ” by the company and the “ accrued depreciation of the physical property ” are not synonymous and do not “ refer to the same thing.” (Minnesota Rate Cases, 230 U. S. 352; Knoxville v. Knoxville Water Co., 212 U. S. 1; Federal Power Comm. v. Hope Natural Gas Co., 320 U. S. 591; People ex rel. Consolidated Water Co. v. Maltbie, 245 App. Div. 866, 275 N. Y. 357, 303 U. S. 158; Matter of Long Island Lighting Co. v. Maltbie, 249 App. Div. 918; Matter of Yonkers R. R. Co. v. Maltbie, 251 App. Div. 204; People ex rel. Binghamton Light, Heat & Power Co. v. Stevens, 203 N. Y. 7.) VI. Ever since the enactment of the statute the commission has consistently construed its rate provisions as referring to the accrued depreciation existing in the properties. (Matter of Yonkers Elec. Light & Power Co. v. Maltbie, [1934] 1 P. S. C. 644, 245 App. Div. 419, 271 N. Y. 364; Matter of Upstate Tel. Corp. v. Maltbie, [1934] 1 P. S. C. 609, 154 Misc. 512, 243 App. Div. 848; Matter of Bronx Gas & Elec. Co. v. Maltbie, [1934] 1 P. S. C. 621, 246 App. Div. 657, 271 N. Y. 364.) VII. The commission did not err in determining to fix temporary rates after the hearings had been “ closed ”. (Staten Island Edison Corp. v. Maltbie, 267 App. Div. 72, 292 N. Y. 611; Matter of Bronx Gas & Elec. Co. v. Maltbie, 271 N. Y. 364; Driscoll v. Edison Light & Power Co., 307 U. S. 104; Matter of Consolidated Edison Co. v. Maltbie, 299 N. Y. 172.) VIII. The commission did not err in respect to the manner of adopting its estimate of accrued depreciation. (O’Hehir v. Central New England Ry. Co., 152 App. Div. 677; Staten Island Edison Corp. v. Maltbie, 267 App. Div. 72, 292 N. Y. 611; Matter of Bronx Gas & Elec. Co. v. Maltbie, 271 N. Y. 364; Matter of Grade Crossings of N. Y. C. R. R. Co. [Buffalo], 297 N. Y. 246; United States v. Jones, 336 U. S. 641; Matter of Consolidated Edison Co. v. Maltbie, 299 N. Y. 172.)

      John P. McGrath, Corporation Counsel (Andrew Bellanca and James J. Thornton of counsel), for City of Hew York, amicus curice, in support of appellants’ position.
    The requirement of section 114 of the Public Service Law that a hearing he held prior to the fixation of a temporary rate presupposes that there be a judicial determination of the true original cost less accrued depreciation of the property used in the public service, not an unverified acceptance of the company’s hook figures thereof. (New Jersey R. R. Transp. Co, v. Suydam, 17 N. J. L. 25 Twin Falls Salmon Riv. Land & Water Co. v. Caldwell, 242 F. 177; Coyle v. Commonwealth, 104 Pa. 117; Spalding v. Spalding, 3 How. Prac. 297; New York Tel. Co. v. Prendergast, 300 F. 822; Lindheimer v. Illinois Bell Tel. Co., 292 U. S. 151; Southern Bell Tel. & Tel. Co. v. Railroad Comm., 5 F. 2d 77; Pouch v. Prudential Ins. Co., 204 N. Y. 281.)

      Harry Lesser for Cranford Taxpayers Association and others, amici curice, in support of appellants’ position.
    The commission did make its own estimate of accrued depreciation. The temporary reduction in electric rates was fully justified upon the record.

      Jacob H. Goetz, James P. Hill, Bichard Joyce Smith and Cameron F. MacBae for respondent.
    I. The commission was not authorized by section 114 of the Public Service Law to base the temporary rate order upon its own estimate of original cost less accrued depreciation of the company’s physical property, in substitution for the amount actually shown in the company’s duly verified reports to the commission and hooks of account. (Matter of Bronx Gas & Elec. Co. v. Maltbie, 271 N. Y. 364; Missouri ex rel. Southwestern Bell Tel. Co. v. Public Service Comm., 262 U. S. 276; Smyth v. Ames, 169 U. S. 466; Matter of Village of Boonville v. Maltbie, 272 N. Y. 40; Matter of Upstate

      Tel. Corp. v. Maltbie, [1934] 1 P. S. C. 609, 154 Misc. 512, 243 App. Div. 848; Matter of New York Edison Co. v. Maltbie, 244 App. Div. 685, 271 N. Y. 103; Matter of General Reinsurance Corp. v. Pink, 269 N. Y. 347; Lawrence Constr. Corp. v. State of New York, 293 N. Y. 634.) II. Assuming that the question of depreciation presented issues of fact, the commission was bound to consider and weigh all of the relevant evidence given by the opposing witnesses, and its failure to do so amounted to a denial of due process of law to the company. (Matter of New York State Guernsey Breeders Co-op. v. Noyes, 284 N. Y. 197; Morgan v. United States, 298 U. S. 468; Railroad Comm. v. Pacific Gas & Elec. Co., 302 U. S. 388; New York Water Service Corp. v. Water Power & Control Comm., 283 N. Y. 23; Mississippi Riv. Fuel Corp. v. Federal Power Comm., 163 F. 2d 433.) III. Section 114 of the Public Service Law, if construed to authorize the present action of the commission, is unconstitutional. (Matter of Bronx Gas & Elec. Co. v. Maltbie, 271 N. Y. 364; Bluefield Water Works & Improvement Co. v. Public Service Comm., 262 U. S. 679; Federal Power Comm. v. Hope Natural Gas Co., 320 U. S. 591; Pennsylvania Power <& Light Co. v. Public Service Comm., 19 P. U. R [N. S.] 433, 193 A. 427 [Pa.]; Driscoll v. Edison Light S Power Co., 307 U. S. 104.)
   Ftjld, J.

This appeal, taken as of right by the Public Service Commission, requires review of a nonunanimous order of the Appellate Division, Third Department, annulling an order of the commission which fixed temporary rates for electricity supplied by the Consolidated Edison Company of New York, Inc., within the City of New York. In fixing temporary rates, the commission purported to act under the authority of section 114 of the Public Service Law, and whether or not it acted in conformity with that statute, is the question presented in this article 78 proceeding.

Section 114, added to the Public Service Law in 1934 (L. 1934, eh. 287), reads as follows:

To facilitate prompt action by the commission in proceedings involving the reasonableness of the rates of any public utility and to avoid delay in any such rate proceeding, the commission is hereby authorized to require any public utility company to establish, provide and maintain continuing property records, including a list or inventory of all of the physical property actually used in the public service, and to require any public utility company to keep its books, accounts and records in such manner as to show currently the original cost of said physical property and the reserves accumulated to provide for the retirement or replacement of said physical property.

“ The commission may, in any such proceeding, brought either on its own motion or upon complaint, upon notice and after hearing, if it be of opinion that the public interest so requires, immediately fix, determine and prescribe temporary rates to be charged by said utility company pending the final determination of said rate proceeding. Said temporary rates so fixed, determined and prescribed shall be sufficient to provide a return of not less than five per centum upon the original cost, less accrued depreciation, of the physical property of said public utility company used and useful in the public service, and if the duly verified reports of said utility company to the commission do not show the original cost, less accrued depreciation, of said property, the commission may estimate said cost less depreciation and fix, determine and prescribe rates as hereinbefore provided.

Temporary rates so fixed, determined and prescribed under this section shall be effective until the rates to be charged, received and collected by said utility company shall finally have been fixed, determined and prescribed. The commission is hereby authorized in any proceeding in which temporary rates are fixed, determined and prescribed under this section, to consider the effect of such rates in fixing, determining and prescribing rates to be thereafter charged and collected by said public utility company on final determination of the rate proceeding.”

In May of 1946, the commission, on its own motion, instituted an investigation into all of the rates charged by the Consolidated Edison Company. Hearings begun in June, 1946, continued from time to time over a two and a half year period, until December, 1948. On the last day of the actual hearing, the chairman of the commission, who was presiding, announced that the commission was considering the adoption of a temporary rate order. Over the company’s protest, the commission on December 30, 1948, entered the order, here under review, that there be a 10% reduction in the total charges made to every consumer for electric service in specified service classifications. The temporary rates, expressly made effective “ until final rates are determined ”, were calculated to accomplish a gross reduction to customers of $21,500,000, which, after adjustment for reduced taxes, is equivalent to a reduction of $12,427,000 in the company’s net income.

On a prior appeal recently before us, we held that, in view of the recoupment provisions of section 114, the alleged failure of the commission to follow the requirements of the statute did not warrant an injunction against the enforcement of its order pending appeal, and we accordingly reversed an order of the Appellate Division that granted a stay. (See Matter of Consolidated Edison Co. v. Maltbie, 299 N. Y. 172; see, also, Matter of Bronx Gas & Elec. Co. v. Maltbie, 271 N. Y. 364.) As a result of that decision, the temporary rates went into operation as of January 10, 1949, and, although the Appellate Division thereafter annulled the commission’s order, they continue in effect down to the present through stays of that court’s decision pending our review. As indicated, following consideration of the commission’s determination on the merits, the Appellate Division concluded that the commission had failed to comply with those requirements of section 114 which prescribe the manner of fixing temporary rates.

The company’s threshhold contention that, since the hearings on the rate investigation had been closed, the commission was functus officio and, by that token, without power to make a temporary rate order, requires but short answer. (And see Matter of Consolidated Edison Co. v. Maltbie, supra, 299 N. Y. 172.) The legislature made it exceedingly clear that the commission is authorized to fix temporary rates “ pending * * * final determination ” of a permanent rate proceeding if the commission be “of opinion that the public interest so requires ” (§ 114, 2d par.). The time limitation implicit in the statute is that temporary rates can be imposed only after a permanent rate proceeding has been commenced and before its final determination. As the legislature undoubtedly appreciated, the facts which make possible a temporary rate order — or the considerations which point to its propriety — may not be adduced or brought to the commission’s attentian until the final stages of the proceeding, for such proceedings do not follow any set or prescribed course. And, beyond that, the legislature must also have realized, considerable time, even after the hearings are closed and the record made, may frequently be required for ultimate determination of the very complicated rate problem presented.

The principal contention advanced by the company is that the commission violated the mandate of the statute that the temporary rates be fixed and determined so as to yield a return of not less than 5% “ upon the original cost, less accrued depreciation, of the physical property of said public utility company used and useful in the public service ” (§ 114, 2d par.).

There is no question that the commission attempted to fix the rates in just the way described and, if the commission’s method in ascertaining the amount of accrued depreciation be correct, there is also no question that the result complies with the requirements of the statute. In arriving at its result, the commission found the original cost of the property, as shown on the company’s books, to be $813,000,000, from which it deducted $255,000,000, as representing accrued depreciation. This latter sum was made up of $160,000,000, which was the amount carried on the company’s books as reserve for depreciation plus an additional sum of $95,000,000, which, an engineer employed by the commission testified, was the amount of the deficiency in that reserve. The inclusion of this additional sum is justified by the commission upon the ground that the books of the company “ do not show ” the amount of accrued depreciation and that, by reason thereof, the commission was authorized by the second paragraph of section 114 to proceed to make its own “ estimate ” of the accrued depreciation.

The Appellate Division held that the expression, “ accrued depreciation ”, used in that second paragraph of section 114, refers “ to the same thing ” as the expression, the reserves accumulated to provide for the retirement or replacement of said physical property ”, contained in the first paragraph; that the latter phrase relates to the amount actually carried by the company on its books for the purposes specified; and that, since the books did show currently ” the amount of such accumulated reserves — namely, $160,000,000 — the commission was required to use that figure as the amount of 1 ‘ accrued depreciation ” and could not undertake to make its own estimate.

In the literature of accounting, including public utility accounting, the term, ‘ ‘ accrued depreciation ’ ’, is by no means synonymous with the term, “ reserves accumulated to provide for the retirement or replacement of * * * property.” Phrased somewhat differently, the retirement reserve was — under the accounting practice followed generally by electric utility companies until recent years — designed primarily as a reserve for the equalization of retirements as required from time to time and was not intended to reflect or represent accrued depreciation. (See, e.g., Matter of New York Edison Co. v. Maltbie, 244 App. Div. 685, 691, affd. 271 N. Y. 103; see, also, National Association of Railroad and Utility Commissioners, Report of Committee on Depreciation [1943], pp. 4-7.) Certainly, in fixing permanent rates, the amount of accrued depreciation would have to be ascertained, and the reserves shown on the books, no matter how denominated, would not be controlling. (See, e.g., People ex rel. Consolidated Water Co. v. Maltbie, 275 N. Y. 357, 368-369, affg. 245 App. Div. 866; Matter of Long Island Lighting Co. v. Maltbie, 249 App. Div. 918; cf. Federal Power Comm. v. Hope Natural Gas Co., 320 U. S. 591, 597-598, 606-607.)

It is strongly urged, however, that whatever these terms — Accrued depreciation and reserves accumulated for retirement or replacement of property — may mean in other contexts, to draw a distinction between them in the present context would be to distort the legislative design. In making a temporary rate order, expedition and promptness and the ready availability of factual information are prime requisites. In other words, the argument runs, the legislature determined that, in computing temporary rates, reliance should be placed only upon the facts and figures readily disclosed by the company’s books, since they had at least the virtue of definiteness in contrast to the uncertainty that would stem from the traditional use of speculative and varying expert opinion. (See Matter of Bronx Gas & Elec. Co. v. Maltbie, supra, 271 N. Y. 364, 372-373.)

These considerations are indeed weighty and may not be minimized. They would, in our view, be conclusive if the commission had the authority to require that the reserves accumulated and shown on the books reflect correctly the accrued depreciation of the property. But we look in vain for such authorization. On the contrary, the commission has twice endeavored to prescribe the method of setting up depreciation reserves and twice have those attempts been held to be beyond the powers conferred upon the commission. (See Matter of New York Edison Co. v. Maltbie, sufra, 271 N. Y. 103, affg. 244 App. Div. 685; People ex rel. New York Rys. Co. v. Public Service Comm., 223 N. Y. 373; see, also, 1 Report of Commission on Revision of Public Service Commissions Law [1930], p. 128; cf. Matter of Rochester Gas & Elec. Corp. v. Maltbie, 298 N. Y. 867.) It is true that this court, in affirming the determination in the New York Edison Company case, pointed out that the commission could have elicited from the companies there involved the information sought “ by directions of the Commission that would have been open to none of the objections to its present orders ” (271 N. Y., at p. 112). The very objection that was there urged by the companies and upheld as valid by the court, however, was that the commission could not compel the companies to set up their reserves on the basis of such information.

The result, therefore, is that, although the commission is empowered to obtain the information as to the amount of accrued depreciation and to require that such information be preserved somewhere in the books and records of the company, the commission lacks the power-to require the company to accumulate reserves in any amount other than as the company’s own judgment dictates. The reserves accumulated, as “ shown currently ” on the books, pursuant to the first paragraph of section 114, would consequently continue to be the amount decided upon by the company in the exercise of its own unfettered judgment and not subject to correction by the commission.

It challenges reason to suppose that the legislature purposefully required that the commission accept willy-nilly the company’s figures on depreciation regardless of how incorrect or inaccurate they might be. “ If that were so ”, as Presiding Justice Foster stated in the course of his dissenting opinion below, “ a utility company could put any figures on its report to indicate accrued depreciation and the commission would be obliged to accept them. Obviously, this cannot have been the legislative intent ”. (275 App. Div. 475, 483.) While it may be impossible “ completely to fathom the legislative mind ” (People ex rel. New York Central & H. R. R. R. Co. v. Public Service Comm., 227 N. Y. 248, 257), it is safe to venture that the legislature could not have intended that the commission be treated merely as a clerk making' purely mathematical computations. (Cf. United States v. Morgan, 313 U. S. 409, 415.)

There is certainly nothing in either the express language or the general design of the statute which compels such a result. On the contrary, recognition can be given to the fact that the expressions in the two paragraphs — reserves accumulated and accrued depreciation — are obviously related without forcibly substituting the one for the other. Indeed, such substitution produces illogical and unintended consequences. For example, if the term, “ accrued depreciation ”, were substituted for the phrase in the first paragraph of section 114, ‘ reserves accumulated to provide for the retirement or replacement ’ ’ of property, the paragraph would authorize the commission to require utility companies to show currently on their books the accrued depreciation of their property, contrary to the decision in the New York Edison Company case (244 App. Div. 685, affd. 271 N. Y. 103). Similar consequences would follow if the phrase in the first paragraph were substituted for the term “ accrued depreciation ”, contained in the second paragraph. The relationship between the two terms is given effect if it be presumed, as would ordinarily be the case, that, for the purposes of a temporary rate order, the reserves accumulated for retirement or replacement, as shown on the books, represent the accrued depreciation specified in the second paragraph — for such reserves unquestionably constitute some evidence of accrued depreciation. But this presumption is not made conclusive.

In a case such as the present, where a witness for the commission has testified that the figure for accrued depreciation is $95,000,000 more than the reserve accumulated by the company on its books, and a witness for the company itself has indicated that the actual depreciation exceeded the book reserve by some $40,000,000, the commission need not blind itself to the fact that the reserve so accumulated upon the company’s books does not — as reasonable men would use the word —“show” the accrued depreciation. The commission was authorized, therefore, to make an estimate of that item. In the light of the evidence adduced, it may not be said that its figure of $255,000,000 was without support. While other and variant figures were in the record, the courts will not and cannot assume that the commission failed to consider them in reaching its estimate, which concededly was not a final determination.

The construction which we have placed upon the statute impresses us as being more in accord with the legislative design, more reasonable and fair, than alternative interpretations. It gives full play to all of the statutory prescriptions and is consistent with all of its objectives. Expedition and promptness will be achieved, for reliance will continue to be placed upon the amount accumulated by the company rather than upon an estimate by the commission, except where the former is known to be misleading. In the latter case, substitution of a more accurate figure would seem to be demanded if meaning is to be given to the statutory direction that “ the effect ” of temporary rates is an element to be weighed and considered in determining permanent rates. (Public Service Law, § 114, 3d par.; see Matter of Bronx Gas & Elec Co. v. Maltbie, supra, 271 N. Y. 364, 375.) The value of experience under temporary rates is naturally increased in proportion to the correspondence between the rate base for such temporary rates and the base for permanent rates. And, finally, if a temporary rate order is made within the framework of section 114 — as it here was — the recoupment provisions of that section apply to prevent any injustice or prejudice to the company even if the temporary rate fixed is later found to have been placed at too low an amount. (See Matter of Consolidated Edison Co. v. Maltbie, supra, 299 N. Y. 172; Matter of Bronx Gas & Elec. Co. v. Maltbie, supra, 271 N. Y. 364.)

The order of the Appellate Division should be reversed and the determination of the Public Service Commission confirmed, with costs in this court and in the Appellate Division.

Lotjghran, Ch. J., Lewis, Desmond and Bromley, JJ., concur with Fuld, J.; Conway and Dye, JJ., dissent and vote to affirm on the opinion of Justice Santry at the Appellate Division.

Order reversed, etc. [See 300 N. Y. 645.]