text:
    In the Matter of the Application of the People of the State of New York, by Francis R. Stoddard, Jr., Superintendent of Insurance of the State of New York, for an Order to Take Possession of the Property and Assets of Norske Lloyd Insurance Company, Ltd. James A. Beha, as Superintendent of Insurance of the State of New York, et al., Appellants; Norwegian Receiver of Norske Lloyd Insurance Company, Limited, et al., Respondents.

      (Argued May 28, 1928;
    decided July 19, 1928.)

      Alfred C. Bennett and Clarence C. Fowler for appellant.
    All assets of the domesticated United States Branch of the Norske Lloyd Insurance Company, Ltd., comprise a trust fund for the payment of all debts and liabilities arising out of the business transacted by the branch in this State and country. (Matter of People [City Equitable Fire Ins. Co., Ltd.], 238 N. Y. 147; Matter of People [Norske Lloyd Ins. Co., Ltd.], 242 N. Y. 148; Blake v. McClung, 172 U. S. 239; Lawrence v. Nelson, 21 N. Y. 158; N. Y. Life Ins. Co. v. Stratham, 93 U. S. 24; Ill. Surety Co. v. Paoli, 121 N. Y. Supp. 340; Mygatt v. N. Y. Protection Ins. Co., 21 N. Y. 52; De Peyster v. Am. F. Ins. Co., 6 Paige, 486.) Interest should be paid to all policyholders and creditors of the domesticated United States Branch on their debts at the legal rates prescribed by the statutes of this State. (Blake v. McClung, 172 U. S. 239; Martine v. International Life Ins. Co., 53 N. Y. 339; Sands v. N. Y. Life Ins. Co., 50 N. Y. 626; Spring Coal Co. v. Keech, 239 Fed. Rep. 48; People v. Am. Loan & T. Co., 172 U. S. 871; Thomas v. Western Car Co., 149 U. S. 116; Woerz v. Schumaker, 161 N. Y. 530; Matter of O’Berry, 179 N. Y. 285; Havender v. Brodbeck, 83 Misc. Rep. 9; Hatcher v. Lewis, 4 Rand [Va.], 152; Pyor v. City of Buffalo, 197 N. Y. 123,)

      Louis J. Wolff for Marsh & McLennan, Inc., et al., appellants.
    The claims of policyholders and creditors of the domesticated United States Branch of the Norske Lloyd Insurance Company, Ltd., upon which interest has been disallowed, are interest-bearing in character. (American Iron Co. v. Seaboard Air Line Ry. Co., 233 U. S. 261; Prager v. N. J. Fidelity & Plate Glass Ins. Co., 245 N. Y. 1; Tuzzeo v. American Bonding Co., 226 N. Y., 171; Faber v. City of New York, 222 N. Y. 255; Klausner
      v. Queens Fur Dressing Co., Inc., 130 Misc. Rep. 579; People v. Merchants’ Trust Co., 187 N. Y. 293; People v. Security Life Ins. & Annuity Co., 78 N. Y. 114; Mason v. Cronk, 125 N. Y. 496.) The fact that the United States Branch of the Norske Lloyd Insurance Company, Ltd., was taken over for liquidation by the Superintendent of Insurance of New York because of the insolvency of the company at its domicile, did not stop the running of interest upon those claims, in view of the solvency of the United States Branch. (Thomas v. Western Car Co., 149 U. S. 95; People v. American Loan & Trust Co., 172 N. Y. 371; Matter of Empire State Surety Co., 125 Misc. Rep. 806; People v. Norske Lloyd Ins. Co., Ltd., 130 Misc. Rep. 97.) The deposits and trust funds of the Norske Lloyd Insurance Company, Ltd., must be applied to pay the claims of the appellants in full, before any portion can be sent abroad for the benefit of other claimants. (People ex rel. Ruggles v. Chapman, 64 N. Y. 557; Matter of People [City Eq. Fire Ins. Co.], 238 N. Y. 147; Frasse & Co. v. Hartford Automotive Parts Co., 300 Fed. Rep. 876; People v. Insurance Co., 147 N. Y. 25.)

      M. P. Detels and C. W. Harvey for Fireman’s Fund Insurance Company et ah, appellants.
    Although the United States Branch is not a separate corporation it must be treated as a separate organization so far as its creditors are concerned. (Martine v. International Life Ins. Society, 53 N. Y. 339; Morgan v. Mutual Benefit Life Ins. Co., 189 N. Y. 447; Matter of Willcox, 123 App. Div. 86; Lockwood v. U. S. Steel Corp., 209 N. Y. 375; Comey v. United Surety Co., 217 N. Y. 268; McClement v. Sup. Court Ind. Order Foresters, 88 Misc. Rep. 475; James & Co. v. Second Russian Ins. Co., 239 N. Y. 248.) A receivership does not necessarily terminate the right of a creditor to interest. (American Iron Co. v. Seaboard Air Line, 233 U. S. 261.) Creditors of the United States Branch will not be paid in full unless they receive interest. (Prager
      v. N. J. Fid. & Plate Glass Ins. Co., 245 N. Y. 1; General Supply & Constr. Co. v. Goelet, 241 N. Y. 28.)

      George W. Martin and Richard S. Emmet for North Star Insurance Company et al., amici curies.

    The creditors of the American Branch are “ secured ” and not merely “ preferred.” (Matter of People [Norske Lloyd Ins. Co., Ltd.], 242 N. Y. 148; People v. Granite State Provident Assn., 161 N. Y. 492.) Neither the appointment of a receiver nor the taking over by him of the corporate assets terminates the right of any creditor to have interest run on his claim, but merely limits his remedies in rem to effectuate its payment. (Thomas v. Western Car Co., 149 U. S. 95; People v. American Loan & Trust Co., 172 N. Y. 371; American Iron Co. v. Seaboard Air Line, 233 U. S. 261; People v. Merchants Trust Co., 187 N. Y. 293.) The general rule that collateral security must be devoted to the payment of the secured creditors with interest in full before unsecured creditors can share in it is not suspended by receivership but determines the remedial rights of the secured creditors against the trust funds set up by the Norske Lloyd for their security. (Chemical Nat. Bank v. Armstrong, 59 Fed. Rep. 372; American Engineering Co. v. Met. By-Products Co., Inc., 267 Fed. Rep. 90; 254 U. S. 640; Spring Coal Co. v. Keech, 239 Fed. Rep. 48; Hoover Steel Ball Co. v. Schaefer Ballbearing Co., 90 N. J. Eq. 515; People v. Granite State Provident Assn., 161 N. Y. 492.)

      Charles E. Hughes, Clarence B. Smith and Wendell P. Barker for Norwegian Receiver of Norske Lloyd Insurance Company et al., respondents.
    The general rule is that, where funds are insufficient- to pay creditors in full, preferred creditors will not receive interest. (People v. American L. & T. Co., 172 N. Y. 371; People v. Metropolitan Surety Co., 158 App. Div. 647; Matter of Carnegie Trust Co., 161 App. Div. 280; U. S. F. & G Co. v. Car

      negie Trust Co., 161 App. Div. 429; U. S. F. & G. Co. v. Borough Bank, 161 App. Div. 479; Matter of Empire State Surety Co., 125 Misc. Rep. 806; Mixter v. Mohawk Clothing Co., 155 N. Y. Supp. 647; Thomas v. Car Co., 149 U. S. 95; 37 L. Ed. 663.) In matters of supervision a foreign corporation doing business here is treated like a domestic corporation. (Norske Lloyd Case, 242 N. Y. 148; Comey v. United Security Co., 217 N. Y. 268; Lockwood v. U. S. Steel Corp., 209 N. Y. 375; Remington & Sherman Co. v. Niagara Bank, 54 App. Div. 358; Shepard & Morse Co. v. Burleigh, 27 App. Div. 99; German Alliance Ins. Co. v. Lewis, 233 U. S. 389; Matter of People [City Eq. Fire Ins. Co.], 238 N. Y. 147.)

      Willard U. Taylor, Irving Mariash and Daniel A. Dorsey for American Exchange National Bank et ah, respondents.
    There is no provision in any statute which provides for the payment of interest to the secured creditors in this proceeding and, therefore, no interest is payable to them. (People v. American L. & T. Co., 172 N. Y. 371; Murphy v. Second Russian Ins. Co., 240 N. Y. 554.) The United States branch of a foreign insurance company is not a separate entity, except as expressly provided by statute and limited to such statutory purposes. Legal fictions will not be extended beyond the necessities of their creation. (Matter of People [Norske Lloyd Ins. Co.], 242 N. Y. 148.) Principles of comity will extend the doctrine that equality is equity to its full measure, even as between foreign and domestic creditors, unless expressly limited by statute. (People v. Granite State Provident Assn., 161 N. Y. 492.)

      William H. Hotchkiss for British and Foreign Marine Insurance Company et al., respondents.
    The United States branch of a foreign country insurance company is. considered as a separate entity only for the purposes of police power supervision while said branch is transacting business in this State. It is not considered a separate entity for all purposes. (German Alliance Ins. Co. v. Lewis, 233 U. S. 389; Matter of Norske Lloyd Ins. Co., 242 N. Y. 148; People v. American L. & T. Co., 172 N. Y. 371; Murphy v. Second Russian Ins. Co., 240 N. Y. 554.)
   Lehman, J.

The Norske Lloyd Insurance Company, Limited, is a Norwegian corporation. It was authorized in 1916 to do business in the State of New York. Before it commenced to transact business in this State it deposited securities with the Insurance Department of the State and executed a deed of trust of its assets and property here to the Guaranty Trust Company of New York for the general benefit and security of all its policyholders in the United States, as required by the Insurance Law (Cons. Laws, ch. 28), section 27. Thereafter the corporation became insolvent, and liquidators were appointed in Norway and in England. In November, 1922, the corporation was adjudicated bankrupt by the Bankruptcy Court in Norway, and an official receiver was appointed there to take possession of the company’s assets and property for distribution among its creditors.

In May, 1922, pursuant to an order of the Supreme Court, the Superintendent of Insurance of the State of New York took possession of the assets of the corporation in the United States for the purpose of liquidation and distribution. Claims were presented to the Superintendent of Insurance by United States citizens and by citizens of foreign countries. These claims arose out of transactions which the claimants had with the corporation in foreign countries, as well as in the United States. In Matter of People (Norske Lloyd Insurance Co.) (242 N. Y. 148) we held that only those who dealt with the company in the United States were entitled to the protection of the statute and to share in the distribution made thereunder.” Other creditors, including American citizens, may share only in the distribution of assets of the foreign liquidators, appointed in the jurisdiction where the corporation is domiciled, to whom the Superintendent of Insurance must transmit any surplus of the funds in his charge, remaining after the payment of those creditors who are entitled to payment therefrom. (Matter of People [City Equitable Fire Insurance Company], 238 N. Y. 147.) Provision for the proof of claims in this country by creditors who are not entitled to share in the distribution of the assets by the Superintendent of Insurance may be made by the courts as a condition for the transmission of the surplus to the foreign liquidator, but such proof is “ against, and for the purpose of distribution of assets by, the foreign receiver.” (Matter of People [Norske Lloyd Insurance Co.], supra.)

The report of the Superintendent of Insurance now shows that there will be a large surplus of assets in his charge after the payment of the claims of creditors entitled to share in the distribution of assets here. Even though this surplus is transmitted to the foreign liquidator, the American and foreign creditors, who dealt with the foreign branches of the company and who may share only in the distribution by the foreign liquidator, will not receive dividends amounting to as much as forty per cent of their claims. The Appellate Division has held that under these circumstances the creditors whose claims arise from transactions with the American branch of the company are not entitled to any interest upon their claims which accrued during the period of liquidation. It has certified to us the question of whether such creditors “ are entitled to be paid interest from the day their claims were proved until paid, in addition to the payment of their claims in full.”

“As a general rule, after property of an insolvent passes into the hands of a receiver or of an assignee in insolvency, interest is not allowed on the claims against the funds. The delay in distribution is the act of the law; it is a necessary incident to the settlement of- the estate.” (Thomas v. Western Car Co., 149 U. S. 95.) Delay in the payment of a claim undoubtedly results in injury to the creditor. He does not receive full compensation unless interest is paid to him during the time in which payment of his claim is postponed. When the fund is insufficient to pay in full all the creditors who have the right to share in it, the burden of the consequent loss and injury should be equitably distributed among the creditors. The rule that interest is not allowed after the property of an insolvent has passed into the hands of an official liquidator applies only in the distribution of the proceeds of the property by the liquidator where the proceeds are insufficient to pay all creditors in full. It is a rule of administration and not of law, for the law does not contemplate that a debtor may stop the running of interest until he has paid his debt. Interest continues to run against the debtor during liquidation; but on the principle that equality is equity, it has been held that all who have a right to share in the distribution of the fund in liquidation must bear equally the burden of the delay, in the payment of their claims where the fund is insufficient to pay all in full. The rule is not applied when the reason for the rule fails. (American Iron & Steel Mfg. Co. v. Seaboard Air Line Ry., 233 U. S. 261.) If the fund in liquidation proves sufficient to pay all claims in full with interest, then interest accruing during liquidation is allowed. (People v. Merchants’ Trust Company, 187 N. Y. 293.)

Here, as we have pointed out, the assets of the corporation in the hands of the Superintendent of Insurance are more than sufficient to pay the claims, with interest, of all creditors who may share in the distribution of the proceeds of the assets here. Other claimants may share only in the surplus when transmitted to the domiciliary liquidator, after the creditors who are protected by the provisions of the Insurance Law have been paid. Even proof of claims by such other creditors is permitted in this country only as a matter of favor and for the purpose of distribution of assets by the foreign receiver. The question before us is whether the creditors who may share in the distribution of the assets by the Superintendent of Insurance shall not be paid interest accruing during liquidation because the assets of the corporation abroad are insufficient to pay other creditors in full.

This court has laid down the general rule that “ while interest is allowed as against the corporation itself, or its stockholders, if the assets are sufficient for the purpose, as between preferred and unpreferred creditors no interest is allowed after the law takes charge through the appointment of a receiver.” (People v. American Loan & Trust Co., 172 N. Y. 371.) It was there said that the receiver “is appointed for the benefit of all the creditors, both preferred and unpreferred, and holds the assets * * * primarily for them * * *. Thereupon by operation of law the creditors become the equitable owners of the assets and the administration of affairs is for their benefit as such. The claims of creditors * ’ * * are not proved against the insolvent and dissolved nonentity, but against the fund in the receiver’s hands. In the distribution of that fund the general rale applicable to insolvent estates, that equality is equity, should prevail so far as the statute, when reasonably construed, will permit.” Denial in the present case of payment of interest to the claimants who may share in the distribution of the assets of the insurance company here is based upon a supposed analogy between such claimants and the preferred creditors of an insolvent corporation.

The analogy seems quite illusory. We have pointed out in Matter of People (Norske Lloyd Insurance Company) (supra) that the Legislature in allowing foreign insurance companies “to do business in this State and country intended to treat the domestic agency largely as a complete and separate organization, to place it on a parity with domestic corporations, to supervise and regulate it as such and to require it by the deposit of prescribed assets to set up within this country a capital corresponding to that of domestic corporations and which should be security for business transacted by it here and not else- *•- where.” Creditors who have dealt with the insurance company here have more than a preference in the distribution of the proceeds of the assets of the corporation on liquidation, or even than a specific lien upon the assets. They are the only claimants who are entitled to share in that distribution. They are the only persons who on liquidation may be regarded in some sense as the equitable owners of the fund in liquidation. All others must look for satisfaction of their claims to the domiciliary representative of the foreign company and not to the fund here. The doctrine that equality is equity can have no application in the liquidation of assets beyond the groups or classes which may share in the distribution under the State. Here “ the statute does not classify in different degrees of preference those who are entitled to its protection. They are all in the same class; claimants are entitled to equal protection of the statute or to none at all.”

We cannot escape the conclusion that the Legislature in providing carefully for the deposit here of capital by the foreign company for the security and protection of those who transact business with the company here intended to provide protection as complete as can be given to them through the liquidation of the assets or capital so deposited for their benefit. Concededly, under the statute the claimants who are entitled to the protection of the statute would receive in this proceeding payment of interest on their claims if the foreign corporation were not insolvent. These claimants may not be deprived of the full benefit of the provisions of the statute requiring deposit of capital here sufficient to protect fully those dealing with the foreign company here, because elsewhere the assets applicable to payment of debts proves insufficient.

The orders of the Appellate Division should be reversed, and that of Special Term affirmed, with costs in the Appellate Division and in this court, and the question certified answered Yes.” i

Caedozo, Ch. J., Pound, Grane, Andbews, Kellogg and O'Bbien, JJ., concur.

Ordered accordingly.


source: Caselaw Access Project

author: Lehman, J.

license: Public Domain

text:
    The People of the State of New York ex rel. The City of New York, Appellant and Respondent, v. John R. Yale et al., as Assessors of the Tax District of the Town of Southeast, Putnam County, Respondents and Appellants.

      (Argued May 29, 1928;
    decided July 19, 1928.)

      George P. Nicholson, Corporation Counsel (Frank T. Fitzgerald of counsel), for relator, appellant and respondent.
    The Appellate Division erred in affirming the award of costs and an additional allowance granted at Special Term, since respondents are entitled to costs only in the event the writ of certiorari is quashed or the assessment confirmed. (Evans v. Supreme Council of Royal Arcanum, 223 N. Y. 504; City of New York v. Keeler, 205 App. Div. 467; People ex rel. City of New York v. Keeler, 237 N. Y. 335: People ex rel. City of New York v. Pietschker, 216 App. Div. 815.)

      Walter H. Young for defendants, respondents and appellants.
    The costs and additional allowance granted at Special Term were properly not disturbed by the Appellate Division and should not be disturbed by this court. (Nod Away Company v. Carroll, 240 N. Y. 252; People v. New York Central R. R. Co., 208 N. Y. 589; Dodge v. Cornelius, 168 N. Y. 242; Menzies v. Harlem Loan Assn., 30 Misc. Rep. 781; Cunningham v. Hewitt, 84 App. Div. 114.)
   Lehman, J.

Fourteen parcels of land belonging to the relator in the town of South East, Putnam county, have been assessed for sums aggregating $2,015,652. The relator, claiming that the assessments were erroneous, illegal and unjust by reason of overvaluation, sought to review the assessments by writ of certiorari. The court at Special Term found that some of the parcels of land were overvalued, but it also found that three other parcels were assessed at less than their full value, and that there was no overvaluation in the total assessments of all the parcels; and an order was entered confirming the assessments. Costs and an extra allowance of $2,009 were granted to the tax assessors. Upon appeal to the Appellate Division, the increases in the assessments of parcels, which the court at Special Term had found were assessed at less than their full value, were eliminated. Otherwise the order of Special Term was afiirmed, including the award of costs and extra allowance against the relator. The result is that the aggregate assessments of the relator’s land have been reduced from the sum of $2,015,652 to the sum of $1,575,545. Both sides have appealed from the order of the Appellate Division.

We find no error in the valuation placed by the court upon the separate parcels of land assessed. No property which the court held was subject to assessment is exempt under section 480 of the Greater New York Charter. “ The court was without power to increase the assessment of one parcel for the purpose of overcoming the effect of a reduction of the assessments of the others.” (People ex rel. City of New York v. Keeler, 237 N. Y. 332.) The modification of the order of Special Term, in this respect, by the Appellate Division was correct.

When that modification was made the court no longer had power to award costs and an extra allowance against the relator. The assessment complained of has been reduced by an amount less than one-half the amount claimed before the assessing officers. In such case, under section 294 of the Tax Law (Cons. Laws, ch. 60), prior to its amendment in 1920> the tax authorities were entitled to an award of costs against the petitioner. Under that section as amended in 1920, where the assessment is reduced by an amount less than half the reduction claimed before the assessing officers, costs and disbursements may, in the discretion of the court, be awarded against the tax district represented by the officers whose proceedings may be reviewed.” The statute vests no discretion in the court, in such case, to award costs against the relator.

It is said that the relator is precluded from a review of the award of costs because it failed to raise this question in the Appellate Division. The order of Special Term reviewed' by the Appellate Division provided for no reduction in the assessments. Costs against the petitioner followed as a matter of law. The petitioner might complain of the order confirming the assessments; but until the Appellate Division reduced the assessments the petitioner might not complain of the award of costs. The petitioner brings here for review no error of the Special Term in awarding costs but the error of the Appellate Division in allowing the award of costs to remain in the order after it had destroyed the statutory foundation for the award of any costs against the petitioner by reducing the assessments. That error was, in fact, called to the attention of the Appellate Division upon the resettlement of its order. It may now be reviewed by this court.

The order of the Appellate Division should be modified by striking out the award of costs and extra allowance, and as modified affirmed, without costs.

Cabdozo, Ch. J., Pound, Crane, Andbews, Kellogg and O’Bbien, JJ., concur.

Ordered accordingly.


author: Per Curiam.

text:
    In the Matter of the Accounting of J. Arthur Keesey, as Executor of David M. Drury, Deceased, Appellant. Trustees of the Masonic Hall and Asylum Fund et al., Appellants; Mary Russell et al., Respondents.
    (Argued May 28, 1928;
    decided July 19, 1928.)

      Frederick N. Van Zandt for executor, appellant.
    The principal of the trusts created by the 9th paragraph of the will vests within two lives in being at the death of the testator and hence there is no illegal suspension of absolute ownership. (Schermerhorn v. Cotting, 131 N. Y. 48; Kahn v. Tierney, 135 App. Div. 897; 201 N. Y. 516; Matter of Hicks, 221 App. Div. 378; Montignani v. Blade, 145 N. Y. 111; Crook v. Kings County, 97 N. Y. 438; Wilber v. Wilber, 45 App. Div. 158.) The duration of the trusts for the benefit of each grandson is nut for a definite fixed period of three years, but the duration of each trust is measured by the lives of two persons in being at the death of the testator, namely, the daughter and a grandson. (Kahn v. Tierney, 135 App. Div. 897; 201 N. Y. 516.)

      John A. Dutton for Trustees of Masonic Hall and Asylum Fund, appellant.
    If the daughter dies within three years of the death of testator, leaving one or both of the grandsons surviving, the resulting trust for each surviving grandson will terminate upon his death, if he also dies within the three years, because the purpose for which the trust is created will then cease. The trusts are thus limited by two lives and are valid. (Sawyer v. Cubby, 146 N. Y. 192; Burke v. O’Brien, 115 App. Div. 574; Appell v. Appell, 177 App. Div. 570; 221 N. Y. 602.)

      S. Howard Cohen for Janice Russell et al., appellants.
    The trusts created do not violate the statute against perpetuities. (Schermerhorn v. Cotting, 131 N. Y. 48.)

      Gustave B. Garfield and Maurice V. Seligson for respondents.
    The entire trust referred to in paragraph “ ninth ” of the will is void because the power of alienation is suspended for a definite period of years from the date of the death of the testator. It embraces a single inseparable scheme of suspension for a period of three years which does not permit of the retention of any part thereof and the whole must be rejected as invalid. (Matter of Horner, 237 N. Y. 489; Matter of Berry, 154 App. Div. 509; 209 N. Y. 540; Brown v. Quintard, 177 N. Y. 82; Davis v. McMahon, 161 App. Div. 458; 214 N. Y. 614; Central Trust Co. v. Egleston, 185 N. Y. 32.)
   Per Curiam.

The dominant purpose of the testator to create a trust, divided into separate shares terminable by separate lives, is written large upon the face of the will. (Matter of Horner, 237 N. Y. 489.) Each beneficiary receives an interest in a share cut from the body of the estate.

The income of one-half of the estate is to be paid to the testator’s daughter during her life. The income of the other half is to be paid to two grandsons “ in equal parts share and share alike ” for a period of three years after the death of the testator. At the expiration of the three years, the testator has directed the trustee to give and deliver to the two grandsons the remaining one-half of my residuary estate in equal parts share and share alike to be from that time on their absolute property.” If either of the grandsons should die before the testator or before the expiration of three years after the death of the testator, then the testator directs that the income from the equal part or share of my remaining one-half of my said residuary estate herein directed to be paid to him be paid by my executor to my daughter.” At her death the said equal part or share shall be paid ” to other persons designated in the will.

At the death of the testator’s daughter, the one-half of the residuary estate, of which she enjoyed the income, must be paid to the two grandsons in equal parts, share and share alike, to be from that time on their absolute property, unless the daughter should die within three years after the death of the testator; in which event the grandsons shall only receive the income until the expiration of the said three years. Provision is made in the will for the disposition of the “ part or share ” directed'to be paid to each grandson, if such grandson should not survive the testator’s daughter; but no provision is made if either grandson should survive the testator’s daughter and should die before the expiration of three years from the testator’s death. It is evident that the testator intended that each, grandson surviving the testator’s daughter should take a vested interest in the part or share directed to be paid to him, though perhaps subject to divestment in case of his death during the period of three years after the death of the testator. That question is not now before us.

Though none of the beneficiaries enjoying the income can receive the principal of the share of the trust estate allotted to him until three years after the death of the testator, in no event can any share be held beyond two lives in being. Then it must be paid to others. The will is valid when effect is given to the intent of the testator plainly expressed in the language of the will. (Schemerhorn v. Cotting, 131 N. Y. 48.)

The order of the Appellate Division and the decree of the Surrogate's Court should be modified, by providing that paragraph ninth of the testator’s will is valid, and as modified affirmed, with costs to appellant.

Gardozo, Ch. J., Pound, Crane, Andrews, Lehman, Kellogg and O’Brien, JJ., concur.

Ordered accordingly.


text:
    The Tecla Corporation et al., Appellants, v. Salon Tecla, Ltd., Respondent.
    (Argued June 21, 1928;
    decided July 19, 1928.)

      Milton R. Weinberger, William Klein, Albert T. Scharps and Jerome Weinstein for appellants.
    The decree of the trial court restraining the use of the business name “ Tecla ” in the peculiar and characteristic form associated with plaintiffs’ business, upon the ground of unfair competition, was clearly correct and it was error for the Appellate Division to reverse such decree. (White Studios v. Dreyfoos, 220 N. Y. 46; Eastern Constr. Co., Inc., v. Eastern Engineering Corp., 246 N. Y. 459; Wall v. Rolls-Royce, 4 Fed. Rep. [2d] 333; Aunt Jemima Mills Co. v. Rigney & Co., 247 Fed. Rep. 407; Vogue Co. v. Thompson-Hudson Co., 300 Fed. Rep. 509.)

      Neil P. Cullom, James E. Freehill and Henry W. Steingarten for respondent.
    Plaintiff failed to prove any unfair competition. (Salisbury v. Howe, 87 N. Y. 128; United Press v. New York Press, 35 App. Div. 444; 164 N. Y. 406; Howe Scale Co. v. Wyckoff, 198 U. S. 118; Singer v. June, 163 U. S. 169; Meneely v. Meneely, 62 N. Y. 427; Russia Cement Co. v. Le Page, 147 Mass. 206; Elize Costume Co. v. Mme. Elize, Inc., 206 App. Div. 503; Beatty v. Guggenheim, 223 N. Y. 294; Waddell v. Cabana, 220 N. Y. 18; Russian Reinsurance Co. v. Stoddard, 240 N. Y. 149; Wappler v. Woodbury, 246 N. Y. 152; Buffalo Typewriter Exchange, Inc., v. McGarl 240 N. Y. 113; Astor v. West 82nd St., 167 App. Div. 273; Romeike v. Romeike, 179 App. Div. 172; 227 N. Y. 561; Corning Glass Works v. Corning Cut Glass Co., 197 N. Y. 173.)
   Per Curiam.

The use by the defendant of the peculiar and characteristic script which the plaintiff had long employed for the display of its name is calculated to emphasize unduly the similarity of names and forcibly to suggest to the public identity of origin or management. The judgment of the Appellate Division should be modified to the extent that defendant is enjoined from, writing or printing the word “ Tecla ” upon any signs, cards, stationery or advertising matter in the peculiar and characteristic script used by the plaintiff, and as modified affirmed, with costs to the plaintiff in the ■ Appellate Division and in this court.

Cardozo, Ch. J., Pound, Andrews, Lehman, Kellogg and O’Brien, JJ., concur; Crane, J., not sitting. Judgment accordingly.


text:
    Kenneth H. Turnbull et al., Copartners under the Firm Name of Leigh C. Turnbull & Co., Appellants, v. Longacre Bank et al., Respondents, and Lehigh Valley Coal Company et al., Appellants.

      (Argued June 7, 1928;
    decided July 19, 1928.)

      William A. Shepard for plaintiffs, appellants.
    The Personal Property Law has no application to certificates •of stock of Standard Oil Company (Indiana) or Lehigh Valley Coal Company as they are foreign corporations and the statutes of the States of their incorporation were neither pleaded nor proved. (Barstow v. City Trust Co., 216 Mass. 330; Boston Safe Dep. & Trust Co. v. Adams, 224 Mass. 442; Tarras v. Municipal Gas Co., 88 App. Div. 251; Southworth v. Morgan, 205 N. Y. 293; International Textbook Co. v. Connolly, 206 N. Y. 188; Hardin v. Morgan Lithograph Co., 247 N. Y. 332.) The Personal Property Law has not made certificates of stock negotiable instruments and has not changed the common law to the extent that the true owner may be deprived of his property by the acts of a thief. (Lester v. Otis Elevator Co., 169 App. Div. 613; Apex Leasing Co., Inc., v. Litke, 173 App. Div. 323; Woolcott v. Shubert, 217 N. Y. 212; Shaw v. Merchants’ Nat. Bank of St. Louis, 101 U. S. 557; Commercial Nat. Bank v. Shriver, 275 Fed. Rep. 12; Schumacher v. Greene Canacea Copper Co., 38 L. R. A. [N. S.] 180; Hall v. Wagner, 111 App. Div. 70.)

      Rush Taggart for Standard Oil Company (Indiana), appellant.
    A corporation is justified in paying dividends to the persons shown on its books as the owners of the stock. (Brisbane v. D., L. & W. R. R. Co., 94 N. Y. 204; McNeil v. Tenth National Bank, 46 N. Y. 325; Smith v. American Coal Company, 7 Lans. 317; Fletcher on Corporations, 6349.)

      Edward W. Bourne for Lehigh Valley Coal Company, appellant.
    Lehigh Valley Coal Company is not liable to Longacre Bank for dividends declared after receipt of notice of the loss, as distinguished from notice of the claim of Longacre Bank. (Smith v. American Coal Co., 7 Lans. 317; Brisbane v. D., L. & W. R. R. Co., 94 N. Y. 204.) Lehigh Valley Coal Company is not hable to the defendant Longacre Bank for any dividends whatever. (Smith v. American Coal Co., 7 Lans. 317; McNeil v. Tenth Nat. Bank, 46 N. Y. 325; Brisbane v. D., L. & W. R. R. Co., 94 N. Y, 204.) The defendant Longacre Bank is not entitled 'to judgment directing the issuance to it of a new certificate. (Cushman v. Thayer Mfg. Jewelry Co., 76 N. Y. 365; Brisbane v. D., L. & W. R. R. Co., 94 N. Y. 204; Rice v. Rockefeller, 134 N. Y. 174; Bedford v. American Aluminum Co., 51 App. Div. 537; Powers v. Universal Film Mfg. Co., 162 App. Div. 806; Selwyn-Brown v. Superno Co., 181 App. Div. 420.)

      Murray L. Jacobs and Herman A. Benjamin for respondent.
    Defendant-respondent bank, as a bona fide purchaser, is vested with title to the certificates in question by virtue of the provisions of article VI of the Personal Property Law. (Peckinpaugh v. Noble & Co., 213 N. W. Rep. 859; Jackson v. Peerless Portland Cement Co., 213 N. W. Rep. 863; Rand v. Hercules Powder Co., Inc., 129 Misc. Rep. 891; Iowa Securities Corp. v. Ridgewood Nat.

      Bank, 106 Misc. Rep. 335; Hale v. West Porto Rico Sugar Co., 200 App. Div. 577.) The stock certificates are subject to and governed by the provisions of the Personal Property Law. (Travis v. Knox Terpezone Co., 215 N. Y. 259; Norrie v. Kansas City Southern Ry. Co., 7 Fed. Rep. [2d] 158; Tauza v. Susquehanna Coal Co., 220 N. Y. 259; Dart v. Farmers’ Bank, 27 Barb. 337; McCormick v. Pennsylvania Central R. R. Co., 49 N. Y. 303; Strauss v. Strauss, 122 App. Div. 729; Reed v. Chilson, 142 N. Y. 152; Major v. American Malt & Grain Co., 110 Misc. Rep. 132.) The bank is entitled to all dividends from the date of notice to defendants-appellants of loss of the certificates. (Brisbane v. D., L. & W. R. R. Co., 94 N. Y. 204; Glover v. National Bank of Commerce, 156 App. Div. 247; Seymour v. Mechanics & Metals Nat. Bank, 199 App. Div. 707.)
   Lehman, J.

The plaintiffs are stockbrokers and dealers in securities. In the course of their business they deliver securities to other brokers within the city of New York. On the 11th day of November, 1924, the plaintiffs telephoned to the Wall Street Messenger Company to send a messenger to the plaintiffs’ office, for the purpose of delivering securities to certain other brokers. When the messenger came to the plaintiffs’ office he was handed certificates of corporate securities of the Freed-Eiseman Radio Corporation, the Lehigh Valley Coal Company and the Standard Oil Company (Indiana), with instructions to deliver them to other brokers. All the certificates were indorsed in blank and transferable by delivery. The messenger stole the certificates.

The stolen certificates came into the possession of the defendant Brinkman. By him they were used as collateral security for a loan of $13,000, which he obtained from the defendant Longacre Bank on the 17th day of November, 1924. The loan was renewed by the bank, but has never been paid. In making and renewing the loan the bank acted without negligence, honestly and in good faith.

The plaintiffs upon discovery of the theft gave notice thereof to the corporations which had issued the certificates. Beginning on January 6, 1925, the plaintiffs published in the New York Times a notice of the theft one day in each week for five successive weeks. Thereafter the corporations issued new certificates to the plaintiffs upon the application of the plaintiffs and upon receipt of indemnity bonds issued by the National Surety Company of New York. Thereafter the plaintiffs learned that the stolen securities were in the possession of the Longacre Bank. Then they brought this action.

The prayer of the complaint is that the defendant Longacre Bank be restrained from transferring, selling or assigning the securities, or from seeking in any manner to have the said securities transferred, upon the books of the corporations which issued the securities. Incidental to this relief the plaintiffs ask that these; corporations be restrained from transferring the securities upon their books, and that the Longacre Bank be directed to deliver the securities to the plaintiffs for the purpose of canceling the same upon the books of the said corporations. The foreign corporations appeared voluntarily in the action, and a restraining order was issued, pendente lite, as prayed for in the complaint.

The Longacre Bank then answered the complaint and set up as a defense to the plaintiffs’ claim that it was entitled to retain possession of the securities as a purchaser for value without notice. The bank in its answer pleaded counterclaims against the defendant corporations which had issued the said securities. It demanded that these corporations accept surrender of the certificates and issue new certificates in lieu thereof to, and in the name of, the bank, and pay to the bank any and all dividends accrued on the certificates or on the shares of stock represented thereby.

After trial the court at Special Term gave judgment that the defendant bank was entitled to retain the securities as pledgee, subject to the right of the plaintiffs to redeem the pledge by paying the debt for which the certificates were collateral security. The court dismissed the bank’s counterclaim against the corporations which issued the securities. The Appellate Division modified the judgment, by awarding to the bank the dividends on the securities accruing after the corporations issuing the certificates received notice of the loss or theft of the certificates, and by directing that new certificates be issued on surrender of the original certificates which were stolen.

It is unnecessary for us to decide whether at common law the defendant bank might retain the stolen certificates as pledgee. Elements of negotiability of certificates of corporate stock, lacking at common law, have been supplied by article VI of the Personal Property Law (Cons. Laws, ch. 41 — Uniform Stock Transfer Act). Title to a certificate may be transferred by delivery of the certificate indorsed in blank (section 162). It is provided by section 166 that the delivery of a certificate to transfer title in accordance with the provisions of section one hundred and sixty-two is effectual, except as provided in section one hundred and sixty-eight, though made by one having no right of possession and having no authority from the owner of the certificate or from the person purporting to transfer the title.”. Section 168 provides that if the delivery of a certificate was made (c) without authority from the owner * * * the possession of the certificate may be reclaimed and the transfer thereof rescinded, unless: (1) The certificate has been transferred to a purchaser for value in good faith without notice of any facts making the transfer wrongful * * Here the evidence and findings establish that the Longacre Bank is a purchaser for value and without notice of any facts making the transfer wrongful. It is evident that under the provisions of the Personal Property Law the possession of an innocent purchaser for value of certificates of stock indorsed in blank is fully protected. In that respect, though delivery was made by one who, being a thief, had himself neither right of possession or authority to transfer title, such certificates possess the attributes of negotiable instruments. The bank has acquired title to the certificates as pledgee. The plaintiffs may reclaim the certificates only by payment of the debt for which they are security.

We have assumed that the Personal Property Law applies to transfers of the stolen certificates. It is true that the term certificate ” as used in article VI of the Personal Property Law includes only a certificate of stock in a corporation organized under the laws of this State or of another State whose laws are consistent with this act ” (section 183), and there is no proof in the record that the laws of the States of Pennsylvania and of Indiana, under which the Lehigh Valley Coal Company and the Standard Oil Company (Indiana) were organized, are consistent with the Personal Property Law (Uniform Stock Transfer Act). At the trial no party to the action offered such proof, and, on the other hand, no party contended that unless such proof was offered the provisions of the Personal Property Law did not apply. The court and all the parties assumed that, even without such proof, the rights of the parties are defined by the statute. It is too late now to raise a contention that proof should have been given that the laws of Pennsylvania and of Indiana are consistent with the Uniform Stock Transfer Act. (Peckinpaugh v. Noble & Co., 213 N. W. Rep. 859.) The appellants do not even now claim that such proof could not have been given at the trial, if any party had seen fit to waste the time of the court by requiring proof of a fact about which no real controversy could exist.

We agree with the Appellate Division that the bank is entitled, upon surrender of the certificates to the corporations which issued them, to receive new certificates. True, the bank had not asked the corporations to make such transfer before it pleaded its counterclaim, but it was at that time enjoined from seeking such transfer. There is no proof in this case that the certificates which the corporations had issued to the plaintiffs in place of the stolen certificates were issued under statutes of Pennsylvania and Indiana analogous to sections 75 and 76 of the Stock Corporation Law (Cons. Laws, ch. 59) and section 178 of the Personal Property Law of this State. There is no proof that either corporation cannot issue new certificates to the bank, as directed by the judgment, without exceeding its authorized capital stock. We do not now consider what might have been the effect of such proof if it had been given. Here no reason appears why the corporations should not issue new certificates upon surrender of the old. These foreign corporations have voluntarily submitted to the jurisdiction of the courts of this State, and even though they have not been guilty of any wrongful refusal to issue new certificates, since the bank did not, until it filed its counterclaim, demand such certificates, they may be directed by a court of equity to issue such certificates now.

From the time that the bank filed its answer, these corporations knew that the bank claimed title to the certificates issued by it as a purchaser for value and, except as restrained by order of the court, demanded transfer of the certificates upon the corporate books and payment of dividends which had accrued or might thereafter accrue. Ordinarily a corporation may continue to pay dividends to the person registered on its books as the owner of the stock. (Personal Property Law, section 164.) It may not do so after a transferee from the registered owner has not only given notice of such transfer but has demanded that new certificates be issued to him. The rights of the actual owner of the stock to dividends are not altered by the injunction which precluded such a demand for a change on the corporate registry of stock ownership. The purpose of the injunction pendente lite was to maintain the existing status until the courts might pass upon the disputed ownership of the stock. The corporations were not compelled because of the injunction to continue to pay dividends to the plaintiffs after they had notice not only of the claim of the bank but also of the fact that litigation was then pending to determine the validity of that claim. The bank is, therefore, entitled to dividends payable on its securities after the answer containing its counterclaim was served on the corporations which issued the certificates.

We think that the Appellate Division went too far in also allowing the bank to recover dividends payable on the securities from the date that the corporations received notice of the loss or theft of the securities. Notice of loss or theft is not notice that the securities were transferred wrongfully to an innocent purchaser for value. Until the corporations received notice that an innocent purchaser had obtained good title against the original owner, and that such purchaser claimed from the corporations the right to dividends, which is incidental to ownership of the corporate stock, the corporations might continue to recognize the exclusive right of the person registered on its books as the owner of shares to receive dividends. (Personal Property Law, section 164; Brisbane v. Del, L. & W. R. R. Co., 94 N. Y. 204.)

The judgment of the Appellate Division should be modified by limiting the award of dividends to the period beginning with the date of service of the answer of the defendant Longacre Bank, and as modified affirmed, with costs to the Longacre Bank against the plaintiffs.

Cardozo, Ch. J., Pound, Crane, Andrews, Kellogg and O’Brien, JJ., concur.

Judgment accordingly.


author: Pound, J.

text:
    In the Matter of Morris Levy et al., Appellants. Grand Central Wicker Shop, Respondent.
    (Argued October 1, 1928;
    decided October 9, 1928.)

      Jacob Zelenko, Harry Hartman and Morris Levy for appellants.
    Upon the conceded facts, appellants were entitled in any event to have the satisfaction of judgment vacated. (Matter of Salant, 158 App. Div. 697; 210 N. Y. 622.) Appellants’ lien could not be affected, reduced or diminished in any way by the settlement. (Beecher v. Voght, 227 N. Y. 468; Bailey v. Murphy, 136 N. Y. 50; Peri v. N. Y. Central R. R. Co., 152 N. Y. 521; Corbit v. Watson, 88 App. Div. 467; Serwer v. Serwer, 91 App. Div. 538; Baxter v. Connor, 119 App. Div. 450; Knickerbocker Investment Co. v. Voorhees, 128 App. Div. 639.)

      George X. Levine, Alfred B. Nathan and S. Howard Imbrey for respondent.
    The merits are not with the appellants. The settlement effected between the parties was proper and the appellants were bound to accept the sums tendered to them for their fees. (Lee v. Vacuum Oil Company, 126 N. Y. 579; Peri v. New York Central R. R. Co., 152 N. Y. 152; Fischer-Hansen v. Brooklyn Heights R. R. Co., 173 N. Y. 492; Poole v. Belcha, 131 N. Y. 200; Corcoran v. Kellogg Structural Co., 179 App. Div. 396; Machcinski v. Lehigh Valley R. R. Co., 272 Fed. Rep. 922; O’Conner v. Gifford, 117 N. Y. 275; Matter of Demmerle, 130 Misc. Rep. 684.)
   Pound, J.

The fundamental question presented by this case is whether the plaintiff in a personal injury case may, under any circumstances, settle with the defendant and release the judgment, pending an appeal by the defendant, in disregard of the contract of plaintiff’s attorneys for a contingent fee of forty per cent of the amount recovered. On the trial a verdict was rendered in favor of plaintiff for $12,500. Pending an appeal from the judgment entered thereon, plaintiff settled the action for $2,000, of which $800, representing their hen of forty per cent on the amount of the settlement, was set aside for his attorneys and tendered to them. The action was discontinued and the judgment satisfied by the defendant therein.

The settlement was made in good faith on notice to the attorneys with the approval of the court, given over their objection. It is not contended that the compensation contracted for was excessive. The plaintiff making the settlement is financially irresponsible. The defendant is presumed to be responsible.

The attorneys contend that as their position is “ the same as that of an equitable assignee ” of the judgment (Beecher v. Vogt Mfg. Co., 227 N. Y. 468), their lien attaches thereto for the full amount thereof and cannot be affected by any settlement between the parties without their consent.

It has been held in the second department that the court has no power after judgment to authorize a settlement which transfers the attorney’s lien to the amount received in settlement; that the attorneys have a vested right to their share after judgment of which they may not be deprived by any settlement to which they did not consent. (Serwer v. Serwer, 91 App. Div. 538; Baxter v. Connor, 119 App. Div. 450.) On the other hand the Appellate Division in the fourth department has held that while an appeal is pending the client has the power to effect a settlement for less than the amount of the judgment when he acts with the knowledge of the attorney in good faith and makes provision for the payment to his attorney of his share of the amount received in settlement. (Corcoran v. Kellogg Structural Co., 179 App. Div. 396, 401.)

Does an honest settlement of an action after judgment deprive the attorney of his lien on the judgment? Some stress is laid on the fact that this case was, when the settlement was consummated, subject to the vicissitudes of the pending appeal. This doubtless is an argument to sustain the good faith and expediency of the settlement, but the basic question is as to the client’s control after judgment in all cases. Unquestionably he may make an honest settlement of his cause of action before judgment without regard to the wishes of his attorney. (Lee v. Vacuum Oil Co., 126 N. Y. 579; Peri v. N. Y. C. R. R. Co., 152 N. Y. 521; Fischer-Hansen v. Brooklyn Heights R. R. Co., 173 N. Y. 492.) The hen, whether before or after judgment, is subject to the right of the client to settle in good faith. The attorney may, however, follow the proceeds to enforce his hen. The law does not permit the chent to cheat his attorney. But the client is competent to decide whether he will continue the htigation or seek to collect the judgment or agree with his adversary in the way.

The right of the parties to thus [honestly] settle is absolute and the settlement determines the cause of action and liquidates the claim. This necessarily involves the reciprocal right of the attorney to follow the proceeds of the settlement, and * * * to insist that his share be ascertained and paid to him.” (Fischer-Hansen v. Brooklyn Heights R. R. Co., supra, p. 501.)

The rule is of universal application. It applies to settlements before and after judgment alike. General statements that the attorney is an equitable assignee of the judgment or that the judgment is a higher security to which the lien attaches do not conflict with this holding. They must be read in connection with the other general principle that honest settlements made in good faith because the client prefers something certain in hand to the enforcement of his legal rights are not prohibited by the existence of the attorney’s lien. The court has approved the settlement in this case, pending appeal. We prefer to base our decision on the client’s control of the judgment rather than the pendency of the appeal. It would be hard law to say that a client would get nothing from a settlement of a final judgment under any circumstances until he had satisfied his attorney’s claim thereon in full or obtained his consent to the settlement. The question is not one of power to settle but of the fairness of the settlement made.

The order should be affirmed, with costs.

Cardozo, Ch. J., Crane, Andrews, Lehman, Kellogg and O’Brien, JJ., concur.

Order affirmed.


author: Crane, J.

text:
    In the Matter of George S. Skinkle, Respondent. Robert J. Murray, General Manager and Commissioner of Public Safety of the City of Watervliet, Appellant.
    (Argued October 3, 1928;
    decided October 16, 1928.)

      Joseph D. Foley, Corporation Counsel, for appellant.
    The decision of the Special Term dismissing the appeal on jurisdictional grounds being final and conclusive, an order of certiorari should not have been granted to review the decision of the Commissioner of Public Safety. (People ex rel. Miller v. Peck, 73 App. Div. 89; Cougle v. O’Keefe, 200 App. Div. 838; Quay v. Wege, 158 App. Div. 129; Matter of Van Order, 157 App. Div. 4; Nolan v. Cole, 157 App. Div. 44.)

      Kenneth S. MacAffer for respondent.
    The relator was entitled to a review by certiorari. (People ex rel. O’Callahan v. French, 123 N. Y. 636; People ex rel. Masterson v. French, 110 N. Y. 494; Matter of Van Order, 157 App. Div. 4; People ex rel. Dwyer v. MacAffer, 202 App. Div. 14; People ex rel. Winspear v. Kreenhader, 197 App. Div, 887; People ex rel. Scrafford v. Steadman, 57 Hun, 280; People ex rel. Lewis v. Daley, 4 Hun, 641; 67 Barb. 325; Mills v. Parkhurst, 126 N. Y. 89.)
   Crane, J.

Chapter 462 of the Laws of 1918, being the charter of the city of Watervliet, provides for the removal or discipline of an officer by the Commissioner of Public Safety upon written charges after a hearing. Section 148 provides for a review of the "Commissioner’s determination in the following manner:

“ In case any such officer or member is aggrieved by the determination of the commissioner on any trial of charges as specified in the preceding section, on jurisdictional grounds, he may, within thirty days after the rendering of such determination, take an appeal therefrom to the supreme court, at any special term thereof, held within the judicial district in which the city is situated. Upon such appeal the decision of the court shall be final and conclusive.”

George S. Skinkle was dismissed from the police force by the Commissioner after a hearing. He appealed to the Special Term which reviewed the merits of his case and reinstated him. (Matter of Skinkle, 130 Misc. Rep. 8.) On appeal "the order of the Special Term was reversed on the ground that the Special Term had no power to review the case on the merits but could only pass upon jurisdictional questions. The matter was remitted to the Special Term for a hearing upon these grounds. (Matter of Skinkle, 221 App. Div. 682.) The Special Term upon rehearing dismissed Skinkle’s appeal as there was no jurisdictional error committed by the Commissioner.

The police officer had also obtained an order of certiorari to review the determination of the Commissioner on the facts. The Appellate Division concluded that the determination of the Commissioner of Public Safety should be annulled, dismissed the charges and restored the relator to his position as an officer of the police force of the city of Watervliet.

It is this determination of the Appellate Division which has been appealed to this court.

The appointment and removal of police officers are within legislative control subject to article V, section 6, of the Constitution. The Legislature could have provided that the decision of the Commissioner of Public Safety would be final and conclusive, not subject to review by any court. (People ex rel. Miller v. Peck, 73 App. Div. 89.)

In the Second Class Cities Law, article 9, we find in section 138, relating to the Department qf Public Safety, that an aggrieved officer may appeal from the determination of the Commissioner to the Appellate Division on questions of law.

This means that the Appellate Division cannot review any finding of fact made by the Commissioner if supported by any evidence. (Matter of Van Order v. Commissioner of Public Safety of the City of Troy, 157 App. Div. 4; Cougle v. O’Keefe, 200 App. Div. 838.) Section 138 is the only authority for an appeal in such cases, and excludes a review on certiorari.

The charter of the city of Watervliet, above referred to, must receive a like construction. Section 148 of that charter provides the only remedy for an aggrieved officer; he may appeal to the Special ■ Term on jurisdictional grounds only. This would include the right to determine whether there was any evidence to sustain the action of the Commissioner, but it would not give the Special Term or the Appellate Division the right to review the findings of fact. Except for jurisdictional grounds the determination of the Commissioner is final.

The order of the Appellate Division should, therefore, be reversed, and the proceeding dismissed, with costs in the Appellate Division and in this court.

Cardozo, Ch. J., Pound, Andrews, Lehman, Kellogg and O’Brien, JJ., concur.

Order reversed, etc.


author:
      Per Curiam.

      Crane, J.

text:
    In the Matter of the Claim of Henry Beekman against W. A. Brodie, Inc., et al., Respondents. The State Industrial Board, Appellant.
    (Argued October 2, 1928;
    decided October 16, 1928.)

      Albert Ottinger, Attorney-General (E. C. Aiken of counsel), for appellant.
    The claimant is not estopped from pursuing his remedy in compensation where he has made no election under section 29, providing the amount which he receives is deducted from the compensation. (Lester v. Otis Elevator Co., 169 App. Div. 613; Rosebrock v. General Electric Co., 236 N. Y. 227; Doyle v. Barton, 206 App. Div. 784; Matter of Meyers v. Johnson, 197 App. Div. 911: Egan v. Otis Elevator Co., 209 App. Div. 332; Matta v. Dennings Point Brick Works, 224 N. Y. 596; Corigliano v. International Druggists Supply Co., 222 App. Div. 843; Clow v. Keith, 247 N. Y. 583.)

      William B. Davis and E. C. Sherwood for respondents.
    The claimant’s unauthorized settlement has, under section 29 of the statute, barred his right to compensation. (Matta v. Dennings Point Brick Works, 224 N. Y. 596; Matter of Sienko v. Bopp & Morgenstern, 248 N. Y. 40; Matter of McKee v. White, 218 App. Div. 300; 244 N. Y. 610.)
   Per Curiam.

The employer was estopped from asserting its rights under the provisions of Workmen’s Compensation Law (Cons. Laws, ch. 67), section 29, relative to written consent when it disclaimed liability and advised the employee to settle his case with the third party (Matter of Clow v. Keith’s Fordham Theatre, 247 N. Y. 583). The insurance carrier was not bound by such waiver. Its own written' consent or waiver thereto was necessary to bind it. As against the insurer, the employee has lost his right to the deficiency (O’Brien v. Lodi, 246 N. Y. 46). His claim against the employer remains (Workmen’s Compensation Law, § 53). Workmen’s Compensation Law, section 54, subdivision 2, relates to jurisdiction and does not apply to a case where both insured and carrier are parties to the proceeding.

The order dismissing the award against W. A. Brodie, Inc., employer, should be reversed and the award of the State Industrial Board affirmed with costs in this court and in the Appellate Division. The order dismissing the award against the Travelers Insurance Company should be affirmed with costs against the State Industrial Board.

Crane, J.

(dissenting in part). The insurance carrier in my opinion was also bound by the estoppel or waiver of the employer. Its actions in this particular were binding on the insurance carrier. By section 54, subdivision 2, of the Workmen’s Compensation Law the insurance carrier shall in all things be bound by and subject to the orders, findings, decisions or awards rendered against the employer for the payment of compensation. The employer and the carrier are treated as one in many instances. Thus under section 18, notice of injury is given to the Commissioner and to the employer. Knowledge of the accident by the employer may excuse the failure to give notice, or it may also be excused on the ground that the employer has not been prejudiced by want of notice. The insurance carrier is not entitled to notice of injury and may be bound by the knowledge of the employer. By section 28, the claim for compensation must be filed within the year but it is filed with the Commission, not the carrier. The employer and insurance carrier shall be deemed to have waived the bar of the statute unless the objection to the failure to file the claim within the year is raised on the hearing. Objection by one, I take it, would be for the benefit of both.

Compensation means a money allowance payable to an employee. It is the payment of this compensation which the law seeks to make certain. The employee must be protected and the allowance secured. Failure to secure the payment of compensation is a misdemeanor. (Sec. 52.) An employer is not relieved from liability for compensation except by payment thereof by himself or his insurance carrier. (Sec. 53.) Insolvency of the employer does not relieve the carrier. (Sec. 54, subd. 3.) Section 50 says an employer shall secure compensation in one of the ways indicated. Here it was done through an insurance carrier. With such obligations placed upon him and the carrier, it would be strange if "an act or word of the employer could lessen the employee’s security and reheve the carrier. Whatever may be the rights between themselves the employee looks to both for his compensation. Section 25 provides a penalty if the employer or insurance carrier fail to pay the award, and section 26 permits the entry of judgment where the employer, although insured, fails to pay compensation due under an award, by the filing with the county clerk of a certified copy of the decision of the Industrial Board. The judgment shall be in conformity with the award.

To further secure the employee in his compensation provision is made that no agreement by him to waive his right shall be valid and the benefits due under the act cannot be assigned or attached by creditors. (Secs. 32 and 33.)

With such strict regulations to safeguard an employee’s interests, an employer who has induced his workman to seek pay from a third party cannot plead the lack of consent to a settlement referred to in section 29 (Matter of Clow v. Keith’s Fordham Theatre, 247 N. Y. 583), and the insurance carrier cannot profit by these acts of the employer. In this particular the estoppel is likewise binding on the carrier. O’Brien v. Lodi (246 N. Y. 46) does not apply as there was no consent to the settlement with the third party. The release of the third party claim was solely the election of the employee. Here if there were a settlement it was with the consent and at the direction of the employer.

The order of the Appellate Division should be reversed and the award of the State Industrial Board affirmed, with costs.

Cardozo, Ch. J., Pound, Andrews, Lehman and O’Brien, JJ., concur in per curiam opinion; Crane, J., dissents in part in opinion in which Kellogg, J., concurs.

Ordered accordingly.


author:
      Per Curiam.
     O’Brien, J.

text:
    The People of the State of New York, Respondent, v. Thomas Moran, Appellant.
    (Argued October 8, 1928;
    decided October 23, 1928.)

      Meyer Kraushaar and Emanuel Celler for appellant.
    The overwhelming weight of the evidence demonstrates that the defendant was legally insane. (People v. Furlong, 187 N. Y. 198; People v. Schmidt, 216 N. Y. 324.) The trial court was guilty of prejudicial error in refusing to instruct the jury that the defendant’s ailment might be considered by them in mitigating the degree of homicide. (Sage v. State, 91 Ind. 141; Kirby v. State, 68 Tex. Cr. Rep. 63; State v. Anselmo, 46 Utah, 137; People v. Van Zandt, 224 N. Y. 354; People v. Koerber, 244 N. Y. 147.)

      Charles J. Dodd, District Attorney (Henry J. Walsh and Thomas J. Sefton of counsel), for respondent.
    The evidence established beyond a reasonable doubt that the appellant was sane when he shot and killed the deceased and the finding of the jury to that effect is amply sustained by the proof. (Brotherton v. People, 75 N. Y. 159; People v. Egnor, 175 N. Y. 419; People v. Seidenshner, 210 N. Y. 341; Flanagan v. People, 52 N. Y. 467; People v. Taylor, 138 N. Y. 407; Willis v. People, 32 N. Y. 718; People v. Foy, 138 N. Y. 664; People v. Ferraro, 161 N. Y. 377; People v. Burgess, 153 N. Y. 561; People v. Farmer, 194 N. Y. 251; People v. Schmidt, 216 N. Y. 324.)
   Per Curiam.

The defendant is a psychopathic inferior,” a man of low and unstable mentality, and, in all probability, a sufferer from epilepsy.

Even so, the evidence is not so strong as to exact a finding from the jury that he was mentally irresponsible within the meaning of Penal Law, section 34. He knew the nature and quality of the act, and knew that the act was wrong.

- It is the law of New York, made binding upon the court by the enactment of a statute, that a youth of that order of mentality shall suffer the penalty of death if guilty of the crime of murder. The rigor of the law may be mitigated by the Governor when the hardship of applying it is excessive or exceptional. There can be no other relief in the face of the mandate of the statute.

Feebleness of mind or will, even though not so extreme as to justify a finding that the defendant is irresponsible, may properly be considered by the triers of the facts in determining whether a homicide has been committed with a deliberate and premeditated design to kill, and may thus be effective to reduce the grade of the offense. Requests were submitted to the trial judge for the purpose, it is now said, of emphasizing the jury’s duty in that regard. They were so imperfectly phrased that there was no error of law in refusing to charge them. The substance of the desired instructions was this and nothing more: that if there was mental disorder which precluded a deliberate and premeditated design to kill, there was no murder in the first degree. But the judge had already charged that there could be no conviction of that grade of homicide unless there was a deliberate and premeditated design to kill. If he had charged the new request, he would have merely told the jury that a defendant who cannot deliberate, does not deliberate. A proposition so self-evident was properly rejected with the comment that it was refused except as already charged. A different question would be here if the request had been that in determining whether the defendant could deliberate, mental disorder, whatever its degree, was a feature of the evidence to be considered and given due significance. Nothing of the kind was asked.

True, of course, it is that even a defective request may be the basis for reversal if justice so requires. (People v. Semione, 235 N. Y. 45; Code Cr. Pro. § 528.) The record does not justify the exercise of that discretionary power. The jury cannot have been misled by the ruling of the trial judge, for they did not hear the request. It was made in writing and not read. There is no reasonable basis for the belief that the result would have been different if the desired charge had been made.

The judgment of conviction should be affirmed.

O’Brien, J.

(dissenting). Defendant was afflicted with a form of epilepsy. His paternal grandmother, his paternal aunt and his maternal uncle were insane. Under correct instructions relating to the issue of insanity, the jury found that, even with such a tainted heritage, he knew the nature and quality of his act and that it was wrong. This verdict on the issue of insanity, as defined by statute, cannot be viewed as contrary to the weight of evidence.

A sane man may intentionally commit murder, yet. unless his intentional homicidal act be deliberare and premeditated, his crime does not constitute murder in the first degree. If a deliberate and premeditated design, possible of formation by the slayer, be in fact absent, the grade of his offense is murder in the second degree. In a more emphatic sense, that grade is preserved when the criminal is incapable of deliberation and premeditation. Intoxication does not excuse crime, yet its existence may render its subject powerless to deliberate or to premeditate. (People v. Leonardi, 143 N. Y. 360.) Rash impulse, headlong fury, sudden and overwhelming grief do not absolve from all the consequences of crime (People v. Caruso, 246 N. Y. 437) but they do mitigate the grade of the offense. A similar rule applies whenever a jury may find that, from any cause, the murderer is prevented from exercising power of deliberation and premeditation. All seem to accept this proposition.

Counsel submitted this request to charge: If the jury find that the defendant was suffering from such a mental disorder though while not reaching the dignity of insanity, but nevertheless, as so interfered with his mental operations as to preclude a deliberate and premeditated design to kill Officer Byrns, but which nevertheless allowed him to form the design to effect the death of Officer Byrns, they may find him guilty of murder in the second degree.” This language requests a charge that if a mental disorder, lefes malignant than insanity as defined by statute, allows the formation of an intent but prevents deliberation and premeditation, defendant is not guilty of murder in the first degree. It may fairly be construed, I think, as a request to instruct the jury that they might consider defendant’s low mental condition in relation to his power to deliberate and premeditate. Even if regarded as defective in form, I think that this request should have been granted. The court had, indeed, previously charged that conviction in the first degree could not be had in the absence of those elements, but he had omitted to enlighten the jury in respect to the method of determining their existence. The jury knew from their instructions that an insane person could not be convicted nor could a sane person be convicted in the first degree unless he had deliberated and premeditated. Their attention had not been directed to a consideration of the possibility or probability that a person of defendant’s mental status might be incapable of deliberation and premeditation. Full assurance cannot be had that they ever considered the impossibility of deliberation and premeditation by one who, like defendant, they held to be sane within the meaning of the statute.

Cardozo, Ch. J., Pound, Crane, Andrews, Lehman and Kellogg, JJ., concur in per curiam opinion; O’Brien, J., dissents in opinion.

Judgment affirmed.


text:
    Charlotte E. Pershall, Respondent, v. Hiram Elliott, as Executor of David B. Pershall, Deceased, et al., Appellants, Impleaded with Another.

      (Argued October 11, 1928;
    decided October 26, 1928.)

      Michael D. Reilly, Herbert D. Hamm and Robert H. Wright for appellants.
    The alleged contract is within the Statute of Frauds. (Drake v. Seaman, 97 N. Y. 230; Burns v. McCormick, 233 N. Y. 230; Life Savings Club, Inc., v. Mosher, 125 Misc. Rep. 341; Kezer v. Seely, 236 N. Y. 567; Cooley v. Lobdell, 153 N. Y. 596; Diesel v. Otto, 203 N. Y. Supp. 926; Woolley v. Stewart, 222 N. Y. 347.) The plaintiff failed to prove a promise. (Stillwell v. Bateman, 83 Misc. Rep. 589; Wildman v. Jones, 150 App. Div. 514; Ennis v. Chichester, 187 App. Div. 53.)

      Matthew W. Wood for respondent.
    The judgment was amply sustained by the evidence. (Edson v. Parsons, 155 N. Y. 555; Rastetter v. Hoenninger, 214 N. Y. 66; Morgan v. Sanborn, 225 N. Y. 454; Mutual Life Insurance Co. v. Holloday, 13 Abb. N. C. 16; LeBrantz v. Conklin, 39 Misc. Rep. 715; Seaver v. Ransom, 224 N. Y. 233; Hamlin v. Stevens, 177 N. Y. 39; Winne v. Winne, 166 N. Y. 263; Heady v. Healy, 166 N. Y. 624; Hall v. Gilman, 77 App. Div. 458; Edson v. Parsons, 155 N. Y. 555; Piper v. Howard, 107 N. Y. 82; Gates v. Gates, 34 App. Div. 608; 54 N. Y. 454.).
   Pound, J.

In 1902 the plaintiff married Henry L. Pershall. Pershall’s father, David B. Pershall, lived with them. In 1906 the father purchased a house in Brooklyn for the sum of $13,000. The plaintiff and her husband, as well as the father, lived together in that house until plaintiff’s husband died in 1923. During that, time plaintiff’s husband made many valuable improvements in the house. The plaintiff claims that these improvements were made under an oral agreement that at the father’s death she and her husband should have the right to purchase the house at the price paid for it by the father. No memorandum in writing of such agreement was made at the time, but in 1916 the father made a codicil to his will which reads as follows:

“ Whereas my son, Henry L. R. Pershall, has from time to time, since the purchase by me of my present residence, No. 861 President Street, Brooklyn, New York, expended large sums on the repair and improvement thereof and is about to make other like expenditures, on the understanding that in the event of my death he should be entitled to purchase said house from my estate at its cost, and thereby obtain the benefit of such expenditures by him made, I do hereby authorize and direct my executors to sell and convey to my said son said premises and building for the sum of thirteen thousand dollars ($13,000), the price paid by me therefor, in case he shall elect to so purchase the same at such price and shall notify my executors of such election within one year from the date of my death, and shall within such time pay the consideration and accept a deed therefor, subject to all taxes and assessments thereon accruing after my death.”

Plaintiff's husband died in February, 1923. Within a month thereafter the father made a will in which he provided:

“Fourth. I also direct and provide inasmuch as the residence known by street number as 861 President Street, Borough of Brooklyn, City of New York, was purchased by me for the sum of Thirteen thousand five hundred dollars ($13,500) and in view of the fact that my son Henry LeRoy Pershall, now deceased, and my daughter-in-law Charlotte E. Pershall, have expended various and divers sums of money in the improvement of the said real property for which I feel that they or she should receive adequate reimbursement, that my said daughter-in-law shall have the privilege of purchasing the said property after my decease at the said sum of Thirteen thousand five hundred Dollars ($13,500) which said monies shall thereupon become and be a part of my estate.”

A year thereafter he revoked that will. The plaintiff thereupon brought this action to compel the father specifically to perform his agreement to permit her to purchase the property at the sum which the father paid for it. She claims in the Complaint that her father-in-law revoked his last will because of the undue influence of his children. The father-in-law died during the pendency of the action, but not till after he made a deposition in the case. The trial judge found in favor of the plaintiff and directed the father-in-law’s executor and the daughters to convey the house to this plaintiff upon payment of $13,000. The Appellate Division affirmed the judgment below with a slight modification as to costs.

Technical objections to the form of the action may be overlooked. The case may be disposed of on the merits on the question whether plaintiff’s option to purchase contained in her father-in-law’s will is enforceable as a contract.

Assuming that the codicil constitutes a sufficient contract which the law would sustain as a legal obligation whereby the plaintiff’s husband received the right to purchase the house at the price his father paid for it, provided the husband survived the father, the question remains whether the plaintiff has such an enforceable contract.

Real Property Law, section 259 provides:

§ 259. When contract to lease or sell void. A contract for the leasing for a longer period than one year, or for the sale, of any real property, or an interest therein, is void, unless the contract, or some note or memorandum thereof, expressing the consideration, is in writing, subscribed by the lessor or grantor, or by his lawfully authorized agent.”

Obviously the codicil for the son’s benefit was contractual in form and expressed a consideration for the option. A legal obligation supported the promise. It contained an admission that the son Henry had expended money on the family residence on the understanding that in the event of testator’s death he might purchase the property for $13,000 and thereby obtain the benefit of the expenditures made by him. The son expended the money in reliance on the father’s promise to convey. That promise was, however, personal to Henry and did not survive to plaintiff upon the death of Henry. The later will, on which the plaintiff’s cause of action rests, contains no such admission. It expresses no consideration. No previous request to make the expenditures can be implied therefrom. The language is to the effect that expenditures have been made by the son and daughter-in-law for which I feel that they or she should receive adequate reimbursement.” “ The doctrine that past consideration is no consideration is well recognized and universally enforced.” (Williston on Contracts, § 142.) The practical application of the doctrine gives rise to some seeming exceptions, but validity must at least be denied to a promise made in consideration of benefits rendered in the past without a request by the promisor, express or implied. A previous moral obligation is insufficient as a consideration to support an action to enforce an executory contract. (Parsons v. Teller, 188 N. Y. 318.) A distinction is drawn between moral obligations and equitable obligations. An equitable obligation rests on some actual duty, unenforceable legally, such an infant’s obligations or debts barred by the Statute of Limitations or bankruptcy, but a mere moral or conscientious obligation, unconnected with a prior legal or equitable claim, implies no duty and is not a sufficient consideration to support a promise. (Goulding v. Davidson, 26 N. Y. 604; McGuire v. Hughes, 207 N. Y. 516.)

The will expresses a motive on testator’s part for giving the same privilege to plaintiff which he had for a consideration given her deceased husband. He feels that they or she should receive adequate reimbursement.” A motive is not consideration, either legal or equitable. (Anson on Contracts, § 126.) Testator was under no obligation to reimburse plaintiff for the expenditures her husband had made. He might do as he pleased about that without violating any legal or equitable duty to her. The sense of moral obligation which moved him to make the testamentary provision for her benefit did not forbid him to change his mind thereafter. Testator expressed in the will an existing disposition, desire or sense of duty that plaintiff should be reimbursed for the expenditures that she and her husband had made on the property. He recognized no obligation to plaintiff to make such reimbursement to her. On the contrary, he expressed a mere feeling. Feeling dictates many testamentary provisions. Feeling may change and a feeling once expressed is not a promise made on a consideration. The will was purely testamentary and ambulatory and void as a contract under the Statute of Frauds.

It is contended that plaintiff in reliance upon the will made certain expenditures on the property after the will was executed. These expenditures are not referable to the will. No promise was even suggested by the will that plaintiff would be reimbursed for subsequent expenditures. She did not alter her position to her disadvantage in any justifiable reliance on the terms of the will.

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

Cardozo, Ch. J., Crane, Andrews, Lehman, Kellogg and O’Brien, JJ., concur.

Judgment reversed, etc.


text:
    The People of the State of New York, Respondent, v. Gilbert Carmichael, Appellant.
    (Argued October 15, 1928;
    decided October 26, 1928.)

      Guy O. Walser for appellant.

      George W. Hildreth, District Attorney (C. B. Partridge of counsel), for respondent.
   Per Curiam.

The defendant was convicted in the County Court of Suffolk county, New York, of forgery in the second degree as a second offense. On appeal the Appellate Division reversed the judgment of conviction and granted a new trial. The defendant, not satisfied with this relief and desiring a dismissal of the indictment as insufficient on its face, has appealed to this court, one of the justices of the Appellate Division certifying that in his opinion questions of law are involved which ought to be reviewed by this court.

We have no jurisdiction to entertain the appeal. Even if the People were the appellant we could not review a reversal on the facts. (People v. Redmond, 225 N. Y. 206.) Appeals in criminal cases are allowed only in the manner stated in title X, chapter I, of the Code of Criminal Procedure. (People v. Wolf, 247 N. Y. 189; People v. Kevlon, 247 N. Y. 192.) Section 520, subdivision 3, applies to a defendant only where he desires to appeal from a judgment of conviction. The case does not fall within any of the classes enumerated in section 519. There is, therefore, no authority for an allowance of an appeal.

The appeal should be dismissed.

Cardozo, Ch. J., Pound, Crane, Andrews, Lehman, Kellogg and O’Brien, JJ., concur.

Appeal dismissed.


text:
    Matilda Miranda, Respondent, v. Melchiorri Lo Curto, Appellant.
    (Argued October 17, 1928;
    decided October 26, 1928.)

      Theodore H. Lord, Fred H. Rees and Daniel Mungall for appellant.
    The complaint should have been dismissed for the failure to connect the defendant, owner of the automobile, with the operation or control thereof at the time of the accident. (Fluegel v. Coudert, 244 N. Y. 393; Ohannissian v. Elliott, 233 N. Y. 326; Potts v. Pardee, 220 N. Y. 431; Powers v. Wilson, 203 App. Div. 232; Doersam v. Osmalek, 202 App. Div. 621; Kohlmeier v. Allen, 201 App. Div. 445; Legenbauer v. Esposito, 187 App. Div. 811; Brenner v. Goldstein, 184 App. Div. 268; De Smet v. Niles, 175 App. Div. 822.)

      Leonard F. Fish and William Seligson for respondent.
    The presumption that defendant’s automobile was being operated for his benefit at the time of the accident, and that the driver was his agent, is not overcome as a matter of law, nor indeed as a matter of fact, by the evidence, but on the contrary, the presumption is fortified and strengthened thereby. (Norris v. Kohler, 41 N. Y. 42; McCann v. Davidson, 145 App. Div. 522; Ferris v. Sterling, 214 N. Y. 249.) A legal presumption, strengthened and fortified by the circumstances, cannot be overcome as a matter of law, nor indeed as a matter of fact, by testimony to conversations, the meaning and purport of which is doubtful and uncertain. (Place v. R. R. Co., 167 N. Y. 345; Hill v. West End R. Co., 158 Mass. 458; Van Blaricon v. Dodgson, 220 N. Y. 111; McCrassen v. Moorhead, 195 N. Y. Supp. 164; McComb v. Boardman, 198 N. Y. Supp. 874; Missell v. Hayes, 86 N. J. L. 348; Denison v. McMorton, 228 Fed. Rep. 401; Kirwan v. Foos, 248 N. Y. 102.)
   Per Curiam.

The record before us contains no sufficient evidence from which the jury might find that at the time of the accident the automobile of the defendant was operated by his son as his agent. There is even no proof that this was a family car. Had such proof been present it might be necessary to determine the question of liability under Missell v. Hayes (86 N. J. L. 348), assuming that that case states the common law of New York as we interpret it. The accident happening in New Jersey, section 282-e of our Highway Law has no application.

The judgment of the Trial Term and of the Appellate Division should be reversed, and a new trial ordered, with costs to abide the event.

Cardozo, Ch. J., Pound, Crane, Andrews, Lehman, Kellogg and O’Brien, JJ., concur.

Judgment reversed, etc.


text:
    The People of the State of New York ex rel. Heyden Chemical Company of America, Inc., Appellant, v. Walter W. Law, Jr., et al., Constituting the State Tax Commission, Respondent.
    (Submitted October 4, 1928;
    decided October 26, 1928.)

      George F. Lewis and Murray D. Welch for appellant.
    The State Tax Commission erroneously fixed the tax under section 214 of the Tax Law at $2,500, being one mill upon each dollar of the paid-in capital stock of relator. The tax was imposed, and the basis of computation was fixed, by the Tax Law as it stood (L. 1919, ch. 628, §§ 3-6).

      Albert Ottinger, Attorney-General (Claude T. Dawes and John T. Smith of counsel), for respondent.
    An interpretation of the statute, that a domestic corporation with all its capital here escapes a tax based on that capital simply because it has no real or tangible personal property is erroneous. (New York v. Jersawit, 263 U. S. 493; People ex rel. Claire Belle Dresses v. State Tax Commission, 221 App. Div. 471; Underwood Typewriter Co. v. Chamberlain, 254 U. S. 113,)
   Per Curiam.

The relator having no real or tangible property within the State is subject to the minimum tax of ten dollars. (Tax Law, § 214.)

The order appealed from should be reversed, with costs in this court and in the Appellate Division, and the determination of the State Tax Commission modified by reducing the tax to ten dollars.

Concur: Cardozo, Ch. J., Pound, Crane, Andrews, Lehman and O’Brien, JJ. Not sitting: Kellogg, J.

Ordered accordingly.


text:
    Vincenza Palombi, as Administratrix of the Estate of Giovanni Palombi, Deceased, Appellant, v. Anna Volpe, Respondent.
    (Argued October 18, 1928;
    decided October 26, 1928.)

      Samuel Mazzola for appellant.
    The agreement is definite and certain and contains every material and essential item necessary to comply with the Statute of Frauds. (De Goode v. Benton, 125 N. Y. Supp. 662; Newberger v. American Surety Co., 244 N. Y. 134; Pelletreau v. Brennan, 113 App. Div. 806; Smith v. United Traction & Electric, Co., 49 App. Div. 641; 168 N. Y. 597; Ketchum v. Evettson, 13 Johns. 365; Beveridge v. West Side Construction Co., 130 App. Div. 139; N. E. B. Holding Co., Inc., v. McKinley, 246 N. Y. 40; Ellis v. Miller, 164 N. Y. 434.)

      Charles A. Galotta and Gilbert M. Levy for respondent.
    The minds of the parties never met on a completed contract. (U. S. v. Carlin Const. Co., 224 Fed. Rep. 859; Sanders v. Pottlitzer Bros. Fruit Co., 114 N. Y. 209; Belbird Realty Corp. v. Wolfson, 221 App. Div. 67; Ansorge v. Kane, 244 N. Y. 395; Keystone Hardware Corp. v. Tague, 246 N. Y. 79.)
   Per Curiam.

The informal memorandum of the agreement made by the parties provides for the lease to the plaintiff of a restaurant and an apartment above the restaurant for a term of five years with an option to renew the lease for a further term. Though the parties contemplated that a formal lease should be made thereafter, the informal memorandum does not leave open for further negotiation any essential provisions which should be embodied in the lease. It contains a clause that the tenant should have the “ privilege to go through the hall of the house.” It is evident that the parties understood that the promised privilege of passage through the hall can be made available only if an opening is made between the restaurant and the hall. The Tenement House Department has refused to permit the opening to be made and the parties are unable to agree upon any other practicable means of access to the hall.

The defendant cannot give to the plaintiff the premised privilege of passage through the hall without violation of the law. The court might under some circumstances still decree specific performance of the agreement so far as the defendant is in a position to carry out that agreement, but here the plaintiff has refused to accept or pay for the apartment above the restaurant, because, without the privilege of passage through the hall, the apartment cannot be used for its intended purpose in connection with the restaurant. The court cannot compel the defendant to carry out that part of the agreement which would cause a violation of the law and the plaintiff has refused to accept without that part all the premises which the defendant has agreed to lease. To sever the agreement and compel the defendant to make a lease of the restaurant alone would in effect be specific performance, not of an agreement made by the parties, but of an agreement made for them by the court.

The judgment should be affirmed, with costs.

Cardozo, Ch. J., Pound, Crane, Andrews, Lehman, Kellogg and O’Brien, JJ., concur.

Judgment


text:
    Celia Pores, Respondent, v. H. Blumenberg, Inc., et al., Appellants.
    (Argued October 17, 1928;
    decided October 26, 1928.)

      Charles J. McDermott for appellants.
    There is nothing in this case warranting a judgment against the individual defendant. (Knowles v. City of New York, 176 N. Y. 430; Urts v. Railroad Co., 202 N. Y. 170; Bank v. Wheelock, 82 N. Y. 118.) The motions to dismiss the complaint should have been granted. (Fielder v. Darrin, 50 N. Y. 437; Morrison v. Verdinal, 53 Hun, 63; Lydecker v. Verdinal, 126 N. Y. 630; Palen v. Johnson, 50 N. Y. 49; Wheelock v. Lee, 64 N. Y. 242.)

      Maxwell Arent and Frank Comesky for respondent.
   Per Curiam.

The defendant agreed to loan to the plaintiff the sum of twenty thousand dollars to be secured by a first mortgage on plaintiff’s property. The plaintiff agreed that the lender might charge the sum of three thousand dollars and might retain that amount out of the twenty thousand dollars loaned. The transaction has been carried out exactly as the parties agreed. At the time of closing the lender handed to the plaintiff a check for twenty thousand dollars which the plaintiff then indorsed and handed back to the lender’s attorney. At the direction of the plaintiff and in her behalf he disbursed the moneys loaned to the plaintiff, retaining only the sum of three thousand dollars. The statement of the disbursements describes the three thousand dollars as a fee and brokerage to the attorney.

Apparently the agreement that the lender might retain three thousand dollars as a charge for making the loan was usurious, but the mortgage has been paid by a subsequent purchaser of the real property. Concededly, lapse of time has barred any action brought in accordance with the provisions of section 372 of the General Business Law to recover the moneys which have been wrongfully exacted for the loan. Uncontradicted evidence produced by the plaintiff herself shows that she has received from the lender or that the lender has paid in her behalf all the moneys which it was agreed that she should receive from the loan. No basis in law remains for any recovery by the plaintiff at this time.

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

Caedozo, Ch. J., Pound, Cbane, Andbews, Lehman, Kellogg and O’Bbien, JJ., concur.

Judgment reversed, etc.