text:
    In the Matter of Edward M. Nash, Respondent, against Paul B. Brooks et al., Individually and as Members of the Medical Board of the New York State Employees’ Retirement System, et al., Appellants.

      Argued October 1, 1937;
    decided November 23, 1937.

      John J. Bennett, Jr., Attorney-General (Joseph M. Mesnig of counsel), for appellants.
    Certiorari lies only to review a final determination and there has been no final determination here. (Matter of Reed v. Bd. of Standards & Appeals, 255 N. Y. 126; People ex rel. Pennsylvania Gas Co. v. P. S. Comm., 181 App. Div. 147; People ex rel. Oyster Bay v. Woodruff, 64 App. Div. 239; Matter of Haase v. Elmira, 206 App. Div. 14; People ex rel. Cohen v. York, 43 App. Div. 138; Matter of Weeks, 97 App. Div. 131; Matter of Hall v. Hood, 121 Misc. Rep. 572.) Certiorari lies only to review judicial or quasi-judicial acts and the action here sought to be reviewed is not of that character. (People ex rel. Graves v. Sohmer, 207 N. Y. 450; Matter of Daley v. Byrne, 250 App. Div. 666; Matter of Morgan v. Smith, 224 App. Div. 203; Matter of Sollecito v. Moss, 161 Misc. Rep. 168; Matter of Armstrong v. Murphy, 65 App. Div. 126; People ex rel. Copcutt v. Board of Health, 140 N. Y. 1; People ex rel. Schau v. McWilliams, 185 N. Y. 92; People ex rel. Steward v. Railroad Comm., 160 N. Y. 202; Matter of Kundel v. Greene, 236 App. Div. 607; People ex rel. R. & J. Co. v. Wiggins, 199 N. Y. 382; Matter of Standard Bitulithic Co., 212 N. Y. 179; People ex rel. Uvalde A. P. Co. v. Seaman, 217 N. Y. 70; People ex rel. Finnegan v. McBride, 226. N. Y. 252; People ex rel. Mayor v. McCarthy, 102 N. Y 630; People ex rel. Argus Co. v. Hugo, 101 Misc. Rep. 481.) The Appellate Division, through the medium of the wholly inapplicable remedy of certiorari, has erroneously taken to itself ministerial functions vested in the medical board and the Comptroller by statute. (Niagara Falls P. Co. v. Water P. & C. Comm., 267 N. Y. 265; Matter of Fitzpatrick v. N. Y. State Teachers’ Retirement Board, 212 App. Div. 760; 241 N. Y. 515.)

      John J. Donohue, Edward N. Scheiberling and John M. Schneider for respondent.
    Determinations made by the medical board of the New York State Employees’ Retirement System on application for accidental disability retirement under section 65 of the Civil Service Law (Cons. Laws, ch. 7) are reviewable by certiorari. (New York Edison Co. v. Maltbie, 242 App. Div. 874 ; 244 App. Div. 685; 271 N. Y. 103; People ex rel. C. P., N. & E. R. R. R. Co. v. Willcox, 129 App. Div. 267; 194 N. Y. 383; People ex rel. Toms v. Board of Supervisors, 199 N. Y. 150; Matter of Slattery v. Board of Estimate & Apportionment, 271 N. Y. 346.) The mere fact that the medical board is not expressly required by statute to hold hearings on applications for accidental disability retirement does not prevent review of its determinations by certiorari. (People ex rel. Hallock v. Hennessy, 205 N. Y. 301; People ex rel. Steward v. Railroad Commrs., 160 N. Y. 202; People ex rel. Loughran v. Railroad Commrs., 158 N. Y. 421; Matter of New York Edison Co. v. Maltbie, 271 N. Y. 103.) The medical board had no power or authority to find that petitioner was not incapacitated as the result of an accident sustained in service, and its determination herein, having been based upon such illegal and erroneous finding, was properly annulled. (Matter of Slattery v. Board of Estimate & Apportionment, 271 N. Y. 346.) The provisions of the order of the Appellate Division directing the medical board to certify petitioner for retirement pursuant to the provisions of section 65 of the Civil Service Law are correct and proper, and should be sustained. (Matter of Slattery v. Board of Estimate & Apportionment, 246 App. Div. 296; 271 N. Y. 346.)
   Hubbs, J.

Petitioner made application for a certiorari order to review a determination of the medical board of the New York State Employees’ Retirement System and the New York State Employees’ Retirement System, by which determination the board decided that petitioner was ineligible for a retirement allowance based upon an alleged accidental injury. The certiorari order was granted ex parte at Special Term and later vacated. Petitioner appealed to the Appellate Division from the Special Term order vacating the certiorari order and, a return having been made in the meantime, that court heard the appeal from the order which vacated the certiorari order and at the same time heard the certiorari on the merits. It reversed the order of the Special Term vacating the certiorari order and decided on the merits that the determination of the medical board as to ineligibility of the petitioner for a retirement allowance because of such alleged injury should be annulled and remitted the matter to the New York State Employees’ Betirement System with a direction to disregard the findings of the medical board to the effect that petitioner’s incapacity was not the result of an accident and to grant a retirement allowance, based on the findings of the State Industrial Board, dated January 27, 1936, pursuant to which a compensation award had previously been made to petitioner.

The petitioner, who is a member of the New York State Employees’ Betirement System, at the time of the alleged accident was and for several years prior thereto had been in the employ of the State Insurance Fund as a medical examiner. . On June 3, 1935, he was examining a patient in the office of the State Insurance Fund and, while assisting the patient to arise from the examining table, felt a sharp, sticking pain in the chest and neck, was unable to breathe and collapsed. Claiming such accident to have caused angina pectoris, he filed a claim under the Workmen’s Compensation Law (Cons. Laws, ch. 67). The Industrial Board, on January 27, 1936, found that the accident caused the attack and arose out of and in the course of the employment. It made an award covering the period from June 3, 1935, to January 3, 1936, and ordered a continuation pending an examination by an expert as to whether the disability, if any, thereafter was temporary or permanent, partial or total. On June 19, 1936, petitioner applied to the New York State Employees’ Betirement System for accidental disability retirement, pursuant to the provisions of chapter 741 of the Laws of 1920, and amendments thereto. (Civil Service Law [Cons. Laws, ch. 7], art. 4.) The application was referred to the medical board of the system, pursuant to section 65 of that law, which provides: § 65. Accidental disability retirement. Medical examination of a member under sixty years of age in service for accident disability and investigation of all statements and certifications by him or on his behalf in connection therewith shall be made upon the application of the head of the department in which said member is employed, or upon the application of said member or a person acting in his behalf stating that said member is physically or mentally incapacitated for the performance of duty as a natural and proximate result of an accident sustained in service as a member and certifying the time, place and conditions of such service performed by said member resulting in such alleged disability, and that such alleged disability was not the result of wilful negligence on the part of said member and that said member should therefore be retired. * * * If such medical examination and investigation show that the said member is physically or mentally incapacitated for the performance of service as a natural and proximate result of an accidental injury received in such service while a member and that such disability was not the result of wilful negligence on the part of said member and that such member should be retired, the medical board shall so certify to the comptroller, stating the time, place and conditions of such service performed by said member resulting in such disability and the comptroller shall retire the said member for accident disability within ninety days after the execution and filing of application therefor with the comptroller. * * *

That Board, after investigation, certified to the Comptroller that there “ is not sufficient evidence to warrant the conclusion that [the petitioner] is incapacitated as a natural and proximate result of an accident sustained in service and in the performance of duty of the member.”

Thereupon the Comptroller advised the petitioner that, in view of the report of the medical board, he was unable to retire petitioner for accident disability.

It is impossible to determine from the report of the medical board whether it intended to find that petitioner was not incapacitated or that he was incapacitated but from a cause other than the accident in question.

The duty of the medical board is prescribed by statute. Subdivision 2 of section 55 of the Civil Service Law provides: “ 2. The medical board shall arrange for and shall pass upon all medical examinations required under the provisions of this article, shall investigate statements and certifications by or on behalf of a member in connection with application for disability retirement, and shall report to the comptroller its conclusions and recommendations thereon.”

It must determine whether a petitioner is incapacitated; if incapacitated, whether as the result of an accident sustained in the service, and whether the petitioner has been guilty of willful negligence. (Civil Service Law, § 65.)

The Comptroller has no discretion with respect to the retirement of applicants. If the medical board certifies that a member is entitled to retirement, the Comptroller must retire him. If it fails to so certify, he has no authority to retire the applicant.

The order of the Appellate Division, in remitting the matter to the New York State Employees’ Retirement System with instructions to disregard the finding of the medical board and grant a retirement, has the effect of determining questions, undetermined by the medical board, the primary duty of determining which have, by statute, been vested in that board. That a court may not do. (Matter of Fitzpatrick v. New York State Teachers’ Retirement Board, 212 App. Div. 760; affd., 241 N. Y. 515.)

It is necessary, therefore, that the order be modified by substituting for the instructions given a direction resubmitting the matter to the medical board with directions to make a report in accordance with the provisions of the statute. The adjudication of the Industrial Board that petitioner’s injury was accidental and arose out of and in the course of his employment is binding upon the medical board. (Matter of Slattery v. Board of Estimate & Apportionment, 271 N. Y. 346.)

The medical board is precluded from finding that there was no accidental injury arising out of and in the course of petitioner’s employment, but it still has the burden of determining the question of incapacity, or whether the incapacity, if existent, resulted from the particular accident or from some other cause.

It is urged on the part of the appellants that certiorari does not he for the reason that the determination is not final. This objection may be disregarded. (Civil Practice Act, § 111.)

It is also contended that certiorari lies only to review judicial or quasi-judicial acts and that the action here sought to be reviewed is not of that character. The determination made affected substantial rights and was not merely the promulgation of administrative regulations. It was, therefore, quasi-judicial in character. (Matter of N. Y. Edison Co. v. Maltbie, 271 N. Y. 103.)

Finally, appellant urges that the proceeding is not maintainable because the determination sought to be reviewed was that of the medical board and the Comptroller alone could retire an applicant. The answer is, of course, that the statute places the issue to be determined with the medical board and delegates to the Comptroller only an administrative duty, mandatory in nature and dependent upon the determination of the medical board.

The order of the Appellate Division, reversing the order of the Special Term which vacated the order of certiorari, should be affirmed, and its order annulling the determination of the medical board modified in so far as it directs the medical board to certify petitioner’s incapacity and directs petitioner’s retirement by the New York State Employees’ Retirement System by substituting a direction to said board that it reconsider the application and certify its findings in accordance with the requirements of the statute and that upon receipt of such report, the defendant New York State Employees’ Retirement System take such action relative to the retirement of petitioner as the facts thus determined may require.

The order should be modified in accordance with this opinion and as so modified affirmed, without costs.

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

Ordered accordingly.


source: Caselaw Access Project

author: Rippey, J.

license: Public Domain

text:
    Edna Betz, Respondent, v. Peter Horr, Appellant.

      Submitted October 1, 1937;
    decided November 23, 1937.

      Sidney Zimet, Eugene Sherk and Bernard E. Perelson for appellant.
    The adoption statutes, without qualification or exception, relieve the natural parents from all responsibility for children adopted. (Matter of Heye, 241 App. Div. 907; Matter of MacRae, 189 N. Y. 142; Matter of Cook, 187 N. Y. 253; Gross v. Gross, 110 Misc. Rep. 278; Matter of Hering, 196 N. Y. 218; Matter of Thomas, 216 N. Y. 426.) Section 125 of the Public Welfare Law (Cons. Laws, ch. 42) does not affect the status under nor does it change or supersede section 114 of the Domestic Relations Law (Cons. Laws, ch. 14). (Matter of Heye, 241 App. Div. 907; Matter of MacRae, 189 N. Y. 142; Matter of Cook, 187 N. Y. 253; Gross v. Gross, 110 Misc. Rep. 278.)

      Paul Windels, Corporation Counsel (Paxton Blair, Arthur Bainbridge Hoff and Benjamin Rosen of counsel), for respondent.
    Upon the inability of foster parents to support an indigent adopted child, the burden should shift to the natural parents rather than to the public treasury. (Matter of McKeag, 141 Cal. 403; Purinton v. Jamrock, 195 Mass. 187; People ex rel. Metropolitan St. Ry. Co. v. Tax Commissioners, 174 N. Y. 417; Porter v. Powell, 79 Iowa, 151; Hendrickson v. Town of Queen,
      149 Minn. 79; Southern California Edison Co. v. Industrial Accident Comm., 92 Cal. App. 355; New York Central R. R. Co. v. White, 243 U. S. 188; Middleton v. Texas Power & Light Co., 249 U. S. 152; Chamberlin, Inc.,, v. Andrews, 271 N. Y. 1; 299 U. S. 515; Dawley v. McKibbin, 245 N. Y. 557; Cohen v. Neustadter, 247 N. Y. 207; Borgnis v. Falk Co., 147 Wis. 327; Matter of Kane v. Necci, 269 N. Y. 13; People v. Wolfe, 272 N. Y. 608.)
   Rippey, J.

The petitioner, Edna Betz, brought this proceeding against her natural father, Peter Horr, in the Domestic Relations Court of the City of New York to compel him to furnish her with support on the ground that she was unable to maintain herself and was likely to become a public charge. After a trial, the court ordered appellant to pay to petitioner four dollars per week commencing September 8, 1936. Subsequently a motion to vacate the foregoing order was denied. An appeal was taken to the Appellate Division, second department, where the order was affirmed by a divided court but leave to appeal to this court was granted and the question Should the motion have been denied? ” was certified for our consideration.

The facts presented at the trial were not in dispute. Petitioner is the legitimate daughter of Peter Horr and was twenty-three years of age when the proceeding was commenced. Her natural mother is dead. On January 26, 1915, an order and decree of adoption was made by the County Court of Queens county whereby she was adopted by her maternal grandparents, George Betz and Catharena Betz. By the terms of the order she was authorized to and did assume the name of her foster parents. Catharena Betz is now dead and George Betz is unable to contribute to petitioner’s support. Peter Horr is a blacksmith sixty years of age and earning between twenty-one and twenty-four dollars per week. The petitioner is ill, incapable of supporting herself, and is liable to become in need of public relief.

By the provisions of subdivision 4 of section 101 of the Domestic Relations Court Act of the City of New York in force when this proceeding was commenced (Laws of 1933, ch. 482), “ the parents, the grandparents, the children and the grandchildren of a dependent adult who has been a resident of the city at any time during the twelve months preceding the filing of the petition for his support, and who is unable to maintain himself and is likely to become a public charge are hereby declared to be severally chargeable with the support of such poor relative.” Liability of the “ father ” for the support of a destitute adult child who is or is liable to become a public charge is made of statewide application by the provisions of section 125 of the Public Welfare Law (Cons. Laws, ch. 42). Section 914 of the Code of Criminal Procedure provides, among other things, that the father of a recipient of public relief or of a person liable to become in need thereof shall, if of sufficient ability, be liable for his support.

Defendant asserts he is relieved from any such liability by virtue of the adoption decree. That decree provided that petitioner should thereafter be regarded and treated in all respects as the lawful child of the foster parents, that they were thereby deemed to have incurred the responsibilities of parents in respect to such minor ” and that the said George Betz and Catharena Betz, his wife, on the one part and the said minor on the other side shall sustain toward each other, the legal relation of parents and child, and have all the rights and be subject to all the duties of that relation.” The question for our determination is the effect of adoption on the liability of the defendant as the natural “ father ” or “ parent ” of plaintiff under the provisions of the adoption decree and of the above-mentioned statutes relating to support for impoverished children.

Adoption, as a form of domestic relation, was unknown to the common law and exists only by statute. (Matter of Thorne, 155 N. Y. 140.) Earlier than 1873, charters were granted by the Legislature in which specific charitable societies were authorized to cause their wards to be adopted, but the first general statute in this State covering adoption was chapter 830 of the Laws of 1873. Amendments to parts of that act were made by chapter 703 of the Laws of 1887 and general provisions for adoption were continued by sections 60-68 of chapter 272 of the Laws of 1896. Adoption now is controlled by the provisions of article 7 of the Domestic Relations Law (Cons. Laws, ch. 14; Laws of 1909, ch. 19, §§ 110-118, as amd.). Section 114 relates to the effect of adoption. Among other things, that section provides that “ thereafter the parents of the person adopted are relieved from all parental duties toward, and of all responsibility for, and have no rights over such a child, or to his property by descent or succession.” The act further provides that the adopted child’s “ rights of inheritance and succession from his natural parents remain unaffected by such adoption.” The Legislature further decreed that “ the foster parent or parents and the person adopted sustain toward each other the legal relation of parent and child, and have all the rights and are subject to all the duties of that relation, including the right of inheritance from each other * * * an(i such right of inheritance extends to the heirs and next of kin of the person adopted, and such heirs and next of kin shall be the same as if he were the legitimate child of the person adopting,” etc. The purpose of the section was to define the relation, after adoption, of the child to its natural parents and to its adopting parents, together with their reciprocal rights, duties and privileges.

This court has said that the legal effect of the foregoing statute was to make the adopted child the natural child of the adoptive parent (Carpenter v. Buffalo General Electric Co., 213 N. Y. 101, 108), to give the “adopted child the same legal relation to the foster parent as a child of his body ” (Matter of Cook, 187 N. Y. 253, 260), and that “ the adoption divests the natural parents of the relation which they had theretofore sustained toward the infant and such change of relation is in no way affected by the death of the foster parent or parents.” (Matter of MacRae, 189 N. Y. 142, 147.) In Gross v. Gross (110 Misc. Rep. 278) it was held that the duty of the natural parent to support the child ceases after adoption.

The statutes above referred to must be read together. The intent and purpose of the legislative commands must be found from the statutes relating to the same general subject-matter taken as a whole. (Seligman v. Friedlander, 199 N. Y. 373.) The same words cannot mean one thing in the Domestic Relations Law and have an entirely different meaning in the Public Welfare Law, the Domestic Relations Court Act of New York City and the Code of Criminal Procedure, unless such an intent on the part of the Legislature is clearly expressed. The Legislature has expressed no such intent. We think it clear that the word father ” or “ parent ” as used in those statutes refers, after adoption takes place, to the foster parent or foster father and excludes the natural parent from legal liability for support of the adopted child thereafter under all contingencies.

The trial court and a majority of the Appellate Division felt that such a construction would be contrary to public policy. If the question of public policy is here involved, the Legislature has decreed that it is the public policy of the State to relieve the natural parent from any responsibility for his child’s support after it has been duly adopted by another. To bring about the result arrived at by the lower courts it would be necessary to read into section 114 of the Domestic Relations Law an intent to preserve the duty and responsibility of the natural parent to support the child notwithstanding the plain and unambiguous provision that, after adoption, all responsibility of the natural parent for the child ceases, and to read into section 125 of the Public Welfare Law and into the provisions of the Domestic Relations Court Act and Code of Criminal Procedure above referred to a meaning of the term “ father ” or parent ” which covers, at the same time, both the natural father whose responsibilities have ceased and the foster father whose responsibilities are absolute after adoption. The wording of the statutes and the intent and purpose of the Legislature seems to be clear and unambiguous and courts are not privileged to read into the statutes a different meaning, purpose or intent.

The orders should be reversed, the motion to vacate should be granted, without costs, and the question certified answered in the negative.

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

Orders reversed, etc.


author: O’Brien, J.

text:
    In the Matter of the Accounting of William C. Van Dorn, as Executor of Alice E. Wilson, Deceased, Respondent. The Ministers and Missionaries Benefit Board of the Northern Baptist Convention, Appellant; Albert C. Wilson et al., Respondents.
    Argued October 4, 1937;
    decided November 23, 1937.

      G. Burchard Smith for appellant.
    The courts below have improperly construed clause “ 9 ” of the will. The brother of testatrix had no right of election whereby he could receive the capital sum in lieu of an annuity. (Matter of Gallien, 247 N. Y. 195; Phillips v. Davies, 92 N. Y. 199; Eidt v. Eidt, 203 N. Y. 325.) The will did not create an annuity for the brother of testatrix. (Matter of Burton, 156 Misc. Rep. 175; Matter of Kidd, 142 Misc. Rep. 512; Matter of Dewey, 153 N. Y. 63; Matter of Smathers, 133 Misc. Rep. 812; Matter of Gabler, 140 Misc. Rep. 581; Matter of Johnson, 144 Misc. Rep. 60; Matter of Perelman, 148 Misc. Rep. 906; Matter of Adriance, 158 Misc. Rep. 857.)

      Charles L. Hoey, W. P. Butler and Charles F. King for Albert C. Wilson, respondent.
    The inference from the will alone, without reference to the extrinsic evidence, is conclusive that testatrix intended to create an annuity with the right of election. (Matter of Oakley, 142 Misc. Rep. 1; Matter of Cole, 219 N. Y. 435; Matter of Proctor, 235 App. Div. 6; Kearney v. Cruikshank, 117 N. Y. 95.)
   O’Brien, J.

The construction of the ninth paragraph of Alice E. Wilson’s will is involved in this appeal. It provides: I give and bequeath to the Minister’s and Missionary Benefit Board of the Northern Baptist Convention, New York City, sum of $2,000 as an annuity, the income from same to be paid to my brother Albert C. Wilson during his lifetime.” Prior to the execution of this will, correspondence occurred between Miss Wilson and the Ministers and Missionaries Benefit Board, in the course of which the secretary of the board wrote: “ Loved ones of course should be remembered. And Christ and His cause should share with others in direct bequests. You may also make the same bequest benefit a loved one for life, and, provide for a definite Christian service thereafter each year in perpetuity. * * * That which is left to this Board by Will or otherwise is never lost. Therefore, many people are specifying in addition to direct bequests, that certain other bequests shall be used at their decease to secure Annuity Bonds from this Board in favor of relatives or friends. Those so remembered receive generous incomes for life without danger of loss. The principal is kept intact as an Endowment Fund, and, after the decease of the one remembered the full principal sum continued to bear interest for the cause of Christ. It is true benevolence to give income to loved ones rather than responsibility. * * * It is the settled policy of the Ministers and Missionaries Benefit Board to place in Permanent Funds the total principal sums given on the Annuity Plan. A high annuity rate is paid for fife and then, the full original amount continues to bear interest for the benefit of our Baptist Ministry. Thus your fife is projected into the future in a gracious Christian service. * * * Perhaps you can help us. Many have made Wills remembering this cause. Some of them possess very little, but they are happy that they can make even small bequests which will be placed in permanent funds bearing their names. The income will be used forever to provide the necessities of life for our aged ministers and missionaries. * * * Some must make provision for loved ones by Will. In such cases a bequest may be made to this Board with the understanding that an annuity will be paid for life, to a son or daughter, or to husband or wife or friend.” \

The courts below have held that the ninth clause of the will directs the purchase of an annuity for the sole benefit of the brother without any valid gift over and that, therefore, he has the right to elect to take the capital sum instead of having it invested for the purpose of purchasing an annuity. As we interpret the language of that clause, the bequest is to the Board subject to payment of an annual income to the brother during his lifetime. We think such an intent was clearly expressed.

The orders should be reversed, without costs.

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

Orders reversed.


author: Finch, J.

text:
    National Bondholders Corporation et al., on Behalf of Themselves and Others Similarly Situated, Appellants, v. William B. Joyce et al., Defendants. Lillian Boehm, Respondent.
    Argued October 4, 1937;
    decided November 23, 1937.

      Sol M. Stroock and John S. Montgomery for appellants.
    Petitioner is not entitled as a matter of law to intervene since the discretion vested in the court by virtue of its supervision over all phases of the liquidation of an insurance corporation includes full discretion to permit or deny her application for intervention. (Gallin v. Burdick, 265 N. Y. 492; Matter of People [Casualty Co.], 244 N. Y. 443; Matter of People [Title & Mortgage Guarantee Co.], 264 N. Y. 69; Broderick v. Marcus, 144 Misc. Rep. 310; 236 App. Div. 722; Isaac v. Marcus, 258 N. Y. 257; Guaranty Trust Co. v. Minneapolis & St. Louis R. R. Co., 52 Fed. Rep. [2d] 418; Palmer v. Bankers’ Trust Co., 12 Fed. Rep. [2d] 747; Ithaca Gas Light Co. v. Treman, 93 N. Y. 660; People v. Anglo-American Savings & Loan Ass., 66 App. Div. 9; 169 N. Y. 606; Matter of Fontana, 85 Hun, 219; Dresdner v. Goldman-Sacks Trading Corp., 240 App. Div. 242.)

      Joseph M. Proskauer, J. Alvin Van Bergh and Albert L. Solodar for William B. Joyce et al., defendants, in support of appellants.
    The granting of permission to intervene is discretionary with the court under the Insurance Law (Cons. Laws, ch. 28). (Gallin v. Burdick, 265 N. Y. 492; Isaac v. Marcus, 258 N. Y. 257; Wormser v. Metropolitan Street Ry. Co., 184 N. Y. 83; Towers v. African Tug Co., [1904] 1 Ch. 558; Matter of People [Casualty Co.], 244 N. Y. 443.) Intervention is always discretionary in derivative stockholder suits under a court’s general equitable powers. (Rosenberg v. Salomon, 144 N. Y. 92; Gittleman v. Feltman, 191 N. Y. 205.)

      Louis Boehm, Gabriel Rubino and Samuel Zeiger for respondent.
    Petitioner is entitled to intervene as of right. (Maas v. Sullivan, 124 Misc. Rep. 295; 213 App. Div. 820; Chase Nat. Bank v. 10 E. 40th St. Corp., 238 App. Div. 370; Irish Free State v. Guaranty Safe Deposit Co., 126 Misc. Rep. 269; Uhlfelder v. Tamsen, 15 App. Div. 436; Curtis v. Goldberg, 137 App. Div. 10; Winfield v. Stacam, 40 App. Div. 95; Friedman v. Schreiber, 50 Misc. Rep. 617; Lowenstein v. Reekes, 140 Misc. Rep. 645; Matter of Bohnet v. Mayor, 150 N. Y. 279; Brennan v. Hall, 131 N. Y. 160; Meyer v. Title Guarantee & Trust Co., 227 App. Div. 818; 228 App. Div. 641; Industrial & R. F. Corp. v. Continental B. & T. Co., 242 App. Div. 598.)
   Finch, J.

Plaintiffs appeal, by permission of the Appellate Division, first department, from an order of reversal upon a certified question: <i< Is the petitioner Lillian Boehm entitled as a matter of law to intervene in this action and to be joined as a party plaintiff? ” The order at Special Term, denying the motion of petitioner to intervene and to be joined as a party plaintiff herein, was reversed on the law and not in the exercise of discretion, and the intervention granted.

The petitioner, a minority stockholder of the National Surety Company in liquidation, moved at Special Term for leave to intervene and be joined as a party plaintiff in this action.

The action is a derivative one, brought to recover from former directors and officers of the National Surety Company and others for wrongs done by them to the corporation. It was instituted as the result of an investigation made into the affairs of the surety company by the Superintendent of Insurance in the course of rehabilitation and subsequent liquidation proceedings. On May 9, 1935, the Superintendent of Insurance by motion applied to the Special Term for instructions whether such action should be brought, and a report was submitted recommending that the Superintendent should take no action. Upon the return day of the order to show cause, many counsel representing creditors and stockholders appeared and urged that suits should be instituted against the former officers, directors and others. At this time, neither petitioner nor her counsel appeared, although service of the order to show cause had been made upon her. The court at Special Term in an opinion disapproved the recommendation of the Superintendent of Insurance, relieved the latter, with bis acquiescence, of instituting an action, and directed that the three largest groups represented at the hearing, namely, bondholders, other creditors and stockholders, nominate three individuals, one from each group, to act as plaintiffs to sue in a representative capacity. For this purpose the court directed four named counsel to start the action in order to prevent the running of the Statute of Limitations. The original complaint was prepared by counsel designated by the court and submitted to the court for approval, and has now been superseded by the present amended complaint, containing twenty-six causes of action. Before the action was reached for trial, plaintiffs received a substantial offer of settlement from the defendants, and at the time of the argument herein, an application was pending before the court at Special Term, in its capacity as supervisor of liquidation proceedings, for approval of the proposed settlement. ■

The order of the Supreme Court, commencing liquidation proceedings of the National Surety Company was entered on or about June 1, 1934, pursuant to the Insurance Law (Cons. Laws, ch. 28; § 404, subd. 1). By virtue of this order the Superintendent as liquidator was vested with all causes of action theretofore vested in the company, including any causes of action against former directors. (Insurance Law, § 404, subd. 2; Isaac v. Marcus, 258 N. Y. 257, 268; Gallin v. Burdick, 265 N. Y. 492.) Petitioner, however, urges that here the action is not brought by the Superintendent as rehabilitator liquidator, but by bondholders, other creditors, and stockholders, and that, therefore, petitioner has an absolute right to intervene. It is a complete answer to this contention that a court of equity, by virtue of its supervision over all phases of the liquidation of a financial corporation, possesses full discretion to permit or deny an application for intervention. The conduct of the liquidation is subject in all its phases to the supervision and control of the court, except in so far as the Legislature may have vested discretionary power in the Superintendent. Save for this, the court in its discretion, may veto the acts of the Superintendent as liquidator, and is vested with a discretion which may override that of the Superintendent. If the present action had been brought by the' Superintendent, his conduct would have been subject to the supervision and discretion of the court, in accordance with the decisions of this court. In such an action the application of a stockholder to intervene would rest within the discretion of the court. In Matter of People (Title & Mortgage Guarantee Co.) (264 N. Y. 69, 80) this court said: “ The Superintendent becomes a statutory receiver; the property of the corporation is brought into the protective arm of the law and the receiver is subject to directions of the court except in so far as discretionary power is vested by the Legislature in him.”

In the case at bar the Superintendent was-unwilling to bring the present action. This fact does not diminish the responsibility and discretion of the court. Indeed the facts would seem to show that inasmuch as here the court directed this action to proceed, and approved the complaint, these functions of the court became of even greater importance. Upon the withdrawal of the Superintendent of Insurance, the discretion of the court became exclusive. By directing and authorizing the present action, the court did not oust itself from its full discretion. In the discharge of this discretion, the court authorized the bondholders, other creditors and stockholders to nominate three individuals, one from each group, to prosecute the actions. Each of the plaintiffs was chosen to represent all the members of such groups in the institution of this action, and the court at Special Term has found that the action “is in the hands of competent attorneys to whom it was entrusted after careful consideration.”

The court of equity, having complete supervision of this action, had the right in its discretion to refuse to: permit the petitioner to intervene.

It follows that the order of the Appellate Division should be reversed and that of the Special Term affirmed, with costs in this court and in the Appellate Division. The certified question should be answered in the negative.

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

Ordered accordingly.


text:
    The People of the State of New York, Respondent, v. Jack Parisi, Appellant.

      Argued October 11, 1937;
    decided November 23, 1937.

      Arthur V. D. Chamberlain and Jacob W. Friedman for appellant.
    Prejudicial error was committed in the instructions, particularly in expressly .negativing the defense of alibi. (People v. Bussell, 266 N. Y. 147; People v. Robins, 242 App. Div. 516; People v. Alex, 260 N. Y. 425.) The absence of the judge from the courtroom during the taking of the exceptions invalidated the proceedings, deprived the defendant of a constitutional right and was clearly reversible error. (People v. Silver, 240 App. Div. 259; Ellis v. People, 21 How. Pr. 356; People v. Spohr, 206 N. Y. 516; Sterrett v. Third Nat. Bank, 122 N. Y. 659; People v. Bragle, 88 N. Y. 585; People v. Tupper, 122 Cal. 424.) The case is not governed by section 542 of the Code of Criminal Procedure. (People v. O’Regan, 221 App. Div. 331; People v. Purtell, 243 N. Y. 273; People v. Sobieskoda, 235 N. Y. 411; People v. Smith, 232 N. Y. 239.)

      William F. X. Geoghan, District Attorney (Ralph K. Jacobs and Henry J. Walsh of counsel), for respondent.
    The trial court’s charge was free from error. (People v. Smith, 180 N. Y. 125; Sindram v. People, 88 N. Y. 196; People v. Leach, 146 N. Y. 392; People v. Fanning, 131 N. Y. 659.) The court committed no error in requiring that the exceptions to its charge be noted in the absence of the jury and the court. (Polykranas v. Krausz, 73 App. Div. 583; Hunt v. Becker, 173 App. Div. 9; Utica Nat. Bank & Trust Co. v. Nickel, 128 Misc. Rep. 614; People v. Fisher, 223 N. Y. 459; Kittredge v. Grannis, 236 N. Y. 375.)
   O’Brien, J.

Appellant has been convicted of the crime of grand larceny, second degree, for abstracting money and jewelry from the apartment of Patsy Lopresti in Brooklyn. He was identified by Lopresti as the man who stole his property and his defense was an alibi. He testified that at the time of the commission of the crime he was working in his store and had nothing to do with the hold-up. An issue of fact was presented by this conflicting testimony, but in his charge the trial judge stated: “If he has an alibi, he can produce it. He has not produced any. * * * It is a mighty good defense if true, but not a single witness has been put on the stand to prove an alibi. Therefore, this is a point of law, the law says that you have a right to assume that the defendant cannot produce alibi witnesses. I heard counsel argue, I did not interrupt him, that you should assume that the defendant was elsewhere because if he had been a participant in the crime that he could have put on a fake alibi, and because he did not put on a fake alibi, you, therefore, have a right to assume failure so to do as a substitute 'for a genuine alibi. I charge you, as a matter of law, that that argument is not worth two pins.” The court having charged the fact to be that no witness had testified in respect to an alibi, counsel requested a charge that there is evidence by defendant which, “ if believed by the jury, is sufficient to establish the defense of alibi, just as much as if he had called another witness, if there was such witness in his store on the night in question.” The court did not comply with this request but did charge: “ If there is any such evidence, gentlemen, then my charge on alibi applies to failure to produce other witnesses, disinterested witnesses.” Again, counsel requested a charge that “ if they [the jury] find that this defendant’s testimony be true, that he was in his store that night and that there is no witness that he can bring to court to corroborate his testimony, that he was in fact in his own place of business that night, that because of his failure to produce witnesses when there were none, may not be held against him, that this charge may not be construed against him in determining his guilt or innocence,” but the court declined. Defendant was entitled to have the jury instructed in respect to the value of his own testimony, if believed by the jury, and the court’s refusal so to charge constitutes reversible error.

Immediately after the retirement of the jury, counsel stated to the court that he wished to note some exceptions. Thereupon the court replied: Dictate them to the stenographer,” and left the room. These exceptions were not heard by the judge. If he had been present, perhaps he might have modified his rulings. That is one of the purposes of an exception. (Sterrett v. Third Nat. Bank, 122 N. Y. 659, 662.) Moreover, since the judge is a most important part of a court, it is his duty to be present throughout all proceedings relating to the trial. We hold that these errors are not such as may be disregarded under section 542 of the Code of Criminal Procedure.

Thé judgments should be reversed and a new trial ordered.

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

Judgments reversed, etc.


author: Loughran, J.

text:
    In the Matter of the Accounting of Bankers Trust Company, as Trustee under the Will of A. Walker Otis, Deceased. Maude D. Hendrickson, Appellant and Respondent. William B. Stitt, as Special Guardian for Margaret E. Otis, an Infant, Respondent and Appellant. Bankers Trust Company, as Trustee, Respondent.

      Argued October 4, 1937;
    decided November 23, 1937.

      Matthew M. Campbell and C. McKenzie Lewis, Jr., for Maude D. Hendrickson, appellant and respondent.
    For the purpose of fixing the ratio of apportionment of the proceeds of the salvage operation, the income should be computed at the rate reserved in, and on the amount of, the original bond and mortgage for the entire period of the salvage. (Matter of Chapal, 269 N. Y. 464; Meldon v. Devlin, 31 App. Div. 146; 167 N. Y. 573; Matter of Jackson, 135 Misc. Rep. 329; 232 App. Div. 425 ; 258 N. Y. 281; Matter of Pelcyger, 157 Misc. Rep. 913; Hagan v. Platt, 48 N. J. Eq. 206; Matter of Tuttle, 49 N. J. Eq. 259; Trenton Trust & Safe Deposit Co. v. Donelly, 65 N. J. Eq. 119.) Where the new mortgage and cash were received by the trustee as proceeds of the salvage operation, the apportionment should be made of the proceeds as a whole and the distribution to the life -beneficiary of her share should be made from the cash. (Meldon v. Devlin, 31 App. Div. 146; 167 U. Y. 573; Parsons v. Winslow, 16 Mass. 361.) All advances from principal during the salvage should bear interest at the rate prevailing for legal investments and such interest should be paid currently .from the income of the property. (Matter of Pelcyger, 157 Misc. Rep. 913.) Rents from the realty acquired by the trustee because of the salvage, net after repayment of carrying charges incurred during the ownership, should be paid periodically to the life beneficiary on account of her ultimate distributive share. (Matter of Chapal, 269 N. Y. 464; Bankers Trust Co. v. Willis, 248 App. Div. 753; Matter of Pelcyger, 157 Misc. Rep. 913; Matter of Crimmins, 159 Misc. Rep. 499; Matter of McKeogh, 158 Misc. Rep. 734.) In the case of the mortgage exchanged for Home Owners’ Loan Corporation bonds, the salvage should be terminated at the closing of the Home Owners’ Loan Corporation loan. (Matter of Pelcyger, 157 Misc. Rep. 913.)

      William Britton Stitt, as special guardian for Margaret E. Otis, an infant, respondent and appellant.
    The rate of interest to be used in fixing the ratio of apportionment should be the prevailing rate of interest for legal investments, applied uniformly from the date of default to the date of ultimate liquidation upon the final sale of foreclosed property. (Matter of Chapal, 269 N. Y. 464; Lawrence v. Littlefield, 215 N. Y. 561; Matter of Marshall, 43 Misc. Rep. 238.) Both the cash and the purchase-money mortgage received upon the ultimate sale of the foreclosed property should be apportioned between the principal and income accounts so that each will receive a proportionate share in both. (Matter of Chapal, 269 N. Y. 464; Meldon v. Devlin, 31 App. Div. 146; 167 N. Y. 573; Matter of Pelcyger, 157 Misc. Rep 913.) For the purposes of apportionment the income account should not be credited with interest on the amount of advances made from principal during the salvage operation. (Matter of Chapal, 269 N. Y. 464; Matter of Pelcyger, 157 Misc. Rep. 913.) Surplus rents received from the property during the salvage operation (net after the payment of carrying charges and reimbursement of principal advances) should be accumulated until the completion of the salvage operation. (Matter of Chapal, 269 N. Y. 464; Matter of Crimmins, 159 Misc. Rep. 499; Matter of McKeogh, 158 Misc. Rep. 734.) The Home Owners’ Loan Corporation bonds received in exchange for the defaulted bond and mortgage were not acquired in a salvage operation; the proceeds of the sale of such bonds belong to principal; and no apportionment thereof between principal and income accounts should be made. (Matter of Chapal, 269 N. Y. 464; Meldon v. Devlin, 31 App. Div. 146; 167 N. Y. 573; Matter of Moore, 54 L. J. Ch. 432; Hagan v. Platt, 48 N. J. Eq. 206; Matter of Hagen, 262 N. Y. 301; Stewart v. Phelps, 71 App. Div. 91; 173 N. Y. 621; Matter of New York Life Ins. & Trust Co., 24 Misc. Rep. 71; Matter of Dwight, 171 App. Rep. 757; Matter of Penn-Gaskell, 208 Penn. St. 346; Matter of Graham, 198 Penn. St. 216; Miller v. Payne, 150 Wis. 354; Matter of United States Trust Co., 190 App. Div. 494; Matter of Edgar, 157 Misc. Rep. 10.)

      Andrew I. Farb for Bankers Trust Company, as trustee, respondent.
    In setting up the ratio of apportionment, interest on the original capital should be computed (A) from the date to which interest had been paid by the owner to the date of acquisition of title by the trustee at the rate reserved in the mortgage, and (B) from the date of acquisition of title to the date of sale at the rate of interest generally prevailing on legal investments during such period. (Matter of Chapal, 269 N. Y. 464; Metropolitan Life Ins. Co. v. Childs Co., 230 N. Y. 285; Matter of Marshall, 43 Misc. Rep. 238; Lawrence v. Littlefield, 215 N. Y. 561; Matter of Nirdlinger, 26 D. & C. [Pa.] 3; Matter of Pelcyger, 157 Misc. Rep. 913.) The amount apportioned to income should be paid to the income account in cash out of the cash proceeds of sale; if the cash is insufficient, the balance should be paid from other cash principal on hand, or temporarily by a participating interest in the purchase-money mortgage, to be a hen on the principal funds and to be paid out of the first cash principal funds on hand. The amount apportioned to principal should be paid by transferring the mortgage (or the balance thereof) to the principal account. (Matter of Nirdlinger, 26 D. & C. [Pa.] 3; Matter of Pelcyger, 157 Misc. Rep. 913; Matter of Gilbert, 176 App. Div. 850; Matter of New York Title & Mortgage Co., 160 Misc. Rep. 67.) Interest at the rate prevailing on legal investments should be allowed as an operating expense on moneys advanced out of principal for foreclosure expenses and carrying charges. Such interest should be paid out of income derived from the property at the time of the repayment of such advances or thereafter, and in the absence of such income, from the proceeds of sale prior to making the apportionment. (Matter of Pelcyger, 157 Misc. Rep. 913; Matter of Schmutz, 159 Misc. Rep. 454; Matter of Nirdlinger, 26 D. & C. [Pa.] 3.) The surplus rents remaining after the principal account has been fully reimbursed for all advances should be partially distributed to the life beneficiaries subject to final adjustment after the sale of the property. (Matter of Chapal, 269 N. Y. 464; Matter of Pelcyger, 157 Misc. Rep. 913; Meldon v. Devlin, 31 App. Div. 146; 167 N. Y. 573; Matter of Marshall, 43 Misc. Rep. 238; Matter of Myers, 161 N. Y. Supp. 1111; Furniss v. Cruikshank, 230 N. Y. 495; Matter of Crimmins, 159 Misc. Rep. 499.) The Surrogate correctly held that the proceeds of sale of the Home Loan bonds should be apportioned on the same basis as the proceeds of sale of foreclosed property. Such apportionment, however, should be made as of the date of the closing of the Home Loan, and not as of the date of the sale of the bonds. (Matter of Chapal, 269 N. Y. 464; Jessewick v. Abbene, 154 Misc. Rep. 768; Matter of Pelcyger, 157 Misc. Rep. 913; Veasie v. Forsaith, 76 Me. 172; Matter of Colket, 20 Wkly. N. C. [Pa.] 71; Matter of Taylor, [1905] 1 Ch. 734; Cox v. Cox, L. R. 8 Eq. Cas. 343; Parsons v. Winslow, 16 Mass. 361; Greene v. Greene, 19 R. I. 619; R. I. Hospital Trust Co. v. Tucker, 52 R. I. 277; Quinn v. First Nat. Bank, 73 S. W. Rep. [2d] 692.)

      Thomas B. Fenlon, Albert Stickney, John E. Lockwood, W. H. Gambrell, C. Alexander Capron, Kendall M. Barnes, Leon Schaefler, William A. W. Stewart and Thomas C. Burk for Bank of New York and Trust Company et al., amici curiæ.

    If upon a sale by the trustee of foreclosed property, the proceeds of sale are paid to the trustee partly in cash and partly by the execution of a purchase-money mortgage, the cash received should, so far as possible, be used to satisfy the sum due to the life beneficiary. The whole purchase-money mortgage should be retained by the trustee, notwithstanding the fact that the life beneficiary, upon the liquidation thereof, may be entitled to part of the proceeds. (Matter of Pelcyger, 157 Misc. Rep. 913.) If the parcel of real property is productive of income, such income should be deemed to be income of the trust estate. It should be distributed as is other income, subject, however, to the exercise of sound discretion by the trustee as to whether the protection of the property requires that a portion of such income should be reserved to meet expenses subsequently accruing. (Matter of Chapal, 269 N. Y. 464.) In apportioning the proceeds of sale of property acquired on foreclosure of a mortgage, the amount of deferred income deemed to be invested therein should be computed as follows: (a) Interest in default should be computed at the rate provided in the mortgage up to the date of the entry of the judgment of foreclosure and sale; (b) thereafter, interest should be computed at such rate as would have been earned by the trustee had the property been sold and the proceeds invested in a proper trustee’s investment. (Matter of Jackson, 135 Misc. Rep. 329; 232 App. Div. 425; 258 N. Y. 281.) If sums are advanced out of the capital of the trust to pay the expenses of foreclosure and carrying charges, the life beneficiary is entitled to interest thereon at such rate as might have been earned on trust investments from the date the capital of the trust estate is thus employed. Such interest should be paid to the life beneficiary out of any income derived from the property, and, if the property is not productive of sufficient income, the trustee should be authorized to treat such interest as a further carrying charge to be advanced out of the capital of the trust estate (Matter of Chapal, 269 N. Y. 464; Matter of Pelcyger, 157 Misc. Rep. 913.) If a trustee exchanges a bond and mortgage for bonds of the Home Owners’ Loan Corporation, such bonds should be apportioned between principal and income in the same manner as the trustee would be required to apportion the proceeds of sale of such bond and mortgage if the same were sold by him. The liquidation of such bond and mortgage should be deemed complete upon the trustee’s receiving an authorization for such bonds. It should not be necessary for the trustee to sell such bonds in order to complete such liquidation. (Matter of Pelcyger, 157 Misc. Rep. 913.)

      Otis T. Bradley and Logan Fulrath for Guaranty Trust Company of New York, amicus curiae.

    In computing the total unpaid interest as one of the bases to establish the ratio for the apportionment, the rate of interest stipulated in the bond and mortgage (and in the case of guaranteed mortgages the net rate payable to the trustee) should be used throughout from the date to which interest was last paid to the date of sale of the property acquired on foreclosure. (Meldon v. Devlin, 31 App. Div. 146; 167 N. Y. 573; Matter of Moore, 54 L. J. Ch. 432; Hagan v, Platt. 48 N. J. Eq. 206; Matter of Pelcyger, 157 Misc. Rep. 913; Furniss v. Cruikshank, 230 N. Y. 495.) Where the proceeds of sale are represented partly by cash and partly by bond and purchase-money mortgage such proceeds should be apportioned between principal and income as of the date of sale. (Matter of Nirdlinger, 26 D. & C. [Pa.] 3.) Interest should be allowed on moneys advanced from the principal of the trust to pay acquisition costs and operating deficits. (Matter of Chapal, 269 N. Y. 464; Furniss v. Cruikshank, 230 N. Y. 495.) Any net rents arising from the operation of the foreclosed property until sold, after payment from gross rents of current expenses, advances from principal and interest thereon, should be payable by the trustee in the exercise of discretion on account of the amount which eventually should be allocated to income. (Matter of Chapal, 269 N. Y. 464; Matter of Crimmins, 159 Misc. Rep. 499.) Upon an exchange of a defaulted mortgage for Home Owners’ Loan Corporation bonds the realization represented by the bonds should be apportioned between principal and income, if at all, as of the date of the closing of the loan. (Matter of Chaval. 269 N. Y. 464.)

      Adrian D. Stevenson and Maurice E. McLoughlin for New York Trust Company, amicus curiæ.

   Loughran, J.

This case presents afterparts of the problem dealt with in Matter of Chapal (269 N. Y. 464).

In that case testamentary trustees had acquired several parcels of unproductive real property through the foreclosure of mortgages in which they had invested pursuant to authority conferred by the will of their testator. It was assumed by the parties that each parcel would ultimately be liquidated by a sale for all cash, with loss to both principal and income. The question was how in that event the respective interests of life tenant and remaindermen were to be adjusted.

We there approved the ruling of the courts below that the properties so acquired were to be treated by the trustees as separate units, with the result that a deficit of carrying charges pending sale of any parcel was to be advanced out of principal. The Surrogate had decreed that the proceeds of a. sale should be allocated between principal and income. The Appellate Division had ordered that the sale proceeds should be returned to the capital account in every instance. In reversing that direction of the Appellate Division we said: In such an investment situation what is involved is the salvage of a security. The security it is to be remembered is a security not for principal alone but for income as well. On a sale, therefore, the proceeds should be used first to pay the expenses of the sale and the foreclosure costs and next to reimburse the capital account for any advances of capital for carrying charges not theretofore reimbursed out of income from the property. Then the balance is to be apportioned between principal and income in the proportion fixed by the respective amounts thereof represented by the net sale proceeds. In the capital account will be the original mortgage investment. In the income account will be unpaid interest accrued to the date of sale upon the original capital. The ratio established by these respective totals determines the respective interests in the net proceeds of a sale. Since that matter has not been argued before us, we do not fix the rate at which interest is to be computed ” (269 N. Y. at pp. 472-473).

(1) The question thus left open must be decided now. The Appellate Division has here affirmed the ruling of the Surrogate that unpaid interest is to be computed at the mortgage rate (six per cent) up to foreclosure and thereafter to the date of final sale at the rate which generally prevailed for legal investments during this period.” Such trust rate was found to have been four per cent. (158 Misc. Rep. 808, 812.)

We prefer to adhere to our ruling in Meldon v. Devlin (167 N. Y. 573; affg., 31 App. Div. 146) that interest should be computed at the mortgage rate for the whole period. It is true, as the Surrogate has said, that the mortgage had no existence after it had been foreclosed. Equally is it true, however, that the foreclosure put an end to the original mortgage investment.” Both capital account and income account, as described in the Chapal case, are fictions. Doubtless the completely fair thing to do would be to ascertain the market value of the mortgaged premises by appraisal more or less continuous through the period from initial default to liquidation of the property and to give the life tenant interest at the mortgage rate on the value so ascertained currently. We think the difficulties of such a course would be too many. (Cf. Heiman v. Bishop, 272 N. Y. 83.) If, then, the remaindermen are to participate in the apportionment on the feigned basis of unimpaired principal, the share of the life tenant should be computed on the same assumption. The invention of the “ original investment ” is no more valid than the invention of “ unpaid interest ” thereon. Indulgence in both fictions keeps the balance even between the respective parties in interest.

(2) The next question is whether the life tenant should have interest on advances made from principal for foreclosure expenses and for carrying charges. It has been held below that the amount of such interest should be deducted from the gross sale proceeds before apportionment is made.

We think this gives the life tenant too much. The parties, so we have said, are engaged in a joint salvage venture. Carrying charges must be met from principal because there is no income wherewith to pay them. These items (e. g., taxes, water rents, insurance premiums and repair costs) accrue from time to time during the salvage operation. Interest on each item would have to be computed at the currently prevailing rate for legal investments — a fluctuating factor not always readily ascertainable. The parties can hardly be thought to have contemplated such actuarial calculations. In view of all this — and of the fact that the remaindermen here run by far the greater hazard — we think the life tenant must be supposed to have said to them, “ You put up all the money for the salvage, and I won’t expect any interest on it.” In short, as was said in Matter of Chapal: “ In the income account will be unpaid interest accrued to the date of sale upon the original capital ” (269 N. Y. at p. 473).

(3) In the Chapal case, as we have noticed, a liquidation of the property by a sale for all cash was taken for granted. On one of the sales here involved the trustee received a purchase-money mortgage in part payment. It happens that the cash paid was in excess of the life tenant’s share of the net proceeds. Even so, we are in accord with the ruling of the Surrogate who settled this account — that the ratio must be applied to the cash received and that the new mortgage must likewise be equitably apportioned.” (158 Misc. Rep. 808, 814.) We do not see how anything else can fairly be done except in a case in which it is conceded that the purchase-money mortgage meets the statutory test of a valid new investment.

(4) This trustee exchanged one of its defaulted mortgages for bonds of the Home Owners Loan Corporation. Sale of the bonds resulted in a loss to both principal and income. The sale proceeds “ were apportioned to principal and income in the ratio which the total principal invested in the mortgage bore to the total interest due thereon.” This treatment of that transaction by the trustee has been approved by the courts below. We think the principle of our decision in the Chapal case should not be thus extended.

In times of depression a defaulted mortgage is generally as unsalable as is the land on which it is a lien. It is because of that fact that the position of a trustee in the handling of defaulted mortgage investments has had of late its unique features. The result has been that in many cases the trustee had no choice but to take over the property on foreclosure and to carry it pending a sale. This was the case presented in Matter of Chapal —“ that of the liquidation of real estate acquired of necessity because of default on a mortgage investment.” (269 N. Y. at p. 472.)

The general situation is different when, a trust security other than a mortgage investment goes into default. A market then exists in which bids for the defaulted security are currently quoted. No carrying period is inherent in the process of liquidation in that case. Transfer of such a security by a trustee for a consideration paid in cash (or in cash plus securities lawful for trustees) is a sale or exchange of a capital asset. It is not a salvage operation. The sale proceeds go to the capital account and any loss of principal is charged thereto. Should the business soundness or propriety of the transaction be questioned in any aspect, that is a matter for consideration upon the settlement of the trustee’s account. We think the same practice should be followed where a trustee transfers a defaulted mortgage for cash or for securities which square with the statutory measure of a valid trust investment.

In this view, there should here have been no apportionment of the proceeds of sale of the bonds of the Home Owners Loan Corporation. Those bonds were lawful for trust investments (Decedent Estate Law [Cons. Laws, ch. 13], § 111; Banking Law [Cons. Laws, ch. 2], § 239, subd. 16; Real Property Law [Cons. Laws, ch. 50], § 278.) The social policy of the Federal law which in this instance adventitiously made possible the substitution of the bonds for the mortgage did not alter the essential business nature of the transaction as an exchange of the one security for the other.

(5) The courts below have held that net rents of a property acquired by a trustee through foreclosure cannot be treated as distributable income until the original capital has been fully restored. This means that, although a surplus remains after payment of carrying charges and of advances made out of principal, the life tenant can have nothing until the property is sold. We cannot take that view. The equities of a life tenant to receive the whole income that may accrue during his tenancy are every whit as great as that of the remaindermen to have the corpus of the trust preserved unimpaired.” (Cullen, J., in Matter of Rogers, 22 App. Div. 428, 436; 161 N. Y. 108.) On this phase of the problem, we prefer the view of the Surrogate whose decree was before us in Matter of Chapal, that is to say, that the trustee may distribute such surplus income in its discretion. (269 N. Y. at p. 470.) This discretion, moreover, should be exercised with appropriate regard for the fact that unless a life tenant gets cash he does not get anything in the here and now.

The foregoing disposes of the issues presented.

Perhaps it should be added that a general rule for such situations cannot be attained at a bound, that no rule can be final for all cases and that any rule must in the end be shaped by considerations of business policy. Accordingly, we have here put aside inadequate legal analogies in the endeavor to express fair, convenient, practical guides that will be largely automatic in their application. Only the sure result of time will tell how far we have succeeded.

The order of the Appellate Division should be reversed and the decree of the Surrogate modified in accordance with this opinion, and as so modified affirmed, without costs.

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

Ordered accordingly.


author: Crane, Ch. J.

text:
    The People of the State of New York, Respondent, v. Vincent Kischel, Appellant.
    Argued October 12,1937;
    decided November 23, 1937.

      Sidney W. Fischman and Clarence A. Baracks for appellant.
    The justice of the peace sitting as a Court of Special Sessions in the town of Clarkstown had no power or jurisdiction to try the defendant upon the crime charged. (Matter of Praither, 285 N. Y. Supp. 32;
      Pierson v. People, 79 N. Y. 424; People v. Shimko, 111 Misc. Rep. 487; People v. Monahan, 257 N. Y. 388; People v. Kraft, 229 App. Div. 281; People v. Harris, 123 N. Y. 70.)

      George V. Dorsey, District Attorney, for respondent.
   Crane, Ch. J.

The question presented for determination is whether the justice of the peace of the town of Clarkstown had jurisdiction to hear and determine the charge set forth in the information. It was charged in the information that the defendant, in the town of Clarkstown, Rockland county, on a day named, did violate section 1851 of the Penal Law “ by wrongfully, unlawfully, wilfully, falsely, maliciously and knowingly resist, delay and obstruct a public officer in discharging and attempting to discharge the duty of his office.” On the adjourned date of the trial, counsel for defendant requested trial by a jury. A jury was drawn, the case tried, and appellant was convicted of the offense charged.

Article VI, section 17, of the Constitution provides for the election of justices of the peace. “ Their number, classification and duties shall be regulated by law.” Section 18 provides that Courts of special sessions and inferior local courts of similar character shall have such jurisdiction of offenses of the grade of misdemeanors as may be prescribed by law, and the Legislature may authorize them to try such offenses without a jury.” Section 56 of the Code of Criminal Procedure provides that Subject to the power of removal provided for in this chapter, courts of special sessions * * * have in the first instance exclusive jurisdiction to hear and determine charges of misdemeanors committed within their respective counties, as follows.” Thirty-nine subdivisions specify the particular crimes over which such exclusive jurisdiction extends. The crime charged in the information against defendant is not comprehended within any of these subdivisions. Subdivision 38 includes a case, “ When a complaint is made to or a warrant is issued by a committing magistrate for any misdemeanor not included in the foregoing subdivisions of this section, if the accused shall elect to be tried by a court of special sessions, as provided by section two hundred and eleven. But this subdivision shall not apply to any misdemeanor which is or. may be punishable by a fine exceeding fifty dollars, or by imprisonment exceeding six months.” Since a violation of section 1851 of the Penal Law is punishable by imprisonment for not more than one year or by a fine of not more than $500, or by both, it does not come within the terms of subdivision 38. No exclusive power to hear and determine this charge is, therefore, conferred upon the Court of Special Sessions by section 56 of the Code.

No other provision of law can be found conferring upon justices of the peace of towns jurisdiction to try misdemeanors generally, or to try the particular misdemeanor charged in this information. Though the jurisdiction conferred by section 56 of the Code is said to be exclusive, that does not mean that they have concurrent jurisdiction to try all misdemeanors. The Constitution limits the jurisdiction of Courts of Special Sessions and inferior local courts to such misdemeanors as may be prescribed by law. Not only is no general jurisdiction over misdemeanors conferred by statute, but the statutes and decisions of the courts, by implication, deny such extensive jurisdiction. Section 31 of the Town Law (Cons. Laws, ch. 62) provides that justices of the peace shall have such jurisdiction in criminal matters as “is now or may hereafter be conferred by law.” The Village Law (Cons. Laws, ch. 64) and the various city charters confer a more extensive jurisdiction upon police justices in villages and criminal courts in cities. By section 182 of the Village Law, “ the Legislature extended to the police justice of the village the jurisdiction possessed by the Special Sessions in cities of trying all misdemeanors and restricting him to preliminary hearings in felony cases.” (People v. Monahan, 257 N. Y. 388, 391.) In People v. Kraft (229 App. Div. 281, 284, 285) the court in passing upon the construction of section 182 of the Village Law, remarked that the section prior to the amendment “ undoubtedly limited the jurisdiction to the offenses enumerated in sections 56 and 56-a of the Code of Criminal Procedure.” The court said: “It is clear that the Legislature had a definite purpose in mind to extend the jurisdiction of police courts of villages to include a greater number of misdemeanors than those triable by the courts held by justices of the peace and other officers having similar authority.”

In People v. Harris (123 N. Y. 70) the defendant was indicted at a Court of Oyer and Terminer for having sold to a cheese factory milk diluted with water. The act which embraced all offenses relating to the dairy products provided that “ ‘ Counts of Special Sessions shall have jurisdiction of all cases arising under this act, and their jurisdiction is hereby extended so as to enable them to enforce the penalties imposed by any or all of the sections hereof.’ ” This court said: “ We do not see in this section any intention on the part of the Legislature to give such courts exclusive jurisdiction of the offenses therein described, and it is plainly evident that the section quoted was simply intended to authorize the prosecution of such offenses before that tribunal. Such courts possess a limited jurisdiction only, and by express constitutional provision, have authority to try offenses of the grade of misdemeanors, only when specially empowered to do so by law. (N. Y. Const. § 26, art. 6.) By the then existing statutes, those courts had no power to try offenders for a violation of the crime defined in section 3 of the act of 1884, and this qualifying provision was necessary to enable them to entertain jurisdiction of such cases ” (p. 74).

Section 211 of the Code of Criminal Procedure gives recognition to the limited jurisdiction to try misdemeanors under section 56. As above noted, jurisdiction is conferred to try a misdemeanor not expressly included within that section, if the accused shall elect to be so tried. But it is expressly provided that that subdivision shall not apply to any misdemeanor punishable by a fine exceeding fifty dollars or imprisonment exceeding six months. (Code Crim. Proc. § 56, subd. 38.) Section 211 provides that if the crime be one triable as so provided, the magistrate, before holding the defendant to answer, must inform him of his right to be tried by a Court of Special Sessions, and must ask him how he will be tried. “ If the defendant shall not require to be tried by a court of special sessions, he can only be held to answer to a court having authority to inquire by the intervention of a grand jury into offenses triable in the county.”

The justice of the peace of the town of Clarkstown had no jurisdiction, therefore, to try the offense charged in the information.'

The judgments should be reversed and the information dismissed.

Lehman, O’Brien, Httbbs, Loughran, Finch and Rippey, JJ., concur.

Judgments reversed, etc.


author: Hubbs, J.

text:
    Central Hanover Bank and Trust Company, as Trustee under the Will of Selmar Hess, Deceased, Appellant, v. Clara Eisner, Defendant, and James J. Conway, as Guardian ad Litem for Pearl Weiss, et al., Respondents.
    Argued October 15, 1937;
    decided November 23, 1937.

      Henry A. Ingraham, Abram I. Elkus and Robert L. Reed for appellant.
    The lower court erred in denying appellant’s motion to confirm the report of the official referee and improperly determined the value of the premises on the basis of independent and unsolicited inquiries of the court outside of the testimony and by taking unrequested judicial notice after the hearings were closed of alleged facts appearing in another proceeding not alluded to in the testimony and not directly having to do with the real propertyjn question, (Southern Shipyard Corp. v. Tug Boat Summitt, 294 Fed. Rep. 284; Gibson v. Von Glahn Hotel Co., 185 N. Y. Supp. 154; Bradish v. Skelly, 222 N. Y. Supp. 696; Matter of Manderson, 51 Fed. Rep. 501; New York Life Ins. Co. v. Guttag Corp., 265 N. Y. 292; Voorhees v. Voorhees, 39 N. Y. 463; Mills v. Davis, 113 N. Y. 243; President of Manhattan Co. v. Premier Building Corp., 247 App. Div. 297; Schnur Realty Co. v. 906 Intervale Ave. Realty Corp., 274 N. Y. 518; Heiman v. Bishop, 272 N. Y. 83; Hoard v. Luther, 251 App. Div. 692; Ostrander v. Simon, 243 App. Div. 668; Fulton Trust Co. v. Kraft, 155 Misc. Rep. 769; Metropolitan Life Ins. Co. v. Whipple, 246 App. Div. 863.)

      Max H. Zabronsky for Chase National Bank of the City of New York et al, Respondents.
    The decision of the lower court denying appellant’s motion to confirm the report of the official referee, and fixing the fair and reasonable market value of the mortgaged premises at a figure which left no deficiency judgment, was properly

      arrived at and is amply supported by the evidence. (Mason v. Mason, 220 App. Div. 15; Matter of O’Connor, 159 Misc. Rep. 522; Matter of Barnum, 240 App. Div. 803; Corn Exchange Bank Trust Co. v. Eckenberg, 161 Misc. Rep. 62; Southern Shipyard Corp. v. Tug Boat Summitt, 294 Fed. Rep. 284; Manuta v. Lazarus, 104 Misc. Rep. 134; Springer v. Chicago, 135 Ill. 552; Pike v. Chicago, 155 Ill. 656; Washburn v. Milwaukee R. R. Co., 59 Wis. 364.)
   Hubbs, J.

In this action to foreclose a mortgage, a motion was made for a deficiency judgment. Conflicting affidavits were presented as to the value of the property and it was referred to an official referee “ to take testimony as to the fair market value of the premises and report the same to this court, together with his opinion.”

The referee reported that, in his opinion, the fair market value of the property was $9,800. A motion having been made at Special Term to confirm the referee’s report, the' justice presiding viewed the premises, and wrote an opinion in which he referred to the fact that the referee based his findings largely on the selling price in 1934 of two parcels on the same block, that no facts as to these sales were brought out and stated that slight inquiry revealed that one was a resale by the former holder of the property who bid it in at foreclosure. He also referred to condemnation proceedings in 1931 affecting property within a few hundred feet of the premises under consideration and to the fact that the plaintiff trustee extended the mortgage being foreclosed in 1930 and again in 1934. He then stated that after reading all the papers submitted and viewing the property the court found that it could not agree with the learned referee. The motion to confirm the referee’s report was denied and the court fixed the value of the premises at $12,000.

Section 1083-a of the Civil Practice Act provides that bn a motion for leave to enter a deficiency judgment in a mortgage foreclosure action the court shall determine, upon affidavit or otherwise as it shall direct, the fair and reasonable market value of the mortgaged premises as of the date such premises were bid in at auction or such nearest earlier date as there shall have been any market value thereof and shall make an order directing the entry of a deficiency judgment.”

The statute places upon the court the responsibility of determining the market value. In this instance the court, faced with a conflict in the affidavits submitted, referred it to an official referee to take testimony and report with an opinion as to fair market value. Nothing in the statute makes binding upon the court the opinion of an official referee and nothing in the statute limits the court to a consideration of the testimony produced before an official referee. Such testimony becomes an added element of proof to be considered by the court. If there is in the record, including the affidavits and the testimony, evidence sufficient to make a question of fact, the decision of the Special Term unanimously affirmed by the Appellate Division becomes binding on. this court.

The statute provides that the court “ shall determine, upon affidavit or otherwise as it shall direct, the fair and reasonable market value.” The statute does not mean that the court may determine the “ reasonable market value ” upon personal knowledge or upon information received from sources outside the record.

The right to a deficiency judgment and its amount depends upon the finding of the reasonable market value ” of the premises involved in the mortgage foreclosure action. The amount involved, in many cases is large. In some cases the issue may be so simple that a court may be justified in determining it upon affidavits. If, however, a triable issue as to reasonable market value ” is presented, that issue should not be decided upon affidavits, but by the court or a referee, so that the witnesses may be subject to observation and cross-examination. (New York Life Ins. Co. v. Guttag Corp., 265 N. Y. 292.)

If such an issue should not oe deciden upon affidavits, much less should it be determined or influenced by the personal knowledge of the presiding justice or upon information obtained by him by personal investigation outside of the hearing in court and not embodied in the record. If such procedure is followed, the parties are deprived of the valuable right of cross-examination and an opportunity to present evidence in opposition. If a justice is not satisfied with the findings and conclusion of a referee, he may take additional evidence and make new findings. The findings should, however, be based upon the record so that it may be reviewed if one of the parties feels aggrieved..

In the case at bar the written opinion of the learned justice discloses that he viewed the property, made inquiry which disclosed that a former holder of a mortgage of the property, who bid it in, made a resale. The price received upon such resale constituted part of the evidence received by the referee. The opinion also recites that in a street widening proceeding the city awarded from two dollars to two dollars and seventy-five cents a square foot for property within a few hundred feet of the premises here involved; also that the plaintiff extended the time of payment of the mortgage in 1930 and 1934. No evidence of those facts appears in the record and the appellant had no opportunity to introduce evidence in opposition. It is elementary that a judge should not decide an issue upon personal knowledge of facts outside the record or upon information received upon personal investigation. (Brown v. Piper, 91 U. S. 37; Southern Shipyard Corp. v. Tugboat Summitt, Inc., 294 Fed. Rep. 284; Matter of Manderson, 51 Fed. Rep. 501; Gibson v. Von Glahn Hotel Co., 185 N. Y. Supp. 154; 15 R. C. L. p. 1111; McCamman v. Davis, 162 Mich. 435.)

The orders should be reversed and the matter remitted to the Special Term for a further hearing, with costs in all courts to the appellant.

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

Orders reversed, etc.


text:
    Aniela Kwiatkowski, as Executrix of Stanislaus Kwiatkowski, Deceased, Respondent, v. John Lowry, Inc., Appellant.
    Argued October 19, 1937;
    decided November 23, 1937.

      Bertrand L. Pettigrew and Chauncey L. Grant for appellant.
    The evidence offered by the defendant as to oral and written admissions and admissions by conduct made by plaintiff’s testator between the time of his alleged accident and the time of his death, was competent, and the exclusion thereof was reversible error. (Lax v. 42nd, etc., R. R. Co., 46 N. Y. Super. Ct. Rep. [14 J. & S.] 448; Wheeler v. Sundstrum & Stratton Co., 143 App. Div. 499; Littlewood v. Mayor, 89 N. Y. 24; McKay v. Syracuse R. T. Ry. Co., 208 N. Y. 359; LaGoy v. Director-General of Railroads, 231 N. Y. 191; Maxson v. Tomek, 244 App. Div. 604; Lord v. Pueblo Smelting & Refining Co., 12 Col. 390; Hughes v. D. & H. Canal Co., 176 Penn. St. 254; Georgia Railroad & Banking Co. v. Fitzgerald, 108 Ga. 507; Southern Bell Tel. & Tel. Co. v. Cassin, 111 Ga. 575; Walker v. Brantner, 59 Kans. 117; Helman v. Rwy. Co., 58 Ohio St. 400.)

      Robert Abelow, Jay S. Jones and Jack J. Gumpert for respondent.
    Statements of a deceased in an action under section 130 of the Decedent Estate Law (Cons. Laws, ch. 13) are not admissible in evidence unless part of the res gestæ. (Waldele v. N. Y. C. & H. R. R. R. Co., 95 N. Y. 274; Martin v. N. Y., N. H. & H. R. R. Co., 103 N. Y. 626; Greener v. General Electric Co., 209 N. Y. 135; Matter of Carroll v. Knickerbocker Ice Co., 218 N. Y. 435; Martorella v. Prudential Ins. Co., 238 App. Div. 532; Murphy v. St. L. T. M. S. Co., 92 Ark. 159; Hedge v. Williams, 131 Cal. 455; Jacksonville El. Co. v. Sloan, 42 So. Rep. 516; Poole v. East Tenn. V. & G. Co., 92 Ga. 337; Fisher v. Jansen, 128 Ill. 545; Pennsylvania Co. v. Long, 94 Ind. 250; Armilv. Chicago, B. & Q. R. Co., 70 Iowa, 130; Wade v. Illinois Cent.Ry. Co., 112 S. W. Rep. 1103; Bionto v. Ill. Cent., 125 La. 147; Eldrege v. Barton, 232 Mass. 183.)
   Crane, Ch. J.

This is an action brought to recover damages arising out of the alleged negligence of the defendant causing the death of one Stanislaus Kwiatkowski. The case has been tried three times. The first trial resulted in a disagreement. On the second trial a judgment for the plaintiff was reversed by the Appellate Division on the ground that the verdict of the jury was against the weight of evidence. That court, however, held that the statements of the injured man shortly after the accident against his own interest were properly excluded. (See this opinion as reported 248 App. Div. 459.) The court reversed the judgment for the plaintiff on the ground stated, by a divided court, two of the justices dissenting. (See 251 App. Div. 850.) The case has been retried, and the judgment for the plaintiff unanimously affirmed by the Appellate Division, which has certified to this court that a question is involved which we .should review. That question is the materiality and competency of the excluded evidence, for on this third trial the oral or written statements of the injured man regarding the cause and nature of the accident were excluded.. The point is not free from doubt, because of the conflicting statutes and decisions in the various States, so thoroughly reviewed and considered in the opinion of the Appellate Division, referred to. We, however, have come to a different conclusion, and shall proceed to state our reasons.

In the first place, these statements, made both orally and in writing by Stanislaus Kwiatkowski after his injury, were of such a nature that it is very doubtful whether he could have recovered in any action brought by him. All were to the effect that no such accident happened as claimed in this case, that his injuries, if any, were due to a different occurrence altogether, and were due to his own fault. This evidence presented more than mere casual statements; it consisted of full, complete accounts of the accident, a written statement of the place and time, with details and a description by the injured man, designating at the place how and under what conditions he was hurt. Six witnesses were called to testify to these facts, so that it readily appears that Kwiatkowski, if he had lived, would have been confronted with an almost impassable barrier to a verdict in his favor, or, in the words of our statute, the defendant would not have been hable in an action in favor of Kwiatkowski, if he had lived. Perhaps it might be more accurate to say that the defendant, as against Kwiatkowski living, would have had an excellent defense. Has the defendant, by reason of Kwiatkowski’s death, lost this defense? We think not. First let us consider our own statutes and recent amendments.

Section 130 of the Decedent Estate Law (Cons. Laws, ch. 13) gives an action to an executor or administrator of a decedent who has left him surviving a husband, wife or next of kin, to recover damages for neglect by which the decedent’s death was caused against a person who would have been hable to an action in favor of the decedent by reason thereof if death had not ensued.” Nothing in this statute changes the rules of evidence as to liability or has attempted to do so. If the deceased in his lifetime had a cause of action for negligence and could have recovered thereon, the executor or administrator of the estate may maintain an action for the negligence causing his death. The executor or administrator, however, while given this right to maintain the action, can only recover in case the deceased could have recovered, had not death ensued. Always has it been permissible to show that the deceased could not have recovered in his lifetime because of his contributory negligence. (LaGoy v. Director-General of Railroads, 231 N. Y. 191, where it was held that the deceased was guilty of contributory negligence as matter of law, which prevented a recovery by his representative.) Admissions which would bar the injured man’s recovery, if the jury believed the evidence, may be given in defense the same as evidence of contributory negligence or of settlement and release, or a recovery in an action brought by him. All these defenses have been held in our State to survive the death of the injured person, and to be sufficient bar to the recovery, if proved, in an action brought by the representative of the deceased.

Littlewood v. Mayor (89 N. Y. 24) held that a recovery had by the injured person in his lifetime prevented the administrator from maintaining an action for the same cause. The court said, through Rapallo, J.: It seems to me very evident that the only defense of which the wrong-doer was intended to be deprived, was that afforded him by the death of the party injured, and that it is, to say the least, assumed throughout the act that at the time of such death the defendant was liable. In the present case the defendant does not answer the description of ‘ the person who would have been hable if death had not ensued.’ It would not have been hable if the injured party were living, for the former judgment would be a complete bar. The statute may well be construed as meaning that the party who at the time of the bringing of the action * would have been hable if death had not ensued ’ shah be hable to an action notwithstanding the death” (p. 28). This opinion, written in 1882, forecasts as by prophecy the amendments to the laws which came in 1935, for Judge Raparlo says, regarding the power of the Legislature to separate the habilities, the following: “ There can be no doubt that the Legislature had power to create the double habihty contended for, nor would it necessarily involve any inconsistency. The damages of the party injured are different and distinguishable from those which his next of kin sustain by his death, and no double recovery of the same damages would result. But it is equally clear that the Legislature might give to the representatives the statutory right of action, only as a substitute for the damages which the deceased was prevented by his death from recovering, and the question now is, what was their intention in this respect? ” (p. 27 .y

In 1935 chapter 795 of the Laws of 1935 added sections 119 and 120 to the Decedent Estate Law. It permits the executor or administrator to bring an action for the injuries and expenses sustained by the deceased in his lifetime. This is for the benefit of the estate of the deceased, and the damages of course are limited to the damages and expenses which he sustained. For instance, a man might linger for a year or two after receiving injuries. The cause of action which he had for such pain and suffering and for expenses is not now lost by his death; it survives to his executor. This is a separate, distinct cause of action from that given under section 130, where a different measure of damage is applicable, and which is for the benefit of the husband, wife or next of kin. In this action by the executor or administrator for the benefit of the estate of the deceased there is no doubt at all — in fact it is conceded — that the cause of action which thus survives is the original cause of action which the deceased could have maintained in his lifetime, limited somewhat by his death, in the amount of recovery. In such an action his admissions against interest would be competent as evidence for the defense. Even the courts which exclude the admissions in actions in behalf of the next of kin admit such evidence where the action is brought for the estate of the deceased. (Eldridge v. Barton, 232 Mass. 183, at p. 186; Murphy v. St. Louis, I. M. & S. Ry. Co., 92 Ark. 159.)

If this be true, then what happens when we apply section 120 of the Decedent Estate Law? This reads: Where an action to recover damages for personal injury sustained before the death of the injured person and a separate action for wrongful death pursuant to section one hundred and thirty of this chapter are pending against the same defendant, they may be consolidated on motion of either party.” That is, they will be tried together as one action. How is it possible on such a trial to apply two different rules of evidence and before the same jury? The evidence of the deceased’s admissions against interest would be admissible as to one cause of action, and be incompetent and excluded as to the other, if the rule of the courts below is to be applied. Of course this would be an impossibility. You cannot admit and exclude evidence in the same trial before a jury. You cannot hold it to be both good and bad, competent and incompetent in the same trial. And if it were done the result might and probably would be inconsistent verdicts; the defendant guilty of no negligence to the deceased in one case — guilty of negligence to the deceased in the other. Our statute says the defendant is liable to the next of kin only where he would have been liable to the deceased if living. It is apparent, therefore, that whatever view other States may have taken regarding the admission of this class of evidence in death cases, we must- and should admit it. Furthermore, by amendment to section 132 of the Decedent Estate Law: In every such action now or hereafter pending, in addition to any other lawful element of the damages recoverable, the reasonable expenses of medical aid, nursing and attention incident to the injury causing death paid by the decedent or by a person entitled to the whole or a distributive share of the moneys recovered or for the payment of which such decedent or person is personally responsible, and the reasonable funeral expenses of the decedent, also shall be deemed proper elements of damage.” Thus in every death case damages may include sums personal to deceased, in which instance his admissions would be competent for the defense.

Littlewood v. Mayor (supra) has been followed and was cited with approval in McKay v. Syracuse Rapid Transit Ry. Co. (208 N. Y. 359, 363), where the court said: “ While the measure of damages is different (Code Civ. Proc. § 1904) the right of the personal representative to recover depends solely on the right of the injured person to recover, if living, unless we are to read something into the statute. We fail to perceive any reason to do that which could not be urged with equal force if the Legislature had in terms provided that in such case the action should not abate, but should survive to the personal representative for the benefit of the estate or the next of kin. Moreover, this court has once said (Quin v. Moore, 15 N. Y. 432), and once expressly decided (Littlewood v. Mayor, etc., of N. Y., 89 N. Y. 24), that the condition upon which the statutory liability depends is the one expressed in the statute.”

In 1880 the New York Superior Court, in Lax v. Forty-second & Grand St. Ferry R. R. Co. (14 Jones & Spencer, 448, 454), in an opinion by the Chief Judge, ruled as follows on this class of evidence: In the course of the trial, the defendant was allowed to prove certain declarations of the deceased soon after the accident, which were, in substance, that he jumped off the front platform before the car had lessened its motion. It was objected that this was incompetent, as against the plaintiff — who does not succeed to the action that the deceased might have had in his lifetime, but has an independent statutory action — and that it was hearsay testimony. I am of the opinion that they are admissible, as having been made by the deceased against his interest; he, of course, having full knowledge of the actual occurrence. (1 Greenl. Ev. § 147, et seq.) ‘ The ground upon which this evidence is received is the extreme improbability of its falsehood. (Id. § 148.) ’ ” This case apparently established the practice in the courts until the decisions in this case before us.

Such declarations have been held admissible in other States as against interest. (Walker v. Brantner, 59 Kans. 117; Republic Iron & Steel Co. v. Industrial Commission, 302 111. 401.) Other States have ruled such statements receivable upon the ground that the representatives of the deceased and the deceased are in privity (Southern Bell Tel. Co. v. Cassin, 111 Ga. 575; Lord v. Pueblo Smelting & Refining Co., 12 Col. 390; Helman v. P., C., C. & St. L. Ry. Co., 58 Ohio St. 400; Hughes v. D. & H. Canal Co., 176 Penn. St. 254); and some have approved the admission of such evidence upon both grounds (Georgia R. R. & B. Co. v. Fitzgerald, 108 Ga. 507; Hovey v. See, 191 S. W. Rep. [Tex. Civ. App.] 606). In many jurisdictions statements of the deceased are held not to be admissible against his representatives in an action to recover for death by wrongful act. The grounds of exclusion are not always the same. (Cf. Eldridge v. Barton, 232 Mass. 183; Hedge v. Williams, 131 Cal. 455; Marks v. Reissinger, 35 Cal. App. 44; Jacksonville Elec. Co. v. Sloan, 52 Fla. 257; Dowell v. City of Raleigh, 173 N. C. 197; Holmes v. Wharton, 194 N. C. 470; Murphy v. St. Louis, I. M. & S. Ry. Co., 92 Ark. 159; Kansas City So. Ry. Co. v. Leslie, 112 Ark. 305; Ohio & Miss. R. R. Co. v. Hammersley, 28 Ind. 371.) Lack of privity between the deceased and his representatives is generally the ground of exclusion. It has also been held that such statements are not receivable as made against interest because deceased never had any interest in the subject-matter of the action (Marks v. Reissinger, 35 Cal. App. 44); “ at that time he had no interest to serve or disserve ” (Dowell v. City of Raleigh, 173 N. C. 197, 199); the admissions of a deceased person against bis interest are competent only when the action is for or against him in his own right.” (Kansas City So. Ry. Co. v. Leslie, 112 Ark. 305, 328.) In some States the form of the statute influenced the decision. Whether such declarations are generally admissible in evidence depends upon our own statute and the decisions interpreting it, and decisions from other jurisdictions cannot point the way to a determination of the question.

As to the text writers, Professor Richardson, in his work on The Law of Evidence ([5th ed.] § 388, p. 296), says: “ These declarations are admissible either as admissions, for the foundation of the action is the injury to the deceased for which he might have sued in his lifetime, or as declarations against interest. Decedent Estate Law, section 130; Hughes v. Delaware & Hudson Canal Co., 176 Pa. 254.” (See, also, 6 Thompson on Negligence, § 7738; 1 R. C. L. p. 502, § 42.)

[■ For the reasons here given the admissions of Kwiatkowski were competent and should not have been excluded. In this opinion we are referring to evidence for the defense. The respondent has cited numerous cases where such evidence was sought to be given by the plaintiff as part of the res gestas. The res gestae rule has no relevancy here.

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

Lehman, O’Brien, Hubbs, Loughran, Finch and Eippey, JJ., concur.

Judgments reversed, etc.