author: Rippey, J. Conway, J.

text:
    East River Savings Bank, Respondent, v. 245 Broadway Corporation et al., Defendants, and Ephraim Samuels et al., Appellants.

      Argued November 25, 1940;
    decided December 31, 1940.

      Frederick E. Crane, Irving H. Dale and Robert R. Michlin for appellants.

      Robert W. Bernard and Lewis S. Bowdish for respondent.
   Rippey, J.

On February 2, 1927, Sophie Samuels conveyed real property, located at 245 Broadway in the city of New York, to the appellants as trustees by a written instrument in which she created an irrevocable trust for her own benefit and for the benefit of her children. The conveyance was duly recorded in the office of the Register of the County of New York on April 26, 1927. The conveyance was made subject to the lien of a mortgage held by the Equitable Trust Company as security for a loan of $250,000 and to the lien of a second mortgage for $75,000. There was no assumption of payment of the mortgages by the trustees. One of the trustees was the husband of the grantor, two were her brothers-in-law and the fourth was the attorney for and friend of the Samuels family. She provided in the trust instrument that the trustees should not receive any compensation for their services and should not be liable for any damage or otherwise, except for misconduct or gross negligence. Among other things, the trustees had express power to sell, lease, mortgage or exchange the real property which formed the corpus of the trust and to execute and deliver any other instrument which might be desirable and necessary to carry out that power. The trustees accepted the trust and entered upon the discharge of their duties and have since continued in the discharge thereof.

On January 5,1928, the appellants executed and delivered to the plaintiff a bond in which they acknowledged that they were indebted to the plaintiff in the sum of $30,000 and a mortgage upon the aforesaid property as security for the payment of the loan. The bond begins with this clause: " KNOW ALL MEN BY THESE PRESENTS, That we, EPHRAIM SAMUELS, JULIUS SAMUELS, ISIDORE SAMUELS and CLINTON T. TAYLOR, as Trustees under a Deed of Trust dated February 2nd, 1927, recorded in the office of the Register of the County of New York, April 26th, 1927, in Liber 3581 of Conveyances, Page 471, hereinafter designated as the obligor, do hereby acknowledge ourselves to be justly indebted to EAST RIVER SAVINGS BANK, a domestic banking corporation, having its principal place of business at Nos. 291-3-5 Broadway, Borough of Manhattan, City of New York, hereinafter designated as the obligee, in the sum of Thirty Thousand ($30,000) dollars lawful money of the United States, which sum I, said obligor do hereby covenant to pay said obligee, its successors or assigns, on demand, with interest thereon, to be computed from the 5th day of January, 1928, at the rate of five and one-half per centum, per annum.” Each of the defendants-appellants signed his name and attached his seal and underneath the names was written “ As Trustees above mentioned ” and the instrument was acknowledged by them as trustees. The mortgage begins with a similar clause. In the bond, it will be observed, the defendants are referred to as a class and designated as the obligor. In the mortgage the defendants are also designated as a class and referred to throughout the instrument as the mortgagor. The mortgage is signed by each of the appellants, under seal, and contains, underneath the names, As Trustees above mentioned” and was acknowledged by them as trustees. Among other things, the mortgage contained various covenants by which the mortgagor covenants to pay the indebtedness therein provided, to keep the buildings on the premises insured against loss by fire for the benefit of the mortgagee, to prevent waste, that the whole of the principal sum shall become due after default in the payment of any installment of principal or of interest for thirty days or after default in the payment of any tax, water rate or assessment for thirty days after notice and demand to pay all taxes, assessments or water rates, and upon default thereof that the whole of the principal sum shall become due at the option of the mortgagee, etc.

On December 30, 1927, an agreement was entered into between the East River Savings Bank, as party of the first part, and defendants-appellants, As Trustees under a Deed of Trust dated February 2nd, 1927, recorded in the Office of the Register of the County of New York, April 26th, 1927, in Liber 3581 of Conveyances, Page 471, hereinafter designated as the party of the second part/' It will here be observed that the instrument designates the defendants as a class, as the party of the second part, and throughout the instrument similar reference to them is made. By that instrument the mortgage formerly held by the Equitable Trust Company which had been acquired by assignment by plaintiff and the mortgage for $30,000 were consolidated into a single first mortgage and joint lien upon the premises for the principal sum of $280,000 with interest thereon to be computed from January 5, 1928, at the rate of five and one-half per cent per annum, and again the appellants, as in the case of the $30,000 mortgage instrument, covenanted in the same form as in the latter instrument as a single party except that the covenant for payment was to the effect that such party would pay the sum of $280,000. This instrument was also signed by the individual defendants-appellants under seals with the entry after their names “ As Trustees under a Deed of Trust and the instrument was acknowledged by them as trustees. Simultaneously the existing second mortgage of $75,000 was subordinated to the consolidated first mortgage.

Default having occurred, an action was brought to foreclose the mortgage in which judgment was entered decreeing foreclosure and the defendants-appellants were held individually liable for all amounts found due and owing tc the plaintiff on account of the foregoing transactions. The trial court found and concluded as a basis for holding the appellants individually liable that they, by those instruments, “ in consideration of the consolidation of said bonds and mortgages and of the extension of time for the payment of the obligations secured thereby, and of other valuable consideration, the receipt whereof was therein acknowledged, jointly and severally covenanted and agreed that they would pay the principal sum of Two hundred Eighty thousand Dollars ($280,000) on the 1st day of February, 1933 and interest thereon meanwhile at the rate of five and one-half per centum per annum from the 5th day of January, 1928 semi-annually on the first days of February and August in each year and to comply with the other terms of said bonds and mortgages,” etc., and declined to find, at the request of appellants, that it was not the intent of the parties that the appellants should be individually and personally obligated under the aforesaid instruments. The Appellate Division has affirmed by a divided court the judgment entered upon the findings of the Special Term.

The consideration for the execution and delivery of the foregoing instruments was amply alleged in the complaint and admitted by the answer. Those instruments were executory contracts since, made upon sufficient consideration, they provide that something remains to be done or not to be done by one or both the parties (12 American Jurisprudence, Contracts, §_9, pp. 506, 507; Farrington v. Tennessee, 95 U. S. 679). The court has found that there was a new and independent consideration for the execution of the various instruments not founded upon the contract or obligation of the creator of the trust. It is the settled law, in the absence of evidence to the contrary and subject to exceptions not here pertinent, that where the contracts made by trustees are executory, upon a new and independent consideration and the liability claimed is not based upon any obligation of the creator of the trust, in spite of the fact that they are not made for the benefit of the trustees but rather for the benefit of the trust estate, as to third parties a personal obligation on the part of the trustees is created and the third party may not look to the trust estate to satisfy his obligations (Austin v. Munro, 47 N. Y. 360, 366; O’Brien v. Jackson, 167 N. Y. 31). The addition of an official character, to the signatures of executors and administrators, in executing written contracts and obligations has no significance, and operates merely to identify the person and not to limit or qualify the liability ” (Schmittler v. Simon, 101 N. Y. 554, 558), except, when a negotiable instrument is under consideration, as and to the extent the rule may be modified by the provisions of section 39 of the Negotiable Instruments Law (Cons. Laws, ch. 38).

All parties here insist that the intent as to the extent and character of the liability of the appellants appears from the face of the instruments and that parol evidence as to their intent is consequently inadmissible. However, they do not read the contract alike. Plaintiff asserts that the instruments, as written, indicate that appellants intended to be bound individually or, in any event, they are so bound under the authorities to which reference is made above. Appellants, on the other hand, read the instruments as indicative of their intent to be bound only in their fiduciary character. If not, they say, because of ambiguity, parol evidence may be received to show the circumstances surV , " o rounding the execution and delivery of the instruments and any understanding between the parties as to the character of the liability intended to be imposed (Chouteau v. Suydam, 21 N. Y. 179; Megowan v. Peterson, 173 N. Y. 1; New Georgia Nat. Bank v. Lippmann, 249 N. Y. 307; Bank of Topeka v. Eaton, 100 Fed. Rep. 8; affd., 107 Fed. Rep. 1003 [First Circuit]; 2 Scott on the Law of Trusts, § 263; 4 Bogert on the Law of Trusts and Trustees, § 773, and cases cited; 65 C. J. pp. 790, 791). Parol evidence as to the intent of the parties was offered and, to some extent, received in evidence, but it was later correctly stricken out by the trial judge on the ground that it was inadmissible under the parol evidence rule. Intent to bind the trust estate rather than themselves individually cannot exempt the fiduciaries from personal liability if in the instruments as written the fiduciaries have not limited their liabilities in a manner which would make them enforcible only out of the trust estate. Unless we are prepared to overrule our previous decisions, which are in accord with the general principles applied in other common-law jurisdictions, the problem for us is not whether the appellants intended to assume the personal liability but whether, under the contract as written, they limited their obligation so as to exclude personal liability for its breach.

The appellants might have absolved themselves from any personal liability by inserting in the instruments a clause to the effect that they could not be held personally liable (Pumpelly v. Phelps, 40 N. Y. 59; Knipp v. Bagby, 126 Md. 461; United States Trust Co. v. Stanton, 139 N. Y. 531; Austin v. Munro, 47 N. Y. 360, 366; 3 Bogert on Trusts, § 714, and cases cited; Taylor v. Davis, 110 U. S. 330; Wachtel v. Rosen, 249 N. Y. 386). In none of the aforesaid instruments was there a specific provision exempting the trustees from personal liability. Nevertheless, the recital in the instruments of the character in which the trustees were acting, as a class and not individually or jointly and severally, their signing and executing as trustees upder the trust instrument, the fact that the instruments refer to the trust instrument and the place of its public record, gave notice to the plaintiff of all of the provisions of the trust agreement, the character under which they acted and under which they had authority to act and established the limitation of their liability as individuals. Under those circumstances, the instruments on their face do not create a personal liability. In the light of the circumstances surrounding their execution and delivery, they cannot properly be read in any other way. We need not resort to parol evidence to discover the understanding between the parties as to the character of the liability intended to be imposed. That appears in the language of the instruments themselves.

Prior to the commencement of the action for foreclosure the rate of interest was reduced to one and one-quarter per cent and such reduction was to be in effect until terminated by the plaintiff. Two quarterly interest installments were paid to the plaintiff at that rate but appellants defaulted in the payment of the third installment as it became due and paid no interest whatever for some time prior to the commencement of the action. When the interest was reduced plaintiff retained the right to terminate the arrangement. It was terminated by the commencement of the action of foreclosure and the demands for payment of interest at the rate of five and one-half per cent, and interest became due and payable at the rate of five and one-half per cent from August 1, 1937, to which date interest at one and one-quarter per cent had been paid by appellants and accepted by the plaintiff, as the courts below have held.

The judgments so far as appealed from should be reversed and the matter remitted to the Special Term for entry of the appropriate judgment in accordance with this opinion, with costs in all courts.

Conway, J.

(dissenting). A deficiency judgment against the trustees personally was proper. The trustees could not bind the estate. In O’Brien v. Jackson (167 N. Y. 31) this court said (at p. 33): “ The general rule is well settled in this state that executors or trustees cannot, by their executory contracts, although made in the interest and for the benefit of the estate they represent, if made upon a new and independent consideration, bind the estate and thus create a liability not founded upon the contract or obligation of the testator.” Speaking of the rule, it was said in Austin v. Munro (47 N. Y. 360, 366): “ The rule is too well established in this State to be questioned or disregarded; and any departure from it would be mischievous.”

The use of such phrases as “as trustee, etc.” does not relieve the trustee from personal liability. They are merely descriptive. In Taylor v. Davis (110 U. S. 330, 334, 335) the United States Supreme Court wrote: “A trustee is not an agent. An agent represents and acts for his principal, who may be either a natural or artificial person. A trustee may be defined generally as a person in whom some estate, interest, or power in or affecting property is vested for the benefit of another. When an agent contracts in the name of his principal, the principal contracts and is bound, but the agent is not. When a trustee contracts as such, unless he is bound no one is bound, for he has no principal. The trust estate cannot promise; the contract is therefore the personal undertaking of the trustee. As a trustee holds the estate, although only with the power and for the purpose of managing it, he is personally bound by the contracts he makes as trustee, even when designating himself as such. The mere use by the promisor of the name of trustee or any other name of office or employment will not discharge him.”

The trustee is personally liable unless the contract, or other instrument, expressly relieves him of liability. In Taylor v. Davis (supra) the court said (at p. 335): “ If a trustee contracting for the benefit of a trust wants to protect himself from individual liability on the contract, he must stipulate that he is not to be-personally responsible, but that the other party is to look solely to the trust estate.”

The court took defendants’ testimony as to their undisclosed intention not to be personally bound. The testimony was inadmissible and was properly stricken out later. (Thomas v. Scutt, 127 N. Y. 133.)

The judgment should be affirmed.

Lehman, Ch. J., Loughran, Finch, Sears and Lewis, JJ., concur with Rippey, J.; Conway, J., dissents in opinion.

Judgment accordingly,


source: Caselaw Access Project

author: Loughran, J.

license: Public Domain

text:
    In the Matter of the Claim of Regina C. Dimino, Appellant, against Independent Warehouses, Inc., Respondent. State Industrial Board, Appellant.
    Argued November 14, 1940;
    decided December 31, 1940.

      William L. F. Gardiner for claimant, appellant.

      John J. Bennett, Jr., Attorney-General (Roy Wiedersum, Joseph A. McLaughlin and Isaac Frank of counsel), for State Industrial Board, appellant.

      John Ross Lauer and David J. Mountan, Jr., for respondent.
   Loughran, J.

Joseph Dimino was employed by Independent Warehouses, Inc., as superintendent of its pier at East river and Twentieth street, Manhattan, city of New York. While so employed, he fell into one of the hatchways of a vessel that was being unloaded at the pier and suffered fatal injuries. Awards were made to his dependents under the Workmen’s Compensation Law (Cons. Laws, ch. 67). The Appellate Division reversed and dismissed the claims, holding that when Dimino was hurt he was engaged in a maritime service on navigable waters and that the State Industrial Board had no jurisdiction.

What work has direct relation to navigation or commerce must, of course, be determined in view of surrounding circumstances as cases arise.” (Baizley Iron Works v. Span, 281 U. S. 222, 230.) As outlined to the referee by counsel for the employer, the circumstances surrounding Dimino’s fatal injuries were these: “ Joseph Dimino was employed by the employer, Independent Warehouses, as pier superintendent of pier 68 East River. Each week a ship would arrive at this pier with newsprint rolls destined for various newspapers in the city Before the ship arrived Mr. Dimino would receive a plan of the ship showing the location of the newsprint rolls on the ship and also giving him size, weight and other details regarding these rolls and then Mr. Dimino would be acquainted with the names to whom deliveries are to be made of the rolls of newspaper from this ship and then he would get in touch with the stevedoring company and tell them, how many stevedores he wanted to unload the ship and the unloading was done by the stevedores. He told them in what order the hatches were going to be opened and what order rolls were to be taken out of the ship. * * * Mr. Dimino frequently was obliged to get on board of ship, whenever there was a delay in unloading; he always went on board to find out cause of the delay. He often went on the ship to find out where the different newsprint rolls were and also what their position in the hatches were so he could see where the rolls could be unloaded best. While in the ship he fell down a hatch while looking for the position of certain rolls on that ship.” The ship upon which Dimino was hurt was not owned by his employer. The Board found that “ Joseph Dimino had no direct supervision or control of the stevedores and the loading and unloading of freight from the ship was performed by another independent stevedoring employer.” Concededly this finding is sustained by the evidence. There is nothing in the record to show that the information sought by Dimino upon the ship was not available on shore.

In Grant Smith-Porter Ship Co. v. Rohde (257 U. S. 469) a workman employed generally as a carpenter was injured while engaged in construction work on a nearly completed ship that was lying in navigable waters of the United States in Oregon. The court held that the Oregon Compensation Law applied and said: “ Here the parties contracted with reference to the State statute; their rights and liabilities had no direct relation to navigation, and the application of the local law cannot materially affect any rules of the sea whose uniformity is essential” (p. 477). In Millers’ Indemnity Underwriters v. Brand (270 U. S. 59) the plaintiff’s intestate, while employed as a diver by a ship-building company, submerged himself from a floating barge anchored in a navigable river in Texas thirty-five feet from the bank, for the purpose of sawing off timbers of an abandoned set of ways, once used for launching ships, which had become an obstruction to navigation. While he was thus submerged the air supply failed and he died of suffocation. The court held that the rights of the parties were determined by the Texas Compensation Law and said: In the cause now under consideration the record discloses facts sufficient to show a maritime tort to which the general admiralty jurisdiction would extend save for the provisions of the State Compensation Act; but the matter is of mere local concern and its regulation by the State will work no material prejudice to any characteristic feature of the general maritime law ” (pp. 64, 65).

Rosengrant v. Havard (273 U. S. 664) was decided upon the authority of the two cases above set forth. The Rosengrant case was this: A lumber inspector, in the course of his employment by a lumber manufacturer, went upon a schooner lying in navigable waters near his employer’s mill and was hurt while he was there temporarily engaged in checking a cargo of lumber then being discharged from a barge lying in navigable waters and alongside a wharf. On the ground that the contract of employment had no relation to navigation and was non-maritime, the State court allowed recovery for the employee’s injuries under the local compensation law and its judgment was affirmed. (See 281 U. S. at p. 232.)

We think the foregoing decisions of the highest court of the nation rule the case in hand and sanction the conclusion of the State Industrial Board that, At the time the said Joseph Dimino sustained the accidental injuries which resulted in his death, he was not engaged in performing any work of a maritime character or nature and said work bore no relation to navigation but was a matter of local concern.” (Cf. Matter of Newham v. Chile Exploration Co., 232 N. Y. 37.)

The order of the Appellate Division should be reversed, and the award of the State Industrial Board affirmed, with one bill of costs in this court and in the Appellate Division to the appellants.

Finch, Rippey, Sears and Lewis, JJ., concur; Lehman, Ch. J., and Conway, J., dissent.

Ordered accordingly.


author: Conway, J. Lewis, J.

text:
    The People of the State of New York, Respondent, v. Frank Davino, Appellant.
    Argued October 16, 1940;
    decided December 31, 1940.

      Harry G. Anderson and Leon Fischbein for appellant.

      William O’Dwyer, District Attorney (Henry J. Walsh of counsel), for respondent.
   Conway, J.

On the 31st day of October, 1938, the deceased, Thomas J. Hitter, a fireman, returned to his fire house after cashing the pay checks of his fellow firemen. As he stopped his automobile outside the fire house, his assailant drove alongside, shot him, jumped from the automobile, ran around the automobile of Hitter to the front right-hand door, shot him again, took the money from the pocket of deceased, ran back to his own automobile and sped away.

The question for the jury was one of identity, which is always a difficult one. None of the witnesses who saw the occurrence was nearer to it than seventy feet. One saw only the left profile of the assailant and did not see the defendant until in the hallway of the court house some seventeen months later. Another witness, who could not identify the defendant, said that the assailant seemed to have a peculiar way of running; that it was more or less of a shuffle. The other three went to the office of the Parole Commission about seven weeks after the occurrence and saw the defendant who had been directed to report as a parolee.

Of those three, one said that on the day of the homicide the assailant ran as though bowlegged or as if he had a club foot; that there was something wrong with one of his feet and that her recollection was that the assailant was without a coat. At the parole office that witness said she would like to see the defendant without a coat. He then had on a camel’s hair coat. Later in the day at the station house she asked to have that coat removed and then identified the defendant.

The second of these three witnesses said that the defendant at the time of the homicide had on a gray hat and gray top coat. At the parole office that witness said he would like to see the defendant with his hat on. Later he said he became positive in his identification when he saw defendant again later in the day in the station house and in the District Attorney’s office the following morning. He said he wished to see the man in a gray coat and hat and to see his profile and to see the hat pulled over his eyes, the way he had it on the day of the homicide. He said the clothing had some part in making him positive in his identification. He testified that he did not say definitely that the defendant was Hitter’s assailant until in the District Attorney’s office on the day following his visit to the parole office. There he wished to see defendant’s profile. That witness noticed nothing about the manner in which the assailant of Hitter ran, whether with a limp or a dragging foot.

The third witness noticed that Hitter’s assailant wore a gray overcoat and had an odd shaped nose and dark complexion. He did not notice anything peculiar about the man’s gait; he trotted. He said that apart from the dark complexion and the odd shaped nose there was nothing unusual about the assailant.

Apparently, from the record, the defendant is neither bowlegged nor club-footed. There was no evidence of flight or enrichment.

The defendant was not tried until fifteen and one-half months after his arrest.

The defendant interposed an alibi. We cannot say as matter of law that it was destroyed: Ludwig did not testify; the testimony of the witness Bellilo is unreliable and the witness Lemal did not recall the date of the cashing of the check which was involved as part of the alibi.

As was said by Crane, Ch. J., in People v. Crum (272 N. Y. 348, 350): “ A review of the facts means that we shall examine the evidence to determine whether in our judgment it has been sufficient to make out a case of murder beyond a reasonable doubt. We are obliged to weigh the evidence and form a conclusion as to the facts. It is not sufficient, as in most of the cases with us, to find evidence which presents a question of fact; it is necessary to go further before we can aflirm a conviction and find that the evidence is of such weight and credibility as to convince us that the jury was justified in finding the defendant guilty beyond a reasonable doubt.”

“ The identity of the defendant as the person who committed the homicide was not in this case shown with sufficient certainty to preclude a reasonable possibility of mistake.” (People v. Seppi, 221 N. Y. 62, 68.)

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

Lewis, J.

(dissenting). I dissent and vote to affirm the judgment of conviction.

The homicide occurred during the noon hour and was witnessed by at least three persons — the People’s witnesses Richard J. Kavanagh and James W. Ryall, who were members of the Fire Department of the City of New York, and Mrs. Alice C. Kavanagh — all of whom were in or close to an automobile which was standing near the place where the crime was committed. These three persons were awaiting the return of their friend, fireman Hitter, who had gone to a bank to cash pay checks for Kavanagh, Ryall and other firemen. Each of the three witnesses saw Hitter stop his car at the curb seventy-five feet in front of the Kavanagh car. Their interest in Hitter’s return with the proceeds of their pay checks naturally caused them to observe him and the movements of the man who later became his assailant. After Hitter had stopped his car the three witnesses saw a second automobile come to a stop to the left of and two feet away from Hitter’s car. They then saw extended from the front right door of the second car a hand in which was a revolver pointed at Hitter who was then seated on the front seat of his own car. They heard a shot and saw the hand and revolver withdrawn and immediately from the second car a man emerged, with gun in hand, who ran around the rear of Hitter’s car. When he had reached a point on the sidewalk where Hitter’s limp body had slumped down near the right front door of his car, the three witnesses saw the man with the revolver fire a shot into the prone body of their friend and quickly reach into the latter’s inside coat pocket from which a yellow envelope was extracted. They saw the assassin retrace bis steps around the rear of Hitter’s car and re-enter the automobile in which he had arrived at the scene. His movements from the time he left his car, after the first shot was fired, until he returned to his car after he had fired the second shot and had extracted the envelope from his victim’s pocket, must have consumed at least a full minute — or so the jury may have found. Within that time, according to the evidence, the assassin was within full view of, and was being constantly observed in the light of the noon hour by the three witnesses from their positions which concededly were not more than seventy-five feet away. The experience of seeing a man emerge from an automobile, with gun in hand, who. not only proceeded to shoot their friend at close range but also withdrew from his pocket an envelope in which they had reason to be interested, was such as to arrest the attention of the three witnesses and excite their keenest powers of observation. In such circumstances it was natural that they should observe the movements of the assassin in the course of which he exposed both his left and right profiles and at one time presented to the witnesses a full front view of so much of his face as was to be seen beneath the brim of his hat. These three witnesses later identified the defendant as the man who shot the decedent.

True, there are minor inconsistencies among the three witnesses as to the exact type and color of apparel worn by the assassin and as to certain of his physical characteristics. However, I believe that the evidence given by these witnesses, when considered with the People’s testimony offered to disprove the defendant’s alibi, was sufficient to justify the jury’s finding of the defendant’s guilt beyond a reasonable doubt. “ Even in a capital case, the decision by the jury of all questions of fact is subject to review by us only to the extent of determining whether the evidence fairly and reasonably supports their conclusion upon each of those questions.” (People v. Sanducci, 195 N. Y. 361, 367.)

Lehman, Ch. J., Loughran, Finch and Rippey, JJ., concur with Conway, J.; Lewis, J., dissents in opinion in which Sears, J., concurs.

Judgment of conviction reversed, etc.


author: Conway, J.

text:
    The People of the State of New York, Respondent, v. Miriam M. Propp, Appellant.
    Argued October 15, 1940;
    decided December 31, 1940.

      Nathan A. Propp for appellant.
    No appearance for respondent.
   Conway, J.

Appeal by permission of a justice of the Appellate Division from a judgment of the County Court of Franklin County affirming a judgment of the Police Justice’s Court of the Village of Tupper Lake convicting defendant of a violation of the Vehicle and Traffic Law (Cons. Laws, ch. 71) section 86, paragraph 3.

There is no substantial dispute about the facts. The defendant is a resident of the village of Tupper Lake and rents rooms in her residence to tourists. About five o’clock in the afternoon of July 17, 1939, the complainant parked her automobile in front of defendant’s home and across the pathway which led from the street curb to the door. As this was the hour when tourists were likely to engage rooms for the night, defendant asked complainant to move the automobile, explaining that its position would affect her business. Complainant asked permission to mail some letters in the post office and said she would return in a moment. After waiting for twenty-five minutes the defendant obtained her own car, backed it in front of complainant’s and without releasing the emergency brake upon the latter, pushed it backward a sufficient distance to leave the path unobstructed.

The defendant is charged with a violation of section 86, paragraph 3, of the Vehicle and Traffic Law. That section reads as follows: The driver of a vehicle shall apply the emergency brakes before leaving the same unattended on any public highway. No person without authority of the driver shall set or attempt to set any vehicle in motion, or in any way interfere with any vehicle; provided, however, that for the purpose of getting away from the place of standing, a driver may move another vehicle which is so placed that he cannot get his vehicle out, and immediately thereafter he shall reset the brake.”

A reading of the section in its entirety indicates that it was enacted to protect the traveling public and, on their behalf, to prevent the setting in motion of or interference with parked automobiles except as indicated therein. The matter of brakes was so important in the legislative mind that the section begins and concludes with a reference to them. The brakes on complainant’s automobile were not released. The car was never set in motion. It moved only in response to force applied and when such application ceased it was again stationary. Neither mechanism nor brakes were touched. There was no violation of the statute either in letter or spirit.

The judgments should be reversed and the information dismissed.

Lehman, Ch. J., Loughran, Finch, Rippey, Sears and Lewis, JJ., concur.

Judgments reversed, etc.


author: Lehman, Ch. J. Conway, J.

text:
    In the Matter of the City of New York, Appellant, Relative to Acquiring an Easement within the United States Bulkhead Lines of Newtown and Maspeth Creeks in the Boroughs of Brooklyn and Queens; Cord Meyer Company, Respondent.

      Argued October 7, 1940;
    decided December 31, 1940.

      William C. Chanler, Corporation Counsel (Lewis Orgel, Julius Isaacs and Philip L. Wellens of counsel), for appellant.

      John D. Monroe for respondent.
   Lehman, Ch. J.

In condemnation proceedings the Cord Meyer Company received an award of $32,000 for property owned by it and designated in the condemnation proceedings as Damage Parcel No. 11. There was dispute as to the title to that damage parcel. The Cord Meyer Company claimed title to it under a State grant made in 1871. The city of New York claimed that the State had parted with title by much earlier grant. The city appealed from the final decree in favor of the Cord Meyer Company, contending that the court at Special Term had erred in its determination of title. The Cord Meyer Company appealed from the final decree, contending that the court had, through error, awarded inadequate damages. The Appellate Division modified the award by increasing it to the sum of $46,830.

We agree with the courts below that the Cord Meyer Company had title to the damaged parcel taken in these proceedings. The question remains whether the Appellate Division might properly increase the amount of damages awarded. In the city of New York, the Appellate Division, upon an appeal from a final decree in a condemnation proceeding, has power to determine the appeal “ upon the merits both as to matters of law and fact.” (Administrative Code of the City of New York, § B15-25.0, L. 1937, ch. 929.) Even so the power to reverse a finding of fact may be exercised only in accordance with the general rules of law regulating appeals to that court. It may not set aside a finding of value made at Special Term, unless such finding is based upon erroneous theory of law or erroneous ruling in the admission or exclusion of evidence, or unless it appears that the court at Special Term has failed to give to conflicting evidence the relative weight which it should have and thus has arrived at a value which is excessive or inadequate. The field in which an appellate court may exercise its power to set aside a finding of fact has at times been defined more narrowly. We need not now decide whether under the provisions of the Administrative Code the power of the Appellate Division is as broad as we have said, for in this case it seems clear that the Appellate Division has increased a valuation which accords fully with the evidence.

Before the condemnation of Damage Parcel No. 11, the Cord Meyer Company had title to 215,281 square feet of land. Of this tract only 20,921 square feet were taken by the city. A bulkhead had been erected in 1900 upon the land contained in the damage parcel. The bulkhead unquestionably increased the value of the entire tract. Without it the tract could not be used for the most profitable use for which the land was fitted. The taking of the land upon which the bulkhead had been erected not only took away a portion of the land owned by the Cord Meyer Company but also reduced the value of the remainder of the land. The owner held unimproved land where previously it had owned improved land and the problem presented upon this appeal is whether the justice at Special Term gave reasonable weight to the evidence presented to establish the damages caused by the loss of the benefit of the improvement destroyed by the taking.

There can be no doubt that the owner’s damages are the difference between the value of the land before part of it was taken and the value of that which remained after part was taken. The original cost of constructing the bulkhead or its reconstruction cost is a factor in determining the value of the tract before the taking and of its decreased value after such taking. Evidence offered to show such cost, less depreciation suffered in the course of years, would, therefore, be relevant. (Matter of City of New York, 198 N. Y. 84.) Such evidence was offered by the owner and received by the court. An experienced engineer and dock builder, testifying for the plaintiff, calculated the cost of constructing a bulkhead of the same length and in the same position as the bulkhead taken by the city, at a figure a little under $60,000 and placed the depreciation of the bulkhead at ten per cent of that cost. He also testified that the cost of erecting a bulkhead is ninety dollars a linear foot. The city produced no witness to contradict that testimony. It called a witness who had expert knowledge of the purchase and sale of similar water front property when improved by a bulkhead and of similar property without such improvement. Admitting frankly that he has no expert knowledge of the cost of erecting a bulkhead, the witness testified that in his opinion the land before the taking when improved by a bulkhead was worth sixty cents a square foot and that the land which remained after the taking and without such improvement was worth only fifty cents a square foot. Calculating the damage in that mannerqhe found that by the taking the owner had suffered a loss of $31,988 and the award made at Special Term for the loss is in accord with the testimony of the city’s witness.

The record does not show that in accepting the testimony of the city’s expert the justice at SpeciaLTerm disregarded the testimony of the cost of construction of the bulkhead destroyed by the taking or the cost of reconstructing another bulkhead in its place. On the contrary, it appears that the justice at Special Term viewed the tract as an aid in determining the depreciation in the bulkhead erected twenty-three years before the taking. The cost of construction of the bulkhead and the degree of its depreciation at the time of the taking was not the ultimate question to be decided by the court but was only a factor to be considered in determining the loss of value caused by the taking. (Matter of City of New York, supra.) In this case, indeed, there may be doubt as to whether such costs would be an important factor. Ordinarily an adequate improvement prudently planned and economically constructed enhances the value of the unimproved land by the cost of the construction. Conversely the taking or destruction of the improvement takes away the structural value ” of the improvement which, as we have said in the cited case, is but another name for cost of reproduction, after making proper deductions for wear and tear” (p. 87). The cost of a bulkhead may, however, as the expert witness for the city pointed out, have no direct relation to the value of the benefit derived from the improvement, though concededly it “ influences ” the value of the property. A bulkhead may be necessary for the most profitable use of land but if only a short bulkhead is required in order to bring this benefit to a large tract of land, the resultant benefit may be much greater than the cost of improvement. On the other hand, if a longer bulkhead is required to serve a smaller area of land, the cost of the improvement may be greater than the benefit which would be derived by building it. In such case, the cost of a bulkhead added to original value of the land would be greater than the value of the improved land.

That explanation given by the city’s expert justified the court at Special Term in basing the damage suffered by the owner upon the difference in the market value of land improved with a bulkhead and land not so improved rather than on the “ construction value ” of the bulkhead. Indeed, in a unanimous decision the majority opinion in the Appellate Division seems to indicate that, like the justice at Special Term, it found that the loss caused by the taking was the difference between the value of bulkheaded ” land and the value of land without a bulkhead; though only in the concurring opinion of Mr. justice Hagarty is there any indication of the manner in which the difference was calculated. From that opinion it appears that the court fixed the value of the entire tract before the taking at seventy-five cents a square foot. At the rate of seventy-five cents a square foot, the value of the 20,921 square feet taken, it is pointed out, would amount to $15,690. The remainder of the land would then be without a bulkhead and the testimony of the expert shows that a bulkhead erected upon the new water fine of the claimant’s property, after the property in front of that line was taken by the city, would be 346 feet in length and would cost ninety dollars a linear foot to erect, and its total cost would thus be $31,140. This figure was then added to the value of the land taken and the amount thus fixed amounted to $14,830 more than the amount fixed by the justice at Special Term. Thus it appears that the Appellate Division not only found that the value of the premises improved by a bulkhead was seventy-five cents a square foot, though the justice at Special Term upon credible evidence found the value only sixty cents a square foot, but also found a difference of approximately sixteen cents a square foot between land so improved and land without a bulkhead, although the justice at Special Term had found that there was a difference in value of only ten cents a .square foot. Though such difference might be insufficient to wipe out the loss of the “ structural value ” of the bulkhead without which the property could not be put to the same profitable use to which similar land with a bulkhead could be put, there is testimony that without the bulkhead the land might be put to some other use sufficiently profitable to justify a finding that the difference in value between the land with a bulkhead and land without a bulkhead is less than the “ structural value ” of the bulkhead.

The original bulkhead was, as we have said, twenty-three years old. Properly, neither Special Term nor the Appellate Division has made any finding of the cost of the original bulkhead, for a new bulkhead would be built upon the new water line, nor is there any finding of the depreciation of the old bulkhead. Concededly that bulkhead had depreciated at least ten per cent and after viewing it the trial court might reasonably have found, if such finding were material, that after twenty-three years a larger allowance for depreciation would be reasonable. Discussion of the amount of that depreciation would serve no purpose here. Apparently in fixing the loss the Appellate Division has allowed the entire cost of building a new bulkhead upon the new line of the claimant’s property, though the bulkhead taken had depreciated in the course of years. The court at Special Term did not base its finding of value on any erroneous theory of law; no error was made in its rulings on the admission or exclusion of evidence, and its adequacy is supported by credible evidence produced by the city.

The order of the Appellate Division should be reversed, without costs and the order of the Special Term affirmed.

Conway, J.

(dissenting). The improvement in this instance was a bulkhead. It retained the filled-in land constituting the damage parcel. It was not only a proper and adequate improvement but a necessary one. There was only one expert called by either claimant or the city who had any knowledge or experience with respect to bulkheads. He was called by claimant and testified to the reconstruction cost, less depreciation, of the bulkhead taken in the proceeding and the cost of building a necessary substitute to retain the land of claimant which remained after the taking. That testimony was admissible (Matter of City of New York, 198 N. Y. 84), and in the absence of contradiction, controlling. In that case the court said:

The learned Appellate Division has laid down the rule that, in condemnation proceedings, evidence of the structural value of buildings should not be received, and that the landowner must be confined to proof of the value of his land as enhanced by the value of the structures thereon. This is doubtless the rule applicable to certain cases, but we think it is not, and should not be, a rule of universal application. * * *

“A man may build an expensive mansion upon a barren waste, and, in such a case, the costly building may add little or nothing to the total value. In the greater number of cases, however, when the character of the structures is well adapted to the kind of land upon which they. are erected, the value of the buildings does enhance the value of the land. In such cases it is true that the value of the land as enhanced by the value of the structures is the total value which must be the measure of the owner’s just compensation when his property is condemned for public use. As to that general proposition there can be no disagreement. But how is the enhancement of the land by the structures which it bears to be proven? If all buildings were alike, the rule laid down by the Appellate Division would be one of convenient and universal application. It is common knowledge, however, that buildings not only differ from each other in design, arrangement and structure, but that many which are externally similar and are situate upon adjoining lands, are essentially different in the quality and finish of the materials used and in the character of the workmanship employed upon them. It must follow that such differences contribute in varying degrees to the enhancement in the value of the land, and we can think of no way in which they can be legally proved except by resort to testimony of structural value, which is but another name for cost of reproduction, after making proper deductions for wear and tear ” (pp. 86, 87).

Since this testimony was uncontradicted and undisputed by any one with knowledge or experience, to disregard it was error of law. That error was not cured by the personal view of the premises by the court. Such a view may be helpful to the court in some respects but technical knowledge of construction costs and proper depreciation write-offs could not be obtained thereby.

In Perkins v. State of New York (113 N. Y. 660) this court said: The fact that the commissioners are required to view the premises and to act to some extent upon their own judgment, informed by ocular evidence, does not deprive this court of the power to review their award upon . the question of damages. They may adopt some erroneous rule of damages, and their findings may be such, and the case, upon all the evidence, may be such as to show that they misconceived the facts and erred in their estimate.”

In Matter of Thompson (121 N. Y. 277) it was held that where proof in a condemnation proceeding as to the damages was conflicting, the jurisdiction of the General Term was governed by the general rules of law regulating appeals to it. For a discussion as to the right to review the amount of damages on appeal, see Matter of City of New York (Avenue A) (66 Misc. Rep. 488).

An appeal may be taken to the Appellate Division upon questions of law or upon the facts. (Civ. Prac. Act, § 608.) The value of property taken in condemnation proceedings is a question of fact. (Matter of City of New York [Fourth Ave.], 255 N. Y. 25.) Power to review the amount of the award is expressly given to the Appellate Division by the Administrative Code of the City of New York, section B15-25.0. That section provides: The city or any party or person affected by the proceeding and aggrieved by the final decree of the court therein as to awards or as to assessments, or either of them, may appeal to the appellate division of the court. * * * Except as herein otherwise provided, such appeal shall be taken and heard in the manner provided by the civil practice act and the rules and practice of the court in relation to appeals from orders in special proceedings, and such appeal shall be heard and determined by such appellate division upon the merits both as to matters of law and fact.”

The Appellate Division had the power to increase the award and such increase is justified by the evidence. In so far as the order of the Appellate Division increased the amount of the award, it was in effect a reversal. Under section B15-25.0 of the Administrative Code of the City of New York such additional assessments for benefit as may be necessary may be made by Special Term upon appropriate application.

The order should be affirmed, with costs.

Loughran, Sears and Lewis, JJ., concur with Lehman, Ch. J.; Conway, J., dissents in opinion in which Finch and Rippey, JJ., concur.

Ordered accordingly.


author: Lehman, Ch. J.

text:
    In the Matter of Gladys M. Beggs et al., Respondents, against Paul J. Kern et al., Constituting the Municipal Civil Service Commission of the City of New York, Appellants.
    Argued December 2, 1940;
    decided December 31, 1940.

      William C. Chanler, Corporation Counsel (Robert H. Schaffer of counsel), for appellants.

      Albert de Roode for respondents.
   Lehman, Ch. J.

The city of New York, through the Department of Welfare, the Board of Child Welfare, the Department of Hospitals, and the Department of Correction, is performing social service in a wide field. It is common knowledge that relief of the needy, furnished through those departments, has constantly increased during the last decades, and especially since 1931. The number of social investigators employed in these departments has also increased greatly. While the number of social investigators employed in each department was small the positions held by them were not graded and so long as the positions were ungraded the head of the department had power to increase the salary of a social investigator or to assign to a social investigator powers and duties of direction and supervision of others in the same employ without any of the limitations imposed by law where there is promotion from one grade to another grade in the graded service. (Matter of Amann v. Finegan, 253 App. Div. 364.) In the group of social investigators receiving salaries ranging from $1,800 to $2,400 some were acting as supervisors of other investigators in the same group. With the great increase in the number of social investigators has come realization of the advantages that might result in the administration of the work if the positions in the social service were classified, ranked and graded in accordance with the duties performed by the investigators and the salaries that should in the future be paid for the performance of varying duties.

In June, 1937, the Municipal Civil Service Commission took the first step towards classifying and grading such positions. That resolution provides:

Resolved, That the competitive class of the Municipal Civil Service classification be and the same is hereby amended by including therein a new part to be known as

“ ‘ Part (appropriate number), The Social Service (ERB or successor).

“ ‘ Grade 1, Social Investigator, to but not including, $1,800 per annum.

“ ‘ Grade 2, Assistant Supervisor, Medical Social Worker, Home Economist, $1,800 to but not including, $2,400 per annum.

Grade 3, Supervisor, $2,400 to but not including, $3,000 per annum.

“ 1 Grade 4, Senior Supervisor, $3,000 to but not including, $4,200 per annum.

“ ‘ Grade 5, Assistant Director, $4,200 to but not including, $6,000 per annum.

“ 1 Grade 6, Director, $6,000 or over.’ ”

By its terms that resolution was intended to apply only to employees of the Emergency Relief Bureau or its successor. Those employees had been appointed without competitive examination and had no rights of tenure to the positions which they held. (Matter of Kraus v. Singstad, 275 N. Y. 302.) In January, 1937, the Municipal Civil Service Commission adopted a resolution classifying and grading in similar manner positions in the Board of Child Welfare. The employees of that Board, unlike the employees of the Emergency Relief Bureau, had been appointed after competitive examination and consequently had rights of tenure which could not be destroyed by classification and grading of positions in that department. (Matter of Fornara v. Schroeder, 261 N. Y. 363; Matter of Sandford v. Finegan, 276 N. Y. 70.) The salary grade which the Municipal Civil Service Commission might deem most appropriate in the light of past experience for those performing functions and holding the rank described in the parenthetical or office title of the grade might vary greatly from the salary paid to the incumbents of ungraded positions of similar rank or similar duties. In order to accord to such incumbents protection against loss of rank or salary through such classification and, at the same time, to preclude such persons from claiming increased salary or higher rank and duties, the Municipal Civil Service coupled in its resolution classifying and grading such positions the following conditions:

1. All persons of the title of Social Investigator and Special Investigator in the Board of Child Welfare lawfully performing the duties pertaining to such titles and receiving the salaries lawfully attaching thereto are hereby continued in such titles, duties and salaries regardless of the classification hereinafter set forth.

2. All supervisory positions in the Board of Child Welfare shall be filled by promotion examinations to be hereafter ordered and in accordance with the titles and grade ranges hereinbefore set forth.

“ 3. No person shall perform supervisory duties in the Board of Child Welfare unless such person shall have passed the appropriate competitive examinations and been certified therefrom.” '

A similar resolution was adopted on January 12, 1938, extending the same classification and grading to the Department of Hospitals, subject to the same conditions.

By resolution adopted on September 21, 1938, the same classification and grading was extended by resolution of the Civil Service Commission to all city departments and the positions of assistant supervisor, supervisor, senior supervisor, assistant director and director were expressly stricken from the ungraded service. That resolution contained the condition that “All persons of the title of Social Investigator, who are affected by this resolution, shall continue in such title with salaries, present duties and status unaffected and unimpaired by this reclassification. Promotion lists presently in existence will continue to be certified for appropriate positions in the new classification.”

The plain intent of that resolution is that, though positions in the competitive class of the social service in all departments of the city of New York should be classified and graded as provided in the resolution, yet that the classification and grading should not apply to such positions while held by persons theretofore appointed and who at. that time had the title of social investigator, and that the titles, salaries, duties and status of the incumbents should remain unaffected by the grading of positions as provided in the resolution.

Grading of positions previously ungraded confers upon the incumbents some advantages not previously enjoyed and subjects the incumbents to some new disadvantages. An incumbent may not thereafter be demoted to a lower salary grade at the will of the department head; nor may he be promoted to a higher salary grade or assigned to duties not appropriate to the title of the graded position without taking appropriate examination for promotion. The Civil Service Law (Cons. Laws, ch. 7) determines the effect of the grading. The Civil Service Law does not in express terms confer upon a civil service commission power to grade positions in a department and at the same time to provide that the grading shall not affect the salaries, ! duties and status of present incumbents of such positions. The Commission urges that such power should be read into .the law by implication, for otherwise, it is said, reclassifi- ' cation and grading of positions in the public interest will be unduly obstructed. In the courts below the incumbents of positions appointed under the title of social investigator have successfully urged that not only did the Commission lack power to place any condition or limitation upon its attempted grading of position but also that the resolution as adopted must be given the unintended effect of conferring upon each incumbent the right to be placed within that salaried grade which, under the terms of the resolution, has a salary range which would include the salary he is receiving regardless of whether the incumbent is holding rank and performing duties appropriate to the title of the positions in that grade.

The situation of these incumbents would be anomalous if the provisions of the resolution which exclude them from the regrading were given the intended effect. So long as an incumbent continues to occupy the position he now holds, the position would no longer be ungraded and the salary could no longer be decreased at the will of the department head; yet the incumbent would not occupy a position which falls within any grade provided in the resolution itself. In effect, each position would constitute a separate grade and any change in the rank, functions or salary of the incumbent would constitute a change of grade. We agree with the courts below that by no fair implication can there be read into the statute an intention to confer upon the Civil Service Commission a power to adopt a resolution which would have such an extraordinary effect.

The intent of the Civil Service Law is that there shall be grading of positions in a department where grades can be fixed reasonably with due regard for the public interest. The Civil Service Law does not contemplate that, where such grades may be fixed reasonably, positions may be graded for persons appointed in the future, while the positions in the same service remain ungraded, so long as they continue to be occupied by incumbents previously appointed, though the incumbents have the same powers and duties as those appointed to positions in that service thereafter. It follows that the incumbents whose positions, while occupied by them, have been excluded from the grades fixed for positions in the same service when filled by later appointment, are entitled to an order directing the Civil Service Commission to classify their positions and to place their positions in an appropriate grade. It does not follow, however, that any appropriate grade in which they must be placed has been established by the resolution of the Civil Service Commission, or that the resolution must be given an effect directly contrary to its expressed intent so that the positions occupied by the present incumbents will be included in the grades now provided by the resolution from which under the terms of the resolution they are excluded.

It is provided in the Municipal Civil Service Rules that

“ 12. ‘ Rank/ denotes the order or standing of a position with reference to the degree of its responsibility. (Where Rank and Grade are co-extensive the term Grade is used.)

“ 13. Grade/ denotes the order or standing of a Position with reference to the compensation attaching to it.

14. ‘ Title/ a designation of a Position based upon its duties and functions.

15. "Office title/ designation of a position the duties of which are peculiar to a department.”

We are told that in accordance with the definitions contained in the Civil Service Commission’s rule the grading of positions is determined solely by the salary paid, and that the salary range of the grades as fixed in the resolution of the Commission determines that all positions to which a salary within that range is attached, necessarily fall within such grade. The courts below, sustaining that contention, have held that, as a result, there must be included in “ Grade 2, assistant supervisor, medical social worker, home economist, $1,800 to but not including, $2,400 per annum,” the position of every social investigator who receives a salary within the salary range of that grade, even though some of such social investigators have never performed duties appropriate to the title of assistant supervisor, medical social worker, or home economist, while their positions were ungraded, and even though the administrative heads of the departments and the Civil Service Commission concur in the view that under present conditions no person should act as assistant supervisor or supervisor without taking a competitive or promotional examination for such position.

As authority for that conclusion the respondents lean heavily upon Matter of Carlin v. Finegan (254 App. Div. 654) and Matter of Friedman v. Kern (258 App. Div. 1050; leave to appeal denied, 282 N. Y. 809). In the Carlin case, the applicant, Carlin, after competitive examination, had been appointed to an ungraded position of chemist. His salary was increased from time to time until he received $2,860 per year. Thereafter, the Civil Service Commission graded the positions in the chemist service,” establishing the following grades, amongst others:

Grade 4 — Chemist — $2,700 to $3,300.

Grade 5 — Senior Chemist — $3,300 to $3,900.

Grade 6 — Principal Chemist — $3,900 upwards.

Carlin was placed in Grade 4, while chemists in the same service and performing similar duties were placed in Grade 5 or Grade 6. Carlin challenged the right of the Commission to grade, according to salary, the positions of men performing similar duties, but the court held otherwise. In the Friedman case the question presented was similar. Friedman held a position in an ungraded service. In grading that service incumbents, according to the opinion of the justice at Special Term, were included in titles and grades appropriate to their duties and salaries.” Friedman claimed that his position, when graded, must be placed in a grade with a salary range higher than the salary he was receiving because he had previously had a title used to describe positions in a higher grade, but the court said that the holder of an ungraded position was not entitled to an increase of salary or to a title applicable only to persons receiving salaries considerably in excess of those which the petitioners were receiving.” In those cases the city successfully maintained that under the Civil Service Rules, The grade of a position is determined by the compensation of the position regardless of the duties performed or the responsibility of the incumbent.” The city’s contention here is not inconsistent. The city does not dispute that in grading a position the salary attached to the position determines the grade in which the position is placed. It does dispute the conclusion, resting upon that premise, that because the petitioner-respondents have in the past been receiving salaries within the salary range established under Grade 2 for “ Assistant Supervisors,” they are entitled to be placed in that grade and in consequence to acquire and hold the rank and to exercise the powers appropriate to a position with that title.

Under the definitions of the Civil Service Rules, each position has a title ” or designation ” which is “ based upon its duties and functions,” and also has a “ rank ” which “ denotes the order or standing of a position with reference to the degree of its responsibility,” and a “ grade ” which may be co-extensive with its rank but which denotes the “ order or standing of a position with reference to the compensation attaching to it.” The Civil Service Law recognizes no distinction in the rank, duties or grading of positions in the ungraded service. Within the limits of that ungraded service the department head, as we have said, is free to change the rank, the duties or the salary of those appointed in that service after competitive examination. When the position is graded the rank, functions and grade of the position of the incumbent are fixed and change is subject thereafter to the provisions of the Civil Service Law. Ordinarily the salary attached to a position varies with the rank, powers and duties of the position and since the grading ” of a position is determined by the compensation attaching to the position it is evident that before there can be any grading of the positions in an ungraded service there must be determination of how far there should be differentiation in rank and duties in the positions within the service. After the Commission has decided these matters, the position must be placed in the grade fixed by the salary attached to the position. The courts in the cited cases decided nothing else.

In those cases the incumbents of positions in the ungraded service claimed the right to positions with higher rank or increased powers which were included in a higher grade, urging that before the grading of positions in the ungraded service, the incumbent had been assigned higher rank or exercised the larger powers which were denoted by the title of the positions placed in a higher grade. That was denied them. Here the incumbents of positions in the ungraded service claim the right not merely to have the positions graded with reference to the salaries attached to their positions, but the right to have their positions classified and placed in the salary grade now fixed by the resolution which, in terms, excludes those positions while occupied by them from that grade. They do not conceal the fact that if that is accorded to them it will be contrary to the intention of the Civil Service Commission and will entitle them to occupy the position of assistant supervisor and to perform the duties of that position, though the Commission, if it had seen fit, might have so classified and graded the positions in the ungraded service that the duties and powers of assistant supervisor could not be assigned to persons in the same position and grade as the respondents.

The Commissioners, faced by the problem of how to grade the ungraded service in manner which, in their, opinion, would best serve the public interest in the future and at the same time protect the incumbents of ungraded positions, have attempted to solve it by the exercise of powers not granted by the statute. Because of that, we cannot give to the resolution its intended effect, but we may not give to the resolution of the Commission an effect not intended by the Commission. The Commission must reclassify and grade all the positions in the ungraded social service, but the courts may not require the Commission in such reclassification to confer upon the incumbents of the ungraded positions rights and benefits to which they would not otherwise be entitled and which in the opinion of the Commission would work injury to the administration of the city’s affairs.

The orders of the Special Term and of the Appellate Division should be modified to the extent that the defendant Commissioners are directed to grade the positions in the ungraded service in accordance with this opinion, and as •so modified affirmed, without costs.

Loughran, Finch, Rippey, Sears, Lewis and Conway, JJ., concur.

Ordered accordingly.


text:
    In the Matter of Montifiore G. Kahn, Appellant; National City Bank of New York, Respondent.
    (Appeals Nos. 1 and 2.)

      Argued November 18, 1940;
    decided December 31, 1940.

      Samson Selig, Abraham J. Multer and William F. Roche for appellant.

      Barney B. Fensterstock and Harry Zalkin for respondent.
   Lehman, Ch. J.

In 1931 the National City Bank of New York agreed to settle thirty-three actions, which had been brought in the Supreme Court of the State of New York against the bank, to recover the value of rubles claimed to have been deposited in the bank’s Petrograd branch or Moscow branch. The agreement is in the form of a letter, signed by the attorneys of the bank, addressed to the firm of attorneys who represented the plaintiffs in all those actions and approved in writing by the attorneys for the plaintiff. The bank agreed to pay nine cents for each ruble of the balance of such accounts on September 1, 1918, with interest at the rate of six per cent from September 1, 1918, but the amount of rubles ” in such balance was not fixed in the agreement. That balance, under the terms of the agreement, was “ to be determined on the basis of the latest reliable evidence available, either to the bank or to the respective depositors, or to their legal representatives or next of kin, or assignees, or to attorneys for the plaintiff and defendant. In the event that the attorneys cannot agree the amount of such rubles, if any, shall be submitted to arbitration by the parties to Robert McC. Marsh, Esq., or, if he cannot act, to some arbitrator to be agreed upon by the attorneys, or, if they cannot agree, to be appointed by the President of the Association of the Bar of the City of New York.” Included in the thirty-three actions intended to be settled by this agreement and enumerated therein were three actions brought by the appellant Montifiore G. Kahn.

The parties and their attorneys failed thereafter to agree upon the number of rubles in the appellant’s account, and the parties then agreed that the arbitration should proceed before George W. Alger, Esq., in accordance with the provisions of the settlement agreement. Both parties are now represented by attorneys other than those who signed the agreement to settle the cases. The original controversy as to the amount of rubles in the appellant’s account with the bank in Russia has become exacerbated by claims of the bank that the appellant is not furnishing in good faith, as required by the settlement agreement, “ the latest reliable evidence available ” relating to the balance of the depositor’s account, but that, on the contrary, he has made exaggerated claims which he has sought to support by wholly unreliable and untrustworthy evidence, and that in breach of the agreement the appellant has also failed to make frank disclosure to the respondent of all assignments made by the appellant of his bank deposits and has failed to furnish “ records, books, documents, correspondence or other writings relating in any way to the balance of the depositor’s account.” Following disputes on these matters, the appellant moved at Special Term to compel the bank to proceed to arbitrate in accordance with the agreement of settlement.

The bank opposed the motion on the ground that the appellant had breached the terms and conditions of that agreement. It has not sought, on that ground, to rescind the settlement agreement. It urges only that, since the appellant is in default under the agreement, it is justified in refusing to carry out its own obligations under the agreement. The justice at Special Term granted the motion to compel arbitration. He did not decide whether there had been breach of the terms of the settlement agreement by the depositor, but stated, in his opinion, that if there has been any breach entitling the bank to rescind the settlement agreement, such breach might give rise to a cause of action for rescission of the contract but would not constitute a defense to the motion for arbitration.

Thereafter the bank moved at Special Term for a reargument of the motion to compel arbitration, and then, for the first time, urged that the bank could not be compelled to proceed with the arbitration because the instrument providing for such arbitration constitutes a submission to arbitration of an existing controversy, and was not acknowledged as required by section 1449 of the Civil Practice Act. The depositor urged that the settlement agreement was not a submission to arbitration of an existing controversy, but was a contract for the settlement by arbitration of controversies that might arise thereafter, and that the statute never required acknowledgment of such an agreement. The depositor also pointed out that even if the court should construe the agreement as the submission of an existing controversy to arbitration, the statute requiring the acknowledgment of such an instrument had been amended in the interval between the date when the motion for arbitration was granted and the date when the motion for reargument of that motion was made, and that by such amendment acknowledgment of a submission to arbitration was no longer required. The justice at Special Term granted the motion for reargument and upon the reargument denied the motion to compel arbitration, stating in his opinion that “ the court lacked jurisdiction to entertain the proceedings to compel arbitration because the agreement of December 30, 1931, was an agreement to submit an existing controversy to arbitration and was not acknowledged as required by law. This fact was not heretofore called to my attention.” The Appellate Division affirmed without opinion the order denying arbitration.

Thereafter the depositor made a new motion to compel arbitration. That motion was granted by the court at Special Term. The statute at that time provided for the enforcement of a written submission to arbitration even though such submission was not acknowledged. Since the statute was a remedial statute, there can be no question that the court would have power to grant a motion made thereafter to compel arbitration under a submission which was not acknowledged, though, at the time the submission was signed, the statute required that such a submission should be acknowledged — at least unless there was a previous binding adjudication that the submission was not enforcible. (Matter of Berkovitz v. Arbib & Houlberg, Inc., 230 N. Y. 261, 275.) Upon the appeal to the Appellate Division from the order granting the motion to compel arbitration under the unacknowledged agreement after a motion for similar relief had been denied, the bank urged that the court which denied the original motion had jurisdiction to determine the application, though under statute it had no power to grant it, and that, therefore, the order denying the motion constituted a binding adjudication that the unacknowledged submission was not enforcible. The Appellate Division sustained that contention of the bank, and on that ground reversed the second order which granted the motion to compel arbitration even after a motion for that relief had been denied on the merits.

The depositor has appealed to this court, both from the order of the Appellate Division affirming the original order of Special Term denying the motion for arbitration, and the order of the Appellate Division reversing the subsequent order granting arbitration. If the original denial of the motion to compel arbitration was based on an error of law, this court may reverse that order and then it will be unnecessary for this court to consider whether, before reversal, the order constituted an adjudication that the depositor was not entitled to compel arbitration. The question whether the agreement of settlement was an agreement to arbitrate future controversies or a submission to arbitration of existing controversies is not free from doubt. We need not now pass upon that question, for in our opinion, even assuming that the provisions for arbitration, contained in the settlement agreement, constituted a submission to arbitration and were unenforcible under the statute at the time when the original application was made, yet at the time of the reargument and the denial of the motion to compel arbitration, the depositor was entitled to an order compelling arbitration in accordance with the statute so amended, and the court erred in denying the application for such an order.

Though the order granting the original motion to compel arbitration was, we assume, erroneous when made, if the bank had appealed from such order instead of moving for a reargument, an appellate court would have been bound to affirm the order of Special Term which, though erroneous when made, conformed to the statute for the purpose of giving effect to written instruments which were previously unenforcible. (Robinson v. Robins Dry Dock & Repair Co., 238 N. Y. 271; Bradford v. County of Suffolk, 283 N. Y. 503.)

The same reasons which lead to the conclusion that an appellate court passes upon a determination appealed from in accordance with the applicable law as it is at the time of the appeal, and not in accordance with the law as it was at the time of the original determination, dictate the conclusion that a court of first instance must, upon reargument of an earlier determination, apply the law as it is at the time of the reargument, and may not vacate its previous determination granting relief to which a suitor was not entitled where, before the reargument, the obstacle which originally barred the suitor’s way is removed by retroactive statute. Certainly the court might properly have refused a reargument which the defeated party asked, only for the purpose of interposing the obstacle after it had been removed.

The only question which remains is whether the court before it may compel arbitration, must in this case pass upon an issue of whether the depositor has breached the agreement of settlement. None of the terms of the contract, which the bank claims have been violated, constitute conditions precedent to the arbitration. For the most part they concern matters which the parties agreed should be arbitrated. The court upon a motion to enforce provisions for arbitration has no jurisdiction to determine whether because of fraud or other dereliction on the part of one party to an agreement which contains a provision for arbitration, the other party is entitled to rescind the agreement. The court must pass upon the question whether the written contract providing for arbitration, or the submission to arbitration, was made and whether there was a failure to proceed with the obligation to arbitrate. (Civ. Prac. Act, § 1450; Matter of Bullard v. Grace Co., 240 N. Y. 388; Matter of Siracusa v. 421-425 W. 54th St. Corp., 237 N. Y. 572.) If any other question exists in this case it must be determined in an action for rescission and not upon a motion to compel arbitration.

The order of the Appellate Division affirming the order denying appellant’s motion to compel arbitration should be reversed, with costs in all courts., and motion granted, with ten dollars costs. The appeal from the order of the Appellate Division reversing the order thereafter made granting a motion to compel arbitration should be dismissed, without costs.

Loughran, Finch, Rippey, Sears, Lewis and Conway, JJ., concur.

Ordered accordingly.


text:
    In the Matter of Philip J. Murphy, Respondent, against Lewis J. Valentine, as Police Commissioner of the City of New York, Appellant.
    Submitted November 15, 1940;
    decided December 31, 1940.

      William C. Chanler, Corporation Counsel (Paxton Blair and Henry J. Shields of counsel), for appellant.

      John F. X. Finn for respondent.
   Lehman, Ch. J.

Charges were filed against the petitioner, a police lieutenant, that he:

“ (1) * * * Did * * * unlawfully receive and

accept, in violation of section 306 of the Greater New York Charter, a certain sum of money from one Joseph Dragoni, * * * as a fee, gift or emolument for services rendered or to be rendered in assisting the said Dragoni in the procurement of a license for the sale of alcoholic beverages.

“ (2) * * * Did fail * * * to take proper police

action in connection with the matter set forth in specification number one * * *.

(3) * * * Did fail * * * to make proper report to his Commanding Officer in connection with the matter set forth in specification number one * *

Though acquitted upon the first specification of the charges, the petitioner was found guilty upon the second and third specifications and was fined twenty days’ pay. The determination of the Police Commissioner has been annulled on the ground that “ if the officer was found not guilty of receiving or accepting a sum of money he could not be found guilty of failing to take proper police action or making proper report in connection therewith.” There is room for argument that acquittal of the petitioner upon the charge of bribery would be inconsistent with his conviction upon a charge that he had failed to report to his commanding officer or to take police action in connection with the alleged bribe he is charged with accepting, but we must attribute to the officer of the police department who made the charges a perverted sense of humor if we construe specifications two and three as a charge that the police lieutenant had failed to report to his superior officers his own unfaithfulness and guilt. Specifications two and three refer to minor derelictions “ in connection with the matter set forth in specification number one.” Those specifications can reasonably be understood to mean only that even if it be found that the police lieutenant did not accept the bribe as set forth in specification one, yet “ in connection with the matter set forth in specification number one,” there were things said and done which called for police report and police action. Even though the trier of the facts rejected evidence which, if believed, would establish that a bribe had' been offered and received, there would still remain substantial evidence that there was at least suggestion to the police lieutenant that a money reward would be given for police service desired and that the police lieutenant was guilty of a dereliction of duty in faffing to report and to take proper police action upon such a criminal suggestion.

The order of the Appellate Division should be reversed and the determination of the Police Commissioner affirmed, without costs.

Finch, Rippey and Lewis, JJ., concur; Loughran, Sears and Conway, JJ., dissent on the ground that having been acquitted on specification one, the petitioner could not be convicted of failing to take proper police action upon, and to report, the matter set forth in that specification.

Order reversed, etc.


text:
    In the Matter of the Estate of John J. McGlone, Deceased. Chase L. Day, as Executor of Helena D. McGlone, Deceased, Appellant; Irving Trust Company et al., as Executors of John J. McGlone, Deceased, et al., Respondents.

      Argued November 15, 1940;
    decided December 31, 1940.

      Andrew F. Van Thun, Jr., and George H. Burtis for appellant.

      Philip Zierler for Irving Trust Company et al., as executors, et al., respondents.

      Ralph L. Kaskell, Jr., special guardian for Edward McGlone et al., infants, respondents.
   Lehman, Ch. J.

The widow of John J. McGlone, a resident of Kings county, who died in February, 1937, served notice upon the executors under his last will and testament that she elected to take her share of the decedent’s estate as in intestacy ” pursuant to section 18 of the Decedent Estate Law (Cons. Laws, ch. 13; added L. 1929, ch. 229, as amd.). The executors, claiming that the widow had waived and renounced all rights in her husband’s estate, instituted proceedings pursuant to section 145-a of the Surrogate’s Court Act for a determination of the validity and effect of the widow’s attempted election. The Surrogate sustained the widow’s right to an election. The Appellate Division reversed the decree of the Surrogate and remitted the matter to the Surrogate’s Court for the entry of a decree determining that an instrument executed by the widow in February, 1922, constitutes “ a complete bar to the right of the widow to elect to take against the will and codicil of the testator.” (258 App. Div. 596, 608.)

On February 4, 1922, the decedent, John J. McGlone, and Helena Day Snyder were married in England. In contemplation of that marriage Helena Day Snyder, on February 2, 1922, signed the paper writing which, it has been held, bars her right to take a share in her husband’s estate. It reads as follows: “ I, Helena Day Snyder, being of sound mind and in possession of all my faculties, on the eve of my marriage to John J. McGlone, in London, England, on February 4th, 1922, wish to record, of my free will, that, as I already possess, in my own right, ample of this world’s goods in the way of a fortune of my own, as a compliment to my aforesaid husband, and for other good and sufficient reasons, I hereby, voluntarily and irrevocably, renounce all right, title and interest I might, legally or otherwise, have in any estate, real or personal, of which my said husband to be, John J. McGlone, might die seized.” She was at that time sixty-two years of age.

The decedent provided as follows for his wife in the third paragraph of his will, which he executed on August 21, 1930: “ Third. My dear wife, HELENA DAY MC GLONE, being in possession of ample funds of her own and having waived all claim of dower or participation in any part of my estate, I nevertheless desire that there shall be paid over to her out of my estate the sum of Two Thousand ($2,000.00) Dollars, or if she should prefer, then at her request instead of the payment of Two Thousand ($2,000.00) Dollars, my executors shall purchase for her and deliver to her any piece of jewelry which she may select costing up to Two Thousand ($2,000.00) Dollars, as a slight token of my love and affection for her and admiration of her noble and high traits of character.”

At the time he executed the will, section 18 of the Decedent Estate Law was not yet in effect and a husband was free to bequeath all his property to strangers. His wife would, in such case, have no right to any share in his estate, though she would have a right of dower in his real property, except as she might have parted with, waived or lost such right of dower.

Thereafter, however, on July 6,1934, the testator executed a codicil to the will of August 21, 1930. He did not therein make any additional provision for his wife or disturb the provision previously made; but since the term will ” as defined in the statute includes all codicils as well as wills (Decedent Estate Law, § 2), his wife, by force of the statute, became entitled upon the execution of the codicil to a right of election to reject the provision made for her in the will and to take her share of the estate as in intestacy.” Then, for the first time, the question became important whether the renunciation by the wife in 1922 of “ all right, title and interest * * * in any estate, real or personal ” of which her husband to be, John J. McGlone, might die seized ” has the effect of barring her from asserting her statutory right of election created by a later statute.

The same section of the statute which creates, for the benefit of the surviving spouse of a decedent, a right not previously enjoyed, also provides the manner in which that right may be waived. The husband or wife during the lifetime of the other may waive the right of election to take against a particular last will and testament by an instrument subscribed and duly acknowledged, or may waive such right of election to take against any last will and testament of the other whatsoever in an agreement so executed, made before or after marriage. An agreement so executed made before the taking effect of this section wherein a spouse has waived or released all rights in the estate of the other spouse shall be deemed to release the right of election granted in this section.” (Decedent Estate Law, § 18, subd. 9.) The statute was intended, it is plain, to deny effect to a waiver not executed in accordance with the statute.

The statute requires that the agreement or instrument of waiver shall be “ duly acknowledged ” as well as subscribed and the instrument of waiver upon which the executors and legatees rely to defeat the right of election claimed by the widow was subscribed but not acknowledged by her. For that reason, as well as on other grounds, the Surrogate found that the instrument was without effect. The reversal by the Appellate Division is based upon its conclusion that in so far as the statute denies effect to an unacknowledged agreement of waiver or renunciation, previously executed which, even without acknowledgment, was valid at the time it was executed, the statute violates the testator’s constitutional rights guaranteed by article I, section 10, of the Constitution of the United States and by article I, section 6, of the Constitution of this State, and is, therefore, void. The Appellate Division rejected, for reasons stated in the opinion, the other grounds upon which the Surrogate based his conclusion that the waiver was ineffective.

We have examined these other grounds and without now deciding whether all of them are without substance we assume that the Appellate Division did not err in rejecting them; but we are constrained to disagree with the conclusion of the Appellate Division that the testator acquired by the instrument, executed in 1922 in contemplation of marriage, contractual rights, protected by the Constitution of the United States, which have been invaded by the new statute. We may assume, without now deciding or even considering such questions further, that the instrument of waiver, though unilateral in form, evidences a contract made between persons in contemplation of marriage ” within the meaning of section 53 of the Domestic Relations Law (Cons. Laws, ch. 14); that it is executed in manner which satisfies the requirements of section 31 of the Personal Property Law (Cons. Laws, ch. 41); and that any contractual rights created by that instrument are within the protection of the constitutional guaranty that the State may not impair the obligations of contracts or take property without due process of law. That brings us to the question: what are those contractual or property rights which it is said are destroyed by the new statute?

Whatever be the extent of those contractual rights they did not include the right of the husband to bequeath his estate to such persons in such amounts as he chose and thus to exclude his wife from any share of his estate. That right was created by the laws of the State of New York, not by contract. The wife did not, of course, waive her right to take any part of the estate of her husband to be ” which he chose to bequeath to her, nor may the instrument be given effect as a waiver of a right of a wife to succeed to the property of her husband, which the Legislature might thereafter create. Since rights of descent and distribution of a decedent’s estate are created by the law of the State, the State may change or take away such rights though it may not take away property which has vested by virtue of such rights. (Matter of Sherman, 153 N. Y. 1; Norris v. Beyea, 13 N. Y. 273.) A wife cannot by agreement make the husband’s right created by law immune from the right of the State to change the law which created the right nor waive in advance a right created for her benefit if the law does not permit such a waiver.

The widow makes here no claim for dower. She asserts no right which, at the time she executed the waiver of her rights in her husband’s property, she might have asserted but for the waiver. The Legislature has determined to restrict the husband’s rights, previously unrestricted, to provide by will how his property should pass at his death. Even then the Legislature did not decree that a will previously executed should not take effect at the testator’s death in accordance with its terms. It decreed only that if a testator chose to execute a new will section 18 of the Decedent Estate Law would apply and that the testator’s spouse would then have rights in the decedent’s estate which the spouse would otherwise not possess. The Legislature did not by such statute destroy any rights which the decedent in this case acquired by the waiver ■— even though we give to such waiver the broadest possible construction and effect. The Legislature, with undoubted power to create for the benefit of the spouse of a testator a new right of succession to property and a new limitation upon the power of a testator to determine the succession or distribution by will, had also undoubted power to protect the newly-created right by a statutory provision that a spouse might not waive the benefit of the right created for his or her benefit except by an instrument executed with the formalities set forth in the statute. Quite probably the testator would not have executed a codicil to the will if he had known that bis widow might, on that account, claim an interest in his estate which she would not otherwise have. That does not, however, give rise to an estoppel or other equitable ground for denying to the wife her statutory right.

The order of the Appellate Division should be reversed and the decree of the Surrogate’s Court affirmed, with costs in this court and in the Appellate Division to all parties filing briefs payable out of the estate.

Loughran, Finch, Rippey, Sears, Lewis and Conway, JJ., concur.

Ordered accordingly.