author: Loughran, J.

text:
    Aaron Bogartz, an Infant, by Jacob Bogartz, His Guardian ad Litem, et al., Respondents, v. Vincent Astor, Respondent. Arcy Doll & Toy Manufacturing Company, Appellants; Travelers Insurance Company, Respondent.
    Argued November 29, 1944;
    decided December 30, 1944.

      Samuel D. Lashy, Harry J. Winick, Joseph J. Grumet and Benjamin Barnett for appellant.
    The provision in section 14-a of the Workmen’s Compensation Law is as the statute denominates it, “ double compensation ”, and is not a fine or penalty for employing a minor. As doubled compensation the amount paid by the lienor-appellant supports the lien. (Workmen’s Compensation Law, §§ 14-a, 29; Matter of Tesar v. National Ventilating Co., 227 App. Div. 333; In re Dearborn Mfg. Corporation, 92 F. 2d 416.)

      Sidney J. Feltenstein for plaintiffs-respondents.
    I. This appeal should be dismissed by this court. The appeal is not an appeal from a final order; ergo, it is not cognizable in this court as a subject of appeal. II. The provisions of section 14-a of the Workmen’s Compensation Law are penal in effect. (Matter of Tesar v. National Ventilating Co., 227 App. Div. 333; Matter of Kast v. Lacona Sand & Gravel Co., 250 App. Div. 679.)

      Frederic J. Locker and E. C. Sherwood for Vincent Astor and another, respondents.
    Appellant is not given a lien by the Workmen’s Compensation Law. (Matter of Tesar v. National Ventilating Co., 227 App. Div. 333; Matter of Kast v. Lacona Sand & Gravel Co., 250 App. Div. 679.)
   Loughran, J.

.Section 14-a of the Workmen’s Compensation Law says in part:

“ Double compensation and death benefits for minors illegally employed.
‘ ‘ 1. Compensation and • death benefits as provided in this article shall be double the amount otherwise payable if the injured employee at the time of the accident is a minor under eighteen years of age employed, permitted or suffered to work in violation of any provision of the labor law or in violation, of any rule heretofore or hereafter adopted by the [State industrial] board pursuant to subdivision eleven of section one hundred and forty-six of said law.
“ 2. The employer alone and not the insurance carrier shall! be liable for the increased compensation or increased death benefits provided for by this section. Any provision in an, insurance policy undertaking to relieve an employer from such increased liability shall be void.”

This case presents questions as to the nature of the extra payment so prescribed.

In September, 1941, a minor, who was then seventeen years old, was employed by a manufacturing concern whose business was carried on in premises owned by one Astor. In the course of such employment, the minor was injured through Astor’s negligence and thereupon the insurance carrier of the employer paid to the minor an award of workmen’s compensation. The employment of the minor was a violation of subdivision 1 of section 131 of the Labor Law. Consequently a further sum equal to the amount of the award was paid by the employer to the minor pursuant to the above words of section 14-a. .

Thereafter the minor sought recovery of his damages from Astor in a third party action. When that litigation had been settled for $9,000, the employer filed against the proceeds of the settlement a lien for the sum by which the employer had increased the amount that the minor received from the insurance carrier. At the instance of the minor, this lien was vacated by the court at Special Term. The Appellate Division affirmed by a divided vote and the employer then brought the case here.

In the view of the courts below, the additional payment exacted by section 14-a is in the nature of a penalty which — for the sake of the general safety of minors —■ ought under all circumstances to be borne by the employer. (182 Misc. 214.) But section 14-a says nothing of that kind. On the contrary, section 14-a speaks of “ double compensation ” and “ increased compensation; ” and this word “ compensation ” is in the statute said to mean a ‘ ‘ money allowance payable to an employee or to his dependents as provided for in this chapter ”. (Workmen’s Compensation Law, § 2, subd. 6.)

The lien upon this minor’s recovery against Astor was asserted by the employer on the strength of section 29 of the Workmen’s Compensation Law. It is thereby provided that an employee, who has been wrongfully injured by another not in the same employ, may pursue his remedy against such other subject to the provisions of the statute. “ In such casé [says section 29], the state insurance fund, if compensation be payable therefrom, and otherwise the person, association, corporation or insurance carrier liable for the payment of such compensation, as the case may be, shall have a lien on the proceeds of any recovery from such other, whether by judgment, settlement or otherwise, after the deduction of the reasonable and necessary expenditures, including attorney’s fees, incurred in effecting such recovery, to the extent of the total amount of compensation awarded under or provided or estimated by this chapter for such case and the expenses for medical treatment paid or to be paid by it and to such extent such recovery shall be deemed for the benefit of such fund, person, association, corporation or carrier ” (The emphasis is ours).

In the light of the foregoing provisions, the extra payment required by section 14-a cannot be conceived of as a mere pecuniary punishment of the employer or indeed as anything essentially different from the other monetary benefits secured by the statute to workmen and their dependents. Our decision in Matter of Molnia v. Kaplan & Co. (293 N. Y. 700) was of like purport.

To our minds, there is nothing strange in calling upon an injured employee to make full restoration of workmen’s compensation received by him, in ease he is thereafter made whole through recovery from a third party for the same injury. But whether strange or no, such is the plain requirement of the statute and that is an end of the controversy. (See Matter of McNerney v. City of Geneva, 290 N. Y. 505.)

The orders should be reversed, with costs, and the motion denied. (See 293 N. Y. 763, 294 N. Y. 664.)

Lehman, Oh. J., Rippey, Lewis, Conway, Desmond and Thacher, JJ., concur.

Orders reversed, etc.


source: Caselaw Access Project

author: Thacher, J.

license: Public Domain

text:
    Rollin Browne et al., Constituting the State Tax Commission, Respondents, v. Case, Pomeroy & Company, Inc., et al., Appellants.
    Argued November 30, 1944;
    decided December 30, 1944.

      Seth T. Cole, Raymond B. Goodell, Martin Saxe, Roger R. Anderson and Lloyd D. Keigwin for appellants.
    I. There was no transfer by defendant Cunthert to defendant Case, Pomeroy & Company, Inc., of legal title to, or of any interest whatsoever in, the stock and there is consequently no liability for stock transfer tax. (People ex rel. Hatch v. Reardon, 184 N. Y. 431; U. S. Radiator Co. v. State of New York, 208 N. Y. 144; Bonbright & Co. v. State of New York, 165 App. Div. 640; Johnson v. Underhill et al., 52 N. Y. 203; International Paper Co. v. State of New

      York, 210 App. Div. 353, 241 N. Y. 535.) II. The decision in Travis v. Ann Arbor Co. (227 N. Y. 640) is not controlling. (Bing v. People, 254 N. Y. 484; Matter of De Rycke, 99 App. Div. 596.)

      Nathaniel L. Goldstein, Attorney-General (Arthur W. Matt-son, Wendell P. Brown and Marvin P. Lazarus of counsel), for respondents.
    I. The indorsement and delivery of the stock transferred title to Case, Pomeroy & Company, Inc. (Travis v. Ann Arbor Co., 180 App. Div. 799, 227 N. Y. 640; Bonbright & Co. v. State of New York, 165 App. Div. 640; McNeil v. The Tenth National Bank, 46 N. Y. 325; N. Y. & N. N. R. R. Co. v. Schuyler et al., 34 N.Y. 30.) II. Title passed when the stock was indorsed in blank and delivered to Case, Pomeroy & Company, Inc., by the nominee. (Disconto-Gesellschalft v. U. S. Steel Co., 267 U. S. 22; McNeil v. The Tenth National Bank, 46 N. Y. 325; Personal Property Law, § 162 (a); United States v. Lawrence Stern & Co. et al., 89 F. 2d 485; Founders General Corporation v. Hoey, 84 F. 2d 976, 300 U. S. 268; Raybestos Manhattan Co. v. U. S., 296 U. S. 60; Loeb v. State of New York, 176 Misc. 970; Champney v. Blanchard, 39 N. Y. 111; Matter of Mills, 172 App. Div. 530; Southern Carbon Co. v. State of New York, 171 Misc. 566, 258 App. Div. 1004.) III. The transaction involved herein is taxable. (Travis v. Ann Arbor Co., 180 App. Div. 799, 227 N. Y. 640.)
   Thacher, J.

This is an appeal by the defendant Case, Pomeroy & Company, Inc. (hereinafter referred to as Case, Pomeroy), dealers in securities, and the defendant John C. Grunthert, an employee of Case, Pomeroy, from the unanimous judgment of the Appellate Division, third department, entered upon the submission of a controversy oil an agreed statement of facts, in favor of the plaintiffs and against defendants, for thirty dollars, the amount of a transfer tax claimed by the plaintiffs to be due upon the transaction which is recited in the agreed statement of facts. The opinion of the Appellate Division held that the tax was payable pursuant to the provisions of section 270 of the Tax Law as it read on July 15, 1935, the date of the transaction in question. The agreed statement of facts discloses:

In the course of its business, Case, Pomeroy from time to time purchased or subscribed for stocks and sold stocks for its own account, and it was the common practice to cause the stocks which it acquired to be issued in, or transferred of record into, the name of its nominee so that the stock should be available for delivery in form not open to objection by any purchaser or transferee. Under the rules of the New York Stock Exchange stock recorded in the name of a corporation must be accompanied by papers sufficient to show the evidence of authority of the corporate officers assigning the stock; hence the practice of carrying securities in “ street ” names.

The defendant John C. Gunthert was used by Case, Pomeroy as one of its nominees for this purpose, and at the time of the transactions hereafter referred to Case, Pomeroy held in its possession detached stock powers in standard form which had theretofore been duly executed in blank by the defendant Gunthert for the purpose of attachment to any certificate for stock that might be acquired by Case, Pomeroy and issued in or transferred of record into the name of Gunthert.

On July 11, 1935, Case, Pomeroy bought at its New York office through New York brokers 1,000 shares of Texas Pacific Coal & Oil Company common stock for its own account for delivery under the rules of the New York Stock Exchange on July 12, 1935, and on that day received delivery of ten certificates for 100 shares each of Texas Pacific Coal & Oil Company common stock indorsed in blank. These certificates were received by one of its clerks other than the defendant Gunthert, who stamped Gunthert’s name in the blank assignment on the back of the certificates, made a record thereof in Case, Pomeroy’s office and sent the certificates to the transfer agent of the Texas Pacific Coal & Oil Company for transfer into the name of John C. Gunthert. It is agreed that the tax upon said transfer was duly paid by the seller, and under the terms of the submission we are not concerned with the transfer into Gunthert’s name.

Thereafter, on July 15th, Case, Pomeroy received from the transfer agent ten certificates for common stock of Texas Pacific Coal & Oil Company for 100 shares each in the name of the defendant John C. Gunthert, representing the shares transferred as aforesaid. These certificates were received by a clerk of Case, Pomeroy who entered upon the blotter the numbers of the certificates so received, noted their receipt from the transfer agent, filled in on a blank form of declaration the number of shares represented by each certificate and the certificate numbers and immediately procured from the defendant Gunthert his signature upon the declaration and upon the form of assignment on the back of each certificate, so that the certificates could be delivered by Case, Pomeroy to any purchaser or transferee in a form not open to objection without the use of the detached stock powers which had already been executed in blank by Gunthert as nominee before the purchase was made. The declaration thus executed by Gunthert declares that the certificates were not purchased with funds belonging to him; that they were not his property either directly or indirectly, were subject to the control of Case, Pomeroy and had been assigned and delivered to it prior to the execution of the declaration. It further declared that he never had had and did not then have any personal or beneficial interest in the stock and that the dividends thereon or the rights in respect thereof, if any, as well as any proceeds arising from the sale thereof, did not in any manner belong to him but were subject to the order and control of Case, Pomeroy. No transfer tax was paid because of these acts of John C. Gunthert.

Thereafter on July 15, 1935, the certificates so indorsed were placed in the safe deposit box of Case, Pomeroy, where they remained until September 30, 1935, at which time the 1,000 shares of stock were sold by Case, Pomeroy and said certificates were delivered to the purchaser’s broker. Upon this sale the full amount of stock transfer taxes was paid by Case, Pomeroy.

The signing of the detached powers and the declaration and the indorsement of the certificates by Gunthert were all in accordance with the established practice, pursuant to which the stock of the Texas Pacific Coal & Oil Company would in ordinary course be transferred into the name of Gunthert, and were m accordance with a pre-existing arrangement between Case, Pomeroy and Gunthert that the recording of such certificates in Gunthert’s name should confer no rights whatsoever upon him with respect to such certificates or the stock represented thereby.

A tax upon the transfer into the name of Gunthert having been fully paid by the seller and a second tax upon the sale and delivery of the certificates in September having been paid, this controversy relates only to the claim of the plaintiffs that an additional transfer tax is required to be paid because of the acts of Gunthert in executing the declaration disclaiming any interest in the certificates and in executing the assignment on the back of each certificate.

In Travis v. Ann Arbor Co. (180 App. Div. 799, affd. without opinion 227 N. Y. 640), the defendant became the owner of more than 50,000 shares of the capital stock of the Ann Arbor Railroad Company, the certificate for these shares having been issued in the name of its nominee, by whom it had been indorsed in blank. This nominee having removed from the State the defendant directed the transfer agent of the stock of the Railroad Company to cancel the certificate and issue a new certificate in the name of another nominee, who immediately indorsed the new certificate in blank and left it with the transfer agent, where it remained subject to the order of the defendant. This nominee gave no consideration for the certificate and assumed to exercise no rights over it except as directed by the board of directors of the defendant, and there was in fact no change in the beneficial ownership of the shares represented by the certificate since the original acquisition thereof by the defendant. No tax was paid upon the cancelation of the certificate standing in the name of the original nominee and the issuance of the new certificate in the name of the subsequent nominee or upon his indorsement thereof in blank. In the Appellate Division it was held that when the defendant caused the certificate of stock owned by it to be canceled and a new certificate of stock to be issued in the name of the second nominee, it thereby caused the legal title to the stock to be transferred to him; and when he indorsed the certificate of stock in blank and left it with the trust company for the defendant, he transferred the legal title to the stock to whomsoever might be the holder thereof. Accordingly judgment was directed in favor of the plaintiff for the amount of the tax.

Counsel for the appellants attempt to distinguish the facts in the Travis case (supra) from the facts in the case at bar, contending that all that Gunthert ever had was so-called “ appearance of title ” on the books of the corporation (Bonbright & Co. v. State of New York, 165 App. Div. 640, 645), pointing out that the notable fact in this case is that this mere appearance of title continued in Gunthert until the stock was later sold by Case, Pomeroy, and that the irrevocable stock powers, executed in blank by Gunthert before Case, Pomeroy acquired the shares, eo instante upon the transfer of the stock into the name of Gunthert gave Case, Pomeroy every title and right which might otherwise have been transferred, as in the Travis case, by the subsequent indorsement of the certificates in blank by Gunthert. That indorsement in this case, it is contended, did not enlarge by one iota the title or rights of Case, Pomeroy with respect to the shares or the certificates; it did not, it is contended, transfer to Case, Pomeroy any beneficial interest or any right to possession or use or any legal title or appearance of title which Case, Pomeroy did not already have.

In the Travis case the second nominee was invested with no beneficial interest and never had possession or use of the certificates, but the legal title was transferred to him and from him by the acts upon which each of two taxes was imposed, for there was a transfer to the second nominee on the books of an unqualified title which was qualified by his later assignment in blank. But in this case the agreed statement of facts eliminates from our consideration the “ transfer of the stock * * * into the name of John C. Gunthert ” and recites, the tax upon said transfer having been duly paid by the seller.” Perhaps the transfer of the record title into the name of the nominee could have been taxed, in addition to the transfer from the seller by delivery of certificates indorsed in blank to Case, Pomeroy, but as we read the submission, that question is not here and to sustain the tax we must hold that the mere signature of the assignment upon the back of the certificate and the declaration signed by the nominee resulted in a taxable transfer.

The following words of section 270 of the Tax Law are controlling: “ 1. There is hereby imposed and shall immediately accrue and be collected a tax, as herein provided, on * * * all deliveries or transfers of shares or certificates of stock • * * whether made upon * * * ang whether investing the holder with the beneficial interest in or legal title to said stock, or other certificates taxable hereunder, or merely with the possession or use thereof for any purpose, or to secure the future payment of money, or the future transfer of any such stock, or certificates * * * [of] one and one-half cents for each and every share * * * (Emphasis supplied.) The transfer must be characterized by one of these named alternatives. It must invest the transferee with a beneficial interest or with legal title or at least with possession or use for some purpose, unless it is made to secure the future payment of money or the future transfer of stock or certificates. The declaration and the assignment obviously were not made to secure the payment of money or the transfer of anything. In fact they transferred no beneficial interest, for the corporation owned all such interest, nor any possession or use and left the legal title precisely where it was before the documents were executed.

The judgment should tie reversed and judgment directed for the defendants as prayed for in the submission, with costs in this court.

Lehman, Oh. J., Loughban, Rippey, Lewis, Conway and Desmond, JJ., concur.

Judgment accordingly.


author: Rippey, J. Desmond, J.

text:
    Margaret Walsh, Respondent, v. James P. Keenan, Appellant, et al., Defendants.
    Argued November 15, 1944;
    decided December 30, 1944.

      P. Augustus Hopkins for appellant.
    The lower court erred • in its construction of the pertinent statute and in its interpretation of the effect of the presumption arising upon the “ making ” of a joint account. (Banking Law, § 239, subd. 3; Matter of Buchanan, 184 App. Div. 237; Hayes v. Claessens, 189 App. Div. 449; Schultz v. Dry Dock Savings Institution, 135 Misc. 343; Matter of Curran, 153 Misc. 630; Matter of Carlin, 134 Misc. 596; Matter of Glen, 157 Misc. 753, 272 N. Y. 530; Matter of McKelway, 221 N.Y. 15.)

      Albert Orenstein for respondent.
    I. Upon the creation of the joint account, plaintiff became immediately vested with the moiety or one-half interest, which was irrevocable. (Moskowitz v. Marrow, 251 N. Y. 380; Marrow v. Moskowitz, 255 N. Y. 219; Matter of Suter, 258 N. Y. 104; Matter of Juedel, 280 N. Y. 37;
      Matter of Porianda, 256 N. Y. 423; Matter of Hoffman, 175 Misc. 607; In re Haggerty’s Estate, 38 N. Y. S. 2d 433; Gardner v. Henderson, 35 N. Y. S. 2d 439; In re Lorch’s Estate, 33 N. Y. S. 2d 157; Matter of McKelway, 221 N. Y. 15.) II. Decedent could not affect the rights of plaintiff by withdrawing the moneys in the joint account created on August 21,1940, without plaintiff’s consent. (Moskowitz v. Marrow, 251 N. Y. 380; Marrow v. Moskowitz, 255 N. Y. 219; Matter of Suter, 258 N. Y. 104; Gardner v. Henderson, 35 N. Y. S. 2d 439; In re Lorch’s Estate, 33 N. Y. S. 2d 157; Matter of McCarthy, 164 Misc. 719.)
   Rippey, J.

Plaintiff seeks in this action to recover from defendants her alleged one-half interest in a bank account No. 419660 claimed by her to have been opened in the Onondaga County Savings Bank on August 21, 1940, by Kate D. O’Brien in her name and in that of her sister, the plaintiff, with a provision that ‘ ‘ either or survivor may draw. ’ ’ As will later appear no new account was opened by plaintiff or Miss O’Brien at that time or in that form at any time after March 22, 1929.

As ground for recovery, plaintiff alleged in her complaint that the defendant Keenan, without her consent or knowledge, but with knowledge of her rights and with the design, purpose and interest of defrauding and depriving her of her rights as joint owner of the account, fraudulently induced Miss O’Brien to close the joint account and to deposit the funds to the joint account of her sister and defendant who thereafter withdrew moneys therefrom without the knowledge of Miss O’Brien or of plaintiff for his own use so that the deposit in that account was reduced to $1,253 at the time of the death of Miss O’Brien which occurred on February 26,1942. The trial court correctly found that the gravamen of the cause of action was fraud or fraudulent inducement in that the defendant wrongfully defrauded or deprived plaintiff of her rights and that she failed to offer any evidence in support of those allegations and failed to establish any action in fraud. Nonetheless, the court did not, upon defendant’s motion, dismiss the complaint for lack of proof but proceeded to decide the case in favor of the plaintiff upon the record as presented on the theory that plaintiff, by force of the provisions of subdivision 3 of section 239 of the Banking Law, became the owner of one-half of the account in question as joint tenant with Miss O’Brien as of the time the latter added her name as a joint owner, that her title thereto could not be divested by Miss O’Brien withdrawing the whole deposit on July 31, 1941, and that, though no fraud was involved or knowledge on the part of defendant of her previous relation with the account shown, she could follow the moneys so withdrawn by Miss O’Brien into the defendant’s hands. No amendment of the complaint was made to present any such theory. Yet the parties here presented the case upon the facts as found by the trial court and it is upon those facts so found and affirmed by the Appellate Division that we must rest our decision. We have concluded that the historical background of the bank account in question, its origin, control, changes and use, the situation and relationship of the parties and the circumstances surrounding the alleged creation of the so-called joint account, as found by the trial court upon sufficient evidence and affirmed by the Appellate Division, necessarily, as matter of law, fail to sustain the conclusions reached by the lower courts.

Prior to March 22, 1929, Kate D. O’Brien, then being about seventy years of age, took up her residence with plaintiff, transferring to the latter $2,000 in cash for her subsequent care and maintenance. She then had a deposit account in the defendant bank of her own moneys in her sole name of $4,069.73. On or about that date, she closed that account and opened a new account in her name and in that of plaintiff and provided that “ either or survivor may draw.” Though the bank had signature cards of both, plaintiff never had possession of the bank book or any control over or use of the account. On October 8, 1930, Miss O’Brien withdrew the then balance in the bank and opened a new account in her sole name with a new book which she retained in her possession. On August 21, 1940, Miss O’Brien requested the bank to add the name of plaintiff to the account' as it then stood on the books of the bank which was done with the words “ either or survivor may draw ” but no signature card for plaintiff was filed and Miss O’Brien continued to retain exclusive possession of the deposit book and exclusive control and dominion over the account. There was then on deposit $3,468.29. Significantly, no claim is made by plaintiff to any interest in the moneys by reason of the creation of the joint account in 1929 or the change in the title to and form of the account in 1930. She thus waived any claim to any moneys in either account or, at least, is estopped to deny that each account was opened for the convenience and use of Miss O’Brien only and that neither party had any intent to create a joint ownership in either deposit account.

On July 31,1941, Miss O’Brien withdrew the balance amounting to $3,447.22 and opened a new account in the name of herself and James E. Keenan, the son of James P. Keenan, the defendant who is her nephew. The defendant had taken her to his home to live upon the request of plaintiff that she be removed by defendant from plaintiff’s home. The bank never had a signature card for J ames E. Keenan nor did he ever have possession of the bank book or exercise any control over that account. She Avithdrew $200 from that account and gave it to her grandnephew for tuition in a seminary. On August 29, 1941, the bank, at the request of Miss O’Brien, closed that account and again opened an account with the then unused balance of $3,247.22 in her name alone. To affect that change, she then Avrote the bank I would like to have this other name taken off my book as I don’t want only my own on it ”. She subsequently issued a check on the account to the order of the CrouseIrving Hospital, where she was receiving care and treatment, for $188.90. On October 4, 1941, while she was still at the hospital, she issued a check for the balance of the deposit to her nephew, James P. Keenan, or to his order, and he opened an account in his name and in her name with the provision that either or survivor may draw,” Subsequently moneys were withdrawn for her care, support, maintenance, medical bills, other needs, and funeral expenses. It Avas found, however, that defendant never withdrew or had for his own personal use any of the moneys "from any of the accounts. When Miss O’Brien died, there was a balance in die last account of $1,279.14. nevertheless, the court has found that defendant must contribute to plaintiff out of his own funds $501.57, to make up the balance with interest of one-half of the moneys in the bank to the credit of Miss O’Brien and plaintiff on August 21, 1940, and pay the costs of the action.

Section 239, subdivision 3 (formerly § 249, subd. 3),"of the Banking Law reads as follows: When a deposit shall be made by any person in the names of such depositor and another person and in form to be paid to either or the survivor of them, such deposit and any additions thereto made by either of such persons after the making thereof shall become the property of such persons as joint tenants, and, together with all dividends credited thereon, shall be held for the exclusive use of such persons and may be paid to either during the lifetime of both or to the survivor after the death of one of them, and such payment and the receipt or acquittance of the one to Whom such payment is made shall be a valid and sufficient release and discharge to the savings bank for all payments made on account of such deposit prior to the receipt by the savings bank of notice in writing not to pay such deposit in accordance with the terms thereof. The making of the deposit in such form shall, in the absence of fraud or undue influence, be conclusive evidence, in any action or proceeding to which either the savings bank or the surviving depositor is a party, of the intention of both depositors to vest title to such deposit and the additions thereto in such survivor.”

In interpreting that section, this court held in Moskowitz v. Marrow (251 N. Y. 380) as stated in Matter of Porianda (256 N. Y. 423), that the statute sets up two presumptions: (1) that a deposit made in the names of the depositor and another person ‘ in form to be paid to either or the survivor of them ’ becomes ‘ the property of such persons as joint tenants ’ ” and (2) that title passes to the survivor; that the first presumption is not •conclusive and may be overcome by proof that the depositor, when making the deposit, had no intention to create a joint tenancy ”, and that the second presumption, “ where applicable, is irrefutable by proof, and, therefore, a rule of substantive law * * * is limited to the moneys still on deposit in the savings bank, credited to the depositors under the original formula payable to either or the survivor ’ ”, is not' applicable “ in respect of any moneys withdrawn by either during life ” and applies, only ‘ in favor of the survivor in respect of any moneys then left in the account. ’ ” The foregoing construction was reap-proved in Matter of Juedel (280 N. Y. 37) where the court added that as to moneys withdrawn from the account in the lifetime of the deceased depositor the statute still left room for competent evidence ‘ that the tenancy created at the opening of the account was in truth something different from the tenancy defined by the presumption ’ ”, citing Marrow v. Moskowitz (255 N. Y. 219, 222). The second presumption has no application to the account to which plaintiff’s name was added on August 21,1940, since there were no moneys left in that account at the time of the death of the deceased.

The trial court held that there was no competent evidence produced to vary the effect of the first presumption, and yet the very sequence of events surrounding the deceased’s bank accounts compels the conclusion that the deceased never intended and that plaintiff never understood or believed that the change in Miss O’Brien’s bank account by adding thereto the name of plaintiff on August 21, 1940, in the statutory pattern was then and there and without more to endow the plaintiff with a vested property interest in the deposited moneys as against her (Matter of Juedel, supra). Here the deceased, an elderly lady, at the time of the making of the change in the account was residing with her sister, the plaintiff. Plaintiff never had access to the passbook and the bank never had her signature card on this account. Additionally, during the same month that deceased left her sister’s residence, the deceased had the account changed back to her own name and that of her grandnephew, with whose people she was residing. After she left her nephew’s premises she again changed the account back to her own name. While she was still, in the hospital and prior to her return to her nephew’s premises, she drew a check for the full amount then standing in her account which was deposited by him in a joint account in her name and his. Such evidence and findings that the deceased at all times withheld from the plaintiff all dominion over the account and exercised full control and power of disposition as sole owner thereof, retaining the bankbook in her own possession, without which the plaintiff could have no enjoyment of the joint account (Banking Law, § 238, subd. 3) with the other findings of fact compels a conclusion as a matter of law that the deceased at no time regarded, the tenancy between her and her sister as joint. Tinder these circumstances, the evidence as to complete and uncontested dominion exercised by the deceased over these accounts, in which she deposited her own funds prior to her death, destroyed the statutory presumption, which was nothing but a rebuttable implication of title which in this case .conflicts with the acts of the deceased in dealing with her own property (Moskowitz v. Marrow, supra; Matter of Juedel, supra, p. 42). Clearly the tenancy created at the opening of the account was in truth something different from the tenancy defined by the presumption (Marrow v. Moskowitz, supra).

Plaintiff’s failure upon the trial to establish by proof the allegations of fraud as to the opening of the joint account of defendant and Miss O’Brien on October 6,1941, gives defendant absolute title to the balance of the joint account by operation of the irrebuttable presumption created by the statute (Banking Law, § 239, subd. 3); Matter of Porianda, supra; Marrow v. Moskowitz, supra). The plaintiff cannot proceed to collect from defendant moneys that were in any of the accounts prior to the date of Miss O’Brien’s death.

The judgments should be reversed and the complaint dismissed, with costs in all courts.

Desmond, J.

(dissenting). The suit is brought by plaintiff Margaret Walsh to establish her rights in a bank account opened on August 21, 1940, in the Onondaga County Savings Bank. On that date the Bank, pursuant to instructions from plaintiff’s sister, Kate D. O’Brien, now dead, transferred $3,468.29 from another account then standing in the name of Kate D. O’Brien to a new account in the names of herself and plaintiff. The new account was set up in this form: “ Miss Kate D. O’Brien or Mrs. Margaret Walsh, either or survivor may-draw.” The use of that particular language carried important consequences. “ When a bank account is opened in the form prescribed by statute (Banking Law, § 249, subd. 3), a presumption at once arises that the interest of the depositors is that of joint tenants ” (Marrow v. Moskowitz, 255 N. Y. 219, 221). As to any moneys withdrawn from such an account during the joint lives of the two named persons, there is still, after the death of either of them, the presumption that the moneys so withdrawn by one had in fact belonged to both. (Moskowitz v. Marrow, 251 N. Y. 380, 397; Marrow v. Moskowitz, supra; Matter of Porianda, 256 N. Y. 423, 426; Matter of Juedel, 280 N. Y. 37, 42.) “ The withdrawal of moneys from the joint account does not destroy the joint tenancy, if one was created; it merely opens the door to competent evidence, if available, that no joint tenancy was originally intended or created ” (Matter of Porianda, supra, p. 426). If the fact be, as in this case it has been found to be by both courts below, that a joint tenancy was intended and created, then, obviously, neither owner can destroy the joint tenancy by drawing out the funds. “ It would be preposterous to claim that an appropriation of personal property by one joint owner to his personal use could divest the interests of the other joint owner ” (O’Connor v. Dunnigan, 158 App. Div. 334, 336, affd. 213 N. Y. 676, quoted in Moskowitz v. Marrow, supra, p. 394). One joint tenant cannot be “ ousted from such tenancy ” by the act of the other in drawing out moneys. (Matter of Klenk, 165 App. Div. 917, affd. 214 N. Y. 715.)

Such is the law as long settled by the courts. Let us apply it to the history of this joint account opened in the name of these two sisters in 1940. About a year after that opening, Kate D. O’Brien took it upon herself to draw out all the money without the knowledge or consent of plaintiff, her sister. With the money so withdrawn, Kate D. 0 ’Brien set up, or attempted to set up, a new joint account in the name of herself and a grandnephew, James E. Keenan. Later she made various other changes and transfers. At her death in February, 1942, there was left in the bank, in the joint names of Kate D. O’Brien and her nephew James P. Keenan a balance of $1,245.14, plainly shown to be part of the $3,468.29 which had originally been in the joint account of plaintiff and Kate D. O’Brien. The nephew says that he is the survivor of himself and Kate D. O’Brien and thus, by conclusive presumption of the statute, shown to be the owner of the balance. Plaintiff says that she is entitled to the benefit of the presumption that the moneys deposited in 1940 ($3,468.29) were the property of herself and Kate D. O’Brien. She asserts, and the courts below have properly held, that Kate D. 0 ’Brien did not, and could not, dispose of plaintiff ’s half interest in the account merely by taking it out of the bank and handing it back to the bank under different names. The trial court found as a fact that the July 1940 opening of that account created a true joint account. The Appellate Division affirmed that finding of fact. We cannot reverse unless the statutory presumption has been overcome conclusively, beyond doubt, and as matter of law, by evidence in this record. (See discussion in Matter of Juedel, supra, 280 N. Y. at p. 42.) Not only was there here no such conclusive showing against the presumption; there was no evidence of any kind whatever that the original intention was not to create a joint estate in the fund. Defendant Keenan’s request for a finding to that effect was refused. Indeed, beside the presumption of joint tenancy, there is considerable real proof that' such was the purpose of the 1940 transaction. Plaintiff was Kate D. O’Brien’s only sister. Plaintiff had cared for and nursed Kate D. O’Brien for years when the latter lay sick at plaintiff’s home. Plaintiff’s daughter testified to Kate-D. O’Brien’s instructions as to opening the joint account in 1940. No witness or no fact spoke the other way. On such a record we cannot possibly overturn the findings of fact below in favor of plaintiff.

While plaintiff was plainly entitled to a determination in her favor, the judgment is, however, too large and should not have run against Keenan. As aforesaid, the 1940 bank account in which plaintiff has established her joint ownership, was in the original amount of $3,468.29. The courts below awarded plaintiff half thereof, or $1,734.14, plus the bank interest thereon, totalling $1,780.71. There was, however, only $1,279.14 left in the bank at Kate D. O’Brien’s death, so the judgment was that the bank pay plaintiff the $1,279.14 balance and that defendant Keenan, the nephew, pay the difference of $501.17. Keenan has appealed. The recovery against him was based on findings that before Kate D. O’Brien’s death, he (defendant Keenan) drew out a total of $1,845. But there are other unreversed findings to the effect that all those withdrawals by Keenan were for the benefit of, or at the direction of, Kate D. O’Brien, and were not for any purposes of Keenan’s. Those ¡ withdrawals ■were, therefore, the acts of Kate D. O’Brien through Keenan acting only as her agent. Keenan did not commit any actionable wrong against plaintiff and is not accountable to her. The judgment should be modified by striking out so much thereof as orders defendant Keenan to make any payment, and as so modified, should be affirmed, without costs.

Lewis, Conway and Thachee, JJ., concur with Rippey, J., Desmond, J., dissents in opinion in which Lehman, Oh. J. and Lottghean, J., concur.

Judgments reversed, etc.


author: Conway, J.

text:
    In the Matter of Alfred Geiffert, Jr., Appellant, against Carroll E. Mealey et al., Constituting the State Tax Commission, Respondents.
    Argued November 29, 1944;
    decided December 30, 1944.

      Elliot F. Glassierg for appellant.
    I. Petitioner, a landscape architect, is engaged in the practice of a profession within the meaning of section 386 of the Tax Law. (United States v. Laws, 163 U. S. 258.) II. The intent of section 386 and the decided cases is to regard work of the ldnd done by petitioner as a profession and therefore exempt from taxation under article 16-A of the Tax Law. (People ex rel. Tower v. State Tax Commission, 282 N. Y. 407; Matter of Teague v. Graves, 261 App. Div. 652, 287 N. Y. 549.)

      Nathaniel L. Goldstein, Attorney-General (John C. Grary, Jr., Orrin G. Judd, Wendell P. Brown and Henry S. Manley of counsel), for respondents.
    The exemption from taxation under article 16-A of the Tax Law, of income from the practice of certain unspecified professions in certain cases, is to be strictly construed; petitioner has not sustained the burden of bringing himself within, it. (People ex rel. Tower v. State Tax Commission, 282 N. Y. 407; Matter of Teague v. Graves, 261 App. Div. 652; Matter of DeVries v. Graves, 266 App. Div. 1030, 292 N. Y. 529.)
   Conway, J.

This is a proceeding under article 78 of the Civil Practice Act, to review a determination of the State Tax Commission imposing unincorporated business taxes upon petitioner for the years 1938, 1939 and 1940, under Tax Law, article 16-A.

The petitioner is a landscape architect and the question presented for our determination is whether that calling, as practiced by petitioner, may be termed a profession within the meaning of Tax Law, section 386. That section, in part, provides that words “ unincorporated business ” exclude “ the practice of law, medicine, dentistry, architecture which under existing law cannot be conducted under corporate structure, and any other case in which more than eighty per centum of the gross income is derived from the personal services actually rendered by the individual or the members of the partnership or other entity in the practice of any other profession and in which capital is not a material income producing factor.” (Emphasis supplied.)

It is conceded that petitioner uses no capital save for office equipment, payment of salaries and office rent in advance of collection of his fees, and it is not contended that petitioner’s income as landscape architect is derived from sources other than personal services. Finally, it is frankly acknowledged that the “ skill of the petitioner, and the importance of the projects upon which he has worked, are unquestioned upon the present record. ’ ’ For the purpose of this opinion, it will be unnecessary to list the projects. Thus the sole question presented is whether landscape architecture is one of the other ” professions contemplated by the statute.

The petitioner was a pioneer in the field. Now a number of universities and colleges, some in the East and some in the West, have formal courses of study leading to degrees in landscape architecture. 'Among those in the east are Harvard, Cornell, Pennsylvania State, Ohio State and University of Illinois. There are three others on the Pacific Coast, whose names were not given in the testimony. Two degrees are obtainable, depending upon the institution of learning, namely, Bachelor of Science in Landscape Architecture and Master of Landscape Architecture. We quote a description of the course of study leading to the degree of Bachelor of Landscape Architecture at Cornell University, as outlined by one of the witnesses: The course is a five year one given under the College of Architecture. The studies of landscape architecture take in the identical courses with the architect school through the first two years and the third year they start specializing in more or less landscape architecture planting# as well as courses in civil engineering under the College of Engineering, which comprise surveying, mechanics, concrete construction. Along with that goes a course in physics, chemistry, geometry, calculus and several other mathematical sources [courses] which I do not remember. • We also studied under the College of Horticulture. The balance of the course we studied history of architecture, history of landscape architecture ; naturally languages and throughout the designated course we took problems similar to the same problems as architects do. That, in brief, gives you the general description of the course.” (Emphasis supplied.) Landscape architecture appears to lie between the professions of architecture and engineering and to require familiarity with both.

Petitioner has no degree because none was given when he was pioneering, but that is not important here because of the extent, variety and importance of his work. He has collaborated on the articles on landscape architecture for the Encyclopedia Britannica and the Encyclopedia of Horticulture. He is a member of the American Society of Landscape Architects, and has been secretary and trustee of the national organization of that society as well as president of its Hew York chapter. He has lectured on landscape architecture at Yale, Harvard, Princeton, Cornell and Ohio State Universities.

A general definition of a profession was outlined in People ex rel. Tower v. State Tax Commission (Lewis, J., 282 N. Y. 407), in which we held that customhouse brokers were not exempt from the unincorporated business tax. There we said (p. 412): We find nothing in the record to prove that the service rendered by a customhouse broker requires knowledge of an advanced type in a given field of science or learning gained by a prolonged course of specialized instruction and study. Such a requirement we regard as implicit in the term professional ’ when given its legal application and it is read in its context in the statute here involved.” (Emphasis supplied).

Another definition will be found in the following regulation of the State Tax Commission:

What is a profession? In general, it may be said that a profession includes any occupation or vocation in which a professed knowledge of some department of science or learning is used by its practical application to the affairs of others, either advising, guiding or teaching them, and in serving their interests or welfare in the practice of- an art founded on it. The word implies attainments in professional knowledge, as distinguished from mere skill, and the application of such knowledge to uses for others as a vocation.
The Commission presently recognizes only the following as professions. It will weigh the representations made by or ón behalf of other occupations or vocations when presented: a. Accounting b. Certified shorthand reporting c. Chiropody d. Dental hygiene e. Engineering f. Optometry g. Osteopathy h. Pharmacy i. Physiotherapy j. Teaching k. Veterinary medicine and surgery.” (State Tax Commission, Personal Income Tax Regulations, Manual 40, p. 225.)

We recently weighed “ the representations made by or on behalf of ” industrial designing in Matter of Teague v. Graves (261 App. Div. 652, affd. 287 N. Y. 549). We noted that the activity of industrial designer (engineering) was recognized as a profession in many universities and colleges and that the qualifications of the petitioner in that proceeding measured up to all the standards of a profession. As to the fact that the petitioner there had no degree, the Appellate Division (261 App. Div. at pp. 654-5) used language peculiarly apposite here: The graduates from the universities, institutes and schools who will have scholastic degrees as industrial designers doubtless will be regarded as professional men. It is paradoxical that petitioner and his present associates now engaged in the field, who are lecturing in these courses and teaching these students, should be classified otherwise.”

The Teague case cannot be distinguished from the instant one and is in line with the necessity for recognizing in the law, as in our universities, new professions which have been called into being to take care of modern requirements of our expanding civilization.

The order of the Appellate Division should be reversed and the determination of the State Tax Commission annulled, with costs in all courts.

Lehman, Ch. J., Loughran, Bippey, Lewis, Desmond and Thacher, JJ., concur.

Order reversed, etc.


author: Rippey, J.

text:
    Anna H. Amend et al., as Executors of Anna E. Hoffmann, Deceased, and as Administrators with the Will Annexed of the Estate of George J. Hoffmann, Deceased, Appellants, v. Andrew J. Hurley, Respondent.
    Argued November 21, 1944;
    decided December 30, 1944.

      John P. McGrath, Thomas J. Kavanagh and Joseph A. McNamara for appellants.
    I. Respondent failed to establish any right to relief by way of reformation. (Susquehanna S. S. Co. v. Andersen & Co., 239 N. Y. 285; Walton Water Co. v. Village of Walton, 238 N. Y. 46; Fitzgerald v. Arcade Theatre Co., 153 N. Y. S. 618, 172 App. Div. 932; Salomon v. North British & M. Ins. Co., 215 N. Y. 214; Bernstein v. Kritzer, 253 N. Y. 410; Bloom v. Guardian Life Ins. Co., 264 App. Div. 866; Union Trust Co. v. Boardman, 215 App. Div. 73, 246 N. Y. 627.) II. A mistake to justify reformation must be an excusable mistake. (Hayward v. Wemple, 152 App. Div. 195, 206 N. Y. 692; Metzger v. Ætna Ins. Co., 227 N. Y. 411; 154 West 14th St. Co. v. D. A. Schulte, Inc., 121 Misc. 853, 210 App. Div. 851; Matter of Denison, 255 App. Div. 294, 280 N. Y. 589; Kirsch v. Giglio, 263 App. Div. 882; Metzger v. Ætna Ins. Co., 227 N. Y. 411; Pimpinello v. Swift & Co., 253 N. Y. 159.) III. Respondent’s obligation to make designated payments from profits of the business until June 30, 1945, survived the death of the widow. (Matter of Brown, 242 N. Y. 1; People ex rel. Speyer v. Gilchrist, 219 App. Div. 155, 245 N. Y. 609; Matter of Witkind, 167 Misc. 885; Matter of Buccini v. Paterno Const.
      Co., 253 N. Y. 256; Kernochan v. Murray et al., 111 N. Y. 306; Scheffer v. Erie Co. Savings Bank, 229 N. Y. 50; Francis v. Ferguson, 246 N. Y. 516; Pink v. Title Guarantee & Trust Co., 274 N. Y. 167.) IV. The attempt to create an issue of fraud was without justification. (Isaacs v. Schmuck, 245 N. Y. 77; In re Adams’ Estate, 45 N. Y. S. 2d 494, 48 N. Y. S. 2d 801; Porter v. Commercial Gas. Ins. Co., 292 N. Y. 176; Rothmiller v. Stein, 143 N. Y. 581; Dambmann v. Schulting, 75 N. Y. 55.) V. The Appellate Division erred in granting respondent’s plea for reformation. (Lewitt & Co., Inc., v. Jewelers’ Safety F. Soc., 249 N. Y. 217; Susquehanna S. S. Co. v. Andersen & Co., 239 N. Y. 285; Welles v. Yates, 44 N. Y. 525; Bryce v. Lorillard Fire Ins. Co., 55 N. Y. 240; Conlew, Inc., v. Uhler, 239 App. Div. 380; Matter of White, 182 Misc. 223, 268 App. Div. 759.)

      Lester Kissel, James B. M. McNally, Ghauncey■ B. Garver and Michael J. Be Santis for respondent.
    I. Reformation of the instrument was properly granted to include the omitted provision that payments were to terminate on the death of the widow. The mistaken omission from the written instrument of an important provision of the agreement is ground for reformation. (Pitcher v. Hennessey, 48 N. Y. 415; Born v. Schrenkeisen et al., 110 N. Y. 55; Baird v. Erie R. R. Co., 210 N. Y. 225; MacDonald v. Crissey, 215 N. Y. 609; Susquehanna S. S. Co. v. Andersen & Co., 239 N. Y. 285; Hart v. Blabey, 287 N. Y. 257; Friedman Marble & Slate, Works, Inc., v. Whitcomb, 186 App. Div. 509; Woolf v. Barnes, 46 Misc. 169, Unger v. Weisner, 129 Misc. 363; Albany City Savings Institution v. Burdick, 87 N. Y. 40.) II. Failure of the widow’s attorney to correct the mistake although he had knowledge thereof, compelled reformation of the instrument. (Welles v. Yates, 44 N. Y. 525; Stryker v. Schuyler, 51 Hun 637, 132 N. Y. 547; Trenton Terra Cotta Co. v. Clay Shingle Co., 80 F. 46; Columbian Nat. Life Ins. Co. v. Black, 35 F. 2d 571; Davis v. Reisinger, 120 App. Div. 766; Gillett v. Borden, 6 Lans. 219.) III. Where one of the parties to a contract is laboring under a mistake and the other party is aware of the mistake and takes advantage of it, his conduct is so unconscionable that equity will prevent enforcement of the contract. Thus, aside from any reformation of the instrument, the third defense in defendant’s answer is valid and precludes enforcement of the provision of the instrument in question. (Born v. Schrenkeisen, 110 N. Y. 55; City of New York v. Dowd Lumber Co., 140 App. Div. 358; Barteldes Seed Co. v. Bennett-Sims Mill & Elevator Co., 161 S. W. 399; Everson v. International Granite Co., 65 Vt. 658; Hume v. United States, 132 U. S. 406.) IV. The agreement, as expressed in the written instrument, was of a personal nature and terminated upon the death of the widow. (Lorillard v. Clyde et al., 142 N. Y. 456; Matter of Daly, 58 App. Div. 49; Arming v. Steinway, 35 Misc. 220; Matter of Witkind, 167 Misc. 885.) V. Defendant’s undertaking to make periodic payments to the widow was without consideration. (Matter of Borden, 95 Misc. 443; Jenner v. Shope, 205 N. Y. 66; Vanderbilt v. Schreyer, 91 N. Y. 392; Carpenter v. Taylor, 164 N. Y. 171; Ryan v. Ward et al., 48 N. Y. 204; McGovern v. City of New York, 234 N. Y. 377.)
   Rippey, J.

George J. Hoffmann died June 10,1937, then being the owner and proprietor of a sugar-weighing business in the city of New York which he had operated successfully and with large profits for more than thirty years under the trade name and style of “ George J. Hoffmann & Company ”. For most of that time and at the time of his death, defendant was employed by Hoffmann on a yearly salary which included 37%% of the profits in the conduct of that business during the latter part of his employment. By the terms of his will, which was admitted to probate, Hoffmann left his whole estate to his wife, Anna E. Hoffmann, and named her executrix thereof. She qualified as executrix and acted in that capacity until her death which occurred on April 3, 1940. She left a will in which plaintiffs Amend and McNamara were named executors. They qualified as such upon the probate of her will and also were named administrators with the will annexed of her husband’s estate and have since been acting as such.

From the time of Hoffmann’s death, defendant actively sought to acquire and to operate his previous employer’s business for himself alone and demonstrated no intention to continue to operate it for the estate. Matters reached a point when, on July 12, 1937, Mrs. Hoffmann had a conference with him with reference to his continuance of the business in behalf of the estate and he then notified her, definitely for the first time, that he would not act as manager of the business but was interested only in acquiring the business as his own. He then offered to pay her 50% of the profits of the business provided he should become the owner and should be allowed to run it entirely by himself, she to have no other interest. No agreement was reached at that conference between the parties and-from that time on negotiations were carried forward principally between Joseph A. McNamara, attorney for Mrs. Hoffmann individually and for her husband’s estate, and George W. Sheldon, a man of long practice and a member of one of the leading law firms of New York City, as attorney for Hurley.

A series of verbal conferences and written correspondence followed between the attorneys, who from time to time advanced various differing suggestions and proposals in behalf of their respective clients in an effort to reach an agreement, all without success. In that situation, it was agreed between the attorneys on July 26,1937, that McNamara should draft a proposed agreement and submit it to Sheldon for examination. That he did in typewritten form on the same day. In this draft, the termination of the agreement was fixed for June 30,1945. McNamara, however, tentatively provided alternatively with other provisions "for his client’s benefit, in article X “ that in the event of the death of the party of the first part [Mrs. Hoffman] prior to July 1st, 1945, this agreement shall cease and terminate and all interest of the party of the first part thereunder come to an end as of the date, of the death of the party of the first part. In the event, however, of the death of the party of the second party [Hurley] subsequent to July 1st, 1942, this agreement shall also cease and come to an end and all the rights of the party of the first part terminate as of the date of such death. Should the party of the second part die prior to July 1st, 1942, then and in such event there shall be due and payable and the party of the second part hereby grants a claim on his estate to the party of the first part in the sum of Twenty-five Thousand ($25,000.00) dollars ”. Clauses followed in that article authorizing defendant to elect to provide and to substitute life insurance for $25,000 on his life in place of the absolute claim in cash for that amount against his estate in the event of his death prior to July 1, 1942. The draft contained eleven separately numbered articles. After editing the draft to his satisfaction,. Sheldon returned it to McNamara. Every one of the articles contained some changes, deletions, or additions in Sheldon’s handwriting in ink, or, in some cases, a rider was attached, affecting not only the form but the substance of the article to which the same was applicable. When returned, it evidenced extensive and exhaustive examination by Sheldon and care on his part for the utmost of protection of his client’s interests with carefully drawn provisions for his benefit which were not contained in McNamara’s draft. There was no evidence that he had missed any opportunity to drive a good bargain for his client. Among other things, he drew lines through the entire part of article X quoted above and wrote opposite that part of the draft on the margin in large letters the word “ No ” and heavily underscored it. He made changes in the clauses relating to life insurance designed to protect Mrs. Hoffmann against losses under the contract.. Thereupon the draft with its changes was sent to McNamara who retyped it verbatim with all changes and additions made by Sheldon, except in three minor particulars which did not change the wording, substance or effect of article X as re-prepared by Sheldon. Otherwise, neither in punctuation, words nor substance did the retyped instrument vary in any particular from the draft as edited by Sheldon. McNamara then presented the completed contract to Mrs. Hoffmann who discussed it at length with her attorney. She was not satisfied with the changes regarding life insurance protection against the death of Hurley before July 1, 1945, but finally acceded to the changes made by Sheldon and executed the final draft in duplicate on July 28, 1937. The agreement so executed was then delivered to Sheldon who presented it to his client who signed it in duplicate and one of the duplicate copies was given to McNamara.

So far as important here, the final agreement as executed by and delivered between the parties on July 28, 1937, provided that Mrs. Hoffmann, individually and as executrix of her husband’s estate, should pay Hurley a doubtful claim he had made against the estate for $55,000 together with 37%% of the profits of the business between January 1, 1937, and the date of Hoffmann’s death, and should transfer the Hoffmann business, trade name and good will to Hurley and assist the latter, as neces.sary, to collect all of Hoffmann’s outstanding business accounts for his own use. Hurley agreed to pay to Mrs. Hoffmann $125 per week to and including June 30,1945, provided the net profits of the business were equal to or greater than $13,000 per year and in lesser amounts if the profits were less than that sum and, in addition, 25% of the net profits in excess of $26,000 per year together with $3,000 for.the good will and assets of the business and to assume the lease of Hoffmann’s business establishment for its unexpired term.

Both parties fully performed the contract, without objection or question by either, until the death of Mrs. Hoffmann. The business under Hurley’s operation continued to be profitable. Hurley, previous to her death, accounted for the profits and paid to Mrs. Hoffmann from the profits some $20,634. After her death he refused to perform further and this action was thereupon brought for specific performance.

The defense was a mistake on the part of Sheldon and fraud on the part of McNamara. Defendant claimed that his áttorney inadvertently and mistakenly struck out from the McNamara draft the first sentence of article X, that McNamara knew this was inadvertently stricken out and failed to correct the mistake on copying the agreement in final form or to notify Sheldon of his mistake and that he, Hurley, did not read the final agreement when he signed it relying on Sheldon’s statement that it was all right. Accordingly defendant has asked that the agreement be reformed so as to provide that it should terminate on the death of Mrs. Hoffmann.

The Trial Judge, who saw Sheldon, Hurley and McNamara on the witness stand and heard them testify gave no credit to defendant’s claim that the final written agreement did not express the true intention of the parties. The advantages of the trial court who saw and heard the witnesses should be considered and, when truth hangs upon the credibility of witnesses, his decision should be given the greatest weight (Boyd v. Boyd, 252 N. Y. 422, 429; York Mortgage Corp. v. Clotar Const. Corp. 254 N. Y. 128, 134; Smith v. Smith, 273 N. Y. 380, 383). The trial court found that the evidence established that there never existed any verbal agreement between the parties, that the draft by McNamara was satisfactory to Sheldon in neither form nor substance, that his counter-proposals were reflected in the changes, deletions and additions which he made to the McNamara proposal, that McNamara accepted the counter-proposals, and that there was no meeting of the minds of the parties or any terms of agreement ever fixed until the formal written contract was executed. The Appellate Division, by a three to two vote, found to the contrary. We find that the weight of the evidence sustained the findings of the trial court. Defendant was a business man of experience and competence and adept in the understanding and use of the English language. Not to have read the contract or to have had it read to him before signing, if that be a fact as he testified, furnishes no basis for his repudiation of any of its terms (Dambmann v. Schulting, 75 N. Y. 55, 61; Pimpinello v. Swift & Co., 253 N. Y. 159, 162-163).

Before defendant can be granted reformation, he must establish his right to such relief by clear, positive and convincing' evidence. Reformation may not be granted upon a probability nor even upon a mere preponderance of evidence, but only upon a certainty of error (Christopher St. R. Co. v. 23d. St. R. Co., 149 N. Y. 51; Salomon v. North British & M. Ins. Co., 215 N. Y. 214; Susquehanna S. S. Co. v. Andersen & Co., 239 N. Y. 285; Porter v. Commercial Cas. Ins. Co., 292 N. Y. 176). The quality of the evidence in this case does not meet that test. Nor may the defendant secure reformation merely upon a showing that he or his attorney made a mistake. In the absence of fraud, the mistake shown “ must be one made by both parties to the agreement so that the intentions of neither are expressed in it ’ ’ (Salomon v. North British & M. Ins. Co., supra, p. 219). The court may not compel the plaintiffs to be bound by a contract which their principal never made (Curtis v. Albee, 167 N. Y. 360, 365). Since the right to reform the contract here is not claimed on the ground of mutual mistake, reliance is based on the alleged mistake of Sheldon and of defendant and the alleged fraud of McNamara in not disclosing to Sheldon his knowledge that the mistake was made. Both courts below have held that there was no fiduciary relation existing between McNamara on the one side and Sheldon and Hurley on the other. The trial court held upon the overwhelming weight of the evidence that the parties were dealing at arm’s length ”. There is no evidence that McNamara had any idea or knowledge that Sheldon had made a mistake. McNamara denies that he had either. To overcome that lack of evidence and the denial of McNamara and the inevitable consequence of the facts as established, the court would be compelled, to hold the contrary, to examine into the innermost recesses of McNamara’s mind which, at least, would be.a hazardous undertaking (Porter v. Commercial Cas. Ins. Co., supra). Such a procedure may not here be undertaken in the face of the chain of events and the convincing facts. Were it otherwise “ The law requires disclosure to be made only when there is a duty to make it, and this duty is not raised by the mere circumstance that the undisclosed fact is material, and is known to the one party, and not to the other, or by the additional circumstance that the party to whom it is known, knows that the other party is acting in ignorance of it ” (Peoples’ Bank of City of New York v. Bogart, 81 N. Y. 101, 107). It is not fraud for one party to say nothing on the subject where no confidential or fiduciary relation exists and where no false statement or acts to mislead the other are made (Peoples’ Bank of the City of New York v. Bogart, supra; Dambmann v. Schulting, supra). In the circumstances in this case, a finding of fraud may not be predicated upon McNamara’s failure to speak, whether or not he had knowledge of Sheldon’s error, especially in view of the unreversed finding that he owed no fiduciary duty either to Sheldon or to the defendant. Having accepted and acted on the written instrument, in the absence of fraud and deceit or mutual mistake, defendant was bound by its terms as the only existing agreement between the parties even though it did not contain some provision on which the parties may have agreed during the negotiations (Fitzgerald v. Arcade Theatre Co., 153 N. Y. Supp. 618, 630, affd. 172 App. Div. 932; Metzger v. Aetna Ins. Co., 227 N. Y. 411, 416).

The contract was not personal to Mrs. Hoffmann since it contained no provision to that effect and its benefits survived for her estate as well as for the estate of her husband (Kernochan v. Murray et al., 111 N. Y. 306; Matter of Buccini v. Paterno Const. Co., 253 N. Y. 256, 259).

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

Lehman, Oh. J., Loughban, Conway, Desmond and Thacher, JJ., concur; Lewis, J., taking no part.

Judgment accordingly.


text:
    The People of the State of New York, Respondent, v. Joseph Nisonoff and Max J. Weinstein, Appellants.
    Argued October 18, 1944;
    decided December 30, 1944.

      Harry G. Anderson and Joseph H. Stein for Joseph Nisonoff, appellant.
    I. It was reversible error for the trial court to receive in evidence the report of the assistant medical examiner. (People v. Jackson, 191 N. Y. 293; Matter of Senior v. Boyle,
      221 N. Y. 414; People v. English, 175 Misc. 751; Matter of English v. Bohan, 175 Misc. 930; Matter of Ziegler, 122 Misc. 351; Application of Hughes, 41 N. Y. S. 2d 843; Hale v. City of New York, 251 App. Div. 826; People ex rel. Lemon v. Supreme Court, 245 N. Y. 24; People v. Buchalter, 289 N. Y. 244; Peoria v. Industrial Board, 284 Ill. 822; People v. Jackson, 191 N. Y. 293; Ætna Life Ins. Co. v. Milward, 118 Ky. 716; Barron v. The People, 1 N. Y. 386; B. L. T. & S. D. Co. v. K. T. & M. M. A. Assn., 126 N. Y. 450; Davis v. Supreme Lodge, Knights of Honor, 165 N. Y. 159; Beglin v. Metropolitan Life Ins. Co., 173 N. Y. 374; Commonwealth v. Slavski, 245 Mass. 405; Wheeler v. State, 35 Ohio St. 394; People v. Pekarz, 185 N. Y. 470.) II. The receipt in evidence of the medical examiner’s report and the testimony as to the cause of death based thereon was violative of the right of confrontation contained in section 6 of article I of the State Constitution. It was also in violation of the due process of law provision contained in the Fourteenth Amendment to the Constitution of the United States. (Barron v. The People, 1 N. Y. 386; People v. Bromwich, 200 N. Y. 385; People v. Elliott, 172 N. Y. 146; People v. Stilwell, 244 N. Y. 196; People v. Sugarman, 248 N. Y. 255; Salinger v. United States, 272 U. S. 542; Berkeley Peerage Case, 4 Campbell 401; Mattox v. United States, 156 U. S. 237; Sturla v. Freccia, 5 App. Cas. 623; Matter of Stenstrom v. Harnett, 131 Misc. 75; Jewett v. Boston Elevated Railway, 219 Mass 528.)

      Louis Susman and Hyman Roffe for Max J. Weinstein, appellant.
    I. The trial court erred in receiving in evidence the findings of the assistant' medical examiner. Defendant was denied his right of being confronted with, and to cross examine, a witness against him, in violation of section 6 of article I of the State Constitution and in violation of the Fourteenth Amendment of the Federal Constitution. (Barron v. The People, 1 N. Y. 386; Mattox v. United States, 156 U. S. 237; Kirby v. United States, 174 U. S. 47; Dowdell v. United States, 221 U. S. 325; People v. Hines, 284 N. Y. 93; People v. Stillwell, 244 N. Y. 196; People v. Bromwich, 200 N. Y. 385; People v. Sugarman, 248 N. Y. 255; Matter of Hughes, 41 N. Y. S. 2d 843; People v. Lorenzana, 12 Philippine 64; Jewett v. Boston Elev. Railway Co., 219 Mass. 528; People v. Saccoia, 268 Mich. 132; Ogilvie v. Ætna Life Ins. Co., 189 Cal. 406; People v. Malinowski, 245 N. Y. 220; People v. Flaherty, 218 App. Div. 204; Matter of English v. Bohan, 175 Misc. 930; People v. English, 175 Misc. 751; Matter of Ziegler, 122 Misc. 351; People v. Corbisiero, 290 N. Y. 191; People v. Nitzberg, 289 N. Y. 523.) II. The trial court committed reversible error in admitting the report of the assistant medical examiner. (People v. English, 175 Misc. 751; Matter of English v. Bohan, 175 Misc. 930; Matter of Ziegler, 122 Misc. 351; Ogilvie v. Ætna Life Insurance Co., 189 Cal. 406; Ætna Life Insurance Co. v. Milward, 118 Ky. 716; Spiegel H. F. Co. v. Industrial Commission, 288 Ill. 422; The Insurance Co. v. Levine, 24 Col. 43; United States v. Johnson, 72 F. 2d 614; Ocean Accident & Guarantee Corporation v. Schachner, 70 F. 2d 28; Cohen v. New York Life Ins. Co., 21 F. 2d 278; Wheeler v. State, 35 Ohio St. 394; People v. Keough, 276 N. Y. 141.)

      Samuel J. Foley, District Attorney (George Tilzer, Herman J. Fliederblum, Francis X. O’Brien and Harry E. O’Donnell of counsel), for respondent.
    No error was committed by the trial court in receiving in evidence the stenographic record of the autopsy performed by the deceased assistant medical examiner. No constitutional rights of the defendants were violated thereby. (People v. Reese, 258 N. Y. 89; Heike v. United States, 192 F. 83, 227 U. S. 131; State v. McO’Blenis, 24 Mo. 402; Todd v. State, 69 So. 325; Chesapeake & Delaware Canal Co. v. United States, 240 F. 903; People v. Fisher, 223 N. Y. 459; Matter of Buffalo F. A. Corp. v. Mountaindale F. Dist., 138 Misc. 285; Coleman v. Commonwealth, 25 Grattan 865; Sandy White v. United States, 164 U. S. 100; Matter of Senior v. Boyle, 221 N. Y. 414; Mattox v. United States, 156 U. S. 237.)
   Conway, J.

The defendants were convicted of the crime of manslaughter in the first degree. The indictment charged that they, acting in concert with another, had willfully and wrongfully used and employed a certain instrument upon a woman pregnant with child, in order to procure a miscarriage, without any necessity to preserve her life and by the use of such instrument inflicted mortal wounds which resulted in her death.

There is but one question presented for our consideration, and that is whether it was error to admit in evidence the autopsy findings of the Assistant Medical Examiner who had died prior to the trial of appellants. That has become important because of a constitutional amendment which became effective on January 1, 1939. Prior to that amendment there-would have been no question as to the admissibility of the findings, for the right of the accused to be confronted with the witnesses against him was a matter of statute (Code Crim. Pro., § 8; Civil Eights Law, § 12), and both the common law and other statutes permitted their introduction in evidence (Civ. Prac. Act, §§ 367, 374a). By the constitutional amendment of 1938, the right of confrontation was written into article I, section-6. The question is whether that made the autopsy findings inadmissible, in view of the death of the reporting official.

The autopsy was performed on November 18, 1942, by the Assistant Medical Examiner. While he was performing the autopsy, he dictated his findings to a stenographer and typist attached to the office of the Medical Examiner. They were subsequently transcribed and a report prepared which was signed by the Assistant Medical Examiner and filed in the office of the Medical Examiner. So much of the report as contained the findings was offered and received in evidence. The opinion ■contained in the report was not offered. The Chief Medical Examiner was called to give opinion testimony as to the cause, of death, based upon those findings.

New York City Charter, sections 874, 875, provide that an Assistant Medical Examiner must be a “ doctor of medicine and a skilled pathologist and microscopist..” It has not been argued here that the Assistant Medical Examiner did not possess those statutory qualifications.

Section 879 of the Charter provides: It shall.be the duty of the chief medical examiner to keep full and complete records in such form as may be provided by law. The chief medical examiner shall promptly deliver to the appropriate district attorney copies of all records relating to every death as to which there is, in the judgment of the medical examiner in charge, any indication of criminality, and such records shall not be open to public inspection.”

Section 878-3.0 of the Administrative Code of the City of New York provides: If the cause of such death shall be established beyond a reasonable, doubt, the medical examiner in charge shall so report to his office. If, however, in the opinion of such medical examiner, an autopsy is necessary, the same shall be performed by a medical examiner. A detailed description of the findings written during the progress of such autopsy and the conclusions drawn therefrom shall thereupon be filed in his office.”

Section 879-1.0 of the Administrative Code provides: “ Records shall be kept in the office of the chief medical examiner, properly indexed, stating the name, if known, of every person dying under the circumstances described in section eight hundred seventy-eight of the charter, the place where the body was found and the date of death. To the record of each case shall be attached the original report of the medical examiner and the detailed findings of the autopsy, if any. The appropriate district attorney and the police commissioner of the city may require from the chief medical examiner such further records, and such daily information, as they may deem necessary.”

Civil Practice Act, section '367, now provides, and so provided prior to the adoption of our Constitution of 1938, as follows: “ Certificate of officer as evidence of facts. Where á public officer is required or authorized, by special provision of law, to make a certificate or an affidavit touching an act performed by him, or to a fact ascertained by him, in the course of his official duty; and to file or deposit it in a public office of the state; the certificate or affidavit so filed or deposited, or an exemplified copy thereof, is. presumptive evidence of the facts therein alleged, except where the effect thereof is declared or regulated by special provision of law.”

The right of confrontation imports and confers the right of cross-examination. When that right was added to our State Constitution, there was eliminated the possibility of its deprivation by legislative act. When we interpret that addition to the Constitution, we must do so in the light of the law as it existed at the time of the change. Any exceptions to the right of confrontation or cross-examination existing prior to the adoption of the State constitutional provision and not contrary to its spirit, must be respected. (Mattox v. United States, 156 U. S. 237, 243.) In that case, speaking of the Constitution of the United States, the court used the following language (p. 243), which is particularly applicable here: We are bound to interpret the Constitution in the light of the law as it existed at the time it was adopted, not as reaching out for new guaranties of the rights of the citizen, but as securing to every individual such as he already possessed as a British subject — such as his ancestors had inherited and defended since the days of Magna Charta. Many of its provisions in the nature of a Bill of Rights are subject to exceptions, recognized long before the adoption of the Constitution, and not interfering at all with its spirit. Such exceptions were obviously intended to be respected. A technical adherence to the letter of a constitutional provision may occasionally be carried farther than is necessary to the just protection of the accused, and farther than the. safety of. the public will warrant.”

The right of an accused in a criminal action to be confronted by the witnesses who testify against him, is not violated by the introduction of so-called public documents or official records required to be kept. (Heike v. United States, 192 F. 83, 94, 95, affd. 227 U. S. 131; Commomoealth v. Slavski, 245 Mass. 405, 414, 415, 417; People v. Reese [1932], 258 N. Y. 89, 96; People v. Corey, 157 N. Y. 332; 5 Wigmore on Evidence, § 1398, pp. 136, 141, 142; Richardson on Evidence [6th ed.], §§ 615, 616, 646, 647.)

The case of Reike v. United States (supra) is important since the right of confrontation is guaranteed by the Sixth Amendment to the Constitution of the United States. While that amendment is not a restraint upon the powers of the States (People v. Bromwich, 200 N. Y. 385-389), the United States Supreme Court decision is helpful in solving our problem here.

In People v. Reese (supra, Caedozó, Ch. J.), we pointed out that our statutory rule of confrontation had never been deemed to require the exclusion of certificates of records made by a public officer in the course of his official duty.”

Referring to the requirement of confrontation, Professor Wigmore points out at section 1398, page 141 (supra):

“ It follows equally that the constitutional provision does not exclude evidence admissible by way of exception to the Hearsay rule.
“ The use of dying declarations has been often thus passed upon, and without any dissenting rulings.”
“ A like consequence must of course follow for the other exceptions to the Hearsay rule; it has been expressly sanctioned for official statements * *

In People v. Corey (157 N. Y. 332) an ante-mortem statement' of the deceased was read in evidence on behalf of the People. Defense counsel objected to that evidence as “ incompetent, improper and hearsay,” and urged on appeal that “ dying declarations, although competent at common law, are no longer competent, because the Code of Criminal Procedure, in prescribing the rights of the defendant in a criminal action, provides that he is entitled 1 to be confronted with the witnesses against him in the presence of the court ’ ” (p. 347). We said (Vanbt, J., at pp. 347-8): “ We do not think the legislature intended to abolish the rule governing the admission of dying declarations, and such certainly has not been the understanding of the profession or the courts. We are not aware that this question has ever been raised before in this state, and yet the Criminal Code has been in force for nearly twenty years, and the Revised Statutes, which contain a similar provision, for nearly seventy years. (1 R. S. 94, § 14.) The right of the accused to be confronted with the witnesses against him has always been a part of the Bill of Rights, and yet dying declarations have been received in evidence for time out of mind. The legislature doubtless intended to confer upon a defendant in a criminal action the right to be confronted with any living witness against him. It is upon this ground that the objection to the introduction of such declarations in evidence against a defendant, based on his constitutional right to be confronted with the witnesses against him, has been uniformly overruled in those jurisdictions where such constitutional provisions are in force. It is invariably held that the deceased is not a witness within the meaning of such a provision or of the Bill of Rights, and that it is sufficient if the defendant is confronted with the witness who testifies to the declaration. (Citing cases).”

While appellants concede that there is a recognized exception to the hearsay rule, in that certain public records may be received in evidence, they contend that no part of the autopsy report may be received because it is not a public record in view of the provision of New York City Charter, section 879, quoted (supra), that it shall not be open to public inspection.” In other words, it is argued that it is a condition precedent to admissibility that the record offered be available for inspection by the public, since that insures the accuracy and trustworthiness of the record. The only records not open to public inspection under the applicable statute here, are those delivered to the District Attorneys relating to deaths where there is indication of criminality. That is a proper exercise of the police power and in aid of law enforcement. The construction urged is too narrow. (See 5 Wigmore on Evidence, §§ 1630, 1632, 1634.) Suffice it to say, as to the autopsy findings, that they were contained in a report filed in a public office by a public officer for a public purpose embodying facts required by statute to be stated therein. That was sufficient, although in the public interest they were available only to public officials.

The judgment should be affirmed. (See 294 N. Y. 696.)

Lehman, Oh. J., Loughran, Rippey, Lewis, Desmond and Thaoher, JJ., concur.

Judgment affirmed.


text:
    George A. Langan, as Trustee in Bankruptcy of Onondaga Litholite Company, Appellant, v. First Trust & Deposit Company et al, Respondents.
    Argued November 21, 1944;
    decided December 30, 1944.

      Laurence Sovik for appellant.
    I. This being a motion for nonsuit and a dismissal of the complaint at the close of plaintiff’s evidence, such evidence as plaintiff submitted must be taken as true and construed in a light most favorable to plaintiff. (Volosko v. Interurban St. Ry. Co., 190 N. Y. 206; McNally v. P. Ins. Co., 137 N. Y. 389; Kraus v. Birnbaum, 200 N. Y. 130; Dillon v. Cortland Baking Co., 224 App. Div. 303.) II. Plaintiff sustained the burden of proof of every allegation contained in his complaint. (Volosko v. Interurban St. Ry. Co., 190 N. Y. 206; In re Brown, 118 F. 2d 198; Matter of Leterman v. Pink, 249 App. Div. 164.) III. The defense that defendants were not “ de jure ” directors and officers is insufficient. (Donnelly v. Pancoast, 15 App. Div. 323; Halpin v. Mutual Brewing Co., 20 App. Div, 583; Cameron et al., v. Seaman et al., 69 N. Y. 396; Matter of Ringler & Co., 204 N. Y. 30; Michelson et al., v. Penny et al., 135 F. 2d 409.)

      H. Duane Bruce and Joseph P. Bogers for First Trust & Deposit Company and others, respondents.
    The nonsuits were properly granted for the reasons that there was no basis shown for liability under Debtor and Creditor Law and no basis shown for liability under section 15 of Stock Corporation Law. (Jefferson County Bank v. Townley, 159 N. Y. 490; Lopez v. Campbell, 163 N. Y. 340; Merriam v. Wimpfheimer, 25 F. Supp. 405; Irving Trust Co. v. Metro-Goldwyn-Mayer Corp., 246 App. Div. 1; Varnum v. Hart et al., 119 N. Y. 101; Roffe v. Yerington Realty & Building Co., Inc., 260 App. Div. 4; Royal Indemnity Co. v. Ginsberg, 157 Misc. 507; Doti v. Henderson, 107 Misc. 533; Duell v. Brewer, 92 F. 2d 59.)

      James B. Skahen and Lawson Barnes for Domark Corporation, respondent.
    I. Respondent Domark Corporation acted in good faith. (Fraw Beatty Co. v. Natanson, 261 N. Y. 396; Balcomb v. Old Nat. Bank, 201 F. 679; The President, etc., v. Cornen, 37 N. Y. 320; Parker v. Conner, 93 N. Y. 118; Meyer v. Mayo, 196 App. Div. 78; Lent v. Shear, 160 N. Y. 462.) II. Appellant has failed to make out a prima facie case under any theory of his complaint. (Morris et al. v. Talcott, 96 N. Y. 100; Daluny v. Rezinas, 183 App. Div. 456, 229 N. Y. 513; Beardsley v. Kilmer, 236 N. Y. 80; Lopez v. Campbell, 163 N. Y. 340; Central Hanover Bank & Trust Co. v. United Traction Co., 95 F. 2d 50; Del Valle v. Hyland, 76 Hun 493, 148 N. Y. 751; Dorff v. Bornstein, 277 N. Y. 236; Varnum v. Hart et al., 119 N. Y. 101; Harpending v. Munson, 91 N. Y. 650; Royal Indemnity Co. v. Ginsberg, 157 Misc. 507; Merriam v. Wimpfheimer, 25 F. Supp. 405.)
   Loughran, J.

For convenience, we abbreviate two corporate names appearing in the record: Onondaga Litholite Company — whose trustee in bankruptcy is the plaintiff — will be called the Company; and the defendant First Trust and Deposit Company will be called the Bank.

Assets that once belonged to the Company are now in the ownership of the defendant Domark Corporation — a concern which was organized and has always been controlled by the Bank. The complaint charges that the acquisition of those assets by Domark Corporation was brought about through a violation of the rights of creditors of the Company who are now. represented by the plaintiff as trustee. Each of the individual defendants who are parties to this appeal was either a director or a member of the executive committee of the Company at the times in issue (or so the trial court assumed) and several of them were then ranking officers of the Bank.

On the trial, the complaint was dismissed at the close of the ■ plaintiff’s case. The Appellate Division affirmed by a divided vote. On this appeal by the plaintiff, the nonsuit requires us to take the evidence in that aspect of it which is most favorable to him. (Hoykendorf v. Bradley Contracting Co., 227 N. Y. 204, 207.)

In 1924, the Company made a mortgage indenture to secure a bond issue of $250,000 and thereby created a first lien upon its plant and equipment. In 1934, all but $100 of that bond issue had been bought up by the Bank. Subsequently the Bank made large loans to the Company. In 1938, when such loans amounted to $625,084.93, and the Company was insolvent, the management of its affairs was taken over by the Bank. Soon after this the Company canceled its contracts and closed its plant, at the behest of the Bank. A little later, the Bank made written demand upon the proper party for a foreclosure of the mortgage that was a first lien on the Company’s plant and equipment. On the institution of the foreclosure suit, the bonds secured by the mortgage were transferred to the defendant Domark Corporation by the Bank. Domark Corporation was a vehicle ” for the Bank and nothing more. The mortgage indebtedness and other charges under the mortgage indenture came to $38,494. The mortgaged property was bid in by Domark Corporation for $25,000.

Expert witnesses for the plaintiff placed upon the property a market value of $269,941. They were not cross-examined.

The trial court said: “ Concededly, the actual value of the property, if marketable, was considerably greater than the mortgage debt with added charges, and to the extent of the excess the unsecured creditors suffered.” In the judgment of the trial court, however, the property had no more than a liquidation value after the Company’s plant had been shut down — an event which preceded the foreclosure sale. For that reason, the plaintiff’s proof of market value was disregarded. This handling of the case failed, we think, to give due effect to .the rule that the plaintiff was entitled to the benefit of every inference advantageous to him for which there was allowable warrant in the evidence.

From the plaintiff’s viewpoint, any depreciation of the property that arose on the closing of the Company’s plant was not significant in the determination of the adequacy of the bid. For his purpose, the important fact in that respect was the demand by the Bank for a cessation of the Company’s operations. The real inquiry, then, is whether the sum total of the plaintiff’s proof is sufficient on the face of it to justify a man of ordinary reason and fairness in affirming the charges made against the defendants. In our judgment, the evidence (when so regarded) affords room for an inference of actual intent of the defendants to hinder the unsecured creditors of the Company in the realization of their respective claims, and also gives countenance to an inference of consequent prejudice to such claimants through the Bank’s acquisition of the Company’s property at a minor fraction of its market value. Hence, as we conclude, the plaintiff should not have been dismissed for a failure of proof, seeing that harm intentionally done is actionable if not justified. (American Guild of Musical Artists v. Petrillo, 286 N. Y. 226, 231; Keviczky v. Lorber, 290 N. Y. 297.) In saying this, we have, of course, no thought of suggesting what the eventual disposition of the controversy should be. If the acts of the defendants were no more than an honest defense of their own business interest, then this litigation cannot be maintained. All we now decide is that such a justification cannot here be claimed consistently with the above definition of the meaning of a nonsuit.

The record fails to supply a sufficient basis for decision of the asserted invalidity of the election of certain of the individual defendants as directors of the Company.

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

Rippey, Conway and Desmond, JJ., concur; Lehman, Ch. J., and Thacheb, J., dissent on the ground that there is no evidence from which any inference can be drawn that the defendants were not acting in honest defense of their own business interest; Lewis, J., taking no part.

Judgments reversed, etc.