text:
    James W. Farrell, Respondent, v. Frank C. Rose et al., Copartners under the Firm Name of Rose Bros., Appellants, Impleaded with Others.
    (Submitted January 7, 1930;
    decided February 11, 1930.)

      Louis Susman and J. M. Cohen for appellants.
    Plaintiff’s judgment, predicated on undue delay, resulting in alleged impairment of his easement of access, is without support and should be reversed. (Lefkovitz v. City of Chicago, 238 Ill. 23; Chicago Flour Co. v. Chicago, 243 Ill. 268; Ryan v. City of New York, 159 App. Div. 105; Anderson v. Meislahn, 12 Daly, 149; City of Denver v. Bayer, 7 Col. 117; Brewster v. Brewster, 145 App. Div. 812; Johnson Service Co. v. Hildebrand, 149 App. Div. 680; Whalen v. Stuart, 194 N. Y. 495; Bremer v. Manhattan R. R. Co., 191 N. Y. 333.)

      Bertram Boardman for respondent.'
    The appellants were bound to keep the abutting street free from obstructions and excavations so as not to destroy the plaintiff’s right to the use of his premises. For their failure so to do they are liable to the plaintiff who suffered injuries théreby. The appellants are liable not only for the unnecessary obstruction of the street but also for the unreasonable length of time that they permitted the conditions complained of to exist without making the slightest effort to abate them. (Bates v. Holbrook, 67 App. Div. 25; 171 N. Y. 460; Van Siclen v. City of New York, 32 Misc. Rep. 403; 64 App. Div. 437; 172 N. Y. 504; Kane v. N. Y. El. R. Co., 125 N. Y. 164; Egener v. New York Central R. R. Co., 130 N. Y. 108; Lahr v. Metropolitan El. R. Co., 104 N. Y. 268; Galway v. Metropolitan El. R. Co., 128 N. Y. 132; Vogel v. Mayor, 92 N. Y. 10; Cassel v. City of New York, 167 App. Div. 831; National Cash Register Co. v. Remington Arms Co., 242 N. Y. 99.)
   Crane, J.

Harlem River terrace is a street in the city of New York, borough of The Bronx, running north and south, and to the east of the tracks of the New York Central railroad. At this point the street is many feet above the tracks, and kept in place by a retaining wall. On the east side of Harlem River terrace, and near West Fordham road, is the property of the plaintiff, on which he has erected garages for the storage of automobiles. These buildings open out onto the highway. Opposite the plaintiff’s garages, or the other side of Harlem River terrace, is the retaining wall, a sheer perpendicular drop on this side of the street to the tracks of the railroad. If it were not for the retaining wall, there would be no Harlem River terrace. It would fall in onto the tracks.

The city of New York built this retaining wall. On the 2d of November, 1925, it contracted with ’ Rose Brothers for the construction of a stone retaining wall. This work naturally was for the protection and security of Harlem River terrace, for the proper maintenance of the highway, and served also as a protection to the railroad. Rose Brothers, the contractors, had to do their work in what was then Harlem River terrace, or roadway. Their derricks, materials and excavation had to be in the roadway, as work could not be done on the railroad tracks. All work and the storing of all materials had to be to the east of the tracks and the right-of-way of the railroad. Rose Brothers commenced work November 11, 1925, and completed their contract April 11, 1927, an excess of 147 days over the time in which they had agreed to complete the work. The delay was caused by storms, unavoidable temperature, a cave-in of the sewer, which had to be rebuilt, and landslides, causing additional excavation. The city authorities recognized the necessity for the delay, and allowed the contractor therefor, in accordance with the terms of his contract. The Assistant Engineer of the Highway Bureau testified that the work proceeded with diligence, and that in view of the cave-ins and the other obstacles to progress, he recommended to the Borough President that the time for this extra work be allowed to the contractor. This was done. No penalties were exacted, and the city accepted the work as having been performed according to the contract and the terms thereof.

The trial court found as a fact that the time required for the extra work not contemplated on the contract amounted to 147 days. The Appellate Division embodied in its order a finding of fact, numbered 7,” in exactly the same words.

The plaintiff claims to have suffered damage by the action of the city and of the Rose Brothers in the use of Harlem River terrace and the delay in doing the work. As an adjoining property owner, the plaintiff had the right to use the street and highway in front of his premises, subject at all times to the reasonable control and regulation of the municipal authorities, and to work in the street necessary for its repair and maintenance, or for the construction of other public utilities. This is common knowledge to those of us who five in a metropolis like New York city. The highway is continually being dug up for subways, sewers, gas mains, repairs and the like. The inconvenience and damage which a property owner suffers from these temporary obstructions are incident to city life and must be endured. The law gives him no right to relief, recognizing that he recoups his damage in the benefit which he.shares with the general public in the ultimate improvement which is being made. The law, however, does afford him a relief, if the city or a contractor interferes with the highway without authority; or, if acting legally, prolongs the work unnecessarily or unreasonably. The obstruction of streets and highways or the work carried on in them of a public nature must be reasonable and necessary for the public improvement which is being made.

The plaintiff recognizes these homely principles of law, and claims in his action against the city and the contractor that an unreasonable use was made of Harlem River terrace, and that the work was unreasonably delayed, whereby his garages were rendered useless, to his financial loss. Automobiles, he said, could not be taken in and out of the garages because of the obstructions in the street.

The trial judge found for the plaintiff that the work called for by the contract was unreasonably delayed for a period of 147 working days. The Appellate Division reversed the judgment entered upon this finding as against the city, but affirmed it as to the Rose Brothers. The judgment should have been reversed as to both defendants, as the plaintiff failed to prove his case’ He failed to prove any delay that was not made necessary by the conditions.

The plaintiff has made the mistake of thinking that he is justified in relying upon the contract between the city and the contractor, and he reasons that if the terms of the contract as to overtime have been broken by the contractor, he can take advantage of them, even though the city may not. With this in mind, the plaintiff failed to introduce any evidence whatever that the work was unreasonably delayed, and rests his case, so far as the time element is considered, upon the fact that the work was not completed until 147 days after the date for completion stated in the contract.

He has another claim regarding the use of the street, and it might be well to turn to the provision of the contract with reference to these matters. Section “ L ” thereof required the work to be entirely performed at the expiration of 125 consecutive working days, reckoned as follows:

“ In the computation of the number of consecutive working days, the time during which the completion of the work has been delayed in consequence of the condition of the weather, or by any act or omission of the party of the first part or during such period as the work has been suspended by written order of the President (all of which will be determined by the President, who shall certify to the same in writing, and whose determination and certificate thereof shall be binding and conclusive upon the Contractor), will be allowed to the Contractor and will be deducted in said computation. Sundays and also holidays, on which no work is done will also be deducted in said computation. If the completion of the work to be done under this contract shall require work or materials or both in greater amounts than those set forth in the Engineer’s Estimate of Quantities, or if unforeseen obstacles are encountered in the prosecution of said work, then the time which the Contractor is delayed on account thereof will be determined and allowed by the President at the completion of the work, upon the receipt by him of a written application from the Contractor for such determination and allowance.”

Section “ (W) ” of- the contract reads as follows: (W) The Contractor will observe the law and all ordinances of The City in relation to obstructing the streets, keeping open roadways and sidewalks, and providing passageways to property along the line of the work and protecting the same where they are exposed and would be dangerous to the public travel, and such sidewalks and passageways shall, as may be required, be planked or bridged by the Contractor, at his own expense.”

We may dismiss the claim under “ W ” in a few words. For the reasons above stated, the work of building the retaining wall had to be done in the street, Harlem River terrace. The plaintiff offered no evidence that the use of the street by the contractor was unreasonable, or that in doing the work it was feasible to keep it boarded over for use of automobiles. Such construction would be no protection against cave-ins.

As to the time limit, as stated in paragraph “ L,” the findings show the delays were for storms, unfavorable temperature, excess excavation and unforeseen obstacles encountered in the prosecution of the work as testified to and certified by the city engineer. There is nothing else in the case. The plaintiff offered no testimony to contradict these facts or to show that the work was unreasonably delayed. The time which the contractor was delayed on account of this extra work was allowed by the President at the completion of the work upon the receipt by him of the written application from the contractor for such determination and allowance. This avoided the penalty of twenty-five dollars a day as liquidated damages for every day of excess time over the 125 days agreed upon. This allowance by the Borough President was in accordance with the terms of the contract and the facts as they appear in this case.

If the extra work necessitating the delay of the 147 days had not been found and so conclusively proved, the plaintiff would still have had difficulty in sustaining his cause of action. The city might recover the penalties for 147 days’ delay, or it might waive them. The plaintiff, however, had no rights under the contract entitling him to recover for a delay, or because the work was not finished within the contract time. The city had the option of making an allowance for delay, or it could enforce the penalty. The penalty was incurred when the work was not completed according to the contract, even though performance were impossible. The contractor having made the agreement, impossibility of performance would have been no excuse: the city could enforce the penalty, nevertheless. The Borough President was given power under the contract to show indulgence, but the contractor could not claim it as matter of right.

These rights and remedies, however, existed between the city and the contractor. The plaintiff could not recover on the contract, nor did he have any rights thereunder. The plaintiff’s situation is similar to that of a stranger to the contract who has sought to recover on the bond furnished by a contractor to the city for the faithful performance of his work. (2 Dillon Mun. Corp. [5th ed.] § 830.)

The fact that there was a delay or an excess time of performance gave him no rights; the burden rested upon him to prove by the testimony of men familiar with this class of work and with the situation, that the delay was unreasonable and unnecessary. This is the basis of his action, not merely the fact of delay.

For the reasons here stated, the judgment of the Appellate Division and that of the Trial Term against the defendants Rose should be reversed, and a new trial granted, with costs to abide the event.

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

Judgment accordingly.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Thaddeus Parascandola, Respondent, v. Howard D. Hammond, Individually, and as Surviving Partner of the Firm of B. J. Sforza & Company, Appellant, Impleaded with Others.
    (Argued January 16, 1930;
    decided February 11, 1930.)

      Kenneth Brooks Low, Walter Carroll Low and Starr Corey for appellant.
    There is no evidence that plaintiff’s transactions with B. J. Sforza were within the scope of the partnership business of B. J. Sforza & Co. and thus binding upon the appellant. (Kittle v. Callahan, 19 N. Y. Supp. 397: Mircein v. Andrus, 10 Wend. 461; Cashman v. Lawson, 73 App. Div. 419; 175 N. Y. 488; Chemung Canal Bank v. Bradner, 44 N. Y. 680; Union

      National Bank v. Underhill, 102 N. Y. 336; Lord v. Hull, 37 Misc. Rep. 83; 80 App. Div. 194; 178 N. Y. 9; Nemath, Inc., v. Tracy, 217 N. Y. 714.)

      Frederick W. Sparks and Anthony F. Tuozzo for respondent.
    The evidence shows that the respondent’s dealings were with B. J. Sforza & Co. and within the scope of its partnership business. (Rowley on Partnership, § 486; Griswold v. Haven, 25 N. Y. 595; Chester v. Dickerson, 54 N. Y. 1; Adams v. Long, 114 Ill. App. 277.)
   Per Curiam.

The record fails to show that the moneys and other property delivered by the plaintiff to the deceased partner Sforza, were so delivered in connection with any business of the partnership, or applied, when received, to partnership uses.

The statement of the account made out by Sforza during his life and retained by the plaintiff without objection, sets forth a series of transactions between the plaintiff and Sforza individually. The form of the advances and that of the part payments made thereon point clearly in the same direction. If the plaintiff’s case is to be upheld at all, it must be upon the theory that the moneys were deposited in the bank account of the firm, from which an inference would follow that they were received in the business of the partnership. The books of account are confused and unsatisfactory. Even so, the burden was on the plaintiff to trace his moneys into the coffers of the firm, as distinguished from those of Sforza individually. Analysis of the entries does not justify a holding that the burden was sustained.

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

Cabdozo, Ch. J., Pound, Cbane, Lehman, Kellogg, O’Bbien and Hubbs, JJ., concur.

Judgments reversed, etc.


text:
    The People of the State of New York, Respondent, v. Benjamin Kopper, Appellant.
    (Argued January 13, 1930;
    decided February 11, 1930.)

      Arthur Rowland and Gerald Nolan for appellant.
    The machine per se is not a “ slot machine ” as defined by section 982 of the Penal Law and does not violate , the statute. (People v. Spitzig, 133 Misc. Rep. 508; Byk v. Enright, 240 N. Y. 699; Lyman v. Kurtz, 166 N. Y. 274.) Section 982 of the Penal Law must be construed in accordance with its clear meaning, so that all who read it may know what act is forbidden. (People v. Stoll, 242 N. Y. 453; People v. Rosenberg, 138 N. Y. 415; Sherwin v. People, 100 N. Y. 351; People v. Fleischmann, 133 Misc. Rep. 288; People v. Phyfe, 136 N. Y. 554; Burks v. Bosso, 180 N. Y. 340.)

      Frank H. Coyne, District Attorney (J. Lester Albertson of counsel), for respondent.
    The machine is a slot machine as defined by section 982 of the Penal Law.
      (Byk v. Enright, 240 N. Y. 699; People v. Abeel, 182 N. Y. 415; People v. Hamilton, 183 App. Div. 55; People ex rel. Murray v. Becker, 78 Misc. Rep. 666; Green v. Enright, 208 App. Div. 819; Matter of Cullinan, 114 App. Div. 654; People v. Spitzig, 133 Misc. Rep. 508; Pure Mint Co. v. LaBarre, 96 N. J. Eq. 186; Territory v. Jones, 14 N. M. 579; State v. Woodman, 26 Mont. 348; Ferguson v. State, 178 Ind. 568; People ex rel. Verchereau v. Jenkins, 153 App. Div. 512; Dryer & Co. v. City of Seattle, 116 Wash. 449.)
   Per Curiam.

To the uninitiated, the words upon the metal disks which issued from the machine might negative any possible inference that they were checks or memoranda calling for money.” Custom, notice or previous agreement might furnish to the initiated a key which would enable them to find in the disks the significance which was locked behind the words. The record permits the" inference that to the defendant who possessed the machine and to those who might be invited or permitted to use the machine, the disks were in fact checks or memoranda calling for money. We are not now passing upon a case where there is no extrinsic proof that the metal disks which may issue from the machine are understood by both the possessor of the machine and by those who may use it to call for money in exchangé for the disks. At least where that proof is supplied, possession of the machine constitutes an offense under section 982 of the Penal Law.

The judgment should be affirmed.

Cardozo, Ch. J., Pound, Crane, Lehman, Kellogg,

' O’Brien and Hubbs, JJ., concur.

Judgment affirmed.


author: Cbane, J.

text:
    The People of the State of New York ex rel. Morris Plan Company of Buffalo, Appellant, v. William J. Burke et al., as Assessors of the City of Buffalo, Respondents.
    (Argued January 16, 1930;
    decided February 11, 1930.)

      Louis L. Babcock for appellant.
    The appellant was not assessable upon the theory that it owned or held moneyed capital coming into competition with the business of National banks. (Mercantile National Bank v. Mayor, 121 U. S. 156;First National Bank v. Anderson,
      269 U. S. 341; London Realty Co. v. Riordan, 207 N. Y. 264.)

      Gregory U. Harmon, Corporation Counsel (Herbert A. Hickman of counsel), for respondents.
    To make moneyed capital taxable under the act, it is not necessary that it be employed in all the branches of business which may be transacted by a National bank, but it is sufficient if it comes into competition with one or more of such branches. (People ex rel. Pratt v. Goldfogle, 242 N. Y. 277.) Relator has moneyed capital assessable under the law because it is used in the business of discounting promissory notes and other evidences of debt and loaning money on personal security. (People ex rel. Pratt v. Goldfogle, 242 N. Y. 277; Wagner v. Scherer, 89 App. Div. 202; National Bank v. Johnson, 104 U. S. 271; Utica City National Bank v. Gunn, 222 N. Y. 204.) Relator’s business fits exactly into the description of moneyed capital competing with National banks. (Mercantile Bank v. New York, 121 U. S. 138.)

      Arthur J. W. Hilly, Corporation Counsel (William H. King and Isaac Phillips of counsel), for City of New York, amicus curice.

   Cbane, J.

The State of New York for years has attempted to tax the shares of National banks in accordance with section 5219 of the United States Revised Statutes (Mason’s U. S. Code, title 12, ch. 4, § 548), which permits such taxation by the State where the bank is located, subject to the restriction that the taxation “ shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such state coming into competition with the business of national banks.” In seeking to reach this equality of taxation, the State has met with repeated difficulty. (People ex rel. Hanover Nat. Bank v. Goldfogle, 234 N. Y. 345; People ex rel. Pratt v. Goldfogle, 242 N. Y. 277; People ex rel. Broderick v. Goldfogle, 242 N. Y. 540, and similar cases, pp. 541, 542, 543, 544, 545, 546.) The State is between cross-fires.' Taxes are not welcomed. The National banks oppose the tax on the ground that other competing moneyed capital is favored. Corporations and investors other than National banks fight the tax on the ground that their capital does not compete with such banks, and thus whichever position the State takes, it is confronted with objections.

By the Tax Law (Laws of 1923, ch. 897; Cons. Laws, ch. 60), in force in the years 1923-1926 (§ 14), the State provided for a tax upon moneyed capital competing with National banks so that it might validate its attempt to tax the shares of National banks. Unless it taxed this moneyed capital .to the same extent that it taxed the shares of National banks, the latter tax would be illegal under the provisions of the United States Revised Statutes, above referred to. Such was our holding in the Hanover Bank case. Section 14 reads as follows:

§ 14. Owners or holders of moneyed capital other than shares of banks and trust companies taxable on such moneyed capital. Every individual banker and private banker, every investor and every person and every association or corporation, other than banks or trust companies, owning, or * * * holding moneyed capital coming into competition with the business of national banks except * * * bonds, notes or other evidences of indebtedness in the hands of individual citizens not employed or engaged in the banking or investment business and representing merely personal investments not made in competition with such business, shall be assessed and taxed on the actual value of such moneyed capital in the tax district where such owner or holder resides * *

Under this provision the assessors of the city of Buffalo assessed the Morris Plan Company of Buffalo for each of the years 1923 to 1926, inclusive, in the sum of $250,000, as the actual value of moneyed capital employed by it in competition with the business of National banks. Upon review of the assessments, taken pursuant to section 290 et seq. of the Tax Law, the Special Term held that the company was not assessable. The Appellate Division, upon the same facts, came to the opposite conclusion, and it rests with us to say which of these decisions is correct. The query is: Does the Morris Plan- Company of Buffalo, organized as an investment company under article 7 of the Banking Law (Cons. Laws, ch. 2), hold moneyed capital coming into competition with the business of National banks, and thus become hable to a tax of one per cent, fixed pursuant to the statute? What is the yardstick by which we are to measure the facts?

The appellant says that the company does not carry on the business of banking in any true sense; that it has no authority to receive deposits or buy or sell coin or bullion; that it cannot put forth circulating notes or loans on bonds and mortgages; that it has never qualified with the Superintendent of Banks so as to enable it to accept deposits, and that it has no deposits. On the other hand, it is alleged by appellant that all its loans are paid back in weekly or monthly installments within the period of one year, and are made on investment certificates in connection with each transaction providing for installment payments. This, says the appellant, is not and cannot be done by National banks.

These facts, when conceded, do not answer the question presented. The business conducted by the relator and the money which it loans may, nevertheless, come in competition with the business of the National banks. We must look to the United States authorities for our guide upon this proposition. What is competition with the business of National banks? The latest expression is to be found in First National Bank v. City of Hartford (273 U. S. 548), where it was said: “The restriction applies as well where the competition exists only with respect to particular features of the business of national banks or where moneyed capital1 is employed, substantially as in the loan and investment features of banking, in making investments byway of loan, discount or otherwise, in notes, bonds or other securities, with a view to sale or repayment and reinvestment.’ ” (Citing First National Bank v. Anderson, 269 U. S. 341, 348, and Mercantile Bank v. New York, 121 U. S. 138.)

Further, the court said: “ Competition may exist between other moneyed capital and capital invested in national banks, serious in character and therefore well within the purpose of § 5219, even though the competition be with some but not all phases of the business of national banks. * * * Competition in the sense intended arises not from the character of the business of those who compete but from the manner of the employment of the capital at their command.”

Again: Our conclusion is that § 5219 is violated wherever capital, substantial in amount when compared with the capitalization of national banks, is employed either in a business or by private investors in the same sort of transactions as those in which national banks engage and in the same locality in which they do business.”

The competition found as a fact in that case was the loaning of money on the security of notes, bonds and mortgages and the buying and selling of securities, all involving the investment and reinvestment by individuals, firms and corporations and their customers.

What is the business of the relator? It is stated fully in the findings of the trial court, with which there is no disagreement.

The principal business of the Morris Plan Company of Buffalo was the lending of money. For the years covered by the assessment, the loans were made upon promissory notes running for one year, bearing interest at six per cent per annum, which interest relator exacted in advance, and to secure which notes the borrower in each case assigned to the relator a contract, called an installment investment certificate, issued by relator to the borrower at the time of the loan, and by which the borrower agreed to pay relator weekly or monthly sums sufficient to pay the note at maturity. The installment investment certificate taken out by such borrower at the time of the loan had no value other than the agreement of the borrower to pay the amount of the loan in weekly or monthly installments. Upon each loan made upon stock and bonds as collateral security, relator charged from two to one and one-quarter per centum of the amount of the loan, dependent upon the size thereof, to cover the cost of investigation. The company also made loans on promissory notes in sums not exceeding $5,000 for any one loan, secured by the pledge of stocks or bonds as collateral, and upon which loans a charge of six per cent per annum was deducted in advance. Upon loans not made upon collateral security, the company required the signatures upon the promissory note of two persons other than the borrower and the borrower’s husband or wife, all signing as co-makers of the note. Such a note was not required when the loans were made upon stocks or bonds as collateral security.

The Morris Plan Company was in business for profit, making as much as ten per cent per annum upon its invested capital, which consisted solely of money. The trial judge found as a fact that the business of the company was the making of profit by the use of its capital as money invested for that purpose, in Morris Plan promissory notes by way of loan, discount or otherwise; that the loans were from time to time reduced to money and reinvested in other similar notes and loans.

The Morris Plan involves a few distinct features differing from the methods employed by National banks: First, the money is loaned in small amounts to be paid back in one year in monthly installments. As six per cent is deducted at the time of the loan, additional interest is made on the monthly installments that are paid into the company by reinvestment. Also, a charge is made for investigating the borrower. In this way the company receives more than six per cent interest on its yearly loan.

Second, certificates of investment are issued with the loan calling for the monthly payment of an amount sufficient to pay the loan at the end of the year. This certificate is assigned to the company and of course has only the value of the amounts paid back to the lender.

Third, the Morris Plan receives no deposits and does not carry on a banking business.

There are features of the relator’s business which resemble that of National banks:

First, it lends money on notes of the borrower, secured by two indorsers or co-makers. As collateral to this note there is given the installment investment certificate.

Second, the company lends money up to $5,000, taking as collateral stocks or bonds. In this instance no note of the borrower is required, but a certificate of investment is issued, or taken, requiring weekly or monthly payments. In this kind of loan and in the one above mentioned, the Morris Plan calls for the loaning of money on collateral or notes for which interest is charged or a discount made, the loan being repaid by installments instead of in a lump sum at a fixed period.

The brief for the assessors states that National banks in New York city have established a system of making small loans to be repaid in installments. Whether this be so or not, I can find nothing in the Federal Banking Laws to prevent such a practice. As the record, however, before us contains no evidence of this fact, we will disregard it in our determination, and assume that the National banks have not adopted any of the distinctive features of the Morris Plan, as above mentioned.

Nevertheless, the principal underlying fact remains: that the company is in the business of lending its capital to borrowers, on collateral, notes, bonds, stock or certificates of investment, for profit; and that upon payment of the loans it reinvests the moneys. Thus, moneyed capital of the Morris Plan comes into competition with the business of National .banks. That the money may be repaid in installments and advanced on light security may be an attractive feature to the borrower, intensifying the competition; that the State may permit the company to make more than six per cent on its loans is an incident of the business which may attract capital to these companies for capital investment and divert it from the stock of National banks. Whichever way we look at it, the business of the Morris Plan and that of National banks is making money out of loans on notes and collateral security, with some advantages in favor of the Morris Plan, because of its appeal to small borrowers.

Attention may be called in this connection to chapter 286 of the Laws of 1926, which has repealed the section of the Tax Law with which we are dealing, and all other sections providing for a moneyed capital assessment.

The orders of the Appellate Division reversing the Special Term and sustaining the assessment for the years 1923, 1924, 1925 and 1926 are in accordance with our decisions and those of the United States Supreme Court, and must be affirmed.

The orders should be afiirmed, with costs.

Cabdozo, Ch. J., Pound, Lehman,. Kellogg, O’Bbien and Hubbs, JJ., concur.

Orders affirmed.


author: Crane, J.

text:
    The People of the State of New York ex rel. Title and Mortgage Guarantee Company of Buffalo, Respondent, v. William J. Burke et al., as Assessors of the City of Buffalo, Appellants.
    (Argued January 16, 1930;
    decided February 11, 1930.)

      Charles L. Feldman, Corporation Counsel (Herbert A. Hickman of counsel), for appellants.
    To make moneyed capital taxable under the act, it is not necessary that it be employed in all the branches of business which may be transacted by a National bank, but it is sufficient if it comes into competition with one or more of such branches. (People ex rel. Pratt v. Goldfogle, 242 N. Y. 277.) It is not necessary to show that National banks are actually conducting a business with which relator competes; it is enough if it appears that relator engages in one or more branches of business which a National bank is authorized to pursue. (People ex rel. Pratt v. Goldfogle, 242 N. Y. 277.) Moneyed capital used, as a business, in making mortgage loans on city and farm property competes with the business of National banks. (People ex rel. Pratt v. Goldfogle, 242 N. Y. 277; First Nat. Bank v. City of Hartford, 273 U. S. 548; State of Minnesota v. First Nat. Bank, 273 U. S. 561.)

      Myron S. Short and Be Witt Clinton for respondent.
    The findings of fact and conclusions of law made at Special Term do not violate any rule of law. (People ex rel. Pratt v. Goldfogle, 242 N. Y. 277; First Nat. Bank v. City of Hartford, 273 U. S. 548.)
   Crane, J.

This is a companion case to People ex rel. Morris Plan Co. of Buffalo v. Burke (253 N. Y. 85), except that the facts are somewhat different.

The Title and Mortgage Guarantee Company of Buffalo is engaged in the business of making first mortgage loans on improved real estate situated in various cities of the State, and of selling such mortgage loans to the public. It is incorporated under the Insurance Law of the State of New York, with its principal office in the city of Buffalo. The total contingent liability of the relator on the 1st day of May, 1926, on account of its outstanding guarantees on mortgages and mortgage certificates sold by it was $5,745,950 on mortgages, and $2,813,947.50 on mortgage certificates. Its surplus on that date was $181,606.80. The company was assessed on its moneyed capital, pursuant to section 14 of the Tax Law (Laws of 1923, ch. 897; Cons. Laws, ch. 60), in the sum of $225,000 as of October 1, 1926.

The business of the Title and Mortgage Guarantee Company of Buffalo is the making of tax and title searches, insuring titles to real estate, making of mortgages on real property and the sale of such mortgages or mortgage certificates for parts thereof with guarantee of title and the payment of both the principal and interest represented thereby. The mortgages made and guaranteed are for a term of three years or more. It makes no loans on farm property. The company is authorized to loan money on mortgages to the extent of sixty-six and two-thirds per cent of the appraised value of the real estate. No banking business is carried on by the company, nor does it receive deposits or make loans of money on collateral, nor buy or sell bills of exchange; neither does it deal in negotiable securities issued by the governments — State or National — or by any municipality or other corporation.

T'o summarize for the purpose of comparison: The relator loans large sums of money upon bond and mortgage, guaranteeing the payment of principal and interest and the validity of the title to the land in the borrower.

What may a National bank do? It may also loan money on bond and mortgage under certain conditions. The provisions of the Federal law are to be found in Title 12 (Banks and Banking), chapter 3, section 371 of Mason’s United States Code, Annotated, 1926, volume 1:

“ 371. Loans on farm lands and improved real estate. Any national banking association not situated in a central reserve city may make loans secured by improved and unencumbered farm land situated within its Federal reserve district or within a radius of one hundred miles of the place in which such bank is located, irrespective of district lines, and may also make loans secured by improved and unencumbered real estate located within one hundred miles of the place in which such bank is located, irrespective of district Unes; but no loan made upon the security of such farm land shall be made for a longer time than five years, and no loan made upon the security of such real estate as distinguished from farm land shall be made for a longer time than one year nor shall the amount of any such loan, whether upon such farm land or upon such real estate, exceed 50 per centum of the actual value of the property offered as security. Any such bank may make such loans, whether secured by such farm land or such real estate, in an aggregate sum equal tp 25 per centum of its capital and surplus or to one-third of its time deposits and such banks may continue hereafter as heretofore to receive time deposits and to pay interest on the same.

The Federal Reserve Board shall have power from time to time to add to the list of cities in which national banks shall not be permitted to make loans secured upon real estate in the manner described in this section. (Dec. 23, 1913, c. 6, Sec. 24, 38 Stat. 273; Sept. 7, 1916, c. 461, 39 Stat. 754.) ”

This section has been amended by an act of February 25, 1927, chapter 191, section 16, 44 Statute, 1232 (Mason’s U. S. Code, Anno., Supp. No. 1, 1925-1929, p. 205), but the amendment is inapplicable here.

With National banks the loan is limited in time and also to fifty per cent of the actual value of the property offered as security. Neither can these banks guarantee the payment of principal and interest, nor the soundness of the title. Here again we have, as in People ex rel. Morris Plan Co. of Buffalo v. Burke (supra) two corporations doing fundamentally the same class of business, with material distinctions. The title company and the National bank loan money on bond and mortgage. To this extent at least the moneyed capital of the relator comes into competition with the business of National banks. Do the methods adopted by the title company, or the incidental differences in the extent or security of the loan affect this competition?

For the reasons stated in the opinion handed down herewith in People ex rel. Morris Plan Co. of Buffalo v. Burke, we think not. The guarantee of the payment of principal and interest of the mortgage loan, the larger amount which may be loaned upon the particular property, and the length of time for which the loan may be made are incidents or differences which work to the advantage of the Title and Mortgage Guarantee Company, and necessarily narrow the field for the money output of National banks. (People ex rel. Pratt v. Goldfogle, 242 N. Y. 277; First National Bank v. City of Hartford, 273 U. S. 548, p. 555.) The money of the one nevertheless, competes with the business of the other or the business which it might do but for these advantages.

The order of the Appellate Division and that of the Special Term should be reversed, and the assessment reinstated, with costs in all courts.

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

Orders reversed, etc.


author: Crane, J. O’Brien, J.

text:
    In the Matter of the Claim of Katherine Andrews, Respondent, against L. & S. Amusement Corporation et al., Appellants. The State Industrial Board, Respondent.
    (Submitted January 6, 1930;
    decided February 11, 1930.)

      Jeremiah F. Connor and II. C. Houlihan for appellants.
    The injury which resulted in the death of the employee was hot due to. any incident connected with the employment, and did not arise out of the employment. (Matter of Heitz v. Ruppert, 218 N. Y. 148; Matter of Scholtzhauer v. C. & L. Lunch Co., 233 N. Y. 12; Rogers v. Paisley School Board, 49 Scot. Law Rep. 413; 5 B. W. C. C. 547; Wright & Greig, Ltd., v. McKendry, 11 B. W. C. C. 402; Matter of Collins v. Brooklyn Union Gas Co., 171 App. Div. 381; Swansea Vale v. Rice, 4 B. W. C. C. 298; Matter of Dow, 231 Mass. 348; Carroll v. What Cheer Stables Co., 38 R. I. 421; Board of Commissioners v. Shertner, 73 Ind. App. 589; Matter of McCarter v. La Rock, 240 N. Y. 282.)

      Hamilton Ward, Attorney-General (E. C. Aiken of counsel), for respondent.
    The award should be affirmed. (Myusert v. Albany Builders Supply Co., 250 N. Y. 21.)
   Crane, J.

On the 20th of August, 1928, Leslie Andrews resided at 91 Brook street, Tompkinsville, Staten Island, and was employed as a handy man by the L. & S. Amusement Corporation, with office and principal place of business located at 120 Victory boulevard, Staten Island, N. Y. The employer was engaged in operating a theatre. On that day Leslie Andrews was hired to paint the marquise. He asked one Van Mersereau, a fellow-employee, for a pail of water, and they both walked toward the faucet along the alleyway at the corner of the building. Mersereau was carrying the pail. While thus proceeding, Andrews was taken with a fit. Mersereau describes it by saying that he saw the rolling of his eyes and the white stuff coming from his mouth. Andrews fell striking his head on the sidewalk, made of concrete. The State Industrial Board found as a fact that Andrews had an epileptic seizure which caused him to fall, and in falling his head struck the cement sidewalk, whereupon he sustained injuries in the nature of a fractured skull, from which he died on the same day.” The Board made an award upon a finding that death resulted from accidental injuries arising out of and in the course of employment. The Appellate Division has affirmed by a divided court, upon the authority of Matter of Mausert v. Albany Builders Supply Co. (250 N. Y. 21). There is a distinction between that case and the one now on appeal.

' Mausert, who was a teamster, fell from the seat of his truck to the pavement, the wheels passing over his body, causing death. He was in the course of his employment, and we held that his death arose out of his employment. The risk of faffing from the seat of a truck and being injured was incident to and a risk of his employment. Every day that he was driving this truck there was the risk or danger that he might fall off, while careless or asleep, and be injured either by the horses, other vehicles or his own. This risk, we said in the opinion, would not surround him while sitting in a chair in his home, or upon the ground, or even while walking the streets. It was as a teamster that he incurred the risks. Matter of Barath v. Arnold Paint Co. (238 N. Y. 625), cited in the Mausert opinion, was another injury resulting from apoplectic stroke, the fall in that case being from a scaffold, causing a fractured skull. The conclusion there was that the risk or danger was one arising out of the employment because the loss of control through apoplexy while on a scaffold would result in a serious fall. The place of work increased the risk and danger from such an affliction.

None of these added risks or dangers are found in the facts of this case. Andrews was on the sidewalk; he had not commenced his painting; he was walking with his co-employee to get a pail of water. The epileptic seizure caused him to fall to the sidewalk, striking his head and fracturing the skull. Where was there any added risk due to the employment? The same result might have followed if he had been coming to or going from his employment, or even in his own house, if he had fallen and struck his head on a chair, table or other hard substance. If the epileptic fit itself had killed him, like an attack of heart disease, all concede that there would be no recovery. The risk of falling to the pavement in such a fit was not due to the employment. Had Andrews fallen from a ladder, from a scaffold, from a stairway or down a hole, the chances of injury would have been increased. If there had been an accident causing his fall, we would have another element in the case. There was no accident; he fell because of internal disorders, and the injury resulted from no added risk because of his employment. This distinction runs through many cases. (See Matter of Collins v. Brooklyn Union Gas Co., 171 App. Div. 381; Matter of Hansen v. Turner Construction Co., 224 N. Y. 331; Carroll v. What Cheer Stables Co., 38 R. I. 421; Bd. of Commissioners of Greene Co. v. Shertzer, 73 Ind. App. 589.)

On very similar facts, the Court of Session in Scotland, in Rodger v. School Board of Paisley (49 Scot. Law Rep. [1911, 1912], p. 413), held that death did not arise out of the employment. • After delivering a message, William Rodger, a workman, was returning to his place of employment in Paisley. He was janitor at the North Public School at Paisley and had been sent by the school authorities to deliver a message. He became faint, leaned his hands against the wall of a house, and then fell backwards, striking his head violently upon the stone pavement. The cause of death was the fall, either from giddiness or faintness, brought on by the excessive heat of the day. The Lord President said: “ I do not think that his employment in any way subjected him to the particular class of accident in consequence of which he died. * * * He might have had this fainting fit in his own room and fallen against the fender, and he might on the other hand have fallen upon a soft rug in a room and upon some comparatively soft surface in the street.

“ And this case is entirely distinguished, I think, from the other class of case where the particular situation in which a man is put makes the fall more than usually dangerous, such as the case where the man was standing near the hold of a ship, being obliged to be there by his occupation, and fell down the deep hold and hurt himself. * * * This man was hurt in going along an ordinary street. It was absolute chance that the pavement at that particular place, as it happened, was paving stone which cracked his head.”

The case of Thom v. Sinclair (in the House of Lords) ([1917] App. Cas. 127) is exactly the same as Matter of Fillitti v. Lerode Homes Corp. (244 N. Y. 291). These were cases of falling walls, and in both it was held that the place of work was a risk arising out of the employment.

Dennis v. White & Co. (in the House of Lords) ([1917] App. Cas. 479) is similar to a long line of cases in this court, relating to “ street employment.” Where the work of an employee causes him to ride a bicycle through a street or to cross highways in the continuous performance of his work, here also is a risk which we have recognized as arising out of the employment. . Such is the Dennis case. :

In Upton v. Great Central Ry. Co. ([1924] App. Cas. 302) an employee of a railway was directed to travel to a station to repair a water main. As the train came in, he hurried across the platform to reach the train and slipped and hurt his knee, resulting in his death. An award was sustained. It would be sustained by us. We have such cases frequently. The man slipped and fell; there was .an accident. A difference exists between such a case and one where a man falls because of internal troubles in no way due to, or caused by his employment. All of these three cases are in harmony with everything that our court has decided. The Rodger case is not referred to in any of these opinions because it has nothing to do with the point.

Wright & Greig, Ltd., v. M’Kendry (Court of Session, Scotland) ([1918] 11 Butterworth’s Workmen’s Compensation Cases, 402) does not overrule the Rodger case, but distinguishes it.

M’Kendry fell and struck his head, fracturing his skull. There was no evidence as to the cause of the fall, but it was assumed to have been caused by a uraemic fit. An awa d was sustained on the ground that he was injured in an accident arising out of his employment, and strange to say, the Thom case and the Rodger case are cited as authorities for the holding. The court said: “ The circumstances of Rodger’s case, in my opinion essentially distinguish it from the present. The fall happened on the public street. The janitor there differed in no material respect from any other passenger on the King’s highway. The fact that he was on a message for his employers in no sense distinguished him, so far as risk or danger was concerned, from any other passenger or added to his risk.” I doubt if we would have made this distinction.

Following, therefore, the distinction which has been drawn by this line of cases, and realizing that the Workmen’s Compensation Law has not yet been extended to diseases which cause a man’s death, unaccompanied by any added risk due to the employment, the order of the Appellate Division should be reversed and the claim dismissed, with costs against the State Industrial Board in this court and in the Appellate Division.

O’Brien, J.

(dissenting). Leslie Andrews worked as a painter for appellant and, while engaged in the course of his employment, he was seized with an attack of epilepsy. Falling upon a concrete walk where his duties as painter had taken him, he sustained a fracture of the skull which caused his death. His injury was due to the fact that his employment required him to be in a place where the fall proximately caused the injury. The disposition of this claim by the State Industrial Board and by the Appellate Division in making an award in favor of the dependent mother conforms, I think, with our ruling in Matter of Mausert v. Albany Builders Supply Co. (250 N. Y. 21) and with all other decisions which I can find except that of Rodger v. School Board of Paisley (49 Scot. Law Rep. 413), which has never, prior to our present decision, been accepted by this court and has been virtually overruled by the courts in Scotland and England.

Subjection of the average person to an ordinary risk is no longer one of the tests for determining the question whether the injury arises out of the employment. Whatever the earlier decisions may have been, they are rendered obsolete by such cases as Dennis v. White & Co. ([1917] App. Cas. 479); Thom, v. Sinclair ([1917] App. Cas. 127); Matter of Redner v. Faber & Son (223 N. Y. 379); Matter of Leonbruno v. Champlain Silk Mills (229 N. Y. 470) and Matter of Katz v. Kadans & Co. (232 N. Y. 420). The test is the relation of the service to the injury, of the employment to the risk. (Matter of Leonbruno v. Champlain Silk Mills, supra.) The risk need not be one peculiar to the injured employee nor one from which the general public is exempt. Slipping on an icy road or walk is a hazard to which all are liable, yet, when the work requires exposure to such a risk, the injury arises out of the employment. (Matter of Redner v. Faber & Son, supra; Matter of Lynch v. City of New York, 242 N. Y. 115.) Danger of attack by a lunatic upon the public streets is unusual but, to the extent that such a danger exists, few are free from it. If the work involves exposure to this peril, if the workman is in the place of danger by reason of his employment, the injury arises out of the employment. (Matter of Katz v. Kadans & Co., supra.) Every one seeking shelter under a tree during a thunder storm is in peril of death by lightning. When a workman, employed as a road builder, finds such shelter and his death results from a stroke of lightning, it arises out of his employment. (Matter of Madura v. City of New York, 238 N. Y. 214.) This cause of an injury growing out of the employment must be immediate and proximate like poison, drowning, a blow or a fall resulting in some injury, or a similar force of exterior origin. It must, of course, bear a reasonable relation to the employment. An illness growing out of conditions foreign to the employment and creating no injury is not compensable. An illustration is found in Matter of Hansen v. Turner Construction Co. (224 N. Y. 331) where death was due solely to apoplexy without evidence of a fracture, a concussion or other injury. Given the injury, however, all remote conditions or events which have put in operation the proximate cause of actual injury may be disregarded. WThen a workman, seized with an attack of apoplexy, falls from a scaffold and fractures his skull (Matter of Barath v. Arnold Paint Co., 238 N. Y. 625) or when another, in a fainting fit, falls from a wagon seat and sustains an injury of the same character (Matter of Mausert v. Albany Builders’ Supply Co., supra), the illness, which preceded the injury and constituted the proximate cause of the fall but only the remote cause of the injury, may be ignored. One afflicted by disease is not penalized by the statute. Any healthy man who, by accident and through sheer stupidity and clumsiness not due solely to intoxication, sustains an injury in the course of and arising out of his employment is entitled to compensation. An employee,. whose wage consists of car fares and the price of a drink, falls down stairs. For the fatal injury resulting from this usual accident, common to all who neglect observance of elementary caution, the workman’s widow was repaid. (Matter of Greib v. Hammerle, 222 N. Y. 382.) A laborer, employed by a railroad company, hurries across a platform which is in perfect order, falls and hurts his knee. The House of Lords, rejecting the suggestion that the platform was slippery, held that the widow was entitled to recover on the principle that the injury arose out of the employment. (Upton v. Great Central Ry. Co., [1924] App. Cas. 302.)

In one jurisdiction the opposite view was taken on a single occasion. In Rodger v. School Board of Paisley (supra), decided in 1912, the Court of Session in Scotland upheld the doctrine contrary to the one since adopted. Six years later it was cited as an authority by the employer but it was so distinguished by the court as to be substantially overruled in Wright & Greig v. McKendry (11 B. W. C. C. 402,417). The principle of the McKendry case, to which reference is made in our opinion in the Mausert case, cannot be distinguished from that now before us. The facts are nearly identical. There, as here, the workman was seized with a fit, fell on a concrete floor and fractured his skull. A minute difference in the facts may be perceived in the cause of the fall, one being due to a uraemic fit, the other to epilepsy, and in the cause of the fractured skull, one being a concrete floor and the other a concrete walk. The court held that death was caused by accident arising out of his employment because, as stated by one of the judges, it was due to a condition of the particular place where his employment required him to be at the time.” Two of the judges referred to Bodger’s case in such terms as to intimate, without actually asserting, that it had been overruled by Thom v. Sinclair (supra). A fourth member of the court observed in respect to Bodger’s case: “ Unfortunately this case was not referred to in Thom or Simpson v. Sinclair, although Lord Kinnear was a party to both judgments.” Since the decision in Wright & Greig v. McKendry, the Bodger case has lost all force as an authority. The principle of the McKend/ry case was approved by the House of Lords in Upton v. Great Central Ry. Co. (supra), the decision in which was rendered in 1923. Counsel for the respondent there cited Bodger v. School Board of Paisley in support of his contention that the injury did not arise out of the employment but Viscount Haldane expressed his opinion to be that the injury so arises when there has been injury by accident arising out of what the workman had to do, merely because of the conditions of his employment, as distinguished from being directly physically caused by it.” He referred to the change of judicial attitude as displayed by the authorities subsequent to the year 1917 among which he mentioned Thom v. Sinclair ([1917] App. Cas. 127), Stewart & Son v. Longhurst ([1917] App. Cas. 249) and Davidson & Co. v. M’Robb ([1918] App. Cas. 304) and he added: “ I think that the interpretation which I have placed on the language of the statute in reference to the kind of causal relation required, whether or not it is wholly consistent with some earlier interpretations here and in Scotland, is at least in harmony with the views authoritatively expressed in this House in the decisions I have quoted and in others which followed them later.” Lord Atkinson in a concurring opinion approvingly commented on Frazer v. Riddell & Co. ([1913] 7 B. W. C. C. 841) where an engine driver’s fall from his engine was due to intoxication and stated that this fact did not preclude compensation to his widow, intoxication, under the English statute, not being in itself a defense in fatal accidents. He made reference also to Wright & Greig v. McKendry and stated that the concrete floor upon which the workman fell in a fit and fractured his skull was not found to be dangerous on which to walk.

Therefore, it follows, from the decisions of our own court as well as the later English and Scottish decisions, that an injury received in the course of employment does not cease to be one arising out of the employment merely because some infirmity due to disease has originally set in action the final and proximate cause of the injury. The principle of the Barath case is not based upon the fact that the workman fell from a scaffold nor does the doctrine of the Mausert case depend upon the element of a fall from a wagon seat. I can find in the Mausert opinion no reference to compensability or lack of it, if the injured workman had been “walking the streets.” The theory of both cases is that, in spite of the fact that an illness of some nature set in motion and exclusively induced the fall, the workman received an injury which was due to the place where his duty of employment required his presence. The distance which the body of the injured workmen descends until it comes in contact with the substance which causes injury is entitled to no consideration. One may fall from a considerable height upon soft ground and sustain, no injury. Another may fall only the length of his body upon a rock and receive a mortal wound. A hole constitutes no greater hazard than a concrete floor or a railroad platform. What distinction in principle can be drawn between a concrete floor and a concrete walk? The question always is: Did the workman’s employment require him to be in the place, whether a floor or a walk or other structure, which caused his injury? A weak ankle is not regarded by the courts of this State or of England as an asset for the recovery of compensation superior to a weak heart. A man carries with him all his disabilities, either those of age or of some other nature, and the fact that he has them does not destroy his right to recovery. (Wicks v. Dowell & Co., Ltd., [1905] 2 K. B. 225, 231.)

I vote to affirm the order of the Appellate Division.

Pound, Lehman, Kellogg and Hubbs, JJ., concur with Crane, J.; O’Brien, J., dissents in opinion in which Cardozo, Ch. J., concurs.

Order reversed, etc.


author: Hubbs, J.

text:
    In the Matter of the Claim of James Dowling against Church E. Gates & Co. et al., Respondents. The State Industrial Board, Appellant.
    (Submitted January 6, 1930;
    decided February 11, 1930.)

      Hamilton Ward, Attorney-General {E, C, Aiken of couth sel), for appellant,

      Dickinson S. Talley for respondents.
    The award is properly made for 100 per cent of the foot and not for 90 per cent of the leg. (Stein v. Topal, 217 App. Div. 797; Tannenbaum v. Baudouine, 218 App. Div. 792; Murray v. Subway Co., 211 App. Div. 811.)
   Hubbs, J.

Claimant received an injury to his foot which injury arose out of and in the course of his employment. The injury necessitated the amputation of the right leg about six inches below the knee. As a result of the amputation there is atrophy of the soft tissues, crepitation at the knee joint and a slight defect in external and internal rotation at the hip. The accident itself did not cause any immediate injury to the knee or hip. The State Industrial Board has found that such loss of function of the leg developed as a natural and unavoidable result of the accidental injury to the foot and that such limitation of the use of the leg is permanent. It made an award for ninety per cent of the permanent loss of the use of the right leg. The Appellate Division has reduced the recovery to the amount recoverable for the schedule loss of a foot.

It is urged by the State Industrial Board that the reduction of the amount of the award was unjustified. Paragraph O of subdivision 3 of section 15 of the Workmen’s Compensation Law (Cons. Laws, ch. 67) at the time of the injury read as follows: O. Amputated arm or leg. Compensation for an arm or a leg, if amputated at or above the elbow or the knee, shall be the same as for loss of the arm or leg; but, if amputated between the elbow and the wrist or the knee and the ankle, shall be the same as for loss of a hand or foot.”

It seems clear that the amount of an award for the loss and deprivation caused by the accident, the amputation, and the usual results thereof, is fixed and limited by paragraph O to an award for the loss of the foot. The Legislature must have had in mind that there are certain usual and expected changes in the part of a leg remaining after the amputation of a foot, changes which are the natural consequences of the loss of a foot. It would seem that there must always be some atrophy of the soft issues caused by the amputation and disuse of the leg. For resulting conditions which are usual and foreseeable the Legislature did not intend that there should be compensation awarded in addition to or greater than that provided for in paragraph 0, and such has been the construction placed upon that paragraph. (Matter of Stein v. Topol, 217 App. Div. 797.)

Compensation is not, however, limited to the amount payable for the loss of a foot in all cases where there has been an amputation of the foot within the meaning of paragraph 0. There may be associated injuries or conditions resulting from the injury and amputation which will entitle a claimant to a larger award than that provided for the loss of a foot. The fact that an award has been made for the loss of a foot does not prevent the reopening of the claim and the granting of a larger award if the facts justify it. In Matter of Rothwell v. Shipley Construction & Supply Co. (244 N. Y. 558) the .claimant suffered an injury to his leg, which caused a partial loss of its use. He received an award therefor. Thereafter he became insane as a result of worry and mental anxiety caused by the injury. The case was reopened and he was granted an award for total disability. The award was affirmed by the Appellate Division and by this court.

A claimant who has suffered a schedule injury covered by subdivision 3 of section 15 is entitled only to an award of the amount specified in the schedule for such injury in case the effect of the injury is the usual and expected effect. If, however, some unusual and extraordinary condition develops as a result of the injury the fact that the original injury is covered by the schedule does not prevent an award for the actual, although unusual and unexpected, condition which has developed as a result of the accident. The amputation of a foot may result in blood poisoning, paralysis or death. They are not the usual results of the injury and operation, although they may be the natural and unavoidable results in particular cases. When such an unusual and unexpected result occurs, an increased award should be made.

The determination must depend upon the facts in each case. If the facts establish that a claimant is suffering from a serious, unusual and unexpected condition as the result of a schedule injury, he is entitled to an award greater than that provided for such schedule injury. If the condition is the usual and expected result of the injury, the award must be limited to the schedule amount.

The record must disclose the facts upon which an increased award is based. The record in the case at bar does not contain any evidence from which it can be found that the claimant is suffering from any unusual or extraordinary condition as the result of the injury, and the award was properly limited to the amount provided in the schedule. The order of the Appellate Division should be affirmed, with costs against the State Industrial Board.

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

Order affirmed, etc.


text:
    Nellie Lyon et al., Appellants, v. Bethlehem Engineering Corporation et al., Respondents.

      (Argued January 14, 1930;
    decided February 11, 1930.)

      Dominic B. Griffin, James J. McLoughlin and Peter P. Smith for appellants.
    The use of a roof is not impliedly granted to the tenant of a building except for purposes of shelter. (Peats v. Bradley, 166 App. Div. 267; Gude Co. v. Farley, 28 Misc. Rep. 184; Schmidt v. Louis, Inc., 122 Misc. Rep. 249; Brown v. Broadway & 72d St. Realty Corp., 131 App. Div. 780.)

      George W. Alger for respondents.
    In the absence of an express provision in a lease, either forbidding or regulating the attachment of signs, they may be attached to the portion of the premises demised as an incident to its use and the lessee of the whole of a building, unless expressly forbidden, has the right to permit signs to be attached by others than tenants of the building itself. (Brown v. Broadway & 72d St. Realty Corp., 131 App. Div. 780; Baldwin v. Morgan, 43 Hun, 354; Forbes v. Gorman, 159 Mich. 291; Emmons v. Schulte, Inc., 120 Atl. Rep. 221; Lowell v. Strahan, 145 Mass. 1; Riddle v. Litchfield, 53 N. H. 503; City of New York v. Interborough Rapid Transit Co., 125 App. Div. 437.)
   Hubbs, J.

On March 23d, 1922, the plaintiffs leased to the defendant Bethlehem Engineering Corporation certain real property situated on the corner of Broadway and Fifty-first street, in the city of New York, for a term of twenty-one years. The premises were described by metes and bounds. At the time there was a building on the premises. The lessee contracted to demolish the building and build a twelve-story building in place thereof. The lease provides that the building to be erected is to be used for the following purposes, and those only: Restaurant, stores, store-rooms and offices in the first floor and basement; and for offices, showrooms, and sales-rooms for the remaining upper floors, such use of all parts of said premises, however, to conform at all times to the provisions of all laws.”

After the building was erected the lessee assigned the lease to the defendant 1650 Broadway Corporation. It leased to the defendant Roxy Theatres Corporation the right to attach to the roof of the building, and to maintain thereon, an electric sign built of steel, forty feet in height and sixty feet long. The plaintiffs deemed the erection of such a structure on the roof of the building to be a violation of the terms of the lease and commenced this action to enjoin the defendants from erecting, operating or maintaining the same.

A tenant, in the absence of restrictions contained in a lease, may use a leased building in any lawful way not materially different from that to which it is adapted, and for which it was constructed. The right to exclusive occupation granted by a lease entitles a tenant to use the premises in the same manner that the owner might have used them. He must not, however, do anything to the injury of the inheritance or which constitutes waste. (Presby v. Benjamin, 169 N. Y. 377; Bovin v. Galitzka, 250 N. Y. 228.)

The landlord may, however, by express provisions in a lease, limit and restrict the use of a building to specific purposes. He has a legal right to control the uses to which his building may be put and may do so by appropriate provisions in a lease. A landlord who seeks to limit a tenant’s right to the exclusive use and occupation of a building must be able to point to some particular term of the lease which expressly restricts the tenant’s rights. (Round Lake Assn. v. Kellogg, 141 N. Y. 348; Presby v. Benjamin, supra.)

As the lease in question describes the premises by metes and bounds, the lessee became entitled to the exclusive use and possession of the entire premises, the roof of the building as well as the basement. Although the subject of signs was not mentioned in the lease, the lessee, as an incident of the lease, acquired the right to use the roof and side walls of the building for the purpose of placing appropriate signs thereon to advertise any business which might be lawfully carried on in the building under the terms of the lease.

In those cases in which it has been decided the tenant had the right to place a sign on the wall of a leased building the lease did not restrict the rights of the tenant in that respect. (Brown v. Broadway & 72d Street Realty Co., 131 App. Div. 780; Baldwin v. Morgan, 43 Hun, 355; Lowell v. Strahan, 145 Mass. 1; Riddle v. Littlefield, 53 N. H. 503.)

The right has been denied in cases where the.lease contained express restrictions. (0. J.Gude Co. v. Farley, 28 Misc. Rep. 184; Schmitt v. Louis, Inc., 122 Misc. Rep. 249.)

In Peats Co. v. Bradley (166 App. Div. 267) the lease was of one of five stores, contained in a one-story building. One of the several tenants sought to enjoin the landlord and one to whom he had granted the right to place a sign on the roof, from using it for that purpose. It was held that the roof was a common roof, that the landlord was bound to keep it in repair, and that an injunction should not issue. (See MacNair v. Ames, 29 R. I. 45, to the same effect.)

In the case at bar the use and occupation of the building is restricted by express provision of the lease to the purposes therein specified. Any material departure in the use of the building from the purposes specified would constitute a violation of the express terms of the lease. The construction of the sign on the roof of the building advertising a theatre was in violation of the terms of the lease. If that sign could be lawfully constructed by the tenant, a sign advertising any other lawful business could be erected, no matter how distasteful it might be to the landlord, or how much it might cheapen and detract from the appearance of the building. The injury which might result to the landlord is well illustrated by Chief Judge Cardozo in his opinion in Stahl & Jaeger v. Satenstein (233 N. Y. 196), where he wrote: The defendant would have us hold that, without redress, the space occupied by a lawyer may be advertised by signs as devoted to the promotion of a gold mine, and an institute of learning as a wareroom for a proprietary medicine.” He 'added: We are unwilling to believe that the tenant is so helpless.”

It would be strange indeed if the landlord, who, by express terms, has limited the tenant’s rights as to the use and occupancy of the building in question, should be held to be powerless to prevent its use for the purpose to which the defendants have attempted to put it.

A court of equity may, by injunction, prevent the defendants from using the building for a purpose which violates the restrictive covenants of the lease. (Round Lake Assn. v. Kellogg, supra.)

The judgment of the Appellate Division and that of the Special Term should be reversed and judgment directed in favor of the plaintiff for the relief demanded in the complaint, with costs in all courts.

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

Judgment accordingly.


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    Pequot Manufacturing Corporation, Appellant, v. The Equitable Life Assurance Society of the United States, Respondent.
    (Argued January 15, 1930;
    decided February 11, 1930.)

      Alvin C. Cass and Arnold Gross for appellant.
    The policies became automatically extended under option c at their face values for a shortened period because defendant failed to establish that insured’s letter was a sufficient choice of another option. (Poel v. Brunswick-Balke-Collender Co., 216 N. Y. 310.) The defendant’s answer to the insured’s letter constituted a temporary refusal to issue the new insurance until the happening of a stated contingency and defendant cannot be heard to say, after the loss had occurred, that it had unreservedly issued that insurance. (Boutwell v. Globe & Rutgers Fire Ins. Co., 193 N. Y. 323; Petterson v. Pattberg, 248 N. Y. 86; Lowell v. St. Louis Mutual Life Ins. Co., 111 U. S. 264; Thompson v. Phenix Ins. Co., 136 U. S. 287.) The deferment clause resorted to by the defendant delayed and prevented the integration of a superseding contract of insurance; the insured’s letter constituted nothing more than an application for superseding insurance, the granting of which the defendant could and did defer. (Spencer v. Myers, 150 N. Y. 269; People v. Lacombe, 99 N. Y. 43; Matter of Folsom, 56 N. Y. 60; Surace v. Danna, 248 N. Y. 18; Petterson v. Pattberg, 248 N. Y. 86; Drury’s Administrator v. New York Life Ins. Co., 115 Ky. 681.) The insured’s letter was ambiguous as matter of law. (2 Williston on Contracts, p. 1277; Schwartz v. Cahill, 175 App. Div. 68; Middleworth v. Ordway, 191 N. Y. 404; Surace v. Danna, 248 N. Y. 18.) The court erred in granting defendant’s motion for a directed verdict. (Lamb v. Norcross, 208 N. Y. 427; Henry v. Talcott, 175 N. Y. 385; Hausman v. Buchman, 189 App. Div. 597; United States Rubber Co. v. Silverstein, 229 N. Y. 168.)

      Peter C. Mann and James D. Ewing for respondent.
    After the lapse of the policies, plaintiff and insured elected to take non-participating paid-up life insurance. (Gately-Haire Co. v. Niagara Fire Ins. Co., 221 N. Y. 162; Crown Point Iron Co. v. Ætna Ins. Co., 127 N. Y. 608; McCormick v. Travelers’ Ins. Co., 215 Mo. App. 258.)
   Hubbs, J.

On April 21st, 1925, the defendant assurance society issued two policies of life insurance on the life of Samuel London. The policies were alike and will hereinafter be referred to as the policies. After the policies were issued, the plaintiff, a corporation, became the beneficiary thereof by proper indorsement thereon and also by written assignment executed after the lapse and surrender of the policies. Two premiums were paid, but the premiums which became due on April 14th, 1927, were not paid. The defendant duly extended the time for paying those premiums to June 14th, 1927. Those premiums were not paid and the policies thereby lapsed. On June 14th the insured and the plaintiff, the beneficiary, each wrote a letter to the defendant. The letters were identical in contents and read: Will you please change the enclosed policies to paid up life insurance, and oblige.” On June 17th, 1927, the defendant replied to the insured by letter which read: We note from your letter of June 14th, that it is your intention to have the above mentioned policies converted into paid up life insurance contracts.

In order to enable us to proceed with the transaction, may we ask you to kindly send us a statement as to whether or not the current dividends are to be included in the paid up transaction.

“ Upon receipt of this information, the matter will be given prompt attention.”

On July 11th, 1927, the insured died, without having answered the defendant’s letter. Thereafter, on July 16th, 1927, the defendant indorsed the policies as paid-up non-participating life insurance.

The policies provide that after the payment of two full years’ premiums upon any subsequent default in payment of premiums the insured, within three months after such default, may surrender' the policies and elect one of the following options:

(a) To receive the Cash Surrender Value of this policy; or

“ (b) To purchase non-participating paid-up life insurance payable at the same time and on the same conditions as this policy; or

(c) To continue the insurance for its face amount (and any outstanding dividend additions) as paid up extended term insurance for the period shown in the opposite Table, or for such further period as the dividend additions (if any) will purchase, but without future participation, or right to loans.”

The policies provide for annual dividends and give the insured four options in regard to such dividends:

(1) Take them in cash;

(2) Apply them in payment of premiums;

(3) Use them to purchase paid-up additional insurance;

(4) Leave them to accumulate at interest.

If the insured fails to elect which option he desires to accept within three months after notice, the dividends are automatically applied to purchase paid-up additional insurance, specified by the terms of the policies.

The question for determination is whether the plaintiff is entitled to recover paid-up life insurance under option (b) or extended term insurance under option (c). If it is entitled to recover paid-up fife insurance under option

(b) it is entitled to $1,656. If it can recover under option

(c) it is entitled to more than $22,000, as the insured died within the time of the extended term period if he had selected option (c).

The position of the plaintiff is that there was no effective election by the insured of which option (b) or(c), he chose to have applied, and, therefore, that option (c) for paid-up

extended term insurance for the face of the policies automatically applied under the terms of the policies and under section 88 of the Insurance Law (Cons. Laws, ch. 28). The policies provide: “In the event of default in the payment of any premium or installment thereof * * * if the insured (or assignee, if any) does not select one of said options (a, b or c) within three months of such default, the insurance shall be continued as provided under option (c).” Such position is based upon the contention that the insured’s letter of June 14th, 1927, to the defendant, “ Will you please change the enclosed policies to paid-up life insurance, and oblige,” is ambiguous and may be understood as applying to either option (b) or (c); or at least that it does not make an effective election of option (b) and, therefore, option (c) automatically applies; also that said letter did not constitute an election because it did not direct what disposition should be made of the current dividends, whether to be taken in cash by the insured under option (1), to be used to purchase paid-up additional insurance under option (2), paid-up extended term insurance under option (3) or left on interest under option (4). It is also urged that the provision of the policies granting the defendant the right to defer action for ninety days, on an application for “ the granting of any surrender value ” is applicable, and that defendant’s letter to the insured under date of June ,17th, asking for instructions as to the application of accrued dividends establishes that the defendant, under that provision of the policy, had deferred action on the insured’s request to have the policies changed to paid-up life insurance, and that it did not take action thereon prior to the insured’s death, and, therefore, that there had been no effective election by the insured which had been accepted by the defendant and option (c) for paid-up extended term insurance must apply. The deferment clause of the policies reads: “ Payment of Surrender Value. The granting of any surrender value under this policy may be deferred by the Society for a period not exceeding ninety days after receipt of application therefor.”

The argument of the appellant proceeds upon the theory that the defendant was required to take some affirmative action after receipt of the letter of June 14th requesting that the policy be changed to paid-up life insurance.

The right granted by the terms of the policies to the insured upon the lapsing of the policies to select one of the three options is in the nature of a continuing binding provision, a vital part of the contracts, required as to options (b) and (c) by section 88 of the Insurance Law. It is self-operating in so far as the defendant is concerned. When the insured communicated bis election of the option which he desired to take, that part of the contract was closed. The defendant was not required to do anything. The policies automatically became paid-up life insurance policies for the amount specified in the table contained in the policies, which states the amount .of paid-up insurance which the policies represent at the date when they lapse. (Gately-Haire Co., Inc., v. Niagara Fire Ins. Co., 221 N. Y. 162.) Whatever entries the defendant made upon its books or upon the policies were simply evidences of the transaction, part of the machinery used in doing the business, and did not and could not affect the legal rights and obligations of the parties. Those rights and obligations were definitely fixed by the terms of the contracts.

The deferment clause of the policies had no application for there was nothing to be deferred. That part of the contracts was closed. If, ■ however, the assured had accepted option (a), to receive the cash surrender value of this policy,” the defendant would have had the right, if it so elected, to defer the payment of such cash surrender value for a period of ninety days. The selection of the option desired would have been immediately effective upon notice to the defendant, but the defendant would have had the right under the deferment clause to refrain from paying the amount of such cash surrender value as fixed by the table of payments contained in the policies for a period of ninety days.

Insured’s letter of June 14th to the defendant inclosed the policies and said, Will you please change the enclosed policies to paid-up fife insurance, and oblige.” The words of the letter are those used in option (b), paid-up life insurance,” and have a well-understood, definite meaning. In McQuitty v. Continental Life Ins. Co. (15 R. I. 573) it is said a paid-up insurance policy is one reduced to an amount corresponding to the premiums paid, so that no further premiums are required.”

In Nichols v. Mutual Life Ins. Co. (176 Mo. 355) the statute under consideration provided that in no instance shall a policy be forfeited for non-payment of premiums after the payment of three annual premiums thereon, but in all instances where three annual premiums shall have been paid on the policy of insurance a holder of such policy shall be entitled to paid-up insurance. The court held that the term paid-up insurance ” meant insurance for life, fully paid-up, and not paid-up temporary insurance.

It is difficult to see how there can be ambiguity in the language used. The insured had permitted the policies to lapse. There were three- valuable options under the policies. He had a right to choose one. Certainly he did not intend to choose option (a), to take the cash surrender'value of the policies. Option (c) permitted him to continue the insurance for its face amount as paid-up extended term insurance for the period specified in the table printed in the policies. The letter did not ask for extended term insurance, which is entirely different than paid-up life insurance. Extended term insurance is for the face of the policy for such a term as the reserve apportioned to the policy will purchase, as shown by the table printed in the policy. When the term expires all rights under the policy are at an end. The term insurance which the insured would have been entitled to when the policies lapsed, after applying accrued dividends, would have been approximately twenty months. The amount of paid-up insurance was $1,656. ■

The letter of June 14th, asking for paid-up life insurance, is unambiguous and constituted a definite election of option (b) and cannot, under the facts in this case, be changed after the insured’s death.

In addition to the cash surrender value, paid-up insurance, and extended term insurance options, based upon the reserve apportioned to the policy, from which the assured had a right to select, he also was entitled to a sum apportioned to the policies as current dividends. Having elected to take option (b), paid-up life insurance, he could not elect to have such current dividends used to purchase extended term insurance. He could either take such current dividends in cash, use the amount to purchase additional paid-up insurance, or leave the dividends on interest. His letter of June 14th did not specify how he desired to use the current dividends. Defendant’s letter of June 17th was simply a request to be advised as to what he wished to have done with the current dividends. It in no way affected insured’s selection of option (b) as the option which he desired to have applied. As the insured did not advise the defendant about the application of current dividends, it applied them to the purchase of paid-up insurance, thereby increasing the amount payable to the beneficiary over the amount which it would have received if the current dividends had been paid in cash.

The trial court was right in directing judgment in favor of the plaintiff for the amount of paid-up life insurance. The judgment should be affirmed, with costs.

Cabdozo, Ch. J., Pound, Ckane, Lehman, Kellogg and O’Bbien, JJ., concur.

Judgment affirmed.


text:
    Irene Johnson, as Administratrix of the Estate of John S. Johnson, Deceased, Respondent, v. Frederick Lutz et al., Copartners under the Firm Name of Chas, Lutz & Sons, Appellants.
    (Argued January 17, 1930;
    decided February 11, 1930.)

      E. J. Dimock and B. L. Visscher for appellants.
    The policeman’s report fulfilled the requirements for admissibility laid down in section 374-a of the Civil Practice Act. (Mayor v. Second Ave. R. R. Co., 102 N. Y. 572.) The facts stated in the policeman’s report were competent evidence. (Hallahan v. N. Y., L. E. & W. R. R. Co., 102 N. Y. 194.) .

      Joseph Danziger and Leon Starr for respondent.
    The intent of section 374-a is to permit the introduction in evidence of records made in the usual course of business without the necessity of producing all the witnesses who participated in the making thereof, provided the final entry was the result of information imparted by the individuals as part of a duty, not voluntarily or casually. The police report does not meet the latter requirement and was properly excluded. (Mayor v. Second Ave. R. R. Co., 102 N. Y. 572; Psoia v. Long Island R. R. Co., 246 N. Y. 388; Richardson, Outlines of Evidence, p. 174; Chesapeake & Ohio Ry. Co. v. Stojanowski, 191 Fed. Rep. 720.) The exclusion of the police report was proper, and even if erroneous, does not constitute reversible error. (Hallahan v. N. Y., L. E. & W. R. R. Co., 102 N. Y. 194; Cooper v. Wait, 8 Wkly. Dig. 367.)
   Hubbs, J.

This action is to recover damages for the wrongful death of the plaintiff’s intestate, who was killed when his motorcycle came into collision with the defendants’ truck at a street intersection. There was a sharp conflict in the testimony in regard to the circumstances under which the collision took place. A policeman’s report of the accident filed by him in the station house was offered in evidence by the defendants under section 374-a of the Civil Practice Act and was excluded. The sole ground for reversal urged by the appellants is that said report was erroneously excluded. That section reads: “Any writing or record, whether in the form of an entry in a book or otherwise, made as a memorandum or record of any act, transaction, occurrence or event, shall be admissible in evidence in proof of said act, transaction, occurrence or event, if the trial judge shall find that it was made in the regular course of any business, and that it was the regular course of such business to make such memorandum or record at the time of such act, transaction, occurrence or event, or within a reasonable time thereafter. All other circumstances of the making of such writing or record, including lack of personal knowledge by the entrant or maker, may be shown to affect its weight, but they shall not affect its admissibility. The term business shall include business, profession, occupation and calling of every kind.”

Prior to the decision in the well-known case of Vosburgh v. Thayer (12 Johns. 461), decided in 1815, shopbooks could not be introduced in evidence to prove an account. The decision in that case established that they were admissible where preliminary proof could be made that there were regular dealings between the parties, that the plaintiff kept honest and fair books, that some of the articles charged had been delivered, and that the plaintiff kept no clerk. At that time it might not have been a hardship to require a shopkeeper who sued to recover an account to furnish the preliminary proof required by that decision. Business was transacted in a comparatively small way, with few if any clerks. Since the decision in that case, it has remained the substantial basis of all decisions upon the question in this jurisdiction prior to the enactment in 1928 of section 374-a, Civil Practice Act.

Under modern conditions the limitations upon the right to use books of account, memoranda or records made in the regular course of business, often resulted in a denial of justice, and usually in annoyance, expense and waste of time and energy. A rule of evidence that was practical a century ago had become obsolete. The situation was appreciated and attention was called to it by the courts and text writers. (Woods Practice Evidence [2d ed.], 377; 3 Wigmore on Evidence [1923], § 1530.)

The report of the Legal Research Committee of the Commonwealth Fund, published in 1927, by the Yale University Press, under the title “ The Law of Evidence •— Some Proposals for Its Reform,” dealt with the question in chapter 5 under the heading Proof of Business Transactions to Harmonize with Current Business Practice.” That report, based upon extensive research, pointed out the confusion existing in decisions in different jurisdictions. It explained and illustrated the great need of a more practical, workable and uniform rule, adapted to modern business conditions and practices. The chapter is devoted to a discussion of the pressing need of a rule of evidence which would give evidential credit to the books upon which the mercantile and industrial world relies in the conduct of business.” At the close of the chapter the committee proposed a statute to be enacted in all jurisdictions. In compliance with such proposal the Legislature enacted section 374-a of the Civil Practice Act in the very words used by the committee.

It is apparent that the Legislature enacted section 374-a to carry out the purpose announced in the report of the committee. That purpose was to secure the enactment of a statute which would afford a more workable rule of evidence in the proof of business transactions under existing business conditions.

In view of the history of section 374-a and the purpose for which it was enacted, it is apparent that it was never intended to apply to a situation like that in the case at bar. The memorandum in question was not made in the regular course of any business, profession, occupation or calling. The policeman who made it was not present at the time of the accident. The memorandum was made from hearsay statements of third persons who happened to be present at the scene of the accident when he arrived. It does not appear whether they saw the accident and stated to him what they knew, or stated what some other persons had told them.

The purpose of the Legislature in enacting section 374-a was to permit a writing or record, made in the regular course of business, to be received in evidence without the necessity of calling as witnesses all of the persons who had any part in making it, provided the record was made as a part of the duty of the person making it, or on information imparted by persons who were under a duty to impart such information. The amendment permits the introduction of shopbooks without the necessity of calling all clerks who may have sold different items of account. It was not intended to permit the receipt in evidence of entries based upon voluntary hearsay statements made by third parties not engaged in the business or under any duty in relation thereto. It was said in Mayor, etc., v. Second Ave. R. R. Co. (102 N. Y. 572, at p. 581): It is a proper qualification of the rule admitting such evidence, that the account must have been made in the ordinary course of business, and that it should not be extended so as to admit a mere private memorandum, not made in pursuance of any duty owing by the person making it, or when made upon information derived from another who made the communication casually and voluntarily, and not under the sanction of duty or other obligation.”

An important consideration leading to the amendment was the fact that in the business world credit is given to records made in the course of business by persons who are engaged in the business upon information given by others engaged in the same business as part of their duty.

Such entries are dealt with in that way in the most important undertakings of mercantile and industrial life. They are the ultimate basis of calculation, investment, and general confidence in every business enterprise. Nor does the practical impossibility of obtaining constantly and permanently the verification of every employee affect the trust that is given to such books. It would seem that expedients which the entire commercial world recognizes as safe could be sanctioned, and not discredited, by Courts of justice. When it is a mere question of whether provisional confidence can be placed in a certain class of statements, there cannot profitably and sensibly be one rule for the business world and another for the court-room. The merchant and the manufacturer must not be turned away remediless because methods in which the entire community places a just confidence are a little difficult to reconcile with technical judicial scruples on the part of the same persons who as attorneys have already employed and relied upon the same methods. In short, Courts must here cease to be pedantic and endeavor to be practical.” (3 Wigmore on Evidence [1923], § 1530, p. 278.)

The Legislature has sought by the amendment to make the courts practical. It would be unfortunate not to give the amendment a construction which will enable it to cure the evil complained of and accomplish the purpose for which it was enacted. In construing it we should not, however, permit it to be applied in a case for which it was never intended.

The judgment should be affirmed, with costs.

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

Judgment affirmed.