text:
    In the Matter of the Will of Harvey Chalmers, Deceased. Arthur A. Chalmers, Appellant; David W. Chalmers et al., as Executors of Annie Carr Chalmers, Deceased, et al., Respondents.

      (Argued March 2, 1934;
    decided April 17, 1934.)

      Alfred D. Dennison and Charles S. Nisbet for appellant.
    The remainders to the heirs or next of kin of the deceased daughter could not vest or be determined at the date of testator’s death. (Berlenbach v. Chemical Bank, 235 App. Div. 170; 260 N. Y. 539; Cushman v. Horton, 59 N. Y. 149; Heath v. Hewitt, 127 N. Y. 166; Doctor v. Hughes, 225 N. Y. 305; Matter of Mersereau v. Katz, 200 App. Div. 875; 233 N. Y. 540; Whittemore v. Equitable Trust Co., 162 App. Div. 607; Rasquin v. Hamersley, 152 App. Div. 522; Matter of Kimberly, 150 N. Y. 90; Herzog v. Title Guaranty & Trust Co., 177 N. Y. 86.) The remainders are contingent because futurity is annexed to the substance of the gift. (N. Y. Life Ins. Co. v. Winthrop, 237 N. Y. 93; Matter of Baer, 147 N. Y. 348; Matter of Crane, 164 N. Y. 71; Delaney v. McCormack, 88 N. Y. 174; Delafield v. Shipman, 103 N. Y. 463; Clark v. Cammann, 160 N. Y. 315; Matter of Pulis, 220 N. Y. 196; Matter of Newkirk, 233 App. Div. 168; Metropolitan Trust Co. v. Krans, 186 App. Div. 368; May v. May, 209 App. Div. 19; Salter v. Drowne, 205 N. Y. 204; Watson Realty v. Rothschild, 255 N. Y. 332; Matter of Burrows, 259 N. Y. 449.) The remainderman could not be determined upon the death of the deceased daughter because the bequest is to an uncertain class and futurity is annexed to the substance of the gift. (N. Y. Life Ins. & Trust Co. v. Winthrop, 237 N. Y. 93; Gilliam v. Guaranty Trust Co., 186 N. Y. 127; Bisson v. West Shore R. R. Co., 143 N. Y. 125; Matter of Westchester Trust Co., 173 App. Div. 403; 219 N. Y. 638; Matter of Allen, 151 N. Y. 243; Teed v. Morton, 60 N. Y. 502; Matter of Kimberly, 150 N. Y. 90; Matter of King, 200 N. Y. 189; Magaw v. Field, 48 N. Y. 668; Matter of Barrett, 132 App. Div. 134; Matter of Canfield, 136 Misc. Rep. 551; 256 N. Y. 610.) Heirs at law in the will should not be interpreted next of kin. (Matter of Knapp, 206 App. Div. 260; Cushman v. Horton, 59 N. Y. 149; Matter of Barker, 230 N. Y. 364; Lawton v. Corlies, 127 N. Y. 100; Johnson v. Brasington, 156 N. Y. 181; Wallace v. Diehl, 202 N. Y. 156; Stewart v. Siblett, 235 App. Div. 589.)

      Lawrence B. McKelvey and Daisy Snook Borst, as special guardian, for David W. Chalmers et al., respondents.
    The remainders in question were vested in the widow at the time of her death and passed to the respondents as part of her estate, by virtue of the provisions of her will. (Tompkins v. Verplanck, 10 App. Div. 572; Montignani v. Blade, 145 N. Y. 111; Hope v. Brewer, 136 N. Y. 126.) The law favors the vesting of estates, never presuming, in the absence of clear and unequivocal language, the intent that a bequest or devise shall be deemed contingent or uncertain, either as to beneficiary or otherwise. (Hersee v. Simpson, 154 N. Y. 496; Matter of Lockwood, 192 App. Div. 850; Connelly v. O’Brien, 166 N. Y. 406; Matter of Ossman v. Von Roemer, 221 N. Y. 381; Cammann v. Bailey, 210 N. Y. 19.) Even though the members of the class designated as remainder-men may change by the death of some and the addition of others before the life estate intervening may have actually terminated, the legal title to the remainder vests, subject to being divested or modified by such subsequent event. But it vests, nevertheless, and vests immediately, at the instant of testator’s death. (Matter of Grefe, 140 Misc. Rep. 134; Matter of Graham, 145 Misc. Rep. 628; Matter of Ossman v. Von Roemer, 221 N. Y. 381.) The real intent and purpose of the testator, in so far as the will discloses, is effectuated by the construction adopted by the courts below. (Matter of Bump, 234 N. Y. 60; Nelson v. Russell, 135 N. Y. 137; Matter of Ossman v. Von Roemer, 221 N. Y. 381; Riker v. Gwynne, 201 N. Y. 143; Connolly v. O’Brien, 166 N. Y. 406; Matter of Thomas, 128 Misc. Rep. 260; Matter of Barschall, 146 Misc. Rep. 742; Matter of Woodruff, 135 Misc. Rep. 203; Hersee v. Simpson, 154 N. Y. 496.)
   Lehman, J.

Harvey Chalmers died September 1, 1927. His wife and five children survived. To each child he bequeathed the sum of $30,000 absolutely. Further provision for each of them, to take effect at the death of the testator’s wife, was made in the will, through the establishment of trust funds. The testator’s widow died in January, 1932. One daughter, Mrs. Grace Chalmers Burnap, died before her, leaving no descendants. The trust funds which the testator established for the lives of his wife and deceased daughter must now be distributed. The courts must construe the will to determine to whom the principal passes.

Paragraph IV of the will provides in part: I give and bequeath to my trustees, in trust, however, the sum of Fifty Thousand Dollars and authorize them * * *

to apply the net income therefrom to the support and maintenance of my wife, Annie Chalmers for and during the term of her natural life and from and after her decease to apply the net income therefrom to the support and maintenance of my daughter Grace Chalmers Burnap, for and during the term of her natural life and upon her decease said trust fund to descend to the children and descendants and next of kin of said Grace Chalmers Burnap absolutely.” Each of the other four children was given a similar interest in other trust funds of the same amount.

Paragraph XI of the will provides: "All the rest, residue and remainder of my estate * * * I give, devise and bequeath to my trustees in trust, however, * * * to collect the rents, issues, profits, interest and income therefrom and to pay such rents, issues, profits, interest and income to my wife Annie Chalmers for and during the term of her natural life; and from after the decease of my said wife, I order and direct that my said residuary estate be divided into five equal parts and I give, devise and bequeath one of said parts to my said trustees * * * to receive, take, hold, invest and reinvest such part and to collect the rents, issues, profits and income therefrom and to pay the same to my daughter, Grace Chalmers Burnap, for and dining the term of her natural life, and from and after the decease of my said daughter, I give, devise and bequeath said part to her heirs at law absolutely.”

Under the will, the fund of $50,000 passes upon the death of the life beneficiaries to the " children and descendants and next of kin ” of Grace Chalmers Burnap, and one-fifth part of the residuary estate passes to " her heirs at law.” The description covers the same persons. The testator in using the terms " heirs at law ” and " next of kin ” intended to describe the persons who would take real or personal property in accordance with the provisions of the Decedent Estate Law (Cons. Laws, ch. 13). (Cf. New York Life Ins. & Trust Co. v. Winthrop, 237 N. Y. 93.) The statute prescribes: “ All distinctions between the persons who take as heirs at law or next of kin are abolished and the descent of real property and the distribution of personal property shall be governed by this article except as otherwise specifically provided by law.” (Decedent Estate Law, § 81.) If Mrs. Burnap had children or descendants, they would have been her “ heirs at law ” and next of kin.” In the absence of children, Mrs. Burnap’s mother, if living, would at Mrs. Burnap’s death succeed to both her real and personal property, at least, with the exception of any inheritance which came to Mrs. Burnap on the part of her father. (Decedent Estate Law, §§ 83-85.) In the present case the exception has no application. The persons, whoever they may be, described as heirs at law or next of kin, take no inheritance from Mrs. Burnap but take by direct gift from the testator. That much is certain; what is uncertain is the date at which the testator intended that the class described should be determined. If that date be the death of the testator or the death of Mrs. Burnap, then it is clear that Mrs. Burnap’s mother is the sole person in that class. If the date is the time of distribution, i. e., the death of both fife beneficiaries, then Mrs. Burnap’s brothers and sisters would constitute the class described.

Applying the rule that the policy of the law favors the vesting of estates (Hersee v. Simpson, 154 N. Y. 496; Connelly v. O’Brien, 166 N. Y. 406), the Appellate Division has held that, since Mrs. Burnap’s mother was, at the time of the death of the testator, the only person who could answer the description or belong to the class of next of kin or heirs at law, she received a vested remainder in the funds of which she had a life interest. Assuming, without deciding, that the mother did, at the death of the testator, receive a vested interest in the remainder, it is clear that such interest was subject to being divested, if children had thereafter been born to Mrs. Burnap, or if the mother had died before the daughter. Other construction is plainly excluded. It was the testator’s express intention that each of the funds created for the benefit of his wife and one child during their successive lives should eventually go to the descendants of the child having a life interest in each fund, and to more distant relatives only if there were no descendants. The problem is not when the estate vested, but when the estate vested absolutely. The point of time which fixes the ascertainment of the class described and the vesting of their interests is the one to which we look in defining the class. When we speak in this connection of the vesting of an interest, we mean, of course, a vesting that is absolute and final. * * * The only significant distinction for the purpose now in view is between an estate that is absolute and one subject to conditions.” (New York Life Ins. & Trust Co. v. Winthrop, supra, p. 103.) If at the death of the testator bis wife took any estate, it was certainly subject to the conditions that no children be born thereafter to Mrs. Burnap, and that the wife should survive at least till the death of her daughter. The question remains whether the condition of survivorship annexed to the gift is survivorship at the time of distribution or survivor-ship at the time of the death of the daughter. Though ordinarily the terms heirs at law ” or “ next of kin ” are used to describe the persons who succeed, at the death of another, to his real or personal property, in case of intestacy, yet these terms are sometimes used in a looser sense, and it may appear from a will, read as a whole, that they refer to, “ in the case of land, heirs apparent, or those who would be the heirs were the living ancestor deceased (Heard v. Horton, 1 Den. 168), and, in the case of personal property, next of kin, who would be such were the ancestor deceased (Cushman v. Horton, 59 N. Y. 151).” (Montignani v. Blade, 145 N. Y. 111, 122.) So, too, they may refer to those who would be heirs or next of kin at a fixed time, if the ancestor had lived till then. (New York Life Ins. & Trust Co. v. Winthrop, supra.) Words in a will must be given the meaning which it appears the testator intended.

True, the search for intention is often a search after a phantom. Probably that is the case here. The testator has clearly evinced his intention that after the death of his wife each child should enjoy for life the income from certain trust funds and that the remainder should be distributed at the death of the second life tenant to her descendants, heirs at law or next of kin. Perhaps the testator did not envisage the possibility that the first life tenant would survive the second, and that distribution would occur at any time other than at the decease of the second life tenant, the date stated in the will. We have no reason to think that if the testator did envisage such possibility, he cared whether the class of heirs at law and next of kin were fixed at one time or another. The question in such circumstances is one not of intention in the proper sense, but of the legal implications of one formula or another.” (New York Life Ins. & Trust Co. v. Winthrop, supra.)

In that case the testator was mindful of the possibility that the daughter might die before the wife. Accordingly, he was careful to provide that only * * * ‘ upon the death of my said wife and daughter ’ was the trustee to convey and deliver the subject-matter of the trust.” So, too, in that case there was no direct gift, but only one through the medium of a mandate to deliver and convey.” These, together with other circumstances, there present and pointed out in the opinion, constrained this court to hold that “ the will when read in its totality, is instinct with the desire to hold the ultimate gifts in abeyance until the termination of the trust, and thereupon to adapt and proportion them to the conditions then existing.”

None of these circumstances are present here. As to part of his estate, the testator provided that from and after the decease of my said daughter, I give, devise and bequeath said part to her heirs at law absolutely.” Enjoyment might be postponed till a future time because a precedent life estate had not terminated, but the point of time had arrived at which the gift was to take effect, and there is nothing to indicate that the testator intended to hold that gift in abeyance until the trust was terminated. Then the rule that the law favors the vesting of estates at the earliest time comes into play. We give effect to the implications of the formula where implications of actual intent are absent.

The fact that in this particular case the implications of the formula will result in the life tenant being vested also with a remainder which can never come into actual possession does not preclude the court from applying the formula. (United States Trust Co. v. Taylor, 193 App. Div. 153; affd., 232 N. Y. 609.) The testator might have given the remainder to a class limited to his descendants. He has not done so. He gave the remainder to those who at the daughter’s death would, in case of her intestacy, be entitled to her real and personal property. He may have assumed that his wife would not then be living, but he did not indicate that if the assumption proved false his wife should not be entitled to the gift of the remainder, if at that time she came within the class described.

The order should be affirméd, with costs payable out of the estate to all parties, including the special guardians who have filed briefs.

Pound, Ch. J., Crane, O’Brien, Hubbs and Crouch, JJ., concur; Kellogg, J., not sitting.

Ordered accordingly.


source: Caselaw Access Project

author: Lehman, J. Cbane, J.

license: Public Domain

text:
    Frank E. Agar et al., Copartners under the Firm Name of Agar & Co., Appellants, v. Max Orda, Respondent.
    (Argued March 8, 1934;
    decided April 17, 1934.)

      John N. Regan and Edward G. Bathon for appellants.
    Shares of stock are not subject to the Sales Act (Cons Laws, ch. 41, art. 5.) (Burrall v. Bushwick R. R. Co., 75 N. Y. 211; Lamkin v. Palmer, 24 App. Div. 255; Denton v. Livingston, 9 Johns. 96; Kent v. Quicksilver Mining Co., 78 N. Y. 159; Jermain v. Lake Shore & Mich. So. Ry. Co., 91 N. Y. 483; Mechanics’ Bank v. N. Y. & N. H. R. R. Co., 13 N. Y. 599; Plimpton v. Bigelow, 93 N. Y. 592; U. S. Radiator Co. v. State, 208 N. Y. 144; First Nat. Bank v. Maine, 284 U. S. 312; Hawley v. City of Malden, 232 U. S. 1; Jellenik v. Huron

      Copper Mining Co., 177 U. S. 1; Hook v. Toffman, 16 Ariz. 540; People’s Bank v. Kurtz, 99 Penn. St. 344; First Nat. Bank v. Holland, 99 Va. 495; Smith v. Lingelbach, 177 Wis. 170; Guppy v. Moltrup, 281 Penn. St. 343; Henderson v. Plymouth Oil Co., 13 Fed. Rep. [2d] 932.)

      Max Orda, in person, respondent.
    The provisions of the Personal Property Law, article Y, apply to the alleged contract in suit. Plaintiffs have failed to bring the case within the provisions of section 144 of the Personal Property Law. (Wills v. Investors Bankstocks Corp., 257 N. Y. 451; Friedman v. Bachmann, 234 App. Div. 267; Bishop v. Tracy & Co., 237 App. Div. 496; Emerson v. Assoc. Gas & Elec. Co., 148 Misc. Rep. 636; Fitzpatrick v. Assoc. Gas & Elec. Co., 148 Misc. Rep. 538; Walker v. Northern & Western Finance & Trade Corp., 199 App. Div. 471; McNeil v. Tenth Nat. Bank, 46 N. Y. 325; Moore v. Metropolitan Nat. Bank, 55 N. Y. 41; Berney Nat. Bank v. Princkard, 87 Ala. 577; Matter of Broden, 165 Penn. St. 184; Nashville Trust Co. v. Weaver, 102 Tenn. 66; Griffith v. Watson, 19 Kans. 23; Union Bank v. State, 9 Yerg. 490; Waltham Bank v. Waltham, 10 Metc. [Mass.] 334.)
   Lehman, J.

An action to recover the purchase price of 200 shares of stock has been dismissed. The contract of purchase and sale was executory. The buyer refused to accept delivery of the certificates when tendered.

The Sales Act (Article V of the Personal Property Law [Cons. Laws, ch. 41]) provides: Where, under a contract to sell or a sale, the property in the goods has passed to the buyer, and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract or the sale, the seller may maintain an action against him for the price of the goods.” (§ 144.) Even before the Sales Act was enacted, the same rule was applied in this jurisdiction to contracts to sell or sales of personal property of all kinds.

The same rule was also applied in this jurisdiction prior to the enactment of the Sales Act, to executory contracts for the sale of personal property, where payment of the price and delivery of the personal property were to be simultaneous, if the seller made proper tender of the property he had agreed to sell. (Hayden v. Demets, 53 N. Y. 426.) Here the Sales Act changed the common-law rule as formulated by the courts of this jurisdiction. In such case the seller of goods is now relegated to an action for damages and no action for the price will lie. Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain an action against him for damages * * (§ 145.)

The question now presented is whether, since the enactment of the Sales Act, an action for the price may still be maintained upon the refusal of a buyer of stock certificates to accept delivery of the certificates, though title to the certificates had not passed to the buyer.

Concededly, if certificates of stock are goods ” within the definition of the Sales Act, the complaint was properly dismissed. It does not follow that the action for the price will he, though certificates of stock do not fall within that definition. Prior to the enactment of the Sales Act the courts held that a seller of personal property had the same remedies, regardless of the nature of the personal property. The same rule was applied to a contract to sell the shares of stock of a construction company struggling to obtain from its friends the means to five, as well as to such personal property as is the subject of general traffic and has a market value. (Mason v. Decker, 72 N. Y. 595.) It was applied alike where the property is grain or hops, or a horse ” and “ where it is an interest in a partnership.” (Van Brocklen v. Smeallie, 140 N. Y. 70, 76.) The logical outcome of disintegrating exception would inevitably be, the court there said, “ to confuse the rule with narrow and arbitrary distinctions; to open it to attack in numerous directions; to make its operation fickle and uncertain; to breed needless litigation; and in the end to shatter the rule itself.” The rule has been shattered by the Legislature. It no longer- can be applied to contracts for the sale of “ goods,” and goods, as defined by the statute, include all chattels personal other than things in action and money.” (§ 156.) The problem is whether a fragment of the shattered rule still persists and is applicable to sales of certificates of stock.

Shares of stock are intangible property and, at least, for many purposes, must be regarded only as things in action; yet for practical purposes they are merged in stock certificates which are instrumentalities of trade and commerce. (Hutchison v. Ross, 262 N. Y. 381.) Such certificates “ are treated by business men as property for all practical purposes.” (Lockwood v. United States Steel Corp., 209 N. Y. 375, 382.) Indeed, this court has held that the shares of stock are so completely merged in the certificate that conversion of the certificate may be treated as a conversion of the shares of stock represented by the certificate, even though the certificate was not indorsed by the owner, and after the conversion the original owner remained the record owner of the stock and entitled to all the benefit which flows from such ownership. (Pierpoint v. Hoyt, 260 N. Y. 26.) Even so, a strong argument may be made that the Legislature did not intend -to include certificates of stock in its definition of “ goods.” Assuming that to be true, yet the fact remains that certificates of stock, like other goods,” are freely bought and sold in the market place and pass from hand to hand, and analogy so complete may dictate that the rules governing sales be applied alike to goods ” and other personal property freely bought and sold and passing from hand to hand.

It is significant that this court so applied the same rules to sales of all personal property without distinction long before the Legislature adopted the Sales Act. Since the Sales Act was adopted, we have by analogy applied the provisions of the Personal Property Law, sections 82 and 100, governing the transfer of property in goods, to the transfer of property in certificates of stock. (Wills v. Investors Bankstocks Corp., 257 N. Y. 451.) The common-law rules governing the sale of goods were applied without distinction to all personal property, so far as the nature of the property permitted, in order to avoid confusion with its attendant train of evils. (Van Brocklin v. Smeallie, 140 N. Y. 70.) The Legislature has changed some of these rules by the adoption of the Uniform Sales Act. It did so primarily for the purpose of promoting uniformity of rules throughout the country. By placing the rules governing the sale of " goods ” in a statutory code, it shattered or destroyed general common-law rules inconsistent with the statutory code. By limiting the application of the statutory code to the sale of goods ” the Legislature gave no indication of what rule the courts should apply to the sale of other personal property. That problem it left to the courts.

The courts must formulate the rules applicable in cases not covered by the statute. The field is narrow. Inherent differences between goods ” and things in action may require at times the formulation of different rules. Perhaps that is why the Legislature excluded things in action from the scope of the statutory rules. No such differences exist here. Indeed, before the Sales Act was adopted, the courts applied the rule governing actions for the price of goods to actions for the price of other personal property because they found that logic and policy alike dictated that here no distinction should be drawn. The same considerations still apply now that the court is called upon to formulate the rule which shall be applied in cases not covered by the Sales Act. The formulation of the old general rule that when the vendee of personal property, under an executory contract of sale, refuses to complete Ms purchase, the vendor may keep the article for Mm and sue for the entire purchase price ” (Ackerman v. Rubens, 167 N. Y. 405, 408), will no longer suffice. A formulation of the rule to confine it to contracts for the sale of choses in action creates a narrower rule wMch is supported by none of the considerations which induced the courts originally to adopt the original general rule. It is in effect a new rule. The fragments of the rule shattered by the Legislature are essentially different from the old common-law rule.

Even the old general common law as formulated in tMs State differed from the common-law rule»as formulated in England and many jurisdictions in tMs country. (See 2 Williston on Sales [2nd ed,], § 560 et seq.) It seems anomalous that the seller should be able to force title upon the buyer by simply electing to do so.” (§ 566.) Every reason that might be urged against the old rule as applied to all personal property has at least equal force when urged against a narrower rule to be applied only to certificates of stock. The same reasons that make umformity in all jurisdictions desirable in regard to sale of goods apply with like force to sale of certificates of stock. After the Legislature in the Sales Act shattered and mutilated beyond recognition the general common-law rule of tMs State and enacted its preference for the general common-law rule as applied in England and other jurisdictions to all personal property, the courts of tMs State should apply the same rule not only to the sale of goods, but to the sale of all personal property. Otherwise the courts without reason introduce distinctions that are harmful and retard uniformity of rules in a field where umformity should be sought.

The judgment should be affirmed, with costs.

Cbane, J.

(dissenting). Is the Uniform Sales Act, also referred to as the Sales of Goods Act, article 5 of the Personal Property Law (§ 144), applicable to the sales of corporate stock? Section 82 of the act provides that a contract to sell “ goods ” is a contract whereby the seller agrees to transfer the property in “ goods ” to the buyer for a consideration called the price. A sale of “ goods ” is a contract whereby the seller transfers the property in “ goods ” to the buyer for a consideration called the price. Section 144, subdivision 1, provides that where, under a contract to sell or a sale, the property in “ the goods ” has passed to the buyer, and the buyer wrongfully neglects or refuses to pay for “ the goods ” according to the terms of the contract of sale, the seller may maintain an action against him for the price of “ the goods.” The act in section 156 has defined for us in very plain language what is meant by “ goods.” The definition is, “ ‘ Goods include all chattels personal other than things in action and money. The term includes emblements, •industrial growing crops, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.”

Certificates of corporate stock are choses in action. A separate article (Art. 6) of the Personal Property Law, known as the “ Transfers of Shares of Stock Corporations,” or the “ Uniform Stock Transfer Act,” deals with the transfer of these choses in action. Section 162 provides that the title to a certificate and to the shares represented thereby can be transferred only by delivery of the certificate indorsed either in blank or to a specified person by the person appearing by the certificate to be the owner of the shares represented thereby. The transfer may also be made by power of attorney. Section 171 reads as follows: “An attempted transfer of title to a certificate or to the shares represented thereby without delivery of the certificate shall have the effect of a promise to transfer and the obligation, if any, imposed by such promise shall be determined by the law governing the formation and performance of contracts.”

The drafters of the Uniform Acts and the Legislature, which has embodied them into our Personal Property Law, were careful that the words selected should exactly express their meaning. Strange indeed would it be if choses in action were turned into chattels by the mere use of the word goods ” and nothing more definite said about it. Turning to the Statute of Frauds, as we call it, section 85 of the Personal Property Law, we find the Legislature using the words “ choses in action ” when property of this nature was intended: “A contract to sell or a sale of any goods or choses in action of the value of fifty dollars or upwards shall not be enforceable by action unless the buyer shall accept part of the goods or choses in action so contracted to be sold,” etc. Every rule of construction known to the law directs that the same word shall have the same meaning in the one enactment. This Personal Property Law deals with goods and chattels, also with stocks — choses in action — and when it intends to cover both goods and choses in action it says so.

That goods — tangible personal property — has, throughout the law and all the decisions, a separate and distinct identity from shares of stock or choses in action, is well illustrated in the struggle which the United States Supreme Court has had in getting rid of double taxation upon intangible property. In First Nat. Bank v. Maine (284 U. S. 312, 327, 328) it was said of stocks and bonds, “ Both are intangibles and both generally have been recognized as resting in contract, or, technically, as ' choses in action,’ ” Again, In which state, among two or more claiming the power to impose the tax, does the taxable event occur? In the case of tangible personalty, the solution is simple: the transfer, that is, the taxable event, occurs in that state where the property has an actual situs, and it is taxable there and not elsewhere. In the case of intangibles, the problem is not so readily solved, since intangibles ordinarily have no actual situs. But it must be solved unless gross discrimination between the two classes of property is to be sanctioned; and this court has solved it in respect of the intangibles heretofore dealt with by applying the maxim, mobilia sequuntur personam.” In a word, the court recognizes the distinction between tangible and intangible personal property, between goods and choses in action. Goods and chattels are taxed in the State where they exist or are, while shares of stock — choses in action — are taxed at the domicile of the owner. While we are not dealing with a tax case these recognized distinctions exist in the law from the nature of the property.

Therefore, I conclude that the Sales of Goods Act, referring as it does to goods and chattels, does not include shares of capital stock of a corporation. Not only do I find this distinctly stated in the statute itself, to which reference has been made, but the weight of authority, wherever this question has arisen, favors this interpretation.

In 1929 the Supreme Judicial Court of Massachusetts in Goodhue v. State Street Trust Co. (267 Mass. 28, 34), said, “ A contract for sale or the sale of ' receipts ’ or ‘ certificates ’ is not governed by the uniform sales act.”

In 1920 the Supreme Court of Errors of the State of Connecticut, in Millard v. Green (94 Conn. 597, at p. 609), in referring to the Uniform Sales Act, Uniform Negotiable Instruments Act, the Uniform Bills of Lading Act and the Uniform Stock Certificate Act, says, “ None of these Acts, except the latter, so far as we can discover, either in terms or by necessary implication, include certificates of stock within their provisions.”

And the Supreme Court of Wisconsin, in Smith v. Lingelbach (177 Wis. 170 [1922]), said: “ The Uniform Sales Act does not include within its provisions certificates of stock (Millard v. Green, 94 Conn. 597). In addition to the fact that the Uniform Sales Act by its terms excluded certificates of stock, there is the additional consideration that in 1913, two years after the adoption of the Uniform Sales Act, the legislature adopted the Uniform Stock Transfer Act, which by its terms relates specifically to the transfer of shares of stock in a corporation and would therefore seem to be exclusive of the Uniform Sales Act.”

And the Supreme Court of Pennsylvania, in Guppy v. Moltrup (281 Penn. St. 343), in an action where the plaintiff sued to recover the purchase price because of the defendant’s refusal to comply with his oral contract to purchase certain shares of corporate stock, took the same view, holding that shares of stock in a corporation are choses in action.

In Davis Laundry & Cleaning Co. v. Whitmore (92 Ohio St. 44) there is a dictum that shares of stock fall within the definition of goods. The case itself dealt with the Statute of Frauds. Mr. Williston, in his work on Sales (2d ed.), section 619, says that this dictum is not to be followed as it is incorrect and that the right conclusion was reached in Millard v. Green (94 Conn. 597).

There is also a decision by the intermediate court of Illinois, Postel v. Hagist (251 Ill. App. 454), stating that the provisions of the Sales Act are applicable to the sales of corporate stock.

In the case of Corwin v. Grays Harbor Washingtonian, Inc. (151 Wash. 585) the court held that where stock could not be readily resold, the exception in the Sales Act applied, and that an action for the price could be maintained.

On the other hand, we find the Federal courts following the main fine of authorities. In Henderson v. Plymouth Oil Co. (13 Fed. Rep. [2d] 932, 937) it was held that the Uniform Sales Act does not apply to the sales of stock. The courts which have followed the plain meaning of these Uniform Acts embodied in our Personal Property Law have, in my judgment, correctly decided the question and preserved a distinction which necessarily exists in the very nature of the property.

The courts below were of the opinion that we had taken a different view in our decision in Wills v. Investors Bankstocks Corp. (257 N. Y. 451). That case related to the passing of title to stock and nothing else. The action was one in conversion on the claim that title to stock had passed to the plaintiff although there had been no delivery of the stock as required by article 6 of the Personal Property Law. Reference was made in the opinion to the Sales Act merely by way of analogy and illustration. The point, whether or not the Sales of Goods Act applied to shares of stock in a corporation where concededly title had not passed, was not before the court and was not decided. On the facts this court held that the action of conversion could not be maintained as title was not in the plaintiff.

Neither does Pierpoint v. Hoyt (260 N. Y. 26, 29) conflict in any way with our present holding. That was an action of willful conversion of certificates of stock, a refusal to deliver them up to the rightful owner. We said, Wrongful acts affecting property rights in corporate stock can ordinarily be committed only through the medium of the certificates which evidence those rights. For the purpose of redressing such wrongs, the law must and does treat the symbol as though it were the thing symbolized. A conversion of a certificate of stock, whether indorsed or not, is, therefore, a conversion of the stock itself.” In fact, the authorities for this proposition cited in our opinion long antedated the passage of the Uniform Sales Act into our Personal Property Law.

Now for the facts of this case. The defendant agreed to purchase 200 shares of the Firestone Tire and Rubber Company six per cent cumulative preferred stock, Series A, at the agreed price of $99 per share and accrued dividend. The stock was tendered to the defendant but he refused to accept it and this action was brought to recover the purchase price. The complaint was dismissed under the holding that action for the price could not be maintained as “ property in the goods ” had not passed to the buyer. Prior to this enactment (Personal Property Law, § 144) a tender of the property and a demand for the price were sufficient to maintain an action therefor, (Ackerman v. Rubens, 167 N. Y. 405, 408; Van Brocklen v. Smeallie, 140 N. Y. 70, 75.) Since the enactment an action cannot be maintained for the price unless title in the goods has passed. I need not refer to the exceptions. The only question, therefore, presented upon the motion for judgment on the pleadings was the one asked at the beginning of this opinion: Are shares of corporate stock goods within the meaning of section 144 of the Personal Property Law? If they are, this complaint was properly dismissed. If they are not, the plaintiff may maintain an action for the purchase price. In accordance with what I have already stated, the Sales of Goods Act does not apply to shares of corporate stock, and this complaint was improperly dismissed.

Pound, Ch. J., O’Bbien, Hubbs and Ceouch, JJ., concur with Lehman, J.; Ceane, J., dissents in opinion; Kellogg, J., not sitting.

Judgment affirmed.


author: Lehman, J.

text:
    In the Matter of Brescia Construction Co., Inc., Appellant, against Walart Construction Co., Inc. New Amsterdam Casualty Company, Respondent.

      (Argued March 22, 1934;
    decided April 17, 1934.)

      Meyer Levy for appellant.
    A surety who voluntarily participates in an arbitration proceeding instituted after issue has been joined in an action to foreclose a mechanic’s lien, in which action it is a party defendant, which proceeding is based upon a provision therefor in the contract between its principal and the contractor, and was initiated by a demand therefor by its principal, is bound by the award made therein and any judgment entered thereon. (Matter of Michel, Inc., v. Whitecourt Constr. Corp., 264 N. Y. 23; Aeschlimann v. Hospital, 165 N. Y. 296; Hostetter v. City of Pittsburgh, 107 Penn. St. 419; Conneant Lake Ag. Assn. v. Pittsburgh Surety Co., 225 Penn. St. 592.) The arbitration initiated after the joinder of issue in the action for the purpose of determining all disputes between the parties, and the surety having voluntarily made itself a party thereto, it was bound by the money judgment entered upon the award made therein against itself and the principal. (Matter of Michel, Inc., v. Whitecourt Constr. Corp., 264 N. Y. 23; N. Y. L. & W. W. Co. v. Schnieder, 119 N. Y. 475.)

      Joseph G. Fink and Harry N. French for respondent.
    In so far as the arbitrators made an award against the respondent they exceeded their jurisdiction. (Matter of Bullard v. Grace Co., 240 N. Y. 388; Matter of Marchant v. Mead-Morrison Mfg. Co., 252 N. Y. 284; Dodds v. Hakes, 114 N. Y. 260.)
   Lehman, J.

The plaintiff entered into a contract with the defendant Walart Construction Company to perform work and furnish materials for the erection of a building in Bronx county. Thereafter the plaintiff filed a mechanic’s lien against Walart Construction Company. The lien was discharged pursuant to the provisions of section 19, subdivision 4, of the Lien Law (Cons. Laws, ch. 33). The New Amsterdam Casualty Company became the surety on the undertaking required by that section. Then the plaintiff began an action to foreclose its Hen.

The contract between the plaintiff and Walart Construction Company contained a provision that “ All questions that may arise under this contract and in the performance of the work thereunder, shall be submitted to arbitration at the choice of either of the parties hereto * * *. The decision of the arbitrators upon any question subject to arbitration under this contract, shall be a condition precedent to any right of legal action.” In its answer filed in the foreclosure action, Walart Construction Company gave notice of its election to have the questions in dispute submitted to arbitration. Each party to the contract appointed an arbitrator and upon the failure of the arbitrators so appointed to agree upon a third arbitrator, the court appointed such third arbitrator with the same force and effect as if he had been specifically named in said contract as an arbitrator.”

The application for the appointment of the third arbitrator was a special proceeding brought in accordance with the provisions of the Arbitration Law (Cons. Laws, ch. 72). Notice was given to the attorney who had appeared for both defendants in the foreclosure action. The lien of the plaintiff was for labor performed and materials furnished pursuant to a written contract which provided for arbitration of questions that may arise under this contract and in the performance of the work thereunder,” and either party to that contract might insist that the amount due to the lienor under its contract should be determined in accordance with that provision. When that question has been determined and an award made, a personal judgment may be entered for that amount against the other party to the contract. The right to enforce a lien for such amount upon the land is created by the statute and the statute makes no provision for resort to arbitration for the enforcement of such a lien. The determination of the arbitrators and the judgment entered thereon may, like other judgments, constitute a conclusive adjudication of all questions there litigated and determined, so that the same questions may not again be litigated between the same parties or their privies. None the less the scope of the arbitration is confined to the determination of those questions which the parties have agreed to submit to arbitration. It is defined by the terms of the contract and the order of the court made pursuant to the statute. An award may be made only against the parties who have agreed to abide by the award, and can result only in a personal judgment and not in a judgment to enforce a statutory lien.

Here application was made to the court for the appointment of a third arbitrator to whom the dispute as to the amount due under said contract and as to the amount of work excavated and quantity of material supplied and labor performed” might be submitted. The order appointing the arbitrator was no broader. No other question was submitted to the arbitrators or passed upon by them. The surety upon the undertaking given to discharge the lien was not a party to the contract which contained provision for arbitration. It never entered into any formal submission to arbitration as provided by the Civil Practice Act. It never became a surety for the performance of any obligation under the construction contract. In spite of all this, the arbitrators made an award against the surety for the amount they found due to the lienors under the construction contract, and a personal judgment was entered against the surety for that amount. That judgment and the order confirming the award, in so far as they direct a recovery against the surety, have been reversed by the Appellate Division.

The surety appeared in the arbitration proceedings by its duly authorized attorney. He took an active part in the presentation of evidence to the arbitrator and sought to defeat or diminish the claim of the lienor under the construction contract. The determination by the arbitrators upon the amount of that claim may be conclusive upon the surety in any action to enforce the undertaking given to discharge the lien upon the real property. That undertaking is “ conditioned for the payment of any judgment which may be rendered against the property for the enforcement of the lien.” (Lien Law, § 19, subd. 4.) The obligation of the surety is defined by that condition and may not be enlarged, without its consent, into an obligation to pay the amount which arbitrators might award to the lienor under the construction contract.

The undertaking of the surety is “to pay the amount which it should be adjudged was due and owing to the plaintiffs and which was chargeable against the property by virtue of their notice of lien. In other words, the condition was for the payment of any judgment which might have been rendered against the property had not the bond been given.” (Morton v. Tucker, 145 N. Y. 244, 248.) Since the construction contract provided that questions as to the amount due and owing to the plaintiff shall at the choice of either party be determined by arbitration, the surety on the discharge undertaking could not object to such arbitration or insist that the amount be determined in other manner. Perhaus if the surety had not taken part in the arbitration proceedings, it might have urged some objections to the validity of the award in the action to obtain a judgment against the property for the enforcement of the lien. (Cf. Aeschlimann v. Presbyterian Hospital, 165 N. Y. 296.) At most the award constitutes an adjudication of the amount due to the plaintiff. Even though conclusive on that point, there can be no judgment against the surety without an adjudication that this amount is chargeable against the property by virtue of the notice of hen. A valid hen on the primary fund must be established to require payment pursuant to the terms of the undertaking. * * * The condition of the undertaking, which is plain in terms, is the full measure of the liability of the parties to it.” (Berger Mfg. Co. v. City of New York, 206 N. Y. 24, 31.)

The Lien Law gives to an unpaid contractor a statutory remedy against the land, in addition to the ordinary remedy of an action at law for breach of contract. The enforcement of the statutory remedy requires resort to a court of equity. Breach of contract and amount due under the contract must be shown in the equitable action as well as in the action at law, and the defendant alleged to be in default under the contract may demand that the breach be established through arbitration, if arbitration of such question is part of the agreement. An adjudication of the amount due and owing to the plaintiff must then precede any adjudication that such amount was chargeable against the property by virtue of the plaintiff’s notice of hen. The arbitration proceedings have resulted in an adjudication of the amount due and owing to the contractor, and a personal judgment against the party which owes the debt. There has not as yet been any judgment that this amount is chargeable against the property, and the obligation of the surety on the discharge undertaking is confined to the payment of such a judgment.

The effect of the appearance of the surety in the arbi- ■ tration proceedings may be to make the determination of the arbitrators binding upon it. Such appearance did not constitute a consent that the scope of the arbitration proceedings should be enlarged to include the issues raised in the action to foreclose the plaintiff’s lien, or that a personal judgment might be entered against the surety without a judgment that the amount due was chargeable against the property. In Matter of Michel, Inc., v. Whitecourt Constr. Corp. (264 N. Y. 23) such issues had been submitted to the arbitrators in compliance with the demand of the surety, and the surety had consented to the entry of a personal judgment against it. It could not insist upon enforcement of its bond according to its letter after the plaintiff and the court had acted upon the surety’s Waiver of the letter of the bond. Here the situation is different. The limited arbitration was merely a step in enforcing the plaintiff’s remedies. The surety waived nothing except the possible right to attack collaterally a determination made by the arbitrators, within the scope of their jurisdiction. It did not consent, expressly or impliedly, that a personal judgment might be entered against it in the arbitration proceedings.

It may be that the adjudication of the amount due to the plaintiff will leave no substantial issues to be tried in the action brought under the Lien Law. As to that we are not now advised. Judgment against the surety must be based upon proof or admission and adjudication that the amount due to the plaintiff is chargeable under his lien against the land. Without such adjudication, no breach of the surety’s undertaking is established.

The judgment of the Appellate Division should be affirmed, with costs.

Pound, Ch. J., Crane, O’Brien, Hubbs and Crouch, JJ., concur; Kellogg, J., not sitting.

Judgment affirmed.


text:
    Mabel E. Milks, an Infant, by Roland Milks, Her Guardian ad Litem, et al., Appellants, v. M. A. McIver, Respondent, Impleaded with Another.
    (Argued February 27, 1934;
    decided April 17, 1934.)

      Michael D. Reilly and Sharon J. Mauhs for appellants.
    The decision dismissing the complaint is based on the erroneous premise that the defendants in the previous action and the defendant-respondent in the present action, are joint tort feasors. (Ader v. Blau, 241 N. Y. 7; Cuban-Canadian Sugar Co., S. A., v. Arbuckle, 127 Misc. Rep. 64; Hoehn v. Schenck, 221 App. Div. 371; Radman v. Háberstro, 1 N. Y. Supp. 561; White v. Matthews, 130 Misc. Rep. 301.)

      George B. Smith and Lawrence V. Benedict for respondent.
    The general releases executed by the plaintiffs released the defendant-respondent. (Lyons v. Erie R. R. Co., 57 N. Y. 489; Sauter v. N. Y. C. & H. R. R. R. Co., 66 N. Y. 50; Radman v. Haberstro, 49 Hun, 605; 119 N. Y. 659; Wagner v. Mittendorf, 232 N. Y. 481; Caven v. City of Troy, 15 App. Div. 163; Retelle v. Sullivan, 191 Wis. 576; Guth v. Vaughan, 231 Ill. App. 143; Martin v. Cunningham, 93 Wash. 517; Hooyman v. Reeve, 168 Wis. 420; Fisher v. Milwaukee Electric R. & Light Co., 173 Wis. 57; Keown v. Young, 129 Kan. 563; Andrews v. Davis, 128 Me. 464; Wheat v. Carter, 79 N. H. 150; Purchase v. Seeley, 231 Mass. 434.)
   Lehman, J.

The infant plaintiff was injured in an automobile accident. She was taken to a hospital and received treatment there. After her discharge from the hospital her guardian ad litem received from the owner and the operator of the automobile truck which had struck her the sum of $3,384 as consideration for the execution of a release of all claims against them for damages resulting from the automobile accident. Then she brought this action to recover damages which, it is alleged, she sustained through negligent treatment while in the hospital. The attending physician moved to dismiss the complaint against him, on the ground that the claims or demands against him set forth in the complaint have been released. (Rule 107 of the Rules of Civil Practice.) The motion was granted and judgment entered dismissing the complaint against him. The hospital did not join in the motion.

"Upon this appeal we must assume that the allegations of the complaint can be established by proof, even though the affidavit states that “all of the treatment and care were rendered in a careful and skillful manner.” The question is whether the complaint alleges a cause of action for damages which resulted from the negligence of the original tort feasors and for which satisfaction has been accepted. The general release of all claims against the original tort feasors was made without reservation. A general release to one tort feasor made without reservation creates a bar to an action for damages against another tort feasor, arising from the same injury. A physical injury sustained through the negligence of one person may be cured by the skill of a physician, or aggravated through his negligence. The negligence of the physician may then give rise to a cause of action against him, to recover the damages which the injured person would not otherwise have sustained. It may be argued that the original wrongdoer who caused the injury and the physician whose negligence aggravated the injury are not, in technical sense, joint tort feasors. Nevertheless their wrongs coalesced and resulted in damage which would not have been sustained but for the original injury. A wrongdoer is responsible for the proximate result of his wrong. What constitutes a proximate result is not a problem of philosophy. “ The law solves these problems pragmatically.” (Bird v. St. Paul F. & M. Ins. Co., 224 N. Y. 47, 52.) Fortuitous circumstances may divert the flow of cause to effect from its natural course. New streams of greater volume and force may join the flow. Liability for damages caused by wrong ceases at a point dictated by public policy or common sense. In some situations the courts have established a definite rule of limitation. In others the test is one only of degree. The rule is now well established that a wrongdoer is liable for the ultimate result, though the mistake or even negligence of the physician who treated the injury may have increased the damage which would otherwise have followed from the original wrong. (Cf. Lyons v. Erie Ry. Co., 57 N. Y. 489; Sauter v. N. Y. C. & H. R. R. R. Co., 66 N. Y. 50; Wagner v. Mittendorf, 232 N. Y. 481.) In such case satisfaction by the original wrongdoer of all damages caused by his wrong bars action against the negligent physician who aggravated the damage. The law does not permit a double satisfaction for a single injury. (Cf. Purchase v. Seelye, 231 Mass. 434.)

It is true that in that case the Massachusetts court held that the general rule was not applicable where the physician’s negligence was not in the treatment of the original injury but in making a mistake in identity and performing an operation upon the plaintiff in the belief that he was operating upon another patient who had a hernia on his left side. ” There the causal connection between the original injury and the ultimate damages was perhaps too tenuous; and the court said: “ Such a mistake was not an act of negligence which could be found to flow legitimately as a natural and probable consequence of the original injury, and a ruling in effect to the contrary could not properly have been made.” (p. 437.) (Cf. Phillips v. Werndorff, 215 Iowa, 521.) No such situation is presented upon this appeal.

The allegations of negligence of the physician in the complaint now under review are vague and all are connected with treatment of the plaintiff in order to cure her injury. Some allegations of negligence on the part of the agents, servants and employees of the hospital might, perhaps, be construed to include matters not connected with the original injury. We are not concerned now with a possible cause of action against the hospital. It is clear that the cause of action, if any, alleged against the physician is for damages resulting from unskillful treatment of the original injury. Such a cause of action is barred by the release of the original wrongdoer.

In the case of Ader v. Blau (241 N. Y. 7, 12, 15) we held that a cause of action for negligence in erecting and maintaining an iron picket fence which was dangerous and attractive to children and whereby intestate was injured in a manner which caused infection and death ” was inconsistent, and could not be united in one complaint with a cause of action against a physician to whom the intestate came for treatment for such injury and who it was alleged so negligently treated him that, solely by reason of such negligent treatment, intestate died.” In the opinion of the court it was pointed out that the plaintiff had chosen to reject any possibility ” of connecting the two causes of action, and had pleaded in separate causes of action that the death was the result solely of disconnected acts of negligence on the part of two separate defendants. If the defendant Emil by his negligence so treated an injury not connected with the offense of the other defendant as to cause death the other defendant is not liable.” (Italics are new.) On this appeal we construe a complaint which alleges that the defendant negligently treated an injury which is connected with and resulted from the wrong of another. It follows that the cause of action so alleged is barred by the satisfaction received for that other’s wrong.

The judgment should be affirmed, with costs.

Pound, Ch. J., Crane, O’Brien, Hubbs and Croucr, JJ., concur; Kellogg, J., not sitting.

Judgment affirmed.


author: Per Curiam.

text:
    In the Matter of William H. Black, a Justice of the Supreme Court, Appellant, against John P. O’Brien, as Mayor of the City of New York, et al., Respondents.
    (Argued March 21, 1934;
    decided April 17, 1934.)

      I. Gainsburg and Joseph P. Segal for appellant.
    The Special Term erroneously denied petitioner’s application for a peremptory order of mandamus as a matter of discretion. The court having found that petitioner had a clear, legal and constitutional right to his full salary without deduction, there was no power left for the exercise of discretion. (People ex rel. Gas Light Co. v. Common Council, 78 N. Y. 56; People ex rel. Millard v. Chapin, 104 N. Y. 96; Matter of Oystermen’s Dock Co. v. Downing, 258 N. Y. 156; People ex rel. Sinnott v. Shea, 7 Hun, 303; The Styria, 186 U. S. 1; People ex rel. Oelricks v. Superior Court, 10 Wend. 285; Platt v. Munroe, 34 Barb. 291; Matter of Van Auken v. Kimmey, 141 Misc. Rep. 117; Strochak v. Glass Papermaking Supplies Co., 239 App. Div. 312; Graf v. Hope Building Corp., 254 N. Y. 1.)

      Paul Windels, Corporation Counsel (Paxton Blair and Edmund L. Palmieri of counsel), for respondents.
    Adequate circumstances were presented to the Special Term to justify it in exercising its discretionary power to deny the order of peremptory mandamus, and such exercise of discretion should be upheld. (People ex rel. Lunney v. Campbell, 72 N. Y. 496; Matter of Dederick, 77 N. Y. 595; Matter of Warehousemen’s Assn. v. Cosgrove, 241 N. Y. 580; Matter of Tuttle v. Iron Nat. Bank, 170 N. Y. 9; People ex rel. Rodgers v. Coler, 166 N. Y. 1; People ex rel. Ellis-Joslyn Pub. Co. v. Common Council, 223 N. Y. 445; People ex rel. Flynn v. Woods, 218 N. Y. 124; People ex rel. Murray v. Lindenthal, 77 App. Div. 515; People ex rel. Ajas v. Board of Education, 104 App. Div. 162.)
   Per Curiam.

Even if we were to assume that part of the petitioner’s salary as defined by the Constitution has been withheld, the court in the exercise of its discretion might deny the remedy of mandamus.

The order should be affirmed, with costs.

Pound, Ch. J., Crane, Lehman, O’Brien, Hubbs and Crouch, JJ., concur; Kellogg, J., not sitting.

Order affirmed.


author: Crane, J.

text:
    Edward F. Addiss et al., as Executors of Morton H. Meinhard, Deceased, Appellants, v. Elsa R. Selig, Respondent.

      (Argued February 28, 1934;
    decided April 24, 1934.)

      George Lion Cohen, William Radner, Herman C. Biegel and I. Henry Kutz for appellants.
    Section 55-a of the Insurance Law (Cons. Laws, ch. 28) can have no retroactive application upon an existing indebtedness. (Kittel v. Domeyer, 175 N. Y. 205; Guardian Trust Co. v. Straus, 139 App. Div. 884; 201 N. Y. 546; Matter of Inland Dredging Corp., 61 Fed. Rep. [2d] 765; U. S. Mortgage & Trust Co. v. Ruggles, 258 N. Y. 32; Bank of Minden v. Clement, 256 U. S. 126; Orinoco Realty Co. v. Bandler, 233 N. Y. 24; King v. Irving, 103 App. Div. 420; Schwab v. Doyle, 258 U. S. 529; N. Y. & Oswego M. R. R. Co. v. Van Horn, 57 N. Y. 473; Hollenbach v. Born, 238 N. Y. 34; United States v. Heth, 3 Cranch, 399; Jacobus v. Colgate, 217 N. Y. 235; Matter of Messinger, 29 Fed. Rep. [2d] 158; 279 U. S. 855; Matter of Solomons, 2 Fed. Supp. 572; Matter of Czarniak, 140 Misc. Rep. 754; Skinner v. Holt, 9 S. D. 427; Trust Co. v. Fay, 14 Wash. 536; Matter of Commissioner v. Yelverton, 204 N. C. 441; Matter of Sturdevant, 29 Fed. Rep. [2d] 795; Matter of Firestone, 2 Fed. Supp. 96.) If the retroactive construction be adopted then section 55-a is unconstitutional. (Gunn v. Barry, 82 U. S. 610; Edwards v. Kearzey, 96 U. S. 595; Bank of Minden v. Clement, 256 U. S. 126; U. S. Mtge. & Trust Co. v. Ruggles, 258 N. Y. 32; Matter of Messinger, 29 Fed. Rep. [2d] 158; 279 U. S. 855; Matter of Sturdevant,
      29 Fed. Rep. [2d] 795; Matter of Firestone, 2 Fed. Supp. 96; Matter of Solomons, 2 Fed. Supp. 572; Matter of Commissioner v. Yelverton, 204 N. C. 441; Fearn v. Ward, 65 Ala. 33; Skinner v. Holt, 9 S. D. 427; Trust Co. v. Fay, 14 Wash. 536.)

      Osmond K. Fraenkel and Charles H. Levitt for respondent.
    Section 52 of the Domestic Relations Law (Cons. Laws, ch. 14) makes the wife the owner of the policies and their proceeds and both as to the wife and the husband’s creditors is a grant which the Legislature may modify at will. (United States Mortgage & Trust Co. v. Ruggles, 258 N. Y. 32; Kittel v. Domeyer, 175 N. Y. 205; Matter of Thompson, 184 N. Y. 36; Baron v. Brummer, 100 N. Y. 372; Whitehead v. New York Life Ins. Co., 102 N. Y. 143; Anderson v. Northwestern Mut. Life Ins. Co., 261 N. Y. 450; Maurice v. Travelers Ins. Co., 121 Misc. Rep. 427; Chase Nat. Bank v. United States, 278 U. S. 327; Chelsea Exchange Bank v. Travelers Ins. Co., 173 App. Div. 829; Lowenstein v. Koch, 165 App. Div. 760; Everett v. Judson, 228 U. S. 474; Burlingham v. Crouse, 228 U. S. 459; Guardian Trust Co. v. Straus, 139 App. Div. 884; 201 N. Y. 546; Wagner v. Thieriot, 203 App. Div. 757; 236 N. Y. 588; McGowin v. Menken, 223 N. Y. 509; Matter of Hammer, 101 Misc. Rep. 351.) That the Legislature intended the new law to apply to all creditors is obvious from the fact that one of the chief reasons for enacting the new law was to put the wife on an equality with other persons who might be named as beneficiaries of insurance policies. That could not be accomplished if creditors whose claims had already accrued were to continue to have rights. (Chatham Phenix Nat. Bank v. Crosney, 251 N. Y. 189; U. S. Mortgage & Trust Co. v. Ruggles, 258 N. Y. 32: Matter of Wentworth, 230 N. Y. 176; Curtis v. Leavitt, 15 N. Y. 9; Matter of Crayton, 56 Fed. Rep. [2d] 282; Morse v. Goold, 11 N. Y. 281.) No constitutional rights of plaintiffs have been affected by section 55-a of the Insurance Law. (Dahnke-Walker Milling Co. v. Bondurant, 257 U. S. 282; Home Building & Loan Assn. v. Blaisdell, 290 U. S. 398; Penniman’s Case, 103 U. S. 714.)
   Crane, J.

Did section 55-a of the Insurance Law (Cons. Laws, ch. 28), effective March 31, 1927, apply to pre-existing creditors as well as pre-existing policies? On or about November 6, 1924, Arthur L. Selig made and delivered to Morton H. Meinhard twenty-five promissory notes, each in the sum of $1,000, payable annually thereafter over a period of twenty-five years, one note becoming due on November 6 of each year, commencing in 1925, and ending 1949. The first five notes became due and were paid. On November 12, 1930, Selig died, leaving twenty notes unpaid. At the time of his death Selig was insolvent, and had been for several years prior thereto. Consequently, the plaintiffs could not look to his estate for the payment of any part of the $20,000, and interest due thereon.

Selig, however, carried insurance on his life in the aggregate principal amount of at least $155,000, represented by several policies of insurance, all of which were issued prior to March 31, 1927, when section 55-a of the Insurance Law took effect.

The maintenance of these policies required the payment of net premiums largely in excess of $500 per annum, which premiums have always been paid by Selig out of his own personal estate, with the knowledge and consent of his wife. Selig’s wife was named as beneficiary in these policies, but Selig had reserved the right to change the beneficiary in all the policies at any time. Not having exercised this privilege, however, the wife received at his death the proceeds, which created the net sum of at least $105,000 over and above the loans made to Selig in his lifetime.

On April 15, 1931, Meinhard died, and the plaintiffs, as his executors, have brought this action in a representative capacity on behalf of themselves and all other creditors whose claims antedate the enactment of section 55-a of the Insurance Law, to recover the amounts reserved to them by the provisions of section 52 of the Domestic Relations Law (Cons. Laws, ch. 14). The plaintiffs’ complaint has been dismissed for failure to state a cause of action, and the case comes here, after unanimous affirmance by the Appellate Division, as one involving directly a constitutional question. If section 55-a of the Insurance Law be retroactive its constitutionality is in question.

First, as to the construction of the act. The Domestic Relations Law (Laws of 1909, ch. 19, § 52) reads in part as follows: “ Insurance of husband’s life. A married woman may, in her own name, or in the name of a third person, with his consent, as her trustee, cause the life of her husband to be insured for a definite period, or for the term of his natural fife. Where a married woman survives such period or term she is entitled to receive the insurance money, payable by the terms of the policy, as her separate property, and free from any claim of a creditor or representative of her husband, except, that where the premium actually paid annually out of the husband’s property exceeds five hundred dollars, that portion of the insurance money which is purchased by excess of premium above five hundred dollars, is primarily liable for the husband’s debts. * * * ”

In Matter of Thompson (184 N. Y. 36, 40) we said the following, regarding this provision: Construing this statute, we have held that the wife’s right to the insurance fund created by the husband’s annual appropriation or investment of his moneys in premiums for insurance upon his fife for the benefit of his wife, does not rest upon contract, but upon legislative grant, exempting the fund from the claims of creditors; that the statute is an enabling act and relates to the remedy; that the state has the right to change the exemption before the fund reaches the wife, and, therefore, the proceeds of policies issued before the enactment of the statute are subject to its provisions. (Kittel v. Domeyer, 175 N. Y. 205.) We further held in that case that the statute does not authorize an immediate proceeding by a creditor of the husband against the insurance fund without regard to the condition of the estate generally, and that the wife should not be deprived of any portion of the insurance moneys until it is ascertained by administration upon the estate that the other assets will not suffice to satisfy the claims of creditors. We also declared that until such claims are discharged they are a hen upon so much of the insurance money as was purchased by the excess of the annual premium above $500; that the amount thus purchased is, as to the wife, a fund for all the creditors of the deceased and hable primarily for the payment of the husband’s debts in preference to the rights of the wife, which are thus postponed as to that part of the insurance to the rights of creditors.”

The reference to the rights of creditors to insurance purchased by excess premiums, as a hen, was intended to convey the idea, no doubt, that the right was one of substance, an important part of the remedy afforded creditors to collect their debts, and that, as against the wife, the right was property of which the creditors could not be divested without due process of law or impaired by State legislation; that this remedy was a material part of their contract.

The Insurance Law, above referred to, section 55-a, in effect March 31, 1927, changed this right of creditors, and the only question before us is whether it apphes to pre-existing creditors hke the plaintiffs. Its provisions are: “ Rights of creditors and beneficiaries under policies of life insurance. If a policy of insurance, whether heretofore or hereafter issued, is effected by any person on his own life or on another life, in favor of a person other than himself, or, except in cases of transfer with intent to defraud creditors, if a policy of life insurance is assigned or in any way made payable to any such person, the lawful beneficiary or assignee thereof, other than the insured or the person so effecting such insurance, or his executors or administrators, shall be entitled to its proceeds and avails against the creditors and representatives of the insured and of the person effecting the same, whether or not the right to change the beneficiary is reserved or permitted, and whether or not the policy is made payable to the person whose life is insured if the beneficiary or assignee shall predecease such person * *

Note must be taken of the phraseology of the section. It makes no reference to pre-existing creditors although it does apply to a policy of insurance theretofore issued. This statute may be read so as to apply to pre-existing policies without affecting pre-existing creditors. In other words, it is quite reasonable to suppose that cases would arise where policies were existing prior to March 31, 1927, although the debts were not incurred until after that date. As to such subsequent creditors this section was valid. We give this section such a meaning, rather than one of doubtful legality, in making it apply to creditors in the plaintiffs’ class. This no doubt is what this court had in mind when it said in United States Mortgage & Trust Co. v. Ruggles (258 N. Y. 32, p. 39), referring to the repeal of the exception in section 52 of the Domestic Relations Law, The rights of the plaintiff were not affected by the repeal, as nothing indicates that it was the intention of the Legislature to prejudice the rights of creditors in the proceeds of policies due or paid prior to the new enactment (Hollenbach v. Born, 238 N. Y. 34), and if such was the intention the Constitution would frustrate it. (Bank of Minden v. Clement, 256 U. S. 126.) ” Although this statement was not necessary to the decision, and appears to apply to past due policies, yet it indicates the impression which the court had at the time that this legislation was prospective in all particulars except for the one express reservation — its application to pre-existing policies. It does not apply to pre-existing claims of creditors.

This interpretation has found support in Matter of Messinger (29 Fed. Rep. [2d] 158, 161), wherein that court stated, “ To the creditors whose claims arose prior to the passage of the law, it would not apply. Not only is a retroactive statute which disturbs existing rights unlikely to have been intended, but a State law which deprives existing creditors of their rights to resort to property for payment of their claims would impair the obligation of contracts, and contravene section 10, article 1 of the Federal Constitution.” The General Construction Law (Cons. Laws, ch. 22), section 93, enacts that the repeal of a statute or part thereof shall not affect or impair any right acquired prior to the time such repeal takes effect. Statutes dealing with matters other than those of procedure will not be interpreted as retroactive unless such intent of the Legislature clearly appears from its terms. (Orinoco Realty Co. v. Bandler, 233 N. Y. 24, 28.) Words in a statute ought not to have a retrospective operation unless they are so clear, strong, and imperative, that no other meaning can be annexed to them, or unless the intention of the legislature cannot be otherwise satisfied. This rule ought especially to be adhered to, when such a construction will alter the preexisting situation of parties, or will affect or interfere with their antecedent rights. * * * ” (United States v. Heth, 3 Cranch, 399, p. 413.) That the notes of Meinhard became due after the enactment of section 55-a of the Insurance Law makes no difference with this ruling (Bank of Minden v. Clement, 256 U. S. 126) as the debt was contracted under the security and remedies of the law as it existed in 1924.

Should we read this statute so as to include pre-existing creditors we might be depriving them of that lien and property which we said in Matter of Thompson (supra) was theirs under section 52 of the Domestic Relations Law. That this might be (although it is unnecessary so to decide) contrary to the provisions of the Federal Constitution and beyond the power of the State Legislature, reference may be made to Coombes v. Getz (285 U. S. 434); Bank of Minden v. Clement (256 U. S. 126); Edwards v. Kearzey (96 U. S. 595); Gunn v. Barry (82 U. S. 610).

We, therefore, hold that section 55-a of the Insurance Law does not apply to the plaintiffs or to the class which they represent — pre-existing creditors — and that their complaint was improperly dismissed.

The judgment below should, therefore, be reversed, and the motion for judgment on the pleadings denied, with costs in all' cotuts. (See 264 N. Y. 674.)

Pound, Ch. J., Lehman, O’Brien, Hubbs and Crouch, JJ., concur; Kellogg, J., not sitting.

Judgment reversed, etc.


author: Pound, Ch. J.

text:
    Antonio Massa, Respondent, v. Nippon Yusen Kaisha, Appellant.
    (Argued April 18, 1934;
    decided May 22, 1934.)

      George J. Stacy and James J. Mahoney for appellant.
    Plaintiff alone used and controlled the block and fall whose dropping he claims injured him. No defect in them and no negligence on defendant’s part were shown, and res ipso loquitur does not apply. (Rosenstein v.
      McCutcheon, 155 App. Div. 278; Morris v. Railway Co., 148 N. Y. 182; Dobbins v. Brown, 119 N. Y. 188; Francey v. Rutland R. R. Co., 222 N. Y. 482; Stasiukiewicz v. Marcus Contracting Co., 225 App. Div. 54; Eaton v. N. Y. C. & H. R. R. R. Co., 195 N. Y. 267; Klein v. Fraser, 169 App. Div. 812; Anderson v. International Mercantile Marine Co., 238 App. Div. 509; Haigh v. Edelmeyer & Morgan Hod Elevator Co., 123 App. Div. 376; King v. N. Y. C. & H. R. R. R. Co., 66 N. Y. 181; Duhme v. Hamburg-American Packet Co., 184 N. Y. 404.)

      Jacquin Frank and David M. Fink for respondent.
    The case was properly submitted to the jury upon the doctrine of res ipso loquitur. (Liverani v. Clark & Son, 231 N. Y. 178; Marceau v. Rutland R. R. Co., 211 N. Y. 203; The Remus, 17 Fed. Rep. [2d] 948; Pleckaitis v. Ostervolze, Docking Co., 294 Fed. Rep. 834; Alne v. Robinson, 20 Fed. Rep. [2d] 337; Fauntleroy v. Argonaut S. S. Line, 27 Fed. Rep. [2d] 50; Cott v. Erie R. R. Co., 231 N. Y. 67.)
   Pound, Ch. J.

Plaintiff was working, not for defendant, but for a stevedoring contractor in loading drums of oil on defendant’s steamship. The stevedore’s men had been working for three days when an accident happened. A part of the rigging used in loading the drums fell and struck plaintiff. No negligence on the part of defendant was shown. The hoist rigging was in the custody and control of the stevedoring company. The judge charged the jury: the happening of the accident creates a presumption that the defendant did not have a safe appliance.” In other words, the case was presented as being governed by the rule of res ipso loquitur.

The first item of proof necessary to bring this rule into action is that the thing is shown to be under the management of the defendant. (Breen v. N. Y. C. & H. R. R. R. Co., 109 N. Y. 297, 300.) That item is lacking here. There is no presumption that the defendant was lacking in proper care in furnishing proper appliances when the accident might have happened through the carelessness of some member of the stevedore’s gang. The burden of proving freedom from negligence was not cast on defendant merely because it furnished the rigging. The rigging might have been in good condition and the stevedore’s workmen might have caused the accident by careless handling. The burden was not on the defendant to explain why the rigging fell. The rigging was not under the control of the defendant when the accident happened.

The judgments should -be modified by granting a new trial, with costs to appellant to abide the event.

Crane, Lehman, O’Brien, Hubbs and Crouch, JJ., concur.

Judgment accordingly.


text:
    Heating and Plumbing Finance Corporation, Respondent, v. Moses Friedman, Defendant, and 222-224 Metropolitan Avenue Corporation, Appellant.

      (Argued April 16, 1934;
    decided May 22, 1934.)

      Adolph Feldblum, Alfred B. Nathan and Benjamin Lewis for appellant.
    By virtue of the provisions of section 80-d of the Personal Property Law (Cons. Laws, ch. 41), the filing and continuance of the notice of mechanic’s lien by plaintiff’s assignor constituted an election which precludes plaintiff from regaining possession of the chattels sought to be replevied. (Ratchford v. Cayuga Co., 217 N. Y. 565; Brownsville South Realty Co. v. Bayway Bldg. Corp., 221 App. Div. 874; Matter of Emerson v. Buck, 230 N. Y. 380; Matter of Bristol v. Buck, 201 App. Div. 100; 234 N. Y. 504; Cooper-Snell Co. v. State, 230 N. Y. 249; Tompkins v. Hunter, 149 N. Y. 117; Matter of De Peyster, 210 N. Y. 216; Waters & Co. v. Gerard, 189 N. Y. 302; Kirk v. Crystal, 118 App. Div. 32; 193 N. Y. 622; Shipley Constr. & Supply Co. v. Mager, 165 App. Div. 866; 221 N. Y. 679; York Mfg. Co. v. Mager, 165 App. Div. 872; Barbour Heating & Elec. Co. v. Ewing, 16 Ala. App. 280; Hickman v. Richburg, 122 Ala. 638; Fire Protection Co. v. Hawkey Tire & Rubber Co., 8 Fed. Rep. [2d] 810.)

      Arthur A. Atha and J. Hibbard Taylor for respondent.
    Plaintiff is not precluded from regaining possession of the chattels sought to be replevied. (Rapid Fireproof Door Co. v. Largo Corp., 243 N. Y. 482; Warner Elevator Mfg. Co. v. Capital Investment B. N. L. Assn., 127 Mich. 323; Arctic Ice Machinery Co. v. Armstrong County Trust Co., 192 Fed. Rep. 114; Bierce, Ltd., v. Hutchins, 205 U. S. 340.)
   Crane, J.

To the Personal Property Law (Cons. Laws, ch. 41) was added a new section by chapter 642 of the Laws of 1922, known as section 80-d. It reads: “After the retaking of possession as provided in section seventy-six the buyer shall be liable for the price only after a resale and only to the extent provided in section eighty-b. Neither the bringing of an action by the seller for the recovery of the whole or any part of the price, nor the recovery of judgment in such action, nor the collection of a portion of the price, shall be deemed inconsistent with a later retaking of the goods as provided in section seventy-six. But such right of retaking shall not be exercised by the seller after he has collected the entire price, or after he has claimed a hen upon the goods, or attached them, or levied upon them as the goods of the buyer.”

The part of this section which we are called upon to apply in this case is that portion which states that the seller cannot retake his goods after he has claimed a hen upon them.

The complaint alleges that the plaintiff is the owner and entitled to the immediate possession of boilers and radiators which were installed in 222-224 Metropolitan avenue, in the borough of Brooklyn, city and State of New York; that on the 29th day of July, 1930, one Moses Friedman, a defendant, signed a conditional bill of sale to Rifkind & Marshall covering these chattels, and that the defendant and his successor in interest, 222-224 Metropohtan Avenue Corporation, have defaulted in the terms of said conditional bill of sale. Due filing and assignment by Rifkind & Marshall to the plaintiff herein were also alleged, together with a demand for the chattels.

The answer sets forth the matter which is the basis for the defendant’s motion for judgment on the pleadings. This matter is set up as a separate and distinct defense and is admitted by the reply subsequently served by the plaintiff. It appears from the answer that the boilers, pipes and radiators mentioned in the complaint were installed in the premises mentioned and that thereafter, on or about the 6th day of December, 1930, or five months after the giving of the conditional bill of sale, Rifkind & Marshall filed in the office of the county clerk of Kings county a notice of mechanic’s lien, wherein they claimed a lien 'by reason of the installation in the said premises of these boilers, pipes and radiators mentioned in the complaint.

The next year and on the 14th day of November, 1931, the said vendors procured an order from the Supreme Court of Kings county, continuing said Hen for a period of one year from said date.

The mechanic’s Hen thus filed attached not only to the real property (222-224 Metropofitan avenue) but to aU the improvements upon the property, including the boilers, pipes and radiators installed by the vendorHenors. (Lien Law, art. II, § 3; Cons. Laws, ch. 33.)

These facts bring this case directly within the provision of section 80-d of the Personal Property Law, above quoted. The plaintiff, assignee of Rifkind & Marshall, cannot retake this property under claim of ownership for by the filing of the mechanic’s Hen, attaching to the property, they have conceded title in the defendant or owner of the realty. Not only does the statute apply to which we must give force and effect, but the inconsistent position taken by Rifkind & MarshaU amounts to an election of remedies. This was the law even piior to 1922 when section 80-d of the Personal Property Law came into force and effect. (Kirk v. Crystal, 118 App. Div. 32; affd., 193 N. Y. 622; Shipley Construction & Supply Co. v. Mager, 165 App. Div. 866; affd., 221 N. Y. 679.) (See, also, Ratchford v. Cayuga County Cold Storage & Warehouse Co., 217 N. Y. 565; Brownsville South Realty Co. v. Bayway Building Corp., 221 App. Div. 874.) The filing of this notice of hen was the assertion of a claim irreconcilable and inconsistent with the demand made in this action. The mechanic’s hen claim was predicated upon the fact that the title to the boilers and radiators had passed from the plaintiff’s assignors to the defendant realty owner, while here the claim is that title never passed; that it always remained in Rif kind & Marshall and their assignees. The choice of one remedy having been made and acted upon became final and the right to follow the other has gone. This is the statute and such was the law before the statute.

Much reliance has been placed below upon Rapid Fireproof Door Co. v. Largo Corp. (243 N. Y. 482), but this case dealt with personal property which was not affixed to the realty and upon which no lien could or did attach. Likewise Bierce, Ltd., v. Hutchins (205 U. S. 340) relates to a hen which was bad so that no title could pass as to equipment which did not go into the railroad, and even if this be not so, this case and the others following it in the Federal courts (Nauman Co. v. Bradshaw, 193 Fed. Rep. 350, and Arctic Ice Machinery Co. v. Armstrong County Trust Co., 192 Fed. Rep. 114) were not controlled by statutes similar to our own.

For the reasons here stated, the orders should be reversed and the defendant-appellant’s motion for judgment on the pleadings, dismissing the complaint, granted, with costs in all courts. The question certified should be answered in the affirmative.

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

. Ordered accordingly.


text:
    Alfred Garthe, Respondent, v. Jacob Ruppert, Appellant.
    (Argued April 18, 1934;
    decided May 22, 1934.)

      Grant C. Fox for appellant.
    Defendant was not negligent. It violated no legal right of plaintiff whether he be held to have been a mere licensee or an invitee. (Weitzman v. Barber Asphalt Co., 190 N. Y. 452; Cusick v. Adams, 115 N. Y. 55; Fox v. Warner-Quinlan A. Co., 204 N. Y. 240; Larkin v. O'Neill, 119 N. Y. 221; Hart v. Grennell, 122 N. Y. 371; Flynn v. C. R. R. Co., 142 N. Y. 439; Larmore v. Crown Point Iron Co., 101 N. Y. 391; Beck v. Carter, 68 N. Y. 283; Lindsley v. Stern, 203 App. Div. 615; De Negro v. Christman, 77 Misc. Rep. 47; Thomas v. Quartermaine, 18 Q. B. D. 685; Bennett v. Railroad Co., 102 U. S. 577.) The trial court erroneously admitted, on behalf of plaintiff, testimony as to how certain portions of the premises of three other breweries were constructed, how they handled the incoming and the spent grains, and as to the condition of their toilets. (Rich v. Pelham Hod Elevating Co., 23 App. Div. 246; Jarvis v. Brooklyn El. R. R. Co., 133 N. Y. 623; Shannahan v. Empire Engineering Co., 204 N. Y. 543; McMichael v. Federal Printing Co., 139 App. Div. 225; Bennett v. Long Island R. R. Co., 163 N. Y. 1.)

      Milton Speiser, Joseph Speiser and Arthur L. Gould for respondent.
    The defendant was negligent in violating a duty that he owed to the plaintiff. (Hamblet v. Buffalo Library Garage Co., 222 App. Div. 331; Miller v. International Harvester Co., 193 App. Div. 258; Peil v. Reinhart, 127 N. Y. 381; Christensen v. Hannon, Inc., 230 N. Y. 205; Conway v. Naylor, 222 N. Y. 437; Palmer v. Dearing, 93 N. Y. 7; Larsen v. Lackawanna Steel Co., 146 App. Div. 238; Kettle v. Turl, 162 N. Y. 255; Sharp v. Erie R. R. Co., 184 N. Y. 100; Siegel v. American

      Seating Co., 161 App. Div. 54; Reinzi v. Tilyou, 252 N. Y. 97; Keegan v. Hohorst, 261 N. Y. 566; Stokes v. City of New York, 258 N. Y. 564; Magid v. City of New York, 259 N. Y. 618.)
   Crane, J.

The defendant Jacob Rupperb maintains a brewery at the southeast corner of Third avenue and Ninety-second street, New York city, photographs of which form part of the record. It was erected about 1918, and to all appearances is a smart, up-to-date factory for making beer. The entrance to the offices is on Third avenue. An elevator takes one to the sixth floor where the offices are situated.

The brew yard is on the ground floor and is entered from Ninety-second street. It is about a hundred feet by a hundred feet, into which the trucks drive. The floor of the yard is of cobblestones. It is the receiving department, to which is brought malt, hops, rice, grain, grits, sugar, syrup, cellulose, boxes, sawdust and other articles. The things which are taken out of this yard are the waste or spent grains sold to and removed by the Farmers Feed Company, also malt syrup in cans, barrels, empty boxes and cartons. By processes described in the evidence, the malt is dumped into chutes on the ground floor, and taken by the conveyer to bins and gives off the dust which spreads over the floor. On the other side of the yard are hoppers with spouts, through which the spent or waste grains ■— mash •— are discharged into carts. This waste is wet as it comes through the hopper and spouts.

That the process of making beer is more or less a wet and sloppy business is indicated by the fact that most of the men who work inside the brew house wear rubber boots. When malt and grain are dumped into the chutes and conveyers in the brew yards dust naturally arises and settles on the floor.

It is evident beyond the point of contradiction that the brewery business carried on by the defendant made the floor of the yard and other places where the men worked necessarily wet, mushy, slippery and sloppy. Mr. Ruppert was not unmindful of this, for he had provided, off from the ground floor, an up-to-date locker room such as we find in some of the golf clubs and gymnasiums where the men could keep and change their clothes. Off from this locker room was a toilet with modern equipment and places for the men to wash up. As the men, dirty from their work, came in to this place to clean up, they brought some of the dirt with them. The locker, toilet and the wash room were places made and maintained for the workmen where they came to change their clothes, wash and clean up. We must view conditions with an eye to the purpose of the place and the nature of the employment. This place was maintained for work and for workmen in a wet and mushy employment. No one would expect such a place to be kept as neat and as tidy as a wash room and toilet in a club, hotel or for the use of patrons and customers in stores.

What has just been said was well known to Mr. Alfred Garthe, the plaintiff, who for many years was in the defendant’s employ. Lately he had been living in Jersey carrying on an independent business of selling and distributing drinks, part of the defendant’s product. He did business with the defendant as a customer, and on June 25, 1929, went to the defendant’s office on the sixth floor to see about his financial account. When he got through he went into the yard to see one of the foremen on a personal matter. He asked permission to use the wash room and toilet, and while in there slipped on the floor and hurt his head. He says the floor was not clean; that it was slippery from brewery material which had been dragged in apparently on the boots of the employees. He says that Ruppert was negligent in not keeping this place clean for his use. The answer to bis claim is this: Ruppert was running a brewery, a place of manufacture, and maintained this locker room for the purpose above indicated. It was a place where men were expected to bring in their dirty boots and clothes and clean themselves, and the plaintiff, knew from past experience, as well as everybody else connected with the business, that this wash room would not be at all times clean and dry. The place took on the condition which necessarily arose out of the performance of the work. Its slippery, sloppy condition was caused by the men; they had to clean up somewhere.

The defendant maintained this place for his workmen. It apparently was safe enough for them; for it had been in use for some time. He was not maintaining it for the benefit of customers. Their place of like nature was on the sixth floor, where ample accommodation was furnished for the needs of patrons. This place down in the work shop off from the malt receiving room and yard, where moisture and mussy, damp mash were scattered about, was for the use of workmen and employees. The defendant owed this plaintiff no duty to clean it and make it dry for his special use. Work was going on, surrounded by all those necessary little dangers which accompany activities in factories and breweries. The duty of the defendant was none other than to keep the place reasonably safe for the purpose for which it was maintained — the use of the workmen whose boots must necessarily be dirty and wet as they came into the locker room and the toilet.

Where a person goes upon the premises of another without invitation, but simply as a bare licensee, and the owner of the property passively acquiesces in his coming, if an injury is sustained by reason of a mere defect in the premises the owner is not hable for negligence, for such person has taken all the risks upon himself. A person who makes use of the premises of another for his own convenience and without any sanction save the omission of the owner to forbid him from doing so, has no legal cause of complaint against the owner by reason of having blundered into some open and apparent danger. (Cusick v. Adams, 115 N. Y. 55; Fox v. Warner-Quinlan Asphalt Co., 204 N. Y. 240.)

The plaintiff in this case claims to have been an invitee . in the yard and in the wash room with the permission of the owner and his foreman. As á customer he claims to have had some business with the man he was looking for in the yard. Even considering'him as an invitee, defendant has failed in no duty owing to him as such. The defendant was called upon to use reasonable prudence and care to keep this yard, wash room and toilet in such a condition that people who went in there by his invitation were not unnecessarily or unreasonably exposed to danger. (Larkin v. O’Neill, 119 N. Y. 221; Hart v. Grennell, 122 N. Y. 371; Dougherty v. Pratt Institute, 244 N. Y. 111; Fishman v. Brooklyn Jewish Center, Inc., 234 App. Div. 319 [slippery dance floor].)

Considering the nature of the business, the proximity of the toilet and the wash room to the yard and the purpose for which these were used by the workmen, coupled with the fact that the plaintiff was familiar with the place and the use, and that the toilet was fully lighted and the condition of the floor apparent to any one using bis eyes, we do not see wherein the defendant unnecessarily or unreasonably exposed the plaintiff to danger. The record is barren of any such evidence. In fact, the plaintiff sought to cover this omission by incompetent proof.

The plaintiff proved, over objection and exception, that in another brewery the work was done in a better way than by Buppert; that the necessary goods and grains were received and the waste discharged and carried away without dust upon the one hand and moisture upon the other. It was reasoned by the plaintiff that if other breweries could do this, then Buppert should have done it. Such evidence is incompetent to prove negligence. One man is not obliged to run his business the same as some other man, nor can he be judged before the law according to the methods employed by others. When, however, a custom has prevailed in the trade or in the calling, or certain dangers have been removed by a customary way of doing things safely, this custom may be proved to show that a manufacturer or any one else employing men has fallen below the required standard. Never, however, has it been permitted to take one or two instances as a gouge or guide in place of the custom of the trade. Ruppert was not obliged to change his factory or the methods of receiving and discharging his goods in his yard in order that the wash room off the locker room for his employees might be kept dry instead of wet.

General usage or custom may be shown in order to establish a standard of construction and equipment. When a question of negligence is involved the general usage or practice is competent to show either ordinary care or the failure to exercise such care. (Shannahan v. Empire Engineering Corp., 204 N. Y. 543.) One is not obliged, however, to use the best methods or to have the best equipment or the safest place, but only such as are reasonably safe and appropriate for the business. (Bennett v. Long Island R. R. Co., 163 N. Y. 1; Miele v. Rosenblatt, 164 App. Div. 604.) What some other brewery did might have been better and safer than the ways of Ruppert, but there was no attempt to prove that what the other brewery or breweries did or had was the practice or custom or general usage in the business. For this reason it was incompetent.

Reference was made to the Code of New York City Ordinances (Baldwin’s 1933 N. Y. Code of Ordinances), chapter 20, section 55, which requires a factory to keep cleanly and in a sanitary condition its rooms and offices. Section 284 requires every owner of a boarding house or factory to provide water closets and keep them properly lighted and ventilated in a sanitary condition. To the same effect is the Labor Law (Cons. Laws, ch. 31) (Laws of 1921, ch. 50, § 291). There is no claim in this case that the toilet was not properly constructed, ventilated and cleanly, so far as related to its sanitary condition. The sloppy condition of the floor, as has been said, arose from the nature of the work and is not such a condition as is referred to by these ordinances. Besides, the plaintiff was not an employee.

The error in the admission of the evidence alone would be sufficient to require reversal of this judgment, but as we are unable to see wherein lies the defendant’s negligence we must not only reverse this judgment, but dismiss the complaint.

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

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

Judgments reversed, etc.