author: Hubbs, J. O’Brien, J.

text:
    Katharine D. L. Delafield, Plaintiff, v. Cecil Barret et al., Individually and as Partners under the Firm Name of Spencer Trask & Company, Appellants, and Marie S. Livingston, Respondent. Marie J. Livingston et al., Plaintiffs, v. Cecil Barret et al., Individually and as Partners under the Firm Name of Spencer Trask & Company, Appellants, and Marie S. Livingston, Respondent.

      (Argued October 24, 1935;
    decided January 28, 1936.)

      A. Donald MacKinnon and Egbert W. Doughty for appellants.
    The agreement of indemnity is valid and enforceable. (Cons. Laws, ch. 13, § 111; Cons. Laws, ch. 41, § 21; Cons. Laws, ch. 14, § 85; Matter of Adriance, 145 Misc. Rep. 345; Villard v. Villard, 219 N. Y. 482; Matter of Cady, 211 App. Div. 373; Clark v. Beers, 61 Conn. 87; Matter of Darlington, 245 Penn. St. 212; Steele v. Leopold, 135 App. Div. 247; 201 N. Y. 518; King v. Talbot, 40 N. Y. 76.) The agreement of indemnity was valid and enforceable, not only as to losses on securities purchased in the general market, but also as to losses on securities owned by defendants Barret and others prior to the sale thereof to plaintiffs. (Schofield v. Jackson, 99 Conn. 515; Trowbridge v. O’ Neill, 243 Mich. 84.)

      Lloyd Paul Stryker and Harold Shapero for respondent.
    The statute limiting investments for guardians is based on sound public policy. (Cons. Laws, ch. 14, § 85; Cons. Laws, ch. 13, § 111; Cons. Laws, ch. 2, § 239; Matter of

      Vanderbilt, 129 Misc. Rep. 605.) The indemnity agreement is contrary to public policy and is illegal and invalid. (Bliss v. Matteson, 52 Barb. 335.) The defendants acts were tortious. An agreement to indemnify them against the consequences of such acts is invalid. (Reiner v. North American Newspaper Alliance, 259 N. Y. 250.)
   Hubbs, J.

The respondent Marie S. Livingston was general guardian of her two minor daughters, the plaintiffs in this action. The appellants constituted the firm of Spencer Trask & Company, investment brokers. The respondent Marie S. Livingston called and requested the appellant Barret, a personal friend, to advise her with respect to investments for herself and her children. Barret informed her that his duties constituted investigating new business enterprises in need of financing; that this was the type of securities with which he was most familiar and qualified to advise her. She thereupon informed Barret that such investments would be satisfactory to her for the investment of her own funds and the funds of her children. Her own attorney advised her that the investment of the funds of’her children in securities other than those specified by the laws of the State for investment by guardians would involve an assumption of risk on her part and on the part of appellants. Her attorney suggested to Barret and to the respondent Marie S. Livingston that it would be proper for her to indemnify appellants against any liability which appellants might incur as a result of making such investments. Barret informed her that appellants would not be willing to assist her in the investment of her children’s funds in the manner requested unless she would agree to indemnify the firm against such liability. Pursuant to her instructions, her attorney prepared an indemnity agreement and she executed it and delivered it to appellants. The agreement was in the following form:

“It is my intention to place in your hands certain funds to invest for me as General Guardian of my children, and in making these investments, I wish to give you the widest possible scope. Whatever investments you may make in future will be satisfactory to me as General Guardian, and I hereby agree that I will hold you harmless and will indemnify you for any claims which may be made against you or your firm for investing the funds of my children in securities other than those which a guardian is permitted to invest in under the laws of this State.

Very truly yours,
“ MARIE S. LIVINGSTON.”

Thereafter, the appellants received various sums of money from the respondent Marie S. Livingston which moneys belonged to the plaintiffs herein and whose moneys it used in part in the purchase of securities not of the nature of those specified in section 111 of the Decedent Estate Law (Cons. Laws, ch. 13), made applicable to guardians by section 85 of the Domestic Relations Law (Cons. Laws, ch. 14), and in part in payment for securities of like nature not purchased by appellants, but issued by them in the course of the financing of business ventures. These transactions continued from on or about October 5, 1925, when letters of guardianship were issued to the respondent Marie S. Livingston, until in or about the month of June, 1929. During all this time the respondent Marie S. Livingston expressed no dissatisfaction with the manner in which her funds or the funds of her children had been handled and in fact no complaint was made until about June 5, 1932, when securities of all kinds had seriously declined in value and the investment business was in a chaotic condition.

There is no indication in the record in this case that the appellants made any misrepresentations to the plaintiffs or to the respondent Marie S. Livingston. It appears that the appellants acted in good faith toward the plaintiffs and the respondent Marie S. Livingston. The appellants bought and sold securities for several years, rendering in the meantime statements which clearly indicated the nature of the securities sold to and bought for_ the accounts of these infants.

This action was instituted to recover the moneys of the infant plaintiffs paid to appellants and by them used in the pinchase for or sale to the plaintiffs of securities not of the nature of those specified in the statutes referred to. On motion the respondent Marie S. Livingston was made a party to this action and judgment sought against her on the indemnity agreement. The Special Term decided in favor of the plaintiffs against appellants .and in favor of the appellants as against Marie S. Livingston on the indemnity agreement. The Appellate Division affirmed the judgment in favor of the plaintiffs and reversed it in so far as it adjudged Marie S. Livingston hable on the indemnity agreement, on the ground that the agreement in question is void as against public policy.

The sole question involved on this appeal is whether the facts proven sustain the defense that the indemnity agreement is void and unenforceable. A decision by this court in her favor would result in permitting her to repudiate a contract entered into by her with full knowledge that it was being relied upon by the appellants, a contract prepared by her own attorney, the purpose and effect of which were clearly understood by her.

While the public policy of the State requires that persons who deal with the funds of infants and other funds held in a fiduciary capacity shall be held strictly accountable for the manner in which they deal with those funds to the extent that if they convert the same they shall be deemed guilty of larceny, Penal Law, sections 1290 and 1302, and if they invest those funds otherwise than in securities of the kind and nature specified in the Decedent Estate Law, section 111, and Personal Property Law, section 21, they shall be held responsible for any resultant loss, it does not necessarily follow that such public policy requires the imposition of a penalty not within the contemplation of legislative enactments and entirely beyond the previous judicial decisions on the subject.

It must be borne in mind that although the Legislature has specified certain types of securities as proper for the investment of trust funds, and by so doing has afforded a measure of protection to fiduciaries, in that by investment in the permitted securities they presumptively, at least, are entitled to be relieved of that liability which the courts have sometimes imposed upon them where loss resulted from their management of the trust estate, it has not imposed or attempted to impose any liability, penal or civil, for the investment of such funds in securities not of the kind specified in the statutes. The liability which rests upon a fiduciary to reimburse the estate of a ward is one imposed by the courts and not by the Legislature. The statutes in question are not mandatory in form. Their purpose would seem to be to specify those types of investments which to the Legislature seem to afford a maximum of safety. The fiduciary who invests in securities within the specified classes is not by the statutes freed from liability for resultant losses if he fails to exercise reasonable judgment and discretion in making the investment. (See Matter of Jacobs, 152 Misc. Rep. 139.)

The effect of the statutes is not to excuse the fiduciary in case of loss where he invests in securities of the permitted classes without proper investigation and the exercise of reasonable care or to create a liability where liability would not exist in the absence of the statutes. The result of the investment of trust funds in securities not within the classes specified in the statutes is suggested in Steele v. Leopold (135 App. Div. 247, 257; modfd., 201 N. Y. 518) in the following language: Such an appropriation of trust funds is regarded as a devastavit, and the funds are at once recoverable, but it does not follow that the act is in all cases regarded as corrupt or so contrary to the rules of public policy that it must necessarily be considered tortious.”

While public policy requires that trust estates be protected to the extent that where other than permitted investments are made, the estates shall be reimbursed in the event of loss, the enactment of the statutes in question does not so change the public policy of the State as to require the imposition of penalties not heretofore recognized as proper or necessitate a determination that acts which otherwise would not have been deemed tortious are of that nature. The primary duty of a guardian is to protect the estate of his ward and so manage it as to produce as large an income as is consistent with safety of investment. His action in investing in securities not specified in the statute, while not to be commended in view of the legislative stamp of approval placed upon securities of the enumerated classes, may not in fact be unwise or result in impairment of the safety of the fund. If he invests in securities other than those of the permitted class, he cannot set up the statute as supporting either his good judgment or his good faith. If loss results he must bear the loss. Where there is no fraud or unfair dealing, where he has acted in good faith, has exercised care and reasonable business judgment and it is apparent that his purpose was to further the interests of his ward, there should not be added to his civil liability for the loss the stigma of holding his action tortious, at least until such time as the Legislature shall have imposed penalties penal or civil for investing in securities of other than the permitted classes.

We feel that in the instant case no tort was involved in the action of the guardian or of the appellants in investing in the securities purchased by the appellants for the accounts of these infants. Likewise, no crime was involved. We reach the conclusion that the indemnity agreement was not based upon or a part of an illegal transaction and that the enforcement of that agreement is not against public policy. The statutes referred to provide for indemnity agreements, and if the intent to deal in other than permitted securities were known to an indemnitor, it is questionable if the authorization to take indemnity would be held to be so limited as to exclude liability on the ground of illegality of the investments if the interests of the ward were at stake in an action on such an indemnity agreement. Where the guardian himself induces another by personal guaranties to assist in the purchase of securities which, while not permitted by statute, are likewise not prohibited by statute, there is no equity in permitting the guardian to escape the burden assumed and to cast it upon the other party when loss results from transactions had in reliance upon those guaranties. This is not a case where the party must rely upon his own fraud or wrong in order to recover as was presented in Riggs v. Palmer (115 N. Y. 506). Neither is the contract one in effect to commit a tort as that under consideration in Reiner v. North American Newspaper Alliance (259 N. Y. 250).

Since we must hold that while the investments were unauthorized they were not prohibited, we cannot go to the extent of agreeing that public policy requires the agreement in suit to be held unenforceable. If further protection for the estate of infants is required, it should not be furnished by the extension of established rules as laid down by the courts but rather by legislative enactment.

The judgments of the Appellate Division in favor of the respondent Marie S. Livingston should be reversed and the judgments of the Special Term as against her affirmed, with costs to appellants against said Marie S. Livingston; otherwise the judgment should be affirmed.

O’Brien, J.

(dissenting). I vote to affirm. Both parties knew that, pursuant to section 85 of the Domestic Relations Law and section 21 of the Personal Property Law, the guardian was exceeding her powers in purchasing speculative stocks for the estates of infants. Those statutes confer upon a guardian only those powers provided by section 111 of the Decedent Estate Law, which in turn authorizes an executor to invest in the same kind of securities as those in which a savings bank may invest. The Banking Law (Cons. Laws, ch. 2, § 239) allows investments by savings banks in certain enumerated kinds of securities “ and no others.” A savings bank, therefore, violates the statute when it purchases securities not authorized by this section and this guardian not only exceeded her powers in buying speculative stocks but also violated the statute. These investments were not only unauthorized but were actually prohibited. Defendant Barret was aware of this fact and aided her in her violation. He is equally hable. (National Surety Co. v. Manhattan Mortgage Co., 185 App. Div. 733.) Before the guardian made her indemnity agreement with him, he wrote to her suggesting that her attorney has no doubt told you that there is some liability connected with doing this, which you are ready to assume and which I will be also, if it would only concern us, but in the event of the death of either one of us, as you know, other factors would be brought in, and he has therefore suggested that you should write me a letter absolving me of any such liability.” The Appellate Division has unanimously decided that an agreement so intentionally violative of the purpose of the statute enacted for the protection of infants’ property is void as against public policy. Courts are not eager to protect one who makes such a contract, but they will refuse to aid another who has participated with that one in the violation of a statute. Not only does the conclusion of the Appellate Division in this case appear to be firmly based on the law but it seems to be a most salutary rule. A different result tends to encourage stockbrokers, without incurring any liability, to induce guardians and other trustees to gamble in speculative stocks forbidden by the Banking Law, the Decedent Estate Law and the Domestic Relations Law.

Crane, Ch. J., Lehman and Loughran, JJ., concur with Hubbs, J.; O’Brien, J., dissents in opinion; Crouch and Finch, JJ., not sitting,

Judgment accordingly,


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    New Rochelle Securities Company, Appellant, v. International Thrift Society, Inc., et al., Defendants, and Milton Mayer et al., Respondents.
    (Submitted January 14, 1936;
    decided January 28, 1936.)

      Walter H. Young for appellant.
    There is no proof, and it cannot be presumed, that if the date of the note was changed, such change was made by or at the direction of the payee of the note, or with its knowledge. (Linick v. Nutting & Co., 140 App. Div. 265.) Even if it be assumed that the date of the note was altered, such change was not material and does not avail the indorsers as a defense. (Packard v. Windholz, 40 Misc. Rep. 347; 88 App. Div. 365; 180 N. Y. 549.)

      Milton Mayer and Aaron Simmons for respondents.
    The change in the date of the note constituted a material alteration within the meaning of the statute (Cons. Laws, ch. 38, §§ 205, 206), and operated to release the indorsers from liability. (Hull v. Littauer, 162 N. Y. 569; Second Nat. Bank v. Weston, 172 N. Y. 250; Locicero v. Messina, 239 App. Div. 635; New York Bankers, Inc., v. Duncan, 257 N. Y. 160; Littlefield v. Lawrence, 83 App. Div. 327; Chapin-Owen Co. v. Yeoman, 233 App. Div. 492; Chesapeake & Ohio Ry. Co. v. Martin, 283 U. S. 209; Washington Finance Corp. v. Glass, 74 Wash. 653; Wood
      v. Steele, 73 U. S. 80; Booth v. Powers, 56 N. Y. 22; Meyer v. Huneke, 55 N. Y. 412; Crawford v. West Side Bank, 100 N. Y. 50; Elias v. Whitney, 50 Misc. Rep. 326; Abraham v. Sabbatino, 102 Misc. Rep. 511; Golden v. Furniture Frame Factories, Inc., 235 App. Div. 704; Manufacturers Trust Co. v. Steinhardt, 265 N. Y. 145; Plaintiff failed to sustain the burden of proof. (Farmers Loan & Trust Co. v. Siefke, 144 N. Y. 354; Elias v. Whitney, 50 Misc. Rep. 326.)
   Per Curiam.

The judgment should be affirmed upon the ground that the note in suit had been materially altered without the consent of the respondents, that plaintiff’s assignor was not a holder in due course as it was apparent on inspection that the note had been altered, and the plaintiff failed to sustain the burden of proof upon the question of alteration of the note. (See sections 91, 205 and 206 of the Negotiable Instruments Law [Cons. Laws, ch. 38]; National Ulster County Bank v. Madden, 114 N. Y. 280.) Other points raised not answered.

The judgment should be affirmed, with costs.

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

Judgment affirmed.


author: Crane, Ch. J.

text:
    Laurent Van der Stegen, Doing Business under the Name of The Belgian Trading Company, Appellant, and Frederick N. Matthews et al., Copartners under the Firm Name of Lowe, Bingham & Matthews, as Curators in Bankruptcy, Appellants and Respondents, v. Neuss, Hesslein & Co., Inc., Respondent and Appellant.
    (Argued December 5, 1935;
    decided March 3, 1936.)

      Robert H. O’Brien, Richard Jones and Oliver A. Pendar for plaintiffs, appellants and respondents.
    The Statute of Limitations is not a bar to the maintenance of the action. (Weldon v. United States, 65 Fed. Rep. [2d] 748; Johnson v. Phœnix Bridge Co., 197 N. Y. 316; Boyd v. U. S. Mortgage & Trust Co., 187 N. Y. 262; Bowen v. Phœnix Bridge Co., 198 N. Y. 615; Murray v. N. Y., O. & W. R. R. Co., 242 App. Div. 374; Missouri, K. & T. Ry. Co. v. Wulf, 226 U. S. 570; McDonald v. Nebraska, 101 Fed. Rep. 171; Green v. United States, 7 Ct. of Claims Rep. 496; Beresh v. Knights of Honor, 255 Ill. 122; Chesapeake & Ohio Ry. Co. v. Fish, 170 Ill. App. 359; United States Ins. Co. v. Ludwig, 108 Ill. 514; Chicago & Northwestern Ry. Co. v. Jenkins, 103 Ill. 588; Service v. Farmington Sav. Bank, 62 Kan. 857; Harlan v. Loomis, 92 Kan. 398; Hucklebridge v. A., T. & S. F. Ry. Co., 66 Kan. 443; Williams v. Missouri Valley Bridge & Iron Co., 111 Kan. 34; Merced Bank v. Price, 9 Cal. App. 177; Snider v. Dennis, 159 Ark. 231; Territory v. Cox, 3 Mont. 197; Clement v. Commonwealth, 95 Penn. St. 107; Carrigan v. Drake, 36 S. C. 354.)

      Lowell Wadmond for defendant, respondent and appellant.
    The judgment should be reversed because the action was not brought within the six-year Statute of Limitations. (Gleason v. N. W. Mut. Life Ins. Co., 203 N. Y. 507; Broun v. Cleveland Trust Co., 233 N. Y. 399; Adrico Realty Corp. v. People, 250 N. Y. 29; Streeter v. Graham & Norton Co., 263 N. Y. 39; Shaw v. Cock, 78 N. Y. 194; Johnson v. Phœnix Bridge Co., 197 N. Y. 316; Boyd v. U. S. Mortgage & Trust Co., 187 N. Y. 262; Doyle v. Carney, 190 N. Y. 386; New York State Monitor Assn. v. Remington Agricultural Works, 89 N. Y. 22; Foster v. Central Nat. Bank, 183 N. Y. 379; Abbott v. N. Y., L. E. & W. R. R. Co., 120 N. Y. 652; Bassett v. Fish, 75 N. Y. 303; Weil v. N. Y. C. R. R. Co., 235 N. Y. 570.)
   Crane, Ch. J.

The judgment of the Appellate Division and of the Trial Term is affirmed. We desire to add our views upon the question of the Statute of Limitations.

This action is brought by the seller against the buyer to recover damages for breach of contract to purchase certain egg products. The contract was made between The Belgian Trading Company, the seller, and the defendant, Neuss, Hesslein & Co., Inc., a New York corporation, the buyer. The Belgian Trading Company is a trade name, the party in interest being the plaintiff, Laurent Van der Stegen. A contract of purchase was made between Laurent Van der Stegen, representing The Belgian Trading Company, and the defendant at its branch in Shanghai, China, on January 30, 1920. The defendant breached the contract on May 27, 1920, and upon the merits the plaintiff is entitled to judgment, for the reasons set forth in the opinion of the Appellate Division, (243 App. Div. 122.) Certain facts and proceedings, however, have raised the defense of the six-year Statute of Limitations pleaded by the defendant.

On June 20, 1920, Van der Stegen brought suit against the defendant in the United States court for China at Shanghai and recovered judgment in the sum of $171,239.49. The defendant appealed to the United States Circuit Court of Appeals for the Ninth Circuit, which reversed the judgment upon the sole ground that the United States court for China did not have jurisdic-. tian over the person of the defendant. The merits of the cause were not considered. The mandate of the Circuit Court of Appeals reversing the judgment was not entered until June 9, 1926. Thereafter the action in the United States court for China was dismissed by an order of that court entered July 29, 1926.

On February 16, 1926, the present action was commenced upon the same cause, viz., to recover damages for a breach of the contract mentioned. As the breach of contract gave rise to a cause of action on May 27, 1920, the six years within which to bring an action against the defendant would have expired on May 27, 1926. This action, therefore, brought by Van der Stegen was commenced three months and eleven days before the limitation took effect. While the prior action was pending in the United States courts, Van der Stegen was adjudicated a bankrupt by the Belgian Consular Court in Shanghai, and the coplaintiffs, styled Lowe, Bingham & Matthews, are the successor curators in bankruptcy. On September 10, 1926, a motion was made to substitute these curators in the present action, which was a little over three months in point of time after the expiration of the six-year Statute of Limitations, which commenced to run, as above stated, May 27, 1920. The appellant insists that the curators, or trustees in bankruptcy, should not have been brought into this action, as the Statute of Limitations had run against them, although the action itself was brought well within the time. The plea is based upon the assumption that the curators are assignees of any and all the rights of Van der Stegen, and that their claim is a separate, distinct and independent cause of action. This is too strict a construction to place upon our Statute of Limitations, for reasons which we shall attempt to state.

In the first instance, the motion to substitute was denied, but later, and on June 20, 1928, the Appellate Division reversed the denial and brought the curators in as added parties plaintiff. We think the appellant has misunderstood the position and relationship of a receiver or trustee in bankruptcy, if we may take our Bankruptcy Law (U. S. Code, tit. 11) as a guide.

The bankrupt and his trustee are alike interested in an asset such as this claim against the defendant. Upon the appointment of the trustee and the adjudication in bankruptcy, it is true that title to assets passes to the trustee, but it is for the benefit of the bankrupt and his creditors. The trustee has no rights of his own if we eliminate his fees. He takes over the property of the bankrupt to handle it for him, to turn into cash his business or property and out of the amount satisfy his debts as far as it will go. The primary object of a bankruptcy law is to secure a just distribution of the bankrupt’s property among his creditors; the secondary object is the release of the bankrupt from the obligation to pay his debts. (Wilson v. City Bank, 84 U. S. 473.)

The essential principle of the Bankruptcy Law is that all of the bankrupt’s property be divided equally without preference to the payment of his debts. (Ross v. Saunders, 105 Fed. Rep. 915; Matter of Frazin, 183 Fed. Rep. 28.) The bankrupt has not lost all interest or rights in these assets. He must turn over all his property and make fair and full revelation of his claims, because he expects to be discharged from his debts, which is dependent upon his good faith. He is under the moral as well as the legal obligation to pay his debts to the best of his ability.

Again, the trustee in bankruptcy is not obliged to maintain or continue every cause of action which the bankrupt may have. He is not bound to accept burdensome property nor unprofitable contracts (Atchison, T. & S. F. Ry. Co. v. Hurley, 153 Fed. Rep. 503; affd., 213 U. S. 126), nor is he obliged to intervene in any action pending by or against the bankrupt. (Kessler v. Herklotz, 132 App. Div. 278; Fleming v. Courtenay, 98 Me. 401.) If a trustee does not take up the prosecution of a suit the defendant is not released even where the right of action is one that might have passed to the trustee. The bankrupt may continue the prosecu ion of the action. (Griffin v. Mutual Life Ins. Co., 119 Ga. 664.) The relationship, therefore, between the bankrupt and his trustee is for one and the same purpose — to get out of the bankrupt’s property and claims enough money to pay his debts and to relieve the bankrupt, through his discharge, from further responsibility.

It is conceded that if the curators or trustee in bankruptcy had been appointed after this action had been commenced, the substitution of the trustees would have been legal and proper. It could not then be claimed that they were beginning a new action or proceeding upon any claim of their own. They would simply be following up the collection of an asset which when paid would be turned over to them instead of to the bankrupt. So, too, it is conceded that if Van der Stegen had obtained judgment in this present action he could not receive payment in his own right but would be held accountable as trustee, obliged to turn over the money to the curators, and through them to his creditors. Is it, therefore, not the same cause of action when the bankrupt has commenced the suit after having been adjudged a bankrupt, and his trustee or curator ratifies his action and seeks to continue it? To hold otherwise creates a distinction too fine for the commercial world and weakens the bankruptcy law enacted for the benefit of creditors as well as the bankrupt.

Neither is this a case where the defendant has suffered any harm by delay. Ever since 1920 it has been in litigation over its breach of contract. Judgment was recovered against it in China, reversed by the Circuit Court of Appeals, another action immediately started by its creditor, so that its present plea as against these trustees in bankruptcy is dependent solely upon a narrow construction of our Statute of Limitations.

The cause of action commenced by Van der Stegen and that continued by these trustees are one and the same. There are not two claims; there is only one, based upon the same facts and, as we have stated, for the benefit of the bankrupt and his creditors. This is not an instance where, after the Statute of Limitations has run, a party comes into litigation pressing a separate, distinct and new cause of action. Neither is it a case where the trustees seek to bring in another or additional defendant after the running of the statute. This action was brought by Van der Stegen in legal effect for the benefit of his creditors and is simply continued in the name of the trustees or curators who are their legal and proper representatives. All that has been accomplished here is really to change the name of the plaintiff, as the judgment in this case dismisses the action brought by Van der Stegen and gives judgment in the name of the curators.

We look not for authorities embodying the same facts; we do find them, however, enforcing this principle. In Weldon v. United States (65 Fed. Rep. [2d] 748) a stevedore had been injured while working on a vessel. He elected to take compensation from his employer under the terms of the Longshoremen’s and Harbor Workers’ Compensation Act. By the operation of that law his cause of action was thereby assigned to his employer. Thereafter, having no cause of action, because it had been assigned to his employer, he filed a libel against the United States, as owner of the vessel, claiming that his injuries had been caused by the negligence of the vessel or her owner. After the expiration of a two-year period of limitation within which to bring such an action, a motion was made to substitute the employer as libellant. The Circuit Court held that no new cause of action was introduced by the proposed amendment. The claim was in no way altered. The amendment merely had substituted a new party plaintiff.

The appellant seeks to break the force of this authority by saying that the employee was bringing the suit for his employer. The law says the same thing regarding Van der Stegen’s action. He, too, was bringing it, in the eyes of the law, in behalf of his creditors and curators in bankruptcy. He could not keep the recovery for himself. The law would make him a trustee and compel him to pay over.

Service v. Farmington Sav. Bank (62 Kan. 857) also took the same view. An action was brought to recover on a note in the name of the original payee. Before the action was brought the payee had sold and transferred the note and the mortgage securing it to the Farming-ton Savings Bank. After the Statute of Limitations had run, the bank moved to be substituted as plaintiff. The motion was granted. The court said: “ The substitution of the bank as the plaintiff did not in fact change the nature or the identity of the action originally brought against the defendants * ^ *. The action which she brought was based on the same claim and cause of action which is the foundation of the judgment in favor of the bank. The purpose of the suit was the same after the amendment as it was before — to recover upon the note and to foreclose the mortgage given to secure its payment.”

Merced Bank v. Price (9 Cal. App. 177) followed the same course. An action was brought on a promissory note secured by a mortgage in the name of the payee, the Merced Bank. Prior to the commencement of the action it had transferred and assigned the note and mortgage to a Mrs. Ivett. After the Statute of Limitations had run the assignee was substituted as plaintiff in the action. The court held that this substitution was proper.

The plaintiff in Missouri, Kansas & Texas Ry. Co. v. Wulf (226 U. S. 570) brought action in her individual capacity to recover damages by reason of the death of her son. Under the Federal Employers’ Liability Act such an action could only be maintained by the personal representatives of the deceased. After the commencement of the action the plaintiff took out letters of administration and the court held that an amendment substituting her as administratrix was proper, although the order making her a party was made more than two years from the time the alleged cause of action accrued, which was beyond the time allowed for commencing such an action.

This was followed by a similar ruling in N. Y. C. & H. R. R. R. Co. v. Kinney (260 U. S. 340, 346), wherein Mr. Justice Holmes said: Of course an argument can be made on the other side, but when a defendant has had notice from the beginning that the plaintiff sets up and is trying to enforce a claim against it because of specified conduct, the reasons for the statute of limitations do not exist, and we are of opinion that a liberal rule should be applied.” (See, also, Johnson v. Phœnix Bridge Co., 197 N. Y. 316; Murray v. New York, Ontario & Western R. R. Co., 242 App. Div. 374; McDonald v. Nebraska, 101 Fed. Rep. 171; Beresh v. Knights of Honor, 255 111. 122.)

We, therefore, agree with the Appellate Division, that the six-year Statute of Limitations did not prevent the substitution or the bringing in of the curators as parties plaintiff in this action.

We do not touch upon the effect of section 23 of the Civil Practice Act, as the above ruling renders it unnecessary. The motion of the curators, to be made parties to this action, was made on September 10, 1926, within the year after the reversal, not upon the merits, by the Circuit Court of Appeals of the same cause of action which was on June 9, 1926. The Appellate Division seems to have been unanimous in believing that if this were the same cause of action as we believe it to be it came within the provisions of this section. We need not discuss it.

The judgment should be affirmed, with costs to coplaintiffs, respondents-appellants (curators).

Lehman, O’Brien, Hubbs, Crouch and Loughran, JJ., concur; Finch, J., not sitting.

Judgment affirmed.


author: Loughran, J.

text:
    In the Matter of Isidore Weinstock, Respondent, against Thomas W. Hammond, as Sanitation Commissioner of the City of New York, Appellant.
    (Argued January 8, 1936;
    decided March 3, 1936.)

      Paul Windels, Corporation Counsel (Seymour B. Quel, Paxton Blair and Charles E. Ramsgate of counsel), for appellant.
    The four months’ period of limitation prescribed by section 1288 of the Civil Practice Act for the obtaining of certiorari orders commenced to run on the date when the relator was dismissed, and was not affected by the conditional power of the defendant to rehear the charges. (People ex rel. Cook v. Hildreth, 126 N. Y. 360; Matter of Dachs v. Ward, 236 App. Div. 174; Matter of Frank v. Board of Education, 217 App. Div. 761; 243 N. Y. 603.)

      Arthur A. Fink for respondent.
    The four months’ limitation provided by section 1288 of the Civil Practice Act begins to run from the time a rehearing has been denied, from the date of the decision on a rehearing of the original charges, or from the date of the expiration of the time within which a rehearing can be procured. (New York Central R. R. Co. v. Public Service Comm., 238 N. Y. 132.)
   Loughran, J.

The only question presented relates to limitations upon the granting of orders of certiorari.

On July 31, 1934, the relator, after a trial on charges, was dismissed from his service in the Department of Sanitation of the City of New York. As head of that department, the defendant has power to rehear the charges and to reinstate the relator in accordance with section 1543-b of the charter of the city (Laws of 1901, ch. 466). It is thereby provided: The head of a city department or any other officer, board or body of the city, or of a borough, or of a county, vested with the power of appointment and employment, except as to members of the uniformed forces under the jurisdiction of the police commissioner and the fire commissioner, upon written application by the person aggrieved, setting forth the reasons for demanding an opportunity for making a further explanation, shall have the power, in his discretion, to rehear the explanation and any new matter offered in further reply to the charges or complaint upon which such person was dismissed from the service, provided that such person shall waive, in writing, all claim against the city of New York for back pay. Such application for another opportunity to explain shall only be presented to, and granted by the officer who made the removal or to the immediate successor of the removing official when the applicant for the further explanation makes it appear, by affidavit, that on a further chance to explain he can produce evidence such as if before received would probably have changed the decision; if such evidence: has been discovered since the previous explanation, it is not cumulative; and the failure to produce it at the first explanation was not owing to want of diligence. No reinstatement by a successor shall be made where the applicant has been removed more than two years, nor without the consent of the mayor. If upon the further explanation such head of department or other officer, board or body determine that such person has been illegally or unjustly dismissed, such head of department or other officer, board or body, in his discretion, may, upon the approval in writing of the municipal civil service commission, reinstate such person.” (Laws of 1913, ch. 302; amd. L. 1914, ch. 471.)

Without invoking the discretion committed to the defendant by the foregoing charter provision, the relator, on May 31, 1935, obtained ex parte an order of certiorari to review the determination of July 31, 1934. This order was vacated by the Special Term on the defendant’s motion, because a certiorari order to review a determination must be granted and served within four calendar months after the determination to be reviewed becomes final and binding, upon the petitioner or the person whom he represents, either in law or in fact.” (Civ. Prac. Act, § 1288.)

■ On appeal by the relator to the Appellate Division, the refusal of certiorari was affirmed, with the modification that it should be without prejudice to a new application in accordance with section 1286 of the Civil Practice Act. That section, so far as material, provides that certiorari cannot be granted: “ 3. Where the body or officer making the determination is expressly authorized, by statute to rehear the matter upon the petitioner’s application; unless the determination to be reviewed was made upon a rehearing, or a rehearing has been denied, or the time within which the petitioner canprocure a rehearing has elapsed.” ' The Appellate Division held that the four months’ limitation prescribed by section 1288 of the Civil Practice Act will not begin to run against the relator until he is denied a rehearing under section 1543-b of the city charter or his right to apply for such a rehearing expires. The defendant appeals from that ruling.

We think the order of the Appellate Division must be reversed and that of the Special Term affirmed.

Under section 1543-b of the city charter the defendant may reconsider his determination only if the relator waive all claim for back pay and make such additional showing as will probably change the decision. Power so conditioned is not, as we view it, the equivalent of authority “ to rehear the matter ” in the sense of section 1286 of the Civil Practice Act. (Cf. Matter of N. Y. C. R. R. Co. v. Public Service Commission, 238 N. Y. 132.) A large part of the grievance asserted by the relator is his loss of compensation in employment from which, so he claims, the defendant illegally removed him. To say that certiorari to review the defendant’s determination is circumscribed by section 1543-b of the city charter means that the relator must either renounce in part his alleged grievance or wait at least two years before resorting to the courts for relief. We think it could not have been the intention of the Legislature thus to limit or delay review of the determinations of bodies or officers in this class of cases.

It follows that the rights of the parties were finally determined by the result of the departmental proceeding and that certiorari to review that determination is barred by section 1288 of the Civil Practice Act.

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

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

Ordered accordingly.


author: Finch, J.

text:
    In the Matter of the Claim of Carmine Passarelli, Respondent, against Columbia Engineering and Contracting Co., Inc., et al., Respondents, and Home Indemnity Company, Appellant. State Industrial Board, Respondent.

      (Argued January 8, 1936;
    decided March 3, 1936.)

      T. Carlyle Jones and Anthony Bruce for appellant.
    The policy of insurance issued to the subcontractor did not cover the employees of the sub-subcontractor, and the insurance company cannot, therefore, be held to pay compensation to an employee of the sub-subcontractor. It is not compulsory under the Workmen’s Compensation Law (Cons. Laws, ch. 67) for a contractor to insure the employees of its subcontractor. (Monello v. Klein, 216 App. Div. 105; C ark v. Monarch Engineering Co., 248 N. Y. 107; Ferro v. Sinsheimer Estates, 256 N. Y. 398; Matter of Lonky v. Rapid Constr. Co., 241 App. Div. 901.) To hold the contractor’s insurance carrier liable for injuries to employees of the subcontractor, the subcontractor’s work must be the kind of work insured in the policy. (Nieder v. Busch & Sons, Inc., 238 App. Div. 885; 262 N. Y. 656.) Where the employer returns the policy to the insurance company as not wanted, notice of cancellation under section 54 of the Workmen’s Compensation Law is not required — it is only where the carrier requests a cancellation that such notice is required. (Coppersmith v. Silverstein & Wallin, 14 S. D. Rep. 613.)

      John J. Bennett, Jr., Attorney-General (Hector A. Robichon of counsel), for State Industrial Board, respondent.
    The attempted cancellation “ flat ” after the accident was ineffectual. (Matter of Gordon v. Walker, 233 App. Div. 784; Hamberger v. Wolfe-Smith Co., 205 App. Div. 739; Matter of Teufel v. Lido Club Hotel, Inc., 228 App. Div. 870; Matter of Arner v. Manhattan Spring & Couch Co., 264 N. Y. 501; Lawrence v. Fox, 20 N. Y. 268.) The Industrial Board properly found that the employees of the subcontractor were covered. (Yeannelis v. Menides, 233 App. Div. 783; 259 N. Y. 513.) The construction on which the claimant was injured and which was being performed by the subcontractors of another subcontractor under his personal supervision, was embraced within the provisions of the pohcy covering the latter. (Matter of Smith v. Price, 168 App. Div. 421; Matter of Ciappa v. Rosenberg, 242 N. Y. 498; Matter of Wingen v. Fleischman, 252 N. Y. 114; Matter of Lonky v. Rapid Construction Co., 241 App. Div. 901.)

      Jeremiah F. Connor for Columbia Engineering and Contracting Co., Inc., et al., respondents.
    The work in which the subcontractor was engaged at the time of the accident is embraced within the provisions of the policy. (Matter of Smith v. Price, 168 App. Div. 421; Matter of Ciappa v. Rosenberg, 214 App. Div. 744; 242 N. Y. 498; Matter of Wingen v. Fleischman, 252 N. Y. 114; Matter of Costello v. Taylor, 217 N. Y. 179; Matter of Lonky v. Rapid Constr. Co., 241 App. Div. 901.) The pohcy having been in force at the time of the accident, could not be canceled as of the date of its issue, and the act of the company in canceEng the pohcy was in conflict with section 54 of the Workmen’s Compensation Law, and was a nullity. (Matter of Arner v. Manhattan Spring & Couch Co., 240 App. Div. 924; 264 N. Y. 501; Matter of Teufel v. Lido Club Hotel, Inc., 228 App. Div. 870; Matter of Gordon v. Walker, 233 App. Div. 784.)
   Finch, J.

The Columbia Engineering and Contracting Co., Inc., had a general contract for the construction of the White Plains-Tarrytown road. The Metropolitan Casualty Insurance Company insured it against Eability under the Workmen’s Compensation Law (Cons. Laws, ch. 67). The pohcy covered construction but excluded excavation and other dangerous and hazardous work. Emil Eklund had a subcontract with the Columbia Company “ for lifting and hauling of the rock and dirt.” Eklund had insurance with the Southern Surety Company, which insurance was subsequently reinsured by the Home Indemnity Company. This pohcy covered trucking and included drivers, chauffeurs, helpers, stablemen, garage men, blacksmiths and riggers. Clerical office and warehouse employees were excluded. Eklund contracted with Baker & Yettman, Inc., for the part of his contract which involved steam shovel excavations. Baker & Yettman had no compensation insurance. They employed the claimant, Passarelli.

Summing up the situation, we find the Columbia Company, the general contractor, insured by the Metropolitan Casualty Company under a policy which does not cover excavations. Eklund, the subcontractor, for lifting and hauling rock and dirt, was insured by the Southern Surety Company (reinsured by the Home Indemnity Company) under a policy covering trucking and including drivers, helpers, riggers etc. Baker & Yettman, employer of the claimant Passarelli, were subcontractors of the subcontractor or sub-subcontractors of the original contractor, carrying no insurance.

We are concerned here only with Eklund, his insurance carrier, Home Indemnity Company, and the claimant Passarelli, as an employee of Baker & Yettman. On November 17, 1931, the claimant Passarelli was engaged in work being done by Baker & Yettman under their contract. Passarelli was a fireman on the steam shovel and was in the vicinity of the shovel when a nearby rock wall suddenly collapsed and fell against him fracturing his leg and killing Baker of Baker & Yettman. On December 2, 1931, Eklund reported the accident to his broker and the report was eventually sent to the Southern Surety Company. Because of the accident Eklund abandoned his contract and attempted to surrender the policy. The Appellate Division (244 App. Div. 850) has unanimously affirmed an award to Passarelli against the Home Indemnity Company, the reinsurer of Eklund. This court has granted leave to appeal to the Home Indemnity Company.

The Home Indemnity Company denies liability on a number of grounds. It is contended that the policy issued to Eklund was canceled “ flat ” and, therefore, the company is not liable on the policy, The insurance company claims that no premium was ever paid for the policy, that after the accident Eklund stated that he did not want the policy and that he wanted the company to waive its premiums, and that the policy was canceled.

The insurance company cannot be relieved from liability on the policy by such a cancellation. Section 54 (subd. 5) of the Workmen’s Compensation Law is applicable. That section provides that no insurance policy issued against liability arising under the Workmen’s Compensation Law shall be canceled within the time limited in such contract for its expiration until at least ten days after notice of cancellation shall be filed in the office of the Commissioner and also served on the employer. The insurance company urges that, since the statute requires notice to the employer as well as to the Commissioner, it only applies where cancellation is sought by an insurance company and not where the employer seeks the cancellation. The section must be given a broader construction. In Matter of Tuefel v. Lido Club Hotel, Inc. (228 App. Div. 870) an employer, by mistake, obtained insurance from two companies instead of one. Cancellation of one of these policies was requested by the employer after the claimant was injured. An award against both carriers was affirmed because the policy could not be canceled flat,” ten days’ notice being necessary under the statute. This court denied leave to appeal. A like conclusion was reached in Matter of Gordon v. Walker (233 App. Div. 784). (Cf. Matter of Arner v. Manhattan Spring & Couch Co., 264 N. Y. 501.)

The second point raised by the insurance company is that the policy issued to Eklund did not insure the employees of Baker & Yettman, the subcontractor of Eklund and the sub-subcontractor of the Columbia Company, the original contractor. There are findings by the Industrial Board that Passarelli was an employee of Baker & Yettman and that that firm carried no compensation insurance. Section 56 of the Workmen’s Compensation Law provides that a contractor whose contract involves hazardous employment shall be hable to pay compensation to employees of his subcontractor unless the subcontractor primarily hable has secured compensation insurance for such employees. Obviously this section apphes as well between Eklund, the subcontractor, and his subcontractor, Baker & Yettman, as it does between a general contractor and his subcontractor. Consequently Eklund is hable for compensation to the employees of his subcontractor, Baker & Yettman. The Home Indemnity Company, the insurer of Eklund, however, is not hable to the claimant unless the pohcy specifically includes not only the direct employees of Eldund but also the employees of his subcontractor. (Monello v. Klein, 216 App. Div. 105.) There is no such proof in the record. The pohcy has not been put in evidence. In this record we have only an apphcation by Eklund for compensation insurance.

It is urged that the employees of Baker & Yettman can recover on the pohcy issued to Eklund even though that pohcy does not eo nomine cover them. It is pointed out that section 54 (subd. 4) of the Workmen’s Compensation Law provides that every pohcy of insurance “ issued by an insurance carrier covering the habihty of an employer for the payment of -the compensation provided by this chapter shall be deemed to include ah employees of the employer employed at or in connection with the business of the employer carried on, maintained, or operated at the location or locations set forth in such contract or agreement, unless any such employee or employees, or class of employees, shall by the terms of such contract or agreement be expressly excluded therefrom,” and that section 56 of that statute makes the contractor liable for compensation to the employees of his subcontractor whenever such subcontractor has failed to obtain compensation insurance. From this it is concluded that the employees of Baker & Yettman are employees ” of Eklund and may recover on the policy issued to Eklund whether or not it expressly covers them so long as it does not expressly exclude them. But section 54 (subd. 4) does not extend the insurance coverage beyond those who are in the immediate employ of the contractor. The word employee ” denotes contractual relationship. Consequently it- cannot be held that the employees of Baker & Yettman are also employees of Eklund and, therefore, entitled to compensation under a pohcy covering only the employees of Eklund. The hability of the contractor to employees of his subcontractor is a secondary one imposed upon him by law. That this does not cause the relationship of employer-employee to spring up has been recognized by this court in Clark v. Monarch Engineering Co. (248 N. Y. 107) where it was held that a contractor is liable for his neghgence to an employee of a subcontractor although the statute now hmits an employee solely to his remedy under the Workmen’s Compensation Law and does not permit him to maintain a common law action in neghgence against his employer.

Nor can it be held that the objection that the pohcy does not cover employees of Baker & Yettman was waived by failure to raise the point at the hearings. At one time the attorney for the appellant stated, “ But we specifically deny that we had any pohcy in effect * * * covering this alleged accident or any of the parties alleged to be in interest here.” This language, although not precise, was adequate to raise the objection.

The apphcation for insurance shows that the pohcy was to cover trucking and to include not only drivers and garage men but also helpers and riggers, excluding only clerical office and storage warehouse employees. It may well appear when the pohcy is in evidence that the operation of the steam shovel in connection with the process of loading was incidental to the coverage of the pohcy and the claimant entitled to an award against the appellant if the pohcy covers employees of Baker & Yettman. (Matter of Ciappa v. Rosenberg, 242 N. Y. 498.)

Whether or not the policy covers the employees of Baker & .Yettman can readily be determined by the production of the policy at a rehearing.

The order of the Appellate Division and the award of the State Industrial Board should be reversed, without costs, and the claim remitted to the State Industrial Board for a new hearing. •

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

Ordered accordingly.


text:
    The People of the State of New York ex rel. George Patterson, Respondent, against John Bockel, as Acting Warden of the New York City Prison, Appellant. The People of the State of New York, Appellant.
    (Argued January 6, 1936;
    decided March 3, 1936.)

      William Copeland Dodge, District Attorney (Le Roy Mandle of counsel), for The People of the State of New York, appellant.
    The relator is a fugitive from justice and his extradition should have been ordered. (People ex rel. Hutchings v. Motion, 218 App. Div. 461; 245 N. Y. 521; Appleyard v. Massachusetts, 203 U. S. 222; Bassing v. Cady, 208 U. S. 386; Hogan v. O’ Neill, 255 U. S. 52; Matter of Hamilton, 41 Okla. Cr. Rep. 322; Matter of Nabors, 267 Pac. Rep. 58; Matter of McBride, 101 Cal. App. 251; People ex rel. Romain v. Parole Comm., 116 Misc. Rep. 758; People ex rel. Cecere v. Jennings, 250 N. Y. 239; People ex rel. LaPlaca v. Heacox, 238 App. Div. 217; People ex rel. Schlechter v. Jennings, 130 Misc. Rep. 748 ; 223 App. Div. 814; People ex rel. Madden v. Barr, 236 App. Div. 319; 260 N. Y. 581; Matter of Carroll, 86 Tex. Cr. Rep. 301; State ex rel. Shapiro v. Wall, 187 Minn. 246; Hughes v. Pflanz, 138 Fed. Rep. 980; Drinkall v. Spiegel, 68 Conn. 441; Albright v. Clinger, 290 Mo. 83; Matter of Cohen, 104 N. J. Eq. 560.)
    No appearance for respondent.
   Crane, Ch. J.

This is an appeal by the People of the State of New York from an order of the Appellate Division, affirming an order of the Special Term sustaining a writ of habeas corpus and discharging the relator from custody.

On September 13, 1928, the relator was convicted of the crime of burglary in the Superior Court, Fairfield county, State of Connecticut, and committed to the Connecticut State Prison for an indeterminate term of two to four years under the first count, and an additional term of four years under the second count; sentence on each of said counts to commence at the expiration of the sentence under the preceding count, so that under the said sentence the maximum time during which the authorities of Connecticut had jurisdiction of the relator was until February 19, 1935.

On July 5,1934, the Board of Parole of the Connecticut State Prison paroled the relator and permitted him to go to the State of New York for employment.

On October 12, 1934, the relator was arrested in New-York city for burglary, and thereupon the Parole Board of Connecticut revoked his parole and issued a warrant for his arrest and reimprisonment, forwarding the same to the chief inspector of the police department of the city of New York.

As the defendant’s term of imprisonment did not expire until February 19, 1935, and his parole was revoked on October 12, 1934, the prisoner had four months and seven days’ imprisonment to serve in the State of Connecticut. Naturally he could not serve this imprisonment -until he was caught; whenever he was caught and returned to the State of Connecticut he had to make up this four months and seven days. The relator was not arrested in New York until March 5, 1935, and on March 11, 1935, the Governor of this State signed a warrant of rendition to extradite the relator to the State of Connecticut. On writ of habeas corpus the prisoner was discharged on the ground that his time of sentence had expired February 19, 1935. The Special Term seems to have been oblivious to the fact that he had not served this imprisonment and that any prisoner whose parole had been revoked could nullify the parole law by staying in hiding until after the maximum time of service of his sentence had expired. It is for this reason that the authorities have said that when a prisoner violated his parole, and his parole was revoked, he thereafter became the same as an escaped prisoner

This merely means that a prisoner who so conducts himself that the authorities charged with enforcing the parole system find it necessary to revoke his parole must come back and serve the remainder of his sentence. He cannot escape this penalty or this punishment by hiding away from the authorities so that they cannot find him to bring him back. In People ex rel. Newton v. Twombly (228 N. Y. 33, 36) this court said: “ A prisoner who has broken his parole is in the same plight for most purposes as one who has escaped.” This was quoted in People ex rel. Hutchings v. Mallon (218 App. Div. 461; affd., 245 N. Y. 521). The following cases likewise may be consulted: Matter of Hamilton (41 Okla. Cr. Rep. 322); Matter of McBride (101 Cal. App. 251); Matter of Carroll (86 Tex. Cr. Rep. 301); State ex rel. Shapiro v. Wall (187 Minn. 246); Hughes v. Pflanz (138 Fed. Rep. 980); Drinkall v. Spiegel (68 Conn. 441); Albright v. Clinger (290 Mo. 83).

The order of the Appellate Division and that of the Special Term should be reversed, the writ dismissed, and the prisoner remanded for extradition.

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

Ordered accordingly.


author: O’Brien, J.

text:
    Gertrude F. Rosenblum, Appellant, v. Manufacturers Trust Company,. Individually and as Executor and Trustee of Joseph I. Rosenblum, Deceased, et al., Respondents, Impleaded with Others.

      (Argued January 15, 1936;
    decided March 3, 1936.)

      Joseph J. Corn and Arnold Le Bell for appellant.
    Plaintiff is not a volunteer or the donee of an uncompleted gift, but is seeking to reclaim a property right which she already had, which is recognized by statute, and which was taken from her by mistake. (Maurice v. Travelers Ins. Co., 121 Misc. Rep. 427; Matter of Gershman v. Berliner, 214 App. Div. 196; Wagner v. Thieriot, 203 App. Div. 757; 236 N. Y. 588; Lawler v. National Life Assn., 83 Hun, 393; Grems v. Traver, 87 Misc. Rep. 644; 164 App. Div. 968.) Even if the wife’s property right in the policies be considered as inchoate or subject to defeasance by act of her husband, that is a sufficient status entitling her to reclaim that property right if taken from her by mistake. (Simar v. Canaday, 53 N. Y. 298; Remington Paper Co. v. O’ Dougherty, 81 N. Y. 474; Scott v. Prudential Outfitting Co., 92 Misc. Rep. 195; Matter of City of New York [Cropsey Ave.], 244 App. Div. 188.) Having a property right of which she was deprived by mistake, plaintiff is entitled to a cancellation of the change of beneficiary induced by such mistake. (Burt v. Burt, 221 Penn. St. 171; Matter of Clark, 233 App. Div. 487;

      Lady Hood Case, 1 Ch. Div. 476; Moan v. Normile, 37 App. Div. 614; Mitchell v. Langley, 143 Ga. 827; Daugherty v. Daugherty, 152 Ky. 732; Sovereign Camp v. Feltman, 147 So. Rep. 396; Ellis v. Ellis, 26 Times Law Rep. 166.)

      James S. Hays and Milton Kunen for Manufacturers Trust Company, as executor and trustee, respondent.
    After the death of a donor an instrument of gift cannot be reformed nor rescinded for mistake unless the mistake appears on the face of the instrument. ( Union Trust Co. v. Boardman, 215 App. Div. 73; 246 N. Y. 627; Nelson v. McDonald, 61 Hun, 406; Ely v. Megie, 219 N. Y. 112; Smith v. Nat. Benefit Society, 123 N. Y. 85; Zies v. New York Life Ins. Co., 237 App. Div. 367; Lyon v. Balthis, 23 Ohio App. 506; Patterson v. McClenathan, 296 Ill. 475; Fickes v. Baker, 36 Cal. App. 129; Tuthill v. Katz, 174 Mich. 217; Shears v. Westover, 110 Mich. 505; Johnson v. Austin, 86 Ark. 446; Miller v. Beardslee, 175 Mich. 414; Wiley v. Hodge, 104 Wis. 81; Stanforth v. Bailey, 344 Ill. 38; Henry v. Henry, 215 Ill. 205; Triesback v. Tyler, 62 Fla. 580; Smith v. Smith, 80 Ark. 458.) Plaintiff, the original beneficiary of fife insurance policies, has no cause of action personally to rescind the change of beneficiary executed by the donor under a policy wherein the donor reserved to himself the right to change the beneficiary. (Pennsylvania Oil Products Refining Co. v. Willrock Producing Co., 267 N. Y. 427; Insurance Co. v. Park & Pollard Co., 190 App. Div. 388; 229 N. Y. 631; Kalnitzky v. Golden, 205 App. Div. 45; Joannes Bros. Co. v. Lamborn, 199 App. Div. 588; Seager v. Tholens, 182 App. Div. 317; Guilfoyle v. Pierce, 125 App. Div. 504; 196 N. Y. 499; Eltonhead v. Travelers Ins. Co., 177 App. Div. 170; Smith v. Nat. Benefit Society, 123 N. Y. 85; Zies v. New York Life Ins. Co., 237 App. Div. 367; Young v. Young, 80 N. Y. 422.) Plaintiff is in no better position than a volunteer. Even if relief were granted to alter the present status of the gift, plaintiff will be entitled to no relief. (Ely v. Megie, 219 N. Y. 112.) There is no relief of partial rescission. (Friedman v. Rickman, 213 App. Div. 467; 241 N. Y. 576; Slater v. Slater, 208 App. Div. 567; 240 N. Y. 557.) The courts prefer reformation to rescission. If relief is possible it should be reformation in favor of the third child and not rescission in favor of the plaintiff. (Bindseil v. Federal Union Surety Co., 130 App. Div. 775; Parker v. Allen, 14 N. Y. Supp. 265; Davy v. Davy, 98 App. Div. 630; Schelling v. Bischoff, 18 N. Y. Supp. 859; Matteson v. Jonnston, 139 App. Div. 859.)

      Sidney R. Fleisher as guardian ad litem for Edward Rosenblum et al., infants, respondents.
    No right of action rests in the plaintiff as ex-beneficiary under the policies. (Smith v. Nat. Benefit Society, 123 N. Y. 85; Thomas v. Thomas, 131 N. Y. 205; Raymond v. Supreme Lodge, 85 Misc. Rep. 141; Zies v. New York Life Ins. Co., 237 App. Div. 367; Schoenholz v. New York Life Ins. Co., 192 App. Div. 563; Union Trust Co. v. Boardman, 215 App. Div. 73; 246 N. Y. 627.) The appellant never had a property right. (Carpenter v. Knapp, 101 Iowa, 72; Mutual Benefit Life Ins. Co. v. Swett, 222 Fed. Rep. 200; Matter of Hogan, 194 Fed. Rep. 846; Matter of Hammer, 102 Misc. Rep. 193; Supreme Council v. Gehrenbeck, 124 Cal. 43; Ptacek v. Pisa, 231 Ill. 522; Slocum v. Northwestern Mut. Ins. Co., 135 Wis. 288; Mutual Relief v. Ray, 173 Ark. 9; Matter of White, 174 Fed. Rep. 333; Sabin v. Phinney, 134 N. Y. 423; Matter of Hammer, 101 Misc. Rep. 351; Eltonhead v. Travelers Ins. Co., 177 App. Div. 170; Barbour v. Equitable Life Assur. Society, 174 App. Div. 759; Cavagnaro v. Thompson, 78 Misc. Rep. 687; Matter of Samuels, 254 Fed. Rep. 775; Matter of Greenberg, 271 Fed. Rep. 258; Matter of Hogan, 194 Fed. Rep. 846; Reinhardt v. Reinhardt, 271 Ill. 287.) The appellant is a volunteer and is not a party or privy to the policies. (Tidd v. McIntyre, 116 App. Div. 602; Insurance Co. v. Park & Pollard Co., 190 App. Div. 388;
      Kalnitzky v. Golden, 205 App. Div. 45; Joannes Bros. v. Lamborn, 199 App. Div. 588; Young v. Young, 80 N. Y. 422.) The gift of the insurance proceeds must stand as made. (Young v. Young, 80 N. Y. 422; Union Trust Co. v. Boardman, 215 App. Div. 73; 246 N. Y. 627; Farmers Loan & Trust Co. v. Winthrop, 238 N. Y. 477.)
   O’Brien, J.

Plaintiff was named as beneficiary in

several policies of fife insurance issued to her husband by the Mutual Life Insurance Company. He reserved the •right to change the beneficiary and he did change from plaintiff to the Manufacturers Trust Company as trustee. After the husband’s death, which occurred in December, 1932, this action was begun by the widow for the purpose of canceling the instruments by which the change of beneficiary was effected and for the purpose of obtaining a judgment decreeing that she is entitled to payment of the proceeds of the policies. The complaint alleges that the change of beneficiary was made under a mistake of fact by the husband. The questions before us are whether plaintiff has such an interest as enables her to maintain the action and whether, as a pleading, the complaint is otherwise sufficient.

As long as plaintiff remained the named beneficiary in the policies, she was in possession of a property right in the subject-matter of this litigation. Her interest in the policies was not vested in the sense that her right could not be divested, but, until this right, subject as it was to defeasance, was taken from her with an intent based upon full comprehension of the consequences of the act, a property right of some description continued to reside in her. (Prudential Ins. Co. v. Stone, 270 N. Y. 154, decided herewith.) She is, therefore, more than a volunteer or a donee and upon proper allegations and substantial proof may maintain an action to cancel the instruments by which she alleges that she has been deprived of this property right.

The following allegations are set forth in the complaint: Plaintiff’s husband was the father of two children by a former marriage and, within a year subsequent to his marriage with plaintiff and prior to the birth of a child to him and her, he executed a trust indenture dated February 13, 1929, to the predecessor of defendant Manufacturers Trust Company. By this agreement he made several policies of life insurance, aggregating $31,000 and policies of accident insurance amounting to $14,000, payable to the trustee for the benefit of bis children “ in being at the time of the execution of this agreement ” and provided for setting over additional policies. Two children only, the defendants Edward and Dorothy, were then in being. Prior to August 7, 1930, the husband took out additional policies in the amount of $30,000 and made them payable to plaintiff. On August 7, 1930, a child, Helene Myra, was born to him and plaintiff. Shortly after the birth of this child, plaintiff’s husband substituted defendant trust company as beneficiary of the $30,000 policies in place of plaintiff. The complaint alleges that, in making this substitution, he acted under a misapprehension and mistake of fact, believing that the newly-born child, Helene Myra, was included in the benefits of the trust agreement pro rata with the two other children, Edward and Dorothy, and that he did not intend to remove and would not have removed plaintiff as beneficiary and substituted the trustee except under the misapprehension and mistake of fact that in so doing he was providing for the third child as fully as for the other children. The substance of the pleading is that, except for this mistake of fact, the intent to deprive plaintiff of her property right would not have existed and the attempted act of deprivation would not have occurred. The action is for cancellation of the change of beneficiary due to an alleged unilateral mistake of fact. It is not an action to reform the trust indenture.

The term mistake ” may be used to cover all kinds of mental error, however induced (3 Williston on the Law of Contracts, § 1540), and equity can interfere in a suit for cancellation or rescission to prevent the enforcement of an unjust agreement induced by a unilateral mistake of fact. A mistake not mutual but only on one side may be ground for rescinding but not for reforming a contract. (Smith v. Mackin, 4 Lans. 41, 44, 45; Moffett, Hodgkins & Clarke Co. v. Rochester, 178 U. S. 373.) If the erroneous transaction was such as to involve the act of the plaintiff only and the effect of the transaction would be the unjust enrichment of the defendant, the plaintiff is entitled to have the transaction rescinded, although he was the only parts'- mistaken. (Clark on Equity, § 372.) If the intent of plaintiff’s husband in changing the beneficiary was to place his three children on a plane of equality and if, through his misapprehension of fact concerning the terms of his trust agreement, he failed in his purpose, then defendants Edward and Dorothy were, by reason of such mistake of fact, unjustly enriched and their father would have been entitled to rescind his change of beneficiary and the wife, possessing a property right in the res, likewise may maintain this action. The allegations of the complaint are sufficient. Whether there is evidence of a quality necessary to support these allegations must be determined on the trial. The pleading is not defective. On this appeal we decide no other issue.

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

Crane, Ch. J., Hubbs, Crouch, Loughran and Finch, JJ., concur; Lehman, J., dissents.

Judgment accordingly.


author: Hubbs, J.

text:
    Hanover Fire Insurance Company, Respondent, v. Morse Dry Dock and Repair Company, Appellant. Globe and Rutgers Fire Insurance Company, Respondent, v. Morse Dry Dock and Repair Company, Appellant. Eagle Star & British Dominions Insurance Company, Ltd., Respondent, v. Morse Dry Dock and Repair Company, Appellant. Universal Insurance Company, Respondent, v. Morse Dry Dock and Repair Company, Appellant.
    (Argued January 20, 1936;
    decided March 3, 1936.)

      Joseph M. Proskauer, George S. Brengle and David Katz for appellant.
    The actions are barred by the six-year Statute of Limitations. (Higgins v. Crouse, 147 N. Y. 411; Bosley v. National Machine Co., 123 N. Y. 550; Slayback v. Raymond, 93 App. Div. 326; Sielcken-Schwarz v. American Factors, Ltd., 265 N. Y. 239; Piper v. Hoard, 107 N. Y. 67; Dyckman v. Dyckman, 230 App. Div. 288; Kilmer v. Hutton, 131 App. Div. 625; Coffin v. Barber, 115 App. Div. 713.) The ten-year Statute of Limitations is not applicable. (Pitcher v. Sutton, 238 App. Div. 291; Chorrmann v. Bachmann, 119 App. Div. 146; McKenzie v. Wappler Electric Co., 215 App. Div. 336; Finnegan v. McGuffog, 139 App. Div. 899; Hart v. Goadby, 72 Misc. Rep. 232; Lightfoot v. Davis, 198 N. Y. 261; Sebring v. Fidelity-Phenix Fire Ins. Co., 255 N. Y. 382; Burritt v. Insurance Co., 5 Hill, 188; Vaughan v. U. S. Title Guaranty & Indemnity Co., 137 App. Div. 623; Polachek v. N. Y. Life Ins. Co., 147 Misc. Rep. 16; Merchants & Shippers Ins. Co. v. St. Paul F. & M. Ins. Co., 219 App. Div. 636; Equitable Life Assur. Society v. McElroy, 83 Fed. Rep. 631; Cowee v. Cornell, 75 N. Y. 91; Forker v. Brown, 10 Misc. Rep. 161; Matter of Kopytkiewicz, 156 Misc. Rep. 297; Tyler v. Savage, 143 U. S. 79.)

      Samuel Seabury and Forrest E. Single for respondents.
    The case is not governed by the six-year Statute of Limitations. Although fraud is alleged, the0 gravamen of the action is not fraud, but defendant’s failure to disclose facts which it was under a duty to disclose, and the failure to disclose which would vitiate the policies even though there was no intent to defraud. Such an action is governed by the ten-year Statute of Limitations. (Seligson v. Weiss, 222 App. Div. 634; Dodds v. McColgan, 229 App. Div. 273; Small v. Sullivan, 218 App. Div. 612; 245 N. Y. 343; Clarke v. Gilmore, 149 App. Div. 445; Ford v. Clendenin, 215 N. Y. 10; Gilmore v. Ham, 142 N. Y. 1; McKenzie v. Wappler Electric Co., 215 App. Div. 336; Pitcher v. Sutton, 238 App. Div. 291; 264 N. Y. 638; Grover v. National Bank of Commerce, 156 App. Div. 247; Carr v. Thompson, 87 N. Y. 160; M’Lanahan v. Universal Ins. Co., 26 U. S. 170; Cox v. Blake Co., 100 Misc. Rep. 135; Btesh v. Royal Ins. Co., Ltd., 49 Fed. Rep. [2d] 720; Stipcich v. Metropolitan Life Ins. Co., 277 U. S. 311; Hare & Chase, Inc., v. National Surety Co., 60 Fed. Rep. [2d] 909; Springfield F. & M. Ins. Co. v. National F. Ins. Co., 51 Fed. Rep. [2d] 714; Henshaw v. Ins. Co.,
      36 Misc. Rep. 405; Downs v. Georgia Casualty Co., 271 Fed. Rep. 310; Pendergast v. Globe & Rutgers F. Ins. Co., 246 N. Y. 396.)
   Hubbs, J.

These four actions were brought for the reformation of policies of property liability insurance upon the ground that they were obtained by the fraudulent concealment of the fact that a loss had occurred prior to the delivery of the policies or the consummation of the contracts.

The trial court found in favor of the plaintiff in each action and the Appellate Division has affirmed.

The primary question for determination here is whether the causes of action were barred by the Statute of Limitations. Appellant contends that the six-year Statute of Limitations applies (Civ. Prac. Act, § 48), and as more than six years had expired after the causes of action had accrued before these actions were commenced that they are barred by the statute. We believe that appellant is mistaken in such contention and that the ten-year Statute of Limitations is applicable. (Civ. Prac. Act, § 53.)

Concededly, the actions were commenced within ten years after the causes of action accrued. In actions in equity the general rule is that section 53 of the Civil Practice Act applies, and that a plaintiff has ten years after accrual of the cause within which to commence his action. (Gilmore v. Ham, 142 N. Y. 1; Treadwell v. Clark, 190 N. Y. 51.)

In an action in equity the ten-year limitation prescribed by section 53 of the Civil Practice Act is applicable unless, in a particular action, a party has a choice of two remedies, one at law, the other in equity, both complete and adequate, and he selects the action in equity. In that event the party whose cause of action would be barred under the six-year statute, if he should elect to proceed at law, may not enlarge this time by electing to proceed in equity. Such is the rule where the remedies are concurrent. (Bundle v. Allison, 34 N. Y. 180; Keys v. Leopold, 241 N. Y. 189; Clarke v. Boorman’s Executors, 85 U. S. 493.)

The exception is not applicable in cases of concurrent jurisdiction, however, if a party’s remedy at law is inadequate and imperfect and he is required to go into equity to procure complete and adequate relief. (Rundle v. Allison, supra; Mann v. Fairchild, 14 Barb. 548.)

If relief may be had at law in an action for damages and in equity for rescission of a contract on the ground of fraud with a reconveyance of land and an accounting for profits, the action in equity is subject to the ten-year limitation though the action for damages is barred under the six-year statute. (Schenck v. State Line Telephone Co., 238 N. Y. 308.)

The true test as to applicability of the ten-year statute to an action in equity when a party also has a cause of action at law, seems to be whether the complaint states facts upon which a complete recovery might be had in a law action. If such be the case, the six-year statute applies. Otherwise, the applicable limitation is to be found in the ten-year statute. (Keys v. Leopold, supra.)

The applicability of the six-year statute to this case depends, therefore, upon whether respondents, under the facts stated in the complaints, had an adequate remedy at law. The actions were brought in equity and appellant has at no time raised the question of the jurisdiction of the equity court. It is appellant’s contention that there was concurrent jurisdiction in law and in equity for the reason that the respondents, if sued on the policies, might have set up the defense of fraud which, under the findings in these cases, would have constituted a perfect defense in actions on the policies. In effect, its argument is that- the availability of the defense of fraud in actions on the policies is equivalent to a right to maintain an action at law. We are referred to no decision which holds the ten-year statute inapplicable because the plaintiff, having an action in equity, has also a defense in an action against it, and we see no reason for extending the limitation placed upon the applicability of the ten-year statute by the adoption of such a rule. The applicability of the statute must be determined by the adequacy of affirmative relief available to a party.

Here the respondents were under contract to protect the appellant against liability for damages and costs resulting from losses occurring prior to the actual meeting of the minds of the parties upon the form of coverage to be provided. While it is true that the defense of fraud would have been available to the respondents in actions brought on the policies, still they had the right to maintain actions in equity to reform the policies. They had no cause of action at law to recover damages for fraud, since they had suffered no damage and it is not suggested that they had the right to take other affirmative action at law. We hold the right to interpose the defense of fraud in actions on the policies is not the equivalent of a right to proceed at law, that the ten-year statute is applicable and, such period not having elapsed since the discovery of the fraud, that this action was timely brought.

Even if it were to be held that the availability of the defense of fraud in actions on the policies is the equivalent of a right to affirmative relief at law, there would have to be adequacy of such relief to bring the present actions within the hmitation of the six-year statute. Before respondents could avail themselves of such relief, there would be the necessity of action on the part of the appellant to recover on the policies. Despite discovery of the fraud, respondents, having no affirmative action at law, pending action by the appellant on the policies, would remain contingently hable to the extent of $275,000, for which sum they would be required to maintain an adequate reserve, with the possibility of loss of testimony of witnesses, a multiplicity of suits, loss of documents and other detriments which might increase respondents’ costs and endanger their ability to prove the fraud. If it be contended that there is lack of proof with respect to the existence of such elements, making relief at law inadequate, the answer to the contention may be found in the fact that no issue was presented with respect to the adequacy of relief at law since appellant has not questioned the jurisdiction of equity. If that question had been raised, it may be that respondents could have established facts which would have clearly disclosed the necessity of bringing the actions in equity in order to obtain adequate relief. The question, not having been raised at the trial, cannot be considered in this court.

A reversal of the judgments here would be of little practical value to the appellant in so far as its claims against the respondents are concerned, for the reason that in actions to recover upon the policies, the respondents would not be barred from interposing the defense of fraud. The rule is well established that the Statute of Limitations cannot be interposed as against fraud when set up as a pure defense. As said in Bartlett v. Judd (21 N. Y. 200, 205): This case does not come within the letter of the statute, which applies to bills filed by a plaintiff for specific relief and not to a defendant resisting an unrighteous claim by an equitable defense.” (See, also, People v. Faxon, 111 Misc. Rep. 699; Maders v. Lawrence, 49 Hun, 360; 37 C. J. 794 and 803, and cases cited.)

We have considered the other questions argued by appellant but find no reversible error therein.

In each case the judgment appealed from, should be affirmed, with costs.

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

Judgments affirmed.


text:
    Ben S. Gross, Appellant, v. Eddie Cantor, Defendant, and Radio Guide, Inc., et al., Respondents.
    (Argued January 14, 1936;
    decided March 3, 1936.)

      Benjamin C. Ribman for appellant.
    It cannot be said, as a matter of law, that the language of the article was employed in criticism of a class as a class, and it had no personal application or significance. The court should have held that plaintiff was entitled to have a jury pass on the question as to whether the article applied to him.
      (Weston v. Commercial Advertiser Assn., 184 N. Y. 479; Ryckman v. Delevan, 25 Wend. 186; Bornmann v. Star Co., 174 N. Y. 212; Van Ingen v. Mail & Express Pub. Co., 156 N. Y. 376; Core v. Sun Printing & Pub. Assn., 177 N. Y. 131; Louisville Times Co. v. Stivers, 66 S. W. Rep. [2d] 411; Louisville Times Co. v. Emrich, 66 S. W. Rep. [2d] 73; Constitution Publishing Co. v. Leathers, 172 S. E. Rep. 923.)

      Thomas E. McEntegart for respondents.
    ■The complaint does not state facts sufficient to constitute a cause of action. (Eastwook v. Holmes, IF. & F. 349; Lynch v. Kirby, 74 Misc. Rep. 266; Rychman v. Delevan, 25 Wend. 186; Weston v. Commercial Advertiser Assn., 184 N. Y. 479; Kloor v. AYw Yor/c Herald Co., 200 App. Div. 90.)
   Loughran, J.

The question presented by this appeal is whether the complaint is sufficient as the statement of a cause of action for a libel upon the individual plaintiff. He alleges that the moving defendants printed and circulated in a magazine called Radio Guide the following article:

Cantor Bares Feud of Critics.

“ Eddie Cantor, hailed by many admirers as America’s foremost comedian, has a pet feud. It involves all save one of the radio editors in New York City. Eddie carefully excludes this editor as being the only radio critic entitled to his job. Interest in the feud is intensified by the fact that Cantor does not name the man he excepts.

At all the other radio editors and columnists of New York, the comedian hurls his lancé of vitriolic criticism. It is a gesture of fearlessness. Few leaders in the entertainment world have the courage to attack the critics and the editors of the metropolis.

Cantor has enlisted the aid of Radio Guide in presenting the facts of the feud to the public. He is eager to make especially clear his friendliness for all the radio editors outside New York.

The story is told in a telegram sent by Cantor to Radio Guide. The telegram follows:

1 Editor, Radio Guide: En route to California from New York several newspaper friends have asked me about the feud between the radio editors and myself.

“ ' I have always had the friendliest relationship with the radio editors outside New York City. They have criticized my work but theirs was honest criticism with nothing personal behind it. I have a great respect for their sincerity and judgment.

“ ‘ However, I shall continue to fight those New York radio editors who are experts at log rolling, who use their columns for delving into personalities that have nothing to do with radio and whose various rackets are a disgrace to the newspaper profession.

“ ‘ There is but one person writing on radio in New York City who has the necessary background, dignity and honesty of purpose.

“ ‘ Would appreciate your printing this in Radio Guide where it may be seen by radio editors throughout the country. Best wishes.

“ ‘ EDDIE CANTOR.’ ”

By way of inducement and colloquia, the pleader states these extrinsic facts: There is a class of newspaper writers known as radio editors who review radio performances and programs; the leading newspapers in the city of New York employ about twelve radio editors; in the public mind this group includes the plaintiff; prior to the publication, the defendant Cantor had publicly specified the “ one person ” to whom he referred; the plaintiff is not that person; knowing all this, the moving defendants aimed the article especially at the plaintiff and its defamatory content was commonly understood as an imputation against him personally. An innuendo follows, pointing to the plaintiff as a particular person to whom the words in fact related.

We think the allegations are enough to raise the issue whether the plaintiff individually was held up to contempt personal to him.

An action for defamation lies only in case the defendant has published the matter of and concerning the plaintiff.” (Corrigan v. Bobbs-Merrill Co., 228 N. Y. 58, 64.) Consequently an impersonal reproach of an indeterminate class is not actionable. (Eastwood v. Holmes, 1 F. & F. 347.) But if the words may by any reasonable application, import a charge against several individuals, under some general description or general name, the plaintiff has the right to go on to trial, and it is for the jury to decide, whether the charge has the personal application averred by the plaintiff.” (Ryckman v. Delavan, 25 Wend. 186, 202. So, Weston v. Cormmercial Advertiser Assn., 184 N. Y. 479; International Text-Book Co. v. Leader Printing Co., 189 Fed. Rep. 86; Wakley v. Healey, 7 C. B. 591. Cf. LeFanu v. Malcomson, 1 H. L. Cas. 637.)

We cannot go beyond the face of this complaint. It does not there appear that the publication was so scattered a generality or described so large a class as such that no one could have been personally injured by it. Perhaps the plaintiff will be able to satisfy a jury of the reality of his position that the article was directed at him as an individual and did hot miss the mark.

Since the plaintiff did not plead a colloquium in the form authorized by rule 96 of the Rules of Civil Practice, we are not called on to decide whether such a general allegation would here have been sufficient.

The judgments should be reversed, with costs in all courts, and the motion to dismiss the complaint denied.

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

Judgments reversed, etc.


text:
    In the Matter of Francis J. Neddo et al., Appellants, against Henry Schrade, Jr., et al., Constituting the City Council of the City of Saratoga Springs, Respondents. Musa Q. Jackson, Intervener-Respondent.
    (Argued January 9, 1936;
    decided March 3, 1936.)

      Walter A. Fullerton, James A. Leary, Francis J. Neddo and George O. Tuck for appellants.
    The city council was without jurisdiction. (City of Pawhuska v. Pawhuska Oil & Gas Co., 250 U. S. 394; Hunter v. Pittsburgh, 207 U. S. 161; Matter of McAneny v. Board of Estimate, 232 N. Y. 377; City of Utica v. Hanna, 202 App. Div. 610; Geisler v. Mitchell, 137 Misc. Rep. 462; Matter of Barker v. Switzer, 209 App. Div. 151; Matter of Melita v. Nolan, 126 Misc. Rep. 345; City of Glens Falls v. Standard Oil Co., 127 Misc. Rep. 104; City of Syracuse v. Snow, 123 Misc. Rep. 568.) Appellants have a remedy by order of certiorari. (DeSantis v. Luger, 257 N. Y. 476; Litchfield Const. Co. v. City of New York, 244 N. Y. 251; Ward v. Iroquois Gas Corp., 258 N. Y. 124; Axelrad v. 77 Park Ave. Corp., 225 App. Div. 557; Rung v. Graf & Johnson, Inc., 235 App. Div. 759; Dudar v. Milef Realty Corp., 258 N. Y. 415; Hynes v. N. Y. C. R. R. Co., 231 N. Y. 229; Matter of Meyer, 209 N. Y. 386; Gwynne v. Board of Education, 259 N. Y. 191; Matter of Leone v. Brewer, 259 N. Y. 386; Walsh v. N. Y. C. & H. R. R. R. Co., 204 N. Y. 58; Martin v. Herzog, 228 N. Y. 164; People ex rel. Stewart v. Railroad Comrs., 160 N. Y. 202; Matter of Syracuse, B. & N. Y. R. R. Co. v. Van Amburgh, 223 App. Div. 485; 251 N. Y. 548; Matter of Levy v. Board of Standards & Appeals, 267 N. Y. 347; Pittsburgh Westmoreland Coal Co. v. Kerr, 220 N. Y. 137; Central Trust Co. v. Pittsburgh, S. & N. R. R. Co., 229 N. Y. 68; Matter of Barkley, 42 App. Div. 597; Matter of Bar Association of City of New York, 222 App. Div. 580; Kujek v. Goldman, 150 N. Y. 176.)

      Ellis J. Staley, David W. Burke, William E. Bennett, Richard J. Sherman and George N. Ostrander for respondents.
    The action of the city council in adopting the ordinance changing the intervener-respondent’s property from one zone to another was purely legislative in character and not subject to review by common law certiorari order. (Village of Jamaica v. Board of Supervisors, 131 N. Y. 468; Matter of Long Island R. R. Co. v. Dylan, 240 N. Y. 199; People ex rel. Copcutt v. Board of Health, 140 N. Y. 1; People ex rel. Desidero v. Conolly, 238 N. Y. 326; People ex rel. Lodes v. Dept, of Health, 189 N. Y. 187; People ex rel. Hayes v. Waldo, 212 N. Y. 156; People ex rel. O’Connor v. Supervisors, 14 App. Div. 608; 153 N. Y. 370; Matter of Santa Clara Lumber Co. v. Commissioners of Land Office, 209 App. Div. 705; People ex rel. Corwin v. Walter, 68 N. Y. 403; Matter of Standard Bitulithic Co., 212 N. Y. 179; Matter of Carp, 179 App. Div. 387; 221 N. Y. 643.)
   Finch, J.

This is an appeal from an order of the

Appellate Division unanimously confirming the action of the City Council of the city of Saratoga Springs in granting the petition of the intervener respondent to transfer property belonging to her from a partially restricted zone to one unrestricted so that a gasoline service station might be installed.

The intervener respondent formerly occupied a large dwelling in a residential district. In the course of time this district changed from residential to commercial, consisting primarily of boarding houses and hotels, leaving this residence the last to succumb. Across the street and directly opposite, one of the objectors is said to be operating a public auction sales and antique business in defiance of the zoning ordinance. Four gasoline stations exist within half a mile, one on the same block as the property of the intervener. The petitioners on the other hand mge that since the building development in this district consists largely of hotels and residences remodeled into boarding houses, the noise and odors arising from the operation of the gasoline filling station would be a source of great annoyance to the persons residing in or occupying these buildings. The accuracy of the picture thus presented, however, is of little importance since the decision turns upon another point.

Upon the presentation of the petition by the intervener respondent the City Council duly resolved to receive, file and refer it for advertising in a newspaper published in the city of Saratoga Springs, thereby setting a time and place for a public hearing.

Following several hearings and the submission of protests of nearby property owners, the petition was granted at a meeting of the City Council at which all members were present, and all but one of them voted in the affirmative.

Following the rezoning the petitioners apparently sought a statutory writ of certiorari provided for in section 82 of the General City Law (Cons. Laws, ch. 21) to review a decision of a Board of Appeals. No" Board of Appeals having been established in the city of Saratoga Springs this writ was dismissed by stipulation of counsel and the present common law writ substituted.

Proceedings following the granting of the application of the certiorari order led to a decision by the Appellate Division confirming the action of the City Council as “ section 83 of the General City Law empowered the Council to make the change if reasonable grounds therefor were shown.” (245 App. Div. 794.) The Appellate Division thus affirmed impliedly upon the ground that the action of the Council was neither unreasonable nor arbitrary.

Under the General City Law the Legislature has duly granted, to the cities of which the city of Saratoga Springs is one, certain specific powers, among which is that “To regulate and restrict the location of trades and industries and the location of buildings, designed for specified uses, and for said purposes to divide the city into districts and to prescribe for each such district the trades and industries that shall be excluded or subjected to special regulation and the uses for which buildings may not be erected or altered. * * *” (General City Law, § 20, subd. 25.)

Pursuant to the foregoing grant of power it is conceded that the function of the City Council in enacting the zoning ordinance was that of a legislative body. The ordinance is set forth in full in the record and shows numerous exceptions of small pieces of property lying in the zone, one so small as to consist of a portion of a lot. Both this ordinance and the General City Law expressly provide for power remaining in the City Council to amend, alter and change the district fines. Whether this power may be exercised by the Council upon its own motion or must be by the petition of a certain number of property owners is not so clear in the ordinance. (Ordinance, § 6.) But a reading of section 83 of the General City Law shows without doubt that the Council may upon its own motion exercise this power of amendment, alteration and change in zoning fines. “ The [city] common council may from time to time on its own motion * * * amend, supplement or change the regulations and districts established under any ordinance adopted pursuant to paragraphs twenty-four and twenty-five of section twenty of this chapter. * * * ”

If a Board of Appeals had been set up by the Mayor and a variation obtained upon application to such Board the action of the Board would have been reviewable by a writ of certiorari provided for in the statute. The plaintiffs, therefore, argue that when the City Council acts for the purpose of amending, altering or changing the fines of the zones it must exercise the same function as would a Board of Appeals and the statute providing for certiorari to review the action of the Board of Appeals must be likewise applicable to the Council. No such result follows. It is true that the Mayor could have set up a Board of Appeals in accordance with the General City Law (§ 81). This Board would have had certain limited powers and its action would have been reviewable in the courts by a writ of certiorari as expressly provided in the General City Law (§ 82). The setting up of a Board of Appeals and the exercise by it of its limited statutory authority, however, does not detract from the legislative power remaining in the City Council to amend, alter or change the lines of the zones. When application is made to this latter power we find an instance where the City Council grants relief through legislative power reserved to it, even though a Board of Appeals may be functioning with concurrent power pursuant to a grant to the Board of statutory power. If a Board of Appeals is set up and application made to it for a variation such Board “ * * * shall fix a reasonable time for the hearing of the appeal and give due notice thereof to the parties, and decide the same within reasonable time. * * * Where there are practical difficulties or unnecessary hardship in the way of carrying out the strict letter of any such ordinance, the board of appeals shall have the power in passing upon appeals, to vary or modify the application of any of the regulations or provisions of such ordinance relating to the use, construction, structural changes in, equipment or alteration of buildings or structures, or the use of land, so that the spirit of the ordinance shall be observed, public safety and welfare secured and substantial justice done.” (§ 81, subd. 4.)

In the case at bar no Board of Appeals was available and the intervener respondent, therefore, applied to the City Council. Hearings were had as upon any other legislative measure. Following this the City Council voted an amendment of the zoning ordinance. Thus there was not a judgment upon the weight of the evidence but the enactment of a legislative measure.

A common law writ of certiorari may not be availed of to review a legislative function. (People ex rel. Trustees Vil. of Jamaica v. Board of Supervisors, 131 N. Y. 468; Matter of Long Island R. R. Co. v. Hylan, 240 N. Y. 199.) The common law writ of certiorari may only be availed of to review the judicial or quasi-judicial actions of inferior courts or public officers or bodies. (People ex rel. Trustees Vil. of Jamaica v. Board of Supervisors, supra.) The fact, however, that a public officer or body exercises judgment and discretion in the performance of his duties does not make his acts judicial. (People ex rel. Second Avenue R. R. Co. v. Board of Commissioners, 97 N. Y. 37.)

The action of the City Council in enacting the ordinance changing the property of the intervener respondent from one zone to another was purely legislative in character and not subject to review by common law certiorari. Proper procedure requires a modification of the order of the Appellate Division. Instead of confirming the action of the City Council the Appellate Division should have reversed the order of the Special Term granting the application for a certiorari order, and dismissed the proceeding.

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

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

Ordered accordingly.