text:
    In the Matter of the Assignment for the Benefit of Creditors of Brown Bomber Baking Co., Inc., to Raymond T. Fiske, Jr., Appellant. Modern Industrial Bank, Respondent.
    Argued May 16, 1944;
    decided June 14, 1944.

      N. William Welling and M. John Silver for appellant.
    I. Section 17 of the Debtor and Creditor Law invalidated the non-complying mortgage as to the statutory assignee. (Sheldon v. Wickham, 161 N. Y. 500; Stich v. Pirkl, 100 Misc. 594; In Re Adler, 43 N. Y. S. 2d 357; In Re Parkway Knitting Mills, 36 F. Supp. 299, 119 F. 2d 605; Elstelnat Holding Corp. v. Palmer, 314 U. S. 646.) II. The decision below nullifies section 17 of the Debtor and Creditor Law. (Crosby v. Hillyer, 24 Wend. 280; Matter of Kogan, 141 Misc. 412; Stich v. Pirkl, 100 Misc. 594; Baldwin v. Standard Accident Ins. Co., 144 Misc. 53, 237 App. Div. 334, 262 N. Y. 575.) III. The assignee is armed with legal process authorizing seizure of the property. (Sanford v. Boland, 287 N. Y. 431; Besuden v. Besuden, 57 Ohio St. 508; Paddell v. Janes, 84 Misc. 212; Matter of Feldman & Co., Inc., 237 App. Div. 720; Skilton v. Codington, 185 N. Y. 80.)

      Maxwell Wyckoff and George L. Livingston for respondent.
    I. An unrefiled chattel mortgage is valid as to all the world until attacked by a creditor standing upon an attachment or judgment. (Sanford v. Boland, 287 N. Y. 431; Button v. Rathbone, Sard & Co., 126 N. Y. 187; Stephens v. Meriden Britannia Co., 160 N. Y. 178; Sheldon v. Wickham, 161 N. Y. 500; In re New York Economical Printing Co., 110 F. 514; In re Burnham, 140 F. 926; Collins Case, 12 Blatchf. 548.) II. Under section 17 of the Debtor and Creditor Law, the assignee has no greater rights than the creditors, and as there were no judgment creditors of the mortgagor, the delay of two days in refiling the chattel mortgage did not invalidate it. (Paddell v. Janes, 84 Misc. 212; In the Matter of Lewis, 81 N. Y. 421; Matter of

      Pellegrini, 248 App. Div. 526; In re Lloyd-Stuart Co., Inc., 11 N. Y. S. 2d 222.)
   Lehman, Ch. J.

To secure the payment of a loan in the sum of $9,990, Brown Bomber Baking Co., Inc., executed and delivered a chattel mortgage to Modern Industrial Bank on May 2, 1942. The mortgage was filed on May 5, 1942, in the office of the Register of Bronx County. The Lien Law, section 235, then provided that a chattel mortgage * * * shall be invalid as against creditors of the mortgagor, and against subsequent purchasers or mortgagees in good faith, after the expiration of the first or any succeeding term of one year, reckoning from the time of the first filing, unless, 1. Within thirty days next preceding the expiration of each such term, a statement containing a description of such mortgage ” and other prescribed information “ or 2. A copy of such mortgage and its indorsements together with a statement attached thereto or indorsed thereon ” containing prescribed information “ is filed in the proper office * * A renewal of the chattel mortgage was filed in the office of the Register of Bronx County on May 7, 1943, two days after the expiration of the term of one year “ reckoning from the time of the first filing ”. At that .time the chattel mortgage, it is not disputed, had become invalid “ against creditors of the mortgagor ”.

On July 12, 1943, Brown Bomber Baking Co., Inc., made an assignment for the benefit of creditors. The chattels covered by the chattel mortgage were in the possession of the assignor. The assignee sold the chattels and holds the proceeds of the sale. The balance due on the loan, secured by the chattel mortgage, is $5,661. The proceeds of the sale of the mortgaged chattels exceed that amount, and the mortgagee has demanded that the unpaid balance of the loan shall be paid out of such proceeds. The assignee has refused the demand and by permission of this court has appealed from an order directing him to pay the claim of the mortgagee out of the proceeds of the sale of the mortgaged chattels.

Though the statute expressly declares that a mortgage which is not filed as provided in the statute is invalid as against “ creditors ” of the mortgagor, this court held, in the light of old analogies, that “ a mere creditor at large, without some process for the collection or enforcement of his debt, is not in a position to question an unfiled mortgage given by his debtor which is otherwise valid.” (Button v. Rathbone, Sard & Co., 126 N. Y. 187.) In the case we are now reviewing, there were no judgment creditors armed with legal process authorizing seizure of property, either at the time when the mortgage became invalid or at the time when the debtor made an assignment for the benefit of creditors. Since the mortgage was valid as against the mortgagor, if the mortgagor had delivered the chattels to the mortgagee before the mortgagor made an assignment, the assignee could not have claimed the chattels or their proceeds. (Stephens v. Perrine et at., 143 N. Y. 476; Stephens v. Meriden Britannia Co., 160 N. Y. 178; Sheldon v. Wickham, 161 N. Y. 500.) That would be true also in some circumstances where the title of the mortgagor is divested by a judgment of a competent court and a trustee in bankruptcy of the mortgagor, thereafter appointed, seeks to recover the proceeds from the mortgagee. (Sanford v. Boland, 290 N. Y. 712.)

The situation here presented is quite different. Here the mortgagee is claiming a lien upon chattels forming part of the estate of the mortgagor which the mortgagor assigned for the benefit of creditors. The title acquired by an assignee is ordinarily subject to all the infirmities in the title of his assignor. The Legislature may, however, provide in proper case that a lien enforcible against property in the possession of the person creating the lien shall not be enforcible against the same property when assigned by him for the benefit of creditors. The Legislature has done just that in section 17 of the Debtor and Creditor Law, which provides that: “ Claims which for want of record or for other reasons would not have been valid as against the claims of creditors of the assignor shall not be liens against his estate ” (L. 1914, ch. 360).

Until that statute was enacted, a mortgage which had not been refiled pursuant to that statute would have remained a valid lien against the property of the mortgagor even after title to the mortgaged property passed to an assignee for the benefit of creditors, or to a receiver in proceedings supplementary to execution. (Stephens v. Meriden Britannia Co., supra; Sheldon v. Wickham, supra.) The statute makes applicable in the administration of the estate of an insolvent debtor the rule which Congress had made applicable in the administration of the estate of a bankrupt. (See Skilton v. Codington, 185 N. Y. 80; In Re Parkway Knitting Mills, 36 F. Supp. 299, affd. 119 F. 2d 605, certiorari denied, 314 U. S. 646.)

The orders should be reversed, with costs in all courts, and the petition dismissed. (See 293 N. Y. 751.)

Loughran, Lewis, Conway, Desmond and Thaoher, JJ., concur ; Rippey, J., taking no part.

Orders reversed, etc.


source: Caselaw Access Project

author: Conway, J.

license: Public Domain

text:
    William V. Elliott, Public Administrator of Kings County, as Administrator of the Estate of Thomas Quinn, Deceased, Appellant, v. New York Rapid Transit Corporation, Respondent.
    Argued May 17, 1944;
    decided June 14, 1944.

      Edward Friedman for appellant.
    I. The proof established plaintiff’s cause of action both as to operational negligence of defendant as á common carrier and under the doctrine of last clear chance. (Fardette v. New York & Stamford R. Co., 190 App. Div. 545; Fagan v. Atlantic Coast Line R. R. Co., 220 N. Y. 301.) II. Under the last-clear-chance doctrine the defendant’s negligence proximately caused the death of the deceased. (Rider v. Syracuse R. T. Ry. Co., 171 N. Y. 139; Storr v. New York Central R. R. Co., 261 N. Y. 347.) III. The defendant owed the deceased a special duty to protect him from injury, because of his known intoxicated condition. A jury could reasonably infer that his death was caused by failure to perform this duty. (Fagan v. Atlantic Cost Line R. R. Co., 220 N. Y. 301; O’Hanlon v. Murray, 285 N. Y. 321; People v. Harris, 136 N. Y. 423; Dillon v. Rockaway Beach Hospital, 284 N. Y. 176.)

      Ignatius M. Wilkinson, Corporation Counsel (Joseph F. Mulqueen, Jr., and James Hall Prothero of counsel), for respondent.
    Plaintiff failed to make out a case under the doctrine of the last clear chance. Since the conductor stated that the train was moving when plaintiff’s intestate jumped on and that he immediately employed every means to stop the train — both statements being uncontradicted — there was no issue to place before a jury and the complaint was properly dismissed.' (Woloszynowski v. N. Y. C. R. R. Co., 254 N. Y. 206; Panarese v. Union Railway Co., 261 N. Y. 233; Storr v. New York Central R. R. Co., 261 N. Y. 348; Hernandez v. Brooklyn & Queens Transit Corp., 284 N. Y. 535; Dauphinee v. New York Rapid Transit Corp., 290 N. Y. 683; Albrecht v. Rochester, S. & E. R. R. Co., 205 N. Y. 230.)
   Conway, J.

The deceased met his death at about 7:00 o’clock in the evening on a night in July by falling from a south-bound elevated railroad train at a point beyond the Third Street station on the Fifth Avenue-Culver line in Brooklyn. At the time of his death he was forty-seven years of age and was employed in the repair shop of the Interborough Rapid Transit Company. He had been employed there for five years and prior to that had been employed by a public utility company. When his body was taken to the morgue it was found by the toxicologist to the Chief Medical Examiner of New York City, upon autopsy, that his skull had been fractured and that there had been at the time of death 52% of alcohol in his liver, a condition which causes one so found to be designated as a four-plus alcoholic casé. The toxicologist testified that the majority of four-plus cases are so intoxicated as to render them hardly capable of walking. One such has almost complete loss of equilibrium. When one has 52% of alcohol in the liver there is about the same quantity in the brain. That quantity of alcohol in the brain depresses all the brain centers and causes a general anesthetization. Such' a quantity causes some to lie in coma. The doctor further said that a smaller quantity of alcohol will produce a four-plus alcoholic state in a light drinker more quickly than in a heavy drinker because the heavy drinker, through habit, is able to oxidize or burn up the alcohol more rapidly.

We have purposefully called attention to the station at which the deceased met his death (which was one station beyond the station nearest to his home on Carroll Street, where he lived in the home of the sexton of a church), the time of the occurrence (which was a time when the deceased might well have been returning home from his work in the repair shop) and his helpless condition (which would indicate the degree of duty which the defendant imposed upon itself when it elected to carry the deceased).

The deceased boarded the elevated railroad train at what was known as the Adams Street station. The running time between the Adams Street station and the Third Street station was fourteen minutes. To reach the Adams Street station one had to climb the stairs and pay his fare in the station office. At that station the conductor of the train on which the deceased rode, whose business it was to take care of the two end platforms of the first and second cars of the train, saw the deceased staggering to the train. The gates operated by that conductor, Dingle, were four and one-half feet high and were of the type which were manually operated and swung inward so that when fully opened they rested at right angles to the position in which they had been when, closed. Deceased was the last to enter the second car. He staggered into it and sat down. In the fourteen minute run, Dingle observed him three times for about a minute each time. When the Third Street station was reached the train was stopped in such position that the rear end of the first car was eighteen feet north of the nearest wall of the station office. In that wall were two doors which admitted one to the office or waiting room and thus to the stairs which led down to the street. The length of the car was forty-eight feet and thus the car extended beyond the wall of the station office, to which reference has been made, for thirty feet. There was a cat-walk below the rails and the station office which extended some distance southerly beyond the office.

When the' train stopped, the conductor, Dingle, waited, for the deceased to stagger out of the car and held the gate of the second car open for him to leave. The deceased stopped to express his appreciation, assured Dingle that he' was a gentleman and attempted to shake hands with him. This Dingle was reluctant to do. He told deceased to step away from the train. Dingle shut the gate and gave the signal to the motorman to go ahead. The train had barely moved — Dingle estimated that it had moved one foot — when the deceased took hold, at a height of about six feet, three inches, of two uprights, referred to as stanchions, which extended from the platform to the roofs of the first and second cars respectively. He was carried, with his feet “ dangling ” (Dingle’s expressive word) the eighteen feet to the wall of the station office, the thirty feet from there to the south end of the station ánd another five feet further to the south, a total of fifty-three feet, before he lost his hold upon the uprights, fell to the cat-walk and thence to the street. The train proceeded eighty feet from the time it began to move until it was brought to an emergency stop by Dingle. It moved, therefore, approximately seventy-nine feet after the deceased took hold of the uprights. On the rear platform of the first car and on the forward platform of the second car there were pull-cords attached to the emergency brake. Dingle had but to reach for either one after taking one step. The motorman testified that it could be pulled “ immediately ”. It was Dingle’s testimony and that of the motorman that a pull upon the emergency brake cord would bring the train to a stop in from twenty to twenty-five feet. The emergency brake was operated without any relation to the motorman. In other words, a pull'upon the brake cord took control of the train from the motorman.

On that testimony a prima facie case was established which entitled the plaintiff administrator to go. to the jury either upon the theory that the defendant had failed in its duty of care to the deceased after it took him as a passenger in his then evident condition or under the doctrine-of the last clear chance. As to the former, the administrator made out a prima facie case when he established that the defendant took a helpless drunken individual upon its train for hire and caused bim to be dropped from one of its elevated cars at a point beyond a station used by passengers for entering and alighting from trains and thereby caused its passenger’s death. The explanation for that conduct was for the defendant but the complaint was dismissed at the close of plaintiff’s case. What the administrator was able to prove came from an examination before trial of the conductor and from the testimony of the motorman who was called by the administrator. The conductor, Dingle, was not put upon the witness stand by the defendant to make explanation.

The administrator was also entitled to go to the jury on the facts related above under the doctrine of the last clear chance and the jury could have found that Dingle did not exercisé due care when he failed to pull the emergency brake cord while the train moved fifty-three feet during which the deceased was immediately before him in a position of peril. In his examination before trial Dingle testified that after the deceased left the train the latter walked eighteen feet or more into the station waiting room and then retraced his steps more rapidly to the platform of the train on which Dingle stood, all in the twTenty-five to forty seconds that the motorman said the train remained at the station, and then seized the uprights after the train had moved about one foot. If the jury believed the testimony of the toxicologist as to the condition of the deceased on autopsy, the jury might well have found that that testimony of Dingle was incredible. The jury might rather have found that the deceased had mistaken his station, had gone one station too far, discovered his error when he stepped off the train, attempted to re-board it, thereby putting himself in the position of peril, and that Dingle instead of immediately pulling the emergency cord, endeavored to loosen the hold of the deceased on the uprights, or did nothing, and only , pulled the emergency cord when it was too late. At any rate, what occurred after Dingle saw the deceased in peril and whether or ndt there was then negligence on the part of the defendant were questions for the jury.

The doctrine of “ the last clear chance ” is predicated upon the fact that knowledge of the peril as an actual fact has been brought home to the person charged with the subsequent negligence. As was stated in Woloszynowski v. N. Y. C. R. R. Co. (Cardozo, J., 254 N. Y. 206, 208): “ The doctrine of the last clear chance, however, is never wakened into action unless and until there is brought home to the defendant to be charged with liability a knowledge that another is in a state of present peril, in which event there must be reasonable effort to counteract the peril and avert its consequences. (Wright v. Union Ry. Co., 224 App. Div. 55, 250 N. Y. 526.) Knowledge may be established by circumstantial evidence, in the face even of professions of ignorance (cf. Bragg v. Central N. E. Ry. Co., 228 N. Y. 54), but knowledge there must be, or negligence so reckless as to betoken indifference to knowledge.” Thus, in the instant case the administrator was obligated to show that the conductor Dingle knew that the decedent had placed himself in a position of danger (that he established beyond all question by Dingle’s own testimony on his examination before trial). In addition the administrator was required to show that, with knowledge of the perilous situation of the deceased, Dingle failed to use reasonable care to avoid the accident (prima facie proof of that was made by showing that the train moved for fifty-three feet after Dingle knew that the deceased was in peril before he pulled the emergency brake to stop the train). Finally it had to be established that the failure on the part of Dingle to use reasonable care was the proximate cause of the accident. Those matters were all questions of fact for a jury. (Grand Trunk Railway Co. v. Ives, 144 U. S. 408; Lewis v. Long Island Railroad Co., 162 N. Y. 52, 62; Bragg v. Central N. E. Ry Co., 228 N. Y. 54, 57 [where a sectionman on the defendant’s railroad went to sleep while seated on a railroad tie and was run over by an engine]; Harris v. N. Y. City Interborough Ry. Co., 260 N. Y. 620; Panarese v. Union Railway Co., 261 N. Y. 233, 236.)

In the Bragg case the engineer testified that as soon as he saw Bragg he whistled and applied the brakes. In view of other testimony we said (p. 58) that the jury may have disbelieved the statement of the engineer as to the brakes. They may have thought he contented himself with blowing the whistle and made no further observations as to its effect until the deceased was struck.” In Storr v. New York Central R. R. Co. (Pound, J., 261 N. Y. 348, 351), we said: “ If one by a negligent act places himself or his property in a position of danger his negligence does not contribute to defeat his recovery if the situation was known to the defendant in time to avert the consequence of plaintiff’s own negligence. In such a case the defendant’s negligence is the sole cause of the injury. It must not run on * inert and callous ’ and cause an accident which proper care might have avoided.”

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

Rippey, Lewis and Desmond, JJ., concur; Lehman, Ch. J., and Loughran, J., dissent; Thacher, J., taking no part.

Judgments reversed, etc.


author: Lehman, Ch. J.

text:
    Matilda Kraunz, Respondent, v. Irving Kraunz, Appellant.
    Argued May 15, 1944;
    decided June 14, 1944.

      Jacob Shientag for appellant.
    I. The judgment, as modified, should be reversed. It defeats the declared policy and purpose of the Federal and State governments to equalize the burdens of taxation. (Black v. Graves, 257 App. Div. 176, 281 N. Y. 792; Evans v. Gore, 253 U. S. 245; Matter of Reeves v. Crownshield, 274 N. Y. 74; Surace v. Danna, 248 N. Y. 18.) II. The modified judgment is manifestly unjust to defendant: III. Payment of a wife’s taxes is not part of a husband’s duty to support; her obligation to pay taxes is personal and may not be transferred to the husband. (Turner v. Woolworth, 221 N. Y. 425.) IV. The judgment and order appealed from are contrary to the express mandate of the statute which makes it illegal and unlawful for one to assume or bear the burden of another’s income taxes. (Tax Law, § 385.) V. The court was without power to modify the judgment. (Harris v. Harris, 259 N. Y. 334; Merrick v. Merrick, 266 N. Y. 120; Schmelzel v. Schmelzel, 287 N. Y. 21.)

      Abraham J. Halprin, Sidney B. Bossiter and Bernard Both-man for respondent.
    I. The amendments to the Federal and State income tax laws after the entry of the final decree of separation which resulted in (a) a reduction of plaintiff’s real income under the judgment of separation from $150 per week to the sum of $115.58; and (b) a saving by the defendant of at least the sum of $3,900 per year; constituted• such a change in the circumstances of the parties as warranted the granting of the relief prayed for. (Fox v. Fox, 263 N. Y. 68; Rosenthal v. Rosenthal, 265 App. Div. 880; Wolford v. Wolford, 43 N. Y. S. 2d, 200.) II. The obligation to pay an income' tax imposed upon the plaintiff is an item that properly must be considered by a court in fixing the amount of alimony. (Audubon v. Shufeldt, 181 U. S. 575; Wetmore v. Wetmore, 149 N. Y. 520; Romaine v. Chauncey et al., 129 N. Y. 566; De Brauwere v. De Brauwere, 203 N. Y. 460; Steitz v. Gifford, 280 N. Y. 15; Eastman Co. v. Southern Photo Co., 273 U. S. 359; Douglas v. Willcuts, 296 U. S. 1; Helvering v. Leonard, 310 U. S. 80; Daggett v. Commissioner of Internal Revenue, 128 F. 2d 568, 317 U. S. 673; Riggs v. Del Drago, 317 U. S. 95 ; Evans v. Gore, 253 U. S. 245; Baskin & Co., Inc., v. Howe, 225 App. Div. 553; Rentall Realty Corp. v. Marksville, 170 Misc. 825; Matter of Weingart v. Cohen, 159 Misc. 891.)
   Lehman, Ch. J.

The decree in favor of the plaintiff, entered on December 15, 1941 in an action for separation, provides that the defendant shall pay to the plaintiff the sum of $125 per week for the support and maintenance of the plaintiff and her daughter and that “ after September 28th, 1943 either party may apply to this Court on notice to the other, should the financial circumstances of the defendant change * * * for a modification of this decree insofar as payment of alimony is concerned.” In 1941 when the decree was entered the amount which the defendant was required to pay to the wife as alimony could not be deducted from the gross income of the defendant in determining the net income tax payable by the defendant under the laws of the United States and under the laws of the State of New York. The alimony received by the plaintiff was at that time not subject to any income tax. By amendments to the Internal Bevenue Code [U. S. Code, tit. 26, § 22, subd. (k); § 23, subd. (u)] effective October 21, 1942, the amount of alimony paid by the defendant pursuant to the decree could be deducted from the defendant’s gross income in determining the net income subject to income tax; and the amount received by the plaintiff became part of her income subject to tax. The Tax Law of this State was amended in similar manner applicable to tax returns for any tax year beginning on or after January 1, 1943 (L. 1943, ch. 253).

As a result of those amendments the income taxes which the defendant was required to pay for the year 1943 were approximately $3,800 less than the income taxes would have been, if the statutes had not been amended in manner which shifted the burden of paying income taxes on amounts paid and received as alimony from the husband who paid, to the wife who received, the alimony. The Federal income tax upon the alimony received by the wife amounted for the year 1942 to the sum of $256.79, and the Federal and State income taxes for the year .1943 amounted to $1,789.15. The plaintiff, claiming that the amount of the alimony which the defendant was directed to pay by the decree entered in 1941 will be insufficient for the proper support of her daughter and herself when she is compelled to pay income taxes out of the amount received, applied to the court in October, 1943, for an order modifying the final judgment of separation by providing that the defendant shall pay to the plaintiff the amount of the Federal and State income taxes which the plaintiff is, or will be, required to pay upon the income received by her pursuant to the final judgment of separation. The motion was denied at Special Term, but upon appeal was granted by the Appellate Division.

The judgment of separation recites that the parties had “ consented to the payment of alimony and agreed on the amounts and terms thereof ”. One of these terms was that either party might apply for a modification of the provisions of the decree relating to payments of alimony “ should the financial circumstances of the defendant change ”. Perhaps a statutory change which shifts the burden of paying an income tax from the defendant to the plaintiff is not a change in the financial circumstances of the defendant within the meaning of the agreement and decree. The shifting of that burden does, however, reduce the amount which will be available to the plaintiff for support and in section 1170 of the Civil Practice Act, the Legislature has conferred upon the court power to modify its direction for the payment of alimony “ as justice requires The parties could not by contract divest the courts of that power. (Hoops v. Hoops, 292 N. Y. 428, decided April, 1944.)

We agree with the Appellate Division that when it appeared that statutory changes compelled the plaintiff to pay out of the moneys received by her for support charges which the defendant was required to bear at the time the amount of alimony was fixed, justice required that the decree be modified.

In fixing the alimony to be paid by a defendant under a judgment of separation presently granted the court would certainly take into account the income and other taxes which the wife and husband would probably be compelled to pay. Only the balance which remains after such payment will be available for the support or enjoyment of either husband or wife. No public policy embodied in the tax statutes is thwarted by the courts when they direct a defendant in a matrimonial action to pay to his. wife for her support and for the maintenance of his children a sum commensurate with his financial ability to pay and sufficient to furnish proper support after taxes are paid. Justice requires that the amount of alimony should be measured by that standard both when the judgment is granted and when application is made for its modification.

Here the order of the Appellate Division does not direct the defendant to pay a specified amount for alimony fixed by it after taking into account that only the balance remaining after the wife has paid the income taxes would be available for support. Instead it directs the defendant to pay the alimony which he agreed to pay and which he was originally directed to pay and also: (a) the sum of $256.83, the amount of plaintiff’s federal income tax for the year 1942; (b) the sum of $1,789.15, the amount of plaintiff’s federal and state income taxes for the year 1943; and (c) such sum of money as the plaintiff shall be required to pay for federal and state income taxes for the year 1944 and thereafter, which may become due by reason of the receipt by plaintiff of payments pursuant to the final judgment of separation

The court has directed the defendant to pay these moneys pursuant to the authority vested in it to give such directions “ as justice requires * * * for the * * * maintenance ” of any of the children of the marriage and for the support of the wife. (Civ. Prac. Act, § 1170.) All payments which the husband is directed to make constitute “ periodic payments ” by a husband to his wife “ in discharge of, a legal obligation which, because of the marital or family relationship, is imposed upon * * * such husband ” under a decree of separate maintenance. The burden of paying the income tax on all such payments is placed by the Tax Law upon the wife (Tax Law, § 359, subd. 8) and all such payments may be deducted from the gross income of the husband (§ 360, subd. 17). The court cannot change the statutory basis for determining the net income of the wife subject to tax payable by her or the statutory basis for determining the allowable deductions from the gross income of the husband by directing the husband to pay to the wife a fixed sum for her support and, in addition, such sums as the plaintiff shall be required to pay for Federal and State income taxes ‘ ‘ by reason of the receipt by plaintiff of payments pursuant to the final judgment of separation ”. When the rate of income tax is determined the amount which the plaintiff will be required to pay for income taxes upon the pay-meats which the defendant is directed to make periodically can be computed by an algebraic formula, but that rate may vary in accordance with variations in plaintiff’s income from other sources affecting the amount of such income which is subject to a surtax. It would be unlawful for the parties to 11 agree or contract ’ ’ that the husband should ‘ ‘ pay or assume or bear the burden ” of the income tax which under the statute is imposed upon the wife (Tax Law, .§ 385). Argument might be made that the public policy would be thwarted by a direction of the court that the husband should bear a burden which the Legislature has declared the wife shall bear and the husband may not assume, but certainly the court can direct the husband to pay to the wife such sum as the court may determine is sufficient to enable the wife to bear that burden and sufficient, also, to furnish adequate support for wife and children. For these reasons, though we agree with the Appellate Division that the court may modify the directions in the decree for the support of the wife and the maintenance of the daughter, we are of the opinion that the court should fix the amount which the husband is directed to pay instead of directing him to pay the variable amount of the income tax which under the tax laws will be imposed upon the income of the wife.

The judgment of the Appellate Division should be modified, with costs to the respondent, by striking out the direction for the payment by the defendant of such sums of money as the plaintiff has been or may be required to pay for State and Federal income taxes and by remitting the case to Special Term to fix as justice requires the amount of alimony which the defendant should pay from the date when the motion was made returnable by reason of the obligation of the plaintiff to discharge income taxes which are payable after that date, and as so modified affirmed.

. Loughbau, Rippey, Lewis, CoStway, Desmoitd and Thacheb, JJ., concur.

Judgment accordingly.


author:
Loughran, J.
      Thacher, J.

text:
    In the Matter of the Liquidation of Lawyers Mortgage Company. William E. Russell et al., as Reorganization Managers of Lawyers Mortgage Company, Appellants; Louis R. Pink, Superintendent of Insurance of the State of New York, as Liquidator, Respondent.
    Argued February 29, 1944;
    decided July 19, 1944.

      Scott McLanahcm and Kersey B. Egginton for appellants.
    I. The Superintendent, as liquidator, is bound to consider fairly and in good faith, and to submit to the court for its consideration, any reasonable offer made by the reorganization managers for the purchase of assets on behalf of the assenting creditors. No question of discretion of the Superintendent, or of the court, is here involved. (Vermeule v. City of Corning, 186 App. Div. 206, 230 N. Y. 585; Matter of the Bank of United States, 290 N. Y. 279; Matter of National Surety Company, 248 App. Div. 111, 272 N. Y. 613.) II. The court has ample power to grant the relief sought by the reorganization managers. (Matter of Casualty Co. of Am. [Rubin Claim], 244 N. Y. 443; Motlow v. Southern Holding & Securities Corporation, 95 F. 2d 721; National Bondholders Corp. v. Joyce, 276 N. Y. 92; Matter of Lawyers Mortgage Co., 169 Misc. 802, 256 App. Div. 974.) III. The grounds upon which the Superintendent rests his position are wholly inadequate and untenable.

      Edward F. Keenan, Joseph Lapidus and Thomas D. Austin for respondent.
    . I. The denial of the application at Special Term and the affirmance by the Appellate Division constituted an, exercise of discretion which should not be reviewed by the Court of Appeals. (Matter of Bank of United States, 290 N. Y. 279.) II. The appellants conceded that there is nothing in the plan which requires the Superintendent to sell or transfer the remaining assets now in his hands to the reorganization managers. (Matter of Lawyers Mortgage Co., 169 Misc. 802, 256 App. Div. 974.) III. The Superintendent of Insurance cannot be compelled to accept an offer involving the creation of a realization corporation, which he does not approve, upon any theory that he is estopped to oppose the creation of such a corporation. IV. No valid reason exists for a transfer of the remaining assets now in the hands of the Superintendent to the reorganization managers or to a realization corporation. (Matter of Casualty Co. of Am. [Rubin Claim], 244 N. Y. 443; Matter of Knickerbocker Life Ins. Co., 199 App. Div. 503, 233 N. Y. 604; Matter of Second Russian Ins. Co., 219 App. Div. 46, 244 N. Y. 606.) V. The courts below did not err in refusing to direct the Superintendent to apply for an order which would require him to transfer the assets in his hands to the reorganization managers. (Insurance Law, § 539; Matter of Union Bank of Brooklyn, 176 App. Div. 477; Matter of National Surety Co., 248 App. Div. 111, 272 N. Y. 613; Matter of Lawyers Title & Guaranty Co., 254 App. Div. 491.)

      Dominick R. Santomenna and Alfred Douglas Olena for Carrie L. Parsons and another, as executors of George W. Pranbard, deceased, amici curies, in support of respondent’s position.
    I. The court cannot direct the Superintendent to apply to the court for an order authorizing the sale of the assets to the appellants, unless the Superintendent acted unreasonably. (Matter of National Surety Company, 248 App. Div. 111, 272 N. Y. 613.) II. The Superintendent has exercised wise discretion in rejecting appellants’ offer. III. The rejection of the offer is not contrary to any expressed intention of the creditors.
   Loughran, J.

In this proceeding under former article XI (now XVI) of the Insurance Law for the liquidation of Lawyers Mortgage Company, the court approved a plan of reorganization which was adopted by the Superintendent of Insurance as liquidator. Pursuant thereto, the liquid assets were transferred to an “ Operating Company ” and four Organization Managers ” were appointed with authority to purchase the nonliquid assets for disposal through a Realization Corporation.”

On July 23, 1942, the managers made a written offer to buy the nonliquid assets for $4,909,000 and thereupon requested the Superintendent to apply to the court for approval thereof. When he refused, they moved for an order directing him to petition the court for sanction of the sale contemplated by their offer. By our leave, they have appealed to us from an affirmance of the denial of that motion.

In liquidating a delinquent insurer, the Superintendent of Insurance acts as a statutory.receiver,— not as a receiver for the court. (Matter of People [Tit. & Mtge. Guar. Co.] 264 N. Y. 69.) Section 539 of the Insurance Law says that as liquidator the Superintendent may sell or otherwise dispose of the property of a delinquent insurer “ subject to the approval of the court ” (so, former § 421). The meaning of this is that the court may veto such action of the liquidator but cannot compel it. (Matter of Casualty Co. of Am. [Rubin Claim], 244 N. Y. 443, 449.) When it was the idea that assets in the keeping of a liquidator were to be disposed of only on an order of the court, the Legislature has had no difficulty in plainly saying so. (Matter of Bank of the United States, 290 N. Y. 279, 284.) We do not find in the cited statute any warrant for the notion that the Superintendent was bound to act upon the offer in question.

Nor is any warrant therefor contained in the plan of reorganization. The provision for transfer of the liquid assets to the Operating Company ” required that the Superintendent should apply to the court for an order ” to that end. Such a direction is missing from the provision for disposition of the nonliquid assets. In that connection, the plan says that “ the Reorganization Managers shall request the Superintendent of Insurance to apply * * * for an order authorizing the sale * * * at a price and on terms satisfactory to him and approved by the court.” Thus the parties to the plan appear to have deliberately excluded the duty which the managers would now have us put upon the Superintendent.

Though his refusal to consider their offer is not for us to question, his reasons therefor should be noticed. He said: “ Since the date of reorganization in 1937, all claims against the company have been determined and a 15% liquidating dividend has been paid to creditors of the company. We are continuing to liquidate the assets as expeditiously as possible and there is no point in now transferring this work to a new corporation.” The managers express distrust respecting the good faith of such an attitude but their concern in that regard does not make any question of law.

The order should be affirmed, with costs.

Thacher, J.

(dissenting). On August 2, 1933, the Superintendent of Insurance was directed to take possession of the property of Lawyers Mortgage Company for the purpose of rehabilitating it. By virtue of this order he was authorized and directed to take such steps toward the removal of the causes and conditions which had made the rehabilitation proceedings necessary ‘ ‘ as the court shall direct ’ ’ (Insurance Law, former § 402). Pursuant to this statutory authority, and upon his suggestion, a committee of creditors was designated at a meeting of creditors called by a Special Deputy Superintendent of Insurance in charge of these rehabilitation proceedings. Many months were spent by this committee in studying the situation and in formulating a plan for the reorganization of Lawyers Mortgage Company, Thereafter, with the approval of the Superintendent, the court appointed a referee for the purpose of conducting hearings upon the plan proposed by the committee and such modifications or other plans as might be submitted for the consideration of the creditors, stockholders and those otherAvise interested, including a plan proposed on a companion motion by counsel representing interested parties. (Matter of Lawyers Mortgage Co. [No. 2], 158 Misc. 579.) Amendments to the committee plan were later proposed and approved.

Many hearings were had before the referee and many conferences of attorneys, of the Superintendent of Insurance, the Mortgage Commission and various creditors and stockholders, and it was through participation in these conferences Avith the Superintendent of Insurance and others that the differences between the parties in interest were finally crystallized and to a great extent eliminated.

After hearings, upon due notice to all parties interested, an order Avas made by the court under date of September 14,1937, approving the plan of reorganization recommended by the referee, assuming jurisdiction of the reorganization proceedings and appointing four reorganization managers to supervise the carrying out and consummation of the provisions of the plan. At these hearings, counsel for the Superintendent appeared, raised no objections to the plan and did not question the desirability of its approval. The structure of the plan is indicated by the principal duties imposed upon the reorganization managers, which were four in number:

(a) the solicitation of assents to the plan from creditors and stockholders;

(b) the purchase, when sufficient assents had been obtained, ■ from the Superintendent of Insurance of an operating company which had been organized by him and to which liquid assets had been "transferred so that it might continue the business of the company in reorganization;

(c) filing and proving before the Superintendent as liquidator of the claims of assenting creditors, the number of which finally amounted to approximately 20,000 separate creditors, holding the amount of approximately 55,000 separate claims, which were finally allowed in the principal amount of over $37,000,000, and

(d) the purchase of nonliquid assets remaining in the hands of the Superintendent of Insurance and the management and liquidation thereof for the benefit of the assenting creditors.

All of the first three of these principal duties of the managers have been successfully accomplished. The operating company was purchased and taken over by the managers on behalf of the assenting creditors as contemplated, after an order had been entered declaring the plan of reorganization operative and effective and after the validity of the plan and the jurisdiction of the court had been sustained in contested proceedings before the court. The managers now represent over 85% of all the creditors.

With reference to the fourth principal duty of the managers, with which we are concerned in this proceeding, it was provided: “ Tenth: After the Plan of Reorganization shall have, been declared effective, the Creditors’ Managers shall determine when a sufficient number of claims filed in the liquidation proceeding have been finally allowed so as to indicate with reasonable certainty the total amount of claims that will be finally allowed against Lawyers Mortgage Company. Thereupon the Creditors’ Managers shall request the Superintendent to apply, upon reasonable notice to such parties as the Court may direct, for an order authorizing the sale, in bulk or otherwise, of all or part of the assets of Lawyers Mortgage Company, (except (a) the capital stock of Lawyers Mortgage Guarantee Corporation, the reclassified stock of that company or the Voting Trust Certificates representing the same and (b) such amount of cash or other assets as may be estimated by the Superintendent, and approved by the Court, to be required for the payment of his expenses and of trust claims), at a price and on terms satisfactory to the Superintendent and approved by the Court. * * * The Creditors’ Managers shall apply in payment for any such assets purchased by them, the claims assigned to them at their dividend or distribution value, or for that purpose and upon the prior approval of the Court they may borrow money, secure said loans by the pledge of said claims, or otherwise, and to that end may make, execute and deliver any instruments considered necessary or requisite to effect that result.”

The provisions of the plan relating to the proof and allowance of claims required the reorganization managers to apply to the court for an order to liquidate the Lawyers Mortgage Company pursuant to article XI (now article XVI) of the Insurance Law. This was done and an order of liquidation was entered. In his application for the order of liquidation the Superintendent referred to proceedings which culminated in the adoption of the plan of reorganization and to the order confirming the report of the referee and approving the plan; also to the fact that the plan contemplated an early determination of creditors’ claims and utilization of the assets of Lawyers Mortgage Company in payment thereof He referred also to the request received from the reorganization managers to make the application for the order of liquidation and to ‘ ‘ incorporate in the order of liquidation appropriate provisions referring to the Reorganization Plan and continuing the Court’s jurisdiction over the Reorganization Managers, the Reorganization Plan and the reorganization proceedings until the ultimate consummation thereof.” He then stated: “ Application is therefore made by your petitioner for such relief ”, and his prayer for relief was in conformity with these statements. The order of liquidation dated November 17,1937, was granted by the court in connection with and principally for the purpose of implementing the plan of reorganization so that the identity of creditors and the amount of their claims might be definitely established and the carrying out of the plan thereby facilitated. There was no other proceeding, except pursuant to an order of liquidation, whereby the identity and claims of creditors could have been established, and, without a determination as to the identity of creditors and the exact amounts of their respective claims, obviously no reorganization was possible.

The order of liquidation expressly provided “ that the Superintendent of Insurance of the State of New York and his successors in office, as Liquidator of Lawyers Mortgage Company, be and he is and they are hereby authorized and directed to proceed with any and all matters contemplated in or provided for by said Plan of Reorganization until such time as the Court shall otherwise direct.”

Proceeding precisely in accord with the provisions of the plan for the purchase by the reorganization managers in behalf of the assenting creditors of the assets remaining in the hands of the Superintendent, the reorganization managers made an offer for the purchase of these assets of over $4,900,000, payment to be made in cash or as provided in the provision of the plan above quoted. The Superintendent of Insurance, without giving any consideration to the adequacy of this offer, declined to entertain it because, in derogation of the plan of reorganization approved by the court with his concurrence, he has since decided that the purchase should not be made in behalf of the assenting creditors. The basis of the Superintendent’s objection is that such a sale will merely transfer the duties of liquidation from the Superintendent of Insurance to the realization corporation and this he regards as undesirable.

The justice at Special Term went so far as to say: While in form the offer is one to purchase assets, in reality the object sought to be obtained is the transfer from the Superintendent of Insurance to a Realization Corporation to be managed by Realization Agents, of the duty of liquidating these assets. It calls for the substitution of the judgment of Realization Agents for that of the State Superintendent of Insurance.” This is the basic error underlying the decision of the courts below and of the Superintendent.

The same contention was unsuccessfully made by an objecting creditor in the reorganization proceeding and there successfully opposed by the Superintendent of Insurance. (Matter of Lawyers Mortgage Co., 169 Misc. 802, 816, affd. 256 App. Div. 974.) In that proceeding the court carefully analyzed the provisions of the plan and demonstrated that the plan provided for a sale, by the Superintendent of Insurance at prices satisfactory to him and approved by the court as fair and reasonable to all concerned, of the stock of the Lawyers Mortgage Company and of the remaining assets, and said: The court is accordingly unable to perceive how the plan of reorganization may be said to call for an unlawful surrender by the Superintendent of Insurance of his statutory duty to liquidate. The plan does provide for liquidation by the Superintendent of part of the assets in one sale and for the further liquidation by him of various assets from time to time as steps in the reorganization, if, as and when he elects to sell. It contemplates, however, that, instead of selling assets to strangers, he will sell them to the creditors and stockholders of the company in liquidation, at least to those creditors and stockholders who wish to become purchasers. It is not the purpose of the plan to give such creditors and stockholders a bargain by letting them acquire the assets for less than they are worth. The price, as repeatedly stated above, must be approved by the court as fair, just as if the sale were to outsiders. In fact, there is nothing in the plan which precludes the Superintendent of Insurance from selling the other assets to third parties if he elects so to do ” (p. 823).

Upon this record it must be concluded that the Superintendent, the court, the managers and those interested who assented to the plan contemplated that the Superintendent in making such an election would, in view of his duties as liquidator, consider the adequacy of the purchase price offered by the managers representing the assenting creditors. This he has absolutely refused to do, misconceiving and characterizing the offer made under the express terms of the plan of reorganization as designed merely to transfer the duty of liquidation from himself to the reorganization managers.

We come, then, to the power of a court of equity to deal with this situation. Prior to the enactment in 1909 of section 63 of the Insurance Law (repealed by L. 1932, ch. 191, and re-enacted in article XI of the same statute), the Supreme Court undoubtedly possessed all of the inherent powers exercised by a court of equity in the reorganization of corporations generally, including insurance companies. (Clinton Trust Co. v. 142-144 Joralemon Street Corp., 237 App. Div. 789; Chase Nat. Bank v. 10 E. 40th St. Corporation, 238 App. Div. 370.) There is nothing in the Insurance Law, providing for the office of Superintendent of Insurance and defining his powers, which discloses any purpose whatever to withdraw the inherent powers of a court of equity in the control of insolvent corporations, including insurance companies. The obvious purpose was to impose responsibility and authority in the Superintendent in connection with the rehabilitation and liquidation of insurance companies under the supervision of the court, by which we may understand that the Legislature intended to continue the powers of supervision theretofore exercised. Bepeated provisions in section 63 of the Insurance Law, and in the later article XI which took its place, require approval by the court before the Superintendent may act in any important matters. Our own decisions emphasize the' court’s power of supervision and direction of the course of liquidation ” (Matter of Casualty Co. of Am. [Rubin Claim], 244 N. Y. 443, 449, 451). In that case, Chief Judge Cardozo said of section 63: Terms more distinct than any to be found in this enactment must stamp him [the Superintendent] a judge before the courts will be shorn of the power of supervision that would otherwise be theirs.” We are now told upon the asserted authority of this case .that the court may veto but may not compel action by the Superintendent, although the fact in that case was that the Superintendent fixed a fee for legal services at $3,000 and this court compelled him to pay $8,000.

The inherent equitable powers of supervision over the liquidation and reorganization of corporations, including insurance companies, comprehend the consideration of advantageous sales in liquidation of the assets and, insofar as any sáles are concerned, former section 421 of the Insurance Law authorizes the Superintendent, as liquidator of an insurance company under former section 404, to sell the assets “ subject to the approval of the court ”. Since this power is expressly subject to the approval of the .court it is no broader than the power of the Superintendent of Banks. The only difference between the language of former section 421 of the Insurance Law and the language of section 618 of the Banking Law is that the former uses the expression, “ subject to the approval of the court ” and the latter, the expression, “ upon an order of the supreme court It is true that the Superintendent becomes a statutory receiver in the sense that he is named by the statute and not by the court, but the property of the corporation is brought into the protective arm of the law and the receiver is subject to directions of the court except insofar as discretionary power is vested by the Legislature in him. (Matter of People [Tit. & Mtge. Guar. Co.], 264 N. Y. 69, 80-81.)

“.The conduct of the liquidation is subject in all its phases to the supervision and control of the court, except in so far as the Legislature may have vested discretionary power in the Superintendent. Save for this, the court in its discretion, may veto the acts of the Superintendent as liquidator, and is vested with a discretion which may override that of the Superintendent.” (National Bondholders Corp. v. Joyce, 276 N. Y. 92, 96.)

The same rule applies to the Superintendent of Banks: “ We have said that the Superintendent of Banks is in effect a statutory receiver, yet for some purposes the assets in Ms hands may be regarded as ‘ in custodia legis.’ (Lafayette Trust Co. v. Beggs, 213 N. Y. 280.) The court may not substitute its discretion for his own where the statute leaves discretion to him. There still remains a field within which the court is supreme.”

This was said in Isaac v. Marcus (258 N. Y. 257, 268-269) and, applying this rule, the court there said:

“Perhaps the court may not direct him to bring an action if in his discretion it would not be for the best interests of the banking corporation. That we do not now decide. At least it can issue an order to show cause why he should not bring such an action, or why a stockholder should not be permitted to protect the rights of stockholders by instituting the action vested in him.
“ Upon the return of such an order the court can determine whether the Superintendent of Banks is willing and able to protect those rights or whether the equitable jurisdiction of the court may be invoked by the stockholder.”

In the recent ease of Matter of Bank of United States (290 N. Y. 279) the Superintendent of Banks procured an appraisal of certain securities of $750,000. He talked to representatives of prospective buyers, all of whom were told that the Superintendent expected to obtain $750,000. Bidders were told to make their highest offers because they would have no further opportunity to bid and no bid from one bidder would be disclosed to any other bidder. One bidder made an offer in writing of $650,-000, stating that his client did not consider the securities worth $750,000. Another was induced to submit a bid for $751,501, wMch was far the highest bid. The Superintendent of Banks informed the bidder that its offer was acceptable. When the Superintendent asked the court to approve, the offer the court held an auction sale and the unsuccessful bidder who had previously bid $650,000 raised his offer above the successful bidder, whereupon the court rejected the Superintendent’s petition for approval of the sale, which this court said had been fairly conducted and in accordance with the procedure devised by the Superintendent because in his opinion the best price for the securities would be obtained upon a sale so conducted. In reviewing this judicial exercise of power over sales by the Superintendent of Banks, this court said:

“ If the court has no power except to review the exercise of a discretionary power conferred by the Legislature upon an administrative officer, forcible argument could be made that the court has exceeded its power.
1 ‘ In truth, however, the power conferred by the Legislature upon the court is far greater. The Superintendent is authorized to sell, or dispose of, the assets of the bank only 1 upon an order of the Supreme Court.’ (Banking'Law, § 618.) In making such an order the function of the court is not confined to review of a determination previously made by the Superintendent in the exercise of an administrative discretion vested in him. The court exercises its own discretion, and since the Appellate Division has affirmed the order of the court, we have no power to review the exercise of that discretion.” (p. 284.)

In this case neither the Superintendent nor any court has exercised any discretion with regard to this proposed purchase of assets for a price of approximately $5,000,000.

The orders should be reversed and the petitioner’s motion granted to the extent of directing the Superintendent of Insurance, as liquidator of the company, to consider the adequacy of the offer made by the reorganization managers and thereafter to show cause why an order should not be made and entered herein directing the Superintendent to accept said offer if within a reasonable time no more advantageous offer is received.

Lehman, Oh. J., Rippey, Lewis and Desmond, JJ., concur with Loughran, J.; Thacheb, J., dissents in opinion in which Conway, J., concurs.

Order affirmed.


author: Desmond, J.

text:
    Maurice F. Simon, Appellant and Respondent, v. Noma Electric Corporation et al., Respondents and Appellants, et al., Defendants.
    Argued June 5, 1944;
    decided July 19, 1944.

      I. Maurice Wormser, Samuel Rubin and David J. Colton for plaintiff-appellant and respondent.
    I. The agreement with plaintiff’s assignor was made by both Marr and the sales corporation and the intent of the parties was clearly to bind the sales corporation, as well as Marr. II. Mark’s authority to bind the sales corporation was clearly established. (Harms Co. v. Michel Brewing Co., 228 N. Y. 263; Ætna Explosives Co. v. Bassick, 176 App. Div. 577, 220 N. Y. 767; Hall v. Herter Bros., 90 Hun 280, 157 N. Y. 694; Powers v. Schlicht Heat & Power Co., 23 App. Div. 380, 165 N. Y. 662.) III. There was adequate proof to support the finding of conspiracy. (Hornstein v. Podwitz, 254 N. Y. 443; Posner Co. v. Jackson, 223 N. Y. 325; Campbell v. Gates, 236 N. Y. 457; Lamb v. Cheney & Son, 227 N. Y. 418.)

      Philip Warshaw and William L. Schwartz for defendants-respondents and appellants.
    I. Plaintiff failed to establish a brokerage contract between his assignor and'thé defendant Air Conditioners Sales Corporation. (Ditmars v. Renz, 269 N. Y. 191; Curry v. American Railway Express Co., 214 App. Div. 744; Ballston T. R. R. Co. v. Hudson Val. R. Co., 76 App. Div. 184; Knapp v. Rochester Dog Protective Assn., 235 App. Div. 436; Chard v. Ryan-Parker Construction Co., 182 App. Div. 455; Hoyes v. Irving Trust Co., 250 App. Div. 274; Tobin v. Roaring Creek & C. R. Co., 86 F. 1020.) II. Planitiff has failed to establish the conspiracy cause of action. (Burgess Bros. Co. v. Stewart, 112 Misc. 347, 194 App. Div. 913; Green v. Davies, 182 N. Y. 499; Brown v. Yaspan, 256 App. Div. 991; Place v. Minster, 65 N. Y. 89; Rhodes v. Ocean Accident & Guarantee Corp., 235 App. Div. 340; Rosenzweig v. Wecksler, 237 App. Div. 65; Hornstein v. Podwitz, 254 N. Y. 443; Rafalsky v. Goldner, 18 N. Y. S. 2d 655.)
   Desmond, J.

For convenience we will refer to plaintiff’s assignor as “ plaintiff The complaint sets np four alleged causes of action, only two of which survive for our consideration. The first count, which runs against defendants Air Conditioners Sales Corporation, Air Conditioners, Inc., and Marr, alleges a promise by those defendants to plaintiff to pay him a commission for services to be performed by him. Those services, he alleges, were by way of arranging introductions to persons, firms or corporations in a position to furnish financial" assistance to those three defendants. All this had to do with a business enterprise involving the manufacture and sale by defendant Air Conditioners Sales Corporation of patented electric heaters. The agreed commission, says the complaint, was to be 10% of the -amount of any .such financial assistance that might thus accrue to those defendants. Plaintiff avers that he duly performed all the conditions of his employment and that large sums of money came to those three defendants thereby, but that they have refused to pay him his commission. The other cause of action is pleaded against the three defendants just mentioned, also against defendants Noma Electric Corporation and Henri Sadacca. That count accuses all five' defendants of conspiring to deprive plaintiff of those same commissions, and alleges that plaintiff by that alleged wrong has" been damaged in the same amount as claimed in the other cause of action above described.

On the trial the complaint was dismissed, by consent, as against defendant Air Conditioners, Inc., and that" corporation is out of the case. The Trial Justice, sitting without a "jury, awarded plaintiff damages of $7,311.87 against defendant Marr, and of $6,736.87 against the three remaining defendants, on the two causes of action. The damages were computed thus: defendant Sadacca,-an investor, having become interested in the business prospects of defendant Air Conditioners Sales Corporation, purchased its outstanding stock for $500 and arranged, through defendant Noma Electric Corporation and through an individual,- loans to Air Conditioners Sales Corporation totalling about $67,000. Out of those moneys Marr received $5,750 (as commissions on sales of merchandise) from Air Conditioners Sales Corporation. The awards of damages amount to 10% of those sums. The Trial Justice’s opinion, which serves as a decision, contains findings to the effect that the agreement was made as pleaded in the complaint, that defendant Marr, then an officer and director of Air Conditioners Sales Corporation, acted for himself as well as for that corporation in entering into the agreement with plaintiff, that plaintiff performed the services required of him and that those services resulted in the. accrual to that corporation and to Marr of the amounts above listed. As to the conspiracy cause of action, the Trial Court held that a conspiracy to deprive plaintiff of-his commissions had been established. On appeal, four of the Appellate Division Justices were of the opinion that the loans made by defendant Noma to defendant Air Conditioners Sales Corporation were not within the contemplation of the agreement 'since, when those loans were made, ownership of the latter corporation had passed from Marr and his associates to the Noma Corporation. The agreement made by Marr, said the Appellate Division majority, could not reasonably be thought to cover those later accruals which were of no benefit to Marr who no longer had any interest in Air Conditioners Sales Corporation. The dissenting Justice in the Appellate Division voted to reverse and dismiss the complaint on the ground that no authority had been shown in Marr to make the agreement on behalf of Air Conditioners Sales Corporation and that the agreement itself was too vague to be enforcible. The judgment was thereupon modified by the Appellate Division by reducing it to $625, thus limiting plaintiff’s commissions to 10% of the amount paid by Sadacca and his corporation, Noma, for the purchase of the Air Conditioners Sales stock, plus 10% of the compensation received by Marr out of the moneys accrued to Air Conditioners Sales Corporation, with no commission to plaintiff on the "loans. After the Appellate Division decision, plaintiff “ released ” defendant Marr, alone, from liability on the judgment. Plaintiff appeals here, complaining of the reduction by the Appellate Division of his recovery. Defendants Noma, Sadacca and Air Conditioners Sales Corporation appeal and pray that the complaint be dismissed for failure of proof.

We find evidence in the record to justify the finding that an agreement was made between plaintiff and Marr looking to the payment to plaintiff of compensation for his services in putting in train any series of events that would bring new moneys to Marr or to Air Conditioners Sales Corporation. Proof there is, also, that plaintiff did his work, that new funds were made available as a result thereof, also that defendants Noma and Sadacca conspired to cheat plaintiff out of his earnings. The difficulty is that there is no proof at all that Marr, in dealing with plaintiff, had a right to, or purported or intended to, bind Air Conditioners Sales Corporation. Marr was the inventor of a patented electric heater and Air Conditioners Sales Corporation had an exclusive world-wide license to manufacture and sell it. Marr was vice-president of Air Conditioners Sales Corporation. He was not a stockholder of record but testified that he was entitled to 20% interest in that corporation. He had invested, he testified, nothing but his time. The record does not show who the other officers were or who, if anyone besides Marr, was active in its affairs. The corporation was in financial difficulties and had previously engaged one Weller to procure some new financing but Weller had not succeeded in doing so. Marr then engaged plaintiff to do what was necessary to interest financiers, for a commission of 10%. Plaintiff interested defendant Sadacca, who was active in defendant Noma and in another corporation, both in the electrical appliance business. The original idea, on which broker Weller had worked and on which plaintiff at first worked, was the formation of a new corporation to take over the business of Air Conditioners Sales Corporation. Sadacca proposed, instead, that he, or Noma, purchase the stock of Air Conditioners Sales Corporation and take over its business. That was eventually done and Air Conditioners Sales Corporation became a wholly-owned subsidiary of defendant Noma. The benefits which accrued to Air Conditioners Sales Corporation were made available to it after Sadacca and his associates had bought, for $500, from one Kearn, all the issued stock of Air Conditioners Sales Corporation. The former owner of that stock got the $500 and Marr got a salary, for a time, from the newly financed Air Conditioners Sales Corporation. There is some evidence that Marr had been authorized by the corporation’s board of directors to make the earlier arrangement with broker Weller. There is no evidence of any such authorization by the directors for the deal made by Marr with plaintiff. The scope of Marr’s general authority is not shown, but at one point he himself testified that he told plaintiff that he (Marr) was not a contractual officer of the corporation but * * • * would attempt to get the officers to consent to it ”. There is no showing of any such consent or of any subsequent ratification. Indeed, we do not know who the officers or directors were, other than Marr. In a confidential memorandum or prospectus, apparently prepared by the first broker, Weller, but handed by Marr to plaintiff and put in evidence by the latter, this appears: ‘£ Mr. Marr is a stockholder, director and Vice President of Air Conditioners Sales Corporation and of Air Conditioners, Inc., and while acting in advisory' capacity he is not employed by either corporation. He resides in New York City and has as a matter of convenience and for the past year and one half, maintained his office in the premises occupied by Air Conditioners Sales Corporation.”

Furthermore, the record contains no substantial proof that Marr ever intended to bind Air Conditioners Sales Corporation. The original agreement between plaintiff and Marr was oral. The confirming letter written by plaintiff is addressed to Marr, individually. It states plaintiff’s understanding that he is to receive 10% of any and all benefits accruing to ££ you [Marr] or your companies ” by reason of introductions to be arranged by plaintiff. Later, after Sadacca had entered the picture and had expressed some dissatisfaction with the size of plaintiff’s.percentage, plaintiff wrote a letter to Sadacca in which he referred to his “ arrangements for commissions with Mm [Marr] ”, and, again, of his “ arrangements with Mr. Marr ”. Plaintiff’s testimony that he was dealing with Marr <£ individually and as a representative of the corporations of which he was an officer and director ” is purely conclusory. The best that can be said for plaintiff’s proofs is that they show a deal made with Marr for 10% commission on all new moneys that should come to Marr or the corporation through plaintiff’s efforts. We cannot accept that, without anything more, as sufficient basis for holding the corporation liable.

All that is written above relates to the liability of Air Conditioners Sales Corporation on the first, or commission, causé of action. We come now to the conspiracy theory on which recovery has been had against all the defendants. The alleged conspiracy is one to deprive plaintiff of his justly earned compensation. Obviously, since we are holding that plaintiff has no case against Air Conditioners Sales Corporation, he has lost nothing by any effort to thwart him in collecting from that corporation. The gist of such a case is damage, not the mere conspiring. (Jones v. Baker, 7 Cow. 445.) True, plaintiff pleaded and proved that the conspirators tried to keep him from getting his commission from defendant Marr, also. Plaintiff’s recovery of a judgment against Marr does not ipso facto make it impossible for him to recover also on a cause of action against others who conspired to induce Marr to breach his contract with plaintiff. (Hornstein v. Podwitz, 254 N. Y. 443, 448, 449.) But to recover on the cause of action for wrongful interference, by the other defendants, with his agreement with Marr, plaintiff had to prove damages resulting from that interference. (Campbell v. Gates, 236 N. Y. 457, 460; Associated Flour Haulers, etc., v. Hoffman, 282 N. Y. 173, 180, 181.) No such damages were proven here, since plaintiff was successful ‘ in obtaining a judgment against Marr for the amount of the commissions due from Marr. (See Shapiro v. Greenwich Savings Bank, 266 App. Div. 359, affd. 293 N. Y. 724.) We need not consider what effect, if any, plaintiff’s subsequent voluntary extinguishment of that judgment against Marr might have, under other circumstances, on plaintiff’s cause of action against the other defendants for inducing Marr to breach.- That attempted interference is not, on this record, shown to have resulted in any damages.

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

Lehman, Ch. J., Lotjghban, Rippey, Lewis; Conway and Thacheb, JJ., concur.

Judgments reversed, etc.


text:
    Marshall A. Wellisch et al., Infants, by Tillie Wellisch, Their Guardian ad Litem, et al., Respondents, v. John Hancock Mutual Life Insurance Company, Appellant.
    Argued June 12, 1944;
    decided July 19, 1944.

      Lester T. Hubbard for appellant.
    I. The verdict of the jury was against the weight of the evidence. II. The defendant sustained the burden of proving that the death of insured was self-inflicted. III. The evidence refutes any theory of accidental death. IV. Where there was no evidence that the death of the insured was accidental, no such question should have been submitted to the jury. (De Gogorza v. Knickerbocker Life Ins. Co., 65 N. Y. 232.) V. Where the insured knowingly and intentionally commits an act (in this case the taking of the pills) which might reasonably result in death, there is no liability of insurer to pay under a policy of insurance excluding liability resulting from self-destruction. (Fanti v. Travelers Ins. Co., 290 N. Y. 782.) VT. Where the evidence tends to show that death was self-inflicted, and no other reasonable inference may be drawn from the evidence, it is the duty of the _ trial court to direct a verdict upon the theory of death by suicide. (White v. Prudential Ins. Co. of America, 105 N. Y. S. 87; Pagett v. Conn. Mut. Life Ins. Co., 55 App. Div. 628; Seybold v. Supreme Tent, 86 App. Div. 195.) VII. Defendant’s motion for a dismissal should have been granted. The policy provides for payment “ upon receipt of due proof on the Company’s prescribed forms, of the death of the Insured * * * The plaintiffs failed to present the required proof. (Vecchio v. Metropolitan Life Ins. Co., 224 App. Div. 301; Giaimo v. Metropolitan Life Ins. Co., 132 Misc. 487.) VIII. The judgment should be reversed as a matter of law. (McQuade v. Prudential Insurance Co. of America, 166 Misc. 524; Powley v. Equitable Life Assur. Society, 257 App. Div. 324; Hundert v. Commercial Travelers Mut. Accident Assn., 244 App. Div. 459; Matter of

      Rhoades v. Miller Bros. Construction Co., 244 App. Div. 850; Shipman v. Protected Home Circle, 174 N. Y. 398; Fowler v. The Mutual Life Ins. Co., 4 Lans. 202.)

      Werner H. Pig or s, Nathan M. Medwin and Henry Weiss for respondents.
    I. The burden of proving suicide is upon the defendant. (Cramer v. Metropolitan Life Ins. Co., 261 App. Div. 1018; Gardner v. Northwestern Mut. Life Ins. Co., 246 App. Div. 868, 272 N. Y. 592; Martorella v. Prudential Ins. Co., 268 N. Y. 586.) II. The evidence fairly presented questions of fact for determination by the jury. (Martorella v. Prudential Ins. Co., 268 N. Y. 586.) III. The verdict is in accord with the weight of evidence. IV. Proof to defendant required by the policy was established. (McCaffry v. Metropolitan Life Ins. Co., 172 Misc. 252, 261 App. Div. 452, 287 N. Y. 704; Strang v. Prudential Ins. Co., 263 N. Y. 71; B. L., T. & S. D. Co. v. K. T. & M. M. A. Assn., 126 N. Y. 450.) V. Upon the evidence the jury might and did reasonably find that the deceased was without intention of suicide. That he may have accidentally and without suicidal intent have overdosed himself does not permit the defendant to escape liability. (Mansbacher v. Prudential Life Ins. Co., 273 N. Y. 140.)
   Desmond, J.

Plaintiff Tillie Wellisch is the widow, and the other two plaintiffs are the surviving children, of Morris Wellisch. The suit is brought to recover benefits promised to them in a life insurance policy on the life of Morris Wellisch, issued by defendant insurance company, of which company the insured was an employee during his life. The answer asserts that the insured died by suicide and points to a policy provision which says, if the insured shall die within two years from the date of issue of this policy by self-destruction while sane or insane, the amount payable herein shall be limited to the premiums paid hereon.” The insured died within two years from the issuance of that policy and the company has tendered to plaintiffs an amount equal to the premiums paid on the policy during the life of the insured. At the end of the trial defendant moved for a directed verdict in its favor on the ground that it had produced “ sufficient evidence to overcome a presumption against suicide ”. The motion was denied and the jury found for plaintiffs. The Appellate Division affirmed the judgment, declaring: there was a clear-cut issue of fact which the jury-decided in plaintiff’s favor and we cannot say upon this record that the verdict was against the weight of the evidence ”. (266 App. Div. 1046.) We granted defendant’s motion for leave to appeal so that we might examine into defendant’s contention that the evidence of suicide is so conclusive as to overcome the presumption against suicide and to leave no reasonable basis for a jury finding of accidental death.

On the afternoon of May 11, 1942, the insured was found in a comatose condition sitting in his automobile which had left the highway and crashed into a tree. The road was dry and the weather clear. He was taken to a hospital and died a few days later. Medical experts ascribed his death to barbitrate poisoning, drawing that conclusion from the discovery in his body after his death of a drug known as seconal, and from other indications. Seconal is one of the group of drugs known as barbitrates. When taken in small doses it has an anaesthetic or sedative effect. In larger doses it brings on unconsciousness which sometimes terminates in death. It is prescribed and administered by physicians. The actual quantity of seconal found in the body of insured was less than a grain but the proof shows that the drug is largely absorbed or assimilated by the body or excreted therefrom. Detection of the small amount of seconal in the organs, after the death of insured, was said to be an indication that a large quantity had been taken. There was, however, no definite proof in the record as to just how large that quantity was. One of the experts said that the maximum dose which could be taken without fatal effect’ was from 10 to 50 grains. The insured suffered from headaches and, according to some of the witnesses, had been in the habit of taking seconal capsules to relieve his suffering. These he customarily borrowed from an aunt of his wife who lived with the insured and his family. The aunt herself, took seconal capsules for some purpose and had a doctor’s prescription for them. Earlier on the day on which the insured was found in his car, he had gotten six or eight capsules from the aunt and had told her that he would have her prescription filled at a nearby pharmacy. The pharmacist testified that the prescription was refilled at the request of the insured and that the insured took away with him the new box containing twenty-four capsules. The wife of the insured said that her arrangement with her husband was that the new box was to be left at the pharmacy and that she was to call for it later but that she never did call for it because she was notified of her husband’s illness before she could go to the pharmacy.

Defendant insists that this evidence as to the seconal capsules, plus the other proof which we are about to describe, conclusively proved suicide. The insured, who was a solicitor of life insurance business and a collector of premiums for defendant, came home about noon, as was his custom, on May 11,1942. He complained of a headache, was in a nervous and irritable mood and did not finish his noonday meal. Later he became annoyed by some activities of his children and slapped one of the children with the result that the child fell, broke a glass which he was carrying, and was cut. Some commotion followed and the aunt of the insured’s wife thought it appropriate to call the police, which she did. The wife testified that when the police arrived they were told' by the insured that it had been a mistake to call them and that the whole difficulty had been ironed out. One of the police officers testified that Mrs. Wellisch told the police that she and her husband had been having trouble, that she' wanted her husband arrested and that she was going to get judgment in an action for separation which, according to the police, she stated she then had pending. The police officers admonished the couple not tó call the police again but to take their troubles to court, whereupon, according to the officer, the insured said: “ Well, you won’t come back, she won’t be bothered with me any more ”. This remark is pointed to by defendant as a statement of Wellisch’s intent to kill himself. Before that incident insured had announced to his family that he was going on a fishing trip that day but they, according to Mrs. Wellisch, had dissuaded him from it, because of his headache. After the police had left, again according to Mrs. Wellisch, she and her aunt told the husband that since he was so upset it would be well if he would go out for awhile. Mrs. Wellisch testified that her husband then got together his fishing equipment, fishing clothes, lunch and a jug of water and that she helped her husband put those things into his car. He drove away, ostensibly on his way to his favorite fishing spot. It is said that the road he tool" and on which he was later found was on the route to that fishing place. In his car the State Troopers found written on a scrap of paper in the handwriting of insured and signed with his name, the following: “ All life is only one dark hour. M.W. The best thing in this hapless strife is the end of life.” Appellant insists on calling this the- “ suicide note ” but surely it is not an unequivocal threat of self destruction. The wife swore that her husband had been in the habit of writing what she called poetry, and that she at times had typed and preserved for him some of his writings. There is proof that insured was at times an irritable and quarrelsome person but there is other evidence that he was fond of his family, had various hobbies, stood high in the estimation of his employer and that his earnings for a period shortly before his death were higher than he ever before had enjoyed. A few days before he left home on his last journey his -wife at his request had written letters of inquiry to several vacation resorts asking whether cabins with fishing and swimming facilities were available for insured and his two small sons. His vacation was due to begin on July 2nd and the wife testified that he had discussed with her his plans for a vacation trip, apparently including her in those plans.

The Trial Justice charged the jury that plaintiffs were “ entitled to recover on due proof of the death of the deceased, unless you find from the evidence that defendant has established to your satisfaction by a fair preponderance of the evidence that Morris Wellisoh committed suicide or self destruction.” He called to the jury’s attention that there is a presumption against suicide but told them that the presumption might be overcome not only by verbal testimony but by reasonable deductions from the facts as you find them to be established.” Before they might find a verdict in favor of defendant, said the Justice, they ‘ ‘ must be satisfied that deceased came to his death by self destruction or suicide, and that regardless whether he was sane or insane.” Finally he told them that, since this was an action on a life insurance policy and not on an accident insurance policy (see Ostrander v. Travelers Ins. Co., 265 N. Y. 467), there was no burden on plaintiffs to show that the death came about through accidental, rather than suicidal, means.

It was conclusively shown that Morris Wellisch died from an overdose of seconal but a question was presented as to whether he took the extra capsules by mistake or with the intention of killing himself. All the proof was' circumstantial. There was no forthright threat of suicide. The man’s statement to the police and his scribbled thoughts on life and death Avere no more than equivocal. There was an innocent reason for the possession ánd use of the drug, in some quantity. Reasonable men, we think, might reasonably come to one or the other answer to the question of fact sent to the jury by the Trial Justice. The Appellate Division Avas unanimous in its view that the evidence not only permitted a negative answer to the question as to suicide, but that such an ansAver was not against the weight of evidence. We are forbidden in such cases to reweigh the opposing proofs.

We add a comment on the “ presumption against suicide ” about Avhich much is said in these briefs. That presumption is not one of those that takes the place of evidence so as to create a question of fact even when all the real proof is the other way. (N. Y. Life Ins. Co. v. Gamer, 303 U. S. 161, 171.) Nor is it the sort of presumption ” that serves only to shift the burden of proof and disappears from the case as soon as evidence to the contrary is offered. (See People ex rel. Wallington Apartments v. Miller, 288. N. Y. 31.) It is really a rule or guide for the jury in coming to a conclusion on the evidence. Suicide ‘ ‘ is contrary to the general conduct of mankind ” (Mallory v. The Travelers’ Ins. Co., 47 N. Y. 52, 54-55) and the presumption against it is one of. the ‘ judicial recognitions of what is probable ” (Thayer, Preliminary Treatise on Evidence, p. 334; see 9 Wigmore on Evidence [3rd ed.] § 2570). Juries are authorized to take heed of the truth. draAvn from general human experience, that death by suicide is an improbability, that most men cling to life. The presumption against suicide ” means that when death by violence is shoAvn and an inference must be draAvn by the jury as to suicide or not, then the jury should in justice and good conscience draAV the inference of accident, not suicide. This presumption is one aspect of the broader rule that where evidence is susceptible of two constructions, the construction Avhich does not imply criminality or moral turpitude is to be favored. (Berkey v. Third Avenue Railway Co , 244 N. Y. 84, 92; Starr v. Peck, 1 Hill 270, 272.) Of course, that does not mean that there should be a finding against suicide when the circumstances are wholly inconsistent with a finding of accident and there is no reasonable hypothesis available except that of suicide. (See, for instance, De Gogorza v. Knickerbocker Life Ins. Co., 65 N. Y. 232.) It means only that a fair question of fact as to accident or suicide should be answered: “ accident ”. When in such a case the jury gives-that answer, then no question of law is left for us. For example, in Martorella v. Prudential Ins. Co. (268 N. Y. 586) we affirmed a judgment for the beneficiary despite proof that the insured, a hospital nurse who died from the effects of bichloride of mercury poisoning, told a physician before her death that she had taken the tablets because she wanted to die. There was much more in that case to suggest suicide but there were, also, circumstances that pointed the other way. We held that it was the jury’s business to resolve the doubt.

Defendant’s motion to dismiss on the ground that plaintiffs had failed to comply with the policy provision requiring that due proof of death be furnished to the-company “ on the company’s prescribed forms ”, was properly denied.

The judgment should be affirmed, with costs.

Lehman, Ch. J., Loughban, Rippey, Lewis, Conway and. Thacheb, JJ., concur.

Judgment affirmed.


author: Rippey, J.

text:
    In the Matter of the Will of Arthur B. Waring, Deceased. Cornelia H. Leslie et al., Appellants; Matteo Spalletta, as Special Guardian for Paul W. McCabe, an Infant, Respondent.
    Submitted June 7, 1944;
    decided July 19, 1944.

      Jesse Hoyt and James N. Vaughan for appellants.
    I. A testamentary devise or bequest is an offer to the beneficiary and the gift does not vest until accepted. (Albany Hospital v. Albany Guardian Society, 214 N. Y. 435; Helvering v. Grinnell, 294 U. S. 153; Matter of Lansing, 182 N. Y. 238; Matter of Johnston, 164 Misc. 469; Matter of Wolfe, 89 App. Div. 349, 179 N. Y. 599; Matter of Clarkson, 137 Misc. 741; Lehr v. Switzer, 213 Ia. 658; Matter of Merritt, 155 App. Div. 228.) II. As the bequest to the primary remainderman has not vested, the secondary or alternate bequest to appellants should take effect in order to carry out the general plan of the testator’s will. (Williams v. Jones, 166 N. Y. 522; Albany Hospital v. Albany Guardian Society, 214 N. Y. 435; Matter of Jacob, 165 Misc. 280; Ranken v. Janes, 1 App. Div. 272; Matter of Selner, 261 App. Div. 618, 287 N. Y. 664; McLean v. Freeman, 70 N. Y. 81; Matter of Fordham, 235 N. Y. 384; U. S. Trust Co. v. Hogencamp, 191 N. Y. 281.)

      Matteo Spalletta, special guardian for Paul W. McCabe, an infant, respondent.
    In his will, testator specified the one and only event on the happening of which he desired the descendants of Cornelia B. Hoyt to take. The only meaning which is implicit in the language used by the testator is that he did not wish those descendants to take unless the stated event occurred. Concededly, that event did not occur. If, under the guise of construction, the renounced portion of the legacy is to pass to the descendants of Cornelia B. Hoyt, the result will mark a depart-are from the well-established principle that a court may construe a will but it may not construct a new one, even for .the purpose of avoiding intestacy.
   Rippey, J.

Arthur B. Waring died July 2,1932, leaving him surviving as his only heirs at law and next of kin his widow, three sisters, one brother, the descendants of a deceased sister and the descendants of a deceased brother. His will, giving every evidence of being a carefully prepared instrument and disposing of a large estate, was admitted to probate on September 2, 1932. Letters testamentary were issued to the executors therein named who immediately qualified and entered upon the discharge of their duties as such. Later, letters of trusteeship of the several trusts created by the will were duly issued to them and as such they entered upon and continued to exercise their duties. The record fails to disclose that any accounting-proceeding of their transactions as executors or trustees was pending at the time of the Surrogate’s order of November 4", 1943, or that any such proceeding by or against them had ever been instituted.

By the terms of the will the entire residuary estate was put in trust for the use of the wife of the testator for life. Upon her death, the testator directed distribution of the remainder of his estate, after various legacies were paid therefrom and certain minor trusts were set up for the benefit of donees other than appellants, to his three sisters, Janet Waring, Susan B. Waring and Cornelia B. Hoyt, in equal shares. He provided, however, that in the event that any one of his sisters should die before the death of his widow leaving descendants her surviving, the share which would otherwise have gone to her should pass to her descendants in equal shares per stirpes but, if she should leave no descendants, such share should pass upon the death of his wife in equal shares to the survivor or survivors of the three named sisters. The provisions of the will by which such disposition of his residuary estate is made are specific, clear and unambiguous.

The widow died April 23, 1942. Prior-to that date, Janet Waring died without leaving descendants' and the devise and bequest of a one-third share of the residue of the estate lapsed and became a part by the terms of the will of the estate passing to Susan B. Waring and Cornelia B. Hoyt, the surviving sisters of the deceased, in equal shares. Susan B. Waring and Cornelia B. Hoyt were each living at the death of the widow and were the only persons, except certain specific donees other than appellants, to whom any part of the residuary estate was bequeathed and devised. Accordingly, upon the death of the widow the entire net residuary estate of the deceased became vested in possession and enjoyment in Susan B. Waring and Cornelia B. Hoyt in equal shares.

It is said that the share therein of Cornelia B. Hoyt amounts to about $250,000. The purported renunciation by her is of a portion of the gift amounting to $600 and she says she desires to reserve the right to accept or renounce the balance of the gift. Whether the gift consists wholly of realty or wholly of personalty or in part of both, we are not advised. There is no other bequest or devise to Cornelia B. Hoyt contained in the will. The gift in question is inseparable and is presumed to be beneficial and accepted and accordingly vested. Nothing to the contrary was decided in Albany Hospital v. Albany Guardian Society (214 N. Y. 435, 440, 443). It was there said that while there is a presumption of acceptance in the case of a grant or devise beneficial on its face, this presumption is not conclusive, and it is settled beyond any opportunity for controversy that a devisee may refuse to accept, and renounce a provision in his favor and prevent it from being effective.” The question of whether under circumstances such as are here involved a renunciation or disclaimer can be made of a mere modicum of an inseparable gift or of a part thereof or must be made of the whole if it is to be of any legal effect at all, we reserve to a time when the question is properly raised upon a record adequately presenting the question and our determination of it is necessary to a decision of the case.

This proceeding was brought by the three children of Cornelia B. Hoyt under section 145 of the Surrogate’s Court Act to procure a construction of the will such as would require the trustees to pay to them in equal shares the renounced part of the residuary estate on the theory that they were substitutional legatees and devisees under the will. A gift may be said to be “ substitutional ” only where the testator provides in his will that someone will take the gift in the event of the original beneficiary dying before the period of distribution (69 C. J., Wills, § 1356). One taking by substitution can take only under the terms of the will (Graham v. Graham, 66 Penn. St. 477) subject to the same conditions as are attached to the original gift. Substitutional donees were named in the will in the event of the death of Mrs.- Hoyt before the death of the ■widow. That event did not occur. If aid should be given to the petitioners by the court, it would effectually thwart the purpose of thé testator. Mrs. Hoyt may, perhaps, reject her brother’s bounty. To accomplish that, she cannot say for her brother, at her own election, that he extended that same bounty to her children to whom she may wish the property ultimately to pass without the burdens resting upon them as her heirs and legatees attached. The test is, could those children take at the death of the widow under any contingency if their mother was then alive? The answer is, “ No.” The gift was specifically to Mrs. Hoyt, their mother, and not to them. Neither the mother-nor the courts could make a new will for the testator by some act of the mother alone.

The effect of the decision below may result in the testator dying intestate as to the part of his estate Mrs. Hoyt has undertaken to renounce (Wright v. Wright, 225 N. Y. 329, 340). It cannot be presumed that the- testator contemplated renunciation of the gift by Mrs. Hoyt and whether he should die intestate by her act cannot enter into or affect a construction of the will, We need not therefore pause to' give any consideration to the rule that a testator is presumed not to have intended to die intestate. The legal effect of the attempted renunciation if-it had any validity at all is not a necessary part of a decision of this case.

Only by parties interested nnder the will of a testator may construction be sought. The Surrogate properly dismissed the proceedings since the petition showed on its face that the petitioners were not interested parties within the meaning of section 145 of the Surrogate’s Court Act.

The order should be affirmed,' with costs to the respondent payable out of the fund.

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

Order affirmed, etc.