author:
      Per Curiam.
     Rippey, J.

text:
    Elizabeth B. Gardner, an Infant, by Charles H. Gardner, Her Guardian ad Litem, Respondent, v. State of New York, Appellant. Charles H. Gardner, Respondent, v. State of New York, Appellant.
    (Claim No. 24499.)
    (Claim No. 24500.)
    Argued June 1, 1939;
    decided July 11, 1939.

      John J. Bennett, Jr., Attorney-General (LeonfM. Layden and James H. Glavin, Jr., of counsel), for appellant.

      Charles H. Gardner and J. T. Gardner for respondents.
   Per Curiam.

The Appellate Division found that failure to instruct the infant claimant pursuant to the customary method was the proximate cause of her injuries. We think this finding is in accord with the weight of the evidence. The question whether the head stand exercise was inherently dangerous to young children, even when properly instructed, is not presented by the record.

In each action the judgment should be affirmed, with costs.

Rippey, J.

(dissenting). The questions presented for review in these appeals are whether the findings made by the Appellate Division are supported by the weight of the evidence and whether the alleged negligence of State employees was the proximate cause of the accident.

The only claim of negligence on the part of the faculty of Cortland State Normal School is that Elizabeth Gardner, an eleven-year old pupil of the seventh grade in that school, was not given the proper preliminary and strengthening exercises before she was directed in a class in physical training to stand on her head and that a competent teacher was not provided to supervise the performance of that feat.

Another theory of the case is urged here for the affirmance of the decision of the Appellate Division, That is that the stunt of standing on one’s head is inherently dangerous, especially for an eleven-year old girl. But neither the Appellate Division nor the Court of Claims made any finding to that effect. This theory was not urged in the Court of Claims, but the opinion of the Appellate Division indicates that the alleged dangerous character of the stunt may have been the main basis of its decision. It is well settled that one cannot try his case on one theory in the trial court, and be heard on another theory on appeal after his defeat (Racine v. Morris, 201 N. Y. 240; Porter v. Municipal Gas Co., 220 N. Y. 152) and that the Appellate Division cannot adopt a new theory of an action for the parties¿(Phelps-Stokes Estates, Inc. v. Nixon, 222 N. Y. 93). No evidence was taken concerning the inherent danger in performing this stunt and no finding was requested concerning this alleged fact. An affirmance here may not be based on a holding that a head stand ” is inherently dangerous.

At the trial the claimants introduced in evidence a syllabus adopted by the Board of Regents as the standard method of teaching physical training in elementary schools throughout the State. This syllabus described in detail the various acrobatic stunts to be performed by children beginning with the first grade and continuing throughout the remaining elementary grades. Beginning in the fourth grade, according to the syllabus, after they had been instructed in less difficult feats, pupils were to perform the head stand which is described in this manual as follows: “ From a squat stand place both hands on the mat shoulder width apart, fingers spread pointing sideward. Lean forward placing the forehead on the mat midway between the hands about 12 to 15 inches in advance of them. The hands and head should from a triangular base. Raise the bent legs slowly from the floor so that the head, body and legs form a continuous straight finé.” Claimants also produced an expert in physical training who testified that the standard teaching method and practice was to give children exercises which would strengthen their arms and teach them to balance themselves in the inverted position before they were required to do the head stand. There is not a scintilla of evidence in the record to show that the infant claimant was not given such strengthening and balancing exercises before she was required to perform the head stand. In fact, Elizabeth Gardner herself testified that during her courses in physical training in the fifth and sixth grades and up to the time of her accident in January in the seventh grade she had been instructed in the head stand and other similar stunts. Much is made of the fact that these strengthening and balancing exercises, according to the syllabus, were to begin and be continued during the first, second and third grades, and that, in her case, they occurred only during the fifth, sixth and part of the seventh grade. The distinction is absurd. . Clearly a child in his -ninth, tenth and eleventh years is more fitted for and adept at stunts by reason of his greater mental and physical development and muscular coordination than a child in his sixth, seventh and eighth years, and the fact that the preliminary training was a few months shorter when given in the fifth, sixth and seventh grades, than it would have been if given throughout the first, second and third grades, certainly can have no bearing on this unfortunate accident or spell out negligence on the part of the faculty of this normal school.

The other claim of negligence is that the faculty of Cortland State Normal School failed to provide a competent and qualified teacher to supervise the instruction in stunts of the infant claimant. Paragraph C, page 10, of the syllabus provides as follows:

“ Qualifications of teachers. The requirements for teaching physical education shall consist of the completion of a four-year approved high school course followed by three years of academic and professional training as approved by the Commissioner of Education.”

The injury resulting to the infant claimant by reason of the performance of the head stand occurred in a regular class in physical training under the general supervision of an admittedly competent and qualified teacher. The class was divided into squads of from six to ten pupils under the immediate direction of normal students who were practice-teaching. The young lady in charge of the infant claimant’s group of nine or ten children in her grade was in her third year of the four-year normal school course, and her pupils were ill the foyer or lobby of the gymnasium. Other groups were inside the gymnasium proper which was separated from the foyer by two double doors. The State’s evidence shows uncontradictedly that the faculty member in charge of the partice-teachers was inside the gymnasium, engaged in going from group to group to supervise their instruction and that he had been in and out of the foyer frequently during the day, although he was temporarily absent at the time when Elizabeth Gardner was being instructed. Negligence cannot be imputed to him because he was not at a particular spot at every instant of time (Curcio v. City of New York, 275 N. Y. 20). It has been found by the Court of Claims and affirmed by the Appellate Division (Finding No. 8, Court of Claims) that: “ In said syllabus descriptive of head stand for pupils it was stated: ‘ classes may be divided into squads under pupil leadership.’ ” Thus, the standard of care as attempted to be set up by the Board of Regents permitted groups to be under the general supervision of a qualified teacher but under the immediate direction of students. This is exactly what we have in this case, and although such a standard set up by an administrative board is not conclusive on the courts as being due care, it is evidence to be given great weight in the decision of what constitutes due care under these circumstances.

But, even assuming a qualified teacher was not present and in charge of the class in which the infant claimant was injured, under the evidence in this case, that cannot be held to have been the proximate cause of the accident. Elizabeth Gardner testified in detail to the position she took on the mat and it conformed strictly to the details of the stunt contained in the syllabus, and she testified further to the effect that her injury occurred when she was in the exact position she was supposed to be in according to her instructions, which were those contained in the syllabus. No matter how competent or qualified the teacher, she was required to follow the syllabus, and, if she had followed the syllabus, as the practice-teacher did, the accident and injury would have resulted anyway. Although I do not agree that there was no competent or qualified teacher in charge, the competence or qualifications of the teacher had no proximate bearing on the occurrence of the accident or resulting injury.

The judgment of the Appellate Division should be reversed and the judgment of the Court of Claims affirmed with costs.

Crane, Ch. J., Lehman, Hubbs, Lotjghran and Finch, JJ., concur in per curiam opinion; Ripfey, J., dissents in opinion; O’Brien, J., taking no part.

Judgments affirmed.


source: Caselaw Access Project

author: Rippey, J.

license: Public Domain

text:
    Abraham Glasner, Doing Business as North American House and Window Cleaning Company, Appellant, v. Regina N. Bressler, Individually and Doing Business as American Window Cleaning Company and as Administratrix of the Estate of Simon A. Bressler, Deceased, Respondent.

      Argued June 1, 1939;
    decided July 11, 1939.

      Samuel Hart for appellant.

      Albert B. Schanzer and Bernard S. Levine for respondent.
   Rippey, J.

This action is based upon the alleged breach by defendant of a contract between the parties made as an incident to their membership in The Accident Prevention and Safety League, Inc., a mutual welfare organization, all of whose members are signatories thereto, wherein it is provided “ that the customers of each constituent member have a monetary value by way of good-will and that there is a definite market in the trade for the purchase and sale of such customers’ account ” and that “it is further agreed by and between all of the members of the League that they will not, during the term of this agreement, take any customer or customers belonging to any other member of the League,” etc. It is alleged that the defendant solicited and procured customers in the window cleaning business which belonged to the plaintiff and intended to continue the practice. An injunction was sought with damages for the breach. Defendant counterclaimed on the ground that plaintiff had procured, in violation of his obligation, customers belonging to her and demanded relief similar to that which plaintiff sought: Special Term made findings and awarded judgment in favor of the plaintiff, granting an injunction and awarding damages, and dismissed the counterclaim. Upon appeal, the Appellate Division, by a divided court, reversed the findings and judgment of the Special Term, made new findings, dismissed the complaint and awarded judgment to the defendant upon the counterclaim. We are to review the facts as found by the Appellate Division and ascertain whether they are sustained by the weight of the evidence. (York Mortgage Corp. v. Clotar Construction Corp., 254 N. Y. 128, 134.) Decision of the issues involved requires a determination as to which party, if either, illegally procured customers belonging to the other.

Up to 1931 plaintiff was engaged in the window cleaning business under the trade name and style of “ North American House and Window Cleaning Company ” and defendant’s husband, now deceased, was doing business under the name of “ American Window Cleaning Company.” They then organized the Gramercy House and Window Cleaning Corporation and, in consideration of the issuance to each of one hundred shares of the capital stock thereof, they transferred to the corporation “ all of the good will, assets, fixtures, routes, machinery, customers, accounts receivable of the window cleaning businesses owned by us and known respectively as, North American House and Window Cleaning Company, and, American Window Cleaning Company, ” except that “it is understood however that the trade names filed by us individually such as North American House and Window Cleaning Company and American Window Cleaning Company are to remain our respective individual property, but, however, we are to refrain from using the said names, and entering into competition with the corporation until such a time when the corporation is no longer engaged in business.” Thereafter the two men owned all of the stock of the corporation and each received equal salaries and equal dividends. Their respective bank accounts were transferred to the corporation. It was determined that the monetary value of Bressler’s customers exceeded the monetary value of Glasner’s customers by the sum of $625 and that sum was paid by the latter to Bressler. The two businesses were carried on as a corporate business until the death of Bressler, which occurred on March 8, 1937. Plaintiff and defendant, Bressler’s widow, attempted to continue the corporate business but were unable to agree and they finally decided to divide the business of the corporation equally between them, On March 31, 1937, they entered into an agreement whereby they agreed to be bound by the decision of four persons named therein as to a division of the business on the following basis: “ The division is to be equal in so far as the monetary value of the routes are concerned and in the event ¡Regina N. Bressler can produce an agreement in writing signed by Abraham Glasner and Simon Bressler, the deceased, calling for the division of routes in the event of a dissolution in a different manner than that set forth in this agreement, then and in that event the routes are to be divided pursuant to the said other agreement.” To carry out the foregoing, a division was made according to the terms of the agreement by the persons selected and named whereby the customers of the corporation and their accounts, based on the monthly income therefrom, were divided up, there being assigned to the plaintiff customers whose monthly monetary value was $942.05 and to defendant customers whose monetary value was $942.25. There still remained in the corporation as assets to satisfy claims of creditors not exceeding five hundred dollars upwards of twenty-five hundred dollars cash in bank.

Defendant sought to avoid the agreement for division of customers on the ground that defendant’s signature was procured through fraud and misrepresentation. There was no evidence to sustain such a claim. Defendant was an experienced business woman and had been engaged in the particular business at hand for many years and her own attorney was present and participated in the preparation of the agreement at the time it was prepared and signed. A further attack was made upon the agreement on the ground that the defendant had produced an agreement in writing signed by the plaintiff and heríate husband, calling for the division of the routes in a different manner than had been made. Defendant claimed that the agreement which she produced was that one above specified wherein she asserted that the reservation of trade names by the several parties, in the event that the corporation should cease to do business, embraced and carried with it the customers doing business with Glasner and Bressler, respectively, at the time they transferred their businesses to the corporation. Conclusive and uncontradicted evidence was produced to the effect that defendant referred to another different written agreement at the time that she executed the agreement of March 31, 1937. No other written agreement was produced. Bad her claim otherwise any merit, a simple reading of the agreement first above mentioned between Glasner and Bressler, which was plain and unambiguous, clearly indicates that, in the event the corporation ceased to do business, the trade names only were to be retained by the individuals theretofore owning and using them.

After careful and full examination of the record we are satisfied that the division of customers was made in accordance with the agreement between the parties. It is part of the customers assigned upon that division to the plaintiff which the defendant concededly solicited and procured. The plaintiff was entitled to the benefit of his agreement made with the defendant on April 8, 1937, when the parties signed the contract above referred to provided by The Accident Prevention and Safety League, Inc., and to an injunction restraining the violation thereof. The Special Term referred the question to an official referee to report on damages; he fixed the amount of damages properly to be awarded and his report was confirmed. There was ample evidence to sustain his report and we are unable to find that he adopted any incorrect rule in fixing the amount. No question was raised by the Appellate Division as to the amount or as to the propriety of money damages if plaintiff was entitled to recovery at all. We think the weight of the evidence sustains the findings of the Special Term.

In view of our opinion that the parties are bound by the written instrument, which is clear and unambiguous in its terms, and to the division of customers in the manner provided and agreed to, it is unnecessary to consider other questions which have been raised upon the appeal. The division was voluntary and as between the parties it is immaterial that usual proceedings for dissolution of the corporation were not followed.

The judgment of the Appellate Division should be reversed and that of the Special Term affirmed, with costs in this court and in the Appellate Division. (See 281 N. Y. 673.)

Crane, Ch. J., Lehman, Hubbs, Loughran and Finch, JJ., concur; O’Brien, J., taking no part.

Judgment accordingly.


author: Per Curiam.

text:
    The People of the State of New York, Respondent, v. Scott Wilkins, Appellant.
    Submitted June 20, 1939;
    decided July 11, 1939.

      Robert J. Sullivan for appellant.

      David L. Brunstrom, District Attorney (Edwin G. O’Connor of counsel), for respondent.
   Per Curiam.

Defendant was tried before a justice of the peace of the town of Arkwright, Chautauqua county, and a jury on the charge of malicious mischief in violation of section 1425 of the Penal Law, convicted and sentenced. He appealed to the County Court, where the judgment of conviction was affirmed. The case reaches us by permission of a judge of this court granted under the provisions of subdivision 3 of section 520 of the Code of Criminal Procedure.

In the return of the justice on the appeal to County Court on January 31, 1939, the justice states: “ That none of the evidence was written down either by the Court or anyone else in his behalf and that all that was written during the trial was an objection taken by the defendant’s counsel which read as follows: Object to sworn statement, asking about lying about statement.” A further return was ordered and thereupon filed on April 20, 1939, in which the justice attempted to state from recollection the names of the witnesses sworn and the facts to which they testified. It is the duty of justices to keep, or have kept under their direction, minutes of the testimony taken upon trials, to the end that their determinations as to the facts may be reviewed upon appeal.” (People v. Giles, 152 N. Y. 136, 140. See, also, People v. Schenkel, 256 N. Y. 539.) The returns here fail to state sufficiently the evidence upon which the conviction was obtained. The question was adequately raised in the court below. A further return could not correct the defect.

The judgments should be reversed and a new trial ordered.

Crane, Ch. J., Lehman, Hubbs, Loughran, Finch and Rippey, JJ., concur; O’Brien, J., taking no part.

Judgments reversed, etc.


text:
    Robert S. Buttles, as Receiver of Seaboard Trading Company, Appellant, v. Albert L. Smith et al., Individually and as Copartners under the Name of Edward B. Smith & Co., et al., Respondents.

      Argued May 29, 1939;
    decided July 11, 1939.

      Bertram F. Bongard and Douglas H. Thayer for appellant.

      Ralph M. Carson and John D. Hyde for Albert L. Smith et al., individually and as co-partners under the name of Edward B, Smith & Co., respondents.

      Frederick H. Wood and George M. Billings for E. Allan Reinhardt, individually and as a member of the firm of Gilbert Eliott and Company, respondent.

      E. H. Sykes for Hans S. Rothschild et al., individually and as co-partners under the firm name of Sutro Brothers, respondents.
   Rippey, J.

It appears that one Irving G. Anness recovered a judgment in the Supreme Court of New York county on June 5, 1933, against the Seaboard Trading Company, a domestic corporation, for $16,429.40 on an obligation of the latter due and payable on September 2, 1926, which the corporation then refused to pay. An execution was thereupon issued on the judgment and returned unsatisfied. Thereupon, on October 14, 1933, an action was brought by the judgment creditor for the sequestration of the property of the corporation and for the appointment of a receiver. It appeared that Edward Born and Linda Born were the only officers, directors and stockholders of the company and had departed from the State of New York and had not since returned. An order was thereupon made appointing Thomas F. Curley as temporary receiver, who took possession of the books and papers of the company on August 15, 1934, and it was then first discovered by him and by Anness that various alleged fraudulent transfers of the property of the company to the defendants and later referred to had taken place. Final judgment was entered on July 1, 1937, sequestering property of the corporation and appointing Curley as permanent receiver, who thereupon qualified and entered upon the discharge of his duties as such. He brought the present action as an incident to the sequestration proceedings by personal service of the summons on various defendants in January and February, 1938. On January 12, 1939, an order was made substituting Robert S. Buttles, the present plaintiff, as permanent receiver in the place of Curley, who resigned.

So far as we are concerned upon the present appeals, three partnerships, i. e., Edward B. Smith & Co., Gilbert Eliott & Co., and Sutro Bros. & Co. (sued as Sutro Bros.), are involved individually and as copartners as parties defendant. All of the defendants are stockbrokers and all parties served were either residents of or continuously present within the State of New York since 1926 and available for service of process and all transactions set out in the complaint took place within the State of New York.

Three separate causes of action are set up in the complaint against each partnership and the individual members thereof, i. e., (1) under section 15 of the Stock Corporation Law (Cons. Laws, ch. 59), (2) under section 274 of the Debtor and Creditor Law (Cons. Laws, ch. 12), and (3) under subdivision 5 of section 60 of the General Corporation Law, (Cons. Laws, ch. 23), by suitable allegations which need not here be repeated in detail. The object in each case is to set aside alleged fraudulent diversions of corporate funds by the president of the corporation and to cause the defendants to account for the property received by them and to return it. It is alleged that there was transferred by the Seaboard Trading Company, in payment of the personal obligations of Born, the president, corporate funds (1) between November 21, 1927, and May 1, 1929, to Edward B. Smith & Co., $22,404; (2) between September 26, 1927, and June 3, 1929, to Gilbert Eliott & Co., $87,555; and (3) between July 26, 1927, and August 3, 1927, to Sutro Bros., $8,269.78, with full knowledge by defendants that the sums so transferred were the funds of the corporation for which the Seaboard Company received no consideration, and in fraud' of the rights and interest of the judgment creditor and without his knowledge or consent.

There can be no doubt that, in whatever aspect the case may be considered, the action is one in equity at the instance of Anness as judgment creditor as an incident and as ancillary to the sequestration proceeding wherein he is seeking to impound corporate assets out of which his judgment may be paid. He might have brought the action in his own name. He did not see fit to do so but elected to sequester the property of the corporation under article 7 of the General Corporation Law. In such an action, the court might at any time during its progress appoint a receiver, but he could not pursue that remedy until the legal remedy provided by statute by execution had been exhausted (General Corp. Law, § 70; Geery v. Geery, 63 N. Y. 252; cf. Hunting v. Blun, 143 N. Y. 511). In such an action there is no specific requirement that proof of insolvency need be alleged or shown (High on the Law of Receivers [4th ed.], § 18), but if, in any case under the statutes here involved, such proof is necessary, the allegation of the return of the execution nulla bona is sufficient. The right to sequestration is statutory and is an extention or enlargement of the general jurisdiction of courts of equity over corporate affairs. In the present action an accounting is alleged to be necessary and is necessary. Upon the issues raised upon these motions, it is no concern of the defendants whether the corporation had creditors other than Anness. There is nothing in the record to indicate that there are other creditors of the corporation and it must be assumed that there are none except Anness and the fact that the suit is brought by the receiver in the sequestration proceeding rather than by the creditor individually is of no materiality (Whalen v. Strong, 230 App. Div. 617; Hitz v. Garfinkel, 246 App. Div. 728; Bernheim v. Burden, 253 App. Div. 232; Buckley v. Stansfield, 155 App. App. Div. 735; affd., 214 N. Y. 679; Feigenbaum v. Narragansett Stables Co., 127 Misc. Rep. 114; affd., 245 N. Y. 628). At the moment we are not concerned with the question as to whether recovery may be had over and above the amount of the creditor’s claim or what would become of any surplus recovery, if permissible. Since the moneys of the corporation are alleged to have come fraudulently into the hands of the defendants, the action is an action for an accounting in equity and for a return of the funds. It is not an action at law for damages sustained in consequence of willful or negligent acts either of those intrusted with the funds in behalf of the corporation or of defendants. The distinction between the two types of action is clear (People v. Equitable Life Assur. Society, 124 App. Div. 714; Asphalt Construction Co. v. Bouker, 150 App. Div. 691; aff’d 210 N. Y. 643). The assets of the corporation constitute a fund for the payment of its debts (Darcy v. Brooklyn & New York Ferry Co., 196 N. Y. 99) and creditors may follow them into whatever hands they may be illegally transferred (Stock.Corp. Law, § 15; Sherwood v. Holbrook, 178 App. Div. 462). Such a conclusion applies to all three .types of action set up in the complaint.

Where an action is brought under section 60 of the General Corporation Law or section 15 of the Stock Corporation Law, no cause of action accrues to a creditor, with certain exceptions which need not be considered here since none of them have been alluded to by respondents, until judgment has been obtained and execution returned unsatisfied (Levy v. Paramount Publix Corp., 265 N. Y. 629), and any statute of limitations did not commence to run until the cause of action accrued to the creditor (Shepard Co. v. Taylor Publishing Co., 234 N. Y. 465). It thus becomes immaterial as. to all causes of action brought under those statutes as to whether the prosecution thereof is barred by the six-year Statute of Limitations (Civ. Prac. Act, § 48, subd. 5) or by the ten-year statute (Civ. Prac. Act, § 53). The action was brought within six years from the date the cause of action accrued under the provisions of those statutes.

As to the causes of action set up under article 10 of the Debtor and Creditor Law, different rules apply. Under that statute it is not essential that the creditor first procure judgment and the return of an unsatisfied execution before he may maintain the action (American Surety Co. v. Conner, 251 N. Y. 1). The statute is remedial and he might sue individually before or after the maturity of his claim to set aside the transfer without the necessity of sequestration proceedings (American Surety Co. v. Conner, supra). His time to sue should not be extended by the proceedings to obtain judgment thereon and subsequent sequestration of assets. The complaint sets up constructive fraud, not actual fraud, and under such conditions the ten-year Statute of Limitations applies and commences to run from the date when the act or omission constituting it occurred and not from the time when the facts constituting the fraud were discovered (Pitcher v. Sutton, 238 App. Div. 291, 293; cf. Hanover Fire Ins. Co. v. Morse D. D. & R. Co., 270 N. Y. 86; Potter v. Walker, 276 N. Y. 15). Above it appears that the right to recover was fundamentally and necessarily cognizable in equity and not at law. Section 53 of the Civil Practice Act applies to all actions in equity for fraud not covered by subdivision 5 of section 48. The action against the Sutro Bros, partnership and its members individually was not commenced in time under this article and the cause of action as against them under article 10 of the Debtor and Creditor Law was properly dismissed.

Some of the defendants moved to dismiss the first cause of action only as to them under rule 106 of the Rules of Civil Practice on the ground that the plaintiff failed upon the face of the complaint to state facts sufficient to constitute a cause of action. Such motions were denied and the order entered thereupon was affirmed by the Appellate Division and defendants are not appealing to this court. The other defendants did not move to dismiss on that ground. Here, we must assume that all causes of action are well and sufficiently stated. It is urged here that plaintiff cannot succeed on the ground that he has no legal capacity to sue. The action is brought by the receiver of the Seaboard Trading Company as such and it is asserted that the creditor could bring the action only in his own name. This question was not raised in the various notices of motion to dismiss and it was thereby waived (Civ. Prac. Act, § 278). We have shown, however, that defendants may not rely upon that ground for dismissal.

The judgments appealed from should be reversed with costs to the plaintiff in the Appellate Division and in this court, and the motions to dismiss denied, with ten dollars costs as against each set of defendants so moving, except as to the cause of action against Sutro Bros, under article 10 of the Debtor and Creditor Law, as to which the judgment appealed from should be affirmed, without costs.

Crane, Ch. J., Lehman, Hubbs, Loughran and Finch, JJ., concur; O’Brien, J., taking no part.

Judgment accordingly.


author: Finch, J.

text:
    Addison J. Lyon, as Administrator with the Will Annexed of the Estate of Addison J. Lyon, Deceased, Respondent, v. City of Binghamton, Appellant.

      Argued June 1, 1939;
    decided July 11, 1939.

      Herman F. Nehlsen, Corporation Counsel (Jack W. Hummer of counsel), for appellant.

      Frank J. Mangan for respondent.
   Finch, J.

This is a suit by the owner of a six-tenths interest in Rockbottom dam, which is built across the Susquehanna river, to restrain the city of Binghamton from unlawfully diverting waters from the river and from retaining possession of plaintiff’s dam and appurtenant properties or, in the alternative, to obtain the fair value of plaintiff’s rights of which defendant city has taken possession. (Cf. Ferguson v. Village of Hamburg, 272 N. Y. 234.)

Plaintiff and his predecessors in interest for more than one hundred years have maintained Rockbottom dam for the purpose of operating a mill. The effect of the dam has been to impound the waters for a distance of approximately four miles. As early as 1867 the city purchased riparian rights on the river some distance above the dam, and pumped water from the pond formed by the dam into the mains used by the city' and its residents. Since about 1887 the city has taken water from the pond through a thirty-inch pipe, and since 1899 also through a thirty-six-inch pipe. The facilities now operated by the city permit the taking of more than twenty million gallons of water daily from the pond. Plaintiff and his predecessors in title have demanded continually since 1895 that the city discontinue the diversion of the water. In 1910 a suit in equity was brought by the executors of Addison J. Lyon against the city, wherein a judgment for injunctive relief and for incidental damage was sought. The suit was begun in 1910) and was decided in plaintiffs’ favor in 1922 by the Supreme Court. Upon appeal to the Appellate Division in 1930, the judgment of the Supreme Court was modified by awarding to plaintiffs one dollar nominal damages and suspending the operation of the injunctive relief inasmuch as no substantial damage to plaintiffs had been established. The judgment as modified also provided that plaintiffs at any time might apply at the foot of the judgment for further relief upon the showing of substantial damages. That judgment determined that the city had not acquired a prescriptive right to divert the waters. On or about July 20, 1934, the Mayor and police officers of the city forcibly took possession of the dam, and have continued to hold it against the protests of the owner. On that date the latter had been letting the water flow out through the raceway at a time when the city would have been left without a water supply but for the increased head of the water created by the dam. At that time such owner was endeavoring to ascertain the horsepower of the flow so as to determine its potential uses. The city at once repaired the openings then made by such owner, and has made further alterations to enhance the utility of the dam for the city’s purposes. As a result of some of these changes, the current of the river has been altered, and a considerable portion of the land has been eroded. The present action was commenced on July 27, 1934, by Alfred H. Lyon, as surviving executor of Addison J. Lyon, deceased. Plaintiff has recovered judgment as follows:

1. $1, nominal damages for defendant’s wrongful diversion of the waters of the river.

2. $8,000, damages sustained by the erosion of plaintiff’s land.

3. $105,000, plaintiff’s interest in the fair and reasonable market value of the Rockbottom dam, the land upon which it stands, its appurtenances, pondage, and all rights thereunto belonging. This item is to be paid in lieu of the operation of the injunctive relief asked for by plaintiff. This sum represents six-tenths of $175,000 fixed as the market value of the whole.

4. $42,000, plaintiff’s share in and to the usable value of Rockbottom dam, the land upon which it stands, its appurtenances, pondage, and all rights thereunto belonging, which have been used by defendant for a period of six years prior to the commencement of the present action and down to the time of the trial. This sum represents six-tenths of $70,000 fixed as the total usable value.

Upon this appeal the city seeks review of only two questions: First, whether this action is barred by plaintiff’s failure to comply with section 244 of the Second Class Cities Law (Cons. Laws, ch. 53) in regard to the giving of notice to the city before instituting proceedings; and second, whether the sum of $42,000 as damages for the six years’ use prior to the time of the suit has been determined upon a proper theory of valuation.

Defendant also presents for the consideration of the court the legal effect of the judgment of the Supreme Court heretofore entered in 1897 in an action between the city and one Doolittle, owner of a one-tenth interest in the dam. That judgment authorized the diversion by the city of 8,000,000 gallons of water per day. Neither plaintiff nor his predecessors in title were parties to that action, and hence it cannot have any effect upon the relative rights of plaintiff and the city.

Defendant, in addition, presents for consideration the fact that two more actions have been instituted against the city by owners holding a two-tenths interest in the dam. In answer it is sufficient to say that the sums awarded herein represent only the value of the share owned by the plaintiff.

First. In so far as here relevant, the Second Class Cities Law, section 244, provides:

“ * * * The city shall not be liable in a civil action for damages or injuries to person or property, or invasion of personal or property rights, of any name or nature whatsoever, whether casual or continuing, arising at law or in equity, alleged to have been caused or sustained, in whole or in part, by or because of any omission of duty, wrongful act, fault, neglect, misfeasance or negligence on the part of the city, or any of its agents, officers or employees, unless a claim therefor in writing, verified by the oath of the claimant, containing a statement of the place of residence of the claimant, by street and number, if any, otherwise such facts as will disclose such place of residence with reasonable certainty, and describing the time when, the particular place where and the circumstances • under which the damages or injuries were sustained, the 'cause thereof and, so far as then practicable, the nature and extent thereof, shall within three months after the happening of the accident or injury or the occurrence of the- act, omission, fault or neglect out of which or on account of which the claim arose, be presented to the common council and served upon the mayor or city clerk and notice of intention to commence an action thereon be served upon the corporation counsel, nor unless an action shall be commenced thereon within one year after the happening of such accident or injury or the occurrence of such act, omission, fault or neglect; but no action shall be commenced to recover upon or enforce any such claim against the city until the expiration of three months after the service of said notice upon the corporation counsel. * *

The city has had actual notice of the information which should be contained in the notice required by section 244, even though plaintiff has not formally complied with the provisions of this section. This section, however, does not apply since the present proceeding is brought at the foot of the judgment of the prior action between the present parties. Section 244 does not apply to proceedings taken in the course of an action or at the foot of a judgment in an action where the jurisdiction of the court is complete.

Second. The sum of $42,000 as damages for the tortious acts of the city up to the time of the trial has been determined, not upon the basis of a loss sustained by plaintiff, but upon the basis of the value to the city of the dam and the pond. If not for the existence of the dam, the city admits that its intake pipes would be ineffective during the dry seasons because the water would be too shallow. However, prior to July 20,1934, although the city took advantage of the existence of the dam and the pond, the city did not take actual possession of any of plaintiff’s properties although the referee’s findings recite that for six years prior to the action these properties have been used and occupied by the defendant.” It is conceded by plaintiff that the city did not take physical possession and oust the plaintiff prior to July 20, 1934. There is no evidence whatever to sustain the finding that the dam, the land upon which it stands, etc., had been occupied prior to that time. The determination of the referee, which has been affirmed by the Appellate Division, is made upon the theory that where the owner of property cannot show actual damage, then he is entitled to recover the benefit which accrues to the trespasser upon the real property. This rule is here inapplicable for the reason that the city, although it unlawfully diverted waters, had not taken physical possession of the dam for much the major portion of the period under review. The referee properly rejected plaintiff’s contention that he was entitled to be paid for the water which the city abstracted, since the erection of the dam and the impounding of the waters.

In City of Syracuse v. Stacey (169 N. Y. 231, 245), Judge Haight, writing for all the sitting judges, said:

“ There is simply the right to construct a dam, raise the water six feet high and use it for mill purposes, nothing more.
Water, when reduced to possession, is property, and it may be bought and sold and have a market value, but it must be in actual possession, subject to control and management. Running water in natural streams is not property and never was. The construction of a dam across an outlet of a lake or a river or a creek for the purpose of securing power with which to operate mills or factories is not a reducing of the water to possession or to control or management, in such a sense as to change its legal character and make it property.”

Accordingly, Lyon had not reduced the waters to possession so as to acquire a property right therein, but possessed only a right to damages if the natural flow of the water was diminished so as to affect his usufructuary right. When, however, the city, through its mayor and police, forcibly took possession of the dam and appurtenant land, part of which was covered by water, and ousted plaintiff from his possession, a very different situation was created. From that time on plaintiff was entitled to the rental value of the real property taken. Prior to that time, however, the acts of the city amounted to no more than, at the most, an unreasonable diversion of the water, for which the referee has granted nominal damages, which preserve the legal title of plaintiff, and has awarded to him all to which he is entitled, in the absence of proof of damage measured by the difference in the value of his land with and without the water diverted by the city.

Upon a new trial plaintiff will be entitled to prove his damage to the time of the decree. (Thomann v. City of Rochester, 256 N. Y. 165, 171; Stowers v. Gilbert, 156 N. Y. 600.)

The judgment should be reversed to the extent of granting a new trial on the question of damages in accordance with this opinion, with costs to appellant in this court.

Crane, Ch. J., Lehman, HubbS, Lohghban and Rippey, JJ., concur; O’Brien, J., taking no part.

Judgment accordingly.


text:
    Ida M. Dibble, as Administratrix de Bonis Non of the Estate of Ervin L. Allen, Deceased, Respondent, v. Fred Whipple, Appellant.
    Argued June 2, 1939;
    decided July 11, 1939.

      Max H. Zuckerman and Henry H. Koblintz for appellant.

      Clyde H. Proper and Edward A. Dox for respondent.
   Finch, J.

This is an action to recover damages for the death of a passenger, due to the negligent operation of an automobile owned and driven by defendant. The questions presented involve the correct measure of damages, and whether an amendment of a statute allowing, as an element of damage, the reasonable expenses of medical aid, nursing and attention incident to the injury causing death, and the reasonable funeral expenses, should be applied in a suit pending at the time the statute was amended.

Ervin L. Allen was a passenger in an automobile owned and driven by defendant, which overturned on the 20th day of September, 1932, causing injuries to Ervin L. Allen from which, he died on. the 2d of March, 1933. The action was commenced in December, 1933, and tried and judgment entered in April, 1937. At the time of the death of decedent on March 2, 1933, the statute provided in brief that the amount of recovery should be the fair and just compensation for the pecuniary injuries resulting from the death of decedent to those for whose benefit the action was brought, with interest added to the verdict from the day of the death of decedent. (Decedent Estate Law [Cons. Laws, ch. 13], § 132.). By amendment (L. 1935, ch. 224), in effect March 25, 1935, a new sentence was added to this statute, reading as follows: In every such action now or hereafter pending, in addition to any other lawful element of the damages recoverable, the reasonable expenses of medical aid, nursing and attention incident to the injury causing death paid by the decedent or by a person entitled to the whole or a distributive share of the moneys recovered or for the payment of which such decedent or person is personally responsible, and the reasonable funeral expenses of the decedent, also shall be deemed proper elements of damage.”

Upon the trial of the action, the court allowed in evidence proof of the funeral expenses and the hospital and medical bills.

Taking up first the proper measure of damage, it appears that Ervin L. Allen had no children. He was survived at the time of his death by his wife, Estelle Allen. She died April 26, 1935. On the trial of the action, the court permitted in evidence a portion of the American Experience Tables of Mortality showing that in a man of seventy, being the age of decedent, the expectancy would be 8.84 years, and charged the jury that the pecuniary loss of plaintiff, as administratrix de bonis non of the goods, chattels and credits of Ervin L. Allen, deceased, might be measured by this mortality table. This was error, requiring a reversal. A table of mortality may be used as some evidence of damage where facts are not available showing the actual damage which has happened. But where facts are available showing the actual damage suffered, the testimony should be confined to the pecuniary loss sustained by the widow between the time of the death of her husband and her own death. (Sider v. General Electric Co., 238 N. Y. 64.)

In reference to the admission of proof and the recovery, for funeral expenses and hospital and medical bills, no error was committed. By the express terms of the statute, the amendment permitting the recovery, as an element of damage of the reasonable expenses of medical aid, nursing and attention and the reasonable, funeral expenses, is permitted in every pending action. The action in the case at bar was pending, and no contention is urged that the language of the amendment should not be given its full effect.

Defendant urges that the injuries sustained in the accident were not proven to be the proximate cause of death. This constituted a question of fact to be determined by the jury. The verdict of the jury decided this issue in favor of plaintiff and it cannot be said that there is no evidence in support thereof.

It follows that the judgments appealed from should be reversed and a new trial granted, with costs to abide the event.

Chañe, Ch. J., Lehman, Hubbs, Loughran and Rippey, JJ., concur; O’Brien, J., taking no part.

Judgments reversed, etc.


author: Lehman, J. Finch, J.

text:
    In the Matter of George M. Spector, Appellant, against William Allen, a Judge of the Court of General Sessions of the County of New York, Respondent.

      Argued May 16, 1939;
    decided July 11, 1939.

      Martin W. Littleton, John T. Dooling and Abner J. Rubien for appellant.

      Thomas E. Dewey, District Attorney {Murray I. Qurfein and Aaron Benenson of counsel), for respondent.
   Lehman, J.

The appellant was served on August 23, 1938, with a subpoena duces tecum which commanded him “ to appear before the grand jury of the County of New York, at the Grand Jury Room, * * * FORTHWITH as a witness in a criminal action prosecuted by the People of the State of New York against John Doe and that you bring with you and produce, at the time and place aforesaid, General Ledgers, General Journals, Cash Receipt Books, Cash Disbursement Books, Cancelled Checks on all banks, Bank Statements, Petty Cash Books, Notes Receivable and Payable Books, Purchase Books, Accounts Receivable and Payable Ledgers, Insurance Record, Copies of Accountants’ Reports, from January 1,1933, to date, now in your custody, and all other deeds, evidences and writings which you have in your custody or power concerning the premises.” He has been adjudged guilty of a criminal contempt by the Court of General Sessions pursuant to section 750, subdivision 3, of the Judiciary Law (Cons. Laws, ch. 30) “.by reason,” so the mandate of commitment recites, of his wilful disobedience to the lawful mandate of this Court; and further by reason of his failure to produce his records pursuant to a subpoena duly served upon him and the clarification thereof by the Foreman of the Grand Jury.”

There is no serious controversy in regard to the conduct of the appellant. He willfully refused to produce before the grand jury a paper which the foreman of the grand jury directed him to produce. He deliberately removed that record from the jurisdiction of the court. He so informed the jury and the court. The serious question presented upon this appeal is whether in so doing he disobeyed a lawful mandate of the court to produce that paper.

At the outset we note that the subpoena in a John Doe proceeding commands the appellant forthwith to produce books and other deeds, evidences and writings which you have in your custody or power concerning the premises.” The appellant, not yet informed of the nature of the proceeding which the grand jury was then investigating or even the name of the person who might be charged with the commission of a crime, proceeded promptly to the office of the district attorney. There he was questioned by an assistant district attorney and was told why he was summoned as a witness and the nature of the evidence the grand jury sought from him in its investigation. Though the record is not clear on that point, perhaps we may infer that he denied having such evidence. At the close of their talk the appellant was directed to appear before the grand jury at ten a. m. on August 25th and the appellant was handed a subpoena to appear before the grand jury at that time, but this subpoena required only the appellant’s personal appearance. It did not require him to bring any books or records.

The appellant appeared on August 25th before the grand jury and answered all the questions put to him. He stated that he was engaged in business as an insurance broker and also did “ a little financing.” Informed that, in the course of the investigation which the grand jury was then conducting, the appellant’s name had been connected in the books of a certain corporation with a loan or payment of $47,000 to that corporation, the appellant produced canceled checks and notes purporting to amount to $47,000 which he said were connected with the transaction shown on the books of the corporation. Questioned in regard to his records and books, he stated that he kept no books or regular records; but he admitted that each month when he received his canceled checks he entered upon a yellow paper ” the amounts owing to him for commissions, premiums advanced, or loans. The foreman of the grand jury then directed him to appear on the following Monday and to produce whatever notes or records or papers or whatever yellow sheets you may have.” He was asked by the District Attorney: Do you understand what we mean by a yellow paper? ” He said that he understood and would bring it on Monday, August 29th.

On that day he produced a yellow paper ” but stated that he had torn off the names of the persons with whom he did business. He explained that his bank had shown displeasure because it had received a subpoena to produce his accounts and he feared that if he divulged the names of his clients they might be questioned and as a result his business would be ruined. He admitted that he kept a “ duplicate ” which showed the names, He was ordered by the foreman to bring the duplicate the next morning. He appeared the next morning but stated that he had sent the paper to a friend in Massachusetts. Then the foreman of the grand jury directed the District Attorney to bring proceedings to punish the appellant for contempt.

The appellant was brought before a judge of the Court of General Sessions. There the District Attorney dictated what he said “ we should call the specifications of this contempt, a copy of which may be served upon counsel for the witness and which will act as the charges under which the witness is here brought.” Counsel for the appellant then said: “ I must request the1 court for an adjournment until tomorrow morning in order to prepare this case, and in order to prepare a brief on the law.” The District Attorney consented, and the request for an adjournment was granted. Before the court adjourned the District Attorney stated that “osa matter of public policy I do not wish to divulge any further at this time ” the details of the investigation by the grand jury. Counsel for the appellant stated that I shall see that he will have these records here by twelve o’clock tomorrow and I will ask at that time that he have an opportunity to. purge himself of contempt.”

The court without objection from the appellant’s counsel and without request for further adjournment heard the proof the next day. At the close of the hearing he adjudged the appellant guilty of contempt of court and refused to permit the appellant to purge himself of contempt. No complaint may fairly be made of the procedure adopted. It complied with the provisions of section 751 of the Judiciary Law. Though the contempt was not “ committed in the immediate view and presence of the court ” (Cf. Matter of Douglas v. Adel, 269 N. Y. 144), the party, charged was “notified of the accusation ” and had a “ reasonable time to make a defense.” These' statutory requirements are intended to protect the right of an accused to. appear and defend himself. What constitutes sufficient notice and reasonable time to make a defense depends upon the particular circumstances of each case. The purpose of the requirement must never be lost sight of; the rights of an accused must always receive adequate protection. They were fully protected in this case by the procedure suggested by the District Attorney and approved by the court. The accused and his counsel were fully apprised of the nature of the charge and no further details were requested. Amplification of the charge presented, or more exact definition, might have opened the way for technical objections but would not have facilitated a defense on the merits. The accused was accorded the time requested by counsel to prepare his defense. He was ready then and, even now, there is no suggestion that if more time had been extended he would have been able to present his defense more convincingly.

The evidence, indeed, is convincing that he deliberately and willfully disobeyed the order of the foreman to produce the “ yellow paper.” The court could not reasonably fiad otherwise and the court did not abuse its discretion by refusal to permit the accused to purge himself of his contempt, if contumacious disobedience of such a command constitutes a contempt. We assume that it sufficiently appears in this case that the paper was material to the investigation that the grand jury was conducting, though the record fails to disclose the nature of the investigation or against whom it was directed. The grand jury must often conduct investigations to determine whether a crime has been committed, before it is possible for the District Attorney to formulate a charge or to point to any particular person. The successful prosecution of crime would be intolerably impeded if a District Attorney could be compelled to divulge, before he is ready, the nature of an investigation by the grand jury or the name of the person or persons suspected. On the other hand, a witness who has been subpoenaed cannot be compelled to give testimony, or to produce evidence, against himself or which is not material to the proceedings. Where he refuses to obey a command to produce evidence he may be punished only if it appears that the evidence was material and could properly have been required of him. District Attorney and court must- then co-operate'to insure that the righteous zeal of the prosecutor shall not invade the rights of the witness nor reluctance of a recalcitrant witness hamper unduly the prosecution of crime. We cannot say that in this respect either the court or District Attorney has been at fault.

Where irrelevancy is asserted before a grand jury the witness is of course entitled to a ruling by the court. Then the court must be apprised of the nature of the evidence demanded and of its relation to the subject of the investigation sufficient to enable the court to determine its relevancy. Here the appellant assumed the risk of refusing to produce the evidence without demanding that the court pass upon it in advance or even asserting that it was irrelevant. Nevertheless there can be no punishment for contempt for such refusal unless the court is shown that the evidence demanded may be relevant and proper. That is not in this case wholly a matter of prophecy, as in Matter of Edge Ho Holding Corp. (256 N. Y. 374), where there was a motion to quash a subpoena in advance of the hearing. When the appellant refused to produce the yellow paper its bearing on the subject of the investigation was susceptible of intelligent estimate if the setting in which it was placed was sufficiently revealed by the District Attorney. No more need be revealed than would be sufficient to permit “ intelligent estimate.” In this case the District Attorney gave the information which he deemed suffiicent for that purpose, withholding other information in the public interest. The witness and his counsel did not challenge the sufficiency of the information which the District Attorney offered, or seek to obtain more information, and in those circumstances we may assume its sufficiency.

The fatal weakness in the adjudication for contempt lies not there but in the fact that the appellant received no subpoena requiring him to produce the yellow paper either on August 25th or August 29th, nor did he disobey any other mandate of the court. The acts which may constitute a contempt are specified in section 750 of the Judiciary Law “ and no others ” are punishable as criminal contempts by a court of record. Included in the acts so specified is “ 3. Wilful disobedience to its lawful mandate.” The question is whether the accused received a lawful mandate of the court to produce the yellow paper before the grand jury on August 25th or August 29th or August 30th. A subpoena duces tecum issued by the District Attorney is a mandate of the court, and disobedience of the subpoena may be punished as a contempt (People ex rel. Drake v. Andrews, 197 N. Y. 53), but the appellant did not disobey that mandate. Punishment for a criminal contempt is a drastic remedy for willful wrong. The mandate must be clear before disobedience can subject a person to such punishment. Here the subpoena duxes tecum did not command the witness to appear before the grand jury at ten a. m. on August 25th but to appear forthwith ” and to produce his books. It is said by the District Attorney that the word “ forthwith ’ must be held to give the witness a reasonable time, in the circumstances, to produce the books, and the district attorney a reasonable time, in the circumstances, to present the witness before the Grand Jury.” We assume, though only arguendo, that the word should be so construed, yet it still remains true that there is no proof here that the command was disobeyed.

The appellant did appear forthwith on August 23d, the same day that he was served. An oral direction by the District Attorney to appear again on August 25th is not a mandate of the court. It could not change a command to appear “ forthwith ” into a command to appear at a definite time two days later. To insure the attendance of the appellant on August 25th the District Attorney served a new subpoena. The direction in the original subpoena to produce “ accounts receivable and payable ledgers ” would hardly give notice to a witness, who does not even know the nature of the investigation or against whom it is directed, that he should produce the single sheet memorandum on which the appellant had written the amounts due to him from different persons. The new subpoena, in any event, did not require the production of any papers.

The grand jury is an arm of the court, but it is not the court. Its foreman has no authority to issue a mandate ” of the court within the meaning of section 750 of the Judiciary Law. It is said, however, that even if that be true the foreman could clarify ” the subpoena duces tecum by direction to bring a particular paper. Neither oral direction by the District Attorney nor oral clarification by the foreman of a grand jury can change or enlarge the command of the subpoena. The subpoena must be in writing, and only disobedience of the written command is subject to the drastic punishment meted out for a criminal contempt. It seems plain for these reasons that the appellant never received a mandate of the court to produce the yellow paper and disobedience of the directions of the District Attorney or the foreman is not punishable as a contempt.

The defect here is not purely formal or technical. To protect the liberty of the individual from possible abuse of power, punishment for contempt is hedged about with restrictions and subject to regulations imposed by the Legislature. Disobedience only of mandates of the court given in accordance with law are subject to such punishment. The command must be clear; disobedience must be willful. Guilt arises only where the authority of the court is flouted. Formality in giving the command may bring home to a person the importance of obedience. In this case the appellant promptly produced the desired paper when he was convinced that failure to do so might result in his punishment. We cannot say that he would not have produced it earlier if the District Attorney, after learning of the existence of the paper, had served upon him a subpoena commanding him in plain language to produce it.

The order of the Appellate Division should be reversed and the determination of the judge of the Court of General Sessions annulled.

Finch, J.

(dissenting). I dissent on the ground that where a witness receives a subpoena to produce accounts receivable and payable ledgers,” he should not be able to fail to produce sheets containing his list of accounts receivable particularly where the witness later admitted that he considered that these sheets were his receivables,” and where it further appeared that such sheets were the only records of the witness’ business.

Crane, Ch. J., Loughran and Rippey, JJ., concur with Lehman, J.; Finch, J., dissents in memorandum in which Hubbs, J., concurs; O’Brien, J., taking no part.

Order reversed, etc.


author: Lehman, J.

text:
    Francis W. Greene, Appellant, v. Howard Dunscomb et al., Constituting the Board of Trustees of the Village of Ossining, Respondents.

      Argued June 20, 1939;
    decided July 11, 1939.

      Lawrence T. Gross, Jr., for appellant.

      John P. Powers, E. J. Dimock and A. S. Davis, Jr., for respondents.
   Lehman, J.

In January, 1939, the appellant, Francis W. Greene, was appointed Acting Police Justice of the village of Ossining. He requested the Board of Trustees of the village to adopt a resolution fixing his compensation in accordance with the provisions of section 184 of the Village Law (Cons. Laws, ch. 64). The Board of Trustees formally refused on the ground that Section 184 of the Village Law is not applicable to the Village of Ossining, and that the compensation of the Acting Police Justice of the Village is governed by Section 145 of the Village Charter (chapter 667 of the Laws of 1910, as amended) which provides a per diem method of compensation.” The controversy was submitted to the Appellate Division upon an agreed statement of facts. It rendered judgment in favor of the Board of Trustees, holding that the provisions of the village charter applied.

Some of the villages of the State have been incorporated under general laws. Other villages have been incorporated “ under and subject to a special law.” The Village Law of the State (Laws of 1909, ch. 64) is a revision of the general village laws and such laws were expressly repealed by the statute. It was not intended to repeal by implication special laws. Its effect on existing corporations was defined by article 16. Section 380 defined the “ Effect of chapter on special villages,” and provides: A village incorporated under and subject to a special law, and each officer thereof, possesses all the powers and is subject to all the liabilities and responsibilities conferred or imposed upon a village incorporated under this chapter, or upon an officer thereof, not inconsistent with such special law.” Section 381 defined the Effect of revision on general villages.” It provides that the following villages are subject to the provisions of this chapter, as if incorporated thereunder,” and then it specified in separate subdivisions villages incorporated under four general laws which were expressly repealed by the new statute.

It is plain that section 380 applies only to villages incorporated under special laws which are not repealed. There the provisions of the special law continue to govern the powers, liabilities and responsibilities of the villages incorporated under the special law and of officers of such villages, where such provisions are inconsistent with the provisions of the general Village Law. The village of Ossining is not incorporated under a general law. Though incorporated in 1813 it received a new charter by special act of the Legislature in 1910, chapter 667 of the Laws of 1910. Section 381 applies only to villages specified therein, and as to those villages the provisions of the Village Law govern regardless of any provisions of the statute under which such villages were incorporated. As long as the village of Ossining was not included in the villages specified in that section, there could be no doubt that section 184 of the Village Law did not apply to it, for that section is inconsistent with section 145 of the statutory village charter.

The Legislature, by chapter 567 of the Laws of 1938, attempted to amend section 381 of the Village Law by adding a new subdivision * * * to read as follows: 6. Villages incorporated under chapter six hundred sixty-seven of the laws of nineteen hundred ten, or the acts amendatory thereof and supplementary thereto.” The appellant maintains that the effect of the amendatory statute is to make all the provisions of the Village Law apply to the village of Ossining and thus to repeal the village charter.

The amendatory statute, if valid, could by its terms apply only to the village of Ossining, for chapter 667 of the Laws of 1910 constitutes the statutory charter of Ossining, and no other village was or could be incorporated thereunder. The Constitution of the State provides that no private or local bill, which may be passed by the Legislature, shall embrace more than one subject, and that shall be expressed in the title.” (Art. Ill, § 16 [now § 151|.) The title of the amendatory statute is: “ An act to amend the village law, in relation to effect of revision on certain general villages,” but its sole purpose is to include a single special village within the scope of a general law. The title fails to give any possible suggestion of that purpose. It is in that respect entirely misleading and, if the statute is local,” the mandate of the Constitution has, it is plain, been disregarded. (Economic P. & C. Co. v. City of Buffalo, 195 N. Y. 286; Gaynor v. Village of Port Chester, 231 N. Y. 451.) The question we must decide is whether the statute is local. E valid, by no possible construction can its scope be limited in manner which would leave in effect a section of the original charter of a special village ” inconsistent with the provisions of the Village Law and, if the statute is local, it is plainly invalid.

We have said that if the act by its terms was applicable to a class, it did not cease to be general though the fact would appear, if extrinsic evidence were received, that it was local in effect. (Matter of N. Y. El. R. R. Co., 70 N. Y. 327; Matter of Church, 92 N. Y. 15; People v. Dunn, 157 N. Y. 528, 540; Kittinger v. Buffalo Traction Co., 160 N. Y. 377, 395.) Even then there was a point beyond which evasion was not suffered. Identifying tokens might be so many and particular that classification would find an end and designation a beginning. (Matter of Henneberger, 155 N. Y. 420.) There was here in this exception the germ of a doctrine more adapted to realities.” (Matter of City of New York [Elm St.], 246 N. Y. 72, 76.) Here extrinsic evidence is not needed to reveal the fact that the statute is local in effect. Though it purports to describe a class of villages, the description of the class ” is incomplete without reference to another statute, and that statute is applicable to a single village only. Thus not only in effect but even in terms the description when completed refers only to the village of Ossining. That is not “ classification ” but designation.” No fiction here beclouds the reality.

The judgment should be affirmed, without costs.

Crane, Ch. J., Hubbs, Loughran, Finch and Rippey, JJ., concur; O’Brien, J., taking no part.

Judgment affirmed.


text:
    Mary Derlicka et al., Respondents, v. Samuel Leo, Appellant, Impleaded with Others.
    Submitted June 2, 1939;
    decided July 11, 1939.

      Thomas II. Clearwater and Lorenz J, Brosnan for appellant

      William Logan, Jr., and Helen F. Tuohy for respondents.
   Per Curiam.

The General Muncipal Law (Cons. Laws, ch. 24), section 50-d, imposes upon a municipal corporation ultimate liability for all damages for personal injuries, sustained by reason of the malpractice of a physician or dentist, while rendering medical services or dental services of any kind, gratuitously, to a person in a public institution maintained in whole or in part by the municipal corporation. For the wrong done to the patient by the physician the statute creates a new remedy against the city in favor of the injured person. The liability which existed at common law may still be enforced by action against the physician, but the physician would have a right to insist that in accordance with the statute he be saved harmless by the municipal corporation. The effect of any action, whether brought against the municipality or against the physician or dentist, is determined by the provisions of the statute and, by the express terms of the statute, may be maintained only if “ the applicable provisions of law pertaining to the commencement of action and the filing of notice of intention to commence action against such municipal corporation shall be strictly complied with.”

The order of the Appellate Division should be reversed and that of the Special Term affirmed, with costs in this court and in the Appellate Division. The certified question is answered in the affirmative.

Crane, Ch. J., Lehman, Hubbs, Lottghran, Finch and Rippey, JJ., concur; O’Brien, J., taking no part.

Ordered accordingly.


author: Lehman, J. Crane, Ch. J. Crane, Ch. J.

text:
    In the Matter of American Molasses Co. of New York, Appellant and Respondent, against Joseph D. McGoldrick, as Comptroller of the City of New York, Respondent and Appellant. Sterling Bag Company, Inc., Respondent, v. City of New York et al., Appellants.
    Argued May 26, 1939;
    decided July 11, 1939.

      Morton L. Deitch, Sol M. Stroock and Milton Socolo ff for petitioner, appellant and respondent in proceeding.

      William C. Chanler, Corporation Counsel (Arthur A. Segall, Sol Charles Levine and Morris L. Heath of counsel), for defendant, respondent and appellant in proceeding.

      William C. Chanler, Corporation Counsel (.Arthur A. Segall, Sol Charles Levine and Bernard H. Sherris of counsel), for appellants in action.

      William L. Hanaway, William J. Quinn and Charles A. Howard, Jr., for respondent in action.
   Lehman, J.

The question involved in these appeals is simple. The New York City Sales Tax (Local Law No. 20 [published as No. 21] of 1934, as amended) imposes a tax, with exceptions not here material, upon receipts from every sale in the city of New York of “ tangible personal property sold at retail.” The statute provides that “ a1 retail sale ’ or sale at retail ’ means a sale to a customer, or to any person for any purpose other than for resale in the form of tangible personal property.” Sugar and molasses sold at wholesale must be packed in containers. The packers must purchase the containers. They sell the sugar and molasses in the containers and title to the containers passes to the purchasers in bulk. The purchasers may use the contents in their own business or may parcel it out in small quantities to customers for home consumption. Then the container does not reach the ultimate consumer but is retained by the purchaser in bulk and usually resold as junk. The question here presented is whether the original sale of the container to the refiner or packer of sugar or molasses constitutes a sale at retail ” within the meaning of the statute.

There can be no doubt that the sale is made for the purpose of enabling the refiner or packer to put the sugar or molasses in the container and to sell the sugar and molasses with the container. The title to the container is transferred as well as title to the sugar or molasses. We may assume that the buyer of the contents acquires title to the container only because he cannot otherwise obtain title to the contents and that, when he removes the contents, he has no further use for the container. We may assume, too, that the refiner or packer of the sugar or molasses bought the containers only to facilitate the sale of the product packed in the container and not for the purpose of a resale of the container as an article of commerce. The resale of the container is purely an incident of the sale of the contents. Nevertheless, the container and contents are not inseparably connected. The container has not been consumed by the refiner or packer in performing services for another as was the case in Matter of Mendoza F. D. Warks, Inc., v. Taylor (272 N. Y. 275). The container remains tangible personal property ” after it has been filled by the refiner or packer and resold as an incident of the sale of the contents; it may be resold as tangible personal property by the purchaser of the contents who has no use for an empty container after the contents have been removed. The original sale to the refiner or packer was made for resale in the form of tangible property. Though such resale was purely an incident to the sale of the contents, and the original purchase would not have been made except for the purpose of reselling the container as such an incident to the sale of the contents; nevertheless the sale to the refiner was not a sale at retail within the letter or spirit of the law.

In the first above-entitled proceeding the order should be affirmed, without costs.

In the second above-entitled action the judgment should be affirmed, with costs.

Crane, Ch. J.

(dissenting in Sterling Bag Company v. McGoldrick). Sugar refiners sell sugar. It cannot be delivered to customers like coal, shoveled into bins; it must be contained in some receptacle like a box or a bag. This part of the business is a necessary part. The refiner cannot say to the customer, here is your sugar, come and get it; it is no business of mine how you carry it away.” There would be few sales if such were the case. Trade would go to the refiner .who properly packed or boxed it, made it convenient for delivery and for handling. The refiners, therefore, use bags; they buy bags in the market which become as much a part of the refiners’ sale of sugar as the sugar itself, part of the output. The refiner is not in the business of selling bags; he sells sugar; and to sell it he needs bags as much as he needs men and machinery to refine the sugar, and salesmen to get trade.

No one would ever think that the refiners, in disposing of their product, were selling bags, no matter what the price or how much the price varied. Now that there is a city tax on sales the claim is put forth that the refiners are merchants of bags.

The Sterling Bag Company, Inc., as its name implies, is a manufacturer of burlap and cotton bags, having its principal office in the borough of Brooklyn, New York city. The sales here involved are sales of sugar bags to refiners of sugar for delivery in New York city. It is in no way affiliated with these refiners. The bags sold are of three general types, (1) bulk sugar bags of 100-pound capacity; (2) burlap sacks ” or envelopes ” generally of 100-pound capacity, designed as containers for smaller cotton bags filled with sugar; and (3) smaller cotton bags of two-, five-, ten-, fifteen- and twenty-five-pound capacity with which the “ sacks ” or envelopes ” are filled. The company solicits orders from the sugar refiners and upon receiving an order prints the cloth with the particular refiner’s name or other designation according to instructions, manufactures the bags and delivers them to refiners. The bags have the refiner’s name branded on them. Invoices are forwarded to the refiners and payment is received by the plaintiff in due course. The sugar in one-hundred pound bulk bags is sold to manufacturers who use sugar in large quantities, such as confectioners, bakers or food earners, and the sugar packed in cotton bags inserted in the sacks is sold to jobbers, wholesalers or chain stores in the retail trade.

This appeal involves only the taxability of the sales of the larger containers of one-hundred pound capacity for sugar or the burlap sacks ” or “ envelopes ” generally of the same capacity to hold the smaller cotton bags filled with sugar. These facts place these wrappings of sugar in the same class with wrapping paper, wooden or cardboard boxes. The goods must be placed in something to be sold, some kind of container; for sugar, coarse bags; for fruit, wooden or tin boxes; for oil, barrels, etc., according to the nature of the article. The refiners buy bags, but they do not deal in bags, nor is it accurate to say that they sell bags. Of course the bags go along with the sugar — it cannot of necessity be otherwise — but to say that the purchaser of sugar is buying bags or intends to buy bags except as they contain his purchase of sugar is a refined and strained construction adopted only for tax purposes; it is not the natural meaning or one which merchants or the trade recognize, nor is it true to fact. The bags, it is said, after the sugar is taken out can be sold in the secondhand market. So can old barrels or wrapping paper. This, too, has an artificial sound. The disposition of waste bags or paper is not such a resale as is contemplated by the local law.

The Sales Tax Law is Local Law No. 20 (published as No. 21) of 1934, section 2 (as amd. Local Law No. 24 [published as No. 25[ of 1934), applicable only to New York city. There shall be paid a tax of two per centum upon the amount of the receipts from every sale in the city of New York of: (a) Tangible personal property sold at retail, except those articles described in Schedule ‘A’ * * *.” Bags or containers are not in the excepted list. A “ sale ” is any transfer of title or possession or both * * * for a consideration.” The word “ receipt ” means “ the amount of the sale price.” A retail sale ” or “ sale at retail ” means a sale to a customer, or to any person for any purpose other than for resale in the form of tangible personal property.”

The local law also provides:

“ § 2. * * * For the purpose of the proper administration of this local law and to prevent evasion of the tax hereby imposed, it shall be presumed that all receipts for property and services mentioned in this section are subject to the tax until the contrary is established, and the burden of proving that a receipt is not taxable hereunder shall be upon the vendor or the purchaser, unless the vendor shall have taken from the purchaser a certificate signed by and bearing the name and address of the purchaser * * * to the effect that the property or service was purchased for resale.”

The local law provides that a sale at retail is a sale for any purpose ” other than a resale. The refiner buys the bags for the purpose of shipping or transporting sugar to its customers. This use or purpose, while passing title to the bags to the customer with the delivery of the sugar, is not such a resale as here defined. This use is a purpose ” other than a resale of bags as bags.

That the parties here involved understood that this was a retail sale of bags to enable the purchasing refiners to pack sugar and not to resell the bags as such is evident from, the fact that the bag company failed to obtain any resale certificates or the refiners (who ultimately pay the tax) to offer them. One who is exempt in carrying on an extensive business seldom forgets the exemption. Then again the refiners sold their sugar at scheduled prices without claiming or stating any separate rate for containers. The purchaser of the sugar could never tell what he was paying for bags; he did not expect to, as he was buying sugar, not bags.

I am of the opinion that these sales of sugar bags came within this tax law and that the courts below were in error in holding that the refiners intended to resell the bags as bags.

The respondent claims and the evidence shows that the price of sugar varied. The manager of the production division of the American Sugar Refining Company explained how the price of sugar was determined; what elements had to be considered. “ Q. In determining the base price, which you have told us about, and which you have described, as 100 pounds of fine granulated sugar in a bag, what are the factors which go to make up that base price? A. The cost of refining, the fuel, labor and repairs. Q. And the cost of the bag? A. And the cost of the bag, and the cost of packing the bag.” It is thus a mistake to say that the increase in price is dependent solely on the size or style of bag or container. The cost of labor in packing the bag — larger in size — is also an element which is included. The variance from the base price fluctuates for various reasons and even the respondent cannot and does not say that the cost of the bag is represented by (not in) the increased price of the sugar. The fact is that the cost of bags is of course taken into account in fixing the price of sugar, the same as the cost of refining, fuel, labor, repairs, packing and all other expenses incurred in placing refined sugar on the market. The item of profit is also included. Merely because the necessary container passes along with the sugar does not constitute a resale of the container within this local law. Neither does the question of bookkeeping aid us here. Whether the cost of bags was charged to overhead or in some other manner is immaterial. Overhead expenses, all expenses must figure somewhere in the price of manufacturer’s output or he will soon go bankrupt. The ease with which goods can be handled, delivered and again passed on in trade is as important as advertising if inducement is considered in the sugar trade. The cases of City Paper Co. v. Long (235 Ala. 652) and Warren v. Fink (146 Kan. 716) have taken this view under similar laws. We have not overlooked McCarroll v. Scott Paper Box Co. (195 Ark. 1105), but cannot reach the same conclusion as applied to the facts of this case.

The vice-president and treasurer of the plaintiff testified that in his opinion the business of the company had fallen off because refiners were purchasing bags out of the State to escape the tax. “ Q. In your opinion has the adoption of the New York City sales tax anything to do with the refusal of the sugar refiners to accept deliveries from your Company in New York City? A. I think it has a great deal to do with it. It is obviously responsible for our decline in local deliveries,” etc. And the manager of the production division of the American Sugar Refining Company said, “ We have ceased largely our purchases of bags in New York City, from all bag manufacturers. Q. In your opinion has the passage or the adoption of the New York City sales tax anything to do with your discontinuing the purchase of bags for New York City delivery? A. Yes.”

This is unfortunate, but I cannot see what bearing it has upon the meaning of the local law. That the effect is to drive business out of the city to the loss of manufacturers located there is a matter for legislative consideration but not for the court which applies the law.

This action for a declaratory judgment was an appropriate remedy. After the motion to dismiss upon the pleadings had been denied the case was tried out at Special Term where the allegations of the complaint were given in detail with appropriate explanations. This at least was more satisfactory than relying on pleas and conclusions. However, the evidence not being contradicted and the facts clearly appearing, a judgment as to the relative rights of the parties could easily be given. (German Masonic Temple Association v. City of New York, 279 N. Y. 452.)

The judgment should be reversed and case remitted to the Special Term for such judgment as may be appropriate in the light of this opinion, with costs to appellants in all courts.

Crane, Ch. J.

(dissenting in Matter of American Molasses Company v. McGoldrick). The principles underlying this case have been fully expressed in the companion case of Sterling Bag Co., Inc., v. City of New York, decided herewith. The only differences are, first, drums and barrels are used as containers for molasses and syrup; second, some of the containers are purchased out of the State.

At the outset we are not concerned with the regulations of the Comptroller as we are solely guided by the meaning and purpose of the local tax law.

The American Molasses Co. of New York is engaged in the business of packing and selling syrup and molasses in New York city. It has its offices in Manhattan and its factory in Brooklyn. The product is packed in various types and sizes of containers which for this case consist of six-, eleven- and sixteen-gallon steel pails, fifty-five-gallon steel drums and fifty-seven-gallon wooden barrels. Only one per cent of the one-gallon cans are also included. Of the six-, eleven- and sixteen-gallon pails thirty per cent are sold to bakers and confectioners who use the contents in the manufacture of pastry, cake, candy and similar products, and seventy per cent are sold to dealers and distributors, persons who in turn resell the molasses in the original container. About fifty per cent of this latter portion is resold to bakers and confectioners and the remaining portion is sold by the wholesalers to retailers who dispense the product to housewives in smaller quantities. Of the fifty-five-gallon metal drums, which are used only for syrup, virtually all are ultimately sold to manufacturing bakers and confectioners. Of the fifty-seven-gallon wooden barrels used for both syrup and molasses about fifty per cent are disposed of directly to bakers and confectioners who use the contents in their business, and about fifty per cent are sold to distributors, who in turn resell. Of this fifty per cent approximately one-half is parceled out in small containers by retailers for home consumption. The containers are not returned to the company, but when emptied can be disposed of in a second-hand market.

These various ldnds of containers have from experience proved to be the most suitable for the business. The evidence shows that the customers for molasses or syrup are not billed for these containers and that the molasses company is not in the barrel, pail or steel drum business. The product sold is molasses or syrup, which has to be put into something, and a barrel or a pail is the most convenient according to quantity. That the customer does not purchase the container is evidenced by the fact that when empty he sells it for junk. Naturally, the cost of the container enters into the price, the larger the container the larger the price. Steel drums cost more than wooden barrels, etc. All that has been said about the sugar bags in the other case applies here, and these purchases by the molasses company are subject to the sales tax according to Local Law No. 20 there quoted.

The petitioner’s illustration regarding the parts of an automobile is not very apt. True, a tire may be purchased here, the wheels there and the upholstery at yet a different place, and, questions the petitioner, would we tax the sale of these parts? The answer is no, for the simple reason that they are put together and resold as one manufactured article — the automobile — they are the automobile just as the hand and foot and head and neck are the person, as distinguished from his clothes. The wrappings or the clothes in which the molasses makes its appearance in public is not the molasses.

The other question, however, presents a point not in the bag company case. We have held in Matter of National Cash Register Co. v. Taylor (276 N. Y. 208); Matter of West Publishing Co. v. Taylor (276 N. Y. 535); Matter of Compagnie Generate Transatlantique v. McGoldrick (279 N. Y. 192), that a certain class of sales were not taxable either because the contract of sale was not made in New York city or that it would be a burden on interstate commerce. The purchase of containers from Wheeling Corrugating Company, Pittsburgh Steel Drum Company and the National Steel Drum Company falls within the reasoning of these authorities. They were for articles to be manufactured and shipped from without the State and in some instances- the contracts were approved at the place of manufacture. So, too, regarding the purchase of coal from the mines in Pennsylvania through the Logan Coal Company. Such items of purchase, whether containers or coal, as fall within this category, are not within the law, and the price is not subject to the two per cent tax.

The order of the Special Term and of the Appellate Division should be modified to this extent and the matter remitted to Special Term for judgment in accordance with this opinion. Except as modified, the orders should be affirmed, without costs.

Hubbs, Loughran and Pippey, JJ., concur with Lehman, J.; Crane, Ch. J., dissents in separate opinion in each case, in which opinions Finch, J., concurs; O’Brien, J., taking no part.

Order and judgment affirmed.