author: Lehman, J.

text:
    In the Matter of Tony Fortino, Respondent, against State Liquor Authority, Appellant.
    Argued November 18, 1936;
    decided December 31, 1936.

      Monroe I. Katcher, II, and Nelson Ruttenberg for appellant.
    The places where wine was found were parts of respondent’s licensed premises within the meaning of the Alcoholic Beverage Control Law (Cons. Laws, ch 3-B). (People ex rel. Wood v. Lacombe, 99 N. Y. 43; Spencer v. Myers, 150 N. Y. 269; Surace v. Danna, 248 N. Y. 18; Caddy v. Interborough R. T. Co., 195 N. Y. 415; Matter of Jannicky, 209 N. Y. 413; Wiley v. Solvay Process Co., 215 N. Y. 584; Archer v. Equitable Life Assur. Soc., 218 N. Y. 18; Matter of Bowne v. Bowne Co., 221 N. Y. 28; Mehler v. Baker, 68 Misc. Rep. 442; 140 App. Div. 895; People v. Miller, 79 N. Y. Supp. 1122; Matter of Walters, 243 App. Div. 649; Matter of Nardone v. State Liquor Authority, 245 App. Div. 799; Matter of Rubin v. Mulrooney, 243 App. Div. 695; Matter of Hellman, 245 App. Div. 750; People ex rel. Old Heidelberg Tavern, Inc., v. Mulrooney, 248 App. Div. 594; Matter of Kordos, 244 App. Div. 889; Matter of Evans, 244 App. Div. 889.) The violation having been established, the appellant’s determination was a proper exercise of its discretion upon the facts and should not be disturbed. (People ex rel. Sullivan v. McLaughlin, 266 N. Y. 519; People ex rel. St. Albans S. Corp. v. Connell, 257 N. Y. 73; People ex rel. N. Y. & Queens Gas Co. v. McCall, 219 N. Y. 84; People ex rel. Smith v. Hoffman, 166 N. Y. 462; People ex rel. Cook v. Hildreth, 126 N. Y. 360; Matter of Syracuse, B. & N. R. R. Co. v. Van Amburgh, 223 App. Div. 485; 251 N. Y. 548; Lyman v. Kurts, 166 N. Y. 274; People v. Hawk, 156 Misc. Rep. 870; 268 N. Y. 678; People ex rel. Scharff v. Frost, 198 N. Y. 110; Matter of State Industrial Comm. v. Newman, 222 N. Y. 363; Flynn v. Prudential Ins. Co., 207 N. Y. 315; 103 Park Ave. Co. v. Exchange Buffet

      Corp., 242 N. Y. 366; People ex rel. Steckler v. Warden, 259 N. Y. 430.)

      Edward J. Halter for respondent.
    The wine found by the State investigator was not on the licensed premises as charged within the meaning of the Alcoholic Beverage Control Law. (Matter of Lasher v. State Liquor Authority, 245 App. Div. 402.)
   Lehman, J.

After a hearing held upon the charge that the “ licensee kept or permitted wine to be kept or consumed on the licensed premises, in violation of section 108 of the Alcoholic Beverage Control Law,” the State Liquor Authority revoked a license which had been issued to Tony Fortino for the sale of beer at retail for consumption in an eating place on the premises located at 8 Burgoyne road, Ticonderoga, New York. The determination of the State Liquor Authority revoking the license was reversed by the Appellate Division.

Section 108 of the Alcoholic Beverage Control Law (Cons. Laws, ch. 3-B) provides that no person holding a beer license issued pursuant to chapter one hundred and eighty of the laws of nineteen hundred thirty-three or this chapter shall keep or permit to be kept or consumed on the licensed premises any liquor or wine, unless such beer licensee shall be the holder of an appropriate liquor or wine license.” An investigator of the State Liquor Authority testified that “ in a sort of a box, it looked like a kennel, there was a dog tied outside of ifc — there was a lot of straw in it. I turned up the straw with a pitchfork and under the straw I found a cake of ice, and two bottles of wine. I looked further, and in a coupe car in the garage, I found some baskets and boxes containing about sixty or seventy other bottles of wine.” The so-called dog kennel was in back of-the house in which the petitioner maintained a restaurant and “ right outside the kitchen door.” The garage was directly connected with thq house.”

This evidence was not contradicted by the licensee, but, in explanation of the fact that the wine was found on the licensee’s premises, the wife of the licensee testified that the wine had -belonged to her deceased father and had been removed by her that same day from the cellar of the house in Whitehall, N. Y., where he had lived. She had been informed that some of the wine had been stolen and she had been advised by the Chief of Police of Whitehall to remove what remained from the cellar. She drove in her automobile to Whitehall and brought back the wine to Ticonderoga. Her story was that she removed two bottles and placed them on the ice because she expected some guests to dinner and desired to serve the wine to them. The other bottles of wine she left in the automobile, intending to find a place to store them pending settlement of the estate. The investigator found the wine within an hour after she brought it to Ticonderoga.

The Liquor Authority was not bound to credit this testimony, but even if it be true, the fact remains that two bottles of wine were found on ice in a box on the premises of the licensee convenient to the kitchen of the restaurant, and more bottles were found in a garage on the same premises. The licensee’s wife, who claims that she brought the wine, acted as cook in the restaurant, and the inference may fairly be drawn that she acted with the licensee’s knowledge and authority. There is no testimony or serious contention to the contrary, and the Appellate Division assumed, though by no means so deciding, that Mrs. Fortino may have been the agent of the licensee. It annulled the determination of the Board on the ground that “ the places where the wine was found were no part of the ‘ licensed premises ’ ” and that the Legislature did not intend to forbid the presence, for family use, of wine or liquor in that part of the premises devoted to the family dwelling, whether for dietary,, social, or medicinal purposes.”

The statute does not attempt to define licensed premises.” There is no reason why it should. Licensed premises ” can mean only the premises described in the license and in which, under the terms of the license, an alcoholic beverage or alcoholic beverages may be sold. Where, as in this case, the premises are described only by street and number, it is plain that the licensed premises are the premises owned by the licensee at that address. Though the licensee may live on part of the premises, he would have the right under his license to maintain a restaurant in each and every part of the premises indoors and out of doors and a sale of beer at retail for consumption there would be legal.

It is true that in section 3, under the heading “ Definitions ” the statute provides: “ Whenever used in this chapter, unless the context requires otherwise * * * (7) Building containing licensed premises ’ shall include the licensed premises and also any part of a building in which such premises is contained and any part of any other building connected with such building by direct access or by a common entrance.” In that definition of a “ building containing licensed premises,” the Appellate Division found indication that licensed premises ” shall be a particular location within a building and shall exclude places outside of the building and not connected with the building' by direct access or by a common entrance.

The statutory definition has no such scope or effect. “ Licensed premises ” may, of course, be confined to a particular location leased or controlled by the licensee in a building which may contain many other rooms. In order to carry out the declared purpose of the statute to regulate and control the manufacture, sale and distribution within the state of alcoholic beverages for the purpose of fostering and promoting temperance in their consumption and respect for and obedience to law ” (§2), the Legislature has seen fit to supplement provisions which apply to the “ licensed premises ” by other provisions which apply to the entire “ building containing licensed premises.” (Cf. § 106, subd. 9-d; § 111; § 113, etc.) The statutory definition described what the Legislature means when it uses that term. Perhaps most licenses, especially in cities, may be issued for premises limited to a location in a building containing other rooms. The statute enjoins no such limitation. The application for a license must identify “ the premises to be licensed stating the street and number, if the premises have a street and number, and otherwise such apt description as will reasonably indicate the locality thereof.” (§ 110, subd. 3.) In this case the application contains no description of the premises to be licensed ” or indication of the locality thereof except the statement of street and number. The license likewise contains no other description of the licensed premises or limitation to any particular part of the premises owned by the licensee at that particular street or number. The applicant sought a license without such limitation and obtained it. The license may be revoked if on any part of such premises he permits a violation of the law. The construction placed upon the statute by the Appellate Division does not accord with its letter or spirit.

The order of the Appellate Division should be reversed and the determination of the State Liquor Authority affirmed, with costs in all courts.

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

Ordered accordingly.


source: Caselaw Access Project

license: Public Domain

text:
    George S. Van Schaick, Superintendent of Insurance of the State of New York, as Rehabilitator of Lawyers Mortgage Company, Appellant, v. Manhattan Savings Institution, Respondent.

      Argued November 19, 1936;
    decided December 31, 1936.

      Abraham J. Halprin for appellant.
    The transaction alleged in the complaint is illegal and not ultra vires. (Gardner v. People, 62 N. Y. 299.) A violation of section 20 of the Insurance Law (Cons. Laws, ch. 28) being a misdemeanor, the contract performed pursuant thereto is void and no rights can be acquired under such a contract. (Sirkin v. Fourteenth St. Store, 124 App. Div. 384; Duval v. Wellman, 124 N. Y. 156; Pittsburgh Carbon Co. v. McMillin, 119 N. Y. 46; Porter v. Williams, 9 N. Y. 142; Hurd v. Kelly, 78 N. Y. 588; Fosdick v. Investors Syndicate, 266 N. Y. 130.) The contract in respect to the purchase of the property is separate and distinct from the agreement pursuant to which the guaranteed mortgages were acquired by the defendant. Even if they be considered as part and parcel of one contract, that portion thereof which is legal is not affected by the other portion of the contract that is illegal. (Norwalk v. Marcus, 235 App. Div. 211; 261 N. Y. 615; Hoover Steel Ball Co. v. Schaefer Ball Bearings Co., 90 N. J. Eq. 164; Atwater v. Stromberg, 77 N. W. Rep. 963; Knight v. Jeff Davis Banking Co., 120 S. E. Rep. 696; Jackman v. Continental Nat. Bank,
      16 Fed. Rep. [2d] 728; Goldwyn Loan & Investment Corp. v. Weinfeld, 144 Misc. Rep. 159; Richards v. Wiener Co., 207 N. Y. 59.) Plaintiff’s cause of action is at law for money had and received and not in equity for rescission, and the tender made was, therefore, sufficient. (Chapman v. Forbes, 123 N. Y. 532; National Surety Co. v. Manhattan Mortgage Co., 185 App. Div. 733; 230 N. Y. 545; Bank of United States v. National City Bank, 123 Misc. Rep. 801.)

      John J. Cunneen for respondent.
    Defendant made no agreement to sell the real estate to the mortgage company; made no sale to the mortgage company and the moneys defendant received on the sale were not moneys of the mortgage company. (Clews v. Jamieson, 182 U. S. 461; Richards v. Wiener Co., 207 N. Y. 59; Fraw Realty Co. v. Natanson, 261 N. Y. 396; Natelson v. A. B. L. Holding Co., 260 N. Y. 233.) Even if the defendant made a conveyance directly to the mortgage company and if such mortgage company violated the law in purchasing the real estate, the conveyance would not be void but only voidable and the sovereign State alone could object thereto. (Mutual Life Ins. Co. v. Stephens, 214 N. Y. 488; Silver Lake Bank v. North, 4 Johns. Ch. 370; Fritts v. Palmer, 132 U. S. 282; Burden v. Burden, 159 N. Y. 287; Kerfoot v. Farmers & Merchants Bank, 218 U. S. 281; Brown v. Schleier, 112 Fed. Rep. 577; 194 U. S. 18; Long v. Georgia Ry. Co., 91 Ala. 519.) Before action brought there was no tender to plaintiff of a conveyance of the property. (E. T. C. Corp. v. Title G. & T. Co., 271 N. Y. 124; Youngman v. Smadbeck, 64 Misc. Rep. 60; Cornwell v. Sanford, 222 N. Y. 248; Miles v. Casualty Co. of America, 203 N. Y. 453.) Assuming plaintiff’s theory that the purchase of the guaranteed mortgages was conditioned upon sale of the real estate to the mortgage company and that the contract might possibly be rescinded, plaintiff should have tendered back the money paid for the guaranteed mortgages before he can claim a rescission. (Francis v. N. Y. & B. Elev. R. R. Co., 108 N. Y. 93; Cox v. Stokes,
      156 N. Y. 491; Cobb v. Hatfield, 46 N. Y. 533; New York State Loan & Trust Co. v. Helmer, 77 N. Y. 64.)
   Lehman, J.

The defendant bank purchased from Lawyers Mortgage Company, a corporation organized under the Insurance Law (Cons. Laws, ch. 28), two guaranteed mortgages aggregating about $177,000. The purchase was made by the defendant through a broker. The broker, to induce the purchase, told the president of the defendant bank that he believed that, if the defendant bank would agree to purchase the mortgages, he could arrange to sell for the bank a piece of real property which the bank had purchased upon a foreclosure sale. In" accordance with an agreement arrived at after negotiations through the broker, the bank purchased the mortgages and sold a piece of property which it owned for $76,500. The real property was transferred to Terrace Realty Corporation. The broker who arranged the transaction was the president of that corporation, but he acted throughout the transaction, both in the sale of the guaranteed mortgages to the bank and in arranging for the purchase of the real property from the bank, as agent for the Lawyers Mortgage Company; and Terrace Realty Company held title to the real property only for the benefit of the bank. Fourteen thousand dollars of the purchase price of that property was paid in cash. That money was paid by the Terrace Realty Company to the bank, but Lawyers Mortgage Company promptly gave the Terrace Realty Company its check for the same amount.

Section 20 of the Insurance Law provides:

Restrictions as to real property. Every insurance corporation transacting business in this state may purchase, hold and convey real property only for the following purposes and in the following manner:

“ 1. The building in which it has its principal office and the land upon which it stands.

“2. Such as shall be requisite for its convenient accommodation in the transaction of its business.

3. Such as shall have been acquired for the accommodation of its business.

4. Such as shall have been mortgaged to it in good faith by way of security for loans previously contracted or for moneys due.

“ 5. Such as shall have been conveyed to it in satisfaction of debts previously contracted in the course of its dealings.

6. Such as shall have been purchased at sales upon judgments, decrees or mortgages obtained or made for such debts.

“ 7. Such as shall have been acquired under sections sixteen and seventeen of the general corporation law.”

It is undisputed that the real property which the defendant bank sold was not purchased for any of the purposes authorized by this section of the Insurance Law. The Superintendent of Insurance has taken possession of the assets and business of Lawyers Mortgage Company «as rehabilitator. Because Lawyers Mortgage Company has no right to purchase or hold the property sold by the defendant bank, the Superintendent of Insurance seeks the return of the purchase price paid for the property. The complaint alleges that the plaintiff herein notified the defendant of his intention to rescind such sale, and has offered and is ready to reconvey to the defendant the aforesaid premises, and to pay to the defendant all of the moneys received in the operation of said property, as well as the brokerage commissions paid by the defendant, and to account to the defendant for all moneys received in the operation of said premises.”

There can be no doubt that Lawyers Mortgage Company was the actual purchaser of the real property from the defendant bank and that it had no right to make such purchase even though it acted through a dummy corporation. In that purchase it used the moneys of the corporation for a purpose not permitted by law. The plaintiff maintains that this was not merely an ultra vires act, but a violation of statute which renders the corporation, as well as the officers who authorized that violation, guilty of a misdemeanor under section 29 of the Penal Law. (Gardner v. People, 62 N. Y. 299, but cf. Mutual Life Ins. Co. v. Stephens, 214 N. Y. 488.) Upon the trial the complaint was dismissed at the close of the plaintiff’s evidence. The trial judge assumed that the evidence showed that the defendant knew that it was selling the real property to the Lawyers Mortgage Company. He did not decide whether the plaintiff might rescind the agreement of purchase, made through its agent, with the bank, provided it at the same time offers to restore the defendant to the same position it occupied when the agreement was made. The defendant is ready to rescind the sale by it to the Lawyers Mortgage Company and to repay $14,000 it received, provided the purchase by it of the two guaranteed mortgages from Lawyers Mortgage Company be rescinded at the same time, and the purchase price of $177,000, which it paid to Lawyers Mortgage Company, be returned to it. The ground of dismissal of the complaint was that purchase of the mortgages and sale of the real property constituted a single transaction and that there can be no rescission of a part of the transaction.

Assuming as the trial judge did that the defendant bank knew that it was selling the real property to the plaintiff through a dummy, there can be no doubt that the defendant became a party to a transaction not permitted by law. Assuming further, without so deciding, that the law prohibited the transaction and made it illegal and not merely ultra vires, the Lawyers Mortgage Company was certainly at least as guilty as the defendant bank, and, therefore, could not itself rescind the transaction.

The plaintiff, indeed, concedes in his brief that Lawyers Mortgage Company would not itself have had a right to rescind an executed sale on that ground. He maintains, however, that when he takes possession of the business and assets of a corporation organized under the Insurance Law, he represents not only the corporation but the creditors of the corporation, and that acting for the creditors he may rescind illegal transactions of the corporation which the corporation itself could not rescind. (Porter v. Williams, 9 N. Y. 142; Pittsburg Carbon Co. v. McMillin, 119 N. Y. 46; Duval v. Wellman, 124 N. Y. 156.)

Whatever right the plaintiff may have to rescind an illegal transaction of the Lawyers Mortgage Company, rescission of the contract and demand for the return of the consideration paid by the corporation under the contract must, it is plain, be accompanied by return, or offer to return, the consideration which Lawyers Mortgage Company received under the same contract. The bank stipulated that purchase by it of the mortgages and sale by it of the real property should be dependent on each other. In this case the mortgage company received and retains the sum of $177,000 for guaranteed mortgages which may or may not be worth that amount. So long as it retains that money it has no right to demand the return of $14,000 which it paid to purchase real property which may or may not be worth the purchase price.

The plaintiff urges that he cannot return to the bank the sum of $177,000 which the defendant paid for the purchase of guaranteed mortgages without in effect giving the defendant a preference over holders of other mortgages guaranteed by the Lawyers Mortgage Company, and that under these circumstances the court should sever the illegal part of the transaction, to wit, the sale of the real property, from the legal part of the transaction, to wit, the purchase of the guaranteed mortgages. In Norwalk v. Marcus (235 App. Div. 211; affd., 261 N. Y. 615) enforcement was refused of an illegal provision for the repurchase by a corporation of its corporate stock which had been inserted in a contract of sale of that stock which was otherwise valid. There rescission of the entire contract and return of the purchase money paid to the corporation would have the same effect as enforcement of the illegal provision for repurchase and thus would defeat the policy of the law in forbidding a corporation from making a contract to repurchase its stock except out of surplus. (Cf., also, Hoover Steel Ball Co. v. Schaefer Ball Bearings Co., 90 N. J. Eq. 164.) The court, then, refused to grant any relief to one guilty party against another guilty party. Here the plaintiff is asking relief from the court, and the severance of the legal from the illegal would place Lawyers Mortgage Company and its creditors in a better position than if the contract had not been made. The company would retain part of the fruits of the illegal transaction, the fruits of its own wrong, and the defendant would not be put in the same position as it occupied before the transaction.

For these reasons the judgment of thp^court below should be affirmed, with costs. /

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

Judgment affirmed.


text:
    In the Matter of Robert Seignious, Respondent, against John L. Rice, as Commissioner of Health of the City of New York, et al., Appellants.

      Argued November 19, 1936;
    decided December 31, 1936.

      Paul Windels, Corporation Counsel (Seymour B. Quel and Paxton Blair of counsel), for appellants.
    The plumbing industry vitally affects the public health and the provisions of section 1576 of the charter of the city of New York (added by L. 1936, ch. 610), under which plumbers previously licensed may be re-examined as to their qualifications, are, therefore, valid. (People ex rel. Nechamcus v. Warden, 144 N. Y. 529; Gundling v. Chicago, 177 U. S. 183; Rosenthal v. New York, 226 U. S. 260; Brazee v. Michigan, 241 U. S. 340; Matter of Mc Kenney v. McGoldrick, 266 N. Y. 665; People ex rel. Bronx Parkway Comm. v. Common Council, 229 N. Y. 1; Matter of Mandel v. Board of Regents, 250 N. Y. 173.) The limitation of the right to re-examine under section 1576 of the charter to plumbers licensed since January 1, 1920, may not be deemed to be so unreasonable as to render the statute unconstitutional. (People v. Beakes Dairy Co., 222 N. Y. 416; People ex rel. Bryant v. Zimmerman, 241 N. Y. 405; Ozan Lumber Co. v. Union County Nat. Bank, 207 U. S. 251; Louisville & Nashville R. R. Co. v. Melton,
      218 U. S. 36; Lindsley v. Natural Carbonic Gas Co., 220 U. S. 61; Patsone v. Pennsylvania, 232 U. S. 138; International Harvester Co. v. Missouri, 234 U. S. 199; Metropolitan Casualty Ins. Co. v. Brownell, 294 U. S. 580; Darweger v. Staats, 267 N. Y. 290.)

      Abraham Bernard King and Joseph F. Ryan for respondent.
    Section 1576 of the charter is capricious and arbitrary class legislation. (Yick Wo v. Hopkins, 118 U. S. 356; Gundling v. Chicago, 177 U. S. 183; Matter of Jacobs, 98 N. Y. 98; People v. Gillson, 109 N. Y. 389; People v. Ringe, 197 N. Y. 143; Hauser v. North British & Mer. Ins. Co., 206 N. Y. 455; People ex rel. Nechamcus v. Warden, 144 N. Y. 529; Schnaier v. Navarre Hotel & Imp. Co., 182 N. Y. 83; State of Ohio v. Gardner, 58 Ohio St. 599.) Section 1576 of the charter is discriminatory and unconstitutional by reason of the fact that petitioner may be compelled to submit to re-examination at any time, and for no reasons, while plumbers licensed prior to January 1, 1920, are exempt from such re-examination. (Rosalsky v. State, 254 N. Y. 117; Stuart v. Palmer, 74 N. Y. 183; Matter of Richardson, 247 N. Y. 401; Replogle v. Little Rock, 166 Ark. 617.) The acts of the Commissioner of Health are arbitrara, capricious and unreasonable in subjecting all master plumbers licensed after January 1, 1930, to re-examination pursuant to section 1576 of the charter. (Campbell Baking Co. v. City of Harrisonville 50 Fed. Rep. [2d] 670.) Petitioner possesses a right to his license as a master plumber which may not be interfered with by re-examination, nor may such re-examinatian be used as a basis for refusal to renew it. (Matter of Cooper, 22 N. Y. 67.)

      Edward Weinfeld and Burton A. Zorn for Harry Field et al., amici curice.

    The exemption of all plumbers who received their licenses prior to January 1, 1920, constitutes an arbitrary, discriminatory and unreasonable classificar tian in violation of the due process and equal protection provisions of the Constitutions of the United States and of the State of New York. (Adams v. Tanner, 244 U. S. 590; Weaver v. Palmer Bros. Co., 270 U. S. 402; Schlesinger v. Wisconsin, 270 U. S. 230; Yick Wo v. Hopkins, 118 U. S. 356; Liggett v. Baldridge, 278 U. S. 105; Arkansas Natural Gas Co. v. Arkansas R. Commission, 261 U. S. 379; Atchison, T. & S. F. R. Co. v. Matthews, 174 U. S. 96; Truax v. Corrigan, 257 U. S. 312; Southern Ry. Co. v. Greene, 216 U. S. 400; Gulf Col. & S. F. Ry. v. Ellis, 165 U. S. 150; St. John v. New York, 201 U. S. 633; Mo. Pac. Ry. Co. v. Mackey, 127 U. S. 205; People v. Griswold, 213 N. Y. 92; Hauser v. North British & Mer. Ins. Co., 206 N. Y. 455; People v. Ringe, 197 N. Y. 143; People ex rel. Hatch v. Reardon, 184 N. Y. 431.) Section 1576 of the charter operates as a revocation of all existing master plumbers’ licenses issued after January 1, 1920, without cause and constitutes a deprivation of plaintiff’s property rights without due process of law. (Fox Amusement Co. v. McClellan, 62 Misc. Rep. 100; Matter of Picone v. Comm. of Licenses, 241 N. Y. 157; People ex rel. Greenberg v. Reid, 151 App. Div. 324; Kalman v. Walsh, 355 Ill. 341; People v. Love, 298 Ill. 304; Czarra v. Board of Medical Supervisors, 25 App. D. C. 443; Hewitt v. Board of Medical Examiners, 148 Cal. 590; Williams v. People, 121 Ill. 84; Matter of Yates v. Mulrooney, 245 App. Div. 146; Schnaier v. Navarre Hotel & Importation Co., 182 N. Y. 83.)
   Lehman, J.

In 1930, after examination by the Examining Board of Plumbers of the City of New York, and the receipt of a certificate of competency from the Board, the petitioner, Robert Seignious, was licensed as a master plumber and, in accordance with the provisions of the Greater New York Charter (Laws of 1901, ch. 466), he has registered his name annually as a licensed master plumber and thus renewed his license without taking a new examination. The Legislature, by chapter 610 of the Laws of 1936, repealed title 5 of. chapter 23 (erroneously numbered “ 21 ” in the statute) of the Greater New York Charter entitled Examining Board of Plumbers,” and instituted a new title 5, “ Licensing of Plumbers.” The new title provides, among other things, that the Commissioner of Health shall have cognizance and control of the granting, issuing, transferring, renewing, revoking, suspending and canceling of all licenses to engage in the trade, business or calling of duly registered and licensed master plumbers. (§ 1572.) The Commissioner is forbidden to issue any license to any person who is not certified osa successful candidate by the municipal civil service commission but shall issue such license to any successful candidate, unless the license of such candidate has been previously revoked or suspended.” (§ 1573.) The title further provides that the commissioner of health or the municipal civil service commission may require as a condition of renewal of any plumber’s license issued after January first, nineteen hundred twenty, that the holder of such license qualify for such renewal by successfully passing an examination by the municipal civil service commission as herein provided.” (§ 1576.)

The Commissioner of Health has issued a notice to all licensed master plumbers who received their certificate of competency after January 1, 1930, that they will be required to. qualify for a renewal of their licenses after January 1, 1937, by successfully passing a new examination by the municipal civil service commission. The petitioner, in mandamus proceedings, has successfully challenged the validity of the statute which purports to empower the Commissioner to require such an examination.

The Legislature has power to regulate the vocation of master plumbers and to require that the vocation shall be restricted to persons who have obtained licenses after proof of their competency. (People ex rel. Nechamcus v. Warden, 144 N. Y. 529.) A license does not create a vested right to continue to carry on that vocation if there is reasonable ground for requiring new proof of competency by a re-examination, and here it may hardly be questioned that reasonable ground does exist. The Legislature may not, however, arbitrarily discriminate among applicants who seek to enter or to continue a lawful vocation, and in this case the petitioner’s challenge is directed, principally, to those features of the statute which it is said create an unlawful discrimination against the petitioner and others required by the Commissioner to take the examination.

The statute divides licensed master plumbers into two classes: Those in the class composed of persons who received their licenses before January !, 1920, are entitled to renewal of their licenses without re-examination; those in the other class, composed of persons who received their licenses thereafter, may be required to take such an examination as a condition of renewal of their licenses. The petitioner contends that the classification is not based upon reasonable ground, and that the discrimination which it creates is arbitrary. The dividing line between these classes is drawn by the Legislature and has at least the merit that it is clearly marked; every licensed master plumber knows that he belongs in one class or another, and it is the Legislature which has placed him there. We need not now pause to consider whether the Legislature acted reasonably in drawing that line. The provision that the Commissioner may require those who received their licenses after January 1, 1920, to be re-examined leaves him free to make further discriminations among the members of that class. There the Legislature has not drawn any line of cleavage, nor indicated a standard or measure by which the Commissioner might draw such line and thus carry out a policy formulated by the Legislature in differentiating between those who shall take the examination and those who shall be exempt. In effect, the Legislature has said to the Commissioner that within the general class of those who received their licenses after January 1, 1920, he may select those persons who, in his opinion, shall be re-examined or in his discretion may require that all or none be re-examined. Authorization given to an administrative officer to choose without providing a measure or standard for such classification is beyond the power of the Legislature.

We are told that the Legislature here has merely conferred an administrative power upon an administrative officer. The powers which the Legislature has endeavored to confer are more than administrative. Only the Legislature may decree that a person shall not pursue a lawful vocation without first passing an examination, and a provision in a statute that an administrative officer shall, in accordance with his untrammeled discretion, and according to his own ideas, determine who shall take an examination and who shall be exempt, constitutes a delegation of a legislative power.

The Legislature may delegate to the administrative officer who has been given control of the granting of licenses a measure of discretion in the formulation of tests for the determination of fitness of applicants for a license. (Douglas v. Noble, 261 U. S. 165; Matter of Elite Dairy Products, Inc., v. Ten Eyck, 271 N. Y. 488.) The Legislature cannot grant to an administrative officer plenary power to discriminate between applicants, requiring some to prove their fitness and granting a license to others without such proof. The Legislature is free to choose among conflicting considerations, and mould the law according to its own will subject only to constitutional restrictions. It cannot delegate the same freedom of choice to an administrative officer. There it must erect guide posts which will enable the officer to carry out the will of the Legislature.

We may assume that in the exercise of the powers which the Legislature has sought to confer on the Commissioner of Health he will act reasonably. None the less, if the statute is valid, he may pick and choose among individuals without formulating a general standard to be used in classification and without being bound by any standard formulated by the Legislature. That is not the grant of an incidental power, it is the delegation of a legislative power. It is indeed more than that; it is the grant of a power to discriminate in the matter of a man’s right to continue to carry on his business, not only between classes of applicants, but even between individuals in accordance with his own judgment of what is best in that particular case. That the Legislature has no power to do. (People v. Klinck Packing Co., 214 N. Y. 121.)

The order should be affirmed, without costs.

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

Order affirmed.


text:
    In the Matter of Atlas Television Co., Inc. The City of New York, Appellant; Nathaniel H. Mandelker, Respondent.
    Argued December 3, 1936;
    decided December 31, 1936.

      Paul Windels, Corporation Counsel (Paxton Blair, Oscar S. Cox and Sol Charles Levine of counsel) for appellant.
    Since the city was imposing the taxes in question for State purposes as the agent or deputy of the State' itself, it is identifiable with the State, which enjoys priority both as to taxes and as to debts. (New York Steam Corp. v. City of New York, 268 N. Y. 137; Matter of Carnegie Trust Co., 206 N. Y. 390; Marshall v. New York, 254 U. S. 380.) Apart from its right as the State’s agent performing State functions, the city is entitled to priority because the sum in question is owed to the city in its sovereign or governmental capacity. (Matter of Northern Bank of New York, 85 Misc. Rep. 594; 163 App. Div. 974; 212 N. Y. 608; Matter of Receivership of Columbian Ins. Co., 3 Abb. Dec. 239; Wise v. Wise Co., 12 App. Div. 319; 153 N. Y. 507; Matter of Atlas Iron Constr. Co., 19 App. Div. 415; Matter of Donaldson, 27 Misc. Rep. 745; Matter of Welsbach Incandescent Gaslight Co., 59 N. Y. Supp. 1006; Matter of Ripson & Newland Fur Co., 32 Misc. Rep. 56; Matter of Bowlby, 34 Misc. Rep. 311; Mixter v. Mohawk Clothing Co., 155 N. Y. Supp. 647; Matter of Empire State Surety Co., 125 Misc. Rep. 806.) The claim is one for taxes and not for a mere debt. (Matter of Stalker, 123 Fed. Rep. 961; Roosevelt Hospital v. Mayor, 84 N. Y. 108; Dayton v. Stanard, 241 U. S. 588; Matter of Glover-McConnell Co., 9 Fed. Rep. [2d] 683; Matter of Industrial Cold Storage & Ice Co., 163 Fed. Rep. 390.)

      Frederick E. Hammer, Nathaniel H. Mandelker and Benjamin N. Brody for respondent.
    The question of priority of payment to the city of New York is to be determined solely by statutes enacted by the State Legislature or by ordinances enacted by the Municipal Assembly. (Matter of Northern Bank of New York, 212 N. Y. 608; Matter of Carnegie Trust Co., 151 App. Div. 606; 206 N. Y. 390; Ætna Casualty & Surety Co. v. Bramwell, 12 Fed. Rep. [2d] 307; Matter of City of Rochester v. Bloss, 185 N. Y. 42; Matter of Waller, 142 Fed. Rep. 883; N. Y. Steam Corp. v. City of New York, 268 N. Y. 137; U. S. Fidelity & Guaranty Co. v. Rainey, 120 Tenn. 357; People v. Ohle, 345 Ill. 405; Sturgis v. Meade County Bank, 38 S. D. 317; Bignell v. Cummins, 69 Mont. 294; Phillips v. Yates Center Nat. Bank, 98 Kan. 383; Multnomah County v. Oregon Nat. Bank, 61 Fed. Rep. 912; San Miguel County v. Peoples Bank & Trust Co., 34 N. M. 166; Boone County v. Cantley, 330 Mo. 911; Frederick County v. Page, 163 Md. 619; Matter of Valley Deposit & Trust Co., 311 Penn. St. 495.) The city’s claim does not fall within the classes of preference for taxes granted to sovereignties since the city is not a sovereignty nor is its claim a tax but a general debt. (Matter of Wyoming Valley Ice Co., 145 Fed. Rep. 267; Commonwealth v. Railroad, 186 Penn. St. 235; Commonwealth of Pennsylvania v. York Silk Mfg. Co., 192 Fed. Rep. 81; 232 U. S. 718; Nolte v. Hudson Navigating Co., 8 Fed. Rep. [2d] 859; Shannopin Country Club v. Heiner, 2 Fed. Rep. [2d] 393; Union Pacific Ry. Co. v. Bowers, 33 Fed. Rep. [2d] 102; Matter of Waller, 142 Fed. Rep. 883; Matter of Lazaroff, 84 Fed. Rep. [2d] 982.)
   Lehman, J.

In April, 1936, Atlas Television Co., Inc., made an assignment for the benefit of creditors. The city of New York filed a claim for taxes imposed pursuant to the provisions of Local Law No. 24 of the City of New York for the year 1934.” The assignee allowed the claim but refused to accord it priority over claims filed by other creditors. The court at Special Term held that the city was entitled to priority in the payment of its claims. The Appellate Division by a divided court held otherwise, but granted leave to appeal and certified the question: In a general assignment for the benefit of creditors made pursuant to the statutes of this State, is the claim of the City of New York for sales taxes which the assignor was obligated under Local Law No. 24 of 1934 to pay to the Comptroller, entitled to a preference? ”

No statute in express terms provides a general priority in favor of the State or of a governmental agency of the State in the payment of debt's due from an insolvent debtor. Even without such statutory provision the State as the holder of the sovereign power has a preference over other debtors in insolvency proceedings. (Matter of Carnegie Trust Co., 206 N. Y. 390.) That is not true generally of debts due to cities of the State though such cities at times exercise governmental powers delegated to them. (Matter of Northern Bank of New York, 85 Misc. Rep. 594; affd. on the opinion of Mr. Justice Lehman, 163 App. Div. 974; affd., 212 N. Y. 608.)

In the opinion at Special Term I wrote: The power to tax is a sovereign power and the city in laying a tax is acting as part of the State under authority given it by the people of the State, and in the exercise of this power it is entitled, I think, to all the prerogatives enjoyed by the sovereign under our common law, and its right to a preference in the distribution of the assets of an insolvent corporation has been declared in Matter of the Receivership of Columbian Insurance Co., 3 Abb. Ct. App. Dec. 242; and in Matter of Atlas Iron Construction Co., 19 App. Div. 415, and recognized in Matter of Carnegie Trust Co., supra. See, also, S. C., 151 App. Div. 606. In this case, however, the city seeks to go further, and claims a preference for taxes already collected by the city authorities. It seems to me that as soon as the taxes have been collected and deposited, the city’s claim to these moneys ceases to be the claim of a sovereign” (p. 596).

The Court of Appeals in affirming without opinion the decision in that case that upon the liquidation of an insolvent bank the city has no preference for moneys collected as taxes and deposited in the bank, has not necessarily approved of the assumption in my opinion that the city would have preference in the collection of a tax due from an insolvent corporation. The assignee does not, however, challenge the distinction pointed out in the Northern Bank case. It is supported by authority, and seems to rest in reason. A tax has been defined as “ a statutory liability imposed upon all the inhabitants of the state defined as taxable, to the end that they may contribute their just share to the expenses of government.” (Village of Charlotte v. Keon, 207 N. Y. 346, 348.) Where taxes are not collected, the burden which one taxpayer escapes is placed upon those who do pay. Thus justice and fairness in government dictates equality in collection of taxes required to maintain the government, and justifies the assertion of the prerogatives of a sovereign in demanding a preference in collection over the claims of creditors. The courts below, too, have assumed that the city has such a preference in the collection of taxes. Preference has been denied in this case because in the opinion of the Appellate Division the city’s claim is not for taxes due to the city from the insolvent, but for moneys collected by the insolvent as agent for the city.

The city of New York was empowered by the Legislature to impose taxes for relief. (Laws of 1934, ch. 873.) Pursuant to that statute the local legislative body of the city passed Local Law No. 24 ” (published as Local Law No. 25; Local Laws of 1934, pp. 164-175) which provides that “ 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,” etc. (§ 2.) Concededly the insolvent assignor has sold property at retail, and has not paid any tax upon the receipts of the sales. It is the contention of the assignee that even though the vendor of property is the person entitled to the receipts from every sale,” the tax is laid upon the purchaser, and that the vendor is required only to collect the tax as the collecting agent of the city and though required to pay to the city the amount of the tax, his liability is only that of an ordinary debtor.

The statute contains provisions which lend support to the respondent’s contentions. It places obligations upon both vendor and purchaser and describes these obligations as follows:

Upon each taxable sale or service the tax to be collected shall be stated and charged separately from the sale price or charge for service and shown separately on any record thereof, at the time when the sale is made or evidence of sale issued or employed by the vendor and shall be paid by the purchaser to the vendor, for and on account of the city of New York, and the vendor shall be hable for the collection or the service rendered; and the vendor shall have the same right in respect to collecting the tax from the purchaser, or in respect to nonpayment of the tax by the purchaser, as if the tax were a part of the purchase price of the property or service and payable at the time of the sale.

“ Where a purchaser has failed to pay and a vendor has failed to collect a tax upon a sale or service, as imposed by this local law, then in addition to all other rights, obligations and remedies provided, such tax shall be payable by the purchaser directly to the comptroller and it shall be the duty of the purchaser to file a return thereof with the comptroller and to pay the tax imposed thereon to the comptroller within fifteen days after such sale was made or service rendered” (§ 2).

In a bankruptcy proceeding it has been held that the obligations so defined constitute a tax upon the purchaser and a debt of the vendor in the amount of money which he collected or should have collected from the purchaser and that the city is entitled to no preference in the payment of that debt in bankruptcy proceedings of the debtor, since the city is entitled to no preference under the laws of the State of New York. (Matter of Lazaroff, 84 Fed. Rep. [2d] 982.)

We might agree with that conclusion if the local law did not contain other provisions which indicate that the obligation imposed upon the vendor is in the nature of a tax. He must file a return of his receipts from sales. (§ 5.) The duty of payment to the city is laid upon the vendor, not the purchaser. His liability is not measured by the amount actually collected from the purchaser but by the receipts required to be included in such return. (§ 6.) He must pay the tax even if failure to collect is due to no fault of his own. Indeed the city has insisted that a vendor is liable for a tax of two per cent upon the amount of his receipts even from sales within the amount, stated in regulations promulgated by the Comptroller pursuant to section 3 of the local law, upon which no tax need be collected from the purchaser.” (Queens Vending Cory. v. City of New York, 246 App. Div. 594.)

Whether the city is entitled to a priority depends upon whether its claim is that of the sovereign people, acting through the agency of the city, or is that of the city acting as a semi-private municipal corporation. Taxation is an attribute of sovereignty and the city acts as sovereign when it imposes an obligation upon its inhabitants to contribute to the expenses of government and when it collects that obligation. That is true no less if we denominate the obligation by some other term than a tax,” so long as it constitutes an obligation created by the sovereign to contribute to the expense of government. Distinctions resting solely in words should carry here no legal consequences. We must look to the substance of the obligation.

From that point of view it seems clear that the city is entitled to a priority. It has imposed a tax as sovereign and to meet a need which concerns the welfare of the State. It has provided that the vendor of property-must pay the tax to it. Though the vendor is required, at least in most cases, to collect the tax from the purchaser “ for and on account of the city,” the purpose of that provision is to place the incidence of the tax immediately on the consumer. The city can collect only from the vendor. The vendor’s obligation to pay the tax is not measured by the amount collected nor dependent upon failure to exercise the diligence in collection which would be required of an agent. It is an obligation measured by the receipts of the vendor and created by the local law. If the city has no priority in collecting a claim founded upon this obligation, the other creditors of the vendor share in money collected by the vendor for payment to the city. Fine-spun distinctions are here out of place. The local law provides that the vendor shall pay the tax ” and the city is entitled as sovereign to priority for such payment.

The order of the Appellate Division should be reversed and that of the Special Term affirmed, without costs. The question certified should be answered in the affirmative.

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

Ordered accordingly.


author: O’Brien, J.

text:
    In the Matter of Louis Siraguso, Respondent, against Joseph W. Moore et al., Constituting the Parole Board of the State of New York, Appellants.
    Argued January 4, 1937;
    decided January 12, 1937.

      John J. Bennett, Jr., Attorney-General (Henry Epstein and Caleb Candee Brown, Jr., of counsel), for appellants.
    Appellants have failed in no duty, the performance of which should be compelled by mandamus. (Cons. Laws, ch. 43, §§ 210, 212, 213, 214; People v. Washington, 264 N. Y. 335; People v. Adams, 176 N. Y. 351; Matter of Hogan v. Canavan, 245 App. Div. 391.)

      Ward R. Burns and Robert J. Fitzsimmons for respondent.
    The petitioner is subject to the jurisdiction of the Parole Board., and now entitled to be paroled for the purpose of serving his second sentence. (Cons. Laws, ch. 43, §§ 210, 212; People ex rel. Mason v. Brophy, 235 App. Div. 432; Matter of Lewis v. Carter, 220 N. Y. 8.)
   O’Brien, J.

March 28, 1927, Louis Siragusó was sentenced for robbery in the first degree for a term of not less than twenty nor more than forty years. By good conduct this minimum has been reduced so that the minimum expired May 21, 1934. On June 14, 1927, he was again convicted. This second conviction was for manslaughter in the first degree, committed prior to his conviction for robbery, and he was sentenced on this second conviction, as a first offender, to a term not less than ten nor more than twenty years, this second sentence to commence at the expiration of the first sentence. The minimum which he must serve under both sentences will not expire until May, 1940.

This proceeding is for mandamus to compel the Parole Board to convene and determine when the minimum term of the first sentence has been served and to consider this prisoner eligible for parole under the Correction Law (Cons. Laws, ch. 43) and to accord to him the benefits and privileges of such consideration to which he is by law entitled under the statutes.” The Special Term denied his application but the Appellate Division reversed and granted the motion for peremptory mandamus. In support of this order respondent cites section 115 of the Executive Law (Cons. Laws, ch. 18) and sections 210 and 212 of the Correction Law.

Respondent states in his brief that it is a fact of which the court may take judicial notice that it has been the policy of the Parole Board in all cases where the prisoner is serving two indefinite terms to suspend parole consideration until the expiration of the combined minimum of both sentences. The answering affidavit states that on August 23, 1934, and January 17, 1935, Siraguso was brought before the Board of Parole and his case considered on an incomplete record and that again on March 14, 1935, upon a consideration of the whole case and record, the Board determined that he should be held until the March, 1940, meeting of the Board of Parole, at which time it would then reconsider his case and take such action as it deemed advisable.

Since the minimum for the combined sentences does not expire until May, 1940, respondent points to no law imposing a duty upon the Board to take action prior to March, 1940, the date fixed by it. Sections 210 and 212 of the Correction Law and section 115 of the Executive Law relate to eligibility for “ release on parole.” The Board must meet “ at such times as may be necessary for a full study of the cases of all prisoners eligible for release on parole and to determine when * * * and to whom such parole may be granted.” (Executive Law, § 115.) The time of release shall be “ discretionary with the board of parole, but no such person shall be released until he has served such minimum sentence.” (§ 212.) The Board is under no duty to grant any release on parole and certainly no duty is cast upon it at this time to determine the date when the minimum sentence for robbery has been served nor to consider this prisoner eligible for parole. The minimum for both the crimes for which this prisoner was convicted has already been fixed by the sentence of the court and the acts of the Legislature and the Governor. The minimum sentence for burglary has already expired, but the sentence for manslaughter is still running. No prisoner is entitled as matter of right to release until he has served his maximum term minus credits for good behavior. That time has not yet arrived and will not arrive until after the time set by the Board for the consideration of this prisoner’s case.

The order of the Appellate Division should be reversed and that of the Special Term affirmed.

Crane, Ch. J., Httbbs, Lotjghran and Rippey, JJ., concur; Lehman and Finch, JJ., taking no part.

Ordered accordingly.


author: Rippey, J.

text:
    In the Matter of the Application of The City of New York to Acquire Title to East 29th Street from Avenue “ Z ” to Emmons Avenue. Ernestine Siebert, Appellant; City of New York et al., Respondents.

      Argued January 5, 1937;
    decided January 12, 1937.

      John L. Danzilo for appellant.
    Section 1083-a of the Civil Practice Act does not apply where the entire property is not sold under the foreclosure decree. Therefore, the provision in the order appealed from, calling for the entry of a deficiency judgment as a condition for the payment of the award, is not authorized. (Matter of City of New York [Neptune Ave.], 271 N. Y. 331; Cyllene Corp. v. Eisen, 272 N. Y. 526.) The appellant is entitled to interest from a time one year after the entry of the final decree in condemnation, under section 983 of the charter of the city of New York (L. 1901, ch. 466, as amd.), instead of six months’ interest, as provided for in the resettled order, under section 981. (People ex rel. Wallaston R. Co. v. Craig, 190 App. Div. 556.)

      Paul Windels, Corporation Counsel (Joseph F. Mulqueen, Jr., and Paxton Blair of counsel), for City of New York, respondent.
    The failure to file a demand for payment of the award pursuant to section 981 of the charter stopped the running of interest six months after the entry of the final decree. (Matter of City of New York [Chrystie Street], 264 N. Y. 319.)

      George Schenker for Vito Brandonisio et al., respondents.
    The acts of the appellant constituted a waiver of her right to the award. (Merriman v. City of New York, 227 N. Y. 279; Matter of Sea Beach R. Co., 148 N. Y. Supp. 1080; 121 App. Div. 907; 196 N. Y. 533.)
   Rippey, J.

On November 7, 1931, a final decree was filed in the office of the Clerk of Kings county awarding damages in the sum of $1,337.33 to Vito Brandonisio and Louisa Brandonisio, his wife, as owners of damage parcels 207 and 208, in a proceeding by the city of New York to acquire title to an extension of Twenty-ninth street from Avenue “ Z ” to Emmons avenue subject to the three mortgages mentioned below. These parcels were a part of property known as Lot 17 as shown on the map of property of the Dann Realty Corporation, situated at Sheepshead Bay, filed in the office of the Register of Kings county on March 30, 1921, as Map No. 1756. The decree provided for levying an assessment of $493.59 for benefit to the property remaining after the taking of the damage parcels.

Ernestine Siebert was record owner and holder of a first mortgage on Lot 17 on which $2,250 and accrued interest was due at the time the final decree was filed. There were two other mortgages on Lot 17, one held by Johanne M. Claussen for $2,600 and one by Ernestine Siebert for $500. The decree named the Title Guarantee and Trust Company as owner of the first mortgage and did not name the other mortgagees. In proceedings to foreclose the first mortgage a sale of the property covered by the mortgage, other than damage Lots 207 and 208, was held on August 5, 1935, at which the mortgagee became the purchaser for $1,000.

. Ernestine Siebert moved at Special Term on August 7, 1935, for an order directing the Comptroller of the city of New York to pay to her the entire amount of the award with interest less the benefit assessment and accrued taxes at the time of entry of the decree. A referee was named to take proof of the facts and report back to the court. On the hearing it appeared that Luke Brandonisio was the record owner of Lot 17, which included the damage parcels. It also appeared that the amount required by the referee on the sale in the foreclosure proceedings to cover the amount due the mortgagee, taxes, costs and expenses of foreclosure and benefit was $4,545.49. After applying the $1,000 for which the mortgagee bid in the property, there remained a deficiency of $3,545.49, and the referee who sold the property so reported to the court on August 19, 1935. It also appeared that the receiver in the foreclosure action had collected rents and that the net amount in his hands was paid to the mortgagee, leaving a neb deficiency of $3,258.04. The referee reported to the court that Ernestine Siebert was entitled to the full amount of the award together with lawful interest subject to the payment of the assessment for benefit with interest from the date of entry of the decree, subject to a ruling by the court on the claim by the city that she was not entitled thereto because she had not been granted a deficiency judgment. When the report came on for confirmation, the court held, upon motion of the Corporation Counsel, that Ernestine Siebert must enter a deficiency judgment if possible, but, if not possible, she must apply at the foot of the order to be entered for a determination by the court of the deficiency resulting from the sale of the premises at foreclosure in the manner provided in section 1083-a of the Civil Practice Act as a condition precedent to payment to her of the whole or of any part of the award. An order to that effect and otherwise approving the report of the referee was made and entered on October 10, 1935. The Comptroller of the city of New York thereupon moved to resettle the order. On November 14, 1935, an order was entered denying the motion to resettle, vacating the order of October 10, 1935, but again confirming the report of the referee with the modification and condition that the mortgagee must proceed to secure a deficiency judgment pursuant to section 1083-a of the Civil Practice Act before she could have any part of the award and that interest on the award should be allowed under the provisions of section 981 of the Greater New York Charter (Laws of 1901, ch. 466, as amd. L. 1915, ch. 606). That section provides that, in the absence of a demand on the Comptroller for payment, interest should be computed on the award for six months only after the date of filing the decree. The Appellate Division of the second department affirmed the order by a divided court. (247 App. Div. 648.)

When a part of the mortgaged property was taken in condemnation proceedings the award was subject to the lien of the mortgage on the whole. (Matter of City of New York [Houghton Ave.], 266 N. Y. 26.) The amount due on the first mortgage, after applying the amount received on the sale of the property not taken by the city, exceeded the amount of the award. The mortgagee was entitled to the whole award with interest less the benefit assessment. She was not required to proceed in the manner specified in section 1083-a of the Civil Practice Act to procure a deficiency judgment or to attempt otherwise to enter a judgment for a deficiency before she became entitled to payment from the city. (Matter of City of New York [Neptune Ave.], 271 N. Y. 331.) The filing of the report of the referee in foreclosure showing the amount of deficiency was sufficient.

Section 983 of the city charter provides that when the name of the owner of the property taken shall not be set forth or mentioned in the final decree, or in the report of the commissioners, as the case may be, or where there are adverse or conflicting claims to the money awarded as compensation, the city shall pay such award into the Supreme Court. The name of the owner was not set forth as required, notwithstanding his name was a matter of public record. The city knew and the decree showed that there were conflicting claims to the award. Nevertheless, the money was not paid into court. There was nothing to interfere with the city’s complying with the provisions of the charter. Had there been an obstacle present it might have relieved the city from paying interest while that obstacle stood in the way. (Matter of Bergen, 237 N. Y. 452.) It is provided in section 983 that, in default of such payment, the city shall be and remain liable for the award with lawful interest thereon from a date one year after the date of the final decree. Interest must be added to the award at the rate of six per cent per annum from November 7, 1932.

The orders appealed from should be reversed, with costs in this court and in the Appellate Division, and the matter remitted to the Special Term to enter an order in accordance with this opinion on the report of the referee, with costs. (See 273 N. Y. 582.)

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

Ordered accordingly.


author: Per Curiam.

text:
    In the Matter of Frank J. McGowan et al., Appellants, against The Board of Education of the City of New York et al., Respondents, and James E. Finegan et al., as Members of the Municipal Civil Service Commission of the City of New York et al., Appellants.
    Argued January 5, 1937;
    decided January 12, 1937.

      Paul Windels, Corporation Counsel (Edmund L. Palmieri and Paxton Blair of counsel), for Municipal Civil Service Commission of the City of New York et al., appellants.
    The Board of Education of the City of New York had no power to create the position of medical inspector. (Cons. Laws, ch. 16, § 570; Spencer v. Ryan, 237 App. Div. 50; 262 N. Y. 600; People ex rel. Weeks v. Ward, 162 N. Y. Supp. 744; 179 App. Div. 905; Matter of Jaffe v. Board of Education, 265 N. Y. 160; Hurley v. Board of Education of City of New York, 270 N. Y. 275.)

      Nicholas Howard Pinto for Board of Education of the City of New York, respondent.
    The Board of Education was fully empowered by law to amend its by-laws so as to reorganize its medical staff and establish the position of school medical inspector. (Jaffe v. Board of Education, 265 N. Y. 160; Lewis v. Board of Education, 258 N. Y. 117; Matter of Brady v. Board of Education, 136 Misc. Rep. 1; Matter of Rhynehart v. Spaulding, 137 Misc. Rep. 820; Matter of Cusack v. Board of Education, 174 N. Y. 136; Morris v. Board of Education, 54 Misc. Rep. 605; People ex rel. Wood v. Draper, 15 N. Y. 532; Thomson v. Board of Education, 136 App. Div. 721; People v. Prendergast, 164 N. Y. Supp. 1042; People v. Mischler, 228 N. Y. Supp. 675.) The civil service list is inappropriate for medical examiner in the Board of Education. (Matter of Fink v. Finegan, 270 N. Y. 356; People ex rel. Pettit v. Knox, 31 Misc. Rep. 440.)

      Austin B. Mandel for Maurice C. O’Shea et al., respondents.
    Section 868 of the Education Law and chapter 195 of the Laws of 1935 give the Board of Education of the City of New York power to appoint school medical inspectors and to determine their duties. (People ex rel. West. F. I. Co. v. Davenport, 91 N. Y. 574; People v. Weinstock, 117 App. Div. 168.) A board of education has the power to rearrange the duties of its employees, even though such rearrangement will deprive a person on an eligible list from the possibility of receiving an appointment. (Weider v. Board of Education, 112 N. J. L. 631; Thomson v. Board of Education, 136 App. Div. 721; Stetson v. Board of Education, 218 N. Y. 301; Matter of Hurley v. Board of Education, 270 N. Y. 275; Matter of Cusack v. Board of Education, 174 N. Y. 136; Morris v. Board of Education, 54 Misc. Rep. 605.) Assuming that the Board of Education must appoint medical examiners, it may not be required to appoint them from the police surgeon list. (Matter of Levitch v. Board of Education,
      243 N. Y. 373; People ex rel. Brink v. Way, 92 App. Div. 82; People ex rel. Miller v. Peck, 73 App. Div. 89.)

      Albert B. Breslow for petitioners, appellants.
    The Board of Education of the city of New York has no power to appoint school medical inspectors. (Cons. Laws, ch. 16, § 570.) Even if the Board had the power to appoint school medical inspectors, it has neither power nor right to call medical examiners school medical inspectors for the sake of unjustifiably avoiding the provisions of the Civil Service Law (Cons. Laws, ch. 7). (Matter of Hirschfield v. Cook, 227 N. Y. 297; People ex rel. Swift v. Luce, 204 N. Y. 478; People ex rel. Langdon v. Dalton, 49 App. Div. 1; Spencer v. Ryan, 237 App. Div. 50; 262 N. Y. 600.)
   Per Curiam.

We agree with the courts below that the Education Law (Cons. Laws, ch. 16, §§ 870, subd: 6, 872, subd. 5), as amended by chapter 195 of the Laws of 1935, empowered the respondent Board of Education to make the appointments in question. It is conceded that these appointments are provisional only and that the positions are to be filled by final appointments from an eligible list to be established by the respondent Board of Education through open competitive examination in accordance with the Civil Service Law (Cons. Laws, ch. 7).

The order should be affirmed, without costs.

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

Order affirmed.


text:
    In the Matter of Elizabeth Dickson et al., Respondents, against Edward J. Flynn, as Secretary of State, Appellant. Optometrical Society of the City of New York et al., Interveners, Appellants.
    Argued January 4, 1937;
    decided January 12, 1937.

      John J. Bennett, Jr., Attorney-General (Dorothy U. Smith and Henry Epstein of counsel), for Secretary of State, appellant.
    The authority under the certificate to sell at retail spectacles, eyeglasses and lenses for the correction of vision not being expressly limited to the sale of such articles as merchandise, the certificate is not in conformity with section 1432-a of the Education Law (Cons. Laws, ch. 16.) (Roschen v. Ward; Kresge Co. v. Ward, 279 U. S. 337; Matter of Co-Operative Law Co., 198 N. Y. 479; People v. Woodbury Dermatological Inst., 192 N. Y. 454; State v. Kindy Optical Co., 248 N. W. Rep. 332; State ex rel. Harris v. Myers, 191 N. E. Rep. 99.)

      Jay Leo Rothschild, Walter S. Beck, Maxwell Ross and James Flynn for Optometrical Society of the City of New York, intervener, appellant.
    Section 1432-a of the Education Law is a penal statute, which prohibits and makes criminal that which was lawful before. It does not enlarge the class of persons who may practice the profession of optometry. It merely eliminates the unsupervised sale of glasses for the correction of vision, and thus prohibits their sale as merchandise simpliciter. (People v. Woodbury Dermatological Inst., 192 N. Y. 454; Matter of Co-Operative Law Co., 198 N. Y. 479; Teseschi, Mullins & Bellair v. Mathis, 116 N. J. L. 187; State of Kansas ex rel. Beck v. Goldman Jewelry Co., 142 Kan. 881; State v. Kindy Optical Co., 216 Iowa, 1157; Eisensmith v. Buhl Optical Co., 178 S. E. Rep. 695; Funk v. State, 50 Pac. Rep. [2d] 945; Matter of Stern v. Flynn, 154 Misc. Rep. 609; American Historical Society v. Glenn, 248 N. Y. 445; People v. Sturgis, 121 App. Div. 407; People v. N. Y. C. R. R. Co., 25 Barb. 199; People v. Barton, 6 Cow. 290; Cotheal v. Brouwer, 5 N. Y. 562; People v. Abraham, 16 App. Div. 58; U. S. Tel. Co. v. Western Union Tel. Co., 56 Barb. 46; Sickles v. Sharp, 13 Johns. 497; Matter of W. S. A. & P. R. R. Co., 115 N. Y. 442; Hayden v. Pierce, 144 N. Y. 512; People v. Purdy, 154 N. Y. 439.) The certificate authorizes the petitioner’s corporation to practice optometry and is, therefore, outlawed by the statute. (Matter of Stern v. Flynn, 154 Misc. Rep. 609.)

      Harold R. Medina, William F. McNulty and Harold Kohn for New York State Optometric Association, Inc., intervener, appellant.
    Section 1432-a of the Education Law, which merely restricts the sale of glasses as merchandise, does not permit a corporation to practice optometry. (Allen v. Stevens, 161 N. Y. 122; Liggett Co. v. Baldridge, 278 U. S. 105.)

      Herbert D. Hamm for respondents.
    The purpose clauses of the certificate of incorporation found objectionable by the Secretary of State are specifically provided for under section 1432-a of the Education Law. (Roschen v. Ward, 279 U. S. 337; Martin v. Home Bank, 160 N. Y. 190; Persky v. Bank of America Nat. Assn., 261 N. Y. 212; Matter of Lewis v. Harlem Dental Co., 189 App. Div. 359; People v. Woodbury Dermatological Inst., 192 N. Y. 454; Jaeckle v. Bamberger, 119 N. J. Eq. 126; 120 N. J. Eq. 201; Howe v. Regensburg, 75 Misc. Rep. 132.)

      Robert Rosenberg and N. Bernard Silberg for Retail Opticians of America, amicus curiæ.

    The optometry statute cannot be construed so as to prohibit the employment of registered optometrists by corporations. If this is the construction then the statute is unconstitutional. (Liggett Co. v. Baldridge, 278 U. S. 105; Vorheis v. Kindy Optical Co., 251 N. W. Rep. 343; Schnaier v. Navarre Hotel & Importation Co., 182 N. Y. 83; People v. Ringe, 197 N. Y. 143; Scadron’s Sons, Inc., v. Susskind, 132 Misc. Rep. 406; People v. Rogers, 227 Ill. 151; Binfard v. Boyd, 174 Pac. Rep. 56; Jaeckle v. Bamberger & Co., 181 Atl. Rep. 181; Dvorine v. Castleberg Jewelry Corp., 185 Atl. Rep. 562; Missouri v. Gate City Optical Co., 97 S. W. Rep. 89.)
   Per Curiam.

The purposes for which the Four-BoroOptical Corporation is to be organized, as set forth in its certificate of incorporation, conform with the provisions of section 1432-a of the Education Law (Cons. Laws, ch. 16) (Roschen v. Ward, 279 U. S. 337), and the objection by appellant appearing in the affidavit of the acting chief of the Division of Corporations is not sufficient to warrant refusal to file and record this certificate. We do not construe the wording of the proposed certificate of incorporation as authorizing the practice of optometry.

At this time we decide no other issue. If, in the future, questions relating to any violation of law by the corporation or by any optometrist employed by it shall arise, the courts can then deal with them.

The order should be affirmed, without costs.

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

Order affirmed.


text:
    In the Matter of the Application of Adelaid Loomis, Individually and as Administratrix of Frank J. Loomis, Deceased, et al., for an Order Directing the Distribution of a Fund Resulting from an Award of the Court of Claims. Anna L. Stoddard, Individually and as Administratrix of the Estate of Judson W. Loomis, Deceased, et al., Appellants; M. Antoinette Loomis, Individually and as Executrix of Charles F. Loomis, Deceased, Respondent.

      Argued January 5, 1937;
    decided January 19, 1937.

      Robert W. Fisher for appellants.
    It was within the right and power of the appellant Stoddard to contract in reference to the fund in its entirety, and the share of the respondent was liable for the services performed. (Trustees v. Greenough, 105 U. S. 527; Central Railroad & Banking Co. of Georgia v. Pettus, 113 U. S. 116; Farmers’ Loan & Trust Co. v. Green, 79 Fed. Rep. 222; Lamar v. Hall & Wimberly, 129 Fed. Rep. 79; Cecil v. Clark, 69 W. Va. 641; United States v. Equitable Trust Co., 283 U. S. 738; Woodruff v. N. Y., L. E. cfc W. R. R. Co., 129 N. Y. 27; Burroughs v. Toxaway Co., 185 Fed. Rep. 435; Terminal Freezing & Heating Co. v. Whitelock, 120 Md. 408; Savage v. Sherman, 87 N. Y. 277.) The appellant Stoddard was entitled to her own expense as well as to the payment of her counsel fees. (Trustees v. Greenough, 105 U. S. 527; Woodruff v. N. Y., L. E. & W. R. R. Co., 129 N. Y. 27; Downing v. Marshall, 37 N. Y. 380; Matter of Attorney-General v. N. A. Life Ins. Co., 91 N. Y. 57.)

      Raymond O. Campbell for respondent.
    The appellants are not entitled to succeed upon the theory of a trust, quasi-contract or any oth'.r theory. (Matter of Holden, 126 N. Y. 589; Nieman-Irving & Co. v. Lazenby, 263 N. Y. 91; Savage v. Sherman, 87 N. Y. 277; Matter of Attorney-General v. N. A. Life Ins. Co., 91 N. Y. 57.)
   O’Brien, J.

In December, 1910, the State appropriated certain land in Oswego county for canal purposes. Subsequently a claim was filed with the Court of Claims for damages due to this appropriation and an award for $2,000 was made in February, 1918. A contract of retainer for legal services was executed August 16, 1932, between appellant Anna Loomis Stoddard and appellant Robert W. Fisher, an attorney, in which is recited the appropriation, the award, the fact that Mrs. Stoddard had been unable to enforce collection of the award, and the further fact that she had requested Mr. Fisher to interest himself therein in her behalf and to appear and prosecute the enforcement of such claim as an attorney at law on her behalf.” By the terms of this contract Mrs. Stoddard represents that she is entitled to the entire award and agrees to pay Mr. Fisher one-half of the amount collected. April 16, 1935, the Attorney-General advised the clerk of the Court of Claims that the amount of the award and judgment should be deposited in bank to the account of the award and that it should be distributed to such persons as the Supreme Court should decide were entitled to it, on the application of any person interested in it. Judgment was entered in the Court of Claims July 3, 1935, for $4,699.67. More than half this amount consists of interest.

Another contract of retainer for legal services, dated May 29, 1935, in which is recited the existence of the contract of August 16, 1932, was executed by appellant Anna Loomis Stoddard and appellant Fisher but not by respondent M. Antoinette Loomis. This contract, as drafted, provides that Mr. Fisher is to represent not only Mrs. Stoddard but also M. Antoinette Loomis and a space was left for her signature which, however, has never been filled but was left blank. Instead, respondent M. Antoinette Loomis retained other attorneys.

In a petition verified by Mr. Fisher August 17, 1935, the fact appears that on August 14, 1935, the amount of the judgment, $4,699.67, was paid to the credit of the award and deposited in the New York State National Bank at Albany. The fact also appears by this petition that Charles F. Loomis and Judson W. Loomis held title to the land appropriated, that both were then deceased, that appellant Anna Loomis Stoddard and Frank J. Loomis, who also was deceased, were the only heirs at law of Judson W. Loomis, and that the estate of Judson W. Loomis is entitled to a one-half interest in the amount of such award and judgment.” The petition also alleges that M. Antoinette Loomis is possessed of the interest of Charles F. Loomis, deceased, and she “ is therefore made an adverse party to this proceeding.” The answer of respondent M. Antoinette Loomis admits every material allegation in the petition and as an affirmative claim alleges that as sole legatee and devisee under the will of Charles F. Loomis she claims one-half of the. judgment and of the moneys deposited as an award in the New York State National Bank.

The order of October 25, 1935, by the Special Term recites that the New York State National Bank had appeared by its attorneys and M. Antoinette Loomis, individually, and as executrix of Charles F. Loomis, deceased, having appeared by Melvin & Melvin, her attorneys, Raymond O. Campbell, of counsel, and she having filed an answer to the petition wherein she admitted all of the allegations thereof, and joined with the petitioners in the prayer for relief,” and directs that from the sum of $4,715.33 on deposit one-half be paid to respondent M. Antoinette Loomis, as executrix of Charles F. Loomis, and the other Lhalf to be paid to Anna Loomis Stoddard, as administratrix de bonis non of the estate of Judson W. Loomis, to be administered in settlement of these estates. No appeal was taken from that order.

A petition, verified October 28, 1935, by Mr. Fisher, alleges the award for $2,000, the fact that the claim had been placed in the hands of different attorneys who, during a span of twenty-two years, had accomplished no results, and the fact of the contract of retainer, August 16, 1932, between Mr. Fisher and appellant Anna Loomis Stoddard. It then alleges that Mr. Fisher’s efforts resulted in the rendition of a judgment in claimant’s favor for $4,715.33 and that he has earned a fee of $2,357.67, or one-half of the whole amount awarded not only to his own client, Anna Loomis Stoddard, but also to M. Antoinette Loomis, who never retained him.

The Special Term allowed Mr. Fisher fifty per cent of the entire fund. The Appellate Division reversed that order but directed that Mr. Fisher be allowed fifty per cent only of the share of his own client, Anna Loomis Stoddard. Judgment was entered thereon.

The Special Term based its decision on House v. Amsdell Brewing & Malting Co. (133 App. Div. 486), but that is a case where trustees for mortgage bondholders instituted an inquiry as to the parties who were entitled to receive a fund which the trustees had caused to be brought into court by a foreclosure of a mortgage. The court there held that those trustees owed a fiduciary obligation to all who might be interested in the fund. Here there was no trust fund and, of course, no trustee except, perhaps, the bank which was represented by its own counsel. Mr. Fisher was retained by only one party, this appellant Anna Loomis Stoddard, who claimed an interest. His contract of retainer recites that she and those under whom she claims had been unable to enforce collection of the award, and it provides that he is “ to appear and prosecute the enforcement of such claim as an attorney at law on her behalf,” and he is retained as attorney only for Mrs. Stoddard. The petition even made this respondent an adverse party. Mr. Fisher’s services were performed for an individual who claimed for herself and he comes within the rule of Savage v. Sherman (87 N. Y. 277, 285), where this court said: The trustees were entitled to be allowed their reasonable expenses for rendering and passing their accounts, but the counsel for the other parties, who attended to protect-the interests of such parties in the accounting, should look to their respective clients for their compensation, and we are not aware of any rule or principle whereby any of these parties are entitled to call upon the others to pay counsel fees which they incur on their own behalf for the protection of their personal interests.” This rule was approved and enforced (Matter of Attorney-General v. North American L. Ins. Co., 91 N. Y. 57) and again even in the case of a trust in Matter of Holden (126 N. Y. 589, 594). No doubt Mr. Fisher’s services performed for Mrs. Stoddard did benefit Mrs. Loomis. Mrs. Loomis had refused to retain him but, on the contrary, retained her own attorney after the petition had made her an adverse party. Every act of Mr. Fisher as attorney was necessarily performed for his own client. The fact that others were benefited does not, in the absence of agreement by them, impose a liability upon them to pay. (Nieman-Irving & Co. v. Lazenby, 263 N. Y. 91; Matter of Attorney-General v. North American L. Ins. Co., 91 N. Y. 57, 62, 65.)

The order should be affirmed, without costs.

Crane, Ch. J., Hubbs, Loughran and Rippey, JJ., concur; Lehman and Finch, JJ., talcing no part.

Order affirmed.


author: Crane, Ch. J.

text:
    In the Matter of the Claim of George Chetney, Respondent, against H. A. Manning Company, Appellant. State Industrial Board, Respondent.
    Argued January 6, 1937;
    decided January 19, 1937.

      George R. Fearon, Gordon H. Mahley, Henry R. Follett and M. Harold Dwyer for appellant.
    The accident did not arise out of and in the course of the claimant’s employment and he was not actually within the scope of his employment at the time of the accident. (Matter of Lansing v. Hayes, 196 App. Div. 671; 233 N. Y. 614; Matter of Grathwohl v. Nassau Point Club Properties, Inc., 216 App. Div. 107; 243 N. Y. 567; Matter of Marks v. Gray, 251 N. Y. 90; Van Gee v. Korts, 252 N. Y. 241; Matter of Barber v. Harvey & Eddy Co., 265 N. Y. 661; Matter of Turner v. Cathedral Pub. Co., 268 N. Y. 656; Matter of Clark v. Voorhees, 231 N. Y. 14; Matter of Carroll v. Verway Printing Co., 254 N. Y. 598; Matter of Johnson v. Smith, 263 N. Y. 13; Matter of Conrad v. Meldrum Motor Corp., 250 N. Y. 564; Matter of Priestley v. Hentz & Co., 258 N. Y. 618; Matter of Chase v. Certain-Teed Products Corp., 206 App. Div. 806; Matter of Welby v. Pearson, 218 App. Div. 798; Matter of Pflug v. Roesch & Klinck, 256 N. Y. 564.) The Appellate Division erred in making a finding of fact which was contrary to that found by the State Industrial Board. (Cons. Laws, ch. 67, § 20; Matter of Glielmi v. Netherland Dairy Co., 254 N. Y. 60; Matter of Burmester v. DeLucia, 263 N. Y. 315; Matter of Summers v. Mohawk Valley Roofing Co., 245 App. Div. 412; Matter of Strand v. Harris Structural Steel Co., 234 App. Div. 341; Matter of Freudenfeld v. Stein & Co., 245 App. Div. 885; 271 N. Y. 548.)

      Kirke M. White for claimant, respondent.
    The accident to respondent arose out of and in the course of his employment. (Matter of Theyken v. Diplomat Products Co., 243 App. Div. 822; 268 N. Y. 658; Matter of Harby v. Marwell Bros., Inc., 203 App. Div. 525; 235 N. Y. 504; Matter of Fronce v. Prosperity Co., 255 N. Y. 613; Matter of Gibbs v. Macy & Co., 214 App. Div. 335; 242 N. Y. 551; Matter of Crowell v. American Fruit Growers, Inc., 253 N. Y. 543; Roberts v. Newcomb & Co., 201 App. Div. 759; Matter of Goater v. D’Olier, 198 App. Div. 959; Matter of Fuld v. Solomon Co., 197 App. Div. 911; Matter of Habbershaw v. Shepard Co., 197 App. Div. 910; Matter of Hospers v. Hungerford-Smith Co., 194 App. Div. 945; 230 N. Y. 616.) The findings of the Industrial Board must be read in the light of the evidence. (Matter of Gleisner v. Gross & Herbener, 170 App. Div. 37; Matter of Rheinwald v. Builders’ Brick & Supply Co., 168 App. Div. 425.)
   Crane, Ch. J.

The claimant was hired on a salary and commission to solicit and secure advertisements to be published by his employer in directories for sale and use in designated towns and some small cities. The memorandum decision of the State Industrial Board states that the claimant on November 16, 1930, bad no work to perform outside the city of Ithaca. He lived in Fulton, some miles distant from Ithaca, and left the latter place in his automobile on Saturday to spend the week-end at home. The following day, Sunday, November 16, 1930, he left Fulton at about four-thirty p. M. in his car and started back to Ithaca, his place of employment, to keep an alleged appointment with a prospective customer on that evening. After stopping at Syracuse to make a social call and while proceeding on the public road to Ithaca, his car overturned and he was badly hurt. When employed in the territory to which he was assigned, the claimant was allowed only such traveling expenses as would be incurred in using street cars and buses. When assigned to extra work away from his territory, he was allowed railroad fare. Week-end tiips to his home were on his own and at these times he was not subject to the orders of his employer, nor was he reimbursed for any expenses incurred thereby.

There is ample evidence to sustain these conclusions. The findings of fact follow in substance this memorandum decision, the third finding being: “ George Chetney did not sustain an accidental injury arising out of and in the course of his employment. He was not acting in the scope of his employment when he made a trip to Fulton. Such a trip was to his own personal interest; he had no work to perform in Fulton.”

The conclusion of law was: This claim does not come within the provisions of the Workmen’s Compensation Law.”

The Appellate Division has reversed these findings and reinstated an award previously made by the referee and set aside by the State Industrial Board. In so doing the Appellate Division has substituted its judgment on the evidence for that of the Board, which it cannot do; it cannot review the facts. There being evidence to sustain the decision, the Appellate Division was without power to reverse. (Matter of Dubinsky v. Kofsky, 266 N. Y. 631.) “ The decision of the board shall be final as to all questions of fact * * (Workmen’s Compensation Law [Cons. Laws, ch. 67], § 20.)

Taking the evidence, however, most favorable to the claimant, he did not bring his trip within the scope of his employment as matter of law. (See Matter of Grathwohl v. Nassau Point Club Properties, Inc., 243 N. Y. 567.) This is not the case of a traveling salesman or agent, nor is it a case where transportation was part of the contract of employment. (Matter of Theyken v. Diplomat Products, Inc., 268 N. Y. 658; Matter of Kowalek v. New York Consolidated R. R. Co., 229 N. Y. 489.)

The order of the Appellate Division should be reversed and the determination of the State Industrial Board affirmed, with costs in this court and in the Appellate Division.

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

Ordered accordingly.


text:
    Eliza F. Coles, Plaintiff, v. John J. Carroll et al., Respondents, and Fannie E. Wallace, Appellant.
    Argued January 6, 1937;
    decided January 19, 1937.

      Arthur I. Strang and Stuart O. Freeman for appellants.
    The motion to vacate the judgment in so far as it attempts to adjudicate that the defendant, appellant, had no interest in the premises should have been granted because no answer of any defendant was served upon her and any judgment affecting her rights is void. (Civ. Prac. Act, §§ 264, 1022; New Netherland Bank v. Boucheron Co., 122 Misc. Rep. 690; McLear v. Balmat, 194 App. Div. 827; Weston v. Stoddard, 60 Hun, 290; 137 N. Y. 119; Edwards v. Woodruff, 90 N. Y. 396.) The motion to vacate the judgment and order was proper. (Clapp v. McCabe, 155 N. Y. 525; Bouker Contracting Co. v. Neale, 161 App. Div. 617, Fidelity & Casualty Co. v. Marendino, 202 App. Div. 24; Greenfield v. Greenfield, 215 App. Div. 504; Manhattan Beach Co. v. Bonner, 123 Misc. Rep. 441.)

      Harold Swain, J. Leo O’Brien and Israel Lavenburg for John J. Carroll et al., respondents.

      Conrad H. Sullivan for Marie F. Borrelli, as administratrix of the estate of Gaetano Borrelli, deceased, et al., respondents.
    The Special Term was without jurisdiction to entertain the motion to vacate. (Kirkpatrick Home v. Kenyon, 209 App. Div. 179; Silverstein v. Standard Accident Ins. Co., 221 N. Y. 332; Macomber v. Sterling, 230 App. Div. 598.) The judgment as entered was proper. (Van Cortland v. Beekman, 6 Paige, 492; Allen v. Litchard, 93 Misc. Rep. 197; 179 App. Div. 959.)
   Rippey, J.

This is an action for partition of certain premises located in the town of Mamaroneck, Westchester county. The complaint and notice of pendency of the action were filed on April 18, 1928. The plaintiff alleged that she and the defendant Fannie Eliza Wallace were seized and possessed in fee simple absolute as tenants in common of the said premises, the plaintiff owning an undivided one-fourth part and the defendant Fannie Eliza Wallace an undivided three-fourths part thereof, and that the other defendants named had or claimed to have some interest in the premises which were clouds upon the title thereto.

All of the defendants were served with the summons and complaint. The defendant Wallace neither appeared nor answered. The defendant Gaetano Borrelli appeared by attorney and answered. He denied all of the material allegations of the complaint and asserted, by way of separate defenses and counterclaims, that he was seized in fee and possessed of a part or of the whole of said premises by virtue of certain conveyances and transfers of tax liens assigned to him on May 21, 1926. He demanded that it be adjudged that he was seized and possessed of the fee in and to the premises referred to in paragraphs numbered fifth and sixth of his answer, and that the complaint be dismissed in so far as it affected the premises in which he had an interest, and that he have other or further relief as might be proper. A number of the other defendants appeared and interposed answers containing general denials and demands that the complaint be dismissed, with costs. None of the answers were served upon the defendant Wallace.

The action proceeded to trial and a decree was entered on April 10, 1931, which adjudged that the plaintiff’s complaint herein be, and the same hereby is, dismissed on the merits, and that the plaintiff and defendant, Fannie Eliza Wallace, have neither any right, title, or interest in, nor any claim to or concerning said premises or any part thereof, either individually or as co-owners,” and that the defendants appearing be awarded costs against plaintiff. An appeal was taken by plaintiff to the Appellate Division, where the decree was modified on the subject of costs, but, otherwise, unanimously affirmed. Judgment was entered on the order of the Appellate Division on May 29, 1934. An appeal was taken by plaintiff to this court, but was dismissed in the fall of 1934 for non-prosecution. In the meantime Borrelli died leaving a widow and infant heirs. The widow was appointed administratrix and a guardian ad litem was appointed for the infants and they were made parties defendant herein.

On May 21, 1935, the defendant Wallace moved at Special Term to vacate and set aside the aforesaid judgment and decree of April 10, 1931, and the judgment entered upon the affirmance by the Appellate Division, in so far as it was thereby adjudicated that the defendant, Fannie Eliza Wallace, has neither any right, title or interest in nor any claim to or concerning said premises or any part thereof, either individually or as co-owner thereof.” Motion of defendant Wallace was denied, and again, on resettlement, denied and the orders entered thereon were affirmed on appeal. The Appellate Division granted leave to appeal to thi.s court and certified for our determination the question, should the motion of the defendant-appellant, Fannie Eliza Wallace, have been denied?”

The provisions of. sections 264 and 1022 of the Civil Practice Act provided the practice to be followed in the partition action. There it is said that the title or interest of any party to the action in the property sought to be partitioned may be put in issue, and, if put in issue, must be tried and determined; where the judgment may determine the ultimate rights of two or more defendants as between themselves, a defendant who requires such a determination must demand it in his answer, and, at least twenty days before trial, serve a copy of his answer upon the attorney for each of the defendants, to be affected by the determination who has appeared by attorney, and personally, or as the court or judge may direct, on each of the defendants who will be affected by such a determination who has not appeared by attorney. Without service of the Borrelli answer upon her, defendant Wallace might safely rest upon her default in appearance or pleading and assume that her interest in the property would not be adjudged to be different than set out in the complaint. None of the parties to this action put in issue her. ownership of an undivided three-fourths interest in the property by any pleading of which she had notice, and the judgment that she had no interest therein was unauthorized and void. (Edwards v. Woodruff, 90 N. Y. 396; Ostrander v. Hart, 130 N. Y. 406, 413.) She could attack or resist the unauthorized judgment in any manner that she might elect. Her motion to vacate was proper and timely and should have been granted. (Clapp v. McCabe, 155 N. Y. 525.)

The orders should be reversed, with costs to the defendant Wallace in this court and in the Appellate Division, and the matter remitted to the Special Term with directions to enter an order for the relief demanded, with costs. The question certified should be answered in the negative.

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

Ordered accordingly.