author: Finch, J. Desmond, J.

text:
    In the Matter of Wilson Sullivan Company, Inc., Respondent. Freida S. Miller, as Industrial Commissioner of the State of New York, Appellant.

      Argued June 8, 1942;
    decided October 15, 1942.

      John J. Bennett, Jr., Attorney-General (Francis R. Curran and Henry Epstein of counsel), for appellant.
    There is sufficient evidence to sustain the finding that the real estate salesmen of respondent are its employees under the unemployment insurance law (Labor Law, art. 18; Cons. Laws, ch. 31). They are not independent contractors as a matter of law. (Cons. Laws, ch. 50, §§ 440, 441, 441-a, 441-d, 442-a, 442-b, 442-c; Roman v. Lobe, 243 N. Y. 51; Matter of Fitzgerald, 263 App. Div. 448; Matter of Rowe, 263 App. Div. 915; Matter of Morton, 284 N. Y. 167; Matter of Goebber, 262 App. Div. 1053; Matter of Keith & Barton, 262 App. Div. 984; Matter of Hanrahan, 262 App. Div. 924; 287 N. Y. 559.)

      Ellis J. Staley, Ellis J. Staley, Jr., and Eugene J. Steiner for respondent.
    The salesmen of the respondent are independent contractors and not employees within the meaning' of article 18 of the Labor Law. (Matter of Beach v. Velzy, 238 N. Y. 100; Matter of Litts v. Risley Lumber Co., 224 N. Y. 321; Irwin v. Klein, 271 N. Y. 477; Matter of Fidel Association of N. Y., 259 App. Div. 486; 287 N. Y. 626; Matter of Morton, 259 App. Div. 771; 284 N. Y. 167; Matter of Alford, 260 App. Div. 826 ; 286 N. Y. 651; Matter of Glielmi v. Netherland Dairy Co., 254 N. Y. 60; Koehler v. Myers, 21 Fed. Rep. [2d] 486.) The decision of the Appeal Board that sections 440, 440-a, 441-d, 442 and 442-a of the Real Property Law create the relationship of employer and employee between respondent and its salesmen is erroneous as matter of law. (Roman v. Lobe, 243 N. Y. 51; People ex rel. Jackson v. Potter, 47 N. Y. 375; Wiley v. Solvay Process Co., 215 N. Y. 584; Holding Co. v. Reis, 240 N. Y. 424; Matter of Litts v. Risley Lumber Co., 224 N. Y. 321; Psota v. Long Island R. R. Co., 246 N. Y. 388; Transit Commission v. Long Island R. R. Co., 253 N. Y. 345; Matter of Carnegie Trust Co., 151 App. Div. 606; 206 N. Y. 390; Koehler v. Myers, 21 Fed. Rep. [2d] 486; Matter of Waroshill, 263 App. Div. 546.)
   Finch, J.

This appeal presents the question whether respondent, a corporation doing business- as a real estate broker in the city of Albany, is liable under the unemployment insurance law (Labor Law, art. 18; Cons. Laws, ch. 31) to make contributions with respect to commissions earned by its salesmen. The Unemployment Insurance Appeal Board has held that the salesmen are employees and, consequently, that respondent is subject to liability under the law with regard to their earnings. ■ The Appellate Division has unanimously reversed the Appeal Board upon the facts, holding that the evidence shows respondent’s salesmen to be independent contractors. . .

The scope of Judicial review in a proceeding such as this is very limited, being confined solely to a determination as to whether or not there is any substantial evidence to support the conclus on of the Appeal Board. (Matter of Morton, 284 N. Y. 167.) However, upon the record in this case it cannot be seriously contended that there are any facts sufficient to show that the respondent exercises control over either the results produced by its salesmen or the means employed by them to achieve the results. In the absence of evidence to prove control there can be no finding that the relationship between respondent and its salesmen is one of employment. (Matter of Beach v. Velzy, 238 N. Y. 100, 103, 104.)

The sole testimony in this case was given by Mr. Wilson Sullivan, president of respondent. From his testimony it appears that the corporation plays the following part in assisting its salesmen to achieve results. The company supplies office and desk space and ' telephone service, the latter service being paid for from corporation finances. Prospect leads are furnished the salesmen by direction of a sales manager of the corporation. The salesmen are also furnished with stationery and office supplies, and blanks for closing sales.

The salesmen themselves may list property for sale. They have no specific hours, no definite routine to follow, nor calls to make during the day. Reports are not required of them. But they merely submit to the company a record of the sales they actually make, and have the privilege of listing with the company so-called “ prospect cards ” whereby other salesmen are put on notice not to approach a particular man’s prospect. Salesmen may operate in a particular territory or not, as they choose, and may engage in other occupations at the same time. One of the salesmen, Casey, is licensed to work not only for respondent but for another broker at the same time. The salesmen are bonded as independent contractors, and their only instructions come from the owners of the property with whom they deal directly.

As already noted, the Department of State has seen fit to license the salesman Casey to work for more than one broker at the same time. Furthermore, the State Insurance Fund has ruled that respondent is not subject to the Workmen’s Compensation Law (Cons. Laws, ch. 67) with respect to these salesmen. Finally, by a ruling of the United States Treasury Department, respondent has been held not to be subject to unemployment contributions with respect to salesmen having positions similar to Casey’s.

Upon this state of the record there is no substantial evidence upon which to sustain the findings of the .Appeal Board. Indeed, a reading of the opinions of the referee and the Appeal Board show that they relied not upon the evidence produced before them, but upon an interpretation of sections 440, 442-A and 442-B of article 12-A of the Real Property Law (Cons. Laws, ch. 50) relating to the licensing of real estate brokers, and salesmen. These sections provide that: “ § 440. * * * ‘ Real estate salesman ’ means a person employed by a licensed real estate broker to list for sale, sell or offer for sale, * * * to buy or offer to buy or to negotiate the purchase or sale or exchange of real estate, or to negotiate a loan on real estate, or to lease or rent or offer to lease, rent or place for rent any real estate, or collects or offers or attempts to collect rent for the use of real estate for or in behalf of such real estate broker.” “ § 442-a. No real estate salesman * * * shall receive or demand compensation * * * from any person, other than a duly licensed real estate broker regularly employing the salesman, * * *

§ 442-b. Discontinuance of salesman’s employment * * The broker shall also return the salesman’s license to the department when the salesman’s employment terminates by mutual agreement or otherwise, * *

It is the contention of appellant that by referring to salesmen as employees ” in the statutes above-quoted, the Legislature has outlawed the common law relationship of independent contractor between broker and salesman and has provided that to obtain a license a man must either be an independent broker or else a sales- * man in the employ of a broker. It was upon this interpretation of the statute that the Appeal Board found the existence of an employer-employee relationship in this case. It would seem, however, that this statute, even though we could regard it as evidence, is not susceptible of the construction given to it by the-appellant and the Appeal Board.

It is a principle of statutory construction that the court should look at the old law, the mischief and the proposed cure and construe the act in quéstion so as to suppress the evil and advance the remedy. (People ex rel. Jackson v. Potter, 47 N. Y. 375, 379; Wiley v. Solvay Process Co., 215 N. Y. 584, 588.) The purpose of article 12-A was to assure by means of licensing competency and the observance of professional conduct on the part of real estate brokers and salesmen. As was said by this court in Roman v. Lobe (243 N. Y. 51, 54, 55): “ The real estate broker is brought by his calling into a relation of trust and confidence. Constant are the opportunities by concealment and collusion to extract illicit gains. We know from our judicial records that the opportunities have not been lost. With temptation so aggressive, the dishonest or untrustworthy may not reasonably complain if they are told to stand aside. Less obtrusive, but not negligible, are the perils of incompetence. The safeguards against incompetence need not long detain us, for they were added to the statute after the services were rendered. We recall them at this time for the light that they cast upon the Legislature’s conception of the mischief to be remedied. The broker should know his duty.”

It is quite apparent that to effectuate the purposes of the statute as set out in the above opinion, it is not necessary that we should go so far as to hold that the recognized common law relationship of independent contractor has been outlawed by the statute. No reason appears why the standards of competency and honesty among real estate salesmen cannot be maintained even though brokers have no control over the salesmen’s selling methods. If the statute and the common law rule can stand together, the statute should not be so construed as to abolish the common law rule. (Transit Commission v. Long Island R. R. Co., 253 N. Y. 345, 354, 355; Matter of Carnegie Trust Co., 151 App. Div. 606, 611, 612, affd., 206 N. Y. 390.)

Thus in Matter of Litts v. Risley Lumber Co. (224 N. Y. 321, 324) this court read into the definition of employment ” in the Workmen’s Compensation Law, the common law rule as to the independent contractor relationship, stating 5This definition is not inimical to and does not disturb the distinctions established in the common law between a servant or employee and an independent contractor. The rules which demarcated the relation of master and servant from that of employer and independent contractor are operative in the consideration of claims made under the act.”

The State of New Jersey has a statute similar to our article 12-A (New Jersey Cons. Laws, ch. 15, tit. 45, §§ 3, 14). Nevertheless, in the case of Koehler v. Myers (21 Fed. Rep. [2d] 596), it was held that this statute did not outlaw the relationship of independent contractor between broker and salesman.

We must conclude that this statute, concededly enacted to effectuate other purposes, will not be construed, in the absence of clear and explicit language, to work a change in a well-established principle of the common law. (Jones v. City of Albany, 151 N. Y. 223, 225, 228.)

It follows that the order appealed from should be affirmed, with costs.

Desmond, J.

(dissenting). Ordinarily, when we are called upon to decide whether a person is an employee engaged in a covered employment ” under the unemployment insurance law (Labor Law, art. 18), we examine into the particular facts of the relationship between that person and the person or entity said to be his “ employer.” Then, ordinarily, we apply to those discovered facts the settled rule that if the worker is subject to the orders of another as to the' method and manner of his work, he is an employee, and, if not so subject, that he is an independent contractor. (Matter of Morton, 284 N. Y. 167.) But there are occupations in which, by command of statute, one who works under the control of another, is, perforce, an employee and not an independent contractor. Whatever be the language of the contracts under which such a person works, the law, to effectuate its own policy, inserts in the contract the law’s own terms, to the effect that the worker is, and must be considered, an employee.

Clearly, this is so with real estate brokers and real estate salesmen. The occupation of selling, renting and managing real prop- , erty for others is closely regulated, in this State, by statutory law. Those statutes exhibit a plainly stated, unmistakable public policy that persons licensed as real estate salesmen may not lawfully work in that calling except as employees of others who are licensed as real estate brokers, that salesmen may not sell real property except under the direction of brokers, and that brokers must assume responsibility for the. acts or omissions of their salesmen. No other reason can be assigned for the numerous careful distinctions made by the Legislature, throughout article 12-A of the Real Property Law, between brokers and salesmen. A salesman may, by his particular employer, be permitted considerable freedom of action. He may search out his own prospects and available properties, he may work on commission only and have his choice of hours and places of work — but, if the law is to be obeyed, he must be at all times under the direction and control of a broker, and the broker must stand sponsor for him with the State and with the public.

The very definition of real estate salesman ” in section 440 of the Real Property Law, says that the term means one who is employed by a licensed real estate broker.” No one may become a licensed broker until he has “ actively participated in the general real estate brokerage business as a licensed real estate salesman under the supervision of a licensed real estate broker ” or has had equivalent experience, for certain specified periods of time; one applying for a salesman’s license must set forth the name of the “ broker by whom he is to be employed ” and a temporary license may be issued when the salesman’s employer ” expresses willingness to stand responsible for the acts of such salesman * * *.” (Real Prop. Law, § 441.) A salesman’s license must set forth the name of the broker “ by whom the salesman is employed ” and every such salesman’s license must be sent by the Department of State, not to the salesman, but to the “ real estate broker by whom such salesman is employed ” and must be kept “ in the custody and control of such broker; ” when a salesman leaves the employment of a broker, the latter returns the salesman’s license to the Department, which re-issues it and sends it on to the new broker-employer (§ 441-a). A license as salesman cannot be issued to an officer of a brokerage corporation or to a member of a brokerage partnership (§ 441-b, subd. 2). A salesman, for his services in selling, renting or otherwise dealing with real property, is forbidden to receive or demand compensation from any person other than a duly licensed real estate broker regularly employing the salesman * * * ” (§ 442-a). When a salesman’s employment with a broker is discontinued, the broker must send the salesman’s license back to the State Department, and the salesman cannot thereafter work as such, until there has been issued to him a new license bearing the name of a new broker-employer (§ 442-b).

This repeated use by the Legislature of the word “ employed ” is not to be considered inadvertent, particularly since everything else in article 12-A of the Real Property Law paints a picture of the conventional relationship of employer and employee, between broker and salesman. When, later on, the Legislature, in enacting the unemployment insurance law, came to describe the persons and relationships intended to be covered, it used the words “ employment,” employer ” and “ employee ” and defined them so broadly (Labor Law, § 502) that no reason is left for excluding the real estate salesmen as to whom the Legislature had earlier used the same verbiage, in the Real Property Law. We should not ascribe different meanings to the same word, as used in different statutes, unless compelling reasons so dictate. There are no such reasons here. To hold as matter of law that these salesmen are independent contractors, we would have to say that there is in this relationship a total absence of the marks which ordinarily characterize the relationship of employer and employee.” (Matter of Morton, supra, p. 173.) Those “marks” have here been plainly painted in by the Legislature itself since it has decreed that such salesmen are to function as employees, and not otherwise. The inconveniences, if any there be, in applying the provisions of the unemployment insurance law to these salesmen, are not for the courts to deal with.

The order of the Appellate Division should be reversed, and the determination of the Unemployment Insurance Appeal Board reinstated, with costs.

Rippey, Lewis and Conway, JJ., concur with Finch, J., Desmond, J., dissents in opinion in which Lehman, Ch. J., and Lough-ran, J., concur.

Order affirmed.


source: Caselaw Access Project

author: Finch, J.

license: Public Domain

text:
    In the Matter of the Claim of Mike Cassaretakis. Frieda S. Miller, as Industrial Commissioner of the State of New York, Appellant. Standard Dredging Corporation, Respondent. In the Matter of the Claim of Joseph Bergen. Frieda S. Miller, as Industrial Commissioner of the State of New York, Appellant. International Elevating Company, Respondent. In the Matter of the Claim of Jamel Sheredos. Frieda S. Miller, as Industrial Commissioner of the State of New York, Appellant. Lake Tankers Corporation, Respondent. In the Matter of the Claim of James R. Knowlson. Frieda S. Miller, as Industrial Commissioner of the State of New York, Appellant. Matton Steamboat Co., Inc., et al., Respondents. In the Matter of the Claim of David Schein. Frieda S. Miller, as Industrial Commissioner of the State of New York, Appellant. Fair Water Transportation Co., Inc., Respondent. In the Matter of the Claim of Fred A. Smith. Frieda S. Miller, as Industrial Commissioner of the State of New York, Appellant. Ben Franklin Transportation Co., Inc., Respondent.

      Argued June 15, 1942;
    decided October 15, 1942.

      John J. Bennett, Jr., Attorney-General (Henry Epstein, W. Gerard Ryan and Francis R. Curran of counsel), for appellant.
    The unemployment insurance law (Labor Law, art. 18; Cons. Laws, ch. 31) does not attempt to modify, alter or supplement the rights and liabilities of the parties to any maritime contract, nor does it deal with remedies enforceable in admiralty. (New York C. R. R. Co. v. White, 243 U. S. 188; Matter of Doey v. Howland Co., 224 N. Y. 30; Washington v. Dawson & Co., 264 U. S. 219.) Section 2 of article 3 of the Federal Constitution does not inhibit the state from requiring employers to pay a non-discriminatory excise based upon the exercise of the privilege or right of having individuals in their employ, even though it may be measured by wages paid under maritime contracts of employment. (Steward Machine Co. v. Davis, 301 U. S. 548; Carmichael v. Southern Coal & Coke Co., 301 U. S. 495; Helvering v. Davis, 301 U. S. 619; Barwise v. Sheppard, 299 U. S. 33; Educational Films Corp. v. Ward, 282 U. S. 379; Chamberlin, Inc., v. Andrews, 271 N. Y. 1; Lawrence v. State Tax Comm., 286 U. S. 276; Gibbons v. Ogden, 9 Wheat. 1; Hump Hairpin Mfg. Co. v. Emerson, 258 U. S. 290; Western Union Tel. Co. v. Attorney-General, 125 U. S. 530; Knowlton v. Moore, 178 U. S. 41; Cornell Steamboat Co. v. Sohmer, 235 U. S. 549; Alward v. Johnson, 282 U. S. 509; Sands v. Manistee River Improvement Co., 123 U. S. 288; Trinityfarm Constr. Co. v. Grosjean, 291 U. S. 466; Susquehanna Power Co. v. State Tax Comm., 283 U. S. 291; United States v. Bevans, 3 Wheat. 336.) The unemployment insurance law does not contravene the essential purpose expressed by an act of Congress or work material prejudice to the characteristic features of the general maritime law or interfere with the proper harmony and uniformity of that law in its international and interstate relations. (The Blackheath, 195 U. S. 361; Detroit Trust Co. v. The Barlum, 293 U. S. 21; Southern Pacific Co. v. Jensen, 244 U. S. 205; El Paso & Northeastern Ry. Co. v. Gutierrez, 215 U. S. 87; Clark v. Poor, 274 U. S. 554; Darweger v. Staats, 267 N. Y. 290; Red Cross Line v. Atlantic Fruit Co., 264 U. S. 109; Matter of Easton, 95 U. S. 68; Knickerbocker Ice Co. v. Stewart, 253 U. S. 149.) In the absence of congressional legislation in the field of unemployment insurance, or in the event of congressional invitation to states to enact unemployment insurance laws, states are competent to enact such laws: the matter of unemployment insurance is one which does not demand uniform national treatment. (Minnesota Rate Cases, 230 U. S. 352; Cooley v. Board of Wardens, 12 How. 299; Anderson v. Pacific Coast S. S. Co., 225 U. S. 187; Manigault v. Springs, 199 U. S. 473; Transportation Co. v. Parkersburg, 107 U. S. 691; Sands v. Manistee River Improvement Co., 123 U. S. 288; The Hamilton, 207 U. S. 398; The City of Norwalk, 55 Fed. Rep. 98; Savage v. Jones, 225 U. S. 501; Northern Coal & Dock Co. v. Strand, 278 U. S. 142; Parker v. Motor Boat Sales, Inc., 314 U. S. 244.

      H. Maurice Fridlund and James Ragan Roberts for Standard Dredging Corporation, respondent.
    As a matter of statutory, construction, the New York unemployment insurance law does not apply to claimant’s employment. (Helvering v. Bliss, 293 U. S. 144; Zellerbach Paper Co. v. Helvering, 293 U. S. 172; Old Mission Portland Cement Co. v. Helvering, 293 U. S. 289; Hartley v. Commissioner, 295 U. S. 216; Brewster v. Gage, 280 U. S. 327. The New York unemployment insurance law cannot constitutionally be construed to cover members of a crew of a documented vessel operating on navigable waters of the United States. (Southern Pacific Co. v. Jensen, 244 U. S. 205; Knickerbocker Ice Co. v. Stewart, 253 U. S. 149; Moran v. New Orleans, 112 U. S. 69; Harman v. Chicago, 147 U. S. 396; Butler v. Boston & Savannah S. S. Co., 130 U. S. 527; Great Lakes Dredge & Dock Co. v. Kierejewski, 261 U. S. 479; Robins Dry Dock Co. v. Dahl, 266 U. S. 448; Saylor v. Taylor, 77 Fed. Rep. 476; The Hurricane, 2 Fed. Rep. [2d] 70; 9 Fed. Rep. [2d] 396; Washington v. Dawson & Co., 264 U. S. 219;
      Just v. Chambers, 312 U. S. 383; Minnesota Rate Cases, 230 U. S. 352.)

      Jules Haberman, Arthur E. Goddard and Robert B. Lisle for International Elevating Company, respondent.
    The power of the United States within the maritime field is exclusive and cannot be delegated to the states. (Knickerbocker Ice Co. v. Stewart, 253 U. S. 149; Matter of Doey v. Howland Co., 224 N. Y. 30; Matter of Keator v. Rock Plaster Manufacturing Co., 224 N. Y. 540; Matter of Reinhardt v. Newport F. S. Carp., 232 N. Y. 115; Southern Pacific Co. v. Jensen, 244 U. S. 205; Matter of McKinnon v. Kinsman Transit Co., 240 App. Div. 359; Washington v. Dawson & Co., 264 U. S. 219.) The application of the State unemployment insurance law in the maritime field cannot be sustained as an excise tax. (Mountain Timber Co. v. Washington, 243 U. S. 219.)

      Frank C. Mason and Edward L. P. O’Connor for Conners Marine Co., Inc., et al., respondents.
    The unemployment insurance law if applied to the employment of a seaman on a vessel on the navigable waters of the United States would constitute an invasion of the exclusive maritime jurisdiction vested in the Federal Government and the United States Courts. (Southern Pacific Co. v. Jensen, 244 U. S. 205; Knickerbocker Ice Co. v. Stewart, 253 U. S. 149; Washington v. Dawson & Co., 264 U. S. 219; Robins Dry Dock & Repair Co. v. Dahl, 266 U. S. 449.) The officers and members of the crew of a vessel on the navigable waters of the United States are excluded from the operation of unemployment insurance acts by virtue of Federal legislation. (Buckstaff Bath House Co. v. McKinley, 308 U. S. 358; Southern Pacific Co. v. Jensen, 244 U. S. 205; Lawson v. Shrigley, 50 Fed. Rep. 287; Robertson v. Baldwin, 165 U. S. 275.) As a matter of construction the unemployment insurance law excludes coverage of officers and members of the crew of vessels. (Matter of Cooper, 22 N. Y. 67; Rice v. United States, 53 Fed. Rep. 910; Gould v. Gould, 245 U. S. 151; Matter of Vanderbilt, 281 N. Y. 297; Dun & Bradstreet, Inc., v. City of New York, 276 N. Y. 198.) The State of New York may not impose a tax on the privilege of hiring officers and members of the crew of a vessel. (Puget Sound Stevedoring Co. v. Tax Comm., 302 U. S. 90; South Chicago Coal & Dock Co. v. Bassett, 309 U. S. 251.)

      Edward K. Bachman for Lake Tankers Corporation, respondent.
    To construe the New York unemployment insurance law so as to permit benefits to be paid to' claimant from the New York unemployment insurance fund in respect of service performed by claimant as a member of the crew of a vessel on the navigable waters of the United States and to compel respondent to pay contributions to said fund in respect of such service would violate section 2 of article 3 of the Constitution of the United States. (Knickerbocker Ice Co. v. Stewart, 253 U. S. 149; Southern Pacific Co. v. Jensen, 244 U. S. 205; Washington v. Dawson & Co., 264 U. S. 219.)
    No appearance for Fair Water Transportation Co., Inc., Respondent.
    No appearance for Ben Franklin Transportation Co., Inc., Respondent.
   Finch, J.

These six appeals present the question whether the New York unemployment insurance law (Labor Law, art. 18; Cons. Laws, ch. 31) imposing a pay-roll tax upon all employers of four or more employees, without discrimination and without exception here material, is applicable to marine employments.

In four of the above cases the Unemployment Insurance Appeal Board has found that the claimants had been employed as members of the crews of vessels on the navigable waters of the United States and for that reason the Board held that they were not covered by the unemployment insurance law. In the two remaining cases (Matter of Cassaretakis and Matter of Bergen) the Board has found that the claimants, although engaged in marine employments, had not been employed as members of the crews of vessels on the navigable waters of the United States, and on this basis held that they were covered by the statute in question.

Upon appeal to the Appellate Division, the decision of the Board in the four cases first mentioned above was sustained. In the other two cases, however, the determinations were reversed upon the ground that, by reason of the admiralty clause of the Federal Constitution, the unemployment insurance statute may not be held applicable to maritime employments.

The definition of employment contained in the New York Act (Labor Law, § 502) is admittedly sufficiently broad to cover all maritime employments, including service as an officer or member of a crew of a vessel upon navigable waters of the United States, provided the whole or greater part of such employment is performed within this State. The Federal statute (U. S. Code, tit. 26, § 1607, subd. c), on the other hand, specifically excludes from the tax levied thereunder services rendered as officer or member of a crew of a vessel upon the navigable waters of the United States.

Whether or not an individual is a member of a crew of a vessel on the navigable waters of the United States presents primarily a question of fact which turns generally on whether the individual serves the ship in her navigation. (South Chicago Coal & Dock Co. v. Bassett, 309 U. S. 251, 259.) In consequence the determination of the Appeal Board, if sustained by substantial evidence, is conclusive upon the courts. (Labor Law, art. 18, § 534; Matter of Morton, 284 N. Y. 167.) Upon this record there is substantial evidence to sustain the findings of fact in this regard of the Appeal Board. As to the four claimants who were found to be members of the crews of vessels, Sheredos was a cook on a self-propelled vessel carrying petroleum between points in New York and New Jersey; Schein was an attendant on a speed boat which transported passengers from a New York city pier to the World’s Fair; Khowlson was second engineer on a tugboat; Smith was a fireman on a lighter. All were plainly members of crews of vessels. On the other hand, Cassaretakis was assistant cook on board a dredge which was employed in a land filling operation in connection with the construction of a public highway. Bergen was a grain-trimmer on a floating grain elevator, his work being in connection with transfer of grain from one barge to another for purposes of further transportation. The employment of these two latter claimants, therefore, may be deemed incidental to construction and stevedoring operations, respectively, rather than to navigation. In consequence, Cassaretakis and Bergen, although concededly engaged in general maritime employment, were not members of crews of vessels on the navigable waters of the United States. These two claimants have, moreover, been found to be engaged in employment the whole or greater part of which was transacted within this State.

Two questions of law are raised, (1) whether there is constitutional objection to the application of the statute in question to maritime employments generally, and (2) if there is no such constitutional objection, whether the Congress preempted that part of the field relating to navigation by enacting a statutory prohibition against coverage by the State law, of officers and members of the crew of a vessel on the navigable waters of the United States.

In order to induce the several States to enact unemployment insurance statutes, the Federal government, by the Federal Unemployment Tax Act (Internal Revenue Code, U. S. Code, tit. 26, §§ 1600, 1601) levied a pay-roll tax upon employers, with certain exceptions, but allowed a credit up to ninety per cent of the Federal pay-roll tax to employers on account of contributions paid for State unemployment insurance. On its part the State of New York has levied a pay-roll tax upon employers measured by a percentage of the pay-roll and assessed upon all employers generally without regard to the nature of employment, with certain exceptions not here material (Labor Law, art. 18, §§ 515, 516). Neither the National nor the State government contributes anything to the fund. The moneys collected by means of this tax are used for the relief of the unemployed, concededly an object within the powers of the State. (Carmichael v. Southern Coal & Coke Co., 301 U. S. 495.)

This tax is an excise based upon the exercise of the privilege of employing individuals. (Steward Machine Co. v. Davis, 301 U. S. 548, 578-583; Carmichael v. Southern Coal & Coke Co., supra; Patton v. Brady, 184 U. S. 608.) The obligations of the employer under this law are not to his employees but to the State. Likewise, claimants of benefits assert their rights against the State and not against the employer. The employer’s duty to pay contributions and the employee’s right to receive benefits are independent of each other. The employer must continue to pay the tax although none of his employees ever becomes entitled to benefits through lack of employment; the employee has a right to receive benefits upon becoming unemployed although Ms employer has failed to contribute.

A mere statement of this State law demonstrates that it does not modify or attempt to modify, alter or supplement the rights and liabilities of the parties to any maritime contract, nor does it touch remedies enforceable in admiralty. This tax exists independently of the employment out of which it arises. The measure of the tax by the amount of wages paid does not make the tax less independent of the occupation. Conceding that these claimants performed services under a maritime contract of employment, nothing in the challenged statute in any way changes, modifies or affects the reciprocal rights and duties of the employer and employee arising out of the maritime contracts or the remedies enforceable in admiralty. There is a fundamental distinction between statutes which interfere with the rights and obligations of the parties to a maritime contract, as between themselves, and a statute which effects no such interference.

The power to levy such an excise tax and to use the funds thus raised for local purposes is a sovereign power reserved to the States, of which they were not deprived by the Constitution of the United States. In Carmichael v. Southern Coal & Coke Co., Mr. Justice Stone (now chief justice) said: “ Taxes * * * may likewise be laid on the exercise of personal rights and privileges. As has been pointed out by the opinion in the Chas. C. Steward Machine Co. case, such levies, including taxes on the exercise of the right to employ or to be employed, were known in England and the Colonies before the adoption of the Constitution, and must be taken to be embraced within the wide range of choice of subjects of taxation, which was an attribute of the sovereign power of the States at the time of the adoption of the Constitution, and which was reserved to them by that instrument.” (p. 508.)

It is contended, however, that the State may not thus exercise its reserved powers of taxation because it involves a conflict with paramount powers vested in the Federal government in two respects; first, the State law is alleged to interfere with and burden maritime commerce in its national and international aspects as to which Congress alone has power to legislate; second, the State law is also alleged to contravene the essential purposes of and to work prejudice to characteristic features of the maritime law, and to interfere with its proper harmony and uniformity in its interstate and international relations.

The paramount power of Congress to legislate in the field of maritime law is implied from the grant to the Federal courts in section 2 of article III of the Federal Constitution, of judicial power in all cases involving admiralty and maritime jurisdiction. It is, however, well settled that in the maritime field, just as in the field of interstate commerce generally, the state has power to act in matters of merely local concern, which do not require unifdrm national legislation. (Cooley v. Board of Wardens, 12 How. [U. S.] 299.) One engaged in an interstate business may be lawfully subjected to a state tax upon the instruments employed in that business (Western Union Telegraph Co. v. Attorney-General, 125 U. S. 530), and this is so even though such commerce is maritime in nature. (Old Dominion S. S. Co. v. Virginia, 198 U. S. 299, 305.)

In addition, by section 1606, subd. (a) of the Federal Tax Act, the Congress has declared that state unemployment insurance laws may be applied to interstate commerce. And in Perkins v. Pennsylvania, 314 U. S. 586; affg., 342 Penn. St. 529) the Supreme Court has held that there is no constitutional obstacle under the commerce clause to the application of the Pennsylvania unemployment insurance law to those employed in interstate commerce. This would seem to be a conclusive determination that unemployment among those engaged in interstate commerce in general is a matter of local concern as to which no uniform national legislation is needed and in which field, therefore, the states may constitutionally legislate.

As to the second objection noted above and based upon the limitations upon state legislation stated in Southern Pacific Co. v. Jensen (244 U. S. 205) it would seem to be a sufficient answer to repeat that the enactment in question is a taxing statute designed to raise funds for a state purpose. It does not, therefore, attempt to alter the contract of employment between master and servant or to change the rights and remedies enforceable in admiralty as incidental to that relationship. It does not create any new rights or liabilities between the parties. Nothing contained therein would cause a court of admiralty to alter in any respect the body of law which it applies to the cases pending before it.

That a state may, within prescribed limits, enter into the field of maritime law and add to or modify remedies enforceable in admiralty was conceded by Mr. Justice McReynolds in the Jensen case. In Just v. Chambers (312 U. S. 383) a statute of the State of Florida, providing that a cause of action for personal injuries shall survive the death of the tort feasor, was held to be applicable in a court of admiralty to an action against the owner of a vessel on account of injuries occurring on navigable waters within the State boundaries. The State law, it was said, did not offend the criteria of essential purpose and uniformity laid down in the Jensen case. If, therefore, the states may, within the prescribed limits, actually add to the remedies under maritime law, a fortiori, the legislation in the case at bar may not be held to have overridden the limitations set forth in the Jensen case.

Respondents point to a line of authorities (Southern Pacific v. Jensen, supra; Knickerbocker Ice Co. v. Stewart, 253 U. S. 149; Western Fuel Co. v. Garcia, 257 U. S. 233; Grant Smith-Porter Ship Co. v. Rohde, 257 U. S. 469) holding workmen’s compensation statutes invalid as interfering with the characteristic features and essential uniformity of admiralty law. These cases all rest upon the principle that the workmen’s compensation laws set aside the common law rules respecting the rights and liabilities of employer and employee and substituted new rules for determining such rights and liabilities. These statutes become a part of the contract and thereby directly affect the rights and duties between the parties. As was said by this court in Matter of Doey v. Howland Co. (224 N. Y. 30, 36): “An award under the Workmen’s Compensation Law is not made on the theory that a tort has been committed; on the contrary, it is upon the theory that the statute giving the commission power to make an award is read into and becomes a part of the contract. (Matter of Post v. Burger & Gohlke, 216 N. Y. 544.) The contract of employment, by virtue of the statute, contains an implied provision that the employer, if the employee be injured, will pay to him a certain sum to compensate for injuries sustained, or if death results, a certain sum to dependents.”

A clear_ distinction between these cases and that of the unemployment insurance law is that the latter does not in any way operate upon the contract of employment or interfere with maritime and admiralty jurisdiction. The payment of an excise tax upon the privilege of employing others can no more be considered an unwarranted intrusion by the states into admiralty jurisdiction than can numerous other state taxes previously upheld; for instance,franchise taxes upon towing companies (People ex rel. Cornell Steam boat Co. v. Sohmer, 235 U. S. 549); taxation of insurance companies upon the writing of marine insurance policies (Ætna Ins. Co. v. Houston Oil & Transport Co., 49 Fed. Rep. [2d] 121); taxes upon shipping (Transportation Co. v. Wheeling, 99 U. S. 273); and tolls levied upon interstate and foreign shipping using state-improved waterways. (Sands v. Manistre River Improvement Co., 123 U. S. 288.)

It follows that there is no constitutional objection to coverage of maritime employments by the Unemployment Insurance Act of New York State.

We are thus brought to the second question, namely, whether by virtue of the provisions of section 1607 (subd. c) (par. 4) of the Internal Revenue Code (U. S. Code, tit. 26) the officers and members of the crew of a vessel on the navigable waters of the United States have been specifically excluded by Congress from coverage by state laws. We may assume that Congress has the constitutional right under the admiralty clause of the Federal Constitution, to .exclude maritime employments from coverage by state unemployment insurance.

In other words does the fact that the Federal Act in the case at bar exempts from its operation the officers and crews of vessels on navigable waters prevent the states from covering maritime employment in the unemployment insurance laws which they have enacted?

From the nature of the independent power reserved to the states of taxing for their own support and to promote the general welfare of their inhabitants, there has been developed the principle that it will not be presumed that Congress intended to exclude the reserved powers of the state by virtue of paramount powers vested in Congress by the Federal Constitution unless an actual conflict exists between Federal and State legislation. In Savage v. Jones (225 U. S. 501) the court lays down this principle (at p. 533): But the intent to supersede the exercise by the State of its police power as to matters not covered by the Federal legislation is not to be inferred from the mere fact that Congress has seen fit to circumscribe its regulation and to occupy a limited field. •In other words, such intent is not to be implied unless the act of Congress fairly interpreted is in actual conflict with the law of the State.”

A comparison of the Federal tax act and our State unemployment insurance act shows that there is no actual conflict between them even when the State act is construed to cover employments expressly exempted under the Federal taxing statute.

The Federal statute, of course, is not an unemployment insurance law. It is a mere taxing statute but contains a provision allowing ninety per cent of contributions exacted thereunder to be credited by employers against contributions paid under certified state systems. This credit arrangement was designed to give the states an incentive to enact their own unemployment insurance laws and to protect those states which enacted such laws against being put at a competitive disadvantage as against other states which might fail to take such action. Congress evidently believed that these objects could be accomplished by taking only certain kinds of employment while exempting other kinds. The states in creating their unemployment systems, on the other hand, had different objectives in view in canvassing the kinds of employment to be covered or excluded under their statutes. Their problem was to decide what types of employment seriously required the protection of an unemployment compensation law and what types could practically be included within such a system. Whatever types of employment the Congress might exclude, the states might exempt wholly different types upon the ground that employees in these categories did not require such protection or else that it would be impracticable or impolitic to furnish them with such protection. There is, therefore, no necessary similarity as to the types of employment either covered or exempted by the Federal and state statutes respectively.

The legislative history and the judicial interpretation of the Federal statute amply demonstrate that it was not intended thereby to strait-jacket the states in the. enactment of their own unemployment insurance laws. (See Senate Report, No. 628, Cal. No. 661, 74th Congress, p. 14; Steward Machine Co. v. Davis, swpra, at pp. 593, 594.) The conclusion is inescapable that Congress intended to leave to the states the widest possible latitude in setting up their unemployment compensation systems both as to the kind and extent of coverage provided. This broad policy may not be overriden by the exemptions contained in section 1607 (subd. c) (par. 4).

One word should be said in conclusion as to the argument advanced that great practical difficulties lie in the way of the states providing benefits for seamen, the nature of whose work may take them into many other states and even into foreign parts. A picture is drawn of the hopeless confusion into which maritime employment may be plunged if a number of states attempted to apply conflicting state statutes to the same employer-employee relationship. The difficulty conjured up would appear to be more imaginary than real and in no event could affect the result arrived at herein. It may be that Congress will in future decide to appropriate the entire marine field to a uniform unemployment insurance system. Such congressional action might effectively oust the states from the field because of the paramount power vested in Congress by section 2 of article III of the Federal Constitution. It is sufficient for the purpose of these appeals, however, to say that no such obstacle stands in the way of state legislation at the present time.

It follows that in the cases of the claimants, Cassaretakis and Bergen, the orders of the Appellate Division should be reversed and the determination of the Unemployment Insurance Appeal Board affirmed; in the cases involving Sheredos, Knowlson, Schein and Smith, the orders of the Appellate Division and the determination of the Unemployment Insurance Appeal Board should be reversed and the cases remitted to such Appeal Board for proceedings in accordance with this opinion, all with costs in this court and in the Appellate Division.

Lehman, Ch. J., Lougi-iran, Rippey, Lewis, Conway and Desmond, JJ., concur.

Ordered accordingly. (See 289 N. Y. 838, 839.)


author: Conway, J.

text:
    Jonathan O. Bulkley et al., as Copartners of the Firm of Bulkley, Dunton & Company, Respondents, v. Albert Shaw et al., Appellants.
    Argued May 25, 1942;
    decided October 15, 1942.
    The following questions were certified:
    “1. Is the agreement alleged in the complaint and upon which the action is founded void under the provisions of Personal Property Law, section 31, subdivision 2, as being a special promise to answer for the debt, default or miscarriage of another person?

      “ 2. Was the motion of the defendants-respondents' to dismiss the complaint on the ground that the alleged agreement on which the action is founded is void under the provisions of the Statute of Frauds properly granted at Special Term? ”

      William C. Scott, Barham R. Gary and Donald W. Smith, for appellants.
    The promise alleged is clearly void under the Statute of Frauds. (Richardson Press v. Albright, 224 N. Y. 497; Witschard v. Brody & Sons, Inc., 257 N. Y. 97; Watson v. Quilter, 220 App. Div. 663; 249 N. Y. 562; Workman, Inc., v. Lincoln, 220 App. Div. 670; 250 N. Y. 518; Diehl v. Garvin, 165 Misc. Rep. 170; Terminello v. Bleecker, 155 Misc. Rep. 702; Prudential I. W., Inc., v. Colchester Realty Corp., 142 Misc. Rep. 724.) The promise alleged is a special-promise to answer for the debt or default of another within the Statute of Frauds. (Millard v. Steers, 9 App. Div. 419; 158 N. Y. 741.) The presence of a new consideration moving to a beneficially interested promisor will not prevent operation of the Statute of Frauds. (Richardson Press v. Albright, 224 N. Y. 497; Witschard v. Brody & Sons, Inc., 257 N. Y. 97; Watson v. Quilter, 220 App. Div. 663; 249 N. Y. 562; Erie R. R. Co. v. Tompkins, 204 U. S. 64.)

      Sherman Baldwin, Thomas F. Daly and Sidney S. Coggan for respondents.
    The promise was not a promise to answer for the debt or default of another.' (Rosenkranz v. Schreiber Brewing Co., 287 N. Y. 322.) Even if the contract is held to be in effect a promise to answer for the debt of another, the Statute of Frauds has no application where, as here, there is an original promise based upon new consideration moving to a promisor who is beneficially interested. (Rosenkranz v. Schreiber Brewing Co., 287 N. Y. 322; Krider Building Material Co. v. Consolidated Indemnity & Ins. Co., 241 App. Div. 768; 265 N. Y. 611; Davis v. Patrick, 141 U. S. 479; Gotham National Bank v. Sharood Co., 23 Fed. Rep. [2d], 567; Wright v. Farmers’ National Grain Corp., 74 Fed. Rep. [2d] 425; Knight v. Kiser, 271 Fed. Rep. 869; .Choate v. Hoogstraat, 105 Fed. Rep. 713; Wilson v. Harburney Oil Co., 89 Fed. Rep. [2d] 211; Charles Broadway Rouss, Inc., v. Cooper, 69 Fed. Rep. [2d] 671; White v. Rintoul, 108 N. Y. 222; Raabe v. Squier, 148 N. Y. 81; Schwoerer & Sons, Inc., v. Stone, 130. App. Div. 796; 200 N. Y. 560; Meyers v. Arm, 126 Conn. 579; Garren v. Youngblood, 207 N. C. 86; Wahl v. Cunningham, 320 Mo. 57.)
   Conway, J.

This is an appeal from an order of the Appellate Division, First Department, which reversed an order of Special Term granting defendants’ motion to dismiss the complaint, made under rule 107 of the Rules of Civil Practice, on the ground that the alleged agreement on which the action is founded is void under the provisions of the Statute of Frauds (Pers. Prop. Law, § 31, subd. 2; Cons. Laws, ch. 41), and directed that the motion be denied.

The Appellate Division has certified the following questions of law to be reviewed by this court:

“ 1. Is the agreement alleged in the complaint and upon which the action is founded void under the provisions of Personal Property Law, section 31, subdivision 2, as being a special promise to answer for the debt, default or miscarriage of another person?
2. Was the motion of the defendants-respondents to dismiss the complaint on the ground that the alleged agreement on which the action is founded is void under the provisions of the Statute of Frauds properly granted at Special Term? ”

The contract alleged is substantially as follows: In 1937 the defendants owned or controlled all or substantially all of the stock of the Review of Reviews Corporation (hereinafter referred to as Review) and directed and controlled its affairs. Review published periodicals and magazines for the production of which large quantities of paper were required and large quantities of such paper were purchased by Review from the partnership of Bulkley, Dunton and Company (hereinafter referred to as Bulkley) during that year. During June of 1937, Review acquired a publication known as The Literary Digest ” and commencing with July, 1937 published it under the name of The Digest.” Shortly thereafter the defendants prepared a proposed budget which showed that Review would incur a deficit of $287,650 during the period from July 15, 1937 to January 15, 1938, in connection with the publication of “ The Digest.” In July, 1937, the defendants advised Bulkley that they would place Review in funds to enable it to finance the anticipated deficit and requested Bulkley to continue to sell and deliver paper to Review and to extend credit not to exceed ninety days for a temporary period so as to enable the defendants to have more time to consider in what manner to advance the necessary sums to Review. The defendants agreed that if Bulkley would continue to sell paper to Review and would agree to extend such credit, that defendants would advance to Review sufficient moneys for it to pay for said paper and to meet any deficit in its operations. Bulkley relied on those promises and agreed with defendants to continue to sell paper and to extend credit for the period and purpose requested. Despite the fact that Bulkley performed their portion of the agreement, the defendants failed and refused to advance to Review sufficient moneys to meet its operating expenses and Review did not have sufficient funds to meet them. As a result there was an unpaid balance of a considerable sum due Bulkley by November, 1937. Thereafter the successor corporation to Review was adjudicated a bankrupt, due to defendants failure to advance sufficient funds to meet the budget of 1937, and in August, 1940, Bulkley received a first and final dividend in a relatively small amount. This Bulkley applied in reduction of their claim for paper delivered to Review during 1937. The difference is the sum for which suit is brought.

The italicized portions of the contract as outlined above show quite clearly that the defendants never promised to pay Bulkley any sum. Their promise was to put Review in funds to meet its obligations. The credit to Review was sought in order to enable defendants to have more time to consider in what manner to advance the necessary sums to Review. The debt was always to be that of Review and never that of defendants. The agreement of defendants was to answer for the debt of another. If Review had had enough money to pay its debt to Bulkley or had paid it, Bulkley would not have been interested in whether or not the anticipated deficit of Review was financed. The fact is that Bulkley did not look to defendants for payment until the final dividend in the bankruptcy proceeding had been received in 1940, Bulkley’s own conduct indicated that they considered Review the primary obligor and the defendants secondary or collateral obligors.

The case of Richardson Press v. Albright (224 N. Y. 497), is squarely in point. There there was a promise by the defendant, a large stockholder of the publisher, to pay a printer in cash for each issue of a periodical. This court said by Pound, J. (p. 500): This letter contains no promise to pay plaintiff the debt of Oceanic PublisMng Company, but it contains a personal assurance that defendant will furnish Oceanic Publishing Company money to pay for each future issue,” and again, “ It later appeared that the money was to be forwarded by defendant to Mr. Davidson, the treasurer of the Oceanic Company.”

A lengthy quotation from the Richardson Press case would carry this opinion to too great length but the following indicates how close the two cases are upon the facts: But a promise may still be collateral, even though the new consideration moves to the promisor and is beneficial to him. The elements of a beneficial interest and new consideration must be present to take the case out of the statute, but the inquiry remains whether the consideration is such that the promisor thereby comes under an independent duty of payment, irrespective of the liability of the principal debtor. (White v. Rintoul, supra, at page 227.) The implied consideration, as indicated by the subsequent dealings of the parties, is that plaintiff will continue to give credit primarily to Oceanic Publishing Company. Plaintiff was notified on March 14, 1912, that defendant admitted no responsibility as to its claim, and it is indisputable that plaintiff thereafter considered that the primary duty of payment remained with the original debtor. * * * and turned to defendant only when the resources of the original debtor had been completely exhausted. The tenor of the entire transaction was that defendant purposed to help out the Oceanic Company and verbally promised to pay its debts. “ * * * it (the promise) is regarded as original only when the party sought to be charged clearly becomes, within the intention of the parties, a principal debtor primarily liable.” (Underscoring supplied.)

There can be no distinction between the Richardson Press case and the instant one because of the allegation in the present complaint that the defendants owned or controlled all or substantially all of the stock of Review. In the Richardson Press case, the defendant Albright was a substantial stockholder who was “ in charge of the Oceanic Publishing Company ” and would “ run it hereafter.” (p. 500.) The decision was not put upon the ground that the promisor’s obligation was at best remote,” although that was mentioned, but on the ground that the promisor did not come under an independent duty of payment, irrespective of the liability of the principal debtor.” (See also, Harburg India Rubber Comb. Co. v. Martin, [1902] 1 K. B. 778; Davys v. Buswell [1913], 2 K. B. 47; Hurst Hardware Co. v. Goodman, 68 W. Va. 462 [1910]; as to the promise of a large stockholder or debenture owner.)

Later in Witschard v. Brody & Sons, Inc. (257 N. Y. 97), we had the same question presented. There, defendant Buckley entered into a contract with the defendant Brody and Sons, Inc., to perform certain work on the latter’s premises. Buckley, for necessary lumber supplied to the job, became indebted in a substantial sum to the defendant Westbury Lumber Co., Inc., which refused to make further deliveries of lumber necessary to complete the job, until paid. Mr. Ben Brody of the Brody firm said to officers of Westbury that if they “ continued to deliver the balance of materials needed on that job he would guarantee payment of what had already .been delivered, and what was to be delivered in the future.” West-bury resumed deliveries to Buckley, who never paid for them. Westbury thereupon sought to recover from the Brody corporation, upon the promise made by that company, through Ben Brody, the amount due. This court used language peculiarly applicable here: We think that the promise, made orally, was not enforceable under the statute of frauds, since, it was ‘ a special promise to answer for the debt, default or miscarriage of another person.’ * * *. The fact that the Westbury Company, in continuing its deliveries to Buckley, at the request of the Brody Company, supplied a consideration for the latter’s promise is not sufficient to make the statute inoperative. A promise to guarantee the account of another, like every promise, requires the support of a consideration paid or promised, in order that an enforceable contract may have been formed. To say that the payment of a consideration removes an oral contract of guarantee from the application of the statute is to say that the statute can never operate, for there is no such thing as a contract without consideration. (I Williston on Contracts, § 472.) Prof. Williston says: ‘ The true test of the validity of a new oral promise should be: Is the new promisor a surety? ’ (Id. § 475.) If, as between the promisor and the original debtor, the promissor is bound to pay, the debt is bis own and not within the statute. ‘ Contrariwise if as between them the original debtor still ought to pay, the debt cannot be the promisor’s own and he is undertaking to answer for the debt of another.’ (Id.) We find the same view expressed in Mallory v. Gillett (21 N. Y. 412, 415) and Richardson Press v. Albright (224 N. Y. 497, 502). In the former, Comstock, Ch. J., said that ‘ the inquiry under that statute' is, whether there be a debtor and a surety in the latter, Pound, J., said that the promise is original 1 only when the party sought to be charged clearly becomes, within the intention of the parties, a principal debtor primarily liable. In this instance, the language of the promisor unmistakably indicates its intention to become a surety, for the very promise relied upon is that it ‘ would guarantee- payment.’ We have no doubt that the oral promise was within the statute and unenforceable.” (pp. 98, 99.)

It is urged by the respondents that there is a distinction between that case and this because there was no identity of interest between the Brody corporation and Buckley and that the agreement was only to pay upon Buckley’s default. Assuming that to be true, although it is difficult to find a greater interest in the subject-matter of a promise than one between a promisor and a debtor using materials to build upon property owned by the promisor for whom the debtor was working (an interest greater than in the instant case), the case still falls within the doctrine of Prof. Willis-ton, quoted with approval (supra) that “ if as between them the original debtor still ought to pay, the debt cannot be the promisor’s own and he is undertaking to answer for the debt of another.” A reading of the complaint leaves no doubt that Review remained the one who “ ought to pay ” and the primary obligor. It is so pleaded.

It may be true that the repudiation of their promise by defendants will result in injury to Bulkley, as is urged upon us, but there is no allegation of fraud in the complaint. A mere refusal to perform an oral agreement within the Statute, however, is not such fraud as will justify a court in disregarding the statute, even though it result in hardship to the plaintiff.” (2 Williston on Contracts [1936], § 533-A.) That argument was equally applicable in the Richardson Press and Witschard cases (supra) and indeed, in any case where the promisee has performed.

The Federal cases cited by respondents are inapplicable. (Erie Railroad Co. v. Tompkins, 304 U. S. 64.)

Rosenkranz v. Schreiber Brewing Co. (287 N. Y. 322), is not in point. There, on the plaintiff’s proof, there was no liability to him of any other person at the time defendant Schreiber Brewing Co. undertook to be his paymaster. In that view, there was no principal obligation to which the promise could have been collateral with the result that the promise was original, or so the jury could have found under the charge.

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 questions certified should be answered in the affirmative.

Lehman, Ch. J., Loughran, Finch, Rippey, Lewis and Desmond, JJ., concur.

Ordered accordingly.


text:
    Fred Hente, Respondent, v. Shercoop Corporation, Appellant, Impleaded with Another.

      Argued June 17, 1942;
    decided October 15, 1942.

      Edward F. Sweeney and Herbert F. Hastings, Jr., for appellant.
    The appellant being out of control of the entire premises, the trial court erred in charging that under sections 315 and 316 of the Labor Law (Cons. Laws, ch. 31) appellant was obligated to keep the elevator in repair. (Pharm v. Lituchy, 283 N. Y. 130; Cullings v. Goetz, 256 N. Y. 287; Fink v. 37 West 36th St. Co., 277 N. Y. 703; Homin v. Cleveland & Whitehill Co., 256 App. Div. 187; 281 N. Y. 484.) The trial court wrongly interpreted the provisions of section 257 of the Labor Law and erred in charging that the appellant was obligated thereunder to light the place of the accident. (Cullings v. Goetz, 256 N. Y. 287; Fink v. 37 West 36th St. Co., 277 N. Y. 703.) Plaintiff was guilty of contributory negligence as a matter of law. (Basmajian v. Board of Education, 211 App. Div. 347; Brugher v. Buchtenkirch, 167 N. Y. 153; Piper v. N. Y. C. & H. R. R. R. Co., 156 N. Y. 224; Lindsley v. Stern, 203 App. Div. 615; Hudson v. Church of Holy Trinity, 250 N. Y. 513; O’Neill v. Chatham Phenix Nat. Bank, 242 App. Div. 511; 267 N. Y. 622; Hilsenbeck v. Guhring, 131 N. Y. 674; Rohrbacher v. Gillig, 203 N. Y. 413.)

      Samuel G. Rabinor, George Pollack and Bernard Meyerson for respondent.
    The appellant as the owner of a tenant-factory building was liable for the safe maintenance of the elevator pursuant to sections 255, 315 and 316 of the Labor Law. (People v. Pease & Elliman, Inc., 173 App. Div. 752; 219 N. Y. 627; Goetz v. Duffy,
      215 N. Y. 53; Lieberman v. Van Gaasbeek, 223 N. Y. 640; People v. 242-252 West 36th St. Corp., 244 N. Y. 9; Hoffman v. Fraad, 130 Misc. Rep. 667; 224 App. Div. 717; 249 N. Y. 537; Appel v. Muller, 262 N. Y. 278; Weiner v. Leroco Realty Corp., 279 N. Y. 127; Urgo v. Coles & Co., 226 App. Div. 610.) Appellant was required to maintain the elevator entrance sufficiently lighted pursuant to sections 255, 257, 315 and 316 of the Labor Law. (Glass v. W. S. Holding Co., 239 App. Div. 546; Green v. Church of Immaculate Conception, 248 App. Div. 757; Mulac v. Greentree Homes, Inc., 256 App. Div. 1107.) Plaintiff’s freedom from contributory negligence was a question of fact for the jury. (Lee v. Ingraham, 106 App. Div. 167; Stump v. Burns, 219 N. Y. 306; Schuchatowitz v. Leff, 225 App. Div. 574.)
   Conway, J.

This is an action for personal injuries. The plaintiff, a carpenter, was a tenant of the defendant, Bostock, Rhoades & Co. Inc. (hereinafter referred to as Bostock) which, in turn, had leased the entire building from the appealing defendant Shercoop Corp. (hereinafter called Shercoop), the owner, with the right in the latter to enter and make repairs. Bostock occupied the six floors of the building except for that portion of the fourth floor which it leased to plaintiff and a portion of the sixth or top floor which it rented to another tenant.

The entrance used by plaintiff led into the manufacturing plant of Bostock and to a freight elevator situated some fifty feet toward the rear. Between door and elevator was a partitioned office of Bostock. The elevator was in shadow. Some distance from the elevator there was a work table of Bostock used for the cutting of glass and over that table there hung two lighting fixtures. Light was obtained therein by pulling upon cords suspended over the table. There was a lighting fixture in the elevator but none at its entrance.

On the day of the accident the plaintiff entered about eight o’clock in the morning. There was no artificial illumination. He put down some material near the elevator, which appeared to him to be at the floor, and then attempted to enter it for the purpose of lighting the light therein. The elevator had been moved to another floor and plaintiff fell to the bottom of the shaft.

There were iron doors for the elevator shaft but they were open. The wooden door in front of the elevator, which closed automatically and guarded the shaft when the elevator was moved to another floor had been out of order for some time and had been propped open by means of a stick.

The only question presented is as to the liability of the owner Shercoop who was out of possession. Such liability must depend upon statute. The pertinent sections of the Labor Law (Cons. Laws, ch. 31) read as follows:

§ 255. * * * In all factory buildings, every elevator and elevator opening and the machinery connected therewith and every hoistway, hatchway and well-hole shall be so constructed, guarded, equipped, maintained and operated as to be safe for all persons * * *
“ § 257. * * * 1. In every factory proper lighting shall be provided during working hours for: ****** *
b. All elevator cars and entrances * * *.”
“ § 315. * * * Whenever used in this article:
1. ‘ Owner ’ means the owner of the premises, or the lessee of the whole thereof, or the agent in charge of the property * * *.”
“ § 316. * * ' * The owner of a tenant-factory building, whether or not he is also one of the occupants instead of the respective tenants, shall be responsible for the observance of the following provisions of this article, anything in any lease to the contrary notwithstanding:
Section two hundred and fifty-five * * *. The owner shall also be responsible for all other provisions of this article in so far as they affect those portions of the tenant-factory building or its premises that are used in common or by more than one occupant. * * *.” (§§ 255 and 257 are contained in the article and so are included.)
The building was used as a tenant-factory building as defined by subdivision 2 of section 315 of the Labor Law, which reads: “1 Tenant-factory building ’ means a building, separate parts of which are occupied and used by different persons and one or more of which parts is used as a factory.”

Section 316, quoted (supra) then, clearly provides that the owner of a tenant-factory building shall be responsible — even though he lease the entire premises — for a violation of section 255 or, on the facts here presented, 257 of the Labor Law.

Appellant urges that the portion of section 315 quoted above, viz.: “ ‘ Owner ’ means the owner of the premises, or the lessee of the whole thereof, or the agent in charge of the property renders ambiguous the wording of section 316. It urges that if the Legislature had intended to place the burden of maintenance on an owner out of control, it would have provided that where the term ‘ owner ’ was used, it meant both the owner and the lessee of the whole premises; that the use of the disjunctive was intentional and placed the duty of safe maintenance solely upon the one in immediate control of the premises. We think that a fair reading of the statute indicates a legislative intent to hold the owner of a tenant-factory building responsible for the observance of every requirement of certain enumerated statutory provisions and that the owner or the lessee of the entire building or the agent in charge of the property or all of them may be sued for a violation of the duties thereby imposed. Each is responsible under the statute. (Goetz v. Duffy, 215 N. Y. 53; People v. 242-252 West 36th Street Corp., 244 N. Y. 9.)

The case of Homin v. Cleveland & Whitehill Co. (281 N. Y. 484) is not in point. The section of the Labor Law there involved was section 202. Section 316 was not applicable since the building- was not a tenant-factory building. In addition, section 202 was not listed in section 316 among the sections for the observance of which the owner was to be held responsible.

There is no question presented here as to whether the plaintiff would have been obligated in the exercise of due care, to switch on a light, at the entrance to the elevator had it been unlighted. There was no lighting fixture there. It cannot be said as matter of law that he was obligated to proceed some distance to a work table and light electric bulbs there so as to provide illumination for the elevator entrance.

The question of contributory negligence in attempting to enter the elevator without artificial light under the circumstances presented was one of fact for the jury.

The judgment should be affirmed, with costs.

Rippey, Lewis and Desmond, JJ., concur; Lehman, Ch. J., Loughran and Finch, JJ., dissent.

Judgment affirmed.


author: Per Curiam.

text:
    Harry Cohen, Appellant and Respondent, v. Ruth Cohen, Respondent and Appellant.
    Argued May 26, 1942;
    decided October 15, 1942.

      Noah Feldman for plaintiff, appellant and respondent.
    With respect to the marital status and the dissolution thereof, the jurisdiction of our courts is statutory and not inherent; therefore the attempt of the Appellate Division to vary, modify or vacate the judgments herein, was without authority. (Ackerman v. Ackerman, 200 N. Y. 72; Lynde v. Lynde, 162 N. Y. 405; Wilson v. Hinman, 182 N. Y. 408) Livingston v. Livingston, 173 N. Y. 377; Walker v. Walker, 155 N. Y. 77; Noble v. Noble, 20 App. Div. 395; Ambruster v. Ambruster, 170 Misc. Rep. 387; Stevens v. Peoples Bank, 246 App. Div. 481.)

      Jerome E. Leon and George Shakin for Otto Frankel, amicus curiæ.

    The final judgment of annulment under the law existing at the time of the entry thereof was improperly vacated. (Feiber

      Realty Corp. v. Abel, 265 N. Y. 94; Livingston v. Livingston, 173 N. Y. 377; Vogel v. Edwards, 283 N. Y. 118; Ackerman v. Ackerman, 200 N. Y. 72; Walker v. Walker, 155 N. Y. 77; Fox v. Fox, 263 N. Y. 68.)

      Joseph Protter and John W. Browne for defendant, respondent and appellant.
    The Appellate Division had power to vacate the 1938 judgments. (Matter of Henderson, 157 N. Y. 423; Ladd v. Stevenson, 112 N. Y. 325.)
   Per Curiam.

The 1938 judgments of annulment were, as the Appellate Division held, insufficient because they did not comply with the requirements of the statute; (Domestic Relations Law, § 7, subd. 5; Cons. Laws, ch. 14) as to care and maintenance of the defendant during life. Those judgments should either have contained definite provisions for the defendant’s care and maintenance throughout her life, regardless of whether she continued to be confined in a State hospital, or they should have contained a grant of leave to defendant to apply, in the future, at the foot thereof for their modification. In correcting these defects in the 1938 judgments, however, the Appellate Division should not have vacated the judgments but should have dealt only with their provisions for defendant’s support, particularly since the plaintiff-husband had meanwhile remarried, on the faith of those judgments. The terms of the new, or 1942 judgment here appealed from do, we think, full justice as between the parties, except that the result should have been achieved by a modification of the 1938 judgments, not by the vacating of those judgments, and entry of a new one with a new effective date.

The judgment appealed from should be reversed, without costs, and the case remitted to the Special Term with instructions to enter a new final judgment of annulment in favor of plaintiff and against defendant, to be dated September 26, 1938, and entered nunc pro tunc as of that date, which judgment shall otherwise be in all respects identical with the judgment appealed from, except that it shall contain a further provision, reserving to each party the right to apply at any future time, at the foot thereof for modification of the provisions for defendant’s care and maintenance, and the security therefor.

The judgment should be reversed, without. costs and the case remitted to the Special Term for proceedings in accordance with this opinion.

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

Judgment accordingly.