text:
    Hyman-Michaels Company, Appellant, v. Senior and Palmer, Inc., Respondent.

      (Argued June 7, 1934;
    decided October 2, 1934.)

      Sam L. Cohen, Henry B. Singer and Alfred W. Bressler for appellant.

      Samuel B. Stewart, Jr., and William F. Sullivan for respondent.
   Lehman, J.

The plaintiff is a corporation engaged in business as a dealer in sheet piling, steel rails and accessories. In August, 1931, it made an oral contract for the sale to E. O. Roberts, Inc., of steel sheet piling to be used by E. 0. Roberts, Inc., in connection with the performance of a bridge construction contract in New York. All the terms of the contract were thereafter confirmed in a letter signed by the plaintiff. Included in these terms was an agreement by the plaintiff to repurchase the material, upon stipulated conditions and at a stipulated price, when the bridge construction contract was completed by the Roberts Company.

The steel piling called for by the contract was delivered and accepted in accordance with the contract. Part payment was made by the Roberts Company in cash and a note for the balance was delivered to the plaintiff. The note was not paid, and the plaintiff proved at the trial that, in order to relieve the Roberts Company of some of its financial burden, the parties orally agreed that the piling which is the subject-matter of -this action should be immediately resold to the plaintiff at the price for which the plaintiff had agreed to repurchase it upon the completion of the bridge contract, and that the price should be credited upon the note of the Roberts Company. The parties did not at that time contemplate an immediate delivery to the plaintiff of the piling. It was not then in a deliverable state. It was under water and was still required by the Roberts Company in order to complete the bridge contract. One of the terms of this oral contract was that the plaintiff should lease the piling to the Roberts Company at a rental of one dollar per ton per month for use upon the bridge construction contract.

The oral agreement was never embodied in a written contract and no written lease of the steel sheeting was executed. The financial difficulties of the Roberts Company were becoming acute. Mechanics’ liens were filed by some of its creditors upon the unfinished bridge structure upon which it was working. The Roberts Company was not financially able to complete its construction contract and thus to earn moneys out of which these liens might be satisfied. A committee of the creditors, who had filed liens, made an arrangement with the Roberts Company for the completion of the contract by two trustees selected by these creditors. The defendant corporation contracted with the trustees to perform the necessary work for a stipulated price and the Roberts Company assigned to the defendant all its right, title and interest in the materials furnished by the plaintiff which were in use on the work. It was agreed in the written contract that if it should appear that the title of the Roberts Company to these materials was defective, an additional sum should be paid to the defendant. The plaintiff, claiming that it had title to these materials, notified the defendant of its claim and asked that the materials be delivered to it upon the completion of the construction. Upon the defendant’s refusal this action was begun.

By stipulation of the parties the case was tried by the court without a jury. The trial judge stated orally that he held that an oral contract for the repurchase of the chattels by the plaintiff was made but that the contract was void under the Statute of Frauds. In accordance with the terms of the stipulation, judgment was then entered for the defendant. Upon the appeal the plaintiff can prevail only if, upon uncontradicted testimony, it appears as a matter of law that title to the sheet piling is in the plaintiff.

The original contract whereby the steel sheeting was bought by the Roberts Company contained, as we have pointed out, an agreement by the plaintiff to repurchase the material from the Roberts Company upon the completion of the work for which it was intended. The agreement of the plaintiff to repurchase the chattels it sold was an integral and inseparable part of the contract to sell, and though the entire contract was oral and no note or memorandum thereof was signed by the Roberts Company, the contract in all its parts was enforceable against it and its assigns, for there was delivery and acceptance of the goods and part payment therefor, sufficient to satisfy the Statute of Frauds. (Cf. Johnston v. Trask, 116 N. Y. 136; 1 Williston on Sales [2d ed.], § 73.) For that reason the plaintiff now urges that even assuming that the subsequent oral contract to repurchase the material in May, 1932, is unenforceable, it can show title to the chattels under the original contract.

In truth, however, the original agreement to sell, when followed by delivery of the chattels, vested in the Roberts Company full title to the chattels, and that title has never been revested in the plaintiff, if the subsequent oral agreement of May, 1932, is void or unenforceable. Both in form and substance, the original agreement was one to sell and repurchase, and the intention of the parties is manifest that title should pass to, and remain in, the buyer, until the repurchase should be consummated. A construction that would give the agreement of the seller to repurchase the effect of passing the property in the goods sold, back to the seller at the very moment when the seller transferred the goods to the buyer, would defeat the intent of the parties and would in effect transform an agreement to sell into an agreement to lease. Indeed, the Roberts Company when it agreed to buy the chattels from the plaintiff did not in express terms agree to resell the chattels to the plaintiff, though the plaintiff did expressly agree to repurchase them. It is true that in a bilateral contract an express promise by one party to purchase ordinarily carries with it by implication a correlative obligation by the other party to sell; but the implication, in such case, rests upon the manifest intention of the parties and not upon any artificial rule or presumption. In a contract of purchase and sale, an express promise by the seller to repurchase the goods sold, at a stipulated price, may be intended to confer upon the original buyer a privilege or option or may be intended to impose upon the buyer a correlative obligation to sell. Here there is evidence that the parties intended an option. That would leave no basis for an implication of an obligation to resell.

Irrespective, however, of whether the Roberts Company had an option to resell, or was under an obligation to resell the chattels to the plaintiff at the completion of the contract, the stubborn fact remains that property in the chattels was never retransferred to the plaintiff either under any option or in accordance with any obligation created by the original contract of sale. If the property in the chattels was ever retransferred to the plaintiff, such retransfer was by virtue of the oral contract of May, 1932. The plaintiff has no other title upon which it can rely. That oral contract is, in many respects, different from the agreement to repurchase in the original contract of sale. In place of a retransfer of the chattels to the plaintiff upon stipulated conditions when the bridge construction was completed, the new contract provided for a present sale and a retransfer off title, while the chattels were still being used in the work, and, in addition, a lease of the chattels to the Roberts Company for use during the continuance of that work. The intention was to substitute a present and unconditional resale for an executory and conditional promise to repurchase. The provisions of the original agreement have never been carried out. If the present resale was void and of no effect then the plaintiff’s claim of title to the property must fail.

The subsequent assignment by the Roberts Company of the chattels which it had orally agreed to sell to the plaintiff constituted in effect a present assertion of title to these chattels and a denial of the existence or of the validity of its oral contract of sale. The defendant may, as its assignee, invoke the defense of the Statute of Frauds when attempt is made to enforce against it the oral contract. (Brabin v. Hyde, 32 N. Y. 519; 1 Williston on Sales [2d ed.], § 72.) The plaintiff seeks to avoid the effect of the statute by the claim that the evidence establishes that a memorandum was signed by the Roberts Company; that part payment for thé chattels has been given and accepted and that there has been symbolic delivery of the chattels.

It appears that after the oral contract of sale was made by the Roberts Company a stenographer of that company upon the direction of its bookkeeper and credit manager and at the request of a representative of the plaintiff typed an invoice for the chattels upon a blank form with the printed name of the Roberts Company at the top. The invoice states all the terms of the oral contract of sale, and if signed by a duly authorized agent of the Roberts Company would be a sufficient memorandum of the oral contract. The invoice concludes with the clause: Paid for by you with your credit memo, to be applied as credit on our account with you, receipt of which credit is hereby acknowledged and leaving a balance still due you of $270.59. The piling is held in the above-mentioned job as your property and subject to your order.”

After the invoice was prepared the plaintiff’s representative took some copies and retained them. Other copies were retained by the Roberts Company, and at the trial produced from its files. The plaintiff gave credit upon its' books to the Roberts Company for the amount of the invoice and the bookkeeper of the Roberts Company entered in its journal the transaction as set forth in the invoice. Subsequently at the direction of a superior officer of the Roberts Company the bookkeeper initialled an entry in the journal marking the transaction as canceled.

If the Roberts Company intended to adopt its printed name at the top of the invoice blank as its signature, or if the bookkeeper had authority to enter the transaction in the journal, it might be urged that the invoice and the entry initialled by the bookkeeper may be regarded as sufficient memoranda of the oral contract of sale. Similarly, if the invoice was delivered to the plaintiff as a memorandum of a completed transaction, then the book entries of the parties made thereafter might constitute part payment. Perhaps the delivery of the invoice might then even constitute a symbolic delivery of the goods. There can, however, be no signed memorandum, no payment and no symbolic delivery unless a duly authorized agent of the Roberts Company did intentionally sign, pay or deliver for that company.

The evidence presented by the defendant shows that no such acts were performed by any duly authorized agent of the Roberts Company — or, at least, the trier of the facts might so find. In that view, the bookkeeper and the stenographer who, it is said, joined in the preparation of the invoice did so without authority, and without personal knowledge of the details of the oral transaction, but solely because the plaintiff’s representative asked them to do so, and there was no intention that the invoice should be taken as a memorandum of the transaction until approved by a responsible officer of the Roberts Company. That approval was refused. So, too, the entry in the Roberts Company journal was not the act of any authorized agent or officer of the company. It follows that no title passed to the plaintiff under the oral contract of resale.

The judgment should be affirmed, with costs.

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

Judgment affirmed.


source: Caselaw Access Project

author: Loughran, J.

license: Public Domain

text:
    E. J. Eddy, Inc., Appellant, v. Fidelity and Deposit Company of Maryland, Respondent.

      (Submitted June 8, 1934;
    decided October 2, 1934.)

      Frederick G. Mitchell and William P. Conley for appellant.

      Mark N. Turner for respondent.
   Loughran, J.

In March, 1931, the firm of Barnett Bros, entered into a contract with the city of Buffalo for the performance of public work. Section 666 of the charter of the city of Buffalo (Local Law No. 4, 1927; Local Laws, 1932, p. 21) directs that a contractor with that city “ shall give an undertaking with a sufficient surety or sureties approved by the head of the department making the contract and in an amount specified therein for the faithful performance of the contract, which undertaking shall provide, among other things, that the person or corporation entering into the contract with the city will pay for all materials and services rendered in the execution of the contract, and that any person or corporation furnishing such materials or rendering such services may maintain an action to recover for the same against the obligors in the undertaking as though such person or corporation was named therein, provided the action is brought within one year after the time the cause of action accrued.” Conformably to this provision, a bond was furnished to the city of Buffalo by Barnett Bros., as principals, upon which the defendant Fidelity and Deposit Company of Maryland is surety. Barnett Bros, having been adjudicated bankrupt, the plaintiff, an unpaid subcontractor that supplied materials to them for performance of their contract, brings this action upon that bond.

That the city charter and the bond bestow a cause of action upon the plaintiff is not disputed. We assume that the beneficiary of a right so to sue may not enforce it to the prejudice of a municipal corporation by which the right is created. The intention to make such a bond a means of securing compensation to those whose labor or materials are to forward performance of a contract for public work is undoubtedly subordinate to the self-protection which is the first objective of the municipal corporation in taking the bond. It seems clear that a cause of action cannot be established in a case like this unless the municipal corporation has received upon a contract for public work the substantial performance which the bond of its contractor is primarily intended to secure. (Fosmire v. National Surety Co., 229 N. Y. 44. Cf. Wilson v. Whitmore, 92 Hun, 466; affd. sub nom. Wilson v. Webber, 157 N. Y. 693; Johnson Service Co. v. Monin, Inc., 253 N. Y. 417.) Danger that the city of Buffalo may be made the victim of a claim antagonistic to its own interest in the penalty of this bond is not apparent. The public work in question has been accepted by the municipal authorities and final payment for it has been made. The defendant does not contend that this action is prematurely brought and concedes that it was commenced within the one-year limitation fixed by the city charter and by the bond.

The record presents a question upon which there is a difference of opinion among us. An ordinance of the city of Buffalo, in force at least since 1920 (Ordinances of City of Buffalo, 1920, ch. 3, § 11), requires that every bond given for the performance of any contract made by that city shall contain a condition substantially the same in text as that prescribed by the city charter as above quoted. This ordinance further provides: “ The obligors in any such bond shall be liable and may be sued accordingly. Notice of the commencement of such action and of all proceedings therein shall be given to the Corporatian Counsel, and in default of such notice no recovery shall be had in such action.” The plaintiff has not given the notice called for by the ordinance. Upon that ground solely, the Appellate Division affirmed' a dismissal of the complaint directed upon another ground at the trial.

We are unanimously in accord with the ruling of the Appellate Division that the complaint should not have been dismissed for the reason assigned by the trial court.

We are one also in the opinion that the plaintiff is not exempt from the operation of the ordinance. Although the city of Buffalo has here accepted the public work and has made full payment for it, latent defects in the performance of the contract may have since developed which would entitle the municipality to resort upon its own account to the security of the bond in suit. Even were this possibility precluded, insistence upon obedience to the ordinance is not to be dismissed as capricious. The plaintiff is but one of a class of beneficiaries of the defendant’s obligation. For all that appears, laborers or other materialmen having equal rights may be unpaid by Barnett Bros., the contractors. Assuming that the city of Buffalo may no longer choose to assert any right of its own, notice pursuant to the ordinance may enable it, if it see fit, to procure equitable apportionment of the penalty of this bond among all others intended to be benefited by the undertaking. For these reasons, and perhaps for others, no exception in favor of the plaintiff should be made to the requirement of notice imposed by the ordinance.

In the opinion of a majority of the court, it does not follow that the complaint should have been dismissed on the sole ground that the plaintiff omitted to comply with the ordinance. The answer is silent respecting the failure of the plaintiff to notify the city of Buffalo of the prosecution of this action. Upon the issues raised by the pleadings, the cause of action against the defendant surety is established, unless notice by the plaintiff to the municipal corporation, in accordance with the ordinance, is a substantive element of the liability asserted. We think the ordinance should not be so construed.

The plaintiff sues in its own right. Notice to the city of Buffalo is not made a condition precedent to prosecution of the remedy conferred. That city is not made a necessary party to any proceeding. It demands “ Notice of the commencement of such action and of all proceedings therein.” No precise time is defined when or within which that notice is to be had. The purpose of notice thus to be given seems plain. In terms of the case at hand, the intent of the ordinance appears to us to be that the penalty of the bond in suit is not to be exhausted or diminished in satisfaction of the claim of this plaintiff, until the obligee, the city of Buffalo, has had opportunity to present to the court its primary right, or perhaps the secondary rights of other beneficiaries of the same security. We think the requirement of notice enjoined by the ordinance was such an administrative regulation and nothing more.

So construed, the ordinance could here have been given full effect without summary dismissal of the complaint. In the first instance it would have been enough to have withheld judgment until the plaintiff, by notice pursuant to the ordinance, had afforded to the city of Buffalo the chance of a hearing in the action. The policy of that municipality, as declared by its charter, is that the bonds of its contractors shall protect those whose services or materials go into its public work. The ordinance manifests the same intention. To a majority of the court it seems that the ruling of the Appellate Division may in some cases result in the frustration of this policy and intention. Certainly that is the consequence of dismissal of the complaint in this case, in the event the penalty of this bond is adequate to cover all liabilities of Barnett Bros., the contractors, growing out of the public work in question. The ordinance will bear another construction, one more consonant with its spirit and aim, as we have attempted to show.

In our opinion, therefore, a new trial should be had.

The plaintiff assails the ordinance as unconstitutional. Since it was enacted before the bond in suit was made, the contention that a vested right of the plaintiff has been abridged is not persuasive. There is no inconsistency between the ordinance and the charter provision under which the bond was delivered. It is true the charter does not specifically authorize exaction of the notice required by the ordinance. • Whether there Was incidental power to impose this requirement we need not decide. It is sufficient to say, upon this branch of the case, that these questions were not raised at the trial.

The judgment should be reversed and a new trial granted, with costs to the appellant in all courtsTo abide the event.

Pound, Ch. J., Crane, Lehman and O’Brien, JJ., concur; Hubbs and Crouch, JJ., dissent.

Judgment reversed, etc.


author: Crane, J.

text:
    S. J. E. Building Corporation, Appellant, v. Matt O. M. Construction Company, Inc., Respondent, Impleaded with Others.

      (Argued October 1, 1934;
    decided October 9, 1934.)

      Emanuel F. Kirk for appellant.

      Julius Samit and Alexander Samit for respondent.
   Crane, J.

This action is brought to foreclose a mortgage on real property situated in Brooklyn, county of Kings, on which the sum of $25,316.82 was found to be due. This was a building loan mortgage. The defendant, Matt O. M. Construction Co., Inc., interposed an answer setting up two counterclaims, one for $2,000, by reason of the failure on the part of the plaintiff to make the last payment called for by the building loan agreement; and the other for $37,500, based on allegations of fraud, in that the plaintiff had interfered with this defendant getting a first mortgage of $37,500, saying that it would procure such a mortgage for the defendant in the sum of $40,000. Practically no evidence in support of either of these counterclaims was adduced on the trial of the action, and judgment was given for the plaintiff for the full amount due. The judgment declared the plaintiff’s mortgage to be “ a first lien on said premises ” for said amount. It also contained this provision: Ordered, adjudged and decreed that each and all of the defendants in this action and all the persons claiming under them or any of them after the filing of said notice of pendency of this action be and they hereby are forever barred and foreclosed of all riglit, claim, title, lien and interest and equity of redemption in such mortgaged premises and each and every part thereof.”

In making the findings of fact and conclusions of law, and in entering this judgment, the judge omitted to say formally and specifically that the counterclaims were dismissed. The judgment for the plaintiff in the full amount claimed could not have been given, nor the defendant barred from any and all interest in the property, or the plaintiff’s interest therein, without a dismissal of the counterclaims. This is the effect of the judgment, and cannot be anything else. The plaintiff could not recover the amount alleged to be due while at the same time the trial justice failed to dispose of the defendant’s claim against or in reduction of the amount. Therefore, it is apparent that the failure to use the words or make the finding, counterclaims dismissed,” was a mere omission. It could not be anything else. Perhaps both the parties and the judge thought, in view of the full recovery by the plaintiff, the formal statement of dismissal was unnecessary.

However this may be, upon subsequent application on notice to the defendant, the trial justice amended his findings and judgment by including the words, the counterclaims of the defendant, Matt O. M. Construction Co., Inc., herein be dismissed.”

This practice was in accordance with section 105 of the Civil Practice Act, which reads: At any stage of any action, special proceeding or appeal, a mistake, omission, * * * may be corrected or supplied, as the case may be, in the discretion of the court. * * * ” That it was an omission is not only apparent, but the trial justice, in granting the amendment, said: “ The plaintiff merely seeks an amendment of the judgment which would correct an omission of a right or relief to which it was entitled upon the facts already found in this action.” In other words, the justice knew and realized, as we must, that having given judgment, for the plaintiff for the amount due, it was entitled, upon such finding, to a dismissal of the counterclaims. If this section of the Civil Practice Act is to have any force and effect whatever it must cover such an omission as this.

Nowhere in the opposing affidavit on the motion did the defendant claim or assert that the counterclaims were not disposed of and dismissed; reliance was placed entirely upon the lack of power in the trial court to supply the omission. Courts must see that procedure does not smother merit and be used merely for obstructive purposes.

The Appellate Division was of the opinion that oiir decision in Herpe v. Herpe (225 N. Y. 323) did not sanction this amendment. We held in that case that findings of fact and conclusions of law having once been made, and judgment entered in accordance therewith, the judge or referee could not thereafter change the decision in any way inconsistent with the findings which he had made. This was commented upon in Corr v. Hoffman (256 N. Y. 254). 'The amendment made by the trial judge in this instance is in harmony with and in completion of the findings for the plaintiff. The inconsistency arises in leaving out the dismissal of the counterclaims, not in putting it in. Therefore) the trial justice acted not only in accordance with section 105 of the Civil Practice Act, but also followed the decisions of this corut.

That this court has jurisdiction on appeal from an order amending a judgment, although reversed by the Appellate Division, see Livingston v. Livingston (173 N. Y. 377, 379). The amending order contains in full the judgment as amended.

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.

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

Ordered accordingly.


author: Per Curiam.

text:
    In the Matter of the Application of The People of the State of New York, by George S. Van Schaick, as Superintendent of Insurance, Appellant, for an Order to Take Possession of the Property of the Lawyers Title and Guaranty Company. City Bank Farmers Trust Company, Respondent. In the Matter of the Application of The People of the State of New York, by George S. Van Schaick, as Superintendent of Insurance, Appellant, for an Order to Take Possession of the Property of the New York Title and Mortgage Company. Central Hanover Bank and Trust Company, Respondent.
    (Submitted October 1, 1934;
    decided October 9, 1934.)

      Lawrence S. Greenbaum, Jonas J. Shapiro, Theodore S. Jaffin and Benjamin Kaplan for motions.

      William D. Mitchell, Edwin W. Cooney and Edward L. Hunt, Jr., for City Bank Farmers Trust Company, opposed.

      Albert Stickney and Francis S. Bensel for Central Hanover Bank and Trust Company, opposed.
   Per Curiam.

Application has been made to amend the remittitur in these two cases. Our decision affirmed the orders of the courts below, whereas it should have read that the orders below were modified in accordance with the opinions. It will be seen by a glance at these opinions that our conclusion was not in harmony with all the directions made in the Special Term orders. Therefore, our decision should be a modification of these orders in so far as they are inconsistent with what we stated in the opinions, and as thus modified, affirmed.

There was one matter presented on the argument in the briefs which was not mentioned in our opinions or dealt with by our decisions and which should receive attention. This is the question of compensation and expense payable to the Superintendent of Insurance as conservator in caring for and servicing the mortgages after he had taken possession of the companies and before a demand by the mortgagees for their papers and full control. There is no question that the Superintendent of Insurance as conservator is entitled to fair and reasonable compensation as well as to necessary expenses for carrying out the work of the title companies in servicing these mortgages so long as the owners of them permit or request him to do so. The vast majority of the mortgagees have left their mortgages with the title companies or the conservator. The work of caring for them, collecting interest, paying taxes, etc., is going on as usual. For such service the Superintendent is entitled to reasonable compensation. Whether it be the half of one per cent more or less, as provided for in the insurance contract, we do not determine. The question of compensation is a matter for the parties or the court of first instance to determine when the question arises. All that we do determine is that for the work done by the conservator up to the time of demand by the mortgagee to quit he is entitled to reasonable compensation from the mortgagee out of the funds received.

The motions to amend our remittiturs are, therefore, granted. The remittiturs will be returned to this court and, when returned, will be amended so as to read that the orders below [in these two cases] are modified in accordance with the opinions and, as thus modified, affirmed, with costs.”

The motions for reargument are denied.


text:
    Joe Kessler, Respondent, v. Ben Fligel, Appellant.
    (Submitted July 3, 1934;
    decided October 9, 1934.)

      Samuel M. Rivelson for motion.

      Lawrence Kovalsky opposed.
   Per Curiam.

While reliance has been placed upon Terwilliger v. Browning, King & Co. (207 N. Y. 479), as holding that applications to the Appellate Division for leave to appeal on certified questions must be made within thirty days after the order was rendered without regard to the service of the order or the notice of entry thereof, it appears that in Matter of Bean v. Stoddard (238 N. Y. 652, 581, 618) the court, without reference to the Terwilliger Case (supra), held that the time within which such applications may be made begins to run from the date of service on the opposite party of a copy of the Appellate Division order with notice of entry thereof. The practice in applications for leave to appeal from the Appellate Division on certified questions, that is, from intermediate orders, is thus assimilated to the practice on applications for leave to appeal from final orders and final judgments.

Motion for reargument of motion to dismiss appeal granted and motion to dismiss denied.


author: Per. Curiam.

text:
    Fred P. Brown et al., Respondents, v. The University of the State of New York et al., Appellants.
    (Submitted October 1, 1934;
    decided October 9, 1934.)

      John J. Bennett, Jr., Attorney-General (Sol Ullman of counsel), for motion.

      Charles H. Tuttle opposed.
   Per. Curiam.

The papers used on the motion for a preliminary injunction are not properly a part of the record when the appeal is from the judgment and the Appellate Division has decided that the motion for a declaratory judgment must be granted on the pleadings.

In as much as the record has been printed it will be unnecessary to reprint the record on appeal, but on the argument the papers on the motion for a preliminary injunction will not be considered.

Motion denied.


text:
    Leon Wieselthier, Appellant, v. Lafayette Insurance Company et al., Respondents.
    (Argued October 1, 1934;
    decided October 9, 1934.)

      Milton Adler for motion to dismiss appeal.

      Leon Seinfeld opposed.
   Per Curiam.

The court has no power to dispense with an undertaking where a constitutional question is involved. (Civ. Pr. Act, § 593.) The application should be made to the Appellate Division or to a judge of this court. The application having been submitted to Chief Judge Pound, he denies the application on the ground that no constitutional question is involved.

Motion granted and appeal dismissed, with costs and ten dollars costs of motion, unless appellant serves and files an undertaking and pays ten dollars costs within ten days, in which event the motion is denied.


author: Pound, Ch. J.

text:
    New York Life Insurance Company, Appellant, v. H. & J. Guttag Corporation et al., Respondents, Impleaded with Another.
    (Argued October 3, 1934;
    decided October 16, 1934.)

      William F. Columbus and Harry H. Bottoms for appellant.

      David Vorhaus, Louis J. Vorhaus and Joseph Fischer for respondents.
   Pound, Ch. J.

Chapter 794, Laws of 1933, declares that a temporary emergency exists which requires legislative action relative to deficiency judgments in mortgage foreclosures and places' a limitation thereon effective now by extension (L. 1934, ch. 277) until July 1, 1935. With this purpose in view the Legislature enacted section 1083-a of the Civil Practice Act which reads in part as follows:

§ 1083-a. Limitation upon deficiency judgments during emergency period. No. judgment shall be granted for any residue of the debt remaining unsatisfied as prescribed by the preceding section where the mortgaged property shall be sold during the emergency, except as herein provided. Simultaneously with the making of a motion for an order confirming the sale or within ninety days after the date of the consummation of the sale by delivery of the proper deed of conveyance to the purchaser, the party to whom such residue shall be owing may make a motion in the action for leave to enter a deficiency judgment upon notice to the party against whom such judgment is sought or the attorney who shall have appeared for such party in such action. Such notice shall be served personally or in such other manner as the court may direct. Upon such motion the court, whether or not the respondent appears, shall determine upon affidavit or otherwise as it shall direct, the fair and reasonable market value of the mortgaged premises as of the date such premises were bid in at auction or such nearest earlier date as there shall have been any market value thereof and shall make an order directing the entry of a deficiency judgment. Such deficiency judgment shall be for an amount equal to the sum of the amount owing by the party hable as determined by the judgment with interest, plus the amount owing on ah prior hens and encumbrances with interest, plus costs and disbursements of the action including the referee’s fee and disbursements, less the market value as determined by the court or the sale price of the property whichever shall be the higher. If no motion foria deficiency judgment shall be made as herein prescribed the proceeds of the sale regardless of amount shall be deemed to be in full satisfaction of the mortgage debt and no right to recover any deficiency in any action or proceeding shall exist. * * * ”

Apphcation for a deficiency judgment was made under this section by the plaintiff. The motion was opposed. The affidavits as to value were conflicting. The property had been bid in for $180,000. Plaintiff’s appraisers valued the property at $165,000 or thereabouts. Defendants’ appraisers fix the value of the property at $250,000 or thereabouts.

If plaintiff’s values are correct, the unpaid residue of the plaintiff’s mortgage debt is $46,405.33, for which the plaintiff would, under normal conditions, have a deficiency judgment. During the emergency he may not have such deficiency judgment unless the property sells at substantially its fair and reasonable market value. No longer may the plaintiff in a foreclosure action bid in the property at a nominal sum when the depression in the real estate market has absorbed the owner’s once substantial equity therein.

We have, perhaps unnecessarily, said of section 1083-a that such legislation, reasonably seeking only temporary relief, is not unconstitutional,” even though applied to foreclosure actions instituted prior to the date of the emergency legislation. (Klinke v. Samuels, 264 N. Y. 144, 149.) True the decision in the case directly involved only section 1083-b of the Civil Practice Act, but section 1083-a was quoted without any suggestion of a distinction on constitutional grounds. The right to a deficiency judgment is the creation of statute (Rutherfurd Realty Co. v. Cook, 198 N. Y. 29, 33), but when it exists at the time that a mortgage is executed it may well be urged that it is a part of the contract which may not be impaired by subsequent legislation. Emergencies, however, awake legislative powers that sleep in normal times. (Matter of People [Title & Mtge. Guarantee Co.], 264 N. Y. 69.) In the absence of a direct attack on section 1083-a we shall consider the question before us as being the question certified which involves construction rather than constitutionality.

We fully concur with the views expressed by the dissenting justices below that where there is a sharp issue as to the value and where the affidavits are at variance, a proper application of the section requires a trial of the issues correctly to determine the true value of the property.

If the right to a deficiency judgment is constitutionally limited, constitutional requirements as to the rights remaining should be sedulously protected. Although truth may be found even in an affidavit, we know that affidavits often are couched in the language of their composer rather than in that of the affiant and are an unsatisfactory substitute for confrontation and cross-examination of witnesses. In so important a matter the witness should be produced before the court, subject to observation and cross-examination. A summary judgment may not be granted where a triable issue is revealed. A deficiency judgment where a triable question of fact is tendered no less jeopardizes the rights of the parties if such trial is refused.

The language of the section, upon affidavit or otherwise,” plainly suggests the legislative intent that a substantial question of fact should not be disposed of on affidavits. The judge may order such a hearing in his discretion but should not the hearing be ordered as a matter of right? The constitutional right of trial by jury is not involved, but we think that a trial before the court is alone consistent with that due process of law which depends not so much upon the quality of the act in the abstract as upon its proper relation to those constitutional limitations which exist alike in peace and in war and in periods of storm and calm, and which should not be construed as meaningless. It is perfectly reasonable to construe this section as preserving the right of trial of substantial issues. We prefer the construction which calls for a hearing before a final decision of the cause.

When the legislative mandate requires a cause in court to be decided against a party who has had no opportunity to produce his evidence, we may find it necessary to hold that such judicial process is not that due process of law which stands like a rock to protect private rights from invasion by unlimited legislative power.

The order appealed from should be reversed, with costs in all courts, and the case remitted to the Special Term to try the issues of value, either before the court or a referee. The question certified should be answered in the affirmative.

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

Ordered accordingly.


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    In the Matter of Ace Mail Advertising, Inc., Respond-dent, v. Harry Newgold, Appellant.
    (Argued October 3, 1934;
    decided October 16, 1934.)

      Max L. Schallek and Meyer H. Robinson for appellant.

      William Bernstein and Harry Pinesick for respondent.
   Crane, J.

Appellant has been adjudged in contempt for violating the restraining provisions contained in an order in supplementary proceedings, dated November 25, 1930. The Appellate Division has certified six questions to this court, as the affirmance of the contempt order is not appealable without leave of the Appellate Division. An order adjudging a party guilty of a civil contempt in proceedings supplementary to execution is not a final order. (Hand v. Ortschreib Bldg. Corp., 254 N. Y. 15.)

The judgment against the appellant, obtained on June 30, 1930, was for $4,902.88. Under the supplementary proceeding order he was examined on November 25, 1930; on December 5, 1930; and on December 19, 1930, the examination was closed. Three years later the judgnaent creditor learned that the judgment debtor at the' time of his examination in 1930 had two causes of action pending in the Supreme Court, the facts of which he had not revealed upon his examination, and that in 1933 he had settled the actions for some $20,000, which he paid out to other creditors.

The Ace Mail Advertising, Inc., the judgment creditor here, thereupon obtained on November 2, 1933, another order in supplementary proceedings under which it again examined the judgment debtor and ascertained the facts just stated. Application was thereupon made to punish the judgment debtor for violation of the restraining provisions in both these supplementary proceeding orders. Although this motion was granted it is conceded that it was improper if based upon the order of November 2, 1933, as the restraining provisions in that order could not apply to payments made before it was obtained. The contempt, therefore, rests upon the restraining provisions in the order of November 25, 1930. As above stated, the examination under this order was completed and closed on December 19, 1930. For acts committed and payments made by the judgment debtor in 1933, three years later, the judgment creditor has succeeded in having him punished for contempt on the supposition that the restraining order had remained in force and effect for three years and more.

As we held in People ex rel. Rogall v. Jacoby (264 N. Y. 485), a proceeding may be deemed abandoned by lapse of time or by the apparent intention of the parties as well as by .formal stipulation or order. The respondent insists that it was necessary to obtain an order under section 802 of the Civil Practice Act to discontinue or dismiss the supplementary proceeding order before the restraining provisions could terminate. This was not our holding in the Bogall case and is not our determination now. The provisions of section 802 are permissive. Such proceedings may be terminated by consent, by stipulation in writing or by any other act or lapse of time which indicates abandonment or intention to prosecute no further.

We think that the facts in this case clearly show, as they did in the Rogall case, that all further proceedings under the supplementary proceeding order of November 25, 1930, had been abandoned and that the restraining provisions had terminated. We cannot conceive of such an order being kept open indefinitely as a catch for unsuspecting parties. If the judgment debtor on his examination committed perjury, he may be dealt with accordingly.

The order appealed from should be reversed and the judgment debtor discharged, with costs in all courts. Certified questions one and two are answered in the affirmative, three and six in the negative, and four and five not answered.

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

Ordered accordingly.


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    Marie A. K. Ward, Respondent, v. F. R. A. Operating Corporation, Appellant.
    (Argued October 17, 1934;
    decided October 23, 1934.)

      James A. Nooney and Ralph O. L. Fay for appellant.

      Harold R. Medina and William F. Mc Nulty for respondent.
   Crane, J.

On Labor Day night, September, 1932, Mrs. Marie A. K. Ward attended a moving picture performance at the Farragut Theatre on the corner of Flat-bush avenue and Farragut road, Brooklyn, N. Y. She was seated on the right-hand side of the middle aisle in about the seventh or eighth row from the front, and the third seat in. The place was filled and all the seats were taken. She had not been there very long when in front of her and a little to the side near the stage, an explosion took place, causing a panic and great confusion, and the crowd of course screamed and the theatre appeared to be on fire.” The explosion was caused by a sulphur bomb, giving out flame and smoke and a stench. Apparently it was set off by some one belonging to, or in sympathy with a labor organization, hostile to the proprietor of this moving picture house.

In a fight between two local labor organizations there had been previous trouble, and pickets were walking up and down in front of the theatre. The managers had applied to the police for protection. The explosion, therefore, was the deliberate, wicked act of a person over whom the defendant had absolutely no control and of whose hostile presence it was unaware. Some of the people were panic-stricken and rushed up the front aisle to the back of the house, and to the left-hand doors in an attempt to get out. The theatre was in darkness as the picture was being shown upon the screen. When the bomb went off, Mrs. Ward stood up in her seat, which was a folding seat, and some unknown man on the right-hand side toward the front jumped over the seats, going toward the front door, the main door, put bis hand on her shoulder as leverage to jump over the back of the seat that she was sitting on, throwing Mrs. Ward over the arm of the chair, causing her injuries. She says that it seemed as if he was jumping over several seats before he reached her as he was beyond the row in front. Q. Have you any idea whatsoever how long you had been standing before this happened? A. No, I have not; it was longer than a second or two. Q. But you don’t know how much longer, do you?. A. No.” Mrs. Ward further says: “ I had been standing there and allowing people to pass me rather than to get into the crowd] I was standing against the back of the seat.”

A Mr. Daly, who was sitting in the fifteenth or twentieth row back from the screen, says that while the lights were off and the picture was being shown, this explosion of sulphur took place down near the front rows and he stood up to see what was going to happen. “ I stood up in my seat straight, because people' were jumping up all around me hollering. I lost my hat and I stood up straight into the seat and stayed there to find out which way I was going to get out myself; they were going toward all doors. I stayed on there even after the explosion to see the balance of the picture. Everybody seemed to rise up at once when it happened.”

“ Q. And did they start to move, to leave their seats, immediately after the explosion? A. That is right. By the Court: Q. Were there cries or shouts in the audience? A. Yes, there were. Everybody1 — I say everybody — most of the people, some of the people held their head, others lost their heads. That is where the trouble started. ’ ’

Deshia Brown, another spectator, was in the front row when the explosion occurred. Q. What ldnd of an explosion was it? A. Well, it had an awful odor, and it seemed like a flame, and it bursted up, and then it went into a smoke, and it was like a stench. Q. And when that happened what did the people in the theatre do? A. Well, in the section where I sat there was screams from the people that were burned. Q. And what did they do, apart from being burned? A. And there seemed to be a mad rush toward the front of the theatre.”

Lafayette C. Hobart, another spectator, gave this testimony: Q. And at the time this explosion took place, what did the people in the theatre do — I mean the audience, the spectators? A. Well, I grabbed my wife and I went toward the front of the house; my wife was with me; my clothes were burned, and my shoulder and neck and hair and everything else was burned. Q. You went through the aisle without any difficulty, didn’t you? A. Oh, no; there was a lot of people in the aisle, people standing in the aisle, firemen and everybody else. The firemen stood right alongside of me; two of them in uniform.”

A Mr. Gottberg, also in the theatre, had this to say: “ Q. What happened when the explosion took place? Was there smoke, and were there fumes and a bad smell? A. Yes. Q. What did the people in the theatre do? A. Started for the exits. Q. And how did they start? A. Moderately, moderately rushing.”

This is a full and complete description from the testimony, most favorable to the plaintiff, as to what took place at the time of the explosion. The plaintiff has built up this action for negligence against the owners of the theatre solely upon this additional testimony, contradicted by the defendant, and yet which we must accept as true in view of the findings; — as^the picture was being shown at the time of the explosion or the flare-up of the sulphur bomb, the picture kept on and was not immediately shut off; the performance continued and the full lights did not go up for seven, eight or perhaps ten minutes; that the ushers were not seen in the aisles; no one appeared upon the stage to warn the people that there was no danger, and there was a rush to the left of the house facing the stage, toward an exit which was near the front, not immediately opened.

Now whafiall these omissions had to do with the man who lost his head and jumped over the seats onto the plaintiff does not appear; neither does it appear that if any or all these things, complained of by the plaintiff, had been done or complied with, that he would have kept still. In other words, there is absolutely no connection between the failure of the ushers to be in the aisle, the absence of any warning from the stage, the failure to put on the lights immediately or the opening of the door on the left with the action of this spectator who, in a few seconds after the flash, jumped over the seats on to the plaintiff, making for the front door. To say that these things had anything to do with his action is the wildest guess. The impression made upon the trial judge comes out in his opening charge to the jury: “ The case is interesting because it involves a question of mob psychology, the behavior of man in the mass or in the herd, the behavior of man when fear and cowardice and excitement enter his soul.” The plaintiff was hurt by just such a man. Nothing the theatre proprietors could have done, so far as the evidence shows, would have prevented this panic-stricken man from jumping on the plaintiff.

The judge further stated in his charge to the jury that before the defendant could be held liable, there must be the additional factor, that the time element entered in, and that this man’s panic was due not only to the explosion, but also in some measure to the closed exits, to failure to put on the lights, to failure to issue warning cries and to tell the audience to be calm and to be seated.” There is no evidence to show, or from which the jury could infer, that “ this man’s panic ” was due to anything else than the explosion. Besides the failure immediately to turn on the lights or to send ushers through the aisles or to make an announcement from the platform or immediately to open an exit on the left would not in and of themselves make the defendant Hable. These were all matters of judgment to be exercised in view of the emergency and the possible seriousness or extent of the fire or supposed fire.

The defendant was not obHged to exercise the best judgment, and would not be Hable for a wrong choice of action if called upon to act quickly in the face of peril. Even if the plaintiff were injured by reason of the failure to do any or all of these things, the jury would still have to determine whether the defendant, under all the circumstances, had used reasonable care. Perhaps the quickest way to quiet a panic would be to keep the picture or performance going. This request was made for a charge■— “I ask your Honor to charge the jury that there is no proof in the case that from the time of the explosion to the time the unidentified man placed his hand on the shoulder of the plaintiff, sufficient time elapsed to permit the defendant to act in the matter.” It was error to refuse this request as there was no such proof, and the complaint should have been dismissed.

For the reasons here stated, the judgments of the lower courts should be reversed and the complaint dismissed, with costs in all courts.

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

Judgments reversed, etc.


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    John J. McCloskey, Respondent, v. The City of New York, Appellant.
    (Argued October 15, 1934;
    decided October 23, 1934.)

      Paul Windels, Corporation Counsel (Henry J. Shields and Rollin H. Reid of counsel), for appellant.

      Nathan A. Goldenthal and Max Bernstein for respondent.
   Per Curiam.

The action is for wages and salary The complaint in four causes of action alleges that services were rendered by plaintiff as laborer from September 15 to September 27, 1930; as junior topographical draughtsman from December 9 to December 30,1930; as emergency automobile engineman from January 2 to January 20, 1931; as motor grader operator from January 26 to March 18, 1931. The defendant city of New York contends that plaintiff should be denied a recovery upon the ground that he was appointed in the civil service in violation of law. We find it unnecessary to pass upon the validity of that contention. Plaintiff testified that he rendered no service except as a confidential representative of the head of a municipal department. Neither the' character nor the extent of such service is shown by the record. There is a failure of proof of each of the alleged causes of action. It was error to deny the motion for dismissal of the complaint made at the close of the case.

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

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

Judgments reversed, etc.


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    The People of the State of New York, Appellant, v. Karl Schwartz, Respondent.
    (Submitted October 22, 1934;
    decided October 26, 1934.)

      Edward L. Robertson, Corporation Counsel, for appellant.

      Daniel F. Mathews for respondent.
   Pound, Ch. J.

A deputy sheriff is charged with parking a vehicle between seven a. m. and six p. m. in front of the court house in the city of Syracuse within the congested district for a longer period than forty-five minutes in violation of a traffic ordinance of the city. His defense is that he used the car on official business and that no other parking facilities were afforded for the vehicle. Unless some divinity doth hedge a deputy sheriff, this can be no defense. The county can provide parking space to keep the cars of the deputy sheriffs off the street. Until then deputy sheriffs are like common folks in this respect. Defendant was a civil deputy, not on police duty. No emergency excused him. He parked his car on the street for his personal convenience and was subject, like others, to the terms of the ordinance.

The judgment of the County Court should be reversed and that of the Court of Special Sessions affirmed.

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

Judgment accordingly.


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    In the Matter of Roy V. Peel, Individually and as Chairman of the City Fusion Party, et al., Appellants and Respondents, against S. Howard Cohen et al., Constituting the Board of Elections of the City of New York, et al., Respondents, and Harold Goldman et al., Respondents and Appellants.
    (Argued October 31, 1934;
    decided October 31, 1934.)

      Walter M. Weis for petitioners, appellants and respondents.

      Albert S. Bard and Samuel D. S?noleff for William J. Schieffelin, as chairman of the Citizens Union of the City of New York, intervener.

      Edward Weinfeld, Harry Malter and Martin M. Goldman for Alex Kraut, respondent and appellant.

      Samuel Falk and Nathan E. Percy for Harold Goldman, respondent and appellant.

      Joseph P. Brennan, Jr., for S. Philip Cohen, respondent and appellant.
   Pound, Ch. J.

The City Fusion party is an independent party, not a legally recognized statewide political party. It is not a political organization polling a sufficient number of votes for Governor to enable it to nominate its candidates by party conventions. It may make independent nominations by petition for public officers to be voted for at an election, either for State officers or for any lesser political unit of the State, and may select a name and emblem for the independent body thus making the nominations.

It is required of signers of petitions for independent nominations that they shall be qualified voters of the political unit for which a nomination for public office is made and that they intend to support at the ensuing election the persons nominated by them. No requirement that such subscribers or the candidates thus norninoted shall be in accord with the principles of the independent party is found in the statute. No such requirement exists as to party nominations of candidates. Nominees, particularly judicial nominees, of one regular political party, are, not infrequently, indorsed by an opposing party and such candidates are thereby supposed to achieve merit, although they may be regularly enrolled members of another party.

The City Fusion party nominated certain candidates by petition for the New York city election of 1933. It met with a considerable measure, of success, but as it had no candidate for Governor it did not become a regular party ” within the meaning of the Election Law (Cons. Laws, ch. 17). Nevertheless it has endeavored to make itself one, de facto if not de jure. Again in 1934 it was obliged to resort to the independent nominating petition method in order to place its candidates in nomination for political offices to be voted for. In so doing it selected a name and an emblem, the name, City Fusion party, the emblem, the four-leafed clover. The party leaders formed a permanent organization which purports to control the use of the independent party name and emblem and to forbid its.use by those whose candidacy it does not approve. Notwithstanding, petitions have been filed under the Fusion name and emblem (a) to nominate candidates where the Fusion organization has nominated approved candidates, (b) to nominate candidates where the Fusion organization presents no candidates.

The question here arises as to the right of petitioners to use the Fusion name and emblem to nominate candidates against the wishes and with the disapproval of this Fusion central organization.

The objection to such nominations is stated by Cullen, Ch. J., dissenting in Matter of O’Brien (206 N. Y. 694, 701). He says: Of course [nominating petitioners], as electors residing in the district and constituting the requisite number, they had the right to make a nomination on their own behalf, but not on behalf of others (that is, on behalf of others mating an independent party-nomination under the same name and emblem). Chief Judge Cullen would modify the orders of the lower courts by directing the election officers not to certify the name or emblem selected by the subscribers to the so-called interloping petitions, but to require such subscribers to select and choose another name and emblem for themselves, or allow such selection to be made for them. This would be, at least, an unfortunate result, tending to complicate the official ballot, if strictly applied.

The views of the eminent jurist, as fully and carefully expressed, are entitled to great respect, but it remains the law, as laid down by the majority of the court, that the required number of voters mating a nomination for the office may adopt a name and emblem which other voters have adopted in order to nominate candidates for other offices without thereby adopting for themselves the general declaration of principles of such independent party or nominating a candidate in sympathy therewith. (Matter of Trosk v. Cohen, 262 N. Y. 430; Matter of Straus, 265 N. Y. 600.)

The ruling of the executive committee is to control in the case of conflicting nominations (Matter of Marcus v. Cohen, 262 N. Y. 444), otherwise the vigilant interloper might deprive the authorized candidate of his nomination by filing his petition first. Some rule should govern in such cases and this rule seems rational, although to be strictly logical we should ignore the committee entirely.

To give the independent party committees the power to limit the use of their name and emblem, legislative authority is necessary. Argument in support of such legislation' would not lack force. Harmony of judicial decisions compels us to lay down a rule that, except where the independent party desires to nominate a candidate under its own party name and emblem, a nomination may be made under that name and emblem "without the consent of the independent party organization. The problem is now inherently legislative. For the sake of uniformity and certainty, the court should adhere to its prior decisions and not deal lightly with them after they have been deliberately adopted arid declared.

The orders should be modified in accordance with this opinion and as so modified affirmed.

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

Ordered accordingly.


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    In the Matter of James R. O’Rourke, Respondent, against S. Howard Cohen et al., Constituting the Board of Elections of the City of New York. Kenneth Cameron, Appellant.
    (Argued October 31, 1934;
    decided October 31, 1934.)

      Sanford H. Cohen and Charles H. Tuttle for appellant.

      Harrison Tweed, Wilber Stammler and George E. Diethelm for Winston Guest, amicus curiae.

      David Vorhaus and David J. Maxwell for Frederick F. Greenman, amicus curiœ.

      Samuel Davis, Edward S. Wachsman and Charles Marks for respondent.
   Per Curiam.

For twelve years the practice has been sanctioned by the Board of Elections of New York city that where a nominee for office came from a territorial district or division wholly within a county, not less than 1,500 names of qualified voters were necessary for nomination by independent petition. This was in accordance with the amendment to the Election Law (Cons. Laws, ch. 17, § 137, subd. 4) in 1922. This section reads: An independent nominating petition for candidates to be voted for by all the voters of the state must be signed by at least twelve thousand voters, of whom at least fifty shall reside in each county of the state, the counties of Fulton and Hamilton to be considered as one county. Such a petition for a village office must be signed by voters numbering five per centum of the number of voters at the last regular village election. Such a petition for the nomination of candidates for an office to be filled by the voters of any other political unit must be signed by voters numbering five per centum of the total number of votes cast for governor at the last gubernatorial election in such unit; but not more than three thousand signatures shall be required upon any such petition for any office to be filled in any political subdivision of the state, and not more than one thousand five hundred signatures upon any such petition for any office to be filled in any county or portion thereof. * * * ”

The last clause and not more than one thousand five hundred signatures upon any such petition for any office to be filled in any county or portion thereof ” applied to Assembly, Senatorial and Congressional districts which were wholly within a county and constituted a portion thereof. This section previously being chapter 800 of the Laws of 1913, in this particular read as follows: excepting that not more than three thousand electors shall be required to make an independent nomination in any political subdivision; and excepting that not more than one thousand five hundred electors shall be required to make an independent nomination for a borough or county office.” (§ 4.) Note that the one thousand five hundred electors only applied to borough or county offices and so it was held in Matter of Greenwald v. Boyle (179 App. Div. 672; affd., 221 N. Y. 688). That case related to a Municipal Court judge who was nominated by-independent petitions containing less than three thousand names. The court below called attention to the fact that it was strange to require three thousand names for an office elected by a portion of a borough and only one thousand five hundred names for offices elected by the entire county.

In this court, Hiscock, Ch. J., concurred in result only, and Pound, J., dissented in the following words: “ Dissenting on the ground that so far as section 122 of the Election Law requires more than 1,500 signatures for an independent nomination in a subdivision of a county or a borough, it is unreasonable and void.” (§ 122 is now § 137.) In the Appellate Division it was said: “ The argument that an independent nomination for Municipal Court justice would require as many signatures as an independent nomination for mayor of the whole city and twice as many as are required for a president of a borough or a district attorney of a county is one to address to the Legislature.” Evidently the Legislature took note of this decision, for in 1922 it amended the Election Law (Ch. 588) and gave us section 137, subdivision 4, as it now is.

It struck out the words for a borough or county office,” and substituted for any offi.ce to be filled in any county or portion thereof.” This change had a meaning' and it seems quite apparent that it referred to nominations for those offices where the geographical territory of the district was entirely within the county or formed a part thereof. Such are the Congressional, Senatorial and Assembly districts within the city of New York. Therefore, the prevailing practice has been legal and one thousand five hundred signatures of qualified voters is the requisite minimum.

It is said that the provision which required this minimum for the city and a three thousand mimimum for similar districts outside the city would be unconstitutional. The districts outside the city take in, many times, other counties, and in other particulars differ from the situation in big cities. Besides the whole matter is subject to regulation by the Legislature as long as there is nothing unreasonable in the measures provided or they do not deprive any one of the right to vote. (People ex rel. Woodruff v. Britt, 260 N. Y. 246; People v. Havnor, 149 N. Y. 195.)

For these reasons, the orders' below should be reversed and the motion denied, without costs.

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

Orders reversed, etc.


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    The People of the State of New York, Respondent, v. Samuel Rosenzweig, Appellant.
    (Argued October 10, 1934;
    decided November 20, 1934.)

      Robert H. Elder, Louis P. Goldberg, Charles Solomon and Otho S. Bowling for appellant.

      John J. Bennett, Jr., Attorney-General (David Asch and Herman L. Weisman of counsel), for respondent.
   Crane, J.

The defendant was tried for extortion, as defined by section 850 of the Penal Law. The indictment alleged that the Independent Wet Wash Laundry Co., Inc., was doing business in Kings county; that Louis Boslow and Max Golinsky were its agents and officers, and that the defendant was the business agent of the Laundry Drivers, Chauffeurs and Helpers Union, No. 810. The indictment further states that on or about March 19, 1932, the defendant obtained the sum of $5,000 from these officers of the Independent Wet Wash Laundry Co., Inc., by the wrongful use of fear and by threat to do an unlawful injury to the property of said corporation. The threat is alleged to be that unless Boslow and Golinsky should pay the money the defendant would “ unlawfully and maliciously to injure, annoy, harass and obstruct the said corporation in its said business and to prevent it from properly, freely and profitably carrying on the same, and from properly, freely and profitably making and performing contracts in connection therewith.”

The defendant was tried before an Extraordinary Trial Term of the Supreme Court in April, 1934, found guilty, and sentenced to Sing Sing Prison for an indeterminate sentence, minimum two years, maximum not more than five years. The defendant is now serving his sentence, as a certificate of reasonable doubt has not been granted.

As this court has no power to review the weight of evidence, we are confined to questions of law. Whether there be sufficient evidence to raise a question of fact to be passed upon by the jury is always a question of law, but we pass it in this case, as we may assume that the testimony for the People, if true, sustained the allegations of the charge.

The rulings of the trial judge, upon objections to the admission of testimony, present a question requiring serious attention. The Appellate Division probably ■ recognized the error, as it was of the opinion that, under section 542 of the Code of Criminal Procedure, it might be disregarded. That section reads: “After hearing the appeal, the court must give judgment, without regard to technical errors or defects or to exceptions which do not affect the substantial rights of the parties.” The error, in our opinion, was more than technical, and must have affected the jury in determining the issues in this case as it introduced before them the holding of another court upon the very issue in kind which they were to determine. To present our point of view it is necessary to refer briefly to the evidence and to the object which trial counsel had in mind.

Beginning with March 3, 1930, and thereafter up to March 4, 1932, the Laundry Drivers, Chauffeurs and Helpers Union, Local No. 810, had unionized five laundries in Brooklyn, namely, the Independent Wet Wash Laundry Co., Inc., the Primrose, the Great Wet Wash, the R. & S., and the Rugby Laundries. The Independent Laundry was the largest of these five and employed about sixty-five laundry drivers. The union had made a contract with each of these five laundries respecting. the compensation of drivers. The contract of March 3, 1930, contained this provision: “ Each driver shall be paid $23 a week and in addition thereto 15% of all income from wet wash brought in and delivered by such driver for the first 100 bundles, and 30% of all income from wet wash brought in and delivered by such driver in excess of such 100 bundles, and 15% of all income from flat work brought in and delivered by such driver, and 18% of all income from unit and hand finished work. No driver, solicitor or utility man now receiving above said scale shall suffer any reduction by reason of this agreement.”

These contracts, which were all alike, were for two years and, as 1932 approached, the defendant was told by Boslow and Golinsky, in behalf of the Independent Wet Wash Laundry Co., Inc., that the company could not pay twenty-three dollars; that business had so fallen off that such terms were impossible of performance. Rosenzweig said that it would cost money to take this provision out of the renewal contract. He demanded $25,000, and said that, if the twenty-three-dollar provision was not complied with, a strike would be called. To be exact, we shall quote the testimony as given by Boslow.

“ Q. What conversation did you and Rosenzweig have about the 1930 contract? A. I told him I could not pay the $23 a week.

Q. And what did he say to you? A. I cannot help it.

Q. What else did you say to him? A. I asked him what I am going to do; he said, If you pay the money I take off the $23.’

“ Q. Did he say if you pay the money? A. If you pay the money I take off the $23 and you pay the drivers on commission basis.”

(Golinsky): “ * * * Q. Go on and tell us what else was said? A. We were talking about the $25,000, and he said he is going to take off the $23 a week, and if we could not give him the $25,000 we got to pay to the drivers the $23 a week, and if not, we are going to have a strike.

“ Q. Then what did you say to him, or what did your partner say to him in your presence? A. Well, what we got to do in a thing like that is not to have a strike in my business, but make it up with him that we can not get a strike.

Q. What did you make up with him? A. To pay him.

Q. Did you agree to pay him certain money? A. Yes.”

Thereafter, $5,000 was deposited in escrow for a period of nine months to await the result of Rosenzweig’s efforts to modify the contract. Notes were given for the balance. When the 1932 contract was made, this $23 provision, above quoted, was ehminated, and the drivers placed upon a commission basis favorable to the employers. The evidence shows that the defendant later obtained bis $5,000 escrow deposit. The People also proved similar demands or threats made by the^defendant to the other laundries above named, and that, in compliance therewith, he had received money for the same purpose.

The 1932 contract expired in March of 1934, and the renewal for the next two years contained more onerous provisions than those in the 1930 contract, because the so-called $23 a week paragraph, above quoted, was included and changed to a $30 a week minimum for drivers.

It was the claim of the defendant that Boslow and Golinsky were made angry by this change and increase and were therefore prejudiced and biased against the defendant Bosenzweig, who was responsible therefor. As the defendant insisted upon the trial that he never received any of this money or made any of the threats, the defendant’s counsel went so far as to suggest that the witnesses for the prosecution were testifying falsely so as to ruin or remove or punish Bosenzweig, and that the whole theory of the People’s case was fictitious. With this in view the defendant’s counsel offered in evidence the contract of 1934 with all these laundries, some thirty-one in number by this time, which actually had nothing whatever to do with the present charge against the defendant. The purpose was to show a supposed motive or reason for these witnesses to testify falsely against the defendant — they had been hurt by the 1934 contract. The People had a perfect right to meet this insinuation or suggestion by showing that Boslow and Golinsky had no animus against the defendant from such a cause, for the reason that the cause did not exist. To do this the People introduced in evidence or brought out on examination of the defendant himself that the contract of 1934 had been declared by the Supreme Court unenforceable. If the contracts with all these laundries for 1934 were unenforceable, as unreasonable, unfair or improperly obtained, naturally the insinuation or suggestion that Boslow and Golinsky had hatred in their hearts against the defendant because of its harsh provisions, would be very much weakened.

Following up this order of proof, the People offered in evidence the judgment roll in the case of Burickson v. Kleen Laundry Service, Inc., the case tried before Mr. Justice Faber of the Supreme Court, holding one of the 1934 contracts illegal, wherein he had made the following decision:

Eighth. That the said instrument was extorted from the defendants by plaintiff and others acting in behalf of plaintiff, by duress and coercion in so threatening the ruin of the defendant’s business, in consequence of which and in fear and apprehension thereof, the defendant, Kleen Laundry Service, Inc., signed and executed the instrument.
“ Ninth. That the Union agreement is harsh, unfair, unconscionable and impossible of performance, and so detrimental- to the corporate defendant that to perform it would mean great loss to the defendant * corporation and ruination of its business.”

Burickson, the plaintiff in this suit, was president of the defendant’s union. This was all a collateral matter bearing upon the bias of Golinsky and Boslow. The contract with the Kleen Laundry Service, Inc., was not one of those included in the People’s charge. It had nothing to do with this case other than we have said. These findings were read to the jury.

The Kleen Laundry Service, Inc., contract, however, was similar to the contract with the Independent Wet Wash Laundry Co., Inc., and presumably was negotiated through the defendant and the same union officers. Anyhow, the jury had before it the fact that in similar contracts made with the defendant’s union, and presumably by him, as he was the manager, the courts had found that the union or its officers used duress, coercion, extortion and threats. Little likelihood is there that, under-these circumstances, with this evidence before them, the jury would assume to find a contrary conclusion, when dealing with the 1932 contract in question under the indictment, similar in nature, where the same issue was raised. The fact that the judgment of the court was in a civil action, while their judgment was called for in a criminal action, would make no difference to a jury, whatever the difference might be to the lawyer. Criminal acts must be proved beyond a reasonable doubt; the same charge in a civil action need only be proved by a fair preponderance of evidence. But can we expect our jurymen, even if they understand it, to bear this difference in mind, when a judge has found threats and coercion, and they are asked later to pass their judgment upon a charge that money had been extorted by threats and coercion by the same parties, to procure like or similar contracts?

We think the People, in view of the evidence introduced by the defendant regarding the 1934 contract, were justified in showing that, in a Supreme Court action, those contracts had been rendered null and void or set aside; but we think that it was going entirely too far to show that the judge had made findings in a decision showing threats and coercion by the defendant’s union in procuring those contracts. The evil of it is quite apparent when we realize that the circumstances in procuring the Kleen contract for 1934 might have been entirely different from those under which the other thirty contracts or the 1932 contract were obtained, and the evil is aggravated when we are informed that the Kleen judgment and findings offered in evidence were later reversed by the Appellate Division in Burickson v. Kleen Laundry Service, Inc. (242 App. Div. 701).

Other errors have been called to our attention which we shall not now discuss or pass upon. We recognize that this offense charged against the defendant was serious not only to him but very serious to the community in which he lived and did business. The People are entitled to as much protection as the defendant, and under conditions existing in Brooklyn relating to these wet wash laundries, calling for Extraordinary Term of the Supreme Court to be appointed and a special grand jury to deal with the matter, we should be very slow in reversing a verdict of guilty. Prosecution and conviction are the one means, if not the only means, the law has to suppress and wipe out the nefarious practices evidenced by this record, and yet the defendant, whoever he may be, when faced with such a criminal charge, is entitled to have the rules of evidence and the conduct of the trial proceed against him in the same manner as a defendant charged with any other crime. He certainly must not be convicted by evidence which the law does not recognize and which, as to the charge against him, has no relevancy to his case. He should not be convicted because it appears that subsequently he may have committed acts of impropriety calling for judgment and condemnation in the civil courts but in no way touching or bearing upon the criminal charge.for which he is being tried. We agree with the Appellate Division that the admission of this evidence was error, but we think it of so substantial a nature that the conviction based upon it must be set aside.

The judgments should be reversed, and a new trial ordered.

Lehman, Crouch and Loughran, JJ., concur; Pound, Ch. J., O’Brien and Hubbs, JJ.; dissent.

Judgments reversed, etc.


text:
    Murray Realty Company, Respondent, v. Regal Shoe Company, Appellant.
    (Argued October 24, 1934;
    decided November 20, 1934.)

      Edward Schoeneck for appellant.

      Henry R. Follett for respondent.
   Pound, Ch. J.

Plaintiff leased real property to Truly Warner, Inc., which assigned the lease to Truly Warner Co., Inc. A portion of the premises has been sublet by the first lessee to defendant-appellant. The assigneelessee of the lease on July 16, 1933, and during the term of the lease, was adjudicated a voluntary bankrupt. This action is for rent for the months of August-November prior to the disaffirmance of the lease by the receiver and trustee in bankruptcy. The lease contains certain covenants by the lessee as part consideration for the letting. After them follows these words: “ that an adjudication that the lessee is bankrupt shall ipso facto end and terminate this lease, and any rights thereunder.” The lease contains a further provision which reads as follows: “ The lessor at its option may rescind and terminate this agreement upon * * * the breach of any of its conditions, or any of the covenants or agreements of said lessee.”

The Special Term held that a conditional limitation was created by the bankruptcy clause above cited and that the bankruptcy ipso facto, i. e., by the mere fact itself, terminated the lease.

The Appellate Division held that the clause meant only that an adjudication that the lessee is bankrupt shall of itself be sufficient cause for the lessor to exercise an option to terminate the lease; that the lessee could not take advantage of the clause to terminate the lease.

The question of proper construction is not free from doubt. L. Hand, Circuit Judge, in Matter of Outfitters' Operating Realty Co. (69 Fed. Rep. [2d] 90, 91), in discussing the words of a lease which provided: “it is agreed as a further condition of this lease that the filing of any petition in bankruptcy * * * by * * * the Lessee shall be deemed to constitute a breach of this lease, and thereupon, ipso facto, * * * this lease shall become and be terminated,” says, “ the mere filing of a petition in bankruptcy puts an end to the lease; not at the lessor’s option, but unconditionally.”

In Schneider v. Springmann (25 Fed. Rep. [2d] 255, 256) one paragraph of the lease says: “ Should the lessee become bankrupt * * * this lease shall become immediately forfeited.” It also says: “this lease at the option of the lessor, shall be void in case of any violation of any agreement or covenant herein contained.” The lessee contended that because he had become bankrupt the lease was ended. The court held that the words “ shall become immediately forfeited ” means that it was forfeited only at the election of the lessor, and cited authorities to the effect that such conditions are dominately for the benefit of the landlord. The reasoning of this case concludes with these words: Whatever might be thought of involuntary bankruptcy or liquidation, it is clear that a voluntary bankruptcy would satisfy this condition and that such bankruptcy would be at the wish of the lessee. It cannot be assumed that the lessor would have acquiesced in the acquiring by the lessee of a right by which the lessee could, at his own election, defeat all further obligations.”

Cogent as such reasoning may be, bankruptcy of the tenant may be made a special limitation upon the term of a lease. The question must be determined by the language of the lease. As Lehman, J., said in Janes v. Paddell (67 Misc. Rep. 420, 422): “ It cannot be disputed that the parties have a right to provide either that the lease shall terminate at the happening of an event or that the event shall give the landlord the option of terminating it. The intent of the parties can be determined only from the language of the lease.”

It is easy for the draughtsman of a lease to provide that an adjudication in voluntary bankruptcy shall terminate the lease only if the landlord shall so elect. That is not the language of the lease before us. By a process of judicial construction plain words — “ ipso facto end and terminate ” — are made to read as if they were a lessor’s covenant merely. We are constrained to accept the construction of the trial justice and say that the clause under consideration is a conditional limitation by reason of which the lease expired upon an adjudication that the lessee is bankrupt. Bankruptcy constitues a breach of the lease. It thereupon ends and terminates, ipso facto.

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

Lehman, O’Brien and Hubbs, JJ., concur; Crane, Crouch and Loughran, JJ., dissent.

Judgment accordingly.


author: O’Brien, J. Crane, J.

text:
    James W. Gerard, Respondent, v. Bank of New York and Trust Company, Appellant.

      (Argued October 10, 1934;
    decided November 20, 1934.)

      George W. Martin and John L. Merrill, Jr., for appellant.

      Frank C. Laughlin, Stewart W. Bowers and Veronica T. Hyland for respondent.
   O’Brien, J.

In the year 1874 plaintiff’s parents deposited with defendant’s predecessor The New York Life Insurance and Trust Company the sum of $3,000. The instrument by which this sum was acknowledged to have been received is denominated on its face as “ Trust of Accumulation ” and the conditions therein stated are: “ That the said company shall and will accumulate the said principal sum, by allowing compound interest thereon, at the rate of five (5%) per cent semi-annually; and the whole sum, principal and interest, so accumulated, to be paid to the said Trustees or the survivors of them or their executors, administrators or assigns on demand.” During the month of July, 1922, correspondence and oral conversations occurred between plaintiff and officers and attorneys of defendant bearing upon the liability of defendant to continue this deposit at the same rate of interest, and on July 25, 1922, defendant’s attorneys addressed a communication to plaintiff which ended with these words: “As stated in the letter from the Trust Company to you, dated July 10, 1922, the rate of interest after August 1, 1922 will be reduced to 3%. If this is not acceptable to you the Trust Company will be prepared, of course, to pay over the amount of the deposit to the proper person forthwith, or, if you prefer, we will be glad to cooperate with you in any way you may suggest to obtain a construction in any appropriate court as to the rights and obligations of the interested parties under this certificate of deposit or trust for accumulation.” No doubt defendant had the same right as the depositor to end the relationship at that or any other time by paying back the amount of the deposit with interest at the agreed rate up to the date of an actual severance of such relationship. Neither at that time nor any time, however, prior to June 16, 1926, did defendant terminate the mutual relationship of debtor and creditor. Its letter of July 25, 1922, certainly has no such effect. In that communication defendant went no further than alternatively to express a willingness to be prepared to make payment forthwith in the event of plaintiff’s election or to continue the deposit pending an adjudication of legal rights. The Appellate Division correctly describes the effect of that offer as “an invitation to further negotiations.” (240 App. Div. 531, 536.)

After this disagreement between the parties, the account remained with defendant until June 16, 1926, when plaintiff made demand for the deposit with interest at five per cent up to that date. Defendant on the same day delivered to plaintiff a check for the sum of $36,248.43 which includes the principal with interest at five per cent up to August 1, 1922, and interest at three per cent after that date. Plaintiff accepted the check and surrendered to the representative of the trust company the original instrument with the following indorsement: “ I admit the receipt of $36,248.43 to be applied on account of the indebtedness covered by within note. I do not admit that this constitutes payment in full of the same.”

This action is brought to recover the sum of $2,861.16 which represents the difference in interest at five per cent and at three per cent from August 1, 1922, to June 16, 1926. The complaint alleges that plaintiff is the owner and holder of a certain promissory note ” called a Trust of Accumulation and sets forth the instrument in full and throughout the complaint reference is made to it as a note.” Plaintiff’s receipt indorsed on the instrument describes it as the “ within note.” In his testimony plaintiff speaks of it as the note * * * or the instrument, or whatever you choose to call it,” and on June 16, 1926, in making demand upon the trust company he said: “ If it is not a trust, if it is a negotiable instrument or a demand note, then I ask for payment.” While the instrument is assignable, it lacks some of the formal, verbal elements of negotiability, but the parties have treated it, both by pleading and by description at the trial, as a promissory note, payable on demand and estabhshing the relation of debtor and creditor in the nature of a certificate of deposit. On the face of the instrument, partially obscured by the revenue stamp, are printed the words: For all deposits of $1000 and over three days notice will be required previous to being withdrawn.” Such an instrument payable to a named individual or his assigns on demand, even when the words “ payable to order or bearer ” are omitted, may be treated as a negotiable instrument where it is apparent from the whole nature of the instrument and the language employed that such was intended to be its character. (Zander v. New York Security & Trust Co., 178 N. Y. 208, 211; Nelson v. Citizens’ Bank, 191 App. Div. 19; affd., on opinion below, 232 N. Y. 581.) As in the Zander case, this deposit with accrued interest is payable to the depositor’s assigns,” but the words, which is assignable only on the books of the company,” do not appear in the instrument before us. This court expressed the opinion that, except for the presence of those words, the certificate in the Zander Case (supra) might be claimed, not without force, to be intended to be negotiable. The statute under which defendant’s predecessor was incorporated (Laws 1830, ch. 75, § 16) provides that certificates of stock and of moneys received in trust issued by it shall be assignable on the books of the corporation, but this certificate does not so provide nor is any defense of ultra vires pleaded. The complaint alleges that plaintiff is the owner and holder of this promissory note and concededly he was the rightful owner and holder of it until he surrendered it to defendant. Defendant under its act of incorporation was authorized to receive deposits and to issue certificates of deposit. An instrument such as the subject of this litigation may reasonably be regarded as a negotiable instrument (Magee on Banks and Banking [3d ed.], § 222; Morse on Banks and Banking [4th ed.], § 298), and when the parties have treated it as such and proceeded to trial upon that theory, courts ought not to indulge in the assumption that it is anything other than a negotiable demand note. The parties to this contract have construed it for themselves and the courts. Although this instrument was executed prior to the enactment of the Negotiable Instruments Law (§ 200, subd. 5) by the rule at common law the surrender of the note by the payee to the maker operates as a discharge. (Jaffray v. Davis, 124 N. Y. 164, 170.)

The judgment of the Appellate Division should be reversed and that of the Trial Term affirmed, with costs to the appellant in this court and in the Appellate Division.

Crane, J.

(concurring). With the result reached by Judge O’Brien I am in accord but for an additional reason. The instrument relied on reads as follows:

Trust of Accumulation
“ No. 2289 “ $3,000.
The New York Life Insurance and Trust Company acknowledge to have received of James W. Gerard and Jenny A. Gerard, trustees for James W. Gerard, No. 3, the principal sum of Three thousand Dollars upon the following Trust: That the said Company shall and will accumulate the said principal sum, by allowing Compound Interest thereon, at the rate of five (5%) per cent, semiannually; and the whole sum, principal and interest, so accumulated, to be paid to the said Trustees or the Survivors of them or their executors, administrators or assigns on demand.
“ In Witness Whereof, the said Company have caused this declaration to be attested in their behalf by their President and Secretary, this eighteenth day of June in the year of our Lord one thousand eight hundred and seventy-four.
“ (Signed) HENRY PARISH,
“President.
(Signed) William Meikleham,
“Asst. Secretary.
j U. S. Internal Revenue J j Stamp $5.00 attached f
“ For all deposits of $1,000 and over three days’ notice will be required previous to being withdrawn.”

There is nothing in this writing to state how long the trust company agrees to hold the money nor for how long a time the trustees will leave it on deposit. They may take it out at any time for it is due on demand. There is no agreement, however, that the trust company shall hold it for any specific time or at the pleasure of the trustees. The trust company had the same right as the trustees to end the relationship at any time by paying back the money. No bank or trust company in the absence of a specific agreement is obliged to hold any deposit for a specific length of time. It may end relationships with its depositors or those for whom it is holding money upon proper notice and within a reasonable time after a demand to close the account. Magee on Banks and Banking ([3d ed.] § 170, p. 271) says: “ The relationship existing between the bank and the depositor may at any time, by either party at option, be dissolved. This rule holds unless the bank has accepted a deposit and agreed with the depositor to retain the same for a specific time and pay interest thereon for the use and retention of said deposit; in such a case, the deposit is received in the nature of a special contract, and is binding upon the bank and the depositor.” To the same effect is 7 Corpus Juris (628, § 303); Morse on Banks and Banking ([6th ed.] § 178, pp. 498, 499); Chicago M. & F. Ins. Co. v. Stanford (28 Ill. 168); Reid v. Charlotte Nat. Bank (159 N. C. 99, 101); Elliott v. Capital City State Bank (128 Iowa, 275). A demand note is due forthwith. (Wheeler v. Warner, 47 N. Y; 519.) A certificate of deposit is also due upon actual demand. (Cattle v. Marine Bank, 166 N. Y. 53.) There is nothing, however, in either of such instruments to prevent payment before demand where the transaction remains between the original parties.

The defendant through its attorneys notified the plaintiff, stating that the defendant would not pay more than three per cent interest after August 2, 1922, and that if this were not satisfactory the plaintiff should draw out the deposit, which the defendant was ready to pay. Payment is always made at a bank, and after this notice, if the plaintiff left the deposit there, he acquiesced in the payment of three per cent instead of five. He had been notified that the bank was ready to pay the deposit and would not hold it any longer at five per cent. He could not force the money upon the trust company in the absence of any written agreement to hold it for a specific length of time.

For these reasons I agree with the result, that the plaintiff has been fully paid, and that the complaint should be dismissed.

Lehman, Hubbs, Crouch and Loughran, JJ., concur with O’Brien, J.; Crane, J., concurs in separate opinion; Pound, Ch. J., dissents.

Judgment accordingly.


text:
    Milton M. Senz, Inc., Respondent, v. Grace E. Hammer et al., Appellants.
    (Argued October 9, 1934;
    decided November 20, 1934.)

      M. Edward Kelly for appellants.

      Samuel R. Wachtell for respondent.
   Per Curiam.

The provisions of the lease are not free from obscurity but the inference must fairly be drawn that the parties contemplated the deposit as security for the performance of all the covenants and that the landlord’s agreement to repay it after the expiration of the lease was conditioned upon the tenant’s full performance. The tenant’s default renders applicable the rule announced in International Publications, Inc., v. Matchabelli (260 N. Y. 451) and Hand v. Rifkin (263 N. Y. 416).

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

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

Judgment accordingly.