text:
    Minnie Wachtel, Respondent, v. The Equitable Life Assurance Society of the United States et al., Appellants.
    (Submitted April 15, 1935;
    decided April 23, 1935.)
   Per Curiam.

The complaint alleged a cause of action accruing only upon service of proof that the death of the assured resulted from accidental causes. The evidence showed in the opinion of the majority of the court that no such proof had been served. The judgment of dismissal constitutes a bar to any recovery upon the cause of action alleged. It does not constitute a bar to recovery upon a possible cause of action which may arise after the judgment of dismissal upon service of proof required by the policies.

Motion denied, with ten dollars costs and necessary printing disbursements.


source: Caselaw Access Project

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

license: Public Domain

text:
    Gustave C. Darweger, Respondent, v. Charles B. Staats et al., Appellants.

      (Argued March 14, 1935;
    decided April 26, 1935.)

      Harold J. Hinman and J. Vanderbilt Straub for appellants.

      John J. Bennett, Jr., Attorney-General (Henry Epstein of counsel), for the State of New York.

      Harold H. Straus and Stanley Osserman for Dress Code Authority et al., amici curiae.

      Edward J. Halter for Third Regional Board for the Brewing Industry, amicus curice.

      Samuel H. Pearis for respondent.

      Thomas Francis Woods, amicus curiae.

   Crane, Ch. J.

The National Industrial Recovery Act, passed June 16, 1933 (48 U. S. Stat. 195), declared a national emergency in these words: “ A national emergency productive of widespread unemployment and disorganization of industry, which burdens interstate and foreign commerce, affects the public welfare, and undermines the standards of living of the American people, is hereby declared to exist. It is hereby declared to be the policy of Congress to remove obstructions to the free flow of interstate and foreign commerce which tend to diminish the amount thereof; and to provide for the general welfare by promoting the organization of industry for the purpose of cooperative action among trade groups, to induce and maintain united action of labor and management under adequate governmental sanctions and supervision, to eliminate unfair competitive practices, to promote the fullest possible utilization of the present productive capacity of industries, to avoid undue restriction of production (except as may be temporarily required), to increase the consumption of industrial and agricultural products by increasing purchasing power, to reduce and reheve unemployment, to improve standards of labor, and otherwise to rehabilitate industry and to conserve natural resources.”

As a step in the direction of effectuating this National policy, section 3 (NIRA) provides for codes of fair competition:

“ (a) Upon the application to the President by one or more trade or industrial associations or groups, the President may approve a code or codes of fair competition for the trade or industry or subdivision thereof, represented by the applicant or applicants, if the President finds (1) that such associations or groups impose no inequitable restrictions on admission to membership therein and are truly representative of such trades or industries or subdivisions thereof, and (2) that such code or codes are not designed to promote monopolies or to eliminate or oppress small enterprises and will not operate to discriminate against them, and will tend to effectuate the policy of this title; * * *.
(b) After the President shall have approved any such code, the provisions of such code shall be the standards of fair competition for such trade or industry or subdivision thereof. * * * * * j|; # * *
“ (d) Upon his own motion, * * * the President, * * * may prescribe and approve a code of fair competition for such trade or industry * * *.”

By section 10, subdivision (b), The President may from time to time cancel or modify any order, approval, license, rule, or regulation issued under this title; and each agreement, code of fair competition, or license approved, prescribed, or issued under this title shall contain an express provision to that effect.”

Attention is directed here to the option given to the President as well as to various trades. All industry is not required to be codified. First, it is optional with the business or enterprise; secondly, it may be forced by the President at his option; and further yet, after a code has been adopted and approved, it may be modified by the President as to any of its regulations in the future. The whole matter rests upon the approval of the President, based upon findings made in accordance with the law.

Under these provisions of the National Industrial Recovery Act the Retail Solid Fuel Industry prepared its code, which was approved óE'Fébmáfy 14, 1934. Sectian 1 of article III established two agencies: (a) The National Code Authority; (b) the Divisional Code Authorities. Pursuant to subdivision 9 of this article, the Divisional Code Authority, Division No. 3, was established and was stated to embrace the State of New York, with the exception of the counties of Bronx, New York, Kings, Queens, Richmond, Nassau and Suffolk. Here again we find in this Code that both the National Code Authority, which was duly established, and the Divisional Code Authority have been given certain discretionary powers. Under article Y, dealing with marketing practices, we find these provisions in subdivision 4:

Whenever, upon complaint or upon its own initiative without complaint, the National Code Authority is of the opinion that an emergency exists within the industry or within any retail trade area thereof, in that destructive price-cutting is being engaged in to such an extent as to render ineffectual or seriously endanger the effectuation of the purposes of this Code or of the Act, the National Code Authority shall forthwith certify such conclusion to the Divisional Code Authorities.
“ (a) Upon receipt of such notice each Divisional Code Authority, after a full hearing upon notice to all known interested parties within the respective trade areas, shall determine whether or not such an emergency exists within the Division or within any one or more trade areas thereof, and in the event it appears necessary to declare such an emergency to exist, thereupon to open the hearing for presentation of all matters which may have a bearing upon costs to be ascertained and determined as provided in subdivisions (b) and (c) hereof.
(b) In any retail trade area of any Division where such emergency has been declared to exist the Divisional Code Authority shall forthwith ascertain to the extent reasonably practicable for such retail trade area the cost to members of the industry of their products and services on the basis of actual cost sheets of members of the industry within such retail trade area and all other available data, for each ldnd, grade, size and blend of solid fuel and each classification of customers within such retail trade area.
“ (c) On the basis of costs ascertained as above, the lowest cost (which shall include an allowance for all items of actual cost, but exclusive of any elements of profit or return on capital) which shall still insure within such retail trade area the maintenance of rates of pay, hours of labor, fair competition, and other purposes of this Code and of the Act, shall be determined by the Divisional Code Authority, such figure to be the lowest figure reasonably compatible with the maintenance of the purposes herein set forth.”

Reviewing these provisions we find the National Recovery Act declaring an emergency, but requiring no particular industry to be codified, leaving it entirely to the option of the industry or the President. When it comes to price-fixing we again find that an option has been left, not only to the National Code Authority in the Solid Fuel Industry, but also to the Divisional Code Authorities. First, the National Code Authority must find that an emergency exists; second, upon certifying the fact to the Divisional Code Authority, the latter shall again determine whether or not an emergency exists requiring the fixing of prices. But this is not all. The Administrator, by section 2 of article III, may appoint one non-voting member of the National Code Authority, who may also sit with the Divisional Code Authority at the request of the Administrator. Paragraph (d) of subdivision 4 of article V gives this administrative appointee further discretion. It reads: Such determinations of cost shall promptly be approved or disapproved in writing by the Administrative appointee on the Divisional Code Authority, and upon approval shall become effective, subject to the right of the Administrator to approve, disapprove or modify the same. All such determinations of cost by the Divisional Code Authorities shall forthwith be filed with the National Code Authority and the Administrator.”

The Divisional Code Authority, Division No. 3, on June 29, 1934, after a hearing and taking of testimony, promulgated its Order No. 3E which fixed a floor-level price for the sale of coal in certain counties embraced in said Division, including the county of Broome. Said order in part reads as follows:

“It is hereby resolved, That in the trade area of Broome, Cortland, Chenango, Otsego, Delaware and Sullivan Counties, also the Counties of Chemung, Tioga, Tompkins, Schuyler, the Townships of South Waverly, Sayre and Athens in Pennsylvania, and Southern Seneca County including Townships of Romulus, Ovid, Lodi, Covert and Varick, the lowest figure of cost covering the cost of products and the cost of services on the various domestic sizes of anthracite coal including Pea Coal shall be the Old Line Company’s circular price plus the net ton freight rate to destination plus $3.15 per ton service charge; and on steam sizes of anthracite shall be the Old Line Company’s circular price plus net ton freight to destination plus $2.75 per ton service charge; and on Coke shall be the Producing Company’s circular price plus the net ton freight to destination plus $3.15 per ton service charge; and on all grades, kinds and sizes of bituminous coal shall be the bituminous code mine price plus freight to destination plus $2.75 per ton service charge.”

That by the said order the said floor-level price was computed as follows:

“ (a) On domestic anthracite coal, including Pea coal, the Old Line Company’s circular price, plus net ton freight to destination, plus $3.15 per ton service charge.
“ (b) On steam sizes of anthracite, the Old Line Company’s circular price, plus net ton freight to destination, plus $2.75 per ton service charge.
(c) On bituminous coal, the bituminous code mine price, plus freight to destination, plus $2.75 per ton service charge.”

Section 5 of article V of the Code reads as follows: “ The selling or offering for sale of any of the products or services of this industry for which the costs may have been determined as provided in Section 4 of this Article V, at such prices or upon such terms or conditions of sale that the buyer shall pay less therefor than such determined cost, shall be deemed an unfair competitive practice in violation of the requirements of this code.”

By section 10(a) of the National Industrial Recovery Act, any violation of the rules and regulations prescribed by the President shall be punishable by fine of not to exceed $500, or by imprisonment for not to exceed six months, or both.

The_plaintiff in this case is a retailer of solid fuel and has his yard and principal place of business in the city of Binghamton, New York. He has been threatened by the defendants, “ The Divisional Code Authority, Division No. 3, for the Retail Solid Fuel Industry ” with prosecution and imprisonment for failure to comply with the price regulations as fixed by Order No. 3E.

It is not claimed that any of the provisions of law heretofore referred to, the National Industrial Recovery Act or the Retail Solid Fuel Industry Code, have any application to bim or to his business. It is conceded that his business is purely intrastate and these measures, above quoted, have application solely to interstate business. The Solicitor-General of the State, upon the argument and also in his brief, states that the act of Congress and the Codes thereunder relate solely to interstate commOTf,!i How then comes it that this little retail business, intrastate and carried on by the plaintiff in Binghi is thus threatened with prosecution for the violate law? The law is the State law, chapter 781 of the Laws of 1933, sometimes referred to as the State Recovery Act. As its constitutionality- is challenged, we quote in full the pertinent provisions:

Section 1. Legislative finding; statement of policy. A national emergency productive of widespread unemployment and disorganization of industry, which likewise prevails in the state of New York, which burdens intrastate, interstate and foreign commerce, affects the public welfare, and undermines the standards of living of the American people and of the people of the state of New York, is hereby declared to exist. The existence in this state of such present acute economic emergency, and the effects and certain causes thereof as declared in section one of title one of the national industrial recovery act, enacted by the congress of the United States, effective June sixteenth, nineteen hundred thirty-three, are hereby recognized; and it is hereby declared that said emergency, the causes and effects thereof, as so declared, relate as well to commerce in this state wholly intrastate in character as to interstate and foreign commerce and transactions affecting interstate and foreign commerce carried on in this state. It is hereby declared to be the policy of this state to cooperate in the furtherance of the objects and purposes declared in said act of the congress, and each and every provision of this act shall be construed in accordance with the policy so declared, and to make uniform the standards of fair competition prevailing in intrastate commerce and industry with those of interstate commerce required by the provisions of the said national industrial recovery act which are applicable in interstate commerce in the state of New York.
“ § 2. Filing of codes and agreements. 1. The secretary of state is hereby authorized to receive for filing and shall file in the office of the department of state a copy of each code, agreement, license, rule or regulation in effect pursuant to such act of the congress, pertaining, affecting or in any way relating to the conduct of business in the state and duly certified as a true copy of such document or documents by the officials in charge of the administration of the provisions of title one of the said national industrial recovery act or by their duly authorized agents. Upon such filing of a copy so certified of a code of fair competition for any trade, industry or subdivision thereof, as approved by the president of the United States, or of any agreement or license or of any rule or regulation provided for under title one of the said national industrial recovery act, such code, agreement, license, rule or regulation shall be the standard of fair competition for such trade or industry or subdivision thereof in the state as to transactions intrastate in character, and any violation of any provision of such code, agreement, license, rule or regulation shall be a misdemeanor, and upon conviction thereof, the person convicted shall be fined not more than five hundred dollars for each offense, and for each day such violation continues a separate offense subject to the fine herein prescribed shall be deemed to have been committed.”

As is evident, section 1 of this law merely expresses the same policy as that of the National Recovery Act. Section 2 makes the filing of any code approved by the President the law of this State, a violation of which is a misdemeanor.

At this point certain considerations are necessary in passing upon the one question — whether the Legislature has passed any law regarding unfair competition, or has declared any emergency in the coal industry which requires legislation, or whether it has passed this legislative function over to other bodies. Considering that the National Recovery Act and this Fuel Code have no application to the State of New York, dealing solely with interstate commerce, they have no more effect here for intrastate commerce than would a law of Connecticut, Massachusetts or California. They are made to operate here by the mere declaration of the Legislature that, by the filing in the office of the Secretary of State of the Code, it shall become the law of the State of New York relating to unfair competition. Would it be constitutional for our Legislature to adopt a law of Massachusetts or of Connecticut or of California in any such way?

Section 1 merely declares a policy, merely says an emergency exists in industry and in employment, but how that emergency shall be met or what measures shall be taken in the wisdom of our Legislature to meet the emergency is nowhere stated. There is no statement or finding by the Legislature that an emergency exists in the coal industry or that it is necessary or in the judgment of the Legislature requisite that a code of unfair practices be adopted by that industry. The Legislature has left this determination entirely to the President of the United States or to the National Code Authority. But more than this, it has left to an outside body — outside the State of New York, a National Code Authority — to determine that even an emergency exists. The necessity of price-fixing in the coal industry depends upon an emergency declared by the National Code Authority. This is not enough; the price regulation must be approved by the Federal Administrator.

Stripped of all its verbiage, and narrowing these provisions down to the real authority, we find that the Legislature of the State of New York has turned over to the National Administrator the question of determining whether there shall be price-fixing in New York State of coal and what it shall be. The Legislature has left too many things to be determined by other bodies to make this law constitutional.

The State Legislature cannot leave to Congress to determine that an emergency exists in intrastate business in the State of New York, and we may say in passing, that Congress has not attempted to do so. The Legislature cannot leave to a body of industrials throughout the United States to declare that an emergency exists here in intrastate business, and to provide methods and means for meeting that emergency. The Legislature cannot leave to a National Administrator to declare what shall or shall not be a crime in New York State.

The law governing the functions of the Legislature is well understood. Section 1 of article III of the New York State Constitution provides:

“ Legislative powers. Section 1. The legislative power of this State shall be vested in the Senate and Assembly.” This legislative power cannot be passed on to others. What is legislative and what administrative is not always easy to define, but the difficulty is not apparent here.
The senators and assemblymen are selected by the electors of their respective districts to represent them in the legislature of the state and to enact such laws as shall be requisite and advisable. The people, who have entrusted them with legislative power, have the right to demand the exercise of their knowledge, judgment and discretion in the framing and in the enactment of laws, and in so far as their duties are strictly legislative, have prohibited them from delegating that power to others.” (Stanton v. Board of Supervisors, 191 N. Y. 428, 432.)

Power given to a Public Service Commission to fix rates is the subject of inquiry in Wichita R. R. & Light Co. v. Public Utilities Commission (260 U. S. 48, 59). The court said: In creating such an administrative agency the legislature, to prevent its being a pure delegation of legislative power, must enjoin upon it a certain course of procedure and certain rules of decision in the performance of its function. It is a wholesome and necessary principle that such an agency must pursue the procedure and rules enjoined and show a substantial compliance therewith to give validity to its action. When, therefore, such an administrative agency is required as a condition precedent to an order, to make a finding of facts, the validity of the order must rest upon the needed finding.” (See, also, Panama Refining Co. v. Ryan, 293 U. S. 388; also Barto v. Himrod, 8 N. Y. 483.)

In United States v. Grimaud (220 U. S. 506) it was held that while it is difficult to define the line which separates legislative power to make laws and administrative authority to make regulations, Congress may delegate power to fill up details where it has indicated its will in the statute, and it may make violations of such regulations punishable as indicated in the statute. Authority to make administrative rules is not a delegation of legislative power, and such rules do not become legislation because violations thereof are punished as public offenses.

In this day when the demands upon the State Legislatures for necessary and important laws are increasing every year we must not be rigid in our construction of legislative power. More and more must the laws become general in form, leaving to commissions, boards or other administrative bodies the establishment of rules and regulations and the determination of the facts to which the general law will apply. To make the violation of any such adopted rule or regulation a crime, is not a delegation of legislative power. (See Matter of Trustees of Village of Saratoga Springs v. Saratoga Gas & Elec. L. & P. Co., 191 N. Y. 123, 145.) “ The law books are full of statutes unquestionably valid, in which the Legislature has been content to simply establish rules and principles, leaving execution and details to other officers.”

We have here, however, in this act before us no such establishment of a rule or principle. The Legislature has declared an emergency in industry and left it for others beyond its power or control to do the rest. It has not created or appointed any agency representing the People of the State to form rules or regulations or to even deter-. mine that price-fixing in the coal business is necessary.

In arguing in support of this law three assumptions are made: 1. That the Legislature has found an emergency in the coal business, and that the facts necessitate fixing the sales price of solid fuel. 2. That the Legislature has appointed or created an agency to carry out its will and administer the law through reasonable rules and regulations. 3. That the Legislature itself has the power to fix the sales price of all commodities useful to man by declaring an emergency. The first two are lacking in this case and the third is very questionable. This court and the United States Supreme Court have never so decided.

This law, chapter 781, Laws of 1933, is a mere shell, leaving to National bodies or officials the power to make the laws of New York State. To repeat, the Legislature does not declare that any emergency exists in the coal trade as conducted in intrastate commerce. It does not even declare that this business needs regulating. It leaves it entirely to an outside authority to say whether or not it shall be regulated, and what the regulations shall be. It leaves it to a National Code Authority or a National Administrator to say whether the emergency exists in that trade in New York State, and to fix the price at which coal shall be sold. The delegation of its power is even more extreme, for it makes it a misdemeanor for any citizen to violate any rule or regulation hereafter made by these authorities. The only thing required by this law is the filing of the nationalized codes in the Secretary of State’s office. To this extent the Legislature has acted, and no further. Everything else has been delegated.

The briefs place much emphasis upon Nebbia v. New York (291 U. S. 502); People v. Nebbia (262 N. Y. 259), and claim that this is an authority to sustain legislation fixing the price of any commodity —- shoes, clothes, coal, hardware or anything else that may strike the Legislature’s fancy, provided an emergency be declared. The fixing of the price of milk in the Nebbia case was a mere incident to other regulations which tried to meet an abuse growing up to the detriment of the farmer and his stock. This control of the output protected the very vitals of the industry, and it would not have been a far step to have held, as perhaps it was intimated, that the milk industry was one touched with a public interest, such as water, electricity, grain and the like. To say that the Nebbia case is an authority for the Legislature to fix the prices of all commodities is not justified by the decision. What the legislative power may be in a given case regarding any industry we do not undertake to say. Sufficient unto the day is the power thereof.

Even then the Legislature in this case has made no attempt to fix the price of coal or to appoint any body to investigate as to its necessity. It adopts without ascertaining the facts for itself what may or may not be done by others having interests outside of New York State.

Likewise we have been referred to the cases regulating the rates on railroads, and for electric lights, such as Matter of Trustees of Village of Saratoga Springs v. Saratoga Gas & Elec. L. & P. Co. (191 N. Y. 123); People v. Long Island R. R. Co. (134 N. Y. 506); Matter of Gilbert Elevated Ry. Co. (70 N. Y. 361); People ex rel. Doscher v. Sisson (222 N. Y. 387); Matter of College of City of New York (236 N. Y. 594); Cleveland v. City of Watertown (222 N. Y. 159); Gardner v. Ginther (257 N. Y. 578). All these cases dealt with corporations exercising public franchises or else with political divisions of the State or creatures of the State. They have no application to the price-fixing power generally.

We conclude that this State law which we are reviewing is unconstitutional, as an unauthorized delegation of legislative functions, contrary to our State Constitution.

The New York State Constitution further provides in article III, section 17, as follows: No act shall be passed which shall provide that any existing law, or any part thereof, shall be made or deemed a part of said act, or which shall enact that any existing law, or part thereof, shall be applicable, except by inserting it in such act.”

The evils sought to be avoided by this prohibition were stated in People ex rel. Commissioners v. Banks (67 N. Y. 568), where the court said: “ The evil in view in adopting this provision of the Constitution, was the incorporating into acts of the legislature by reference to other statutes, or clauses and provisions of which the legislators might be ignorant, and which affecting public or private interests in a manner and to an extent not disclosed upon the face of the act, a bill might become a law, which would not receive the sanction of the legislature if fully understood (p. 575.) ”

Surely an act which provided that any regulation of Congress hereafter made when filed with the Secretary of State would be enforceable in this State, and a violation thereof would be a misdemeanor, would be a violation of the spirit and letter of this our constitutional provision. The Codes above referred to, when once approved, are designed to have the effect of the law; they are made law by the act of Congress so far as they affect interstate commerce, and now they are proposed to be made law by incorporating them bodily into our statute by reference. It is too narrow a construction of this wise constitutional provision to say that it only applies to State laws and not to the Codes, because they are not laws in the strict sense of the word. The Codes became laws with heavy sanctions for an infraction. Their embodiment into chapter 781 of the Laws of 1933 "by reference was unconstitutional) (Opinion of the Justices, 239 Mass. 606; State v. Vino Medical Co., 121 Me. 438.) (See, also, People ex rel. New York Electric Lines Co. v. Squire, 107 N. Y. 593, p. 602; Matter of Watkinson v. Hotel Pennsylvania, 195 App. Div. 624; affd., 231 N. Y. 562.)

One of the orders below denied defendants’ motion to dismiss the complaint. The other order restrained the defendants from carrying out their repeated threats to prosecute the plaintiff for violation of the order of the Divisional Code Authority No. 3, being Order No. 3E. The injunction, if otherwise proper, was equitable, as the accumulation of fines and the discontinuance of the plaintiff’s business meant his immediate ruin. The orders affirmed by the Appellate Division being interlocutory, permission was given by that court to come here, the question certified being:

“Does the complaint herein state facts sufficient to constitute a cause of action? ”

The orders of the Appellate Division should be affirmed, with costs, and the question certified answered in the affirmative.

Lehman, J.

(dissenting). It is common knowledge that in the summer of 1933 conditions had arisen which almost paralyzed many forms of industry and commerce. That constituted a threat to the economic stability of the Nation and of every State; it affected the welfare of the whole people. It is immaterial whether or not we call this condition an “ emergency; ” it was certainly a condition from which the country urgently needed relief. Congress and the Legislatures of the several States, each within its own field, were under the duty of enacting legislation reasonably calculated to provide a remedy, so far as possible, for these conditions.

The field within which the Congress of the United States was empowered to act was limited to interstate commerce. Exact definition of the limits of that field is difficult, perhaps impossible. The geographical boundaries of the separate States fix the limits of State sovereignty, they form no barriers, and are completely disregarded in the conduct of commerce and industry by business men. The production and sale of commodities conducted by the same men, in the same plant and at the same time may be a part both of interstate commerce and of intrastate commerce. A business localized within a State competes often with interstate commerce. Economic laws ignore State boundaries artificially created to mark the limits of local sovereignty. The steady increase in the proportion of business conducted on a national or at least interstate scale brings interstate business into constantly increasing competition with local business. The Congress of the United States has, in the National Recovery Act, attempted to provide a method for the formulation of rules and regulations intended to govern such commerce as comes within the field of its power. All Congress can do or has attempted to do is to act within the field of its powers. Only the Supreme Court of the United States can authoritatively define the limits of that field. Outside of that field the statute of Congress can have no effect. There regulation becomes only a matter of State concern and of State powers.

The Legislature of the State of New York, like the Congress of the United States, is impotent to enlarge or restrict the field of its own powers. It knows only that whatever the ultimate definition of the Supreme Court of the United States may be, some field of local intrastate commerce and industry will remain in which the State is the supreme sovereign. The Legislature cannot abdicate within that field, whether it be large or small, the sovereignty of the State. The State of New York, by its Constitution, has intrusted to its Legislature the law-making power. The Legislature cannot delegate to any other person or body the power intrusted to it. It is said that the Legislature has done so in the State Recovery Act. That is the primary question presented upon this appeal.

That question cannot be determined by the application of any set formula. We deal here with no express prohibition or limitation placed by the Constitution upon the powers of the Legislature. The action of the Legislature is challenged upon the ground that it has not exercised the responsibilities and functions intrusted to it, but that it has evaded its responsibilities and confided its own functions to others. That requires an analysis of the problem which confronted the Legislature, and a determination whether the Legislature has in fact devised a remedy reasonably calculated to meet the situation, or has left to others the solution of the problem.

No one can, I think, doubt that conditions existed which were undermining both interstate commerce and local business. Congress took action to remove these conditions in connection with interstate commerce. Within that field Congress is supreme, and a Federal statute becomes the supreme law of the land. That field is, as I have said, not authoritatively defined by the only tribunal that could give an authoritative definition. Assertion was made that Congress could regulate even intrastate, local business upon the theory that under modern conditions intrastate and interstate business are so closely intertwined that regulation of intrastate business is a necessary step in the regulation of commerce between the States. We may reject such assertion; nevertheless a large twilight zone ” must remain in which those who conduct a particular business cannot with certainty determine whether or not they are subject to the provisions of the National Recovery Act. Even if that were not so, it would still be the fact that localized business does come into competition with interstate commerce; that sickness in local business may cause the death of interstate commerce, and, more important, that sound rules regulating either local business or interstate commerce become more effective when applied simultaneously to both.

Thus after Congress had enacted the National Recovery Act, the Legislature was called upon to decide whether the remedy which Congress was seeking to apply to conditions existing in interstate commerce was in its opinion a sound remedy which could be applied also to the same conditions existing in intrastate commerce or industry. Then the Legislature was called upon to determine whether it should adopt the same remedy, including the machinery for the formulation of specific rules and regulations in particular lines of business. It could, if it chose, write its own prescription; it could if it chose create its own administrative machinery, but if it chose such course it would introduce chaos into a situation which called for order. Businesses which enter into competition with each other would be subject to different rules, regulations and restrictions; indeed, departments of the same business might be subject to different forms of regulation, and a business man might be called upon to decide at his peril to which rules he was subject.

The Legislature chose instead to cooperate with the National Government effectively; to provide that the same regulations and the same machinery applicable in interstate commerce should be applied also in local business within the State. We are not concerned with the wisdom of the National Recovery Act. Upon that there is, undoubtedly, great difference of opinion. We are not even concerned with the wisdom of the Legislature in recognizing that the orderly application of one system of regulation to business, both interstate and intrastate, has advantages over the introduction of artificial differentiations which would weaken any effective regulations, though here there seems less ground for difference of opinion. We are concerned only with the power of the Legislature to make the choice it did.

If there has been any delegation of legislative authority to the President, to representatives of industry or to code authority, that delegation was made by Congress before the Legislature of this State enacted the statute which is now challenged. The Legislature dealt with a condition already existing. If the Federal statute was valid within the field of interstate commerce, then, so the Legislature decided, it should be applied in all business; and even if eventually the Supreme Court should declare the Federal statute unconstitutional, in the interval, and so long as the executive Federal authorities sought its enforcement, there could be no effective regulation by any other system.

What are the powers and the functions of the Legislature under such circumstances within the field where the State is supreme? Obviously, to appraise the conditions, whether created by economic laws, by action of the Federal authorities, or by greed or unsocial practices of individuals, and then itself to devise the remedy which it deems best calculated to remedy these conditions. That is what the Legislature has done. It has not supinely left to others the determination of such remedy. It has itself determined that the remedy to be tried is the application to business within the State of the same rules and regulations which the Federal authorities apply nationally. It has not delegated to the Federal authorities or to individuals the right to act in its place in the determination of the policy of the State or the remedy to be applied in matters of State concern. It has chosen the policy and formulated the rules by enacting a statute which provides for regulation of intrastate business in the same manner in which interstate business is regulated.

To hold that the Legislature has not the power to choose this course is equivalent to saying that the legislative power of the State is insufficient to make laws best calculated to remedy a particular situation. True, a statute may be subject to successful attack upon the ground that the Legislature violated an express prohibition or express limitation placed upon the exercise of legislative power of the Legislature. Here the attack is on other grounds. The court is holding that the statute is invalid because it is not a complete exercise of the legislative powers of the State, but is merely an authorization conferred upon others to exercise such powers. We are referred to numerous cases as authority for that assertion. They do not support it. They are all cases where the Legislature or Congress deliberately left incomplete even the framework of a regulatory system. Here not only the framework is complete but the system is complete in all its parts. We are told that the statute can be sustained only upon certain assumptions. With the exception, perhaps, of the assumption that price-fixing may, in proper case, be within the legislative power, none of them are, in my opinion, necessary or even relevant. The formulotion of regulations in a particular business in accordance with the Federal statute creates the conditions which the Legislature of this State has determined require the application of the same regulations within this State, and thus automatically fixes the rule. The Legislature has not left to others the determination of the policy of the State, or what regulations are wise and are calculated to remedy conditions which might otherwise injuriously affect the public welfare. It has said that, under present conditions and regardless of the wisdom of a particular regulation, the public welfare requires that the same regulations should be applied to interstate and intrastate business.

The rule that the Legislature cannot delegate legislative power is merely an application of the basic rule that the legislative power of the State is vested solely and completely in the Legislature. It is no limitation upon the legislative power of the State. That is plenary in all matters of State concern, except where limited by the Constitution of the State or of the United States. It necessarily includes the power to determine the policy of the State and to make that policy effective. The policy of the State is embodied in the statute which is now attacked. It declares that certain causes affect both intrastate and interstate commerce. It declares that the standards of fair competition should be uniform in intrastate commerce and business and in interstate commerce. That declared policy can be made completely effective only if the State adopts and makes applicable to intrastate industry or commerce the same standards, rules and regulations as are applied in interstate commerce. That is what the Legislature has done. There is no analogy between a statute of that kind and a statute which would authorize the Legislature of a sister State or any other body or person to determine the policy or make the laws for this State. The test in each case must be whether or not the Legislature of this State has itself exercised its constitutional law-making power, or whether it has evaded its responsibility in that respect. Here the Legislature has completely exercised its powers and has adopted as a means of carrying out the policy of the State the method best calculated, in its opinion, to carry out that policy. The attack upon the method is merely an indirect attack upon the policy of uniform standards in intrastate business and in interstate commerce; though that policy is immune from attack otherwise.

The Legislature has said that a national emergency productive of widespread unemployment and disorganization of industry, which likewise prevails in the state of New York, which burdens intrastate, interstate and foreign commerce, affects the public welfare, and undermines the standards of living of the American people and of the people of the state of New York, is hereby declared to exist.” That finding justifies legislation which is calculated to remove these destructive conditions. The Congress of the United States had previously declared the existence of similar destructive conditions in the Nation The Legislature found that the declaration of Congress as to the causes and effect of existing destructive conditions relate as well to commerce in this State wholly intrastate in character as to interstate and foreign commerce and transactions affecting interstate and foreign commerce carried on in this state.” So far certainly there has been no delegation of legislative authority to the Congress of the United States, or to any other body, or person. The Legislature has used its own judgment in reaching its own conclusion.

That conclusion is that the State should make uniform the standards of fair competition prevailing in intrastate commerce and industry with those of interstate commerce required by the provisions of the said National Industrial Recovery Act which are applicable in interstate commerce in the State of New York.” For that purpose and to carry out that policy, the Legislature provides that any violation of any rule or regulation adopted pursuant to the National Recovery Act as a standard of fair competition shall be a misdemeanor in this State. The Legislature has not in that provision left to others the determination of the expediency of rules of conduct hereafter to be imposed in a particular trade or industry, or the determination of whether an emergency exists which requires any compulsory rule of conduct. It has determined for itself that industry in general is suffering from a condition which requires remedy; that a remedy applied to local industry alone is not the most expedient remedy, but that whenever a rule or regulation in regard to fair standards of competition is imposed by competent authority upon transactions affecting interstate and foreign commerce carried on within this State, a contingency arises which should be met by the imposition of the same rule or regulation upon business conducted wholly within the State.

We have sustained legislative action in providing that foreign insurance companies, as the price of admission to our territory, should pay in taxes, license fees and the like precisely what the States which created them should impose upon our companies in excess of our usual rates as the price of admission to the foreign territory.” (People v. Fire Association of Philadelphia, 92 N. Y. 311, 317.) The analogy between such a statute and the statute now under consideration is, of course, incomplete. Significant distinctions are obvious; but similar objections were raised to the validity of the statute and much that was said there applies here. In the statute before us nothing is left to anybody’s discretion. That is certain which can be rendered certain, and the act fixes the tax by reference to an extrinsic fact which determines its amount in excess of a fixed and established rate. Because that extrinsic fact is the legislation of another State, it does not follow that the legislative discretion of such other State is in any manner substituted for our own. * * * It seems to us that the whole difficulty arises from a failure to regard the foreign law, relatively to our own legislation, as simply and purely an extrinsic and contingent fact. Such fact, like any other, may justly influence and even occasion legislative action, without at all changing its nature, destroying its discretion or abridging its duties or its judgment. Most laws are made to meet future facts. They are complete when passed, but sleep until the contingency contemplated sets them in operation. * * * Such contingency may sometimes be, instead of a certain and definite fact, one which is variable and changeable. The legislation suited to such a fact and adapted to such a future emergency may properly recognize its movable character, and be itself made flexible to the changing emergency, and this very characteristic is the product of legislative will and discretion rather than a surrender of it ” (p. 318, 319). Much more is said in the opinion in that case. It would be difficult to find a single proposition in this dissenting opinion which has not been approved by this court in People v. Fire Association of Philadelphia (supra), and there is hardly an argument which could be made to the contrary which was not rejected by this court in the earlier case.

Much of what I have heretofore said applies with at least equal force to the attack upon the statute on the ground that it violates the provision of the Constitution of the State prohibiting incorporation of any existing law or part thereof, by reference, into another act. (Art. III, § 17.) That section of the statute was not intended and cannot reasonably be construed as a limitation upon legislative power but only upon the manner of its exercise. It seems to me too clear to require argument that if the Legislature would otherwise have power to provide that a regulation or rule thereafter to be formulated should become the law of this State, that provision of the Constitution would create no obstacle. By its express terms it is confined to " any existing law ” and its purpose as explained in People ex rel. Commissioners v. Banks, (67 N. Y. 568), is similarly limited.

I have not overlooked the fact that there may be doubt whether under the Constitution of the United States, the price-fixing provisions in codes are valid and enforceable regulations in interstate commerce. If they are invalid in interstatecommerce,thenI concede that they are equally invalid in intrastate business. There should, however, be more than doubt as to their validity before this court would be justified in sustaining a suit in equity to set them aside in the absence of any expression of opinion on the question by the Supreme Court of the United States.

The orders should be reversed.

O’Brien, Hubbs and Loughran, JJ., concur with Crane, Ch. J., for affirmance; Lehman, J., dissents in opinion, in which Crouch and Finch, JJ., concur.

Orders affirmed, etc.


author: Crane, Ch. J.

text:
    Felix Gutkind, Respondent, v. George Lueders and Company, Appellant.

      (Argued April 25, 1935;
    decided May 21, 1935.)

      A. S. Andrews for appellant.

      Edward E. Hoenig, Sidney S. Bobbé and Joseph Eisinger for respondent.
   Crane, Ch. J.

The plaintiff is a distiller, manufacturer and blender of essential oils in Malaga, Spain. The defendant is a manufacturer of and dealer in such essential oils in New York. In 1920 the plaintiff sold to the defendant red thyme oil, guaranteed pure forty per cent phenol content. This action is brought to recover the price of part of this sale and damages for failure to accept full delivery. The defendant counterclaims, alleging damages for breach of warranty in that the phenol content was on the average of only thirty-five per cent.

A trial was had before the court without a jury, which resulted .in a judgment for the plaintiff in .the sum of $23,329.07, which included the balance of the purchase price, damages for breach, and interest.

Red thyme oil is produced by a distillation of an herb thyme, of which there are several varieties. The phenol content of the oil is the valuable part; the Spanish product varies in phenol content from twenty-eight per cent to seventy-four per cent by volume, while the variety coming from other places varies from twenty-eight to fifty-three per cent by volume. Whether these percentages be exact or not, the fact is conceded that the forty per cent pure phenol content which the plaintiff warranted the defendant had to be produced by either reducing or raising the phenol content resulting from distillation. This the plaintiff did at his place of business in Malaga, Spain, before shipping to the defendant. The oil was put in drums which contained a sort of screw cap, that is, the cap screws on with a long iron bar which “ screws them hermetically.” This was all done by the plaintiff before delivery.

The parties have stipulated as to the shipments which reads in part as follows: That on or about the 23rd day of July, 1920, at Malaga, Spain, the plaintiff and the defendant entered into an'agreement wherein and whereby it was mutually agreed that the plaintiff sell to the defendant and the defendant purchase from the plaintiff 10,000 kilograms of red thyme oil for technical use only of 40% phenol content for which the defendant agreed to pay the sum of 19 pesetas per kilo, cost and freight, New York, together with discharge expenses and expenses for consular invoice, payment to be made in cash at Malaga, Spain, against delivery of documents.”

Without quoting further from the stipulation, it is enough, I think, to say that shipments commenced July 28, 1920, were made on September 25, 1920, October 8, 1920, and the 21st day of October, 1920, by various drums of oil being placed on ships at Malaga, Spain, for which the plaintiff was paid, as it was a c. i. f. contract. On the 18th of November, 1920, the plaintiff sold the defendant another 10,000 kilograms of red thyme oil of about forty per cent phenol content, for which the defendant agreed to pay the sum of twenty-one pesetas per kilo, cost and freight, New York, together with discharge expenses and expenses for consular invoice, payment to be made in cash at Malaga, Spain, against delivery of documents; shipments to be made to the end of December, 1920. Three drums of this merchandise were shipped, consigned to the defendant, for which it refused to pay, having canceled the order while the goods were in transit, and refused to take the balance of the order in a letter of cancellation dated December 1, 1920, sent to the plaintiff through its agent Vogelin, in Spain.

From these stipulated, facts we understand somewhat better the plaintiff’s complaint, He sues for the price of this three-drum delivery under the contract of November 18, and for damages resulting from the failure of the defendant to take the balance of the oil sold. The defendant, on the other hand, having paid in cash for prior deliveries, refuses to pay any more, and counterclaims for breach of warranty.

There seems to be little question on the evidence about the phenol content of the oil sold, Mr, Felix Gutkind was a witness for himself upon the trial and admitted that to reduce the phenol content to forty per cent he bad used four or five other ingredients which adulterated the product and that, with the consent of Vogelin, the defendant's agent, he had used triacetin to raise the phenol content when it was lower than it should be. Triacetin is an acid and is not a phenol. He testified as follows regarding this matter:

Q. So that if the phenols appeared to he less than 40 you added triacetin to bring up the apparent phenol content to 40, is that right? A. A small amount.
“ Q. You added a small amount to bring up the apparent phenol content to 40 per cent? A, Yes,
“ Q. Did you know at that time that this test would make triacetin appear as a phenol? A, Yes.
" Q, And was that the reason why you put the triacetin in? A, No, not the only reason.
“ Q. Was it one of the reasons? A. One of the reasons, If there are missing one or two degrees, we put it in.
" Q. Suppose it is missing 5 degrees, would you put it in then? A, No,”

One of the tests to determine the phenol content .is of no value to detect or measure the adulteration by triacetin, At another place Mr. Gutkind states that Yogehn, the defendant's agent, knew that he had used this diluting mixture. Yogehn, we may say in passing, was the defendant's agent in Spain, through whom it made its contracts with the plaintiff. There is no evidence that he had any authority to waive the provisions regarding the phenol content of the thyme oil purchased, or that he could accept for the defendant inferior or lower grades. This action was not commenced until nearly six years after the sale, and was not brought on for trial until after Vogelin’s death, which occurred in 1931, so that this case must be disposed of upon the issue of whether or not the defendant received at New York merchandise which the plaintiff agreed to deliver, and whether, if defective, rejection was made in time.

When the drums of oil arrived in various shipments, as above stated, they were immediately examined by the defendant’s chemists, according to methods described by them. Nathaniel Roseman and Johannes Helle were the chemists. Roseman’s tests disclosed the average phenol content of only thirty-four to thirty-five per cent. Joseph A. Crombie, the factory manager for the defendant, by a process of redistillation, discovered the deficiency in quantity of the phenol content of these drums of oil. The process used by him and the records made by Jacob T. Fehl, the foreman, were described but excluded. The exclusion of this testimony we think was error. Fehl was dead, but the records made by him as the result of this redistillation made by Crombie we think were competent. Someone had to take down the results in writing, and it was done in the usual and customary way, so far as Crombie’s testimony discloses. If we read Crombie’s testimony aright, he also vouches for the accuracy of these records. The conclusions reached by Crombie in making this test, which was in reality the only one accurately to determine the presence and amount of triaeetin, should have been received for what they were worth. Further, some allowances must be made when such a question as this comes into court over twelve years after the event. Witnesses are dead and memory can only be checked or refreshed by records made at the time. We think this factory practice of calling off and tabulating the results of redistillation, which takes a day or two, and the preservation of these records in the office by the clerks recording them, constituted some evidence bearing upon the question at issue. Whether or not they were accurate or reliable was a matter affecting their weight as evidence, but their competency was apparent.

The same thing we can say regarding the testimony of Harvey A. Seil, the expert from Columbia University, who examined certain samples just before the trial and in January of 1934. Some of the oil from the drums had been taken out by employees of the defendant, placed in bottles, tagged and sent to the office for preservation. The custody of these bottles was traced to the possession or control of the witness Feger, who testified that when he succeeded the witness Marth as foreman, he found all these samples sealed and intact, covered with a deep layer of dust, in a box under the safe, covered with paper, and he preserved the samples unopened until Dr. Seil took them. While of course it is not very satisfactory evidence to produce exhibits for examination twelve or fourteen years after a sale of goods, and for an expert.then to declare them defective, we must always bear in mind that the competency of evidence depends upon the question at issue, and the manner in which it is presented.

Here we have a contest as to the phenol content of thyme oil. Concededly, it was adulterated to some extent. Did it come up to the warranty of the defendant— that it should be forty per cent, or about forty per cent phenol content — or did it drop so low that the defendant was justified in throwing up its contract and suing for breach of warranty? The plaintiff did not bring his action for six years and, in the meantime, the defendant had had the examinations stated and had apparently taken these samples, bottled them and preserved- them for further use. Whether the bottles did contain the oil taken from the drums shipped by the plaintiff, and whether or not they had remained untouched and in a condition to show the phenol content twelve years before, is all a matter for the trier of facts. The evidence is not incompetent, although in this particular it may be very slim. We think that the evidence of Dr. Seil in this particular should have been accepted. Little harm is done in receiving such evidence in ascertaining. the truth, provided full opportunity is given to expose its inaccuracy or its inadequacy. As to chemist Helle, we are of the opinion that exhibits consisting of memoranda of analyses of samples of the oil received, tíiade by his assistant, and referred to in his deposition, should have been accepted for what they were worth.

We do nob agree, however, with the appellant regarding the letters of the plaintiff to the defendant, Exhibits J, L and M for identification. True it is that these letters made statements about the muddle ” in the plaintiff’s office, and that the plaintiff was not personally to blame for any defects, but all these statements were written in a spirit of compromise to try to bring about a settlement with the defendant and a continuance of business by some satisfactory arrangement as to the past unfortunate disagreement. The plaintiff as a witness was asked about these statements and could be cross-examined as to their meaning or any other previous statement made by him admitting facts favorable to the defendant, but we do not think these letters so closely connected with offers of settlement, written in more or less of a generous spirit to effect a compromise, should be received as evidence and admission of defective delivery. This would be to distort a friendly gesture or suggestion into a confession of guilt. If the defendant has no better evidence than such statements to prove the breach of warranty it should not succeed.

Something must be said by us regarding the Spanish law which the plaintiff has set up as a barrier to the defense and counterclaim, the specific point- being that claims must be presented within four days or thirty days after delivery. Commercial Code of Spain, as contained in this record, section 336, reads as follows:

“A purchaser who, at the time of receiving the goods, examines the same to his satisfaction shall not have the right of action against the seller on the ground of defect in the quantity or quality of the goods.
“A purchaser shall have a right of action against the seller for defect in the quantity or quality of goods received in bales or packages or containers, provided he brings his action within the four days following receipt of the goods, and provided the damage is not due to accident, to inherent defect of the goods or to fraud.
In any such cases the purchaser may choose between rescission of the contract or performance thereof in accordance with agreement, together with the payment in each case, of the damages he may have suffered by reason of the defects or faults.”

The purchaser in this case did not examine the goods at the time of delivery, so the four days’ provision is not applicable, and the damage, if any, is due to inherent defect of the goods only discoverable on analysis. Even if the four days were applicable, the courts of this State would give no force and effect to them as being a short statute of limitations unenforceable in this State. Section 342, also insisted upon, reads as follows: “A. purchaser who shall have not made claim for inherent defects in goods sold, within the thirty days following their delivery, shall lose all cause of action and right against the seller for such defects.”

Considering the contract of sale and the sale as controlled by the Spanish law, the sales having been made in Spain and delivery made there (1 Williston on Contracts, § 97), yet there are certain parts of that law which the courts will not enforce as against our own citizens. A provision of law which would nullify the contract and furnish no defense whatever to a defendant as against the fraud or breach of a seller would not receive recognition here. A short statute of limitations may accomplish such a result. The delivery referred to in this statute could not mean the delivery in Malaga, Spain, It took the ships'a good part of the thirty days to get here. Such an interpretation would render examination of the oil by any chemical process after receipt here almost impossible. If we apply this thirty-day rule we must give it the interpretation to mean a delivery at the place of business of the buyer under such conditions that he is enabled to make the proper and usual examination or test to see if he has received What he bargained for; in other words, the purchaser must have a reasonable opportunity to receive and examine his goods. Immediately upon the arrival of the first shipment involved in this case the defendant made such examination and test and notified the seller through Vogelin, its agent in Spain.

Under our Uniform Sales Act, section 49, Personal Property Law (Cons. Laws. ch. 41), section 130, a purchaser is given a reasonable time within which to make a complaint. Where the foreign statute of limitation cannot apply from the very nature of the contract, or because it is unreasonable in its effect, we should apply our own law and give to the purchaser a reasonable time to make his examination and reject the goods, (National Surety Co. v. Ruffin, 242 N. Y. 413; Laurencelle v. Laurencelle, 217 App. Div. 159; Reilly v. Steinhart, 217 N. Y. 549.) Such cases as Apfelberg v. Lax (255 N, Y. 377) and Benton v. Safe Deposit Bank (255 N. Y. 260) and Hutchinson v. Ward (192 N. Y. 375) deal with limitations which are part of the substantive right, that is, the right is Created provided the remedy is sought within a limited time. Not always is it easy to distinguish between a right and a remedy when dealing with time limitations. The distinction seems to be between what were common law rights and those created by statute. However, reason indicates that in this case our courts should not enforce this thirty-day limitation after delivery as it virtually deprives our citizens of any right or relief.

As before stated, delivery was made in Spain in sealed containers called drums, and the plaintiff must have known that inspection could not be made until the goods arrived in New York. Surely he could not have filled the containers with water and prevented the defendant fropi seeking redress if the vessels had been delayed in reaching here before the thirty days had expired. For instance, seven drums were shipped from Spain on September 25, 1920, by steamship Cabo Creux, which docked at New York on October 28, 1920, more than thirty days after delivery in Spain. Was there no redress at all in the courts of New York for this defendant when the merchandise proved defective or not according to warranty? To state the proposition is to reveal the impossibility of applying the thirty days’ limitation of the Spanish law. It was never meant or intended to apply to such a situation where inspection only could be made in a foreign country and the parties had not stipulated for inspection or examination at the home port. We find, therefore, that none of these provisions of the Spanish law bars the defendant’s claim. According to the Civil Code of Spain, section 1484, we find that the seller is liable: The seller is hable for any hidden defects which the thing sold may have if they render it unfit for the use for which it was intended, or if they diminish its fitness for such, use to such an extent that had the purchaser known the defects, he would not have acquired the thing or would have given the lower price for it; but the seller shall not be liable for patent or visible defects, nor for those not visible, where the purchaser is an expert who.by reason of his trade or profession ought easily to have detected them.”

We have above stated that, on the last order, for which this action has been brought, the defendant received part of the goods but refused to pay for them and canceled the order because of breach of warranty. This does not prevent the defendant from pressing its defense in this action for price, or setting up its counterclaim for damages for breach of warranty, if any have been sustained. (Baxter v. Savoy Shirt Co., 238 N. Y. 106; Portfolio v. Rubin, 233 N. Y. 439.)

With this summary review of a case rendered somewhat difficult because of the nature of the merchandise, the subject of the controversy, and the delay in bringing the issues to a hearing, we conclude that the judgment of the Appellate Division and that of the Trial Term should be reversed, and a new trial granted, with costs to abide the event.

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

Judgments reversed, etc.


author: O’Brien, J.

text:
    In the Matter of John Horn, Respondent, against George J. Gillespie et al., Constituting the Board of Water Supply of the City of New York, et al., Appellants.

      (Argued April 16, 1935;
    decided May 21, 1935.)

      Paul Windels, Corporation Counsel (Edmund L. Palmieri and Paxton Blair of counsel), for appellants.

      Albert De Roode for respondent.
   O’Brien, J.

Petitioner served continuously in the Board of Water Supply of the City of New York and in the Public Service Commission for the First District and the Transit Commission from November 12, 1906, until January 31, 1934, when he was suspended from his position in the Board of Water Supply as a result of a reduction of the force due to lack of work. The date of his original appointment in the city service was fixed by the Municipal Civil Service Commission as August 8, 1923, and he has obtained an order of mandamus directing the Board of Water Supply to reinstate him and directing the Civil Service Commission to correct its records so as to show the date of his original appointment in the service as of November 12, 1906.

On November 12, 1906, he was appointed an axeman in the Board of Water Supply and he continued in that department until January 4, 1914, when he resigned in order to accept an appointment January 5, 1914, as inspector of masonry in the Public Service Commission for the First District. On August 7, 1923, he resigned as engineering inspector in the Transit Commission, successor to the Public Service Commission for the First District, and the next day, August 8, 1923, he received an appointment as assistant engineer in the Board of Water Supply, from which position on January 31, 1934, he was suspended.

In this proceeding is involved the application of section 31 of the Civil Service Law (Cons. Laws, ch. 7). It provides that, when a position in the competitive class is abolished or made unnecessary, the person holding that position is deemed to be suspended without pay, “ which suspension shall be made in the inverse order of original appointment in the service,” and he shall have his name entered upon a preferred list for the position last held by him or any other position having the same or similar requirements for entrance. Appellants argue that during the interval extending from January 4, 1914, to August 8, 1923, petitioner was engaged in State service, was wholly separated from city service, that when he re-entered ■ employment with the Board of Water Supply he received a new original appointment and that his suspension is based upon the inverse order of his original appointment in the service. Does his service ad interim with the Public Service Commission for the First District and with the Transit Commission constitute such an hiatus in the continuity of his city service within the purview of our decision in Matter of Marcus v. Ingersoll (266 N. Y. 359) as to render August 8, 1923 the date of his original appointment in the service ” as intended by section 31 of the Civil Service Law? In that case the employee resigned his position and remained out of all government employment nearly four months during which time he was entirely separated from any kind of public service. We held that under these conditions his resignation terminated his service. In the case now before us the petitioner’s resignations on January 4, 1914, and August 7, 1923, were filed for the sole purpose of enabling him on the two succeeding days to accept public appointments. His service remained uninterrupted. Unlike Marcus, he evinced no intention to depart from public employment. The analogy between the case at bar and Matter of Schaefer v. Rathmann (262 N. Y. 492) is very close and the principle more nearly applicable. Schaefer’s term of service with the city of Buffalo, as such, was interrupted by employment with the Board of Education of that city which, like the Public Service Commission and the Transit Commission, is not strictly a municipal agency (Gunnison v. Board of Education, 176 N. Y. 11, 17; Matter of Wilaka Const. Co. v. McAneny, 265 N. Y. 43, 45), yet we held that his city service had been continuous within the meaning of the Civil Service Law. Although this petitioner served the public continuously for twenty-eight years, eight with the Board of Water Supply, nine with the Public Service Commission for the First District and its successor, the Transit Commission, and again eleven years with the Board of Water Supply, the point is raised that the intervening nine years between his first and second terms with the Board of Water Supply, when his duties attached to the construction of rapid transit railroads located within and owned by the city, was time spent in State rather than city service. It is true that the Public Service Commission for the First District and the Transit Commission exercised functions pertaining to the State and that their officers have been held not to be city officers (Matter of McAneny v. Board of Estimate, etc., 232 N. Y. 377, 390, 391), but their duties were limited to the territory included within the city of New York and the legislative enactments in relation to the raising and disbursement of funds as well as the rights and obligations of their employees have established the status of such employees on a plane different from that of regular employees of the State. City service in its strict sense is of course distinct from State service. For example, time spent by a State employee paid from State funds in administration of the Barge Canal bears no relation to maintenance of a city hall at the expense of a city. However, when an employee's duties are concerned exclusively with a rapid transit system constructed for a city purpose (Sun Pub. Assn. v. Mayor, 152 N. Y. 257) and owned by a city (City of New York v. Interborough R. T. Co., 257 N. Y. 20, 26), when his salary is paid out of the city treasury (Public Service Commissions Law, §§ 14, 107 [Cons. Laws, ch. 48]; Laws of 1907, ch, 429, § 1; Laws of 1916, ch. 572, § 1; Laws of 1919, ch. 520, § 8; Public Service Commission Law, § 14, subd. 2; Laws of 1921, ch. 134, § 19) and he is authorized to join a city pension system and his service if defined as city service ” (Greater N. Y. Charter, Laws of 1901, ch. 466; amd. L. 1923, ch. 142; L. 1930, ch. 660; L. 1933, ch. 490, § 1700, subd. 3), his functions appertain, except in the strictest possible sense, to city service, (Civ. Serv. Law, § 16, as amd. by Laws of 1922, ch. 131; Public Service Law, § 139; Laws of 1934, ch. 844, § 1.)

The order should be affirmed, without costs.

Crane, Ch. J., Lehman, Hubbs, Crouch, Loughran and Finch, JJ., concur.

Order affirmed.


author: Finch, J.

text:
    In the Matter of the Claim of Charles Stoerzer, Respondent, against The City of New York, Appellant. State Industrial Board, Respondent.
    (Submitted April 17, 1935;
    decided May 21, 1935.)

      Paul Windds, Corporation Counsel (Paxton Blair, Justine Wise Tulin and Edmund L. Palmieri of counsel), for appellant.

      John J. Bennett, Jr., Attorney-General (Roy Wiedersum and Hector A. Robichon of counsel), for State Industrial Board, respondent.
   Finch, J.

This is a claim under the Workmen’s Compensation Law (Cons. Laws, ch. 67). The claimant is a physician employed by the Department of Correction of the city of New York. In the course of his regular duties he was incising the hand of an inmate of one of the city prisons, in Brooklyn, when his scalpel slipped, cutting his own finger and causing a serious infection. As a result of this infection he was unable to work for several months and it has been found that he has suffered a permanent loss of the use of his left thumb, amounting to seventy-five per cent, and of the left- index finger of twenty per cent. An award was granted by the Industrial Board, under section 3, subdivision 1, group 18 of the Workmen’s Compensation Law, which has been affirmed by the Appellate Division, two justices dissenting.

Subdivision 5 of section 2 of the Workmen’s Compensation Law reads as follows: “ ‘ Employment ’ includes employment only in a trade, business or occupation carried on by the employer for pecuniary gain, or in connection therewith, except where the employer and his employees have by their joint election elected to become subject to the provisions of this chapter as provided in section three.”

The only question presented upon this appeal is whether employment by a municipal corporation is covered by section 3, subdivision 1, group 18, of the Workmen’s Compensation Law.

Section 3, subdivision 1, group 15, provides compensation for persons in employment as keepers, guards, nurses or orderlies in a prison, reformatory, insane asylum or hospital, maintained by a municipal corporation or other subdivision of the State.

Group 16 of subdivision 1 of the same section provides compensation for any person in employment by the State, notwithstanding the definition of employment contained in said act.

Group 17 secures compensation for all municipal employees who are engaged in the employments enumerated in the first sixteen groups.

Section 3, subdivision 1, group 18, reads in part as follows:

Group 18. All other employments, except persons engaged in a clerical, teaching or nonmanual capacity in or for a religious, charitable or educational institution, notwithstanding the definition of employment in subdivision five of section two, not hereinbefore enumerated, carried on by any person, firm or corporation in which there are engaged or employed four or more workmen or operatives regularly, in the same business or in or about the same establishment either upon the premises or at the plant or away from the plant of the employer, under any contract of hire, express or implied, oral or written, except farm laborers, domestic servants, other than private or domestic chauffeurs employed as such in cities of two million inhabitants or over, and persons engaged in voluntary service not under contract of hire. * *

The claimant contends that this group is applicable to municipal corporations, since it applies to “All other employments/’ and the definition of “ employer ” in the statute includes the State and municipalities.

The Words with which group 18 above begins, namely, “All other employments,” obviously restrict this phrase to employments not covered by the preceding seventeen groups. The employments specified in group 18 are those carried on by “ any person, firm or corporation in which there are * * * employed four or more Workmen or operatives regularly, in the Same business or in or about the same establishment either upon the premises or at the plant or away from the plant of the employer,” This is curious language by which to comprehend a municipality. The city does not, in Common parlance, conduct a “ business ” or maintain an establishment ” or a “ plant.”

Also in group 17 the term “ municipal corporation ” was coupled with the term “ state.” This provision was reasonably and logically related to units of government; whereas the term “ corporation,” as used in group 18, was employed with the terms “ person ” and firm,” so that under the familiar principle of fíoscitur a sociis the term “ corporation ” Would there relate to a private corporation.

Nor does the background of the legislation involved support the view of the claimant. Turning to the prior law and the evil sought to be remedied, we find the Legislature had attempted to bring within the scope of the Workmen’s Compensation Law all the employments deemed hazardous. Because of the complexity and variety of industrial activity, efforts to make the list exhaustive proved futile, Finally, in 1918, a new group, the present group 18, was added (Laws of 1918, oh. 634). Similar difficulty had not been encountered in reference to the less varied and normally less hazardous activities of municipal employees, Thus, the evil aimed at was one involving industrial employees and the remedy should n,ot be construed to be applicable to municipal employees in the absence of language clearly bringing them within its scope. (Cf. Matter of Wilson v. Dorflinger & Sons, 218 N. Y. 84.) It is not for the courts to enlarge the application of the Compensation Act beyond the plain intention of the Legislature.

The order of the Appellate Division and the award of the State Industrial Board should be reversed and the claim dismissed, with costs in all courts.

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

Ordered accordingly.


text:
    Lerand Corporation, Respondent, v. Samuel Meltzer, Appellant.

      (Argued April 18, 1935;
    decided May 21, 1935.

      James S. Hays, Milton Kunen and Arthur Kahr for appellant.

      Warren M. Caro and Benjamin Reass for respondent.
   Finch, J.

This is an action for specific performance of an alleged contract to purchase real property.

Charles Wolf, a broker, was employed by one Leroy Rand to sell a residential property. Wolf negotiated with the defendant and received $500 from him. In return he gave the defendant a memorandum, signed by himself, reading as follows:

“ March 4, 1932.
Received from Samuel Meltzer the sum of Five hundred ($500.00) dollars on account of the purchase of property located at 335 Crown Street, Brooklyn, N. Y. Price being $12,000.00 subject to $7,500.00 first mortgage held by the Title Guarantee and Trust Company, contract to be drawn on Tuesday, March 8th, 1932, at 10 o’clock A. m., at the office of Mr. Arthur Kahr, 149 Broadway, N. Y. C. The balance of purchase price over first mortgage to be paid all in cash.
‘ CHARLES WOLF.”

In order for the plaintiff to succeed, it is obviously necessary that the above memorandum should satisfy the Statute of Frauds. This it does not do, for the reason that the memorandum does not identify Wolf as a contracting party. Nowhere in the memorandum does Wolf identify himself with the transaction otherwise than as the recipient of the sum of $500, for which he is giving a receipt On account of the purchase price. If, in addition to receipting for the money, Wolf had assumed to act as the seller, the memorandum would have been sufficient, because then it would have identified by name the parties to the transaction, namely, a seller and a buyer. (Mentz v. Newwitter, 122 N. Y. 491; American Law Institute, Restatement of the Law of Contracts, § 207.) In such a ease, unless the contract is under seal, paroi evidence may be introduced to show that one of the parties was acting as an agent for an undisclosed principal, and the latter may sue and be sued. (Langstroth v. Turner Cypress Lumber Co., 162 App. Div. 818; affd., 220 N. Y. 706.) Essential it remains, however, that the agent shall bind himself as principal, if the writing does not identify the principal behind him." (Irvmor v. Rodewald, 253 N. Y. 472, at p. 475.) In the case at bar the memorandum does not mention the name of the principal, nor does it bind the agent as a party to the contract. The only contracting party identified is the purchaser. The name of the seller is nowhere to be found. The memorandum, therefore, does not satisfy the Statute of Frauds (Real Prop. Law [Cons. Laws, ch. 50], § 259), and the defense that a contract for the sale of real property to be enforceable must be in writing and subscribed by the vendor or by a duly authorized agent is valid. (Irvmor v. Rodewald, supra; see Ward v. Hasbrouck, 169 N. Y. 407.)

It appears, moreover, that the plaintiff corporation had no dealings with Wolf and that the latter did not know of its existence, having dealt only with Leroy Rand as an individual.

In Garvey v. Jarvis (46 N. Y. 310, at p. 313) the court said; It has been held, that where A does an act as agent of B, without any communication with C, the latter cannot afterward, by adopting it, make A his agent, and thereby incur any liability or take any benefit under the act of A. (Wilson v. Tumman, 6 Mann. & Gran. 236.) ”

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

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

Judgment accordingly.


author: Lehman, J.

text:
    In the Matter of Tilly Levy, Appellant, against The Board of Standards and Appeals of the City of New York et al., Respondents.

      (Argued April 16, 1935;
    decided May 21, 1935.)

      Reginald S. Hardy, Gardiner Conroy and Murray Riskin for appellant.

      Henry F. Cochrane for T. H. Fraser Mortgage Corporation, respondent.

      Paul Windels, Corporation Counsel (Paxton Blair of counsel), for Board of Standards and Appeals et al., respondents.
   Lehman, J.

The owner of a vacant lot at the southwest corner of Atlantic avenue and Boerum place in the borough of Brooklyn applied to the Board of Standards and Appeals for permission to erect and maintain a gasoline service station. The premises have a frontage of fifty-seven feet on Atlantic avenue and approximately eighty feet on Boerum place. The rear twenty-five feet of the premises is in an unrestricted district; all the remainder of the premises is in a business district, and under the restrictions imposed by the zoning ordinance no gasoline service station may be erected or maintained there.. The Board of Standards and Appeals, after a hearing and personal inspection of the premises, has granted the application for a variation from the general restrictions,

The present owner purchased the premises in 1931, The owner tore down three old buildings then on the premises. The rental which could be obtained from these buildings was too small to cover repairs, taxes and other carrying charges. Probably it was good business judgment to tear down these buildings. The Board of Standards and Appeals in their return state that a committee of the Board reported that After a careful survey of the neighborhood, the Committee is of the opinion that the petitioner has justified his basis of hardship, both Atlantic avenue and Boerum place being heavily trafficked streets, with trolley tracks on each street and that a commercial use of this corner would not be good judgment.” We assume that the survey by the Board, supplementing the photographs and other evidence produced at the hearing, justify the finding that a commercial use of this corner would not be good judgment,” We assume also that upon this record the Board could find that the most profitable improvement of these premises would be the erection of a gas station. Indeed, it may be that the premises cannot at present be profitably put to any other use. The question remains whether, upon such findings, the Board of Standards and Appeals had power to grant the desired variation,

The Board may act upon its own knowledge of conditions or may make its own survey. In that event, however, it must set forth in its return the facts known to its members but not otherwise disclosed.” (People ex rel. Fordham, M. R. Church v. Walsh, 244 N. Y. 280, 287.) The court will not interfere with the exercise of judgment by the Board where the record discloses a basis for the exercise of judgment, but in the return there must be disclosure of facts upon which a reviewing court Can determine that, under the statute, the Board had power to grant a variation and that there was scope for the exercise of such judgment.

The only facts disclosed by this record relate to the conditions in the district where the property is situated. So far as appears, they apply to all pieces of property in the neighborhood which front on Atlantic avenue and which are subject to the general rules restricting the use of premises in a business district. True, the premises for which a variation of the general restrictions is asked lie partly in an unrestricted district, but it is not shown, and the Board has not found, that this circumstance adds to the hardship under which all the owners of property in that neighborhood, subject to the same restrictions, labor.

A restriction upon the use of property, which excludes not only the most profitable use but also any other use consonant with good judgment, unquestionably causes hardship to an owner. Such a restriction, created by statute or ordinance, may indeed exceed the legislative power of the State and be void. (Cf. Dowsey v. Village of Kensington, 257 N. Y. 221.) Here, however, the owner does not challenge the validity of the general restrictions created by the zoning ordinance. He asks for dispensation from the letter of such restrictions, otherwise applicable to his property. The zoning ordinance provides that Where there are practical difficulties or unnecessary hardships in the way of carrying out the strict letter of the provisions of this resolution the Board of Appeals shall have power in a specific case to vary any such provision in harmony with its general purpose and intent, so that the public health, safety and general welfare may be secured and substantial justice done.” (New York Code of Ordinances, Appendix B, Amended Building Zone Resolution, § 21.) In this proceeding the owner invokes the exercise of that power. We cannot find in this record facts which bring the owner’s application within the scope of that power.

The power to grant in a specific case a variation or dispensation from a provision of a zoning ordinance is subject to express hmitations and to hmitations clearly implicit in the ordinance. No power has been conferred upon the Board of Standards and Appeals to review the legislative general rules regulating the use of land. (Dowsey v. Village of Kensington, supra.) The Board does not exercise legislative powers. It may not determine what restrictions should be imposed upon property in a particular district. It may not review the legislative general rules regulating the use of land. It may not amend such general rules or change the boundaries of the districts where they are applicable. Its function is primarily administrative. It has been intrusted only with power to grant a variation in specific cases where strict enforcement of the letter of the restriction would cause practical difficulties or unneccessary hardship. Even then it may act only where the variation is in harmony with the general intent of the zoning restrictions so that the public health, safety and general welfare may be secured and substantial justice done.” When it acts, “ general rules are suspended for the benefit of individual owners, and special privileges established.” (People ex rel. Fordham M. R. Church v. Walsh, 244 N. Y. 280, 290.) That it may do only where the individual owner shows that the restriction causes him a peculiar hardship and that a special privilege ” may be granted for his benefit without injury or injustice to others. (Matter of Young Women’s Hebrew Assn. v. Board of Standards & Appeals, 266 N. Y. 270.) Only where the burden of a general restriction creates a special hardship upon a particular owner, can the grant of a special privilege to him, in truth, promote equal justice. That is not shown here. The Board of Standards and Appeals has granted a variation upon proof and finding of hardship due to general conditions existing in the neighborhood which may call for the exercise of legislative action in amending the rule but from which exemption cannot be granted by an administrative board. Its power is confined to relief in proper case from hardship unnecessarily caused by application of a general restriction to a particular piece of land. It may not destroy the general restriction by piece-meal exemption of pieces of land equally subject to the hardship created in the restriction, nor arbitrarily grant to an individual a special privilege denied to others.

Relief from general rules which are shown to be unwise by experience or change of conditions must be through appeal to the legislative authority, or in extreme cases where the rule has become confiscatory, by challenge in the courts to the continued validity of the rule. (Municipal Gas Co. v. Public Service Comm., 225 N. Y. 89; Abie State Bank v. Bryan, 282 U. S. 765.) There can be no relief in such case by appeal to an administrative board vested with limited powers.

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.

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

Ordered accordingly.


text:
    In the Matter of the Claim of Emma Seymour, Respondent, against Odd Fellows' Home et al., Appellants. State Industrial Board, Respondent.
    (Argued April 17, 1935;
    decided May 21, 1935.)

      Noel S. Symons and Gustave H. Unfug for appellants.

      John J. Bennett, Jr., Attorney-General (Roy Wiedersum of counsel), for State Industrial Board, respondent.
   Finch, J.

The widow of Ernest Seymour has been awarded compensation on account of his death while being maintained in the Odd Fellows’ Home. The award of the Industrial Board has been unanimously affirmed by the Appellate Division.

While Seymour was doing some carpentry work on the premises of the Odd Fellows’ Home he slipped from a ladder and received injuries from which he died shortly thereafter. Before the Industrial Board, the defendant urged that death did not result from accidental injury and did not occur in the course of employment. The sole ground urged on this appeal is that • decedent was an inmate and not an employee, that there was no contract of hire between this inmate and the home, as the term “ hiring ” is commonly understood, and that, in any event, the Industrial Board erred in including the appraised value of the board and maintenance of the deceased as an element in fixing the wage rate. It appears that the inmates of the home are granted the privilege of doing odd jobs for which they are given sums ranging from ten to twenty cents an hour. No regular hours of work are required and the inmates, if they wish, need not work at all. The deceased elected to do some carpentry and other work. For this he received twenty cents an hour, which in the period from July, 1931, to January, 1932, amounted to $120.

It is clear that the board and maintenance of the decedent should not have been included as an element in fixing the wage rate. Board and maintenance were not given by the home nor received by the inmate as compensation for services rendered. Seymour, as an inmate of the home, was given board and maintenance whether he worked or not, and there is no evidence whatsoever in the record tending to show that be received it as recompense for any work therein performed. In any event, therefore, the wage rate must be reduced by the amount of $30 a month which the Industrial Board awarded and added to the wage rate as the value of- board and maintenance.

Furthermore, no contract of employment between the Odd Fellows’ Home and this inmate can be found upon this record. In Matter of Hall v. Salvation Army (261 N. Y. 110) we called attention to the distinction between an inmate of a home, such as a cook in that case, who was employed to prepare three meals a day, and an inmate of a home who is admitted as a matter of charity and permitted to remain on condition that he will perform some labor in and about the home but is not employed therein to render work “ under any contract of hire, express or implied.” (Ferro v. Sinsheimer Estate, Inc., 256 N. Y. 398.)

It is to be noted that this decedent not only did not work any regular hours but was under no duty to work at all, if he did not so desire. Nor was decedent upon any payroll; nor was there any agreement as to how frequently he would work; nor was there any exercise of control over him by the home. If and when he worked, as he pleased, he received a gratuity of twenty cents an hour, but there is no evidence that this was given other than as pin money. When a man enters a home he is not seeking a new field of employment. The fact that the institution provides him with a method of whiling away his time and bestows upon him gratuities wherewith to make small purchases for his individual indulgence, by way of a daily newspaper, tobacco or the like, does not mean that he has become its employee. A small gratuity for such occasional work does not constitute a wage base.

It is urged that the carrier waived before the Industrial Board the defense which it now urges. This record, however, is barren of any evidence legally preventing the carrier from asserting its defense on the merits.

It follows that the order of the Appellate Division and the award of the State Industrial Board should be reversed, and the claim dismissed, with costs in all courts.

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

Ordered accordingly.