text:
    In the Matter of the Accounting of Benjamin Goldberg et al., as Executors of Abraham Goldberg, Deceased. Pauline Goldberg, Appellant; Henry C. Turner, as Special Guardian for Paul I. Denver, an Infant, et al., Respondents.
    Argued May 20, 1937;
    decided July 13, 1937.

      Victor Levin and Maurice Brandt for appellant.
    The subsequent marriage of the decedent to the appellant revoked the testator’s pre-nuptial will by virtue of the provisions of section 35 of the Decedent Estate Law (Cons. Laws, ch. 13), as amended by chapter 459 of the Laws of 1932. (Matter of Gaffken, 114 Misc. Rep. 693; 197 App. Div. 257; 233 N. Y. 688; Matter of Holmes, 147 Misc. Rep. 394; Matter of Tierney, 148 Misc. Rep. 378; Matter of Carnevale, 248 App. Div. 62; Matter of Snopek, 149 Misc. Rep. 665; Lathrop v. Dunlop, 4 Hun, 213; 63 N. Y. 610; Matter of Kelly, 254 N. W. Rep. 437; Hudnall v. Ham, 183 Ill. 486; Clevenger v. Stewart, 215 Ky. 432; Matter of Craft, 164 Penn. St. 520; McAnulty v. McAnulty, 120 Ill. 26; Lawman v. Murphey, 321 Ill. 421; Barlow v. Barlow, 233 Mass. 468; Francis v. Marsh, 54 W. Va. 545; Bagley v. Bagley, 110 Ore. 368; Hauck v. Anderson, 14 Ariz. 502.) The oral agreement was void, being in violation of the Statute of Frauds, and it was not taken out of the statute by sufficient part performance. (Hunt v. Hunt, 171 N. Y. 396; Gooding v. Brown, 35 Hun, 148; Caton v. Caton, 1 Ch. 137; 2 H. L. 127; Hughes v. Hughes, 193 Pac. Rep. 144; Stevenson v. Pantalcone, 21 Pac. Rep. [2d] 703; O’Brien v. O’Brien, 197 Cal. 577; Canada v. Ihmsen, 240 Pac. Rep. 927; Moultrie v. Hunt, 23 N. Y. 394; March v. March, 222 App. Div. 825.) The widow was not estopped from taking under the statute. (Carpenter v. Cornings, 51 Hun, 638; Lamb v. Lamb, 18 App. Div. 250; Graham v. Graham, 143 N. Y. 573; Matter of Brown, 153 Misc. Rep. 282; Sheldon v. Bliss, 8 N. Y. 31; Matter of Trevor, 209 App. Div. 1; Matter of Hayman,
      136 Misc. Rep. 199; 229 App. Div. 853; 256 N. Y. 557; Stewart v. Stewart, 7 Johns. Ch. 229.)

      Harold I. Cohen, I. Gainsburg and Philip Twersky for executors, respondents.
    The complete execution of the antenuptial agreement by both parties is sufficient to avoid the bar of the Statute of Frauds. (Adams v. Swift, 169 App. Div. 802; Mutual Life Ins. Co. v. Holloday, 13 Abb. N. C. 16; Lyons v. The Maccabees, 192 App. Div. 109; Miller v. Sire, 224 Fed. Rep. 424; Matter of Kilcourse, 244 App. Div. 755; Dygert v. Remerschnider, 32 N. Y. 629.) Under the statute as it formerly read no revocation arose as a consequence of the marriage subsequent to the execution of the will. (Matter of Scolpino, 231 App. Div. 690; Matter of De Coppet, 142 Misc. Rep. 816; Matter of Neufeld, 145 Misc. Rep. 442.) Section 35 of the Decedent Estate Law, in that it requires the antenuptial agreement to be in writing, is no other than the expression of section 31 of the Personal Property Law (Cons. Laws, ch. 41) to the effect that agreements in consideration of marriage must be in writing. (Miller v. Sire, 224 Fed. Rep. 424.) The execution of the will and the subsequent marriage of the parties, pursuant to the oral antenuptial agreement, is sufficient to rebut the presumption of revocation of the testator’s will. (Matter of Lant, 95 Penn. St. 279; Matter of Craft, 164 Penn. St. 520; Hudnall v. Ham, 183 Ill. 486; Biggerstaff v. Biggerstaff, 95 Ky. 154; McAlpine v. McAlpine, 116 Me. 321.) The amendment to section 35 of the Decedent Estate Law did not and could not, without constitutional infringement, give the appellant any rights in derogation of the vested contract rights which the testator and his estate had already acquired at the effective date of its enactment. (Ralph v. Cronk, 241 App. Div. 907; 266 N. Y. 428; Davis v. Supreme Lodge, 165 N. Y. 159; McGahey v. Virginia, 135 U. S. 662; Collidge v. Long, 282 U. S. 582; Edwards v. Kearzey, 96 U. S. 595; Tennessee v. Sneed, 96 U. S. 69; Louisiana v. New Orleans, 102 U. S. 203; Walker v. Whitehead, 16 Wall. 314.)
   Crane, Ch. J.

This appeal brings up for review the effect of section 35 of the Decedent Estate Law (Cons. Laws, ch. 13), as amended by chapter 459 of the Laws of 1932, upon a will executed on June 6, 1930, twelve days before Abraham Goldberg the testator and Pauline Goldberg were married. The testator died on April 1, 1933, about a year after the amendment to section_ 35 of the Decedent Estate Law. The will was made pursuant to an oral ante-nuptial agreement and with a view to obtaining the consent of the woman to the marriage. This agreement to marry and to make a will was not in writing. It rests entirely upon oral testimony. If it were a valid agreement, in view of section 31, subdivision 3 of the Personal Property Law (Cons. Laws, ch. 41), binding upon both parties, a subsequent statute passed almost two years later making such an agreement void would, no doubt, be unconstitutional. . We must first consider, therefore, the effect of this oral arrangement in the light of the Personal Property Law.

Abraham Goldberg, a widower in his sixties, and one Pauline Silverstone were brought together through the offices of a marriage broker some six months before their marriage. Property was a subject of discussion. Goldberg agreed to make a will giving to Mrs. Goldberg $5,000. Twelve days before their marriage he executed such a will which reflected the agreement. The part which interests us reads as follows:

9. I hereby give and bequeath unto Pauline Silver-stone, the sum of Five thousand ($5,000.00) Dollars, provided however the said Pauline Silverstone shall become my wife. It is my intention that if, for any reason whatsoever the said Pauline Silverstone shall not join me in marriage and shall not become my lawful wife, that then, in that event, the said bequest of Five Thousand ($5,000.00) Dollars to her given by the terms of this will shall not be paid to' her, but shall become part of my residuary estate and shall be disposed of as is provided in paragraph ‘ 11 ’ of this will. In the event the said Pauline Silverstone shall join me in wedlock, the provision herein to the said Pauline Silverstone, as aforesaid, I hereby declare is intended to be and is so given to her in full satisfaction and in lieu of and for her dower which she may or can in anywise claim or demand out of my estate.”

The parties, as I have stated, were married twelve days after the making of this will. Goldberg died on April 1, 1933, and thereafter his widow elected to take her distributive share in the decedent’s estate, as provided under section 35 of the Decedent Estate Law, as amended in 1932. The question was raised upon proceedings to settle the account of the executors in the Surrogate’s Court, the appellant filing a cross-petition praying for a construction of the will of said Abraham Goldberg.

The Decedent Estate Law, as amended by the Laws of 1932, chapter 459, in effect March 28, 1932, provides in section 35 as follows:

Revocation by marriage. If after making any will, such testator marries, and the husband or wife survives the testator, such will shall be deemed revoked as to such survivor, unless provision shall have been made for such survivor by an ante nuptial agreement in writing: * * * No evidence to rebut such presumption of revocation shall be received, except to show the existence of such ante nuptial agreement. This section as amended shall apply only to wills executed prior to September first, nineteen hundred thirty; and wills executed after such date shall not be affected in any way by the provisions of this section as heretofore contained herein or as amended.”

As above stated, if this section applies to the facts of this case the widow is entitled to her distributive share, as the will was revoked as to her by the subsequent marriage. All the provisions of this section fit exactly into the facts of this case. After the making of the will Goldberg, the testator, married Pauline Silverstone, who became Mrs. Goldberg. The will thereupon was revoked as to her unless provision shall have been made for such survivor by an ante nuptial agreement in writing.” There was no ante-nuptial agreement in writing. The presumption of revocation could not be rebutted or overcome by testimony showing an oral ante-nuptial agreement. The presumption of revocation is conclusive, and made so by the statute. All the evidence in this case, taken before the referee to show the oral ante-nuptial agreement, was of no effect and could not reinstate the will. The widow, therefore, would be entitled to her distributive share unless this section 35 is unconstitutional, as applicable to this oral ante-nuptial agreement.

The respondent insists that this oral agreement was legal and enforceable in spite of the provisions of section 31 of the Personal Property Law, commonly known as the Statute of Frauds. Familiarity with the section never justifies the omission of its exact words.

§ 31. Agreements required to be in writing. Every agreement, promise or undertaking is void, unless it or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith, or by his lawful agent, if such agreement, promise or undertaking: * * *

“ 3. Is made in consideration of marriage, except mutual promises to marry.”

The agreement of Goldberg to make a will was in consideration of marriage and unenforceable. He made a will, but this did not take effect and could not take effect until his death. Any t me before his death he could change his will, make a new will. These are elementary propositions of law known to everyone. Why could he not make a new will in this case? What was bind'ng upon him that prevented him from making a new will or revoking the one he had made? It was the implied or understood agreement with Mrs. Goldberg that he would not revoke his will or make a new one. This is the force and effect which the respondent would give to the ante-nuptial agreement, not merely that he would make a will. This in itself amounted to very little, if anything. The agreement valuable to Mrs. Goldberg was the restraint which Goldberg impliedly put upon himself not to revoke the will. This was the moving consideration, and void because not reduced to writing. At any time after June 6,1930, the date of the will, and April 1,1933, when it was to take effect through Goldberg’s death, he was free to change it. The only thing which could possibly prevent was his implied agreement not to change it, and this was void as not being in writing. There was no other consideration, as the marriage itself constitutes no part performance of an oral ante-nuptial contract so as to take it out of the operation of the Statute of Frauds. (Hunt v. Hunt, 171 N. Y. 396.)

The making of the will in itself, the mere signing of a paper, having no effect until death, was no part performance of a contract or agreement not to revoke it. We must not confuse the making of a will with those acts which are complete in themselves and constitute performance or part performance, such as the giving of a deed, the transfer of securities or the release of rights or obligations having present effect. A contract not to revoke a will or to make a will may be enforced even when not in writing if there has been a change in the position of the parties, other than through marriage, but no such change takes effect and nothing is parted with by making a will which in and of itself accomplishes nothing until death.

A will speaks from the date of death, not from the date of its execution. This is the view which has previously been taken. In Gooding v. Brown (35 Hun, 148, 150), Judge Bradley, with whom concurred Judge Haight, both subsequently members of this court, said: “ The fact that the plaintiff executed a will does not establish performance of the contract on his part so as to divest himself of any rights of property, nor did it place him in a situation from which he could not retreat without prejudice to any rights existing at the time the agreement was made.”

In Caton v. Caton (1 Ch. 137,147; affd. on appeal, 2 H. L. 127) the court, in writing upon facts similar to those here, said: “ The preparing and executing of the will caused no alteration in the position of the lady, and I presume it will not be argued that any consequence can be attached to acts of part performance by the parties sought to be charged. * * * As a will is necessarily until the last moment of life revocable, a contract to make any specified bequest, even when a will having that effect has been duly prepared and executed, is in truth a contract of a negative nature — a contract not to vary what has been so prepared and executed. I do not see how there can be part performance of such a contract.” (See, also, Gould v. Mansfield. 103 Mass. 408, and Canada v. Ihmsen, 33 Wyo. 439.)

The courts below have decided in respondents’ favor solely upon the theory that the making of the will was part performance within the Statute of Frauds and, therefore, created an enforceable contract. In this we think they were in error for the reason stated. We cannot follow all the reasoning in Adams v. Swift (169 App. Div. 802), a case in which Judge McLaughlin, subsequently of this court, dissented. The case of Ralph v. Cronk (266 N. Y. 428) related to a contract which was valid before the amendment to the Personal Property Law in 1933.

We, therefore, conclude that section 35 of the Decedent Estate Law, as amended, applied to the facts of this case; that Goldberg’s will was revoked by his subsequent marriage; that his widow is entitled to her distributive share of his estate, and is not denied these rights by reason of the provision in her favor in said will.

The order of the Appellate Division and the decree of the Surrogate’s court should be reversed and the proceed-mg remitted to the Surrogate’s Court for disposition in accordance with this opinion, with costs to the appellant in all courts payable out of the estate.

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

Ordered accordingly.


source: Caselaw Access Project

author: Rippey, J.

license: Public Domain

text:
    Fidelity and Casualty Company of New York, Respondent, v. Farmers National Bank of Hudson, New York, Appellant.

      Argued May 27, 1937;
    decided July 13, 1937.

      Robert E. Whalen and William C. Hawver for appellant.
    The Appellate Division misconstrued and misapplied the provisions of sections 73 and 153 of the charter (L. 1921, ch. 669), which prescribe the procedure to be followed in paying drafts drawn upon the city treasurer. (Ætna Nat. Bk. v. Fourth Nat. Bk, 46 N. Y. 82; Goodwin v. American Nat. Bank, 48 Conn. 550; Newburyport v. Spear, 204 Mass. 146.) Issuance of certificates of deposit to the treasurer involved no breach of the depository contract. (Allen v. Puritan Trust Co., 211 Mass. 409; Clarke v. Pub. Nat. Bk. & Tr. Co., 259 N. Y. 285; Sagone v. Mackey, 225 N. Y. 594; Whiting v. Hudson Tr. Co., 234 N. Y. 394; Empire Tr. Co. v. Cohan, 274 U. S. 473; United States Fid. & Guar. Co. v. Metropolitan Nat. Bank, 1 Fed. Supp. 514; Poorman v. Woodward, 21 How. 266; Peoples Bank v. Int. Fin. Corp., 30 Fed. Rep. [2d] 46; People v. Merchants Tr. Co., 116 App. Div. 41; 187 N. Y. 293; Casey v. Kastel, 237 N. Y. 305; Bischoff v. Yorkville Bank, 218 N. Y. 106.) The city could not have recovered, nor can plaintiff as its assignee or subrogee recover, for moneys abstracted by the treasurer from the cemetery commission accounts. (United States

      Fid. & Guar. Co. v. Metropolitan Nat. Bank, 1 Fed. Supp. 514; People v. Fields, 58 N. Y. 491; Gunnison v. Bd. of Education, 176 N. Y. 11.) The city’s failure to comply with sections 75 and 151 of its charter estops it, and plaintiff as its assignee, from recovering herein. (Owings v. Speed, 5 Wheat. 420; Handley v. Stutz, 139 U. S. 417; Moss v. Averell, 10 N. Y. 449; Power v. Village of Athens, 99 N. Y. 592; Jackson v. Miller, 6 Cow. 751; Matter of Loughran v. Markle, 242 App. Div. 331; 266 N. Y. 601; Larkin v. Nassau El. R. R. Co., 205 N. Y. 267; Vandeweghe v. City of New York, 150 Misc. Rep. 815; 242 App. Div. 762; Critten v. Chemical Nat. Bk., 171 N. Y. 219; National Surety Co. v. Manhattan Co., 252 N. Y. 247; Potts & Co. v. Lafayette Nat. Bk., 269 N. Y. 181; Empire Trust Co. v. Cahan, 274 U. S. 473.) The bank had neither actual knowledge nor constructive notice of the treasurer’s defalcations, nor did it participate therein to its direct benefit. (Rodgers v. Bankers Nat. Bank, 179 Minn. 197; Clarke v. Public Nat. Bk. & Tr. Co., 259 N. Y. 285; Bischoff v. Yorkville Bank, 218 N. Y. 106; Cheever v. Pittsburgh R. R. Co., 150 N. Y. 59; American Surety Co. v. Waggoner Nat. Bk., 83 Fed. Rep. [2d] 99; Potts & Co. v. Lafayette Nat. Bk., 269 N. Y. 181; United States Fid. & Guar. Co. v. Metropolitan Nat. Bank, 1 Fed. Supp. 514; Whiting v. Hudson Trust Co., 234 N. Y. 394; Oelbermann v. National City Bank, 79 Fed. Rep. [2d] 534; 298 U. S. 638; Bank of Vass v. Arkenburgh, 55 Fed. Rep. [2d] 130.) The judgment upon the Appellate Division’s order mulcts defendant for interest in amounts far beyond what, if anything, would be recoverable. (Cragie v. Hadley, 99 N. Y. 131; Bischoff v. Yorkville Bank, 218 N. Y. 106; Howell v. Adams, 68 N. Y. 314; Bank of British North America v. Merchants Nat. Bk., 91 N. Y. 106; Cottle v. Marine Bank, 166 N. Y. 53; Kaufman v. Tredway, 195 U. S. 271; Sickles v. Herold, 149 N. Y. 332; Lewine v. National City Bank, 222 App. Div. 74; 248 N. Y. 365; Tuzzeo v. American Bonding Co., 226 N. Y. 171; Miller v. Robertson, 266 U. S. 243.)

      Charles B. Sullivan and Warner M. Bouck for respondent.
    Defendant wrongfully permitted the treasurer to withdraw moneys to his own use from cemetery accounts. (Critten v. Chemical Nat. Bank, 171 N. Y. 219; Seaboard Nat. Bank v. Bank of America, 193 N. Y. 26; Shoe Lasting Machine Co. v. Western Nat. Bank, 70 App. Div. 588; Fidelity & Deposit Co. v. Queens Co. Trust Co., 226 N. Y. 225; State v. Citizens Nat. Bank, 91 Ind. App. 106.) The duty owed by the bank to the city respecting the custody of city funds was not only the duty owed generally by a depository bank to the cestui que trust of a private trust, but also the duty arising under its express contract with a city by reason of its designation as a statutory depository. (Bischoff v. Yorkville Bank, 218 N. Y. 106; Fidelity & Deposit Co. v. Queens Co. Trust Co., 226 N. Y. 225; Holden v. New York & Erie Bank, 72 N. Y. 286; Allen v. Puritan Trust Co., 211 Mass. 409; Mitchell v. First Nat. Bank, 203 Ky. 770; Underwood, Ltd., v. Bank of Liverpool, [1924] 1 K. B. 775.) Defendant could not assume that the treasurer had authority to “ transfer funds from one account to another,” when he was transferring funds, which the bank knew were required to be held by the city, in the “ perpetual care trust ” to the general fund account. (Holden v. New York & Erie Bank, 72 N. Y. 286; Clark v. Sheldon, 134 N. Y. 333; Cincinnati v. Roettinger, 105 Ohio St. 145; Leffingwell v. Scutt, 221 App. Div. 462.) The Appellate Division properly held that no estoppel arose by reason of any failure upon the part of the Common Council or other city officials to take steps to discover the peculations. (Gilliland v. Lincoln Alliance Bank & Tr. Co., 145 Misc. Rep. 827; 239 App. Div. 68; 264 N. Y. 517; Village of Fort Edward v. Fish, 156 N. Y. 363; County of Erie v. Town of Tonawanda, 95 Misc. Rep. 663; 176 App. Div. 942; People v. Santa Clara Lumber Co., 213 N. Y. 61; Wells v. Johnston, 171 N. Y. 324; Litchfield v. Bond, 186 N. Y. 66; Ontario Knitting Co. v. State, 205 N. Y. 409; Filor v. United States, 9 Wall. 45; Board of Supervisors v.
      Ellis, 59 N. Y. 620; Wagner Trading Co. v. B. P. Nat. Bank, 228 N. Y. 37; Critten v. Chemical Nat. Bank, 171 N. Y. 219; Benedict v. Arnoux, 154 N. Y. 715.) Interest was properly allowed as damages on the amount of each item from the date of conversion. (Ferris v. Hard, 135 N. Y. 354; Hamilton v. Van Rensselaer, 43 N. Y. 244; Holden v. New York & Erie Bank, 72 N. Y. 286; Bischoff v. Yorkville Bank, 218 N. Y. 106; Wagner Trading Co. v. Battery Park Nat. Bank, 228 N. Y. 37.)
   Rippey, J.

Plaintiff in this action was a surety on the official bonds of Charles J. West, City Treasurer of the city of Hudson, New York, covering four of his terms of office as City Treasurer, which began on January 1, 1923, and expired December 31,1931. During that period until April 30, 1930, defendant was the duly designated depository of the funds belonging to the city. Between the dates mentioned, West misappropriated moneys which belonged to the city and came into his hands as City Treasurer in excess of $211,183.93, for which the city was not reimbursed by West. On November 11, 1932, plaintiff, by reason of its liabilities on its bonds, paid to the city on account of such misappropriation the sum above mentioned, and thereupon, by subrogation and through assignment by the city, became owner of whatever claim the city had for reimbursement for the misappropriated funds. It brought this action to recover $73,342.86, with interest from defendant, the same being a part of the misappropriations. The case was tried before a court without a jury, and upon findings of fact the complaint was dismissed. The Appellate Division reversed the judgment dismissing the complaint, reversed and modified certain findings of the trial judge, made new findings and awarded plaintiff judgment for $58,415.51, which with interest and costs amounted to $92,335.27, and it is from that judgment that defendant appeals to this court. From the record it appears that the findings of fact made or approved by the Appellate Division are sustained by the evidence.

Defendant was selected after competitive bidding as depository of the public moneys of the city for a term of three years commencing May 1, 1923, from among the banking houses of the city which, pursuant to the provisions of section 152 of the city charter (Laws of 1921, ch. 669) were required to file sealed proposals, it being determined by the Common Council that defendant’s bid was the most advantageous to the city. In its proposal the charter provided that it should state the rate of interest which it would pay to the city on the total daily balances standing to the credit of the city After selection and notification of its selection and before it could receive any moneys belonging to the city, defendant was required by section 153 of the city charter to execute, acknowledge and deliver to the City Clerk a bond running to the city and “ conditioned that such depository shall faithfully keep such deposits, and shall on the last day of each month pay and account for the interest on such daily balances, at the rate in such accepted proposals stated, and shall faithfully pay all such orders as shall be drawn upon the treasurer of the city, and shall pay the same only on the order of the officials du y authorized, and at the end of the term wil faithfully pay over to its or their successor all moneys that shal remain in its or their hands belonging to the city.” Defendant’s bond was executed on April 30 1923, and contained the following condition: The condition of ths obligation is such that if the principal shall during the term of this bond faithfully account for and pay on legal demand all moneys deposited with it by or on behalf of the said obligee, and shall not suspend payment during the term hereof, and shall faithfully keep ’ such deposits, and shall on the last day of each month pay and account for the interest on such daily balances, at the rate of 3.86 per cent, and shall faithfully pay all such orders as shall be drawn upon the Treasurer of the City, and shall pay the same only on the order of the officials duly authorized, and at the end of the terna will faithfully pay over to its or their successors all moneys that shall remain in its or their hands belonging to the City, this obligation shall be null and void.” After similar procedure defendant was designated for the three-year term- commencing May 1, 1926, and again for the three-year term commencing May 1, 1929, as city depository, and filed other bonds containing the same condition, except that it agreed to pay interest at the rate of 4.05 per cent. Section 70 of the charter provides that the City Treasurer shall be the custodian of all the moneys and property which the city may by any means receive. By section 71 of the city charter, the City Treasurer was required to deposit all moneys held by him as such City Treasurer in the designated depository. Under section 74 of the charter the City Treasurer was required to receive all funds given or bequeathed to the city to be used in the care and maintenance of cemetery lots or in the general care of the cemeteries of the city, and by sections 317 and 318 he was custodian of all moneys arising from the operations of the Commission of Cemeteries.

Section 73 of the city charter provides fully and in detail as to how sums may be paid out. That section provides that the Treasurer “ shall pay out said moneys only upon drafts signed by the mayor and countersigned by the city clerk to pay audits and allowances by the common council, and by the officer or by the president of any board or commission entitled to draw the same and countersigned by its secretary. * * * The city treasurer shall prepare and furnish to the mayor and each officer, commission or board, who shall have money on deposit with him, uniform form of draft to be used by each of the same for the purposes herein provided, and no officer, commission or board shall use any other form of draft for the purpose of drawing funds from the city treasury.” There is further provision that the drafts shall be numbered consecutively with stubs to be bound in book form upon which the date, amount and purpose of the draft and the name of the payee are required to be inserted. These requirements appear to have been complied with by the Treasurer except in cases where he misappropriated city funds. These provisions as to payment of money by the City Treasurer were mandatory; it was provided that no draft should be paid unless it contained the information, signatures and auditing required.

Misappropriation of moneys belonging to the city through transactions with the defendant affected five accounts maintained in the bank by the City Treasurer: (1) General fund account; (2) perpetual care trust, cemetery, account No. 3103; (3) cemetery maintenance trust, account No. 3104; (4) interest, cemetery, account No. 3105, and (5) interest accrued, perpetual care, account No. 3106, all of which were continuous running accounts.

$37,776.93 was withdrawn from accounts 2 to 5 above between December 11, 1925, and May 2, 1930, inclusive, by means of seventeen checks, none of which contained the signature or countersignature of any city official other than West. The form of drafts required by section 73 of the charter was not used. The items were either paid in cash or drafts were issued to fictitious persons or transfers were made to West’s personal account. The last dollar contained in each of those four cemetery accounts was withdrawn by West on May 2, 1930. There was no record on the City Treasurer’s books of the withdrawal of any of the items.

$20,383.51 of the amount awarded plaintiff constituted city moneys collected by West but not deposited in any account with defendant as required by the city charter. The total was made up of some forty-four items ranging from $20 as the lowest to $2,782 as the highest, and the amounts were diverted between February 8, 1924, and September 11, 1929. Each of these items was collected by West and taken to defendant’s bank, which received it and issued to West a certificate of deposit. Each certificate of deposit was cashed shortly after its issuance. The proceeds of a portion of the certificates found their way into West’s personal account with the bank, but the cash paid for many could not be traced. By the methods indicated West was able to convert taxpayers’ checks, payable to the City Treasurer, into certificates of deposit which could be cashed without records of the conversions appearing in the city accounts which were carried by the bank. The balance of the amount recovered represents interest of $255.80 which the city should have received if the above-mentioned non-interest-bearing certificates of deposit had not been issued and the moneys represented by them had been deposited as required by the charter in the city’s accounts.

Attention has been called above to the proposal made by the bank to become depository for the city funds, the acceptance of the proposal by the city, the bond given by the defendant and the applicable provisions of the charter of the city of Hudson. Those constituted the contract between the defendant and the city. As to all deposits, the relation of debtor and creditor existed and the bank could relieve itself from liability for not retaining the deposit and for not protecting the city from its loss only by payment upon the actual direction of the depositor (Seaboard Nat. Bank v. Bank of America, 193 N. Y. 26), in the form required by the contract. A check drawn upon the account, though signed by the City Treasurer, did not authorize payment by the bank. Defendant failed faithfully to keep deposits of city money or to pay out moneys in its hands on orders in the form required by the provision of the charter, in violation of the express terms of its contract. It was also bound to receive for deposit moneys delivered to it by the City Treasurer and to pay interest thereon, but the payment of interest was avoided by the issuance of non-interest-bearing certificates of deposit. Of course, the contract did not require the bank to follow through and investigate the purposes of and know that each expenditure made by the City Treasurer was for the account of the city and legitimate. But it was bound by its contract to know that the Treasurer was authorized to pay out the city’s moneys on deposit with it only on orders signed and countersigned by the required officers and in the form required by the contract. The City Treasurer was authorized under section 318 of the charter to convert certain of the funds in certain of the cemetery accounts arising out of the sales of lots into securities. The bank could not be required to see that withdrawn funds were used for that purpose. But withdrawal from those accounts, nevertheless, could only be Upon the “ uniform form of draft ” when signed by the mayor and countersigned by the city clerk ” and by the president of the Cemetery Commission and countersigned by its secretary. (Charter, § 73.) The income from the securities purchased, if any, was required to be deposited in the specifically earmarked accounts Nos. 4 and 5, above mentioned. But deposits of such income were made in other accounts, contrary to the terms of the contract.

A form of draft to meet the requirements of section 73 of the charter was adopted by the city before the contract with the depository was made. Drafts drawn on this form were used by the city during the period of the misappropriations and were paid by defendant when signed by the Treasurer and signed and countersigned by other city officials as required for legitimate city expenditures. The rule is well established that checks or drafts drawn upon accounts in the bank without being in the required form or having the required authorization must be deemed incomplete and improperly drawn ” where the bank knew or ought to have known, prior to the payment, of the required form and necessary signatures. Payment by the bank upon such incomplete and improperly drawn checks without inquiry as to their authenticity leaves it without defense for diversion of the funds when inquiry or knowledge would have prevented the loss. (Fidelity & Deposit Co. v. Queens County Trust Co., 226 N. Y. 225.) Such an irregular proceeding as the issuance to West of certificates of deposit for ordinary receipts of moneys belonging to the city and the subsequent cashing of such certificates or transferring the proceeds thereof and of other city moneys to West’s personal account definitely charged the bank with knowledge that such city funds were not being used for city purposes. When it received those moneys for which it issued certificates of deposit, it had notice that they belonged to the city and it then rested under the duty of seeing that they were placed in the city’s deposit accounts. By permitting West to make the withdrawals from the several accounts in the manner indicated and to apply the city’s moneys to his own use by way of certificates of deposit and otherwise as stated, the bank aided and abetted the thief in stealing the funds. It is not material that it did not knowingly participate in the theft. Its neglect of duty left the thief in position to steal and aided the misappropriation. (Cf. Potts & Co. v. Lafayette Nat. Bank, 269 N. Y. 181, 186.) It is claimed that the mere fact alone that the City Treasurer deposited the funds of the city in his own account or withdrew them in cash at infrequent or at isolated intervals might not charge the bank with liability for the diversion. (Clarke v. Public Nat. Bank & Trust Co., 259 N. Y. 285.) But that is not this case and we do not decide whether such a rule would apply to the acts of a public official. Here actual knowledge of the irregular methods and general practice adopted by the Treasurer to secure the funds by withdrawal, its violation of its contractual obligations to the city as above indicated and its participation in the diversion through the acquisition of the advantage of not being required to pay interest on moneys for which it issued non-interest-bearing certificates of deposit render the bank hable for the loss. (Bischoff v. Yorkville Bank, 218 N. Y. 106.) There was adequate notice to the bank from all the circumstances which reasonably supported the inference that misappropriation was intended by the Treasurer. Violation of its contract with the city was in aid of the conversion.

Appellant insists that the plaintiff is estopped to assert its claim here through the failure of the city to comply with sections 75 and 151 of the city charter. That defense was pleaded. Even were such a defense available to the defendant, the Appellate Division has found upon proof sufficient to sustain its finding that the defendant had failed to. establish any such defense. Section 75 of the charter requires the Treasurer to make a summary report to the Common Council at each monthly meeting thereof of all of his receipts or disbursements had or made subsequent to his last report and on what account and from what funds the same is chargeable or has been drawn against by the several officers, commissions or boards entitled to draw against the same, that each such report should be published once each month in the official papers and that on the 30th day of April in each year he shall file with the City Clerk, who shall present the same to the Common Council, an itemized account of his receipts and disbursements since his last annual report, and a statement of the financial condition of the city, the latter to be published once annually in the official newspapers. Section 151 of the charter makes the Common Council the board of auditors to examine the accounts with directions that they shall have the same powers and shall proceed in the same manner as prescribed by law for boards of town auditors in towns. The City Clerk, who took office February, 1932, testified that [although he had made a search for the audits during the period from May 1, 1923, to May 30, 1930, he had been unable to find any. Section 75 of the charter requires the reports of the Treasurer when examined and certified as correct by the Common Council, together with the vouchers relating thereto, to be filed by the City Clerk and to be by him preserved as a part of the city records for at least six years. In November, 1931, George A. Bold, an Examiner of Municipal Accounts for the State of New York, made an examination of the office of the Treasurer of the city of Hudson covering the period from January 1, 1920, to November 30, 1931. He testified that there were no records in the City Treasurer’s office with reference to the manipulation and payment of moneys by way of the certificates of deposit referred to or of the withdrawal of moneys from city funds by West for his own personal account. What information he got was derived principally from defendant and other sources. It is difficult to see what an audit such as is required by section 151 of the charter would have indicated with reference to the City Treasurer’s peculations. West could not be expected to leave any record or make any report which would incriminate himself.- At any rate, defendant failed to show notice to the city of the defalcations of the Treasurer by way of Treasurer’s reports, council audits or otherwise, and the lower courts have found that the city had no knowledge of the misappropriations or of the irregular transactions of West prior to November, 1931. Without knowledge or intimation that there was anything wrong with West or with his accounts, the city cannot be chargeable with acquiescence in the transactions of the City Treasurer, and the plaintiff, as subrogee and assignee, is not estopped to assert its claim through failure of other city officials to discover the misappropriations. Beyond that, the defendant failed to disclose to the city officials the methods by which West was handling the accounts or to disclose to them any of his irregular transactions. This is an action on contract, not in tortj and the defendant aided the wrongful act of the Treasurer. We know of no authority which holds that a wrongdoer may take advantage of his own wrongdoing to avoid a contract liability.

Appellant also claims that it should be chargeable with interest only from the date of the commencement of the action.' On April 30, 1930, another bank succeeded defendant as city depository. Up to that date defendant was obligated to pay out moneys in its hands only on the order and demand of the city. Defendant covenanted to turn over all moneys in its hands to its successor upon the appointment of the new depository. It did not turn over the moneys misappropriated by West, of course, because they were gone. But they were gone because of the failure of defendant to keep its covenant with the city to faithfully keep such deposits ” Until the city should demand release of the funds in the form required by the contract. It covenanted to pay and account for interest on daily balances on the last day of each month. Defendant, being a wrongdoer, will be deemed to have had on hand on the date its successor was appointed the principal funds misappropriated with interest at the rate specified in the contract. (Holden v. New York & Erie Bank, 72 N. Y. 286.) Defendant also agreed to faithfully pay over to its or their successors all moneys that shall remain in its or their, hands belonging to the city.” Interest at the legal rate of six per cent was properly chargeable on the misappropriated funds and accrued interest at the contract rates from May 1, 1930. (Board of Supervisors of Monroe County v. Clark, 92 N. Y. 391, 397.)

The judgment should be affirmed, with costs.

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

Judgment affirmed.


author: Finch, J.

text:
    Beth Israel Hospital Association et al., on Behalf of Themselves and Others, Respondents, v. Robert Moses, as Commissioner of Parks, et al., Appellants.

      Argued June 9, 1937;
    decided July 13, 1937.

      Paul Windels, Corporation Counsel (Jeremiah M. Evarts, Paxton Blair and Thomas W. A. Crowe of counsel), for appellants.
    The creation of a play area within Stuyvesant Square is not a violation of the conditions and covenants contained in the deed from Peter Stuyvesant. (Stuyvesant v. City of New York, 11 Paige, 414; Fish v. Folley, 6 Hill, 54; Bendernagle v. Cocks, 19 Wend. 207; Grescot v. Green, 1 Salk. 199; Gerzebek v. Lord, 33 N. J. L. 240.) A play area may be located within the borders of Stuyvesant Square. (Williams v. Gallatin, 229 N. Y. 248.)

      Thomas I. Sheridan, William H. Hayes and Harry C. Kane for respondents.
    The deed of dedication is to be strictly construed in favor of the grantor of the lands and those who take under him. (Williams v. Gallatin,
      229 N. Y. 248; City of Hopkinsville v. Jarrett, 156 Ky. 777; Campbell v. Town of Hamburg, 156 Misc. Rep. 134.) Stuyvesant Square was dedicated for use as an ornamental public square. (Rung v. Shoneberger, 2 Watts, 23; Mahon v. Norton, 175 Penn. St. 279; Porter v. International Bridge Co., 200 N. Y. 234; Guttery v. Glenn, 201 Ill. 275.) The decree in Chancery is a binding adjudication that the city must maintain Stuyvesant Square as an ornamental public square, and that the covenant so to maintain it was not merged in the judgment at law. (Union Nat. Bank v. Kupper, 63 N. Y. 617; Robinson v. N. Y., L. E. & W. Ry. Co., 64 Hun, 41; Brown v. Fletcher, 182 Fed. Rep. 963; Jones v. Lewis, [1919] 1 K. B. 328; Seed v. Johnston, 63 App. Div. 340; Hughes v. Bingham, 135 N. Y. 347; Hemphill v. City of Boston, 8 Cush. 195; South Park Commrs. v. Ward & Co., 248 Ill. 299.)
   Finch, J.

The owners of four hospitals, namely, Beth Israel Hospital Association, The Salvation Army William Booth Memorial Hospital, .New York Infirmary for Women and Children, and Manhattan General, Inc., all abutting on Stuyvesant Square brought this action on behalf of themselves and other persons similarly situated, to enjoin the construction of playgrounds in Stuyvesant Square. Stuyvesant Square runs from Fifteenth to Seventeenth streets in the borough of Manhattan, city of New York, and is divided by Second avenue into two small squares, each 190 feet by 450 feet.

The plaintiffs and all other owners of property abutting on Stuyvesant Square took title through mesne conveyances from the heirs of Peter Stuyvesant.

Beth Israel Hospital Association owns and maintains a hospital on the east side of Livingston place between East Sixteenth and East Seventeenth streets. This hospital contains 500 beds, with an original ,'nvestment of over $6,000,000 and ministers to the sick poor of the immediate neighborhood.

The Salvation Army William Booth Memorial Hospital is on the north side of East Fifteenth street between Second and First avenues, directly opposite the southeast side of Stuyvesant Square. This is a general hospital, conducted for charity.

The New York Infirmary for Women and Children lies on East Fifteenth street and Livingston place, directly opposite the southeast side of Stuyvesant Square. This is a general hospital for women and children, containing about 160 beds, maintained by voluntary contributions.

Manhattan General, Inc., operates a private hospital at Second avenue and Seventeenth street, containing 250 beds.

Two great high schools, one with a student roll of about 4,000 boys and young men, and the other for girls and young women, are just off the square.

The defendant Park Commissioner seeks to place in each of the small squares a playground so as to attract the children from these large public schools and from this section of the city to this square.

The hospitals complain that their inmates cannot escape from the noise which will inevitably be produced by so large a number of children assembled for play, athletics and games.

The only issue before us is whether the covenants and conditions written into this grant are such as to compel the city to maintain Stuyvesant Square as an ornamental or parklike square and preclude the Commissioner of Parks from establishing playgrounds therein.

Stuyvesant Square has an origin and a history peculiar to itself. A determination in this action on the use permissible of Stuyvesant Square will have no effect on the use of other small squares and parks in the city of New York for the reason that apparently Stuyvesant Square is the only public square in the city arising from dedication by private grant. To all other parks and squares it would seem the city has taken title by purchase or condemnation.

In 1651 Governor Stuyvesant obtained title by patent to a large area on Manhattan Island which descended to his great-grandson, Petrus Stuyvesant, who died in 1805. The son of Petrus, named Peter G. Stuyvesant, inherited what is known as Peters Field Farm running from Ninth to Twentieth streets and from Fourth avenue to the East river, except four lots on Eighteenth street, which Petrus left to his daughters. In 1836 the city of New York agreed to the terms imposed by Peter G. Stuyvesant for the dedication of Stuyvesant Square. The conditions and covenants follow: “ Provided always however and these presents are upon the express condition that the said lands hereby conveyed or intended so to be shall from time to time and at all times forever hereafter be appropriated to and used exclusively for the. purpose of a public square to be called Stuyvesant Square AND ALSO upon the further condition that the said parties hereto of the second part or their successors shall immediately after the execution and delivery of this Indenture proceed to regulate the grounds between Fifteenth and Seventeenth streets and ■ extending to the distance of Two hundred and twenty feet on each side of Second Avenue and enclose the lands hereby conveyed on each side of the second Avenue in the form of two parallelograms of One hundred and ninety feet by Four hundred and fifty feet six inches each with a railing similar to the one which shall be placed around Union place in the said City and plant and improve such inclosures similar to the improvements made in Washington Square in the said City of New York AND in case the said lands hereby conveyed should at any time hereafter cease to be used for the purpose of such Public Square as aforesaid then these presents and everything herein contained shall be void and thereupon the parties hereto of the first part or their heirs, SHALL and may lawfully re-enter in and upon the said premises hereby granted and every part and parcel thereof AND hold the same as of their former estate anything herein contained to the contrary thereof in any wise notwithstanding AND the said parties hereto of the second part for themselves and their successors do hereby covenant, promise and agree to and with the said Peter G. Stuyvesant one of the parties hereto of the first part and his heirs that the said parties hereto of the second part AND their successors SHALL AND WILL stand and be seized of the hereby granted premises to the use in and by this Instrument limited and declared according to the true intent and meaning thereof AND to no other use intent or purpose whatsoever AND shall and will well and faithfully abide by observe and perform the conditions imposed upon them the said parties of the second part by the acceptance of this conveyance.”

The plaintiffs in their complaint set forth their ownership and use of the lands fronting on the square, the dedication of the- square by Peter G. Stuyvesant in September, 1836, the subsequent purchase by the plaintiffs of their property, the erection of their hospitals, in reliance upon the conditions and covenants in the grant, the playgrounds planned in the square by the Commissioner of Parks in violation of the conditions of the grant, and pray for a judgment enjoining the construction of the playgrounds.

The defendants in their amended answer, after denying certain allegations of the complaint, allege as a first defense that Washington Square, in September, 1836, was planted with shade trees and shrubbery as a place of outdoor recreation, and that Stuyvesant Square has been for several years deteriorating, and that the playgrounds are designed for its improvement. For a second defense, defendants allege that an action at law for damages was brought by Peter Stuyvesant in 1839 and a judgment recovered in May, 1840; through recovery of this judgment, the conditions in the deed of dedication respecting the manner in which Stuyvesant Square should be inclosed and improved were thereupon merged in this judgment, and that when thereafter Peter G. Stuyvesant brought a suit in Chancery for specific performance of all the covenants and conditions in the deed of dedication, the Chancellor handed down a decision that the covenants concerning the manner in which the square was to be inclosed and improved were merged in the judgment at law, and that the only covenant thereafter existing was the covenant for use of Stuyvesant Square as a public square freed from all conditions.

The trial court found that the intention of Peter G. Stuyvesant in dedicating Stuyvesant Square for use as a public square, was to have the square embellished with taste and beauty and to enhance the value of his adjacent lots and that Peter G. Stuyvesant dedicated Stuyvesant Square for use as an ornamental public square. Both these findings have been unanimously affirmed by the Appellate Division and there is evidence to support both.

The evidence showed that in September, 1836, the city took possession of the lands as dedicated, and that in January, 1838, the Mayor approved resolutions of the Common Council directing the Street Commissioner to advertise for estimates for regu ating and inclosing Stuyvesant Square in conformity with the conditions of acceptance, and appropriated $56,000 for that purpose. Nothing further was done by the city, and in March, 1839, Peter G. Stuyvesant brought an action at law against the city for breach of the covenants in the deed, alleging in the complaint that he was the owner of certain lots fronting on Stuyvesant Square and of other lots on the streets adjacent, which he held for sale and leasing, and that his yearly damage caused by the failure of he city to regulate, inclose, plan and improve Stuyvesant Square in the manner agreed upon, was in excess of $49,000, and he asked judgment for $150,000 damages for the three years’ breach. The city entered a general denial, pleaded the resolution of 1838 and performance thereunder with reasonable diligence. The action was tried in April, 1840. On the trial the city contended that the only damages Stuyvesant could recover were such loss of income as could be shown from the time when the defendants should be found to be in fault until the time of the commencement of the said action, and the Judge at their instance and with the assent of your Orator's counsel so charged the jury." A verdict for damages for little over one year ” was rendered in favor of Peter Stuyvesant in the sum of $3,056.25. The judgment entered on this verdict was paid by the city.

After the recovery of this judgment Peter Stuyvesant frequently urged the city to perform the covenants contained in the deed of dedication. The city did not comply. In April, 1841, the Board of Assistant Aldermen adopted a resolution that a wooden railing be put around the square. In December, 1841, Stuyvesant filed a complaint in Chancery, asking for specific performance of the covenants in the deed. The city filed a general demurrer. The cause was referred to the assistant vice-chancellor who overruled the demurrer and found that Stuyvesant was entitled to specific performance of all the covenants contained in the deed. The city appealed to the Chancellor, who in January, 1845, handed down his opinion holding that the recovery of damages for breach of the covenants to fence, and improve in a particular manner bars a bill for specific performance of these covenants; but that the covenant to maintain the premises as a public square was a continuing covenant and a recovery for breach of that covenant did not bar a suit for specific performance.

In April, 1845, an order was entered by the Chancellor affirming the decree of the assistant vice-chancellor who had overruled the demurrer. The demurrer was to the whole bill and hence the Chancellor affirmed the assistant vice-chancellor because the Chancellor found the bill good as to that part of the bill which held that the covenant to maintain the park as a public square was still valid. After the demurrer was overruled, the city filed no answer to the bill of complaint and in May, 1845, on default of the city an order was entered that the bill of complaint be taken pro confessa against the city. Following this, in August, 1845, a decree was entered in which it was ordered, adjudged and decreed That the defendants be perpetually enjoined and restrained from using the lands and premises in the Bill of Complaint described as forming Stuyvesant Square, or suffering or permitting the same to be used for any other purpose than that of a Public Square for the purposes in the Bill of Complaint described, and in the deed of covenant and grant therein contained set forth. And that the defendants be also enjoined from suffering or permitting to remain or continue on the said premises all or any persons who have intruded themselves upon the said premises and all and singular buildings and erections thereon which are inconsistent with the purposes for which the premises were granted as aforesaid. And that the defendants forthwith cause the said persons buildings and erections to be removed therefrom.” (Italics interpolated.)

The decree further referred the matter to a master in chancery to compute the damages sustained by Stuyvesant since the commencement of the suit at law down to the time of the decree in equity by reason of the breach of the covenant. The Chancellor having stated in his opinion that the complainant was not entitled to all the relief specifically prayed in the bill of complaint, Stuyvesant, in October, 1845, took an appeal to the Court for the Correction of Errors, which is now the Court of Appeals. This appeal was from that part of the decree which denied Stuyvesatit specific performance of the covenants to regulate the grounds,” to erect an iron railing of a certain type and plant and improve Stuyvesant Square in the same manner as Washington Square in September, 1836. The city did not appeal.

In January, 1846, the owners of property around Stuyvesant Square presented a memorial to the Common Council of the city, stating that they had invested their money in full confidence that the city would comply in good faith with the covenants in the grant, and petitioned the Common Council that Stuyvesant Square might be improved in the style contemplated forthwith, and as agreed upon in the original deed of cession. In answer to the petition the Common Council appropriated $20,000 to inclose Stuyvesant Square with a neat, elegant and strong railing, and in February and April, 1848, the Common Council directed that Stuyvesant Square be graded and planted with grass and clover and trees and shrubbery. In October, 1848, the Corporation Counsel made a report to the Board of Aldermen concerning the suit in Chancery brought by Peter Stuyvesant which was then on appeal. The Corporation Counsel stated that the executors of Peter Stuyvesant were willing to withdraw the appeal provided the city would widen the sidewalks on Second avenue from Eleventh to Twenty-second streets and permit the property owners to inclose yards in front of their houses, reset the fence of the square on Second avenue so as to take in part of the sidewalk, repay the counsel fees which Peter Stuyvesant had paid in the suit for specific performance, and place a fountain in each of the two squares. The report of the finance committee to the Common Council stated among other things that “ on a careful examination of the whole subject, thus committed to them, and having advised with the Corporation Counsel thereupon, your Committee are of the opinion that it will be best to avoid the chances of a legal decision by making an amicable settlement of the controversy.” The Common Council thereupon passed resolutions providing that upon the discontinuance of the suit against the city, and a release of all claims for damage, the city would pay the costs of the suit, repay the counsel fees paid by Stuyvesant, and place a fountain in each of the inclosures. Pursuant to this the appeal in suit was dismissed.

Stuyvesant Square having been inclosed with this ornamental iron fence, beautified and embellished with lawns, shrubbery, trees, winding walks and fountains, was kept as an ornamental public square, in which the gates were locked each night and opened in the morning, for almost one hundred years. Recently the custom of locking the gates each night has been abandoned, and the fences protecting the lawns have recently been removed. Supervision of the square has become lax, and the physical condition of the square has become bad.

The Commissioner of Parks now proposes to remove the lawns in the southerly half of each portion of the square, put concrete where such lawns are, and erect shuffleboard courts, parallel bars, playhouses, ping pang tables, swings, horizontal ladders, wading pools, showers and other gymnastic and playground apparatus. This constitutes a direct invitation to attract thousands of children to play boisterously beneath the windows of these hospitals. It is stated that the amount adapted to these playgrounds will be one-twelfth of each of the parks. It is contended, however, by the hospitals that as each playground is to be in the center of the southerly half of each part, and as the space outside the fence will be merely a border around the playground, a substantial part of the southerly half of each square will be used as a playground and in effect the whole southerly half of each square will be practically devoted to such purpose.

The terms of the grant, coupled with the findings of the trial court, unanimously affirmed by the Appellate Division, show that it was a condition of the grant and the intention of the grantor that these squares should be maintained as ornamental or park-like squares. The appellants do not seriously controvert these terms of these findings, but seek to dispose of these covenants and conditions by reason of the findings of the Chancellor that the suit at law by Stuyvesant upon the covenant extinguished the covenant. In other words, the fact that_ Stuyvesant attempted to recover at law his damages for the breach of this covenant up to the time of trial in effect changed this covenant from one for the life of the grant to a covenant for a space of approximately three years, or up to the time of the suit at law. The principle involved was that this suit extinguished the covenant by merging it in the judgment at law. Whether or not this covenant was a continuing covenant, and whether in equity as distinguished from law, specific performance would lie thereon, presents a real controversy..

It is to be noted that the previous litigation arose only upon a general demurrer to the whole bill of complaint in equity and the decision was given as a matter of law upon the plea in the answer of the city based upon the records of the court showing that Stuyvesant had theretofore brought a suit at law for damages based upon a breach of the conditions in the deed of dedication respecting the maimer in which Stuyvesant Square should be inclosed and improved and in that suit had recovered damages. The Chancellor thereupon held that the covenants concerning the manner in which the square should be inclosed and improved were merged in the judgment at law and the only covenant thereafter existing was the covenant for use of the square as a public square freed from all other conditions. While holding the above,. however, as the ground for his decision, the chancellólas already noted affirmed the decree appealed from which overruled the demurrer and sent the case back for trial. This because the demurrer was to the whole bill and the Chancellor held that part good relating to the covenant for a public square.

When the case went back to trial the city defaulted and hence a decree was entered in accordance with the allegations of the complaint which decreed all the conditions originally existing.

From the above certain important conclusions follow: First, this court is not bound by what took place in that litigation. Second, the trial court in the case at bar was not bound in so far as its findings of fact are concerned, and the trial court has found, which finding has been unanimously affirmed by the Appellate Divison, that in September, 1836, when the deed of dedication was made, Washington Square was “ an ornamental public square * * * and did not contain a playground or anything equivalent to a modern playground * * * [and that] Peter G. Stuyvesant dedicated Stuyvesant Square for use as an ornamental public square.”

There is really not much dispute, and cannot be, that Stuyvesant dedicated this square upon a covenant and condition as to the manner of its use, namely, as an ornamental public square for the following reasons:

First, he specifically provided in the deed that it should be planted and improved similar to Washington Square and we have the above finding that Washington Square was then an ornamental public square. Second, the Chancellor in his decision inferentially admits the above covenant and condition and seeks to do away with it by reason of the doctrine of merger as above stated. Third, the foregoing is the position of the city upon this appeal. Fourth, the decree of the Chancellor as entered is certainly entitled to more weight than his opinion and that restored the covenants as they originally existed.

Furthermore whether a merger took place depends upon whether the condition and covenant to regulate the grounds and keep them as Washington Square was then kept, was intended to be a continuing condition and covenant or not. The trial court has by its findings held that this was the intention of the grantor. Even if the trial court should be bound by the decision of the Chancellor rather than the formal decree, still this court is not bound and the deed of dedication on this subject is at best ambiguous. A deed of dedication which is ambiguous must be construed in favor of the grantor and those who take under him. (Bradley v. Crane, 201 N. Y. 14; Williams v. Gallatin, 229 N. Y. 248, 253; City of Hopkinsville v. Jarrett, 156 Ky. 777.)

The decree in Chancery moreover was a binding adjudication that the city must maintain Stuyvesant Square as an ornamental square. How are we able to say that the Chancellor after hearing Hamilton Fish of counsel for Stuyvesant before entering the decree did not change his mind from the time he wrote the opinion. Certainly the Chancellor entered the decree at a later time and after hearing counsel for Stuyvesant. In any event the decree as entered supersedes the earlier opinion (Union Nat. Bank v. Kupper, 63 N. Y. 617; 2 Freeman on the Law of Judgments [5th ed.], § 772), and this is not changed because, perhaps out of abundant caution, Stuyvesant took an appeal to the Court of Errors and Appeals.

The judgment should be affirmed, with costs.

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

Judgment affirmed.


text:
    The People of the State of New York, Respondent, v. Louis Apicello, Appellant.

      Argued May 24, 1937;
    decided July 13, 1937.

      Harry G. Anderson, Benjamin Schifter and Samuel G. Coler for appellant.
    The assistant district attorney conducting the prosecution had in court, in his possession, a signed dying declaration which was substantially at variance with the People’s testimony respecting such declaration. He concealed this fact from the court and jury and refused to produce the written declaration upon the demand of the defendant’s counsel. This was reversible error. (People v. Wilcox, 245 N. Y. 404; People v. Walsh, 262 N. Y. 140; People v. Miller, 257 N. Y. 54; People v. Falletto, 202 N. Y. 494; People v. Kane, 213 N. Y. 260; Shepard v. United States, 290 U. S. 96; Sprinkle v. State, 137 Miss. 731.) Where the declaration has been reduced to writing, read over and approved by the declarant, the document becomes primary evidence of the declaration. Hence, a copy of said writing will not be received as evidence and paroi proof of it will not be received until the written document has first been accounted for. The rule that the best evidence the case admits of, within the power of the party, must be produced, applies in such case. (1 Wharton’s Criminal Evidence [11th ed.], 908; Rex v. Reason, 1 Strange, 499; Dunn v. People, 172 Ill. 582; People v. Glenn, 10 Cal. 32; Binns v. State, 46 Ind. 311; Evans v. Comm., 161 Va. 992; Couch v. State, 93 Tex. Crim. Rep. 27; State v. Abrams, 115 Kan. 520; Turner v. State, 89 Tenn. 547; People v. Corey, 157 N. Y. 332.) It was reversible error for the trial court to charge the jury that the only questions to be construed with respect to the dying declaration was whether it was made and whether it was true. (People v. Pignataro, 263 N. Y. 229; People v. Wood, 2 Edm. Sel. Cases, 71; People v. Hoffman, 195 Cal. 205; People v. Greenig, 342 Ill. 254; Comm. v. Brewer, 164 Mass. 577; Comm. v. Puntario, 271 Penn. St. 501; State v. Bovino, 89 N. J. L. 586; People v. Thomson, 145 Cal. 717; State v. Custer, 336 Mo. 514.) It was reversible error for the trial court to refuse to charge the jury that it was the duty of the district attorney to call the detective and that it was also his duty to produce the written dying declaration. (People v. Leonardo, 199 N. Y. 432; Comm. v. Greene, 292 Penn. St. 579; People v. Strewl, 246 App. Div. 400; People v. Buccola, 239 App. Div. 356.) The verdict is against the weight of the evidence. (People v. Van Zandt, 224 N. Y. 354; People v. Zackowitz, 254 N. Y. 192; People v. Caruso, 246 N. Y. 437.)

      William F. X. Geoghan, District Attorney (Edward H. Levine and Henry J. Walsh of counsel), for respondent.
    The appellant’s guilt was proved beyond a reasonable doubt. The refusal of the prosecutor to disclose the contents of the deceased’s written dying declaration constituted no error. (People v. Kane, 213 N. Y. 260; People v. Falletto, 202 N. Y. 494; People v. Sarzano, 212 N. Y. 231; People v. Sprague, 217 N. Y. 373.) It was not error for the court to refuse to charge the jury that unfavorable inferences attached to the People’s case. (Perlman v. Shanck, 192 App. Div. 179; People v. Smith, 113 App. Div. 396; People v. McGovern, 105 App. Div. 296.)
   Finch, J.

This is an appeal by the defendant Louis Apicello from a conviction of murder in the first degree.

Albert Haglund and a friend named Kinsella were drinking beer in a saloon in Brooklyn at about midnight on December 20, 1936. Apicello, who had formerly been a bartender in the saloon, also was present. He engaged in a conversation with Haglund, which developed into a quarrel when Haglund remarked that Apicello had not been a very good bartender. Finally, Apicello said, “ I am not going to argue with you because you will be the loser in the end.” He then left the saloon, stating that he would be back in ten minutes.

Ten or fifteen minutes later the defendant approached Matthew Witkowski, a boy of sixteen, outside the saloon. He showed Witkowski a revolver and told him to enter the saloon and inform Haglund that he was waiting to give him a bullet.” The boy entered the saloon and conveyed his message to Haglund, who thereupon went out. In a few minutes revolver shots were heard, and, when several of those in the saloon rushed to the street, they found Haglund mortally wounded. Kinsella testified that when he reached the doorway of the saloon he saw the defendant running away. At the time Apicello was only five feet from where Haglund was lying in the street, and from twenty to twenty-five feet from Kinsella. He disappeared into the hallway of a neighboring house. The boy Witkowski also saw the defendant run into this house, in which both the defendant and the boy resided. In his dying declaration the deceased identified Apicello as the man who shot him.

The facts establish the guilt of the defendant beyond a reasonable doubt. The testimony concerning the events which occurred in the saloon is confirmed by several witnesses. The deceased himself identified the defendant as the one who shot him, and he was recognized at the scene of the crime by the boy Witkowski, who had been acquainted with him for more than five years, and by Kinsella, who had been speaking to him in the saloon about fifteen minutes prior to the shooting. The testimony is more than ample to identify the defendant as the killer. An occasional minor discrepancy in the testimony of the witnesses does not detract from the trustworthiness of their accounts of the material facts.

It is urged, however, that errors were committed in connection with the admission of the dying declaration of the deceased. After the shooting, the deceased was talcen to the hospital. His body became paralyzed from his chest to his feet. His condition did not improve, and three days before his death the deceased made a dying declaration in which, after stating that he thought he was going to die, that he had no hope of reSovery and that the doctors had told him that he had no chance, he related the occurrences in the saloon and identified the defendant as the man who had shot him. The substance of this declaration was reduced to writing and signed by the deceased.

At the trial, after medical testimony showing that the deceased was in extremis at the time he made his dying declaration, a detective was called, and he testified as to the substance of the dying declaration. Upon cross-examination of this witness, Detective O’Brien, the following colloquy occured: Q. Have you got the written statement? A. Written statement was taken by Detectice Cicone of the Homicide Squad. Q. May I look at the statement taken at the bedside? By Mr. Madden (Assistant District Attorney): No. By Mr. Coler: I ask Your Honor to direct that I see the statement taken at the bedside. Is Detective Cicone in the court room? (No answer.) Witness: I don’t see him. By Mr..Coler: Q. Detective Cicone? (No answer.) Q. Were you present when that statement was taken? A. I was. Q. Then this statement was taken in your presence? A. It was. Q. Have you got that statement? The Court: He said no. By Mr. Coler: He has got it. The Court: I said he didn’t know. He told by whom it was taken.”

Later counsel for defendant requested the court to charge that it was the duty of the District Attorney to produce the detective who had taken the written declaration. The court refused this charge on the ground that the District Attorney was under no obligation to produce the witness, and also refused to charge that if ainy witness or document within the control of the District Attorney was not produced, the jury might infer that such document or the testimony of such witness would be favorable to the defendant. It now appears that the Assistant District Attorney who prosecuted the case had the written declaration in his pocket throughout the trial.

There can be no doubt that the Assistant District Attorney acted improperly in failing to produce the written declaration which was in his pocket. The fact that he acted improperly, however, does not necessarily require a reversal on this appeal. The record shows that the Presiding Judge was not given an opportunity on a clear request to rule on the question whether the District Attorney was obliged to produce the written declaration. Upon an appeal from a conviction of murder in the first degree, however, we are not inclined to disregard what would otherwise be an error by construing the request for a ruling too narrowly. We shall consider, therefore, whether there was error in the admission of the testimony of the oral dying declaration, and whether such erra and the failure of the Assistant District Attorney to produce the written declaration requires a reversal.

There is no rule against the admission of oral testimony of dying declarations. (Cf. People v. Kane, 213 N. Y 260, 267.) It is true that a number of States have held that where a declaration has been reduced to writing and signed by the deceased, a copy of the declaration or paroi proof will not be received until the written declaration has been accounted for. This court has never passed on the question, and the rule generally applied has been sharply criticized by Wigmore, who points out that the best evidence rule has no application since the oral testimony is itself competent evidence of the oral dying declaration, whereas the written declaration subsequently signed is in substance a second dying declaration. (3 Wigmore on Evidence [2d ed.], § 1450.) Assuming, however, that the written declaration should have been' accounted for, the error must be overlooked since it in no way prejudiced the defendant. A comparison of the written declaration, which has been submitted with the record on appeal, and the oral testimony of the dying declaration reveals that in the main, they are not substantially different. Where there may be a difference due to ambiguity of language, there is other evidence in the record sufficient to compel us to disregard the difference as not substantially affecting the result. Thus neither the admission of the oral evidence of the dying declaration nor the failure to produce the written declaration prejudiced the defendant.

Nor was there prejudicial error in the court’s refusal to charge that an inference favorable to the defendant arose because of the failure of the District Attorney to call a witness or produce documents. The rule does not apply where the evidence or the witness is available equally to both parties and the testimony would be merely cumulative; and, in the case at bar, we know that the document- contained nothing favorable to the defendant.

It is unnecessary to consider in detail other alleged errors since a reading of the charge as a whole shows that all the applicable rules of law were made clear to the jury.

The judgment of conviction should be affirmed.

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

Judgment of conviction affirmed.


author: Crane, Ch. J. Rippey, J.

text:
    The People of the State of New York, Appellant, v. Lee Foon, Respondent.
    Submitted June 4, 1937;
    decided July 13, 1937.

      William Copeland Dodge, District Attorney (Erwin N. Schapira of counsel), for appellant.
    The motion in arrest of judgment was improperly granted. (People v. Rao, 271 N. Y. 98; People ex rel. Jerome v. Court of General Sessions, 112 App. Div. 424; 185 N. Y. 504; People v. Glenn, 173 N. Y. 395; People v. Hovey, 92 N. Y. 554; People v. Cully, 167 App. Div. 332; People v. Willett, 213 N. Y. 368; People v. Sheffield Farms-Slawson-Decker Co., 206 N. Y. 79; People v. Wiechers, 179 N. Y. 459; People v. D'Argencour, 95 N. Y. 624; People v. Jackson, 191 N. Y. 293; People v. Huson, 187 N. Y. 97; People v. Meakim, 133 N. Y. 214; People v. Buddensieck, 103 N. Y. 487.) The information is sufficient. (Bartell v. United States, 227 U. S. 427; People v. Corbalis, 178 N. Y. 516; People v. Willis, 158 N. Y. 392; People v. Peckens, 153 N. Y. 576; People v. Dumar, 106 N. Y. 502; People v. Farson, 218 App. Div. 488; 244 N. Y. 413; People v. Helmer, 154 N. Y. 596; People v. Devinny, 227 N. Y. 397; People v. Weldon, 111 N. Y. 569; People v. Seldner, 62 App. Div. 357; People v. Knapp, 206 N. Y. 373; People v. Levy, 123 Misc. Rep. 845; People v. Abelson, 162 App. Div. 674; People v. Trainor, 57 App. Div. 422; People v. West, 106 N. Y. 293; People v. Williams, 243 N. Y. 162.) A motion in arrest of judgment is timely only before the pronouncement or rendition of sentence. (4 Blackstone’s Comm. 375; 1 Chitty’s Crim. Law, 662-664; 9 Halsbury’s Laws of England, 376; Queen v. Darby, 1 Salk. 78; Rex v. Hayes, 2 Str. 845; Rex v. Robinson, 2 Burr. 801; Rex v. Lookup, 3 Burr. 1901; Travis v. State, 176 Ala. 25; People v. Williams, 309 Ill. 492; State v. Whittaker, 152 La. 611; State v. Stickney, 108 Me. 136; Manke v. People, 74 N. Y. 415; People v. Bork, 78 N. Y. 346; People v. Miles, 173 App. Div. 179.)

      Marks Wolff for respondent.
    " An information in the Court of Special Sessions must be drawn in accordance with section 742 of the Code of Criminal Procedure. (People v. Zambounis, 251 N. Y. 94; People v. Bogdanoff, 254 N. Y. 16; People v. Farson, 244 N. Y. 413.) The information in the case at bar charges no specific crime and states no facts to constitute a crime. (People v. Klein, 288 N. Y. Supp. 146; People v. Corbalis, 178 N. Y. 516; People v. Cancel, 13 P. R. 179.) The motion in arrest of judgment was timely and proper. (People v. D’Argencour, 95 N. Y. 624; People v. Willett, 213 N. Y. 368; People v. Wiechers, 179 N. Y. 459; People v. Sheffield Farms-Slawson-Decker Co., 206 N. Y. 79; People ex rel. Schneider v. Hayes, 108 App. Div. 6.)
   Crane, Ch. J.

Information was filed against Lee Foon for the crime of possessing a narcotic drug, committed as follows: “ The said defendant, on the 17th day of November, 1936, at The City of New York, in the County of New York, unlawfully did possess and have control of a certain narcotic drug.” In the Court of Special Sessions on January 28, 1937, the defendant pleaded guilty and was sentenced to the penitentiary. Thereupon immediately after sentence was pronounced, the defendant’s counsel moved in arrest of judgment to dismiss the information as insufficient in law. The motion was granted, we think erroneously.

A motion in arrest of judgment must be made before or at the time when the defendant is called for judgment. (Code Crina. Proc. §§ 331, 469.) The motion here was made after judgment was pronounced and so did not strictly comply with this section, but the whole procedure took place at one time_— a continuous hearing, so that this objection is of little consequence. The objection to the sufficiency of the information is more significant.

Section 422 of the Public Health Law (Cons. Laws, ch. 45) reads:

Acts prohibited. It shall be unlawful for any person to manufacture, possess, have under his control, sell, prescribe, administer, dispense or compound any narcotic drug, except as authorized in this article.”
" § 421. Definitions. The following words and phrases, as used in this article, shall have the following meanings, unless the context otherwise requires: * * * 14. ‘ Narcotic drugs ’ means coca leaves, opium, cannabis and every substance neither chemically nor physically distinguishable from them.”

The illegal possession of such a drug in violation of the Public Health Law is made a misdemeanor by section 1751 of the Penal Law.

The information sufficiently stated the crime, giving the defendant notice that he was charged with having in his possession a narcotic drug. The law defined what was meant by a narcotic drug so that the information did not have to restate it. The information stated the date, place and the offense, which was a compliance with the requirement of section 742 of the Code of Criminal Procedure. Had the defendant needed more specific information he could have moved to this purpose or asked for a bill of particulars. (People v. West, 106 N. Y. 293, 295; People v. Williams, 243 N. Y. 162, 165; People v. Farson, 244 N. Y. 413,419.)

The order of the Appellate Division and that of the Court of Special Sessions in arrest of judgment should be reversed, and the- judgment of the Court of Special Sessions reinstated.

Rippey, J.

(concurring). I agree with the conclusion reached by the Chief Judge but not with the reason asserted therefor. The information was fatally defective because it fails to charge a crime in that it does not allege what narcotic drug the defendant possessed or of which he had control. There are several narcotic drugs specifically mentioned in the definition (Public Health Law, § 421). There are other narcotic drugs which are not covered by the statute. For example, alcohol is a strong narcotic when taken in large doses (Encyclopedia Britannica). Had a motion been timely made for the dismissal of the information it must have been granted. It was not made, however, until after sentence had been pronounced. A motion in arrest of judgment may bring up the sufficiency of the information respecting time, place or offense which is material to support the charge. The rule is laid down in Chitty’s Criminal Law (Vol. 1, p. 660) that the motion may only be made between the conviction and the sentence, and this ancient rule coming down from King’s Bench has not been changed or modified by the provisions of sections 467-469 of the Code of Criminal Procedure. A reading of those sections clearly indicates that it must be made before sentence is pronounced. The motion came too late in this case.

Lehman, Hubbs, Loughran and Finch,' JJ., concur with Crane, Ch. J.; Rippey, J., concurs in separate opinion; O’Brien, J., taking no part.

Ordered accordingly.


author: Hubbs, J.

text:
    Edmund J. Robbins, Respondent, v. John L. Abrew et al., Defendants, and Barney Davis et al., Appellants.

      Argued May 26, 1937;
    decided July 13, 1937.

      Charles S. Rosenchein, Samuel Luloff and Morris Luloff for appellants.
    Since the county was the owner in fee of the property at the time when the 1925 taxes became a lien, there was a merger which destroyed the lien of the taxes; therefore, the sale to plaintiff for non-payment of those taxes was void. (Wells v. Johnston, 171 N. Y. 324; Raquette Falls Land Co. v. Hoyt, 109 App. Div. 119.) By the specific terms of the deed from the county to the predecessor of defendants-appellants, “ all the estate, right, title, interest, claim and demand whatsoever both in law and in equity ” of the county passed to the grantee and that includes the lien of the tax. (Pickell v. City of Utica, 161 App. Div. 1; 216 N. Y. 740; Eisenhut v. De Vries, 269 N. Y. Supp. 485.) Real property owned by the county and situate wholly within the county is not taxable by the county. Therefore, the sale for 1925 taxes was void. (Matter of Hamilton, 148 N. Y. 310; Wells v. Johnston, 171 N. Y. 324; Beekwill Realty Corp. v. City of New York, 254 N. Y. 423.) Any claim of defect in the formalities of the tax sale out of which defendants-appellants derived title is barred by the Statute of Limitations (Cons. Laws, ch. 60, §§ 131, 132). (Dunkum v. Maceck Building Corp., 256 N. Y. 275.)

      Leonard L. Bishop, Jr., for respondent.
    By levying taxes against the property for the year 1925 the county abandoned any claim of title under its void tax deed. Bamonte v. Ocean Beach Fire Island Co., 222 App. Div. 676; 248 N. Y. 642; Schreiber v. Moynihan, 197 Penn. St. 578; Feltz v. Natalie Anthracite Coal Co., 203 Penn. St. 116.) Assuming that the county was the owner of the fee and that the levying of the 1925 tax was not an abandonment of title, the 1925 taxes were valid and there was no merger of the fee and tax lien. (Clark v. Sprague, 113 App. Div. 645.) There was no merger of the 1925 tax lien and the county’s tax title. (Fruth v. Bolt, 164 N. W. Rep. 105; Smith v. Roberts, 91 N. Y. 470.)
   Hubbs, J.

Prior to November 4, 1925, the county of Suffolk had acquired tax liens upon eight parcels of vacant and unoccupied land, situate in that county. It had bid in the property at tax sales. The property not having been redeemed, on that date the County Treasurer deeded the property to the county. The deed was recorded the same day.

Section 154 of the Tax Law (Cons. Laws, ch. 60) provides that if real property so bid in be not redeemed, the County Treasurer shall execute to the purchaser a conveyance thereof subject, however, to all claims the county or state may have thereon for taxes or liens or incumbrance.”

By virtue of the deed from the County Treasurer, the county of Suffolk became the absolute owner of the real property in question on November 4, 1925. The section also provides that the county of Suffolk may dispose of the title thus acquired “ at such times and upon such terms as shall be determined by a majority of the board of supervisors.”

On December 8, 1925, the county deeded the premises in question, title to which it had acquired by the deed dated November 4, 1925, to Joseph Speigel. The appellants by mesne conveyances acquired the Speigel title. Thereafter for six years they paid the taxes on the property. They then discovered that respondent also had a deed of the same property which he had received from the county on December 16, 1929, four years after appellants’ predecessor had received his deed from the county.

Respondent’s claim of title arises as follows: On July 1, 1925, before the county received its deed, an assessment was made on the property. The warrant was signed November 30, 1925, after the county received its deed and the tax became a lien on December 1,1925. The tax was not paid and on October 29, 1926, the property was sold at a tax sale to respondent. Thereafter and on November 16,1929, the county gave a deed to respondent.

It thus appears that the tax lien for 1925 taxes did not attach until December 1, 1925. Meanwhile, on November 4, 1925, before the tax for 1925 had become a lien, the County Treasurer deeded the property to the county which thereby became the owner in fee. After the lien for the 1925 taxes had attached and on December 9, 1925, it deeded the property to appellants’ mesne grantors. Thus at the date of the last mentioned deed, the county owned the property in fee and also owned a tax Hen on the property for the 1925 taxes. The question for determination is which deed from the county takes precedence?

We beHeve the appeUants’ predecessor received a good title under his deed of December 8, 1925, and that at the time the county deeded to respondent it did not have any title to the premises which it attempted to convey to him by the deed dated November 16, 1929. The deed of December 8,1925, from the county to appellants’ predecessor recited that it conveyed “ all the right, title and interest of the party of the first part in and to said premises.”

At the time it was the owner in fee. It also had a Hen for the unpaid tax for 1925. The effect of its deed was to convey to appellants’ predecessor in title all of its interest both as owner in fee and arising from its tax Hen. (Real Prop. Law [Cons. Laws, ch. 50], § 255.)

Section 154 of the Tax Law, by virtue of which the county acquired authority to give the deed, makes a distinction between a deed executed by a County Treasurer upon a tax sale and a deed given by a county after it has acquired title under a deed given as the result of a tax sale. One who bids in property at a tax sale and receives a deed receives it subject to “ all claims the county or state may have thereon for taxes.”

The same section provides that the county of Suffolk may dispose of property acquired by deed as a result of a tax sale upon such terms as shall be determined by a majority of the board of supervisors.”

The Board by resolution authorized the County Treasurer to give in its name the deed which was given. That deed conveyed all of the interest of the county, subject to any claims or liens thereon which may exist in favor of the State.” That exception excluded claims or liens in favor of the county. (Pickell v. City of Utica, 161 App. Div. 1; affd., 216 N. Y. 740.)

Any irregularity or jurisdictional defect in the assessment or sale by which the county acquired title was cured by sections 131, 132 and 158 of the Tax Law which provide a short statute of limitations. (Dunkum v. Maceck Building Corp., 256 N. Y. 275.)

Other questions have been argued and we have considered them, but deem it unnecessary to discuss them.

The judgments should be reversed and judgment directed in favor of the appellants, with costs in all courts. (See 275 N. Y. 542.)

Crane, Ch. J., Lehman, O’Brien, Loughran, Finch and Rippey, JJ., concur.

Judgments reversed, etc.


author: Per Curiam.

text:
    Frank L. Weil et al., as Trustees, Appellants, v. President and Directors of The Manhattan Company, Respondent.
    Argued June 2, 1937;
    decided July 13, 1937.

      A. A. Berle, Jr., and Abraham J. Halprin for appellants.
    Under the Schackno Act (L. 1933, ch. 745) appellants are in the position of successor trustees and may bring any action which the original trustee might bring. (Matter of People [Title & Mortgage Guarantee Co.], 264 N. Y. 69; Kelly v. Lawrence, 246 App. Div. 662; Gallin v. Burdick, 265 N. Y. 492.) The present action is one which a trustee or a successor trustee not only could bring, but is under a duty to bring. (Newhouse v. First Nat. Bank, 13 Fed. Rep. [2d] 887; Winn v. Harby, 159 S. C. 257; Matter of Lane, 11 Del. Ch. 122; Western R. R. Co. v. Nolan, 48 N. Y. 513; Hart v. Goadby, 138 App. Div. 160; Stewart v. Ficken, 151 S. C. 424; Daniels v. Berry, 148 S. C. 446.) Even if the present action be construed as having its origin in individual rights of individual security holders, the operation of the Schackno law validly clothes the appellants with the right to bring the action on behalf of the certificate holders as a class. (McCandless v. Furlaud, 296 U. S. 140; Matter of People [Title & Mortgage Guarantee Co.], 264 N. Y. 69; Archer v. Equitable Life Assur. Society, 218 N. Y. 18; O’Gorman & Young v. Hartford Fire Ins. Co., 282 U. S. 251; Home Building & Loan Assn. v. Blaisdell, 290 U. S. 398; German Alliance Ins. Co., v. Lewis, 233 U. S. 389; People ex rel. Durham Realty Corp. v. La Fetra, 230 N. Y. 429; City Bank Farmers Trust Co. v. Ardlea Corp., 267 N. Y. 224; Brown Co. v. Feldman, 256 U. S. 170.)

      Wilkie Bushby, Elihu Root, Jr., and Leo Gottlieb for respondent.
    The complaint was properly dismissed. (Mittleman v. Pres. & Directors of Manhattan Co.,
      272 N. Y. 632; Werring v. Selig, 241 App. Div. 67; 266 N. Y. 566.) The certificate holders do not have equal and ratable interests in the alleged causes of action. (Doyle v. Chatham & Phenix Nat. Bank, 253 N. Y. 369.) Class actions could not have been brought on the alleged causes of action. (Bouton v. Van Buren, 229 N. Y. 17; Guffanti v. National Surety Co., 196 N. Y. 452; Marsh v. Kaye, 168 N. Y. 196; Warnock Uniform Co. v. Garifalos, 224 N. Y. 522; Adelson v. Sacred Associates Realty Corp., 192 App. Div. 601; Cavanagh v. Hutcheson, 140 Misc. Rep. 178; 236 App. Div. 794; Reid v. The Evergreens, 21 How. Pr. 319; Bickford’s, Inc., v. Federal Reserve Bank, 5 Fed. Supp. 875; Markt & Co. v. Knight SS. Co., [1910] 2 K. B. 1021.) The Schackno Act does not authorize the transfer of causes of action such as those alleged in the complaints to trustees appointed in reorganizations under the act. (Matter of People [Title & Mortgage Guarantee Co.], 264 N. Y. 69.)
   Per Curiam.

In the case of Mittlemann v. President & Directors of Manhattan Co. (272 N. Y. 632) this court had before it for determination an appeal from a judgment of the Appellate Division which reversed an order of the Special Term and dismissed the plaintiffs’ complaint. (248 App. Div. 79.)

The plaintiffs in that action were trustees under a trust indenture issued in a reorganization proceeding under chapter 745 of the Laws of 1933, relating to mortgage certificates issued by the New York Title and Mortgage Company. The complaint alleged that the defendant bank, through its relations with the mortgage company, maliciously caused the mortgage company to breach its contracts with those who were at the time certificate holders in the series of certificates involved to their damage. It also alleged that defendant as depositary had been guilty of gross negligence to the damage of the certificate holders for whom plaintiffs were trustees. Also, that by virtue of the proceeding under chapter 745 of the Laws of 1933 and the terms of the reorganization documents, the holders of the certificates of the series involved had transferred to the plaintiffs the causes of action alleged in the complaint. We necessarily decided in that action that no such transfer had taken place and that plaintiffs as such trustees were not vested with such causes of action. In this action we are asked to re-examine our decision in the Mittlemann action. It is also urged that the complaint herein differs from the complaint in that action to such an extent that our former decision is not a precedent in the action at bar.

While different verbiage is employed in the complaint in this action, in substance it alleges the same facts alleged in the Mittlemann complaint. Necessarily, appellants assert that plaintiffs, as trustees under a reorganization proceeding the same as in the Mittlemann action, are vested with capacity to sue for the same acts of misconduct charged in that complaint.

We are persuaded that they do not possess such authority. They are in no sense voluntary trustees but are purely statutory trustees possessing only such power and authority as is conferred upon them by statute. The alleged causes of action set out in the complaint are causes of action vested in the certificate holders and the acts alleged constitute breach of duty to them under their certificates. Such causes of action were not held by the certificate holders as a class ” and they did not have equal and ratable interests therein. The statute never contemplated the transfer to plaintiffs of such causes of action. The documents expressly limit the causes of action transferred to causes of action which the certificate holders held “ as a class ” and in which all have equal and ratable interests. The causes of action alleged in the complaint are not of that nature because the interest of each certificate holder depends upon the time and circumstances under which he became a certificate holder. Some have no possible cause of action and some of the causes of action alleged vested in previous certificate holders who have transferred their certificates. The rights of those who may have causes of action vary.

The contention that it would be the duty of a general voluntary trustee to enforce such causes of action has no application as plaintiffs are not trustees because of the voluntary acts of the certificate holders. They are trustees because two-thirds of the certificate' holders consented in writing. Their appointment may have been in direct opposition to the wishes of some of the certificate' holders.

Neither does the Schackno Act (Laws of 1933, ch. 745), either in letter or spirit, purport to transfer to plaintiffs as trustees the alleged causes of action. If it did a serious constitutional question would be presented.

The purpose and reason for the enactment of that statute and the purpose which it was enacted to accomplish have been explained in detail in the opinion in Matter of People (Title & Mortgage Guarantee Co.) (264 N. Y. 69). Briefly, its purpose was to make it possible for the great number of certificate holders to act as a unit in the management of mortgages deposited as collateral security to certificates without the consent of all and to furnish the machinery for bringing about and carrying on such united action. It was decided that the act was constitutional and that an assignment of the interests of certificate holders might be decreed upon the consent of two-thirds without the express consent of others because of the unprecedented situation, which required and justified the enactment of the statute.

In the action at bar the defendant was not the owner of the mortgages deposited with it. Neither was it a trustee of the mortgages deposited. The mortgage company remained the owner of the mortgages subject to the collateral hen of the certificate holders. Therein lies the principal difference between this action and Doyle v. Chatham & Phenix Nat. Bank (253 N. Y. 369), in which action the bank was a trustee under a collateral trust indenture and was held liable for negligence in certifying bonds.

Our conclusion is that the plaintiffs had no authority to bring this action either under the Schackno Act or under the order and trust indenture issued in the proceeding under that act.

The judgment should be affirmed with costs.

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