text:
    Varick Spring Corporation, Appellant, v. The Bank of United States, Respondent.
    (Argued April 27, 1934;
    decided May 22, 1934.)

      Samuel H. Sternberg and Louis P. Neustein for appellant.
    The continuance of the lease and liability on its covenants remain unaffected by respondent’s insolvency and the entry by the Superintendent of Banks. (Matter of Union Bank, 204 N. Y. 313; Isaac v. Marcus, 258 N. Y. 257; People v. St. Nicholas Bank, 3 App. Div. 544; 151 N. Y. 592; People v. National Trust Co., 82 N. Y. 283; People v. Globe Mut. Life Ins. Co., 91 N. Y. 174; Chemical Nat. Bank v. Hartford Deposit Co., 156 Ill. 522; 161 U. S. 1; Towle v. Comm. of Banks, 246 Mass. 161; Lafayette Trust Co. v. Beggs, 213 N. Y. 280.) Appellant’s claim is provable against the assets in possession of the Superintendent of Banks. (People v. St. Nicholas Bank, 151 N. Y. 592; People v. National Trust Co., 82 N. Y. 283; Matter of Ludeke, 33 App. Div. 397; Matter of Whitney, 144 App. Div. 117; 202 N. Y. 580; Matter of Otis, 101 N. Y. 580; Matter of Hevenor, 144 N. Y. 271; Gold v. Clyne, 134 N. Y. 262; Martin v. Black, 9 Paige, 641; People v. Security Life Ins. Co., 78 N. Y. 114; Gray v. Kaufman Dairy & Ice Cream Co., 9 App. Div. 115; Kottler v. New York Bargain House, Inc., 242 N. Y. 28.) The bankruptcy rule as to provability does not apply to the Banking Law.) (Van Tuyl v. Scharmann, 208 N. Y. 53; People v. Remington, 121 N. Y. 328; Boardman v. Osborn, 23 Pick. 295; Denny v. Manhattan Co., 2 Hill, 220.)

      Martin A. Schenck, Byron Clark, Jr., C. Alexander Capron and David Kelly for Jacob Ruppert Realty Corporation et al., amici curios.

      Edward Feldman, Arthur Ofner, Warren C. Fielding and Carl J. Austrian for respondent.
    Appellant’s claim for rent to accrue after the Superintendent took possession is so contingent and uncertain that it cannot be permitted to participate with other general claims in the distribution of the assets of the bank. (Kottler v. New York Bargain House, Inc., 242 N. Y. 28; Deane v. Caldwell, 127 Mass. 242; Stafford Security Co. v. Kremer, 258 N. Y. 1; Apex Leasing Co. v. Litke, 173 App. Div. 323; Schenck v. Lewis, 121 Misc. Rep. 370; Witthaus v. Zimmermann, 91 App. Div. 202; Scott v. Demarest. 75 Misc. Rep. 289; Gold v. Clyne, 134 N. Y. 262; Sanford v. Rhoads, 113 App. Div. 782; Thistle v. Jones, 123 App. Div. 40; Bottlers Seal Co. v. Rainey, 225 N. Y. 369.) Provability does not depend on and has no relation to the scope of the stockholders’ liability for assessment. (Brewster v. Deschutes County, 1 Pac. Rep. [2d] 607; Salem Water Co. v. City of Salem, 5 Ore. 29; Matter of Hevenor, 23 N. Y. Supp. 1092; Sanford v. Rhoads, 99 N. Y. Supp. 407; Witz v. Mullins, 90 Va. 805; McElfresh v. Kirkendall, 36 Iowa, 224; Fidelity & Deposit Co. v. Commonwealth Trust Co., 65 Misc. Rep. 88; Cochran & Sayre v. United States, 157 U. S. 286; Niles Water Works v. City of Niles, 59 Mich. 311; Crowley v. Potts Estate, 180 Minn. 234; Commissioner of Banks v. Cosmopolitan Trust Co., 247 Mass. 334; Phillips v. Blatchford, 137 Mass. 510; Savage v. Shaw, 81 N. E. Rep. 303; Turner v. First Nat. Bank, 26 Iowa, 562.) Appellant is not a “ claimant ” or a “ creditor ” within the meaning of the Banking Law (Cons. Laws, ch. 2). (Matter of Egan, 258 N. Y. 334; Young v. Heermans, 66 N. Y. 374; Citizens Nat. Bank v. Fonda, 18 Misc. Rep. 114; O’Brien v. Whigam, 9 App. Div. 113; Marcus v. Kane, 18 Fed. Rep. [2d] 722; Gannard v. Eslava, 20 Ala. 732; Anderson v. Anderson, 64 Ala. 403; Karst v. Gane, 16 N. Y. Supp. 385; 136 N. Y. 316; Marstaller v. Mills, 143 N. Y. 398; Turner v. First Nat. Bank, 26 Iowa, 562; Nicolin v. Weiland, 55 Minn. 130; Matter of Chestnut St. Trust & Savings Fund Co., 217 Penn. St. 151; Jacobs v. Commissioner of Internal Revenue, 34 Fed. Rep. [2d] 233.)
   Pound, Ch. J.

Appellant, a domestic corporation, is the owner of premises known as 137-141 Varick street in the city of New York. On or about November 19, 1925, it leased to the Central Mercantile Bank of New York the ground floor in said building for the term beginning February 1, 1926, and ending April 30, 1946, at annual rentals as follows:

From February 1, 1926, to February 1, 1929, $8,300 per annum.

From February 1, 1929, to February 1, 1931, $10,300 per annum.

From February 1, 1931, to February 1, 1936, $12,000 per annum.

From February 1, 1936, to April 30, 1946, $13,000 per annum.

Rent was payable in equal monthly installments in advance on the first day of each and every calendar month during the term.

The Central Mercantile Bank entered into possession of the premises upon the commencement of the term and continued in possession thereof until on or about May 18, 1928, when it was merged with the Bank of the United States under and pursuant to the Banking Law (Cons. Laws, ch. 2) of the State of New York. The Bank of United States continued in possession of the said premises paying the rent therefor on the first day of each and every month to and including the 1st day of December, 1930, for the month ending December 31, 1930.

On December 11, 1930, the Superintendent of Banks took possession of the business and assets of the Bank of United States pursuant to the Banking Law of the State of New York for the purpose of liquidating the same. On that day the Bank of United States was insolvent. Its assets were insufficient to pay and the bank has been unable to pay its debts and obligations then matured and currently maturing. The bank still remains insolvent.

On July 7, 1931, the Superintendent of Banks notified the appellant that he had elected to repudiate the lease and that he would vacate the premises on or before July thirty-first. The premises were actually vacated by the Superintendent on August 15, 1931, and appellant was paid by the Superintendent for the use and occupation of the premises to that date.

The appellant never accepted any surrender of the premises, but on the contrary maintained that it would not consider the lease canceled and that it would continue to hold the bank under the terms of the lease.

Since the premises were vacated by the Superintendent of Banks on August 15, 1931, they have remained vacant and unoccupied. The landlord has not sublet the same nor has he received any rent or payment on account of the premises since that time.

In accordance with the provisions of the Banking Law appellant filed a claim for the rent to accrue under its lease. The claim was rejected and this action followed.

In this action the appellant demands judgment for the full amount of the rent for the balance of the term, viz., $193,000, less the amount paid by the Superintendent of Banks for the use and occupation of the premises from December 11, 1930, to August 15, 1931, viz., $7,333.33, or a net amount of $185,666.67. Appellant further demands that the Superintendent be directed to set apart such sum of $185,666.67, or at least the amount necessary to pay dividends on such claim equal to the dividends paid to other creditors of the bank. It further demands that out of such sum the Superintendent be directed to pay dividends on all rents which have accrued up to the date of the judgment to be entered herein and that he be directed further to pay dividends on rent monthly as it accrues for the balance of the term of the lease.

Respondent opposes the allowance of the claim on the ground that only such claims that were definite and certain when the Superintendent of Banks took possession of the assets of the Bank of United States, are entitled to participate in the distribution of its assets; that appellant’s claim was then, and is now contingent, and should, therefore, be disallowed.

The claim has been rejected below on the ground that appellant’s claim for rent to accrue after the Superintendent took possession is so contingent and uncertain that it may not participate with the general claims in the distribution of the assets of the bank.

It is contended by the appellant that when an ordinary corporation becomes insolvent, the only security which the creditors have is the assets which constitute the trust fund, created and existing to pay debts; that claims provable against the fund are primarily for debts,” technically so called; that when a banking corporation becomes insolvent, the creditors have not only the security of the assets but the additional security of the stockholders’ Lability, co-extensive with that of the bank, for all the contracts, debts and engagements of the bank (Banking Law, § 120) based on the constitutional provision imposing upon the stockholders Labihty for all the corporate LabiLties of every kind (Canst, art. VIII, § 7); and that this Labihty attaches when the contract is entered into, regardless of when or if a debt is ever created. It further contends that because of the comprehensive nature of the Labihty created by the Constitution, the Banking Law does not provide for proof or payment of debts ” but refers throughout to claims,” and that neither thé Constitution nor the Banking Law makes any distinction between claims nor gives the holder of claims which are'certain and fixed priority or preference over the holder of claims which are contingent.

In Kottler v. New York Bargain House, Inc. (242 N. Y. 28, 35), this court said that in a controversy between a landlord and an assignee for the benefit of creditors the claim of the landlord to participate in the assets by reason of a deficiency of rents accruing after the assignment must be rejected. The court approved the rule of the Massachusetts courts (Deane v. Caldwell, 127 Mass. 242; Towle v. Commissioner of Banks, 246 Mass. 161) that such claims fall outside of any possible statutory right to share in dividends ordered to be paid on claims which existed when the Superintendent took possession.

A distinction may be drawn between “ debts,” claims ” and “ liabilities,” and the provisions of the Banking Law may be construed as creating such a distinction, but it would seem best to adhere to the rule as stated by Cardozo, J., and concurred in by the court.

The judgment should be affirmed, with costs.

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

Judgment affirmed.


source: Caselaw Access Project

author: O’Beien, J.

license: Public Domain

text:
    Morris Welson, Respondent, v. Neujan Building Corporation, Appellant.
    (Submitted April 26, 1934;
    decided May 22, 1934.)

      Leo F. Potts and Daniel Mungall for appellant.
    There was no duty on the defendant to repair the premises. (Sticker v. Seril Realty Corp., 232 App. Div. 768; Hollman v. Kayell Realty Co., 120 Misc. Rep. 546; Kushes v. Ginsburg, 99 App. Div. 417; 188 N. Y. 630; Silverman v. Isaac, 183 App. Div. 542; Frank v. Mandel, 76 App. Div. 413; Schick v. Fleischhauer, 26 App. Div. 210; Freiot v. Jacobs, 209 App. Div. 334; Golob v. Pasinsky, 178 N. Y. 458; Marks v. Nambil Realty Co., 245 N. Y. 256; Junkermann v. Tilyou Realty Co., 213 N. Y. 404; Jaffe v. Harteau, 56 N. Y. 398.) No negligence on the part of the defendant was shown. (Samuels v. Terry Holding Co., 227 App. Div. 68; 253 N. Y. 593; Kraus v. Wolf, 253 N. Y. 300.)

      William Glatzer, Julius L. Rosenthal and Joseph L. Shankey for respondent.
   O’Beien, J.

Plaintiff, who leased from defendant the premises occupied by him as a tailor shop, slipped on a wet spot on the floor near the entrance and sustained personal injuries. The jury could infer from the evidence that the bottom of the door was one-half to three-quarters of an inch above the top of the sill and that water, which had been used by an employee of defendant in flushing the sidewalk, entered the shop through this aperture. The asserted right of action is based upon allegations that the building and store were so negligently and carelessly constructed and negligently maintained by defendant that the threshold entrance and doorstep entrance were in a defective and unsafe condition and that defendant had notice of such defect. The complaint also alleges that the washing of the sidewalk by defendant’s employee was performed in such a negligent manner as to cause a puddle to form on the floor of the shop.

Assuming careless construction and negligent maintenance of the door and sill, the failure to keep the premises in repair must, under the terms of the lease, be attributed to plaintiff. If the landlord had notice of defective construction, so had the tenant. Indeed, he had actual knowledge, for he testified concerning complaints made by him in relation to the condition of the door. Pursuant to the lease, “ the tenant shall and will keep said premises in good order and repair during the term aforesaid.” In view of this covenant, the refusal to charge that there was no duty upon defendant to repair the door or the door sill or to alter the space between the door and the door sill constitutes error. In the absence of fraud or of a covenant, a lessor does not represent that the premises are tenantable and may be used for the purpose for which they are apparently intended. (Steefel v. Rothschild, 179 N. Y. 273, 277; Widmar v. Healey, 247 N. Y. 94, 96.) Not only is there no covenant by the lessor and no evidence of fraud in the letting of the premises, but there is an assumption of liability by the tenant to keep them in repair. His injury may be directly traced to his failure to perform that obligation. The lessor was out of possession and, even if he made and broke a promise to remedy a defect, he is not liable in tort at the suit of his lessee. (Cullings v. Goetz, 256 N. Y. 287; Lafredo v. Bush Terminal Co., 261 N. Y. 323.)

The lease also provides that the tenant will keep the sidewalk clean and in good condition. Plaintiff testified that many times he cleaned the walk and an issue of fact arose from conflicting evidence whether, on the occasion of the washing which immediately preceded plaintiff’s injury, the work which was then performed by defendant’s employee was at the direction of defendant or by request of plaintiff. What effect the evidence relating to washing the walk and the submission of that issue to the jury may have had upon the verdict is impossible to determine. Certainly the ruling in respect to defendant’s duty to alter the space beneath the door requires a reversal.

The judgment of the Appellate Division and that of the Trial Term should be reversed and a new trial granted, with costs to appellant in all courts to abide the event.

Pound, Ch. J., Crane, Lehman, Hubbs and Crouch, JJ., concur.

Judgments reversed, etc.


author: Hubbs, J.

text:
    In the Matter of Jean B. Jennings et al., as Executors and Trustees under the Will of Walter Jennings, Deceased, et al., Appellants, against William Watt et al., as Members of the Town Board of Huntington et al., Respondents.

      (Argued April 17, 1934;
    decided May 22, 1934.)

      M. E. Harby for appellants.
    The Appellate Division erred in deciding that the State Engineer’s decision as to town boundaries would result in a change of the county line which only the Legislature could effect. (State v. St. Louis County, 117 Minn. 42; Polk’s Lessee v. Gentry, 1 Over. [Tenn.] 269; People v. Stephens, 71 N. Y. 527; United States v. Arredondo, 6 Pet. 691; The Confiscation Cases, 20 Wall. 99; Stoehr v. Wallace, 255 U. S. 239; Brown v. Mayor, 63 N. Y. 239; People ex rel. Dady v. Prendergast, 144 App. Div. 308; 203 N. Y. 1.) The State Engineer was authorized to decide a dispute as to jurisdictional boundaries between any towns of the State. He was not restricted to towns included in one county. (1 R. S. 182; Matter of La Rocca v. Flynn, 257 N. Y. 5; People v. Long Island R. R. Co., 194 N. Y. 130; Matter of Marchant v. Mead-Morrison Mfg. Co., 252 N. Y. 284; Tompkins v. Hunter, 149 N. Y. 117; Fire Dept. v. Stanton, 159 N. Y. 225; Trustees of Brookhaven v. Strong, 60 N. Y. 56; Town of Southampton v. Mecox Bay Oyster Co., 116 N. Y. 1; People v. Charbineau, 115 N. Y. 433; Matter of Washington St. R. Co., 115 N. Y. 442; Rumsey v. People, 19 N. Y. 41; Matter of City of New York, 217 N. Y. 1.)

      Isaac R. Swezey and Theodore I. Colyer for respondents.
    The State Engineer and Surveyor changed the boundary line, and did not define it. (Tiffany v. Town of Oyster Bay, 209 N. Y. 1; Sage v. Mayor, 154 N. Y. 61; Fulton L., H. & P. Co. v. State, 200 N. Y. 400.) The fact that the State Engineer and Surveyor located the boundary fine in the middle of Cold Spring harbor and that the town of Hungtington never objected thereto or disputed the same over a period of fifty years, does not prevent or estop the town of Huntington from asserting that it is not the correct location of the line. (Pollitz v. Wabash R. R. Co., 207 N. Y. 113; Brown v. Ward, 246 N. Y. 400;
      Wells v. Johnston, 171 N. Y. 324; People v. Santa Clara Lumber Co., 213 N. Y. 64.) Since the State Engineer and Surveyor had no power to define and locate the boundary line between the towns of Oyster Bay and Huntington, the line being coincident with the boundary fine between Suffolk and Queens counties, the action of the supervisors of the towns of Huntington and Oyster Bay, and of Suffolk and Queens counties in laying the dispute over the boundary fine before him and bis decision thereon was unauthorized and ultra vires and, therefore, the respective towns are not bound by the doctrine of acquiescence in the location of the boundary line as defined by him. (Matter of Niland v. Bowron, 193 N. Y. 180; Moore v. Mayor, 73 N. Y. 238; People v. Santa Clara Lumber Co., 213 N. Y. 64; Smith v. City of Philadelphia, 227 Penn. St. 423; De Kam v. City of Streator, 316 Ill. 123; Wickman v. City of Placerville, 147 Cal. 162; Minneapolis, St. P., R. & D. El. T. Co. v. City of Minneapolis, 145 N. W. Rep. 609; Eddy Valve Co. v. Town of Crown Point, 76 N. E. Rep. 536.)

      John J. Bennett, Jr., Attorney-General (Warren R. Gihnan, Henry Epstein and Edward L. Ryan of counsel), for People of the State of New York.
   Hubbs, J.

In 1932 relators caused to be delivered to the Supervisor of the town of Huntington, county of Suffolk, a petition praying that certain adjoining territory be annexed to the village of Lloyd Harbor, pursuant to the provisions of section 348 of the Village Law (Cons. Laws, ch. 64). The Town Board of the town decided that the petition did not conform to section 348 because the westerly boundary of the territory described in the petition extended beyond the easterly high-water mark of Cold Spring harbor and the westerly boundary of the town, of Huntington extended only to such high-water mark. It was decided, therefore, that part of the territory described in the petition was outside of the boundaries of the town of Huntington and within the town of Oyster Bay, Nassau county (formerly part of Queens county). The Town Board, therefore, refused its consent to the annexation to the village of Lloyd Harbor of the territory described in the petition. The order of certiorari granted herein presents the question as to the location of the boundary line betweenThe town of Huntington and the town of Oyster Bay. The Appellate Division confirmed the decision of the Town Board and dismissed the proceeding.

Settlements were made in the town of Huntington in the year 1653, and deeds were procured from the Indians. In 1666, Governor Nichols, the English Governor of the Colony of New York, granted a patent to that town describing its boundaries. In 1683, an act was passed by the Legislature of the colony dividing the colony into counties. The town of Huntington became a part of the county of Suffolk and the town of Oyster Bay a part of Queens county. In 1688, Governor Dongan granted a patent to the town of Huntington. In 1694 the town received what is known as the Fletcher patent. The patent to the town of Oyster Bay was granted in 1677 by Governor Andros. The Constitution of the State of New York as originally adopted by paragraph No. 36 confirmed those patents.

In 1788, by chapter 63 of the laws of that year, the State was divided into sixteen counties, including Queens and Suffolk, and by chapter 64 the counties were divided into towns. The town of Oyster Bay in Queens county was an eastern border town and the town of Huntington in Suffolk county was a western border town. The line between the two towns constituted the line between the two counties according to the original enactment. The physical location of that line is the question in dispute in this proceeding.

From the earliest colonial days, at least, down to the year 1860, there occurred various disputes between the two towns as to the correct location of the boundary line in question. The early grants to the two towns were ambiguous. From the descriptions in those grants, it was difficult if not impossible to locate upon the ground the exact boundary line. That fact is made clear from the various opinions rendered at the Appellate Division and in this court in the case of Tiffany v. Town of Oyster Bay (141 App. Div. 720; affd., 209 N. Y. 1).

In 1797 the Legislature, by chapter 54, authorized the Surveyor-General (thereafter designated State Engineer and Surveyor) to survey and mark the bounds of counties. By 1 Revised Statutes, chapter 8, title 6, he was directed to retain in his office a map of the State and designate thereon the bounds of all towns and counties erected or altered by the Legislature. In case he was unable from the descriptions to delineate upon the map the bounds of any town, he was directed to cause the Supervisor of the town to cause a survey to be made. Sections 5 and 6 of the act read:

“ § 5. Whenever a dispute shall arise between the officers of two or more towns, respecting the bounds of either of such towns, on the same being represented to the surveyor-general, he shall hear the allegations and proofs of the parties, and if necessary, shall direct a survey to be made, and shall determine such dispute.

“ § 6. Such determination shall be filed in the office of the secretary of state, and shall be conclusive upon the subject, until the legislature shall, by law, otherwise direct.”

The towns of Huntington and Oyster Bay applied to the State Engineer and Surveyor, the successor of the Surveyor-General (Laws of 1848, ch. 72), to locate the jurisdictional boundary between the two towns. He made a determination locating the line in conformity with the provisions of the statute. His decision was printed as chapter 530 of the Laws of 1860.

His decision located the boundary line west of the territory involved in this proceeding, and if that decision is binding and in effect, then the territory herein involved all lies within the town of Huntington.

It is undisputed that the decision so made and recorded was acquiesced in by both towns from that time down to the commencement of this proceeding, a period of over seventy years. Each town exercised jurisdiction up to the boundary fine so located and levied and collected taxes in accordance with such established line. Official maps have treated the line so located as the correct boundary line and the Legislature has never by enactment changed the line or questioned it in any way.

The respondents contend and the Appellate Division has decided that the act of the State Engineer and Surveyor was illegal, without jurisdiction and void because it was an attempt to change a boundary line between counties which could be done only by an act of the Legislature. We cannot agree with such conclusion.

It must be borne in mind that, at the time, the boundary line in question was not marked by monuments; its description was ambiguous and indefinite, and it had been the subject of disputes since early colonial times.

The Legislature, by chapter 54 of the Laws of 1797, authorized the Surveyor-General to survey and mark the boundaries of the counties of the State. 1 Revised Statutes, chapter 8, title 6, sections 1 to 7, established a tribunal to settle disputes between towns about boundary lines, by providing that the Surveyor-General should upon the application of towns “ hear the allegations and proofs of the parties, and if necessary, shall direct a survey to be made, and shall determine such dispute,” the determination to be filed in the office of the Secretary of State and to “be conclusive upon the subject, until the legislature, shall, by law, otherwise direct.”

It seems clear to us that the Legislature did not attempt to confer power upon the Surveyor-General to establish new boundary lines. It did in unmistakable terms authorize him to determine the physical location of an existing boundary line by making a line, which was vague, indefinite and uncertain, definite and certain, and thereby determine disputes between towns. (State ex rel. Simpson v. County of St. Louis, 117 Minn. 42.)

Respondents concede that if the State Engineer had jurisdiction over the matter, his decision would have been binding and conclusive. It is contended that his decision did not have that effect because the boundary line in question between the towns was also the boundary line between the counties and that he had no jurisdiction to change a county boundary line. We believe that there are at least two conclusive answers to such contention: First, he did not change the county line, but simply physically located it, and made the line which was uncertain and floating, definite and certain. Second, having jurisdiction to locate the town line, his act in so doing did not have the effect of changing the county line though the town and county lines happened to be co-incident. As the same line constituted the town and county boundary, it was proper for him, in fixing the town line, to locate the county line, as that was incidental to locating the town line. (Rhode Island v. Massachusetts, 12 Pet. [U. S.] 657; Handly’s Lessee v. Anthony, 5 Wheat. [U. S.] 374; Virginia v. West Virginia, 11 Wall. [U. S.] 39, 53; People v. Hillman, 246 N. Y. 467.)

Each town had claimed the territory in question by virtue of original grants of contiguous territory. The grants attempted by description to indicate the common boundary. The descriptions contained in the grants were so indefinite and ambiguous that the exact location of the boundary became a subject of dispute. The determination of the location on the ground of the boundary line presented a question of fact. When that question of fact was determined and the line located in accordance with the findings, the line so located did not constitute a new boundary line. It was the boundary line described in the grants physically located on the ground. The fact that when so located it corresponded with the boundary line between the two counties did not constitute the establishment of a new boundary line between the counties in violation of the law which prevented a change in a county boundary line except by the Legislature. (Rhode Island v. Massachusetts, supra; Virginia v. West Virginia, supra.)

We have no doubt that the Legislature had the power to enact that the Surveyor-General should have jurisdiction to settle disputes between towns as to boundary lines and to locate the lines in dispute. As to that, the statute is clear and not subject to a contrary construction. In fact, the respondents so concede. Therefore, we conclude that the line established by the State Engineer and Surveyor, as described in chapter 530 of the Laws of 1860, was made under authority of law, was within his jurisdiction, and was binding upon the towns. (People ex rel. Case v. Collins, 19 Wend. 56; Osterhoudt v. Rigney, 98 N. Y. 222, 234; People ex rel. Loughran v. Railroad Comrs., 158 N. Y. 421, 428.)

In fact, the determination has apparently been recognized and approved by the Legislature by subsequent enactments. (Laws of 1872, ch. 105; Laws of 1886, ch. 667. See Revisers’ note, 1 R. S. [6th ed.] p. 204.)

The case of Tiffany v. Town of Oyster Bay (209 N. Y. 1, 11), relied upon by respondents, involved the question of title to land below the low-water mark on the westerly shore of Cold Spring harbor, adjacent to the upland owned by the plaintiff in that case. The land there involved was across the harbor and westerly of the territory here involved. In that case, this court was required to determine whether the so-called Andros patent of September 29, 1677, defining the territory of the town of Oyster Bay, included the lands there in question.

In deciding that the patent covered the land in question, the opinion states that “ The whole of the land under water in Cold Spring harbor and the bay .known as Oyster bay was granted to the town of Oyster Bay by the Andros patent of 1677.” Standing alone, the statement would sustain the contention of the respondents that the town of Huntington, situate on the east side of Cold Spring harbor, extended only to the high-water line. The town of Huntington was not a party to the Tiffany suit or in any way represented in that suit.

The respondents, nevertheless, contend that the decision in that case has the effect of depriving the town of Huntington of territory within its boundaries as established by the determination of the State Engineer and Surveyor over fifty years before. That cannot be.

The State Engineer and Surveyor, in locating the boundary, pursuant to the provisions of the statute, acted judicially. (People ex rel. Loughran v. Railroad Comrs., supra, at p. 428; Van Wormer v. Mayor, 15 Wend. 262.) His decision had the effect of a judgment between the parties, the towns of Huntington and Oyster Bay. It definitely and finally established their rights and became conclusive upon them until changed according to law. It has never been altered in any way.

The decision in the Tiffany case, in which the town of Huntington was not a party, did not and could not deprive it of any part of its territory. (Deposit Bank v. Frankfort, 191 U. S. 499; Ashton v. City of Rochester, 133 N. Y. 187, 192.)

Respondents, landowners in the town of Huntington, are in privity with the town of Huntington and may avail themselves of the decision of the State Engineer and Surveyor which located the boundary line. (Ashton v. City of Rochester, supra, at p. 192; Oklahoma v. Texas, 256 U. S. 70.)

As a matter of fact, the decision of the State Engineer and Surveyor, made in 1860, was not referred to in the opinion in the Tiffany case and was not called to the attention of the court.

The order of the Appellate Division should be reversed, and the action of the Town Board vacated, with costs, and the respondents directed to deliver to the trustees of Lloyd Harbor relators’ petition, with the Town Board’s consent, as required by section 348 of the Village Law.

Pound, Ch. J., Grane, Lehman, O’Bbien and Crouch, JJ ., concur.

Ordered accordingly.


author: Pound, Ch. J.

text:
    Hyman Nelson, Appellant, v. Benjamin Hirsch et al., Defendants, and Benjamin Puritz, Respondent.
    (Submitted April 16, 1934;
    decided May 22, 1934.)

      Louis P. Goldberg and Samuel S. Posh for appellant.
    Under section 505 of the Civil Practice Act, a direction to pay moneys to an officer of the court can be enforced by contempt proceedings even though an execution might be issued. (Geller v. Flamount Realty Corp., 260 N. Y. 346.)

      Joseph A. Seidman for respondent.
    The order of the Appellate Division made in the action is not a final order affecting a substantial right, and is one made in the exercise of discretion, and is not reviewable by the Court of Appeals. (Public Nat. Bank v. National City Bank, 261 N. Y. 316; McGowan v. Metropolitan Life Ins. Co., 259 N. Y. 454; Matter of Brennan v. Board of Education, 245 N. Y. 8; Ray v. N. Y. Bay Ext. R. R. Co., 155 N. Y. 102; Geller v. Flamount Realty Corp., 260 N. Y. 346; Lewin v. Lehigh Valley R. R. Co., 169 N. Y. 336; Gray v. Vought, 243 N. Y. 585; Cochrane v. Ingersoll, 73 N. Y. 613; Watrous v. Kearney, 79 N. Y. 496; Carrington v. Florida R. R. Co., 52 N. Y. 583; Witherbee v. Witherbee, 55 App. Div. 181.)
   Pound, Ch. J.

This case comes to us on an appeal from an order of the Appellate Division reversing “ on the law and the facts ” an order of the Special Term which adjudged respondent Puritz in contempt for failure to pay over $8,000 to a receiver appointed in the action as directed by the final judgment. The appeal was allowed by the Appellate Division on a certified question which reads: “ Was the order granting on this record plaintiff’s motion to punish the defendant Puritz for contempt properly made? ”

The judgment was obtained in an action brought under section 60, subdivisions 1 and 2, of the General Corporation Law (Cons. Laws, ch. 23).

“ 1. To compel the defendants to account for their official conduct, including any neglect of or failure to perform their duties, in the management and disposition of the funds and property, committed to their charge.

“ 2. To compel them to pay to the corporation, or to its creditors, any money and the value of any property, which they have acquired to themselves, or transferred to others, or lost, or wasted, by ©r through any neglect of or failure to perform or other violation of their duties.”

Without considering whether an order punishing for contempt may ever properly be made in such an action, we must take heed that the question whether this order was properly made was before the Appellate Division and the order below reversed on the law and the facts. The order was a discretionary one.

Where, on a reversal by the Appellate Division, final judgment or a final order is rendered upon new findings of fact, and the appeal is properly before us, we may examine the facts and determine for ourselves what a sound discretion requires. On such an examination we find that Puritz refused to pay to the receiver of Hirsch-Lasky Corporation $8,000, which he had misappropriated. For all that appears, the money could be collected by execution. It was not ear-marked as a specific or particular fund directed or required to be paid over. Even if the" court had the‘power to grant an order in contempt proceedings, it was not legally bound to do so. The appellant was not as a matter of law entitled to an order committing respondent for contempt. (Public Nat. Bank v. City Nat. Bank, 261 N. Y. 316, 322.)

The question certified is not a question of law (Canst, art. VI, § 7, subd. 4), but one of discretion only, and the appeal should be dismissed, with costs.

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

Appeal dismissed.


author: O’Brien, J.

text:
    In the Matter of the City of New York Relative to Acquiring Title to Real Property Required for the Widening of Chrystie Street, in the Borough of Manhattan. W. Arthur Cunningham, as Comptroller of the City of New York, et al., Appellants; Fannie A. Kallis, et al., Respondents.

      (Argued April 16, 1934;
    decided May 22, 1934.)

      Paul Windels, Corporation Counsel (Joseph F. Mulqueen, Jr., Paxton Blair and Joseph J. Dunn of counsel), for appellants.
    The interest which is now claimed forms no part of the just compensation to which respondents were entitled for the taking of their property in condemnation. (Hamersley v. Mayor, 56 N. Y. 533; Matter of City of New York [Union Ferry Co.], 245 N. Y. 545; Matter of City of New York [Surf Ave.], 262 N. Y. 652; Matter of City of New York [W. 151st St.], 222 N. Y. 370; Matter of City of New York [Gouverneur Slip Pier], 159 App. Div. 433; 210 N. Y. 451; Matter of Minzesheimer v. Prendergast, 144 App. Div. 576; 204 N. Y. 272; Matter of Mott Haven Canal Docks, 196 N. Y. 175; Matter of City of New York [Westchester Ave.], 217 App. Div. 381.) The city’s appeal from the final decree did not relieve respondents of their duty, nor extend their time to serve the demand without which interest would cease to run upon the expiration of six months from the filing of the final decree. (Matter of City of New York [Union Ferry Co.], 245 N. Y. 545; Matter of Edelmuth v. Prendergast, 144 App. Div. 895; 202 N. Y. 602; Matter of City of New York [White

      Plains Road], 187 App. Div. 355; Matter of City of New York [Surf Ave.], 262 N. Y. 652; Smith v. Board of Education, 208 N. Y. 84; McGovern v. City of New York, 236 N. Y. 508; Matter of City of New York [Elm St.], 239 N. Y. 220.)

      Louis Salant for Fannie A. Kallis et al., respondents.
    The city’s appeals from the award stayed the ewners from serving a demand until after those appeals were decided. (Civ. Prac. Act, § 57Í; Cons. Laws, ch. 22, ' § 37; Ackert v. City of New York, 156 App. Div. 836; Woodward-Brown Realty Co. v. City of New York, 203 App. Div. 625; Matter of City of New York [Upper New York Bay], 223 App. Div. 731; 248 N. Y. 64.)

      Jay Leo Rothschild and Louis Rivkin for 19 and 146 Rivington Street Corporation, amicus curiae.

    Interest continues to run, pending appeals by the city from an order confirming condemnation awards, notwithstanding the omission of the claimant, in the meantime, to file the demand contemplated by section 981 of the charter of the city of New York. (People ex rel. Onondaga County Sav. Bank v. Butler, 147 N. Y. 164; Matter of Meyer, 209 N. Y. 386; Matter of City of New York [Mount Vernon Ave.], 199 N. Y. 559; American Historical Society v. Glenn, 248 N. Y. 445; Matter of City of New York [ Upper New York Bay], 248 N. Y. 64; Matter of City of New York [East River Park], 209 App. Div. 662; 239 N. Y. 524.)
   O’Brien, J.

Respondents Kallis and Gerstle were vested with the fee of real property which was acquired by the city of New York in a proceeding for the widening of Chrystie street. On January 12, 1931, the final decree making an award in that proceeding was filed at Special Term. That award constitutes compensation for the taking of property and includes interest from the date of vesting of title in the city to the date of the final decree. It was affirmed by the Appellate Division July 6, 1932, and later by this court. The order and judgment of this court on remittitur were, by order of the Special Term dated October 25, 1932, made the order and judgment of the Supreme Court. No demand for payment of this award nor interest thereon was made upon the Comptroller prior to December 22 and December 27, 1932, but the Appellate Division has granted respondents’ motion to the extent of awarding interest from July 12, 1931, the date six months after the entry of the final decree at Special Term, to December 27, 1932, the last date of demand.

Section 981 of the Greater New York Charter provides: Interest shall cease to run on the sums awarded as damages six months after the date of the filing of the final decree * * * unless within that time demand therefor, in writing, be served upon the comptroller.” (Laws of 1915, ch. 606.) The interest for which this section provides is no part of the compensation for the taking of property. It is a penalty for delay in making payment of that compensation.

The final decree, like any final order in a special proceeding, is the mandate which determines the rights of the parties. When that decree or order is left undisturbed on appeal, it remains the same as when entered at Special Term. In the case of an affirmance, therefore, the order as entered on remittitur does not affect the status of that final decree. Twice, at least, has this court so decided on facts which the records on appeal show to be so nearly identical with those now before us as to admit of no substantial distinction. Our first decision was rendered in Matter of City of New York (Union Ferry Co.) (245 N. Y. 545). In another case (Matter of City of New York [Surf Ave.], 262 N. Y. 652) the facts were enlarged by reason of the giving of a general release, but the majority of this court was of the opinion that the final decree, within the meaning of section 981 of the Greater New York Charter, was the decree as originally entered at Special Term and affirmed. The recipient of an award can always guard his right to interest by promptly serving his demand within six months of the entry of the final decree at Special Term. Nothing in section 571 of the Civil Practice Act nor in section 995 of the Greater New York Charter (Laws of 1915, ch. 606; amd. Laws of 1917, ch. 259) prevents him. Execution of the decree pending appeal is stayed by those provisions but, while the municipality is protected during such time from coercive payment, the owner of the award is not prohibited from securing his claim to interest.

We have always recognized a distinction, in this class of cases, between an affirmance and a modification. Illustration is found in Matter of City of New York (East River Park) (239 N. Y. 524) and Matter of City of New York (Upper New York Bay) (248 N. Y. 64). The decree as modified becomes the final decree and the six months within which the demand must be served begins to run from the date of modification rather than from the date of original entry of the decree at Special Term. In the case at bar the final decree entered at Special Term January 12, 1931, remained unaffected by the appeal. It never was changed but continued to constitute the final decree. Since no demand was served within six months of the date of its filing at Special Term, the running of interest ceased on the expiration of that time.

The order of the Appellate Division in so far as appealed from should be reversed and that of the Special Term affirmed, with costs in the Appellate Division and in this court.

Pound, Ch. J., Crane, Lehman, Hubbs and Crouch, JJ., concur.

Ordered accordingly.


author: Crane, J.

text:
    In the Matter of the Claim of Pasquale Sciachitano, against Spencer Forbes, Inc., et al., Appellants, Impleaded with Others. State Industrial Board, Respondent.
    (Argued April 17, 1934;
    decided May 22, 1934.)

      William B. Davis and E. C. Sherwood for appellants.
    The statute does not authorize the Industrial Board to make an award against the general contractor and its insurance carrier under the circumstances of this case. (Cons. Laws, ch. 67, §§ 52, 54, subd. 7.)

      John J. Bennett, Jr., Attorney-General (John R. O'Hanlon and Henry Epstein of counsel), for respondent.
    The award made against the general contractor and its insurance carrier was proper. (Cons. Laws, ch. 67, §§50 and 56; Casey v. Shane, 221 App. Div. 660; Clark v. Monarch Engineering Co., 129 Misc. Rep. 145; Lawrence v. Fox, 20 N. Y. 268.)
   Crane, J.

The claimant, a masonry laborer, received serious injuries on March 27, 1931, while engaged in his regular occupation on the construction of a public school building in the county of Queens, New York.

Some time prior to October, 1930, Spencer Forbes, Inc., entered into a general contract with the Board of Education of the City of New York for the construction of a building for Public School No. 123, at One Hundred and Nineteenth avenue and One Hundred and Forty-fifth street, Jamaica, Queens county, New York, for the sum of $140,000. Spencer Forbes, Inc., entered into an agreement with one Joseph Chiarello, a masonry contractor, whereby Chiarello was to supply and supervise all of the craftsmen and laborers necessary for the masonry requirements of the contract. He hired a masonry foreman, John Titone, and all of the necessary masons and laborers, including the claimant. At the end of each week Chiarello would prepare a payroll for his men and submit it to the general contractor’s superintendent of construction, Albert Gardella, who would then pay over to- Chiarello the moneys to meet this payroll, charging the total amount thereof against Chiarello’s account.

The State Industrial Board found that the claimant, Pasquale Sciachitano, was a mason laborer employed by Joseph Chiarello. The Federal Surety Company, with the home office at Davenport, Iowa (a stock company), issued to Chiarello what is called a universal workmen’s compensation policy, effective from November 12, 1930, to November 12, 1931. It covered masonry work conducted at or from the locations and premises defined, and operations not on the premises. The location defined in the declaration was the place of business of Joseph Chiarello, 317 Woodbine street, Brooklyn, N. Y., “ and elsewhere in New York State.” It is conceded that the policy was in full force and effect and covered this claimant’s work and occupation on the day of the accident, March 27, 1931, although it expired on March 29th, two days thereafter, by reason of notice of cancellation given by the company.

Six months thereafter, and on September 11, 1931, the Federal Insurance Company went into the hands of a receiver, and the award in this case has been made, not against Chiarello and the Federal Insurance Company or its assets, but against the general contractor, Spencer Forbes, Inc., and its insurance carrier, The Travelers Insurance Company.

As we have said, the State Industrial Board has found that Chiarello, the subcontractor, was the employer of Pasquale Sciachitano, the claimant, and, as just stated, Chiarello on the day of the accident was insured and covered as to this claimant by a workmen’s compensation policy issued by the Federal Surety Company. How then does it come about that the Industrial Board could have made an award against the general contractor and its insurance carrier? It has done so upon the theory that it was the duty of Chiarello, the subcontractor, not only to secure compensation to his injured workman, but to go much further, and secure its continuance up to the point of payment. In other words, his duty under the statute was to secure his employees against the insolvency of the insurance carrier. We do not so read the statute. The finding on this specific point by the Board was: Said Joseph Chiarello is the subcontractor primarily hable for the payment of compensation to the said Pasquale Sciachitano for the injuries sustained herein but the said Joseph Chiarello had not secured the payment of compensation for said employee by keeping insured the payment of such compensation in a manner prescribed by section 50 of the Workmen’s Compensation Law. The award hereinafter set forth is, therefore, made pursuant to section 56 of the Workmen’s Compensation Law against the general contractor and its insurance carrier.”

Section 56, referred to, reads as follows: A contractor, the subject of whose contract is, involves or includes a hazardous employment, who subcontracts all or any part of such contract shall be hable for and shall pay compensation to any employee injured whose injury arises out of and in the course of such hazardous employment, unless the subcontractor primarily hable therefor has secured compensation for such employee so injured as provided in this chapter.”

Section 50 states how compensation shall be secured: 2. By insuring and keeping insured the payment of such compensation with any stock corporation or mutual association authorized to transact the business of workmen’s compensation insurance in this state.”

With this law Chiarello, the subcontractor, had fully comphed. The Federal Surety Company was a stock corporation authorized to transact the business of workmen’s compensation insurance in this State. This authority to do business permitted Chiarello to take its pohcy to cover his workmen without further inquiry regarding its financial responsibility; the Superintendent of Insurance looked after that under the regulations provided by statute (Workmen’s Compensation Law [Cons. Laws, ch. 67], § 54, subd. 7). This insurance policy was in force and effect on the day of the accident, so that within the exact and precise wording, as well as the meaning of section 56, the contractor, Spencer Forbes, Inc., was not liable to pay compensation to Pasquale Schiachitano, as the subcontractor primarily Hable had secured compensation for such injured employee.

The claimant was not without remedy. He had the same remedy, no more no less, that the employees of any employer have who has taken out a workmen’s compensation pohcy. There is the claim against the employer which is only released by payment. There is also the claim against the assets of the insolvent insurance company, or the security deposited with the Superintendent of Insurance, pursuant to law. These are the remedies open to any injured workman whose employer has secured workmen’s compensation. There is no reason in giving to the employees of a subcontractor an additional and greater right than is given to the employees of the general contractor. The purpose of section 56 is to secure a Hke remedy to aU employees, which is, that compensation for injury may be secured as provided in section 50 of the Workmen’s Compensation Law.

The award, therefore, against Spencer Forbes, Inc., and the Travelers Insurance Company is reversed.

There is evidence in this case touching the agreement between Spencer Forbes, Inc., and Chiarello as to which no findings have been made. The reasons assigned by the Board for making the award rendered it unnecessary to consider this evidence. We, however, shaU send this case back for a new hearing and reconsideration instead of dismissing the claim, as it may be that the Board will now want to make some finding upon the claim put forward by the appellant, that Spencer Forbes, Inc., had agreed to insure Sciachitano, and to charge the amount of the premiums to Chiarello.

Spencer Forbes, Inc., under its contract with the Board of Education could nob sublet any part of the work without the consent of the Board. Its arrangement with Chiarello was oral and for the purpose of keeping the Board of Education in ignorance of Chiarello’s employment. He testified as to his arrangement with Mr. Fuld, president of the Spencer Forbes, Inc., as follows: “ I said inasmuch as the Board of Education don’t want to know you are sub-letting this brickwork, we did not enter into a contract and as long as the union knows you are doing the job, I will supply the men but you are doing the masonry work, you supply the insurance, you cover the insurance. Q. You stated he will cover the insurance? A. Yes, he will cover the insurance. Compensation insurance and public liability. In other words, the men in reality were working for him, I said ‘ If it hits $21,000.00 I do not get anything, if it hits less than that, providing all bills are paid, labor, materials, and compensation, whatever is left below $21,000.00 is mine and what is over I will pay back.’ That is what we call an ' upset price.’ That was the agreement with Mr. Fuld.”

The claimant is now entitled under our present ruling to have the Board consider this evidence and determine for him whether any such agreement was made by the general contractor and if so whether it enures to the benefit of the claimant so as to entitle him to an award. There is some evidence that Chiarello’s insurance, taken out with the Federal Surety Company, was in reality to cover work he was doing at Westhampton Beach, Long Island, and that in view of the arrangement with the general contractor, he failed to pay a premium on the policy, which caused its cancellation. It was in force, however, on the day of the accident, because the cancellation notice did not take final effect until two days after the accident. The general contractor, however, did not understand, neither did Chiarello, that this policy was to cover the work on the public school. If Chiarello’s statement be true — and we are far from suggesting that it is — the Spencer Forbes, Inc., agreed to takeout workmen’s compensation insurance for all the masons just as if they were its employees, because it did not desire to have the Board of Education know that it was subletting the work. If the general contractor made such an agreement for such a purpose it may enure to the benefit of Sciachitano. Whether the Travelers Insurance Company would be hable is another matter, as its policy provided that it shall not apply as respects any such contractor or such subcontractor if he has secured compensation for his employees as provided and required by such Workmen’s Compensation Law. ’ ’ These matters are mere suggestions and stated here as a reason for sending this case back for a rehearing instead of a dismissal of the claim. The facts must first be determined by the Workmen’s Compensation Board, and until then we do not undertake to say what the legal consequences should be.

The order of the Appellate Division should be reversed and the award of the State Industrial Board set aside and the matter remitted to the State Industrial Board for a rehearing in accordance with this opinion, with costs ■to the appellants against the State Industrial Board in the Appellate Division and in this court.

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

Ordered accordingly.


text:
    The Long Beach Trust Company, Respondent, v. Irving G. Warshaw, Appellant.
    (Argued April 26, 1934;
    decided May 22, 1934.)

      H. H. Nordlinger and Maxwell Shapiro for appellant.
    In the case of mutual debts it is only the balance which is the real or just sum owing by or to the insolvent. (Gerseta Corp. v. Equitable Trust Co., 241 N. Y. 418; Rothschild v. Mack, 115 N. Y. 1; Richards v. La Tourette, 119 N. Y. 54; Hughitt v. Hayes, 136 N. Y. 163; Matter of Hatch, 155 N. Y. 401; Building & Engineering Co. v. Northern Bank, 206 N. Y. 400; Curtis v. Davidson, 215 N. Y. 395; Carnegie Trust Co. v. Kistler, 89 Misc. Rep. 404.) The language and general scheme of the Banking Law (Cons. Laws, ch. 2) and the rules in analogous situations all lead to the conclusion that the requirement of filing a proof of claim relates only to claimants who desire to receive dividends from the insolvent estate, and not to persons actually or apparently indebted to the insolvent bank who claim defenses or offsets against such indebtedness. (Cons. Laws, ch. 2, § 76; Bank of U. S. v. Braveman, 259 N. Y. 65; Taylor v. Mayor, 82 N. Y. 10; Matter of Sampter, 170 Fed. Rep. 938; Matter of Manning, 4 Fed. Supp. 922; Matter of Richmond Hill Electrical Supply Co., 47 Fed. Rep. [2d] 948; Matter of Wenar Millinery Co., 1 Fed. Rep. [2d] 385; 4 Fed. Rep. [2d] 77; Matter of Bickmore Shoe Co., 263 Fed. Rep. 926; Matter of Sanderson, 160 Fed. Rep. 278; Matter of Muskoka Lumber Co., 127 Fed. Rep. 886.)

      Jules Haberman for respondent.
    Defendant is barred from asserting his claim because of his failure to file a proof of claim and to commence an action within the time limited therefor as required by the provisions of the Banking Law. (Matter of Societa, etc., Di Savoia v. Broderick, 260 N. Y. 260; Matter of Horowitz, 235 App. Div. 248; Lafayette Trust Co. v. Beggs, 213 N. Y. 280; Matter of Egan, 258 N. Y. 334; Matter of Howell, 237 App. Div. 56; Matter of Bank of United States [Ravitch], 237 App. Div. 76; Walmor, Inc., v. Levay, 238 App. Div. 78; Bank of United States v. Frost, 142 Misc. Rep. 589.)
   Pound, Ch. J.

The action is on a promissory noue in the principal amount of $5,300. The complaint allows a credit against this sum of $329.78, and claims a net balance of $4,970.22. The answer admits the essential allegations of the complaint, but pleads “ for a separate and distinct defense and by way of setoff and counterclaim ” the rendition by the defendant (who is an attorney) to the plaintiff of legal services of the value of $5,000. The answer does not demand affirmative judgment, but only a dismissal of the complaint.

The substantial question presented is whether the counterclaim is barred by failure to file a claim with the Superintendent of Banks pursuant to section 72 of the Banking Law (Cons. Laws, ch. 2). If not, an issue of fact is raised. The court at Special Term, in denying the motion for summary judgment, necessarily so held. The Appellate Division reversed only on the law on the ground that the counterclaim interposed by the defendant is barred by the failure of the defendant to file his claim thereon with the Superintendent of Banks as required by the Banking Law.”

Section 76 of the Banking Law reads as follows: “ In all actions or proceedings instituted against such corporation or banker while the superintendent is in possession of its property and business, the plaintiff shall be required to allege and prove that the claim upon which the action is instituted was duly filed and that eighty days have elapsed since the expiration of time for filing said claim and that said claim has not been accepted, or in the case of an action upon an account as to which no claim has been presented the plaintiff shall be required to allege and prove that such account appeared upon the books and records, that eighty days have elapsed since the last date fixed in the notice to creditors for presenting claims and making proof thereof and that such account has not been accepted.”

This court has held (Matter of Societa, etc., Di Savoia v. Broderick, 260 N. Y. 260) that the Superintendent has no power to accept claims after the time provided by the statute. The question remains whether failure to file a claim bars its assertion as an offset to a claim in favor of a bank.

In the case of mutual debts it is only the balance which is the real or just sum owing by or to the insolvent. (Gerseta Corp. v. Equitable Trust Co., 241 N. Y. 418, 424.) If claimants desire to receive dividends from the insolvent estate the Banking Law requires them to file a proof of claim. If claimants desire to set off the indebtedness of the bank to them, they are not by the statute deprived of the right to do so by failure to file a claim. (Taylor v. Mayor, 82 N. Y. 11, 19, 21; Norfolk & Western Ry. Co. v. Graham, 145 Fed. Rep. 809, 811, 812.) This is a case where the right to sue on a debt and the right to use the debt as an offset are not equivalent. The statute in question is not to be extended beyond its terms. A set-off is not an action. The statute refers only to actions “ instituted ” against the bank.

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

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

Judgment accordingly.


author: Crouch, J.

text:
    The People of the State of New York, Respondent, v. Robert Washington, Appellant.
    (Argued April 20, 1934;
    decided May 22, 1934.)

      Clyde Dart and Edward T. Tighe for appellant.
    It was proper to sentence the appellant, a second offender, to an indeterminate sentence, as provided by the trial court and by the Appellate Division. (People v. Roper, 259 N. Y. 170; People v. Pechota, 209 App. Div. 164; 240 N. Y. 574.) An indeterminate sentence must be regarded as a sentence for the maximum term prescribed. (People v. Adams, 176 N. Y. 351; Matter of Gargan v. Sculley,
      82 Misc. Rep. 667; People ex rel. Clark v. The Warden, 39 Misc. Rep. 113; People ex rel. Haupt v. Lasch, 122 Misc. Rep. 223; United States ex rel. Paladino v. Commissioner of Immigration, 43 Fed. Rep. [2d] 821; People ex rel. Brackett v. Kaiser, 209 App. Div. 722; Commonwealth v. Brown, 167 Mass. 144; Hubert v. Fenton, 115 Neb. 818; Commonwealth v. Kalck, 239 Penn. St. 533; Matter of Lee, 177 Cal. 690.)

      William Copeland Dodge, District Attorney (Le Roy Mandile of counsel), for respondent.
    The judgment of the Appellate Division vacating the sentence of the trial court and prescribing that the punishment for a second felony offender convicted of first degree robbery shall be not less than thirty nor more than sixty years, is correct. (People v. Adams, 176 N. Y. 351; People ex rel. Mason v. Brophy, 235 App. Div. 432; People v. Raymond, 96 N. Y. 38; Wojtkowiak v. Evangelical Lutheran St. John’s Church, 236 App. Div. 411; People v. Dwyer, 215 N. Y. 46.) A flat sentence should be imposed upon the appellant between the limits of thirty and sixty years, and the Appellate Division in sentencing the defendant to an indeterminate sentence was in error. (People ex rel. Steckler v. Warden, 259 N. Y. 430.)
   Crouch, J.

The appellant was convicted of robbery in the first degree as a second offender. He has been sentenced to the indeterminate term, the minimum of which shall be not less than thirty years and the maximum of which shall be not more than sixty years.” (People v. Washington, 237 App. Div. 603; 240 App. Div. 1028.) The appellant concedes and asserts that his sentence must be indeterminate, but he contends that it should be for a term of not less than fifteen to thirty years [the maximum term for a first offender], or in the trial court’s discretion to any longer indeterminate sentence not to exceed thirty to sixty years [twice the term prescribed for a first offender].”

Since we disagree with the view that the sentence must be for an indeterminate term, it becomes unnecessary to deal with the point of difference between the appellant and the Appellate Division. The difficulty arises from the language of Penal Law, section 2125, as amended by the Laws of 1932, chapter 275, which reads as follows: Robbery in the first degree is punishable by imprisonment for an indeterminate term the minimum of which shall be not less than ten years and the maximum of which shall be not more than thirty years.”

It is said that the section makes mandatory an indeterminate sentence in the case of a second offender. The argument is that the phrase an indeterminate term ” would otherwise be superfluous, since by the provisions of section 2189 of the Penal Law a first offender must, in all cases, be sentenced to an indeterminate term. The conclusion does not necessarily follow from the argument, and there are good reasons for a contrary conclusion.

The same Legislature which enacted the statute in question considered but failed to pass bills amending section 1941 of the Penal Law so as to provide that all second offenders should receive indeterminate sentences. It is unlikely that the Legislature should have singled out first degree robbers and first degree burglars from among all felons as subjects for correctional treatment. It is much more likely that the intent was merely to do away with the possibility of a fife sentence for first degree robbers and burglars as first offenders, and to clarify the uncertainties of sentence under the then existing statutes. (Cf. People v. Sobierajski, 224 App. Div. 227.)

Obviously, amended section 2125 must be construed in connection with the so-called second offender statute, section 1941 of the Penal Law. Otherwise, there is no authority for imposing additional punishment for a second offense. But the history and settled construction of, and the uniform practice under section 1941, preclude its application to an indeterminate sentence. In substantially its present form it was originally enacted as section 688 of the Penal Code which went into effect of the 1st of December, 1882. “ The statute embraces any felony, the design evidently being to punish severely for a second felony.” (People v. Raymond, [1884] 32 Hun, 123, 126; affd., 96 N. Y. 38.) It contemplated a determinate sentence for a flat term fixed by the court somewhere between the longest term and twice the longest term prescribed upon a first conviction. Such has been the invariable practice. The minimum and maximum limits were intended merely to leave play for the exercise of discretion. The use of indeterminate sentences was not authorized until some years later. (See People ex rel. Ammon v. Johnson, 114 App. Div. 876.) We come then to this: Any sentence imposed under the authority of section 1941 of the Penal Law must still be, as it has always been, for a fixed term of years; if section 2125 of the Penal Law makes mandatory an indeterminate sentence in the case of a second offender, then its measure must be found within the section itself; it may have no aid from section 1941; but, so measured, the term for a second offender is the same as that for a first offender. This leads to an absurdity.

As a final reason for rejecting the construction adopted below, one finds the sentence imposed under it unfair and contrary to all intendments. An indeterminate sentence is regarded as a sentence for the maximum term prescribed. (People v. Adams, 176 N. Y. 351, 362.) The appellant, though sentenced to a term indeterminate in form, has in fact been sentenced to what is a flat term of sixty years. That is so because there is, at this writing, no provision for the parole of second offenders. (See Correction Law, § 223; Cons. Laws, ch. 43.) The minimum term of thirty years means nothing. We are unwilling to ascribe any such intent to the Legislature.

The judgment of the Appellate Division in so far as appealed from should be reversed, the sentence should be set aside, and the defendant ordered to be brought before the trial court for resentence to a flat term of not less than thirty years or more than sixty years.

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

Judgment accordingly.


author: Lehman, J.

text:
    Shelton Holding Corporation, Appellant, v. 150 East Forty-eighth Street Corporation et al., Respondents.

      (Argued March 19, 1934;
    decided May 22, 1934.)

      Charles H. Tuttle, Saul S. Myers, Joseph K. Guerin and Morgan J. O’Brien, 2nd, for appellant.
    The furnishing and installation of the kitchenette equipments was an express part of the contracts between the parties and an express part of the consideration moving to the plaintiff for the agreements on its part. Whether or not the equipments, when installed, became the property of the plaintiff, or became realty, the plaintiff was entitled, as a matter of law, to enjoin its removal under the chattel mortgage. (French v. Mayor, 29 Barb. 363; Levin v. Improved Property Holding Co., 141 App. Div. 106; Wahle-Phillips Co. v. Fitzgerald, 225 N. Y. 137; Sherwin v. B. P. O. E., Brooklyn Lodge, 148 Misc. Rep. 452; Goldberg & Sons, Inc., v. Gilet Bldg. Corp., 135 Misc. Rep. 158; Rosenthal v. 269 West 72nd St. Corp., 148 Misc. Rep. 854; McCloskey v. Henderson, 231 N. Y. 130; Alf Holding Corp. v. American Stove Co., 253 N. Y. 450; Chasnov v. Marlane Holding Co., 137 Misc. Rep. 332.) Plaintiff had, as a matter of law and equity, a clear right to prevent and restrain the primary debtor from so removing or encumbering the kitchenette equipments as to defeat or impair the rights of exoneration and subrogation. (McCloskey v. Henderson, 231 N. Y. 130; Goldberg & Sons, Inc., v. Gilet Bldg. Corp., 135 Misc. Rep. 158; Smith v. First Nat. Bank, 151 App. Div. 317; M’ Namara v. M’ Namara, 135 N. Y. Supp. 215; Central Chandelier Co. v. Irving Trust Co., 259 N. Y. 343.)

      Benjamin Algase, Morti7ner Hays and Harold Glatzer for 150 East Forty-eighth Street Corporation et al., respondents.
    There is no provision of the lease which deprived the tenant of the right to place a chattel mortgage upon the kitchenette equipments. (Metropolitan Concert Co. v. Sperry, 9 N. Y. S. R. 342; 120 N. Y. 620; Smusch v. Kohn, 22 Misc. Rep. 344; United Booking Offices v. Pittsburgh Life & Trust Co., 65 Misc. Rep. 31; Loeser v. Liebman, 14 N. Y. Supp. 569; 137 N. Y. 163; 507 Madison Ave. Realty Co. v. Martin, 114 Misc. Rep. 315; Webber v. Franklin Brewing Co., 123 App. Div. 465.) The kitchenette equipment retained its character as personalty and remained the property of the tenant, entitling the tenant to place a chattel mortgage thereon. (Madfes v. Beverly Development Corp., 251 N. Y. 12; Cosgrove v. Troescher, 62 App. Div. 123; Central Union Gas Co. v. Browning, 210 N. Y. 10; Delaware Hill Development Co. v. Delaware Bldg. Corp., 244 N. Y. Supp. 324; Minett v. Durnherr,
      238 N. Y. Supp. 448; Kelvinator Sales Corp. v. Byro Realty Corp., 136 Misc. Rep. 720; Chasnov v. Marlane Holding Co., 137 Misc. Rep. 332; Prisco & Soverio, Inc., v. Bifulco Bros., Inc., 234 App. Div. 122; McKeage v. Hanover Fire Ins. Co., 16 Hun, 239; 81 N. Y. 38; United Booking Offices v. Pittsburgh L. & T. Co., 65 Misc. Rep. 31.)
   Lehman, J.

In June, 1930, the plaintiff executed and delivered to the defendant 150 East Forty-eighth Street Corporation a lease of a parcel of land, with the buildings and improvements thereon to be erected as provided in the lease, for a term of twenty-one years with an option on thejpart of the lessee to renew for two additional twenty-one-year terms. The lease provided that the lessee should erect upon the land a sixteen-story apartment hotel. “ The building shall be constructed in accordance with the plans prepared by Sugarman and Berger and duly filed with and approved by the Building Department, with such amplification, changes and additions as may be required by Chapter 61A of the Consolidated Laws of New York, as amended, or as may be approved from time to time by the lessor, and shall be of good material and modern construction * * * and shall be equal in construction and in grade of materials and equipment to the San Carlos, situated at 150 East 50th Street, New York City.”

Prior to the execution of the lease the plaintiff had filed plans in the Building Department for the erection of an apartment hotel on its land. These plans, as filed and approved, made no provision for kitchenettes in connection with the hotel apartments, but in the plans for each apartment there was space reserved for closets. We are told that at the time the plans were filed, kitchenettes ” could not have been included lawfully. The ban was removed by new legislation. The parties always contemplated that kitchenettes should be installed when the bar was removed, and, before the construction of the apartment hotel was begun, amended plans were prepared by the architects, Sugarman and Berger, at the request of the lessee. They were approved by the plaintiff lessor and filed in the Building Department. These plans provided for kitchenettes in the spaces marked on the original plans as closets in one hundred and eighty-two apartments. Specifications for the kitchenette equipment were also prepared and approved.

The lease further provided that it should “at all times be subordinate to a mortgage or mortgages upon the demised premises now in existence or hereafter to be placed thereon, the aggregate amount of which shall not exceed the principal sum of $1,125,000. The lessee for itself, its successors and assigns, further covenants and agrees, subject to the foregoing limitations, to execute, acknowledge and deliver in proper and satisfactory form any and all instruments, papers or documents which may be prepared or necessary in the future to render this lease subject and subordinate to any such mortgage or mortgages,” and further that “ the lessee may, solely at its own expense, borrow upon the security of the land hereby leased and the said building, a sum not exceeding $1,125,000.”

It is quite evident that the purpose of these clauses was to provide the lessee with the funds required for the erection of the apartment hotel. At that time the property was subject to a first mortgage of $290,000 and a second mortgage of $60,000. The first mortgage was held by the Continental Mortgage Guaranty Company, and it was thereafter consolidated with a building loan mortgage for $610,000, thus making a single first mortgage for $900,000. The plaintiff joined in the execution of the new mortgage, but “ solely for the purpose of mortgaging the fee of the premises above described,” and it was expressly agreed “ that no obligation shall be attached to such Shelton Holding Corporation for payment of the above-mentioned indebtedness or any part thereof.” That mortgage is by its terms a lien on “ all fixtures and articles of personal property, now or hereafter attached to, or used in connection with, the premises, all of which are covered by this mortgage.” Subsequently a second mortgage was placed upon the property, with the plaintiff’s co-operation.

The lessee having arranged for mortgages sufficient in amount to pay the contemplated cost of the erection of the apartment hotel, made a contract with the defendant Lane Ogle, Inc., for the construction of the building in accordance with the amended plans and specifications for the sum of $650,000. Included in the contract was, of course, the installation of kitchenette equipment. It was conceded at the trial that Mr. Lane Ogle is the principal, if not the entire stockholder, of both Lane Ogle, Inc., and 150 East 48th Street Corporation,” the lessee, and he was president of both. He had a right to do business in corporate form. He might, if he chose, organize and direct two or more corporations as business instrumentalities. ■ These corporations then must be regarded as separate legal entities, but the fact that a single mind and a single will direct the activities of these separate entities carries with it the consequences which naturally flow therefrom. The same knowledge and the same intent must be ascribed to all.

The construction proceeded until the spring of 1931. Advances were made by the mortgagee in accordance with the building loan agreements. The kitchenette equipment was installed in the building in accordance with the amended plans and specifications, and was paid for by the lessee or the contractor, its alter ego, and apparently the money to make such payments was obtained from the mortgagee, under the building loan mortgage. Then financial complications arose, and the lessee abandoned the premises, and later a warrant was issued in dispossess proceedings. On May 28, 1931, the lessee gave to Lane Ogle, Inc., a chattel mortgage covering the kitchenette equipment to secure notes executed simultaneously therewith, for the sum of $66,000. Thereafter interests in the mortgage were assigned to some creditors of the lessee, or its alter ego, the contractor, as security for pre-existing indebtedness.

In order to forestall attempt to remove the kitchenette equipment, the plaintiff has brought this action asking that the chattel mortgage and the assignments thereof be canceled of record, and that enforcement of the chattel mortgage be enjoined. After trial the justice at Special Term rendered a decision dismissing the complaint on the merits. He found that “ at no time did the said chattels covered by the chattel mortgage upon their installation, or in any other manner, become an integral part of the realty.” Undoubtedly the evidence shows that the kitchenette equipment can be readily removed from the premises without any structural changes or in any way damaging the real estate, though such removal would leave the building incomplete, and the decision contains a conclusion of law that “ the lease did not provide that the said kitchenette equipment was to become realty or to become the property of the plaintiff.”

It is said that after installation the kitchenette fixtures as matter of law remained personal property even though affixed to the realty and intended for use in connection with the realty. Perhaps that conclusion is supported by the authority of our decision in Madfes v. Beverly Development Corp. (251 N. Y. 12); though the appellant points out some considerations which might justify a distinction. It is unnecessary now to consider that question. Assuming, without further analysis, that the kitchenette equipment did not become part of the realty, the chattel mortgage would still be void if the lessee had by agreement parted with title to the personal property, before it executed the chattel mortgage, and the plaintiff may maintain this action if title passed to it by contract or if it as owner of the realty has any right to resist the enforcement of a void mortgage.

In the case of Madfes v. Beverly Development Corp. this court was constrained by earlier decisions to hold that gas ranges, because of their inherent nature, cannot become part of the realty and that they retain their character as personalty even after annexation to realty. To such chattels section 67 of the Personal Property Law (Cons. Laws, ch. 41) had, therefore, no application, and reservation of title by a conditional vendor of the chattels was not void even against a purchaser of the realty for value and without notice. We decided nothing else. Certainly the owner of the chattels may part with title to them if he chooses, and the owner or mortgagee of realty may obtain title to the chattels independent of title to the land. (Alf Holding Corp. v. American Stove Co., 253 N. Y. 450.) Indeed, though our original decision in Madfes v. Beverly Development Corp. adjudged that the gas ranges were the property of the conditional vendor, the remittitur was thereafter amended to provide for a new trial in order that proof of title independent of ownership of the land might be presented by the owner of the land. (Madfes v. Beverly Development Corp., 251 N. Y. 589.) So in this case the problem is whether the lessee did voluntarily agree that title to the chattels should pass under the lease or mortgage as soon as they were affixed to the realty.

Here the record leaves little, if any, room for doubt. As we have already pointed out, the lease required the lessee to erect an apartment hotel in accordance with the filed plans and such changes and additions as might be approved from time to time by the lessor. The lessor did approve changes in the plans which called for kitchenette equipment. Without kitchenette equipment the building would not be complete for the use for which it was designed, and the parties intended that a complete apartment hotel should be placed upon the leased realty, ánd that kitchenette equipment should be installed by the lessee. The justice at Special Term has found that both the defendant Lane Ogle, Inc., and the plaintiff wanted the kitchenette equipment. It was a fundamental part of the whole agreement between the plaintiff and the said lessee from the beginning. The subject of kitchenette equipment came up constantly both before and after the execution of the said lease.”

The only fair inference under these circumstances is that the parties intended and agreed that the lessee was required to install the kitchenette equipment as part of its duty to construct the apartment hotel in accordance with the amendment to the filed plans as approved by the lessor, and that upon its installation the lessee abandoned all right to remove the fixtures or to sell or mortgage them as personalty. Doubt, if otherwise possible, disappears when the building loan mortgage is examined and the transactions of the parties under that mortgage are analyzed.

The mortgage provides, as we have pointed out, that it covers “ all fixtures and articles of personal property, now or hereafter attached to or used in connection with, the premises.” That clause covers personal property which does not by affixation become part of the realty. (Alf Holding Corp. v. American Stove Co., supra.) The lessee obtained advances under the mortgage to pay for this equipment. It did pay for it. The lessor’s title to the land is thus subjected to the hen of moneys spent for this permanent improvement, yet the lessee claims the right to dismember the building and render it incomplete for the purpose for which it was designed. That cannot be. (Cf. Wahle Phillips Co. v. Fitzgerald, 225 N. Y. 137.) The lessee could not confer upon another by a chattel mortgage rights and title in the property greater than it possessed, especially since the mortgagee received the mortgage with full knowledge of the circumstances and with intent to defeat the clearly apparent purpose of the lease and first mortgage. The other defendants stand in no better position.

The opinion of the justice at Special Term shows that he disregarded many of these considerations because the holder of the first mortgage is not a party to the litigation and its rights are not before the court. It is said that perhaps the holder might have released its interest in the kitchenette equipment, though covered by the mortgage. A release by the mortgagor, if such there be, would not change the rights of this plaintiff to the hotel building with the personal property installed in accordance with the provisions of the lease; nor would it serve to release the plaintiff’s real property from the hen of advances made under the mortgage for the purchase of the personal property.

We are told also that the parties in effect stipulated at the trial that the only issue to be decided was whether the chattels became by annexation part of the realty. We do not so read the record.

The judgments should be reversed, with costs in all courts, and judgment directed in favor of the plaintiff in accordance with the prayer of the complaint.

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

Judgment accordingly.


text:
    In the Matter of the Will of John M. Hills, Deceased. Henry de F. Baldwin et al., as Executor, and Trustees under the Will of John M. Hills, Deceased, Appellants; The New York Trust Company, as Committee of the Property of Louise B. Hills, an Incompetent Person, Respondent.

      (Argued April 16, 1934;
    decided May 22, 1934.)

      Allen Evarts Foster and Woodson D. Scott for appellants.
    The testator having expressly declared that the provisions in his will for his wife are in lieu of her dower and of all other claims on his estate, the decree of the Surrogate’s Court is erroneous, because it not only allows the widow the full benefit of the provisions of the will in her favor, but also permits her to take advantage of her statutory claims on the estate. (Matter of Blumenthal, 126 Misc. Rep. 603; Chamberlain v. Chamberlain, 43 N. Y. 424; Matter of Benson, 96 N. Y. 499.) The right of the widow created by section 17 of Decedent Estate Law (Cons. Laws, ch. 13) to contest the validity of the bequest of more than one-half of the estate to the hospital is a personal right of election and her committee cannot make the election, but such election must be made by or under the direction of a court of competent jurisdiction. (Amherst College v. Ritch, 151 N. Y. 282; Matter of Blumenthal, 126 Misc. Rep. 603; Flynn v. McDermott, 183 N. Y. 62; Matter of Brown, 212 App. Div. 677; 240 N. Y. 646; Camardella v. Schwartz, 126 App. Div. 334; Matter of Rasmussen, 147 Misc. Rep. 564; Matter of Brooke, 279 Penn. St. 341; Matter of Fidelity Trust Co., 250 Penn. St. 9; State ex rel. Percy v. Hunt, 88 Minn. 404.)

      Charles Angulo, Thomas K. Egan, Jr., and Ferdinand J. Wolf for City Bank Farmers Trust Company, as executor of Samuel J. Sonderling, deceased, amicus curice.

    The institution of proceedings to contest the validity of charitable provisions of a will alleged to be in violation of section 17 of the Decedent Estate Law (Cons. Laws, ch. 13), by or on behalf of a person having the power under the statute to do so, is an optional act involving the exercise of judgment and discretion. (Amherst College v. Ritch, 151 N. Y. 282; Matter of De Lamar, 203 App. Div. 638.) The Supreme Court is the proper agency or tribunal to decide upon the exercise of the power to contest the validity of the charitable provisions of a will which violate section 17 of the Decedent Estate Law in behalf of an incompetent person for whom a committee has been appointed. (Matter of Rasmussen, 147 Misc. Rep. 564; Matter of Blumenthal, 126 Misc. Rep. 603; Matter of Grant, 122 Misc. Rep. 491; Camardella v. Schwartz, 126 App. Div. 334; Matter of Brown, 212 App. Div. 677; 240 N. Y. 646; Matter of Stevens, 125 Misc. Rep. 712; Matter of Connor, 254 Mo. 65; First Nat. Bank v. MacDonald, 100 Fla. 675; State ex rel. Percy v. Hunt, 88 Minn. 404; Penhallow v. Kimball, 61 N. H. 596; Kennedy v. Johnston, 65 Penn. St. 451; Matter of Fidelity Trust Co., 250 Penn. St. 9; Matter of Brooke, 279 Penn. St. 341; Van Steenwyck v. Washburn, 59 Wis. 483.)

      John Reynolds for respondent.
    Section 17 of the Decedent Estate Law does not involve a personal right of election. (Matter of Apple, 141 Misc. Rep. 380; Matter of Blumenthal, 126 Misc. Rep. 603; Matter of Hamilton, 100 Misc. Rep. 72; 185 App. Div. 936; Decker v. Vreeland, 220 N. Y. 326; Butler v. Johnson, 111 N. Y. 204; Matter of Goss, 98 App. Div. 489; Matter of Hall, 144 Misc. Rep. 616; Matter of Tharp, 113 Misc. Rep. 199.) The will does not bar the committee from asserting the rights of the incompetent under section 17 of the Decedent Estate Law, because it imposes no duty of election on the beneficiary.
      (Chamberlain v. Chamberlain, 43 N. Y. 424; Matter of Silsby, 229 N. Y. 396; Matter of Hayman, 136 Misc. Rep. 199; Matter of Hungerford, 135 Misc. Rep. 385; Matter of Bloodgood, 129 Misc. Rep. 398; 223 App. Div. 640.)
   Lehman, J.

The decedent, by his last will and testament, gave, devised and bequeathed his entire residuary estate to trustees in trust to pay over to, or to apply to the maintenance, comfort and support of my wife Louise Bruce Hills during her life, the remaining net rents and income therefrom.” After the death of his said wife the decedent bequeathed $50,000 to the Century Association and the remainder of the trust fund, after all other legacies are paid in full, to the Anna Jacques Hospital of Newburyport, Massachusetts. The testator further directed in his will that the provisions herein made for my wife are in lieu of her dower and of all other claims on my estate.”

At the testator’s death his wife was almost eighty-four years old. She has been declared incompetent by the Supreme Court of the State of New York. Her committee has petitioned the Surrogate to construe the will and to determine, among other things, (a) The extent, if any, to which the bequest to Anna Jacques Hospital is invalid, (b) The rights of Louise Bruce Hills in her husband’s estate. The Surrogate has made a decree determining that the devise and bequest to the Anna Jacques Hospital is in violation of section 17, Decedent Estate Law, and is valid only to the extent of one-half of said decedent’s gross estate less his debts, as may be fixed on the accounting,” and that the decedent died intestate as to all property in excess of said sum of one-half of his gross estate less his debts and the non-charitable cash bequests, which amount to $64,000,” and that all of such excess passes to testator's widow as intestate property subject to her intervening fife estate and to an annuity provided by the decedent in his will for his wife’s sister. The decree also provides that the trustees shall pay to the committee of the wife so much of the income of the trust fund as may not be applied by them to her maintenance, comfort and support.

The trustees have appealed from those parts of the decree which adjudge that the devise and bequest to the Anna Jacques Hospital is valid only to the extent of one-half of the testator’s estate after the payment of bis debts and that the excess passes to the widow as intestate property. The partial invalidity of the bequest cannot be disputed. The question remains whether the committee of the wife has shown a right to contest the invalidity of the charitable bequest. It claims for the wife the benefit of the trust created for her, and the Surrogate has sustained that claim. The trustees urge that since the wife, if competent, might have elected to accept the provision which the testator made for her and not to avail herself of the statutory right to contest the validity of the bequest to the charitable corporation, the committee had no power to make the opposite choice in her behalf.

Where an incompetent has a personal privilege to elect between alternative and inconsistent rights or claims, it has been held that the privilege does not pass to the committee of the property of the incompetent. The committee’s function is confined to the management of the property of the incompetent. So where a widow is given by a will an election to demand dower or to accept the provisions of the will in her favor, the committee has no power to exercise such election in her behalf. (Camardella v. Schwartz, 126 App. Div. 334.) There assertion of the right to dower requires the abandonment or destruction of an alternative right. A court of equity, through its general jurisdiction over fiduciaries and its function of guardianship of incompetents, may, in proper case, direct the committee to act in behalf of the incompetent in accordance with what the court finds would, in all probability, have been the choice of the incompetent if he had been of sound mind. (Matter of Lord, 227 N. Y. 145; Matter of Flagler, 248 N. Y. 415.) Where the incompetent has a personal privilege between demand for dower or acceptance of a bequest in lieu of dower, the Supreme Court may act in place of the incompetent in exercising the choice. (Matter of Brown, 212 App. Div. 677; affd., 240 N. Y. 646.) Here the Supreme Court has not acted. The committee has contested the validity of the residuary bequest without prior application to that court.

The right to contest the validity of a bequest to certain corporations of more than one-half of the estate of a testator is confined to the class for whose protection the statutory limitation of testamentary power was imposed. (Decedent Estate Law [Cons. Laws, ch. 13], § 17.) We have said that the persons who have rights to contest may “ waive or retain [them] at their election.” (Amherst College v. Ritch, 151 N. Y. 282, 335.) That is true wherever a right is given for the protection of particular individuals rather than the general public. Then choice of waiver or assertion of the right rests with the individual upon whom the right has been conferred by law or by contract.

It may be that power to waive has not passed to the committee of the incompetent wife. Waiver of a right results in its destruction, and the committee’s duty is to protect, not to diminish or destroy, the rights and property of the incompetent. The right remains and may be asserted where there has been no waiver of the right.

A committee, in the exercise of its duty to protect, has undoubtedly the power to assert the rights of the incompetent. That may call for exercise of discretion in regard to choice of remedy, or even in regard to whether assertion of the right will benefit the incompetent’s property. The exercise of discretion in the performance of its duties is not denied to a committee. Choice whether to assert or not to assert a right thus ordinarily comes within the scope of a committee’s functions and powers; though a waiver or abandonment of a right of the incompetent may be outside of that scope and may require a direction from the Supreme Court.

The statute does not require any election in order to contest the validity of the charitable bequest. Election is the choice between two alternative and inconsistent rights. The party, who is to take has a choice; but he cannot enjoy the benefits of both.” (2 Story’s Eq. Juris. [10th ed.] § 1075 et seq. Cf. Matter of Blumenthal, 126 Misc. Rep. 603.) The choice between assertion of the right or its waiver is not conferred by the statute. It is inherent in all property rights and personal causes of action, and a committee has ordinarily the power to assert such rights.

Testamentary powers may be limited by law. A testar tor cannot deprive any person of the benefit of those limitations. Within those limitations a testator may dispose of his property as he sees fit, and he may use his testamentary power to induce a person to abandon rights conferred by law. He may provide that a person accepting his bounty shall abandon other rights to bis estate. The testator here could not make a valid gift to a charitable corporation of more than one-half of his estate if his wife contested the bequest, nor could he deprive his wife of her dower in his real property. He could, however, make other provision for bis wife on condition that she abandon her right of dower or her right to contest the validity of the charitable bequest. Then the wife could not enjoy both; nor could her committee. There must in such case be election between acceptance of the conditional testamentary provision and assertion of invalidity in the will.

The committee here has made no such choice. It asserts that no such choice is required by the terms of the will, though the will provides that “ the provisions herein made for my wife are in lieu of her dower and of all other claims on my estate.” If the words “ claims on my estate ” include a claim that the wife is entitled to a portion of the testator’s estate as intestate property, then the wife must elect between the benefit of the testamentary provision and her statutory right. (Chamberlain v. Chamberlain, 43 N. Y. 424; Matter of Benson, 96 N. Y. 499.)

The language of the will should not be construed beyond its plain meaning. The juxtaposition of the words dower ” and “ all other claims ” shows that the testator had in mind not only claims against the estate but claims to the estate. So we have construed similar language in Matter of Benson (supra). Moreover, a testator who has made provision of income for an aged wife beyond the amount which she can probably use, and desired that the principal should go to charity after her death, would reasonably impose such condition. It follows that the wife may not assert the invalidity of the charitable bequest until there has been an election to reject the testamentary provision in her favor, and this election must be made by the Supreme Court.

The orders should be reversed and the proceedings remitted to the Surrogate’s Court to proceed in accordance with this opinion, with costs in all courts to both parties payable out of the estate.

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

Ordered accordingly.