text:
    Isac Wagner et al., Appellants, v. Samuel Derecktor, Respondent.
    Argued January 18, 1954;
    decided March 11, 1954.

      George J. Malimshy and Jacob D. Fuchsberg for appellants.
    I. The parties were not joint venturers as matter of law. Whether they were joint venturers or principal and broker was, at best, a question of fact properly submitted to the jury under an adequate charge. The jury’s verdict determining that a brokerage relation existed is not contrary to law or fact. (Buckin v. Long Is. R. R. Co., 286 N. Y. 146; Forman v. Lumm, 214 App. Div. 579; Hutchinson v. Birdsong, 211 App. Div. 316; Richardson v. Hughitt, 76 N. Y. 55; Jasper v. Bernstein, 259 App. Div. 638; Hill v. Curtis, 154 App. Div. 662; Hachett v. Stanley, 115 N. Y. 625; Jacobs v. Escoett, 265 App. Div. 111.) II. There was no proof of a Mexican meat embargo. No such defense was pleaded. Since the agreement of sale and the agreement with plaintiffs were not conditioned upon the availability of the meat and not conditioned upon the right to export, the failure of the Mexican supplier to deliver the meat or the inability to export because of embargo were not defenses. (Vanetta Velvet Corp. v. Kakunaka & Co., 256 App. Div. 341; City of Parsons v. Fidelity & Deposit Co. of Maryland, 43 F. 2d 315.) III. The ordinary rule that a defaulting principal is liable for brokerage commissions is applicable to this ease. The agreement with plaintiffs contained no provision absolving defendant from Ms obligation to pay plaintiffs if the contract negotiated by plaintiffs was not consummated for any reason including the fault of the defendant. Under such circumstances, the realization of profits was not a condition precedent to plaintiffs’ right to recover. (Colvin v. Post Mtge. & Land Co., 225 N. Y. 510: Fuller v. Bradley Contr. Co., 229 N. Y. 605; Traylor v. Crucible Steel Co. of America, 192 App. Div. 445, 232 N. Y. 583.) IV. The admissions made it unnecessary for plaintiffs to prove that a letter of credit was established, or that the proceeds thereof were made available to defendant and defendant was properly foreclosed from attempting to prove such facts. (Ward v. Davega City Radio, 163 Misc. 335; Paige v. Willet, 38 N. Y. 28; Horan v. Hastorf, 223 N. Y. 490.)

      Menahem Stim, Roy M. Cohn and Allen S. Stim for respondent.
    I. The Appellate Division, in reversing the judgment of the trial court, properly construed the agreement sued on as not contemplating that plaintiffs should be paid one half of the net profits wMch never accrued, in the absence of fault by defendant. (Fuller v. Bradley Contr. Co., 183 App. Div. 6, 229 N. Y. 605; Ley v. Ley & Co., 271 App. Div. 439, 296 N. Y. 956; Reis Co. v. Zimmerli, 170 App. Div. 502; Hart v. Garrett Co., 93 App. Div. 145.) II. The agreement sued on contemplated as a matter of law a joint venture and the trial court erred in permitting the jury to assess damages against defendant, in the absence of wrongdoing. (Rubenstein v. Small, 273 App. Div. 102; Kraemer v. World Wide Trading Co., 195 App. Div. 305.) TTT. Plaintiffs, in failing to show performance of terms and conditions necessary to the fulfillment of the contract, failed to establish a prima facie case. IV. The court erred in the construction of defendant’s pleadings, wherein all questions dealing with the proposed letter of credit and embargo on meats in Mexico were taken from the jury.
   Froessel, J.

Plaintiffs, acting as agents for a group of Israeli importers, hereinafter called the buyer, entered into a written agreement of purchase and sale with defendant whereby the latter agreed to ship 1,000 tons of beef from Mexico to the buyer in Israel. The buyer had authorized plaintiffs to secure such a contract, but informed them that for their compensation they would have to look to the seller; with this full disclosure, no conflict of interests is presented.

Accordingly, when plaintiffs, acting as such agents, executed the contract of sale with defendant, the latter in a separate writing also agreed with them in their own behalf: “ It is our [defendant’s] agreement with you [plaintiffs] that the difference between the gross proceeds of the Letter of Credit and the applicable expenses shall constitute 1 net profit ’ and shall be divided equally between yourselves and ourselves, such division to be made at the time the proceeds of the Letter of Credit are made available to us.” It is this agreement which underlies the present litigation, in which plaintiffs seek as damages one half the ‘‘ net profit ’ ’ which they claim defendant would have made on the sale, had he not breached his contract with the buyer by failing to deliver the beef.

In his charge on the question of defendant’s liability, the Trial Judge instructed the jury that if the relationship between plaintiffs and defendant was one of employment, plaintiffs were entitled to recover damages, but if it was a joint venture relationship then defendant was entitled to a verdict. Upon this charge, the jury returned a verdict for plaintiffs.

The Appellate Division reversed, the majority holding that the trial court erred in permitting the jury to determine the relationship between the parties; that their agreement ‘ ‘ contemplates a joint venture as matter of law ”, and “ does not contemplate that plaintiffs shall be paid one half of a net profit which never would accrue, in the absence of fault by defendant ”. (280 App. Div. 661, 663.) On the question of defendant’s fault, the Appellate Division further held, as a matter of law, that the cause of defendant’s nondelivery had been an embargo on all meat exports imposed by the Mexican Government.

We cannot agree with the Appellate Division that the agreement between the parties hereto contemplates a joint venture as matter of law ”. One finds nothing in the agreement about the parties pooling their efforts, about a mutual right to control the carrying out of the transaction, that plaintiffs were to share in the losses, or that they joined their interests, risks and skills (Richardson v. Hughitt, 76 N. Y. 55; Cassidy v. Hall, 97 N. Y. 159; Jasper v. Bernstein, 259 App. Div. 638; Jacobs v. Escoett, 265 App. Div. 111). At best, its character was a question of fact for the jury, which by its verdict necessarily found it to be a brokerage agreement.

But the case does not end there; we must further decide whether under this brokerage agreement the parties intended to condition plaintiffs’ right to payment upon defendant’s actually earning and receiving a net profit on the sale of the beef, and if so, whether the failure of that condition was due to defendant’s fault.

Although in the conventional brokerage transaction the broker does not assume the risk of performance, and has earned his commission when he procures a purchaser ready, able and willing to buy, the parties may agree that payment is to be conditioned upon complete performance of the contract which the broker procures (Fuller v. Bradley Contr. Co., 183 App. Div. 6, affd. 229 N. Y. 605; Colvin v. Post Mtge. & Land Co., 225 N. Y. 510, 516; Amies v. Wesnofske, 255 N. Y. 156; see, also, Bliven v. Lighthouse, 231 N. Y. 64). Plaintiffs concede this to be the law; but they contend that by this agreement they did not so condition their right to payment.

The agreement’s very language destroys this contention. In terms, it provided that plaintiffs and defendant were to divide the “ net profit ” equally; net profit ” was defined as the “ gross proceeds of the Letter of Credit ” less the applicable expenses ”; division of the “ net profit ” was to be made when “ the proceeds of the Letter of Credit are made available to us [defendant] ”. Clearly, this language makes the actual earning and receipt of a net profit a condition precedent to plaintiffs’ right to receive one half thereof (Illum, Inc., v. American Mach. & Foundry Co., 226 App. Div. 5, affd. 252 N. Y. 525; Hart v. Garrett Co., 93 App. Div. 145; Ley v. Ley & Co., 271 App. Div. 439, affd. 296 N. Y. 956). This view is supported by plaintiff Wagner’s own testimony.

If, however, it should appear that the failure to earn a net profit was due to defendant’s own wrong, plaintiffs still would have a right to recover (Fuller v. Bradley Contr. Co., supra, 183 App. Div. 6, 20; Booth v. New Process Cork Co., 196 App. Div. 376; Clark v. West, 137 App. Div. 23, 38, affd. 201 N. Y. 569; Risley v. Smith, 64 N. Y. 576; 2 Clark on New York Law of Contracts, p. 1490), unless there is clearly an agreement to the contrary, and here there is none (Colvin v. Post Mtge. & Land Co., supra). Over a century ago we reasserted the then well-settled rule that a party cannot insist upon a condition precedent, when its non-performance has been caused by himself ” (Young v. Hunter, 6 N. Y. 203, 207). Plaintiffs, therefore, because of the terms of their brokerage agreement, can recover from defendant by showing either that there was a net profit, or that defendant’s own wrong caused his nonperformance of the contract of sale (Amies v. Wesnofske, supra, 255 N. Y. 156, 162-163). Since there is no claim that defendant actually earned a net profit, proving that the breach was a result of defendant’s fault is an essential part of plaintiffs’ cause of action (Illum, Inc., v. American Mach. & Foundry Co., supra; Booth v. New Process Cork Co., supra).

It follows that the issue of defendant’s fault, and more particularly the existence of the Mexican embargo, is an important question which the Trial Judge erroneously ruled as a matter of law “ is not a defense * * * in this case ”. The Appellate Division on the other hand erred in ruling as a matter of law that the embargo did prevent defendant’s performance. The record before us is barren of any competent evidence of any statutes, executive orders or decrees of the Mexican Government. What evidence was adduced was mere hearsay, inconclusive and flatly contradictory. Nor does it appear that the majority of the Appellate Division chose to take judicial notice of an applicable Mexican law, order or regulation. Consequently, they could not find upon this record as a matter of law that the Mexican embargo did exist. Moreover, since counsel have neither requested us to take judicial notice of the alleged embargo, nor made accurate information thereof available to us by appropriate reference or otherwise, we decline to exercise our discretion under section 344-a of the Civil Practice Act, and independently attempt to determine whether there actually was such an embargo; for the same reasons the courts below were not required to do so (Pfleuger v. Pfleuger, 304 N. Y. 148, 152).

Both parties raise questions concerning plaintiffs’ allegations of due performance and defendant’s admissions thereof which may be important on the new trial we must order. In their complaint plaintiffs alleged: (1) that they had performed all the conditions of their contract on their part to be performed; (2) that the buyer had similarly duly performed all the conditions of its contract of sale with defendant, and (3) that the letter of credit was established. Each of these allegations defendant admitted in his third amended answer, thereby foreclosing himself from attempting to prove any failure of either plaintiffs or the buyer to perform their obligations under the two contracts. These admissions, however, do not prevent defendant from showing that his failure to perform was not due to his own wrong, but rather to action by some outside agency beyond his control. In other words, while defendant cannot be permitted to show that no letter of credit was established or that the buyer failed to make the proceeds of the letter of credit available to him, he may nevertheless introduce competent evidence under his denial of paragraph twenty-third of the complaint to show that because of the Mexican embargo, his failure to perform was not wrongful nor committed with a view to release him of his lawful obligation to plaintiffs, and that he was not at fault in failing to make a net profit ” on the sale. In short, he may show that his “ non-performance ” was not “ caused by himself ” (Young v. Hunter, supra).

The judgment of the Appellate Division and that of the Trial Term should be reversed and a new trial ordered, with costs to abide the event.

Lewis, Ch. J., Conway, Desmond, Dye and Fuld, JJ., concur; Van Voorhis, J., taking no part.

Judgments reversed, etc.


source: Caselaw Access Project

author: Conway, J.

license: Public Domain

text:
    Ethel Gervant, Respondent, v. New England Fire Insurance Co., Appellant.
    Argued January 20, 1954;
    decided March 11, 1954.

      Samuel Shapiro and Frederick T. Case for appellant.
    I. It is conclusively established that there was no fraud, or other misconduct, on the part of the appraisers or the umpire. II. The rule restricting judicial review in arbitration proceedings is equally applicable to appraisal proceedings. (Cohen v. Atlas Assur. Co., 163 App. Div. 381; Fleming v. Phoenix Assur. Co., 75 Hun 530; Remington Paper Co. v. London Assur. Corp., 12 App. Div. 218.) III. In any event, the court may not review evidence on which cash value and loss were computed. IV. In any event market value was considered and it is not material that this does not show in the award. (McAnarney v. Newark Fire Ins. Co., 247 N. Y. 176.) V. The award properly considered depreciation in fixing amount of loss. VI. If it be held that the award was properly set aside, there must be a new appraisal under the policy. (Silver v. Western Assur. Co., 164 N. Y. 381; Uhrig v. Williamsburgh City Fire Ins. Co., 101 N. Y. 362; Davenport v. Long Is. Ins. Co., 10 Daly 535.)

      Arthur Karger for respondent.
    I. The award was properly set aside by the Appellate Division because of the refusal of the umpire and defendant’s appraiser to consider pertinent evidence presented by plaintiff’s appraiser, bearing on the “ actual cash value ” of the premises, in addition to evidence of replacement cost and depreciation. (McAnarney v. Newark Fire Ins. Co., 247 N. Y. 176; Sebring v. Firemen’s Ins. Co. of Newark, N. J., 227 App. Div. 103; Strome v. London Assur. Corp., 20 App. Div. 571, 162 N. Y. 627; Kaiser v. Hamburg-Bremen Fire Ins. Co., 59 App. Div. 525, 172 N. Y. 663; Van Cortlandt v. Underhill, 17 Johns. 405; Halstead v. Seaman, 82 N. Y. 27; Matter of Rosenberg [Wolfe], 180 Misc. 500; People ex rel. Parklin Operating Corp. v. Miller, 287 N. Y. 126; New York Mut. Sav. Assn. v. Manchester Fire Assur. Co., 94 App. Div. 104.) II. In any event the umpire and defendant’s appraiser exceeded their powers in deducting 20 % from the undisputed amount of plaintiff’s damage. III. The Appellate Division properly set aside the appraisal award, without ordering any further appraisal proceedings. (Aetna Ins. Co. v. Hefferlin, 260 F. 695; Bishop v. Agricultural Ins. Co., 130 N. Y. 488; Uhrig v. Williamsburgh City Fire Ins. Co., 101 N. Y. 362.)
   Conway, J.

Plaintiff was the owner of premises at 231 Ellery Street in Brooklyn, New York, which were insured by the defendant against loss or damage by fire for an amount not exceeding $6,000. On January 18, 1951, while the policy was in full force and effect, the premises were partially destroyed by fire.

Plaintiff and defendant were unable to agree as to the actual cash value of the property at the time of the loss or the amount of the loss and, pursuant to the provisions for an appraisal contained in the policy, plaintiff and defendant each designated one appraiser. Thereafter, a third individual was appointed as an umpire by a Justice of the Supreme Court. An appraisal award was made on July 20,1951, and was signed by the umpire and the insurance company’s appointed appraiser but not by the plaintiff’s. The award merely set forth the determination of the actual cash value of the property as $15,000, and the amount of loss as $4,960, without any further itemization.

The policy contained the New York Standard 80% Average Clause which provided that defendant was not to be liable for a greater proportion of any loss or damage to the property than the $6,000 bore to 80% of the actual cash value of said property at the time such loss shall happen ’ ’.

Accordingly, on the basis of the figures contained in the appraisal award, the defendant would be liable for $2,480, computed as follows:

Plaintiff brought this action in the Supreme Court, Kings County, seeking a judgment in equity setting aside the award alleging various acts of misconduct on the part of the umpire; that the appraisal award was grossly inadequate, unfair and improper, and was the result of a' corrupt understanding between the umpire and the company’s appraiser ” and that the umpire was neither competent ” nor disinterested ” as required by the policy.

The principal issue raised by plaintiff at the trial was that the umpire and the appraiser selected by the insurance company were guilty of misconduct, in a legal sense, in that they only considered evidence of replacement cost less depreciation in making the award and flatly refused to consider other pertinent evidence presented by plaintiff’s appointed appraiser bearing on the ‘ ‘ actual cash value ’ ’ of the premises.

Plaintiff testified that she had a conversation with the umpire before he made the award and that he said he was going to consider replacement value only, less depreciation ”, and under no circumstances ” would he consider the law on the subject.”

The appraiser designated by plaintiff testified that he valued the entire property, including both the land and the building, at between $6,000 and $7,000 and he so informed the umpire and the company’s appraiser. He said he requested them to consider the “ real estate price, the price of real estate ” and the “ market value ”, but that they said they would consider only the replacement cost.

The company’s appointed appraiser testified at his examination before trial, which was introduced into evidence in lieu of his appearance and testimony, that the two appraisers and the umpire agreed ‘The company’s appointed appraiser testified at his examination before trial, which was introduced into evidence in lieu of his appearance and testimony, that the two appraisers and the umpire agreed ‘1 that $6,200 represented a fair amount to effect the repairs necessary as a result of the fire that plaintiff’s appraiser determined the value of the premises prior to the fire to be $7,211.67; that plaintiff’s appraiser had considered various factors, including (a) the original cost of the premises and repairs, less depreciation, (b) the rental income of the premises, and (c) replacement cost less depreciation. When questioned concerning his own determination of the ££ actual cash value ”, the company’s appraiser answered: £ Well, I do not know what you mean by the actual cash value. ” On being asked whether he had decided on ££ some value” for the building, he replied: ££ We decided on two values. * * . * Eeplacement value and the insurable value.” He considered the replacement value ” to be the ££ replacement cost ” at a certain amount per cubic foot, and the£ £ insurable value ” to be the replacement cost less depreciation. He admitted he made no inquiry as to the age of the building or its original cost of construction; that he gave no consideration at all to the then market value of the building as it might have been prior to the fire ’ ’; that he made no inquiry ‘ ‘ as to what the rentals in that building had been prior to the fire ”; that the umpire did not ask him to consider ££ market value ” in determining the value of the premises and that he could not recall any discussion with the umpire concerning the use of market value ”, but he thought that plaintiff’s appraiser had ££ brought the subject up.”

The umpire testified that the figure of $15,000 fixed as the actual cash value was £ £ based solely on the replacement cost plus the depreciation factor ”, and that plaintiff might have called his attention to the fact that the market value was only approximately $7,000 but that she said a lot of things to which he paid no attention. He further stated that he and the company’s appointed appraiser determined the value of the premises prior to the fire by fixing a replacement value of $25,000 on the basis of the number of cubic feet in the premises and that by depreciating the replacement cost by 40% they arrived at the figure of $15,000. He did not inquire as to the original cost of the building, and he could not recollect whether plaintiff’s appraiser had advised him that ‘ ‘ market value ’ ’ should be considered as a factor in determining the “ actual cash value ” of the building.

Thus it is plain that this record amply supports the finding of the Appellate Division that the amount of the award was reached by hearing and receiving evidence of the reproduction cost less depreciation only to the intentional exclusion of all other pertinent factors of value.

The Appellate Division was also correct in concluding, in view of our decision in McAnarney v. Newark Fire Ins. Co. (247 N. Y. 176) that the “ actual cash value ” of premises under a standard fire insurance policy in this State cannot be arrived at by receiving evidence of replacement cost less depreciation only. Bather, the trier of fact should listen to all pertinent evidence on the subject. The insurer in that case had agreed to insure to the ‘ extent of the actual cash value ’ We interpreted that phrase to mean actual value expressed in terms of money and said (pp. 183-184): “We do not agree * * * that, under the standard clause, the sole measure of damage was cost of reproduction less physical depreciation * * *. This provision, while it doubtless comprehends cost of reproduction, does not restrict the field of investigation to such cost or provide that, with depreciation, it shall constitute an exclusive measure of recovery.” We went on to point out (p. 184): “ Where insured buildings have been destroyed, the trier of fact may, and should, call to its aid, in order to effectuate complete indemnity, every fact and circumstance which would logically tend to the formation of a correct estimate of the loss. It may consider original cost and cost of reproduction; the opinions upon value given by qualified witnesses; the declarations against interest which may have been made by the assured; the gainful uses to which the buildings might have been put; as well as any other fact reasonably tending to throw light upon the subject. [Authorities cited.] ”

Defendant maintains that the Appellate Division should not have set aside the award since the Official Beferee found that there was no evidence of “ fraud ” or “misconduct” on the part of the umpire or the company’s appraiser and the Appellate Division did not disturb that finding. The argument is made that the rule restricting judicial review of errors of fact or law in arbitration proceedings is equally applicable to appraisal proceedings.

The Appellate Division apparently found it unnecessary to pass on the issue of fraud or active misconduct, or corruption since it based its reversal on the failure of the umpire and the company’s appraiser to hear and receive evidence as to factors other than reproduction cost less depreciation. It is also to he noted that the Referee made no specific finding on the issues of whether the umpire was disinterested ” or “ competent ”, as required by the policy, and the Appellate Division likewise made no findings on those issues.

Nevertheless, it is our opinion that the ground on which the Appellate Division reversed the Referee is sound. Here the umpire and the company’s appraiser arbitrarily refused to admit evidence of the variety of facts which enter into the determination of “ actual cash value ” despite the fact that evidence of such factors was directly presented to them by plaintiff’s appraiser. They flatly refused to take any evidence into account other than that relating to reproduction cost less depreciation. This does not present a situation, as defendant contends, where the Appellate Division has undertaken to review the merits of the appraisal. It is manifest that the Appellate Division based its determination on the rule that an umpire and one appraiser are not free to disregard, arbitrarily, pertinent evidence presented by the other appraiser, and that a flat refusal on their part to hear such evidence is condemned by authorities in this State as legal misconduct for which the award will be set aside. (Strome v. London Assur. Corp., 20 App. Div. 571, affd. 162 N. Y. 627; Kaiser v. Hamburg-Bremen Fire Ins. Co., 59 App. Div. 525, affd. 172 N. Y. 663.) The difference between the contentions of the parties and the cases cited by them in support thereof, is the difference between reviewing findings of fact and conclusions of law made by an umpire and appraisers which were based on a consideration of the evidence presented and the arbitrary refusal of the fact finders to hear such evidence. The right of a party to have appraisers receive all pertinent evidence offered is a fundamental procedural right to which plaintiff was entitled, and its denial by the umpire and the company’s appointed appraiser has been characterized as “ misconduct, in a legal sense ” which is sufficient under the above authorities to set aside the award in equity. (Strome v. London Assur. Corp., supra, p. 573.)

Even in arbitration proceedings the rule is that “ If the arbitrators refuse to hear evidence pertinent and material to the matter in controversy, it is unquestionably such misconduct as will vitiate an award in a court of equity.” (Van Cortlandt v. Underhill, 17 Johns. 405, 410; Halstead v. Seaman, 82 N. Y. 27, 30-31; Matter of Rosenberg [Wolfe], 180 Misc. 500, 504.)

Defendant’s final contention is that if the award was properly set aside, the Appellate Division should have directed a new appraisal under the policy and should not have left the plaintiff free to pursue her normal remedy of an action at law on the policy. However, after an appraisal proceeding has terminated in an award and the award has been set aside, without any fault on the part of the insured, he need not submit to any further appraisement but may sue on the policy. (See Strome v. London Assur. Corp., 20 App. Div. 571, affd. 162 N. Y. 627, supra.) Thus, as was said in Aetna Ins. Co. v. Hefferlin (260 F. 695, 700): “ Having once, in good faith, undertaken to have an estimate of the amount of his loss made by appraisers appointed pursuant to the terms of the policy, and the appraisement having been defective and invalid, without fault on the part of the insured, he is not obliged to join in an attempt to have another appraisement, but may maintain this action [on the policy].”

The judgment appealed from should be affirmed, with costs.

Lewis, Ch. J., Desmond, Dye, Feoessel and Van Voorhis, JJ., concur; Fuld, J., taking no part.

Judgment affirmed.


author: Van Voorhis, J. Lewis, Ch. J.

text:
    In the Matter of Esther S. Gimprich, Respondent, against Board of Education of the City of New York et al., Appellants.
    Argued November 23, 1953;
    decided March 12, 1954.

      Denis M. Hurley, Corporation Counsel (Edward J. McLaughlin, Seymour B. Quel and Peter J. Flanagan of counsel), for appellants.
    The courts below erred in overruling- the four-month Statute of Limitations defense because there is no mandate by statute or ‘6 continuing statutory duty ’ ’ upon the board of examiners to grant salary credit. The mandated duty is to evaluate the claimed prior service and, if credit is to be granted, the corresponding amount of salary is mandated by the filed tables, schedules and regulations. The evaluation is a condition precedent to the entrance at a higher salary level and an administrative determination, properly reviewable only in an article 78 proceeding and controlled by the four-month Statute of Limitations. (Kussin v. Board of Educ. of City of N. Y., 278 App. Div. 50; Matter of Katz v. Board of Educ. of City of N. Y., 279 App. Div. 1062; Matter of Romanello v. Willig, 305 N. Y. 760; People ex rel. McNulty v. Maxwell, 123 App. Div. 591; Cottrell v. Board of Educ. of City of N. Y., 181 Misc. 645, 267 App. Div. 817, 293 N. Y. 792; Strum v. Board of Educ. of City of N. Y., 194 Misc. 182, 277 App. Div. 855, 301 N. Y. 803;
      Ramsey v. Hayes, 187 N. Y. 367; Toscano v. McGoldrick, 300 N. Y. 156; Wakefield v. Board of Educ. of City of N. Y., 192 Misc. 639, 274 App. Div. 884, 299 N. Y. 664; Matter of Moscowitz v. La Guardia, 183 Misc. 33, 268 App. Div. 918, 294 N. Y. 830; Matter of Donnellan v. O’Dwyer, 189 Misc. 121; Kramer v. Board of Educ. of City of N. Y., 194 Misc. 128, 275 App. Div. 915; Matter of Phillips v. Kaplan, 242 App. Div. 815, 266 N. Y. 514; Matter of McMaster v. Harvey, 239 App. Div. 553, 265 N. Y. 555; Matter of Williams v. Pyrke, 233 App. Div. 345.)

      A. Mark Levien for respondent.
    I. This proceeding was brought to compel defendants to perform a duty imposed on them by law. (Cottrell v. Board of Educ. of City of N. Y., 181 Misc. 645, 267 App. Div. 817, 293 N. Y. 792; Wakefield v. Board of Educ. of City of N. Y., 192 Misc. 639, 274 App. Div. 884, 299 N. Y. 664; Strum v. Board of Educ. of City of N. Y., 194 Misc. 182, 277 App. Div. 855, 301 N. Y. 803; Kramer v. Board of Educ. of City of N. Y., 194 Misc. 128, 275 App. Div. 915; Matter of Romanello v. Willig, 305 N. Y. 760; People ex rel. McNulty v. Maxwell, 123 App. Div. 591.) II. The doctrine of stare decisis requires that the decision below be affirmed. (Matter of Skrocki v. Greene, 242 App. Div. 226; Matter of Grifenhagen v. Ordway, 218 N. Y. 451.) III. A proceeding to compel an administrative agency to perform a duty imposed on it by law cannot be barred by the four-month Statute of Limitations. (Matter of Beggs v. Kern, 172 Misc. 556, 258 App. Div. 1049, 284 N. Y. 504; Matter of Moskowitz v. La Guardia, 183 Misc. 33, 268 App. Div. 918, 294 N. Y. 830; Matter of Shevlin v. La Guardia, 166 Misc. 473, 254 App. Div. 922, 279 N. Y. 649; Matter of Powers v. La Guardia, 181 Misc. 624, 267 App. Div. 807, 292 N. Y. 695; Matter of Donnellan v. O’Dwyer, 189 Misc. 121; Harman v. Board of Educ. of City of N. Y., 196 Misc. 287, 275 App. Div. 694, 300 N. Y. 21; Matter of Benvenga v. La Guardia, 182 Misc. 507, 268 App. Div. 566, 294 N. Y. 526; Matter of McGuire v. Board of Educ. of City of N. Y., 278 App. Div. 901; Matter of Cash v. Bates, 301 N. Y. 258; Matter of Smith v. McNamara, 277 App. Div. 580.) IV. The four-month Statute of Limitations does not bar a teacher’s right to a salary adjustment in accordance with the provisions of law. V. The four-month Statute of Limitations does not bar relief where the wrong complained of is a continuing one. (Matter of Smith v. McNamara, 277 App. Div. 580; Matter of Williams v. Morton, 297 N. Y. 328; Matter of Cash v. Bates, 301 N. Y. 258.)
   Van Voorhis, J.

The petitioner was appointed in February, 1945, to be a regular elementary school teacher in the public school system of the City of New York. She had previously taught for three years in a private school.

The salary schedule of the board of education provided that public school teachers should receive a minimum salary when first employed, and annual increments for each additional year of teaching. The schedules also provided that a teacher with certain outside teacher experience could get credit for such outside experience, and thereby could start at the salary level of those who had been teaching in the public school system for two, three or five years. The petitioner claimed to be entitled, under the salary schedules, to two years’ credit for her three years of outside teaching at the private school. The board of examiners of the board of education failed to give her such credit.

Petitioner alleges that on November 2, 1950, she served upon the board of education a notice of claim and a demand for the two years’ salary credit. The service of the notice and the making of the demand are deemed admitted by the defendants’ failure to deny the foregoing allegations in their answer. On December 20, 1950, within four months of the making* of the demand, the petitioner brought this special proceeding under article 78 of the Civil Practice Act to compel the board of education, the superintendent of schools and the board of examiners —'all of whom have been joined as parties defendant herein — to give her the two years’ teaching credit theretofore demanded, to adjust her current salary accordingly, and to give her back pay from the time of her appointment in 1945.

Defendants’ answer pleaded, inter alia, that the board of examiners had determined on April 19, 1950, that the petitioner was not entitled to the credit she claimed and that, in any event, this proceeding, having been commenced more than four months thereafter, was barred by the limitation of time fixed by section 1286 of the Civil Practice Act.

The Supreme Court, New York County, directed a trial of the issues, which resulted in a final order in favor of petitioner, that has been affirmed by the Appellate Division.

The applicable by-law in section 23 of the by-laws of the board of examiners reads, in part, as follows: “ Salary Credit for Outside Experience. Section 23. 1. Following the appointment of a person from an eligible list, the Board of Examiners shall, in pursuance of the By-laws of the Board of Education and on the recommendation of the Committee on Outside Experience acting under the following regulations, evaluate the outside experience of such appointee, for the purpose of fixing his initial salary, as the equivalent of a certain number of years of experience in teaching in the type of day public school service in the City of New York indicated by the appointee’s license.”

There follows a schedule setting forth the amount of credit to be given for specified outside experience, which, in petitioner’s case, would be two years’ credit for three years of outside experience. Trial Term held that defendants were under a continuing statutory duty to accord to petitioner the monetary credits required by the Education Law, citing Wakefield v. Board of Educ. of City of N. Y. (192 Misc. 639, modified as to interest, 274 App. Div. 884, affd. 299 N. Y. 664). Whether the Wakefield ease is controlling depends upon whether the board of education was under an absolute mandate to pay to petitioner the credits which she claims, or whether her right thereto depends upon some administrative or quasi-judicial determination concerning her status made by the board of education through its examining board. If she were automatically entitled to two years of teaching credit in consequence of having taught for three years in a particular private school, without any intervening fact finding or exercise of discretion by the board concerning the rating of the school or petitioner’s experience while there, then she would be entitled to be paid a higher salary than that which she has been receiving, and, as in the Wakefield case, she would be entitled to an order in the nature of mandamus to enforce a clear legal right (People ex rel. Empire City Trotting Club v. State Racing Comm., 190 N. Y. 31; Matter of Picone v. Commissioner of Licenses, 241 N. Y. 157; People ex rel. Hultman v. Gilchrist, 114 Misc. 651, affd. 196 App. Div. 964, affd. 232 N. Y. 598; Matter of Small v. Moss, 277 N. Y. 501, 507). Strum v. Board of Educ. of City of N. Y. (301 N. Y. 803) and Kramer v. Board of Educ. of City of N. Y. (275 App. Div. 915) were similar to these decisions and Wakefield v. Board of Educ. of City of N. Y. (supra).

Upon the other hand, in Matter of Hansen v. Teachers’ Retirement Bd. (236 App. Div. 589) mandamus was denied where a teacher sought to compel retirement credit for time spent in military service during war years, for the reason that, under the circumstances there presented, the board was held to have been vested with discretion to determine whether credit should be allowed, citing Matter of Spanhake v. Teachers’ Retirement Bd. (224 App. Div. 75, affd. 249 N. Y. 605); People ex rel. Harris v. Commissioners of Land Office (149 N. Y. 26, 30); People ex rel. Francis v. Common Council (78 N. Y. 33, 39), and numerous other cases. The ground of decision was explicitly stated to be that no clear legal right to a peremptory or alternative writ had been shown, in that the teachers’ retirement board had power to exercise discretion and the court lacked power to substitute its judgment for that of the board on a matter within its province. ‘ ‘ "While a mandamus is an appropriate remedy to enforce the performance of a ministerial duty, it is well settled that it will not be awarded to compel an act in respect to which the officer may exercise judgment or discretion.” (People ex rel. Hammond v. Leonard, 74 N. Y. 443, 445; People ex rel. Peixotto v. Board of Educ. of City of N. Y., 212 N. Y. 463; Matter of Holm v. Board of Educ. of City of Rochester, 141 Misc. 194, 198, affd. 234 App. Div. 816, affd. 260 N. Y. 572.)

If the function of the examining board in this case were to be regarded as quasi-judicial, and this proceeding to resemble certiorari (cf. People ex rel. Desiderio v. Conolly, 238 N. Y. 326), the same result would follow, if the board acted upon substantial evidence within its jurisdiction and without committing material error of law (Matter of Newbrand v. City of Yonkers, 285 N. Y. 164, 177). In the case last cited, the adoption of article 78 of the Civil Practice Act was held to have left untouched the substantive rights formerly enforced by the special proceedings that were thereby superseded. Merely the technical procedural distinctions were eliminated. It may well be that the function of the examining board in this case was administrative. It was held to have been so on similar facts in People ex rel. McNulty v. Maxwell (123 App. Div. 591, 594) yet the decision of the examining board was said to have been based upon the exercise of discretion and judgment peculiar to the members of the board in determining the character of experience the relator had had as a teacher in different schools, both rural and urban.” In Matter of Walker v. Maxwell (68 App. Div. 196, 198) it was stated: While it may be said that the board of examiners exercises discretion in granting or withholding licenses to teachers, yet it is not true that such discretion is tantamount to judicial power.” In Matter of Whitten (152 App. Div. 506, 511) it was said “ that the act of the city officials in granting or withholding a license, while it may to some extent involve the exercise of judgment, is not a judicial act, and, therefore, not thus reviewable.” (See People ex rel. Scott v. Reid, 135 App. Div. 89, 93; note, 102 A. L. R. 537.) Administrative acts may be overruled and contrary action compelled by mandamus, where such conduct has been arbitrary and capricious, and the petitioner is enforcing a clear legal right. Yet in Matter of Barresi v. Biggs (203 App. Div. 2) relief by mandamus was denied to compel the renewal of a license to practice midwifery on the ground that the State Commissioner of Health, although acting ministerially, properly exercised his discretion in refusing the new license. (Cf. Matter of Burke v. Fields, 279 App. Div. 674, affd. 306 N. Y. 845, where the discretion of the examiners was left undisturbed in the case of an applicant for principal of a high school.) The outcome of the appeal herein depends, not upon distinguishing between the function of this board as administrative or quasi-judicial, but on whether it had power to exercise its discretion in view of the surrounding facts and circumstances, in evaluating petitioner’s teaching experience.

The issue in this case is broader than whether petitioner’s claim to additional salary is barred by the four months’ time limitation in section 1286 of the Civil Practice Act. Her claim would be barred by section 1286 if the board’s determination on April 19, 1950, was a quasi-judicial act. But the issue goes beyond whether the action of the board of examiners in denying her outside salary credits is reviewable by certiorari, or whether the remedy is by mandamus. Even if the denial to her of this extra credit results from a ministerial act, relief cannot be obtained by mandamus in the absence of a clear legal right thereto. Neither remedy is available to petitioner if the examining board exercised a discretion within its jurisdiction in evaluating her former outside teaching experience. Accordingly, attention is directed to that subject.

It became the duty of the board of examiners, undei the portion of section 23 of its by-laws which has been quoted, to “ evaluate the outside [teaching] experience of such appointee, for the purpose of fixing his initial salary, as the equivalent of a certain number of years of experience in teaching in the type of day public school service in the City of New York indicated by the appointee’s license.” The regulations required the board to credit three years of approved outside experience as equivalent to two years of teaching experience in the New York City public schools. It was not mandatory upon the board, however, to rule that the particular teaching experience of any and every teacher in every private school was sufficient to qualify. Trial Term held that the examining board had no alternative but to credit this petitioner for her teaching experience in this school, inasmuch as attendance at this school was deemed to be equivalent to attendance at the public schools. There is a difference, however, between awarding academic credits to children for attendance at a private school and crediting a teacher for prior teaching experience due to having taught there. She may or may not be entitled to such credit, in the judgment of the examining board, depending upon the nature of the school and upon what the applicant did.

The board of examiners was accustomed to grant salary credits for such experience only if the teacher had taught in the outside school at least five hours per day, whereas this petitioner taught for but three hours per day. Moreover, the by-law requires equivalent experience for day school, whereas petitioner taught from 3:00 to 6:00 p.m., and on some days from 4:00 to 7:00 p.m. During part of this period petitioner taught in other schools before her classes began at this private school at 3:00 p.m. The board found that she fell short of its requirement in not being a whole-time but a part-time teacher, that this was neither a day school nor a “ school ” within the contemplation of the by-laws, that she was not on an annual salary as required by the by-law and, after considering and evaluating the record of her prior service, the board determined that her experience was not equivalent to teaching experience in the public schools of the City of New York. The judgment of the court concerning these matters cannot be substituted for the judgment of the board, if the board had power and discretion in the matter.

The situation was different in Wakefield v. Board of Educ. of City of N. Y. (supra). That case presented merely a question of law; the undisputed facts left no basis for the exercise of discretion by the examining board. Wakefield was a vocational teacher in a trade school, and the question shaped itself into whether prior trade experience as well as prior teaching experience should be counted. The only matter which the board was called upon to evaluate had been decided in the teacher’s favor. The board had already held that Wakefield was entitled to three years’ salary credit for his prior experience as a skilled workman plying his trade in Pittsburgh, Pennsylvania, which was all that he claimed on that score. The board disallowed him credit for prior teaching experience, not upon the ground that the public vocational school in Pittsburgh did not meet the standard, or that he had not been a regular teacher there, but due to a by-law purporting to limit salary credit for all types of outside experience, including teaching and trade experience, to a maximum of three years. The three years’ credit for occupational work which had been alloted to him absorbed the maximum time that was allowable within the prescribed limitation. This limitation was held to have been invalid, however, as matter of law, in Cottrell v. Board of Educ. of City of N. Y. (181 Misc. 645, affd. 267 App. Div. 817, affd. 293 N. Y. 792). That left the legal maximum of total credit for all kinds of outside experience for Wake-field at seven years, where it had been set by an earlier valid by-law. Consequently, the courts accorded seven years’ salary credit allowance to Wakefield, consisting of three years’ trade experience already evaluated in his favor by the board, and four more years for teaching experience which it was conceded was due to Mm without any question of fact or discretion if the seven-year maximum applied, as it did. The Wakefield decision involved no review of any fact finding or exercise of judgment by the administrative board, but decided that the increase in salary credit was mandatory under the facts presented, and that the board had no power to change the result, which was required by statute under the terms of the by-law. Under such circumstances, the public body is under a continuing duty to pay the mandated salary, and recovery is permitted within the ordinary statutory period of limitation of six years. Strum v. Board of Educ. of City of N. Y. (301 N. Y. 803, supra) and Kramer v. Board of Educ. of City of N. Y. (275 App. Div. 915, supra) were similar in this respect.

If there had been no basis for any exercise of discretion by the board in disallowing petitioner’s claim to credit for outside teaching experience, and the effect of the examining board’s conduct had been to overrule a statutory mandate for the payment of her salary, such a determination by the board would be regarded as a nullity which could not impair the continuing duty to pay her mandated salary. On the other hand, if, as we hold, the examining board acted within its powers in evaluating petitioner’s outside teaching experience, then its determination cannot be altered by the courts, regardless of the time when this article 78 proceeding was begun or whether it partakes of the nature of mandamus or certiorari.

The order of the Appellate Division and that of the Trial Term should be reversed, without costs, and the petition dismissed.

Lewis, Ch. J.

(dissenting). The action of the board of examiners in denying petitioner’s application for credit based on her “ outside ” teaching experience was not, in my view, quasi-judicial in nature. That decision was reached without a hearing and without the presentation of proof. It appears, in fact, to have been an ex parte decision by the board. Such a decision cannot rightly be characterized as quasi-judicial; rather is it administrative. (People ex rel. Copcutt v. Board of Health, 140 N. Y. 1, 6, 10; People ex rel. Lodes v. Department of Health, 189 N. Y. 187, 194-196; Matter of Murray v. Teachers’ Retirement Bd., 258 N. Y. 389, 392.)

Counsel for the board of education argues, not that the decision of the board herein was a judicial act, but only that — since it involved decision of matters of fact — it was more than action ministerial in character, controlled by the courts through a proceeding in the nature of mandamus. However, despite sweeping language in some cases, I do not believe it to be accurate to say that because administrative action involves some fact finding or discretion, it is ipso facto more than “ ministerial ” action immune from control by the courts. In a case frequently cited (Grider v. Tally, 77 Ala. 422, 426) the court said: “ That a necessity may exist for the ascertainment, from personal knowledge, or by information derived from other sources, of the state of facts on which the performance of the act becomes a clear and specific duty, does not operate to convert it into an act judicial in its nature. Such is not the judgment, or discretion, which is an essential element of judicial action * " V’ To like effect is State v. Howard (83 Vt. 6, 15) “ The ascertainment of a fact which raises the duty, or is collateral to its performance, is not such an exercise of judgment as will deprive the duty of its ministerial character.” And in Hicks v. Dorn (42 N. Y. 47, 53) this court observed of an administrative officer that: “ In the discharge of this duty, thus imperatively imposed upon him by law, he acted ministerially. It is true that he was bound to exercise his discretion as to the methods and instrumentalities to be employed, and this is true of all ministerial officers; and yet it has never been held that, merely because ministerial officers have a discretion to exercise, that gives them the immunity of judicial officers.” And see Ministerial and Discretionary Official Acts ” by E. W. Patterson (20 Mich. L. Rev. 848, 863-866).

The foregoing principle is most often applied in cases involving the right of an administrative officer or agency to deal summarily with property in the interest of the public health or safety. In these cases the courts exercise the right to review the facts found initially by the administrative officer or agency acting in a ministerial capacity (Hicks v. Dorn, supra; People ex rel. Lodes v. Department of Health, 189 N. Y. 187, 194, supra; Miller v. Horton, 152 Mass. 540, 548).

It is clear then that administrative action cannot be said to be more than ministerial simply because it involves some element of fact finding or discretion. A more reliable test, to my mind, is to be found in the case at hand in the language of the applicable by-law, which speaks of the duty of the board of examiners as being to “evaluate,” to “estimate,” to “calculate” — expressions indicative of subordinate, almost clerical, action. Furthermore, the statute (Greater New York Charter, § 1091) which formerly provided that the board of examiners’ decision in these matters should be final and conclusive, has not been incorporated into the present Administrative Code of the City of New York. That is some indication that the Legislature intended these decisions to be reviewable by the courts (cf. Matter of Murray v. Teachers’ Retirement Bd., 258 N. Y. 389, supra).

Finally, in a considerable number of cases this court has treated decisions of the board of examiners in these matters as not being conclusive but as subject to judicial revision many years after they were made (Cottrell v. Board of Educ. of City of N. Y., 293 N. Y. 792; Wakefield v. Board of Educ. of City of N. Y., 299 N. Y. 664; Strum v. Board of Educ. of City of N. Y., 301 N. Y. 803).

Thus, I reach the conclusion that this proceeding is one to compel the board of education to perform a duty specifically enjoined by law, and therefore the proceeding — brought to compel performance of a continuing duty — was timely commenced. No other question is now properly before us.

Accordingly, I would affirm the order.

Conway, Desmond, Dye, Fuld and Froessel, JJ., concur with Van Voorhis, J.; Lewis, Ch. J., dissents in opinion.

Orders reversed, etc.


author: Desmond, J.

text:
    Milton R. Psaty et al., Copartners Doing Business as Greater New York Waterproofing Company, Appellants, v. Perry B. Duryea, as Commissioner of Conservation of the State of New York, et al., Respondents.
    Argued January 15, 1954;
    decided March 12, 1954.

      George M. Simon and Homer E. Peters for appellants.
    I. Only the Supreme Court has jurisdiction of the cause of action. (Samuel Adler, Inc., v. Noyes, 285 N. Y. 34; Breen v. Mortgage Comm., 285 N. Y. 425; Levine v. Parsons, 258 App. Div. 1003, 282 N. Y. 808; Ferend Co. v. State of New York, 251 App. Div. 13, 277 N. Y. 593; Abner M. Harper, Inc., v. City of Newburgh, 159 App. Div. 695, 222 N. Y. 670; Martins & Co. v. City of Syracuse, 183 App. Div. 622; Moffett, Hodgkins & Clarke Co. v. Rochester, 178 U. S. 373.)

      Nathaniel L. Goldstein, Attorney-General (John F. Hmiel, Wendell P. Brown and Thomas Burke of counsel), for respondents.
    I. The complaint against State officials in their official capacity only, acting within their authority and not as individuals charged with any illegal acts against plaintiffs, fails to state a cause of action. The action is against the State itself and cannot he maintained without its consent. (Breen v. Mortgage Comm., 285 N. Y. 425; Saranac Land & Timber Co. v. Roberts, 195 N. Y. 303; Sanders v. Saxton, 182 N. Y. 477; Niagara Falls Power Co. v. White, 292 N. Y. 472; Samuel Adler, Inc., v. Noyes, 285 N. Y. 34; Levine v. Parsons, 259 App. Div. 771; Ferend Co. v. State of New York, 251 App. Div. 13.) II. The acts of the State officers who opened the bids, accepted plaintiffs’ bid, reviewed their claims and thereupon declared default of plaintiffs and directed the Comptroller to retain their bid deposit, are judicial acts within their power and cannot be reviewed in this action. (Osterhoudt v. Rigney, 98 N. Y. 222.) III. The powers and duties of the State Comptroller, in reference to payment of moneys of the State or of moneys under its control, or the refund of any money paid to the State, are governed by law, are judicial in nature and cannot be reviewed in this action. (O’Donoghue v. Boies, 159 N. Y. 87; People ex rel. Schick v. Marvin, 271 N. Y. 219.) IV. Even if the court had had jurisdiction, it was bound as a matter of law, under the facts in this case, to dismiss the complaint.
   Desmond, J.

Plaintiffs are building contractors who, having put in a bid to erect a building for the State, and having discovered, after the several competitive bids had been opened and theirs found to be the lowest, that they had made a serious omission in calculation of the amount of their bid, informed officials in the State Department of Public Works of the alleged error and requested that they (plaintiffs) be relieved of their bid because of the mistake, and that their bid check of $7,500 be returned. After conferences, the State officials refused to accede to this request. Plaintiffs then brought this action in the Supreme Court. In form, it runs, not against the State itself, but against various State officers. The complaint says that the defendant State officers have declared that the bid check, which is on deposit in a special fund of the State, will be declared forfeit and placed in the State’s general fund, that this will result in great and irreparable loss and damage, and that plaintiffs have no adequate remedy at law. The prayer for judgment is that the allegedly mistaken hid of plaintiffs he rescinded and cancelled, and that defendants be enjoined from declaring the plaintiffs in default or from transferring the bid check or declaring it forfeit, or from using the check in any way, or placing it in the State’s general fund, and for a direction that the bid check or its proceeds be returned to plaintiffs. The answer denies the allegations as to mistake by plaintiffs, and sets up an alleged separate defense to the effect that the State notified plaintiffs that theirs was the lowest bid and that it was accepted and the contract awarded to plaintiffs, that the contract documents were delivered to plaintiffs for execution by them, that plaintiffs refused to sign on account of the alleged mistake, that several hearings or conferences were held between plaintiffs and State officers or their representatives, and that plaintiffs submitted certain working papers in an effort to prove they had made the mistake but that the papers did not support that claim, whereupon the State officials, on several occasions, repeated their demands that plaintiffs execute the contract, but that plaintiffs have continued to refuse to do so with the result that, on September 20, 1950, which was about three months after plaintiffs originally filed their bid and bid check, and nearly two months after plaintiffs were notified that their bid was accepted, the State, through its representatives, notified plaintiffs that their deposit of $7,500 was forfeited to the State. The answer contains a further allegation, not now particularly important, that the State, by reason of the default of plaintiffs, was compelled to award the contract to the bidder next higher than plaintiffs, which bid was higher by about $20,000 than the bid of plaintiffs.

At the trial, as by an earlier separate motion, the State continued to insist that the Supreme Court had no jurisdiction, besides asserting that no mistake had in fact been made by plaintiffs. Both those questions were decided in favor of plaintiffs. The Official Referee held that plaintiffs’ bid was mistakenly computed and was not plaintiffs’ real bid or one which they had ever intended to submit, and ordered that the bid be rescinded and cancelled, and that the defendant State officers be restrained from using the check in any manner, and that they return the check or its proceeds to plaintiffs, with the bid itself. While the Appellate Division reversed on the law and dismissed the complaint, its order specifically affirmed the facts as found by the Referee. Since that fact finding of a mistake, affirmed in the Appellate Division, was justified on this record, there is no question before us as to whether or not the mistake actually was made. The real question is one of jurisdiction of the Supreme Court to grant the demanded relief.

It seems to be conceded that the Court of Claims has, under section 9 of the Court of Claims Act, no jurisdiction to grant strictly equitable relief, but to award money damages only against the State, in appropriate cases. Plaintiffs assert that they, accordingly, could not have obtained relief against the State in the Court of Claims on this claim, since they would have no rights unless and until their bid should be cancelled and rescinded, and that the Court of Claims, being without such equity jurisdiction, could not annul the bid. Therefore, say plaintiffs, they were compelled to bring this suit in equity in the Supreme Court to be relieved from their bid, to have the same declared cancelled, and for an injunction to keep the State officials from putting the money into the State’s general funds. Such would be a proper subject for the exercise of the equitable jurisdiction of the Supreme Court were it not for the fact that defendants are sued as officers of the State, dealing, within their powers, with moneys paid to the State, and that, accordingly, this is a suit against the State under the theory of Samuel Adler, Inc., v. Noyes (285 N. Y. 34), Breen v. Mortgage Comm, of State of N. Y. (285 N. Y. 425), and Niagara Falls Power Co. v. White (292 N. Y. 472). Since, therefore, it is such a suit against the State itself, the Appellate Division was correct in its unanimous dismissal of the suit on the jurisdictional ground since, concededly, the State has not given consent so to be sued. In the Presiding Justice’s opinion for the unanimous Appellate Division, it is stated that the broad grant of power given to the Court of Claims in sections 8, 9 and 12 of the Court of Claims Act “ necessarily implies the right to afford equitable relief where the same may be incidental to a claim for a money judgment ”. (282 App. Div. 94, 99.) We need not determine the full reach of that statement of law, since appellants’ contentions are defeated by the fact that this is a suit against the State itself attempted to be brought in the Supreme Court and, as such, subject to dismissal. We may assume that, in determining claims for money damages against the State, the Court of Claims may apply equitable considerations and perhaps, to some extent, may grant some sort of incidental equitable relief, but that concept has nothing to do with this case since this, in essence and by concession, is not a suit for money damages but, primarily, an equitable action to cancel and rescind a bid which equitable relief, as plaintiffs concede, was essential before there could be any injunction or mandate for the return of the money. In other words, this was a suit for traditional equitable relief, with the return of the money to follow as a consequence of the equitable relief, if granted.

The Official Referee, in his opinion, said that the facts here were such as should, under equitable considerations, entitle the plaintiffs to relief. He pointed out, too, that the State has largely waived its ancient immunity as a sovereign. As to whether the State has waived that immunity so as to permit the prosecution of this suit in the Supreme Court, the only authority cited by the Official Referee was Levine v. Parsons (258 App. Div. 1003), as to which leave to appeal was denied by this court in 1940 (282 N. Y. 808). It cannot be denied that the Levine decision, resulting in the same kind of relief asked by plaintiffs herein, would seem to hold inferentially that there is jurisdiction in the Supreme Court of such a suit against a State officer; however, the jurisdictional point was not raised in Levine, and it is raised in the present case. We note too (as decided by this same Appellate Division in 1937 and cited by that Appellate Division in its Levine case memo) Ferend Co. v. State of New York (251 App. Div. 13) which was the same sort of suit as the present one, brought against the State in the Court of Claims, and resulting in a judgment in favor of the claimant against the State, which was reversed by the Appellate Division. The Appellate Division’s reversal in the Ferend case was “ on the law ”, and its opinion stated (p. 15) that, while a court of equity could relieve a petitioner who has made an unintentional mistake in the bid before acceptance ‘ ‘ the rule of equity in the above cases cannot help the claimant in this case ”. We take that (and this court’s no opinion affirmance, 277 N. Y. 593) to mean that the claimant Ferend could not, on the law, get his money back because in the Court of Claims he could not get the equitable relief of cancellation of the bid.

Referring to section 879 of the Civil Practice Act, which says that where a duty is imposed by statute on a State official an injunction to restrain him from the performance of that duty can be granted only by the Supreme Court at a term held in the department where the officer performs his duties, the Appellate Division opinion correctly ruled that this statute does not grant any authority not elsewhere found, for injunctions against State officers, but is a merely limiting statute providing that such injunctions, if granted, must be by the Supreme Court sitting in the department where the public office or officer is officially located.

In Niagara Falls Power Co. v. White (292 N. Y. 472, supra), we pointed out that while State officials can be hy individually to account for unlawful trespass on a plaintiff's property or rights, a suit is actually one against the State when public officers are sued because they are going ahead with the performance of duties mandated by State statutes (see Erie R. R. Co. v. Sells, 298 N. Y. 58). That applies to this case.

The State here calls our attention to section 1 of article Y of the State Constitution, as amended in 1938, which says that the refund of any money paid to the State, except upon order by the Comptroller, is void. The same idea is carried into sections 111 and 140 of the State Finance Law. Section 111 says that no money in any fund, title to which is in the State, shall be refunded except upon audit of the Comptroller. Section 140 says that whenever a deposit of money is required in connection with a bid, the bid may be withdrawn if no award of the contract is made within forty-five days after the receipt of bids, and that, upon such withdrawal, a bidder’s deposit shall be returned to him. Section 140, however, goes on to say that any bid money required by statute shall be retained under the jurisdiction of the Comptroller until returned or forfeited, which language makes it clear to us that this bid money was State money even though kept, pursuant to section 8 of the Public Buildings Law, with the bid money of the two next lowest bidders in a separate fund. Those changes in the statutes were, plainly, for the purpose of seeing to it that bid moneys are treated as State moneys, not kept lying around in various departments. Beading these various statutes together makes it plain that these bid moneys are in the possession of the State itself, with the result that a judgment commanding their return would be a judgment against the State itself.

Quite possibly, our affirmance means that these plaintiffs, and others in like position, have no cause of action anywhere to get their money back. This, however, does not mean that an assertion by a bidder that he has made a mistake is to get no hearing at all. Conferences were held in this matter, and the State officials decided not to credit plaintiffs ’ assertions or to exercise the power that apparently was theirs under subdivision 4 of section 8 of the Public Buildings Law to reject any or all proposals, and to advertise again for proposals. We need not here decide whether a determination by State officials against such a claim of mistake by a bidder can be reviewed in a proceeding under article 78 of the Civil Practice Act. No such question is before us. Our conclusion is that, when these State officials, in this particular instance, listened to the demand of plaintiffs but refused to set aside the bids, they were acting not as individuals but officially as State officers, and that any suit to compel them to change that determination and to cancel the bid and return the money was necessarily a suit against the State itself which could not be brought, as this suit was attempted to be brought, in the Supreme Court.

Samuel Adler, Inc., v. Noyes (285 N. Y. 34, supra), is the most recent case which involves an effort by a citizen to get back money deposited with the State for a special purpose. Plaintiff Adler had applied to the State Commissioner of Agriculture and Markets for a milk dealer’s license and had tendered the amount required as the fee, but the commissioner, although denying the license, refused to return the fee, apparently because there was no statute specifically providing for such return. The money was held with other similar license fees in a single fund under the control of the commissioner. Adler sued in the County Court for the return of his money and got judgment below, but the judgment was reversed here on the ground that any duty to make reimbursement was a duty of the State and any claim against the State therefor must be prosecuted in the Court of Claims. Adler’s claim arose in 1937 before the passage of the statutes referred to in the second paragraph above herein but, significantly, those statutes were noticed in this court’s opinion, written after those statutes had come into effect, as follows: Any duty to make such reimbursement was a duty of the State. The Legislature has now made this plain. (See L. 1940, ch. 178.) ” (285 N. Y. 36-37.)

The judgment should be affirmed, with costs.

Lewis, Ch. J., Conway, Dye, Ftjld and Froessel, JJ., concur with Desmond, J.; Van Voobhis, J., concurs in the result upon the ground that the State of New York is the real party in interest, and that the State has not been joined as a party defendant.

Judgment affirmed, etc.


author:
      Per Curiam.
     Dye, J.

text:
    In the Matter of Edwin Alexander et al., Appellants, against New York State Commission to Investigate State Agencies in Relation to Pari-Mutuel Harness Racing, Respondent. In the Matter of Abraham Chait, Appellant, against Bruce Bromley et al., Constituting the New York State Commission to Investigate State Agencies in Relation to Pari-Mutuel Harness Racing, Respondents. In the Matter of Burton D. Chait, Appellant, against Bruce Bromley et al., Constituing the New York State Commission to Investigate State Agencies in Relation to Pari-Mutuel Harness Racing, Respondents. In the Matter of Sara Chait, Appellant, against Bruce Bromley et al., Constituting the New York State Commission to Investigate State Agencies in Relation to Pari-Mutuel Harness Racing, Respondents. In the Matter of Sidney Ellis, Appellant, against Bruce Bromley et al., Constituting the New York State Commission to Investigate State Agencies in Relation to Pari-Mutuel Harness Racing, Respondents.
    Argued February 25, 1954;
    decided March 12, 1954.

      Louis B. Frutkin and Herbert Frutkin for Edwin Alexander and another, appellants.
    I. Respondent commission has exceeded the scope of its authority in its proposed examination. The authority of the commission is limited by the terms of the Executive Order which created it. (United States v. Morton Salt Co., 338 U. S. 632; Oklahoma Press Pub. Co. v. Walling, 327 U. S. 186; New York Elec. & Gas Corp. v. Maltbie, 169 Misc. 144; Matter of Hirshfield v. Hanley, 228 N. Y. 346; Matter of Barnes, 204 N. Y. 108; Jones v. Securities Comm., 298 U. S. 1.) II. The private papers sought to be subpoenaed are not relevant to the subject matter lawfully under investigation. (Carlisle v. Bennett, 268 N. Y. 212; Matter of Foster, 139 App. Div. 769; Matter of Edge Ho Holding Corp., 256 N. Y. 374.) III. The subpoena duces tecum violates the rights of petitioners-appellants, under the Fourth Amendment to the Constitution of the United States, and under section 12 of article I of the Constitution of the State of New York. (Hale v. Henkel, 201 U. S. 43; Federal Trade Comm. v. American Tobacco Co., 264 U. S. 298.)

      David J. Landau for Abraham Chait, appellant.
    I. A subpoena duces tecum which is too broad and sweeping is unreasonable, oppressive and a violation of a witness’ constitutional rights. (Carlisle v. Bennett, 268 N. Y. 212; Kilbourn v. Thompson, 103 U. S. 168; McGrain v. Daugherty, 273 U. S. 135; People ex rel. McDonald v. Keeler, 99 N. Y. 463; Jones v. Securities Comm., 298 U. S. 1; Hale v. Henkel, 201 U. S. 43.) II. Respondents ’ demand for the production of records embracing a period of six years prior to the acquisition of the Algam securities is made in bad faith. (Matter of Ellis, 176 Misc. 887; Federal Trade Comm. v. American Tobacco Co., 264 U. S. 298; Matter of Hirshfield v. Hanley, 228 N. Y. 346; Matter of Foster, 139 App. Div. 769; Jones v. Securities Comm., 298 U. S. 1.)

      Edward G. Bathon for Burton D. Chait, Sara Chait and Sidney Ellis, appellants.
    I. Respondents have no authority to conduct a general investigation into a citizen’s private affairs having no relation to pari-mutuel harness racing. (Matter of Barnes, 204 N. Y. 108; United States v. Morton Salt Co., 338 U. S. 632.) II. The question as to what records are relevant and material to respondents’ inquiry is one to be determined by the court, not the respondents. (Matter of Foster, 139 App. Div. 769; Matter of Gilchrist, 130 Misc. 456; Carlisle v. Bennett, 268 N. Y. 312; Matter of Hirshfield v. Craig, 239 N. Y. 98; Dunham v. Ottinger, 243 N. Y. 423; Matter of Ellis, 176 Misc. 887.) III. The subpoenas in question constitute an unlawful invasion of petitioners-appellants ’ constitutional rights in violation of section 12 of article 1 of the Constitution of the State of New York and the Fourth and Fourteenth Amendments to the Constitution of the United States. (Hale v. Henkel, 201 U. S. 43; Federal Trade Comm. v. American Tobacco Co., 264 U. S. 298; Jones v. Securities Comm., 298 U. S. 1; Boyd v. United States, 116 U. S. 616; Harriman v. Interstate Commerce Comm., 211 U. S. 407.)

      George Trosk, Edwin L. Gasperini, Arnold A. Hackmyer and Robert D. Hughes for respondents.
    I. A Moreland commission may investigate “ merely on suspicion that the law is being-violated, or even just because it wants assurance that it is not, ’ ’ and the subpoenas issued by such an agency should not be invalidated or modified unless the objectant establishes “ as a matter of law ’ ’, that ‘ ‘ the futility of the process to uncover anything legitimate is inevitable or obvious.” Objectants here have made no such showing: on the contrary, the record affirmatively shows that the commission is entitled to examine the records it has subpoenaed. (Matter of Joint Legislative Committee [Teachers’ Union], 285 N. Y. 1; Matter of Edge Ho Holding Corp., 256 N. Y. 374; Matter of Di Brizzsi, 303 N. Y. 206; Matter of Dairymen’s League Coop. Assn. v. Murtagh, 274 App. Div. 591, 299 N. Y. 634; United States v. Morton Salt Co., 338 U. S. 632; Matter of International Ry. Co. v. Mahoney, 271 App. Div. 283; Matter of Manning v. Valente, 272 App. Div. 358, 297 N. Y. 681; Matter of Toch Realty Co., 256 N. Y. 655; Matter of Scheer Realty Co. v. Higgins, 257 N. Y. 541.) II. The requirements of the subpoenas being reasonable, they do not violate the unreasonable search and seizure provisions of either the New York State or the United States Constitution. (Oklahoma Press Pub. Co. v. Walling, 327 U. S. 186; Isbrandtsen-Moller Co. v. United States, 300 U. S. 139.)
   Per Curiam.

There is presented to us by the record and briefs herein two narrow questions. The petitioners have been served with subpoenas and subpoenas duces tecum by the respondent commission calling for the production of certain records and papers. Concededly no issue has been presented here as to the power of the commission to conduct the present inquiry with respect to the Yonkers Raceway, nor as to the existence of the power of the commission to issue the subpoenas. It was stated during the argument by counsel for petitioners, who were the only ones who argued the appeal, the commission having-submitted, that there was no question of criminal conduct on the part of Abraham Chait involved since, even were he a beneficial owner of Algam stock, that beneficial ownership would not constitute a criminal act.

Since the petitioners do not now object to two of the four items indicating the records and papers sought to be subpoenaed, we are concerned only with the propriety of items 2 and 3. The two narrow questions presented for our consideration are: (a) were the papers sought in those two items relevant to the subject matter under investigation, and (b) were the subpoenas too broad or sweeping in their terms by reason of the period of time covered?

As to question (a): We cannot say, as a matter of law, that the records and papers sought are not at least prima facie relevant to such inquiry and petitioners have not presented facts tending to establish the unreasonableness of the process issued to uncover anything legitimately affecting the subject of the inquiry. Petitioners have already been examined under item 1, which called upon them to produce records and testify concerning ownership and other financial interests, direct and indirect, relating to associations and corporations holding licenses for the conduct of harness horse race meets at which pari-mutuel betting is conducted and interests in income or other financial arrangements in and in any way related to the conduct of such harness horse race meets or the track at which such meets are held, but an examination of the testimony fails to disclose that the commission was able to elicit full and frank communicative responses to questions asked. After that, the commission has sought to examine them with respect to all of their bank accounts, stock certificates, bonds and other property which may result in disclosures that will connect up facts already revealed but which petitioners have been reticent about explaining. In its investigation pursuant to these subpoenas, the commission will, of course, be restricted to such material as is relevant to the subject of the inquiry, but is not obliged to take petitioners’ word for what is or is not relevant.

As to question (b): The petitioners, or some of them, urge that it would be ample for the commission’s purposes if only records and papers subsequent to January 1,1951, were required by the subpoenas. That date is eleven months prior to the acquisition of the securities of Algam Corporation by Burton D. Chait and about twenty months after he manifested an interest in the project. The commission on the other hand urges that it needs records and papers running back to 1946. Thus, we have the petitioners and the commission selecting two dates and each group insisting that its selected date is the reasonable one. When the appeal was argued before the Appellate Division there were no dates in the subpoenas affecting item 3. There were dates in the subpoenas affecting items 1, 2 and 4, and, as mentioned earlier, there is no objection to items 1 and 4. The Appellate Division inserted in item 3 the same dates as to the respective petitioners which had been inserted by the commission in items 1, 2 and 4. No facts are presented indicating that the dates selected by the commission or inserted by the Appellate Division cover too long a period and there is no warrant for upsetting the determination of the Appellate Division.

The orders appealed from should be affirmed.

Dye, J.

(dissenting). I dissent and vote to modify the orders of the Appellate Division to the extent that the petitioners be directed to produce the documents called for by items numbered 2 and 3 of the subpoenas acquired from April 1, 1950 (which is the earliest date the commission claims the witnesses manifested an interest in Algam), to date, insofar as the same are relevant and material to the matter under investigation, and, as so modified, the orders of the Appellate Division should be affirmed (see U. S. Const., 4th Amendt.; N. Y. Const., art. I, § 12; Executive Law, § 6).

.Lewis, Ch. J., Conway, Desmond, Fuld, Froessel and Van Voorhis, JJ., concur; Dye, J., dissents in memorandum.

Orders affirmed.