text:
    Dora Dulberg, Individually, and as Administratrix of the Estate of Joseph Dulberg, Deceased, Appellant, v. Equitable Life Assurance Society of the United States, Respondent.

      Argued December 10, 1937;
    decided January 18, 1938.

      Arthur Levitt for appellant.
    The defendant’s negligent handling of the premium check brought about the nonpayment upon which it bases its claim of forfeiture. The default which it has itself occasioned cannot be invoked to justify the forfeiture of the rights of the beneficiary under the policy. (Lannon v. Lynch, 160 N. Y. 483; Smith v. Syracuse Improvement Co., 161 N. Y. 484; Murray v. Smith, 224 N. Y. 40; Baker v. Ancient Order of Hibernians, 224 N. Y. 363; Borckman v. Terry Constr. Co., 216 N. Y. 139; Melcher v. Ocean Accident & Guarantee Corp., 226 N. Y. 51; Ehrenworth v. Stuhmer & Co., 229 N. Y. 210; Hoykendorf v. Bradley Contracting Co., 227 N. Y. 204; Philadelphia Life Ins. Co. v. Heyworth, 190 N. C. 757; Knickerbocker Life Ins. Co. v. Pendleton, 112 U. S. 696; Lindsey v. Home Ins. Co., 51 S. W. Rep. [2d] 924; Manitoba Mortgage & Investment Co. v. Weiss, 18 S. D. 459; First Nat. Bank v. Fourth Nat. Bank, 77 N. Y. 320; Commercial Investment Trust v. Lundgren & Wittenstein, 173 Minn. 83; Carroll v. Sweet, 128 N. Y. 19; Smith v. Miller, 43 N. Y. 171; Whitehead v. N. Y. Life Ins. Co., 102 N. Y. 143; Homer v. Guardian Mut. Life Ins. Co., 67 N. Y. 478; Leslie v. Knickerbocker Life Ins. Co., 63 N. Y. 27; Mutual Life Ins. Co. v. French, 30 Ohio St. 240.) The insured was under no duty to make tender of subsequently accruing premiums. (Shaw v. Republic Life Ins. Co., 69 N. Y. 286; Meyer v. Knickerbocker Life Ins. Co., 73 N. Y. 516.)

      James D. Ewing for respondent.
    The policy lapsed for the non-payment of the premium; was not subsequently_reinstated and was not in force at the date of the insured’s accident and death. (Goodwin v. Mass. Mutual Life Ins. Co., 73 N. Y. 480; del Rio v. Prudential Ins. Co., 269 N. Y. 135; Syracuse, Binghamton & New York R. R. Co. v. Collins, 57 N. Y. 641; Carroll v. Sweet, 128 N. Y. 19; Greenwich Ins. Co. v. Oregon Improvement Co., 76 Hun, 194; 148 N. Y. 758; Andrus v. Bradley, 102 Fed. Rep. 54; Moskowitz v, Deutsch, 46 Misc. Rep. 603; Chicago Industrial Bank v. Bowes, 165 Ill. 70; Conroy v. Warren, 3 Johns. Cas. 259; Reddington v. Gilman, 1 Bosw. 235; Commercial Bank of Albany v. Hughes, 17 Wend. 94.) Defendant as a matter of law put the check in process of collection within a reasonable time. (Murray v. Judah, 6 Cow. 484.) The law presumes that a letter properly addressed, stamped and mailed is duly delivered to the addressee. (Trusts & Guarantee Co. v. Barnhardt, 270 N. Y. 350; News Syndicates Co. v. Gatti Paper Stock Corp., 256 N. Y. 211.)
   Rippey, J.

The defendant issued its policy of health and accident insurance to one Joseph Dulberg on November 25,1921, for a term of twelve months, renewable each year until the insured should reach the age of sixty years for successive terms of twelve months each upon payment by the insured of a premium of $147.80 in advance on each anniversary date of the policy or within thirty-one days thereafter. The insured died on June 9, 1935, at the age of forty-eight years, as the result of an accident suffered on June 4, 1935, between which dates he was totally disabled and hospitalized. Dora Dulberg, wife of the insured, was named as beneficiary in the policy in the event of accidental death. This suit is to recover the amount for which the insured was covered by the policy for death caused by accident plus disability allowance less the amount of two unpaid premiums which became due, respectively, on November 25, 1933, and November 25, 1934. Defendant asserts non-liability and resists payment on the ground that the policy was not in force at the time of the occurrence of the accident and had lapsed and was canceled for non-payment of the premium which came due on November 25,1933. Plaintiff recovered in the trial court. The Appellate Division reversed upon the law only and dismissed the complaint. Thus the findings of fact made by the trial court were not disturbed by the Appellate Division, and are conclusive upon this court if there was gny evidence, considered in its aspect most favorable to plaintiff, to sustain them.

The insured had paid every premium promptly when due until November, 1933, and the policy was concédedly in force until midnight of December 26th of that year. To effect a renewal of the policy the insured prepared a check, on December 21, 1933, for $147.80, the amount of the premium due, on the Manufacturers Trust Company, 481 Eighth avenue, New York city, payable to the order of the defendant. The check was signed by Anna Dulberg and Dora Dulberg, respectively the daughter and wife of the insured. At the request of the insured, an envelope was addressed to the defendant at its offices, 393 Eighth avenue, New York city. The premium notice and the check were inclosed in the envelope. Properly sealed and stamped, it was deposited in a mail box at Avenue A and East Fifth street, Brooklyn, New York, near the home of the insured, at eight o’clock Thursday evening, December 21, 1933. Having been mailed in the same city where it was to be delivered, there is a presumption that it was delivered to defendant on the following day. (News Syndicate Co. v. Gatti P. S. Corp., 256 N. Y. 211.)

The defendant collected its mail ten times each day at the post office in New York city, the first collection being at eight o’clock each morning. Its office was located on one side of the Pennsylvania Railroad Station while the post office was located directly back of the station. As checks were received in its mails they were numbered serially, commencing with No. 1. On December 22, 1933, defendant received 1,235 checks in the mails. According to the usual routine in defendant’s office, all checks received up to four p. m. on any day were deposited on the day received with the Chase National Bank, Pennsylvania Branch. The check in question was received by defendant and numbered 69,” indicating that it was received in the first mail of whatever day it was received.

Defendant sought to estabhsh that the check was not, in fact, received until Saturday morning, December 23d. All checks received on a Saturday morning were put in bundles at the incoming mail desk and put in the safe without being sent through defendant’s office to the cashier and deposited in defendant’s bank of deposit, which was located in the immediate vicinity of defendant’s office, until the next business day, Tuesday, December 26th.

The check was not deposited by defendant at its bank until Tuesday, December 26th, and was not cleared and presented to the Manufacturers Trust Company for payment until December 27th. It was returned by the trust company to the Chase National Bank on December 27th unpaid with a slip attached marked uncollected funds,” and by the latter bank to defendant on December 28th. Defendant thereupon returned the check by mail to the assured with a notice that the policy had lapsed for non-payment of premium. The dishonored check and notice reached the assured on December 29th. On that day he tendered to defendant a certified check for the amount of the premium drawn on the Manufacturers Trust Company and signed by Dora and Anna Dulberg. Defendant refused to accept the certified check, and on January 5, 1934, wrote the insured that it refused to reinstate the policy and that it must remain lapsed.

It was conceded that funds were available for payment of the check in the account of Dora and Anna Dulberg in the Manufacturers Trust Company at all times between December 21st and two p. M. on December 26th, 1933. There was also uncontradicted testimony from which the jury were authorized to find that, had the check been deposited by defendant in the Chase National Bank, Pennsylvania Branch, for collection on December 22d it would have been presented in usual course for payment at the Manufacturers Trust Company in the early morning clearances on December 23d. Had it been put in process of collection on December 23d, the date on which defendant claims it received the check, it would have been presented to the payee bank before noon of December 26th. In either event it would have been paid and the policy would not have lapsed. The jury were authorized to find, however, and we must presume that they did find, that the check was, in fact, received by defendant in the eight o’clock mail of December 22, 1933, that it was not put in process of collection until late in the day of December 26th, so that it was not presented to the bank on which it was drawn until December 27th, and that the delay in presentation of the check was due to the defendant. The delay was not the fault of the insured or due to any act over which he had any control. It was not due to the fault of either bank. Except for the delay in presentation there would have been no forfeiture of the policy. To some extent, at least, the insurance company caused the delay which brought about failure of cash payment before the end of the period of grace and the consequent lapse of the policy.

Under all the circumstances in this case we think that the insurance company was required to exercise reasonable diligence in presenting the check for collection. Especially is this so where it knew that the time element was of such importance. It issued and mailed to Dulberg a receipt for the payment of the premium dated prior to the expiration of the time within which the premium might be paid. It is true that the receipt provided that payment would not be deemed complete unless cash was received. Nevertheless, the defendant knew at the time the check was received, and so indicated upon its records, the last date on which the premium could be paid to avoid the lapse. It is true that the premium for which the check was delivered to the defendant was not an obligation of the assured to defendant, and its collection could not be enforced. (Goodwin v. Mass. Mutual Life Ins. Co., 73 N. Y. 480.) The receipt of the check and its acceptance for collection did not effect the payment of the premium and leave the defendant recourse only against the drawers of the check. Nevertheless, it received the check as a provisional payment of the premium for the purpose of keeping the policy in force for an additional term of twelve months, and it was required to use due diligence in proceeding to collect upon it. (Manitoba Mortgage & Investment Co. v. Weiss, 18 S. D. 459. Cf. Burkhalter v. Second Nat. Bank, 42 N. Y. 538; Smith v. Miller, 43 N. Y. 172; 52 N. Y. 545; First Nat. Bank v. Fourth Nat. Bank, 77 N. Y. 320.) It is a familiar principle that “ he who prevents a thing being done cannot avail himself of the non-performance he has occasioned.” (Homer v. Guardian Mut. Life Ins. Co., 67 N. Y. 478, 481.) Neither may an insurance company depend upon a default in which its own negligence or wrongful act contributed, and but for which a lapse might not have occurred. (Whitehead v. New York Life Ins. Co., 102 N. Y. 143, 156; Knickerbocker Life Ins. Co. v. Pendleton, 112 U. S. 696. See, also, Smith v. Miller, supra.)

The requirement of reasonable diligence in the presentment of the check after its receipt was held by the trial court to be applicable. The trial court submitted to the jury the question, “ Did the defendant, after receipt of the check, act with reasonable diligence under all of the circumstances in placing the check in process for collection? ” and, upon the jury answering the question in the negative, directed a general verdict for the plaintiff. In a case where the facts are all ascertained and not in dispute, the question of what is due diligence in presenting the check for collection is one of law, but where the facts are unsettled and the testimony is conflicting, the question may be a mixed one of law and fact which the jury must decide under proper instructions of the court as to the law. . (Cf. Commercial Nat. Bank v. Zimmerman, 185 N. Y. 210, 217.) Here the facts were not all ascertained and settled, and the question of due diligence was properly presented to the jury for determination. Their finding on that question was not disturbed by the Appellate Division, and is conclusive on this court. (Smith v. Syracuse Improvement Co., 161 N. Y. 484; Matter of Keefe, 164 N. Y. 352, 354; Murray v. Smith, 224 N. Y. 40, 45.) We think the case was properly submitted to the jury, and the verdict was justified. Had the defendant exercised due diligence in presenting the check for payment it would have been paid in due course. Under the circumstances, the defendant may not take advantage of the default in payment of premium, but was required to accept payment tendered by the insured on December 29, 1933, in fulfillment of the terms of the policy whereby the policy would have been extended for the period from November 25, 1933, to November 25, 1934. The insured was excused from tendering the premium which came due on November 25, 1934, or within thirty-one days thereafter, to make effective an extension of the policy for an additional year, because of defendant’s insistence on the lapse of the policy for non-payment of premium and its unwarranted refusal to continue the policy in effect.

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

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

Judgment accordingly.


source: Caselaw Access Project

author: Rippey, J.

license: Public Domain

text:
    Joseph Greco, as Administrator of the Estate of Mary Greco, Deceased, Respondent, v. S. S. Kresge Company, Appellant.
    Argued November 18, 1937;
    decided January 18, 1938.

      Alfred L. Becker, Robert M. McCormick and Robert M. McCormick, Jr., for appellant.
    No action lies under section 130 of the Decedent Estate Law (Cons. Laws, ch. 13) for death resulting solely from a breach of warranty implied under section 96 of the Personal Property Law (Cons. Laws, ch. 41). Such death does not result from a “ wrongful act, neglect or default.” (Greenwood v. Thompson Co., 213 Ill. App. 371; Kress & Co. v. Lindsey, 262 Fed. Rep. 331; Howson v. Potter Beef Co., 87 N. H. 200; Burkhardt v. Armour & Co., 115 Conn. 249; Gimenez v. Great A. & P. T. Co., 264 N. Y. 390; Ryan v. Progressive Grocery Stores, 255 N. Y. 388; Chysky v. Drake Bros. Co., 235 N. Y. 468; Bourcheix v. Willow Brook Dairy, 268 N. Y. 1; Race v. Krum, 222 N. Y. 410; Van Bracklin v. Fonda, 12 Johns. 468; Rinaldi v. Mohican Co., 225 N. Y. 70; Bernstein v. Queens County Jockey Club, 222 App. Div. 191; Van Beeck v. Sabine Towing Co., 300 U. S. 342; Alton v. Midland Ry. Co., 19 C. B. [N. S.] 213; Bradshaw v. Lancashire & G. Ry. Co., 10 C. P. 189; Potter v. Met. Dist. Ry. Co., 30 L. T. [N. S.] 765; Leggott v. Gt. Northern Ry. Co., 1 Q. B. D. 599; Jackson v. Watson & Sons, 2 K. B. 193; Lichtenstern v. Augusta-Aiken R. & E. Corp., 165 App. Div. 270.)

      Sidney M. Lindner, George I. Swetlow and Robert M. Lindner for respondent.
    The breach of the warranty was a “ wrongful act ” and “ default ” within the purview of section 130 of the Decedent Estate Law. (Lewis v. Ocean Accident & Guarantee Corp., 224 N. Y. 19; Clark v. London General Omnibus Co., [1906] 2 K. B. Div. 648; Hudson v. Lynn & Boston R. R. Co., 185 Mass. 510; McLean v. Burbank, 12 Minn. 530; Oldfield v. New York & Harlem R. R. Co., 14 N. Y. 310; Brown v. Buffalo &

      State Line R. R. Co., 22 N. Y. 191; Sullivan v. Dunham, 161 N. Y. 290; Busch v. Interborough R. T. Co., 187 N. Y. 388; Harkins v. Provenzo, 116 Misc. Rep. 61; Ryan v. Progressive Grocery Stores, 255 N. Y. 388; Van Bracklin v. Fonda, 12 Johns. 468; Hoe v. Sanborn, 21 N. Y. 552; Race v. Krum, 222 N. Y. 410; McSpedon v. Kunz, 271 N. Y. 131.) An action based on a breach of an implied warranty of fitness for human consumption has been treated in the same manner as tort actions resulting in personal injuries. (Hermes v. Westchester Racing Assn., 213 App. Div. 147; Bernstein v. Queens County Jockey Club, 222 App. Div. 191; Matter of Lowe Pharmacy, Inc., 249 App. Div. 845.) The breach of the warranty is a wrong. (Ryan v. Progressive Grocery Stores, 255 N. Y. 388; Harkins v. Provenzo, 116 Misc. Rep. 61.)
   Rippey, J.

Plaintiff is suing as administrator under section 130 of the Decedent Estate Law (Cons. Laws, ch. 13) for damages for the death of his wife alleged' to have resulted from the eating of infected pork frankfurters or sausages purchased from defendant, a retailer, on April 28, 1933. Two causes of action were set up in the complaint. The first was based upon the theory of a breach of an implied warranty that the food was fit for human consumption under section 96 of the Personal Property Law (Cons. Laws, ch. 41) and the second upon the theory of negligence. The second cause of action was dismissed by consent. Defendant’s motion to dismiss the first cause of action was denied. The Appellate Division upon affirming the decision of the trial court has certified the following question for our consideration: The second cause of action having been withdrawn, does the complaint state facts sufficient to constitute a cause of action? ”

In the complaint in the case at bar, as explained and amplified by the bill of particulars,' it is alleged, among other things, that the defendant offered provisions and food stuffs for sale to the public as a part of its retail business and invited the general public to enter its premises and purchase the same; that among such provisions and food stuffs was included a meat product known as pork frankfurters or sausages,” a quantity of which the deceased, Mary Greco, purchased and cooked, within two hours after the purchase, and consumed; that the said pork frankfurters or sausages were impliedly warranted by the defendant, its agents, servants and employees as fit for human consumption under the provisions of section 96 of the Personal Property Law and as being harmless and pure and containing no harmful or injurious substances. It is further alleged that the deceased relied upon -such warranties in the purchase and consumption of the food, that in breach of the warranties the product contained harmful and injurious ingredients and foreign bodies and as a result the deceased, after eating said product, contracted trichinosis, became seriously ill, and died. Negligence on the part of the defendant resulting in the injuries causing death is specifically disclaimed.

This action being brought as an action to recover for death, the burden was upon the defendant to plead and prove lack of care on the part of the deceased. (Decedent Estate Law, § 131) and the defendant so pleaded in its answer as a complete defense. The allegation to the effect that the food was offered for sale and sold by the defendant for human consumption may be deemed sufficient to admit evidence concerning the circumstances surrounding the sale. The defendant was presumed to know, in making such sale, that it was fit for the use for which it was sold. (Van Bracklin v. Fonda, 12 Johns. 468; Race v. Krum, 222 N. Y. 410.) Although the case of Race v. Krum (supra) was one where a dealer prepared the food which he sold and the cause of action arose prior to the enactment of the Uniform Sales Act (L. 1911, ch. 571), it was nevertheless deliberately decided, as stated in Rinaldi v. Mohican Co. (225 N. Y. 70), that accompanying all sales by a retail dealer of articles of food for immediate use there is an implied warranty that the same is fit for human consumption.” It is there pointed out (pp. 72, 73) that since the enactment of section 96 of the Personal Property Law, in a sale of food there is no longer an implied warranty of fitness unless the buyer expressly cr by implication acquaints the seller with the purpose of the purchase and unless it appears that the buyer relies on the seller’s skill or judgment. Even then if the buyer has examined the goods and should have discovered the defect there is no warranty. The burden of showing that he has made known his purpose and that he has relied upon the seller is on him who claims the existence of an implied warranty. If either of these two facts do not appear he fails in his claim * * *. We think that the mere purchase by a customer from a retail dealer in foods of an article ordinarily used for human consumption does by implication make known to the vendor the purpose for which the article is required. Such a transaction standing by itself permits no contrary inferences.”

Relying upon the implied warranty that the food sold to her was fit for human consumption, Mary Greco might have maintained in her lifetime a cause of action on contract for damages for personal injuries for its breach. (Rinaldi v. Mohican Co., supra; Ryan v. Progressive Grocery Stores, Inc., 255 N. Y. 388; Gimenez v. Great Atlantic & Pacific Tea Co., 264 N. Y. 390; McSpedon v. Kunz, 271 N. Y. 131.) Personal injury to the purchaser was the natural and necessary result of the breach of warranty reasonably within the contemplation of the parties when the sale was made and warranty given. (Ryan v. Progressive Grocery Stores, Inc., supra, at p. 395.) Though not based on fraud or deceit or negligence, the action is nevertheless maintainable to recover damages for personal injury necessarily flowing from the breach of the warranty. Though the breach resulted in personal injuries arising out of the wrongful act, neglect or default of the seller in violation of its duty to the purchaser under the contract, she would not have been required to frame the complaint along the usual lines employed in actions to recover damages for negligence. (See cases above.)

Section 130 of the Decedent Estate Law, so far as here material, provides that: “ The executor or administrator duly appointed in this state, or in any other state, territory or district of the United States, or in any foreign country, of a decedent who has left him or her surviving a husband, wife, or next of ldn, may maintain an action to recover damages for a wrongful act, neglect or default, by which the decedent’s death was caused, against a natural person who, or a corporation which, would have been hable to an action in favor of the decedent by reason thereof if death had not ensued.”

Under the statute, the elements which must necessarily be present to enable plaintiff to maintain this action are (1) the presence of the surviving spouse or next of ldn, (2) the presence of a natural person or corporation whose wrongful act, neglect or default caused the death, and (3) the allegation of a cause of action for injuries to the deceased which might have been maintained by the deceased by reason of such wrongful act, neglect or default had death not ensued. The plaintiff alleges that the husband and next of kin survive. Defendant is the corporation who sold the food and made the warranty, the breach of which caused the personal injuries to deceased which resulted in her death. The inquiry here is whether the breach of the implied warranty as alleged in the complaint, negligence being disclaimed, was a wrongful act, neglect or default ” within the meaning of the statute. The answer depends wholly upon a solution of the question as to whether breach of the implied warranty, in a case such as this, where personal injury to the person to whom the warranty is made results from the breach, is tortious in nature and effect and is due to the wrongful act or neglect or default of the person making and breaching the warranty. If so, the statute gives a cause of action to the surviving husband and next of ldn although, except for the statute, the cause of action for personal injuries arising out of the breach of warranty, would have abated at the death of Mary Greco (Hamilton v. Erie R. R. Co., 219 N. Y. 343, 350), or, because of lack of privity, no cause of action arose in favor of or against a stranger to the contract. (Chysky v. Drake Bros. Co., 235 N. Y. 468; Redmond v. Borden’s Farm Products Co., 245 N. Y. 512; Turner v. Edison Storage Battery Co., 248 N. Y. 73; Gimenes v. Great Atlantic & Pacific Tea Co., 264 N. Y. 390.) The statute has neither the purpose nor effect of changing the rule of the common law that actions to recover damages for personal injuries abate with the death of the person injured. It created a new and original cause of action based not upon damage to the estate of the deceased because of death but rather for the pecuniary injury to the surviving spouse and next of kin of the deceased from death caused by the wrongful act, neglect or default of another in a case where the deceased would have had a cause of action against such person had death not ensued (Hamilton v. Erie R. R. Co., 219 N. Y. 343, 350; Roche v. St. John’s Riverside Hospital, 96 Misc. Rep. 289; affd., 176 App. Div. 885) and it is not extinguished after it has once accrued by the death of specific beneficiaries named therein. (Van Beeck v. Sabine Towing Co., 300 U. S. 342.)

The first of the “ death acts took effect in England on August 26, 1846 (9 & 10 Viet., ch. 93) and provided that an action would lie against a person only where death was caused by his wrongful act, neglect, or default ” in a case where such a cause of action might have been maintained by the person injured if death had not ensued. In Pym v. Great Northern Ry. Co. (2 B. & S. 759; 8 Jur. [N. S.] 819, 820) it was said that “ the condition, that the action could have been maintained by the deceased if death had not ensued, has reference, not to the nature of the loss or injury sustained, but to the circumstances under which the bodily injury arose, and the nature of the wrongful act, neglect, or default complained of.” It has been generally held in England in cases cited in The Complete Statutes of England Classified and Annotated in continuation of Halsbury’s Laws of England ” (Vol. 12, p. 335) that defenses available in ordinary actions for negligence were all available in an action brought under the statute. It is clear from the title and wording of the act, from the debate at the time of its enactment and from the decisions affecting its application that it related to and was intended to relate only to causes of action arising out of the wrongful act, neglect or default of another involving tortious acts. Our own death statute as first enacted in 1847 (Laws of 1847, ch. 450) was almost identical in wording and purpose with the English act. Although there have been a number of amendments, the original act has not been changed in so far as the condition attached that the action can be maintained only for death arising through the wrongful act, neglect or default of the person to be charged with liability in a cause which might have been maintained by the person injured had death not ensued. Here, as under the English act, decisive on whether the action may be maintained are the “ circumstances under which the bodily injury arose and the nature of the wrongful act, neglect,[or default ” of which complaint is made.

Prior to the action for assumpsit, the remedy for breach of warranty was an action on the case for deceit. (Ames’ Lectures on Legal History [1913], p. 136.) Even today, an action for breach of warranty is, in some respects, an action in tort. Mere breach of contract, generally speaking, is not a tort. Yet the distinction between torts and breaches of contract is, oftimes, so dim and shadowy that no clear line of delineation may be observed and no accurate or satisfactory definition of either may be formulated. (Rich v. N. Y. C. & H. R. R. R. Co., 87 N. Y. 382; Busch v. Interborough R. T. Co., 187 N. Y. 388, 391.) Under each cause of action, whether framed in tort or on contract, default or breach of duty involves an injury. At times the same facts may warrant procedure ex contractu or ex delicto. At such times recovery is not conditioned on definition nor measured by a determination of whether it is grounded in a violation of a duty owing to another or in a breach of a contractual obligation. Nor is an action any the less on contract because the' elements of damage arise out of a trespass (Sullivan v. Dunham, 161 N. Y. 290), or an assault (Busch v. Interborough R. T. Co., supra) or other personal injury (Doedt v. Wiswall, 15 How. Pr. 128; affd., 15 How. Pr. 145; Gillespie v. Brooklyn Heights R. R. Co., 178 N. Y. 347). Violation of a duty owing to another is a wrongful act; breach of a contract involving violation of duty may be likewise a wrongful act. Here, the duty rested on defendant to see, at its peril, that the food was fit for human consumption and it is based on considerations of public health and public policy (Race v. Krum, supra). Though the action may be brought solely for the breach of the implied warranty, the breach is a wrongful act, a default and, in its essential nature, a tort. The death statute has been held to embrace an action for damages for trespass although no negligence was involved {Sullivan v. Dunham, supra). A similar statute has also been held to embrace an action for breach of warranty, when the breach is a violation of duty and a wrongful act.” (Greenwood v. Thompson Co., 213 Ill. App. 371; McLean v. Burbank, 12 Minn. 530.) In our own court, the breach of the implied warranty has been defined as a wrongful act (Ryan v. Progressive Grocery Stores, Inc., 255 N. Y. 388, 395). Bouvier (Law Diet., vol. 1) defines “ default ” as “ the non-performance of a duty, whether arising under a contract or otherwise.” By common understanding a breach of contract constitutes a default.

We conclude that the breach of the warranty in a case such as this was a default ” or wrongful act ” within the meaning of those terms as used in the statute not only as a matter of definition but within the clear legislative intent. Liability here is predicated upon the default ” or wrongful act ” of the seller and the exercise of due care on the part of the purchaser. The purchaser could recover, if living, because of the injury she received through the wrongful act ” or “ default ” of the seller based on the breach of the implied warranty that the food was fit for human consumption. The cause of action would not fail because the allegations of the complaint did not procee'd along traditional lines employed in an action for negligence. Within the terms of the statute, the administrator in the case at bar may maintain the action for the wrongful act, neglect or default ” of defendant arising out of the breach of the implied warranty that the pork sausages sold to the deceased were fit for human consumption because the defendant would have been liable therefor in such an action brought by the deceased if death had not ensued. Scienter on the part of the seller is presumed.

Under the common law, a person injured through a breach of duty imposed upon another, might, in his or her lifetime, recover for such injury, but death put an end to liability of the person responsible for such breach. The statute was enacted to remedy partially that evil, not to perpetuate it by leaving the statute open to narrow construction. Apropos are the words of Judge Cardozo in the closing paragraph of his opinion in Van Beeck v. Sabine Towing Co. (supra), where he refers to the construction to be given death statutes: Death statutes,” he writes, “ have their roots in dissatisfaction with the archaisms of the law which have been traced to their origin in the course of this opinion. It would be a misfortune if a narrow or grudging process of construction were to exemplify and perpetuate the very evils to be remedied (Cf. The Arizona v. Anelich, 298 U. S. 110, 123; Beadle v. Spencer, 298 U. S. 124, 128). There are times when uncertain words are to be wrought into consistency and unity with a legislative policy which is itself a source of law, a new generative impulse transmitted to the legal system. 1 The Legislature has the power to decide what the policy of the law shall be, and if it has intimated its will, however indirectly, that will should be recognized and obeyed.’ (Per Holmes, Circuit Justice, in Johnson v. United States, 163 Fed. 30, 32. Cf. Gooch v. Oregon Short Line R. Co., 258 U. S. 22, 24; South & Central American Commercial Co. v. Panama R. Co., 237 N. Y. 287, 291; 142 N. E. 666.) Its intimation is clear enough in the statutes now before us that their effects shall not be stifled, without the warrant of clear necessity, by the perpetuation of a policy which now has had its day. (The Arizona v. Anelich, supra; Cortes v. Baltimore Insular Line, supra; Warner v. Goltra, 293 U. S. 155.)”

The order should be affirmed, with costs, and the question certified answered in the affirmative.

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

Order affirmed.


text:
    Mary Isaac, as Administratrix of the Estate of Nelson Isaac, Deceased, Appellant, v. Town of Queensbury, Respondent. Leonard H. Gunning, Appellant, v. Same, Respondent. Francis H. DeRosia, Appellant, v. Same, Respondent. Desmond B. LaPoint, Appellant, v. Same, Respondent.

      Argued November 30, 1937;
    decided January 18, 1938.

      Walter A. Chambers and Willard A. White for appellants.
    The Appellate Division having dismissed the complaints, the Court of Appeals will take the view of the evidence most favorable to the plaintiffs. (Faber v. City of New York, 213 N. Y. 411; Melcher v. Ocean Accident & Guarantee Corp., 226 N. Y. 51; Hoykendorf v. Bradley Contracting Co., 227 N. Y. 204; Ehrenworth v. Stuhmer & Co., 229 N. Y. 210.) The facts found by the jury establish that prior to the accident the section of the State highway had been discontinued as such and had been turned over to and had reverted to the jurisdiction of the town. (Folliard v. Wallace, 2 Johns. 395; Humphreys v. Gardner, 11 Johns. 61; Hereford v. People, 197 Ill. 222; People ex rel. Loughran v. Railroad Comrs., 158 N. Y. 421; Delaplaine v. Hitchcock, 6 Hill, 14; Fidelity & Deposit Co. v. Queens Co. Trust Co., 226 N. Y. 225; People ex rel. Doscher v. Sisson, 222 N. Y. 387; Matter of Thompson, 204 App. Div. 182; Hagadorn v. Raux, 72 N. Y. 583; People ex rel. Root v. Bd. of Supervisors, 146 N. Y. 107; People v. Kerr, 27 N. Y. 188.) Findings of the jury having established that jurisdiction over the highway was vested in the town, it is liable for any defects therein to the plaintiffs. (Corcoran v. City of New York, 188 N. Y. 131; Snowden v. Town of Somerset, 171 N. Y. 99; Whitney v. Town of Ticonderoga, 127 N. Y. 40; Lendrum v. Village of Cobleskill, 192 App. Div. 828; Nicholson v. Town of Stillwater, 208 N. Y. 203; Johnson v. State, 186 App. Div. 389; 227 N. Y. 610; Wolf v. State, 122 Misc. Rep. 381; 210 App. Div. 827; Sporborg v. State, 226 App. Div. 113; Rigby v. Town of Gerry, 209 App. Div. 391; Augustine v. Town of Brant, 249 N. Y. 198; Gaynor v. Town of Hempstead, 153 Misc. Rep. 321.) The defendant had knowledge of the dangerous character of the place where the accident occurred. (Allen v.
      Town of Allen, 33 App. Div. 463; Spencer v. Town of Sardinia, 42 App. Div. 472; Weed v. Village of Ballston Spa, 76 N. Y. 329; Kunz v. City of Troy, 104 N. Y. 344; Gillrie v. City of Lockport, 122 N. Y. 403; Pomfrey v. Village of Saratoga Springs, 104 N. Y. 459; Lundbeck v. City of Brooklyn, 26 App. Div. 595; Dye v. D., L. & W. R. R. Co., 130 N. Y. 671.)

      J. Edward Singleton and Beecher S. Clother for respondent.
    A town is not liable for defects in a State highway; nor is it hable for the negligence of State officials. (Isaac v. Town of Queensbury, 244 App. Div. 14; Graham v. Town of Urbana, 235 App. Div. 275; 261 N. Y. 592; Hinds v. State, 144 Misc. Rep. 464; 240 App. Div. 742; 264 N. Y. 525; Miller v. State, 231 App. Div. 363; Floss v. State, 240 App. Div. 944; Ferguson v. Town of Lewisboro, 213 N. Y. 141.) Section 181-a (now section 63) of the Highway Law (Cons. Laws, ch. 25) is permissive and not mandatory. (United States [Matthews] v. Massachusetts Bonding & Ins. Co., 207 App. Div. 619.) The town was entitled to notice of entry of the order discontinuing the old highway. (Palmer v. Aldridge, 16 Barb. 131; Josh v. Marshall, 33 App. Div. 77; Bank v. Hotel Co., 147 N. C. 594; Matter of Salmon, 34 Misc. Rep. 251; Pittsburg, C. & Y. R. Co. v. Moses, 2 Atl. Rep. 188; Matter of New York Central & H. R. R. R. Co., 60 N. Y. 112.) The town superintendent of highways was not negligent. (Lynch v. Town of Rhinebeck, 210 N. Y. 101.)
   Rippey, J.

The causes of action alleged in the several complaints herein arose out of the same transaction and are grounded in negligence and nuisance. They were tried together and resulted in verdicts in favor of the several plaintiffs upon which separate judgments were entered. Upon appeal, the several judgments and orders denying motions for a new trial were reversed upon the law and the facts and the complaints dismissed. We must presume that the jury found every fact in favor of plaintiffs necessary to sustain their verdicts if there was any supporting evidence. In examining the record to see if proof of the facts established a cause of action, appellants must be given the benefit of every favorable inference which can reasonably be drawn.” (Faber v. City of New York, 213 N. Y. 411, 414.)

The accident out of which the causes of action arose occurred at about 11:15 p. m., January 31, 1932, while Nelson Isaac, Gunning, DeRosia and LaPoint were proceeding in an automobile along a highway in the town of Queensbury. The automobile collided with a fence erected and maintained across the highway near the westerly boundary line of the Delaware and Hudson Railroad property between that line and the railroad tracks. Isaac died as the result of the accident and the other plaintiffs received more or less serious injuries. The jury were authorized to find upon the facts adduced at the trial that all of the occupants of the automobile were free from negligence contributing to the accident or to their injuries. There was evidence to sustain the finding that the fence constituted a defect in the old highway, if it was still left open for traffic, which amounted to a nuisance. The only question presented requiring further attention is whether there was any evidence upon which the town of Queensbury may be held liable for negligence, as a result of which the accidents in the case at bar arose. Defendant seeks to maintain that the facts show as matter of law that the State of New York had control over the maintenance of the highway at the time of and immediately preceding the accident.

That part of the highway on which the accident occurred was a part of the State system of highways, a part of route 32B (County Highway 656), connecting with routes 9 and 22 (United States Routes 4 and 9, respectively), extending generally in an easterly and westerly direction between Glens Falls and Hudson Falls. The highway crossed the tracks of the Delaware and Hudson Railroad Company at grade and at an angle of approximately forty-five degrees about 150 feet easterly of the city line of Glens Falls. The Superintendent of Public Works, pursuant to the authority vested in him by section 145 of the Highway Law (Highway Law of 1909, ch. 30, § 145, as amd. by L. 1927, ch. 447, § 1 [§ 10, subd. 21, of the present Highway Law]; Cons. Laws, ch. 25), instituted proceedings and proposed the elimination of the grade crossing in question. He was authorized by the provision of subdivision 2, section 2 of chapter 445 of the Laws of 1927 to file with the Public Service Commission on or before October 1st programs for consideration of grade crossing ehminations. By subdivision 3 of the same section the Public Service Commission was required within fifteen days after the filing of any such program for elimination, to give “ notice to the superintendent of public works, the municipal corporations in which such crossings are located, and the railroad corporations operating the railroads crossed ” and to thereafter proceed to hold hearings upon any such program which the statute required to be completed not later than December first with designation of the crossings to be eliminated during the ensuing calendar year. On October 25, 1927, the Public Service Commission gave due notice to the Superintendent of Public Works, and to the town of Queensbury by service thereof upon the Supervisor of said town, of a public hearing to consider the elimination of the crossing in question. The hearing was had on November 29, 1927, and continued on subsequent dates thereafter until December 13,1928. The town of Queens-bury and others were parties to all the proceedings. The town was represented by counsel. The proposal of the Superintendent of Public Works indicated the elimination of this grade crossing by the construction of a new highway to the northward of the crossing and an underpass. On December 13, 1928, the Public Service Commission made its order which provided, among other things, as follows:

2. That said existing crossing at grade shall be eliminated by closing the present street between the x roperty lines of the railroad company and by diverting traffic by the construction of a new street and a new undercrossing of the railroad to be located about 430 feet northwesterly of the present crossing, substantially in accordance with the plan submitted at the hearing on June 19, 1928 * * *

“ 3. That the existing crossing shall be maintained until the new street undercrossing is completed and opened to traffic after which the existing street shall be closed and discontinued across the railroad.”

Service of the aforesaid order of December 13th was made upon the Supervisor of the town on January 3, 1929. Thereupon the contract for the work was let and construction of the new strip of highway and underpass was commenced and completed. On August 25, 1931, the Public Service Commission made an order approving the completed work. A certified copy of the order was served upon the Supervisor of the town of Queensbury with a statement that “ this is sent to you so you may have notice of the progress of the work,” and inclosed with the notice was a form of notification to the Commission under section 23 of the Public Service Law (Cons. Laws, ch. 48) of receipt of the certified copy of the order with a request that the notification paper be signed and mailed forthwith to the Commission. Thereupon the Supervisor signed the notification form in which he admitted service of the certified copy of the order of the Public Service Commission aforesaid and specifically approved the completed work.

In the latter part of June previous to the making of the order of August 25,1931, the new highway and underpass were completed and opened for traffic. When that occurred, the construction foreman of the Delaware and Hudson Railroad Company erected the fence in question upon the land of the railroad company, and thereafter down to the time of the accident kept the fence in repair. The town of Queensbury furnished no men or material for the construction or repair of the fence. At the time of the erection of the fence, the Department of Public Works unquestionably had control over the old highway. It ceased either to maintain or repair the highway from and after July 14, 1931.

On September 18, 1931, the Department of Public Works made its official order discontinuing the limited section of County Highway 656 as reconstructed under Public Service Case No. 4696 as a section of County Highway 656 and provided that no further maintenance by the State should be performed thereon and ordered that said section of said highway be and it is hereby turned over to the Town of Queensbury, Warren County, for future maintenance and repair.” This order was not officially served upon the Supervisor of the town of Queens-bury until March 18, 1932. Defendant asserts that before the portion of the old highway upon which the accident happened could revert to the jurisdiction of the town (1) a determination by the Department of Public Works that that portion no longer served a useful purpose as a part of the State highway system must have been made under section 63 of the Highway Law (formerly section 181-a), and (2) notice of such determination must have been served upon the town. Appellants attempt to meet that assertion by an argument that section 62 (formerly section 181) of the Highway Law is applicable to the case at bar and that no making or service of any order was necessary.

Prior to 1908 the highway in question was a town highway. It was then improved and became a county highway, and the State took over its maintenance in 1909 arid continued to maintain and repair it until July 14, 1931.

There is no statutory duty imposed upon the town to maintain State or county highways in a safe condition for travel or to remove obstructions therefrom except that imposed by section 53 (now section 140, subd. 9) of the Highway Law, which requires the town superintendent to remove obstructions caused by snow and to keep culverts and waterways free from snow and ice. The accident here was not due to snow or ice or to clogged culverts. Liability for maintenance of obstructions on a State highway can arise only in violation of a duty imposed by statute. (Graham v. Town of Urbana, 261 N. Y. 592.) Liability is imposed, however, on each town “ for all damages to persons or property sustained by reason of any defect in its highways or bridges, existing because of the neglect of any town superintendent of such town ” (Highway Law, § 74, now § 215). By the provisions of section 3 of the Highway Law all highways in towns outside of incorporated villages constituting separate road districts which are neither State nor county highways are town highways.

A highway can revert to the town under either section 62 or section 63 (formerly sections 181 and 181-a, respectively) of the Highway Law and, for the purposes of this case, only under the provisions of one of those sections. The provisions of section 62 have no application to a case such as this where a proceeding is instituted before the Public Service Commission for the elimination of a grade crossing. Determination of the necessity of a change of location of a limited section of a highway for the improvement of its alignment or of dangerous conditions authorized by the provisions of that section must be made by the Department of Public Works, whereas the determination of the necessity for the elimination of a grade crossing must be made by the Public Service Commission. Section 63 provides specifically for a case where a grade crossing is eliminated through proceedings before the Public Service Commission. Where proceedings are taken for a change of location of a limited portion of a highway under section 62, the cost of the relocation of the highway, exclusive of the cost of providing the new right of way which must be borne by the county, shall be paid from the funds which are provided for the repair and reconstruction of State highways, whereas in a case such as this where the elimination of a grade crossing is undertaken under the provisions of the Grade Crossing Elimination Act (Laws of 1928, ch. 678; Unconsolidated Laws [McKinney], Book 65, §§ 2011-2024) the cost, in so far as it is important here to indicate, shall be borne forty-nine per cent by the State, one per cent by the county in which the crossing is located, and fifty per cent by the railroad corporation affected thereby (§ 2013). It is quite clear that the two sections have relation to entirely different proceedings for different purposes. It must be presumed that the Legislature intended that sections 62 and 63 should have different applications; otherwise there would have been'no occasion for the enactment of the separate sections.

Under section 62, prior to its amendment by chapter 739 of the Laws of 1937, it was provided that “ the department of public works shall cease to maintain the section of highway discontinued, * * * upon the completion of the substituted section, and it shall revert to the jurisdiction of the town.” Under section 63, the portion of the highway eliminated reverted to the town upon completion of the ehminatioh work only where a determination had been made to the effect that it no longer served a useful purpose as a part of the State highway system. Notice of such determination was required to be given to the town. Although the section contained no provision for notice, inasmuch as the determination affected the rights of persons and property, reasonable notice was required. The provisions of section 63 were alone applicable under which a reversion of the eliminated portion of the old highway could be made to the jurisdiction of the town.

There is nothing contained in section 63 that required the determination to be made by the Department of Public Works. Having in mind the general scheme of highway administration, it might have appropriately been provided that such a determination should be made by the Department of Public Works.

The Department of Public Works attempted to make a determination such as required under section 63 of the Highway Law, as we have indicated, by its order of September 18, 1931. That order can be deemed a compliance with that section only in the event that we. may ignore the “ whereas ” clause, which by its wording .brings the order squarely under the provisions of section 62. Although referring to section 181-a (§ 63), the determination, if any, was made "under section 181 (§ 62). The order was, therefore, ineffectual to consummate a reversion of the eliminated portion of the old highway to the town, for it contained no finding by the Department of Public Works that the eliminated portion of the State highway no longer serves a useful purpose as a part of such system.” Perhaps an order which merely transfers the highway to the town may be deemed a sufficient compliance with the law to effectuate the reversion of the eliminated portion to the jurisdiction of the town without any formal statement therein of a finding or determination that it no longer serves any useful purpose in the State highway system. Upon that point we do not pass. Such an order is not before us. In the order here we cannot ignore the statement contained in the “ whereas ” clause for it contains a specific statement of the determination upon which the order is based. Even though we could ignore it, the order was not served before the happening of the accident.

With the order of the Department of Public Works ineffectual, the question arises as to whether or not such a determination had been made that the eliminated portion ' of the State highway, after completion of the work, would no longer serve a useful purpose in connection with the general highway system of the State as would effect a reversion of the eliminated portion of the highway to the town. The Department of Public Works was the moving party before the Public Service Commission and was a party to the determination of the latter contained in its order of December 13, 1928. Attention has already been called to the fact that the town was a party to] the proceedings before the Public Service Commission and •represented throughout by counsel and that a copy of the order of December 13, 1928, was duly served upon the town. That order provided that after the ehmination work had been completed and the underpass opened for traffic the existing street should be closed and discontinued across the railroad. Necessarily, when closed, it could no longer serve a useful purpose in the State highway system. We have also called attention to the fact that the Public Service Commission served upon the town its order of August 25, 1931, to the effect that the work had been completed and approved, that the Supervisor of the town had acknowledged the receipt of that notice on September 3,1931, and of the order and that he had also acknowledged that the work had been completed and that it had been approved.

A sufficient determination was made in the proceeding before the Public Service Commission in which defendant was a party and sufficient notice was given to meet the requirements of the provisions of section 63. We are not permitted to insert in that section a clause that the determination must be made exclusively and under all circumstances by the Department of Public Works when the Legislature saw fit to be silent on that subject. If that conclusion is correct, it follows that no further or different determination, order or notice to the town was necessary and that from and after the third day of September, 1931, the portion of the highway located within the town which was eliminated ceased to be a county highway or a part of the State highway system and reverted to the jurisdiction of the town. The town superintendent thereby and thereupon was charged with the duty of maintenance. The defect existed in the highway from July 14, 1931. Several accidents, similar to the one on which these actions are based, had occurred between July 14,1931, and the date on which the automobile containing Isaac and the other plaintiffs ran into the obstruction. There was sufficient evidence to make it a question of fact whether the superintendent had actual notice of the defective and dangerous condition of the highway or whether it had existed for such a length of time as to charge him with notice thereof. (Cf. Fidelity & Deposit Co. v. Queens County Trust Co., 226 N. Y. 225, 233.) Through him, if he knew or ought to have known of the dangerous situation and failed to remedy it or to give reasonably sufficient notice of the defective condition of the old highway, the town was chargeable with liability for negligence in the maintenance and lack of notice to travelers on the highway of the obstruction if such was the sole proximate cause of the accident.

In each action the judgment should be reversed and a new trial granted, with costs to abide the event.

Crane, Ch. J., O’Brien and Htjbbs, JJ., concur; Lehman, Lotjghran and Finch, JJ., dissent.

Judgments reversed, etc.


author: Per Curiam.

text:
    Joseph Canepa, Respondent, v. “John Doe,” as President of Sheet Metal Workers International Association, Local No. 137, et al., Appellants, Impleaded with Others.
    Argued January 4, 1938;
    decided January 18, 1938.

      Louis Waldman and David I. Ashe for appellants.
    Plaintiff, by aligning himself with anti-union employers and seeking to benefit from the maintenance of non-union standards in the sign industry, has injected himself squarely within the labor dispute between the union and the anti-union sign manufacturers. (Goldfinger v. Feintuch, 276 N. Y. 281; Exchange Bakery & Restaurant, Inc., v. Rifkin, 245 N. Y. 260.) The instant action involves and grows out of a labor dispute within the provisions of section 876-a of the Civil Practice Act. (Exchange Bakery & Restaurant, Inc., v. Rifkin, 245 N. Y. 260; Duplex Printing Press Co. v. Deering, 254 U. S. 443; Prussian v. United States, 282 U. S. 675; Matter of Frasch, 245 N. Y. 174; Republic of Honduras v. Soto, 112 N. Y. 310; Robin Holding Corp. v. Walker, 230 App. Div. 666; Wilson v. Bradley, 105 Ky. 52; Nekoosa-Edwards Paper Co. v. R. R. Comm., 193 Wis. 538; Codlin v. Kohlhousen, 9 N. M. 565; Bailey Loan Co. v. Seward, 9 S. D. 326; Henrietta Mining & Miller Co. v. Gardner, 173 U. S. 123; United States v. Weirton Steel Co., 7 Fed. Supp. 285.) The complaint does not state facts sufficient to constitute a cause of action in that it fails to set forth the necessary allegations for the issuance of an injunction, as required by section 876-a of the Civil Practice Act. (Riggs v. Chapin, 7 N. Y. Supp. 765; Pawn v. Irwin, 82 Hun, 607; Hydrox Ice Cream Co. v. Doe, 159 Misc. Rep. 642; 250 App. Div. 770; Stanley v. Peabody Coal Co., 5 Fed. Supp. 612; Dean v. Mayo, 8 Fed. Supp. 73; Cinderella Theatre Co. v. Sign Writers Local Union, 6 Fed. Supp. 164.)

      Sidney 0. Raphael for respondent.
    The cause of action involved herein is not a “ labor dispute.” (Auburn Draying Co. v. Wardell, 227 N. Y. 1; American Gas Stations, Inc., v. Doe, 250 App. Div. 227; Remington Rand v. Crofoot, 248 App. Div. 356; Sharf v. Doe, 247 App. Div. 882.) The complaint sufficiently sets forth a good cause of action. (Bown v. Ramsdell, 227 App. Div. 224; Dyer v. Broadway Central Bank, 252 N. Y. 430.)
   Per Curiam.

The complaint sufficiently alleges that the picketing by the defendants is part of a true secondary . boycott and an unlawful interference with the business of the plaintiff (Goldfinger v. Feintuch, 276 N. Y. 281.) Whether or not the case is one involving or growing out of a labor dispute ” as these terms are defined by section 876-a of the Civil Practice Act, the complaint is sufficient.

The order should be affirmed, without costs. The first question certified is not answered and the second question is answered in the affirmative.

Crane, Ch. J., Lehman, O’Brien, Lottghran, Finch and Rippey, JJ., concur; Hitbbs, J., taking no part.

Order affirmed, etc.


author: Loughra¡st, J. Lehman, J.

text:
    In the Matter of The Barber Company, Inc., Respondent, against Department of State of the State of New York et al., Appellants. Barber & Co., Inc., Intervener, Appellant.

      Argued November 16, 1937;
    decided January 18, 1938.

      John J. Bennett, Jr., Attorney-General (Joseph M. Mesnig, Henry Epstein and F. B. Chant of counsel), for appellants.
    The purely ministerial action of the Secretary of State was neither erroneous, arbitrary or capricious, and should not be disturbed. (Matter of Clark v. Smith, 250 App. Div. 233; Matter of Durr v. Paragon Trading Corp., 270 N. Y. 464.)

      Elkan Turk, Milton J. Levitt, Benjamin Wiener and Herman Goldman for intervener, appellant.
    If the Court of Appeals finds that there was competent proof to sustain the finding of the Secretary of State a reversal is required. (Fellows v. Northrup, 39 N. Y. 117; Putnam v. Hubbell, 42 N. Y. 106; Cassidy v. McFarland, 139 N. Y. 201; Sheldon v. Sheldon, 51 N. Y. 354; Saltzsieder v. Saltzsieder, 219 N. Y. 523.) The Secretary of State was required to consider only the similarity between the names of petitioner anddntervener. His finding was supported by competent proof, and he applied the correct rule of law to the evidence before him. (Corning Glass Works v. Corning Cut Glass Co., 197 N. Y. 173; Matter of Brooks Clothing Co. v. Flynn, 232 App. Div. 346; Grand Rapids Furniture Co. v. Grand Rapids Furniture Shops, 221 Mich. 548; State ex rel. Collins v. Howell, 80 Wash. 649; Diamond Drill Contracting Co. v. International Diamond Drill Contracting Co., 106 Wash. 72; Rixford v. Jordan, 214 Cal. 547; B. P. O. Elks v. Improved B. P. O. Elks, 205 N. Y. 459; Matter of General Von Steuben Bund, Inc., 159 Misc. Rep. 231; American Steel Foundries v. Robertson, 269 U. S. 372.) Even if section 9 of the General Corporation Law (Cons. Laws, ch. 23) were to be construed with reference to the law of unfair competition, the determination of the Secretary of State was supported by competent proof. (Tiffany & Co. v. Tiffany Productions, Inc., 147 Misc. Rep. 679; 237 App. Div. 801; 262 N. Y. 482; Standard Oil Co. of New Mexico v. Standard Oil Co. of California, 56 Fed. Rep. [2d] 973.)

      P. C. Dugan and Ralph D. Ray for respondent.
    Petitioner is entitled to use its name, The Barber Company, Inc., in the asphalt business in New York. No such deception as is contemplated by the statute can result since Barber & Co., Inc., is engaged only in the shipping business. (Corning Glass Works v. Corning Cut Glass Co., 197 N. Y. 173; Wheeler Syndicate, Inc., v. Wheeler, 99 Misc. Rep. 289; Commercial Union Ins. Co. v. Smith,
      2 N. Y. Supp. 296; 61 Hun, 625; Eastern Constr. Co. v. Eastern Engineering Corp., 246 N. Y. 459; Hygeia Water Ice Co. v. New York Hygeia Ice Co., 140 N. Y. 94; People ex rel. U. S. Grand Lodge v. Payn, 161 N. Y. 229; Material Men’s Mercantile Assn., Ltd., v. New York Material Men’s Mercantile Assn., Inc., 169 App. Div. 843; 224 N. Y. 670; National Grocery Co. v. National Stores Corp., 95 N. J. Eq. 588; 97 N. J. Eq. 360; Farmers Loan & Trust Co. v. Farmers Loan & Trust Co. of Kansas, 1 N. Y. Supp. 44; Beech-Nut Packing Co. v. Lorillard Co., 273 U. S. 629.) When the determination was made there was ample additional evidence before the Secretary of State of the real nature of the respective fields of both companies. The Secretary of State acted on the basis of that evidence and has certified it as the record on which he based his determination. Having acted on such evidence, he is bound by it. (People ex rel. Woodward v. Draper, 142 App. Div. 102; 202 N. Y. 612.)
   Loughra¡st, J.

This controversy is one as to the construction of the following provision of section 9 of the General Corporation Law (Cons. Laws, ch. 23): No certificate of incorporation of a proposed domestic corporation, and no statement and designation of a foreign corporation, having the same name as a corporation authorized to do business under the laws of this state or a name so nearly resembling it as to be calculated to deceive, shall be filed or recorded in any office for the purpose of effecting its incorporation, or of authorizing it to do business in this state.”

The Barber Company, Inc., is a stock corporation existing under the laws of the State of New Jersey. On December 22, 1936, it duly made application for a certificate of authority to do business in this State. This application was denied by the Department of State “ on the ground that the name so closely resembles that of Barber & Co., Inc., the certificate of incorporation of which was filed on the 25th day of September 1936 as to be calculated to deceive.”

This is in form a certiorari proceeding brought by The Barber Company, Inc. (the New Jersey corporation) to review that ruling. Barber & Co., Inc. (the registered domestic corporation), has been permitted to intervene. The Appellate Division could discover in the record no competent proof to sustain the finding on which the Department of State based its action. In that view it followed that The Barber Company, Inc., was entitled as matter of law to the certificate of authority for which it applied and an order was made accordingly. The Department of State and Barber & Co., Inc., appeal from that order.

The main question concerns the extent of the executive jurisdiction conferred by the foregoing provision of section 9 of the statute. Appellants contend that this is an unqualified prohibition which limited the Secretary of State to comparison of the proposed corporate name with that already registered. His duty was done, they say, when by the tests of sight and hearing it had been ascertained that the rival symbols so far approximated each other that unsuspecting persons using ordinary caution and discrimination were likely to be misled.

On the other side, the respondent maintains that so strict a construction is gainsaid by the fair implications, if not by the letter of the statutory command; that what is banned thereby is the practice of deception by the simulation of a registered corporate name; and that the investigation here to be made to that end by the Secretary of State was essentially no different from the inquiry to be undertaken by the court in a case of claimed unlawful misuse by one corporation ofjthe name of another.

Doubtless the spirit of section 9 does match in some degree the purpose and policy of the principle on which judges proceed in dealing with unfair competition (Corning Glass Works v. Corning Cut Glass Co., 197 N. Y. 173, 178). But from this coincidence it does not ensue that the power to be exercised by the Secretary of State is equivalent to the plenary equity jurisdiction of the court in comparable situations. We think the scope of the departmental function here invoked is fixed by the statute and that the range of its operation is neither so precise as the appellants contend nor yet so comprehensive as is maintained by the respondent.

The authorization of foreign corporations to do business within this State is regulated in general by section 210 of the statute. It is thereby provided:

A foreign corporation, other than a moneyed corporation, shall not do business in this state without having first obtained from the secretary of state a certificate of authority. To obtain such certificate, the corporation shall comply with the following conditions:

1. It shall present to the secretary of state a statement and designation in its corporate name, signed and acknowledged by its president, or a vice-president, or its secretary, treasurer, managing director or attorney in fact, which shall set forth the state or country of its incorporation, the place where its office within this state is to be located, and if such place be in a city, the location thereof by street and number or other particular description; the business which it proposes to do within this state, and a designation of the secretary of state as its agent upon whom all process in any action or proceedings against it may be served within this state.

2. Annexed to such statement and designation shall be a copy of its certificate of incorporation, duly certified by the public officer having custody of the original, or, if the corporation is created by a special law and has no certificate of incorporation, a duly certified copy of such law, and, if any such copy is in a foreign language, an English translation thereof verified by oath of the translator.”

Restrictions on the filing of such a statement and designation are defined by section 211. These have no relevancy to this controversy.

The issuance of a certificate of authority to a foreign corporation is regulated by section 212. It is thereby provided:

“ 1. The secretary of state, subject to the provisions of sections nine and two hundred and eleven,[and upon payment of the fees required by law, shall file the documents prescribed in section two hundred and ten and shall issue to the corporation a certificate of authority, stating the date of the filing of such documents and that the corporation is authorized to do, in this state, the business set forth in the statement and designation, a copy of which shall be annexed thereto.

2. Upon the issuance of such certificate the corporation may do, in this state, any of the business referred to in the certificate of authority and no other.”

These provisions of sections 210 and 212 circumscribed the official action that was here to be taken under section 9. The Secretary of State was not bound to go beyond the showing made by the documents on file in his office or presented to him in accordance with the statute. The facts before him were the respective names of the two corporations; the character and extent of their respective corporate powers; the location of the place of business of the registered domestic corporation; and the place within this State where the office of the foreign corporation was to be located and the nature of the business proposed to be done there. In the majority opinion of the Appellate Division reference is made to voluminous historical data as to both corporations, doubt is expressed respecting the good faith of one, and certain collateral equities are said to be with the other. We think those matters were outside the field of the inquest which the Secretary of State was required by the statute to hold.

There remains for consideration whether the ruling of the Department of State was without warrant in the competent evidence.

Respondent’s name is “ The Barber Company, Inc.;” that of the appellant corporation is “ Barber & Co., Inc.” The respective certificates of incorporation show that the main business of the former is the production of asphalt and petroleum for paving and kindred uses, and that the latter is chiefly engaged in the construction, repair and operation of steamships and other water craft. The former proposed to establish its local office at 30 Rockefeller Plaza, Manhattan, city of New York. The place of business of the latter is located at 17 Battery Place in the same borough. •'

These facts, we think, were at least sufficient to authorize the departmental decision that in the circumstances the corporate name of the respondent so nearly resembled that of the registered appellant corporation as to be calculated to deceive.” While the two corporate names are not the self-same thing, both make pretty much the same appeal to eye and ear and neither suggests any specific commercial activity. Both corporations are to do business in the same locality. Though competition between them may presently be unlikely, neither the financial advantage of either nor the convenience of its customers was necessarily a conclusive factor. The duty of the Department of State was a duty to the public in the first instance. The effect of its action upon the rights of those who would seek executive or judicial relief against either corporation was to be considered as was also the effect thereof on the functions of these branches of the government.

The order of the Appellate Division should be reversed and the order of certiorari dismissed, with costs in all courts.

Lehman, J.

(dissenting). The Secretary of State must decide whether the name of a proposed domestic corporation or of a foreign corporation seeking authority to do business here is “ the same name as a corporation authorized to do business under the laws of this state or a name so nearly resembling it as to be calculated to deceive.” In this case there is close resemblance, but not identity of name, between The Barber Company, Inc., a corporation organized under the laws of the State of New Jersey and which seeks authority to do business in this State, and Barber & Co., Inc., a corporation organized under the laws of this State a short time before The Barber Company, Inc., filed its application.

Mere similarity of name is insufficient to require or permit the Secretary of State to refuse an application to file a certificate. The resemblance must be so close as to be calculated to deceive.” Those words are not synonymous with “ tending to confuse.” The statutory test is whether members of the public by the resemblance of name might be induced to deal with a corporation believing that they were dealing with another corporation. That test can be applied only where there is proof of the nature of the business which the two corporations are authorized to carry on and which they do carry, on. Whether similarity of names has tendency to deceive must depend to a great extent upon the fields in which the names are used.

When the Legislature conferred upon the Secretary of State the authority and the duty to determine the question, it placed no limitation upon the nature of the evidence which he might consider. I see no good reason why the courts should limit him to documents on file in his office and documents presented to him for filing in accordance with the statute. I see strong reasons why he should be permitted to consider any evidence which may be submitted to him and which may be relevant upon the question he must determine. Denial to a corporation of the right to do business in this State under the corporate name it has selected may work grave injury to the corporation. A valuable good will may be connected with that name which will be lost if it is compelled to carry on business under another name. Where the chosen name is “ calculated to deceive,” it is reasonable and in accord with sound public policy to deny the right to carry on business under such name. Where in fact the choice of name is not calculated to deceive, denial of right to use it would be unreasonable. Documents in the office of the .Secretary of State may in many instances be sufficient to determine the question of fact. If insufficient, or if his determination is challenged, the Secretary of State should be permitted to consider other evidence submitted to him. It may be that the power of the Secretary of State is not equivalent to the plenary equity jurisdiction of the court where there is claim of unfair competition. None the less, just as the equitable jurisdiction of the court may be invoked only where there is proof of deception, so the power of the Secretary of State to reject a certificate arises only where it appears that similarity of name is calculated to produce deception. The basic question to be determined is similar, and the Legislature did not intend that the Secretary of State should make an erroneous or inequitable determination because of arbitrary limitation placed upon the relevant evidence which he may consider.

This case illustrates the inequities and the anomalies which may arise if the powers of the Secretary of State are restricted in the manner suggested by the appellant. The petitioner seeks authority to do business here under its corporate name. Its main business is, as Judge Loughran points out, the production of asphalt and petroleum for paving and kindred uses. It has been authorized to conduct that business under its corporate name elsewhere in the United States, including the State in which the intervener was, until recently, incorporated. The intervener is chiefly engaged in the construction, repair and operation of steamships and other water craft. The applicant and the intervener operate in fields almost completely separate. The tendency of similarity of names to create deception or even confusion in connection with the business to be conducted here is almost illusory. If hereafter the manner of conducting business by either should accentuate that tendency and result in unfair competition, a court by the exercise of its “ plenary equity jurisdiction ” can afford ample protection.

Denial of authority to the petitioner to do business here under its corporate name will require the petitioner to refrain from doing business here or to change its corporation name, and to obtain authority in this State and elsewhere to do business under the changed name. If it changes its corporate name, the changed name may be similar to the name selected by some other corporation in some other State. The difficulties and the inconveniences may be endless. The Legislature has decreed that in spite of such difficulties, authority to do business here shall be denied to a corporation using a name so nearly resembling the name of a corporation already authorized to do business here “as to be calculated to deceive.” There must be evidence to justify a finding that deception may reasonably be anticipated as the result of similarity of name. There can be no reasonable anticipation of such result here, for the names will, it appears, be used only in widely separated fields. Therefore the order of the Appellate Division should be affirmed, with costs.

Crane, Ch. J., O’Brien, Hubbs and Rippey, JJ., concur with Lotjghran, J.; Lehman, J., dissents in opinion in which Finch, J., concurs.

Order reversed, etc.