author: Crane, J.

text:
    Frank X. Scherer, Respondent, v. East Side National Bank of Buffalo, Appellant.

      (Argued November 24, 1933;
    decided January 9, 1934.)

      Victor B. Wylegala for appellant.
    It is not necessary that the agreement of forbearance be for a fixed and definite time; it is sufficient that the promise is to forbear generally without specifying any time, the law presuming in such case that the forbearance shall be for a reasonable time, what is a reasonable time depending upon the facts and circumstances of each particular case. (Traders Nat. Bank v. Parker, 130 N. Y. 415; Muir v. Greene, 191 N. Y. 201; Strong v. Sheffield, 144 N. Y. 392; Greene v. Odell, 43 App. Div. 494; Oppenheim v. Waterbury, 86 Hun, 122; 155 N. Y. 684; Helios-Upton Co. v. Thomas, 96 App. Div. 401; 184 N. Y. 585; Union Nat. Bank v. Leary, 77 App. Div. 332; Johnson & Higgins v. Harper, 228 Fed. Rep. 730; Smith v. Molleson, 148 N. Y. 241; Erie County Sav. Bank v. Coit, 104 N. Y. 532.) Duerr’s guaranty to plaintiff was a sufficient consideration for plaintiff’s guaranty to defendant. (1 Clark on New York Law of Contracts, § 239; Sun Oil Co. v. Heller, 248 N. Y. 28.)

      Robert J. Lansdowne and Paul J. Batt for respondent.
    Duerr’s guaranty to plaintiff was not a sufficient consideration for the latter’s guaranty to the defendant. (Arend v. Smith, 151 N. Y. 502.) The verdict is not contrary to law. (Sutter v. Vanderveer, 122 N. Y. 652; Berson Sydeman Co. v. Waumbeck Mfg. Co., 212 App. Div. 422; Vanderbilt v. Schreyer, 91 N. Y. 392; Barney v. Forbes, 118 N. Y. 580; Evansville Nat. Bank v. Kaufmann, 93 N. Y. 273; Atlantic Nat. Bank v. Franklin, 55 N. Y. 235; Strong v. Sheffield, 144 N. Y. 392.)
   Crane, J.

From about February, 1930, one Edmund C. Johnston, who was the president of the First National Bank of Kenmore, was indebted to the defendant bank on a demand note for $23,000, partly secured by collateral, and partly by the written guaranty of Edward A. Duerr, the president of the defendant bank. The collateral included four hundred odd shares of the Kenmore Bank stock, of which Johnston was president. The plaintiff, Frank X. Scherer, had been in the retail and wholesale meat business for twenty-six years. At one time he was a director and member of the executive committee of the Genesee National Bank, of which Johnston was the executive officer; he was a director of the Genesee National Corporation; later he became a director and member of the executive committee of the Commercial Trust Company; shortly after Johnston left this institution to take up the presidency of the First National Bank of,Kenmore, Scherer also left and became a director in the Kenmore bank. Johnston and Scherer had a joint stock trading account. Scherer had a safe deposit box at the Kenmore bank and left the key to it with Johnston’s: secretary so that Johnston could have access to it.

These facts are related to show that Johnston and Scherer were close, intimate friends and business confidants; that their financial interests were somewhat united. By January, 1931, securities had, declined in value and the directors of the East Side National Bank of Buffalo, New York, the defendant, were dissatisfied with the security for the Johnston loan. They were critical of Duerr’s guaranty, not only because he was an officer of their institution, but also for the reason that his financial responsibility had become dbubtful. Johnston was called upon for payment, or for more collateral. " Mr: Duerr told Johnston that his net worth had decreased somewhat; that the board were critical and wanted him (Johnston) to pay the note. Prior to this conversation and on October 15, 1930, Duerr had written Johnston: I wondered if it wouldn’t be possible some way or other in view of the criticism to obtain another guarantor on this obligation. * * * I am perfectly willing to ride along with this but the Examiner recommended that loans guaranteed by me be paid.”

On March 9, 1931, the president, Edward A. Duerr, again addressed a communication to Edmund G. Johnston. It reads as follows:

" March 9, 1931.
“ Mr. Edmund C. Johnston, President
First National Bank of Kenmore,
Kenmore, New York.
“ My dear Ed: I have just had the ‘ raspberry ’ from some of our directors relative to my contingent liability at this Bank. They have asked me not to endorse or guarantee for anyone in the future, and have requested that I make arrangements to take this endorsed and guaranteed paper out of the Bank.
“ I think their demands are just, reasonable and sound, and I am going to ask you to make arrangements to place your note elsewhere, so that I can meet with the requirements of our directorate.
I am sorry that I must make this request. I had hoped you would have been able to obtain the endorsement of Mr. Scherer before this.
“ I would appreciate it very much if you could make these arrangements as soon as possible.
“ Yours sincerely,
“ EDWARD A. DUERR,
“President

That a demand was made upon this borrower, Johnston, prior to March 21, 1931, to pay his indebtedness, take his note out of the bank, or else give further security, is uncontradicted and beyond question. He arranged to get other security by having his friend and co-worker, Scherer, guarantee bis indebtedness'with the defendant bank to the extent of $10,000. His indebtedness to the bank was thereafter split up into two notes, one of which Scherer guaranteed. That Scherer knew his guaranty involved financial risk, and that he might be called upon for payment is evidenced from the fact that he refused to make this guaranty until he himself was secured. Scherer’s guaranty is a formal, signed and sealed instrument dated March 21, 1931, reading in part as follows:

For Value Received, and to enable Edmund C. Johnston of Eggertsville, New York, hereinafter designed as Debtor,’ to obtain credit, from time to time of the East Side National Bank, of Buffalo, N. Y., I hereby request said Bank to extend from time to time to said Debtor such credit as said Bank may deem proper, and I hereby guarantee the full and proper payment to said Bank at maturity and at all times thereafter, and also at the time hereinafter provided, of any and all indebtedness, liabilities and obligations of every nature and kind of said Debtor to said Bank, * * * to the extent of Ten Thousand and 00 /100 Dollars, with interest at the rate of 6% per annum from maturity until paid,” etc.

The other provisions relate to the waiver of notice and the right to sue. Although we would be justified in taking Mr. Scherer at bis word, when he signed and sealed this document, whereby Johnston’s loan was extended by the bank, we have additional facts which show conclusively that this was more than a mere formality and an unenforceable accommodation. Realizing his liability to the bank, Scherer obtained from Duerr a written agreement, dated March 24, 1931, to protect and save him harmless from all loss by reason of the said guaranty of Johnston’s note. As a witness in this case, Scherer testified:

Q. He (Johnston) told you in order to continue his credit at the East Side National Bank you would have to substitute for Mr. Duerr? A. Yes, I substituted for Mr. Duerr, because Mr. Duerr was on the guarantee.

“ Q. In order to keep up his credit, to continue his credit it would be necessary to have you or someone else responsible to substitute for Mr. Duerr? A. He asked me if I would.

“ Q. And you finally did? A. After I had a conversation with Mr. Duerr.”

Whatever the arrangement or understanding may have been between the plaintiff and Johnston or Duerr in any way conflicting with these written statements, it was absolutely immaterial to the bank. The bank was the creditor to whom the money was due. As early as January, 1931, the bank had demanded payment from Johnston. He was requested in writing to take his note out of the bank and he knew that Duerr’s guaranty, and the stock held as security, were considered insufficient. Under these circumstances, Scherer guaranteed his indebtedness to the extent of $10,000, stating as clearly as the English language can state it, that he was furnishing the guaranty to the bank to enable Johnston to obtain credit from time to time. The bank accepted the guaranty of Scherer and acted upon it; extending the demand for payment until the following August. On December 19, 1931, Johnston, not having paid his notes as demanded, the collateral was sold, leaving a balance more than the guaranty still due. Scherer at that time having oh deposit in the bank more than sufficient to meet his guaranty, the amount due from him was charged against his account. Thus, the form of this action.

The plaintiff has sued for the ten thousand odd dollars due him as a depositor; the defendant has counterclaimed that the amount was applied to the sum owing the bank on his written guaranty of Johnston’s $10,000 note, and that this was done in accordance with the terms and conditions of the instrument. There is no fault found with the methods adopted by the bank or- over the lack of notice. The only point raised on the trial of this case has been the claim of Scherer that his guaranty was a mere accommodation without consideration. A recital of the above facts is a sufficient answer to such a claim. To furnish a valuable consideration, one in the nature of forbearance, it was not necessary that a definite time should be fixed as the limit or extent of the forbearance. (Traders’ Nat. Bank v. Parker, 130 N. Y. 415; Muir v. Greene, 191 N. Y. 201; Strong v. Sheffield, 144 N. Y. 392.) The fact that Scherer by his guaranty requested an extension of credit for Johnston, and that the bank thereafter, acting upon his written promise, extended the time and carried the loan for from five to eight months, was sufficient to make Scherer’s promise binding at law. Formal legal papers dealing with bank credit must mean something. The directors of this bank took Scherer at his word and carried Johnston’s paper and his loan for months on the strength of the former’s written promise. To permit him now to repudiate the transaction under the plea of an empty formality to deceive the unsuspecting and to trick bank examiners, would cast further discredit upon banking, and weaken confidence in reputed assets.

There is no legal excuse that we can find in this record for Scherer’s defaulting on his obligation, and the judgments in the courts below should be reversed and judgment granted dismissing plaintiff’s complaint, with costs in all courts.

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

Judgment accordingly.


source: Caselaw Access Project

author: O’Brien, J.

license: Public Domain

text:
    In the Matter of 176 and 178 East Main Street, Amsterdam. The Buffalo Insurance Company of Buffalo et al., Appellants; Morris Yoscovitz, Respondent.
    (Argued November 24, 1933;
    decided January 9, 1934.)

      Charles B. Sullivan and Warner M. Bouck for appellants.
    The County Judge was without jurisdiction to appoint an umpire. (Cohen v. Atlas Assur. Co., 163 App. Div. 381; Strome v. London Assur. Corp., 20 App. Div. 571; Bradshaw v. Agricultural Ins. Co., 137 N. Y. 137; N. Y. Mut. Assn. v. Manchester Ins. Co., 94 App. Div. 104; West Side Bank v. Pugsley, 47 N. Y. 368; Kenny v. South Shore Natural Gas & F. Co., 201 N. Y. 89; Matter of King, 24 App. Div. 605.)

      Harry V. Borsi for respondent.
    Respondent had the right to attack collaterally the alleged award. (Wick v. Rea, 54 Wash. 424; Baker v. Byrn, 89 Hun, 115; Mandeville v. Reynolds, 68 N. Y. 528; Ward v. Town of Southfield, 102 N. Y. 287; Rice v. Bruff, 87 Hun, 511; Richardson v. Trimble, 38 Hun, 409; Verplanck v. Van Buren, 76 N. Y. 247; Johnson v. Girdwood, 7 Misc. Rep. 651; 143 N. Y. 660; Eysaman v. Nelson, 79 Misc. Rep. 304; 165 App. Div. 950; Dobson v. Pearce, 12 N. Y. 156.) The appraisal proceeding continues until an award has been made by the appraisers themselves or by one appraiser and an umpire selected by the appraisers. (N. Y. Mut. Sav. Assn. v. Manchester Assur. Co., 94 App. Div. 104.)
   O’Brien, J.

A building in Amsterdam owned by respondent Morris Yoscovitz and insured by these six appellants was damaged by fire. The policies provided that, in the event of disagreement between the parties relating to the amount of the loss, such amount should be ascertained by appraisers, one to be selected by the insured and the other by the insurer, and by an umpire to be chosen by the appraisers. The insured, acting through his attorney in fact, and the insurers, acting through their adjuster, entered into a written agreement whereby they designated George Wilson and A. J. Benoit as appraisers. These two appraisers executed a document by which they certified over their signatures that they selected Benjamin Reiner as umpire. This instrument is regular on its face. Thereafter on various occasions both appraisers met with Reiner and discussed and considered the extent of the loss, and on October 28, 1932, Benoit as appraiser and Reiner as umpire made an award of $19,494.

After the award had been made, the insured on affidavits petitioned the County Judge under section 121, subdivision 10, of the Insurance Law (Cons. Laws, ch. 28), for the appointment of an umpire. The petition was granted and another umpire was appointed by the court. Its jurisdiction under section 121, subdivision 10, is limited to a case where the appraisers have failed or neglected to select one.

Fraud is the theory upon which the petitioner succeeded in overcoming the conceded fact that by a written instrument the appraisers had certified to the previous selection of an umpire by them. The issue of fraud was tried by affidavit. Wilson admits in his deposition that in fact he did sign the paper entitled selection of umpire,” explains the circumstances but asserts that he had no opportunity to protest the selection and that he never ratified nor acquiesced in Reiner’s appointment nor in his continuation as umpire. His deposition is to the effect that after he and Benoit had executed the document in blank, Benoit informed him that Reiner would give the insured a good loss on his property and then proceeded in Wilson’s presence to insert Reiner’s name as umpire. Wilson fails to express any reason for the absence of a protest by himself at that time and does not deny the statements in Benoit’s and Reiner’s affidavits that Reiner, in his presence, qualified as umpire before a notary public and that on several occasions he met with Reiner and Benoit and discussed and considered the loss. In the absence of some adequate explanation, these omissions render his position vulnerable on the question of fraud.

Even if a suspicion of the practice of fraud is to be deemed permissible, the remedy so far pursued is not the proper one. No attempt is made to dispute the fact of Reiner’s appointment. Whether the circumstances surrounding it could ultimately be considered fraudulent after examination and cross-examination of witnesses in person may be determined in an appropriate action to set aside the award. (Bradshaw v. Agricultural Ins. Co., 137 N. Y. 137.) Section 121, subdivision 10, of the Insurance Law is not intended to confer jurisdiction to try such an issue on conflicting affidavits. Granted the fact of the selection of an umpire by the appraisers, the County Court, so long as the award stood, was without jurisdiction to appoint another.

The order of the Appellate Division and that of the County Court should be reversed and motion for appointment of umpire denied., with costs in all courts.

Pound, Ch. J., Grane, Lehman, Kellogg, Hubbs and Ceouch, JJ., concur.

Ordered accordingly.


author: Hubbs, J.

text:
    The People of the State of New York, Respondent, v. Paul Orzel, Appellant.

      (Argued December 4, 1933;
    decided January 9, 1934.)

      Thomas F. Franklin and Matthew J. Horan for appellant.
    It was error for the court to deny the motion for a mistrial, after the district attorney had brought out that after the grand jury investigated the whole thing, the only one against whom it returned an indictment was the defendant. (People v. Fielding, 158 N. Y. 542; People v. Smith, 162 N. Y. 520; People v. Wolf, 183 N. Y. 464; People v. Manganaro, 218 N. Y. 9; People v. Pay, 36 App. Div. 389; People v. Milks, 55 App. Div. 372; People v. Teiper, 186 App. Div. 830; People v. Latta, 231 App. Div. 7.) The defendant was not accorded a fair trial. (Cohen v. Goodman & Sons, Inc., 189 App. Div. 209; Greenberg v. Schlanger, 229 N. Y. 120; People v. Polstein, 184 App. Div. 260; 226 N. Y. 593; People v. Freeman, 203 N. Y. 267; People v. Arvidson, 229 App. Div. 731; People v. Manganaro, 218 N. Y. 9.)

      Samuel J. Foley, District Attorney (.Martin M. Frank and Herman J. Fliederblum of counsel), for respondent.
    The defendant received a fair trial. (People v. Pallister, 138 N. Y. 601; People v. Tobin, 176 N. Y. 278; People v. Huson, 187 N. Y. 97; People v. Irving, 95 N. Y. 541; People v. Noelke, 94 N. Y. 137.)
   Hubbs, J.

Defendant was indicted, tried and convicted of manslaughter in the second degree, in violation of subdivision 3 of section 1052 of the Penal Law. The indictment charged that by an act of culpable negligence he caused the death of Walter Adams. The specific act charged was that in designing and drawing the plans for a steel substructure of a coal pocket, he drew such plans, details and designs in a culpably negligent manner, and that by reason thereof the structure erected pursuant to such plans collapsed because of defects in the plans and caused the death of Walter Adams.

The issue presented was closely contested. Some of the members of this court are of the opinion that the People’s evidence failed to establish that the defendant had been guilty of culpable negligence and that the trial court should have dismissed the indictment.

We are all in agreement that the case against the defendant was so doubtful that any material error at the trial which resulted in material. prejudice to the defendant should entitle him to a reversal and a new trial. There is no doubt that such error occurred. In fact, if the jury had understood and followed literally the last words of the court’s charge, it would have necessarily found the defendant not guilty. The last request to charge made by defendant’s counsel was, “ I ask the Court to charge that if from the evidence the jury finds that the construction and erection of the building and the construction and erection of the steel under structure which it is alleged the defendant designed, if the evidence shows that the construction and erection •syas not in accordance with that plan or design, then they should bring in a verdict of acquittal. The Court: I so charge.”

Concededly, the structure was not erected in accordance with the plans and designs prepared by the defendant. In this court, it is admitted by the District Attorney that the contractor, in erecting the structure, intentionally failed to place therein certain braces, tie rods and bolts, and in other respects failed to follow the plans prepared by defendant.

Frank J. McNulty was the president of the corporation which owned and was constructing the coal pocket. Christ Nilsen was the building contractor and Nathan Goldstone was an officer of the steel corporation which had the contract with Nilsen to furnish the steel for the erection of the structure.

McNulty acted as general manager of the corporation which owned the structure being erected. Nilsen, the building contractor, was in personal charge of the construction work, and Goldstone personally represented the corporation furnishing the steel in all matters connected, with the drawing of the plans and the fabrication and delivery of the steel. Each was called as a witness against the defendant. During the redirect examination of Goldstone by the Assistant District Attorney, he was permitted to testify that he, the witness, the defendant Orzel, Nilsen and McNulty appeared before the grand jury, and that the grand jury investigated the whole matter. The witness was then asked:

“ Q. Insofar as you know, after the Grand Jury investigated the whole thing, the only one against whom it returned an indictment for manslaughter was this defendant, is that correct? A. I think so.”

The counsel for defendant objected to the line of questioning, but his objection was overruled. He then moved to strike out the answer. The motion was denied, with an exception. That the ruling was highly prejudicial to the defendant and presents serious error cannot be doubted. In fact, the only justification offered for the ruling is that the defendant by the cross-examination of the witness had opened the door for such examination. To that we cannot agree. It was seriously urged at the trial by the defendant that if any one had been guilty of culpable negligence, it was not the defendant, but was one or more of the three witnesses named.

Such contention was not without some justification. Surely the witness was not competent to testify as to what took place in the grand jury room. The effect of the evidence was to convey to the jury the inference that the grand jury had investigated the conduct of the three witnesses named and had determined that each was free from fault and that the defendant was the only person criminally responsible for the tragedy.

Various other alleged errors have been called to our attention. We do not deem it necessary to discuss them as we feel that in a doubtful case like this we should not overlook the error already set forth.

The judgments should be reversed and a new trial ordered.

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

Judgments reversed, etc.


author: Pound, Ch. J.

text:
    Sadie Ruckenstein, Respondent, v. Metropolitan Life Insurance Company, Appellant.

      (Argued December 6, 1933;
    decided January 9, 1934.)

      Dean Potter for appellant.
    The policy was not surrendered within the grace period, nor was anything done which harmed plaintiff’s rights. The $20,000 policy lapsed for non-payment of the premium due. The insured’s application made within the grace period preserved $5,000 of insurance for plaintiff’s benefit. (Rowe v. Brooklyn Life Ins. Co., 11 App. Div. 532; 162 N. Y. 604; Frank v. Mutual Life Ins. Co., 102 N. Y. 266; Schneider v. U. S. Life Ins. Co., 123 N. Y. 109; Leonhard v. Providence Sav. Life Assur. Soc., 130 Fed. Rep. 287.)

      J. Emanuel Ankus for respondent.
    Plaintiff is entitled to recover on the $20,000 policy. (Whitehead v. N. Y. Life Ins. Co., 102 ,N. Y. 143; Garner v. Germania Life Ins.

      Co., 110 N. Y. 266; Stilwell v. Mutual Life Ins. Co., 72 N. Y. 385; Frick v. Lewellyn, 298 Fed. Rep. 803; Anderson v. Northwestern Mut. Life Ins. Co., 261 N. Y. 450; Chatham Phenix Nat. Bank v. Crosney, 251 N. Y. 189; Grems v. Traver, 87 Misc. Rep. 644; Matter of Hayes, 224 App. Div. 634; Howard v. Hancock Mut. Life Ins. Co., 111 Misc. Rep. 442.)
   Pound, Ch. J.

Plaintiff sues to recover $20,000, the face value of a policy issued on the life of her husband in which she was named as irrevocable beneficiary.

The facts are conceded. Plaintiff’s deceased husband, Max Ruckenstein, was insured by defendant on February 14,1929, for $20,000 by life insurance policy No. 5668378A. Plaintiff was named as beneficiary and the insured did not reserve the right to change the beneficiary. Two full years’ premiums were paid and loans were made to the limit of the paid-up value. The beneficiary consented to these loans. The third premium was due February 14, 1931. The days of grace expired March 17, 1931. On March 14, 1931, the insured and defendant entered into an arrangement whereby defendant agreed to accept surrender of the $20,000 policy and to issue in its place a new policy under the same policy number for $5,000. The insured at the same time gave a check for $44.65, the amount of the quarterly premium on the $5,000 policy, delivered up the original policy to the defendant and signed an application for the change. The new policy was not to go into effect unless delivered during the good health of the insured. Plaintiff did not consent to the change, cancellation or reduction of the policy and so far as the record shows was in ignorance of the proposed transaction. On April 12, 1931, the defendant tendered the new policy and asked plaintiff to sign a consent to the reduction. The insured had died two days before. The beneficiary refused to recognize the change and demanded the face value of the original policy less any proper deductions.

The trial court gave judgment to the plaintiff for $5,000 pursuant to defendant’s offer but refused to permit a recovery for $20,000. The Appellate Division invoked the rule that if a beneficiary has a vested interest in the contract of insurance, the insured cannot surrender the-policy so as to defeat the rights of the beneficiary thereunder, without her consent (Whitehead v. New York Life Ins. Co., 102 N. Y. 143; Chatham Phenix Nat. Bank & Trust Co. v. Crosney, 251 N. Y. 189; Anderson v. Northwestern Mut. Life Ins. Co., 261 N. Y. 450), reversed the judgment of the trial court and granted judgment for the amount claimed on the $20,000 policy. In so doing the court held that the old policy remained a binding obligation, in the absence of plaintiff’s consent to the change. Since the wife was the owner of the policy, her interest therein could not be divested without her consent so long as the policy remained a valid policy.

The husband was the agent for the wife for the purpose of receiving notices of premiums falling due and notice to him was equal to a demand on her, at least no other' demand on her was necessary. The notice to the husband, was equivalent to a demand of the premium from her. She, therefore, was chargeable with notice that the policy would lapse if the premium was not paid. If the premium is not paid no recovery can be had on the policy. It cannot be said that default in this case was brought about by any wrongful act of the insurance company- but for-which a lapse might not have occurred. Had that been the case, the result might be different. Fraud or lack of authority to surrender is at times properly invoked when the company is aware of the attempt to cut off the rights of the beneficiary-owner. It cannot then claim a lapse for non-payment of premiums. This policy was not surrendered during the grace period nor was anything done which harmed plaintiff’s rights. The insured entered into negotiations to reduce the insurance to $5,000 and paid a quarter’s premium on the reduced amount. This was not a surrender of the old policy. It was a mere application to change it. If the premium on the $20,000 were not paid, the policy would lapse. If it had been paid, it would have remained in force. The insurance company gave up no rights. It waived none. It never deceived the beneficiary into the belief that the premium need not be paid, even though the surrender should not take place until after the lapse date had passed.

The court below held that the time to pay was extended until the attempted change was brought to the notice of the beneficiary. This does not follow from the rule that the owner must consent to the surrender. Her consent was necessary to effectuate the change of a policy in force when the change was made. The husband was under no obligation to his wife to pay the premium. He might let the policy lapse.

If negotiations begun but not completed for a change in the amount of the insurance are sufficient to prevent the policy from lapsing while the negotiations are pending, the insurance company enters upon such negotiations at its own risk. Cases where the insurance company accepted a surrender when the policy was in force, without the consent of the beneficiary, have no binding, application here. The wife must perform all the essential conditions on her part to keep the policy alive. (Frank v. Mutual Life Ins. Ca., 102 N. Y. 266; Schneider v. U. S. Life Ins. Co., 123 N. Y. 109; Leonhard v. Provident Sav. Life Assur. Soc., 130 Fed. Rep. 287.)

In this case both husband and insurance company were acting in good faith to save something for the plaintiff. Meantime the policy was- allowed to lapse. Whatever plaintiff might have done-, she: is- now suing on a lapsed policy and she: cannot recover. A new policy was taken' out and recovery has been allowed on- that policy.

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, Lehman, Kellogg, O’Brien, Hubbs and Crouch, JJ.„ concur.

Judgment accordingly.


text:
    In the Matter of Staten Island Edison Corporation, Appellant, against Public Service Commission of the State of New York et al., Respondents.
    (Argued December 5, 1933;
    decided January 9, 1934.)

      Nathan L. Miller, Edward C. Bailly, Edward J. Bennett, George M. Le Pine and E. B. Naylon for appellant.
    The Commission must consent to the long-term refunding of an obligation maturing within one year, which is not reasonably chargeable to operating expense or income, and for the payment of which no funds are available. The Commission’s views- concerning the wisdom of incurring the debt or the need for capital goods purchased with the proceeds are wholly immaterial. (Cons. Laws, ch. 48, § 69; Caskie v. International Ry. Co., 261 N. Y. 47; Christensen v. Eno, 106 N. Y. 97; People ex rel. D. & H. Co. v. Stevens, 197 N. Y. 1; People ex rel. Binghamton L., H. & P. Co. v. Stevens, 203 N. Y. 7; People ex rel. Dry Dock R. R. Co. v. Public Service Comm., 167 App. Div. 286.)

      Charles G. Blakeslee, John T. Ryan and John J. Donohue for respondents.
    The petitioner presented no evidence to justify the Commission in authorizing the issuance of the bonds. (People ex rel. D. & H. Co. v. Stevens, 197 N. Y. 1; People ex rel. Studebaker Corp. v. Gilchrist, 244 N. Y. 114; Halsted v. Globe Indemnity Co., 258 N. Y. 176; Globe Woolen Co. v. Utica G. & E. Co., 224 N. Y. 483; Cumberland Coal Co. v. Sherman, 30 Barb. 553; Nesbit v. Lockman, 34 N. Y. 167; Whitehead v. Kennedy, 69 N. Y. 462; Cowee v. Cornell, 75 N. Y. 91; Fisher v. Bishop, 108 N. Y. 25; Ten Eyck v. Whitbeck, 156 N. Y. 341; Butler v. Prentiss, 158 N. Y. 49; Heckscher v. Edenborn, 203 N. Y. 210; Chicago, M. & St. P. Ry. Co. v. Minn. Civic Assn., 247 U. S. 490; Procter & Gamble Co. v. Newton, 289 Fed. Rep. 1013.) The refusal of the Public Service Commission to permit petitioner to issue bonds for the purpose of refunding the expenditures made by it was proper and in accordance with the statute. (People ex rel. D. &

      H. Co. v. Stevens, 134 App. Div. 99; 197 N. Y. 1; People ex rel. New York Edison Co. v. Willcox, 207 N. Y. 86; People v. N. Y. C. & H. R. R. R. Co., 138 App. Div. 601; 199 N. Y. 539.) The Public Service Commission may withhold its consent to the refunding of expenditures which are not in the nature of permanent utility capital. (People ex rel. Binghamton L., H. & P. Co. v. Stevens, 203 N. Y. 7; People ex rel. Dry Dock R. R. Co. v. Public Service Comm., 167 App. Div. 286; Consolidated Gas Co. v. Newton, 267 Fed. Rep. 231; 258 U. S. 165.)
   Crane, J.

The Staten Island Edison Corporation was organized under the Transportation Corporations Law (Cons. Laws, ch. 63) of the State of New York and is engaged in the business of producing and selling to the public electricity for light, heat and power. It is a member of the Associated Gas and Electric System, all of its stock being owned within the system.

On June 16,1931, the Staten Island Edison Corporation issued and sold $7,500,000 of three per cent gold notes to mature June 15, 1932. Out of the moneys realized, $2,100,000 was used to reduce what the appellant has termed, open account indebtedness.” The balance of the proceeds, $5,321,593.75, was temporarily invested in Associated Electric Company four and one-half per cent bonds, due 1956. These bonds were purchased from the Associated Gas and Electric Company, which owned and controlled both Staten Island Edison Corporation and the Associated Electric Company. These latter two companies were a part of the system of interlocking corporations. The Associated Electric Company is a Delaware corporation, and its bonds purchased were debenture bonds.

On or about the maturity of the notes, June 15, 1932, they were refunded with a 364-day first mortgage bond issue in the amount of $7,424,000. These were issued under the terms of a pre-existing mortgage. As the due date approached, these bonds, like the notes, had to be met, and it is the method proposed by the Staten Island Edison Corporation of redeeming these bonds that has given rise to this litigation with the Public Service Commission. During the process of this financing certain applications were made to the Commission for leave to meet these bonds by a long-term issue. The petition of the company was from time to time amended to meet the changing conditions, but we may treat the orders of the Public Service Commission as one, as they all have the same effect and are to the same point. The applicant, the Staten Island Edison Corporation, desired to raise the money by a long-term issue of bonds to pay the so-called open account and the one-year bonds which had been issued to meet the one-year notes.

The Public Service Commission denied the application as not coming, in its judgment, within section 69 of the Public Service Law (Cons. Laws, ch. 48), and it is from the affirmance by the Appellate Division that the appeal is taken to this court. The main issue between the contending parties is the power of the Public Service Commission to inquire into the nature and necessity of. the one-year indebtedness, whether notes or bonds. As the proceeds of the $7,500,000 sale of notes were used to pay alleged current open accounts and to buy debenture bonds of petitioner’s affiliate, the Commission has taken the position it had the right to inquire as to the necessity for the sale of these notes and the nature of the open account, whether capital or income expenditure; while on the other side, the Staten Island Edison Corporation takes the position that the Commission has no such power; that the so-called open account being a genuine indebtedness for borrowed money, and the Associated Electric Company bonds being a legitimate purchase, the Commission must stop here and go no further; — it has no discretion to refuse consent to the issue of long-term bonds and the sale of them to the public. The principal point naturally centers about the purchase of the bonds of the Associated Electric Company. We take it from the argument of counsel and from the briefs that it is not questioned, even if not conceded, that to buy bonds of an affiliated Delaware company was not such a utility purpose as would compel the consent of the Public Service Commission to the raising of money for that purpose by the sale of long-term Staten Island Edison Corporation bonds. To meet this situation, therefore, the appellant very frankly has taken the position that under the Public Service Law the Commission in this instance exceeded its power in demanding the nature of the prior indebtedness.

The provisions of section 69 of this law are not as clear and concise as they might be, and by strict interpretation, lend themselves to the forceful argument presented by appellant’s counsel. Consideration, however, of the purposes of the law, the objects to be conserved, and the wide gap which would be left for evasion if the appellant’s view were adopted, leads us to give to this section a more liberal interpretation. The following is the wording of section 69, so far as applicable: “A gas corporation or electric corporation * * * may issue stocks, bonds, notes or other evidences of indebtedness payable at periods of more than twelve months after the date thereof, * * * when necessary for the acquisition of property, the construction, completion, extension or improvement of its plant or distributing system, or for the improvement or maintenance of its service or for the discharge or lawful refunding of its obligations,” etc. The emphasis is placed by the appellant upon these last words, “ for the discharge or lawful refunding of its obligations.” To repeat, in order to make clear the argument, the appellant says these one-year notes or bonds were obligations of the company (and most surely they were), therefore, this section 69 gives the electric corporation the right to issue long term bonds to refund them.

The section, however, does not stop here, and we go on with the proviso,— the company may issue these more than twelve months’ bonds, provided the Public Service Commission authorizes it by order. This is the wording: “ * * * Provided and not otherwise that there shall have been secured from the commission an order authorizing such issue, and the amount thereof, and stating the purposes to which the issue or proceeds thereof are to be applied, and that, in the opinion of the commission, the money, property or labor to be procured or paid for by the issue of such stock, bonds, notes or other evidences of indebtedness is or has been reasonably required for the purposes specified in the order, and that except as otherwise permitted in the order in the case of bonds, notes and other evidences of indebtedness, such purposes are not in whole or in part reasonably -chargeable to operating expenses or to income.”

We start with the fact that the appellant is an electric light company, and, by its charter, organized for the purpose of furnishing electricity, for various purposes, to the people of Staten Island. Its capital must be used in the business. It cannot be used for speculation or private purposes. The directors are personally liable if they squander it. Money borrowed has the same limitations. It goes without saying that, if money borrowed by the company on one-year notes or bonds has not been used for corporate purposes, section 69, just quoted, gives no right to the company or the Public Service Commission to refund the debt by a'long term issue. This corporation could have borrowed money for the acquisition of property, the construction, completion, extension or improvement of its plant or distributing system, or for the improvement or maintenance of its service or for the discharge or lawful refunding of its obligations;” which obligations must have been for the purposes just previously enumerated. Therefore, the proceeds of the notes issued by the appellant must have been used within the meaning and purpose of this section — for utility purposes — as defined by the charter of the company and as enumerated in the above quotation. Borrowing money to buy bonds of an affiliate Delaware corporation is not one of these enumerated purposes. We by no means say that the company could not invest its money or its capital in bonds of its choosing, but we do say that when it desires to refund its debts or obligations, the Public Service Commission has the power to inquire into the purpose for which the obligation was created and-to determine whether or not it was for the acquisition of property or the improvement of the plant or distributing system, as above enumerated. Issuing bonds to raise money to buy other bonds is not necessarily an obligation within the meaning of this section. Now it is true that the principal received by a sale of bonds, or long term bonds, not being available for immediate use in plant construction or improvements, may have to be invested temporarily and until needed in securities of various kinds. There is nothing illegal or improper in this. Such an investment would not as matter of law indicate that the money raised was not to be used for the purposes stated in section 69.

We have not such a case here, however. We are dealing with the question of power in the Commission and not with the question of fact. The Public Service Commission had the power to find out what the $7,500,000 was raised for, and whether it was for the purposes of the company’s local business or for some ulterior purpose. We need not review the evidence regarding the price at which bonds of the Associated Electric Company were purchased or the purposes alleged for the purchase. We are asked simply to decide that section 69 gives the Commission no power to investigate beyond ascertaining the validity of the previous obligation. Given the power, the Commission did not, in our judgment, arbitrarily exercise it.

The proviso, as we have above given it, requires the Commission to find that the money, property or labor to be procured or paid for by the issue of bonds is, or has been, reasonably required for the purposes specified in the order. This is indeed clumsy phraseology. As in this case, the debt to be refunded consisted of yearly notes or bonds. The words of this proviso, applicable, read as follows: “ In the opinion of the commission, the money, * * * to be procured or paid for by the issue of * * * bonds * * * is, or has been, reasonably required for the purposes specified in the order.” As before stated, we think this section has but one meaning. The purposes for which money raised must be used, whether in the first instance, or, on refunding, are those specified as above given in section 69. The purposes which the Commission must specify in its order are these purposes,' and the money which is to be repaid, or, as this proviso has it, paid for,” must have been reasonably required for such purposes. If that were not so what would we have? The counsel for the appellant fairly states that by his interpretation there is a gap in this law not filled by legislation. Certainly this could not have been the intention of the Legislature, as the gap would furnish the opportunity for undoing all that it had done in enacting the Public Service Law. The latter part of section 69 reads as follows: Such gas corporation or electric corporation may issue notes, for proper corporate purposes and not in violation of any provision of this or of any other act, payable at periods of not more than twelve months without such consent; but no such notes shall, in whole or in part, directly or indirectly be' refunded by any issue of stock or bonds or by any evidences of indebtedness running for more than twelve months without the consent of the commission.”

Even these short term notes, to be valid, must have been issued for corporate purposes, but something more was required to check the financing of these corporations than private lawsuits to test the validity of note issues. The public was to be protected in the first instance in the sale of long term bonds. If the Commission were bound, without inquiry, to consent to the refunding of the yearly note or bond, issued under this last provision of section 69, there might never arise any inquiry as to the proper use of the money so raised by the uncontrolled action of corporate officials. The corporation has a free hand in issuing its one-year note or bonds for what it considers corporate purposes. When it comes to refunding, the Public Service Commission steps in and must form its own opinion as to the necessity for this action. The sale must have been reasonably necessary and for a public utility purpose. We feel that in reading section 69 as a whole, this is the intent which the Legislature had in mind, and which it has expressed, although perhaps in a terse and perplexing manner.

As to the $2,100,000 which is said to have been the payment of an open account, we have this objection raised by the Commission: Preferred stock had been sold by the appellant, and it was claimed upon the hearing that the money had been used for new construction — a capital investment. When the notes were sold, $2,100,000 was used to redeem or repurchase the preferred stock. The method of creating the indebtedness is immaterial. The question is, what was the money used for,— a capital investment? Section 69 indicates that the applicant must keep its accounts and vouchers of expenditures in such manner as to enable the Commission to ascertain the purposes for which expenditures were made. The appellant, upon a hearing of this case, produced no such vouchers or accounts. Outside of generalizations, no satisfactory evidence was given as to the use of the $2,100,000. The furthest the witnesses would go was to say that it was a proper inference that the $2,100,000 was traceable to the construction account. The company’s accountant, Mr. Fleck, said: “It is the result of transactions between affiliated companies running over a long period of. time so that the balance in the open account at any time is the net result of all the transactions between those companies. The examination of the balance sheet would indicate, however, that the increases in fixed capital have been in excess of any amounts paid in through the sale of securities. It is a proper inference to make that that $2,100,000 odd could substantially, if you could trace dollars, be traced into the fixed capital account of the Company. It is rather involved. For example, on Exhibit 25 you will notice that there was over $3,000,000 proceeds realized from the sale of those $6 preferred stock. Now, all that $3,097,500 were used for new construction. At the time that stock was called in April, 1929, affiliated companies advanced the money with which to call that stock. Now, that $3,000,000 plus advance was really the backbone of the balance in that open account for the last several years. That is the largest single item in the open account. So that I say it is a proper inference to say that the $2,100,000 was, if you could trace dollars, traceable to the construction account.”

We cannot find that the Commission acted arbitrarily in failing to give its consent to the refunding of this portion of the debt. The cases which have been cited need not be reviewed. We consider them in harmony with the ruling which is here made, while the statement of the purposes for the Public Service Law and the Commission is here applied and followed. (People ex rel. D. & H. Co. v. Stevens, 197 N. Y. 1; People ex rel. Binghamton L., H. & P. Co. v. Stevens, 203 N. Y. 7; People ex rel. New York Edison Co. v. Willcox, 207 N. Y. 86; People v. N. Y. C. & H. R. R. R. Co., 138 App. Div. 601; affd., 199 N. Y. 539; People ex rel. Dry Dock, etc., R. R. Co. v. Pub. Serv. Comm., 167 App. Div. 286.)

The orders appealed from should be affirmed, with costs.

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

Orders affirmed.


author: Htjbbs, J.

text:
    In the Matter of the Estate of Ellen Hayes, Deceased. Arthur G. Hays et al., Appellants; Oliver W. Hayes et al., Respondents.

      (Argued December 14, 1933;
    decided January 9, 1934.)

      Arthur Garfield Hays and Alan S. Hays for appellants.
    In construing a will the intention of the testator is controlling. (Matter of Rooker, 248 N. Y. 361; Matter of Silsby, 229 N. Y. 396; Matter of Buechner, 226 N. Y. 440; Matter of Pulis, 220 N. Y. 196; Matter of Buckley, 135 Misc. Rep. 156; Matter of Anderson, 143 Misc. Rep. 250.) The court will strive to make a construction that will support the will, and to avoid a construction which will create an intestacy.' (Matter of Gallien, 247 N. Y. 195; Matter of Buckley, 135 Misc. Rep. 156.) Under paragraph V (d) there is a bequest of any remainder to appellant. The bequest is absolute and covers the entire remainder of the estate. (Bird v. Merklee, 144 N. Y. 544; Matter of Abbe, 138 Misc. Rep. 210; Matter of Judge, 141 Misc. Rep. 254; Webster v. Gleizes, 251 N. Y. 554; Tillman v. Ogren, 227 N. Y. 495; Matter of Steiner, 134 App. Div. 162; Matter of Hoyt, 142 Misc. Rep. 344; Matter of Bell, 141 Misc. Rep. 720; Crawford v. McCarthy, 159 N. Y. 514; Matter of Tollman, 131 Misc. Rep. 863.)

      G. D. B. Hasbrouck, as special guardian for Oliver W. Hayes et al., respondents.
    The language of the will clearly discloses that the testatrix intended to create a trust. (Holland v. Alcock, 108 N. Y. 312; Matter of Graves, 171 N. Y. 40; People v. N. Y. C. R. R. Co., 34 Barb. 123.)

      Kenneth S. MacAffer for Stanley W. Hayes, as executor of Ellen Hayes, deceased, respondent.
    The testatrix in paragraph V (d) of the will endeavored to create an invalid trust. (Matter of Catlin, 97 Misc. Rep. 223; 179 App. Div. 926; Reynolds v. Reynolds, 224 N. Y. 429; Holland v. Alcock, 108 N. Y. 312; Read v. Williams, 125 N. Y. 560; Tilden v. Green, 130 N. Y. 29; Matter of Cunningham, 206 N. Y. 601; Matter of Shattuck, 193 N. Y. 446; Matter of Kelley, 138 Misc. Rep. 190; Matter of Fraesch, 245 N. Y. 174.)
   Htjbbs, J.

Ellen Hayes, a spinster, evidently of advanced years, died on October 27, 1930. Three days before her death she dictated a last will and testament to Louise Seymour Brown, who was a beneficiary under the will.

It is evident that testatrix was highly educated but that she lacked familiarity with the precise meaning of legal terms. The opinion of the learned Surrogate and briefs of counsel deal at length with assumed interests and activities of deceased, intended to explain the purpose of the distribution of her property, and of certain requests made in her will. These matters are entirely apart from the record before us and may not be considered.

The Surrogate decided that the appellant Hays took under the will an absolute beneficial estate in all of the remainder not specifically devised or bequeathed. The Appellate Division reversed, made new findings and decided that the attempted devise and bequest to Hays referred only to the balance remaining in the fund referred to in subdivision (a) paragraph Y of the will hereafter quoted and that subdivision (d) of that paragraph attempted to set up a trust which was void and, therefore, that the testatrix died intestate as to the balance of such fund and also as to certain other bank balances not mentioned in the will. Paragraph V reads as follows: " V. (a) From the fund above mentioned in charge of the Boston Safe Deposit and Trust Company, I desire my executor, Stanley Wolcott Hayes, to administer two thousand dollars ($2,000) to each of my sisters, Anna Hayes Hollister and Mariquita Hayes Wallace in payments of two hundred dollars ($200) each per annum per person.

"(b) One thousand dollars ($1,000) outright payment to the Free Press Association, Ltd., 628 Johnson’s Court, Fleet Street, London. This to be paid in one flat sum to the treasurer of the F. P. A.

"(c) One thousand dollars ($1,000) to the Free-thought Press Association, 250 West 54th Street, New York.

"(d) Any remainder after these bequests have been made, I leave to Arthur Garfield Hays to use at his discretion in promoting the ends of justice.”

The first question for determination is what the testatrix intended to convey to Hays by subdivision (d) of paragraph V. The second is whether subdivision (d) constituted an absolute gift of the property intended to be conveyed or was it an attempt to create a trust which is void.

In deciding those questions, our primary purpose must be to ascertain from the will the intent of the testatrix. Adjudicated cases are of little assistance. Each will is a law unto itself.

It is apparent from the reading of the will that testatrix was what is known as a radical, a liberal or free thinker, and she is so referred to in the briefs of counsel. In her will she left to a physician at a State hospital full charge of her brain and body; one thousand dollars to the Free Press Association, Ltd., of London; one thousand dollars to the Freethought Press Association of New York, and she willed upon certain conditions the income of a fund to the Vineyard Shore School for Women Workers in Industry, also certain real property and provided that no man should occupy for residence any domestic building upon the property. She stated in the will that she did not wish any funeral services, music or flowers, but that she would like it “if the students will sing one stanza of the International,” and she directed that she should be buried in “the cheapest and plainest wooden box.”

Her nearest surviving relatives were a brother and asters. To her relatives she willed only a small portion of her estate. It is apparent that they were not thfc. special objects of her bounty.

The intended trust as found by the Appellate Division includes only the amount on deposit as represented by bank books found in the safe deposit box of the Boston Safe Deposit and Trust Company. It was so limited by treating the clause marked (d) in the will as referring only to the fund mentioned in the clause marked V (a).

The question presented is whether in the mechanical process of paragraphing and numbering the paragraphs of the will, there is evidenced an intent on the part of the testatrix to limit the effect of clause (d) to the fund mentioned in V (a). The holding that such an intent is evidenced by the numbering and designation of the paragraphs of the will is to assume an intent on the part of the testatrix to leave a large portion of her estate undisposed of by the will.

In this connection, it should be noted that she requested her executor, who is not the beneficiary named under clause (d), “ to faithfully administer this my estate according to my obvious wishes. ’ ’ Nothing makes obvious her wishes beyond the expressed terms of the will. In the construction of the will we are confronted by the question which of two canons of interpretation should be applied, namely, whether that construction should be given to the will which avoids intestacy as to any part of her estate or as to whether that construction shall be given which avoids the exclusion of testatrix’s next of kin from participation in the estate.

As to the competency of testatrix, no question is raised. That she was an educated, intelligent woman, with a clear conception of the nature of her property and of the relationship to her of certain of her next of kin is evident from the will. She did dispose of a portion of her estate by gifts to next of kin. Is it to be presumed that she did not appreciate that there were others who were of her next of kin, or realizing that there were such others, that she purposely left a portion of her estate undisposed of that next of kin generally, including those specifically named, should share in such residue?

The fact that she made bequests to certain next of kin indicates that such provision was all that she intended that they should receive of her estate. To permit them to share to a greater extent as next of kin in her estate would be contrary to her intent as expressed in the will, and would tend to defeat rather than further the ‘ obvious wishes ” of testatrix.

It requires no elimination of words to construe paragraph V (d) as intended to embrace her entire residuary estate. On the contrary, there must be read into the clause the words “ from the fund above mentioned in charge of the Boston Safe Deposit and Trust Company ” in order to assume an intent to limit the gift there provided to the remainder of a certain fund rather than to make it inclusive of the residue of her personal estate after satisfaction of the specific bequests. All real property not specifically devised was directed to be sold and added to her personal property.

The construction adopted by the Surrogate makes the will a complete instrument and avoids intestacy as to any part of the estate. It seems to us that was the intent of the testatrix. In that conclusion we are aided by the presumption that testatrix who had taken the trouble to make a will did not intend to dispose of only a small part of her estate and to die intestate as to a major part thereof. (Hadcox v. Cody, 213 N. Y. 570; Schult v. Moll, 132 N. Y. 122, 127.)

“ The idea of any one deliberately purposing to die testate as to a portion of his estate, and intestate as to another portion, is so unusual, in the history of testamentary dispositions, as to justify almost any construction to escape from it.” (2 Redfield on Wills [3d ed.], p. 235.)

We are not required to go to the extent suggested by the learned author. Many decisions by this court have stated the principle, in different language, that an interpretation that will result in intestacy as to any part of an estate is to be avoided if possible. (Meeks v. Meeks, 161 N. Y. 66, 70; Waterman v. N. Y. Life Ins. & Trust Co., 237 N. Y. 293, 300; Matter of Ossman v. Von Roemer, 221 N. Y. 381, 387.)

We are also of the opinion that the Surrogate was justified in deciding that testatrix did not intend by clause (d) of paragraph V to create a trust. Other provisions of the will demonstrate that she knew how to create a trust when she desired to do so. The clause in question begins with the words, “ any remainder after these bequests have been made, I leave to Arthur Garfield Hays.” If nothing further appeared, it would be clear that the bequest was intended to be absolute. (Campbell v. Beaumont, 91 N. Y. 464.)

To those words are appended the additional provision, “ to use at his discretion in promoting the ends of justice.” These words do not include the ordinary legal phraseology used to constitute a trust. If the words “ at his discretion ” were omitted, the words remaining might be intended to constitute a limitation upon the permitted use of the fund and might, therefore, indicate an intent to create a trust. With the words “at his discretion ” added, the question arises whether the discretion is to be applied in determining whether to use the funds in promoting the ends of justice (not disclosing an intent to create a trust) or whether the discretion is to be applied in determining what are the ends of justice (indicating an intent to create a trust). Had the latter limitation been intended, a much clearer expression would have been to use in promoting those things which he shall deem the ends of justice.”

While it is assumed by the parties that the words ends of justice ” refer to certain objects in which testatrix was interested and in which Hays was also interested, there is nothing in the record before us to indicate such intention or that there was in fact any common object in which testatrix and Hays were interested. We may not assume from this record that the ends of justice mean other than the generally accepted interpretation of those words.

No specific beneficiary of the so-called trust is named. In the absence of any named beneficiary and in the absence of any expression in the will or evidence in the record that testatrix and Hays were interested in a common object, we are constrained to hold that the intent of testatrix was that Hays should use the property if he desired or at his discretion in promoting the ends of justice and, therefore, that the clause used was not intended to create a trust.

Here we have words constituting an absolute gift followed by words in the same sentence which do not disclose a clear intention to cut it down. Under such circumstances, courts favor giving effect to the absolute gift. (Clarke v. Leupp, 88 N. Y. 228; 1 Perry on Trusts [6th ed.], p. 162, § 115.)

The question always is whether the maker of the will, by the language used, intended to impose an obligation on the legatee to carry out an expressed purpose or having expressed a wish intended to leave it to the legatee to act in accordance therewith or not in his discretion.

The principle was stated by Lord Cranworth in Williams v. Williams (1 Sim. [N. S.] 358) as follows: The real question always is whether the wish or desire, or recommendation that is expressed by the testator is meant to govern the conduct of the party to whom it is addressed, or whether it is merely an indication of that which he thinks would be a reasonable exercise of the discretion of the party, leaving it, however, to the party to exercise his own discretion.” (Foose v. Whitmore, 82 N. Y. 405.)

That testatrix intended to give Hays a wide discretion in the use of the funds is clear, and it seems to us that upon the record before us, we would be unjustified in giving to the words used a narrow rather than a broad construction. The broad construction avoids implying an attempt on the part of the testatrix to create a trust which, if intended, might be void for uncertainty of object and beneficiary. We believe it was the intention of the testatrix to leave the use of this property to the discretion of Hays, and that rather than intending to .limit him, she assumed that he would exercise that discretion for promoting the ends of justice as understood by him.

It is earnestly contended by respondents that the fact that the donee, if the gift be not held to have been intended as a trust, could disregard the wish of the testatrix and keep the gift as bis own, should lead the court to hold that a trust was intended.

The argument does not constitute a legal reason why the words should be held to have been used with the intent to create a trust. Testatrix was the absolute owner of the property: She could give it in any way she wished. If she was content to give it in reliance upon the discretion of the donee, she had a right to do so. The fact that she indicated that the legacy should be used at the discretion of the donee in promoting the ends of justice, does not indicate an intent to create a trust. (Bird v. Merklee, 144 N. Y. 544, 550.)

If there be doubt about the correctness of the construction which the Surrogate has given clause (d) and either construction contended for is reasonably possible, “ the one that will sustain the validity of the will is to be preferred.” (Matter of Gallien, 247 N. Y. 195, 200.)

Under the terms of this will, it seems to us that the intent to dispose of the entire remainder of the estate is evidenced by the clause V (d) and the request to the executor immediately preceding the testimonium clause and that the will should not be subjected to a rule of construction which results in partial intestacy. We hold that it was the intent of the testatrix that Hays should take the entire residuary estate subject to the moral obligation to use it to promote the ends of justice as understood by him. If we were permitted to consider the interests of testatrix during her lifetime as indicated in the opinion of the Surrogate and in the briefs of counsel, whatever might be our view as to the wisdom of those interests, strength would be given to our conclusion that it was the intent of testatrix to distribute her estate as indicated above rather than that partial intestacy was intended.

The order of the Appellate Division should be reversed and that of the Surrogate’s Court affirmed, with costs to all parties filing briefs, payable out of the estate.

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

Ordered accordingly.


text:
    The People of the State of New York, Respondent, v. Fiore Pignataro, Edward Grimaldi and Fiore Grimaldi, Appellants.
    (Argued November 27, 1933;
    decided January 9, 1934.)

      Harry G. Anderson, Samuel S. Leibowitz and Joseph H. Stein for Fiore Pignataro, appellant.
    It was reversible error for the trial court to charge the jury that the alleged statements of the defendant Pignataro were voluntary as a matter of law. (People v. Doran, 246 N. Y. 409; People v. Jackerson, 247 N. Y. 36; People v. Walker, 198 N. Y. 329; People v. Marendi, 213 N. Y. 600; People v. Todoro, 224 N. Y. 129; Commonwealth v. Guffee, 108 Mass. 285; Commonwealth v. Culver, 126 Mass. 464; Commonwealth v. Preece, 140 Mass. 276; DiCarlo v. United States, 6 Fed. Rep. [2d] 364; People v. Zigouras, 163 N. Y. 250; People v. White, 176 N. Y. 331; People v. Pantano, 239 N. Y. 416; People v. Barbato, 254 N. Y. 170; People v. Alex, 260 N. Y. 425.) There is no evidence from which the jury could properly find that the defendant Pignataro was connected with the person or persons who committed the crime, and the submission of that question to the jury was reversible error. (People v. McKane, 143 N. Y. 455; People v. Smith, 232 N. Y. 239; People v. Ledwon, 153 N. Y. 10; People v. Gluck, 188 N. Y. 167; People v. Snyder, 246 N. Y. 491.)

      Louis E. Drago, Milton E. Weintraub and William A. Bacher for Edward Grimaldi, appellant.
    The verdict was against the weight of credible evidence. (People v. Ledwon, 153 N. Y. 10; People v. Evans, 40 N. Y. 1; People v. White, 176 N. Y. 331; People v. Cashin, 259 N. Y. 434.) The court improperly admitted in evidence the declarations of Pagano in the station house. (People v. Rutigliano, 261 N. Y. 103; People v. Sobieskoda, 235 N. Y. 411; People v. Purtell, 243 N. Y. 273.) It was reversible error for the court to admit the testimony of Pagano as to the threat alleged to have been made by a brother of the defendant. (People v. Buzzi, 238 N. Y. 390; Hamel v. Brooklyn Heights R. R. Co., 59 App. Div. 135; McCoy v. Munro, 76 App. Div. 435; Averell v. Williams, 1 Dem. 501; Welsh v. Cochran, 63 N. Y. 181; Turpin v. Comm., 140 Ky. 294; Nader v. State, 86 Tex. Cr. App. 424; State v. Ward, 61 Vt. 153; Nalley v. State, 28 Tex. Cr. App. 389; Williams v. State, 10 Okla. Cr. Rep. 348.)

      David F. Price and Leo Healy for Fiore Grimaldi, appellant.
    The guilt of the defendant Fiore Grimaldi was not established beyond a reasonable doubt. (People v. Ledwon, 153 N. Y. 10; People v. Cashin, 259 N. Y. 434.) It was reversible error for the court to permit Pagano, to testify that he had been threatened by a person not shown to be in any way connected with appellant. (People v. Buzzi, 238 N. Y. 390; People v. Zackowitz, 254 N. Y. 192.) The court erred in permitting testimony that Pagano, when he was accused of receiving $900 to kill the deceased, stated that the Grimaldis were forcing Pignataro to make that statement. (People v. Rutigliano, 261 N. Y. 103; People v. Dolce, 261 N. Y. 108.)

      William F. X. Qeoghan, District Attorney (Henry J. Walsh of counsel), for respondent.
    The trial court committed no error in holding as a matter of law that Pignataro’s final statement to the district attorney was a voluntary confession. (People v. Sangamino, 258 N. Y. 85; People v. Barboto, 254 N. Y. 170; People v. Weiner, 248 N. Y. 118; People v. Meyer, 162 N. Y. 357; People v. Zigouras, 163 N. Y. 250.) The trial court committed no error in allowing in evidence Pagano’s charge that Pignataro in accusing him of having received money from Pignataro to kill his wife was inspired by the Grimaldis. (People v. Rodawald, 177 N. Y. 408.)
   O’Brien, J.

About nine o’clock in the night of October 10, 1932, at Twelfth avenue and Eighty-third street, Brooklyn, two unknown men were seen to run away from an abandoned car. In it the police discovered the dead body of Gemma Pignataro with twenty wounds inflicted by a knife. Fiore Pignataro, husband of the slain woman, Frank Zock, Michael Rybka, Edward Grimaldi and Fiore Grimaldi were tried for murder in the first degree. Zock and Rybka were acquitted but the others were convicted and their appeals are now here.

Joseph Pagano, brother of the owner of the car, appeared as the chief witness for the prosecution. The jury was instructed that it could find him to be an accomplice. Following a series of assertions, denials, contradictions and protestations of ignorance, he eventually testified that Zock, Rybka and the brothers Grimaldi participated in the homicide to an extent which would constitute all of them principals. He did not implicate Pignataro. His identification of Zock and Rybka, two Polish youths, was as positive as his designation of the Grimaldis, who are Italians. If his ultimate recital rested upon veracity, all four are guilty. He committed perjury of the most flagrant nature and admitted that fact. This is his version: Pignataro’s wife, whom Pagano’s family had known for fifteen years, was accustomed to visit the Pagano home to give treatment to a child who was ill. On the evening of October 10th Pagano called for her at her home, drove her in his brother’s car to his own house where she ministered to the child and about eight o’clock he started from Forty-second street, where he lived, to drive her to her home at Third avenue and Fifty-seventh street. On the return at Second avenue and Forty-sixth street, a car in which four men were seated crowded his car against the curb and two of them with pistols emerged and forced him out of his car into the other. These two men entered the vehicle which they had compelled him to vacate and with Mrs. Pignataro drove away. The other two men, threatening to kill him if he sounded an alarm, drove him to Second avenue and Fifty-eighth street where they let him out of the car. From that point he walked home where he arrived about eight-thirty o’clock and before nine o’clock went to bed. On his way home he met and spoke to Mrs. Pignataro’s young son but made no reference to the kidnapping and on his arrival at home told his wife nothing about it. The Pignataro boy testified that when Pagano spoke to him he was covered with blood and that he explained his condition by stating that there was something the matter with the car. The jury, however, was not bound to credit this testimony. When the police, accompanied by Pignataro, visited Pagano’s home before ten o’clock that night, Pagano, knowing the statement to be false, informed them that his brother’s automobile was in the garage. At the police station that night he stated that Mrs. Pignataro had gone home by trolley car and he detailed conflicting versions of her disappearance. At nine o’clock the next morning, admitting that he had told different stories and that after thinking over the matters he wanted to be truthful, he was examined by an assistant district attorney and the questions and answers were reported by a stenographer. When asked if he recognized any of the occupants of the car he replied that he did not know them by name but could identify them. He was certain that he did not know their names. All four appeared to him to be Italians and he thought that they might be acquainted with the Grimaldi brothers. He did not at that time say that the Grimaldis were among those in the car. Later at police headquarters he was shown some photographs and he then stated that he knew Fiore Grimaldi. At the same time he denied recognizing Edward, whereupon, so he testified, the police told him: “Well, you better know him when we get back to Brooklyn.” Before the grand jury he testified that Fiore Grimaldi and Rybka were the men who drove away with Mrs. Pignataro and that Edward Grimaldi and Zock were his captors who took him to Fifty-seventh street. At the trial the District Attorney, relying upon his testimony before the grand jury and bis statements to the police and the Assistant District Attorney, called him as his principal witness. On direct examination, in downright fashion he brazenly repudiated Ms former statements and testimony. He swore that he did not know who any of the four men were and demed that he ever knew or saw Zock, Rybka or Edward Grimaldi prior to their arrest and that he had ever told the police the names of these men. He admitted that he knew Fiore Grimaldi whom, as he testified, he had once met at Pignataro’s house, but demed that Fiore Grimaldi was one of the four men who had waylaid Mm and Mrs. Pignataro. He boldly proclaimed that Ms testimony before the grand jury was a lie. At the close of Ms testimony the court committed him as a material witness. Several days later he was recalled and testified positively that it was Fiore Grimaldi and Rybka who drove Mrs. Pignataro away, that the men who kidnapped him were Edward Grimaldi and Zock, that Ms testimony before the grand jury was true and Ms former evidence on the trial was perjury.

The evidence given by Pagano against the two Grimaldis was no stronger than Ms testimony against Zock and Rybka. Without Ms testimony none of the four could have properly been convicted. If Ms version is true, all four participated in the crime. He identified each with the same appearance of certainty but the jury accepted bis story that Fiore Grimaldi was present and acquitted Rybka. The verdict importing the jury’s belief in the presence of Edward Grimaldi and the absence of Zock is equally inconsistent. Such a verdict based upon the varying testimony of a confessed perjurer ought not to be allowed to stand. The correctness of the result is certainly not free from reasonable doubt. (People v. Ledwon, 153 N. Y. 10; People v. Munroe, 190 N. Y. 435; People v. Montesanto, 236 N. Y. 396.)

The jury may have decided that Pagano was an accomplice. The evidence could justify such a finding. Aside from Pagano’s testimony there was no evidence tending to connect Edward Grimaldi with the crime, unless the jury rejected the evidence produced by Edward relating to bis presence in another part of Brooklyn at the hour of the commission of the crime. He accounted satisfactorily for his association with a girl in Third street at nine-thirty o’clock or shortly thereafter and endeavored to prove that he was with her all the evening after seven-thirty, but the jury could have refused to give credence to the witnesses who sought to prove that fact. As in the case of Edward Grimaldi, Zock and Rybka, the defense of Fiore Grimaldi was an alibi. Strong evidence, which is not incredible on its face, was produced tending to show that at nine-fifteen o’clock on the night of the murder, Fiore Grimaldi was present in St. Edwards street at a club of which he was a member. Conceivably the two Grimaldis might have been enabled to reach these points respectively at nine-fifteen and nine-thirty o’clock after the time when Edward left Pagano at Fifty-seventh street, if he did, and the time when Fiore left the abandoned car, if he did, at Twelfth avenue and Eighty-third street, but a defendant is not obliged to prove the impossibility of the commission of a crime by him. (People v. Barboto, 254 N. Y. 170.) An attempt to establish a false alibi may under proper circumstances constitute some corroboration of an accomplice (People v. Deitsch, 237 N. Y. 300), but corroboration must always be supplemental to testimony which a jury could accept as true beyond a reasonable doubt. Corroboration is something collateral. Were there no evidence in the case tending to connect Edward Grimaldi with the crime except the fact, if it be a fact; that he falsely attempted to prove his presence at the time of the commission of the crime at a location remote from the scene of the crime, then as matter of law the jury would have nothing to consider. When Pagano finally decided to swear positively that Zock and Edward Grimaldi were the two individuals who kidnapped him and when the jury cast aside bis testimony relating to Zock, it could not accept as true beyond a reasonable doubt his tale concerning Edward Grimaldi. Perhaps, in an effort to support this conviction at any cost, an argument might be formulated in the direction of a theory that the jury did in fact believe that Zock was present but that the evidence of the accomplice on that point was not corroborated. But in such an argument conflicting elements are involved. If Zock’s attempt to prove an alibi was accepted as true, then Pagano either was hopelessly ignorant or deliberately lied about Zock, and his state of mind concerning Edward Grimaldi would, in all probability, be no more accurate or truthful. If the jury rejected Zock’s attempt at an alibi, then Pagano’s testimony, assuming it to have been accepted, might be held to be corroborated. So on any aspect, the evidence which acquitted Zock is not strong enough to convict Edward Grimaldi.

The evidence against Fiore Grimaldi, not considered as corroboration of a discredited accomplice but by way of an admission, is probably not so weak. The jury could have believed that his attempted establishment of an alibi was false. This fact, taken with his omission to testify^ would arouse suspicion in the minds of a jury but would not constitute strong proof of a competent nature against a man like him of previous criminal record who was accused of murder. He is of the type whose guilt is promptly conjectured and whose innocence, if such were necessary, would not readily be proved. The natural suspicion attaching to him was aggravated by his statement in the police station that several months before the murder he had, for pay, promised Pignataro to procure “ a couple of gunmen ” to go to Catskill, where Mrs. Pignataro then was, for the purpose of bumping her off.” Distrust in his guiltlessness of this specific crime lingers even when that statement was accompanied by his assertion that he never kept his promise, did not engage any gunmen and thus obtained money from the husband under false pretenses. Yet no bloodstains were found on his person or clothing and the fingerprints discovered on the knife and the car were not those of Fiore Grimaldi or Rybka, the two men who, according to Pagano’s final testimony, occupied the car with the victim.

Two errors of law in the admission of evidence were, in view of the doubtful quality of evidence against them, highly prejudicial to the rights of both Grimaldis. Detectives were allowed to testify that at the station house on the evening of October 12th, in the presence of Pagano and the two Grimaldis who were then in custody, Pignataro stated that he had paid $900 to Pagano to put his wife out of the way, that Pagano in denying the charge, retorted that the Grimaldis are making him say this,” and that, during this exchange of charges, both Grimaldis remained silent. Under the rule as announced many years ago in Kelley v. People (55 N. Y. 565), the admission of this evidence would not constitute error, but by our recent decisions in People v. Rutigliano (261 N. Y. 103) and People v. Dolce (261 N. Y. 108) the doctrine of the Kelley case has been overruled. The principle as now established in this State is to the effect that a person in custody accused of a crime is under no duty to speak and that his silence should not be counted as giving assent. The second error crept into the case during Pagano’s explanation of Ms change of attitude as a witness on the trial. He asserted that he had lied when he swore that these defendants were not the four men who participated in the kidnapping of himself and Mrs. Pignataro and declared that Ms perjury arose from fear produced by threats made by Frank Grimaldi, a brother of Edward and Fiore. In People v. Buzzi (238 N. Y. 390, 397, 398) testimony was admitted wMch showed an effort on the part of defendant’s sister and a detective employed by her attorney to suppress harmful evidence. Reversal of the judgment of conviction was based in part upon the holding by tMs court that such evidence is inadmissible unless defendant knew of and authorized the attempts at suppression. In the absence of such knowledge, efforts by friends to suppress evidence has no tendency to justify an inference of consciousness of guilt by defendant.

By the doubtful testimony of a witness of such low moral fibre as Pagano, uncertainty concermng the guilt of the Grimaldis is produced to such an extent as to render substantial and reversible an error of law wMch, under other circumstances, might be regarded as harmless.

Suspicion of Pignataro as an actor in tMs tragedy is so profound that a jury instinctively would be impelled to convict. If the sense of summary justice of a frontier vigilance committee were to prevail, affirmance of Ms conviction would almost inevitably follow. Perhaps the evidence would satisfy a court martial in the field. In a civil action with rulings free from error, an appellate court might hesitate to reverse as against the weight of evidence, but from an examination of the many complex features of tMs case in the light of the law wMch we are bound to admimster, even for the benefit of one against whom the darkest misgivings arise, the conclusion cannot be avoided that all reasonable doubt, even in respect to Pignataro, has not been excluded and that the case was not tried without some error of law wMch we can say was not prejudicial to his substantial rights. Only the salient features have been outlined in this opinion, but the serious study which we have given to the endless details persuades us that much of the truth has not yet been discovered. These three appellants are criminals or associates of criminals, their veracity may reasonably be doubted even when they make admissions apparently against their own interest, the chief witness whom the District Attorney was constrained to use for lack of a better one is an atrocious perjurer and perhaps a participant in this murder. Currents and cross-currents springing from acts of bootleggers, strong arm men and a suspected adulteress flow through the case. So many of the witnesses have lied either through hope of preserving their own liberty or of favoring their friends or of placating their enemies, that a true dissection of motives is prevented and a clear vision of acts is obscured. The trial consumed several weeks and in such a maze of ramifications consisting of contradictory words and acts which grew out of motives not always apparent to the normal being, some error of law prejudicially affecting Pignataro’s substantial rights not unnaturally occurred.

In respect to Pignataro, the theory of the prosecution is that he sought revenge against bis wife, that his state of mind was engendered by a belief in her marital infidelity and that he employed some one to satisfy his vengeful sense of the wrong which he thought she had inflicted upon him. A detective testified that on the night of the homicide Pignataro, then in the police station house, informed him that his wife had a lover whose name resembled Alfred Ishkar,” that she had bought clothes and an automobile for this man and that she had given to him most of the money which Pignataro had made during the last three or four years. Not one of these assertions, however, was otherwise proved. At that time Pignataro denied any knowledge concerning the perpetrators of the crime. The same detective testified that at six o’clock in the evening of October 12th, two days after the murder, Pignataro, still in custody in the station house, orally stated to him and another detective that he had paid $900 to Pagano to put his wife out of the way. Three statements by Pignataro were taken by stenographers. His first written statement made to an Assistant District Attorney was late in the night of the 11th, or early in the morning of the 12th. Therein he admitted that during the previous summer he had paid $200 to Fiore Grimaldi for the services of a lawyer in defending two men who, as Grimaldi had represented to Pignataro, were arrested near Newburgh in possession of a stolen car. He denied in this statement that the money was paid for the purpose of putting his wife on the spot ” and asserted that he did not tell these men to kill her or to shoot her. His second statement was made to the same Assistant District Attorney shortly after noon on October 12th. At this time he stated that he wanted a lawyer, again admitted that he had given Fiore Grimaldi $200 during the summer and also $400 in May when he, Pignataro, had been “ pinched for a gun,” but denied, as formerly, that he had hired any one to kill his wife, that he knew who did it or anything about it. The third written statement was made at one o’clock in the morning of October 13th. It was prior to this time that Pignataro had stated that he wanted a lawyer. He had also asked a detective if he could get a manslaughter plea for him. The detective replied that he would try to do so and would speak to the District Attorney about it, if Pignataro would tell the truth. Upon the detective’s statement that in the event of conviction for manslaughter the term of imprisonment might be seven and a half to fifteen years, Pignataro replied that he would tell the truth.' Here is his final statement in full: “ Q. Fiori, your name is Fiori Pignatari? A. Yes. Q. You had a wife by the name of — A. Gemma. Q. And recently you paid $900 to get rid of her? A. Yes, sir. Q. You did pay $900 to get rid of her? A. Yes, sir. Q. Now, the reason you are telling me you paid the $900 is because you think somebody ratted on you? A. No, sir. Q. What reason have you for telling me this story about paying $900? Do you want to tell the truth? Is that the reason? A. The reason I was — Q. Answer yes or no. A. Yes. Q. Did you pay $900 to get rid of Gemma? A. Yes, sir. Q. I would like to know the reason you are telling me? A. Because I want to tell the truth. Q. You are sure there is nobody influencing you, in other words nobody making you tell the story? A. No, I am telling of my own will. Q. This payment of $900 was made when? A. Well, maybe — Q. Labor Day? A. Maybe around on the 8th, maybe Thursday.”

The court charged that this confession was voluntary as matter of law. We think that error was thereby committed. The jury is the final arbiter of every question of fact (People v. Walker, 198 N. Y. 329) and the issue whether an act is voluntary or involuntary is one of fact. (People v. White, 176 N. Y. 331.) It is true that section 395 of the Code of Criminal Procedure does not render this confession inadmissible. There is no evidence that it was made under the influence of fear produced by threats nor upon a stipulation of the district attorney that this defendant should not be prosecuted. No claim is made that he was beaten by the police. After the confession was properly admitted in evidence, the circumstances under which it was made and the motives which prompted it were to be considered by the jury in estimating its weight and value. The word voluntary is frequently used in judicial opinions in reference to admissibility under section 395 (People v. Doran, 246 N. Y. 409; People v. Weiner, 248 N. Y. 118; People v. Barboto, 254 N. Y. 170; People v. Alex, 260 N. Y. 425), but its primary meaning imports a condition, of mind which is free and unconstrained. This man had been in custody from ten o’clock in the night of October 10th Until the confession was finally drawn from him at one o'clock in the morning of October 13th. He had had little sleep and not much to eat. He asserted that his sole purpose was to tell the truth. The jury had the right to consider the question whether this statement was voluntary in the sense that the defendant was uncontrolled by fear or inspired by a false hope. Was his mind free to act? Did he constitute himself a shining advocate of verity and intend to free bis conscience of an oppressive burden or, knowing himself to be innocent of this particular offense but also to belong to the fellowship of criminals and under grave suspicion as the instigator of this tragedy, was he coerced by terror of the consequences of a denial which might lead to bis conviction of a crime of which he was not guilty? Was he ensnared in the intrigues, feuds and vendettas growing out of the illicit loves and other misdeeds rife among these defendants and their associates in such measure that he was impelled to prefer the safety of a prison to a freedom imperilled by their vengeance? These are questions of fact which, even after the admission of the confession in evidence, the jury could ask themselves before they were bound to decide that the confession was voluntary. (See People v. Rogers, 192 N. Y. 331, 345.) The omission of the questioner to inquire the identity of the person employed to do the murder creates bewilderment. Pignataro’s oral statement is to the effect that Pagano is the assassin whom he hired. In the written confession the obvious question does not appear. The brief of the District Attorney admits with commendable frankness that this is a mysterious murder. Surely the mystery is not dispelled by the meagre admissions made by Pignataro.

All or some of these” appellants may be guilty but, after a minute examination of the record, we have come to the conclusion that this is a case where we ought to exercise the power conferred by section 528 of the Code of Criminal Procedure and grant a new trial on the ground that justice requires it. (People v. Spickler, 255 N. Y. 408; People v. Cashin, 259 N. Y. 434.)

The judgments of conviction' should be reversed and a new trial ordered.

Kellogg and Hubbs, JJ., concur with O’Brien, J.; Lehman and Crouch, JJ., concur in result; Pound, Ch. J., and Crane, J., dissent and vote for affirmance. Judgments reversed, etc.


author: Pound, Ch. J..

text:
    The People of the State of New York, Respondent, v. Max Hipple, Appellant.
    (Argued December 15, 1933;
    decided January 9, 1934.)

      Lawrence Kovalsky and David Goldstein for appellant.
    The judgment of conviction can only be sustained by proof showing a violation by the defendant of subdivision 3 of section 722 of the Penal Law. (People v. Grogan, 260 N. Y. 138; People v. Dumar, 106 N. Y. 502; People v. Abramowitz, 132 Misc. Rep. 18.)

      Thomas C. T. Crain, District Attorney (Le Roy Manóle of counsel), for respondent.
    The judgment of conviction can be sustained if any of the acts set forth in the complaint constitute disorderly conduct. (People v. Peckens, 153 N. Y. 576; People v. Miller, 143 App. Div. 251.)
   Pound, Ch. J..

Defendant was charged with violation of Penal Law, section 722, subdivision 3, which reads as follows:

§ 722. Disorderly conduct. Any person who with intent to provoke a breach of the peace, or whereby a breach of the peace may be occasioned, commits any of the following acts shall be deemed to have committed the offense of disorderly conduct: (( * * *

3. Congregates with others on a public street and refuses to move on when ordered by the police.”

He was convicted in the Magistrates’ Court of the City of New York. Sentence was suspended. Judgment of conviction was affirmed in the Court of Special Sessions. Defendant contends that he did not perform the alleged acts of disorderly conduct “on a public street.” The complaint charges that the offense was committed in front of premises No. 22 West 31st Street ” in the city of New York. The officer who arrested defendant testified that he was inside of a doorway ” when he was told to move on; the doorway of “ a business building.” A strike was in progress “ up there.” The court found that “ no man, whether a walking delegate, or whatever he is, has a right to stand in the entrance of a business building,” and said his standing there, in the building, was calculated to cause a breach of the peace.”

We have given the language of Penal Law, section 722, a broad construction. A group of persons congregating on a public street may be dispersed, although their intent is orderly and inoffensive. Even then it may be said that a breach of the peace may be occasioned.” (People v. Galpern, 259 N. Y. 279, 283.) By the language of the subdivision of the section the congregating must be ” on a public street ” and the evidence negatives the claim that defendant was <( on a public street.” He has not committed the offense specified in subdivision 3 of section 722.

The learned District Attorney contends that the People are not limited to the particular acts stated in subdivision 3 in order that defendant may be convicted of disorderly conduct.

Subdivision 2 provides generally that one is guilty of disorderly conduct who “ Acts in such a manner as to annoy, disturb, interfere with, obstruct, or be offensive toothers.”

The complaint charges an act which amounts to a breach of the peace whether performed on the street or in the hallway of a business building where people are going in and going out. One may not take refuge in a doorway to congregate there with others who are on the street, interfering with and obstructing passers-by, and then plead that he has not congregated with them on the street.

A complaint in the Magistrates’ Court charging disorderly conduct need not state the name of the crime, the particular offense,” with the exactness required of an indictment or an information. (People v. Grogan, 260 N. Y. 138.) The essence of the charge of disorderly conduct is that a breach of the peace may be occasioned by certain enumerated acts. Defendant was told to move on by the arresting officer and he refused to move on. To say that he should be discharged because he was not on the street but was standing in the entrance of a building, although congregating with others • who were on the street, during the progress of a strike, is to sacrifice justice to a mere technicality.

The judgment should be affirmed.

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

Judgment affirmed.