author: Lotjghrau, Ch. J.

text:
    Edward J. Danziger, Respondent, v. Hearst Corporation et al., Appellants.
    Argued April 7, 1952;
    decided July 15, 1952.

      Charles Henry for appellants.
    I. The defense of privilege is sufficient by virtue of section 337 of the Civil Practice Act. (Stevenson v. News Syndicate Co., 276 App. Div. 614, 302 N. Y. 81; Stuart v. Press Pub. Co., 83 App. Div. 467; Campbell v. New York Evening Post, 245 N. Y. 320; Lee v. Brooklyn Union Pub. Co., 209 N. Y. 245; Sanford v. Bennett, 24 N. Y. 20; Stolow v. Hearst Corp., 105 N. Y. S. 2d 284; May v. Syracuse Newspapers, 250 App. Div. 155; Schachter v. News Syndicate Co., 270 App. Div. 378; Farrell v. New York Evening Post, 167 Misc. 412.) II. Courts have no power to suppress publications by contempt proceedings in the absence of clear and present danger. (Cowley v. Pulsifer, 137 Mass. 392; People v. Defore, 242 N. Y. 13; People v. Richter, 43 N. Y. S. 2d 114; Hernandez v. Brookdale Mills, 201 App. Div. 325; Bridges v. California, 314 U. S. 252; Pennekamp v. Florida, 328 U. S. 331; Craig v. Harney, 331 U. S. 367; Maryland v. Baltimore Radio Show, 338 U. S. 912.) III. Rule 278 of the Rules of Civil Practice is an attempt at abridgment of free speech in violation of the First and Fourteenth Amendments to the United States Constitution and section 8 of article I of the New York Constitution. (Schneider v. State, 308 U. S. 147; Craig v. Harney, 331 U. S. 367; Bridges v. California, 314 U. S. 252; Pennekamp v. Florida, 328 U. S. 331; Near v. Minnesota, 283 U. S. 697; Cantwell v. Connecticut, 310 U. S. 296; Thomas v. Collins, 323 U. S. 516; Lovell v. Griffin, 303 U. S. 444; Providence Journal Co. v. McCoy, 94 F. Supp. 186.) IV. The partial defense in any event is clearly sufficient. (Fleckenstein v. Friedman, 266 N. Y. 19.)

      Nathan H. Elman for respondent.
    I. The privilege afforded newspapers to publish details of judicial proceedings is confined solely to matters of public record. Defendants may not publish details of secret and confidential files. (Stevenson v. News Syndicate Co., 276 App. Div. 614, 302 N. Y. 81; McCurdy v. Hughes, 63 N. D. 435; McCabe v. Cauldwell, 18 Abb. Prac. 377; Stuart v. Press Pub. Co., 83 App. Div. 467; Sachs v. Blum, 241 App. Div. 384; Farrell v. New York Evening Post, 167 Misc. 412.) II. Rule 278 of the Rules of Civil Practice is reasonable, consistent with the statutes and public policy, and is not an attempt of the court to legislate contrary to the First and Fourteenth Amendments of the United States Constitution and section 8 of article I of the New York Constitution. (Matter of North v. Foley, 238 App. Div. 731; Stuart v. Press Pub. Co., 83 App. Div. 467; Matthews v. Associated Press of State of N. Y., 136 N. Y. 333; Chamber of Commerce v. Federal Trade Comm., 13 F. 2d 673; Fleming v. Lowell Sun Co., 36 F. Supp. 320.)
   Lotjghrau, Ch. J.

In this action for libel the complaint makes these allegations: The defendant, the Hearst Corporation, publishes a-newspaper called the “ Sunday Mirror ” and the defendant King Features Syndicate, Inc., publishes the “ Sunday Mirror Magazine Section ”. On May 14. 1950. the defendants published in the “ Sunday Mirror Magazine Section ” an article of and concerning the plaintiff which repeated charges that had been made against the plaintiff by his wife in a separation action which she had brought against him in the New York Supreme Court. These charges, it is here alleged, were false, exaggerated and sensational and accused the plaintiff of having assaulted and physically tortured his wife.

The complaint herein further alleges: The separation action brought against the plaintiff by his wife has been settled. Neither party to that action gave any testimony therein. But, on or about March 30, 1950, the plaintiff’s wife made in that action a motion for temporary alimony and for counsel fees and in support of that motion submitted an affidavit sworn to by herself. The motion papers were filed without argument on April 10, 1950, at Special Term, Part I, New York County. Although inspection of these papers was barred by rule 278 of the New York Buies of Civil Practice unless the court ordered inspection thereof, the defendants illegally and without such an order or any other authority obtained from the files of the court a copy of the affidavit made by the plaintiff’s wife and published it. These allegations of the complaint are admitted in the amended answer of the defendants.

The amended answer pleads a first and complete defense in this form: “ 7. The publication complained of herein was a fair and true report of certain official and judicial proceedings, to wit, an action for a separation between said plaintiff and his wife pending in the Supreme Court of the State of New York. Such publication gave a correct account of matters duly sworn to in the course of such proceedings and such proceedings formed the basis of the information disseminated by defendants. Such publication as was made by defendants correctly convey [s] to readers the nature, circumstances and judicial background of the material published without in any way indicating any judgment or conclusion of defendants, or recommendation for readers to form any conclusion one way or the other. Such publication was in the ordinary course of business, without malice, and was privileged.”

The amended answer sets forth the following first partial defense: “ 8. Defendants reallege paragraph ‘ 7 ’ of this amended answer by way of partial as well as of complete defense. Defendants’ publication was based on a source of the utmost reliability and such source was clearly indicated by defendants in the publication complained of.”

The plaintiff moved for an order striking out the above defenses and that motion was granted by Special Term. In a memorandum decision the court said: ‘1 When a newspaper publishes matter which it had no legitimate access to and which the public policy of the state declares should not be made available to anyone except the parties and their representatives, the publication is not privileged but made at peril.”

The order of Special Term was affirmed by a divided vote of the Appellate Division and by leave of that court the defendants appealed to us upon the following questions certified: 1. Is the first defense set forth in defendants’ amended answer herein sufficient in law? 2. Is the first partial defense set forth in defendants’ amended answer herein sufficient in law? ”

(1) We think the plaintiff is right in his assertion that the first defense disregards rule 278 of the Rules of Civil Practice. It is thereby provided: ‘ ‘ Information as to details of matrimonial actions. An officer of a court with whom the proceedings in an action to annul a marriage or for divorce or separation are filed, or before whom the testimony is taken, or his clerk, either before or after the termination of the suit, shall not permit a copy of any of the pleadings or testimony, or any examination or perusal thereof, to be taken by any other person than a party, or the attorney or counsel of a party who had appeared in the cause, except by order of the court.”

The defendants assail rule 278 as a violation of the constitutional guarantees of freedom of the press. This criticism of the rule fails, we think, to take proper account of its scope and purpose. The rule is addressed to officers and clerks of the New York Supreme Court. It does not prohibit access to the minutes of the clerk of the court and thus does not interfere with the right of any person to obtain information in respect of the pendency or result of any matrimonial action. Nor does the rule prohibit publication of the details of a matrimonial action that are obtained from a source other than the files of the court. Of course, such a publication is actionable if defamatory. But this liability for indefensible defamation cannot be taken to be an unconstitutional restriction of the freedom of the press.

The defendants also assail rule 278 as a piece of judicial legislation. This criticism, we think, overlooks the history of the rule which goes back to 1847 (see rule 118 of the General Rules of Practice of 1847). Since that date the rule has been repeatedly re-enacted by the New York Supreme Court pursuant to authority to make rules of civil practice conferred on the court by the State Legislature (see Judiciary Law, § 83). As we see it, this long history is an assurance that in the opinion of the profession rule 278 is an admissible exercise of the rule-making power of the New York Supreme Court (see Hanna v. Mitchell, 202 App. Div. 504, affd. 235 N. Y. 534).

(2) We think the defendants are mistaken in their reliance upon section 337 of the Civil Practice Act. It is thereby provided: “ Privileges in action for libel. A civil action cannot be maintained against any person, firm or corporation, for the publication of a fair and true report of any judicial, legislative or other public and official proceedings, or for any heading of the report which is a fair and true headnote of the statement published.”

The statutory words just quoted are read by the defendants as embracing judicial proceedings that are not public. We cannot adopt that construction. As we read the text of section 337, the word public ” refers to the words judicial ” and legislative ”. A contrary construction would do violence to the public policy behind the statute (see Holmes, J., in Cowley v. Pulsifer, 137 Mass. 392, 394; 18 Halsbury’s Laws of England [1st ed.], p. 694; Odgers on Libel and Slander [6th ed.], pp. 253-257). Moreover such a construction would in effect nullify other statutes whereby the Legislature has directed preservation of secrecy in respect of records of a number of judicial proceedings (see Judiciary Law, § 90, subd. 10; N. Y. City Dom. Rel. Ct. Act, § 52; Mental Hygiene Law, § 74, subd. 6; Code Crim. Pro., §§ 913-f, 952-t; L. 1951, ch. 716, § 23).

In a word, the first defense — which was pleaded as a complete defense — was rightly stricken out by the courts below.

(3) But the facts pleaded in the answer of the defendants could, on proof thereof, be found to be sufficient as a partial defense under section 338 of the Civil Practice Act which says: “In an action for libel or slander, the defendant may prove mitigating circumstances, including the sources of his information and the grounds for his belief, notwithstanding that he has pleaded or attempted to prove a justification.”

The order appealed from should be modified in accordance with the opinion herein, and, as so modified, affirmed, with costs to the plaintiff. The first question certified should be answered in the negative; the second question certified should be answered in the affirmative.

Lewis, Conway, Desmond, Dye, Fund and Froessel, JJ., concur.

Ordered accordingly.


source: Caselaw Access Project

author: Loughran, Ch. J.

license: Public Domain

text:
    Arthur Schwartz, Respondent, v. Leo Greenberg, Appellant.
    Argued April 15, 1952;
    decided July 15, 1952.

      Philip Adler and Martin H. Young for appellant.
    I. The contract was in writing and, since there was no delivery thereof, it was not legally binding. The findings that the contract was oral and that the written contract was merely a ‘ ‘ memorandum ’ ’ of the oral contract sufficient to satisfy the Statute of Frauds, was error. (Grannis v. Stevens, 216 N. Y. 583; Stiebel v. Grosberg, 202 N. Y. 266; Clark v. Auditore, Inc., 244 N. Y. 382; Sarasohn v. Kamaiky, 193 N. Y. 203; Dietz v. Farish, 79 N. Y. 520; Friedman & Co. v. Newman, 255 N. Y. 340; Argus Co. v. Mayor of City of Albany, 55 N. Y. 495.) II. The award of damages in the sum of $3,736.46 was improper. (Neverfail Lighter Co. v. Blum, 201 App. Div. 153.) III. The expenses and losses incurred in the liquidation are not a proper basis for fixing plaintiff’s damages. (Farish Co. v. Madison Distributing Co., 37 F. 2d 455; Haughey v. Belmont Quadrangle Drilling Corp., 284 N. Y. 136; Derami, Inc., v. John B. Cabot, Inc., 273 App. Div. 717; Roussos v. Christoff, 224 App. Div. 276.)

      Albert E. Schwarts, Paul Miller, Lawrence Isaacs and Nathan H. Elman for respondent.
    I. A valid and binding oral agreement was entered into between the parties, and the question of whether or not a written contract was entered into and delivered was immaterial. (Pratt v. Hudson Riv. R. R. Co., 21 N. Y. 305; Sherry v. Proal, 131 App. Div. 774; Sanders v. Pottlitzer Bros. Fruit Co., 144 N. Y. 209.) II. There was in fact a delivery of the written contract in view of the fact that it was the intent of the parties that the contract operate as a valid executed contract. (Sarasohn v. Kamaiky, 193 N. Y. 203.) II'I. Plaintiff pleaded and proved damages in the sum of $3,736.46, as found by the Appellate Division. (Wakeman v. Wheeler & Wilson Mfg. Co., 101 N. Y. 205; Industrial & Gen. Trust, Ltd., v. Tod, 180 N. Y. 215; Brown v. Weir, 95 App. Div. 78; Harris Structural Steel Co. v. Chapman, 162 Misc. 709; Joseph v. Sulzberger, 136 App. Div. 499; Clews v. Jamieson, 182 U. S. 461; Vaupell v. Woodward, 2 Sandf. Ch. 143; Sawyer v. Dean, 114 N. Y. 469.)
   Loughran, Ch. J.

We believe the plaintiff failed to establish the cause of action asserted by him. The structure of his complaint does not make possible an easy compression of the allegations thereof. Hence we shall state his position in his own words. Included in his complaint are these allegations:

‘ ‘ First : That on or about April 4, 1950, the plaintiff was the owner of all the issued and outstanding preferred and common stock of Vogue-Ette, Inc., a domestic corporation.

“ Second: That on or about April 4, 1950, the plaintiff and defendant entered into an agreement wherein the plaintiff was to sell all his right, title and interest in and to the preferred and common stock of Vogue-Ette, Inc., a domestic corporation, to the defendant for the sum of $28,688.35 and the defendant agreed to pay the said $28,688.35 for the said stock of plaintiff in VogueEtte, Inc.

‘ ‘ Third : That the plaintiff duly performed all the conditions of said contract on his part to be performed and on April 4,1950 and thereafter was ready, willing and able to transfer all his right, title and interest to the said preferred and common stock of Yogue-Ette, Inc., and duly tendered said stock to the defendant and demanded that he accept and pay for the same.

Fourth : That at that time the defendant refused to accept the said stock or to pay the sum of $28,688.35 pursuant to his agreement.

“ Fifth : That the said Yogue-Ette, Inc., was a closed corporation, and there was no market for the sale of the said stock of the plaintiff, of which facts defendant was aware.

“ Sixth: That as a result of defendant’s aforesaid breach of contract, plaintiff was forced to liquidate the assets of the said Yogue-Ette, Inc.

“ Seventh : That as a result of defendant’s aforesaid breach of contract, the plaintiff was caused damage in the sum of Ten Thousand ($10,000.00) Dollars.”

The answer of the defendant denies the whole complaint.

The following facts are undisputed: On April 4, 1950, the parties and their attorneys met at the office of the plaintiff’s attorney for the purpose of entering into a written contract whereby the plaintiff would agree to sell and the defendant would agree to purchase the stock of a New York corporation all the shares of which were owned by the plaintiff. On that occasion, the plaintiff’s attorney produced duplicate typewritten originals of such a contract and the plaintiff signed one while the defendant signed another. The purchase price was stated to be $28,688.35 — the book value of the stock. A check for that sum was tendered by the defendant but was refused by the plaintiff who demanded a certified check. In that state of the matter, the parties agreed to postpone completion of the transaction until the next day and thereupon each party picked up the writing that had been signed by him and went away. When they met again the next day, the defendant said he had changed his mind and would not execute any contract. The attorney for the plaintiff then requested return of the typewritten instrument which had been delivered to the defendant the day before and that document was handed over by the defendant’s attorney after he had torn off the signature of his client.

This action was tried before Official Beferee Frederick P. Close who made the following finding: “ There is no evidence in this case that either the defendant or his attorney ever delivered the contract signed by the defendant to the plaintiff or his attorney.” For that reason, Judge Close dismissed the complaint on the merits.

On appeal by the plaintiff to the Appellate Division, the judgment granted to the defendant at the trial was reversed on the law and the facts and all “ inconsistent ” findings of fact and conclusions of law made by Judge Close were set aside. The Appellate Division said: In our opinion the proof establishes that there was a valid and binding oral agreement entered into by the parties upon which their minds met in all respects; and failure to deliver a signed copy of the writing setting forth the terms of that agreement cannot defeat its enforcement.” (279 App. Div. 750.) In support of that proposition the Appellate Division made new findings of fact and conclusions of law. Judgment for the plaintiff followed and from that judgment the defendant appealed to this court.

Of course, if the parties intended to be bound by an oral agreement, a mere failure to reduce their promises to writing would be immaterial. (Pratt v. Hudson Riv. R. R. Co., 21 N. Y. 305, 308; Sanders v. Pottlitzer Bros. Fruit Co., 144 N. Y. 209, 214; Disken v. Herter, 73 App. Div. 453, 455, affd. 175 N. Y. 480.) But there is no evidence of an intention of the parties to be bound by any mere oral understanding. Indeed they drafted a formal contract on April 4, 1950, and each of them retained a copy thereof until they met again the next day, when the defendant withdrew from the transaction. It is entirely plain, then, that the parties did not intend to be bound until a written agreement had been signed and delivered (see Dietz v. Farish, 79 N. Y. 520, 523). Hence the finding to the contrary made by the Appellate Division must be rejected as erroneous and the judgment for the plaintiff must be reversed.

There remains the question whether we can grant judgment for the defendant on the present record. The finding by Judge Close that there had been no delivery of the contract was not specifically reversed by the Appellate Division. The order of that court does indeed purport to reverse all findings of Judge Close that are inconsistent with its decision but the decision, instead of making a finding contrary to the finding of Judge Close on the issue of delivery, treats that issue as being immaterial. This state of the record requires us to presume that the question of fact as to delivery was not reviewed by the Appellate Division (Civ. Prac. Act, § 602).

Even so, we need not on that account remit this case to the Appellate Division for determination of that question of fact (see Civ. Prac. Act, § 606). For there is no evidence that would support a finding of a delivery of the written contract and, that being so, the defendant is entitled to judgment dismissing the complaint (Matter of Case, 214 N. Y. 199; Blum v. Fresh Grown Preserve Corp., 292 N. Y. 241).

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

Lewis, Conway, Desmond, Dye, Fuld and Froessel, JJ.? concur.

Judgment accordingly.


author: Per Curiam.

text:
    In the Matter of John Chironna et al., Similarly Situated, Appellants, against James S. Watson et al., Constituting the Civil Service Commission of the City of New York, Respondents, and Jack R. Roitburd et al., Similarly Situated, Interveners, Respondents.
    Argued May 26, 1952;
    decided July 15, 1952.

      Salvator Milasso for appellants.
    I. The civil service commission of the city of New York, upon declaring an examination not truly competitive, must direct a new examination to be taken by all candidates. II. Petitioners are persons aggrieved and entitled to maintain proceedings. III. This proceeding is timely and properly instituted.

      Denis M. Hurley, Corporation Counsel (Anthony Curreri and Seymour B. Quel of counsel), for respondents.
    I. In requiring a special re-examination of the candidates who had chosen to answer the questions excised from the original examination and in restricting their re-examination to the same number of similar questions originally chosen, the commission adopted a course of action which was eminently fair and reasonable and in conformity with the statutory requirement that the examination be competitive. (Matter of Firshein v. Reavy, 263 App. Div. 490, 289 N. Y. 712; People ex rel. Caridi v. Creelman, 150 App. Div. 746; Matter of Gruner v. McNamara, 298 N. Y. 395; Matter of Sloat v. Board of Examiners, 274 N. Y. 367; People

      ex rel. Moriarty v. Creelman, 206 N. Y. 570; Matter of Fink v. Finegan, 270 N. Y. 356; Matter of Allaire v. Knox, 62 App. Div. 29, 168 N. Y. 642; Matter of Pollak v. Conway, 276 App. Div. 435, 301 N. Y. 816; Matter of Bergerman v. Murphy, 278 App. Div. 388, 303 N. Y. 762; Matter of Immediato v. Kern, 278 N. Y. 680.) II. The test is not whether the present course of action is one the commission might have adopted or even that it was the wisest possible course. It is sufficient if a “ fair, reasonable argument may be made to sustain the action ”. (People ex rel. Moriarty v. Creelman, 206 N. Y. 570; Matter of Pollak v. Conway, 276 App. Div. 435, 301 N. Y. 816.)

      Sidney A. Fine and Morris Weissberg for interveners, respondents.
    Since no fraud, bad faith or advantage to any applicant was shown, the inclusion of questions allegedly taken from Glendinning’s book in this “ open book ” type of examination did not affect the validity of the examination as a test of the relative merit and fitness of the applicants. Since the answers were rated by an absolute standard and not by their excellence relative to each other, petitioners’ failing marks in the examination were not affected by the possibility that Glen-dinning’s book might have helped other applicants to pass the examination. In any event, the commission acted within its discretion in re-examining upon equivalent questions, without further choice of subject matter or questions, those applicants who answered any of the disputed questions. (People ex rel. Caridi v. Creelman, 150 App. Div. 746; People ex rel. Finnegan v. McBride, 226 N. Y. 252; Matter of Fitzgerald v. Conway, 275 App. Div. 205; Matter of O’Brien v. Delaney, 255 App. Div. 385, 280 N. Y. 697; Matter of Immediato v. Kern, 254 App. Div. 672, 278 N. Y. 680; People ex rel. Moriarty v. Creelman, 206 N. Y. 570; Matter of Pollak v. Conway, 276 App. Div. 435; Matter of Firshein v. Reavy, 263 App. Div. 490, 289 N. Y. 712; People ex rel. Braisted v. McCooey, 100 App. Div. 240; Matter of Allaire v. Knox, 62 App. Div. 29; People ex rel. Buckley v. Roosevelt, 19 App. Div. 431; Matter of Marcellus, 165 N. Y. 70; Mandeville v. Reynolds, 68 N. Y. 528.)
   Per Curiam.

In our opinion, the defects which concededly made the original examinations noncompetitive were not cured by the supplemental examination given only to those candidates who had selected questions that were subsequently excised from the original examinations. Hence, we think Special Term was right when it (1) directed the municipal civil service commission to annul the original examination of October 22, 1949; (2) directed the commission to annul the supplemental examination of October 9, 1950; and (3) enjoined the commission from certifying an eligible list based upon such examinations.

Whether the petitioners who were unsuccessful candidates are personally aggrieved is a question we need not decide. For as citizens of the State they may insist upon competitive civil service examinations as required by section 6 of article Y of the State Constitution (Matter of Cash v. Bates, 301 N. Y. 258).

We do not mean to imply, however, that they are here entitled to an order directing the holding of another examination. The desirability of that course ought to be determined by the civil service commission of the city of New York.

The order of the Appellate Division and that of the Special Term should be reversed and the matter remitted to Special Term for further proceedings not inconsistent with this opinion, with costs in this court and in the Appellate Division.

Loughrax, Oh. J., Lewis, Dye and Froessel, JJ., concur in Per Curiam opinion; Desmoxd and Fuld, JJ., dissent; Coxway, J., not sitting.

Orders reversed, etc. [See 304 N. Y. 738.]


author: Fuld, J.

text:
    In the Matter of Julius A. Weekes, Appellant, against John F. O’Connell et al., Individually and as Members of the State Liquor Authority, Respondents.
    Argued March 6, 1952;
    decided July 15, 1952.

      Monroe 1. Katcher, II, for appellant.
    I. The licensee did not suffer or permit any trafficking in narcotics on the licensed premises. No clerk, agent, employee, patron, or other person has been convicted of trafficking in narcotics on the licensed, premises. (People v. Dunford, 207 N. Y. 17; Matter of Konopka v. Bruckman, 290 N. Y. 777.) II. But even if Hayes’ testimony be taken at its face value, the sum total thereof does not equal the alleged offense of 1 ‘ trafficking ’ ’ in narcotics on the licensed premises. (Matter of Toyos v. Bruckman, 266 App. Div. 28.) III. Petitioner did not make a false material statement in answer to question No. 4 of the application, relative to the arrests of clerk, agent, or employee of the licensee, or any other person. (Matter of Kessler, 163 N. Y. 205; Matter of Hawkins, 165 N. Y. 188; Matter of Moulton, 59 App. Div. 25, 168 N. Y. 645; Matter of Farley v. Miller, 216 N. Y. 449; Matter of Cullinan, 75 App. Div. 301; Matter of 67 Liquor Shop v. O’Connell, 270 App. Div. 773; Matter of Brewster, 39 Misc. 689.) IV. Petitioner did not willfully and deliberately violate section 110 of the Alcoholic Beverage Control Law, relative to reporting any change in facts set forth in the original or renewal application. (Matter of Kessler, 163 N. Y. 205; Matter of Glenram Wine & Liquor Corp. v. O’Connell, 269 App. Div. 1004; Matter of 67 Liquor Shop v. O’Connell, 273 App. Div. 68; Farley v. Aprile, 86 Misc. 75.) V. Hearing accorded to petitioner was characterized by unconscionable and prejudicial delay, multiple amendments of unsubstantial charges and biased treatment by the hearing commissioner. (Matter of 67 Liquor Shop v. O’Connell, 273 App. Div. 68.) VI. Respondents may not lawfully render a determination revoking petitioner’s license, at a time when no part of the stenographic record of hearing held before the hearing commissioner had been duly considered and appraised either by the hearing commissioner or by respondents or any subordinate of respondents. (Matter of Joyce v. Bruckman, 257 App. Div. 795; Matter of Astrab v. O’Connell, 274 App. Div. 931; Matter of Crean v. Bruckman, 178 Misc. 231; Matter of Collins v. Behan, 285 N. Y. 187; Matter of Scudder v. O’Connell, 272 App. Div. 251; Matter of Tobkes v. O’Connell, 272 App. Div. 240; Matter of New York Water Service Corp. v. Water Power & Control Comm., 283 N. Y. 23; Matter of Greenebaum v. Bingham, 201 N. Y. 343; Matter of Revere Associates v. Finkelstein, 274 App. Div. 440.)

      Alvin McKinley Sylvester and William Hoppen for respondents.
    I. The evidence clearly established that petitioner permitted trafficking in narcotics on the licensed premises, made false material statements as to arrests, and failed to notify the Authority of changes in fact attendant upon the arrests. (Matter of Yacht Club Catering v. Bruckman, 276 N. Y. 44; Matter of Yates v. Mulrooney, 245 App. Div. 146; Matter of Clement, 144 App. Div. 156; Matter of Cullinan, 88 App. Div. 6; Matter of Savoy Associates v. Valentine, 266 App. Div. 63; Matter Lynch’s Bldrs. Restaurant v. O’Connell, 303 N. Y. 408; Matter of Avon Bar & Grill v. O’Connell, 301 N. Y. 150; Matter of Stork Restaurant v. Boland, 282 N. Y. 256; Matter of Menick v. Bruckman, 279 N. Y. 795; Matter of Kormann’s Hofbrau v. O’Connell, 275 App. Div. 930, 300 N. Y. 521; Guastamachio v. Brennan, 128 Conn. 356; Matter of College Point Wine & Liquors v. O’Connell, 296 N. Y. 752; Communications Comm. v. WOKO, 329 U. S. 223; Matter of Haim v. O’Connell, 195 Misc. 612.) II. The procedure followed in this case was in full accord with the provisions of the Alcoholic Beverage Control Law and the rules of the Authority. Appellant received timely notice of the charges and had a fair hearing at which he was represented by counsel who fully cross-examined the State’s witnesses and submitted a detailed brief at the conclusion of the trial. The stenographer’s minutes were available if any part of the testimany was required for consultation. The Authority acted on the basis of a report by the hearing commissioner which summarized the evidence with reasonable accuracy and without prejudice. The absence of a transcribed record of the testimony at the time of the determination in no way prejudiced the petitioner or reflected on the fairness of the Authority's action. (Matter of Elite Dairy Products v. Ten Eyck, 271 N. Y. 488; Matter of New York State Labor Relations Bd. v. Greif Realty Corp., 272 App. Div. 928; Berg v. Industrial Comm., 236 Wis. 172; Beem v. Industrial Comm., 244 Wis. 334; Radaca v. United States Smelting R. & M. Co., 62 Ariz. 464; Magnolia Petroleum Co. v. Railroad Comm., 127 S. W. 2d 230 [Tex.]; Taylor v. Industrial Accident Comm., 38 Cal. App. 2d 75; Pacific Ind. Co. v. Industrial Accident Comm., 28 Cal. 2d 329.)
   Fuld, J.

The present proceeding was brought, pursuant to article 78 of the Civil Practice Act, to review a determination of the State Liquor Authority revoking petitioner’s restaurant liquor license. The Authority’s determination was based on findings that the licensee had on three occasions suffered and permitted trafficking in narcotics on the licensed premises; that he had made a false material statement in the application for renewal of his license; and that he had failed to inform the Authority of a change of facts occurring subsequent to issuance of the license. The Appellate Division having unanimously confirmed the determination, we granted leave to appeal so that we might consider the propriety of the procedure followed by the Authority in reaching its decision.

The charges were tried at a hearing held, not by the Authority itself, but, in accordance with its usual practice, by a deputy functioning as a “ hearing commissioner.” The hearing extended over a period of three days: the taking of testimony lasted two days, and petitioner’s counsel was granted a third day in which to submit a summation of the evidence and an additional exhibit. The hearing commissioner was of the opinion that all but one of the charges leveled against petitioner were sustained by the evidence, and he embodied his conclusions in a report wherein he summarized and analyzed the testimony that had been adduced before him. It does not appear when this report was referred to the Authority, but it is undisputed that within one hour after the conclusion of the hearing — and this happened to be on the last day of the license period — the Authority entered its order of revocation predicated on findings and conclusions identical to those recommended by its subordinate. No record of the proceedings before the deputy commissioner nor any of the testimony heard by him was then available to the Authority. In point of fact, it is acknowledged that the minutes were not transcribed by the stenographer until several days thereafter.

The power “ To revoke, cancel or suspend for cause any license or permit issued ’ ’ under the provisions of the Alcoholic Beverage Control Law is conferred upon the Authority by subdivision 3 of section 17 of the statute, and subdivision 10 empowers that body, among other things, to “ hold hearings, subpoena witnesses, compel their attendance, administer oaths, [and] to examine any person under oath ”. The latter subdivision goes on to state that “ The powers provided in this subdivision may be delegated by the authority to any member or employee thereof.” (Emphasis supplied.)

Section 119 of the Law, entitled “ Procedure for revocation or cancellation ”, recites that a retail license may be revoked, cancelled or suspended by the Authority “ after a hearing at which the licensee * * * shall be given an opportunity to be heard.” Beyond imposing that fundamental requirement, the legislature has not specified the procedure to be followed, providing simply that such hearing “ shall be held in such manner and upon such notice as may be prescribed by the rules of the liquor authority ” (Alcoholic Beverage Control Law, § 119, subd. 2). The applicable rule (Buies of State Liquor Authority, Buie 2), promulgated pursuant to that statute, provides that revocation hearings are to be conducted by a “ hearing commissioner ’ ’ — who may be a member of the Authority or an employee designated by the Authority. The hearing commissioner “ shall rule upon matters of procedure and introduction of evidence and shall conduct the hearing in such manner as, in his discretion, will best serve the purpose of the attainment of justice and dispatch ” (subd. 9). “All evidence appearing in the stenographic record ”, unless objection has been noted therein, “ shall be deemed to have been validly introduced for the consideration of the Authority ” (subd. 8). Oral argument, which may be made only before the hearing commissioner, is similarly “to be included in the stenographic record of the hearing ” (subd. 5). “At the conclusion of the hearing, the hearing commissioner shall make his findings as to whether the evidence sustained the charges, or any of them, preferred against the licensee, shall designate which charges he has found sustained by the evidence and shall, at his option, recommend to the Authority the action to be taken against the licensee ” (subd. 9).

Then, Rule 2 continues, “ The stenographic record of the hearing shall be referred, together with the hearing commissioner’s findings and recommendation, if any, for. the due consideration and appraisal by the Authority at a meeting duly held by it ” (subd. 9).

As is apparent from this review of the pertinent provisions of statute and rule, the determination whether a liquor license is to be revoked, cancelled or suspended must be made by the Authority itself, and that function may not be delegated to any other body or individual. (Cf. Matter of Elite Dairy Products v. Ten Eyck, 271 N. Y. 488, 497.) Practical necessities, however, demand that the Authority be permitted to assign performance of much of the preliminary work to trained subordinates. Accordingly, the statute explicitly authorizes the Authority to depute an employee as hearing commissioner to conduct hearings upon charges filed against a licensee, and a rule of the Authority directs that employee to make findings and, when so minded, to recommend the action to be taken.

In a case such as the one before us, we do not inquire into the degree of reliance placed by the members of the Authority upon such internal assistance; the extent to which independent study of the evidence in the record is necessary to the required exercise of informed judgment must be left to the wisdom and practical good sense of the commissioners themselves. (Cf. Matter of Elite Dairy Products v. Ten Eyck, supra, 271 N. Y. 488, 498; United States v. Morgan, 313 U. S. 409, 422; Wellapoint Oysters v Ewing, 174 F. 2d 676, 695-696, certiorari denied 338 U. S. 860.) Be that as it may, however, the agency cannot dispense with basic procedural requirements promulgated for the protection of licensees against arbitrary or ill-considered action. In the proceeding under review, there has been an unmistakable violation of such a requirement. It is undisputed that, in its haste to render a' determination, the Authority failed to await even transcription of the minutes of the hearing before rendering a decision and revoking petitioner’s liquor license. Instead of having available the stenographic record of the hearing, as demanded by its own rules, the Authority had for its ‘ consideration and appraisal” only the hearing commissioner’s digest of the evidence, prepared on the basis of his personal recollection, together with his findings and the summation and motions made by petitioner’s attorney.

Though the hearing officer may be authorized to summarize and sift the evidence for the convenience of the Authority, such a summary cannot take the place of the complete transcript required by the Authority’s rules. A report of the character here submitted — reflecting as it did the deputy’s recollection of testimony given over a period of two days, covering more than 200 printed pages and not yet embodied in a transcribed record — is inherently inadequate; no such summary statement can reflect with complete accuracy the substance of the oral testimony. ’ ’ (See 1 Benjamin, Administrative Adjudication in the State of Mew York [1942], p. 139, fn. 26.) And, indeed, the hearing commissioner’s resumé in this case, though apparently conscientiously done, contains some errors and omissions.

Their findings being subject only to limited judicial review, administrative agencies should ever be mindful of the heavy responsibility thereby imposed, and that responsibility should dictate conscientious and painstaking assessment of the evidence presented. Accordingly, there may well be reasons for requiring such quasi-judicial bodies generally, when the hearing has been conducted by a subordinate, to have a copy of the record of that hearing in transcribed and readable form before they render their determinations. (Of. 1 Benjamin, op. cit., p. 138.) The mere availability of such a record tends to guarantee independent and informed appraisal of the proofs and of the contentions of the parties; the summary of the hearing officer, the litigants’ briefs, if any, and other secondary, fallible guides may be checked against the primary, unchangeable reference. With regard to particular administrative agencies, the legislature has imposed the requirement — that there be a record before the deciding body — in statutes governing their procedures (see, e.g., Education Law, § 6515, subd. 4; § 6613, subd. 3; § 7210, subd. 2; § 7308, subd. 2; former § 7408, subd. 1, now § 7406, subd. 1, as amd. by L. 1952, ch. 706; Labor Law, § 706, subd. 3), and Congress has, by provisions of the Federal Administrative Procedure Act (U. S. Code, tit. 5, §§ 1006, subd. [d], 1007, subd. [a]), adopted the same practice as the norm for federal administrative tribunals. And, in the judicial sphere, where decision is made by a court following a reference to hear and report, a full record of the proceedings conducted by the referee is similarly required to be before the court. (See Civ. Prac. Act, § 1174; Rules Civ. Prac., rule 170.)

However, we need not here consider whether, statute and rule aside, the duty to have available a readable transcribed record is imposed generally — as a necessary element of the right of hearing guaranteed by statute — upon every administrative agency that renders a determination on the basis of evidence received at a hearing not attended by its members. (Cf. Morgan v. United States, 298 U. S. 468, 480-481; Matter of Joyce v. Bruckman, 257 App. Div. 795, 797, appeal dismissed 284 N. Y. 736.) As already noted, the Authority itself, by explicit rule, promulgated pursuant to statute, has prescribed that ‘ ‘ the stenographic record of the hearing shall be referred, together with the hearing commissioner’s findings and recommendations, if any, for the due consideration and appraisal by the Authority at a meeting duly held by it ” (Rule 2, subd. 9; emphasis supplied). That rule, as effective and binding as if in a statute, may not be ignored or disregarded. (Cf. United States ex rel. Ohm v. Perkins, 79 F. 2d 533.) Nor can there be any doubt that the rule requires the Authority to have before it, not merely the stenographer’s shorthand notes, as the Authority now suggests, but the transcribed minutes of the hearing. Any other construction renders meaningless the requirement for referral of the record, for the commissi oners cannot “ consider ” and appraise ” a record which is not in readable and understandable form. Indeed, the Authority acknowledges that the procedure followed in this case was “ not usual ”. ‘ As a matter of policy,” its brief recites, “it is the practice of the Authority to have the transcribed record, , that is, the typewritten minutes of any hearing, before it at the time of its determination,” so that reference may be made to them.

Our conclusion that the Authority failed to comply with an important procedural safeguard, prescribed by its own rules, requires, without more, that the determination under review be annulled and that the proceeding be remitted to the Authority. Upon such remission, the Authority will, however, be free to render a determination, without the necessity of a new hearing, on the evidence adduced at the original hearing held by the deputy commissioner, since the record of that hearing has been transcribed and is now available for the consideration and appraisal of the Authority.

The order of the Appellate Division should be reversed, the determination of the State Liquor Authority annulled, with costs in this court and in the Appellate Division, and the proceeding remitted to the Authority for further action not inconsistent with this opinion.

Loughran, Ch. J., Lewis, Conway, Desmond, Dye and Froessel, JJ., concur.

Order reversed, etc. '. '

      . In the view that we have taken, it is likewise unnecessary for us to decide whether, where an administrative agency chooses to act before receiving a transcript of the evidence, the petitioner should be afforded an opportunity, prior to determination by the agency, of cheeking the accuracy and completeness of the resumé submitted by the hearing officer.


author: Conway, J. Lewis, J.

text:
    Marion Caldwell, an Infant, by Cyril C. Caldwell, Her Guardian ad Litem, et al., Appellants, v. Village of Island Park, Respondent.
    Argued March 6, 1952;
    decided July 15, 1952.

      Jules B. St. Germain and Harry Pfeffer for appellants.
    I. Defendant operated the Beach Park as a private or corporate function, and governmental immunity did not attach to free it from liability for its negligence. (Augustine v. Town of Brant, 249 N. Y. 198; Van Dyke v. City of Utica, 203 App. Div. 26.) II. Defendant was under a duty to furnish supervision of the Beach Park and to exercise reasonable care in protecting its users, not only during the period when admission was charged, but whenever the beach was opened to the public. (Tantillo v. Goldstein Bros. Amusement Co., 248 N. Y. 286; Ross v. Breakers, 49 A. 2d 14; Van Dyke v. City of Utica, 203 App. Div. 26; Dorsey v. Chautauqua Inst., 203 App. Div. 251.) III. Defendant was guilty of actionable negligence. (McDonald v. Central School Dist. No. 3, 179 Misc. 333, 264 App. Div. 943, 289 N. Y. 800; Daly v. State of New York, 226 App. Div. 154; Keer v. Children’s Aid Soc., 252 App. Div. 874; Dorsey v. Chautauqua Inst., 203 App. Div. 251; Van Dyke v. City of Utica, 203 App. Div. 26; Schubart v. Hotel Astor, 168 Misc. 431, 255 App. Div. 1012, 281 N. Y. 597; Tyrell v. Quigley, 186 Misc. 972; Dinnihan v. Lake Ontario Beach Improvement Co., 8 App. Div. 509; Collentine v. City of New York, 279 N. Y. 119; Fletcher v. Baltimore & Potomac R. R., 168 U. S. 136; Rafsky v. City of New York, 257 App. Div. 855; Smith v. City of Albany, 257 App. Div. 715; Garber v. Central School Dist. No. 1, 251 App. Div. 214; Fedearowicz v. City of Amsterdam, 268 App. Div. 803; Fritz v. City of Buffalo, 277 N. Y. 710; Schneider v. Village of Lake George, 280 N. Y. 507; Clayton v. City of Niagara Falls, 252 N. Y. 595; Hunt v. City of New York, 257 N. Y. 533; Applebaum v. Board of Educ. of City of N. Y., 297 N. Y. 763.) IV. Supervision requirements of a playground, park, beach or recreation center refer not only as to the physical condition of the equipment, but also to safeguarding the users against the acts of third persons.
      (Fritz v. City of Buffalo, 277 N. Y. 710; Hunt v. City of New York, 257 N. Y. 533; Lane v. City of Buffalo, 232 App. Div. 334; Smith v. City of Albany, 257 App. Div. 517; Shea v. City of New York, 265 App. Div. 962; Rafsky v. City of New York, 257 App. Div. 855; Landau v. City of New York, 180 N. Y. 48; Greiner v. City of Syracuse, 228 App. Div. 566, 256 N. Y. 688; McFadden v. Bancroft, 313 Mass. 56.)

      Patrick E. Gibbons and Boyce A. Wilson for respondent.
    The complaint was properly dismissed. (Miller v. Board of Educ., Union Free School, Dist. No. 1, 291 N. Y. 25; Govel v. Board of Educ. of City of Albany, 267 App. Div. 621; Kantor v. City of New York, 251 App. Div. 454; Lutsker v. Board of Educ. of City of N. Y., 287 N. Y. 822; Hoose v. Drumm, 281 N. Y. 54; Graff v. Board of Educ. of City of N. Y., 258 App. Div. 813, 283 N. Y. 574; Schubart v. Hotel Astor, 168 Misc. 431, 255 App. Div. 1012, 281 N. Y. 597; Curcio v. City of New York, 275 N. Y. 20; Whittaker v. Village of Franklinville, 265 N. Y. 11.)
   Conway, J.

This action is by an infant, through her father as guardian ad litem, for personal injuries, and by her father individually, for medical expenses and loss of services arising out of the alleged negligence of the defendant Village of Island Park. The cause came on for trial in the Supreme Court, Nassau County, before a jury. A verdict was rendered in favor of plaintiffs and a judgment entered thereon. On appeal the Appellate Division, Second Department, by a divided court, reversed the judgment on the law and dismissed the complaint.

The defendant village is a municipal corporation which, in July of 1950, owned and operated a beach area known as Island Park Beach Park. In the summer months the Beach Park was the regular meeting place of the children of the community and provided their main amusement. In addition to a bathing beach, the park contained such recreational facilities as a handball court, an area set aside for softball games, a dance floor and a high slide for children. During the summer season the park was open from 9:00 a. m. to 11:00 p. m. Between the hours of 9:00 a. m. and 6:00 p. m. nonresidents of the village were required to pay an admission fee whereas residents were admitted upon the presentation of season passes issued by the village board, upon the payment of prescribed sum, and during those hours the village employed lifeguards and a youth recreation director. At 6:00 p. m. the turnstiles were closed and two gates in the fence enclosing the park area were opened. Thereafter, until closing time the park was open, without charge, to all members of the public and, during the hours of darkness preceding 11:00 p. m., the area was illuminated by floodlights. There was a sign on the premises which read:

“ SWIMMING at OWN RISK After 6 p.m.

Beach Closed at 11 p. m.”

- Witnesses testified to the effect that on July 2, 1950, firecrackers had been exploded in the Beach Park on several occasions and that on the following day, while lifeguards were present on the beach, firecrackers had been discharged every once in a while.” One witness had complained of the fireworks to a lifeguard and, according to her testimony, no action was taken on the complaint. On the evening of July 3d, a swimming carnival had been held at the beach and was attended by two village trustees. During that evening the firecrackers, as described by one witness, were “ terrific ”. There was further testimony tending to establish that the use of firecrackers by visitors to the beach continued intermittently on July 4th from 5:00 p. m. on. At about 8:30 on the evening of that day plaintiff and several other girls went to the park to attend a prearranged beach party. While plaintiff was sitting on the beach a group of boys entered the park and proceeded to discharge firecrackers. That activity was carried on for fifteen or twenty minutes during which time a Roman candle was discharged. A second Roman candle was ignited and a flare emitted therefrom struck plaintiff’s left eye causing the injuries for which recovery is now sought.

Plaintiffs contend that defendant failed to provide adequate supervision of the Beach Park and to exercise reasonable care for the protection of its users. The defendant village recognizes that it was obliged to provide supervision during those hours when admission fees were charged but asserts that the duty terminated with the closing of the turnstiles at 6:00 p. m. and that it was under no obligation to suppress the activity which resulted in plaintiff’s injuries.

Our concern, then, is the nature of the duty, if any, owed to plaintiff by the defendant village.

It is well settled that regardless of whether or not it is a source of income the operation of a public park by a municipality is a quasi-private or corporate and not a governmental function. (Augustine v. Town of Brant, 249 N. Y. 198, 201-206; Whittaker v. Village of Franklinville, 265 N. Y. 11, 16.) Where a village thus undertakes to do more than is required of it as a governmental unit it assumes the burdens and liabilities concomitant therewith (see Augustine v. Town of Brant, supra, p. 206).

Of course, the duty owed by a private owner or occupier of land to an ordinary trespasser or bare licensee is merely to refrain from the infliction of willful and wanton injury. A private landholder need not maintain his property in a suitable condition for use by such persons. (Mendelowitz v. Neisner, 258 N. Y. 181, 184; see, also, Carbone v. Mackchil Realty Corp., 296 N. Y. 154; Zaia v. Lalex Realty Corp., 287 N. Y. 689; Meiers v. Koch Brewery, 229 N. Y. 10; Vaughan v. Transit Development Co., 222 N. Y. 79.)

However, it is clear that the duty of a municipality to those who have been invited to avail themselves of park facilities is more than that owed by a private landholder to a trespasser or licensee. Liability is imposed for failure to maintain a park in a reasonably safe condition. (Collentine v. City of New York, 279 N. Y. 119; Hunt v. City of New York, 257 N. Y. 533; Clayton v. City of Niagara Falls, 252 N. Y. 595.) The duty goes beyond the mere maintenance of the physical condition of the park. Although it has been held that strict or immediate supervision need not be provided, the municipality may be obliged to furnish an adequate degree of general supervision. (See Fritz v. City of Buffalo, 277 N. Y. 710; Curcio v. City of New York, 275 N. Y. 20, 24; Peterson v. City of New York, 267 N. Y. 204, 206.) That duty of supervision may require the regulation or prevention of such activities of park visitors as endanger others utilizing the park. Thus in Fritz v. City of Buffalo (supra), a municipality was held liable for injuries to a skater which resulted from his being struck by one of a group of skaters playing crack-the-whip ” — an activity which under the circumstances of that case was hazardous and unreasonable.

In short, the municipality which extends to its citizens an invitation to enter and use recreational areas owes to those accepting that invitation a duty of reasonable and ordinary care against foreseeable dangers. What degree of care is reasonable necessarily depends upon the attendant circumstances and is a jury question. ‘ ‘ Essentially, what is negligence in a given case is a question of fact. Each case depends upon its own peculiar circumstances. Decisions in other actions in which damages are sought for personal injuries furnish no criterion or guide for determination of what is or is not negligence in a particular case involving its own peculiar facts and circumstances. Under circumstances existing in one case the ordinary care required might not be the same as that required under other circumstances. Negligence arises from breach of duty and is relative to time, place and circumstance (Mink v. Keim, 291 N. Y. 300, 304). Ordinary care must be in proportion to the danger to be avoided and the consequences that might reasonably be anticipated from the neglect (Railroad Co. v. Jones, 95 U. S. 439; Bailey v. Central Vermont Ry., supra [319 U. S. 350]). It must be commensurate with known dangers.” (Sadowski v. Long Island R. R. Co., 292 N. Y. 448, 455, 456.)

It is not a prerequisite for the imposition of the foregoing duties that a municipality exact an admission fee from those using its parks. In Curcio v. City of New York (supra, pp. 23, 24) where there was no evidence that such a fee had been charged we declared “ The duty of exercising ordinary care required the defendant to provide an adequate degree of general supervision.” Recovery was denied there for the reason that the city was not derelict in the performance of that duty. In the subsequent cases of Fritz v. City of Buffalo and Collentine v. City of New York (supra) the presence or absence of an admission fee played no role.

The duty of supervision may not be confined only to those activities for which special facilities or equipment have been provided or to some particular activity, e.g., swimming, for which a park has been especially established. Where, a municipality undertakes to maintain an area for recreation in general some degree of supervision ought to be exercised to assure that the area is reasonably fit for that purpose. Under ordinary circumstances, the necessary degree of supervision of such an area may well be slight and may require no more than casual or periodic inspection. But when in the discharge of that duty it is or should be apparent or it otherwise comes to the attention of a municipality that its park is being used by visitors as a site for criminal and patently dangerous activities and that such use is likely , to be continued, we think that the municipality may not ignore the foreseeable dangers, continue to extend an invitation to the public to use the area and not be held accountable for resultant injuries.

The circumstances of this case are unusual. The injury here did not result from a danger inherent in the ordinary play of children. The Legislature has recognized that the unsupervised discharge of fireworks is so fraught with serious dangers that their possession or use, not in compliance with stringent requirements, has been made a crime. (Penal Law, § 1894-a.) On the basis of the .testimony which we have summarized at the outset a reasonable man might infer that the defendant village knew or should have known that firecrackers had been exploded on the Beach Park over a considerable period of time preceding the accident. A jury here drew such inference. That being so, there was reason for the village to believe that the illegal activities would continue and perhaps be increased on the day of plaintiff’s injuries. Independence Day — the day of the accident — has long been the occasion of pyrotechnic displays and the use of all manner of explosive and inflammable devices.

It may not be said as a matter of law that knowledge of the use of the Beach Park for the discharge of firecrackers was insufficient to apprise the defendant village that other types of fireworks might be fired there. Firecrackers and Roman candles fall within the generic term “ fireworks ” and both have customarily been used in celebrating the Fourth of July.

We do not think that the trial court erred in permitting the jury to find that the injury complained of resulted from the negligent failure of the defendant village to take appropriate measures for the prevention of injuries threatened by the foreseeable continuation of the ultrahazardous and criminal activity known to be carried on in the Beach Park. Reasonable men could entertain the view that, without supervision adequate to cope with the dangers known to exist, the invitation to use the Beach Park should not have been extended after 6:00 p. m.

Furthermore, where activities pregnant with danger are engaged in with the frequency we find here, it may justifiably be said that the condition of the village park was unsafe. Liability would then ensue just as in Collentine v. City of New York, Clayton v. City of Niagara Falls, and Hunt v. City of New York (supra).

In Whittaker v. Village of Franklinville (supra) recovery was denied to a person injured, while on a public thoroughfare, by the discharge of fireworks in an adjacent park. However, that case is not controlling here. Since then the Legislature has declared the discharge of fireworks to be unlawful and the infant plaintiff here was injured while within the park under an express or implied invitation. We do not think a municipality may with impunity induce unwitting citizens to seek recreation in a place which it knows to be the situs of criminal and dangerous activities.

The judgment of the Appellate Division should be reversed and the case remitted to that court for determination upon the questions of fact, if any, raised in that court, with costs in this court and in the Appellate Division to abide the event.

Lewis, J.

(dissenting). My dissent is prompted by the belief that the decision about to be made extends, beyond the present bounds of decisional law in this jurisdiction, the legal duty of municipalities in the care of public parks.

Upon the facts of record — fairly stated in the opinion by Judge Conway — I do not think it can be said that the defendant village failed to exercise the standard of care it owed to the infant plaintiff in the maintenance of Beach Park. That standard of care required of the defendant that it use reasonable means to protect the infant plaintiff from all dangers known by it or reasonably to be foreseen. That requirement included a duty to maintain the premises comprising Beach Park and the equipmént there installed, in safe repair so as to prevent injury resulting from a defective condition existing on the property. (Curcio v. City of New York, 275 N. Y. 20, 23-24; Peterson v. City of New York, 267 N. Y. 204, 205-206.) There is also impressed upon the village the legal duty to protect or warn against the presence on the beach of facilities which by their nature are likely to be a danger or risk to human life or safety. (Clayton v. City of Niagara Falls, 252 N. Y. 595; Fedearowicz v. City of Amsterdam, 293 N. Y. 814; Riggi v. Village of Le Roy, 301 N. Y. 735.) Thus the maintenance by a municipality of a public beach with facilities thereupon which are unsafe either because of their nature or their defective condition, without adequate protection or warning, constitutes actionable negligence.

However, the case at hand does not fall within the rule last stated above. Here, the plaintiffs did not attempt to plead, nor was there proof that Beach Park or any equipment there maintained by the village was unsafe or defective. The injuries suffered by the infant plaintiff were in no wise related to the nature or condition of the beach or of facilities there existing. The infant plaintiff was injured by a firework brought onto the beach by a third person and discharged there in violation of law. (Penal Law, § 1894-a, subd. 2.) The defendant’s only connection with the accident was as owner of the premises upon which the accident occurred.

I am unable to concur with the view of a majority of the court that a municipality, as owner and maintainer of park land, may be held liable for personal injuries to a user of the park which did not result from a defect in, or danger from equipment or facilities, but occurred as a result of an illegal, careless act of a third person unrelated to the status of the park property, and in the absence of proof that the injury suffered was a risk reasonably to be foreseen. The defendant village is not a guarantor of the safety of its Beach Park. Its duty is limited to reasonable care against foreseeable danger. The plaintiffs have failed by their evidence to prove notice to the defendant village sufficient to create liability for the injury which befell the infant plaintiff resulting from the act of one coming onto the beach in unlawful possession of fireworks.

Accordingly, I dissent and vote to affirm the judgment entered upon the order of the Appellate Division.

Loughban, Oh. J., Desmond and Froessel, JJ., concur with Conway, J.; Lewis, J., dissents in opinion in which Dye and Fuld, JJ., concur.

Judgment reversed, etc.


text:
    In the Matter of Joseph A. Manning et al., Respondents, against Lazarus Joseph, as Comptroller of the City of New York, Appellant.
    Argued May 26, 1952;
    decided July 15, 1952.

      Denis M. Hurley, Corporation Counsel (Alfred Weinstein, Seymour B. Quel and Howard C. Fischbach of counsel), for appellant.
    I. Since petitioners failed to review the determination of August 8, 1947, they are bound by it. Their failure to review precludes their claim to the benefits of the new determination made as the result of the review brought by another. A contrary holding would, in effect, subvert the Statute of Limitations. (Campbell v. City of New York, 291 N. Y. 461; Matter of Heaney v. McGoldrick, 286 N. Y. 38; Cirillo v. City of New York, 170 Misc. 230, 259 App. Div. 717, 287 N. Y. 641; Nolan v. New York City Housing Authority, 199 Misc. 599; Matter of Hoof v. McGoldrick, 295 N. Y. 214; Schultz v. United States Fidelity & Guar. Co., 201 N. Y. 230; St. John v. Andrews Inst., 192 N. Y. 382.) II. The release literally covered the instant claims, and there was no evidence that the parties had a contrary intention. (Simon v. Simon, 274 App. Div. 447; Matter of Barbarita v. Board of Estimate, 83 N. Y. S. 2d 854, 276 App. Div. 751, 301 N. Y. 529; Pimpinello v. Swift & Co., 253 N. Y. 159; Matter of Stone, 272 N. Y. 121; Kirchner v. New Home Sewing Mach. Co., 135 N. Y. 182; Barker v. Conley, 267 N. Y. 43.) III. The general releases given by petitioners bar recovery. (McKibbin v. City of New York, 182 Misc. 671, 269 App. Div. 696, 295 N. Y. 592; Evadan Realty Corp. v. Patterson, 192 Misc. 850, 276 App. Div. 751; Estro Chemical Co. v. Falk, 303 N. Y. 83; People ex rel. McLaughlin v. Board of Police Comrs. of City of Yonkers, 174 N. Y. 45; Ryan v. City of New York, 177 N. Y. 271; Matter of Dinan v. Patterson, 193 Misc. 92, 275 App. Div. 801; Nolan v. New York City Housing Authority, 199 Misc. 599; Wright v. State of New York, 223 N. Y. 44; New York Public Lib. v. City of New York, 275 App. Div. 307, 300 N. Y. 726; Matter of Giannettino v. McGoldrick, 295 N. Y. 208.)

      Sidney A. Fine and Morris Weissberg for respondents.
    I. Pursuant to subdivision 8 of section 220 of the Labor Law, petitioners, as complainants who filed verified complaints, were parties to the statutory wage rate proceeding before the comptroller, until he made a final determination and final order therein on March 23, 1950. (Matter of Gaston v. Taylor, 274 N. Y. 359; Matter of Heaney v. McGoldrick, 286 N. Y. 38; Campbell v. City of New York, 291 N. Y. 461; Matter of Carder Realty Corp. v. Andrews, 239 App. Div. 618; Matter of Winburn, 270 N. Y. 196; Matter of Union Trust Co. [Detmold], 219 N. Y. 537; Croker v. Williamson, 208 N. Y. 480; Altman v. Hofeller, 152 N. Y. 498; Union Trust Co. v. Cole, 198 App. Div. 539.) II. The releases executed by petitioners on April 5, 1948, were given for and upon payment to petitioners of the difference in wages admittedly due them under the comptroller’s determination of August 8, 1947, fixing wage rates without shift differentials. Such releases were not intended by either party to affect petitioners’ claims to “ shift differentials ” for night and Sunday work, and any such application of said releases would be without consideration, against public policy, and prohibited by subdivision 8-a of section 220 of the Labor Law. (Matter of Giannettino v. McGoldrick, 295 N. Y. 208; Matter of Barbarita
      v. Board of Estimate, 83 N. Y. S. 2d 854, 276 App. Div. 751, 301 N. Y. 529; Matter of Rumsey Mfg. Corp. [Corsi], 296 N. Y. 113; Dixon v. New York Trap Rock Corp., 293 N. Y. 509; Pitt v. Board of Educ. of City of N. Y., 216 N. Y. 304; McMahon v. Mayor of City of N. Y., 22 App. Div. 113.)
   Per Curiam.

Petitioners, ninety-three in all, are stationary engineers (electric) employed in various departments -and agencies of the city of New York. They seek additional compensation, pursuant to the prevailing rate of wages under section 220 of the Labor Law, for work performed on late shifts and on Sundays between January 14,1944, and May 22,1947. We agree with the courts below that the reversal (Matter of Smith v. Joseph, 275 App. Div. 201, affd. 300 N. Y. 516) of the comptroller’s original 1947 determination, excluding these shift differentials, inures to the benefit of all the stationary engineers who filed complaints in that original proceeding, and whose interests were united with those of the person appealing, even though they did not appeal. They are definitely persons affected by the final determination. However, that issue is not dispositive of the instant case.

We are constrained to hold that the releases executed by petitioners in 1948 following the 1947 comptroller’s determination preclude their recovery of the additional compensation during the aforesaid period for Sunday and night work, awarded as the result of the judicial review of said original determination. In addition to the customary language of a general release, the instruments expressly recited the waiver of a particular claim ‘1 by reason of services heretofore rendered by me as an employee of The City of New York, and more particularly by reason of any claim for difference in wages heretofore received by me ” during the period in question. It would be difficult to employ clearer language to bar the claims of petitioners with respect to the shift differentials sought herein. To hold otherwise would be to render the releases quite meaningless.

Petitioners had consulted with and received the approval of their attorney before signing the releases. They were executed in the light of the proceedings terminating in the original 1947 determination. The minutes of the May 9, 1947, hearing con-elusively establish that at the time of their execution, petitioners were aware of the controversy in regard to shift differentials, inasmuch as they had made specific claim thereto, and their attorney, who represented them throughout the litigation, took exception to the comptroller’s adverse ruling.

We see no merit to petitioners’ contentions that the releases are against public policy and prohibited by subdivision 8-a of section 220 of the Labor Law, which merely deals with a failure to protest and not with a solemn release duly executed and acknowledged under circumstances as here presented (cf. Civil Service Law, § 8-a). Matter of Dinan v. Patterson (193 Misc. 92, affd. 275 App. Div. 801). Nor would they fail for lack of consideration (Debtor and Creditor Law, § 243). Payment by the comptroller prior to the final determination (see Labor Law, § 220, subd. 8) in settlement of a known but undetermined controversy constitutes a valid consideration.

The orders of the Appellate Division and Special Term should be reversed and the petition dismissed, with costs in all courts.

Loughran, Ch. J., Lewis, Desmond, Dye, Fuld and Froessel, JJ., concur; Conway, J., not sitting.

Orders reversed, etc. [See 304 N. Y. 947.]


author: Lewis, J.

text:
    Solicitor for the Affairs of His Majesty’s Treasury, Appellant, v. Bankers Trust Company, Respondent.
    Argued April 16, 1952;
    decided July 15, 1952.

      Howard T. Milman, Eustace Seligman and Henry N. Ess, III, for appellant.
    I. A defendant who invokes section 51-a of the Civil Practice Act drops out of the action. (Osborne v. Banco Aleman-Antioqueno, 176 Misc. 664; Koninklije Lederfabriek “Oisterwijk” N. V. v. Chase Nat. Bank, 177 Misc. 186, 263 App. Div. 815; Standard Oil Co. v. New Jersey, 341 U. S. 428; Security Bank v. California, 263 U. S. 282; Terry v. Southwestern Bldg. Co., 43 Cal. App. 366; Bassett v. Leslie, 123 N. Y. 396; Carter v. Thornton, 93 F. 2d 529; Union Pac. R. Co. v. Belek, 211 F. 699; American Sur. Co. of N. Y. v. Ryan, 185 La. 678; Waples v. Police Beneficiary Assn., 156 Pa. Superior Ct. 592.) II. The language of section 51-a compels the conclusion that a defendant invoking its protection and depositing the fund in court becomes a disinterested party to the action. III. Defendant’s answer is not justified by the claimed hazard of double liability. (Hughes v. Fetter, 341 U. S. 609; Davis v. Mills, 194 U. S. 451; Zimmermann v. Sutherland, 274 U. S. 253.) IV. The mere possibility that some foreign jurisdiction might entertain a subsequent suit by Mrs. Maitland-Tennent will not be recognized by the New York courts as constituting a hazard of double liability.

      Chester Bordeau, James Bruce and Haliburton Fates, II, for respondent.
    I. Section 51-a of the Civil Practice Act is a Statute of Limitations. II. Defendant has a right to answer. (Scheffer v. Erie Co. Sav. Bank, 229 N. Y. 50.) III. Plaintiff’s contention that section 51-a extinguishes the claim of the adverse claimant is unsound. (Hanna v. Stedman, 230 N. Y. 326; N. Y. Life Ins. Co. v. Dunlevy, 241 U. S. 518; Federal Motorship Corp. v. Johnson

      & Higgins, 192 Misc. 401, 275 App. Div. 660.) IV. Defendant’s right to answer is unaffected by the running of a Statute of Limitations against one claimant to the fund. (Ramsden v. Knowles, 151 F. 721; Equity Corp. v. Groves, 53 A. 2d 505 [Del.]; Warner v. Buffalo Drydock Co., 67 F. 2d 540, 291 U. S. 678; State v. Porter, 21 Cal. 2d 45, 318 U. S. 757; Johnson v. Albany & Susquehanna R. R. Co., 54 N. Y. 416; House v. Carr, 185 N. Y. 453.) V. The purported tender of a bond is immaterial in this proceeding. (Community Volunteer Fire Co. v. City Nat. Bank, 171 Misc. 1027; Back v. Bowery Sav. Bank, 162 Misc. 403.) VI. Mrs. Maitland-Tennent has not voluntarily surrendered her claim. VII. The defenses interposed are meritorious. (Segal v. National City Bank of N. Y., 269 App. Div. 986; Curry v. Mackenzie, 239 N. Y. 267; Bollack v. Société Generale, 263 App. Div. 701, 293 N. Y. 652; Halsey v. Bank of N. Y. & Trust Co., 270 N. Y. 134; Stuyvesant Credit Union v. Manufacturers Trust Co., 239 App. Div. 187; Bercholz v. Guaranty Trust Co. of N. Y., 179 Misc. 778; Schwartz v. Schwartz, 190 Misc. 757; Merilaid & Co. v. Chase Nat. Bank, 189 Misc. 285; Plesch v. Banque Nationale de la Republique d’Haiti, 273 App. Div. 224, 298 N. Y. 573.) VIII. Mrs. Maitland-Tennent is an indispensable party. (Republic of China v. American Express Co., 95 F. Supp. 740; Gallopin v. Winsor, 234 App. Div. 601; Ezra v. Lamont, 149 Misc. 912, 265 N. Y. 635.)
   Lewis, J.

On March 11,. 1947, there became effective in the United Kingdom the Exchange Control Act, 1947 (10 & 11 Geo. 6, ch. 14), pursuant to which persons resident in the United Kingdom (with exceptions not here material) were required on October 1, 1947 — in accord with a Treasury order authorized by section 2 of said act — to exchange for the equivalent in pounds sterling, certain enumerated foreign currency, including United States dollars. On that date Margaret Louisa Maitland-Tennent, a British national residing at Cammo House, Cramond Bridge, Midlothian, Scotland — to whom it will be convenient to refer as Mrs. Maitland-Tennent — had on deposit in a demand account with the defendant, Bankers Trust Company, in New York City, a sum which exceeded $117,000. Following failure by Mrs. Maitland-Tennent to comply with official demand made upon her under the Exchange Control Act that she exchange for pounds sterling the credit balance of American dollars in her account in the defendant bank, and in accord with provisions of that act, the Treasury of the United Kingdom, by a vesting order dated June 27,1949, took action which — according to the complaint herein — vested in His Majesty’s Treasury the balance of her account then on deposit with the defendant. Thereafter the Treasury assigned its right to such funds to the Solicitor for the Affairs of His Majesty’s Treasury, the plaintiff herein. Claiming ownership — by virtue of such vesting order — of funds in the name of Mrs. Maitland-Tennent then on deposit with the defendant, the plaintiff Solicitor made a demand upon the defendant for payment. Upon refusal of such demand the plaintiff, on November 14, 1949, instituted the present action in the Supreme Court, New York County, to recover from the defendant all funds then standing to the credit of such depositor.

Upon being served with the complaint in this action the defendant endeavored by various means to communicate with Mrs. Maitland-Tennent. Unsuccessful in those efforts, the defendant, on November 25, 1949, moved at Special Term of the Supreme Court for an order permitting it to serve upon its depositor a notice pursuant to section 51-a of the Civil Practice Act, informing her that pursuant to that statute her right to intervene in the present action, or to commence an independent suit to enforce her claim to the funds involved herein, was limited to one year and ten days from the date of said notice. That motion was opposed by the plaintiff Solicitor who made a cross motion for an order requiring defendant to furnish either a bond in amount to be fixed by the court or that defendant pay such amount into court. Ón February 27, 1950, a Special Term order was entered permitting the defendant to send by registered mail to Mrs. Maitland-Tennent a notice in form prescribed by section 51-a of the Civil Practice Act, and requiring in addition that defendant either post a bond in an amount equal to the balance of her deposit or pay such amount into court. (197 Misc. 381.) In accord with that order the defendant paid into court an amount equal to such balance. Thereafter the. defendant’s time to answer' the complaint herein was extended by stipulation until after the expiration of the stay of one year for which provision was made ten days after the notice to Mrs. Maitland-Tennent was mailed.

In due time the defendant interposed herein an amended answer containing denials of knowledge or information as to certain material allegations of the complaint and, as complete and partial defenses, alleged upon information and belief that Mrs. Maitland-Tennent was entitled to be paid in the United Kingdom such sum in sterling as she would have received if she had sold the dollars to an authorized dealer pursuant to the Exchange Control Act and that nothing had yet been paid to her; that the aforesaid sum in sterling was less than the true value of the dollars and that the alleged vesting thereof was confiscatory and contrary to public policy of the United States and of the State of New York and accordingly was void and of no effect in the State of New York. In addition the defendant’s answer alleges upon information and belief, as a complete defense, that the sum in question, which defendant has paid into court pursuant to court order, is the property of Mrs. Maitland-Tennent who is still living and is an indispensable party to this action and has not been joined as a defendant herein.

Thereafter, the plaintiff moved at Special Term to strike the defendant’s answer upon thejollowing grounds, among others: that Mrs. Maitland-Tennent, during the year following her receipt of notice given to her by the defendant pursuant to section 51-a of the Civil Practice Act, had failed to intervene herein or to make claim by suit or otherwise to the funds on deposit in the defendant bank; that she is not an adverse claimant to the funds comprising such deposit and has no right to interpose a claim or defense in the present action and that the defendant has no right to interpose a claim or defense in her behalf.

At Special Term plaintiff’s motion to strike defendant’s answer was denied. (200 Misc. 383.) At the Appellate Division, where the order of Special Term was affirmed, one Justice dissenting (279 App. Div. 565), leave to appeal to this court was granted and the following question was certified: ‘ ‘ Did the Special Term err as a matter of law in denying plaintiff’s motion to strike defendant’s answer? ”

As the scope of our review is limited to the question thus certified (Matter of McDonald, 211 N. Y. 272, 276; Gregoire v. G. P. Putnam’s Sons, 298 N. Y. 119, 125; Cohen and Karger, Powers of the New York Court of Appeals, p. 363), we note at the outset that the relation of the defendant bank to Mrs. Maitland-Tennent, as its depositor, is that of debtor and creditor, with all the legal implications that relationship connotes. (Matter of Delaney, 256 N. Y. 315, 319; Baldwin’s Bank v. Smith, 215 N. Y. 76, 82.) That elemental legal relationship, when considered with the fact of record herein that the plaintiff Solicitor brings this action as assignee of the Commissioners of His Majesty’s Treasury, an agent of a foreign sovereign — without having made an effort either to sue or to interplead Mrs. Maitland-Tennent — makes applicable a statement by Judge Cardozo, as he then was, writing for this court in Scheffer v. Erie Co. Sav. Bank (229 N. Y. 50, 53-54): “ The defendant is in the same position as any other debtor of whom payment is demanded by one who asserts a title as assignee. It pays at its peril * * * but so does any other debtor responding to a like demand * * *. If it doubts the assignment, and finds an adverse claimant, it may compel the claimants to interplead, and fight their battle between themselves * * *. If it is unwilling to interplead, or if the adverse claimant is not found, it must put the plaintiff to the proof, and wage the contest as it can.” (Emphasis supplied.) In the present case where Mrs. Maitland-Tennent, an adverse claimant (§ 51-a, subd. 5), has made no response to the statutory notice served upon her, the defendant. bank by interposing its answer has chosen to “ * * * put the plaintiff to the proof, and wage the contest as it can.” By doing so we think — in the circumstances disclosed by this record — the defendant is within its legal rights.

The enactment of section 51-a of the Civil Practice Act (L. 1939, ch. 805) was prompted by the existence of unsettled political conditions in Europe and the Orient at a time when business enterprises owned by political refugees were taken over by foreign liquidators appointed by their governments. In the confusion which followed there were instances where both refugees and liquidators made claim against New York businessmen, banks or insurance companies for the same debt. In those circumstances such New York debtors could not safely pay either claimant without a judicial determination of the question as to which claimant was entitled to be paid. (See Circular, No. 50, pp. 147-148 [1939] by Henry S. Fraser, Legislative Reporter, of New York State Bar Assn.; Association of Bar of City of New York, Yearbook, 1939, pp. 234-235.)

As to whether Mrs. Maitland:Tennent may be considered in any sense a party to the present action it is to be noted that the United States Supreme Court in Pennoyer v. Neff (95 U. S. 714, 724-727) and this court in Hanna v. Stedman (230 N. Y. 326, 335) have ruled that a debt is not a res which serves as a basis constitutionally to empower a court to adjudicate a creditor’s rights in an action in rem. Action to enforce payment of a debt is an action in personam which requires jurisdiction over the person of the parties, obtainable — where the person involved is not a resident of the State of the forum — either by personal service upon him in the jurisdiction of the forum or by his voluntary appearance in the action. In the case at hand not only is there lacking proof of personal service upon Mrs. Maitland-Tennent in this jurisdiction, or a voluntary appearance by her in this action, but no service of process of any kind has been made upon her. In other words, no attempt has been made to make her a party to this action. Section 51-a provides only for the giving of notice of the pendency of the action and of rights incident to the receipt of such notice. Indeed the notice in the present case went no further than to inform Mrs. Maitland-Tennent that unless she intervened in this action, or instituted a separate action to enforce her claim within one year and ten days from the date of the notice she would lose her right to enforce such claim in the courts of New York.

Found, as it is, in article 2 of the Civil Practice Act, which bears the title “ Limitations of Time ”, section 51-a is nothing more than a Statute of Limitations, the effect of which outside the jurisdiction of New York is questionable. (See article on New York Interpleader Statutes, by Professor Louis R. Frumer, 25 N. Y. U. L. Rev. 737, 803 [1950].) True it is that, as a Statute of Limitations, section 51-a is effective, after the period prescribed therein, to bar any claim by Mrs. Maitland-Tennent in New York. We conclude, however, that it has no adverse effect upon the right of the defendant, in the circumstances which prompted the pending action, to file an' answer and contest the claim of the plaintiff. (See Prashker on New York Practice, § 289, pp. 335-336.)

As bearing upon the inquiry presented by the question certified to us, the plaintiff argues in support of its motion to strike the defendant’s answer that, having paid into court the funds in suit, the defendant is no longer a party to this action and, in any event, has no remaining interest in the litigation. That result, we are told, follows from language found in section 133 of the Civil Practice Act: “ A party bringing money into court pursuant to the direction of the court is discharged thereby from all further liability to the extent of the money so paid in. ’ ’ Agreeing, as we do, with the view of the learned Justice at Special Term, that section 133 id. is not applicable to the present case, we find in section 51-a language which leads us to conclude that the omission by the Legislature of any provision for the discharge of a defendant to the extent of the amount paid into court, was intentional. In that connection we think it significant that, although sections 286, 287 and 287-d of the Civil Practice Act — wherein is set forth procedure applicable to proceedings in actions of interpleader — make provision for the discharge of the party who has paid money or has delivered personal property into court, section 51-a contains no provision that where, as in the present case, the defendant has paid into court the amount “ fixed by the court ”, it is thereby discharged from further liability. Thus, in authorizing the granting of a stay not to exceed one year from the date the statutory notice is given to the claimant, subdivision 3 of section 51-a provides:

‘ ‘ The stay as herein provided shall be vacated and the undertaking, if any has been given, may be discharged or modified, or the sum deposited remitted in whole or in part, as justice may require, upon proof to the court by any party to the said action that the said claimant has intervened therein or has instituted another action in any court of this state to recover the said sum of money or any part thereof exceeding fifty dollars in amount.

An application for any relief as prescribed in this section must be made on notice to all other parties to the action.”

We read the language last quoted above as indicating a legislative intent that, upon proof that the claimant on whom notice has been served has either intervened or started an independent action to recover the fund in suit, the defendant which has paid the money into court pursuant to a court order, is not to be discharged but thereafter, as a “ party to the said action ”, may apply for remission, in whole or in part, of the fund deposited. In those circumstances it is not reasonably to be expected that the plaintiff would make the application for remission of the funds paid into court. As the statute refers to the application for remission as one to be made by any party to the said action ” the Legislature could not have intended thereby to authorize such application only by an intervening claimant. The legislative intent, we think, is manifest that the party making the deposit remains a party to the action and, under conditions specified in the statute, may apply for remission of all or part of the sum paid into court. Furthermore, it would seem that, inasmuch as the statute does not require the amount of the bond or of the sum paid into court to be the amount for which suit is brought, but only such amount as may be fixed by the court ”, the legislative purpose was security — to protect the plaintiff against change in circumstances which might occur during the period of the stay to cause the defendant to become financially irresponsible.

Additionally, we suggest that if, as plaintiff argues, the present defendant lost its status as a party to this action immediately upon paying into court the amount “ fixed by the court ”, .the plaintiff, in the absence of Mrs. Maitland-Tennent as an adverse claimant, would thereupon become entitled to the entire fund for which the action was instituted without having proved its right thereto. We do not believe the Legislature so intended.

Likewise, we are unable to agree with the plaintiff’s contention that the law governing interpleader applies to the present case and results in denying to the defendant — which has deposited in court the fund in question — the right to contest plaintiff’s title thereto. / In actions of interpleader contesting claimants' are made parties, and thus — as parties — they are in a position to protect their own rights. However, section 51-a does not contain provisions which would result in making of an adverse claimant a party to the suit unless such claimant by some voluntary action becomes a party. When, as in the present case, an adverse claimant is without the jurisdiction of the court, no process, as we have seen, may constitutionally be invoked to make her — against her will — a party to this action which, in character, is in personam. In actions of interpleader there may he no reason for a disinterested stakeholder to remain a party, for all adverse claimants are made parties and are thus in a position to protect their rights, whereas, in an action in which section 51-a is invoked, all adverse claimants may not be parties and there is obvious reason why the stakeholder should remain as a party to the action, not only to put the plaintiff to proof of his right to the fund he claims, but also to permit the defendant to fend against the hazard of double liability.

That hazard of double liability is especially pertinent in the present case, where it appears of record that the defendant has funds on deposit in banks in sixteen States outside the State of New York. Although some of those States have borrowing statutes ” under which, in prescribed circumstances, Statutes of Limitation of other jurisdictions may be applied, there are six States where such statutes are not in effect. It follows that, in at least six jurisdictions foreign to New York, the defendant is vulnerable to suit by Mrs. Maitland-Tennent, its depositor-creditor.

We find no legal basis for striking the defendant’s answer, which action would deprive the defendant of the right in this jurisdiction to defend on the merits and thereby put the plaintiff to the proof ”, and would weaken the defendant’s position in possible suits by its depositor-creditor in one or more of six foreign jurisdictions.

Accordingly, the order should be affirmed, with costs. The certified question should be answered in the negative.

Loughran, Ch. J., Conway, Desmond, Dye and Froessel, JJ., concur; Fulb, J., dissents and votes to reverse and answer the question certified in the affirmative on the grounds set forth in the dissenting opinion of Justice Sheentag at the Appellate Division.

Order affirmed, etc.

       Insofar as material the Civil Practice Act (§ 51-a) provides as follows:

        “ § 51-a. Action to be commenced within one year after notice. 1. No action for the recovery of any sum of money due and payable under or on account of a contract, or for any part thereof, shall be commenced by any person who has made claim to said sum, after the expiration of one year from the giving of notice, as hereinafter provided, to the said claimant that an action commenced by another person is pending to recover said sum or any part thereof exceeding fifty dollars in amount. The limitation herein prescribed shall not be construed to enlarge the time within which the cause of action, if any, of the said claimant would otherwise be barred.

        “ 2. If any person shall make claim for the recovery of any sum of money due and payable under or on account of a contract, and an action has theretofore been, or shall thereafter be, commenced by another person to recover the said sum or any part thereof exceeding fifty dollars in amount, the defendant in such action may, within twenty days from the date of service upon him of the complaint therein, or within twenty days from the date of receipt by him of said claim, whichever shall occur later, make application to the court in which the said action is pending, upon notice to the plaintiff, for an order permitting the defendant to give notice to the said claimant that such action is pending. The court in which such action is pending must grant such order where it appears that a person not a party to the action has made claim against the defendant for the said sum of money or a part thereof exceeding fifty dollars in amount; that the said action was brought without collusion between the defendant and the plaintiff therein; and that the said claimant cannot, with due diligence, be personally served with process within this state. Such order shall provide, among such other terms and conditions as justice may require, that notice shall be given to the said claimant by sending by registered mail a copy of the summons and complaint in such action and the said order and notice addressed to the said claimant at his last known address. The notice, as herein prescribed, shall be in substantially the following form:
      “ ' To....................: Notice is hereby given to you pursuant to an order of the....................Court:....................County, dated the.................... day of.................... 19..., that an action has been commenced against the undersigned and a summons and complaint served therein, a copy of each of which is enclosed herewith. The plaintiff in said action seeks to recover a sum of money to which you have made claim. The said sum exceeds fifty dollars and is alleged to be due and payable under or on account of a contract. Your right to commence an action to enforce your claim to the said money or to intervene in the said pending action is, pursuant to Section 51-a of the Civil Practice Act of the State of New York, limited to one year and ten days from the date of said order. Nothing contained in this notice shall be construed to enlarge the time within which your cause of action, if any, would be barred if this notice had not been given.’

        “ In the event that registration of mail directed to any country or part thereof shall be discontinued or suspended, notice to a claimant whose last known address is within such country or part thereof, as the ease may he, shall be given by ordinary mail, under such terms and conditions as the court may direct.

        “ Proof that such notice has been mailed shall be filed within ten days from the date of the order; otherwise the order becomes inoperative. Upon such filing, notice as herein prescribed shall be deemed to have been given on the tenth day after the date of such order.

        “ 3. Upon proof by affidavit or otherwise, to the satisfaction of the court, that an action is pending therein for the recovery of any sum of money due and payable under or on account of a contract, and that some person not a party to the action, without collusion with the defendant in the said pending action, has claimed or demanded the said sum of money or any part thereof, exceeding fifty dollars in amount, and that the defendant in said action has given due notice to the claimant, as hereinbefore prescribed, that such action is pending, the court shall make an order staying further prosecution of the said action for a period not to exceed one year from the date when said notice shall have been given to the said claimant.
      “At the time of the granting of such order or at any time thereafter, the court, upon the application of any party, must, as a condition of the granting of the said order or its continuation, as the case may be, impose upon the defendant such terms as justice may require as to the furnishing of an undertaking in an amount to be fixed by the court, or in lieu thereof the payment into court of such a sum. '
      “ The stay as herein provided shall be vacated and the undertaking, if any has been given, may be discharged or modified, or the sum deposited remitted in whole or in part, as justice may require, upon proof to the court by any party to the said action that the said claimant has intervened therein or has instituted another action in any court of this state to recover the said sum of money or any part thereof exceeding fifty dollars in amount.
      “An application for any relief as prescribed in this section must be made on notice to all other parties to the action. * * *
      “5. Whenever an action has been commenced for the recovery of any sum of money due and payable under or on account of a contract and the records of the defendant therein show that (1) a person other than the plaintiff, or (2) a person appearing thereon to be a deputy, officer or agent of the plaintiff, has the right, exclusive of other deputies, officers or agents of the plaintiff, to demand, sue for and recover the same sum of money or any part thereof exceeding fifty dollars in amount, either in his own name, on his own behalf, or as the authorized deputy, officer or agent for the plaintiff, and the defendant has received no notice of transfer, revocation, or other change in right or authority acceptable to it, the person so appearing on the said records gfiall be deemed to have made an adverse claim to the said sum of money or any part thereof and may be treated for the purpose of the pending action as an adverse claimant.”