text:
    Farbro Corporation, Respondent, v. A. F. A. Realty Corporation, Appellant, Impleaded with Others.

      (Argued October 11, 1932;
    decided January 10, 1933.)

      Warren M. Caro and Hugo Hirsh for appellant.
    Section 586 of the Civil Practice Act had no application to the appeal taken to the Court of Appeals in the specific performance action. (Gentilala v. Fay Taxicabs, Inc., 243 N. Y. 397; Faber v. Hanbury, 159 App. Div. 59.) The lis pendens filed by defendant-appellant in support of its counterclaim was never canceled, but was in force and effect at the time plaintiff’s grantors took title. (Hermann v. Ludwig, 227 N. Y. 632; Jackson v. Smith, 154 App. Div. 883; Taylor v. N. Y. Life Ins. Co., 209 N. Y. 23; Finch v. Forster Co., 233 N. Y. 619; Hayden v. Florence Sewing Machine Co., 54 N. Y. 21; Stuart v. Coleman, 78 Okla. 81; Wright v. Roberts, 55 Hun, 610; Puget Sound v. Tacoma, 217 Fed. Rep. 265; Kirkland v. Trott, 75 Ala. 321; Carr v. Cates, 96 Mo. 271; Madden v. Lennon, 23 Misc. Rep. 79; Breen v. Lennon, 10 App. Div. 36; Witteman

      Bros. v. Forman Bottling Co., 178 App. Div. 674; Beman v. Todd, 124 N. Y. 114; St. Regis Paper Co. v. Santa Clara Lumber Co., 62 App. Div. 538; Mills v. Bliss, 55 N. Y. 139; Whalen v. Stuart, 123 App. Div. 446; 194 N. Y. 495; Fitzsimmons v. Drought, 15 App. Div. 413; Slater v. Granneman, 124 App. Div. 98.) The lis pendens was never canceled in the sole manner provided for such cancellation by the provisions of the Civil Practice Act. (Hartwell v. Riley, 47 App. Div. 154; Wilson & Co. v. Banque Francaise du Maxique, 124 Misc. Rep. 690; Manhattan Co. v. Laimbeer, 108 N. Y. 578; Mutual Life Ins. Co. v. Oake, 187 N. Y. 257; People ex rel. Simmons v. Dowling, 84 Misc. Rep. 201; 164 App. Div. 911.)

      Charles H. Street for respondent.
    Section 586 of the Civil Practice Act was applicable to the appeal taken to the Court of Appeals in the specific performance action. (Bloomgarden v. Hoffman (116 App. Div. 719; Archer v. Equitable Life Assur. Soc., 218 N. Y. 18.) The prior owners and their grantee, the plaintiff in the present action, were purchasers for value and in good faith, within the meaning of the amended remittitur of the Court of Appeals, and section 586 of the Civil Practice Act. (Nugent v. Jacobs, 103 N. Y. 125; Valentine v. Austin, 124 N. Y. 400; Goldberg v. McCord, 251 N. Y. 28.) As the lis pendens filed by the defendant-appellant in the specific performance action had been canceled before the prior owners contracted to purchase the property, it was unnecessary to procure an order canceling the same under section 586 of the Civil Practice Act. (Dwight v. Gibb, 208 N. Y. 153; Silverstein v. Standard Accident & Ins. Co., 221 N. Y. 332; Waldo v. Schmidt, 200 N. Y. 205; Crouse v. McVicker, 207 N. Y. 213; Corn Exchange Bank v. Blye, 119 N. Y. 417.)
   Lehman, J.

In 1926 Nathan Cohen, a defendant in this action, brought an action against the defendant A. F. A. Realty Corporation for specific performance of its contract for the purchase of a parcel of real property in the county of Nassau. The defendant interposed an answer, in which it set up a counterclaim for the return of $8,000 which it had paid on account of the purchase price, and asked that it be adjudged to have a lien upon the premises for the said sum of $8,000, with interest, and that said lien be foreclosed and the premises sold to satisfy the hen. The defendant then filed a notice of pendency of action, as permitted by section 125 of the Civil Practice Act.

After a trial at Special Term, judgment was rendered in favor of the defendant A. F. A. Realty Corporation dismissing the complaint and granting the rehef prayed for in the counterclaim. Upon appeal that judgment was reversed by the Appellate Division, and judgment of specific performance was directed in favor of the plaintiff in that action.

The defendant in that action appealed to this court. Before the appeal was argued the owner of the real property sold it to a stranger, and title had passed to the Farbro Corporation. The owner, by voluntary conveyance to a stranger, had made specific performance impossible of the original contract of sale. For that reason this court reversed the judgment of the Appellate Division (Cohen v. A. F. A. Realty Corp., 250 N. Y. 262), and ordered judgment in favor of the defendant against the plaintiff for the amount of the deposit. The judgment entered upon the remittitur from this court was a money judgment for the amount of the deposit with interest and costs. It did not adjudge that the defendant had a lien upon the real property for the amount of that deposit. Upon the defendant’s motion the remittitur was amended by adding: “It is hereby adjudged that the A. F. A. Realty Corp. have a hen on the premises described in the complaint for the amount of said judgment and judgment of foreclosure and sale on said hen as provided in the judgment of the Supreme Court to be entered hereon, without prejudice, however, to the right of any purchaser for value and in good faith to litigate the claim that the lien as to such purchaser is invalid.” (250 N. Y. 588.)

The subsequent purchaser from the plaintiff, in the action for specific performance, was not a party to that action. The judgment enforcing the hen was none the less binding upon the purchaser, if the notice of pendency of action filed by the defendant, who set up in its answer a counterclaim for a hen on the property, remained effective, as constructive notice to any purchaser from the owner of the property, pending an appeal from a judgment in favor of the owner. (Civ. Pr. Act, §§ 121, 125.) Whether the judgment would be binding upon one who was not a party to the action could not be determined in the action itself, but so long as the question remained open, the judgment constituted at least a cloud on the purchaser’s title.

The Farbro Corporation derives title from the purchaser. It has brought this action to remove that cloud and to enjoin the A. F. A. Realty Corporation from attempting to enforce the judgment against the premises or against the plaintiff. A notice of pendency may be filed by the plaintiff in any action brought to recover a judgment affecting the title to real property (Civ. Pr. Act, § 120), and a defendant who sets up in his answer a counterclaim demanding a similar judgment has the same right, and for such purpose the defendant fifing such a notice is regarded as a plaintiff and the plaintiff is regarded as a defendant ” (Civ. Pr. Act, § 125). No bond is required to make the notice of pendency of action effective, and until the action is ‘‘ settled, discontinued or abated, or final judgment is rendered therein against the party fifing the notice, and the time to appeal therefrom has expired,” the notice may be canceled only by an order of the court made upon proof which satisfies the court that adequate relief can be secured to the party fifing the same by a deposit of money or in the discretion of the court by the giving of an undertaking ” (Civ. Pr. Act, §§ 123 and 124). In the present action, as we have said, a final judgment was rendered upon the decision of the Appellate Division against the defendant filing the notice of pendency, but before the time to appeal therefrom had expired an appeal was taken to this court. The order of reversal by the Appellate Division contained an adjudication that the defendant A. F. A. Realty Corporation has no hen or claim against the real property. The judgment of reversal entered by the County Clerk upon that order added an unauthorized provision that it is adjudged, ordered and decreed that the notice of pendency of action herein filed on the third day of April, 1926, be and the same hereby is vacated and canceled.” For some reason, not relevant now, the clerk of the county did not act upon that provision of the judgment, but the owner of the property, after the notice of appeal was served, procured ex parte an order from a justice of the Supreme Court directing the clerk of the county of Nassau to vacate and cancel the notice of pendency of action, and the clerk of the county thereupon marked upon the notice the words: “ Cancelled by order filed the 12th day of July, 1928. Thomas S. Cheshire, County Clerk.” In the affidavit upon which the order was obtained, the affiant did not apprise the court of the fact that an appeal was then pending. The order of cancellation was not served upon the party filing the notice at any time. There is no authority to make such an order, and an ex parte order made without authority is certainly void. The notice of pendency still remained on file. The invalidity of the order of cancellation of the notice appeared on the face of the order itself. The notation on the notice that it was canceled by order of the court could have no greater validity than the order referred to in that notation. A purchaser relying upon the notation of cancellation thus received notice at the same time of the invalidity of the cancellation. Section 123 itself provides that “ The cancellation must be made by a no"te to that effect, on the margin of the record, referring to the order.”

It is true that the rules that we have stated above are subject to one exception. The Legislature has provided in section 586 of the Civil Practice Act that When an appeal is from a judgment in favor of the owner of real estate in an action to set aside a conveyance thereof, or in an action to compel specific performance of a contract for the sale thereof, such owner shall have the same right to sell or dispose of the same as though no appeal had been taken, unless the appellant shall file with the clerk of the court a written undertaking in a sum fixed by the court or a judge thereof, upon a notice to the respondent of at least ten days, and to be approved by such court or judge, to the effect that the appellant, in case the judgment appealed from shall be affirmed, will pay to such owner such damages as he may suffer by reason of such appeal, not exceeding the amount of the penalty in such undertaking.” WTiere no such undertaking is filed, the respondent is entitled to an order canceling a notice of pendency of action filed in the action. The appellant here gave no such undertaking, and the purchaser relies more upon the provisions of this section than upon the notation of cancellation on the lis pendens. The question presented is whether this section applies in the present action.

The notice of pendency of action gives constructive notice to a “ purchaser or incumbrancer of the property affected thereby, from or against a defendant with respect to whom the notice is directed to be indexed ” (§ 121). A purchaser or encumbrancer, from or against the owner of real property, obtains title subject to the claims of third parties of which he has constructive notice. It would be futile for an owner bringing an action for the specific performance of a contract of purchase of real property to give notice to third parties of the pendency of the action against the third party, for only he could convey the property, and the statute makes no provision for the filing of a lis pendens under such circumstances. Quite evidently, therefore, section 586 is intended to apply, and can apply only to a case where a notice of pendency has been directed to be indexed against the owner of real property as defendant in an action to set aside a conveyance thereof or in an action to compel the specific performance of a contract of sale thereof.

The notice of pendency here, though directed to the owner of the real property who has brought an action for specific performance of a contract for the purchase thereof, gave constructive notice not of the pendency of the action for specific performance but of the pendency of proceedings upon a counterclaim for a judgment enforcing a lien upon the real property. If that claim had been asserted in an independent action brought against the owner, a notice of pendency of action would have remained effective during the pendency of an appeal from the judgment in favor of the owner, and no undertaking would have been required of the party filing the notice. The defendant had a right to interpose the counterclaim in the action for specific performance and to file a notice of pendency. The statute expressly provides (§ 125): For the purpose of such an application, the defendant filing such a notice is regarded as a plaintiff and the plaintiff is regarded as a defendant.” Since for the purpose of filing a notice of pendency a defendant who has set up a counterclaim in his answer must be regarded as a plaintiff and the plaintiff regarded as a defendant, the rights of the parties must be measured as if the notice had been served in an action brought by the defendant as plaintiff. A counterclaim interposed in an action is treated in many respects as if it were an action. The provision of the statute that in certain actions a notice of pendency directed to be filed against the owner of the property shall be ineffective pending an appeal from a judgment in favor of the owner unless an undertaking is filed, has no application to a notice of pendency filed in other actions. (Fulton County Gas & Electric Co. v. Hudson River Tel. Co., 200 N. Y. 287, 291, 292.)

For these reasons the judgment of the Appellate Division and that of the Special Term should be reversed and judgment directed in favor of the defendant-appellant dismissing the complaint, with costs in all courts. (See 261 N. Y. 621.)

Kellogg, O’Brien, Hubbs and Crouch, JJ., concur; Crane, J., dissents on the ground that the cancellation of the notice of pendency of action was effective. Pound, Ch. J., not voting.

Judgment accordingly.


source: Caselaw Access Project

author: O’Brien, J.

license: Public Domain

text:
    Morelite Service Stations, Inc., et al., Appellants, v. Albert Goldman, as Commissioner of Plant and Structures of the City of New York, et al., Respondents.
    (Argued December 14, 1932;
    decided January 17, 1933.)

      John Holley Clark, Jr., for appellants.
    There is no obstacle in law to the establishment of street easements over land taken for the purpose of erecting a bridge. (Matter of City of New York, 174 N. Y. 26; Matter of Clinton Street Police Station, 123 N. Y. Supp. 198; Matter of Hoyt, 162 App. Div. 469; 213 N. Y. 651; Matter of Corporation Counsel, 186 App. Div. 669.)

      Arthur J. W. Hilly, Corporation Counsel (J. Joseph Lilly, Willard S. Allen and Thomas W. A. Crowe of counsel), for respondents.
    The plaintiffs have no street rights in or over New street. (United States v. Bain, 3 Hughes, 593; People v. Kingman, 24 N. Y. 559; Matter of Jaquino Realty Corp. v. Ormond, 217 App. Div. 76; 247 N. Y. 528; County of Erie v. Fridenberg, 221 N. Y. 389; People ex rel. City of New York v. Lyon, 114 App. Div. 583; 186 N. Y. 545; Matter of City of New York [Putnam Ave. West], 108 Misc. Rep. 427; Matter of Lafayette Avenue, 147 N. Y. Supp. 839; Lehigh Valley R. R. Co. v. Canal Board, 204 N. Y. 471; Carbonelli v. City of Amsterdam, 197 App. Div. 848; Edwards v. Ford, 22 App. Div. 277; Matter of Freeholders of Irondequoit, 68 N. Y. 376; Kolacki v. State of New York, 136 Misc. Rep. 239; Schell v. Town of German Flatts, 123 App. Div. 197; People ex rel. City of New York v. Sandrock R. Co., 149 App. Div. 651; 207 N. Y. 771.)
   O’Brien, J.

Pursuant to authority conferred by chapter 652 of the Laws of 1899 land on the Brooklyn shore of the East river was taken by the city of New York as an approach to the bridge now known as the Williamsburg Bridge. As part of that condemnation proceeding in 1901, title to a strip, since denominated New street ” between Broadway and South Fourth street and bisected by South Fifth street, was acquired. The improvement included the acquisition of land for the widening of South Fifth street as well as the land for laying out New street. In condemning this strip as a passage toward the bridge and its structural approach, parts of two lots fronting the south side of old Fifth street and having access thereon were directly taken. As a result, two small fragments of these lots were left. One of these remnants is ten feet deep and now has a frontage of four feet eight and one-half inches on the west side of the thoroughfare designated as New street. The dimensions of the other, wholly interior and without frontage on any traveled way, are four feet by twenty feet and it adjoins the first one. Separately, each possessed no value. In 1928 plaintiff Morelite Service Stations, Inc., purchased these parcels and thus consolidated them in one ownership. After obtaining permits from the municipal Bureau of Buildings, it erected tanks and an office for a gasoline service station. Later, the plaintiff Zolinsky, as lessee of the property, obtained a permit from the fire department for the storage of gasoline on the premises and started to service automobiles with gasoline by means of portable tanks wheeled from these premises to the curb of the roadway. Thereafter defendant Goldman, as Commissioner of Plant and Structures, caused a fence to be erected across the front of these premises which prevents entrance and exit.

In this action for an injunction the Special Term decreed, among other things, that plaintiffs have the rights of abutting owners of light, air and access to New street, are entitled to transport gasoline in tanks across the sidewalk to automobiles at the curb and that defendant demolish the fence and be restrained from re-erecting it or a similar obstruction. It made a conclusion of law that the acts of the officials of the city since 1898 have fixed the status of New street as a public street and a finding of fact that since 1903 it has been a public street. It drew also a conclusion of law and it decreed in its judgment that since 1904 New street has been a public highway. These findings and conclusions as well as the judgment were reversed and the complaint dismissed. Both the Special Term and the Appellate Division have made the conclusion of law that the title to New street vesting in the city is one of fee simple absolute for bridge purposes and have found as a fact that this territory is under the exclusive management and control of defendant Commissioner of Plant and Structures. The correctness of this conclusion and finding is not open to doubt.

That this thoroughfare, genetically, is a highway cannot be successfully disputed. It is public in character and all who travel to or from the Williamsburg Bridge possess a right of passage over it. In that broad sense its nature does not essentially differ from a mountain trail, a railroad or a city street. (Sun P. & P. Assn. v. Mayor, 152 N. Y. 257, 265.) Although it bears all the physical resemblance to a street, its status in a specific legal sense may be radically dissimilar. Many elements, among them the purpose of its acquisition, the nature of the municipal title, the power and the identity of the official vested with administration over it, the residue of interest lingering in the title of the abutting owner, all these factors may tend to ’mark a divergence from the legal condition of a street. This land, notwithstanding its inclusion in the nomenclature of streets and its physical appearance, was not acquired for street purposes, nor was it laid out as such. It has never been under the control of those municipal officers who have the management of streets. It does not appear upon the map or plan of the city as a street. Neither the Commissioner of Bridges nor his successor, the Commissioner of Plant and Structures, possessed authority, even if there were any evidence of an intention by them, .to fix the status of this passageway as that of a street. Always, since its acquisition for bridge purposes, it has constituted bridge property and nothing else. Plaintiffs have not shown that such easements of light, air or access as usually inhere in the title of abutting owners on a street attach to these plaintiffs. The lots of which these remnants formed untaken parts never had access to any street except South Fifth street. Until after the taking of parts of these lots, New street did not exist.

The administration of defendant Commissioner of Plant and Structures must be reasonable and such as not to discriminate against the owner of any particular property. (Matter of Picone v. Comr. of Licenses, 241 N. Y. 157.) If an abuse of discretion, according to its legal meaning, has been committed in granting or withholding relief, this court, in an action for an injunction where the Appellate Division has reversed findings of fact and made new ones, can make correction. (Forstmann v. Joray Holding Co., 244 N. Y. 22.) During the time that New street has existed as a bridge highway, all abutting owners, even if they be deemed to possess no conventional easements of access, have been allowed without interference to pass to and from their premises for such lawful purposes as, in the reasonable discretion of the Commissioner of Plant and Structures, do not intrude upon the uses of this land as a traffic lane to the bridge. To deny all ingress and egress to and from a particular parcel for any purpose, even such as may meet the approval of the official in control, and to allow such privileges to all others, conflicts, we think, with that reasonable and impartial management and control which a public official is bound by law to administer. The erection of the fence across this one piece of property is, therefore, in excess of the Commissioner’s powers.

While plaintiffs are entitled to the removal of the fence, they may not, against the Commissioner’s judgment, obstruct the sidewalk and cause congestion of traffic at the curb. If the Commissioner, in the exercise of reasonable discretion, entertains the opinion that plaintiffs’ acts in supplying automobiles with gasoline at this location block or impede the use of this passage to the bridge, he is authorized to employ reasonable methods for the prevention of the practice. If these acts constitute a nuisance, he may cause it to be abated. He is empowered to remove plaintiffs’ portable tanks and their connections from the sidewalk and roadway.

The judgment should be modified in accordance with this opinion and as so modified affirmed, without costs.

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

Judgment accordingly.


author: Kellogg, J.

text:
    In the Matter of Ottomar Stange et al., Copartners under the Firm Name of Stange Construction Company, Respondents, against Thompson-Starrett Company, Appellant.

      (Argued December 5, 1932;
    decided January 17, 1933.)

      Nathan L. Miller, J. Arthur Leve and Frederick Hulse for appellant.
    The arbitrators were limited to a dispute-in relation to a clause of the contract. They could not set aside the contract and make the award independently of its provisions on the theory of breach of contract. (Smith v. Thompson-Starrett Co., 247 N. Y. 277; Matter of Bullard v. Grace Co. (240 N. Y. 388; Matter of Marchant v. Mead-Morrison Mfg. Co., 252 N. Y. 284; Dodds v. Hakes, 114 N. Y. 260.)

      John L. Seager and F. Earl Walter for respondents.
    The arbitrators fully performed their duties; they did not go beyond their jurisdiction and they substantially complied with the order of the Appellate Division. (Moore v. Eadie, 245 N. Y. 166; Ice Service Co. v. Phipps Estates, 245 N. Y. 393; Fuller Co. v. Cedar-William St.

      Corp., 135 Misc. Rep. 768.) The authority of the arbitrators was not limited to making only such an award as could be produced by the use of unit prices. They acted within their authority in using the method adopted by them in reaching their award. (Matter of Smith Co. v. Thompson-Starrett Co., 247 N. Y. 277; Itoh & Co. v. Boyer Oil Co., 198 App. Div. 881; Fudickar v. Guardian Mut. Life Ins. Co., 62 N. Y. 392; Sweet v. Morrison, 116 N. Y. 19; Everett v. Brown, 120 Misc. Rep. 349; Moore v. Eadie, 245 N. Y. 166; Ice Service Co. v. Phipps Estate, 245 N. Y. 393.)
   Kellogg, J.

Thompson-Starrett Company contracted with the owner of certain premises for the dismantling of the buildings standing thereupon, and the erection of a department store in their place. It subcontracted with Ottomar Stange and Anna A. Stange, composing the firm of Stange Construction Company, for the performance of a substantial portion of the work. This included all dismantling, all excavating, the building of foundation walls, the laying of all concrete below the under side of the first floor level, and various other items. The contract provided: The sum to be paid by Contractor to Sub-Contractor for the work shall be Four Hundred Thirty-two Thousand and No/100 dollars ($432,000.00), subject to additions and deductions as herein provided, which sum is herein referred to as the Price.”

The contract made provision that the contractor should have the right, as construction proceeded, to direct any changes in the work to be made, which it might deem expedient, whether these changes increased or diminished the work. However, no such changes should be made except upon written order of contractor signed by an executive officer, stating the additional time allowed, if any, and the amount to be added or deducted from the Price.” The following clause was to govern in case of changes: “ Unit prices, if any are named in this contract, shall be used in determining the value of such changes.” There followed this clause: In case of disagreement as to the adjustment of the Price or of the time of completion Sub-Contractor shall proceed with the work and the determination of such amount or time shall be referred to arbitration as herein provided.”

During the progress of the work some fifty changes were ordered made, and the cost of the work was greatly increased. The parties were unable to agree that the prices stated in the orders for the changes fairly expressed the additional cost. Consequently, the subcontractor, as provided in the contract, proceeded with the work, awaiting a subsequent determination by arbitration of increased costs. After completion, pursuant to an order of Special Term, modified by an order of the Appellate Division, arbitrators were appointed who took up the work assigned to them. An award was finally made in favor of the subcontractor against the contractor in the sum of $234,702.12, with interest. The contractor moved to set aside the award; the subcontractor moved to confirm the award. The award was confirmed, and judgment has followed for the amount of the award.

The contract does in fact contain a provision naming unit prices. The schedule therein given is preceded by the following clause: “ It is hereby understood and agreed that should any changes be made in the work as herein contemplated, the Price ” mentioned in article III shall be increased or decreased, as the case may be, by the amount of work added or omitted, multiplied by the following unit prices.” Then follow twenty-eight items, describing work to be done or materials to be furnished, and the agreed sum per unit to be paid therefor. Thus excavating by steam shovel is priced at $0.95 per cubic yard place measurement; hand excavating, for general purposes, is priced at $2.25 per cubic yard; for piers, pits and trenches at $2.45; for underpinning at $3.25. These prices are to prevail whether the additional excavation is done at a high or a low level, whether the material excavated is sand, hard pan or rock. All concrete work is to be done for named prices “ per cubic yard, in place,” various types of work commanding greater or less prices. Thus concrete “ in place,” whether laid in the wet or in the dry, no matter what difficulties might attend the laying, is to be paid for at a set and invariable figure, named for a particular type of work.

It was evidently the concept of the parties that all subcontracting work, whether done in precise accord with the work originally specified and planned, or whether done in accord with altered plans, increasing or diminishing the work, should constitute an integral part of the subject-matter of the express contract, to be governed by its terms, and to be paid for at contract prices. “All clauses of this Contract shall apply to any changes, omissions, or extra work in like manner and to the same extent as to the work contracted for, and no changes, omissions, or extra work shall annul or invalidate this contract.” With this thought in mind the parties made provision for arbitration as follows: In case the parties hereto disagree in relation to any clause in this contract, the question shall be referred to a Board of Arbitration consisting of three (3) disinterested parties, one nominated by Contractor, one by Sub-contractor, these two to select a third.” We have construed this particular clause to signify that disputes “ not being referable to any clause of this contract,’ were not made arbitrable by the parties.” (Matter of Smith Fireproof Constr. Co. v. Thompsom-Starrett Co., 247 N. Y. 277, 279.) Specifically, the contract provided, in reference to alterations of the contract work, as we have already noted: “ In case of disagreement as to the adjustment of the Price or of the time of completion Sub-contractor shall proceed with the work and the determination of such amount or time shall be referred to arbitration as herein provided.”

The controversy to be arbitrated must be “ in relation to any clause in this contract.” Obviously a claim made for the reasonable value of the work done, on the theory that the contract has been abandoned and no longer governs, cannot constitute an issue under any clause in this contract.” Again, the disagreement, so far as it relates to alteration, in order to be arbitrable, must be one involving the adjustment of the Price.” If the contract is to be regarded as abandoned, and a recovery to be had upon a quantum meruit, no “ adjustment ” of the contract Price ” can be involved, for to allow such a recovery would be, not to modify the price, but to scrap it utterly. Self-evidently, if a contract does not apply to control a price, it does not apply to compel an arbitration of the price. The respondents would, therefore, appear to be in this inescapable dilemma: If the award made by the arbitrators is a recovery, based solely upon the reasonable value of the work done, regardless of the price, they had no authority to make it, since only contract disagreements were arbitrable. On the other hand, if the award is intended as a recovery based upon liability under the contract, it may not stand, since it involves a repudiation of every contract term, in relation to the adjustment of the price.

That the subcontractors, the petitioners herein, regarded the contract as having been utterly abandoned by the parties, and, therefore, wholly inapplicable to determine their claim, is clearly apparent. They presented a claim in quantum meruit for the recovery of the actual cost to them of all work done and materials furnished, plus a percentage for profit. They asked the arbitrators to determine that this entire contract as so affected, could not be done in accordance with the original contract plans, specifications, lump sum and unit prices in contract for additions and omissions and beg of the arbitrators to award it, the Stange Company, its full costs of the entire work, plus 10% profit, plus interest on defaulted payments to date, after allowing credit for cash payments made to date.” Said the counsel, in presenting the claim: Certainly it will possibly be ' scrapping the contract.’ ” Granted the validity of the argument that the extent of the changes involved a scrapping ” of the express contract, then the remedy available lay not in arbitration, under a clause of a “ scrapped contract,” but in a suit at law.

That the majority of the arbitrators, who made the award, agreed with the petitioners, is shown by the statements made by one of them. Thus Mr. Mueser said: “ The question to my mind is whether at the time when the parties made their contract, there was a meeting of the minds that the respondent (contractor) should have the right under the Change Clause to completely emasculate the contract leaving nothing but a shell.” In his judgment, It would be unfair, utterly without justice, if not fraudulent, to use the shell of an emasculated lump sum contract under the guise of a Change Clause to have the petitioner do work which in no sense he had intended to do, had not bid for and might be unfitted for or unorganized to do.” Finally, the arbitrator stated that the changes were of such character that they were beyond the intent of the change clause and in fact defeated the intent of the lump sum provision.”

The action of the arbitrators speaks even louder than the words used by them or the petitioners. Concededly, they made the award of $234,702.12 by no other method than the following: They found that the petitioning subcontractor had expended for the entire work done the sum of $911,784.28; that the total payments made to it by the contractor aggregated $677,082.16. Deducting the latter from the former leaves $234,702.12, and for that sum the award was made. True, these facts do not appear in the award itself. That document is artfully drawn, so that it appears therefrom that the arbitrators, having first found, on the evidence given, that the increased cost, due to the changes in the work, was $479,784.28, added that sum to the contract price of $432,000 tó make a total cost of $911,784.28, from which the deduction of $677,082.16 for payments made left a balance due of $234,702.12, the amount awarded. The fact is, however, as all the proof incontestably shows, that the figure $479,784.28 was not a factor employed to produce the figure of $911,784.28, representing total cost; on the contrary, that it was itself the product of that figure, obtained by subtracting the contract price from the figure of total cost. Concededly, no effort was made and no decision given, to determine increased cost, over contract price, as an independent item. The only proof given related to the actual expenditures of the subcontractors paid out in producing the entire work called for by the contract, as altered by the contractor in the exercise of its contract privilege.

In employing the figure produced by this proof as the sole basis of the recovery, the arbitrators arrived at a result which is clearly unwarranted. Their repudiation of the contract did not involve alone the contract terms providing for the use of unit prices to determine the cost of changes made; it involved a complete scrapping ” of the contract price. Thus, every advantage which the contractor may have secured to itself by the express contract has been swept away. Suppose, for instance, that the price of $432,000 for the original work covered material and labor to be furnished, the actual cost of which to the subcontractors would have been $632,000. Even if the arbitrators were entitled to disregard unit prices and go to total cost for the solution of their problem, the deduction from total cost, in order to determine additional cost, should have been, not $432,000, but $632,000. Not even a pretense is made that proof was given or a decision made to determine what would have been the actual cost of the original contract work. Mr. Mueser says: “ It is, indeed, true that in the endeavor to write the form of the award in full compliance with the order and the above contract requirement, the Chairman deducted the sum of $432,000, being the Price, from the sum of $911,784.28, in order to find the figure of $479,784.28, being the adjustment of the Price.” Counsel for the subcontractors on this appeal themselves say: The majority arbitrators took and used the lump sum contract price of $432,000 for this purpose.” It thus appears that, had there been any advantage to the contractor in securing the named lump sum price, the award completely robbed it of the contract gain. Indeed, it conclusively appears that the contract has in all respects been wholly disregarded; that had there been no express contract between'the parties, but merely a performance of the work by subcontractors at the request of contractor, under an implied promise by the latter to pay the reasonable value of the work, the result would have been the same. It is obvious that there was here no arbitration of a disagreement in relation to any clause in this contract; ” that there was none as to any disagreement “ as to the adjustment of the Price; ” that the arbitrators have not made any adjustment of the Price ” but have ignored it utterly.

The suggestion that the order of the Appellate Division modifying the Special Term order appointing the arbitrators is a final order which conclusively determines the authority vested in the arbitrators is entirely correct. However, the power to make the order was derived from the express contract between the parties and the order must itself be interpreted by the terms of that contract. The order contains no term providing for an arbitration other than that authorized by the contract. It provides that the arbitrators shall determine the increased costs and expenses of the said petitioners in any wise due to changes directed.” As there has been no comparison between the original and the altered plans, no estimate of the excess cost of executing the latter over and above the cost of executing the former, with due consideration given to the advantages, if any, afforded by the Price, there has been no determination of increased costs and expenses.” Again, the order contains no authorization that in estimating increased cost, unit prices should be ignored. Contract provisions in respect to arbitration should have governed but have been ignored. The order contained no provision authorizing the arbitrators to determine total cost to the subcontractor of the improvement as altered, and to deduct total payments made, in order to determine the balance due, which was the method pursued by the arbitrators. On the contrary, the order provided that the arbitrators should proceed to determine in detail the increased cost involved in changes ' relating to the elevation of column footings in the sub-basement,” relating to changes " in the sub-basement on the north side of the said building,” relating to changes “ in the subbasement for the entire length of the building along Ninth Street,” in changing the structure at this point from a one story basement to a two story basement,” in requiring additional steel piling and timber bracing, and in changes in respect to numberless other items. So far as we are informed, the changes specified in the order for arbitration may have covered all the items of change directed by the fifty change orders. However, in order that no item should fail of coverage by the order, the court made a general provision that the arbitrators should determine increased costs and expenses ” due to any and all other changes and alterations in construction directed and ordered.” Here is clear demonstration that the court intended that the arbitration should proceed, not by the method of total cost less payménts made, but item by item to determine the increased cost of every change, applying unit prices as the measure of increased expense in every instance. True, the order, in respect to all the changes specified, speaks of them as alterations requiring the petitioners to perform each and all of the said work as changed and altered, in a different manner and under different conditions from those in said contract and said drawings annexed thereto.” Observe that the manner and conditions ” referred to are those which are different “ from those in said contract and said drawings; ” not those which might be found in things external to the two sets of plans, the original and the altered. We find here no authorization of an abandonment of unit prices prescribed for use in every case of an alteration; no sanction for the total repudiation of the contract price rather than its adjustment.

The judgment should be reversed, with costs in all courts, the order confirming the award reversed, and the motion to vacate the award granted.

Pound, Ch. J., Crane, Lehman and O’Brien, JJ., concur; Hubbs and Crouch, JJ., dissent and vote to affirm.

Judgment accordingly.


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    John J. K. Caskie, Respondent, v. International Railway Company, Appellant.

      (Argued December 6, 1932;
    decided January 17, 1933.)

      James C. Sweeney and Henry W. Killeen for appellant.
    There is no evidence tending to show that Mitten had apparent authority to make the alleged express contracts in the defendant’s behalf; and the submission of the case to the jury on the theory of express contract is prejudicial and reversible error. (Colaizzi v. Pennsylvania R. R. Co., 143 App. Div. 638; 208 N. Y. 275; Barker v. Cunard S. S. Co., 91 Hun, 495; Wolf v. Goodhue Fire Ins. Co., 43 Barb. 400; 41 N. Y. 620; Smith v. Weston, 159 N. Y. 194; Freelander v. Wilson, 187 App. Div. 919; Goldstein v. Cornwall, 215 App. Div. 402; Madden v. Chalmers, 215 App. Div. 549; Moody v. Wise, 188 App. Div. 224; Traitel Marble Co. v. Brown Brothers, Inc., 159 App. Div. 485; Hastings v. Brooklyn Life Ins. Co., 138 N. Y. 473; Oakes v. Cattaraugus Water Co., 143 N. Y. 430; Peek v. Dexter Sulphite Pulp & Paper Co., 164 N. Y. 127; McIlrath v. Waterbury Sons & Co., 193 App. Div. 491; Hardin v. Morgan Lithograph Co., 247 N. Y. 332; Camacho v. Hamilton Bank Note & Engraving Co., 2 App. Div. 369; 158 N. Y. 663; Sloman v. Star Co., 149 App. Div. 500; 210 N. Y. 586; Rathbun v. Snow, 123 N. Y. 343; Bankers Trust Co. v. International Ry. Co., 207 App. Div. 579; 239 N. Y. 619; Lyon v. West Side Transfer Co., 132 App. Div. 777; First Nat. Bank v. Ocean Nat. Bank, 60 N. Y. 278; Pope v. Bank of Albion, 57 N. Y. 126; Mechanics’ Bank v. N. Y. & N. H. R. R. Co., 13 N. Y. 599; Farmers Fund, Inc., v. Tooker, 207 App. Div. 37; Caldwell v. Mutual Reserve Fund Life Assn., 53 App. Div. 245.) Each of the alleged express contracts, as testified to by the plaintiff, is unusual and outside of the ordinary course of business and as matter of law no agent can have apparent authority to make an unusual and extraordinary contract. (First Nat. Bank v. Ocean Nat. Bank, 60 N. Y. 278; Caldwell v. Mutual Reserve Fund Life Assn., 53 App. Div. 245; Berwin & Co. v. Hewitt Realty Co., 199 App. Div. 453; 235 N. Y. 608; Rathbun v. Snow, 123 N. Y. 343; Lyon v. West Side Transfer Co., 132 App. Div. 777; Gause v. Commonwealth Trust Co., 124 App. Div. 438; Hardin v. Morgan Lithograph Co., 247 N. Y. 332; Bankers Trust Co. v. International Ry. Co., 207 App. Div. 579; 239 N. Y. 619; Camacho v. Hamilton Bank Note & Engraving Co., 2 App. Div. 369; Sloman v. Star Co., 149 App. Div. 500; 210 N. Y. 586.) There is no evidence that the defendant knew of the existence of any of the alleged express contracts and no evidence that Mitten ever made any like contract in the defendant’s behalf and for this reason the defendant cannot be held liable on the alleged express contracts. (Corn Exchange Bank v. American Dock & Trust Co., 163 N. Y. 332; Jacobus v. Jamestown Mantel Co., 211 N. Y. 154; Bankers Trust Co. v. International Ry. Co., 207 App. Div. 579; 239 N. Y. 619; Gause v. Commonwealth Trust Co., 124 App. Div. 438.)

      Frank G. Raichle, Carlos C. Alden and J. C. Randal for respondent.
    On undisputed evidence and as a matter of law, Mitten is shown to have had express authority to employ plaintiff on behalf of defendant. (Rebora v. British & Foreign M. Ins. Co., 258 N. Y. 379.) Defendant is hable on the contract made with plaintiff by its general agent, Mitten Management, Inc., acting through Mitten, its executive head. (Corklite Co. v. Rell Realty Corp., 249 N. Y. 1; Dudley v. Perkins, 235 N. Y. 448; Rossiter v. Rossiter, 8 Wend. 494; Munn v. Commission Co., 15 Johns. 44; Butler v. Mates, 9 Wall. 766; Lightbody v. North American Ins. Co., 23 Wend. 18; Lewis v. Chapin, 263 Mass. 168; Crain v. Bank, 114 Ill. 516; Thurber v. Anderson, 88 Ill. 167; Watteau v. Fenwick, 1 Q. B. 346; Brooks v. Shaw, 197 Mass. 376; Ernst v. Harrison, 86 N. Y. Supp. 247; MacCracken v. Hamburger, 139 Penn. St. 326; Hubbard v. Penbrook, 124 Penn. St. 291; Lamb v. Thompson, 31 Neb. 448.)
   O’Brien, J.

Plaintiff sued in the sum of $200,000 on three causes of action for legal services extending from September, 1922, to January, 1930, and recovered judgment for $80,000. By stipulation, it was reduced by the Appellate Division to $55,000 for the reason that the first cause was barred by. the' Statute of Limitations. The second cause of action alleges $25,000 as reasonable value of services rendered between June 30, 1923, and March 1, 1928, in relation to the investigation of conditions growing out of a strike 'conducted by defendant’s employees. The third cause is for $150,000 as reasonable value of services between December 1, 1923, and December 31, Í929, in reorganizing defendant’s claim department and in supervising the defense of negligence actions.

That plaintiff performed valuable services which inured to the benefit of defendant has been fully proved and indeed is not disputed. During the years extending from 1924 to 1929 he was employed also as general attorney for the Philadelphia Rapid Transit Company and at the same time acted,- with the title of general attorney- and head of the claims and negligence departments, for defendant whose offices were in Buffalo. He never personally participated in trials. For that duration he spent three hundred and ninety-three days in Buffalo on defendant’s affairs and while' in Philadelphia he kept in touch with many of them by means of telephone, telegraph and written reports. In support of the allegations in the complaint that his professional services were rendered at defendant’s special instance and request and upon its promise to pay reasonable value, plaintiff testified that Thomas E. Mitten, who was an important stockholder in defendant corporation as well as in the Philadelphia Rapid Transit Company and who reposed great confidence in him, not only assigned to him the laborious work which he performed but also assumed, in behalf of defendant, to promise compensation to plaintiff in addition to the salary which he was receiving from the Philadelphia Rapid Transit Company. The evidence shows that Mr. Mitten detailed plaintiff to the three tasks of clearing up the situation at Buffalo in respect to jitney buses which operated in competition with defendant, in respect to obtaining convictions against employees who had used violence against defendant’s passengers and property and to reforming the system of handling claims and defending actions for negligence. When he accepted these definite tasks at Mr. Mitten’s request, he had no idea of the length of time which would necessarily be consumed. He had in mind the possibility of finishing in a month. The work at Buffalo assigned to him by Mr. Mitten appeared at the time to be of a transient nature. His Philadelphia tenure was permanent.

The principal defense consists of allegations that no express or even implied promise to pay plaintiff existed on the part of any one authorized to contract in behalf of defendant, but that, on the contrary, the services of plaintiff, as an employee of the Philadelphia Rapid Transit Company, were loaned by it to defendant and that defendant has reimbursed that corporation for his services. During the years that plaintiff was employed by the Philadelphia Rapid Transit Company his salary ranged from $9,600 a year in 1919 to $15,000 in 1922, $20,000 in 1923 and $24,000 from 1925 to 1929, with an additional bonus of ten per cent each year. To this salary and bonus were added gifts of several hundred shares of stock. Mr. Mitten, in addition to his large holdings in the Philadelphia company and in defendant, was also the principal stockholder and president of Mitten Management, Inc., which held a contract with each corporation for the complete charge and supervision, subject to the direction of the board of directors,” of the properties and business of each. He was also a director of defendant and chairman of its executive committee and was recognized as the controlling force in the affairs of both corporations. In 1920 he was president of the Philadelphia company and at the beginning of that year Mr. Tully, who had long been connected with that corporation, became president of defendant. The two corporations, both dominated by Mitten, maintained the most harmonious relations. Shortly before Tully assumed the presidency of defendant, he and Mitten orally made an arrangement whereby defendant would have the right to draw upon any employee, both operating and professional, of the Philadelphia organization for assistance, and defendant, upon receiving a bill, would pay to.the Philadelphia company the salaries of these men while engaged in service for the Buffalo corporation at the rate which they were accustomed to receive in Philadelphia. That company did, from time to time, bill defendant for such services by numerous employees. In September, 1922, the assistant auditor of the Philadelphia company in writing requested plaintiff to send to him the time which plaintiff and others of its employees had spent at Buffalo in order that their salaries could be charged to the proper account. Defendant paid the Philadelphia company $6,666.66 for the time spent by plaintiff on its affairs from January, 1922, to April, 1923, and again, after plaintiff had presented his claim upon which this action is^founded, defendant paid to that corporation, upon its demand, the sum of $33,333.34 for the use of plaintiff’s services during portions of the years extending from April, 1923, to December, 1929. The whole amounted to $40,000. In addition defendant paid plaintiff for his expenses during the time embraced in the complaint the sum of $17,297.93. Mr. Joyce, a director and member of defendant’s executive committee, testified, after the withdrawal of objections to such testimony, that he distinctly and clearly understood that plaintiff would perform necessary services for defendant and that it would be charged by the Philadelphia company for those services. During all these eight years plaintiff never told him that he expected compensation from defendant and this witness never suspected, until three months after Mitten’s death, that plaintiff expected to be paid by defendant. Two other members of defendant’s executive committee testified to like effect. An attorney who was retained by defendant, through plaintiff, to assist him in special work during the year 1923 testified that plaintiff had informed him that plaintiff was at that time paid by the Philadelphia Rapid Transit Company for his work for defendant at Buffalo. Arthur A. Mitten, the son of Thomas E. Mitten and also chairman of defendant’s executive committee, knew nothing of any understanding between his father and plaintiff for extra compensation for services rendered to defendant, and never prior to his father’s death heard of any such claim by plaintiff. Plaintiff admits that, although he knew intimately the president, the members of the executive committee and all the men active in defendant’s affairs from 1922 to the end of 1929, he never told one of them that Mr. Mitten had promised him that defendant would pay him for his services. However, in a letter to one of the directors in April, 1929, plaintiff did refer to bis services to defendant, without compensation “ as yet,” and the fact that he had assumed his work at Buffalo at Mr. Mitten’s request. He states, “ I feel myself responsible to Mr. Mitten until he personally reheves me of the responsibility.” If defendant’s directing officers believed that, for plaintiff’s services rendered at Buffalo at Mitten’s direction, the Philadelphia company was to be repaid by defendant, their acquiescence in the performance of those services would not lead to an inference of a promise to pay plaintiff.

There is no proof that plaintiff performed any services for defendant except upon the request of Mr. Mitten and no evidence that defendant ever considered his services in any light except as part of the duty owed by him to Mr. Mitten’s interests, and no evidence that any. one ■except Mr. Mitten ever suggested payment. Defendant attacks plaintiff’s testimony on the ground that the only persons who could corroborate it are dead and on the further ground that in. the many letters passing from Mitten to plaintiff, in which plaintiff’s work is warmly praised, no reference is made to any compensation in addition to that paid by the Philadelphia company. It attaches importance also to the fact that plaintiff presented no claim to defendant prior to Mr. Mitten’s death. However, here lies an issue of fact which the jury resolved in plaintiff’s favor. Concluding, therefore, that some kind of promise was made by Mr. Mitten in some capacity, his power to bind this corporate defendant must be examined.

Mitten’s functions as chairman of the executive committee do not embrace the authority of a majority of that committee. In his role as president of Mitten Management, Inc., his charge and supervision of defendant’s property and business was, pursuant to contract, “ subject to the direction of the board of directors of Railway.” There is no evidence that in his tacitly recognized position as unofficial but practical master of defendant’s affairs he ever suggested to the president or to the board' of directors that plaintiff be paid by defendant. Even such evidence would be ineffective -unless followed by proof that his suggestions were observed. The board of directors could have employed plaintiff but it never did. Perhaps defendant’s president was vested with like authority. Since the alleged contract is unusual and outside the ordinary course of business, this question is doubtful. (Hardin v. Morgan Lithograph Co., 247 N. Y. 332.) Mitten Management, Inc., and probably its president, Mr. Mitten, could under its contract with defendant recommend or approve the employment of persons by defendant. As we read that contract, however, the Management’s charge and supervision of defendant’s properties and business is subject to the direction of the board of directors of Railway,” and, without direction or ratification by that board, Management’s agency was not broad enough to enable it to enter into contracts of employment for such services as have been here proved. The functions of directors may not be abdicated. (Manson v. Curtis, 223 N. Y. 313.) We agree, therefore, with that part of the charge wherein the trial justice instructed the jury, with plaintiff’s consent, that Mitten Management, Inc., had no actual or apparent authority to make the alleged express contract in behalf of defendant. It was defendant’s general agent only when acting under the directors. We agree also with that part of the charge which holds that Mr. Mitten possessed no actual authority.

In respect to such powers as to a stranger might seem apparent, plaintiff was not an outsider. He was intimately connected with defendant’s affairs as well as other Mitten interests. He knew that his proportionate salary during the time of his early services at Buffalo was charged against defendant by the Philadelphia Rapid Transit Company. It was in fact paid. If at a later date Mitten promised a reward growing out of a partial transfer of plaintiff’s services from Philadelphia to Buffalo and assured him that he would receive additional compensation, there is no evidence that plaintiff had a right to rely upon such an assurance as constituting apparent authority to make a contract. As an attorney, familiar with the law and with defendant’s affairs, he could have relied at the most only upon Mitten’s influence subsequently to induce the corporation to ratify an understanding between two individuals. His letters of April 2, 1929, and November 13, 1929, warrant no inference except that he had undertaken his work at Mitten’s personal request to promote the welfare of a corporation in which Mitten held a large investment. He was a protege of Mitten who respected his energy and ability, and there is no evidence that since 1922 he had attended to any legal affairs except those in which Mitten financially participated. His motives were doubtless mixed; he probably entertained a sense of loyalty toward the powerful financier who had advanced his fortunes for him, and then, too, he may have had reason to hope for some reward; he felt that to refuse Mitten’s request would be ungrateful and perhaps indiscreet. There is no evidence that he based his conduct upon a contract which any one at the time was justified in believing to be or was apparently binding upon defendant. Since we have reached the conclusion that there is no evidence to support an inference by one situated as was plaintiff that Mitten was an agent with apparent authority to contract in behalf of defendant, we think that ratification by the corporation of any promise which Mitten made to plaintiff is an indispensable element of a recovery.

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

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

Judgments reversed, etc.


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    In the Matter of the Claim of Witold Sokolowski against Bank of America et al., Respondents. The State Industrial Board, Appellant.
    (Argued November 29, 1932;
    decided January 17, 1933.)

      John J. Bennett, Jr., Attorney-General (Joseph A. McLaughlin and John R. O’ Hanlon of counsel), for appellant.
    The award and decision of November 11, 1930, does not constitute or involve a reclassification of disabilities in violation of subdivision 6-a of section 15 of the Workmen’s Compensation Law. (Schaefer v. Buffalo Steel Car Co., 221 App. Div. 808; 225 App. Div. 839; 250 N. Y. 507; Carolan v. Hoe & Co., 225 App. Div. 393.) The action of the Industrial Board in making an award under paragraph V of section 15 and in correcting consecutive awards theretofore made in error was proper. (Rubenstein v. Pechter Baking Co., 224 App. Div. 324; Marhoffer v. Marhoffer, 220 N. Y. 543; Schaefer v. Buffalo Steel Car Co., 221 App. Div. 808; 250 N. Y. 507.)

      Frank L. Ward for respondent.
    The State Industrial Board improperly reclassified the claimant’s disability. (Marhoffer v. Marhoffer, 220 N. Y. 543; Matter of Vincent v. Allerton House Co., 256 N. Y. 522; Matter of Kolodick v. General Electric Co., 235 App. Div. 111.)
   Kellogg, J.

On July 26, 1920, the claimant, while in the course of his employment, sustained accidental injuries, arising out of his employment. The injuries comprised fractures of the leg, elbow and shoulder, and bruises of the hand, arm and head. The employer continued to pay claimant’s wages until about March 25, 1921. On May 23, 1921, an award, consisting of $20 a week for the previous eight weeks, was made in favor of claimant, and the case was continued. The award did not in terms classify the disability, yet it was clearly an award for temporary total disability. It was total because based upon the full weekly wage of claimant before the accident rather than upon reduced wages earned by him thereafter; it was temporary, because made to cover a temporary period already elapsed; it contained no provision for future compensation. Many similar awards, at the same rate, covering all intervening periods, were subsequently made prior to September 15, 1922.

On the last-mentioned date the Industrial Board canceled all previous awards, reclassified the disability as permanent partial, and made these awards: A schedule award of $20 per week for 144 weeks for fifty per cent of loss of use of left leg; an award of $20 per week for 104 weeks for thirty-three and one-third per cent loss of use-of the right arm; and an award of $20 per week for 78 weeks for twenty-five per cent loss of use of the left arm. The total award was for 326 weeks of disability, less 112 weeks already paid, or 214 weeks. Payments were made under this award until the 214 weeks had elapsed, and the carrier had made payment of $6,520 for the full 326 weeks! On November 11, 1930, the Industrial Board canceled all previous awards, and made new awards as follows: An award of 111| weeks for total disability from July 26, 1920, the date of the accident, to the 15th day of September, 1922, the date of the schedule awards, as for a total disability, at the rate of $20 per week; an award, under section 15, subdivision 3, paragraph v (formerly u), of the Workmen’s Compensation Law (Cons. Laws, ch. 67), of 420 5 /6 weeks, from the 15th day of September, 1922, to date, at $10.75 per Week, to cover the claimant’s reduced earning capacity, figured at-fifty per cent less than normal. It has been held that this' award involved a reclassification of disabilities which the Board was forbidden to make.

Chapter 557 of the Laws of 1927 introduced into section 15 of the Workmen’s Compensation Law a new subdivision, known as subdivision 6-a, which, as amended, now reads: “ The board may, within three years from the date of accident, upon its own motion, or on application of any party in interest, reclassify a disability upon proof that there has been a change in condition, or that the previous classification was erroneous and not in the interest of justice.” The clear implication is that no reclassification can be made unless accomplished within three years of the date of the accident.

The Compensation Law specifies four classes of disability and no more. They are: Permanent total disability, temporary total disability, permanent partial disability, and temporary partial disability. (§ 15.) A disability may not be shifted from any one of these classes to any other unless it be done within the three-year period. (Matter of Schaefer v. Buffalo Steel Car Co., 250 N. Y. 507.) In this case, on the 11th of November, 1930, the Board revoked its award of a specified number of weeks for the percentage loss of use of a leg, a left arm and a right arm, and made an award for reduced earnings under section 15, subdivision 3-v. This was not a reclassification, for the schedule award of September 15, 1922, and the award of November 11, 1930, for reduced earnings under subdivision 3-v, revising the prior award, both constituted awards for injuries falling within the class of a permanent partial disability. This was the precise holding in Matter of Schaefer v. Buffalo Steel Car Co. (supra), where an award, as for a schedule disability, was modified, and an award for reduced earning capacity, under subdivision 3-u (now v) was made. On the other hand, an instance of a forbidden reclassification may be found in Matter of Vincent v. Allerton House Co. (256 N. Y. 522), for there an award for a percentage loss of an eye, classed as a permanent partial disability, under section 15, subdivision 3, was modified to constitute an award for a temporary loss of both eyes, classed as a temporary total disability under section 15, subdivision 2. While we hold that there has been here no prohibited reclassification, it does not follow that the award was proper.

Provision is made, in subdivision 3 of section 15, for awards to be granted for the loss of various members, such as an arm or leg, or for a percentage loss of use of these members, constituting an equivalent loss. Compensation is to be awarded on the basis of sixty-six and two-thirds per cent of full wages, and to be paid during a given number of weeks, as arbitrarily stated in a schedule, which sets opposite each member the particular number of weeks during which, for its loss, compensation will run. It was formerly held that where several members were lost, the weeks allotted to one member could not be added to the weeks.allotted to another, so that continuous compensation during the aggregate of all the weeks might be had. (Marhoffer v. Marhoffer, 220 N. Y. 543.) The reason for this holding was the obvious one that a workman, if fully disabled through a given period by the loss of an arm, could not also be fully disabled during the same period by the loss of a leg. Consequently, in case of multiple injuries, compensation was payable only during that period, which constituted the longest term of weeks provided for any one member. The multiple awards of September 15, 1922, made to take effect successively, were doubtless improper for this reason, but that fault is not material here. It may be remarked in passing that the defect in the law, which we have noted, if it were such, was cured by paragraph u of subdivision 3, introduced into the law by chapter 301 of the Laws of 1929, wherein it is provided that awards shall run consecutively.”

Provision is also made in subdivision 3 for “ other cases ” of a permanent partial disability. This is paragraph v (formerly u), reading as follows: “In all other cases in this class of disability, the compensation shall be sixty-six and two-thirds per centum of the difference between his average weekly wages and his wage-earning capacity thereafter in the same employment or otherwise, payable during the. continuance of such partial disability, but subject to reconsideration of the degree of such impairment by the board on its own motion or upon application of any party in interest.” Obviously, the phrase “in all other cases ” signifies that the provisions of the paragraph shall apply only in cases where the injuries received are not confined to a specific member or specific members. By clear implication, if the schedules are sufficient completely to cover the disabilities, paragraph v may not be employed to extend the periods of weeks provided for thereby.

In the case of the award of November 11, 1930, now under consideration, the memorandum of decision. by E. N. Edwards, a member of the Industrial Board, states: “ The former finding that the extent of claimant’s disability caused by his accident of July 26, 1920, is confined to the permanent defects of his left leg, left arm and right arm is hereby confirmed.” On the 13th of November, 1930, notice of the award of November 11th, signed by Frances Perkins, Industrial Commissioner, was served upon the parties. This notice states: “ After careful review of the papers on file, the action of the Board under date of 11.11.30 was to find that the extent of claimant’s disability caused by the accident of July 26, 1920, is confined to the permanent defects of his left leg, left arm, and right arm.” Notice of appeal having been served upon the Industrial Board, that body, on June 30, 1931, in belated compliance with section 23 of the Workmen’s Compensation Law, served and filed “ its findings of fact and rulings of law.” These findings state that, on July 26, 1920, the claimant sustained a fall “ causing him as a result to suffer from a fracture of the upper end of thy, left humerus, compound comminuted fracture of the right oscalcis, contusions of the right ulna nerve, and other, contusions of the body.” The conclusion is drawn therefrom that the claimant was “ totally disabled from July 26,1920, to September 15,1922, and permanently partially disabled thereafter.” It will be observed that the findings, in addition to the leg and arm injuries specified, make mention of contusions of the right ulna nerve.” In the light of the wording of the award, as phrased by Member Edwards, and the notice of the award as phrased by Industrial Commissioner Perkins, we feel justified in assuming that this injury was regarded as comprehended by the injury to the right arm, which the award given was intended in part to cover. It will be noticed also that the -findings specify other contusions of the body.” These injuries, which would not be comprehended by the injuries to arms and legs, may have been considered in making the award, to the extent of the findings that the claimant was “ totally disabled from July 26, 1920, to September Í5, 1922.” There is nothing to indicate, and it has not been found, that these contusions entered into the consideration of the Board in making the award, so far as it found that after September 15, 1922, the claimant was “ permanently partially disabled.” On'the contrary, there is every reason to suppose that the contusions to the right ulna nerve and other contusions of the body ” were not considered in the making of that part of the award which was made, supposedly under the provisions .of subdivision 3-v. For one reason, all such injuries are necessarily of a temporary character. For another, the member of the Industrial Board and the Industrial Commissioner coincide in their statements that in making the new award, the Industrial Board considered that the extent of claimant’s disability was confined “ to the permanent defects of his left leg, left arm and right arm.” The conclusion is inescapable that no injuries other than injuries to specific members, viz., the leg and the two arms, survived to September 15, 1922, when the schedule award was made; that the award of that date was correct in so far as it was held that the disability was compensable under the schedules; that the award of November 11, 1930, now appealed from, unsupported by proof or finding that the claimant’s injuries extended beyond the members provided for by the schedule, had no proper basis, and was not authorized by the provisions of subdivision 3-v, covering “ other cases.”

The order should be affirmed, with costs against the State Industrial Board.

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

Order affirmed, etc.