author: Caedozo, Ch. J.

text:
    Bird S. Coler, as Commissioner of Public Welfare of the City of New York, Respondent, v. The Corn Exchange Bank, Appellant.

      (Argued December 7, 1928;
    decided December 31, 1928.)

      Frank C. Laughlin, Henry M. Carpenter and Stewart W. Bowers for appellant.
    Sections 921-925 of the Code of Criminal Procedure, upon which, coneededly, the action of the plaintiff-respondent is based, are violative of section 6 of article I of the Constitution of the State of New York and the Fourteenth Amendment to the Constitution of the United States in that said sections fail to provide notice of any kind whatever at any stage of proceedings thereunder, and, therefore, attempt to deprive persons of property without due process of law. (People ex rel. Simpson v. Kempner, 154 App. Div. 674; Nerenberg v. Keith, 167 N. Y. Supp. 612; Martin v. Central Vermont R. R. Co., 50 Hun, 347; Windsor v. McVeigh, 93 U. S. 274; Matter of City of Brooklyn, 87 Hun, 54; Twining v. New Jersey, 211 U. S. 78; Roller v. Holly, 176 U. S. 398; Matthews v. Matthews, 240 N. Y. 28; Matter of Wendell v. Lavin, 246 N. Y. 115; People ex rel. N. Y. C. & H. R. R. R. Co. v. Priest, 206 N. Y. 277.)

      George P. Nicholson, Corporation Counsel (Joseph I. Berry, Martin H. Murphy and William E. Fay of counsel), for respondent.
    Sections 921 to 925 of the Code of Criminal Procedure are constitutional. (Biddles, Inc., v. Enright, 239 N. Y. 354; People ex rel. Read v. Overseers of the Poor of the Town of Triangle, 23 Barb. 236; Ward v. Boyce, 152 N. Y. 191; Matthews v. Matthews, 210 App. Div. 652; 240 N. Y. 28; David v. David, 125 Misc. Rep. 292.) Notice to defendants in proceedings under sections 921 to 925 of the Code of Criminal Procedure is provided for in section 74 of the Inferior Criminal Courts Act, as amended by chapter 339 of the Laws of 1919, in effect July 1, 1919, and in provisions of sections 232 to 235 of the Civil Practice Act. Apart from the notice so provided for, seizure of the fund, in itself, constitutes adequate notice to the husband in this action. (People v. O’Neill, 117 App. Div. 826; People ex rel. Frank v. Keeper, 38 Misc. Rep. 233.)
   Caedozo, Ch. J.

Plaintiff, the Commissioner of Public Welfare, made complaint to the Domestic Relations Court that Raffaele DeStefano had abandoned his wife and infant child while residing with them in the city of New York, and had absconded from the State leaving wife and child without means, and likely, unless relieved, to become charges on the public purse.

A warrant was signed and issued by two magistrates of the court, upon a supporting affidavit by the wife, authorizing the Commissioner of Public Welfare to take and seize all the right, title and interest of the absconding husband in a fund deposited to his credit with the defend- and, the Corn Exchange Bank, and upon such seizure to make an inventory of the property taken and to make return of the proceedings with the warrant to the County Court for Bronx county.

Plaintiff has brought this action against the bank to reduce the fund to his possession with appropriate allegations that payment was refused after due demand and service. The defendant has moved for judgment upon the ground that the statute, the basis of the warrant, is a denial of “ due process ” under the Constitution of the State and Nation (N. Y. Constitution, art. I, § 6; U. S. Constitution, amendment XIV). Judgment for the defendant was reversed by the Appellate Term of the Supreme Court (Coler v. Corn Exchange Bank, 132 Misc. Rep. 449), and thereafter final judgment in favor of the plaintiff was rendered by the City Court. The appeal taken directly from that judgment is within the jurisdiction of this court, a constitutional question, and no other, being involved therein (American Historical Society v. Glenn, 248 N. Y. 445, 448).

The warrant of seizure was issued under Code Criminal Procedure, §§ 921, 922, 923, 924, 925. These sections provide in substance that the Commissioner of Public Welfare may apply to two magistrates for a warrant to seize the property of an absconding husband or father leaving wife or child likely to become charges on the public; that upon due proof of the facts, the warrant may be issued; that the officer receiving it may seize the property wherever found within his county, and shall be vested with all the rights and title thereto which the person absconding then had; that return of all proceedings under the warrant shall be made to the next term of the County Court; that thereupon that court, upon inquiring into the circumstances of the case, may confirm or discharge the warrant and seizure; that in the event of confirmation the court shall from time to time direct what part of the property shall be sold, and how the proceeds shall be applied to the maintenance of spouse or children; and on the other hand that if the party against whom the warrant has issued shall return and support the spouse or children so abandoned, or give satisfactory security for such support, then the warrant shall be discharged, and the property restored.

The procedure thus authorized has its roots in a distant past.

In 1718 the Parliament of England enacted a statute which recites a like evil and prescribes a like remedy (5 Geo. I, ch. 8). The recital is that:

Divers persons run or go away from their places of abode into other counties or places, and sometimes out of the kingdom, some men leaving their wives, a child or children, and some mothers run or go away, leaving a child or children, upon the charge of the parish or place where such child or children was or were born, or last legally settled, although such persons have some estates, which should ease the parish of their charge, in whole or in part.”

Whereupon the enacting clause provides:

That it shall and may be lawful for the churchwardens or overseers of the poor of such parish or place where any such wife, or child or children shall be so left, upon application to, and by warrant or order from any two justices of the peace, to take and seize so much of the goods and chattels, and receive so much of the annual rents and profits of the lands and tenements of such husband, father or mother, as such two justices of the peace, as aforesaid, shall order and direct, for or towards the discharge of the parish or place where such wife, child or children are left, for the bringing up and providing for such wife, child or children; which warrant or order being confirmed at the next quarter sessions, it shall be lawful for the justices of such quarter sessions to make an order for the churchwardens or overseers for the poor of such parish or place, to dispose of such goods and chattels by sale, or otherwise, or so much of them, for the purposes aforesaid, as the court shall think fit, and to receive the rents and profits, or so much of them as shall be ordered by the sessions, as aforesaid, of his or her lands and tenements, for the purposes aforesaid.” (See also 22 Halsbury, Laws of England, § 1209.)

The Statute of George I was enacted in substantially the same form on March 8, 1773, by the Colonial Legislature of New York. After the separation from England, the State Legislature placed a like act upon the statute books of the State, first in 1784 (Act of Apr. 17, 1784), and again in 1788 (L. 1788, ch. 62). From there, the act passed into the Revised Laws of 1813 (Act of Apr. 8, 1813; R. L. chap. 78, § 22), and thence in 1829 into the Revised Statutes (1 R. S. ch. 20, title 1, §§ 8 and 9), where the subject of the seizure was broadened to include things in action generally as well as rents and goods and chattels. The Code of Criminal Procedure has carried down the statute to our own day unchanged in point of substance. During all this long history there has been, so far as the published records show, no challenge of its binding force, though the enforcement of its remedies has been part of the routine of the criminal courts. Judges, as well as administrative officers, have taken its validity for granted (People ex rel. Read v. Overseers of Poor, 23 Barb. 236; Downing v. Rugar, 21 Wend. 178; Goodman v. Alexander, 165 N. Y. 289, 291).

Not lightly vacated is the verdict of quiescent years (Ownbey v. Morgan, 256 U. S. 94, 108, 109; Otis Co. v. Ludlow Mfg. Co., 201 U. S. 140, 154; Biddles, Inc. v. Enright, 239 N. Y. 354, 361).

“ The Fourteenth Amendment, itself a historical product, did not destroy history for the States and substitute mechanical compartments of law all exactly alike. If a thing has been practiced for two hundred years by common consent, it will need a strong case for the Fourteenth Amendment to affect it ” (Jackman v. Rosenbaum Co., 260 U. S. 22, 31).

This background of tradition gives the setting of the statute and the method of approach when today its validity is challenged.

Much is made of the analogy between seizure under the statute and seizure under an attachment or other provisional remedy. We agree with the appellant that the analogy is only partial and imperfect. There, the property, though taken into the custody of the law, is held until an opportunity is given to a defendant, after suitable monition, to offer his defense (Windsor v. McVeigh, 93 U. S. 274, 279; Coe v. Armour Fertilizer Works, 237 U. S. 413, 425; Grannis v. Ordean, 234 U. S. 385, 393; Pennington v. F. N. Bank, 243 U. S. 269; Security Sav. Bank v. California, 263 U. S. 282, 287). Here the officer makes return of his proceedings to the County Court which inquires into the merits, and confirms or annuls the seizure without further warning of its action to the putative absconder (People ex rel. Read v. Overseers of Poor, supra). No doubt there are times, as under the Trading with the Enemy Act (40 Stat. 411, ch. 106; 40 Stat. 1020, ch. 201, § 7-c), when a conserving custody is permissible as the result of seizure without notice (Miller v. Lautenburg, 239 N. Y. 132; Central Union Trust Co. v. Garvan, 254 U. S. 554, 568; Comm. Trust Co. of N. J. v. Miller, 262 U. S. 51). A custodian is then in the position of a common-law receiver. The disposition of the property is postponed for a term prescribed by law, and thereafter rights and remedies are transferred to the proceeds as a substituted fund. This statute does something more. It seizes and then distributes at the ensuing term of court.

We think the act is valid as a regulation of the family relation binding upon residents. A system of community property exists in many States (Arnett v. Reade, 220 U. S. 311). The Legislature of New York may say, if it will, that as an incident of marriage or parenthood a like system shall apply to any property of spouse or parent acquired in the future (Seeber v. Randall, 102 Fed. Rep. 215, 217; Sandoval v. Priest, 210 Fed. Rep. 814; Nott v. Nott, 111 La. Ann. 1028; Kerr v. Urie, 86 Md. 72; Long v. Hess, 154 Ill. 482; Baker’s Executors v. Kilgore, 145 U. S. 487). By the statute in question, it has done something less, but something measurably akin. What is vaguely known as the police power, however indefinite its faculties, must have competence at least for this. The statute was in force long before the absconding husband made his deposit in the defendant bank, and long before his marriage. He knew, or must be assumed to have known, when he took up his abode within the State, that under the supervision of the law his property would be applied, without notice, to the discharge of his duty, the support of wife and child, if he left them destitute behind him. This was as much an incident to the family relation as dower or curtesy or any other marital right. A system of common ownership, a form of statutory assignment, was established for abandoned dependents to the extent of their necessities. Proof before the warrant with confirmatory proof thereafter, reduces to a minimum the risk of error or oppression. Whatever risk remains must be charged to the relation with its responsibilities and duties. The law does not stand upon punctilios if there is a starving wife at home. It “ does not impose upon the States a duty to establish ideal systems for the administration of justice, with every modern improvement and with provision against every possible hardship that may befall ” (Ownbey v. Morgan, supra). It keeps its exactions within the bounds of long inherited traditions (cf. Murray's Lessee v. Hoboken L. & I. Co., 18 How. [U. S.] 272, 278). The absconder counts the cost when he selects a domicile within the State. Submission is then an incident to parenthood and marriage.

In holding that the act is valid as a regulation by the Legislature of the family relation, we assume that the owner, the victim of the seizure, is in truth a husband or a parent, bis matrimonial domicile here and not abroad. Jurisdiction is, of course, dependent upon the existence of the relation which the statute seeks to regulate. In the absence of that relation, the warrant and any proceedings under it may be disregarded as a nullity (Thompson v. Whitman, 18 Wall. [U. S.] 457). We do not read the statute as prescribing anything to the contrary. If it were open to a different reading, it would be void to that extent. The owner may come forward at any time and reclaim the fund from any one on the ground that in truth he was neither spouse nor parent, though charged as such in the petition. Neither the provisional warrant of the magistrates nor the confirmatory judgment later will then be evidence against him. Not improbably he may come forward at any time and contest the charge that he absconded, though admitting parenthood and marriage. We leave that question open. If he is within the jurisdiction, he will learn promptly of the seizure, and being present or nearby will presumably defend when defense there ought to be. If he chooses to leave the jurisdiction, the Legislature may say, in view of its control of the marital relation, that he must take the chance of an appropriation of his property for the support of his dependents (cf. Ownbey v. Morgan, supra, at p. 111). This case does not require us to hold, however, that he will even then be bound unless in truth he has absconded. Here we have neither proof nor claim that the jurisdictional relation, however broadly interpreted, was lacking at the time of seizure. Raffaele DeStefano is not here, denying that he is an absconding husband. The bank, claiming through and under him, is not here with a denial. It admits the jurisdictional relation, for the complaint, explicit in averment upon that head, is untraversed by an answer. No doubt, the bank’s admission does not bind its depositor, but its plight in that regard is no worse than that of many a stakeholder harassed by conflicting claims and forced to choose between them (Scheffer v. Erie Co. Sav. Bank, 229 N. Y. 50, 53; Newhall v. Longacre Bank, 248 N. Y. 252, 254). The statute, if valid as to spouse or parent, is valid also as to another defending in his right. The bank has the same defenses that are open to its depositor, or so we shall assume, but surely it can have no greater ones. Confronted by the claim of a statutory assignee, it must ascertain the facts and wage the contest as it can (New-hall v. Longacre Bank, supra). If it fails to learn the truth, the chance of double payment is a common risk of life (Scheffer v. Erie Co. Sav. Bank, supra).

The case in brief is this: the statute, though it dispense with notice, is valid and effective as against an absconding spouse or parent. The victim of the seizure may nullify the whole proceeding, including any adjudication attempted in his absence, if there is lacking the jurisdictional relation which is the basis of his duty. He is then in the position of a non-resident who upon a false statement of his dwelling place has been subjected to a judgment after substituted service valid only as to residents (Cont. N. Bank v. Thurber, 74 Hun, 632; 143 N. Y. 648; McDonald v. Mabee, 243 U. S. 90; cf. Miedreich v. Launesiein, 232 U. S. 236), or in the position of a taxpayer whose chattels have been subjected to distress upon a false averment by a taxing officer that his taxes are unpaid (Murray’s Lessee v. Hoboken Land & Improvement Co., supra), or in the position of an owner whose property has been seized under a wrongful exercise by a public officer of the power to abate a nuisance (People ex rel. Copcutt v. Board of Health, 140 N. Y. 1; Lawton v. Steele, 152 U. S. 133; Samuels v. McCurdy, 267 U. S. 188, 200), or of one whose bank deposit has been paid to the holders of letters testamentary issued by a Surrogate’s Court upon proof of his death, though in truth he was alive (Scott v. McNeal, 154 U. S. 34; cf. Cunnius v. Reading School District, 198 U. S. 458), or of one injured in person or property by an administrative order (Public Clearing House v. Coyne, 194 U. S. 497). In these and like instances, the order is a nullity if there is lacking the fact upon which jurisdiction is dependent, yet valid and decisive otherwise. DeStefano will be unaffected by any adjudication made at any stage of these proceedings if the jurisdictional relation, the postulate behind the seizure, is found to be unreal. On the other hand, if the relation exists, he is not aggrieved by the seizure, nor has due process been denied him (Hatch v. Reardon, 204 U. S. 152, 160, 161; Hendrick v. State of Md., 235 U. S. 610). The bank, claiming under him, can gain no better right.

We have preferred to rest our judgment upon a ruling that, the jurisdictional relation being established or conceded, the property of an absconding spouse or parent may be applied without notice other than the seizure to the support of wife and child. We reach the same result, however, if we assume that notice is as necessary in such conditions as at the suit of any stranger. Seizure of the deposit at the instance of a public officer was warning to the owner that a proceeding had been begun (Windsor v. McVeigh, 93 U. S. 274, 279). If there was need of other warning to supply him with an opportunity for a hearing, it was given by the statute. The statute told him, a resident of the State, that the proceeding would come on for hearing at the next term of the County Court. This might be adequate notice or inadequate according to the circumstances (Roller v. Holly, 176 U. S. 398, 409; Goodrich v. Ferris, 214 U. S. 71). Under the law, the terms of County Courts are publicly appointed (Judiciary Law, § 192; Cons. Laws, ch. 30). If the term next appointed gave a reasonable opportunity to the owner to appear and defend, he is not aggrieved though in other circumstances the time might be too short. The burden is on the defendant to show that notice was inadequate.

The judgment should be affirmed with costs.

Pound, Crane, Andrews, Lehman, Kellogg and O’Brien, JJ., concur.

Judgment affirmed.


source: Caselaw Access Project

author: Crane, J.

license: Public Domain

text:
    Jones & Brindisi, Inc., Appellant, v. Samuel Breslaw, as Executor of Louis Kaplan, Deceased, et al., Respondents.

      (Argued December 6, 1928;
    decided December 31, 1928.)

      Carroll Blakely Low and Walter Carroll Low for appellant.
    The guaranty of Bernstein & Kaplan covered the renewal term in the lease provided. (Houlihan v. Bolton’s Sons, 109 Misc. Rep. 325; Orr v. Doubleday, Page & Co., 223 N. Y. 334; Masset v. Ruh, 235 N. Y. 462.)

      Henry W. Williams for respondents.
    A guaranty of the rent due under a lease does not apply to a renewal pursuant to an option given in the lease. (Knowles v. Cuddeback, 19 Hun, 590; Kanouse v. Wise, 76 N. J. L. 423; United States v. Bayly, 39 App. [D. C.] 105; Fasnacht v. Winkelman, 21 La. Ann. 727; Brewer v. Thorp, 35 Ala. 9; Gadsden v. Quackenbush, 9 Rich. [S. C.] 222.) No reason existed for making Breslaw as executor of the deceased partner Kaplan, a party to this action and the complaint cannot be sustained as to him. (Potts v. Baldwin, 67 App. Div. 434; 173 N. Y. 335; Seligman v. Friedlander, 199 N. Y. 376; Dennerlein v.
      Martin, 247 N. Y. 145; Nickell v. Tracy, 184 N. Y. 386; Potter v. Merchants’ Bank, 28 N. Y. 641; Hackley v. Draper, 4 T. & C. 614; 60 N. Y. 88.) No authority was shown for Kaplan, who signed the guaranty for the firm of Bernstein & Kaplan, to bind Mrs. Bernstein and he had no implied authority, and the complaint cannot be sustained as to her. (First National Bank v. Farson, 226 N. Y. 218.)
   Crane, J.

On the fifth day of April, 1919, Jones & Brindisi, Inc., a domestic corporation, leased to Abram Bernstein and Samuel Bernstein, a copartnership doing business under the name of Bernstein Bros., part of the second floor in a' building known as No. 6 East Thirty-ninth street and 5 East Thirty-eighth street, in the borough of Manhattan, city of New York, “ for the term of two years (2 yrs.) and four months (4 mos.) to commence at noon on the first day of June, 1919, and to end at noon on the thirtieth day of September, 1921, at the yearly rent of three thousand dollars ($3,000).” The rent was payable in equal monthly payments in advance. The thirteenth clause of the lease read as follows:

“ Thirteenth: It is further understood and agreed by and between the parties hereto that six (6) months before the termination of the present lease, the Landlord will give the tenant the option of renewing present lease for two (2) years upon the same terms and conditions and at the same rental.”

Below the signatures on the lease was the following guaranty:

“ We hereby guarantee the payment of the rent as stipulated in above lease.
“ BERNSTEIN & KAPLAN,
“ By L. Kaplan.”

On February 26, 1921, more than six months before the expiration of the term, the tenants exercised their option and extended the lease for two years, as therein provided. In May of 1922 Bernstein Bros, vacated the premises and defaulted in their rent thereafter.

Executions issued on the judgments against Abram and Samuel Bernstein having been returned unsatisfied, this action has been commenced against Rose Bernstein and Louis Kaplan on the guaranty. Kaplan having died, his executor has been made defendant. The holding in the court below has been that the guaranty applied only to the first two years and four months, not to the extended term. This, we think, is contrary to the intention of the parties, as gathered from the surrounding circumstances and the wording of the instrument.

Abram Bernstein and Samuel Bernstein were sons of Rose Bernstein. Louis Kaplan was her brother. Bernstein and Kaplan were in the junk business in Glens Falls. Mrs. Bernstein left everything in the management of the business to her brother. “ He was my brother and I left to him my business. I know nothing about 'it. Q. And you gave him permission to do anything that he thought proper? A. Yes. He was my brother. He did the whole business. I never went inside.”

Bernstein Bros., composed of Abram and Samuel Bernstein, desired a lease of the premises in question on East Thirty-ninth street. They could not obtain it until the rent was guaranteed. When the lease was presented to the landlord for signature, it contained the guaranty of. their mother and their uncle, that is, the firm of Bernstein & Kaplan, signed by Louis Kaplan. These guarantors were not strangers to the tenants; they were near relatives interested in their welfare. If the landlord required a guaranty of the rent payable by these young men for the period of two years and four months, it is reasonable to assume that the same security would continue for the full term of the lease, that is, the full period during which it, the landlord, was compelled by its agreement to permit the tenants to occupy the premises. The tenants had the right, which they exercised, of leasing the premises for the full term of four years and two months. The landlord was bound for this period. Why should the guaranty cover only two years of it? The words of the guaranty express no such limitation. They are: “We hereby guarantee the payment of the rent as stipulated in above lease.” The rent stipulated in the above lease was for four years and two months if the tenants exercised the privilege of extension. They exercised the option and became bound to pay the rent stipulated in the lease. There was no new lease; none was required; all the stipulations and agreements were contained in the one instrument which by the election of the tenant, continued for four years and two months. (Masset v. Ruh, 235 N. Y. 462; On v. Doubleday, Page & Co., 223 N. Y. 334.) These business people knew what a renewal clause in a lease meant. Had they intended merely to be bound by a term of two years and four months or any other period less than the full term, the contract of guaranty would have so stated. It is evident they had nothing of this kind in mind. The young men going into business in New York and needing floor space, procured a lease, upon the mother and uncle guaranteeing the rent for the full term of the lease. This is what the parties intended to do; this is what they did do. Nothing in the guaranty indicates a different intention. On the contrary, it has this meaning.

The case of Knowles v. Cuddeback (19 Hun, 590) is cited as an authority in favor of the surety under similar facts. I say “ similar ” because the facts are not the same in one important detail. The tenant in that case failed to exercise his option thirty days before the expiration of the lease; he gave only three days’ notice of election. It might have been held that the waiver by the landlord in consenting to this short notice was a release of the surety. No such point, however, seems to have been made in the case, as the surety was held not liable on the ground that the renewal was a new lease. The court said: “ The privilege of renewal is more like a buyer’s option not uncommon in modern transactions, and it is generally understood that, if the option is availed of, a transfer or conveyance must be formally given to effect a consummation of the contract.” And in distinguishing the case of Decker v. Gaylord (8 Hun, 110) the court said that in that case it appeared that the surety had waived the making of a new lease. The holding that the renewal is for a new contract or a new lease is contrary to what we decided in Orr v. Doubleday, Page & Co. (supra). We there said:

The exercise by the defendant of the privilege of renewal extended the term of the lease for the additional period of ten years as a present demise for the full term of twenty years, the last half of which was to take effect at the termination of the first, at the option of defendant. A new lease for the additional years was not necessary. * * * The renewal did not evoke new conditions of continuance in occupation and a new lease would be useless. * * * Inasmuch as the defendant holds the premises for the full term of twenty years by virtue of the original lease, no question as to the application of the Statute of Frauds arises.”

This distinction explains U. S. v. Bayley (39 App. [D. C.] 105). The cases of Gadsden v. Quackenbush (9 Richardson [S. C.], 222) and Brewer v. Thorp (35 Ala. 9) are not in point. The Supreme Court of New Jersey in Kanouse v. Wise (76 N. J. L. 423), on a demurrer to a declaration, held that the clause in a lease for one year, with the privilege to renew this lease upon the same terms and conditions for a further period of four years,” is an agreement that the lessor at the option of the lessee will make a new lease upon the same terms for a further period, and that while the execution of a written lease is not required if the tenant holds over, nevertheless, it is, so far as the surety is concerned, a new lease. In the light of our previous decisions, we cannot adopt this conclusion. Fasnacht v. Winkelman (21 La. Ann. 727) decides the point, but cites no authorities and gives no reasons other than the statement that the surety did not consent to the renewal.

From the evidence which we have quoted above, as given by Mrs. Bernstein, the finding is not justified that the guaranty made by Kaplan in the name of the partnership was authorized by Mrs. Bernstein. She appears to be insolvent, which justifies the bringing in as a party to this action the executor of the deceased partner, Louis Kaplan. (Hoyt v. Bonnett, 50 N. Y. 538, 545; Potts v. Baldwin, 67 App. Div. 434; affd., as Potts v. Dounce, 173 N. Y. 335.) The executor nevertheless is a proper party under any circumstances, as the guaranty was signed by Louis Kaplan, making him liable individually even if he had no authority to bind Rose Bernstein.

The order of the Appellate Division states that the reversal is upon questions of fact and of law. No question of fact is reversed. Finding IV of the trial court’s decision reads as follows:

“ IV. That plaintiff executed and delivered the agreement aforesaid in consideration of and upon the written agreement of the defendant, Rose Bernstein, and one Louis Kaplan, doing business as copartners under the firm name and style of Bernstein & Kaplan, then and there entered into by them with the plaintiff and duly executed and delivered in behalf of said firm by said Louis Kaplan guaranteeing the payment to plaintiff of the rent as stipulated in said agreement of lease.”

This the Appellate Division changed to read:

“ That the plaintiff executed and delivered the agreement aforesaid in consideration of and upon the written agreement of the defendant Rose Bernstein and one Louis Kaplan, doing business as copartners under the firm name and style of Bernstein & Kaplan, subjoined to said lease, and reading: ' We hereby guarantee the payment of the rent as stipulated in above lease. Bernstein & Kaplan, By L. Kaplan.’ ”

This is not a reversal of a finding of fact; it is merely quoting the words of the lease, instead of stating their meaning. The change, if any, is in the finding of law or the conclusion' of law to be drawn from the finding' of fact made by the trial judge. In other words, the reversal here is purely upon questions of law. (Goodman v. Marx, 234 N. Y. 172, bottom of p. 174; Rosenberg Bros. & Co. v. Buffum Co., 234 N. Y. 338, concluding paragraph, p. 344.) As we disagree with the Appellate Division in this conclusion of law, the judgment of the Appellate Division should be reversed in so far as it dismisses the complaint against the defendant Breslaw and the judgment of the Trial Term against said defendant should be affirmed, with costs in this court and in the Appellate Division. The judgment of the Appellate Division in so far as it dismisses the complaint against the defendant Bernstein should be affirmed, with costs.

Cardozo, Ch. J., Pound, Andrews, Lehman, Kellogg and O’Brien, JJ., concur.

Judgment accordingly.


author: Per Curiam.

text:
    The People of the State of New York, Respondent, v. Charles J. Dryden, Appellant.

      (Argued November 26, 1928;
    decided December 31, 1928.)

      John J. Curtin and Wesley S. Sawyer for appellant.
    The forged check was uttered in New Jersey and defendant was erroneously convicted of uttering the same in New York. (Rex v. Collicott, Russ. & R. 212; 4 Taunt. 300; People v. Rathhun, 21 Wend. 509; People v. Werblow, 241 N. Y. 55.) The trial court committed error in excluding and interfering with cross-examination by defendant’s attorney; in making disparaging and contemptuous remarks about defendant’s case and attorney; in threatening defendant’s attorney with punishment, and in assisting the People’s case and appearing as opposed to the defense and as an advocate of conviction. (Sarconi v. 122 W. 26th St. Corp.) 241 N. Y. 340.) It was reversible error for the court to participate in the prosecution and make statements which were prejudicial to defendant’s case and attorney. (People v. Hill, 37 App. Div. 327; People v. Mayer, 132 App. Div. 646; Peterson v. Eighmie, 175 App. Div. 113; Kleinert v. Federal Brewing Co., 107 App. Div. 485; People v. Brow, 90 Hun, 509.)

      Joab H. Banton, District Attorney (Robert C. Taylor, Albert B. Unger and Edwin B. McGuire of counsel), for respondent.
    The forged check was uttered in New York county. (People v. Rising, 207 N. Y. 195; People v. Zayas, 217 N. Y. 78; People v. Werblow, 241 N. Y. 55; People v. Moran, 123 N. Y. 254; People v. Gardner, 144 N. Y. 119; People v. Sullivan, 173 N. Y. 122; People v. Collins, 234 N. Y. 355; People v. Sobieskoda, 235 N. Y. 411; People v. Rizzo, 246 N. Y. 334; People v. Buckley, 91 App. Div. 586; People v. Bloom, 149 App. Div. 295.) The defendant received a fair trial. The rulings of the trial court were proper. No error appears in the court’s charge. (People v. Bresler, 218 N. Y. 567; McCarney v. People, 83 N. Y. 408; People v. Decker, 143 App. Div. 590; People v. Webster, 139 N. Y. 73; People v. Tice, 131 N. Y. 651; People v. Braun, 158 N. Y. 558.)
   Per Curiam.

The forged check, in form drawn upon a New York city bank, was delivered in New Jersey to an innocent payee, with the intent that the check should be presented in New York city for payment and there paid. It was so presented and paid. For these reasons, a majority of the members of the court entertain the view that the crime of uttering the forged check was partly committed in New York county. Other members think that the indictment having charged an uttering in New York county, necessarily charged possession in New York with intent to utter; consequently, that within the terms of the indictment the crime of uttering was committed in New York. (Penal Law, sec. 883.) All agree that defendant was properly indicted and tried in New York county. That the trial judge, upon various occasions throughout the trial, commented upon the conduct of the case by the defendant’s counsel, in language which was intemperate and entirely unbecoming in a judicial officer, cannot be doubted. We believe that he would concur in that belief if he were to read his remarks over now that the heat of the trial has ended. We have carefully examined the record and have found no word uttered by defendant’s counsel, and no act performed by him, which merited rebuke. Were the case a doubtful one we should have no hesitation in reversing the judgment for these or like remarks if made in such circumstances as to constitute error of law. However, we have found that the case made against the defendant was so well fortified by the evidence that no reasonable doubt of guilt could have been entertained by the jury. A verdict of acquittal would have involved a clear case of a miscarriage of justice. We feel constrained, therefore, to affirm the judgment.

The judgment of conviction should be affirmed.

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

Judgment affirmed.


text:
    The Globe and Rutgers Fire Insurance Company, Appellant, v. General Adjustment Bureau, Respondent.
    (Argued December 3, 1928;
    decided December 31, 1928.)

      Robert Kelly Prentice for appellant.
    The dismissal of the complaint upon a reversal of the judgment as against the weight of evidence was in and of itself error. (Goodman v. Marx, 234 N. Y. 172; Caldwell v. Nicolson, 235 N. Y. 209.)

      Edgar J. Nathan and Brison Howie for respondent.
    The denial of motion to dismiss at the close of the case was error. The Appellate Division in its reversal properly ordered a dismissal. (Goodman v. Marx, 234 N. Y. 172; Eno v. Klein, 236 N. Y. 543; Murtha v. Ridley, 232 N. Y. 488; Nod-Away Co. v. Carroll, 240 N. Y. 252; Dodge v. Cornelius, 168 N. Y. 242.)
   Per Curiam.

Held, the dismissal of the complaint was error.

There being testimony from which the jury might infer lack of diligence on the part of the defendant’s agent, there was also testimony sufficient to support a recovery. If certain items in the proofs of loss presented by the insured to the insurer and upon which the loss was adjusted were largely overvalued, prima facie the plaintiff suffered injury. If in fact the adjusted loss did not exceed the fire loss because of undervaluation of other items, the burden was on the defendant to show that fact.

The judgment of the Appellate Division should be modified by striking out the direction for a dismissal of the complaint and by granting a new trial and as so modified affirmed, with costs in this court and in the Appellate Division to abide the event.

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

Judgment accordingly.


author: Pound, J.

text:
    John A. Langel, Respondent, v. Isidor Betz, Appellant.

      (Argued December 7, 1928;
    decided December 31, 1928.)

      Abraham L. Pomerantz for appellant.
    A vendor cannot enforce specific performance against the assignee of a vendee, irrespective of what acts are done by the assignee under the contract, short of a novation or an express assumption of the obligations of the contract by the assignee. (Lisenby v. Newton, 120 Cal. 571; Mound Valley Vitrified Brick Co. v. Mound Valley National Gas & Oil Co., 258 Fed. Rep. 936; Williams v. McWhorter, 218 Pac. Rep. 791; Comstock v. Hitt, 37 Ill. 542; Wilson v. Beazley, 186 Cal. 437; Corbus v. Teed, 69 Ill. 205; Gross v. Thomson’s Estate, 286 Ill;. 185; Cameron Steam Pump Works v. Lubbock Light & Ice Co., 167 S. W. Rep. 256; Smith v. Kellog, 46 Vt. 560; Hugel v. Habel, 132 App. Div. 327.) Neither in logic nor in principle can the holding of the court below be sustained. (Epstein v. Gluckin, 179 N. Y. Supp. 221.)

      Harry Gittelson for respondent.
    Defendant’s requests to adjourn closing of title are tantamount to a demand for performance, and consequently he assumed the obliga-

      tions of the vendee. (Epstein v. Gluckin, 233 N. Y. 490; Merchants’ Bank v. Thomson, 55 N. Y. 7; Page v. McDonald, 55 N. Y. 299; Day v. Hunt, 112 N. Y. 191; H. & H. Corp. v. Broad Holding Corp., 204 App. Div. 669.)
   Pound, J.

Plaintiff, on August 1st, 1925, made a contract with Irving W. Hurwitz and Samuel Hollander for the sale of certain real property. This contract the vendees assigned to Benedict, who in turn assigned it to Isidor Betz, the defendant herein. The assignment contains no delegation to the assignee of the performance of the assignor’s duties. The date for performance of the contract was originally set for October 2d, 1925. This was extended to October 15th, 1925, at the request of the defendant, the last assignee of the vendees. The ground upon which the adjournment was asked for by defendant was that the title company had not completed its search and report on the title to the property. Upon the adjourned date the defendant refused to perform. The vendor plaintiff was ready, able and willing to do so, and was present at the place specified with a deed, ready to tender it to the defendant who did not appear.

The plaintiff as vendor brought this action against the defendant assignee for specific performance of the contract. Upon the foregoing undisputed facts he has had judgment therefor.

The question is: Can the vendor obtain specific performance of a contract for the sale of real estate against the assignee of the vendee, where the assignee merely requests and obtains an extension of time within which to close title? ”

Here we have no novation, no express assumption of the obligations of the assignor in the assignment and no demand for performance by the assignee.

The mere assignment of a bilateral executory contract may not be interpreted as a promise by the assignee to the assignor to assume the performance of the assignor’s duties, so as to have the effect of creating a new liability on the part of the assignee to the other party to the contract assigned. The assignee of the vendee is under no personal engagement to the vendor where there is no privity between them. (Champion v. Brown, 6 Johns. Ch. 398; Anderson v. N. Y. & H. R. R. Co., 132 App. Div. 183, 187, 188; Hugel v. Habel, 132 App. Div. 327, 328.) The assignee may, however, expressly or impliedly, bind himself to perform the assignor’s duties. This he may do by contract with the assignor or with the other party to the contract. It has been held (Epstein v. Qluckin, 233 N. Y. 490) that where the assignee of the vendee invokes the aid of a court of equity in an action for specific performance, he impliedly binds himself to perform on his part and subjects himself to the conditions of the judgment appropriate thereto. “ He who seeks equity must do equity.” The converse of the proposition, that the assignee of the vendee would be bound when the vendor began the action, did not follow from the decision in that case. On the contrary, the question was wholly one of remedy rather than right and it was held that mutuality of remedy is important only so far as its presence is essential to the attainment of the ends of justice. This holding was necessary to sustain the decision. No change was made in the law of contracts nor in the rule for the interpretation of an assignment of a contract.

A judgment requiring the assignee of the vendee to perform at the suit of the vendor would operate as the imposition of a new liability on the assignee which would be an act of oppression and injustice, unless the assignee had, expressly or by implication, entered into a personal and binding contract with the assignor or with the vendor to assume the obligations of the assignor.

It has been urged that the probable intention of the assignee is ordinarily to assume duties as well as rights and that the contract should be so interpreted in the absence of circumstances showing a contrary intention. The American Law Institute’s Restatement of the Law of Contracts (§ 164) proposes a change in the rule of interpretation of assigned contracts to give as full effect to the assumed probable intention of the parties as the law permits. The following statement is proposed:

“ Section 164. Interpretation of Words Purporting to Assign a Bilateral Contract and Effect of Acceptance of the Assignment by the Assignee.

(1) Where a party to a bilateral contract which is at the time wholly or partially executory on both sides, purports to assign the whole contract, his action is interpreted, in the absence of circumstances showing a contrary intention, as an assignment of the assignor’s rights under the contract and a delegation of the performance of the assignor’s duties.

(2) Acceptance by the assignee of such an assignment is interpreted, in the absence of circumstances showing a contrary intention, as both an assent to become an assignee of the assignor’s rights and as a promise to the assignor to assume the performance of the assignor’s duties.”

This promise to the assignor would then be available to the other party to the contract. (Lawrence v. Fox, 20 N. Y. 268; 1 Williston on Contracts, § 412.) The proposed change is a complete reversal of our present rule of interpretation as to the probable intention of the parties. It is, perhaps, more in harmony with modern ideas of contractual relations than is the archaic view of a contract as creating a strictly personal obligation between the creditor and debtor ” (Pollock on Contracts [9th ed.], 232), which prohibited the assignee from suing at law in his own name and which denied a remedy to third party beneficiaries. “ The fountains out of which these resolutions issue ” have been broken up if not destroyed (Seaver v. Ransom, 224 N. Y. 233, 237), but the law remains that no promise of the assignee to assume the assignor’s duties is to be inferred from the acceptance of an assignment of a bilateral contract, in the absence of circumstances surrounding the assignment itself which indicate a contrary intention.

With this requirement of the interpretation of the intention of the parties controlling, we must turn from the assignment to the dealings between the plaintiff and the defendant to discover whether the defendant entered into relations with the plaintiff whereby he assumed the duty of performance. The assignment did not bring the parties together and the request for a postponement differs materially from the commencement of an action in a court of equity, whereby the plaintiff submits himself to the jurisdiction of the court or from a contractual assumption of the obligations of the assignor. If the substance of the transaction between the vendor and the assignee of the vendee could be regarded as a request on the part of the latter for a postponement of the closing day and a promise on his part to assume the obligations of the vendee if the request were granted, a contractual relation arising from an expression of mutual assent, based on the exchange of a promise for an act, might be spelled out of it; but the transaction is at least as consistent with a request for time for deliberation as to the course of conduct to be pursued as with an implied promise to' assume the assignor’s duties if the request were granted. The relation of promisor and promisee was not thereby expressly established and such relation is not a necessary inference from the nature of the transaction. When we depart from the field of intention and enter the field of contract, we find no contractual liability; no assumption of duties based on a consideration.

.Plaintiff contends that the request for an adjournment should be construed (time not being the essence of the contract) as an assertion of a right to such adjournment, and, therefore, as a binding act of enforcement, whereby defendant accepted the obligations of the assignee. Here again we have an equivocal act. There was no demand for an adjournment as a matter of right. The request may have been made without any intent to assert a right. It cannot be said that by that act alone the assignee assumed the duty of performance.

Furthermore, no controlling authority may be found which holds that a mere demand for performance by the vendee’s assignee creates a right in the complaining vendor to enforce the contract against him. (H. & H. Corp. v. Broad Holding Corp., 204 App. Div. 569. See 8 Cornell Law Quarterly, 374; 37 Harvard Law Review, 162.) That question may be reserved until an answer is necessary.

The judgment of the Appellate Division and that of the Special Term should be reversed and the complaint dismissed, with costs in all courts.

Cardozo, Ch. J., Crane, Andrews, Lehman, Kellogg and O’Brien, JJ., concur.

Judgments reversed, etc.


text:
    Augustus J. Connor, Respondent, v. Western New York Motor Lines, Inc., Appellant.

      (Argued December 7, 1928;
    decided December 31, 1928.)

      Frank Gibbons for appellant.
    Section 30 of the General Highway Traffic Law furnished a rule of conduct for passengers in all vehicles. The plaintiff violated this law when he allowed his arm to protrude through the window a distance of four inches, and was, therefore, guilty of contributory negligence. (Brown v. Shyne, 242 N. Y. 176; Martin v. Herzog, 228 N. Y. 164; Corbett v. Scott, 243 N. Y. 66; Mabs v. Park & Tilford, 200 App. Div. 75; Giminski v. Irving, 210 App. Div. 343; Morton v. Myer, 218 App. Div. 216; Dodikan v. Smith, 221 App. Div. 383; Clark v. Doolittle, 205 App. Div. 697; Sias v. Rochester Ry. Co., 18 App. Div. 506.)

      Bayard J. Stedman for respondent.
    The question of plaintiff’s alleged contributory negligence was clearly one of fact and properly submitted to the jury, and their finding was justified by the evidence of the entire case and is conclusive. (Tucker v. Buffalo Railway Co., 53 App. Div. 571; 169 N. Y. 589; Francis v. N. Y. Steam R. R. Co., 114 N. Y. 380.) The contention that the plaintiff was guilty of contributory negligence, as a matter of law, because of subdivision 1 of section 20 of the General Highway Traffic Law, cannot be sustained. (Ward v. International R. R. Co., 206 N. Y. 8.)
   Crane, J.

Western New York Motor Lines, Inc., is a domestic corporation operating buses for the transportation of passengers in the city of Batavia, New York. On the 26th day of August, 1927, the plaintiff became a passenger on one of the defendant’s motor buses, intending to go to the grounds of the Genesee County Agricultural Society in the western part of the city. Having paid his fare upon entering the bus, he walked to the seat which ran across the rear of the car, and sat down on the right side by an open window. Being midsummer, the windows were open, no doubt for the comfort of the passengers. Taking his newspaper, the plaintiff began to read, leaning on the window sill, his arm projecting out some three or four inches. There was no screen or guard to the window. Through the negligent operation of the driver, the bus ran so close to the curbstone that the plaintiff’s arm brushed against a trolley pole, inflicting injuries.

The questions of the defendant’s negligence and the plaintiff’s contributory negligence were left to the jury under a fair charge, in accordance with the rule laid down in a similar case (Tucker v. Buffalo Railway Co., 53 App. Div. 571; affd., 169 N. Y. 589). In the Appellate Division and in this court, the defendant has sought the application in its behalf of section 20, subdivision 1, of the General Highway Traffic Law (Cons. Laws, ch. 70). This law was not referred to upon the trial, and the question has been raised for the first time on appeal. The position of the defendant is that its exception to the denial of the motion for a nonsuit raises this question, even though no point was made of it at the trial. Whether the defendant waived the benefit of this statute we will not discuss, but will assume that the motion raises the question. Under our ruling in Martin v. Herzog (228 N. Y. 164), the plaintiff was at least prima facie guilty of contributing negligence if the statute of this State prohibited him under penalty from extending any portion of his body outside a moving motor bus, and the statute was for his or the company’s protection. We, therefore, come to the statute.

The General Highway Traffic Law, which became a law on May 25, 1917, is chapter 655 of the Laws of 1917. Section 20, subdivision 1 provides:

“ 1. No person shall ride upon the rear of any vehicle without the consent of the driver nor with any part of his body protruding, nor shall any person hang on to any street car or vehicle whatsoever.”

Taking the subdivision as it reads in the light of other provisions, we have some strange results if we adopt the meaning given to it by the defendant. In the first place, the words “ vehicle,” and “ street car,” have a definition of their own furnished by the statute. “ Vehicle ” excludes “ street car.” The definitions are contained in section 2. “ ‘ Vehicle ’ shall include a horse and every kind of conveyance, except a baby carriage, a street surface car and a push cart.” Therefore, the first part of this subdivision under discussion does not apply to a street surface car. Prohibiting any person to ride with any part of his body protruding, applies to vehicles other than street cars. The only part applicable to street cars is that which prohibits any person hanging on to them. The Legislature could not have intended that a person riding in a motor bus operated for hire, carrying passengers through the streets in the same way as do street surface cars, must not under penalty stick his elbow out the window, while he is free to do so without penalty, if riding in a street surface car.

Again, this section would be in conflict with section 13, applicable to signals, which requires a person operating a vehicle or automobile to extend his arm straight out at right angles to the car as a warning when stopping or decreasing speed, or in turning. No limit of time is placed upon this operation. Under such circumstances, a portion of his body is protruding within the wording of section 20, if the defendant be right in its construction.

Coming now to the actual phraseology of this section, the defendant in arriving at its meaning must eliminate the words, “ upon the rear.” The section says: “No person shall ride upon the rear of any vehicle without the consent of the driver nor [shall ride upon the rear of any vehicle] with any part of his body protruding.” By the ordinary rules of grammatical construction, this is what the clause means and is what the Legislature has said. We are not called upon, nor do we consider ourselves competent to extend these words to cover other situations. What is intended by this section is not very clear, but it is quite evident that it has no application to a person situated as was the plaintiff in this case, that is, to a passenger riding on a hot summer’s day in a motor bus, who happens to extend his elbow a few inches over the window sill. The use of the words, rear of any vehicle,” consent of the driver,” and hang on,” as applicable to street cars, indicates that the provision does not apply to passengers for hire, rightfully and lawfully being transported through the streets.

Ward v. International Ry. Co. (206 N. Y. 83), referred to in both briefs, made no mention whatever of this section in the General Highway Traffic Law, and for the obvious reason that the case was decided in 1912, and the present General Highway Traffic Law was not passed until 1917.

As stated above, this section of the General Highway Traffic Law was not referred to on the trial. The trial judge had no opportunity to rule upon it, as no point was made that it applied to the facts of the case. Assuming, however, that the motion for a nonsuit impliedly embodied a reference to any general law which might be pertinent to the facts, without specifying it, nevertheless, there was no error in disregarding this section, as we hold it to be inapplicable to the plaintiff in this case.

The judgment below should be affirmed, with costs.

Cardozo, Ch. J., Pound, Andrews, Lehman, Kellogg and O’Brien, JJ., concur.

Judgment affirmed.


author: Kellogg, J.

text:
    May K. Atkinson, Respondent, v. Benjamin H. Sanders et al., Copartners under the Name of Frank A. Seaver & Co., Appellants.
    (Submitted December 7, 1928;
    decided December 31, 1928.)

      Walter L. Durack for appellants.
    There was no contract for the sale of real property, but merely a receipt for a deposit taken from a salesman in the employ of the defendants, with authority to negotiate a sale only and whose limited authority was known to the respondent. (Tobias v. Lynch, 192 App. Div. 54; Coleman v. Garrigues, 18 Barb. 60; Lee v. Lloyd, 111 Misc. Rep. 411; Teitz v. Gaettler, 191 App. Div. 924; Roach v. Coe, 1 E. D. Smith, 175; Metropolitan Aluminum Mfg. Co. v. Lau, 61 Misc. Rep. 105.)

      John W. Van Gordon and Charles J. Gardella for respondent.
    There is a sufficient memorandum for the sale of real property. (Wertheimer v. Boehm, 241 N. Y. 575; Miller v. Tuck, 95 App. Div. 134.)
   Kellogg, J.

The complaint alleged the making of an agreement by the parties whereby the defendants promised to sell and the plaintiff promised to buy certain real estate upon terms stated; a refusal of performance by the defendants; an incurrence of substantial damages by the plaintiff. The answer denied the allegations of the complaint. Upon the trial, these facts appeared: The defendants, who were real estate brokers, had in their service a sales agent named Harrington. This agent conducted negotiations with the plaintiff for the sale of a parcel of real estate which was owned, not by the defendants, but by a customer who had listed the property with them for sale. At the conclusion of the negotiations the plaintiff delivered to Harrington a check for fifty dollars. Harrington thereupon signed the name of the defendants’ firm to a writing and delivered the same to the plaintiff. The words of the writing were: Received from M. K. Atkinson, Fifty D. Deposit on purchase of plot S. S. 82 St. 220 E. Colonial Rd. 40 x 100. Price $3800. Cash $100 — Balance in 1st Mtg. for one year or less.” Before a formal contract for the sale of the land had been entered into, the defendants’ customer, the land owner, contracted to sell it to third persons. It thus became impossible for the defendants to procure a conveyance of the land to be made to the plaintiff. Accordingly they tendered to the plaintiff a return of the fifty dollars paid. No proof was given that Harrington was authorized to execute, on behalf of the defendants, a memorandum of sale, and to deliver the same to the plaintiff. No inference lay that such a power had ever been conferred. The defendants, not being the owners, could not themselves have made the sale. Having no such power, it could not be supposed that they intended to invest an agent with apparent authority to make a binding contract of sale in their name. However, the defendants neglected, at the close of the entire case, to make, a motion for a dismissal of the complaint. In effect, they thereby conceded that a question of fact was presented for submission to the jury. (People v. Davis, 231 N. Y. 60.) Moreover, they neglected to make the point that in no event could the plaintiff recover a greater sum than nominal damages. (Northridge v. Moore, 118 N. Y. 419.) Accordingly, the trial judge submitted the facts to the jury and charged them that if, upon the merits, the plaintiff should prevail, she would be entitled to a recovery of damages, based upon the difference between the market value of the land and the selling price named in the contract. To this charge the defendants did not except. The jury brought in a verdict awarding substantial damages to the plaintiff. For the reasons stated the complaint may not now be dismissed. However, the defendants did request the trial court to charge the jury that there was no evidence that Harrington had authority to execute contracts in their name. The request was obviously correct. It was nevertheless refused, and an exception was taken. Therefore a reversal must follow.

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.

Cardozo, Ch. J., Pound, Crane, Andrews, Lehman and O’Brien, JJ., concur.

Judgments reversed, etc.


author: Lehman, J.

text:
    In the Matter of Adolph Mandel, Appellant, against The Board of Regents of the University of the State of New York, Respondent.
    (Argued November 20, 1928;
    decided December 31, 1928.)

      Edward Goodell and S. Goodelman for appellant.
    The application and construction of section 240 of the Public Health Law in the instant case effects a delegation of legislative power to the Board of Regents in violation of section 1 of article 3 of the State Constitution. (People v. Sisson, 222 N. Y. 387; United States v. 11,150 Pounds of Butter, 195 Fed. Rep. 657; Matter of Lyman, 160 N. Y. 96; Matter of Richardson, 247 N. Y. 401; Czarra v. Board of Medical Supervisors, 25 App. Cas. [D. C.] 443; Green v. Blanchard, 138 Ark. 137; Hewitt v. State Board of Medical Examiners, 148 Cal. 590; Matthews v. Murphy, 23 Ky. L. Rep. 750.) The Legislature having expressly provided specific penalties for the act complained of, the Board of Regents has no power to add another penalty, and in so doing has encroached upon the functions of the Legislature. (Moorehouse v. Hammond, 60 Utah, 593; United States v. 11,150 Pounds of Butter, 195 Fed. Rep. 657; Curtiss v. Leavitt, 17 Barb. 309.)

      Ernest E. Cole and George V. Fleckenstein for respondent.
    The power conferred by statute upon the Board of Regents of the University to revoke a license issued by said Board under article 51 of the Education Law on the ground that the holder thereof is “ unfit or incompetent from negligence, habits or other cause ” is within the constitutional power of the Legislature to grant. (Reetz v. Michigan, 188 U. S. 505; Hawker v. New York, 170 U. S. 189; Dent v. West Virginia, 129 U. S. 114; Matter of Lockwood, 154 U. S. 116; People v. Fulda, 52 Hun, 65; Meffert v. Packer, 66 Kan. 710; Matter of Goldstein, 220 App. Div. 107; Matter of Percy, 36 N. Y. 651; State v. Medical Examining Board, 32 Minn. 324; Thompson v. Hazen, 25 Me. 104; State v. Hathaway, 115 Mo. 36.)
   Lehman, J.

In June, 1925, the petitioner procured a license to practice pharmacy as a “ junior pharmacist.” He presented satisfactory proof of his qualifications for that license. Before he could obtain a license to practice as a “ pharmacist,” satisfactory proof of additional qualifications was required. (Public Health Law, section 233, now Education Law [Cons. Laws, ch. 16], section 1353.) In order to obtain that license the defendant sought to manufacture evidence of qualifications he did not in fact possess. Upon proof of the attempted fraud, and after notice to the defendant and a hearing before the State Board of Pharmacy, the petitioner’s license as a junior pharmacist was revoked.

To obtain a license to practice pharmacy, an applicant must show good moral character as' well as adequate instruction and experience. So the Legislature has decreed for the protection of the public. That protection is inadequate if after the license has been obtained it becomes apparent that the holder is unfit or incompetent. Therefore, the Legislature has provided also that any license or certificate obtained by misrepresentation or fraud or that is held by any one unfit or incompetent from negligence, habits or other cause may be revoked after reasonable notice and an opportunity to be heard.” (Public Health Law, section 240, now Education Law, section 1362.)

The Legislature has vested in an administrative board power to determine the fitness and competency of those who desire to practice pharmacy in this State, both before and after a license has been granted. The Board has revoked the license of the petitioner as “ junior pharmacist,” not because that license was obtained by fraud, but because it has found that the petitioner was “ guilty of fraud in endeavoring to procure a pharmacist license, and consequently was and is unfit to practise the profession of pharmacy under any form of license.”

The Legislature has not attempted to define the causes which may produce unfitness or incompetency sufficient to justify revocation of a license, nor the acts which shall be regarded as sufficient evidence of such unfitness or incompetency. The statute is enacted for the protection of the public against the dangers that might arise from the practice of pharmacy by the unfit and incompetent. It is the lack of fitness or competency in a practitioner which creates the danger, regardless of how such lack may have arisen or how it has been demonstrated. Negligence or bad habits may usually be at its root; “ other cause ” may give rise to it. The Legislature has in terms declared that the Board shall look to the result, not the cause, as ground for revocation of a license. Narrower construction of the statute would unreasonably limit its language and in part defeat its purpose.

It is said that under that construction the Legislature has attempted to delegate to an administrative board the unrestricted power to define offenses to which the penalty of the revocation of a license shall attach, and that such power is a legislative function which may not be delegated. (Czarra v. Board of Medical Supervisors, 25 Appeal Cases [D. C.], 443; Hewitt v. State Board, 148 Cal. 590.) Unquestionably the definition of offenses and the prescription of punishment for such offenses is a legislative power. (U. S. v. Eaton, 144 U. S. 677.) The power vested in the administrative board and exercised by it in this case has a different scope.

Denial or revocation of a license because of guilt of an offense which tends to show moral or intellectual unfitness does not constitute punishment for the offense. (Hawker v. New York, 170 U. S. 189.) It is only a measure of protection of the public. Decisions of the Supreme Court of the United States leave no doubt * * * that the conferring of discretionary power upon administrative boards to grant or withhold permission to carry on a trade or business which is the proper subject of regulation within the police power of the State is not violative of rights secured by the Fourteenth Amendment.” (People ex rel. Lieberman v. Van De Carr, 199 U. S. 552, affg. 175 N. Y. 440.) In that case the statute, which the courts held valid, gave to the Board of Health power to grant, withhold or revoke a permit to sell milk. No limitation was in terms placed upon the exercise of such power. Impliedly the power was subject to the limitation that it might not be exercised arbitrarily. There is no presumption that the power will be arbitrarily exercised.”

Unquestionably the practice of pharmacy is subject to regulation by the State; unquestionably for centuries legislative bodies have been accustomed to empower administrative boards or officers to select the persons who shall be permitted to practice a vocation which is subject to regulation by the State. The selection may not be arbitrary. Grant or revocation of a license must rest upon reasonable grounds, but exercise of discretion in connection with an act performed customarily by administrative officers does not change an administrative act into a legislative act. A statute which empowers an administrative officer in the exercise of a reasonable discretion to withhold a license from such persons as he may find unsuitable and in the exercise of a similar discretion to revoke a license already granted to a person who may be unfit, does not constitute delegation of a legislative power. (People ex rel. Lieberman v. Van De Carr, supra.)

We find no logical basis for distinction between such statutes and the statute now under consideration. Perhaps the Legislature might have conferred upon the Regents a power to revoke the license without any limitation upon the exercise of that power except the implied limitation that they shall not exercise the power arbitrarily. Here the Legislature has not attempted to confer power without express restriction. It has determined that only unfitness or incompetence shall be ground for revocation of a license which has been obtained without fraud or misrepresentation. The Board of Regents may act upon no other ground. Specific acts of wrong may, as here, permit the inference that a person is unfit or incompetent. The Regents may give to such acts their logical probative force. They may in proper case find that such acts have caused or demonstrated unfitness. They may not, under the express, terms of the statute, give to specific acts of wrong other effect. They may not either define or punish an offense; they may only protect the public against demonstrated unfitness or incompetency arising from any cause. That power the Legislature might vest in an administrative board or officer. (State ex rel. Chapman v. State Board of Medical Examiners, 34 Minn. 387; Meffert v. State Medical Board, 66 Kan. 710; State ex rel. McAnally v. Goodier, 195 Mo. 551; People ex rel. State Bd. of Health v. Apfelbaum, 251 Ill. 18.)

The order should be affirmed, with costs.

Cardozo, Ch. J., Pound, Crane, Andrews, Kellogg and O’Brien, JJ., concur.

Order affirmed.


text:
    Irwin Kotcher, Respondent, v. Lucius A. Edelblute, as Executor of Margaret Kennedy, Deceased, et al., Appellants.

      (Argued November 22, 1928;
    decided December 31, 1928.)

      William Byrd and Charles D. Miller for appellants.
    The option to purchase contained in the lease was" an irrevocable offer by the landlord to sell the demised premises to the tenant upon the terms therein stated, on or before the 1st day of October, 1926, and contemplated acceptance by a counter-promise or by conduct from which a counter-promise could be implied. (Ganss v. Guffey Petroleum Company, 125 App. Div. 760; Benedict v. Pincus, 191 N. Y. 377; Stanley v. Gannon, 109 Misc. Rep. 611; 192 App. Div. 915; Lewis v. Bollinger, 115 Misc. Rep. 221; Matter of City of New York [Upper New York Bay], 246 N. Y. 1; Hamilton College v. Roberts, 223 N. Y. 56; Bullock v. Cutting, 155 App. Div. 825; Linn v. McLean, 80 Ala. 360; Perry v. Paschal, 103 Ga. 134; Castle Creek Water Co. v. Aspen, 146 Fed. Rep. 8.) The option was not exercised in time. No contract of sale was made. This is true whether the option to purchase contemplated acceptance by counter-promise or by act on the part of the plaintiff. (Codding v. Wamsley,
      1 Hun, 585; 60 N. Y. 644; Smith’s Appeal, 69 Penn. St. 474; Life Preserver Suit Co. v. National Life Preserver Co., 252 Fed. Rep. 139; White v. Corlies, 46 N. Y. 467; Chicago & Great Western Ry. Co. v. Dane, 43 N. Y. 240; Petterson v. Patiberg, 248 N. Y. 86.) There is no question of waiver or estoppel in this case. (Noble v. Higgins, 214 App. Div. 135; 243 N. Y. 538; Page v. Shainwald, 169 N. Y. 246; Roblee v. Masonic Life Assn., 38 Misc. Rep. 481; 95 App. Div. 620; Kelsey v. Crowther, 162 U. S. 404; Kew v. Purdy, 50 Barb. 24; 51 N. Y. 629; Stokes v. Carpenter, 166 App. Div. 441; Tilton v. Sterling Coal Co., 28 Utah, 173; Merritt v. Joyce, 117 Minn. 235; Abbott v. ’76 Land & Water Co., 53 Pac. Rep. 445; Mason v. Payne, 47 Mo. 517; Sherwood v. Tucker, L. R. 2 Ch. 440; Pettit v. Tourison, 283 Penn. St. 529; Woodall v. Clifton, L. R. 2 Ch. 257.)

      Stanley C. Fowler and Ralph O. L. Fay for respondent.
    The period during which plaintiff might exercise his option did not begin to run until he was given possession of the premises. (Strassbourger v. Leerburger, 223 N. Y. 55; Crary v. Smith, 2 N. Y. 60; Bruce v. Tilson, 25 N. Y. 194; Farley v. Secor, 167 App. Div. 80; McLear v. Balmat, 194 App. Div. 827; 231 N. Y. 548; Pittsburg Amusement Co. v. Ferguson, 100 App. Div. 453; Pitts v. Davey, 40 Misc. Rep. 96; Austin v. Tawney, L. R. 2 Ch. 143; Lilford v. Keck, 30 Beav. 295; Blodgett v. Lanyan Zinc Co., 120 Fed. Rep. 893; Page v. Hughes, 41 Ky. 430; Keyport Brick, etc., Co. v. Lorillard, 19 Atl. Rep. 381; Mansfield v. Hodgdon, 147 Mass. 304.)
   Lehman, J.

In May, 1924, Margaret Kennedy signed and delivered a lease of two houses owned by her. The term of the lease was five years beginning October 1st, 1924. The lease contained a clause that the lessee “ shall have the right to purchase said premises in fee at any time during the first two years of this lease for thirty-six thousand dollars.” Margaret Kennedy, at the time she signed the lease, was seventy-six years old. She was feeble in body, although sound in mind. She was suffering from diabetes which had reached an advanced stage. She died in the Home for Incurables in July, about two months after she signed the lease. She had not informed her usual legal advisers that she had executed a lease. Notice of the existence of such a lease was conveyed to them only when plaintiff asked for possession of the premises. A temporary administrator of Margaret Kennedy’s estate was appointed in March, 1925. Until that time no person was authorized to represent her estate, and at all times the residuary legatee named in the will, her personal representatives and those caring for the estate have denied that the lease was executed by her.

In May, 1926, the plaintiff began this action for specific performance of the lease. At that time the plaintiff had given no notice of any kind that he elected to purchase the premises in accordance with the terms of the option. Even in the complaint in this action, he gave no notice that he desired to avail himself of the option, and asked no conveyance of the premises. The action came to trial in March, 1927. Until then the plaintiff had not in any way bound himself to purchase the premises. More than two years had then passed since the beginning of the stipulated term of the lease.

At the trial the plaintiff stated that he elected to exercise his option. The justice presiding at the trial decided the issues raised by the complaint and answer in favor of the plaintiff. He decreed specific performance as prayed for in the complaint, and the defendants were ordered to account for the rents and profits received since October 1st, 1924, the beginning of the term of the lease. He held that the attempted exercise of the option by the plaintiff at the trial came too late. The option, by its terms, had then expired. No decree of specific performance could change the stipulated terms.

Upon appeal the Appellate Division modified the judgment by inserting a provision that the defendants convey to the plaintiff herein, upon demand made by such plaintiff within a reasonable time after the entry of this judgment, the premises described in said lease, upon the terms and condition in said lease contained.” The court held, in effect, that acceptance by the plaintiff of the offer to convey, in accordance with the terms of the option, had been waived, because the personal representatives and the residuary legatee of the lessor had repudiated the whole lease; and under such conditions a notice that the plaintiff elected to avail himself of the option, which constituted one of the provisions of the lease, would have been a mere gesture, a vain and empty thing.

The plaintiff acquired by the lease certain rights. The courts may by its decree enforce those rights. That the court at Special Term has done. The court may not increase or change those rights. That can be accomplished only by the parties themselves. The owner of the premises gave to the plaintiff for a valuable consideration an option to purchase the premises within two years of the beginning of the term. The offer to convey in accordance with the terms of the option was irrevocable, but unless and until the plaintiff bound himself to purchase the premises in accordance with the terms of the option, the owner was not under any obligation to convey. The offer was never accepted in accordance with the terms of the option. No obligation to convey has ever arisen under the terms of the lease. The effect of the modification of the judgment by the Appellate Division is to create such an obligation, if within a reasonable time ” the plaintiff chooses to demand performance.

“ If a man binds himself to do certain acts which he afterwards renders himself unable to perform, he thereby dispenses with the performance of conditions precedent to the act which he has so rendered himself unable to perform.” (Sands v. Clarice, 8 C. B. 751.) It is said that performance, by one party to a contract, of stipulated acts, which constitute condition precedent to performance of a counter-promise, is waived where the other party to the contract has unequivocally declared by word or act that performance of the condition precedent will not secure performance of the counter-promise. (Williston on Contracts, section 767.) Actual performance or tender of performance of a condition precedent is, in truth, a vain and useless act under such circumstances. Even in such case, however positive may have been refusal to perform and however insufficient the reason assigned for the refusal, the party in default cannot be subjected to damages without showing that he would have received what he contracted for, had he performed.” (Bigler v. Morgan, 77 N. Y. 312.)

The rule that a promisee shall not be required to perform a condition precedent when it is certain that he will not secure performance of the counter-promise, cannot avail the plaintiff. The option in the lease constituted only an irrevocable offer. No obligation to convey could arise until the offer was accepted. The owner of the premises has protected herself only by the condition that the offer to convey be accepted in certain manner. She has exacted no counter-promise from the plaintiff as consideration for a promise of conveyance by her. Failure to comply with this condition prior to the date fixed will discharge the contract altogether.” (Williston on Contracts, section 1970; 852 and 853.)

It may not be said that notice by the plaintiff that he elected to avail himself of the option would have been a useless act, merely because the defendants had already declared that they would not convey even if the notice were given. The plaintiff received from the owner only a right of election to purchase or not to purchase. The plaintiff has not been wronged, unless the defendants have deprived him of that right. He could exercise his right of election only by notice, and that he has failed to give. He cannot say that the defendants have wrongfully failed and refused to convey, since they were not under any obligation to convey until he assumed the counter-obligation of payment. Acceptance after the stipulated time creates no obligation on the part of the defendants, for time was of the essence. (Codding v. Wamsley, 1 Hun, 585; affd., 60 N. Y. 644.) The plaintiff may be in a position to show that if the defendants had not repudiated all obligation under the lease, they would have received from the plaintiff full performance of all his counter-obligations; but the plaintiff was under no obligation to accept and pay for a conveyance of the premises. That depended upon his free choice, and correspondingly the defendants were under no obligation to convey until the plaintiff had made his choice in accordance with the terms of the option. (Merritt v. Joyce, 117 Minn. 235.)

It is true that where the party granting the option prevents its exercise during the time limited, he may not avail himself of his own wrong, and the grantee of the option has a reasonable time to exercise it after the obstacle has been removed. (Mansfield v. Hodgdon, 147 Mass. 304; Blodgett v. Lanyon Zinc Co., 120 Fed. Rep. 893.) Even repudiation of the option by the grantor does not prevent the grantee from exercising his election. Possibly the plaintiff might have been in a more advantageous position to determine whether he should exercise the option, if he had been in possession of the premises from the beginning of the term of the lease. In spite of such disadvantage, the choice still remained with the plaintiff. Perhaps such disadvantage might be a factor in determining damages in a suit for breach of contract. That question is not before us, and we do not decide it. There can be no doubt here that defendants’ refusal to recognize the lease did not prevent the plaintiff from accepting the irrevocable offer to convey contained in the lease. Indeed, he did attempt tardy acceptance at the trial, before he had been put in possession. The justice presiding at the trial correctly decided that a decree of specific performance of the lease could not include a direction to convey the premises to the lessee under the option contained in the lease, when the lessee had not chosen to avail himself of the option within the time limited.

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

Cardozo, Ch. J., Pound, Crane, Andrews, Kellogg and O’Brien, JJ., concur.

Judgment accordingly.