text:
    Arthur B. Headley, Respondent, v. The City of Rochester, Appellant.

      (Argued October 9, 1936;
    decided November 24, 1936.)

      Harold P. Burke, Corporation Counsel (Abraham Edelstein and Charles B. Forsyth of counsel), for appellant.

      Robert T. Headley for respondent.
   Lehman, J.

The plaintiff since. 1918 has been the owner of premises in the city of Rochester which are bounded on the south by East avenue and on the west by North Goodman street. East avenue and North Goodman street have been, for more than twenty years, public streets or highways. In 1931, pursuant to article 3 of the General City Law (Cons. Laws, ch. 21), the Council of the city of Rochester passed an ordinance which amended, changed and added to an official map or plan previously adopted by the Council “ so as to correct and revise said established Official Map or Plan and to lay out new streets and highways and to widen existing highways.” In that map or plan the southerly twenty-five feet of plaintiff’s said premises are included in East avenue, as widened, and a strip of plaintiff’s premises extending along its westerly edge is included in North Goodman street, as widened. The plaintiff has brought an action to obtain a judgment "declaring “ that the ordinance and map and plan adopted by the said City of Rochester as aforesaid is unconstitutional and void,” At Special Term the complaint was dismissed. The Appellate Division reversed and granted judgment “ declaring that the ordinance, map and plan herein involved, are void and ineffectual to create any limitations or restrictions upon the use or conveyance of plaintiff’s property.”

By chapter 690 of the Laws of 1926 the Legislature added article 3, entitled “ Official Maps and Planning Boards,” to the General City Law. That article empowers the legislative body of every city to establish an official map or plan of the city showing the streets, highways and parks theretofore laid out and established by law. (§ 26.) It empowers such legislative body “whenever and as often as it may deem it for the public interest, to change or add to the official map or plan of the city so as to lay out new streets, highways or parks, or to widen or close existing streets, highways or parks.” (§ 29.) It further empowers the legislative body of the city to create a planning board of five members and it requires that before making any addition or change in an official map in accordance with section 29 “ the matter shall be referred to the planning board for report thereon.” The planning board is given “power and authority to make such investigations, maps and reports and recommendations in connection therewith relating to the planning and development of the city as to it seems desirable.” (§31.)

The adoption or revision of a general map pursuant to the provisions of the General City Law does not have the effect of divesting the title of the owner of land in the bed of a street as shown on the map; it does not have the effect of placing upon the city a duty to begin, presently, condemnation proceedings to acquire such land. Article 3 of the statute provides the machinery for intelligent planning in advance for the needs of the city as the city is expected to grow in the future. Only time can prove whether the city has wisely gouged the future, and the city is under no compulsion to open any street shown on the map unless and until the legislative body of the city decides that it is actually needed.

The mere adoption of a general plan or map showing streets and parks to be laid out or widened in the future, without acquisition by the city of title to the land in the bed of the street, can be of little benefit to the public if the development of the land abutting upon and in the bed of the proposed streets proceeds in a haphazard way, without taking into account the general plan adopted and, especially, if permanent buildings are erected on the land in the bed of the proposed street which would hamper its acquisition or use for its intended purpose. So long as the owners of parcels of land which lie partly in the bed of streets shown on such a map are free to place permanent buildings in the bed of a proposed street and to provide private ways and approaches which have no relation to the proposed system of public streets, the integrity of the plan may be destroyed by the haphazard or even malicious development of one parcel or tract to the injury of other owners who may have developed their own tracts in a manner which conforms to the general map or plan.

A statutory requirement that a city must acquire title to the land in the bed of the streets shown on the general map or plan, and provide compensation for the land taken, would create practical difficulties which would drastically limit, if, indeed, they did not render illusory, any power conferred upon the city to adopt a general map or plan which will make provision for streets which will be needed only if present anticipations of the future development of the city are realized. On the other hand, to leave the land in private ownership, and, without compensation to the owner, incumber it with restrictions upon its use which would result in diminution in its value might be inequitable and perhaps even beyond the power of the State. To meet the difficulty, the Legislature has provided in section 35 of the General City Law that for the purpose of preserving the integrity of such official map or plan no permit shall hereafter be issued for any building in the bed of any street or highway shown or laid out on such map or plan, provided, however, that if the land within such mapped street or highway is not yielding a fair return on its value to the owner, the board of appeals or other similar board in any city which has established such a board having power to make variances or exception in zoning regulations shall have power in a specific case * * * to grant a permit for a building in such street or highway which will as little as practicable increase the cost of opening such street or highway, or tend to cause a change of such official map or plan, and such board may impose reasonable requirements as a condition of granting such permit, which requirements shall inure to the benefit of the city.” The sole complaint of the plaintiff is that so long as that section remains in force the effect of the ordinance adopted by the city is to restrict the use to which the plaintiff may put his land in the bed of the street and to that extent constitutes a talcing of his property, and that, since the city is not required to pay any compensation to him unless or until at some time in the indefinite future it may choose to take title to the land, the effect of the ordinance is to deprive him of his property without due process of law.

Not every restriction placed by authority of the State upon the use of property for the general welfare of the State, without payment of compensation, constitutes a deprivation of property without due process of law. This court has sustained a reasonable restriction upon the height of signs on roofs, saying: “ Compensation for such interference with and restriction in the use of property is found in the share that the owner enjoys in the common benefit secured to all.” (People ex rel. Wineburgh Adv. Co. v. Murphy, 195 N. Y. 126, 131.) Under the provisions of the General City Law the owner of land in the bed of the street shown in a map remains as free to alien the land or to use it as he sees fit as he was before the map was adopted, except in one respect. If he desires to improve the property by erecting a building for which a permit is required, the grant of such a permit is surrounded by drastic conditions or restrictions which will in many cases act as an obstacle to such use of the land.

In Junius Constr. Corp. v. Cohen (257 N. Y. 393, 399), though the appellant attempted to question the constitutionality of section 35 of the General City Law, we placed our decision on other grounds and said: We find it unnecessary to determine whether section 35 with its restrictions upon the enjoyment of the land within the boundaries of a mapped street is an unconstitutional interference with vested rights of property. (Cf. on the one hand, Forster v. Scott, 136 N. Y. 577; Matter of Wall Street, 17 Barb. 617, 636; People ex rel. N. Y. C. & H. R. R. R. Co. v. Priest, 206 N. Y. 274; Edwards v. Bruorton, 184 Mass. 529; and on the other hand, Matter of City of New York, 196 N. Y. 255; Matter of Wulfsohn v. Burden, 241 N. Y. 288; Village of Euclid v. Ambler Realty Co., 272 U. S. 365.) ” Though the section has been on the statute books since 1926, its validity has not been challenged in any other case in this court. It is perhaps not without significance that during these years no owner has claimed that the statute has actually interfered with his enjoyment of the land, or has prevented him from obtaining a permit to improve the land in a manner which he deemed desirable.

The plaintiff in this case, too, makes no such claim. The complaint alleges only the conclusion of the pleader that by reason of the filing of the ordinance and map or plan the plaintiff has been, and is, deprived of his property without the payment of compensation therefor,” The complaint is silent as to how the plaintiff is injured by the ordinance and the map. The stipulation of facts upon which the case was submitted for decision again fails to indicate in what manner the ordinance has caused damage to the plaintiff or interferes with any use to which the plaintiff desires to put the land. On the contrary, it appears from the stipulated facts that " the plaintiff has at present no plans for the use of said premises nor any particular desire as to the purposes for which he expects to use the same ” and that the plaintiff, because of the claim of the defendant under said ordinance and map, is undecided as to whether he shall endeavor to build upon said premises or endeavor to sell the same.” It may be added, incidentally, that the stipulated facts fail to show that there is at present any actual controversy with the city as to the use to which the property may be put, and it appears that the plaintiff has made no application to the Planning Board, Board of Appeals or Supervisor of Zoning of the City of Rochester for a permit to use those portions of his property included in said map as widened streets or to build thereon or to alter any existing structures therein.”

Regardless of the form of action in which relief is sought, the courts will not declare a statute unconstitutional unless and until such relief is necessary for the protection of some right of the suitor guaranteed by the Constitution. " The duty of this court, as of every judicial tribunal, is limited to determining rights of persons or of property, which are actually controverted in the particular case before it.” (California v. San Pablo & Tulare R. R. Co., 149 U. S. 308, 314.) “ To complain of a ruling one must

be made the victim of it. One cannot invoke to defeat a law an apprehension of what might be done under it and, which if done, might not receive judicial approval.” (Lehon V. City of Atlanta, 242 u. S. 53, 56.)

The courts have sustained, as a proper exercise of the police power, restrictions in zoning ordinances upon the use of land in defined districts which go so far as to require that all buildings be set back a specified distance from the street. (Matter of Wulfsohn v. Burden, 241 N. Y. 288.) There the restrictions were imposed to promote the general welfare and to protect the public health and safety. Here it may be urged that the restrictions, though less drastic, also affect less directly, if at all, the general welfare or the public health and safety. Even if some doubt may remain whether the State has power to impose present restrictions upon the use of land in the bed of a street as shown on an official map or plan, without compensation for the damage caused to the owner of land by reason of such restrictions, there can be no doubt that such restrictions are calculated to promote at least the public convenience if not the public health, and to benefit the district in which the land is situated, as well as the city itself; and that in so far as such restrictions may constitute a taking of property, the taking would be for a public purpose and would accord with due process of law ” if compensation were paid for the consequent damage. Since the plaintiff’s alleged grievance is that he has been deprived of his property without compensation, the grievance becomes illusory if it does not appear that damage has been done to him by the city’s acts.

A statute cannot have the effect of depriving a person of his liberty or property unless it prevents such person from doing an act which he desires to do or diminishes the enjoyment or profit which he would otherwise derive from his property, (Cf. cases collated in the separate opinion of Mr. Justice Brandeis in Ashwander v. Tennessee Valley Authority, 297 U. S. 288, at pp. 345-349.) There are approximately nineteen thousand feet in the plot owned by the plaintiff. The single dwelling house upon it is ninety-five years old and is now in course of demolition. By its adoption of the general map or plan, the city has given notice that at some future time, if present anticipations are realized, it intends to widen the two streets upon which the plaintiff’s property abuts. If without building upon the strips of his land which may in the future be included in the widened streets, the plaintiff’s property cannot be developed in manner which the plaintiff desires or which would best conduce to the enjoyment or profit which an owner might derive from his land, and if it were shown that the statute, if valid, would require or even justify a denial of a permit for such development, the adoption of the map might constitute a grievance. In the absence of proof of such facts, it is difficult to see how the plaintiff has been deprived in any manner of the use of his property. Before the court should even consider the question of whether the Legislature could under the police power restrict, without compensation, the use of land in private ownership, there should be proof at least that the statute is in some manner interfering with or diminishing the value of the present property rights of the person complaining. (Compare in this respect the allegations contained in the complaint upon which the Supreme Court of the United States based its jurisdiction to consider such question in Village of Euclid v. Ambler Realty Co., 272 U. S. 365, 368, 374.)

The opinion of the Appellate Division leans heavily upon Forster v. Scott (136 N. Y. 677) as authority for its decision. The analogy between the cases is quite illusory and the principles here involved are not touched by that case. There the city of New York, in accordance with the provisions of chapter 681 of the Laws of 1886, filed a map of a proposed street or avenue which as the court pointed out “ covers the entire lot ” of the plaintiff. The statute provided that “ no compensation shall be allowed for any building, erection or construction which at any time, subsequent to the filing of the maps, plans, or profiles mentioned in section six hundred and seventy-two of the act, may be built, erected or placed in part or in whole upon or through any street, avenue, road, public square or place exhibited upon such maps, plans or profiles.” (p. 582.) The plaintiff made a contract to sell his land to the defendant. He agreed to convey a good title to the land “in fee simple free from any lien or encumbrance.” The defendant refused the title, claiming that the filing of the map created an incumbrance upon the property. The validity of the title was submitted to the court upon stipulated facts. It appeared from them that no building was erected on the plaintiff’s land and “ the same is a vacant lot which derives almost its entire value from the possibility of being used for building purposes. If the lot cannot now be built upon without the house being destroyed, without compensation in the event of the street being opened as prescribed by the statutes above set forth, the lot is not worth what defendant agreed to pay, whereas if it can be used for building purposes it is worth at least $5,000.” In other words, the statute purported to give the city the right at some indefinite time in the future to appropriate the land of the plaintiff shown on the map without paying for it the value it would then have if, pending such appropriation, its owner chose to improve it for the only purpose for which it had substantial value.

. The court there said: “An encumbrance is said to import every right to or interest in the land, which may subsist in another, to the diminution of the value of the land, but consistent with the power to pass the fee by a conveyance.” (p. 582.) If the statute was valid the land “ could not be used for building purposes, except at the risk to the owner of losing the cost of the building at some time in the future.” (p. 583.) The value of the land was derived from its availability for building purposes and that value would be drastically reduced /if the owner could not obtain compensation for the improvements put upon the land. Since these facts were/' stipulated it could hardly

be doubted that the statute attempted to create a public

r right or interest in the land which diminished its value and would, therefore, constitute an incumbrance as defined by the court. Then in an action between vendor and vendee under a contract of sale, the court was bound to pass upon the validity of the statute.

Every element which led the court to find in that case that the filing of the map, in accordance with the statute there challenged, created, if the statute were valid, an incumbrance upon the property, is wanting in the case now under review. The statute here does not purport to give to the city the right to appropriate the plaintiff’s land or any part of it for less than the full value of the lands with the improvements thereon erected at the time of such appropriation. The only restrictions upon the use of any part of the plaintiff’s land while title thereto remains in the plaintiff result indirectly from the conditions which the statute attaches to the grant thereafter of a permit to erect a building upon the small portion of plaintiff’s land which, as shown on the map, will he in the bed of the street on which the plaintiff’s land abuts, if or when at some time in the future the city may desire to carry out its intention to widen the street. Since it is affirmatively shown that the plaintiff has no plans at present for the use of the premises it seems plain that what this court said and decided in the case of Forster v. Scott (supra) cannot possibly be regarded as any precedent for the grant of a judgment declaring the statute invalid, unless from the facts here presented the court as matter of law would be-constrained to draw the inference that the conditions which the Legislature has sought to impose upon the grant of a permit for the use of a small part of plaintiff’s land, creates a limitation upon its use to the diminution of the value of the land.”

No inference of law, indeed no inference of fact, that the attempted condition has affected or will affect the use to which the plaintiff’s land will be put or has diminished the value of the land, may be drawn from the stipuIated facts. There is no suggestion that a plot of nineteen thousand square feet cannot be suitably improved and put to the most profitable use by the erection of a building which does not encroach upon the small portions which may be used hereafter to widen the street. Sometimes land owners in a particular district assume mutual obligations to set back buildings some distance from the streets. Sometimes such obligations are imposed by zoning ordinance. Sometimes an owner does so voluntarily because he believes that such a setback is the best use for the land immediately abutting on the street. The plaintiff or any successor in title to the property could use the land within the bed of the widened street for such purpose even without a permit. It may be the best use to which that land could be put, even if no map had been adopted, and there were no probability that the city would in time widen the street. Certainly it cannot be said that owners of property do not receive any benefit from the adoption of general maps or plans for the development of city streets, if they can develop then land with some assurance that other owners will not be permitted to frustrate the plan, maliciously or unreasonably. Whether the State may impose conditions for the issuance of permits in order to protect the integrity of the plan of a city where it appears that such conditions interfere with a reasonable use to which the land would otherwise be put or diminishes the value of the land, should not now be decided. Without proof that the imposition of such conditions has deprived an owner of land of some benefit he would otherwise derive from the land, there can be no deprivation of property for which compensation should be made.

Solicitude for the protection of the rights of private property against encroachment by government for a supposed public benefit does not justify the courts in declaring invalid a public law which serves a public purpose, because ten years after it has been on the statute books a single owner, without proof, or even claim, of actual injury, asserts that he has been deprived of his property.

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.

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

Judgment accordingly.


source: Caselaw Access Project

author: Hubbs, J.

license: Public Domain

text:
    In the Matter of the Application of The People of the State of New York, by George S. Van Schaick, as Superintendent of Insurance of the State of New York, for an Order to Take Possession of the Property and Liquidate the Business of the Lexington Surety and Indemnity Company. The People of the State of New York, Appellant; George S. Van Schaick, as Superintendent of Insurance, Respondent.

      (Argued November 18, 1936;
    decided December 1, 1936.)

      William Copeland Dodge, District Attorney (Abraham J. Gellinoff and Joseph F. McLoughlin of counsel), for appellant.

      Irvin Waldman and Alfred C. Bennett for respondent.
   Hubbs, J.

The Lexington Surety Company on September 24, 1932, executed a recognizance or bail bond in the sum of $100 for the appearance of Clarence Smith in the Court of Special Sessions to answer a charge of unlawfully possessing policy slips. On January 5, 1933, the surety company was adjudged insolvent and an order for the liquidation of the company was made. The order directed that claims be filed not later than June 5, 1933.

On January 16, 1933, Clarence Smith failed to appear to answer the charge against him and the recognizance was ordered forfeited. The necessary proceedings were taken by the District Attorney to cause the order of forfeiture to be filed and recorded in the County Clerk’s office. On March 22, 1933, the District Attorney filed a claim with the Superintendent of Insurance, as liquidator. The claim • was subsequently disallowed by the referee appointed to hear it and the report was to that extent confirmed by the Special Term and affirmed by the Appellate Division. The People have appealed to this court by permission.

Section 404 of the Insurance Law (Cons. Laws, ch, 38) provides: “ The rights and liabilities of any such insurer and of its creditors * * * shall, unless otherwise directed by the court, be fixed as of the date of the entry of the order directing the liquidation of such insurer * * *, Provided, however, that the right of claimants holding contingent claims on said date to share in an insolvent estate shall be determined by section four hundred and twenty-five of this chapter,”

Section 425 provides that a contingent claim may be allowed to share where (a) such claim becomes absolute against the insurer on or before the last day fixed for the filing of proofs of claim against the assets of such insurer.” (Subd. 3.)

We are required to determine whether, at the date of the order of liquidation, there was in existence a claim or liability, although contingent. While the statute refers to contingent claims ” in effect a claim is merely a legally binding expression of an intention to assert liability and consequently the question is whether or not there then existed a liability, although contingent.

The respondent contends that the alleged claim or liability came into existence only after default of the principal, which occurred after the surety company was placed in liquidation. The appellant, on the other hand, contends that immediately upon execution, delivery and approval of the bond, a liability came into existence which was a contingent liability until default of the principal and thereafter a fixed or absolute liability.

Under a bail bond or recognizance the principal is, upon filing of the bond, released in the custody of his bondsman. He is still, constructively, in the custody of the law. The dominion of the surety is a continuance of the original imprisonment. (Netograph Mfg. Co. v. Scrugham, 197 N. Y. 377; Taylor v. Taintor, 83 U. S. 366.)

By the bond the surety engages to produce the principal when required or in default of so doing to pay the specified penalty. The bond is a substitute for cash bail. (Code Crim. Proc. § 586.)

Upon a forfeiture of bail and the filing of a certified copy of the order of the court forfeiting the same in the County Clerk’s office, a judgment may be entered without notice to the surety (§ 595). The surety may, at any time before default, surrender the principal and be thereby exonerated. (Code Crim. Proc. § 590.)

Immediately upon the release of the principal after filing of a recognizance there is imposed upon the surety an obligation, alternative in form but nevertheless existent and continuing. That obligation is either to produce the principal when required by the court or at such earlier date as the surety may elect or, failing to produce the principal when required by the court, to pay the sum specified in the bond. Its liability to pay the sum specified in the bond is clearly contingent upon its failure to perform the alternative obligation to produce.

A contingent claim is defined as: “ A claim which may never accrue; one which has not accrued and which is dependent on the happening of some future event; one that depends for its effect on some future event, which may or may not happen.” (13 Corpus Juris, p. 114 and cases cited.) Also contingent liability. (Id., p. 116.)

This court has repeatedly referred to surety bonds as contingent prior to default. (People v. Metropolitan Surety Co., 205 N. Y. 135; Matter of People (Empire State Surety Co.), 214 N. Y. 553; 216 N. Y. 273.)

Those are the cases relied upon by respondent to sustain the order made herein. They do not support such contention. The statutes under consideration in those cases did not permit the filing of contingent claims which became absolute before the time for filing claims expired as do sections 404 and 425 of the Insurance Law heretofore quoted. In Matter of People (Casualty Company of America) (232 N. Y. 559) this court in answering certified questions in regard to the right to file claims with che Superintendent of Insurance as liquidator treated the claim against a surety upon a bail recognizance as contingent prior to default.

The orders should be reversed, with costs in all courts and the matter remitted to the Special Term to proceed in accordance with this opinion.

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

Orders reversed, etc.


author: Per Curiam.

text:
    The People of the State of New York, Respondent, v. Lewis J. Wells, Appellant.
    (Argued October 21, 1936;
    decided December 1, 1936.)

      Joseph P. Murphy and Charles A. Murphy for appellant.

      Andrew J. Hanmer, District Attorney (Allan L. Gurley of counsel), for respondent.
   Per Curiam.

Defendant was convicted of murder in the first degree for causing the death of Joseph Jessmer. The verdict is not against the weight of evidence.

Lida Jessmer, wife of the deceased, was, at the time of the trial, confined in jail under an indictment for murder in the first degree in relation to the death of her husband. Counsel for defendant made a motion for an order directing the Sheriff to produce her so that she might be sworn as a witness in his behalf. The trial court denied the motion and stated these reasons: The only purpose in bringing this person in would be as a witness. Her counsel objects on the ground that it might incriminate her. He objects to her being a witness or being sworn or answering questions. The court feels that she should not be subjected to an examination under the circumstances, and bringing her in would be an empty formality.”

This ruling was erroneous. In all criminal prosecutions the accused has a right to have compulsory process for obtaining witnesses in his favor. (Civil Rights Law, § 12; Cons. Laws, ch. 6.) Notwithstanding the strong evidence against defendant and the possibility or even a probability that Mrs. Jessmer would refuse to answer questions if sworn as a witness, we are of the opinion that the error in refusing to order her to be produced in court is not such a technical error as does not affect defendant’s substantial rights. (Code Grim. Proc. § 542.)

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

Lehman, Crouch, Loughran and Finch JJ., concur; Crane, Oh. J., O’Brien and Hubbs, JJ., dissent and vote for affirmance under section 542 of the Code of Criminal Procedure.

Judgment of conviction reversed, etc.


author: Crouch, J.

text:
    In the Matter of the Claim of Fred Schurick, Appellant, against Bayer Company et al., Respondents. State Industrial Board, Respondent.
    (Argued November 17, 1936;
    decided December 31, 1936.)

      La Verne Orvis for appellant.

      J. Stanley Carter and M. James Conboy for Bayer Company et al., respondents.
   Crouch, J.

In December, 1933, the claimant, while acting as a volunteer fireman, sustained a fracture of the lower end of the left radius. While he was then in the general employment of the respondent employer, the accident had no connection with the employment. On March 19, 1934, he was deemed by bis physician fit to go back to work and did so. Thereafter he performed his regular duties and received his regular wages. On May 16, 1934, while threading a steel rod in the course of his employment, the claimant again broke his arm. The injury was partly a re-fracture of the lower end of the radius and partly a new fracture of the styloid process of the ulna. He was granted disability compensation for five weeks on the basis of an average weekly wage of $27.20, and the case was continued. The Industrial Board thereafter found upon sufficient evidence that the fractures which occurred on May 16,1934, were due both as a consequence of the first injury of December 19, 1933, and as the result of the second injury of May 16, 1934.” Upon the basis of that finding and without any attempt to establish a rational proportion between consequence ” and result ”— an attempt which would have been futile ■ — the Board modified the award so as to charge only one-half of it against the employer and carrier. Matter of Anderson v. Babcock & Wilcox Co. (256 N. Y. 146) was cited as authority for the modification. The Appellate Division affirmed on the ground apparently that the provisions of subdivision 7 of section 15 of the Workmen’s Compensation Law (Cons. Laws, ch. 67) were applicable.

The fundamental command of the Workmen’s Compensation Law is (§ 10) that “ every employer subject to this chapter shall * * * secure compensation to his employees and pay or provide compensation for their disability or death from injury arising out of and in the course of the employment.” That broad command is variously affected and implemented by other provisions of the act. Among them is subdivision 7 of section 15 which reads as follows: The fact that an employee has suffered previous disability or received compensation therefor shall not preclude him from compensation for later injury nor preclude compensation for death resulting therefrom; but in determining compensation for the later injury or death his average weeldy wages shall be such sum as .will reasonably represent his earning capacity at the time of the later injury, provided, however, that an employee who is suffering from a previous disability shall not receive compensation for a later injury in excess of the compensation allowed for such injury when considered by itself and not in conjunction with the previous disability.”

We are chiefly concerned with the proviso at the end. Our only guides to its meaning and scope are the circumstances under which it was enacted and the obvious limits of practical administration under the literal language. In Matter of State Industrial Commission v. Newman (222 N. Y. 363) it is shown that the enactment of the proviso by chapter 615 of the Laws of 1915 followed upon the heels of the decision in Matter of Schwab v. Emporium Forestry Co. (167 App. Div. 614), which was later affirmed by this court (216 N. Y. 712). The decision there was that a claimant who had theretofore lost one hand became entitled, upon the loss of the remaining hand while such employee, to compensation for permanent total disability and not to the lesser compensation for permanent partial disability. The Legislature, upon grounds of policy, changed that rule. While the language of the proviso was capable of a wider application, it is reasonably clear that it was originally intended to cover only a state of facts comparable with those in the Schwab case. It is perhaps not without significance, as showing what was in the legislative mind, that when chapter 622 of the Laws of 1916 was enacted to supplement the legislation of 1915, the disabilities specified were confined to the loss of one hand, one arm, one foot, one leg, or one eye.” (Present subd. 8, § 15.) While it is not now necessary to decide that the disability referred to in the phrase “ suffering from a previous disability,” in the proviso, must be one of those mentioned in subdivision 8, considerations of practical administration demand at least that it be, as to its existence and extent, substantially as certain and as capable of ascertainment as are those. Here, it is doubtful whether the claimant, when he received the later injury, can be said to have been suffering from a previous disability at all. Disability is a word of varied content, not defined in the Compensation Law except in section 37, which is confined to occupational diseases. Nevertheless, an existing disability is generally reflected in wage earning capacity. A weakness, whether pathological or traumatic in origin, which does not become manifest until an accident occurs, is not ordinarily thought of as a disability. But even if the condition of the claimant’s arm at the time of the later injury be regarded as a disability, the extent of its contribution to the later injury is too speculative for practical purposes. We think the proviso in subdivision 7 of section 15 has no application under the facts here, and the broad command of section 10 stands.

Matter of Anderson v. Babcock & Wilcox Co. (supra) is likewise inapplicable. The claimant there was awarded his full compensation. There was no contest between him and the second employer. The contest was between the two employers and their carriers, as to who should pay it. The language of the opinion must be read in connection with the issue.

The orders of the Appellate Division and of the State Industrial Board should be reversed and the original award of the State Industrial Board reinstated, with costs in all courts.

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

Ordered accordingly.


author: Crane, Ch. J.

text:
    In the Matter of Kupshire Coats, Inc. United States of America, Appellant; Charles Goldberg, as Assignee, et al., Respondents.

      (Argued November 17, 1936;
    decided December 31, 1936.)

      Lamar Hardy, United States Attorney (Malcolm A. Crusius of counsel), for appellant.

      Emil Schlesinger and Abraham Schlesinger for Sam Pinkus et al., respondents.
   Crane, Ch. J.

This is an appeal by permission of the Appellate Division, first department, from an order unanimously affirming an order of the Special Term, which confirmed the report of a referee and directed the assignee for the benefit of creditors to pay the claims of wage earners prior to the claim of the United States government for taxes.

On or about November 23, 1934, Kupshire Coats, Inc., a manufacturer of ladies’ coats and suits, made a general assignment for the benefit of creditors to Charles Goldberg, which assignment was recorded in the County Clerk’s office on the 10th day of December, 1934. On the said date there was due and owing to employees of the assignor the sum of $420.34, representing wages for work, labor and services performed by them within three months prior to the date of the execution of the assignment. Claims for these wages were duly filed.

The Collector of Internal Revenue, on behalf of the United States government, filed a claim with the assignee for unpaid taxes due from the assignor for some time prior to the date of the assignment in the sum of $760.78. The assignee applied for an order settling and allowing his accounts, and the matter was referred to a referee to determine, among other things, the manner of the distribution of the assets. He filed his report giving a preference to the wage earners over the claim of the United States government, and it is the order confirming this report which is before us on appeal.

The question may be stated in this fashion: In view of section 64 (b) of the Bankruptcy Act, as amended in 1926, are wages due to workers entitled to priority in order of payment over taxes due to the United States government, where there has been no bankruptcy, but an assignment for the benefit of creditors made under and pursuant to the Debtor and Creditor Law of the State of New York?

Assignments under the Debtor and Creditor Law (Cons. Laws, ch. 12) of this State and bankruptcy proceedings are not one and the same thing. One is governed by State law and the other by the provisions of an act of Congress. Thus, the State law, section 22 of the Debtor and Creditor Law, giving preference to wages and salaries due at the time of assignment, where the services were rendered within three months prior to the execution of the assignment, not exceeding three hundred dollars to each employee, could not and would not apply to debts due the United States, provided such law was inconsistent and contrary to an act of Congress giving the claims of the Federal government priority. Such a Federal law has been upon the statute books since 1797. It is section 3466 of the Revised Statutes of the United States, title 31, United States Code, section 191, which reads: Priority established. Whenever any person indebted to the United States is insolvent, or whenever the estate of any deceased debtor, in the hands of the executors or administrators, is insufficient to pay all the debts due from the deceased, the debts due to the United States shall be first satisfied; and the priority established shall extend as well to cases in which a debtor, not having sufficient property to pay all his debts, makes a voluntary assignment thereof, or in which the estate and effects of an absconding, concealed, or absent debtor are attached by process of law, as to cases in which an act of bankruptcy is committed.”

Voluntary assignment for the benefit of creditors is specifically mentioned in this section, and unless there has been some modification or change in this law or some subsequent act which nullifies it, we should give effect to its plain statement and meaning. Here we have a corporate entity, the Kupshire Coats, Inc., indebted to the United States for taxes, and insolvent. It has made a voluntary assignment of its assets and, not having sufficient funds to pay all the debts due, those due to the United States are to be first satisfied. The respondents have claimed, and the courts below have held, apparently, that a change or modification in this law was made by the Bankruptcy Act and that the bankruptcy provisions apply to the voluntary assignments for the benefit of creditors under State laws. Section 64 of the Bankruptcy Act of 1898, U. S. Code, title 11, § 104, as amended by the act of May 27, 1926 (Ch. 406, § 15; 44 U. S. Stat. (666), reads:

“ Section 64. Debts which have priority ' v(a) The Court shall order the trustee to pay all taxes legally due and owing by the bankrupt to the United States, State, county, district, or municipality, in the order of priority as set forth in paragraph (b) hereof: Provided, that no order shall be made for the payment of a tax assessed against real estate of a bankrupt in excess of the value of the interest of the bankrupt estate therein as determined by the Court. Upon filing the receipts of the proper public officers for such payments the trustee shall be credited with the amounts thereof, and in case any question arises as to the amount or legality of any such tax the same shall be heard and determined by the court.
“ (b) The debts to have priority, in advance of the payment of dividends to creditors, and to be paid in full out of bankrupt estates, and the order of payment shall be * * * (5) wages due to workmen, clerks, traveling or city salesmen, or servants, which have been earned within three months before the date of the commencement of the proceeding, not to exceed $600 to each claimant; (6) taxes payable under' paragraph (a) hereof * * *.”

We are of the opinion that these two statutes of the United States should be read together; that all claims of the United States in a voluntary assignment have preference over all other claims, including wages, and that the Bankruptcy Act only applies to cases of bankruptcy and to proceedings in the bankruptcy court, or coming within its jurisdiction.

In Matter of People (Casualty Co. of America) (232 N. Y. 559) we held that section 3466 of the Revised Statutes gave the United States the right to share in the assets of the Casualty Company of America on a claim which was contingent at the date of the entry of the order of liquidation, but which accrued prior to the distribution of the assets on an instrument given by the Casualty Company of America for the appearance of a defendant in a criminal case. Although the Bankruptcy Act did not enter into the decision, yet the rights of the United States govern- - ment, under section 3466, were recognized and enforced. The limited application of the Bankruptcy Act even in the Federal courts and as relating to equity receiverships is fully reviewed in 43 Harvard Law Review, p. 251, The Differences in the Priority of the United States in Bankruptcy and in Equity Receiverships.”

While we find no case exactly in point, and counsel have none such on their briefs, yet reference may be made to Cook County Nat. Bank v. United States (107 U. S. 445); Liberty Mut. Ins. Co. v. Johnson Shipyards Corp. (6 Fed. Rep. [2d] 752); Stripe v. United States (269 U. S. 503); County of Spokane v. United States (279 U. S. 80); New York v. Jersawit (263 U. S. 493). In Price v. United States (269 U. S. 492) it was held that taxes due the United States are debts within the meaning of the Revised Statutes, section 3466, giving the United States priority in certain cases, and that the statute is to be construed liberally. In the following case (Stripe v. United States, p. 503) it was held that in an equity receivership the United States is entitled to have its claim against the corporation for taxes first satisfied, as provided in Revised Statutes, section 3466. If this section applies to equity receiverships it should also apply to voluntary assignments in State courts and carry with it the preference therein given.

The orders should be reversed in so far as they relate to the question here presented and the claim of the United States given preference over the wage claims, without costs.

Lehman, O’Brien, Hubbs, Crouch, Loughran and Finch, JJ., concur.

Ordered accordingly.


author: O’Brien, J.

text:
    In the Matter of the Accounting of Virginia M. Scott, as Administratrix of the Estate of Andrew F. Murray, Deceased. Central Hanover Bank and Trust Company, Appellant; Virginia M. Scott, as Administratrix, et al., Respondents.
    (Argued November 18,1936;
    decided December 31, 1936.)

      Andrew F. Van Thun, Jr., and Ernest M. Morrison for appellant.

      Albert Erdman for Blanche G. Erdman et al., as executors of Paul Gumbinner, deceased, respondents.
   O’Brien, J.

The Central Trust Company, predecessor of appellant Central Hanover Bank and Trust Company, recovered a money judgment for $51,674.44 against Andrew F. Murray and docketed it August 7, 1914. Respondents Erdman and others, as executors of Paul Gumbinner, also recovered a money judgment for $5,934.83 against Murray and docketed it March 9, 1920. Murray died December 27, 1932, and respondentJScott qualified as administratrix. Appellant trust company filed its proof of claim March 9, 1933, with the administratrix, and on June 21, 1934, served a summons, but no complaint, in an action in the Supreme Court, New York county, on the judgment docketed by it August 7, 1914. The administratrix filed her account October 25, 1935, and petition for judicial settlement with the Surrogate of Bronx county. In her petition the only creditors listed are, in addition to one whose interests are not here involved, this appellant trust company and respondents Erdman and others, as executors of Gumbinner. Appellant served its complaint in its action on the judgment November 8, 1935, and the executors of Gumbinner filed proof of claim November 14, 1935. By order of the Supreme Court, New York county, dated December 26, 1935, on consent of the Surrogate of Bronx county, the action of Central Hanover Bank & Trust Co. v. Scott, as Administratrix, was transferred to the Surrogate’s Court, Bronx county, “ for determination by said court in the pending accounting proceeding affecting the administration of the Estate of Andrew F. Murray,” and on December 30, 1935, the Surrogate of Bronx county by order consolidated the accounting proceeding and the action. After trial of the issues the Surrogate rendered • a decision January 29, 1936, for a judgment in the sum of $51,239.36 in favor of appellant trust company against Murray’s administratrix as a valid claim against the estate and filed a decree on accounting, February 14, 1936, adjudging that the trust company, by reason of the institution of its action within the statutory period to preserve its judgment claim,” has a valid judgment claim for $51,674.44. The decree also adjudged that the claim of the Gumbinner estate for $5,934.83 is valid but is subordinate in priority and payment to the priority and payment of the judgment claim of the trust company.

The Appellate Division modified the decree of the Surrogate by reversing the order of December 30, 1935, which had consolidated the proceeding for judicial settlement of the accounts of the administratrix with the action instituted by appellant trust company against Scott, as administratrix, and by denying the motion for judgment in favor of the trust company against the administratrix. It struck out that part of the Surrogate’s decree which adjudged that the trust company’s judgment have priority in payment over all other judgment creditors, and in its place inserted a provision adjudging that the trust company’s valid claim for $51,239.36 is subordinate in priority and payment to the judgment for $5,934.83 recovered by the executors of Gumbinner.

The Surrogate’s order of December 30, 1935, by which the accounting proceeding and the action were consolidated, is authorized by section 65 of the Surrogate’s Court Act, as amended by the Laws of 1934, chapter 352. It provides: § 65. Consolidation of actions and proceedings. At any time when two or more proceedings are pending involving in whole, or in part, the same matters, the surrogate may, in his discretion, consolidate such proceedings upon such terms as shall appear to him to be equitable and just; but without prejudice to the power of the surrogate to make any subsequent order or decree in either or any of them. The surrogate shall have like power to consolidate' with any proceeding an action at law transferred to the surrogate’s court of the counties of New York, Kings, Queens, Bronx, Richmond and Westchester.” We can perceive no reason for limiting the comprehensive language employed in this section. It includes the circumstances present in this action and this proceeding.

Respondent argues that, pursuant to section 44 of the Civil Practice Act, appellant’s judgment, which had been docketed August 7, 1914, was outlawed by the lapse of more than twenty years when the Surrogate on October 25, 1935, obtained jurisdiction. Section 44 is embraced within article 2, which relates exclusively to limitations of time, and must be deemed to be a statute of limitation. Section 44 provides that a judgment is conclusively presumed to be paid unless within twenty years the debtor or his representative makes a payment or acknowledges an indebtedness of some part of the amount recovered by the judgment. Although only these two factors are specified as elements which toll the statute, clearly a reading of the entire section is sufficient to demonstrate that the institution of an action before the expiration of the twenty years also tolls it. This is the language: “A person may avail himself of the presumption created by this section under an allegation that the action was not commenced, or that the proceeding was not taken, within the time therein limited.” Here is a clear implication that the institution of an action within the twenty years need not be followed within the same time by the rendition of a judgment or even the service of an answer. (Seaman v. Clarke, 60 App. Div. 416, 420; affd., 170 N. Y. 594.) This rule was again enforced in Jacobs v. Del Genovese (179 App. Div. 163, 165), where the court, in interpreting the same language then embraced within sections 376 and 378 of the Code of Civil Procedure, announced: “ * * * unless an action on a judgment is commenced within twenty years after the judgment is recovered, the right of action thereon is extinguished. * * * However, once an action is actually commenced within the twenty years, the statute cannot be set up as a bar, even though at the time the answer is served more than twenty years have expired. This is clearly held in Seaman v. Clarke (supra). The presumption of payment is determined by reckoning back from the time when the action on the judgment is commenced. If at that time the period of twenty years has not elapsed, there is no presumption, whereas, if twenty years have elapsed, the presumption is conclusive and no right of action exists.” In Matter of Hoes (183 App. Div. 38), upon which respondent relies, no action on the judgment was instituted within the twenty years. In the case at bar the action was begun two months prior to the expiration of the twenty years.

The order of the Appellate Division should be reversed and the decree of the Surrogate’s Court affirmed, with costs in this court and in the Appellate Division.

Crane, Ch. J., Lehman, Hubbs, Crouch, Loughran and Finch, JJ., concur.

Ordered accordingly.


author: Finch, J.

text:
    Margaret Ferguson, Respondent, v. Village of Hamburg, Appellant.

      (Argued December 2, 1936;
    decided December 31, 1936.)

      R. Foster Piper for appellant.

      Robert W. McNulty for respondent.
   Finch, J.

This is an action in equity brought to obtain an injunction restraining the defendant, the village of Hamburg, from taking and diverting the waters of Eighteen Mile creek and to compel the removal of the dam erected by the defendant and to permit the waters of the creek to flow in their natural course. This case and eleven other companion cases were referred to an official referee. Pursuant to the decision of the referee a judgment was entered enjoining the defendant from diverting the waters of Eighteen Mile creek and directing that the dam be removed and the waters permitted to flow in their natural course unless the village of Hamburg within four months should acquire by grant from the plaintiff the right to appropriate the waters or, failing to acquire such right by grant, should institute condemnation proceedings to acquire this right. Upon appeal to the Appellate Division the judgment was affirmed, two justices dissenting.

Eighteen Mile creek flows through the incorporated village of Hamburg and four miles therefrom empties into Lake Erie. The village takes its water from a reservoir created by a dam in this creek. The village also, after attempting to purify its sewage, returns the same to the creek below the dam.

The plaintiff, as well as several of the plaintiffs in companion cases, is an owner of land on this creek below the dam but above the outfall from the sewage disposal plant. The plaintiffs in the other companion cases are riparian owners below both the dam and the outfall of the sewage disposal plant. Although the village has been taking waters from the creek since 1923, there was no preceptible lessening of the flow of waters in the creek until 1928 when a higher dam was built creating a larger reservoir. In 1930 and again in 1934 the dam was altered so as to increase the storage capacity of the reservoir. The waters taken from the creek have been used by the residents of the village and also by persons residing outside the village boundaries. As a result since 1928 there has been a substantial diminution in the flow of waters below the dam, especially during the dry season.

' Although there was a hearing before the Water Power and Control Commission in 1928 and permission was granted to the village to divert the waters and the flow of water was affected by the creation of the dam during that year, the plaintiff did not institute action until 1934. The village contends that the plaintiff and the others have not suffered substantial damage; that injunctive relief should not be afforded in view of the authorization granted by the Water Power and Control Commission; and that the plaintiff has lost her rights by loches. The village also claims that the relief should not be in the form granted.

The primary question on this appeal involves the form of relief. The plaintiff has been granted an injunction with the alternative in the defendant of purchasing the water rights or commencing a condemnation proceeding to acquire them. '• The village contends, and the dissenting judges in the Appellate Division are in accord, that since a court of equity had jurisdiction of the matter it should have determined the damages of each plaintiff and, upon ascertainment of such damages, provided that an injunction should not be granted unless the village failed to tender to the plaintiff the amount of the damages so fixed by the court in equity.

There can be no doubt that the plaintiff is not entitled to an absolute injunction. The controversy is not one between individuals but between an individual on the one hand and a municipality on the other. The acts of the municipality to which the plaintiff objects were for the purpose of furnishing the inhabitants of the village with one of the necessities of life. The plaintiffs in this and the other cases stood by while the village erected the dam and developed the water system and they cannot come forward now and demand that the village raze the dam which was constructed at great public expense. (New York City v. Pine, 185 U. S. 93.)

The village, however, is diverting waters and thereby impairing the riparian rights of the plaintiff. The plaintiff, therefore, is entitled to relief. The only question is as to the form which the relief should take. The lower courts have granted the injunction unless the village purchases the water rights or institutes proceedings to condemn them. We need not consider the alternative of purchase. Although we have no doubt that the plaintiff will be fair and reasonable, nevertheless, it places her in a position where she can command her own price. The remaining alternative of condemnation proceedings takes the village out of a court of equity which has jurisdiction of the matter and sends it to institute new proceedings. In addition, there is grave doubt whether this alternative is a real one. Under the Village Law (Cons. Laws, ch. 64) condemnation proceedings are subject to a permissive referendum. (§ 221.) If such a referendum is demanded, a resolution must be submitted stating the amount to be expended. (§§ 139, 139-a-d, 129.) In the case at bar it would be extremely difficult to fix even an approximation of the amount necessary and it is possible that the amount estimated in an attempt to be on the safe side would be so high that the resolution would be rejected in the referendum. The net result would be that the plaintiff would have the absolute injunction to which it is not entitled.

Once a court of equity has jurisdiction of a cause it has the power to dispose of all the matters at issue and grant complete relief. (1 Pomeroy on Equity Jurisprudence [4th ed.], § 181; Carpenter v. Osborn, 102 N. Y. 552.) Even if it is found that the parties are not entitled to equitable relief a court of equity may retain the cause and grant such relief as is proper. (Pomeroy, op. cit., supra, §§ 231, 236.) Equity will administer such relief as the exigencies of the case demand at the close of the trial.” (Bloomquist v. Farson, 222 N. Y. 375, 380.) In the elevated railway cases, which are analogous to the case at bar, the plaintiffs sought to restrain the maintenance of the elevated lines in front of their premises on the ground that they tended to destroy the plaintiffs’ easements of light, air and access. The courts decided that the plaintiffs had a valuable right which was being impaired, but did not grant an absolute injunction or require the railway companies to resort to separate condemnation proceedings. Instead they held that a court of equity could ascertain the damages and grant an injunction which was not to be effective unless the defendant failed to pay the amount fixed as damages for the past and permanent injury inflicted. (Pappenheim v. Metropolitan Elevated Ry. Co., 128 N. Y. 436; Lynch v. Metropolitan Elevated Ry. Co., 129 N. Y. 274; Van Allen v. New York Elevated Ry. Co., 144 N. Y. 174; Cox v. City of New York, 265 N. Y. 411.) This method of expeditiously disposing of the entire matter in a court of equity, sometimes termed inverse condemnation,” has been applied in a case where land owners sought to enjoin a municipality from diverting waters. (Westphal v. City of New York, 177 N. Y. 140; New York City v. Pine, 185 U. S. 93.)

The plaintiff has voluntarily subjected herself to the jurisdiction of a court of equity and thereby conferred upon the court the power to retain the cause and grant whatever relief is proper. A decree of “ inverse condemnation,” fixing the amount of past and permanent damages resulting from the impairment of the riparian rights of the plaintiff, and granting an injunction which is to take effect only if the municipality fails to pay such damages, would furnish expeditious and adequate relief. It is in practical effect the equ valent of a condemnation proceeding. It would reimburse the plaintiff for the impairment of her riparian rights; it would permit the defendant to continue to furnish its inhabitants with water; it would dispose of the entire matter in the court of equity and it would remove the possibility of placing the village in a position where it might be at the mercy of an unfair riparian owner.

Such relief the plaintiff is entitled to and she is not barred by loches. The factual finding by the lower court that there has been no loches has been affirmed.

Nor is the plaintiff barred by the approval of the Water Power and Control Commission granted pursuant to a provision of the Conservation Law (Cons. Laws, ch. 65), requiring that the plan submitted by the village provide for the payment “ of the proper compensation for any and all legal damages.” (Conservation Law, § 523.) _ =

_ It follows that the judgment appealed from should be modified so as to remit the cause to the Special Term to determine all the damages which the plaintiff has sustained by reason of the appropriation by the village of her property rights. When such damages have been determined a judgment may be entered providing that an injunction should issue against the village unless within a reasonable time, to be fixed by Special Term, the defendant should pay or tender to the plaintiff the amount of damages so fixed by the court.

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

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

Judgment accordingly.


text:
    In the Matter of George W. Egbert, as Superintendent of Banks of the State of New York, Respondent, against John N. Harman, as Clerk of the County of Kings, Appellant.
    (Submitted November 18,1936;
    decided December 31, 1936.)

      Hector McG. Curren for appellant.

      Henry L. Bayles, Edward Feldman and Carl J. Austrian for respondent.
   Crane, Ch. J.

Fees of the Clerks of the counties of New York, Richmond, Kings, Bronx and Queens are scheduled in section 1557-a of the Civil Practice Act.

The County Law (Cons. Laws, ch. 11, § 161, subds. 6 and 7) reads as follows:

§ 161. General powers and duties. The county clerk shall: * * *
“ 6. Keep in his office a book, free at all times to public inspection, in which shall be entered all fees charged or received by him for any official service, the time of receiving it, its nature, and the persons for whom rendered.
“ 7. Except as otherwise specially prescribed by law, each county clerk or register, who receives a salary, must account for, under oath, and pay to the treasurer of his county, in the manner prescribed by law, all fees, perquisites, and emoluments, received by him, for his official service. This subdivision also applies to the county of New York.”

And section 70 of the Public Officers Law (Cons. Laws, ch. 47) reads as follows:

“Accounting for fees. Where a public officer is required, by law, to keep an account of, or to pay over, the fees or other moneys, received by him for official services, he must include therein all sums, received by him, to which he was entitled, by reason of any act, performed by him in his official capacity; whether the act did or did not pertain to his office, or to the business thereof.”

Thus we see that a salaried County Clerk is under an official duty to collect the fees specified by law and obliged to turn them over to the county as county funds for public use. Unless there is some special direct act modifying these provisions and taking away the fees from the public, these statutes must be given force and effect. The fees collected are not for the benefit of the County Clerk. He is merely under a duty to collect them. The fees are for the benefit of the public to help reduce the expense of maintaining the offices.

With this background we approach the question, whether the Banking Law (Cons. Laws, ch. 2) and the Insurance Law (Cons. Laws, ch. 28) have abolished some of these fees in the interests of a special class, a very small class when compared with the city as a whole.

The Banking Law of this State, sections 57 to 83, deals with the powers of the Superintendent of Banks in taking possession of delinquent or insolvent banks. Unless business is resumed after he takes possession, liquidation proceedings follow which have all the form of a receivership; assets are collected and creditors paid pro rata. The statute provides for the payment of these debts, including the expenses of liquidation. Section 63 reads as follows: “ Payment by superintendent of expenses of liquidation. The superintendent shall pay out of the funds in his hands, of such corporation or private banker, all expenses of liquidation, subject to the approval of the supreme court in the judicial district in which the principal office of such corporation or banker is located, and upon notice of the application for such approval to such corporation or banker. He shall, in like manner, fix and pay the compensation of special deputy superintendents, assistants, counsel and other employees appointed to assist him, in such liquidation pursuant to the provisions of this article. But a special deputy who, as examiner acting under commission from the superintendent, has previously examined the books, papers and affairs of such corporation or banker, shall not receive compensation as such special deputy which exceeds by more than five dollars a day the per diem compensation received by him as examiner at the time of maldng such examination.” All the expenses, it will be noticed, shall be paid out of the funds collected, not out of the taxpayers. The expenses necessarily include all the fees of public officers specified in the section of the Civil Practice Act, above referred to — fees for recording instruments, transcripts thereof and other matters. This section, however, must be read in. connection with section 71. This reads as follows: Superintendent’s power to sue, execute instruments, et cetera, for delinquent; actions and proceedings preferred; exemption from filing fees. For the purpose of executing any of the powers and performing any of the duties hereby conferred upon him, the superintendent may, in the name of the delinquent corporation or private banker, prosecute and defend any and all actions and legal proceedings. Any such action or proceeding, upon application of the superintendent, shall be entitled to the same preference to which an action or proceeding by or against a receiver appointed by the court is entitled in any court of the state. He may, in the name of the delinquent corporation or banker, execute, acknowledge and deliver any and all deeds, assignments, bills of sale, releases, extensions, satisfactions and other instruments necessary and proper to effectuate any sale, lease or transfer of real or personal property or to carry into effect any power conferred or duty imposed upon him by this article or by order of the supreme court. Any instrument executed pursuant to the authority hereby given shall be as valid and effectual for all purposes as though the same had been executed by the officers of the delinquent corporation by authority of its board of directors, or by the private banker personally. The superintendent shall not be required to pay any fee to any public officer for filing or recording any paper or instrument executed in pursuance of any power conferred on him by this section.” We think this provision must be taken as it reads, and not be given a wider interpretation than the words themselves will bear. The Superintendent is given here specific powers in the name of the corporation to execute and sign any instrument “ to carry into effect any power conferred or duty imposed upon him by this article or by order of the Supreme Court.” Any instrument thus executed by him shall be recorded free of charge. This is the meaning of the words of the last sentence ■ — • The superintendent shall not be required to pay any fee to any public officer for filing or recording any paper or instrument executed in pursuance of any power conferred on him by this section.” This means, for it so states, a paper or instrument executed by the Superintendent in pursuance of the power given by the section. It cannot be extended, in our judgment, to mean anything else. This is in harmony with our ruling in Van Schaick v. Jacoby (266 N. Y. 517), even though the exemption from filing fees in that case was much broader than the exemption here.

The transcript of a judgment not falling within the papers classed in section 71, the Superintendent of Banks was obliged to pay a fee for recording with the County Clerk and charge it to the expenses of liquidation.

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

Lehman, O’Brien, Hubbs, Crouch, Loughran and Finch, JJ., concur.

Ordered accordingly.


text:
    In the Matter of the Accounting of Maggie L. Schorer, as Executrix of John B. Schorer, Deceased, Appellant. George E. Pfahler, Respondent.
    (Argued November 16, 1936;
    decided December 31, 1936.)

      Paul B. Taylor and Truesdale Clarke for appellant.

      Henry R. Glynn for respondent.
   Hubbs, J.

John B. Schorer died January 25, 1927. Letters testamentary under his will were issued to the appellant on February 7, 1927. On or about June 20th, 1927, the claimant, George E. Pfabler, filed a verified claim for medical services amounting to $2,500. The claim was filed by respondent’s attorneys together with a notice of retainer. The attorney who served those papers testified to a conversation with the attorney for the appellant in which the attorney for the appellant said: Let it go along, and we’ll see what we can do; and when we come to render an accounting, we’ll see what we can do with it; and if we can’t do anything, we will go into court and thrash it out.” A

Thereafter, and until June 28, 1934, when respondent instituted this proceeding for a compulsory judicial settlement of the accounts of the appellant as executrix, no accounting was had and no action was taken with respect to the claim.

In the accounting proceeding the appellant answered and pleaded the six-year Statute of Limitations as a bar. The Surrogate decided that the six-year Statute. of Limitations did not apply and ordered a judicial settlement and a trial for determination of the claim. The Appellate Division affirmed, one justice dissenting.

The question on this appeal is whether the six-year Statute of Limitations, section 48 of the Civil Practice Act, applicable to contract actions, applied to the rejected claim against the estate then in process of liquidation in Surrogate’s Court. Section 211 of the Surrogate’s Court Act reads as follows:

“ § 211. Rejected claim to be tried on judicial settlement; limitation of action by creditor. If the executor or administrator doubts the justice or validity of any claim presented to him, he shall serve a notice in writing upon the claimant that he rejects said claim, or some part of it, which he specifies. Unless the claimant shall commence an action for the recovery thereof against the executor or administrator within three months after the rejection, or, if no part of the debt is then due, within two months after a part thereof becomes due, said claimant, and all the persons claiming under him, are forever barred from maintaining such action, and in such case said claim shall be tried and determined upon the judicial settlement.”

The section prescribes a limitation on the time within which to bring an action in another court on a rejected claim. It is a short Statute of Limitations totally different from the six-year statute, section 48 of the Civil Practice Act. If an action be not commenced within the time limited by section 211, it is specifically provided therein that “ in such case said claim shall be tried and determined upon the judicial settlement.”

The only decisions involving a construction of section 211 to which we have been referred are Matter of Whitcher (230 App.Div. 239) and Matter of Deitz (134 Misc. Rep.393). In Matter of Whitcher the Appellate Division, third department, decided that the filing of the claim was the commencement of a special proceeding that tolled the Statute of Limitations; also that the filing of a petition by the claimant to compel an accounting was a proceeding in the special proceeding, and, as the proceeding was commenced before the remedy had been barred by the Statute of Limitations, it did not have the effect of barring claimant’s right to compel an accounting after the expiration of the statutory period. In Matter of Deitz a contrary opinion was expressed. We have reached the conclusion that the Appellate Division in Matter of Whitcher placed the proper construction on section 211 of the Surrogate’s Court Act.

Prior to the enactment of section 211, section 1822 of the Code of Civil Procedure provided that a rejected claim must be prosecuted by action to be commenced within six months after the claim was rejected unless the parties filed with the Surrogate a written consent that the claim be heard and determined upon a judicial settlement of the representative’s account. It also provided that if an action was not commenced within that time, the claimant was barred from maintaining an action thereon and from every other remedy to enforce payment out of the decedent’s property. The harsh provisions of that section in many instances worked great hardship. The Legislature understood that situation when it enacted the new Surrogate’s Court Act, including section 211. By section 211 it reduced the length of time within which an action must be commenced after the rejection of a claim from six months to three months. Its purpose was apparent. It desired to limit the bringing of actions on rejected claims and to cause such claims to be adjusted in Surrogate’s Court. To accomplish such purpose it extended the jurisdiction of the Surrogate’s Court by the enactment of section 211, which gives that court jurisdiction to determine all rejected claims unless action is commenced thereon in some other court within three months from the rejection of the claim. No longer is a written consent that the claim be heard by a Surrogate necessary. All that is now required to give the Surrogate jurisdiction is the filing of a claim within the time permitted and its rejection by the executor or administrator. Thereupon the claim is at issue to be passed upon in a judicial accounting. The effect was to liberalize the practice and place the parties in the same position so far as the Statute of Limitations is concerned as though an action be commenced and issue joined

No change has been made in section 211 despite many changes in the act with respect to the time within which an accounting may be had and the persons by whom and the conditions under which an accounting proceeding may be instituted.

This appeal must be determined under the law as it existed at the time the claim was filed and rejected. In section 211 the Legislature has expressly said that if an action is not commenced within three months after a claim is rejected by the representative said claim shall be tried and determined upon the judicial settlement.” In other words, all rejected claims must be determined in Surrogate’s Court upon judicial settlement unless sued in another court within three months after rejection.

Had the Legislature intended by such changes in procedure relative to the filling of accounts and judicial settlement, to limit the effect of section 211, it may be presumed the intent would have been expressed by appropriate enactment. If provision should be made for an earlier determination upon a rejected claim not sued upon within the time limited, it is a matter for legislative action. The court should not, by construction, impose a limitation not warranted by the plain wording of the statute. There is no reason why the statute should not be given a literal interpretation, which accords with the spirit of the act extending the jurisdiction of the Surrogate’s Court.

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

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

Order afíhmed, etc.


text:
    Robert I. Wishnick, Respondent, v. Preserves & Honey, Inc., Appellant.

      (Argued November 23, 1936;
    decided December 31, 1936.)

      Walter C. Lundgren, John F. Dooling, Jr., and William Piel, Jr., for appellant.

      Aaron William Levy and Louis Goldstein for respondent.
   Finch, J.

John P. Thorny retired as president of Preserves & Honey, Inc., the defendant. After his retirement the corporation claimed that he owed it a substantial amount of money. Thorny made counterclaims. Thorny and the defendant compromised their claims under an agreement which recited that claims and counterclaims had been made by the parties and were disputed. It then provided that (1) Thorny should pay the defendant corporation $7,500 by the release of a salary claim for something over $1,000, and by a cash payment of close to $6,500. (2) Thorny should deliver to the corporation his four promissory notes in the amount of $7,500 each, payable over a period of four years, making a total of $30,000 in the form of notes. (3) Thorny should deliver and assign to the corporation certain policies of life insurance upon his life “ * * * as security only, however, as hereafter set forth:

The Corporation shall hold the said policies of insurance to the extent that they are so assigned, i. e., Forty thousand dollars ($40,000), as security for the payment of the said four promissory notes, of the total amount of Thirty thousand dollars ($30,000), and forthwith upon the payment of each of the said notes, shall reassign to Thorny an amount of such policies equal to the face value of the note so paid. The amount of insurance by which the total amount of insurance assigned, i. e., Forty thousand dollars ($40,000), exceeds the amount of the face value of the notes, i. e., Thirty thousand dollars ($30,000), or the sum of Ten thousand dollars ($10,000), shall be reassigned to Thorny upon and simultaneously with the completion of payment of all of the said notes and the corporation shall he entitled to such excess amount of insurance, i. e., Ten thousand dollars ($10,000), in the event, and only in the event, that Thorny shall die prior to the payment of all the said notes, or shall default in any of his obligations hereunder, or on the notes. Thorny may at his option pay any or all of the said notes at any time prior to their due dates. In the event of Thorny’s default hereunder, or on the notes, the Corporation may surrender the insurance policies to the respective insurers thereunder and apply the cash surrender value thereof to the payment of the balance due on the notes or toward making good any such default.” (Italics interpolated.)

Thorny died before the payment of any of the notes and the defendant Preserves & Honey, Inc., recovered the sum of $42,000 on the insurance policies. One of the policies upon which the defendant collected was for $25,000 issued by the Missouri State Life Insurance Company and assigned to the defendant to the extent of some $20,000. Robert I. Wishnick, the plaintiff, was a creditor of Thorny to whom the latter also had assigned this $25,000 Missouri State Life policy as security for his indebtedness to the extent that the claim could be substantiated. This assignment was even prior in time to the one given to the defendant.

Wishnick brought an action against the defendant for money had and received, his complaint setting forth two alternative causes of action. First, he claimed the full indebtedness of Thorny to him, which amounted to about $13,000, upon the theory that the assignment was prior in time and right. Secondly, he claimed $10,000, upon the theory that the debt to the defendant was only $30,000 and that it was not entitled to retain any moneys in excess of that amount. The Trial Term held that the defendant’s assignment had priority although the plaintiff’s was prior in time on the ground that the applicable Missouri law gives priority to the assignee who first gives notice to the debtor or obligor. It also upheld the validity of the contract provisions providing for the retention of $40,000 from the proceeds of the policies in the event of the death of Thorny. It, therefore, awarded the plaintiff only the amount in excess of $40,000 received by the defendant on the policies, or approximately $2,000.

The Appellate Division, two justices dissenting, modified the judgment and awarded the plaintiff an additional $10,000, holding that the defendant was entitled only to $30,000. There was an affirmance of the holding of the Special Term that the assignment to the defendant was prior in right though subsequent in time.

The plaintiff has failed to appeal from the determination against him on the question of priority and, therefore, the only question raised upon this appeal is whether the defendant is entitled to $40,000 or $30,000. The rights of the defendant grow out of the contract between it and Thorny and the determination of the question before us depends upon an analysis of this contract.

The contract expressly provided in reference to the excess over $30,000 that The corporation shall be entitled_to such excess amount of insurance, i. e.. Ten thousand dollars ($10,000), in the event, and only in the event, that Thorny shall die prior to the payment of all of the said notes * * There is nothing ambiguous or obscure about the provision.

Preserves & Honey, Inc., is to be paid $30,000 if Thorny lives, the assignment of $40,000 worth of insurance policies being the security for such payment. In case of default by Thorny, Preserves & Honey, Inc., may surrender all the insurance policies and apply the cash surrender value to the payment of the balance due. Should Thorny die prior to the payment of all the notes, as was the case, the defendant is entitled to $40,000 out of the proceeds of the policies. Nor can ambiguity be found in the use of the phrase “ as security only,” because that very sentence goes on to say “ as security only, however, as hereafter set forth,” and then recites the provisions outlined above.

It is asserted that the provision for the payment of the additional $10,000, viz., $40,000 rather than $30,000, in the event of the death of Thorny, is in the nature of a forfeiture or penalty or a waiver of the right of redemption and, therefore, null and void. The argument would have much merit if the sum owed by Thorny, to Preserves & Honey, Inc., was $30,000 or if the parties definitely liquidated the debt at $30,000. That is not the case. An unliquidated amount was owed to the defendant. Claims were made and disputed. Similarly counterclaims were made and disputed. Thereupon the parties entered into the agreement which recited this fact and compromised the claims at various amounts depending upon the circumstances.

Where there is a dispute between parties concerning the amount of an unliquidated debt the parties may enter into a binding compromise agreement. (See Hudson v. Yonkers Fruit Co., 258 N. Y. 168.) The compromise agreement may provide for the payment of varying amounts depending upon different contingencies. Thus where a claim of $10,000 is made it may be compromised for $5,000 in cash or $7,500 in notes. In such an agreement the reason for the difference in amount is patent, but it is unnecessary for any reason to appear. The parties are entering into a contract for a valid consideration and they may fix the terms. They could provide for the payment of $5,000 or $7,500 or any other amount less than $10,000 or the sum honestly claimed to be due and they may provide for the payment of such sums in the alternative depending upon the circumstances. '

The analogy is applicable in the case at bar. The agreement in the case at bar was to pay $30,000 if Thorny lived and $40,000 if he died, thereby making the proceeds of his policies available. The agreement could have provided for the payment of $30,000 and further provided that if the income of Thorny exceeded a fixed amount the payment should be $40,000. It could have fixed the payment at $40,000 whether Thorny lived or died. No reason appears for holding that the parties could not provide for the payment of $40,000 in the event of Thorny’s death and at the same time provide for the payment of the lesser amount if Thorny did not die. Moreover, there appears a reasonable ground for providing the greater amount in the event of Thorny’s death as death would make available the insurance funds which would not be at his disposal if he should live. Compromise agreements which are based entirely upon ability to pay have been upheld. (Tebo v. Robinson, 100 N. Y. 27.)

The question of penalty or forfeiture might arise if one of the alternative sums exceeded the amount claimed by the defendant. In such case it might be argued that the agreement was giving the defendant even more than it had claimed. That question is not before us. True the agreement does not recite the amount of the claims or counterclaims, but at the trial the defendant offered to prove that the claims exceeded the counterclaims by $80,000. The trial court refused to admit this evidence on the ground that it was irrelevant since the parties had compromised a disputed claim. It is evident that the claims exceeded the counterclaims by much more than $40,000. It is unnecessary to show that such claims were valid. It is sufficient that they were honestly made. Since the parties compromised a disputed claim at varying amounts, all of which were less than the amount claimed, no reason appears for declaring a nullity the agreement to pay $40,000 in the event of Thorny’s death.

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

Crane, Ch. J., O’Brien, Hubbs, Crouch and Lough-ran, JJ., concur; Lehman, J., dissents.

Judgment accordingly.


text:
    County of Nassau, Appellant and Respondent, v. City of Long Beach et al., Respondents and Appellants.
    (Argued December 1, 1936;
    decided December 31, 1936.)

      James L. Dowsey, County Attorney (Kenneth M. Spence, Paul Van Anda, John J. Knob and Howard A. Fluckiger of counsel) for plaintiff, appellant and respondent.

      David B. Tolins, Corporation Counsel (John J. Curtin of counsel), for defendants, respondents and appellants.
   Hubbs, J.

In the county of Nassau prior to 1933 there existed two methods for collecting State and county taxes. In the town the tax was collected by the town receiver, who corresponds to a town tax collector. The Board of Supervisors of the county issued its warrants directly to the town receiver. In the two cities of the county the Board of Supervisors certified to the cities the amount of the State and county taxes to be assessed and the collection was made by the cities acting through the City Treasurer. Under the city method the cities became hable to the county for the full amount of the tax levied and certified against each by the Board of Supervisors. That was true even though there was a failure to collect the full amount of the tax certified. In any event, the cities were legally bound to pay to the county the amount of the tax certified whether actually collected or not. (Town of Amherst v. County of Erie, 260 N. Y. 361; Matter of County of Oswego v. Foster, 262 N. Y. 439.)

Prior to April 29, 1933, the city of Long Beach had collected during different years taxes to the amount of $433,760.68, which it failed to pay over to the county. Of the amount certified for collection during that period, it had failed to collect a large amount, so that of the amount due from the city to the county for collected taxes which it had not paid over to the county, and for uncollected taxes which had been certified to the city by the Board for collection, the city was indebted to the county in the sum of '$920,464.19.

This action in equity by the county against the city is to compel the payment of that amount. The trial court found in favor of the county for $433,760.68, the amount of taxes collected by the city and not paid over to the county, but refused to find in favor of the county for the amount of the taxes certified to the city for collection before April 29,1933, but which it had failed to collect.

Its refusal to find in favor of the county on its claim for the uncollected taxes was based on the provisions of chapter 594 of the Laws of 1933. The contention of the county is that it is entitled to judgment against the city for not only the sum of $433,760.68, found in its favor, but also for the amount of taxes which the city failed to collect prior to April 29, 1933, and also for the amount of taxes which the city has failed to collect since April 29, 1933. The city concedes its liability for $433,760.68, the amount found against it by the trial court, being the amount of taxes collected prior to April 29‘, 1933, but not paid over to the county. It contends that for the amount of uncollected taxes prior to that date and since that time it is not hable to the county. The basis of the city’s contention is the provisions of chapter 594 of the Laws of 1933 which it claims exonerates it from liability for such uncollected taxes.

Two important questions are here involved: First, does chapter 594 of the Laws of 1933 (effective April 29th) by its terms change the liability of the city from the absolute liability which existed before its passage and relieve it from ah liability to the county for uncollected taxes certified by the county for collection? Second, if the statute by its terms reheves the city from habihty to the county for the amount of uncollected taxes certified, is it constitutional as to uncollected taxes certified to the city by the county prior to 1933?

Prior to the enactment of chapter 594 of the Laws of 1933, the city charter (Laws of 1922, ch. 635, as amd.) required the Board of Supervisors to certify to thie city the gross amount of State and county taxes to be collected by the city. The city added that amount to the amount to be collected for city taxes and apportioned and extended the whole amount against individual properties. (Laws of 1922, ch. 635, §§ 106, 107.)

It issued its tax warrant for the collection of the tax to the City Treasurer. No segregation of State and county taxes from city taxes was required or made. It collected the tax through its own officer under its own warrant and had the power to enforce collection by action or sale of the property taxed. (Id. §§ 107, 111.) The city was the collecting authority for the collection of State and county taxes and it became the debtor of the county for the amount of the taxes certified to it for collection even though it failed to collect them from the individuaFs taxes.

Prior to 1933 the city failed to pay over to the county sums which it had collected for State and county taxes. On April 29th of that year chapter 594 became effective. It amended the city charter. By section 106 it is provided that the City Clerk shall apportion on the assessment roll in separate columns from the city tax, the State and county taxes certified to the city by the Board of Supervisors.

Section 108 directs that all State and county taxes shall be paid to the City Treasurer as agent of the county, and that the lien on all such taxes shall belong to the county. All payments of State and county taxes shall be kept in a separate fund and shall be paid over within fifteen days after the end of each calendar month. Section 114-e provides that when property is sold for non-payment of the tax and is bid in by the city, the City Treasurer shall execute to the county a certificate of sale for an amount equal to the State and county taxes with interest. So much of the proceeds of any sale of property as represents the State and county tax with interest thereon shall be paid over to the County Treasurer within thirty days from the last day of sale. (§ 115-b.)

The act provides that on the passage of the act the City Treasurer shall execute and deliver to the County Treasurer an assignment of so much of the lien acquired by the city at any tax sale theretofore had on property not redeemed as represents the amount of the State and county taxes with interest thereon. It directs that upon collection other than by sale of any tax theretofore levied, so much as represents State and county taxes shall be paid to the County Treasurer as if a separate levy had been made for State and county taxes. Upon the sale of any property for a tax theretofore levied, so much of the amount as represents State and county taxes shall be for the benefit of the county and shall be paid over to it, or if not sold the city shall deliver a tax sale certificate for such an amount as the county would be entitled to if a separate levy had been made. Then followed this provision: “ § 3 * * * (subd.) 4. Upon the passage of this act the liability of the city to the county shall be discharged to the extent of the amount of uncollected taxes heretofore levied which represents state and county taxes and to the extent of amount of the lien on property heretofore sold which is herein provided to be assigned to the county, and in lieu of the liability so discharged the city and its officials shall perform the acts required by this section.”

The act of 1933 also repealed certain provisions of the city charter which tended to make the city liable to the county as a debtor for all taxes certified to it for collection. Finally, by section 3, subdivision 4, it expressly attempted to relieve the city from liability for all uncollected taxes certified to it for collection prior to the effective date of the act. Thereafter the city acted as collecting agent for the county and ceased to be liable to the county for uncollected taxes certified to it for collection. We have nothing to do with the question as to the wisdom of the change made by the Legislature. In the absence of constitutional restrictions, it possessed plenary power to make any change which it deemed advisable in the method of collecting the taxes in question. (Matter of Pardee v. Rayfield, 192 App. Div. 5; affd., 230 N. Y. 543; Town of Amherst v. County of Erie, supra.)

Matter of County of Oswego v. Foster and Town of Amherst v. County of Erie (supra), relied upon by the county, do not hold to the contrary. In those cases this court, in construing the statutes involved, decided that the county and city were liable as debtors. In the case at bar we construe the statutes as relieving the city from that liability.

The Legislature cannot, however, constitutionally deprive the county of a vested property right, as it attempted to do by the terms of section 3, subdivision 4.

Section 10, article VIII of the State Constitution reads: No county, city, town or village shall hereafter give any money or property, or loan its money or credit to or in aid of any individual, association or corporation, or become directly or indirectly the owner of stock in, or bonds of, any association or corporation; nor shall any such county, city, town or village be allowed to incur any indebtedness except for county, city, town or village purposes.”

At the time the act of 1933 became effective, the city was indebted to the county for uncollected taxes for the collection of which the county had a valid cause of action against the city. The cause of action and indebtedness constituted property. (Town of Walton v. Adair, 111 App. Div. 817; affd., 191 N. Y. 509.)

That asset of the county could not legally be devoted to private purposes under the provision of the Constitution either voluntarily by the act of the county or by compulsion under an act of the Legislature. The city is engaged in private purposes as well as in public functions and the Constitution in unmistakable terms forbids the use of its property or credit for such private purpose. (Village of Kenmore v. County of Erie, 252 N. Y. 437.)

If, instead of having a valid cause of action against the city, the county had held the city’s written obligation to pay the amount, it would be perfectly clear that the Legislature could not legally require the county to cancel and surrender the written obligation to the city. We see no difference in the effect which the act of the Legislature attempted to accomplish.

In so far as the statute attempts to discharge the city from liability to the county for uncollected taxes certified to it for collection by the Board of Supervisors prior to April 29,1933, the effective date of the statute, it is unconstitutional and void and the city remains liable therefor.

We have given careful consideration to the other questions presented and find no error therein requiring a reversal or modification of the judgment.

This action being in equity against a municipal corporation we are of the opinion that the Special Term had discretion as to the manner in which its judgment should be collected and in view of the hardship which the city would suffer if required to raise by taxation the full amount of the judgment by one assessment it was justified in requiring that the necessary sum should be raised by spreading the tax over a number of years. (East St. Louis v. Amy, 120 U. S. 600.) Moreover, the county in its brief states: The county does not expect that the total amount of the judgment shall be provided for in the appropriation for the coming year, but certainly the county is entitled to have appropriations made over a series of years.”

The judgment in favor of the county of Nassau for $433,760.68 should be affirmed, without costs. In other respects the judgment should be reversed and the case remitted to the Special Term to proceed in accordance with this opinion, without costs.

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

Judgment accordingly.