text:
    Rocco Fata, Appellant, v. S. A. Healy Company, Respondent.

      Argued November 23, 1942;
    decided January 14, 1943.

      Sidney H. Reich for appellant.
    Plaintiff sues as a third party beneficiary of a contract by which defendant agreed to pay a definite, stipulated wage to workmen in the class to which plaintiff belongs. (Lawrence v. Fox, 20 N. Y. 268; Seaver v. Ransom, 224 N. Y. 233; Little v. Banks, 85 N. Y. 258; Pond v. New Rochelle Water Co., 183 N. Y. 330; Farnsworth v. Boro Oil & Gas Co., 216 N. Y. 40; Smyth v. City of New York, 203 N. Y. 106; Matter of International Ry. Co. v. Rann, 224 N. Y. 83; Merchants Mut. Casualty Co. v. U. S. F. & G. Co., 253 App. Div. 151; McClare v. Massachusetts Bonding & Ins. Co., 266 N. Y. 371; Strong v. American Fence Construction Co., 245 N. Y. 48.) A minimum rate of wages was fixed in advance and made part of the contract. (Corti v. Wexler, 159 Misc. 116; People v. Roschli, 275 N. Y. 26; People v. Gluck, 188 N. Y. 167; Witherbee v. Bowles, 201 N. Y. 427; Dyer v. Broadway Central Bank, 252 N. Y. 430; Hauser v. Bartow, 273 N. Y. 370; Kujek v. Goldman, 150 N. Y. 176; Rozell v. Rozell, 281 N. Y. 106; People v. Herson, 255 App. Div. 645; People ex rel. Rodgers v. Coler, 166 N. Y. 1.)

      William F. Bleakley, Chester A. Slocum and James D. Hopkins for respondent.
    An employee who seeks redress for claimed violations on the part of his employer, of the provisions of section 220 et seq. of the Labor Law, must comply with the statutory provisions in order to obtain relief, and such provisions are an exclusive remedy. (Matter of Gaston v. Taylor, 274 N. Y. 359; Matter of Carr v. Kern, 279 N. Y. 42; McGrail v. City of New York, 171 Misc. 55; Anderson v. City of New York, 243 App. Div. 731.) The provisions of the contract relied upon by the appellant were required by the statute to be included in the contract. (Simson v. Brown, 68 N. Y. 355; Fosmire v. National Surety Co., 229 N. Y. 44; Merrill v. Green, 55 N. Y. 270; Beveridge v. N. Y. El. R. R. Co., 112 N. Y. 1; Moody v. Tomasello Constr. Corp., 259 App. Div. 723; People ex rel. Rodgers v. Coler, 166 N. Y. 1; McGowin v. Menken, 223 N. Y. 509; Alexander v. Equitable Life Assur. Society, 233 N. Y. 300; Coleman v. New Amsterdam Casualty Co., 247 N. Y. 271.)

      William C. Chanler, Corporation Counsel of City of New York (Edmund H. H. Caddy and Paul E. Fusco of counsel), amicus curiæ.

    Sections 220-223 of article 8 of the Labor Law (Cons. Laws, ch. 31) do not provide an exclusive remedy where the person aggrieved by the breach of contract made for his benefit would have a cause of action without aid of the statute, while under the statute, where the rate of wages to be paid has been determined as in the instant case, an action such as that stated in the complaint herein is good. (Matter of Gaston v. Taylor, 274 N. Y. 359; Lawrence v. Fox, 20 N. Y. 268; Rooney v. Brogan Constr. Co., 107 App. Div. 258.) A laborer whose wages are fixed by a contract between his employer and a municipality for the performance of public work has a cause of action for breach of the wage provisions of the contract when the breach causes him loss. (Lawrence v. Fox, 20 N. Y. 268; Schermerhorn v. Vanderheyden, 1 Johns. 139; Dutton v. Poole, 1 Ventris, 318; Pine v. Norris, 24 Car. 2; Rockwoods Case, 1 Cro. 163; Seaver v. Ransom, 224 N. Y. 233; Little v. Banks, 85 N. Y. 258.)
   Lehman, Ch. J.

The plaintiff alleges in his complaint, among other things, that he was employed by the defendant as a “ pump operator ” upon public work which the defendant had agreed to perform for the city of New York under a contract made by the defendant with the Board of Water Supply of the city. He seeks in this action to recover the difference between the wages which the defendant paid to him, and wages at the prevailing rate ” as set forth in a schedule of wages ” filed by the fiscal officer of the city, before the commencement of the advertisement for bids on the public works proposed to be constructed.

Section 220 (subd. 3) of the Labor Law (Cons. Laws, ch. 31) (L. 1921, ch. 50 as amd. by L. 1935, ch. 300) provides that “ the wages to be paid for a legal day’s work * * * to laborers, workmen or mechanics upon such public works, shall be not less than the prevailing rate of wages * * * ” and that each contract made by a contractor for such public works shall contain. a provision that each laborer, workman or mechanic * * * shall be paid the wages herein provided.” In the same subdivision the Labor Law further provides: “ It shall be the duty of the fiscal officer * * * to ascertain and determine the schedule of wages to be paid workmen, laborers and mechanics on each such public work, prior to the time of the advertisement for bids, and such schedule of wages shall be annexed to and form a part of the specifications for the work. Such fiscal officer shall file with the department having jurisdiction such schedule of wages to the time of the commencement of the advertisement for bids on all public works proposed to be constructed. * * *.”

The Labor Law in later sections of the same article provides a statutory method for enforcing the statutory obligation to pay wages at not less than the prevailing rate. The plaintiff has not chosen to use that method. Instead he seeks by common-law action to recover the wages which it is alleged were due to him. The defendant, contending that the statutory remedy is exclusive, moved to dismiss the complaint on the ground that it fails to state facts sufficient to constitute a cause of action. By a divided court the Appellate Division reversed an order of Special Term denying the motion to dismiss and granted the motion. By permission of the Appellate Division the plaintiff appeals upon a certified question from the order of the Appellate Division and appeals also from the final judgment dismissing the complaint.

Upon this appeal we assume, arguendo, that if the obligation of the defendant to pay wages “ not less than the prevailing rate ” existed only by fiat of the Legislature, the remedy provided by the Legislature for violation of the obligation it has created would be exclusive. Indeed the plaintiff does not seriously contend otherwise. He alleges in Ms complaint that the contract entered into by the defendant with the Board of Water Supply “ provides amongst other tMngs that the defendant shall comply with the Labor Law of the State of New York, and that the wages to be paid by the defendant to its laborers, mechamos or workmen shall be not less than the prevailing rate * * * ” and that the said “ méchame or workman * * * shall receive and be paid a rate of wages not to be less than that shown in Appendix II as fixed by the Comptroller of the City of New York, the fiscal officer in charge, in accordance with Chapter 300 of the Laws of 1935 of the State of New York; said Appendix II being attached to and made part of the contract aforementioned ” and that “ Appendix II * * * required the defendant to pay as a minimum rate for pump operator * * * the sum of $1.37! an hour.” The alleged wrong for wMch the plaintiff in tMs action seeks compensation is “ That during the period plaintiff was so employed as a pump operator, he received wages based on a rate of only $.87! an hour for the work performed by him wMch was less than the stipulated and minimum prevailing rate of wages of $1.37! an hour as provided in said contract for the class of work performed by the plaintiff as aforesaid, and wMch rate the defendant agreed in said contract to pay for such work.” The problem here presented is whether a common-law action may be maintained by an employer for breach of the agreement contained in the contract between the employer and the Board of Water Supply.

The statutory mandate that a contractor must pay laborers upon public works wages at least at the prevailing rate was intended for the direct benefit of laborers as well as for the indirect benefit of the State, muMcipal corporation or public agency wMch is the other party to the contract. For that reason the statute gives to laborers a statutory remedy for violation of that command. It cannot be doubted that provisions requiring the contractor to pay such wages are also inserted in the contract, whether voluntarily or under compulsion of the statute, for the benefit of the laborers as well as for the benefit of the public body wMch is a party to the contract. The Appellate Division has, nevertheless, rejected the contention that a laborer, not a party to the contract, may enforce provisions of the contract inserted therein for his benefit, on the ground that “ it must appear that the parties to the contract intended that such third party would be benefited. Where the provisions of the contract relied upon are included pursuant to the command of the statute, no such voluntary intention can be inferred (People ex rel. Rodgers v. Coler, 166 N. Y. 1).” (263 App. Div. 725, 726.)

In the cited case this court said: “ The fact that certain provisions of the Labor Law were actually incorporated into the contract signed by the contractor cannot change or add anything to the strength of the position assumed by the city. * * * If the law is valid it governs the contract and the rights of the parties whether actually incorporated into the writing or not, since all contracts are assumed to be made with a view to existing laws on the subject. If it is not valid the contractor has not made it so by stipulating in writing to obey it and prescribing the penalty for his own disobedience which is the forfeiture of all rights under the agreement. It is not in the power of the Legislature to protect an invalid law from judicial scrutiny by providing that it must receive the assent of the parties to every contract to which it relates.” (p. 9.)

It seems plain that nothing that was said or decided in that case indicates that where a valid statute requires the insertion of provisions intended for the protection of laborers or other groups in contracts relating to matters which are subject to regulation by the State, no contractual obligation is created which may be enforced by action brought by one of the group for whose benefit the provisions have been inserted. No rule so broad is justified by reason or authority, though in many cases — perhaps in most cases — limitations not only of the scope of the statutory obligation but also of the remedy for its violation may apply also to the contractual obligation formulated in the same language.

No such problem is here presented. Here the agreement which the parties have inserted in their contract is not an agreement merely to pay wages at an unfixed rate not less than the “ prevailing rate ” as defined by the statute, but an agreement to pay wages at rates’fixed in accordance with the statute and set forth in a schedule of wages annexed to the contract. The obligation thus assumed by the contractor is precise, and extends beyond the scope of the statutory obligation. The statutory remedy provided for breach of the statutory obligation would be an inadequate and unsuitable remedy for a violation of this contractual obligation. An intention that the statutory remedy should be used for violation of the contractual obligation cannot be read into the statute by any reasonable construction. It would, indeed, render futile the contractual obligation.

The judgment of the Appellate Division should be reversed and the order of the City Court affirmed, with costs in this court and in the Appellate Division. The appeal from the order of the Appellate Division should be dismissed.

Lottghran, Finch, Rippey, Lewis, Conway and Desmond, JJ., concur.

Judgment accordingly.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Frieda Kaehler et al., Plaintiffs v. North German Lloyd, Appellant, and Atlantic Basin Iron Works, Inc., Defendant-Respondent.
    Submitted December 4, 1942;
    decided January 14, 1943.

      William L. Shumate for appellant.
    Plaintiffs recovered against the steamship company solely upon the theory that the bench had been improperly and negligently constructed in the first instance. (Wanamaker v. Otis Elevator Co., 228 N. Y. 192; Williams v. N. Y. & Q. El. L. & P. Co., 222 N. Y. 663; Rumetsch v. Wanamaker, 216 N. Y. 379.) The trial court properly instructed the jury that if they found a verdict in favor of the plaintiffs against the carrier they must also find a verdict in favor of such carrier against the construction company. (Village of Port Jervis v. First Nat. Bank, 96 N. Y. 550; Carleton v. Lombard, Ayres & Co., 149 N. Y. 137; Bessey v. Driscoll, 202 App. Div. 817; Gray v. Brooklyn Heights R. R. Co., 72 App. Div. 424; 175 N. Y. 448; Loopesko v. Upham, 187 N. Y. S. 195; Stahl v. Niagara De Luxe Cab Co., 135 Misc. 859.)

      Walter E. Warner, Jr., for respondent.
    The carrier tampered with the bench and substituted iron screws and hinges during its operation of the steamship. (Hull v. Littauer, 162 N. Y. 569; Deregibus v. Saracco, 225 App. Div. 354; St. Andrassy v. Mooney, 262 N. Y. 368.)
   Per Curiam.

The complaint, as limited by the bill of particulars accused defendant of one kind of negligence only, i. e., faulty construction. There was no real or substantial evidence of negligent maintenance of the bench. The trial court’s charge to the jury which limited the basis for recovery, and to which no exception was taken, was therefore correct. In this situation, a verdict for plaintiff against the carrier necessarily imported a finding of negligent construction and so justified a verdict over in favor of that defendant against the impleaded defendant.

The judgment of the Appellate Division so far as appealed from, should be reversed and that of the trial court, affirmed, with ■ costs in this court and in the Appellate Division.

Lehman, Ch. J., Loughran, Finch, Rippey, Lewis, Conway and Desmond, JJ., concur.

Judgment accordingly.


text:
    Josephine C. Wilson et al., Appellants, v. Jaybro Realty & Development Co., Inc., et al., Respondents.
    Argued October 27, 1942;
    decided January 14, 1943.

      Milo O. Bennett, John H. Munley and George J. Meade for appellants.
    Dimensions of a sidewalk defect are not controlling on the question of liability. (Moshier v. City of New York, 190 App. Div. 111; 228 N. Y. 612; Lalor v. City of New York, 208 N. Y. 431.)

      William B. Shelton and William J. McArthur for Jaybro Realty & Development Co., Inc., respondent.
    The condition of which the plaintiffs complained did not constitute a dangerous condition, and the dismissal of the complaint was proper. (Newhall v. McCann, 267 N. Y. 394; Katz v. Bora Realty Corp., 263 App. Div. 309; Kempe v. Concourse Realty Corp., 237 App. Div. 708; Beltz v. City of Yonkers, 148 N. Y. 67; Lane v. City of Buffalo, 232 App. Div. 334; Butler v. Village of Oxford, 186 N. Y. 444; Stakel v. City of Batavia, 260 N. Y. 628; Faber v. City of New York, 161 App. Div. 203; Gumbs v. City of New York, 246 App. Div. 737; Cullings v. Goetz, 256 N. Y. 287; Potter v. N. Y., O. & W. Ry. Co., 261 N. Y. 489; Fink v. 37 West 36th Street Co., 277 N. Y. 703.)

      Edward T. Costello for Manhattan Food Stores, Inc., respondent.
   Per Curiam.

The defendants are landlord and tenant. The demised premises were used by the defendant-tenant as a grocery store. The female plaintiff, a customer of the defendant-tenant, on leaving the store in the daytime, stepped into an opening in the concrete sidewalk and fell. In these actions to recover damages for her consequent injuries and for resultant loss of her services, the plaintiffs had a verdict against both defendants. The Trial Term set aside the verdict against the defendant-tenant and granted that defendant a new trial. Judgment in favor of the plaintiffs was entered against the defendant-landlord on the verdict.

On cross-appeals by the defendant-landlord and by the plaintiffs, the Appellate Division directed (1) that the judgment so appealed from be reversed on the law and the complaint dismissed on the law; and (2) that the order so appealed from be modified on the law by striking therefrom the words “ a new trial be granted ” and inserting in place thereof the words “ complaint dismissed on the law and that the order, as so modified be affirmed. The case is now here on an appeal by the plaintiffs from the judgment entered on the order of the Appellate Division.

In its memorandum decision, the Appellate Division said: The opening was irregular in contour, being over two feet by eighteen inches in its horizontal dimensions, and described as being as much as three inches in depth. Testimony based on measurements was to the effect that the depth was one to one and one-half inches. * * * The defect in the sidewalk must be held to have been so slight as to preclude a claim that is was dangerous.” (264 App. Div. 776, 777.)

There was evidence that the opening was “ a sort of jagged hole ” which “ varied on a sort of slant.” There was evidence that the opening had increased in size over a long period of time. We think it was for a jury to say whether such a defect unreasonably imperilled the safety of the female plaintiff on the occasion in question. There is no rule that a hole in a public thoroughfare must under all circumstances be of a particular depth before its existence can give rise to a legal liability. (See Hamer v. Village of Whitesboro, 287 N. Y. 816. Cf. Keener v. Tilton, 283 N. Y. 454.)

The judgment and the order should be reversed, with one bill of costs to the plaintiffs, and the case remitted to the Appellate Division for disposition of the questions left undecided on the appeals to that court.

Loughran, Finch, Rippey, Lewis, Conway and Desmond, JJ., concur; Lehman, Ch. J., dissents on the ground that under all the circumstances of this case, the hole did not unreasonably imperil the safety of customers of the store or of pedestrians in the street.

Judgment accordingly.


author: ■ Lewis, J.

text:
    The People of the State of New York, Respondent, v. Theodore O. Will, Appellant.
    Argued December 4, 1942;
    decided January 14, 1943.

      Joseph Lonardo for appellant.
    The refusal to charge as requested on intent to defraud, and the court’s comment in so refusing, present reversible error. (People v. Viscio, 241 App. Div. 499; People v. Odell, 230 N. Y. 481; People v. Helmer, 154 N. Y. 596; People ex rel. Hegeman v. Corrigan, 195 N. Y. 1; People v. Wiman, 148 N. Y. 29; People v. Barberi, 149 N. Y. 256; People v. Barone, 161 N. Y. 451; People v. Stiglin, 238 App. Div. 407; People v. Mungo, 258 App. Div. 983; People v. Faucetta, 262 App. Div. 778.)

      Charles P. Sullivan, District Attorney (James F. T. Delaney of counsel), for respondent.
    There was evidence to support the determination as to the appellant’s guilt of the crime of which he ■ has been convicted. (People v. Boggiano, 179 N. Y. 267; People v. Ferraro, 161 N. Y. 365; People v. Ferrara, 199 N. Y. 414; People v. Seidenshner, 210 N. Y. 341; People v. Atlas, 183 App. Div. 595; 230 N. Y. 629; People v. Sugarman, 248 N. Y. 255.) Neither the charge nor the refusals to charge present reversible error.
   ■ Lewis, J.

In connection with his purchase of a quantity of lumber the appellant gave to the seller a check upon a bank where payment thereof was refused because of insufficient funds to the appellant’s credit. As a result of the transaction the defendant stands convicted of a violation of section 1292-a of the Penal Law and grand larceny, second degree.

The judgment of conviction has been affirmed unanimously at the Appellate Division. The present appeal is by permission of a member of this court.

The Legislature has defined a violation of section 1292-a as larceny and has made proof of intent to defraud ” an essential element of the crime (Penal Law, § 1292-a). Likewise proof of an intent to defraud is made an important element of the crime of grand larceny, second degree. (Penal Law, §§ 1290, 1296.)

Under section 1292-a, id., it is also prescribed that —“ In any prosecution under this section as against the * * * drawer thereof, the * * * drawing * * * of a check * * * payment of which is refused by the drawee because of lack of funds * * *, shall be prima facie evidence of intent to defraud and of knowledge of insufficient funds in or credit with such bank * * However, the presumption — arising from a prima facie case — thus created by statute, is not conclusive. It is rebuttable and remains only so long as there is no substantial evidence to the contrary. (Potts v. Pardee, 220 N. Y. 431, 433; Matter of Magna v. Hegeman Harris Co., 258 N. Y. 82, 84.)

Upon the trial herein the prosecution made the statutory prima facie proof of the defendant’s intent to defraud ” by offering evidence which established that in payment for a quantity of lumber the defendant issued a check which was dishonored by the drawee bank because of lack of funds. However, the presumption of the defendant’s intent to defraud ” was rebutted when competent evidence was introduced by the defendant which, if believed, was proof that, with knowledge that there were insufficient funds in the drawee bank to meet the check, the seller agreed to hold the check for thirty days. There thus arose upon the trial an issue of fact which had an important bearing upon the defendant’s guilt under the statute. That issue was whether, when the defendant delivered to the seller a check drawn upon a bank in which he had insufficient funds to meet its payment, the defendant acted with intent to defraud.” Upon this decisive branch of the proof the trial justice in his main charge stated to the jury: Now, then, the statute, as to where the young man is accused of issuing a fraudulent check is as follows:

‘ Any person who with intent ’— you notice again a mental condition is contemplated, with the intent or purpose, it is not a playful act, it is an intentional act —‘ to deprive someone else of money or property,’— there is a definite line of cleavage between an intentional act to defraud or a playful act, and these are not playful acts. It says, any person who with intent to defraud shall make or draw or utter ’— and the word 1 utter ’ here is used to mean to issue — to utter is to put in circulation, start in action, start it on its way through, so I will read it again:

Any person who shall with intent to defraud shall make or draw or utter or deliver any check, draft or order for the payment of money, either in his own behalf or in behalf of any other person as an agent or representative of another or as an officer or agent of a corporation or purporting to be such agent, representative or officer, upon any bank or other depositary, knowing at the time of such making, drawing, uttering or delivery,’ you notice the disjunctive ‘ or,’ all these need not be necessary —' knowing at the time of such making, drawing, uttering or delivery that the maker or drawer has not sufficient funds in or credit with such bank or depositary for the payment of such check, although no express representation is made in reference thereto ’— the mere issuing and handing over of the check, although you say nothing about it, no representation is made thereby —' violates this section, and if any money or property is obtained from another thereby, is guilty of larceny/
Grand larceny in the second degree is the appropriating, taking/ stealing the property of another the value of which is over $100 and less than $500 in any manner whatsoever. Larceny is just another name for stealing. Larceny is the taking of another man’s property with a view of depriving him of it and appropriating it to your own use and benefit, stealing.
“ Now, there is the law as it exists.”
Following the main charge counsel for the defendant addressed to the court three requests,— the last two of which and the rulings thereupon were as follows:
“ Mr. Giorgio [counsel for defendant]: I ask your Honor to charge the jury that if the jury believes there was no intention to defraud they must acquit.
The Court: I have charged an intent. If this was just a little playful pastime, all right; but it is for you to determine whether it was an intent to defraud or just a boyish prank.
Mr. Giorgio: I ask your Honor to charge that the mere issuance of a check when there is insufficient funds to pay the same is not a violation of the law, unless there was an intention to defraud.
The Court: I have read the law very distinctly to the jury. I have read the law as it is and not the way you put it. I have read it right out of the statute books to the jury, and it does not agree with your statement of the law.
Mr. Giorgio: May I have an exception?
The Court: Yes, surely. You may retire, ladies and gentlemen.” (Emphasis supplied.)

We think the exception to the court’s ruling upon the last request was well taken. The request itself was in language which embodied a correct statement of the law governing the jury’s consideration of a decisive issue of fact in the case. But in ruling upon the request the court employed language which the members of the jury may well have construed as an instruction that the request, as framed by defendant’s counsel, was not a correct statement of the law applicable to their problem. The prosecution was required to establish that the defendant drew the check in question with intent to defraud the seller. (Penal Law, § 1292-a; People v. Weiss, 263 N. Y. 537, 538; People v. Olans, 264 N. Y. 420; and see People v. Humphries, 226 App. Div. 500, 503; People v. Roach, 231 App. Div. 622; People v. Hasto, 236 App. Div. 533, 535; People v. Nibur, 238 App. Div. 233.) In a case which presented such a close question of fact on an element of proof which was essential to a finding of the defendant’s guilt, we cannot say that the jury were not misled to the defendant’s prejudice by the ruling now challenged.

The judgments should be reversed and a new trial ordered.

Lehman, Ch. J., Loughran, Finch, Rippey, Conway and Desmond, JJ., concur.

Judgments reversed, etc.


text:
    In the Matter of Warren Mosher Co., Inc., Respondent. Frieda S. Miller, as Industrial Commissioner of the State of New York, Appellant.
    Argued November 23, 1942;
    decided January 14, 1943.

      John J. Bennett, Jr., Attorney-General (Leo G. Hosenfeld and W. Gerard Ryan of counsel), for appellant.
    There is sufficient legal evidence to sustain the finding of the Appeal Board that the persons soliciting advertising for respondent were its employees. (Matter of Glielmi v. Netherlands Dairy Co., 254 N. Y. 60; Matter of Morton, 284 N. Y. 167.) The. claim for contributions paid in 1936 and 1937 is barred by subdivision 3 of section 523 of the Labor Law (Cons. Laws; eh. 31, as amd. L. 1938, ch. 10). (People ex rel. Bankers Trust Co. v. Graves, 270 N. Y. 316; Matter of Hoople, 179 N. Y. 308; People ex rel. International Salt Co. v. Graves, 267 N. Y. 149; Ross v. State, 186 App. Div. 156; Matter of Furey v. Graves, 148 Misc. 785; 241 App. Div. 897; 266 N. Y. 415.)

      C. Murray Kavanagh for respondent.
    The Appeal Board by affirming the decision of the referee has necessarily found as a fact that the respondent maintained no direction and control over the sohcitors’ time and method of work and therefore it has disclosed that the record contains no substantial legal evidence to-support, a conclusion that the solicitors were employees. (Matter

      of Morton, 284 N. Y. 167; Matter of Electrolux Corp., 288 N. Y. 440.) The allowance of the full amount of the refund claimed, because the solicitors are independent contractors, was proper. The Statute of Limitations does not apply where the State was without jurisdiction. (Matter of Dee v. State Tax Comm., 257 App. Div. 531; 282 N. Y. 617.)
   Per Curiam.

The claim of the respondent for a refund of the contributions paid during the years 1936 and 1937 was barred by the provisions of the former subdivision 3 of section 523 of the Labor Law (Cons. Laws, eh. 31). (See now, § 516-a.)

The order of the Appellate Division should be modified accordingly and, as so modified, affirmed, without costs.

Lehman, Ch. J., Lotjghran, Finch, Rippey, Lewis, Conway and Desmond, JJ., concur.

Ordered accordingly.


text:
    The People of the State of New York, Respondent, v. Harold J. Elling, Appellant. (Appeal One). The People of the State of New York, Respondent, v. John W. Bender, Appellant. (Appeal Two).
    Appeal One: Argued October 14, 1942; decided January 14, 1943.
    .Appeal TWO: Submitted October 29, 1942;
    decided January 14, 1943.

      B. H. Chernin for Harold J. Elling, appellant.
    The sanity of defendant Elling was not established beyond a reasonable doubt, and the verdict is against the weight of evidence. (People v. Hoch, 150 N. Y. 291; People v. Koerner, 154 N. Y. 355; People v. Egnor, 175 N. Y. 419; People v. Spencer, 179 N. Y. 408; People v. Purcell, 214 N. Y. 693; People v. Schmidt, 216 N. Y. 324; People v. Sherwood, 271 N. Y. 427.) The proof as to Elling’s guilt on the kidnapping count consisted solely of an uncorroborated confession and was insufficient as a matter of law. (People v. Roach, 215 N. Y. 592; People v. Palmer, 109 N. Y. 110; People v. Weiss, 276 N. Y. 384; People v. Razezicz, 206 N. Y. 249.) It was reversible error to admit evidence of other crimes not charged in the indictment. (People v. Molineux, 168 N. Y. 264; People v. Allen, 282 N. Y. 511; People v. Robinson, 273 N. Y. 438; People v. Posner, 273 N. Y. 184; People v. Horie, 258 App. Div. 246.) The defendant Elling was deprived of a fair and impartial trial by reason of the prejudicial remarks of the District Attorney in his summation. (People v. Ferranti, 239 N. Y. 533; People v. Manganaro, 218 N. Y. 9; People v. O’Regan, 221 App. Div. 331; People v. Esposito, 224 N. Y. 370; People v. Mull, 167 N. Y. 247; People v. Slover, 232 N. Y. 264; People v. Fielding, 158 N. Y. 542; People v. Kresel, 243 App. Div. 137.) The defendant Elling was deprived of a fair and impartial trial by reason of the attitude of a juror. (People v. Leonti, 262 N. Y. 56; McHugh v. Jones, 283 N. Y. 534; Clark v. United States, 289 U. S. 1; People v. Bishop, 66 App. Div. 415.)

      Walter J. Relihan for John W. Bender, appellant.
    The evidence did not justify the submission of the case to the jury under subdivision 2 of section 1044 of the Penal Law, because Elling killed Skaritza for personal reasons and not in furtherance of the felony of robbery and because at the time of the murder the felony of kidnapping was in progress and not the felony of robbery. (People v. Sobieskoda, 235 N. Y. 411; People v. Ryan, 263 N. Y. 298; People v. Marendi, 213 N. Y. 600.)

      Daniel J. McAvoy, District Attorney, for respondent.
    The question of defendant Elling’s sanity was one of fact for the jury, and its verdict on this issue was not contrary to the weight of evidence. (Matter of Myer, 184 N. Y. 54; People v. Hoch, 150 N. Y. 291; People v. Rodawald, 177 N. Y. 408.) There was ample proof to establish the crime of kidnapping under the third count of the indictment. (People v. Carr, 3 N. Y. Crim. Rep. 578; People v. Fitzgerald, 288 N. Y. 58; People v. Jaehne, 103 N. Y. 182; People v. Conroy, 287 N. Y. 201; People v. Lytton, 257 N. Y. 310; People v. Hope, 257 N. Y. 147; People v. Small, 274 N. Y. 551.) The question of defendant Elling’s sanity was one of fact for the jury, murder count of the indictment was one of fact for the determination of the jury. (People v. Walsh, 262 N. Y. 140; People v. Moran, 246 N. Y. 100; People v. Marwig, 227 N. Y. 382; People v. Sullivan, 173 N. Y. 122; Dolan v. People, 64 N. Y. 485; People v. Giro, 197 N. Y. 152; People v. Michalow, 229 N. Y. 325; People v. Friedman, 205 N. Y. 161.)
   Per Curiam.

The unquestioned evidence is that the defendant Elling shot Skaritza for a reason personal to Elling and unrelated to the robbery and that the defendant Bender tried to prevent the act.

As to the defendant Bender the judgment, so far as appealed from, should be reversed and the second count of the indictment dismissed.

As to the defendant Elling, the judgment of conviction should be affirmed.

Lehman, Ch. J., Loughban, Finch, Rippey, Lewis, Conway and Desmond, JJ., concur.

Judgment accordingly.


author: Finch, J. Lewis, J. Loughran, J.

text:
    In the Matter of the Estate of Henry C. West, Deceased. William J. Demorest, Jr., et al., Appellants. City Bank Farmers Trust Company, as Trustee, et al., Respondents.

      Argued June 5, 1942;
    decided January 14, 1943.

      Francis J. Mahoney for Gerald P. Culkin, as special guardian for William J. Demorest, Jr., et al., infants, appellants.
    Subdivision 2 of- section 17-c of the Personal Property Law (Cons. Laws, ch. 41) is unconstitutional because it is retrospective and deprives the remaindermen of vested rights without due process of law. (Morris v. Sickly, 133 N. Y. 456; Matter of Rowland, 273 N. Y. 100; Matter of People [Title & Mortgage Guarantee Co.], 264 N. Y. 69; Lytle v. Beveridge, 58 N. Y. 592; Matter of Albertson, 113 N. Y. 434; Matter of Jackson, 258 N. Y. 281; Matter of Otis, 276 N. Y. 101; 277 N. Y. 650; Matter of Chapal, 269 N. Y. 464; Matter of McManus, 282 N. Y. 420; New York & Oswego M. R. R. Co. v. Van Horn, 57 N. Y. 473; Matter of Pell, 171 N. Y. 48; Matter of Lansing, 182 N. Y. 238; Westervelt v. Gregg, 12 N. Y. 202; Ætna Life Ins. Co. v. Hoppin, 214 Fed. 928; City of Rochester v. West, 164 N. Y. 510; Matter of Wacht, N. Y. L. J., January 14, 1942.) Where the property was resold by the trustee prior to the effective date of the statute the salvage operation was completed and the statute is inapplicable.

      Albert Stickney and Albert B. Maginnes for Emma M. West, appellant and respondent.
    Subdivision 2 of section 17-c purports to revise the rules of equitable apportionment between life tenant and remainderman of the proceeds of a salvage operation. Remainder interests in a trust have no right either by common law or by statute to have the income from a trust investment appropriated to the repayment of advances made out of principal for the protection of the investment, and such an appropriation constitutes an accumulation of income offensive to the public policy of this State. (Munn v. Illinois, 94 U. S. 113; Hascall v. King, 162 N. Y. 134; Thorn v. De Breteuil, 179 N. Y. 64; Matter of Martin, 165 Misc. 597; Matter of Pitney, 113 App. Div. 845; 186 N. Y. 540; Matter of Phelps, 162 Misc. 703; Matter of Chapal, 269 N. Y. 464; Matter of Otis, 276 N. Y. 101; Meldon v. Devlin, 31 App. Div. 146; 167 N. Y. 573; Matter of Marshall, 43 Misc. 238; Matter of Hood, 90 N. Y. 512; Matter of Baker, 249 App. Div. 265; Matter of McManus, 282 N. Y. 420; Lockman v. Reilly, 95 N. Y. 64; Haberman v. Baker, 128 N. Y. 253.) It is within the power of the Legislature to enact laws changing the rules governing the administration and distribution of trust funds provided such changes are in the public interest, and are not arbitrary or unreasonable. The fact that section 17-c operates retroactively to change the previously existing rule, by giving the life beneficiary of a trust the right to the payment of a reasonable share of the net income earned during the continuance of a salvage operation, and postponing repayment of principal advances until its final liquidation, does not deprive remaindermen of any property right without due process of law, within the meaning either of the Federal or State Constitutions. (Kuehner v. Irving Trust Co., 299 U. S. 445; City Bank Farmers Trust Co. v. Irving Trust Co., 299 U. S. 433; Thompson v. Siratt, 95 Fed. [2d] 214; Munn v. Illinois, 94 U. S. 113; N. Y. C. R. R. Co. v. White, 243 U. S. 188; Carpenter v. Wabash Ry. Co., 309 U. S. 23; Preston Co. v. Funkhouser, 261 N. Y. 140; 290 U. S. 163; Matter of Kaplan v. Peyser, 273 N. Y. 147; Carder Realty Corp. v. State, 172 Misc. 498; Brearley School v. Ward, 201 N. Y, 358.) The life beneficiary appeals from so much of the order affirming the decree as denies retroactive operation of the statute to the salvage operations conducted with respect to property, in which upon resale of the real estate the trustee was obliged to take back a purchase money mortgage in part payment of the purchase price. The liquidation of the investment is incomplete, and the salvage operation necessarily continues until a secondary liquidation has been accomplished. (Matter of Martin, 165 Misc. 597.)

      C. Alexander Capron and J. Karr Taylor for City Bank Farmers Trust Company, as trustee, respondent.
    The statute is constitutional. It deprives neither the life beneficiary nor the remainder-men of any property. (Lockman v. Reilly, 95 N. Y. 64; Preston Co. v. Funkhouser, 261 N. Y. 140; 290 U. S. 163; Carpenter v. Wabash Ry. Co., 309 U. S. 23; Matter of Union Trust Co. [Hoffman Estate], 219 N. Y. 514; City Bank Farmers Trust Co. v. Evans, 255 App. Div. 135; Dakin v. Demming, 6 Paige Ch. 95; Robertson v. deBrulatour, 188 N. Y. 301; Matter of Potter, 106 Misc. 113; Matter of Chapal, 269 N. Y. 464; Matter of Otis, 276 N. Y. 101; Meldon v. Devlin, 31 App. Div. 146; 167 N. Y. 573; Matter of Marshall, 43 Misc. 238; Matter of Nirdlinger, 327 Penn. St. 171; Lawrence v. Littlefield, 215 N. Y. 561; United States v. Standard Oil Co., 20 Fed. Supp. 427; 107 F. [2d] 402; Brearley School v. Ward, 201 N. Y. 358.) The express provision of the statute that it shall apply “ to any pending proceeding or action for an accounting of the transaction of an executor or trustee ” is constitutional as applied to the existing case. (New York & Oswego M. R. R. Co. v. Van Horn, 57 N. Y. 473.)
   Finch, J.

The question presented for decision is the constitutionality and construction of the provisions of subdivision -2 of section 17-c of the Personal Property Law (L. 1940, ch. 452, effective April 13, 1940; Cons. Laws, ch. 41) in so far as the same modify retroactively the rules relating to mortgage salvage operations.

The new statutory rules allot to the life tenant out of the net income earned from the operation of real estate in salvage, an annual amount up to three per cent of the face value of the mortgage investment. Such right is granted in lieu of the discretion vested in the trustee under the heretofore existing rules of trust administration to pay net income or any portion thereof to the life tenant, a discretion which has not been exercised generally by trustees through fear of possible surcharge. Such payment of net income is made payable from the beginning of the salvage operation and is declared to be final and not subject to recoupment, either from the life tenant, or from the trustee or executor by way of surcharge. With the exception of the aforesaid modification, the previously existing rules governing salvage operations are continued except that annual net income in excess of the maximum sum payable to the life beneficiary, is directed to be held and further equitable adjustments upon the apportionment are also provided ‘for, in order to insure to the remainderman that any unpaid advances from principal must be first repaid upon the final liquidation of the investment.

The validity of this statute has been put in issue upon this proceeding for an intermediate accounting by the trustee under the will of Henry C. West. By the terms of the testator’s will, his residuary estate was devised to a trustee to apply the net income therefrom to the use of his wife during her life or until her remarriage. Upon the termination of the life estate, the trust was directed to be divided and continued upon certain shares for the benefit of a nephew and niece of the testator, with remainders over.

At the time of his death in 1934, the testator’s residuary estate included, among various other assets, certain wholly owned guaranteed mortgages. Nine of these mortgages went into default after the death of the testator, and the estate acquired title to the real properties either by foreclosure or by deed in lieu of foreclosure prior to April 13, 1940; two of the properties were sold before that date, the income and proceeds therefrom, however, being retained in the hands of the trustee.

In the present proceeding the special guardian for the infant remaindermen contends, first, that the entire subdivision 2 of section 17-e is unconstitutional because it is expressly made retroactive in operation, and that, second, if constitutional, it does not apply, as a matter of construction, to the proceeds of the two properties which were sold before the statute became effective. The learned Surrogate sustained the constitutionality of the statute, but held as a matter of construction that it applied only to salvage operations uncompleted at the date of its enactment and hence was inapplicable to the two properties sold before it became effective. Upon appeal, the Appellate Division unanimously affirmed.

When a mortgage in default is foreclosed and title to the property is acquired by the trustee, the original mortgage investment is at an end and a salvage operation is initiated. (Matter of Otis, 276 N. Y. 101, 111, 112.) The real property thus acquired is substituted for the mortgage in the hands of the trustee and takes on the character of personalty. (Lockman v. Reilly, 95 N. Y. 64, 71.) The trustee holds this real property so acquired and must administer it as an asset of the trust estate for the benefit of the life tenant and the remaindermen. Like the mortgage, it is security not for principal alone but for income as well.” (Matter of Chapal, 269 N. Y. 464, 472.) With respect to the mortgages which the testator owned at the time of his death and with respect to any real property which might be acquired by the trustee following default in any of these mortgages, the testator as creator of the trust gave no express directions except the general direction of what is commonly understood by the use of the words income ” and principal.” After the initiation of the salvage operation, as before, both the life tenant and the remaindermen could compel the trustee to administer the trust and to apportion to each his just share of the income and principal, but not that of any particular asset of the trust. (Lockman v. Reilly, 95 N. Y. 64, 71; Bennett v. Garlock, 79 N. Y. 302, 320.) Although the rule requiring apportionment as between income and principal, of the proceeds of such sale has been long established (Meldon v. Devlin, 31 App. Div. 146; affd., 167 N. Y. 573), the rules relating specifically to mortgage salvage operations were speeded in the process of formulation by the courts with the coming of the economic depression of the 1930’s. In Matter of Chapal (269 N. Y. 464) this court said: We have another problem — that of the liquidation of real estate acquired of necessity because of default on a mortgage investment.” Concerning these rules thus worked out to meet the emergency resulting from widespread foreclosures, in Matter of Otis, supra, at page 112, we said: Both capital account and income account, as described in the Chopal case, are fictions * * *. If, then, the remaindermen are to participate in the apportionment on the feigned basis of unimpaired principal, the share of the fife tenant should be computed on the same assumption. The invention of the ‘ original investment ’ is no more valid than the invention of 1 unpaid interest ’ thereon. Indulgence in both fictions keeps the balance even between the respective parties in interest.”

Moreover, we expressly said in the Otis case that the rules laid down were tentative only and not intended to be final. At page 115 it was said: “ Perhaps it should be added that a general rule for such situations cannot be attained at a bound, that no rule can be final for all cases and that any rule must in the end be shaped by considerations of business policy. Accordingly, we have here put aside inadequate legal analogies in the endeavor to express fair, convenient, practical guides that will be largely automatic in their application. Only the sure result of time will tell how far we have succeeded.” It was also carefully pointed out that no hard and fast rule was laid down to guide the trustee in the disposition of net income earned during the salvage operation, but the disbursement of net income to the fife beneficiary was left to the discretion of the trustee. In the Otis case we said at page 115: “ * * * the trustee may distribute such surplus income in its discretion. (269 N. Y. at p. 470). This discretion, moreover, should be exercised with appropriate regard for the fact that unless a life tenant gets cash he does not get anything in the here and now.” The Legislature has found, however, that trustees through fear of surcharge have accumulated surplus with the result that undue hardship has been visited upon life beneficiaries. Taking heed of this hardship at the request of the executive committee of the Surrogate’s Association of the State of New York, the Legislature has declared its purposes in the statute itself. In part it reads: “ The purpose of the enactment of this subdivision is declared to be the simplification of the rules of procedure in mortgage salvage operations and the ehmination of present complications which work to the disadvantage of the fife tanant * * * by depriving him of a fixed right to the actual payment of any net income earned by the property. Such fixed right is granted in lieu of the discretion now given to the trustee to pay net income or any part thereof to the life tenant. * * * Only equitable adjustments and balances as between the parties are intended to be effectuated by the provisions of this subdivision.” Thus the Legislature has substituted in place of the discretion in the trustee permitting disbursement of surplus income, another more definite rule requiring some, albeit modest, payment of surplus income to the life beneficiaries. At the same time the Legislature has provided that additional income over and above the modest rate of payment shall be held until final adjustment, thus providing for equitable adjustments and balances as between fife beneficiaries and remaindermen upon final liquidation, and safeguarding, so far as reasonably possible, the rights of all interested parties. The statute provides: Any payment of net income heretofore or hereafter made to the life tenant up to such three per centum per annum shall be final and shall not be subject to recoupment from the fife tenant or as a surcharge against the trustee or executor. The amount of all such payments shall be taken into account, however, in the apportionment of the proceeds of sale and shall be charged against the share of the life tenant.

In thus formulating a rule that is final against recoupment for distribution of income received in excess of carrying charges, it does not appear that the Legislature has done more than direct a trustee to do what under the decisions of this court he has discretionary power to do. (Matter of Otis, supra.) Before the enactment of this statute, the life tenant could not have demanded as of right the payment to him during liquidation of more of the surplus income than he will receive under the statute. Neither does it appear that the remaindermen could properly have insisted that the trustee should be surcharged if in the exercise of his discretion he had paid to the fife tenant the amount which the statute now directs. A statutory rule of administration which requires the trustee to apportion income in accordance with a fixed standard which in the exercise of administrative discretion the trustee would even without the statute have power to adopt does not, in our opinion, constitute a taking of property. The principle is applicable that “ The mere fact that the statute is retroactive does not bring it in conflict with the Federal Constitution. * * * Nor has a person a vested interest in any rule of law entitling him to have the rule remain unaltered.” (Preston Co. v. Funkhouser, 261 N. Y. 140, 144; Munn v. Illinois, 94 U. S. 113.)

As already noted, the rules of administration heretofore set forth were tentatively stated and expressly recognized as subject to change. Before a judicial declaration, thus tentatively stated, becomes a rule of property, it must have become permanently fixed and long continued. (United States v. Standard Oil, 20 Fed. Supp. 427, 458; affd., 107 F. [2d] 402, cert. den. 309 U. S. 673.) In that case the court said: However, before setting up a judicial declaration as a rule of property, we should require, at least, that it be fixed, long-continued, and relied upon by persons acquiring property, so that its repudiation would amount to a denial of due process.” Nor can the statute in the case at bar be said to be arbitrary or capricious, but on the contrary, it is fair and reasonable and protects the interest of both income beneficiaries and remaindermen. As was said in Thompson v. Siratt (95 F. [2d] 214, 217): “ To hold that subsection (n) is repugnant to the Fifth Amendment requires a finding that its provisions are arbitrary and ■unreasonable.”

We have, therefore, in the case at bar, no taking of property, no contract right involved and no impairment of due process. This statute, therefore, cannot be held to be unconstitutional. (Robertson v. deBrulatour, 188 N. Y. 301; Brearley School, Ltd., v. Ward, 201 N. Y. 358.)

The sole remaining question is whether or not the statute is applicable in cases where the liquidation was complete before the date when the statute became effective, the income and proceeds of property being still undistributed in the hands of the trustee. We concur in the construction placed upon the statute by the learned Surrogate, namely, that its scope is limited to cases where liquidation of real property acquired is incomplete. This is in accord with the language of the statute, which provides that net income “ during the salvage operation ” shall be paid to the life tenant. Even in a “ pending proceeding ” or action for an accounting,” the language of the statute confines its application to cases where liquidation is incomplete and where during the salvage operation ” a trustee has acted in accordance with the discretion at that time vested in him. The apportionment of the proceeds of the property, both income and principal, where liquidation was completed before the statute became effective must be determined in accordance with the rules heretofore formulated by the court.

The order should be affirmed, with costs to the respondent trustee and one bill of costs to the infant-appellants, William J. Demorest, Jr., Ann Demorest and Charles Demorest, payable out of the fund.

Lewis, J.

(dissenting). The infant-appellants, by their special guardian, challenge the constitutionality of section 17-c, subdivision 2, of the Personal Property Law (Cons. Laws, ch. 41). The problem relates to the apportionment, between an income beneficiary and remaindermen, of income realized by a trustee from operations undertaken to salvage defaulted mortgages held by it as fiduciary. In this instance the mortgages in default.were nine in number. The title to each mortgaged property came into the trustee either by foreclosure or by deed in lieu of foreclosure prior to April 13, 1940. Two of the properties were sold prior to that date, the avails of the sale being retained by the trustee.

The date last mentioned is important to our inquiry because it fixes the time when there became effective chapter 452 of the Laws of 1940 which added section 17-c to the Personal Property Law. It is the effect upon the rights of a life tenant and remainder-men of the retroactive provisions of subdivision 2 of that statute which has prompted the present challenge to its constitutionality.

Section 17-c of the Personal Property Law (added by L. 1940, ch. 452, effective April 13, 1940) provides rules for the administration of that portion of a trust fund in which is a real estate mortgage, held for the benefit of one or more tenants for life or a limited term with remainder over, where title to the mortgaged property has been acquired by the trustee by foreclosure or by conveyance in lieu of foreclosure. We are not here concerned with subdivision 1 of section 17-c which applies only to estates of persons dying, or trusts created, after its enactment and to mortgage investments made thereafter by a trustee of an existing trust. The challenge is to the constitutionality of subdivision 2 of section 17-c, the terms and rules of which “ apply specifically (a) to the estates of persons dying before its enactment and (b) to mortgages on real property held by a trustee under a deed of trust or other instrument executed before the date of its enactment and (c) to real property acquired by foreclosure of mortgage or real property acquired in lieu of foreclosure before or after the date of its enactment in trusts created or mortgage investments made prior thereto * * *.” (Emphasis supplied.) In particular our inquiry goes to that portion of section 17-e to be found in subdivision 2 (a) which in general provides that, regardless of advances made from the principal of a trust for the expense of a foreclosure, or of a conveyance of mortgaged property in lieu of foreclosure, and regardless of the cost of all capital improvements, payments — not subject to recoupment — shall be made to the life tenant from the net income during the salvage operation up to three per cent per annum computed upon the principal amount of the mortgage.

Clearly subdivision 2 of section 17-c is retroactive. By its terms it presumes to affect acts which occurred, and rights which accrued, prior to April 13, 1940 — the effective date of the statute. Among acts thus affected was the execution on December 14, 1928, of the testamentary trust here involved; among rights thus affected are those of the Ufe tenant and the remaindermen in the proceeds from transactions undertaken by the trustee as a means of salvaging mortgages which were a part of that trust — mortgages which, as we have said, were security not for principal alone but for income as well.” (Matter of Chapal, 269 N. Y. 464, 472.)

In the case last cited this court ruled that, upon a sale had in the course of a similar salvage operation (p. 472) — “ * * * the proceeds should be used first to pay the expenses of the sale and the foreclosure costs and next to reimburse the capital account for any advances of capital for carrying charges not theretofore reimbursed out of income from the property. Then the balance is to be apportioned between principal and income in the proportion fixed by the respective amounts thereof represented by the net sale proceeds. In the capital account will be the original mortgage investment. In the income account will be unpaid interest accrued to the date of sale upon the original capital.” (And see Matter of Otis, 276 N. Y. 101, 111; Matter of McManus, 282 N. Y. 420, 425.)

When the properties here involved came into the hands of the trustee, the rule of apportionment last quoted above was not a matter of grace, as the majority opinion herein seems to hold. It was a rule of property the essential principle of which had long been recognized and applied in this jurisdiction and others, including England. (Meldon v. Devlin, 31 App. Div. 146; affd., 167 N. Y. 573 [1901]; Parsons v. Winslow, 16 Mass. 361, 365 [1820]; Veazie v. Forsaith, 76 Me. 172 [1884]; Hagan v. Platt, 48 N. J. Eq. 206, 207, 208 [1891]; Greene v. Greene, 19 R. I. 619, 621-624 [1896]; Quinn v. First Nat. Bank, 168 Tenn. 30 [1934]; Matter of Nirdlinger, 327 Penn. St. 171, 172, 173 [1937]; Cox v. Cox, L. R. 8 Eq. 343, 344, 345 [1869]; Matter of Moore, 54 L. J. Ch. 432 [1885], and see Matter of Marshall, 43 Misc. 238, 245 [1904].) A classical statement of the underlying principle which runs through the cases cited above was made in Cox v. Cox, supra, page 344 as follows: The true principle in all these cases is, that neither the tenant for Ufe nor the remainder-man is to gain an advantage over the other — neither is to suffer more damage in proportion to his estate and interest than the other suffers — from the default of the obligor.” (Emphasis supplied.) This was orthodox doctrine long before the decisions by this court in the Meldon, Chapad and Otis cases, supra.

In accord with that rule of property there had vested in the income beneficiary and the remaindermen respectively, prior to the effective date of section 17-c, subdivision 2, a proprietary interest in each of the properties acquired by the trustee. (Matter of McManus, supra, p. 426.)

Although the basis adopted by the courts for computing the item of interest involved differs in the various jurisdictions which have considered the question, there is a basic principle, as we have seen, which runs throughout the decisions cited above — viz., that, in the income from salvage operations incidental to the administration of a trust estate, both life tenant and remainderman have a proprietary interest and both are entitled to be paid their proportionate shares thereof.

The comment made in Matter of Rogers (22 App. Div. 428; affd., 161 N. Y. 108), by Mr. Justice Cullen — later Chief Judge of this court — applies with equal force in the case at hand where the rights of remaindermen are at stake (p. 436) —“ The equities of a life tenant to receive the whole income that may accrue during his tenancy are every whit as great as that of the remaindermen to have the corpus of the trust preserved unimpaired. * * * Why should each not have exactly his own, so far as it is possible to ascertain it? ” (Emphasis supplied.)

A marked difference should be noted between the provisions of section 17-c, subdivision 2, with which we are here concerned, and subdivision 1 of the same section. Unlike subdivision 2, the Legislature was careful in subdivision 1 to make its mandates in effect prospective — not retroactive. It also employed language by which its mandates would in no event conflict with any contrary intention which might be expressed by the creator of the trust.

The resultant effect of section 17-c, subdivision 2, is to transfer, without the right of recoupment, from the principal account of a trust to the income account, an amount — fixed arbitrarily and without regard to the demands of justice and equity in the circumstances at three per cent per annum computed upon the principal amount of each salvaged mortgage. Such a mandatory transfer to the life tenant of property rights which had become vested in the remaindermen under a rule of property which antedated the exactment of section 17-c, subdivision 2, transcends the Legislature’s power. “ Legislation which impairs the value of a vested estate is unconstitutional.” (Matter of Pell, 171 N. Y. 48, 52, 53; People v. O’Brien, 111 N. Y. 1, 57-59; Westervelt v. Gregg, 12 N. Y. 202, 212.) As I view the statute it authorizes, without due process of law, the taking of property rights which became vested in the remainder-men under an established rule of property prior to the effective date of the statute." To that extent it violates the Fourteenth amendment to the Federal Constitution and article 1, section 6, of the Constitution of the State of New York.

I pass now to a phase of the problem which I think cannot be ignored. The questions of apportionment with which subdivision 2 of the statute attempts to deal are essentially judicial questions. This subject was examined by Story in his Equity Jurisprudence. ([2d ed.] vol. 1, § 489 et seq.) Stressing the “ beneficial operations of courts of equity * * * upon this confessedly intricate subject,” he said: Without some proceedings, in the nature of an account before a Master, there would be no suitable elements upon which any court of justice could dispose of the merits of such cases.” In like vein it was said by Judge Loughran writing for this court in Matter of Otis, supra (p. 116), that “ * * * a general rule for such situations cannot be attained at a bound, that no rule can be final for all cases and that any rule must in the end be shaped by considerations of business policy.” (Emphasis supplied.) Subdivision 2 of the statute attempts to override all this by saying that in every case the life tenant must at all events immediately and finally receive net income at a rate arbitrarily fixed by the statute at three per cent — no matter what may be the cross-equities of the parties and without regard for the business risks of the particular salvage operation. To this extent, subdivision 2 of the statute makes it mandatory that the court shall adjudicate-every pending proceeding or action for an accounting ” without affording the parties any opportunity to be heard. The draftsmen of the statute apparently recognized some difficulty on that score, for the statute says: Only equitable adjustments and balances as between the parties are intended to be effectuated by the provisions of this subdivision ” [2], (Emphasis supplied.) We have, then, this extraordinary situation: While subdivision 2 of the statute has not changed the law that pending questions of apportionment are to be decided upon equitable principles, yet it declares that such principles must be applied by the courts, not according to the judicial judgment of what is equitable in the circumstances of a pending controversy, but according to a legislative mandate rigidly enjoined for all pending cases.

The Legislature has no power so to declare the law for the information and government of the courts in the decision of causes before them.” (Kent, Ch. J., in Dash v. Van Kleeck, 7 Johns. 477, 508, 509.) In this connection it should be observed that subdivision 2 of the statute is not emergency legislation; it invokes neither the general welfare nor any other consideration of public policy. In the only opinion written below, it is said: The Legislature has done no more in formulating a modification of existing rules than the courts themselves could do. * * *.” (175 Misc. 1044, at p. 1050.) Such a proposition is not free from risk. Nobody knows what economic chaos may follow the present war. I am not prepared to say that as to all pending cases the Legislature may do at one stroke whatever courts of justice may do in accord with their tradition to proceed only in a particular controversy and only after taking evidence at a hearing held upon issues defined by pleadings. The Legislature can no more exercise judicial power than our courts can exercise legislative power. (See opinion by Ruffin, C. J. in Hoke v. Henderson, 25 Amer. Dec. p. 686 [N. C.].) The determination of rights of property inter partes is always a judicial question. As I view it, subdivision 2 of section 17-c of the Personal Property Law is a void attempt by the Legislature to make such a determination.

I am led by these considerations to dissent and vote for a modification of the Surrogate’s decree accordingly.

Loughran, J.

(dissenting). I add a few words to the dissenting opinion of Judge Lewis in which I concur entirely.

The crux of the prevailing opinion is this striking sentence: “A statutory rule of administration which requires the trustee to apportion income in accordance with a fixed standard which in the exercise of administrative discretion the trustee would even without the statute have power to adopt does not, in our opinion, constitute a talcing of property.” I cannot assent to so free an appraisal of the retroactive mandate of the Legislature.

No authority is cited to show that it was always open to trustees of their own motion to pay net income to a life tenant at such a “ fixed standard,” in peremptory disregard of the recoupment rights of remaindermen. Indeed the general understanding of the profession appears to have been the other way, seeing that the Surrogates who devised the statute have vouchsafed us one reason alone for its enactment, viz., “ Trustees have hesitated to pay such net income because in the case of overpayment to the life tenant, the trustee might be surcharged with that amount.” (See L. 1940, p. 1182.)

This recognition by trustees of the conflicting rights of remainder-men was not without justification. It is true that hitherto a trustee for a fife tenant and remaindermen was entitled to distribute surplus income in his discretion. (Matter of Otis, 276 N. Y. 101, 115.) But that discretion was always to be exercised by a trustee with reasonable judgment and with an even hand between the life tenant and the remaindermen in the particular circumstances. (See Carrier v. Carrier, 226 N. Y. 114, 125, 126; 28 Halsbury’s Laws of England [1st ed.] 123, 124; 2 Scott on The Law of Trusts, § 187; 4 Pomeroy on Equity Jurisprudence, [5th Ed.] § 1062a.) The retroactive provisions of the statute direct trustees instanter to make final payment of net income to a life tenant not at a fixed rate merely, but at the expense of the remaindermen if need be. Hence I cannot accept the presupposition that the statute confers no new power upon trustees.

There is no occasion now for examination of the real nature of the equitable right of a trust beneficiary. At least the beneficiary owns the obligation of the trustee — a thing which is as truly the subject-matter of property as any physical object. (See Ames, Lectures on Legal History, p. 262. Cf. 1 Scott on The Law of Trusts, § 130.) Consequently I see no warrant for the view that the respective interests of beneficiaries of a discretionary trust are not rights of property in the constitutional sense. (See Pritchard, v. Norton, 106 U. S. 124, 132.)

Lehman, Ch. J., Rjppey, Conway and Desmond, JJ., concur with Finch, J.; Lewis and Loughran, JJ., dissent in separate opinions in which both concur.

Order affirmed, etc.


author: Rippey, J.

text:
    Pauline C. Coster, Appellant, v. O. Delancey Coster, Respondent.

      Argued December 7, 1942;
    decided January 14, 1943.

      Watson Washburn and Royal E. Mygatt for appellant.
    Respondent has failed to meet the burden of proving any controlling Massachusetts rule of law applicable to this case. (Lubowitz v. Taines, 293 Mass. 39; Johnson v. Johnson, 303 Mass. 204.) Respondent is insured against injuries to appellant, who was not his spouse at the time of the accident, and consequently was not subject to the exception from coverage of injuries to spouses provided in subdivision 3 of section 167 of the Insurance Law (Cons. Laws, ch. 28). (Mertz v. Mertz, 271 N. Y. 466; Rozell v. Rosell, 281 N. Y. 106; Michael v. Prussian Nat. Ins. Co., 171 N. Y. 25; Matthews v. American Central Ins. Co., 154 N. Y. 449.) The effect of subsequent marriage depends on the law of New York, the matrimonial domicile and forum. (Mertz v. Mertz, 271 N. Y. 466; Schubert v. Schubert Wagon Co., 249 N. Y. 253; Leach v. Mason Valley Mines Co., 40 Nev. 143; Phillips v. Eyre, L. R. 4 Q. B. 225; L. R. 6 Q. B. 1; Ogden v. Saunders, 25 U. S. 359; MacKenzie
      v. MacKenzie, 306 Mass. 291; Levy v. Levy, 309 Mass. 486; Zwich v. Goldberg, 304 Mass. 66.) The New York court having assumed jurisdiction of a valid cause of action cannot be ousted of jurisdiction by any foreign rule of law. (Mertz v. Mertz, 271 N. Y. 466; Herzog v. Stern, 264 N. Y. 379; Davis v. N. Y. & N. E. R. R., 143 Mass. 301; Orr v. Ahearn, 107 Conn. 174; B. & O. R. R. Co. v. Joy, 173 U. S. 226; Gordon v. C. R. I. & P. Ry. Co., 154 Iowa, 449; Austin v. Pitts. C. C. & St. L. Ry. Co., 122 Ky. 304; Ormsby v. Chase, 290 U. S. 387.)

      Everett W. Bovard and Henry L. Ughetta for respondent.
    The complaint was properly' dismissed. (Lubowitz v. Taines, 293 Mass. 39; Loucks v. Standard Oil Co., 224 N. Y. 99; Buckeye v. Buckeye, 203 Wis. 248; B. & O. R. R. Co. v. Joy, 173 U. S. 226; Ormsby v. Chase, 290 U. S. 387; Pritchard v. Norton, 106 U. S. 124; Gray v. Gray, 174 Atl. 508; Dawson v. Dawson, 224 Ala. 13; Howard v. Howard, 200 N. C. 574; Newton v. Weber, 119 Misc. 240.) The claimed existence of an insurance policy does not establish a cause of action for the plaintiff either under the Massachusetts or New York law. (Lubowitz v. Taines, 293 Mass. 39; Johnson v. Johnson, 303 Mass. 204; Luster v. Luster, 13 N. E. [2d] 438; Rozell v. Rozell, 281 N. Y. 106; General Accident Fire & Life Assur. Corp. v. Morgan, 33 F. Supp. 190; Fuchs v. London & Lancashire Indemnity Co., 258 App. Div. 603; 259 App. Div. 731.)
   Rippey, J.

On September 13, 1938, Pauline C. Dansey, a resident of the State of New York, while riding as a guest in an automobile owned and operated by defendant Coster bn a public highway in Massachusetts, received personal injuries arising out of a collision between Coster’s car and that of one Ezon. She commenced this action against Coster and Ezon on January 16,. 1939, in the Supreme Court of New York County, State of New York, to recover damages for their negligence in causing her injuries. Defendant Coster appeared and answered on February 4, 1939. On July 12, 1939, plaintiff married the defendant Coster in the city of New York and has since such marriage, as before, been a resident of the State of New York.

Pursuant to leave granted by the Special Term, defendant served a supplemental and amended answer on October 9, 1939, in which he pleaded, among other things, as a separate and distinct defense, the marriage between him and plaintiff, that plaintiff’s capacity to maintain the suit depended upon the common and statute law of Massachusetts, that the laws of that Commonwealth barred suits between husband and wife, and that her marriage to him subsequent to the happening of the accident and the commencement of suit extinguished her right to maintain the action against him. Plaintiff contends that, though the questions of the defendant’s liability for negligence and her freedom from contributory negligence depend upon the law of Massachusetts, the State in which the accident happened, her capacity to sue depends upon the law of New York, the State of her residence.

Plaintiff’s action against Ezon was discontinued. Upon the trial of the action against Coster no evidence was introduced on the subject of defendant’s negligence as the sole proximate cause of the accident, upon plaintiff’s freedom from contributory negligence or upon the subject of damages. At the opening of the trial it was stipulated in accordance with defendant’s supplemental answer that, at the time of the accident and at the time of the trial, (1) chapter 209, section 6, of the General Laws of the Commonwealth of Massachusetts provided that a married woman may sue and be sued in the same manner as if- she were sole; but this section shall not authorize suits between husband and wife,” (2) the law of Massachusetts on the issues submitted was laid down in the Supreme Judicial Court of Massachusetts in Lubowitz v. Taines (293 Mass. 39) and Johnson v. Johnson (303 Mass. 204), (3) the defendant was protected by a liability insurance policy, issued under and governed by the laws of the State of New York but containing no express provision as is referred to in subdivision 3-a of section 109 of the Insurance Law (Cons. Law, ch. 28) (now § 167, subdivision 3), which by its terms covered the accident, and (4) that the court might1'1''' make a definitive decision ” at that time rather than at the close of the case. The Special Term and the Appellate Division had previously refused to strike from the supplemental and amended answer the defense to which reference is made above and had stricken out plaintiff’s reply in which she set up defendant’s insurance coverage. In that state of the record, the" trial court held that whatever the proof might be as to the questions of negligence, contributory negligence and damages * * * the defendant’s plea of the marriage of the plaintiff to the defendant Coster, though subsequent to the time of the accident, precludes a recovery by the plaintiff against the defendant Coster in the courts of our State, in view of the law of the State of Massachusetts; and such decision of the Appellate Division likewise would seem to preclude the tenability of the contention by the plaintiff that the existence of insurance would constitute an exception to the law of Massachusetts barring a recovery by a wife against the husband for a tort,” and dismissed the complaint. Under the laws of Massachusetts, the plaintiff was competent to sue Coster to recover damages for personal injuries due to his negligence since she was not his wife at the time of the occurrence of the accident and at the time of bringing suit, but her subsequent marriage to Coster extinguished her right to maintain the action. (Massachusetts General Laws, ch. 209, § 6; Lubowitz v. Taines, supra.) The doctrine of identification still bars the maintenance of such a suit in that State by a married woman against her spouse. In this State, our public policy is to the contrary. (Domestic Relations Law, § 57; Cons. Laws, eh. 14; Insurance Law, § 167, sub. 3; Rozell v. Rozell, 281 N. Y. 106, 110.) Her right to bring and to maintain the suit and to recover damages against her spouse is a substantive right, a part of her cause of action and not a mere matter of remedy. (Sapone v. N. Y. C. & H. R. R. R. Co., 130 Misc. 755; Mertz v. Mertz, 271 N. Y. 466.) As to substantive rights, the lex loci, not the law of the forum, controls and will be enforced in the courts of the forum in a transitory action such as this unless our public policy forbids. (Kiefer v. Grand Trunk Ry. Co., 12 App. Div. 28; affd., 153 N. Y. 688; Loucks v. Standard Oil Co., 224 N. Y. 99, 106; Mertz v. Mertz, supra.) But our public policy to permit the maintenance by one spouse of a suit against the other to recover damages for personal injuries does not require or authorize our courts to ignore foreign law affecting substantive rights where such law merely differs from our own. To render the foreign,law unenforceable here as contrary to our public policy under such circumstances, it must additionally violate some fundamental principle of justice, some prevalent conception of good morals, some deep-rooted tradition of the common weal.” (Loucks v. Standard Oil Co., supra, p. 111; Mertz v. Mertz, supra.) The acceptance of that doctrine is general. (Howard v. Howard, 200 N. C. 574, 579; Buckeye v. Buckeye, 203 Wis. 248; 38 Cyc. 546-549.) We cannot determine what the public policy of the Commonwealth of Massachusetts should be.

In Johnson v. Johnson (supra) the question of what effect, if any, the fact that defendant had liability insurance covering the accident might have on the question of the right of plaintiff to maintain suit was left undetermined. Under our law, the mere fact that defendant was to be indemnified for damages awarded against him for accidental injury to a person establishes no right of action in favor of the latter. (Rozell v. Rozell, 281 N. Y. 106, 113.) By the express terms of the policy in this case, it is only after judgment against the insured has been rendered or his liability for the wrong has been conceded by the carrier that the person injured may have a right to recover against the carrier. If material at all, the fact that our Legislature has recognized a right in an injured spouse to maintain an action against an insurer under specified conditions and requiring certain policy provisions (CL Insurance Law, § 167, subd. 3; Vehicle and Traffic Law, Cons. Laws, ch. 71; former § 94-k, as in effect to January 1, 1942, [repealed L. 1941; ch. 872] see now § 94-q) is pertinent only as some slight indication of our public policy to permit one spouse to recover in this State against her mate for the actionable wrong of the latter.

The judgment appealed from should be affirmed, with costs and without prejudice to any action the plaintiff may be advised to bring in another jurisdiction.

Lottghean, Finch, Lewis, Conway and Desmond, JJ., concur; Lehman, Ch. J., taking no part.

Judgment affirmed, etc.


author: Conway, J.

text:
    Benjamin Crawford et al., Respondents, v. Edward Nilan, Appellant.
    Argued October 30, 1942;
    decided January 14, 1943.

      Elbert N. Oakes and Lawrence H. Cooke for appellant.
    As a matter of law the operation of defendant’s automobile at the time and place of the accident was unlawful and without his permission. (Der Ohannessian v. Elliott, 233 N. Y. 326; Fluegel v. Coudert, 244 N. Y. 393; Atwater v. Lober, 133 Misc. 652; Houlihan v. Selengut, 175 Misc. 854; Chaika v. Vandenberg, 252 N. Y. 101; Potts v. Pardee, 220 N. Y. 431; Andrassy v. Mooney, 262 N. Y. 368; Hull v. Littauer, 162 N. Y. 569; Fallon v. Swackhamer, 226 N. Y. 444; Rose v. Balfe, 223 N. Y. 481.) Testimony of a passenger in defendant’s car was erroneously received. (Queen v. Hepburn, 7 Cranch. 535; Matter of Carroll v. Knickerbocker Ice Co., 218 N. Y. 435; Woodgate v. Fleet, 44 N. Y. 1; Gunter v. Gunter, 174 Fed. 933; Taylor v. Commercial Bank, 174 N. Y. 181; Luby v. H. R. R. R. Co., 17 N. Y. 131; Ives v. Ellis, 169 N. Y. 85; Mcllhargy v. Chambers, 117 N. Y. 532; Twaddell v. Weidler, 109 App. Div. 444; 186 N. Y. 601; Allen-Kingston Motor Car Co. v. Consolidated Nat. Bank, 145 App. Div. 295.)

      Seymour L. Colin, Ellsworth Baker and George A. Grabow for respondents.
    The defendant’s testimony concerning the alleged restrictive instructions to his chauffeur, which was uncorroborated and contradicted by his testimony in an examination before trial was insufficient conclusively to rebut the statutory presumption of consent arising under section 59 of the Vehicle and Traffic Law (Cons. Laws, ch. 71). The defendant’s credibility was exclusively for the jury and they had a right to reject this testimony. (Piwowarski v. Cornwell, 273 N. Y. 226; Jorgensen v. Jaeger, 257 N. Y. 171; Lee v. City Brewing Corp., 279 N. Y. 380; Thomas v. City of New York, 285 N. Y. 496; Christie v. Vineburg, Inc., 259 App. Div. 342; Hartstein v. U. S. Trucking Corp., 260 App. Div. 643.) Assuming that the defendant gave the alleged instructions concerning the servicing of his car, nevertheless a question of fact remained as to whether the chauffeur had permission to use the automobile at the time and place of the accident and the evidence authorized a finding by the jury that he did. (Townsend v. Bell, 167 N. Y. 462; Bernstein v. Kritzer, 253 N. Y. 410; Frank v. Von Bayer, 236 N. Y. 473; Ga Nun v. Palmer, 216 N. Y. 603; Hirsch v. Jones, 191 N. Y. 195; Foltis, Inc., v. City of New York, 287 N. Y. 108; Faber v. City of New York, 213 N. Y. 411; Pierce v. Atlantic G & P Co., 216 N. Y. 209; Dulberg v. Equitable Life Assur. Co.,
      277 N. Y. 17; Matter of Kelly, 285 N. Y. 139.) There was no error committed during the cross-examination of the passenger witness. The rule against hearsay had no application to the question addressed to such witness nor to his answer. (Whitney v. Supreme Commandery, 30 App. Div. 397; Webb v. Yonkers R. R. Co., 51 App. Div. 194; Matter of Woodward, 69 App. Div. 286.) Even had the cross-examination gone so far as to seek to adduce the declarations of Smith as to the destination and purpose of the trip, such testimony would have been admissible. (Cutter v. Maxweld Corp., 281 N.. Y. 467; Cammarata v. Nassau Appliance Co., 282 N. Y. 795; Cox Shoe Mfg. Co. v. Gorsline, 63 App. Div. 517; Hine v. N. Y. El. R. R. Co,, 149 N. Y, 154; Landon v. Preferred Acc. Ins. Co., 43 App. Div. 487; 167 N, Y. 577; Brown v. Nassau Elec. R. R. Co., 213 App. Div. 834; Sackheim v. Pigueron, 215 N. Y. 62; Jennings v. Okin, 88 N. J. L. 659; Smith v. Firestone Tire & Rubber Co., 119 Conn. 483; Mathews v. Gt. Northern R. Co., 81 Minn. 363.)
   Conway, J.

On Sunday evening, June 16,1940 a tragic accident occurred on a State highway at a point some three or four miles from the village of Ellenville, N. Y. The automobile in which three of the four plaintiffs and the intestate of the fourth were riding, while traveling on a down grade, came into collision with an automobile owned by the defendant' and operated by one Woodrow Smith. Three of the plaintiffs were injured and the intestate of the fourth, the wife of the operator of the car, was killed. Smith was also killed by the collision.

The highway where the collision occurred was the most practicable route between Ellenville and Cragsmoor, N. Y., seven or eight miles east of Ellenville. At Cragsmoor a- religious hall known as Vista Maria was maintained. The defendant is pastor of a church at Ellenville. Smith was a young, man about twenty years of age who was employed part-time by the church as janitor and handyman. On the Sunday in question the defendant and his assistant planned to attend services at Poughkeepsie- and it was necessary,, therefore, to obtain the services of. at least one substitute priest during their absence. For that purpose Smith was dispatched at-about eleven o’clock in the forenoon to Villa Maria to' obtain the attendance of the Rev. Paul Donovan, a man seventy-six years of age who had been retired from active duty. He arrived before the departure of the defendant for Poughkeepsie. The latter testified that Smith was permitted to use defendant’s ear when given specific instructions as to its use; that the only instructions he gave to Smith were to bring Father Donovan to the rectory that morning and to have the defendant’s automobile, aBuiek, filled with gasoline, greased and washed so that it would be ready for use on the following day.

During the afternoon, Smith asked the housekeeper of defendant about the return of Father Donovan to Cragsmoor and was told that the defendant had directed her to drive him back. Smith then asked her if he might get back here at five-thirty and wash the car and have the car greased and so on * * She told him that that would be satisfactory.

At about a quarter before six the housekeeper drove Father Donovan to Cragsmoor returning between six-fifteen and six-thirty. When she left, the Buick was standing between the rectory and the garage. When she returned it was no longer there. On the road which she traversed on her return journey, she did not meet Smith. Between fifteen and thirty minutes after her return she heard of the accident which had occurred on that same stretch of road. Father Donovan had been to Bllenville in the evening only once in the eighteen months preceding June 16, 1940 and on the evening of that day, after his return to Cragsmoor, had received no message requesting his return to Bllenville,

The issue the parties were litigating, therefore, was whether young Smith had departed from his instructions and was taking an automobile ride on his own without defendant’s permission. The issue was a narrow one and closely contested. Plaintiffs had offered no proof up to that point in the trial on the question of permission but were relying on the presumption arising from the ownership of the automobile by defendant. (Vehicle and Traffic Law, § 59; Cons. Laws, ch, 71; St. Andrassy v. Mooney, 262 N. Y. 368.)

Smith, at the time of the accident, had been accompanied by three boys and the defendant desired to make proof of that fact. Counsel for the defendant requested plaintiffs’ counsel to so concede but the request was denied. Thereupon defendant’s counsel called, for one of the boys, Walter Ignatik, to take the stand. There was no answer in the courtroom.

No doubt proof that Smith had been accompanied by three boys was considered by defendant to be helpful to him. It cannot be doubted that the witness was an important one as is evidenced by the following which occurred immediately after the witness’ failure to respond when called to the witness stand: “ Mr. Oakes: May it please the Court, I would like to ask counsel if Walter Ignatik is under their subpoena or under the subpoena of either of them, that he be produced. The Court: Has he been subpoenaed? Mr. Baker plaintiffs’ counsel]: I decline to give counsel that information;] I think that is entirely within our province. They know his residence is Ellenville. The Court: You called him, Mr. Oakes? Mr. Oakes: Yes, I sent to his house, and his mother said he was here under subpoena. The Court: If we can give Mr. Oakes any information where he can get this witness, if he wants to call him — Mr. Baker: I think I can locate him for Mr. Oakes this afternoon so he can have him here tomorrow morning. The Court: Do you want him here tomorrow morning? Mr. Oakes: Yes, I want him here now, if I can get him, but if I cannot, tomorrow morning will.'have to do. The Court: Counsel for the plaintiff says that he will produce him here in the morning. If you can’t produce him, Mr. Baker — if there is any doubt about it, we will have to subpoena him and get him here. Mr. Baker: Mr. Oakes, if you desire to examine him this afternoon, I think I can have him here in five minutes. Mr. Oakes: All right, that will be fine. The Court: Do you want the help of the sheriff’s office? Mr. Baker: No, he is here in Monticello under subpcena.”

Another witness was then called whose testimony covers twelve pages of the record and then the witness Ignatik was produced and gave testimony. He was called by the defendant and said that he and two other boys were in the Buick automobile with Smith at the time of the collision; that he had entered the car with the other two boys at the home of the grandmother of one of them. That was the extent of his examination by defendant. On cross-examination by plaintiffs, Ignatik’ was asked “ Where were you going? ” and he answered “ We were going to get the priest up at Cragsmoor.” The defendant’s counsel then moved to strike out that answer upon the ground that “ The witness’ statement is a conclusion and hearsay.” That motion was denied and an exception taken.

Pausing there for a moment and assuming, in view of the objection that it was hearsay, that that was what Woodrow Smith had told Ignatik, we think that the motion was properly denied. (Cutter v. Maxweld Corp., 281 N. Y. 467; Landon v. Preferred Accident Ins. Co., 43 App. Div. 487, affd., 167 N. Y. 577; Jennings v. Okin, 88 N. J. L. 659; Smith v. Firestone Tire & Rubber Co., 119 Conn. 483, 490.)

On redirect examination defendant’s counsel questioned Ignatik concerning a statement he had signed on the day following the accident. The witness admitted that he had read and signed a statement and that it had been a true statement when he signed it. In that statement the witness had said: “ When he [Smith] picked us up he said he was going to Cragsmoor, but I didn’t hear him give any reason for going.” He was then questioned by plaintiffs’ counsel and said that the answers contained in the statement were given orally, were written down by someone and that he had said to the one who wrote out the statement that he had been going to Cragsmoor to get the priest.

The presentation by the defendant of the subscribed statement to the witness was proper both at common law and by statute (Civ. Pr. Act, § 343a), since it was inconsistent with his testimony. Up to that point no error had been committed.

The plaintiffs, however, had obtained from the witness on the very morning of the day upon which he testified, a further statement which read in part as follows: “ At that time Woody Smith, a friend of ours, and whom I knew was in the employ of St. Mary’s Catholic Church of Ellenville, was driving a Buick automobile belonging to Father Nilan asked us whether we would care to accompany him in the Buick automobile to Cragsmoor where he was to pick up a priest and bring him back to Ellenville for the evening services.”

Plaintiffs offered that in evidence and it was read over defendant’s objection and exception. The reception of that statement was clearly error and in a case so close upon the facts we cannot say that' it may not have been the determining factor with the jury in arriving at its substantial verdict.

The trial court set the verdict aside and said in a memorandum opinion that the erroneous admission of the statement offered by plaintiffs was one of the reasons which impelled him so to do. The Appellate Division reversed his order and reinstated the verdict by a sharply divided court.

The error was that the statement obtained by plaintiffs was not at variance with the testimony of the witness but was merely inconsistent with a prior unsworn statement of the witness. It was not introduced in evidence on any claim that it was inconsistent with that testimony. It was offered and received because it was inconsistent with the written statement of the witness to which the defendant had properly called his attention. At the time the plaintiffs offered it, that was the only claim made by counsel as the following excerpt from the record indicates: “ The Court: Now you are offering this. [Counsel for plaintiffs]: Yes, your Honor, in connection with the statement offered by counsel for the defendant. [Counsel for defendant]: I didn’t offer any statement. [It had been read — not offered in evidence]. [Counsel for plaintiffs]: Well, you examined from it and got in part of it without offering the statement in evidence. It is in answer to that.”

The testimony of an impeached or discredited witness may not be supported and bolstered by proving that he has made similar declarations out of court. While such a declaration was admissible under the earlier English cases Lutterell v. Reynell, 1 Mod. [1670] 282, that holding was later repudiated in Rex v. Parker, 3 Doug. [1783] 242 where Buller, J. said: “ it was now settled that what a witness said not upon oath would not be admitted to confirm what he said upon oath; and that the case of Lutterell v. Reynell, and the passage cited from Hawkins were not now law.” Such a statement has not been admissible in this State, although there are earlier contrary decisions, (see 4 Wigmore on Evidence [3d ed.] § 1125 n. 1), since Robb v. Hackley (23 Wend. 50, in 1840) and the great weight of authority in this country supports our rule of exclusion. (People v. Katz, 209 N. Y. 311, 335, 341 and cases therein cited; Ellicott v. Pearl, 35 U. S. 412, 438; Conrad v. Griffey, 52 U. S. 480; Burks v. State, 78 Ark. 271; Knight v. State, 114 Ga. 48; Chicago City Rwy. Co. v. Mathieson, 212 Ill. 292; State v. McDaniel, 68 S. C. 304; Legere v. State, 111 Tenn. 368; Reed v. Spaulding, 42 N. H. 114.) There is a recognized exception to the rule where the testimony of a witness is assailed as a recent fabrication. Then his testimony may be confirmed by proof of declarations of the same tenor before the motive to falsify existed.” (Ferris v. Sterling, 214 N. Y. 249;, 254 People v. Katz, supra; People v. Edwards, 282 N. Y. 413.) The exception is not here material. The offered statement was obtained on the very morning of the day of trial. As was said in Ellicott v. Pearl (Story, J.) (supra, p. 440), such subsequent declarations “ would enable the witness at any time to control the effect of the former declarations, which he was conscious, that he had made, and which he might now have a motive to qualify, or weaken, or destroy.” The rule was there stated succinctly as follows: “ Where parol proof has been offered against the testimony of a witness under oath, in order to impeach his veracity, establishing that he has given a different account at another time, we are of opinion that, in general, evidence is not admissible, in order to confirm his testimony, to prove that at other times he has given the same account as he has under oath; for it is but his mere declaration of the fact; and that is not evidence. His testimony under oath is better evidence than his confirmatory declarations not under oath; and the repetition of his assertion does not carry his credibility further, if so far, as his oath.” (Ellicott v. Pearl, supra, p. 439.)

We have developed the background against which the error must be viewed because the instant case well illustrates the soundness of the decisions requiring the exclusion of the offered declarations. If such were not the rule, litigations might well, on occasion, develop into contests between litigants as to which one could obtain the latest version of a witness. Success would come to him who obtained it even though he had to keep the witness incommunicado, until rushed upon the witness-stand, for fear he might give a different and still later version, which he could make accord with the testimony he had then decided to give. “ We have not in this state departed from that ancient and safe landmark in the law of evidence, which requires a witness in all cases to speak under the solemn sanction of an oath, and I am unwilling to peril the lives, the fame, or the property of individuals, by adopting the contrary doctrine.” Robb v. Hackley (Bronson, J.), supra, 57.

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

Lehman, Ch. J., Loughran, Finch, Rippey, Lewis and Desmond, JJ., concur.

Judgment reversed, etc.