author: Per Curiam-.

text:
    John A. McCarthy & Co., Inc., Respondent, v. Philip S. Hill et al., as Executors of William F. Cunningham, Deceased, Appellants.
    Argued January 21, 1946;
    decided April 18, 1946.

      Stewart Maurice■ and Charles R. McNamee for appellants.
    I. The twentieth cause of action is insufficient on its face. (Gerdes v. Reynolds, 281 N. Y. 180; Burke v. Rector, etc., 64 Misc. 380; Karst v. Prang Educational Co., 132 App. Div. 197; Pelkey v. Pelkey, 236 App. Div. 55; Robinson v. Whittaker, Nos. 1-4, 205 App. Div. 286.) II. Plaintiff has an adequate remedy at law.' (Potter v. Walker, 276 N. Y. 15; Dunlop’s Sons, Inc., v. Spurr, 285 N. Y. 333; Kalmanash v. Smith, 291 N. Y. 142; Hastings v. Byllesby & Co. [Haystone], 293 N. Y. 404; Equity Corp. v. Groves, 294 N. Y. 8; Luke v. Polstein, 294 N. Y. 896; Cwerdinski v. Bent, 256 App. Div. 612, 281 N. Y. 782.) III. Defendants have been wrongfully deprived of their constitutional right to trial by jury. (City of Syracuse v. Hogan, 234 N. Y. 457; United States Fidelity & Guaranty Co. v. Goetz, 285 N. Y. 74; Baylis v. Bullock Electric Mfg. Co., 59 App. Div. 576; City of New York v. Wilson & Co., Inc., 249 App. Div. 391; Goell v. United States Life Ins. Co., 265 App. Div. 735; Schenck v. Prudential Ins. Co., 167 Misc. 282; Buzard v. Houston, 119 U. S. 347.) IV. The trial justice committed reversible error in permitting plaintiff’s sole stockholder to testify to personal transactions with defendants’ testator. (Andrews v. Reiners, 112 App. Div. 378; Griggs v. Renault Selling Branch, Inc., 179 App. Div. 845; Merchants Nat. Bank v. Prescott & Son, Inc., 139 Misc. 603; Clift v. Moses, 112 N. Y. 426; Boyd v. Boyd, 164 N. Y. 234; Matter of Kelly, 238 N. Y. 71.) V. There is no evidence to support the decision and judgment of Special Term. (Matter of Case, 214 N. Y. 199; Russ v. Russ, 263 N. Y. 625; Bank of United States v. Manheim, 264 N. Y. 45; Grant v. Riley, 15 App. Div. 190; Barden v. New York Central Railroad Co., 181 App. Div. 306; Benson v. Associated Art Press, Inc., 236 App. Div. 645; Corbus v. Gold Mining Co., 187 U. S. 455; Hamlin v. Stevens, 177 N. Y. 39; Rosseau v. Rouss, 180 N. Y. 116; Tousey v. Hastings, 194 N. Y. 79; Burns v. McCormick, 233 N. Y. 230.)

      Samuel Seahury and George Trosk for respondent.
    I. The judgment is fully supported by the evidence which shows that while defendant, a fiduciary, was receiving a regular salary .and bonuses from plaintiff, he took to himself almost $200,000 of plaintiff’s money by checks he drew on its bank account to his own order without plaintiff’s knowledge. The. proof shows affirmatively that the withdrawals were unauthorized, and opp el-1 lants made no effort to dispute it. (Sage v. Culver, 147 N. Y. 241; Marvin v. Brooks., 94 N. Y. 71; Frethey v. Durant, 24 App. Div. 58; Jersawit v. Kaltenbach, 256 App. Div. 580, 281 N. Y. 773; Rose v. Durant, 44 App. Div. 381; Davids v. Davids, 135 App. Div. 206; Baker v. Lever, 67 N. Y. 304; Albany City Savings Institution v. Burdick, 87 N. Y. 40; Insurance Co. of North America v. Whitlock No. 2, 216 App. Div. 78; A. S. R. Co. v. Fancher, 145 N. Y. 552; Holmes v. Gilman, 138 N. Y. 369.) II. The complaint alleges (1) not only that defendant was an officer of. plaintiff corporation, but that he was also its attorney-in-fact, entrusted with the power to deal with its funds and property; (2) that he did deal with its funds and property for his own profit and benefit, without the knowledge, consent or approval of the corporation, and (3) that he has never accounted for the corporate property so dealt with by him, or for any other of his acts and transactions as such attorney-in-fact and fiduciary of the corporation. Such a complaint states a cause of action in equity for an accounting. (German-American Coffee Co. v. Diehl, 86 Misc. 547, 168 App. Div. 913; Broderick v. Marcus, 146 Misc. 240, 239 App. Div. 816; Jersawit v. Kaltenbach, 256 App. Div. 580, 281 N. Y. 773; Rose v. Durant, 44 App. Div. 381; Frethey v. Durant, 24 App. Div. 58; Insurance Co. of North America v. Whitlock No. 2, 216 App. Div. 78; Potomac Insurance Co. v. Kelly, 173 App. Div. 791; Fur & Wool Trading Co., Ltd., v. Fox, Inc., 245 N. Y. 215; Frier v. J. W. Sales Corp., 261 App. Div. 388; Talmudic Literature Publishers, Inc., v. Lewin, 226 App. Div. 1; Rhodes v. Little Falls Dairy Co., 230 App. Div. 571, 256 N. Y. 559.) III. The testimony given by plaintiff’s stockholder did not relate to a personal transaction with decedent; it related to an event which did not occur until after defendant’s death. Moreover, the evidence was merely cumulative of testimony. given by another witness admittedly not disqualified. Furthermore, as a matter of law, the testimony could not have affected the result. (Denise v. Denise, 110 N. Y. 562; Wadsworth v. Heermans, 85 N. Y. 639; Hard v. Ashley, et al., 117 N. Y. 606; Rogers v. Rogers, 153 N. Y. 343; Lerche v. Brasher, 104 N. Y. 157.)
   Per Curiam-.

Testimony of the plaintiff’s sole stockholder, to the effect that he was ignorant of Cunningham’s withdrawals of cash from the plaintiff corporation until after the latter’s death, should have beeu excluded under Civil Practice Act, section 347 (Boyd v. Boyd, 164 N. Y. 234, 244; Clift v.Moses, 112 N. Y. 426). Although the action in form was for an accounting, there was neither allegation nor proof that Cunningham received anything for which he was accountable to the plaintiff except cash withdrawn without authority. Under these circumstances no action for an accounting could be brought (Dunlap’s Sons, Inc., v. Spurr, 285 N. Y. 333), and the defendants were entitled to trial by a jury, which was demanded and refused.

The order of the Appellate Division, reversing the order of Special Term granting defendants’ motion to dismiss the twentieth cause of action in the amended complaint, should, be reversed, and the order granting such motion affirmed.

The judgment entered May 23,1945, upon the order of affirmance of the Appellate Division dated May 18, 1945, should be reversed, with costs in all courts.

Loughran, Ch. J., Lewis, Conwat, Desmond, Thacher and Dte, JJ., concur; Medalie, J., deceased.

Ordered accordingly.


source: Caselaw Access Project

author: Desmond, J.

license: Public Domain

text:
    Morris Plan Industrial Bank of New York, Respondent, v. George F. Gunning, Defendant. Pennsylvania Railroad Company, Third Party, Appellant.
    Argued April 9, 1946;
    decided May 29, 1946.

      Eugene Underwood and Herbert M. Lord for appellant.
    I. The situs of appellant’s debt to-defendant is in Pennsylvania and it cannot be attached in New York. (Douglass v. Phenix Ins. Co., 138 N. Y. 209; Plimpton v. Bigelow, 93 N. Y. 592; Germania Fire Ins. Co. v. Francis, 11 Wall 210; Baltimore & Ohio R. Co. v. Harris, 12 Wall 65; First Bank Corp. v. Minnesota, 301 U. S. 234; Drake v. De Silva, 124 App. Div. 95; Helme v. Buckelew, 229 N. Y. 363; McMaster v. Gould, 240 N. Y. 379; Continental Purchasing Co., Inc., v. Williams, 132 N. J. L. 445; Brock v. Brock, 173 Misc. 172; Christmas v. Buckley, 43 F. Supp. 673; Huron Corp. v. Lincoln Co., 312 U S. 183; Miller v. Swann, 176 Misc. 607; Furst v. Brewster, 282 U. S. 493; Hovey v. De Long Hook & Eye Co., 211 N. Y. 420; Feinman v. Marks, 294 N. Y. 367; National Broadway Bank v. Sampson, 179 N. Y. 213.) II. Section 684 of the Civil Practice Act affords the only remedy for attachment of wages and the attempted attachments under section 916 are ineffectual. (Firmstone v. Mack, 49 Pa. 387; Hayward v. Hayward, 178 App. Div. 92; Rolt-Wheeler v. Rolt-Wheeler, 175 App. Div. 852; Judis v. Martin, 218 App. Div. 402; Heiskell v. Heiskell, 99 N. Y. L. J., January 13,1938, p. 190: D., L. & W. Coal Co. v. Kenlon, 164 Misc. 32.)

      Butger Bleecker Miller, amicus, curiae, in support of appellant’s position.
    I. The Legislature has provided that a debt due to a nonresident defendant by a foreign corporation may be attached by a creditor of defendant in this State, provided the nonresident defendant might sue the foreign corporation in this State, upon any indebtedness due or to become due. (Civ. Prac. Act, § 916.) II. The laws of Pennsylvania expressly by statute, as well as by the judgments of its courts, exempt wages or salary from attachment in the hands of an employer. The operation of section 916 of the Civil Practice Act is interpreted by prior judgments in the case at bar, to sustain a statute of the State of New York which is unconstitutional as it violates section 10 of article I of the Federal Constitution. It also violates section 1 of article IV of the Federal Constitution. (Fulweiler v. Hughes, 17 Pa. 440; Hollander v. Kressman, 143 Pa. Superior Ct. 32.) III. Section 916 of the Civil Practice Act clothes a county officer with powers that the New York laws and Constitution, limiting his powers, deny him. (Salm v. Krieg, 49 N. Y. S. 2d 694.)

      Jolm J. Dwyer and Harold H. Kissam for respondent.
    I. The Legislature has provided that a debt due to a nonresident defendant by a foreign corporation may be attached by a creditor of the defendant in this State, provided the nonresident defendant might sue the foreign corporation in this State. (Douglass v. Phenix Ins. Co., 138 N. Y. 209; Brock v. Brock, 18 N. Y. S. 2d 648; Tishman Realty & Construction Co. v. Spencer, 24 N. Y. S. 2d 297; Christmas v. Buckley, 43 F. Supp. 673; Harris v. Balk, 198 U. S. 215; Plimpton v. Bigelow, 93 N. Y. 592; Huron Corp. v. Lincoln Co., 312 U. S. 183; Feinman v. Marks, 269 App. Div. 664.) II. Salary or income of a nonresident debtor, upon whom service of process in this State can not be effected, may be attached pursuant to section 916 of the Civil Practice Act, and the provisions of section 684 of the Civil Service Act have no application. (Hayward v. Hayward, 178 App. Div. 92; Rolt-Wheeler v. Rolt-Wheeler, 175 App. Div. 852; Judis v. Martin, 218 App. Div. 402.)
   Desmond, J.

Plaintiff Morris Plan Industrial Bank, a New I York corporation which holds an unsatisfied Pennsylvania judgment against nonappealing defendant Gunning, who lives and works in Pennsylvania, has been allowed, in this suit on that Pennsylvania judgment, to take out a warrant of attachment in New York against Gunning’s wages earned in Pennsylvania from the “ third party ” appellant, Pennsylvania Railroad Company. The purpose and effect of that attachment is to subject to plaintiff’s claim the whole of Gunning’s wages so earned in Pennsylvania, although Pennsylvania law since 1845 has forbidden any garnishment or attachment of wages (Firmstone v. Mack, 49 Pa. 387) and the New York statutes, although not in terms forbidding attachment of wages, permit garnishment up to 10% of the wages only. If the decision here appealed from be right, then the total wages of a nonresident, earned outside this State, are subject toi levy in the New York courts, despite garnishee laws, so long as the debtor’s employer can be served with papers here.

The principal debtor Gunning has not appeared and the attack on the attachment is made by his employer, appellant Pennsylvania Railroad Company. Appellant is authorized to do, and is doing, business in this State. Although counsel for plaintiff-respondent states that the judgment obtained by his client against Gunning in Pennsylvania was on a debt contracted in New York, there is nothing in the papers to show that. So far as we are concerned this suit of plaintiff-respondent Morris Plan Bank against Gunning is on a Pennsylvania obligation.

Plaintiff, commencing this suit against Gunning in the New York City Municipal Court, applied to the Municipal Court, under section 916 of the Civil Practice Act, for a warrant of attachment for the purpose of obtaining jurisdiction over Gunning. The affidavit of plaintiff’s vice-president, on which the attachment was issued, shows that the property of Gunning, which plaintiff was attempting to attach in this State, consisted of the wages which Gunning was earning in Pennsylvania from appellant. The Municipal Court Marshál executed the warrant of- attachment in New York City by serving the papers on a representative of appellant. Appellant thereupon moved under section 948 of the Civil Practice Act, to vacate the attachment, urging that there was no debt due from it to Gunning in New York State and thus no attachable property here. Appellant made the further point also that, if any such debt was owing from the railroad company to Gunning in New York State, it was a debt for wages which, appellant railroad company contends, is exempt from such an attachment. The Municipal Court denied appellant’s motion to vacate. The Appellate Term and the Appellate Division affirmed, the latter granting leave to appeal to this court and certifying a question to us.

This case does not, of course, directly involve a garnishee execution since a garnishee execution may he issued only after judgment. However, the ultimate purpose of procuring this attachment is to collect the judgment, when and if entered, out of Gunning’s xvages. Since the Marshal’s return of the attachment shows that he has purported to attach all moneys due Gunning from appellant, the execution that will he issued if this attachment be upheld and judgment entered in the cause, will authorize a levy on all of Gunning’s wages, not merely on the per cent thereof as to which a garnishee execution could be issued if judgment were obtainéd in New York against Gunning on personal service.

Appellant railroad company argues that the situs of its debt to Gunning is in Pennsylvania, not New York, and that, accordingly, such debt does not constitute property of Gunning attachable in New York, citing Plimpton v. Bigelow (93 N. Y. 592) and Douglass v. Phenix Ins. Co. (138 N. Y. 209). Both -those cases, construing the New York attachment statutes then in effect, held that a debt due from a foreign corporation to a New York resident could not be attached in this State since the situs of that' debt was not in New York but in the State where the foreign corporation had its domicile. Subsequent statutory changes in this State have, however, changed that rule. In 1936, by chapter 818 of the laws of that year, section 916 of the Civil Practice Act was amended by adding this: “ Within the meaning of this section there shall be included any indebtedness due or to become due from a non-resident or foreign corporation, upon whom or which service of process may be made within this state, to any person whether a non-resident or foreign corporation.” That 1936 amendment was clearly intended to abrogate the rule of Douglass v. Phenix Ins. Co. (supra), and to make subject to levy in this State debts due to nonresidents from foreign corporations upon which service could be effected within this State. In 1940, section 916" was rewritten and subdivision 3 thereof was put into its present form. Subdivision 3 of section 916 as so rewritten in 1940 subjects to attachment any contract debt “to a resident or non-resident person or corporation, from a resident or non-resident person or corporation, upon whom or which service of process may be had within the' county ”, etc. We hold that these 1936 and 1940 amendments to section 916 were intended to authorize attachment in this State of a debt to a nonresident from a foreign corporation provided the foreign corporation can be personally served in New York. Harris v. Balk (198 U. S. 215) holds valid such levies and attachments when authorized by State law (see Restatement of Conflict of Laws, § 108). In Feinman v. Marks (294 N. Y. 367), we decided, among other things, that the New York Legislature may validly subject such debts to process within this State. Feinman v. Marks was a garnishee, not an attachment case, and it actually construed not the attachment statute that is here involved, but a 1939 amendment to the garnishment statute (Civ. Prac. Act, § 684), which 1939 amendment, we held, had the effect of allowing the garnishment in New York of wages earned outside the State from a foreign corporation found in this State. It follows logically from Feinman v. Marks that this Pennsylvania wage debt, owing by the Pennsylvania Railroad Company to Gunning, has a situs in New York and is not beyond the reach of New York process.

We pass to appellant’s next contention. Pointing out that our garnishee statute (Civ. Prac. Act, § 684), permits garnishee execution against 10% only of a judgment debtor’s wages, appellant argues that section 684 describes the only machinery whereby wages may ever be reached by execution in this State. Assuming, as it does, that our garnishee statute describes the only method whereby wages may be collected under a judgment in New York, appellant reasons that section 916 of the Civil Practice Act, above referred to, making foreign debts attachable in New York, cannot, therefore, apply to Avages. There are some cases in New York which angle toward that result (see Rolt-Wheeler v. Rolt-Wheeler, 175 App. Div. 852; Hayward v. Hayward, 178 App. Div. 92; Judis v. Martin, 218 App. Div. 402).

Much closer to our case is Heiskell v. Heiskell (Rosenman, J. not officially reported but see N. Y. L. J., J an. 13, 1938, p. 190, col. 4) where the Special Term modified an attachment order, holding that an attachment before judgment could, because of the garnishee law, reach 10% only of the Avages due the principal debtor. The theory of Heiskell v. Heiskell is that, while section 916 of the Civil Practice Act on its face permits attachment of the whole of any debt, including wages, nonetheless another attachment statute (Civ. Prac. Act, § 912, which limits the sheriff to levying upon property “ not exempt from levy and sale ”) has the effect of exempting from attachment the 90% of wages which are exempt from garnishment and allowing the attachment to operate only on the 10% which is subject to garnishment. In other words, to carry out the total statutory policy, the attachment and garnishment statutes must be read together. There is a sound basis for this approach, since the garnishee laws are analogous to the attachment statutes (Plimpton v. Bigelow, supra; Douglass v. Phenix Ins. Co., supra, and see opinion of Sears, J., in Morris Plan Co. v. Miller, 102 Misc. 470, 471). We, therefore, agree with the reasoning of the Heiskell case (supra). That leads to a reversal. The warrant of attachment in the present case must be amended to provide that under it the sheriff may attach no more than 10% of the wages due and owing to Gunning from appellant Pennsylvania Railroad Company.

Further evidence that it is our State policy to protect all but 10% of wages from any seizure for debt is found in section 46 of the Personal Property Law, governing wage assignments.

Appellant asks not for an amendment of, but for a vacatur of, the whole attachment. We cannot vacate it on the theory that there is no situs of any debt in New York. Nor can we vacate this attachment in toto on the ground that since the wages earned by Gunning in Pennsylvania were not subject to any levy in Pennsylvania, therefore the same protection must be accorded in New York. The New York garnishment statutes are applicable to wages earned outside the State (Feinman v. Marks, supra; Morris Plan Co. v. Miller, supra). Some cases in other States hold that, under rules of comity, the courts of one State will not permit garnishment of wages earned in another State where the laws of that other State prohibit garnishment (see Drake v. L. S. & M. S. Ry. Co., 69 Mich. 168). However, no New York authority to that effect is found and such a holding would be inconsistent with Feinman v. Marks (supra). We must reach a decision here not on any rules of comity, but by construing our own statutes. The general rule is that questions of garnishment and attachment are decided by the law of the forum since they deal with remedies (3 Beale on Conflict of Laws, pp. 1604,1605; Restatement of Conflict of Laws, § 590, also § 600; see Chicago, Rock Island &c. Railway v. Sturm, 174 U. S. 710, 717, 718). Therefore, the Pennsylvania law forbidding garnishment of wages has no effect in New York, although the wages attached were earned in Pennsylvania.

On the argument appellant’s counsel asserted that this attachment is invalid as constituting an undue burden on the interstate .commerce in which appellant is engaged. Such inconvenience las here results to appellant does not constitute an unconstitu.tional burden on commerce (Davis v. C. C. C. & St. L. Ry., 217 U. S. 157).

j The orders should be reversed and the case remitted to the 'Municipal Court, with instructions to enter an order amending the warrant of attachment so that it will direct the Marshal to attach no more than 10% of the wages in question, with costs to the appellant in all courts except the Municipal Court. The question certified should be answered as follows: “ Yes, to the extent of 10% thereof.”

Lottghkan, Ch. J., Lewis, Conway, Thaoheb and Dye, JJ., concur.

Orders reversed, etc.


author: ThagSbb, J.

text:
    Thomas Monacelli, Respondent, v. State of New York, Appellant.
    (Claim No. 26035.)
    Argued April 9, 1946;
    decided May 29, 1946.

      Nathaniel L. Goldstein, Attorney-General (Orrin G. Judd, Irving Galt and Harold 8. Coyne of counsel), for appellant.
    I. Cláim ant’s removal of natural barriers, compelling surface waters to spread with his quarrying operations beyond the site subject to the State’s easement of seepage from its canal, was either the sole proximate cause of injury or contributory negligence as matter of law. This involved, moreover, a wrongful burden upon or interference with the State’s easement. Hence it was error to permit recovery. (Horner v. Watson, 79 Penn. St. 242; Lambert v. Alcorn, 144 Ill. 313; Grant v. Kuglar, 81 Ga. 637; Templeton v; Voshloe, 72 Ind. 134; Gordon v. Ellenville & Kingston R. R. Co., 195 N. Y. 137; Rylands v. Fletcher, L. B. 3 H. L. 330; Losee v. Buchanan, 51 N. Y. 476.) II. Claimant had the right to quarry stone from the Otto parcel, but not to the extent of causing waters to spread outside of the appropriated area, thus interfering with the enjoyment and location of the State’s easement. (Paine v. Chandler, 134 N. Y. 385; Herman v. Roberts, 119 N. Y. 37; Keefe v. Annpaul Realty Co., Inc., 215 App. Div. 301, 243 N. Y. 647; Evangelical Lutheran St. J. O. H. v. Buffalo Hydraulic Assn., 64 N. Y. 561: Horner v. Watson, 79 Penn. St. 242.)

      Gharles G. Signor for respondent.
    I. While the State had the right to discharge leakage and seepage into the Otto Squire quarry over which it had acquired such right, it was responsible' to the claimant as owner of the adjoining quarry for such leakage and seepage flowing into it. This would be so irrespective of the State’s negligence. However, there is no dispute but that the leakage and seepage through the banks of the canal was due to the State’s negligence. (Nightingale v. State of New York, 265 App. Div. 690; Mairs v. Manhattan R. E. Ass’n., 89 N. Y. 498; McKee v. D. & H. C. Co., 125 N. Y. 353; Noonan v. City of Albany, 79 N. Y. 470; Huffmire v. City of Brooklyn, 162 N. Y. 584; St. Peter v. Denison, 58 N. Y. 416; Hay v. Cohoes Co., 2 N. Y. 159; Tremain v. Cohoes Co., 2 N. Y. 163.) II'. The legitimate and proper use of the adjoining quarry by its owner or her representative cannot be availed of by the State as a defense to claimant’s cause of action for damages caused by leakage and seepage of water from the Barge Canal due to the negligent construction and maintenance of the canal. III. The State having acquired no flood or other rights over claimant’s quarry cannot set up as a defense the proper use by the claimant of his quarry. (LeRoy Fibre Co. v. Chicago M. & St. P. Ry. Co., 232 U. S. 340; Kalbfleisch v. Long Island R. R. Co., 102 N. Y. 520.) TV". The State is responsible for the leakage and seepage coming' from the Barge Canal through the claimant’s quarry, and it neglected to obtain any right to “ a natural barrier ” or to provide for any such barrier although it could easily have done so. V. Knowledge on the part of the claimant before he purchased the O’Reilly-Sturaker property that the State had the right to permit leakage and seepage from the Barge Canal to flow upon the adjoining Otto Squire quarry and that the canal leaked in this locality does not affect or limit his rights to recovery herein. (Campbell v. Seaman, 63 N: Y. 568; Bly v. Edison Elec. Ill. Co,. 172 N. Y. 1; Booth v. R. W. & O. T. R. R. Co., 140 N. Y. 267.)
   ThagSbb, J.

This action was instituted in the Court of Claims to recover from the State, pursuant to section 120 of the Canal Law (L. 1939, ch. 542), damages to claimant’s stone quarry situated in. the town of Murray, county of Orleans, caused by leakage from the Barge Canal from April 15,1940, to November 15,1940, by reason of negligence in the construction and maintenance of the banks and bottom thereof. The Appellate Division has affirmed a judgment of the Court of Claims awarding to the claimant $6,110.94 for damages representing the cost of pumping operations necessary to eliminate the water from claimant’s quarry and also representing decreased production and increased cost of operation caused by the presence of the water.

Claimant’s quarry, known as the Hill quarry, was adjoined on the west by a quarry known as the Otto Squires quarry. The leakage from the canal which was complained of was onto the Otto Squires quarry which was owned by claimant’s wife, subject, however, to an easement, created by appropriation, in favor of the State to overflow and flood the lands of this quarry, the wife’s title having been taken subject to this easement with the claimant’s knowledge. Claimant had also been in possession of this quarry under a lease for about a year before his wife’s purchase in 1938.

When claimant began to work the Otto Squires quarry in 1937 his removal of the stone extended the face of that quarry toward the east and continued in this direction after his wife acquired title thereto until he had brought it close to the common boundary separating it from the Hill quarry, when in 1939 he purchased the Hill quarry and continued his operations from the Otto Squires quarry into the Hill quarry. The rock formation composing the boundary line between the Otto Squires quarry and the Hill quarry was removed in these operations and claimant continued to extend the face of the quarry toward the east. The unavoidable result of these operations was that the water accumulated upon the Otto Squires quarry also gathered upon the Hill quarry, and the only damages claimed in this case are damages from water, on the Hill quarry during a period of seven months resulting from these operations of the claimant himself.

We need not pause to speculate whether this case is governed by the doctrine of contributory negligence or ruled by the maxim, volenti non fit injuria. Principles may vary in different situations but, where damage results to the claimant from his own voluntary and deliberate act in the face of known dangers having obvious and inevitable consequences, it matters not which principle is applied (McFarlane v. City of Niagara Falls, 247 N. Y. 340, 349; Zurich G. A. & L. Ins. Co. v. Childs Co., 253 N. Y. 324, 327). As was said in Lanigan v. New York Gas-Light Co. (71 N. Y. 29), the maxim volenti non fit injuria applies with all its force to one who heedlessly and voluntarily exposes his property to apparent danger or peril. In that case, although the gas company had been negligent in installing its apparatus in.the plaintiff’s cellar and the apparatus was thus caused to leak, the plaintiff, having sent his servants into the cellar with a light which caused the gas to ignite and explode, was held to have no right to recover because the explosion was caused by his voluntary act and the danger was so obvious that the maxim applied with all its force. Here the consequences of the claimant’s act were even more obvious for he voluntarily and deliberately destroyed the barrier of rock between the two quarries, letting the water in one flow into the other. With knowledge of the unavoidable danger, he tore down the rock and voluntarily accepted the consequences, and may not recover damages which he deliberately caused to his own property.

The judgments should be reversed and the claim dismissed, with costs in all courts.

Loughban, Ch. X, Lewis, Conway, Desmond and Dye, JJ., concur.

Judgments reversed, etc.


author: Thau her, J.

text:
    In the Matter of Glenram Wine & Liquor Corp., Respondent, v. John F. O’Connell et al., Constituting the State Liquor Authority, Appellants, and Glens Falls Indemnity Company, Respondent.
    Argued April 8, 1946;
    decided May 29, 1946.

      Alvin McKinley Sylvester, Harry F. Karst and Jack Rein-stein for appellants.
    I. Matter of Colonial Liquor Distributors, Inc., v. O’Connell (295 N. Y. 129) requires a reversal of the order of the Appellate Division in this case. (Matter of Gelces v. State Liquor Authority, 154 Misc. 517.) II. Petitioner violated subdivision 10 of section 104 of the Alcoholic Beverage Control Law in failing to keep on the licensed premises accurate books and records and in failing to record on its invoices the true prices at which alcoholic beverages were sold. (Matter of Savoy Associates, Inc., v. Valentine, 266 App. Div. 63; Matter of Yates v. Mulrooney, 245 App. Div. 146.) III. The refusal of the authority to issue a renewal of petitioner’s license was amply sustained by the record and constituted a proper and lawful exercise of the discretion vested in it by law. (Recker v. Quinn, 280 N. Y. 768; Matter of Wilson, 280 N. Y. 770; Matter of Blankfein, 273 N. Y. 588; Matter of Grossbard, 245 App. Div. 720; Matter of Panzella, 255 App. Div. 864; Crowley v. Christensen, 137 U. S. 86; Matter of Oval Bar & Restaurant, Inc., v. Bruckman, 177 Misc. 244; Matter of Tammaro v. Bruckman, 173 Misc. 958; Matter of Obert v. Mulrooney, 244 App. Div. 710; Matter of Salomone v. Mulrooney, 244 App. Div. 780; Matter of Caputo v. Mulrooney, 247 App. Div. 865.) IV. The appeal is not academic. (Bush v. O’Brien, 164 N. Y. 205; People ex rel. Albrecht v. Harnett, 221 App. Div. 487; People v. Marks, 64 Misc. 679.) V. The order annulling the determination of the authority disapproving the application for a renewal of petitioner’s license is a final order and the appeal lies as of right. (Matter of Colonial Liquor Distributors, Inc., v. O’Connell, 295 N. Y. 129.) VI. Any action or conduct which violates the expressed purpose of the Alcoholic Beverage Control. Law as set forth in section 2 thereof constitutes cause for the cancellation of a license issued under such law. (Matter of Menick v. Bruckman, 279 N. Y. 795; Matter of Conomon v. State Liquor Authority, 278 N. Y. 591.)

      Julian Jawitz and Daniel J. Biesner for petitioner-respondent.
    I. Matter of Colonial Liquor Distributors, Inc., v. O’Connell (295 N. Y. 129), requires an affirmance of the order of the Appellate Division. (Matter of Gelces v. State Liquor Authority, 154 Misc. 517; Matter of Lyman, 163 N. Y. 536.) II. The authority has invoked the penalty of cancellation although the statute in some cases speaks only of revocation. (Matter of Barreca v. O’Connell, 269 App. Div. 952; Matter of Esbeco Distilling Corp. v. Bruckman, 261 App. Div. 1067; Matter of Adamkiewicz v. Bruckman, 251 App. Div. 821; Matter of Westport Tavern, Inc., v. Bruckman, 252 App. Div. 746; People ex rel. Szydlowsky v. Bruckman, 248 App. Div. 810.) III. The record discloses no violations of subdivision 10 of section 104 of the Alcoholic Beverage Control Law. IV. By lapse of time the appeal herein has become academic. The license periods in question have both expired. (People ex rel. Geer v. Common Council of Troy, 82 N. Y. 575; Matter of Brooks, 119 App. Div. 780; Matter of Clurman, 261 App. Div. 832; Dyer v. Silkman, 227 N. Y. 624; Matter of Board of Water Supply of the City of New York, 233 N. Y. 611; Gise v. Brooklyn Society for Prevention of Cruelty to Children, 262 N. Y. 114.) V. The appeal from the portion of the appellate order which refers the matter back for reconsideration, does not lie as of right, and should be dismissed. (Matter of Simmons [Catskill Aqueduct], 206 N. Y. 577; Matter of Gazdun v. Bruckman, 280 N. Y. 621; Matter of Begent v. Noyes, 284 N. Y. 229.)

      George F. Blake for Glens Falls Indemity Company, respondent.
    I. To hold a surety liable the acts committed must be within the terms of the surety’s contract. (Fidelity & Casualty Co. of N. Y. v. Zappolo, 153 Misc. 258; Clement v. Reavley, 126 App. Div. 215; State of Ohio v. Inland Bottling Co., 142 Ohio St. 189.) II. The surety is only liable for acts committed within the terms of its contract. (Matter of Van Bokkelen, 285 N. Y. 189; Van Schaick v. American Surety Co., 252 App. Div. 489.) III. The determination of the State Liquor Authority insofar as it forfeits the bond filed in pursuance to section 112 should, be annulled and the order appealed from should be affirmed.
   Thau her, J.

We think the questions presented on this appeal are of importance in the administration of the Alcoholic Beverage Control Law and in the future conduct of the business of respondent and other licensees under said law. Accordingly, we reject the suggestion that the appeal should be dismissed as moot (Matter of Lyon Co. v. Morris, 261 N. Y. 497, 499).

After a hearing in connection with proceedings to revoke petitioner-respondent’s wholesale liquor license, the State Liquor Authority found that the licensee sold liquor at prices in excess of the ceiling prices fixed by the Office of Price Administration; that the licensee and one of its officers and two employees were convicted for these offenses; that the licensee violated section 104, subdivision 10, of the Alcoholic Beverage Control Law by failing to keep on its licensed premises adequate and accurate books and records of all transactions involving the business transacted by the licensee, and that the licensee, in -violation of section 101-a, subdivision 2, of the Alcoholic Beverage Control Law, made a sale on credit to one F. Kealty. There were further findings that the conduct of the licensee and of its officers was not conducive to the proper regulation and control of the traffic in alcoholic beverages and not in furtherance of the objects of the Alcoholic Beverage Control Law, and that, by reason of its conduct and the conduct of its officers and employees, the licensee was unfit to hold a license to traffic in alcoholic beverages.

There was sufficient evidence to sustain the findings of the State Liquor Authority with reference to inaccuracy and inadequacy of the books, the licensee having pleaded guilty to sales above ceiling prices which were entered on the books at ceiling prices. There was also evidence of a sale on credit to F. Kealty of one ease of whiskey for $34.03, and the licensee’s credit manager admitted that a mistake had been made in shipping the merchandise on credit. However, it does not appear that the sale was knowingly, willfully or intentionally made after receipt of a delinquent list showing the purchaser to be delinquent.

The proceedings before the State Liquor Authority were denominated ‘ proceedings to revoke ’ ’ the license in the notice of hearing served by order of the Liquor Authority, in. the answer of the authority and in the rules and statement of causes for revocation, annexed to the answer. The determination of the authority was that the license be cancelled as of February 28, 1945, and surrendered to the authority. Petitioner-respondent applied for a renewal license and the application was denied by the authority. These determinations were annulled in the Appellate Division on November 14, 1945, and the matter was remitted to the State Liquor Authority for consideration of the issuance of a license to the petitioner for the period terminating February 28, 1946.

The case of Matter of Colonial Liquor Distributors v. O’Connell (295 N. Y. 129) was decided by this court on January 17, 1946. In an attempt to escape the effect of our decision in that case, counsel for the State Liquor Authority emphasizes the fact that the authority cancelled the petitioner’s license and directed its surrender but did not revoke this license and upon this verbal distinction predicates the contention that the authority may cancel the license for any cause, in addition to those specified in the act itself, which it may believe warrants the cancellation of the license. We find no support for this contention either in the provisions of the law or in the •well-understood meaning of the words used. Cancellation ” and “ revocation ” are very closely synonymous. To cancel means to deface or obliterate a writing by drawing lines across it latticewise and with reference to legal documents it means to annul, render void or invalid by so marking. Similarly, to revoke means to recall, and, with reference to privileges, “ to annul, repeal, rescind, cancel ” (Oxford Dictionary). In Bouvier’s Law Dictionary cancellation ” is defined as the act of crossing out a writing; the manual operation of destroying a written instrument, and “ revocation ” as meaning the recall of a power or authority conferred or the vacating of an instrument previously made. Similar meanings will be found in the Century Dictionary, and Blackstone, in Commentaries II (ch. XXIII; p. 376), says that a devise may be revoked by burning, canceling, tearing or obliterating thereof by the devisor or in his presence and with his consent. Thus it is apparent that “ cancellation ”, as applied to the termination and surrender of a license, is merely a form of revocation and the word is apparently so used in the statute and has been so understood by the authority until this contention was advanced to overcome the effect of the decision in the Colonial case {supra). Instances of such usage appear in the record in the instant ease and other instances are referred to in the respondent’s brief. We find nothing in the statute to warrant the contention that statutory rules relating to the revocation of licenses may be avoided by commencing a proceeding to revoke and ending it with an order of cancellation and surrender, as was done in this case. Plainly the purpose and effect is to cancel and to revoke. Involuntary cancellation and surrender of a license is- nothing short of revocation.

As in the Colonial case {supra), it seems clear that the authority predicated its determination largely upon violations of the Federal statute in denying the application for a new license and revoking the old. We hold, as we did in that case, that the authority was without power to revoke or cancel the license because of sales above ceiling prices in the absence of any notice to the licensee pursuant to subdivision 5 of section 114 of the Alcoholic Beverage Control Law that such sales would constitute cause for revocation, and reaffirm our decision that a license may be suspended or revoked in proper cases for acts occurring during a prior licensing period^

Insofar as the order appealed from directed consideration of the application for the issuance of a license, it did not finally determine a special proceeding and the appeal predicated upon subdivision (3) of section 7 of article VI of the Constitution should be dismissed, with costs, because, under the Alcoholic Beverage Control Law, hearings are not contemplated in connection with the consideration of applications for the issuance of licenses. Accordingly, we have no jurisdiction to review that part of the order, either on the appeal as of right or on the stipulation for an order absolute.

Upon the appeal from the order of the Appellate Division, insofar as such order annulled the cancellation of the license, the order should be reversed, without costs, and the matter remitted to the State Liquor Authority for further proceedings not inconsistent with this opinion; otherwise, the appeal should be dismissed.

Upon the appeal with stipulation for order absolute, the appeal should be dismissed, with costs.

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

Ordered accordingly.


author: Thaoher, J.

text:
    William C. Anderson, Suing on Behalf of Himself and Other Stockholders Similarly Situated, Appellant, v. International Minerals & Chemical Corporation, Respondent.
    Argued March 6, 1946;
    decided May 29, 1946.

      George W. Whiteside, Leonard P. Moore and Henry J). Bulkley for appellant.
    I. Accumulated dividends on plaintiff’s 500 shares of prior preference stock constituted an outstanding obligation at the time of consolidation which could be satisfied only by payment in full. Plaintiff’s rights are contractual. (Roberts v. Roberts-Wicks Co., 184 N. Y. 257; Strout v. Cross, Austin & Ireland Lumber Co., 283 N. Y. 406; Patterson v. Durham Hosiery

      Mills, 200 S. E. 906.) II. Plaintiff’s right to payment of accrued dividends cannot be destroyed. (Roberts v. Roberts-Wicks Co., 184 N. Y. 257; Breslav v. New York & Queens Electric L. & P. Co., 249 App. Div. 181, 273 N. Y. 593; Albrecht, Maguire & Co., Inc., v. General Plastics, Inc., 280 N. Y. 840; Strout v. Cross, Austin & Ireland Lumber Co; 283 N. Y. 406; Wiedersum v. Atlantic Cement Products, Inc., 261 App. Div. 305; Davison v. Parke, Austin & Lipscomb, Inc., 285 N. Y. 500.) III. Section 91 of the Stock Corporation Law did not by its terms authorize cancellation of plaintiff’s accumulated dividends otherwise than by payment in full. (Roberts v. Roberts-Wicks Co., 184 N. Y. 257; Breslav v. New York & Queens Electric L. & P. Co., 249 App. Div. 181, 273 N. Y. 593; Albrecht, Maguire & Co., Inc., v. General Plastics, Inc., 280 N. Y. 840; Strout v. Cross, Austin & Ireland Lumber Co., 283 N. Y. 406; Wiedersum v. Atlantic Cement Products, Inc., 261 App. Div. 305; Davison v. Parke, Austin & Lipscomb, Inc., 285 N. Y. 500.) IV. The payment of past due cumulative dividends is an “ obligation ” of the corporation under section 90 of the Stock Corporation Law.

      Orison S. Mar den and Glover Johnson for respondent.
    I. All rights represented by the old preference stock in the constituent domestic corporation which plaintiff owned, including all accumulated dividends thereon, for the past as well as the future, were merged into the securities of the continuing corporation. Accumulated dividend arrears may be compounded upon a merger. (Federal United Corp. v. Havender, 11 A. 2d 331; Keller v. Wilson & Co., Inc., 190 A. 115; Porges v. Vadsco Sales Corp., 32 A. 2d 148; Hottenstein v. York Ice Machinery Corp., 136 F. 2d 944; Hubbard v. Jones & Laughlin Steel Corp., 42 F. Supp. 432; Beechwood Securities Corp. v. Associated Oil Corp., 104 F. 2d 537; Zobel v. American Locomotive Co., 182 Misc. 323; Colby v. Equitable Trust Co., 124 App. Div. 262, 192 N. Y. 535; McNulty v. W. & J. Sloane, 184 Misc. 835; Alpren v. Consolidated Edison Co. of New York, Inc., 168 Misc. 381.) II. Section ' 90 of the Stock Corporation Law, dealing with rights of creditors, has no application here. Stockholders are not creditors. ! (11 Fletcher on Corporations, § 5321; Godley v. Crandall & Godley Co., 212 N. Y. 121; McNulty v. W. & J. Sloane, 184 Misc. 835; Heyn v. Fidelity Trust Co., 197 A. 292.)
   Thaoher, J.

We are concerned in this case with the merger and consolidation of International Agricultural Corporation, a New York corporation, and Union Potash & Chemical Company, a Colorado corporation. These companies were consolidated pursuant to section 91 of article 8 of the New York Stock Corporation Law, and the defendant, International Minerals & Chemical Corporation, organized under the laws of the State of New York, is the consolidated or continuing company resulting from the merger of the two constituent companies.

The plaintiff, William C. Anderson, owner and holder of 500 shares of 7% prior preference cumulative stock of International Agricultural Corporation, did not vote his stock for or against the merger and consolidation nor was he present or represented by proxy at the meeting of the shareholders of this company on March 30, 1942, when resolutions were adopted by the vote of more than two thirds of the issued and outstanding shares of each class of stock. These resolutions authorized the consolidation and merger of the two companies upon the terms set forth in the certificate of consolidation and agreement of merger. It was provided therein that each share of the 7% prior preference cumulative stock of International Agricultural, including all accumulated and unpaid dividend arrears thereon, was converted into one share of the 4% cumulative preferred stock and three and one-half shares of the common stock of the continuing corporation. At the time of the consolidation these dividend arrears aggregated $95 per share. The holders of the original common stock were to receive for each share of the old stock held by them one fourth of one share of new common stock. Action authorizing the consolidation and merger was taken by the Union Potash & Chemical Company as permitted by and in compliance with the laws of Colorado and also in compliance with section 91 of article 8-of the New York Stock Corporation Law. The merger and consolidation were consummated by filing the certificate of consolidation with the Secretary of State of New York and by filing the agreement of merger with the Secretary of State of Colorado.

Plaintiff received notice of the special meeting, presenting the details of the proposed consolidation and merger,, more than five weeks before the meeting, a follow-up notice ten days before the meeting and knew of the consolidation proceeding at all times.

On April 7,1942, the day after the consolidation was consummated by filing certificates of consolidation with the Secretaries of State in the two States, plaintiff was requested to present his old shares for exchange for the new shares. On June 1, 1942, a dividend of a $1 per share upon the new cumulative preferred stock was declared and plaintiff was again requested to present his old stock for exchange. On June 30, 1942, plaintiff received a similar request advising him that there had been forwarded under separate cover a check in the amount of $1 per share covering the first quarterly dividend on the 4% cumulative preferred stock to which he was entitled. This check was received, indorsed and cashed for plaintiff’s account.

Subdivision 7 of section 91 of article 8 of the Stock Corporation Law provides that “ Any stockholder of a domestic corporation included in such consolidation, not voting in favor thereof, may object to such consolidation and demand payment for his stock, at any time prior to the vote * * *. The objecting stockholder or the corporation shall have the right to have such stock appraised and paid for in the manner provided, and subject to the conditions imposed by section twenty-one. * * *”

Plaintiff never made demand under these provisions of the law and did not object to the proposed consolidation until almost three months after the first dividend check on the new 4% cumulative preferred stock had been received and cashed for his account. Under date of September 22, 1942, plaintiff wrote the following letter to the defendant corporation:

“ I have just returned from the country where I have been since the latter part of June. I have just learned that in my absence a check for $500.00 was mailed to me purporting to be a dividend on shares of 4% cumulative preferred stock of your corporation. I have further learned that without any knowledge on my part and without any authorization from me said check was deposited in my account.

“ Please be advised that I do not own any of the shares on which the check above mentioned purports to be a dividend and I therefore return herewith my check for $500.00 to the order of your company in repayment of the amount mistakenly sent me and deposited in my account in error while I was away.”

Thereafter this action was commenced. The amended complaint alleges that plaintiff is the owner and holder of 500 shares of the 7% prior preference cumulative stock, acquired during the years 1931 and 1932 and held and owned by him at all times since; that at the time of the consolidation and merger there were accumulated and unpaid dividends on the 7% prior preference cumulative stock of approximately $95 a share; that under the terms of the consolidation holders of the 100,000 shares of 7% prior preference cumulative stock were to receive in place of each of their shares and the accumulated dividends thereon one share of 4% cumulative preferred stock and three and one half shares of common stock of the consolidated corporation, and that upon receipt of the new securities the right to accumulated dividends amounting to $47,500 on plaintiff’s 500 shares was to be cancelled and extinguished. The relief prayed for includes a request for judgment that defendant’s action was void and unenforcible as to accumulated dividends on plaintiff’s shares and similar shares of others who come in and contribute to the expense of the action and that such dividends be paid to plaintiff and others participating with him in the lawsuit. Injunctive relief is also requested against paying any dividends on any stock of the consolidated corporation until plaintiff and others participating have been paid the accumulated dividends on their 7 % prior preference shares of the International Agricultural Corporation shares.

Plaintiff relies upon decisions in cases involving the reclassification of shares under article 4 of the Stock Corporation Law prior to its amendment in 1943 (L. 1943, ch. 600) and particularly upon Davison v. Parke, Austin & Lipscomb, Inc. (285 N. Y. 500) where we held that sections 36 and 38 of that article, before their amendment, did not confer power to deprive preferred shareholders of accumulated dividends without their consent. Under those sections of the law the right of a shareholder to object to a reclassification of capital stock and demand an appraisal was quite restricted (Matter of Kinney, 279 N. Y. 423; Matter of Duer, 270 N. Y. 343; Matter of Dresser, 247 N. Y. 553; cf. Matter of Silberkraus, 250 N. Y. 242). The reclassification provisions of the statute as then written did not contemplate or expressly provide for reclassification which deprived shareholders of accumulated dividends. The reclassification provided for, therefore, presented problems very different from the problems of reorganization and merger which necessarily involve exchange of shades in an old company, with all their rights, for new shares with new rights in a new company. Our decision in the Davison case {supra) dealing with reclassification under the statute, before its amendment, went upon the failure of the statute to provide for a reclassification of shares which involved surrender of accumulated dividends. As a result of this decision the statute was amended to so provide.

In this case we are dealing with the provisions of the New York Stock Corporation Law having to do with merger and consolidation (art. 8). These provisions differ in language, purpose and subject matter from article 4 relating to the reclassification of shares under which the cases arose upon which plaintiff relies. The whole process of merger and consolidation rests upon the principle of permitting consolidations approved by two thirds of the shareholders which in the absence of Statute would require the consent of all and permitting dissenters, not wishing to go along, the opportunity to have their shares appraised and to retire from the enterprise upon payment to them of the appraised value of their shares. It is important to note that the provisions of subdivision 7 of section 91 of article 8 give to every dissenting stockholder included in the consolidation the right to object and demand payment for his stock and to have the same appraised and paid for in the manner provided and subject to the conditions imposed by section 21. Section 21 expressly provides: “Before receiving payment such stockholder shall surrender to the corporation his certificate of stock. When the corporation shall have paid the amount of such appraisal, as directed by the court, such stockholder shall cease to have any interest in such stock and in the corporate property of such corporation and such stock may be held or disposed of by such corporation.”

The purpose of section 21 of the Stock Corporation Law was to protect dissenting shareholders, and the process of appraisal was designed to meet two evils which arose because of limitations upon the powers of majority shareholders to bind the minority to a course of action beyond the powers of the'majority, which might well be greatly to the advantage of those engaged in a corporate enterprise. These two evils are well stated in Matter of Timmis (200 N. Y. 177, at p. 181), dealing with an analogous Statute:

“ (1) The injustice to the bulk of the stockholders from want of power in a corporation to sell its business or an essential part thereof to another corporation organized for the purpose, frequently from its own membership, on terms deemed advantageous by the holders of a large majority of the stock. (2) The injustice to minority stockholders of requiring them to abandon, change or limit their business if the majority should have the power to direct such a sale. An incidental evil was the power of a dissenting stockholder to compel the majority to buy him out on his own terms in order to secure unanimous consent with no one left to question the transaction.

“ These evils could be remedied only by legislation, for the courts cannot provide against inherent defects in the creation of corporations. * * * This legislation was designed to meet the evils pointed out by the courts by enabling a majority of two-thirds to sell if they deemed it was the best policy, and at the same time to protect the minority, if they regarded the sale as opposed to their interests.”

The remedy of appraisal and payment was intended to afford fair and just compensation to the dissenters and at' the same time provide the method by which their objections could be fairly composed so as to enable the consolidation to proceed. This is plainly one of the cases in which it was intended that the rights of the dissenting minority should be surrendered, subject only to their right, secured by the statute, to fair and just compensation. No other construction of the statute is compatible with the accomplishment of its purpose. The care with which the Legislature provided in such cases that any stockholder included in the consolidation can have such compensation indicates quite clearly that every right of a dissenting shareholder is to be appraised and paid for. Since consolidation necessarily imports the retirement of the stock of the constituent companies and the issuance of new shares representing the capital of the consolidated company, the old stock with all its rights and privileges is necessarily retired and the shareholders participating in the consolidation become entitled to the shares of the new corporation under the terms and conditions of the certificate of consolidation. If, proceeding in accordance with the statute, the consolidation is duly consummated, there are but two alternative rights which survive to the holders of the old shares: to take the new shares upon the terms and conditions of consolidation or to take the value of the old shares determined in accordance with section 21. The plaintiff here insists that he may demand the dividends accumulated upon his stock and at the same time take the new shares of the consolidated company. This of course is quite contrary to the provisions of the certificate of consolidation which provides for the issuance of one share of new 4% cumulative preferred stock and three and one-half shares of new common stock of the consolidated corporation in exchange for each share of the 7% prior preference cumulative stock of the constituent New York corporation, International Agricultural Corporation. Of course none of the other shareholders has agreed to any such basis of consolidation as the plaintiff demands and his demand is destructive of the whole statutory process.

The plaintiff attempts to support his position by reference to section 90 of the Stock Corporation Law which deals with rights of creditors of consolidated corporations. Quite obviously there is no merit in this contention, for the right to accrued dividends, accrued merely by the lapse of time and not yet declared, is not a debt or a claim enforcible against the corporation (Godley v. Crandall & Godley Co., 212 N. Y. 121, 128; McNulty v. W. & J. Sloane, 184 Misc. 835, 842).

The interpretation of the statute being clear, no question arises as to its constitutional validity since the plaintiff acquired his stock in International Agricultural Corporation, a New York corporation, during the years 1931 and 1932. It is true that section 91 authorizing the consolidation of domestic with foreign stock corporations was added by Laws of 1934, chapter 611, section 1, effective May 14,1934, but similar provisions for merger and consolidation of two or more domestic business corporations had been on the statute books since the enactment of section 8 of the Business Corporations Laws of 1909 and these provisions had been derived from section 14 of the Business Corporation Law of 1890. Thus whatever rights the plaintiff acquired as a stockholder in 1931 and 1932 were subject to the provisions for appraisal similar to those which he now attacks as invalid. Indeed, the constitutionality of such provisions had been considered and determined by this court as early as 1918 (Logan v. New Amsterdam Gas Co., 224 N. Y. 664) and similar questions arising under the Banking Law were decided in April, 1908 (Colby v. Equitable Trust Co. of New York, 192 N. Y. 535). For a precisely analogous case see In re Inierborough Consolidated Corporation (277 F. 455).

The judgment should be affirmed, with costs.

Loughkan, Ch. J., Lewis, Conway, Desmond and Dye, JJ., concur.

Judgment affirmed.


author: Dyb, J.

text:
    In the Matter of the Claim of Archibald Dewhurst, Respondent, against Abraham Simon, Respondent, and Flushing Crestwood, Inc., et al., Appellants. Workmen’s Compensation Board, Respondent.
    Argued March 6, 1946;
    decided May 29, 1946.

      Leon Freedman and Arthur B. Erenstoft for appellants.
    I. Section 56 of the Workmen’s Compensation Law does not impose liability upon the appellants. (Matter of Skora v. Conservative Building Corp., 233 App. Div. 799, 249 N. Y. 519.) II. The developer was not a contractor within the meaning of section 56.

      Nathaniel L. Goldstein, Attorney-General (Boy Wiedersum, Orrin G. Judd and Lester D. Volk of counsel), for Workmen’s Compensation Board, respondent.
    I. The developer was in the position of a contractor and actually was engaged in the supervision of its contractors. The terms of the policy issued to it covered the claimant. The employer and carrier are estopped from denying liability under the Workmen’s Compensation Law. (Cary Brick Co. v. Fidelity & Casualty Co., 162 App. Div. 873, 220 N. Y. 744; Matter of Greco v. Queenside Hills Realty Co., 266 App. Div. 704; Matter of Dann v. Town of Veteran, 278 N. Y. 461.)
   Dyb, J.

The sole question presented by this appeal is whether Flushing Crestwood, Inc., as the owner of a subdivision which it was developing by the erection of single-family dwelling houses for purposes of sale to the public, is liable as a general contractor for injuries to an employee of a noninsured independent contractor within the spirit and meaning of section 56 of the Workmen’s Compensation Law (as amd. by L. 1939, ch. 541).

The record discloses that the claimant was an employee of Abraham Simon who had an oral contract with Flushing Crest-wood, Inc., to furnish and install window lights (at 17 cents each for the large and 11 cents each for the small) in the houses under construction and to be constructed, and, while engaged in the work, sustained the injuries for which an award has been made. Flushing Crestwood, Inc., let out all contract work in connection ■with the development, exercising no supervisory control over its performance other than to co-ordinate the progress of the separate contractors, keeping no payrolls and employing no workmen except one watchman.

The language of section 56, broad as it is in making a general. contractor liable for injuries sustained by employees of its non-insured subcontractors, can not be so comprehensively construed as to include an owner engaged in contracting with others for the erection of buildings on its own lands and make it responsible for injuries sustained by employees of a noninsured independent contractor. In Matter of Skora v. Conservative Building Corp. (223 App. Div. 799, revd. 249 N. Y. 519) we reversed an award to an employee of an alleged subcontractor on the ground that the appellant was not a contractor within section 56 of the Workmen’s Compensation Law. Comparing section 56 as it then stood with the language as it now stands, we find no change sufficient to warrant a different interpretation. To broaden the scope of the principle expressed, resort should be had to legislative action, rather than to judicial construction.

The order of the Appellate Division should be reversed and the claim against Flushing Crestwood, Inc., and Public Service Mutual Casualty Co., Inc., carrier, dismissed and the matter remitted to the State Industrial Board for further proceedings not inconsistent herewith, with one bill of costs in this court and in the Appellate Division against the State Industrial Board.

Lotjghean, Ch. J., Lewis, Conway, Desmond and Thacheb, JJ., concur.

Order reversed, etc.


author: Per Curiam.

text:
    The People of the State of New York ex rel. Sheffield Farms Co., Inc., Appellant, against Joseph Lilly et al., Constituting the Tax Commission of the City of New York, Respondents. (Taxes of 1939-40,1941-42,1942-43 and 1943-44.)
    Argued April 15, 1946;
    decided May 29,1946.

      Harris Jay Griston for appellant.
    I. The obtaining of the writ and its service on the Tax Commission were in full compliance with the order granting it, which order was granted in accordance with the then settled law, by a court of competent jurisdiction, and which order has never been vacated or modified, and it is binding, even if it now be considered that one of its provisions was erroneous. (People ex rel. Taber Prang Art Co. v. Wells, 39 Misc. 602; People ex rel. Syperrek v. McAdoo, 125 App. Div. 673; People ex rel. Warren v. Purdy, 177 N. Y. S. 45, affd. sub nom. Matter of Warren v. Bd. of Taxes and Assessments

      of City of N. Y., 171 App. Div. 936; People ex rel. Thompson v. Feitner, 168 N. Y. 441; People ex rel. Norchester Corp. v. Miller, 263 App. Div. 83; Lyon v. Richmond, 2 Johns Ch. 60; Newburgh Sav. Bank v. Town of Woodbury, 173 N. Y. 55; Lawrence v. Denham Co., 64 Misc. 189; Jacobs v. Morange, 47 N. Y. 57; Doll v. Earle, 59 N. Y. 638; People v. Sturtevant, 9 N. Y. 263.) II. Even though the order may have granted petitioner erroneous relief, that error did not deprive the court of jurisdiction to make the order, nor destroy its enforcibility. (People ex rel. House of Reeve v. Goldfagle, 256 App. Div. 849; Matter of Kahn v. National City Bank of N. Y., 258 App. Div. 632; People v. Sturtevant, 9 N. Y. 263; People ex rel. Gaynor v. McKane, 78 Hun 154; Baker v. Stephens, 10 Abb. Prac. [N. S.] 1; Jacobs v. Morange, 47 N. Y. 57.) III. The order obtained here on October 24,1939, is binding, and protects the acts of the parties thereunder, unless the order had been either reversed on appeal, or vacated by a direct attack on the order itself. This was not done. (Buffalo & State Line R. R. Co. v. Board of Supervisors of Erie County, 48 N. Y. 93.)

      John J. Bennett, Corporation Counsel (Richard L. Baltimore, Jr., and Leo Brown of counsel), for respondents.
    The writ for the tax year 1939-40 was properly dismissed. (People ex rel. Northchester Corp. v. Miller, 288 N. Y. 163; People ex rel. Savory, Inc., v. Plunkett, 295 N. Y. 180.)
   Per Curiam.

The Appellate Division order here appealed from, while it is in part a reversal and while stated therein to be a modification on the facts and the law, and while it strikes out the Special Term findings of fact, does not set forth any new findings of fact. Accordingly, we are required by section 602 of the Civil Practice Act to presume that the questions of fact were not considered by the Appellate Division. We must, therefore, treat the Appellate Division order as being a determination on the law only. So much of that order as affirms the dismissal on the law of the 1939-40 writ is correct, since service on the city was not made within the time limited by section 166 of the New York City Charter. As to the other three tax years, since the record contains testimony supporting the Special Term findings of fact, reversal of that part of the order, on the law, was not warranted. We must, therefore, as to so much of the order appealed from as concerns the tax years 1941-42, 1942-43 and 1943-44, “ remit the case to the appellate division for determination upon' the questions of fact raised in that court ” (Civ. Prac. Act, § 606).

The order should he affirmed, with costs, so far as it concerns the 1939-40 assessment; otherwise remitted to the Appellate Division for resettlement, so as to state the court’s determination on the facts as to the other three tax years, without costs.

Loughban, Ch. J., Lewis, Conway, Desmond, Thacheb and Dye, JJ.; concur.

Ordered accordingly.


text:
    Elizabeth Privensal, Respondent, v. Solveig Privensal, Appellant, and Pan American Airways System et al., Respondents.
    Argued April 8, 1946;
    decided May 29, 1946.

      Arnold B. Elhind for defendant-appellant.
    I. There was no triable issue of fact. (Lederer v. Wise Shoe Co., 276 N. Y. 459.) II. Since all of the material facts essential to defendant-appellant’s right to recover were established by unimpeached documentary evidence, extraneous matters cannot be utilized to defeat her right of recovery. :

      Jacob W. Friedman and Hyman Katz for plaintiff-respondent.
    The papers on the motion disclose the existence of substantial triable issues of fact and law. (Dulari v. Vallabdas Pragji, I. L. R. 13 Bom. 126; Srinivasa v. Sesha, I. L. R. 41 Mad. 197; Krishnayya v. Narayana, I. L. R. 32 Mad. 185; Baldeo Sahai v. Jumna Kunwar, I. L. R. 23 All. 495; Devarayan v. Mutturaman I. L. R. 37 Mad. 393; Ford v. DePontes, 30 Beav. 572; Bai Vijli v. Nansa Nogar, I. L. R. 10 Bom. 152; Deivanayaga Padayachi v. Muthu Reddi [1920], I. L. R. 44 Mad. 329.)

      William J. Butler for China National Aviation Corporation.' defendant-respondent.
   Per Curiam.

The answer of the defendant-appellant contains no counterclaim, and in the absence of such a pleading, an affirmative summary judgment may not he directed in her favor. We decide no other question.

The order should be affirmed, without costs, and the question certified answered in the negative.

Lotjghban, Ch. J., Lewis, Conway, Desmond, Thacheb and Dye, JJ., concur.

Order affirmed, etc.


text:
    The People of the State of New York, Respondent, v. John J. Scheppa, Appellant.
    Argued April 18, 1946;
    decided June 6, 1946.

      Samuel Bader and Harry G. Anderson for appellant.
    I. The verdict acquitting the codefendant and convicting ¡appellant is legally inconsistent. Appellant’s conviction must, therefore, be set aside. (People v. Kuland, 266 N. Y. 1; People v. Hamilton, 165 App. Div. 546; Feder v. United States, 257 F. 694; Worthington v. United, States, 64 F. 2d 936; Reg. v. Manning [1883] L. R. 12 Q. B. Div. 241; Reg. v. Thompson [1851] 16 Q. B. 832; State v. Smith, 117 Ark. 384; Sherman v. State, 113 Neb. 173; People v. MacMullen, 134 Cal. App. 81; People v. McKane, 143 N. Y. 455; People v. Weiss, 290 N. Y. 160; People v. Safe-Way Coal Co., 242 App. Div. 659; People v. Massett, 7 N. Y. S. 839; People v. Munroe, 190 N. Y. 435; People v. Liquori, 284 N. Y. 309; State v. Dougherty, 88 N. J. L. 209.) II. Appellant’s guilt was as a matter of law not established beyond a reasonable doubt. (People v. Learman, 261 App. Div. 748.)

      Miles F. McDonald, District Attorney (William I. Siegel of counsel), for respondent.
    I: There is no inconsistency in the verdict convicting appellant and acquitting the codefendant. (People v. Eichner, 168 App. Div. 200; People v. Cohen, 223 N. Y. 406; People v. Sciascia, 268 App. Div. 14.) II. Appellant’s guilt was established beyond a reasonable doubt. (People v. Misiani, 148 App. Div. 797.)
   Desmond, J.

Appellant and a codefendant, Calabria, were accused by one Ambrogi, proprietor of a Brooklyn garage, of obtaining money from Ambrogi by threats. The joint indictment on which appellant and Calabria were tried contained two counts: one for extortion, the other for conspiracy to extort. The same alleged taking of money was pleaded as the extortion and as one of the overt acts in the conspiracy count. At the close of the trial the County Judge, without objection, dismissed the conspiracy charge. The jury then acquitted Calabria and convicted appellant, of extortion, and the Appellate Division affirmed the judgment of conviction.

In appellant’s main point he argues that the verdict against him was inconsistent with the jury’s finding that his codefendant was innocent. If the conspiracy charge had gone to the jury and the jury had found one man guilty and the other not, that verdict would have been so self-contradictory as to be a nullity. “ Upon an indictment [for conspiracy] against two only, where no others are named, the rule commonly stated is that an acquittal or reversal as to one is an acquittal or reversal as to the other ” (People v. Kuland, 266 N. Y. 1, 2). This is so because ‘ ‘ conspiracy imports a corrupt agreement between not less than two with guilty knowledge on the part of each ” (Morrison v. California, 291 U. S. 82, 92). “ If the act is indivisible, such as conspiracy or riots, then one cannot be convicted without the other ” (Klein v. People, 31 N. Y. 229, 235). Here the conspiracy accusation had been stricken from the indictment before the case went to the jury. Appellant’s counsel, however, says that even without the express charge of conspiracy, the theory of the prosecution throughout was that the two defendants had acted in concert, and that the rule hereinabove quoted from People v. Kuland should, therefore, apply.

The People did assert and insist at the trial that the two defendants were acting together, each with the same guilty intent. But the crime of extortion, unlike the crimes of riot or conspiracy or the crime charged in People v. Munroe (190 N. Y. 435) can be committed by one person without any confederate. Calabria, the acquitted defendant, did take part in the conversation in which, as the jury found, the threats were made which influenced Ambrogi to part with his money. Indeed Calabria, talking to the complainant out of appellant’s hearing, elaborated on appellant’s threatening statements and urged the complainant to make the payment demanded. The money was later actually paid to Calabria, to be turned over to appellant, and there is no proof that Calabria did turn it over. But there was testimony from which the jury could find that Calabria was acting not as an agent for, or collaborator with, appellant, but as a friend of complainant, believing, however mistakenly, that discretion in compliance would serve complainant better than valor in resistance. Calabria was complainant’s acquaintanee, appellant was a stranger to the latter. Complainant testified that he himself, at least for a time, thought that Calabria’s persuasions, unlike the similar urgings of appellant, were spoken out of friendship for complainant. The County Judge, without objection or exception, charged the jurors that they might find “ the same verdict for both " or “ a different verdict for each, depending upon the facts in the case as you find them ”.

For all these reasons we think the case was one where reasonable jurors might say that, of the two defendants who urged complainant to part with his money lest he suffer injury, one had, and the other did not have, a criminal intent. This case is, therefore, not at all like People v. Safe-Way Coal Co. (242 App. Div. 659) where the jury exculpated certain defendants but convicted a defendant whose guilt, if any, must have been vicarious or derivative only and predicated on the acts of those whom the jury freed (cf. Pangburn v. Buick Motor Co., 211 N. Y. 228).

Although both defendants in the present case came to the garage together and each expressed to complainant the same idea — that harm would befall him if he did not suffer the exaction — nevertheless it cannot be said that the evidence is identical as to the two. Their relations to complainant were different and the jury could draw different inferences as to their motives. We need not, therefore, discuss at this time the legal effect of a verdict which illogically discriminates between joint defendants as to whom the proofs are identical (cf. People v. Massett, 7 N. Y. S. 839, 55 Hun 606, and People v. Munroe, supra, 190 N. Y. at p. 438, with such cases as White v. People, 32 N. Y. 465, and People v. Cohen, 223 N. Y. 406, 429, 430; see, also, as to inconsistency between determinations on various counts, People v. Sciascia, 268 App. Div. 14, affd. 294 N. Y. 927; Dunn v. United States, 284 U. S. 390, and Code Crim. Pro., § 443-a).

None of appellant’s other points require special attention.

The judgment should be affirmed.

Lottghean, Ch. J., Lewis, Conway and,Thacheb, JJ., concur; Dye, J., taking no part.

Judgment affirmed.