author: Crane, J.

text:
    The People of the State of New York, Respondent, v. Earl V. B. von Brandenburg, Appellant.
    Crimes — grand larceny by false representations — trial — result of jury trial should not be disturbed unless substantial principle of law has been violated — crime of grand larceny complete when complainant parted with money relying upon false representations deliberately made by defendant — gift thereafter to complainant of certificates of corporate stock immaterial — evidence of solvency of another' corporation organized by defendant immaterial and irrelevant — instructions to jury.
    1. Things said and done in the pull and push of a jury trial should not disturb the result unless some substantial principle of law has been violated.
    2. Where upon the trial of an- indictment charging grand larceny by false representations it is conclusively proved that the representations were made by the defendant as charged; that they were false and known to be false and that the complainant relying upon them parted with a valuable consideration, the fact that the defendant or his agents may have thereafter given to complainant certain certificates of stock is immaterial to the charge. The crime was complete when complainant parted with his money relying upon false representations deliberately made to cheat him.
    3. Where the stock given to complainant was that of a New York corporation the solvency of a similar corporation organized by defendant in another State or the amount of its assets was immaterial and irrelevant and was properly excluded from the evidence.
    4. A statement by the trial justice that if complainant bought stock in the foreign corporation as distinguished from the New York stock, the action would not lie, was error, but in favor of defendant, and where in the main charge he in substance repeated the statement, but when the jury came in for instructions told them in substance that while he left it open for them to decide whether complainant bought foreign or New York stock, yet if he did purchase foreign stock the defendant, nevertheless, would be guilty, if complainant was induced to buy it by reason of the alleged false representations, this statement also was too favorable to the defendant and he cannot complain of it. Whichever stock was purchased or received was of no consequence, but assuming that the judge was right in favoring the defendant by leaving the nature of the purchase as an open question for the jury he was at the same time right regarding his conclusion.

      People v. von Brandenburg, 208 App. Div. 840, affirmed.
    (Argued June 8, 1925;
    decided October 6, 1925.)
    Appeal from & judgment of the Appellate Division of the Supreme Court in the first judicial department, entered April 17, 1924, which affirmed a judgment of the Court of General Sessions of the Peace in the county of New York, convicting the defendant of the crime of grand larceny in the second degree.

      J. Edward Murphy for appellant.
    Under the Code of Criminal Procedure and the authorities construing the section, the indictment must not only charge the crime, but must allege the facts constituting the crime, and cannot be sustained by proof that the crime was committed by different means. (Code Crim. Pro. §§ 275-279); People v. Foster, 60 Misc. Rep. 3; People v. Tvartorara, 76 Misc. Rep. 55; People v. Sanborn, 14 N. Y. S. R. 123; 117 N. Y. 625; People v. Dunn, 53 Hun, 381; People v. Blanchard, 90 N. Y. 319.) If the defendant was called to answer an indictment using exactly the same language, except that the words “ Philadelphia New Method Molding and Metal Corporation ” were employed in lieu of the words “ New York New Method Molding and Metal Corporation ” the present indictment and judgment of conviction thereon could not be successfully used by the defendant in bar. (People v. Livingston, 47 App. Div. 283; People v. Santoro, 229 N. Y. 277; People v. Grzesczak, 77 Misc. Rep. 202; People v. Warren, 1 Park. Cr. R. 338.) After having, upon the trial, on objection of the district attorney, and under defendant’s exception, excluded the evidence offered by the defendant of the assets, investments and market value of the Philadelphia Company stock, and after having in the main charge instructed the jury they should acquit the defendant if they found complainant purchased stock of the Philadelphia Company instead of the New York Company, it was prejudicial error on the part of the trial court to have reversed this settled rule of law upon which the trial was conducted, and instructed the jury in effect that they should not acquit the defendant even if they found that complainant witness bought stock of the Philadelphia Company instead of the New York Company. (People v. Bliven, 112 N. Y. 79; People v. Dumar, 106 N. Y. 502.) The trial court erred in excluding the competent evidence offered by the defendant, of the assets, investments and market value of the stock of the Philadelphia Company, and the burden is on the People to show that the error was harmless. (People v. Smith, 172 N. Y. 210.)

      Joab H. Banton, District Attorney (.Michael J. Driscoll of counsel), for respondent.
    The New York New Method Molding and Metals Corporation had no mining rights in Pavilion Hill, S. I., and had not the sole and exclusive right to the Hoffman process. A misrepresentation of such facts warranted a verdict of guilty. (Morgan v. Skiddy, 62 N. Y. 319.) The exclusion of the assets of the Philadelphia New Method Molding and Metals Corporation by the trial court presented no error. (People v. Barry, 132 App. Div. 231; 196 N. Y. 507.) The trial court committed no error in the charge to the jury. (People v. Geyer, 196 N. Y. 364; Caldwell v. N. J. Steamboat Co., 47 N. Y. 282; People v. Fiorentino, 197 N. Y. 566; People v. Turley, 153 App. Div. 673.)
   Crane, J.

The defendant has been convicted of grand larceny in the second degree, and the judgment of conviction has been unanimously affirmed by the Appellate Division. There remain, therefore, for our consideration only such alleged errors as are presented by exceptions to the rulings of the trial court. • The only matter calling for discussion is a criticism of the charge which it is said must have misled the jury.

To understand the remarks of the trial justice and appreciate this criticism, it will be necessary to review the principal facts of the case.

The indictment charges grand larceny by false representations made to one William A. Thunhorst, whereby he parted with his money. The representations were that a certain corporation, known as the New York New Method Molding and Metal Corporation, had certain mining rights in lands owned by one William A. Maxwell, at Pavilion Hill, Staten Island, New York; that there had been discovered a rich vein of asbestos in said lands, which was of a kind suitable for making molds withstanding an enormous heat; that certain photographs were produced by the defendant, and exhibited to Thunhorst, purporting to show a shaft leading into the asbestos mines in said lands; and it was further represented that the said company had rights to a certain secret process for making asbestos molds, known as the Hoffman process.

The unanimous affirmance by the Appellate Division is conclusive in this court to the effect that these representations were made by the defendant; that they were false, and known to be false; and that Thunhorst, relying upon them, parted with $100.

One William N. Hoffman had a secret process for making asbestos molds. The defendant, Earl V. B. von Brandenburg, was general manager of the Eastern Bond and Security Company, a trade name under which he did business. Hoffman made an agreement ’with von Bradenburg, or his company, whereby the defendant was to incorporate, under the laws of the State of Delaware, a company to be known as the New Method Molding and Metals Company, consisting of one million shares. Hoffman was to have 510,000 shares of this company, and was to place in escrow the formula of his asbestos process until he got some cash. The cash was to be raised by the defendant, von Brandenburg, or his Eastern Bond and Security Company. For this purpose, it was agreed in writing between Hoffman and the defendant that the latter should give sixteen promissory notes of ■ $10,000 each, amounting in all to $160,000, payable to the new corporation, in exchange for stock. The asbestos formula was not to be given up until the notes were paid.

Up to this point everything was paper; no tangible assets in the asbestos company.

The geographical territories of the United States were divided into eighteen districts, and the defendant was to incorporate a company in each district consisting of a million shares at the par value of one dollar per share. Each of the companies was to pay in to the parent Delaware Company a certain portion of its stock for the right to use the asbestos process in its district. Pursuant to this plan, a subsidiary corpora-. tion, known as the New York New Method Molding and Metal Corporation, was organized under the laws of the State of Delaware, consisting of one million shares of a par value of one dollar. A like corporation, known as the Philadelphia New Method Molding and Metals Corporation, was also created. These companies hereafter will be referred to as the New York Company and the Philadelphia Company.

All that these two subsidiary companies had to represent the one million capital stock each was the right to use the secret asbestos formula in the company’s particular territory, upon turning over a portion of its stock to the parent Delaware Company.

The secret formula, or process, was in the custody of-a bank in Buffalo,. waiting the payment of the sixteen promissory notes of the defendant made by his security company. Until thé Delaware Company, of which Hoffman, the owner of the process, was president, received $160,000, he was not going to give up the formula, or permit the company or companies to use it. The right to the asbestos molding formula was the principal, or only, asset of all these companies. Without it, business could not be done.

The money was never paid. The first two notes went to protest, and the right to possess and use the formula never came into existence. The stock, therefore, of the parent Delaware Company, the New York Company, and the Philadelphia Company became just so much valueless printed paper. The Philadelphia Company had sold some of its stock, and apparently had the cash or its equivalent. The purpose of its incorporation, however, so far as this case goes, was at an end, through failure of the defendant to keep his agreement with Hoffman.

The defendant, however, kept on selling the stock. He had an office in New York City where he sold the paper of all these companies, knowing that he and they had forfeited rights to the formula, and particularly that the New York Company owned no asbestos mines.

At this point it is well to note that the defendant is not charged with having sold stock in the New York Company by means of false representations. Nothing is said about stock in the indictment. The charge is that he obtained $100 from William A. Thunhorst by falsely representing that the New York Company owned asbestos mines at Staten Island, and had the right to manufacture the asbestos into molding machinery. The defendant, or his agents, showed Thunhorst a farm on Staten Island on which they said was a vein of asbestos owned by the New York Company; and they showed him photographs of the shaft leading into the asbestos mines. This shaft turned out to be a part of the road, a highway on Staten Island. There were no asbestos mines at the place indicated, and the New York Company had no rights to any such properties.

That the defendant, or his agents, may have given to Thunhorst certificates of stock in any company thereafter, is entirely immaterial to the charge. The crime was complete when Thunhorst parted with his money, relying upon false representations deliberately made to cheat him. When the defendant had the complainant’s money, he sent him in August of 1919 a certificate of stock. His letter reads as follows:

“ Dear Mr. Thunhorst:

“ Herewith please find your certificate for 50 shares. Do not forget to mail in the receipt.

“ EASTERN BOND AND SECURITIES CO.

“ E. V. B. von Brandenburg,

General Manager.”

The inclosed certificate reads as follows:

Assessable “Full Paid and Non-

“ Number 196

“ Shares 50

“ Capital Stock, $1,000,000

“ New York New Method Molding and Metals “ Corporation

“ This is to Certify that William A. Thumhorst is the owner of ... .Fifty....Shares of the Capital Stock of

NEW YORK NEW METHOD MOLDING AND METALS CORPORATION

transferable only on the books of the Company by the holder hereof in person or by duly authorized Attorney upon surrender of this Certificate properly endorsed.

Witness the seal of the Company and the signatures of its duly authorized officers, affixed this Fourth day of August 1919

“ G. FREDERICK MUNNS JR. FRED PERLE

Secretary

“ Treasurer

Vice President

It was 50 shares of the New York stock which were delivered to Thunhorst. He became a stockholder in the New York Company. Of this there can be no question. The undisputed fact cannot be changed or gainsaid by the circumstance of giving Thunhorst in July a receipt for a two-dollar installment on which was stamped with a rubber stamp the words Philadelphia New Method and Molding Corporation.” The defendant was out to sell the stock of these various companies, and to get money by this means. As all the stock was equally valueless, it made little or no difference which was given to the customer, whether the receipt was stamped Philadelphia Company,” “ New York Company,” or Delaware Company.” Thunhorst subsequently received the stock of the New York Company, and there was never any claim that this was a mistake. There could not be a mistake if Staten Island figured in the transaction, as this was not within the territory of the Philadelphia Company.

The underlying facts of this case, which must be fully understood before we come to the charge of the trial justice, are: That Staten Island was within the territory of the alleged New York corporation; that the false representations regarding ownership of asbestos mines on Staten Island, and the right to use the Hoffman process by the New York Company, was the inducing cause for giving the defendant $100; that for this $100 Thunhorst received stock in the New York Company, and became a stockholder therein, and not in the Philadelphia Company; that even if he had received no stock, or had purchased the Philadelphia stock, or had been given a certificate of health, a certificate of birth, or anything else, it would have no material bearing upon this case, and could not wipe out a crime already committed. The crime charged was not the purchase of valueless stock about which there had been false representations; the crime charged was the procuring of $100 by false representations regarding ownership and rights of a New York corporation. What, therefore, was given after the obtaining of the money was of no consequence, provided, of course, that the money was obtained by the false representations alleged.

The solvency of the Philadelphia Company, or the amount of its assets, was, therefore, immaterial and irrelevant, and was properly excluded from the evidence by the trial justice. Much that was said during the trial may have been unnecessary, and may have indicated that the trial justice was wavering somewhat in his own mind regarding the nature of the case and the point of view of the prosecution; but the fundamental facts, as I have above stated them, were always in mind and fairly presented to the jury.

So long as we have jury trials, many things will be said and done, in the pull and push of the contest, which on a calm review will be considered unnecessary and unwise. These matters, however, should not disturb the result unless some substantial principle of law has been violated.

During the course of the trial the judge stated, somewhat unnecessarily, and apparently without -then fully appreciating the full scope and meaning of the charge, that if the complainant bought Philadelphia stock, as distinguished from New York, the action would not lie. What I have already stated is sufficient to show that in this particular the judge was in error. The error, however, would have been in favor of the defendant, if there had been any evidence that Thunhorst had purchased Philadelphia stock. As the evidence was conclusive that he had purchased New York stock, the statement was meaningless. The justice might just as well have said the action would not lie if the complainant had bought sheep. The judge in this case would have been justified in charging as a fact that Thunhorst paid $100 and received New York stock, and became a stockholder in the New York Company. There was no question of fact on this point to be left to the jury.

However, in his main charge, he in substance repeated the statement made during the trial, that if Thunhorst bought Philadelphia stock, the defendant was not guilty. But when the jury came in for further instructions, the judge modified his charge in this particular, and told them in substance that while he left it open for them to decide whether Thunhorst bought Philadelphia or New York stock, yet if he did purchase Philadelphia stock, the defendant, nevertheless, would be guilty, if Thunhorst was induced to buy it by reason of the false representations of the defendant as alleged. Even this statement was too favorable to the defendant. He cannot complain of it. Whichever stock was purchased or received is of no consequence, as I have stated. The gravamen óf the complaint was the false representations above mentioned. Assuming, however, that the judge was right in thus favoring the defendant by leaving the nature of the purchase as an open question for the jury, he was at the same time right regarding his conclusion. If Thunhorst bought Philadelphia stock, or was induced to buy it by reason of the false representations made regarding asbestos mines on Staten Island, and rights to use the asbestos formula, the crime alleged was proved. His folly in relying on such representations is no defense; it is the inducement to the crime.

What Thunhorst got for his hundred dollars in the form of printed paper is immaterial. Whatever confusion was created by the methods and schemes of the defendant, cannot be pressed into law points by able counsel, to keep him from the force of the facts. A rubber stamp cannot make true that which is essentially false. Thunhorst was a stockholder in the New York Company. He purchased New York stock, and got it. The consequences which might follow “ if ” Thunhorst bought Philadelphia stock was of no importance and entirely immaterial. If ” makes no difference when there cannot from the nature of things be any “if.”

The judgment of conviction appealed from should be affirmed.

His cock, Ch. J., Cardozo, McLaughlin, Andrews and Lehman, JJ., concur; Pound, J., absent.

Judgment of conviction affirmed.


source: Caselaw Access Project

author: Hiscock, Ch. J.

license: Public Domain

text:
    The People of the State of New York, Respondent, v. Alexander R. Crossman, Appellant.
    Crimes — maintenance of “ bucket shop ”— accomplices — erroneous ruling that witnesses who took active part in business with knowledge that it was unlawful were not accomplices — erroneous holding that acts done by witnesses were subsequent to and detached from transaction complained of — evidence sufficient to warrant finding that witnesses were part of organization and parties to a conspiracy to violate the law.
    1. An accomplice is one who at common law might nave been convicted either as a principal or as an accessory before the fact.
    2. On trial of an indictment charging defendant with the crirpe of violating section 390 of the Penal Law, which relates to and prohibits the maintenance and conduct of “ bucket shops,” it was error for the trial judge to rule as matter of law that two witnesses were not accomplices and to refuse to submit to the jury their status in that respect, where the evidence showed, as to one, that in addition to allowing the use of his name in what purported to be a bona fide corporation and accepting the presidency. thereof, he was present in the office, talked with customers, made and indorsed checks and affixed his name to purported confirmation letters sent to customers and to market letters sent to prospective customers and in addition at times took and kept part of the money paid in by customers on transactions carried on with the establishment, and as to the other, that as her principal duty she had charge of the books of the concern whereon were carried fictitious and misleading accounts and also at times received money paid in by customers and made out receipts therefor, and both understood perfectly well that for some time before the occurrence of the particular event complained of the business being carried on and in the conduct of which they were taking part was unlawful.
    3. A holding that, in the specific transaction upon which rests the conviction, there was a precise completed agreement made between the customer and the defendant for the purchase of the stocks in question, and that thereby the contract was made and perfected, and that the acts done by each of these witnesses in connection with these transactions were subsequent to and detached from the making of the contract and that, therefore, neither witness was a party to it, places too narrow an interpretation upon the words of the statute and excludes acts which were part of the making of the contract. There is no conclusive evidence of any contract by the customer until he came into the office and ordered the stocks and paid his money for margins. In the case of one transaction this money passed into the hands of one witness, who kept part of it and who, presumably, signed letters confirmatory of both transactions. In one transaction the money passed through the hands of the other witness and she made out receipts for it, and one of those receipts recited that this money was “to be used as margin in this account for the purchase and sale of securities,” and in addition §he entered the transactions upon the books of the company. A jury could find that these acts were so related to the transactions whereby these particular contracts were made that these witnesses, with their guilty knowledge of the crime which was being committed, assisted in committing it and were accomplices.
    4. Beyond this, with entire knowledge of its criminal purposes, a jury could say that each of these witnesses became, some time before the transactions in question, part of the organization whose purposes were to fleece victims by bucket shop methods, and in addition could find from the facts a conspiracy to which the witnesses were parties generally to strip any and all victims who might come along and for that purpose to make with any one of them a contract specified and forbidden in the statute under which this defendant has been convicted. These witnesses thereby became parties to and were criminally responsible for any transaction within the scope of the conspiracy conducted by this organization or any member of it in carrying out its purposes and were parties to and accomplices in respect of the transaction under review and the court should so have charged. (People v. Swersky, 216 N. Y. 471, explained.)

      People v. Crossman, 211 App. Div. 673, reversed.
    (Argued June 12, 1925;
    decided October 6, 1925.)

      Appeal from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered February 6, 1925, which affirmed a judgment of the Court of General Sessions of the Peace in the county of New York, rendered upon a verdict convicting the defendant of the crime of a violation of section 390 of the Penal Law.

      George Z. Medalie for appellant.
    The court erred in refusing to charge, as requested, on the accomplice character of Livingston and Erlich. (People v. Zucker, 20 App. Div. 363; 154 N. Y. 770; People v. Kupperschmidt, 237 N. Y. 463.) The existence of a conspiracy makes every party thereto a principal, and, therefore, an accomplice in the perpetration of every crime committed within its scope. (People v. Chapman, 224 N. Y. 463; People v. Collins, 234 N. Y. 355; People v. Giusto, 206 N. Y. 67; People v. Giro, 197 N. Y. 152; Ruloff v. People, 45 N. Y. 213; People v. Demasco, 240 N. Y. 170; People v. Swersky, 216 N. Y. 471; People v. Sweeney, 213 N. Y. 37; 161 App. Div. 221; People v. Katz, 209 N. Y. 311; People v. Elliott, 155 App. Div. 486; People v. Doyle, 107 Misc. Rep. 268.)

      Joab H. Banton, District Attorney (.Robert C. Taylor of counsel), for respondent.
    The alleged accomplices, Livingston and Erlich, could not be stamped as accomplices unless it appeared by testimony that they were principals, as defined by Penal Law, section 2, in the very act of “ making ” for which defendant was convicted. (People v. Lowe, 209 App. Div. 498; People v. Toohil, 208 App. Div. 174.) The two witnesses' were not principals; hence, they were not accomplices. (People v. Zucker, 20 App. Div. 363; 154 N. Y. 770.) The guilty knowledge of the alleged accomplices established nothing. (People v. Swersky, 216 N. Y. 417; People v. McGuire, 135 N. Y. 639; People v. Zucker, 20 App. Div. 363; 154 N. Y. 770; People v. Cohen, 223 N. Y. 406; People v. Elliott, 155 App. Div. 486.)
   Hiscock, Ch. J.

The appellant has been convicted of the crime of violating section 390 of the Penal Law. This section relates to and prohibits the maintenance and operation of what are ordinarily known as “ bucket shops and transactions such as are carried on by those institutions. There are two counts in the indictment, each under a separate provision of the section, but on the trial consideration of one of these was dismissed and the defendant was convicted simply ancT solely under subdivision 1 of said section which, so far as material, reads as follows:

Any person * * * whether acting in bis, their or its own right, or as the officer, agent, servant, correspondent or representative of another, who shall, (1) make or offer to make, or assist in making * * * any contract respecting the purchase or sale either upon credit or margin of any securities * * * shares in any corporation or association * * * intending that such contract shall be terminated,, closed or settled* according to, or upon the basis of the public market quotations or prices made on any board of trade or exchange * * * without intending a bona fide purchase or sale of the same shall be guilty of a felony.

On evidence which on its face fully justified its action 'the jury found that the defendant was guilty of violating this section and that action has been unanimously affirmed by the Appellate Division. The evidence, however, upon which' appellant was convicted was largely supplied by two witnesses named Livingston and Erlich and, by exceptions which were sufficient for that purpose, the question was presented whether these witnesses were not accomplices and their evidencé, therefore, subject to all of the limitations and infirmities which are nnposed by law upon the evidence of accomplices. The trial court not only refused to submit to the jury the question whether they were such accomplices but affirmatively ruled as matter of law that they were not and we are, therefore, led to a consideration of the question whether he was correct in his view of their status.

For the purpose of carrying on his obnoxious and unlawful operations the defendant organized a corporation which was known as S. M. Livingston & Company, Incorporated. The title which was adopted thus employed the name of one of the witnesses referred to. The corporation was a mere shell and cover, most of the small number of shares of stock being issued to some person who is assumed to have been a dummy for the defendant and one share being issued to the witness, Livingston, who was made president of the corporation. The transactions conducted by it with one inconsequential 'exception were purely and wholly of the bucket shop order. No stock was actually bought or sold on the orders of customers whose moneys were taken but, at the close of each day, from some newspaper market report a buying customer was charged with the highest price at which his stock had sold during the day and a selling 'customer credited with the lowest price at which his stock had sold. In order to carry on these unlawful transactions and maintain an appearance of reality a customer was charged or credited with amounts thus made up against two fictitious accounts which were carried on the books and it is not too much to assume inview of the regular custom of stockbrokers, that transcripts of these fictitious accounts were furnished to customers and settlements made on the faith of them.

Livingston was undoubtedly more or less under the domination and orders of the defendant but nevertheless he performed substantial acts in carrying on this business. In addition to allowing the use of his name in what purported to be a bona fide corporation and accepting the presidency thereof, he was present in the office, talked with customers, made and indorsed checks and affixed his name to purported confirmation letters sent to customers and to market letters which were sent out presumably for the purpose of alluring prospective customers into the trap which had been prepared for them and, in addition to all of this, at times he took and kept part of the money which was paid in by customers on the transactions carried on with this establishment. The witness Erlich as her principal duty had charge of the books of the concern whereon were carried the fictitious and misleading accounts to which reference has been made and she also at times received the money which was paid in by customers and made out receipts therefor. She was not a novice in matters of this kind and apparently, after leaving this office, united with Livingston ■in organizing another similar business. Both of these people understood perfectly well for some time before the occurrence of the particular transactions under review in this case that the business which was being carried on and in the conduct of which they were taking part was of the unlawful character prohibited by the Penal Law.

The specific transactions upon which rests the conviction of appellant occurred with a man named. Eibach. This man on two separate occasions attempted to purchase through Livingston & Company a small amount of stock and made payments on account of such attempted purchases. Livingston was present in the office when Eibach made his first payment and, as the jury could find, wrote him a letter pursuant to the general plan which has been outlined advising him of the purported purchase of the stocks. The money paid by Eibach on the second transaction apparently passed through Livingston’s hands and he kept part of it. The witness Erlich was present in the office when part of these transactions with Eibach took place and some of the money passed through her hands and she drew receipts for part of the payments and one of which at least represented that the money was being received as a margin “ for the purchase and sale of securities.” Still later she made, in the books, the requisite fictitious and false entries to give the transactions an appearance of reality.

On such evidence as this it was error for the trial judge to rule as matter of law that these witnesses were not accomplices and to refuse even to submit to the jury1' the question of their status in that respect.

An accomplice is one who at common law might have been convicted either as a principal or as an accessory before the fact. (People v. Swersky, 216 N. Y. 471, 476.) A principal is defined as “ A person concerned in the commission of a crime, whether he directly commits the act constituting the offense or aids and abets in its commission,” (Penal Law, sec. 2) and, in addition to that, the act under which defendant has been convicted provides that " Any person, * * * whether acting in his, * * * own right, or as the * * * servant, correspondent or representative of another who shall, assist in making ” a contract such as we are considering is guilty of a felony.

I think that each of the two witnesses who have been named might be found to have assisted in making the specific contracts involved in this prosecution. In the court below it seems to have been held that there was a precise, completed agreement made between Eibach and the defendant for the purchase of the stocks in question and that thereby the contract was made and perfected, and. that the acts done by each of these witnesses in connection with these transactions were subsequent to and detached from the making of the contract and that, therefore, neither witness was a party to it. I think that this view places too narrow an interpretation upon the words of the statute and excludes acts which were part of the making of the contract. Of course criminal statutes are to be construed strictly, but in interpreting the words of which they are composed we ought not-to adopt a meaning which will make them sterile and ineffective. There is no conclusive evidence of any contract by Eibach until he came into the office and ordered the stocks and paid his money for margins. In the case of one transaction this money passed into the hands of the witness Livingston, who kept part of it and who, presumably, signed letters confirmatory of both transactions. In one transaction the money passed ■ through the hands of the witness Erlich and she made out receipts for it, and one of those receipts recited that this money was “to be used as margin in this account for the purchase and sale of securities,” and in addition-she entered the transactions upon the books of the company. We think a jury could find that these acts were so-related to the transactions whereby these particular contracts were made that these witnesses, with their guilty knowledge of the crime which was being committed, assisted in committing it and were accomplices.

But beyond this there is another theory under which, in my opinion, the witnesses may be held to have been -accomplices in respect of each transaction and in the commission of the crime then being accomplished. Possessing entire knowledge of its criminal purposes, a jury could say that each of these witnesses became, some time before the transactions in question, part of the organization whose purpose it was to fleece victims by bucket shop methods. Each one had an appointed place in the organization and in the operation of the machinery by which unsuspecting people were drawn into the trap and defrauded of their money. The part which each one understanding^ played in this scheme has been sufficiently referred to. It is immaterial that somebody else possessed the “ master mind ” or that these witnesses were tools or agents or employees. A master mind. is no protection to the tool who yields to it and engages in the commission of what he knows is a crime. The criminal law does not recognize the rules of principal and agent as an exoneration of the latter from liability and the orders of a superior do not erect any protective bulwark between the employee or tool who engages in the commission of •'a felony and responsibility for • the part which he plays no matter how subordinate it may be.

The criminal organization to which these witnesses became parties, as a jury might find, was unlimited in its scope and purpose. It was not created for the purpose of fleecing any particular person but for the purpose of defrauding any person who was innocent enough to come within the area of its operations. Doubtless these facts might have been utilized for the purpose of a prosecution under that subdivision of the section which has been referred to and which relates to the maintenance and operation of a bucket shop. But that was not the only effect which might be. given to them. A jury in our opinion could find from these facts a conspiracy to which the witnesses were parties generally to strip any and all victims who might come along and for that purpose to make with any one of them a purported contract specified and forbidden in subdivision 1 under which this defendant has been convicted. E that view is correct these witnesses became parties to and were criminally responsible for any transaction within the scope of the conspiracy conducted by this organization or any member of it in carrying out its purposes. Under this reasoning they were parties to the particular transactions by which Eibach was fleeced and in which to some extent, as I have pointed out, they took part and as to which, within the rules already laid down, a jury could say that ’they became accomplices. If there were any doubt of the principles which we are applying to this case that doubt would be removed by' a careful consideration of what was written by Judge Cardozo in the Swersky case already referred to and where it was held in substance that a person who became a party to a general arrangement and conspiracy of ice cream dealers to poison the horses of all obnoxious competitors was an accomplice in respect of a crime committed in pursuance of said conspiracy in poisoning the horses of a particular dealer, although he had no part in the commission of that crime and did not in fact know of it until after it was committed. In endeavoring to utilize that case as an authority for the proposition that these witnesses were not accomplices because of what was said in respect of an alleged accomplice named Levinson we think that the district attorney overlooked what was actually written and held. It was held that although this witness might have been a party to the conspiracy prior to the commission of the particular crime under consideration “ he receded from the conspiracy ” and the crime was committed without him. Recession may not be any atonement for crimes already perpetrated but it certainly is an escape from responsibility for those thereafter committed.

If the jury should find that the operations carried on by Livingston & Company embodied and amounted to a conspiracy such as I have outlined and the witnesses in question had become parties to it then, as matter of law, they were accomplices in respect of the transaction under review and the court should so have charged.

For these reasons we think that substantial error was committed by the trial court and that there must be a new trial.

McLaughlin, Crane, Andrews and Lehman, JJ., concur; Cardozo, J., concurs in result; Pound, J., absent.

Judgments reversed, etc.


author: Pound, J.

text:
    In the Matter of the Application of Checker Cab Manufacturing Corporation et al., Respondents, against Albert Heller et al., Appellants.
    Arbitration —■ contract — courts without power to compel arbitration of abstract question — arbitration of question whether contract has been violated not enforced after termination of contract where decision is sought only as basis to right - to rescind.
    1. Courts are without power to compel arbitration of the question ■ whether a contract has been violated after that question has become only an incidental element of the entire controversy between the parties.,
    2. Where, by the terms of an arbitration clause in an agreement, the inquiry is limited to the question whether there has been a violation of the contract and the purpose in seeking a decision on that question is to lay the foundation for a termination of the contract before it expires by its terms in case of a finding of violation, enforcement of the arbitration clause will not be directed where the contract has been terminated either by rescission or by limitation, thus making •the question of violation, so far as the purpose of the arbitration agreement is concerned, academic and abstract.

      Matter of Checker Cab Mfg. Corp. v. Heller, 212 App. Div. 873, reversed.
    (Argued October 5, 1925;
    decided October 20, 1925.)
    Appeal, by permission, from an order of the Appellate Division of the Supreme Court in the first judicial department, entered February 27, 1925, which unanimously affirmed an order of Special Term directing that the parties herein submit to arbitration a controversy as to whether there has been a violation of a contract between them.

      Nelson Ruttenberg and Norbert Ruttenberg for appellants.
    The petitioners, Checker Cab Manufacturing Corporation and Weiss Polansky Becker Corporation, have no right to demand any arbitration under the contract of September 28, 1922. (Matter of Loew’s Buffalo Theatres, Inc., 233 N. Y. 495; Cream of Wheat Co. v. Crist Co., 222 N. Y. 487; Matter of General Silk & Imp. Co., 200 App. Div. 786.) The Arbitration Law is inapplicable to this proceeding because there is not such an agreement to arbitrate which comes within the provisions of the Arbitration Law. (Matter of Fletcher, 237 N. Y. 440; Matter of American Ins. Co., 208 App. Div. 168; Williams v. Hamilton F. Ins. Co., 194 N. Y. Supp. 798; Toledo S. S. Co. v. Zenith Transp. Co., 184 Fed. Rep. 391; Matter of Berkovitz, 230 N. Y. 261.)

      Samuel Gottlieb and Max D. Steuer for respondents.
    The arbitration agreement between the parties comes within the provisions of the Arbitration Law and is enforcible thereunder. (Matter of Fletcher, 237 N. Y. 440; Matter of Am. Ins. Co., 208 App. Div. 168; Matter of Berkovitz v. Arbib & Houlberg, 230 N. Y. 261; Matter of Priore v. Schermerhorn, 237 N. Y. 16; U. S. Asphalt Refining Co. v. Trinidad Lake Petroleum Co., 222 Fed. Rep. 1006.)
   Pound, J.

The application for an arbitration arises out of a written contract between the parties. The portion thereof relating to arbitration is as follows:

“ This contract shall continue and be in force until December Thirty-first, Nineteen Hundred and Twenty-four (December 31, 1924) during all of which time it shall not be cancelled by either of the parties hereto, .unless the other parties violate the provisions thereof, but neither the first nor second parties shall have the right to cancel on account of any violation by the other of them; and, in the event a violation is charged, the party violating shall have the right to immediately purge itself of such violation, or submit the question of such violation to arbitration, in which event the first and second parties shall select one arbitrator, the third party shall select an arbitrator, and the two jointly shall select a third; and in the event the said arbitrators find that the contract has been violated, and the violator does not immediately purge itself of such violation, then if either' the first or second party has violated the same, the third party may terminate, or if the third party has violated same, either the first or second party may terminate same upon giving notice in writing of the intention to cancel by a letter addressed to the other parties, and sent by registered mail, providing the notice of such intention to cancel shall be given ninety (90) days before the time fixed for cancellation.”

The allegations of the petition are in substance as follows:

On September 28, 1922, the Checker Cab Manufacturing Corporation and Weiss Polansky Becker Corporation and Albert Heller entered into the agreement containing the foregoing provisions for arbitration; subsequent to the 28th of September, 1922, the Mogul Finance Corporation assumed the obligations thereof; Checker Cab Manufacturing Corporation and Weiss Polansky Becker Corporation duly performed the said agreement on their parts; on or about the 12th day of July, 1923, ’ Albert Heller and Mogul Finance Corporation violated the terms of the said agreement on their part in that they failed and refused to pay to the Checker Cab Manufacturing Corporation moneys then due and owing and refused to accept notes for discount which under the terms of the said agreement they were obligated to do; upon this breach of the contract the petitioners demanded that they purge themselves of their breach, which they refused to do. Petitioners demanded pursuant to the terms of the said contract, but after the expiration of the term of the contract and on January 8, 1925, that the question of the violation thereof be submitted to arbitration but Heller and Mogul Finance Corporation failed, refused and declined to name any arbitrator or submit the question of their breach of the said agreement to arbitration. The question is whether the court may under Arbitration Law, section 3, order appellants to proceed to arbitration on the question as to whether there has been a violation of the contract.

Appellants contend, first, that they are the only parties to the contract who are entitled to demand any arbitration thereunder for the reason that they are the parties charged with violating its provisions and that under the terms of the contract they have the exclusive right to demand arbitration, and, secondly, the agreement to arbitrate, even if mutual, does not come under the provisions of the Arbitration Law for the reason that the agreement is, not to arbitrate the whole difference between the parties but only to arbitrate a collateral fact or a particular question, i. e., the question whether the contract has been violated.

Assuming, without passing on them, that these objections may not prevail, we find an insuperable objection to the enforcement of the arbitration clause of the contract. The moving parties rely on an alleged violation occurring on the 12th day of July, 1923, but they delayed to apply for arbitration until January 8, 1925. Meanwhile they had, as they allege in the petition, rescinded the contract. The contract expired by its terms on December 31, 1924. Although they rescinded the contract without prejudice to all rights on the part of the Checker Cab Manufacturing Corporation and the Weiss Polansky Becker Corporation because of the violation and repudiation and expressly reserving them ” and although the contract provides that it “ shall be automatically extended from year to year after December 31, 1924, unless either of the parties hereto advises the others thirty days before December 31, 1924, and each subsequent year of their intention to cancel on said December 31,” it cannot be claimed by respondents that the contract was in force after December 31, 1924. It was terminated either when they rescinded or attempted to rescind it or on December 31, 1924. We do not understand that either party contends that the contract was in force after the latter date.

The clause for arbitration limits the inquiry to the question whether there has been a violation and so limits it for a specific purpose. The purpose of obtaining a decision of arbitrators on that question is to lay the foundation for a termination of the contract before it expires by its terms in case of a finding that the contract had been violated. As the case now presents itself, the question of violation, so far as the purpose of the arbitration agreement is concerned, has become academic and abstract. The parties aggrieved cannot terminate the contract under the arbitration clause after its term has expired. A determination of arbitrators that appellants had violated the contract would now create no right to terminate under the contract. Termination is already a fact. The parties agreed to settle a controversy as to a violation of the contract only in connection with a claim of right to rescind the contract while it was still operative. Respondents now seek to have the bare question of their right to rescind determined. Such a determination might be useful in connection with future litigation between the parties.

The only question before the court is as to the right of the respondents to go to- arbitration on the question of violation and no other question has been considered. We hold merely that the court is now without power to compel arbitration after that question has become an incidental element of the entire controversy between the parties.

Orders reversed, with costs in all courts, and application denied, with ten dollars costs. ■

His cock, Ch. J., Cardozo, McLaughlin, Crane, Andrews and Lehman, JJ., concur.

Orders reversed, etc.


text:
    In the Matter of the Claim of Flora Lerner, Respondent, against Rump Bros., et al., Appellants. State Industrial Board, Respondent.
    Workmen’s compensation — master and servant — death from disease developed during course of employment —• award not warranted unless inception of disease is assignable to determinate or single act of a catastrophic or extraordinary nature.
    1. Two concurrent limitations have been placed on the right to recover an award under the Workmen’s Compensation Law when a disease, not the natural and unavoidable result of the employment, is developed during the course thereof. The inception of the disease must be assignable to a determinate or single act, identified in space or time and it must also be assignable to something catastrophic or extraordinary. (Matter of Jejfreyes v. Sager Co., 198 App. Div. 446; 233 N. Y. 535; Matter of Connelly v. Hunt Furniture Co., 240 N. Y. 83, followed.)
    2. Where the duties of an employee necessitated his going from a warm room into a refrigerator and staying therein for ten minutes, as a result whereof, it is claimed that he developed a cold resulting in his death, an award to dependents, under the Workmen’s Compensation Law, on the theory that death was due to an accidental injury arising out of his employment, cannot be sustained. The exposure, although occurring at a definite time and place, was not catastrophic or extraordinary and the resulting cold would present itself as a disease and not as an accident.

      Lerner v. Rump Bros., 212 App. Div. 747, reversed.
    (Argued October 6, 1925;
    decided October 20, 1925.)
    Appeal from an order of the Appellate Division of the Supreme Court in the third judicial department, entered May 28, 1925, affirming an award of the State Industrial Board made under the Workmen’s Compensation Law.

      Merwyn H. Nellis for appellants.
    A chill received during a ten-minute sojourn in a refrigerator is not an injury within the meaning of the act. (Jeffreyes v. Sager, 198 App. Div. 446; 233 N. Y. 535; Richardson v. Green

      berg, 188 App. Div. 248; Connelly v. Hunt Furniture Co., 240 N. Y. 85; Lyons v. Woodilee C. & C: Co., [1916] A. C. 719; Eke v. Hart Duke, [1910] 2 K. B. 677, 685; Ismay, Imrie & Co. v. Williamson, [1908] A. C. 437; McMillan v. Singer Sewing Machine Co., [1913] A. C. 346; Martin v. Manchester Corporation, 5 B. W. C. C. 259; Innes v. Kynoch, [1919] A. C. 765.)

      Albert Ottinger, Attorney-General (E. C. Aiken'oí counsel), for respondents.
    Claimant’s husband died from the effects of an accidental injury. (Brown v. Watson, Ltd., 7 B. W. C. C. 259; Glasgow Coal Co., Ltd., v. Welsh, 8 B. W. C. C. 635; 9 B. W. C. C. 371; Drylie v. Alloa Coal Co., 6 B. W. C. C. 398.)
   Pound, J.

The State Industrial Board made findings herein as follows: On the morning of June 2,1923, Maurice Lerner was working for his employer in his employer’s plant, and while showing fruit and vegetables to a customer of his employer in the refrigerator of said employer’s plant, and because of the sudden transition from the super-heated atmosphere on the outside of said refrigerating plant to the chilly atmosphere in the interior thereof, and as his duties necessitated his remaining in said refrigerator for ten minutes, he received a chill that naturally and unavoidably caused a cold to develop which lowered his disease-resisting power, and as a result, pulmonary edema and cerebral embolism and septic endocarditis developed and caused his death on November 22, 1923; the proximate cause of death being the injury that he received in the refrigerator of his employer’s plant on June 2, 1923. An award made on these findings has been affirmed by the Appellate Division.

The question is whether, on the facts found, the conclusion could be reached that Lerner’s death was due to an accidental injury which arose out of his employment within the meaning of the Workmen’s Compensation Law. Death was due to disease. The disease was not an occupational disease, the natural and unavoidable result of the employment. A distinction exists between accidental injury and disease, but disease may be an accidental injury. The exception arises out of abnormal conditions which must be established to sustain an award. Two concurrent limitations have been placed on the right to recover an award when a disease, not the natural and unavoidable result of the employment, is developed during the course of the employment, although it does not follow that compensation should be awarded in all cases coming literally within these limitations. First, the inception of the disease must be assignable to a determinate or single act, identified in space or time. (Matter of Jeffreyes v. Sager Co., 198 App. Div. 446; 233 N. Y. 535.) Secondly, it must also be assignable to something catastrophic or extraordinary. (Matter of Connelly v. Hunt Furniture Co., 240 N. Y. 83.) The principle has been extended in England to include cases wherein prolonged and unusual exposure, although voluntary in its character, has brought on pneumonia or rheumatism. (Coyle v. Watson, Ltd., [1915] A. C. 1; Glasgow Coal Co., Ltd., v. Welsh, [1916] 2 A. C. 1.) In these cases the exposure was directly related either to an accident or to an emergency independent of accident. The nature of the employee’s risk was abnormal, not usual. The English act refers in terms to disease which is a personal injury by accident.” The English courts have, perhaps for that reason, found it feasible to apply the rule: Whenever the causal connection between occurrence and result be established ” the principle of compensation should prevail, but it has been applied only when the occurrence was out of the ordinary and the result, although not the natural result of exposure, might with little difficulty be linked to the occurrence. In this State the Jeffreyes Case (supra) excludes cases of voluntary prolonged contacts resulting in disease from the field of accidental injuries and somewhat narrows the English rule as broadly stated. In this case a causal connection is sought between the exposure to the cold of the refrigerating plant for ten minutes and the death of Lerner as a result. The temperature of the plant must have been less than the freezing point of fruits and vegetables and the outside temperature was probably not excessive on the 2d day of June. The exposure, although occurring at a definite time and place, was not catastrophic or extraordinary. It was like the exposure to drafts when one is heated while at work or to the change between the cold and wet outside and the warmth inside which is not unfrequently encountered by the workman after coming to his work in inclement weather'. Such contacts of the body with the draft or with the changes of temperature are natural and normal and often unavoidable in the conduct of a business. A resulting cold would present itself as a disease and not as an accident.

While it may be difficult to make nice and exact discriminations between disease as an accidental injury and disease which is neither accidental nor an injury in the common acceptance of the terms, it is not difficult to distinguish a case of ordinary exposure resulting in a cold from a case of emergent, prolonged exposure. The definite event here is the change from a hot room to a cold one, as if one should step out of a hot room into the cold in the winter time without adequate protection. To call the sequent cold an accidental injury would be to distort the fair meaning of the statute and the underlying principle of compensation cases.-

The order should be reversed, award of State Industrial Board vacated and the claim dismissed, with costs in this court and Appellate Division against State Industrial Board.

His cock, Ch. J., Carbozo, McLaughlin, Crane, Andrews and Lehman, JJ., concur.

Order reversed, etc.


text:
    In the Matter of the Petition of Joseph Picone, Appellant, against the Commissioner of Licenses of the City of New York, Respondent.
    New York city — licenses — junkmen — mandamus — licensing officer may not arbitrarily impose limitations, not contained in statute, upon right to do business — application for junk boat license — refusal to issue license to fit person for reasons not contemplated by statute an abuse of discretion — remedy through mandamus.
    1. If an applicant for a license can show that he is a fit and proper person to engage in a licensed business under the provisions of the licensing statute, the licensing officer may not arbitrarily impose limitations not contained in the statute upon his right to do business, and he has a remedy through mandamus to right any wrong which he may suffer.
    2. Where, pursuant to section 51 of the charter of the city of New York (L. 1901, eh. 466), authorizing the board of aldermen to provide for licensing and regulating the business of junk dealers, an ordinance has been adopted defining a “ junk boatman ” asa junk dealer and his place of business as a junk shop and requiring that junk dealers be licensed to engage in business, but nothing therein contemplates that no one shall operate a junk boat other than one who has a junk shop license, nor is there anything therein to justify a limitation of the number of such licensed dealers, the refusal of the commissioner of licenses to issue a junk boat license to a fit and proper person, solely on the grounds that the applicant had no junk shop license and that there was no room for further applicants for junk boat licenses, was an abuse of discretion and a peremptory order of mandamus will issue to compel the issuance of such a license.

      Matter of Picone v. Comr. of Licenses, 214 App. Div. 724, reversed. ,
    (Submitted October 7, 1925;
    decided October 20, 1925.)
    Appeal from an order of the Appellate Division of the Supreme Court in the second judicial department, entered May 15, 1925, which affirmed an order of Special Term denying a motion for a peremptory order of mandamus to compel the commissioner of licenses of the city of New York to issue to the petitioner a junk boat license.

      James P. Kohler for appellant.
    The commissioner acted arbitrarily and without power in refusing the petitioner a license. (People v. Robinson, 126 N. Y. Supp. 546; People ex rel. Lodes v. Dept. of Health, 117 App. Div. 856; Athletic Club v. Wurster, 19 Misc. Rep. 443.)

      George P. Nicholson, Corporation Counsel (Charles J. Druhan and William R. Wilson of counsel), for respondent.
    The commissioner of licenses acting in the interest of the public, has the power to grant or refuse junk boat licenses. (People ex rel. Lodes v. Bd. of Health, 189 N. Y. 187; McKenzie v. McClellan, 62 Misc. Rep. 342; City of New York v. Vandewater, 113 App. Div. 456; Rosenthal v. N. Y., 226 U. S. 260; People v. Rosenthal, 197 N. Y. 394; People ex rel. Schwab v. Grant, 126 N. Y. 473; Yellow Taxicab Co. v. Gaynor, 82 Misc. Rep. 94; 159 App. Div. 893; People ex rel. Wood v. Board of Assessors, etc., 137 N. Y. 202; People ex rel. McMackin v. Board of Police, 107 N. Y. 235; People ex rel. Conners v. Bd. of Education, 197 App. Div. 5.)
   Pound, J.

The board of aldermen of the city of New York has power to provide for licensing and otherwise regulating the business of junk dealers. (Charter, § 51.) The Code of Ordinances of the city of New York ordained by the board of aldermen provides that junk dealers must be licensed in order to engage in the business (Ch. 14, art. 1, § 1), and that all applications for licenses shall be made to the commissioner of licenses in such form and detail as he shall. prescribe. (§ 3.) Article 9, chapter 14, regulates the licensing of junk dealers generally. Culling out the provisions relating to junk boatmen, we find that section 120 defines junkman, junk shop, junk cartman and junk boatman. A junk boatman is defined as a junk dealer and his place of business a junk shop. Section 121 provides that any vessel in the waters of the city used for the purpose of collecting or selling junk shall be deemed a junk boat and the owner thereof a junk dealer, and further provides that in case of a junk boat there shall be but one person on the boat. Section 121 provides that every junk dealer shall pay an annual fee of $20 and that a junk dealer operating a junk boat shall furnish a bond, with sufficient surety approved by the commissioner of licenses, in the sum of $1,000 conditioned for the due observance of all provisions of law and municipal ordinances relating to such dealers. Section 122 provides that no junk boatman shall carry on business at any other place than the one designated in the license therefor, which place of business shall be within the limits ' of the city of New York; that no junk boatman shall ’ knowingly purchase anything from a minor, apprentice or servant or from any person between the hours of six p. m. and seven a. m.; that with certain exceptions no junk shall be sold or disposed of by a junk boatman until the expiration of forty-eight hours after the purchase or receipt thereof; that licensed second hand dealers shall not deal in junk or employ or use a boat for the purpose of collecting junk; that no licensed junk boatman shall be licensed as a pawnbroker or dealer in second hand articles or shall purchase or sell any new goods.

Section 123 requires junk boatmen to keep at their place of business a record of purchases. If the purchase consists of articles from a scow, coal boat, lighter, tug or other vessel, the record shall contain the name of the vessel and the name and residence of the owner thereof.

Section 124 provides for a report of purchases to the police commissioner on notice. Section 125 requires the junk dealer to notify the police as to lost or stolen goods coming into his possession. Section 126 provides for a fine of not more than $200 or imprisonment not exceeding sixty days, or both fine and imprisonment for any violation of these provisions.

Appellant, who had been for some years a junk boatman, applied for a junk boat license to buy and sell junk in the harbor of the city of New York for the year beginning November 1, 1924. His application was refused solely for the reasons (1) that relator had no junk shop license, i. e., a license in addition to and as distinguished from a junk boat license; (2) that there was no room for further applicants for junk boat licenses. He thereupon applied for an order of peremptory mandamus, alleging in his moving papers along with some wholly unnecessary and undignified comments on the methods of the city administration, in substance that the action of the commissioner of licenses was arbitrary, tyrannical and unreasonable in that the ordinance vested ■in him no discretion arbitrarily to limit the number of junk boat licenses or to limit such licenses to those who had other junk shop licenses. The result of this ruling would be to exclude from the business of junk dealer one who sought only the privilege of collecting or selling junk in the harbor of the city of New York by means of a boat, should he apply for a license after the commissioner had granted as many junk boat licenses as he deemed proper.

The commissioner defends his action as a proper exercise of discretion. He alleges that complaints had been made as to thefts committed by licensed junk boats from vessels in the harbor; that various maritime organizations had demanded that all such licenses be revoked; that more than one hundred such licenses had been granted; that he is not satisfied that it is not a mistake to grant such licenses; that appellant’s application was, therefore, denied by him.

The application for a peremptory order of mandamus was denied by the Special Term and its order was affirmed by a divided court by the Appellate Division. The ■question of law is presented by the record whether a fit and proper applicant may be denied a junk boat license for the reasons given. If not, he has a remedy through mandamus to right the wrong which he has suffered. (People ex rel. Lodes v. Dept. of Health of N. Y. City, 189 N. Y. 187, 194. See People ex rel. Klinger v. Rand, 91 Misc. 276.) If an applicant for a license can show that he is a fit and proper person to engage in a licensed -business under the provisions of the licensing statute the licensing officer may not arbitrarily impose limitations not contained in the statute upon his right to do business.

The first question is whether under the terms of the ordinance a junk boat license may be issued only to one already duly licensed as a junk dealer. The ordinance plainly provides that a junk boatman shall be deemed a junk dealer and his place of business a junk shop; that any- vessel in the waters of the city used for the purpose of collecting or selling junk shall be deemed a junk boat and the owner thereof a junk dealer who may have a license. The classification includes under the head of junk shops, not only junk shops with a fixed ’place of business but also junk carts and junk boats operated by one man. The place of business of a junk boatman is his junk boat in New York harbor. No .other requirement as to a place of business is contained in the ordinance. It does not contemplate that no one shall operate a junk cart or a junk boat other than one who has a junk shop license and desires to operate a junk cart or a junk boat in connection therewith. Such a requirement would impose a hardship upon the individual who desired only to collect or sell junk from a cart or boat. Such restriction may be reasonable in view of the general character of the junk business but it is for the board of aldermen and not for the commissioner of licenses to impose it.

So, also, as to the arbitrary limitation of the number of junk boat licenses. As the State, prior to national prohibition, found it expedient to enact legislation to limit the number of saloons to a given ratio to the population of a city, so it may be that the inherent nature of the junk business may be found to be so intimately related to crime as to justify a limitation of the number of licensed dealers. The objection to such limitation is its monopolistic character whereby persons fit and worthy to carry on the business, and engaged in carrying it on without complaint having been made against them., may be deprived of the means of earning an honest livelihood. If the commissioner could limit the number of junk boat licenses to one hundred we see no reason why he might not adopt the policy suggested by him that no licenses whatever should be granted and defend his action by asserting that he is convinced that the licensed junk boatman as such is an enemy to society and a menace to property in the harbor. The same reasoning might, extend to junk shops generally and we would then have prohibition rather than the strict regulation of the business which has been imposed by ordinance. Laws are made by the law-making power and not by administrative officers acting solely on their own ideas of sound public policy, however excellent such ideas may be.

■ As the commissioner does not deny that petitioner is a fit and proper person to operate a junk boat, it follows that his action in refusing a license to the appellant was, however well intentioned, in a legal sense an abuse of discretion.

The orders should be reversed, with costs in all courts, and an order of peremptory mandamus granted, with fifty dollars costs.

Cardozo, McLaughlin and Andrews, JJ., concur; His cock, Ch. J., Crane and Lehman, JJ., dissent on ground that statute requires a place of business other than the junk boat and which is not shown to be possessed by petitioner.

Orders reversed, etc.


author:
Hiscock, Ch. J.
      Lehman, J.

text:
    Oscar L. Richard et al., Copartners Trading as C. B. Richard & Company, Appellants, v. American Union Bank, Respondent.
    Contract — banks and banking — breach of executory contract allocated to place where contract to be performed —■ damages measured by standards of value where breach occurs — contract to establish credit in foreign country in currency of such country — complaint in action to recover damages for delay, measured by decline in market value, properly dismissed — no decline in market value of unit of money in country where it is recognized medium of exchange.
    1. A breach of an executory contract is to be allocated to the place where the contract is to be performed and the damages for such breach are to be measured by the standards of value which prevail! where the breach occurs. (Hoppe v. Russo-Asiatic Bank, 235 N. Y. 37, distinguished.)
    2. The complaint contains two causes of action presenting the same questions of law upon a similar state of facts. It is alleged that plaintiffs had contracts binding upon defendant, whereby defendant was to establish for the benefit of plaintiff in a foreign country a credit in the currency of that country by a certain date; that defendant did not establish such credit at the date agreed upon but did so at a later date, plaintiffs then accepting and taking advantage of such credit; that, in the meantime, the “ market value ” of the currency of the country had declined,' and plaintiffs seek to recover damages for the alleged delay of defendant in establishing such credit measured by the decline in such market value. Since, during the time in question, the foreign money continued to be the same monetary unit, and plaintiffs obtained on the deferred date the same number of such units to which they were entitled on the due date, it is impossible to say that such unit has declined in market value.
    3. Plaintiffs have elected to rest their causes of action upon the alleged decline in market value of something which by its very nature could have no market value in the usual sense at the place where the contract was to be carried out. Presumably the plaintiffs when they made a contract to obtain foreign money or credit abroad intended to use it as money in the country where it is the recognized medium of exchange. Fluctuations in the value of money when measured by currency of this or any other country may not affect the use for which plaintiffs are presumed to have intended it. For damages actually suffered the law afforded other remedy to the plaintiffs. They elected, however, to give to their complaint a form which deprives them of relief which they might otherwise have secured. (Winter v. Am. Aniline Products, Inc., 236 N. Y. 199, distinguished.)

      Richard v. American Union Bank, 210 App. Div. 22, affirmed.
    (Argued May 6, 1925;
    decided October 20, 1925.)
    Appeal from a judgment, entered January 30, 1925, upon an order of the Appellate Division of the Supreme Court in the first judicial department, which reversed an order of Special Term denying a motion by defendant for a dismissal of the complaint and granted said motion.

      Abraham, Rickman and Max Silverstein for appellants.
    The rule of damages to be applied is the recovery of the difference expressed in American dollars between the market price of the foreign currency on the contract date for delivery and availability and the date of actual delivery and availability. (Eq. Trust Co. v. Keene, 232 N. Y. 290; Melzer v. Zimmerman, 118 Misc. Rep. 407; Orlik v. Wiener Bank Verein, 204 App. Div. 432; Gross v. Mendel, 171 App. Div. 237; 225 N. Y. 633; Societe des Hotels le Touquet Paris-Plage v. Cummings, [1922] 1 K. B. 451; Pilkington v. Commissioners for Claims on France, 2 Knapp P. C. 7; Di Ferdinando v. Simon, Smits & Company, Ltd., [1920] 3 K. B. 409; Sokoloff v. Nat. City Bank, 239 N. Y. 158; Hoppe v. Russo-Asiatic Bank, 235 N. Y. 37.) If the transactions described in the complaint constitute “ executory ” contracts for transmission or transportation, then the rule of damages is the same. (2 Sedgwick on Dam. 623, § 854; Ward v. N. Y. C. R. R. Co., 47 N. Y. 29; Gravenhorst v. Zimmerman, 236 N. Y. 22.) The determination by the Appellate Division in the case at bar that to recover damages for failure to make timely delivery of foreign money special damage must be alleged and proven is wholly erroneous. (Hoppe v. Russo-Asiátic Bank, 235 N. Y. 37.) The acceptance by the plaintiffs of delivery of the foreign currency at a date much later than the contract date constitutes no waiver of plaintiffs’ right to sue and recover general damages. (Deeves & Son v. Manhattan L. Ins. Co., 195 N. Y. 324; Crocker-Wheeler Co. v. Varick Realty Co., 104 App. Div. 568; Ripley v. Ætna Ins. Co., 30 N. Y. 136; Stenton v. Jerome, 54 N. Y. 480; McKnight v. Dunlop, 5 N. Y. 537; New York Rubber Co. v. Rothery, 107 N. Y. 310; Chapman v. Fowler, 132 App. Div. 250; Reading Hardware Co. v. City of New York, 129 App. Div. 292; Mohn v. N. Y. & P. S. C. Co., 145 N. Y. Supp. 116.) In any event the judgment and order appealed from must be reversed because the complaint alleges a cause of action for breach of contract. (Winter v. American Aniline Products, Inc., 236 N. Y. 199.)

      Frederick T. Kelsey, Paul H. Welch and Charles C. Pearce for respondent.
    The complaint fails to state any facts from which any damages sustained by the plaintiff can properly be inferred. (Loudon v. S. C. Taxing Dist., 104 U. S. 771; Strohmeyer & Arpe Co. v. Guaranty Trust Co., 157 N. Y. Supp. 955; Sokoloff v. Nat. City Bank, 239 N. Y. 158; Hoppe v. Russo-Asiatic Bank, 235 N. Y. 37; Gross v. Mendel, 171 App. Div. 237; 225 N. Y. 633.) A cable or wireless transfer transaction constitutes an executory contract as distinguished from a sale. (Equitable Trust Co. v. Keene, 232 N. Y. 290; Gravenhorst v. Zimmerman, 236 N. Y. 22; Safian v. Irving National Bank, 236 N. Y. 513; Legniti v. Mechanics & Metals Nat. Bank, 230 N. Y. 415; Atlantic Com. Co. v. Zimmerman, 182 App. Div. 862; Chemical Nat. Bank v. Equitable Trust Co., 201 App. Div. 485; Goepel v. Zimmerman, 199 App. Div. 915.)
   Hiscock, Ch. J.

Judgment has been rendered dismissing the complaint on the ground that it did not set forth a cause of action. It contains two purported causes of action. In the first of these, in addition to necessary formal allegations, the complaint alleges that the plaintiffs made a contract with the defendant’s predecessor, and whose liabilities the defendant has assumed, whereby in consideration of the payment of a substantial sum of money said bank agreed to establish for the benefit of plaintiff in Bucharest a credit for two,million lei by a certain date; that the bank did not establish said credit at said date but did so at a considerably later date, plaintiffs then accepting and taking advantage of the credit; that in the meantime the “ market value ” of lei had declined and plaintiffs seek to recover damages for the alleged delay of the bank in establishing said credit, measured by said alleged decline in the market value of lei.

The second cause of action involves similar facts, it there being stated that the same bank in consideration of the payment of a certain sum of money agreed to establish for the benefit of plaintiffs with a banking institution in Agram, Jugo Slavia, credit for a certain amount of kronen by a certain date; that it failed to make timely performance of its contract but did thereafter establish said credit which plaintiffs accepted and took advantage of and there is alleged to have been a decline in the market value of kronen for which plaintiffs seek to recover damages.

The two causes of action present precisely similar questions of law and, therefore, in our discussion, merely for convenience, we shall consider the first purported cause of action relating to lei.

The contract alleged, whereby a credit was to be created in plaintiffs’ favor for a certain number of lei in Bucharest, was an executory contract which was to be performed at the place where the credit was to be created. (Equitable Trust Co. of N. Y. v. Keene, 232 N. Y. 290; Gravenhorst v. Zimmerman, 236 N. Y. 22.)

The well-established rule is that a breach of an executory contract is to be allocated to the place where the contract is to be performed and in accordance with this rule the breach of contract occurred in Bucharest.

Another rule is that damages for such a breach are to be measured by the standards of value which prevail where the breach occurs which, in this case, would be Bucharest where lei were the national currency and standard of value. Nothing else than this was decided in Hoppe v. Russo-Asiatic Bank (235 N. Y. 37), where it was simply held that when a plaintiff was entitled to recover damages for breach of contract which would be primarily expressed in money of the country where the breach occurred, the rate of exchange prevailing at the date of the breach would be adopted as the one by which to convert, the foreign money into our domestic money and fix the amount of the judgment in dollars.

So far as we are aware, there is no decision which, under the allegations of this complaint, makes a rule different than those above stated applicable in determining the alleged decline in market value of the lei which plaintiffs were to obtain. It may be that in certain cases we would use the standard of dollars in determining damages on the breach of a contract in the foreign country but we find nothing which warrants that procedure in this case. Therefore, we have the plaintiffs engaged in an attempt to prove that there was a decline in the market value” of lei in a country where lei were the national currency and the standard by which to determine values in damages.

It seems to.us that this attempt is impossible of achievement. During all the times in question lei continued to be the same monetary unit and plaintiffs obtained on the deferred date the same number of lei to which they were entitled on the due date and it is impossible to say that lei, measured by lei, had declined in market value.

If it be thought that this decision rests upon somewhat narrow grounds and possibly may not afford the plaintiffs compensation for damages which they have really suffered, the answer is that we are governed by the allegations of their complaint and that they have elected to attempt to rest their causes of action upon alleged decline in market value of something which by its very nature could have no market value at the place where the contract was to be carried out. Presumably the plaintiffs when they made a contract to obtain foreign money or credit abroad intended to use it as money in the country where it is the recognized medium of exchange. Fluctuations in the value of the money when measured by currency of this or any other country may not affect the use for which plaintiffs are presumed to have intended it. In the absence of special circumstances we will not assume either that the parties contemplated a liability for damages to one intending to use the lei in the markets of Roumania because there might be a depreciation in the value of the lei when measured by our currency, or that in fact such depreciation did cause the plaintiffs any damage. For damages actually suffered the law afforded other remedies to the plaintiffs. On failure of defendant’s predecessor to establish the credit as agreed plaintiffs might have rescinded their cont; act and recovered the money which they had paid for the proposed credit to be established in their favor. Again, on the breach of contract occasioned by the default of defendant’s predecessor they might have brought an action for breach of contract and damages in which recovery would have been based on the value of lei at the time of the breach of contract. (Hoppe v. Russo-Asiatic Bank, supra.) They might have sued to recover special damages if any such they suffered and possibly they would have been entitled to bring an action alleging that on the belated day when the credit was created and they elected to receive the specific number of lei, its value for the purposes contemplated by the parties had so diminished as to cause them actual damage. But they did none of these things. They elected to give to their complaint a form which, as we think, deprives them of relief which they might otherwise have secured.

We do not overlook the argument which may be made based on the case of Winter v. Am. Aniline Products, Inc. (236 N. Y. 199), where it was in substance held that in the case of a complaint alleging a breach of contract and ensuing damages, there is no requirement of law that the measure of damages alleged to have been sustained shall be stated in the complaint and if the complaint states facts from which damages can be properly inferred it is sufficient without specifically enumerating the items of damages or the rules of law controlling the damages; that if necessary an amendment of the complaint may be had upon the trial to correct an incorrect theory of damages and that the complaint should not be dismissed where this can be done. While recognizing the application of this rule under many circumstances, it is to be borne in mind, first, that in the Winter case, in addition to other differentiating circumstances, we were restricted in our consideration to giving answers to specific questions certified which is not the case here, and, second, that in our opinion it may be argued with considerable force that the present plaintiffs have debarred themselves of the right to invoke it. The Appellate Division in its decision condemning plaintiffs’ complaint as insufficient for the reasons in substance which we have outlined, gave to them the right to serve an amended complaint and of which right they declined to avail themselves. The plain meaning of this seems to be that they are satisfied with the form of complaint and do not desire to give any other form to their claim for relief.' Having, therefore, elected to stand on the complaint as it is now written, there is no reason why the court shofild attempt to give to their pleading some form and theory which they themselves are unwilling to adopt.

For these reasons we think that the judgment should be affirmed, with costs.

Lehman, J.

(dissenting). The complaint herein contains allegations that on November 14, 1919, the Nemeth State Bank agreed to sell the plaintiff two million lei and transmit the same by cable forthwith for the account of these plaintiffs to Banque Marmorosch Blank .& Co., Bucharest, Roumania, the same to be payable to said Banque Marmorosch Blank & Co. for the account of the plaintiffs on November 17, 1919,” and that the Nemeth State Bank wholly failed and neglected to transmit, pay or deliver the said two million lei by cable to the bank in Roumania until May 27, 1921, and the plaintiffs did not receive notice of such payment until August 17, 1921. Though the complaint does not contain any affirmative allegation that the plaintiffs thereafter availed themselves of the moneys alleged to have been transmitted to the bank in Roumania for their account, the action is brought not for the restitution of the original consideration paid to the Nemeth State Bank, nor for the amount of moneys which the Nemeth State Bank had agreed to “ transmit,” but for the damages suffered by alleged delay on the part of the bank in carrying out the contract. The com-, plaint assumes belated performance has been made and accepted, and alleges that the “ market value of the said two million- lei depreciated from November 17, 1919, when the same should have been transmitted and paid .and when the same should have been available as aforesaid, to May 27th, 1921, when the same was transmitted and paid as aforesaid.” These allegations are intended to show that the belated performance was less valuable than stipulated performance would have been. For this alleged difference in value the plaintiffs have brought this action against the defendant which has assumed the obligations and liabilities of the Nemeth State Bank, and for convenience we shall hereafter refer to the defendant as if the complaint alleged that it had entered into the original obligation. The defendant has moved to dismiss the complaint on the ground that it fails to state facts sufficient to constitute a cause of action.

There is no contention that the complaint does not sufficiently allege a contract on the part of the defendant and a breach of that contract by the defendant’s failure to “ transmit,” or “to establish or effect a credit,” for the stipulated number of lei at the stipulated time. Assuming, as we must upon this appeal, that all the facts alleged in the complaint can be established, the plaintiffs at that time undoubtedly had a cause of action against the defendant for the consequent damages. Acceptance of belated performance would not bar the plaintiffs from bringing an action for damages for delay unless such acceptance constituted a waiver of, or an accord and satisfaction for, the earlier breach. The plaintiffs’ cause of action is for damages for breach of a contract made in this country and not strictly for a debt payable in foreign money in a foreign country. (British American Continental Bank—In re Goldzieher & Penso’s Claim, [1922] 2 Chancery, 575. Same. In re Lisser & Rosenkranz’s Claim, [1923] 1 Chancery, 276.) If the cause of action had arisen in the foreign country for a debt created there and which could at any time be met by payment there in the foreign currency, a different question might arise. (Societé des Hotels Le Touquet Paris-Plage v. Cummings, [1922] 1 K. B. D. 451.) It is not seriously claimed that from the allegations of the complaint inference arises of waiver of any claim for damages. Mere acceptance of belated performance does not ordinarily give rise as a matter of law to such inference. If such performance was less valuable than the stipulated performance, it does not as matter of law constitute satisfaction of the contract though tendered and accepted for mutual convenience. The real question involved and the only question considered by the courts below is whether the complaint shows that belated performance was in fact less valuable and that the plaintiffs have been damaged in a manner for which the law can afford redress. We may upon this appeal properly dismiss without consideration, or at least postpone consideration, of such questions as whether the plaintiffs even without setting forth the nature of the damages they seek, might not, perhaps, recover nominal damages or interest for the detention of moneys due to them. No such questions are raised by the parties, and it is evident from the pleadings and from plaintiffs’ course in this litigation that they are seeking only the particular kind of damages which they allege they have suffered and the court should upon this motion determine whether they have a cause of action for such damages.

Damages so far as possible should compensate for loss suffered; they represent ordinarily, in actions upon contract, the value of performance of the contractual obligation which the promisor has failed to perform. What in this case was the nature of the defendant’s contractual obligation? Allegations of the complaint setting forth an agreement to sell and transmit foreign moneys have been quoted above. There are also allegations that the defendant had agreed to “ establish a credit abroad ” for and in behalf of the plaintiffs. At Special Term it has been held that the contract alleged is one for the sale of foreign currency and that the rule of -damages in an action for delay in delivering foreign currency under a contract of sale is the same as the rule of damages in an action for delay in delivering other commodity under similar contracts, viz., the difference between the value of the com-, modity at the time it should have been delivered and. the time it was in fact delivered. In the Appellate Division it has been held that the contract alleged is not a contract of sale but an executory contract to establish a credit in a foreign country and that for delay in carrying out such contract only damages special to these plaintiffs and within the contemplation of the parties may be recovered. We are agreed that in spite of the allegations of the complaint of a contract of sale, it sufficiently appears-that the-contract was executory and that the defendant’s obligation was to place a certain amount of foreign money to the credit of the plaintiffs which necessarily related to the future whether measured by the celerity of a cable dispatch or by the delay of a communication by mail.” (Equitable Trust Co. of N. Y. v. Keene, 232 N. Y. 290; Gravenhorst v. Zimmerman, 236 N. Y. 22.) In determining the damages which have been suffered by a breach of contract, the technical nature of the contract is of less importance than the practical benefit which would naturally result from the obligation if carried out. Regardless of whether the defendant promised to sell and transmit foreign money to Roumania on November 17, 1919, as alleged in the complaint, or promised to place to the credit ” of the plaintiffs the same amount of foreign moneys on the same date, as we have construed the contract, if the defendant’s contract had been carried out the plaintiffs would on the stipulated date have been in control of the foreign moneys. They could have used it to purchase commodies in Roumania, they could have sold it as if it were a commodity for American dollars. The value of the defendant’s obligation in either case was the value of the foreign moneys on that date, and immediately upon its breach the plaintiffs could have brought an action for such value.

How would that value be determined? Of course, the contract was to be carried out abroad; the money was to be made available there, and by the defendant’s failure to perform the plaintiffs were deprived of its value there. In Roumania the only recognized standard of value is Roumanian money. Here, the only standard of value is the dollar, and we would determine the value of the lei in an action for failure to deliver lei in Roumania on the stipulated date, by converting lei into our money at the rate of exchange prevailing on the date of the breach. (Hoppe v. Russo-Asiatic Bank, 235 N. Y. 37.) In other words, though the plaintiffs would be entitled to the value of the lei in Roumania and not in America, yet in our courts we must fix its value in our money which is current and is the measure of value not in Roumania but only here, and we fix it on the date when the money should have been paid, delivered or made available as if it were a commodity.

The plaintiffs have not brought such action for damages for total failure to deliver, and apparently have accepted a belated performance by which they have received 2,000,000 lei as agreed, but, as alleged in the complaint, the market value ” of these lei had in the meanwhile much depreciated. If the lei were in full sense a commodity bought and sold in the markets of Roumania, the difference between the value of performance if made at the stipulated time and its value when actually made would be measured by the depreciation in the market value of the lei in Roumania between these dates. ' It is said, however, that since lei are in Roumania not a commodity but a measure or standard of value they can by their very nature have no market value in Roumania which can depreciate, and since the plaintiffs’ damages must be fixed in accordance with values in Roumania, the place where the contract was to be performed, it does not appear that plaintiffs have suffered any damages which they can recover in this action. Upon the argument in this court, plaintiffs’ counsel practically conceded that from the very nature of money there could be no difference in market value of the lei in Roumania where the lei was not a commodity but a measure of value.

Foreign money is nevertheless not solely a measure of value but at least in many respects must be regarded as a commodity when we attempt to fix its value in relation to our own currency. (Sedgwick on Damages [9th ed.], sections 273, 274; S. S. Celia v. S. S. Volturno, [1921] 2 Appeal Cases, 544; British American Continental Bank, Ltd.; In re Credit General Liegeois, [1922] 2 Chancery, 589.) We fix the value of lei at the time of failure to perform in accordance with the rate of exchange then prevailing, 'and it would seem upon parity of reasoning, that when our courts are called upon to determine the value of the belated performance they would use the same method. The difference between the value of stipulated performance and of belated performance so fixed represents the damage suffered by the plaintiffs.

It is said that such damages do not represent the actual value, i. e., the purchasing power of the lei in Roumania. We can measure values, purchasing power and damages only in our currency. If one dollar will purchase ten units of foreign money one year, and twenty units of the same money the next year, then the purchasing value of the foreign unit even in the forum where it passes current has in comparison with the dollar been reduced by one-half, for the dollar which will purchase twenty units, of money necessarily also acquires the purchasing povver of the same number of units.

It is true that in some respects the purchasing power of depreciated currency in the forum where it is the recognized purchasing medium may not have depreciated in exactly the same proportion as the currency has depreciated when measured in gold or in normal money. The price, measured in local money, of lands and buildings, of labor, of commodities which cannot easily be exported, -does not always advance in the same proportion as the local currency has depreciated. For us, however, the price of commodities in foreign as in domestic markets must be. measured by our money, and the purchasing power of the local currency must be similarly measured. For us the “ market value ” of the lei is its price measured in dollars; and since the dollar must of course represent in the markets of Roumania the same- purchasing value as the number of lei which it will purchase, the “ market value of the lei -even though fixed in New York also determines its purchasing power in Roumania when measured in dollars. Unless we measure the value of the lei by its market price expressed in dollars, we have no measure we can apply. If in the great disturbance of credit and of currency values due to the World War the measure we use is not always perfect, it must be remembered that damages are assessed against one who has not complied with his contract, and we must use the best measure we have at hand rather than deprive the injured party of remedy.

Foreign exchange represents the method by which the money in one country can be transmitted or made available as money in a foreign country. The defendant agreed to establish a credit at a certain date. The defendant actually established the credit more than a year later. At that time the market value ” of the lei had diminished; i. e., for a dollar more lei could be made available in Roumania as a purchasing medium in the Roumanian markets, and a single lei would purchase commodities of proportionately less value, measured in our currency. The value of performance at the stipulated time was the value of the lei at that time; the value of the delayed performance was the value of the depreciated lei. This difference represents damage which plaintiffs suffered. The difference can be measured only by the market value of the lei expressed in dollars. It is said that perhaps the plaintiffs might have retained the lei in the bank even if the credit had been established and have suffered no real damage. The fact remains that if the credit had been established the plaintiffs could have used the money or allowed it to remain in the bank, and if it had appreciated in value while in the bank the plaintiffs would have gained by such appreciation. On the other hand, assuming as we must the truth of the allegations of the complaint, the defendant has for over a year not complied with its contract, and by 'the depreciation of the market value of the lei it could perform its contract at less cost to itself measured in dollars, and the plaintiffs have received something of less value measured by the same standard. By the terms of the contract between the parties it was the plaintiffs and not the defendant who had acquired the right to speculate in the foreign money.

It must be remembered that on this appeal we pass only upon the allegations of the complaint. We must assume that there has been a total failure on the part of the defendant to perform for over a year; we do not consider the effect of a mere failure to notify the plaintiffs that a credit had been effected, or of any circumstances not set forth in the complaint, which might have bearing on the defendant’s obligation or its liability for damages. The allegations of the complaint seem sufficient to constitute a cause of action for damages.

The order should be reversed, with costs in this court and the Appellate Division, and motion denied.

McLaughlin, Crane and Andrews, JJ., concur with His cock, Ch. J.; Cardozo, J., concurs with Lehman, J.; Pound, J., absent.

Judgment affirmed.