text:
    In the Matter of Max Kaplan, Doing Business under the Name of Kaplan’s Valet Service, Respondent, against Hermine C. Peyser, Appellant, Impleaded with Another.
    Argued January 6, 1937;
    decided March 9, 1937.

      Chauncey E. Treadwell and Guy Hughes Riegel for appellant.
    An order directing a recipient of a trust income to pay from that income in proceedings supplementary to execution is a forbidden interference with the trust estate. The sole remedy is an equitable action. (Pollock v. Farmers Loan & Trust Co., 157 U. S. 429; Senior v. Braden, 295 U. S. 422; People ex rel. Cohn v. Grams, 271 N. Y. 353; Locke v. Malbett, 3 Abb. Ct. App. Dec. 68; Graff v. Bonnett, 31 N. Y. 9; Stewart v. Foster, 1 Hilt. 505; Williams v. Thorn, 70 N. Y. 270; Sargent v. Bennett, 3 How. Pr. [N. S.] 515; Levey v. Bull, 47 Hun, 350; Matter of Seymour, 76 App. Div. 300; Gerton Carriage Co. v. Richardson, 6 Misc. Rep. 466; First Nat. Bank v. Miller, 24 App. Div. 551.) When the Legislature re-enacted section 792 of the Civil Practice Act they linked with it its construction by the courts, and that construction is, therefore, now authoritatively settled that interference with the income does come within the restriction, and, therefore, section 793 has no application where the sole income of a judgment debtor is the income from a trust fund. (Matter of Trosk v. Cohen, 262 N. Y. 430; Pouch v. Prudential Ins. Co., 204 N. Y. 281.)

      David Rubin for respondent.
    Section 793 of the Civil Practice Act gives to the court the right to order a judgment debtor to pay in installments such portion of his or her income as the court may deem reasonable irrespective of whether or not that income is derived from trust funds or from any other source. (Brearley School v. Ward, 201 N. Y. 358.) Section 792 of the Civil Practice Act does not affect income already accrued and, therefore, income already in the hands of the beneficiary is subject to the provisions of section 793. (Matter of Goldman, 142 Misc. Rep. 790; Matter of Lynch, 151 Misc. Rep. 549; Matter of Glover, 246 App. Div. 781; Matter of Kernan, 158 Misc. Rep. 13; Dibner v. Cousminer, 157 Misc. Rep. 229.)
   Loughran, J.

The parties are judgment creditor and debtor. In proceedings supplementary to an execution, the creditor applied to the City Court of Mount Vernon for an order in accordance with the following provision of section 793 of the Civil Practice Act: “ Notwithstanding the provisions of sections six hundred and eighty-four and six hundred and eighty-five of this act, the court may order the judgment debtor to pay to the judgment creditor or apply on the judgment, in installments, such portion of his income, however or whenever earned or acquired. after due regard for the reasonable requirements of the judgment debtor and his family, if dependent upon him, as Well as any payments required to be made by the judgment debtor to other creditors under the aforesaid sections six hundred and eighty-four and six hundred and eighty-five or prior order of a court hereunder.” The sole income of this debtor is derived from trusts set up by her parents for her benefit. An order directing her to pay the creditor’s judgment in monthly installments has been affirmed by the Appellate Division. On this appeal by the debtor the question is whether that order was authorized by the foregoing text of section 793.

That section was added to the Civil Practice Act by chapter 630 of the Laws of 1935. It has no counterpart in prior legislation. Sections 684 and 685 therein referred to originated respectively in chapter 461 of the Laws of 1903 and chapter 347 of the Laws of 1914. A judgment creditor may thereunder by levy reach ten per cent of twelve dollars or more per week of income to the debtor from trust funds, but only one execution therefor shall be satisfied at one time and where several are issued against the same debtor they shall be satisfied in the order of priority. Reading those three sections together, the courts below concluded that the additional remedy prescribed by section 793 may be used to compel satisfaction of a judgment debt out of income payable to the debtor from a trust fund established by a third party. The ruling was a precise one. Such trust income was taken to be within the content of the phrase in section 793 — “ income, however or whenever earned or acquired.” Indeed, the result must have turned on the signification of that one word “ acquired,” for it would appear to be plain that nothing is earned ” by a beneficiary when he receives the proceeds of a trust investment.

We suppose, without so deciding, that these words of section 793, taken apart from restrictions to be found elsewhere, can thus be made applicable to such a derivative acquisition as that gained through a trust not created by the beneficiary. But that section may not stand alone. "It is to be read and applied in connection with every other section of the act. All must have their due and conjoint effect. Each must be so far qualified and limited by each other as that all may have operation in harmony, if so it may be.” (Ansonia Brass & Copper Co. v. New Lamp-chimney Co., 53 N. Y. 123, 125. So, Matter of Social I. E. Assn. v. Taylor, 268 N. Y. 233, 237.)

Section 793 is part of article 45 of the Civil Practice Act which regulates proceedings supplementary to judgment. Section 792 thereof provides in part: “ This article does not authorize the seizure of, or other interference with, * * * any money, thing in action or other property held in trust for a judgment debtor, where the trust has been created by, or the fund so held in trust has proceeded from, a person other than the judgment debtor.” That provision has had a fixed legal meaning from the days of the Revised Statutes. It recognizes " the right of the creditor in a proper action to have the amount necessary for the support of the debtor ascertained, and to compel the application of the surplus.” (Williams v. Thorn, 70 N. Y. 270, 275.) But “ it is only such surplus which is liable to the claims of creditors; and this surplus, it has been held, is not properly ascertainable under supplementary proceedings to discover and appropriate the debtor’s property to the satisfaction of the judgment, but only in a suit or proceeding where the issue is directly made upon the amount necessary for the debtor’s support, and to which the trustees and cestui que trust are parties.” (Graff v. Bonnett, 31 N. Y. 9, 12. See Real Property Law [Cons. Laws, ch. 50], § 98, and Demuth v. Kemp, 159 App. Div. 422; 216 N. Y. 757.) This previously settled interpretation of the language that has been quoted from section 792 is to be presumed to have been made part of that section as last enacted side by side with the new section 793 by chapter 630 of the Laws of 1935. (Matter of Trosk v. Cohen, 262 N. Y. 430.) In other words, by section 792 the Legislature of 1935 said that undistributed income from a trust fund created by a person other than the beneficiary cannot be reached through supplementary proceedings but only by a direct action to which the trustee is a necessary party.

Then did the same Legislature in the same law intend next to say by section 793 that trust income, after adventitious payment over to a beneficiary, can be reached through a number of concurrently operative summary orders to be made by different courts in supplementary proceedings to which the trustee is not a party? In our judgment the context of sections 792 and 793 does not declare so mixed a purpose. Rather, it is the opinion of the court and we so hold, that these sections when read together exclude from the reach of supplementary proceedings all income from a trust fund held for the judgment debtor where, as here, the fund was created by another.

Though this conclusion may be rested, we think, on the language of sections 792 and 793 and on that alone, it is not without support in other considerations. Nothing in section 793 answers the question, In what condition of life is a man entitled to be supported as against his creditors?” (Gray on Restraints on Alienation of Property, § 294.) It has been difficult enough to deal with that matter in a judgment creditor’s action. (Brearley School, Ltd., v. Ward, 201 N. Y. 358, 372; Zinke v. Hipkins, 233 N. Y. 516; Jenks v. Title Guarantee & Trust Co., 170 App. Div. 830, 836.) If the Legislature intended to commit such an issue in widespread fashion to courts having no equity powers one may assume that that idea would not have been left to doubtful implication. Again, if the time had come for so large a revision of policy in respect of spendthrift trusts, the prohibition against alienation of income by a beneficiary would hardly have remained undisturbed. (Real Property Law, § 103; Personal Property Law [Cons. Laws, ch. 41], § 15.)

The order of the Appellate Division and that of the City Court of Mount Vernon should be reversed and the creditor’s motion denied, with costs in all courts.

Crane, Ch. J., O’Brien, Hubbs and Rippey, JJ., concur; Lehman and Pinch, JJ., taking no part.

Orders reversed, et.


source: Caselaw Access Project

author: Crane, Ch. J.

license: Public Domain

text:
    In the Matter of John J. Clancy, Respondent, against Warren Sloan, Appellant.
    Argued January 4, 1937;
    decided March 9, 1937.

      Russell Wiggins and Arthur O. Maharay for appellant.
    The word “ eligible ” in subdivision 4 of section 20 of the Town Law (Cons. Laws, ch. 62) means “ qualified when elected.” (People v. Purdy, 21 App. Div. 66; 154 N. Y. 439; Matter of Smith, 49 Misc. Rep. 567; 116 App. Div. 665; 188 N. Y. 549; People ex rel. Sherwood v. Bd. of Canvassers, 129 N. Y. 360; People ex rel. Martin v. Kenyon, 152 App. Div. 898; People ex rel. Furman v. Clute, 50 N. Y. 451.; Where no question of fact is involved, the title to an office may be decided in a proceeding to recover books and papers pertaining to the office. (Matter of Sells, 15 App. Div. 571; Matter of Brenner, 170 N. Y. 185; Matter of Smith, 49 Misc. Rep. 567; 116 App. Div. 665; 188 N. Y. 549.)

      Henry Hunter for respondent.
    The respondent’s resort to section 80 of the Public Officers Law (Cons. Laws, ch. 47) was legal and proper. (Matter of Bradley, 141 N. Y. 527.) The respondent is not ineligible to hold the office to which he was elected. (People ex rel. Martin v. Kenyon, 152 App. Div. 898; 207 N. Y. 692; Opinion Atty.-Gen., 7 St. Dept. Rep. 502; Smith v. Moore, 90 Ind. 296; People ex rel. Miller v. Mynderse, 140 App. Div. 789; 201 N. Y. 524.)
   Crane, Ch. J.

At a general election held in November, 1933, Warren Sloan was elected Supervisor of the town of New Windsor, in Orange county, for a term of two years, and John J. Clancy was elected Assessor of said town for a term of four years. Each duly qualified and entered upon the discharge of his duties.

At the general election held on November 5, 1935, said Sloan and Clancy were candidates for the office of Supervisor of said town of New Windsor for the term commencing January 1, 1936. Clancy won, and a certificate of election was duly issued to him. He filed his oath of office, his official undertaking, as required by law; and on January 1, 1936, when his term commenced, demanded from Sloan the delivery of books, moneys and property which Sloan then had in his possession as Supervisor of said town. Sloan refused, claiming that Clancy at the time of his election in November, 1935, was disqualified to run for office; that his election was void; and that he was not the Supervisor of the town of New Windsor. This claim was based upon the fact that at the time of election Clancy was Assessor of the said town, and that he did not resign the office until December 5, 1935, or after his election.

The sole question presented by this proceeding is whether Clancy was disqualified or incapacitated to be a candidate for the office of Supervisor while holding the elective office of Assessor of the same town. The question turns upon whether the statutes disqualify the Assessor from being a candidate and being elected, or only disqualify him from holding the two offices after he is elected.

Article 3 of the Town Law (Cons. Laws, ch. 62) relates to town officers, their powers, duties and compensation. Section 20, subdivision 1 (a): “ Every town of the first class shall have a supervisor, * * * a town clerk, two justices of the peace, a town superintendent of highways, three assessors, * * * and such other employees as the town board may determine necessary for the proper conduct of the affairs of the town.”

There is a similar provision for towns of the second class, which reads: “ The supervisor, justices of the peace * * * assessors * * * in every such town shall be elective. All other town officers and employees in such a town shall be appointed by the town board, except as otherwise provided by law.” (Subd. 1 [b].)

The office of Supervisor and of Assessor of the town of New Windsor were elective offices.

The pertinent provisions of subdivision 4 read as follows: No person shall be eligible to hold more than one elective town office * * *.”

We turn to section 23 to find out the eligibility of town officers as candidates for election. The section reads: Every officer of the town at the time of his election or appointment and throughout his term of office, shall be an elector of the town and every elective officer shall be the owner of record of real property in the town at the time of his election and throughout his term of office. No county treasurer, district superintendent of schools, or trustee of a school district shall be eligible to the office of supervisor.” We have here in this section the statement of the necessary qualifications for a candidate for the Supervisor of the town of New Windsor. On the day of his election he must be an elector of the town and he must be the owner of record of real property in the town. Clancy met these requirements; this section 23 requires no other. If he were a County Treasurer or a District Superintendent of Schools or a Trustee of a school district he could not be a candidate, but would be. disqualified. He was none of these. We must read this section 23, which states these few qualifications which a candidate must possess for elective town office, in connection with subdivision 4 of section 20, and harmonize them. Subdivision 4 did not intend to add another disqualification to section 23. The qualifications or disqualifications would naturally be found under section 23, which is headed Eligibility of town officers.” Subdivision 4 has reference to the time the elected candidate takes office, and not to the time when he is elected to office. This is what it says: “ No person shall be eligible to hold more than one elective town office.”

On the 1st of January, 1936, when Clancy assumed office as Supervisor, he had ceased to be Assessor, having resigned on December 5, 1935. He therefore, in our judgment, was qualified to take office as Supervisor, having received his certificate of election, taken his oath, and fulfilled all other requirements. He was Supervisor and entitled to have the books and papers pertaining to the office.

People v. Purdy (154 N. Y. 439) related to a Trustee of a school district who, as we have seen, is disqualified by section 23 of the Town Law.

People ex rel. Sherwood v. State Board of Canvassers (129 N. Y. 360) applied to a constitutional provision. People ex rel. Martin v. Kenyon (152 App. Div. 898; affd., 207 N. Y. 692) touched upon the qualifications of a School Trustee.

This application has been made under section 80 of the Public Officers Law (Cons. Laws, ch. 47) which permits a public officer to apply to the Supreme Court for relief, where the books and papers of the office are kept from him.

The proceeding is not one to test title to office, but a motion permitted by statute, and recognized by Matter of Brenner (170 N. Y. 185); Matter of Smith (116 App. Div. 665); People ex rel. Miller v. Mynderse (140 App. Div. 789; 201 N. Y. 524).

The order should be affirmed, without costs.

O’Brien, Htjbbs, Loughran and Rippey, JJ., concur; Lehman and Pinch, JJ., taking no part.

rOrder affirmed.


author: Loughran, J.

text:
    Edythe Stevens, Appellant, v. Edwin A. Stevens, Respondent.
    Argued January 5, 1937;
    decided March 9, 1937.

      George E. Mulry and Edward S. De Pasquaie for appellant.
    The defendant, having procured a judgment of divorce against the plaintiff in Nevada, could not maintain an action against the plaintiff for absolute divorce in New York, while the Nevada decree remained in force and effect. (Starbuck v. Starbuck, 173 N. Y. 503; Schneider v. Schneider, 232 App. Div. 71; Brown v. Brown, 242 App. Div. 33; 266 N. Y. 532.)

      Edward Robinson, Jr., for respondent.
    Defendant was not estopped by the Nevada decree from asserting a counterclaim for absolute divorce. (People ex rel. Jannicky v. Warden of City Prison, 231 App. Div. 131; 255 N. Y. 623; S. & E. Motor Hire Corp. v. New York Indemnity Co., 255 N. Y. 69; Fischer v. Fischer, 254 N. Y. 463; Matter of Swales, 60 App. Div. 599.)
   Loughran, J.

This is an action by a wife for a separ,ation from her husband. He demands a judgment of divorce’oh a counterclaim founded upon an allegation of adultery which is traversed by her reply. On the trial she put in evidence a decree of divorce obtained by him a few months before in the State of Nevada. It was admitted that the Nevada court was without jurisdiction either of the cause or of the person of the wife and that its judgment had no force in this State. There had been no subsequent marriage of either party.

In that condition of the record, the husband’s present counterclaim for a divorce was dismissed, “ because by reason of the action he started in Nevada, as far as he is concerned, he has no wife.” This order of the Trial Term 'was reversed by the Appellate Division. A majority of the justices thought that any estoppel against the „ husband on account of his Nevada decree was waived by the wife when she commenced this separation action. There were two dissents on the ground that, while adultery by the wife would here be a defense, the husband is precluded by his proceedings in Nevada from seeking now an affirmative judgment dissolving the marriage of the parties.

£Our conclusion is that the award of the Nevada decree the husband should have no effect upon the right of either party to a full adjudication in this action upon the conceded fact of their existing marital status. This is not a case in which one spouse, after having secured a foreign divorce decree not binding in this State on the other, attempts thereafter to assert in our courts private claim or demand arising out of their marriage. There are situations in which such a private suit will be barred by the fact of the foreign decret/J Thus in Starbuck v. Starbuck (173 N. Y. 503) a wife went from this State to Massachusetts where she obtained a decree of divorce from a court that had no jurisdiction over her husband who remained domiciled here. The husband remarried. On his death, the first wife, claiming to be bis widow, brought in this State an action to recover dower in real estate of which he died seized. It was held that the Massachusetts decree operated to defeat her claim that she is now the widow of the decedent and entitled to dower in thereal estate acquired by him after the decree ” (p. 506). ¡Although the elements of a true estoppel against the wife were not there established, the cases cited and relied on (Matter of Morrisson, 52 Hun, 102, and Matter of Swales, 60 App. Div. 599; 172 N. Y. 651) make it plain that exclusion of the truth contradictory of the Massachusetts decree was deemed to be necessary in the due administration of justiceTj

z The present case involves a controversy essentially /different in character. Here the court was invoked to j pronounce judgment directly upon the marital status— la relationship which no stipulation or conduct of the parties could alterVDomestic Relations Law [Cons. Laws, eh. 14], § 51. See Fearon v. Treanor, 272 N. Y. 268.) The husband’s counterclaim is interposed as matter of statutory right. (Civ. Prac. Act, § 1168.) Certainly a decree that is void cannot in itself be a reason why he should have less than his legal rights and we need not inquire what the result would be in some further event that has not happened. (Cf. Fischer v. Fischer, 254 N. Y. 463; Lefferts v. Lefferts, 263 N. Y. 131; Chapman v. Chapman, 224 Mass. 427.)

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

Crane, Ch. J., O’Brien, Hubbs and Rippey, JJ., concur; Lehman and Pinch, JJ., taking no part.

Order affirmed, etc.


text:
    H. P. Humphrey, as Executor of Zarooke Kasparian, Deceased, Respondent, v. Commerce Insurance Company of Glens Falls, New York, Appellant, Impleaded with Another.
    Argued January 12, 1937;
    decided March 9, 1937.

      John J. Scully for appellant.

      H. P. Humphrey and Earle J. Wiley for respondent.
    As the Appellate Division reversed the judgment of the lower court, entered upon a general verdict, upon the facts as well as the law, the Court of Appeals has no power to review, and the appeal should be dismissed. (Goodman v. Marx, 234 N. Y. 172.)
   Crane, Ch. J.

The defendant issued a fire policy to H. and Z. Kasparian, husband and wife, in the sum of $2,000 on buildings, and $500 on contents, for the period of three years. In June, 1932, the husband conveyed his interest in the property to his wife, and the company issued an indorsement covering the change.

On August 22, 1932, a cancellation notice, addressed to Herbert H. Kasparian and Z. Kasparian, Wynantskill, New York, was mailed at the Glens Falls post office. This notice was sent registered mail. It was delivered to H. Kasparian, the husband of Z. Kasparian, at their home in Wynantskill by the rural carrier. The registered letter receipts were signed by the husband. In November, 1932, as one Clickner testifies, he delivered to the wife the mortgagee cancellation notice and asked her to have the mortgagee sign the same. Later in the month he returned and secured from her the notice signed by the mortgagee and at the same time gave her, Z. Kasparian, the amount of the return premium on the canceled policy.

Z. Kasparian died December, 1933. The fire which destroyed the premises and contents occurred March 17, 1934.

This action has been brought by the executor of Z. Kasparian’s will to recover on the policy, as he claims that it was not canceled by sufficient and proper notice.

The case was tried before a jury, the justice submitting to it two questions to be decided:

(1) “ Did the Commerce Insurance Company of Glens Falls, New York, give a five days’ written notice of cancellation of the policy in question to Zarooke Kasparian, and pay the pro rata amount of the unearned premium or tender payment thereof to her?”

(2) “Did William Voellm, the mortgagee, acknowledge the receipt of the notice of cancellation as to his interest in the policy in question?”

The trial justice did not direct the jury to find or return a general verdict. After the jury had returned an affirmative answer to both of these questions the defendant’s counsel made a motion for a verdict in the defendant’s favor in the following language: “ Upon the report of the jury answering the questions in favor of the defendant, Commerce Insurance Company, I now ask the Court for judgment dismissing the complaint upon the report of the jury.

The Court: Yes, and the motion is granted.”

On appeal from the judgment of dismissal the Appellate Division reversed on both the law and the facts and granted a new trial.

The attempted reversal on the facts, however, fails to comply with section 602 of the Civil Practice Act, which reads: Upon an appeal to the Court of Appeals from a judgment reversing a judgment entered * * * upon a general verdict with special findings, of a jury * * * it must be conclusively presumed that the judgment was not reversed, or the new trial granted, upon a question of fact, unless the particular question or questions of fact upon which the reversal was made or the new trial was granted are specified and referred to by number or other adequate designation in the body of the judgment or order appealed from.”

We have in this case a judgment entered upon a general verdict of dismissal with special findings of a jury. Two questions of fact were submitted to and answered by the jury after which the trial justice directed the dismissal. The Appellate Division should, therefore, have specified in its order or judgment the particular question of fact reversed. This it failed to do, adopting the practice stated in Goodman v. Marx (234 N. Y. 172) on an appeal from a judgment entered on a general verdict only. We must presume, therefore, that the reversal was on the law only. As there were no errors of law calling for reversal, we are obliged to reverse the order of the Appellate Division, and affirm the judgment of the trial court, with costs in this court and the Appellate Division.

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

Lehman, O’Brien, Hubbs, Loughran and Rippey, JJ., concur; Finch, J., taking no part.

Ordered accordingly.


text:
    Catherine Sheehan, Respondent, v. North Country Community Hospital, Appellant, Impleaded with Another.
    Argued January 12, 1937;
    decided March 9, 1937.

      Richards W. Hannah and William A. Earl for appellant.
    A charitable hospital is not liable to recipients of its charity for the negligence of its servants. (Schloendorff v. Society of N. Y. Hospital, 211 N. Y. 125; Phillips v. Buffalo General Hospital, 239 N. Y. 188; Mills v. Society of N. Y. Hospital, 242 App. Div. 245; 270 N. Y. 594; Collins v. N. Y. Post Graduate Med. School & Hospital, 59 App. Div. 63; Wilson v. Brooklyn Homeopathic Hospital, 97 App. Div. 37; Hamburger v. Cornell University, 240 N. Y. 328; Hordern v. Salvation Army, 199 N. Y. 233; .Matter of Bernstein v. Beth Israel Hospital, 236 N. Y. 268; Powers v. Massachusetts Homeopathic Hospital, 109 Fed. Rep. 294; 183 U. S. 695; Ettlinger v. Trustees of Randolph-Macon College, 31 Fed. Rep. [2d] 869; Cunningham v. Sheltering Arms, 135 App. Div. 178; Stearns v. Association of the Bar of the City of New York, 154 Misc. Rep. 71; Williams v. Church Home for Females, 223 Ky. 355.)

      Louis G. Hart, Jr., for respondent.
    The exemption extends only to acts of negligence committed by a member of. the medical staff. (Mills v. Society of New York Hospital, 242 App. Div. 245; 270 N. Y. 594; Hodern v.
      Salvation Army, 199 N. Y. 233; Phillips v. Buffalo General Hospital, 239 N. Y. 188; Hamburger v. Cornell University, 240 N. Y. 328; Matter of Bernstein v. Beth Israel Hospital, 236 N. Y. 268.)
   Loughran, J.

Plaintiff, who had been a paying patient in a hospital of the defendant-appellant, a charitable corporation, was being removed in its ambulance to her home. Negligence of the driver brought the ambulance into collision with another vehicle and the plaintiff suffered injuries for which she had a judgment which has been affirmed. On these facts there is squarely presented for the first time in this court the question whether a charitable institution (not itself in default in the performance of any non-delegable duty) should be declared exempt from liability to a beneficiary for personal harm caused by the negligence of one acting as its mere servant or employee. , (Cf. Schloendorff v. Society of New York Hospital, 211 N. Y. 125.)

The case for immunity must rest on the hypothesis that a recipient of the benefit impliedly waives any claim •for damages resulting from torts in the administration of a charity, a theory that would be inapplicable were the plaintiff a stranger to this hospital. (See Hordern v. Salvation Army, 199 N. Y. 233, 238-240; Hamburger v. Cornell University, 240 N. Y. 328, 329-340; Johnsen v. Staten Island Hospital, Inc., 271 N. Y. 519; Kellogg v. Church Charity Foundation, 128 App. Div. 214, 218.) A prop may be found in the consideration that to compel payment of damages to a beneficiary would be to limit charitable activities and to dry up the sources of charitable donations. In a case not quite the same, the strongest argument for non-liability was stated in these words: “ There can certainly be no principle of natural justice which would require one engaged in charitable work to be liable to the recipients of his charity for the wrongs of others. If he use reasonable care in the selection of the means and is guilty of no wrong himself, he ought not to be answerable to those who accept the charity for the wrongs of servants whom he has to employ to make it effective.” (Wallace v. Casey Co., 132 App. Div. 35, 44.)

On the other side it is answered that the waiver ” doctrine is pretty -much a fiction (Phillips v. Buffalo General Hospital, 239 N. Y. 188); that to impose liability is to beget-careful management; and that no conception of justice demands that an exception to the rule of respondeat superior be made in favor of the resources of a charity and against the person of a beneficiary injured by the tort of a mere servant or employee functioning in that character. It is our judgment that the greater weights are in this scale.

Moreover, the now declared public policy of the State is that persons damaged by the torts of those acting as its officers and employees need not contribute their losses to the purposes of government. (Court of Claims Act, § 12-a.) We think it would not be a harmonious policy that would require this plaintiff to put up with her injuries on the score that the appellant is a charitable corporation. u (Cf. Murtha v. New York H. M. College & Flower Hospital, 228 N. Y. 183.)

The judgment should be affirmed, with costs.

Crane, Ch. J., Lehman, O’Brien, Hubbs and Rippey, JJ.,'concur; Finch, J., taking no part.

Judgment affirmed.


text:
    Bourjois Sales Corporation, Appellant, v. Abraham Dorfman, Respondent.
    Argued January 11, 1937;
    decided March 9, 1937.

      Mark Eisner, James F. Donnelly and Samuel Michelman for appellant.
    The established policy of the Court of Appeals, where the Supreme Court of the United States has spoken, is to act in harmony, even though this involves reversal of previous opinions; especially is this so where there is a general, noticeable legislative trend. (Hintermister v. First Nat. Bank, 64 N. Y. 212; Grant v. Cananea Consolidated Copper Co., 189 N. Y. 241; Klein v. Maravelas, 219 N. Y. 383; Fitzwater v. Warren, 206 N. Y. 355; Kings County Lighting Co. v. Newton, 202 App. Div. 473; 235 N. Y. 599; People v. Budd, 117 N. Y. 1; People v. Luhrs, 195 N. Y. 377; Matter of Weiden, 263 N. Y. 107; Radice v. New York, 264 U. S. 292; Hardebergh v. Ray, 151 U. S. 112.)
    ' Morris L. Ernst, Jerome N. Frank, Coliman Gottesman and Harriet F. Pilpel for Doubleday, Doran & Company, Inc., amicus curiae.

    When construing provisions of the State Constitution, the Court of Appeals has consistently attributed compelling effect, even in the face of its own prior contrary decisions, to the decisions of the United States Supreme Court construing analogous provisions of the Federal Constitution. The desirability of uniformity in business practices, and the probative forcé attaching to decisions of the nation’s Supreme Court, have dictated that attitude. (People v. Budd, 117 N. Y. 1; People v. Luhrs, 195 N. Y. 377; Matter of Weiden, 263 N. Y. 107; Klein v. Maravelas, 219 N. Y. 383; People ex rel. Tipaldo v. Morehead, 270 N. Y. 233.)

      W. H. Crichton Clarke for American Booksellers’ Association, amicus curiæ.

      Joseph J. Hammer for New York State Pharmaceutical Association, Inc., amicus curiae.

    The decision of the United States Supreme Court upholding similar enactments should be adopted as the law of this State. (Matter of Weiden, 263 N. Y. 107; People v. Budd, 117 N. Y. 1; Bagdon v. Philadelphia & Reading C. & I. Co., 217 N. Y. 432; Dollar Co. v. Canadian C. & F. Co., 220 N. Y. 270; Sperry & Hutchinson Co. v. State, 188 Ind. 173; Midwestern Petroleum Corp. v. State Board of Tax Commrs., 206 Ind. 688; Hammond Packing Co. v. State, 81 Ark. 519; State v. Ardoin, 51 La. Ann. 169.)

      Leon Lautersiein, Melbourne Bergerman, Emanuel Dannett and Frances Kneitel for respondent.
    State constitutional questions being involved, the Court of Appeals is not bound to follow the decision of the United States Supreme Court. (Lynch v. New York, 293 U. S. 52; Glen v. Field Packing Co., 290 U. S. 177; Des Moines Nat. Bank v. Fairweather, 263 U. S. 103; Terrace v. Thompson, 263 U. S. 197; Puget Sound Co. v. King County, 264 U. S. 22; Douglass v. Noble, 261 U. S. 165; Houck v. Little River Drainage District, 239 U. S. 254; Dreyer v. Illinois, 187 U. S. 71; Sterling v. Constantin, 287 U. S. 378; Chicago & N. W. Ry. Co. v. Dey, 35 Fed. Rep. 866; Commonwealth v. Beaver Dam Coal Co., 194 Ky. 34; State v. Atlantic Coast Lines R. Co., 56 Fla. 617; People v. Budd, 117 N. Y. 1; Towle v. Forney, 14 N. Y. 423; Old Dominion Copper Co. v. Bigelow, 203 Mass. 159; State v. Lothrops-Farnham Co., 84 N. H. 322.) The Court of Appeals as well as other State courts has in many instances refused to follow the decisions of the United States Supreme Court, especially where the decisions of the latter tribunal conflict with previous adjudications by the highest State court. (People ex rel. C. P., N. & E. R. R. R. Co. v. Willcox, 194 N. Y. 383; Towle v. Forney, 14 N. Y. 423; People v. Defore, 242 N. Y. 13; Johnston v. Compagnie Generale Transatlantique, 242 N. Y. 381; Schultz v. Greenwood Cemetery, 190 N. Y. 276; Mynard v. Syracuse, 71 N. Y. 180; Marsich v. Eastman Kodak Co., 244 App. Div. 295; 269 N. Y. 621, Walsh v. Fitchburg R. R. Co., 145 N. Y. 301.)

      John C. Watson for John G. Myers Co., Inc., amicus curiæ.

    The Supreme Court’s decision that a State may, if it chooses to do so, go a long way toward authorizing price maintenance, without repugnance to the Federal Constitution has no bearing upon a State which has already found through its highest court that such a law cannot be sustained under the State’s Constitution. (Doubleday, Doran & Co. v. Macy & Co., 269 N. Y. 272; People v. Gillson, 109 N. Y. 389; People ex rel. Moskowitz v. Jenkins, 202 N. Y. 53.)
   Crane, Ch. J.

The complaint in this action has been dismissed upon the authority of our decision in Doubleday, Doran & Co. v. Macy & Co. (269 N. Y. 272), decided January 7, 1936. Mr. Justice Steinbrink at' Special Term felt obliged to follow this case, although later, in the October term of the same year, the United States Supreme Court took a different view of the law in Old Dearborn Distributing Co. v. Seagram-Distillers Corp. The justice was quite right as it is our duty to determine what we shall do with our former decision in the light of the more recent case.

In chapter 976 of the Laws of 1935 the Legislature undertook to prevent price cutting in the sale of commodities. In section 1 of the act a contract was declared to be legal which provides that a buyer of a commodity bearing the label, trade-mark, brand or name of the producer, will not resell such commodity except at the price stipulated by the vendor. This was nothing new as such contracts were legal under court decisions.

Section 2, however, went much further, and read:

“ § 2. Willfully and knowingly advertising, offering for sale or selling any commodity at less than the price stipulated in any contract entered into pursuant to the provision of section one of this act, whether the person so advertising, offering for sale or selling is or is not a party to such contract, is unfair competition and is actionable at the suit of any person damaged thereby.”

Doubleday, Doran & Company, Inc., the publisher, made a contract with Doubleday, Doran Book Shops, Inc., a seller and distributor, as to the price at which certain books could be sold. Later the publisher sold these books to R. H. Macy & Co. without any contract or restriction as to price or even a request for a contract. When Macy & Co. undertook to sell these books at its own figure, the publisher sought an injunction to compel Macy to sell the books at the price it had fixed with the other Doubleday corporation.

We thought this to be a clear case of unauthorized restriction upon the disposition of one’s own property and unconstitutional within former decisions of the United States Supreme Court. That court has taken a different view in the case above mentioned, Old Dearborn Distributing Co. v. Seagram-Distillers Corp. (299 U. S. 183) (Dec. 7, 1936). The Illinois Free Trade Act there under review is similar to our own. The complaint in this appeal now before us is in no way different from that before the Supreme Court under the Illinois act, so that we feel it to be our duty to submit our own judgment to the rulings of the Supreme Court on the Constitution of the United States and the interpretation of its own decisions. (People ex rel. Tipaldo v. Morehead, 270 N. Y. 233, 235.) True it is that the facts of the Doubleday case are much bolder than those in the Seagram case, and distinctions may be drawn, but these are matters of emphasis, not of principle. The Seeck & Kade, Inc., v. Tomshinsky case (269 N. Y. 613), decided at the same time on the authority of the Doubleday case, was similar to the Seagram case in that the facts establishing good will were set forth in full. Had the Seagram case been decided before argument in the Doubleday case we certainly would have followed the Supreme Court's ruling on the Federal Constitution. We do so now by sustaining the complaint in this case and reversing the order of the Special Term.

The judgment should be reversed and the motion denied, with costs in all courts.

Lehman, Hubbs, Loughean and Rippey, JJ., concur; O’Brien, J., dissents; Finch, J., taking no part. Judgment reversed, etc.


author: Rippey, J.

text:
    John K. Cochran, Appellant, v. Mabel N. Taylor, Respondent.

      Argued January 13, 1937;
    decided March 9, 1937.

      John W. Hollis for appellant.
    The trial court erred in permitting defendant to contradict and invalidate the terms of the written agreement by paroi evidence. (Fuller v. Artman, 24 N. Y. Supp. 13; Watkins v. Robertson, 105 Va. 269; McMillan v. Ames, 33 Minn. 257; Mathews Slate Co. v. New Empire Slate Co., 122 Fed. Rep. 972; Bosh v. Humboldt Mutual Fire & Marine Ins. Co., 35 N. J. L. 429; Weaver v. Burr, 31 W. Va. 736; Black v. Maddox, 104 Ga. 157; McCrea v. Purmont,
      16 Wend. 460; Ruppert v. Singhi, 243 N. Y. 156; Jamestown Business Collage Assn. v. Allen, 172 N. Y. 291; Olin v. Arendt, 58 N. Y. Supp. 429; Watkins Salt Co. v. Mulkey, 225 Fed. Rep. 739.) A contract under seal and reciting a nominal consideration is a valid and enforceable agreement. (Fuller v. Artman, 24 N. Y. Supp. 13; Lewis v. Bollinger, 187 N. Y. Supp. 563; Mathews Slate Co. v. New Empire Slate Co., 122 Fed. Rep. 972; Thomason v. Beecher, 176 N. C. 622; McCrea v. Purmont, 16 Wend. 460; Black v. Maddox, 104 Ga. 157; Weaver v. Burr 31 W. Va. 736; O’Brien v. Boland, 166 Mass. 481; Watkins v. Robertson, 105 Va. 269; Willard v. Taylore, 75 U. S. 557; Storm v. United States, 94 U. S. 76; Aller v. Aller, 40 N. J. L. 446.) The contract as entered into constituted a valid agreement on the part of the defendant to sell the property at any time within one hundred and twenty days at the agreed price and upon the conditions therein stated, which could not be withdrawn before the expiration of the period provided. (Fuller v. Artman, 24 N. Y. Supp. 13; McMillan v. Ames, 33 Minn. 257; Seyferth v. Groves & Sand Ridge R. R. Co., 217 Ill. 483.) The attempted revocation on the part of the defendant was ineffectual. (McMillan v. Ames, 33 Minn. 257; Watkins v. Robertson, 105 Va. 269; Seyferth v. Grove & Sand Ridge R. R. Co., 217 Ill. 483; Thomason v. Beecher, 176 N. C. 622; Willard v. Taylore, 75 U. S. 557; O’Brien v. Boland, 166 Mass. 481; Adams v. Peabody Coal Co., 230 Ill. 469.) Even were the evidence competent that the dollar recited in the agreement Was not paid, it would not constitute a defense to the action, as the agreement is based upon a sufficient consideration which was tendered, payment waived and the defendant is estopped from repudiating her own act. (Seyferth v. Groves & Sand Ridge R. R. Co., 217 Ill. 482; Thomason v. Beecher, 176 N. C. 622; Kam v. Benjamin, 42 N. Y. Supp. 99; Williams v. Whittell, 74 N. Y. Supp. 820.) An option for a specified period of time under seal, or based upon a nominal consideration, is irrevocable during the period stated, and upon acceptance becomes a bilateral enforceable contract. (Fuller v. Artman, 24 N. Y. Supp. 13; Wells v. Wells, 40 N. Y. Supp. 836; Olin v. Arendt, 58 N. Y. Supp. 429; Forgotson v. Cragin, 70 N. Y. Supp. 979; Mathews Slate Co. v. New Empire Slate Co., 122 Fed. Rep. 972; Spitzli v. Guth, 183 N. Y. Supp. 743; Thomason v. Beecher, 176 N. C. 622.)

      Francis B. O’Connor for respondent.
    The option contains no mutual covenants. The sum of one dollar or any other sum was not, in fact, paid, and there was no consideration. It was a purely gratuitous promise and standing alone was unenforceable against the will of the optioner. (Presbyterian Church of Albany v. Cooper, 112 N. Y. 517; Strobe v. Netherland Co., 245 App. Div. 573.) There having been no consideration for the alleged option, it is a mere offer to sell and could be revoked at any time before acceptance, and, having been revoked-before acceptance, the plaintiff’s attempted acceptance and attempt to exercise the option, after such revocation and withdrawal of the offer contained in the option, was a nullity. (Ganss v. Guffey Petroleum Co., 125 App. Div. 760; 131 App. Div. 897; 198 N. Y. 574; Quick v. Wheeler. 78 N. Y. 300; Pomeroy v. Newell, 117 App. Div. 800; Pettibone v. Moore, 75 Hun, 461; Petterson v. Pattberg, 248 N. Y. 86; Finizio v. American Steel Export Co., 192 App. Div. 571; 233 N. Y. 514; Eckstein v. Chapkewitz Fur Co., 131 Misc. Rep. 167; Poe v. Ulrey, 233 Ill. 56; Boston & Maine R. R. v. Bartlett, 3 Cush. 224; Gross v. Stampler, 165 N. Y. Supp. 214; Morrison v. Johnson, 148 Minn. 343.) Parol evidence is admissible to show Want of consideration even though the purported option is under seal and recites a consideration of one dollar, the receipt of which is acknowledged and confessed. (Case v. Boughton, 11 Wend. 107; Johnson v. Miln 14 Wend. 195; Fay v. Richards & Haywood, 21 Wend. 626; Wilson v. Thompson, 10 Barb. 308; Baird v. Baird, 81 Hun, 300; 145 N. Y. 659; Stromblad v. Hanover Fire Ins.

      Co., 121 Misc. Rep. 322; Hutchison v. Ross, 262 N. Y. 381; Harris v. Shorall, 230 N. Y. 343; Lagumis v. Gerard, 116 Misc. Rep. 471; McCreery v. Day, 119 N. Y. 1; Thomson v. Poor, 147 N. Y. 402; Ambler v. Smith, 237 App. Div. 226; Smith v. Dotterweich, 200 N. Y. 299; Bernstein v. Kritzer, 253 N. Y. 410.) The purported assignment from the optionee to plaintiff did not vest in the plaintiff any right to demand performance by the defendant or to compel the defendant specifically to perform by an action in equity, for the reason that the purported option purports to offer to the optionee the right to purchase defendant’s property on credit and no one but the optionee could exercise the option, except with the consent of the defendant, and such consent has not been given by the defendant. (Logo Realty Co. v. Estate of Johnson, 227 App. Div. 292 ; 253 N. Y. 579; 235 App. Div. 68; 261 N. Y. 625; 266 N. Y. 670; Epstein v. Gluckin, 233 N. Y. 490; Gargiulo v. California Wineries & Distilleries, 103 Misc. Rep. 691; Grosso v. Sporer, 123 Misc. Rep. 796; Hugel v. Habel, 132 App. Div. 327; Dittenfass v. Horsley, 177 App. Div. 143; 224 N. Y. 560; Wadick v. Mace, 191 N. Y. 1; Ide v. Brown, 178 N. Y. 26; Schuyler v. Kirk-Brown Realty Co., 193 App. Div. 269; Ferguson Contracting Co. v. Heldarberg Cement Co., 135 App. Div. 494.)
   Rippey, J.

On October 20, 1934, an agreement in writing and under seal was executed in duplicate, duly acknowledged and delivered by and between defendant and one William B. Chenault, whereby the former gave to Chenault an option to buy certain real and personal property located in Allegany county, New York, for $115,000 at any time within 120 days thereafter upon terms and conditions therein specified, and agreed to sell and convey the same to Chenault on condition that Chenault should, within such period of time, give her written notice of his intention to buy. On November 13, 1934, defendant notified Chenault that she revoked, rescinded and withdrew the offer to sell on the ground, as she asserted, that the contract was without consideration and was obtained from her through duress, fraud and undue influence. Chenault assigned all of his interest in the agreement to plaintiff on December 21, 1934, and on January 11, 1935, the latter served the required notice of his election to buy. Complying with the provisions of the agreement, plaintiff demanded delivery within thirty days of abstracts of title and of a suitable instrument of conveyance. Upon refusal of defendant to perform, this action for specific performance was brought.

The answer put in issue the material allegations of the complaint. Additionally, defendant set up, as defenses, (1) that the agreement was only an offer to sell, was without consideration and was revoked and withdrawn before acceptance and prior to the time of assignment to plaintiff who took the assignment with knowledge of the withdrawal and revocation, (2) that the option was not assignable and plaintiff acquired no interest by the assignment, and (3) that defendant’s signature to the instrument and its delivery by her were obtained through imposition, fraud and undue influence. A counterclaim was interposed for damages arising out of the recording of the instruments which, it was asserted, prevented defendant from disposing of her property and from enjoying the full use and benefit thereof, all of which was put in issue by the reply.

The trial court found that there was no valid acceptance or tender of performance by plaintiff or by Chenault and sustained the first two defenses mentioned. No finding or decision was made on the material question of fact as to whether the execution and delivery of the instrument were procured, as defendant asserts, by plaintiff or by Chenault or by both through imposition, undue influence or fraud. The trial court specifically stated in his opinion that he limited his decision to holding that the option was nudum pactum, that defendant had a right to withdraw, revoke and cancel it and that, since the option by its terms involved the extension of credit to Chenault, it Was not assignable to plaintiff or, in any event, enforcible by plaintiff without a tender of a bond executed by Chenault. Judgment was entered dismissing the complaint, with costs. The Appellate Division in the fourth department affirmed by a divided court upon the findings of fact as made by the trial court. The judgment appealed from cannot be sustained unless it can be held, as matter of law, that the option was without consideration, was not assignable and was not accepted according to its terms.

It is the rule that an offer or an option, not under seal or given for a consideration, may be revoked at any time before acceptance (1 Williston on The Law of Contracts [Rev. ed., 1936], § 55; Petterson v. Pattberg, 248 N. Y. 86, 88; Boston & Maine R. R. v. Bartlett, 3 Cush. [Mass.] 224.) That rule has no application here. In the instant case the agreement was under seal and the receipt of a consideration was acknowledged and confessed. In the body of the instrument the parties recited that they attached their seals, thereby establishing their intention concerning the sealing of the instrument, and, at the end, added the seal in the form required by section 44 of the General Construction Law (Cons. Laws, ch. 22). It cannot be successfully argued that the agreement was not a sealed instrument carrying with it all the force and implications attributable to an instrument so executed. The cases of Matter of Pirie (198 N. Y. 209) and Empire Trust Co. v. Heinze (242 N. Y. 475) hold nothing to the contrary. In the Pirie case the seal was present but an expression of intent to make the instrument one under seal was lacking. In the Heinze case the intention was expressed but the seal was lacking.

Prior to the time the law required consideration to support a contract, the seal was used conclusively to establish the authenticity and binding effect of the instrument to which it was attached. (1 Williston on The Law of Contracts [Rev. ed., 1936], §§ 109, 217.) The use and binding effect of the seal dates back to at least 2900 B. C. (Report of Law Revision Commission, Legislative Document, [1936] No. 65, p. 235.) Williston points out (§ 217) that long before the action of assumpsit was developed, a promise under seal but without consideration was binding and that it was binding by its own force by the common law (§ 109.) It is agreed upon substantially universal authority that a statement of consideration in a sealed instrument is unnecessary. (Thomason v. Bescher, 176 N. C. 622; 2 A. L. R. note, p. 631.) It is also frequently stated by the courts that a sealed instrument carries with it a presumption that it is given for a valid consideration without the necessity of a recital of the consideration therein and that the party signing and sealing is estopped to assert lack of consideration. (Fuller v. Artman, 69 Hun, 546; Petrie v. Barckley, 47 N. Y. 653; Torry v. Black, 58 N. Y. 185; Stiebel v. Grosberg, 202 N. Y. 266; McMillan v. Ames, 33 Minn. 257; Watkins v. Robertson, 105 Va. 269; Weaver v. Burr, 31 W. Va. 736.) Williston asserts that though it has been expressed that a sealed instrument “ imported ” a consideration, “ however expressed the law has always been clear that apart from changes made by statute, a sealed promise, whether absolute or in the form of an offer, is binding without consideration.” (§ 217.) He adds that while there are cases where equity will not enforce a voluntary covenant, an option is not one of them. Throughout the centuries, the rule as to the binding effect of the seal has been founded in reason and based on necessity. Today, in the face of the tremendous number of business transactions open to investigation by the courts, reason continues to dictate and necessity to require more forcefully than before that a party to a sealed instrument should be estopped to assert want of consideration. (1 Williston, on-The Law of Contracts [Rev. ed., 1936], § 219.)

The first statute in this State in any manner affecting the common law rule as to the conclusive character of the seal was the act of 1828 (2 R. S. [1st ed.] p. 406, pt. 3, ch. 7, tit. 3, § 77) which provided that the seal should be only “ presumptive evidence of a sufficient consideration, which may be rebutted in the same manner, and to the same extent, as if such instrument were not sealed.” That act remained in effect until amended by chapter 448 of the Laws of 1876 (Code of Remedial Justice, § 840) to read, A seal upon an executory instrument is only presumptive evidence of a sufficient consideration, which may be rebutted, as if the instrument was not sealed.” In chapter 416 of the Laws of 1877 (Code Civ. Proc. § 840) the words “ hereafter executed ” were inserted after the first word “ instrument.” In that form the statute remained until 1920, when the words hereafter executed ” were stricken out and the statute, thus amended, continued to September 1, 1935. These statutory changes in the common law rule refer only to the question of “ sufficient consideration,” and as to the sufficiency of the consideration, the seal, it is declared, shall be only presumptive evidence. The memorandum opinion in Baird v. Baird (145 N. Y. 659, 665), where it was said, among other things, that under section 840 of the Code of Civil Procedure “ it is now open to the maker of such an instrument to allege and prove the absence of any consideration in fact as a defense,” did not receive the approval of a majority of this court. The question of sufficiency of consideration has always been open to inquiry and the statute is merely declaratory of the common law, but the “ consideration implied by the seal cannot be impeached for the purpose of invalidating the instrument or destroying its character as a specialty.” (McMillan v. Ames, supra; Fuller v. Artman, supra.) Whether the intent and effect of chapter 708 of the Laws of 1935 (in effect September 1, 1935) was to destroy the conclusive effect of the seal on a written instrument, we are not here called upon to determine. The instrument in suit was executed and delivered prior to the time that act went into effect.

. The instrument in suit recited a consideration of one dollar which the defendant “ acknowledged and confessed ” she had received. Oral evidence was admitted, over plaintiff’s objection and exception, to the effect that neither the one dollar nor any other sum was paid by Chenault to defendant. It was upon this testimony that the court found and concluded that the instrument was without consideration, a mere offer, and revocable at any time before acceptance. Such evidence did not warrant the facts found nor the conclusion drawn. (Lawrence v. McCalmont, 2 How. [U. S.] 426.) Sometimes equity will inquire into the real consideration for the purpose of applying equitable principles on questions of enforcement arising in actions for specific performance. Equity will not refuse, however, to decree specific performance solely on the ground of inadequacy of consideration. (Pomeroy on Equity Jurisprudence [4th ed.], vols. 2 and 5, §§ 926, 2212.) There must be other grounds. But paroi evidence is inadmissible to question or contradict the recited consideration in the sealed instrument for the purpose of showing that it was void for lack of consideration and thus to defeat it. (Fuller v. Artman, supra; McMillan v. Ames, supra; M’Crea v. Purmort, 16 Wend. 460; Grout v. Townsend, 2 Den. 336; Ruppert v. Singhi, 243 N. Y. 156, 159; Jamestown Business College Assn. v. Allen, 172 N. Y. 291; Poe v. Ulrey, 233 Ill. 56.) In Lawrence v. McCalmont (2 How. 426, at p. 452) Mr. Justice Story said: “ The second [defense] is, that the payment of the one dollar is merely nominal and not sufficient to sustain the guarantee, if it had been received; and it is urged that it was not received. As to this last point, we feel no difficulty. The guarantor acknowledged the receipt of the one dollar, and is now estopped to deny it. If she has not received it, she would now be entitled to recover it. A valuable consideration, however small or nominal, if given or stipulated for in good faith, is, in the absence of fraud, sufficient to support an action on any paroi contract; and this is equally true as to contracts of guarantee as to other contracts. A stipulation in consideration of one dollar is just as effectual and valuable a consideration as a larger sum stipulated for or paid.”

It is unnecessary to discuss or decide whether an option to purchase mineral rights and the like carries with it an interest in the land itself. It is sufficient here to say that the option in suit carries with it a presently existing contract right as valuable as the property promised to be conveyed and partakes of the incident of assignability. The option was not necessarily personal in its character. It did not involve the integrity or skill of Chenault, nor Was it possible to say, as found by the trial court, that, in executing and delivering the agreement, defendant relied on the credit of Chenault. Assignment was not barred by any express terms contained in the instrument and it was not forbidden by statute or public policy. It was, under the general rule prevailing in this State as to assignability of property rights, assignable by Chenault. (Devlin v. Mayor, etc., 63 N. Y. 8; Rosenthal Paper Co. v. National Folding Box & Paper Co., 226 N. Y. 313, 325.) Aside from the above, the parties asserted in the instrument that this agreement is binding upon the respective parties, personal representatives, heirs, and assigns,” and its assignability, within the clear and expressed intent of the parties, was thereby established.

Plaintiff accepted the offer in due form within the time required. For reasons that are clear, defendant could not decline to acknowledge that the acceptance was sufficient. By the express terms of the instrument, Chenault or his assignee was not required to pay the whole or any part of the purchase price or to execute and deliver or tender a mortgage as security for any unpaid part thereof until “ the time of the closing of the sale and title.” As a preliminary to closing and within thirty days after plaintiff elected to buy, defendant agreed to furnish the necessary evidence showing merchantable title with abstracts going back at least forty years and to prepare the necessary instruments of conveyance. Upon receipt of the evidences of title and abstracts, plaintiff thereafter had a reasonable time to perform. Before he was required to act, defendant refused to perform. He had accepted the offer and had agreed to perform according to the express terms of the contract. Further or different tender was unnecessary, for equity will not require the performance of a useless act. In plaintiff’s written acceptance, he stated that he elected to pay twenty per cent of the purchase price on delivery of the deed and give back a mortgage for the unpaid balance, as he had a right to do under the terms of the contract. The contract further provided, however, that Chenault might, at his option, pay the entire purchase price. Prior to the submission of the case, a tender was made to defendant of the entire sum of $115,000 in cash, which tender was kept alive. By the terms of the contract and because of this tender the defendant could no longer object to completing the transaction and making the conveyance, as she promised to do, upon any theory that she could not be compelled to accept a part of the purchase price and the mortgage of Cochran as security for the unpaid balance without the accompanying bond of Chenault. It is sufficient to say that the terms of the written contract between the parties are clear and unequivocal. The contract provided that a mortgage covering the property conveyed should be her security and no mention of a bond by any one is made.

The written option, being under seal and founded upon a valid consideration, could not be withdrawn, revoked or rescinded at will by defendant within the time within which she agreed that Chenault and his assigns might accept. (Fuller v. Artman, supra; Thomason v. Bescher, 176 N. C. 622; 2 A. L. R. note, p. 631, 6 R. C. L. [Contracts] § 26.) It was a unilateral contract to convey, subject only to one express condition. (Heller v. Pope, 250 N. Y. 132.) When Chenault’s assignee gave written notice within the time specified that he elected to buy, the condition was fulfilled and the unilateral option was thereby converted into a bilateral contract. (Heller v. Pope, supra; Thomason v. Bescher, supra.) The contract was reasonably certain in its terms, its subject-matter, its purposes and its parties. By acceptance, it became mutual in its obligations and its remedies. Upon the defendant’s refusal to perform, the contract was enforcible by the assignee in an action for specific performance, in the absence of any available and satisfactorily established defense or counterclaim of an equitable character existing against the assignee or against Chenault before notice to defendant of the assignment. (Trustees of Hamilton College v. Roberts, 223 N. Y. 56; 4 Pomeroy on Equity Jurisprudence [4th ed.], § 1405; 2 Williston on The Law of Contracts [Rev. ed., 1936], § 415. Cf. State Bank v. Central Mercantile Bank, 248 N. Y. 428, 434-436.)

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

Crane, Ch. J., Lehman, O’Brien, Hubbs and Lough-ran, JJ., concur; Finch, J., taking no part.

Judgments reversed, etc.


text:
    The People of the State of New York, Respondent, v. Harry Posner, Appellant.

      Argued January 15, 1937;
    decided March 9, 1937.

      Samuel J. Ohringer for appellant.
    Defendant acted as a dealer, not as a broker, and the People failed to prove him guilty of bucketing and violating section 390 of the Penal Law. (Wills v. Investors Bankstocks Corp., 257 N. Y. 451; Matter of Bankers Capital Corp., 51 Fed. Rep. [2d] 737; Levy v. Leonard, 231 App. Div. 763; Wilson v. Morley, 236 App. Div. 546; People v. Crossman, 241 N. Y. 138; Johnson v. Winslow, 155 Misc. Rep. 170; Coolidge v. Old Colony Trust Co., 259 Mass. 515; Broderick v. Aaron, 153 Misc. Rep. 791; Leahy v. Lobdell, Farwell & Co., 80 Fed. Rep. 665; Pimpinello v. Swift & Co., 253 N. Y. 159; Community Nat. Corp. v. Kahle, 233 App. Div. 334.)

      Charles P. Sullivan, District Attorney (John H. W. Krogmann of counsel), for respondent.
    The defendant was proven guilty of a violation of section 390 beyond a reasonable doubt. (People v. Crossman, 241 N. Y. 138.) The evidence of other transactions testified to was properly received. (People v. Molineux, 168 N. Y. 264; People v. Miller, 169 N. Y. 339.)
   Crane, Ch. J.

The defendant has been convicted of a violation of section 390 of the Penal Law. The indictment charged the defendant Harry Posner, as manager of H. G. Woods & Co., Inc., of having made a contract with one Rowan to purchase for her ten shares of Standard Brands stock at $20 per share, totaling $200, and accepting $100 in part payment, intending that such contract was to be terminated, closed and settled on the basis of market quotations, without intending a bona fide purchase and sale of the same.

Another count, alleging the same facts, charged him with keeping, conducting and operating a bucket shop.

Mrs. Rowan testified that through agents and representatives of H. G. Woods & Co., which had an office in Jamaica, Long Island, she bought ten shares of Standard Brands stock at $20 a share and gave her check for $100 in part payment. She says the firm was to sell it at a profit for her; that about three days later the man with whom she did business stated that the stock had gone up eight points and he would sell it. She told him to sell the ten shares and buy Elko Chief gold mine stock, 400 shares, on which she was given a credit of $200 on account, and gave to Woods & Co. an additional check for $400. The testimony is the following:

Q. Did you send them a check for $400 to pay for the Elko Chief gold mine stock? A. Yes, your Honor; that is the check.

“ Q. Did you ever get the stock? A. Yes; I have the stock right here.

Q. Have you got that certificate of stock, the Elko Chief gold mine stock with you? A. I have, yes.”

Keeping in mind that the charge against the defendant was the violation of section 390 of the Penal Law, which prohibits a broker from taking customers’ orders and failing to execute them, intending to settle on the rise or fall of the stock market quotations, we are of the impression that incompetent evidence was received against the defendant to such an extent that the jury was inclined to believe, in fact could not help but believe, that the defendant was charged with and guilty of failing to make delivery of the stock purchased. Thus, Mrs. Rowan was asked on direct examination by the District Attorney; “ Q. Did you ever receive any shares of Standard Brands stocks? A. I never did; never did.”

This in itself might not have been incompetent testimony, or at least might have been disregarded even if it were incompetent, were it not for other evidence of like nature, received from other witnesses who were customers. Mrs. Rowan did not receive the Standard Brands stock because she never asked for it and had never paid the balance due on it. She told Woods & Co. to sell it and put the money in Elko Chief gold mine stock, the certificate of which she later received. She may have been cheated in taking stock of little or no value, but this is not the crime with which the defendant is charged.

Other customers were called as witnesses to show their dealings with Woods & Co. or with the defendant. Woods & Co. was the defendant. He was doing business in the name of the corporation; he was the owner of the business. These witnesses were called for the purpose of showing a scheme of the defendant to carry on a bucket shop or brokerage transactions which were fictitious in that no stocks were bought, the intention being to settle according to market quotations. The witnesses, however, were questioned for the purpose of showing that the stocks Which they ordered or bought were never received. The fact is that these witnesses bought stock or ordered stock on margin and were not entitled to receive it until they paid the balance. This they never did.

Mrs. Mary Duggan on May 15,1933, purchased through H. G. Woods & Co. ten shares of General Motors stock at $23 a share.

Q. Now, Mrs. Duggan, when you purchased these ten shares of General Motors at $23 a share and paid $100 on account — did you pay. $100 on account? A. Yes, sir.

“ Q. Did you ever receive the delivery of the 10 shares of General Motors stock? A. I did not.”

There is nothing to show that she was entitled to receive this stock or that she had paid the balance due on it.

Mrs. Mary Dwan testified:

Q. How much did you pay on account of that purchase of 10 shares of General Motors to H. G. Woods & Co.? ” to which no answer was made; but the following questions were asked by the court:

“ Q. Did you receive a confirmation?

“ Q. Did you receive this paper? A. I received that.

Q. Before you received that had you paid $100 on account of the ten shares? A. Yes, sir.

Q. On June 2nd, 1933, did you purchase from H. G. Woods & Co., 20 shares of General Motors at 25 3/4 a share? A. Yes, sir.

Q. And also 10 shares of General Motors at 27 3/8 a share? A. Yes, sir.

Q. Did you receive these two confirmations upon the purchase of the 30 shares of General Motors? A. Yes, sir.

“ Q. How much did you pay H. G. Woods & Co. at that time? A. The boy came to my house and I paid him at different times; I paid him $200 one day and in a few days I gave him $200 again.

Q. Did you ever receive at any time delivery of the General Motors stock? A. Never.”

The fact is the stock cost $770 and she only paid $400 on it. She was not entitled to receive the certificates and yet the jury by these questions was led to believe that the defendant did something wrong in not delivering to her the General Motors stock.

Anna Bartel testified: Q. Mrs. Bartel, on June 12th, 1933, did you purchase from H. G. Woods & Co., 10 shares of Standard Brands at 20 3/4 a share? A. I did.”

She received a letter from H. G. Woods & Co., marked in evidence, which reads as follows:

Miss Anna Bartel 3729-78th Street Jackson Heights.

Dear Miss Bartell: We desire to acknowledge with thanks receipt of your order for 10 shares of Standard Brands at 20 3/4 together with check for $100 on account thereof. Thanking you for this item of business, we beg to remain

“ Very truly yours,

“ H. G. WOODS & CO.”

She then testified:

Q. Miss Bartel, did you give H. G. Woods & Co. the sum of $100 as mentioned in this letter June 12th? A. I did.

Q. Did you ever receive delivery of the 10 shares of Standard Brands from this H. G. Woods & Co. or anybody else? A. I did not.

Q. You may examine.”

This witness was called for no other purpose than to prove that she did not get the stock she purchased. This is all of her testimony. For what purpose was it offered? She was not entitled to receive her stock until she had paid for it, and she had only paid $100 on account.

Some of these questions were not objected to, but exceptions were taken to this line of proof and the receiving in evidence of these other transactions. These we deem sufficient to raise the point in question. While it may be that other similar transactions can be shown in a case like this in order to prove that a broker is maintaining a bucket shop and carrying on the business of broker through fictitious purchases and sales, yet the evidence must be confined to the charge. The repeated questions put to customers showing that they had not received the stock which they had purchased, when in fact they had not paid for it and were not entitled to receive it must necessarily, in our judgment, have led the jury to believe that the failure to deliver was a wrongful act, or at least part of the crime with which the defendant had been charged.

There is evidence which would justify a jury in believing the defendant to be guilty of the crime charged. The testimony of Posner before the Attorney-General and of his associate, Harold G. Woods, on the trial of this case would lead one to believe that the authorities were right in prohibiting him from carrying on his business; yet we must give to any defendant the right to be tried for the crime with which he is charged, and upon evidence proving or tending to prove that crime, uninfluenced by irrelevant facts and circumstances which tend to prejudice or mislead the jury. Issues must be left clear, not smothered or in a haze. There are other errors which we have considered, but the one here stated is sufficient to explain why we are obliged to reverse this conviction and send the case back for a new trial.

The judgment should be reversed and a new trial ordered.

Lehman, O’Brien, Hubbs, Loughran and Rippey, JJ., concur; Finch, J., taking no part.

Judgment reversed, etc.


text:
    The People of the State of New York, Respondent, v. Yui Kui Chu, Appellant.
    Submitted January 7, 1937;
    decided March 9, 1937.

      Abraham Wilson for appellant.
    The trial court took from the jury the question of malice. The various rulings and statements made by the trial judge during the course of the trial and in his charge invaded the jury’s province. Failure to leave the question of malice for the jury constituted reversible error. (People v. Croswell, 3 Johns. Cas. 337; Parmiter v. Coupland, 6 M. & W. 105; State v. Brock, 39 S. E. Rep. 359; Hunt v. Bennett, 19 N. Y. 173; People ex rel. Carvalho v. Warden, 144 App. Div. 24; 212 N. Y. 612; People v. Hebberd, 96 Misc. Rep. 617.) The trial judge adopted the translation proffered by the People as the correct interpretation of the article complained of, thus resolving the issue of fact which was for the jury. (People v. Ohanian, 245 N. Y. 227; People v. McDonald, 159 N. Y. 309; People v. Johnston, 228 N. Y. 332; Newman v. People, 63 Barb. 630; People v. Biddison, 136 App. Div. 525; 199 N. Y. 584.) The trial judge assumed and, for all practical purposes of the trial, ruled that the alleged libelous publication charged the membership corporation referred to with the commission of a crime. The court unduly delimited and circumscribed the admission of evidence tending to show that the matter charged as libelous was true and was published with good motives and for justifiable ends. (People v. Sherlock, 166 N. Y. 180; People v. Hebberd, 96 Misc. Rep. 617; Osota v. Long Island R. R. Co., 246 N. Y. 388; People v. Cornell, 126 App. Div. 151.)

      William Copeland Dodge, District Attorney (Erwin N. Schapira of counsel), for respondent.
    The publication was libelous per se. (Klinck v. Colby, 46 N. Y. 427; Slayton v. Hemken, 91 Hun, 582; Maybee v. Fisk, 42 Barb. 326;
      Coleman v. Playsted, 36 Barb. 26; Alderson v. Kahle, 73 W. Va. 690; Turton v. N. Y. Rec. Co., 144 N. Y. 144; Bergmann v. Jones, 94 N. Y. 51; Brooks v. Harison, 91 N. Y. 83; Rose v. Imperial Engine Co., 110 App. Div. 437; Van Ingen v. Star Co., 1 App. Div. 429; People v. Sherlock, 166 N. Y. 180; Roberson v. Rochester F. B. Co., 171 N. Y. 538; People v. Stark, 59 Hun, 51; 136 N. Y. 538; Comm. v. Snelling, 32 Mass. 321; State v. Talbot, 196 Mich. 520; State v. Cooper, 138 Iowa, 516; State v. Sheridan, 14 Ida. 222.) The publication was not justified. (People v. Eastman, 188 N. Y. 478; People v. Stokes, 30 Abb. N. C. 200; People v. Sherlock, 166 N. Y. 180; Commonwealth v. Snelling, 32 Mass. 337; People v. Talbot, 196 Mich. 520; Bingham v. Gaynor, 203 N. Y. 27; Skinner v. Powers, 1 Wend. 451; Stilwell v. Barter, 19 Wend. 487; Cooper v. Barber, 24 Wend. 105.) The publication was not excused. (People v. Sherlock, 166 N. Y. 180; People v. Hebberd, 96 Misc. Rep. 617; Hamilton v. Eno, 81 N. Y. 116; Mattice v. Wilcox, 147 N. Y. 624; Bingham v. Gaynor, 203 N. Y. 27; Cortright v. Anderson, 208 App. Div. 1; Triggs v. Sun Printing & Pub. Assn., 179 N. Y. 144.) As this is an appeal from a judgment of the Appellate Division, affirming a judgment of conviction, the Court of Appeals cannot review the Weight or sufficiency of the evidence, or substitute its judgment upon the facts for that of the jurors. (People v. Rosenzweig, 265 N. Y. 323; People v. Pesky, 254 N. Y. 373; People v. Malkin, 250 N. Y. 185; People v. McCarthy, 250 N. Y. 358; People v. Sugarman, 248 N. Y. 255.)
   Rippey, J.

The defendant was the editor and publisher of a newspaper, printed in the Chinese language and known as the Chinese Journal, with an average daily circulation within the city of New York and elsewhere of 6,500 copies. He was indicted in New York county and tried and convicted in the Court of General Sessions of the crime of publishing a libel in his paper on August 11, 1933, concerning the Chinese Charitable and Benevolent Associatian of the City of New York, a Chinese membership corporation organized and operating under the laws of New York State, and its secretary, one Chin See Tong. The name of the corporation, in the Chinese language, was Chung Wah Kung Saw.

The respondent alleged that the article, both literally and in effect and by innuendo, falsely stated that the officers of the corporation were parasites and that it and its officers were the instruments of a group of degenerates whose purpose was, under the guise of lawful authority, to oppress and to rob and swindle the Chinese people in this country of their wealth. It was further alleged that the publication of the article was grounded in malice and that its publication tended to and did injure the corporation in the pursuit of its lawful business or occupation. If the article contained the statements claimed, if its publication was malicious and tended to injure the corporation in its business or occupation, its publication constituted a criminal libel within the definition contained in section 1340 of the Penal Law. Having such a tendency and effect, the publication was deemed to be malicious unless justification or excuse were shown therefor. (Penal Law, § 1342.) If the matter charged to be libelous was true and was published with good motives and for justifiable ends, its publication was justified. If the statements or innuendo in the publication were false, if honestly made in the belief of their truth and upon reasonable grounds for this belief and if it consisted of fair comment upon the conduct of the corporation in respect of public affairs, the publication was excused. (People v. Sherlock, 166 N. Y. 180.)

The Chinese Charitable and Benevolent Association of the City of New York was organized in 1890. The puiposes for which it was formed, as stated in its certificate of incorporation, were to ameliorate the condition of the Chinese poor in and about the City of New York; to care for and help sick and destitute Chinamen in and about the City of New York; to give advice and pecuniary assistance as required to reputable and deserving China-men in and about the City of New York; and generally to aid and succor all worthy Chinese who may be found to be in need of assistance.” But its activities were extended to unifying the Chinese in this country, to the arbitration of problems affecting the Chinese, and to general charitable and public welfare duties. It had an English secretary whose duties were to take care of English correspondence, to negotiate with and to contact American people, to serve as interpreter, to investigate Chinese laundries, Chinese restaurants, and the location of stores, and to take charge of all kinds of cases. Under its by-laws, membership fees were imposed, but it collected other fees for special services of variable amounts according to the character of such services rendered or promised and ability to pay. In August, 1933, the association had over ten thousand members in Greater New York and had branches in other States. It was asserted that it protected its members from competition, the fee for protection ” varying according to circumstances. Defendant attempted to show that such “ protection ” was neither possible, necessary, nor forthcoming, although large fees were demanded and exacted therefor, that ignorant and poor Chinese were oppressed by exactions which, he claimed, were imposed upon them, and that exposure by publication of the truth would awaken the Chinese to the fact that the exactions were neither necessary nor proper nor legal.

The article in question was printed in Chinese characters and so set out in the indictment. There was also inserted in the indictment a translation of the article into the English language, which the prosecution asserted was correct and charged the corporation with criminal activities. The court interpreter was called upon to make one of the translations, which he gave from the witness stand without previously reading or previous examination of the alleged libelous article. Defendant’s counsel sought to cross-examine him at once as to its correctness, but the court refused to permit such a cross-examination until after the interpreter had prepared himself, to which ruling an exception was duly noted. The court instructed the witness to examine the translation set up in the indictment, to compare it with his own translation, and limited the cross-examination to “ whether or not his translation is in substance and to the point of what is stated in the indictment, even though the exact phraseology differs somewhat.” The court recessed and the following morning defendant’s counsel attempted to cross-examine the witness. The court adhered to the ruling as to the scope of such an examination, took the witness in hand, and the following appears in the record:

“ By the Court:

“ Q. I asked you yesterday to compare your translation as rendered to the jury with the translation as it appears in the indictment. I assume that that copy was given to you. Did you have it? A. Yes, I did.

“ Q. You examined them both? A. I did.

“ Q. Did your inspection of the translation of the one appearing in the indictment in any way cause you to change your own translation? A. No.

“ Q. Did you notice any difference in substance between your translation and the translation as it appeared in the indictment from the Chinese language standpoint?

“ A. I did not find any —■

“ Mr. Tompkins: Just a moment.

“ A. — difference.

“Mr. Tompkins: Just a minute. * * * May I object to the question, if your Honor please?

“ The Court: Objection overruled.

“ Mr. Tompkins: Exception. *

“ A. I did not find any difference in the substance of my translation and the translation of Mr. Young. * * *

“ Q. Well, then, as I understand you, your written translation would approach more nearly the written translation appearing in the indictment than was your spoken word? A. That is right.-

Mr. Tompkins: May I have an exception to that last question and answer?

“ The Court: All right.”

Defendant offered evidence on his own account as to the proper translation of the article. His English version was radically different from that of the prosecution. If adopted by the jury, it might have relieved the defendant of any responsibility criminally for its publication. Yung, who formulated the English translation which was set up in the indictment, was not called to the witness stand prior to the motion to dismiss at the close of the People’s case. He was called on rebuttal and testified that the translation contained in the indictment was correct. Thus, the court considered the sole question to be as to whether the translation set up in the indictment was correct, and limited the proof to that question; if it was correct, the court concluded that the People had established their case, for, the court said, the publication as thus translated was libelous per se, inasmuch as it charged the corporation with the commission of a crime. By no such limited proof could the question be determined whether the publication was malicious and had the effect and meaning required by section 1340 of the Penal Law to constitute a libel. It did not depend upon the linguistic gymnastics of professional translators as to shades of meanings of particular characters or upon any personal construction they might put on such characters or what they said it meant in English. Whether the publication was libelous depended upon the purport and meaning of the Chinese language used according to the common understanding of the Chinese to whom it was addressed and by whom it could be read and understood. (Hossbach v. Behr, 139 App. Div. 793; Wackier v. Quenzer, 29 N. Y. 547.) At the close of the People’s case, defendant moved to dismiss the indictment on the ground, among others, that there was no evidence upon which the jury could find the publication constituted a libel within the meaning of section 1340 of the Penal Law. The motion was denied. The motion was renewed at the close of the whole case and again denied. An exception was noted in each instance. The court charged the jury, in substance and effect, that, if they adopted the English translation contained in the indictment, the publication was libelous per se, and, in the absence of justification or excuse, a verdict of guilty must be found. This charge was erroneous. (Dolloway v. Turrill, 26 Wend. 383.) By the Constitution, the jury are made the sole judges of the law and the facts. (N. Y. Const, art. 1, § 8.) An exception to the charge was duly noted.

The court excluded all evidence offered by the defendant by which he sought to establish that the matter charged as libelous was true and that the publication was with good motives and for justifiable ends, on the ground that, inasmuch as the publication according to its English translation contained in the indictment charged the corporation with the commission of a crime, the only evidence admissible was proof by defendant of the commission by the corporation of a crime which would justify the revocation of its charter. It was not necessary that the article published should charge the association with the commission of a crime to authorize an indictment and prosecution and conviction within the definition set out in the statute. If we adopt any of the translations as a guide, the charge was general, not specific. The publication must be read as a whole, and justification was required to be as broad as the charge. (Stilwell v. Barter, 19 Wend. 487, 489; Fero v. Ruscoe, 4 N. Y. 162; Lanpher v. Clark, 149 N. Y. 472.) The defendant was not limited to proof that the corporation had committed a specific crime to enable him to justify. Whether the publication charged the corporation with the commission of a crime or not, it might have been established, if possible, by competent evidence that the matter charged as libelous was true and was published with good motives and for justifiable ends. (Dolloway v. Turrill, supra; People v. Sherlock, supra.) Had it so appeared to the jury, the acquittal of defendant was mandatory. (N. Y. Const, art. 1, § 8.) The exclusion by the court of evidence tending to show justification was clearly erroneous (People v. Cornell, 126 App. Div. 151), and the exception was well taken.

Appellant urges that he has not had a fair trial and that the verdict is contrary to the evidence in the case. Those questions are not open for our consideration. (People v. Huson, 187 N. Y. 97; People v. McCarthy, 250 N. Y. 358, 364.) Other questions of law, both upon the rulings of the court upon the admission or exclusion of evidence and upon the charge, duly preserved by exceptions, have been presented. We do not deem it necessary to consider them, in view of the conclusions reached as indicated above.

The judgments should be reversed and a new trial ordered.

Crane, Ch. J., O’Brien, Hubbs and Loughran, JJ., concur; Lehman and Finch, JJ., taking no part.

Judgments reversed, etc.


author: O’Brien, J.

text:
    Sarah Zuroff, Respondent, v. Westchester Trust Company et al., Appellants, Impleaded with Others.
    Argued January 6, 1937;
    decided March 9, 1937.

      Robert W. Crawford and Gerald Donovan for appellants.
    Plaintiff must allege and prove that a claim has been duly filed before the expiration of the time limited for filing claims. (Cons. Laws, ch. 2, §§ 72, 76; People v. American Loan & Trust Co., 172 N. Y. 371; Van Tuyl v. Scharmann, 208 N. Y. 53; Matter of Egan v. Broderick, 258 N. Y. 334; Matter of Societa, etc., Di Savoia v. Broderick, 260 N. Y. 260; Schwarz v. Broderick, 269 N. Y. 610.) The time to file a proof of claim cannot be extended by order or otherwise. (Matter of Bank of United States, 269 N. Y. 578; Schnibbe v. Glenz, 245 N. Y. 388; City of New York v. Matthews, 180 N. Y. 41; Rochkind v. Perlman, 123 App. Div. 808; Stone v. Auerbach, 133 App. Div. 75; Matter of Silk, 55 Fed. Rep. [2d] 917; Matter of Killanna Realty & Construction Co., 68 Fed. Rep. [2d] 718; Matter of Meyer, 181 Fed. Rep. 904; Morgan v. Hamlet, 113 U. S. 449.) The plain language of the statute cannot be disregarded even though it be harsh or detrimental to some claimant. (Matter of Hering, 196 N. Y. 218; McKuskie v. Hendrickson, 128 N. Y. 555; McCluskey v. Cromwell, 11 N. Y. 593; People v. Woodruff, 32 N. Y. 355; Seeley v. Clark, 78 N. Y. 220; Matter of Peck, 168 Fed. Rep. 48; Matter of Paine, 127 Fed. Rep. 246.)

      Michael Popper for respondent.
    The complaint sets forth a cause of action against appellants. (Bank of United States v. International Milling Co., 259 N. Y. 77; People
      v. City Bank of Rochester, 96 N. Y. 32; Matter of Arcadia Trust Co., 268 N. Y. Supp. 759.) Sections 72 to 78 of the Banking Law (Cons. Laws, ch. 2) are not a bar to recovery. (Gilbert v. Ackerman, 159 N. Y. 118; Adam v. Manhattan Life Ins. Co., 204 N. Y. 357; Matter of Egan v. Broderick, 258 N. Y. 334.)
   O’Brien, J.

The complaint alleges that defendant Westchester Trust Company, in order to induce plaintiff to purchase a mortgage participation certificate, fraudulently represented to her that the mortgagor owned certain premises, that the mortgage held by the trust company constituted a first mortgage and that plaintiff, in reliance upon such representations, purchased a first mortgage participation certificate. Defendant Superintendent of Banks took possession as liquidator of the business of the trust company January 2, 1934, and the complaint alleges that on the same day, in compliance with section 72 of the Banking Law (Cons. Laws, ch. 2), he mailed a notice to all creditors of the trust company whose names appeared on its records to file claims with him on or before February 2, 1934. Plaintiff alleges that her name did not appear on the records as a creditor or claimant, that she did not receive a notice to file a claim, that she failed to file a claim “ as required by section 72 ” and failed to comply with “ the requirements of section 76 ” for the reason that she did not discover the fraud practiced upon her until long after the expiration of the date fixed for the filing of such claim ” and long after the date “ fixed to comply with the requirements of section 76.” She alleges further that in May, 1935, after discovery of the fraud, she elected to rescind the sale of the certificate and in March, 1936, she filed a claim with the Superintendent demanding the return of the purchase price. This action was commenced April 9, 1936.

The certified question requires an answer whether the complaint states facts sufficient to constitute a cause of action.

Section 72 directs the Superintendent to “ notify all persons who may have claims ” against the corporation to present them and make proper proof within four months of the date of the notice. Inasmuch as the complaint alleges that plaintiff’s name did not appear as a creditor on the books of the corporation, the Superintendent was under no duty to mail the notice to her. Notice by publication to all other creditors is sufficient (Banking Law, § 72; Matter of Societa, etc., Di Savoia v. Broderick, 260 N. Y. 260), and the complaint fails to allege that the Superintendent neglected to publish the notice.

That provision of section 72 which requires notice by the Superintendent of a specified time as the last date for the presentation and proof of claims does not constitute a statute of limitations but merely establishes a condition precedent. (Matter of Bank of United States, 271 N. Y. 660.) The additional provision in the same section, “ The superintendent shall have no power to accept any claim presented after the date specified in such notice as the last date for presenting claims,” operates as a prohibition. Since the complaint alleges that plaintiff failed to file a claim as required by section 72 and likewise failed to comply with the requirements of section 76 of the Banking Law, this complaint does not state a cause of action. Section 76 provides: “ When the time within which the superintendent is required to accept or reject claims has expired and at any time within six months thereafter, a claimant whose claim has been duly filed and has not been accepted by the superintendent, or any person whose account payable as shown by the books and records, as to which no claim has been presented, has not been accepted by the superintendent, may institute and maintain an action thereon against such corporation or banker. No action shall be maintained against such corporation or banker while the superintendent is in possession of its affairs and business unless brought within the period of limitation specified in this section. In all actions or proceedings instituted against such corporation or banker while the superintendent is in possession of its property and business, the plaintiff shall he required to allege and prove that the claim upon which the action is instituted was duly filed and that eighty days have elapsed since the expiration of time for filing said claim and that said claim has not been,accepted * * * or in the case of an action upon an account as to which no claim has been presented the plaintiff shall be required to allege and prove that such account appeared upon the books and records * * No actions or proceedings may be taken for the enforcement of claims not filed within the time prescribed. (Matter of Societa, etc., Di Savoia v. Broderick, supra.) The fact that the circumstances constituting the basis of a claim may not be discovered before the expiration of the time for filing claims does not authorize a filing and proof at a later date (Matter of Bank of United States, 269 N. Y. 578) nor, since section 72 does not constitute a statute of limitations, does infancy affect the requirement of compliance with the statute or extend the time specified in the Superintendent’s notice. (Schwarz v. Broderick, 269 N. Y. 610.) The same rule must necessarily apply to the late discovery of fraud. The purpose of these sections of the Banking Law is to provide a comprehensive and exclusive means for ascertaining claims and for a speedy distribution of assets of a moneyed corporation in liquidation. (Matter of Egan, 258 N. Y. 334, 340; Matter of Societa, etc., Di Savoia v. Broderick, supra.)

The order of the Appellate Division should be reversed and the judgment of the Special Term affirmed, with costs in this court and in the Appellate Division. The certified question is answered “ No.”

Crane, Ch. J., Hubbs, Loughran and Rippey, JJ., concur; Lehman and Finch, JJ., taking no part.

Ordered accordingly.


text:
    Augusta C. Ottmann, as Administratrix of the Estate of Milford H. Ottmann, Deceased, Appellant, v. Village of Rockville Centre et al., Respondents, Impleaded with Another.
    Argued January 13, 1937;
    decided March 9, 1937.

      John R. Vunk, Malcolm G. Bibby and Harold Ashare for appellant.
    The construction placed upon section 282-g of the Highway Law (Cons. Laws, ch. 25) by the Appellate Division is erroneous. (Miller v. Town of Irondequoit, 243 App. Div. 240; 268 N. Y. 578; Miller v. City of Albany, 286 N. Y. Supp. 326; Cohen v. Neustadter, 247 N. Y. 207; Leppard v. O’Brien, 225 App. Div. 162; Waller v. Harris, 20 Wend. 555.) Section 282-g of the Highway Law is by its express terms applicable to all classes of individuals sustaining injury to person or property by the negligence of the driver of a municipal owned vehicle. (McGovern v. City of New York, 235 N. Y. 275; Osborn v. Cardeza, 208 N. Y. 131; Rich v. Manhattan R. Co., 150 N. Y. 542.)

      Irwin T. Longworth, Jr., and William J. Sullivan for respondents.
    Section 282-g of the Highway Law was enacted for the benefit of persons who are strangers to the governmental service being rendered by a municipal owned vehicle; and it does not make the municipality liable for injuries to one member of a municipal department due to the negligence of another member of the department while both are engaged in the same governmental duty. (Miller v. Town of Irondequoit, 243 App. Div. 240; 268 N. Y. 578; Miller v. City of New York, 235 App. Div. 259; Sheldon v. Carpenter, 4 N. Y. 579.) If the operator of the fire truck was an employee of the village by reason of section 282-g of the Highway Law, the deceased also must be deemed to be an employee, and the village is not liable to one for the negligence of another. (Anthony v. Leeret, 105 N. Y. 591; Coon v. Syracuse & Utica R. R. Co., 5 N. Y. 492; Tinney v. Boston & Albany R. R. Co., 52 N. Y. 632.)
   O’Brien, J.

Milford H. Ottmann was a volunteer fireman of the village of Rockville Centre. While riding with other firemen on a fire truck belonging to the village and driven by Otto Stoye, a member of the same company, he was fatally injured in a collision between the truck and another motor car. The fire truck was at the time in use on official business and Stoye, the driver, was acting in the discharge of his duties and within the scope of his employment. Assuming the driver to be negligent and Ottmann free from negligence, the question of law remains whether the village is liable. Appellant relies upon the provisions of section 282-g of the Highway Law (Cons. Laws, ch. 25) which was in effect at the time of the fatal collision (now General Municipal Law, § 50-b).

Consideration of section 205 of the General Municipal Law (Cons. Laws, ch. 24) is essential for the purpose of ascertaining the intent of section 282-g of the Highway Law. Prior to the enactment of section 282-g, a municipal corporation was wholly exempt from liability for negligent acts of its employees while engaged in the performance of a governmental function. For the purpose of creating a partial remedy, at least so far as the operation of municipally owned vehicles is concerned, in behalf of those who were then without any redress, this section of the Highway Law was enacted. Its language does not imply an intent to afford additional protection to those for whom the Legislature had already provided. A contrary inference is natural. For many years antedating the enactment of section 282-g of the Highway Law, compensation for the death of a volunteer fireman resulting from injuries incurred in the performance of his duties was accorded to his personal representatives by section 205 of the General Municipal Law. Such compensation was available without regard to the fact that the fireman’s death may or may not have been caused by negligence of fellow-employees or others. It included negligence. In any event the remedy existed and there is no reason to infer that by the amendment to the Highway Law the Legislature intended to do more than to bestow a remedy upon victims or their representatives who would otherwise be without redress in the event of injury or death caused by the negligence of a municipal employee engaged in the performance of a government function.

The judgment should be affirmed, with costs.

Crane, Ch. J., Lehman, Hubbs, Loughran and Rippey, JJ., concur; Finch, J., talcing no part. Judgment affirmed.