author: Hubbs, J. Lehman, J.

text:
    The People of the State of New York ex rel. Marion A. B. Beck et al., Appellants, against Mark Graves et al., Constituting the State Tax Commission, Respondents.

      Argued March 6, 1939;
    decided May 23, 1939.

      Watson Washburn, Randolph E. Paul and Royal E. Mygatt for appellants.
    Since appellants’ income from Minnesota realty was not subject to New York State income tax according to the statute in force during the calendar years 1930 to 1933, and since such income was first subjected to tax by chapter 933 of Laws of 1935, such amendment, in so far as. it attempted to levy a tax retroactively on incomes received prior to the calendar year 1935, was unconstitutional, being an attempt to take property without due process of law, and also to deprive appellants of the equal protection of the laws. (Von Baumbach v. Sargent Land Co., 242 U. S. 503; Lake Superior Mines v. Lord, 271 U. S. 577.; People ex rel. Pierson v. Lynch, 237 App. Div. 763; 263 N. Y. 533; People ex rel. Cohn v. Graves, 246 App. Div. 335; 271 N. Y. 353; Untermyer v. Anderson, 276 U. S. 440; City Bank Farmers Trust Co. v. New York Central R. R. Co., 253 N. Y. 49; Forbes Boat Line v. Board of Commissioners, 258 U. S. 338; Ettor v.
      City of Tacoma, 228 U. S. 148; City of Seattle v. Kelleher, 195 U. S. 351.) Minnesota having imposed an income tax on these royalties in 1933, the imposition of a duplicate income tax on the same 1933 income by New York State contravenes ihe due process clause of both the New York State and the Federal Constitutions. (First Nat. Bank v. Maine, 284 U. S. 312; Shaffer v. Carter, 252 U. S. 37; Travis v. Yale & Towne Mfg. Co., 252 U. S. 60; Oliver Iron Mining Co. v. Lord, 262 U. S. 172; Frick v. Pennsylvania, 268 U. S. 473; Farmers’ Loan & Trust Co. v. Minnesota, 280 U. S. 204; Baldwin v. Missouri, 281 U. S. 586; Beidler v. South Carolina Tax Comm., 282 U. S. 1; Wheeling Steel Corp. v. Fox, 298 U. S. 193; Safe Deposit & Trust Co. v. Virginia, 280 U. S. 83; City Bank Farmers Trust Co. v. Schnader, 293 U. S. 112; Senior v. Braden, 295 U. S. 422.)

      John J. Bennett, Jr., Attorney-General (Joseph M. Mesnig of counsel), for respondents.
    The 1935 amendment of section 359 of the Tax Law (Cons. Laws, ch. 60) was purely a clarifying amendment and imposed no new or additional tax. (People ex rel. Pierson v. Lynch, 237 App. Div. 763; 263 N. Y. 533; 293 TJ. S. 52; People ex rel Cohn v. Graves, 246 App. Div. 335; 271 N. Y. 353; 300 U. S. 308.) An income tax, measured by a resident’s entire net income, including rents and royalties from real property located outside the State, involves no infringement of the taxpayer’s rights under the Constitution of the United States or of the State of New York. (New York ex rel. Cohn v. Graves, 300 U. S. 308; Guaranty Trust Co. v. Virginia, 305 U. S. 19.)
   Hubbs, J.

Appellants, husband and wife, during the time here in question, were residents of this State. Each owned an interest in ore lands located in the State of Minnesota. The lands were being operated under mining leases, and they, as fee owners, received from the lessees royalties based on the tonnage of ore removed. For the years 1930 and 1931 they paid a State income tax on the amount of royalties received. In 1933 a claim was duly made against the State for a refund of the 1930 and 1931 taxes so paid. In a joint return, filed for 1933, appellants did not include in the statement of taxable income the royalties, although they stated the amount of such royalties. The State assessed an additional tax upon such royalties and appellants paid it under protest. Since January 1, 1933, the State of Minnesota has imposed an income tax on royalty income of non-residents received from mining leases on lands located in that State.

The income taxes assessed against appellants for the years 1930, 1931 and 1933 were assessed under section 359 of the Tax Law (Cons. Laws, ch. 60), as amended in 1935. (Laws of 1935, ch. 933.) This section, as amended, reads (new matter italicized):

§ 359. The term ' gross income ’:
“1. Includes gains, profits and income derived from salaries, wages or compensation for personal service, of whatever kind and in whatever form paid, or from professions, vocations, trades, businesses, commerce, or sales, or dealings in property, whether real or personal, and whether situated within or without the state, growing out of the ownership or use of or interest in such property; also from interest, rent (-including rent derived from real property situated outside the state), dividends, securities, or the transaction of any business carried on for gain or profit, or gains or profits and income derived from any source whatever, including gains or profits or income derived through estates or trusts by the beneficiaries thereof, whether as distributed or as distributable shares, it being intended to include all of the foregoing items, without regard to the source thereof, location of the property involved, or any other factor, except only a case where the inclusion thereof would be violative of constitutional restrictions. The amount of all such items shall be included in the gross income for the taxable year in which received by the taxpayer, unless, under the methods of accounting permitted in this article, any such amounts are to be properly accounted for as of a different period; but
§ 2. This ad shall beretroadive to January first, nineteen hundred nineteen.
§ 3. This act shall take effect immediately.”
(May 16, 1935)

Prior to the amendment the case of People ex rel. Pierson v. Lynch (263 N. Y. 533; writ of certiorari dismissed, 293 U. S. 52) came before this court and it was decided that income received by residents of.this State from rental of real property located in another State was not taxable under section 359 as it then read.

Subsequent to the amendment the case of People ex rel. Cohn v. Graves (271 N. Y. 353; affd., 300 U. S. 308) was decided by this court, and it was held that rentals received by residents of this State in 1931 and 1932 from land situated in another State were taxable as income. In that case it was not contended that the assessments were void because of the retroactive clause contained in the amendment of section 359, and for that reason the United States Supreme Court did not pass upon that question.

Appellants here contend that the amendment of 1935 is void because it is violative of the “ due process ” clause of the State and Federal Constitutions (U. S. Const., 14th Amendt.; N. Y. Const., art. 1', § 6); also that it is unreasonable and arbitrary.

While it is true that not all retroactive statutes are void, nevertheless, it is a fundamental rule of construction that retroactive operation of statutes is not favored by courts and will not be given such construction unless the language expressly or by necessary implication requires it. Whether a statute which by its express terms is retroactive will be sustained is usually a question of degree.

Taxing statutes which by their terms were retroactive for short periods have been.held to be valid. No case has ever held such a statute to be valid which attempted to permit a retroactive assessment of a tax for as long a period as sixteen years. The case of Welch v. Henry (305 U. S. 134), relied upon by respondents, related to a Wisconsin income tax statute which by its terms was retroactive for a period of two years. The act declared it was an emergency tax statute, enacted to provide revenue for “ unemployment relief purposes.” It was enacted at the first session of the Legislature at which tax legislation could be considered, as regular sessions of the Legislature in that State are held in each odd-numbered year. In that case the State Supreme Court, in holding the statute valid, said that the statute might “ approach or reach the limit of permissible retro-activity ” but that it could not say it exceeded it. (223 Wis. 319, 327.) Justice Stone, writing for the United States Supreme Court, said: “ Assuming that a tax may attempt to reach events so far in the past as to render that objection valid, we think that no such case is presented here.” (p. 148.) He called attention to cases which decided statutes valid which were retroactive for a period of one year. The case is not authority for holding a statute valid which purports to allow the collection of a tax on income received sixteen years before its passage. In fact, the implication of the opinion is that such a statute would not be valid.

The constitutional validity of law is to be tested, not by what has been done under it, but what may, by its authority, be done.” (Stuart v. Palmer, 74 N. Y. 183, 188; People ex rel. Barnard v. Wemple, 117 N. Y. 77, 84; Gilman v. Tucker, 128 N. Y. 190, 200; City of Rochester v. West, 164 N. Y. 510; Matter of Richardson, 247 N. Y. 401, 421; Rosalsky v. State of New York, 254 N. Y. 117, 121.)

Prior to the amendment of 1935 it was settled law in this State that the income in question was free from taxation. (People ex rel. Pierson v. Lynch, supra.) The amendment cannot, therefore, be treated as a clarifying statute.

We believe the amendment is unreasonable, arbitrary, capricious and palpably unjust.

The order of the Appellate Division should be reversed and the determination of the State Tax Commission annulled, the refund allowed, and the assessment for the year 1933 canceled, with costs to the appellants in all courts.

Lehman, J.

(dissenting). In my opinion the validity of the retroactive amendment was presented and decided in People ex rel. Cohn v. Graves (271 N. Y. 353; affd., 300 U. S. 308). I should reach the same conclusion if the question were open. Anew article (16) imposing a tax upon every resident of the State with respect to his entire net income,” as therein defined, was added to the Tax Law by chapter 627 of the Laws of 1919. Net income ” was defined as “ the gross income of a taxpayer less the deductions allowed by this article.” (§ 357.) Section 359, before its amendment, stated, so far as material to the question before us, the term ‘ gross income:’ (1) includes gains, profits and income derived from * * * dealings in property, whether real or personal, growing out of the ownership or use of or interest in such property.” Giving to the words of the statute their ordinary meaning, the tax authorities of the State and taxpayers alike assumed that gross income included income derived from real property outside the State. The Appellate Division unanimously gave the statute the same construction, but this court, in order to escape serious doubt as to the power of the State to tax such income, gave to the statute in the Pierson case a strained construction, excluding such income from its scope. The amendment made to section 359 of the Tax Law by chapter 933 of the Laws of 1935 was intended and could have no effect other .than to include in taxable income all income received by the taxpayer without regard to the source thereof, location of the property involved, or any other factor, except only a case where the inclusion thereof would be violative of constitutional restrictions.”

The Legislature cannot, I agree, in the guise of “ clarification ” of a statute, change retroactively the construction which the courts have placed upon the statute in original form. Income not subject to tax prior to 1935 becomes taxable after that date by force of the amendment of the statute. The question here is whether the Legislature may retroactively subject to the tax income previously exempt. It may be conceded that ordinary tax legislation enacted in 1935 intended to subject to an income tax income received during the previous sixteen years by a taxpayer who during all those years had no notice that he might be required to pay a tax on such income would be so arbitrary that it would constitute a depreciation of property without due process of law. That is not the purpose or effect of the statute. The Legislature has merely given to the statute retroactively the meaning which courts other than this court, tax authorities and taxpayers, including these appellants, placed upon the statute until the Pierson case. The narrow construction which this court placed upon the statute was inextricably connected with doubt as to the constitutionality of the statute otherwise construed. That doubt has now been removed. Differentiation'between income received from property within the State and income received from property outside of the State has no longer any basis in economics or in law. The theory “ which once won a qualified approval, that a tax on income is legally or economically a tax on its source, is no longer tenable,” citing New York ex rel. Cohn v. Graves (300 U. S. 308); Graves v. New York (83 U. S. Sup. Ct., Law Ed. 577). The taxpayers are not challenging a new assessment unexpectedly imposed upon them. On the contrary, they are seeking a refund of taxes which they voluntarily paid on income received for the calendar years 1930 and 1931 and an order canceling the assessment for the year 1933, wtibn the relators well knew that the State was claiming, as it had claimed for fourteen years before, that the tax as assessed was due under the statute as it then existed. The provision that the amendatory statute is retroactive to the date when the original statute was enacted does not give the State any power to make a new assessment, except within the short period fixed by the statute for revision of returns filed or for making an estimate of taxable income where the taxpayer has failed to make a return. (Cf. Tax Law, § 373.) The burden placed upon the taxpayer by such retroactive legislation seems to me fair and reasonable.

The order of the Appellate Division should be affirmed.

Loughban, Finch and Rippey, JJ., concur with Hubbs, J.; Lehman, J., dissents in opinion in which Cbane, Ch. J., and O’Bbien, J., concur.

Ordered accordingly.


source: Caselaw Access Project

author: Lehman, J. O’Brien, J.

license: Public Domain

text:
    The People of the State of New York, Respondent, v. Cunard Write Star, Limited, Appellant. (Four Cases.)
    Argued March 2, 1939;
    decided May 23, 1939.

      Ernest D. North and Woodson D. Scott for appellant.
    Section 211 of the New York City Sanitary Code should not be construed to prohibit the discharge of smoke for short periods of time by a steamship engaged in foreign commerce where the discharge in unavoidable in the use of proper oil-burning equipment necessary to the operation of the vessel. (People v. Sturgis, 121 App. Div. 407; City of Rochester v. Macauley-Fien Milling Co., 199 N. Y. 207; People v. New York Edison Co., 159 App. Div. 786; St. Louis v. Heitzeberg Packing Co., 141 Mo. 375; People v. N. Y. C. & H. R. R. R. Co., 159 App. Div. 329; Department of Health v. Ebling Brewing Co., 38 Misc. Rep. 537; People v. Horton, 41 Misc. Rep. 309; People ex rel. Outwater v. Green, 56 N. Y. 466; Massachusetts Mut. Life Ins. Co. v. United States, 288 U. S. 269.) The ordinance as applied herein is unconstitutional because it amounts to a taking of property without due process and is an unwarranted interference with foreign commerce. (People v. New York Edison Co., 159 App. Div. 786; Panhandle Eastern Pipe Line Co. v. State Highway Comm., 294 U. S. 613; City of Rochester v. Macauley-Fien Milling Co., 199 N. Y. 207; City of Buffalo v. N. Y. C. R. R. Co., 271 N. Y. 658; Department of Health v. Ebling Brewing Go., 38 Misc. Rep. 537; Erie R. R. Co. v. Jersey City, 83 N. J. L. 92; 84 N. J. L. 761; Penn R. R. Co. v. Jersey City, 84 N. J. L. 716; Di Santo v. Pennsylvania, 273 U. S. 34; Schafer v. Farmers Grain Co., 268 U. S. 189.)

      William C. Chanler, Corporation Counsel (James Hail Prothero and Paxton Blair of counsel), for respondent.
    Section 211 of the Sanitary Code proscribes a nuisance per se and is properly applied to steamships engaged in foreign commerce, where as here (a) the discharge is avoidable by the proper use of oil burning equipment on the steamships, or (b) where the defense to the emitted discharges of dense smoke is that they will be chronically unavoidable because of the arbitrary method of operation of the steamships. (People v. New York Steam Corp., 278 N. Y. 617; Tough v. Hopkins, [1904] 1 K. B. 804; Harmon v. Chicago, 110 Ill. 400; St. Paul v. Haugbro, 93 Minn. 59; Northwestern Laundry v. City of Des Moines, 239 U. S. 486; People v. New York Edison Co., 159 App. Div. 786; People v. Erickson, 176 App. Div. 910; People v. Jones, 164 App. Div. 894; People v. Brooklyn Edison Co., 250 App. Div. 874.) Section 211 is a public health law of local application which cannot properly be said to violate either the due process clause or foreign commerce clause of the Federal Constitution or the due process clause of the State Constitution. (People v. New York Edison Co., 159 App. Div. 786; People v. Erickson, 176 App. Div. 910; People v. Jones, 164 App. Div. 894; People v. Brooklyn Edison Co., 250 App. Div. 874; Sherlock v. Alling, 93 U. S. 99; Escanaba Co. v. Chicago, 107 U. S. 678; Compagnie Francaise v. Louisiana, 186 U. S. 380; Olsen v. Smith, 195 U. S. 332; People v. Rohde, 152 Misc. Rep. 526; State
      v. Leary, 46 R. I. 197; Harmon v. Chicago, 110 Ill. 400; Northwestern Laundry v. City of Des Moines, 239 U. S. 486.) It is no defense to a violation of a public health law that a particular steamship has been so constructed or is so operated as to make the violations a “ necessary incident ” to the defendant’s carrying on its business. (Bohan v. Port Jervis Gas-Light Co., 122 N. Y. 18; Pritchard v. Edison Electric Illuminating Co., 92 App. Div. 178; 179 N. Y. 364; Baltimore & Potomac R. Co. v. Fifth Baptist Church, 108 U. S. 317; Cogswell v. N. Y., N. H. & H. R. R. Co., 103 N. Y. 10; Weinberg v. Rodgers & Hagerty, Inc., 100 Misc. Rep. 329; 179 App. Div. 906; De Muro v. Havranek, 153 Misc. Rep. 787; People v. Detroit White Lead Works, 82 Mich. 471; Moses v. State, 58 Ind. 185; Winslow v. City of Bloomington, 24 Ill. App. 647; Hearst v. N. Y. C. & H. R. R. R. Co., 215 N. Y. 268; Friedman v. N. Y. & Harlem R. R. Co., 89 App. Div. 38; 180 N. Y. 550.) As to the steamship Corinthia, the evidence amply supports the conviction; there was no evidence that the discharge of dense smoke was unavoidable in the sense that it could not have been prevented; the defense that the steamship had proper combustion equipment was irrelevant to show that the dense smoke emitted could not have been prevented. (People v. New York Steam Corp., 253 App. Div. 806; 278 N. Y. 617; People v. New York Edison Co., 159 App. Div. 786; People v. Erickson, 176 App. Div. 910; People v. Jones, 164 App. Div. 894; People v. Brooklyn Edison Co., 250 App. Div. 874.)
   Lehman, J.

Informations charging the defendant with three violations of section 211 of the Sanitary Code of the City of New York (New York Code of Ordinances, ch. 20, art. 12) were tried together. One information alleges that the defendant, on the 20th day of October, 1937, did unlawfully cause, suffer and allow dense smoke to be discharged from the smoke stack of steamship Queen Mary while tied up at Pier 90, North River, in the City, County and State of New York.” Another information contains similar allegations concerning smoke from the steamship Laconia while tied up at Pier 54, North river. The third information alleges that dense smoke was discharged'from a chimney located on Pier 90. The defendant was convicted on all three charges. Appeals taken to the Appellate Division from the judgments of conviction were heard and decided together. The appellant has appealed from the judgment of the Appellate Division, affirming the three judgments of conviction, but states in its brief that it desires “ to present for the decision of this court only the questions involved in the application of the New York City Smoke Ordinance to steamships.” It does not challenge the conviction upon the charge that it permitted dense smoke to be discharged from the chimney on Pier 90.

The evidence establishes that dense smoke was discharged on the days specified in the informations from the steamships Queen Mary and Laconia. The Queen Mary was under observation by an inspector of the Health Department from seven a. m. to eight-forty A. m. The discharge of dense smoke was not continuous but was noticed during five short periods aggregating twenty-four minutes. At that time the steamship was being prepared for a voyage which started at ten-thirty that morning. The same inspector observed a discharge of smoke on the Laconia for a period of five minutes not long before that ship left port.

The validity of the ordinance is not challenged, if its scope is limited to prohibition of the discharge of smoke, avoidable by the use of modern appliances and of methods which are practicable. So limited, the ordinance is reasonably calculated to protect the health and comfort of residents and visitors in the city of New York, and the Legislature has delegated to city officers the power to pass such ordinances. The defendant is engaged in foreign commerce which, though subject to regulation by the Congress of the United States, is not immune from the police power. The defendant does not claim such immunity. It asks the court to reverse the conviction for violation of the ordinance, on the ground that the ordinance is unreasonable and the police power does not justify unreasonable obstruction of its business as carrier in foreign commerce.

The defendant was convicted in spite of an offer to prove that “ all due and reasonable precautions were taken on board the ships at the time of each of these charges with respect to the reduction of smoke, and that such smoke as may have been created was only such smoke as is absolutely unavoidable under the conditions prevailing on those ships.” It says that the court excluded such evidence on the ground that it would be immaterial because any discharge of smoke, even if unavoidable, would constitute a violation of the ordinance, stating: “ I will hold that the smoke came out of those funnels and in the other case from the structure, therefore, you were guilty from the testimony given by Inspector Kirchner and your own testimony; on the entire case, I find the'Defendant guilty as charged.” The defendant had previously shown that its steamships are provided with oil burning boilers and with up-to-date and efficient smoke prevention appliances, and the court stated that it so found. The defendant admits, however, that at times smoke is discharged from its steamships, especially when cold boilers are being “ lighted up ” and when a ship is entering or leaving port and the demands for steam fluctuate.

Great cities depend for existence upon industry and commerce there conducted; but industry and commerce, if conducted in manner which will produce the greatest economic return, may create conditions which injure the public health and welfare. In the exercise of the police power, the State may require industry and commerce to be carried on in manner which will promote the public health and welfare, though such requirement may increase the cost of doing business. Conflicting considerations of business advantage and the public health and welfare must be weighed by the Legislature, and the courts may not interfere unless interference with lawful business is manifestly unreasonable. None the less, there is a point beyond which the Legislature may not go and the courts must refuse to enforce a statute, ordinance or regulation in those rare cases where a legislative body has transcended the constitutional restrictions upon its power. Even in the exercise of the police power the State may not obstruct or directly burden interstate or foreign commerce. (Di Santo v. Pennsylvania, 273 U. S. 34.) If the prohibition against the discharge of dense smoke is so applied that a steamship company may be found guilty of a violation because, in the operation of great liners with up-to-date equipment, dense smoke is discharged for a few minutes while a vessel is being prepared for departure, though it is shown that, even in the exercise of the greatest care, it would be impossible or impractical to avoid such smoke, then it seems to me clear beyond question that the ordinance is unreasonable, obstructs foreign commerce and exceeds the power of the State.

Perhaps the evidence, quoted in the opinion of Judge O’Brien, which was elicited upon cross-examination of defendant’s witnesses, might, if unexplained, be sufficient to sustain a finding that the emission of the dense smoke might have been avoided without undue interference with the operation of the steamship. Read with the testimony given by the same witness on direct, these admissions are at most equivocal and certainly were subject to explanation or even contradiction through other proof; but here offer of such proof was, as I have pointed out, rejected. In my opinion, the colloquy of court and counsel leaves no question that the offer of such proof was made and rejected and that the ruling of the trial court was unambiguous and may be reviewed by this court. I do not, however, labor that point by argument or attempt demonstration by quotation of the full colloquy; for affirmance of the judgment of conviction, if it is based on the ground that the offer of proof was insufficient and that the court was justified in passing judgment upon the evidence actually presented, would have no consequences other than the payment by the defendant of small fines.

The important questions which the appellant seeks to bring up for review would even then be presented upon the appeal from a judgment of the Appellate Division, affirming a conviction of the same defendant for the discharge of smoke from the steamship Carinthia, which has been argued here at the same time as the judgment affirming conviction in the Queen Mary and Laconia cases, though the information was tried after the conviction in the earlier cases had been affirmed by the Appellate Division. In the Carinthia case the inspector testified that he observed smoke being discharged from the steamship Carinthia from ten-forty-eight to ten-fifty-three a. m. on October 22, 1937. The vessel had arrived that morning. By testimony which is not challenged the defendant showed that an hour after a vessel has arrived at the dock and the passengers have left, there is need for less steam. Then there is change to smaller burners and the change causes smoke for about five minutes. The defendant also showed by its chief engineer that the steamship had proper equipment and that smoke is unavoidable when the burners are changed. There is no evidence or even contention by the People that smoke could be avoided if the steamship company allows any burner or boiler to become cool while the vessel is in dock and less steam is required. A witness testified without contradiction or even cross-examination that if the change to smaller burners were not made, the reduced demand for steam “ would necessitate us putting fires out and lighting them up again frequently, which would cause smoke.” .

In the Carinthia case the People argue that the conviction must be sustained because "It is no defense to a violation of a public health law that a particular steamship has been so constructed and is so operated as to make continued violations a ‘ necessary incident ’ to the defendant’s carrying on his business.” That might be true if construction or operation is improper or if change there were practical. Here, however, there is no suggestion that either operation or construction is not in conformity with the highest standards or that occasional emission of smoke, for a few minutes on the day a vessel enters or leaves port, could be avoided by change which would not unreasonably obstruct the operation of the steamship. The defendant’s witnesses were not even cross-examined on those matters by the Corporation Counsel, and the record is bare of evidence like that quoted by Judge O’Brien upon the appeal in the other cases. The case was tried and decided on the theory that a carrier engaged in foreign commerce may be convicted of violation of the ordinance whenever dense smoke is discharged even for a brief period, though such discharge is "unavoidable by any means which are practicable.

The judgments of the Appellate Division and of the Court of Special Sessions of the City of New York (Municipal Term) convicting the defendant for the discharge of smoke from the steamships should be reversed and new trials ordered.

The judgment of the Appellate Division affirming the judgment of the Court of Special Sessions of the City of New York (Municipal Term) convicting the defendant for the discharge of smoke from the chimney on Pier 90 should be affirmed.

O’Brien, J.

(dissenting). Three violations by defendant of the provisions of section 211 of the Sanitary Code of the [City of New York are charged. The first alleges that steamship Queen Mary, while docked at Pier 90, North river, discharged dense smoke; the second that steamship Laconia, while docked at Pier 54, North river, also discharged dense smoke; the third that dense smoke was discharged from a chimney owned by defendant on Pier 90, North river.

Section 211 provides: “No person shall cause, suffer or allow dense smoke to be discharged from any building, vessel, stationary or locomotive engine or motor vehicle, place or premises within^ the city of New York or upon the waters adjacent thereto, within the jurisdiction of said city. * * *.”

The People proved the emission of dense smoke from both the ships and from the chimney on the pier. This fact is not denied. On the trial defendant’s counsel stated in respect to the ships: “ I have not denied that we get smoke. We know we do. We cannot help it. We always do. The discharge of smoke, under those circumstances, was from our point of view unavoidable and accidental in the sense that it simply could not be prevented by the exercise of the greatest amount of care.”

The Queen Mary and the Laconia are both oil burners. The boilers on the Queen Mary were started about five o’clock in the morning, according to the testimony of defendant’s witness, and the ship was still tied to the pier as late as eight-forty that morning. She sailed that day at ten-thirty. Heavy black smoke was discharged, according to the observation of the People’s witness, from seven-twenty-two to eight-thirty-five. Here is testimony by defendant’s witness: Q. You cannot actually control the fire so as not to have smoke? A. We do that. Q. How do you do it? A. By lighting up one at a time. Q. And with only one or two boilers lit up, you do not have dense smoke, is that right, under normal conditions? A. No, we do not. But when she is getting ready for sea, there will come a time ■ when you have a great demand for steam, that is the time when she is leaving port. Q. And how many boilers do you light up then? A. Every one of them. Q. And all at about the same time, isn’t that right? A. About the same time. * * * Q. Suppose you only started one boiler at a time, you wouldn’t have as much dense smoke coming from those stacks as if you started them all at the same time, would you? A. No. Q. So, therefore, to that extent, you can control it? A. We can control the quantity that would be emitted at that time.” The same witness testified that the ship starts getting up steam three or four hours before it sails. Another witness for defendant testified that, after the boilers on Queen Mary are steamed, his duty is to watch the smoke and that he did see smoke that day, sometimes black and sometimes thick brown. He reported to his superior that the funnel was “ smoking heavily.” The People are correct in their argument that the emission of this dense smoke was not unavoidable but could have been controlled. The practice pursued by defendant is admitted to be cheaper and more convenient. In respect to steamship Laconia, the evidence is clear in respect to the emission of dense, black smoke between nine-thirteen and nine-eighteen a. m. The practice regarding the lighting of the burners on this ship is the same as that prevailing on the Queen Mary.

Appellant’s brief presents no argument respecting the correctness of the conviction in connection with the emission of smoke from the chimney on the pier.

The argument that this enactment tends to burden foreign commerce to such an extent as to render it unconstitutional cannot be sustained. First of all, it is a health ordinance and, in respect to such matters and many others, a State possesses extensive police power, even though interstate or foreign commerce may be directly involved. (Olsen v. Smith, 195 U. S. 332; Shafer v. Farmers Grain Co., 268 U. S. 189 at p. 199; People v. Rueffer, 279 N. Y. 389, and cases therein cited at p. 392.)

The judgment should be affirmed.

Crane, Ch. J., Hubbs and Rippey, JJ., concur with Lehman, J.; O’Brien, J., dissents as to the steamships in opinion in which Lohghran and Finch, JJ., concur.

Judgment accordingly.,


author: Loughran, J.

text:
    City Bank Farmers Trust Company, as Trustee, Appellant, v. Abraham A. Silberberg, Respondent.

      Argued February 27, 1939;
    decided May 23, 1939.

      Albert C. Bickford and Horace J. McAfee for appellant.
    The judgment of the Municipal Court determining the allowability of a setoff in an action brought by the title company in its individual capacity is not res judicata. The point actually determined in the Municipal Court is different from the question presented for decision in the present case. (Schuylkill Fuel Corp. v. Nieberg Realty Corp., 250 N. Y. 304; Morris v. Windsor Trust Co., 213 N. Y. 27; Beecher v. Vogt Mfg. Co., 227 N. Y. 468; Pink v. Title Guarantee & Trust Co., 274 N. Y. 167; Karameros v. Luther, 279 N. Y. 87; Fromm v. Glueck, 161 Misc. Rep. 502.) The identity of parties or privies requisite to a successful plea of res judicata is lacking. (Rathbone v. Hooney, 58 N. Y. 463; Leonard v. Pierce, 182 N. Y. 431; Hellstern v. Hellstern, 279 N. Y. 327.) The mutuality of debt and credit essential to the allowance of a setoff is lacking. The rent due from the defendant is owing to the title company and its successors in their capacity as trustee or agent for Series N-67 certificate holders, whereas the claim sought to be offset is owing from the title company in its personal or individual capacity as guarantor of payment of Series C-2 certificates. (Morris v. Windsor Trust Co., 213 N. Y. 27; Beecher v. Vogt Mfg. Co., 227 N. Y. 468; Pink v. Title Guarantee & Trust Co., 274 N. Y. 167; Dakin v. Bayly, 290 U. S. 143; Matter of Chinese Merchants Bank, Ltd., 151 Misc. Rep. 425; Matter of People [Lawyers Title & Guaranty Co.], 265 N. Y. 20; Matter of People [New York Title & Mortgage Co.], 265 N. Y. 30; Woman’s Hospital v. Sixty-seventh Street Realty Co., 265 N. Y. 226; Matter of Westover, Inc., 82 Fed. Rep. [2d] 177; Matter of Bond & Mortgage Guarantee Co., 157 Misc. Rep. 240; Matter of Lawyers Title & Guaranty Co., 157 Misc. Rep. 516; Matter of New York Title & Mortgage Co., 160 Misc. Rep. 67; 251 App. Div. 415; 277 N. Y. 66; People v. American Surety Co., 241 App. Div. 199; 266 N. Y. 585; Walker v. Mann, 142 Misc. Rep. 288.)

      A. A. Silberberg and Norman Handel for respondent.
    The right to offset interest owing by The title company on mortgage certificates held by the respondent against the rent which appellant claims was duly and conclusively adjudicated in the respondent’s favor, and that adjudication precludes recovery by appellant. (New York Title & Mortgage Co. v. Irving Trust Co., 241 App. Div. 246; Dawley v. Brown, 79 N. Y. 390; Erie R. R. Co. v. International Ry. Co., 209 App. Div. 380; 239 N. Y. 598; City of New York v. N. Y. City Ry. Co., 193 N. Y. 543; Lorillard v. Clyde, 122 N. Y. 41; Pray v. Hegeman, 98 N. Y. 351; Hirschbach v. Ketchum, 84 App. Div. 258; Schuykill Fuel Corp. v. Nieburg Realty Corp., 250 N. Y. 304; Burdick v. Cameron, 10 App. Div. 589; Zerega v. Will, 34 App. Div. 488; Williams v. Barkley, 165 N. Y. 48; McGean v. M. E. R. Co., 133 N. Y. 9; Corcoran v. Chesapeake, etc., Canal Co., 94 U. S. 741; 165 Broadway Realty Corp. v. Weber & Heilbroner, Inc., 143 Misc. Rep. 672; 238 App. Div. 837; Seibert v. Dunn, 216 N. Y. 237; Grossi v. Rialto Security Corp., 273 N. Y. 403.) Mutual debits and credits existed between the title company in rehabilitation and the respondent with the credits due the respondent in excess of the title company’s claims. (Matter of People [Title & Mortgage Guar. Co.], 264 N. Y. 69; Prudential Ins. Co. v. Liberbar Holding Carp., 72 Fed. Rep. [2d] 395; New York Title & Mortgage Co. v. Irving Trust Co., 241 App. Div. 246; 268 N. Y. 547, 709; Van Schaick v. Penn. Exchange Bank, 236 App. Div. 453; Van Schaick v. Astor, 154 Misc. Rep. 543; 246 App. Div. 716; 270 N. Y. 677; N. Y. T. & M. Co. v. Friedman, 153 Misc. Rep. 697.)
   Loughran, J.

The action is one for rent and the question one of res judicata.

New York Title and Mortgage Company issued and guaranteed payment of certificates of participation (designated “ Series N-67 ”) in a single mortgage on 1160 Park Avenue, city of New York. The owner of the mortgaged premises let an apartment therein to the defendant for a three-year term, October 1, 1932, to September 30, 1935. In August, 1933, the Superintendent of Insurance was made rehabilitator of the title company by an order of the Supreme Court, entered in accordance with article XI of the Insurance Law (Cons. Laws, ch. 28). Thereupon all leases on 1160 Park Avenue were formally transferred to the rehabilitator together with an assignment of rents theretofore made by the owner-mortgagor to a wholly owned subsidiary of the title company.

On August 28, 1934, New York Title and Mortgage Company, in rehabilitation, by Edward McLoughlin, Special Deputy Superintendent of Insurance,” as petitioner, commenced in the Municipal Court of the City of New York a summary proceeding to remove the present defendant as tenant of the apartment let to him in 1160 Park Avenue. The petition demanded also a personal judgment for rent then unpaid. In his answer to that petition this defendant there pleaded by way of setoff and counterclaim sums of interest in default upon group mortgage participation certificates (designated “ Series C-2 ”) that had been issued to him and guaranteed by New York Title and Mortgage Company. Those “ Series C-2 ” certificates had no relation to the Series N-67 ” certificates of participation in the mortgage on 1160 Park Avenue. The setoff so pleaded was allowed in that summary proceeding by a final order which stands unreversed.

In May, 1935, the State Mortgage Commission was created by chapter 19 of the Laws of 1935. In the exercise of its function as defined by section 6 of the statute the Commission took over legal title to all mortgages in respect of which participation certificates had been issued or guaranteed by the title company, including the mortgage on 1160 Park Avenue. The present plaintiff bank is trustee for the benefit of the holders of certificates of participation in that mortgage (“ Series N-67 ”), under a plan of reorganization approved by the Supreme Court pursuant to article VII of the statute.

In its character as such trustee the plaintiff brought this present action to recover from the defendant rent for the same apartment in 1160 Park Avenue which had accrued for the period from September 1, 1934, to September 30, 1935. The courts below have held that the right of the defendant to set off against the rent now sued for the interest still unpaid to him upon his Series C-2 ” certificates was a right that had been adjudicated in the summary proceeding litigated in the Municipal Court in August, 1934. Judgment in favor of the defendant followed. We think this was error.

The Municipal Court was of opinion that the title company was the beneficial owner of the mortgage on 1160 Park Avenue and that the holders of the Series N-67 ” certificates had no more than a lien upon that mortgage plus the title company’s undertaking to make good any deficiency. In that view the title company had instituted the summary proceeding solely in its own right or interest and the conclusion followed (as the Municipal Court ruled) that the defendant could set off against the company’s claim as landlord any claim which the defendant had against the company in its individual corporate person. This view of the status of the title company in the summary proceeding was a misconception. The Municipal Court mistakenly applied the reasoning of Matter of People (Title and Mortgage Guaranty Co.) (264 N. Y. 69). This court there analyzed the interests of holders of certificates of participation in a group of mortgages. The mortgage on 1160 Park Avenue was a single mortgage. Each holder of a certificate in Series N-67 ” had a pro rata beneficial interest in that mortgage and the title company, as landlord in the summary proceeding, was in court as trustee for those certificate holders or not at all. But the question here is not whether the summary proceeding was correctly decided by the Municipal Court.

The question here is whether that decision adjudicated the right of the defendant to set off against the rent sued for by the present plaintiff as trustee an indebtedness which the title company by its so-called guaranty of the “ Series C-2 ” certificates undertook in its individual corporate person to pay to the defendant.

It is true that this action coincides with the earlier summary proceeding in several aspects. In both recovery of rent for the same premises was sought from the same tenant under the same lease. The present plaintiff relies on the same assignment of rents on which the title company relied in the summary proceeding. But in that proceeding (as we must now assume) the title company appeared only in its general or individual corporate capacity, whereas the present plaintiff sues in its representative capacity as the title company's successor trustee for the holders of the Series N-67 ” certificates and not otherwise. The present plaintiff, indeed, has no claim against the defendant in any other capacity, whereas the adjudication made in the summary proceeding was that the title, company had no such fiduciary claim nor any claim other than that which it was there held to have asserted for itself in its individual corporate capacity.

It is thus clear, we think, that the question of res judicata in the case at bar must be resolved against the defendant on the principle that an adjudication for or against a person litigating an issue solely in his individual right or interest does not conclude him in a subsequent prosecution respecting the same issue to which he is a party only in a representative capacity. (See Rathbone v. Hooney, 58 N. Y. 463; 1 Freeman on Judgments [5th ed.], § 419, p. 913; 24 Am. & Eng. Ency. of Law, p. 734.)

The judgments should be reversed and a new trial granted, with costs in all courts to abide the event.

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

Judgments reversed, etc.


author:
Crane, Ch. J.
      Rippey, J.

text:
    Mae V. Locke, Appellant, v. Winfield P. Pembroke, Respondent.

      Argued April 17, 1939;
    decided May 31, 1939.

      Henry Klein, David Sheir and Max D. Steuer for appellant.
    The complaint sets forth facts sufficient to constitute a cause of action. (Stark v. Howe Sound Co., 148 Misc. Rep. 686; 241 App. Div. 637; Minehan v. Hill, 144 App. Div. 854; Wahl v. Barnum, 116 N. Y. 87; Clark v. Auditore, Inc., 244 N. Y. 382; People v. Hayes, 70 Hun, 111; 140 N. Y. 484; Harvey v. Morgan & Co., 166 Misc. Rep. 455.) The causes of action set forth in the complaint did accrue within the time limited by law for the commencement of an action thereon. (Civ. Prac. Act, § 48, subd. 1; 2 Carmody’s New York Practice, p. 721.) The contract does not come within the provisions of the Statute of Frauds. (Thorp v. Stewart, 44 Hun, 232; Dresser v. Dresser, 35 Barb. 573; McCabe v. Green, 18 App. Div. 625; Kent v. Kent, 62 N. Y. 560; Ralph v. Cronk, 266 N. Y. 428; Fredenburg v. Fredenburg, 159 Misc. Rep. 525.)

      William MacFarlane for respondent.
    The action is for seduction and not maintainable. (Civ. Prac. Act, art. 2-A; City of Syracuse v. Hogan, 234 N. Y. 457; McFarlane v. City of Niagara Falls, 247 N. Y. 340; Sulkowski v. Szewczyk, 255 App. Div. 103; Brick v. Cohn-Hall-Marx Co., 276 N. Y. 259; Schmidt v. Merchants Despatch Transportation Co., 270 N. Y. 287; People ex rel. Jackson v. Potter, 47 N. Y. 375; City Bank F. T. Co. v. N. Y. C. R. R. Co., 253 N. Y. 49; Wiley v. Solvay Process Co., 215 N. Y. 584; Matter of Cooper, 22 N. Y. 67; Ayers v. Lawrence, 59 N. Y. 192; Johnson v. Oppenheim, 55 N. Y. 280; Beal v. Finch, 11 N. Y. 128; People ex rel. Bingham v. State Water Supply Comm., 153 App. Div. 587; Fearon v. Treanor, 272 N. Y. 268; Hanfgarn v. Mark, 274 N. Y. 22; Cunningham v. Cunningham, 206 N. Y. 341; Maynard v. Hill, 125 U. S. 190.) The facts alleged in the complaint do not constitute a legal contract and the complaint cannot be sustained on that ground. (Canet v. Smith, 86 Misc. Rep. 99; 173 App. Div. 241; Mackintosh v. Kimball, 101 App. Div. 494; Sun P. & P. Assn. v. Remington P. & P. Co., 235 N. Y. 338; Ansorge v. Kane, 244 N. Y. 395; Angresani v. Tozzi, 217 App. Div. 642; 245 N. Y. 558; Matter of Greene, 45 Fed. Rep. [2d] 428; Sirkin v. Fourteenth St. Store, 124 App. Div. 384; Springstead v. Nees, 125 App. Div. 230; Hammond Oil Co. v. Standard Oil Co., 259 N. Y. 312; Strong v. Sheffield, 144 N. Y. 392; McGovern v. Elize, Inc., 137 Misc. Rep. 599; McGovern v. City of New York, 234 N. Y. 377; United Press v. New York Press Co., 35 App. Div. 444; 164 N. Y. 406.)
   Crane, Ch. J.

This is an appeal by the plaintiff from an order of the Appellate Division, first department, which reversed an order of the Special Term denying the defendant’s motion to dismiss the amended complaint, and from the judgment entered on such reversal. The motion was made by the defendant before service of his answer under rules 106 and 107 of the Rules of Civil Practice. In reviewing the complaint, in the absence of any answer, we are bound to take the allegations as facts.

In the first place, article 2-A of the Civil Practice Act, entitled “ Actions against Public Policy,” has no application to this case except as it preserves past agreements made in settlement of alleged wrongs. While it abolishes the right of action heretofore existing to recover damages for seduction, it has not interfered with agreements made prior to 1935 in settlement of such causes. The plaintiff would have no cause of action for the wrong alleged to have occurred in March of 1924. She alleges, however, a contract in settlement upon a good consideration made on ór about the 14th day of January, 1928, and it is upon that alleged agreement she seeks recovery. Such agreements, if made, are referred to in section 61-f of the Civil Practice Act, added by the Laws of 1935, chapter 263, in the following words: “However, that this section shall not apply to the payment, satisfaction, settlement or compromise of any causes of action which are not abolished or barred by this article, or any contracts or instruments heretofore executed.”

Now for the complaint. It alleges that prior to the 1st day of November, 1925, the defendant, upon the representation that he was free to marry, and under a promise to marry her, seduced this plaintiff, and that thereafter, in November of 1925, he told her he was married, could not marry her, and promised to make a reasonable allowance for her maintenance; that thereafter he made such allowances, and in August of 1927 promised to pay her $500 per month for her maintenance and support. Up to this point there was no valid agreement. The promises of the defendant were unenforceable. The consideration for them was illegal or rather there was no consideration recognized by the common law or by the law of this State. (1 Williston on The Law of Contracts [Rev. ed.], § 148, p. 523; Matter of Greene, 45 Fed. Rep. [2d] 428; Wallace v. Rappleye, 103 Ill. 229.)

The plaintiff goes further, and states that a letter written by a lawyer to the defendant in January of 1928 produced a reply, and the allegations regarding it are these: “ That the defendant received the said letter in due course of mail after the 14th day of January 1928, and thereupon undertook, promised and agreed with this plaintiff that if she would proceed no further to institute any action against the defendant, the defendant would in all things carry out the terms of his agreement, and the plaintiff agreed that as long as the defendant did carry out and perform the terms of the agreement, she would not institute action against the defendant; * * *.”

The action is brought for instalhnents of $500, according to the original promise. The plaintiff has here alleged in substance that in 1928 she undertook through a lawyer to commence action against the defendant, and that he, in consideration of her refraining from doing so, promised to pay her $500 a month. It may be that her action for seduction in 1924 was barred by the two-year Statute of Limitations (Civ. Prac. Act, § 50), and that the consideration was worthless or, in other words, no consideration. The Statute of Limitations, however, is a defense to be pleaded, and as there are many other reasons or circumstances under which the statute may be tolled, we cannot say in the face of these pleadings that there was no consideration because the plaintiff had no cause of action which she could maintain in the courts. The consideration also might be lacking, due to the fact that she had no cause of action to prosecute arising out of her own conduct, after she discovered or knew that the man was married. Again, these matters are not for our consideration in dealing with the complaint. At common law no promise could be enforced which is based upon illicit association. The Statute of Frauds does not apply here as the promise, if made, could possibly have been performed within a year.

Upon this question of whether a cause of action for tort, barred by the Statute of Limitations, can possibly be a consideration to support a promise, reference may be made to Nelson v. Petterson (229 Ill. 240); Oothout v. Thompson (20 Johns. 277). In Holtham v. City of Detroit (136 Mich. 17, 21) the court said: “ An action of tort, once barred by the statute of limitations, cannot, like an action arising out of contract, be revived by either an express or implied agreement.” (See, also, Vickers, v. Stoneman, 73 Mich. 419; Van Auken v. City of Adrian, 135 Mich, 534, 539; Hurst v. Parker, 1 Barn. & Aid. 92; 11 Anno. Cas. 180; 17 Ruling Case Law, p. 894.)

For the reasons here stated, the judgment of the Appellate Division should be reversed, and the order of the Special Term affirmed, with costs in this court and in the Appellate Division.

Rippey, J.

(dissenting). Plaintiff alleges that in March, 1924, or at some time prior thereto, defendant seduced the plaintiff under promise of marriage; that about November 1, 1925, defendant told her that he was a married man and unable to marry her and thereupon orally agreed to make her a reasonable allowance for her support and maintenance for the balance of her life; that in the summer of 1927 defendant modified the agreement for a reasonable allowance by voluntarily agreeing to pay her five hundred dollars per month during her lifetime; and that, in January, 1928, defendant refused to make further payments. Whereupon, it is alleged, she threatened to enforce the agreement by legal proceedings. It is further alleged that on January 14, 1928, defendant then undertook, promised and agreed with this plaintiff that if she would proceed no further to institute any action against the defendant, the defendant would in all things carry out the terms of his agreement, and the plaintiff agreed that as long as the defendant did carry out and perform the terms of the agreement, she would not institute action against the defendant.” She claims that he made payments of $500 per month to March 1, 1938, when he refused to pay further and she brings this suit to recover installments, alleged to be due for the months of March to June, 1938, inclusive. Her complaint has been dismissed.

The agreement upon which she sues is the one of January 14, 1928, and she asserts that she may sustain it on the ground that it was an agreement of compromise in avoidance of litigation. To support such a compromise, the claim must be a bona fide claim or honestly believed by the parties to be such, having some legal or equitable foundation, and founded on a right about which there is room for honest doubt and actual dispute (Sherman v. Barnard, 19 Barb. 291; Dolcher v. Fry, 37 Barb. 152; Feeter v. Weber, 78 N. Y. 334). It cannot be sustained on a claim without legal foundation out of which no cause of action can arise in favor of the person asserting it (Morey v. Town of Newfane, 8 Barb. 645; Sherman v. Barnard, 19 Barb. 291, 302; Crosby v. Wood, 6 N. Y. 369; Reid v. Hitchings, 71 Me. 590, 594).

The claim upon which the agreement on which suit is brought is an illegal claim and must have been and was, of necessity, known to the parties as such and one that was unenforceable under our law. Plaintiff could not enforce the executory agreement to make a “ reasonable allowance,” for it was indefinite and uncertain and the fact that some amount has been paid and received thereunder does not make it enforceable (United Press v. N. Y. Press Co., 164 N. Y. 406). She could not enforce an agreement to pay in consideration of the continuance of the illicit relations (Angresani v. Tozzi, 245 N. Y. 558; Matter of Greene, 45 Fed. Rep. [2d] 428), any more than she could enforce the agreement to recompense her for past illicit favors since the consideration was immoral. The alleged agreement to compromise in avoidance of a threatened suit on baseless claims is without consideration and cannot be enforced (Sherman v. Barnard, supra, p. 302; Dolcher v. Fry, supra, p. 157).

By the specific allegations of the complaint, this suit is one to enforce an agreement to forbear from the prosecution of a suit to enforce that baseless claim in consideration of the payment of $500 per month for the support and maintenance of the plaintiff. No question arises as to whether suit may be maintained on seduction or on any breach of any agreement antedating the alleged agreement of compromise which involves any Statute of Limitations in bar. We must take the complaint and pleading of plaintiff as we find them and hold that the complaint, on its face, does not state a cause of action.

The judgment should be affirmed, with costs.

Lehman, Hubbs and Loughran, JJ., concur with Crane, Ch. J.; Rippey, J., dissents in opinion in which Finch, J., concurs; O’Brien, J., taking no part.

Judgment accordingly.


author: Crane, Ch. J. Finch, J.

text:
    The People of the State of New York, Respondent, v. Morris Friedlander, Louis Yukelson, Irving Glasser, Louis Glasser, James Abisror, Samuel Jenks, William Swirnow, Samuel Ziff, Samuel Swirnow and Isidore Markowitz, Appellants.

      Argued April 12, 1939;
    decided May 31, 1939.

      William W. Kleinman and Sol A. Klein for Morris Friedlander and Samuel Jenks, appellants.
    The evidence was insufficient as a matter of law to substantiate the charge that the^defendants Friedlander and Jenks conspired with anybody to pay less than the prevailing rate of wages as required by section 220 of the Labor Law (Cons. Laws, ch. 31) or that they ever paid less than the prevailing rate of wage. (McCaffrey v. State, 259 N. Y. 159; Dunphy v. State, 264 N. Y. 488; Ziegler v. City of New York, 253 App. Div. 764; 277 N. Y. 740; Building Chemicals Corp. v. State, 164 Misc. Rep. 407; People v. Shaktun, 251 N. Y. 107; Del Vecchio v. Bowers, 296 U. S. 280; Wiget v. Becker, 84 Fed. Rep. [2d] 706; Chaika v. Vandenberg, 252 N. Y. 101; Wood v. City of New York, 274 N. Y. 155; N. Y. Clothing Mfrs. Ex., Inc., v. Textile Finishers Assn., Inc., 238 App. Div. 444.)

      Stephen Callaghan, Ralph Stout and Barnett J. Nova for Louis Yukelson, appellant.
    There was no evidence to establish a conspiracy. (People v. Flack, 125 N. Y. 324; People v. Powell, 63 N. Y. 88; People v. Suffolk Contracting Co., 171 App. Div. 645; Cuyler v. McCartney, 40 N. Y. 221; Place v. Minster, 65 N. Y. 89; People v. Miles, 123 App. Div. 862; 192 N. Y. 541; Douglas v. McDermott, 21 App. Div. 8; Wall v. Beedy, 161 Mo. 625; People v. Lewis, 264 Mich. 83; People v. O’Farrell, 175 N. Y. 323; People v. Ryan, 263 N. Y. 298; People v. Razezicz, 206 N. Y. 249.)

      David F. Price and Sol A. Klein for Louis Glasser and Irving Glasser, appellants.
    There was a total failure of proof to substantiate the charge that the defendants Glasser conspired with anybody to pay less than the prevailing rate of wages as required by section 220 of the Labor Law or that they ever paid less than the prevailing rate of wages. (N. Y. Clothing Mfrs. Ex., Inc., v. Textile Finishers Assn., Inc., 238 App. Div. 444; Ziegler v. City of New York, 253 App. Div. 764; McCaffrey v. State, 259 N. Y. 159; Wood v. City of New York, 274 N. Y. 155; Building Chemicals Corp. v. State, 164 Misc. Rep. 407; People v. Harrison, 238 N. Y. 348; People v. Silverman, 252 App. Div. 149; Del Vecchio v. Bowers, 296 U. S. 280; Wiget v. Becker, 84 Fed. Rep. [2d] 706; Chaika v. Vandenberg, 252 N. Y. 101; People v. Skahun, 251 N. Y. 107; Connolly v. General Construction Co., 269 U. S. 385.) It was reversible error to admit in evidence the hearsay declarations of defendants Unger, Friedlander, Jenks and Yukelson as against the defendants Glasser. (People v. Silverman, 252 App. Div. 149; People v. Ryan, 263 N. Y. 298; Lillibridge, Inc., v. Johnson Bronze Co., 247 N. Y. 548; People v. Miles, 123 App. Div. 862; 192 N. Y. 541; Cuyler v. McCartney, 40 N. Y. 221; Place v. Minster, 65 N. Y. 89; Garnsey v. Rhodes, 138 N. Y. 461.).

      Robert Daru and Daniel S. Levy for James Abisror, appellant.
    There was no evidence whatever to support the conviction of defendant Abisror. (People v. Katz, 209 N. Y. 311; People v. Flack, 125 N. Y. 324; People v. Wiman, 148 N. Y. 29; People v. Powell, 63 N. Y. 88; People v. Yannicola, 133 App. Div. 885.) There was no evidence to justify defendant’s conviction even if it is assumed, without benefit of proof, that he belonged to the contractors’ association. (People v. Swersky, 216 N. Y. 471; People v. Katz, 209 N. Y. 311; People v. Yannicola, 133 App. Div. 885; People v. Lewis, 275 N. Y. 33; People v. Fitzgerald,. 156 N. Y. 253; People v. Bennett, 49 N. Y. 137; People v. Sowma, 252 App. Div. 413; People v. Kelly, 11 App. Div. 495; People v. Woltering, 275 N. Y. 51; People v. Suffern, 267 N. Y. 115; People v. Razezicz, 206 N. Y. 249; People v. Governale, 193 N. Y. 581; People v. Molineux, 168 N. Y. 264.)

      Stephen Callaghan, Ralph Stout and Barnett J. Nova for William Swirnow, appellant.
    There was no evidence to establish a conspiracy. (People v. Flack, 125 N. Y. 324; People v. Powell, 63 N. Y. 88; People v. Suffolk Contracting Co., 171 App. Div. 645; Cuyler v. McCartney, 40 N. Y. 221; Place v. Minster, 65 N. Y. 89; People v. Miles, 123 App. Div. 862; 192 N. Y. 541; Douglas v. McDermott, 21 App. Div. 8; People v. Doyle, 107 Misc. Rep. 268; Wall v. Beedy,
      161 Mo. 625; People v. Lewis, 264 Mich. 83; People v. O’Farrell, 175 N. Y. 323; People v. Ryan, 263 N. Y. 298; People v. Razezicz, 206 N. Y. 249.)

      Stephen Callaghan, Ralph Stout and Barnett J. Nova for Samuel Swirnow, appellant.

      Maurice Edelbaum for Samuel Ziff, appellant.
    The People failed to sustain the burden of proof and the information should have been dismissed. (People v. Patrick, 182 N. Y. 131; People v. Dixon, 231 N. Y. 111; People v. Reddy, 261 N. Y. 479; People v. Silverman, 252 App. Div. 149; People v. Pavlik, 50 Hun, 604; People v. Smith, 84 Misc. Rep. 348; People v. Moyer, 186 App. Div. 278; People v. Ledwon, 153 N. Y. 10.)

      Maurice Edelbaum for Isidore Markowitz, appellant.
    The contention that Markowitz was a participant in the conspiracy is not sustained by the evidence. (People v. Ledwon, 153 N. Y. 10; Matter of Case, 214 N. Y. 199.)

      John J. Bennett, Jr., Attorney-General (John C. Crary and Benjamin Heffner of counsel), for respondent.
    The proof was sufficient as a matter of law to establish the prevailing rate of wages required to be paid by the defendants-appellants and to establish their failure to pay it in every instance alleged in the counts of the information charging violation of the Labor Law and likewise in every instance charged as an overt act in the conspiracy count and in the case of other similar overt acts not specifically charged. (People ex rel. Rolf v. Coler, 58 App. Div. 347; Connally v. General Construction Co., 269 U. S. 385; Matter of Gaston v. Taylor, 274 N. Y. 359; Corti v. Wexler, 159 Misc. Rep. 116; People v. Fisher, 223 N. Y. 459; Verona Central Cheese Co. v. Murtaugh, 50 N. Y. 314; People ex rel. Price v. Sheffield Farms Co., 225 N. Y. 25; People v. Luciano, 277 N. Y. 348.) The evidence adduced was sufficient and competent to establish conspiracy as charged in count two. of the information. (People v. Connolly, 253 N. Y. 330; People v. Miles, 123 App. Div. 862; 192 N. Y. 541; People
      v. Luciano, 277 N. Y. 348; Kelley v. People, 55 N. Y. 575; People v. Swersky, 216 N. Y. 471; People v. Wightman, 104 N. Y. 598; People v. Thompson, 97 N. Y. 313; People v. Ogle, 104 N. Y. 511.)
   Crane, Ch. J.

Section 220 of the Labor Law (Cons. Laws, ch. 31) provides that eight hours shall constitute a legal day’s work for all classes of employees in this State except those engaged in farm and domestic service. Each contract to which the State or municipal corporation is a party shall contain a stipulation that no laborer shall be permitted or required to work more than eight hours in vjiy calendar day. Subdivision 3 of this section provides the wages:

“ 3. The wages to be paid for a legal day’s work, as hereinbefore defined, to laborers, workmen or mechanics upon such public works, shall be not less than the prevailing rate of wages as hereinafter defined. * * *.
It shall be the duty of the fiscal officer, as defined in this section, to ascertain and determine the schedule of wages to be paid workmen, laborers and mechanics on each such public work, prior to the time of the advertisement for bids, and such schedule of wages shall be annexed to and form a part of the specifications for the work. * * *.
Any person or corporation that wilfully pays after entering into such contract, less than such stipulated wage scale as established by the fiscal officer shall be guilty of a misdemeanor and upon conviction shall be punished for such first offense by a fine of five hundred dollars or by ■imprisonment for not more than thirty days, or both fine and imprisonment; * *

A conspiracy is a crime defined in article 54 of the Penal Law, section 580: If two or more persons conspire to commit a crime or to commit any act injurious to the public health or for the perversion or obstruction of justice, or the due administration of the laws, each of them is guilty of a misdemeanor, punishable as ordinary misdemeanors. These two crimes are separate and distinct, and the punishment is different. A person who fails to pay the prevailing rate of wages may be punished by a fine of not more than five hundred dollars, or an imprisonment for not more than thirty days. A person who is guilty of a conspiracy may be punished by imprisonment in a penitentiary or county jail for not more than~one year, or by a fine of not more than five hundred dollars, or both (Penal Law, § 1937).

These defendants were tried and convicted of a conspiracy to violate section 220 of the Labor Law, that is, of a conspiracy to pay less than the prevailing rate of wages, and they have been sentenced to imprisonment in excess of the time provided for the violation of the Labor Law. This appeal brings up for review, therefore, not the question whether any of these parties failed to pay the prevailing rate of wages, or violated the Labor Law, but whether they conspired or agreed together to accomplish this purpose. In this connection we must also read section 583 of the Penal Law: "No agreement except to commit a felony upon the person of another, or to commit arson or burglary, amounts to a conspiracy, unless some act beside such agreement be done to effect the object thereof, by one or more of the parties to such agreement.”

These defendants had contracts, or employed labor to work on contracts, for “ painting and alteration repair work ” on public schools in the borough of Brooklyn, city of New York. That some of them paid less than the rate fixed by the Comptroller, or the " prevailing rate,” as it is called, appears from the evidence; that they conspired to do so, or entered into a conspiracy to violate the Labor Law, as charged in the information, is lacking of proof. We, therefore, turn to the record to analyze the evidence as to each which may bear in the slightest way upon an agreement, a federation or combining together to violate this law.

The Brooklyn and Queens Contractors Association was an organization of contractors who are specialists in doing painting on public works, including public schools. Their organization was no different than a labor organization, and its formation was perfectly legal. There was nothing in and about the association in itself which was illegal. Most of these defendants are members of this organization. This seems to be the principal link in the conspiracy, but of course by itself forms no conspiracy. Unless the members of this organization did something more than join the association, /they are not guilty of the crime charged.

Evidence of Conspiracy as against Friedlander.

Most all of the appellants are members of the contractors’ association; they were all engaged in the same business as contractors, in what respondents claim to be a specialized type of work — doing painting for public works. The fact that appellants belong to this association cannot alone convict them of the conspiracy charged, when there is an absence of proof that the organization was formed, or was operated for the criminal purpose of subverting the provisions of the Labor Law. The proof in this case contradicts the hypothesis that the organization was conducted for any such purpose. It is noteworthy that, while many contractors belonging to the association were joined in the indictment, at least one of them was discharged by the courts below as having no part in the alleged conspiracy.

The meetings of the association were open to persons other than members: they were attended by subcontractors who were desirous of making contacts with the members of the association; and at no time was there any discussion about agreeing to pay the prevailing rate of wage. The secretary of the association, Lawrence Berson, was called by the People to testify as to the membership of the association, but he was not asked to tell what took place at the meetings. The proof indicates that Friedlander had at one time represented the organization in conferring with the National Recovery Act authority to secure a better relationship between employers and employees in the painting trade. The evidence introduced by the People indicates that these contractors were rivals, and that the bidding for the contracts was competitive. There is nothing to indicate that these contractors had determined upon preconcerted action to control the bidding and the price paid for labor in the fulfillment of the contracts. In fact, quite the contrary is evident, not only in the bidding but also in the payments made to the laborers by the different contractors. The proof indicates that the amount paid the employees varied considerably, ranging from five to seven or even nine dollars per day, not only as between employees of different contractors, but also as between the employees of the same contractor.

The most effective testimony concerning the criminal nature of the contractors’ association was that of Samuel Freeman, the secretary and treasurer of the District Council of the Painters’ Labor Union. He testified that in May, 1936, he had a conversation with Adolph Unger, an alleged conspirator whose conviction was reversed by the court below. Over objection and exception, Freeman, who was not a defendant, said that Unger had told him that he could, not compete on school work and pay union wages, because the contractors had an association, of which he was also a member, and that this association conducted its business on a “ racket basis,’’ and “ he told me that this association meets every week, decides, discusses policies about their work and every member of the association is to pay four per cent of the net price of the contract as protection against the union. Mr. Unger told me that due to this protection it is impossible for him, as one who wants to be a legitimate employer and employ union labor, to take any work. He told me that he thinks that it is about time that the union, and I as the secretary of the union, should do something about it, so as to break up this racket and create a condition whereby the legitimate employers should be able to do work and employ union labor and pay them the prevailing rate of wages, the union rate of wages.”

This hearsay evidence, directly contradicted by Hyman Tamaroff, who was a member of the union, and present when the conversation took place between Unger and Freeman, was inadmissible. These gratuitous remarks of TJnger were made, if made at all, as comments on the conspiracy, and not at all in furtherance thereof. Besides, he has been found to be no conspirator himself. His statements could not then be binding on Unger’s alleged co-conspirators, and they are not material as admissions by Unger here, as the information against him was dismissed by the Appellate Division. This and other hearsay testimony given by Freeman was the strongest evidence on the record concerning the criminal purposes of the association. When combined with the other testimony concerning the connection of the association with the Buggsey Goldstein gang, which the Appellate Division has held insufficient to establish a conspiracy to break up attempts to unionize the employees of the contractors or to prevent picketing of the work, it is difficult to ascertain what testimony was relied on in reaching the conclusion that the contractors’ association was guilty of the criminal conspiracy to breach the provisions of section 220 of the Labor Law. The guilt of the defendants was inferred in a large measure from their membership in the -association. As stated before, the association was a legal organization, and membership in it no evidence in itself of a conspiracy.

The alleged admissions made by the appellant Friedlander were testified to by Nathan Bresinger, a council delegate of the Painters Union. He stated that his purpose was to organize the job (which Friedlander was doing on a public school on Fort Hamilton Parkway, between Forty-third and Forty-fourth streets), and he was there to see that the men get the prevailing rate of wages which the City rate provides for.” When Friedlander said he could do nothing about it, Bresinger accused him of not wanting to sign up and pay the wages, and said, “You would rather take the man’s wages off and give to some gang,” Fried-lander replied, “ I can’t help it, I am not myself in it.” When Bresinger returned the next day to say he would place pickets if Friedlander did not make a decision, he testified that Friedlander said, “ I gave you my answer yesterday. You know, yourself, that I, myself, cannot do anything because we are all in the same water.” Respondent would have us infer from this that Friedlander was acting in concert with the other members of the association, but there is no explanation as to whom the word “ we ” referred, and the inference is equally possible that Friedlander was compelled to act as he did because his competitors were doing likewise. The whole testimony shows that the references were to union labor, not wages of those non-union men who were employed. This may be an admission of Friedlander’s knowledge of his violation of section 220 of the Labor Law, but it is not evidence upon which to base a charge of conspiracy between Friedlander and other defendants to violate the provisions of this section. “ Buggsey ” Goldstein is dragged in as, following the above statement of Friedlander, Bresinger said he asked Friedlander, “Is it because of Buggsey Goldstein? ” and Friedlander said, “Yes, if you want to know.” The union pickets, Cappadora and Yellensky, testified that they had accompanied Bresinger, but nothing was said about any association of Buggsey Goldstein. “ Buggsey ” Goldstein was a strike breaker or something of the ldnd whose gang the defendants were accused of employing to protect them from strikers. Buggsey Goldstein and his associates were acquitted, also the defendants, of this charge.

Evidence of Conspiracy as against Appellant Jenks.

It is the same as against this appellant as it is against Friedlander, with the exception of the last paragraph above, relating to the alleged admissions by Friedlander. The testimony as to alleged admissions made by Jenks, from which respondent seeks to infer Jenks’ participation in a conspiracy to violate section 220 of the Labor Law, was given by Martin Barth, a painter who was employed by Jenks at School No. 205. This witness said he asked Jenks for more money and Jenks replied that he couldn’t possibly pay any more, that business and competition were keen, and also he had to pay “ protection money.” This is not a statement that he participated with others in securing this “ protection ” or that the protection ” was against paying his men the wages fixed in the public works contracts. In fact the statements as a whole tend to bolster appellants’ point that it was the competition of other contractors breaching the Labor Law which required Jenks to pay less than the rate fixed by the Comptroller, rather than his collusion with them.

Evidence of Conspiracy as against Appellant Louis Glasser.

On the general proof of conspiracy, the evidence is the same as that against Friedlander, already related, except that it should be noted that the hearsay testimony of Freeman as to what Unger had told him was particularly prejudicial as against this appellant. Freeman said that Unger told him that Louis Glasser was the go-between between the contractors’ association and the protective ” association. As already pointed out, this testimony was not in furtherance of the conspiracy, but was entirely disconnected from any of the actions of the alleged conspirators and pure hearsay.

The alleged admissions made by this appellant were testified to by Nathan Shelensky, a painter and business agent of Local 971 of the Painters Union. He approached Louis Glasser when the latter was on a public works job for which Louis’ brother, Irving Glasser, had the contract. The witness testified, however, that Louis said he was the boss, and told Shelensky he did not want to work with the union. Shelensky said he would be compelled to place pickets on the school, and Louis Glasser told him he would not because we have somebody to take care of these schools. * * * We have protection. We are protected by the Buggsey Goldstein gang.” After a court recess, Shelensky was recalled to the stand and testified that Louis Glasser had told him that he belonged to a “ Brooklyn & Kings Association ” and that we have protection, we are protected by the Buggsey Goldstein gang.” Here Shelensky has said the object of his approaching Louis Glasser was to unionize the workmen on the job, and Glasser said he didn’t want the job unionized. There is nothing to indicate that anything was said about the workers being paid less than the prevailing rate of wage nor that the protection was extended to prevent this. At any rate, the improper and incompetent testimony, described above in the paragraphs on Friedlander and Jenks, particularly that of Freeman with reference to what Unger had told him of Louis Glasser, warrants a reversal as to this appellant.

The Testimony as to the Alleged Conspiracy as against Appellant Irving Glasser.

He too was a member of the contractors’ association, and the same may be said with reference to the testimony against him in this regard as has already been said concerning the other appellants. There is no evidence, such as the alleged admissions made by the other appellants described above, that be took active part in the alleged conspiracy, except as may be inferred from the fact that he held the contract for the job which Louis Glasser was bossing when he made the statements to Nathan Shelensky. There is nothing to indicate that Irving Glasser was around when Louis made these statements, nor was there any evidence that Irving Glasser made any such statements.

The Evidence of Conspiracy as against Appellant Louis Yukelson.

Aside from the fact that Yukelson was a member of the contractors’ association, the only material testimony linking him with the alleged conspiracy between the contractors to pay less than the prevailing wage is the testimony of Sickels, the business agent of Local 645 of the Painters Union. He stated that Yukelson asked him why unions didn’t do something about painting on schools; that “ if you are not in on the inside you can’t get any jobs.” He stated that certain bosses had formed an association, though he would mention no names. At a later time, Yukelson told him that he had been doing a job in Queens but was forced to stop, and that he then joined the association and was able to finish the job. Sickels said that the general line of his conversation with Yukelson was that the latter wanted to secure harmony between the unions and the contractors. At most these alleged admissions could only affect Yukelson himself, and were certainly not in furtherance of the conspiracy, but were gratuitously made, entirely apart from the conspiracy and in derogation thereof. As the respondent admits, the “ statements may indicate Yukelson’s regret ” concerning the alleged conspiracy. However, for the reasons already set forth in the analysis of the case against Friedlander, the conviction of this defendant of the charge of conspiring with the other contractors to violate section 220 of the Labor Law, should be reversed.

Evidence of Conspiracy as against Samuel Swirnow.

The only possible connection this appellant could have with the conspiracy was the testimony given by Gustav Peterson and Arthur Rosenroth. The former testified that while working on a job of this appellant’s father, William Swimow, this appellant acted as foreman of this job; that Sam was the one.who put him to work, and that he received his .pay from Sam, although he admitted that he signed receipts for his pay which read, Received from William Swirnow.” Rosenroth said that, when he came to the job where Sam was working, Sam put him to work, although William, Swirnow paid him his wages.

Berson, the secretary of the contractors’ association, testified, on, cross-examination, that Samuel Swimow was not a member of the association; and there is nothing in the record .which could possibly connect this appellant with any alleged conspiracy. Moreover, I do not believe that this appellant can be charged with a direct - violation • of section 220 of the Labor Law. Samuel apparently never had a contract to execute the painting work on any public school with which we are concerned in this-case; he was not a member of the contractors’ association. The only-testimony there is here with regard to this defendant is, that he acted as foreman on a job for which his father, William Swirnow, had the contract, and on which his father paid two workmen five dollars per day. The judgment of conviction against this defendant must be reversed.

Charge of Conspiracy as against William Swirnow.

This defendant was a member of the contractors’ association. Aside from this fact there is nothing to link him with any alleged conspiracy except for the fact that he paid his painters on public school jobs, for which he held contracts, less than the prevailing rate of wage.

Charge of Conspiracy as against James Abisror.

There is no direct testimony, either by Person, the secretary of the contractors’ association, or the hearsay testimony of Freeman, to indicate that this appellant was even a member of the association The only connection from which an inference is drawn, that he was a member of the association, was the fact that he made a check in the amount of ten dollars, payable to the association. (See People’s Exhibit No. 29.) Respondent claims that this was the initiation fee which the appellant paid for his admission to the organization. Yet respondent emphasizes, with reference to other appellants, that they paid an initiation fee of twenty-five dollars for membership in the organization. Under the circumstances, Abisror’s membership, on the basis of this evidence alone, is subject to grave doubt. There is nothing else in the record to prove conspiracy although the violation of the Labor Law by paying lower wages may have been proved.

As to the defendants Ziff and Markowitz, there is no evidence against them of any conspiracy.

If the conclusions to be drawn from the evidence were those stated by my brother Finch, we would agree with him in his result for reasons stated. The lack of evidence does not justify the conclusion. None of these defendants admitted that they were banded together for the purpose of paying less than the prevailing rate. The Brooklyn and Queens Association was for no such purpose and there is no evidence that it was. These defendants can be punished for paying less than the prevailing rate if such be the case, but the offense cannot be swollen into a conspiracy in order to increase the punishment when evidence of an illegal combination or association, followed by overt acts, is lacking.

For the reasons here stated, the judgment convicting these defendants of conspiracy to violate section 220 of the Labor Law should be reversed, and the information dismissed, as to this charge.

As stated at the beginning, we are not touching upon the charge of the violation of the Labor Law, which is, as we understand it, still open as against these defendants, or such of them as have paid, or been charged with paying, less than the prevailing rate.

The judgment of the Appellate Division, so far as appealed from, should be reversed and the judgment of the Court of Special Sessions convicting the defendants on conspiracy charges should be reversed and the conspiracy charges of the information dismissed.

Finch, J.

(dissenting in part). The unanimous affirmance by the Appellate Division as to these remaining defendants should be affirmed, except as to defendants Ziff and Markowitz. It is impossible upon this record to say that there is no evidence sustaining the finding of the three-judge court of Special Sessions unanimously affirmed by the Appellate Division in so far as the appeal is here taken. The evidence in this record is ample to sustain the finding of Special Sessions; but even if the evidence were meager and thin, this court could not review the facts on the weight of the evidence. In other words, although the evidence is decidedly meager and thin, we cannot say that there was no evidence to sustain the conclusions of guilt as found by the triers of fact, the judges of Special Sessions. This court cannot review the facts or the weight of evidence.” (People v. McCarthy, 250 N. Y. 358, 364.) As confirming this view of the evidence in this record, when the Appellate Division reversed and discharged Goldstein and Magoon and six other defendants, the decision was not placed upon the ground that there was no evidence, but upon the ground that the finding was against the weight of the evidence.

In brief, the evidence against these defendants divides itself into three classes. First, sixteen witnesses testified against these remaining defendants, except Ziff and Markowitz, that they paid less than the prevailing rate of wages, and against this testimony there was no testimony by way of denial or explanation offered on the part of defendants. We thus have in a small neighborhood a number of men who are known to each other, closely associated together, and doing the same kind of work, and committing the same violations in time, place and circumstance. This constitutes some evidence to be submitted to the jury bearing on this charge of conspiracy. (People v. Luciano, 277 N. Y. 348, 359; 1 Wigmore on Evidence [2d ed.], § 304; cf. People v. Van Tassel, 156 N. Y. 561, 564; Commonwealth v. Smith, 163 Mass. 411, 418.)

We next have evidence showing that these defendants were associated together in the Brooklyn and Queens Contractors Association. The importance of this testimony is not that the association was illegal and, hence, membership constituted participation in the conspiracy, but that those who were banded together in the organization were in close communication with one another. The commission of like offenses under similar circumstances by persons in close communication with one another, surely is some evidence of a common design or conspiracy. (Wigmore on Evidence, supra.)

As to one of the defendants, Abisror, there is no evidence that he was a member of this association, but there is evidence from which an inference might be drawn that he was seeking membership therein.

The third class of evidence is that of admissions by these defendants that they were associated together for the purpose of obtaining for themselves these repair contracts without paying the prevailing rate of wages. In brief, these admissions were made in answer to the peaceful supplications of the union that the defendants carry out their contracts and obey the law by paying the prevailing rate of wages. In answer to which the statements were, in brief, that the defendants were banded together for the purpose of paying less than the prevailing rate, and paying a percentage of the total amount of the contracts for being protected by gangsters.

The Appellate Division has reversed and discharged the alleged gangsters who were found guilty by Special Sessions as against the weight of the evidence; and, therefore, these admissions only bear on the question of the guilt of these defendants in so far as they are alleged to have conspired to obtain these contracts by means of paying less than the prevailing rate of wages.

No defense is possible to these defendants by way of lack of knowledge of the prevailing rate of wages, as this was fixed by the Comptroller before the bids were had on these contracts, and the contracts expressly provided the scale, of wages to be paid to the different kinds of mechanics and helpers. As pointed out by the Appellate Division, there was no possibility of discriminating between • the wages paid to painters, decorators and to their helpers, fdr the reason that in this contract the Comptroller fixed only one rate for this work, as contrasted with a subdivision of other work between master mechanics and apprentices.

It follows that the judgments appealed from, except as to defendants Ziff and Markowitz, should be affirmed.

Lehman, Htjbbs and Loeghran, JJ., concur with Crane, Ch. J.; Finch, J., dissents in part in opinion in which Rippet, J., concurs; O’Brien, J., taking no part.

Judgment accordingly.


author: Rippey, J.

text:
    Jacob Teller, Respondent, v. Prospect Heights Hospital, Appellant.
    Argued April 3, 1939;
    decided May 31, 1939.

      Eugene T. O’ Neill and James E. Turner for appellant.
    The complaint, which is predicated upon a breach of statutory duty, fails to state facts sufficient to constitute a cause of action since the only violation alleged is of a rule of the Industrial Code or of the Industrial Board. Violation of such a rule cannot form the basis for a statutory cause of action. (New Amsterdam Casualty Co. v. National Union Fire Ins. Co., 236 App. Div. 494; Small v. Sullivan, 245 N. Y. 343; Baxter v. McDonnell, 154 N. Y. 432; United States v. Grimaud, 220 U. S. 506; Schumer v. Caplin, 241 N. Y. 346; Johnson v. Certain-Teed Products Corp., 273 N. Y. 678; Martin v. Herzog, 228 N. Y. 164; Carlock v. Westchester Lighting Co., 268 N. Y. 345; Kiszkiss v. Willsea Works, 249 App. Div. 705; Laviera v. Pfaudler, 249 App. Div. 924; Moccia v. Pfaudler, 251 App. Div. 796.)

      Jacob D. Fuchsberg and Henry E. Cohen for respondent.
    The allegations of the complaint setting forth the violation of both section 202 of the Labor Law (Cons. Laws, ch. 31) and the rules of the Industrial Board pursuant thereto state a good cause of action under the statute. (Schmidt v. Merchants Despatch Transp. Co., 270 N. Y. 287; Novitz v. Maine, 273 N. Y. 573; Stern v. Great Island Corp., 250 App. Div. 115; Griebsch v. Babitt, Inc., 164 Misc. Rep. 70.)
   Rippey, J.

Plaintiff has brought this action against defendant, who was the owner in possession and in charge of the maintenance, operation and control of the building and premises located at 440 St. John’s place, Brooklyn, N". Y., to recover damages for injuries which plaintiff claims he sustained on November 22, 1937, when, as he asserts, he fell from one of the windows of the building while being required or permitted by defendant to wash or clean the window from the outside. The accident, plaintiff says, was due solely to violation by defendant of its duty, “ in accordance with the provisions of the Labor Laws of the State of New York, the Industrial Code and the Rules of the Industrial Board of the State of New York, to provide anchors attached to the side frames of the windows or to the building at a point not less than forty-six inches nor more than fifty-one inches above the window sill, as a means to enable the windows of the said building to be cleaned from the outside in a safe manner.” Plaintiff was not an employee of defendant. Defendant pleaded as a second separaté defense that the risks of the work were assumed by plaintiff. On motion at Special Term by plaintiff, made under subdivision 6 of rule 109 of the Rules of Civil Practice, the defense was stricken out. The Appellate Division affirmed by a divided court, granted leave to appeal to this court and certified to us the question: “ Is the second defense pleaded in the answer sufficient in law? ”

The appellant asserts that the complaint is insufficient as matter of law in that it fails to state a cause of action. Our decision is confined to the question certified, but, in answering that question, we must determine before proceeding further as to whether the complaint states a good cause of action (Salimoff & Co. v. Standard Oil Co., 237 App. Div. 686; affd., 262 N. Y. 220; Baxter v. McDonnell, 154 N. Y. 432; Emery v. Rochester Telephone Corp., 271 N. Y. 306), although the question is first raised in this court (Small v. Sullivan, 245 N. Y. 343).

The only provision of the Labor Law (Cons. Laws, ch. 31) which has been called to our attention as pertinent is section 202 which, as of the date when the accident occurred, read as follows: Protection of persons engaged at window cleaning. On every public building where the windows are cleaned from the outside, the owner, lessee, agent, manager or superintendent in charge of such building shall provide, equip and maintain approved safety devices on all windows of such building. The owner, lessee, agent, manager or superintendent in charge of any such public building shall not require, permit, suffer or allow any window in such building to be cleaned from the outside unless means are provided to enable such work to be done in a safe manner in conformity with the requirements of this chapter and the rules of the industrial board. Every employer or contractor shall require his employee while engaged in cleaning any window of a public building from the outside, to use the equipment and safety devices required by this chapter and the rules of the industrial board. No person shall clean any window of a public building from the outside unless the equipment and safety devices required by this chapter and the rules of the industrial board are provided for his protection and used by him while engaged at cleaning such window.”

We think the complaint cannot be so construed as to permit the cause of action to depend upon the statute alone. The allegation of violation of duty is exclusively limited to the failure of the defendant “ to provide anchors attached to the side frames of the windows or to the building at a point not less than forty-six inches nor more than fifty-one inches above the window sill, as a means to enable the windows of the said building to be cleaned from the outside in a safe manner.” The statute does not in terms provide that anchors shall be attached to the windows of the building nor does it provide any particular device or contrivance that shall be provided to make it safe for the window washer to clean the window from the outside. We are required to look to the Industrial Code, the provisions of which, incidentally, are not specifically referred to or pleaded as is required by a pleader in a good complaint, to learn what rules of the Industrial Board are applicable, what means have been required by the rules of the Industrial Board to be furnished and what devices have been or may be approved for the safety of the person cleaning windows. The rules relating to window cleaning (Industrial Code, Bulletin No. 21), effective April 1, 1933, adopted and approved in accordance with the provisions of sections 27-29 of the Labor Law, provide for safety equipment for window cleaners consisting of (1) ladders, (2) sectional ladders, (3) swinging scaffolds, (4) boatswains’ chairs, and (5) belts, terminals and anchors, when approved by the Industrial Board, and other devices and methods of cleaning in use prior to the adoption of those rules and not specified therein when approved by the Industrial Commissioner, any one of which means may be sufficient and appropriate, and require the window cleaner to use such safety devices as above specified as may be provided for bis protection. In the event that any practical difficulties or unnecessary hardship ” should result in a particular case in the enforcement of any of such provisions, the board may make a variation from such requirements if the spirit of the provision or rule shall be observed and public safety secured ” (Labor Law, § 30), or may amend the provision, rule or order if it is invalid or unreasonable (§ 110). There is no allegation in the complaint that no safety device whatever within the requirements of the statute and of the Industrial Code was provided for the plaintiff’s use. Plaintiff alleges merely .that one of numerous safety devices specified in the Industrial Code was not provided. Section 202 leaves it to the Industrial Board to provide details of equipment, any one of several classes of which, if sufficient and appropriate and approved by the designated officials, would relieve the defendant from liability.

Recovery must be based alone upon an actionable wrong whether the violation of the statute is alleged or the violation of a rule or regulation of the Industrial Board is asserted and the cause of action is grounded in negligence (Schmidt v. Merchants Despatch Transportation Co., 270 N. Y. 287). There is no allegation of negligence in the complaint. Had the cause of action been based on negligence, violation of a statute might constitute negligence as a matter of law. (Amberg v. Kinley, 214 N. Y. 531, 535; Martin v. Herzog, 228 N. Y. 164; Schmidt v. Merchants Despatch Transportation Co., supra.) Violation of a rule of the Industrial Board, however, constitutes merely some evidence which the jury may consider on the question of defendant’s negligence, along with other evidence in the case which bears on that subject (Schumer v. Caplin, 241 N. Y. 346; Carlock v. Westchester Lighting Co., 268 N. Y. 345, 349).

Having concluded that the complaint fails to state a good cause of action, we cannot consider the sufficiency of the answer, and the answer, even though it were bad, is sufficient for a bad complaint (Baxter v. McDonnell, supra, p. 437).

The orders should be reversed and the motion to strike out the second affirmative defense denied, with costs to the appellant in all courts. The question certified is answered in the affirmative.

Cbane, Ch. J., Lehman, Hubbs, Lotjghban and Finch, JJ., concur; O’Bbien, J., taking no part.

Ordered accordingly.