text:
    George A. Armstrong, Respondent, v. Antonio Sisti, Appellant.
    Bailment — warehousemen — negligence — intoxicating liquors — pleading — complaint alleging breach of obligation implied or imposed by law upon defendant probably sufficient though it fails to allege express agreement with or obligation to plaintiff — no obligation to account for or to return property unless custody had been relinquished to claimed bailee — no bailment of intoxicating liquors seized by Federal officers and deposited in defendant’s warehouse, the door of which was sealed and the key retained by the officers — insufficiency of evidence to warrant inference of negligence on the part of defendant through which liquors were lost, destroyed or stolen — quaere whether legal damage is sustained or may be proven for deprivation of property which plaintiff may not legally hold, use or sell.
    1. If a complaint alleges and the evidence shows breach of an obligation to plaintiff, implied or imposed by law because of the circumstances under which goods were deposited in the defendant’s storeroom, it is probably sufficient though it fails to allege expressly agreement with, or obligation to the plaintiff. Obviously, however, there can be no obligation to account for or to return property to bailor, owner or third party unless custody of the property has been relinquished by its holder and intrusted to the person claimed to be a bailee.
    2. Where, therefore, intoxicating liquors, belonging to plaintiff, had been seized by officers of the Federal government and deposited by them in defendant’s bonded warehouse, the door of which was locked and sealed and the key retained by the government officers, there was no bailment, and defendant’s obligation, if any, for the value of liquors removed from the warehouse during the period which elapsed before they were ordered to be returned to plaintiff, more than two years after seizure, must be based upon some element other than possession, custody or control relinquished by the holder to the defendant.
    3. Assuming that the defendant was under some duty to exercise care, commensurate with the circumstances, to protect the room where the liquors were stored from entry without permission of government officers and to protect the contents from theft or destruction, and that the circumstances of the ease might be sufficient to make the defendant hable to the owner of the liquors if they were lost, destroyed or stolen through his negligence, where the government retained the sole right to enter the storeroom and to control the liquor in it and it fairly appears, or at least is a reasonable inference from the record, that the liquor was removed by government agents or by men clothed with appearance of government agents and admitted to the room with the approval, or because of the negligence of government officers who had the custody of the key to the room, no inference of negligence on the part of the defendant toward the government arises from the otherwise unexplained removal of the liquor, and since the plaintiff had not the custody of the goods and did not place them in the defendant’s warehouse, defendant’s obligation of care toward the plaintiff, if any, did not transcend the limits of his obligation to the government. The plaintiff, therefore, failed to make out a cause of action and the complaint should have been dismissed.
    4. In any event the order for the return of the liquors to the plaintiff is an adjudication only that the search and seizure was unlawful and not that possession by the plaintiff is lawful. The evidence produced by the defendant shows conclusively that the plaintiff has no lawful right to hold or use the liquor and it may well be doubted whether legal damage is sustained or may be proven for deprivation of property which the plaintiff may not legally hold, use or sell.

      Armstrong v. Sisti, 214 App. Div. 810, reversed.
    (Argued April 2, 1926;
    decided May 4, 1926.)
    Appeal from a judgment of the Appellate Division of the Supreme Court in the fourth judicial department, entered July 8, 1925, affirming a judgment in favor of plaintiff entered upon a verdict.

      Clarence E. Williams for appellant.
    The defendant owed the plaintiff no obligation whatever. Actual possession of the whisky to the exclusion of all others was absolutely essential to make out a bailment. (Union Trust Co. v. Wilson, 198 U. S. 30; Garvey v. Union Trust Co., 29 App. Div. 518; Van Wagoner v. Buckley, 148 App. Div. 808; Titsworth v. Winnegar, 51 Barb. 156; Trunick v. Smith, 63 Penn. St. 18; Benjamin on Sales,

      § 174; Drury v. Moors, 171 Mass. 252; Commercial Exchange Bank v. Blye, 101 N. Y. 303; Matter of Rogers, 125 Fed. Rep. 169.) There was no contractual relation, either express or implied, between plaintiff and defendant and relation of bailor and bailee never existed. (Hogan v. O’Brien, 123 Misc. Rep. 865; First Nat. Bank v. Ocean Nat. Bank, 60 N. Y. 278; Wechsler v. Picard Importing Co., 94 Misc. Rep. 157; 2 Black. Comm. 451; Story on Bailments, § 60; Fletcher v. Ingram, 46 Wis. 191; Nicol v. C-, 73 Ill. 348.)

      Fred J. Sisson for respondent.
    The defendant was a bailee for hire of the goods and it was his duty to deliver the goods to the lawful owner upon demand or to give a satisfactory excuse for his failure so to deliver. (Foulke v. N. Y. Cons. R. R. Co., 228 N. Y. 275; Mullen v. Chickering, 110 N. Y. 513; Lichtenstein v. Jarvis, 31 App. Div. 33; Jones v. Morgan, 90 N. Y. 4; Schwerin v. McKie, 51 N. Y. 180; Herman v. New England Navigation Co., 143 App. Div. 551; Wilson v. Chrystal, 187 App. Div. 660.)
   Lehman, J.

On the evening of October 22, 1920, certain officers and agents of the United States government acting under a search warrant issued by a United States Commissioner, seized a large quantity of liquor and a still which they found on premises occupied by the plaintiff. The defendant was engaged in the importation and sale at wholesale of groceries and other commodities. In connection with this business he had established under government regulation a private “ Customs Bonded Warehouse ” in a small storeroom which was partitioned off from a larger room on defendant’s premises. Access to this storeroom could be gained only through the defendant’s premises and to that extent was controlled by the defendant. There was a sealed lock upon the door to the small storeroom used as a bonded warehouse and the key to the lock was in the possession of United States officers. The defendant had neither means nor right to enter this small storeroom after it was locked. The morning after the liquors and still were seized and removed from plaintiff’s premises, they were deposited in this small room. The door was locked and sealed and the key retained by the government officers. On December 23, 1922, more than two years after the seizure, an order was made adjudicating that this plaintiff was entitled to the return of the seized liquor on the ground that the search warrant and the seizure under the warrant were illegal. The order provided that “ the fair value of the use of the storage warehouse of A. Sisti .& Company for the storage of the said liquors is the sum of $45.00 per month ” and adjudged that this plaintiff was liable for the payment of the “ said storage ” from the date of the seizure to the first day of July, 1922. When the storeroom was unlocked to permit the return of the liquors to the plaintiff it appeared that a large part of the liquors placed in the room was no longer there. The plaintiff has now recovered a judgment in the sum of $3,500 for damages which the jury has found he suffered from the loss of the liquors.

The complaint alleges that the officers and agents of the United States government placed the liquors in the defendant’s warehouse and that the defendant agreed to store and safely keep in his said warehouse the said personal property above described until the same should be called for by some one duly authorized to receive the said goods or until a court of competent jurisdiction should order that the said goods be returned to the plaintiff ” and that the defendant failed to return the property on demand and did not safely keep and store the said personal property but the same was lost through the defendant’s negligence in failing to take proper care thereof. The theory of the complaint and the theory upon which the case was submitted to ihe jury was that the deposit of the liquors in the storeroom on defendant’s premises might be regarded as a bailment and that the defendant could be held liable to the plaintiff as bailee or warehouseman of plaintiff’s property for failure or refusal to deliver all the liquors deposited, unless he could establish a legal excuse for such refusal. Upon this appeal the defendant seeks to raise a number of interesting questions as to the correctness of various rulings at the trial and especially as to the correct measure of damages. Consideration of these questions becomes unnecessary if we decide that the plaintiff has failed to establish his cause of action.

The plaintiff has not pleaded or proved that he deposited the liquors in the defendant’s warehouse. Concededly at the time that they were placed in the storeroom they were "n the custody of the government officers. If the deposit constituted a bailment, it was a bailment by the government officers. If, as the complaint alleges, the defendant assumed by agreement the obligation to safely store and keep the property, the agreement was one made with the government officers and the complaint is entirely silent as to any agreement with the plaintiff. It is true that this court has said that “ bailment does not necessarily and always, though generally, depend upon a contractual relation. It is the element of lawful possession, however created, and duty to account for the thing as the property of another, that creates the bailment, regardless of whether such possession is based on contract in the ordinary sense ” (Foulke v. N. Y. Consolidated R. R. Co., 228 N. Y. 269, 275), and if the complaint alleges and the evidence shows breach of an obligation to this plaintiff, implied or imposed by law because of the circumstances under which the goods were deposited in the defendant’s storeroom, the complaint is probably sufficient though it fails to allege expressly agreement with or obligation to the plaintiff.

The circumstances which create a bailment may vary, but obviously there can be no obligation to account for or to return property to bailor, owner or third party unless custody of the property has been relinquished by its holder and intrusted to the person claimed to be a bailee. Here, as we have pointed out, the liquor was seized by government officers; regardless of whether the seizure was legal or illegal, they had the custody of the seized property. Without an order from the court for its return the plaintiff could not obtain the property or control its disposition. The government officers placed the liquors in the defendant’s storeroom but they retained the keys. -The defendant could prevent others from entering the storeroom just as the owner of an apartment house can prevent others from entering a leased apartment and removing goods therefrom, but he himself could not enter the room and he could not admit others to it. He could not remove the goods from the room and he had no control of them while in the room. On the other hand, the government officers had right of access to the room though the defendant perhaps could by force exclude them; they could unlock the door and unless the defendant entered into a special agreement limiting their rights in this regard, they might remove the goods from the warehouse even against the defendant’s protest. Ordinarily where goods are deposited in a United States bonded warehouse the depositor of the goods divests himself completely of the custody of the goods. Upon complying with the terms of the express or implied contract of storage and upon payment of the government charges, he is entitled to their return. Until their return he has no control of them. The provisions of the United States Revised Statutes, which regulate the manner in which such warehouses may be established and maintained, serve to limit the control of the warehouseman over the warehouse and its contents to the same extent as they create right of partial control in the United States government or its officers; but control and custody is completely relinquished by the depositor and is completely assumed by the warehouseman subject only to the provisions of the statutes. These provisions may be read into the contract of storage but the obligations assumed by a bonded warehousekeeper to those who deposit goods in the warehouse are the same as those of any other ware-housekeeper within the limits of control left by statute to the warehouseman. (Claflin v. Meyer, 75 N. Y. 260; Macklin v. Frazier, 9 Bush [Ky.], 3.) In the case now under consideration the plaintiff relinquished no custody when the goods were deposited in defendant’s warehouse. They were then in the custody of the government officers. Custody of the goods by government officers was not relinquished subject to the provisions of the Revised Statutes in regard to bonded warehouses. It was retained by the government officers because they held the key to the room and could deal with the liquors as they chose. There may be a bailment when custody is relinquished even though placed in joint control of two instead of sole control of one; there can be no bailment when custody and control of property is retained by the holder though another party may have placed himself in a position which imposes upon him some obligation of care in regard to the property. The defendant may be under some obligation to use care to protect the contents of the room ■ against theft or destruction. Whether such obligation exists we may consider hereafter, but in strict sense there has been no bailment here and the obligation if any must be based on some element other than possession, custody or control relinquished by the holder to the defendant.

It is urged that in the case of Jones v. Morgan (90 N. Y. 4) this court held that the keeper of a warehouse became the bailee of goods placed therein by an owner though the goods were placed in a separate room and at the owner’s request a second lock was placed on the door and the key to that lock given to the owner. The circumstances in that case are not entirely analogous to those now under consideration but it is not important that distinction be drawn here. Though the court there stated that the contract was one of bailment, the only question presented to the court was whether the plaintiff’s goods were lost through negligence on the part of the warehousekeeper and the court pointed out that its decision upon that question would be the same whether the contract between the parties be regarded as one of bailment of goods or one for the hiring of a room. In either case the defendant was under obligation to use reasonable care to prevent unlawful entry into the room and theft of its contents and this obligation the defendant in that case failed to meet. Undoubtedly from the relationship of the parties, obligation on the part of the warehousekeeper, in important respects analogous to that of a bailee arose, so that for most purposes the relation might be regarded as one of bailment but it has been pointed out by legal writers that “ the relation is not that of bailor and bailee in the full meaning of that relation.” • (Van Zile on Bailments & Carriers [2d ed.J, section 196.) At least we may say that there is no obligation to keep the so-called bailor of the property from dealing with the room and its contents as he sees fit and no duty to account to the so-called bailor for goods placed in the room unless it appears that the goods were not removed by the bailor or other person to whom the bailor gave opportunity for access. Until inference is negatived that the goods may have been removed by the depositor or persons admitted to the room by him, burden of explaining the removal or loss of the goods may not be placed upon a warehousekeeper who may not even enter the room where the goods were placed.

We will assume that in the present case also the defendant was under some duty to exercise care, commensurate with the circumstances, to protect the room, where the liquors were stored, from entry without permission of government officers and to protect the contents from theft or destruction. Question still remains whether such duty was owed to the plaintiff who did not hire the room or place the liquor therein and whether the evidence shows that the liquor was lost through the defendant’s failure to carry out such duty.

We have already pointed out that contractual relation between the plaintiff and the defendant was not alleged or proven. The provision contained in the order for the return to the plaintiff of the seized liquor which directed the plaintiff to pay part of the value of the use of the ware-room for storage of the liquors was not an adjudication of contractual liability to the defendant. It was merely an adjudication that the plaintiff was bound to pay part of the expense for which the government of the United States was liable, in so far as that expense was increased by failure of the plaintiff to take timely proceedings to compel the return of the liquor to him. Though the plaintiff was not a party to the storage of the liquors in the wareroom, his son and his attorney were present when the liquors were placed there and joined in the conversation between the government officer and the defendant’s representative. That conversation was more or less casual. It was clearly insufficient to sustain a finding o‘f contract between the parties; but in that conversation the plaintiff’s representatives gave notice of the plaintiff’s interest in the liquor and its safe storage until adjudication could be had of the legality of its seizure and they received some measure of assurance that the wareroom was a safe place to store the liquor until lawfully removed. Perhaps that conversation, together with the other circumstances in the case, might be sufficient to make the defendant liable to the owner of the liquors if they were lost, destroyed or stolen through negligence of the defendant. We may assume, without now deciding, that this is true; nevertheless the obligation of care is primarily one which the defendant owed, not to the plaintiff, but to the United States government, whose agents placed the liquors there. The plaintiff could not interfere with the arrangements made by them; and the plaintiff knew that the defendant was under duty of care in regard to the liquors or the room where they were placed, only in so far as such duty was assumed by or imposed upon the defendant by the circumstances under which the liquors were placed in the storeroom. If there is liability to the plaintiff it must be because of failure to carry out this duty. Any duty to the plaintiff as owner was measured by the extent of the defendant’s duty to the government which had custody and control of the liquors and placed them in defendant’s premises. The extent of that duty could be changed by agreement with the government or could be terminated at any time by removal of the liquors from the defendant’s premises.

There is no evidence to show how the liquors were removed. They were placed in the storeroom in October, 1920; a large quantity was no longer there in December, 1922. Finding of negligence on the defendant’s part can be based only on inference drawn from the circumstances. If custody of the liquors to the exclusion of others had been in the defendant, unexplained failure to return the liquors would have given rise to such inference of negligence or wrong. Here, however, the defendant could not enter the room because it was locked and sealed and the government officers did have access to the room. If inference may properly be drawn from the evidence presented at the trial that the liquors were not withdrawn or removed by government officers or others who were able to enter the room because the government officers, by their own acts, gave them access to it, then it may be that inference of negligence on the part of the defendant or his servants might be drawn from failure to explain the disappearance of the liquors, for the storeroom was merely partitioned off from a larger room to which there could be no access without the knowledge and acquiescence of defendant’s servants. The testimony of the defendant shows that persons claiming to be officers of the government and wearing badges had come to defendant’s place of business and asked to be admitted to the storeroom. They always brought with them the key to the storeroom and were admitted to the storeroom. Some of these men carried suit cases. Such men were allowed to enter the storeroom some thirty-five times. • Though it is not entirely clear how these men carried away all the stolen liquor, yet it is fair inference that it was stolen by these men. No other persons were admitted to the room; no servant of the defendant had a key to the room and the lock on the door was apparently unbroken. There is no evidence that any boards of the partition of the room were broken. The plaintiff’s son and attorney seem to have been satisfied at the time that the liquor was placed in the storeroom that the room itself was safe and that the liquors could not be removed unless entrance to the room was allowed to unauthorized persons. If the persons admitted to the room were in fact government officers or agents authorized to enter the room, the defendant was under no duty to see that they removed no liquor therefron. Government officers' who placed the liquor in the storeroom had the key to the room. By their possession of the key they had the right and power to exclude others from the room. They also could secure entrance to the room for themselves or others and the defendant had no right to interfere with any disposition the government, through its officers or agents, chose to make of the liquor. It appears from the testimony of several government officers that at times they accompanied men whom they believed to be prohibition agents to the storeroom and unlocked the door for these men. They did not remain and watch what these men did, but on several occasions left the keys with them. On two or three occasions they left the keys with these men overnight. It may hardly be said that when the government officers having the key to the storeroom, and through that key the control of the liquor in the room, chose to use the key to secure entrance for others whom they believed to be government agents, the defendant was under any duty to see that the men so admitted did not remove the contents of the room. The retention of the key was for the purpose of excluding persons not authorized by the government to enter the room and interfere with its contents and when the government officers unlocked the door or sent the key to unlock it in order to admit certain persons to it, any theft of the liquors by the persons so admitted was due to the act of the government officers in charge of the keys. The defendant assumed no duty to supervise the action of persons so admitted. It may be argued that upon the whole record the jury might have found that since the defendant allowed men to unlock and enter the storeroom about thirty-five times and since the evidence does not show that government officers unlocked the door or parted with the key as often, the defendant at times permitted the entrance to the room of men who had no authority from the government or right to use the key which they brought with them and that the liquor may have been removed at these unauthorized visits. That may be true, though to some extent it seems to rest upon conjecture rather than proof. Even if men were at times admitted without authority from government officers, the men admitted always had the key to the room. Since the key was in the possession of the government, it would seem that when these men brought a key it must have been given them by the officer who had charge of it or that the key was copied when it was left by government officers with unauthorized persons over night. In any case it is a fair and perhaps necessary inference that admission was obtained with the approval or because of negligent acts of government officers. Through that approval or because of that negligence the persons who were allowed entrance to the room by the defendant were at least apparently clothed with authority to enter the room for purposes not disclosed to the defendant. It may hardly be said that the defendant was negligent towards the government in failing to watch these men or was bound to ask for further proof of authority.

Since the government retained the sole right to enter the storeroom and to control the liquor in it and it fairly, appears, or at least" is a reasonable inference from the record, that the liquor was removed by government agents or by men clothed with appearance of government agents and admitted to the room with the approval, or because of the negligence of government officers who had the custody of the key to the room, no inference of negligence on the part of the defendant toward the government arises from the otherwise unexplained removal of the liquor. Since the plaintiff had not the custody of the goods and did not place them in the defendant’s warehouse, defendant’s obligation of care toward the plaintiff, if any, did not transcend the limits of the defendant’s obligation to the government. The plaintiff, therefore, failed to make out a cause of action and the complaint should have been dismissed.

Discussion of the other claims of error made by the plaintiff would serve no useful purpose. We should, however, point out that the order for the return of the liquors to the plaintiff is an adjudication only that the search and seizure was unlawful and not that possession by the plaintiff is lawful. The evidence produced by the defendant shows conclusively that the plaintiff has no lawful right to hold or use the liquor. It may well be doubted whether legal damage is sustained or may be proven for deprivation of property which the plaintiff may not legally hold, use or sell. Perhaps the point is not raised by exception. At present we merely point out the doubt so that no inference may be drawn from reversal based on the ground that no negligence was proven, that we would sustain a judgment for substantial damage even if negligence had been shown.

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

His cock, Ch. J., Cakdozo, Pound, McLaughlin and Crane, JJ., concur; Andrews, J., absent.

Judgments reversed, etc.


source: Caselaw Access Project

author: Lehman, J.

license: Public Domain

text:
    The People of the State of New York, Respondent, v. Charles H. Stoll, Appellant.
    Crimes • — ■ officers — language of penal statute should be clear — courts will not give strained construction to statute so as to effect punishment of public officer for acts done without corrupt motive — indictment charging violation of statute prohibiting public officer from becoming individually interested in sale, lease or contract which he is authorized in his official capacity to make — employment of defendant’s firm as counsel to water commissioners appointed by town board of which defendant was member and payment for services out of proceeds of bonds issued and sold by town board — employment and right to compensation did not constitute an interest in sale, lease or contract within, meaning of statute — erroneous charge that town board made contract on appointment of commissioners and for issuance and sale of bonds and that defendant became interested therein by accepting appointment as counsel and accepting compensation from proceeds of bonds — indictment dismissed.
    1. A penal statute should use language which is clear so that all who read it may know what act is forbidden. Though ignorance of the law may ordinarily constitute no excuse for its infraction, the courts may not give to words of the statute a sense different from that in which they would be understood by the ordinary citizen. While they should give liberal construction to statutes which decree punishment for public officers who prove faithless to their trust, they may not give a strained construction to a statute which will result in the punishment of a public officer for acts performed in the public view without corrupt motive and which do not tend to introduce the influence of possible adverse private interest into the performance of acts which should be dictated only by considerations of public welfare.
    2. Where a town board, of which defendant was a member, established a water district, and, pursuant to section 285 of the Town Law (Cons. Laws, ch. 62), appointed commissioners who thereafter retained a firm of lawyers, of which defendant was a member, as their counsel, which firm was paid for their services out of the proceeds of bonds issued and sold by the town board to raise an amount certified by the commissioners to be necessary for the construction of the water system, it cannot be held that the employment of defendant’s firm as counsel to the commissioners of the water district and the defendant’s right to compensation for services performed as such counsel, constituted an interest in a sale, lease or contract which the defendant as member of the town board was authorized to make or to take part in making, within the meaning of section 1868 of the Penal Law.
    3. A charge by the trial justice, in effect, that the town board made and was authorized to make first a contract with the men named as commissioners for their appointment as such and second a contract with a trust company for the issuance and sale of the bonds, and that the jury might find that the defendant voluntarily became interested in such contracts by accepting appointment as counsel to the commissioners and by receiving compensation from the proceeds of the bonds, fundamentally misconceives the situation. The statute did not expressly or by fair implication prohibit the defendant, though a member of the town board, from accepting employment by commissioners of a separate administrative district, though the district was created and the commissioners appointed by the town board. The defendant, by such employment, did not become interested in any contract which he, as a member of the town board, was authorized to make or to take part in making, nor did he become interested in the subsequent sale of bonds by the town board, though compensation was made to him ’ from the proceeds of the sale. An indictment, therefore, charging defendant with a violation of section 1868 of the Penal Law should have been dismissed. .

      People v. Stoll, 215 App. Div. 788, reversed.
    (Argued April 6, 1926;
    decided May 4, 1926.)
    Appeal from a judgment of the Appellate Division of the Supreme Court in the second judicial department,entered December 18, 1925, which affirmed a judgment of the Nassau County Court convicting the defendant of the crime of taking an unlawful fee.

      Henry A. Uterhart and Alfred M. Schaffer for appellant.
    The defendant was not legally disqualified from acting as attorney and counsel for the water commissioners by r-eason of his membership in the town board. (Holroyd v. Town of Indian Lake, 180 N. Y. 318; People ex rel. Farley v. Winkler, 203 N. Y. 445.) The facts fail to establish the crime of a public officer, authorized to make a contract in his official capacity, becoming interested in such contract, directly or indirectly, in violation of section 1868 of the Penal Law. (Beebe v. Board of Supervisors, 64 Hun, 377; Engel v. Garner, 116 Misc. Rep. 289; People ex rel. Schenectady Co. v. Board of Supervisors, 156 App. Div, 758; Escondido Lumber, Hay & Grain Co. v. Baldwin, 84 Pac. Rep. 284; Fisher v. City of Mechanicville, 225 N. Y. 210; Connolly v. Craft, 205 App. Div. 583; Collins v. Village of Saratoga Springs, 70 Hun, 583; 140 N. Y. 683; Quintard v. City of New York, 51 App. Div. 233; Sweeney v. Mayor, etc., 5 Daly, 274; 58 N. Y. 625; Meyers v. Mayor, etc., 69 Hun, 291; Collins v. Mayor, etc., 3 Hun, 680.)

      Elvin N. Edwards, District Attorney (Charles I. Wood of counsel), for respondent.
    Section 1868 of the Penal Law is not to be construed strictly as against the People, but rather is to be strictly and scrupulously enforced as against the defendant. Its violation is a crime malum prohibitum and not malum in se. (Smith v. City of Albany, 61 N. Y. 444; Beebe v. Supervisors, 64 Hun, 377; 142 N. Y. 631; Molloy v. City of New Rochelle, 198 N. Y. 402; Heughes v. Board of Education, 37 App. Div. 180; People ex rel. Spaulding v. Supervisors, 66 App. Div. 117; 170 N. Y. 93; People ex rel. Schenectady Ill. Co. v. Board of Supervisors, 166 App. Div. 758; Matter of Moran, 145 App. Div. 642; Matter of Schenectady Ill. Co., 88 Misc. Rep. 226; Marjohn Realty Co. v. City of Long Beach, 122 Misc. Rep. 673; 211 App. Div. 860; Seaman v. City of New York, 172 App. Div. 740; 225 N. Y. 648; Gardner v. People, 62 N. Y. 299; People v. Kibler, 106 N. Y. 321.) The defendant was authorized to make or to take part in the making of the contracts charged in the indictment within the meaning of Penal Law, section 1868. (Beebe v. Supervisors, 64 Hun, 377; Seaman v. City of N. Y., 172 App. Div. 740; Matter of Schenectady Ill. Co., 88 Misc. Rep. 226; People ex rel. Schenectady Ill. Co. v. Board of Supervisors, 166 App. Div. 758.) The defendant “ voluntarily became interested individually in such * * * contract, directly or indirectly ” within the meaning of section 1868. (Holroyd v. Town of Indian Lake, 180 N. Y. 318; People ex rel. Farley v. Winkler, 203 N. Y. 445; People ex rel. Desiderio v. Conolly, 238 N. Y. 326; People ex rel. Morey v. Oyster Bay, 175 N. Y. 394; Lynch v. Rhinebeck, 210 N. Y. 101; Seaman v. City of New York, 172 App. Div. 740; 225 N. Y. 648; Fisher v. City of Mechanicville, 225 N. Y. 210; Schulz v. City of N. Y., 152 App. Div. 39; 211 N. Y. 552; People ex rel. Spaulding v. Supervisors, 66 App. Div. 117; Heughes v. Board of Education, 37 App. Div. 180; Wadsworth v. Erwin, 124 Misc. Rep. 893.)
   Lehman, J.

The defendant, an attorney and counselor at law, was elected a justice of the peace of the town of Oyster Bay in 1919 and re-elected in 1923. As justice of the peace he was also a member of the town board. While he was acting as justice of the peace and a member of the town board of Oyster Bay, his firm was appointed counsel to the commissioners of the Jericho water district and was paid as compensation for services performed as such counsel considerable sums of money out of the proceeds of bonds issued and sold by the town board of Oyster Bay to raise the amount of money which the commissioners of the Jericho water district had specified was needed for the construction of the water system of that district. The first count of the indictment charged in effect that the receipt of this money constituted a violation of section 1826 of the Penal Law (Cons. Laws, ch. 40), the second count of the indictment charged the defendant with violation of section 1868 of the statute. At the close of the case the trial judge dismissed the first count of the indictment. The jury found the defendant guilty under the second count. Sentence of imprisonment for a year and a fine of five hundred dollars has been imposed.

There is no dispute as to the facts which, it is claimed, establish the defendant’s guilt. He is not charged with secret corruption in office. The alleged wrongful acts have been performed in public and indeed for the most part are evidenced by public records. Though the defendant took the stand in his own behalf, he does not deny or seek to discredit any evidence adduced against him. He maintains this evidence does not show that he has done anything unlawful or inconsistent with his duties as an officer of the town board of Oyster Bay. The facts so far as relevant to the questions presented on this appeal may be briefly stated. The defendant is a member of the firm of Stoll & Lawrence. In 1922 the defendant individually and not as a public officer took steps which resulted in the establishment of the Jericho water district within the town of Oyster Bay. He interviewed the large property owners within the proposed district and secured their signatures to a petition for its establishment. After a majority of the owners of taxable property in the district had signed the petition, the defendant’s partner, Mr. Lawrence, presented it to the town board. The petition was filed on June 21st, 1923. Notice of the filing of the petition and of the time and place where the town board would meet to consider it was published. The town board met on the 3rd day of July, 1923. There was no opposition at the hearing. The town board determined that the petition was signed and acknowledged by a majority of the owners of the taxable real property in the proposed water district. Section 285 of the Town Law (Cons. Laws, ch. 62) provides that after such determination the town board shall make an order . establishing such district and appointing three taxpayers therein as water commissioners.” Accordingly such order was made. The three commissioners who were appointed immediately filed bonds in the sum of $1,000 each which the town board approved. The defendant took no formal part in these proceedings and refrained from voting, but he does not claim that he took no part in the preliminary discussions which, it is clear, the members of the board must have had before they agreed upon the appointment of the three commissioners. On July 10th the commissioners held their first meeting and retained the firm of Stoll & Lawrence as their counsel. At the same meeting they appointed an engineer and they agreed that the compensation to be paid to the counsel and to the engineer should be six per cent of the cost of the undertaking. The defendant or defendant's firm performed the work required of them as counsel." They prepared a formal petition to the State Water Control Commission for the approval of proposed plans and sources of water supply. Seven hearings were held by the State Water Control Commission before an order was made approving the plan. Condemnation proceedings were instituted to obtain the land required for the erection of a standpipe. Contracts were prepared for the construction of the water system and were let after public advertisement for proposals. Thereafter the water commissioners served upon the town board of Oyster Bay a written notice, specifying the amount of the contracts and the amount of money needed for the construction of the water system. The town board of Oyster Bay, after proceedings in conformity with sections 287 and 288 of the Town Law, sold the bonds to the Guaranty Trust Company. While the defendant or his firm supervised the legal proceedings concerning the award of the bonds to the Guaranty Trust Company, the defendant himself as member of the town board took no part in any vote concerning the Jericho water district. He was not even present or within the’ State at the time of the meeting at which the bonds were awarded to the Guaranty Company. He took no part in the official proceedings of the town board in regard to the fixing of the amount of the undertaldngs of the commissioners or in the fixing or auditing of the amount to be paid to the commissioners for their services.

The question presented upon this appeal is narrow. Did the employment of defendant’s firm as counsel to the commissioners of the Jericho water district and the defendant’s right to compensation for services performed as such counsel, constitute an interest in a “ sale, lease or contract ” which the defendant as member of the town board was authorized to make or to take part in making, within the meaning of section 1868 of the Penal Law. The appointment of the defendant’s firm as counsel to the commissioners of the Jericho water district was made by the commissioners and not by the town board of Oyster Bay. Their authority to appoint or retain counsel was conferred by the statute and was not delegated to them by the town board. Indeed, the commissioners in the performance of their official duties were not the agents either of the town board or of the town itself. They were appointed by the town board and, under the statute, the town board was required to raise the moneys necessary for the construction of the water works by the issue and sale of bonds. The bonds when issued were a charge upon the town to “ be collected from the property within the water district ” (Town Law, section 288-a), but otherwise the town, or property of the town, is not bound by any action taken by the water commissioners. “ The town, in effect, is made the fiscal agent of the district, with power to compel reimbursement in time to pay the bonds given to secure the money advanced.” (Holroyd v. Town of Indian Lake, 180 N. Y. 318.) The commissioners represent not the town but a special administrative district. (People ex rel. Desiderio v. Conolly, 238 N. Y. 326.) The employment of the defendant’s firm by the commissioners was, therefore, not an employment by the town and under no possible construction may the appointment by the commissioners be regarded as a contract which -the defendant as an officer of the town of Oyster Bay was authorized to take part in making. Compensation received for services as counsel to the commissioners is, in no sense, compensation for any official act he was authorized to perform as an officer of the town. If such appointment was not prohibited by law, then he could lawfully receive the stipulated compensation and the trial justice correctly dismissed the indictment for taking unlawful fees. If prohibited by law we must find such prohibition within. the provisions of section 1868 of the Penal Law.

The fact that the defendant did not participate in formal proceedings taken by the town board or cast a vote in any matter affecting the water supply district is irrelevant on this prosecution and does not under the terms of the statute, exempt the defendant from criminal liability if the action taken by the town board constituted a contract, sale or lease within the meaning of the statute and the defendant voluntarily became interested therein. He is not charged with making a corrupt bargain or receiving a gratuity intended to influence his official action. The prohibition of section 1868 of the Penal Law is directed against acts which might reasonably tend to introduce into the performance by a public officer of his official duties, considerations of possible private interest rather than against the performance of official acts corruptly. It prohibits a public officer from voluntarily putting himself into a position where he might be tempted to degrade his public trust to serve his private interests, even though it should appear that the public officer did not in fact yield to the temptation. The defendant cannot put on and off the garb of a public official, and discharge or refuse to discharge the duties of his trust at will, and as best subserves his private interest.” (Beebe v. Supervisors of Sullivan Co., 64 Hun, 377; affd., on opinion below, 142 N. Y. 631.) Indeed, where a public officer voluntarily places himself in a position which tends in any way to limit his usefulness to the public in the office he has accepted, the propriety of his conduct may be questioned even though not prohibited by law. We are not now considering, however, the propriety of the defendant’s conduct but whether it was forbidden by the Penal Law. Moreover, it is fair to the defendant to point out that in large part the functions of the town board in relation to the water supply district created by it are administrative and even mandatory in their nature and involve no discretion (Holroyd v. Town of Indian Lake, supra), and services honestly and efficiently performed by the defendant as counsel for the water commissioners could hardly seriously interfere with the performance of defendant’s duties as a member of the town board and might serve to safeguard the interests of the property owners of the town.

Under the Town Law the town board of Oyster Bay was called upon to take official action in regard to the Jericho water supply district, and the defendant as a member of the town board was authorized to take part in such action only in those matters specifically placed within the jurisdiction of the town board. As we have already pointed out, the commissioners represent not the town but a special administrative district and within the scope of their duties they are not subject to direction of the town board or its members. The indictment sets forth the proceedings in which the defendant as a member of the town board has authority to take part, viz., the hearing and determination of an application to establish the Jericho Water District in said Town, the making of an order establishing said District, the appointment of the public officers of said Water District, to wit, the Commissioners of the Jericho Water District, the fixing and approving of the undertakings of said Commissioners and the amounts thereof and the sureties thereon, the fixing and auditing of the amounts to be paid to said Commissioners for their services as such, the issuance and sale of the bonds of the said Town pledging the credit of and constituting a charge upon said Town, the raising by the issuance and sale of such bonds by said Town Board of the money necessary for the purposes of said Water District and the payment of the proceeds thereof to said Commissioners to be used by them, among other things, for the payment of salary and compensation to the attorney and counsel of said commissioners.” The prohibition of the statute is directed against the acts of a public officer who voluntarily becomes interested individually in a sale, lease or contract directly or indirectly where he is authorized to take part in the making of such sale, lease or contract. The trial justice charged in effect that the town board made and was authorized to make two contracts; first, a contract with the three men named as commissioners of the Jericho water supply district for their appointment as such, and second, a contract with the Guaranty Company for the issuance and sale of the bonds. He told the jury that they might find that the defendant voluntarily became interested in such contracts by accepting appointment as counsel to the commissioners and by receiving compensation from the proceeds of the bonds.

The defendant upon this appeal urges some technical errors in this charge. We need not consider these objections for we find that aside from them the charge fundamentally misconceives the situation. No cases have been cited to show that an appointment as a public officer may under any circumstances be regarded as a contract and in many cases it has been held that right to public office is not based on contract. (Nichols v. MacLean, 101 N. Y. 526.) It is urged that while in this and similar cases, the court held that an appointment to public office did not constitute a contract in some particular sense, it still might ■ constitute a contract in the sense in which that word is used in the penal statute now under consideration. A penal statute should use language which is clear so that all who read it may knpw what act is forbidden. Though ignorance of the law may ordinarily constitute no excuse for its infraction, the courts may not give to words of the statute a sense different from that in which they would be understood by the ordinary citizen. The Legislature may in proper case make an act criminal which but for the statute would have been lawful; the courts may not by forced construction create a crime. The creation of a new administrative district in accordance with law and the appointment of public officers of such district may create rights and obligations but they are not rights and obligations conferred by contract. They rest upon provisions of law and not upon agreement. Moreover if the appointment of the commissioners could even by forced construction be regarded in any sense as a contract, yet it would not follow that acceptance of employment or office under the commissioners, though carrying with it a right to compensation, would constitute an interest direct or indirect in that contract. True, if agreement had been made in advance by the persons thereafter appointed as commissioners that they would' employ defendant’s firm as counsel, inference might be drawn that the agreement was intended to secure the appointment of these persons as commissioners or to influence the defendant’s official action, but as we have pointed out above, no such charge has been made against this defendant. The defendant’s employment gave him no right to share in the duties, privileges or emoluments of the commissioners’ office. It did not even constitute a sub-contract for the performance of anything which the commissioners agreed or were bound to do and for which they were entitled to compensation. The defendant’s employment was merely to enable the commissioners to perform their functions more efficiently and the compensation for that employment was to be made out of public funds which the commissioners bad the right under the law to disburse. The right of the defendant to compensation is derived solely from his appointment by the commissioners. Their power to make that appointment, it is true, rests upon their tenure of office as commissioners but it can hardly be said that defendant’s right to compensation for services rendered to the commissioners of the water district gives him an interest direct or indirect in the commissioners’ right to hold office merely because his appointment is made by virtue of their official powers.

Conviction of the defendant under this indictment must then rest upon proof that he voluntarily becamé interested in the contract made with the Guaranty Company for the issuance and sale of the bonds to raise the moneys necessary for the purposes of the water district. Concededly, he had no connection with the Guaranty Company and was not interested in any profits which they might make. If he had cast a vote upon the proposition that the bid of that company should be accepted, no considerations of personal advantage -could have entered into his vote. He was at that time entitled to his compensation. The town board could not by any act of theirs deprive him of it. The town board was bound to pay over to the water commissioners the proceeds of the sale of the bonds, to be disbursed by them. (Holroyd v. Town of Indian Lake, supra; People ex rel. Desiderio v. Conolly, supra.) Out of these proceeds payment of the agreed compensation must be made to the defendant. It is said that the right to be paid out of the proceeds of the bonds sold gave the defendant an interest in their sale within the meaning of the statute. Though the language of the statute should not be given forced construction, it should, if possible, be given a construction which will carry out its purpose. We shall not. here attempt a general judicial definition of the language of the statute. Merely for the purposes of this appeal we shall assume the most liberal construction possible should be given to it and that the words “ interest, direct or indirect,” may include any beneficial right or substantial advantage derived from the contract to issue and sell the bonds. If the defendant’s right to compensation were conditional upon this contract for the sale of the bonds, or if the town board by refusing to accept the bid of the Guaranty Company could prevent the defendant from obtaining his agreed compensation, then perhaps argument might be made that the defendant was interested in the contract for the sale of the bonds. We do not pass upon such a situation. Here the defendant received his right to compensation through his appointment by the commissioners. Payment must be made by them out of moneys that come into their hands. Those moneys must be raised by the issuance and sale of town bonds and it was the duty of the town board to raise those moneys in the manner provided by law. The contract of "sale was merely the means provided by the statute to enable the commissioners of the water district to meet the obligations into which they had entered. The defendant not only had no interest in any profits which the Guaranty Company acquired by its contract for the sale of the bonds but he had not even the right to compel the town board to pay directly to him any of the proceeds of the bonds. These proceeds the town board must pay to the commissioners. It was immaterial to the defendant whether the town board made this particular contract or some other contract. It was its duty to' make some contract in accordance with law and if it did its duty the defendant would receive his stipulated compensation. Indeed if the town board refused to perform its duty in the matter the defendant could still enioice his right to compensation, for mandamus would lie to compel the town board to issue and sell the bonds. (Holroyd v. Town of Indian Lake, supra; People ex rel. Farley v. Winkler, 203 N. Y. 445.) Interest in the contract of sale within the meaning of the Penal Law may hardly be predicated upon the fact that the proceeds of the sale would furnish the commissioners of the water supply district with the money necessary to meet their expenses, including compensation to the defendant, where even if the town board refused to make a contract for this purpose the defendant could by mandamus proceedings compel the town board to ,raise the money necessary for this purpose.

The Legislature may decree punishment for public officers who prove faithless to their trust. It may go further and decree that a public officer may not voluntarily place himself in a position where he might be tempted to do wrong. It may impose penal liability upon a public officer who so conducts himself that the finger of suspicion, that his public acts are not governed exclusively by considerations of public benefit, may be pointed at him. The courts should give liberal construction to statutes which tend to accomplish that purpose but they may not give a strained construction to a statute which will result in the punishment of a public officer for acts performed in the public view without corrupt motive and which do not tend to introduce the influence of possible adverse private interest into the performance of acts which should be dictated only by considerations of public welfare. Here the statute did not expressly or by fair implication prohibit the defendant, though a member of the town board of Oyster Bay, from accepting employment by commissioners of a separate administrative district, though the district was created and the commissioners appointed by the town board, for by such employment the defendant did not become interested in any contract which the defendant was authorized to make or to take part in making. The defendant did not become interested in the subsequent sale of bonds by the town board though compensation was made to him from the proceeds of the sale for even if that contract had not been made, he could have compelled the town board to raise the money to pay his compensation in manner provided by law. Since these considerations lead to the conclusion that the indictment against the defendant should have been dismissed it is unnecessary to consider the other exceptions taken by the defendant in the course of the trial.

The judgments should he reversed and the indictment dismissed.

Hiscock, Ch. J., Cardozo, Pound, McLaughlin and Crane, JJ., concur; Andrews, J., not voting.

Judgments reversed, etc.


author: Hiscock, Ch. J.

text:
    Madison Products Company, Inc., et al., Appellants, v. Bird S. Coler, as Commissioner of Public Welfare of the City of New York, et al., Respondents.
    New STork city — ordinance regulating solicitation of assistance for charitable purposes — agreement, as inducement to sales, to pay portion of purchase price of merchandise to designated charity, a solicitation of “ money, donations or financial assistance” within meaning of ordinance — delegation of power to enforce ordinance to commissioner of public welfare lawful — words “public places” in ordinance do not include homes, private offices and factories.
    1. Plaintiffs’ salesmen, who as an inducement to purchasers of their merchandise, agree that a portion of the purchase price shall go to some designated charity, are engaged in soliciting money, donations or financial assistance within the meaning of an ordinance of the city of New York forbidding the solicitation of money, donations or financial assistance of any kind “ upon the streets or in public places ” in that city except upon license issued by the commissioner of public welfare.
    2. Assuming without passing upon the question that the board of aldermen of the city of New York had power to regulate the solicitation of money, donations or financial assistance for charitable purposes, there was nothing unlawful in the delegation to the Commissioner of Public Welfare of the duty of enforcing this ordinance.
    3. The words “ public places,” however, as used in the ordinance, must be interpreted in the light of their association with the connecting word “ streets ” and do not mean or include homes, private offices and factories. The dismissal of the complaint, therefore, in this action to restrain defendants from interfering with plaintiffs and then' salesmen in canvassing “ homes, offices and factories ” was erroneous.
    4. An argument that in another section of the ordinance it is provided that labels shall be placed upon boxes or containers used by licensees in the public solicitation of funds “ in stores, factories, shops, offices, theatres, hotels, restaurants, railway stations, ferry houses or other public places,” and that this provision defines what is to be considered a public place within the meaning of the ordinance cannot be sustained. The words “ or other public places ” may be read in connection with the words immediately preceding them which name public places, rather than in connection with the more remote words “ factories, shops, offices.”

      Madison Products Co. v. Color, 215 App. Div. 700, reversed.
    (Argued April 7, 1926;
    decided May 11, 1926.)
    Appeal from a judgment, entered November 25, 1925, upon an order of the Appellate Division of the Supreme Court in the first judicial department, which reversed an order of Special Term granting a motion for an injunction pendente lite and denying a cross-motion to dismiss the complaint and directed á dismissal of the complaint.

      Stanley Garten for appellants.
    Assuming for the sake of argument merely that the board of aldermen had power to regulate the conduct of private charities by the enactment of this ordinance, the board would still not have authority to 'confer these regulatory powers upon the commissioner of public welfare or as he was formerly known, the commissioner of public charities. (Greater New York Athletic Club v. Wurster, 43 N. Y. Supp. 703; Phelps v. Mayor, etc., 112 N. Y. 216.) The ordinance does not apply to plaintiffs’ business. (Pugh v. State, 117 S. W. Rep. 817; People v. Cohen, 203 N. Y. Supp. 604.)

      George P. Nicholson, Corporation Counsel {John F. O'Brien, Elliot S. Benedict and Russell Lord Tarbox of counsel), for respondent.
    The ordinance is applicable to plaintiffs and to those charitable organizations for which, pursuant to contract, plaintiffs act as agents and to which they pay part of their profits. (Bishop on Statutory Crimes [2d ed.], § 298; 2 Bouvier’s Law Dictionary [Rawle], 792; People v. Bixby, 67 Barb. 221; People v. Soule, 142 N. Y. Supp. 876; People v. Whitman, 178 App. Div. 193; Hardice v. State, 37 S. W. Rep. 734; State v. Goldstein, 72 N. J. Law, 326; People v. Gertner, 124 Misc. Rep. 114.) The board of aldermen is authorized to select the commissioner of public welfare as the municipal agent to administer this ordinance. (Kramrath v. City of Albany, 121 N. Y. 575.)
   Hiscock, Ch. J.

Plaintiffs brought this action to restrain defendants from interfering with then- respective businesses through enforcement of an ordinance adopted in and for the city of New York. Instead of securing this relief their complaint has been dismissed as not stating a cause of action and, therefore, we are simply concerned with the sufficiency of its allegations.

The plaintiffs having separate businesses have united in bringing this action on the ground that they have a community of interests which justifies them in so doing and which proposition is not questioned by the defendant. The material allegations of the complaint which have precipitated the controversy are in substance as follows: The plaintiffs are respectively engaged in the sale of various toilet articles and then salesmen canvass homes, offices and factories in the City of New York and elsewhere ” for the purpose of selling such articles and as an inducement to such sales agree that a portion of the proceeds of the sales shall go to some designated charity. No money donation or financial assistance of any kind is solicited except where an order is given for goods and the portion of the purchase price designated as being for a given charity is duly accounted for to such charity by the plaintiff whose salesmen have collected it. The defendants threaten to interfere with said course of business and said solicitation on the ground that it is in violation of an ordinance adopted by the board of aldermen of the city of New York. Said ordinance is entitled Soliciting of Contributions in Public and in part reads as follows:

Sec. 196. General provisions.
“ No person, organization, society, association or corporation shall solicit money, donations, or financial assistance of any kind, upon the streets or in public places in the City of New York, except upon a license issued by the Commissioner of Public Welfare and under such regulations as hereinafter provided.
Sec. 197. Permission; how granted.
“ Application to solicit funds publicly for any cause whatever shall be addressed to the Commissioner of Public Welfare and such applications shall contain the following information * * *.
Sec. 198. Duties of the Commissioner.
It shall be the duty of the Commissioner of Public Welfare before granting any permission to solicit in public, to compel the applicant to file with him a sworn statement (showing monies collected during preceding year, etc.). uj
“ The Commissioner may establish such further regulations as he may deem necessary in carrying out the purposes and objects of this article.
“ Sec. 199. Duties of Licensees.
“ Licensees operating under this article of the,Code shall be compelled to label all collection boxes or containers used in the public solicitation of funds either by appeal in person or the placing of receptacles for the receipt of such public contributions in stores, factories, shops, offices, theatres, hotels, restaurants, railway stations, ferry houses, or other public places, with the name of the organization for which the permit is issued, and in such conspicuous manner as the Commissioner of Public Welfare may direct.”

It is not necessary to summarize the allegations of the complaint that defendants’ interference with the business of plaintiffs, if unlawful, will be so continuous and disastrous that the intervention of equity is required, for the defendants do not question the sufficiency of the allegations in this respect. I, therefore, come to the question whether on the allegations of the complaint defendants are entitled to interfere with plaintiffs’ business as they propose to and I shall dispose of various preliminary propositions made by one party or the other without much discussion, for the answer to each of them seems to be quite clear.

I think and shall assume for the purposes of this discussion that plaintiffs were engaged in soliciting money, donations or financial assistance ” within the meaning of the ordinance which has been referred to. In every attempt of a salesman to sell goods there was involved and included the promise that if the proposed purchaser would buy such goods part of the purchase price would be turned over to charities. While undoubtedly the primary purpose was to sell goods and the promise to pay to charities was an inducement to purchase the same, nevertheless the complete urgency was that persons should pay money of which part should be received as the purchase price of goods and of which part should be turned over to charitable organizations.

I shall assume without passing on that question that the board of aldermen of the city of New York had power to regulate -the solicitation of money, donations or financial assistance ” for charitable purposes (Greater New York Charter, secs. 43, 44, as amended by Laws of 1905, ch. 629; General City Law, sec. 20, subd. 13, as added by Laws of 1913, ch. 247). It may be argued that the possible annoyance and the frauds which may easily be perpetrated by unknown and unlicensed individuals soliciting funds for various purposes bring regulation well within the exercise of the police power which was conferred upon the board of aldermen.

I also think and assume that there was nothing unlawful in the delegation by the board of aldermen to the commissioner of public welfare of the duty of enforcing this ordinance. Such an ordinance could only be enforced by some official and I see no reason to doubt that the official named might be selected for this purpose. If it should be held as argued that subdivision E of section 197 and the concluding clause of section 198 conferred upon the commissioner too great and undefined powers in the way of acquiring information and establishing regulations in addition to those expressly enumerated in the ordinance it may be answered that these provisions may be eliminated without destroying the balance of the sections in which they are respectively included.

Thus clearing away these prehminary questions we come to the decisive one whether the ordinance which is relied on by defendants does authorize them to interfere with the acts of plaintiffs in attempting to sell goods for a consideration of which part shall be turned over to charitable organizations, in “ homes, factories and offices,” because it was injunction against interference with sales in those places which was granted by the Special Term and which has been denied by the Appellate Division on the ground that it was in violation of the ordinance. We interpret “ offices ” in this connection as meaning private and not public offices.

It is unnecessary to consider whether the board of aldermen might not have adopted an ordinance enforcing the necessity of a license upon all persons who were engaged in the professional, commercial or general solicitation of donations no matter where made, for the ordinance is not based upon any such idea. The foundation upon which rest its requirements is the character of the place where the solicitations are made. This is made apparent by various provisions. The ordinance is entitled “ Soliciting of Contributions in Public,” and the requirement for a license is enforcible against those making solicitations “ upon the streets or in public places.” It was doubtless the fundamental notion of the legislative body that conduct in public places was subject to regulation and also that indiscriminate solicitations in such places might be a public nuisance and danger. We do not overlook the fact that in one section of the ordinance reference is made to applications “ to solicit funds publicly ” and that it is argued that solicitations at a private house might be so conducted that they would be public. But we must interpret the words “ public ” and “ publicly ” in the light of the underlying provision of the ordinance which requires a license for solicitation only “ upon the streets or in public places ” so that we come to the consideration of the places in which solicitations are to be made.

Also we observe the argument of the respondents that in another section of the ordinance it is provided that labels shall be placed upon boxes or containers used by licensees in the public solicitation of funds “ in stores, factories, shops, offices, theatres, hotels, restaurants, railway stations, ferry houses or other public places,” and it is argued that this provision defines what is to be considered a public place within the meaning of the ordinance. We think that the words just quoted “ or other public places ” may be read in connection with the words immediately preceding them and which name public places, rather than in connection with the Inore remote words “ factories, shops, offices ” and that, therefore, this provision does not have the effect in defining public places which is claimed for it. And so, as it seems to me, we come in the last analysis to the question whether it can be said that a home, private office or factory is a public place within the meaning of the ordinance. The words “ public places ” used in the ordinance must be interpreted in the light of their association with the connecting word streets ” and thus interpreted we do not think that it was intended to mean or include homes, private offices and factories. The meaning of the words “streets” and “public places” naturally suggests those places in a city which are open to the general public and upon the use of which by the general public there is no limitation except that which may be required in the interest of safety and good order. We can take judicial notice that this is not the character of a home, private office or factory. These are under private control and are not open to the unrestricted entrance and use of the public. No one comes there except by the permission of the owner or proprietor and if he desires to close the door against all comers at any time he is at liberty to do so. These are not the characteristics of “ streets or public places ” and I do not think that such places are within the contemplation of the ordinance.

Therefore, the judgment of the Appellate Division should, be reversed, and the order of the Special Term denying the motion to dismiss the complaint affirmed, with costs in this court and in the Appellate Division.

Cardozo, Pound, McLaughlin, Crane and Lehman, JJ., concur; Andrews, J., not voting.

Judgment accordingly.


author: Crane, J.

text:
    Empire Trust Company, Respondent, v. Ruth N. Heinze et al., Appellants.
    Limitation of actions — sealed instruments — mortgage — foreclosure — something in nature of a seal or some mark to indicate a seal necessary to constitute document a sealed instrument — conclusion that chattel mortgage must in law be considered a sealed instrument erroneous in absence of seal or flourish, letter or mark intended to indicate a seal — transfer to third party of mortgagors’ interest in property — deficiency judgment against mortgagors, in action to foreclose brought more than six years thereafter, erroneous — judgment of foreclosure properly entered against transferee where within six years it authorized sale of portion of property and application of proceeds to payment of portion of indebtedness.
    1. To constitute a document a sealed instrument there must be something in the nature of a seal, some mark to indicate a seal affixed to the signatures. Intention to seal indicated by the recital “ signed, sealed and delivered ” or the words “ whereunto we have affixed our seals ” do not make a sealed instrument, if as a fact nothing is affixed to the signature which the law recognizes as a seal. (General Construction Law. § 44; Sladev. Sguier, 133 App. Div. 666, 668, criticised.)
    2. In an action to foreclose a chattel mortgage, therefore, where the court has found that it was the intention of the parties that the instrument should be sealed but that there is no flourish nor letters “ L. S.” or other mark intended to indicate a seal accompanying the name of either of the mortgagors, a conclusion that “ the chattel mortgage must be considered in law as a sealed instrument,” is erroneous.
    3. The chattel mortgage having been executed in 1910, and in 1911 the owner of the mortgaged property, one> of the mortgagors, having transferred all of her interest therein to a third party and no action to foreclose having been brought until 1922, a deficiency judgment against the mortgagors is barred by the six years’ Statute of Limitations, and even though in 1917 a portion of the property was sold, with knowledge of all parties and the proceeds applied to the indebtedness, in the absence of a finding that the sale and the application of the proceeds were made at the mortgagors’ request or by a duly authorized agent in their behalf, the payments did not stop the running of the statute or give it a new starting point as to the mortgagors, but, as against the transferee, which took possession of the property with full knowledge of the claims of the plaintiffs and which has within six years' admitted the plaintiffs’ claim and consented and authorized the application of the proceeds of a portion of the property to the indebtedness secured by the chattel mortgage, judgment of foreclosure was properly entered.

      Empire Trust 'Co. v. Heinze, 214 App. Div. 790, modified.
    (Argued March 3, 1926;
    decided May 11, 1926.)
    Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the second judicial department, entered July 8, 1925, unanimously affirming a judgment in favor of plaintiff entered upon a decision of the court on trial at Special Term.

      Thomas Ewing and Arthur P. Heinze for Ruth N. Heinze et al., appellants.
    The defendants Heinze are not estopped from contending that the chattel mortgage is not under seal. (Crowley v. Lewis, 239 N. Y. 264; Commack v. Slattery, 241 N. Y. 39; Moore v. Jones, 2 Ld. Raym. 1536, 1541; Taylor v. Glaser, 2 Serg. & Rawle, 502; Deming v. Bullitt, 1 Blackf. 241; Mitchell v. Parhan, Harper Law, 3; Vance v. Funk, 3 Ill. 263; Williams v. Young, 3 Ala. 145; Armstrong v. Pearce, 5 Harris, 351; Davis v. Judd, 6 Wis. 85; Chilton v. People, 66 Ill. 501; Boothby v. Giles, 68 Maine, 160; Maryland v. Humbird, 54 Md. 327; McPherson v. Reese, 58 Miss. 749; Willhelms v. Partoine, 72 Ga. 898.) The Statute of Limitations has run against the note and the mortgage. (Brooklyn Bank v. Barnaby, 197 N. Y. 210; Acker v. Acker, 81 N. Y. 142; Smith v. Ryan, 66 N. Y. 352; Butts v. Perkins, 41 Barb. 509; Wolford v. Cook, 71 Minn. 77; Ballantine & Sons v. Macken, 94 N. J. L. 502; Campbell v. Baldwin, 130 Mass. 199; Westinghouse v. Boyle, 126 Mich. 677.) The alleged purchase of one of the pictures by the Madison Company in 1917 was not a part payment of an indebtedness. (Adams v. Olin, 140 N. Y. 156; Crow v. Gleason, 141 N. Y. 489; Shafer v. Pratt, 79 App. Div. 447.)

      George Pfeil for Madison Real Property and Security Company, appellant.
    It was error on the part of the learned trial justice to hold that a chattel mortgage must be regarded as a sealed instrument, although no seal was attached, and that the defendants were estopped by the recitals contained therein to deny that the instrument is under seal. (Metropolitan Life Ins. Co. v. Bender, 124 N. Y. 47; Matter of Pirie, 198 N. Y. 209; Farley v. Scherno, 208 N. Y. 269; Ivy Courts Realty Co. v. Barker, 128 N. Y. Supp. 715.)

      William L. Woodward and Warren N. Gaffney for respondent.
    The defendants Heinze are estopped by its recitals, as matter of law, to deny that the chattel mortgage is a sealed instrument. (Metropolitan Life Ins. Co. v. Bender, 124 N. Y. 47; Atlantic Dock Co. v. Leavitt, 54 N. Y. 35; Rusling v. Union Pipe & Construction Co., 5 App. Div. 448; 158 N. Y. 737; Commack v. Slattery, 241 N. Y. 39; Matter of Pirie, 198 N. Y. 209; Coyne v. Town of Greenburgh, 110 Misc. Rep. 398; Slade v. Squier, 133 App. Div. 666.) The application of the proceeds of sales of paintings to the mortgage debt prevented the Statute of Limitations from beginning to run until October 10,1917. (Murdock v. Waterman, 145 N. Y. 55.)
   Crane, J.

On the 26th day of September, 1907, Ruth Noyes Heinze was indebted to the Empire Trust Company in the sum of $15,000 for which she gave her promissory note payable ten months after date, with interest at 6 per cent. On October 26, 1908, the note became due and payable and was protested for non-payment.

On the 29th of March, 1910, there being a balance of $12,000 due on the note, the defendant Ruth Noyes Heinze and her husband Arthur P. Heinze, executed and delivered to the plaintiff a mortgage upon fourteen very valuable oil paintings belonging to Mrs. Heinze. On the 26th day of October, 1922, this action was commenced to foreclose the chattel mortgage and to obtain a judgment against Ruth Noyes 'Heinze and Arthur P. Heinze for any deficiency that might arise after applying the proceeds of the pictures to the Heinze indebtedness.

Judgment has been given for the plaintiff as demanded, and the decision has been unanimously affirmed by the Appellate Division. The only question. which can be reviewed by us after the unanimous affirmance, is the application of the Statute of Limitations to the facts as found. If the chattel mortgage were under seal, it is conceded that this action was commenced in time. The findings are so worded that both parties find support for their contentions; one, that the instrument was a sealed instrument, the other that it was not a sealed instrument. The findings set forth the chattel mortgage in full, from which it appears that no seal was fixed to the signatures. While the trial justice finds that the mortgage was under seal, his further findings explain what he considers a sealed paper to be. He uses the expression more as a conclusion of law than as a statement of fact. He makes other findings in which he states that it was the intention of the parties that the instrument should be sealed, and that while there is no flourish nor letters “ L. S.” or other mark intended to indicate a seal accompanying the name of either of the mortgagors, yet he says in his conclusion of law, The chattel mortgage must be regarded in law as a sealed instrument.”

We conclude, therefore, that the findings of the trial justice show that this instrument was not under seal, but that the judge considered it as a sealed instrument in law because of the expressed intention of the parties. Such a conclusion does not follow from the facts. There must be something in the nature of a seal, some mark to indicate a seal affixed to the signatures to constitute a document a sealed instrument. The intention to seal under these circumstances, whether expressed or implied, does not make a seal. The recital “ signed, sealed and delivered,” etc., or the words, whereunto we have affixed our seals ” do not make a sealed instrument, if as a fact nothing is affixed to the signatures which the law recognizes as a seal. Section 44 of the General Construction Law (Cons. Laws, ch. 22) reads:

The private seal of a person, other than a corporation, to any instrument or writing shall consist of a wafer, wax or other similar adhesive substance affixed thereto, or of paper or other similar substance affixed thereto, by mucilage or other adhesive substance, or of the word ' seal,’ or the letters ‘ L. S.’ opposite the signature.”

Intention, therefore, cannot make a seal where this provision has not been complied with. (See Metropolitan Life Ins. Co. v. Bender, 124.N. Y. 47; Warren v. Lynch, 5 Johns, 239, 245; Boothbay v. Giles, 68 Me. 160; Maryland v. Humbird, 54 Md. 327.)

The reverse of this proposition does not hold true. The seal annexed to an ordinary obligation like a promissory note does not necessarily make it a sealed instrument, in the absence of any indication that such was the intention. (Matter of Pirie, 198 N. Y. 209, 215.) Fraud also may estop or prevent a person from pleading an unsealed instrument as in the Bender case, cited above. (Farley v. Scherno, 208 N. Y. 269.) The dictum in Slade v. Squier (133 App. Div. 666, 668) to the contrary is not to be followed.

Considering this chattel mortgage, therefore, as an unsealed instrument to which the six-year Statute of Limitations applies, the plaintiff’s claim against Ruth Noyes Heinze has been barred. In March, 1911, Mrs. Heinze transferred all her interest in the pictures under the chattel mortgage to the Madison Real Property and Security Company, which now holds them in its possession. Three of these pictures were sold in 1917 with a knowledge of all parties, that is, the plaintiff, the Madison Company, and Mr. and Mrs. Heinze, and the proceeds applied to Mrs. Heinze’s indebtedness. The year 1917 would be within six years prior to October 26, 1922, when this action was commenced. There is no finding, however, that the sale of these three pictures and the application of the proceeds were made at Mrs. Heinze’s request, or by any duly authorized agent in her behalf. The application, therefore, of these amounts to her indebtedness did not stop the running of the statute or give it a new starting point from the date of the payments. (Brooklyn Bank v. Barnaby, 197 N. Y. 210.) We, therefore, find that insofar as the judgment below authorizes a deficiency judgment against Ruth Noyes Heinze, and her husband, it is erroneous. No judgment can be entered against her on her indebtedness or on her note, as the claim is barred- by the six-year Statute of Limitations. This, however, does not hold true as to the Madison Real Property and Security Company. This company took possession of the pictures with full knowledge of the claims of the plaintiff. As against the Madison Company the plaintiff was entitled to possession of the pictures upon default in payment of the note secured by the chattel mortgage. The Madison Company within six years has admitted the plaintiff’s claim and has consented and authorized the application of the proceeds of one or more of the pictures to the indebtedness secured by the chattel mortgage. Therefore, as against this company the judgment below has been properly entered. (Murdock v. Waterman, 145 N. Y. 55.)

The judgments below should, therefore, be modified by striking therefrom the provision authorizing the entry of deficiency judgments against the defendants Ruth Noyes Heinze and Arthur P. Heinze, with costs to said appellants in all courts, and otherwise said judgment should be affirmed, with costs against the other appellants.

Hiscock, Ch. J., Cardozo, Pound, McLaughlin, Andrews and Lehman, JJ., concur.

Judgment accordingly.