author: Per Curiam.

text:
    In the Matter of Gulf Oil Corporation, Appellant, against Lazarus Joseph, as Comptroller of the City of New York, Respondent.
    Argued June 1,1954;
    decided July 14, 1954.

      Matthew 8. Gibson for appellant.
    I. The New York City gross receipts tax laws here in question impose a tax for the privilege of doing interstate business in New York City. The tax laws here impose a tax which is wholly independent of, and in addition to, all ordinary property taxes, corporate franchise taxes, and other license fees and taxes paid and payable by the petitioner. (Matter of Carter & Weekes Stevedoring Co. v. McGoldrick, 294 N. Y. 906, 330 U. S. 422; Galveston, Harrisburg & San Antonio Ry. Co. v. Texas, 210 U. S. 217.) II. Said municipal gross receipts tax laws, as applied herein to petitioner’s gross receipts derived from its sales of goods for shipment and delivery from New York City to customers of petitioner in other States and so shipped and delivered, are invalid because repugnant to the United States Constitution, in that, as here applied, they impose a prohibited local tax (1) upon gross receipts derived from, and (2) upon, and (3) for the privilege of engaging in, interstate commerce and thus constitute a prohibited and invalid regulation of interstate commerce. (Oklahoma v. Wells, Fargo & Co., 223 U. S. 298; Matter of Carter & Weekes Stevedoring Co. v. McGoldrick, 269 App. Div. 685; Puget Sound Co. v. Tax Comm., 302 U. S. 90; Memphis Steam Laundry v. Stone, 342 U. S. 389; United States Glue Co. v. Oak Creek, 247 U. S. 321; Freeman v. Hewit, 329 U. S. 249; Adams Mfg. Co. v. Storen, 304 U. S. 307; Reading R. R. Co. v. Pennsylvania, 15 Wall. [U. S.] 232; Interstate Oil Pipe Line Co. v. Stone, 337 U. S. 662; Ratterman v. Western Union Tel. Co., 127 U. S. 411; Matter of Olive Coat Co. v. McGoldrick, 287 N. Y. 769. III. These local privilege tax laws, as applied here to such interstate gross receipts, are invalid because if upheld they would constitute a potential discrimination against interstate commerce by subjecting gross receipts therefrom to the risk, merely because the goods are shipped across State lines, of multiple taxation by means of taxes imposed on these same receipts by the other States where the taxpayer also does business. Such potential discrimination is a regulation of interstate commerce in conflict with the exclusive and plenary power to regulate same granted to Congress by the United States Constitution. (Freeman v. Hewit, 329 U. S. 249; McGoldrick v. Berwind-White Co., 309 U. S. 33; Norton Co. v. Department of Revenue, 340 U. S. 534.) IV. The only proper ‘ ‘ apportionment ’ ’ of the petitioner’s gross receipts for the purposes of this local gross receipts tax is between those receipts derived from local intrastate sales and those derived from the kind of interstate sales involved in this proceeding. (Heyman v. Hays, 236 U. S. 178; Crew Levick Co. v. Pennsylvania, 245 U. S. 292; McLeod v. Dilworth Co., 322 U. S. 327; Nippert v. Richmond, 327 U. S. 416; Memphis Steam Laundry v. Stone, 342 U. S. 389.) V. The fact that this gross receipts privilege tax happens to be imposed by these laws at a lower rate upon gross receipts from interstate sales than upon gross receipts from intrastate sales is immaterial and does not prevent the tax laws here from being contrary to the commerce clause of the United States Constitution when applied to gross receipts from interstate sales. VI. These laws are invalid because they arbitrarily tax from one third to two thirds of these interstate gross receipts at the full rate, which is the same as taxing all of such interstate receipts at rates ranging from one third to two thirds of the full tax rate. Thus these laws necessarily reach out across State lines and subject to taxation gross receipts produced by activities occurring outside of the State of New York. In that aspect these local tax laws amount to violations of the “ due process ” clause of the Fourteenth Amendment of the Constitution of the United States because there are no political restraints that can be exercised outside of the State of New York in the States of origin or in the States of ultimate destination and consumption of such goods for the purpose of imposing, removing, or controlling in any way this New York City tax burden upon gross receipts derived from activities carried on in such other States. (McGoldrick v. Berwind-White Co., 309 U. S. 33; Butler Bros. v. McColgan, 315 U. S. 501; Hans Rees’ Sons v. North Carolina, 283 U. S. 135; Frick v. Pennsylvania, 268 U. S. 473.) VII. Under these laws, as applied, “ New York City manufacturers ” never have to pay this tax upon more than one third of their interstate sales receipts and are subject to no minimum taxable percentage of such receipts, whereas those not qualifying as “ New York City manufacturers ” are required to pay the full tax on from one third to two thirds of such interstate sales receipts, such discrimination rendering these laws repugnant to the commerce clause of the Federal Constitution and to the “ equal protection of the laws ’ ’ clause of section 1 of the Fourteenth Amendment of the United States Constitution. (Memphis Steam Laundry v. Stone, 342 U. S. 389.)

      Adrian P. Burke, Corporation Counsel (Bernard H. Sherris and Stanley Buchsbaum of counsel), for respondent.
    I. A tax for the privilege of doing business in New York City, imposed on a company engaged in making* both intrastate and interstate sales, may properly include in its measure a fairly apportioned part of the receipts from interstate sales. Here, in addition to local sales in vast amounts, the petitioner refined and stored within the city the oil products sold to out-of-State customers. (Matter of Olive Coat Co. v. McGoldrick, 261 App. Div. 1070, 287 N. Y. 769; American Mfg. Co. v. St. Louis, 250 U. S. 459; Hump Hairpin Co. v. Emmerson, 258 U. S. 290; Western Cartridge Co. v. Emmerson, 281 U. S. 511; International Shoe Co. v. Shartel, 279 U. S. 429; Main v. Grand Trunk Ry. Co., 142 U. S. 217; Western Live Stock v. Bureau, 303 U. S. 250; McGoldrick v. Berwind-White Co., 309 U. S. 33; Adams Mfg. Co. v. Storen, 304 U. S. 307; Gwin, White & Prince v. Henneford, 305 U. S. 434; Spector Motor Service v. O’Connor, 340 U. S. 602; Interstate Oil Pipe Line Co. v. Stone, 337 U. S. 662; Canton R. Co. v. Rogan, 340 U. S. 511; Western Maryland Ry. Co. v. Rogan, 340 H. S. 520.) II. The allocation formula results in a fair and reasonable allocation of the receipts from sales to out-of-State customers as a base for measuring what is attributable to the doing of business in New York City. (Illinois Central R. R. Co. v. Minnesota, 309 U. S. 157; Harvester Co. v. Evatt, 329 U. S. 416; Butler Bros. v. McColgan, 315 U. S. 501; Ott v. Mississippi Valley Barge Line, 336 U. S. 169; Ford Motor Co. v. Beauchamp, 308 U. S. 331.) III. The availability of an alternative allocation formula applicable to manufacturers does not result in any discrimination against the petitioner. The alternative allocation formula was equally available to the petitioner, but it failed to use that formula. (Underwood Typewriter Co. v. Chamberlain, 254 U. S. 113; Rapid Transit Corp. v. New York, 303 U. S. 573; Cook v. Marshall Co., 196 U. S. 261; Southwestern Oil Co. v. Texas, 217 U. S. 114; Brown-Forman Co. v. Kentucky, 217 U. S. 563; Singer Sewing Mach. Co. v. Brickell, 233 U. S. 304; Alaska Fish Co. v. Smith, 255 U. S. 44.)
   Per Curiam.

In this article 78 proceeding petitioner, a foreign corporation, which carried on substantial local intracity and intrastate sales activities as well as interstate business, seeks an annulment of the final determination of the comptroller of the City of New York, denying its application for a refund of gross receipts taxes paid during the years 1946 through 1949 for the privilege of doing business in the city (Administrative Code of City of New York, ch. 41, tit. RR; ch. 46, tit. B).

The Administrative Code of the City of New York provides in part that: ‘1 Where a receipt in its entirety cannot be subjected to the tax imposed by this title by reason of the provisions of the constitution of the United States * * * the comptroller shall establish rules and regulations and/or methods of allocation and evaluation to the end that only that part of such receipt which is properly attributable and allocable to the doing of business in the city shall be taxed hereunder.” (Administrative Code, § RR41-2.0, subd. b; § B46-2.0, subd. b.)

Pursuant to the authority granted, the comptroller has promulgated certain rules and an allocation formula for determining, in a case where a gross receipt cannot in its entirety be subjected to the tax by reason of the Constitution of the United States, what portion is attributable and allocable to the doing of business within the city of New York. The formula adopted (Comptroller’s Begulations, art. 211.-I) contains three factors:

(1) The property factor. (The percentage which the average value of real and tangible personal property within the city of New York bears to the total average value of real and personal property employed in business throughout the United States.)

(2) The wages and salaries factor. (The percentage which the wages, salaries and other personal service compensation paid in connection with business carried "on in New York City bears to the total wages, salaries and other personal service compensation paid in connection with business carried on throughout the United States.)

(3) The receipts factor. (The percentage which the sum of the wholly taxable receipts plus one third of the allocable receipts bears to the sum of the wholly taxable receipts plus the entire allocable receipts.)

(It Should be noted that under the formula this receipts factor can never work out to less than 33⅓%.)

The three percentages arrived at are then added together and divided by three to obtain the average of the three percentages. ‘ ‘ Where the resultant average of the three percentages exceeds 66⅔%, it shall be reduced to 66⅔% for the purpose of allocation. Where the resultant average of the three percentages is less than 33⅓% it shall he increased to 33⅓% for the purpose of allocation.’ ’ (Comptroller’s Regulations, art. 211.-I; emphasis supplied.)

In the present case for three of the four tax years involved the computations under the three-factor formula were 32.2%, 30.85% and 31.84%. Accordingly, those percentages were raised to meet the 33⅓% minimum.

The questions presented are: (1) whether in a case such as this where the taxpayer is engaged in both intrastate and interstate commerce the city may include in the measure of its gross receipts tax, imposed for the privilege of doing business in New York City, a share of the receipts from interstate sales which is properly attributable and allocable to the doing of business within the city; (2) whether the formula applied by the comptroller reasonably and lawfully measured the tax, and (3) whether the local law discriminates against petitioner in favor of those engaged solely in intrastate activities.

As to (1): In the case of Matter of Olive Coat Co. v. McGoldrick (261 App. Div. 1070, affd. without opinion 287 N. Y. 769), we answered that question in the affirmative, and the United States Supreme Court decisions since that time are to the same effect (see, e.g., Spector Motor Service v. O’Connor, 340 U. S. 602, 609-610; Interstate Oil Pipe Line Co. v. Stone, 337 U.S. 662, 667-669). "

As to (2): In the Olive Coat Co. case (supra), we held that each of the three factors contained in the formula certainly has some degree of relation to the play of local activity and investment in the acquisition of the total of allocable receipts and that in making an allocation rough approximation is all that is necessary (see Illinois Central R. R. Co. v. Minnesota, 309 U. S. 157, 161; Harvester Co. v. Evatt, 329 U. S. 416, 422-423). There, however, the fraction was 55.75% and we were not called to pass upon the prescribed minimnm of 33⅓%. Likewise, we did not there give consideration to the charge that the receipts factor was weighted in the city’s favor. Here, we reach those questions and we hold that the comptroller in using such minininm figures acted arbitrarily and out of harmony with the declared legislative purpose of taxing only that part of the interstate receipts which is properly attributable and allocable to the doing of business in the city. In setting up minimum figures no attempt at rough approximation or apportionment has been made by the comptroller.

As to (3): An unfair apportionment by one State could result in the risk of multiple taxation which would discriminate against petitioner as one engaged in interstate commerce. A fair apportionment eliminates that risk and here the matter must be remitted to the comptroller for the purpose of making-such an apportionment.

There is no merit in the argument that petitioner had its remedy in an alternative formula pursuant to article 210 of the Comptroller’s Regulations, for the availability of an alternative method of allocation, which may not be arbitrary, cannot save the formula which has in fact been used and which is arbitrary.

We pass upon no other question.

The order of the Appellate Division should be reversed and the matter remitted to the comptroller for further proceedings not inconsistent with this opinion.

Lewis, Ch. J., Conway, Desmond, Dye, Fuld, Froessel and Van Voorhis, JJ., concur.

Order reversed, etc.


source: Caselaw Access Project

author: Van Voorhis, J.

license: Public Domain

text:
    In the Matter of Merle E. Day, Appellant, against Joseph Mruk et al., as Members of the Board of Police Pensions of the City of Buffalo, Respondents.
    Argued May 27, 1954;
    decided July 14, 1954.

      Gilbert J. Pedersen for appellant.
    I. Petitioner is as of right entitled to retire on his application, having served upwards of twenty years in the police department of the City of Buffalo. (Lynch v. United States, 292 U. S. 571; Frisbie v. United States, 157 U. S. 160; United States v. Teller, 107 U. S. 64; People ex rel. Devery v. Coler, 173 N. Y. 103; Hoar v. City Yonkers, 295 N. Y. 274; Roddy v. Valentine, 268 N. Y. 228; Dodge v. Board of Educ., 302 U. S. 74; Pennie v. Reis, 132 U. S. 464; Matter of Friel v. McAdoo, 101 App. Div. 155, 181 N. Y. 558.) II. The Constitutional Amendment of 1938, effective July 1, 1940, merely stated the pre-1938 law insofar as petitioner was concerned. III. The intent of the Constitutional Convention in the establishment of a later effective date for section 7 of article V was not to give municipalities time to divest members who had vested rights. IV. A construction of the statutes involved opposed to petitioner’s interest should be avoided. (Matter of Rosenberg v. Board of Estimate of City of N. Y., 170 Misc. 800.) V. Petitioner had the right to rely on the 1930 status of the law. (Matter of Graef v. Department of Health of City of N. Y., 131 Misc. 258.) VI. Petitioner’s contractual rights to pension is not “ extra compensation ” within the meaning of section 10 of article IX of the Constitution of the State of New York. (Matter of Mahon v. Board of Educ. of City of N. Y., 68 App. Div. 154, 171 N. Y. 263; People ex rel. Roth v. Kane, 231 App. Div. 790, 256 N. Y. 684.)

      William B. Lawless, Jr., Corporation Counsel (Gerald J. Shields of counsel), for respondents.
    The City of Buffalo had jurisdiction to enact both the old and the new pension laws. Both were enacted and in force prior to July 1, 1940, the date referred to in section 7 of article V of the New York Constitution. The pension funds in both'laws were public funds and a member prior to retirement and prior to the above constitutional provision, not having fulfilled the statutory conditions when application for pension was made, had no vested interest therein. (Roddy v. Valentine, 268 N. Y. 228; People ex rel. Devery v. Coler, 173 N. Y. 103; Pennie v. Reis, 132 U. S. 464; Matter of Friel v. McAdoo, 101 App. Div. 155, 181 N. Y. 558; United States v. Teller, 107 U. S. 64; Dodge v. Board of Educ., 302 U. S. 74; Lynch v. United States, 292 U. S. 571; Frisbie v. United States, 157 U. S. 160.) II. Petitioner seeks in this proceeding to obtain a pension for service not in compliance with the existing provisions of the charter now in full force and effect. Such pension, if granted, would violate section 10 of article IX of the New York Constitution. (Matter of Mahon v. Board of Educ. of City of N. Y., 68 App. Div. 154, 171 N. Y. 263; People ex rel. Roth v. Kane, 231 App. Div. 790, 256 N. Y. 684.) III. The Buffalo police pension fund is a fund created wholly or largely out of public moneys and not a fund created substantially by contributions of its members. IV. Petitioner had no vested rights prior to the enactment of Local Law No. 8 of 1940, and upon the effective date petitioner’s membership in the police pension fund became a contractual relationship, the benefits of which shall not be diminished or impaired. Since the enactment of the constitutional amendment, the courts of this State have held that a contractual relationship exists between the members of police pension funds of the State or of a civil division thereof which may not be diminished or impaired. (White v. Hussey, 275 App. Div. 714; Hoar v. City of Yonkers, 295 N. Y. 274; Cashman v. Teachers’ Retirement Bd., 193 Misc. 57, 275 App. Div. 908, 301 N. Y. 501.)
   Van Voorhis, J.

This appeal concerns the status of petitioner as a member of the police pension fund of the City of Buffalo. He entered the police department as a patrolman on June 5, 1930, became a member of the police pension fund on that date making his regular contributions at the rate of 4% and 5% of his salary, and applied for retirement September 22,1952, effective October 1,1952. Thus it appeared that he served as patrolman for a period of twenty-two years. After a hearing before the board of police pensions, his application for a service pension was rejected on October 24,1952, and he is still serving as patrolman in the Buffalo Police Department.

At the time of his employment as patrolman in 1930, section 464 (subd. [2]) of the Charter of the City of Buffalo provided that members of the police department were entitled to pensions “ after twenty years of actual service in said department or a combined service of twenty years in the police and fire departments of the city.” Said provision was repealed by Local Law No. 8 adopted June 30, 1940, and in substitution therefor it was enacted that any member who had completed thirty years of actual service should be entitled to a pension. This thirty years was reduced to twenty-five years by Local Law No. 1 of 1945.

Other contingencies are covered in these provisions of the charter, which it is not necessary to specify inasmuch as they do not apply to petitioner’s situation. He had, for example, not served twenty years as patrolman at the time when section 464 was amended in 1940, nor is it a compulsory retirement.

Petitioner’s right to the relief which he has demanded depends upon whether the twenty-year clause as it existed in section 464 of the Buffalo City Charter in 1930 when he entered the police department as patrolman, constituted a vested interest in the nature of a contract right inuring to his benefit which could not constitutionally be altered in 1940 and 1945 when the length of time required in which to entitle him to a pension was increased from twenty to thirty and then reduced to twenty-five years. If he obtained a vested contractual right in the clause entitling him to a pension after twenty years of service, then, manifestly, the required length of service could not be extended after he had become a patrolman as a result of any amendment to the charter by local law or otherwise. Upon the other hand, if he was entitled to a mere expectancy, and if no contractual right to a pension could have matured prior to his actual retirement, then the increase of the length of service required to entitle him to a pension, from twenty to twenty-five years, was lawful, and he cannot retire until he shall have completed twenty-five years of service in the police department which he has not yet done.

Section 7 of article V was added to the Constitution of the State of New York in 1938. The amendment took effect except as otherwise provided on January 1, 1939 (art. XX, § 1). The effective date of section 7 of article Y was postponed for one and one-half years, however, until July 1, 1940, presumably to enable the State and its civil divisions to review their pension systems and to adjust, amend, modify or supplement the provisions of existing systems in the light of the fact that after such effective date such systems were no longer gratuitous, but by virtue of the new amendment became contracts and the members of pension systems thereby acquired vested interests which could not thereafter be diminished or impaired. Excerpts from the proceedings of the Convention appear to bear out this conclusion. The text of this amendment to the State Constitution is as follows: “ [Membership in retirement systems; benefits not tobe diminished or impaired.] § 7. After July 1,1940, membership in any pension or retirement system of the state or of a civil division thereof shall be a contractual relationship, the benefits of which shall not be diminished or impaired. ’ ’

Theretofore it had been held that members of pension and retirement systems generally had no vested interest therein •until the right to retirement matured. The leading case was Roddy v. Valentine (268 N. Y. 228, 231-232). It was there held, prior to this amendment to the Constitution, that a policeman obtained a vested right to his pension upon his retirement, but the court was careful to point out that prior thereto no such contractual right inhered in a member of the pension funds, stating:

“ Where the statutory scheme creates a fund wholly or largely out of public moneys, the interest of the member down to the point where there has been compliance with all precedent conditions and the award has been or as of right should have been made, can hardly be deemed contractual. There has been a suggestion that it is quasi-contr actual. (40 Harvard Law Review, 504, 505.) In Pennie v. Reis (132 U. S. 464, 471) it is called ‘ a mere expectancy created, by the law. ’ But whatever its legal nature may be, there seems to be no doubt that it is subject to change or even to revocation at the will of the Legislature. (People ex rel. Devery v. Coler, 173 N. Y. 103; Pennie v. Reis, supra; Matter of Friel, 101 App. Div. 155; affd., 181 N. Y. 558.)

“ Where, however, the statutory conditions for retirement existing when application is made have been met and the award of the pension or benefit has been made, or as of right should have been made (Matter of O’Brien v. New York State Teachers’ Retirement Board, 215 App. Div. 220; affd., 244 N. Y. 530), the interest becomes vested and takes on the attributes of a contract, which in the absence of statutory reservations, may not legally be diminished or otherwise adversely affected by subsequent legislation. (Pennie v. Reis, supra; People ex rel. Mulvey v. York, 41 App. Div. 419; Klench v. Board of Pension Fund Comrs., 79 Cal. App. 171, and cases therein cited.) ”

The same appears to have been held in Matter of Friel v. McAdoo (101 App. Div. 155, affd. 181 N. Y. 558), where the question arose concerning the pension rights of a member of the police force of the City of Brooklyn, after Brooklyn had become part of Greater New York. It was held that he had no contractual vested right in the Charter of the former City of Brooklyn, the opinion stating that “ The relator had no vested right in an act of the Legislature; the State, in the exercise of its sovereign authority, might have repealed absolutely the statute of 1888 under which he claims, and it might have abolished the office of policeman in the city of Brooklyn, or have destroyed absolutely the municipal corporation, and the relator would have had no legal right to complain.” The opinion continues by pointing out that instead of such a drastic change, the Legislature contented itself “ with what amounts to an amendment of subdivision 6 of section 42 of title 11 of chapter 583 of the Laws of 1888, and has given the police commissioner the power to retire the relator after serving twenty years, if he is at that time, fifty-five years of age ” (p. 158). Even so, the new act rendered such retirement on a pension discretionary at the election of the police commissioner. It was held that the relator Friel could not compel the police commissioner to retire him on a pension, inasmuch as the mandatory requirement to that effect at the election of the policeman had been changed by the Greater New York Charter so as to render such retirement in the discretion of the police commissioner.

This is also the holding of the Supreme Court of the United States (Pennie v. Reis, 132 U. S. 464; Dodge v. Board of Educ., 302 U. S. 74).

Petitioner-appellant has endeavored to draw a distinction between the rule outlined by this court in Roddy v. Valentine (supra) and the present case, by calling attention to part of the language which has been quoted above, viz., ‘ ‘ Where the statutory scheme creates a fund wholly or largely out of public moneys,” the interest of the member may be altered by statute and can hardly be deemed to be contractual. Appellant’s brief points out that, during the two years immediately prior to the change in the law in 1940, the members of the Buffalo police pension fund contributed approximately $100,000 and that the city’s contribution was approximately $200,000. Although the city has indicated that the amounts contributed by members during the years 1947-1952 are much less than one third, and ranged from 13.002% to 14.286%, petitioner counters by pointing out that since 1940 most of the members of the old police pension fund have transferred to the State Betirement System or their employment has begun since 1940 and they have gone into the State Betirement System at the inception of their membership in the police department. These statements of fact are probably true, and must be accepted as true for the purposes of this appeal from an order dismissing the petition as matter of law. We face the question on the assumption that prior to 1940 the members of the police pension fund paid about one third of its annual receipts.

The language in the opinion in Roddy v. Valentine (supra) on which petitioner-appellant relies, was dictum that the interest of the member is noncontractual “ Where the statutory scheme creates a fund wholly or largely out of public moneys ”. The object of the careful opinion written by Judge Crouch was to insure that the Bench and the Bar did not mistake the effect of the decision holding that a member had a contractual right from and after the time of his retirement to receive the pension or retirement allowance to which he was then entitled by statute, and to guard against confusion of that situation with the acquirement of a vested right in the statute as it existed at the time when the applicant became a member of the pension system but before his retirement from the service. So long as that broad distinction was pointed out, there was no need in the Roddy case to define its precise boundary inasmuch as it was clear that in any event Roddy fell on the other side of the line. He had a vested right since he had already retired. It was consequently not necessary to define precisely under what other circumstances a policeman or other public employee might obtain a contractual right if the particular statutory retirement plan differed from the customary and purported to grant such a right. It appears to have been the thought that if the member purchased a retirement allowance or annuity out of his own money in substantial part, situations might arise where the scheme or retirement plan was in such form that it could not later be altered by statute. Using this language which was inserted in the Roddy opinion as a precaution, appellant attempts to place a precise construction upon the words 6 ‘ wholly or largely out of public moneys ’ ’. It is contended that where a policeman or all of the policemen who are members of this fund have contributed at the rate of one third of the annual receipts, and the city has subscribed the remaining two thirds, it can no longer be considered that the fund is created largely ” out of public moneys. Of course, if these words be regarded as fur-, nishing an exact criterion, it might still be contended with force that the city was “ largely ” creating this fund by supplying two thirds as against one third privately contributed by the members. It seems, however, that this language was suitable as a caveat, but that where constitutional issues are involved it is not sufficiently definite to be used as formulating an exact rule.

• It might be necessary to consider more carefully the constitutional question of whether property of petitioner would have been taken without due process of law, if the refunding of his own contributions were regarded as being subject exclusively to the discretion either of the municipal authorities or of the Legislature. It is not necessary to meet that issue, however, inasmuch as section 462 of the Buffalo City Charter as amended provides that each member of the police pension fund shall continue to be a member until death, resignation from the department, or removal therefrom in the manner provided by law, ‘ ‘ or resignation from membership in said fund. ’ ’ Resignation is provided for more explicitly in what immediately follows in this section, which says “ Subject to the provisions of section four hundred sixty-nine, any member may resign from membership in said fund at his election. Such resignation shall be in writing, signed, acknowledged and filed with the board. Thereupon all deductions from his compensation theretofore paid into said pension fund shall be returned to him without interest and his right and the right of any dependent to benefits from said fund shall terminate.”

In other words, even if petitioner did, along with other members of the fund, pay a substantial sum in comparison to that contributed by the city, no unconstitutionality would appear to be involved in changing the provisions of the pension requirements prior to July 1,1940, provided that a means was supplied, as it has been, to refund to the member that which he had himself paid in. It bears analogy to the difference with which we are familiar in the State Retirement System, between the annuity and the pension which together go to make up the customary retirement allowance. There would be no unconstitutionality prior to July 1, 1940, in changing the pension rights, provided that the member were permitted to withdraw what he had paid in. That having been done in 1940 under section 462 of the Buffalo City Charter, which has been quoted above, it is not necessary to inquire whether under Roddy v. Valentine (supra) the fund was created “ wholly or largely out of public moneys ”. That language, it should be recalled, was dictum in any event, inserted for the reason that the court desired to leave no ambiguity concerning whether prior to the amendment effective July 1, 1940, the provisions of the city charter or pension plan invested a member with a contractual right prior to his application for retirement. Roddy v. Valentine held that such a right matured upon his retirement, and it was thought well to emphasize that no such contract right matured at the time he became a member of the system and prior to his application for retirement. That being the situation, and there being no doubt that Roddy fell on the other side of the line, there was no occasion to define precisely where the line of demarcation would fall. In other words, this court recognized that even prior to 1940 there might be exceptional situations where the language of a retirement plan was drawn in such a way as to create a contractual right, and it was conceived that that would be most likely to occur where the members individually had supplied most of the money. It was not necessary to consider in advance what all such situations might be, and it seems that here any constitutional right on the part of the member is protected by permitting him to withdraw his own funds under section 462 as amended in 1940. That left it open to the city council by local law to alter the pension rights, without infringing the member’s right to receive back his own contribution. Even if the language of Roddy v. Valentine were to be adopted as a precise criterion, it could hardly be held that the Buffalo police pension fund was created mainly out of private contributions, when, even according to petitioner’s -contention, at no time was more than one third contributed privately by the members.

It is recommended that the order appealed from should be affirmed.

Lewis, Ch. J., Conway, Desmond, Dye, Fuld and Froessel,, JJ., concur.

Order affirmed.


author: Desmond, J. Froessel, J.

text:
    In the Matter of the Arbitration between Helen Whiting, Inc., Appellant, and Trojan Textile Corp., Respondent.
    Argued Hay 21, 1954;
    decided July 14, 1954.

      Erwin Feldman and Leon H. Klingher for appellant.
    I. There are no written contracts containing arbitration clauses. (Matter of Airedale Worsted Mills [Bonnie Classics], 198 Misc. 259; Matter of Albrecht Chemical Co. [Anderson Trading Corp.], 298 N. Y. 437; Matter of Tanenbaum Textile Co. v. Schlanger, 287 N. Y. 400; More v. New York Bowery Fire Ins. Co., 130 N. Y. 537; Matter of Philip Export Corp. v. Leathertone, Inc., 275 App. Div. 102; Blossom v. Dodd, 43 N. Y. 264; Klar v. H. & M. Parcel Room, 270 App. Div. 538, 296 N. Y. 1044; Dery v. Blate, 209 App. Div. 467; Matter of Catz Amer. Sales Corp. v. Holleb & Co., 272 App. Div. 689; Matter of Gitelson & Sons [Weavetex Mills], 274 App. Div. 480.) II. The alleged contracts are unenforcible by reason of section 85 of the Personal Property Law. (Carter, Macy Co. v. Matthews, 220 App. Div. 679, 247 N. Y. 532; Matter of Airedale Worsted Mills [Bonnie Classics], 198 Misc. 259; Matter of Exeter Mfg. Co. v. Marrus, 254 App. Div. 496; Matter of Huxley, 294 N. Y. 146.)

      Chester A. Lessler for respondent.
    I. Findings of fact as determined by the Referee and sustained by the Appellate Division cannot be reversed by this court. (Dulberg v. Equitable Life Assur. Soc., 277 N. Y. 17; Angelos v. Mesevich, 289 N. Y. 498.) II. A contract to arbitrate future controversies need not be signed by the party to be charged, but need only be in writing. (Matter of Japan Cotton Trading Co. v. Farber, 233 App. Div. 354; Matter of Exeter Mfg. Co. v. Marrus, 254 App. Div. 496.) III. The written contracts were accepted by petitioner as drawn. IY. The Statute of Frauds was satisfied and the acceptance of written contracts acknowledged by the cancellation of July 21, 1953, and/or the acceptance of a portion of the goods. (Spiegel v. Lowenstein, 162 App. Div. 443.)
   Desmond, J.

Petitioner-appellant Helen Whiting, Inc., is a garment manufacturer with offices in New York City, while respondent Trojan Textile Corporation is a manufacturer of textiles with offices in the same city. On July 10, 1953, at petitioner’s office, there was a discussion between persons representing the two corporations which discussion, according to respondent Trojan, resulted in an oral agreement by Whiting to buy from Trojan a total of about 83,000 yards of three different kinds of goods, all at the one price of 52%^ per yard. Trojan claims that, on that same day, three written contracts were delivered by hand by Trojan to Whiting, that, three days later, on July 13, 1953, Trojan sent Whiting invoices for parts of each lot of goods, and that, on July 14, 1953, Whiting requested and got delivery of five yards against each of the three contracts, but that, on July 16, 1953, petitioner Whiting notified respondent Trojan, orally and by letter, that Whiting could use only one kind of the merchandise, and signed and sent back one only of the three contracts. Trojan, considering this as an effort by Whiting to cancel two of three contracts already made, refused to agree to it. On the back of each of the three original writings prepared by Trojan, there is a general arbitration clause, and Trojan demanded arbitration thereunder. Whiting, however, brought this proceeding to stay the arbitration, alleging that the negotiations between the parties never reached the stage of contract. Trojan, opposing the stay and praying for an order requiring Whiting to proceed to arbitration, took the position, in an affidavit, that there was, on July 10, 1953, a completed oral contract for all the three kinds of goods, that written forms of agreement covering the whole transaction were immediately sent to Whiting, that Whiting held them for several days without returning them, that there was delivery of part of the quantity specified in each contract pursuant to order by Whiting, that Whiting had no right to cancel any of the three contracts, and that, so far as arbitration is concerned, there was no necessity for a signing by Whiting of the three papers containing the arbitration clauses, and that Whiting has never objected to the inclusion of arbitration clauses but has merely insisted on its alleged right to take one of the lots of goods on one of the written documents, and reject the other two.

Since there was thus set up an issue “as to the making of the contract ” to arbitrate (Civ. Prac. Act, § 1450), Special Term made an order sending that issue to trial before Official Beferee Isidor Wasservogel. The trial was had before the Official Beferee, who held, as fact, that the parties had, on July 10, 1953, agreed on a purchase and sale of about 80,000 yards of these three kinds of cloth at 52½¢ per yard, that the agreement was, at the request of Whiting, that Trojan “ bill and hold ” all the goods, two of the quantities to be billed at once and the third to be billed on September 1, 1953, that, on the same day, Trojan sent Whiting three written confirmations, one for each lot, that Whiting held these three papers without signing or returning them until July 16th, and, in the meantime, ordered and got delivery of one five-yard piece against each of the three contracts, which three pieces Whiting accepted and has never returned, that these three deliveries, while small, satisfied the requirements of the Statute of Frauds (Personal Property Law, § 85), and that Whiting is bound to the arbitration agreement although it failed to sign two of the contracts. The Beferee made an order adjudging that the contracts contained arbitration clauses which are binding upon the parties, and Special Term, on the Beferee’s report, made an order directing petitioner to proceed to arbitration. On petitioner’s appeal to the Appellate Division, First Department, there was a three-to-two affirmance with no opinion by the majority but a brief dissent which expressed the view of two Justices that there was no enforcible written contract to arbitrate, no partial delivery, and that the Statute of Frauds applies. Petitioner then appealed to this court as of right.

Petitioner argues here that the alleged contracts were unenforcible under the Statute of Frauds because not signed by petitioner, that the three small deliveries did not constitute partial deliveries under the Statute of Frauds, and that there was no enforcible contract to arbitrate. In the light of these contentions, we will examine briefly the proofs before the Referee. One Ozdoba, sales manager of Trojan but produced as a witness by Whiting, testified that on July 10,1953, he called on Sterngold, president of Whiting, at the latter’s office, with the purpose of selling Sterngold some merchandise, that Ozdoba showed Sterngold a number of samples, and that Sterngold picked out three and said that he would take the whole lot, that is, all that Trojan had of these three kinds, if he could get a special price for the whole, and, as a result of bargaining, the parties then and there came to an agreement for the sale and purchase of the whole of the three kinds at 52%^ per yard for all, which, according to Ozdoba, was a large reduction in price. Ozdoba testified that, at Sterngold’s request, and since the goods were for next year’s manufacture and Stern-gold did not have storage space, Ozdoba agreed to ‘ ‘ bill * * * and hold ” the goods, that is, charge them to Whiting on dates agreed upon, but hold them until called for. The arrangement, according to Ozdoba, was that he would go back to his office and prepare and send to Sterngold written contracts on the goods. There was no discussion about arbitration. Later the same day, Ozdoba prepared the three contracts and sent them over to Sterngold’s office by delivery boy. The delivery boy confirmed the testimony of Sterngold that these contracts were not handed to Sterngold personally on Friday, July 10th. They did not reach Sterngold’s hands until the Monday following. On Tuesday, July 14th, according to Ozdoba, Sterngold telephoned and asked for samples of each of the three kinds of merchandise, that is, five-yard pieces of each, which were delivered on Wednesday, July 15th, Sterngold meanwhile holding the three contracts or proposed contracts. It is, - we think, significant that on July 13th, which was Monday and three days after the conversation at Whiting’s office, Trojan invoiced to Whiting substantial quantities of two of the three kinds of goods, apparently under the “ bill and hold ” arrangement, and that, on July 14th, four days after the contracts had been delivered to Whiting, Trojan billed Whiting for the three five-yard pieces, assigning those deliveries by number, to the three contracts in question. Sterngold, in his testimony, admitted that he read the face of each of these contracts but denied that he had read the reverse side on which appeared the arbitration clauses.

Sterngold, in his testimony on behalf of Whiting, confirmed that Ozdoba had come to Sterngold’s office to sell the merchandise, that they decided on three patterns and on a reduced price of 52½¢ per yard for the three lots, but Sterngold’s version was that the sale was subject to the approval of Sterngold’s designer and that sample cuts were to be sent to Sterngold who would agree finally to the sale if the designer approved. Of course, since the Referee and Special Term accepted Trojan’s version of this conversation, and the Appellate Division affirmed, we are bound by those holdings as to this issue of fact. Sterngold testified further that the sale on the part of Trojan was made contingent on price approval by someone at Trojan’s office, which Ozdoba denied and which is not important since, obviously, Trojan, by sending on the contract, approved the price. Thus, the only substantial dispute between the parties as to the oral arrangements of July 10th was as to whether the sale was contingent on Whiting’s later approval of samples — this was denied by Trojan, and the Referee found that there was no such condition of sale but that the three five-yard pieces were not samples for inspection but were partial deliveries against the contracts. We are bound by those findings.

As aforesaid, Whiting, on July 16th, six days after the written contracts had been sent and received, notified Trojan, orally and by letter, that it could not use two of the patterns, but was signing and sending to Trojan the signed contract for the other pattern, the letter expressing regret for any inconvenience. On July 20th, Trojan wrote a letter, in which it replied to Whiting’s letter of July 16th by saying that it (Trojan) would not accept the “cancellation” of the two patterns. That letter repeated Trojan’s version of the oral arrangements, stated that the low price was based on Whiting taking the whole lot, and demanded that Whiting honor the contracts and pay the invoices.

There are really two questions here: first, whether Whiting made any binding agreement at all to purchase the three lots, and, second, if the first question be answered in the affirmative, whether "Whiting bound itself to arbitrate in case of dispute. As to the first question, it seems clear that the facts as found and affirmed below establish, as of July 10, 1953, an agreement to buy and sell which was to be, and was, memorialized by written contracts sent out on the same day. That such was the arrangement is established not only by testimony as to the conversation at Whiting’s office but by the fact that Whiting held these contracts for six days without returning them and, meanwhile, received invoices for some of the goods and received actual delivery of the three five-yard pieces which Whiting never did return, and that, even when writing the letter of July 16th, Whiting did not really deny having made a deal for the three lots but expressed its regret that it could not use two of them. Perhaps, we do not have to decide on this appeal whether or not these contracts would be, in a suit at law, unenforcible. This is not such a suit at law but an arbitration proceeding and it may be that a failure to comply with the Statute of Frauds would not help Whiting. However, if we assume that the Statute of Frauds is applicable, its provisions are satisfied here, since the Referee held, on sufficient evidence, that the three five-yard pieces were not samples sent for approval but were “ part of the goods ” accepted and received by the buyer (Personal Property Law, § 85). Of course, they were very small deliveries but they were billed as deliveries under the contracts.

The other question is as to whether there is sufficient proof here to justify the findings below that the parties agreed on arbitration. We think that finding is amply justified by the showing that Whiting retained, for several days, the contracts containing arbitration clauses, and that Whiting never, at any time, objected to there being arbitration clauses and, in fact, signed one of the contracts containing an arbitration clause. From our own experience, we can almost take judicial notice that arbitration clauses are commonly used in the textile industry, and Sterngold testified that he was familiar with them. Cases like Matter of Albrecht Chem. Co. (Anderson Trading Corp.) (298 N. Y. 437) and Matter of Tanenbaum Textile Co. v. Schlanger (287 N. Y. 400) are not at all in point here since they involve situations where there was nothing to show an agreement to arbitrate but, rather, rejection of proposals for arbitration clauses. Here, the retention of the agreements containing arbitration clauses and the return, signed, of one of them was, we hold, sufficient evidence of an agreement on arbitration (see Matter of Japan Cotton Trading Co. v. Farber, 233 App. Div. 354, 355).

Appellant urges that arbitration cannot be ordered here since appellant never signed an agreement to arbitrate (except that it did sign one contract and Trojan refused to perform that contract without performance of the other two). Section 1449 of the Civil Practice Act is in rather odd form, as follows: "A contract to arbitrate a controversy thereafter arising between the parties must be in writing. Every submission to arbitrate an existing controversy is void, unless it or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith, or by his lawful agent.” The second sentence {supra) in plain language says that a submission to arbitration of an existing controversy is void unless in writing and signed. However, the first sentence, applicable here, says that a contract to arbitrate a controversy thereafter arising must be in writing, but nothing is said as to signature. In Matter of Gantt (Hurtado & Cia.) (297 N. Y. 433, 441) we avoided a flat statement that a contract to arbitrate future controversies need not be signed, but we did indicate that the writing required by that first sentence of section 1449 has the same meaning as the words A written provision ” in section 2 of title 9 of the United States Code which has no provision at all for signature. The language of section 1449 is plain enough in this connection and the only cases found in the appellate courts (Matter of Japan Cotton Trading Co. v. Farber, 233 App. Div. 354, supra, and Matter of Exeter Mfg. Co. v. Marrus, 254 App. Div. 496) seem to hold that the statute means what it says and that, while a contract to arbitrate future controversies must be in writing, it need not be signed so long as there is other proof that the parties actually agreed on it. This requirement of signatures for a submission of an existing dispute, but not for an agreement to arbitrate future controversies, stems from the common law. At common law, an agreement to submit future-arising disputes to arbitration was not enforcible at all (Hurst v. Litchfield, 39 N. Y. 377; President of Delaware & Hudson Canal Co. v. Pennsylvania Coal Co., 50 N. Y. 250) while an agreement to submit an existing controversy to arbitration was, at common law, enforcible even without a writing unless the underlying controversy was such that any agreement having to do with it was governed by the. Statute of Frauds (French v. New, 28 N. Y. 147).

We conclude that, on this record, there is no legal bar to the arbitration of this dispute.

The order should be affirmed, with costs.

Froessel, J.

(dissenting). I dissent and vote to reverse. There was no discussion about arbitration at the.time the so-called oral agreements were made. Therefore, the “ Acknowledgments of Orders ” containing an arbitration clause were not true confirmations or acknowledgments of the agreements but rather counteroffers adding a provision for arbitration. Only one of said counteroffers was accepted. I do not see how the signing of that one “ Acknowledgment of Order ” was an agreement to arbitrate two entirely separate and distinct agreements, nor how the retention of the latter for two or three days under the circumstances disclosed by this record authorizes us to hold that there was an agreement to arbitrate them.

Lewis, Oh. J., Conway, Dye and Fuld, JJ., concur with Desmond, J.; Froessel, J., dissents in memorandum in which Van Voorhis, J., concurs.

Order affirmed.


author: Desmond, J. Conwat, J.

text:
    Maurice Meyer, Jr., et al., Appellants, v. Albert M. Whisnant, Jr., Respondent, et al., Defendants.
    Argued April 22, 1954;
    decided July 14, 1954.

      Simon Brett for Maurice Meyer, Jr., appellant.
    I. The Appellate Division improperly exculpated Whisnant upon the alleged existence of an “ emergency ” without considering whether negligence on Whisnant’s part created the “ emergency ” in which he found himself. (Tapley v. Ross Theatre Corp., 275 N. Y. 144.) II. Plaintiffs offered affirmative evidence of negligence on Whisnant’s part in that, at the time of the collision, Whisnant was operating his car at an excessive rate of speed and in a careless and inattentive manner. (Mantione v. Picone, 273 App. Div. 1049; Martin v. Herzog, 228 N. Y. 164; Lee v. City Brewing Corp., 279 N. Y. 380; Weigand v. United Traction Co., 221 N. Y. 39; Sweet v. Perkins, 196 N. Y. 482; Rosenberg v. Schwartz, 260 N. Y. 162.)

      Alexander Freiser for Bussell Boyle, appellant.
    I. Defendant-respondent was negligent as a matter of law. (People v. Scanlon, 132 App. Div. 528.) II. Defendant-respondent, Whisnant, was negligent in management, operation, and control of his vehicle. III. Verdict of $50,000 for Boyle is not excessive. IV. The charge to the jury was" proper.

      John M. Aherne, Casper B. Ughetta and John J. Martin for respondent.
    I. The De Soto driven by Bien was an aggressor, which suddenly left its westbound lane, cut across and through the eastbound traffic, and “ looped ” directly back into the path of the Whisnant car, creating a sudden and dangerous emergency for all eastbound traffic, (living plaintiffs the benefit of every inference, there was no substantial evidence that Whisnant failed to act with reasonable care and promptness in the emergency created by Bien’s gross negligence. As to Whisnant it was an inevitable accident. (Duffield v. New York City Omnibus Corp., 259 App. Div. 647; Zwilling v. Harrison, 269 N. Y. 461; Maranta v. Wenzelberg, 241 App. Div. 420, 267 N. Y. 510; Payne v. City of New York, 277 N. Y. 393; Kawacz v. Delaware, L. & W. R. R. Co., 259 N. Y. 166, 287 U. S. 659; Platto v. Stier, 282 App. Div. 242; Woloszynowski v. hiew York Central

      R. R. Co., 254 N. Y. 206; Kumkumian v. City of New York, 305 N. Y. 167; Marra v. New York Central & H. R. R. R. Co., 139 App. Div. 707; Gross v. Gross, 169 F. 2d 199.) II. The Appellate Division properly ruled that the evidence was wholly insufficient in point of law to sustain a verdict. Whisnant’s motion for a directed verdict should have been granted. The Appellate Division properly dismissed the complaints. (Blum v. Fresh Grown Preserve Corp., 292 N. Y. 241; Matter of Case, 214 N. Y. 199; Berner v. Board of Educ., Union Free School Dist. No. 1, 286 N. Y. 174; Russ v. Russ, 263 N. Y. 625; Iannone v. Weber-McLoughlin Co., 186 App. Div. 594; Love v. Donald, 264 N. Y. 418.) III. The contention that Whisnant was violating paragraph (c) of subdivision 2 of section 56 of the Vehicle and Traffic Law was not presented, litigated or decided at Trial Term. The Appellate Division, accordingly, refused to consider it. It is not open to the plaintiffs in this court. In any event it is without merit. (Carlock v. Westchester Lighting Co., 268 N. Y. 345; Tedla v. Ellman, 280 N. Y. 124; Boronkay v. Robinson & Carpenter, 247 N. Y. 365.)
   Desmond, J.

The dismissal of the complaints as against defendant-respondent Whisnant should be affirmed. The sudden, unanticipated and unexplained dash of the Bien car, across the highway and into Whisnant’s path, made him the helpless victim of what was, beyond any dispute, an emergency with the creation of which Whisnant had nothing to do. Such violations as Whisnant may have been guilty of were no proof of negligent causation by him, since there was no possible logical connection between any of them, and the accident (see Brown v. Shyne, 242 N. Y. 176, 180; Tedla v. Ellman, 280 N. Y. 124; Hagadorn v. Socony-Vacuum Oil Co., 298 N. Y. 882; Goldblatt v. Tabacco, 299 N. Y. 663; Restatement, Torts, § 286).

The judgment should be affirmed, with costs.

Conwat, J.

(dissenting). At about 11:30 p.m., on an evening in late August, a group of men, using three automobiles, were on their way down through Long Island to stay overnight at a hotel prior to participating in a tuna fishing tournament on the following day. The first car was 100 to 200 yards in advance of the second and the second about seventy-five feet in advance of the third. The Sunrise Highway, on which they were traveling in an easterly direction, was a four-lane highway — two lanes going east and two lanes going west. The only defendant who appealed below, and who is respondent here, is Whisnant. the driver of the second car. The plaintiff Meyer was a passenger in that car. Whisnant was driving, according to a passenger in the third car, at the rate of about fifty miles per hour.

Just before the three cars reached Babylon Turnpike, an automobile driven by defendant Bien, Jr., and owned by his defendant father, was coming in the opposite or westerly direction, moved from the outside westerly lane across to the outside easterly lane, then came back into the inner easterly lane in which the three cars of the fishermen were moving and stopped there. The plaintiff Boyle was a passenger in that car.

The Bien automobile stopped just west of the intersection of Sunrise Highway and Babylon Turnpike. That intersection was controlled by a traffic light signal. So close to the west of that intersection was it that the Bien car stopped that Whisnant in his brief points out: “ The crossing [of the Bien car] was made near, if not at, an intersection controlled by a light where such crossings are normally made. There are several ‘ Diners ’ and Grills ’ on the southside of Sunrise Highway, just to the east of the point where the collision occurred. * * * As far as Whisnant was concerned the DeSoto [the Bien car] could have been making a normal turn to one of those establishments.”

When the Bien car was stopping, in the path of the three oncoming cars, the first car — the Felton car — turned out into the outer easterly lane and avoided it. The second car driven by Whisnant drove directly into it after it had stopped. The third car swerved to the right, pulled over and stopped, thus avoiding both cars.

Whisnant had been driving for one or two miles in the inside or left-hand easterly lane which, as he said, is the lane which you customarily use in passing other cars ”. While thus driving in that left-hand lane he could not recall whether he passed any cars. The right-hand traffic lane was not heavy. The Trial Justice properly charged, without exception: ‘ ‘ There is a law in our State applicable outside the City of New York which says that when you have more than one lane to travel in going in the same direction, the driver has a duty to stay in the right side lane except for purposes of passing.” To do otherwise is violative of the Vehicle and Traffic Law (§ 81, subd. 26) and is negligence. It would still be necessary for it to be a proximate cause of the accident. That was a jury question and the learned Trial Justice, without exception, left it as such to the jury. (See Callahan v. Terminal Cab Corp., 259 N. Y. 112; Cohen v. Goodman & Sons, 189 App. Div. 209.)

The reversal in the Appellate Division was upon the ground that the testimony offered by plaintiffs (the defendant Whisnant offered none but rested on the plaintiffs’ case) demonstrated that an emergency had been created unexpectedly and that thus the plaintiffs had failed to establish against Whisnant “ any actionable negligence proximately causing the accident ’ ’. That, however, was for the jury to determine and the learned Trial Justice properly left it to the jury, without exception, as follows : The law recognizes that an emergency situation is one in which quick thinking may be called for. Our laws and our rules of conduct are based upon ordinary human beings. We do not expect human beings to be superhuman. If we did, we would fail in that expectation. We do expect every human being, however, under the circumstances to be as good as the ordinary human being. He may not get away with being substandard, even if, in fact, he is in an emergency situation. On the other hand, we do not expect a man to act with the clearness, with the certainty, with the sureness that we would expect if he had time to think it over.

“ One of the important things for you to decide is did that Bien car come into view so rapidly as not to give an opportunity for cool and collected thought, or did it happen in a snap. You will recall the testimony varies on it. ’ ’ The jury no doubt found that Whisnant had not conducted himself as the average human being, in view of the fact that the first and third automobile drivers avoided striking the Bien car while he drove straight into it. At one point in his testimony Whisnant said he did not see the car he collided with before the collision.

Whether there was an emergency as far as Whisnant was concerned was for the jury. According to his friend Holthusen, Whisnant was going fifty miles an hour in the easterly left-hand or passing lane. He was approaching an intersection with Babylon Turnpike at that speed. That was an intersection controlled by a traffic light signal. In such a situation the proper speed was twenty miles an hour (Vehicle and Traffic Law, § 56, subd. 2). Whisnant had his “ head down ” and was driving and looking “ straight ahead ” with no regard for traffic or traffic signals or so a jury could properly find. He testified that he does not know whether he was approaching a traffic controlled intersection. He does not know whether there was a traffic controlled intersection there or not. He does not remember any traffic light, and does not remember seeing one. He was looking straight ahead. He testified that he did not think the roadway (Sunrise Highway) was lighted on both sides by light fixtures. He said that the last thing he remembered before the collision was when he was between ten and twenty yards from the point of collision and that was where he applied his brakes. That was when he saw the lights of the Bien car. That was less than one second before the collision, for an automobile moving at fifty miles an hour travels about seventy-five feet per second.

Even if there had been an emergency and Whisnant had taken action based upon it, that would not help him, for a driver of an automobile must exercise care to avoid reaching a point from which he is unable to extricate himself without colliding with another vehicle. If he fails in that, the greatest vigilance on his part when the danger arises will not avail him (Huddy’s Cyclopedia of Automobile Law [9th ed.], Vol. 3-4, § 26; Altenkirch v. National Biscuit Co., 127 App. Div. 307). Thus in Rivisto v. Heller (253 App. Div. 351) it was held to be reversible error to charge a jury that if they found defendant did all that a reasonably prudent person could do to avoid the accident when she first saw the plaintiff, the verdict must be for the defendant because It eliminated from the jury’s consideration her prior alleged acts of negligence, which placed her in a position where the accident became inevitable ” (p. 352; emphasis supplied). (See, also, Hood v. Stowe, 191 App. Div. 614.) In Huddy’s Cyclopedia of Automobile Law (supra, § 26, p. 57) it is put as follows: u * * * One cannot escape liability for the negligent operation of an automobile on the ground that he acted in an emergency, when it appears that the emergency was created by his own negligence; or if, by the exercise of reasonable care, he might have avoided the injury notwithstanding the emergency.”

The principle is phrased as follows in American Jurisprudence (Yol. 5, Automobiles, § 171): “ Where the situation of peril arises because of the driver’s own negligence, the emergency rule cannot be invoked in his behalf. * * * The sudden emergency doctrine is not an exception to the general rule; the question is whether the defendant acted as an ordinarily prudent and careful person would have done under the same circumstances, and the emergency is one of the circumstances contemplated by the rule.”

“ In view of the dismissal we must take the facts in a light most favorable to the plaintiff and, in determining whether the facts proved constitute a cause of action, give him the benefit of every favorable inference which may reasonably be drawn. (Faber v. City of New York, 213 N. Y. 411, 414; Shuman v. Hall, 246 N. Y. 51, 57.) ” (Osipoff v. City of New York, 286 N. Y. 422, 425.) Clearly then, there was a prima facie case of negligence established here as a matter of law, with no defense interposed. The jury under a careful charge found that the negligence was the proximate cause of the serious injuries sustained. The plaintiffs under our State Constitution were entitled to have their cases passed upon by a jury in view of the fact that they had established a prima facie case (Imbrey v. Prudential Ins. Co., 286 N. Y. 434).

The judgment should be reversed and a new trial ordered, with costs to abide the event.

Dye, Ftjld and Yan Yoórhis, JJ., concur with Desmond, J. ; Conway, J., dissents in opinion in which Lewis, Ch. J., and Froessel, J., concur.

Judgment affirmed.


author: Fuld, J. Dye and Van Voorhis, JJ.

text:
    In the Matter of Albert W. Schneider, as District Attorney of Herkimer County, Appellant, against Felix J. Aulisi, Individually and as a Justice of the Supreme Court, et al., Respondents.
    Argued May 28, 1954;
    decided July 14, 1954.

      Albert W. Schneider, District Attorney, appellant in person.
    I. The moving affidavits before Mr. Justice Aulisi were insufficient as a matter of law to confer any jurisdiction upon him to entertain the motion to inspect the minutes of the Grand Jury or to assume to exercise any discretion thereunder. (People v. Sweeney, 213 N. Y. 37; People v. May, 158 Misc. 488; People v. Katzenstein, 70 Misc. 185; People v. Hillman, 246 N. Y. 467; People v. Hetenyi, 301 N. Y. 757; People v. Turkett, 193 Misc. 799; People v. Licenziata, 199 App. Div. 106; People v. Dally, 174 Misc. 830; People v. McCann, 166 Misc. 269; People v. Elite Distributing Co., 76 Misc. 577; People v. Berger, 197 Misc. 915.) II. Mr. Justice Aulisi acted without or in excess of his jurisdiction in entertaining the motion to dismiss the indictment after it had been transferred to the Herkimer County Court for disposition. (People ex rel. Hirschberg v. Supreme Court, 269 N. Y. 392.) III. Mr. Justice Aulisi acted without or in excess of his jurisdiction in ordering a stay of the trial of the indictment against the defendants then pending in the Herkimer County Court. (People v. Carfano, 207 App. Div. 866, 238 N. Y. 549; Edwards v. Shreve, 83 App. Div. 165.) IV. A motion to inspect the minutes of the Grand Jury of Herkimer County and to dismiss an indictment found by a Herkimer County Supreme Court Grand Jury can be brought only within the judicial district wherein the indictment was found. (People ex rel. New York Central & H. R. R. R. Co. v. Priest, 169 N. Y. 432; People v. Hetenyi, 277 App. Div. 310, 301 N. Y. 757; People ex rel. Hirschberg v. Orange Co. Court, 271 N. Y. 151; People v. Hovey, 92 N. Y. 554; People ex rel. Jerome v. Court of General Sessions, 185 N. Y. 504; Matter of Murphy v. Supreme Court, 294 N. Y. 440.) V. An order of prohibition was the proper remedy. (Matter of Culver Contr. Corp. v. Humphrey, 269 N. Y. 26.)

      John T. Be Graff and Harold E. Blodgett, respondent in person, for John A. Nieoll and another, respondents.
    I. The Special Term of the Supreme Court in Montgomery County had jurisdiction to entertain the motion to inspect the Grand Jury minutes. (People ex rel. Hirschberg v. Supreme Court, 269 N. Y. 392; People ex rel. New York Central & H. R. R. R. Co. v. Priest, 169 N. Y. 432; Matter of Steinway, 159 N. Y. 250; Matter of Murphy v. Supreme Court, 294 N. Y. 440; People ex rel. Mayor of City of N. Y. v. Nichols, 79 N. Y. 582; People v. Harris, 182 Misc. 787, 294 N. Y. 424; Bell v. Niewahner, 54 App. Div. 530; Mussen v. Ausable Granite Works, 63 Hun 367; Getman v. Mayor of City of N. Y., 66 Hun 236; People ex rel. Newton v. Special Term, Part I, 193 App. Div. 463; People v. Green, 201 N. Y. 172; People v. Sweeney, 213 N. Y. 37; Matter of Lyons v. Goldstein, 290 N. Y. 19; Matter of Lyons v. Ward, 272 App. Div. 120, 270 N. Y. 617.) II. The application for an inspection of the minutes was made in good faith. (People v. Marendi, 213 N. Y. 600; People v. Huter, 184 N. Y. 237; People v. Spohr, 206 N. Y. 516; People v. Grieco, 266 N. Y. 48; People v. Vollmer, 299 N. Y. 347; People v. Becker, 215 N. Y. 126; People v. Falletto, 202 N. Y. 494; People v. Sarzano, 212 N. Y. 231; People v. Allen, 300 N. Y. 222; People v. Hetenyi, 277 App. Div. 310, 301 N. Y. 757.)

      . The Appellate Division in Newton (supra, 193 App. Div. 463) was discussing a case where a motion, directed at an indictment found at an Extraordinary Term of the Supreme Court, was actually made at a Special Term of that court in the very same county. Even that practice is no longer permissible, for, in 1953, the legislature amended section 149 of the Judiciary Law to provide expressly that “ A motion involving a matter pending before ” an extraordinary term may be made only at such term or at a term of the Appellate Division in the department in which the extraordinary term is being held. (L. 1953, eh. 890.)

   Fuld, J.

This appeal, here by our leave, poses questions concerning the jurisdiction of a justice of the Supreme Court to entertain a motion for inspection of grand jury minutes and for dismissal of the indictment, on the basis of such minutes, after transfer of the indictment for trial from the Supreme Court to a County Court.

John A. Nieoll and Irvan A. Fredericks were indicted by the grand jury of Herkimer County, drawn for a term of the Supreme Court, on charges of manslaughter and assault. By order of the Supreme Court, the indictment was transferred to the County Court of Herkimer County. The defendants pleaded ‘ not guilty ’ ’ in that court, and a date was fixed for trial.

While the action was pending in the Herkimer County Court, the defendants, charging that the indictment rested on illegal and insufficient evidence, moved, before Justice Aulisi in the Supreme Court in Montgomery County, for an inspection of the grand jury minutes, a dismissal of the indictment following such inspection and a stay of the trial in the County Court pending determination of the motion. Herkimer County is situated within the Fifth Judicial District; Montgomery County, adjoining Herkimer, is within the Fourth Judicial District. The district attorney of Herkimer County, appearing in opposition, challenged the jurisdiction of the Supreme Court justice to entertain the motion. The latter overruled the objection and, after hearing argument, directed that a copy of the grand jury minutes be furnished for his examination and stayed the trial pending decision of the motion.

The district attorney thereupon instituted this proceeding in the Appellate Division of the Fourth Department, pursuant to article 78 of the Civil Practice Act, for an order in the nature of prohibition directed to Justice Aulisi as well as to the defendants and their attorney. The application was unanimously denied by the Appellate Division.

That transfer to the County Court of an indictment found in the Supreme Court does not deprive that tribunal of jurisdiction to permit an inspection of the grand jury minutes is established by our decision in People ex rel. Hirschberg v. Supreme Ct. (269 N. Y. 392). As we held in that case, the order removing the indictment to the County Court ‘‘ did not remove to the County Court the record and minutes of the proceedings of the grand jury previously completed in the Supreme Court ”, and the Supreme Court “ remains in possession and control of the records of proceedings held there ” (269 N. Y., at pp. 395, 396). In point of fact, the County Court was entirely without power in such cases to entertain motions for inspection, until the legislature, some time after the Hirschberg decision, granted it concurrent jurisdiction, with the Supreme Court, to hear them. (Code Crim. Pro., § 39, subd. 2-a, as added by L. 1939, ch. 173.)

The issue which we are now called upon to decide, therefore, is whether a motion for inspection addressed to the Supreme Court may be made only at a term of that court in the same county in which the indictment was found. Pointing to language in the opinion in the Hirschberg case (supra, 269 N. Y. 392, 396), that the motion for inspection is properly to be made in the court in which the proceedings were had and the testimony was taken ”, the district attorney urges that only the Supreme Court in the county or, at least, in the same judicial district in which the indictment was returned, meets that qualification.

Such a contention ignores the fact that the Supreme Court is a single great tribunal of general state-wide jurisdiction, rather than an aggregation of separate courts sitting in the several counties or judicial districts of the state. There is,” we have stated, but one Supreme Court in the state and the jurisdiction of its justices is coextensive with the state." (People ex rel. New York Central & H. R. R. R. Co. v. Priest, 169 N. Y. 432, 435; see, also, Mussen v. Ausable Granite Works, 63 Hun 367; Matter of Avon Dairies v. Du Mond, 280 App. Div. 116, 119.) That unity has been preserved throughout the court’s history, as local tribunals of civil and of criminal jurisdiction have been merged with it. (See People ex rel. Newton v. Special Term, Part 1, 193 App. Div. 463, 469; see, also, 2 Lincoln, Constitutional History of New York, p. 151; 3 id., p. 352.) Justices of the Supreme Court are, indeed, specifically authorized, with certain exceptions not here pertinent, to perform the duties of their office and to hold court in any county. (N. Y. Const., art. VI, § 1; see People v. Herrmann, 149 N. Y. 190.)

The legislature has in certain situations confined and limited the exercise of jurisdiction by the Supreme Court in criminal matters to particular terms, counties or judicial districts. Limitations of this kind thus regulate the term at which a motion involving a matter pending before an extraordinary term may be made (Judiciary Law, § 149, as amd. by L. 1953, ch. 890); the county in which an indictment is to be tried (Code Crim. Pro., § 355); and the term at which a motion may be made by a defendant for removal of the action from.the County Court to the Supreme Court or from the Supreme Court or the County Court to a term of the Supreme Court in another county (Code Crim. Pro., §§ 344, 346). There is, however, no similar restriction, either in constitution or statute, governing motions for inspection of grand jury minutes. The jurisdiction of the Supreme Court to hear and determine such an application, though in a county and judicial district other than that in which the indictment was found, may not, therefore, be doubted.

Recognition of the court’s jurisdiction, however, is not to be taken as sanctioning the practice of moving for an inspection before a justice of the Supreme Court in a county other than that in which the indictment is pending. Such a practice, if generally adopted —as another court declared in a somewhat comparable situation (People ex rel. Newton v. Special Term, Part 1, supra, 193 App. Div. 463, 472) — “would tend to bring the administration of justice into disrepute and would seriously interfere with the orderly administration of judicial work”. But, as indicated, there is no want or lack of jurisdiction, and whether such jurisdiction shall be exercised in any particular case is a matter committed to the sound discretion of the court to which the motion is addressed.

We do not consider whether remedy in the nature of prohibition would be available upon a showing of abuse of discretion in entertaining such a motion. We simply observe that the Appellate Division, by analogy to the practice in civil cases (Rules Civ. Prac., rule 63, subd. 1), concluded that there was no such abuse on the part of Justice Aulisi, since the motion was made, though in a different judicial district, in a county adjoining that in which the indictment is pending. We find no basis for interfering with that position.

Nor is there basis for the contention — advanced by the district attorney as a further jurisdictional objection — that the affidavits, submitted in support of the motion for inspection, do not set forth sufficient facts to entitle the defendants to that relief. The Supreme Court, having jurisdiction of the parties and of the subject matter of the motion, was likewise authorized to pass upon the sufficiency of the moving papers. This objection relates to the merits of the application, rather than to jurisdiction, and cannot serve as the predicate for an order in the nature of prohibition. (See Linton v. Perry Knitting Co., 295 N. Y. 14, 17; People ex rel. Martin v. Brady, 168 App. Div. 108.)

As already noted, the order, by which the motion was brought on, also calls upon the district attorney to show cause why said indictment should not be dismissed following such inspection ”. Consequently, it is necessary to consider whether the entertaining of that branch of the defendants’ motion would involve the Supreme Court justice in action in excess of the jurisdiction vested in him.

While the motion for inspection is but a preliminary step in aid of a motion to dismiss an indictment upon the ground that it is based upon illegal or insufficient evidence, there is a marked distinction between the two motions insofar as jurisdiction is concerned. After an indictment has been removed to the County Court, we wrote in the Hirschberg case (supra, 269 N. Y. 392, 395), that court acquired jurisdiction to 6 try and determine the indictment ’ ”, and, "we added, That jurisdiction is complete and includes motions directed to the sufficiency or validity of the indictment and other motions preliminary to the trial.” Although the Supreme Court remains in possession and control of the minutes of the grand jury, its power is confined to determining whether it will permit an inspection of them and does not extend to “ motions directed to the sufficiency or validity of the indictment ” (269 N. Y., at p. 395). In short, after removal, jurisdiction of all proceedings connected with the disposition of the indictment, whether before or after trial, is vested exclusively in the County Court. (See Code Crim. Pro., § 39, subd. 2; People ex rel. Hirschberg v. Supreme Ct., supra, 269 N. Y. 392, 396; see, also, Real v. People, 42 N. Y. 270, 278-279.)

To the plaint that such a decision compels proceedings in two separate tribunals — in the Supreme Court for inspection and in the County Court for dismissal — we need but say that such a procedure is not compelled, the choice resting solely with the defendant. As the applicable provision of statute now reads (Code Crim. Pro., § 39, subd. 2-a), a defendant may apply directly to the County Court for the desired inspection of the minutes, with the consequence that both inspection and dismissal may be sought in that court.

The only remaining problem concerns the power of the Supreme Court to stay the trial of the action in the County Court, pending determination of the motion for inspection. While there is no statutory grant of power to issue such a stay, as there is in other situations (e.g., Code Crim. Pro., § 347), the Supreme Court has inherent power in a proper case to restrain the parties before it from taking action which threatens to defeat or impair its exercise of jurisdiction. (See Colson v. Pelgram, 259 N. Y. 370, 375-376; Cushman v. Leland, 93 N. Y. 652, 653-654; Erie Ry. Co. v. Ramsey, 45 N. Y. 637, 648-649; cf. Continental Bank v. Rock Island Ry., 294 U. S. 648, 675-676.) In view of the imminence of trial, the motion for inspection would have been “ valueless without a stay.” (See, e.g., People v. McLaughlin, 150 N. Y. 365, 376.) The stay granted below was, therefore, not beyond the court’s power to grant.

The order of the Appellate Division should be modified by granting so much of the petition as requests an order in the nature of prohibition with respect to that branch of the motion pending before the Supreme Court which seeks a dismissal of the indictment, and, as so modified, affirmed.

Dye and Van Voorhis, JJ.

(dissenting). We can all agree that removal of the case for trial from the Supreme Court to the Herkimer County Court did not divest the Supreme Court of its jurisdiction over the Grand Jury minutes (People ex rel. Hirschberg v. Supreme Ct., 269 N. Y. 392; People v. Green, 201 N. Y. 172; Code Crim. Pro., § 39, subd. 2-a) and that Justice Aulisi had jurisdiction to entertain the motion (Rules Civ. Prac., rule 63, par. 4). In so doing, Justice Aulisi acted within the scope of his jurisdiction and not in excess thereof by overruling the People’s objection thereto and ordering that a copy of the Grand Jury minutes be furnished the court “ for its examination and that the trial of the defendants * * * be stayed until this Court shall determine whether said minutes shall be furnished said defendants ”.

The Appellate Division in denying this application for an order of prohibition found that Justice Aulisi in the exercise of discretion could inspect such minutes (Code Crim. Pro., § 952-t; cf. People v. Sweeney, 213 N. Y. 37) and that such discretion had not been abused when he stayed the trial to permit inspection, for, as they said, “ Otherwise the application would have been of no avail ” (Matter of Lyons v. Ward, 272 App. Div. 120, affd. sub nom. Matter of Lyons v. Fisher, 297 N. Y. 617). In so holding, the court below declined to assume that Justice Aulisi would direct that the minutes be furnished to defendants and that the indictment would be dismissed. Prohibition, as we know, is an extraordinary remedy and should only be invoked when it is clearly demonstrated that the court will exceed its jurisdiction. There is nothing in this record indicating that Justice Aulisi proposes to exceed his jurisdiction. As a matter of fact, the contrary appears. Justice Aulisi did not entertain a motion to dismiss the indictment as the People would have us believe. His order dealt only with the right of the Supreme Court to inspect and to stay the trial pending such inspection. Accordingly, I would confine our review to a consideration of jurisdiction vis-a-vis the order appealed from (Matter of Hogan v. Court of Special Sessions, 296 N. Y. 1) which depended in the first instance on the exercise of discretion (People v. Sweeney, supra). When so viewed, the order denying the District Attorney's application for an order of prohibition should be affirmed.

Lewis, Ch. J., Conway, Desmond and Fboessel, JJ., concur with Fuld, J.; Dye and Van Vooehis, JJ., dissent in an opinion.

Ordered accordingly.