author: Conway, J.

text:
    Stanley Sweet, an Infant, by Bessie E. Sweet, His Guardian ad Litem, Appellant, v. Board of Education of Union Free School District No. 9 of the Town of Lenox, Respondent.
    Argued January 4, 1943;
    decided March 4, 1943.

      Nelson L. Neidhardt and Clarence E. Conley for appellant.

      William, F. Santry for respondent.
   Conway, J.

This is an action to recover damages for personal injuries sustained by an infant schoolboy when he fell through a skylight in the defendant’s school building while he was engaged in placing a cover over the skylight. Defendant moved under rules 106 and 107 of Buies of Civil Practice for an order dismissing the complaint on the ground that plaintiff’s only remedy, as an employee of defendant, was under Workmen’s Compensation Law and thus the court had no jurisdiction of the subject-matter of the action.

Plaintiff was one of several students in Canastota High School who had been approved as eligible for part-time employment under the National Youth Administration program. That was a program originally initiated under Executive Order of the President of the United States, No. 7086 of June 26, 1935, and made a part of the Works Progress Administration.

The plaintiff was to receive wages at the rate of thirty cents an hour. On January 31,1941, he reported for work at 7 a. h. and worked until the time of the accident. At about 9 a. m. on that day, one of the teachers requested the janitor to place a cloth over the skylight of the auditorium. This the janitor reported that he was unable to do. Thereafter the principal of the school, one McLean, directed the janitor to have the cloth placed over the skylight by the infant plaintiff and another student who had also been approved as eligible for part-time employment under the N. Y. A. program. While plaintiff was proceeding across the skylight it gave way beneath him and he fell to the floor of the auditorium fifteen feet below.

The N. Y. A. program is devised to providé part-time employment for needy students in order that they may continue their education. Under the program the State Youth Administrator is authorized to appoint an official in each participating school to supervise the program. . Such institutional appointee is notified of the action of the administrator by a ‘ letter of appointment ” and he must thereupon take an oath of allegiance. He is required also to sign a signature card in which he is' designated as “ official representative authorized to sign time report transmittal. ’’ A plan of work is prepared by the school and approved by N. Y. A. Any basic deviations from the work plan must be approved by N. Y. A. The maximum hours of work for a student are four hours per day on school days and seven hours per day on non-school days. The monthly pay of a high school student is a maximum of six dollars and a minimum of three dollars based on the rate of pay prevailing in the community for the same type of work.

In this instance the principal of the high scho.ol was the local representative of N. Y. A. and the person in charge of student work. The principal assigned the plaintiff to the janitor of the school, who was an employee of the defendant, and instructed him to perform work under the janitor’s direction. Prior to his injury, plaintiff had worked on January 30th and 31st for three and one-half hours. The principal reported that fact to N. Y. A. and thereafter a check was drawn by the Treasurer of the United States for the sum of $1.05 and forwarded to plaintiff.

It is the plaintiff’s contention that at the time he was injured he was an employee of N.Y.A., one of the agencies of the Federal Government, and not of the defendant. In this we think he is clearly correct. The defendant had no power or authority to appoint or engage N.Y.A. student employees. That was done by the State Administrator of N.Y.A.

The only local person who had authority in N.Y.A, affairs was the principal McLean. That authority was exercised by the principal, not as an agent of defendant, buhas the designated official representative of N.Y.A. Nor was the defendant a special employer of the plaintiff. There was no contractual relation between them. The defendant exercised no direction or control over the plaintiff who was subject only to the rules and regulations of N.Y.A. and to such directions as might be given by the official representative thereof. The. defendant paid no wages to the plaintiff and was without power to discharge him from his N.Y.A. employment. Plaintiff could not be a special employee of defendant unless his general employer had relinquished direction and control over Mm and that had not been done by N.Y.A. The plaintiff- had not been loaned as an employee to defendant. On the contrary the principal of the school had been loaned to N.Y.A. as a special employee.

Moreover, the plaintiff was engaged on a work relief project which was not local, but Federal. It was made-work for the benefit of those in need of assistance. In such a situation as here disclosed there is never any transfer of employment from the Federal agency to the local entity. That is true even though such entity contribute a part of the money used to pay the workers, or exercise some authority and control over the workers or furnish part of the materials with which and the sites upon which the work is done. In the instant case the defendant was without power to exercise authority over the workers and made no contribution of wages so that the cases go much further than it is necessary to go here. (Hoover v. Independent School District of Shenandoah, 220 Iowa 1364; Taylor v. City of Los Angeles, 29 Cal. App. [2nd] 181; Matter of Moore, 187 N. E. 219; City of Los Angeles v. Industrial Accident Comm., 9 Cal. [2nd] 705; Todaro v. City of Shreveport, 170 So. 356; State ex rel. State Board of Charities v. Nevada Industrial Comm., 55 Nev. 343; Shelton v. City of Greeneville, 169 Tenn. 366; Washington v. Sewerage & Water Board [La.], 180 So. 199; Jackson v. North Carolina Emergency Relief Administration, 206 N. C. 274.) The case of Forest Preserve District v. Industrial Comm., (357 Ill. 389), is not to the contrary since there the State relief agency turned the work over to the Forest Preserve District, another State agency, without reserving any control over the workers.

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

Lehman, Ch. J., Loughran, Finch, Rippey, Lewis and Desmond, JJ., concur. «

Judgment accordingly.


source: Caselaw Access Project

author: Finch, J. Lehman, Ch. J.

license: Public Domain

text:
    In the Matter of Celia Nires, as General Guardian of Eugene Nires et al., Infants, Appellant. Equitable Life Assurance Society of the United States et al., Respondent.
    Argued January 6, 1943;
    decided March 4, 1943.

      Jesse Perlmutter for appellant.

      Carl F. Hollander and Louis W. Dawson for Mutual Life Insurance Company of New York, respondent.

      Louis P. Galli and William J. Moran for Travelers Insurance Company, respondent.

      James D. Ewing for Equitable Life Assurance Society of the United States, respondent.

      Perlie P. Fallon and Ferdinand H. Pease for New York Life Insurance Company, respondent.
   Finch, J.

May infants obtain an immediate allowance for support and education from interest accrued upon the proceeds of a life insurance policy left on deposit with the insurance company, despite an agreement between insured and insurer that the interest shall be accumulated but not be paid, until the infants become twenty-one years of age ?

The facts in so far as pertinent to the decision are in brief as follows: Henry Ñires at the time of his death carried life insurance policies with five insurance companies in favor of his three minor children. These policies permitted the insured to select one of several optional modes of settlement. The modes of settlement agreed upon between Ñires and the companies provide in general, with minor variations not here material, that settlement of the amounts becoming due upon the death of the insured shall be made with the children of the insured in equal shares, the rights of these beneficiaries against the insurance companies being set forth in so-called certificates of deposit or trust agreements issued by the companies. Two of the insurance companies agreed to pay the proceeds of the policies to themselves or to receive the proceeds “ as trustee.” This difference, however, is not material in the decision of the question presented, since in both certificate of deposit and trust agreement, it is expressly provided that the amounts of insurance are not to be segregated but may be commingled with the general corporate funds of the companies and the interest determined not by what the principal actually earns but by applying a fixed rate of interest at a minimum rate of three per cent. The beneficiaries have no share in the increase or decrease in value of the assets. Interest is to be accumulated until the infants are twenty-one years of age, when such income is to be paid in one sum and thereafter in periodic payments. Payment of the principal sums is to be made when the beneficiaries become thirty years of age. Such rights, however, are subject to divestment in the event of the death of a beneficiary before reaching the age of thirty, with payments over in such event to the survivors or survivor, and then to the personal representatives of the survivor or of the insured, together with a further contingent interest in unborn children of the beneficiaries, under the trust agreements with the New York Life, if a present infant beneficiary dies after reaching the age of twenty-one. In general, also, there is incorporated as a part of the agreements, in one case even by title, the provisions of section 15 of the Personal Property Law, which provide that the proceeds of these policies, and any and all payments and benefits thereunder, are not assignable, commutable or subject to encumbrance or legal process.

The decedent’s widow, as general guardian on behalf of two of the infant beneficiaries, thirteen and sixteen years of age, respectively, has brought this proceeding, alleging that she is without funds to support the two children and that no funds are available besides these accumulations of income held by the life insurance companies under the agreements. She prays for an order authorizing and directing the life insurance companies to pay over to her for the support and education of the two children suitable sums out of the accumulated or current income of the property held by the companies for the benefit of the infants.

At Special Term the application was denied. Upon appeal, the Appellate Division has affirmed unanimously, and the case is here by permission of this court.

It is urged by petitioner that the Supreme Court is given power by the Legislature, under section 17 of the Personal Property Law, to invade and set at naught these agreements made between the insured and the companies. Section 17 is entitled “ Anticipation of directed accumulation,” and provides in brief that when a minor, for whose benefit an accumulation of the income of personal property has been directed, shall be destitute of other means, the Supreme Court or, if the accumulation shall have been directed by a will, the Surrogate’s Court, respectively, may, upon application by the minor, cause a suitable sum to be taken from the moneys accumulated or directed to be accumulated for his support or education and paid over to the infant.

The language of section 17, together with its setting and the nature of the power conferred therein, does not indicate that this section is applicable to a contract between an insured and a life insurance company.

The language of this statute, section 17, by its terms purports to be applicable only where there is a direction for an accumulation of income on a trust of personal property. That the words “ * * * a valid accumulation of the income of personal property * * * ” refer to a trust of personal property is shown by an examination of section 15 of the same article, as amended in 1911. (L. 1911, eh. 327.) The first sentence of section 15 provides that a beneficiary’s interest in “ * * * a trust to receive the income of personal property, and to apply it to the use of any person * * * ” shall not be transferable. The amendment to section 15 forbids the transfer, if the parties so agree, of “ * * * the proceeds of a life insurance policy, becoming a claim by death of the insured,” which are left with the insurance company under a trust or other agreement,” thus showing unmistakably the intention of the Legislature to apply the words “ income of personal property ” solely to a trust of personal property, and sharply to distinguish such a trust from a so-called trust or other agreement relating to the proceeds of a life insurance policy. In other words, section 17 is dealing with trusts of personal property and directions concerning such property given by deed or will, as contrasted with agreements made between insured and insurer concerning the relationship of debtor and creditor between them, as in the case at bar. Accumulation of income under a certificate of deposit. or life insurance trust is not based upon a direction by a grantor or testator, but rather upon an obligation arising from contract between insured and insurer. The insurance company does not hold the proceeds of a life insurance policy as a trust fund (Holmes v. John Hancock Mut. Life Ins. Co., 288 N. Y. 106; Latterman v. Guardian Life Ins. Co., 280 N. Y. 102); although the term “ trust ” is employed, no real trust agreement is in fact involved. (Crossman Co. v. Rauch, 263 N. Y. 264, 273.) But there is a debt owing to beneficiaries payable in stipulated amounts, at stipulated times, and in a stipulated manner. Nor is the interest due to the beneficiaries the increment or incident of a res held in trust, but is payable under the agreements at a fixed rate regardless of what the sums represented by the certificates of deposit or so-called trust agreements actually earn. Therefore, in the case at bar, we are dealing with rights under an agreement and not with a direction for accumulations upon a trust of personal property created by deed or will. In consequence section 17 by its language is not applicable to the case at bar.

The setting of section 17 among the provisions of the Personal Property Law confirms and harmonizes with the literal, wording of the statute. Section 17 is a part of the same statutory structure wherein appear immediately preceding, sections 15 and 16 of the same article, namely, article 2 of the Personal Property "Law which is entitled, “Future Estates; Charitable Uses; Accumulation of Income; Trust Estates.” This shows, as clearly as titles can, that the Legislature is dealing in this article in general with trusts of personal property where accumulations of income have been directed by deed or will, except where specific provision is made concerning other than such trusts, for instance, in the amendment made in 1911 to section 15, which specifically deals with agreements made between insured and insurer. Moreover, the carefully worked out distinction in this section 15 between the provisions governing trusts of personal property and the so-called life insurance trusts ” leads to the conclusion that if the Legislature had intended to bring life insurance agreements within the scope of section 17, it would have expressly so provided instead of dealing only with trusts of personal property under directions in a deed or will.

Furthermore, the amendment added to section 15 in 1911 provides that when the proceeds of a life insurance policy are left on deposit with an insurance company, the benefits accruing thereunder after the death of the insured shall not be transferable, nor subject to commutation or incumbrance, nor to legal process * * * if the parties to the trust or other agreement so agree.” In other words, we have in the case at bar not only an agreement between the insured and the insurer, but we have also a statute which is made a part of these very agreements expressly prohibiting the invasion of these funds by legal process where the parties have so agreed, as they have in the case at bar.

Finally, the nature of the power given to the Supreme Court under section 17 is readily understandable when that section is viewed as dealing only with directions for accumulations of income under trusts of personal property. The extent of the jurisdiction of the courts of equity over trusts of personal property is well established. „ On the other hand the jurisdiction of courts to apply the powers conferred by section 17 to a relationship arising out of an agreement made between insured and insurer is not only not an exercise of the normal equity powers over trusts of personal property, but, as already noted, is expressly forbidden by the provisions of section 15.

Other states likewise have held to the view that the general power of an equity court to regulate trusts of personal property and to apply the income thereof .contrary to a direction for accumulation does not justify the invasion of an agreement whereby income is to be accumulated in an insurance relationship. (Pierowich v. Metropolitan Life Ins. Co., 282 Mich. 118 and case cited therein.) In harmony with this construction it may be noted that, while in section 16 of the same article accumulations of income of personal property are prohibited, except for infants, an amendment to that section permits accumulations of the income arising out of moneys held pursuant to an insurance relationship, namely certain accumulations of the income of these moneys to he applied to the payment of premiums of insurance. (L. 1927, ch. 681.)

The unfortunate condition existing as to these minor children does not arise from the contract and is not controlling so as to justify its invasion. The intention of the insured is to be gathered solely from the agreements as made and which, while he had power to change them during his life, were left in force at the time of his death. Insurance has developed to large proportions and property rights of insured and beneficiaries have been created upon the faith of the protection accorded by the courts to insurance agreements and upon the enactment of that policy in statutory form in section 15. Nothing in section 17 or related sections furnishes any authority to the courts to invade and render nugatory these agreements.

Since neither the language nor the setting of section 17 nor the nature of the power conferred therein indicates that the section deals with anything other than directions applicable to trusts of personal property, it becomes unnecessary to pass on the question whether an invasion of contractural rights between insured and insurer may be sustained as constitutional if in fact it had been authorized by the Legislature.

The order appealed from should be affirmed, without costs.

Lehman, Ch. J.

(dissenting). Each of the defendant insurance companies holds the proceeds of a policy issued by it' insuring the life of Henry Ñires. In each policy the insured named his three infant children as beneficiaries and each insurance company agreed in substance that at the death of the insured it would hold the proceeds “ on deposit ” crediting the fund with interest at a rate stipulated in the policy; that when each beneficiary reached the age of twenty-one years the company would pay to him or her the accumulated interest on the share of the proceeds apportioned to such infant; that thereafter, the company would pay the stipulated interest to such beneficiaries till he or she reached the age 'of thirty and that then it would pay the share held “ on deposit * * * together with any interest accrued thereon ” ¡ to the beneficiary ‘ ‘ in a single sum. ’ ’ There are variations in the language in which the obligation of the respective insurance companies is formulated. As Judge Finch in his opinion points out, in two of the policies the insurance company in terms agrees to hold the proceeds as “ trustees ” but in substance the obligation of each insurance company is the same. The company owes to the beneficiary a contractual obligation to make the stipulated payment. Although the word trust is used, the agreement is not in fact a trust agreement.” (Crossman Co. v. Rauch, 263 N. Y. 264, 273.)

Two of the beneficiaries named in the policies are infants residing with their mother, the petitioner-appellant. These infants received nothing under the will of their father, the insured. They are, it appears, entirely destitute and their mother with whom they reside is also without money or property which she can use for their support. She has applied to the Supreme Court for an order directing the insurance companies to pay to her as guardian of the two infant children the accumulated interest and any interest that may hereafter accrue to them from time to time on the proceeds of the life insurance policies held by the insurance companies or such sum as to the court may seem sufficient for their support and education. The petition has been denied on the ground that the Supreme Court has no power to direct such payment.

Section 17 of the Personal Property Law provides that when a minor, for whose benefit a valid accumulation of the income of personal property has been directed, shall be destitute of other sufficient means of support or education, the supreme court * * * may * * * cause a suitable sum to be taken from the moneys accumulated or directed to be accumulated, to be applied for the support or education of such minor. ’ ’ The sole question presented upon this appeal is whether the accumulation of interest on the proceeds of the policies which the insurance companies have agreed to pay to the infants as each reaches the age of twenty-one is a “ valid accumulation of the income of personal property ” within the meaning of the statutory provision.

It must be conceded at the outset that the insurance company is under no obligation to hold the proceeds of the insurance policy as a separate fund, and as Judge Finch points out, the accumulated interest which the company has agreed to pay is fixed by agreement and is not in technical sense ‘ income from personal property.” The insurance company is not a trustee since it holds no specific fund and for the same reason the statute against restraints on alienation and on accumulations of income do not apply to the contractual obligation of the company. (Holmes v. John Hancock Mut. Life Ins. Co., 288 N. Y. 106.) Though the insurance company is not technically a trustee and holds no specific fund for the benefit of the petitioner’s infant children, yet its position is so closely analogous to that of a trustee and its obligation to pay interest on the proceeds of the policy is so closely analogous to an obligation to pay the “ income ” of a fund of the same amount as those proceeds, that the difference is commonly ignored in thought and speech. So we speak of a depositor’s money in a bank and the income of such money though technically the bank holds no money for the depositor and merely owes him a debt. We have in the language of the contracts between the insurance companies and the insured which fixed the contractual obligation of the companies convincing evidence that the parties to the contracts regarded the relationship between the company, promising to make deferred payments of the principal of the proceeds with interest thereon, and the beneficiary entitled to such deferred payment, as that of a trustee holding a specific fund and cestui entitled to the income of the fund. That is clearly expressed in two policies and it is instinct in the language of the other policies. . The ultimate question which we must decide is whether the Legislature in section 17 of the Personal Property Law intended that the words “accumulation of the income of personal property ” should be confined to the income of personal property held in the form of a technical trust or intended to include the accumulation of interest upon the proceeds of an insurance policy when payment is deferred under such a contract with the insurance company made for the benefit of an infant.

The statute was enacted before the contracts with the insurance companies were made. If the language of the statute is given broad construction it includes the accumulation of interest directed by the contracts. Then the provision of the statute that the court „ may order payment of such accumulation for the support of the infant beneficiaries is as much a part of each contract as if it had been integrated in terms in the contract. We may not lightly assume that a father who takes out a policy of life insurance for his children would provide that the income of the proceeds of the policy should be accumulated during the infancy of his children unless. he believed that if the children should be destitute the income could be applied for their benefit. To the ordinary layman the statute offered such assurance. The petitioner does not, I think, urge that the Supreme Court is given power by the Legislature under section 17 of the Personal Property Law “ to invade and set at naught these agreements made between the insured and the companies.” Obviously any statute which attempted to given power to the courts to set at naught ” any contract would be unconstitutional. What the petitioner here urges is that the courts should enforce these contracts made by a father to provide for his children, including in the contracts the statutory provision that during the infancy of the children the court may direct that income which would otherwise be accumulated should be applied for the support and education of his children, if they would otherwise be destitute.

Labored analysis of the language of the title and of other sections of the same article of the Personal Property Law furnishes no plain guide to the intention of the Legislature in enacting section 17, and conflicting inferences might be drawn from different parts of the statute. We do know that the relationship created by the contracts is so nearly analogous to that of trustee and cestui that the insurance companies and their attorneys in drafting the terms of the contract ignored the distinction. We do know that in common parlance men are prone to ignore the distinction between " accumulated income of personal property ” and accumulated interest on moneys held on deposit ” under a contract for deferred payment. We find no sound reason why the Legislature should have intended a distinction which men not versed in the technicalities of the law might not discern. Upon the argument of the appeal the attorneys for the insurance companies frankly said that* they could see no reason why the Legislature should draw such a distinction. The statute is in my opinion misread and the purpose of an insured in taking out the insurance policies for the protection of his children would be thwarted if the language of the statute is confined to its technical meaning.

The order of the Appellate Division should be reversed.

Rippey, Lewis and Desmond, JJ., concur with Pinch, J.; Lehman, Ch. J., dissents in opinion in which Loughran and Conway, JJ., concur.

Order affirmed. (See 290 N. Y. 745.)


author: Lehman, Ch. J.

text:
    The People of the State of New York, Respondent, v. William Mann, Appellant.
    Argued January 18, 1943;
    decided March 4, 1943.

      J. Francis Hayden, Charles E. Powers and Timothy J. Shea, Jr., for appellant.

      William C. Chanler, Corporation Counsel (Charles F. Murphy and Paxton Blair of counsel), for respondent.
   Lehman, Ch. J.

The defendant was stopped by a police officer while driving an automobile tow-truck ” on Henry Hudson parkway near 95th street in the city of New York and was charged with violation of section 41, subdivision a-1; section 49, subdivisions a and b; and section 53, subdivisions d and e, of the Rules and Regulations of the Department of Parks.

The city does not dispute that in this case the defendant had received a call to go with a towing car to 95th street and Hudson parkway, and that the defendant entered the parkway at 96th street and was proceeding to answer the call. The defendant so informed the police officer at the time he was stopped, and though the city of New York does not expressly concede that such a call was given, both parties agreed that they were submitting to the court only the question of law whether the defendant had a right to operate his towing truck on the parkway at the point where he was arrested.

The Rules and Regulations established by the Park Commissioner pursuant to authority vested in him under the New York City Charter (1938) contain general prohibitions against the use of the parkways by commercial or business vehicles, and no unlicensed business may be carried on upon the parkways (§§ 41 and 53). Under a literal construction of these sections of the Rules and Regulations, the operation by the defendant of a “ tow-truck is prohibited. Those sections must, however, be read in conjunction with section 49, subdivisions a and b, which read:

Section 49. Towing and Projecting Articles.
a. No person shall cause or permit a vehicle to be towed by another vehicle, in any park except that, in case of breakdown a disabled vehicle may be towed to the nearest exit.
“ b. No person shall operate.or drive in any park a vehicle containing any person or object projecting or hanging outside or on the top thereof.”

The provision in subdivision a that in case of breakdown a disabled vehicle may be towed to the nearest exit ’ ’ includes by necessary implication permission for the operation of a towing truck to and from the nearest exit and subdivision b does not serve to negative that implication.

The Department of Parks has made a contract with Tidewater Oil Company to maintain gasoline stations on the parkway for the convenience of the public. It has required that the Oil Company should provide also towing service for the convenience of the public. A subcontractor of the Oil Company maintains a patrol for towing service on the east and west lanes of the parkway with two cars bearing the Park Department insignia. Reasonable rates for towing service have been fixed by the Park Department, and the trucks of the towing company have signs stating these rates. The city contends that the Park Department has power to provide such service and since it has made provision for towing service by a single contractor chosen for that purpose, no permission for other towing cars to operate from and to the nearest entrance is necessarily implied in the section 49 of the Park Regulations. We do not now decide whether the Park Department has power to grant an exclusive contract for towing service on the parkway and to exclude from the parkway all towing trucks not belonging to the contractor selected by the department. If ft has such power, the exclusion should be express and in unambiguous terms. Nowhere in the Park Regulations do we find language indicating that persons who are permitted by section 49, subdivision a to cause their cars to be towed by another vehicle ” to the nearest exit may not call a towing car, or that a person engaged in the business of towing and repairing disabled automobiles, may not when called operate a towing truck for that purpose to and from the nearest exit.

The judgments should be reversed and the information dismissed.

Loughran, Finch, Rippey, Lewis, Conway and Desmond, JJ., concur.

Judgments reversed, etc.


author: Lewis, J. Finch, J.

text:
    Aerated Products Company of Buffalo, Inc., Appellant, v. Edward S. Godfrey, Jr., as Commissioner of Health of the State of New York, Respondent.
    Argued December 9, 1942;
    decided March 4, 1943.

      Irving G. Hubbs, Howard R. Sturtevant, James M. Hengst and Mark N. Turner for appellant.

      John J. Bennett, Jr., Attorney General (F. R. Chant and Hugh Reilly of counsel) for respondent.
   Lewis, J.

Upon the decision of an official referee, to whom were referred for hearing and determination the issues in this case, the plaintiff was granted a declaratory judgment which determined that the plaintiff’s product, “ Instant Whip ”, is not a milk product, as defined by Regulation 1 of Chapter 3 of the State Sanitary Code, and accordingly that it was not subject to regulation under the Public Health Law. The declaratory judgment further determined that “ Instant Whip ” is a manufactured food product, within the classification of " frozen desserts mix,” under article 4-A, section 71-a, subdivision 9, of the Agriculture and Markets Law, and as such is subject to regulation under the provisions of the latter statute. The Appellate Division reversed the judgment of Trial Term on the law and facts and dismissed the complaint. To that end it reversed and disapproved certain findings of fact and conclusions of law by the official referee and made new findings of fact as follows: Instant Whip is a milk product. Its preparation and sale are subject to regulation under the Public Health Law.” Asserting that the judgment of reversal entered upon the order of the Appellate Division is erroneous, the plaintiff has appealed therefrom as of right.

In those circumstances this court has jurisdiction to review the facts found by the Appellate Division and its decision thereon and, with appropriate respect for the findings of the trial court, we may ascertain whether the decision by the Appellate Division was in accord with the weight of evidence. (State Const. art. VI, § 7; Civ. Prac. Act, former § 589, subd. 2 [as amd. L. 1926, ch. 725] ; York Mortgage Corp. v. Clotar Constr. Corp., 254 N. Y. 128, 131-134; Forstmann v. Joray Holding Co., 244 N. Y. 22, 28, 29; Matter of Flagler, 248 N. Y. 415, 420.)

The plaintiff, a New York corporation, having its principal place of business at Buffalo, is licensed by Oration Process, Inc., an Ohio corporation, to manufacture and sell Instant Whip. ’ ’ That product — made by a patented process — consists of pasteurized cream to which are added sugar and enough vanilla to flavor the mixture. After seven ounces of the mixture have been placed in a sterilized metal container, the air is withdrawn by a vacuum pump and replaced by seven grams of nitrous oxide gas. The nitrous oxide, which is conceded to be harmless to health, is introduced into the container at a pressure of one hundred and fifty pounds. One-half of it, upon agitation, permeates the cream and sugar mixture thus creating the quality of foaminess which characterizes whipped cream. The remaining gas in the container exerts upon the mixture enough pressure to produce exudation when the outlet valve in the container is released. The product itself is used to garnish pastry, sundaes, soda fountain drinks and for those other purposes in which whipped cream is ordinarily employed.

We accept it as a fact — found by the referee upon ample evidence and not reversed by the Appellate Division — “ That ‘ Instant Whip, ’ due to its being processed and placed in sealed containers and thereafter kept in cracked ice, can be kept for relatively long periods of time, and belongs, economically, in the surplus commodity class such as ice cream and frozen desserts mix.” As such it is subject to rules and regulations promulgated and enforced by the Commissioner of Agriculture and Markets under sections 71-h and 71-k of the Agriculture and Markets Law. Such rules and regulations relate to the sanitary condition of buildings where “ Instant Whip ” is manufactured; the sanitary condition of persons in direct physical contact with the product itself during manufacture; the sanitary condition of all equipment used in its manufacture and the containers in which it is shipped and of the premises and equipment where it is sold. (See § 71-k id and Rules and Regulations [Circular 592 filed in 1940 pursuant thereto].)

In the manufacture, sale and distribution of " Instant "Whip ’ ’ the appellant holds a license issued by the Commissioner of Agriculture and Markets which authorizes it to purchase cream for purposes of manufacture only. It has conformed strictly with the rules and regulations mentioned above and by doing so it has produced and continues to produce a product which, as we shall see, is a nutritive, wholesome and palatable food product which is in no way injurious to health. There came a time, however, after July 1, 1939, when the appellant found itself involved in a controversy with local and State health authorities which prompted the present action wherein demand is made for a declaratory judgment. That controversy arose in the following circumstances:

The State Sanitary Code has the force and effect of law by reason'of provisions of the Public Health Law (§§ 2-b and 2-c). It embodies sanitary regulations established by the Public Health Council with the approval of the Commissioner of Health. These regulations “ deal with any matters affecting the security of life or health or the preservation and improvement of public health in the state of Hew York * * *.” (Public Health Law, § 2-b.) Among matters affecting public health which are regulated by the Sanitary Code are the sale and distribution of milk products.” In the present case it seems to be conceded that, as administered prior to July 1, 1939, the Sanitary Code did not include Instant Whip ” within the classification of milk products.” Prior to July 1, 1939, the manufacture and sale of “ Instant Whip ” had been and still is, as we have seen, subjected to rules and regulations promulgated and enforced by the Commissioner of Agriculture and Markets under sections 71-h and 71-k of the Agriculture and Markets Law. However, on April 14, 1939, the Public Health Council amended the Sanitary Code to be effective July 1, 1939, by adding to the definition of “ milk products ” the clause ‘ ‘ cream to which any substance has been added and for use in fluid state or whipped. ’ ’ Indeed, the brief filed by the respondent, the State Commissioner of Health, concedes that this amendment was made to bring plaintiff’s product ‘ Instant Whip ’ within the definition of a milk product.”

Following the amendment in 1939 of the definition of milk products as contained in the Sanitary Code, demands were made by certain health department officials upon the appellant which required that in its manufacture, sale and distribution of “ Instant Whip ” it conform to those provisions of the Sanitary Code which are applicable to the production and distribution of milk products. Those demands include the requirement that if “ Instant Whip ” is to be sold in a certain community it must be manufactured in a local plant and must use only cream procured from local sources and inspected by appointees of the local commissioner of health. The appellant claims that the output of one plant is sufficient to produce a supply of “ Instant Whip ” adequate for several cities and that it would be both impractical and uneconomical to require the maintenance of a plant within each community where Instant Whip ” is sold. Resisting the demands thus made upon it and in an effort to secure legal confirmation of its position in the controversy thus engendered the appellant instituted the present action for a declaratory judgment in which, as already indicated, a decision in the court of original jurisdiction favorable to the present appellant, has been reversed at the Appellate Division.

Our attention is directed by the Commissioner of Health to the fact that in connection with the manufacture and use of each container in which Instant Whip ” is sold the appellant employs a valve which is threaded into the container and is the device used to release the contents. In that valve is a spring which is not demounted in the cleansing process to which each container is subjected .after use. It is said by the respondent that the presence of the threaded opening and the spring “ offers an ever present source of possible contamination.” But there is no evidence that contamination in any instance has escaped the cleansing process to which the container was subjected and has caused harm to a user of the product. The respondent also invites attention to the fact that, in preparing “ Instant Whip ” for distribution, instead of using a mechanical method to cap each container, that particular operation is manually performed — the suggestion being that there is thus presented a second menace to health through the contamination of the product. ’ ’ But again there is a total lack of evidence of such contamination. And more important to our inquiry upon this branch of the problem is the finding of fact made by the referee and not disturbed by the Appellate Division — ‘ ‘ That the methods employed by plaintiff for cleaning the containers do in fact clean said containers in all their parts, and render the containers and all their parts clean, sanitary and sterile (Emphasis supplied.)

There are other findings of fact made by the referee and not reversed by the Appellate Division which bear upon an important question which underlies the determination of this appeal — whether “ Instant Whip ” may be dispensed with entire safety to public health when regulated as to manufacture and distribution by the rules enforced by the Commissioner of Agriculture and Markets. Those undisputed findings of fact are:

“ 14. That all of the ingredients of ‘ Instant Whip ’ are clean and wholesome, and that the nitrous oxide gas as used is utterly harmless.
“ 15. That the product ‘ Instant Whip ’ is a nutritive, wholesome and palatable food product, and is in no wise dangerous, harmful or injurious to the health of the person eating the same.
“ 16. That plaintiff’s processes in the manufacture and distribution are carried on in a safe and sanitary manner, and under clean and sanitary conditions.
“ 18. That ‘ Instant Whip ’ marks a scientific and sanitary advance over ordinary whipped cream.
“ 19. That ‘ Instant Whip, ’ due to its being processed and placed in sealed containers and thereafter kept in cracked ice, can be kept for relatively long periods of time, and belongs, economically, in the surplus commodity class such as ice cream and frozen desserts mix.
20. That in none of the States or communities outside of New York State where ‘ Instant Whip ’ is sold, are the licensees of Allration Processes, Inc., manufacturing and distributing ‘ Instant Whip ’ required to comply with the same requirements as are imposed upon fluid milk and cream.”

There is in the record before us substantial evidence to support each of the findings of fact quoted above which stand unreversed by the Appellate Division. Accordingly we must treat those findings, in so far as they relate themselves to our problem, as statements of established facts upon which our decision may rest. (Forbes v. Todd, 266 N. Y. 384, 388-390.)

We are mindful that the Sanitary Code has the force and effect of law when it deals “ with any matters affecting the security of life or health or the preservation and improvement of public health ” within the State. (Public Health Law, § 2-b.) We also have in mind the rule of law that we may declare invalid the amendment to the Sanitary Code here challenged, only in the event that it is so lacking in reason for its promulgation that it is essentially arbitrary.” (Matter of Stracquadanio v. Dept. of Health, 285 N. Y. 93, 97.) A statement by Mr. Chief Justice Hughes in Borden’s F. P. Co. v. Baldwin (293 H. S. 194 at pp. 209, 210), is quite as appropriate here — “ The principle that the State has a broad discretion in classification, in the exercise of its power of regulation, is constantly recognized by this Court. Still, the statute may show on its face that the classification is arbitrary * * * or that may appear by facts admitted or proved.” Here we view the amendment to the Sanitary Code adopted on April 14, 1939, effective July 1, 1939, in the light of the concession made by the Commissioner of Health in his brief filed as respondent upon this appeal — viz., that such amendment “ * * * was made to bring plaintiff’s product ‘ Instant Whip ’ within the definition of a milk product.” That concession when considered against the background of facts disclosed by material findings by the courts below, which we may not disregard, leads us to conclude that the amendment here in question as applied to the manufacture, sale and distribution of appellant’s product “ Instant Whip,” is unreasonable, discriminatory and arbitrary and denies to the appellant the equal protection of the laws and due process of law guaranteed to it as constitutional rights. (Federal Constitution, Amend’ts V and XIV, § 1; State Constitution, art. 1, §§ 6, 11.)

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

Finch, J.

(dissenting). The principal ingredient and bulk of this product, Instant Whip ” is fluid cream to which nitrous oxide is added under pressure; also small quantities of sugar and vanilla are added. This operation is an efficient means of producing whipped cream in large quantities and keeping the cream in containers while being shipped for long distances in interstate commerce. This product has substantially the same food value as cream whipped in a different manner. Outside of the container it is as contaminable as cream. Aside from the nitrous oxide, there is no substantial chemical difference between this product and ordinary cream. The fact that the product may be used as an attractive and delectable dressing to frozen desserts and may belong economically in the surplus commodity class, does not rebut the finding of the Appellate Division that the product is a milk product and properly regulated pursuant to the Sanitary Code. Whether this product should remain subject to regulation as to its manufacture and sale only as required under the Agriculture and Markets Law (§§ 71-h and 71-k) or whether it is vital to health that the source also of the fluid cream should be subject to inspection and control, lies within the determination of the Commissioner of Health who is charged with safeguarding the health of the community. It cannot be gainsaid that supervision at the source affords greater safety to the public than mere supervision of the manufacture and sale. If classified under the State Sanitary Code, the product would be subjected to the same safeguards of health that are placed about the production and sale of milk products generally. The plaintiff admits that under the Agriculture and Markets Law it has purchased cream at will from uninspected sources outside of the State. The Public Health Council is a board of nine members, eight of whom are appointed by the Governor and the State Commissioner of Health is a member ex officio. This Council enacts the Sanitary Code subject to the approval of the Commissioner of Health. This Public Health Council amended the State Sanitary Code on April 14, 1939 by adding to the definition of milk products “ cream to which any substance has been added and for use in fluid state or whipped.” This amendment was made to bring the product of the plaintiff within the definition of a milk product.

In view of the evidence supporting the reasonableness of the classification as a milk product, the regulation and supervision of its product and manufacture under the Sanitary Code in a manner employed for milk products generally cannot be said to be unreasonable, much less arbitrary and capricious.

The judgment of the Appellate Division should be affirmed.

Loughran, Rippey and Conway, JJ., concur with Lewis, J.; Finch, J., dissents in opinion in which Desmond, J., concurs; Lehman, Ch. J., taking no part.

Judgment accordingly.


author:
Rippey, J.
      Desmond, J. Lehman, Ch. J.

text:
    Dinny & Robbins, Inc., Appellant, v. Alfred S. Davis, as Treasurer of Retail Shoe Salesmen’s Union, Local 1115-F, Respondent, et al., Defendants.
    Argued January 14,1943;
    decided March 4, 1943.

      Samuel J. Robbins and Sidney O. Raphael for appellant.

      Simon J. Liebowitz and Leon Reich for respondent.
   Rippey, J.

Plaintiff in this action is a retailer of men’s shoes operating three stores in the city of New York, one of which is located at 484 Seventh avenue. It brought this action to restrain alleged illegal picketing by the defendant on and subsequent to January 12,1942, claiming that the picketing was not the result of any labor dispute ” within the meaning of section 876-a of the Civil Practice Act.

The trial court made findings of fact and conclusions of law upon which it based a judgment restraining the defendant from carrying a particular sign in connection with the picketing. The judgment, however, did not restrain picketing provided there was a modification of the sign which pickets were carrying. The Appellate Division, by a vote of three to two, reversed all of the findings of fact and conclusions of law of the trial court and made new findings of fact and conclusions of law in place thereof. The new findings were such only as the court deemed necessary to sustain its conclusion that by the facts alleged in the complaint and sustained by the evidence a labor dispute existed between the parties within the meaning of section 876-a of the Civil Practice Act and that the allegations of the complaint and the proofs indicated that there had been no compliance with the conditions specified in that section as precedent to the maintenance of the action and, as a consequence, the complaint must be dismissed. The new findings of fact made by the Appellate Division were in all essential particulars the same as those found by the trial court except as to one finding of the trial court to which attention will be called later and that was in fact a conclusion of law. Accordingly, the reversal was actually upon the law and the question of law passed upon is whether there was a labor dispute ” between the parties within the meaning of section 876-a.

Preliminary to further reference to that question, we repeat that there was no prohibition by the trial court in this action of lawful picketing. The trial court found that on January 12, 1942, and ■‘hereafter, the defendants and persons designated by them picketed the store of plaintiff by one picket who paraded in front of the premises carrying a placard bearing the words, “ Dinny & Bobbins shoes are unfair to the Betail Shoe Salesmen’s Union Local 1115-F — R.C.I.P.A., American Federation of Labor,” which picketing was misleading to the general public and the customers of the plaintiff in that they were led to believe that the employees of the plaintiff were on strike, and that the plaintiff was unfair to organized labor.” The Appellate Division found, as did the trial court, that there was no mass picketing, and that there was no violence in the course of picketing, that it was peaceful at all times and that the picket made no verbal statements, and further found that no statement was made by the picket that any of plaintiff’s employees were on strike “ except by implication.” That, of course, was the same finding as made by the trial court. The judgment of the trial court provides that the defendant should be permitted to picket with a sign which should read as follows: “ This is no strike. All employees of Dinny & Bobbins, Inc., are regular members of Local 1268 C.I.O., not members of Local 1115-F — R.C.I.P.A., A. F. of L.” The trial court correctly found, as did the Appellate Division, that there was an implication by the sign which the picket carried’that the employees of plaintiff were on strike. The judgment of the trial court also was to the effect that the sign indicated that plaintiff was unfair to organized labor and that finding, although it was the single case where the Appellate Division did not concur, was sustained by the evidence. The judgment restraining the use of such a sign was in all respects correct (Angelos v. Mesevich, 289 N. Y. 498). The statement on the sign that the plaintiff was unfair to Betail Shoe Salesmen’s Union, Local 1115-F, R.C.I.P.A., American Federation of Labor, was false since there was no obligation on the part of plaintiff to enter into a contract with the defendant, as hereafter pointed out.

On October 1,1941, the plaintiff, as a result of collective bargaining, entered into a comprehensive written contract with Betail Shoe Salesmen’s Union of New York, Local 1268, chartered by the United Betail, "Wholesale and Department Store Employees of America, affiliated with the Congress of Industrial Organizations, which was in full force and effect at the time of the picketing and was to be continued in effect by its terms until October 1, 1942. It covered in detail wages and working conditions of its employees. The contract followed at least two similar contracts with the same organization, each for a yearly period. No complaint at any time was made by the defendant in regard to the validity and comprehensive character of the agreement or that there were any matters affecting wages and working conditions which were not effectively arranged for in the contract. Counsel for defendant, upon the trial, specifically disclaimed that the plaintiff was unfair to labor generally and asserted that the defendant’s sole claim was “ that this plaintiff is unfair to Local 1115-F.” The findings below were to the effect that that union was engaged in the same field as the defendant union; that the CJ.O. unions were picketing stores employing members of the defendant union and that the defendant union had notified the plaintiff to execute a proposed contract with it within three days, to which notice plaintiff paid no attention, and that, in retaliation, the picketing of plaintiff’s store began. In other words, it has been held that, in spite of the undisputed facts that no strike had been called against the plaintiff, there was up pretense or claim on the part' of defendant union that picketing of plaintiff’s store was a bona fide attempt at collective bargaining with the object of increasing wages or bettering the working conditions of plaintiff’s employees, and that plaintiff in good faith had entered into and was operating under a binding contract with the G.I.O. union, by the simple demand alone on the part of the defendant that plaintiff abrogate its contract with the C.I.O. union and enter into a contract it proposed, a labor dispute existed within the meaning and intent of section 876-a of the Civil Practice Act.

There is nothing that can be found in that section or in the purposes for which it was enacted to indicate any intent on the part of the Legislature that it should cover a retaliatory jurisdictional dispute between two rival unions where no strike existed against an employer and there was no complaint concerning terms or conditions of employment or employment relations arising out of the respective interests of employer and employee and no attempt had been made to organize such employees. That act was not designed as an instrument to promote and protect strife between rival labor groups or to injure or destroy the good will and business of innocent employers against whom there was no complaint concerning wages or working conditions solely because they refused to take sides with one group as against the other. There is nothing in the act to bar a court of equity from restraining irreparable injury to property and business of an innocent employer against a build-up of an. alleged " labor dispute ’ ’ such as is indicated in this case. The act does not compel courts of equity to force the breach of a valid contract between an employer and its employees satisfactorily covering wages and working conditions of such employees when made as a result of collective bargaining (Florsheim Shoe Store Co. v. Retail Shoe Salesmen’s Union, 288 N. Y. 188) and to suffer suits for damages for its breach. On the contrary, the Legislature provided in the State Labor Relations Act a due and an orderly process for settling such jurisdictional disputes (Labor Law, art. 20).

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

Desmond, J.

(dissenting). Plaintiff concedes its failure to comply with section 876-a of the Civil Practice Act. The court, therefore, was entirely without jurisdiction to grant plaintiff any sort of injunction if the case is one “ involving or growing out of a labor dispute.” The existence of a labor dispute does not depend on the strength or weakness of a disputant’s case, on his •wisdom or folly, or on the views of any court as to the rights or wrongs of his position. By express definition of the Legislature, the term labor dispute ” includes “ any controversy concerning * * * the association or representation of persons in negotiating * * * or seeking to arrange terms * * * of employment ” (§ 876-a). Defendant union tendered to plaintiff employer a contract which the former refused to sign. That refusal, claims the union, was unfair. The employer denies that impeachment, pointing to the fact that it was already under contract to a rival union. Obviously and beyond doubt this was such a dispute as is encompassed within the above quoted definition, found in section 876-a, of a labor dispute.” The statute’s flat prohibition of the issuance of an injunction in such a case, without pleading and proof required by the statute and concededly absent here, makes it unnecessary and improper for any court to investigate the merits of the dispute. There is simply no jurisdiction to issue the injunction.

¡ Even if we could write section 876-a out of this case, we would still have to deal with our own decisions. Early and late, those decisions positively deny the right to issue an injunction against peaceful picketing by an ambitious union, though the employer has a subsisting contract with another union. (Interborough R. T. Co. v. Lavin, 247 N. Y. 65; J. H. & S. Theatres, Inc. v. Fay, 260 N. Y. 315; Stillwell Theatre, Inc. v. Kaplan, 259 N. Y, 405.) In the Stillwell case, which cannot be distinguished from the present case, Chief Judge Pound wrote: “ We would be departing from established precedents if we upheld this injunction.” (p. 412.) The established precedents of that day have since been reinforced by an express statutory prohibition.

The theory that defendant’s peaceful picketing is unlawful because it amounts to a demand that the employer breach its contract with the other union, was expressly passed upon and repudiated by this court in Stillwell Theatre, Inc. v. Kaplan (supra) (259 N. Y. at page 412).

The trial court found that there was at no time more than one picket and that the activities of this picket were at no time violent or disorderly. The sign he carried announced to the public that plaintiff was unfair ” to defendant’s branch of the Betail Salesmen’s Union, American Federation of Labor. It did not say, as such signs often do, that plaintiff was unfair to " labor ” or to ‘ ‘ organized labor. ’ ’ The trial justice, during the trial, stated in a colloquy with counsel, that this sign was misleading as tending to create the impression that they [plaintiff] are unfair to labor generally.” For that reason, he twice told counsel during the trial, he considered it necessary to “ dispel that impression ” by adding to the picketing sign a further statement that plaintiff’s employees were all members of the rival, or C. I. 0., union. However, when the decision and judgment were entered, they ordered not that the explanatory statement be added to defendant’s original plaint on its picketing sign, but that the statement suggested by the court be substituted for defendant’s sign, and that no other kind of statement be made to the public. Even if the court had forbidden picketing unless its verbiage should be added to that of defendant on the sign; such an order would have been illegal, as held by this court in Edjomac Amusement Corp. v. Empire State Motion Picture Operators’ Union, Inc. (273 N. Y. 647) where, in an identical case, we reversed an injunction order and dismissed the complaint. But when the court by refusing to allow any wording but its own, denied to the union its right to assert that plaintiff was unfair to it, there was the plainest violation of rules laid down by this court (Nann v. Raimist, 255 N. Y. 307, 319) and of defendant’s right of free speech under the Federal Constitution (Bakery & Pastry Drivers & Helpers Local 802 v. Wohl, 315 U. S. 769, 774, and cases therein cited).

The Appellate Division was correct in dismissing the com-' plaint and its judgment should be affirmed, with costs.

Lehman, Ch. J.

(dissenting). I concur, in the opinion of Desmond, J. The Constitution of the State of New York, and the Constitution of the United States guarantee freedom of speech and those guarantees are violated by censorship though exercised by a court with conscientious intent that no representations which in the opinion of the court distort the truth. and no arguments which, in the opinion of the court, are specious, should induce the public to appraise the merits of a dispute in manner which ignores the economic axioms of the orthodox and the social philosophy of the respectable.

The judgment should be affirmed with costs.

Finch, Lewis and Conway, JJ., concur with Rippey, J.; Desmond, J., dissents in opinion in which Lehman, Ch. J., and Lottghran, J., concur; Lehman, Ch. J., concurs in dissenting opinion in separate memorandum.

Judgment accordingly. (See 290 N. Y. 745.)


author: Loughran, J.

text:
    In the Matter of Germaine M. Thomas et al., Appellants, against The Board of Standards and Appeals of the City of New York et al., Respondents.
    Argued January 4, 1943;
    decided March 4, 1943.

      Reginald S. Hardy for appellants.

      Paul Friedman for Bay Parkway Holding Corporation, respondent.

      William C. Chanler, Corporation Counsel (James Hall Prothero, Paxton Blair and Raymond J. Horowitz of counsel), for Board of Standards and Appeals, respondent.
   Loughran, J.

On June 7, 1935, Violet Kramer became the owner of a plot of land at the southeast corner of Utica avenue and Clarendon road in the borough of Brooklyn. A little later, Bay Parkway Holding Corporation contracted with her to take the title. Bay Parkway Holding Corporation wished to erect a gasoline service station upon the property, but the district was zoned for business uses and such a structure was barred therefrom by section 4 of the Amended Building Zone Resolution. (See People ex rel. Fordham M. R. Church v. Walsh, 244 N. Y. 280; Matter of Y. W. H. Assn. v. Board of Standards & Appeals, 266 N. Y. 270.) Consequently the contract of sale contained these words: It is understood and agreed that this contract is conditional upon the seller procuring a variation of the Zoning Law from the Board of Standards and Appeals so as to permit the erection and maintenance of a gasoline service station upon these premises * * * and in the event that the seller fails to procure such permit, then this contract shall be null and void.”

Pursuant to that stipulation, Kramer on October 15, 1935, petitioned the Board of Standards and Appeals so to vary the Zoning Resolution in her favor. To that end, she invoked the jurisdiction conferred upon the Board by section 21. It is thereby provided: " Where there are practical difficulties or unnecessary hardships in the way of carrying out the strict letter of the provisions of this resolution the Board of Appeals shall have power in a specific case to vary any such provision in harmony with its general purpose and intent, so that the public health, safety and general welfare may be secured and substantial justice done.” Before Kramer’s invocation of this dispensing faculty came on to be considered by the Board, she withdrew her petition because, as it happened, she had previously conveyed the property to Bay Parkway Holding Corporation on October 5,1935.

On April 21, 1936, Bay Parkway Holding Corporation, as the then owner, prevailed upon the Board to reopen the matter. A hearing ensued on May 12, 1936, with the result that objections made by owners of nearby properties were overruled, and the requested variance was allowed without limitation in point of time and subject only to such conditions as the board may impose after plans are filed.” The objectors were not content with that disposition. They pressed their protests by way of a certiorari proceeding in the Supreme Court and there the unrestricted grant of variance was annulled. (See 163 Misc. 296.)

So the matter stood until January 30, 1940, when Bay Parkway Holding Corporation persuaded the Board to consent to a rehearing. Additional proof of the claimed unnecessary hardship having thereupon been adduced, a second grant of variance followed on April SO, 1940, though this time the exemption was limited to a term of five years and was conditioned upon compliance with detailed specifications for the erection of the proposed gasoline service station. What follows has reference only to this smaller variance.

The validity thereof was questioned by the objectors in a second certiorari proceeding commenced by them on June 6, 1940. Special Term dismissed the order of certiorari and confirmed the determination of the Board. On appeal by the objectors, the Appellate Division reversed the finding that Bay Parkway Holding Corporation had established the existence in its case of the uncommon hardship contemplated by section 21. (See Matter of Otto v. Steinhilber, 282 N. Y. 71.) None the less for that, however, the variance still endured, for the Zoning Resolution had been amended (as of June 28, 1940) by the addition of a new subdivision (f) to section 7 thereof and a majority of the Appellate Division held (1) that the advantage of this amendment was open to Bay Parkway Holding Corporation; and (2) that the variance was valid thereunder on the findings of the Board. Upon this fresh basis, the erroneous determination made by the Board under section 21 was saved, and the confirmatory order of Special Term was affirmed accordingly. As appellants in this court, the objecting owners of neighboring properties now contest the result reached by the Appellate Division.

Section 7 (f) provides: “Use District Exceptions. The Board of Standards and Appeals may, in appropriate cases, after public notice and hearing, and subject to appropriate conditions and safeguards, determine and vary the application of the use district regulations herein established in harmony with their general purpose and intent as follows: * * * (f) Permit, for a stated term of years, in a business, business-1, retail or retail-1 district, where the provisions of § 21-A do not apply, the erection of a gasoline service station or oil selling station, and the erection of a garage for more than five motor vehicles or the storage or parking of more than five motor vehicles.” The Board must see to it that a variance granted under these provisions does not weaken either the general purposes of the Zoning Resolution or the use regulations set for tlie particular district. (Cf. Matter of Reed v. Board of Standards & Appeals, 255 N. Y. 126, 136.)

To a considerable degree, the case for Bay Parkway Holding Corporation comes up'to the above requirements of section 7 (f). The property lies in a business district. This permit for the erection thereon of a gasoline service station is limited to a term of five years. Section 21-A has no application. The Board found that the variance will not alter the essential character of the neighborhood ” or endanger the safety or impair the health of residents of the vicinity. ’ ’ The Board found that the conditions imposed by it “ afford full protection to the adjoining property owners.” There is evidence to upholcj these findings. The Board further found that the premises involved could not yield a reasonable return unless a variance is granted. ’ ’ This finding, too, has support in the evidence. When an application is made under section 21, such financial hardship to a single owner does not count. But section 7 (f) empowers the Board — all other things being equal — “ to enable the owner to make a reasonable and profitable use of his property. ’ ’ (Matter of Reed v. Board of Standards & Appeals, 255 N. Y. 126, 135.)

On the foregoing findings taken together, the Appellate Division saw “ a complete case for the granting of the temporary and conditional variance under subdivision (f) of section 7.” In that view, the court was impelled to the conclusion that, “ No useful purpose would be served by having the Board hear the application for a variance de novo.” (263 App. Div. 352, 356, 358). We hold a different opinion.

Whatever the actual individual hardship may be, the case for which a variance is sought under section 7 (f) is by that section required to be an “ appropriate ” one. So, as we believe, the standard which enjoins the doing of “ substantial justice ” — though not explicitly expressed in section 7 (f) — should be taken to be fairly evident therein. (Of. the Reed case, supra, and Matter of Y. W. H. Assn. v. Board of Standards & Appeals, 266 N. Y. 270.) The return of the Board shows nothing on that head". But the Appellate Division said: The present improvement, which alone tends to make the land unproductive and unprofitable, was erected by the owner or its predecessor in title with a view to laying the basis for a subsequent plea of unnecessary hardship so as to obtain the variance. The present owner, if it was not a party to this plan, purchased the premises with full knowledge thereof.” (p. 355.)

The controversy thus presents a real question as to whether hardship antecedently incurred by an owner in order to give color to an undue prayer for relief under section 21 may appropriately be held to give rise to a larger privilege under the subsequently enacted section 7 (f). The Board should decide that issue in the first instance. It has not been called upon to do so. For all we know, the speculative enterprise of Bay Parkway Holding Corporation would not inevitably have been favored by the Board over the interests of the objecting owners of nearby properties, if section 7 (f) had been applied. Hence we are constrained to disagree with the decision of the Appellate Division. (See People ex rel. Smith v. Walsh, 240 N. Y. 606.)

We express no opinion respecting the constitutional questions that have been argued.

The orders should be reversed and the determination of the Board of Standards and Appeals annulled, without costs and without prejudice to any right of the respondent Bay Parkway Holding Corporation to invoke the provisions of section 7 (f) of the Zoning Resolution.

Lehman, Ch. J., Finch, Rippey, Lewis, Conway and Desmond, JJ., concur.

Ordered accordingly.


author: Per Curiam.

text:
    In the Matter of the Accounting of Ralph W. Dox, as Committee of the Person and Estate of Walter R. McGuinness, an Incompetent Person, Appellant. Buffalo State Hospital et al., Appellants. Metropolitan Life Insurance Company, Respondent.
    Argued January 6, 1943;
    decided March 4, 1943.

      John J. Bennett, Jr., Attorney-General (James A. Noonan of counsel) and Ralph W. Dox, in person, for appellants.

      Roy P. Ohlin for respondent.
   Per Curiam.

By statute, the custody of the person and the control and management of the property and affairs of an incompetent person and the use and disposition of his property are exclusively vested in the Supreme Court whose jurisdiction must he exercised by means of a committee appointed according to procedure provided in the Civil Practice Act (Civ. Prac. Act, §§ 1356-1358). There may be no interference with or disposition of his property until such jurisdiction is exercised and a committee appointed whose proceedings are subject continuously to proper and orderly supervision of the court (Matter of Schneider, 234 App. Div. 722; Matter of Rinn, 242 App. Div. 523; Finch v. Goldstein, 245 N. Y. 300; Matter of Frank, 283 N. Y. 106). The order of Special Term authorizing a committee to designate the Superintendent of Buffalo State Hospital to receive the property of the incompetent and for the discharge of the committee and his bond from liability upon making such designation was without authority of law.

The order should be affirmed, without costs.

Lehman, Ch. J., Loughran, Finch, Rippey, Lewis, Conway and Desmond, JJ., concur.

Order affirmed.


text:
    In the Matter of Ralph C. Tobin et al., Constituting the Board of Trustees of the Seventh Regiment Armory Building in the City of New York, Appellants, against Fiorello H. LaGuardia et al., Constituting the Board of Estimate of the City of New York, Respondents.
    Argued December 1, 1942;
    decided March 11, 1943.

      William C. Chanler, Corporation Counsel (Seymour B. Quel and Hortense M. Wittstein of counsel) for respondents.

      John F. O’Ryan and Charles H. George for appellants.
   Loughran, J.

This is a proceeding under article 78 of the Civil Practice Act. The petitioners are the Board of Trustees of the Seventh Begiment Armory Building in the city of New York. The defendants are the Board of Estimate of the city. In prior litigation between the parties, the defendants were ordered to pay to the petitioners moneys for the care and maintenance of the building of the regiment (276 N. Y. 34; 283 N. Y. 678.) The present petition demands a peremptory order directing the defendants to appropriate and pay to the petitioners the "sum of $19,300 as the reasonable expenses necessarily incurred by them in the conduct of the earlier litigation, plus accrued interest to September 1, 1941, of $3,616.35.

This demand is predicated upon section 70-a of the General Municipal Law (added L. 1941, ch. 573.) It is thereby provided: " Liability for expenses incurred in enforceing lawful required payment of moneys to state agencies. Notwithstanding any inconsistent provision of this chapter or of any law, general, special or local, whenever any municipal corporation is required by law to provide and pay any moneys to a corporate or other agency or instrumentality of the state for a public purpose, any reasonable expenses necessarily incurred by such an agency or instrumentality in compelling or enforcing by judicial proceeding payment to it of such moneys shall be a charge against such municipal corporation and such municipal corporation shall be liable therefor and shall pay the amount thereof upon certification and approval by the attorney-general, to such agency or instrumentality, provided vouchers therefor, properly certified and approved as required by this section, shall be presented to and filed with the chief fiscal officer of the municipal corporation within six months after final determination of such judicial proceedings in the case of any such expenses hereafter incurred, and in the case of any such expenses heretofore incurred within six months after this section as hereby added takes effect. The provisions of this section shall apply to and in the ease of such expenses heretofore incurred subsequent to January first, nineteen hundred thirty-two, by such a state agency or instrumentality. ’ ’

Pursuant to these provisions, the petitioners presented to the Attorney-General their verified claim against the city for $22,916.35. On October 2, 1941, the Attorney-General executed the following instrument:

“ Know all men by these presents, that I, John J. Bennett, Jr., Attorney-General of the State of New York, do hereby certify that I have examined the attached claim of the Board of Trustees of the Seventh Regiment Armory Building against the City of New York, for expenses necessarily incurred by said Board of Trustees in enforcing, by judicial proceeding, payment of moneys required by law to be paid to it for a public purpose by the City of New York, to wit: Eight Thousand Dollars ($8,000) per annum in lieu of rent for the years 1935, 1936, 1937, 1938, 1939 and 1940, for the armory of said regiment at 66th and 67th Streets and Fourth and Lexington Avenues, New York, N. Y.; the vouchers, consisting of cancelled checks and receipted bills, attached thereto, and the documents offered in proof of the reasonableness of such expenses, all being presented to me pursuant to the provisions of Chapter 573, Laws of 1941.
I further certify that, in my opinion, the attached claim and vouchers represent the reasonable expenses necessarily incurred by said Board of Trustees in compelling or enforcing, by judicial proceeding, payment of the moneys required by law to be paid to it for a public purpose, as described in said claim, and I hereby approve said claim and its payment.
Witness my hand and seal of office this 2nd day of October, 1941.
“ John J. Bennett, Jr. (L.S.)
Attorney-General ”

The original of this determination and copies of the documents therein referred to were filed by the petitioners with the Comptroller of the city on October 6,1941. He asked them to itemize their claim. They replied that payment was made mandatory by the statute. More than thirty days having thereafter elapsed without other result, this proceeding was commenced.

Special Term dismissed the petition on the ground that the provisions of section 70-a were not intended to impose any limitation or disability upon the city’s right to audit the claim or contest the reasonableness of the amount thereof.” (178 Mise. 567, 569.) The Appellate Division affirmed by a vote of three to two. We now have the case on this further appeal by the petitioners.

(1) The statute does not speak of any audit by a fiscal officer of the expenses thereby charged against municipal corporations. Contrariwise it says that the amount of such a charge — as certified and approved by the Attorney-General — shall be paid by the municipal corporation answerable therefor. Moreover, the statute directs that this course shall be pursued notwithstanding any inconsistent provision of any law, general, special or local.

There is no escape from words so plainly used. The power thereby exclusively conferred on the head of the law department of the State is scarcely less than power to hear and examine and thereupon to allow or to reject — i. e., power to audit. The provision for the filing df vouchers attests the same idea. The Attorney-General is in that form to confirm the items of the claim in aid of the convenience of the local disbursing authority and for the protection of the- public. Legislation of this kind is nothing new (29 Amer. & Eng. Encyc. of Law, 2d ed., pp. 1079, 1080, 7 C. J. S. p. 1274.) The propriety thereof is in this instance quite apparent. Power to adjudicate the amount to be paid by a municipal corporation in consequence of its resistance to a lawful demand could not be left to its own fiscal officer without making Mm the judge of the case against his principal. That power was here not suffered to stand: it was unmistakably displaced. (Cf. People ex rel. Rand v. Craig, 231 N. Y. 216.)

We hold, then, that the Comptroller of the city had no jurisdiction to pass upon the reasonableness of the award made by the Attorney-General to the petitioners.

(2) In their status as the Board of Trustees of the Seventh Regiment Armory Building, they hold this building solely and exclusively for the public purposes of the said regiment,” and are charged with the duty of maintaining and improving the same for the public purposes of said regiment ’ ’ (L. 1893, ch. 518). It is clear enough that as such trustees the petitioners are an “ agency or instrumentality of the state for a public purpose ” within the meaning of section 70-a.

(3) The retroactive provisions of the statute are challenged by the city as an attempt to authorize the employment of municipal funds in furtherance of private enterprise contrary to section 1 of article VIII of the Constitution of the State. We cannot adopt this assumption of the absence of any honorary or other obligation of a mumcipal corporation to reimburse a State agency for reasonable expenses necessarily incurred in the enforcement of payment to the agency of moneys lawfully due from the corporation for a public purpose. As we read the authorities, the statute is well within the legislative province to compel public corporations to discharge moral duties. (See 1 Dillon on The Law of Municipal Corporations, [5th ed.] § 123; 1 Cooley on Constitutional Limitations [8th ed.] p. 486 et seq.)

(4) Nor can we follow the city on the proposition that as here applied the statute offends the constitutional prohibition of mumcipal indebtedness for non-municipal purposes. (State , Const., art. VIII', § 2.) The housing of the Seventh Regiment within the city conduces to the maintenance of law and order among its people. Such primary local effect is more than sufficient to make a public purpose municipal in character. (See 3 Dillon on The Law of Municipal Corporations, [5th ed.j § 1293.)

(5) Interest allowed to the petitioners was computed by them at the rate of six per cent from the date of accrual of the claim (October 2, 1941), instead of at the applicable four per cent rate prescribed by section 3-a of the General Municipal Law. The amount of the interest item is to be revised accordingly, as the petitioners concede.

The orders should be reversed and the matter remitted to the Special Term for further disposition not inconsistent with this opinion, without costs.

Lehman, Ch. J., Finch, Rippey, Lewis, Conway and Desmond, JJ., concur.

Orders reversed, etc. (See 290 N. Y. 743.)


text:
    Josephine A. Harrington, Respondent, v. Robert P. Harrington, Appellant.
    Argued January 14, 1943;
    decided March 11, 1943.

      Edward D. Siemer for appellant.

      John J. McInerney for respondent.
   Lehman, Ch. J.

The parties were married in 1929. A son' was born to them in 1932. They have lived apart since 1934 and during that time the infant son remained by agreement of the parties in the care and general custody of the plaintiff and was supported by her, but the defendant was accorded the right to visit the boy at reasonable hours and to have the boy live with him at stipulated times each year. The terms' of this agreement were embodied in an order made by the! court, adjourning indefinitely the hearings in a proceeding’ which the defendant had brought to obtain custody of the' child.

In 1940 the plaintiff brought this action for separation on the ground of cruel and inhuman treatment and also on the ground of abandonment. The plaintiff did not ask an allowance for her support or the support of the infant child, but did ask that the child be placed in her sole custody. The defendant in his answer pleaded a counterclaim for separation on the ground of desertion. After trial the court filed a decision with findings, of fact and conclusions of law in favor of the defendant. The' court found among other things:

“ Fourth : That during the early part of February, 1934, the plaintiff taking said child with her, left the family domicile then maintained by the defendant on Shoshone Drive in the City of Buffalo, N. Y., and that the plaintiff did not return to the family domicile maintained by the defendant on said Shoshone Drive in the City of Buffalo, N. Y., nor did she offer to return thereto, but wrongfully and without just cause abandoned and deserted the defendant and has been continuously absent from the defendant, his bed and board and the family domicile, and has persistently refused to perform her marital duties to the defendant since said early part of February, 1934, or to permit the said child to return to the family domicile and live with the defendant, all without the consent of the defendant.
“ Fifth: * * * that the best interest and advantage of said Robert P. Harrington, Jr., will be served by the directions for his custody contained in the third and fourth conclusions of law which follow; * * *.”

The third and fourth conclusions of law contained directions that the defendant is entitled to the care, custody and control of the infant child during the school year and that the plaintiff is entitled to the care, custody and control of the child during each summer vacation and during alternate Christmas and Easter vacations and that each parent should have the right to visit the child at all reasonable times while the infant is in the care, custody and control of the other parent.

The plaintiff appealed to the Appellate Division from the judgment entered upon the decision of the trial court. The Appellate Division reversed the findings of fact numbered Fifth ” and also some other findings which are evidentiary in character and not very important in the consideration of the problems presented upon this appeal. It also reversed conclusions of law numbered Third ” and Fourth.” The Appellate Division made one new finding of fact. That the best interest and advantage of Robert P. Harrington, Jr., will be served by placing him in the care, custody and control of the plaintiff, Josephine A. Harrington, for nurture and education.” The judgment was modified to the extent “ that the plaintiff, Josephine A. Harrington, have the care, custody and control of Robert P. Harrington, Jr., an infant, the issue of said marriage, with leave to apply to the Special Term for an order for maintenance of said infant,” and as modified the judgment was affirmed. The defendant has appealed to this court from the order of the Appellate Division in so far as it modifies the judgment.

The new finding of the Appellate Division, like the contrary finding and conclusions of the court at Special Term, is a mixed finding of fact and conclusion of law. We may upon this appeal review the new finding of the Appellate Division and we may determine whether the weight of evidence lies with the finding of the Appellate Division or the contrary finding of the court at Special Term. No other question is presented upon this appeal. Unreversed findings of fact supported by substantial evidence are now conclusive. Thus, in balancing the opposing findings that the best interests and advantage of the infant will be served by the directions given by the court at Special Term or by the directions given by the Appellate Division, we may not disregard the weight of the unreversed finding that the plaintiff has ‘ ‘ wrongfully and without just cause abandoned and deserted the defendant ” and has “ persistently refused to perform her marital duties to the defendant ” and has refused “ to permit the said child to return to the family domicile and live with the defendant. ’ ’

The children of a broken marriage are not responsible for the breach, yet suffer through it. The court must then provide for the care, custody and control of the children, in the conditions which exist, as wisely as it can. Apportionment between the parents of the blame for the broken marriage may not be the decisive factor in the determination. (People ex rel. Herzog v. Morgan, 287 N. Y. 317). Nonetheless, the past conduct of the parents, the unwillingness of one or both to carry out their marital obligations are factors which may not be disregarded in determining which parent will provide the better home. Here the father can give companionship and paternal guidance which might be of advantage to his son, but on the other hand the child has lived with the mother since its birth; and she has lavished affection upon him and the trier of the facts might find that in her home the child will have the care of a loving, though perhaps unwise, mother and has had material advantages which the father cannot offer. The trial judge, seeing and hearing the parties and talking to the child, has after careful consideration provided for his custody in manner he thought wise and in the child’s best interest. The Appellate Division has placed the child in the sole care, custody and control of this plaintiff though she has refused to perform her marital duties; and the court has deprived the father, who is not at fault, even of the rights, which he previously enjoyed by agreement, to visit his son at reasonable hours and to have the son live with him at specified times. That finding awarding the exclusive custody to the mother is, we hold, against the great weight of the evidence and must be reversed.

It does not conclusively follow from reversal of the new finding of the Appellate Division that opposing findings of the trial court which the Appellate Division has reversed must be reinstated. The determination of the proper custody of the child involves the wise exercise of discretion. There are many details which must be determined in the exercise of that discretion. The Appellate Division has the power to review the discretion exercised by the trial court and if dissatisfied in whole or in part with the determination of the trial court it may reverse and either remit the case to the trial court for further consideration or it may itself'm the exercise of plenary discretion vested in it determine in detail the provisions for the custody of the child which it deems wise.

We have, as we have said, the right to review the new finding and to- reverse it if, in our opinion, it is not supported by the weight of the evidence. We have no power in any other respect to pass upon questions of fact. Ordinarily where the Appellate Division reverses a finding of fact and then makes a contrary finding, a reversal by this court of the new finding of fact of the Appellate Division logically requires the reinstatement of the contrary finding of fact by Special Term. That is true in all cases where the only choice reasonably open to a trier of the facts lies between the finding of the trial court and the finding of the Appellate Division.

Here a much wider choice was open to the trier of the facts, and either the trial court, or the Appellate Division in the exercise of discretionary power vested in the Supreme Court might have made provisions for the care, custody and control of the infant child different from the provisions deemed wisest by either the trial court or the Appellate Division. Though in our opinion the new finding of the Appellate Division is against the weight of evidence it does not necessarily follow that the finding of the trial court in its present form is wise. The Appellate Division has determined that the trial court did not exercise its discretion wisely. We conclude that though the new finding is not in accord with the weight of evidence, since a wide room for exercise of discretion still exists and the Appellate Division in addition to making the new finding of fact, has determined that the exercise of discretion by the trial court was not wise, a new trial must be ordered at Special Term to consider again the wisest provision for the care, custody and control of the infant child. It may if so advised take new evidence on that.

The judgment of the Appellate Division and that of the Special Term in so' far as appealed» from should be reversed and a new trial granted in accordance with this opinion.

Loughran, Finch, Rippey, Lewis, Conway and Desmond, JJ., concur.

Judgment accordingly.