author: Conway, J. Finch, J.

text:
    In the Matter of S. H. Kress and Company, Appellant, against The Department of Health of the City of New York, Respondent.
    Argued March 7, 1940;
    decided April 26, 1940.

      Joseph M. Lonergan for appellant.
    The city cannot prohibit what the State specifically permits nor can the city permit what the State prohibits. (Village of Fleischmanns v. Hyman, 164 Misc. Rep. 175; People ex rel. Kieley v. Lent, 166 App. Div. 550; Lechner v. Village of Newark, 19 Misc. Rep. 452; People v. Gilbert, 68 Misc Rep. 48; Wood v. City of Brooklyn, 14 Barb. 425; Mayor v. Nichols, 4 Hill, 209; Schieffelin v. Dolan, 204 App. Div. 351; Jewish Consumptives Relief Society v. Town of Woodbury, 230 App. Div. 228; 256 N. Y. 619; Carvallo v. Cooper, 239 N. Y. Supp. 436; Lo Tempio v. City of Niagara Falls, 166 Misc. Rep. 338; State v. Brittain, 89 N. C. 574; People v. N. Y. C. & H. R. R. R. Co., 159 App. Div. 329; City of New York v. Maltbie, 274 N. Y. 90; Matter of Bushell v. City of New York, 242 App. Div. 366; Robertson v. Zimmerman, 268 N. Y. 52.)

      William C. Chanler, Corporation Counsel (Edmund L. Palmieri and Francis J. Bloustein of counsel), for respondent.
    The Board of Health acted within the reasonable and proper exercise of its authority in forbidding the manufacture of frozen desserts in cellar premises. (People v. French Bottling Works, 259 N. Y. 4; Banded v. City of New York, 69 Misc. Rep. 93; 144 App. Div. 938; People v. New York Steam Corp., 278 N. Y. 617; Price v. Illinois, 238 U. S. 446; Tenement House Department v. Moeschen, 179 N. Y. 325; 203 U. S. 583; City of Rochester v. Gutberlett, 211 N. Y. 309; South Carolina State Highway Dept. v. Barnwell Bros., Inc., 303 U. S. 177.) There is no conflict between the State Department of Agriculture and Markets and the Board of Health of the City of New York. (Cherubino v. Meenan, 253 N. Y. 462; Polinsky v. People, 73 N. Y. 65; People v. Steinhardt, 245 N. Y. 553; People ex rel. N. Y., N. H. & H. R. R. Co. v. Willcox, 200 N. Y. 423; Crossman v. Lurman, 192 U. S. 189; Lang’s Creamery, Inc., v. City of Niagara Falls, 251 N. Y. 343; People v. Frudenberg, 155 App. Div. 199; 209 N. Y. 218; People ex rel. Lodes v. Department of Health, 189 N. Y. 187.)
   Conway, J.

By article 4-A, sections 71-a to 71-j, of the Agriculture and Markets Law (Cons. Laws, ch. 69) the State has set up a complete and comprehensive scheme for controlling the manufacture and sale of frozen desserts, which by definition include ice cream. Those sections provide, among other things, for the application for, issuance of and revocation or suspension of licenses and, finally in section 71-j, for the adoption and promulgation by the Commissioner of the Department of Agriculture and Markets, after inquiry and public hearing, of rules and regulations to supplement and give full effect to the provisions of the article. The section then continues: Such rules and regulations, among other things, shall establish sanitary regulations pertaining to the manufacture and distribution of frozen desserts, including the sanitary condition of buildings, grounds, and equipment where frozen desserts are manufactured, the sanitary condition of persons in direct physical contact with frozen desserts during manufacture, the sanitary condition of containers in which frozen desserts are held or shipped and the sanitary conditions of premises, buildings, surroundings, and equipment where frozen desserts are sold. Such rules and regulations shall be filed and open for public inspection at the principal office of the department, and shall have the force of law.”

Pursuant to the authority so given him by section 71-j, the Commissioner adopted Regulation 6 of the Rules and Regulations Relative to Frozen Desserts which provides that there shall be no manufacturing of frozen desserts in a cellar of any building in the State, unless the Commissioner shall grant special permission therefor.

The statute, and the rules and regulations adopted in pursuance thereof, which have the force of law, thus cover in detail the conditions under which frozen desserts are to be manufactured and by their terms cover, and were intended to cover, the entire field.

The petitioner-appellant is the owner of a department store at 444 Fifth avenue, Manhattan, New York city. It applied to the Commissioner of Agriculture and Markets for a license to manufacture frozen desserts in the cellar of its premises for sale at retail. Written permission was granted in February, 1939.

Petitioner then applied to respondent for a permit to manufacture and sell at retail, frozen desserts. That application was denied in March, 1939. Before denying it the Commissioner of Health wrote:

“ In a matter very similar to the one described by you, the Board of Health on September 13, 1938, denied permission to manufacture frozen desserts in the cellar of premises then in question.
“ In keeping with this ruling, permission for the manufacture of frozen desserts in the cellar at 444 Fifth Avenue, Manhattan, therefore, cannot be granted.”

Petitioner had previously applied to respondent for a permit to conduct a bakery for the baking of cakes and rolls in its cellar and that had been granted.

The permit to manufacture frozen desserts was refused by respondent because of a regulation, numbered 5, which was adopted in accordance with the power conferred by the Legislature in section 1172 of the former city charter (L. 1901, ch. 466, as amd.) and section 558, subdivision b, of the present charter (effective January 1, 1938). That section authorized the respondent to adopt sections of the Sanitary Code and regulations thereunder “ not inconsistent with the constitution or laws of this state.” Similar language is contained in New York State Constitution, article 9, section 12. Regulation 5 prohibited the manufacture or exposing of frozen desserts in a cellar, with power in the Board of Health to make an exception under certain conditions as to cellars used for such purpose or purposes prior to July 11, 1933.

It is conceded in the answering affidavits of the sanitary engineer and deputy commissioner of respondent that the cellar has a cement floor, walls and ceiling; that the walls are covered with white tile; that the room in which the manufacture is to be carried on is ventilated by artificial means; that the air therein is cleaned, heated in the winter and cooled in the summer; that the room is rat-proofed; that it is “ without an equal in the city.”

The question presented then is, may the city on these facts forbid that which the State has specifically permitted. A municipality which is empowered to adopt health regulations may, in spite of general regulations by the State, adopt additional regulations or requirements where there is a real distinction between the city and other parts of the State. They must be based upon special conditions existing in the city. That is not the case here. The State has gone over the whole field. The State has designated an official who is empowered to grant a permit after he has made an inspection and found the premises to be sanitary. After the issuance of such a permit nothing remains to be done. The State having covered the whole field, the city may not make regulations of its own, inconsistent with the laws of the State, and prohibit the manufacture of frozen desserts in a cellar, even though the cellar is sanitary and the manufacture of frozen desserts therein has been authorized by the State.

A general grant of local administrative power never confers authority to abrogate a general State statute.

In Jewish Consumptives’ Relief Society v. Town of Woodbury (230 App. Div. 228; affd., 256 N. Y. 619) a town ordinance, in effect prohibiting the erection of a tuberculosis hospital within the town limits, was held void as in contravention of the Public Health Law (Cons. Laws, ch. 45), a State statute. Presiding Justice Lazansky said (on p. 234): The authority of a municipality to abrogate State law is never implied or inferred. It is only derived from express grant, never from a general grant of power. A State policy may not be ignored by a municipality unless it is specifically empowered so to do in terms clear and explicit.”

In People ex rel. Kieley v. Lent (166 App. Div. 550; affd., 215 N. Y. 626) the court said: “ The intent that municipal corporations by ordinance can supersede the State law will not be inferred from general grants of power, nor will such authority be held to exist as an implied or incidental right. (Dillon Mun. Corp. [5th ed.] § 632.) As all municipal authority comes from the Legislature, the provisions of municipal charters, however broad, are subject to such restrictions as may be imposed by general laws.” (See, also, City of New York v. Maltbie, 274 N. Y. 90; People v. County of Westchester, 282 N. Y. 224.)

No case in this court is contrary to what we have said here.

It is unnecessary in view of the conclusion we have reached, to pass upon the question whether Regulation 5 is unreasonable in view of the exception which the Board of Health is thereby authorized to grant.

The orders should be reversed, with costs in all courts, and the application granted.

Finch, J.

(dissenting). There is no conflict between the State Agriculture and Markets Law and the local regulation of the Board of Health of the City of New York. The Agriculture and Markets Law in general terms intrusts to the Commissioner of Agriculture and Markets the power to adopt rules and regulations establishing the “ sanitary regulations pertaining to the manufacture and distribution of frozen desserts, including the sanitary condition of buildings, grounds, and equipment where frozen desserts are manufactured ” (§ 71-j). Pursuant to such authority, the Commissioner has promulgated a general regulation to the effect that without his written permission “ no cellar shall be used as a frozen desserts plant ” (Regulation 6). Here permission has been given by the State Commissioner. This consent merely removes the negative . restriction prescribed by the State. It makes no affirmative grant to the licensee. In other words, the State laws and regulations do not say, " If you secure the permission of the (Commissioner, you may manufacture frozen desserts anywhere;” but rather, “ In view of the high degree of danger to the public health occasioned by the manufacture of frozen desserts, certainly you may not manufacture them in cellars without the Commissioner's approval in addition to whatever the appropriate local regulations, not to the contrary, may ordain.” Neither the statute nor the regulation of the Commissioner contains any indication, express or inherent, of an intent to preclude additional regulation of conditions of manufacture by localities primarily interested therein when such additional regulations do not render impossible the enforcement of those prescribed by the State authority. Nor should such an intent be implied in a matter of so vital importance to the health of the inhabitants of a great metropolis. (See People ex rel. N. Y., N. H. & R. R. R. Co. v. Willcox, 200 N. Y. 423, 434.) Consequently, the regulation of the City Board of Health prohibiting all manufacture of frozen desserts in cellars within the city should not be held inconsistent with the State law.

A complete answer to the objection of -unreasonableness is the obvious fact that ice cream and frozen desserts are easily eontaminable, and when contaminated, are highly deleterious to the health of the consumer. A regulation of the Board of Health in the City of New York, therefore, which prohibits the manufacture of such products below the street level in order to eliminate the general possibility of the danger of impurities arising from sewers or other underground channels, would seem eminently reasonable. Nor should the fact that in this particular instance unusual precautions have been taken so as to minimize danger from the anticipated sources, render the prohibition unreasonable. Since possible danger to the health of the public clearly exists, wide latitude must be accorded to local Boards of Health to counteract this danger and mere hardship in an individual case is no ground for holding invalid an appropriate enactment well within the local police power. (Bayside Fish Flour Co. v. Gentry, 297 U. S. 422; Chicago, B. & Q. R. R. Co. v. Nebraska, 170 U. S. 57; Powell v. Pennsylvania, 127 U. S. 678; 11 Am. Jur. 802.)

The order should be affirmed.

Lehman, Ch. J., Loughran, Rippey, Sears and Lewis, JJ., concur with Conway, J. ; Finch, J., dissents in opinion.

Orders reversed.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    In the Matter of the Claim of Jerome Nayor, Respondent, against Harwick Trucking Corporation; State Insurance Fund, Appellant. State Industrial Board, Respondent.
    Submitted February 28, 1940;
    decided April 26, 1940.

      George J. Hayes and Bernard Botein for appellant.
    The award cannot be sustained on the theory of occupational disease pursuant to paragraph 28 of subdivision 2 of section 3 of the Workmen’s Compensation Law, inasmuch as the record affirmatively shows that the alleged disability was not the result of an occupational disease within the meaning and intent of the law. (Matter of Lerner v. Rump Bros., 241 N. Y. 153; Matter of Goldberg v. 954 Marcy Ave. Corp., 276 N. Y. 313; Madeo v. Dibner & Bros., 121 Conn. 664; Galluzzo v. State, 111 Conn. 188; Dill v. Plainview N. Y. Co., 217 Iowa, 827; Victoria Sparkler Co. v. Francks, 147 Md. 368; McNeely v. Carolina Asbestos Co., 206 N. C. 568.)

      John J. Bennett, Jr., Attorney-General (Roy Wiedersum of counsel), for State Industrial Board, respondent.
    The claimant’s disability was due to an occupational disease within the meaning of the Workmen’s Compensation Law. (Matter of Lurye v. Stern Bros. Dept. Store, 275 N. Y. 182; Matter of Goldberg v. 954 Marcy Ave. Corp., 276 N. Y. 313; Matter of Foster v. Gillinder Bros., Inc., 278 N. Y. 348; Matter of Bettcher v. duPont de Nemours & Co., 255 App. Div. 734; Matter of Martin v. Shattuck Co., 255 App. Div. 739; Matter of Soukup v. Friedman Marble & Slate Works, 255 App. Div. 249; Rhodier v. Frazier Dadd Const. Co., 256 App. Div. 863; Matter of Brennan v. Hockensmith Const. Co., 256 App. Div. 870; 281 N. Y. 703; Matter of Koprda v. Cadillac Motor Car Division & Royal Indemnity Co., 258 App. Div. 765.)
   Per Curiam.

On November 27, 1937, the claimant, while driving an open motor truck in the course of his employment, suffered a right facial paralysis. There was expert testimony that the ailment was a disorder known to the medical profession as “ Bell’s palsy ” and that it may be caused by exposure to' cold air. The Board made an award for occupational disease upon a finding that the claimant’s injury was caused by his exposure to drought, cold and wind necessitated by his employment,

Appellant carrier contends that the finding was precluded by the fact that on the occasion in question the temperature ranged from forty-four to forty-nine degrees. We may not assume that Bell’s palsy ” cannot result from exposure to temperature of that degree. Disregarding the claimant’s testimony as to a concomitant trauma (which the Board ignored), the evidence, we think, is sufficient to support the finding of occupational disease. (Matter of Goldberg v. 954 Marcy Corp., 276 N. Y. 313. Cf. Matter of Lurye v. Stern Bros. Dept. Store, 275 N. Y. 182.)

The order should be affirmed, with costs.

Lehman, Ch. J., Loughran, Finch, Bippey, Sears, Lewis and Conway, JJ., concur.

Order affirmed.


text:
    Rose Adler, Appellant, v. Atlas Brick Corporation, Respondent. Greyhound Holding Company, Inc., Respondent.
    Argued March 12, 1940;
    decided April 26, 1940.

      Arthur B. Ewig and Samuel Sootin for appellant.
    The inference to be drawn from the instruments in evidence is that the realty mortgages were not intended to cover chattels. (East River Sav. Bank v. 671 Prospect Ave. Holding Corp., 280 N. Y. 342; Manufacturers Trust Co. v. Peck-Schwartz Realty Corp., 277 N. Y. 283; Matter of Benevolent Elks, 69 Fed. Rep. [2d] 816.)

      Robert D. Steefel, Sol M. Stroock, Peter I. B. Lavan, Milton Socolof and Sherwood B. Speed for respondents.
    By reason of claimant’s $16,000 and $10,000 mortgages respectively, it acquired good title to the chattels in question prior to appellant’s judgment and levy of execution. (Cohen v. 1165 Fulton Ave. Corp., 251 N. Y. 24; Shelton Holding Corp. v. 150 E. 48th St. Corp., 264 N. Y. 339; President & Directors of Manhattan Co. v. Newberry, 265 N. Y. 588; President & Directors of Manhattan Co. v. Ellda Corp., 245 App. Div. 625; Prudential Ins. Co. v. Sanford Real Estate Corp., 246 App. Div. 567; Herold v. Cohrone

      Boat Co., 249 App. Div. 318; Matter of Downtown Athletic Club of New York City, Inc., 18 Fed. Supp. 712.) Appellant cannot urge in this court that the realty chattel mortgages were not intended to cover chattels. (East River Sav. Bank v. 671 Prospect Ave. Holding Corp., 280 N. Y. 342; Glaser v. Glaser, 276 N. Y. 296; Central Hanover Bank v. Eisner, 276 N. Y. 121; National Cash Register Co. v. Remington Arms Co., 242 N. Y. 99.)
   Per Curiam.

As between the parties, at least in the absence of intervening equities, whether or not a mortgage of real property also covers personal property, is a question of intent and that is a question of fact. In East River Savings Bank v. 671 Prospect Ave. Holding Corp. (280 N. Y. 342) we held that, since a question of fact was presented, summary judgment should not have been granted. Here there has been a trial on the merits and a finding that the parties intended that the mortgages cover personal property.

The order of the Appellate Division affirming the order of the Supreme Court of Columbia county dated May 2, 1938, and entered May 4,1938, should be affirmed, with costs.

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

Order affirmed, etc.


author: Finch, J.

text:
    In the Matter of the Liquidation of National Surety Company. William F. Laughlin, as Administrator de Bonis Non of the Estate of Wesley Cooper, Deceased, Appellant; Louis H. Pink, Superintendent of Insurance of the State of New York, as Liquidator of National Surety Company, Respondent.

      Argued April 9, 1940;
    decided May 28, 1940.

      Francis X. Nestor for appellant.
    The judgment of the Chancery Court of Mississippi is valid in all respects. (Clark v. Williard, 292 U. S. 112; McGoon v. Scales, 76 U. S. 23; Sinnott v. Hanan, 214 N. Y. 454; The Greyhound, 68 Fed. Rep. [2d] 832; Missouri State Life Ins. Co. v. Langreder, 87 Fed. Rep. [2d] 586; Rawlings v. American Oil Co., 173 Miss. 683; Schreier v. Cummings, 251 App. Div. 16; Douglas v. Perlstein, 170 Misc. Rep. 561; Giovannangeli v. Levich & Pollach, Inc., 134 Misc. Rep. 245; Universal Life Ins. Co. v. Catchings, 169 Miss. 26.) Article XI of the New York Insurance Law cannot be construed to abrogate contractual rights acquired through contracts made in other States. (U. S. Mortgage & Trust Co. v. Ruggles, 258 N. Y. 32; Clark v. Williard, 292 U. S. 112; Oklahoma Packing Co. v. Oklahoma Gas & Electric Co., 100 Fed. Rep. [2d] 770; Hanover Fire Ins. Co. v. Harding, 272 U. S. 494; Neirbo Co. v. Beth. Shipbuilding Corp., 60 Sup. Ct. Rep. 153; Bagdon v. Phil. & Reading C. & I. Co., 217 N. Y. 432.)

      Morris Amchan and Wendell P. Barker for Department of Banking of State of Nebraska, amicus curiæ.

    So long as the procedural requirements of the State of New York with respect to filing of claims are complied with, a claimant has a right to secure an adjudication of the merits of his claim in a jurisdiction other than the State of New York. (Clark v. Williard, 292 U. S. 112; Dempsey v. Pink, 92 Fed. Rep. [2d] 572; Mutual Res. Fund Life Assn. v. Phelps, 190 U. S. 147.) The State of Mississippi as well as any other State similarly. situated had the power to require the National Surety Company, as a condition to transacting business in such State, to continue the statutory agency of such company for service of process after the dissolution of the company in the State of its domicile. (Lafayette Ins. Co. v. French, 18 How. [U. S.] 404; St. Clair v. Cox, 106 U. S. 350; Mutual Reserve Fund Life Assn. v. Phelps, 190 U. S. 147; Connecticut Mutual Life Ins. Co. v. Spratley, 172 U. S. 602; Washington ex rel. Bond & G. & T., Inc., v. Superior Court, 289 U. S. 361; Gilbert v. Burnstine, 255 N. Y. 348; Clark v. Williard, 292 U. S. 112.)

      J. Francis Lynch and Edward F. Keenan for respondent.
    On the entry of the order of liquidation, dated June 1, 1934, the corporate charter of National Surety Company was dissolved and its corporate existence terminated. (National Surety Co. v. Cobb, 66 Fed. Rep. [2d] 323.) All actions either pending or thereafter instituted abated upon the dissolution of National Surety Company and judgments subsequently entered are null and void. (People v. Globe Mut. L. Ins. Co., 91 N. Y. 174; Jemison v. C. S. Bank, 122 N. Y. 135; Susquehannah Line, Inc., v. Auditore, 223 App. Div. 585; Relfe v. Rundle, 103 U. S. 222; Canada Southern Ry. Co. v. Gebhard, 109 U. S. 527; Martyne v. American Union Fire Ins. Co., 216 N. Y. 183; First Nat. Bank v. Colby, 88 U. S. 609; Pendleton v. Russell, 144 U. S. 640; People v. Knickerbocker Life Ins. Co., 106 N. Y. 619; Oklahoma Natural Gas Co. v. Oklahoma, 273 U. S. 257; Rodgers v. Adriatic Fire Ins. Co., 148 N. Y. 34; Ewen v. American Fidelity Co., 271 Fed. Rep. 848.) The statutes of the State of Mississippi do not continue the corporate existence of a foreign insurance corporation dissolved in the State of incorporation. (Rawlings v. American Oil Co., 173 Miss. 683; McCulloch v. Norwood, 58 N. Y. 562; Hollman v. Bennett, 44 Miss. 322; Jones v. Jones, 72 Fed. Rep. [2d] 829; Psota v. Long Island R. R. Co., 246 N. Y. 388; Dean v. Met. El. Ry. Co., 119 N. Y. 540.) Service of process on statutory agent of foreign corporation after dissolution of corporate existence in State of incorporation is a nullity. (National Surety Co. v. Cobb, 66 Fed. Rep. [2d] 323; United States Truck Co. v. Penn. Surety Corp., 259 Mich. 422;
      Robinson v. Mutual Reserve Life Ins. Co., 182 Fed. Rep. 850; 189 Fed. Rep. 347.)
   Finch, J.

A creditor, residing in the State of Mississippi, has filed in this State in a liquidation proceeding involving assets of National Surety Company a sworn proof of claim in support of a debt arising in Mississippi. The only support for the proof of claim is a judgment entered by default in the State of Mississippi reciting proof of service in the State of Mississippi upon the Superintendent of Insurance of that State as the alleged representative of the National Surety Company previously dissolved in the State of New York.

On September 14, 1932, National Surety Company executed a bond in the sum of $6,000 for an administrator of the goods, chattels, etc., of a decedent in favor of the State of Mississippi, conditioned that the administrator should faithfully discharge his duties as administrator. The administrator received the sum of $5,847, the proceeds of a war risk insurance policy covering the life of decedent as a soldier of the United States in the World war.

On June 1, 1934, the Superintendent of Insurance of the State of New York was directed by order of the Supreme Court to take possession forthwith of the property and liquidate the business and property of the National Surety Company. This order fixed April 1, 1935, as the last day for the filing of claims, finally dissolved the company, and provided for the vesting of title in the Superintendent as liquidator of all of the property, contracts and choses in action of the company, and permanently enjoined all suits and proceedings against the company.

On April 5, 1934, the administrator was removed and an administratrix de bonis non substituted, and on February 18, 1935, a proof of claim was filed with the liquidator of the National Surety Company in this State in the sum of $1,847, with interest, wherein was recited the removal of the administrator, the appointment of the administratrix, and that $4,000 of said $5,847 had been distributed but that the administrator had been directed to pay over to the administratrix the remaining sum of $1,847, which he had failed to do. On September 11, 1935, this administratrix was removed and another administrator appointed. On October 3, 1935, the claimant filed with the liquidator an amended proof of claim alleging that the distribution of the $4,000 was made to one not the widow, and that Minnie-. Cooper was the lawful surviving widow of decedent and! entitled to the entire estate, and the claim as amended was’ then made for the entire amount of the original estate as received by the administrator.

On March 12, 1936, an action was commenced in the State of -Mississippi by Minnie Cooper and others, as plaintiffs, against the National Surety Company, alleging due service of summons obtained by service on the Superintendent of Insurance of the State of Mississippi, and thereafter a final decree on default was taken, which decree also recited the appointment of the original administrator, his alleged wasting of the estate, adjudged that Minnie Cooper was the sole distributee of the estate, and that she was entitled to recover from the National Surety Company the amount of the original estate, with interest, namely, the sum of $6,709.52, for which sum the claimant was forthwith directed to file a claim with the Superintendent of Insurance of the State of New York, as liquidator of the National Surety Company. The liquidator recommended the disallowance of the amended claim, to which claimant filed objections. The issues thus raised were referred to a referee to hear and report. No evidence was offered by claimant on the hearing before the referee in substantiation of the amended claim, except the production of the judgment taken on default in the State of Mississippi through service upon the Superintendent of Insurance of the State of Mississippi as representing the National Surety Company theretofore dissolved in the State of New York. It is conceded that prior to the issuance of the administrator's bond involved herein National Surety Company had complied with the laws of Mississippi governing the administration of foreign insurance companies which, among other things, appointed the Superintendent of Insurance of the State of Mississippi agent for the service of process as required by the Mississippi statutes, including a term of three years beyond dissolution, and that National Surety Company had been duly licensed to engage in business in the State of Mississippi..

The Special Term confirmed the disallowance of the claim by the referee and the Appellate Division unanimously affirmed.

Several objections are presented to the allowance of the claim. Of these only the first question need be considered, namely, is the final decree entered in an action instituted in the State of Mississippi against the National Surety Company, after its dissolution in the State of New York, binding on the liquidator in the State of New York and valid against assets in his possession in this State?

At common law all actions, either pending or thereafter instituted, abate upon the final dissolution of a corporation and judgments subsequently entered against the dissolved company are null and void. Also all persons who had contracted or done business with the dissolved corporation are charged with knowledge of the statutes governing the termination of its corporate existence upon dissolution, and of the statutes governing its liquidation, and are bound thereby. (People v. Globe Mut. Life Ins. Co., 91 N. Y. 174, 179; Jemison v. Citizens Sav. Bank, 122 N. Y. 135, 140.) This is likewise true as to persons outside of the State of the incorporation of the dissolved company. (Relfe v. Rundle, 103 U. S. 222, 225; Canada Southern Ry. Co. v. Gebhard, 109 U. S. 527, 537; Martyne v. American Union Fire Ins. Co., 216 N. Y. 183, 193.)

Under the above circumstances, since the statutes of New York governing the dissolution of delinquent insurers provide that an order may be obtained directing the immediate cessation of the corporate existence, the corporate life of National Surety Company ceased for all purposes everywhere upon the obtaining of such an order by the Superintendent of Insurance and the common-law rule became applicable that upon dissolution of the corporation all actions pending or thereafter instituted abate and judgments thereafter entered are null and void. (Pendleton v. Russell, 144 U. S. 640, 645; First National Bank v. Colby, 88 U. S. 609, 615; Rodgers v. Adriatic Fire Ins. Co., 148 N. Y. 34, 38.)

Claimant contends, however, that, because the State of New York has provided in its General Corporation Law (Cons. Laws, ch. 23) that the corporate existence of a dissolved company may be continued for a time for the purpose of winding up its affairs, and the institution of actions, either for or against the corporation, and making the directors, unless others are designated, trustees for the benefit of creditors of the corporation, therefore the State of New York has extended for the purposes of suit the life of National Surety Company in the State of Mississippi where a similar statute has been enacted, so that the service of the summons upon the Superintendent of Insurance in the State of Mississippi was valid in accordance with the statutes of New York. (General Corporation Law, § 29.) A complete answer to the above contention is that this very General Corporation Law upon which reliance is placed likewise provides that, if there be in any other corporation law a provision which conflicts with any provision of the General Corporation Law, the former shall prevail. (General Corporation Law, § 6.) In this connection the Insurance Law of the State of New York makes special provision for the liquidation of the business of a delinquent insurer. (Cons. Laws, ch. 28, § 407, now § 525, in substance.) The provisions of section 29 of the General Corporation Law, continuing the corporate existence, and those of former section 407 of the Insurance Law, authorizing the immediate dissolution of the corporate existence, constitute a definite and substantial inconsistency between these two statutory enactments. Such an inconsistency, being material, would appear to be the statutory conflict provided for by the provisions of section 6 of the General Corporation Law. In addition, there are other provisions of the Insurance Law which appear inconsistent and in conflict with the - continuation of the corporate existence as provided for in the General Corporation Law. See, for example, where section 29 provides for the continuance of corporate existence for the purpose of collecting and distributing corporate assets and with authority to sue and be sued in the corporate name, while the Insurance Law (§ 404, now § 514, in substance) provides, if the court so directs, as it did in the case at bar, that the Superintendent of Insurance shall be vested by operation of law with the title to all of the property and deal with the property and business in his own name as Superintendent. Under such circumstances, and in accordance with the express provisions of section 6 of the General Corporation Law, the sections of the Insurance Law become exclusively controlling. The corporate existence, therefore, of National Surety Company ceased on June 1, 1934, and was not continued for any period thereafter by the general provisions of the General Corporation Law of the State of New York. (§ 29.)

Claimant further contends, by reason of the existence of certain statutes in the State of Mississippi, providing that the corporation shall continue in existence for the purpose of payment of its debts for three years after its charter has been annulled, that the service of process upon the Super- > intendent of Insurance of the State of Mississippi, who had ! been designated as agent for that purpose by the National , Surety Company, as a condition of its doing business in Mississippi, was good, even though the National Surety Company had been judicially dissolved in the State of its incorporation. When permission was granted to the National Surety Company by the State of Mississippi to do business in that State this did not change the fact that the State authorities were chargeable with knowledge of the statutes of the State of New York under which the National Surety Company was incorporated. This included knowledge that the State of its creation had the power to order its destruction and death. The statutes of a foreign jurisdiction can in no way modify, change or nullify the effectiveness of the dissolution of a corporation in the State of its incorporation. Even though the statutes of Mississippi attempt to continue the corporate life of all corporations for a time after dissolution, so far as dissolved foreign corporations are concerned, such statutes apply only to winding up the business of such corporations in so far as it may be carried on in the foreign jurisdiction. (American Law Institute, Restatement of the Law of Conflict of Laws, § 158, ch. 6, subd. d, p. 230.) Thus judgments entered against the dissolved corporation in a foreign jurisdiction are null and void in the State of its incorporation, and valid, if at all, only as to local assets found in the foreign jurisdiction. Statutes of the State of Mississippi providing for the continuance of the corporation after dissolution do not have the effect of giving life to a corporation which has been judicially declared to be dead in the State of its incorporation. (People v. Globe Mut. Life Ins. Co., 91 N. Y. 174; Martyne v. American Union Fire Ins. Co., 216 N. Y. 183.) And the Supreme Court of Mississippi has confined the effect of a judgment such as that in the case at bar to local assets in the State of Mississippi. (Rawlings v. American Oil Co., 173 Miss. 683.)

Nor may the claim of claimant be sustained by the contention that, because a statutory agent was designated, service upon him was good. This designation was analogous to a power of attorney granted by an individual, which ceases upon the death of that individual. The judgment of claimant, therefore, against National Surety Company in the State of Mississippi, if valid at all in that State, must be restricted to local assets. It has no extraterritorial effect and is void in New York. Being void, it may be subject to collateral attack. (Ferguson v. Crawford, 70 N. Y. 253, 256; Jones v. Jones, 108 N. Y. 415, 423; Matter of Doey v. Howland Co., 224 N. Y. 30, 38.)

In so far as claimant seeks to rely upon the statements contained in its sworn proof of claim, unsupported as they are by any competent testimony and not subject to cross-examination, it is sufficient to say that they have been duly rejected by the liquidator in accordance with the long-established system, of procedure in the determination of such claims. A realistic approach to the matter shows how impossible it would be for the liquidator to have cast upon him through a mere sworn proof of claim the burden of attempting to unearth defenses in foreign jurisdictions concerning matters of which he knows nothing. Each claimant, being in possession of the facts concerning his claim, may not escape the customary burden of adducing proof in support thereof and cast this age-old burden of proof upon the liquidator.

There are several other objections urged to the allowance of the claim, but, in view of our answer to the first question, it is unnecessary to lengthen an opinion with their consideration.

It follows that the order appealed from should be affirmed, without costs.

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

Order affirmed.


text:
    In the Matter of James F. O’Kelly, Appellant, against John W. Hill, as Presiding Justice of the Domestic Relations Court of the City of New York, Respondent.

      Argued April 22, 1940;
    decided May 28, 1940.

      Peter L. F. Sabbatino and Edward J. Fontana for appellant.
    The petitioner, a World war veteran, was entitled, under subdivision 1 of section 22 of the Civil Service Law (Cons. Laws, ch. 7) to a hearing and, therefore, to a review of the evidence. (Matter of Tiffany, 179 N. Y. 455; Matter of Cram, 69 N. Y. 452; Matter of Seeley v. Stevens, 190 N. Y. 158; Matter of Stutzbach v. Coler, 168 N. Y. 416; People ex rel. Hoefle v. Cahill, 188 N. Y. 489; People v. Keeler, 17 N. Y. 370; People v. Dwyer, 215 N. Y. 46; Statutes and Statutory Construction, § 176, p. 245; People ex rel. Shipston v. Thompson, 187 N. Y. Supp. 395; 196 App. Div. 923; 231 N. Y. 541; People ex rel. Ritzenthaler v. Higgins, 151 N. Y. 570; People ex rel. McKeon v. Ludwig, 215 N. Y. 389; People ex rel. Thain v. Constable, 65 App. Div. 176.)

      Samuel M. Birnbaum and Simon L. Miller for American Legion, Department of New York, amicus curiæ.

    Veterans are entitled to the protection of subdivision 1 of section 22 of the Civil Service Law despite the provisions of section 17 of the Domestic Relations Court Act (L. 1933, ch. 482), and the court below should have reviewed the entire dismissal. (People ex rel. Ritzenthaler v. Higgins, 151 N. Y. 570; Davis v. Supreme Lodge, 165 N. Y. 159; People ex rel. Thain v. Constable, 65 App. Div. 176; People ex rel. McKeon v. Ludwig, 215 N. Y. 389; People ex rel. Reilly v. Hoffman, 98 App. Div. 4; People ex rel. Garrity v. Walsh, 181 App. Div. 118; Matter of Byrnes v. Windels, 265 N. Y. 403; Matter of Mafera v. Pasta, 265 N. Y. 552; Matter of Murray v. Blanshard, 265 N. Y. 554.)

      Roy M. Page for Department of New York, Veterans of Foreign Wars of the United States, amicus curiæ.

      William C. Chanler, Corporation Counsel (Jeremiah M. Evarts, Paxton Blair and Henry J. Shields of counsel), for respondent.
    The provisions of the Domestic Relations Court Act govern disciplinary proceedings brought against the court’s employees, including such as are veterans. (People ex rel. Lee v. Waring, 1 App. Div. 594; 149 N. Y. 621; People ex rel. Throckmorton v. McCartney, 28 App. Div. 138; People ex rel. Middleton v. McCartney, 36 App. Div. 39; People ex rel. McNeile v. Glynn, 128 App. Div. 257.) Even if the Civil Service Law be deemed the governing statute, the more stringent requirements which it lays down were fully met. (People ex rel. Doherty v. Board of Police Commissioners, 84 Hun, 64; 148 N. Y. 757.)
   Finch, J.

Petitioner, a probation officer of the Domestic Relations Court of the City of New York, was removed after a hearing upon charges, including bribery and rendering false reports. This proceeding was brought pursuant to article 78 of the Civil Practice Act to review the determination of respondent. In accordance with the Civil Practice Act the case was removed to the Appellate Division in the first instance. (§ 1296.) That court confirmed the determination of respondent and in its opinion stated that petitioner-appellant was accorded all the rights which he had under sections 16 and 17 of the Domestic Relations Court Act (L. 1933, ch. 482).

Petitioner-appellant, an honorably-discharged veteran, contends that he is entitled to the benefit of the provisions of section 22 of the Civil Service Law (Cons. Laws, ch. 7) and that, therefore, he is entitled to review by certiorari.

The Civil Service Law, section 22, provides; “ No person holding a position by appointment or employment in the state of New York, or in the several cities, counties, towns or villages thereof, or in the public school service, who is an honorably discharged soldier * * * having served * * * in the world war, or who is an exempt volunteer fireman * * * shall be removed from such position except for incompetency or misconduct shown after a hearing upon due notice upon stated charges, and with the right to such employee or appointee to a review by certiorari.”

The Domestic Relations Court Act (§ 17) provides:

The presiding justice may remove for cause, upon written charges, any officer or employee of the court in the competitive class of the civil service after due notice of such charges and an opportunity of making an explanation.

“ The board of justices may remove for cause upon written charges duly sustained after a proper hearing, any officer or employee of the court in the exempt class of the civil service after due notice of such charges.

In every case of a removal the true cause thereof shall forthwith be entered upon the records of the court and a copy filed' with the municipal civil service commission. The presiding justice shall also have power to fine and to suspend from duty, either with or without pay, any employee or officer of the court for a period not to exceed thirty days, and to take such other disciplinary measures as may be appropriate.”

By virtue of the provisions of the Domestic Relations Court Act an opportunity of making an explanation is granted to employees who are faced with dismissal. Sectian 22 of the Civil Service Law accords to veterans generally, without specific reference to where they may be employed, the right to a hearing and thereafter review by certiorari. No question is raised that petitioner has been granted a full hearing in the first instance. It is only because of the failure of the Appellate Division to pass upon the facts that petitioner-appellant now complains.

A reading of the two statutes does not reveal any irreconcilable conflict. The Domestic Relations Court Act provides certain safeguards in the removal of employees of that court. The provisions of the Civil Service Law, section 22, provide that as to a particular class of employees, viz., honorably-discharged veterans, there shall be, in addition to the safeguards available to employees generally, the protection of review by certiorari. Thus there is no question here as to which of two conflicting statutes governs the case of petitioner-appellant. On the contrary, the two statutes in question are consistent with one another, and the application of section 22 of the Civil Service Law is not in derogation of the provisions of section 17 of the Domestic Relations Court Act. (Matter of Eisle v. Woodin, 205 App. Div. 452; affd., 238 N. Y. 551. Cf. Matter of Byrnes v. Windels, 265 N. Y. 403.) A different situation was presented in People ex rel. Lee v. Waring (1 App. Div. 594; affd., 149 N. Y. 621). There the question before the court was whether the power of the Commissioner to remove members of the uniformed force, which was first conferred by Laws of 1882, chapter 410 (organizing the department of street cleaning), and amended in 1892 (L. 1892, ch. 269), was to be restricted by the so-called Veterans’ Act (L. 1888, ch. 119), as amended. The court found the power of the Commissioner was not so restricted, saying, This Street Cleaning Act was a special act reorganizing the department. It related to a particular subject, and gave to the head of the department special power to enable him adequately to effect the purpose for which the act was passed. It was necessary to give the commissioners substantially full power of removal in the case of common laborers.” (1 App. Div. at p. 596.)

In Matter of Eisle v. Woodin (supra) the general principle was followed that in case of removal in the absence of a contrary legislative intent, section 22 should be applied where an honorably-discharged veteran or a volunteer fireman is concerned.

In Matter of Byrnes v. Windels (supra) it was held that an Assistant Corporation Counsel was a “ deputy,” and that, therefore, section 22, by its own terms, did not apply.

The order appealed from should be reversed and the proceeding remitted to the Appellate Division to review the determination of the respondent as upon certiorari, with costs to abide the event.

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

Order reversed, etc.


text:
    John J. Nilan, Individually and as Secretary-Treasurer of Local No. 314 of Operative Plasterers and Cement Finishers’ International Association, Respondent, v. Michael J. Colleran, Individually and as President of Operative Plasterers and Cement Finishers’ International Association, et al., Appellants.

      Argued April 15, 1940;
    decided May 28, 1940.

      George Z. Medalie, Harold Stern and Louis Haimoff for appellants.
    The chartering of Local 852 constituted a valid exercise of the discretion of the general executive board; no notice and hearing were required. (Polin v. Kaplan, 257 N. Y. 277; Matter of Haebler v. N. Y. Produce Exchange, 149 N. Y. 414; Loubat v. LeRoy, 40 Hun, 546; White v. Brownell, 2 Daly, 329; Hutchinson v. Lawrence, 67 How. Pr. 38; Fisher v. Keane, L. R. 11 Ch. Div. 353; O’ Keefe v. Local 463, 277 N. Y. 300; Chamberlin, Inc., v. Andrews, 271 N. Y. 1; Nebbia v. New York, 291 U. S. 502; International Hod Carriers, Local No. 426, v. International Hod Carriers, Local No. 502, 101 N. J. Eq. 474; Gonzales v. Archbishop, 280 U. S. 1; People ex rel. Johnson v. New York Produce Exchange, 149 N. Y. 401; Lafond v. Deems,
      81 N. Y. 507.) The requirements .of due process were complied with in the chartering of Local 852. (Matter of Haebler v. N. Y. Produce Exchange, 149 N. Y. 414; People ex rel. Deverell v. M. M. P. Union, 118 N. Y. 101; People ex rel. Holmstrom v. I. D. B. B. Union, 164 App. Div. 267; People ex rel. Brewster v. “Old Guard,” 87 App. Div. 478; People ex rel. Johnson v. N. Y. Produce Exchange, 149 N. Y. 401.) The trial court properly found that the constitution was amended to authorize the general executive board to charter a new local without the consent of Local 314. (Bachman v. Harrington, 52 Misc. Rep. 26.)

      Michael F. Pinto, Joseph M. Leahey and Benjamin F. Karpay for respondent.
    The right to issue new charters does not give to the international unlimited power to grant a charter which deprives an existing local of valuable property rights without due process. (Kehoe v. Leonard, 176 App. Div. 626; Neal v. Hutcheson, 160 N. Y. Supp. 1007; Polin v. Kaplan, 257 N. Y. 277; Krause v. Sander, 66 Misc. Rep. 601; 143 App. Div. 941; Robinson v. Dahm, 94 Misc. Rep. 729; Wachtel v. Noah W. & O. Benevolent Assn., 84 N. Y. 28; Fritz v. Muck, 62 How. Pr. 69; Riverside Lodge No. 164 v. Amalgamated Assn., 13 Fed. Supp. 873.)
   Finch, J.

This is an action for an injunction which arises out of an internal dispute in the Operative Plasterers and Cement Finishers International Association. Plaintiff, a local of the International, No. 314, brings this action against the International and another local, No. 852, to compel the cancellation of the charter issued to Local No. 852 and to restore to Local No. 314 so much of its former territory as has been taken from it and transferred to defendant local.

Local No. 314 was chartered in 1904 with jurisdiction over Queens, Nassau and Suffolk counties. Prior to June 7, 1939, it still retained jurisdiction over all but a small part of Queens, Nassau and Suffolk counties as far as Wading River. Within that territory there is the construction of small homes as well as that of multiple dwellings. No satisfactory progress had been made in the unionization of the small homes projects. One means which was proposed to overcome this condition was the establishment of a secondary union scale for the small homes work, allowing longer hours and less wages than are permitted by the regular union standard. Attempts were made to organize the non-union field, but no successful conclusion was reached. Apparently Local No. 314 would not agree to the principle of a secondary scale. On June 7, 1939, by action of the executive committee of the International, Local No. 314 was deprived of about eighty per cent of its territorial jurisdiction which was transferred to a new local simultaneously chartered by the executive board of the International, and which is known as Local No. 852. There is still left to Local No. 314 a substantial field in which to operate, including the populous communities of Long Island City, Corona, Woodside, and other areas. A communication from the executive board of the International to plaintiff local stated that it was the failure of the latter to organize successfully the non-union field which prompted the action of the executive board. This action was taken by the executive board without notice to Local No. 314 or an opportunity for it to be heard on the question of the proposed action. Since its organization there have been admitted to membership in Local No. 852 approximately 483 persons who theretofore were not members of any local of the International and who were working under non-union conditions inferior to those under which they are presently employed. The action of the International executive board was taken without the consent of Local No. 314, which appealed to the convention of the International Association next following the decisions of the executive committee. At that convention a full hearing was accorded to plaintiff local by the convention, which voted to sustain the executive board.

Prior to the 1937 convention of the International, section 34 of the International constitution provided: “No local shall be organized in any city’s jurisdiction controlled by another local except with the consent of said local.” It has been found by Special Term and affirmed by the Appellate Division upon ample evidence that, at the, 1937 convention the former section 34 of the constitution was repealed and in its place there was adopted the provision which .provided: “Locals to be organized and charters to be issued at the discretion of the executive board.’” Thus the action taken by the executive board was not contrary to the constitution of the International for failure to obtain consent of Local No. 314.

Upon the foregoing facts, Special Term granted judgment enjoining defendants as prayed for in the complaint, upon the ground that the action taken by the executive committee was by way of punishment of Local No. 314, that notice and hearing upon charges are prerequisites to punishment, and that, in the absence thereof, the deprivation of valuable property rights of the plaintiffs is contrary to due process and, therefore, is illegal and void. Special Term was careful to note that the acts of the executive board did not violate the constitution or by-laws of the International Association.

In support of the judgment plaintiff-respondent contends (1) that there has been a breach of the express provisions of the International constitution; (2) that the action of the executive committee involved punishment, and was arbitrary and discriminatory; (3) that Local No. 314 was entitled to notice and hearing of charges before being subjected to punishment; and (4) that there has been no notice and hearing which would satisfy due process. On the other hand, appellants contend (1) that the action in the executive committee was in conformity with the constitution of the International; (2) that the action of the executive committee was taken pursuant to a policy adopted by it and that there was reasonable basis for the action of the executive committee; and (3) that in any event there has been compliance with the requirements of due process.

Whetheb the executive committee was empowered TO CHARTER NEW LOCALS WITHOUT THE CONSENT OF AN existing local. The position of plaintiff is that the provision of the constitution requiring the consent of a local before a new local may be chartered within the territory theretofore covered by the existing local was not repealed by the convention of the International held in 1937. However, the evidence in the record is to the contrary, and, indeed, Special Term, following the preponderance of the evidence, has found against plaintiff on this score. This presented a question of fact, and upon appeal to this court it cannot be held as a matter of law that the constitution was not so amended. Thus, the action of the executive committee was within the scope of the powers conferred upon it by the express terms of the constitution. The constitution and by-laws of an unincorporated association express the terms of a contract which define the privileges secured and the duties assumed by those who have become members.” (Polin v. Kaplan, 257 N. Y. 277, 281.) Since the constitution of the International provides that charters of locals are to be issued at the discretion of the general board,” there remains to be considered whether the executive board has abused the discretion entrusted to it.

Whether there was sufficient foundation for the action of the executive board. Plaintiff contends that the action of the executive board was taken in order to punish plaintiff local, whereas defendants urge that the action was taken as a matter of business judgment in the course of administering the policies of the International. There is a conflict in the record as to the actual motive for the action taken by the executive board.

Clearly the executive board was empowered by the constitution to issue charters in its discretion. Whatever might be the judgment of others, it is the judgment of the executive board which must determine what factors require the issuance of charters and the consequent realignment of jurisdictions of existing locals to accomplish that end. In the case at bar the record reveals that the union was faced with a serious problem in combatting widespread lack of unionization in its field, especially in connection with the small homes problem. The importance of the problem in the territory covered by Local No. 314 was considerable, and clearly a proper subject for some kind of remedial action.

The situation, therefore, is one where the executive board has exercised the power conferred by the constitution, and the power has been exercised for the attainment of a proper object. The question, then, is whether there is any evidence of a reasonable connection between the ends sought to be achieved and the means adopted by the executive board. It cannot be said as a matter of law that the existence of two locals within the territory previously occupied by one may not be a device to solve the problem of unionization in what has been heretofore a predominantly non-union field. Indeed, it has been found that the membership of Local 852 includes at least several hundred workmen who previously belonged to no local of the International and who labored under conditions inferior to those which they have since obtained upon becoming members of Local 852. That is some evidence tending to show a reasonable connection between the action taken by the executive board and the permissible objects of the International. Thus, the action of the executive board may not be assailed on this ground.

But, although reasonable means for a proper objective have been taken by the executive board, its action is attacked as being discriminatory and punitive.

It may well be, as plaintiff contends, that the conditions existing in the territory of Local 314 were no worse than those existing in the jurisdictions of other nearby locals. It may also be that Local 314 was as diligent as other locals in attempting to solve this problem, and, further, that other and more suitable means might have been employed to accomplish the goal which both plaintiff and defendants profess to be theirs. The executive board of the International, perhaps, has not chosen the most effective means or taken the course which would least interfere with existing locals. Plaintiff argues that all these facts condemn the action of the executive board as discriminatory. A complete answer may be found in the fact that the executive board may put to a test on only a limited scale the means adopted to solve a widespread problem. It cannot be required as a matter of law that the executive board should apply the proposed method to all the locals similarly situated or to none at all. Some field must be available for trial and perhaps error. That the plaintiff local may be hurt or subject to such discrimination in the course of putting certain policies of the International into effect is of itself no ground for relief. (O’ Keefe v. Local 463, 277 N. Y. 300.)

Since it has not been shown that the action of the executive board was taken in bad faith and with malice, plaintiff may not succeed. The trial court has not found bad faith or malice and has refused to find that there existed a conspiracy to injure plaintiff. In the absence of any such elements tainting the action of the executive board, the only relevant consideration is whether there is some reasonable basis for the determination of the board to charter a new local within the territory of an existing local. This question has already been considered and no basis discerned which would warrant the courts in setting aside the determination of the executive board.

Since plaintiff is accused of no wrongdoing and no charges have been filed or threatened against plaintiff, and no action, disciplinary or otherwise, is pending or threatened against plaintiff, no question of due process arises. (O’Keefe v. Local 463, supra.) Plaintiff is a constituent member among the locals wherein the International is the superior body. Plaintiff is bound by the constitution and rules of the union. Within those rules plaintiff concededly has had a full and fair hearing before the full convention of the International.

The action of the general executive board in chartering Local 852 and transferring to it a large part of the territory of Local 314 was within the discretion and business judgment of this board by express constitutional provision, and, as shown by the record, was reasonably calculated to promote the welfare of the association although it may have inflicted some hardship and may have been discriminatory as between this Local 314 and other locals similarly situated. (O’ Keefe v. Local 463, supra; International Hodcarriers, Local 426 v. Local 502, 101 N. J. Eq. 474.)

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

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

Judgments reversed, etc.


author:
Finch, J.
      Loughran, J.

text:
    In the Matter of the Claim of Mabelle Gilmore, Respondent, against Preferred Accident Insurance Company, Appellant. State Industrial Board, Respondent.
    Argued April 11, 1940;
    decided May 28, 1940.

      James A. Beha for appellant.
    The employer does not come within the provisions of group 18 of subdivision 1 of section 3 of the Workmen’s Compensation Law. (Jurman v. Hebrew National Sausage Factory, 198 App. Div. 456; Matter of Europe v. Addison Amusement Co., 231 N. Y. 105; Westbay v. Curtis & Sanger, 198 App. Div. 25.)

      JohnJ. Bennett, Jr., Attorney-General (Joseph A. McLaughlin of counsel), for State Industrial Board, respondent.
    The employer comes within the provisions of the Workmen’s Compensation Law and the claimant is entitled to compensation. (Matter of Dose v. Moehle L. Co., 221 N. Y. 401; Matter of Mulford v. Pettit & Son, Inc., 220 N. Y. 540; Dispenza v. John Hancock Life Ins. Co., 238 App. Div. 885; Gurnett v. Boss Co., 181 App. Div. 910; Kingsley v. Donovan, 169 App. Div. 828; Quigley v. Chicago Portrait Co., 234 App. Div. 640; Matter of Skouitchi v. Chic Cloak & Suit Co., 230 N. Y. 296; Matter of Small v. Gibbs Press, Inc., 222 App. Div. 699; 248 N. Y. 513; Brooklyn Children’s Aid Society v. Industrial Board, 256 N. Y. 651; Matter of Hall v. Salvation Army, 261 N. Y. 110; Ward & Gow v. Krinsky, 231 N. Y. 525; 259 U. S. 503.)
   Finch, J.

This is a claim for compensation on account of a death through accident occurring in the course of employment, and the question presented concerns the applicability of the Workmen’s Compensation Law (Cons. Laws, ch. 67). This, in turn, depends upon the construction to be given to the words “ workmen ” or operatives ” regularly employed, as used in that law. (§ 3, subd. 1, group 18.) This question has not yet been decided. Lately we said: “It is not necessary for us finally to define or limit the words ‘ workmen ’ or operatives ’ as used in this subdivision.” (Matter of Europe v. Addison Amusements, Inc., 231 N. Y. 105, 110.)

There is no dispute as to the facts. Defendant is not involved as an insurer but directly as an employer.

William J. Gilmore, a lawyer employed by defendant as an investigator and claim adjuster, was struck by a bicycle as he was about to enter a subway station in the course of his employment and received injuries from which he died nine days later. There were sixteen employees engaged in this kind of work, about seven or eight of whom owned automobiles with which they covered their various territories at least some of the time. The others, of whom decedent was one, did not use a car at all. In so far as the automobiles were used this was done with the knowledge and consent of the employer. An allowance was made for the use of such machines, in one case amounting to approximately twenty dollars per week. Whether an employee, at his option, used an automobile or, instead, the common conveyances, each was reimbursed for his traveling expenses.

Upon the foregoing facts the referee and the Industrial Board awarded claimant appropriate death benefits, holding that the deceased was engaged in a hazardous employment as defined by the Workmen’s Compensation Law (§ 3, subd. 1, group 18). The Appefiate Division affirmed the award with one justice dissenting. ^ j

The Workmen’s Compensation Law provides as follows:

§ 3. Application.
“1. Hazardous employments. Compensation shall be payable for injuries or death incurred by employees in the following employments: * * *
Group 7. Operation of:
“ * * * Gas vehicles * * *
Group 12. Work as:
“ * * * Chauffeurs * * *
“ Group 18. All other employments, except persons engaged in a teaching or non-manual capacity in or for a religious, charitable or educational institution, notwithstanding the definition of employment in subdivision five of section two, not hereinbefore enumerated, carried on by any person, firm or corporation in which there are engaged or employed four or more workmen or operatives regularly, in the same business or in or about the same establishment either upon the premises or at the plant or away from the plant of the employer, under any contract of hire, express or implied, oral or written, * *

It is unnecessary to negative any contention that these claim adjusters may be considered operators of gas vehicles or chauffeurs under groups 7 and 12, since respondent urges on this appeal that the only issue involved is whether the business of the employer comes within the provisions of group 18, subdivision 1 of section 3 of the Workmen’s Compensation Law. This depends, in turn, upon whether the defendant employer has within his employ four workmen or operatives regularly employed. (Matter of Europe v. Addison Amusements, Inc., 231 N. Y. 105; Matter of Dose v. Moehle Lithographic Co., 221 N. Y. 401.) In other words, group 18 does not bring within the application of the provisions of the Workmen’s Compensation Law all employment, but only that where there are regularly employed four workmen or operatives. This is in accord with the purpose and extensions of the Workmen’s Compensation Law. Originally the law was passed for the purpose of meeting a widespread demand among citizens generally that certain occupations should bear the cost of broken bones as well as of broken machines and to protect working men and their dependents from want in case of injury when engaged in certain specified hazardous employment. The Legislature sought to make reasonable compensation for injury sustained or death incurred by reason of such employment as a part of the expense of the lines of business included within the definition of hazardous employments, as stated in the act. (Matter of Post v. Burger & Gohlke, 216 N. Y. 544.) The law was extended by denominating a large list of employments as hazardous. After reciting some seventeen groups, group 18 was written as above. Thus the law was still confined in accordance with its original purpose to the protection of workmen and operatives. May these claim adjusters be considered workmen or operatives so as to bring the business of this employment within the provisions of the law? In ordinary parlance, workmen or operatives are those who perform manual labor or operate machines. The terms are much narrower than the term employee for, while all workmen and operatives are employees, only a small portion of all employees are workmen or operatives. Funk & WagnalTs Standard Dictionary of the English Language, 1937, defines operative ” as “a person who is employed as a workman in a mill or factory; a skilled workman, an artisan; especially one who operates a machine in a factory,” and “ workman ” as “ a man employed in manual labor; an artisan mechanic; sometimes a skilled or accomplished mechanic; artisan.” Webster’s Dictionary, 1937, defines “ workman ” as “ a man employed for wages in labor; often, a skilled artificer or laborer,” and operative ” as “ one who or that which operates; a worker; artisan; mechanic.” Before Honorable Charles S. Whitman, then Governor of the State, signed the bill in 1918, which added the forerunner of the present group 18 to the list of compensable employments, he asked for the opinion of the Attorney-General as to the meaning of the phrase workmen or operatives ” and received the following reply: “ The term ‘ workmen or operatives ’ would seem to have a more restricted meaning than that of ' employee,’ and to refer to laborers, mechanics’ or artisans who do manual labor, and not to clerks or those engaged in professional work, and it is my opinion that the courts will so construe it” (16 State Dept. Rep. 346, 347), and thereupon the bill was signed and became law. Nothing has been shown to change the ordinary meaning of these terms.

The deceased employee was a lawyer employed as a claim adjuster by this defendant, a casualty insurance company, a non-hazardous employer, and the employee engaged in a non-hazardous occupation. But respondent urges that the business became hazardous within the meaning of the statute because more than four of these professional men, engaged to perform professional duties only, namely, the investigation and adjustment of claims, voluntarily and for their own convenience used their own automobiles instead of public conveyances, such as trolley cars, subways, taxicabs, etc., and thus were converted into manual laborers or operatives upon machines. The mere statement of the contention would seem to contain its own refutation. These claim adjusters were not employed as laborers or operators on machines and did not do such work. Nor were they regularly employed as such, but were employed as claim adjusters and continued at all times to work as such. As their work remained as insurance claim adjusters neither they nor their employer were engaged in a hazardous occupation or classified as such under any provisions of the Workmen’s Compensation Law. It is also to be noted that the employer did not have control, supervision or direction of the operation or use of these automobiles by these claim adjusters. Their duties and the work that they did for the defendant and the salary paid to them were exactly the same whether, incidental to their work as claim adjusters, they used public conveyances or their own automobiles. In Matter of Westbay v. Curtis & Sanger (198 App. Div. 25; affd., 232 N. Y. 555) it was held that the runners of a Wall street brokerage firm were not workmen or operatives. Thus a distinction between employees and workmen or operatives would seem to have been settled in the law of this State (Matter of Europe v. Addison Amusements, Inc., 231 N. Y. 105; 71 C. J. 417), and, although the Legislature has reclassified the entire field of compensable employments, there has been no modification or redefinition of the terms “ workmen ” or “ operatives.” The use of these terms, therefore, falls within the recognized principle that where terms have been defined by the courts and the Attorney-General, it is presumed that the continued use of those terms by the Legislature subsequent to the definitions is in accordance with the meaning thus defined.

The order of the Appellate Division and the award of the State Industrial Board should be reversed and the claim dismissed, without costs.

Loughran, J.

(dissenting). Except in situations unrelated to this case, the statute classifies as hazardous all employments in which there are regularly engaged or employed four or more “ workmen or operatives.” (§ 3, subd. 1, group 18.)

This employer is an insurance corporation. Sixteen persons were employed by it as so-called claim adjusters. Some seven or eight of them regularly operated their own automobiles in going about their everyday work. They were workmen or operatives ” while they drove their cars. They did this with the consent and at the expense of the employer. The circumstance that they were not required to do so is of no moment, for their employment included whatever the employer suffered or permitted them to do therein. (Workmen’s Comp. Law, § 127; Labor Law [Cons. Laws, ch. 31], § 2, subd. 7.) Had one of them been injured when he was thus operating his automobile he would doubtless have had the right to compensation. (See Matter of Mulford v. Pettit & Sons, 220 N. Y. 540.)

This situation, as I see it, called for the coverage commanded by the statute, as the court below has held.

Suppose the employer had hired four chauffeurs to carry some of its adjusters on their regular rounds. All its employees would then have been under the protection of the statute. (§ 3, subd. 1, groups 7, 12, 18.) Actually the employer suffered or permitted each of more than four of its adjusters to act as his own chauffeur in the routine course of his work. In essence the actual case does not differ from the case supposed; the hazards which the law was intended to alleviate are the same in both situations.

The opinion of Judge Finch, as I apprehend, commits the court to the proposition that the statute has no application to an employer whose business is non-hazardous, even though the employer permits four or any greater number of his employees regularly to engage in a hazardous occupation as a concomitant of their otherwise non-hazardous employment. Such a ruling seems to me to be an appreciable infraction of the letter and of the reason of the statute.

I think the Appellate Division was right and that its order should be affirmed.

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

Order reversed, etc.


text:
    George H. Brick et al., Doing Business under the Firm Name of Brick & Ballerstein, Appellants, v. Cohn-Hall-Marx Company, Respondent.

      Argued April 25, 1940;
    decided May 28, 1940.

      Norman Winer and Eugene L. Bondy for appellants.
    The complaint states a cause of action. (Van Alstyne v. Van Slyck, 10 Barb. 383; Brooklyn Public Library v. City of New York, 222 App. Div. 422; 250 N. Y. 495; 1 Williston on Contracts [Rev. ed., 1936], § 208; American Law Institute, Restatement of the Law of Contracts, §§ 98, 99; Transbel Investment Co. v. Venetos, 279 N. Y. 207; Cammack v. Slattery & Bro., Inc., 241 N. Y. 39; Atlantic Dock Co. v. Leavitt, 54 N. Y. 35; Rusling v. Union Pipe & Construction Co., 5 App. Div. 448; 158 N. Y. 737; Starita Co. v. Compagnie Havraise, 52 Fed. Rep. [2d] 58; Drexler-Rochester Properties, Inc., v. Paris, 236 App. Div. 409.) The demurrer determined a question of pleading and does not deprive plaintiffs of the right to plead anew. (Richard v. American Union Bank, 225 App. Div. 634; 253 N. Y. 166; Cohen & Sons, Inc., v. Lurie Woolen Co., 232 N. Y. 112; Stowell v. Chamberlain, 60 N. Y. 272; Porter v. Kingsbury, 77 N. Y. 164; Hoag v. Town of Greenwich, 133 N. Y. 152; Marnell v. Morgan, 65 Cal. 575; Gilmer v. Morris, 46 Fed. Rep. 333; Bonnifield v. Price, 1 Wyo. 223; McNutt v. Hilkins, 80 Hun, 235; Jackson v. McWilliams Dredging Co., 76 Fed. Rep. [2d] 795.) No prior admissions of the plaintiffs bar this suit. (Lloyd v. R. S. M. Corp., 251 N. Y. 318; Lefler v. Clark, 247 App. Div. 402; Kidder v. Hesselman, 119 Misc. Rep. 410.)

      Melvin A. Albert and Milton C. Weisman for respondent.
    The Court of Appeals passed upon the contract here sued upon and held it to be a simple contract barred by the six-year Statute of Limitations upon which judgment was entered. Such judgment forever bars action upon the contract. (Brick v. Cohn-Hall-Marx Co., 276 N. Y. 259; Queen v. Benesch, 191 App. Div. 83; Malco Trading Corp. v. Mendelson-Silverman, Inc., 240 App. Div. 322; Sonino v. Magrini, 225 App. Div. 536; Glahn v. Clark, 251 App. Div. 747; Classic Theatre Corp. v. Amster, 123 Misc. Rep. 344; Hollenbeck v. Aetna Casualty & Surety Co., 215 App. Div. 609; Wille v. Maier, 256 N. Y. 465; Stowell v. Chamberlain, 60 N. Y. 272; Steinback v. Relief Fire Ins. Co., 77 N. Y. 498; Schmidt v. Merchants Dispatch Transportation Co., 270 N. Y. 287; Schuylkill Fuel Corp. v. Nieberg Realty Corp., 250 N. Y. 304.) A judgment having been entered predicated upon the pleaded admission of the plaintiffs in the first action that the contract here sued upon is a simple contract barred by the Statute of Limitations, plaintiffs are bound by such pleaded admission and the judgment predicated thereon is res adjudicata. (Brooklyn Public Library v. City of New York, 250 N. Y. 495; Miller v. Union Switch & Signal Co., 13 N. Y. Supp. 711; 132 N. Y. 562; Grothier v. Trustees of New York, 19 App. Div. 586; Syragusa v. Metropolitan Life Ins. Co., 248 App. Div. 809; Levy v. Delaware, L. & W. R. R. Co., 211 App. Div. 503; Matter of Tuduri, 156 Misc. Rep. 317; Matter of Miller, 162 Misc. Rep. 563; Ward v. Davega City Radio, Inc., 163 Misc. Rep. 335.) The contract annexed to the complaint reveals the absence of any recital therein of an intention to seal and reveals that the defendant did not affix a seal. Plaintiffs’ allegations of an intention to seal by the defendant are incompetent and the judgment below dismissing the complaint should be affirmed. (Weeks v. Esler, 143 N. Y. 374; Empire Trust Co. v. Heinze, 242 N. Y. 475; Matter of Pirie,
      198 N. Y. 209; Transbel Investment Co. v. Venetos, 279 N. Y. 207.)
   Finch, J.

This is an appeal by leave of the Appellate Division certifying that a question of law is involved which should be reviewed by this court.

Defendants move to dismiss the complaint upon three grounds, (1) under rule 106, that upon its face it fails to state a cause of action, (2) under rule 107, that a prior adjudication had determined the same cause of action between the parties, and (3) that under section 476 of the Civil Practice Act, prior admissions by plaintiffs barred this action.

To paraphrase, in brief, the complaint in the first action (Brick v. Cohn-Hall-Marx Co., 276 N. Y. 259): it was alleged that plaintiffs and defendants entered into an agreement in writing which was annexed to the complaint, and which provided that, in order to settle patent litigation, defendant would pay to plaintiffs throughout the life of the patent so much per package for each package sold by defendant, its subsidiaries or licensees; that defendant would keep accurate books showing the number of packages used and send quarter-annually statements and royalties due; that subsequently, defendant used or licensed the use of packages exceeding 300,000 in number but paid to plaintiffs royalties on only some 67,000, thus owing plaintiffs the difference in royalties; that defendant sent statements intended to induce plaintiffs to rely thereon, and to refrain from suing, but these statements were knowingly false; that defendant kept false books to prevent detection of the falsity of the statements; that plaintiffs relied on the statements and permitted the six-year Statute of Limitations to run on the cause of action for breach of contract; that except for the fraud, plaintiffs would have sued; but because of the fraud, plaintiffs lost their right to sue for the breach, as the six-year Statute of Limitations had run; that plaintiffs subsequently discovered the fraud in February, 1936, and demanded payment of the amount due with interest. Upon appeal to this court, it was held that, in so far as the Statute of Limitations was concerned, the cause of action was based on simple contract and was barred by the Statute of Limitations applicable to simple contracts. (Brick v. Cohn-Hall-Marx Co., 276 N. Y. 259.)

Plaintiffs thereupon served a second complaint so as to plead that the same agreement, involved in the first action, was under seal, in that the president of defendant, in signing on behalf of defendant, adopted the seal of plaintiffs and acknowledged to a notary public that he signed and sealed the instrument by order of the board of directors of defendant. The agreement was again annexed to the complaint. Then follow allegations of the use by defendant of 300,000 packages, the rendering of accounts and payment to plaintiffs for the use of only some 67,000, thus leaving due the said amount of royalties unpaid for, with interest. In other words, this second suit is for breach of covenant. Defendant moved to dismiss this second complaint upon the grounds set forth above, and this motion was granted by the Special Term. The Appellate Division, first judicial department, unanimously affirmed the order, but granted leave to appeal to this court.

First. Little need be said to show that the present complaint states a cause of action. It has long been settled in this State, as well as in other jurisdictions, that one party to a contract may adopt the seal of the other party to the contract without independently affixing any seal whatsoever. (Cammack v. Slattery & Bro., Inc., 241 N. Y. 39; Brooklyn Public Library v. City of New York, 222 App. Div. 422; affd. on other grounds, 250 N. Y. 495; Van Alstyne v. Van Slyck, 10 Barb. 383; American Law Institute, Restatement of the Law of Contracts, §§ 98,99; 1 Williston on The Law of Contracts [Rev. ed.], § 208.) In Cammack v. Slattery & Bro., Inc. (p. 45), we said: “ The original contract recited that it was under seal and while only the seal of the defendant as a matter of fact was attached, it is well settled that under such circumstances the party whose seal is not attached is to be regarded as having adopted the seal which has been affixed,” and it has been stated that A corporation as well as an actual person may adopt as its seal to a document anything which is capable of being adopted as a seal by a natural person, even though the corporation have a special seal which it ordinarily uses.” (1 Williston, op. cit. § 208.)

Where the instrument recites that one party has sealed, and it is not recited that the other has sealed, external evidence of an adoption may be offered and the allegations of a complaint to that effect are sufficient against demurrer. (Brooklyn Public Library v. City of New York, 222 App. Div. 422; affd., 250 N. Y. 495; 1 Williston, op. cit. § 208.)

Second. A more difficult question is whether the decision of this court in the previous case (Brick v. Cohn-Hall-Marx Co., supra) between the same parties may be set up as a bar to the present action. By section 482 of the Civil Practice Act, where a final judgment dismisses the complaint before the close of the plaintiff’s evidence, a new action is not prevented for the same cause unless the prior judgment expressly declares that it is rendered upon the merits.

No question of a judgment on the merits arises in the case at bar, as the complaint heretofore has been dismissed upon motion before trial on the ground that plaintiff had declared upon a simple contract, as to which he admitted the six-year statute was applicable and that that time had expired.

The granting of such a motion to dismiss corresponds to the sustaining of the old demurrer and, ordinarily, such action on the part of the court permits a plaintiff to replead his cause of action anew, upon supplying the omissions or remedying the defects, fatal to the earlier complaint or declaration. (Richard v. American Union Bank, 253 N. Y. 166; Cohen & Sons v. Lurie Woolen Co., 232 N. Y. 112; Hoag v. Town of Greenwich, 133 N. Y. 152; Porter v. Kingsbury, 77 N. Y. 164; Gilmer v. Morris, 46 Fed. Rep. 333; 2 Freeman on the Law of Judgments [5th ed. 1925], § 745; 34 C. J. 797.)

The judgment in the first Brick case, however, although not upon the merits, may at least be conclusive as to the exact point raised and decided. (2 Freeman, op. cit. §§ 688, 745; 15 R. C. L., Judgments, § 431, p. 955.)

We must determine, therefore, whether the previous adjudication in this same case necessarily decided that the contract incorporated in the complaint in that action could not be considered under seal. Clearly, it did not. Where it does not appear from an inspection of the instrument that there was a seal affixed by the party charged with sealing, and an intention so to seal, the question whether there was a sealing is one of fact (Transbel Investment Co. v. Venetos, 279 N. Y. 207), and the allegations necessary to form a basis for proof of this must be contained in the complaint. (Civ. Prac. Act, § 241.) While the contract was annexed to the first complaint, there was no allegation that it was under the seal of defendant. Therefore, the issue as to sealing was neither posited before, nor answered by the judgment of this court. Consequently, the prior dismissal, not on the merits, is no bar to the filing of a new complaint supplying the omissions which occasioned the previous dismissal.

Third. Since in the prior complaint it was alleged that the six-year Statute of Limitations had barred plaintiff’s suit upon the agreement and this statute would apply to a simple contract, as distinguished from a sealed obligation, it is contended that, inferentially there was an admission that there had been no sealing on the part of defendant. This alleged admission ” is the basis of the motion to dismiss under section 476 of the Civil Practice Act.

The allegation of plaintiff in the first suit, that the cause of action was barred by the six-year statute, might well be considered only the assertion of an erroneous legal conclusion. Such assertions have long been denied the dignity of an estoppel against the party making them. (Chatfield v. Simonson, 92 N. Y. 209; Union Bank v. Bush, 36 N. Y. 631; Howell v. Garrett & Co., 218 App. Div. 322.) But even if the allegations of the first complaint be considered factual in nature, short of an election of remedies, the plaintiff is not irrevocably bound by every assertion of fact made by him in support of a legal theory which he believes will provide him with the desired remedy. (Stowell v. Cham berlain, 60 N. Y. 272; McNutt v. Hilkins, 80 Hun, 235.) For example, if the plaintiff had at first declared for breach of covenant, and had failed for lack of proof of a sealing by defendant, no one would deny the right of plaintiff to bring another action on simple contract, if the suit was timely. This shows the nature of the so-called admission. At best, as in the case at bar, the subsequently contradicted allegations may be used for the purpose of impeaching or attacking the credibility of the party who made them. (Jackson v. McWilliams Dredging Co., 76 Fed. Rep. [2d] 795 ]C. C. A., 5th, 1935].) It may not be held that the assumptions for the purposes of one suit must be considered admissions in a second, within the strict requirements for a dismissal under section 476 of the Civil Practice Act. (Cf. Lloyd v. R. S. M. Cory., 251 N. Y. 318.)

It follows that the judgments should be reversed and the motion denied, with costs. (See 283 N. Y. 772.)

Lottghran, Rippey, Sears, Lewis and Conway, JJ., concur; Lehman, Ch. J., taking no part.

Judgments reversed, etc.


author: Conway, J.

text:
    In the Matter of Sara M. Frank. Edgar A. Samuel et al., as Administrators with the Will Annexed of the Estate of Sara M. Frank, Deceased, Appellants; John F. Keating, Respondent.

      Argued April 9, 1940;
    decided May 28, 1940.

      Edgar A. Samuel, as administrator, in person, appellant.
    This proceeding abated on the date of the death of Sara M. Frank, prior to any inquisition. The Supreme Court was powerless, therefore, to substitute the administrators c. t. a. of the estate as parties in this proceeding in Mrs. Frank’s place and stead. (Hughes v. Jones, 116 N. Y. 67; Boschen v. Stockwell, 224 N. Y. 356.) The Supreme Court never acquired jurisdiction of the property of Sara M. Frank in this proceeding. Nor could such jurisdiction be acquired after her death. (Carter v. Beckwith, 128 N. Y. 312; Hughes v. Jones, 116 N. Y. 67; Finch v. Goldstein, 245 N. Y. 300; Matter of Blewitt, 131 N. Y. 541; Matter of Bischoff, 80 App. Div. 326; Matter of Clapp, 20 How. Pr. 385; Matter of Hall, 75 Misc. Rep. 71.) There is no inherent power to award an allowance to the respondent. The authority to make allowances is purely statutory. Power to award an allowance cannot be spelled out solely from the respondent’s designation and activity. (Livingston v. Ward, 248 N. Y. 193; Matter of Robinson, 160 N. Y. 448; Downing v. Marshall, 37 N. Y. 380; Steinkamp v. Bristol Holding Co., 241 App. Div. 272.) There is no statutory authority for the allowance made to the respondent. In fact, no allowances may be made in a proceeding of this character unless and until there has been an adjudication of incompetency. (Hughes v. Jones, 116 N. Y. 67; Carter v. Beckwith, 128 N. Y. 312; Matter of Bischoff, 80 App. Div. 326; Sander v. Larner, 101 App. Div. 167; Matter of Blewitt, 131 N. Y. 541; Matter of Ferne, 5 Ves. Jr. 852; Matter of Loveday, 1 DeG., M. & G. 275; Glover v. Glover, 1 Mer. 269; Anonymous, 4 DeG. & J. 103.)

      Alfred Rathheim, as administrator, in person, appellant.
    Although the power to appoint a special guardian is inherent, the power to award allowances is altogether statutory. Since there is no statute granting to the court power to make an allowance such as the court below granted to Mr. Keating, the grant was improper and constituted error. (Livingston v. Ward, 248 N. Y. 193; Matter of Robinson, 160 N. Y. 448; Downing v. Marshall, 37 N. Y. 380; Steinkamp v. Bristol Holding Co., 241 App. Div. 272.)

      John Caldwell Myers and John F. Keating, in person, for respondent.
    The Supreme Court had both inherent and statutory power to appoint a special guardian in this case. (Wurster v. Armfield, 175 N. Y. 256; Sporza v. German Sav. Bank, 192 N. Y. 8; American Mortgage Co. v. Dewey, 106 App. Div. 389; Bernstein v. Bernstein, 188 App. Div. 276; Wurlitzer Co. v. Williams, 123 Misc. Rep. 777; Matter of Haynes, 82 Misc. Rep. 228.) The Supreme Court, having the inherent and statutory power to appoint a special guardian, had inherent and statutory power to fix the guardian’s compensation and direct its payment out of the property or estate of the alleged incompetent. (Union Ins. Co. v. Van Rensselaer, 4 Paige, 87; Fearns v. Young, 10 Vesey, 184; Matter of Tucker, 29 Misc. Rep. 728; Matter of Lofthouse, 3 App. Div. 139.)
   Conway, J.

On February 19,1937, an ex parte order was made at Special Term, on the petition of a niece, initiating a proceeding for the appointment of a committee of the person and property of one Sara M. Frank, an alleged incompetent person. The order contained a direction that notice of the application be served upon the respondent Keating, who was designated special guardian upon filing his consent and affidavit of responsibility. He qualified and took action, which we shall assume to have been helpful, in an endeavor to protect and safeguard the property of the alleged incompetent. On May 17, 1937, an order was made directing an inquisition into the matters set forth in the petition. August 10, 1937, was finally set as the date for the commencement of the inquisition. Mrs. Frank died on August 1, 1937.

There is presented the question whether the court at Special Term had power, acting summarily in this special proceeding, (1) to fix and allow a fee to the special guardian payable from the estate of the alleged incompetent; (2) to substitute in her place the administrators with the will annexed; (3) to order the payment of a fee from the estate and that the incompetency proceeding be closed and terinitiated, upon such payment. We think there was no such power.

Upon the death of Sara M. Frank the special proceeding abated. Section 82 of the Civil Practice Act provides, in part: “ A special proceeding does not abate by any event if the right to the relief sought in such special proceeding survives or continues.” Here the right to the relief ceased upon the death of the alleged incompetent. As was said in Hughes v. Jones (116 N. Y. 67, 77): The primary object of the proceeding is not to benefit any particular individual, but to see whether the fact of mental incapacity exists, so that the public, through the courts, can take control. * * * When that is found, the care of the person and estate belongs to the court. Unless that is found the court has no further jurisdiction, whatever else may be found. No other inquiry can become material except from its relation to that question.” (Italics added.)

The only provision of the Civil Practice Act which in any wise permits interference by the court with the property of an alleged incompetent prior to the adjudication and appointment of a committee is section 1362. That is by an injunction restraining one who has acquired real or personal property, without adequate consideration, from an alleged incompetent during the period of alleged incompetency, from disposing of or incumbering such property or confessing judgment. The injunction continues during the pendency of the proceeding for the appointment of the committee and may, in the discretion of the court, continue for ten days after the appointment. Such application for injunctive relief was not made herein.

It is clear that the court never acquired jurisdiction of the property of the alleged incompetent. (Matter of Giles, 11 Paige, 638; Matter of Clapp, 20 How. Pr. 385, 388; Matter of Blewitt, 131 N. Y. 541; Carter v. Beckwith, 128 N. Y. 312; Finch v. Goldstein, 245 N. Y. 300, 303.)

In Finch v. Goldstein (supra) it was said by Judge Crane, writing of one subsequently adjudged incompetent: “ Until the appointment of a committee neither the State nor any one else has any power or control over his property or any authority to act in his behalf. He alone remains in possession of his property and can dispose of it.”

Section 1373 of the Civil Practice Act reads as follows: “ Costs and disbursements. Where a final order is made dismissing a petition, the court, in its discretion, may award in the order a fixed sum as costs, not exceeding fifty dollars and disbursements, to be paid by the petitioner to the adverse party. Where a committee of the property is appointed, the court must direct the payment by him, out of the funds in his hands, of the necessary disbursements of the petitioner, and of such a sum for his costs and counsel fees as it thinks reasonable; and, in its discretion, it may direct the committee to pay a sum, not exceeding fifty dollars and disbursements, to the attorney for any adverse party.”

Here we have provision made only for two contingencies: The dismissal of the petition or the appointment of a committee.

Section 1356 of the Civil Practice Act provides: “ The jurisdiction of the supreme court extends to the custody of the person and the care of the property of a person incompetent to manage himself or his affairs * * *.”

Section 1358 of the Civil Practice Act provides that such jurisdiction “ must be exercised by means of a committee of the person, or a committee of the property or of a particular portion of the property, of the incompetent person, appointed as prescribed in this article.”

Since there never was a committee, the Supreme Court never had jurisdiction over the property of the alleged incompetent. To hold otherwise would countenance the taking of property without due process of law.

Reference will be made to other contentions of the respondent: It is claimed that section 207 of the Civil Practice Act contains authority for the payment to the special guardian. That section applies to an infant or incompetent person. It does not mention an alleged incompetent. Rule 285 of the Rules of Civil Practice provides that in all proceedings for the appointment of a committee the alleged incompetent shall be designated as “ an alleged incompetent person,” and that after the appointment of a committee he shall be designated as “an incompetent person.”

So, also, rule 44 of the Rules of Civil Practice prescribes the duties of a person designated to receive a copy of a summons on behalf of a defendant in an action. Section 226 of the Civil Practice Act refers to service of a copy of a summons upon the person designated to receive it on behalf of a defendant in an action.

The order of the Appellate Division and that of the Special Term should be reversed and the motion denied, with costs in all courts.

Lehman, Ch. J., Lotjghran, Finch, Rippey, Sears and Lewis, JJ., concur.

Orders reversed, etc.